The Washington times., 1920-03-02

company. For these reasons. the
Commission did not err In refusing to
permit the Washington Railway and
Electric Company to become a party
respondent nor did IL err in holding
that the duty of the Power Company
under the law was to furnish it's serv.
ices at a reasonable cost to consumers
regardless OF it's connections through
stock ownership or othewsise with
any other public utility.
1.-The fair value to be found by the
Commission under the terms OF the
public utility law for rate-making
purposes, in my opinion, and / 80 ind.
means the actual, necessary and reas-
onably true investment In money or
it's equivalent made by the utility for
the purpose OF the exercise of the
public duty 1t owes under the public
grant which 1t enjoys. This invest
ment covers the cost OF the property
used and useful in it's operation. the
reasonable value OF any property
dedicated to II by private persons for
this public use and such unearned In
crement from its property holdings Of
real estate as may have accrued
TO 1t through any general rise in
real estate values. 1t covers and in
cludes every legitimate expenditure
made and properly chargeable to It's
capital account. provided il has writ
ten of all property that has ceased
to exist or passed from use from
any cause. and depreciation has been
properly provided for.
Net Speculative Enterprise
"A public utility is not and under
the law cannot be. considered in the
nature of speculative enterprise.
The person, whether as individuals or
as partners or in a corporate form, are
under no obligation to themselves or
to the public to invest their capital
in any public utility. Having done so.
however. they have under the law.
and by a principle which was an
nounced by Lord Hale in England.
centuries ago. the right to fair re-
turn upon their actual Investment
and to nothing more.
IF risk and dangeg be, attached to
the enterprise at its Inception, the
law gives them the right to q larger
return because of the risk encount-
cred. but not the right to q larger
valuation for this reason, and when
the period Of risk is passed and the
enterprise is safely established. the
law reduces the rate of return to a
fair and reasonable percentage upon
the fair value Of the property to be
ascertained upon a consideration, not
Of the rights of the investor in the
utility alone, but upon the rights of
the public whose patronage II the
prime factor in the success of the en-
terprise. In my opinion. there is no
other Just and reasonable principle
upon which a rate base can be de-
termined in the case of a fairly nor
NAL utility operating under fairly nor
NAL conditions.
Negative Obstruction.-
THE record discloses not only the:
the power company in no wise as
sisted the commission or it's officers
or assistants in making these as2cr-
tainments and estimates, but 1t in
dulged in a system of negative OBJ
struction, far from commendable; and
while it may not have actually con
cealed the truth in any instance, it
certainly put itself to no pains to
advise the commission of any facts
relative to the extent. location or
cost Of its property.
"A great deal was said in the ar
Cument with reference to certain
eliminations, amounting to $144, 2S5.I5.
This amount is the residue of con-
siderably larger sum representing the
cost of many items of property viii IN,
from the evidence, had disappeared
from the tangible property of the
power company or had become no
longer used nor useful These elm
nations were justified by substantial
evidence.
at appears from the testimony that
on the 3Oth day OF September, 1902.
the balance sheet of the United States
Electric Lighting Company showed its
cost OF plant and equipment to he
S2,OS1 ,059.f5, to which was added
certain construction expenditures
charged to surplus account, in the
sum OF s279, 465.79, making its total
plant and equipment cost the sun, of
81 361 1854. This property was
transferred to the power company and
written on it's books as costing -
33S,57817. The property. account was
thus inflated in the sum Of S1,9.T,-
1908, for which stock was issued.
Cost Was Inflated.
BY means OF this so-called sale,
conceived. conducted and closed by
identical boards of directors, the cost
of the United States Electric Light
ing Company to the Power Company
was made to appear on the books of
the latter at 1917, 1908. more than
was actually paid. The Power Com
pany now seeks to capitalize this
amount and to exact n return upon
II. Regardless of the fact that II IL