The Norfolk weekly news-journal., 1909-03-12
Body BLOW 20 2-cent Fares.

roads was handed down today by
Judge Mcpherson, OF the United States
district court, in the two cent fare and
maximum freight rate cases, involving
eighteen Missouri lines. The railroads
contended that the rates fixed by the
statutes OF the state were not remuner.
alive but conllscatory, and that the en-
forcement of the statutes be enjoined
The state brought proceedings TO have
them enforced
THE question" said Judge Nc.
Pherson in his decision, lis whether
the traffic wholly within the state of
Missouri generally referred to in the
evidence 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 a reasonable
return after paying expenses upon the
investment or. whether such traffic Is
carried at loss or less than such rea.
sonable 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
illusions the decision says: THE UNI
questioned and undoubted rule is that
there Is a presumption both of fact
and of law In favor of the validity Of
every legislative enactment. The rail
way companies have the burden of re-
moving this presumption, 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
the Pennsylvania case decided year
ago. (6S Att. Rep. 676) And that one
authority is not persuasive.
Speaks of Governor Hughes.
"Al 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 as 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 because as
he believed the question had not been
fully considered. But the relations of
governor to proposed legislation, and
those of a court to legislation consum-
mated, are entirely different.
The Interstate Question.
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 in
GLIDING taxes and interest, with reason
able dividends, to the stockholders
that state rates for state business must
stand OF course no one believes this
who has given the slightest attention
to the question. The precise question
was before, and was decided by, Jus
tice Brewer, and affirmed by the su
preme court in the Nebraska case O
Smyth VS.. Ames. The only question
is as to Missouri rates, less expense:
properly charged against the same
And if this balance does not leave SUI
ficient to pay reasonable return, thu
law is invalid. And if the railroad sys
TEN of any company is earning more
than reasonable return by reason o
interstate rates, which affect the pee
pie many times more than local rates
and if such interstate rates are to-
high, congress acting alone or through
commission must make the correc
tons.
6Per Cent Needed, Earning Less Than
The supreme court during the pres
ent year in the case of City of New
York VS.. Consolidated Gas Company o
New York, decided that six per cen
was fair and right to be given to tn
owners upon the true valuation. M
opinion is that while the gas plant
in some respects different from a raj
road, that railroad property, properl
built, and properly managed, shout
over and above expenses make re
turn of six per cent per annum An
considering all the evidence, the ey
dence fairly shows that all of thes
roads were properly and economical
built and are being properly an
economically managed, and that afte
paying the expense for maintenance
and operation that there Is less tina
six per cent of returns, and not NOR
than three per cent, upon any of thel
and as to some of them deficit, takin
the property as above stated with
the state of Missouri at its fair valu;
ton. And this is SO without referenc
to bonds, because in no case do tn
bonds bear six per cent interest. BIT
taking the bonds into consideration
there is still not to exceed three pc
cent returns, and many cases d.
u, Ter considering all debts an
credits, upon the true valuation fc
the state huSinpSS There is no ey