Evening star. [volume] (Washington, D.C.) 1854-1972, 1909-01-04
Confiscatory Regulation
Not Proven Without Test

In announcing the decision Of the court,
Justice Peckham said:
First At the time Of the CONSOLE
dation the value OF the franchises Of the
constituent companies was fixed by them
at S7,7Sl,o0 and that amount formed
part of the capital Of the complainant
for which 1t issued stock. The CONSOLE
dation was effected pursuant to the state
statute, and the state has never ques-
toned the validity or fairness Of the val
uation.
"Since the consolidation the stock so is
time as valid stock Of the consolidated
company, capitalized pursuant to the
statute at not moro than the fair aggre-
gate value Of the property. franchises and
rights Of its constituent companies. The
state should not now be heard to question
the value of the franchises at the time Of
the consolidation.
1.-THE method Of arriving at the value Of
these kinds of franchises. and how they
should generally be tested in the fixing Of
rates, are questions not now before the
court and are left undecided. The case
before the court is decided upon its own
peculiar facts.
Second. The estimated increase in the
value of these franchises as made by the
trial court at the time of the commence
ment of this suit Is only an estimate and
is not based upon evidence sufficient to
warrant tine finding of any increase what
ever over the amount agreed upon at the
consolidation.
whether the value of the property used
by the company in its business is as
great as found by the trial court after re-
ducing the value Of the franchises to the
sum agreed upon at consolidation.
Fourth. But taking the value as round
by the court, after reducing the value OF
the franchises the result gives return
of almost 61a per cent.
"A reduction in the value of the real
estate, plants, ETC., Of small amount
only would bring the return to. II not
more than, 6 per cent. A possible in
creased consumption of gas would prob
ably increase the earning of the COM
pany without corresponding increase
Of cost.
Under all the circumstances the COM
plainant has failed to make out its case
with that degree Of clearness necessary
to warrant the interference of court of
equity before an actual test has been
made under the practical operation Of
supplying gas at the rates mentioned in
the statutes.
Fifth. There is no rule as to any par
ticular rate which any corporation sub
ject to legislative control in the matter
mas rlSnt 10 OOtdln Wilioul Ics
interference. It depends upon circum-
stances and locality.
I'm this particular case, with reference
to the risk attending the business and the
locality where it is carried on, the COM
piainant is entitled to a return, II it Is
possible. of 6 per cent upon the fair value
Of It's property actually used in Its bust
ness Of supplying gas.
Sixth. There is no discrimination be-
tween the individual consumer and the
city. by fixing the price of gas for the
city at Ave cents per thousand cubic
feet less than is permitted in the case Of
Individual consumers, SO far, at least, as
the complainant Is concerned. If the
amount obtained from the total gas sold
to the city and the individual Is enough to
secure the requisite return upon property.
1t is all the complainant can require. and
the question of discrimination between
city and individual 10 one In which the
complainant can have no interest.
az The rate proposed must be with
reference to the value of the property
at the time when the rate takes effect.
The company is entitled to the benefit
Of any increases in value at that time.
This at least is the general rue. and II
there be any exception 10 the hule, this
case does not come within it.
g. Any increased expense arising
from the increased candle power Of the
light demanded by the statutes was in
cluded substantially in the expenses Of
the year d905). with reference to which
the inquiry was made.
ninth. The provision in the acts re-
curing q certain pressure is unconstitu-
great possible IL not probable danger Of
explosion In the mains or other pipes. II
the pressure demanded were applied to
them as they now are. To eliminate such