The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1907-09-18
MOST USEFUL TAX.
Allen Ripley Foote Discusses Public
Service Franchises.

Norfolk. Va. Sept. 1s.-Anen Rip
| ley Foote, president of the Nationa1
Tax association, and commissioner of
the Ohio state board of commerce, de-
livered an address before the eleventh
annual meeting of the league of
American municipalities here today
on the subject of Low Rates for Pub
lie Service VS.. Franchise Taxation
The most useful tax to place on
pubic service corporations. said he.
IS 10 require them to provide a ser
wee capacity much greater than is
sun1cient TO supply present demands.
and to extend their service lines be-
yond present paying limits, thus caus-
ing them to serve as a factor in i'm
proving and building up the ever wild
enlng limits of the municipality, in
creastng and diversifyfng the indus
tries of its inha bitants and contribut-
ing to their comfort and prosperity
Investments in public service utilities
should be limited only by the require
ments to be provided for, and the
right of way for their service lines
should be unobstructed.
Taxes upon the property of pub
lie service corporations not only en-
nance the cost of the users of the SER
vices. but they accomplish this for the
benefit of non-users and alien prop
erty owners. All persons are not US
ers OF these services, nor. is all prop
erty owned by such users, but all
property within a municipality is tax
ed If the property of public service
corporations is not taxed, the tax on
all other property may be increased
trifie. This increase would fall upon
the property OF non-users and alien
owners and equally with that of users,
but the users of the services would be
benefited by the decreased cost of the
services to them When a user OF a
public service votes to tax the prop
eFty or the franchise of the corpora
ton rendering the service he votes to
reduce the taxes of non-users and
alien property owners and generously
pays the amount he thus saves for
them out of his own pocket Taxes on
the means by which a supply for
need IS produced are part of the cost
Of producing the service.
THE policy of low taxes, or no
taxes, should not be adopted unless the
interests of the people are well safe
guarded by legal requirements that
will make 1t certain that they will re-
spondingly low charges for services
rendered. The demands of economic
law should find correct expression in
the conditions created by statutory
laws. To secure the best possible pub
lie services at the lowest practical
price, economic law requires:
''First-That a public service cor
poration organized to supply a per-
petual public need shall have the ex-
elusive right to supply such need per-
petually.
.Second-That all accounts shall be
honestly and correctly kept; that econ
omic thrift shall be insisted upon in
every department.; and that charges
for the use of these services shall bear
a fixed relation to the necessary cost
of production
"A comparison of these economic
with the laws of all states
will clearly show how unintelligently
well meant efforts have been directed |
in all attempts to secure for public and
private users the services supplied by |
utilities by placing dependence upon
the principle of competition instead Of /
the principle of governmental regula- |
ton.
THAT the statistics of municipal af- /
fairs and of public service utilities.
however owned and operated, may be
properly developed. it is necessary that
the state shall establish department.
of public accounting and inspection,
as an independent department of state,
properly organized and equipped, to
cover all features of municipal affairs,
and of the public utilities that supply |
the public needs of municipalities and
of their inhabitants
Under a system of state regulation, |
such as is here advocated, every inter- |
est of users, OF municipalities and of /
the state, will be best served by grant
ing exclusive. perpetual and untaxed
franchises to public service corpora
-ions. Then operating under such con-
iitions, public service corporations can
render the best obtainable service at
the lowest profitable rates and can sat-