Arizona republican., 1910-06-30
THE HILL ROADS.

lished as reasonable on an entirely different consideration
 THE HILL ROADS.
 "The scheme of rates proposed by 1 the Great Northern and Northern Pa | cific for the transportation traffic 1 from St. Paul and Chicago to Spo- kane made by taking 75 per cent oi the terminal rates. is founded upor ! facts which do not exist, and con- strueted on a theory which cannot be i approved by the commission"
 The rates established for the future f are materially lower. approximately 2 per cent in both class and commodi- ties, but are not effective immediately The defendant lines maintained that if material reductions were made, the result would be disastrous, in view of the reductions that necessarily would have to be made elsewhere. In ad- dition, the Northern Pacific showed that since the first decision in the Spokane case in the spring of 1907, it had expended approximately s93,000,- 900, and the Great Northern showed that it had expended s75,000.000 in betterments.
 The commission says: "These sums would in each case equal approxi- mately 25 per cent of the entire cost of reproduction as found by the com mission, and would, if not accompa- nied by increased earnings, perhaps justify the claim to greater returns. An examination of the nature of these expenditures does not however, lead to the conclusion that they have any legitimate bearing upon the decision.
 In the Nevada and Arizona cases, including the Sacramento. and Reno case against the Southern Pacific, the railroad commission of Nevada against the Southern Pacific, and the Mari copa County Commercial club against the Santa Fe and other carriers, the decisions were prepared by Commis- sioner Lane, and in each case a heavy reduction of class rates was ordered, some reductions being as high as B 1-3 per cent.
 RATES WITHOUT PRECEDENT.
 The commission finds that the ex- isting rates were practically without precedent or parallel in the United States. The average rate per ton per mile of all ten classes from Sacra- mento to Reno-9.16 cents-is an un- precedented figure. The class rates between Sacramento and Reno were reduced approximately 30 per cent, the rate on first-class freight being lowered from $1.29 per hundred pounds to S5 cents. Similar reductions of class rates were made from Sacramen- to to other points in Nevada and Utah.
 In the case of the railroad commis- sion of Nevada against the Southern Pacific and other carriers, the com mission condemns the existing west bound class rates from eastern points to Nevada, declaring them the highest main line rates found in the United States For carrying a car load of first-class traffic containing ten tons from Omaha to Reno, the Union Pa cific and Southern Pacific lines charge SS5S If the same car load goes 154 miles farther to Sacramento, the charge is but $6O0 The first-class rate to the more distant point of Sac ramento is 8 per hundred pounds, and to the nearer point of Reno s4.29 per hundred pounds.
 r'or the same carload of freight that originates at Denver, 800 miles west of Omaha, the same rates to Reno and Sacramento apply. For freight that originates at Boston, 1,700 miles east of Omaha, the rates are the same The commission finds that only 25 per cent of the traffic into Reno from the east originates east of Chicago, while 75 per cent originates between Chicago and Denver.
 DIVISION OF EARNINGS.
 Turning to the division of earnings between the carriers of traffic from east of Reno, the commission finds the lions share accrues to the South ern Pacific It is significant, as in- dicated in the opinion. that the lines east of ogden, Utah, receive exactly the same divisions out of the so-ealled water competition" rates of the Pa cific coast terminal points as they receive out of the vastly higher rates to Nevada points, the entire differ ence being appropriated by the South ern Pacific.
 Astonishing facts were developed concerning the earning capacity of the Pacific lines. The commission shows that during the last two years the operating revenues of the Southern Pacific company's Pacific system had increased $S,000,000, while the oper- ating expenses had decreased s5.000.- 000. thus producing an increased op- erating income of over $13,000. 900, a net increase of about s2,000 per mile of the road.
 Referring to other lines of the Pa cific system, the commission says:
 "If we take the Central Pacific alone, we find it the third in the list of Pacific coast roads in tons car ried, and the highest of all in freight