Watertown weekly leader. [volume] (Watertown, Jefferson County, Wis.) 1906-1908, 1906-10-19

a comparison with such corporations
in other cities. The condition pre-
valllng in Milwaukee is no better nor
worse than in the other cities in the
state, but data Of the smaller cities
Is not SO readily available. The
people of Madison, Oshkosh. Superior
and La Crosse are confronted by the
same problems as are the people Of
Milwaukee, and look to the legisla-
ture for the same relief.
For the production and delivery of
gas the citizens of Milwaukee are
compelled 10 pay Il per cent more for
lighting gas and 10 per cent more for
fuel gas than the average rates in SIN
teen Of the leading cities in the
country.
What is true OF gas companies with
equal furce to lighting and traction
companies. Between the years of
| 1901 and 1905 the net earnings of the
| Milwaukee Electric Railway and Light
Company increased 43 per cent. 1t
has accumulated over and above all
expenses for operation, interest and
dividend, an reserve and depreciation
fund of nearly $500, eco. 90. This
large sum has been deducted from
gross earnings, and is a profit aside
from those already distributed. The
net earnings per mile of this company
exceed those of nearly every large
city in the country.
Electric light rates are grossly I'M
just. Of nineteen of the Targets cities
in the United States, not one pays so
high a rate for are lights as does Mil
waukee. In most of the cities the
rate is from SIS TO $25 less per arc
| light per year. This comparison is
not made with the rates of municipal
! plants but with those of private cor
porations, actuated by the same mo-
tive as the Milwaukee company, but
who through public criticism OF state
law, have been compelled to reduce
their charges. In field where over
charging is proVerbial, Milwaukee is
the greatest sufferer.
WATERED STOCKS.
These excessive rates, or rather the
lack of restriction upon rates, could
have but enc result and that was a
general resorting to the practise of
Watering stocks. In no field has
this become SO prevalent as among
public service corporation. Realizing
that boundless wealth could be gained
| by gradually raising rates as to which
there was no legal limit, and that ac
tual profits could be concealed from
the public by an issue of fictitious or
watered stock the public has been
compelled to support ana to give value
to millions of dollars in securities for
which no legitimate expenditure was
ever made. During the decade from
1890 to 1900 the cost of material used
by the gas companies of the United
States lncresed 46.9 per cent; the num-
Der Of plants increased 1872 per cent;
value OF products increased 1928 per
cent; wages increased 46.9 per cent,
but the capitalization grew 1871 per
cent. OF equal interest is the fact
that the salaries Of officers increased
LAG. per cent.
WHERE THE REMEDY LIES.
The only remedy for this condition
lies in the adoption of law giving
the state railroad commission the
power to determine the reasonable
ness Of the rate for services in each of
the cities in the state. The commits
sion should be granted the power to
permit it to make an expert eXamina-
ton of the properties and investment
of each company in order to deter
mine the earnings needed to yield a
fair revenue upon The amount actual
ly invested. 1t should have the power
to determine the necessity and reason
ableness of every issue of stocks or
bonds by such companies and to refuse
the issue Of any securities unless they
be for actual expense incurred. Only
through such law will the practice
of stock Watering be stopped and the
resulting necessity for excessive char
ges be prevented.
COMMISSION TO REGULATE.
1t has been urged by the democratic
party that the power to regulate these
corporations should be left to the sew
eral cities, thai it is q local problem
and the common councils are best
qualified to discharge this duty.
No course could be more disastrous
to the interest of the people. The
determination Of the reasonableness of
a charge for service requires the most
thorough and technical knowledge.
1t requires the ability to examine ac-
counts and to understand the results
Of an investigation. 1t requires the
knowledge of finance, cost Of manu-
facture and distribution to the minutest
detail Are our common councils COM
posed Of business experts? Why have
they not already dealt with the fran
chise problems in their cities? 1t is
General knOwIcdge that common conn