The Fargo forum and daily republican. [volume] (Fargo, N.D.) 1894-1957, 1913-09-15
Cases Before u. S.
Supreme Court Once;
Sent Back for Retrial
New and Very important Doctrine Of Jurisprudence Laid Down
In These Cases for First Time
History Of Case One Most Important Chapters Of Litigation
In the History Of the Northwest

Bismarck, N. D., Sept. 15.-The re-
opened Ignite coal cases were before
the supreme court Saturday. These
cases are assuming unusual import
ance in view of the doctrine advanced
by Atty. Gen. Andrew Miller, which
was laid down in these cases when
they were previously decided in this
state in the opinion rendered by
Judge Fisk in the case entitled, state
Of North Dakota ct al. vs.. Northern
Pacific Railroad, 19 N. D. This opin-
Ion was filed in April, 1909, and this
doctrine was laid down in the IAN
suage of the court:
THE proper test as to whether the
rates thus fixed are reasonable or un-
reasonable is not whether the rate fix
ed on the particular commodity Is suf-
ficiently high to enable the carrier to
earn a fair compensation after allow
ing for the legitimate cost to the car
rier of transporting the same, but
whether, under such rates, 1t will be
enabled from it's total freight receipts
on all its intrastate traffic to earn a
sum, above operating expenses reas-
enable necessary for such traffic, sutfi-
cient to yield a fair and reasonable
profit upon it's investment. 1t Is with
in the power of the legislature to re-
duce the freight on a particular arti-
Gle, provided the carriers are enabled
to earn fair profit upon their intra-
satte business"
Inasmuch as this case was carried
10 the supreme court Of the United
1btates and the rates sustained, sub
sject to a rehearing after the rates
had been tried, 1t has become of such
Importance in the view Of the com
i1on carriers that it is being fought
thost stubbornly. While the amount
Of traffic involved is small. the gross
revenue being not greatly in excess OF
100000 from the entire Ignite coal
traffic in the state, yet the doctrine
laid down by the North Dakota court
is of such a nature that the case as
sumes Importance out of all proper
ton to the sum involved.
The old doctrine under which rates
were regulated was that common car
riers were charging excessive rates
and the police power was invoked by
the courts to protect the public from
these excessive charges. Under the
doctrine laid down by the North Da-
kota court a rate which does not con-
tribute at all to the net earnings Of
the carrier, or which might even be so
low that the revenue did not cover the
operating expenses is not cOnfiscatory
SO long as the total revenue derived
from all of the traffic in the state
yielded a reasonable revenue. In
brief the North Dakota court applies
the usage of the railroad classification
in such a manner that rates might be
fixed so as to encourage industries or
to benefit the people regardless of the
actual revenue from the commodity
in question, so long as the railroad
business in the state pays reason
able profit.
On the other hand the railroad COM
panies contend that each and every
commodity must yield something to
the total net revenue. which it is nee
essary for the common carrier to ac
in order to attract capital
and continue business. While they ad
nit the classification Of commodities,
yet they contend that the classifica
tions are so adjusted that each COM
modify yields certain net profits. =, r.
History of Case.
The history of this railroad rate case
is an interesting one. Chapter 81 Of
state coal rate which reduced the rate
then in force by the various railroads
about one-third. No attention was
paid to this statute until in August
1907, when a suit was instituted by
the state for the purpose of enforcing
these rates. This action eliminated
in the opinion Of Judge Fisk, handed
GOWN. April lb, I3U7, enunclaClng the
doctrine discussed 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 rendered a decision April 10,
1910, sustaining the North Dakota
court, but leaving the matter open un-
til such time as the railroad companies
had tried the rates. If. after reason
able experiment, it were found to be
unsatisfactory they might reopen the
case for further consideration by the
courts. This was accordingly done in
July, 1911. A proper referee was des-
ignated by the court to take the testi-
mony. The hearings were held in the
twin cities, the state of North Dakota
being represented by Attorney Gener-
al Miller and Assistant Attorney Cen
eral Young; the railroad commission,
largely through Chairman Stutsman
and Rate Expert Little, assisted at
these hearings; the state secured Mr..
H1llman 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 the various rate
cases which have found their way in
the state and the United States courts.
This expert made an exhaustive ex-
animation of the books of the various
railroad companies and his conclusion
was written into the records of the
case at the various hearings in st.
Paul. as well as the contentious of the
y A