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From The Militant, Vol. V No. 42, 15 October 1932, p. 3.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
Without electricity modern capitalism would not be writing history in its present form. Modern capitalism rests upon economic relations which have been accelerated, and the exploitation heightened by the use and control of electric power. Electric power grips the entire modern industrial structure. The electrification of the capitalist tools of production has not been completed and will not be completed under capitalism, but in America there are still prospects for forward steps in this line by the capitalist class.
The control of power becomes a burning problem of the ruling class, not only between imperialist nations but also between sections of the capitalist class within the nation. The control of electric-power, like other important capitalist industries has evolved and now confronts the “people” as the Power Trust. It is an octopus of modern capitalism, more powerful in control of life than many other capitalist trusts and more menacing to the “people” – say those out of office to those in it.
The capitalist, private-owned power utilities are centralized into about a dozen gigantic holding companies. These power combines are “regulated” by State Utilities Commissions, but like the Sherman Anti-Trust Act or the Interstate Commerce Commission they are of no value to the “people” but only cloaks for further concentration of industries.
The State Utilities Commissions have, without a doubt proven bankrupt in safeguarding rates for the consumers or protecting the small investors. No wonder the small investors, the middle class, have their representatives in Congress clamoring for revenge. No wonder they want to make “Power” an issue in this election campaign.
The Federal Trade Commission, like all government commissions have conducted several costly investigations of the Power Trust, and as in all other investigations “abuses” and “startling” information have been unearthed – but nothing, absolutely nothing has been done about it, except as political capital for the outs against the ins, and as middle class campaign material.
The Federal Trade Commission unearthed many abuses liable to criminal action. For example, watered stock or arbitrarily “writing up” the valuation of the utility property, was found prevalent. This enabled the trust to increase the rate base. The books show a “fair return” and “normal rates” but facts prove (for the thousandth time) a tremendous return and robber rates.
The Federal Trade Commission found the following fictitious capitalizations:
|
American Gas and Electric Company |
|
$88,492,000 |
|
American Power and Light |
74,000,000 |
|
|
Electric Power and Light Company |
70,103,600 |
|
|
Miss. Electric Power and Light |
10,000,000 |
|
|
Buffalo Niagara and Eastern |
53,000,000 |
|
|
La. Power and Light |
10,000,000 |
The inflation of only those investigated showed padding running into billions of dollars. This increased the consumers’ bill by millions, monopoly prices are the order of the day.
The present crisis has hit the Power Trust too. The Tri-Utility System has gone under. The Middle West Utilities, the Insull economic and political organization with ramifications in 31 states, is in the hands of receivers. They are still investigating the company.
The consumers have no voice. The trusts control part of the government and, with the other financiers and monopolists, control the whole government. The middle class investigations never complete the rounds and in the long run help let off steam, while profits continue to roll in. The shareholders have less say-so. The shareholders should, according to “fair ethics”, have a voice, but the ramifications of the holding companies, of separate classes of bonds, prevent all this. It is well known that the great mass of “unfortunate” and “discontented” investors are disfranchized and have no voice in the actual business. But these investors need not worry. Norman Thomas of the Socialist party has come to their rescue. Norris and Roosevelt are “doing” their share. So, all in all, the middle class is ... well protected, while the monopolists move forward.
The Muscle Shoals war project has not been of service to the middle class in spite of the “public sentiment” and the fight of the middle class and farm interests.
The Power Trust told Washington what to do – and orders are orders. But in spite of this the Power Trust is a good campaign issue and will be used as such. Roosevelt pulled a fast one on Hoover over the discussion of the St. Lawrence project. The St. Lawrence project for navigation and power is vital for a whole section of the American capitalists all the way over to Chicago and the two parties of the capitalists and their reformer brothers, the socialists, know this well enough. He who serves his master on this big waterway and power project will obtain his just reward, because it has great value for American imperialism in the coming period.
The economic and political organization of the Power Trust is great. Muscle Shoals was an early test of strength and the monopolist won. The urban and rural middle class are reorganizing for a fight in the present campaign. The four great power projects under way in one degree or the other in the United States are vital for the capitalists and the financiers; the industrialists and the middle class are endeavoring to obtain their sectional interests now. Muscle Shoals, the Hoover Dam, the St. Lawrence dam and the Columbia River dam will lay the basis for a vast electrification. It will in turn accelerate the centralization and concentration of wealth. That is the reason the forces are again testing their strength in the present election. Certain control gained now will go a long way for future domination.
Insull is down but not out of the race. Years ago the Senate investigation proved that Samuel Insull was a campaign contributor to the Republican and Democratic parties in the Illinois fight for U.S. Senator. He gave the greater part of both campaign funds. Col. Smith accidentally happened to be chairman of the Illinois Commerce Commission which regulates utilities in the state as well as a candidate.
The fall of the Insull interests in the middle West, has transferred control directly to the other financial capitalists. The “prosecution” of the Insulls will not alter the process. The Morgan United Corporation, with assets above six hundred million, through stock ownership and interlocking interests, dominates the Eastern field. Three groups, the Morgans in the East, the banks which took over the Insull interests in the middle West and one in the West are utilizing the depression for further domination of the electric power.
In Montana the Power Trust and the Anaconda Copper Company struggle for power. The two control the state. Wheeler, who had the backing of Anaconda, made a heroic “middle “class” fight against the Power Trust. Similar examples can be multiplied manifold. Many prominent politicians, national committee-men and state officials are officers of Power Companies. The reformers object to this. The reformer seems to think that private capitalist ownership is alright providing these same robbers keep out of politics!
The Power Trust, the holding companies, the monopolists and financiers have their sectional class interest, just like the industrialists, who need a large supply of cheap power. They have their objections to the monopolist prices as well as the middle class, urban and rural, who by all means want cheap power – and the mass of consumers who can be lined up to fight the trust. The Republicans represent this standpat Trust’s interest. The Democrats and Roosevelt are not a bit better, but have their own sectional class interests. The progressives and socialist are the champions of the middle class. They want government ownership. Only the Communist party has a program suitable for the working class. The solution of the Power Trust like other Trusts is only possible through the proletarian revolution.
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