Honolulu star-bulletin. [volume] (Honolulu [Oahu, Hawaii]) 1912-2010, 1914-04-03
NOT
LEGISLATION s. IS
MORALITY WEDGE
Continued from page ouej

various times by such firms as the
Denny.Renton Coal and Clay Com
pany, ST Paul and Tacoma Lumber
Company. San Francisco and Roche
Harbor Lime Company, the Pacific
Power and Light Company Of Portland,
Ore, the compiling of the complicated
corporation tax returns for Mr.. Far
reIl Of the Hill railroads. and SINH
lar concerns. This experience was
gained before his advent to the ISL
ands two years ago. -.
The most interesting feature Of H..
Gooding Fields candidacy is the pro-
ncuncement of his policy for the con-
duct of the public utilities commits
sions affairs He believes in and
would rely almost entirely uDon pub
licity as the balm which would cure
the ulcers Of corporate and CONNER
eial life. He thinks fun, free pub
Iicfty should be given every move
made and every fact uncovered by
that body, declaring that: .~..~.:.-..
l Yen cant legislate morals into the
people: but you can drive them into
morality by giving full publicity to
their acts" This he would propose
to use to its greatest extent in the
operation of the commission probes.
Following is Mr.. Fields statement:
Honolulu, T. H., April 2. 1914.
Honorable J.. E. Pinkham, Governor
of Hawaii, Honolulu, T. H..
Sir: In reply to your communities
ton of the 23d ultimo, requesting my
ideas ass to the scope and possible
steps to be taken to efficiently admin
lister the office Of chairman of the pub
lie utilities commission, beg to state,
as follows:
The general legal and adfninistra-
tive principles which underIie the law
which created our public utilities CON-
mission also underlie similar statutes
on the mainland. Act SO of the session
laws of 1913 imposes unon the man
agement Of private plants the duty
of establishing reasonable rates and
regulating reasonably adequate serv-
ice In the first instance. The initial
responsibility lies with the manage
inents who must select the agencies,
material and methods through which
the service is provided.
All rates. rules and regulations
may be challenged, at any time, and
revised and modified by the commits
sion. The theory of the law and its
admins is to place the respec-
tive managements on the defensive,
throwing the burden upon them to
Justify their rates and service when
ever the issue Is raised before the
commission The commission may act
both upon complaint and upon its own
initiative with respect TO all matters
relating to public utilities.
The mcst important provisions of
our public utilities law may be group
ed about four Leading heads, namely,
valuation. accounting, rates and sery-
ice; these provisions, however, are not
SO specific on such matters, for In
stance, as the appraisal and yalua-
ton, and revaluation by the commits
sion OF the physical property sof pub.
lie utilities; the extension of facili-
ties; and the providing for uniform
system of accounting, with special pre-
caution as to depreciation and con-
struction accounts, as will be found in
the public utility acts in the states
notably the Wisconsin and New York
acts of 1907, and the Kansas and New
Jersey laws of 1911. +
In section 5 of act so, before re.
ferred to. the commission is empower
ed to examine the valuation of the
physical property of each public utility
doing business In the territory. | con.
slider this requirement of the utmost
Importance, in fact, the very starting
po.nt in the general supervision over
cur public utilities. It Will be found
that such valuation. apart from carry.
ing the idea of publicity to its logical
conclusion, which is the ultima thule
of this class of legislation will form
the: working basis for
II. Negotiations for purchase. by the
municipality: -,
~. Tax regulations;
%. Taxation; and
=. Regulations of stock and bond
issues. - -
Public utility corporations are en-
titled to reasonable return or divi
dend on their investment in the capi
tai stock of the company. The rate OF
return. if the property will earn it.
should not be less than the legal rate
Of interest, Court decisions in rate
cases have universally held that every
liant is entitled to earn an amount
sufficient to pay:
-. Operating erpenses;
-. Expenses of maintenance and
running repair;
20. Taxes:
a. A sinking fund to cover depre
citation and obsolescence; and
-. A reasonable profit on the fail
value of the property. x
This ruling brings the question
therefore. of determining the fair value
OF the property sauarely before the
"ublic as we'll as the owners: in order
that proper rates may be determined
Unless the value of the property be
known. there is no way of determinins
how, much interest and depreciation
must be earned in order to make the
plant self-supporting. The recognition
of this necessity of the physical valua