The Hawaiian gazette. [volume] (Honolulu [Oahu, Hawaii]) 1865-1918, 1916-04-28
D|GESTS
Three FORMS Of
MODERNCAARTERS
Chairman Of Utilities Board Gives
To Members Information
Regarding Franchises
MANY CITIES ADOPT
LlMlTED-TE GRANT
Most Popular Public Service Con-
tract However, Is lndeterm- I
mate Rapid Transit Asks

. ~ = . f. KIN ~ f. ~
In connection with the conference be-
tween the members Of the public utili-
ties commission and the directors Of
the Honolulu Rapid Transit and Land
Company, which the board Of supervi.
sors has been asked TO join, looking to
new charter for the Rapid Transit,
Chairman Charles r. Forbes of the
utilities board has submitted to the
commission condensed views on public
service franchises and their term OF
life. Chairman Forbes searched lead
ing works on the subject Of charters
and his conclusions embody the best
opinions Of the most expert authorities
in the United States on public sertiee
franchises His communication TO the
utilities commission, fled yesterday, is
as follows: 49, WA gJs
Three Glasses Of Franchises m.
Gin the consideration Of franchises
for street railways, they may be diyid.
cd into three classes, each Of which has
been adopted at various times by va.
rious- communities, and all of which arc
differentiated only by the length Of the
term for which they run, which is pro.
badly the most important detail Of n
franchise. so far as the municipality Is
concerned. The three forms are tho
perpetual franchise, the limited fran
chise and the indeterminate franchise.
1.-THE first of these forms is obvious.
ly incompatible with modern ideas Of
government. A franchise to street
railway company is a gift from the
government, and no one at this time
would say that such gift should be
made to last forever. The governments
has control Of the streets, and all pub
lie utilities above, below or on the sur
face of the streets should be under
their jurisdiction. Under the terms Of
a perpetual franchise there IL no way
by which the government may regain
control of that portion of the street DC.
cupied by the railway except BY con-
domination proceedings. Thus the gov
ernment is forced to pay large figure.
for what II gave away. No one can tell
what changes may be necessary to the
public interest fifty -or one hundred
years hence. g.. .~ IN r.
Second Form Il Popular -.
Many cities have adopted the, Sec
ond form, the limited term franchise.
Thus the government is guaranteed the
return Of the railway privileges at the
end of specified time, but this form
Of franchise has many disadvantages
also. Street railways are in use in all
parts Of the world and have been for
a great number of years. and although
1t Is possible that at some time some
other means of travel may be invented
which will render street railways un.
necessary to public convenience, Il Is
impossible for any one at the present
time to predict a fixed time at which
such condition might arise. Such be.
ing the case it is fair to assume that
there will always be necessity for
street railway service, and where the
franchise is for a limited term, Ii is
obvious that the company holding tho
franchise would be tempted to decrease
the quality of service, discontinue
maintenance and improvements atd
devote all their efforts to squeezing out
the greatest possible revenue with tho
least outlay, provided they accepted
the terms of the franchise in COOL
faith. believing that the service was
TO end at the close of the period. Other.
wise this form of franchise would tend
to bring up the street railway question
at regular intervals as a political issue
In an endeavor to secure a renewal Of
the franchise. II is unfair TO expect
anyone to contribute capital to a pub.
lie utility corporation which will oper-
ate for limited term of years and th"1
become defunct, and at the same time
furnish service equal to that which
would be furnished by a company
which has every assurance that tho
service would be perpetual, or that
should the franchise be withdrawn, tbs
stockholders would receive adequate re-.
muneration for what they have invest.
ed. " .s e. .'.' t.s,H
Indeterminate Charter Best : 2'. e.
The third form of franchise, known
as the indeterminate franchise, is the
most modern of the three, and was de.
signed to meet these objections. Under
this form the street railway company
holds its rights indefinitely, and il at
any time the public body having iuris.
diction over it should decide that any
Part of the system should be discon.
tinued either through lack of efficient
service or because of violation of any
Of the terms of its franchise, or the lack
of the demand for this service, then
the franchise may be revoked and the
company holding the franchise is grant.
ed just payment by the government,
or by another company licensed by the
government for the Just payment for
the property. Thus the government at
tains the right at any time to demand
changes of routes, extensions of routes,
relocation. etc, TO conform to the needs
Of a growing city, and on the other
hand the investors are enabled TO sup
Ply the capital necessary for eonstruc.
ion and Improvement with a reason.
able amount of security, through tho
knowledge that whatever expenditures
are made in good faith, for necessary
constructions will be returned 10 them,