The evening times. [volume] (Grand Forks, N.D.) 1906-1914, 1910-02-24
The Question of Enforcing the
Rate Made by Legislature
the Test
RAJ R0A0 A0LDS THAT p'1ss
FIXED IS co.,. '''''
State Contends That Earnings Over
Whole System and Not That Within
the State Must Be Taken for Basis
Judge COrliss Interested.

Washington, Feb. 24.--Whether a
state may fix a maximum rate on a
commodity of intra-state commerce
below the cost of transportation was
the basis of a keen argument today
before the supreme court of the Unit
ed States. The legal representatives
Of the state of North Dakota defended
the constftutionality of the state law
OF 1907, fixing the rate on coal, and
counsel for the, Northern Pacific rail-
way company attacked 1t as desig-
mating rate below the cost of SER
vice.
Attorney General Miller and form
er Attorney General T. F. McCue and
Attorney Guy. G. H. Corliss had filed
a brief in defense of the decision rem
dered by the supreme court of North
Dakota in favor of the law. Charles
w. Bum, general counsel for the
Northern Pacific, had presented a
brief. attacking the law and the de-
cision of the state court.
The counsel for the state argued
that the reason why the cost of SER
vice was not controlling where a
single rate was involved was two
field. In the first place. it was con-
tended. it was impossible to determine
with anything like accuracy what
such cost of service was. In the Sec
ond place, there was no injury to the
equitable title of the carrier as a re-
salt of the cost of service not being
controlling, as long as the carrier
was allowed en- the whole to earn a
fair profit on the investment in the
business. Furthermore, it was con-
tended that other elements may serve
to make the rate a reasonable one,
though it Is less than the theoretical
cost of service. In the case of the
rate on ccal. it was argued that it
may lie entirely reasonable for the
state to put in force a low rate for
tire pul pose of developing great ma
tursl resource by stimulating the
purchase of local coal in place OF
fcreign coal through the reduction in
the cost Of the former.
AS to the argument that the reduc-
tion of the rate on coal meant an
additional burden on other commodi-
ties. counsel for the state contended
t:ist it was illogical to speak Of this
Us "robEing Peter to pay Paul" Ac-
eording 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 great weight of
expense than another.
Legal Revolution
A vigorous attSck was made on
other arguments OF the railroad. "lf
the doctrine contended for by counsel
for the defendants be sustained by
this court" said the counsel for the
state, "the decision will not merely
mark an epoch-it will iraugurate a
revolution in the development of the
law relating to the regulation o
transportation charges by the rail
ways OF the county,
1t was said that the result of 8
decision in accordance with the con.
tcntion Of the railroads would be to
cripple seriously. If not practically to
destroy. the rate making power O
the nation and Of every state.
THE burden Of proof is upon the
railroads to show that the rate in.
vo!ved will cut down the net earnings
OF the railroad from purely intra-
state business below the point OF a
fair profit" said the states counsel
"There is no evidence as to the gross
receipts from purely intra-state bust
ness: no evidence as to the gross ex.
pensc properly chargeable to such
business; and no proof of the value
Of the property which may be fairly
said to be engaged in the carrying on
Of such business. 1t therefore stands
admitted upon this record that de
spite the rate in question. these de.
PENDANTS can earn at least a fail
profit upon their purely intra-stat.
business"
On the other hand. the counsel fo,
the Northern Pacific contended tina,
in order TO be constitutional, the rate
must permit fair amount of prof,
for the railroad.
NO one can contend 1t to be ne.
cessary for the protection of the pup.
lic," said the railroads counsel, "that
any rate be fixed by legislative au.
thority below the cost of furnishing
the service Such a contention would
he contrary to the fundamental pur'
poses of the police power. And view
ing the situation from the standpoint
of the public, 1t can have no interes
which ought to compel a carrier tt
furnish certain classes Of service Al
less than cost. thus to charge the lost