The New York herald., 1922-12-30
smith PLANS TOILET
CITIES own OR RUN
lALLPUBLIC UTILITIES
New Governor Would Read
First Message i'll Order
4 to Stress Policies.
CONDENSATION CLAUSE
Municipal Ownership Will
Eliminate Preferred and
Common Stocks.
HYLAN TO GAIN POWER
HYLAN TO GAIN POWER
Goyernor-Elect 49 Years Old
To-day, but Will Have No
Special Party.
Special Dispatch to THE NEW YORK HERALD
New York Herald bureau.

Special Dispatch to THE Nrv YORK HERALD
New York Herald Bureau,
Albany Dec. 90.
Alfred E. Smith probably will read
his first message to the Legislature
In joint session next Wednesday, fol-
lowing the precedent set by President
Wilson in going personally before
Congress.
No Governor of New York. so far
as the records show, ever has read
message to the Legislature. but Mr..
Smith considers the document he has
prepared outlining the policies for his
adrpinistration to be of such impor-
tafice that he is determined to attract
to 1t all the attention possible.
The Governor-elect announced to-
day that the municipal ownership
policy which he is to give to the State
Is the embodiment Of the principle laid
down in the Wagner Donohue meas
ure passed by the Senate in 1919 and
Y killed in the Assembly by Speaker
Sweet. This will be the companion
bill to the transit measure dealing
specifically with New York subways.
Outline OF the idea.
The fundamental principle of the
Governor-elect's proposal is that New
York and the other cities may own or
operate any or all of their public
utilities. and the following methods
are provided for acquiring them:
A municipality ia empowered to
:, enter into an agreement with the
owners of any public utility for It's
purchase. II the city and the owner
fail to agree on the price condemna-
tion proceedings are to be begun.
The question Of acquiring public
utility, is to be passed upon at a
special election. and IL the governing
body OF city falls to act the initia-
tive may be taken by petition.
The purchase OF the public utility Is
to be from money iaised by the issue
OF certificates. covering the capital
needed. drawing interest and backed
by the credit OF the city.
Critics of Mr. Smith. who have taken
the municipal ownership protestations
OF the Democratic platform with a grain
OF salt. were surprised tonight by the
sweeping character of the public owner
ship bill proposed.
This measure has been indorsed and
promoted In Albany by William r.
Hearst since 1915. II was known as the
Wsgner-Donohue- Hearst bill when il
PASSED the Senate in 1919. Mr.. Hcsrst's
iame being attached out of regard for
the gubernatorlal aspirations he enter
tained in that year.
sweet Kept Bill Buried.
ican votes In the State Senate the bill
was sent over to the Assembly where
Speaker Thaddeus c. Sweet refused to
let 1t come up for debate.
Enactment of the proposed bill
promises public ownership and control
OF every public utility in the State
through sweeping powers conferred
under condemnation proceedings. The
capitalization affected by this measure
reaches into the billions of dollars. and
the bill itself Is certain to he the chief
measure or opposition on the part OF
lublic utility management during the
coming session.
Provision is made for floating munic-
ipal bonds. the proceeds from which
ore to be used for tho purchase OF
utilities. These bonds are outside the
constitutional debt limits OF the CITY
issuing them and the capacity for pur
chase OF utility properties is bounded
only by the willingness OF investors TO
take up this class of securities.
Applied to New York city this would
mean that the Hylan administration
could negotiate with the Interborough
and any other utilities for the pur-
chase of their properties. IL the owners
put n price on their property which Mr.
Hylan comedies TO be out OF line with
intrinsic valuation the city could then
apply to the courts for condemnation
proceedings and take over the property
at the price set by the judicial body.
Would Eliminate stock.
This would fix an Intrinsic valuation
which would eliminate much OF the pre-
ferred and common stock issued against
utility property Utilities In this class
arc The Consolidated Gas. the New York
and Brooklyn Edison companies
The creation OF vast Tammany
dominated political machine composed
Of employers and executives Of publicly
owned utilities Is regarded by opponents
OF the Smith proposal MS the purpose
back OF tho project. The Democratic
sway in the state for an indefinite
future is feared by Republicans as a
possible result OF the legislation de-
scribed. IL also is regarded as a con-
cession 10 Hearst which will hold him
in line with the organization and tho
state administration.
In addition to this measure the transit
program would abolish the present
transit commission in New York city
and transfer Its powers to the Board
of Estimate and legislatc out OF office
the present upstate Public Service
Commission.
Tho functions OF that body would he
turned over TO a Statewide commission.
having control only over railroads. and
Continued on Pnge Three.