The Montgomery advertiser., 1908-09-04
INNOCENT LAW KNOCKED OUT Arkansas Commission is Restrained. COURT GRANTS INJUNCTION Federal Laws Precede State in
 Rate Matters. Judge ysndeventer Declares That New Freight and Passenser "rarihs" Are Unreasonable, Non-Com- pensatory and Unlawful.
 


 st. Paul Minn., Sept. s.---Judge Van aeventer in the United States Circuit f~o,rt to-day granted the injunction reanesfed by the St. Louis Iron Noun tain and Southern and other raiiroaos operating in Arkansas. against he Arkansas Railway Commissioh.
 srba jniunction restraints the com mission from enforcing the new two cent fare law and from inter1erins with the railroads in raising tneir freirht rates on intra-State tramc.
 Before Judge vandeventer announced his conclusion in the case there was a brief conference between the 4orneys and the court on the .valua- fions of certain of the railroads-de- fendant in the matters which were atm nending when the court adjourn ed yesterday. On this account Juose Yandeyenter had no decision prepared and merely made an oral announce lnent of his conclusion. stauns lna. he would file brief opinion Witn Ine order in the case.
 In his oral decision the court helo that the testimony on the present hearing had demonstrated to him that rates proposed by the Arkansas Rail- way Commission were unreasonable. -compensatory and uniawlui ana could not be enforced against the rau- road companies
 The court directed that each de- fendant give bond which will proo- ably be about $100.000 each that they would keep distinct and accurate account showing the difference he- tween the tariff charges Of the rail- roads and what would have been charged if the rates of the Arkansas Commission had been applied.
 The order of the court will be fash toned after that issued by the same court in the Chicago Terminal Rail- road which was decided here last spring.
 ing the order from the bench Judge vandeventer held that the laws of Conxrase should take precedence over che laws of Afkansas in rate matters where the interstate regulations imp.nged on the intra-state resuia 4fons.
 order that any individual or passenger meaning the sovereign people, suf- farinr by reason of the rates to bA applied during the pendency of the order. and that on final hearing the order should be set aside, the penal ties for c violation prescribel by the laws. must be enforced, as if no in- junction had been issued, and due re- paration made. The enforcement of these penalties, however, should not cover period preceding the begin ming of this action.
 The Written Opinion.
 Late today Judge Van Deventer filed hia opinion with the order granting the temporary injunction. In his opinion, Judge Van Deventer recites the history of the case and quotes from opinions handed down in siuni- lar cases. The opinion in part is as follows:
 Each of the four railroad companies is engaged in the transportation Of freight and passengers. both intra- state and inter state in the State Of Arkansas, and each has made prac- tical application or test of the rates Tn question.
 The freight rate prescribed is by the railroad commissioners. while acting under the state statutes. and the pas senger rate, which is of two cents per mile, was prescribed by statute. The proofs disclose the revenues actually derived by each railroad upon the ap- plication of these rates. from its bust- ness in the State, the revenues from each class of traffic being stated so as to show separately the earnings from inter-stat freight, intra-state freight. interstate passenger and intra-state messenger: and also disclose the value of the property employed on each road fin the traffic within the state, the taxes paid thereon. the actual cost of conducting the freight traffic and the actual cost of conducting the passen- ger traffic.
 The first question for consideration is how shall this cost be apportioned between the intra-state and inter- state traffic The proofs make it quite plain that the production of a given amount of revenue is attended with greater cost in intra-state business than in interstate business and that this is a generally recognized fact, is at- tested by the decisions in other cases where the reasons winch make 1t so are fully stated. Here the additional cost is shown to be at least 100 per cent Tn freight traffic and fifteen per cent in the passenger traffic and this is principally what has been shown in other cases. Undoubtedly these differences furnish a standard as to which is intra-state and that which is interstate and while other stand ards are suggested, the proofs indicate that none of them is as satisfactory or accurate as is the difference in cost. It must therefore. be applied. When this is done. the result shows that the earnings of each road from its intra- state freight traffic is much less than the proportion of the operating ex- penses and taxes properly attributable to 1t and the earnings of two of them from intra-state passenger traffic is a little less than the proportion of the operating expenses and taxes properly attributable to it.
 As to two of the roads. the earnings from the traffic last named are some what in excess of the proper propof- ton of the operating expense and taxes, but not enough to yield re- turn of one per centum per annum upon that proportion of the value of the property rightly attributable to such traffic.
 State Lnw COnfiseates.
 The conclusion follows that these rates. both freight and passenger, are nou-oompensatory and unreasonable. and that their enforcement, although not so intended IS nothing other than using or taking of the property of these railroad companies without due compensation. which is eonfiscation. This the constitution of the United States does not permit.
 But 1t Is urged that a temporary in- function ought not to be granted be-