The evening times. [volume] (Grand Forks, N.D.) 1906-1914, 1911-09-15
Wisconsin LAW
AND UTILITIES
Governor McGovern Tells How
Laws Have Increased the
Corporation Profits

Spring Lake, N. j., Sept. 15.-Wis-
consin's manner Of controlling and
public utility corporations
to effect Il two-fold beneit-to the
consumer, better service at lower
rates; to the producer, increased
efficiency and earninsS-was explain
cd in detail yesterday by her COVER
nor, Francis e. McGovern. who adj
dressed the conference Of governors
on State Control OF Public Utilities"
"All utilities In Wisconsin are in
Il ore flourishing condition now
than ever BEFORE" he said, and are
planning to extend their operations
far into the future"
OF the consumer, Governor McGov-
ern said:
Hand in hand with reduction in
rates has gone an equally important
Improvement in service. Better serv-
ice has been placed first and reduce
ton in rates made to wait upon it.
Transportation facilities have been
vastly improved; cleanliness and san
itary precautions have been observed
as before, and ore and better
trains have been provided. And so
also of express, lightning: telephone
and telegraph service: they have all
responded to the demand for a high
er standard of efficiency in numerou
ways, more forcibly felt and plainly
evident than it is possible for me
briefly to describe"
Governor McGovern reviewed the
origin, inception and scope of the
public utilities commission. its rul-
ings and manner of enforcing them.
He cited several decisions of the
Wisconsin supreme court bearing up
on moot points and told of the change
In the attitude of the corporations
effected from distrust and dissatis-
faction to contentment with and ac-
q%uiescence in the commissions plans.
In part, he said:
What now Is the basis Of a just
and equitable rate? Some railway
managers and superintendent of pub
lie utility plants contend that it Is
the value Of the service to the ship
per and consumer. But this method
of fixing rates at what the traffic will
bear has become so odious and is so
manifestly a cloak merely for extor-
ton. discrimination and favoritism,
that extended discussion Of it is no
longer profitable. Practically every
commission. legislation and court
which has seriously considered the
subject has rejected this criterion for
the more definite and scientific idea
of the cost of service. This basis If
definite, fair, ascertainable and eco
nomically justifabfe.
How may the cost Of service in a
given ase be a~scertained?
First of all, the owners of utilities
are entitled to q fair return upon
the reasonable value of the property
devoted to public use. This calls at
once for a valuation Of the physical
property of the plant. But this is
not all. To it must be added some
thing for the going value of an es-
tablished concern. and possibly some-
thing also for OUTLAWS and services
expended in the past in upbuilding
the plant.
But the value of the plant is not
the only factor entering into the de.
termination of equitable rates. Elk.
pense of operation, depreciation and
other similar items must also be con-
sidered. And after there has been a
determination of the gross charge
necessary for the maintenance of the
utility and the payment of reasonable
profits to its owners there yet re-
mains the apportionment of this
amount among the various classes Of
consumers. 1t is Of the very essence
of scientific rate-making, for without
it justice between different classes of
consumers is impossible of attain
ment.
But with accurate information as
to the value of the plant and proper
distribution of the cost Of service ac-
cording to modern systems of &C.
counting to make rate schedules that
are equitable to all classes of consum-
ers, that yield a reasonable rate on
the investment and that eliminate
waste while promoting the maximum
usefulness Of the plant.
THE subject of service is closely
related to that of rates. Like rates,
just determination of what constitutes
reasonably adequate service in any
given case depends primarily upon a
correct valuation of the utility and a
satisfactory system of cost account
ing. In addition. it requires an in
%spectional staff. Gas. electric, water
and telephone service have received
special attention at the hands of the
Wisconsin commission and require
ments as to them have been standar-
lied. These standards so far as gas
and electric service r concerned
were embodied in a set of rules adopt
ed only after a most careful survey