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In reviewing orders of the commission, the Supreme Court has repeatedly declared that it will not substitute its judgment for that of an administrative board, created pursuant to an act of the legislature, as to matters within its province, and before this court will interfere with the order of the public utilities commission it must appear from a consideration of the record that the action of the commission was unlawful and unreasonable.
In 28 of these 40 Ohio cases the order of the commission was affirmed. In 12 the commission's findings were modified or reversed. The only one of these proceedings affecting an urban street railway was that of the Price Hill extension already referred to. Interurban street railway companies were involved in four cases. In one the road was compelled to continue furnishing service notwithstanding decrease in patronage; in another the interurban was permitted to abandon part of its tracks; in a third the utility, because of an existing contract fixing fares, was refused an increase though its service was crippled by cost conditions; and in the fourth, the road, having gone into the hands of receivers who discontinued the service, the Supreme Court affirmed the order of the commission, refusing to order service resumed, because of want of jurisdiction inasmuch as the road was under control of the court which had appointed the receivers. There arose more than one hard case of interurban street railroads with unexpired franchises and a rate of fare adequate before the war but become quite inadequate for even stinted service. With obvious regret the commission uniformly held the contract with the municipality fixing the fare to be an insuperable bar. The Supreme Court has affirmed such orders of the commission as not shown to be unlawful or unreasonable.
The rule has been well established by the Supreme Court of Ohio, that utilities operating under ordinances of a duly authorized municipality fixing a rate and accepted by the utility, could not get relief from the commission against that rate; while the contract continued it was protected by the constitution; the utility was bound and the commission without power to act.'
The Supreme Court of the United States recently called such an ordinance a “bad bargain” from which equity could not
relieve the utility and referred to similar view expressed by the Supreme Court of Ohio.“
There is now pending in the District Court of the United States, at Trenton, New Jersey, a case where the Public Service Railway Company of New Jersey seeks to enjoin the Utility Commission of that state from enforcing a seven cent fare fixed by the commission on the ground that it is so low as to result in confiscation of plaintiff's property. A temporary order was issued by Judge Rellstab on the 9th of the present month authorizing an increased fare of eight cents; the next day Judge Rellstab rescinded the order raising fare; and ordered notice to the commission for a hearing on August 18, before three judges. On the 18th a rule was allowed against the Utility Commission to show cause why it should not be enjoined from enforcing the present seven cent fare. On account of the absence of one of the three judges hearing was adjourned to September 13. If the railway company had by acceptance of franchise or other sort of municipal grant making a contract for a definite time not yet expired, the case should present some interesting questions in view of the decision of the Supreme Court in the Columbus Railway case 249 U. S. 399.
In Ohio where power to afford such remedy is denied to the commission, application by the utility to the municipality ought to bring just and reasonable relief. This is intended to be accomplished by some form of " service at cost” plan, now in operation in four Ohio cities.
In their annual report for the year 1913, the commissioners said that they regarded it as the function of the commissioners to see to it that public service corporations should rest upon sound financial basis and thereafter render adequate service for a reasonable and fair rate of return.
The 1914 report shows complete, or in progress, valuations of nine municipal utilities throughout the state. The commission reported its opinion that this valuation of utility properties was of great importance, whether for rate fixing or otherwise, and added:
The Commission is pleased to report that the requirements of the appraisal order were met by the utilities in a splendid spirit of cooperation.
10 249 U. S. 399.
In 1911, it was provided by law that for the purpose of maintaining the Department of Public Service Commission of Ohio, a sum of $75,000 each year should be apportioned and assessed upon the railroads and public utilities in the state in proportion to the intrastate gross earnings of such railroads and utilities.
By Act of the General Assembly approved February 9, 1920, the amount to be so assessed upon railroads and utilities was increased from $75,000 to $200,000 to cover salaries, traveling expenses and other overhead expenses, including the exercise of its police supervision.
Last April an act was passed by the General Assembly creating new administrative departments and redistributing administrative functions among them; among other departments was created the Department of Commerce; it was provided that the Public Utilities of Ohio should be a part of the Department of Commerce for administrative purposes in certains respects, not, however, affecting the commission's general powers and functions, but relating to the matter of employees, their appointment and removal; the former employees of the commission being by the terms of the act transferred to the Department of Commerce, subject to appointment and removal by the governor.
The Public Utilities Commission of Ohio is trying to do its full and impartial duty. Interurban electric roads and steam railroads, gas and electric companies, and telephone companies come often before it for relief or for protection; urban street railways have been, for obvious reasons, comparative strangers at its bar.
Time may possibly tell the people of Ohio that commissioners ought themselves to be first class experts instead of relying on employment of expert assistance. That commissions are doing necessary and beneficial work is no longer open for discussion as a theory; they have arrived. They are in the full tide of successful experiment. The problem now concerns functioning, safeguarding the standard of personnel and making it axiomatic that public utilities must have fair field, if no favor. Government by commission should be judged by results.
“For forms of government let fools contest,
TRANSIT TENDENCIES IN NEW YORK CITY.
OF NEW YORK. The New York City transit situation, with its many, varied and complicated problems presents, in perhaps the most extreme form, the crying need for the adoption and application of public utility policies that are in full accord with changed conditions.
Transit has long been a political foot-ball, and that condition will continue while old sores remain and there is continual friction between the traction companies and the public. The attempt is now being made in New York City to develop a comprehensive and thoroughgoing plan of readjustment that will remove the old sores and causes of friction and permit transit to be viewed in its true light as an economic proposition.
The general features of the New York situation are well known. Systems of transit lines aggregating 1800 miles in single track mileage, with outstanding securities approximating at par a billion dollars are either in, or on the verge of receiverships. In other parts of the country the financial difficulties of traction companies growing out of the World War have been met partially or completely and in general the situations are not acute. In New York City no relief has been obtained by the transit companies except through a cutting down of the number of free transfer points largely through the separation of lines under receiverships.si
In addition to the inflation produced by the World War, the New York conditions are exceptional because of the element of a tremendous suddenly added competition due to carrying out the 1913 program, which involved the more than doubling of the rapid transit lines within a period of five years. Through the abolition of free transfers a large part of the public is paying an increased fare and the congestion is becoming progressively worse. On most of the lines conditions in the rush hours are a physical and moral menace.
The condition of the companies as viewed by the investing public may perhaps most readily be shown by contrasting the market prices of certain securities in 1917 and 1921, which is done in the following table:
The question naturally occurs: If most of the cities in the country have relieved their traction situations by increases in fares, why has not New York City done so? To those who have examined the situation superficially a sufficient answer has been found in the hostility of the city administration. The city administration has been vigorously and bitterly opposing an increased fare. It has done nothing to relieve the situation except in so far as minor and isolated bus operation has served a few thousand people and a few localities. But the city administration would not have persisted in this course, nor would it have been sustained by public opinion, if the differences and difficulties have not gone far deeper than a mere matter of an increased rate of fare. The scandals connected with traction reorganization and speculation have probably been more flagrant in New York than in any other city in the country. The traffic congestion and poor service have been such as to cause real suffering. The past intolerance of public opinion on the part of railroad operators and their interference in politics and legislation have not been forgotten. This is the background of the transit fight in New York City and because of it a very large part of the community has looked upon the company requests for rate increases with suspicion