The Owosso times. (Owosso, Mich.) 1897-1926, 1906-11-30
A MENACE TO CITIES
Professor Fessenden Sounds
Note of Warning.

Cities Not Adapted to Operate. Bust
ness Enterprses-Loss of Capital
Through New Developments - Tho
Danger a Real One.
1t is becoming more and more gen.
orally recognized that undertakings
founded on the great public needs of
the highly organized society of modern
times should be controlled by society.
Whether having the power, it is adj
visable that municipalities should ac-
tually engage in such undertakings or
whether they should merely maintain
their control, as it has been aptly put,
through their powers as landlord Is
q matter which will be determined by
the municipalities from political, social
and economic as well as engineering
considerations.
Considering the question from its en-
gineeripg side alone, it is found that
from the very essential nature of the
matter only q certain class of engineer
ing undertakings can be efficiently and
properly operated by states or munich
palities. 1t is very important that this
limitation should be recognized, as
where the limitation has been over,
stepped it has resulted in heavy finan-
cial losses to the governing bodies I'M
mediately concerned, it has seriously
checked development in engineering
lines, and these results have in conse-
quence afforded a strong argument TO
those opposed to municipal operation
of public utilities.
1t is true that under state or munich
pal operation some minor and sporadic
Developments may be expected, but
nothing of q general or important char
acter. Important developments gen.
orally come only from the hands OF in
! dividuals or bodies responsible only to
themselves and provided with the in
centive of large profit. The elimina-
ton of self responsibility and incentive
would inevitably produce condition
in industrial and scientific develop
| ment analogous to the dark ages.
| 1t is to be noted that this conclusion
| is derived from engineering considera-
lions alone and does not include any
| consideration from the political, sDciai
or economic side. There may, it is
conceivable, be political, social and
| economic considerations which tend to
| affect this limitation. Considered, how
ever, from the engineering standpoint
| alone there can be no question but
| that the field of state and municipal
operation should be limited to under
takings in which there is no immediate
| far INN IVA
method.
A danger which is always associat-
ed with the ownership of Industrial
undertakings is that the capital invest
ed may be lost through the develop
ment of new and cheaper methods and
| processes. The extent to which indus
trial machinery Of certain types is rem
dered obsolete by new improvements
! is not always realized. The writer Is
personally acquainted with one street
car railroad plant in which the entire
electrical equipment of the power
! house was thrown out and replaced
with improved machinery four times
within period of ten years. The Car
negie company is reported, correctly, 1t
Is believed. to have strapped on one
occasion more than S1,0O0,000 worth
Of new machinery which had never
been used.
This has already become serious
matter for many municipalities which
have engaged in undertakings lying
outside Of the engineering limits de-
fined above. Many Of these municipal
tiles installed plants for the produc-
ton of electric light at time prior to
the advent Of important improvements
in generating and distributing electric
ity, and as these municipalities In COM
mon with most municipalities made no
proper allowance for depreciation the
capital invested has been practically
lost, and In addition the cost of cleo
trio light to the consumer Is much
higher than 1t is in other places equip
ped with later and more economical
types of machinery. In addition. heavy
and expensive repairs have been neces-
sary and the taxes correspondingly In
creased. This has reacted upon the
municipalities, since the heavy rates
have caused manufacturers to move
away to other towns, and this again
has still further increased the burden
upon those remaining. There are al
ready indications that considerable
number of these municipalities which
have engaged in improper undertakings
are entering upon a period of financial
Mfficulty.-R. A. Fessenden.