New-York tribune., 1911-03-24
CONTROL TO STAY--YA|L
Telephone Head Thinks Public
Service Companies Require It.
A PERMANENT COMMISSION
Favors Regulation, Not Manage
ment, and Foresees End
Of Abuses.

IN hls annual report 70 stockholders
Theodore y. Vail. president OF the Ameri-
can Telephone and Telegraph Company.
says that public control or regulation Of
public service corporations by permanent
length on this question. he says in part:
Combination only can cope with that in
dustrial development Of the present time
which Is far beyond the scope Of individual
effort or capital. In those good old times,
one man with mis- own capital, could carry
on even the largest operati tions. The mar
Gin of profits due 10 low wages and large
selling prices enabled the owners of such
individual establishments % live and enjoy
the best 20 be had in those times. ana
amass fortunes-fortuncs relatively
large as any Of the pre-ent-from an
amount OF gross business. the profits from
which to-day would not he sufficient to
pay the wages OF a shop superintendent.
The large capital requirements neces-
sarv To conduct business on modern lines
place modern industrial enterprises either
beyond the financial ability Of any one IN
dividua or far beyond the amount that
any one individual wishes 70 have in any
one venture
That there has heen in large measure
reason or cause for the existing unfavor-
sble public opinion as to~ corporations,
trusts and combinations IS beyond ques-
ton but II does not follow that there is
reason or cause for the wholesale denuncia-
ton ,nd condemnation Of all corporations
trusts and combinations Nor does II fol-
low that all that is bad is centred in or
confined 10 those prominent in the public
eye
Public utility corporations and other
combinations have too frequently assumed
that new laws and regulations were disas-
trous and ruinoua without first giving
them fair trial. and legislators too often
have displayed an ignorance or disregard
Of existing Laws. spreading the idea that
new. legislation was cure-all for any un-
desirable condition, while IL was often only
a political rlay. and the enforcement Of the
existing laws was utterly neglected.
What i- and SHOULD be condemned, pro
vented and punished is the abuse made Or
corporate machinery 10 the detriment or
public welfare and such abuse as mas occn
and is being prsctised SO extensively for
purely speculative and oftcntimes sIin-
ding enterprises.
Public control or regulation - public
service corporations By permanent commis-
SION has come and come 20 stay. Control
or regulation exercised through such Z bod
has nau~ alvantagcs over that exercised
through regular legislative bodies or com
,riftoc- The permanent commission viii
he aIsei-iudicisl hodv II should he made
up Of members whose duty it vill be. and
Who Will have t1e desire. the time and the
oppcrtuuitv. 30 famIliari5e themselres with
the questions coming before them. II should
act oui- after thorough Investigation and
he governed by the equities of each - 20 u
would Ia time establish course Of rrac-
tico and precedent for the guidance Of al
concerned
.'Fxporience also has demonstrated that
fhi- supervision should stop a. control
and regulation ard not manage 'cper-
ate nor dictate --hst the mana cement or
operation should pe beyond the require
r7ents az The createst eficiency and econ
crv
Management . operation requires init
mate knovlAdgs ard experience which can
be gained onlv b. continuous. active and
practical participation in actual working.
vhua control or regulation can be in'elh-
gently exercised after judicial hearing iv
those u-ho have not the knowledge or exc
periencA 20 operate
Such control and regulation csn and
should stop an abuses ot capitalization Of
extortion or Of overcharges. Of unreasor-
able division ~ profits.
"If tharA are 10 be state control snd reEl-
latiou. there should also be state rrore'-
ton Governmental control should protect
the investor as veil As tie public u
should insure - the public good service and
fair rates T. should also insure far 70
tuYnq 70 the investor through 2 wise and
iudicious ststo control and regulation su
the sdvantages without any of the dissd-
vsn-szes Of state ownership can he secured
md state ownership doomed