of the commission fixed rates so low as to deprive the company of its property without due process of law, and (2) that the Pennsylvania statute, as interpreted by its highest court, was also unconstitutional in providing a procedure not consonant with the requirements of due process of law. The federal Court reversed the Pennsylvania courts with Justices Brandeis, Holmes, and Clarke dissenting. Mr. Justice McReynolds, speaking for the Court, said:

"We are compelled to conclude that the Supreme Court interpreted the statute as withholding from the courts power to determine the question of confiscation according to their own independent judgment when the action of the commission comes to be considered on appeal.

"The order here involved prescribed a complete schedule of maximum future rates and was legislative in character. . . . In all such cases, if the owner claims confiscation of his property will result, the State must provide a fair opportunity for submitting that issue to a judicial tribunal for determination upon its own independent judgment as to both law and facts; otherwise the order is void because in conflict with the due process clause of the Fourteenth Amendment." 13

The learned justice then proceeded to ascertain whether there was some other recourse to the courts afforded, which would provide the judicial review the Court deemed necessary, and determined that there was not, and therefore

"their [i.e., the courts'] jurisdiction, as ruled by the Supreme Court, stopped short of what must be plainly entrusted to some court in order that there may be due process of law." 14

Legal writers discussing the case have been singularly at odds as to its holding and implications. It is clear to the writer, however, that the decision is really but a bit of syllogistic reasoning, having for its major premise the doctrine of the separation of powers. In an argument that is a monument of analytical 13 Ohio Valley Water Co. v. Ben Avon Borough, 253 U. S. 287, 289 (1920). 14 At p. 291. The dissent was of the opinion, first, that whether or not there was sufficient judicial appeal afforded, there was sufficient remedy by injunction either to the state or federal courts, and, second, that, as to the proceedings actually had, it was sufficient that the court inquire whether there was substantial evidence to sustain the order, a rule which, it was said, the United States Supreme Court had itself adopted. See p. 292.

reasoning, Messrs. Gordon, Smith, and Buchanan, attorneys for the plaintiff-in-error, develop their thesis. In their main brief 15 occurs the following:

"We respectfully submit that the effect of the Public Service Company Act, as construed in this case was to deprive the plaintiff in error of its liberty and property without due process of law, by denying it a proper hearing upon the question of confiscation. This is a necessary conclusion from the following propositions . . . (a) That the order of the Public Service Commission fixing the rates and the entire revenue of the plaintiff in error was a legislative act; (b) That the constitutional question whether this legislative act was confiscatory was ultimately a question for the court, not the legislative body to decide; (c) That the legislature cannot require the court in passing on the constitutionality of a legislative act to sustain it when there is any substantial evidence to support it, though the weight of the evidence may be clearly against its validity. . .

The decision of the Supreme Court seems a full affirmation of the Water Company's argument as, in the excerpt from the majority opinion just quoted, the Court in substance says: (1) This order is legislative in character; (2) In case of such order if confisca tion is claimed some judicial tribunal must decide the question "upon its own independent judgment as to both law and facts." In other words the Court is in the grip of a "jurisprudence of conceptions," 16 the categories of which it logically applies to the bitter end.17

In spite of the fact that a body of experts specially entrusted with the task of rate regulation had for weeks taken testimony on the subject, and had listened to the arguments of counsel and experts, the Supreme Court rules that the reviewing court may not regard this as establishing the presumptive correctness of the decision reached, but must itself examine the facts and the law in the case and on its own independent judgment decide whether the rate fixed is or is not a legal one. Such a result will largely disappoint the purposes which led to the establishment of com

15 At p. 66.

16 See Roscoe Pound, "Mechanical Jurisprudence," 8 COL. L. REV. 605. 17 For an excellent argument in favor of this explanation of the case, see Laurence Curtis, 2nd, supra, 34 HARV. L. Rev. 862,

missions, and turn the body of experts which the state had provided into a mere commission for taking testimony of exceedingly involved and technical nature, which testimony courts of law, with their manifold other duties, must endeavor as best they may to fathom.

II

Although the case has become a part of the law of the land, yet on account of its future influence it may not be out of place to venture that the principles on which it proceeds are unsound. It is true, if one is willing to accept the premise that the fixing of a rate is a legislative act, that there is a very seductive logical sequence in the final result reached. It is also true that the Supreme Court in Prentis v. Atlantic Coast Line,18 after a careful review, held that the establishment of a future rate by a public utility commission was a legislative act and not a judicial one under the provisions of a statute 19 forbidding the United States courts to enjoin proceedings in "any court of a State." In that case Mr. Justice Holmes drew a line of distinction as follows:

"A judicial inquiry investigates, declares and enforces liabilities as they stand on present or past facts and under law supposed already to exist. ... Legislation on the other hand looks to the future and changes existing conditions by making a new rule to be applied thereafter to all or some part of those subject to its power. The establishment of a rate is the making of a rule for the future, and therefore is an act legislative not judicial in kind. . . ." 20

The learned justice further averred that it makes no difference that prior to the establishment of the rate there has been an investigation of the facts, and a decision reached as to the justice and legality of the rate upon the facts as found." Without con

18 211 U. S. 210 (1908).

19 U. S. REV. STAT., § 720.

20 211 U. S. 210, 226 (1908). The injunction in the case was denied, however, since the utility had not taken advantage of the remedies offered by the state law to prevent the establishment of rates claimed to be illegal.

21 There is no doubt of the authority of this case in establishing, where it is necessary to consider the question in connection with the doctrine of the separation of powers, that the fixing of a rate is a legislative act. See Louisville and

tending that the Prentis case was wrongly decided, to conclude that the Court's classification of rate making as a legislative act is at all times and in all places applicable would be to be guilty of that "delusive exactness" which Mr. Justice Holmes himself has condemned. It may reasonably be doubted whether, even under the definition of legislative and judicial powers in the Prentis case, the fixing of a rate should always be held a legislative act. The commission is not strictly engaged in changing "existing conditions by making a new rule to be applied thereafter." On the other hand it does act "under law supposed already to exist." Whatever may have been the conception at the time of Munn v. Illinois 22 as to the power of legislatures and commissions, it is now well established that the state is bound to fix rates just to both the public and the utility. Decisions of the Supreme Court have established the limit beyond which the commission may not go.23 It is true that the standard is a flexible one, but so are many standards which courts apply, for example, that of reasonable care. Acting under the standards so fixed in the law the commission, by ascertaining the prevailing interest rates and the rate base on which the utility is entitled to earn the ascertained interest, fixes the rate the utility is entitled to charge. In so doing it is submitted that its work is more nearly analogous to that of a court than to that of a legislative body. It is true that the rate applies to the future, but so do judicial decisions by the operation of the rule of stare decisis; and many

Nashville Railroad Co. v. Garrett, 231 U. S. 298, 305-307 (1913); Keller v. Potomac Electric Co., 261 U. S. 428, 440 (1923); Chicago Junction Case, 264 U. S. 258 (1924), where, however, the Court is in a quandary as to the nature of an order allowing one carrier to acquire stock in another.

22 94 U. S. 113 (1876).

23 Smyth v. Ames, 169 U. S. 466 (1898); Southwestern Bell Telephone Co. v. Public Service Comm., 262 U. S. 276 (1923); Georgia Railway & Power Co. v. R. R. Comm., 262 U. S. 625 (1923); Bluefield Water Works v. Public Service Comm., 262 U. S. 679 (1923). The last three cases above cited have, for the present at least, settled the rule of Smyth v. Ames: that a rate is confiscatory and unconstitutional unless it affords the utility "a fair return upon the value of that which it employs for the public convenience." This is not the place to enter into the discussion of whether the return should not be figured on prudent investment" instead of on present "fair value." Mr. Justice Brandeis' dissenting opinion in Southwestern Bell Telephone Co. v. Public Service Comm., supra, is a powerful argument in favor of "prudent investment as a rate base.

judicial decrees, such as mandamus, injunction, and decrees of alimony, are directly framed to affect the future conduct of the parties.

"The duty of the Commission is not that of a lawmaker laying down such rules as it may think will promote the common weal. Its function is to see whether the rates which the carrier is charging are in accordance with the requirements of law laid down in the Act and, if they are not, to make them so." 24

It should also be noted that, when the action of a commission fixing rates is attacked as a delegation of legislative power, the courts uniformly hold that it is really not legislative in "any true sense," but only administrative.25

But the greatest objection to the dogmatic assertion that the establishment of a rate by a commission is a legislative act requiring treatment of it as such by the courts is that the real reasons for differentiating the legislative and judicial functions in our system of government are entirely ignored. There is inherent sense and justice in the rule that, when the enactments of large representative legislative bodies affect adversely the interests of individuals contrary to the fundamental law of the Constitution, the court should enter into an independent investigation of the authority of the legislative body so to act and should not be bound by the findings of fact of that body.26 Their enactments have a general operation affecting many people, and those affected have no adequate means of presenting their claims before the body with any assurance that they will be seriously weighed and considered. The group is large, and individual members are not easily held to account. The body does not act judicially, seeking to give effect to recognized principles of jurisprudence,

24 Bruce Wyman, "Jurisdictional Limitations upon Commission Action," 27 HARV. L. REV. 545, 561.

25 Intermountain Rate Cases, 234 U. S. 476 (1914); Trustees v. Saratoga Gas etc. Co., 191 N. Y. 123, 83 N. E. 693 (1908); State v. Atlantic Coast Line, 56 Fla. 617, 47 So. 969 (1908), and notes thereon in 18 L. R. A. (N. S.) 713, 32 L. R. A. (N. S.) 639, 649.

26 Attention is here called, however, to the fact that even in cases of legislative action under the general police power of the state, the presumption is in favor of the validity of the act. This principle is so familiar as not to require citation of cases.