Crittenden press. [volume] (Marion, Ky.) 1879-1907, 1907-01-10

4
ness Enterprises-Loss of Capital
Through New Developments - The
Danger q Real One.
1t is becoming more and more gen.
orally recognized that undertakings
founded on the great public needs of
the highly organized society of modern
times should be controlled by society.
Whether, having the power, 1t Is ad-
visable that municipalities should ac-
tually engage in such undertakings or
whether they sho I'D merely maintain
their control. as 1t has been aptly put,
through their powers as a landlord, Is
a matter which will be determined by
the municipalities from political, social
and economic as we'll as engineering
considerations.
Considering the question from its en-
cheering side alone, 1t 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 1t has resulted in heavy fnan-
cial losses to the governing bodies Inn
mediately concerned, II has seriously
checked development In engineering
lines, and these results have In conse-
quence afforded a strong argument to
those opposed to municipal operation
Of public utilities. - rr'~Sr
1t is true that under state or munich
pal operation some minor and sporadic
developments may be expected, but
nothing of a general or important char
acter. Important developments gen.
orally come only from the hands Of in
dlviduals or bodies responsible only to
themselves and provided with the in
centlve of a large profit. The ellmina-
ton OF self responsibility and incentive
would inevitably produce a condition
in industrial and scientific develop
ment analogous to the dark ages.
1t Is to be noted that this conclusion
is derived from engineering consldera-
lions alone and does not include any
consideration from the political. social
or economic side. There may, 1t is
conceivable, be political, social ard
economic considerations which tend to
affect this limitation. Considered how
ever, from the engineering standpoint
alone there can be no question but
that the field of state and municipal
operation should be limited 10 under
taklngs 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 to 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 a period Of ten years. The Car
negie company is reported, correctly, 1t
is believed, to have strapped on one
occasion more than $1,0O0OO0 worth
of new machinery which had never
been used.
This has already become a 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-
ton of electric light at 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 cleo |
trio light to the consumer is much |
higher than 1t is in other places equip |
ped with later and more economical |
types of machinery. In addition, heavy |
and expensive repairs have been neces-
sary and the taxes correspondingly In
creased. This has reacted upon the |
since the heavy rates
have caused manufacturers to move |
away to other towns, and this again |
has still further increased the burden |
upon those remaining. There are al
ready indications that considerable
number of these municipalities which
have engaged in improper undertakings
are entering upon period Of financial
dif1culty.-R. A. Fessenden.