The Washington times., 1917-01-06
SOME QUESTIONS OF PRINCIPLE

The conclusion of evidence in the
valuation proceedings of the Potomac
Electric Power Company before the
Public Utilities Commission has en-
phasized what seems to be the most
important factor in all consideration
of public utilities-that there is a
very real and most unfortunate diff
ference of principle rather than Of
| figures.
1t has emphasized, furthermore,
the absolute necessity of some au-
thoritative and conclusive adoption of
the principle upon which public utili-
ties are to be valued. The question
is too serious to be considered light
ly or in partisan way.
1t is both absurd and ridiculous to
condemn the men who have con-
structed the vast business institu-
tons of the country as represented
by the great corporations as set Of
thieves and crooks who would OPP
press the people to obtain extra divi-
dends for their stockholders. There
have been abuses of the power given
corporations. There have been IN
doubted violations of what are sup
posed to be the common ideas of
honest administration. But to lump
the really big minded men of broad
vision who have constructed the vast
business machinery of the country
with the INSCRIPTIONS element that
has been conspicuous in the consid-
Grafton of these questions is abso-
lutely without warrant.
One of the great difficulties faced
is that the corporations or big bust
ness institutions of today, especially
those in public utilities, are no longer
conducted by the men who own most
of the stock in them. In the days of
Commodore Vanderbilt and the pub
lie be damned" idea, railroads and
public service corporations were just
emerging from the status of private
property to public utility. In those
days the man who actually owned the
majority of stock likewise actively
conducted the business of the enter
prise.
Today the, operation of public
service corporations is a profession
requiring highly trained experts.
These experts usually rise to posi-
tions of control, not through holding
stock so much as through ability to
operate the property. The stock
holders. represented by the directors,
in the immediate past, have paid lit
tie or no attention to the officers
elected by them except to require
that they shall operate the property
so that it will produce the largest
dividends. Service to the public did
not figure in the idea of the stock
holder at all. He purchased his stock
to draw dividends, and the officer
who pleased him most was the man
who would produce the most divi-
dends.
With such an attitude it is not to
be wondered that the officers of the
corporations should bend all their
efforts to increase dividends because
their jobs depended upon that one
factor.
With the awakening of the public
to the value of its contribution has
come a demand that cannot be ig-
.nored for a readjustment of the.
values of the various factors. The
public has contributed, especially to
electric lighting and traction corpor-
atoms doing business in municipali-
ties, the most vital factor to the bust
ness-more vital even than the
money with which the business is
constructed for the reason that with
out the use of the streets that be-
long to the public all the money in
the world would not permit the con-
struction of a working enterprise.
The public has, therefore, assumed
the position of a bondholder in the
enterprise of every such corporation
who draws dividends in service. The
public pays for the service. For the
reason that the investment of its
streets and its franchise is the bind
ing factor of the entire enterprise,
its rights to service are to be consid-
cred before the rights of stoekhold-
ers or bondholders.
The mortgage the people hold on
every public service corporation is
the first mortgage on its activities.
Should it ever foreclose, the activi-
ties of the corporation would be for
ever stilled.
1t is, therefore, just this question
of principle that must be decided
once and for all. 1t is inconceivable
to the average citizen that the Gin
tangible values" should be given con-
sideration in fixing values upon
which rates shall be charged. 1t is
inconceivable, because that is exactly
the public's own contribution to the
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