The following opinion was filed July 25, 1923:
Jones, J.(dissenting). I shall briefly state my reasons for dissenting from the opinion of the court.
It is claimed by counsel for the plaintiff that the rates established by the Commission and approved by the order of the circuit court are confiscatory. If this claim is sustained -by the proof, the order fixing the rates was void as depriving plaintiff of property without due process of law. Then a federal question is presented, in the determination of which the decisions of the United States supreme court should be followed.
It is stated in the opinion of the majority, “The real con*308troversy in this case arises from the fact that the Commission allowed no accretion in value for that part of the electrical plant acquired by the utility prior to June 30, 1913.”
The opinions and findings of the Commission show that they adopted a value which had been determined in 1913, and added to that value the actual cost of subsequent additions.
No claim was made that the original or the later investment was not prudently made. It seems to me to be demonstrated from the finding of the Commission that they rejected the view that reproduction cost should be considered, and adopted what is generally called the prudent-investment theory.
It was stated in the opinion of the Commission, “No further apportionment of the property than that indicated by the 1913 valuation and by the book additions was attempted.”
Ever since the decision in Smyth v. Ames, 169 U. S. 466, 18 Sup. Ct. 418 (1898), it has been the rule in that court that the present as compared with the original cost of construction is a matter for consideration, and is to be given such ^weight as may be just and right in each case. It is unnecessary here to review the numerous decisions applying this rule, since it has been very recently declared in several cases.
The question now involved was considered in State ex rel. Southwestern Bell Tel. Co. v. Public Service Comm. (U. S.) 43 Sup. Ct. 544. As in the present case, there had been a previous valuation, to which the commission added the amount of the investment during a period of high prices. The court said:
“Obviously, the commission undertook to value the property without according any weight to the greatly enhanced costs of material, labor, supplies, etc., over those prevailing in 1913, 1914, and 1916. As matter of common knowledge, these increases were large. Competent witnesses estimated them as forty-five to fifty per centum. . . .
*309“It is impossible to ascertain what will amount to a fair return upon properties devoted to public service without giving consideration to the cost of labor, supplies, etc., at the time the investigation is made. An honest and intelligent forecast of probable future values made upon a view of all the relevant circumstances is essential. If the highly important element of. present costs is wholly disregarded, such a forecast becomes impossible. Estimates for tomorrow cannot ignore prices of today.”
This case was decided after the order of the Railroad Commission of Wisconsin now under consideration and the order of affirmance by the circuit court, two of the Justices dissenting.
In a still later opinion, rendered June 11, 1923, in Bluefield W. W. & I. Co. v. Public Service Comm. (U. S.) 43 Sup. Ct. 675, the same question arose, and the court said:
“The record clearly shows that the commission in arriving at its final figure did not accord proper, if any, weight to the greatly enhanced costs of construction in 1920 over those prevailing about 1915 and before the war, as established by uncontradicted evidence; and the company’s detailed estimated cost of reproduction new less depreciation, at 1920 prices, appears to have been wholly disregarded. This was erroneous. State ex rel. Southwestern Bell Tel. Co. v. Public Service Comm. 43 Sup. Ct. 544, decided May 21, 1923. Plaintiff in error is entitled under the due-process clause of the Fourteenth amendment to the independent judgment of the court as to both law and facts. Ohio Valley W. Co. v. Ben Avon Borough, 253 U. S. 287, 289, 40 Sup. Ct. 527, and cases cited.”
“It is clear that the court also failed to give proper consideration to the higher cost of construction in 1920 over that in 1915 and before the war, and failed to give weight to cost of reproduction less depreciation on the basis of 1920 prices, or to the testimony of the company’s valuation engineer, based on present and past costs of construction, that the property, in his opinion, was worth $900,000. The final figure, $460,000, was arrived at substantially on the basis of actual cost less depreciation plus ten per cent, for going value and $10,000 for working capital. This resulted in a *310valuation considerably and materially less than would have been reached by a fair and just consideration of all the facts. The valuation cannot be sustained. Other objections to the valuation need not be considered.”
In this opinion all the Justices concurred.
In another case in which the opinion was rendered the same date, Georgia R. & P. Co. v. Railroad Comm. (U. S.) 43 Sup. Ct. 680, the claim was made by the utility that the property should have been valued at its replacement cost in a time of high prices. The court refused to adopt this view, and held that a reasonable judgment as to the present fail-value required some consideration of reproduction costs, but that present fair value is not synonymous with present replacement cost. One hundred twenty-five thousand dollars was allowed by the commission to represent appreciation in land value.
It was expressly stated that the question on which the court was divided in the Southwestern Bell Tel. Co. Case, supra, was not involved.
In this court the cost of reproduction has hitherto’ been treated as one of the necessary elements to be considered in arriving at the true value of public utilities. Appleton W. W. Co. v. Railroad Comm. 154 Wis. 121, 142 N. W. 476; Oshkosh W. W. Co. v. Railroad Comm. 161 Wis. 122, 152 N. W. 859; Duluth St. R. Co. v. Railroad Comm. 161 Wis. 245, 152 N. W. 887.
It has sometimes been claimed that reproduction cost new less depreciation should be the dominant and controlling element in the investigation. Although the decisions of this court and the federal courts have rejected this view, they have uniformly held that it is a factor to be considered.
I cannot agree that the right of purchase by the public is entitled to great weight in determining the present fair value of the property. Under the indeterminate permit the city had no right of purchase except by paying the fair present *311value, to be determined according to methods which must be presumed to be fair and just. In a large proportion of the public utilities which have come into existence during recent years, this right of purchase by the municipality is recognized; but it seems to me that when the public seeks to acquire the property, the value thereof is not to be depreciated by the mere fact that the public has the right to buy for the full value. It seems very clear that the value of the property is not depreciated by the fact that the public utility is given by the statute a monopoly until it is established that public convenience and necessity require a second utility.
It is said in the majority opinion that in the decision of the United States supreme court the degree of weight to be given to the cost of reproduction is not stated. This is true, but it would be hardly practicable for the courts to define or specify the exact weight to be attached either to original cost or to the cost of reproduction, as neither of these elements, according to the prevailing rule, is an absolute guide.
The error in the orders of the Commission, as I understand them, is that no weight whatever was given to the cost of reproduction new less depreciation.
I do not consider that this case is distinguishable from the well settled rule declared in the decisions of the federal court above referred to, and for that reason I cannot concur.