The Birmingham age-herald., 1912-04-11
By Legislative Under State Classification Roads Were Denied Equal Protection of the Law-Second the Rates
 Would Be Confiscatory and Not Compensatory Allowed

ale district Of Alabama, IS leTs BlNen' The litigation is the most famous get of law suits in the history of the state. The opinion of Judge Jones was written by him after five years of study of the intricate questions involved and after special master had spent two years in bringing out evidence on the points at issue.
 The opinion in full follows;
 In the District Court of the United
 states for the Northern Division of
 the Middle District of Alabama.
 Louisville and Nashville Railroad Com
 panv vs. Railroad Commission of
 Alabama, ct al CNo. 2si c. @
 South and North Alabama Railroad
 Company vs. Railroad Commission of
 Alabama, ct al. (No 26S C. @
 Nashville Chattanooga and St Louis
 Railway vs Railroad Commission of
 Alabama. ct al (No. 2e6 C. co
 Jones, District Judge. As appears from the statement of facts and the masters reports in these cases, they involve the same principles of law and in general the same state of facts, varying some what in details in the different cases. They may, therefore. be disposed of .n one opinion. After painstalSing considera- ton of the record in each of them and the arguments of counsel, ] have reached the conclusion that the rates complained of must be annulled; first, on the ground that in the classification of the railroads in Alabama for rate making purposes and in the administra- tion of the statutes each of the com plainants were denied the equal pro- lection of the laws; secondly, because the rates on the proof and in view of the value of the property devoted to intrastate business and the returns all lowed therefrom by the rate statutes are confscatory, and deny to complain ants that just compensation for the use of their properties which the constitu- ton entities them.
 Classification of Roads
 The classification Of the railroads in Alabama, in the original act of March 2, 1907, and of the subsequent Eight Group Acts. approveo November 2S, 1907, is substantially the same. and as the original act was repealed, it is necessary only tc notice that of the later acts.
 The statutes fix maximum transporta- ton rates on one hundred or more of the commodities in common use and constitute a considerable proportion of tho transportation by the railroads of this state. The railroads are divided by name into four classes-numbered |, 2 and 4-and the maximum rates are fixed by schedules 70 each of said acts for the different commodities for different distances of transportation, whether in carload lots or otherwise Class Is allowed to charge the maxi mum rate plus per cent; Class is allowed to charge the maximum rate plus 20 per cent: Class is allowed to charge the maximum rate plus 25 per cent; Class 1 is allowed to charge the maximum rate plus 50 per cent. Acts of Alabama, 1907, pp. 91-15o A small number of the commodities thus regu- lated as to rates are not subject to the percentage increase on the maxi mum rate. By section 2 of said acts it is proYid. that when any railroad in Class 1, or which may thereafter be placed in Class 1, shall own or operate any other railroad In whole or in part. or shall own a majority of the stock of another railroad, such rail- road whose stock is thus owned or whose road is thus operated, shall it. self be put in Class and be allowed to charge only the rates of that class
 The basis upon which the railroads were classed is not disclosed hy the act itself or by the proof adduced in the cases. It is seen that the differ ence in the allowed freight charges between Class l and Class 1. is 45 per cel.t of the maximum charge allowed Class l. And the differential in favor of Class over Class l is 25 per cent: and the differential in favor of Class ? over Class l is % per cent. These dif- ferences are quite substantial. They are sufficient in many cases 10 absorb the entire net income Available for re- turns to stock holders.
 The power of the government to reg ulate railroads to preserve the just relation between the public and the corporations serving 1t Is undoubted The right of the public is to have reasonable and uniform rates, the equal protection of the laws with citi- zens generally and fair returns on their investments. Gulf, Colorado and santa Fe Railway vs. Ellis. 165 U S. l50; Smyth vs. Ames, 169 '. S 466
 The principles governing the right to classify railroads for the purpose of prescribing rates is entirely similar to those applicable to thc.r classification for levying taxes. In the exercise of this right, in either respect, however, the classification must have regard to, and be based on, Some real and sub stantial distinction bearing a reasonable and just relation to the things in re- spect 10 which such classification is imposed" Gulf Colorado and S F, Ky vs, Ellis supra. Southern Railway vs. Greene, 2t6 T. $. D. AT.
 Rates on railroads are intended to cover operating expenses and returns to stockholders. Whether or not a given charge for a given service is proper must be determined, after as- certaining whether the charge is req sonable in itself. by the cost or. ex- pense to the owner in rendering the service and the income derived there on from a given rate. The different situations and conditions under which different rates are operated justify different rates on them, but whenever railroads are substantially in the same class and conducted under the same surroundings, with the same hazards and drawb backs in their busi- ness, then the rates fixed by law upon them must be the same and discrim- nations between them in this respect must be based upon some real su6- stantial difference, ana not by req son of arbitrary selection whereby bur dens are placed upon one and benefits conferred upon another when relative ly the different roads occupy the same substantial relation--otherwise equal ity before the law would be a myth in many cases and the equal protection of the laws would consist in sound rather than in substance. It may be conceded that the legislature for rate making purposes may set apart and classify railroads by dame merely Such exercise of power upheld upon the idea that there has been precedent investigation or that there exists such ( familiarity with the characteristics md af aia Scif fco in,