The evening times., 1900-02-05
THE EVENING TINES WASHINGTON MONDAY FEBRUARY 1yuu


OF any further opinion as to the effect OF
this act on existing contracts between the
defendant and the various departments oi
the Government. Such contracts, IL must
be held, were not intended to be affected;
and by this construction, Congress is re-
lieved from the criticism of intending to
so legislate as to change the terms of
| contracts to which the Government was
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 anconstitut!onali-
ty Of the act on the ground that the rates
| fixed are too low to allow any return or
reward to the defendant for the moneys
! invested in the business, and necessary
to be used to supply the service. 1t is
conceded in argument that the defendant
is public service corporation, although it
has ho power to condemn property for its
| purposes. A corporation of this class
usually has. by express grant, or under
the circumstances of the case monopoly
Of the business to be done If railroad
company, and having the right to lay
tracks on a street and run cars thereon
for carrying passengers, il naturally ex-
poets to 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. If 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 to
| another State or district TO do business,
| the State or district where the work is
| to be done may prescribe reasonable regu-
| lations as terms on which it can be ed-
| mitted TO operate.
| In the case of the defendant company 1t
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 1889 getting
| the permission of the District Commits
! sioners to string wires and to lay con-
/ duits, and 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 to pay it for telephones used by
the Government under its various con-
( tracts and in other ways &c Stats. at
/ Large, 5lS. 80 Stats at Large III, 1861.
/ The first effort to establish telephone
! exchange in this city was made in 1878,
when George c. Maynard began by run
ming line from the Capitol TO his office.
and from his office to 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 the same year this
! firm sold out its interests to a corporation
known by the name of the National Capt.
/ tai Telephone Company which continued
! the business until August 1889. when 1t
sold out to the defendant company, which
has been the only person or telephone
company doing general telephone busi-
ness in this District from that time 10
the present.
The capitalization Of the defendant for
its whole territory was fixed at S2650,000,
of which $3.50. 00a was allotted 10 this Dis
trict and represented the plant and as
sets Of the said National Capital Telephone
Company including its good will and all
It's patent right and other contracts. The
general expenses Of the defendant compa
ny have been equitably appOruoned be-
tween the District and the territory out
side and in the course of its business Il
became necessary fer it to issue bends
10 the amount OF $5o0.O00; and the pay
ment of these was appCrtioned in like
manner. two-ffths being chargeable to
that part of defendants business which
is within this District,
The Purposes of the Law.
The first enquiry under this branch of the
case is TO ascertain what relation. ii any,
exists between the act and the defendant
company. or whether the purpose of the act
is necessarily to regulate the charges of
a.. H. Ire
terms. is to take effect Immediately after
its passage. and the defendant is the only
person or company to whom il could then
he applicabie If 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 reasonabeness of the charges
10 be allowed, for such person or company
would investigate the prospective profits
and 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 it could not
repudiate. and had constructed expen-
sive plant before any rates were fixed or
any intimation had that the rates were to
be regulated in any way except by agree
ment.
Mr. Justice Harlan. in pronouncing the
opinion of the Supreme Court in Smyth |
vs.. Ames. III L. S, 364, speaking of the
time when the facts exist which are
properly to be considered in forming Il
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 il is sought 10 put such /
rates into operation
Ii would seem from this principle that I!
said act was intended to regulate the price |
to be received by the defendant for the /
service il was then furnishing; and as the |
rates were to be put in force immediate /
ly and to be applicable to all contracts |
thereafter made, the condition of the de |
fendant's 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 to the defendant, aud TO the |
public
Before entering upon the consideration
of those facts il may be well to 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 !.
1898. when the provision in question was
added as an amendment, and the bill as
thus amended passed the House the next |
day, February 2. On February 3, the bill |
went to the Senate, and was referred to
the Committee ON Appropriations for con-
sideTation and report. On March 2, it was
reported back to the Senate by that COM
mittee who recommended certain amend
ments, one of them being that said pro-
cb bo cfr