Washington standard. [volume] (Olympia, Wash. Territory) 1860-1921, 1908-07-24

Electric Light Profits In Stockholm
Vanish When Analyzed-The TeIe-
phone Situation.
By WALTER F. BURGESS.
AS q theory. municipal ownership
can be painted in the most glowing
colors. and to the uneducated and I'M
thinking public it can be presented In
such manner as to gain not only
their favor. but, above all, their votes
Personally / have been greatly i'm
pressed with the growth Of municipal
ownership simultaneously with the in
creased representation Of the socialls-
tic and radical elements in the various
city councils These dreamers and
prophets of unrest must have a text
from which to preach to the discon-
tented, and municipal ownership seems
to be their choice.
There have recently appeared In
some of the semitechnical magazines
beautiful stories Of the wonderful
benefits accruing to the working classes
by the manipulating OF various pub
lie utilities in some Of the cities in
Sweden. 1t was asserted that the cleo
trio light companies had been earning
enormous profits which now. under
municipal ownership. were staying
with the taxpayers and consumers.
Take as one Of the instances the city
of Stockholm. which both owns and
operates its electric light and gas I'M
dertakings. The electric light under
taking commenced operations In 1892
and supplies current for both lighting
and power to private consumers. for
public lighting and to one Of the street
railroad companies. which is compelled
by the terms Of its. franchise to pur-
chase current from the new munich
pal undertaking.
According to the financial statement
for Dec. 81. 1904, the department had
a total investment Of $3,462. 406 and
had set aside the sum Of $651 $50 for
amortization since its organization.
The statement shows what purports
to be profit on the fiscal year OF
So6.123. On the face Of this statement
Stockholm has been quoted far and
wide as possessing one Of the most
successful municipality owned electric
light plants. 1t needs but little inves-
tigation. however, to discover that this
Is only one of the instances, which are
all too common, of results being claim
ed which are absolutely fallacious as
proof of successful trading and to show
very clearly the unsound and unbusi-
nesslike methods which are too often
adopted to support the claim OF munich
pal trading.
In the first place no allowance Is
made for the rental value Of buildings;
second, no city taxes are paid. and
third. no allowance whatever is made
for depreciation. 1t will not need any
elaborate explanation to point out that
had these perfectly proper and ncces-
sary charges been made. the profit"
would not only have disappeared, but
a big deficit would have taken its
place. One of these items alone-the
loss Of the taxes private plant would
have paid-would practically wipe out
the SO called profit. as 1t would amount
to about $4,000 year. In almost
every other case that 1 have investi-
gated. these taxes would actually ex-
coed the profits claimed.
II We consider the undertaking from
a Development standpoint and compare
1t with some American cities a ire
mendous difference Is apparent. The
department did not furnish public
lighting until 1901. and today there are
but thirty-two arc lamps In the whole
city. while out Of a population of
roughly 100000 at the end Of October.
1905, there were only COCO consumers.
One would naturally suppose that II
municipal ownership tended to cheap
en- or improve the service the number
of consumers would be comparatively
greater In cities supplied by municipal
plants. whereas actually 1t Is just the
reverse.
In view Of these facts 1t seems to me
that, recollecting that tho prices charg-
ed for current in Stockholm are the
same rs those charged In many cities
In the United States. and then compar-
ing the difference In wages between
the two countries, one will need to
make a prolonged search to discover
what has become Of those advantages
claimed for the taxpayers and con-
Sumers.
Similar glowing accounts have been
published Of the municipal gas plant Of
Stockholm. Gas Is furnished ut the
standard rate Of 91.7 cents per 1000
foot which Ia roIo<iyolv htuhov <hou
the rates charged in the larger Amer
lean cities. and this notwithstanding
the fact that the average cost Of coal
IN Stockholm for the last five years has
been $2.16 per ton. The balance sheet
OF the gas department for the year end
ing December. 1904, furnishes another
instance Of how municipal bookkeep-
Ing can be made to prove almost any
thing. The sum Of $46.22O, which is q
little over per cent ON the total valu-
alton OF the property. Is all that has
been written or for maintenance and
nothing whatever has been written OF
for depreciation. yet actually q profit
Of $355.474 is claimed on the years
working.
AS an instance OF the utter inability
OF either state or municipality to COM
pete with a private organization, the
telephone situation in Sweden may be
taken. The telephone system through
out the country is principally in the
hands of the state. As matter of fact
there Is only one large private COM
pany. which carries on business princi-
pally in Stockholm. that enters directly
into competition with it. Although the
government offers lower rates and has
the enormous advantage of being able
% furnish long distance service to its
subscribers, which the private company
II unable to do. yet it has less than one
half the subscribers the private COM
pany has, and out Of this comparative
lV small numh0p On nor cont oro 1,,,,n