Leadership

Decision in the Knoxville Water Case.

Issue 14 and Volume 45.

Decision in the Knoxville Water Case. The recent decision of the Supreme Court of the United States, to the effect that no court could enjoin a service-rate fixed by the lawful public authority until the effect had been found by trial, has received a great deal of notice. Another decision in the Knoxville water case, which is quite as interesting, has attracted less attention. In the Knoxville case it appeared that by the usual methods of hocus-pocus the paper capitalisation of the water company was very largely in excess of actual or necessary investment, and the court held that no part of the capitalisation in excess of actual investment was entitled to earn dividends from water rates. That is entirely consistent with previous decisions, which uniformly hold that in fixing values in such cases, courts are hound to consider everything which might tend to throw light on the subject; but…

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