The Minneapolis journal., 1902-06-14
POWER OYER RATES
How the States Counsel Secures
: the New Ulm Decision.
JOINT RATES CAN BE CONTROLLED
Marks a Great Cain for
,ysy.@. -. 4Eis> the State. s>a.t.z4a +.


recent decision. T. D. GOBrien Of st.
Paul holds that it marks the greatest step
in the direction of government control of
public service corporations of any de-
cision ever rendered by the highest, court
of the land. The decision was limited, OF
course, to the New Ulm case in which
the connecting roads had already joint
rate established, but the language Of the
decision plainly Indicates that, the court
believes in the right Of the state to COM
pei connecting railroads to make reason
able joint rates. s-r - '-- e
Mr.. O'Brien, who argued the case before
the supreme court, and with Judge Mills
Of the rail lroad and warehouse commits
sion, carried it through all it's stages, has
received a copy Of the courts decision,
and at the request of b e ] o u a /
he reviewed it and interpreted it from
the standpoint of the state. Mr.. O'Brfen
first gave a history of the proceeding,
then summary of the decision. He said:
I'm 1898 Governor Lind, while residing
at New Ulm, inaugurated movement
looking toward a correction of the rate
on hard coal in car load lots. Coal was
brought to New Ulm from Duluth over
the St. Paul & Duluth and the Minneapo-
lis & st. Louis, under a tointsrate. The
old rate was $3.50 ton, Duluth to New
Ulm, and the same rate was. charged for
all points on the line from Norwood,
which is forty miles. from Minneapolis.
clear through to the western boundary Of
the state. The commission, then con-
sisting of Messrs.. Mills, Becker and
Ringdal, ordered a graded rate. For in
stance, they made the rate from Duluth
to Hopkins, nine miles from Minneapolis,
s1.32 to Norwood, s1.57; to New Ulm,
$1.95, and to Boyd, the last station in
Minnesota, $2.48.
THE railroads notified the commission
that they were unable to agree on dlvl-
sion Of the rate, and the commission then
proceeded to apportion it, allowing the
St. Paul & Duluth 81, and the rest to the
Minneapolis & St. Louis. =, .'.
This procedure was all under the law
Of 1895. Another branch Of that law, be-
ing the right of the state to compel maxi
ing of connections by putting in VS. at
points OF intersection, had already been
decided in favor of the state. by the su-
preme court in the Hanley Falls case.
| The Roads Contention.
"The- contention of the railroads was
that it was an invasion of their charter
rights for the state to attempt to dictate
the parties and terms Of contracts to be
made by railroads between themselves,
and that the act of 1895 was unconstitu-
tional, for the reason that it authorized
railroad company in the conduct OF 1ts
business. - ,s- .f - ..'
"On the trial of the case the railroad
company introduced evidence for the pur-
pose of showing that the rate fixed by the
| commission was ,unreasonablya low, but
confined it's testimony to the amount OF
capital stock and bonds of the railroad
company and its average earnings for all
of its business and attempted to show
and claim that the rate allowed by the
commi ssions was less than the .tayerage
cost per ton per mile of hauling freight
on its line, and, therefore, the railroad
could not be compelled to carry this COM
modify at a loss: -" - =
'"The state relfed upon that section of
nation of the commit ssion on the question
of rates was prim1as facte>. correct, and that
in case of an tappeal1 or proceedings
brought to enforce the order, the burden
of proving thes efnvalidity of the order
was upon the escarrier. At the close of the
testimony infroduced. by the railroad
company it seemed to the commission that
the presumption IN favor. Of the order of
the commission Had not been overcome;
in other words, that the railroad company
by showing the, amount Of It's bonded in
debtedness and capital stock had not
shown sufficient, the test being the true
value Of the property, invested in the en-
terprise. Every contention Of the state
made before. the supreme court Of. the
United Stat es has been sustained by the
opinion, of Judge Brown: >, =. *.
Authority on Joint Rates. -.
Referring to, the claim of the railroad
company, that the compelling of them to
establish joint rates is beyond the con-
stitutional power of the legislature, Judge
Brown says:
Indeed, it is impossible for the state
to- exercise this form of regula tion with
out interfering to some extent, with the
power of railway to contract with its
customers or connecting lines: "
Again he says. This legislation may
be justified by the fact that these various
occupations are necessarily, to certain
| extent, monopolistic in their nature anG
that in dealing with customers the part
les do not stand upon an equality, the lat.
ter being practically compelled to submi
to such terms as the former may choose
to exact, unless the state shall, acting il
the interest of the public, elect to inter
fere and prescribe a maximum OF, charges.
Again speaking of the powers of tht
state, he says: 1T has clear right t.
pass upon the reasona bleness of contract
in which the public is Interested, whethe
such contracts be made directly with tn
patrons OF the road or for joint actio,
in the transportation of persons or prop
erty in which the public is indirectly con
cerned.' T.. = = :
"The court then goes on to hold that in
asmuch as a joint rate had been in fore
between these two railroad companies be
fore the investigation Of that rate b
the commission, that the necessities q
the case do not require us to determfn
whether connecting roads may be com
PEELED to enter into contracts betwee
themselves, and establish Joint rates. bu
so far as applied to contracts ALREADY i
existence we have no doubt of the powe
OF the state to supervise and, regulat
them ~ = =, Z >'~l :-fv;' ). : -
In saying this. the court followed tn
universal rule that the court will actua II
decide no more than is necessarily be
fore 1t in any case, but Immediately pre
ceding that language Judge Brown SAYS
We are bound to recognize the FAC
that modern commerce is largely carrie
on over railroads owned and operated b
different companies - and that, !,
the power Of the state commission wer
limited to the tariff OF a single road, 4
would be wholly ineffieacious, in a4lare
number, if not in a majority of cases-I
fact that. the whole purpose of the, ac
might be defeated Il .-s.stt,.S !
Burden of Proof With Roads.
THE, decision then holds: THE pre-
sumption Is that the rates fixed by til
commission are, reasonable, and the bur
den or proof Is upon the railroad com
panies to show the contrary, and afte
an elaborate discussion of the eyidenc
| jDtr0duCpd on the Hnuosfiop - ~, So.