Santa Fe new Mexican. [volume] (Santa Fe, N.M.) 1898-1951, 1909-03-08
MISSOURI RATE LAW DE-
CLARED UNCONSTITUTIONAL
Before Legislature Can Lower Passenger
or Freight Charges 1t Must De-
termine That Railway Earn.
ings Are Excessive.

Kansas City. Mo, March S.--A not
able decision in favor of the railroads
was handed down today by Judge Nc
| Pherson of the United States Dis
trict Court, in the two-cent fare and
maximum freight rate cases, inyoiv-
ing eighteen Missouri lines. The rail-
roads contend that the rates fixed by
| the statutes of the state were not re-
muneratiye but contlscatory, and that
| the enforcement of the statues be en-
Joined. The state brought proceed
! ings to have them enforced.
"The question" said Judge Nc
Pherson in his decision, "is whether
the traffic wholly within the state OF
Missouri generally referred to in the
evidence as local traffic. can be car
ried under the freigE rate statute OF
1907 and the passghger fare statute
of 1907 at such pfofit as VIII give a
reasonable retlph after paying ex-
penses 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 remunerative."
In giving the reasons for such con-
clusions the decision says: The un-
questioned and undoubted rule is that
ther is presumption both of fact
and of law in favor of the validity or
every legislative enactment. The rail-
way companies have the burden OF re-
moving this presumption, and show
ing that he statute clearly, or as some
courts say, palpably, and others say,
beyond reasonable doubt, that the
statute is invalid. In these cases the
court has recognized this rule. The
authorities upon this question form a
long and unbroken line, with the sin
gle exception of the majority opinion
in the Pennsylvania case decided "a
year ago. (6S Alt. Rep. G7G) 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 argu-
ment to the message of Governor
Hughes. of New York two years ago
| in declining to approve the two-cent
fare statute of that state. Governor
Hughes had the moral courage to
veto a measure of popular favor be-
cause, as 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 of laymen and many lawyers
believe that the question is whether
the railway company as 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 in
| Guiding taxes and interest, with rea.
sonable dividends, to the stockhold
ers, 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 al
firmed 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 balance
does not leave sufficient to pay a rea
sonable return, the law is invalid
! And if the railroad system of any
company is earning more than a rea
sonable 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 OF
through commission must make the
corrections.
"The Supreme Court during the
present year in the case Of the City
of New York VS.. The 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. Ny opinion is that
while gas plant is in some respects
different from railroad that rail
road property, properly built, and
properly managed, should over and
above expenses make a return of six
per cent per annum. And considering
all the evidence, the evidence fairly
shows that all Of these roads were
properly and economically built and
are being properly and economically
managed, and that after paying the
expenses for maintenance and opera
tion that 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
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