Watertown weekly leader. [volume] (Watertown, Jefferson County, Wis.) 1906-1908, 1907-01-18
THE GOVERNORS MESSAGE
DAVIDSON MAKES RECOMMENDED
TONS TO THE LEGIS-
LATUPE.
CONTROL CORPORATIONS.
Wants Commission to Fix Prices of Pub
lie Utilities-Advocate MI
nicipal Ownership.


his first message 20 the Legislature. He
points out that the state was never so
prosperous as it is at the present time.
He says money is plenty and interest
low, and evidences of luxury and COM
fort are on every hand, yet there is much
unrest among the people all over the
country. This has taken form in a de-
maHd for government control of public
service corporations.
The governor points out that never be
fore have the states finances been in
such splendid condition, the receipts
having far exceeded the heavy appro-
priations. Their is in the treasury ST.
612 ,20165.
Taxation.
The governor advocates an amend
ment to the constitution providing for
an income tax and he says that the tax
ing OF personal property often leads to
injustice, and thinks it fairer to raise
revenue by corporate, inheritance and in
come taxes. He advocates the repeal
of Chapter 37S, laws of 1903, which pro-
vldes that the mortgages interest shall
be an interest in the land and shall, I'M
less the mOrtgagOr otherwise directs, be
assessed separately to the mortgage. He
wants a law providing for Il state at
torney to attend county courts where es-
tates are being prObatcd to see that the
state is not defrauded in the collection
Of Inheritance tax.
The governor asks the Legislature to
more clearly define the powers and du-
ties of the state railway commission. He
recommends that the commission be
given power to regulate all transporta-
ton companies, including street rail
ways.
The governor says:
TTt,
way commission during the brief period of
one and onc-haf years since it's creation
pursuant to chapter 362 of the laws of
/ 1903, more than juStificS the long Strug-
gle for its establishment The DISPATCH
with which this commission has proceeded
to unravel the many problems growing out
of our intricate transportation system, the
paInstaking thorOughneSS which has char
actertzed its labors, and the speedy relief
which has been granted to all interests in
answer to complaints as varied as they
were numerous, must challenge the admi-
ration of the entire state. The work of
this commission being highly technical in
character, it is a source of much gratfica-
ton that its present membership is SO
strongly equipped for its task, not only
with practical experience and knowledge
but also with such expert technical skill
for each special line of Investigation and
decision as to be completely in sympathy
with the important interests which it was
created to protect and to harmonic.
Up to December l., 1906 90 for
NAL complaints were made and filed with
( the commission, of which number 81
were disposed of without q ruling of
the commission. In addition to the formal
complaints, 557 informal complaints were
considered Transportation rates grain,
reduced, resulting in material savings to tho
public. Extensive original Investigations
| have been conducted in the field of pas
senger charges, maximum freight rates,
claSSIfCationS, weights and acCommOda-
tions furnished to the travelling public,
which will be the basis of important rul
While their operation under the law has
revealed no serious weakness in its Struc-
turc but on the other hand has demon
strated the excellence and conscientious
ness of the work done in its preparation,
yet the commissioners desire legislative ac-
ton to meet certain conditions not exist
ing ut the time the law was passed or
T not then anticipated. to harmonic it with
other statutes relating to corporations and
which have been upon the statute books
for many years.
BY far the most important recommended
ton for the Legislatures attention IS the
request for 4 more explicit definition of
its powers and duties concerning the regu-
! lation of street railway companies. Under
the construction by the attorney general
and the commission the law at present con-
ferS jurisdiction to regulate any street
railway company whose lines pass beyond
the limits of the city in which it operates.
This right of regulation extends not only
to the urban business of the company but
also to the business of the company out
side of the city. AS result the commits
sion appears TO nave the right TO regulate
the entire business of a street railway com
pany where any part of its lines extend be
yond the limits of the city but no power of
supervision where the operations of the
. company are confined strictly to urban
business. In other words the jurisdiction
of the commission is made to depend en-
tirely upon the fact of part of the line
extending beyond the corporate confines of
, the city wherein ii operates. ManifCStly
this classification is not 4 proper basis for
the regulation of street railway companies
Whether the power and duty to regulate
I'LL public service corporations. including
street railway companies, shall be lodged
with the railway commission is of the
problems which this Legislature should
solve. Concerning the regulation of such
corporations. more is said in another part
of this message. but suffice to say, that as
this law stands, satisfactory and sci
/ CutitiC regulation of street railway COM
panics is impossible. and respectfully rec
ommcnd TO your honorable body that this
law be 50 amended as to extend to the
commission jurisdiction over all transpOrta-
ton companies of the state. regardless of
the location of their lines with respect TO
municipal limits, or the charter Of their
service
Issue of Stocks and Bonds by Railway
Companies.
1t has long been the settled policy of this
state that capitalization of corporations
should be measured by actual investment.
A statute passed in 1874. and which has
since been in force, prohibits the issue of
any stock by 4 corporatton, except in con
sideration of MONEY labor or property,
estimated at its true money value actually
received by it at the par value thereof or
the issue of bonds at less than IS per cent
of the par value, except when such stocks
or bonds have been listed on the stock ex-
change, sales may be made at current
prices The purpose of the statute is plain
and is highly COmmendable, but it is de
fective in that it contains no provision for
administrative control over the subject. In
Il purely private corporation the only par
ties directly concerned in the issue of stock
, are the stockholders and the creditors, If
, there are any. To the CORNER the consider
alton for which the stock is issued is Il
matter of little consequence, If all pay at
the same rate and receive the same amount
in annual diyiden
With respect to public service corpora
tons the situation is different, as dividends
on the stock and interest on the bonds
must De paid out of the earnings arising
from the business, which is of a public
character. The mana cement of such cor
porations feels justified in fixing rates
which will yield 4 sufficient sum TO pay the
cost of maintenance and opera ton and 9th,
or fixed charges, and also interest on bond
upon the stock This basis for establish
ment of rates has received the qualified ap.
prevail of the federal courts. The laws now
IN force are not adequate to protect the
public against the increased capitalization
of such corporations, which are, in most
instances, already capitalized to extent
far in excess of actual investment. Add
the property for which no actual benefit is
received. and for which interest and divi-
dendS must be earned by increased charges
The additional issue of stock may
be prompted where the earnings are