[PRCo] Re: Interurbans and the West Penn

[Schneider Fred]

I think I corrected the two spelling glitches this time.

On Oct 28, 2008, at 5:21 PM, Schneider Fred wrote:

>
> 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 particularly
> 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) of 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.
>
>