Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1910-02-23
CASE BEFORE SUPREME COURT
AFFECTS RATE MAKING
POWER OF STATES.
RIGHT TO FIX RATE
BELOW COST INVOLVED
North Dakota Case Argued in Which
lntra- State Rates Are in QUESTION
Roads Contend They Can Not Do
Business on Basis Fixed by State
Commission.

Washington, Feb. 23.-Whether a
state may fix maximum rate on a
commodity of intra- state commerce be-
low the cost of transportation was the
basis for a keen argument today before
the supreme court Of the United States.
The legal representatives Of the state
of North Dakota defended the consti-
tutionality of the state law of 1907,
fixing the rate on coal, and counsel for
the Northern Pacific Railway Company
attacked it as designating rate be-
low the cost of service.
Attorney General Miller and At
tofneys T. F. McCue and Guy G. H.
! Corliss had filed a brief in defense of
the decision rendered by the supreme
court Of North Dakota in favor of the
| law. Charles W. Bum, general coun-
| sci for the Northern Pacific. had pre-
sented brief. attacking the law and
the decision of the state court
! The counsel for the state argued that
the reason why the cost of service was
not controlling where single rate was
involved was two-foh. In the first
place, it was contended, it was impos-
sible to determine with anything like
ACCURACY what such cost of service
was. In the second place, there was
no injury to the equitable title Of the
carrier as result Of the cost Of SER
vice not being controlling, as long as
the carrier was allowed on the whole to
earn fair profit on the investment
| in the business. Furthermore, it was
contended that other elements may
<f,a TO n
one tho it is less than the theoretical
cost of service. In the case of the rate
on coal. it was argued that 1t may be
entirely reasonable for the state to put
in force low rate for the purpose of
developing great natural resource by
stimulating the purchase Of local coal
in place of foreign coal thru the re-
duction in the cost of the former.
State Puts Up Vigorous Case.
AS to the argument that the reduc-
ton of the rate on coal meant an adj
ditional burden on other commodities,
counsel for the state contended that
it was illogical to speak of this as
"robbing Peter to pay Paul" Accord
ing to their point of view, the subject
was neither more or less than case
Of proper rate classification with the
incidental result that one commodity
sustains a greater weight of expense
| than another.
A vigorous attack was made on 9TH
err arguments of the railroad. IF the
doctrine contended for by counsel for
the defendants be sustained by this
court" said the counsel for the state.
rthe decision will not merely mark an
| epoch-it will inaugurate revolution
| in the development Of the law relat-
| ing to the regulation OF transportation
charges by the railways Of the coun-
| try"
| It was said that the result Of de-
cision in accordance with the conten-
ton Of the railroads would be to Grip
pie seriously, if not practically to de-
stroy, the rate making power of the
nation and Of every state.
! Disputes Railroad Contentious.
| "The burden Of proof is upon the
railroads to show that the rate IN
yolved will cut down the net earnings
of the railroad from purely interstate
business below the point of a fa1r
profit said the states counsel. There
! is no evidence as to the gross receipts
from purely intra-state business; no
evidence as to the gross expense prop
erly chargeable to such business; ana
no proof of the value OF the property
which may be fairly said to be en-
gagged in the carrying on OF such pus-
mess. 1t therefore stands admitted
upon this record that despite the rate
l. in question, these defendants can earn
at least fair profit upon their purely
| intra-state business.
On the other hand, the counsel for
the Northern Pacific contended that
in order to be constitutional, the rate
must permit fair amount OF proh'
| for tho railroad