Valuation and Rate Problems
| Author | William L. Ransom |
| Published date | 01 January 1932 |
| Date | 01 January 1932 |
| DOI | http://doi.org/10.1177/000271623215900112 |
| Subject Matter | Articles |
84
Valuation
and
Rate
Problems
By
WILLIAM
L.
RANSOM
WO
or
three
years
ago,
there
were
signs
and
portents
that
a
great
political
issue
was
in
the
making.
The
Supreme
Court
of
the
Nation
had
di-
vided
upon
a
question
of
economics
and
legal
precedent
entering
into &dquo;the
law
of
the
land.&dquo;
1
A
majority
of
the
Court
had
recognized
the
precedent
set
thirty
years
ago,2
as
to
the
elements
of
the
test
to
be
applied
in
determining
whether,
in
the
instances
of
controversy,
the
state
regulatory
action
as
to
utility
rates
had
gone
beyond
the
limits
of
what
could
be
compelled.
The
major-
ity
of
the
Court
adhered
to
&dquo;the
law
of
the
land &dquo;
as
hitherto
declared,
and
con-
cerned
itself
with
standards
of
its
use
and
concrete
application.
3
A
minority
of
the
Court
challenged
the
fundamental
concept,
and
a
mili-
tant
body
of
thought
and
leadership
rallied
to
that
standard
of
dissent.
Professors
in
colleges
became
very
earnest
in
support
of
the
minority
opinions.
Politicians
tried
to
drama-
tize
an
irrepressible
conflict,
upon
which
the
future
of
effective
regulation
was
declared
to
depend.
Reams
of
reports
were
written
in
behalf
of
a
particular
theory,
as
opposed
to
a
pragmatic
and
practical
ascertainment
of
value.
The
claim
was
earnestly
and
often
sincerely
made
that
acceptance
of
the
Court’s
view
would
make
regulation
unworkable,
would
extort
uncounted
millions
from
utility
patrons
in
exces-
sive
rates,
would
undermine
public
confidence
in
commissions
and
courts
and
constitutions,
and
would
finally
compel
a
reluctant
public
to
assume
the
burden
of
owning
and
operating
the
utilities
whose
rates
they
had
been
prevented
from
controlling.
It
may
be
much
too
early
to
tell
what
may
be
the
eventualities
of
this
subject.
Certainly
the
last
word
has
not
been
said,
and
perhaps
never
will
be
said,
as
to
the
processes
and
the
public
control
of
rate
making.
The
law
of
the
subject
of
valuation,
where
valuation
becomes
necessary
in
that
process
of
public
control,
was
declared
by
the
Supreme
Court
before
many
of
us
now
active
in
this
field
of
law
were
on
the
scene.
It
is
true
that
the
pres-
ent
generation
of
lawyers
has
generally
been
inclined
to
deal
with
the
law
as
it
is,
rather
than
with
discussions
of
what
it
might
or
should
have
been.
But
even
the
most
conservative
must
rec-
ognize
that
improvements
may
always
be
expected
and
hoped
for
in
the
law
and
procedure
of
public
control,
as
al-
ways
in
the
work
of
the
courts
and
other
phases
of
the
administration
of
justice
under
law;
and
rate
making
will
always
be
in
the
forefront
of
open-
minded
consideration,
under
any
struc-
ture
of
corporate
organization
or
any
system
of
private
or
public
ownership.
VALUATION
ISSUE
DISAPPEARING
I
have
no
desire
to
minimize
the
valuation
issue
or
to
portray
its
passing;
still
less,
to
discourage
or
deter
those
who
are
trying
to
keep
it
alive.
From
observation
and
experience,
however,
I
submit
the
following
for
consideration:
The
so-called &dquo;valuation
controversy&dquo;
1
Southwestern
Bell
Telephone
Co.
v.
Commis-
sion,
262
U.
S.
276;
McCardle
v.
Indianapolis
Water
Co.,
272
U.
S.
400.
2
Smyth
v.
Ames,
169
U.
S.
547.
3
McCardle
v.
Indianapolis
Water
Co.,
272
U.
S.
400;
St.
Louis
and
O’Fallon
R.
Co.
v.
U.
S.,
279
U.
S.
461.
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