S ~^T mm$ ftfV :*§t INTERNATIONAL FALLS PRESS. EBERHART URGES applications for the issuing of stocks wide accounting and statistical department. system, where the commissioners are ough investigation and report of experts and bonds. Such provision is not only appointed for a long period, the governor by a competent commission beneficial to the taxpayer and consumer Municipal cannot chang® the entire board which has no personal interest in the 3. Municipal Plants but to the purchaser of securities plants are not operated for private except for proper cause shown upon controversy and is wholly independent PUBLIC UTILITY LAW public hearing. This method insures as well as the utility corporation gain, and their regulation as far as of local conditions, politically or otherwise. itself. more stability and better service, because the state is concerned is therefore Duplication.—Another the commission can devote all 2. Unnecessary largely a matter of accounting and Equipment. 4. Expert Service and important economic result of its time to the service relieved from reports. They are therefore interested —Effective regulation involves also the Advocates Policy of state regulation is the elimination of the expense and troubles of political principally in the accounting best possible expert service and the regulating authority must be able waste by preventing the unnecesary campaigns and indpendent of executive and statistical departments of the equipment. In testing the quality as to make a full and complete physical duplication of utility plants and equip dictation. state commission. These plants, when well as quantity of light, heat, power, valuation of all properties belonging to ment. I am a firm believer in competition, Minnesota should profit by the experience State Control. properly segregated from political water, telephone, telegraph, and transportation such utility and prevent the issuing of but when such competition results of nearly all the other states domination, very readily adopt the service, in making physical watered stocks and bonds on which to in the construction of utility and make its railroad and warehouse improved methods of other utilities valuations of such properties, in base fictitious returns and dividends. plants and equipment far beyond the commission appointive. Two more and profit by their experience. The checking, examining, and auditing The municipality cannot control the possible needs of the community commissioners should be added, making uniform system of accounting enables books, accounts and securities, and in issue of stocks and bonds. This is a served, such competition compels the five in all, its name changed to them at all times to know the exact collating, classifying and analyzing all right granted by the state and must public to support institutions that are the "State Public Service Commission" cost of operation which is essential in PREDICTS BEST RESULTS facts in connection therewith, the employment be regulated by it. But in order to not necessary. An unwarranted tax is and then be given the regulation the interest of economy. This is occasioned of skilled experts and valuable determine the merits of a stock or imposed upon the public at large and of all state public utilities. This sometimes by lack of expert equipment is absolutely essential, bond issue and properly regulate it, the enterprise usually brings financial arrangement would remove the objections and the average municipality cannot advice and sometimes by political the regulating authority must have ruin to the Investors. The commission raised against two public interference. Oftentimes municipal afford the expense connected therewith. full and complete jurisdiction of all should have authority upon utilities commissions and would always With such expert service and plants do not provide sufficient funds Plan Now in Successful Operation property involved for the purpose of investigation to order increased facilities secure to the state an experienced equipment, as well as the necessary for depreciation, and the complete reconstruction valuation and be able to enforce its and equipment, whenever neces working majority of commissioners. of a plant has to be met decrees. Very few, if any, of the utilities authority vested in the state, all municipalities in Number of States. sary, and to authorize other utility They should be appointed by excessive taxes instead of a gradual are entirely within and subject to and rural communities corporations to enter the field in order at a higher salary for a longer term, charge against the consumers. would have at their disposal the the jurisdiction of any one municipality. that the people may have adequate and their employes should be placed Errors of this kind are always means of solving on a just basis any They are either inter-municipal service without paying excessive under strict civil service. checked by the state commission and problem connected with their public or have their sources of supply and rates, but where the community cannot I PRESENT SYSTEM OBSOLETE am well aware that some of my corrected. While there has been a yower outs.Je the limits of the municipality. utilities, no matter how intricate and support another plant, the commission enemies will not let me make these disposition on the part of some municipalities difficult. Gas companies are extending must have authority to refuse appointments if they can help it. It owning public utilities to Health.—Public health their mains far beyond the city 5. Public its installation. If in the Interest of must not be forgotten, however, that oppose complete state regulation, affords another important phase in the liiv.its. Street cars are reaching out economy and good service, it should their objections are not made in good there has been very little objection consideration of efficiency. The testing State Executive in Speech at St. Paul into the adjoining country. Electric be of advantage to the municipality faith. The character of my past appointments of water in the interest of public raised to the control of such utilities light and power concerns transmit the to own and operate any particular Covers Subject Thoroughly and Gives furnish the only standard health is in the first instance a municipal to the extent of enforcing proper uniform currents from power plants located at utility, such municipality should have by which I should be judged, and I Numerous Reasons for His Belief problem, but where disputes accounting and the furnishing of some waterfall many miles away. the right to acquire the same, paying am perfecetly willing to submit this arise or where the municipalities re- reports. That Such Legislation Would Be of Telephones, telegraphs, electric and therefor its actual value and no more. question to the people upon that record. steam railroads are all inter-municipal 4. Service, Rates and Returns.— Great Benefit to Minnesotans. 3. Municipal Regulation Too Expensive.—Intelligent I Should so far forget myself The uniformity in service, rates and and cannot possibly, for lack of jurisdiction, regulation of public and my duty to the state as to appoint St. Paul.— (Special.)—Governor Eberhart returns of similar public utilities be regulated by the municipalities. utilities requires a very high order on such an important commission opened his campaign for statewide through the state, as far as the local of engineering, accounting and statistical men of inferior qualities or men differences in the cost of operation control of public utilities in a The Consumers' Power company of skill. Every one engaged in under the control of any interest in will permit, is desirable, no one will St. Paul furnishes light and power to speech before a crowded meeting of expert service must have scientific this state or make such appointments question, and it is difficult to see how dozens of Southern Minnesota cities knowledge of utility organization, the St. Paul Office Men's association as a reward for political services, I any one can consistently advocate and villages. In this case its most management and operation in all its 1 at the St. Paul hotel. The governor earnestly hope, and now request,-that any other method of securing such important and valuable property are departments. The commission must I may be made the first example of said, in part: uniformity than by state regulation. the water power plants at Cannon have a line of trusty and capable experts the recall now before the people for Never before in the history of our Falls and Rapidan. How in the name to whom the most technical adoption at the next election. Let us RELATION BETWEEN STATE REGULATION nation have greater problems confronted of common sense can any city or village and scientific problems can be referred be frank about this matter. My political us for solution. Enormous agricultural AND HOME RULE. dependent for light and power for investigation and report. enemies are not at all afraid and mineral resources and unsurpassed While the "home rule" argument upon this utility corporation determine Such experts must have a wide range that I shall end my political career facilities for transportation, has often been used to defeat state the fairness of a rate by making of experience, be familiar with utilities by making bad appointments on the coupled with a most wonderful genius regulation, there is no valid reason a physical valuation of properties and problems in every section of the public service commission.. They for invention, organization, and development, why the true home rule principle enforcing rules and regulations outside state, and have a thorough understanding would not shed many bitter tears if I have enabled the American should not be made effective in connection the limits of its jurisdiction? of industrial and commercial did. But they are iafraid that I shall people to produce untold millions with state regulation. If any Granting, however, for the sake of conditions generally. In addition succeed in securing for Minnesota the of wealth and to form the most gigantic municipality should desire special or thereto, they must be of unquestioned argument, that this were possible, enactment of the most important and commercial and industrial organization additional service and is willing to how can such city or village determine integrity, free from local influence or truly progressive measure ever adopted ever known to the civilized pay for it, such service should be the fairness of a rate dependent upon prejudice ad actuated only by the by this or any other state, and that world. granted. In the location of car barns, highest sense of justice and equity. the rates and service in every other I shall get some little share of the The effective control of these business power houses and other similar buildings, The cost of such experts and the city or village served by the same credit for its adoption. organizations by nation, state, if the municipality has reserved necessary mechanical equipment is While a large majority of the state corporation? The same is true as to and municipality has long been the certain sections for such purposes, it prohibitive to all municipalities in now have one or more important public Minneapolis, St. Paul, Duluth, and object of legislative and executive should have a right to enforce such this state with the exception only of utilities under state control, the many other cities in Northern Minnesota, authority, but not until the last two regulations in all cases. Oftentimes following states have all their utilities, to which currents for light and Minneapolis, St. Paul and Duluth. I decades has such control become generally in the granting of franchises and costly or nearly so, regulated by a will gladly concede that these large power are transmitted from power GOVERNOR EBERHART. effective. This applies specially iuse to act, tne state must step in extensions of service through state commission: Wisconsin, Massa cities can afford this great expense, plants located outside of their jurisdiction. to public utilities organizations. and enforce the observance of sanitary but granting that, why should the sparsely settled territory, it is desirable c-husetts, New York, New Jersey, Nevada, In the enforcement of every Prior to the last two decades the control laws and regulations. This is a function to secure an expression of the taxpayers of those cities pay for New Hampshire, Rhode Island, local regulation the municipal officers for the state board of health, but of public utilities was attempted three sets of experts and equipment local sentiment in regard thereto, and Vermont, Washington, California and cannot proceed beyond their jurisdiction only by the various municipalities. in making its tests and investigations when one set is not only sufficient no state commission will disregard Kansas. During the last six months and the suburban and country That such regulation, with very few the experts of the public service com such sentiment but rather seek its the following states have been added but can serve all the cities bettter? residents have absolutely no means of exceptions, has been a failure is now mission should be employed so as to to the list: Maine, Missouri, Ohio, The question is unanswerable. The guidance. Where new important improvements securing adequate service or reasonable J.A, j^uite generally conceded. It has been prevent the duplication of state equip Indiana, Pennsylvania and Illinois. very object of regulation is to secure are under consideration rates if the utilities corporation ment. Our supreme court has held W^feiin/i utterly impossible to keep the the best possible service at the lowest Many of these states have followed for adoption an expression of the sentiment is not willing to grant the same. These that municipalities are responsible for '.Vlblic .utilities out of politics and the cost to the consumer, and the unnecessary the Wisconsin law, adapting it to local in the community affected are facts of common knowledge which damages to persons and property dnstantly changing municipal authorides, duplication of regulating conditions. The experience of Wisconsin thereby is not only desirable but often should convince anyone that the regulation caused by neglect to properly guard dominated largely by ward politicians, authorities is not only a great economic can, therefore, be used as an necessary. Wherever the home rule of these public utilities is not a public health, and no city should be have made their campaigns on example. In addition to saving large waste but also a needless division principle can be applied for the purpose municipal problem but a state problem. permitted to allow unsanitary condi S» some issues involving such public utilv' sums of money in the operation of the of responsibility which necessarily of securing service more suitable tions within its borders, because the ities organizations with the result various public utilities by uniform must result in a proportionate to the need of the community in 2. Definite Fixing of Responsibility. 4, breeding of disease in one city affects generally that the public utilities have inefficient service. accounting and statistical information, question, it cannot in any way conflict —The efficient regulation of public every other community by intercommunication. either dominated the administration the direct reduction of rates by the 4. Using Equipment in Common.— with proper state regulation, but utilities require the definite fixing of •or have been made a palitical football Wisconsin commission amounts to Finally, there is much equipment that will on the other hand be a valuable responsibility in the hands of as few 6. Continuity of Service and Civil for the benefit of unscrupulous politicians. about $2,500,000 per year. It is estimated can be used by several utilities in aid. persons as possible. Under the old Promotions.—Lastly, efficiency Service Only the favored few have common. In the construction of underground that in reduced rates and As to the maintenance of separate system of ward government it has is dependent largely upon continuity benefited by such administration and economy of service the Wisconsin conduits and mains through expert service and equipment for the been found almost impossible to fix of service and promotions under the the vast majority of consumers have commission has since its organization the streets as many public utilities as purpose of testing products, determining the responsibility for mismanagement merit system. The public service been compelled to pay high and discriminatory by the nature of the service can operate made a net saving of about $12,000,000 reasonableness of rates and mak of city affairs. Whenever the advocates commissioners should be appointed rates for inadequate and together should co-operate in to the people of that state. This is ing valuations by the municipality, it of more efficient government without regard to political affiliations inferior service. the cost of construction and the use surely a most excellent record. is largely a question of economy. If started a movement for a change from and for a sufficient number of years, Perhaps the strongest evidence of of common equipment. There is no Objections have been made to state the local taxpayers are willing to impose the ward system to the city wide commission so that the term of only one commissioner unsuccessful municipal regulation of valid reason why three or four different regulation, because certain public this unnecessary burden upon form, the ward politicians, may expire every, or preferably public utilities is the rapid growth of sets of telephone or telegraph utilities are in favor thereof. These themselves, the taxpayers not affected certain special interests and favored every other, year. Through this method municipal ownership. That municipal poles should disfigure and obstruct objections are made only for the purpose thereby should not complain. consumers joining with them, would a majority of the commissioners ownership of public utilities as compared our public highways and the community of creating prejudice. It is not Whenever disputes arise under the immediately, under the guise of "home will always be experienced in service with municipal regulation has at large be made to pay for a question as to who are for or against, application of the home rule principle rule" proceed to defeat the movement. and as far as possible made inde foeeij generally successful will not be such unnecessary duplication of it is a question of right, justice and between the municipality and the public In spite of such efforts, however, quite pendent of political changes in the questioned. Municipal ownership of equipment. Since nearly all of the equity. Many public utilities in this utilities corporations, the state a number of Minnesota cities have state administration. All employes public utilities when properly directed, public utilities are inter-municipal, it state are favorable to state regulation. commission must be the arbitrator adopted the commission form of government should be under strict civil service has been a blessing to many municipalities follows that there must be a state They know that it must come subject, as in all cases, to an appeal and the remaining cities will and promoted for merit only. Under of this state, and in most commission vested with full authority sooner or later, and also that in other to the courts. It has been found by unquestionably do so in the near future. a constantly changing city administration, Instances has proven itself infinitely to order such common use of equipment states, while it has proven a great experience, however, that the decisions The all important advantage of the regulating authority is not superior to the former local regulation. after due investigation and to benefit to the people, it has not injured of state commissions have been the commission form of government sufficiently permanent and the ap apportion the pro rata cost thereof legitimate business enterprise, so uniformly thorough and fair that is its definite fixing of responsibility pointments are too apt to be bargained As a general rule it can be safely among those benefited. but rather helped it by establishing few appeals to the courts have been for the operation of each city department away under the spoils system 1. Accounting.—in oraer to secure stated that the state or the municipality more efficient and economic management, taken. in one person elected at large That this is not the case under state the highest standard of efficiency and should not engage in any business by furnishing expert service and and held responsible to the people control is demonstrated by the expe economy, it is absolutely essential to This is a matter for the legislature enterprise which can be conducted as equipment to every municipality In through the initiative, referendum and rience of public utilities commissions have comparative statistics showing to solve. In my discussion I have efficiently and economically for the the state at a minimum expense, by recall. In the regulation of a statewide in other states, as well as by the rec the operation and experience of the pointed out the essential elements of benefit of all concerned by the priwate providing uniform systems of valuation ord of our tax commission, board of utility, which is always a public various utility plants throughout the the law, the details are not so important. individual or association. But and accounting, by eliminating necessity and often a monopoly, it is, control of state institutions, and other state as well as other states. There After having made a care [human nature is always more or less useless duplication of service as well therefore, of still greater importance similar state commissions. A study must, therefore, be established a uniform ful study of the laws of other states, rselflsh, and in the case of public utilities, as equipment, and by attracting to of state control, as tested in actual that such regulation should be fixed in system of accounting. Such accounting which by their very nature often I do not hesitate to state that the this service a higher grade of experts the hands of a few commissioners, so operation, should convince the most should show in detail the econstitute monopolies of public necessities, Wisconsin law, with some modifica and employes through its merit system. that every department of such regulation skeptical that when the state, service financial and operating experience of these must not under any circumstances tions, that apply specially to our state, The most powerful public utilities is made more permanent, removed may have c~»e commissioner at every plant. Under the present system be left a prey to selfish is the best. Under it Wisconsin has corporation in the state, however, from politics and the appointing chief its head, who should be held responsible it is impossible for one plant to and unscrupulous private enterprise. successfully regulated its utilities, has been the leader in opposing state executive held subject to the will of to the governor and he to the benefit by the experience of the other, and while instances of inequalities, in It is therefore essential in order to regulation of all public utilities, and the people under the initiative, referendum people of the state directly through because there is.no uniform system of ferlor service and high rates can still properly protect the interests of the through its influence largely the opposition and recall, the commission will the initiative, referendum and recall. computing the cost of operation so as public that these utilities should be be found there, its commission has to this measure in the last not develop into a political organization. The governor should have authority to determine net results. Wherever a performed inestimable service for the either operated or regulated by public house was made successful. to remove such commissioners for uniform system of accounting has people of that state in improving service, authority. It is needless to state that in this, II. ECONOMY. proper cause shown, .but upon public been established and reliable statistical lowering rates, and establishing Within the state the regulating authority as in other matters, there are many hearing so as to prevent the exercise Securities.—One of information furnished to the 1. Control of uniformity in accounting and operation. must be exercised by the state honest men who sincerely oppose of undue influence or dictation by the most important features of state various plants of the state, there has tor municipality or both. During retcent state regulation. The strong opposition, executive authority. regulation is the complete control afforded always resulted a general improvement Practically every state which in re years the tendency has been toward however, comes mainly from 3. Segregation From Political Influence.—It over the issuing of certificates from the standpoint of efficiency cent years has established a public state regulation and there is three sources, namely: the large consumers is recognized as a primary This is necessarily a state function and economy. Today surprisingly few utilities commission has followed the scarcely a state in the nation which who receive special rates, the principle in the settlement of every because these securities are issued un plants know the exact cost of their Wisconsin plan and provided for an has not either adopted state regulation ward politicians, and the Socialists. controversy, that the acting judges der state authority and the municipal! own operation, much less that of any appointive commission. Minnesota in some form or made preparations As to the first class the opposition should be free from bias and prejudice ties have absolutely no power to con other plant, and the state can render formerly had an appointive railroad therefor. While the superiority is well founded. Under state regulation and personally disinterested in the trol them. The old theory that corporations no greater service to the public at and warehouse commission. When of state regulation is quite. generally all special rates and privileges results. Let up apply this to the controversy should be permitted to large, as well as to the utilities themselves, Governor Lind was elected, the Republican conceded, there are still many who do would be abolished. The ward politicians between the public utility float as many stock and bond issues than to establish a uniform legislature did not want him to not understand its principles, and I do not wish to let go of the corporation and the municipal official. as the "traffic would bear" irrespec system of accounting and a bureau appoint the members of this commission, shall briefly discuss the question of public utilities. This is perfectly In most cases he has T)een elected upon tive of actual investment has long for general statistical information. and for that reason made state control from the standpoints of: natural. Under the guise of fighting since been exploded. Returns and an issue involving the public utility 2. Inspection and Examination.— the commission elective. The Republican I. EFFICIENCY, for "home rule," they have opposed dividends cannot be based on capital in question. He has often made Without a uniform system of accounting, leaders in the legislature, who II. ECONOMY, and every advanced movement to strengthen his campaign either for or against ization, but on the actual value of there can be no reliable inspection succeeded in securing the passage of III. UNIFORMITY. and purify the administration of the utility properties. Whenever or examination. Under state supervision certain contentions of the utility corporation, this law, acted not in the interest of our cities. They always wanted to do I. EFFICIENCY. stocks and bonds are issued and sold the state through its experts is dependent for his renomination better service, but purely for political it themselves. When the fight for a without corresponding value, such will be able to examine and properly 1. Jurisdiction.—In order that the and re-election upon, the settlement expediency, in the hope that the commission form of government was watered securities are sharing in returns report the financial and operating condition regulation of a public utility shall be of a controversy in a certain commission would select employes of taken up, they cried aloud that the and dividends to which they of every public utility and suggest effective, it is absolutely essential way, and is, therefore, personally interested the Republican faith only and thus wards, should be allowed to manage Should are not entitled and the result is a to the various officials in charge that such utility in all its constituent in the controversy. strengthen the forces of the Republican their own home affairs and for many great economic waste. Excessive such improvements in management elements shall be located within and he be permitted to sit as judge in a organization. True, Minnesota years succeeded in delaying the adoptioh rates of such are charged on the basis and operation as will be found necessary. under the jurisdiction of the regulating contest involving his own personal has been fortunate in the election of of a strong centralized city government. watered capitalization, and the consumers In making a physical valuation power. The question in nearly and political interests? Every sense good men on the railroad and warehouse The same opposition is pay the bills. It is important it is also important that a uniform every case is what shall constitute of fairness and justice will rebel commission, but that fact does raised now by the same powers and that the commission, after thorough good a adjudication methofl of determining and expressing service at a fair and reasonable against such conclusion. The not right the wrong nor justify its for the same purpose. Socialists believe investigation, should have the right to This values should be adopted. can rate. In should be made After thor­ the determination thereof continuance.-* Under the appointive in public ownership. grant, refuse or modify and all he accomplished only through a state* Jr 1 g* J*"" 1 1 11 1 S- j. mm ng iraryTgr