The Guthrie daily leader. [volume] (Guthrie, Okla.) 1893-1996, 1910-02-14
SAYS RATES MUST Be FAIR
TO PUBLIC And RAILROADS
What Constitutes Basis Of CAL
CuIatIOn as to Reasonable
ness Of Rates

The written opinion Of Judge VIII
liam c. Hook. acting in the celebrated
passenger rate and freight rate cases,
has been received here. It Is lengthy
and goes into the matter of railroad
operations, as well as into the law
applying to the questions at issue, eA-
haustvely. Judge Hook says in sub
stance:
4 "These suits were brought in Sep
tember 1909, after about two years
experience with the passenger rate
from nine TO eighteen months expert
ence with the freight rates, save for
some unimportant notifications.
whether the rates prescribed by q
state are reasonable or not involves
the determination of The value OF the
property devoted to the public Use
to which the rates apply the meas
ure Of a reasonable return and wheth-
er the charges are sufficient to that
erd. II must always be remembered
that under the constitution of tns
United States railroad company
cannot be lawfully denied a reason.
able return upon the use of It's prop
erty devoted to the public use, and
II by the scope OF its operations sew
era sovereignties are interested
special insistence of the officers OF
one should not be allowed to cast an
undue burden upon the others,
Cites Supreme Court Opinion
Judge Hook goes on to say that
the question of the local OF state
operations, with regard TO its earn
ngs. expenses and the return upon
It's investments cannot be divorced in
Just consideration from its intet-
state business since both are in so
large a measure interdependent.
An opinion of Justice Harlan in the
case of Smyth " Ames Is then cited
IS follows:
"We hold however, that the basis
cf all calculations as to the reason
ableness of rates TO be charged cor
ro7ations maintaining a high way uli'
der legislative sanction must be falf
value of the property being used by
IL for the convenience Of the pubic
And in order 10 ascertain that, orig
| inal cost of construction, amount ex
pended in permanent improvements
amount and market value OF It's
stocks and bonds, the present as com
lared with the original cost of con
struction, probable earning capacity
under The portion Of the rates pre-
serlbed by statute and the sum re-
CURED TO meet operating expenses
are all matters for consideration ant
are to be given such weight as may
nc just and right in each case. VIZ
do not say there may not DC olhel
matters TO be regarded IN eSiillatlnf
the value of the property
\ Difficult And Complex SuhJuct
/, Is difficult and complex SUB
iect, says the opinion, but that does
not alter the duty of the court TO &c
as nearly accurate results as posi-
\ BE. It ls generally agreed that civ
\ cn the entire yalne Of railroa'
property in the state, 1t is fair L
apporiion 1t among the dIfferen
kinds and classes of business upol
4 revenue basis in proportion TO th'
eross revenue produced by them re
spectively. A like rule applies whei
he questions involved require sci
aIate consideration Of freight ant
passenger business.
The court states that the value 0
llhree railroads affected by its ten
4 rnrary restraining order are as fo
lows: NJ. X. e. r.. $S5, ,1S5.089; the a
r. d S. f.. s47,S77 ,39f, and the G.. {
& S. +, s6,406,607 The propertle
we're assessed at seventy-fiye pc
cent of this valuation. 1t continues
"Taking the year ending June q
1909. as the fairest OF periods avail
able for illustration of the effect 9
the rates upon net earnings. as 1t J
further removed from the derressio
.ol 1907. II was easily founi that th
NJ. K. e. r. earned slightly less tina
/ 5 l-2 per cent and the A. T. & :. +
and G.. c.. & S +, combined. 2 81
per cent upon IT'S investment TIL
, net earnings from as operations !
Oklahoma, lnfesstste and LOCAL freigf
surasenger, mail, exDfess and ca
llstrvice, etc, with no deduction for u
/ .tcrest or dividends was, n. X. &
I sf.S7S.5S9: A. 7. & S. f.. si,549,556.
: Justice Both To public And RsiIroa
! Rates should be Just both to u
! public and 10 the owner Of a ral
road. II does not appear that thes
) reads were III conceived excessivel
+ extended or nor operated wisely al
: economically In fixing the mcssul
/ OF return regard must be had for Il
: character Of business, locality an
y trr rist. whether the return will !