"Local Public Service Corporations"
Mr. W. J. Curtis, of the firm of Sullivan & Cromwell, New York, spoke yesterday afternoon under the auspices of the Graduate School of Business Administration on "Local Public Service Corporations."
Before taking up the subject of the day, Mr. Curtis gave a brief explanation and discussion of the recent decision in the Standard Oil case. There have been two opinions held as regards the interpretation of the Sherman Anti-Trust Act; one favoring a narrow view and declaring illegal all combinations in restraint of trade, the other holding a broader view and calling only unreasonable restraint of trade illegal. In the Northern Securities case the Supreme Court seemed to favor the first opinion, but in its latest decision it takes sides with those who would allow reasonable restraint. The decision will not cause a wholesale dissolution of holding companies and of combinations to prevent competition, but will make it necessary to try each case on its own merits and force out of existence those companies which break the anti-trust law and restrain trade unreasonably.
Taking up his regular subject, Mr. Curtis explained the practical organization and maintenance of public service corporations, using a street railway company as an illustration. The first thing to be done when preparing to organize is to make a general survey and inspection of the land, rights of ways, and laws and regulations of the locality. Then attention should be turned to the franchise, which should consider the interests of the municipality, the inhabitants, the corporation, and the investors. The city wants quick, efficient, reasonable service; the inhabitants' paramount interest is in the character of the service; the company wants freedom from the danger of unnecessary, annoying regulations; and the investors desire security. In Mr. Curtis's opinion the franchise should take the form of a perpetual, private charter.
As regards the financing of the company, the financial and practical managers should be in close relation. The company should not be forced to maintain a rate below five cents, in order that the managers may have sufficient means to run the road satisfactorily. But above all things it is absolutely essential to eliminate all politics from the public service corporations