The Washington times., 1911-12-22
CHIEF PURPOSE OF
0LDF|ELO BILL IS
TORESTR|CT RATES
Author Has Studied Prev
ious Laws In Drawing
Measure.

, OF Arkansas has introduced in the House
for the establishment of public utilities
= commission In the District is In num-
Der OF respects more advanced than any
public utilities law now In force in this
country. Mr.. Oldfield has availed him
self Of all the legislative and judicial
experience accumulated up to this time
In the effort to produce a measure Just
as advanced as possible in the public
interest, while at the same time safe
guarding against every possibility of
disaster In the courts.
The fundamental principle of the bill
Is that 1t shall be the commissions duty
TO keep all public service charges Just
as low as they may be while avoiding
confiscation. This is u new proposal in
public utility regulation. 1t IL written
into N1e last section of the bill in these
words
1T shall be the duty of the commits
sion in fixing and determining rates, in
directing extensions and Improvements,
and In generel when making require
ments under the provisions of this act,
mat involve expenditures by or lessen
the receipts of public utilities, to require
the utmost of the public utility that will
not trench upon its constitutional rights
TO earn a fair net return upon the fair
value of its property used for the con-
Venience of the public
To Attack Provision.
This provision will probably be the
object Of determined attack by the
representatives Of the local utilities. It
means that rates are required to be
kept just as low as possible, while per-
hitting fair return on the actual in
testment in property
The significance of such a provision
will be understood only in the light of
the Judicial determination about rea-
sonable rates and reasonable earnings.
Ii public utility Is earning 10 per cent
and is attacked on the ground that
this Is excessive, the courts, under the
presidents, will ordinarily hold that
10 per cent is not unreasonably high.
But II the matter be approached from
the other direction, and a public utiii-
ties commission fixes a rate which will
earn only s per cent, or even per
cent, the courts will commonly refuse
to hold that this rate Is professionally
low. E-~-,.., "
In other words, there is a considerable
zone within which earnings may oscil-
late without being held unreasona bly,
high on the one side or unreasonably
the Oldfield bill to make 1t the duty Of
the commission to give the public the
benefit in such cases. and to keep the
rates at the lowest level of reasonable
ness. rather than at some higher point,
which still is not unreasonably high. .
In much Of Its matter. the Oldfeld
Gailinger bill. which has been intro.
duced in the Senate. In a number Of
features, however, 1t goes farther. the
portant. The Commission is siven GEM
eral control over the operation and rates
of public utilities. the most complete
reports are required. and the books, ac-
counts, and ali details of operation are
subject to the most minute inspection
Of the commission or it's agent. Either
upon complaint, or on its own motion.
the commission may investigate the af-
fairs of any utility company to deter
mine whether rates or practices are I'M
reasonable, and If 1t concludes they are
unreasonable, 1t is authorized to make
orders specifying the rates, charges or
practices that in its opinion should be
substituted.
No such orders shall be issued until
after hearings.
The commission shall have full power
to determine the standard Of purity and
companies, and is required to test ali
One important difrerenee Bet 1e ase the
- oldfeld and the Ballinger bills is for the
provision of making valuations of pub
lie utilities properties. Both bills au-
thorize the commission to make such
valuation, but the Gallinger bill bor-
rows it's provision on this point from
the Maryland law, modified in some re-
spects; whereas the Oldfield measure
adopts the text Of the Wisconsin law,
which has been fully adjudicated and
sustained .t,
Like Wisconsin Law.
The Wisconsin statute, which former
President Roosevelt has recently COM
mended in very high terms as probably
the best of its kind in the country, is
also drawn upon for very detailed pro-
visions to regulate capitalization No
stocks. stock certificates. bonds, or any
other form of capitalization may be is
sued without specific authority of the
commission, which is authorized either
TO veto the entire issue, or to fix it's
amount.
If capitalization Is to be issued partly
or wholly for property, or services. or
for any other consideration except
money, the utility company must pro
vide the commission with full informa-
ton concerning the property or services
thus to be obtained, and the Commission
is given authority to make a Valuation
of such property, II 1t deems neces-
sary, in order to verify or combat the
valuation placed upon II by the COM
pany. Following its Investigation, the