The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1898-04-21


| both domestic and Interstate commerce
| is entitled to earn in respect to tn,
whole of it's business, q reasonable per
centage of profit must not that per
centage of profit be apporE0ned, so tina
certain part of it shall be considered
rs derived from domestic. and the bal
ance from Interstate business? Their
| the question arises, by what rule, OF
upon what bus;s, shall this appOrtion
ment be nader
Suppose that one third the volume oil
railroad companys freight and pas
senger business is domestic, and two
thirds foreign or Interstate? That !;
sum equal to six per cent upon the
entire property of the company is fail
percentage of profit for it to receive
from its entire operations, and that OF
this, two per cent is made domestic, and
four per cent from foreign business. Ii
the company is entitled to receive sis
per cent upon the value of its entire
property, on account of domestic bust
ness on the same value, it will receive
twelve per cent in the aggregate, which
is excessive. If it is receiving twelve
per cent on the whole of its business,
one third of which is derived from do
mestic traffic, there is nothing in the
Nebraska decision to prevent the State
from reducing the fares or freights or
both, to such Il rate as will enable the
company to make but two per cent on
the total value of its property, out of its
domestic business, or, what is equivalent
thereto, six per cent on one third of
such total value. If the volume of do
meSt.c BUSINESS is one-fourth of TIL,
whole, then tie company would be per-
mitted to earn 4 profit on such business,
of six per cent on one-fourth of the
total value of its property in North
Carolina, or one and one-half per cent
on the total value thereof The rail
roads were built to be used in both
domestic and Interstate business, and it
is but just that with respect to each
class of business, they shall be permit
ted to earn a fair profit upon the pro-
portion of their investment, which may
be deemed appropriated to THAT class of
business, the total profit being limiteS
to a just per centum of the total in
vestment. And such proportion of the
investment of its capital or of the value
of its property, Is to be deemed appro-
priated to domestic business, as the
volume of such business bears to the
whole business of the company. To
put it in another way: If a railroad
company is earning Il profit on all of its
business. of twelve per cent upon such
value, one-third of which is derived
from domestic, and two-thirds from
foreign business, and If six per cent il
deemed Il fair profit for the company
to be permitted to make on all of its
business, without question the railroad
commissioners would have the power to
reduce the domestic or local freights
or fares, one or both. to such q limit as
would permit the company to receiv.
but two per cent on the total value of
the property. inasmuch as two per cent
on the value of the property would, un"
der the circumstances, be considered as
a reasonable profit upon such business
Differently construed. the Nebraska
decision would absolutely destroy iii
every ease that most sanitary power
of the commissioner power to regp-
late the frcights and fares of railroad
companies for The protection of the
public. Construed in This manner. the
decision does not prevent the railroad
commissioners from reducing the fares
on all of the railroads in the State in
proper casces.
Moreover, it will be observed that the
Nebraska decision does not decide thar
a railroad must be permitted to take
certain percentage of profit out Of every
class of its domestic business, as, for
example. a reasonable percentage OF
profit out of its domestic passenger
business; reasonable percentage OF
profit out of its domestic express busi-
ness; a reasonable percentage of profit
out of its mail service; and a reasonable
of profit out of its domestic
freight business. 1T would be beyond
the power of court to interfere with
the internal management and adjust
ment of these several matters. 1t would
simply hold that from its domestic bus
ness of all kinds, in the aggregate, the
should not be prevented from
a reasonable compensation for
such service.
But whether these views are correct
or not. upon legal questions it is all
important to the people of North Caro-
lima that the courts should have an OPP
portunity to pass upon them. This
cannot be done until case is pre-
sented. But no case can be presented
until the railroad commission shall UNI
dertake III at least one or more in
stances. TO fix the fares or freights of
railroad company in the State. No
irreparable damage will be done to the
to be selected. because the
rates will not go into effect until the
courts shall have investigated and prop
erly decided all questions involved.
What railroads should be selected for
the test eases!
J. They should be situated entirely
within the State.
>. They should be located i'll the most
populous and productive counties Of the
State, enjoying the largest domestic or
local travel.
). They should be those having the
largest income in proportion to their
value.
The North Carolina railroad company
meets all of these requirements, and
presents u favorable subject for one OF
the test cases.
According to it's reports OF 1897, this
company, with an assessed valuation for
taxation of $3,117 ,2333, which the COM
pany claimed was excessive, received
gross earnings from operation for 1896
81, 1852, 217.93. Deduct operating eX-
penses, S1,14S, 1850. Income from
oupration amounted to S443, 445.34. De