Los Angeles herald., 1909-03-03
w AsH1NGToN, March a.-The in

Nv terstate commerce commission
W today decided two points in the
complaint filed by the city of Spokane
against the Northern Pacific. the Great
Northern and the Union Pacific, which
were:
First-That the rates from eastern
destinations to Spokane were higher
than to Seattle, more distant point.
Second-That the rates to Spokane
were inherently unreasonable.
On the first point defendants main
tanned that water competition COM
PEELED them to charge the rates in eff
feet to Seattle, and that they might
charge a higher rate to spokane with
out violating the long and short haul
provision or without discriminating
against Spokane under the law.
The commission suStains the defend-
ants in this respect and holds the ratss
to Spokane, although higher than to
Seattle, are not unlawful.
On the second point the commission
sustains the claim of the petitioner
and holds that the rates from eastern
destinations to Spokane are unjust and
unreasonable. 1t reduces class rates
from st. Paul to Spokane 16 2-3 per
cent and makes substantially the same
reduction from Chicago to Spokane.
Rates east of Chicago are not dealt
with
Means Many Changes
The decision, if applied in principle
to all commodities and to all interior
points, must work a revolution in rates
from eastern points of origin to all in
terror transcontinental territory, and
in that view 1t Is one of the most far
reaching decisions ever rendered by
the commission.
The case has been under considera-
tion about year and half
For many months the commission
has been endeavoring to settle the in
tricate points involved. but not until
few days ago was an agreement pos
sible. The unanimous opinion of the
commission was prepared by Commits
sioner Prouty. 1t is pointed out that
nearly all commodities to the Pacific
coast move under commodity rates,
and these were the principal subjects
of complaint upon the part of Spokane.
Rates from all points on the Missouri
river to Seattle are the same. while
rates from the same points to Spokane
usually are considerably higher than to
Seattle, and they increase as the points
of origin lie farther east.
Articles Enumerated
complaint referred to thirty-two ar
ticles. The decision says that the COM
mission can fix the rates only upon the
articles enumerated. The cut in rates
ordered is horizontal and amounts in
some instances to 80 per cent; in other
cases to only or per cent.
In the hearing the cost of reproduce
ing the properties of the Great North
ern and Northern Pacific, their financial
history, their present capitaliza ton and
their earnings in recent years were
fully considered.
The commissions findings in brief fol-
low:
l. The system of transcontinental
rates now in force applies lower trans.
portation charges from points of origin
upon the Missouri river and east to Pa
cific coast cities than are applied TO
intermediate interior points so held that
this scheme of rate making has been
caused by water competition between
the Atlantic and Pacific coasts and that
the maintenance of the lower rate TO
the more distant coast point is not of
necessity a violation of third or fourth
sections since water competition creates
a dissimilarity of circumstances and
conditions between the interior and
coast.
Difference Justifies
2. Water competition may Justify
difference in carload minimums and in
the right of combining different COM
modities at the carload rate as well as
in the rate itself but carriers should
be prepared to justify such preference.
3. In determining what are reason
able rates between two points, neither
that railroad which can afford to handle
traffic at the lowest rate nor that
whose necessities might justify the
highest rate should be exclusively cor-
sidered. Rates must be established
with reference to the whole situation.
4. Certificates issued against the ore
lands formerly owned by the Great
Northern Railway company cannot be
considered in determining what are
reasonable earnings for that company
at the present day.
5. The Great Northern Railroad
company has in the last year distribut-
ed its stock issues among its stock
holders at par from time to time, al
though the market value of the stock
was often above par. without express
ing any opinion upon the legality or
Iropriety of this practice, it is held that
this fact. at this time, can have no
bearing upon the earnings to which
that company is entitled.
6. Neither can the capital stock of
the Great Northern Railroad company
be reduced for the purpose of deter
mining what its fair earnings should
bo by the amount of that stock which
! (Continued on Page. TwO)