New-York tribune., 1917-12-27
A Milestone in Corporation Control

Guardian"
A Milestone in Corporation Control
The recent decision Of the United states
Supreme Court upholding the decision OF
the Court of Appeals Of this state which
in turn upheld the order Of the Public
Service Commission for this district d.
recting an extension Of service by cor
poration is distinctly a milestone along
the road of corporation regulation. The
case in point was the much discussed
ouglaston-Douglaston Manor-Littlc Neck
gas matter.
Ordered by the Public Service Commls-
sion to extend its mains to serve these
small communities, lying outside the limit
of existing mains, the New York and
Queens Gas Company objected, and argued
that to obey would amount to coniiscation,
as the return would not be profitable. The
Appellate Division assumed it had the
power TO review this order and annulled
il. but the Court of Appeals overruled the
subordinate court and upheld the commits
sion. Now the Supreme Court has agreed
with it.
In this decision lies the gist, the basis,
Of all attempt at regulation of public SER
vice corporations. The Supreme Court ar
gued that there had been no possible dep
rivation Of due process of law, since tho
gas company had had its hearings before
the commission and its court appeals. But
the STATE law and the decision Of the Court
of Appeals assumed the full qualification
of the commission as experts to deal WIN
the situation before its members. In re-
viewing the commissions action the
courts had 10 authority to substitute their
Judgment for that Of the commission.
Corporations which devote their prop
erty to a public USE" declared the Supreme
Court, "may not pick and choose, serving
only the portions Of the territory covered
by their franchises which it Is presently
profitable for them to serve and restrict
ing the development Of the remaining por-
tions bv leaving their inhabitants in dis
comfort without the service which they
alone can render. TO correct this DISPOSE
ton TO serve where it is profitable and TO
NEGLECT where it is not is one of the I'M
portant purposes for which these admin
istrative commissions, with large powers,
were called into existence, with an organi-
zation and with duties which peculiarly
tit them for dealing with problems such as
this case presents, and we agree with the
Court Of Appeals of New York in conclud-
ing that the action of the commission COM
planned of was not arbitrary or caprlcious,
but was based on very substantial evil
dence, and therefore that, even if the
courts differed with the commission as to
the expediency or wisdom Of the order,
they are without authority to substitute
for its Judgment their views of what may
be reasonable or wise"
With the powers thus declared, public
bodies attempting to regulate corporation
service may hope to achieve measurable
success. Lacking them, regulation must
be subject to interminable delay because
of court reviews, and perhaps fail by rea-
son of court reversal Of orders. The de-
cision of the Court of Appeals was the
signal for thcsintroduction at Albany last
session of a number Of bills which, while
they varied in form, all had the same pur-
pose-to give to the Appellate Division
legislative sanction for reviewing orders
of the Public Service Commission. Fortu-
nately, they failed to become law.
Now that the final court has upheld this
principle, it is to be assumed that further
attempts will be made at the coming ses-
sion to change the law thus declared. They
should be defeated As the law has been
interpreted, 10 corporation need fear
"confiscation." Due provision is made for
court review Of commission orders, and no
arbitrary or capricious mandate need be
expected to stand. But when it comes to a
question of facts, of the wisdom of given
order for service TO the people, it is to be
assumed that the expert opinion Of the
commissions members, selected to repre-
sent and protect the public, is final. That
is as it should be. If the commissions had
not that power they might as we'll so out