Eagle River review. [volume] (Eagle River, Wis.) 1890-1927, 1907-01-18

guarded but are subject to the rapacity OF
! q monopoly entrenched behind legal par
riers The franchise, which is usually ~, tne
| free gift of the municipality, is CAPT.; n
| lied and re-capitalized us 1t increases -
value by growth of population, and charges
| for services are fixed by the manasse All
with view to realize interest anu an ho ND
dends on the additional issues OF bonus
and stocks. The people are thus taxed at
constantly increasing rate, TO pay 1r r,ntnsd
on their own bounty A franca t no, into
| the Capitalization Of public service cor,
| poration as part of the investment anu
as basis for the establishment OF rates
Excessive Rates.
PnbIic utility corporations in this. state
have usually prescribed their own dl cIa n6siic
| for service without restraint IRON pupCiiio
| authority and with little regard 1or the
public welfare, maintaining rates at t the
most profitable point consistent VIII o tne
| least general complaint. Excessive la ~ .
| have a most depressing influence upon tre
! growth and opportunity OF the munlc \ "a =
| ity, and affect the people more Vitdliy onY,1-
| do the charges fixed by the railway CON- e
panies Every person residing In any any ,t Oh
| our larger cities, regardless OF ms Wealt -
| or station, is compelled to contrlDutGi h ~
and local transportation. The benefits ana
| conyeniences of the use of gas ana elec1
tricity are denied to thousands OF peeps eo tas
because of the eXceSsiveness OF rateS
! Charged Workingman who are compeIiedd
| to travel long distances in gong ~ az tho
| from factories shops and stores nnu lug
street railway fare heaXy r Iqpe this is
| heavy tax, but when 10 cents IS cna iS go
| for which rate there appears TO De no JuS.l +
| fcation, the collection or sucn an az toiI
of money out of the fruits of the DAY lois
| is little short of eXtortlon 1nou .sI 800 ~
our working people present the pltlul spe e.
tacle of being compelled to ton At tn naa n
cupations over an hour each day IN oruef "
| be able to pay the transportation cnaISe
incurred in going to and from their places aces
of employment. The rates for gas anu e e1
| tric service vary as much as ~ per cent
! in cities of the same class and similarly eiI
uated The industrial and commefclal prosr
perity of every city and the comIoTt ~, "
| every urban home is vitality aHecteu ny
these agencies which are now independent
Of public control.
Over capitalization of Local Service Cor
porations.
The custom has long prevailed In the
organization of public service corporations,
| to issue bonds to an amount Sulnclen " ~
pay the cost of the entire plant, the STOCK
| being issued without consideration, as
| stimulus to the sale of the bonds or to re-
ward the promoters When the corpo IA
ton, through the earnings eXacted from Tue
public, is enabled to pay attractive NV,
| dends the stock is listed on the excnange
and ostensible value is given to that when
has none, and the shares are bought at SUI
| stantial prices by innocent purchasers. Elk
| cessive rates must thereafter be malnta!neu
to pay dividends upon the fictitious CAPITA a,,
| iZatiOn, thus imposing an Unjust ouhue1
upon the community.
/ In nearly all cities, profits dependent upon
| gratuitious franchise grants have In very
short time become SO large as to require
concealment. Further, the progress OF the
public service industry has necessltateo
revolutionary changes in plant and equip,
ment. These, in turn, have invited nhauclai
manipulation at every turnover anu re-
placement, and finally the rapid growth OF
| cities has necessitated a great extension OF
lines and mains, always at increased capt.
| tai, and often leading to consoildatlon Will
all their attendant opportunities Tor lnIa-
| ton. Efficiency Of service mas seldom peen
factor in determining the amount OF capl,
| talization. In order to pay interest anu
! dividends on this large capital, rates nave
| been fixed at a point entirely unreasonable
| in comparison with the cost of service
Largely increased earnings are also aus
posed of by resorting to the issue of stock
| dividends, all of which become an increased
burden loaded upon the property from
| which no benefit is received Another IN
practice of giving to existing stockholders
, the prior right to subscribe for proper
tionate share thereof at par, regardless OF
| market value In such cases the corpora
| tions will receive but portion of the
amount they might have realized, and the
| people of the cities are taxed to pay rates
| on the excessive issues.
Remedial Legislation.
| The remedy for conditions now so oppres-
/ sive in the municipalities of the state lies
| in q complete revision of the statutes relat-
| ing to the organization of public utility cor
porations and the granting Of municipal
| franchises, and providing for the super.
vision by public authority of the issue of
| stocks and bonds and the control OF the
rates that shall be charged and the service
that shall be rendered. Such legislation
| should strike at the root OF the matter.
Franchises improvidently granted are gen
| orally recognized in this and other states
as the source of the evil which Is agra
waited by oyercapitalization and oppressive
| The remedy lies in DldClnp
an absolute limit by the Legislature upon
the time for which franchise. may be
which all franchises heretofore granted
shall terminate. Already twenty states and
two territories have adopted legislation NIX
ing such limit ranging IN a great majority
| tanning a provision permitting the city to
purchase the plant at the expiration ~, OF
the term or at time prior ri hd theT wsev me
served to the Legislature the power to
alter, amend or repeal all general or spe--
ca Laws gTg of 9 R9
| the Legislature for the control Of public
service corporations has been upheld for
| more than a generation by the supreme
court of this state and of the United States,
| and there can be no just cause for com
plant against the adoption of proper
| amendments to charters and franchises
which have since been granted and accept
| ed. Such grants have been made subject to
the exercise of this power for the protec-
Since there are franchises in this state
which have been granted to public service
corporations in perpetuity, or claimed to be
| such and also many which have been
granted for very long period of years, the
terms of which will operate, harshly and
| oppressively, l recommend the enactment
| Of law declaring that all franchises here.
tofore granted to any individual, partner
ship. or corporation, to engage in a public
| service business in any city in this state,
| shall terminate on January 1, 1880, unless
they shall sooner expire by their own terms.
and also declaring that no franchise of
| such a nature hereafter granted shall be
for longer term than twenty years.
State Commission.
The only adequate remedy for excessive
charges by public service corporations is
the regulation of the rates by public au,
thority. The Legislature may exercise this
| power directly or it may delegate the
authority to any appropriate public agency.
This doctrine, long. recognized by the siI,
preme court of this state, has been re-
~, 4hn So h. it,