The Saint Paul globe., 1897-05-20
GENERAL COUNSEL GROVER
STATES THE POSITION OF THE
RAILROADS.
FIGURES SHOWING THE RESULT
If the Arbitrary Reductions Ordered
Go Into ERect-Nice Fight May
Be Witnessed.

to restrain the North Dakota rallroaA
commissioners from publishing and
placing in effect a set Of new distance
tariffs. AS stated in yesterdays tele-
grams a temporary restraining order
/ was made, and thus was commenced
what is likely to become one Of the
most interesting bits Of railroad litiga-
tion in the Northwest. 1t will test
the power of state legislatures to make
and fix maximum passenger and freight
rates. Mr.. Grover was asked by re-
porter for the G l b to state the po-
sition Of the railroad companies in the
premises. Mr.. Grover replied:
''The board of railroad commissioners
of North Dakota, on the 28th day OF
April, 1897, made an order fixing max
imum freight and passenger rates for
the state Of North Dakota. By this
order passenger rates are reduced from
four to three cents per mile and freight
rates on local distance tariff on an
average Of % per cent. The commits
sioners, by their order, fixed the time
when the rates made by them should
take effect, the time named being July
/, next. Before the rates become oper-
ative, the commissioners are required,
by law, to publish a notice in one public
newspaper published in each judicial
district of the state, setting forth that
they have made an order fixing such
rates and when it will take effect. The
publication was commenced in the
week Of May 10, and was to be con-
tinued during the present week. On
Tuesday, the 18th inst, the Northern
Northern Railway company, and the
Chicago, Milwaukee & St. Paul Rail-
way company each commenced a suit in
the circuit court of the United States
for the district of North Dakota, max
ing the commissioners and the publish
ers Of the newspapers parties de-
fendant, and praying for an order re-
straining the publication Of such notice.
The application was made before Judge
Amidon, at Fargo, upon verified bill
An order was granted requiring de-
PENDANTS to show cause, on Tuesday,
the 25th inst, at Fargo, why a tempo
rary injunction should not issue, pend
ing the litigation and until the further
order of the court, and in the mean
time the publication of the rates was
restrained. On the 25th inst, the ques-
ton of the temporary injunction will be
passed upon and, if granted, the de-
PENDANTS will answer and the case will
be tried by proceedings usual in equity
cases.
''The complaints fled by the respect
i've companies are, in many respects,
alike. The Great Northern canlplaint
states the mileage operated BY the
Great Northern Railway company at
$40 miles, 1,064 miles Of which is in
North Dakota. The bill alleges that
the Ene was judiciously Ioacted and and
that it was economically constructed
and has been and Is being economically
operated; that the 1,064 miles of road in
North Dakota, with terminal grounds,
&c, cost over $23,O00,00O. The bonds
and stock outstanding on account of
f1,Q Ont irn
time amount to $103, $4,000. Of this
amount 100000 is stock, the balance
being bonds bearing interest at an
average rate Of only Ais per cent
THE commissioners before making
their order fixing maximum rates, noti-
fed the companies that they regarded
theAexisting rates as unreasonable and
unjust and proposed to reduce them.
The companies were called upon, not to
consider the reasOnableness of their
ra rs, but for the purpose of suggesting
a reasonable reduction, which they de-
clined to do contending that their rates
were reasonable and just. The average
reduction Of freight rates is over % per
cent
"The totals freight earnings of the
Great Northern Railway company for
the year 1894 were Sill, 900. Under the
proposed reduction such earnings
would have been but $4,000. For 1856
tuV lOCdl SdI IlliSS, lOCdl TO NOrtn DG,-
kota, were $4,000; under the pro-
posed reduction would have been but
$109000
Applying the same basis of reduc-
ton to rates in all other states, and
to interstate traffic the company
| would not have earned enough to pay
the operating expenses and it's interest
| on its bonds at 415 per cent. 1t
could not have met it's obligations. and
| the bill alleges that the enforcement
| of such rates would deprive it of it's
| property without due process of law,
contrary to the provisions of the con-
stitution of the United States.
The total earnings in North Dakota,
freight and passenger. for many years
have been insufficient to pay operating,
! expenses and taxes. In the year 1894
| there woulds have been deficit of over
! $4,000. In 1895 had the proposed re-
! dGction been in force there would have
| been deficit Of $2S,000. The company
| would not have earned enough to pay
| operating expenses and taxes within
| that amount In other words, it would
not have received anything to- pay on
account Of it's Indebtedness or on the
bonds issued to construct the line in
the state.
1.-The total cost of maintenance Of
way and structures for various years
has averaged from $685., 900 to $500, ,OCO
per year, maintenance OF equipment
from $4,000 to 1857 900; conducting
transportation. from S666, 900 to 1921 ,OO0
The total earnings in North Dakota,
both freight and passenger, have not
been sufficient to pay the operating
expenses incident to handling the busi-
ness, and the bill shows that in no
year have they been sufficient to pay
over one-ffth of such cost on account
of all traffic in the state, and that
at least one-third Of such cost is prop
erly chargeable against such traffic
owing to the limited volume of busi-
ness and the conditions attending it.
Passenger rates at cents per mile
would not pay the cost of con-
Quoting the local passenger business.
and should Communication and excursion
rates be given, as in other states,
would not pay over two and one-half
cents per passenger per mile, which
is less than the cost of transacting the
| business"
The following, cu11ed from COM
parative statement Of the present
Great Northern mileage tariff and the
proposed distance tariff, will give an
idea of the proposed sweeping reduc-
tions by the North Dakota commits
sion:
| Present Proposed P. c.
Distance Rate. Rate. Reduction
so miles ............13.8 8.5 49,
l. 30 miles 175 105 40