THE UTILITIES BUREAU BY FELIX FRANKFURTER, Law School, Harvard University. Mr. Chairman and Gentlemen: I have been asked to elaborate the obvious. There is one factor in all this problem that we can all agree upon, and it is a vital one frequently overlooked. It is just this: that there is not an identity of interest between the utilities and the community which the utility serves. The interests are conflicting, not identical; there is, however, a need of composing or adjusting these different interests. From that follow several necessary implications. The way to compose different interests, the way to reconcile conflicting interests, is, according to the theory of Anglo-Saxon law, a balanced representation of those interests. In order to have a balanced representation there must be full possession of the facts on each side necesssary to the decision of each case. Up to date, gentlemen, the opposing interests have not been well balanced. There is concentration of ability on one side but lack of concentration of ability on the other. Concentration of ability and intelligence on the part of the utilities, but lack of concentration of ability on the part of the community. The reason is plain. The jurisdiction of our municipalities must stop at the limits of the city line. The interests of the municipalities, however, extend beyond the city line. There must therefore be devised some machinery outside of the local structure to meet that gap between need and power. Recognizing that difficulty, Mayor Blankenburg and his associates have proposed and suggested the formation of the Utilities Bureau. The Bureau thus suggested is to serve as a way out of the difficulties in which several municipalities find themselves today. I will take a few of the many examples. The city of New York is about to attempt to secure a reduction in the telephone charges in the city of New York. The telephone company has been through that conflict in other cities, and is well equipped with the results of such litigation as to costs and valuation, while the city of New York has not those facts. In order to get them, it must spend an amount of money and time out of all proportion to the need of the situation. The city of Boston is recontracting its relation with the Edison Electric Company. There is a stall, there is a block, in the whole situation, because the company insists upon a price of $87.50 per light a year, and the Mayor of Boston thinks that is fair, but several city associations and organizations insist, and Mr. Cooke, Director of Public Works of the city of Philadelphia agrees with them, that the necessary light shall be secured at a maximum of $70 a year. Isn't it absurd to think that the Mayor of Boston should be in a conflict with the Director of Public Works of Philadelphia, as to the present-day fair value for electric light per year? Surely these are facts that are demonstrable in this stage of the art, upon authoritative finding of an authoritative body. Therefore the function of the Utilities Bureau in the first place is to get the facts, in the second place to spread the facts, and in the third place to use these facts to further efforts of the various municipalities, in fights that occur from time to time, either in securing necessary legislation, or in securing necessary regulation. In other words, the Utilities Bureau is a device, a modern device, of administration to meet a very practical situation. It is a device to use organized intelligence in the management of one of the most important phases of city affairs. As such I commend it to you. REPORT OF THE COMMITTEE ON RECOMMENDATIONS We congratulate the cities and people of America upon the candor and fearlessness with which their representatives have in this Conference faced the problem of the relation of the public to public utilities. The Conference has been helpful in its interchange of opinion and experience, and especially in its development of the idea of the community of interest among the cities. With that made plain, we can now proceed with a program of inter-city helpfulness which must be the permanent outcome for good from the Conference. We recommend: That no general conclusion be formulated upon the abstract question of municipal ownership, but rather we express our judgment to be that municipalities should be given, in all instances, the power to municipalize public utilities, the expediency of its exercise being at any time and place, and with regard to any particular utility, a matter for local determination. That we make no general determination as between State Board and Local or Home-rule regulation of public service corporations; that we do, however, declare that the franchise-making power should in all cases be local; that municipally owned utilities should be subject to local control only; that in large cities local regulation is plainly to be preferred; and that, in all cases, the principles of homerule should be preserved by at least leaving it to the people of a city, of whatever size, to determine whether they desire to act for themselves or to call in a State Board, if one exists, either to regulate or to aid the local authorities in regulating privately owned local utilities. That we endorse the idea of the establishment of the Utilities Bureau, as a nation-wide inter-city agency for bringing the combined ability and experience of all our cities to the service of each city which may face a public utility problem. Through it, we meet the combination of private interests with a combination of public interests, and to the specialized experts which private interests thus mass in defence of one another, we oppose the skill, experience, and resources of the united cities of the country. We recommend: That the trustees of the Utilities Bureau proceed to its further organization, outlining a plan by which its support may be assured and its services made available. In this connection, we suggest, for the consideration of the trustees, that an office be provided, records kept, experts be employed, and that cities, which can legally do so, contribute on some equitable basis to the expense of the Bureau, in excess of its earnings, when in the service of cities actually using its facilities in the solutions of particular problems. We vote our hearty recognition of the public service performed by Mayor Blankenburg in calling this Conference; to Mayors Mitchel, Harrison, Shroyer and Baker, for their sympathetic assistance to him; our appreciation of the gracious hospitality of the city of Philadelphia, and our thanks to the American Academy of Political and Social Science. Unanimously adopted Saturday, November 14, 1914. The following members of the Conference served on the Committee on Recommendations: Hon. Newton D. Baker, Mayor of Cleveland, Chairman. Hon. H. C' Hocken, Mayor of Toronto. Hon. T. C. Thompson, Mayor of Chattanooga. Hon. Frederick W. Donnelly, Mayor of Trenton. Hon. John M. Eshleman, President, Railroad Commission of California. Hon. Milo R. Maltbie, New York Public Service Commission, 1st district. Hon. Edward D. O'Brien, Director of Utilities, Seattle. Mr. Theodore F. Thieme, Citizens' League of Indiana, Fort Wayne. OPEN DISCUSSION MR. F. C. HENDERSCHOTT, New York Edison Company, New York City: I am glad to have the opportunity to speak. I am a private citizen; I do not own any stock in any utility corporation, but about two years ago it was my good fortune to inaugurate a movement through which corporations are training their employes. I believe the function of a government is to govern and regulate, and not to conduct business. I have felt during the last two days, as I have attended your sessions, that you have not been quite fair to the man who is a director in the big corporations; you have not been quite fair to that element in the directory which is honorable and square, and which means to do the right things. I refer to those men that you would not hesitate to go to, and who would be the first men that you would go to if a proposition was up which involved the future of your city. You have run a little bit riot on one side of the proposition. There are in the United States today over eighty of the great corporations, with a combined capital of $3,000,000,000, with employes in excess of 1,000,000, that are training their employes at their own expense to render a better and more careful grade of service. When you speak of getting better service from employes, who are under municipal government or the United States Government, just kindly take the time to refer to the recent reports of the Postmaster General, and some others, and find out what the possibilities are of getting a higher grade of service from political employes than you can get from employes of private corporations. Of course, you have one expediency left; you can go to Washington, introduce a bill, and change human nature, but you won't get a higher grade of service from people whose principal effort is to get their job and get under civil service rules than you will from people who have to render an account day by day to hold their jobs and be promoted. There isn't any question but what the corporations have done wrong. We all know it. The Sherman law was a dead letter for years, but as the gentleman who has just preceded me said, you will have no trouble in getting all you are entitled to from a cor |