Is the Unearned Increment of Value of Public Service Company Property Protected by the Constitution? By Frank Hendrick Of the New York bar; Author of "Railway Control by Commission"; "The Power to Regu late Corporations and Commerce"; "Policies, Reaction and the Constitution," etc., etc. THE movement which has had for its purpose the solution of what is called the corporation problem has been characterized by a popular passion for new legislation and for the punishment of individuals. Preliminary to the settle ment of the question must come a realization that new legislation is not necessary and that the responsibility for the misconduct of individuals is properly chargeable largely to the pub lic. So far as the acts of business corpora tions are concerned, the prevalence of wrong-doing can be explained only by the non-enforcement of the law by public officers and the timidity of judges applied to for relief. By busi ness corporation is meant the ordinary trading or manufacturing corporation, in which the public is not concerned except in so far as it should be guarded from fraud. To be convinced that a corporation problem remains for settle ment as to the private corporation, one must be unmindful of the vigor of the common law and the continued exist ence of the judiciary. Absolutely distinct is the position of the public service corporation, i. e., the corporation which has special rights or franchises necessarily tends to a mono poly, and therefore requires con stant supervision by the state. The special "business" of such a corporation is to exercise a public function, to perform a service for the public, to use public property. Like the public it self, such a corporation exercises the power of eminent domain. Through a
grant from the public and by virtue of this power it acquires property. Private property condemned by such a corporation can be devoted only to the public purpose served by the corpora tion and becomes therefore, to that extent, public property; a franchise granted by the public to such a corpora tion can have no other purpose than the service of the public and does not by reason of the temporary exercise of it by the corporation for profit cease to be a public franchise. Whether tangible or intangible, property held by public service corporations remains, in a cer tain sense, public property. A public service corporation cannot, therefore, exist except by using public property. How the corporation gets public property, to what use it puts the property, and to what extent it asserts dominion over what belongs to the public are questions to which the bodypolitic, the property of which is in the disposition of the public service corpo ration, must attend at its peril. In fact, the word of the public service corporation enigma is that if the public administers its own property as an honest steward, it will be difficult for the public service corporation to offend. While it is difficult to state with distinctness the limits upon the power of taking land or disposing of fran chises imposed upon the public service corporation, it is certain that as to both land and intangible property, the own ership of the public service corporation never extends to the absolute domin ium exercised by a private owner.
