The Penn's Grove record., 1923-06-15
HAICHT UPHOLDS
EICHT-CENT FARE
Public Service Suit Against New
Jersey Utility Board SuS-
tained by Special Master.
THE RATE is SET TOO LOW
May Be at Once Appealed-Present
Eieht-Cent Fare, Fixed by Three
Judges, May Not Be Enough.
Values System at $4,000, 900.


Trenton.-Sustainin the contention
OF the Public Service Railway Com
pany that a fare of 7 cents, with 2
cents for transfer, ordered by the
Public Utility Commission, is confis-
catory Thomas G. Haight of Jersey
City, special master, filed a report in
the United States District Court rec
ommending a decree to enioin the
board from enforcing it's decision
The Public Service obtained tenn
porary cent fare from a special Fed
eral Statutory Tribunal, composed of
Federal Judges Woolley, Rellstab and
Davis, following the granting of a Pre-.
liminary Injunction by Judge Rellstab
enjoining operation Of the rate fixed
by the Utility Board. The special
masters report will be argued before
Judge Rellstab, counsel for the Utility
Board and the various municipalities
being permitted to file exceptions.
Special Master Haights report in
substance concludes that the fare
fixed by the utility board cannot yield
/ y.
He designates the value of the con
Germs holdings for rate-making pur-
poses at $110,000,OO0 The utility
board declared the company should
have a value of $82,OOO,0OO for such
purposes.
Before making my recommends
.tions,' said Mr.. Haight, there are two
which l will briefly discuss: The mu-
inequalities which are defendants in
this cause set up in their answers that
not only may the boards rate not be
declared to be confscatory, but that
it is itself invalid because higher than
the rates prescribed by certain ordi-
nances of the municipalities, respec-
lively, by which the plaintiff and it's
underlying the lesser companies ac-
quired the right to operate street rail
ways in the streets of such municipal
tiles. This question was raised and
argued when the matter was before
the court on the application for pre-
liminary injunction and was disposed
Of by this court adversely to defend
ants contention Judge Woolley say
ing: We regard the decisions by the
courts of New Jersey as dispositive of
the question of law raised by the in
tervening municipalities in this case
Sufficient Test
"He then cited the decisions of the
Supreme Court and Court of Errors
and Appeals of New Jersey, which
had decided the question contrary to
the contention of the municipalities.
l, Of course, feel bound by the decision
of this court. 1t may not be improper
for me to state, however, that if |
were to express an Independent judg
-ment l would be compelled to reach
exactly the same conclusion as this
court did. The New Jersey decisions
seem to me to leave the question no
longer an open one The Federal
Courts, of course, are bound by the
construction given to a state statute
by the state courts. The decisions in
question decide the effect upon mu
nicipal ordinances granting special
charters to public utility corporations,
of the subsequent acts of the New Jer-
sey legislature creating the Board OF
Public Utility Commissioners and de-
fning their powers and duties.
"It is also urged on behalf of the de-
PENDANTS that the rates now under at
tack should have been subjected to
the test of practical experience for
reasonable period of time before the
plaintiff could successfully apply to
Federal court for injunctive relief.
The fact that this court has already
granted a temporary injunction after
the rate had been in effect about two
months seems to preclude me from eX-
ercising an Independent judgment on
this point. But, aside from that, as
the evidence so clearly demonstrates
that the rates in question are coniis-
catory, there would seem to be no
possible reason for subjeeting them to
any further test.
81 am now brought to the recon-
mendation of what decree should be
made in the cause. AS | have found
that the rate of fare fixed by the two
orders in question Of the Board of
Public Utility Commissioners is con
fiscatory, l am constrained, of course,
TO recommend that a decree be en-
tered restraining the board from put
ting them into effect or from enforcing
or attempting to enforce the orders or
the rate. If the effect of such decree
will be, as suggested by Judge Wool
ley's opinion, to resestablish a prior
and lower rate of fare, then, OF course,
the decree should also prevent the
putting into effect or enforcement OF
any such lower rate.
"The plaintiff has also prayed in its
bill Of complaint for an injunction re
straining the board from preventing
the plaintiff from putting into effec'
and collecting a rate of fare of lO cents
for adult passengers without charge
for transfers. | do not think that the
court should attempt to pass on that
question or attempt to decide What |
rate of fare in excess of that pre-
scribed by the aforementioned or |
ders of the board would produce the
necessary fair return, for to do SO |
would be in effect to indulge in rate
,,oly;po. which JustiCe McReynOldS, N