Daily capital journal. (Salem, Oregon) 1903-1919, 1907-01-22

Danger Roa Ono.
Ii is becoming more and more gen.
orally recognized that undertakings
founded Oh the great public needs of
the highly organized society of modern
times should lie controlled 10y society.
Whether, having the power. it is nd
vsable that municipalities should ac-
tually engage in such undertakings or
whether they should merely maintain
their control as 1t has been aptly put,
through their powers as Il landlord. Is
matter which will be determined by
the municipalities from political, social
and economic as well as engineering
considerations.
Considering the question from its en-
lineeriag side alone. II Is found that
from the very essential nature of the
matter only a certain class of engineer
ing undertakings can be efficiently and
properly operated by states or munich
palities. 1t Is very important that this
limitation should be recognized, as
where the limitation has been over
stepped Ii has resulted In heavy finan-
clal losses to the governing bodies i'm
mediately concerned. II has seriously
checked development in engineering
lines, and these results have In conse-
quence afforded strong argument to
those opposed to municipal operation
of public utilities.
Ii is true that under state or munich
pal operation some minor and sporadic
developments may be expected, but
nothing of general or important char
acter. Important developments gen
orally come only from the hands of in
dividuals or bodies responsible only TO
themselves and provided with the In
centive Of large profit. The elimina-
ton Of self responsibility aud incentive
would inevitably produce n condition
In industrial and scientlfc develop
ment analogous to the dark ages
II is TO be noted that this conclusion
is CNrlved from engineering consldera-
tiorj alone and does not include any
consideration from the political, social
or economic side. There may, II Is
conceivable. be political. social and
economic considerations which tend TO
uutfl lulN NOhHAaNaNaf hRf
ever, from the engineering standpoint
alone there can be no question but
that the field of state and municipal
operation should be limited to under
takings In which there is no immediate
prospect of or need for improved
method.
A danger which Is always associat-
ed with the ownership OF industrial
undertakings Is that the capital invest
ed may be lost through the develop
ment of new and cheaper methods and
processes. The extent 10 which indus
trial machinery OF certain types is rem
dered obsolete by new improvements
is not always realized. The writer Is
personally acquainted with one street
car railroad plant In which the entire
electrical equipment of the power
house was thrown out and replaced
with improved machinery four times
within period OF ten years. The Car.
negic company Is reported. correctly. IL
is believed. 10 have scrapped on one
occasion more than $l0OOOO0 worth
OF new machinery which had never
been used.
This has already become serious
matter for many municipalities which
have engaged In undertakings lying
outside OF the engineering limits de
fined above. Many OF these municipal
tiles Installed plants for the produc-
tion OF electric light at a time prior TO
the advent Of important Improvements
In generating and distributing electric
lty. and as these municipalities In COM
mon with most municipalities made no
proper allowance for depreciation the
capital Invested has been practically
lost. and In addition the cost OF elee-
tric light TO the consumer IL much
higher than il Is in other places equip
ped with later and more economical
types OF machinery In addition, heavy
and expensive repairs have been neces-
sary aud the taxes correspondingly in-
creased This has reacted upon the
municipalities. since the heavy rates
have caused manufacturers 10 move
away Ia other towns. aud this again
has still further Increased the burden
upon those remaining There are al
ready Indications that a considerable
number OF these municipalities which
have engaged ia improper undertakings
are entering npOn "A period OF financial
difiiculty. Ia A. Fesseuden