The Houston daily post. [volume] (Houston, Tex.) 1886-1903, 1900-04-22


people act for themselves 10 their SOW
eregn capacity this blessing 10 them VIII
be too long delayed TO be enjoyed ny tne
tenth generation
1t Is perslstently commended now by the
representatives of the railway companies
throughout the United states and their
position Is strongly supported by hlgh
judicial authority. that the traffic rates
fixed by the legislature, or railway
commission, should be high enough 70 pay
| for the maintenance OF way, for operat-
ing expenses Interest on bonds AMI some
dividend to the stockholders. While THIS
rule has not become permanently hKed or
established, In my opinion, when IS con
CURED in by the best minds OF the country
who favor the system OF railway regula-
| ton, 1t will become the settled doctrlne
| by the supreme court OF. the United states
What threatens us now Will then become
an act Of conhscation through high trai.
iic taxes to pay fraudulent debts that Will
have matured into legal obligations.
Injunctions have been granted more
! than once through the Federal courts 10
restrain our railway commission, because
| the rates were alleged to be so low thaL
| they deprived the railway companies OF
the their property, without due process
of law, and that they denied to them the
equal protection of the law In violation
This specious but successful plea was
made by these same stockholders. and was
based upon the theory that the rates We're
mot high enough. after paying all the
expenses and interest on bonds, to leave
to themselves Il dividend on their waterea
stock When these ipjunctions were grant
ed as has been demonstrated, the commits
sion rate was amply sufficient to have
paid not operating expenses, but an excess
slveIru tur. AEON the value OF their prop
erty. Thus you will see that in our own
State the commission stands In constant
peril by the threat OF these injunctions
and are thus forced to maintain a higher
rate than is reasonable and fair.
In the last leading case OF Smyth VS..
Amos, 100 U. s.. the United States court
without dissent made the following deci'
sion:
I'VE hold that the basis Of all calcula-
tions as to the re@onableness OF rates &c
be charged by corporation, maintainipl
!, a highway under legislative sanction, mus
be fair value Of the property being USED
by II for the convenience OF the public
And in order TO ascertain that value tn
5 original cost OF construction, the amour
i expended in permanent improvements, th'
: amount and market value Of the stock
) and bonds, the the present as comp9r
S with the original costs Of construction
I the probable earning capacity of the brop
o statute and the sum required 10 meet
O operating expenses, are all matters 70
o consideration and are to be given sucl
= weight as may be just and right in eacl
y case"
This decision means simply that IN nx
Ing the traffic rate so as 10 get a reasn
i, able return upon the fair value Of thu
a property. consideration must Re giver
: among other things TO the market yalu
-, of outstanding bonds and stocks Ever
man should know that the market valu
of such so-called securities Is determine
p, by the revenue collected by the railroad
that own them, and unless they collet
:, sufficient money from the people to pa
the interest on these bonds and some diVl
depd 10 the stockholders, or course, the
20 become very much deprecated in tn
n market. If the revenue is sufficient "a
IT this purpose then these securities beconi
J. valuable without regard to whether the
~ we're originally honest or fraudulent I
~ any lawyer Who has observed the cautious
I'd insidious, direct bur certain steps OF tn
~ Federal judiciary on questions that In
I'd volve the AFFAIRS OF corporations, the cor
of clusion "a irresistible that this declsi1
~ Is but RE precursor of the rule which
ID yet to be finally established TO the effe
e. that railway rates fixed by the commits
l. sion must be high enough, not only to pa
D. for the maintenance OF way and the opel
m bonds and some dividend to the stockholi
"a ers. 1t is with no slight degree of alar
r that In view Of these facts. l speak o.
- now from the outlook and warn the pei
~ pie of Texas TO take care OF themsely'
while 1t Is yet within their power
nd by the adoption OF TINS amehdmeh
4: these transpoFtaflon INES VIII Dc con
a pelled 10 voluntarily eilnilnale thelr net
so tious ihdepteuness, or pc made 10 40
v through the courts. no question lhe
n can arise IN lhls state as 70 what sha
ga FORM the pasls OF reasonaple rae 10
nd hNed ny tne runway COMMISSION me u
AZ settieu Tule nov oy Wnlch inc coI1anss
IN - perPieNeu III hAlnB any nlalu l,i...,
rates eaus 10 luteIhluuo le coAlus -. .
~ very lnuVh 70 tne auVantase Vi lne aul'
~ manlpulators VINO nave only hctlllo
80 interest IN Tue railways OF our state
~ llsht tuaL the $ 1As lsslon suouiu
ue goNereneu oy me Valusuoh tnat lhe "a
up Ways hN upon tne,r properly lor taNatIo'
~ u proper that tne rate snou,u pe pas
ssS upon the NaluAtioh hNeu by me eolui,li
'u- s,on unueI tle aulhoiits ol Id" VI sn
ne tneE make the rate Win view OF reWat
De- ing those VINO holu tnese hcitlous s'oe
ms anu pohus for instance. one roau Is W
al ueu per ni'e ~ SSoso, Wniie we uou'iii
II sun N~ueu ~ at So4 40 anu us s'oeNs d
or poius asslegate S4o'uoV per inlie, any 90 y
or vas aesesseu LOT tdAatiou pen .iiIle 900