The Brattleboro daily reformer. (Brattleboro, Vt.) 1913-1955, 1919-09-30
CUMMINS BILL
UNCONSTITUTIONAL
G. E. Hughes Holds That Government
Has No Right to the Earnings of
Railroads-Can Only Tax Them.

WASHINGTON, Sept. 29.-Holding un-
constitutional the provisions of the Cum
minis bill for railroad reorganization which
would take for the government excess
earnings of the roads over a "fair return. !"
an opinion by Charles f. Hughes, rem
dered to the association Of railway execu-
tives, has been fled with the house inter-
state commerce committee considering the
bill.
Former Justice Hughes contends in
brief, that if rates which produce so-ealed
excess earnings are just and reasonable
rates, as they are presumed to be when
fixed and regulated by the interstate COM
merce commission, then the earnings from
those rates are the property of the rail-
road companies, which may be taxed, but
cannot be taken away, as that, he argues,
would be confiscation.
"All the rates fixed and maintained" "
he says, "are at all times open to inquiry
and the commission has full authority to
insist that they shall never be more than
just and reasonable Section of the bill
providing for the payment to the railway
transportation board of the so-called 'ex-
cess earnings does not provide for the de-
termination that the rates under which
the described excess has been collected
by the carrier were not Just and reason
able rates for the services rendered. If,
however, the rates thus fixed, charged
and received by carrier are to be
deemed just and reasonable for the servic-
es rendered, the carrier is entitled to
rthese receipts as its property, and the
taking by the government of any portion
of these receipts Except under a valid
taxi for general governmental purposes
or for the benefit of other carriers would
appear to be a taking of property con
trary to the fifth amendment of the fed
eral constitution.
The provision of the pending bill is
| not tax laid upon all carriers with re
spect either to gross receipts. or net re-
ceipts, or any other basis for the assess
ment of tax, but is simply REQUIRE
ment of the payment to the government
board of the excess earnings of a car
rier which the interstate commerce com
mission determines to be more than fail
return upon the value of its property
| Such an exaction goes beyond the limit.
| of any decision known to me, and If the
rates under which the so-called excess
earnings are collected by the carrier ar,
/ to be deemed to be just and reasonable
rates, fixed and maintained as such under
tte authority of law, / am unable to escape
! the conclusion that the requirement al
: to the payment of the so-calfed excess
| earnings of a carrier exceeds the constitu
| tional authority of congress as applied
i to carriers not transacting their business
under a federal franchise or contract i'm
posing such condition"
To the argument that the fixing of rate
by a regulating authority may be consid
| cred only tentative, and that the rates s.
I liked may be assumed to be unreasonabl
If they produce excess earnings, Judg
| Hughes holds that what is reasonabl
rate can not be determined in this way
1 which is not a regulation of either rate
or service, but of earnings. Congress an
, the interstate commerce commission, h
says, have no power to permit the collet
!, tion of rates which are extortionate. eve
/ for temporary period; and, therefor,
/ what is a reasonable rate for given sci
, vice at a given time must be ascertaine
at the time the rate is made