The evening times. [volume] (Washington, D.C.) 1895-1902, 1900-02-05

/ OF any further opinion as to the effect of
/ this act on existing contracts between the
defendant and the various departments of
/ the Government. Such contracts il must
/ be held. were not intended to be affected;
and by this construction. Congress is re
/ lleyed from the criticism OF intending to
so legislate as TO change the terms Of
contracts TO which the Government was
a party. without the consent of the other
contracting party.
The Proof offered.
now take up the point to which most OF
/ the proof and argument has been directed.
namely, the claim of the unconstitutional
l ty Of the act on the ground that the rates
J fixed are too low TO allow any return or
/ reward 10 he defendant for the moneys
/ invested IN the business, and necessary
| to be used to supply the service. It is
conceded in argument that the defendant
| IS public service corporation. although it
has 10 power to condemn property for its
purposes. A corporation OF this class
! usually has. by express grant, or under
! the circumstances of the case a monopoly
Of the business to be done. Ii railroad
company, and having the right to lay
| tracks on q street and run cars thereon
for carrying passengers, il naturally eX-
! poets 10 have the right Of carrying all who
wish to ride on that street: and as such
right is valuable, such corporations ac-
cepts the terms prescribed as to the rates
to be charged. II the rates are fixed in
the charter. as is usually done. that be-
comes part OF the contract and the right
TO exist in the consideration for the sur
render Of its right to contract about rates
Of compensation for its work. And when a
charter Is granted by one State. and the
corporation formed hereunder goes 20
another State or district to do business
the State or district where the work is
to be done may prescribe reasonable regu-
lstions as terms on which il can be i'd
United to operate.
In the case OF the defendant company Il
does not appear that any formal terms
were ever prescribed by Congress- upon
compliance with which it was authorized
TO do business here. II came here how
ever, and began business in 1888 getting
the permission of the District Commits
siOners to string wires and to lay con-
Quits. AMI making its contracts with the
citizens. and with the various departments
Of the Government. to furnish them with
telephones and telephone service. and
Congress acknowledged its right to be
here by making appropriations from time
to time 20 pay il for telephones used by
the Government under its various con-
tracts and in other ways &C Stats. at
Large. Sis so Stats at Large, IL. 1861.
The FIRST effort TO establish a telephone
when George G. Maynard began by run
ming a line from the Capitol 10 his office.
and from his Office 10 the Office OF the
Evening Star Newspaper Company. In
January, 1879 a partnership was formed
by him with another gentleman. under the
name of the National Telephone Exchange.
and in December Of tie same year this
frm sold out its interests to a corporation
known by the name OF the National Capt.
al T4Ha ygh pffrrIf trfsff
the business until August, 1883. when b.
sold out TO the defendant company. which
has been the only person or telephone
company doing a general telephone bust
ness in this District from that time TO
the present.
The capitalization Of the defendant for
its whole territory was fixed az s. $50 600
Of which $4,000 was allotted 10 this Dis
trict and represented abe plant and as
sets of the said National Capital Telephon,
Company including its good viii and al
its patent right and other contracts The
general expenses Of the defendant cOmpa-
ny have been equiJably apporu0ued be-
tween the District and the territory out
side and in the course Of its business Be
became necessary fer IL to issue bonds
TO the amount of 100000; and the pay
ment Of these was appCrtioned in like
manner. two-hfths being charEeable 90
that part Of defendants business which
is within this District
The Purposes If the Law.
The first enquiry un,.,r this branch Of the
case Is TO ascertain what relation. il any.
exists between the act and the defendant
company. or whether the purpose Of the act
is necessarily to regulate the charges Of
the defendant company. The act. by It's
terms is to take effect Immediately after
its passage. and the defendant is the only
person or company 90 whom 10 could then
be applicable. IL IL could be construed as
intended only for the government OF any
person or company thereafter to commence
doing business in the District. no question
would be likely to arise in the courts in
respect of the reasonableuess Of the charges
10 be allowed. for such person or company
would investigate the prospective profits
aud expenses before investing in the enter
prise or assuming the responsibility Of
common carriers Of telephone messages.
In this case. however. the Investment was
made and the defendant had incurred GER
tain contract liabilities which il could not
rCpudiate. and had constructed an eNpen-
sive plant before any rates we're fixed or
airy intimaJion had that the rates were 10
be regulated in any way except by agree
ment.
Mr.. Justice Harlan. in pronouucing the
opinion OF the Supreme Court in Smyth
vs. Ames. III l. =. 364. speaking of the
time when the facts exist which are
properly to be considered in forming q
judgment as TO rates, uses the following
language.
The reasOnableness of a schedule of
rates must be determined by the facts as
they exist when it is sought 10 put such
rates into operation
II would seem from this principle that
said act was intended to regulate the price
to be received by he defendant for the
service il was then furnishing: and as the
rates were TO be put in force immediate
Iy. and to be applicable to all contracts
thereafter made. the condition OF the de
PENDANTS property and business at and
about that time to wit. June 30, 1898.
must be considered in reaching any con-
clusiOr as to whether the rates fixed are
Just and fair 10 the defendant, aud TO the
public.
Before entering upon the consideration
OF those facts il may be well 60 state
what appears in a stipulation OF counsel
filed in this cause as to how the pro-
vision in question came to be passed. The
said appropriation bill was pending in the
House Of Representatives on February l.
1898 when the provision in question was
added as an amendment. and the bill as
thus amended passed the House the next
day February =. On February ., the bill
went to the SeIate and was referred 10
the Committee on Appropriations for con-
sideraton and report. On March ? il was
reported back to the Senate by that com
mittee. who recommended certain amend
ments. one of them being that said pro-
yisO should be struck out.