Report of Relations with Bankers Committee The work of your committee this year has been principally along the line of establishing a point of contact with bankers in order that we may let them know what the National Electric Light Association stands for. We were received most cordially and courteously by the Executive Committee of the Investment Bankers Association. A special committee, headed by Mr. O. B. Willcox, of Bonbright & Company, was appointed by their Association to co-operate with your committee. Mr. Adinsell, of Harris, Forbes and Company, is now chairman of this committee, taking the place of Mr. Willcox, who recently resigned. Your committee was successful in inducing the Investment Bankers Association in convention at Boston to pass a resolution pledging its co-operation with the publicity work of your National Electric Light Association. A copy of their resolution appeared on the back of a series of pamphlets that were issued by the Publicity Department of your Association. Approximately four hundred thousand of these pamphlets were distributed by the various member companies of your Association to their stockholders and sixty thousand distributed by the Investment Bankers Association to investors in securities of public utilities. vestment Bankers Association and your committee to discuss finance and further general publicity to prospective investors in public utilities securities. Through the influence of your committee a resolution was adopted by the Bankers Association in Convention committing it to state regulation and a square deal for public utilities as against home rule. Your committee feels that it has laid the groundwork for a very close working co-operation with the Bankers Association. The incoming administration of your Association on public relations will no doubt receive a very cordial reception from the various Bankers Associations, and be favorably impressed with their spirit of co-operation. In answer to the suggestion made by Mr. Ballard your Committee has been approached by one of the Vice-Presidents of one of the largest banks in New York, indicating a desire on his part to become a member of your committee. This is a very encouraging sign and indicates that the bankers are in touch with our work. There should be a keener desire on the part of the member companies of your Association to co-operate with the Publicity Department of your Association in the free distribution of their good will advertising. We have in the Publicity Department of your Association one of the livest organizations of its kind in the country, working twenty-four hours each day to assist your member companies in establishing friendly relations with the public. The material turned out is of excellent quality and high grade, and the Publicity Department should be encouraged by the more generous subscription from your member companies for the material turned out by them. Respectfully submitted, Your committee induced the Investment Bankers Association to extend an invitation to Mr. Carl D. Jackson, Public Utility Commissioner of Michigan, to make an address before their Boston Convention on public utility securities. This very excellent address was distributed by your Association to the member companies. A joint program is now under way with the In RELATIONS WITH BANKERS COMMITTEE JOHN F GILCHRIST THE CHAIRMAN: The report is now before you for discussion, gentlemen. MR. BALLARD: I have listened with a great deal of interest to Mr. Sloan's report. It reminds me of a suggestion which I had intended to make to Mr. Sloan but overlooked, but I will make it now for what it is worth. I believe that the tiein with the bankers of the country is such that the Investment Bankers Association probably would be willing to arrange for memberships in this Association of ours and particularly the Public Relations Section. I would like to submit for consideration a recommendation to the next administration of the Public Relations Section for some arrangement under which we might have in our Association, and in this Section of the Association, members from the Investment Bankers and that the setup of the work in this Public Relations Section include a Bankers' or Investment Section. HT SANDS FRANK W. SMITH: While Mr. Sloan was making his report it occurred to me you might be interested in a local detail in New York City, that is, the work of two institutions there with which I am familiar, namely, the Henry L. Doherty organization and the National City Company. The Henry L. Doherty Company, so far as New York is concerned, and so far as it has come to my attention, were the pioneers in organizing among their bond and security sales force visits to the local power stations. During the last year that organization has sent five delegations of bond and security salesmen to the plants of the United Company in New York City. They visit the stations in groups of ten to fifty salesmen. There they are received by a committee of the company, provided with guides and descriptive pamphlets of the station and are instructed in some of the details. Quite recently the National City Company carried on the same. work and within the last three months they have had two groups of salesmen and are planning to send other groups. I believe they are doing that in some of the other plants in New York City. I think that is a matter that the member companies in other cities might interest the bankers in. They have the theory, which I believe is quite correct, that in order to make an effective salesman of securities he ought to know something about the thing he is talking about, and when he becomes familiar with the plant and recognizes the difference between a turbine and a generator and some of the other details he is much more able to present his proposition to a prospective customer. JOHN C. MELLETT: The meeting might be interested in knowing that the state committees are able to co-operate with the utilities and the banks in putting over this same kind of work. Through the offices of our Association the biggest national bank in the state of Indiana has printed a series of advertisements showing what the utilities mean to the prosperity of the community. They have prefaced this series of advertisements with an advertisement showing that a bank could not be prosperous unless the community was prosperous, and the community in turn could not be prosperous without sound utilities. Then the second largest national bank in the state did the same thing; at Fort Wayne, as another instance, the largest investment banking company in Indiana is distributing our pamphlets to all of its mailing lists, and again the bankers' magazine is glad to have all of our material, all the utility information that we put out, and it prints a great deal of it in the magazine that goes to all the bankers. It is just another way in which the state associations can help out in the general work. THE CHAIRMAN: I apologize for not calling on you when we had the paper up. Is there any other discussion on this very interesting subject? MR. SLOAN: In answer to the suggestion made by Mr. Ballard the Committee has been approached by one of the Vice-Presidents of one of the largest banks in New York indicating a desire to become a member of this committee, which is a very encouraging sign and indicates that the bankers are with us. There should be a keener desire on the part of the member companies of your Association to cooperate with the publicity department of the National Electric Light Association in the free distribution of the good-will advertising material. We have in the publicity department of the N. E. L. A., one of the livest organizations in the country, working 24 hours each day, to assist your member companies in establishing friendly relations with the public. The material turned out is high grade and they should be encouraged. THE CHAIRMAN: Gentlemen, inasmuch as we require from three to five dollars of new money to do a dollar's worth of gross business it is very evident that we are continually in need of money for expansion, and I believe that every company, whether large or small, should aim to do some of its financing locally. I would like to refer to Mr. Sloan's remarks about these pamphlets. I presume a good many in the room have not seen them and they can be seen at our exhibit on the Mezzanine Floor. They are really very attractively gotten up and they will be read by the customers who re ceive them. I have an announcement to make. Tomorrow afternoon, Thursday, there will be a meeting for the purpose of a general discussion of the subject. of developing a central market for the sale and purchase of public utility securities. We will now hear the report of the Committee on Relations with Regulatory Bodies, by Mr. Ballard, of Los Angeles. Report of Relations with Regulatory Bodies Committee MR. BALLARD: Early in the administrative year this committee for which I am now reporting made a canvass of the situation throughout the United States with regard to the real relation of the companies to our regulatory bodies. That canvass was made by correspondence, each one of the three members of the committee taking part of the country. That course probably was the only one open to us since whoever arranged this committee did a real geographic job in putting the Chairman in California, another member in Boston and the third member in Kansas City. As a result of that canvass throughout the country we have found that on the whole the relation of the companies with regulatory bodies was very good, but there were some things which we thought would bear some discussion in a frank and open way, and with that in mind a conference was arranged between members. of our Association and members of the National Association of Railway and Public Utilities Commis sioners. That conference was held in Washington. Mr. Aylesworth went down, representing me, and some of the other members of our Association were with him. There was held a roundtable free and frank discussion as to how the utilities and the regulatory bodies might work together toward a common end, which was recognized at that meeting. Your Committee therefore has now merely some observations to make as a result of that canvass and that conference. Our observation is that the work of the regulatory bodies and the work of the properly managed public utilities of the country is one and the same, that is, to provide efficient service at reasonable cost to the public. We observed that in states where companies adopted a frank and open policy of laying all the cards on the table before the regulatory bodies, there the utilities received the best treatment at the hands of those bodies. We observed that in some isolated instances where companies have started to fight the commission and have not been frank or honest with it, it was only natural for the commission to come back at them, and that has occurred. We observed that the majority of the regulating bodies throughout the country recognized the necessities of our business with regard to expansion and the consequent requirements for a great amount of capital, and that particularly during this year 1920 the majority of the commissions throughout the country have publicly announced that the utilities must be kept in sound financial condition to attract the necessary capital for this expansion, that such expansion and such sound financial condition of the utilities is directly in the interests of the public itself. We observed furthermore that the utility commissions desired public support in the utility province. They need, first of all, the practice on the part of the utilities of the good service idea and the open and frank treat ment of the people, the customers, as well as the same policy toward themselves, and they require above all things that the facts concerning our utilities shall be given to the public in every possible way in our power. They do not particularly need, nor do they desire, publicity which says, "We love the commissions," but we may say that we like the commission form of regulation better than we do a form of regulation by politicians occupying jobs as city councilmen and village trustees. I close therefore by saying that the position of the utilities in their relation with regulatory bodies is throughout the country practically sound, that to maintain it and to increase it the utilities must operate honestly, efficiently, frankly and openly, holding nothing back, and that the public must be informed by the utilities themselves as to what they are doing in the interests of all the people. Respectfully submitted, RELATIONS WITH REGULATORY BODIES COMMITTEE HC BLACKWELL THE CHAIRMAN: We would be very pleased to have discussion on this report. If there is no discussion the next report will be the report of the Committee on Upbuilding the Industry. This is a HT SANDS very important committee and the Chairman, Mr. F. R. Coates, of Toledo, has a very interesting report. Report of Upbuilding the Industry Committee The position our industry should hold in the public mind throughout the length and breadth of this country is that of leader. Probably no single agency has ever contributed so much of pleasure, comfort, convenience and efficiency as has electricity. Work has been robbed of its dirt and drudgery; time has been saved, human effort has been reduced to the minimum and the benefits have been beyond the power of any of us to compute. With these things true-and they are generally admitted-why is it that every citizen does not look up to the electric light company in his town as its greatest benefactor; does not willingly take his coat off and go to work when that company is in danger of closing its shutters and calling in the receivers? Should not a company that is bringing such benefits to a city by all the laws of compensation command the leading position in a community instead of being, as is often the case, the dumping ground for all the abuse that can be heaped upon it? These and many other questions of a like nature have occupied the attention of your Committee on Upbuilding of the Industry during the past year. We have endeavored to find a few practical things that all of us can do to give our industry the great impetus it not only needs at this time but deserves at the hands of the public. We are a unit in our belief that one of the surest and quickest ways to upbuild the industry is to stand squarely for adequate rates for the service we sell. All too long have we sat still as we continued to give service either without profit or at an actual loss, fearful to voice our protest either because of promises of relief in the future that had been made to us by our community or because we feared the force of public opinion should we stand squarely on our rights and refuse to give service unless there was a fair return. If we were in any other line of business we would insist that the purchaser of our goods pay us a reasonable profit. In no other way has any man. been known to long continue in business. Because our industry happens to be big does not make it different from any other. If it doesn't pay, the community suffers. Our business is owned by men and women of small means, wage earners everywhere who have been attracted to our securities because of their stable character. Many of these have invested their all. In fact, there are today a million and a half thrifty American citizens who hold our securities, and several millions more are indirectly interested through the investments of banks and insurance companies which only place their money where the principal is safe and returns are reasonably sure. Therefore we have no small obligation resting upon our shoulders. Their confidence must not be destroyed or misplaced. To do so would strike a body blow at the army of thrifty citizens who day by day have set aside a little from their labor and placed it in our hands because of their confidence in our business. Any country is safe with its citi zens saving more than they spend and it is up to every one of us to fight not only for our right but to protect the army of our stockholders. It is ours to tell the story of the confidence of the people in our business. There will always be those who shout from the housetop and live on the fruits of dissension and, by stirring up prejudice and hate, who will seek to spread the moth-eaten heresy of our companies being "owned on Wall street." If such a belief is well grounded in public opinion much of the fault is ours for not having the courage to simply tell the people of our community the whole truth. Right along this same line we can upbuild our industry in no small degree by increasing the number of our stockholders in our own community, selling directly to our own employes first, then to our associates in the industry, and then to the people with whom we do business. Human nature is the same everywhere. We are not so much concerned about the prosperity or the failure of the other fellow's business, but just let somebody try to damage the company or institution in which our own money is invested and we get in a fighting mood in a hurry. People have pride in an institution that is "home owned" or in which many of their fellow-citizens have invested their money. When the municipal When the municipal ownership advocates seek to stir up agitation in that community their seed will fall on soil that will not produce much of a crop when the citizens of that town have a tangible interest in the company. All of us in the business of dealing with the public must lose the timidity that often seems to become a part of a man when he goes into the public utility field. We often lose our courage when we must deal with people in the aggregate. We become afraid to tell the plain facts to a community because we are fearful the people will not believe. When we are attacked unjustly we are afraid to answer for fear of losing our dignity or for fear of being criticized for using the same weapons others use against us. Too long have we stood still under abuse. Unanswered have gone many unjust attacks until many people believe as true things they read and hear about our companies, for anything repeated often enough and allowed to go unanswered becomes a truism in the public mind. We have been quiet so long that today many people believe in the doctrine that because a company is big it necessarily is bad. With careful thought on our part, with constructive publicity, with proper treatment and understanding, many who believe such doctrines could be made to realize the things against which we have to contend and soon would realize that they were actually in partnership with the utility and that any thing which helped either, of necessity, was mutually beneficial. It is of vital necessity, however, before we can gain such a feeling toward us in our community that many of our companies realize the importance of really giving some of the service that many of us talk about so glibly. When any of you go into a department store and order something it is delivered to your home in a few hours. The clerk makes no excuses that there are many ahead of you or that the company's delivery system is overtaxed and you must await your turn. You immediately are made to feel that you have done the company a favor by coming to its store with your patronage. Why should not the same be true with our electric companies? But, speaking candidly, is it? The Application Department rarely can give any definite information as to when a customer's order can be filled or a meter set. Perhaps in one week; perhaps in two. Nearly always there are many orders ahead and the customer is told he must wait his turn, and often he is made to feel that the company has done him a big favor in even letting him make an application. That man leaves the building in a receptive mood to receive the doctrine preached by agitators. Just a little human treatment could have made him a staunch friend-often he leaves committed to the belief that the company is the original "Public be damned" exponent. They The most fruitful field for constructive publicity any company has is in those departments that deal directly with the public, such as Application, Meter Readers, Salesmen, etc., and while many company heads indignantly would deny that their customers were receiving such treatment, careful investigation doubtless would disclose some surprising things. The executives see few of their customers. are known only to a few when the great mass of the people are considered. Those who wield the greatest influence are those who touch the public directly, and the importance of wisely choosing employes for those departments and then keeping a close watch to see that the Service Slogan is not a meaningless phrase is a duty which many of our executives have failed to realize. These may seem like little things, but they are gigantic in their effect upon the public feeling. It may be only a minor detail, a moment's conversation on the telephone, a hasty word, and a friend is lost. Mr. Average Man has a deep-seated conviction that when he calls up the railroad company, the street railway office or the electric light company, he will have to be prepared for a curt answer and of necessity must make his conversation speedy. All these things are within our own power to remedy. They do not necessitate a high priced. publicity man or an expensive newspaper campaign. If we do not first correct those things, whatever we spend in other ways to try and create favorable publicity will be of little avail. We must start at home and first clean out our own dwelling. Many of our companies could do nothing better than to start an old-fashioned courtesy campaign with the idea of acquainting our employes with some of the cardinal principles of common politeness that many of us have entirely overlooked during the pell-mell rush of war excitement. Thorough co-operation on the part of everyone in any way connected with the industry is absolutely vital to its success. This question, and in fact the entire question of upbuilding the industry, is so broad a one that it is impossible for this Committee to do more than report progress at this time. To make a real report upon this question would necessitate a complete survey of the situation, including an exhaustive inquiry into the activities of the several associations to determine exactly what each is doing to bring about co-operation nationally and to pass on the word calling for local co-operation. That this survey and study should be made is very apparent, and we respectfully urge that the Committee on Upbuilding the Industry appointed by the next administration will undertake such a survey and study. We urge this because we believe that when all the facts are known each branch of the industry will understand exactly what other branches are doing toward fostering better feeling, and that knowledge of itself will do much toward crystallizing the spirit of co-operation. Our Committee notes with regret that in many communities, and, in fact, even in entire sections of the country, there exists actual antagonism between the central stations and the electrical contractors, jobbers and manufacturers. These situations generally are purely local and are susceptible of remedy only through local action. It is high time that every company executive should immediately study ways and means to secure in his community that degree of co-operation which alone can mean real success for the industry. Perhaps this can be accomplished through organizing an electrical club or by some similar means. Such a movement cannot be undertaken in any community all at once and its success cannot be assured unless and until individual department heads of Central Stations are directed definitely in a policy of trade relations. with contractors, jobbers and manufacturers, which will cultivate friendship and mutual understanding. Every Central Station executive and employe should be vitally interested in the success of the contractors and jobbers, and certainly every contractor and jobber is directly and indirectly financially interested in the success and prosperity of the Central Station rendering service to and in his community. When local differences in the electrical industry are straightened out; when local relations are pleasant, there can be little question that national relations also will be pleasant. Likewise when local relations within the industry. are satisfactory, then the industry can go before the public with a much better chance of interesting that public in the problems of the industry. We must have that understanding since in these busy days of reconstruction much will be expected from Central Stations. Industry is becoming more and more dependent upon it, and, with the resumption of business, great demands are to be made on our Central Stations. New money must be found to finance improvements and additions, and grave problems face us. Our committee is assured that every Central Station is proud of the part it played in the development of this country and its resources and in the patriotic call answered in our country's time of need. We are ready to face the problems of the future, for we realize full well the obligations that such service places upon us. It is our task to bring to all the people a realization of the duty they owe to our companies, to see that we receive for our labors just compensation, and the time is here when every one of our companies needs to have a stiffening of its backbone; to have the courage to stand up for what are its just rights. The American public believes in fair play. It will stand by the man who fights for the right. It hates a quitter. We can depend upon the public being with us in our fight for only what is right and just, if we make sure that we have left no stone unturned to acquaint it with our problems and just how much our success means to the development and welfare of the community and the nation at large. It is our plain duty to take the public into our confidence, let it realize the constantly growing cost of service, the tremendous advantages of electric service and the consequent duty on its part to protect the continuity of such service by insisting that the Central Station-its company-is protected in its right to charge what such service is worth. We believe that there need be no anxiety for the future and no question about the upbuilding of our industry once we can secure a common recognition on the part of the entire electrical industry and the public it serves of the duty each owes the other. We nonchalantly speak of what electricity has done for the world and no one can minimize it, but do we for a second think of the fields almost untouched that spread before us? In the average city there are entire sections, street after street, where electricity is not being enjoyed, or if it is, people think it is only for light, when in fact the multiplicity of its uses in the home can hardly be reckoned. To reap this harvest is the joint work of the manufacturer, contractor, jobber and Central Station. Working hand in hand, with mutual co-operation, our Committee believes results can be accomplished that will startle all of us and we believe no more practical good for the industry could be achieved than to have a committee composed of these various interests who, this coming year, would look into this problem and formulate ways and means to carry out this idea and show each agency just what it must do to bear its share of the work, necessitated to prepare the fields for the harvest. Your committee is of the opinion that we also have neglected to utilize what could be a powerful army mobilized in our defense-namely the army of salesmen who travel up and down this country for the manufacturers, jobbers and contractors. These men are trained experts, many of them with the knowledge necessary to wield great influence. What they say and do carries weight. |