The Detroit times., 1909-03-09


Judge Smith Mcpherson. OF the Unit |
ed States district court. decided today
In favor OF the railroads in the htlga-
ton regarding the passenger ana
| freight rates fixed by the legislature
in 1907 He declares the two-cent pas
senger fare law and the freight rate
| fixed By the statute are not remunera-
tive and are In effect confiscatory I'M
der the constitution.
The decision says that IL the court
had the right 10 fix rates the larger
roads would be- allowed to charge l.
cents per mile for passengers ana the
other roads three cents He mas thal
under the rates fixed by the statutes
many roads are operated at loss ahd
none realize 8 per cent. which he de-
clares TO be fair return.
| Eighteen railroads are interested IN
the result OF the suit, which was De-
gun by the ST Louis a. San Francisco
railroad company and was directed
against Attorney General Hadiey ana
the members OF the railroad and ware
house commission. The railroads ask
ed for an injunction 10 prevent the
enforcement OF the rate laws. ne
courts ruling says; Inc unqueslioi'
ed and undoubted rule Is that there Is
presumption both OF fact and OF law
| in favor OF the validity OF every iegis-
lative enactment. The railway CON-
panies have the burden OF removing
| this presumption and showing that
the statute clearly is invalid. The
authorities upon this question form
a long and unbroken line. with sin
gle exception, and that one authority
is not persuasive.
Much was said In argument as TO
the message OF Gov Hughes, of New
York. two years ago in declining 10
approve the two-cent fare statute or
that state Gov Hughes had the moral
courage TO veto measure or popu-
liar favor because. as he believed, the
( question had not been fully consider
ed. But the relations OF governor
10 proposed legislation and those OF
court TO legislation consummated are
entirely different.
1.-THE supreme court in the case
OF city OF New York VS. Consolidated
Gas Co. Of New York. decided thai
per cent was fair and sight TO he
given to the owners upon the true
valuation. My opinion is that while
gas plant is in some respects differ
ent from a railroad, that railroad
y
managed. should over and above ex-
penses. make return OF per cent
per annum And considering all the
evidence, these ROADS. economically
managed. made not more than 3 per
cent above expenses. in fact, some oil
them had a deficit. Even taking the
bonds into consideration does MOI
change the situation.
The passenger earnings under the
two-cent fare law Of 1907. allowing
nothing for extra cost over inter
state business. give no return what
ever TO the Rock Island. 81 Louis a
Hannibal Kansas City. clifton *
Springfield. and the Great Western.
The other companies will nave the
| following: The St Louis & San Fran.
cisco between and I per cent. the
Santa Re between and 5 per cent;
/ the Kansas City Southern small I
fraction over per cent; the NJ. h. a
IT. between and 3 per cent, the
Burlington between , and 4 per cent
But all this - arrived al by allowing
no extra cost OF service. But 10 ado
the extra cost for freight and pas
senger there are no earnings over
I expenses This is COnfsCation under
the constitution
IT being a legislative act. and not
a judicial one. this court cannot fix
rates II it could. Two and one-half
cent passenger rate would be fixed
for the strongest roads. and three for
the others Bur that is for the legis
lature. acting Itself Nth experts such
az the state employed i'm these case
or through a commission with Ike
assistance.
Judge Mcpherson also says When
, the statutes were enacted it vas be-.
Level that boy reducing the fare there
would be much more travel For
! month or so this proved 10 boz true
but with the novelty gone the te~tl
mony shows that the increase has
Z been less than . pcf cent and more
nearly per cent.
He says further a. 90 the abolition
! OF passes that the evidence shows Oh,
T passenger revenue is increased Pos
reason thereof less than I Per cent
The maximum freight law involved
= reductions ranging from per cent 10
. 40 per cent ON heavy freight in can
( load lois. The railways occurred
court order temporarily restraining
, the state officials from putting this
act into effect. and on June /. 1907
Frank Haerman, representing the rail.
I roads petitiOned 60 he court 10 make
: this order permanent By mutual
: agreement and az the suggestion cf
/ Judge Mcpherson. who desired TO-
i Ihave practical test. the Ayo-cent
; passenger rate law @as put into effect
ION June ~ 1907. 20 run three months
lat the end OF that period 9oth sides
: agreed To continue the rate in effect
G ias the results obtained had not been
p considered sufficient and the law IL
18TH being enforced.