150 VALUATION, DEPRECIATION AND THE RATE-BASE
Cotperation Between the Public and the Owner. — The treat-
ment of the public service corporation should be such as to en-
courage the undertaking of other public service enterprises. It
should not be a hard and fast rule that a fixed rate of return will
be allowed in all cases. The owner should feel that good man-
agement will be rewarded. There is perhaps no better way of
securing the desired hearty and cordial cooperation between the
owner of the utility and the public than by the introduction of
a system of profit sharing. This has been done with apparently
great success in Chicago and other cities where revenue in excess
of an agreed interest return on an appraisal of street car lines is
divided on a reasonable basis between the city and the owner.
So, too, in Boston, for every decrease of 5 cents per 1ooo cubic
feet in the charge for gas the Gas Company is permitted to
increase its dividend rate one per cent. The consumer benefits
by the lower rate, the Gas Company by the larger dividend.
Attitude of the Public Service Commissions. — Public ser-
vice commissions were not created to assume an attitude hostile
to the public service corporations. While they must protect the
public against excessive charges for the service rendered and
must see to it that there will be no discrimination against in-
dividuals, they are likewise charged with the duty of allowing
the corporations to do business on a fair basis. It must not be
expected, however, that mistakes will not be made. As the
records to date are read, such mistakes will be found in both
directions. On the whole the attempt to be fair is generally
recognized and the confidence of the people in their public ser-
vice commissions is growing from day to day.
The Rate-Base
Net Earnings as a Basis of Value. — When there is no com-
petition and no restriction by law or otherwise upon the charges
which may be made by public utilities for commodities furnished
or for service rendered, it is safe to assume that these charges
will be fixed on the broad principle of “ all the traffic will bear.”
This does not mean all that the rate-payer would be willing to
