the commission; and only fails when “confiscatory” or when in conflict with Federal legislation.  Perhaps the most notable clash between the States and the Federal power has been on this subject in this very last year, where State laws have been annulled and even high State officers enforcing them restrained by injunction of Federal courts.  Still, in the legislation of all States, I find as yet none overstepping the limits we have above defined as proper.

The question of the amount of return required by the court is, of course, a most important one.  It is a difficult subject, because no fixed rule takes any account of risk to the original investment.  It is all very well to say that six or eight per cent, is a fair return on invested capital, or even on “cost of reproduction”; but when, as to original promoters, the chance of even any return was as one against ten of a total loss, fifty per cent. of annual profit would not be more than a “fair return”!  The original Massachusetts railway legislation seems to contemplate that ten per cent. should be the normal return on railway stock, for it provides that at any time the commonwealth may purchase any or all its railroads upon the payment of the cost, plus ten per cent. a year profit.

Other than in railroads, the main fixing of rates has been in illuminating gas.  Many cities are permitted to legislate on this point.  In New York it was decided that they might so do, provided the gas company got a fair return on its capital, not including the value of its franchise; and certainly it would seem to be the height of audacity to claim more.  Much as if a boy, presented by his father with hens and the feed to support them, were to demand the capitalization of the value of all future eggs upon going out of business!  In Boston, intelligent legislation was adopted—­based on good mediaeval principles—­which allows dividends at a sliding scale according to the price of gas to the consumer.[1] The great reason, of course, of the cessation of legislative activity on the part of the States, as to railway rates, has been that the great bulk of rates appertained to interstate commerce, or at least must be controlled by the rates of interstate commerce; so only legislation as to strictly local rates remains.

[Footnote 1:  It will be remembered that the very earliest Statute of Bread and Ale (1266) established such a sliding scale.]

The two most important questions, aside from that of an actual extortionate rate (which has hardly ever been claimed) are that of discrimination, and of the long-and-short-haul clause, which is really a derivative of the former.  We have found the principle against discrimination time-honored in the common law; but modern statutes wisely recognize that discrimination only exists when two persons or two localities are given different rates under equivalent circumstances. There has, therefore, been great dispute what these