Court Opinion

ID: 9419423
Source: CourtListenerOpinion
Date Created: 2023-08-02 22:49:26.307829+00
Date Added: 2024-06-11T17:22:18.019309
License: Public Domain

Me. Justice Frankfurter,
dissenting:
My brother Jackson has analyzed with particularity the economic and social aspects of natural gas as well as *625the difficulties which led to the enactment of the Natural Gas Act, especially those arising out of the abortive attempts of States to regulate natural gas utilities. The Natural Gas Act of 1938 should receive application in the light of this analysis, and Mr. Justice Jackson has, I believe, drawn relevant inferences regarding the duty of the Federal Power Commission in fixing natural gas rates. His exposition seems to me unanswered, and I shall say only a few words to emphasize my basic agreement with him.
For our society the needs that are met by public utilities are as truly public services as the traditional governmental functions of police and justice. They are not less so when these services are rendered by private enterprise under governmental regulation. Who ultimately determines the ways of regulation, is the decisive aspect in the public supervision of privately-owned utilities. Foreshadowed nearly sixty years ago, Railroad Commission Cases, 116 U. S. 307,331, it was decided more than fifty years ago that the final say under the Constitution lies with the judiciary and not the legislature. Chicago, M. & St. P. Ry. Co. v. Minnesota, 134 U. S. 418.
While legal issues touching the proper distribution of governmental powers under the Constitution may always be raised, Congressional acquiescence to date in the doctrine of Chicago, M. & St. P. Ry. Co. v. Minnesota, supra, may fairly be claimed. But in any event that issue is not here in controversy. As pointed out in the opinions of my brethren, Congress has given only limited authority to the Federal Power Commission and made the exercise of that authority subject to judicial review. The Commission is authorized to fix rates chargeable for natural gas. But the rates that it can fix must be “just and reasonable.” § 5 of the Natural Gas Act, 15 U. S. C. § 717 (d). Instead of making the Commission’s rate determinations final, Con*626gress specifically provided for court review of such orders. To be sure, “the finding of the Commission as to the facts, if supported by substantial evidence” was made “conclusive,” § 19 of the Act, 15 U. S. C. § 717r. But obedience of the requirement of Congress that rates be “just and reasonable” is not an issue of fact of which the Commission’s own determination is conclusive. Otherwise, there would be nothing for a court to review except questions of compliance with the procedural provisions of the Natural Gas Act. Congress might have seen fit so to cast its legislation. But it has not done so. It has committed to the administration of the Federal Power Commission the duty of applying standards of fair dealing and of reasonableness relevant to the purposes expressed by the Natural Gas Act. The requirement that rates must be “just and reasonable” means just and reasonable in relation to appropriate standards. Otherwise Congress would have directed the Commission to fix such rates as in the judgment of the Commission are just and reasonable; it would not have also provided that such determinations by the Commission are subject to court review.
To what sources then are the Commission and the courts to go for ascertaining the standards relevant to the regulation of natural gas rates? It is at this point that Me. Justice Jackson’s analysis seems to me pertinent. There appear to be two alternatives. Either the fixing of natural gas rates must be left to the unguided discretion of the Commission so long as the rates it fixes do not reveal a glaringly bad prophecy of the ability of a regulated utility to continue its service in the future. Or the Commission’s rate orders must be founded on due consideration of all the elements of the public interest which the production and distribution of natural gas involve just because it is natural gas. These elements are reflected in the Natural Gas Act, if that Act be applied as an entirety. See, for *627instance, §§ 4 (a) (b) (c) (d), 6, and 11, 15 TJ. S. C., §§ 717c (a) (b) (c) (d), 717c, and 717j. Of course the statute is not concerned with abstract theories of rate-making. But its very foundation is the “public interest,” and the public interest is a texture of multiple strands. It includes more than contemporary investors and contemporary consumers. The needs to be served are not restricted to immediacy, and social as well as economic costs must be counted.
It will not do to say that it must all be left to the skill of experts. Expertise is a rational process and a rational process implies expressed reasons for judgment. It will little advance the public interest to substitute for the hodge-podge of the rule in Smyth v. Ames, 169 U. S. 466, an encouragement of conscious obscurity or confusion in reaching a result, on -the -assumption that so long as the result appears harmless its basis is irrelevant. That may be an appropriate attitude when state action is challenged as unconstitutional. Cf. Driscoll v. Edison Co., 307 U. S. 104. But it is not to be assumed that it was the design of Congress to make the accommodation of the conflicting interests exposed in Me. Justice Jackson’s opinion the occasion for a blind clash of forces or a partial assessment of relevant factors, either before the Commission or here.
The objection to the Commission’s action is not that the rates it granted were too low but that the range of its vision was too narrow. And since the issues before the Commission involved no less than the total public interest, the proceedings before it should not be judged by narrow conceptions of common law pleading. And so I conclude that the case should be returned to the Commission. In order to enable this Court to discharge its duty of reviewing the Commission’s order, the Commission should set forth with explicitness the criteria by which it is guided *628ip determining that rates are “just and reasonable,” and it should determine the public interest that is in its keeping in the perspective of the considerations set forth by Me. Justice Jackson.
By Me. Justice Jackson :
Certainly the theory of the court below that ties rate-making to the fair-value-reproduction-cost formula should be overruled as in conflict with Federal Power Commission v. Natural Gas Pipeline Co.1 But the case should, I think, be the occasion for reconsideration of our rate-making doctrine as applied to natural gas and should be returned to the Commission, for further consideration in the light thereof. •>
The Commission appears to have understood the effect of the two opinions in the Pipeline case to be at least authority and perhaps direction to fix natural gas rates by exclusive application of the “prudent investment” rate base theory. This has no warrant in the opinion of the Chief Justice for the Court, however, which released the Commission from subservience to “any single formula or combination of formulas” provided its order, “viewed in its entirety, produces no arbitrary result.” 315 U. S. at 586. The minority opinion I understood to advocate the “prudent investment” theory as a sufficient guide in a natural gas case. The view was expressed in the court below that since this opinion was not expressly controverted it must have been approved.2 I disclaim this im*629puted approval with some particularity, because I attach importance at the very beginning of federal regulation ■ of the natural gas industry to approaching it as the performance of economic functions, not as the performance of legalistic rituals.
I.
Solutions of these cases must consider eccentricities of the industry which gives rise to them and also to the Act of Congress by which they are governed.
The heart of this problem is the elusive, exhaustible, and irreplaceable nature of natural gas itself. Given sufficient money, we can produce any desired amount of railroad, bus, or steamship transportation, or communications facilities, or capacity for generation of electric energy, or for the manufacture of gas of a kind. In the service of such utilities one customer has little concern with the amount taken by another, one’s waste will not deprive another, a volume of service can be created equal to demand, and today’s demands will not exhaust or lessen capacity to serve tomorrow. But the wealth of Midas and the wit of man cannot produce or reproduce a natural gas field. We cannot even reproduce the gas, for our manufactured product has only about half the heating value per unit of nature’s own.3
Natural gas in some quantity is produced in twenty-four states. It is consumed in only thirty-five states, and is *630available only to about 7,600,000 consumers.4 Its availability has been more localized than that of any other utility service because it has depended more on the caprice of nature.
The supply of the Hope Company is drawn from that old and rich and vanishing field that flanks the Appalachian mountains. Its center of production is Pennsylvania and West Virginia, with a fringe of lesser production in New York, Ohio, Kentucky, Tennessee, and the north end of Alabama. Oil was discovered in commercial quantities at a depth of only 69% feet near Titusville, Pennsylvania, in 1859. Its value then was about $16 per barrel.5 The oil branch of the petroleum industry went forward at once, and with unprecedented speed. The area productive of oil and gas was roughed out by the drilling of over 19,000 “wildcat” wells, estimated to have cost over $222,000,000. Of these, over 18,000, or 94.9 per cent, were “dry holes.” About five per cent, or 990 wells, made discoveries of commercial importance, 767 of them resulting chiefly in oil and 223 in gas only.6 Prospecting for many years was a search for oil, and to strike gas was a misfortune. Waste during this period and even later is appalling. Gas was regarded as having no commercial value until about 1882, in which year the total yield was valued only at about $75,000.7 Since then, contrary to oil, which has become cheaper, gas in this field has pretty steadily advanced in price.
While for many years natural gas had been distributed on a small scale for lighting,8 its acceptance was slow, *631facilities for its utilization were primitive, and not until 1885 did it take on the appearance of a substantial industry.9 Soon monopoly of production or markets developed.10 To get gas from the mountain country, where it was largely found, to centers of population, where it was in demand, required very large investment. By ownership of such facilities a few corporate systems, each including several companies, controlled access to markets. Their purchases became the dominating factor in giving a market value to gas produced by many small operators. Hope is the market for over 300 such operators. By 1928 natural gas in the Appalachian field commanded an average price of 21.1 cents per m. c. f. at points of production and was bringing 45.7 cents at points of consumption.11 The companies which controlled markets, however, did not rely on gas purchases alone. They acquired and held in fee or leasehold great acreage in territory proved by “wildcat” drilling. These large marketing system companies as well as many small independent owners and operators have carried on the commercial development of proved territory. The development risks appear from the estimate that up to 1928, 312,318 proved area wells had been sunk in the Appalachian field of which 48,962, or 15.7 per cent, failed to produce oil or gas in commercial quantity.12
*632With the source of supply thus tapped to serve centers of large demand, like Pittsburgh, Buffalo, Cleveland, Youngstown, Akron, and other industrial communities, the distribution of natural gas fast became big business. Its advantages as a fuel and its price commended it, and the business yielded a handsome return. All was merry and the goose hung high for consumers and gas companies alike until about the time of the first World War. Almost unnoticed by the consuming public, the whole Appalachian field passed its peak of production and started to decline. Pennsylvania, which to 1928 had given off about 38 per cent of the natural gas from this field, had its peak in 1905; Ohio, which had produced 14 per cent, had its peak in 1915; and West Virginia, greatest producer of all, with 45 per cent to its credit, reached its peak in 1917.13
Western New York and Eastern Ohio, on the fringe of the field, had some production but relied heavily on imports from Pennsylvania and West Virginia. Pennsylvania, a producing and exporting state, was a heavy consumer and supplemented her production with imports from West Virginia. West Virginia was a consuming state, but the lion’s share of her production was exported. Thus the interest of the states in the North Appalachian supply was in conflict.
Competition among localities to share in the failing supply and the helplessness of state and local authorities in the presence of state lines and corporate complexities is a part of the background of federal intervention in the industry.14 West Virginia took the boldest measure. It legislated a priority in its entire production in favor of its own inhabitants. That was frustrated by an injunc*633tion from this Court.15 Throughout the region clashes in the courts and conflicting decisions evidenced public anxiety and confusion. It was held that the New York Public Service Commission did not have power to classify consumers and restrict their use of gas.16 That Commission held that a company could not abandon a part of its territory and still serve the rest.17 Some courts admonished the companies to take action to protect consumers.18 Several courts held that companies, regardless of failing supply, must continue to take on customers, but such compulsory additions were finally held to be within the Public Service Commission’s discretion.19 There were attempts to throw up franchises and quit the service, and municipalities resorted to the courts with conflicting results.20 Public service commissions of consuming states were handicapped, for they had no control of the supply.21
*634Shortages during World War I occasioned the first intervention in the natural gas industry by the Federal Government. Under Proclamation of President Wilson the United States Fuel Administrator took control, stopped extensions, classified consumers and established a priority for domestic over industrial use.22 After the war federal control was abandoned. Some cities once served with natural gas became dependent upon a mixed gas of reduced heating value and relatively higher price.23
Utilization of natural gas of highest social as well as economic return is domestic use for cooking and water *635heating, followed closely by use for space heating in homes. This is the true public utility aspect of the enterprise, and its preservation should be the first concern of regulation. Gas does the family cooking cheaper than any other fuel.24 But its advantages do not end with dollars and cents cost. It is delivered without interruption at the meter as needed and is paid for after it is used. No money is tied up in a supply, and no space is used for storage. It requires no handling, creates no dust, and leaves no ash. It responds to thermostatic control. It ignites easily and immediately develops 'its maximum heating capacity. These incidental advantages make domestic life more liveable.
Industrial use is induced less by these qualities than by low cost in competition with other fuels. Of the gas exported from West Virginia by the Hope Company a very substantial part is used by industries. This wholesale use speeds exhaustion of supply and displaces other fuels. Coal miners and the coal industry, a large part of whose costs are wages, have complained of unfair competition from low-priced industrial gas produced with relatively little labor cost.25
Gas rate structures generally have favored industrial users. In 1932, in Ohio, the average yield on gas for domestic consumption was 62.1 cents per m. c. f. and on in*636dustrial, 38.7. In Pennsylvania, the figures were '62.9 against 31.7. West Virginia showed the least spread, domestic consumers paying 36.6 cents; and industrial, 27.7.26 Although this spread is less than in other parts of the United States,27 it can hardly be said to be self-justifying. It certainly is a very great factor in hastening decline of the natural gas supply.
About the time of World War I there were occasional and short-lived efforts by some hard-pressed companies to reverse this discrimination and adopt graduated rates, giving a low rate to quantities adequate for domestic use and graduating it upward to discourage industrial use.28 *637These rates met opposition from industrial sources, of course, and since diminished revenues from industrial sources tended to increase the domestic price, they met little popular or commission favor. The fact is that neither the gas companies nor the consumers nor local regulatory bodies can be depended upon to conserve gas. Unless federal regulation will take account of conservation, its efforts seem, as in this case, actually to constitute a new threat to the life of the Appalachian supply.
II.
Congress in 1938 decided upon federal regulation of the industry. It did so after an exhaustive investigation of all aspects including failing supply and competition for the use of natural gas intensified by growing scarcity.29 Pipelines from the Appalachian area to markets were in the control of a handful of holding company systems.30 This created a highly concentrated control of the producers’ market and of the consumers’ supplies. While holding companies dominated both production and distribution they segregated those activities in separate *638subsidiaries,'31 the effect of which, if not the purpose, was to isolate some end of the business from the reach of any one state commission. The cost of natural gas to consumers moved steadily upwards over the years, out of proportion to prices of oil, which, except for the element of competition, is produced under somewhat comparable conditions. The public came to feel that the companies were exploiting the growing scarcity of local gas. The problems of this region had much to do with creating the demand for federal regulation.
The Natural Gas Act declared the natural gas business to be “affected with a public interest,” and its regulation “necessary in the public interest.” 32 Originally, and at the time this proceeding was commenced and tried, it also declared “the intention of Congress that natural gas shall be sold in interstate commerce for resale for ultimate public consumption for domestic, commercial, industrial, or any other use at the lowest possible reasonable rate consistent with the maintenance of adequate service in the public interest.”33 While this was later dropped, there is nothing to indicate that it was not and is not still an accurate statement of purpose of the Act. Extension or improvement of facilities may be ordered when “necessary or desirable in the public interest,” abandonment of facilities may be ordered when the supply is “depleted to the extent that the continuance of service is unwarranted, or that the present or future public convenience or necessity *639permit” abandonment and certain extensions can only be made on finding of “the present or future convenience and necessity.”34 The Commission is required to take account of the ultimate use of the gas. Thus it is given power to suspend new schedules as to rates, charges, and classification of services except where the schedules are for the sale of gas “for resale for industrial use only,” 35 which gives the companies greater freedom to increase rates on industrial gas than on domestic gas. More particularly, the Act expressly forbids any undue preference or advantage to any person or “any unreasonable difference in rates . . . either as between localities or as between classes of service.” 36 And the power of the Commission expressly includes that to determine the “just and reasonable rate, charge, classification, rule, regulation, practice, or contract to be thereafter observed and in force.” 37
In view of the Court’s opinion that the Commission in administering the Act may ignore discrimination, it is interesting that in reporting this Bill both the Senate and the House Committees on Interstate Commerce pointed out that in 1934, on a nation-wide average the price of natural gas per m. c. f. was 74.6 cents for domestic use, 49.6 cents for commercial use, and 16.9 for industrial use.38 I am not ready to think that supporters of a bill called attention to the striking fact that householders were being charged five times as much for their gas as industrial users only as a situation which the Bill would do nothing to remedy. On the other hand the Act gave to the Commission what the Court aptly describes as “broad powers of regulation.”
*640III.
This proceeding was initiated by the Cities of Cleveland and Akron. They alleged that the price charged by Hope for natural gas “for resale to domestic, commercial and small industrial consumers in Cleveland and elsewhere is excessive, unjust, unreasonable, greatly in excess of the price charged by Hope to nonaffiliated companies at wholesale for resale to domestic, commercial, and small industrial consumers, and greatly in excess of the price charged by Hope to East Ohio for resale to certain favored industrial consumers in Ohio, and therefore is further unduly discriminatory between customers and between classes of service” (italics supplied). The company answered admitting differences in prices to affiliated and nonaffiliated companies and justifying them by differences in conditions of delivery. As to the allegation that the contract price is “greatly in excess of the price charged by Hope to East Ohio for resale to certain favored industrial consumers in Ohio,” Hope did not deny a price differential, but alleged that industrial gas was not sold to “favored consumers” but was sold under contracts and schedules filed with and approved by the Public Utilities Commission of Ohio, and that certain conditions of delivery made it not “unduly discriminatory.”
The record shows that in 1940 Hope delivered for industrial consumption 36,523,792 m. c. f. and for domestic and commercial consumption, 50,343,652 m. c. f. I find no separate figure for domestic consumption. It served 43,767 domestic consumers directly, 511,521 through the East Ohio Gas Company, and 154,043 through the Peoples Natural Gas Company, both affiliates owned by the same parent. Its special contracts for industrial consumption, so far as appear, are confined to about a dozen big industries.
*641Hope is responsible for such discrimination as exists in favor of these few industrial consumers. It controls both the resale price and use of industrial gas by virtue of the very interstate sales contracts over which the Commission is exercising its jurisdiction.
Hope’s contract with East Ohio Company is an example. Hope agrees to deliver, and the Ohio Company to take, “(a) all natural gas requisite for the supply of the domestic consumers of the Ohio Company; (b) such amounts of natural gas as may be requisite to fulfill contracts made with the consent and approval of the Hope Company by the Ohio Company, or companies which it supplies with natural gas, for the sale of gas upon special terms and conditions for manufacturing purposes.” The Ohio Company is required to read domestic customers’ meters once a month and meters of industrial customers daily and to furnish all meter readings to Hope. The Hope Company is to have access to meters of all consumers and to all of the Ohio Company’s accounts. The domestic consumers of the Ohio Company are to be fully supplied in preference to consumers purchasing for manufacturing purposes and “Hope Company can be required to supply gas to be used for manufacturing purposes only where the same is sold under special contracts which have first been submitted to and approved in writing by the Hope Company and which expressly provide that natural gas will be supplied thereunder only in so far as the same is not necessary to meet the requirements of domestic consumers supplied through pipe lines of the Ohio Company.” This basic contract was supplemented from time to time, chiefly as to price. The last amendment was in a letter from Hope to East Ohio in 1937. It contained a special discount on industrial gas and a schedule of special industrial contracts, Hope reserving the right to make eliminations therefrom and agreeing that others might be added from time to *642time with its approval in writing. It said, “It is believed that the price concessions contained in this letter, while not based on our costs, are, under certain conditions, to our mutual advantage in maintaining and building up the volumes of gas sold by us [italics supplied].” 39
The Commission took no note of the charges of discrimination and made no disposition of the issue tendered on this point. It ordered a flat reduction in the price per m. c. f. of all gas delivered by Hope in interstate commerce. It made no limitation, condition, or provision as to what classes of consumers should get the benefit of the reduction. While the cities have accepted and are defending the reduction, it is my view that the discrimination of which they have complained is perpetuated and increased by the order of the Commission and that it violates the Act in so doing.
The Commission’s opinion aptly characterizes its entire objective by saying that “bona fide investment figures now become all-important in the regulation of rates.” It should be noted that the all-importance of this theory is not the result of any instruction from Congress. When the Bill to regulate gas was first before Congress it con*643tained the following: “In determining just and reasonable rates the Commission shall fix such rate as will allow a fair return upon the actual legitimate prudent cost of the property used and useful for the service in question.” H. R. 5423, 74th Cong., 1st Sess., Title III, § 312 (c). Congress rejected this language. See H. R. 5423, § 213 (211 (c)), and H. R. Rep. No. 1318, 74th Cong., 1st Sess., 30.
The Commission contends nevertheless that the “all important” formula for finding a rate base is that of prudent investment. But it excluded from the investment base an amount actually and admittedly invested of some $17,000,000. It did so because it says that the Company recouped these expenditures from customers before the days of regulation from earnings above a fair return. But it would not apply all of such “excess earnings” to reduce the rate base as one of the Commissioners suggested. The reason for applying excess earnings to reduce the investment base roughly from $69,000,000 to $52,000,000 but refusing to apply them to reduce it from that to some $18,-000,000 is not found in a difference in the character of the earnings or in their reinvestment. The reason assigned is a difference in bookkeeping treatment many years before the Company was subject to regulation. The $17,000,000, reinvested chiefly in well drilling, was treated on the books as expense. (The Commission now requires that drilling costs be carried to capital account.) The allowed rate base thus actually was determined by the Company’s bookkeeping, not its investment. This attributes a significance to formal classification in account keeping that seems inconsistent with rational rate regulation.40 Of *644course, the Commission would not and should not allow a rate base to be inflated by bookkeeping which had improperly capitalized expenses. I have doubts about resting public regulation upon any rule that is to be used or not depending on which side it favors.
*645The Company on the other hand, has not put its gas fields into its calculations on the present-value basis, although that, it contends, is the only lawful rule for finding a rate base. To do so would result in a rate higher than it has charged or proposes as a matter of good business to charge.
The case before us demonstrates the lack of rational relationship between conventional rate-base formulas and natural gas production and the extremities to which regulating bodies are brought by the effort to rationalize them. The Commission and the Company each stands on a different theory, and neither ventures to carry its theory to logical conclusion as applied to gas fields.
IV.
This order is under judicial review not because we interpose constitutional theories between a State and the business it seeks to regulate, but because Congress put upon the federal courts a duty toward administration of a new federal regulatory Act. If we are to hold that a given rate is reasonable just because the Commission has said it was reasonable, review becomes a costly, time-consuming pageant of no practical value to anyone. If on the other hand we are to bring judgment of our own to the task, we should for the guidance of the regulators and the regulated reveal something of the philosophy, be it legal or economic or social, which guides us. We need not be slaves to a formula but unless we can point out a rational way of reaching our conclusions they can only be accepted as resting on intuition or predilection. I must admit that I possess no instinct by which to know the “reasonable” from the “unreasonable” in prices and must seek some conscious design for decision.
The Court sustains this order as reasonable, but what makes it so or what could possibly make it otherwise, *646I cannot learn. It holds that: “it is the result reached not the method employed which is controlling”; “the fact that the method employed to reach that result may contain infirmities is not then important” and it is not “important to this case to determine the various permissible ways in which any rate base on which the return is computed might be arrived at.” The Court does lean somewhat on considerations of capitalization and dividend history and requirements for dividends on outstanding stock. But I can give no real weight to that for it is generally and I think deservedly in discredit as any guide in rate cases.41
Our books already contain so much talk of methods of rationalizing rates that we must appear ambiguous if we announce results without our working methods. We are confronted with regulation of a unique type of enterprise which I think requires considered rejection of much conventional utility doctrine and adoption of concepts of “just and reasonable” rates and practices and of the “public interest” that will take account of the peculiarities of the business.
The Court rejects the suggestions of this opinion. It says that the Committees in reporting the bill which became the Act said it provided “for regulation along recognized and more or less standardized lines” and that there was “nothing novel in its provisions.” So saying it sustains a rate calculated on a novel variation of a rate base theory which itself had at the time of enactment of the legislation been recognized only in dissenting opinions. Our difference seems to be between unconscious innovation,42 and the purposeful and deliberate innovation I *647would make to meet the necessities of regulating the industry before us.
Hope’s business has two components of quite divergent character. One, while not a conventional common-carrier undertaking, is essentially a transportation enterprise consisting of conveying gas from where it is produced to point of delivery to the buyer. This is a relatively routine operation not differing substantially from many other utility operations. The service is produced by an investment in compression and transmission facilities. Its risks are those of investing in a tested means of conveying a discovered supply of gas to a known market. A rate base calculated on the prudent investment formula would seem a reasonably satisfactory measure for fixing a return from that branch of the business whose service is roughly proportionate to the capital invested. But it has other consequences which must not be overlooked. It gives marketability and hence “value” to gas owned by the company and gives the pipeline company a large power over the marketability and hence “value” of the production of others.
The other part of the business — to reduce to possession an adequate supply of natural gas — is of opposite character, being more erratic and irregular and unpredictable in relation to investment than any phase of any other utility business. A thousand feet of gas captured and severed from real estate for delivery to consumers is recognized under our law as property of much the same nature as a ton of coal, a barrel of oil, or a yard of sand. The value to be allowed for it is the real battleground between the investor and consumer. It is from this part of the business that the chief difference between the parties as to a proper rate base arises.
Is it necessary to a “reasonable” price for gas that it be anchored to a rate base of any kind? Why did courts in the first place begin valuing “rate bases” in order to “value” something else? The method came into vogue *648infixing rates for transportation service which the public obtained from common carriers. The public received none of the'carriers’ physical property but did make some use -of it. The carriage was often a monopoly so there were no open market criteria as to reasonableness. The “value” or “cost” of what was put to use in the service by the carrier was not a remote or irrelevant consideration in making such rates. Moreover the difficulty of appraising an intangible service was thought to be simplified if it could be related to physical property which was visible and measurable and the items of which might have market value. The court hoped to reason from the known to the unknown. But gas fields turn this method topsy turvy. Gas itself is tangible, possessible, and does have a market and a price in the field. The value of the rate base is more elusive than that of gas. It consists of intangibles — leaseholds and freeholds — operated and unop-erated — of little use in themselves except as rights to reach and capture gas. Their value lies almost wholly in predictions of discovery, and of price of gas when captured, and bears little relation to cost of tools and supplies and labor to develop it. Gas is what Hope sells and it can be directly priced more reasonably and easily and accurately than the components of a rate base can be valued. Hence the reason for resort to a roundabout way of rate base price fixing does not exist in the case of gas in the field.
But if found, and by whatever method found, a rate base is little help in determining reasonableness of the price of gas. Appraisal of present value of these intangible rights to pursue fugitive gas depends on the value assigned to the gas when captured. The “present fair value” rate base, generally in ill repute,43 is not even urged by the gas company for valuing its fields.
*649The prudent investment theory has relative merits in fixing rates for a utility which creates its service merely by its investment. The amount and quality of service rendered by the usual utility will, at least roughly, be measured by the amount of capital it puts into the enterprise. But it has no rational application where there is no such relationship between investment and capacity to serve. There is no such relationship between investment and amount of gas produced. Let us assume that Doe and Roe each produces in West Virginia for delivery to Cleveland the same quantity of natural gas per day. Doe, however, through luck or foresight or whatever it takes, gets his gas from investing $50,000 in leases and drilling. Roe drilled poorer territory, got smaller wells,- and has invested $250,000. Does anybody imagine that Roe can get or ought to get for his gas five times as much as Doe because he has spent five times as much? The service one renders to society in the gas business is measured by what he gets out of the ground, not by what he puts into it, and there is little more relation between the investment and the results than in a game of poker.
Two-thirds of the gas Hope handles it buys from about 340 independent producers. It is obvious that the principle of rate-making applied to Hope’s own gas cannot be applied, and has not been applied, to the bulk of the gas Hope delivers. It is not probable that the investment of any two of these producers will bear the same ratio to their investments. The gas, however, all goes to the same use, has the same utilization value and the same ultimate price.
To regulate such an enterprise by undiscriminatingly transplanting any body of rate doctrine conceived and *650adapted to the ordinary utility business can serve the “public interest” as the Natural Gas Act requires, if at all, only by accident. Mr. Justice Brandéis, the pioneer juristic advocate of the prudent investment theory for man-made utilities, never, so far as I am able to discover, proposed its application to a natural gas case. On the other hand, dissenting in Pennsylvania v. West Virginia, he reviewed the problems of gas supply and said, “In no other field of public service regulation is the controlling body confronted with factors so baffling as in the natural gas industry; and in none is continuous supervision and control required in so high a degree.” 262 U. S. 553, 621. If natural gas rates are intelligently to be regulated we must fit our legal principles to the economy of the industry and not try to fit the industry to our books.
As our decisions stand the Commission was justified in believing that it was required to proceed by the rate base method even as to gas in the field. For this reason the Court may not merely wash its hands of the method and rationale of rate making. The fact is that this Court, with no discussion of its fitness, simply transferred the rate base method to the natural gas industry. It happened in Newark Natural Gas & Fuel Co. v. City of Newark, Ohio, 242 U. S. 405 (1917), in which the company wanted 25 cents per m. c. f., and under the Fourteenth Amendment challenged the reduction to 18 cents by ordinance. This Court sustained the reduction because the court below “gave careful consideration to the questions of the value of the property at the time of the inquiry,” and whether the rate “would be sufficient to provide a fair return on the value of the property.” The Court said this method was “based upon principles thoroughly established by repeated decisions of this court,” citing many cases, not one of which involved natural gas or a comparable wasting natural resource. Then came issues as to state power to *651regulate as affected by'the commerce clause. Public Utilities Commission v. Landon, 249 U. S. 236 (1919); Pennsylvania Gas Co. v. Public Service Commission, 252 U. S. 23 (1920). These questions settled, the Court again was called upon in natural gas cases to consider state rate-making claimed to be invalid under the Fourteenth Amendment. United Fuel Gas Co. v. Railroad Commission of Kentucky, 278 U. S. 300 (1929); United Fuel Gas Co. v. Public Service Commission of West Virginia, 278 U. S. 322 (1929). Then, as now, the differences were “due chiefly to the difference in value ascribed by each to the gas rights and leaseholds.” 278 U. S. 300, 311. No one seems to have questioned that the rate base method must be pursued and the controversy was as to what rate base must be used. Later the “value” of gas in the field was questioned in determining the amount a regulated company should be allowed to pay an affiliate therefor — a state determination also reviewed under the Fourteenth Amendment. Dayton Power & Light Co. v. Public Utilities Commission of Ohio, 292 U. S. 290 (1934); Columbus Gas & Fuel Co. v. Public Utilities Commission of Ohio, 292 U. S. 398 (1934). In both cases, one of which sustained and one of which struck down a fixed rate, the Court assumed the rate base method as the legal way of testing reasonableness of natural gas prices fixed by public authority, without examining its real relevancy to the inquiry.
Under the weight of such precedents we cannot expect the Commission to initiate economically intelligent methods of fixing gas prices. But the Court now faces a new plan of federal regulation based on the power to fix the price at which gas shall be allowed to move in interstate commerce. I should now consider whether these rules devised under the Fourteenth Amendment are the exclusive tests of a just and reasonable rate under the federal statute, inviting reargument directed to that point *652if necessary. As I see it now I would be prepared to hold that these rules do not apply to a natural gas case arising under the Natural Gas Act.
Such a holding would leave the Commission to fix the price of gas in the field as one would fix maximum prices •of oil or milk or coal, or any other commodity. Such a price is not calculated to produce a fair return on the synthetic value of a rate base of any individual producer, and would not undertake to assure a fair return to any producer. The emphasis would shift from the producer to the product, which would be regulated with an eye to average or typical producing conditions in the field.
Such a price fixing process on economic lines would offer little temptation to the judiciary to become back seat drivers of the price fixing machine. The unfortunate effect of judicial intervention in this field is to divert the attention of those engaged in the process from what is economically wise to what is legally permissible. It is ■probable that price reductions would reach economically unwise and self-defeating limits before they would reach constitutional ones. Any constitutional problems growing out of price fixing are quite different than those that have heretofore been considered to inhere in rate making. A producer would have difficulty showing the invalidity of such a fixed price so long as he voluntarily continued to sell his product in interstate commerce. Should he withdraw and other authority be invoked to compel him to part with his property, a different problem would be presented.
Allowance in a rate to compensate for gas removed from gas lands, whether fixed as of point of production or as of point of delivery, probably best can be measured by a functional test applied to the whole industry. For good or ill we depend upon private enterprise to exploit these natural resources for public consumption. The function which an allowance for gas in the field should perform *653for society in such circumstances is to be enough and no more than enough to induce private enterprise completely and efficiently to utilize gas resources, to acquire for public service any available gas or gas rights and to deliver gas at a rate and for uses which will be in the future as well as in the present public interest.
The Court fears that “if we are now to tell the Commission to fix the rates so as to discourage particular uses, we would indeed be injecting into a rate case a ‘novel’ doctrine . . .” With due deference I suggest that there is nothing novel in the idea that any change in price of a service or commodity reacts to encourage or discourage its use. The question is not whether such consequences will or will not follow; the question is whether effects must be suffered blindly or may be intelligently selected, whether price control shall have targets at which it deliberately aims or shall be handled like a gun in the hands of one who does not know it is loaded.
We should recognize “price” for what it is — a tool, a means, an expedient. In public hands it has much the same economic effects as in private hands. Hope knew that a concession in industrial price would tend to build up its volume of sales. It used price as an expedient to that end. The Commission makes another cut in that same price but the Court thinks we should ignore the effect that it will have on exhaustion of supply. The fact is that in natural gas regulation price must be used to reconcile the private property right society has permitted to vest in an important natural resource with the claims of society upon it — price must draw a balance between wealth and welfare.
To carry this into techniques of inquiry is the task of the Commissioner rather than of the judge, and it certainly is no task to be solved by mere bookkeeping but requires the best economic talent available. There would doubtless be inquiry into the price gas is bringing in the *654field, how far that price is established by arm’s length bargaining and how far it may be influenced by agreements in restraint of trade or monopolistic influences. What must Hope really pay to get and to replace gas it delivers under this order? If it should get more or less than that for its own, how much and why? How far are such prices influenced by pipe line access to markets and if the consumers pay returns on the pipe lines how far should the increment they cause go to gas producers? East Ohio is itself a producer in Ohio.44 What do Ohio authorities require Ohio consumers to pay for gas in the field? Perhaps these are reasons why the Federal Government should put West Virginia gas at lower or at higher rates. If so what are they? Should East Ohio be required to exploit its half million acres of unoperated reserve in Ohio before West Virginia resources shall be supplied on a devalued basis of which that State complains and for which she threatens measures of self keep? What is gas worth in terms of other fuels it displaces?
A price cannot be fixed without considering its effect on the production of gas. Is it an incentive to continue to exploit vast unoperated reserves? Is it conducive to deep drilling tests the result of which we may know only after trial? Will it induce bringing gas from afar to supplement or even to substitute for Appalachian gas?45 Can it be had from distant fields as cheap or cheaper? If so, that competitive potentiality is certainly a relevant consideration. Wise regulation must also consider, as a private buyer would, what alternatives the producer has *655if the price is not acceptable. Hope has intrastate business and domestic and industrial customers. What can it do by way of diverting its supply to intrastate sales? What can it do by way of disposing of its operated or reserve acreage to industrial concerns or other buyers? What can West Virginia do by way of conservation laws, severance or other taxation, if the regulated rate offends? It must be borne in mind that while West Virginia was prohibited from giving her own inhabitants a priority that discriminated against interstate commerce, we have never yet held that a good faith conservation act, applicable to her own, as well as to others, is not valid. In considering alternatives, it must be noted that federal regulation is very incomplete, expressly excluding regulation of “production or gathering of natural gas,” and that the only present way to get the gas seems to be to call it forth by price inducements. It is plain that there is a downward economic limit on a safe and wise price.
But there is nothing in the law which compels a commission to fix a price at that “value” which a company might give to its product by taking advantage of scarcity, or monopoly of supply. The very purpose of fixing maximum prices is to take away from the seller his opportunity to get all that otherwise the market would award him for his goods. This is a constitutional use of the power to fix maximum prices, Block v. Hirsh, 256 U. S. 135; Marcus Brown Holding Co. v. Feldman, 256 U. S. 170; International Harvester Co. v. Kentucky, 234 U. S. 216; Highland v. Russell Car & Snow Plow Co., 279 U. S. 253, just as the fixing of minimum prices of goods in interstate commerce is constitutional although it takes away from the buyer the advantage in bargaining which market conditions would give him. United States v. Darby, 312 U. S. 100; Mulford v. Smith, 307 U. S. 38; United States v. Rock Royal Cooperative, 307 U. S. 533; Sunshine Anthracite Coal Co. v. Adkins, 310 U. S. 381. The Commission has power to fix *656a price that will be both maximum and minimum and it has the incidental right, and I think the duty, to choose the economic consequences it will promote or retard in production and also more importantly in consumption, to which I now turn.
If we assume that the reduction in company revenues is warranted we then come to the question of translating the allowed return into rates for consumers or classes of consumers. Here the Commission fixed a single rate for all gas delivered irrespective of its use despite the fact that Hope has established what amounts to two rates — a high one for domestic use and a lower one for industrial contracts.46 The Commission can fix two prices for interstate gas as readily as one — a price for resale to domestic users and another for resale to industrial users. This is the pattern Hope itself has established in the very contracts over which the Commission is expressly given jurisdiction. Certainly the Act is broad enough to permit two prices to be fixed instead of one, if the concept of the “public interest” is not unduly narrowed.
The Commission’s concept of the public interest in natural gas cases which is carried today into the Court’s opinion was first announced in the opinion of the minority in the Pipeline case. It enumerated only two “phases of the public interest: (1) the investor interest; (2) the consumer interest,” which it emphasized to the exclusion of all others. 315 U. S. 575, 606. This will do well enough in dealing with railroads or utilities supplying manufactured gas, electric power, a communications service or transportation, where utilization of facilities does not impair their future usefulness. Limitation of supply, however, brings into a natural gas case another phase of the public interest that to my mind overrides both the owner *657and the consumer of that interest. Both producers and industrial consumers have served their immediate private interests at the expense of the long-range public interest. The public interest, of course, requires stopping unjust enrichment of the owner. But it also requires stopping unjust impoverishment of future generations. The public interest in the use by Hope’s half million domestic consumers is quite a different one from the public interest in use by a baker’s dozen of industries.
Prudent price fixing it seems to me must at the very threshold determine whether any part of an allowed return shall be permitted to be realized from sales of gas for resale for industrial use. Such use does tend to level out daily and seasonal peaks of domestic demand and to some extent permits a lower charge for domestic service. But is that a wise way of making gas cheaper when, in comparison with any substitute, gas is already a cheap fuel? The interstate sales contracts provide that at times when demand is so great that there is not enough gas to go around domestic users shall first be served. Should the operation of this preference await the day of actual shortage? Since the propriety of a preference seems conceded, should it not operate to prevent the coming of a shortage as well as to mitigate its effects? Should industrial use jeopardize tomorrow’s service to householders any more than today’s? If, however, it is decided to cheapen domestic use by resort to industrial sales, should they be limited to the few uses for which gas has special values or extend also to those who use it only because it is cheaper than competitive fuels?47 And how much cheaper should indus*658trial gas sell than domestic gas, and how, much advantage should it have over competitive fuels? If industrial gas is to contribute at all to lowering domestic rates, should it not be made to contribute the very maximum of which it is capable, that is, should not its price be the highest at which the desired volume of sales can be realized?
If I were to answer I should say that the household rate should be the lowest that can be fixed under commercial conditions that will conserve the supply for that use. The lowest probable rate for that purpose is not likely to speed exhaustion much, for it still will be high enough to induce economy, and use for that purpose has more nearly reached the saturation point. On the other hand the demand for industrial gas at present rates already appears to be increasing. To lower further the industrial rate is merely further to subsidize industrial consumption and speed depletion. The impact of the flat reduction *659of rates ordered here admittedly will be to increase the industrial advantages of gas over competing fuels and to increase its use. I think this is not, and there is no finding by the Commission that it is, in the public interest.
There is no justification in this record for the present discrimination against domestic users of gas in favor of industrial users. It is one of the evils against which the Natural Gas Act was aimed by Congress and one of the evils complained of here by Cleveland and Akron. If Hope’s revenues should be cut by some $3,600,000 the whole reduction is owing to domestic users. If it be considered wise to raise part of Hope’s revenues by industrial purpose sales, the utmost possible revenue should be raised from the least consumption of gas. If competitive relationships to other fuels will permit, the industrial price should be substantially advanced, not for the benefit of the Company, but the increased revenues from the advance should be applied to reduce domestic rates. For in my opinion the “public interest” requires that the great volume of gas now being put to uneconomic industrial use should either be saved for its more important future domestic use or the present domestic user should have the full benefit of its exchange value in reducing his present rates.
Of course the Commission’s power directly to regulate does not extend to the fixing of rates at which the local company shall sell to consumers. Nor is such power required to accomplish the purpose. As already pointed out, the very contract the Commission is altering classifies the gas according to the purposes for which it is to be resold and provides differentials between the two classifications. It would only be necessary for the Commission to order that all gas supplied under paragraph (a) of Hope’s contract with the East Ohio Company shall be *660at a stated price fixed to give to domestic service the entire reduction herein and any further reductions that may prove possible by increasing industrial rates. It might further provide that gas delivered under paragraph (b) of the contract for industrial purposes to those industrial customers Hope has approved in writing shall be at such other figure as might be found consistent with the public interest as herein defined. It is too late in the day to contend that the authority of a regulatory commission does not extend to a consideration of public interests which it may not directly regulate and a conditioning of its orders for their protection. Interstate Commerce Commission v. Railway Labor Executives Assn., 315 U. S. 373; United States v. Lowden, 308 U. S. 225.
Whether the Commission will assert its apparently broad statutory authorization over prices and discrimina-tions is, of course, its own affair, not ours. It is entitled to its own notion of the “public interest” and its judgment of policy must prevail. However, where there is ground for thinking that views of this Court may have constrained the Commission to accept the rate-base method of decision and a particular single formula as “all important” for a rate base, it is appropriate to make clear the reasons why I, at least, would not be so understood. The Commission is free to face up realistically to the nature and peculiarity of the resources in its control, to foster their duration in fixing price, and to consider future interests in addition to those of investors and present consumers. If we return this case it may accept or decline the proffered freedom. This problem presents the Commission an unprecedented opportunity if it will boldly make sound economic considerations, instead of legal and accounting theories, the foundation of federal policy. I would return the case to the Commission and thereby be.clearly quit of what now may appear to be some responsibility for perpetrating a short-sighted pattern of natural gas regulation.

 315 U.S. 575.

 Judge Dobie, dissenting below, pointed out that the majority opinion in the Pipeline case “contains no express discussion of the Prudent Investment Theory” and that the concurring opinion contained a clear one, and said, “It is difficult for me to believe that the majority of the Supreme Court, believing otherwise, would leave such a statement unchallenged.” The fact that two other Justices had as matter of record in our books long opposed the reproduction cost theory of rate bases and had commented favorably on the pru*629dent investment theory may have influenced that conclusion. See opinion of Mr. Justice Frankfurter in Driscoll v. Edison Light & Power Co., 307 U. S. 104, 122, and my brief as Solicitor General in that case. It should be noted, however, that these statements were made, not in a natural gas case, but in an electric power case — a very important distinction, as I shall try to make plain.

 Natural gas from the Appalachian field averages about 1,050 to 1,150 B. T. U. content, while by-product manufactured gas is about 530 to 540. Moody’s Manual of Public Utilities (1943) 1,350; Young-berg, Natural Gas (1930) 7.

 Sen. Rep. No. 1162, 75th Cong., 1st Sess., 2.

 Arnold and Kemnitzer, Petroleum in the United States and Possessions (1931) 78.

 Id. at 62-63.

 Id., at 61.

 At Fredonia, New York, in 1821, natural gas was conveyed from a shallow well to some thirty people. The lighthouse at Barcelona Harbor, near what is now Westfield, New York, was at about that *631time and for many years afterward lighted by gas that issued from a crevice. Report on Utility Corporations by Federal Trade Commission, Sen. Doc. 92, Pt. 84-A, 70th Cong., 1st Sess., 8-9.

 In that year Pennsylvania enacted “An Act to provide for the incorporation and regulation of natural gas companies.” Penn. Laws 1885, No. 32.

 See Steptoe and Hoffheimer’s Memorandum for Governor Corn-well of West Virginia (1917) 25 West Virginia Law Quarterly 257; see also Report on Utility Corporations by Federal Trade Commssion, Sen. Ddc. No. 92, Pt. 84-A, 70th Cong., 1st Sess.

 Arnold and Kemnitzer, Petroleum in the United States and Possessions (1931) 73.

 Id. at 63.

 Id. at 64.

 See Report on Utility Corporations by Federal Trade Commission, Sen. Doc. No. 92, Pt. 84-Á, 70th Cong., 1st Sess.

 Pennsylvania v. West Virginia, 262 U. S. 553. For conditions there which provoked this legislation, see 25 West Virginia Law Quarterly 257.

 People ex rel. Pavilion Gas Co. v. Public Service Commission, 188 App. Div. 36, 176 N. Y. S. 163.

 Village of Falconer v. Pennsylvania Gas Co., 17 State Department Reports (N. Y.) 407.

 See, for example, Public Service Commission v. Iroquois Natural Gas Co., 108 Misc. 696, 178 N. Y. S. 24; Park Abbott Realty Co. v. Iroquois Gas Co., 102 Misc. 266, 168 N. Y. S. 673; Public Service Commission v. Iroquois Natural Gas Co., 189 App. Div. 545, 179 N. Y. S. 230.

 People ex rel. Pennsylvania Gas Co. v. Public Service Commission, 196 App. Div. 514, 189 N. Y. S. 478.

 East Ohio Gas Co. v. Akron, 81 Ohio St. 33, 90 N. E. 40; Newcomerstown v. Consolidated Gas Co., 100 Ohio St. 494, 127 N. E. 414; Gress v. Village of Ft. Loramie, 100 Ohio St. 35, 125 N. E. 112; Jamestown v. Pennsylvania Gas Co., 263 F. 437, 264 F. 1009. See also United Fuel Gas Co. v. Railroad Commission, 278 U. S. 300, 308.

 The New York Public Service Commission said: “While the transportation of natural gas through pipe lines from one state, to another *634state is interstate commerce . . ., Congress has not taken over the regulation of that particular industry. Indeed, it has expressly excepted it from the operation of the Interstate Commerce Commissions Law (Interstate Commerce Commissions Law, section 1). It is quite clear, therefore, that this Commission can not require a Pennsylvania corporation producing gas in Pennsylvania to transport it and deliver it in the State of New York, and that the Interstate Commerce Commission is likewise powerless. If there exists such a power, and it seems that there does, it is a power vested in Congress and by it not yet exercised. There is no available source of supply for the Crystal City Company at present except through purchasing from the Potter Gas Company. It is possible that this Commission might fix a price at which the Potter Gas Company should sell if it sold at all, but as the Commission can not require it to supply gas in the State of New York, the exercise of such a power to fix the price, if such power exists, would merely say, sell at this price or keep out of the State.” Lane v. Crystal City Gas Co., 8 New York Public Service Comm. Reports, Second District, 210,212.

 Proclamation by the President of September 16, 1918; Rules and Regulations of H. A. Garfield, Fuel Administrator, September 24, 1918.

 For example, the Iroquois Gas Corporation which formerly served Buffalo, New York, with natural gas ranging from 1050 to 1150 b. t. u. per cu. ft., now mixes a by-product gas of between 530 and 540 b. t. u. in proportions to provide a mixed gas of about 900 b. t. u. per cu. ft. For space heating or water heating its charges range from 65 cents for the first 10 m. c. f. per month to 55 cents for all above 25 m. c. f. per month. Moody’s Manual of Public Utilities (1943) 1350.

 The United States Fuel Administration made the following cooking value comparisons, based on tests made in the Department of Home Economics of Ohio State University:
Natural gas at 1.12 per M. is equivalent to coal at $6.50 per ton.
Natural gas at 2.00 per M. is equivalent to gasoline at 27s¡ per gal.
Natural gas at 2.20 per M. is equivalent to electricity at 30 per k. w. h.
Natural gas at 2.40 per M. is equivalent to coal oil at 150 per gal.
Use and Conservation of Natural Gas, issued by U. S. Fuel Administration (1918) 5.

 See Brief on Behalf of Legislation Imposing an Excise Tax on Natural Gas, submitted to N. R. A. by the United Mine Workers of America and the National Coal Association.

 Brief of National Gas Association and United Mine Workers, supra note 26, pp. 35, 36, compiled from Bureau of Mines Reports.

 From the source quoted in the preceding note the spread elsewhere is shown to be:

State Industrial Domestic

Illinois. 29.2 1.678
Louisiana. 10.4 59.7
Oklahoma. 11.2 41.5
Texas. 13.1 59.7
Alabama. 17.8 1.227
Georgia. 22.9 1.043

 In Corning, New York, rates were initiated by the Crystal City Gas Company as follows: 700 for the first 5,000 cu. ft. per month; 800 from 5,000 to 12,000; $1.00 for all over 12,000. The Public Service Commission rejected these rates and fixed a flat rate of 580 per m. c. f. Lane v. Crystal City Gas Co., 8 New York Public Service Comm. Reports, Second District, 210.
The Pennsylvania Gas Company (National Fuel Gas Company group) also attempted a sliding scale rate for New York consumers, net per month as follows: First 5,000 feet, 350; second 5,000 feet, 45Í; third 5,000 feet, 500; all above 15,000, 550. This was eventually abandoned, however. The company’s present scale in Pennsylvania appears to be reversed to the following net monthly rate: first 3 m. o. f., 750; next 4 m. c. f., 600; next 8 m. c. f., 550; over 15 m. c. f., 500. Moody’s Manual of Public Utilities (1943) 1350. In New York it now serves a mixed gas.
For a study of effect of sliding scale rates in reducing consumption see 11 Proceedings of Natural Gas Association of America (1919) 287.

 See Report on Utility Corporations by Federal Trade Commission, Sen. Doc. 92, Pt. 84-A, 70th Cong., 1st Sess.

 Four holding company systems control over 55 per cent of all natural gas transmission lines in the United States. They are Columbia Gas and Electric Corporation, Cities Service Co., Electric Bond and Share Co., and Standard Oil Co. of New Jersey. Columbia alone controls nearly 25 per cent, and fifteen companies account for over 80 per cent of the total. Report on Utility Corporations by Federal Trade Commission, Sen. Doc. 92, Pt. 84-A, 70th Cong., 1st Sess., 28.
In 1915, so it was reported to the Governor of West Virginia, 87 per cent of the total gas production of that state was under control of eight companies. Steptoe and Hoffheimer, Legislative Regulation of Natural Gas Supply in West Virginia, 17 West Virginia Law Quarterly 257, 260. Of these, three were subsidiaries of the Columbia system and others were subsidiaries of larger systems. In view of inter-system sales and interlocking interests it may be doubted whether there is much real competition among these companies.

 This pattern with its effects on local regulatory efforts will be observed in our decisions. See United Fuel Gas Co. v. Railroad Commission, 278 U. S. 300; United Fuel Gas Co. v. Public Service Commission, 278 U. S. 322; Dayton Power & Light Co. v. Public Utilities Commission, 292 U. S. 290; Columbus Gas & Fuel Co. v. Public Utilities Commission, 292 U. S. 398, and the present case.

 15 U. S. C. § 717 (a). (Italics supplied throughout this paragraph.)

 §7 (c), 52 Stat. 825.

 15 U. S. C. §717f.

 Id., § 717c (e).

 Id., § 717c (b).

 Id., § 717d (a).

 Sen. Rep. No. 1162, 75th Cong., 1st Sess., 2.

 The list of East Ohio Gas Company’s special industrial contracts thus expressly under Hope’s control and their demands are as follows:

Customer Ordinary Daily Requirements.

Republic Steel Corporation. 15,000,000 cu. ft.
Otis Steel Company. 10,000,000
Timken Roller Bearing Co. 7,500,000
Youngstown Sheet & Tube Co. 7,000,000
U. S. Steel Corp. — Subsidiaries. 6,500,000
General Electric Company. 2,500,000
Pittsburgh Plate Glass Co. 2,000,000
Niles Rolling Mill Company. 1,500,000
Chase Brass & Copper Company. 700,000
U. S. Aluminum Company. 400,000
Mahoning Valley Steel Company. 400,000
Babcock & Wilcox Company. 400,000
Canton Stamping & Enameling Co... 350,000

 To make a fetish of mere accounting is to shield from examination the deeper causes, forces, movements, and conditions which should govern rates. Even as a recording of current transactions, bookkeeping is hardly an exact science. As a representation of the condition and trend of a business, it uses symbols of certainty to express values *644that actually are in constant flux. It may be said that in commercial or investment banking or any business extending credit success depends on knowing what not to believe in accounting. Few concerns go into bankruptcy or reorganization whose books do not show them solvent and often even profitable. If one cannot rely on accountancy accurately to disclose past or current conditions of a business, the fallacy of using it as a sole guide to future price policy ought to be apparent. However, our quest for certitude is so ardent that we pay an irrational reverence to a technique which uses symbols of certainty, even though experience again and again warns us that they are delusive. Few writers have ventured to challenge this American idolatry, but see Hamilton, Cost as a Standard for Price, 4 Law and Contemporary Problems 321, 323-25. He observes that “As the apostle would put it, accountancy is all things to all men. ... Its purpose determines the character of a system of accounts.” He analyzes the hypothetical character of accounting and says “It was no eternal mold for pecuniary verities handed down from on high. It was — like logic, or algebra, or the device of analogy in the law — an ingenious contrivance of the human mind to serve a limited and practical purpose.” “Accountancy is far from being a pecuniary expression of all that is industrial reality. It is an instrument, highly selective in its application, in the service of the institution of money making.” As to capital account he observes “In an enterprise in lusty competition with others of its kind, survival is the thing and the system of accounts has its focus in solvency. . . . Accordingly depreciation, obsolescence, and other factors which carry no immediate threat are matters of lesser concern and the capital account is likely to be regarded as a secondary phenomenon. . . . But in an enterprise, such as a public utility, where continued survival seems assured, solvency is likely to be taken for granted. ... A persistent and ingenious attention is likely to be directed not so much to securing the upkeep of the physical property as to making it certain that capitalization fails in not one whit to give full recognition to every item that should go into the account.”

 See 2 Bonbright, Valuation of Property (1937) 1112.

 Bonbright says, ". . . the vice of traditional law lies, not in its adoption of excessively rigid concepts of value and rules of valuation, but rather in its tendency to permit shifts in meaning that are inept, or else that are ill-defined because the judges that make them will not openly admit that they are doing so.” Id., 1170.

 “The attempt to regulate rates by reference to a periodic or occasional reappraisal of the properties has now been tested long enough *649to confirm the worst fears of its critics. Unless its place is .taken by s.ome more promising scheme of rate .control, the days of private. ownership undér government regulation may' be numbered.” 2 Bon-bright, Valuation of Property (1937) 1190.

 East Ohio itself owns natural gas rights in 550,600 acres, 518,526 of which are reserved and 32,074 operated, by 375 wells. Moody’s Manual of Public Utilities (1943) 5.

 Hope has asked a certificate of convenience and necessity to lay 1,140 miles of 22-inch pipeline from Hugoton gas fields in southwest Kansas to West Virginia to carry 285 million cu. ft. of natural gas per day. The cost was estimated at $51,000,000. Moody’s Manual of Public Utilities (1943) 1760.

 1 find little information as to the rates for industries in the record and none at all in such usual sources as Moody’s Manual.

 The Federal Power Commission has touched upon the problem of conservation in connection with an application for a certificate permitting construction of a 1,500-mile pipeline from southern Texas to New York City and says: “The Natural Gas Act as presently drafted does not enable the Commission to treat fully the serious implications of such a problem. The question should be raised as to whether the *658proposed use of natural gas would not result in displacing a less valuable fuel and create hardships in the industry already supplying the market, while at the same time rapidly depleting the country’s natural-gas reserves. Although, for a period of perhaps 20 years, the natural gas could be so priced as to appear to offer an apparent saving in fuel costs, this would mean simply that social costs which must eventually be paid had been ignored.
“Careful study of the entire problem may lead to the conclusion that use of natural gas should be restricted by functions rather than by areas. Thus, it is especially adapted to space and water heating in urban homes and other buildings and to the various industrial heat processes which require concentration of heat, flexibility of control, and uniformity of results. Industrial uses to which it appears particularly adapted include the treating and annealing of metals, the operation of kilns in the ceramic, cement, and lime industries, the manufacture of glass in its various forms, and use as a raw material in the chemical industry. General use of natural gas under boilers for the production of steam is, however, under most circumstances of very questionable social economy.” Twentieth Annual Report of the Federal Power Commission (1940) 79.