The Washington herald., 1909-01-13
Iustice Psckhsm on CorDorate Rights.

sNoltNE Il CNhft1th Sf w FDtdtC Ntsdlo-
The full text Of Justice Peckham's
,pinlon in the Consolidated Gas Company
-ase confirms the impression gained from
he syllabus that the Supreme Court is
FULLY abreast Of the movement for the
regulation OF public-seTvice corporations.
md that such corporations seeking refuge
n the courts from public regulation must
have substantial and not merely specUia-
tive ground for setting up the eonfsca-
non cry before judicial redress viii be
granted. Where there is q narrow line
# division between possible eonhscation
and proper regulation. the court rules,
and the division depends on varying ex-
nert opinions. "a court Of equity ought
got TO interfere by injunction before a
-air trial has been made OF continuing
5he business under that rate. and thus
eliminating. as far as possible. the doubt
srising from opinions as opposed to
facts In the case under consideration.
here was problem as 20 the character
of a rate which is difficult 70 answer
without a practical test from operation Of
ne rate and the court being unable
20 see a plain showing of confscation. in
eject ordered that the test be made
In the matter Ct franchise valuation
Justice Peckham takes ground which
seems logically to lean toward the total
Elimination Of that valuation from the
capitalization OF pUblfc-service corpora
tions where it can be done without dam
age 10 existing investments. The view
Of the court below that the franchise Of
the gas company had increased in value
vas overruled. for the reason that public
regulation Of the price Of gas. by reducing
the earnings Of the company, unfavorably
affected the value OF the franchise. A
franchise under which the company itself
fixes the price Of gas at a monopoly rate
is tren endously valuable. and may con-
ceivsbly advance in value with the de-
veIopment Of the monopoly. but it stops
increasing in value Immediately the Iegis-
IatUre steps in and deprives the corpora
ton Of its power Of fixing rates. Fellow
ing this line Of reasoning. is il not
logical TO conclude that 2 corporation like
The Washington Gaslight Company. which
has not yet capitalized its franchise.
which enjoys a monopoly only by the
revocable win Of Congress. which is sub
jet to public regulation as to price and
quality Of gas, has no right whatever to
capitalize its franchise? On the contrary.
the public has a perfect right to retain
and appropriate the whole value Of the
gas monopoly. and to make use Of it by
reducing the price Of gas 10 the consumer.
Another significant ruling Of the court
is that weil-estabIished monopolies cannot
assert a right 10 protection from legis-
Iative interference with an undue return
on investments in their securities
Nothing can be safer, says the court, than
an investment in q concern enjoying a
perpetual monopoly Of a constantly grow
ing business. Risk is reduced 10 a mini
mum. and where risk is negligible. '.the
less right 70 any unusual returns upon
the investment In other words. the
day Of enormous profits out OF growing
public utilities is over They must be
content with the ordinary rate Of income
in like businesses in their respective com
munities
All this amounts TO thst limitation upon
the rights Of private property in the
form Of corporations which Mr. Taft. IT
his Augusta speech. recognized as bound
o come. Mr. Roosevelt predicted It sev.