New-York tribune., 1919-02-24
Court Upholds
Right of State
To Raise Rates
Appeals Bench Decides That
Service Commission Nav
Abrogate Franchise Pact
Ruling Made in Gas Case
Necessity for Increase ON
Account of Changes in
Conditions Is Recognized

STAFF Correspondence
ALBANY, Feb. 23.-The Court of Ap
peals has decided that the Public Ser
wee Commission may increase rates
charged by public utilities corporations
Notwithstanding the provision of the
franchise fixing the maximum price"
Its decision upholds the action of a
gas company which raised The price of
gas from $1.25 per thousand cubic feet
to $l.6O in the village Of South G]e1s
Falls, although in the franchise it was
spec1ned that the maximum price fer
fifty years should not be N excess of
$1.25.
Lawmakers here said the decision
would not only affect the two thousand
residents Of South Glens Falls, where
the chief industry is papermaking, but
would ultimately react on every inhao
ltant OF the state. They believe the
decision removes all doubt as to the
constitutionality Of the proposed bill
OF Asemblyman Louis NJ Martin, which
c'nfers upon the Public Service Corr
mission, in specific language, the right
to fix rates notwithstanding any exist
ing franchise, contract or agreement.
Increase Can Be Authorized
Judge Frederick E. Crane wrote the
majority opinion, which holds that:
"Reduction in rates seems to he pen.
orally recognized as public benefit.
and yet an increase may be equally so A"
IN concurrlng opinion written by
Judge Chester B. Mclaughlin it is
found that:
The Legislature, by the creation of
the Public Service Commission, dele
gated to that body the power to fix a
rate, and this it may exercise whenever
1T sees fit to do so, Notwithstanding the
provision of the franchise fixing the
maximum price for term of fifty
years."
Concurring with Judges Crane and
Mclaughlin were the Chief Judge of
the Court of Appeals, Frank Hiscock
and Judge William H. Cuddeback.
Judge Emory A. Chase wrote dissent
ing opinion. in which he held that the
decision in the Rochester case held in
CURED in the dissenting opinion and
Judge John W. Hogan dssented gener-
ally.
Case Begun in 1917
The case was begun in August, 1917,
when the United Gas, Electric Light
and Fuel Company raised the rates in
South Glens Falls from $125 per thou
sand cubic feet to S1.6O. In January,
1918, South Glens Falls, through the
trustees of the village, asked the Pub
lie Service Commission of the Second
District to investigate the case and
prohibit and restrain the gas COM
pany from raising it's rates above S125,
alleging the franchise granted the
company in 1900 constituted a valid
and binding contract and that the COM
pany could not increase its rate until
1850 The Public Service Commission
decided in favor of the gas company.
The village appealed to the Appellate
Division, which reversed the commits
sion. The commission then took the
case to the Court of Appeals.
"It appeared without contradiction, ;"
wrote Judge Crane in the majority
opinion, "that during the last five and
a half years the price Of coal in the
open market advanced 1870 per cent
and at contract price approximately
TAG per. cent; that the cost of manu-
featuring labor advanced 55.5 per cent
and that the taxes assessed against the
company increased 37.6 per cent, re-
sulting in cost to the company for de-
livery of gas at the consumers burner
in said village $1.7594 per thousand
cubic feet"
Distinction Between Contracts
Judge Crane draws distinction be-
tween a contract between a municipal