Five Mile Beach weekly journal., 1922-06-23

COMMENT From the
ELMER TIMES
From the
TINES


The evils of long term municipal is
sues are illustrated in a recent issue
of the Dearborn Independent in a re-
view of debt conditions in Hamilton,
Ohio. Under state enactment it was
lawful for several years to issue de-
ticiency bonds to meet deficits in cur
rent Indebtedness, which helped to add
to tax burdens; that situation has
been corrected and bonds may now be
issued serially only.
Hamilton has 10000 population and
a bonded debt of nearly So, 900, 900,
many of the bonds having been is
sued for Improvements long since
worn out, while bonds and interest
thereon are still very much alive.
Back in 1889, the people there felt
that they were being mulcted by the
corporation supplying gas, and the
municipality constructed it's own gas
plant with an issue of $780, 900 bonds.
The gas plant was discarded long ago,
but a part of the bond issue still re-
mains unpaid. The annual budget
now requires nearly a half-million
dollars to be raised in taxes, the
greater portion of which goes to pay
interest. The situation in Hamilton is
not unlike that in hundreds of other
municipalities.
Chamber of Commerce and public
governing bodies are awakening to the
fact that monopoly in some things is
a blessing instead of a curse, as for
merly regarded. Many years ago the
Times realized this fact and when it
was proposed to bring a second tele-
phone line into Elmer, opposed the
project and in the face of a lot of
public criticism, aided in preventing
the extension of the lines through the
Elmer section; the excellent service
since furnished by one company has
proven the wisdom of the stand then
taken. Two trunk lines into one town
proved an expensive proposition for
takers of service who were required to
pay for two phones instead of one
without any corresponding benefit.
In many cities competing trolley
lines had to be absorbed into one sys-
TEN before it was possible to sustain
satisfactory service, and in many in
stances closely competing railroad
lines meant insolvency for both.
There is no danger whatever in
monopoly in public utilities. Practi-
cally all states have laws permitting
the regulation of rates and service so
that it is impossible to impose on pa
irons. Regulation in it's early stages
proved disastrous to many corpora
lions. Public utility commissions were
usually influenced by political consid-
e~rations and reflected public senti-
ment when they ground down the cor
porations below the safety limit, a
course which was in the end expensive
for both investors and patrons. In
some parts of the country corpora
tions went insolvent under the regula-
ton whip and trolley and other forms
of service had to be entirely aban-
doned.
Under public regulation there is no
reason for a franchise tax any more
than there would be if the service was
given by municipal owned plants. If
corporations were to remain solvent it
was necessary to collect from the pub
lie sufficient to pay operat-
! ing expenses, bond interest, dividends,
and the amount collected in franchise
taxes, so that in any way it is regard
ed the effect of the franchise tax was
to collect it indirectly from the pa
irons who in their short-sightedness
thought that a franchise tax was COM
ing from the Golfers of the corporation
instead of their own pockets.
The sensible ourse when public
regulation was put in force would
have been to have repealed all fran
chise taxes, all requirements for troll
ley companies to pave streets or road
ways, and all other burdensome re-
u~uirements, if cheaper transportation
was the object sought for patrons.
There should also have been denied
the right of competition for other cor
porations performing similar service
on the same routes. This course
would have been economy all around;
an opposite course was pursued.
While franchises were of no value
from a money standpoint after regula-
ton prevailed, the public still regard
ed them as q choice possession to the
corporations. No effort was made to
grant monopoly, but rather to encour-
age competition where it should have
been plain to the reasoning person
that monopoly was the proper course.
Might as we'll demand two post offices
side by side. or operate public schools
in opposition to each other, or estab-
lish competitive courts of justice, all
of which would be waste.
Competitors were not only encour-
aged but given encouragement over
old established companies. and in the
case of the jitneys the trolley COM
panies had to help pay for the paving
the jitneys drove over free.