Omaha daily bee., 1909-03-03
If Applied in Principle it Will Affect
Nearly All Interior Points.
BIG REDUCTIONS ARE ORDERED
Cut on Thirty-Four Commodities
Range from Six to Ninety Per Cent
HILL EARNINGS ARE TOO HIGH
On Basis of Original Cost Present
Capitalization and Manner in
which ~ is Made, They Are
Held to he Excessive.

WASHINGTON. March 2-The railroad
rates involved in the famous case of the
city OF Spokane, Wash, against the North
ern Pacific and other railroads, were today
held by the Interstate Commerce commits
sion to be inherently unreasonable"
The decision says the eastern rates to
Spokane were higher than to Seattle, a
more distant point
The commission reduces class rates from
st. Paul to Spokane 1873 per cent and makes
substantially the same reduction from Chi
cago to Spokane. Rates east of Chicago
are not dealt with.
The decision, If applied in principle to all
commodities and to all interior points,
must work revolution in rates from
eastern points of origin to all interior
transcontinental territory, and in that view
it is one of the most far-reaching decisions
ever rendered by the commission.
The case has been under consideration
for approximately a year and half. For
many months the commission has been en-
deavoring to reach a determination of the
intricate points involved, but not until
within a few days was an agreement pos
sble The unanimous oponion Of the com
mission was prepared by Commissioner
Prouty.
1t is pointed out that nearly all commidi-
ties to the Pacific coast move under com
modify rates and these were the principal
subjects of complaint on the part of
Spokane. Rates from all points on the Mis-
souri, river to Seattle are the same, while
rates from the same points to Spokane are
considerably higher than to Seattle, and
increase as the point of origin lies further
east. Illustrative of this condition com
plaint referred to thirty-one articles. The
decision holds that the commission can
fix the rates only upon the articles en-
umerated. The cut in rates ordered is
horizontal and amounts in some instances
TO 80 per cent, in other eases the cut
amounts to only or s per cent.
In the hearing the cost of reproducing the
properties of the Great Northern and
Northern Pacific, their financial history,
their present capitalization and their earn
ings in recent years were fully considered.
Findings of Commission.
The commissions findings in brief are as
follows:
/. The system of transcontinental rates
now in force applies lower Transportation
charges from points of origin upon the
cities than are applied to intermediate in
terror points; held, that this scheme of
rate-making has been forced by water
competition between the Atlantic and Pa
citic coasts and that the maintenance of
the lower rate to the more distant coast
points is not of necessity a violation of the
third rfourth section, since water COM
petition creates a dissimilarity of crcum-
stance and condition between the interior
and the coast.
2 Water competition may justify a diff
ference in carload minimums and in the
right of combining different commodities
at the carload rate, as well as in the rate
Itself; but carriers should be prepared to
| Justify such preference.
j. In determining what are reasonable
rates between two points, neither the low
est at which railroads can afford to handle
traffic. nor the highest rate which necessi-
ties might Justify should be exclusively
considered. Rates must be established with
| reference to the whole situation.
T. Certificates issued against the ore lands
| formerly owned by the Great orthern Rail-
| way company cannot be properly considered
| in determining what are reasonable earn
| ings for that company at the present day,
g. The Great Northern Railway company
has In the last few years distributed its
| stock issues among its stockholders at par
| from time to time, although the market
value of the stock was often much above
| par. Without expressing any opinion upon
/ the legality or propriety OF this practice il
| is held that this fact, at this time, can have
| no bearing upon the earnings to which that
| company is entitled
| 6, Neither can the capital stock of the
| Great Northern Railway company be re-
| duced for the purpose Of determining what
| its fair earnings should be by the amount
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