Omaha daily bee., 1911-02-25
HISTORY OF BIG RATE CASES
Story Of Attempted Increase and
Action Of the Commission.
FIFTEEN PER CENT OF TRAFFIC
This Much Of Total Freight Tonnage
VIII Come Under the Ruling
OF the Board ut wash
fnnton

Of 1910. Just prior to the enactment Of
the existing interstate commerce law,
which, in part. became effective on June
IL. 1910. the railways OF official classified
ton NEUTRALITY-SUSPICIOUS. in all-and those
Of Western Trunk Line association terri
tory filed WITH the commission tariffs
making increases In their freight rates
The tariffs filed by the eastern lines in
creased the first class rate between New
York and Chicago points IS cents a hun
bred pounds. from 70 cents TO 30 cents
and made proportional advances on the
other five classes. Some advances also
were made on commodity rates, but the
great bulk Of the commodity tonnage of
freight was not disturbed
The proposed advances affected approx
mately Is per cent Of the total freight ton
mage Approximately the same amount Of
tonnage was affected by the increases
proposed by the western lines, but the
class rates we're not affected in any way
Commodities alone were increased the
average advance on about $50 different
articles being substantially Is per cent the
increase varying from about per cent
IN some cases to 30 per cent IN others
At the time the tariffs were filed the
commission had no authority to suspend
advances IN rates pending an investigation
OF their reesonableness. but after confer
ences with the commission and with Presl-
dent Taft the railway officials agreed vol
unfairly 20 suspend the rates until August
/. Meantime. on June IS, the present law
was passed giving the commission DC wer
to suspend rates Subsequently the pro-
posed tariffs were again suspended vol
UNFAIRLY. first until November ! and later
until February /. 1911.
The commission found Itself unable
physically to conclude It's consideration Of
the case by February and aSain the
rates were suspended until March u.s.
Western Case Reviewed.
In his preparation of the opinion in the
western case Commissioner Franklin X
Lane made an optimistic review of the
situation Of American railways In begin
ming he shows that through the regulatory
law and its enforcement the railroads
rave been protected against each other
and as 8 result the revenues OF the carriers
have increased under regulation and their
dividends and their surplus have increased
as in no other period Of our history
I'm the last ten years the railroads of
the United States have borrowed more
than A,5OO,0o0OOO or twice the. amount of
the national debt at the close OF the civil
war. This is an evidence of the faith
the public has in these properties. The
rate Of dividends and the total amount of
dividends have increased more rapidly than
the additional mileage built"
Commissioner Lane POINTS out that the
western roads have increased their surplus
more than 100 per cent in ten years In an
elaborate discussion OF the financial condi-
lions OF the various lines the opinion holds
that the carriers do not need larger reve-
nues for purposes of maintaining their
credit or insuring them against temporary
adversely.
The position is taken that the reasonable
rate as defined by the railroad men ma1es
the traffic manager a statesman who con,
trolls the economic conditions of the oun-
try. setting at nought our tariff laws and
artifcially creating markets and centers
Of industry"
In considering the cost OF operation in
GLIDING wages, materials and all else that
properly may be taken into account the
opinion holds that the cost of upkeep OF
the plant and the return upon its value
amounts to more than three-fourths OF the
rate that is charged for transportation.
Railway materials are found not to have
increased; fuel has increased slightly and
wages considerably. However, the last six
months Of the year Of 1910. in which the
new wage schedules were In effect show
for the carriers the largest operating in
come they have ever enjoyed in any half
year"
COnfiscatIOn Not Desired.
In concluding his opinion, which was
adopted unanimously as the expression of
the commission, Commissioners Lane says:
THE constitution Of the United States
guarantees the carriers against the con
fiscation Of their property or the taking
Of the same without due process OF law.
Without this constitutional guaranty -
which il distinctively American-for here
property rights are more sacredly safe
guarded than in other lands OF more mo-
bile law-the railroads of our country are
protected from injury Of any lasting char
acter by the popular consciousness that
they are essential 20 the industrial life OF
the people. To harm these roads is to
injure ourselves
"Our laws do not seen TO establish do
minion over private capital for any other
purpose than TO make sure against injus-
tice being done the public and thereby
make such capitalization more secure. We
are dealing here with a difficult problem.
involving multitudinous facts and an in
finite variety of modifying conditions which
make the establishment OF principles and
the framing OF policies matter OF slow
evolution. Congress has laid down a few
rules. These rules we are attempting TO
apply
1T Is not for us to say that we repre-
sent the government and may have a pol
icy Of our own which In any degree runs
counter 20 the power granted 20 US or the
duty Imposed upon us. The railroads may
not look to this tribunal 20 negative on
modify the expressed will Of the legisia-
ture. They have laid before us the facts
and the law which would make for a jus
tlflcation Of their course IN the Increasing
OF rates To our minds their justification
has not been convincing.
In Withholding finally tts approval OF the
proposed increases the commission holds
and its decision In both the eastern and
western cases was unanimous that the
carriers did not IN the proceedings sustain
what the law imposes upon them, /. e..
the burden OF proof that absolute neces-
sity existed for the advances proposed.
IA his elaborate ciscussicn OF the eastern
case Commissioner Prouty says that the
railroad rates OF this country have not
been constructed as rule upon any seien-
tifIe basis and this f. especially true Of the
interstate rates