New Britain herald., 1930-05-15
THE SUPREME COURT ISSUE

It is sad in Washington that The Senate is in a mood 10 confirm nc one for the T.. s Supreme Court who does not believe in the prudent in- Ncstment cost" theory in valung public utilities.
 Which puts prudent investment cost versus present reproduction cost" in tho realm of poltlcs-back where it has always been.
 There are wise men on both sides of the discussion. just as has always been the case. The public utinues are in favor Of whichever valuation basis yielding the largest returns, and just now the reproduction cost system promises 10 yield the larger cost. The utilities would be in favor Of the prudent investment theory just as readily as they were in ] 597 when the Supreme Court enunciatcd the Smyth vs. Ames decision f that method promised the largest returns.
 Although the Supreme Court ren- dered its verdict in that celebrated case in favor Of the people and against Ire railroads, the changed value of he dollar has made the de- cision today one that fayors tho uulities and does not favor the people,
 Who can say that, within ten or twenty years, the situation will not again change?
 The prudent investment theory is one whereby the costs ot a utility arc based upon the sums that have been prudcntly invested. The present re- production cost theory is one which would consider the value of a utility at what 1t would cost 10 reproduce the property at the present time ir- respective Of what sums were actu- ally invested.
 The "eaIue" permitted under court decisions IS reflected in the cos, Of service. T. is therefore con- sfdered important 10 seek to control inc decisions Of the court in advance by making sure that jurists with the right kind" Of mental outlook on th1s question get upon tho court. In late years the Supreme Court has hadsa majority Of 10 in favor of tho reproduction cost theory, with Holmes, Brandeis and stone helns ,he dIssentcrS in favor of tho pru- dent investment theory What dif- . ference the accession Of Mr. Hughes upon the court will make remains 10 be sccn. But there are gentlemen on . the court who already arc above the . legal age for voluntary retirement and they %iI retire when they are prepared 0 do so, T. is not too much 70 say that, f President HooyoI should have two torms in the Whit House, 70 him will come the duty 0, nominating at least two moro JIdge' for the Supreme Court. and 70 the Senate will come the rezponsibiflt! Of confirming or rtjecung them.
 That lhc senate is growing jn creasinely particular as 10 whom confirms was indicated in the con t-ovcrsy over Mir. Hughes. "corpora ton lawyer" and the rejection 0 Judge Parker. who was regarded .
 s8ye 10 lean toward the reproduction coet theory.
 Assume. however. that tho senat
 will continue 10 insist upon confirm ms only prudent investment theor,
 judges. and that in the course of
 few years a majority oC the cour
 wifi lean toward this theory
 Al such time the condition 0 I the dollar may change sufficient 10 put the utilities back where the
 were at the turn Of the century an
 they in all probability would pu
 their faith in the prudent irycstmen
 theory. and all Insurgents, Demo
 crsts and friends Of man general would prefer the reproduction cos
 theory.
 IL all depends upon the value c the dollar. r the dollars Ta.u should change sufficiently durin the next 70 ycays 10 bring about an other reyersalssin the public versu { utilities controversy the Suprem 3 Court, if cornposed Of a ma ajority (
 prudent investment theorizer
 would be- giving decisions in favo
 Of the utilities.
 Naturally there are q few "ifs' 1 such an assumption. But histor
 may not only be repeated. but th