Omaha daily bee., 1919-05-04
BILLIONS ARE
ASKED FOR BY
ROADS AS REFUND.
Continued From Page one.)

NNvAsAAAuSA EAVaAA = ~ Onesy
order increasing freight rates
throughout the country at large by
rs per cent. The order also in
creased the passenger rate in North
Dakota from 24 to cents mile;
in Minnesota from 2 to 3 cents a
mile and increased passenger rates
in all states to 3 cents a mile where,
the old rate had been less, 1t did
not change the rate in states where
the olds fare had been 8 cents or
over.
Suit Launched. Z
Attorney General LANCER of
North Dakota in behalf Of his state
entered action against all railroads
operating within the commonwealth.
By stipulated agreement with Di-
rector General of Railroads Walker
D, Hines, THE action against the
Northern Pacific company was made
test case.
The plaintiff took up the theory
that congress conferred no powers
on the president Of the United
States in the army appropriation
bill of August %, 1916, to Interfere
with the rates charged by transport.
tation industries wholly within the
States. He argued that under the
constitution the president has not
the power to regulate intrastate af-
fairs.
The plaintiff denied that the pres
ident has the power to mobilize in
dustries, and contended that that
power rested only with congress;
that the president as commander
in-chief of the army and navy only
had power within the zone of hos
tilities. Director General Hines
contended that the president has
such power through. act of con-
Rights Rest With State.
However, LANCER commended that
a proviSo in the congressional act
of March q, 1918, reserved to the
several states the taxing powers
and the enforcing of lawful police
regulations. Under this he claimed
that the power to regulate rates is
based upon the right of police pow
ers, and that, therefore, by act of
congress itself, the fixing of rates
was reserved to the state.
Action was brought before the
supreme court of North Dakota
against Hines and the railroads,
and an injunction was sought to
prevent the roads from continuing
the higher rates. The supreme court
was asked to declare the higher
rates illegal and to issue an order
reverting to the rates prior to the
war. ~
= The case was won in the North
Dakota supreme court. and Attorney
General LANCER entered into an
agreement with Director Hines stip-
ulating that the Northern Pacific
case again be used as test and
taken to the United States supreme
court, and that all other railroads
would be governed by this decision.
Since the inception of the Northern
Pacific case, 20 other actions con-
corning interstate rates have been
started in other sections of the ma
ton.
Mammoth Sum Involved.
AS conservative estimate, up
wards of $1,750,000,000 will be- re-
coverable from the railroads under
the federal railroad administration
in case the United States supreme
court upholds the decision of the
North Dakota supreme court.
While the legal action in itself
does not in any way call fer a re-
funding of alleged illegal and Excess
sive charges,it does, however, if a
favorable decision is handed down,
pave the way for thousands of law
suits for recovery of one-fourth of
all that has been paid by shippers
for freight carrying since December
Is, 1917.
In preparation of the data, assist
ance has been proffered by the legal
departments of practically all the
northwestern states. Attorney F.
E. Packard of the North Dakota
tax commission, a special assistant
tc Attorney General LANCER, is as
ISOLATED with the latter in conduct
ing the action.