Perth Amboy evening news., 1923-01-16

Commission.
In course of time almost all units
formerly operating separately were
combined, first into combinations CT
two or three and finally into a COM
bination of nearly all, under the
name of the Public Service Railway
Company.
Each change brought with it an
additional increase Of capital stock
and bonded indebtedness composed
in large part of "water"-or stock
for which no value was given.
At a public hearing the president
of the Public Service Corporation
testified as to the value of the prop
critics of the company, from which
it appears that a large percentage
CT the securities of the company rep
resent water only.
The state did not attempt to fix
an arbitrary rate of fare by 1egisla-
ton, but adopted the more honorable
method of having the utility COM
mission fix it after a full hearing.
In the unsettled state of the law,
in the presence of conflicting deci-
sions, and an uncertain understand
ing of q subject quite new, the pro-
cess of fixing a reasonable rate was
difficult, and well nigh impossible.
Decisions made were reversed. Eff
forts to fix a reasonable rate were
discouraging, because there was al
ways the question as to whether the
rate so fixed was c~onffscatory or IN
reasonable Or in conformity to legal
requirements-not the requirements
fixed by statute, but those laid down
by the courts.
Then came the decisions Of our
courts, which much to the surprise
of those who had passed the regu-
lating acts, held that these MUNICH
pal grants were not contracts, but
mere grants upon condition, and that
the utility commission might regu-
late the rate either up or down as
might be just and reasonable.
All of these obstacles made 1t i'm
possible to produce satisfactory re-
suits and regulation seemed a fail
ure.
The indefinite and unsatisfactory
conclusions reached were reached
only after long delay, and at great
expense and effort on the part Of
the public and the utility companies
alike.
During all OF this period the utili-
ty companies have maintained a rate
of fare quite satisfactory to them
selves, while the public has not had
the relief to which it felt it was en-
titled.
If these unsatisfactory methods
are continued no permanent relief
is in sight.
One of the main difficulties lies in
the fact that there is disagreement
as to the value of the property upon
which the companies are to have q
reasonable return.
The companies contend that all
appreciation due to conditions dur
ing and following the war are to be
included in the amount upon which
a return is to be made. To this is
added what is termed 'going-con-
Germ value" as well as a large
amount of water represented by Sc
curities which have no tangible
value.
This necessarily makes a vast sum
upon which to demand a return.
Now, in this critical ju%ncture what
is to be done? Shall we continue
this futile policy of regulation which
brings no real relief, or shall we face
the problem and solve it? 1t mus
be solved and now is the time. IRE
/ SOlullUI, ldCh VI PlO6Ldli, ldAiulO -
| handle it though it be difficult, will
| only intensity what is already a SER
ious situation.
In the solution we must approach
the subject from a different angle
| We must adopt a course of common
honesty as between parties at arms
| length, honesty both to the public
and to the utility corporations.
The companies are entitled x
have a fair return upon the money
| actually invested in the enterprise
War time appreciation, which does
not represent actual money put in
the enterprise which merely repre-
| sent imitation of prices if ~reproduc-
ton were necessary now, must b'
eliminated. Reproduction may MOI
be necessary until a later time, wher
| prices may be more nearly normal
Wartime appreciation certainl,
does no. Represent, in any manner
IN inIast,nent of ST mary OF tn
companies dollars.
"Go:ng-concern value has no Fan
gioie basis Tor being included. De
Velopment cos.," Of e. part of mis-
was ruled out ill the "confiscation'
cases OF the Galveston case type ant
what is left of "going-concer'
value, REPRESENTS pIdCLlCdlly llOL'I
ing, especially i'll VIEW of the fac
that the franchises + not contracts
but grants upon ConC;tion.
Neither do these items rep.ese1
so many dollars Tut in the enccr
Prise
Then, we must deal with the tire
mendous amount added when tn
companies We're put together, com
monly known as water" to which
reference has already been made.
This question has its counterpart
in nearly every state. and in almos
all corporations of national opera
ton. such as oil companies, Goa
companies, steel and beef companie
and others serving the public in an
way. All are seeking a return upol
inflated capital, and ali want profit
upon watered stock, which does no
represent dollars invested, in the en-
terprise. This accounts in part 70
the high cost of commodities, and o
everything required by our people.
If we would but courageously fac
the situation, stop attempts at inef
fective regulation, and apply tn
process of def1ation, We would 500
arrive at a point where these com
panies would get a fair and homes
return upon the honest dollars in
vested, and the public would be pay
ing a fair price.
mil %~o 80 rtN aF nFEI1ia HfiIffJne