that its gas supply was unsatisfactory to itself and to its customers; but it contended that, in view of the conditions under which the plant must be operated, little or no improvement could be made. No important advance has for many years been made in the manufacture of this kind of gas. Demand for gas in this company's territory is probably too small to justify the Board in requiring the company to rebuild its plant for the purpose of supplying either coal or water gas, even if the Board had authority so to do. The village is so far distant from other communities having a gas supply as to make it impracticable, at present, at least, for the company to purchase its gas elsewhere, although relief by this means may in time be found practicable. This oil gas compares unfavorably in so many respects with the other kinds of illuminating gas with which the public is most familiar that it is by no means certain that an entirely satisfactory supply can be given, even with the best equipment and most careful operation.

The mixture of a certain percentage of air with gas like this is not unusual, and, when properly controlled, has a tendency to secure more complete combustion of the gas and minimize the amount of smoke given out. The Board made a careful study of the apparatus of the company and the method of manufacture which it employed. As a result of this, numerous suggestions were made to the company for specific alterations of its equipment and changes in its manipulation. The company recognized the value and practicability of these suggestions, and gave the Board satisfactory assurance that it would make the changes as proposed both in its plant and in its method of operation.

After the hearing upon these petitions the gas business in Stoughton, like the supply of electricity, passed into the hands of the Edison Electric Illuminating Company of Brockton, so that the gas supply has the advantage of a stronger financial backing and greater technical skill than ever before. It is plainly the duty of the Brockton company, and the Board has reason to believe that it intends, to supply as good gas as is practicable with a plant of this character, and to remedy promptly and as far as possible recognized defects in the service. As a

result of all the facts to which reference has been made, the Board was of the opinion that the changes in the plant and methods to which the company is committed will remove such causes of complaint about quality as are not too fundamental to be corrected by any order which the Board can make; and that, until conditions shall be materially changed, there seemed to be no occasion for further recommendation as to price or quality.

Upon these petitions the Board adopted the following:

Voted, That, in view of the considerations set forth at length in the Board's decision, no further action be taken. (April 2.)

NEWBURYPORT PETITION.

This was a complaint in writing, under section 34 of chapter 121 of the Revised Laws, by the mayor of the city of Newburyport of the prices charged for gas and electricity supplied by the Newburyport Gas and Electric Company.

After due notice the public hearing thereon required by law was held in Newburyport, at which the mayor and the city solicitor appeared in behalf of the complainant, and the company was represented by its counsel and its treasurer.

This company was chartered in 1850 to supply gas in Newburyport. In 1889 it was duly authorized to engage in the electric business, and its name was changed. It supplies gas in Newburyport and electricity in Newburyport and Newbury. Its price for gas was $1.60 a thousand cubic feet, with a discount of 20 cents for prompt payment, or $1.40 net, — a price adopted by the company on Dec. 1, 1904, upon the recommendation of this Board after a public hearing. Its prices for electricity were: for commercial lighting, 20 cents a kilowatt hour, with a discount of 25 per cent. for prompt payment; for power, 10 cents, with discounts from 5 to 65 per cent., varying according to the size of the monthly bill; and for street lights, operated upon a moonlight schedule to 1.15 A.M., $73.50 for arcs and $30 for incandescents, per year. There were certain minimum monthly charges for both light and power about which no question was raised. When the Board recommended a reduction in

the price of gas, in 1904, no complaint was made of the price for electricity, and the prices cited above were then in force.

The present management of the company has been in control for about eight years. During that period the company erected a new electric station equipped with modern machinery, and both the gas and electric plants were greatly extended and improved. The output of gas nearly doubled, and while a similar comparison, for lack of data, cannot be made of electricity sold, the income therefrom more than doubled. The company had on June 30, 1910, a gas plant of a book value of $158,707.36, an electric plant of a book value of $199,453.18 and other assets valued at $35,081.54, making total assets of $393,242.08, against which there were outstanding direct liabilities of $52,179.65 and capital stock of $285,000. During the twenty-five years for which the company had made returns to the Board it had never paid a dividend of less than 5 per cent., and its average dividend had been 62 per cent. During the two years prior to the decision it paid 8 per cent. No charges to depreciation had been made under the present management, but the plant had been kept in good operating condition and repair, and a surplus had been accumulated which had been invested, for the most part, in additions to plant.

The territory supplied shows little if any increase in population in recent years, and this fact may tend to limit the growth of the company's business and its ability to make reductions in price. The reduction in price made in the Board's previous decision manifestly proved advantageous to the growth of the company's business, and brought no substantial reduction in its total income. This result would seem to support the conclusion that a policy based on low prices is a more permanent foundation for growth and profits than high prices with a smaller output for the same investment. The Board believed, after a careful consideration of the company's affairs, that it should make the reductions hereinafter recommended for both gas and electricity, and that in so doing it would continue to receive a fair return upon the value of that property which it is reasonably and actively employing for the public convenience.

In accordance with the practice common throughout the State,

it is the custom of this company to make a discount from its gross rate to a net price for prompt payment of its monthly bills. The purpose of this practice and its only justification is that it enables the company to make prompt collection of its accounts and to conduct its affairs with greater economy and efficiency. It appeared, however, that the difference between the gross and net prices for electricity was much greater relatively than in the prices for gas. Since in the latter case the difference made has proven ample to accomplish the main purpose of the arrangement, the company may well afford to lessen the amount of its electric discount by a lowering of the gross price charged.

At the hearing there was some criticism of the difference in the prices charged for electricity, and considerable discussion of certain of these which were alleged to be discriminatory. In the present development of the electrical business, especially in cities of the size of Newburyport, it seems unlikely that electricity can be sold for light at prices which will be attractive to those who desire to use it for power; and the prices which the public are willing to pay for the latter use seem to be largely determined by the cost of other available forms of power. This company has a very considerable investment, made primarily for the purpose of supplying the community with light. If employed for this purpose alone, the daily use of the investment would be brief and the cost per unit of electricity sold correspondingly high; but the sale of electricity for power almost invariably increases the volume of the output without necessarily increasing the investment, thereby reducing the average cost per unit sold, and so making possible a lower maximum price. Because of such considerations, and because such increased efficiency in the use of the investment should lead to reductions in the maximum net price, the Board has been reluctant to interfere with certain differentials in price, especially those applying to power. In this course it has sought rather to benefit the many who must pay the maximum price, than the few in whose interest differentials are apparently made. These propositions indicate that the maximum net price for electricity cannot be determined solely with reference to the average cost per unit of all the electricity which a company may supply. It

was the Board's purpose in the reduction recommended to realize for the company's lighting customers a share in the benefit accruing from this increased use of its investment, and to indicate in this discussion the policy which should hereafter be pursued. During the last fiscal year the company's output for power exceeded its output for lighting, its power load was nearly onehalf of its yearly peak, and it received for this power scarcely more per unit than the bare cost of producing the electricity itself, without any substantial provision for expenses of distribution, management, taxes or investment return. Companies sometimes make disproportionate concessions to those who can supply themselves in other ways; and the effort to build up a business and improve operating conditions may afford a justification for such course. But no added burden on this account should be imposed upon its other customers, especially those who must pay the maximum price.

Respecting the question of discriminations, it appeared that the company was supplying electricity to the proprietors of the News Publishing Company for both light and power under a contract for five years from Feb. 1, 1909, at $480 per year for not exceeding 10,100 kilowatt hours per year. The company refused to make a similar contract with the proprietor of the "Herald." An attempt was made by the company at the hearing to show that the "News" was paying more under its contract than if upon the regular rates; but the Board upon investigation was convinced that this was not true, and that the proprietors of the "News" were enjoying a more favorable rate than that offered the other customers of the company and their immediate competitor, the "Herald." There may have been some justification for making a special contract with the proprietor of the "News" some years ago, when the company was trying to introduce the use of power, and this flat rate was offered as an inducement. But no satisfactory excuse was offered for the renewal of this contract in 1909, and if the company was right, as it clearly was, in refusing to make a special rate to the "Herald," it was plainly wrong in making such a special rate to the "News" in 1909. The contract in question in the opinion of the Board is an unreasonable and unwarranted