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Home > Journals > Michigan Law Review > MLR > Volume 8 > Issue 2 (1909)

 

Guy A. Miller

Abstract

There are probably few questions of greater interest, both present and future, than those which concern the relations between corporations performing the so-called public services on the one hand, and their immediate patrons and the general public on the other. These questions relate to the quality and safety of the services rendered, to the rights of all members of the public to receive service without discrimination, and to the charges which may be exacted for those services. To a great extent they involve matters of public policy and economics, rather than those which are strictly legal in nature, while even those questions which have been before the courts are not as yet definitely settled. Among the 1atter is that one which concerns the extent of the power of the states and of the various municipal divisions thereof, under proper delegation of authority, to regulate rates. The existence of this power was established by the decision in the original Granger Cases. That it can not be so exercised as to affect interstate commerce or impair the obligation of a contract was later determined. Within the jurisdiction thus limited, reasonable rates, or rates which permit the earning of a reasonable compensation, may be fixed. To deny the right to earn such compensation would be a deprivation of property without due process of law, and therefore in violation of the fourteenth amendment. But, on the other hand, the public has a right to be served at a reasonable rate, that is, at a rate which bears a reasonable relation to the value of the service rendered. These two rights, to charge a reasonable rate, and to be served at a reasonable price, are conflicting in nature, and it is much easier to state than to reconcile them or to define their limits. The courts have not told us how the reasonable value of a particular service to an individual is to be fixed nor have they laid down any comprehensive rule by which the reasonableness of a particular rate or schedule of rates may be determined.

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