Valuation And Rate-Making; the Conflicting Theories of the Wisconsin Railroad Commission, 1905-1917; With a Chapter On the Uncertainty of the United States Supreme Court Decisions, And a Concluding Chapter On the Need of a Revised Principle of Utility Val

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and continue to yield the desired amount of net earnings. The best a commission can do is to estab- ' 7 W. R. C. R. 187, 288-289, July 19, 191 1. Part of the language was subsequently quoted v^'wh approval in Superior Commercial Club v.
Superior Water, L. & P. Co., 10 W. R. C. R. 704, 749-750, November 13 1912.
115] THE INCENTIVE THEORY II5 lish a tentative rate. If that turns out to yield too little, it can be raised subsequently (if commercially possible) so as to yield what it ought to have
...yielded before plus a return on the intervening deficits. If it turns out to yield too much, on the other hand, it can be reduced subsequently so as to yield what it ought to have yielded before, minus the return on the intervening surpluses.
While the commission, however, has frequently recog- nized the propriety of adding early deficits to the rate base, it has generally added only the early ones, which are sup- posed to be occasioned by losses in building up the busi- ness. In the case of In re Appl.


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