The National tribune., 1909-01-28
AN EpocH-aazisrxG DECISION.

AN ErocH-aiAiSrsc DECISION
Ii Is generally recognized that the de-
cision of the Supreme Court rendered
January 4, In the matter of the Con-
seifdated Gas Co. of New York, mark
ed most important epoch in the reia-
tions of the corporations to the pubic
at large The New York Legislature
had passed a.law reducing the price or
gas from s1.0o to so cents per thous-
and feet. The Con. olidated Gas Co.
made the usual reply that this was con-
fiscatory since it deprived the Company
Of legitimate return upon Its invested
capital. Setting up this plea gave the
court the right to inquire as to its
soundness. In arriving at its conclu-
sion the court took into careful consid-
Grafton all the elements which the Gas
Co. presented as constituting its prop
erty. Stock which had bssn issued as
water was at once excluded and the
franchise was given its real and not its
speculative value. The court laid down
the broad principle which will be the
governing rule hereafter that q public
service corporation had a right to re-
turn of six per cent upon tbs value Of
the property with the realty. equipment
and franchise all being fairly estimated
according to recognized business rules.
Upon this precedent the question OF
corporation control is readily solved.
Every State has the same right to ex-
anime into the service being rendered
by railroads and other corporations that
the State Of New York had to inquire
into the service that the Gas Company
was rendering the people OF New York
city. Every State has the same right
to regulate the price exacted for such
service and the standard has been sst
by the Supreme Court at six per cent
upon its property. This Is not one
sided benefit, because the decision will
inure to the benefit OF the corporations
in q recognition that they are entitled
TO six per cent earnings upon their in
vestment including that which repre-
sents their entsrprise-the franchise.
1t is believed that this will be In a
measure an increased tnaucement for
invesso-s.
The Supreme Court has slso handed
down decision in the case of the City
Of Knoxville against the Knoxville Wat
clearly the principles that should guide
Courts and Legislatures:
''The courts, in clear cases. ought not
to hesitate to arrest the operation of a
confiscatory law, but they ought to re-
int Inc ~ ~
other kind. Regulation of public-ser-
vice corporations, which perform their
duties under conditions CT necessary
monopoly. will occur with greater and
greater frequency as time goes on.
1T is q delicate and dangerous func-
ton, and ought to be exercised with a
keen sense of Justice on the part Of the
regulating body. met by a frank disolos-
ure on the part of the company to be
regulated. The courts ought not to
bear the whole burden of saving prop
erty from confiscation. tho they will
not be found wanting where the proof
is clear. The Legislatures and subordi-
nate bodies, to whom the legislative
power has been delegated ought to do
"our social System rests largely upon
the sanctity OF private property. and
that State or community which seek.
10 invade t will soon discover the error
in the dfsa6er which foliows. The
shgnt gam 10 the consumer, which he
would obtain from a reduction In the
rates charged by public service corpo-
rations, Ii as nothing compared
with his share IN the ruin which
would be brought about by deny
ing to private property its tust re-
ward. thus unsettling values ana de- |
stroying confidence. On the other hand, |
the companies to be regulated will md |
it to their lasting interest te furnish |
freely the information upon which q |
just regulation can be based"