Los Angeles herald., 1907-11-04
TWo-cENT FARES
PHTLLDELPHIA court rece

| ~ decided that the Pennsylvania law
- establishing the passenger rate on
all railways of that state at cents
per mile is unconstitutional. Although
this decision does not come from state
court of last resort and consequently
Is liable to be overturned, 1t is i'm
portant as indicating the possibilities
in this and kindred questions.
The courts finding was that in the
case of the road appealing to 1t the q
cent rate would not provide an adequate
rate of interest on the capital actually
invested in the road and It's equipment.
IF. in cases that may come before other
courts, 1t be found that a 2-cent rate
produce adequate interest on the capi-
tai invested, 1t is reasonable to assume
that decisions of different tenor will
follow.
The principles affirmed by the Phila-
delphia court are briefly as follows:
1. The legislature has right to regu-
late the charges of those engaged in
public service.
2. This regulation must be just and
reasonable 1t must not amount to a
confiscation of the property of the COR
poration engaged in such service.
8. The question whether any specific
regulation is just and reasonable is
one to be decided by the courts, which
are always to presume the reasonable
ness OF the regulation until the reverse
is shown.
4. A Just and reasonable rate is one
which gives fair return upon the
value of the property employed in the
public service, neither more nor less,
and this implies a profit equal to the
legal rate of interest.
| 5. The legislature may by specific
legislation abandon it's right to regu-
late the charges Of a public service cor
poration, but such waiver is purely per-
sonal and cannot be transferred by
lease or sale to any other corporation.
6. Congress has the exclusive right
to regulate interstate commerce, and,
since it has undertaken to regulate in
terstate railway rates, the state legis-
latures have no right to meddle with
that matter; but this does not prevent
them from regulating rates on traffic
within the state.
| To a layman it would appear that
the contention of the outlook (New
York;, which for several years has ex-
hibited an intelligent interest in the
problem of 2-cent fares, that the prin-
ciple involved in paragraph is ques-
tionable, is sound. AS the outlook af-
firms, rights may be waived. but not
duties" 1t lies within the duty, as we'll
as within the right of a legislative body
to protect both the railroads and their
patrons from unjust treatment on the
part of one toward the other and 1t is
not within the province of a legislature
to waive this sacred duty. Legislature
after legislature may refuse to extend
a helping hand in this direction, but this
neglect does not preclude just action on
the part of succeeding legislature.
Carrying the analogy further, if the
personnel of a corporations manage
ment undergo complete change, that
does not release the reorganized cor
poration from liabilities which may
have been imposed upon it when its
affairs were in the hands of other in
dividuals. Here, fguratively speaking,
the same shoe fits both feet.
The essence of the decision is con-
tanned in paragraph 2 quoted in the
foregoing. The courts finding is in
accord with the demand of reasonable
and fairminded people, A fundamental
truth in business, as we'll as a point of
law is involved, and the time is not far
distant when the principle affirmed by
the Philadelphia court will be accepted
as a Just one by railroads and their
patrons.