Philadelphia Reflections

The musings of a physician who has served the community for over six decades

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Right Angle Club: 2015
The tenth year of this annal, the ninety-third for the club. Because its author spent much of the past year on health economics, a summary of his latest book on the topic takes up a third of this volume. The book I published in 1980 is now selling on Amazon for three times its price when new, so be warned that at one time, the subject used to improve with age. George Fisher

Gashouse Gang

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A couple of lawyers from Community Legal Services dropped around to the Franklin Inn club, the other day. Someone in the club thought they might be able to shed some light on the recent sale, or rather frustrated sale, of the Philadelphia Gas Works and invited them over. They told us what they knew, but other luncheon guests came away with the impression they don't know the full scoop. It's for sure the newspapers don't know much, either.

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Philadelphia's Gas Company

Philadelphia's Gas Company was started in 1830, and acquired as a City property in 1860. Before that time, an occasional mansion would have its own private gas house, fermenting gas for central lighting and heating, and apparently the scene of other carryings-on, leading to the derogatory title of "Gas House Gang". That was long before any thought of city corruption, or politics, or even professional Baseball. For nearly a century, municipal gas works would produce "Manufacturer's Gas" by fermentation of various discarded materials, but when the "Big Inch" pipeline was converted to natural gas at the end of the World War II, at least people stopped committing suicide with it (natural gas didn't work), and most cities sold the gas company to private owners. Gas work have long had the reputation of featherbedding and corruption, selective collection of gas bills, and a fair amount of graft. Perhaps much of this is a legend of the past, but I wouldn't bet much money on it. It suddenly got into the news lately, when a Connecticut company made a cash offer for PGW, the local gas company. The Mayor liked the idea and brought it to City Council, which refused even to consider it. The newspapers had recently had a run-in with Mr. Dougherty, the President of the Electricians Union, over the conviction of the union for arson of the Chestnut Hill Quaker Meeting House, and there's no doubt the news coverage of the Gashouse sale offered the public a dim perception of City Council politicians and their pro-union behavior.

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John Dougherty

Our lawyer guests felt this was a little unfair. The Mayor did request a hearing on the matter, but he is not a member of City Council, and needed a member to introduce the topic for discussion. After the Council President expressed an unfavorable position, no other member of Council was willing to introduce it. So the matter was dropped for lack of a sponsor. While there is little doubt much was beneath the surface, it is a little imprecise to say the Council blocked the matter from consideration. The next time the City Charter comes up for review, it would seem reasonable to allow the Mayor to introduce measures by himself, perhaps by giving him ex officio membership. Leaving him without some way to start a discussion, as he was humiliated to admit in public, does seem a little awkward. But it permits it to be said they actively blocked him, in this particular case.

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Gov. Tom Corbett

Let's be sure we remember the biggest news in this state for a decade, has been the discovery of shale gas, leading to energy independence, low energy prices, and potential prosperity. Governor Corbett had refused to allow taxes on the shale extraction, and a lot of politicians had been counting on getting a piece of this action for their own local purposes. In the November 2014 election, there had been a Republican landslide across the whole nation, including the Pennsylvania Legislature. But Republican Governor Corbett was swept out of office, in a striking exception to the landslide. One of the visiting lawyers mused that Philadelphia's Democratic Mayor was probably looking for some state assistance in his struggling budget problems, and perhaps, just perhaps, that was the reason he was acting in such a wayward manner in this gashouse thing. No one was talking. After all, it was common belief that gas transmission lines were all sewed up, many stronger politicians had got there first, and gas for Philadelphia was a non-starter. Since no one is willing to talk about it, everybody has a right to his own guess. Here's mine.

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James P. Torgerson

A thing is worth what you can sell it for, not a penny more. The President of a Connecticut gas company presumably has something on his mind when he crosses two state lines to make an offer for some distant city's gas company. Two possibilities come to mind immediately, and one of them is immediately squelched. That would have been the idea that the acquiring company would plan to dump the defined-benefit pension plan of the city employees, and offer a defined-contribution plan like everyone else. But that idea had occurred to others first, and it had been testified the pension plan for the gas workers was actually pretty well funded. So, if that's a non-starter, there's only one other excuse the Connecticut gas president could offer to his own Board of Directors, for pursuing a $42 million cost to acquire a $30 million dollar savings, particularly when PGW already had the highest rates in the state and obviously wouldn't be able to raise them after a merger.

It would be my guess this talk about the hopelessness of getting a pipe line constructed, was bunkum. My suspicion is he had good reason to believe he could get a pipeline, and that a Republican president would approve it. Governor Corbett had already shown unusual foresight in attracting pipelines by refusing to tax shale gas. By the time he got the pipe in the ground, a gas glut would drop gas prices so severely no competitor in another state could compete with it. That's why the dimwits in the Legislature were so mad at him; they were expecting a joy ride on those taxes for themselves. Instead, we have taken a couple of steps toward making Pennsylvania the oil capital of a nation which has shale competition in forty other states. But Pennsylvania would have the pipelines. Poor Corbett got a political pistol-whipping, but if he has friends who owe him bigtime in the oil business, he won't be permanently sorry.

 

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