, 1906-01-10

a question of a few years. Tit loss Of
these revenues would mean a state tax
unless we have sources of revenue pre-
served to meet the emergency. Greater
demands upon our income are made with
each recurring year-demands that cam
not well be avoided. There will always
be great public burdens beyond the capac-
iy of any municipality to carry, to the
support of which the state must contrib
ute. Wise forethought therefore will safe
guard and increase the states revenues
for the benefit of all of its people.
Limited Franchises.
The DEVELOPMENT OF electricity as a mo-
tive power has introduced upon our high,
ways a method of travel at once con-
venient and Inexpensive and made them,
as a rule, the roadbeds of our trolley sys-
TENS. The right of way upon the streets
for this purpose is granted by the various
municipalities. They have the power to
make their own terms as to the conditions
of the franchise and the number of years
which II shall continue in force, whether
1t shall be ten. twenty, fifty or nlimite
The trolleys have proved important fac
tors in the development of our state. This
public has welcomed this means of con-
veyance. and little attention has been paid
to the length OF time for which the fran
chises have been granted. Population has
increased, and the use of the public
streets for these purposes has proved to
be a concession of great value. The mu-
inequalities. however, hampered by per-
petual franchises, have not been able to
take advantage of these changed condi-
tions. If the highways are to be used for
business purposes the pc ople, who own the
highways. should be in a position to de-
mand an increased rental as their proper
ty becomes more valuable, just as the
owner of the business block is able to
raise the rent thereon in proportion as
increased trade and traffic center about 1t.
This of course cannot be done If the
streets are leased for an torn
of years, but if the lease or franchise is
limited its expiration would permit new
terms to be made in proportion to the in
creased value of the grant.
How far the power of municipalities to
grant franchises to public utility corpora.
tions should be limited should be deter
mined solely by the interests of the peo-
pie. Their interests will not be served
by a destructive policy. No revenue can
be derived under laws so harsh that they
prevent the development of enterprises
from which the revenue must come.
The question of competition should also
be considered. Under too restricted condi-
lions new and like concerns cannot COM
pete with those holding perpetual and un-
restricted franchises. Nor should 1t be
forgotten that terms that might warrant
the investment of capital in thickly popu.
lated centers would not tempt it in undo.
VelODeQ sections. Inc COMMISSION APP
pointed by the last legislature to investf-
gate this subject will recommend a linn
itation of the power of municipal officials
to grant franchises to public utilities.
That this limitation may not restrict en-
terprises or arrest progress in the rural
districts it might be provided that any
ordinance granting a franchise for a Ion.
ger period than twenty-five years should
be submitted to a vote of the people, with
a limitation as to a maximum term OF
years.
Provision should be made for publicity
in the granting of franchises, both with
regard to the Advertisement of applica-
lions and the prevention of undue haste in
the passage of ordinances for such pur.
poses.
DISQUALIFICATION and Its Remedy.
Limited franchises. however, remedy
only one phase of evils complained of in
connection with public utility corpora
tions. The opposition to public utility
corporations as now conducted grows out
of the belief that they are vastly over
capitalized in the way of bond issues and
watered stock and that they are reaping
undue profits out of the use of the fran
chises that belong to the people. This
question will be acute until these mat
tiers are satisfactorily adjusted. 1t Is not
easy to prevent overcapitalization. 1t is
not impossible, however, to restrict its
abuses.
The present franchise law provides for a
tax of 2 per cent upon gross receipts, re-
CARELESS of the financial condition or
earning capacity of the company. There
would seem to be n clear distinction be-
tween the value of the franchises of pub
lie utility corporations that lay their pipes
or wires or conduitS underground or that
use only so much of the street above
ground as is necessary to string wires on
poles and that of franchises like those of
II that ca a n roo nor.
ton of the streets and highways. If a :
per cent tax on the gross receipts is i'm
posed upon the first class of public utility
franchises, the latter class of franchises
should justly be expected to pay more.
A franchise tax upon the gross receipts
has the advantage of being levied accord
ing to a mathematical rule. There can
be no controversy as to Valuations; there
can be no dispute as to the fairness and
disinterestedness of the board or tribunal
that levies the tax. Corporations know.
the people know. the tax authorities know,
Just how the tax is to be calculated, and
no disputes as to faVoritism can arise.
An extension of the present franchise act
increasing the amount of tax to be paid
by trolley or street railway companies
would preserve this principle and produce
greater revenues to the municipalities.
Such increase of tax should be based
upon no destructive policy, but should be
graded up to a reasonable maximum, so
as not to prevent the proper development
of the transit facilities of the state.
There is another thought well worthy
of the consideration of the legislature.
Massachusetts has adopted a plan for the
division of dividends declared by public
utility corporations in excess of a reasona-
BILE amount. Such a plan, if adopted here.
would, as such companies grew prosper
Gus. provide a still further source of mt