In five years the commission dealt with 10,000 matters brought to its attention.78 In 1911 it disposed of 2,242, including 258 applications, 314 formal complaints, 1,593 correspondence complaints, and 77 orders to show cause, etc. There were 572 public hearings, occupying 285 days.79 The commission aims to settle everything informally if possible, and no communication goes unanswered. A great part of the work of this commission lies in the regulation of railroads. In this work the commission has opened a new era for New York, but since the regulation of railroads. has been going on for years elsewhere and is well understood, there is little need of giving it an exhaustive examination here. It is not essentially different from other regulative work. As summarized by Mr. Kennedy, the work done in regulating railroads has consisted in improving the freight service, especially at Buffalo, where a branch traffic bureau has been established; in recording all late passenger trains and forcing the railroads to give more and better service; in examining roadbeds, tracks, and equipment, and ordering improvements where needed; in preventing forest fires in the Adirondacks by making the railroads use oil-burning locomotives in that region; in publishing rates, especially rate changes; and in refusing permission to make new grade-crossings. It is interesting to note that the law requires. that tariff schedules shall be as nearly like those required by federal law as possible, and that the commission has agreed with the commissions of Ohio and Pennsylvania on uniform boiler requirements. In this way, some objectionable features of state regulation have been avoided. So Grade-crossings demand special attention. A law of 1897 pledged the State to pay one-fourth of the expense of eliminating grade-crossings.81 The municipalities were to pay one-fourth, the railroads one-half. From 1897 to 1907 no great advance had been made in carrying out the intent of the law. In 1907 the administration of this statute was put into the hands of the Kennedy, Forum (Nov., 1912), vol. 47, p. 588. 5th Annual Report (1911), vol. 1, p. 9. The Public Service Commissions Law, revision of 1912, §28; 4th Annual Report (1910), vol. 1, p. 81. Laws of 1897, chap. 754. 1st Annual Report (1907), vol. 1, pp. 103-14. commissions, and the Second District Commission has since. tested some new safety appliances, temporarily protected some old crossings, removed others, while at the same time it has effectually prevented the making of new grade-crossings. When the commission was given jurisdiction over telephone and telegraph companies in 1910,83 it immediately asked for information from all those then listed on the tax rolls to ascertain which ones properly came under its control, for by law only those telephone companies having property worth $10,000 or more used in the public service can be regulated by the commission.84 It found ten telegraph companies; but only 135 of the 1,106 telephone companies listed seemed to come within the phrase of the law.85 By just a little investigation the commission unearthed a great deal of discrimination in telephone rates,86 but it was handicapped in the abolition of these by a section of the law validating existing contracts.87 However, it proceeded with its investigations, especially in New York City, where the interborough tolls were the cause of much complaint. June 1, 1911, the commission ordered a reduction of the inter-borough rate from ten to five cents, a reduction which "affects more than thirty million messages annually".88 The commission continues to investigate central offices and to correct all complaints possible concerning service, and has apparently only begun its work in this field. Gas and electric corporations are kept under constant surveillance and changes in service and rates are frequently ordered.89 Two interesting phases of this work are the attitude of the commission toward competition, and the regulation of municipally owned plants. The law does not prohibit competition, and the commission has found a good emergency weapon in this fact. To be sure, competition is very expensive in the end for the users of the service, but when a company already in the field wholly Laws of 1910, chap. 673. $Revision of 1912, §2, paragraphs 17 and 19. See, for this whole matter, 4th Annual Report (1910), vol. 1, pp. 89-98. 86 For example, in New York City, 31,000 of 337,000 users of the service were under old contracts, involving an annual discrimination of $284,000. 87This section has since been amended, Laws of 1911, chap. 124. 88 Kennedy. Forum (Nov., 1912), vol. 47, p. 590. Specific illustrations of this and similar statements may be found in the annual reports, usually in vol. 1, where orders of all kinds are classified and printed as appendices to the text of the reports. refuses to give satisfactory service, a new, competing company seems to be the only solution of the problem. In the case of the Niagara Falls Lighting Company,90 permission was asked by the applicant to compete with the established company in the city of Niagara Falls, but the application was denied. In this case the commission reviewed its previous decisions, in several of which competition had been allowed for the reason that the existing companies had failed and continued to fail to give proper service. Under such circumstances the commission held competition advisable. But in the case under consideration, as in others, the existing company was already giving reasonably good service and was willing to make needed improvements. Therefore the commission favored monopoly in this and similar cases. It held that competition is always wasteful and never permanent, and the burden was on the applicant to prove that competition in any particular case was justifiable. In the matter of controlling municipal plants, the commission has been firm in insisting on better accounts. Municipal plants were found to be especially weak in this matter, with the result that the actual cost of the service was never known. In this work the commission really acts within a narrow field as a state départment of municipal efficiency. The conservative stand taken by the commission in its control of accounts has brought it some reproach from at least one student.91 It has insisted upon improved accounts, such as will show depreciation items and replacement charges properly entered. But it has not been radical in its ideas or drastic in its orders, reflecting thus the conservatism of the State. Volume 2 of the 1908 report is entirely given over to uniform systems of accounts for the various utilities regulated, and the commission has since prepared similar accounts for telephone and telegraph companies.92 Capitalization has received special attention from the commission, particularly new capitalization.93 Every application is care Reports of Decisions, vol. 2, pp. 116-26. Decided July 1, 1909. E. H. Downey, Regulation of Urban Utilities in Iowa, p. 97. hardly gives the New York commissions sufficient credit for their work. much more impressed by the Wisconsin Railroad Commission and the obtained. Mr. Downey He has been results it has Work on uniform telephone accounts was begun in 1910; 4th Annual Report (1910), vol. 1, p. 97. Downey, pp. 97-98; Kennedy, pp. 9-10. Old capitalization has also been examined with an eye to relieving it of water. fully examined and tested in the light of the provisions of the law which specify the few purposes for which stocks and bonds may be issued. The commission feels that rates can not be made and kept just and reasonable while stock is being watered. Up to the end of 1910, three hundred and eleven permits had been granted, authorizing over four hundred millions in new capitalization, mostly to railroads.94 A considerable number of applications had also been denied.95 Reorganizations, too, are now controlled by the commission, this being a power given the commission in 1912.96 In concluding this discussion, it must be said that the commission has been fairly conservative, and wisely and fortunately so. It has never taken any new position without being wholly sure of its ground; but when it has taken a step it has been able to stand firm. It has not made general rate reductions; it has not adopted the idea of physical valuations as the only basis for rate-making; it has not destroyed. The result is satisfaction with its work on the part of both the people and the corporations. IV. GENERAL RESULTS OF COMMISSION The jurisdictions of the two New York Public Service Commissions are essentially different. One is trying to solve the public service problems of what will soon be the greatest city on earth; under its jurisdiction are a small number of very large gas, electric, and rapid transit companies-all municipal utilities. The other has under its supervision a great number of small local utilities, a considerable number of which are municipally owned. The former has no control over telephone and telegraph companies, and almost none over railroads and other common carriers. The latter combines the functions of local utilities control with the task of supervising railroads and the state-wide communication services. Yet despite marked differences in jurisdiction, the commissions have both had part in the production of certain results of very great importance. 44th Annual Report (1910), vol. 1, pp. 98-102. See the heading "Capitalization" in the Reports of Decisions, vol. 1, 1910; vol. 2, 1911. Most denials of such applications are reported as formal cases. DeLaws of 1912, chap. 289. The practical objects for which the commissions were created have been in large part attained. Service has been improved, prices have in many cases been reduced, stock-watering has been prevented, avoidable accidents have been reduced in number. The service corporations no longer invade the individual's right to life, liberty, and property as before. Nevertheless this work has just begun, and it can not yet be said that all men are wholly satisfied with the conservative attitude of the commissions. The New York commissions are both great research laboratories, and they are gathering continually exact information about the history, financial status, and management of the various corporations under control. Expert assistants are constantly improving methods of operation and management for the utilities. This information is published and distributed to all who are interested. The public is being educated and the corporations are being taught greater efficiency, and these two results are truly of great value, though they go almost unnoticed. Competition between two gas companies or rapid transit companies in the same city always produces poor service and high rates. Such competition is destructive. Public service commissions are able to enforce a new kind of competition which is constructive and makes for efficiency. By keeping constant watch of every company under control and by publishing detailed reports of all, together with comparative tables, the New York commissions are forcing corporations to improve service, to check waste, and even to reduce prices. A new type of manager is beginning to appear: one who knows that profits are assured when the public is well served and pleased, and who, therefore, is striving ever to improve the service and even to lower prices., Uniform accounts, frequent reports, and published comparisons are bringing about a rivalry for efficiency between utilities separated by half the state, and this is a sort of constructive competition whose aim is not so much high profits as efficient service. Accompanying these results there has been the birth of a new attitude of the public toward the corporations, and of the corporations toward the public. The intense animosity of the public to utilities corporations has somewhat declined, and amicable relations are becoming more and more a reality.97 The corporations Cf. Maltbie, p. 179. |