In determining whether water rates fixed are reasonable or unreasonable, it is proper to consider the value of the property of the water company, and that value consisted of (1) the cost of construction, (2) the amount expended in permanent improvements, (3) the amount of the market value of the stocks and bonds of the company issued and outstanding, (4) the present cost of construction as compared with the original cost, (5) the probable earning capacity of the property under the rate prescribed, (6) the amount of money required to meet operating expenses, (7) the cost to obtain water equal in quantity and quality to the supply at that time furnished from the next most available source of supply, (8) the depreciation of that portion of the plant of the company which is worn by use or the action of the elements or its value is depreciated by newer, cheaper, and more efficient appliances and machinery, (9) the franchise of the plant, and (10) the fact that the company is a going concern. Spring Valley Water Works v. San Francisco, 192 Fed. 137.

The basis of calculation for determining whether rates to be charged by a water company, fixed by a municipality, are just and reasonable, is the reasonable value of the property necessarily employed in rendering the probable service required of such company and the fair value to the public of the service rendered; and in determining this question the amount and value of the bonds and stocks of the corporation, if not in excess of the real value of the property, may properly be considered. Spring Valley Water Works v. San Francisco, 124 Fed. 574.

The franchise of a water company in California is an element to be considered in determining the value of the corporate property necessarily employed in the service of supplying water to a city, etc.; and so, also, is the enhanced value of the property by the reason of the fact that the company has an established business and is a going concern. Spring Valley Water Works v. San Francisco, 124 Fed. 574. Ordinance reducing rate to be charged by water company to private consumers so that the annual net earnings would not exceed four and four-tenths per cent on the value of the property necessarily employed in the service, or three and three-tenths per cent on its stock after deducting its fixed charges, was held to be unconstitutional and invalid. Spring Valley Water Works v. San Francisco, 124 Fed. 574.

In fixing rates of water charges, losses from distribution of water to consumers outside of city cannot be taken into consideration. San Diego L. & T. Co. v. National City, 174 U. S. 739, 19 Sup. Ct. 804, 43 L. ed. 1154.

Price at which a waterworks plant was sold under foreclosure is evidence which may be taken into consideration in fixing and regulating water rates, in estimating and determining the value of the plant on which a fair return is to be secured. San Diego L. & T. Co. v. Jasper, 189 U. S. 439, 23 Sup. Ct. 571, 47 L. ed. 892.

Valuation for purpose of taxation may be taken into consideration in determining reasonableness of rates fixed, especially where such valuation was shown to be by officers of the public utilities company. San

Diego L. & T. Co. v. Jasper, 189 U. S. 439, 23 Sup. Ct. 571, 47 L. ed. 892.

Under a statute providing that water appropriated for sale, rental, or distribution is a public use, and the collection of rates of compensation for such service a franchise which cannot be exercised except by the authority of and in the manner prescribed by law, the legislature is authorized to provide for fixing the rates to be charged, and an irrigation company has no authority to make a distinction between its customers, supplying some with low rates, and attacking the validity of the maximum rates fixed by the authorities under the statute, on the ground that, as applied to those other customers, the rates fixed will not yield a reasonable return on the investment, but will amount to a taking of its property without compensation. The rule for determining the reasonableness of rates is to consider the rates fixed applicable to all the customers. Boise City Irr. & L. Co. v. Clark, 131 Fed. 415, 65 C. C. A. 406.

Maximum rates fixed pursuant to statute do not deprive the company of its property without compensation because the rate as fixed will not produce sufficient revenue above expenses and fixed charge to pay a reasonable income on the money invested, in those cases where the plant was constructed on a large scale and at a greater outlay than was necessary to supply the present needs of customers, and with the purpose of supplying a larger area of territory and a greater number of customers. Boise City Irr. & L. Co. v. Clark, 131 Fed. 415, 65 C. C. A. 406. See San Diego L. & T. Co. v. Jasper, 189 U. S. 439, 446, 23 Sup. Ct. 571, 47 L. ed. 892.

VIII. Irrigation.

In fixing the rates to be charged by public utility-such as the rates for furnishing of water by a water company to the inhabitants of a municipality for domestic use the public utilities company is not entitled to be reimbursed from the income derived from the rates fixed for interest upon its indebtedness, nor for depreciation of its plant, aside from the amount requisite for its maintenance and repair during the year. Redlands L. & C. D. Water Co. v. City of Redlands, 121 Cal. 312, 53 Pac. 791. See San Diego Water Co. v. San Diego, 118 Cal. 556, 50 Pac. 633, 62 Am. St. Rep. 261.

Irrigation rates established are not necessarily unreasonable because they will yield only a full return on the total value of the plant when the water company shall serve the entire area which its system will supply, San Diego L. & T. Co. v. Jasper, 189 U. S. 439, 23 Sup. Ct. 571, 47 L. ed. 892, affirming 110 Fed. 702; and approved in Boise City Irr. & L. Co. v. Clark, 131 Fed. 415, 422, 65 C. C. A. 339 (upholding rates fixed where plant constructed on large scale and necessary for present use); Brunswick Water Dist. v. Maine Water Co., 99 Me. 380, 59 Atl. 540 (determining valuation of public service corporation).

Rates established for water furnished for irrigation purposes are not necessarily unreasonable because they will yield a full return on the total value of the plant only when the water company shall serve the

entire area which its system will supply. San Diego L. & T. Co. v. Jasper, 189 U. S. 439, 23 Sup. Ct. 571, 47 L. ed. 892. See Stanislaus County v. San Joaquin & K. River Irr. Co., 192 U. S. 215, 24 Sup. Ct. 241, 48 L. ed. 414; Boise City Irr. & L. Co. v. Clark, 131 Fed. 422, 65 C. C. A. 406; Brunswick F. T. W. Dist. v. Maine Water Co., 99 Me. 380, 59 Atl. 537.

IX. Orders.

Orders and rules of the Railroad Commission, where wholly legislative in their nature, are unenforceable, because the power to make such orders and rules cannot be delegated by the legislature to the Commission. See Minneapolis, St. P. & Ste. Marie R. Co. v. Railroad Commission, 136 Wis. 146, 116 N. W. 915.

Order issued by Commission respecting the keeping open of depots and stations and the receipt of passengers therein, may, in a particular case, result in hardship or injury, but this is no criterion by which to test the reasonableness of the regulation; if it conduces to the interest of the railway company and works no hardship to the traveling public, it must be considered as reasonable. Smith v. Seaboard Airline R. Co. (Ga. App.), 73 S. E. 523.

Order of Railroad Commission directing electric re to cease an unlawful discrimination between passengers from different localities served by it and directing that equal transfer privileges be supplied may be complied with by giving transfers to all or by refusing to give transfers to any; such order of the Commission is not a command that transfers be given. Portland R. L. & P. Co. v. Railroad Commission, 56 Or. 468, 109 Pac. 273.

Refusal of order of Commission does not ascertain or establish the point of reasonableness, but leaves it undisclosed and the former rates to stand, requiring the commissioners to make another trial to find a rate that is reasonable. Minneapolis, St. P. & Ste. M. R. Co. v. Railroad Commission, 136 Wis. 146, 165, 116 N. W. 915.

Confiscatory order must be such as to deprive the railroad of a fair rate upon the value of its property, not merely one which reduces former rates or charges. Minneapolis, St. P. & Ste. M. R. Co. v. Railroad Commission, 136 Wis. 146, 167, 116 N. W. 915.

In determining whether or not an order of the Commission is unreasonable, it must be considered that every unnecessary burden imposed upon a railroad impairs its net receipts and diminishes that margin, if there be one, between the amount sufficient to insure a fair rate on the value of its property; proof may be made of the amount of its fixed charges and operating expenses, and of its gross receipts. In this margin the public and the railroad are interested, because it is only when this exists that betterments in construction or improvements in service not imperative or indispensable, or reduction in rates, will ordinarily be voluntarily made by the railroad or can ordinarily by order be enforced by the Commission. Minneapolis, St. Paul & Ste. M. R. Co. v. Railroad Commission, 136 Wis. 146, 168, 116 N. W. 915.

See Covington & L. T. R. Co. v. Sandford, 164 U. S. 578, 17 Sup. Ct. 198, 41 L. ed. 560.

No valid ground of distinction between unlawful orders and unreasonable orders of the Commission. An unreasonable order is an unlawful order. Minneapolis, St. P. & Ste. M. R. Co. v. Railroad Commission, 136 Wis. 146, 167, 116 N. W. 915.

Unreasonable order falling short of being confiscatory. Minneapolis, St. P. & Ste. M. R. Co. v. Railroad Commission, 136 Wis. 146, 167, 116 N. W. 915.

§ 207. Investigating and Fixing Single Rates, etc.-The Commission shall have power, upon a hearing, had upon its own motion or upon complaint, to investigate a single rate, fare, toll, rental, charge, classification, rule, regulation, contract or practice, or any number thereof, or the entire schedule or schedules of rates, fares, tolls, rentals, charges, classifications, rules, regulations, contracts and practices, or any thereof, of any public utility, and to establish new rates, fares, tolls, rentals, charges, classifications, rules, regulations, contracts or practices, or schedule or schedules, in lieu thereof.3

§ 208. Joint Rates and Through Rates on Common Carriers. Whenever the Commission, after a hearing had upon its own motion or upon complaint, shall find that the rates, fares or charges in force over two or more common carriers, between any two points in this state, are unjust, unreasonable or excessive, or that no satisfactory through route or joint rate, fare or charge exists between such points, and that the public convenience and necessity demand the establishment of a through route and joint rate, fare or charge between such points, the Commission may order such common carriers to establish such through route and may establish and fix a joint rate, fare or charge which will be fair, just, reasonable and sufficient, to be followed, charged, enforced, demanded and collected in the

Section 32 (b), p. 35.

future, and the terms and conditions under which such through route shall be operated.*

$209. Transportation in Originating Car.The Commission may order that freight moving between such points shall be carried by the different common carriers, parties to such through route and joint rate, without being transferred from the originating cars."

§ 210.

Division of Rates, etc.-Supplemental Order. In case the common carriers do not agree upon the division between them of the joint rates, fares or charges established by the Commission over such through routes, the Commission shall, after hearing, by supplemental order, establish such division; provided, that where any railroad which is made a party to a through route has itself over its own line an equally satisfactory through route between the termini of the through route established, such railroad shall have the right to require as its division of the joint rate, fare or charge its local rate, fare or charge over the portion of its line comprised in such through route, and the Commission may, in its discretion, allow to such railroad more than its local rate, fare, or charge whenever it will be equitable so to do.

§ 211. Powers of Commission to Establish Rates and Fix Division of.-The Commission shall have the power to establish and fix through routes and joint rates, fares or charges over common carriers and stage

Section 33, p. 35.

Joint rates to be reasonable and just. Oregon R. & Nav. Co. v. Campbell, 173 Fed. 980.

Section 33, p. 35.

• Ib., p. 36.