The Oakes times. [volume] (Oakes, N.D.) 1906-current, 1913-06-12
MOST Important
RULING IN YEARS
Supreme Courts Decision in
Minnesota Rate Case.
TRIBUNAL IS UNANIMOUS

oIAteS nt0ntS TTinCIPte OpHeso aHo
Rules Laid Down for Physical VAL
uation of Raiiroads-State Railway
Commissions to Control lntrastate
Rates.
Washington, June 11.-What is con-
sidered one of the most important de-
cisions of the United States supreme
court in recent years was the ruling
handed down in the Minnesota rate
cases. The decision is summarized
as follows:
"To give every state the right to
enforce maximum rate laws, unless
and until congress enacts federal
maximum rate laws.
ITO divest the interstate commerce
commission of all control over intra-
state rates fixed by state commits
sions.
ITO force railroads, dissatisfied
with state laws, to test each and ev
cry state law as confiscatory up to
the supreme court.
ITO direct the work of physical
valuation of railroads by the inter
state commerce commission and ev-
cry state commission with clear, new,
distinct standards laid down by the
highest court"
Government officials declared that
the most farreaching principle estab-
lished was that giving states the
right until congress intervened to reg
ulate intrastate rates, even though
they affected interstate rates.
This decision upset all rumors that
the court was split upon the big point
in the case. Its prime effect is that
all state rates stand, unless declared
confiscatory by the federal court, until
congress intervenes.
Federal officers thought 1t imprOb-
able that congress would lay down a
standard uniform rate law for years,
leaving the state unhampered, except
to give, reasonable returns to- rail
roads in their intrastate rate max
ing.
Almost equaling in importance the
states rights principle enunciated by
the court was it's decree affecting
physical valuation of railroad prop.
erty.
Declaring the valuations made by
the circuit court of the Northern Pa
cif1c and Great Northern roads ex-
cessive the court asserted that the
standard of physical valuation was
not the cost of replacing the railroad
property anew. It asserted that de-
probation of property should be con-
sidered. This dictum is expected to
guide the interstate commerce COM
mission and the states in physical
valuation work in the future as well
as fix gauge for determining If
state rates are confiscatory or not.
Question of Valuation.
"The question is" the court de-
clared, whether in determining the
present fair value of the property as
a basis of it's charges to the public it
is entitled to valuation of it's right
Of way, not only in excess of the
amount invested in it, but also in ex-
cess of the market value of contiguous
property.
ut is clear that in ascertaining the
present value we are not limited to
the actual amount of investment II
there have been betterments and i'm
provements. losses may have been
sustained which the public does not
underwrite. The value charged to the
public shall be reasonable. Increases
Il sought for railway value (cost of re-
placing the property anew is an in
crement over all outlays of the car
rier and over the values of similar
property in the vicinity. The in
crease cannot extend beyond the fair
average of the normal market value
of land of similar character. Other
wise We enter the realm of mere con-
lecture. 1t was error to base the es-
Inmates of the value of right of way,
yards and terminals upon so called
railway value of the property. The
allowance made for conjectural cost
of acquisition must be disapproved. !"
That the valuation of railroad prop
erty should and must be considered in
figuring the actual physical valuation
was declared by the court.
1t held that the appraisement should
be an instrument of public service of
property and not of the skill of the
users.
when physical items are estimat-
ed," the court asserted, "as worth so
much now, if in fact they be depreciat-
ed, this amount should be allowed
for. If this is not done the physical
valuation is manifestly incomplete"
In calculating value of property for
state and interstate traffic, on fixing
rates, the court declared:
There should be assigned to each
business that proportion of the total
value of the property which will cor.
respond to the extent Of its employ
ment in that business"
The court disapproved the finding
that the cost of intrastate commerce.
upon the basis of property employed
therein, is two and one-half times that
Of through haul '-busi-
ness, but did not establish any hard
and fast rules for such computations.