Capitalization of Earnings of Public Service Companies
| Date | 01 May 1914 |
| Author | Morris Schaff |
| Published date | 01 May 1914 |
| DOI | 10.1177/000271621405300117 |
| Subject Matter | Articles |
178
CAPITALIZATION
OF
EARNINGS
OF
PUBLIC
SERVICE
COMPANIES
By
MORRIS
SCHAFF,
Commissioner,
Board
of
Gas
and
Electric
Light
Commissioners,
Boston,
Mass.
The
expediency
of
adjusting
the
powers
and
privileges
of
monop-
olies,
like
our
railroads,
telephones,
gas,
electric
light
and
water
com-
panies,
to
the
ascertained
requirements
of
the
public
and
to
the
conditions
which
govern
and
secure
to
the
companies
themselves
their
own
stability
and
efficiency
has
passed
beyond
the
debatable
point;
for
about
all
the
states
of
the
Union
have,
in
response
to
the
reasonableness
and
advisability
of
this
expediency,
created
com-
missions
for
the
supervision
and
regulation
of
public
utilities
which
from
the
nature
of
the
field
of
their
operations
are
necessarily
monopolies.
The
only
aim
and
purpose
of
these
commissions
are
to
secure
two
things,
namely,
the
lowest
price
for
an
adequate
service
ren-
dered,
and
the
permanence
and
security
of
the
investment.
The
body
of
principles
to
be
observed
in
securing
these
mutual
benefits
is
called
public
policy
and
this
(it
goes
without
saying)
like
any
politi-
cal
agency
has
to
adapt
itself
to
circumstances
and
the
growth
of
enlightened
public
opinion.
Let
us
bring
into
light
with
as
much
clearness
as
we
can
the
factors
on
which
the
lowest
possible
prices
depend
and
the
conditions
most
favorable
for
the
security
and
permanence
of
the
investment.
The
vital
relation
which
the
fitness
and
adaptation
of
the
plant
as
a
whole
to
its
environment,
its
output,
its
situation
in
regard
to
the
cost
of
material
and
labor,
the
zeal
and
intelligence
with
which
its
operations
are
carried
on
to
the
question
of
low
prices
are
so
obvious
as
to
need
no
elaboration.
They
are
facts,
however,
which,
save
in
the
matter
of
technical
skill
displayed
in
operation,
are
entirely
local
and
beyond
the
control
of
either
the
company
or
the
state,
and
the
advantages
and
disadvantages
they
impose
must
be
shared
or
borne
by
the
community
and
the
investment.
But,
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