The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1898-01-04
SOME LATE DECISIONS OF IMPORTANCE,

s;nca the United States Supreme
eourt in the Granger" cases, as they
,vora called. re-affirmed the long settled
5ootr;na that the public have the right,
through the Legislature Tor boards ana
commissions authorized by it, to regu-
tata the charges of all business "ahected
with a public USE" there have been some
decisions that while this is true, II the
Legislature rates are fixed so low that
no nroft whatever is allowed, the courts
will interfere These decisions nave
heen exaggerated and misrepresented by
railroad lawyers and journals as grad
nal backing down of the courts from the
nos;tion taken in the Granger cases.
Nothing is farther from the truth. III
tbe right TO fix the tariff on foreign in
tercourse was unreservedly turned over
TO the corporations it would not be one
tenth as destructive to the public welfare
as a decision turning over the right to
fix the tariff on local and Interstate
traffic to the railroads without any reg
ulation and supervision from the public.
Our attention has been called to the
three latest decisions on this important
subject. They show no drawing back
Of the courts from the uniform rulings
on this subject.
In the very latest decision Of the
United States Supreme Court, Covington
Is. Sanford 1874 U. S., filed just year
ago IA December, 1866, the court holds
ssthat when the question arises whether
the Legislature has exceeded its consti-
tutional power in prescribing rates to be
charged by a corporation controlling
public highway, stockholders are not
the only persons whose rights or in
terests are to be considered" and adds:
eve could not say that an act is uncon-
stitutional merely because the company
can not earn more than per cent. on
It's capitaI stock" The opinion further
says: "It can not be said that a corpora
ton is entitled to cam any given per
cent on its capital stock. Inc
public can not properly be subjected to
unreasonable rates in order simply that
stockholders may earn dividends" This
decision also significantly says: "Rates
on one road may be reasonable and just
to all concerned, while the same rates
would be exorbitant on another road
and holds that the circumstances OF each
road must determine the rates to be
properly allowed. The opening of the
court IS unanimous and is written by
Judge Harlan The plaintiff was a
turnpike company, but the opinion says
it applies to it the same rules of law as
are applicable to the regulation of rail-
road charges by the public.
Another recent decision on the subject
is "Steenerson VS.. Railroad" fled by
the Supreme court of Minnesota, 20 Oc-
! tober, 1897, and is an exhaustive opin-
ion by very able court, reviewing the
whole subject. 1t is there held by a
unanimous bench, that the fixing Of
rates is a Legislative or administrative
act, not a judicial one, and the courts
can not place themselves in the shoes
of the Railroad Commission and try de
novo the question what are reasonable
rates, but the court can only intervene
il it appear that the rates are fixed so
low that it amounts to confiscation Of
the property, by protecting the earning
of any return thereon. In passing on
that question the court says the test is
not whether the rates are high enough
TO nav interest on fixed charges since
that would be probably just to the pub
lie. because most railroad corporations
are bonded and stocked far above their
value. Nor is the test at what sum the
road was bought in a foreclosure sale
nor yet what was the original cost OF
building the road, but the true and JUS
test is what would it cost to rebuild tn'
road today. On that sum the corpora
ton IS entitled to earn a reasonable IN
terest which considering the fall IN M
rates Of interest the court fixed 2s2 pc
cent per year on portions Of the properE
and 5 per cent. on other portions. w
have not space to copy here the process
of reasoning by which the court arrive