The record-union., 1894-05-05
stitutional limitations. but by industrial
/ ones,r lR Il TRANSPORTATION. d. 1909

or three years there was diiuoSt uo,AA
suspension of railway construction IA Tue
West and Northwest States Tnen Mln-
nesota resumed and kept the lead until
she had a complete system of trunk hnes
and her Railroad Commissioner reporteu
that legislative interference with rates
was the surest way to repel investment
in railways. rep. 1881, p. 81
A FORGOTTEN LESSON.
But the lesson was forgotten and new
agitation started and in 1857 Minnesota
passed an Act for a railroad and ware
house commission, with power 10 nx
railroad rates. The railroads contested
the rates, but the courts held them con-
elusive as to equality and reasonabieness,
and that there could be made no judicial
inquiry into their fairness.
WHAT THE SUPREME COURT HELD.
The Supreme Court of the United States.
when a case reached it. said regarding
the rule of the courts below that while
railroad cannot fix unequal and unrea-
sonable rates, there is no power in the
courts to stay the hand of the Commits
sioners fixing rates that are unequal
and unreasonable, was in conflict with
the Federal Constitution.
THE QUESTION OF JUSTICE.
1t held the railroad had the right to
judicial investigation of the truth of the
courts substituted for that right as an abb
solute fnality the action OF a Railroad
Commission not clothed with judicial
functions. The question of reasonable
ness of rates, said the court, ''is emf
nently a question for judicial investiga-
ton. requiring due process OF law for Its
determination. If the company is de-
prived of the power of charging reason
able rates for the use of its property, and
such deprivation takes place in the alb
sence of an investigation by judicial ma
chinery, it is deprived of the lawful use
of its properly, and thus, in substance
and effect, of the property itself, without
due process of law, and In violation OF
the Constitution of the United States;
and in so far as it is thus deprived, while
other persons are permitted to receive
reasonable profits upon their invested
capital, the company is deprived OF the
equal protection of the laws"
THE DEFENSE OF PROPERTY RIGHTS.
This decision was rendered in 1890. 1t
| recognizes that property affected with a
public use has the right equally with all
other forms of property to the protection
of the courts and the constitution. Three
Justices dissented, because it practically
upset the previous holdings of the court
already referred to. Shortly after this
the Minnesota statute was repealed.
In April, 1891, Texas established a
railroad commission and gave it power to
prescribe rates, regulations and charges,
etc. The Act acknowledged the right
of the railroad to a reasonable rate, and
its right to equal protection OF the
laws, but it made the rates to be fixed
by the commission conclusively rea-
sonable and denied to the railroads
the right to raise a question of
reasonableness in the courts. Severe
penalties attached for violation of the
"Act" It made the commission rates
conclusively fair and just in all actions
between private persons and the railroad
companies. But 1t was granted that by
direct action the reasonableness of the
rates might be assailed in a certain court.
The purpose was manifestiy, by deny
ing to the railroad the right to have heard
and tried in its defense the reasonable
ness and therefore lawfulness of the Com
missioners' rates, to enforce compliance
with the rates, whether just or unjust, by
threat of the penalties, the only fact to
prove for judgment against the railroad
being that 1t had not accepted the Com
missioners' rate. II the rate is not ac-
cepted the penalties are inevitable. If it
is accepted. and in direct suit it should
finally be declared unreasonable, the
railroad has no remedy for the wrong it
has received in having the unreasonable
rate imposed upon 1t. OF such rule of
procedure Judge Cooley, in his 'Princi-
pies of Constitutional Law has stated:
"a statute which should undertake to es-
tabllsh conclusive rules OF evidence, whereby
party might be excluded from any oppor-
tunity TO snow the facts on the affirmative
presentation OF his adversary's case, would
be nothing short OF a statute OF confiscation,
and manifeStly In violation Of constitutional
rights" lp. 3299
r,r.rcr .uroNr
The Texas law, though in direct action
to test the reasonableness of a rate, the
same was found TO be unfair and unjust,
still made it possible to claim the rates Of
the commission TO be still concluSjUety
reasonable, fair and just. To provide a
seeming of investigation by judicial
machinery" the commission was required
to give the roads ten days notice of the
date when rates would be fixed.
A RATE-FIxING CONTEST.
The first 'sinvestigationu of this order
was held in July, 1891. after the ten days
notice. Most of the railroad companies
in Texas appeared at the hearing, but no
proposed changes were submitted. as the
commission ''had just begun the investi-
CATION of the classification and rates of
said roads in the State, and had not de-
termined upon any classification or
rates."
A CHAUTAUQUA CLASS.
''This assize has been described by
one who was present as sort of general
experience meeting, and by another as
kind OF Chautauoua class, where free
lectures on the general subject Of rail-
way freights, classification and rates
were invited from all comers, which
could result in nothing, unless a Babel.
with its confusion OF tongues. And the
commission have said that 'the said con-
ference. beginning on July 6, 1891, lasted
for several days, and all freight rates in
Texas were discussed and considered"
Following this, and without further hear
ing or the investigation as to any par
ticular rates or charges, they proceeded
put them in force.
THE COURTS ON THE TEXAS ACT.
The mortgage trustees of some unprofit-
able railways thereupon brought suit in
United States Circuit Court to enjoin the
commission from putting its tariffs into
effect. The court promptly held that the
so-called investigators by the commits
sion was farcicai, not had under due
process of law,o and was not an investi-
CATION by judicial machinery. As to the
conclusiveness of the rates of the COM
mission touching fairness and reasonable
ness, the court held to the principles laid
uOMA III tue MlHu6SUtH cdS0-tudt LHe
question of reasonableness is one for
judicial investigation under due process
OF law, but the Texas Act forbids such
procedure and inquiry, and that the
effort OF the Act to compel the roads to
submit to any rate the commission might
fix upon, was vicious and invalid. The
commission was therefore restrained
from issuing further tariffs of rates and
from pursuing the roads, etc. This case
is now on appeal to the Supreme Court of
the United States. There is no doubt but
that the Judgment will be affirmed, for it
is based on fundamental Justice The
court, referring to the authority for it's
opinion, safes: