The Chattanooga news. [volume] (Chattanooga, Tenn.) 1891-1939, 1919-06-18
Railroad and Public Utilities
Commission Gives Memphis Increase
Street Railway May Charge Cents for Fsre-Excepts
Onn

THAT the legislature could not IT.
Iself, or through delegation of power
tempted TO- do SO (Which do not think
II has, MS will be hereinafter shown,
surrender the right by contract. or to
barter away the right by contract for
period Of years, to regulate and hx
phis or elsewhere. II the public welfare
In that community demanded that said
rates should be regulated. either by in
creasng or lowering them. l. think
that this same rule obtains and has been
enunciated by the courts OF last resort
IN a very large majority Of the states
in the Union
$50, as far as the constitution Of
Tennessee is concerned, do not believe
that, giving the act the Interpretation
! that IL gives TO your board the power to
Tfix these rates and regulate them, not
withstanding this ordinance, is uncon-
stutional or void. I Believe the act
undertakes to give you such power I'M
der said sections and II. and do not
believe It is obnoxious to the Tennessee
constitution for this reason. Judge
James b. Newman, of the Second chan
Gerry division, so held and this question
is now IN the supreme court of Tennes-
see for decision in a case where the city
filed bill against your honorable body
to enJoin the present hearing
After arguing this question at some
length and, reciting authorities support
ing his. position he draws the following
conclusions:
$50 do not hink that the state del
egated the rate-making power to the
city,.
$50 I do not think 1t delegated to the
city the power by contract to surren-
nifty years to regulate the rates for any
other period of time.
| ~ think while 1t delegated to the
city the power to require its consent
from the railway company before 1t
contracts with the railway company
for the regulation and operation of cars
ana the location of the tracks, that it
did not surrender its sovereign police
power OF regulating, fixing and chang
ing the rates whenever the public wei
fare demanded that 1t exercise said
power.
Z" Evidently the trainers of this act
TOOK this view. Of 1t because in the third
TO nix rates 'howsoever the same may
have been heretofore fixed and estab-
lished. And again this act prohibits
you from violating all contracts be-
and incorporated towns in the state ex-
cept contracts with respect to rates,
tolls and fares. Not only so, but the
increased cost Of such contracts as you
are not permitted to violate are to be
taken into consideration by you look
ing to the cost of service when fixing
rates, even though said rates have
heretofore been fixed by contract.
summing up. the attorney general
~ am. therefore, OF the opinion that
this act does undertake to delegate to
you the power to fix the rates OF all
public utility corporations
That this power, is to be exercised
even where contracts of this nature
have been entered into fixing the rates
heretofore.
That these ordinances. when given
construction that they are contracts,
u ,he to ad OF which cannot be
the state to fix the rates through the
legislature or to delegate the power TO
your body to fix the same, is beyond
the jurisdiction Of the charter of the
| city of Memphis as well as the charter
| of the railway company.
am still further of the opinion
that this ordinance does not make a
contract the obligations of which would
s PC violated either under the state or
FEDERAL constitutions by charging these
rates and ignoring the same
! In a supplementary opinion delivered
az the request of the attorneys for the
city OF Memphis, the attorney general
commission, in the case Of Public sery-
ice commission VS.. Consolidated Gas.
Electric Light and Power company
Public Utility Reports 1919 A (advance
lohCCL 4NO. II page 0b), says,
IL is the fact, of course, as I at
tempted to make plain in my former
opinion, in dealing with this question
OF ratese. as well as the contract be-
tween the city and the street railway
company. that you are exercising the
police power of the state, delegated to
you by the legislature. In doing this
you cannot of course, look alone to the
interest of the street railway company
or IT'S bondholders or stockholders, but
fTt ha int 80
railway company, insofar as the main
tenance of its property and service is
concerned. The depreciation of the
property and service caused it's insol-
yency, and therefore its inability to rem
der the service and accommodate the
people and give to them prompt and
efncient service, and the amount, of
revenue to accomplish this are the
Ttnings which are controlling, in my
opinion, the exercise of this police
power f0o
1T appears from the record In this
case that an emergency has arisen in
the affairs of this company; that it
arose in 1918, and that the emergency
condltlonS nave continued in an aggra-
waited form up to the present time, and
that the emergency was due originally
to phenomenal increase in the cost of
supplies and materials used by street
railway companies, and to the award of
the war labor board, which fixed upon
the company an additional wage cost of
somewhere between $25O0OO and 5000
VOO per annum, and there was an in
creased GO cost for coal alone of approx
mately $4,000 per annum. That award
was made in October, 1918, and was re-
| troactive to Aug. /, 1918. The scale of
wages then fixed still obtains, and there
mas been no material decline in the cost
lof supplies and materials used nv
street railwa companies.
The war labor board, headed by
EX-Presfdent Taft, recommended to
the authorities that there should be an
increase, of at least one cent. SO as to
make the rare six cents, and probably
more than that, on account of the in
crease in wages fixed upon the com
Ipany by the award of said board
Messrs Taft and Walsh, discussing the
matter said:
This is not a question turning on
the history of the relations between the
local street railway and the people of
Memphis. The Companys just claim
Tor an increase in fares does not rest
upon any right to dividend upon cap
ltal long invested in the enterprise. The
increase in fare must be given because
of the immediate pressure for money
receipts now to keep this street rail-
way running. so that it may meet the
local and national demand for its sery-
Ice. The credit of the company in
floating bonds is gone. Its ability to
borrow on short notes, if any, is most
limited, The eXigency presented arises
because of the great increase in the
cost of material and of operation and
in the need for an increase in wages
The public should pay an adequate war
compensation for service which can
not be rendered except for war
prices"
THE commission holds that the facts !
presented in this case show that an
emergency exists, such as is contem-
plated in the statutes, and in the de-
! cisions of the commissions and the
courts, and that emergency relief should
be granted. The fact that relief was
not granted when the emergency first
arose, certainly should not be made a
reason for refusing to grant relief now,
| when the company is in the hands of