The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1907-03-26
NEBRASKA CASE IS
OF INTEREST HERE
Decision Made in Maximum
Rate Cases
UP TO THE SUPREME COURT
Court Holds Legislature Can Not I'm
pose Rates Not High Enough to
Produce "Fair Returns" On
"Fair Valuation"
UP TO THE SUPREME COURT

In view of the legal fight that has COM
menced in Alabama in regard to the re-
cent laws passed to regulate railroads,
the opinion of the United States supreme
court in the Nebraska maximum rate
case will be of interest
In a recent editorial of the New York
Journal of Commerce and Commercial
Bulletin the Nebraska law was fully
aired. The editorial in part says:
"The court pointed out that the true
distinction is between the delegation Of
power to make the law, which neees-
sarily involves a discretion as to what
1t shall be, and the granting of author
ity as to Its execution. 1t was conceded
that the former could not be done, so
that if comforting authority upon com
mission to prescribe railroad rates be a
delegation of legislative power 1t is clear
ly unconstitutional.
Decision In Nebraska Case.
"If there was any doubi about the
fact it was fully established by the de-
cision of the United States supreme court
in what Is known as the Nebraska maxi
mum rate case that n state legislature
has no power to impose any rates for
faces patted her on the back and admired
which are not high enough to produce
Il fair return on the fair value of the
property of railroad company The
court also held that the question whether
w prir mr. or
not a matter which a Legislature can de-
eide, but must ultimately be a subject
OF judicial inquiry. To quote its own Ian
guage:
:" In order to ascertain that value, the
original cost of construction, the amount
expended in permanent Improvement, the
amount and market value OF its bonds ard
stocks the present as compared with the
original cost OF construction, the prob
able earning capacity under any rates
prescribed by statute and the sum re-
quired to meet operating expenses, are all
matters for consideration. and to be given
such weight as may be just and right III
the particular case. What the company
is entitled to is fair return upon the
value of that which it employs for the
public convenience.
Within Its Own Limits.
ut was, however, the judgment of the
court that the reasonableness or the un
reasonableness of rates prescribed by a
| state for the transportation of persons
and. property WIDELY within its own Inn
| its, must be determined without reference
| to tine business of an interstate character
done by the carrier, or to the profits de-
rived from that business. The state can
| not justify unreasonably low rates for do
nestle transportation, considered alone,
! upon the ground that the carrier Is earn
| ing large profits on its interstate bust
ness, over which, so far as rates are con-
| cerned, the state has no control. That
| is to say, that railroad can not be COM
| PEELED to do business within a given state
| at Improbable figures on the ground that
| its lines in another state are so profit
able that the company as whole would
| still earn money. The rates established
within any state must be such as will
| give a fair return on the railway prop
| critics inside of that state measured by
the volume of traffic done within Its bor-
| ders"