City of Knoxville v. Knoxville Water Co.

Citations

• 212 U.S. 1
• 29 S. Ct. 148
• 53 L. Ed. 371
• 1909 U.S. LEXIS 1795

Syllabus

<p>Rate making is a legislative function whether exercised by the legislature or by a subordinate body to which power has been delegated, such as a municipality.</p> <p>While courts may-refuse to enforce legislation on constitutional grounds the power should only be exercised in the clearest cases. ■</p> <p>In ordinary equity suits findings of the master and the court below are conclusive here .unless unsupported by the evidence or made under erroneous views of law; but where the constitutionality of a legislative act is involved, this court, from the respect due to legislative authority, will not regard such findings as conclusiye.</p> <p>In estimating for rate-fixing purposes the value: of a-plant, cost of reproduction is not a fair measure of value unless a substantial allow- - .anee is made for depreciation. Qvcere, whether anything can be allowed in the case of the plant of a-public service corporation for “going concern” above the value of the separate tangible elements.</p> <p>In valuing for rate-fixing the plant of a public service corporation,’bonds and stocks issued for its purchase and construction in excess of its cost and by a,nd to parties ipterested in and controlling the company, afford neither measure nor guide.</p> <p>Ill determining whether a.rate.affords a fair return the amount must be ■considered as fixed by the ordinance and not as voluntarily reduced by the corporation, even, if-such reduction be in accordance with custom and for the purpose of obtaining prompt payment.'</p> <p>In determining whether a rate is confiscatory the court is not confined ■ to evidence as to the income of the corporation affected for the fiscal year during, or preceding that in, which the rate was fixed; it may re- ' ceive evidence as t'o such income in subsequent years.,</p> <p>Federal courts should not declare an ordinance fixing rates for a public service corporation unconstitutional-and suspend its operation before .it goes into-effect unless the rate is clearly