New-York tribune., 1910-09-22
MINNESOTA LOSES CASES
Rates Held To Be Confiscatory
and Unconstitutional.
KILLS RATE MAKING POWER
Decision Has Somewhat of a
General Eff fect-Felt in
Wall Street.

ST Paul. Sept. A.-Filing his findings IN
the Minnesota commodity freight and two
cent passenger rate case to-day in the
United States Circuit Court. Special Mas
ter in Chancery Charles E Otis held those
rates TO be unconstitutional and conflsca-
tory
This finding Of Judge Otis, unless over
ruled by the higher courts. wipes out the
ratemaking power OF the State Of Mime
sofa through the Warehouse and Railroad
Commission, and has somewhat Of gen.
eraI effect in establishing federal rate
supervision as against state rate super
vision.
The finding in the three cases was the
result of suits brought year or more ago
by certain stockholders of the Northern
Pacific. Great Northern and Minneapo-
lis & st. Louis railways against their re-
spective companies. the Attorney General
OF Minnesota. the State Warehouse and
Railroad Commission and certain shippers
to enjoin them from enforcing certain rates
prescribed by state authorities. namely.
class rates. covering merchandise in
cluded in the Western classification, pre-
scribed by order of the State Warehouse
and Railroad Commission in September,
1905; commodity rates. covering several
new classes Of carload freights Of wheat
coarse grain. livestock, lumber and coal.
prescribed by the Legislature in 1907. and
fixing the two-cent-a-mile passenger fare.
Judge Otis in ss fading recommends a
decision and decree IN favor of the COM
pIaiuauts on all points, and finds each
measure complained of in violation of the
commerce clause of the federal Constitu-
ton. and also that the rates are so low
ar1H VII
the Fourteenth Amendment.
Judge Otis holds that the contention OF
the compIainants solicitors. that carriers
could not obey the state law and apply
state rates without being guilty Of dis
elimination against commerce between
states in violation Of the federal law, is
fully sustained
The Minnesota rate case involves valua-
ton of the railroad properties and the
question of reasonable return on the in
vestment as well as the interference of
state regulation with interstate business
According to dispatches received in Wall
Street from St Paul, the decision Of Judge
Otis. acting as master, finds the value Of
the Northern Pacific, excluding its outside
properties and subsidiary companies and
equities, to be $452. 100000, and the value of
the Great Northern. excluding its outside
properties. to be s457,O 900; and also finds
that the two companies are entitled to earn
7 per cent on these valuations. This is
figured out as placing a value Of about S175
a share on Great Northern stock and $3.50
on Northern Pacific, their operated rail
road properties alone being considered. The
valuation, the dispatches say. is as Of June
/ 80, 1908.
The Importance Of the decision was
promptly recognized IN Wall Street. where.
indeed, 1t was said on good authority, ad-
vance information from some unidentified
source had been received on Tuesday. and
promptly following the official announce
! Inent from St Paul the stock market be-
gan TO advance, the trading becoming broad
and active. Great Northern made net
gain Of 3a4 points and Northern Pacific SO,
while among the other noteworthy net ad-
vances were those of 21s points III St. Paul
! and 2lA in Union Pacific.