Reporter and farmer. [volume] (Webster, Day County, Dakota [S.D.]) 188?-1946, 1900-02-08
WAS OVER

maI0eiudIlCdl ACCURACY LIS STOSS Te-
ceipts Of the company on all it's bust
ness in all the states during each of
the four years and the actual cost Of
doing that business during each of the
four years and the actual cost of doing
that business during each of those
years; also the gross receipts from the
business done in South Dakota, and
separately the amount which was re-
ceived in that state from Interstate
business and that from local. IL the
schedule of rates prescribed by the de-
PENDANTS had been in force during the
four years.. and the anne amount OF
business had been done by the COM
pany, the reduction of gross receipts
from the passenger business would
have been fifteen per cent, and from
the freight business seventeen per cent.
or course, the cost of doing the bust
ness would be substantially the same.
The court found the value OF the
plaintiffs property in South Dakota 10
be $4,000, 900, although, according TO
the testimony, it was bonded for over
SIS, 600, 900. 1t held that it vas not
fair to consider that sum, $40. 900 900,
the value OF the property employed in
doing local business, for IL was also
used in doing Interstate business; and
that the true way To determine the
value OF the property which could be
regarded as employed in local business
was by dividing the total value of sI0,-
900 900 in the same proportion that ex-
listed between the amount OF gross re-
ceipts from Interstate business and
that from local business, each of which
amounts was. as we nave seen, accu-
rateIy shown by the testimony.
Upon that basis of division ii found
hat the value OF the company's prop
erty employed in local business was
by dividing the total value OF $4,000
900 in the same proportion that exist
ed between the amount of gross re-
ceiptS from Interstate business and
that from local business. each of which
amounts was, as we nave seen, accu-
rately shown by the testimony.
Upon that basis of division it found
that the value of the company's prop
erty employed in local business was
for the first year, So, 200, 900; the second
year, 81, 600, 900; the third year So, 100,-
600, and the last year 81, 800, 900, and
also that the gross receipts from local
business were for the first year, 1875
per cent of the valuation; for the sec
ond year, 12.7 per cent; for the third
year, 1876 per cent, and for the last
year, 1853 ger cent.
QUESTION OF EARNINGS.
In other words, for these several
years the company received as compen-
5ation for doing its local business the
per cent named of the real value of the
property used in doing that business.
Then, proceeding on the superstition
that the defendants schedule haG been
in force and the rates reduced as there
l n prescribed during these four years,
1t divided the valuation of $40, 900, 900
on the like proportion of the receipts
from Interstate business to the receipts
from local business As Thus diminished,
and upon such division found hat the
valuation OF the plaintiffs property
engaged in local business would have
been, for the first year, ST, 800, goo: for
the second year, 81, 800 900; for the
third year, S1,S00, 900; and the last
year, 81, 500 900; and upon such basis
that the gross receipts from local bust
ness would nave amounted to Is per
cent Of the value OF the property for
the first year, III for the second, 1873
for the third, and 1862 for the last. Up
on this IL held that the difference be-
tween the per cent of receipts in the
two cases was slight, and that there
was no change in what may rightfully
be- called the earning capacity of the
property sufficient to justify a declara-
ton that the reduced rate prescribed
We're unreasonable. In other words, it
was of the opinion that the earning
capacity was so slightly reduced that
it would not be affirmed that the new
rates were unreasonable.
FALLACY IN REASONING.
But that there was some faIIacy in
this reasoning would seem to be sug-
gested by the fact that although the
defendants schedule would have re-
duced the actual receipts Is per cent
on the passenger, and IL per cent on
the freight business, the earning ca
pacity for the last year was diminish
ed only one-tenth OF one per cent. Such
a result indicates that there is some
thing wrong in the process by which
the conclusion is reached. That there
was, can be made apparent by further
computations, ana III Cn6m we Will
take even numbers Ii more easy of
comprehension. Suppose the total
value OF the property III South Dakota
was $40, 200, 900, and the total receipts
both from Interstate and local BUSH
ness were $1,000, 900, onehaIf from
each. Then, according To the method
pursued by the trial court, the value
of h property used in earning local
receipts would be So, 100000, and the
per cent Of receipts 20 value would be
10 per cent. The Interstate receipts
being unchanged, let the local receipts
by a proposal schedule be reduced to
one-fifth OF what they had been, so
that instead of receiving $500, 900 the
company only receives 800, 006.
The total receipts for Interstate and
local business being then $500, 900, the
valuation Of $40, 900, 900, divided be-
tween the two, would give To the prop
erty engaged in earning Interstate re-
ceipts in round numbers So, 333. 900.
and to that engaged il earning local
receipts, 81, 66 900. But IL 81, 667, 900
worth OF property earns 500, 900 il
earns six per cent. In other words.
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