The Twin City star. [volume] (Minneapolis, Minn.) 1910-19??, 1910-10-28
OBJECTS TO ruling
EXCEPTIONS ARE FILED TO THE
OPINION OF THE MASTER
IN cHANcERY.
IN MINNESOTA RAILROAD CASES
E. T. Young and e. s. Durment Acting
As Special counsei-Famous
Rate Cases to Go To
Supreme Court.

~
the Minnesota rate laws was taken
when general and special exceptions
Of the state Of Minnesota to the find
ings Of Judge Otis, special master in
chancery in the rate cases, were filed
with Judge Otis at st. Paul.
The general exceptions, contained in
80 closely typewriter pages, were pre-
pared By E. T. Young, former attorney
general. The special exceptions, Of
about the same length, were prepared
and submitted by Edmund s. Durment.
Both appeared as special counsel for
the state in the preparation and trial
of the case and in the exceptions filed
acted for c. F. Staples, Ira B. Mills and
Charles E. ElmQuist, members of the
state railroad and warehouse commits
sion, and for George 7. Simpson, attor-
ney general.
Case an Important One.
Inasmuch as the case is one Of vital
Importance to the people of Mime
sofa, involving principles of state SOW.
ereignty and the rights of the state to
regulate and control the affairs of
public service corporations, the states
attorneys have incorporated in their
exceptions every material point affect
ing the merits Of the case which may
be the possible subject of contention
in the supreme court of the United
States. The reasons for each excep-
ton are set forth at length.
Direct issue is taken with Judge
Otis findings that the state exceeded
its constitutional powers in prescrib-
ing the contested rates because, as
the master said, such rates constitute
a direct interference with and impose
a burden upon interstate commerce.
The state maintains that the consti-
tuition gives congress control over COM
merce beginning in one state and end
ing in another and the interstate COM
merce act provides for the federal
regulation of transportation carried on
between different states; that the laws
involved apply by their terms only
to intrastate business and do not over
lap and conflict with any federal laws.
Although substantive law is cited in
support of the constitutionality of the
Minnesota rate laws, expediency and
public policy are also urged in that
a judicial finding which cripples the
commerce power of a state does not
enlarge the commerce power of the
nation.
Judges Method Criticized.
General exception is entered to the
method adopted by Judge Otis in fix
ing the valuation of the railroad prop
erty employed in the state. This is
considered the most important feature
of the Otis decision. After stating
that the master ignored the original
investment as a measure of the valua-
ton upon which they are entitled to a
return and also ignored the outstanding
stocks and bonds of each company,
which exceeded the actual investment,
Mr.. Young says:
He adopted the so-called cost of
reproduction as the sole measure of the
value of railroad property. The plan
followed by the master reduces rail-
road valuation to a mere exploit of
the imagination. Under 1t the value
of railroad property can be fixed at
any figure which interested parties
will swear they believe it to be worth,
and if such plan is upheld by the
courts, railroads can make the public
pay any rates they see fit to charge"
The attention Of the master is also
called to the fact that the actions are
brought by the stockholders and not
the railroads and that a railroad stock.
holder has no right in law to claim a
return from the public on anything
more than the face of his valid stock.
At the suit of stakeholder the value
found cannot, according to the states
attorneys, exceed the outstanding
stocks and bonds.
Another Exception Filed.
Exception is filed to Judge Otis
apportionment Of interstate and intra-
state freight and passenger business
carried on railroad property strictly
within the state. This point is re-
garded as of the utmost Importance for
on the proper and just apportionment
of this business depends the property
valuation which determines whether or
not the rates in question in this case
are confiscatory, as found by the mas
ter.
The state objects to Judge Otis divi-
sion of the value Of railroad property
between state and interstate business,
both passenger and freight 1t is
stated that Judge Otis by charging to
intrastate business an undue percent
age of the common value of both intra