REGULATION  OF  PUBLIC  UTILITIES  137

I

The  great  lack  to-day  is  not  so  much  in  the  general
wisdom  and  honest  intention  of  the  people  or  their
representatives  as  it  is  a  lack  of  understanding  of  certain
general  principles  of  simple  application;  the  longer
this  understanding  is  deferred  the  harder  the  problem
becomes.
The  President  of  Princeton  says  also:
We  have,  in  fact,  turned  from  legal  regulation  to  executive
regulation.  We  have  turned  from  law  to  personal  power.
But  what  we  are  here  considering  is  legal  regulation,
executive  regulation  under  law.  What  is  needed  is  a
Legislature  to  make  wise  general  regulative  laws,  courts
to  interpret  them,  and  a  competent  executive  agency
to  administer  them.
Regulation  by  Rates,  or  by  Taxation,  or  by  Both
Granting  the  probable  establishment  of  the  commission ­
  method,  the  endeavour  of  this  chapter  is  to  bring
to  the  front,  in  the  railroad  and  other  public  utility
problems,  the  factor  of  taxation;  not  taxation  for
revenue;  not  taxation  of  future  franchises  or  their
capitalised  earnings;  but  taxation  of  franchises  already
granted  and  exploited  and  capitalised,  together  with
earnings  already  capitalised  —  taxation  of  present
franchise  earnings  to  bring  them  into  the  public
treasury,  instead  of  leaving  them  in  private  hands;
not  the  taxation  of  the  earnings  of  industry,  but  the
appropriation  by  taxation  of  the  dividends  that  are
earned  by  the  public;  to  the  end  that  the  profit  of
"operation”  shall  go  to  skill  and  enterprise,  and  the
profits  of  the  franchise  shall  go  to  the  people,  o
If  there  is  one  problem,  National  and  state,  that