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Public Utility Property 596-598, 601-607, 88 L. cd. 333, 341-342, 344-347, decided in 1944. Much has been written in books, journals, magazines, and newspapers, and in court decisions, concerning this particular decision. Some claim to know exactly what was decided in the Hope case, the claim often stem­ming from preconceived views or wishful thinking. Suffice; it to say that no man should undertake to venture an opinion ore what was therein decided until he has care­fully read all the opinions rendered in that case. Some o f those who have given little or no study to this decision oftentime express the most confirmed opinions as to what the decision actually held. Some have said that the rule con­tended for in the concurring opinion o f Justices Black, Douglas and Mur­phy in the Natural Gas Pipeline Company case was adopted in the prevailing opinion in the Hope case. W riter's View of W h a t W as Held in the Hope Case However, a reading o f this concurr­ing opinion in the former and the prevailing opinion in the latter demonstrates the unsoundness of such interpretation. Th e concur­rence in the Natural Gas Pipeline Company case attacked and rejected the rule laid down in the Chicago, Milwaukee ir St. Paul Railroad Company case, which provided for (a) judicial review of the reasonable­ness of rates, and (b) made ap­plicable to rate-fixing the constitu­tional rules underlying eminent domain principles and procedure. Also, that concurrence denounced and rejected the valuation rule laid down in Smyth v. Ames. Apparently, the plea was lor a return to M unn v. Illinois. T h e question, therefore, is: Did the prevailing opinion in the Hope case wreak the destruction that was urged by this concurring opinion in the Natural Gas Pipeline Com­pany case? I think not. Here are, conservatively and briefly, what I believe were the major holdings in the Hope case: 1. Clearly the decision in that case Egfl IMPARTIAL VALUATIONS of INDUSTRIAL and COMMERCIAL PROPERTY Thirty-nine years of factual appraisal service to America’s more conservative business institutions. District offices in principal cities. loycHhomasCo. 4411- 15 R A V E N S W O O D AVE . C H I C A G O destroyed the valuation rule laid down in Smyth v. Ames. 2. The so-called eminent domain rule was repudiatecf;rate-making was held to be a species of price-fixing under the police power. )S. Depreciation procedure, based upon cost, was approved: and the holding in the United Railways ir Electric Co. case (280 U. S. 234, 253- 254; 74 L. ed. 390, 410, 411) that de­preciation should be based upon cur­rent value was expressly rejected, i 4. Valuation based, atpon actual le-gitimate” cost along the line of the prudent investment theory put fpr-ward by Justices Brandeis and Holmes in their concurring opinion in the • Southwestern Bell Telephone Com- ' pany case would appear to have been approved. ButTfic Couft was at pains I to point out that the regulatory body 1 is not bound to any particular formula or formulas. Other formulas and methods might l>e employed. Fair ? value was held to he the end product, Wot the starting point.” Judicial Review on Reasonableness of Rates W a s N ot Rejected Th e Court did not reject judicial right of review as to reasonableness of rates. Neither did it hold that a rate base or other similar hitching-post is unnecessary, whereby to test reasonableness of rates. Much mis­understanding seems to have arisen on this latter point. Obviously, if ft be held that no touchstone or yardstick is necessary, whereby to test the reasonableness of rates, then judicial review as to reasonableness of rates would become utterly mean­ingless. This is not to say that the Supreme Court sits as a board of revision. Once it be conceded that judicial review as to reasonableness is unnecessary, it must follow that any judicial review would be of small consequence, except to restrain plain "murder” in procedural due process. I concede that the Hope case is a landmark decision and that it re­jected and threw into the discard many supposedly sacred principles o f rate-making, but it did not free rate-fixing bodies from judicial re­view as to reasonableness of rates. Court N o w Leans To w a rd the Cost Basis for Valuations It would appear that the Supreme] Court how leans toward the cost basis for valuation purposes. This trend is indicated fn the Hope case and was followed in the Colorado Interstate Gas Company case, 324 U.S. 581, 604-605, 89 I., ed. 1206, 1224; the Panhandle Eastern Com­pany case, 324 U.S. 635, 648, 89 I.. ed. 1241, 1250-1251; and in several other cases. Th e Natural Gas Act approves the “ actual legitimate cost" rule and the Federal Power Act the “ actual legitimate original cost". Th e Hope and subsequent cases cited were decided under the provisions of the Natural Gas Act. Clearly, the trend at the. present) time is toward tne cost basis in/ valuing the property of a public utility for rate-makThg” purposes, whether it be termed actual Fcgm-matc cost, historical cost, original cost or prudent investment. 11 is generally conceded that tire cost Oasis should be applied to property other than"land/ Why land is excepTecl is not readily understood. The Court devised the particular rule applicable to land to overcome an unfair situa­tion, which coufcTTiave been ovet-come m o re~ ration ally- .liy. .adopt i ng the cost basis with the qualification December, 1948 • Vol. 34 1155 «