New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1915-03-09
Rules States Cannot Com
pei Carrying Any Traf-
fC at a Loss.
w. VA. PASSENGER
TARIFF INVALID
Two.Cent Fare and North Da-
kota Coal Rate Laws Over
thrown by Decision.
lF1om The Tr.sune Bureau.l

Washington, March s.-The United
States Supreme Court came TO the res
cue Of the railroads to-day by declar-
ing invalid the two-cent passenger law
of West Virginia and the North Da-
kota law fixing a maximum intrastate
rate for the transportation of coal In
both instances the courts opinion, de-
livered by Justice Hughes, held that
not single out commodity and compel
and reatfrmed its declarations that the
railroads were entitled TO reasonable
return on the service given. justice
Pitney alone dissented.
The cases from the Supreme Court OF
North Dakota, which upheld the state
law, are the more important. They
were appealed by the Northern PACING
and the Minneapolis, st. Paul q Sault
Ste. Marie railroads, which contended
that the rates provided in the state law
would compel them 10 carry coal at
loss. e.,
The state contended that the rail-
roads were making a fair proht on
interstate business, and the federal
Supreme Court ruled that q state could
not single out a commodity and compel
the railroads to carry il at loss be-
cause they made a profit on their en-
tire intrastate business.
at is presumed" Justice Hughes
said, "but the presumption is re-
buttable one, that the rates which the
state fixes for intrastate traffic are rea-
sonable and Just. When the question
is as TO the profitableness OF the mira
state business as q whole, under gen
eral scheme Of rates, the carrier must
satisfactorily prove the fair value OF
the property employed in its intrastate
business and show that II has been de-
MED a fair return upon thet value.
With respect to a particular rate, II is
recognized there is a wide field OF leg
islative discretion, permitting variety
and classification, and hence the mere
details Of what appears to be reason
able scheme of rates or tarih or
schedule affording substantial com
pensation are not subject to judicial
review.
"But this legislative power cannot be
regarded as being without limit. The
constitutional guarantee protects the
carrier from arbitrary action and from
the appropriation Of its property TO
public purposes outside the undertak-
irg assumed; and where 1t IS estab..
hshed that a commodity or class OF
traffic has been segregated ana rate
imposed which would compel the carrier
TO transport il for less than the proper
cost of transportation, or virtually at
cost. and thus the carrier would be de-
MED a reasonable reward for ITS SER
vice after taking into account the en-
tire traffic to which the rate applies, 1t
must be concluded that the state has
exceeded its authority"
The conclusions of the court In the
West Virginia case. which was brought
against the Attorney General of the
State by the Norfolk e. Western, were
hardly less emphatic, although the
point was less involved. OF the 2-cent
passenger law Justice Hughes said:
at is apparent from every point or
Wow that this record permits that the
statutory rate at most affords a very
narrow margin over the cost of the
traffic. II is manifestly not case
where substantial compensation is per
rnitted and where we are asked TO
enter the domain Of the legislative dis
erection; nor is il one in which 1t is
necessary to determine the value of the
property employed in the intrastate
business.
ut is clear that by the reduction in
rates the company is forced TO carry
passengers, if not at or below cost, with
merely a nominal reward, considering
fhe volume of the traffic affected. We
find no basis whatever upon which the
rate can be supported, and it must be
concluded in the light of the principles
governing the regulation OF rates that
the state exceeded its power IN lmpos-
ing it."