ABSTRACT
Present versus new investors.—In discussing the subject of rate-base determination from the standpoint of “fairness” to investors it must be recognized that only present investors need be considered, and that they merit consideration solely because of the ex post facto nature of any changes to be made in regulatory policy subsequent to their investment. New investors (those entering the situation after definite policies have been determined and announced) are free agents who knowingly and willingly choose to invest their funds under the new regulations, and who have the opportunity of selecting the degree of stability or of speculative possibility which they desire. Therefore, consideration of new investors involves not “fairness,” but the adoption of regulatory policies that will make possible attractive utility investments—investments that will meet with the approval of the investing public and which will, therefore, tend to enable the utility to secure its necessary capital promptly and economically at any time. The blue sky laws of the various states and the Federal Securities Act should provide for investors in public-utility companies, as for other investors, all the “protection” to which they are entitled.
