The record-union., 1896-12-01
But All Reductions Must be Reason
ably Made
And in Conformity With the Earning
Capacity of the Roads i'm Question
Circuit Judge r1ckenna'S Decision
in the Case of the Southern Pacific
Company Versus the State Rail-
road Commission Relative to the
Lowering of Grain Rates.

SAN FRANCISCO, Nov. 30.-To-da
in the United States Circuit Court,
Judge McKenna rendered his decision
in the case of the Southern Pacific Com
pany versus the Railroad Commission
erS.
The proceedings out of which results
the present decision originated, as may
be remembered, in the action taken by
the members of the Board of Railway
Commissioners early last year in
the direction of a general and radical
reduction in the existing rates charged
by the railroad company for the trans
portation of grain. This proposition
was carried, SO far as the passage of
resolutions could accomplish the in
tended result, through the concurrence
of Commissioners La Rue and Stanton
Commissioner Clark opposing it, but
being, of course, outvoted by his two
colleagues. These gentlemen. Messrs. La
Rue and Stanton, did not altogether
agree between themselves in yhat they
proposed to do, Mr.. La Rue favoring a
much more radical cut than did DR..
Stanton. The former moved to make a
10 per cent. reduction all around, but to
this Stanton would not agree, suggest
ing per cent, to which figure Chair
man La Rue came down, on finding
that his colleague could not be induced
to agree 20 anything higher
This cut, however, both agreed in
considering as of a somewhat tempo
rary character, designed to go into ef-
feet and to hold good during the hold
ing of some further investigations, the
understood purpose of which was to be
the final making of an average reduc-
tion Of % per cent, to which the Dem
ocratic platform adopted at the time
Messrs. La Rue and Stanton We're
elected had pledged the candidates of
the party.
After the adoption of the resolution
providing for the lowered rates a brief
period was allowed the railroad nan
ayers to put them into effect, but before
its expiration the company took meas
ures to test in the courts the right of
the commissioners to take the action in
question.
This was done by an application to
Circuit Judge McKenna for a tempo
rary writ of injunction restraining the
board from interfering with the freight
oNCS, a lul tilEI tt4utSt DtiiiS lildGe Atid
the commissioners be cited to show
cause why such temporary injunction
should not be made perpetual. Among
the grounds upon which the application
was based was the statement that
Messrs. La Rue and Stanton having at
the time of their election subscribed to
"A pledge to cut rates % per cent, had
thereby disqualified themselves from
taking any action at all by violating
the law which provided that rates
should not be altered except after full
investigation made after a prescribed
form. Messrs. Stanton and La Rue de-
MED in their answer having taken the
pledge referred to, and many other in
teresting points were raised in this
document and during the lengthy pro-
ceedines which subsequently followed
before Judge McKenna.
Judge McKennas courtroom was
crowded this morning by interested
spectators. all anxiously awaiting the
long-expected decision.
His honor arrived at an early hour
and promptly al II o'clock took his
seat. Before him sat Clerk Beasley at
his inclosed desk. while in the body OF
the room, occupying the front chairs.
was the army of attorneys who had
represented the contestants in the llti-
cation. Governor James H Budd was
also an Interested spectator, occupying
a seat a the side of Judge McKenna.
Before the dais sat Attorney General
Fitzgerald. while United States District
Attorney Henry S. Foote sat at ia
bic almost diagonally opposite the Cow
Hart-ir nf
ern Pacific Company was not present
Judge McKenna read from a care
fully prepared manuscript, his voice be-
ing clear and distinct. He reviewed
very fully the entire history OF the Mti-
cation. and paid high compliments 10
the counsel on both sides, also giving
interesting data relative to the extent
of the argument.
He stated the law permitting the for
nation of the Railroad Commission
and the rules for it's guidance, and
quoting Justice Brewer. declared that
primarily. 1t was within the power OF
the Circuit Court to merely inquire as
TO the Justice of any acts committed by
the commissioners. No court had the
power to make a schedule; no court had
the power to raise or to lower rate.
The inquiry is limited to the effect OF
the action as as a whole.
Judge MeKenna then quoted in ful
the resolution adopted by the Board OF
Railway Commissioners, in which II
was stated that the rates of the Southern
Pacific in force on September II. 1880
We're unjust and a burden upon the
shippers and that a. reduction must be
made.
His honor declared that the Language
OF the resolution gave evidence oi
knowledge on the part of the Commis
sioners. But he recalled the facf that
Mr.. La Rue had testified that the Com
n1issioaers had not at the time OF the
adoption fully decided to enforce their
resolution without full investigation
and at no time had intended TO work
any hardship upon the railroad COM
pany. Judge Mckenna held that any
contention to The contrary was thus
untenable.
Continuing, his honor declared that
no power not vested in the commission
rs to the assumption Of the validity OF