The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1903-03-27
up with the commission the question OF
a new franchise
Says Terms Impose a Burden.

Says Terms Impose a Burden.
AT this point L venture to take the
liberty of calling the attention of the
commission to certain features of the
present situation which must be kept
in mind by the company and also by
the city throughout their negotiations.
The commission is, of course thorough
ly familiar with the provisions of the
city charter particularly the terms
upon which new franchises may be
granted. These provisions require the
city to impose such burdens upon any
company that receives a franchise, and
SUBJECT It's business to such q large
measure of control on the part of the
city that capital may we'll hesitate to
invest in such an enterprise.
Inc company receiving a franchise
must annually pay at least per cent
OF the gross earnings into the city
treasury and this sum is in addition
| to, not III place of. general taxes. The
ffanchlSe cannot be an exclusive one
and its terms must not be for more
than twenty-five years. The company
must file annually exhaustive reports
setting forth all of the details of its
business. and all of its books, records
and papers are open to inspection by
such officer of the city or other per
son whom the common council may di-
rect. The council also has the power.
| from time to time, to regulate and
company shall charge for the service
which II renders both to the city and
! to the public. l know of no other city
! whose charter imposes such severe con-
ditions upon the business of a public
service corporation.
Competition Not Live Question.
Competition in the gas business in
| st. Paul is not a live question. 1t must
! be conceded that no other company can
al q 90 h.
until 1907, whatever the rights of the
| present company may be after that
| time. If in 1907 gas is being supplied
| by a company operating under a fran
| chIse granted pursuant to the pro-
! visions of the present charter the coun-
! ell will have the right to fix its maxi
| mum rates, although such rates must
! be reasonable. The city cares nothing
! for competition unless the result is To
| lower prices. OF course any COMPETE
| ton that resulted in reducing prices
! below reasonable figures would be only
! temporary and spasmodic.
"On the other hand it would be for
the interest of the city to have the
| entire gas business conducted by one
| company, for the reason that in such
| case the city could require the gas to
| be furnished at Il lower rate than If
! the business were split up among sew
| eral companies This is for the reason
! that the price of gas depends very
| largely upon the amount consumed. and
! II one company serves the entire pub
lie the city could, with reason. require
| 1t to furnish the service at a lower rate
than if it We're conducting a smaller
| business. So l say that the question
! of competition is not a live one.
| There has been some discussion in
! the public press and some talk by the
committee of the possibility of the. city
acquiring the plant of the Gas Light
| company in 1907. 1t is very question
| able in my opinion whether any way
can be devised by which the city could
| do this without the consent of the
| company. Assuming, however, that a
| way might be found which would en-
able the city to take over the com
! panys plant, it certainly could not do
so without paying adequate cOmpensa-
ton for the property taken. This
| would amount to a very large sum.
| which the city could only raise by
large bond issue. sa 5ra-
Risk of City in Owning Plant.
Il do not propose at this time to go
| into the question of whether or not u
| municipal gas plant can be success
| fully conducted. However this may
| be, it seems clear that a city in which
| the gas Is furnished by a company
| whose rates are subject to constant
revision by the city is in much bet
| ter position than if the city itself We're
! operating the plant. Even if the city
operated the plant with the utmost
| economy, it could not furnish gas to
| the public at any other than a reason
| able rate. If the city attempted to
| furnish gas at cost instead of allow
| ing a reasonable profit over the cost OF
| manufacture, the city would lose, or
| course the interest upon its invest
| ment, as we'll as the taxes and gross
| earnings fees which it would be able
! to exact from a private company In
| other words, where city has perfect
| control, as this city will have, over a
! company that takes out a franchise
| under the present charter. it has every
thing that can be obtained in the way OF
cheap and efficient service, without
running any of the risks of failure.
| which. to say the least. are some
what threatening in the case of a mu-
| nicipal plant.
The St Paul Gas Light company
! believes that the city of st. Paul viii
| grow, and that there will be a cor
responding increase in the consumption
of gas. 1t is willing to take its
! chances on retaining a practical mo-
nopoly of the gas business, not by vir-
| tue of any guaranty which the council
| can give it, but by rendering efficient
service at reasonable rates. While the
! conditions which the city is required
to annex to the grant Of a new fran
any private company, this company is
! willing to make an effort to conduct
its business subject even to its bur-
| dens.
The company does not know what
| ideas, if any, the commission has
| formed as to the terms upon which u
! new franchise could be granted if at
! all, and also realizes that the commits
| sion acts only in an advisory capacity
! to the common council, the body of
| which must eventually pass upon the
| entire matter. 1t is. therefore, difficult
at this time to do more than suggest
| in a general way what the company
! thinks would be fair basis for a new
| gas lighting franchise. If the commits
I son indicates that it cares to consider
such a proposition, the company will
! make one along the lines named"
History of the Franchise.
The st. Paul Gas company, as COR
| pOration, was created by the territorial
| legislature in 1856, and was given the
exclusive right to lay pipes in the
! streets and supply the inhabitants OF
! st. Paul with gas. The city was given
! the right to purchase the plant at the
expiration of either of two periods.
| one ending in 1877 and the other In
1897, but neither was taken advantage
| of. The further provision was made
| that if the city failed to take advan-
tage of this clause, then the company's
| charter should continue in existence
| for the period of ten years from and
| after the last named date, which would
make the finish 1907.
| This year is the period of limitat ton
! recognized by the city but the COM
pany. as the result Of a special ACT