such securities, under a franchise ordinance properly drawn, partake largely of the character of municipal bonds, which indeed they resemble in fundamentals and ends. The issue of securities was therefore to be as jealously guarded as an issue of municipal bonds, and overcapitalization, the prolific source of so much evil, was to be prevented. The enterprise had become as stable as any human institution can be, and with the limited risk there was to be applied the familiar principle of limited profit. The principle was recognized in Cleveland, where the return fixed as reasonable was 6 per cent, which is but little more than municipal bonds pay. And when this principle is established, municipal ownership almost automatically follows; investors used to large speculative profits, are ready to sell out to the municipality; thus, by indirection, democracy comes into her own.
It was easy enough to fix most of the elements of this return; the accountants could do that, in their intricate discussions of car-miles and curves and straight lines of depreciation and points of saturation in traffic, and all that, but the tremendous difficulty was to determine just what the investment was and what was a reasonable return on that investment.
It is this pass to which all such negotiations, conducted in sincerity, come at last; it is this on which the whole question hinges, it is this that might as well be done first as last, namely, to evaluate the property of the company. It is necessary not only to get at the investment and the return thereon, but
