REGULATION OF PUBLIC UTILITIES 139 
The sensible question at once suggests itself: If these 
constituent parts can be separated, why not treat them 
separately? Why, in order to control the public 
agency, is it necessary to assume control over the private 
agency? Why not, through taxation, assume gradually 
the public’s right to the franchise, and let improvement 
and operation remain in private hands? Or, if we are 
not quite sure that it is wise to take over both, why not 
take the franchise fir^t, and observe the effect? And 
even if we are persuaded that it is wise to take both, 
why not take them over in the natural order, one at a 
time — the franchise first? How better can the 
municipality learn to “run” its own utilities than 
by first learning to regulate them? 
The all important preparatory step must be to 
separate as distinctly as possible regulative functions 
from administrative functions, so that the com 
mission may not meddle with administration further 
than to set such limits, not fixed by statute, as 
bound the public’s right. 
The following tentative classification is offered: 
REGULATIVE 
Audit 
Capitalisation of earnings 
Capitalisation of franchises 
Exploitation of every kind 
Inspection 
Reduction of earnings 
Rate of taxation 
Rebates 
Standard of equipment 
Stock control of salaries 
Stock watering 
Taxation of the franchise 
Valuation of franchises 
Valuation of property 
ADMINISTRATIVE 
Absorptions 
Common use of tracks 
Rate Making 
Pooling 
Connections 
Extensions 
Mergers 
Strikes 
Wages