The evening times. [volume] (Grand Forks, N.D.) 1906-1914, 1909-03-08
DECISION IS
IN FAVOR Of
RAILROADS
Judge Mcpherson Decides Not.
able Two Cent Fare and
Maximum Freight Rate
Case INVOLVED EIGHTEEN
MISSOURI RAILROAD LINES

MISSOURI RAILROAD LINES
Railroads Contended That Rates Fix.
ed by State Statutes Were Not Re.
munerative and Confiscatory and
Wanted Enforcement Enjoined
Kansas City, Mo-, March s.-A
notable decision in favor of the rail-
roads was handed down today by
Judge Mcpherson, of the United
states district court, In the two-cent
rare and maximum freight rate cases,
involving eighteen Missouri lines.
The railroads contended that the
rates fixed by the statutes Of the state
were not remnuerative but confisca-
tory, and that the enforcement of the
statutes be enjoinei. The state
brought proceedings to have them en-.
forced.
THE question:" said Judge McPher-
son In his decision, lis whether the
traffic wholly within the state of Mis-
souri, generally referred to in the evi-
/ dence as local trafflc. can be carried
under the freight rate statute of 1907
and the passenger fare statute of
1907 at such profit as will give a rea-
sonable return after paying expenses
upon the investment, or whether such
| traffic is carried 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."
Conclusive Reasons.
In giving the reasons for such con-
clusions. the decision says:
THE unquestioned and undoubted
rule Is that there is presumption
both Of fact and of law in favor of
the validity Of every legislative en-
actment. The railway companies
have the burden of removing this pre-
sumption, 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. The authorities
upon this question form long and
unbroken line, with the single excep-
tion Of the majority opinion in the
Pennsylvania case decided year ago.
(68 Att. Rep. 676.) And that one
authority 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
immaterial. Much was said in ar
gument as to the message of Cover
nor Hughes of New York two years
ago in declining to approve the two
cent fare statute Of that state. Gov
ernor 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 relations of governor to pro-
posed legislation, and those of a court
to legislation consumated. are entire
~ different.
Most of laymen and many lawyers
believe that the question Is whether
the railway company as a 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
including taxes and interest, with rea-
sonable dividends to the stockholders,
that state rates for state business
must stand. OF course no one be-
lieves this who has given the slight
est attention to the question. That
precise question was before, and was
decided by Justice Brewer, and af-
hrmed by the supreme 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 bal
ance does not leave sufficient to
pay a reasonable return, the law
is invalid. And II the railroad sys-
tenn Of any company is earning more
than reasonable return by reason
Of interstate rates, which affect the
people many times more than local
rates, and IL such interstate rates are
too high, congress either acting alone
or through commission must make
the corrections.
Less Than Six Per Cent.
"The supreme court during the
present year In the case Of City iof
New York VS.. Consolidated Gas COM
pany OF New YORK, decided tnat SIX
per cent was fair snd right to be
given to the owners upon the true
valuation. My opinion is that while
gas plant Is in some respects diff
ferent from railroad. that a rail-.
road property. properly built. and
properly managed. should over and
above expenses make return of six
per cent. per annum. And consider
ing ali the evidence. the evidence
fairly Shove that all Of these roads
were properly and economically built
and are being properly and economi-
cally managed. and that after paying
the expenses for maintenance and OPP
GRAFTON. that there is less than ak
per cent. of returns, and not moro
than three per cent. upon any of them
and as to some Of them deficit. TAX