and reorganizations, must be forever beyond their control. Comparisons with other cities could hardly be made, since each city commission would have its own methods and standards. Local commissions can not keep out of politics, nor can they, finally, educate the electorate or conduct researches as a state commission can.

3. SEVERAL OBJECTIONS CONSIDERED

Other arguments against state public service commissions have been advanced. Those who oppose socialism object to such commissions as socialistic. The socialist, on the other hand, avers that regulatory commissions have been created to delay the coming of his ideal system, and he fears the attempt may be successful. No doubt there is some truth in each assertion. Property may to-day be divided roughly as follows: (1) private property; (2) private properly used in the public service; and (3) public property. The second class, as such, is clearly anomalous and unstable. It is neither wholly private nor wholly public. Yet public service commissions are founded on the idea that this class will continue as a distinct kind of property; otherwise commissions are only a temporary makeshift. It is vain to blind ourselves to modern socialistic tendencies. This second class of property is growing, and much of it is passing on into the third class, public property, but none is falling back. Public service commissions are, by their activities, increasing the value and keeping down the valuation of properties in this second class; and thus the way for ultimate public ownership is being smoothed. But, at the same time, the need for public ownership is being greatly minimized.118

Mr. Herbert Croly has produced an argument against the New York type of commission which deserves notice.119 The great public utilities which the state is now trying to regulate through commissions came into being as private properties, built up by the most effective of modern industrial organizations, the highly centralized private corporation. The essential condition of the creation of these great industries was the freedom given the corporations. Can we now substitute officialism for individualism,

Whether public ownership itself is socialism is a question of some nicety. See Taussig. Principles of Economics, vol. 2, pp. 454-56.

119 Herbert Croly, The Promise of American Life (1912), pp. 357-68.

divided responsibility for centralized, and continue to enjoy the benefits of the corporate form of organization? Mr. Croly argues that the New York law, giving the commissions control over rates and service, carries interference too far; that the corporations will lose their eagerness for progress, and settle back to a complacent reliance upon the state officials.

Besides overemphasizing the efficiency of the corporate form of organization, Mr. Croly seems to have overlooked certain important factors. Public service commissioners, when properly chosen, are not mere officials, but experts, and the corporations in New York quickly found that they had a great deal to learn from these experts. Moreover, the corporations are becoming more and more desirous of working in harmony with the public: they no longer insist so strongly on their private character; and they find the public service commissions a splendid go-between. As far as New York is concerned, the commissions have not interfered unnecessarily, or even more than Mr. Croly himself thinks well.120 Finally, it must be remembered, Mr. Croly was planning a somewhat ideal scheme, other parts of which have not been carried into effect. Nevertheless, his argument has consierable weight, and the type of commission he proposes was successful in the regulation of railroads and gas and electricity in Massachusetts.

4. SUGGESTIONS FOR A STATE PUBLIC SERVICE

COMMISSION LAW121

A commission's success will vary with the powers granted it. the men appointed, and the influences brought to bear upon it.122 Hardly any legal provision can be made for the last. The mem

120 Croly, p. 365. "Special instances may always exist of unnecessarily high or excessively discriminatory rates; and provisions should be made for the consideration of such cases, perhaps, by some court especially organized for the purpose. . . ."

121 The National Civic Federation's investigators have prepared with care a Model Public Utility Law which the author finds himself prevented from discussing until the whole report is published. In form, it would seem well to have the law follow the outline given in Chapter II of this paper, or that used in the California law. See Downey, pp. 86-87.

12The Massachusetts Railroad Commission (1869-) and the Board of Gas and Electric Light Commissioners (1885-) have been successful because of their membership, and rather despite, than because of, their limited powers. The New York Railroad Commission (1882-1907) would not have been much less innocuous had it had as wide powers as the present Public Service Commissions, for its members were clearly not fit men.

bers should be experts, drawn from any part of the nation, and should be appointed and be removable by the governor. Some test of fitness might well be provided, but administrative ability should also be required. In most states three commissioners are enough; financial support should be liberal.123

At the present time, and especially in the West and Middle West, no commission except one with power to enforce its orders will be acceptable, and the powers of enforcement should be made. real. However, in order that no legitimate development of business may be checked at the whim of the commission, the law should state clearly and fully the scope of the rights and duties of the corporations affected. Legislation by the commission. should be confined to a narrow field. Its executive functions would then assume relatively greater importance, and its powers of execution should, consequently, be made very broad. Rates, service, capitalization, intercorporate relations, reorganizations, accounts, and reports, should be, within the terms of the law, strictly subject to control by the commission. Thus new abuses could be prevented. For the removal of old grievances, education and publicity have proved fairly efficacious. Rules of evidence should be elastic; procedure may be left to the commission. All terms used in the law should be clearly defined.124

Finally, while the act should be complete in every detail, and the commission given considerable power, conservatism should so temper the law that the development of industry would progress unhindered. Steadiness and reasonableness have made the "weak" Massachusetts commissions strong, while too drastic, destructive action is hurting the prestige of commissions with wider powers; and the success of the New York commissions should be attributed not so much to the broad powers they possess as to the deliberate yet firm moderation with which they have gone forward.

New York has gone almost too far in the salaries it has given the commissioners. 124For instance the term "public utility". Although no serious difficulty has resulted from the loose way in which the term is used, it would be conducive to clearness to have some special meaning given it, and that meaning adhered to. A "utility" in theoretical economics is so far from being a plant used to make gas, or the corporation owning that plant, that it is astounding to learn that this one term stands, at various times, for all these things and more. In New York only seven or eight industries are sufficiently "public" to require government regulation; in some other states the number is much larger. For a lucid discussion of the term "public service" see Taussig, Principles of Economics (1912), vol. 2, pp. 110-12, 397-418. See also Downey, pp. 11-12; King, pp. 3-12; Bemis, Municipal Monopolies, pp. 426-30 (article by Professor Frank Parsons).

APPENDIX I

JURISDICTIONS OF THE TWO COMMISSIONS

EXPLANATION: local, as here used, means wholly within the district under discussion; in re means to that extent which is necessary in carrying out other powers and duties; everything means that the commission in question controls the corporation, the plant, the service, and all the activities of the corporation; the three asterisks indicate that no provision has been made, and that probably no such corporations exist.

1Continued to serve until his successor, J. Sergeant Cram, was appointed, June 9,

Succeeded to place of Charles H. Keep, April 15, 1908.