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W Dlence.
VALUATION

OF

PUBLIC SERVICE CORPORATIONS

LEGAL AND ECONOMIC PHASES OF VALUA-
TION FOR RATE MAKING AND

PUBLIC PURCHASE

BY

ROBERT H. WHITTEN, PH.D.

Harve

THE BANKS LAW PUBLISHING CO.

NEW YORK

1914

Library

HD 2766 .W624

1914

COPYRIGHT, 1912, BY ROBERT H. WHITTEN

PACSS OF T. MOREY A SOU GREENFIELD, MASS., U. S. A.

Transport,

PREFACE

The valuation of public service property is a subject that has only recently come into prominence. It has become of immense importance in recent years with the development of public control over public service corporations. Since the leading case of Smyth v. Ames in 1898, holding that ordinarily the principal test of whether a rate schedule or other regulation is illegal and confiscatory is whether it permits the company to earn a fair return on the "fair value” of its property, the question of what elements will be considered by courts and commissions in determining "fair value” has become the critical problem in public service regulation. The railroad commissions of several states have had detailed valuations made of all the railroad property in the state. The state and city public service commissions of which some twenty have been created in the last few years are invariably authorized and often required by statute to make valuations of the property of all the railroad, street railway, gas, electric light and power, water, telegraph, telephone and other public service property within their jurisdiction. The movement for the establishment of similar commissions with valuation powers seems likely to spread until it becomes practically universal.

I have taken up this work as a natural outgrowth of duties during the past four years that have required the briefing of the various problems arising in connection with actual valuations. In working up the subject, not only the published decisions of courts have been examined but the unpublished reports of special masters

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