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 commis 
sion 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