in order to ascertain that value, the original | cost of construction, the amount expended in permanent improvements, the amount and market value of its bonds and stock, the present as compared with the original cost of construction, the probable earning capac-ing the water to consumers, either by way ity of the property under particular rates prescribed by statute, and the sum required to meet operating expenses, are all matters for consideration, and are to be given such weight as may be just and right in each case. We do not say that there may not be other matters to be regarded in estimating the value of the property. What the company is entitled to ask is a fair return upon the value of that which it employs for the public convenience. On the other hand, what the public is entitled to demand is that no more be exacted from it for the use of a public highway than the services rendered by it are reasonably worth." 169 U. S. 546 [42: 819].

This court had previously held in Covington & Lexington Turnpike Road Company v. Sandford, 164 U. S. 578, 596, 598 [41: 560, 566, 567],—which case involved the reasonableness of rates established by legislative enactment for a turnpike company,that a corporation performing public services was not entitled, as of right and without reference to the interests of the public, to realize a given per cent upon its capital stock; that stockholders were not the only persons whose rights or interests were to be considered; and that the rights of the public were not to be ignored. The court in that case further said: "Each case must depend upon its special facts; and when a court, without assuming itself to prescribe rates, is required to determine whether the rates prescribed by the legislature for a corporation controlling a public highway are, as an entirety, so unjust as to destroy the value of its property for all the purposes for which it was acquired, its duty is to take into consideration the interests both of the public and of the owner of the property, together with all 57]other circumstances that are fairly to be considered in determining whether the legislature has, under the guise of regulating rates, exceeded its constitutional authority, and practically deprived the owner of property without due process of law. The utmost that any corporation operating a public highway can rightfully demand at the hands of the legislature, when exerting its general powers, is that it receives what under all the circumstances is such compensation for the use of its property as will be just both to it and to the public."

These principles are recognized in recent decisions of the supreme court of California. Son Diego Water Co. v. City of San Diego (1897) 118 Cal. 556 [38 L. R. A. 460]; Redlands L. & C. Domestic Water Co. v. City of Redlands (1898) [121 Cal. 365], 53 Pac. 843, 844.

The contention of the appellant in the present case is that in ascertaining what are just rates the court should take into consideration the cost of its plant; the cost per annum of operating the plant, including interest paid on money borrowed and reason

ably necessary to be used in constructing the
same; the annual depreciation of the plant
from natural causes resulting from its use;
and a fair profit to the company over and
above such charges for its services in supply-
of interest on the money it has expended for
the public use, or upon some other fair and
equitable basis. Undoubtedly, all these mat-
ters ought to be taken into consideration,
and such weight be given them, when rates
are being fixed, as under all the circum-
stances will be just to the company and to
the public. The basis of calculation sug-
gested by the appellant is, however, defect-
ive in not requiring the real value of the
property and the fair value in themselves of
the services rendered to be taken into consid-
eration. What the company is entitled to
demand, in order that it may have just com-
pensation, is a fair return upon the reason-
able value of the property at the time it is
being used for the public. The property may
have cost more than it ought to have cost,
and its outstanding bonds for money bor-
rowed and which went into the plant may
be in excess of the real value of the prop-
erty. So that it cannot be said that the[758]
amount of such bonds should in every case
control the question of rates, although it
may be an element in the inquiry as to what
is, all the circumstances considered, just
both to the company and to the public.

One of the points in dispute involves the question whether the losses to the appellant arising from the distribution of water to consumers outside of the city are to be considered in fixing the rates for consumers within the city. In our judgment the circuit court properly held that the defendant city was not required to adjust rates for water furnished to it and to its inhabitants so as to compensate the plaintiff for any such losses. This is so clear that we deem it unnecessary to do more than to state the conclusion reached by us on this point.

One of the questions pressed upon our consideration is whether the ordinance of the city should have expressly allowed the appellant to charge for what is called a "water right." That right, as defined by appellant's counsel, is one "to the continued and perpetual use of the water upon the land to which it has been once supplied upon payment of rates therefor established by the company." In the opinion of the circuit court it is said that "no authority can any. where be found for any charge for the so-called water right." This view is controverted by appellant, and cases are cited which, it is contended, show that the broad declaration of the circuit court cannot be sustained. Fresno Canal & Irrig. Co. v. Rowell, 80 Cal. 114: Fresno Canal & Irrig. Co. v. Dunbar, 80 Cal. 530; San Diego Flume Co. v. Chase, 87 Cal. 561; Clyne v. Benicia Water Co. 100 Cal. 310; San Diego Flume Co. v. Souther (C. C. A.) 90 Fed. Rep. 164.

We are of opinion that it is not necessary to the determination of the present case that this question should be decided. We are dealing here with an ordinance fixing rates or compensation to be collected within a

given year for the use of water supplied to a city and its inhabitants or to any corporation, company, or person doing business or using water within the limits of that city. In our judgment, the defendant correctly says in its answer that the laws of the state [759] have not conferred upon it or its board of trustees the power to prescribe by ordinance or otherwise that the purchase and payment for so-called "water rights" should be a condition to the exercise of the right of consumers to use any water appropriated for irrigation or affected with a public use.

some person or corporation involving the
question whether the former may require, as
a condition of its furnishing water within
the limits of the city on the terms prescribed
by the defendant's ordinance, that it be also
paid for what is called a "water right."
We will not extend this opinion by an an-
alysis of all the evidence. It is sufficient to
say that upon a careful scrutiny of the testi-
mony our conclusion is that no case is made
that will authorize a decree declaring that
the rates fixed by the defendant's ordinance,
looking at them in their entirety—and we
cannot properly look at them in any other
light-are such as amount to a taking of
property without just compensation, and
therefore to a deprivation of property with-
out due process of law. There is evidence
both ways. But we do not think that we
are warranted in holding that the rules upon
which the defendant's board proceeded were
in disregard of the principles heretofore an-
nounced by this court in the cases cited.
The case is not one for judicial interference
with the action of the local authorities to
whom the question of rates was committed
by the state.

The decree dismissing the bill is affirmed.

CITY OF RICHMOND, Appt.,

v.

The only issue properly to be determined by a final decree in this cause is whether the ordinance in question fixing rates for water supplied for use within the city is to be stricken down as confiscatory by its necessary operation, and therefore in violation of the Constitution of the United States. If the ordinance, considered in itself, and as applicable to water used within the city. is not open to any such objection, that disposes of the case, so far as any rights of the appellant may be affected by the action of the defendant. The appellant asks, among other things, that it be decreed to be entitled to charge and collect for "water rights" at reasonable rates as a condition upon which it will furnish water for the purposes of irrigation, notwithstanding the rates fixed by the defendant's board of trustees for water sold and furnished within the city. That is a question wholly apart from the inquiry as to the validity under the Constitution of the United States of the ordinance of the defendant fixing annual rates in performance of the duty enjoined upon it by the Constitution and laws of the state. Counsel for appellant, while insisting that the circuit court erred in saying that there was no such thing as a "water right," says: "The Constitution of the state has nothing whatever to do with a water right or the price that shall be paid for it. It simply provides for fixing the annual rental to be paid for the water fur nished and used. When one obtains his water right by purchase or otherwise, he has a right to demand that the water shall be furnished to his lands at the price fixed, as provided by law, and that the company shall Argued April 24, 25, 1899. Decided May exact no more. But he must first acquire the right to have the water on such terms.

SOUTHERN BELL TELEPHONE & TELE-
GRAPH COMPANY, Appellee.

A

(See S. C. Reporter's ed. 761-778.) telephone company not entitled to benefit of act of Congress for the use of post roads of July 24, 1866.

telephone company whose business is the electrical transmission of articulate speech between different points is not entitled to the benefit of the act of Congress of July 24, 1866 (U. S. Rev. Stat. §§ 5263-5268), respecting the use of post roads by telegraph companies.

[No. 264.]

22, 1899.

Whether in fixing the annual rates to be ON WRIT OF CERTIORARI to the United

charged, the body authorized to fix them can take into account the amount that has been received by the company for water rights, is another question, and one that is not presented in this case. Nor is any question [760]raised as to what would be a reasonable amount to exact for a water right, or whether the courts can interfere to determine what is a reasonable amount to charge therefor." These reasons are sufficient to sustain the conclusion already announced, namely, that the present case does not require or admit of a decree declaring that the appellant may, in addition to the rates established by the ordinance, charge for what is called a "water right" as defined by it. It will be time enough to decide such a point when a case actually arises between the appellant and

States Circuit Court of Appeals for the Fourth Circuit to review a decree of that court reversing the decree of the Circuit Court of the United States for the Eastern District of Virginia which overruled a demurrer to the complaint, and decreed that the Southern Bell Telephone Company has, under the act of Congress of July 24, 1866, the right to construct and maintain it's lines over and along the streets of the city of Richmond, etc. The Circuit Court of Appeals held that while said company was entitled to the privileges of the said act of Congress, this right was to be enjoyed in subordination to public and private rights and to the power of the municipality to regulate the use of the highways, and therefore remanded the cause to the Circuit Court with instructions to modify the injunction. Decree of Circuit

[761]

Court of Appeals affirmed so far as it revers-
es the decree of the Circuit Court, and cause
remanded, with directions for further pro-
ceedings in the latter court.

See same case below, 78 Fed. Rep. 858, and
42 U. S. App. 686, 697, 698, 85 Fed. Rep. 19,
28 C. C. A. 659.

The facts are stated in the opinion.
Messrs. Henry R. Pollard and C. V.
Meredith for appellant.

Messrs. Hill Carter, Addison L. Hol-
laday, and George H. Fearons for appellee.

[761] *Mr. Justice Harlan delivered the opinion

of the court:

from the date of the passage of this act, for postal, military, or other purposes, purchase all the telegraph lines, property, and effects of any or all of. said companies at an appraised value, to be ascertained by five competent, disinterested persons, two of whom shall be selected by the Postmaster General of the United States, two by the company interested, and one by the four so previously selected.

"8 4. That before any telegraph company shall exercise any of the powers or privileges conferred by this act, such company shall file their written acceptance with the Postmaster General, of the restrictions and obliga-[763] tions required by this act." 14 Stat. at L. 221, chap. 230.

The principal question in this case is whether the circuit court and the circuit court of appeals erred in holding that the appellee was entitled to claim the benefit of the provisions of the act of Congress approved July 24th, 1866, entitled "An Act to Aid in the Construction of Telegraph Lines, and to secure to the Government the Use of the Same for Postal, Military, and Other Pur-letter-carrier routes established in any city poses." 14 Stat. at L. 221, chap. 230.

By that act-the provisions of which are preserved in sections 5263 to 5268, inclusive, title LXV. of the Revised Statutes of the United States-it was provided:

"1. That any telegraph company now organized, or which may hereafter be organized, under the laws of any state in this Union, shall have the right to construct, [762]maintain, and operate lines of telegraph through and over any portion of the public domain of the United States, over and along any of the military or post roads of the United States which have been or may hereafter be declared such by act of Congress, and over, under, or across the navigable streams or waters of the United States: Provided, That such lines of telegraph shall be so constructed and maintained as not to obstruct the navigation of such streams and waters, or interfere with the ordinary travel on such military or post roads. And any of said companies shall have the right to take and use from such public lands the necessary stone, timber and other materials for its Fosts, piers, stations, and other needful uses in the construction, maintenance, and operation of said lines of telegraph, and may preempt and use such portion of the unoccupied public lands subject to pre-emption through which its lines of telegraph may be located as may be necessary for its stations, not exceeding forty acres for each station; but such stations shall not be within fifteen miles of each other.

"§ 2. That telegraphic communications between the several departments of the government of the United States and their officers and agents shall, in their transmission over the lines of any of said companies, have priority over all other business, and shall be sent at rates to be annually fixed by the Postmaster General.

"3. That the rights and privileges hereby granted shall not be transferred by any company acting under this act to any other corporation, association, or person: Provided, however, That the United States may at any time after the expiration of five years

Subsequently, by an act approved June 8th, 1872, all the waters of the United States dur ing the time the mail was carried thereon; all railways and parts of railways which were then or might thereafter be put in operation; all canals and all plank roads; and all

or town for the collection and delivery of
mail matter by carriers, were declared by
Congress to be "post roads." 17 Stat. at Ľ.
308, chap. 335. These provisions are pre-

served in section 3964 of the Revised Statutes
of the United States.

public roads and highways, while kept up
By an act approved March 1st, 1884, "all
and maintained as such," were declared to be
"post routes." 23 Stat. at L. 3, chap. 9.

convenient route

of New York of April 12th, 1848, and acts
Proceeding under an act of the legislature
amendatory thereof, certain persons associ-
ated themselves on the 11th day of Decem-
ber, 1879, under the name of the Southern
Bell Telephone & Telegraph Company. The
articles of association stated that the gen-
eral route of the line or lines of the com-
pany should be from its office in the city of
through or across the states of New Jersey
New York, "by some
ginia, or otherwise, to the city of Wheeling
Pennsylvania, Delaware, Maryland, and Vir-
or some other convenient point in the state
of West Virginia, and thence to and between
and places within that part of the state of
and throughout various cities, towns, points,
West Virginia lying south of the Baltimore
& Ohio Railroad, and within the states of
Virginia, North Carolina, South Carolina,
Georgia, Alabama, and Florida, the said line
or lines to connect the said cities of New
York and Wheeling together, and the said
other cities, towns, points, and places, or
some of them, or points within the same, to-
gether or with each other or with said cities
of New York and Wheeling."

By an ordinance passed by the city of
Richmond on the 26th day of June, 1884, it
was provided: "1. Permission is hereby
granted the Southern Bell Telephone & Tele-
graph Company to erect poles and run suit-
able wires thereon, for the purpose of tele-
phonic communication throughout the city *of[764]
Richmond, on the public streets thereof, on
such routes as may be specified and agreed
on by a resolution or resolutions of the com-
mittee on streets, from time to time, and

The bill then referred to an ordinance of | braced by the terms of the act of Congress, the city approved July 18th, 1991, and al- and that, in fact, telephone and telegraph leged that it was in conflict with the plain- companies were, for the purposes embraced tiff's rights and void. It referred also to aby that act, one and the same; that the post subsequent ordinance of December 14th, roads spoken of in the act were not limited 1894, repealing the ordinance of June 26th, to routes on the public domain, but embraced 1884, granting the right of way through the all post roads of the United States that had city to the plaintiff, and providing "that in been or might hereafter be declared such by accordance with the fifth section of said or- Congress; that the streets and alleys of the dinance all privileges and rights granted by defendant being post roads, the plaintiff had said ordinance shall cease and be determined the right under the act of Congress "to oc[767]at the expiration of twelve months from the cupy the streets and alleys of the city of approval of this ordinance by the mayor." Richmond for its purposes, guaranteed to it Reference was also made in the bill to two by the Constitution and laws of the United ordinances passed September 10th, 1895, by States, superior to any power in the said one of which it was provided, among other city to prevent it from so doing," and that things: "1. That all poles now erected in it "claims not only the right to maintain its the streets or alleys of the city of Richmond, present poles and wires along the streets and for the support of wires used in connection alleys now occupied by it, but to extend them with the transmission of electricity, except to other streets and alleys as its business and such as support wires required by the city the business interests of the country and its ordinances, to be removed and run in con- patrons may require." duits, shall hereafter be allowed to remain only upon the terms and conditions hereinafter set forth. 2. No pole now erected for the support of telephone wires shall remain on any street in said city after the 15th day of December, 1895, unless the owner or user of such pole shall first have petitioned for and obtained the privileges of erecting and maintaining poles and wires for telephone purposes in accordance with the conditions of this ordinance, and such other conditions as the council may see fit to impose. And if such owner, failing to obtain such privilege as above required, shall neglect or fail to remove such pole or poles and telephone wires supported thereon from the streets or alleys of the city by the 20th day of December,

1895, and restore the street to a condition

similar to the rest of the street or alley con-
tiguous thereto, the said owner shall be li-
able to a fine of not less than five nor more
than one hundred dollars for every such pole
so remaining in the street or alley; to be im-
posed by the police justice of the city; each
day's failure to be a separate offense."

The city demurred to the bill of complaint, but the demurrer was overruled. 78 Fed. Rep. 858.

Ân answer was then filed which met the material allegations of the bill and the cause was heard upon the merits.

In the circuit court a final decree was en

tered in accordance with the prayer of the bill, as follows: "The court, without passing on the rights claimed by the complainant company under the laws of Virginia and the ordinances of the city of Richmond, is of opinion and doth adjudge, order, and decree, that the complainant company has, in ac cordance with the terms and provisions and of the United States approved July 24th, under the protection of the act of Congress 1866 (which is an authority paramount and in conflict therewith), the right to construct, superior to any state law or city ordinance along the streets and alleys of the city of maintain, and operate its lines over and Richmond, both those now occupied by the[769] complainant company and those not now so occupied, and to put up, renew, replace, and repair its lines, poles, and wires over and along said streets and alleys, as well as to and to connect its lines with new subscribers maintain, construct, and operate the same, along said streets and alleys, and the said city of Richmond, its agents, officers, and all ting, removing, or in any way injuring said others are enjoined and restrained from cutlines, poles, and wires of the complainant with the exercise of the aforesaid rights by company, and from preventing or interfering the complainant company, and also from tak. ing proceedings to inflict and enforce fines and penalties on said company for exercising its said rights. And the court doth adjudge, order, and decree that the defendant do pay to the complainant its costs in this That the fifth section of the ordinance of suit incurred to be taxed by the clerk, and [76811884 was null and void; that the ordinances this cause is ordered to be removed from the referred to were unreasonable, ultra vires, docket and placed among the ended causes, and unconstitutional; that the plaintff was but with liberty to either party hereto on entitled, "independent of and superior to the ten days' notice to the other to reinstate this consent of the city of Richmond," to "con- cause on the docket of this court, on motion, struct, maintain, and operate" its lines "over for the purpose of enforcing and specifically and along" the streets of that city; that tele- defining, should it become necessary, their phone companies and their business were cm-respective rights under this decree."

By the other ordinance of September 10th, 1895, it was, among other things, provided: "The city council will grant permission to any company, corporation, partnership, or individual to place its wires and electrical conductors in conduit under the surface of said streets of the city: any such individual, partnership, corporation, or company desiring such permission shall petition to the council therefor; such petition shall name the streets, alleys, and the side and portions thereof to be used and occupied by such conduits, and shall submit maps, plans, and details thereof to accompany such petition."

The bill contains additional allegations to the effect