The Richmond Virginian. (Richmond, Va.) 1910-1920, 1913-06-10
POWER Of STATES
To FIX RATES IS
! UPHELD By COURT
Decision in Minnesota Railroad
Rate Cases Wipe Out
Twilight Zone
VICTORY
SAYS PRESIDENT
Head of Many Lines Expresses
Satisfaction. But Railways
Lose on Main Princi-
pies Involved

WASHINGTON. June 9.-The Ions
awaited decision in the Minnesota rate
case was handed down by the Supreme
court late this afternoon. The court
unanimously decided in favor of the
States and against federal control.
The railroads thus lose their fight on
the big principle involved in the case:
they had hoped through litigation to
shake OFT most Of h burdensome rates
which the authorities of many States
have fixed for ~intrastate traffic and to
establish the control Of the interstate
commerce commission In all cases
where there is a conflict between Its
authority and the authority of the
State officials.
The effect of the decision Ii to sus
tain the. power of the State railroad
commissions and State legislature to
fix two cent-passenger or other rates
on business exclusively within the
States, provided always hat the rates
are not ~confscatory.
Authority OF Congress.
The Supreme court in today's i'm
portant decision holds clearly, how
ever. that congress has the power to
override State authorities as regards
the fixing Of rates which affect inter
state business whenever the national
legislature shall elect to exercise such
authority.
In putting this problem frankly up
to congress there il apparently little
hope Of immediate relief for the rail
roads.
AS to the specific effect Of today's
decision upon the railroads imme-
diately involved. the court holds that
the rates fixed by the Minnesota State
authorities in h case OF h Great
Northern and Northern Pacific. are
not c~onascatory. These reduced rates
on ~intrastate business will. therefore,
go into effect the rates UP to this ttns
having been held up by an induction
granted by the lower court The SUI
preme courts decision on this point
however, il without prejudice and II
will be possible for the railroads to re-
open the case in the future X they car
prove that the rates are c~ondscatory.
In the case of the Minnesota and
st. Louis railroad company. which was
the other interstate line involved IN
today's proceedings. h rates nxed
by the Minnesota authorities are held
to be conascatory and will not, there
fore. go into effect.
While only the single case invoiv-
ing the authority of the Minnesota
railroad and warehouse commission
was decided today more than forty
cases were before the court fnvolv-
ing generally the ann principle.
Railroads Satisfied.
NEW YORK. June 9.-Newman
Erd, railroad financier. president OF
the Ann Arbor railroad. the Pere
Marquette and the Denver and Salt
Lake railroad, and of other railroads,
said this evening he regards the de
cision in the Minnesota rate case as
a complete victory In every respect
for the railroads and that the de-
cfsion will do more than anything
that has happened in years to re-
store the confidence of the invest
ing public in railroad securities.
The decision" said MFR. Erb. "tn
the general principles confirms the
decree OF the United State Circuit
Court OF Appeals in every point and
70 that extent ia a complete victory
for the railroads in Minnesota and
IN other States. 1t is v~indication no,
only for the Great Northern and the
Northern Pacific railroads. for the
Chicago and Northwestern and practi-
cally all the railroads. that Joined In
the fight. BY stipulation II wal agreed
that the decision should apply to all
h railroads interested In the case
and 1t has proved n complete vindi-
cation TOT tHcHi.
Two main questions are involved
First. there was the right Of the State
or OF the interstate commerce COM
mission to establish a rate that Il
confiscAtory or unreasonable. The
United States Supreme court now
holds that the State cannot mako a
rate that IL confiscatory or that fails
to yield a reasonable return on the
value OF the property. To that ex-
tent tho opinion ID general and ap-
plies to all the railroads in the coun-
try and gives to railroad investment
a stability which they have not hither-
to enjoyed.
State and Federal Authority.
THE other point IL TO the effect
that a State may within In own limits
establish local rates. but those rates
must not interfere or impugn on rates
made by the interstate commerce COM
mission and by that body declared
to be reasonable: that where the
Interstate commerce commission OF
the federal government hAs failed tc
act, the action of the State estab-
fishing rates within its own jurtsdic-
ton is supreme.
1.-THE decision will. in my opinion,
70 far to establish confidence the
world over in American railroad In
vestments and should be helpful IN
the present condition n restoring con-
aa~~oa ouA wAnora1 p~roanArity"