Richmond Palladium (Daily), Volume 37, Number 39, 20 December 1911 — Page 4
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PAGE FOUR. THE RICHMOND PALIAIUUM AND SUN-TELEGRAM, WEDNESDAY DECEMBER 20, 1911.
Tt Richmond Palladium
si Sun-Telegram-Published and owned by th PALLADIUM PRINTING CO. Issued Every Evening Except Sunday. Office Corner North th and A street Palladium and Hun-Telegram Phones Business Office, 256; News Department, 1121. RICHMOND, INDIANA H4lh O. Leeds. Belter SUBSCRIPTION TERMS In Richmond 5.00 per year On ad vance) or 10c per week. RURAL ROUTES One year, In advance Six months. In advance 1.!'' One month. In advance - Address changed as often aa deairer both new and old addresses must b given. Subscribers will please remit wltf order, which should be given for specified term; name will not be entered until payment in received. MAIL SUBSCRIPTIONS One year. In advance 'i'2!' Six months. In advance -!' One month. In advance 4B Entered at Richmond, Indiana, pos: office as second class mall matter. New Tork Representatives Payne A Young. 30-34 West 83d street, and -B Weat 12nd street, New York, N. Y. Chicago Representatives Payne 4 Young. 747-748 Manjuetto Building. Chicago. 111. Tltsn A aas,if Aft mJt A Advertisers kaa axVSXJ amsced and certified ta thn aircalation mi this Mblicatian. Tha f igaraa of cbxalatian ontaiaod in tkm Association's report ooly aro guaranteed. Asstdatioa tf American Advertisers No. 169- WhiUh.ll llsf. N. T. City FORUMOFTHE PEOPLE Articles Contributed for This Column Must Not Be in Excess of 400 Words. The Identity of All Contributors Must Be Known to the Editor. Articles Will Be Printed in the Order Received. The Richmond Palladium: Ought Richmond to municipalize 'the water plant? It would seem, from the success attained from the experiment in supplying our own light, there should be no hesitancy in enlarging our experience, by applying the same rule to supplying of water. On general principals, public utilities ought to be operated in the public interest and not in any private interest and ought, therefore to be owned by the public. Municipal ownership alone, can, and does, remove the antagonism of interest between the otfners of private interests and the public. Antagonism does exist, as has been demonstrated by the lengthy and earnest discussion, accompanied by protestation to the acceptance of a contract, based upon inflated values, embodied in the proposed plan of the Richmond City Water Works. An Inflated valuation means over capitalisation, which arises, naturally, from the desire to squeeze as much wealth as possible out of the people, and to keep the people quiet while doing it. If it was known they were making 25 to 60 per cent on their investment, a howl would go up at once, and to avoid such a catastrophe, it is best to enlarge the issue of stock, thus reducing the percentage, but not the volume of profit. That seems to be the experience of the Richmond City Water Works as they have never denied the charge of . issuing $200,000.00 of watered stock. What is the general formative experience of most private corporations operating public utilities? Just this: Secure a franchise, issue a lot of fancy engraved stock, keep enough to control its management, sell the balance, build the plant, bond it for all it is worth, reimbursing themselves what money they put into it from the amount realised from the bond sale. Increase the stock and keep adding to it as the business grows, create a .sinking fund from the plant's earnings to pay off the bonds and there ; you have a plant capable of large revenues at NO COST to its owners. 'Thanks to the easy marks of the city who are ever ready to give away the people's rights in the form of free franchises. Now perchance, if some "crank" should happen to arouse opposition by stirring things up with the end in view of obtaining an ordinance basing rates on the true valuation, the plea is made, O! but much of the stock and bonds have come into the hands of "innocent purchasers for value" thereby justifying their policy of extortion on the plea that the "innocent holders" will be cheated out of a fair return. How far these conditions will apply to the Richmond City Water Works is purely conjectural. We have every reason to believe, however, that it does not have the far reaching effect of most public service corporations, for the interest seems to bear a happy family arrange ment from grandpa down to the remotest twig of the family tree. One thing has been demonstrated beyond the shadow of a doubt, demonstrated by their reluctance to show their books, that is: The Richmond City Water Works knows, that if the people of Richmond knew one half of what they know, regarding their inflated water-logged capitalization, they would stand no more chance of renewing their contract with the city, than the city would have in buying the plant for a dollar. These conditions are not exceptions nor can they be applied as a monopoly of the Richmond City Water Works; they abound wherever private operated utilities exist. Such conditions will always prevail so long as municipalities are willing, through their representatives, to barter the people's rights for a miserable meu of pottage, or a pat on the back,
What It Is All About
About six weeks ago having traveled all the way over the continent and back again, President Taft startled his audience in Chicago by the statement that he was very doubtful of his election. Just a few days ago Chairman Lee having traveled all over Indiana and having been in correspondence for weeks with precinct committeemen of Indiana announced in Washington that he was doubtful of Mr. Taft's chances. Now the reason that the audience which listened to Mr. Taft in Chicago was startled on account of his admission, was that it could not conceive of a man remaining a candidate, using every political wile at the disposal of a chief executive to renominate himself, and then to announce absolutely his own doubt as to the chances for his own election. But though a great shout has gone up in Indiana over the fact that Chairman Lee has announced that Taft has no better chance than Mr. Taft himself admitted, we cannot for the life of us see any ground for this atonement. Nor is there any atonement.
Not a political writer on any newspaper, of what ever politics, whether progressive or reactionary, but admits to every newspaper man and politician he meets that when he comes into Indiana he is not expecting to find Taft sentiment. No politician or newspaper man that this political writer meets ever says anything to indicate Taft's popularity or unpopularity. That question has been settled long ago. Politicians in the Republican party are not anxious even to srot on the state ticket if Taft is nominated. They admit it confidentially. What is the reason, then, for all this furor?
It. is only the danglers after patronage that make a pretense of caring for Taft. And they will change their position as readily as ever a weather-vane does when some other man sits in the White House dispensing post offices. These gilded roosters whirl around as surely as a magnetic needle not to the man who is the choice of the rank and file but to the president who is in office. In all the reactionary and progressive ranks there is not a man who does not have flouting words to say for him. If the man is progressive an original Taft man in Indiana when the reactionaries were against Taft, it is impossible for him to support Taft's record; if the man is a reactionary, he has always been against Taft, but has only found good in him whenever he has disregarded his progressive pledges which have been convenient to the reactionaries in shielding themselves. Even the reactionaries have mocked Taft for pulling their chestnuts out of the fire, and he has fallen in their estimation when he did it. When we speak thus we are not talking of any but politicians. As for the rank and file they left Taft as far hack as the time of the Winona speech. The men who still cling to Taft are in the minority. They may be said to be the men who have nothing to read but reactionary newspapers, which have kept the truth from them, or else they are that part of the party which will vote for a yellow dog on their own ticket and claim that he is the "best Republican ever nominated" even as President Taft has announced that the Payne Aldrich tariff is "the best tariff ever" etc. etc. No, Taft is not popular in Indiana afid cannot be elected. The reason for all this disturbance is not that Chairman Lee told the truth which every one knows and admits. It is simply a fight for the control of the state organization and with it the control of the delegations for presidential nominee. The Old Guard are lined up ostensibly under the banner of Taft but they want the control of. the party and not Taft delegates. If it suited their purpose they would be just as eager to get uninstructed delegations but they can appeal to the men in the ranks who cling to the yellow dog idea and to the patronage-seeking fellows for help for "Taft" delegations. It is a case of dog eat dog between Taft men and "Taft" men. The Taft organization down in Washington well knows that when the time comes the "Taft" delegations in Indiana will turn out to be Fairbanks men in full blast. But the Taft organization knows that that is the only way in which there can be even a nominal Taft delegation from Indiana. We are not casting any bouquets in Mr. Lee's direction when we say that he does not stand for that sort of thing. It is simply the sort of thing.that any one in this neighborhood would have done. Called on to bolster up this deception being perpetrated in the name of the Republicans of Indiana he simply declined to do the perfunctory lying stunt the action of a "practical politician." This balked the game of getting in the reactionary delegations without a fight and then declaring that Beveridge was licked when Mr. Beveridge or no other man had made a move. Hence a riot because Mr. Lee said what everybody else knows and what the state chairman of Taft's own state has declared. It is therefore a fight in which the rank and file are again arrayed against the men whom they put out of the business in 1908. It is therefore a fight of reactionary against progressive for the control of the state machinery in the Republican party. It does not have anything to do with how many people are for Taft or against Taft. That has been settled. It is simply a fight which will be carried on until it is settled right as it has been in all the states where the people rule for the man in the ranks to get control of his own parties. If it is not easy to understand, it is because the wiles of politicians are not meant to be an open book. But it must be very plain to all that there is something more at stake than the opinion of Mr. Edwin M. Lee, chairman of the Republican state committee for Indiana.
with a "you're a good fellow," which after all, is but a nick-name for a fool. In the municipalization of public utilities, excessive rates and enormous profits for a few will no longer exist, as the idea of their operation will be changed from private profit to public service, thus eliminating the necessity of watering stock to reduce the percentage of profit, as the goal of success will be service instead of profit. What would the change from private profit to public service mean to the people of Richmond? Apart from the cheapening of the commodity, it would mean the cooperation of interest in the welfare and success of the plants In operation, and I hope, lead to the establishing of
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a merit system in our municipal gov
ernment. That such a staple article as water contributing so largely as it does, to the health and happiness of our people, should be made a source of profit to a private corporation, is, in my judgment, fundamentally wrong. I can think of profit being made from the air we breathe just as readily as I can of water. It is becoming more apparent every day, in the face of such a splendid opportunity, the city Is powerless to render to the people a solution of this problem, consistent with the assurance that we shall no longer be the victims of a vicious system of private operation of a public utility for private profit. If we must continue our relationPerfect Genns Perfect in every sense light, wholesome and delicious if made with Rumford. Its absolute purity and wholesomeness make food always the same delicious, digestible and economical.
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Rheumatism routed with just one bottle of marveloua RHEUM A. The beat thine; about this letter ia that it is true every word of it: "1 nave taken only one bottle of RHETTMA and the result is wonderful. I was in terrible shape from Rheumatism, but that is all past." Bert Higiey. 25 Grove St., Union City, Pa. Read it again, you Rheumatics, full of Uric Acid poiscn, who are going around saying Rheumatism can't be cured. Then read this one: ' I want to get a bottle of RHEUMA for my mother. My mother-in-law used it. Two bottles cured her of Rheumatism completely." Win. H. Phillips, Box 45, Hedgesville, W. Va. We could give you a hundred more if we had the space. Leo H. Fihe guarantees RHEUMA or money back. Ask Leo H. Fihe for ENGLISH MARHl'E, the greatest remedy for Indigestion and Stomach agony, 25 cents. Mailed by Rbeuma Co., Buffalo, N. Y. ship with the Richmond City Water 1 Works temporarily, subject to conditions that will justify the buying of the plant, the following conditions should be kept in mind: ; Under the constitution federal and state, the court requires that in taking over the works of a private gas or water company the city shall pay the market value of the property including the franchise, and the market value of the franchise depends on the length of its unexpired term; also on the earnings of the company, present I and prospective, so the higher the 1 rates the more the people will have to pay to get back the franchise they formerly gave for nothing. If the city intends at any time to buy the plant, they will readily see that two things will have to be considered: 1st. The unexpired term of the franchise, also 2nd Rates that are being charged at the time of the contemplated purchase will be used as a basis of value. These two conditions emphasize the necessity of a short term franchise, or one issued say in 5 year periods, with , the city retaining its option of purchase at the end of any 5 years, and with a provision, in the event of pur chase, there be no unexpired term of : the franchise even though it be issued for a longer time. The second condition, is the most important for the reason: Unless we determine the true valuation, the rates charged at the time of purchase will be based on an excessive valuation and will add to the plant's purchaseable value. Therefore one of the conditions of renewal of the franchise of the Richmond City Water Works should be, that they reduce the present alleged value of the plant to a true physical value, the same to be the basis for! computing rates; adequate to give not less than 6 or more than 8 net profits to the company after deducting from the gross earnings an amount sufficient to cover the fixed charges necessary to the efficient operation of the plant, plus a reasonable license fee to be paid to the city for the franchise value. Though the city may not now be in j "THIS DATE
DECEMBER 20TH. 1716 Thomas Gray, famous English poet, born. Died July 24, 1771. 1776 The seat of the United States government was removed to Baltimore. 1795 Leopold von Ranke, noted German historian, born. Died May 23, 1886. 1848 Louis Napoleon proclaimed President of the French Republic. 1860 South Carolina seceded from the Union. 1863 General Grant established his headquarters at Nashville. 1864 Gen. Hardee destroyed his iron-clads and navy yard and escaped from Savannah with 15,000 troops. 1871 A college for women was openned in connection with the University of Wisconsin. 1880 Electric street lighting was introduced in New York city. 1883 Cantilever bridge at Niagara Falls opened for traffic. 1890 The Toronto city council prohibited the operation of street cars on Sundays in that city.
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financial shape to buy the plant, it is essential that a true valuation be determined NOW, as the future purchase price will be based on the earnings under the new contract about to be given, and the franchise that goes with the contract. As a precatution. safeguards should be embodied in the contract against the issuing of additional stock other than that which is justified by actual improvements, and all increases in the form of unearned increments should
be excluded from consideration in I computing the plants value. The safest way, in my judgment, in exercising such authority would be in reserving the right to regulate the rates, when prima facie evidence shows that an increase of stock is not justified by additional improvements, then rates should be reduced to bring the earnings to the 8 per cent maximum fixed by the contract plus license fee to the city. Free access to the company's books should be another condition of the new contract. There is some opposition to this demand of publicity; to quote the language of some of the representatives of the Commercial club of our city, "the earnings of the company and the value, of the plant is none of the public's business," just so we get what might be considered "reasonable rates." I do not know how far these gentlemen were inspired by business connections to decry the value of publicity, suffice to say it is the "public's business," where the public supplies the franchise rights it becomes a partner in the business by virtue of that franchise and is entitled to a full knowledge of the company's affairs. We can abridge the power of corporations who are prone to charge excessive rates, by insisting on the fullest publicity of their affairs, and the necessity for such publicity is demonstrated by the enactment of the law by the 67th Indiana legislature empowering municipalities to fix the charges of water and gas companies, which is impossible without actual knowledge of the true valuation and earnings which can only be acquired by a thorough audit. I have digressed somewhat from the line of thought I started out to express, that is the advantages to be derived from public operation of public utilities, believing the suggestions I have offered may assist in the preparatory work of framing an up-to-date modern contract, also in paving the way whereby the city may secure the plant on the best possible terms. Kindly accept the suggestions in the spirit in which they are offered. Briefly what are the advantages of a municipalized plant? First It does not have to pay dividends on watered stock, or dividends on the actual investments as the plant is operated for service and not for profit. Second The expenses incidental to a private corporation, such as lawyers' fees, etc., etc., are dispensed with in a municipal operated utility. Third The interest of the people who are stock holders in a publicly operated plant, leads to, economies which would not otherwise be apparent, an increase of patronage, thereby lessening the cost of production per unit of service, the tendency to waste water would be reduced to a minimum, when the people know that the serJN HISTORY '
MONEY TO ENABLE YOU TO GET YOUR FULL LIST OF GIFTS. FOR THE CHRISTMAS DECORATIONS AND THE TREE THAT MEANS SO MUCH TO THE LITTLE FOLKS. FOR THE CHRISTMAS TURKEY. TO MEET THE HUNDRED NEEDS AND EMERGENCIES SURE TO ARISE.
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vice is a public one, the profits of which belong to them and whatever loss, through unnecessary waste, must be borne by themselves. Fourth Another advantage ia the fact that a municipality can usually borrow money at a rate of interest not exceeding 4 per cent, often at 3 per cent, whereas, as is demonstrated by the present interest paid by the Richmond City Water Works on their $250,000.00 of bonds, a private or publice service corporation is compelled to pay not less than 5 per cent and, on the authority of Supt. Dill, experienced great difficulty in disposing of them at that rate. Fifth The citizens of a city at once becomes impregnated with the desire to see. and assist in acquiring the best possible results, in other words, there is a diffusion of interest in the affairs of the city. Sixth Municipal ownership removes the corruptive infiuence that too often surrounds the members of council in cities, about to grant valuable franchise rights to public service corporations. Seventh- The municipal ownership of the water plant would lessen the cost of water if acquired at its true valuation more than one half, as is shown in our neighboring city Fort Wayne, who supplies water to their people at 9 cents per 1000 gallons as against twenty-six and six-tenth cents of the Richmond City Water Works under the present proposed plan. I am satisfied the city can acquire the plant January 1st, 1917 providing no further issue of bonds is permitted, and the important feature now is to contemplate its acquisation on that date and govern ourselves with that end in view. Yours truly, A. Bavis. 411 X. 13th St.
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