The Tacoma times. [volume] (Tacoma, Wash.) 1903-1949, 1916-08-05
RAIL ROADS PLACED BEYOED
POWER OF STATES BY HUGHES
DECISIONS 50 They LIKE HIM


sSS4& 800 e~>e@8J
- Charles e. Hughes decisions
as supreme court justice and acts
as New York governor entitle
him TO the railroads support for
president.
AS governor he vetoed the two
cent fare and full-crew bills.
As Justice he has concurred
in decisions that:
(D-State and nation can ex-
ercise no control over railroads
except in the narrow field of
transportation.
(2)-Private shippers cannot
recover damages when their
businesses are ruined by illegal
rebates.
(3-Congress and the federal
courts can wipe out state railway
laws and commissions that COM
pei rate reductions.
(D-Railroads in determining
reasonable rates" can include
in their valuation land given by
the people to them.
The first decision referred to
was in the case of the Great
Northern railroad VS.. Minnesota;
the second, that of the Pennsyl-
vania railroad VS.. the Interna-
tional Coal Co.
Hughes greatest service to the
railroads was performed, how
ever, when he wrote the decision
in the Minnesota rate case. The
people apparently got the DECI-
SION, but the corporation got
the LAW.
This case came from the lower
federal courts. where Judge San
born handed down a decision that
was denounced by resolution in
the governors conference, at
Lake Mohonk, where special
committee of governors was Gre
ated to notify the supreme court
that II the Sanborn decision was
sustained, it would be resisted by
the states.
With this ominous threat of Or
ganized resistance, the case came
to Hughes, who had been selected
to write the decision.
Justice Hughes gave every ap-
pearance of reversing the San
born decision. while in reality he
sustained Judge Sanborn on every
point of law for which the rail-
roads were seriously contending.
He ruled that the main princi-
Piles upon which the Sanborn de-
cision was based were right, but
that in the Minnesota cases the
principle had been too narrowly
applied.
Thus 1t was ruled that the San
born decision was right in hold
ing the courts could annul rates
fixed by the state, if they we're
unreasonably low, but that in
the particular cases before the
court the rates were confiscatory
in only one out of the three roads
affected.
Even in the case of the road
for which the rates were held
confiscatory, the net earnings
were $4,000, yielding 3.5 per
cent on the enormously inflated
valuation allowed by Judge San
born.
In fixing the basis of valuation
used in determining whether or
not the rates were reasonable,
Judge Sanborn had held that in
valuing the railroads real es-
tate, a large part of which had
been given to the road by the fed
eral government or bought for
a song 40 years ago, the road
was entitled not only to put it in
for what it would cost to acquire
the land today in the heart of
cities and thickly populated dis
tricts, but also to multiply that
value by two on account of the
special purposes for which it was
to be used.
As result. the total valua-
ton of the roads allowed by
Judge Sanborn was So per cent
greater than their total capitali-
zation, which included millions of
dollars of watered stock.
This was too raw for Hughes.
so he held that while the railroad
was entitled to charge up the
theoretical cost of acquiring its
right-of-way at present-although
it may not have cost one-hun-
dreth OF that amount-the cor
poration was not entitled to any