Omaha daily bee., 1908-11-10
TWO.CENTFARE FIGHT BEGINS
State Of Missouri Contending for VAL
idity Of New Law.
MAXIMUM FREIGHT LAW ALSO
GovernOr-EIect Hadley in Court De
recting Case of state-Much
Evidence Secured by
Both sides.

KANSAS CITY, Mo-, Nov s.-Representa-
tives Of the eighteen leading railroads oper-
atinE in Missouri appeared before Federal
Judge Smith McPreson here today and be-
gan the presentation Of evidence in an en-
deavor to prove their contention that the
railroads are unable to operate with
profit under the 2-cent passenger rate and
the maximum freight laws, passed by the
last legislature. The state OF Missouri is
the defendant and it was represented by
Herbert s. Hadley, the attorney general
and the newly elected governor OF the
state.
This was Mr.. Hadleys first visit to his
home city since his election and before
court opened he was the center OF group
OF friends who took occasion TO congratu-
late him.
The 2-cent and the maximum freight laws
have been in effect for some time past
the railroad companies having previously
agreed not to contest the laws until 1t
could be shown by their actual operation
whether or not they were detrimental to
these properties as claimed. Each of the
eighteen railroads will present individual
petitions showing the effect the laws have
had upon the financial returns Of the par
ticular road. Each railroad will show its
earnings from the date the laws were put
into effect, and in all cases 1t will be de-
clared 1t is stated. that none of the roads
has been able to operate with a profit.
The state will produce figures TO dis
prove this claim, and it will attempt to
show that the railroads have made money
under the new statutes. These statistics
have been gathered after months of care
full work and the presentation of the evil
dence, according to Attorney General Had
ley, will consume two months time. The
arguments will not be begun until the end
of that period has been reached. The first
evidence produced today was that in case
of the st. Louis & San Francisco railroad.
| No Further Delay.
| In opening court, Judge Mcpherson an
nounced that he would consider no further
moves for delay. This hearing" said the
court, will be final so that the cases may
be appealed to the United States supreme
court II necessary. II there Is an adjourn
ment it will be on my own motion and
only If it is absolutely necessary. Judge
Mcpherson briefly summarized the status
! of the case. The Missouri railroads had,
he said, obtained an injunction restraining
the state from enforcing the state rate
laws. The railroads demurred to the two
!
1t was now in force The present hearing
was not ON the application for a temporary
Injunction against the state. but 1t is to
| be a final disposition so far as the United
! States district court is concerned OF both
! freight rates and passenger rates in Mis-
| souri,.
Then the opening statements were made,
/ Frank Hagerman Of Kansas City, making
that for the eighteen railroads and Attor-
ney General Ifadley outlining the case
for the state of Missouri.
Theories of Railroads.
Mr. Hagerman. in outlining the theories
upon which the railroads purpose to pro-
coed, said:
1.-TWO controversies are involved. those
concerning the freight rate laws enacted in
Missouri in 1906 and in 1907, and the 2-cent
passenger rate law enacted in 1907 We will
contend that IL the freight rate laws Of
1905 were confiscatory that the same is
true of the freight rate laws OF 1907. In
determining if the freight laws are
confscatory, we must know the
valuation Of the properties of the railroads
and then learn II the railroads are receiv-
ing a just return on their investments.
ITO get at this question, we must dis
tinguish between state freight and inter-
state freight. We will proceed upon the
theory that IL 1t costs the railroads more
to handle the state rate business than II
does to handle the interstate freight busl-
ness, in connection with the state busl-
ness, for instance, freight traffic between
st. Louis and ST. Joseph, there is the enor-
nous expense of terminals. These great
terminals within the state add to the oper.
ating expenses. No special terminal ex-
pense is involved, for instance. in trans
porting freight from a small town In Kan.
sas or in some other state. Another extra
expense in state freight rate business Is
the numerous slow branch lines. where
numerous stops must be made, involving
the time of employees Interstate freight Il
, handled on fast trains and the railroads are
not at so great an expense in caring for it,
If our theories are correct" continued
Attorney Hagerman. land we do not see
how they could be otherwise. not one of the
railroads in Missouri would earn more thar
two or three per cent on theft investment
If the freight laws were enforced and
: some OF the roads would not earn a dollar
on their investments"
Position of the state.
Attorney General Hadley's statement fol
the state was brief we agree with Mr.
Hageman." said Mr.. Hadley, that II
{ costs the railroads more to handle the stat,
j freight business than the interstate freigh
e business. But the railroads more thar
{ make up for this in another direction. Tn,
] state passenger business is much more prof
table than the interstate business.
!, 'On the longer hauls the passengers pay
( smaller rate per mile, and the equipmen
e on the interstate passenger trains is mucl
more expensive than on the local passen
ger trains within the state. The interstat,
trains are fast trains and the coaches ar,
the best built. The engines are the largest
4 the fastest and the most expensive made
have been an extensive patron OF the rail
roads recently and I am speaking from
experience and observation"
e Local Trains Crowded.
a Judge Mcpherson interrupted Mr.. Had
a ley TO ask: