The Manitowoc pilot. [volume] (Manitowoc, Wis.) 1859-1932, 1907-01-17

]
uated The industrial and commercial pros.
/ perity of every city and the comfort OF
every urban home is vitality affected by
| these agencies which are now independent
/ of public control.
Over Capitalization of Local Service Cor
! p0rations.
The custom has long prevailed in the
organization of public service corporations,
! TO issue bonds to an amount sufficient TO
| pay the cost of the entire plant, the stock
! being issued without consideration, as a
! stimulus to the sale of the bonds or 20 re-
! ward the promoters. When the corpora
! ton. through the earnings exacted from the
public, is enabled to pay attractive, dlvl-
deudS the stock Is listed on the exchange
! and ostcnslble value is given to that which
has none and the shares are bought at sub
stantial prices by innocent purchasers. EN,
ccssiye rates must thereafter be maintained
to pay dividends upon the fictitious capltaI-
izaton, thus imposing an unjust burden
upon the community.
In nearly all cities, profits dependent upon
gratuitOus franchise grants have In very
short time become so large as to require
concealment. Further the progress OF the
public service industry has neccssitated
ment These, In turn, have invited financial
manipulation at every turnover ana re-
placement and finally the rapid growth OF
cities has necesStated a great extension OF
lines and mains, always at increased capt
tai and often leading to consolidation with
all their attendant opportunities Tor INIT
ton Efficiency Of service has seldom Oeeh
n factor in determining the amount or capl.
talzaton. In order to pay interest ana
dividends on this large capital, rates haEe
been fixed at point entirely unrcasohaDie
in comparison with the cost or service
Largely increased earnings are also dls-
posed Of by resortng 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
ducemcnt for such additional issue Is the
practice Of giving to existing stockholders
the prior right to subscribe Tor proper
tionate share thereof at par, regardless OF
market value In such Eases the corpora
lions will receive but portion OF the
amount they might have realized, and me
people Of the cities are taxed TO pay rates
on the excessive issues.
Remedial Legislation.
Tho remedy for conditions now so opprcs-
siyc IN the municipalities OF the state lies
I'm a complete revision OF the statutes relat-
Ing to the organization OF public utility cor
porations and the granting OF muhlclpal
franchises and providing for the super.
vision by public authority Of the issue or |
stocks and bonds and the control of the
rates thar 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 aggrl- |
waited by Oycrcapltallzation and oppressive
homogeneous The remedy lies In placing
an absolute limit by the Legislature upon |
the time for which franchise may be
granted, and prescribing Il period upon |
which all franchises heretofore granted |
shall terminate. Already twenty states ana
two territories have adopted legislation hN-
ing such limit. ranging in great majority
of cases from 20 to 30 years, ana con
tanning a provision permitting the city TO
purchase the plant Mt the expiration or
the term or at time PRIOR thereto, me
served to the Legislature the power to
alter, amend or repeal all general or spr,,
cial laws granting corporate powers apd
The Legislature for the control OF public
service corporations has been upheld Tor
more than u generation by the supreme
court OF this state and OF the United States,
and there can be no just cause for com
plalnt against the adoption OF proper
amendments TO charters and franchises
which have since been granted and accept
cd Such grants have been made subject 20
the exercise Of this power for the protec- |
ton Of the public.
which have been granted to public service |
corporations in pcrpetuity, or claimed to be
such and also many which have been |
granted for Il very long period Of years, the |
ferns Of which will operate harshy and |
opprcssiycly, ! recommend the enactment |
Of a law declaring that all franchises here
tuforc granted 10 any individual, partner |
ship or corporation, to engage in public |
service business In my city In this state |
shall terminate on January l. 1880, unless
thcy shall sooner expire by their own terms |
and also declaring that no franchise OF !
such n nature hereafter granted shall be |
Tor u longer 'NTh Juan twenty St'IS'
State Commission,
Tho only adequate remedy for excessive !
charges by public service corporations is |
~" f'EUa, Ion "i. W. !alrH ny pu9Hc Al |
luotI,y' r., y. J." -in'" IN, n.S INur,ISe lnlA |
power uIt'u$ OF ~ iH.S uIrSat' IN |
authority to any approprlat" puhlic agency. !
inns "o.ul1' s".Et ."-u'"'I ny, inc Su |
pTsnr '1,,' VI rc ,uH S c"g ~ neJ9 re-
.,nIHi,u ~ VI i i,"t u.s. 81 LUZ GU! OF |
Aihul7"A vs.. naa,,,l ,'as hl'cuIo com, |
pahS. i,'"'."n 'u W. wv yVHloI ana |
rrGuIlu"h OF I9'h pu.ur "'rNIr" corpora |
t9ns be Etaiitta TO- slato , commission.
haa7H' h"''' q ~ "'!u Wv i"ih uHNo tlotueu |
lnr S,Hlg ',3,on wv r IinPIr puWct OF
supervision ana 'nhtToI OF th' organization |
an4 !RC'at,,o1, T." pa"''g uo''sty corpora ions
and the statutes or those states viii lndl- |
GHi' inc nature "inii u, 'hIsloi'pI n'GID d II |
Wisconsin. IT. WI ID. I"igd iHHt II was |
inuuu ,Np,",'"l ~ Tue l,EIslalurrS or |
InoS' hlarS No. Ia, , .,. IIr SUPERVISION or gas
ana 'ir''Ilg l-llu- yol1lhnlts IN com |
mission H'IalTln ah! ulsLhtI from the !
runway cohu,laA."H 70 "Id'h inc r'Eu- |
Atiou VI MI 'lu"L1S ~ thlIusi. |
CO. ) ne u'l'iIn.. !. NJ character OF
ihr services ItHa'r ~ 10y tneSC c0rPQrauonf
may SuEs.S W., ~ up'nH OF IlarlnE the |
,oRiFul nm ItSu!utlnll lh'Trol III uIHrront |
nrn =" tbn soyern Hl Inehr PoWGfS
concerning lnr SrNtInI tIasS'S OF puDIl' |
service gotPoi"ilIolIS, hoWrlPf, II II matter |
lor d,g',ai,it HG.'t should y DC
these corporations, or any Of them under
a srP9,Iin COMMISSION thr expense thereof
suunu W. ny ny iuou,Ialr IMclse ice |
10 pc "niiS'u upon tne c"rPorauOnS sun. |
Jrti /" autH ,lS,"m ~ p'9Prtc'y OF
sum l,tut lS.'.. ~ upp9lttni Wlch IT Is con |
Su,I'u llu' ~. " ~ IailN' tuntrni " |
ltct5 part Hiuy "i t tt Mn9'e peoIIe or the
n,TI ""u IL IL 80 ,Sa.ni I tWi S"ou'u not pe
iunlic sviEHH corpolauohS are 'htltIcd |
80 ', ir,t iiaU"' 1l''' t"' n,lu"' tSr19l