CHAPTER XVI 
THE RATE-BASE AND DEPRECIATION IN RECENT 
DECISIONS OF THE U. S. SUPREME COURT 
The following references to decisions of the U. S. Supreme 
Court in recent years, that is, since the publication of the first 
edition of this book, will give some idea of the present attitude 
of the Public Service Commissions and of the courts toward the 
problems involved in rate-fixing. Although not always clearly 
expressed in words the purpose to protect legitimate investment 
is clear. The time does not appear to be far off when all the 
Rate-Fixing Commissions will cut loose from the attempt to 
make © fair value” their starting point and will recognize the 
fact that they must take legitimate investment into account, 
and protecting this must also allow the public utility owner an 
income sufficiently large to create the “ going concern ” and other 
intangible values and to compensate him for hazard and manage- 
ment. The courts will then still have the opportunity to deter- 
mine whether the resulting rates are confiscatory or not. 
The demonstration made by the author of the fact that it may 
fairly be assumed that public utility properties ordinarily have 
unlimited life has been strongly fortified by the decision in the 
case of the New York and Queens County Gas Company os. 
Newton (269 Fed., p. 277) in which the District Court (1920) 
and later the Supreme Court approve the report of the Special 
Master who discusses present value and depreciation in the 
following language: 
“ In determining that the complainant’s property has a fair 
present value of at least the amount of the complainant’s actual 
investment therein as found by me, viz., at least $1,655,887.04, 
I have made no deduction for what is termed ‘ depreciation,’ in 
whatever way calculated. Under any basis of determining 
present value, the complainant’s property is now worth at least 
the amount of such investment therein, and the sound rule of 
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