The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1902-10-19

mayors OF 10 cities III dt pairs
country of more than 5000 inhabitants. and
he received replies from ffty-three. out OF
this number the following cities receive no
compensation for their franchises, viz;
Bayonne. N. j.: Birmingham, Ala: Bridge
port, Conn; Charleston, s. c.; Dubuque.
Ia; Fitchburg. Mass; Grand Rapids, Mich;
Houston. Tex; Portland. Me-; Quincy, H.;
Schenectady, N. Y; Salem and Somerville,
Mass; ST. Joseph. Mo-; Troy, N. Y; To-
ledo. o.; Trenton. n. j.. and Wilmington,
Del. The only rational explanation of this
state of things is that these cities granted
franchises for long periods before the
practice of requiring compensation for
them began, and that the franchises have
not yet expired. Probably in some cases
they are perpetual and exclusive thus
barring the city from ever correcting the
original blunder AS the cities above named
are eighteen out of ffty-three which sent
replies it is evident there must be many
others in the same category. The mayor of
Portland, Ore, reported that the city re-
ceived no compensation from street-rail-
ways, telegraphs, electric lights and gas
companies. This includes all except tele-
phones and perhaps one or two others.
The mayor admitted that "the city has
been very careless in the matter" and he
was certainly right. Seattle has an official
inspector of franchises, who wrote that the
income derived from that source was about
$751; 900 a year. The mayor of Elizabeth, N.
J., reported that the principal street-rail-
road company there had a franchise
granted many years ago, under which 1t
paid nothing. bat another company. more
recently chartered, is required to pave from
curb to curb the streets through which it's
lines run. to keep in repair the pavement
between its tracks and for three feet out
side the tracks on each side, to sprinkle the
streets and remove the snow, and for a
period of five years to pay 500 a mile for
trackage. 1t is also required TO pay 3 per
cent. of its gross receipts for five years sue
ceeding 1905, and for every year succeeding
1910 must pay 5 per cent. of its gross re-
ceipts, or a sum equal to at least $3.50 a mile
for its trackage. Elizabeth has two tele-
phone companies which supply free service
for city offices and departments and pay
500 a year for every mile of subway used
by their wires. the total mileage to be not
less than ten miles. There is a city will
| good business sense. The plan of requiring
percentage payments ON gross receipts pre-
walls in quite a number of cities. In Provi-
dence. r. L., the street-railway pays 5 per
cent. Of gross earnings, telephone compa-
MES 3 per cent, electric light companies 5
per cent. and gas companies 3 per, cent.
One advantage of that plan is that the
city's revenue increases with the increase
of business. Schenectady, N. Y, a city of
$4,000 population, reports that it receives no
compensation from any franchise except
the free use of twelve telephones from one
of the companies. In Cincinnati street-rail-
ways pay a tax of 5 per cent. of gross earn
ings and an additional license on cars of
per cent. of earnings. Cleveland receives no
compensation in money from street-railway
telegraph, telephone or electric light fran
chises. Two gas companies pay 10 per cent.
of their gross receipts. st. Paul receives
practically nothing for present franchises,
but the new city charter, adopted two years
ago, provides for a 5 per cent. tax on the
gross receipts of all public corporations,
after the expiration of present franchises.
Rochester, N. Y, receives no compensation
from the gas and electric light companies,
while the street-railway company pays a
tax of S. a year on each car and 1 per cent.
Of its gross earnings. In this city the Cen
trail Union Telephone Company pays 5000
a year, the New Telephone Company the
same amount, and the street-railway COM
pany $4,000 a year. Indianapolis is almost
alone in charging a fixed annual payment
instead Of a percentage on gross receipts
If these annua payments were a fair
equivalent for the franchises at the begin.
ming they will be very inadequate long be.
fore the charters expire. 1t is generally
conceded by those who have made a study
of the subject that the fairest and best
form of charging for franchises is a tax or
gross receipts, and that practice will prob.
ably be universal before the time comes
for this city to grant new charters. Cities
that have granted perpetual charters fol
nothing are helpless.