Evening star. [volume] (Washington, D.C.) 1854-1972, 1910-02-24
COAL RATE CASE UP
Right of North Dakota to Leg
isIate AsSailed.
ARGUMENTS OF COUNSEL
State Defends Propriety of Develop.
ing Natural Resources.
JUST REGULATION, IT SAYS
Service Below Cost, Says Railroad.
Discrimination Against Shippers
in Other Commonwealth.
JUST REGULATION, IT SAYS

netner state may FIX maximum
rate on a commodity of intrastate COM
merce below the cost of transportation
was the basis for a keen argument to-
day before the Supreme Court of the
United States.
The legal representatives Of the state
OF North Dakota defended the constitu-
tonality Of the state law of 1907. fixing
rates on coal, and counsel for the North
era Pacific Railway Company attacked II
as designating q rate below the cost of
service.
Attorney General Miller and Attorneys
t. +. McCue and Guy c. II. Corliss had
filed brief in defense of the decision
rendered 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 decision of the state
court.
Arguments for State.
The counsel for the state argued that
the reason why the cost OF service was
not controlling where single rate was
involved was twOfold. In the first place,
1t was contended. 1t was impossible 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 a result
OF the cost of service not being con-
trolling, as long as the carrier was al
lowed on the whole to earn a fair profit
ON the investment in the business.
Furthermore, 1t was contended that
other elements may serve to make the
rate a reasonable one. though 1t is less
than the theoretical cost of service In
the case of the rate on COAL II was
argued that it may be entirely reason
n Tor h. tote L.
rate for the purpose Of developing a
great natural resource by stimulating the
purchase OF local coal in place Of foreign
coal through the reduction in the cost Of
the former.
Proper Rate Regulation.
As to the argument that the reduction
OF the rate on coal meant an additional
burden on other commodities. counsel for
the state commended that 1t was illogical
TO speak Of this as ''robbing Peter to pay
Paul. According to their point Of view
the subject was neither more nor less than
case OF proper rate classification with
the incidental result that one commodity
sustains . greater weight Of expense than
another.
vigorous attack was made on other
arguments Of the railroad.
If the doctrine contended for by coun-
sci for the defendants be sustained by
this court said the counsel for the state,
the decision viii not merely mark an
epoch-tt will inaugsIate a revolution in
the development or the law relating to
the regulation Of transportation charges
by the railways of the couutry.''
II was said that the result Of decision
In accordance with the contention Of the
not practically to destroy. the, rate-mak-
state. 4
cut down the net earnings Of the railroad
from purely interstate business below
the point of fair profit" said the states
counsel.
receipts from purely intrastate business.
no evidence as to the gross expense prop
erly chargeabfe to such business, and no
proof Of the value OF the property which
carrying on Of such business. II there
fore stands admitted upon this record
that despite the rate in question. these de-
PENDANTS can earn at least fair profit
Contention Of Railroads.
On the other hand, the counsel for the
Northern Pacific contended that. in order
to be constitutional. the rate must per-
NIT Of a fair amount Of profit for the rail-
road
No one can contend 1t to be necessary
for the protection Of the public, said the
railroads counsel that any rate be fix
ed by legislative authority below the
cost OF furnishing the service Such
contention would be contrary to the fun
damental purposes Of the police power
And viewing the situation from the
standpoint of the public II can have no
interest which ought to compel a carrier
to furnish certain classes OF service at
less than cost: thus to charge the loss
against the balance OF the service Such
a principle Is contrary to public policy.
ANY discrimination by a public service
company which consists in rendering ar
service below its cost is unjust discrim-
ination and unlawful. II is Uncomfortable
that a test OF reasonable rates will be
adopted by the court which would COM
pei carriers to do the very thing forbid
den by law. ANY just rule therefore OF
rate regulation must preserve to the car
rier both the right and the ability TO
render all service At remunerative rates
IT the regulation compels a carrier to
render . portion OF its service at less
than COST said the counsel In closing,
inevitably this loss must be distributed
over the balance OF its business unless
the carrier can refuse to render the sery-
ice The latter alternative 10 impossible.
"Au service rendered at q lose results
In burdening the balance Of the Carriers
service. and considering that railways
are subject to regulation OF many states.
as well az to that of Congress, the neces-
sary result OF one state requiring service
10 he rendered at less than cost is TO i'm
pose the los on citizens Of other states
and on che business OF the country at
large"