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phecy; the coming years must tell whether the prophecy is true or false. All that we can say at the outset is that the power to regulate exists. The validity of its exercise depends upon the nicety of the adjustment between forecast and events. This is as true of a regulation which looks forward a year as of one which looks forward a decade or a century. In either case, with difference only of degree, there is a forecast of the future, which must be justified by results. Into every statute of this kind, we are to read, therefore, an implied condition. The condition is that the rates shall remain in force at such times and at such only as their enforcement will not work denial of the right to a fair return. When the return falls below that level, the regulation is suspended. When the level is again attained, the duty of obedience revives. There would be no obscurity about this if the condition were expressed. It is no less binding because it is implied. The Constitution is the supreme law, and statutes are written and enforced in submission to its commands." So the demurrer, predicated on a contention that the complaint did not make out a cause of equitable cognicance, was overruled; and at the time of this writing, the case is on trial on its merits, before Justice Nichols, in the Albany County Special Term.

THE SOUTH GLENS FALLS CASE

The South Glens Falls case involved a village and a gas company. It did not involve a rate fixed in a franchise granted in pursuance of Section 18 of Article III of the State Constitution. Article 7, Section 61, Sub-division 1, of the Transportation Corporations Law gave to gas companies the right

"to lay conductors for conducting gas through the streets *** in each such city, village and town, with the consent of the municipal authorities thereof, and under such reasonable regulations as they may prescribe."

At first blush, this might appear to be an even more specific grant of power by the legislature to insert a rate provision in the franchise than is contained in the constitutional provision as to street railroad corporations; for this and other reasons, it will be of interest to analyze the court's present view of its prior decision in the Quinby case.

The Village of South Glens Falls had granted a license or franchise to the United Gas, Electric Light & Fuel Company, to use the village streets, etc., for a term of fifty years. It was provided that in consideration of this grant of right, the company should charge no greater sum than $1.25 per thousand cubic feet for gas. In August of 1917,

when the cost of coal, labor, oil and the like, had greatly increased, so that the $1.25 rate had become not only unremunerative but confiscatory, the company filed a tariff increasing its rate to $1.60. Thereupon the village made complaint to the commission for the second district, under Section 71 of the Public Service Commissions Law, and asked the commission to prevent the company from charging more than the franchise rate. Counsel for the village waived all question of the reasonableness of the $1.60 rate; he attacked only the right of the company to charge more than the franchise maximum. The commission dismissed the proceeding, in view of the stand of the village only upon the franchise provision; but the Appellate Division for the Third Department felt constrained by the decision. in the Quinby case to reverse the commission and sustain the complaint of the village, even though a gas, rather than a street railway franchise, was under scrutiny.

By a vote of four to three, the Court of Appeals reversed the action of the Appellate Division and brought the case out from under the rule of the Quinby decision. Crane, J., who wrote the very significant memorandum to which I have referred in connection with the Quinby case, elaborated now the same essential view in the principal opinion in this case, in which Hiscock, C. J., and Cuddeback and McLaughlin, JJ., concurred, the latter in an opinion in which also Hiscock, Ch. J., concurred. Chase, J., read a dissenting opinion, in which Collin, J., concurred, out of his deference to the Quinby decision, from the making of which he had dissented. To complete the record in the South Glens Falls case, Hogan, J., dissented generally.

The opinion of Judge Crane inquired into two questions:

(1) Has the legislature power to regulate, and if need be to increase, the price chargeable by this company for gas, notwithstanding the franchise provision?

(2) Has the legislature conferred such power on the commission? Both of these questions four members of the court answered in the affirmative. An undisclosed number of the four were "of the opinion that, in view of the changes which naturally come with time in civic life, the fixing of a given rate by a village for a period of fifty years was not a reasonable regulation within the terms of the statute". (Transp. Corp. L., Art. 7, Sec. 61, sub-div. 1.) None of the members of the court rested their decision upon this significant ground, however, but discussed instead what Judge Crane called "the much broader principles which are here involved."

The prevailing view or views in the South Glens Falls case may perhaps be most quickly apprehended if the dissenting view is first

analyzed. In epitome, Judge Chase's dissent seems based on four propositions:

(1) That the Quinby decision dealt only with the power which the legislature had delegated to the commission-not what it might have delegated or could now delegate.

(2) That the legiaslature could if it saw fit, empower the Public Service Commission to increase any public utility rate-gas or street railway-whether limited by franchise agreement or not.

(3) That so far as its potential subordination to the sovereign legislative power is concerned, a franchise provision fixing a maximum rate chargeable for gas stands on no different basis than a franchise. fixing a maximum fare on a street railroad.

(4) That the legislature has not thus far delegated to the commission power to increase either gas or street railroad rates above maxima prescribed in franchise agreements.

The most serious concern of the minority seems to have been that an effort to draw a line of distinction between the powers of the commission as to gas and street railroad franchises "may lead to the conclusion that, so far as street railroads are concerned, the legislature has no power to interfere" with the franchise rates.

We may next analyze the reasoning by which Judge McLaughlin and Chief Judge Hiscock reached a conclusion of concurrence "in the result reached by Judge Crane," though not of willingness to concur in his opinion. Judge McLaughlin's fundamental conclusion is that the Village of South Glens Falls had been in no way, by the constitution or by legislation, authorized to fix a gas rate so that the state could not fix or authorize a different and higher rate. This conclusion he reached from the following underlying assumptions of legal principle:

(1) That the right to regulate rates of public service corporations is a governmental power vested in the state in its sovereign capacity. (2) That this rate-regulating power may be exercised by the legislature, or through a commission, or may be delegated to a municipality.

(3) That delegation of this power, to a commission or municipality, is never implied, and will not be assumed to have been intended unless it clearly and unmistakably appears.

(4) No provision of the village charter, state constitution, or statute gave the village power to fix a gas rate except as between the village and the company; the contract between the village and the company can have no effect on the plenary power of the legislature and the commission over gas rates.

(5) The delegated power of the village to prescribe "reasonable regulations," in granting a franchise or license to a gas company, does not include a right to fix a gas rate so that the state cannot fix a higher one.

From the foregoing, Judge McLaughlin and Chief Justice Hiscock reached the view that "it necessarily follows that there is at the present time lodged in the Public Service Commission the power to fix a rate at which gas shall be sold by the appellant" company. The instant case was distinguished, upon its facts, from the Quinby case, as follows:

"In the present case there was no constitutional provision requiring the consent of the local authorities before the streets of the village could be occupied by the gas company. There has been no legislative recognition of the terms imposed as a condition of granting the franchise. No statute has been enacted fixing the maximum price at which gas can be sold. And it does appear from the Public Service Commissions Law that the Legislature intended to and has given the commission the power either to increase or to decrease the price at which gas shall be furnished to the public.

"The distinction thus made is not fanciful. It is real. It is substantial. In the Quinby Case the intent on the part of the Legislature to delegate the power to fix a rate could not be found, and there was a fair inference, at least, from legislative acts that such power had not been given but was retained by the state. In the present case the intent does appear. The statute creating the Public Service Commission indicates as clearly as language can that the Legislature intended to give to the commission all the power necessary either to increase or to diminish rates at which gas should be sold."

We may turn now to the opinion of Judge Crane. As to the power of the legislature over rates fixed by franchise terms, he declared that such rates "cannot be said to form contracts beyond the inherent power of the legislature to modify for the public welfare. Subsequent conditions may call for modification in the rate, upward or downward, in the public interest:

"Reduction in rates seems to be generally recognized as a public benefit, and yet an increase may be equally so. *** A reasonable increase in rates in order to provide the money for these changed conditions is as much a benefit to the public as a reduction in rates when the charge is excessive. It is a bad political economist who thinks the public is always served best by that which is cheap."

Judge Crane's conclusion upon this phase was that

"Rate regulation is a matter of the police power of the State, and the terms and conditions such as are here contained in a franchise to a service corporation may be modified without impairing the provision of the contract within the provisions of the constitution."

Upon the second phase of the case, whether the inherent power of the legislature as to gas rates has been conferred upon the commission, Judge Crane's argument is more cryptic and less elaborate than that of Judge McLaughlin and Judge Chase. He does not labor greatly in trying to escape the application of the Quinby decision. He hints at a distinction, and flatly refuses to apply the Quinby ruling to a gas franchise.

In conclusion it may be said that the "present state of the law" as to the powers of the New York Public Service Commission may perhaps be accurately summarized as follows:

(1) As to special statutes prescribing maximum rates for other than gas or electric service, the commission has power to fix reasonable rates, above or below the statutory figure.

(2) As to statutes prescribing maximum rates for gas or electric service, the commission may prescribe rates lower than the statutory figure but may not fix a rate higher than that prescribed by the statute.

(3) As to public utility service other than street railroad transportation, the legislature has delegated to the commission power to fix and prescribe a reasonable rate, notwithstanding that a lower or higher rate has been prescribed by a "consent", franchise or contract of the company with a municipality or other local political subdivision of the state.

(4) As to street railroad fares limited by such a "consent," franchise or contract entered into under the sanction and protection of the state constitutional provision, under the precise state of facts shown in the Quinby case, the legislature has not yet delegated to the commission power to fix a rate in excess of the franchise figure, but may delegate such power, in its discretion.

Back of these questions as to the power which the legislature has delegated or may delegate, and far more fundamental than any question of the relief which the Public Service Commissions have been placed in position to grant, is the fundamental attitude which the court has disclosed, of vigorous insistence that public utility rates shall be neither too high nor too low; that the processes and mechanisms of public control shall work out and assure such an adequacy,

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