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telegraph, electric lighting and telephone companies, similar to the jurisdiction conferred upon the Board of Railroad Commissioners over the railroads of the State. The necessity for some such tribunal has been repeatedly demonstrated but its establishment has thus far been defeated. Its creation, however, may be regarded as only a question of time."
Now, I submit to the members of this Committee that neither Governor Cleveland nor Governor Hill was anything except an old-fashioned conservative. There was not anything radical about Governor Cleveland, except his rugged honesty. There was not anything radical about Governor Hill. But these men saw thirty years ago and twenty-five years ago the absolute necessity from the standpoint of the protection of the people of the State that the public service corporations should be regulated, not only with respect to their service and the rates which they charged the public for such service, but with respect to their issues of corporate stocks and bonds. The Legislature did not respond to any of the recommendations of Governor Hill in regard to the creation of the commission, and I think that the recommendations that came from the Governors in the years intervening between 1891 and 1905, when Governor Higgins occupied the executive chair, did not include repetition of any of these recommendations of either Governor Cleveland or Governor Hill; but in 1905 Governor Higgins did recommend to the Legislature the regulation of several public utilities in addition to railroads and street railroads and certified under Section 15 of Article III to the public necessity of the passage of the act creating a Commission of Gas and Electricity. Now the act of 1905 was the forerunner of the Public Service Commissions Law of this State; in fact the provisions of the Public Service Commissions Law were, so far as related to gas and electrical corporations, copied almost without change from the act of 1905. Now, in 1907, after the Commission of Gas and Electricity had been in operation about two years, Governor Hughes recommended the passage of a more complete law to be known as the Public Service Commissions Law, which was to take into and provide within its limits the regulation theretofore partly given over to a board of railroad commissioners, of the railroads and street railroads, but, in addition, the regulation which had been given to the Commission of Gas and Electricity over the gas and electrical corporations, and in his message to the Legislature in 1907, Governor Hughes said: The Commission should have all the powers possessed by the present commission and such additional powers as may be needed to insure proper management and operation. Its powers should be clearly defined and should embrace the power to act upon its own initiative as well as upon complaint; to pass upon the issue of stocks and bonds; to examine properties,
books and accounts; to require detailed reports and prescribe forms; to prescribe reasonable rates; to require adequate and impartial service; to provide for the safety of employees and for the protection of the public, and generally to direct whatever may be necessary or proper to safeguard the public interests and to secure the fulfillment of the public obligation of the corporations under its supervision." Now, gentlemen, that is the history, outside the Legislature, coming from Governors who are required by the Constitution to make recommendations to the Legislature, when in their judgment the legitimate requirements of the State shall warrant or direct, but also the action of the Legislature beginning ten years ago beginning really before that, because as the result of an investigation of the railroads by the Hepburn Committee of the Legislature in 1879, the former Board of Railroad Commissioners was created. They had some powers, very few of regulation, a great many of inspection, and the right to examine into the operation of the railroads and street railroads, and a limited amount of authority in the matter of investigating their accounts, alluded to by Governor Cleveland in 1884, but on the whole the measure was not a radical one. It was extremely conservative, a very mild sort of regulation at best.
Now, the thought of the Committee has been simply this: The Committee has felt after a rather mature consideration of this subject that the matter of regulation on behalf of the State through the establishment of these Commissions is a wise, a conservative and a successful method on the whole. No one would be foolish enough, least of all anybody connected with the work of the commissions, to urge either in this presence or any other, that the matter has been perfect; that nobody has been disappointed; that everything that was predicted by the advocates of the creation of these commissions has actually come to pass. I don't know of any human institution where it can fairly be said that all that might have been hoped for ideally has ever come about. But I think it is perfectly safe to claim on behalf of these commissions that, since they took over this very large jurisdiction and since they undertook to exercise the very considerable discretion and judg ment and legislative power vested in them or delegated to them, the regulation of the public service corporations of the State has been entirely free from scandal. I do not believe I go a step too far when I claim that, in the exercise of the jurisdiction that has been given to these commissions, they have demonstrated by ten years of actual record that they are dealing with these matters with absolute integrity; that there is not any back door to either commission, nor any side door, but that everything has been conducted uprightly with a good and fair degree of ability and with energy and a great deal of very hard work. The utmost publicity
was given to the hearings before the Committee on Public Utilities and the public was invited, if they had any opposition, to come to the Committee and state it just as fully as if, on the other hand, they had reasons they desired to urge why the commissions should be recognized in the Constitution. With the single exception of a man who was eminently entitled to be called a "crank and we have such people in the State with the single exception of a man who had made persistent endeavors to control the action of the Public Service Commission of the First District and who had a history in the courts and especially in the First Appellate Division where he had undertaken to likewise control the action of the court and had been sent to jail more than once for contempt — with the exception of this man, nobody representing either himself or any association or group appeared before the Committee in opposition to the suggestion that the Constitution to be drafted by this Convention should incorporate the idea of commission control in matters that are now committed to the commission. Now what is the experience elsewhere than in the State of New York ? It is a very singular fact, and, it seems to me, a very significant. fact, that there are but two States in the entire forty-eight to-day that do not provide more or less completely for the regulation of the public service corporations, that is to say, railroads, street railroads, gas and electric light companies, telephone and telegraph companies, etc., by commissions. These two States are Utah and Delaware. Most of these States have followed the lead of either New York or of Wisconsin and it is a fact that New York and Wisconsin in the same year 1907-developed each for itself a Public Service Commissions Law. The Wisconsin act was a growth in Wisconsin and represented entirely an independent point of view and development. The Public Service Commissions Law in New York was drafted in New York by men familiar with New York conditions, and with such conditions and the reasonable future acutely in mind.
One of the most interesting statements made to our Committee. was by Mr. Ivins the week before his sudden and lamented death. On that occasion he very clearly stated to the Committee the ideals that were carried in the minds of the authors of the Public Service Commissions Law as it was finally adopted in the year 1907, and here was the central thought of it all, that so long as the public service of the people, their transportation, their illumination by gas or by electric light, their communication by telephone or telegraph, was to be carried on for them and not by them, the public. must be just and fair to those who furnished the capital for these enterprises. Not only that, but they must give such uniform and
just treatment, such adequate return on the whole that those who had money to invest would be led and attracted to investment in the stocks or in the bonds of public service corporations. That meant, of course, that there should be an adequate return paid by the citizen to the public service corporation for the service which he could not procure for himself, furnish to himself, or which the community in which he lived either could not or would not furnish. It was one of the things that was had in mind at that time that there was an irresponsible tendency toward municipal ownership and operation unless the individual could be insured a fair service. at a reasonable rate without discrimination against him; that he should not have before him the example of discrimination in favor of somebody else; and, further, that it was not wise, certainly not at the present time, either to bring about or to allow to continue any tendency which could be answered only by the community resorting to the furnishing of these services as municipal or State services. There has been some impatience sometimes on the part of corporations, and more particularly on the part of promoters of corporations, that in the issuance of stocks and bonds they have been unduly hampered. I do not believe that, on the whole, there is just cause for complaint. There may be individual cases. I have no doubt that there are instances where the treatment by the commissions has been possibly too severe. I know there are some instances where it has been too liberal, because the commissions are not able, any more than the courts are, to detect absolutely all the truth. But I think that on the whole the ideal that was held in the year 1907 has been reasonably approached. There has not been any charge, there has not been any reason why there should be any charge, that the "Black Horse Cavalry," mounted or dismounted, has made any assault upon the Public Service Commissions, or either of them. There was a feeling, and I believe it was justified — I know that it was general that before the creation of the Public Service Commissions the Legislature was approached not only by the Black Horse Cavalry, but by a great many other bodies of men that were enlisted in anything but patriotic endeavors. Now if the idea that gentlemen fitted for these places, educated by experience somewhat outside and educated later by experience upon the Commission and it is an unique experience. I know many of you that have seen service in the legislative bodies will recognize that a man needs training. Anybody who has ever been on the bench knows that the judge needs to be educated after he is elected not altogether, but before he can perform his duties to his own satisfaction, anyway. So it has been with these commissioners. There is no doubt a period
of time when anybody going upon a commission is simply a learner, is simply a student. He cannot help making some mistakes. To my mind, these mistakes have been kept within reasonable limits. So the Committee has felt not only that it was warranted in recommending the recognition and perpetuation of the commissions in the Constitution, but it has felt that it was its duty, if it had been correctly informed of the conviction of the public, to make something along the lines of this report.
If you will read this recommendation, as I have already said, it is not a radical one. It recognizes that the Commission should continue. It fixes their terms. It provides in general terms that the jurisdiction shall be as it now is, but it provides specifically that "nothing herein contained shall prevent the Legislature from enacting laws not inconsistent with this section changing such jurisdiction." It was very warmly urged by several witnesses that it ought to recommend to the Convention the giving of such complete jurisdiction over the matter of rates and of service that the Legislature would be deprived of all power to pass laws either general or special affecting either subject. But it was thought not to be wise to do that for the reason, first, that whatever there is of useful power that has been given over to the commissions by the Legislature is, in its nature, legislative or quasi legislative; that, in almost every single instance, and certainly every class of jurisdiction that has devolved upon the Commission, the Legislature. might itself do the thing or provide for its being done in classes. It would not be a wise thing, in my judgment, to endeavor to create two Legislatures, one the Legislature that should have charge of everything of the character of legislation in the State, excepting the rates and service of public service corporations and their issue of securities, and another which should have charge of those particular things. And so the Committee rejected the idea that the Legislature should by the Constitution be divested of a power which it certainly possesses at the present time. But it was thought wise to include a provision that the Legislature should not itself by special statute fix a rate or a standard of service either for corporations generally or for a particular corporation, without communicating with the Commission having jurisdiction and requiring a report from it after it had conducted an investigation at which the interested party, be it corporation or individual, had had an opportunity to be heard and to give evidence and to have it considered. Now, I do not know I am not gifted with the power to look far enough into the future to determine conclusively, to my own satisfaction, whether or not the proposal in that behalf would result in encouraging the Legislature to leave everything of this kind, in the first instance, to the Commission, and to take