St. Paul daily globe., 1895-07-04
JUDGE KERR HEARING ARCH.
MENTS OF COUNSEL ON
APPEAL
Of THE GREAT NORTHERN.
ATTORNEY CLAPP MAKES A
STRONG ARGUMENT FOR
THE STATE.
TOO MUCH wATERED STOCK
Seeking Dividends, According to
His Idea of ThinGs-Attorney
Growers Reply.

SooSe hSfF was engaged all day
yesterday listening to arguments in
the Great Northern grain rate case.
ana when court adjourned in the
evening it seemed as if it would take
at least another whole day and pos
s1bly two to complete them. The ar
guments will be resumed tomorrow
morning.
When court opened in the morning,
Judge Kerr had, something to say
with reference to the question as to
whether the court is to fix the rates
in the event of their being found
unjust and unreasonable. He said
he had examined a great many au-
thorities on that point, including
cases from most of the states and
the supreme court of the United
States, but in none of these could he
lind any precedent for a judge eXer-
cising a legislative function by set
ting tariff rate such as might
be required in this case In some of
the cases the issue had been made on
that point direct, while in others it
came in by inference. Continuing,
the court remarked that it had been
contended that the supreme court of
this state had determined that a
judge before whom such a proceed
ing was had might fix the rate, and
that the act of the legislature MAX
ing this the duty of the judge was
not unconstitutional. Judge Kerr
thought that if this were true, he
would be compelled to follow the
decision of the supreme court of his
own state rather than the decisions
that were all the other way.
Attorney Clapp then began his ar
gument on behalf of the railroad
commission. He said the commission
is composed of men who have devot-
ed a good deal of thought to the
questions that come before them and
are peculiarly adapted to deal with
them. Referring to the considera-
tion of the question of stocks, bonds
and dividends, Mr.. Clapp, replying
to an interruption by Attorney
Grover, counsel for the Great North
ern, retorted:
''The Great Northern stock is not
entitled to cent. They paid moth
ing for it.
IT IS A DIVIDEND"
Continuing, the counsel said it was
impossible to ascertain the original
cost of the SCI miles of road pur-
chased by the Manitoba company
from the old ST. Paul & Pacific, but
it probably did not exceed 100000 900.
Yet the company issued $4,000, 900
worth of bonds and $15,000,0 900 worth
of stock on the property Taking
the estimate of Col Crooks, $16,OOO,-,
900 as the original cost, and there
was an over-capitaliZation of $13, ,000,-
coo still. Up to 1890 the company had
paid from to per cent dividend on
it's SIS, 100000 stock. In ten years the
road has divided $4,000, 900 in profits,
besides accommodating $40, ,000 900 worth
of additional property. When the
property was transferred to the Great
Northern from the Manitoba COM
pany, an additional issue of $20,000,-
900 stock was authorized, to which
the stockholders of the latter COM
pany were allowed to purchase at
so cents on the dollar. The Great
Northern might go on issuing ad-
ditional stock in this manner and de-
mand return on that stock with
out the investment of a single dol
lar additional in the property.
1t was o'clock before Mr.. Clapp had
finished his argument and Attorney
Grover opened for the railroads. Mr..
to-.
of reducing the rates from Crookston,
Grand Forks and Fisher were at issue
the company would not waste breath
fighting over it. But it meant a great
deal more than this-it meant a re-
ducion in rates on the entire system
more yet it meant reduction in rates
on every road in the state carrying
grain, for the law of competition would
force it. The matter did not even rest
| here for other kinds of freight were
just as much entitled to lower rates
as grain, and reductions would be in
sisted upon for every kind of traffic.
''Since Mr.. Hill has taken hold of the
old st. Paul & Pacific line he has added,
at the rate of one mile of road per
working day to the system down to the,
present time declared Mr.. Grover.
81 am
STANDING IN A TRIANGLE,
as it were. At one corner is the in
vestor, at another the laborer and at
the third the shipper, and all three are
engaged in a squabble for what they
claim to be their rights
Mr. Grover contended that rates
should be sufficient to yield fair re-
turn on the present value of the prop
erty. He admitted that the Manitoba
company issued a large amount of
bonds and stock, but testimony had
been submitted to prove that they were
worth only 45 cents On the dollar at the
time and it took a large amount of
them to yield the necessary cash. The