Daily Kennebec journal., 1901-03-21

IL is assumed that the income must
yield "A fair return upon all such stock
before any concessions are granted to
the public.
Another imposition upon the public
made possible and permitted by our
present laws. a railroad corporation
finds that it's earnings are increasing,
that dividends declared upon such an
amount of earnings would in time
bring about public demand for a re-
duction in its rates charged for public
service. Stock is lit once issued, un-
der various pretences, which, though
not dollar goes into the treasury Of
the company by the sale of this addi-
tional stock, serves the purpose in
tended, viz: To reduce the percentage
of profit in the eyes of the public. This
Is not theory, a mere possibility, it
is q startling fact, an assertion, the
truth of which may be easily proven.
Again we can see from the commits
sioners report that the street railroads
Of the state are capitalized al various
amounts, from about $4,000 to $50, 900
per mile. Now it is a recognized Iact
that $4,000 or $4,000 per mile is tine
AZ erage approximate cost of this class
OF railroads. The difference then pc
tween this amouut-the actual cost Of
the cnterprise-and the amount at
which it is capitalized. represents that
which goes into the pockets Of the
promoters. 1t is the great sum that is
given away as bonus 10 those
who push such enterprises along; the
great sum 70 which the public must
pay perpetual tribute. But il Is
claimed by these same promoters when
Obliged to admit the truth of this
last statement that ii is no imposition
upon the public-that a j-cent fare is
as small as the people demand, that
it Is nobody's business how great the
over ca pitalization, as long as the =
cent rate is not increased. This is in
fact q demurrer on their part q on
fession Of the facts BY q simple What
" it?" II n 5-cent fare is sufficient to
pay. a reasonable interest upon the
stock and bonds of such roads capital
lied at $50 600 per mile, what fare
would be required to pay interest upon
$40. 900 per mile. the actual cost Of
such road? The poor we have always
with us" There are many who would
purchase six tickets for 10 cents vino
cannot now afford 10 patronizr ;hcse
roads cycn III the scent fare.
How does this over capitalization
effect thxation-the revenues accruing
To the State in the way Of taxes? AZ
often as the question Of increasing the
tax on these same railroads has come
up for consideration by their attorneys
they have come before the Legislative
committee pleading poverty and their
inability To pay any greater tax to the
state. Hut / submit that the vast
amount Of watered stock upon which
they pay dividends is the chief reason
for this inability to pay more liberal
taxes. 50 it appears TO me a logical
fact that by allowing this excessive
capitalization our statutes permit these
corporations to put themselves into |
such condition as to avoid their just
burden of taxation as well as their |
duty To give the public the lowest |
rates Of service consistent with a fair |
income. IN other words, n part of the |
earnings that is constantly going into |
the pockets Of promoters should be
going into the treasury Of the State
in taxes.
Such enterprises are often pushed |
through by these promoters when there |
IS not sufficient public demand and |
necessity Tor the same. to the damage |
of individuals and even municipalities. |
There are many towns in the State. |
within my personal knowledge which |
VIII for years to come suffer under |
the burden Of excessive taxation from |
having voted credit to these prema cure |
and too much promoted enterprises. 4
1t is claimed that the rates Of all |
such corporations should be regulated |
by competition. But competition al !
ways ana always has been an e,.een- \
siVc method. II there exist two corDor-
ations where one could as well serve
the public, the public must ultimately |
pay the cost Of supporting the-.-two
when only one is needed. Many of |
these corpora tions are in their .ery
1t is best that. TO a GER
tain extent. they remain SO. The only |
true policy of the State. il seems TO
me. would be to allow corporations of |
this nature to be created only when |
the public actually needs them. and |
whenever their rates of service exceed !
a reaSo BILE income on the capital in
vested. compel them through the leg
iSla tule or the court to reduce 1heir |
rates. To emphasize this proposition.
no peIma nent relief from these bur
dens can result from competition as |
the wastes and costs of competition |
must in the end be borne by the pub
lie itself Relief. however. will come |
when we limit the number Of corpora
tions and consequently the amount of
capital invested. and then restrict them
to reasonable income thereon. In
other words, regulate by legislation |
rather than by competition. In this
way only can the public receive the
best service at the lowest rates.
The gentlemen who object to a meas
ure like the one under discussion pro-
fcSs great sIlicitude for the welfare of
our State. They claim to believe that
such a law would stitle and retard en-
terprise. would prevent the growth Of
present industries and the birth of new
ones. This point might have been we'll |
taken a quarter of century ago,
when quasi-public corporations in this
State were to quite an extent expert
mental. But conditions have changed.
Such corporations are no longer an eX-
pertinent. but have demonstrated their
ability to earn liberal dividends, in
many instances even upon highly di-