ELEMENTS DESERVING SPECIAL CONSIDERATION 295 
for hazard and for the unearned increment, the obligation of the 
public to the owner of the utility is not yet fully discharged. 
There should be compensation for management. It is not 
enough to allow the bare salaries of those who are entrusted with 
the management and operation. The owner is entitled to some- 
thing more. He has brought into being and has placed at the 
service of the community, an effective organization, the stability 
and efficiency of which is guaranteed, as in the case of a corpora- 
tion owner, by the character, judgment and business experience 
of a board of directors selected by the stockholders. The exist- 
ence of the corporation, the business ability of its directors 
resulting in the energetic control of its affairs, the cash contribu- 
tion by stockholders, the successful operation of the enterprise, 
or, in the case of the new venture, the implied guarantee of 
success, afford the basis for making loans and extend the 
ability of the public to enjoy transportation facilities or electric 
service, or gas and water supplies that might otherwise long be 
out of reach by reason of the limited borrowing capacity and lack 
of business ability of municipal organizations. 
Volume of Business to be Considered. — That there should 
be something in the earnings as compensation for management 
can hardly be questioned. There will, however, be difficulty in 
bringing the same into a satisfactory relation to the rate-base. 
This is equally true of the allowance which should be made for 
the participation in the general prosperity and is true to a less 
extent of the hazard allowance. All of these elements which 
should be covered in the earnings are more closely related to the 
volume of business than to the capital invested in the enterprise 
or to any rate-base built up from “ value.” 
It happens occasionally that a public utility concern does a 
large volume of business on a small investment. Some of the 
express companies belong in this class. The case may readily 
be conceived, of such a concern which rents its office facilities and 
operates under contract with railroad and steamship companies 
and which, outside of its trucks and other vehicles for local de- 
livery, has made no investment of any moment. It would be