The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1896-12-01
THE MEMBERS OF THE RAILROAD COMMISSION

have the grain rates considered separate from
the % per cent resolution; that there must be
a showing as to each, not as 10 both indistin-
guishably.
3. Even if joined, the showing not sufficient.
a. This is claimed to be established by au-
thority. I do not think SO. 1t seems to have
been decided in the Dey case, Thirty-ffth
Federal. But the same learned Judge who
expressed that view in the Dey case retracted
it i'll the Ames case Sxty-fourth Federal, and
it has received no judicial sanction since.
When the power of judicial review was
serted and entertained the fourteenth amend
ment to the constitution was bound to be
firmly and accurately applied. There could
be no middle ground. Middle ground would
satisfy neither legislative prerogative nor
judicial prerogative. Certainly not the ju-
dicial prerogative That must apply justice
as it is understood OF men, and in It's clear
light it was inevitable that it would come to
be seen that the fourteenth amendment of the
consti tuition would be composition of delu-
sive words if it forbid only the taking of the
physical property while it permitted the
taking of its value-if its guarantees OF the
laws equal protection to ii persons would be
satisfied as to railroads by leaving them a
microscopical profit. If so, the pool of Tanta-
lus would lose It's force to illustrate excited
dIlu disappointed e8peCtdllOu WHeu COIL PdItQ
with the organic law of thisgreat land.
We should keep In mind that the regulation
of railroad affects, in reality, the natural
persons who own it, not the insensible legal
artifciality and a distraction called a corpora
tion For the natural persons the protection
of the constitution is in tended, and would any
one say that justice is done them If their in
vestment be allowed only an infnitesimal
fraction of per cent while all other invest
ments are expected to return at least legal in
terest, with freedom besides OF unlimited ad-
vantage?
(2) The respondents are entitled to have
the grain rates considered separa tely from the
% per cent reduction on other freights, but
the showing may be good for either, and hence
need not distinguish.
It would seem, also, if this were so, that the
respondents might show and should show it
against the statement OF the complain
ant that the rates are not discrimina-
tive but another answer is that such
q showing would be too extensive for
preliminary inquiry and absolutely intractable
by affidavit. Another answer is that the action
Of the board negatives the fact upon which it
is based. 1t does not seem conceivable, if that
fact be true, that the Board of Railroad Com
missioners would have passed a resolution
which by its horizontal applica ton preserved,
and may be intensified, whatever discrimina-
ton existed between the grain rates and other
rates.
(3) The Acknowledgement says that he eau
demonstrate beyond the possibility of plaus-
ible explanation that complainant has failed
to make such showing as would entitle 1t to
the relief prayed for, even if the per cent
and 25 per cent red uctions could, under any
circumstances, be considered jointly On the
other hand, Mr.. Herrin says shat the COM
plainant is not asking for single dollar OF
dividend, because existing rates and business
are not sufficient to pay dividends. 1t only
seeks revenue enough to pay interest on
bonds to pay operating expenses and to pay
taxes. Present rates, under the experience of
1894, were insufficient for such payment.
The elements of the controversy will be
stated as we proceed. 1t may, however, be
promised here that Justice Brewer said in
the Dey case. Compensation implies three
things-payment of the cost of service, interest
on bonds and then some dividend" Adequate
dividend, subsequent cases say. These, then,
are the factors of compensation to be APP
piled.
Matter of Figures.
Compartments bill, after a somewhat de-
tailed statement OF the amounts payable by
complainant under the leases 70 it, gives a
summary of the receipts and expenditures,
which shows:
A deficiency on the Pacific system
for the year of 1894 Of ............. $276,2e2 70
For 1895. 1,476l7 SO
In the amendment to the bill there
is exhibit of the receipts and ex-
penditures of the California roads
Of the system showing surplus
for 1894 Observation-Disclosures. 434.4e7 05
For 1895 lending June 30) deficit of 863 691 20
The Attorney General claims that this show
Ing is incorrect for three reasons:
III Because there is included def
cit of the Oregon and California
road in the sum of.................. $641 1856 II
~ Because there are included in ex-
penditures on the various roads for
improvements and betterments the
sum Off,. ACKNOWLEDGEMENTS. e54,s28 81
(3) Because there is Includ ed IN ex-
penditures as operating expenses
the rent paid to the California Pa
cfc road in the OF. ........ 100000 90
If the last (3) be good 1t is conceded
that the deficit the Pacific sys-
tenn, including the other objected
items, viii amount to............... 24,131 20
II not good the deficit will amountto Sd COS 65
For the time being win assumeJthis objec-
ton to be good and will consider the other
objections.
Is the deficit of the Oregon and California
road proper expenditure of complainant?
The second ground of objection, that is
that to improvements and betterments there,
Will have TO be considered-frst. the abstract
legality of such a charge, and, second, the
competency of it under the leases.
The abstract legality of such a charge 10
established by the Reagan case.
Improper Expense Charges.
The competency of the charge under the
leases depends, of course, upon their provi-
sions. 1t is provided in the lease from the
Oregon and California Railroad Company
that the complainant shall pay out of the
earnings and income "the expenses of repair
ing, maintaining. improving, adding to and
keeping up the said leased railroads, with
their appurtenances." Constituting this pro.
vision by the light of the Reagan case and
other cases supra, the expenditures made are
properly chargeable against the income.
In reference to repairs and betterments
on the Central Pacific Railroad the court
held:
If the railroad was added to or bettered il
was to be out of the income to which, the Gen.
trail Pacific Company was entitled and which
would, If not so expended, be paid 20 it. 1t is
true that the lease provides for the contin-
gency of the payment of such expense by the
Southern Pacific Company, but it also provides
for its repayment so that it is not in any case
deduction from its revenue Hence it fol-
lows that the item of $11I, 1856 IL for better
ments and additions to the Central Pacific