The Barre daily times. (Barre, Vt.) 1897-1959, 1913-11-15
CONDEMNED STATE
REGULATION
Franchise Committee Submitted Report
To National Municipal League at
Toronto To-day.


Municipal league to-day by the commit
tee on franchises. The report, submit
ted by the chairman, DIR. Delos f. Will
cox of New York City, dealt with the
relation of municipal home rule to the
control of public utilities.
The committee pointed out that pub
lie utilities are primarily urban in char
acter and that, on general principles,
the control of public functions should
be localized as much as possible, in or
der to secure the interest and effective
cooperation of citizens. Moreover, as
a practical matter, the more powerful
the corporations become and the more
widespread their services, the more inn
portant it is that they should be direct
ly answerable to the local communities
which they serve.
at may easily be possible" said the
report, that an appointive state com
mission will fall more or less completely
under the domination of the powerful
interests which control the public util-
tiles of the state, and thus the very
machinery provided for the regulation of
utilities be captured BY the interests
presumed to be registered by it. 1t
may be necessary to array against the
powerful financial interests of the COM
panies the direct mass interest of the
local consumers in order to preserve the
vitality of the regulatory function. Pub
lie utility corporations exist to serve
the people, not to control them.
However, in most cases, regulation
cannot be either logical or effective with
out the active cooperation of both state
f..I Il 49, M
of state public service commissions
should be general over all public util-
tiles, so that there will be no twilight
zone within which the utilities can es
cape regulation altogether, but every
city of enough Importance to enjoy
home rule in framing its charter should
have the right to establish a separate
bureau, department or commission for
the supervision of all utilities operating
within the city limits. The city's juris-
diction should extend to matters affect
ing the occupation of the streets, the
quality of service rendered and the
character of the franchise contract en-
tered into for the purpose OF faeilitat-
ing ultimate municipal ownership. The
states jurisdiction should extend to
matters relating to competition, stock
and bond issues, accounts and publicity.
Rates and extensions should be under
municipal control, subject to review by
the state commission. The city should
also have the right to appear by its To-
cal experts before the state commission
in regard to all matters affecting local
interests"
Coming to certain important questions
in connection with franchise contracts
between cities and public utility COM
panies, the committee took the ground
that public utility within a
given urban community is a natural mo-
nopoly and that one of the first and
essential obligations of such monopoly
is to extend its services to meet all
the legitimate needs of the country. Ae-
cordingly, the municipal authorities
ought to have the right to initiate ex-
tensions, and the reasonableness of any
particular extension should not be de-
termined solely by the prospective profit
from its operation as a separate unit,
but by its effect upon the profits of the
entire system.
The committee recommended the in
determinate franchise with maximum
time limit, on the principle of the re-
cent traction settlement franchises
granted in Chicago. Cleveland and New
York City. Opposition to the Wiscon-
son type OF indeterminate permit was
based on the fear that it tends to be-
come perpetual, as it can be terminated
only by purchaseand purchase means
payment of the full value in cash in
a lump sum at the time of the pur-
chase. This, it was said, tends to make
NATURALIZATION more difficult as time
goes on.
The committee favored the idea of
making utilities commence to pay for
themselves, even under private opera
ton, by means of an amortization fund
out of earnings. This fund
should be large enough at least to wipe
out all franchise and other intangible
elements of capital value, so that the
price at which the city can bny will be
kept well within the actual value of the
physical property.
The committee urged the Importance
of systematic campaign for the re-
covery OF control over the perpetual and
long.term franchises now outstanding.
So long as the utilities in the heart of
the city continue to be owned and OPP
Grated under unsatisfactory, out-of-d date
franchises. the city, it asserted, can have
no adequate control of the development
Of its street railways or other utilities.
The report was signed by DR.. Wilcox,
as chairman, and by Robert Treat Paine
Of Boston, James w. S. Peters of Kan
sas City, Abraham E. Pinanski of Bos
ton and Charles Richardson and Clinton
Rogers Woodruff of Philadelphia. Prof. |
Edward w. Bemis, the Chicago public |
utility expert, another member of the
committee, did not sign the report, but |
signed memorandum in which he ex-
pressed doubt of the wisdom at the pres
mt time of giving state commissions |
my control over capitalization, or over
rates in the larger cities, especially in |
x.v.c& IS Nox,