The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1899-06-09
CORPORATE AGGREssIoNs CHECKED

I N The Call of May 26 1900 attention was directed
| to the decision OF the Supreme Court OF the United
States in the case of the San Diego Land and
Town Company National City and others IN
which decree of Judge Ross in the Circuit Court OF
the United States Los Angeles had been afhrmed'
Ii was then pointed out that both IN the lower
and in the higher courts the rights OF municipalities
as against corporations that furnished water or
other public utilities had been renchanty enforced
and that the rule established by the decision covered
the pretension Of the railroad in the gram rate case
TO the effect that practically the Federal tribunal
would usurp the functions OF the Railroad Commits
sion and determine what reasonable and Just frelght
and passenger charges ought to be.
Feeling the pinching effect OF the latest expression
from the highest source on this important question:
railroad organs have industriousy sought to msrep
resent the opinion written by Mr.. Justice Harlan in
the case to which we have REFERRED as IN other re-
specs they have dishonesty endeavored to attribute
tc Judge Morrow opinions which, il he entertains
them, he has never expressed 1t is "a common rail-
road trick pretend that in respect the law has
been declared in conformity with its aggressive at
tacks upon the public to minimize the influence OF
hostile ruling by assuming that is merely the ex-
preston OF some doctrine from which there has been
no dissent. For example, the railroad would
concede abstract proposition, that the limit OF
Judicial interference with rates established by State
authority is to ascertain whether they are reasonable
and Just. But, in the practical application OF the
proposition its constant effort for years has been to
induce the Federal to hold and to assume that
they had held not that they would look into record
merely to see whether Railroad Commission had
exercised some intelligent discretion and had not
bitrarily formulated rates that obviously Unfair
but that in the performance OF this duty they would
virtually base their conclusions upon their udg-
ment of the facts.
The full text OF the opinion OF the Supreme Court
OF the United States is drastic than the tee-
graphic synopsis had indicated. 1t is unusually full,
concise and explicit 1t reviews and clarifies former de-
csons in respect to freghts and fares that had been
msinterpreted and citing the OF Spring Valley
Water Works vs.. San Francisco (S2 California
Reports, 286-3I5), holds that State constltu-
ton or State law which requires the exercise
Of discretion and judgment in fixing railroad
rates can be impugned as violating the Federal
stitution and that before action OF this character
be successfully assaled in the language OF our own
Supreme Court: There must be actual fraud in fix
ing the rates or they must be so papaby and grossly
unreasonable and unjust to amount to the same
thing In other words, whether the judgment OF
board in establishing Tor corporations exercis
ing franchises derived from the public be regarded
judicial, legislative administrative, or mixture
OF the three classes OF powers, 1t only be ques
toned when its effect is conhscation Judicial inter
ference should occur unless the case presents
clearly and beyond all doubt, such fragrant attack
upon the rights OF property under the guise OF regu
ations as to compel the say that the
prescribed will necessarily have the effect to deny
Just compensation for private property taken for the
public use" And, in words that exceptionally
pertinent and important in this State and in this
municipality the court adds But the rights OF the
public would be ignored rates for the transportation
OF persons property railroad are eXacted with
out reference to the FAIR value OF the property
used for the public or the FAIR value OF the
vices rendered but in order simply the corporation
may meet operating expenses, pay the interest its
obligations and declare dividend to stockholders.
IF A RAILROAD CORPORATION HAS
BONDED ITS PROPERTY FOR AN AMOUNT
THAT EXCEEDS ITS FAIR VALUE, OR IF ITS
CAPITALIZATION IS LARGELY FICTITIOUS,
IT MAY NOT IMPOSE UPON THE PUBLIC
THE BURDEN OF SUCH INCREASED RATES
AS MAY BE REQUIRED FOR THE PURPOSE
OF REALIZING PROFITS UPON SUCH EX-
CESSIVE VALUATION OR FICTITIOUS CAP
ITALIZATION." These propositions
phaszed and summarized in the declarations: "What
the company is entitled to demand in order that it
have just compensation is FAIR return upon
the reasonable VdIue OF tEe property Al LIE LIME
IT IS BEING USED FOR THE PUBLIC"
These extracts sustained by the most irrefragable
argument and by numerous authorities, practically
settle the main issues between the railroad and the
State and between the municipality and the water and
gas monopolies II the temporarily suppressed ques
tons in the grain rate revived, they
questionaby will be when Railroad Commissioners
Blackstock and Laumeiser are superseded by repre-
sentatves OF the people, Mr.. Huntington will ascer-
tain that his grip upon productive industry has been
relaxed
MNu EDOM DnDTO DICO