Vol 36, No. 1 - NAWC

I
I
I
History, continued
30's Mood Is Grim
As if the Depression wasn't enough of
a problem in the '30s, Pennsylvania suffered
a serious multi-year drought. Customers
who couldn't get water some days
couldn't pay for it when they did. Millions
were jobless. It was clear many companies
needed to develop new sources and new
storage and distribution facilities. But,
given the economy and the scarcity of capital,
no one was building anything. It was
to address the shortage of capital that the
five-year-old St. Louis County Water Company
sold out in 1930 to Commonwealth
Utilities, of Philadelphia, a subsidiary of
Geist's United Gas Improvement Company.
The dark mood in the U.S.-and in the
Association-lasted for several years.
Murdock told the 1932 conference that
they had not seen any "sunlight" in three
years. What with the extended drought
and the crippled economy, credit conditions
were the worst he'd ever seen, he
said, and small companies had to "juggle
and manipulate their books" just to stay
afloat. He kidded that everything had collapsed
"the year I was elected" and said if
the Association had any sense it would
make someone else president.
That was the year some of the most abusive-and
most leveraged-utility holding
companies, like Samuel Insull's $4 billion
Middle West Utilities, collapsed, costing
investors millions and undermining confidence
in all utilities. Murdock decried
the abusers' "indefensible practices" and
the toll they were taking on responsible
utilities. Industrial revenues were falling;
uncollectible accounts, mounting; rates,
frozen. "It's going to take diplomacy and
kindness to avoid disaster this winter,"
Murdock told his colleagues.
The conference discussed loans being
made available through the Reconstruction
Finance Corporation, an ambitious
~government effort to assist troubled farms
and businesses. Applications had just become
available in Pennsylvania and members
were briefed on how to apply.
About this time, Julian Kean, president
of the Elizabethtown Water Company for
18 years, passed away. He was succeeded
by a nephew, John Kean, addressed as
"Captain" because of his World War I service.
He would serve through the 1940s.
Founding Secretary Dies
In 1933, the Association mourned the
death of Francis S. Purviance, a founding
member and PWWA secretary since day
one. It was Purviance who ran the office,
recorded and published the minutes of
meetings, tracked, annotated and distributed
all relevant legislation and rate decisions
and generally kept the organization
going. To the Association's relief, Dr.
Herbert Snow, the PSC's chief engineer,
who had addressed the conference the previous
year, agreed to come aboard to succeed
Purviance. He would serve until his
death in 1942. Other eulogies that year
remembered Morris Knowles, of the Consolidated
Water Company in Pittsburgh,
and John Ladoux, of the Lehigh Water
Company in Easton, both long-time members
of the Executive Committee.
The Association was instrumental in
1933 in defeating a proposed $8 million
state tax on water company assets that
would have cost members $200,000 a year.
Murdock estimated the lobbying campaign
cost $6,000.
Franklin Roosevelt took office that year,
having convinced voters that he could
bring the government's resources to bear
to get the nation back on the road to prosperity.
He would soon be assisted by world
events: Adolph Hitler, appointed chancellor
in Germany, seized dictatorial powers
and stepped up his reign of terror. Germany
and Japan withdrew from the
League of Nations. U.S. industry, producing
at half its 1929 level, must have sensed
there would be new demand for arms. One
bright note for some: Prohibition ended.
Wary of Roosevelt
Most Pennsylvania Water Works Association
members were wary of Roosevelt.
There was increased political talk of the
need to curb the concentration of wealth
and prevent the accumulation of economic
power in the hands of a few. But businessmen
also knew that the economy would
be paralyzed until the ordinary working
man regained some purchasing power and
some supported Roosevelt's programs toward
that end.
One person who was moving boldly in
those dark years was John H. Ware, Jr.,
the electrical entrepreneur. He gained control
of three Philadelphia-area water companies
and set his sights on larger fish.
He was listed in the early 19 30s as a memj.
H. Purdy
ber of the Association's executive committee,
but never was recorded in the minutes
as a conference attendee. In New Jersey,
Elizabeth lawyer Frank Bergen, the
founder of Middlesex and its president for
35 years, died at age 82. His company paid
healthy dividends right through the Depression.
John Murdock warned his colleagues in
1934 that times were changing, that there
was a great deal of public resentment of
private property, profits and, especially,
monopolies. "Where is the line to be
drawn at which a profit is antisocial?," he
asked. Murdock urged that the PWWA
support a movement to bring municipal
water suppliers under the control of the
PSC. Such a move would improve the image
of private suppliers, he said.
The Association's budget was stretched
that year so it moved into a smaller office
in Harrisburg to save $190 a month. The
budget provided $5,200 for salaries, $475
for the annual conference, and $729 to
reimburse Dr. Snow for a Ford he had
bought for work. Murdock said he would
take on more of the Association's correspondence
and opened an office in western
Pennsylvania to do so. He urged the
purchase of a mimeograph machine to save
the secretaries' time. It could be used to
produce the Association's new monthly
newsletter.
Members reported for the first time on
pension and life insurance programs for
employees.
The Public Utilities Holding Company
Act was passed in 1935 and, as a result,
the Securities and Exchange Commission
directed many diversified utilities, like
Federal Water & Gas, American Water
• NAWCWATER