The sun., 1919-09-30
HUGHES ANALYZES
CUMMINS R. R. BILL
Saws "Excess Earnings" Provi-
sion Is Unconstitutional in
Certain Applications.
HIS OPINION WAS SOUGHT
Declaration Is in Letter to
Counsel Of Association of
Railway Executives.
HIS OPINION WAS SOUGHT

0ndElcS I1usHcHf AoAMCAAy JUSTLY
OF the United States Supreme Court, has
declared that the Federal Constitution is
violated by the provision in section Of
the Cummins bill as to the payment Of
"excess earnings in its application TO
carriers not operating under Federal
franchise or contract permitting the Inn
position of such a condition. His decla-
ration is contained in a letter to Alfred
T. Thorn, general counsel of the Assoc
citation of Railway Executives, made
public yesterday. The provision Is UNI
constitutional he says in effect, because
II deprives the carrier of the right to
enjoy and retain its own property. The
opinion expressed by the former Supreme
Court Justice was in part as follows:
81 assume that II Is the intent of the
provision as to the payment by a car
rier of excess earnings to the Railway
Transportation Board that the half to
be put by that board into the employees
welfare fund is to be used under section
% of the bill for the benefit Of railway
employees generally. and not separately
for the benefit of the employees of
the particular carrier paying the 'ex~
cess and that the other half of the 'ex-
cess earnings to be used otherwise by
the board may be used in the purchase
of equipment to be leased or In making
loans to carriers other than the carrier
making the payment. In short, 1t Is
the essence of the provision that the So
called excess earnings of carrier may
be required to be paid to a Government
agency for the purpose of being used
by that agency not only for the general
benefit Of railway employees but for the
benefit of other carriers.
How to Consider Requirements.
ut should be observed that this re-
uurement is not made as condition
for the exercise of any franchise granted
10 the carrier by the Federal Govern
meut. 1t is to be considered in its appli-
cation TO carriers chartered by the
States and entitled to engage In inter-
state commerce on compliance with such
regulations as Congress may constitu-
tionally prescribe. Under the doctrine
of the recent decision in Hammer ".
Dagenhart (247 U. S. 251). the right to
engage in the business Of transporting
passengers or of ordinary and whole
some commodities between the States,
while subject to appropriate regulation,
may not be deemed to be subject to the
absolute prohibition Of Congress and
hence is not to be regarded as a privi-
lege to be granted on any terms Con-
gress may see At to impose.
Nor is the requirement with respect
10 lllpOSco do - Soh
diton of the enjoyment of any guar
anty as to earnings which has been
given by the Federal Government and
accepted by the carrier. thus constitut-
ing a contrast governing the carriers
operations. The carrier still must take
its risk of losses. If 1t be said in a gen.
eral sense that the provisions as to rates
constitute a guaranty of proper and
adequate rates, this Is no more than the
promise of the reasonable exercise OF
the power of regulation. There is nc
benefit conferred upon the carriers
under the bill which can be regarded as
justifying an eXaction which otherwise
could not be enforced
Further, the requirement as to the
payment of excess earnings does not
purport to be imposed under the taxing
power and in my Judgment could moi
in its present form be sustained as q
valid tax independently of the power OF
regulation 1t would seem to be cleal
that the constitutional authority which
would be invoked in the enactment OF
this legislation would be solely the
power of Congress to regulate interstate
commerce.
Beyond Limit of Any Decision.
1.-THE provision of the pending bill 4
Hpl a ldA ldAu upOll all VIII
respect either TO gross receipts, ne
receipts or any other basis for the as
sessment of a tax, but is simply re
ouirement of the payment to the Gov
eminent Board of the excess earning
of a carrier which the Interstate Com
merce Commission determines to b.
more than fair return upon the valu
Of its property. Such an exaction goe
beyond the limits OF any decision know
H. III ~I
the so-called excess earnings are col
lected by the carrier are to be deeme,
TO be Just and reasonable rates, fixet
and maintained as such under TIL
authority of law, l am unable to escap
the conclusion that the requirement al
to the payment Of the so-called excess
earnings of a carrier exceeds the con
stitutional authority OF Congress as ap
piled TO carriers not transacting thei
business under a Federal franchise o
contract imposing such a condition.
"I do not understand that rate
charged by a carrier for the services
renders can properly be regarded a
unreasonable with respect to the carrie
and at the same time as REASONABLE
with respect to those who pay the rate.
The question of the reasonableness @
the rates is essentially a questio
whether the charge made by the carrie
ana pald by the shipper or paSSenBe
for the service rendered is a charg
which the shipper or passenger shout
pay to the carrier and the carrier shoul
receive for that service.
1T is established that the rate is
unreasonable with respect to the carrie
ger TO pay, II is the carrier that render
the service for which the rate is to b
paid and It is proper that the carrie
lawfully performing the service and fur
nishing all the required facilities there
for should receive and enjoy the proceed
of the rate thus charged.
IAN attempt to dvest the carrier @
any portion OF its earnings thus obtaine
on the theory that the charges which
was Reasonable for shippers and passen
gers to pay for its services it was UT
reasonable for the carrier to receive an
retain would, in my judgment. be outsid
the scope of appropriate and valid regu
latiOn The mere fact that 1t is pro
posed TO devote the moneys or propert
of a carierr or of any other person {
good uses cannot be regarded as justify
ing the deprivation Of the carrier Q
such person OF the right to enjoy an
retain his own property except as It ma
be taken for proper Governmental pun
poses through valid taxation or for pub
lie use on the payment Of just comper
sation."
London Money Market.
LONDON, Sept. 29.-Bar silver, 62MI
per Money. Az mar rant nj,