[PRCo] Re: Interurbans and the West Penn

[Schneider Fred]

I cannot find who wrote the first message on the subject of  
interurbans not being allowed to raise fares in 1918 because of  
franchise restrictions.   I said that some states allowed it and some  
did not.  One person contested what I said.   I had particular  
commented that the Pennsylvania regulatory organization held that  
utilities were permitted to make a reasonable profit regardless and  
that they and only they were in charge or regulating fares and  
tariffs of utilities in Pennsylvania.

What you want to look at is Pennsylvania Public Service Commission  
complaint docket number 1883 of the Borough of Wilkinsburg versus  
Pittsburgh Railways.   The borough held that the franchise under  
which Pittsburgh Railway was operating permitted only a three cent  
fare and to raise it was unreasonable and unjust.   The Public  
Service commission held that the "constitution which lodged the  
legislative power of this Commonwealth in a General Assembly (Art.  
II, Sec. 1) imposed no limitation on the rate regulating authority of  
that body, but prescribed that "the exercise of the police power of  
the State shall never be abridged.""   The PSC held that neither  
Wilkinsburg nor any other municipality had authority to regulate the  
fares of a utility operating therein.  This was upheld in the 71st  
April term, 1919 of the Superior Court of Pennsylvania.

There were a number of other municipalities that failed to get the  
message and also had to be reminded by the courts.

There is also evidence that the head of the state Public Service  
Commission was in bed with the people his agency was regulating,  
which lead to the resignation of W. D. B. Ainey from his position as  
Chairman on August 3, 1932 and eventually the renaming of the  
organization the Pennsylvania Public Utility Commission.   The name  
change from Pa. PSC to Pa. PUC, however, did not change the  
philosophy that it had the sole authority to regulate private transit  
companies, railroad, power companies, phone companies, water  
companies, gas companies, sewer companies and other utilities in the  
commonwealth.     The reference to his resignation was found by Ed  
Lybarger in the Connellsville Courier dated August 3, 1932.  There  
were other references in the same newspaper on July 26, 1932 and July  
11, 1932.   One of the newspaper stories cites A. W. Thompson, the  
president of the Philadelphia Company (that was the head of Duquesne  
Light Company and Pittsburgh Railways) having paid $3073.40 to Johns  
Hopkins Hospital when Ainey was a patient there in 1925 and 1926.    
(Bear in mind that  was a huge hospital bill and that inflation in  
that sector has been much larger than in other areas ... my own bill  
for an appendectomy including seven days in the hospital in 1953 was  
only $104.)   There was also an allegation that $150,000 had been  
given to Ainey over a period of six years by Thomas Mitten, the  
president of Philadelphia Rapid Transit Company and that Mitten  
Management had paid for his transportation to Europe in 1927.   There  
were also charges that Ainey had deposted upwards of $185,000 into  
his bank accounts in one year in cash (nothing traceable you  
understand) or which his salary represented only $3,000.   He was  
named in a $150,000 graft charge (Connellsville Courier, June 29,  
1932) but Ainey, like Senator Dan Flood, managed to escape.   In  
early September he was reported "sinking rapidly."   And Transit  
Journal's October 1932 issue reported him as a "widely known utility  
expert" who "had failed rapidly since his resignation from the  
commission on August 2.  A sufferer from arthritis since 1922, Mr.  
Ainey for the last several years had attended his duties ... in a  
wheel chair.  He was recognized as one of the foremost utility  
commissioners in the United States.   He was appointed to the  
commission by Governor Brumbaugh on May 20, 1915, and three months  
later became its chairman."   He was also president of the National  
Association of Railroad and Utility Commissioners in 1924.