The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-04-24

preme court OF lEe O0lLeQ states IN
investors in trusts and other unlaw
rule as there enunciated was tina
trade were unlawful.
Justice Harlan prophesied at the
time that it would lead to the
greatest variableneSS and uncer-
tainty in the enforcement of the
law
THE defense of reasonable re-
straint would be made in every
case" he said, and there would be
as many different rules of reason
ableness as cases, courts and juries. "
Prophecy Came True
If ever a prophesy came true it
was this. It's immediate effect was
to practically nullify the antitrust
laws, and it's influence has been eX-
tended to many other branches of
law.
At the first opportunity the Su-
preme Court made its use obligatory
upon all rate-making bodies. The
judicial ascertainment of values Tor
the purpose of determining whether
rates are condscatory, said the
court, lis not a matter of formula,
but there must be a reasonable
Judgment having its basis in a
proper consideration of all rele-
want facts" The difficulties of APP
plying such rule will be apparent
to any one who considers the sin
gularly incongruous and inconSis-
tent results that it has actually
produced.
Rates have been adjudged "rea-
sonable" which we're expected : to
yield returns from 4 per cent, to Is
different percentages. In other cases
upon similar relevant facts" some
of these same rates were held so
low as to be "conf1sCatory In one
case rates which would be sufficient
to pay 1-3 times the fixed charges
were adjudged reasonable; in an
other IL times.
Rule a Game of Chance
This situation can be explained
only upon the theory that the whole
system of adjudication based upon
the rule of reason" has become
a great game of chance. Such has
been the extreme greed of some
utilities that they have incurred
heavy expense and trouble in order
to obtain rates which would produce
Is, Is, Is and even 30 per cent.
There is always "a chance" of win
ming no matter how unfair, unjust
and even ridiculous the attempt
may be. Anything may be expected
to happen with rubber "yardStick. !"
Not only has it been held that no
formula for the rule of reason"
will be accepted, but no legal chem
list has as yet discovered any for
mula by which it might be COM
pounded. 1t has a measure without
beginning or an ending; without
boundary to mark its length,
depth, or breadth. 1t is at best,
what one court appropriately called
it, "a dignified guess"
Twilight Zone" Outlined.
In a case-not unusual in these
respects-Where the testimony and
arguments lasted for months, max
ing up a record of 2700 printed
pages; where witnesses were in help
less conflict upon facts, and sex
perts" disagreed in their opinions;
where the commission, the trial
judge, and the highest court of ap-
peal-each in turn disagreed with
+Io0 other +Jooro xr,oc finally oxy0lunI
twilight zone" within which the
rule of reason" might be permitted
to operate without judicial interefer-
ence.
In such zone, where the mind
was neither asleep nor awake, the
"dignified guess" was applied.
Could any investor in such utility
feel that his interests had been
served in such contest?
Rules for Fair Return
The rates finally allowed must be
sufficient to produce return equal
to that generally being made at the
same time, and in the same general
part of the country, on investments
IA Ob44CA bboAA4CoS OA4N4CA bchAiSS az
tended cy corresponding risks and
uncertainties, but not to profits re-
allied or anticipated in highly prof
liable enterprises or speculative VEN
lures.
How will these unacceptable limi-
tations" be met and solved by the
proposed "yardstick." No course of
action can safely be called a rule or
yardstick which has not been tested
by many experiments and expert
ences under relatively similar condi-
tons,
When this has been done, and the
facts assembled and analysed, the
result will constitute a safe and de-
pendable rule" to be applied in the
future. Such "yardsticks" have been
developed and used for solving their
problems, by all forms of business
enterprises both large and small,
from time immemorial.