Bismarck daily tribune. [volume] (Bismarck, Dakota [N.D.]) 1881-1916, 1915-03-09
STATE UNABLE TO REQUIRE
RAILROAD TO CARRY COM
MODIFY AT A LOSS, SAYS
JUSTICE HUGHES.
IS. SECOND DECISION IN CASE
Theory Of Deriving Cost Of Car
rying Commodity Erroneous Ac-
cording to Federal Tribunal.

North Dakota's distance rates on
Ignite coal were annuled yesterday
by the UnateG States supreme court.
After confirming the state supreme
court once the fedsral court on Sec
Ond review sustains the contentious
of the railroads. An Associated Press
dispatch follows:
The supreme court yesterday laid
down the principle that it is beyond
the power of states to require railroads
to carry one commodity or class; of
traffic at loss or only at nominal
profit even though an adequate profit
! is obtained from it's business as
whole within Tie state.
Rates Are Annuled.
Under this principle the court an.
nulled the North Dakota Ignite coal
rate law az toathe Northern Pacific,
and 500 railroads.
In arriving at it's general conclusion
the court held that when the state
selects one commodity or class or
traffic for regulation, it must .apnor-
tion 70 it a proper part of all general,
expenses and then allow substantial
compensation. s.f
Can't Shift Cost Burden.
"The state cannot estimate the cost
Of carrying COAL" said Justice Hughes
"in the North Dakota case by throw
of roadbed and general expenses upon
the carriage of wheat or cost of carry
ing wheat by throwing burden Of up
keep Of property upon coal and other
commodities"
The supreme court of North Dakota
had held the rates valid because roads
had not shown there was loss on
their entire state business. That is
reversed by the superior court. All
but Justice Pitney concurred. In con-
cluding and summarizing, Justice
Hughes said:
1T is presumed but presumption
is rebuttable one--that rates which
state fixes for interstate traffic are
reasonable and just. When the ques-
tion is as to protiitableness of intra-
state business as whole under the
general scheme of rates. the carrier
must satisfactorily prove the fair
value of property employed in it's in
tra-state business and show that it
had been denied a fair return upon
that value" ..
Respect to Particular Rates.
"With respect to particular rates.
it is recognized that there is a wide
field Of legislative discretion permit
ting varity in classification. hence
the mere details of what appears to
- n, oS
tariff or schedule affording substan-
tial compensation, are not subject tt>
judicial review. But this is legis.
lative power ard cannot be regarded
as being without limit.
Protects A Carrier.
"The constitutional guaranty pro.
tects carrier from arbitrary action
and from appropriation of its proper
ty to public purposes outside of un.
dertaking assumed and where it is es
tablshed that commodity, or class of
tariff have been segregated and I'M
imposed which would compel carrier
to transport it for less than proper
cost of transportation and virtually al
cost. Thus a carrier would be denied
a reasonable reward for it's service af-
ter taing into account the entire traf-
fc to which the rate applies and it
must be concluded that the state has
exceeded its authority.
Appropriation Of Property.
"While local interests serve as mo-
tive for enforcing reasonable rates,
it is very different matter to say
state may compel carrier to main
tain rate less than reasonable to
build up a local enterprise. That
would he to go outside Of a carriers
undertaking and be equivalent to the
appropriation of its property to public
uses npon terms to which the carrier
had in no way agreed. It does NOT
aid the argument to urge the state
may permit the carrier to make soou
its loss by charges for other trans
portation If other rates are eXorbl
tant they may be reduced.
The court left undetermined the
exact elements to he considered in f1x-
Continued on Page Four.l