The sun. [volume] (New York [N.Y.]) 1833-1916, 1911-04-09
STATE LOSES R. R. RATE CASE|
=. s. COURT HOLDS MINNESOTA
LiUS UNCONSTITUTIONAL.
STATE May Not Regulate rates n Sutll
Regulation Causes Connscation or
Affects Interstate Commerce Rates
shawn Not TO Have Been Exorb,tant.

N1NysAroIts. April S.-Judge Walter
u sanborn. senior United States Circuit
.Iudee Of the Eighth Judicial Circuit. in
a., exhaustive opinion handed down in
=, Paul to-day decided the Minnesota
,,,a cases against the members Of the
Minnesota State Railway Commission Oh
tbe ground that the necessary effect OF
,be reductions ordered was substantially
10 burden and directly to regulate inter-
state commerce. TO create unjust discrimi-
nations between localities in Minnesota
and those in adjoining States. in violation
-, tho commercial clause Of the Constitu-
ton. and to take the properties OF the rail-
road companies without just compensa-
,ion. in violation OF the Fourteenth
Amendment to the Constitution.
y The case will be appealed to the Supreme
cour, OF the United States.
The suits were brought by stockholders
Of the Northern Pacific Railway Com
pany. the Great Northern Railway Com
pany and the Minneapolis and st. Louis
Railroad Company against these oom-
psnies. the Attorney-General and the
members Of the Railway and Warehouse
Commission Of Minnesota to enjon the
reduction of the passenger rate in Minne-
aota from three cents to two cents mile.
The merchandise rat 70 to rs per cent.
and the commodity rates 7.37 per cent.
The railroad companies had put all
these reductions. except that on COM
modify rates. into effect. and the cases
were begun and tried after the effect OF
these reductions had become apparent.
Judge Sanborn in his decision holds:
That the laws OF the State reducing
passenger rates 10 1-3 per cent. and
reducing commodity rates 7.s7 per cent.
are discriminatory and in violation Of
the Constitution OF the United States.
That the Railway and Warehouse
Commissions order reducing general
merchandise rates within the State is
discriminatory and in violation Of the
Constitution Of the United States.
That q State may regulate intrastate
commerce in so far as it does not burden
interstate commerce and no further.
That the nation only through the ma
tonal Congress can regulate interstate
commerce rates.
That all State laws that regulate rates.
which laws affect or burden or regulate
interstate commerce. are unconstitu-
tional and void.
That the unavoidable effect OF the
sweeping laws Of Minnesota reducing and
regulating rates IL indirectly to discrim-
mate against interstate commerce and Is
in direct violation OF the commerce clause
Of the Constitution.
The basic facts that apply. as summed
up in Judge Sanborn's opinion. follow:
The unavoidable effect OF the general
and sweeping reductions OF intrastate
fares and rates in Minnesota made by the
acts and orders considered was and Is
substantially to burden. directly to regu-
late and to discriminate against the inter-
late commerce OF the defendant COM
ranies and to create undue and unjust
discrimination between localities in Min
nesota and those in other States In viola
iion of the commercial clause of the Con-
sttution
The just compensation secured by the
Fourteenth Amendment entities the de-
fendant railroad companies to a fair
return upon the reasonable value of their
property in Minnesota devoted to the
public use of transportation. Such a
return is just TO the public as well as tc
the carriers.
Under the evidence in these cases
the cost Of reproduction now of the Min.
nesota properties of the defendant com.
panies devoted to the public use of trans.
rortation is more persuasive evidence
of their values than the market value oi
their stocks and bonds or the origina
cost Of their acquisition and construc
ton.
Rate making looks TO the future and
il a legislative function. Rate Judging
determining whether or not rates made
are conhscatory, is a judicial function
There is a presumption in the first in
stance that legislatures and commissions
make reasonable and just rates and cleal
proof is requisite to overcome it. Bu
when. after fares and rates have beer
tried by actual use for months, aftel
enarv proof of their effect and othe
facts determinative of the issue confisca
lion vel non has been made before a mas
'"r learned in the law who finds the facts
the legal or judicial presumption that hi
findings are just and right. while no
conclusive, is superior to the origna
Presumption that the rates we're just an,
reasonable'
Interest on he cost Of reproduct ion O
railroad property at 4 per cent per annun
during onehalf the time requisite to ac
4ulre and construct it is necessary ex
p"nSc of reproduction and may be law
fully allowed as such"
net income of per cent per annun
upon III" value of railroad property il
Minnesota devoted to the public use O
Transportation is not more than the fai
return 10 which q railroad company
'o'lil"d under the Fourteenth Amend
h4"n' to the Constitution.
MASSACRE ~ BERNA.