The Bon Homme County independent. [volume] (Tabor, S.D.) 1904-1913, 1911-07-06
DAKOTA FARE Law
IS HELD VALID IN
MASTERS OPINION
Special Inquiry Into Passenger
Rates Results in UNFOLDING
2Za Gent Fare Law.

the United States court, on August ,s
1909, as special master in chancery ~
take the testimony in the case involy.
ing passenger rates in South Dakota
and make report and findings In re-,
gard to the same, today completed his
work and made public his findings,
Both q cent and 2k cent rate ara
involved In the case and the substance
of the report Of the special master ia
to the effect that a 2h cent rate might
run the gauntlet Of the higher courts
but that a straight cent passenger rate
appears to be out of the question IN
South Dakota at present.
In his report Special Master Gates
takes direct issue with the recent de-
cision Of Judge Sanborn in the Mime.
Sanborn assigned the value and com.
mon expense on a gross earnings basis
while Special Master Gates makes hi
findings by adopting the direct eI.
pense basis.
, Only the Chicago & Northwes,er,
railroad company is directly involved or
concerned in the case and only the
business transacted within the state ~
South Dakota by the Northwestern
company. Both the freight and passen.
ger business was considered.
Two and One-HaIf Cent Faro.
Included in his report is table
showing that at cents per mile
the percentage of net income to vain,
alton for the year ending June 80. 1903
which Is taken as a basis, was $50. az
2h cents per mile, $50 per cent: and
at cents per mile 3.94 per cent.
In the Minnesota rate cases Judge
Sanborn held, figuring on a gross earn.
ings basis, that the railroads were en-.
titled to per cent. In other rate
cases 1t has been decided that the rail.
roads were entitled to per cent
while In the Consolidated Gas company
case the United States supreme court
held that the company was entitled 10
per cent. The percentage of net
income to valuation found by Special
Master Gates, is based on the freight
and passenger business Of the North.
western company wholly within the
state OF South Dakota.
In view Of the findings in reference
TO the cent rate, placing the Der.
centage Of net income to valuation AZ
but 1874 per cent, 1t is doubtful II the
higher courts would decide in favor Of
cent rate. but with percentage
or net income to valuation of 6.5O estj
mating at passenger rate Of 21b cents
per mile, 1T Is believed the courts may
sustain 2ta cent rate in South Dakota
Master Cuts Expense Account
me expenses assigned by the special
master to the business of the North.
western company in South Dakota are
less than claimed by the railway com.
pany and somewhat higher than
claimed by the South Dakota board Of
railroad commissioners
In ais report the special master says.
liable Tin which, among other
thlngs the percentage of net income
TO valuation Is get forth) has been pre-.
pared by the master upon the basis OF
MS assignment of expenses to the state
upon the complainants' basis of appor.
tioning expenses between the freight
and passenger service and BY
assigning operating expenses between
lntraState and interstate passenger ser.
vice on the gross earnings basis and
py assigning outside income taxes and
vaiuation on the gross earnings basis
Let IL be constantly borne in mind that
the problem is not to determine what
year 1908 under the tariff rate of
c. s per mile (only in so far as it
step In the process), but the true
problem Is to find what the expenses
would nave been, first, If the rate Of
I1s cents per mile had been in effect
per mile had been in effect
=. Under this table z, it appears that
the net income from the freight service
under the passenger rate Of 8 cents per
mile was $l02,32S.76. II the passenger
rate had been reduced to 2 cents per
mile the freight net income would, as
SHOWN by said table z, necessarily have
oeen reduced to a deficit Of $44SSlL
aithou8h as q matter Of fact freight
earnings would not actually be in any
way affected by the reduction in the
passenger rates. The passenger earn.
ings would actually have been reduced
py the sum Of $331,367.44. but by the
use or gross earnings the net passengg
income would only have been reduced
oy the sum Of $235,492.S6, and the net
irelsnt incomes would have been re-
ouced by the sum of $106,82187
'InlS not Only UNFAIRLY throws q
tlon OF the loss upon the freight service
out also by the reduction in the grOs
earnings per cent entails an additional
loss OF Sl0,94739 in the outside incOna
apportioned to the state.
Gross Earnings No Factor.
1T seems to the master that thes
results conclusively prohibit the use y
gross earnings as a factor in cases
this kind. The 100000 examps
shown by Justice. Brewer in the Tomr
kins case, 176 u. S. 1877, clearly ind
Gated the same absurd results, and the :
master therefore feels justified in fd.
lowing Justice Brewer in the TompkD I,
case and in declining to follow ts "
Love case and the Minnesota rate case
and the other cases on this subject
IN regard to the remark of Judg
Sanborn in the Minnesota rate case =
heretofore quoted: Cases may INDEED y
be Imagined In which this basis doa y
not produce persuasive results tR
master Is Of the opinion that no cas p
can be imagined where such absurd r. |ol
suits would not appear unless ID m
freight earnings and passenger carr o'
tngs were reduced or raised in exactG pc
the same proportion. zee
In the Minnesota rate cases the r.
duced passenger rates were in force Il,
the years from which the tables wer ur
prepared by the master In that cas- os
as were also some OF the freight rate or
He showed by note appended TO
tablets that the freight losses, as The b,
would have been under the reduca y.
rates which had not gone into enec 40 40
were not considered by him in % Pon
makeup of his tables. Consequent Di
the masters report in those cases o.
not disclose the glazing absurdites th' 'ra
are shown in this report"
CONSIDERING DiSBARMENT NJ
OF DELL RAPIDS ATToRNE' u
Yankton, s. D., July 1.-BeC :,
Referee A. H. Orvis, at the court hou .
here today, tine arguments were hen br,
in the G!.barment proceedings again an.
the law firm Of Robertson & Daus' be5
erty, of Dell Rapids. =