Judge Tayler, in the Cleveland Railway arbitration, says:
"I allow nothing for good will. A street railway company which has a monopoly, and especially if it has a franchise value remaining, can have no good will value."
Judge Lurton, in the Omaha Water-Works Case, says:
"That kind of good will, as suggested in Willcox vs. Consolidated Gas Co., is of little or no commercial value when the business is, as here, a natural monopoly with which he must deal, whether he will or no."
In connection with a consideration of franchise values, the following points are raised by the Federal Court in the Consolidated Gas Cases (157 Fed., 872-879):
"Should a corporation have a right to demand an income return, separable from any return upon its tangible property, from its right to place gas mains in the public streets and maintain them for its private profit, a right which it did not buy from city or state or pay therefor any legal valuable consideration? The Court thinks not, because 'Return can be expected only from investment, and he that invests must part with something in the act of investing.' Does any company invest its franchise in its business? It does not part with its franchise in the same way it parted with money or money's worth in acquiring or creating mains or plants. The investment of property was made, not in the franchise, but under the franchise, and on the faith thereof. The franchise is but a part of the power or sovereignty, allotted to a private person for the benefit of all, and only incidentally given for private emoluments.
"What is the value of a franchise to perform a certain service, under which no money is invested and no service yet performed? What is it worth apart from performance under it?
"Unless it can be seen to possess inherent value entirely apart from the earning capacity of the subsequent investment or from the actual earnings resulting from such investment, the value asserted or claimed is but a duplication of that derived from the use of the tangible property when so invested.
"The concepts of the nature and value of franchises are seen dimly and confusedly because of the failure to distinguish between productive and non-productive property. Land, money, chattels may by industry and intelligence be made productive without a franchise; but no excellence in these desirable qualities can ultimately render a franchise productive without the use of money, chattels, and land in connection therewith, and when the juncture is made the earning capacity of the real and personal property, plus the franchise and plus intelligence and industry, is really no greater than it would be without the franchise, for the franchise has added no producing power to the realty or personalty; it has but authorized their employment in a particular way and protected the owners while so employing them."
The Court emphasized the fact that the particular way in which they are used is in performing a function of the State—in doing a service for the public which the public might do equally well for itself, in the following language: