Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1923-02-20
MAY DIVIDE RATES
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MAY III HE RAlEo
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ality of the Transportation Act Of
1920, the railroads west of the 'Iud-
son which brought the proceeding
claiming that the action of the In
tcrstatc Commerce Commission III
ordering the increase of the division
to tho New England lines was acting
arbitrarily. and was helping the
poorer or more needy companies at
the expense of the other .'artics to
the rates.
Pointing out that the COMM. sion,
after its first hearing had directed
the railroads in the group to pr coed
individually to readjust their divis-
ional arrangements. the Supre ne
Court stated that it was not until
the railroads Lad failed to 10 s. that
tic Commission had ordc"cd The divi
sion complained of. emphasizing that
in doing so it had left the .oor open
for correction upon appl. -.t.Gn OF
any carrier in respect to any ra;c.
The commission in this connection.
onjoined upon all parties. the court
said the necessity for proceeding as
cXpCditiously aS possible with q re-
vision of divisions upon more loci-
cal and systematic basis. and invited
them to present any cases of inability
10 agree upon such divisions. No
further application, the court found,
was made to the commission.
With regard to the contention Of
the railroads west of the Hudson that
the order was void because its pur-
pose WAS to establish divisions not
just. reasonable and equitable as be
tween connecting carriers. but was in
the public interest to relieve the
financial needs CT tho New England
lines. 50 as to keep them in effective
operation. the court found that the
effect of the order was To accomplish
a purpose Congress intended. The
Transportation act. among other
things. was designed, the court said.
TO secure fair return on capital
devoted to the transported ton service"
and to that end conferred new powers
upon the commission.
The situation presented by the
New England railroads could not bc
met alone by increases of joint
freight rates, in the opinion of the
court, but there was Il limit to what
the traffic would bear. 1t WAS Ques-
tionable. it said. how far the people
would tolerate increased rates when
such increases would give prosperous
railroads IN unreaSonably large re-
turn upon the value of their proper
ties. The group system Of rate max
ing and the division of joint rates
was declared by the court in the
public interest.
rThrOugc the farmer" the court eX
planned, weak railroads were to be
ho1 Inv
competitors of surplus revenues.
Through tho latter the weak were to
be helped by preventing needed rev.
cnuc from passing to prosperous con-
ncctions. 1t was planned to
distribute augmented earnings. largely
in proportions to the carriers needs"
1t this way. it added. it was hoped
that the whole transportation system
could be maintained without unduly
raising any rate on any line.
Declaring that the complaining rail-
roads do not claim that the division or
dcrcd had resulted in confiscatory rates.
the court states that the argument
that the rate must be divided on the
basis of service rendered by the scy-
cral carriers begged the question, ex-
planning that share to be properly APP
Eortioned out of the joint rate was to
be fixed by the commission and not by
agreement of the parties or by mileage
1T may be just to give the prosper
Gus carrier smaller proportion of the
increased rate than of the original
rate" the courr stated adding that
whether the rate is reasonable may de-
pend largely upon the disposition which
is made of the revenues which are de-
rived from it.
Yrf tN1
the order compcls the strong railroads
to support the weak. No part of the
revenues needed by the New England
lines is paid by the western carriers.
All is paid by tho community
That the needs of the New Eng
lang lines were met by two orders.
The first increasing freight rates in
the group. and the second increasing
the division of the through rates to
be received by the New England
lines, instead Of by one order, was
not of legal significance, the court
stated. The necessity of handling
division OF rates by groups was as
OBVIOUS, the court found, as was the
necessity of fiXinfi rates by groups.
mat there is no constitutional
obstacle to the adoption of the meth
DDS pursued is clear" the court de-
CARED
Any injustice that might be done
by group action either in rate maxi
ing or in the division of rates, it adj
ded. could be avaided by the rail-
roads having themselves excepted
from the order in whole or in part.
by making proper showing to the
commission.
Replying to the charge that the or
der transferred revenue improperly
from the western carriers to the New
England lines, the court stated that
the complaining railroads had ample
opportunity to protect themselves
from any such, effect by an appeal to
the commission. The commission
having fully investigated the COM
n'aint. the court pointed out. had