.) led by the
economic difficulties to withhold a charter from a second company, but
it may be corruptly influenced by the company already established. The
knowledge of the opposition to be encountered in getting a franchise
must keep competitors out, even tho monopoly prices are maintained.
In view of these several features, which are so closely related that
they form a common character, more or less fully shared by various
industries, and especially in view of the necessity for the formal
granting to them of peculiar privileges in the form of a public
franchise, the public, in order to protect the general interest, is
forced to undertake an exceptional control of these industries.
Sec. 9. #Various policies toward local public service industries#.
Several courses are open to the public, acting in its political
capacity, to retain those monopolistic advantages for the general
welfare. (a) It may do nothing, trusting vainly to competition to
regulate the rate, or consciously leaving the result to be worked out
by the monopoly principle; this is what in most cases has been done in
the past in America. (b) It may attempt, in granting the franchise,
to fix near cost the charge for the service or product, so that the
franchise will be worth little as private property. (c) It may leave
the rate to be fixed by the monopoly principle, but charge for the
franchise so much that the value of the monopoly is appropriated into
the public treasury. (d) It may have public officials carry on the
business, either selling the product at cost or making monopoly
profits that go into the public treasury. Various combinations of
these plans are followed in practice, the most common plan being the
fixing of maximum rates which, with improved methods, generally become
ineffective. It is difficult to fix a uniform rate that is equitable,
because conditions change, and, further, because a uniform rate must
be applied to all parts of the town, altho the cost of service varies
greatly. It is difficult because of the limited number of competent
bidders, to sell the franchise for what it is worth. There remains the
policy of public ownership to secure the profits of monopoly to the
public, either directly or in a diffused manner. There is no doubt
that the general trend of municipal policy everywhere is toward public
ownership of this type of local public service industries.
Sec. 10. #State ownership of various kinds#. The movement toward publi
|