Birmingham’s bill on power utility regulation received support from some members of the Legislative Committee on Power and Light during an April 9 hearing, the Boston Globe reported (April 10, 1930, p. 18).
Birmingham, who was the minority member of a special commission on public utility control, introduced a bill that would eliminate reproduction value as a rate base. The bill would prohibit power companies from using the reproduction value theory, which they had relied on in court appeals to rate reductions.
Birmingham’s bill would require a power company to enter into a contract to abide by the Massachusetts investment value basis of rate making. The company would have to sign the contract in order to receive protection against competition from a municipal lighting plant, the newspaper explained.
If a company refused to ink the contract, it would have no redress should a local community set up its own lighting department without buying out the private company, according to the bill.
Birmingham was also seeking a resolution memorializing Congress to “prevent action by the Federal courts in all cases in respect to public utilities in which local judicial authorities and local regulatory agencies are empowered to prevent the abuse of exorbitant or confiscatory rates by a local public utility until the highest court of the States has passed thereon.”
Birmingham refused to argue for his bills during the hearing unless he was permitted to have them printed and presented to the legislature.
Majority Bill Would Also Eliminate Reproduction Value
The conservative majority on the commission also drafted a bill that would eliminate reproduction value as a factor in setting the price which a municipality would have to pay to a private company for the plant before it could set up its own public lighting department. Instead, the Massachusetts traditional fair investment value would be used to calculate the price. However, the majority bill would not touch the basis of valuation for rate making.
The commission majority’s counsel, Arthur D. Hill, testified that reproduction value is a “fictitious value” because it is the cost of “rebuilding something that nobody would rebuild because it is obsolete,” the newspaper reported.
Hill argued that use of the theory in court results in a constant threat of costly litigation because it is difficult to apply. He supported the idea of having the Public Utilities Commission be the arbiter of the price the community would pay for the plant. The commission should use the basis of the plant’s cost less its depreciation for the plant’s value.
The newspaper said that the committee would hold more hearings on the commission’s work on April 17, 1930.
The previous day, April 8, the committee held hearings on the regulation of power companies. Birmingham argued that the holding companies of the power companies should be regulated in order to secure fair power rates, the Globe reported (April 9, 1930, p. 8). He submitted separate bills on behalf of the committee’s minority members to include holding companies under regulation of the Public Utilities Department and to prohibit additional mergers of the eight large power companies in the state.
Birmingham noted that the commission was initially set up become of the attempt by International Power to buy the Boston Herald-Traveler. The commission was unable to find the final control of this power interest, he said.
Birmingham said that encroachment by outside holding companies up the local power field had been going on for years without any warnings from the Public Utilities Department. Only the purchase of the Herald aroused the public and prevented complete monopoly of the power interest in the state. Such a monopoly will prevail unless the state regulates holding companies and forbids further mergers, he said.
The bills introduced by the commission’s majority members would give the Public Utilities Department the authority to supervise contracts between utilities and the holding companies that control them, but would not regulate the holding companies directly. The bills would also require the holding companies to provider certain information that would enable more adequate regulation of the operating companies.
Birmingham wanted to know why his bills were not separately printed. The majority commission’s counsel, Arthur Hill, said that Birmingham’s bills and the minority report would not have been printed without him paying for it out of his own pocket. Birmingham said he would reimburse Hill if the legislature did not.
At a May 13 hearing, the Committee on Power and Light approved the commission majority's bill that would extend the law authorizing cities and towns to purchase and operate power plants, the Globe reported (May 14, 1930, p. 28). The bill was amended in committee to give power companies the right to appeal a decision by the Department of Public Utilities on the price to be paid by the municipality to buy a privately owned power plant.
The committee decided that "no legislation necessary" regarding Birmingham's minority report and proposed measures.
Rep. Birmingham proposed a cigarette tax to raise revenue for the old-age assistance act enacted the previous year, the Boston Herald reported May 8, 1931, pp. 1, 15.
In the spring of 1931, the legislature was considering ways to pay for the old-age assistance act.
In a May 6 speech in Worcester, Gov. Joseph Ely attacked the Boston Herald for suggesting that he supported the idea of a cigarette tax.
Rep. Horace T. Cahill, a Republican representative from Braintree, alleged that Ely actually supported the tax in his speech, despite the governor’s criticism of the newspaper.
Cahill quoted a part of Ely’s speech, which appeared to support the idea of a cigarette tax: “It has been proposed that a tax be placed on cigarettes and tobacco, but the man who manufactures and sells tobacco and even those of us who smoke it rather resent, for what reason I do not understand, the imposition of a tax upon this article of unnecessary consumption.”
The House ways and means committee was considering means to raise revenue to implement old-age assistance act. The committee was scheduled to hold a public hearing on the cigarette tax proposal the following week.
Ely ignited a storm of protests during his Worcester speech when he charged that the old-age assistance act was a Republican ploy to get Gov. Frank Allen re-elected.
Rep. John V. Mahoney, a Democratic representative from Boston, criticized the governor for his remarks.
“I object strenuously to Gov. Ely’s procedure in calling the old-age assistance act a Republican measure. None worked harder for its success than I did and no one ever has found my record tainted with Republicanism….I resent the Governor’s action in attempting to rob us of the credit which is due all the Democrats who voted for it.”
Cahill asserted that the old-age assistance act was a “Democratic baby.”
“In one form or another, it has had the support of Mr. Ely’s party ever since most of these now serving in the Legislature can remember. Year after year the Democrats have gone up to the State House with it.”
On a separate issue, Birmingham carried the protests of his Democratic colleagues to Ely over his remarks that he was considering vetoing a bill to abolish physical exams for the classified civil service labor lists in cities, the newspaper reported.
Birmingham also conveyed to the governor the threat that a veto would be overridden by the legislature.
A meeting of Democratic legislators, presided over by Rep. Birmingham, decided to set up a steering committee to work with newly elected Gov. Joseph Ely, the Boston Herald reported Jan. 23, 1931, p. 30.
The committee would consist of 15 House members and 4 senators, who would be appointed by Birmingham and Sen. John P. Buckley.
The committee would meet weekly with Gov. Ely to cooperate on passage of legislation he supported.
Gov. Ely was inaugurated on Jan. 8, 1931, after defeating the incumbent Republican Governor Frank Allen. Ely received 606,902 votes and Allen received 590,228 votes, according to the book Four Decades of Massachusetts Politics: 1890-1935 by Michael Hennessey.
Ely was the first Democratic governor of the state since 1914, when David I. Walsh held the position.
During his inaugural address, Ely asked the legislature for a bond issue of $20 million for public works to help employ the unemployed workers hit by the Depression. He said half of that money should be spend on public buildings and the rest on highways.
Ely requested another $1 million that he would spend at his discretion on work projects designed to get the unemployed working immediately and $300,000 for improvement of state forests, work along public ways, and other projects.
The newly elected governor also called for the appointment of a commission to study the problem of unemployment and propose ways to provide relief now and to avoid it in the future, including adopting unemployment insurance. He also proposed a reduction in the age limit to receive old age assistance.
He backed a study by the legislature about regulating power holding companies, “which are now the means of circumventing the present laws of the Commonwealth in reference to the regulation and ownership of utilities.”
Ely supported modification of the Volstead Act, which implemented Prohibition, to “put the matter of intoxicating liquors on a reasonable, sane and enforceable basis, in the interest of temperance and sobriety and the peace and good order of the Commonwealth and the country.”
Regarding public control of the Boston Elevated Railway, Ely said that the “chief object and real justification of the present method of doing business with the Boston Elevated Railway is to provide continuity of reasonable service rather than to protect the interests of private investors in the securities of the company.”
He favored strengthening the sale of securities law and transferring the bureau that implements the law out of the Department of Public Utilities.
In March, Birmingham said that the Democratics in the House and Senate plan to invite Ely to a luncheon to discuss legislation before the state legislature, the Boston Globe reported March 13, 1931, p. 27. A caucus was called at the close of the legislature session by the Democratic steering committee of the House. Birmingham indicated that other caucuses would likely be called to discuss pending legislation.
The Globe also reported that Birmingham gave a speech at the Expressmen's League annual dinner in the Parker House on March 12 in which he advocated for an increase of one cent in gasoline tax to fund improvements to the state highways.
As the democratic floor leader, Rep. Birmingham recorded the opposition of the Democratic Party in the House to a bill that would ease restrictions on doctors to prescribe contraception to women, reported the Springfield Republican, Feb. 19, 1931, pp. 1, 2.
The debate over the bill pitted representatives of the Protestant religion against those of the Catholic religion.
The bill was supported by prominent members of the Boston medical community, including Dr George Gilbert Smith, who spoke in favor of the measure. He said that the measure would clarify that doctors have the right to prescribe contraceptive measures when the health of the patient warrants it.
Smith noted that current laws did not prohibit the use of contraception but they did prohibit the sale of drugs and instruments for such purpose. The bill was intended to clarify the law in this regard.
The Massachusetts Federation of Churches, a group representing 90 percent of the Protestant church members in the state, supported the bill, while the Massachusetts Catholic Women’s league opposed it.
Rev. Kenneth McArthur, executive secretary of the federation, said that his group had examined the bill and unanimously supported its passage.
Father Jones I. J. Corrigan, a Boston College professor representing Cardinal O’Connell, opposed the bill on the grounds of “decency,” saying that he was opposed to degeneracy.”
He said that the bill’s passage would open the gate to clinics teaching about the subject of contraception. “People who love their children and don’t want them menaced by anything like this measure,” he said
Rep. Birmingham introduced a bill in the 1930 legislative session to place power holding companies under the regulation of the Department of Public Utilities.
Speaking in support of his bill before the Committee on Power and Light April 29, Birmingham said that “only last week the Koppers interests secured control of the Charlestown Gas & Electric Company, while we discuss the advisability of restraining such mergers,” reported the Boston Herald, April 30, 1930, p. 21.
Citing the proposed takeover of the city hall power plant by the Edison company and the plan to have Edison supply electricity in the new post office building, he urged the city and federal government to “join with us in attempting to have rates reasonable instead of trying to save a few dollars.”
During the afternoon session of the committee’s hearing, Frank D. Comerford, president of the New England Power Association, said his group is willing to accept state regulation but it sees no differences between its interest and the public interest.
Comerford supported the majority report of the special power commission, which supported maintaining the status quo with regard to regulation. Birmingham authored the minority report that was highly critical of the majority’s conclusions.
His association’s policy is “to provide adequate facilities for service and to reduce rates as quickly as feasible in order that increased use, by reason of lower rates, may make use of the facilities,” he told the committee.
Comerford stressed that his association contributed investment and employment to Massachusetts and the New England region and that it had many small local shareholders.
“I believe that on the whole the great body of the public is satisfied with its utilities and believes that there are other and more important matters requiring public attention. Has it occurred to you, as it has to me, that in all the agitation arising from the hearings of the investigating committee and the hearings which you have held this year and in previous years, practically no interest has been shown by any one except the same small group of zealous advocates?,” Comerford concluded.
Rep. Birmingham opposed any attempt to increase taxes on low wage earners as part of a 10 percent state tax increase proposed by Boston Mayor James Michael Curley and half-heartedly endorsed by Gov. Joseph Ely, the Boston Herald reported March 7, 1931, p. 1.
Curley recommended the tax increase to pay for public welfare expenditures, old age assistance, expansion in state activities, and Ely’s public works program. Boston would get $1 million from the increase, while other cities and towns would get rest of the money based on their last income tax returns.
Curley directed Corporation Counsel Samuel Silverman to work with Tax Commissioner Henry Long in drafting a tax bill that would apply the tax increase retroactively to the 1930 tax year.
The mayor dismissed arguments that the increase was unconstitutional, citing a similar tax imposed on foreign and domestic corporations in 1918 to pay for the war bonus and the income tax increase in 1923 to pay for national bank tax reimbursements.
Curley threatened to increase the city’s real estate tax if he didn’t get the 10 percent state income tax hike.
Even though much of the Curley tax increase would go to the cities and towns, local officials were not sure such an increase in the tax burden was advisable, according to a canvass by the Boston Herald.
The newspaper spoke to state legislators, mayors, and selectmen, who acknowledged the need for additional funds but feared the political backlash such a tax increase might create.
Business leaders were virtually united in their opposition to the mayor’s tax proposal, arguing that it would burden tax payers and slow any economic recovery.
Rep. Birmingham backed an order filed by Rep. Paul Dever of Cambridge to direct the attorney-general to investigate the Department of Public Utilities over the sale of securities of Page & Shaw, the Boston Herald reported May 28, 1930, p. 24.
Birmingham said that unlisted securities of that character are sold only under permits from the Department of Public Utilities. He said that some of the permits had been issued to high-powered salesmen with criminal records.
Birmingham alleged that two other concerns were operating as the Page & Shaw firm did.
Dever charged that the stock selling was one of the greatest frauds ever perpetuated on the people of Massachusetts. He said that the Department of Public Utilities had been warned about the suspicious nature of the stock on Sept. 17 but waited until Dec. 14 to issue a stop order against the firm. At that point, $1.7 million worth have stock had been sold.
Dever said that the attorney-general was needed to carry out the investigation of the department. “Would it have been desirable to have had the police department investigate the Garrett case?” Dever asked.
Dever’s order was not adopted by the House following an adverse reporting of the Rules Committee.
Rep. Birmingham left a closed door meeting of the Joint Rules Committee an hour after it convened in protest because he objected to the Garrett report being examined in star-chamber proceedings, the Springfield Republican reported May 7, 1930, p. 1, 3, 7.
Birmingham argued that the report should be presented in public so that any person could speak about it, including Herbert A. Wilson, deposed Boston police commissioner.
Wilson sent letters on May 6 to the presiding officers of both legislative branches demanding a hearing “with the right to summon and examine witnesses under oath, including members of the executive departments and of the Legislature.”
Wilson was fired by Gov. Frank G. Allen on May 5 following an investigation by Attorney General Joseph E. Warner into corruption charges involving the Boston police department and Oliver Garrett, head of Boston’s vice squad that was tasked with cracking down on bootlegging. Garrett was accused of extortion and racketeering while working on the vice squad.
Birmingham placed blame for the problems in the Boston police department squarely with Gov. Allen and ex-Gov. Alvan T. Fuller, charging “laxity” in the administration of the department.
In response to Birmingham’s protest, Senate President Gaspar G. Bacon and House Speaker Leverett Saltonstall issued a statement following the closed door session:
“The committee on rules, acting concurrently, have voted by majority vote to hold no public hearings on the report of the attorney-general on the Garrett investigation (House No. 1335) as a whole. The matters suggested by the attorney-general therein as being capable of legislative consideration have not yet been considered, and the committees have reached no conclusion as to hearings or as to legislation with respect to such suggestions.”
“If the committees concluded at a later date that some legislation may be necessary, public hearings on such proposed legislation will of course be held. The committees adjourned subject to the usual call of the presiding officers.”
The previous day, Birmingham had threatened to leave the committee room if the Wilson part of the Garrett report was discussed behind closed doors, a threat that he made good on.
Birmingham told the newspaper that he favored the Garrett investigation originally. “The Republican rules committee, however, at that time had only two members in favor of the investigation originally, while four members of the Democratic party favored it.
The House minority leader then commented on the reexamination of Garrett ordered by Wilson after Gov. Allen received the opinion of an assistant attorney-general that it could be held:
“The assistant attorney-general had rendered an opinion that a man examined on December 31, 1929, could be reexamined on January 1, 1930, after an elapse of a few hours. I maintain that no court in the commonwealth would have sustained such an opinion.”
“The governor requested this opinion from the attorney-general on this phase of the question and an assistant attorney-general gave him the ruling which could cause this condition to exist.”
“I feel that Mr Fuller and the present governor were familiar with all these facts. They were in the same position with respect to Mr Wilson as Mr Wilson was with respect to Capt Patterson. By that I mean that both the ex-governor and the present governor must have known, from the information given them by the state police, that something was wrong in the police department and the time to act was when they were in possession of this information.”
“Their laxity might have been responsible to a great extent for the conditions existing in the police department. I felt that the opinion was asked and given to stifle the investigation of which I was heartily in favor.”
"I am not attempting to defend Mr Wilson. I understand from a good authoritative source that Mr Wilson, as a private citizen, now desires to appear before the rules committee on House document No 1335 (Warner report), if the hearing were opened to the public. I believe that every citizen, no matter who he is, should be given an opportunity of free speech before any legislative committee.”
Rep. Birmingham proposed an amendment to the state and municipal enabling bills to prevent the use of machines on public works projects so that more day labor could be employed, the Springfield Republican reported (July 18, 1933, p. 1-2).
The bills were designed to permit the state to take advantage of the national recovery act passed by Congress, the newspaper explained.
Birmingham called for the departmental heads to come before the House to tell how many men would be put to work. He said that last year, the public works department spent $14 million and employed 5,608 men at the peak of work. He said he wanted to double that figure and then asked how much relief state expenditures furnished to the unemployed.
Rep. Christian A. Herter said that the federal and state acts contain provisions for use of day labor as much as possible. He asked for defeat of all amendments printed in the calendar.
The Birmingham amendment was adopted by the House.
Rep. Birmingham, in his first year as Democratic House floor leader, was instrumental in brokering compromise legislation on the future of the Boston Elevated, the Boston Herald reported (June 8, 1929, p. 1, 2).
Birmingham, who was a member of the conference committee that hammered out the compromise, committed himself to ensure the measure’s passage, the paper reported.
The compromise, which was pushed by Gov. Allen, dropped the requirement that public control be ended in 1932 and added a provision setting up a metropolitan transportation district in an amendment. The transit district would be managed by a board of five trustees, four appointed by the governor and one by the mayor of Boston.
The district would take over the existing structures of the Boston Elevated, subways, tunnels, and other property with takeover to be funded by a bond issue. The Boston mayor and city council would have to approve the takeover of the Boston subways, and the Cambridge tunnel would not be handed over by the state until the Boston subways had been taken over.
In addition, the measure called for a non-binding public referendum on the future of the Boston Elevated in the form of three proposals: one would return it to private management, one would maintain public control under private ownership, and a third would transfer it to public ownership.
In addition, rapid transit extensions would be decided by the legislature instead of the metropolitan transit district council, according to the bill.
The measure would set up a transit council made up of mayors and board of selectmen chairmen, with each community having one vote for every $100 million of valuation represented in the community.
The rapid transit extensions would be built by a newly created transit department made up of three members, one to be named by the governor and two by the Boston mayor. The department would replace the current Boston transit board.
The bill also calls for the Boston Elevated to negotiate with the Eastern Massachusetts Street Railway Company to buy their lines in Chelsea and Revere.