The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1913-06-10

otherwise would clearly be within Its
province"
The ConBscntory Phase.
In taking up the confiscatory phase
Of the controversy. Justice Hughes first
considered whether the rates were con-
nscatory as applied To the Northern
Pacific. He said this would turn upon
what Was the fair value" Of the rail.
roads property. He tested the lower
courts theory OF arriving at fnir
value by finding the reproduction cost
new by ascerta ming how this theory
worked on the value of the railroad s
land. He declared the lower court was
in error in adding 80 per cont to the
normal value of the land in some in
stances and 200 per cent at the big
terminals. In arriving at what the court
considered the cost OF reproducing it's
property.
He next considered the lower courts
plan OF apportioning expenses on the
basis that 1t costs two and a half times
AZ much to do interstate freight bust
ness az II did 10 do interstate, as well
Az larger amount to do intrastate
passenger business than 10 do inter
state. He said the expenses had not
been kept separately in the accounts
or statistics OF the company, and that
testimony to the differences in ex-
penses varied widely. and that the in
tricate question OF whether the rates
were confscatory could not be dccid ed
Oh proof OF such a general character
APPLYING these principles TO the
Northern Pacific, the justice held that
neither the value OF the property en-
nloyed. nor the share of expenses at
tributable to intrastate business had
been proven satisfactorily TO show that
the railroads property vas conhscated
= similar conclusion was reached by
applying the principles TO the Grea,
Northern Railroad.
Coming TO the Minneapolis and st
Louis. ne found that the net return in
1905 10 that road was lcss than l.,
frF cent. and that the errors Of csti-
mating value. and OF apportionmen,
were not sufficient to change the re-
suits.
The Oregon Cases.
In the Oregon cases. II was claimed
that there was an interference with
Interstate commerce. The Oregon Rail
road and Navigation Company claim ed
that the State Railroad Commission. in
, reducing the State freight rates from
Portland 10 Eastern Oregon cities eff
fected reduction OF interstate rates
to those cities. because the State rates
were used basis for the interstate
rates. q similar claim was made By
the Southern Pacific Company az to
rates along its line. The United states
circuit Court for Oregon upheld the
rates. An attack was also made upon
the constitutionality Of the law Great
ing the Oregon Railroad Commission
That, too. was upheld by the lower
court.
In the Arkansas cases. brought by
the St Louis. Iron Mountain and South
/ err Railway and by the St Louis
Southwestern Railway. the United
States Circuit Court for Eastern
Arkansas held that the maximum
freight rate orders and the 2-cent pas.
senger fare Law were unconstitutional
because they were conhscatory
The West Virginia case arose out Of
sun by the Chesapeake and Ohio Rail
way Company 20 test the validity OF the
2-ccnt passenger law. The Supreme
Court of West Virginia upheld the
law.
Opinion Delivered by Hughes.
Justice Hughes said:
u. The Constitution gives Congress:
an authority a, all times adequate 4
secure the freedom OF Interstate com,
mercial intercourse from State contro
and 70 provide effective regulation o
that Intercourse az the national inter,
est may demand
"2. The commerce that is confined
within one state and does not afec
other states is reserved to the State
This reservation is only of that po<ve,
f. which is consistent with that grantee