Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1909-06-23
Statement Made that Business Can
not Be Done at Profit.
JHARGE IT is INVALID
Plea Made it Takes Property Without
Due Process of Law.
STATE CoMBATs THIS VIEW
Attorney General Holds that Facts
Presented Do not show New
Rates Would Cause Loss
TO Companies.
(From a staff Correspondent

LINCOLN, June H.-(Special. THE suits
against the express companies doing bust
ness in Nebraska to prevent them charging
rates other than those rates fixed by the
Sibley law, enacted by the legislature of
1907, were argued before the supreme court
today, Attorney General Thompson appear
ing for the state and Ralph Breckenridge
for the express companies.
The argument was based on the report
Of John J. Sullivan referee appointed by
the court to take testimony and pass on
the legal points involved. The state upheld
that report, while the express companies
objected to 1t.
The attorney for the companies argued
that the law was enacted as a result of
public sentiment which was to the effect
/ that corporations were public enemies. No
investigation of rates was made by the
| legislature which enacted the law and the
! legislature worked in ignorance.
Using the Adams Express company as an
example, he set out that this company
had carried in 1907, $4,000 packages at
rate of 80 cents per package. The company
had done business on such small margin,
he said. as to be insignificant compared
with the profits Of farming and mercan-
! tile enterprises in the state
The attorney general argued that 1t was
not sufficient for the express companies
to show what would be the effect of the
new rate as applied to old business, but
| that the new rates must be applied to new
business and the profit or loss based on
that.
Position of Companies.
! In the CONCLUSION Of his brief Mr.. Breck-
enridge said:
THE controversy and dispute in these
ca ses has resolved itself to the single issue
which has been repeatedly asserted to be:
How shall the known terminal expense
| paid out within the state OF Nebraska pe
! apportioned between the intrastate uansac- ttC9
tions and interstate transactions OF the
| companies?
when the actual cost cannot be found
the apportionment of this expense on the
natural and reasonable basis of what it
costs to handle the transactions them
selves upon the average cannot be sue
cessfully assailed To insist that the ter
mlnal cost shall be charged against the
intrastate and interstate revenues, without
| considering the transactions themselves,
solely for the purpose of finding some way
to figure a profit on a losing local business
cannot be permitted; and 1t therefore ap-
pears by all the comparisons which have
been made, that the Sibley act, which un-
dertakes 10 prescribe the reasonable rates
and charges which the express companies
may collect and receive for the services
they render to their patrons between sta
tions within the state of Nebraska, is an
outlaw, tested by the constitution Of the
United States, for it takes he property and
services Of the companies and their en-
ployes without reasonable compensation.
The rates fixed by this act are inelastic;
ma aCale Of charges
not only for prosperous times, but for
periods Of depression, and gives no consid-
Grafton to the shifting conditions of trade
! and commerce, which the managers of all
successful business enterprises must rec
ogniEs.
The Sibley act denies to the companies
the equal protection of the laws by making
an arbitrary, unjust and radical cut in the
rates and charges of the express COM
panies which was not extended to the
other carriers OF the state and the ap-
peal for a judicial ascertainment of the
unreasonable and confiscatory character
of the rates and charges prescribed is
under a threatened minimum penalty OF
fines which may aggregate 100000 OF
! more; or maximum fines aggregating ST..
! 900 900 900!
Answer of the state.
: In mis- argument Attorney Genera
Thompson held In his conclusion:
'"rhe statute reducing express rates can
. not be set aside confiscatory on test
, mony which fails to show the effect o.
the reduced rates on new business Tn,
defendant having failed to make sucl
, showing, it becomes unnecessary to ex
, anime the testimony offered by the state
"A rate statute should never be Sc
aside without the fullest disclosure Of al
material facts, and the statute reducing
express rates should not be set aside az
confiscatory on testimony of defendant
that IT would be compelled to do Its bust
ness at loss under the new rates wher,
the testimony is based on operations under
the old rates, and evidence Of actual opera
tons under the new rate show a profit
by the use OF reasonable and just meth
DDS for apportioning operating expenses
CONTINUED on Second PaRel