Summary

Portrait of Harlan F. Stone Harlan F. Stone Natural Gas Pipeline Company of America v…

The appellant assails the statute as unconstitutional so far as it authorizes the commission to obtain from appellant's books and records any information bearing upon the reasonableness of the price of gas sold to the District Company. Appellant recognizes that the absence of 'arm's length bargaining' between contracting affiliates is sufficient to support such an inquiry, and may be an adequate ground, in fixing the reasonable rates of a public utility company, for disregarding the price at which it purchases the commodity distributed.
Source: Wikisource

Portrait of Harlan F. Stone Harlan F. Stone Natural Gas Pipeline Company of America v…

We are not unaware that, as the statute recognizes, [2] there are other methods of control of a corporation than through such ownership. Common management of corporations through officers or directors, or common ownership of a substantial amount, though less than a majority of their stock, gives such indication of unified control as to call for close scrutiny of a contract between them whenever the reasonableness of its terms is the subject of inquiry. In these circumstances, appellant can hardly object to the attempted inquiry into the fairness of the price.
Source: Wikisource

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