San Antonio light. [volume] (San Antonio, Tex.) 1911-1993, 1923-01-28


Months and sometimes years are re-
quired to assemble and install the ma
terials and machinery necessary to meet
the growth of the city. IL the construc-
ton work is done too soon the result is
an unnecessarily large investment. II
the work is not done soon enough, the
company is not able to carry the bust
ness which is vital TO the community,
and the community suffers.
The engineers, however, only do a
part of the development work. After
the engineer has forecast the require
ments and made the estimates Of the
cost Of the construction work necessary
10 meet these requirements, 1t becomes
necessary to obtain the money with
which TO do the construction work.
Here is where the public utility diff
fers from the ordinary industrial BUSH
ness. Almost all large industrial in
stitutions have been built up by the in
vestment of the surplus earnings OF
such institutions.
MANY years ago the authorities rec
ognized that by reason of economic
laws, public utilities must be monopo-
listic, even IL they were not so by
statute. The reason for this is plain.
II two pipe lines are installed in the
| same street to give service to the people
on that street, where only one pipe line
is needed, someone must pay the inter
est on the money invested in each pipe
line, and in addition. pay for the main
tenance of each pipe line il both are
| to continue in operation. There are
only a certain number of houses on this
street. If half of the houses are sup
piled off of each pipe line, instead Of
all of them from one, then one-half OF
the houses must pay all the charges on
one pipe line. and the other half Of the
houses pay all the charges on the other
pipe line. Inasmuch as the charges on
two pipe lines are twice as great as on
one. twice as much money must be paid
when there are two lines. as against
when there is only one. The result is
that each householder pays twice as
much as is necessary for the service
which he requires.
an the carly days Of public utilities
there were many attempts By persons
who did not understand these facts, to
introduce competing utilities. The an
swer has always been the same. Either
one of the competing utilities failed,
with the consequent waste of invest
ment; or il they both continued. the
householder paid for the additional ex-
| pense.
The economic rule that public utili-
| ties must be monopolistic as to each
other, having been established. and the
control of prices by competition hay
| ing been removed, the public authorities
many years ago substituted control By
regulation for control by competition.
| In setting up control by regulation the
authorities have deemed it wise to deny
! the right to public utilities to accumu-
late sufficient funds for earnings 10
both pay Il return on the investment
and to provide for development work
A return on the investment is the only
purpose for which earnings may be &C
cumulated. It therefore becomes nee.
essary to provide the funds for con-
struction purposes from some other
source. The only other source avail.
able is to get the money from some one
who has il, by selling him an interest
in the property either in the form OF
stock or in the form of bonds Prac.
tically all the money which has been
invested in public utilities for many
years has been from this source. II IS
not generally appreciated that the real
owners of the public utilities are the
people themselves. and that the securi.
| ties Of public utilities are distributed
widely throughout the country in the
| hands of individuals, or else held as an
| investment by insurance companies and
trust companies for the protection OF
funds entrusted to them BY individ'
uals.
I'm order to get the investor to put
his money into the stock or bonds of 4
company, it is necessary that he feel
reasonably certain that he will obtain
q return on this money. No one can
| make a man invest his money when he
does not want TO do so. 1t therefore
becomes necessary, for the continued
development of the public utilities and
for the development of the community
which goes along with it, to permit the
public utility 10 earn reasonable re-
| turn upon the money which is already
invested in it. 1t has been possible for
communities in some instances to crowd
down upon public utilities and prevent
the earning of proper return for con-
siderable period. The result is always
the stagnation Of the utility and seri-
Gus damage to the community in which
| it operates. by reason of the utility :
inability either to render adequate serv-
ice at the time or to provide the con-
structiOn necessary to meet the future
growth of the community.
you may take away from an in
weston a return on the money he has
invested, but you. can be assured that
when you do this you cannot induce
any investor to put further money into
the project.
each community is therefore deeply
interested in public utilities, first, be-
cause, after all, the moneys invested in
public utilities represent the accumu-
lated savings of individuals who have
placed them there for investment: and,
second, because a healthy and growing
public utility is necessary for the con-
venience and welfare of a community
in which it operates.
1.-THE communities are beginning TO
realize that rates which yield fair re-
turn on the money invested in public
utilities must be allowed for the best
interest of the communities themselves,
and that only in this way can the con-
veniences of modern civilization be OBJ
tanned and continued.
"These conveniences have become so
familiar that they are taken as mat
ter of course, and the fact that they
are great conveniences only comes sud-
denly home when by reason of some
fire. flood or other great disaster, the
utility service is suddenly taken away
from n community. At such times the
question Of what must be paid to obtain
reinstated service is not of first interest
to a community. The immediate re-
quest is. how can get the public util-
ity service reinstated? Never mind
,-bot 10 caste I must have IL ~