Galveston Electric Co. v. City of Galveston’s Empirical Analysis

Citation profile

66 federal appellate · 53 district · 139 state decisions

Most-quoted passages

The sentences later courts lift from this opinion, ranked by how many decisions quote each — the parts of the opinion doing the work. These counts are smaller than the citation total above because most of the 409 citing decisions cite the case generally; a passage count includes only decisions quoting that exact language verbatim.

1. “"In calculating whether the 5-cent fare will yield a proper return, it is necessary to deduct from gross revenue the expenses and charges; and all taxes which would be payable if a fair return were earned are appropriate deductions. There is no difference in this respect between state and federal taxes or between income taxes and others. But the fact that it is the federal corporate income tax for which deduction is made must be taken into consideration in determining what rate of return shall be deemed fair." (Emphasis added)”

   3 later decisions quote this exact passage · from the majority
   e.g. Homes v. James Buckley & Co. · State v. Oliver Iron Mining Co.

2. ““The other item included by the master in determining base value, but disallowed by the court, is $67,078 for brokerage fees. There is no evidence that any sum was in fact paid as brokerage, and there was included, as above shown, the sum of $73,281' for organization and business management in calculating the historical reproduction cost. The finding of the master rests upon testimony that bankers customarily get, in some form, compensation equal to 4 per cent, on the money procured by them for such enterprises. But compensation for bankers’ services is often paid in the lessened price at which they take the company’s securities, and is thus represented in the higher rate of interest or dividend paid on the money actually received by the company as capital. The reason given by the master for including the allowance for an assumed brokerage fee, is that a brokerage fee is ‘a normal incident of large industrial investments and has not been amortized,’ sinee ‘the record shows that the plant has been operated at a loss.’ If base value were to be fixed by the money expended, brokerage fees actually paid might with propriety be included, as are taxes paid pending construction. But as the base value considered is the present value, that value must be measured by money; and the customary cost of obtaining the money is immaterial. We cannot say that the court erred in refusing to include in base value an allowance for hypothetical broker’s fees.””

   2 later decisions quote this exact passage · from the majority
   e.g. Denver Union Stock Yard Co. v. United States · Reno Power, Light & Water Co. v. Public Service Commission

3. “The fact that a utility may reach financial success only in time or not at all, is a reason for allowing a liberal return on the money invested in the enterprise; but it does not make past losses an element to be considered in deciding what the base value is and whether the rate is confiscatory. A company which has failed to secure from year to year sufficient earnings to keep the investment unimpaired and to pay a fair return, whether its failure was the result of imprudence in engaging in the enterprise, or of errors in management, or of omission to exact proper prices for its output, cannot erect out of past deficits a legal basis for holding confiscatory for the future, rates which would, on the basis of present reproduction value, otherwise be compensatory.”

   1 later decision quote this exact passage
   e.g. Communications Satellite Corp. v. Federal Communications Commission