220 ROSA: REGULATION OF NATURAL MONOPOLIES 



One of the best results of the method of regulation by public 

 service commissions is the publicity it secures of the affairs of the 

 company and the confidence it establishes in the public mind in 

 the various utility companies. The suspicion and distrust which 

 Senator Root emphasized so strongly in his New York address is 

 everywhere felt toward these companies when their affairs are 

 kept secret, and especially when the service is poor and the divi- 

 dends good. Controversies arise which sometimes degenerate 

 into bitter and partisan feuds. Who can feel kindly toward the 

 maDagement of a street railway company if he is usually com- 

 pelled to ride as a strap hanger, or toward a gas company if the 

 rates are excessive or he believes that his meter races, or toward 

 any company that appears to regard its franchise as the deed to a 

 private monopoly. If the service is improved or the rates re- 

 duced as the business grows more prosperous, the people as well 

 as the stockliolders derive benefits from success. The pubhc 

 soon realizes that utilities so conducted are in effect partnerships 

 between the public and the stockholders, and are willing that the 

 latter receive increased dividends with increased prosperity if 

 the public is permitted to share the fruits of success. The slid- 

 ing scale of prices for gas is a successful example of this system, 

 but it is also realized in many cases where a sliding scale of prices 

 has not been fixed in advance. The regulation of prices by a 

 commission gives in effect a sliding scale, by which either the price 

 goes down or the quality of the service goes up, as the success of 

 the business justifies it. For want of a Public Service Com- 

 mission in the District of Columbia, the Interstate Commerce 

 Commission has recently been exercising the functions of such a 

 commission with respect to the street railways, and with good 

 effect. There is great need of a full fledged Public Service Com- 

 mission in the District, and it is hoped that Congress in its wisdom 

 will respond to public sentiment and establish such a commission. 

 How infinately better is this method of regulation than the 

 building of publicly owned utilities to compete with private plants 

 already in existence. For a state or city to say that it is impotent 

 to regulate a public utility is a confession of weakness; but there 

 is far greater difficulty in city control than in regulation by state 

 commissions. Except, perhaps, in the largest cities, it seems 



