The citizen-Republican. (Scotland, Bon Homme County, S.D.) 1???-19??, 1909-03-11
DECISION RENDERED
AGAINST MISSOURI
2-CENT FARE LAW
Federal Judge Declares
Missouri Statute Is
Confiscatory.
NO SURPRISE TO HADLEY.

NO SURPRISE TO HADLEY. \:
Jefferson City, Mo-, March To-
Governor Hadley did not appear Z
surprised when informed that \
the 2-cent passenger fare law
had been knocked out by Judge
Mcpherson. OF the United States
circuit cour of Kansas City.
~ All / can say at his time,
said he governor, "is that the
decision is not a correct one It \
does not end the fight, however.
The state will surely appeal to =
the United States supreme court.
: OF course this question is in the
hands of the attorney general"
Kansas City. Mo-. March 10-A not
able decision in favor of the railroads
was handed down today by Judge Nc
Pherson, OF the United States district
court. in the two-cent fare and maxi
mum freight rate cases, involving Is
Missouri lines. The railroads contend.
ed Ihat the rates fixed by the statutes
of the state We're not remunerative, but
confiscatory, and that the enforcement
OF lie statutes be enioined. The state
brought proceedings TO a them en-
forced.
"The question: said Judge McPher-
SON, in his decision, sis whether the
traffic wholly within the state Of Mis-
souri, generally referred to in the evil
n as local traffic, can be carried
under the freight rate statute of 1907
and the passenger fare statute Of 1907
at such profit as will give a reasonable
return after paying expenses upon the
investment, or whether such traffic is
carried at q loss or less than such rea-
profit. " y " The court has
reached the conclusion tina upon this
question, the statutory rates fixed by
either n both statutes are not re-
mu~nerative.
import of Decision.
After the decision had been handed
down the views of attorneys on both
sides of the controversy sought as to
what the immediate effect the opinion
would have. While several railway at
torneys intimated individual railroads
would go back to the Seem passenger
rate, none was able to state specifically
this would be done, or II done, when
action will be taken.
Frank Hagerman made the following
statement for various railroads.:
The maximum freight laws have
never been enforced because temporary
injunctions We're granted when they be-
came effective. Therefore the situa-
ton regarding them will in the future
be the same as in the past. Two-cent
fare law has, however, been enforced.
FROM the decision of the court the
state may appeal to the supreme court
OF the United States. Pending that APP
peal the railroads will not be bound by
the law, and may at any time adopt
and put in force the old rate by pub
fishing the new schedules as required
by law.
The 2-cent rate is subject pending
litigation in Minnesota, South Dakota.
Nebraska and Kansas. 1t is not con-
ceiVable that a rate confscatory in
OF such states. What, If anything, will
be done in other states has not been
determined. In view Of thorough in
vestlgations and decisions in Pennsyl-
Vanla and Missouri cases., it is doubtful
whether any state will longer attempt
to keep in force the 2-cent fare law.
McPherson's Reasons.
In giving the reasons for such con-
cluslonS, the decision says: The I'M
questioned and u~ndoubted rule is that
there is a presumption, both. of fact
and OF law, IN favor of the validity Of
every Legislative enactment. The rail-
way companies have the burden of re-
moving this presumption, and howing
that the statute clearly, as some courts
say. palpably, n others say, beyond
a reasonable doubt, that the statute is
invalid. In these cases the court has
recognized this rule. The authorities
upon this question form a long and UNI
broken line, with the single exception
OF the majority opinion in the Pennsyl-
vania case. decided a year ago. (6s..
~ SSP' wv ALA Iki"i olle dulIlOT-
ity is not persuasive.
All testimony and bearing
upon the question as to what consider
alton the Legislature of Missouri gave
10 these enactments is utterly imma-
ter1al. Much was said in argument as
to the message OF Governor Hugles. OF
New York, two years ago in declining
to approve the 2-cent fare statute Of
that state. Governor Hughes had the
moral courage to veto a measure Of
| DODllAr favor hpcanGn au he ha1Jn,,@Y
the question had not been fully con
sidered. But the relations of a COVER
nor to proposed legislation. and those
Of a court to legislation consummated,
are entirely different.
Most Of the laynen and MANY law
yers believe that the question is wheth-
er the railway p as & system Is
earning sufficient revenue upon the
value of the property of the system.
They believe that if the Burlington
Santa Fe, Wabash, or any other rail-
road system is earning such money as
will pay all charges and expenses. in
Guiding taxes and interest, with reason
able dividends to the stockholders. that
state rates for state business must
stand. Of course no one believes this
who has given the slightest attention
to the question. That precise question
was before, and was decided by, JUS
tice Brewer, and affirmed by the SUI
preme court in the Nebraska case of
Smyth VS.. Ames. The only question is
as to Missouri rates, less expenses
properly charged against the same. And
if this alance does not leave suff-
Gent to pay a reasonable return. the
law is invalid. And If the railroad sys-
tenn of any is arnin more
than a reasonable return by reason of
interstate rates, which affect the peo-
pie many times more than local rates
and If such interstate rates are too
high, congress, either acting alone or
through a commission, must make the
correction.
The supreme court, during t~he9pres-
ent year, in the case Of City of New
York VS.. Consolidated Gas of
New York, decided that 6 per cent was
fair and right to be given to the own
eGs upon The true valuation. My opin-