PRIVATE AND MUNICIPAL OWNERSHIP OF GAS WORKS, WATER WORKS, AND ELECTRIC LIGHT

AND POWER PLANTS.

During the year this bureau has been engaged in an attempt to acquire some definite data relating to the financial results, under private and public ownership respectively, of the operation of certain public utilities. The inquiry has been confined to agencies for the distribution of light and water, omitting the subject of transportation, and has consequently been directed to the various systems of water works, the gas works and the electric light and power plants established throughout the State.

In this work the bureau has been associated as collaborator with the United States Department of Labor, which is conducting an investigation parallel with this in all the other states of the Union, the report of which, when completed, will contain observations and statistics gathered from the whole country, including Illinois, corresponding with those here presented for Illinois alone.

The investigation has been undertaken in recognition of the prevailing interest manifested in the subject of municipal ownership, and with the specific purpose of bringing to light, so far as this may be done by authentic statistics of actual experience, whatever of economic advantage or disadvantage there may be in either the public or private ownership and control of this group of public works.

The bureau has no theory of ownership either to confirm or to controvert, and in this inquiry has sought simply to gather the facts, without prejudice and with the greatest possible fulness of detail, for the information of those who can not by personal inquiry obtain them. This is consequently not an attempt to demonstrate either the feasibility or futility of municipal ownership, but simply an effort to establish the relative economy of public and private management, that is, to discover which costs the community more for corresponding service, the plant operated by the municipal or the private corporation.

It has been recognized that the difficulties of such an investigation are many and great; that it is probably impossible to overcome them altogether; that the details of construction and management are complicated and diverse; and that the economic results of operation are often contingent upon terms not common to any considerable number of establishments.

Yet these considerations have not deterred the federal office nor this bureau from making the investigation. In the absence of any official data on this subject it is believed that the facts gathered by a carefully conducted inquiry will possess a material value even though they fail to answer conclusively many of the questions which naturally arise in relation to municipal monopolies. Upon this theory, that even negative results are better than none, has the investigation proceeded.

The facts in regard to each class of plants have been taken on schedules prepared by the Department of Labor for use throughout the country at large. Each schedule is the result of mature consideration and consultation with experts and is designed to develop all the elements which contribute to the profit and loss account of each plant. In order to remove the hesitation of those who naturally object to disclosing the details of private business affairs, assurances have been given that the results would be so published as to conceal the identity of the several plants, and in the following tables no plant has any other designation than its number. It is made possible, however, by specific statistics of physical condition and the various items of cost of maintenance and operation to take proper account of local advantages and disadvantages, and to comprehend the economic balance sheet as well as though the location were given. The one exception to this rule in regard to identification is in the case of the Chicago water works, the figures relating to which are so large as to make it impossible that they should refer to any other plant in the State. No objections, however, are raised by municipal authorities to the publication of their financial statements.

By preliminary investigation it was discovered that there are in Illinois 57 gas plants, all under private ownership; 236 electric light and power plants, 197 of which are under private and 39 under municipal ownership, and 165 water works plants, 35 of which are under private and 130 under municipal ownership; in brief, that 458 plants of all kinds are established in 243 of the cities and towns of the State; that the electric light plants are far more numerous than

either of the others; that water works are next in number, and that there are only one-fourth as many gas works as electric light plants. It is further observed that the gas works are all private enterprises, that one-sixth of the electric light plants and three-fourths of the water works plants are municipal.

The cities and towns in which these establishments are found are distributed throughout the State with a uniformity very nearly corresponding with the distribution of the larger towns. By grouping these according to the population given to each by the federal census of 1890, it appears that 130 towns in which public works of one kind or another are maintained, have less than 2,000 inhabitants; that 205 have less than 5,000; 16 have from 5,000 to 10,000; 15 from 10,000 to 20,000, and 7 have over 20,000 inhabitants.

With a field of this nature presented. for inquiry the agents of the bureau were sent to every quarter of the State to make personal and specific investigation of the physical condition and the books of every plant. It was very soon developed that the exercise of some discrimination as to the plants which should be scheduled was necessary to the best results, and a number of minor establishments, such, for instance, as the lighting plants operated as collateral to manufacturing and mining enterprises, and other plants whose books were impossible of analysis, and those which had less than a full year's experience were omitted from consideration. It was also found that lighting plants operated by electric street railway companies could not be made use of to advantage, and it was inevitable that some companies should distrust. the motive of the inquiry and decline to respond.

Omitting these plants which it was undesirable or impracticable to examine, the result of a five months' canvass of the State is the securing of completed schedules for 202 establishments. The proprietors of eight of them subsequently expressed some hesitation about permitting the publication of their figures in a State report, although consenting to publication in a report for the whole country in which state lines should be obliterated, and their plants are consequently dropped from the tables and omitted from consideration in this report.

For taking the information desired, three schedules have been used for each class of plants. The primary or general schedule contains all inquiries relating to the physical character and efficiency of

the plant; this form is the same for both private and public plants. For each plant there was also prepared a supplemental schedule on which to take the financial statement of the company, showing the actual results of operation; two forms of this schedule were made necessary by the differences between municipal and other establishments. A set of these schedules completely filled, for any plant, constitutes an exhaustive exhibit of all the economic factors which enter into the cost of production and distribution, supplemented by the most recent results of business management. That the proprietors of 202 of these establishments, of which 108 are owned by private corporations, should consent to make such an exhibit is creditable alike to themselves and to the agents of the bureau whosubmitted the plans of the investigation to their consideration.

The returns which are tabulated herewith were obtained from 102 cities and towns, well distributed throughout the State. Defined asto population, 28 of them have less than 2,000 inhabitants; 49 have less than 3,000 inhabitants, and 69 less than 5,000 inhabitants. Of the remainder, 12 have from 5,000 to 10,000; 14 from 10,000 to 20,000, and 7 over 20,000 inhabitants. There are 21 cities in this State which had a population in 1890 of over 10,000; this report contains. statistics from all of them, and from many of them statistics relating to the three kinds of plants.

In all there are 194 plants embraced in the following tables, of which 96 are municipal and 98 private concerns. This equal division. does not, however, obtain in the several classes, owing to the fact that there are no municipal gas works in the State and the further fact that by far the greater number of water works are owned by municipalities, while the larger number of electric light plants are owned by private corporations. As a consequence the relative number of the two latter classes are in reversed proportions, giving us 60 municipal water plants as against 13 private plants, and 27 municipal electric light plants as against 60 private plants.

There has been no selection of establishments with a view to securing returns of any given character. On the other hand the purpose and instruction has been to procure the experience of all available establishments, whether public or private, or large or small, or well or ill-managed, or prosperous or unsuccessful. The result is that the various groups here tabulated are in effect representative of the several kinds of public works as they now exist in the State.

Some show gains, some losses, and others an even balance sheet as a result of the last year's operation; the widest differences are shown in magnitude and cost of plant-in operating conditions and expenses and in prices to consumers. Indeed the ramifications of diversity are so complex as to embarass comparison at every point, and no conclusion can be safely drawn which is not based on a study of all the tables relating to each plant.

ANALYSIS OF TABLES.

There are in all 27 general tables, eight of which are devoted to the statistics of 25 gas plants; nine to the statistics of 87 electric light plants, and ten to the statistics of 82 water works plants. The period covered by these statistics is the fiscal year of each plant respectively next preceding the date of investigation. The field work was in progress during the five months, from April to September, 1898, and it must be acknowledged that as a rule the books of account and all details of record evidence were found much more exact in the offices of private companies than in municipal offices.

GAS WORKS.

Table I of the gas works series gives the date of construction and a physical description of each plant and its distributing equipment. The oldest plant was built in 1853, and the most recent in 1895. Three were built prior to 1860, five, between 1860 and 1870; nine, between 1870 and 1880; five, between 1880 and 1890,and two since 1890. Fifteen have changed ownership since their construction; the re mainder are still in the hands of original owners.

Thirteen of these establishments manufacture gas from coal alone; seven from water only, and five use both. The daily capacity of the coal-gas companies ranges from 20,000 to 150,000 cubic feet; that of the seven water-gas companies, from 35,000 to 350,000 cubic feet, with an average for all of 140,000 cubic feet; the companies which make gas by both processes have the larger plants, with daily capacities ranging from 325,000 to 792,000 cubic feet. This table also defines the character of the purifying apparatus in each plant, number and capacity of gas holders, the size and length of street mains and the number and kind of meters in use. It is observed that only three of these plants make any use of the prepayment meters.