146

THE  A  B  C  OF  TAXATION

as  a  whole,  keen,  adroit,  and  sensitive  to  every  change
in  the  industrial  world,  would  turn  to  with  their
magnificent  forces  and  abilities  and  work  with  the
commission  instead  of  against  it.”  Skill  and  enterprise, ­
  and  public  exigency,  instead  of  selfishness  and
greed,  would  provide  the  initiative  for  legitimate
extension  and  development.
The  Public:  Its  concern  is  to  reap  from  its  own
business,  delegated  to  private  hands,  a  fair  return,
whether  it  be  by  lower  rates  or  higher  taxation.  The
public  utilities  commission,  composed  of  men  of  good
judgment  and  incorruptible  honesty,  its  functions  being
supervisory  rather  than  managerial,  will  fix  upon  a  fair
capitalisation,  and  will  determine  when  and  what  gross
reduction  in  current  or  accumulated  earnings  the
administration  should  proceed  to  effect  through  the
reduction  of  specific  rates.  By  the  municipalisation
of  the  franchise  the  main  motive  for  “stock  watering
and  corporation  wrecking”  or  for  “underpaid  or  overworked ­
  employees  or  false  economies  ”  will  be
destroyed.  Whatever  “rebates,”  “stock  watering,”
and  “corporation  wrecking"  survive  the  assumption
of  the  franchise  by  taxation,  the  commission  will
prevent  under  statute.  The  value  of  the  franchise  will
be  gradually  absorbed  through  reduction  of  rates,
leaving,  however,  a  substantial  margin  as  the  best
possible  index  and  basis  for  taxation  and  regulation.
This  marginal  surplus  would  serve  the  purpose  of
equalising  conditions  from  year  to  year,  bridging  over
lean  financial  periods,  and  thus  securing  more  fully  the
stability  of  the  fair  profits  to  capital  invested.
To  sum  up,  it  is  my  contention  that,  with  railways
privately  owned,  publicly  regulated,  and  taxed  approxi ­