The evening times. [volume] (Grand Forks, N.D.) 1906-1914, 1906-10-13

merce both republican and democrat
for they made an unanimius report on
the bill without including the pro-
posed amendment, all the republican
senators save three, who voted the
proposed amendment down. have per-
petrated fraud upon the American
people In giving them a bill which is
utterly worthless for the purpose 1t
was intended and delusion and a
snare. Now either the commission
who under resolution of the senate
committee prepared the original draft
of the bill introduced in the house by
Colonel Hepburn and in the senate by
Senator Dolliver and hence called The
Hepburn-DOlilvar bill, as well as the
president and the attorney general
and the house and senate majority
were guilty of such deceit and fraud
upon the people, or else the junior
senator from Wisconsin is mistaken,
about the merits of his proposition.
! am firmly of the opinion that he
Is mistaken, and | will point out the
reasons for it. He bases his conten-
ton that his proposed valuation
amendment is necessary in order t.
obtain reasonable rates upon the de-
cision of the supreme court of the
United States in Smith VS.. Ames, 1863
U. s. Rep, and he quotes the follow
ing extract from the opinion in that
case in support of his contention:
I'VE hold, however, that the basis of
all calculations as to the reasonable
ness OF rates to be charged by cor
poration maintaining highway under
10 ic l
value of the property being used by
1t for the convenience OF the public.
And in order to ascertain that value
the original cost of construction, the
amount expended in permanent I'M
prOvement, the amount and market
value OF its stock and bonds, the pres
ent as compared with the original cost
of construction, the probable earning
capacity OF the property under the
particular rates prescribed by the stat
ute, and the sum required to meet
operating expenses are all matters for
consideration and are to be given such
weight as may be just and right in
each case. We do not say that there
may not be other matters to be re-
garded in estimating the fair value of
tho property"
Now it will be noted that the court
say plainly that the basis for all cal
culat.on as to the reasOnableness of
rates is the fair value of the property.
Then the opinion goes on to state how
that fair value is to be arrived at, and
lays down the rule that the following
six items should be taken into ac-
count: Cd Original cost, (2) perman-
ent improvement, (3) amount and
value of stocks and bonds, az present
as compared with original cost, (5)
probable earning capacity under the
particular rates prescribed, (6) operat-
ing expenses, and then they add that
they do not say that there may not
be other matters that also should be
considered. They do say that the
above six items shall be considered in
arriving at fair value" The proposed
amendment authorizes and requires a
valuation of all the railway property
at an estimated expense of five million
dollars. and this valuation is to be
made at once and in advance of any
proposed reduction of alleged unreal
sonable rates.
II 1t is to be done in advance of and
anterior to proposed reduction, how
can the appraisers know or take into
consideration the fifth requirement
above specified by the court, to-wit:
The probable earning capacity of
the property under the particular rate
prescribed? There is no such rate.
The proposed valuation therefore
would not be evidence in the courts
and would be thrown out and the five
million dollars of public money wasted.
The Smith case arose under a rate
prescribed directly by statute Of the
state of Nebraska, but the rule would
be the same whether the rate was
made either directly by legislative act
or by an authorized commission. Again
the proposed valuation is only to be
prima facie evidence of fair value.
Every rate prescribed by commission.
state or federal. or by legislative act,
is by all courts presumed to be valid.
1t is therefore prina facie valid
whether based on any valuation or not.
and to 'be overturned the carrier who
questions it as invalid or confiscatory
has the burden of proof to show that
its enforcement would deprive him Of
his property without due process of
law. The fact that it was based on
an anterior valuation or appraisement
would add nothing to it's validity, for
If the carrier by proof taken at the
time. In the course of the litigation.
can, by sufficient proof, overcome the
prima facie valid rate, he can at the
same time and by the same amount of
proof overturn the prima facie fair
valuation made before the litigation
began.
Again. the records show that this
question of the reasonableness of rates |
has been Irrigated time and again fo;
he last twenty odd years, both in the |
state ANA federal court and in every
case the proof of the fair value of the
property OF the carrier so far as It |
was considered material has been es-
ablished in the ordinary way by evil
fence offered and received at the trial
II each particular case without any
whatever. Why has nobody
'var before thought of getting this
lind OF evidence by wholesale in adj
'ance? Because 1t would be worth
ess. and rejected by the courts. The
enator In his speech on the rate bill
lies three states. Michigan, Texas and
Wisconsin,, that have made valuations
\ railway property. For what pur-
ose: For the purpose of taxation
MY HIS own state, he says, when
hey sought to learn by comparison
nth the rates established by govern
Rental authority in other states, what
'ould be reasonable rates for Wiscon-
IN went to Iowa and Illinois. But
Owa and Illinois had never made n
of railway property. How
Onld they then have ascertained what
easonable rates should be when he
avs mat That cannot be done without
a In IL L