The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1905-04-07
COUNCIL TAKES UP
PHONE RATE BILL
Assembly Is Informed City Has
Power to Regulate
Tolls


dents of the Midway district were IA
vored by the Twin City Telephone
company in being afforded free Mime
apolis connection, while the balance Of
the st. Paul subscribers to the COM
pany were compelled to pay tolls. on
the showing made a demand was based
for the adjustment of the interurban
tolls The assembly. acting upon this
INITIATIVE, called upon the corporation
attorney to inform it as to the right of
the city council to regulate telephone
rates.
Last night the assembly received a
communication from the corporation
attorney in which he gave it as his
opinion that the city has the power to
regulate the charges to be made by the
companies.
Upon motion of Assemblyman Haas
1t was decided to convene a meeting of
the common council in a committee of
the whole on April 10 for the purpose
of devising ways and means for acting
upon the suggestions of the corporation
attorney.
The following is the text of Mr.
Michaels opinion:
Corporation Attorneys Opinion
To the Common Council: Assembly file
No. 1914 instructs the corporation attor-
ney TO investigate and report what if any
power of regulation and control the city
possesses over telephone companies doing
business in the city. l assume that this
means power of regulation and control
beyond mere police supervision over the
use of the streets and manner of conduct
ing their business.
The Twin City Telephone company is
operating under franchise granted by
the city by ordinance No. 1874, passed in
1898, which fixes maximum rates to be
charged by the company for service, and
provides for the payment of a 5 per cent
annual gross earnings tax under certain
contingencies which have not yet arisen:
company Is concerned. the common coun-
Gil has not the power at this time to fur
ther regulate rates or to compel the i'm
mediate payment OF a gross earnings tax
without the consent of the company.
The Northwestern Telephone Exchange
company was organized in 1878 under the
laws of Minnesota, to conduct a telephone
business in and between the cities of St
Paul and Minneapolis and in other cities
of the state. and has ever since. been op-
Grating in the city under the general law
giving telephone and telegraph companies
the right TO erect poles and string wires
in public roads and highways.
In 1898 the law was amended so as to
require permission to be first obtained
from the city, but in the cases of the
Northwestern Telephone Exchange com
pany VS.. Minneapolis, 81 Mimi, 40, and
Duluth VS.. Telephone company, "a Mimi,
4S6 the supreme court held that this law
phone companies organized and doing
business in a city prior to the 1898
amendment to the general law. a fran
chiSe not only to continue the operation
of their plant already established. but to
extend the same on other streets without
obtaining franchise from the city, not
wlthstanding the amendment of 1893.
While these cases are in conflict with
decisions of the supreme court of the
United States and other states under SINH
lar laws. they are. nevertheless. binding
on the question of construction of our
state laws. and while in force. l see no
way of compelling the Northwestern Tel
ephone Exchange company to assume the
payment of gross earnings tax under the
terms or our 1900 home rule charter. but
1t does not follow that the city is without
a remedy equally as effective and perhaps
more advantageous than the payment of a
gross earnings tax alone, without other
regulation.
Telephone companies are among the
class known to the law as common car
riers, and subject to public regulation and
control, unless this right has been sur
rendered by some grant in the charter of
the company. There is nothing in the
law under which this company is organ
lied, or in any ordinance of the city re-
lating to il, which assumes to fix or regu-
late the prices or tolls it may charge for
services; hence the only grant 1t takes
from the state in that regard by its char
ter. is the implied right to collect reason
able tolls for the service rendered.
That the state may regulate the rates
OF common carriers is no longer an open
question. This is settled by long line
of decisions of the United States supreme
court, beginning with Mum VS.. Illinois. "a
United States, lib, which affirm the doc
tr1ne that private property is subject to
public regulation when it is devoted to a
public use.
The decisions also likewise agree that
this power of regulation. as applied to
local public service corporations, may be
exercised by the municipality. if the
power has been delegated to it by consti-
tutional or legislative authority.
The home rule charter of this city was
framed under a constitutional provision
which gave the Legislature of the state
power to prescribe general limits within
which charters should be framed
Pursuant to this authority. the legisla-
ture, by chapter 351, Laws of 1899, and
chapter 2SS Laws of 1908. the enabling
acts under which our charter was framed
and amended, provide that:
1t shall be lawful for any such city or
village. in such charter. or by amendment
thereof. to provide for regulating and
controlling the exercise by any person or
corporation of any public franchise or
privilege in any of the streets or public
places in such city. whether such fran
chises or privileges have been granted by
SAID city or village, or by or under the
state of Minnesota. or any other authority.
to the same extent, and in the same man
ner as might the legislature of said state"
This is clear delegation of power to
the municipality TO regulate the rates of
pubic service corpora tons to the same
extent as the state itself might do through
it's legislature.
Acting on this authority as well as its
inherent constitutional power TO deal with
all matters germane to municipal gov
eminent. the charter commission framed
and the people ratified by vote. the pres
ent city charter. which provides at sec
ton % of chapter ", as follows:
The common council may by ordinance
provide for regulating and controlling
the exercise by any person or corpora
ton of any public right. franchise and
privilege IN any of the streets and any
public places in said city, whether such
right. franchise or privilege has been or
may be granted by said city or by or
under the laws of the state of Minnesota
or any other authority
Again the same chapter at section 81
provides:
THE common council shall have the
power to regulate and control the max
imum price to be charged by any corpo-
ration or person exercising any privilege
franchise in the city for the service
rendered by it to the city, and to any
other person or corporation: but such
price shall be fair and reasonable"
These provisions are certainly explicit
enough TO authorize the common council
within reasonable limits, to fix the max
imum rates to be charged for local serv-
ice by the Northwestern Telephone Ex-