The Providence news. (Providence [R.I.]) 1891-1906, 1892-05-16
The FINANCIAL NEWS.

Not since the people have had time to
take n second thought on the franchise
question has there been any doubt of the
popular approval OF the economic idea In
volved. The necessarily friendly and even
common interest on the part of the public
and the public service corporations was
too palpable to admit OF discussion. The
only point Of contention has been the de-
tails OF the contracts by which such fran
chises should be granted. and the review
of the ideas developed during the past
year would indicate that in the main the
terms proposed were based upon an
economic fallacy.
The fallacy lies in the fact that the ex-
elusive franchise Is something which the
people shall sell To the corporations, and
that it shall be paid for in money. The
theory is nothing more nor less than the
natural corollary Of the thought that the
corporation Is antagonistic to the people,
aud that the only way to control IL IL
through a dollars-and-cents tax on its
earnings. The experience OF foreign
cities like Berlin should have taught our
Legislators better lesson than that. They
should have seen that the large tax there
imposed on the tramway company has re-
suited in "a service that Is inadequate
both in quality and quantity. The plain
reason TO be learned Is that the efficiency
of the service rendered by the public cor
porations to the citizens bears an in
verse ratio to the amount OF money tax
imposed. In other words the corporations
will make money or cease business; the
more money they are compelled TO pay as
"a special tax. the less they will have to
use in improving the service which they
render.
The terms Of the sale by the people Of
the exclusive franchise should have first
hinged upon an extension OF the quantity y
of service performed as well as the i'm
provement OF it's quality. and the actual
INV oh lav Ia ~
The aim of Legislators should have been
10 improve the city's facilities, through its
public service corporations rather than
To retard the facilities by taxing the cor
porations. This becomes an almost self
evident fact when we consider
First-That the money expended for
any form of construction Is more economi-
cally expended by corporations than by
the city. Hence the money paid by the
corporations to the city and expended by
the city for improvements would produce
less beneficial results than IL the corpor3-
tions were compelled by the city to ex-
pend that money themselves or extensions.
Second-That the extension of the ser
vices performed by public corporations
combined with cheapening Of their cost
is the best known means OF increasing
the city's business interests, increasing
Its land values and
Third-That despite these increases in
land values the great mass of the people
are enabled to own home for themselves
in the suburbs of the city.
In their mental, moral, physical and
financial interests the citizens would be
much more the gamers il the corporations
enjoying a special franchise were COM
PEELED to use all of their surplus in extend
ing their service as well as cheapening ITS
price to the consumer, than il the corpo-
rations were compelled to pay part of
that surplus into the city treasury, to be
expended by the city.