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Public Utilities-Easement In Public Highways As An Element In Rate-Base Of Street Railway

Michigan Law Review

Out of the vast amount of indefiniteness that characterizes the law governing the valuation of public utility corporations for the purpose of fixing rates, two theories have been evolved as guiding principles in determining the "fair value" of the utility upon which a reasonable return is to be allowed. Some courts adhere to the reproduction theory; others to the prudent investment theory as the controlling factor in determining the rate-base. See 15 MICH. L. REV. 205; 22 MICH. L. REV. 147. And it is now evident that one of these two theories will prevail, but which one is still uncertain. …