Abstract

BASIC to any consideration of the prices charged by a railroad or other public utility are the revenues which accrue to the operating corporation and the resulting rate of return. In this country judicial decisions have laid down the broad principles for ascertaining both the capital invested and the proper yield from it. As these principles are modified or abandoned old problems in determining bases and rates gradually sink from view and are replaced by new ones. Such a change is now in process. Recent court actions have displaced the long dominant theory of return on fair value with the doctrine that rates of return should be commensurate with returns on other invest-

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