The Birmingham age-herald., 1913-06-10

Continued from Page One)
phase he took, it for granted that the
state had the power to regulate rates De-
tween points within the state of Mime
sofa on railroads not crossing state lines.
and so far from the boundaries as not
to compete with the cities of other states,
or otherwise affect interstate commerce.
He next reached the conclusion that
intrastate rates, whether on purely intra-
state railroads or interstate railroads,
had not been regarded by the courts as
being a direct regulation of interstate
commerce. lie pointed to the regulation
of rates on railroads in Illinois, and the
Erie canal in New York, by the respec-
tive states concerned, in support of his
conclusion.
The most intricate argument in this
phase of the controversy was made by
the justice, in considering whether state
rates in interstate carriers could have
such an indirect bearing on interstate
commerce as to exclude the states from
imposing them. lie reached the conclu-
sion that this was a we'll known field,
In which the states could exercise their
authority until Congress had seen fit to
regulate the field exclusively. Finally, he
arrived at the conclusio nthat Congress,
in all its rate making legislation, had ex-
pressly provided that the regulation
SHOuld not eNIenu 10 lldllSPOl ttaeiOi NAOi-
ly within state.
Reviews Decision
Justice Hughes reviewed decisions of
the court from its very foundation.
"Our system of government is a prac-
tical adjustment" said he, by which
the national authority as conferred by
the constitution is maintained in it's
full scope without unnecessary loss of
local efficiency. Where the subject is
peculiarly one of local concern and
from its nature belongs to the class
with which the state appropriately
deals in making reasonable provision
for local needs, it cannot be regarded
as left to the unrestrained will of in
dividuals because Congress has not act
ed, although it may have such re-
lation to Interstate commerce as to be
within the reach of the federal power.
In such case Congress must be the
Judge of the necessity of federal ac-
ton It's paramount authority always
enables it to intervene at its discre-
ton for the complete and effective gov
ernment of that which has been COM
nfitted to it's care, and, for this pur-
pose and to this extent in response
to a conviction of the national need, to
displace local laws by sub ubstituting laws
of IFS own"
Among the laws which the states
may pass Indirectly affecting interstate
commerce were mentioned state inspec-
tion laws, state employers liability
laws and quarantine regulations. He
said that rate making was to be class
flied with these.
Build Own Railroads
"It has never been doubted" said he,
that the state could, If it saw fit
build its own highways. canals and
railroads. 1t could build railroads trav-
ersing the entire state and thus join
it's border cities and commercial cen
ters by new highways of internal in
tercourse, to be always available upon
reasonable terms. Such provision for
local traffic might indeed alter relative
advantages in competition and by vir-
tue Of economic forces those engaged
in interstate trade and transportation
might find it necessary to make re-
adjustments extending from market to
market through a wide sphere of in
huence, but such action of the state
would not. for that reason, be regard
ed as creating a direct restraint upon
interstate commerce and as thus trans
cending the state power. similarly, the
authority OF the state to prescribe what
shall be reasonable charges of common
carriers for intrastate transportation.
unless it be limited by the eXertion of
ltlt pONci VI N-oHS itSS,
is statewide. To say that
power exists, but that ii may be eX-
ercised only in prescribing rates that
are on an equal or higher basis than
those that are fixed by the carrier for
interstate transportation. is to maintain
the power in name, while denying it
in fact. 1t is to assert that the eXer-
else of the legislature Judgment in de-
termning what shall be the carriers
TO ha N tra ct; 1ta i, II
self subject to the carriers will. But
this statewide authority controls the
carrier and is not controlled by it; and
the idea that the power of the state
to fix reasonable rates for its internal
traffic is limited by the mere. action
of the carrier in laying an interstate
rate to places across the states border,
is foreign to our Jurisprudence.
Congress Must Restrict
"If this authority of the state be re-
strieted, it must be by virtue of the
paramount power of Congress over in
terstate commerce and its Instruments.
and, in view of the nature of the sub
ject, a limitation may not be implied
because of a dormant federal power.
that is, one which has not been exerted
but can only be found in the actual
exercise of federal control in such
measure as to exclude action by the
state which otherwise would clearly be
within its province"
In taking up the confiscatory phase
of the controversy, Justice Hughes
first considered whether the rates were
confiscatory as applied to the North.
ern Pacific He said this would turn
upon what was the fair valuep of the
railroads property. He tested the low
er courts theory of arriving at fair
value by finding "the reproduction
cost now by ascertaining how this
theory worked on the value of the
land. He declared the low
er court was in error in adding 80
per cent to the normal value of the
land in some instances and 200 per
cent al the big terminals in arriyin