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SCIENCE 



[N. S. Vol. XXXVII. No. 955 



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 busi- 

 ness justifies it. For want of a public- 

 service commission in the District of Co- 

 lumbia, the Interstate Commerce Commis- 

 sion has recently been exercising the func- 

 tions of such a commission with respect to 

 the street railways, and with good effect. 

 There is great need of a full-fledged public- 

 service commission in the district, and it is 

 hoped that Congress in its wisdom will 

 respond to public sentiment and establish 

 such a commission." 



How infinitely 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 commis- 

 sions. Except, perhaps, in the largest 

 cities, it seems much better to have strong 

 state commissions, well equipped with 

 technical assistants, than to have separate 

 commissions for each city. And with the 

 cooperation of other states and the federal 

 government, any state commission can es- 

 tablish its work with only a fraction of the 

 effort and expense required by those states 

 that have pioneered the movement.^" 



Turning now to the great industrial and 

 financial corporations popularly called 

 trusts, the question suggests itself whether 

 it is possible for the government to regu- 

 late them in a manner similar to the reg-u- 

 lation of the natural monopolies we have 



" A public-utility commission for the District of 

 Columbia has been established by Congress since 

 this address' was delivered. 



"Writing in 1908, Professor Ely said: "States 

 having commissions empowered to enforce uniform 

 accounting wiU constitute great economic labora- 

 tories in this connection during the next quarter 

 of a century." 



been discussing, so that full publicity may 

 be secured, the rights of the public may be 

 conserved, and at the same time the rank 

 and file of the stockholders will be pro- 

 tected from the vultures that often hover 

 over the executive offices of such concerns. 

 One can not say that it will be done as 

 easily, but it is coming to be believed that 

 the general method adopted in the regula- 

 tion of public utilities is the right one, 

 namely, less dependence on law and the 

 courts, and more dependence on engineers, 

 statisticians and business experts; that the 

 government should prescribe affirmative 

 duties for the giant corporations, and not 

 merely negative ones; that a constructive 

 policy that would benefit both the business 

 concerns and the public they serve should 

 be sought, rather than a retrograde policy 

 that is no benefit to the business and does 

 no good to the public. If such regulation 

 could be realized, and consolidations and 

 promotions in business could be limited to 

 such as would benefit both the public and 

 the stockholders, and not merely big finan- 

 ciers and promoters, it would be a notable 

 achievement in our political as well as 

 economic history. It would assist mightily 

 in the peaceful settlement of industrial 

 disputes and in the bringing about of a 

 better understanding between capital and 

 labor. 



It is just as reasonable to expect the 

 government to perform this function of 

 regulation of monopolies as to expect it to 

 adjust international disputes by arbitra- 

 tion rather than by war. It is not social- 

 istic, but rather the reverse, for it is the 

 alternative of state ownership. In Ger- 

 many the cities are great business con- 

 cerns operated by business men for the 

 benefit of the people, and as such they are 

 models for the whole world. They own 

 and operate most of the public utilities 

 themselves, and do it well, and hence the 

 necessity of public regulation is there less 



