tunities at once for three teamsters to draw water and for another one to obtain a refreshing draught for himself.

Attached to the side of the 12-inch standard near the sidewalk grade is a bowl for dogs. This is kept supplied with fresh water by the drip of the bubbler overhead, the water being caught in a tunnel set underneath the strainer and conveyed through a small pipe into the dog bowl. The waste from the faucets and dog bowl is discharged into the interior of the 12-inch standard, which has a cement bottom, at which point an opening allows the waste to escape into a drain pipe leading to the sewer. Under the bubbler is fastened a step at a convenient height for children to reach the water from that fixture.

All the materials used in the construction of this watering station are, with the exception of the castings for the strainer, dog bowl and step, such as are found in every water works shop or supply house. The cost of the outfit made up in a water works shop and ready to set in position will be found to be about $20. To this should be added about as much more for the cost of installing it, with supply and drainage connections, thus providing a pretty complete watering combination at a very moderate outlay of money.

The efficiency of this device as a horse

watering proposition will depend largely on the willingness of teamsters to use it. No watering device is so pleasing to the lazy driver as the common open trough, where he can sit at leisure enjoying his pipe while his tired and perhaps overheated horse drinks from the flowing bowl to his heart's content, and quite possibly to his stomach's detriment. There is a probability that the danger of over-watering horses on hot days, causing colic and indigestion, is largely averted by the pail system, and possibly as much distress is saved the animals in this way as is caused by the failure of drivers to offer them water when it is needed.

It would seem that the city or town has done its part when it willingly furnishes an abundance of water for the animals without cost, and it should not be expected that in addition it should furnish means whereby a lazy teamster may do his duty without any exertion on his own part.

But observation shows that the watering stations in Somerville are largely patronized and are appreciated by teamsters, and we may hope that the number of drivers who will not exert themselves sufficiently to attend to the needs of the animals in their charge at these convenient stations is very small, and that the class will soon become obsolete as the new habit is acquired.

the service which is properly demanded of them.

Public utility service, as an essential public function, ought not to be dependent upon a throw of the dice by the manipulators of stocks and bonds. It ought not to furnish an opportunity for any man or set of men to "get rich." It ought to furnish to multitudes of people of comparatively small means a safe and conservative investment for their savings. I am strongly of the conviction that it is disgraceful to a city to have its public service corporations in receivers' hands-almost as disgraceful as it would be for the city to default on its own bonds.

The elimination of the speculator and the stock-jobber from the utility field and the establishment of utility investments upon a safe, conservative, non-speculative basis, is to my mind a fundamental condition precedent to good service, permanently low rates and adequate public control. If capital is made secure and is guaranteed a steady return, it demands nothing more than the ordinary interest rate. Under these circumstances, we should not have to pay premiums to reward capital for a risk undertaken in embarking upon public utility enterprises. There would be no risk. The only special reward offered would naturally go to the men who actually operate the property; for when security and a sure return have overcome the characteristic timidity of money, we have then only to seek a means for enlisting the motive of men for efficiency and economy in the operation of the plant. This cannot be done by lavishing unasked rewards upon capital as such.

Our friends, the public service corporations, will welcome with open arms the proposition that security of the investment is the first and most fundamental plank in any rational program of public utility regulation and development. They are willing to make peace with us on these terms alone. I have said, however, that in my judgment, cities ought not to make good past losses on investments that were frankly on a speculative basis when they were made. I suppose that we are bound to allow for a considerable taint of human nature in the characters of those who own and operate public utilities, even in the "soulless corporations." I suppose that we must frankly con

cede to them the right to pursue the policy of keeping all they have and getting all they can. If we offer them security and do not ask for payment, naturally they will take our gift. They have been used to receiving gifts from the cities and are not ashamed to be public beneficiaries. We find them at this moment engaged with their eminent counsel and engineers in attempting to prove to the satisfaction of the court that whenever a public utility has lost money in the operation of its plant, its property is thereby made much more valuable, either in a rate case or in a purchase case. But these same eminent counsel and engineers are employed to prove also that where a utility has made lots of money, it is likewise thereby made much more valuable, either in a rate case or in a purchase case. The companies ask the cities to pay them a premium equally for their losses or their profits. This is the old game of "Heads I win, tails you lose." It seems incredible that this double play should be made successfully before the regulating authorities of the country. And yet in many cases it is being done. When the companies have lost, they protest vociferously that they have been mere public agents, spending money for the benefit of the city and its citizens. But when they have won, they forget this agency theory entirely and fall back upon the entrenchments of private property and contractual rights established in the federal constitution. Then they have been doing business strictly on their own account, and the city will interfere at its peril.

Aside from the fact that it is logically preposterous for the cities to make good the speculative losses of the past, such a course would be financially disastrous. It would mean the acceptance and guaranty of the over-capitalization which has brought many utilities into bankruptcy under private management. When we acquire utilities or recognize their capital value in rate regulation or franchise contracts at a figure double or treble the value of the physical property, and pay for them in bonds or impose upon the rate payers the perpetual burden of supporting this inflated valuation, we do not secure municipal ownership or public control. Instead, we strengthen and make secure the control already exercised by the owners of public utilities. Mere title is of small importance. The mere fact that

rates are fixed by a public service commission, by ordinance or by a contract, has a very limited significance. If we have bound ourselves to pay more than the property is worth and have not paid it, we may be much worse off than if we had not promised. If we fix rates on the basis of an inflated valuation, our position may be much weaker than if we had not fixed rates at all.

If future investments in public utilities are to be non-speculative, someone besides the investors must carry the risk. If we frankly adopt the theory of public agency. which is clearly indicated in the title "public service corporations," there can hardly be any question as to the shoulders upon which the burden of the risk should fall. It is for the service of the public that utilities are established and maintained. More and more, as time goes on, the public nature of these services becomes apparent and imperative. Interruption of service cannot be tolerated. Under the modern organization of society, individuals cannot render utility services for themselves, except at such enormous cost as would make modern city life impossible. Therefore, as seems clear to me, the public should carry the risk of the investment. But, if the cities are to assume the risks of the future in order to give stability to capital, and thereby to secure low rates and dependable service, it is clear that the control of the investment by public authority must be much more minute and far-reaching than it has been in the past.

(2) Public Utilities as Money-Earning Enterprises

In my judgment, public utilities should not be regarded as a legitimate source of profit to be used for the relief of general taxation.

Compensation for franchise grants, and special taxes or license fees imposed upon public service corporations should not be encouraged, unless the proceeds of such compensation or taxes are to be used in paying for the property.

Every individual public utility should be made to render a clear account of itself, and, as a general rule, should be self-supporting.

Public utility services should be rendered as nearly at cost as practicable, except that the rates should include a sufficient contri

bution to retire the investment within a definite period of time.

Public utilities should receive credit for all the service rendered by them to the city and its various departments, but only under unusual conditions should the city assume to subsidize a public utility service out of the proceeds of taxation or otherwise.

It is not inconceivable that the time may come when public utility services will be furnished free, as elevator service is, but, for the present at least, in view of the habits of the people and the financial limitations of the cities, each public utility should continue to be operated on the basis of charging those who use it adequate fees for the service rendered. On the other hand, it seems unfair and unstatesmanlike to attempt to levy a special tax upon the patrons of any particular utility. Possibly the practice of taxing property devoted to the use of public utilities the same as other property held by private individuals, may be justified; but except in those cases where taxation is used as a weapon to secure control, it seems that at least the utility property located within street limits should not be taxed. I should be willing to exempt from ordinary as well. as special taxation all property actually devoted to public use in the rendering of utility service, under adequate control, but I hesitate to advocate, at the present time, so radical a proposal. I would not, however, advocate the relief of public utility property from the burdens of taxation, and plenty of it, if such relief is to be merely a special privilege to be reflected in increased private profits.

While each of the public utilities should in the main be self-supporting and independent, there is a certain community of public interest among them. Conditions may arise, therefore, under which the rule I have laid down should be modified to the extent of allowing us to take easily earned profits from a strong utility to wipe out the easily incurred deficits of a weak one.

I have said that the rates and charges should include enough to maintain a sinking fund for the retirement of the investment. This requires explanation and defense. It anticipates in a measure our discussion of ultimate municipal ownership. I do not mean that the patrons of a public utility should contribute a sufficient sum to the earnings to enable a public service corpora

It seems

tion to pay off its bonds and still retain full title to the property. I mean that under public ownership-or, under private ownership, as a means of ultimate public ownership-the consumers should be required to pay for the plant and give it to the city. It is often urged that this policy would impose an unreasonable hardship upon a single generation of public utility patrons. It might also be urged that the patrons of a public utility represent a class and therefore should not be required to buy a great property and turn it over without charge to the community as a whole. These objections have certain apparent weight. clear to me, however, that the amortization plan will save a considerable portion of its own cost by making the investment doubly secure and thus reducing the rate of charge for capital under either private or public ownership. Moreover, we have experienced so many disasters and are on the brink of so many more as a result of the reckless financiering of the past, both as to public improvements and as to privately owned public utilities, that we should adopt every possible measure to get these enterprises upon a conservative financial basis. While a number of utilities at the present time seem very well established, all of them have been largely transformed within a generation, and we have no absolute assurance that the investments in any of them will not become obsolete within a single generation. If the public is to assume the risk of obsolescence, it will be a safe and highly reasonable policy to meet obsolescence in advance. Then if the utility continues to be useful, both the consumers as such and the city at large will enjoy a distinct advantage. If, on the other hand, the utility or the property now used by it becomes obsolete, we shall avoid the unhappy condition of still being in debt for property that has disappeared. Where a city is able to enter upon municipal ownership at once and take care of the sinking fund by means of taxes, I have no objection to that course, but I feel that it is a great deal better to require the consumers in one generation to pay for a public utility plant, in addition to maintaining it, than it would be not to have it paid for at all.

Water works and lighting plants are so essential to the city in the performance of its governmental functions that where necessary a city may reasonably contribute

out of taxes a very considerable proportion of the income necessary to make such utilities self-sustaining. This contribution is in reality only a payment for services rendered and should not be regarded as a subsidy. New York City has gone a step further and has put its credit and its taxing power behind a great rapid transit enterprise in order to secure for its citizens a high standard of widely extended service at the five-cent standard rate of fare. Philadelphia is now talking of assuming a similar contingent liability in the case of the local transit lines. I do not wish to be understood as condemning this idea, but I will say emphatically that in my opinion a city ought not to enter upon the policy of subsidizing public utilities until it has absolutely eliminated the speculative element in them so far as the private investment is concerned.

(3) Ultimate Municipal Ownership

In my opinion, cities should not assume that public utilities are to remain permanently as private investments under private operation. On the contrary, they should assume that all the well-established utilities will sooner or later be publicly owned, private capital being entirely excluded from the public streets except as it is lent to the city.

In their franchise grants, and in all contracts affecting rates or granting privileges, the cities should establish the option to take over the utilities either at pleasure or at reasonable fixed intervals.

Wherever possible, the cities should go still further, and without more delay definitely set in motion the machinery necessary to compel the gradual withdrawal of private capital from the public streets and the gradual acquisition of the utility plants by the cities as public property.

This brings us squarely to a consideration of the theory of municipal ownership. I call specific attention to the fact that municipal ownership of the fixtures in the streets presents no serious obstacle to the operation of public utilities by larger units. It is apparent that the development of interurban utilities, the extension of utility service to rural regions and the grouping of a number of cities in relation to a single source of supply, often present serious obstacles in the way of separate operation by or for