forded the basis for the magnificent and to the Orient, will still further recent development of those two add to the importance of New York great seaports. New York, situated as a world port. at the entrance to Long Island Sound Port organization at New York is, and at the mouth of the Hudson however, a very difficult problem, River, which is the continuation of owing to local geographical conditions the Erie Canal, is similarly for- and the fact that the port is sittunate. Inland water transportation uated in two states. Its four great prevents excessive rail rates and re- divisions, New Jersey, Long Island, lieves the roads of cumbersome, un- Manhattan and the Bronx, and Staremunerative coarse freights. ten Island, are divided by great tidal estuaries, the separating influence of which will not be overcome until freight tunnels shall be constructed under the harbor tying the several parts together. In the interim, the port of New York suffers from an of natural oppor New York stands unique among the seaports of the world in that it occupies toward North America and the rest of the world pretty much the same position that in past times Venice, Amsterdam and London successively maintained as entrepôts embarrassment for the world's commerce. With the tunities which are too magnificent exception of New York, all the other to be immediately harnessed to the seaports of the world are now pri- commercial and industrial needs of marily points of exchange for pro- the community. ducts between the outside world and The city of New York is endeava limited national or international oring to establish a comprehensive territory back of them. The wonder- development plan and policy which ful facilities afforded by New York shall, through succeeding administraharbor, together with the cheapness tions, provide continuity of design; of the route by way of the Hudson and the legislature of the state has River and Great Lakes to the in- recently given the city full power to terior of the continent, gives it con- organize and administer its watertinental advantages not enjoyed by front properties in conformity with any other port; it is in fact the the experience of the most successport of North America, and its in- ful seaports of the world. Under a fluence upon interior railroad rates recently adopted constitutional determines whether commerce shall amendment, approximately $70,000,flow from the Mississippi Valley to 000, constituting the capitalized another Eastern seaport cities, or north nual net earnings of the Dock Deto Montreal or south to New Or- partment, are now available for waleans. The Panama Canal route, by terfront improvements, and this sum diminishing the distance to the west is being increased every year as the coast of North and South America terminals become remunerative. XX. PUBLIC SERVICES RICHARD C. HARRISON CORPORATIONS AND FRANCHISES It was unlimited as to time and cov- Tendency Towards Consolidation.- American Electric Manufacturing Co. Despite the existing unfavorable public opinion of corporations, trusts and combinations in general, it is pretty well recognized that in the public-utility field the extreme of combination, the monopoly, is from all standpoints, the best form of service. A well regulated monopoly is equipped to furnish a continuity of service, at a price and in a manner impossible under competitive methods. A dual telephone system, a duplication of lighting mains or wires, a multiplication of competing public services of any kind, means poor service and untold annoyance to the consuming public. This is particularly true in the transit field, and the tendency in recent years in each of the larger cities has been toward a combination of all lines. The Metropolitan Street Railway Co. of New York City, the Brooklyn Rapid Transit Co. and the Boston Elevated Railroad Co. are excellent examples of the tendency, though not perhaps of the best methods of consolidation from the side of public interests. Each year has witnessed a steady increase in the gradual passing of our public utilities into the hands of a few groups of capitalists. In July, 1911, the elevated railways in Chicago merged into a $20,000,000 combination, forming one of the largest local traction companies in the world. New York City Electricity Supply. -In New York City, a new electric company entered the field to compete with the existing monopoly of the New York Edison Co. in the Borough of Manhattan. On May 31, 1887, the Board of Aldermen of New York City granted a franchise to the an un Indeterminate Franchises.-The biggest franchise fight of the year was that between the Interborough Rapid Transit Co. and the Brooklyn Rapid Transit Co. for control of the new subway system of New York City. (This subject is treated at length in the section on "Municipal Ownership" infra). The result is particularly interesting, on the franchise side, as the first experiment in New York with the indeterminate franchise, or grant during good behavior. The grants are made in the indeterminate new form, with option to the city, at any time after ten years, to purchase the plant or to turn the system over to another operating company. The indeterminate franchise is the latest advance step in safeguarding the cities' interests in franchise matters. It has worked well in Massachusetts and all indications point to its success in other parts of the country. The year was one of comparative quiet in franchise matters. Cleveland, Chicago, Detroit, Minneapolis, Toledo and Kansas City have all had hard franchise fights in recent years, but they have all been settled, except in Toledo, where the rate of fare question is still being fought out with the street-railway company. Chicago has begun to reap a golden harvest from its street-railway settlement of 1907. The profits to the city for the fiscal year of 1911 were $829,914, an increase of $355,000 over the preceding year. The city has received a total of $2,503,026 since 1907. Science of Franchise Granting. It is a matter of no little wonder that a subject which so vitally touches the community interest as municipal franchises should have received so slight attention on its theoretical side. Until 1911 no book was available treating the subject except on its strictly legal side. No careful study has yet been made outside of New York City to evolve a standard form as a rational basis for negotiation with companies seeking franchises. In Nov., 1910, the National Municipal League devoted a portion of its annual meeting to the franchise question, and its proceedings contain instructive articles on the "constructive franchise policy," and interesting accounts of a few of the more important municipal franchise fights and settlements. The franchise committee of the League is at work on a standard form of franchise which it is hoped will equal in value and importance its recent "municipal program." The socialist government of the city of Milwaukee prepared, during 1911, a proposed standard form of franchise but the terms are so severe that the companies are unanimous in refusing to apply for public service franchises under it. In 1911 the New York Public Service Commission published an interesting volume containing a complete account of the various franchises of electrical corporations in Greater New York. PUBLIC SERVICE COMMISSIONS STATE COMMISSIONS That the commission scheme of regulation of public utilities has come to stay, and that it has elements of vigorous growth, was amply demonstrated during 1911. After a somewhat stormy period of trial the state commissions generally appear to be settling down to less spectacular, but infinitely more valuable, careers of public usefulness. In no state has legislation been passed in 1911 lessening the powers of existing commissions, though the courts have accomplished practically the same result in many cases through "interpretation" of existing statutes. New Jersey has greatly strengthened its former weak law, and a few states have established new commissions. District of Columbia.-Ever since 1908, when the street railways of the District of Columbia were placed under the control of the Interstate Commerce Commission, that body has chafed under a burden so little correlated to its general duties. In 1910, a bill was introduced into Congress to transfer the power to the Commissioners of the District of Columbia, and to give them the general powers of a public service commission. The bill failed of passage. Again, in 1911, we find in the President's message a recommendation to the effect that the District Commissioners be given powers "similar to those of the Public Utilities Commission of New York City or similar boards in Massachusetts." "There are a sufficient number of corporations enjoying the use of public utilities in the District of Columbia," said the President, "to justify and require the enactment of a law providing for their supervision and regulation in the public interest, 1911. This fact, coupled with the appointment of an investigating commissioner, who had been a member of the Second District commission re consistent with the vested rights se- | Edward M. Bassett of the First Discured to them in their charters. A trict, whose term expired Feb. 1, part of these corporations-to wit, the street railways-have been put under the control of the Interstate Commerce Commission, but that Commission recommends that the vived the rumor that it was the power be taken from it, and intimates broadly that its other and more important duties make it impossible for it to give the requisite supervision." No law carrying the recommendation into effect was passed however. New York. With the success of the Democratic party in New York in Nov., 1910, the future of the Public Service Commission for a time looked rather doubtful. Public unrest in New York City over the failure of the local commission to reach a satisfactory solution of the question of new rapid-transit facilities, had been growing daily during 1910, and it was widely predicted in the press that one of the first acts of the new Democratic legislature would be a thorough reorganization of the public service commissions, with the possible abolition of the local New York City commission and the re-establishment of the former Board of Rapid Transit Railroad Commissioners to consider rapid transit exclusively. Gov. Dix, in his first message to the legislature, contented himself with the statement that he would make a study of the public service commissions and submit a special message on the subject at a later date. On the first day of the session, bills were introduced to abolish the Public Service Commission for the First District. The legislature, however, was more interested in electing a United States senator than in changing the public service commissions law. The fight which ensued crowded everything else from consideration. Gov. Dix changed his mind about a special message, but instead appointed his business partner, W. A. Huppuch, Public Service Commissioner for the Second District, to succeed John N. Carlisle; and very soon thereafter he designated Mr. Carlisle as special commissioner to investigate the Public Service Commission for the First District and report suggested changes. Meanwhile, the governor failed to appoint a successor to Commissioner a Democratic program to consolidate the two commissions and establish a local rapid transit board for New York City. Mr. Carlisle made thorough investigation. He held a public hearing for protests but no complainants appeared. His report made no criticisms of the work of the commission and recommended that no changes be made. He specifically advised against consolidation of the two commissions. Gov. Dix thereupon treated the matter as closed, and appointed J. Sergeant Cram in place of Commissioner Bassett. The appointment was widely criticised as ill advised, owing to the close affiliation of Mr. Cram with the New York City Democratic machine. Several bills to abolish or modify the commissions died in committees of the legislature. A large part of the time and energy of the Public Service Commission for the First District during 1911 was taken up with the consideration of rapid-transit matters. Early in the year, the commission invited joint consideration of the problem by the Board of Estimate and Apportionment. A committee comprising the Presidents of the Boroughs of Manhattan, the Bronx and Richmond worked with the commission all the winter and spring. A comprehensive report was made on June 5, 1911, which contains a thorough review of the transit situation, with recommendations which were adopted substantially in their original form by the Board of Estimate and Apportionment. The plan commits the City of New York to the construction of subways and elevated railroads which, when completed, will cost the city and the operating company over $200,000,000. (See also "Municipal Ownership," infra.) New Jersey.-As noted in THE AMERICAN YEAR BOOK for 1910, New Jersey adopted a very weak public service commissions law in 1910. Gov. Wilson strongly urged upon the legislature of 1911 the necessity for a radical revision of the statute. The result was Chapter 195 of the Laws of 1911 (in effect May 1) which has placed New Jersey among the states having the very strongest public-utility statutes. The new law provides for the appointment of three commissioners with terms of six years and salaries of $7,500. The commission is given power to fix rates, enforce regulation designed to secure safe and adequate service, and supervise generally the workings of all classes of public-utility companies. It may establish standards of service and a uniform system of accounting. A novel and interesting power is the right to fix the "rate of depreciation" for various classes of utilities. "Each public-utility corporation shall conform its depreciation accounts to the rates so ascertained, determined and fixed, and shall set aside the moneys so provided for out of earnings, and carry the same in a depreciation fund." Payments from this fund may be made only for actual replacements or new construction work. The commission may appraise and value public utilities, investigate complaints, test meters, and control stock and bond issues. The present commission is allowed an annual appropriation of $100,000, which is twice the amount granted its predecessor. A notable appointment to the new commission was that of Prof. Winthrop M. Daniels, head of the Department of History, Politics and Economics of Princeton University. With able administration the new law should be productive of excellent results. Connecticut.-By Chapter 128 of the Laws of 1911, Connecticut created a public utilities commission composed of "three electors of this state appointed by the General Assembly upon the nomination of the Governor." to fix rates and make such orders as are necessary to secure safe and adequate service. Companies are required to report accidents under penalty of $500 fine for default, and it is made the duty of the commission to examine into their causes and "suggest means if possible whereby similar accidents may be avoided in the future." Unlike the law in New York State, these accident records are to be open to public inspection. Annual reports are required from the various companies, but no power is given the commission to establish a uniform system of accounts. The commission succeeds to the powers and duties of the former inspectorgeneral of gas meters and illuminating gas. It is charged with the duty of testing both gas and electric meters, and may fix standards of illumination. Orders of the commission are reviewable by appeal to the Superior Court. The law is decidedly weak on the side of financial and franchise control. No power is given the commission to pass upon proposed stock and bond issues or the propriety of dividends. Franchises may be exercised and transferred without consulting the commission. The result of the law may be an improvement in operating conditions among Connecticut public-utility companies. It can hardly be expected that more will be accomplished by the commission. The law is a queer mixture of strength and weakness. It contains a radical provision for the recall of inefficient commissioners. New Hampshire.-On April 15, 1911, New Hampshire adopted its first public service commissions law, effective May 15. Railroads, telephone and telegraph, light, heat, power, water, ferry and toll companies are included under the jurisdiction of the new commission. Provision is made for three commissioners appointed by the Governor, with terms expiring on the first Monday in June in 1913, 1915, and 1917, respectively, their successors to hold office for six-year terms. The chairman is to receive a salary of $3,500, the clerk, $3,200, and the third commissioner, $3,000. The commission has the power to fix rates, control stock and bond issues, and establish The first commissioners are to hold office till July 1, 1913, 1915, and 1917, respectively, with successors appointed for six-year terms. Commissioners are to receive $5,000 a year. Railroads, common carriers, gas and electric companies, telephone, telegraph and water companies, are included under the jurisdiction of the commission. Power is given it |