Omaha daily bee., 1911-06-11
MARTIN HITS COURT DECREE
Attorney General Of Nebraska Ar
raigns Rate Decisions.
SAYS STRIKE AT Two-CENT LAW
Addressing Lincoln Commercial Club,
state official Declares sanborn
Decision In Revolutionary in
It's Entire Effect.
Trom a staff Correspondent)

administration believe is encroachment OF
the federal judiciary authority upon the
powers OF the states were scathingiy ar
rslgned BY Attorney General Grant q.
Martin today In a MONDAY address before
the Lincoln Commercial club.
The state official took for the theme OF
his discourse the sanborn decision in the
Minnesota rate cases wherein It was de-
cided that state authority over intra-state
rates was limited because Of the effect
OF such legislation upon interstate rates.
Attorney General Martin said in part:
The decision in the Minnesota rate case
IS revolutionary in the extreme. People
who comprehend its far-rea chng effect
III congress had brought forth a measure
which struck down the right Of the states
70 regulate their internal commerce. every
aroused
This decision is revolutionary because
lions, though applying only TO commerce
within the state, interfere with Interstate
constitution. For over 100 years the SUI
preme court OF the United States has held
their internal commerce. During all that
e time, practically all railroad regulation
emanated from the states and not from
the general government.
Judicial = ,nsense.
Matchmaking is a legislative function"
declares the author of the opinion. What
nonsense to say that rste-making is a
legislative function. and then proceed as a
court to declare every rate so made void
LoI one or all the reasons in the catalogue.
S what rate fixed by a state legislature has
y the name OF the Judge of the federal
district or circuit court who has yet found
lit to uphold? Judge Mcpherson held that
the effect of the Missouri law was to con-
vsndevanter held the same, as to the law
Not Arkansas. Judge Sanborn, sitting with
others, held that the Oklahoma law was
compensation. and now reiterates the same
thing with reference to the law OF Mime
sofa
The facts are these acts by the legis-
latures are being struck down as fast as
they reach the federal judiciary. In very
recent years rate reductions in North Da-
kota, South Dakota, Arkansas Missouri.
Oklahoma, and Minnesota have all met a
empire in extent and contain a population
or over ten million people. Are these
people ignorant, malicious, or anarchistic?
and patriotic as any people on earth. II
is a condition and not theory that con-
fronts them These people know and have
. known Tor third of a century that they
have been victimized by the public car
riers. They know that they have been,
and now are, even with the reduced rates
in effect. the victims OF stiIi extortionate
freight rates as compared to adjoining
states These people know as do all the
people OF the country, that the railroads
have never prospered In their history like
they have in the last two years. Yet in
the face of this well known fact. every
legislative act designed to prevent extor-
tomato rates has been stricken down by
the federal courts on at least one of two
satory or confiscatory. This results from
the adoption of an erroneous method OF
xaluins railroad property and Of appor-
tioning operating expenses as between
state and interstate business.
DisreEarded Evidence.
am informed that the railway commits
sion OF Minnesota spent about 100000 in
making a physical valuation of the rail-
was taken into consideration. The result
of this valuation was presented to the
referee In the Minnesota cases in the form
of evidence. What did he do with it2
He brushed II aside and took in its place
the testimony OF real estate men, intro
duced by the companies. as to the value
OF their terminal properties These real
estate men from Minneapolis and St Paul,
fixed the values so high that any rate
would not permit . return based on such
valuation. The circuit court adopted the
findings OF this referee and declared him
call him that i want this master learned
IN the law to state the reason why he
saw fit TO reject the testimony offered by
Inc state based on a large expenditure OF
state funds in obtaining a physical valua-
tion OF Minnesota railroads, and then adopt
brought forth by the railroad companies,
(which / understand to be fact An eX-
1 PLANTATION Of why II was necessary to reject
Hf the companies on this point would be
more helpful and instructive than a reps-
tition OF such generalities as the one
must yield to that which is supreme. Is
Il any wonder that the Wall Street Jour
nal declares that this decision is invalu-
able" which means, of course, that 1t Is
exceedingly precious2
There Is no doubt but that the testi-
mony produced by the Minnesota Railroad
commission was the fairest and most
equitable. concerning the value of railroad
properties, which was introduced before
the referee who tried the case. This was
4 acknowledged by the greatest authority In
'~America on the subject Of railroad con-
Julius Kruttschnitt OF Chicago. In testi-
Tying in the Chicago, Rock Island a Pa
cific Railway company case on July T.
1910. which case is now pending in the fea-
validity OF our 2-eent passenger fare law
and the freight rate reduction law which
were passed by the legislature OF 1917. this
distinguished expert said:
valuation Plan.
II have been making a study Of this
question of railroad valuation for a num-
her of years and particularly In the last
two years, and l have obtained the reports
OF those state commissions that have val
ued railroad properties and have studied
them and after looking over all OF them
"A seemed to me that tue plan adopted By
the Minnesota State commission was the
attention The plan is contained In a cir
cuiar as ! remember IT, of Dwight Nor
gan who was the expert employed by
them to make the valuation, and IL seemed
10 me to be the most comprehensive, most
logical and fairest TO both interests OF any
that | knew or II seemed TO me TO be
particularly free from attack II used In
Attending railroad suits, because Mr.. Mcr-
gan was an employe Of state body and
Certainly could not be accused by the pub
uc OF prejudice or psrtisanship, and have
found very few OF his views, II any, that
1 could not pretty cordially endorse and
accept as my own
These fed raj courts have. in part,
adopted the revenue theory for assigning
the value OF railroad property I'm a state
10 the various classes OF business and In
Spportioning operating expenses This is
= theory sponsored by the railroads and
when fully applied is so vicious In It's ma
,ure that Il enables the companies 20 de
feat any rate established by state. Had
the Minnesota rates been twice as high
Ss fixed BY the legislature, still under this
revenue theory the companies would have
been able TO prove them eonfiseatory'
Do1yoonf pOcfOffinn