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  commission ­
  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