The Wilmington morning star. [volume] (Wilmington, N.C.) 1909-1990, 1944-01-04
MORE AUTHORITY
GIVEN THE F. P. {.

WASHINGTON, Jan. 3.-tR-The
Supreme Court today gave broad
powers to the Federal Power Com
mission in fixing public untility
rates, declaring the commissions
rate orders are not subject to
Federal court Interference I'M
less their total effect is unjust
and unreasonable.
Reaffirming previous decision
that the commission is not limited
to any single method of evaluating
utilities for rate-making urposes,
the courts 5 to opinion declared
that it is not the valuation theory
underlying a rate order "but the
impact of the rate order that
counts
Specifically. the court upheld the
commissions use Of the so-called
prudent investment method of
valuing the Hope Gas Company
in ordering a S3,609,e57 annual re-
ductiop in the ates on natural gas
used in Cleveland and Akron and
the Pittsburgh area
Under this method, advocated by
the late Justice Louis D. Bran
deis, utility's value is fixed on
the basis of the amount prudent
ly invested with certain allow
ances for dep. eciation n d i'm
provements. The commission had
valued the Ho;e Company at $685.
1925 with an allowable annual
return at 6 IL per cert. The COM
pany claimed the valuation should
have been $50 100000.
The courts 5,0OO-word opinion by
Justice Douglas, with Justices
Jackson, Frankfurler and R d
dissenting, said that under the nat
ural gas act, Congress stipulated
that rates fixed by the commission
must be just and reasonable" but
provided no formula on which such
q rate is to be determined.
'And when the commission's Or
der is challenged in the courts"
the opinion a3ded the question
is whether that order viewed in
its entirety meets the requirements
OF the act. Cnde1 the statutory
standard Of Just and reasonable
it is the result reached, not the
method employ ed, which is con-
trolling.
4. g. He who would upset the
rate order under the act carries
the heavy burden of making a con-
vincing showing that it is invalid
because it is .nljus, and unreason-
able in its consequences"
In dissenting Justice Jackson ar
gued that the case should be the
occasion for tie courts reconsid-
GRAFTON of ratc-making doctrine as
applied to Natural Gas and should
be returned to the commission for
further action with that aim.
1.-The service one renders to So
ciety in the gas business" Jack
son said, is measured by what he
gets out of the ground, not by
what he puts into it, and there is
investment and the results than in
little more relation between the
Investment and the results than in
a game of POKER"
In another action today, the
court ruled that a Seiective Serv-
ice boards order to report for in
duction must be obeyed by draft
registrant before he can challenge
in the courts the classification CIV
en- him by the board.
The court S to opinion Gus
tice Murphy dissented) asserted
that the Selective Service Act was
aimed at mopil1zing the m d
forces speedily and that board
order to report fer induction is
only a necessary and intermedi-
ate step in a uniteI end continuous
process" to achieve that goal.
The decision applied to Nick Fall
DO of West Newton, Pa, a men,
Der of Jehovah's Witnesses who
contended he should have b n
classed as minister, exempt from
military service. instead of con-
scientious objector He failed to
obey board order tc report at
work camp and subsequently was
sentenced to five years imprison-
ment.