RAILWAY VALUATION IN CONDEMNATION PROCEEDINGS--RELATION TO RATE MAKING

Authors

Abstract

ln England the reproduction cost of a railroad is disregarded in fixing the price which a government must pay on taking over the property. Grand Trunk Ry. v. The King [1923] A. C. 150, which affirmed the decision of two out of three arbitrators that the preferred and common stockholders should get nothing, inasmuch as the earning capacity of the railroad gave them no value, and the "reproduction" or "reconstruction'' or "replacement" value of the railroad was immaterial. Mr. Taft, now Chief Justice of the Supreme Court of the United States, was one of the arbitrators and dissented. The opinions of the arbitrators are reported in 57 DOMINION LAW REP. 8 (where the majority held that evidence was not admissible to prove the reproduction value of the physical plant of the system as a going concern; see also the terms of the Agreement under which the value of the stock was submitted to the arbitrators) and in 61 DOMINION LAW REP. 672. A synopsis of the decision of the arbitrators is also found in the RAILWAY AGE for September 10, 1921. The American decisions are referred to as "under a different system of law." This probably refers to the American written constitution where "due process of law'' invalidates rate reductions which prevent a fair return on present property values. England has not had to grapple with forty-eight different states reducing rates.

Recommended Citation

RAILWAY VALUATION IN CONDEMNATION PROCEEDINGS--RELATION TO RATE MAKING, 21 Mich. L. Rev. 904 (1923).
Available at: https://repository.law.umich.edu/mlr/vol21/iss8/5