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credit of the state, in order that the interest rate may be kept at the lowest possible figure, and to insure the carrying out by the utility agency of the public profession which it makes. This policy is being consistently followed as an integral part of the public utility program elsewhere, and at least until such time as the federal government undertakes it, a state which omits these necessary precautions is failing in a plain duty.

The recognition of the public character of the public utility employment and the state-wide responsibilities assumed in the calling raises some questions as to policy in the intercorporate or interutility relations of these concerns. The postulate made is that the policy adopted shall be such as eventually will prove of the greatest advantage for the widest possible community. This would require, as sound policy, the avoidance of economic waste both by evidence of useless duplication of facilities and by requiring the interchange of traffic and service in proper cases. The utilities, as agents of the same principal, owe it the duty of furthering the interests of their principal by coöperation. Here again the distinction between the momentarily advantageous and eventually profitable is to be kept clearly in mind by the utility which is reluctant to declare a truce and act in harmony with its former competitors in the future joint service of the commonwealth.

As details in the program, one requirement of which is the preservation of the utility's service in an unimpaired condition, proper accounting methods and the establishment and proper expenditure of reasonable depreciation and renewal reserves or funds may be mentioned. These requirements have usually been made with more or less vigor by the public service commissions, and are being worked out with some degree of consistency. They are mentioned, therefore, rather than discussed. In like manner may be passed with casual reference the creation of public service commissions in practically all jurisdictions with the primary objects of securing the adequacy of service and reasonableness and equality of rates which the law requires. The policy to be evolved by the states will naturally center around the present activities of the public service commissions. There is need of correlation of the functions of such commissions with those of other tribunals dealing

with other phases of the subject; and, in the case of interstate utilities, with the federal commission and similar bodies in other states.

It might as well be understood, however, that the work performed by such commissions, to be effective, must be of a highly technical character, covering a wide diversity of fields, and cannot be performed with credit to the state or the commission or with full justice to the utility or its patrons except by the expenditure of sufficient money to procure high grade expert assistance in sufficient quantity to permit prompt attention to matters which require investigation. A state which cannot afford to spend enough to insure thorough, expert work, would far better restrict rather than increase the scope of duties of its commission until its financial conditions warrant paying for what it expects.

A rational and consistent state policy as to public utilities would pay particular attention to the question of taxation, including the general property tax and the various local occupation and other license fees exacted.

Undoubtedly in determining the economic cost of public utility service there must be taken into consideration the repayment by those receiving the service for the special benefits conferred upon them through the medium of the utility corporation. There can be no objection to the imposition of a reasonable tax upon the utility's property, fairly commensurate with the benefits the state confers and the expenses the state is put to in safeguarding of the property and those engaged in operating it. This would logically include the indirect expenses of the state as well as first costs due to the exercise of the

police power. These expenditures should be borne by the utility service, equally with insurance and other comparable items.

It cannot be admitted, however, that the best tax is that which succeeds in plucking the maximum amount of feathers from the goose with the least amount of squawk. At least, the goose could scarcely be expected to subscribe to such a doctrine.

Generally speaking, no great attention has been paid to the question of public utility taxation in connection with the development of a rounded policy. It has been recognized for a con

siderable time that the peculiar relation between the utility and the public, whereby the public service corporation is permitted to shift the tax burden onto its consumer directly, and still demand protection and compensation rates for its investment and service, makes it relatively easy to impose tax burdens upon public utility properties. In consequence, taxes have been and are imposed entirely as if, by some legerdemain, the tax money was extracted from the pockets of some invisible, intangible, nonresident and nonresistant stockholder, who was powerless to oppose and absorbed the excessive burden without attempt to retaliate in the way of diminished quality or extent of service, or by increasing rates or withholding reductions in schedules. This manifests itself in the property tax by assessments which exceed the value the property would bear if in private service-always supposing a correct equalization-supposed to be for the intangible franchise or earning power; and in the municipalities we find gross earnings and fixed amount occupation taxes imposed as conditions precedent to the right to serve the public at all. If the assumption which underlies every attempt at the collection of an undue amount from a public service agency were correct, and the excess in fact was absorbed by the utility owner, it might be temporarily to advantage to resort to such methods of raising public moneys, although the ethical situation would not be altered. But anyone who assumes that such unduly burdensome taxation is borne by anyone other than the resident utility patrons and the community as a whole, either in the way of rates maintained higher than they should be, or curtailed service, is very ignorant or purposely uncandid.

On the other hand, it is equally important there be a proper apportionment of these governmental costs to the utility service; otherwise, the general property assumes part of the cost of furnishing the service to a particular class of citizens, or if regulation be imperfect, the returns of the investor are unduly large.

The tax problem is larger than merely getting of revenue for the state, and for its municipal governments. It deserves consideration as a part of the whole policy, because of the close connection between rates and service on the one hand, and

the making of the public utility business sufficiently attractive to maintain the investment of private capital therein on the other. Particularly should the problem be divorced from local consideration.

In passing, it may be observed that the patrons of the municipally owned utilities owe a similar duty to the general property owners to contribute their fair share to defray the cost of the special benefits received. Generally there is no account taken of this in municipal operation of its utility plants. The result is a concealed but none the less effectual shifting of these costs from the one who is benefited to a larger class, many of whom are not benefited by the service, and then the costs are apportioned by a rule which has no relationship either to the cost of performing the service or the benefits conferred.

To conclude and recapitulate:

It is not thought that the well-rounded policy can be enunciated forthwith, or be struck off at a single sitting of a legislature or constitutional convention. The questions are economic as well as political, and their answers are still so uncertain that further experience must point the way. Much does appear plain; and as far as that which is clear lies before us, the path should be followed. No policy can be formulated without overcoming vigorous dissent which springs from self interest, from ignorance, and from prejudice. Serious study of the situation as a whole, rather than piecemeal, is indicated; and when the bearings of the entire problem are understood, there is no reason to doubt that passion, purely personal gain, and lack of knowledge will cease to be controlling in any phase of the public utility question. We desire to emphasize the generality of the subject, the interdependence of functions, and the economic necessity of broadgauge consideration, with the ultimate rather than the immediate prosperity of all the parties to the relationship kept in view.

Duties and Responsibilities of the Commissioner of Labor and Factory Inspector

BY O. P. HOFF, COMMISSIONER OF LABOR AND FACTORY INSPECTOR

The Labor Bureau was established by an act of the Legislature in 1903, at which time the present commissioner was elected by a board, consisting of the Governor, Secretary of State and the State Treasurer, to serve for four years. Thereafter this has been an elective office. I am now serving my fourth term in this capacity.

Nineteen hundred three marks the time of the beginning of any particular effort to enact labor laws, and it was recognized by the Legislature at that time, as it must be by all thinking people, that without some one particularly having charge of the matter to see that these labor laws are enforced, they would certainly be a dead letter. It is a fact that, in nine cases out of ten, the worker who would undertake to get wrongs righted, where he himself is concerned, would lose his job, and, knowing this, violations of the laws protecting laboring people would seldom, if ever, be prosecuted. The Legislature fully realized that to enact laws without placing some one to enforce the same, would be a mere farce; in other words, handing the workingman a thorough "gold brick." To enforce these laws is the duty of the Labor Commissioner. It is also his duty to bring before the Legislature data in regard to measures that are necessary to enact in order to help the industrial conditions.

Besides the justice of the matter, under our system of initiative, and with the fact that more than two-thirds of our voting population are wage earners, it becomes economic wisdom to study the laborer's needs and treat them with justice lest more vicious laws are put upon the statute books of our State. It should be easily understood that if the worker is unnecessarily stepped upon, or unjustly treated, he is going to help himself by the method the law provides, and he may not then be any too careful as to what extent he retaliates. Feeling that he has been unjustly treated he may easily step beyond reasonable bounds, and harm our whole State.

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