system of accounts is that the books shall be kept in such a way that after the physical value of a plant has once been ascertained the valuation will be kept up practically in a systematic way, so that the commission, or any other authority, may see from year to year exactly what the financial condition of any particular plant is. The system of uniform accounts applies both to private plants and to municipal plants. This feature of the law is especially noteworthy in that it) at last makes it possible to establish a comparable basis for public and private plants. Investigations made thus far by the commission show that not only does great variety exist among the private plants, but also among the public or municipal plants, and that the accounts of the municipal plants are, in many instances only partial accounts, not showing all the operations and expenses of such plants. While this is generally true, it can best be shown from the water works investigations. In eight Wisconsin cities of over five thousand population, the municipal water works accounts show that there is no credit given for public service, four of these showing a deficit for the year, which in three cases would very likely disappear and show a surplus, if the plant were credited with revenues which justly belonged to it. Out of fifty-six municipal water plants in cities under five thousand population, thirty-three reported a deficit for the last fiscal year. Of this total number twenty-five cities did not credit the plant with any earnings for public service and of these twenty-five city plants, twenty-two showed a deficit. Twenty-eight municipal water plants showed no general expense whatever, such service being furnished by other city employees. Under the proper separation of accounts and the adoption of a uniform system, an entirely different situation, just to the city and to the plant management, would be revealed.

As previously suggested, the managements of the private companies and municipal plants establish rates in the first

Rates

instance. Such rates are subject to revision by the commission, either on complaint or on the initiative of the commission. The commission has been endeavoring to elaborate the principles upon which just and reasonable rates should be based for all the different

utilities, and in a considerable number of instances schedules have been prescribed in which these principles are discussed. Many more schedules are still under consideration, and the commission hopes that in the not distant future all the utilities operating within the state will make their rates in accordance with uniform principles representing the latest and best which scientific methods and scientific thought can contribute.

Service

With respect to service, the commission has put into effect a series of rules regulating gas and electric service. Other rules and regulations applicable to the other utilities may be adopted in the future. The rules relating to gas and electric service prescribe certain standards for gas pressure, quality of the gas, voltage, care of the lamps, lamp renewal, records of complaints, disturbance in the service, etc. A full and complete administration of this feature of the commission's work will ultimately require a considerable inspectional staff. This the commission does not feel justified in employing at this particular time, but it has decided to employ a few competent inspectors who shall do thoroughly intensive work, the result of which can be placed before the legislature and the legislature may then determine whether or not it is in the interest of the citizens of Wisconsin to have the commission proceed with the more elaborate inspectional work covering the state as a whole. The results of these inspections show the widest variations in the character of the service and many conspicouus failures to provide anything like what may be characterized as adequate service. In illustration of this, reference may be made to the above mentioned decision of the Commission in the matter of standards for gas and electric service in the state of Wisconsin in which tables are presented which show the results of the preliminary tests.

All orders of the commission are subject to appeal. Thus far, only three of the decisions under the railroad commission law have been taken into court, and no utilities decisions. Such appeal is taken first to the circuit court and then to the supreme court. The law provides that the record before the commission shall be the record before the court, and if new

Appeal to
Courts

testimony should be introduced before the court, through such introduction and determination of the fact that it is new testimony, a case is thrown automatically back before the commission for revision of the original determination on the basis of the new testimony.

One of the three railroad cases, above referred to was finally determined by the Supreme Court of Wisconsin in an epochmaking decision handed down in June 1908. This decision discusses the order of the commission under review; it analyzes and interprets the salient provisions of the statute creating the commission; it meets in the broadest and most progressive manner the arguments relating to constitutional limitations and the allegations regarding the exercise of legislative power by the commission; it brings into clear perspective the rights of the companies as well as the rights of the public; and in substance it declares that even though on the given facts the court might decide a case differently from what the commission does, if no errors of law have been committed, and the question is one regarding which reasonable and competent men might differ, the court will not set aside the order of the commission. In other words, the court may feel that the commission should have rendered an opposite decision, yet, within the limits of the law and discretion of the commission, it will sustain that decision. So far as I know this decision stands practically alone in this country in the breadth of the views expressed with respect to the regulation of public utilities and the extent of the support it gives to the administrative authority charged with that regulation. There were two concurring and one dissenting opinion. Generally speaking, the information collected by the commission and the service performed by it and its staff have

The Commis

sion as a

Clearing House

tended to make the office of the commission a clearing house between the public and private plants and municipalities. While the law expressly retains to the municipalities power to control the various kinds and character of service rendered and to be rendered, the power to prescribe conditions under which streets are to be used, extensions made, etc., an appeal lies in all such cases to the commission whether a muni

cipal or private plant is involved. It has been the endeavor of the commission to cooperate with the local authorities and the companies along all these lines. The law has been in effect only a little more than a year and a half, but even now there exists a steady increase in the lines of communication between the local managements of private and municipal plants and city and village authorities and the commission. The information which has been collected and compiled by the commission is placed at the disposition of all citizens of the state in the most convenient form. The use of this information by local authorities and citizens has, in a number of instances, obviated the necessity of making complaints. In other instances, it has led to changes in the plant equipment and service. Various lines of cooperation between the commission and the municipalities are discussed in a paper before the Wisconsin Municipal League in September, 1908, to which reference may here be made.

In addition to reasonable rates and reasonably adequate service, among the results which the operation of the law has already shown and which the future may be expected to bring into evidence still more, may be mentioned the following:

Utilities Out of Politics

1. The Wisconsin legislation has taken the utilities, as well as the railroads, out of politics. I do not believe that many citizens can be found in the State of Wisconsin who would seriously claim that in either the primary campaign or in the campaign preceding the present November elections, the utilities as such had entered into politics. All students of municipal affairs well know that in this elimination of politics from the management of the utilities we have removed one of the greatest and most persistent sources of corruption and bad government.

2. The utilities law tends to eliminate feuds between the citizens and the managements of public and private plants. The law assures to all communities good service at reasonable rates. This is placed within the reach of all impartially, whether the commission advances or lowers the rate. The basis of its findings is published in every instance. These published facts should suffice to convince, and I believe does convince the average citizen of the reasonableness and justice of the decision, if it is

reasonable and just, and whether he likes it or not, he must abide by that decision. In this respect, cases affecting utilities are quite different from the most of the cases affecting railroads. In the case of utilities the controversy frequently degenerates into a bitter and partisan feud, affecting the entire population, which blinds both sides to a proper comprehension of the facts and to a sense of justice. Proceedings before the Commission tend to clarify and educate public opinion.

3. The public utilities law raises the standard of morality through the eradication of the evil of discrimination, and the

protection of a reasonable rate. To those who Raises Level of Morality are quite familiar with the past evils of discrimination in railway rates, the extent of the discriminations in the rates and service of utilities may be almost beyond comprehension. The whole State of Wisconsin was literally streaked and plastered with discrimination in the rates of utilities, and in all the rest of the country where the extent of such discriminations have not yet been determined, as they have been in Wisconsin, it is quite probable that discriminations similar in character and extent likewise exist. All rates, rules and regulations in effect in the state are on file with the commission and these are the only rates and regulations which can be lawfully enforced and collected. Free and reduced rate service has been absolutely prohibited. Thousands of individuals had been receiving free and reduced rate service, and the eradication of all such rates cannot help but serve as a moral tonic and raise the level of public and private morality within the state as a whole. The following table illustrates discriminations in the telephone business existing shortly before the commission's order formally abrogating all such rates went into effect. For thirtytwo of the reporting companies, 8 out of every 100 subscribers received free or reduced rate service. The process of equalization of rates had been going on for over a year. Consequently the actual extent of the unjust discriminations was doubtless very much greater at the time of the enactment of the law. In the following table the numbers given under each of the rates represent the number of subscribers enjoing the respective discriminatory rates. I have every reason to believe that in every