The Bemidji daily pioneer. [volume] (Bemidji, Minn.) 1904-1971, 1913-08-18

Of state control, as tested in actual
operation, should convince the most
skeptical that when the state service
is made more permanent, removed
from politics and the appointing chief
executive held subject to the will of
the people under the initiative, refer
endum and recall, the commission will
not develop into political organiza-
ton.
u. ECONOMY.
l.. Control of Securities.-One Of
the most important features of state
regulation is the complete control az
forded over the issuing of certificates.
This is necessarily state function,
because these securities are issued un-
der state authority and the municipali-
ties have absolutely no power to con-
troll them. The old theory that cor
porations should be permitted to
float as many stock and bond issues
as the traffic would bear" irrespec-
tive of actual investment has long
since been exploded Returns and
dividends cannot be based on capital.
ization, but on the actual value of
the utility properties. Whenever
stocks and bonds are issued and sold
without corresponding value, such
watered securities are sharing in re-
turns and dividends to which they
are not entitled and the result is a
great economic waste. Excessive
rates are charged on the basis of such
watered capitalization, and the con-
sumers pay the bills. 1t is important
that the commission, after thorough
investigation, should have the right to
grant, refuse or modify any and all
applications for the issuing of stocks
and bonds. Such provision is not only
beneficial to the taxpayer and con.
sumner but to the purchaser of securi
ties as we'll as the utility corporation
ITSELF
2. Unnecessary Duplcation.-An
other important economic result Of
state regulation is the elimination Of
waste by preventing the unnecessary
duplication of utility plants and equip
ment. I am firm believer in compe
tition, but when such competition re
suits in the construction of utility
plants and equipment far beyond the
possible needs of the community
served, such competition compels the
public to support institutions that are
not necessary. An unWarraDted tax is
imposed upon the public at large and
the enterprise usually brings finan
cial ruin to the Investors. The com
mission should have authority upon
investigation TO order increased facili
ties and eluip1ncu ut, whenever neces
sary, and to authorize other utility
corporaticxS1 to enter the field in order
that the people may have adequate
service without paying excessive
rates, but where the community can
not support another plant, the com
mission must have authority to refuse
it's installation. If in the interest oil
economy and good service, it should
be of advantage to the municipality
to own and operate any particular
utility, such municipality should have
the right to acquire the same, paying
therefor it's actual value and no more
3. Municipal Regulation Too Elk
pensive.-Intelligen regulation of pub
lie utilities requires a very high order
of engineering, accounting and sta
tistical skill. Every one engaged in
expert service must have scientific
knowledge of utility organization
management and operation in all It's
departments. The commission must
have line of trusty and capable ex
perts to whom the most technical
and scientific problems can be re
ferred for investigation and report
Such experts must have wide range
Of experience, be familiar with utili