The Fargo forum and daily republican. [volume] (Fargo, N.D.) 1894-1957, 1913-11-17
CONDEMN
CONTROL
BY STATE |

Toronto. Nov. 17.-Regulation Of
street railways, telephones, electric
and gas plants exclusively by the
state was condemned In report sub
mitted to the nineteenth annual
meeting of the National Municipal
| league today by the committee on
franchises. The report, submitted by
| the chairman, DR.. Delos r. Wilcox of
New York city, dealt with the relation
of municipal home rule to the control
of public utilities
The committee pointed out that
public utilities are primarily urban in
character and that, on general princI-
pies, the control of public functions
should be localized as much as possi
bic, in order to secure the interest and
effective cooperation of citizens.
Moreover. as a practical matter, the
more powerful the corporations be-
come and the more widespread their
| services, the more important 1t Is that
they should be directly answerable to
the local communities which they
serve.
1T may easily be possible said the
report, that an appointive state COM
mission will fall more or less COM
pletely under the domination of the
powerful interests which control the
public utilities Of the state, and thus
the very machinery provided for the
regulation OF utilities will be captur-
led by the interests presumed to be
regulated by it. 1t may be necessary
to array aGainst the powerful finan-
| cial interests of the companies the di-
rect massA interest .of the local con-
Igsnners in order to- preserve the Vi
tality 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
without the active cooperation of
both state and local authorities. The
jurisdiction of state public service
commissions should be, general over
all public utilities, so that there will |
oe no twilight zone within which the |
utilities can escape regulation alto |
gether, but every city of enough i'm |
portance to enjoy home rule In franz
ing it's charter should have the right |
to establish a separate bureau. de- |
partment or commission for the su-
perYision of all utilities operating
within the city limits. The city's |
jurisdiction should extend to matters |
affecting the occupation Of the streets, |
the quality of service rendered and the |
character of the franchise contract |
entered into for the purpose of facilf- |
tating ultimate municipal ownership. |
The states jurisdiction should extend |
to matters relating to competition, |
stock and bond issues, accounts and |
city. Rates and extensions
subject to review by the state COM
mission. The city should also have
the right to appear by it's local ex-
perts before the state commission in
regard to all matters affecting local
interests"
Coming to certain important ques-
tions in connection with franchise
ntS hotW HjfinS
utility companies. the committee took
the ground that public utility within
a given urban community is a ma
tural monopoly and that one of the
first and essential obligations of such
a monopoly Is to extend its services
to meet all the legitimate needs of the
community. Accordingly, the munich
pal authorities ought to have the right
to initiate extensions, and the reason
ableness Of any particular extension
should not be determined solely by
the prospective profit from its opera
tion as a separate unit, but by its ef-
feet Of the entire system.
The committees recommended the
indeterminate franchise with maxi
mum time limit, on the principle OF
the recent traction settlement fran
and New York City. Opposition to
the Wisconsin type of indeterminate
permit was based on the fear that 1t
tends to become perpetual, as 1t can
be terminated only by purchase-and
purchase means payment or the fun
value in cash in a lump sum at the
time Of purchase. This, 1t was said.
tends to make municipalizatlon 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
maintained out of earnings. This fund
should be large enough at least to I
wipe out all franchise and other in
tangible elements Of capital value, so
that the price at which the city can
buy will be kept well within the actual
value of the physical property.
The committee urged the Importance =,
of a systematic campaign for the re- '
covery Of control over the perpetual {
and long-term franchises now OUT {
standing. So long as the utilities in
the heart OF the city continue to be
owned and operated under unsatis-
factory, out-of- date franchises, the
city, 1t asserted, can have no adequate
control OF the development Of its1
street railways or other utilities.
The report was signed by DIR. Will
cox, as chairman, and by Robert Treat
Paine, James w. s.. Peters, of Kansas
city Abraham e. Pinanski, of Boston,
and Charles Richardson and Clinton
Rogers Woodruff, of Philadelphia.
Prof Edward Bemis, the Chicago pub
lie utility expert. another member OF
the committee, did not sign the re-
port, but signed a. memorandum In /
which he expressed doubt of the wis
dom at the present time Of giving
state commissions any control over1
capitalization, or over rates In the
larger cities, especially In states west
of New York.