Fort Worth daily gazette. (Fort Worth, Tex.) 1882-1891, 1889-02-23
WHAT CAN ITDOa


In notable decision granting a tenn
porary injunction to restrain the railroad
commissioners Of Iowa from enforcing the
adoption by Iowa railroads of freight rates
fixed by them, Judge Brewer of the
! United States circuit court discussed at
| length the power of the state to regulate
railroads, and the constitutional limita-
tions upon it. He upheld the right
! of the legislature to delegate to a
commission the establishment of rates,
but denied the claim of the commissioners
| that a Federal court had no jurisdiction to
! determine whether those rates were
| reasonable and just. 1t was held that
| the right to regulate railway traffic was
/ but that it did not carry with it the right
to destroy. Upon this point Judge
Brewer quotes the language of the SUI
preme court of the United States, in the
case of Stone VS.. Farmers trust COM
pany:
From what has thus been said it is not to be
inferred that this power of limitation regula-
ton is itself without limit. This power to regu-
| late is not power to destroy and limitation is
not the equivalent of conGscation. Under pre-
tense of regulating fares and freights, the state
cannot require railroad corporation to carry
persons or property without reward; neither can
it do that which amounts in law to taking Of
private property for public use without just COM
pensation without due process OF law.
With this doctrine for o basis, Judge
its agents, the commissioners, could
force the railroads TO adopt rates for
fares and freight that would yield no
compensation to the owners of the road.
Compensation - the opinion says,
''implies three things: Payment Of cost
Of service, interest on bonds and then
some dividend. It is stated in the fur
ther application of this doctrine that the
rates established must enable the roads
to employ skilled labor, keep their road
beds, cars and machinery in perfect order
and repair, maintain the best
appliances, pay the stipulated m
terest due upon their bonds,
and to declare a dividend in favor Of
their stockholders. The amount of the
dividend, it is held, the courts will not
attempt to regulate, whether it shall be
s per cent. or per cent; but they viii
go to the extent of protecting the stock
holders right to dividend of some sort.
The Importance of this decision i'll its
bearing upon the commission bill
now pending in the Texas legis-
Iature will appear from the state
ment that the majority of the Texas rail-
roads have not only failed in recent years
to pay dividends upon their stock, but
have defaulted more or less in the pay
ment OF the interest upon bonds for
which they are mortgaged. Four of the
trunk lines of the state have be-
come ipsolvent within the last three
years: the Texas and Pacific,
the Houston and Texas Central, the
Missouri, Kansas and Texas and
the International and Great Northern
railways. Receiverships are threatened
for others. It is probable that the earn
ings of the railroads of the state, above
J
of fixed interest charges, do not average
one-half of l per cent. upon the stock
holders interest. This fact sug-
gests the question: What is there /
for a commission to do that it
can lawfully do? If present |
rates and charges do not produce the rev. |
enhes to which the roads are legally en-
titled and the protection which they |
can claim at the hands of Federal /
court, what practical good may be ae-
complishea by u commission? 1t is true
that it can foist intending litigation
upon the state and the railroads, array
them in open hostility TO each other,
arouse a dangerous spirit OF agrarianisIn
on one hand, and on the other inspire a
general distrust OF Texas among eapitai-