The evening times. [volume] (Grand Forks, N.D.) 1906-1914, 1907-06-05
A CASE IN POINT.

The action which is now pending
in the United States district court of
Minnesota to enjoin the state railroad
and warehouse commission from en-
forcing a lower commodity rate, is
one Of the strongest arguments it
would be possible to make, that the
position taken by President Roosevelt
in his great Memorial day address at
Indianapolis, that before there can be
any substantial governmental regula-
ton of these quasi-public institutions
there must be a careful appraisement
of the commercial valuation.
The Minnesota railroad and ware
house commission is merely the APP
pointed agent of the legislature and
it is we'll established principle of
law that within the scope of its dele
gated authority, it is legislative act.
In other words, the power which it
exercises could be exercised by the
legislature, were there no commission.
1t can therefore be seen that the
rights and powers which the court
may determine as belonging to the
railroad and warehouse commission
will be the same rights which belong
to and the same powers which may
be exercised by the several state leg
islatures and by congress itself in
fixing the commodity and passenger
rates on the railroads under their leg
islative power.
The rule which has been indicated
as the controlling principle in cases
of this sort, stripped of legal phrase
ology, is that the rates must be such
as to allow reasonable profit on
the investment, after deducting the
cost of operating. On the surface this
seems equitable and fair. Men who
invest their money in railroads should
have profit income from the same
just as should the man who invests
his money in farm lands.
The Minnesota suits are brought to
restrain the railroad and warehouse
commission from enforcing a rate
fixed by it which the ten railroads
operating in the state claim is so low
that it prevents them from making
such profit.
The serious question involved in the
whole matter is to determine the ac-
tual value of the railroad property.
1t would not be fair to say that the
cost Of construction plus the subse-
quent improvements should be the
value of the line, because the cheap
ness of material and labor at the time
of construction compared with these
same items at the present time would
make the property more valuable at
this time than it was at the time
of construction. The same logic APP
plies to the value of pioneer lines
built through undeveloped countries.
The intrinsic value of the investment
is more than the original cost. Pos
session Of field which produces dou-
BILE the quantity of freight that it did
when the line was constructed would
certainly make the railroad-equip-
ment used on the same included
more profitable than the same prop
erty would be when the former con-
ditions prevail.
The elementary resolution of the
proposition is that to get specific
basis for fixing the rate-income, there
must be a valuation of the railroad
property which shall include not only
the cost of construction and eduip-
ment but the value of railroad field
possessed. In word, it must be
the business value OF the railroad as
an honest investment.
This is the identical plan outlined
by the president in his indianapolis
address. Once this valuation is Sc
cured the fixing of rates by the ma
tional and state legislatures, or by
the duly authorized agents of these
constitutional bodies-the several
state railway commissions and the in
terstate commerce commission
would be simple process, and the
courts, both state and federal, would
be able to sustain them without dis
turbing any we'll established funda-
mental principles of law, and upset
ting that which is necessary to the
preservation of our individual liberty
the integrity Of the peoples tribunals.
This plan does not mean a recog-
J milton of the watered stock Of rail-