New Britain herald., 1918-03-25

Waterbury, together with their re- spective suburban lines
 In the case of the passenger rates of the Long Island railroad company
 decided by the Public Service com- mission for the first district of New
 York in November, 1917, Commis- sioner Hervey, in writing the opinion states: "The insuff1ciency of revenue from the passenger service as a whole does not demonstrate that a particu- lar division of service or a particu- lar class of service should provide ad. l ditional revenue without showing fur ther what is the basis of the rates as a whole or in different divisions or classes of passenger service, and which particular divisions or class should bear 8 calculated increase in rates"
 The respondents passenger rates are the same throughout it's entire system. It is conceded by petitioner that the company as a whole should receive increased revenue over that obtained by the old rates. In the exhaustive hearing on all matters ! pertaining to the companys entire system, no facts were shown which would warrant a finding that any particular division or municipality or com mblnatiOn of divisions or munich palt1es less than that involving the whole system, should bear all the burden of producing the necessary in- creased revenue. or that any particu- lar division or municipality should be relieved from bearing it's share of 1 such burden.
 The corporate identity of the re- spondent as a consolidated company under legislative approval is co-ex- ton nciy vxyit1 as an entirety, and the body as a { whole must be taken into considera- tion in a proposition affecting any ! branch of it's service.
 Therefore, in determining the par ticular issues involved in this case, namely, whether the rates charged on the Hartford lines and lines extend- ing into adjoining towns are unrea- sonable, we must of necessity take into consideration certain facts and i conditions affecting the whole system, 1 even though by so doing we inferen- tially pass upon the reasonableness of rates in other localities, not com- plained of in this petition
 Valuation.
 The question of valuation of the company's property as a whole loses 1 it's importance in 8 solution of the issues involved in this case because 1 the present rates are not producing sufficient revenue to pay any divi- 1 dends on the capital involved. after the payment of overhead and oper- ating expenses and fixed charges.
 Many theories have been advanced as to the valuation of a utility com- panys property for rate making pur- | poses. The United States Supreme 1 Court has laid down certain definite l principles regarding this question. 1 Prominent among them may be quot ed the opinion of Justice Harlan in the leading case of Smythe V. Ames ! (169 U. S., at page 546), '"The corpo- ration may not be required to use it's property for the benefit of the pub ! lie without receiving just compensa- tion for services rendered by it We hold, however, that the basis of all calculations as to the reasonable 1 ness of rates to be charged by cor poration maintaining a highway un- der legislative sanction, must be the fair value of the property being used by 1t for the convenience of the pub lie. What the company is en- ( titled to ask is a fair return upon the ! value of that which it employs for , the public convenience" And the opinion of Justice Holmes. re-aff1rm- ! ing a previous opinion of the Court, as follows: 'fWhat the company is , entitled to demand in order that 1t may have just compensation, is a fair return from the reasonable value of the property at the time 1t is being used for the public" (san Diego Land and Town Company V. National City, 174 U. S., at page 757). Later cases establishing substantially the same doctrine are Wilcox V. Consoli- dated Gas Company, PIP U. S., 439, and the Minnesota rate cases, 230 ! U. S., 352.
 The valuation of a company's prop erty used and useful in serving the public is, therefore, the criterion or basis on which the fair return should be figured in limiting the maximum rates as a whole to be charged. Any theory or process followed in deter mining such value must of necessity involve many elements which it will be unnecessary to discuss at this time The Commission, in the Man chester rate case Docket No. 8, adopted the theory of replacement or reproduction cost, which is in con- formity with 8 series of decisions by : corresponding commissions and by the United States Supreme Court, and is the theory which the respondent has followed in this case in present. ing the valuation of it's property. Re- production, however, naturally inn piled the substitution of a new article in place of an existing one which may be somewhat deteriorated by actual service. Wherefore, in deter mining the value of 8 going utility property based upon its reproduction cost the subject and extent of de- preciation of the existing property have been variously defined and treat 1