The Birmingham age-herald., 1909-03-09
STATE WILL CONTINUE
 FIGHT FOR LOW RATES
Attorney for the Railroad Companies Says the Decision Sounds Death KneI of Two-cent Rate In
 All the States.

2-cent passenger and maximum freight laws were nullified by decision handed down here today in the United States dis trict court by Judge Smith McPherson of Red Oak, Iowa. As result it is be- lieved there will be quick return in Missouri to Scent fares and Frank flag erman, for the IS companies involved as- serts that today's decision sounds the death-knel of the 2-cent rate in every state in the union.
 Judge McPherson held that both the commodity and passenger laws were con- fscatory and unconstitutional and MT. Hagerman declared 1t is not conceivable that if the 2-cent rate is confiscatory in Missouri, 1t can be compulsory in other states.
 The state, on the other hand, declared emphatically that Missours fight for low CT rates would continue
 Elliott w. Major. the newly elected at torney general who succeeded Herbert S. Hadley to that office and was in court today when the decision read, said an appeal would be taken and that the present legislature would be asked to pass new rate laws that would stand the test of the courts.
 Governor Hadley made a similar state ment at Jefferson City.
 Judge Smith McPherson, who rendered today's decision, is presiding judge of tie United States circuit for the Southern district of Iowa.
 sMcPherson's Opinion
 .sTne question, said Judge Acrherson in his decision, Ifs whether the traffic wholly within the state of Missouri gen. erally referred to in the evidence as To- cal traffic, can be carried under the freight rate statute of 1907 and the pas senger 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 a loss or less than such reasonable profit *as The court has reached the conclusion that upon this question the statutory rates fixed by either and both statutes are not remunerative.
 "The passenger earnings under the g. cent fare law of 19O7 allowing nothing for extra cost over interstate business, gives no return whatever to the Rock Island, St. Louis and Hannibal, Kansas City, Clinton and Springfield, and the Great Western. The other companies will have the following: The St. Louis San Fran cisco, between and per cent; the Santa Fee, between 4 and per cent; the Kansas City Southern. small fraction over ? per cent; the Missouri, Kansas and Texas, between and per cent; the Burling- ton. between 3 and per cent. But all tc at hv oIlo cost for service. But to add the extra cost for freight and passenger, there are no earnings over expenses. This is confiscation under the constitution.
 Cannot Fix Rates.
 'It being a Legislative act, and not a Judicial one, this court cannot fix rates. If it could 2h cent passenger rates would be fixed for the stronger roads. and cents for the oth CTS. But that Is for the legislature acting itself with experts, such as the state em- ployed in these cases, or through a commission with like assistance"
 Judge McPherson also says in the de- cision: When the statutes in question were enacted, it was believed by many that by reducing the fare there would be much more travel. For a month or so this proved to be true. But with
 
 that the increase has been less than per cent and more nearly 1 per cent" He says further to the abolition of passes tn at the evidence shows the passenger revenue Is increased by req son thereof less than 1 per cent
 Maximum Freight Law.
 The maximum freight law involved reductions ran ging from per cent to 10 per cent on heavy freight in car load lots. The railways secured court order temporarily restraining the state officials from putting this act into effect, and on June II, 1907, Frank Hagerman of this city, representing the various railroads, petitioned the court to make this order permanent By mu- tual agreement and at tn suggestion of Judge McPherson who desired to have a practical test, the 2-cent pas senger rate law was put into effect on June II, 1907, to run three months. At the end of that period both sides agreed to continue the rate in effect as the results obtained had not been con 0idered sufficient, and the law Is still being enforced.
 After many delays the cases were finally brought to trial before Judge McPherson. Both sides presented a long array of figures to uphold their claims some of the most prominent railroad men and attorneys appearing. either as experts or counsel. The final, arguments were presented on January 20, last. At that time Gov. Herbert $. Hadley who, as attorney general, had begun the cases, spoke for the state, MT. Hagerman made the principal arr gument for the railroads, and a dozen other attorneys of prominence took part.
 After the decision had been handed down. the views of the attorneys of both sides of the controversy were sought as to what immediate effect the opinion would have While several rail- way attorneys intimated that the indi- &vidual railroads soon would go back to the s-cent passenger rate. none was able to state specifically that this would be