The Bridgeport evening farmer., 1910-01-28

xpOllS hdd a population or 1o,uVU. AIo aldermen of that day saw fit to grant a franchise to certain individuals and their assigns. giving them the exclu- sive privileges of manufacturing and selling gas within the city limits for period of forty years. That franchise will expire February A, 1910. At that time in accordance with the terms of tiIis famous old ordinance the city will have the right to purchase the Iran- chise pertaining to it's territory, ana gasr pipes, works, fixtures and other proDerty pertaining to said business at the actual value of the same as deter mined by arbitration. It is provided. however that if the city should decide to purchase at the valuation fixed, then the said rights. franchises and prlVf-. ieres arc to continue twenty years ion ger In other words the aldermen ii the little city of Minnea polls in the yeah of our Lord 1870 were so carried awaS with enthusiasm for municipal ov.IIsrship ;n the future that they gave an Exclusive franchise that would ex- piro if purchased a it's full value - witch the city had grown 10 a popu- ton of over 300,000. If not purchased q that time together with all the gas works operated under it, the franchise v-ouId be extended as an exclusive Erant for another period of twenty .EdIS GIil5 ltSttiei Us II.S City AAS1N 5 AO"h to 2 population of 50000O. Minneapolis may buy the gas works this year, but if so. she must pay not only the value Uf the physical property. but the value cf an exclusive franchise with twenty years to run in great and rapidly growing city. \ fine outlook for num- ciDal ownership this.
 IL is more generally recognized now than it was forty years ago that every franchise for a public utility should contain a purchase clause reserving to the city either at the end of the fran chise period, or sooner, the right to take over the company's property. Public service corporations have al- most ceased their opposition to the 1n- ciusfen- of purchase clause in a muni- cipal franchise. They are not devoting their attention to so framing the pur- chase clause that it will be impossible 10 use it. Or at any rate impossible to use it in way that will give munich pal ownership a fair start. The great aim of practically all public service corporat tions is to increase their cap- itaIization and make it good. The manufacture of securities has been the most profitable part'of public service enterprises so far as boards of direct ors are concerned. It is their policy never to pay off a bond except by the :ssues Of another They fund three year notes into forty year bonds, and refund thirty year obligations with ninety-nine year bonds. To issue more bonds and more stock so as to be sure that by no. possible chance will the actual physical value of the pro- perty catch up with it's capitalization, is the all but universal policy. And so in framing the purchase clause of a franchise the companies have hard nut to crack They have to fix 1t up so that the game over-capitalization can. be continued during the life of the franchise. with the assurance that at the ferid of that time the city will foot the bills. @ tF
 Nowadays a company can seldom get as raw a purchase clause as that one contained in the old Minneapolis gas franchise. But Dr. Delos F. Will cox in his chapter on Monopoly Fro fits cites a modern instance that al- most puts the Minneapolis aldermen of 1870 to shame. In Nashville as late as 1902 Curing the Mayoralty of Hon. James NJ. Head, who was a that time very prominent in the League or American Municipalities and had the reputation of being one of the most progressive mayors of the country. a s,raet railway settlement was effected after a period of litigation. The com promise agreed upon between the city ana the company included a purchase clause by which the city was author iztd after the expira ton of twenty years to take oyer the street railway syssEa la upon giving twelve months rctiee.~s- The price to be paid was s.that sum of money which 1T invested at the same rate of interest that would bt realized by Sn investment in the ore4l market on the date said notice is given in bonds of the city of Nashville then having twenty years to run would yield a yearly income equal in amount tozffty per cent of the gross recelpts foses said twelve months Dr. Wilcox has figured out what this clause means. Not having the. statistics of valuations ard income Of the Nashville railway, he has applied the Nashville purchase clause to conditions As they exist ln Springfield Mass. for which the fig ures are available. Counting the ac- tual rate of interest on money invest ed in city bonds at 3.7 per cent, he finds that it would require $16500,O0O of bonds to earn s612.000 per annum, which is 90 per cent of the gross earnings of the Springfield Street Railway Company for the year 1906. This s16.5O0O00 is the price the city would have to pay for the property, whereas. the Springfield company's own report of it's total permanent investment sets the figure at $3,S6OOOO: ..There is not much curtailment of monopoly prof1ts,'' says MT Wilcox, 4.in a reserved right to purchase the property for more than four times what it cost" He calls attention also to some or the trlekSA that liler 7COLllpdll- ies play in fixing up the provision for the appointment. of :. appraisers. A curious instancet cited by him is that of an electric light franchise granted bv the town of Flushing just day or two before it was annexed to the citv of New York in 1897. This fran chise was granted for a period of twenty-five years and carried with 1t The right of a renewal for an additional ' neriod of the same length at the option >-sf the company. The renewal how @eyer. was to be had upon the basis of an appraised revaluation The former statesmen who were cooking up trou- ble for Greater New York agreed to an appraisal scheme which provided that one appraiser was to be appoint ed by the company, one by the city as successor of the town, and the third by these two. In case, however, the two appraisers, first appointed were unable to agree upon third apprais- ar within a period of ten days, the lighting company was to have the right to designate the president of a bank or trust company to appoint all three appraisers. This certainly would make easy picking for the trust com pany that was acting as trustee under The lighting company'S mortgage.
 Dr. Wilcox does not mince words in describing the responsibility of stock Juggling public utility corpora tions for the evil conditions of which
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