Supreme Court, April, 1921. [Vol. 115. York. The said order provided that the rates therein specified should remain in force for a period of three years and thereafter until the further order of the commission. On the 16th day of September, 1919, the public service commission made an order which constituted a modification of the previous order of September 16, 1919, reducing certain rates as specified in the earlier order, and it was provided therein that such rates should remain in force for a period of one year and thereafter until the further order of the commission. On the 1st day of October, 1920, the New York Telephone Company filed a petition "for the consent of the Commission to the Establishment of a New Schedule of Rates for Telephone Service in the City of New York," and it asked that the commission" after such hearing and deliberations as it may deem necessary, make an order authorizing and establishing the proposed rates as the legal rates to be charged for telephone service within the City of New York, such rates to be effective from October 1, 1920, or as soon as the reasonableness of said rates can be determined, and that it will make such further order or orders and such modifications of former orders as may be necessary in the premises." On the 18th day of October, 1920, the public service commission began hearings upon this petition and these hearings were continued from time to time till March 7, 1921. At these hearings the New York Telephone Company offered testimony in support of its petition, and the city of New York appeared regularly throughout the proceedings and cross-examined witnesses, but owing to the volume of the testimony presented by the petitioner and the intricacy of the details it has not yet completed the cross-examination of the petitioner's witnesses or presented its evidence to combat the claims of the New York Telephone Com Misc.] Supreme Court, April, 1921. pany, and no testimony of any kind has yet been presented to the commission in behalf of the consumers. On the 23d day of February, 1921, the New York Telephone Company filed an additional petition with the commission for leave to put into. immediate operation a schedule of rates to produce additional revenue. 25 St. Dept. Rep. 414. The city of New York opposed the application and insisted that the commission was without power or jurisdiction in the midst of the proceeding without having fully heard the proof offered by the city, to make any increase whatever; that the commission had no power to make temporary rates and argued upon the merits of the case as well as upon the law. Thereafter and on the 17th day of March, 1921, the public service commission made and entered an order which recites among other things that "It now appears to the satisfaction of the Commission from the evidence before it in the proceeding, and also from its knowledge and information of the general condition of said company, derived from its various reports filed with this Commission according to law and pursuant to the order of this Commission, that the increase in wages of employees made effective as aforesaid since the order of this Commission of September 16th, 1919, requires an additional annual expenditure of approximately eleven million dollars by said company, and to that extent decreases the income of said company from the amount anticipated it would receive from the rates established by said order of September 16th, 1919, when said order was made by this Commission." The order then provides that "pending the further continuation of this proceeding and without affecting the final determination thereof, the Commission does hereby consent that from and after April 1st, 1921, and until its further Supreme Court, April, 1921. [Vol. 115. order in the premises, the rates of said New York Telephone Company for exchange telephone service in the City of New York as fixed and determined by the said orders of the Commission dated March 30th, 1915, and September 16th, 1919, be increased by "certain additional percentages. This consent was made conditional upon the filing of a bond providing for the repayment, to each and every subscriber in the city of New York, upon the final determination of the proceeding, of any amounts paid by said subscribers in excess of the rates or charges which may be fixed upon such final determination, and it was further provided in the order that "upon compliance with said condition said company may file upon five days' notice a tariff in accordance with the terms of this order." The city of New York now seeks to enjoin the New York Telephone Company "from imposing or entering against or collecting from any consumer of telephone service any rate or charge above the rates and charges fixed by the order of the Public Service Commission dated September 16, 1919." The plaintiff claims that the public service commission was without power to make this order of March 17, 1921, because it is in effect a provisional order made before the completion of a hearing still pending and is an order which is intended to make the final determination of the commission after the completion of the hearing retroactive from the date of the provisional order. If the order of March seventeenth must be regarded as a provisional determination of "the just and reasonable rates, charges and rentals to be thereafter observed and in force as the maximum to be charged, demanded, exacted or collected for the performance or rendering of the service specified," then the contention of the plaintiff is sound, for the power of the public service commission to make such deter Misc.] Supreme Court, April, 1921. mination is conferred only by section 97 of the Public Service Commissions Law and that section gives the public service commission power to determine such rates only after a "hearing " and does not expressly confer upon the commission any power to make any provisional or conditional determination pending the completion of the hearing nor can any power of such kind be inferred from the general provisions or intent of the act. In my opinion, however, the order of March 17, 1921, is merely a consent of the commission to an increase in the rate previously fixed by the commission and section 97 of the Public Service Commissions Law forbids an increase only if made without the consent of the commission, and I can see no ground for holding that the right to grant such consent is subject to any limitation that it shall be given only after a complete hearing sufficient to enable the commission to determine the just and reasonable rates to be charged thereafter. The Public Service Commissions Law does not impose upon the commission either the power or the duty to fix the rates which shall be charged in all cases for telephone service. Section 92 of the law requires every telephone corporation to file schedules of its charges and provides that unless the commission otherwise orders no change shall be made in any rate except after thirty days' notice to the commission. Subject to the common law rule that no public service corporation may charge more than a reasonable rate, a telephone company may at will change its rates merely by filing schedules in accordance with this section unless or until the public service commission has by order made after a hearing, fixed the just and reasonable rates to be charged as the maximum for telephone services in accordance with the provisions of section 97. As long as such order remains in force the Supreme Court, April, 1921. [Vol. 115. Telephone Company is bound by it, but under section 23 of the Public Service Commissions Law the order remains in force only until "changed or abrogated by the commission " and when such order is abrogated then obviously the right of a telephone corporation to increase its rates by filing of schedules is exactly the same as before the original order was made, and when the commission gives its consent to an increase of rates above the amount of the rates it had previously fixed as the maximum rate, then pro tanto the previous order is abrogated or at least suspended. The statute contains no provision that after an order fixing the maximum rates to be charged the commission may not abrogate such order or consent to an increase except as part of a new order fixing new rates which thereafter shall be observed and in force as the maximum to be charged. Such an order fixing maximum charges when made, like a statute of the legislature fixing maximum rates, is an attempt "to predict for future years the charges that will yield a fair return. The prediction must square with the facts or be cast aside as worthless. Ex parte Young, 209 U. S. 123, 147, 148. It must square with them in one year as in another, at the beginning but equally at the end. In all such legislation from the hour of its enactment there thus inheres the seed of an infirmity which the future may develop. It is the infirmity that always waits upon prophecy; the coming years must tell whether the prophecy is true or false. All that we can say at the outset is that the power to regulate exists. The validity of its exercise depends upon the nicety of the adjustment between forecast and events. This is as true of a regulation which looks forward a year as one which looks forward a decade or a century. In either case with differences only of degree, there is a forecast |