New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1891-04-05
THE NEBRASKA RAILWAY LAW

The new railroad law in Nebraska, passed
by the Legislature of this year, appears to be
substantially equivalent to the Maximum Rate
law passed some years ago by the Iowa Legis-
lature. 1t is said by the railroad managers that
this enactment will cause a reduction OF at least
90 per cent in the average charges by the rail-
roads for the services rendered. 1t is also
stated that most of the roads, at the new rates
permitted under this law, will not be able to
earn operating expenses and interest on their
funded debts. Indeed, as to one Of the largest
corporations in the State, it is stated that the
new law will in ordinary seasons make 1t i'm
possible to earn anything for stockholders, and
though when there are good crops fair income
NAV be earned, even this strong company is
liable to be in default on its bonds in any year
of partial failure of crops.
II is not improbable that these estimates of
the new law are to some extent exaggerated.
Il is probable also that the law itself may never
be strictly obeyed or enforced according to Its
shirt IL is also probable that both the cost
and the value of the services rendered by the
different railroads will be reduced materially
in order to avoid bankruptcy. But there is no
reason to doubt that the act will do great harm
to many of the companies, and its effects Will
be felt not merely within the State Of Nebraska.
For it is to be remembered that the most i'm
portant roads of that State are great trunk lines
of traffic between the Far West and the East,
and are in such relations OF competition with
other roads on either side that the rates they may
he compelled to make will have to be adopted,
10 some extent at least, by the other railroads
for their mutual defence. A great part of the
traffic west of Chicago will thus be more or less
affected by the laws of the two States, Iowa and
Nebraska. and unless the new enactment should
be deprived of force by the courts, its operation
will undoubtedly make great difficulty for most
of the Western railroads. The prospect of a
decrease of earnings is not an encouraging one
either for stockholders or for creditors.
There is little prospect that an appeal to
the courts will give present relief. 1t is the
disposition OF the courts to try new act in any
State, and test it by its practical workings, be-
fore deciding in regard to its violation of con-
stitutional obligations. The presumption is
naturally in favor of the new law. the courts
being inclined TO assume that the Legislature
knows the facts and that the representations
by interested parties are exaggerated. No doubt
the strong drift Of public opinion in the West
ern States has its influence also upon the minds
of judges, as upon the action of other people
But if the courts wait for proof in actual ex-
perence that a new enactment works injustice,
in many cases they wait for the bankruptcy of
the railroads concerned. 1t is not unlikely that
large proportion of the railroads affected by
the new law in question may sooner or later
be forced to default on their obligations, unless
its operatiOn should in some way be checked.
The immediate effect of any such enactment
is to check the building of now railroads. This
eifec. was very marked after the Iowa law was