Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1910-07-30
EATING PIE AND KEEPING 1T TOO.

organizers of the street railway lines OF
that great metropolis have been caught
in the act Of capitalizing the properties
at fsty-four millions when the physl-
cal value would not exceed thirty nil
lions The purpose, OF course, was 10
keep their pie and eat it, too The
people OF New York would be COM
pelled to pay earnings on the full cap
itaIization. This would enable the re-
organizers to sell the twenty -four nil
lions Of excess capital stock TO the dear
public thus getting out of the public
practically all the property cost them
but leaving them in possession OF a
controlling interest in the company up
on which the public must pay them
earnings also.
Now, if this had been done by
manufacturing corporation or mer-
chanyile house enjoying no monopoly
granted by the public taxed no one
could raise just complaint. People
could either let their service alone or
nut UP a competing plant but in the
case OF a street railway the public ser
vice is as necessary TO the people OF
New York as is the street itself and,
ii Tammany mayor should propose
that after the people had paved and
improved Broadway out OF their own
pockets they should then permit GER
tain estinable gentlemen from the
brown stone fronts TO charge toll from
every citizen who used the street, the
parallel would be almost perfect but
nevertheless so crazy as 10 send the
author over the road for insanity.
However. the same game is being or
can be worked in every city in Iowa
today and in almost every city in ev-
erv other state Public service cor
porations selling gas, electricity, water,
telephone OF street car service can, so
far as public protection goes. exact
earnings upon the value Of their plants
and also upon an excess value which
they can sell 10 the public either in the
form of bonds bearing interest or cap
ital stock bearing dividends.
What we need is publicity of their
affairs. Some have suggested com
mission having authority over public
service corporations. Il IS unneces-
sary and even dangerous. The com
bined power Of all public service cor
porations in state could capture the
commission. Experience in Iowa with
the railroad commission should teach
Us caution in this respect. Inquiry
Will disclose that the general average
of public service rates is often higher
in states having the commission than
IN neighboring states without the com
mission.
A bill was introduced in the last
legislature Of Iowa giving city councils
authority 70 compel access to the books
and records Of all public service cor
poratlons when fixing rates. Such a
law could do no injustice for the stat
utes would prevent any unfair rate GO
lNlO effect IL HOulb Ci4eIDiv NitJ
council to determine the cost OF SER
vice, value Of plant and necessary in
come to be renunerarive. The fixing
of an adequate rate would be COM
paratively an easy matter, But a
powerful lobby of the public service
corporations fought it. The commits
sion scheme was pushed to circumvent
this bill. They complained that public
ity would subject their investments to
the attacks Of demagogs. Did anybody
ever hear of honest business thriving
best in the dark? Did anybody ever
hear of a public service corporation
lawyer being unable to show that a
rate was confiscatory when the COM
pany's books would prove it? Publicity
Of the books is now compelled by order
Of court IN the determination of the
adequateness Of any rate contested but
1t com es only after the trial of an in
junction IS on. Why not, then, let city
councils have the information before
the rates are fixed?