Bismarck daily tribune. [volume] (Bismarck, Dakota [N.D.]) 1881-1916, 1913-09-14

they admit the classification of com
modities, yet they contend that these
c~lassi1cations are so adjusted tha'
each commodity yields certain net
profits.
The history of this railroad rate
case is an interesting one. Chapter
81 OF the 1907 session laws fixed
an intrastate coal rate which rcduc
ed the rate the min force by the vari
Gus railroads about one.third. No at,
tention vas paid to this statute I'M
til in August, 1907, when a suit was
instituted by the state for the pur
pose of enforcing these rates. This
action eliminated in the opinion OF
Judge Fisk, handed down April 16.
1907, enunciating the doctrine dis
cussed above and holding the rates
to be legal. An appeal was taken by
the railroad company to the supreme
court of the United States which ,ren-
dcred a decision April 10, 1910, sus-
tanning the North Dakota court, bur
leaving the matter open until such
time as the railroad companies had
tried the rates. If, after reasonable
experiment, it were found to be un-
satisfactory they might reopen the
case for further consideration by the
courts. This was accordingly dorc
in July, 1911. A proper referee was
designated by the court to take the
testimony. The hearings were held in
the Twin Cities, the State of North
Dakota being represented by Attorney
General Miller and Assistant Attorney
General Young; the railroad commits
sion, largely through Chairman Suits
man and note expert Little. assisted
at these hearings; the state secured
Mr.. Hil}man as rate expert. Mr..
Hillman is one of the best known
rate experts in the United States and
has testified in nine out of ten Of
found their way in the state and the
United States courts. These experts
made an exhaustive examination of
the books of the various railroad COM
panies and their conclusions were
written into the records Of the case at
the various hearings in st. Paul. as
we'll as the contentious of the experts
of the railroad companies. Yester-
day the attorneys of the three roads,
as we'll as Attorney General Miller
and MS ex-assistant. Mr.. Young, pre-
scented evidence to the court. to-
gether with arguments on the legal
points involved. Mr.. Donnclly, repre-
scnting the Northern Pacific railroad,
made the first argument to the court
N behalf of the carriers. He explain.
ed that the Northern Pacific had COM
piled figures for the fiscal year ending
June 1st., 1911, covering the intra-
state coal traffic. The Northern Pa
ciic handled 4,412 cars of coal dur
ing that time for which they received
in round numbers about $50, 200.
The operating cost and taxes &C,
cording to Mr.. DonnelIv amounted for
that period to approximately $61 900,
making a total deficit of about $2,250.
The operating cos twas s5S,7S2: the
tax levied on the property of the
Northern Pacific railroad company in
North Dakota amounts to about Al
would make their tax on the Ignite
ner cent on their gross income. This
coal business approximately $2,240:
This being true Mr.. Donnellv argued
that the rate as fixed by the 1907
statute was unreasonably low and
conf1scatory. He commended that the
cost of transporting Ignite was great
er than the cost of Transporting ordin-
airy freight owing to the nature of
the coal and the fact that the heavy
rafic occurred largely in the winter
when the cost If operating was greatly
in excess of the cost during the re-
mainder of the year.
Mr.. Donnellv pointed out that Mr..
Little, II Of the states experts, used
a different system in arriving at the
operating cost and that his figures
showed a profit of approximately
5000 on the legitimate Ignite business
done by the Northern Pacific in North
Dakota. NJ. Hillman, the other state
expert, found that the profits are about
81, 900; he therefore argued that the
three computations of the cost of
operating expenses, chargable to the
legnite coal traffic in North Dakota,
were so nearly alike in their conclu-
sions that the court would be justified
in holding that the Ignite coal traffic
did not contribute toward the net
profits Of the carrier.
He contended that the decision of
the court at the former hearing Of
this case was erroneous in that it
held that so long as the schedule of
freight rates returned a reasonable
profit to the carrier no one commodity
could be singled out as having been
carried at a loss by the corporation.
He contended that each and every
commodity must not only pay it's just
share of the operating expenses of the
railroad. but that it must show a
net profit. He conceded that if the
former ruling Of the court was the
law that the Northern Pacific had no
defense in this action since the leg
mite coal traffic or such an jnfinitcsi-
NAL part of their business in North
Dakota that they could not show that
although they carried the coal at a
loss, or for nothing that it would con-
fiscatc their property. He argued that
the rule of law was that where COM
mon carriers or public service cor
porations cXacted excessive rates, the
state stepped in and invoked the po-
lice mower to protect the public and
prohibited the excessive charge. He