Readings on the Relation of Government to Property and Industry

By Samuel P. Orth | Go to book overview

SOME FEATURES OF STATE REGULATION OF PUBLIC UTILITIES

BY JOHN H. ROEMER OF THE MILWAUKEE BAR, MEMBER OF THE RAILROAD COMMISSION OF WISCONSIN

(From an Address Delivered before the Wisconsin State Bar Association at Milwaukee, September 1, 1909)

This article shows the working of the Wisconsin public utilities law, during the first two years of its operation. -- EDITOR'S NOTE.

The doctrine that the public has an interest in the use of the property of a public utility employed in a public service, though resting upon the principles of the common law, was not agreeable to the managements of public service corporations when state regulation and supervision of such corporations were first proposed. Nor has there ever been a full assent to this doctrine or a frank submission to the regulatory measures adopted by the state on the part of many such corporations. The view that their undertakings, except to a limited extent in the case of common carriers, were purely private business enterprises which could be conducted upon like principles as those prevailing in other commercial pursuits, controlled the managements in the transaction of all the affairs of the corporations, whether pertaining to their private corporate functions or to those relating to their public callings. While the view thus taken has long since become obsolete, it is not at all strange that it should have been entertained when we consider the persistence of both nation and states in maintaining the economic policy of laissez-faire in the evolution of our industrial system prior to the civil war. The fundamental distinction between public callings and private callings was then generally either disregarded or not recognized. In accordance with the prevailing economic theory of the times, competition, whether active, or potential, that is, theoretically possible though practically improbable, was regarded as the efficacious means of securing to the general public adequate service at reasonable prices from individuals and corporations engaged in businesses now classified as public callings.

Even the right of the public in the use of property which was devoted to a public service by virtue of legislative authority, and which could not be so employed without such authority, was almost wholly ignored and, in fact, in certain instances, expressly denied. Thus, in 1858 the Supreme Court of New Jersey1 held that a gas company

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1
Patterson Gas Lt. Co. vs. Brady, 27 N. J. L. 248.

-344-

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