The Birmingham age-herald., 1908-09-04
Judge Van DeVentPr Grants h. junction Against Arkansas
 Railroad Commission
ROADS LOSING MONEY
 UNDER PRESENT RATES
Judqe Holds That 2-Cent Rate for Pas senuers Is Too Low and That Roads Should Be Allowed to Raise
 the Freight Rates.

St. Paul, Minn., September 3.-Judge Van Deventer in the United States cir cult court, today granted the injunction 1eouested by the St Louis, Iron Mountain and Southern and other railroads operat- ing in Arkansas against the Arkansas state railway commission. The injunction restrains the commission from enforcing the new 2-cent fare law and from inter- fering with the railroads in raising their freight rates on intrastate traffic.
 Before Judge Van Deventer announced his conclusion in the case there was a brief conference between the attorneys and court on the valuations of certain ot the railroads, defendant in the matters, which were still proceeding when the court adjourned yesterday. On account of this Judge Van Deventer had no de- cision prepared, and merely made an oral announcement of his conclusion, stating he would file brief opinion this after noon with the order in the case
 In his oral decision the court held that the testimony on the present hearing had demonstrated to him that rates proposed by the Arkansas railroad commission were unreasonable, non-compensatory and un~ lawful and could not be enforced against the railroad companies. The court direct ed that each defendant give bond, which would probably be about $1000o0 each, that they would keep distinct aud accurate account, showing the difference between the tariff charges of the railroads and whatever could have been charged II the rates of the Arkansas commission had been applied The order of the court will be fashioned after that issued by the same court in the Chicago Terminal railroad, which was decided here last spring. In an ex-cathedra discussion, explaining the order from the bench, Judge Van Deventer held that the laws of congress should take precedence over the laws of Arkan- sas in rate matters where the interstate regulations impunged on the intrastate regulations.
 The court made a condition to his order that any individual or passenger-mean- ing the sovereign people-suffering by reason of the rates to be applied during the pendancy of the order, and that on final hearing the order should be set aside the penalties for violation pre- scribed by the laws might be enforced, as if no injunction had been issued, and due reparaton made. The enforcement Of these penalties, however, should not cover a period preceding the beginning of this action.
 Opinion Filed.
 Late today Judge Van Deventer filed his 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 similar cases. The opn- ion. in part. is as follows
 Each of the four railroad companies is engaged in the transportation of freight and passengers, both intra- state and interstate in the state of Ar kansas, and each has made a practical application or test of the rates in ques- tion The freight rate proposed by the railroad commissioners while acting un- der the state statutes, and the passen- ger rate, which is of cents per mile, was prescribed by statute. The proofs disclose the revenues actually derived by each road upon the application of these rates from it's business in the state, the revenues from each class of traffic being stated so as to show separately the earnings from inter state freight, intrastate freight, inter- state passenger and intrastate passen- ger; and also disclose the value of the property employed on each road in the traffic within the state, the taxes passed thereon, the actual cost of con ducting the freight traffic and the ac- tual cost of conducting the passenger triffic. The first question for consld- eration is how shall this cost be ap- portioned between the intrastate and in1 terstate traffic. The proofs make it quite plain that the production of given amount of revenue is attended with greater cost in intrastate business than in interstate business and that this is general recognized fact is attested by the decisions in other cases where the reasons which make it so are fully stated
 Differences In Cost.
 Here the additional cost Is shown to be at least 100 per cent in freight traf- fic and 15 per cent In the passenger traffic, and this is principally what has been shown in other cases. Undoubt- edly these differences furnish stand ard by which is intrastate and that which is interstate, and while stand ards are suggested, the proofs indi- cate that none of them is as saf1sfac- tory 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 it's intrastate freight traffic is much less than the proportion of the operating expenses and taxes properly attributa- ble to it. and the earnings of two of them from intrastate passenger traffic is little less than the proportion OF the operating expenses and taxes prop erly attributable to it. As to two of the roads, the earnings from the traf- fife last named are somewhat in ex- kess of the proper proportion of the operating expense and taxes. but not