Frostburg mining journal. [volume] (Frostburg, Md.) 1871-1913, 1908-08-01
BY EVERETT W. BURDETT.

its to the Enterprisins Investor.
BY EVERETT W. BURDETT.
The subject of public control of pri-
vate Investments in quasi public enter
prises has had a somewhat natural
and logical development in this coun-
try. Beginning at practically the zero
point, it progressed slowly at first, but
Is now moving forward with giant
strides. At the time of their inception
these new enterprises were so welcome
to the public that 1t did not seek to
throw about them any obstructive or
harassing conditions. Rather, 1t wei
coined them with open arms and was
only anxious for their establishment
and development.
This Is strlkingly shown by the pro-
visions of the charters granted by the
state of Massachusetts to three of the
first railroads in this country, organ
lied respectively In 1929 and 1880
that the rates of fare and freight, the
construction of the roads, the form of
cars land all other matters and things
in relation to the use" of the roads
should be wholly within the discretion
of the directors. At the close of 1880
the total railroad mileage of the
United States was only twenty-three,
and the public was and for many
years continued to be interested in the
establishment and development and
not in the regulation and control of
railroads.
ND CO rAfnrnnHn IN n
electric telegraph The first line was
built between Baltimore and Washing
ton In 1874, and, if my memory is not
at fault, congress voted the inventor a
large sum in recognition of his con
tribution to the public welfare.
SO also when the street railway was in
PRODUCED in 1852 and its successor, the
electric railway, about 1856, and when
the telephone and electric light both
made their first appearance in com
mercial use In 1876 the communities
which they were established to serve
were clamorous for their introduction
and were not much If at all concerned
about their regulation.
But In all these cases what was at
first a wonder or a novelty soon be.
came commonplace adjunct to daily
life. The public awakened to the fact
that these utilities had not been cstab
lished for purely eleemOSynary pur-
poses-that, in the expressive language
of the day, their owners were mot in
business for their health" The more
modern doctrine, promulgated, | be-
lieve, from New York city of the pub
lie be damned" was more or less
natural outcome of later conditions.
The result was that In each case and in
n somewhat natural order the public
took hand In what turned out to be
the dangerous game of public regula-
ton and control
At first these efforts took the form of
rate regulation in the case Of railroads.
These were frequently the product Of
resentment and prejudice and except
for the Intervention of the federal ju-
dietary would have been disastrous. BY
throwing over transportation companies
the protection of the constitution, guar
anteeing all our citizens, including cor
porations, against spoliation under the
forms of law, rulnous consequences of
Ill advised legislation have frequently
been avoided.
The supreme court while affirming
the right and exclusive authority of
state legislatures to regulate rates and
fix maximum charges, has also subjected
the reasonableness of legislative action
in this respect to the test of judicial in
Qulry. 1t has insisted upon rates which
are sufficiently alike to give reason
able return upon reasonable invest
ment and at the same time be inner
emily fair and reasonable to the public.
While insisting that ordinarily cor
poration Is entitled to some profit upon
its enterprise the court has not as yet
undertaken to say what that profit
shall be, except In one case Q92 L. S.
pol, 1903, that the rates Of water
company may be lawfully reduced by
legislative action to a point where the
business will yield only 6 per cent upon
the fair value of the Investment.
1t seems natural and appropriate to
suggest at this point that one Of the
most important functions of the newly
created public service commissions OF
the state of New York may be &c,
determine, In the first instance, what
n reasonable return is upon capita,
invested In the public service corpora
tons which are under their super
vision and control, and it Is at least
reasonable to indulge the hope that
they will not undertake TO limit that
return within the narrow margin
which has been accepted by the court
as sufficient In the case of such com
paratively simple and well established
enterprise as that of the supply of
water. There Is but little analogy be-
tween the cases. If the return on capt
tai invested in what can be properly
described as essentially experimental
industries, such as street railway and
electric enterprises, is to be confined
to any such figure as per cent 1t Will,
in my Judgment, be sorry day, not
only for those who have their money
at hazard In these enterprises, but for
the public at large whose interest lies
in their proper development and ex-
tension.
AS conservative man as President
Eliot OF Harvard university has re-
Gently said:
"In such enterprises there are often
heavy risks. Hence men will
not undertake them. for the ordinary
return on safe investments. They
must be induced to venture their capt.