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should be made, to determine how the property should be disposed of, if it should be found desirable to wind up the affairs of the corpora- tion. Without such a provision, if the company should go into liqui- dation, the final proceeds would go to the old stockholders. But the plan contemplates no return to them, after they shall have received the face of their stock and dividends equivalent to 8 per cent, on their capital until it is returned. The proceeds from liquidation should go to some public cause. 1
4. Finally, and most important, perhaps, is the provision that service shall be rendered at actual cost, after these returns shall have been made to the stockholders. It is not to be supposed that a company organized on this basis will charge unreasonable rates up to the time that the obligation to the stockholders is fully discharged; but the full benefits to the public are secured only after that has been done. The gas trust has already saved to the consumers about $10,000,000; but it will become more completely a public servant after the remain- ing payments shall have been made to stockholders. An industry which comes under the law of increasing returns and practically every one except the natural-gas industry does will make much larger profits, and thus be able to pay off the stock obligations and to reduce the cost of production more rapidly. It is possible, however, that it may sometimes be found advantageous to pay back the face of the stock more slowly, thereby making possible a more immediate reduction in the cost to the consumer.
There may, indeed, be cases in which it will seem more desirable to turn the profits of the enterprise to some other public purpose, instead of lowering consumers' costs. The objections to taxing the franchises, or even the plants, of these public agencies have already been stated ; but there may be instances where a real public need is supplied by the industry, and yet where the immediate consumers are a class which may well be taxed. For example, if the telephone service of Indianapolis is organized on this plan, the company which, of course, will here mean the consumers will probably pay to the city $5,000 for the first 5,000 instruments and $2 per instrument for all above that number, objections can be made to this plan only when the telephone ceases to be in any sense a luxury. Again, it may seem desir-
1 Since the above was written the articles of the proposed telephone company have been drawn up. These provide for the application of the proceeds of possible liquidation to public purposes.
