ct express legislation
as to freight rates). Such legislation stands in as strong (or
stronger) constitutional position, as rates made by 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