The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1909-02-16
THE GARRARD BILL AND RICH
MOND.

The GarrardAbiilao on public utilities
which lis before.th eIlegislature1 means
much tosthe .city.ofsRichmond in rela-
ton to theemunicipal' light splant. The
fact is thesthat,thetbill in itsspresent
form is largelyaconcocted by~the rep"
resentatiyesx ofsthe private corpora
tions which are ,directly interested in
the public utilities.
The bill assit nowsstands provides
among otherrthings that corporations
now operatingsunder franchise. Omitted
to Is years. shall henceforward ope-
rate under an "indeterminate fran
chise." which by the preceding terms
! OF the bill is perpetual franchise.
The public is given no string to the
franchise nor the corporation as in
the case Of the Wisconsin flaw. First
joker for the private corporations
against the people!
Sec 6 is designed to- allow the pri-
vate corporations to terminate any
contract with any city1or town without
granting the city anytsa in the mat
ter! This is plainly unconstitutional
and illegal under the law of contracts
inasmuch as a contract is an agree
ment between two parties each having
equal rights in the matter. But this
even were it legal, would be unfair to
the cities and towns. because it would
not grant the city the same right to
terminate a contract which is not ad-
vantageous.
But the really important part OF the
Garrard bill is Sec. 20, which concerns
the maximum and minimum rates of
the prices of utilities A commission
is given the power to fix maximum
rates and shall take into consideration
'.the necessary cost to the owner or
operator of the product or the service
furnished, the cost of maintenance, the
amount of depreciation in value" $50
far so good)--but including in such de-
probation thereof. an amount that will
be required for replacement Of the de-
preciated parts WITH NEW PARTS
after ordinary repairs shall be inef-
fective to keep the parts in a state OF
efficiency corresponding to the pro-
gress of the industry
Another joker. ....=..s,s
TO take an enlargement of plant
and charge it to depreciation, at the
same time eyading a higher assess
ment for taxation, while placing the
corporation in the way of producing
greater net profits for dividends.
Not only that but the matter OF max
imums rates does not apply to towns
where there is competition, especially
with municipal ownership What good
Is a maximum. rate to town in which
there are nolcut rates? The maximum
rate, is goodsfor towns which have no
scompetitiontto keep them from being
;overcharged. but what about town
that owns "A plant with private COM
petition? In that case a minimum
rate is Just as necessary as maxi
mum. Nor is this without its parallel
in existing Legislation in this state.
Take the criminal code designed
tue - w
which prevents a disastrous minimum
rate when it is part of conspiracy Of
rate cutting. The point is that by an
incorporation of the existing criminal
law just mentioned it would save in
dividual litigation along these lines to
any city or taxpayer who wanted re-
lief against ruinous minimum rates.
The minimum rate should be estab-
lished by the commission upon appli-
cation by suitable authorities from the
city or its citizens.
Not the least dangerous contingency
which may arise should the Garrari
several corporations in town might
combine and cut prices on the one
commodity which the town had a
plant for. This would not only wreck
the plant, bat enable the corporation
under the first part of Sec. o6. to raise
the maximum rate in cities where there
Is no competition by affirming that
their valuation was increased They
.ould base their evidence on dead wood
md fictitious value Of duplication.
That this would be SO, consider lines
tG to 10:
in arriving at the sum represent
Ing the investment the commission
shall take into consideration the value
IL the physical property. all going and