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THE GREEN BAG

paid into the treasury of the municipality granting the same. Public service cor porations are forbidden to declare any stock, bonds, or script dividend, or divide the proceeds of any sale of any stock, bonds, or script among its stockholders. Thus ample power is now lodged in the Commission to control in the future the capitalization of public service corpora tions. What will be done with the inflated capital already outstanding, is not defin itely settled. The method prescribed for valuation seems to contemplate that some, and possibly all, of such inflation shall be taken out at the expense of the investor. COMPETITION. With the exception of the telephone ser vice, the conduct of all other utilities, as defined by the Act, is to be on a non competitive basis. If the principle of mon opoly in public service be sound, no satis factory reason can be given for the exception of the telephone. In view of the acute struggle between the Bell System and the Independent Lines for control in Wisconsin and the advantage which the former appar ently has in development, it was contended that to include the telephone in the non competitive arrangement would mean the death of the Independents. This conten tion prevailed, thus introducing into the bill a glaring inconsistency. In order to bring all public utilities under the provisions of the law, and to secure uniformity, it was at first proposed to revoke all existing franchises, and to grant in lieu thereof new franchises conditioned on the grantees being subject to the pro visions of the Act. In view of the radical nature of such a proposition and the doubt as to its constitutionality, a more moderate and, in the main, wiser provision was enacted. The granting of franchises or licenses is still left with the municipalities, subject, however, to important restrictions. All franchises in the future granted to any

public utility, as defined in the Act, are to be indeterminate, and are designated "in determinate permits," and can only be granted to Wisconsin corporations. Such permits are declared to be subject to the condition that the municipality granting the same may purchase the property of the utility at a valuation, and on terms to be fixed by the Commission. The method of securing municipal ownership and operation will be noticed presently. Existing franchises are not effected, except that they are declared to be so amended as to permit the municipality to grant an indeterminate permit for the operation of a second competing utility or to establish a municipal plant. Any public utility oper ating under an existing franchise may, by electing to abandon such franchise, and to come under the provisions of the Act, acquire an indeterminate permit. To in duce public utilities having franchises to make such an election, certain protection is given to the utility with an indeterminate franchise from competition either by the municipality or a second public utility; for example, where a company is operating under an existing franchise, the Act permits a municipality to construct its own com peting plant, or to take by condemnation proceedings an existing plant, or to grant a similar franchise to a competition company. If, however, the public utility is operating under an indeterminate permit, acquired for the first time, or acquired by abandon ing its old franchise, the municipality can not grant (except in case of telephone companies) a franchise to a second company to engage in the same business, nor construct and operate a municipal plant without first securing from the Commission a declar ation, after a public hearing of all the parties interested, that the public conven ience and necessity require a second public, utility or a municipal plant. This arrange ment secures to the company operating under an indeterminate permit, a practically exclusive indefinite franchise; for so