The times. [volume] (Washington [D.C.]) 1897-1901, 1898-03-08
THE NEBRASKA RATE CASE
Decided by the Supreme Court
in Favor Of the Railroads.
NO DISSENTING OPINION
The Cause Grew Out of an Effort on
the States Part to Fix Charges
Mr.. Justice Harlan Reads the
Decision-A Common Carriers
Rights.

The long pending Nebraska maximum
freight rate case was decided yesterday
by the Supreme Court in favor of the
railroads, the decision being the unani-
nous voice of the bench. Chief Justice
Fuller did not vote in the decision of the
case and Justice McKenna, not having
took no part. The opinion was read by
Justice Harlan.
The case came to the Supreme Court
from the Court of Appeals for the
eighth circuit, where a decree was rem
dered in favor of the railroads by JUS
tice Brewer on the bench with the circuit
judges That decree was affirmed by yes
terdays action.
The litigation grew out of the law
passed by the legislature of Nebraska
in 1893, authorizing the State Board of
Transportation to establish maximum
rates to be charged by the railroads for
the transportation of local freight traf-
fic. w hen their schedule appeared the
Union Pacific, the Chicago, Burlington
and Quincy. and the Chicago and North
western companies sued out writs of
injunction restraining the board from
putting it into effect. The injunction
was granted by the Circnit Court and
the judgment affirmed by the Court of
Appeals. The State officials then brought
the case here. 1t was twice argued; the
last time in May. 1897, when William
Jennings Bryan appeared for the State
and James c. Carter for the railroads.
The opinion of the court discusses sew
eral questions, and disposes of them:
First. the remedy of the railroads was
at equity and not at law.
Second. a suit against State officials to
prevent the enforcement of Il State law
on the ground that it is repugnant to the
Federal Constitution is not suit against
the State within the meaning of that
term as used in the Constitution.
Third, the contention that n State has
no right or power to fix the rates to be
charged for the transportation of local
traffic on the Union Pacific for the reason
that Congress reserved that power to it
self in the company's charter is not well
founded. Congress has never passed any
law to carry such a contention into eff
feet.
Fourth, railroad corporation is per-
son within the meaning of the fourteenth
amendment to the Constitution, which
prohibits State from depriving a person
of his property without due process of
law
Under the head of the constitutionality
of the law, the opinion held that the en-
actment by a State OF legislation or Of
regulation under that legislation, estab-
fishing such rates as will not enable car
riers to earn enough to pay the expenses
of operation and a fair return upon the
investment is repugnant to the four
teenth amendment; that the question
whether The rates prescribed are so low
as to deprive the carrier of these rights
Se
the legislature is not the final authority to
determine what is right and lawful in
these methods, that being the province of
the judiciary, whose duty it is TO say
what legislation, either State or Federal
is repugnant to the supreme law of the
land.
AS to the merits of the case at bar, the
opinion stated that the evidence. in the
record as to the operation of the law
showed that if it had been offered to the
business of the roads for the years 1890
81 and 80. the three years preceding its
enactment. the receipts of the roads
would have been reduced % i-2 per cent,
depriving them of the compensation to
which they were entitled for transa citing
the business and operating their lines,
and with one exception reducing the
earnings of the roads below operating
expenses, and in that one exception the
excess would have been so slight as TO
cut no practical figure in the general re-
suit
Upon the record and argument, Justice
Harlan said the court found no reason for
reversing the judgment of the Court of
Appeals but he directed attention to that
part of the decree enjoining the State
from putting into effect the schedule of
rates complained of, which authorized the
State officials TO make rates that would
afford proper and reasonable compensa-
ton TO the carriers. saving that if under
present conditions of business it could be
demonstrated that the rates would afford
the companies this compensation, they
could be enforced upon proper proceed
ings to be instituted by the State.
The opinion discussed at some length
the relations of common carriers to the
public, and their respective rights We're
set forth. The companies, the court said.
could not operate their roads for their
own benefit exclusively nor mainly: pri-
marily they must be operated for the ben
eft of the public. Nor could rates be
charged that would yield profits upon ex-
cessive capitalization. On the other hand
TO charge rates that would not return TO
them a reasonable interest on the in
vestment. based upon proper estimate
of cost and value. 1t was conceded,
however. that the determination of these
questions would always be more or less
embarrassing.
The result of the decision is TO knock
out the schedule of rates sought to be es-
/ tablished in 1893, leaving the State at lib
erty to make another effort, bringing the
schedule under existing conditions to a
point where the companies can earn eX-
penses and a reasonable dividend.