THE GREEN BAG concerned, and at the same time leave sufficient inducement for the improvement and extension of such utilities and the further installation and development of similar utilities throughout the state. Whether, as was strenuously contended by the opponents to the measure, regulation has been carried so far as to frighten private capital from this field of investment, thereby arresting the improvement and development of public service, can only be determined after some experience with the law. The friends of the measure feel confident that an efficient and conservative administration of the Act will bring cer tainty and stability to the situation and will attract rather than drive away invest ment. The law is not wholly an experiment but is based upon and follows a long line of English legislation, dating as far back as 1855. which has dealt, apparently with great success, with the business of supplying gas for lighting and heating. Many of the provisions of the law have keen suggested by the Sheffield Gas Acts of 1855 and 1866. The framers of the bill have also drawn from the information and experience of the Public Franchise League of Massachusetts and from the legislation in Massachusetts and New York dealing with the same problem. The important and characteristic features of the Act are as follows: VALUATION. In the solution of the problem of adequate service at reasonable rates, two important propositions must be established: 1. The basis of calculation. 2. The rate of calcu lation. With the latter the Act does not concern itself, although in the preliminary steps it was proposed to fix by law the amount of dividends which could be earned by public service corporations. The con fused and unsatisfactory state of the law of public calling at present is due in no small measure to the very great intrinsic
difficulty in ascertaining the value of the equipment used for the public, and the absence of any uniform and satisfactory basis of calculation. What elements should be taken into consideration and what weight should be given to each element in making up the total capitalization on which the public utility company is entitled to earn dividends is a matter of much uncer tainty. The Wisconsin law has by no means removed this uncertainty. Realiz ing, however, that the first step in the solution of the problem is the fixing of some certain capitalization on which to compute the earnings and that the funda mental thing underlying capitalization is the value of the equipment or plant used in the service, the law provides that: "The Commission shall value all the property of every public utility actually used and useful for the convenience of the public." "Before the final determination of such value, the Commission shall, after notice to the public utility, hold a public hearing as to such valuation." After the valuation is fixed, the Commission shall certify the same to the public utility and municipality concerned and shall publish the same in its annual reports. The Commission is authorized to use in this work the informa tion in the possession of the State Board of Assessment, thereby securing some relation between the valuation of property for purposes of taxation and for purposes of income; and the public service corporation that urges a low valuation for one purpose will be met with the similar valuation for the other purpose. The original draft of the bill was more explicit in regard to valua tion. The Commission was required to proceed forthwith, and to complete as rapidly as possible the work of valuation. As finally passed, however, while the Com mission is still required to make valuations, it is left with greater freedom as to the time and manner. Valuations may be made, however, of any public utility, irrespective of whether complaint has been
