The Washington times., 1901-09-02

porationS operating these public utilities
are constantly tending to corrupt legis-
lative bodies and public officers, national,
State, and municipal. in order to secure
franchises and other advantages. Finally
the tendency of private ownership of rail-
roads and other similar enterprises is to
build up great private fortunes. thereby
introducing degree of industrial inequal-
ity which is inconsistent with democracy
in political methods and in education.
This witness does not fear greatly the
political dangers arising from an increase
in the number of civil servants through
extension of Government ownership.
He would apply strict methods of exami-
nation for entrance into service and for
promotion. While he would favor the
granting of very favorable conditions of
employment to Government servants, he
does not think that this would coQsti-
tute the unjust establishment of favored
office class He does not believe that
proportion of the population to exercise
a dangerous political influence at the
polls. nor that their own liberty would
be abridged through the influence of par
ty leaders and superior officers. He
points TO New Zealand. the English cities,
and other governments which have great
ly extended Government ownership, as
showing the possibility of minimizing or
eliminating these evils
In spite of his arguments as to the
benefits of Government ownership, Prof.
Parsons does not believe that the
United States is ripe as yet for public
ownership of railroads. We need to be-
come more thoroughly democratic in
government to secure for the people more
genuine control over public affairs before
greatly Increasing Government owner
ship. 1t would. however. be desirable at
early day, if not Immediately. to ac-
quire the telegraph and telephone, and
municipalities should move steadily to-
ward the public ownership of municipal
utilities. The witness believes that there
is a very rapid growth of sentiment in
favor of public ownership, and asserts
that in this in other countries the
actual extent Of public functions is stead
lily increasing. In his judgment the best
way for the Government to acquire the
telegraph or the railroads would be to
begin by buying up or constructing part
of the system, and then gradually TO
extend the scope of the public ownership.
He would favor paying to the owners of
the present plants the full value of their
plants as indicated by the market prices
OF securities, even although in many in
stances the enterprises are greatly over
capitalized.
prof. Parsons, in his general argument
in favor Of Government ownership. of nat
ural mOnopoiies, refers to the telephone
system. holding that all the arguments
which apply in favor of Government own
ership OF telegraphss apply TO the telephone
as well. This witness believes that the
trunk lines of telephones should be oper-
ated by national governments, while the
local systems could. perhaps, be most con-
venientiy operated by the municipalities.
The Vice President and General Manager
of the American Telegraph and Telephone
Company submitted an affidavit 10 the
commission, tracing the history of the
development Of the telegraph anG discuss
ing somewhat the question as to the rea-
sonableness of existing rates. The gen.
eral manager of the New York Telephone
Company, Mr.. Bethel, presents an elabo-
rate discussion of telephone rates and the
character and amount of service in this
country and in foreign countries.
Prof Parsons, m connection with his
general argument in favor of Goverh-
ownership
public utilities. especially advocated the
municipal ownership of gas. electric
lighting, and street railway systems and
similar public utilities. Prof Bemis also
presented arguments in favor of nIunicip
al ownership before the commission.
while A d. Adams, a civil engineer of
Boston, undertook TO show that the mu-
nicipal electric plants in Massachusetts
have worked more satisfactorily than
private plants. Mr.. Foote, editor of Pub
lie Policy, Is Inclined to oppose munich
pal ownership, but 10 favor the auditing
of the accounts of private corporations
for the purpose of securing complete pub
licity and uniformity of accounts
The argument in favor of public own
ership, as stated by the witnesses above
named. is based on the assumption that
such municipal public utilities as street
er supply are natural monopolies, and
that they furnish such necessary service
as to make them essentially public in
character Efforts TO maintain competi- |
held, have failed in almost every city, !
and they are now supplied by great con-
solidated corporations. There is even a |
tendency. these witnesses assert, for |
single corporations to get control of diff |
ferent classes of utilities in the same |
city. while in other cases single cOrpo- |
ration controls plants of the same class |
in many different cities. II is argued that |
under these circumstances there must |
either be thoroughly effective regulation |
OF the private corporations operating
ar FaFFl.f u in.
In support of these assertions-stilese |
witnesses maintain that the capitaliza- |
tion and charges of private corporations |
furnishing these services are usually eX- |
cessive: that there is little or no connec- |
tion between the capitalization and the |
actual cost of constructing plants, capi- |
being based upon the power to |
earn dividends at excessive charges. 1t |
is pointed out that the statistics show |
that the capitalization of street railways |
In Massachusetts, where careful restric- 7
tions exist to prevent the watering of |
stock. is from one-haIf to two-thirds less
than in the other States Of the Union. On !
this subject, however, Mr.. Foote says
that there are very great differences in |
the costs of construction in different |
places, so that comparisons are apt to be |
somewhat misleading. Prof Bemis de- |
clares also that capitalization of 81 or
81 per / coo feet of annual product of gas
is considered ample to cover the real |
value of plants, but that the average cap
italization of gas companies in large cities |
in the United states Is about 81 per l,OOJ |
feet.
Mr.. Howes presents a somewhat ex-
tcndod argument in favor OF a reciprocity
treaty with Canada. He declares that |
Canada is even now the very best Gust
toner for the products of the United |
States. and that the two countries are |
almost an economic unit. He
however, that because of the
existence of tariff barriers against the
sending of Canadian goods into the |
United States, Canada not only retaliates |
with other protective duties. but Is in
general disposed to carry on trade with |
England and other countries as much as
possible in preference to the United |
States. and that "A greatly increased trade
with this country would result from
reciprocal reduction of duties. Mr.. Howes !
thinks that free entrance of coal from |
Nova Scotia and British Columbia would |
be OF great benefit TO New England and |
the Pacific Coast States while our Mid |
die States could export large amounts of
coal to Canada. The lumber interests |
are those which are the most strongly |
opposed to letting down the tariff bar
riers, but this witness thinks that il
would be d great advantage to New Eng
land especially il she could get free lum-
Der from Canada.