in addition, they specify the way in which the funds secured shall be spent, and have power to follow the funds in the course of their expenditure and see that they are actually applied to the purposes enumerated. The commissions even prescribe how the bond discount shall be handled—that is, whether it shall be amortized out of earnings or may be provided for by the sale of new securities.

As a result of these elaborate and detailed powers the commission have such control over the utilities within their jurisdiction that it is practically impossible for the owners of public utility plants to operate them except for the good of the public, or, in fact, do anything but render service in return for a fair profit.

CONCLUSION

It would seem from the foregoing argument that your committee must reach the conclusion that intercorporate stock-holding companies have an unquestioned economic value in the public utility field, and that through them the great development of our public utilities in this country has been made possible. To check this development by Federal legislation, which might conflict with State regulation, would work a great hardship on both the public and the companies as well. The exception asked for is in the interest of all, and if inserted in the bill will remove all doubt as to the policy of Congress and will further the great progress which has been made in this field in the interest of those necessities of the twentieth century-light, heat, power, and traction.

Dated May 11, 1914.
Respectfully submitted.

BARBER, WATSON & GIBBONEY,

165 Broadway, New York. STUART G. GIBBONEY, of Counsel.

Representing Bertrom, Griscom & Co., of New York and Philadelphia, interested in the United Gas & Electric Corporation, operating public utilities in the following States: Connecticut, Pennsylvania, Indiana, Texas, Louisiana, New York, Kansas, Illinois, and Colorado.

Also interested in the American Cities Co., operating public utilities in Alabama, Louisiana, Tennessee, Arkansas, and Texas.

BERNARD FLEXNER,

RALPH D. STEVENSON,

112 West Adams Street, Chicago, Ill.

Representing Middle West Utilities Co., which operates in 315 cities

in Illinois, Indiana, Kentucky, Oklahoma, Missouri, Michigan.

New York, Vermont, New Hampshire, Maine, Wisconsin, and
Nebraska.

H. ALEXANDER SMITH,

DANIEL W. KNOWLTON,
GEORGE B. HATCH,

Colorado Springs, Colo.

Representing Wm. P. Bonbright & Co. (Inc.), New York, interested in public utilities operating in the following States: Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Michigan, Minnesota, Missouri, Montana, New Hampshire, New York, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia and Wisconsin..

PARTNERSHIP BETWEEN MUNICIPALITY AND PUBLIC UTILITY CORPORATION 1

1

The ordinance adopted by the City Council of Kansas City, Mo., signed by the Mayor, accepted by the company, and on July 7 voted by the people, forms a pamphlet of about 60 pages. Some of the leading provisions we have condensed as follows:

Merger. The company (duly organized for the purpose) will acquire all the property, franchises and privileges in Missouri owned by the Metropolitan St. Ry. Co., Central Electric Ry. Co. and the Kansas City Elevated Ry. Co., and all the property of said Kansas City & Westport Belt Ry. Co., free and clear of all liens except judgments for injuries. At the same time all contracts between the city and said other companies and all claims thereunder, except as herein otherwise expressly stated, are annulled.

Term of Franchise.-Thirty years from vote on ordinance by the people.

Organization. The aggregate amount of outstanding mortgage indebtedness and capital stock of the company shall at no time exceed the value of its property, wherever situated, exclusive of franchise value under this ordinance. The company shall upon demand deliver to the city one share of stock to qualify each person designated by the city as its representative on the board. The stock of such company shall, pending the acquisition of the title as aforesaid, be deposited with U. S. Judge William C. Hook, to be held for the benefit of the parties entitled thereto under a plan of reorganization to be hereafter prepared or in case reorganization cannot be effected, then for the benefit of those who pay for the stock. Such plan of reorganization must be in harmony with this ordinance and must be approved by Judge Hook or his successor in office. Of the eleven directors, Kansas City, Mo., shall select five, who at the outset will be William T. Kemper, John H. Wiles, Davis M. Pinkerton, Frank C. Niles and John W. Wagner, to serve for five, four, three, two and one years respectively. The city may by agreement with Kansas City, Kan., give to the latter the right to name not more than two of said five city directors.

Books. The City Comptroller, or accountants authorized by him, under the direction of the Mayor or of the city directors, shall have the right at all reasonable times to examine all the books, vouchers, etc., and there shall also be an annual audit for the year ending May

'From The Commercial and Financial Chronicle, July 18, 1914.

31 and a formal written report by public accountants selected by company and City Comptroller.

Board of Control.-Will consist at outset of P. J. Kealy for the company and Robert P. Woods for the city, with salaries of not less than $6,000 nor over $10,000; any difference between to be determined by an arbiter to be selected by the judges of the Kansas City Court of Appeals. Said board of control shall, with the aid of engineers, clerks, etc., (1) supervise the routing, stopping and schedules of cars; (2) require the operation of sufficient cars; (3) supervise construction, reconstruction, equipment, etc.; (4) properly classify and charge all expenditures; (5) supervise the bookkeeping; (6) file semi-annually complete statement of all receipts and disbursements, and of the condition of the capital and other accounts, etc.

Fares. The fares, until and unless reduced as in this ordinance provided, shall be five cents for each passenger over twelve years of age and two and one-half cents for each passenger of eight to twelve years, over the entire system within the city. Universal transfers free over all parts of the city, and also over all parts of the system in Kansas within the limits of Rosedale and Kansas City, Kan., and intermediate points, so long as the company shall operate therein.

Rehabilitation-Immediate Extensions and Additions.-As soon as the 12th Street viaduct is completed, the company shall electrify all parts of the system not then electrified. The company shall proceed immediately to put its entire street railway and equipment in firstclass condition and complete the work within three years, expending $1,500,000 or so much thereof as may be necessary, adding also for each of the three years twenty-five new cars and five miles of track as extensions (shown in the ordinance).

The city shall own and be charged with the cost of the following named portions of said lines, viz.: Broadway from Southwest Boulevard to 24th Street, and thence across the Union Station Plaza or along 24th Street to Main Street and along Main Street to 19th Street. Also a further $250,000 shall be used at once to build such other extensions as the board of control may determine.

Future Extensions.-The city at any time after three years may require the company to construct extensions as follows: (a) any four miles of track a year not manifestly unneeded; (b) such additional extensions, reasonably necessary, that will pay not less than six per cent. per annum over and above the expense of operating and maintaining.

Rights to Other Companies.-The city shall have the right to authorize one or more street railway companies to use the tracks of the company for six consecutive blocks or less, also over the Main and

Delaware, 10th Street, 3d Street and Cherry Street loops and the Allen Avenue viaduct.

The company shall pay to each existing interurban line for the use of interurban cars while on the company's tracks, a sum equaling 15 per cent. of the amount received by it from each through passenger at its regular city rate.

Express Matter.-The company may carry U. S. mail and also light packages or parcels.

Paving. Company must pave for eighteen inches beyond each outer rail-on parkways for thirty inches.

Street Cleaning, etc.-The company shall sweep, keep clean and free from snow and ice and sprinkle or oil that portion of the streets which it is required to pave and keep in repair, the city to furnish the water free.

Capital Value. The capital value of all of the property in Missouri is hereby fixed at $25,648,806, plus the cost of all additions, extensions and betterments made after May 31, 1913, properly chargeable to capital account. The amount named takes into consideration the value of all existing property in Missouri on May 31, 1913, together with the value of the earnings for the fixed period of existing contracts with the city, as well as the total moneys expended in building up said properties, said sum being a compromise between company and city of their respective calculations.

The company agrees to procure such new money as, together with such portions of the surplus as by this ordinance may be used to pay for extensions and additions to property in Missouri, will provide the following sums of money with which to pay for additions and extensions to be made in accordance with this ordinance, to wit, yearly:

1914-1918 1919-1923

1924-1928

$650,000 $725,000 $775,000

1929-1933 1934-1938 1939-1943 $825,000 $875,000 $925,000

Such new money shall be added to and become a part of the capital value, and if the net earnings, in the aggregate, exceed or are less than 35 per cent. of the gross receipts in any year, then the amount so to be annually expended shall be correspondingly increased or diminished.

There has been filed in the City Clerk's office a reconcilement dated September 6, 1913, of the appraisals of Bion J. Arnold and L. R. Ash (V. 66, p. 553), wherein it is agreed that the depreciated physical value of all property in Missouri and Kansas, May 31, 1912, was $22,500,000, 84 per cent. thereof being in Missouri and 16 per cent. in Kansas. There has also been filed a statement showing that between May 31, 1912, and May 31, 1913, the receivers added to prop