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The Green Bag

Public Service Corporation. “Liability of Water Companies for Losses by Fire.” By Arthur L. Corbin. 19 Yale Law journal 425 (Apr.).

“New cases continue to be brought by citizens whose pro rty has been destroyed

by ﬁre because of a ailure of the water supply. In the recent Florida case of Woodbur v. Tam a Waterworks C0., 49 So. 556; 21 L. .A. (N. .) 1034, it was held that where a water company, engaged in the public service of supplying water for public and private use, had contracted with a city to furnish water for the puttin out of ﬁres, it was liable to a citizen or a oss caused by the company's failure to live up to its contract. This deci sion has been rather severely criticised, and

it is contrary to the great weight of author ity, numerically counted. The liability of the company has two possible bases, its contract with the city and its public dut as a public service corporation. These wil be considered separately.” Mr. Corbin proceeds to analyze the authori ties, dividing his discussion as follows: (1) Liability ex contraetu, (2) Liability ex delieto. See Rate Regulation. Race Distinctions. See Interstate Com merce.

Rate Regulation. "The Judicial Test of a Reasonable Railroad Rate, and Its Relation to a Federal Valuation of Railway Property." By Charles G. Fenwick, of Johns Hopkins University. 8 Michigan Law Review 445 (Apr.).

“The character of the enterprise and the amount of risk involved in the undertakin may call for larger returns than the norma rate of interest upon safe investments. Wil cox v. Consolidated Gas Co., 212 U. S. 19. . ..

Hence it is not unreasonable that invest ments in railwa roperty (we refer to the actual value 0 t e pro rty, not to the amount of securities on t e market) should beallowed unusuallylarge returns. . . . There is clearly no call to capitalize this element, for the inﬂation of a company's securities would go on without limit if we were to in clude as art of capital those very factors because 0 which a larger return is allowed to ca ital. “T ere are then certain non-physical values which may properly be capitalized and others which need not be capitalized in making a valuation of railway property for the pur pose of ﬁxing rates. But whatever conclusion the Interstate Commerce Commission may come to with regard to the estimate of the non-physical elements of value,. . . the im portant feature of the undertaking will be the valuation of the physical elements of the pro rty. . . . _ " t is evident that the problem of a valua tion of railway property can be satisfactorily settled only by careful and prudent action on the part of the Interstate Commerce Com

mission. No government which has hitherto permitted its railroads to ﬁx their own rates and to control their own captialization un checked can afford to attempt a sudden and immediate regulation. The methods of rail roads in ﬁxing rates and in the issue of capital securities may not have been blameless in the past; but vested interests have in many cases grown up around such methods, and it would seriously aﬁect the credit of the country if these interests were to be lightly dealt with." "Regulation that Regulates." By Freder ick L. Holmes. Independent, v. 68, p. 905 (Apr. 28). “Eﬁective results have been accomplished by the Wisconsin] commission. Nearly one hundre and ﬁfty orders have been issued, thousands of grievances have been settled, and onl three appeals to the courts. The practi features of the Wisconsin commis sion law, requiring absolute and scientiﬁc rate making, have eliminated litigation." See Interstate Commerce. Real Property. See Legal History.

Referendum See Legislation. Roman-Dutch Law. See Wills. Social Evolution. "Socialism-In Its Mean ing and Origin." Quarterly Review, v. 212, no. 423, p. 409 (Apr.). “Socialism, as we said at the beginning, is an extreme form of a t general move‘ ment. The question of t e future is whether that general movement of social reform will evolve into socialism, or whether, on the

other hand, socialism will be merged in social reform." The anonymous author adds that the answer to that depends upon the soundness of the premises upon which socialism is based, and proposes to examine the validity of these premises in a second article. Taxation (In General). "Highways of Progress—Last Articlk-The Conservation of Capital." By James J. Hill. World's Work, v. 20, p. 12919 (May). "The modern theory that you can safely tax the wealthy is just as obnoxious as the medimval theory that you can safely oppress or kill the poor. It is obnoxious, not because wealth deserves special consideration, but because capital is the mainspring of all industry and material develo ment; and after

you have devoted so much 0 it to the unpro ductive purposes that the state represents when it transcends its primary function as keeper of the peace and administrator of justice, there will be just so much less left to pa out in wages and devote to the creation of ot er wealth. It is a ﬁxed fact, exactly as it is that when you subtract x from y some thin less than y must remain. Of course the borer suﬁers even more than the capi talist. The countries in which such forms of taxation are being carried farthest are precisely those-in which employment is scarce and precarious, and labor ﬁnds it necessary