The Elk Mountain pilot., 1910-10-20
NOW BEFORE SUPREME COURT
AS TO VALIDITY; ALSO
FREIGHT LAWS.
AFFECTS EVERY STATE
FEDERAL COURTS JURISDICTION
OVER STATES, AND RAILROADS.
JUST REMUNERATION.


ing every point. attorneys for the
state OF Missouri and the railroads
therein began argument before the
Supreme Court as to the validity of
the 2-cent passenger rate, and maxi
mum freight rate laws of common
wealth.
II is claimed by counsel that the
issues in controversy will affect rail
way Legislation in nearly every state
OF the Union. The case includes ques-
tions of Jurisdiction of federal courts
over state legislation and the proper
basis OF arriving at the remuneration
guaranteed the railroads under the
federal constitution.
The Federal Circuit Court held the
laws were unremunerative and en-
Joined their enforcement.
The arguments were opened by
Frank Hagerman for the Chicago.
Burlington & Quincy. He maintained
that the valuation OF the property de-
voted to intrastate business as distin.
guished from interstate business was
IN the same ratio that earnings from
the carriage OF intrastate freight and
passengers bore to the earnings from
interstate business In the state. He
argued that II costs more to carry on
local than interstate business.
President James McCrea OF the
rennsylvanis Railroad Company urged
the necessity of the proccsed in
expenses In wages incurred by the
roads during the last ten years. aggre-
eating thirty.three per cent. in the
case Of the Pennsylvania and the In
creased cost OF maintenance OF serv.
ice.
The witness said that the results OF
the constant increases in the business
of the Pennsylvania through n long
period Of years had been distributed
either through q reduction In rates. In
creases In wages and amounts paid
for material, or by reinvestments in
the property not capitalized.
He expressed the belief that prop
erty of the magnitude of the Pennsyl-
vania railroad rendering service sat
isfactory to Its patrons and deriving.
As 1t did derive in 1909. net earnings
to the amount OF only Sol per cent
OF the amount actually Invested in the
property" was entitled to fair consid
Grafton by the people. and he coulo not
understand how rates that secured
such results could be regarded as
too high.
The hearing was conducted before
the full commission. Chairman Martin
A. Knapp presiding.
At the opening OF the hearing Fran
els l. Goaten. general counsel Of the
Pennsylvania Railroad Company. said
the expenses OF the eastern lines.
through increases IN wages and cost
of supplies. recently had been in
creased approximately $34,Oo0.0oo a
year.
President McCrea of the Pennsyl-
vania stated that in the last ten or
twelve years the company's lines east
of Pittsburg had expended $2G2.000.-
900 on improvements.
Notwithstanding the increased cost
Of living. said Mr.. McCrea, the $4,000
stockholders of the Pennsylvania rail
road. one-half OF whom were wcmen
and children were receiving the
same amount in dividends now as
they had received during the last ten
years. although their expenses had In
creased proportionately with those of
employees.
Mr.. McCrea declared: What this
country needs and what has been done
80 much to develop 1t are the trans
portation facilities. At this time
feel that improvements are very badly
needed. Any scheme of rates that
does not provide for that. treating the
railroads as broad proposition. will
fall short of what the country abso-
lutely requires"
Mr.. McCrea expressed the opinion
that any properly capitalized COM
pany economically managed should
earn a minimum of seven per cent.
particularly. on account OF the in
creased cost of living. He said 1t was
formerly the Pennsylvania's policy to
put dollar in improvements for ev-
cry dollar paid in dividends, but un'
fortunately we have not been able to
continue that policy"