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The reasonablenees of electric and gas rates affects the pocketbook of every citizen, directly o r indirectly. That you may understand. the situation, there is published below the statement made October 24th before the Illinois Commerce Gommission, at a formai rate hearing, by James, Simpeon, chairman of Commonwealth. Edison Company, The Peoôples Gas Liiht and Coke Company,1 and'Public -Service Company of Northern Illinois. Mr. Ckairmasu and Gentlemen of:t& Illinois Commerce Commision: B FoRE you begin formai hearings ini the citation, for a reduction in rates b y the Public Service ConpanYý of NordicraJIl inois, I asic your i- dulgence to present a staemneni. What 1 wiii say alai ie o the Commonwreglh EdisonaComnpaniy and Te ep les Gas Light and Coke'Comnpany. Reversing the time-honored order, of procedure, 1 arn prefacing my remarks with what would, under mosr circumstances, be the conclusion of them. That is a request-a frank, open, straight.forward reus-that this body pospoýne hearings.Iookifig to a further downward revîsion of rates by the three companies ment ioned, until' sucb rime as those. companies and your honorable body may know more about the future than it is possible to know today. To A void Increased Rates The companies are making every effort te absorb the exrraordinary and unforeseen expenses recently added ro rheir burdens, hoping that they will flot be forced to petition this Commission, for relief- ;hroughincreased rates. There are fousr major items involved in the man- agement of these pubic utilities, two having to do wihtheir revenues and two with their expenses. Let me briefly mention them: 1 . The first is rates. This marrer is either in your hands or ini the hands of the courts. The com- panies may iniriate rates. But in thie final anaIy5is the coxnpanies bave no control of the rates, their very life lood. 1 do not contend chat tbey should have such final control, but 1 do contend that rares should be fair, and this means adequate to provide a reasonable return upon. the capital in- vesred for the service of the public. 2. The second item, affecing the gross revenue of * the companies, is the quantity of electricity and gas, consumed by their customers. Over this, broadly speakingthe companies have no control. The extent of the, cusromeris-use of these ser- vices is a matter iwholly of bis own choice or needs. The company must sei but tbe customer, is flot required to bu,.. The. depression and bard imes bave taken their tol from these compa- nies -and only recentiv bas tbere been any en-. contesting this tax in the courts. Mvay 1al a public ùtilicies represent the only business that does net have the privilege of pasing chis rax on te the consumner. Taxes Increase $7, 867, ooo Per Vear Empphas i zi ng fur ther this màarrer of taxes, wirhin the past ten months the three companies have had new and increased taxes levied or proposedto be levied againsit hem, some going back to the years 1931 and 1932, amounting to imore than $ 1403,000O, of which the co Mpanies had nô knowledge a-year ago. A porion Fthese increacd taxes as chargeable to* the years 1931 and 1932 because -of the confused tax situation in Cook CounIty. MThe rigs state- ments of the three comipanies for these cwo yetrs reflect these increased taxes. Certain of the new taxes such as tbe federal tax of 3 per cent on the sale of electricity -and one. or two other new forms of taxa- tion above, menrionied, have been imposed under laws 'assd during tbe cu crent year andtherefoTe, -have beneffective durig n ya narofteer 1933. The ful effe f thr-s ew an increasedtaxe.s bas flot yet been felt. It ail these additional taxes be continued the estimared increase in taxes will. amount ce $7,867,000 per year. Further down in this list of uncontrollable ex- penses is che cost of investigations made by this Commission imposedwitbin the past six months by, amendments to our State Law. Even more recently there bas been added ro this list a substantial i n- crease Un expenses due to the codes under tbe National Recovery Acr. Ône large and unyielding element in the lisr is interest on outstanding bonded ctebts, representing capital expenditures necessarily incurred for the rendering of service to the public. Net Revenue Drops $i8qooooo 1 amrnont going te burden this preserication with too many figures for chis Commission is' thoroughIy familiar with them, but 1 do wish te bring out one Significant figure resulting from the startiing trends in the three uncontrollable items to which .1 have ;usr referred. It is a comparison of combined operating figures for the three companies for the Year:1933 with the more normal year of 1930. The red ucion in the esimated gross earnings from' operarions of-the threecomtxpanies for 1933 ontbe one hand, and the increases in taxes and other un- controliable items on the other hand, result in a reduction of income i excess of $2 5,000,000. Partiallv ioffsettmnL- rhis ereaein incnme, the copanis to.be gained by seèking ta, artribure, the present situation ce anything that may bave oc- curred in the pasr. For past history, neither the presentinmtbers ofthe Commission.nor the prescrit managements; cf the companies are in àany measure responsible. Under rhe-trying conditions now pre, vailing, it is our rask te Iook forwardnot b.cward. Utilitis' Cvdit Esseutal le Cem uit, This comMunityi embraciag -te. Cktyof Chic ai.d thé surroundthig ares, js depeadene lina arp measure for, ici prosperity and growth upon ehese dire. companies. Any injury te ehem affecning their, credie or Chir service inevitably means greatr dam. age te the toÉmmunity.at large. The maintenance of the credit of chese institu- tions is enrirely. possible witb reasonabie rates. Whetber present rates with'imnprovedl conditions will be adequate for the testorroation of the earnings, remains t e. seen. But any reduction in rates ât this rime is unthinkabie. The consumer is. inrcrested.i the jmaintenance of adequate rates because thar is the only way te fisure good service. Illinois Residents Vitalfy Interssted While every consideration must and should be' given te eur customers, our stockhoiders number- ing over 100,000-more than 90,000 of wbom reside in 11 i nois-must flot be Iost sighr of. Illinois .is vjrally interesced in che successful operation cf these three companies for in its confines reside over 70,000 boridholders, 90,000 stockholders, 15,400 employes, and upwards of 65,000 other persons gai nfuiy employed in ways dependent upon the activities of these companies. An ultra conserva- rive family muliplier of 3 appiied to chis army cf 240,000 persons leads one to the conclusion that one person our of every 10 ini the State ha a direct i nteresci the prosperity of these threecompanies. The Public Uriliry Law cf chis Stare was designed te protect the investor as weil as the consumr- the one who renders che service as well asthe one who enjoys ir. The question is fat from a one-sided crie. It is by ne means crue char a reducica in rates wouid injure a few .and aid, many. -A, rate reducrion nec warranted by prevailing.conditions would bring about as great an injustice it. he con- sumer as te the investor. Our responsibilities as managers of chese corn- panies, and we take rbese responsibilities with all JAMES. SIMPSON.