Daily Arizona silver belt., 1909-03-17
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AGAINST THE 2-cENr FARE

The 2-cent fare legislation Of the group of states centering about St. Louis and Kansas City has been given a serious judicial setback by the adverse decision of Judge McPherson, of the United States District Court, on the Missouri statutes reducing freight rates and passenger fares. It will be remem- bered that when application was origi- nally made to him for an injunction against the 2-cent rate, Judge McPher- son was not satisfied with the ex parte showing made by the railroads, and at his instance the lower rate was put into effect experimentally. It has now been tried for more than year in Missouri, and the judgment of the court is that it fails to yield an adequate return upon in the intrastate investment. On this point Judge McPherson says:
 "The passenger earnings under the 2.cent fare law of 1907, allowing noth- ing for extra cost over interstate busi. ness, give no return whatever to the AhONh Aoihhhs N'N iNpuAo ahu Kansas City, Clinton and Springfield, and the Great Western. The other com. panios will have the following: The St. Louis and San Francisco, between 2 and per cent; the Santa Fe between 4 and per cent; the Kansas City Southern, small fraction over 2 per cent; the Missouri, Kansas and Texas between ana 3 per cent; the Burling ton between and per cent But all this is arrived at by allowing no extra cost of service. But to add the extra cost for freight and passenger, there are no earnings over expenses. This is con. fscation under the constitution. v
 The attorneys for the state maintain that it is not fair to assume that the intrastate service is more expensive than through business, and they object also to the method adopted by Judge McPherson for ascertaining the propor- tion of the total value of the railroad property upon which the 2-cent intra- state rate must yield reasonable re- turn. But as to these matters, Judge McPherson accepted the best available railroad and judicial authorities, and his decision rests upon most careful consideration of all the factors involved. Among the facts brought out in the course of the hearing was that the in crease In traffic due to the lower rate was less than 8 per cent and the in- crease in revenue through the abolition of passes was less than per cent.
 The opinion, though 1t may be con tested by the state, is expected by coun- sel for the railroads to lead to the ever- tual overturn of the 2-cent rate in the neighboring states of Nebraska, South Dakota, Oklahoma and Minnesota. On receipt of the news of the decision, the Kansas senate made an adverse report on 2-cent fare bill which had already passed the house. Most of the southern states have retreated from their atti- tude favorable to the 2-cent rate, though is still in fofrce in Virginia. In Penn sylvania the 2-cent rate has been judici- ally anulled. In New York it was vetoed by Governor Hughes, and is now, we believe, under consideration of the public service commission It is still in fore, in Ohio, Michigan and some other states On the whole, the case of the 2-cent fare, save in thickly set tied port ions of the country, where it has beer voluntarily established, ap pears to be going against the legislative theory that two cents a mile is prof. itable charge for local passenger traf- fic.