The Helena independent. [volume] (Helena, Mont.) 1875-1943, 1892-08-23
Railroads in Texas Have Been Do
ing Business That Lost
Money.
And the State Railroad Commits
sion Tried to Out Their
Rates Lower.
Relief Il Secured by tho Com panieS in the
United states Court--A sweep.
ing Decision.

NEW IORK, aug. 1I.-A Ol6phCCn from
Dallas, lex, say United States Judge Nc
Cormick, at Dallas, in his decision in the
case Of the railroads against the Texas
railroad commissioners. decided every point
in favor of the railroad companies. and
granted an injunction against the commits
sioners restraining them from establishing
proposed rates. The rates proposed by the
commission, the railroads claimed. would
have compelled them to run the roads at
serious loss.
The decree reviews Texas railroad build
ing and the agitation leading to the adop-
tion Of Z constitutional amendment author
izing the commission. Judge Mccormick
then says there is no such collusion between
the complaining trust oampanies and rail-
roads shown az would prejudice the rights
of the trust companies to file bills. More
over the trust companies have an equitable
interest in the fair earnings Of the rail
roads. as vel! as actual ownership, in the
possession of securities of tho roads which
are being injured and threatened with de-
struction by the railroad commissions acts.
They show further that tho railroads are
coerced by the com mission and the direct
ors cannot exercise their Judgment and
discharge their duties as they should and
would but for said coercion.
The court then goes on to show that the
railroads were built under extreme hard
ship opening up new country, and having
to wait long time for returns also that
the character of the soil is such az to render
it extremely difficult to construct and main
tain sound roads, and the proper cost of
fo- do I'M
amount of their bonded indebtedness. The
earnings of these roads, says the court,
have not been diverted to improper uses
and none of these railroads except the Gulf,
Colorado d Santa Fe, has paid dividends
Four of these roads have had to submit
to the process of reorganization under
foreclosure proceedings, two Of them a
second time. The Gulf road. which has so
far escaped this ordeal, now owes floating
debt of upwards of three millions of dol
lars. With inconsiderable exceptions. the
judge says. the commission has reduced
every tariff which it touched. Under COM
mission rates the Texas & Pacific derives
only enough revenue to pay operating ex-
panses and the cost of repairs, and five per
cent on $4,000 per mile. This road. under
such tariff, has lost over $212,O in seven
months. The st. Louis d Southwestern
penses, and has been compelled to borrow
money to meet deficit in operating ex-
penses and interest on mortgage obliga-
tions.
The loss to the International i, Great
Northel n, in the few months it has been
out of the hands of the receiver, shows
greater ratio than 5000. 600 per annum. The
loss to the Gulf. Colorado q Santa Fe from
these commission tariffs aggregate $500. 600.
The question of reasonableness of rates
is eminently a question for judicial investi-
CATION. Under the commissions ruling the
roads are deprived of tho lawi al use OF
property without due process of law and in
States, and insofar as they are deprived,
while other pc sons are permitted to re-
ceive profits on their invested capital, the
companies are deprived of equal protection
of law. Pointing to the fact that the inter
state commerce commission did not possess
except through court of highest jurisdic-
tion, 1.-The court said that this commission
would not meet the exigency of the hour if
the reasonableness OF its rates could be in
quired into before being enforced.
In conclusion Judge Mccormick says:
1t clearly appears to me that every pro-
vision of the law which tends to force
compliance with the rates Of the commits
sion, whether they be reasonable or not, is
invalid" Orders were therefore issued re-
strRininR the commission from enforcing
or trying to enforce any tariffs heretofore
issued, or from issuing any more tariffs,
and enjoininR all persons, corporations or
individuals from suing the railroad com-
pany under the tariffs of the commission
heretofore issued. or hereafter to be issued
for any overcharge or penalty arising under
the commission law, and enjoininR the
railroads from keeping in effect tariffs
heretofore issued Or putting into effect
tariffs hereafter to he issued. The case was
appealed to the United States supreme
ODuft