The Oskaloosa herald. (Oskaloosa, Mahaska County, Iowa) 1885-1919, 1909-03-11
TWO CENT FARES
ARE KNOCKED OUT
THE MISSOURI LAW ls AELn LtM.
CONSTITUTIONAL.
a DECISION BY Nc PETERSON
The Maximum Kate Statue is Also De
Otared Unfair As u is coohsea-
tory and Makes Railroad
ing Improbable.
a DECISION By Nc PETERSON
(United Press pispatch.l

Kansas City, Mo-, Mar S.--A notable
decision in favor of the railroads was
handed down to-day by Judge McPher.
son Of the United States district court
in the two-cent fare and maximum
freight rate cases, involving Is Mis-.
souri, lines. The railroads contended
that the rates fixed by the statutes OF
the state were not remuneratiye but
contiscatory and that the enforcement
of the statutes be enjoined. The state
brought PROCEEDINGS to have them en-
forced.
"The question" said Judge McPher-
son in his decision. is whether the
traffic wholly within the state of Mis-.
souri, generally referred to in the evi.
dence as local traffic, can be carried
under the freight rate statute OF 1907
and the passenger fare statute OF 1907
at such profit as will give reasonable
return after paying expenses upon the
investment, or whether such traffic is
carried at a 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 re.
muneratiye,"
Six Per Cent. Not Too Much.
"The supreme court during the pres
ent year in the case of City of New
York VS.. Consolidated Gas Company
Of New York decided that six per cent.
was fair and right to be given to the
owners upon the true valuation. My
opinion is that while gas plant is in
some respects different from a rail-
road. railroad property, properly
built and properly managed should
over and above expenses make a re-
turn Of six per cent. per annum. And
considering all the evidence, the eVi-
dence fairly shows that all of these
roads were properly and economically
built and are being properly and eco
nomically managed, and that after pay
ing the expenses for maintenance and
operation, there is less than six per
cent of returns, and not more than
three per cent. upon any OF them, and
as to some Of them a deficit, taking
the property as above stated within
the state of Missouri at its fair yalua-
ton.
1T is absolutely necessary that many
trains, both passenger and freight, do
both a local and interstate business
Even the fast trains stopping at but
few stations in the state carry state
passengers between such stations. And
the same is true as to freight trains
carrying freight both in carload and
less than carload lots,
"The valuation Of the roads has
been fixed by the court as shown by
the findings of fact. The entire state
and interstate earnings of each Of the
roads within the state is known and
fixed to certainty. The expenses are
known and fixed. To apportion these
expenses must be done according TO
one of the two theories, and the cor
rect theory is that according to reye-
nue..
Deficit or Small Earnings.
These computations show as to the
commodities coyered by the freight rate
statute of 1907, that with two roads,
the st. Louis & Hannibal and the Bur-
hngton, allowing nothing for extra
cost, there is deficit and with all
other companies less than two per
cent. But with, the extra cost added,
the deficit for the two companies Is
much greater, and the other compan-
les show a deficit.
The passenger earnings under the
twocent fare law of 1907, allowing
nothing for extra cost over interstate
business, give no return whatever to
the Rock Island, st. Louis & Hannibal,
Kansas City, Clinton & Springfield
and the Great Western The other
companies will have the following
The St Louis & San Francisco, be-
tween three and four per cent; the
Santa Fe, between four and Eve per
cent; the Kansas City Southern, a
small fraction over two per cent; the
Missouri, Kansas & Texas. between
two and three per cent; the Burling-
ton, between three and four per cent.
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 confiscation under the consti-
tuition.
1T being legislative act, and not q |
judicial one. this court cannot fix
rates. II it could, 21k-cent passenger
rates would be fixed for the stronger
roads and three for the others. But |
that is for the legislature. acting itself |
with experts, such as the state en-
ployed In these cases, or through
commission with like assistance
Travel Increase Small.
Judge Mcpherson also says in the
decision: when the statutes in ques.
tion were enacted. il 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 the novelty gone, the testi-
mony shows that the increase has
been less than three per cent. and
more nearly one per cent"
He says further as to the abolition
of passes that the evidence shows the