Los Angeles herald. [microfilm reel] (Los Angeles [Calif.]) 1900-1911, 1909-03-09
TWO-CENT RATE
IS NULLlFIED BY
SUPREME COURT
MlSS0URpS PASSENGER AND
FREIGHT LAWS VOID
DECISION MAY SOUND kNELL OF
ALL SIMILAR ACTS
Federal Judge Mcpherson Declares
Statute Is confIscatory and un-
constitutionai--AppeaI Is
Threatened

IL sourfs 2-cent passenger and
~ freight laws were nullified by a
decision handed down here today in the
federal district court by Judge. Nc
Pherson.
AS a result 1t is believed there will
be a quiet return In Missouri to 3-cent
fares.
Frank Hagerlnan, counsel for the
eighteen companies involved, declares
the courts ruling sounds the death
knell of the 2-cent rate in every state
in the Union.
Judge Mcpherson held that both the
commodity and passenger laws were
confiscatory and unconstitutional.
The state, on the other hand, de-
clared emphatically that Missourrs hight
for lower rates would continue.
Attorney General Major said an ap-
peal would be taken, and that the pres
ent legislature would be asked to pass
a new rate law that would stand the
tests of court
Governors Opinion
Governor Hadley made a similar
statement at jefferson City.
"All / can say at this time," said the
governor, sis that the decision is not n
correct one. 1t 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" Commenting at
some length on the decision Governor
Hadley said:
while the decision of Judge Nc
Pherson is simply the opinion of one
Judge 1t must be accepted as the law
until the questions involved are SUB
mitted to the supreme court OF the
United States. That I think the de-
cision is wrong goes without saying.
"The claim that the rates fixed by
the freight and passenger rate laws
were unreasonably low and therefore
confiscatory was based upon expert tes-
timony as to how the common expenses
could be divided between state and IN
terstate traffic.
Denounees Theory
"The theory of the railroad experts is
that the expenses common to the state
and interstate traffic should be divided
In proportion to the revenue produced
by the two classes of traffic with an
added increase of cost for the doing OF
state business.
"This theory seems to me manifestly
wrong and absurd, as its necessary and
logical result Is that the higher the
rates and the greater the revenue pro-
duced by the state traffic the larger
would be the amount or expenses as
signed to the traffic"
Judge Mcpherson In his decision said
',rhe question Is whether the trafhc
wholly within the state of Missouri gem
orally referred to in the evidence as
local traffic can be carried under the
freight rate statute of 1907 and the
passenger fare statute of 1907 at sucn
profit as will give a reasonable return
after paying expenses upon the invest,
A. 1. aalt fro n
at loss or less than such reasonable
profit. The court has reached
the conclusion that upon this question
the statutory rates fixed by either and
both statutes are not remunerative.
In giving the reasons for such conclu-
sions the decision says:
''The unquestioned and undoubtec
rule is that there is presumption both
of fact and of law in favor or the
validity of every legislative enactment
',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 beyond a reasonable DOUBT,
that the statute is invalid. In these
cases the court has recognized this rule
Cites Many Authorities
'.The authorities upon this question
form a long and unbroken line. with
the single exception OF the majority
opinion in the Pennsylvania case de-
cided year ago. And that one author
ity is not persuasive.
"All testimony and argument bear
ing upon the question as to what con-
sideration the legislature of Missouri
gave to these enactments IS utterly I'M
material. Much was said in argument
as to the message of Governor Hughes
of New York two years ago In declin-
ing to approve the 2-cent fare statute
OF that state. Governor Hughes had
the moral courage to veto g. measure oi
popular favor because he believed the
question had not been fully considered
But>the relations of a governor to pro-
posed LEGISLATION and those of court
to legislation consummated are en-.
tirely different.
Most laymen and many lawyers be-
lieve that the question is whether the
railway company as a system is earn
ing sufficient revenue upon the value
of the property of the system. They
believe that If the Burlington, Santa
lre, Wabash or any other railroad sys'
item is earning such money as will pay
all charges ana expenses, including
taxes and interest. with reasonable div
idends 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. Justic'
Brewer and affirmed by the supreme
court in the, Nebraska case of Smytf
VS. Ames."
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