Evening star., 1901-05-17

people. or about Nhfee-ffths the size of
washington. there<k an Independent tele-
phone company WITH rates of s36 and s4S
on wnlch per cent dividends are made on
d iatse pody OF stock all of which is water,
as the bonds more than cover the value of
the plant. With tfrsse rates. which are still
700 nlgh' there is one subscriber in Roches-
Yer TO each forty persons. showing that
telephone. MI
reduction Would Increase Business.
upon the facts here stated and the whole
pooy or existing telephone data there is
the strongest reasontto believe that lower
ing the rates to the congressional level of
30 10 soo would very largely increase the
hulfioer OF subscribers, probably doubling
,he IN! use or the telephone and perhaps treb-
lliis ~ "ithin two or three years. The Judge
sdlo tnat the court must take care not to
lntrench upon the authority of tho law
nithins power, not to disregard the statute
under consideration, unless it be unmis-
tahaoiy repugnant to the fundamental law
lei ehe court refused to consider the case
On the pasls of the probable increase of
business and decided ii upon facts relating
70 the preceding years under high rates
suppose the law In Hungary establishing
the zone system reducing rates 40 to SO
per cent mad applied to private system of
railways instead of a public system, and
the railroads had brought the matter into
thelr property, saying that since they had
only oeeh making ordinary interest on their
capital at the old rates they would surely
max MAKE loss on the new tariff averaging
less tnah halr the old one. The companies
would have made out their case on the
OASIS OF existing rates and business, and
the law would have been declared uncon-
stiutlonal on the principle Of this Wash
lnston decision. and yet the law was so far
from unmstakably repugnant to the funda-
mental law against contiscaton that the
actual result of putting the law in ooera-
'ion was an increase of net earnings instead
OF loss, as had been expected. 1t is not
possible to foresee the effect of such a low
erlng OF rates either in the railroad or the
telephone field, wherefore the court can
not Know that such law as that relating
to the Washington telephone is 'unnistak-
aply repugnant to the Constitution. The
true plan in such a case is to enforce the
law for reasonable time until it becomes
clear that the effect of the law is to de-
prlVe the company Of reasonable return
clear as matter Of fact and not as mat
ter OF supposition or inference from more
or less irrelevant data. Then the law may
rightly be declared unconstitutional, and
the company should have the right to COL
lect from the government whatever dam
ages have been inflicted upon 1t by the said
enforcement, but if upon fair and honest
trial the law justfies itself it should be de-
clared in force.
In the Wellman case Q43 United States
559l the Supreme Court Of the United
states clearly recognized the principle
that the increase of business from lowered
rates must be taken into account, and
made this principle one ground for refus-
ing to hold void a railway law Of Michigan
fixing maximum passenger rates at two
cents mile. In Indiana a statute fixing
the rent of telephone at not over 81 a
month, or $50 a year. has been held valid
although the company in suit was charg-
ing $11.l6 month sl34 a year, and
claimed 1t was only making reasonable
profits and could not manage on $36 a year.
ITO return to the Washington items. 1t
is probable that the enforcement Of the
congressional rates would double or treble
the business, and bring the real capital
per phone down to 800 or near it. thereby
reducing capital charges from $40 to s. or
Sc per phone.
The $3.50 monopoly tribute to the Bell
and Western Electric is almost wholly an
unJustlhable charge under an agreement
made years ago, under pressure of the fact
that the Washington company, like those
In most other American cities are really
subsidiary Bell interests, or branches of
one big monopoly.