The Black Hills union and western stock review. [volume] (Rapid City, S.D.) 1904-19??, 1909-03-12
THE RAILROADS
won IN MISSOURI
FEDERAL JUDGE MCPHERSON DE.
CIDED AGAINST MISSOURI'S
TWO CENT RATE LAW.
STATED THAT THOROUGH TEST
SHOWED LAWS EFFECT TO
BE CONFIsCATORY

SHOWED LAWS EFFECT TO
BE CONFIsCATORY
Kansas City, March s. Judge
Smith Mcpherson of the United
States district court has handed
down his decision in the two-cent
rate law The decision practically
annuls the provisions of that law.
Frank Hagerman, leading attor-
ney for the railroads in the case,
said today: 1.-THE maximum freight
rates have never been enforced on
account of an injunction secured by
the railroads. In the two-cent rate
cases the rate has been enforced,
but now the roads may establish
higher rates by giving legal notice.
The two-cent rate is now subject to
litigation in Nebraska, South Dako-
Ia. Minnesota and Kansas. 1t is
not conceivable that If the rate Is
confscatory in Missouri that is can
be compensatory in such states. In
view of the thorough investigation
and decisions in Pennsylvania and
Missouri, it is doubtful if any other
state will attempt to maintain "a
two-cent rate law. Oklahoma has
made provision for a two-cent rate
law in it's constitution, which may
make difference in that state.''
Kansas City, Mo-, March. s.-A
notable decision in favor of the
railroads was handed down today
by Judge Mcpherson, of the Unit
ed States district court, in the two
cent fare and maximum freight rate
cases, involving eighteen Missouri
lines. The railroads contended
that the rates fixed by the statutes
Of the state were not remunerative
but confiscatory, and that the en-
forcement Of the statutes be en-
Joined. The state brought pro-
ceedings to have them enforced.
1.-THE question:" said Judge Nc
Pherson in his decision, sis whether
the traffic wholly within the state
OF Missouri generally referred to in
the evidence as local traffic, can be
carried under the freight rate stat
ute of 1907 and the passenger fare
statute of 1907 at such profit as
will give reasonable return after
paying expenses upon the invest
ment, or whether such traffic is
carried at loss or less than sucn
reasonable profit.
The court has reached the conclu-
sion that upon this question the
statutory rates fixed by either and
both statutes are not remunerative."
In giving the reasons for such
conclusions the decision says: 1.-The
nnquestioned and undoubtful rule
10 that there is a presumption both
Of fact and of the law in favor of
the validity of every legislative en-
actment. The railway companies
have the burden Of removing this
presumption, and showing that the
statute clearly, or as some courts
say, palpably, and others say, be-
yond reasonable doubt, that the
statute is invalid. In these cases
the court has recognized this rule.
The authorities upon this question
from long and unbroken line, with
the single exception of the majori-
ty opinion in the Pennsylvania case
decided year ago, (6S Att. Rep.
e76). And that one authority is
not persuasive.
'All testimony and argument
bearing upon the question as ito
what consideration the legislature
Of Missouri gave to these enact
mepts, is utterly fmmaterial. Much
was said in argument as to the mes
cage OF Governor Hughes, Of New
York, two years ago in declining
to approve the two-cent fare statute
Of that state. Governor Hughes
had the moral courage to veto a
measure of popular favor because
as he believed the question had not
been fully considered. But the re-
lations of a governor to proposed
legislation, and those of a court to
legislation consummated, are en-
tirely different.
Most of laymen and many law
yers believe that the question is
whether the railway company an
. system is earning sufficient reve.
nue. upon the value of the property
Of the system. They believe that il
the Burlington. Santa Fe, Wabash
or any other railroad system is
earning such money as will my al
charges and expenses including
taxes and interest, with reas nablt
dividends to the stockholders tina
state rates for state business mus
stand. OF course. no one tnEeve
this who has given the s1i-htest
attention to the question. Tha
precise question was before, si' va
decided by Justice Brewer - ~
hrmed by the snreme court p
fchras' So
The mi, nuesrien is rs 70 u SoRs
rates. less expenses. properly charge
against the same: And if this bal
ance does not leave sufficient TO pa
. reasonable return, the law is In
valid. And if the railroad syster
Of any company is earning NOR
than reasonable return by reaso
~ Of interstate rates. which AFFECT tn
people many times more than locs
~ tend 4 such ,interstate rat.