The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1898-03-29
A NEW LIGHT.

The Chicago Record has been review
ing the recent decision of the supreme
court in the Nebraska maximum rate
case and has reached the conclusion
that well nigh puts an end to at
tempts to regulate railroad charges, in
the west, at least. The Record says:
When the decision of the federal su-
preme court in the famous Nebraska
maximum freight rate case was handed
down, the summary of it given to
the press dispatches from Washington
indicated that the opinion merely reaf-
firmed principles enunciated in former
decisions of the court A peruSal of the
text of the opinion, however, shows it
to contain features that are new and of
far-rea ching Importance, especially to
the western states. Theoretically, the
decision gives to states the right to
regulate rates within their borders. In
practical operation, the ruling of the
court is likely to make state control of
transportation rates, in the west, at
least, impossible of realization.
In the Nebraska case the supreme
court held that the state had the power
to lower rates, provided the charges fix
ed We're reasOna BILE and did not amount
to conhscation. The rate fixed by the
Nebraska legislature was held to be I'M
reasonable, and therefore void. So far
the court was simply following in the
line of its own former decisions. But in
the Nebraska case, for the first time
the sup enc court undertook to define
with much precision the method of pro-
cedure for determining whether or not
rates fixed by state authority are rea-
sonable. In so doing it laid down the
principle that a state, in reducing rates,
must concern itself with local traffic
only. The road must be permitted to
make a fair profit upon business begin
ming and ending in the state, without
regard to the profit made upon the
whole volume of business done within
the state. The contention of counsel
for the state has been that the reason
ableness of the rates established by the
Nebraska statute is not to be determ-
tned by the inquiry whether such rates
would leave a reasonable net profit
from the local business affected thereby
but that the courts should take into
consideration. among other things, the
whole business of the cOmpany-that is,
all its business, passenger and freight,
interstate and domestic To this the
court replied:
IF We do not misapprehend counsel,
their argument leads to the conclusion
that the state of Nebraska could legal
~ require local freight business to be
conducted even at an actual loss. if the
company earned on its interstate bust
ness enough to give it just compensa-
ton in respect of its entire line and all
its business, interstate and domestic.
We cannot concur in this view. In our
judgment 1t must be held that the rea-
SOnableneSS or unreaSOnableneSS of
rates prescribed by a state for the
transportation of persons and property
wholly within its limits must be deter
mined without reference to the inter
state business done by the carrier. or
the profits derived from it. The state
can not justify unreasOnably low rates
for domestic transportation, considered
alone, upon the ground that the carrier
Is earning large profits on its interstate
business, over which, so far as rates are
concerned, the state has no control Nor
can the carrier justify unreasonablv
high rates on domestic business upon
the ground that it viii be able only in
that way to meet losses on its inter-
state business. So far as rates of
transportation are concerned. domestic
business should not be made to bear
the losses on interstate business, nor