Page:Harvard Law Review Volume 32.djvu/570

534 534 HARVARD LAW REVIEW gardless of all other considerations, to charge for every service it performs what that service costs, it is clear that there is no crite- rion, whether of the value of the service or anything else, which can compete with the criterion of cost as against the company. The proposition is a constitutional one. Both the Northern Pacific case and its fellow ®^ involved state action, which the United States Supreme Court (in 191 5) held unconstitutional, and the cases of course estabUsh the law for every tribunal in the coimtry. Yet the old idea that a utility's right to charge what its service costs is conditioned on the service being worth so much is currently set forth as a truism in the dicta of commissions.^^ The constitutional proposition of the Northern Pacific case disposes at the same time of a common-law question which might otherwise arise. Public utilities (if not all businesses) have a common-law duty to serve at reasonable rates. Whether the discharge of this duty might sometimes involve their serving at less than cost, might be a fair common-law question, were it not foreclosed by the Supreme Court's determination that service at less than cost cannot constitutionally be required of them. Rates may never be fixed, by the state, below the cost of the service. May they sometimes be fixed, by the utility, above the cost of the service? Is there some criterion, whether of value of the service or something else, which can compete with cost in favor of the company? This also involves a common-law and a constitutional question: the [common-law question whether a utihty sometimes may, consistently with its duty of serving at reasonable rates, charge rates which exceed cost, and the con- stitutional question whether the state may, consistently with due process of law and other constitutional restrictions, reduce to cost all rates which exceed it.^ If there be a rule of constitutional law ^ Notes 55 and 56, supra. « E. g., Re Heisen, P. U. R. 1917 B, 644 (111. Pub. Util. Com.); Re Colorado Springs Lt. Ht. & Pwr. Co., P. U. R. 1916 C, 464, 482 (Colo. Pub. Util. Com.); Salisbury v. Salisbury Lt. Ht. & Pwr. Co., P. U. R. 1918 E, 331, 334 (Maryland Pub. Serv. Com.); Re New Jersey Gas Co., P. U. R. 1918 B, 438, 441 (N. J. Board of Pub. Util. Commrs.); Re Portland Railway Lt. & Pwr. Co., P. U. R. 1918 B, 266, 274 (Pub. Serv. Com. of Ore.). " Conceivably the charging of rates which exceed cost involves another constitu- tional question. It has been suggested that the consimier is imconstitutionaUy de- prived of his property if the utihty is permitted to charge more than a reasonable rate; So. Ind. Ry. Co. v. R. R. Com., 172 Ind. 113, 87 N. E. 966 (1909); Civic League of St. Louis V. St. Louis Water Dept., P. U. R. 1917 B, 576 (Missouri Pub. Serv. Com.);