The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1929-05-29
EFFECT OF THE DECISION

A days consideration OF the supreme courts ruling in
the railway valuation case has served to show that
hastily predicted and sensational results Of it will hardly
follow. The only basis for the inference of a twenty
billion-dolar railway victory was sumption that the
entire valuation process must now be based on present
cost OF reproduction. But the transportation act itself
directs that property account shall receive only that
consideration which under the law it is entitled to-"
In Mondays decision the court declares that existing
property values are to be included only along with all
other pertinent facts" and expressly refuses to pass upon
the weight to be accorded thereto"
The leading precedent cited by the court recognizes
that there are other matters to be regarded in estimat-
ing the value Of the property and that the final rate
adjustment should be based on the principle that mo
more be exacted" from the public for the use Of a
public highway than the services rendered are worth"
The opinion of the scope OF the decision. stated by in
dependent experts, is still more positive. One of them
points out that the idea of a sudden and sweeping
advance Of rates in case of a higher property valuation
overlooks the statutory requirement that the rates must
be Just and reasonable" to the public; equally evident
is the fact that competition between the railways must
OF itself favor rates that will move traffic in the largest
volume possible. This does not mean that the supreme
courts ruling will not result In valuations higher than
might otherwise have been made. or that its effect on
"recapture' Of surplus earnings may not be consider
able. Higher appraisalS would increase the amount,
limited by law to s per cent of property valuation, which
Q prosperous railway is allowed to dispose of for itself.
But even that increase would depend on the extent to
which recognition Of reconstruction costs would still be
offset by the "other pertinent facts"
The supreme courts decision is not based on iudg-
ment that rates are too low or the '%recapture limit"
unfair; 1t expresses no opinion on either question. The
court merely rules that, in rejecting present property
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commission departed both from the railway law and from
judicial precedent. This conclusion is emphasized with
severity. Many objections were urged by the commits
sion TO the doctrine approved by us, and the superiority
Of another view is stoutly asserted"
But the commissions duty was to execute the law as
interpreted by the court; not TO act as an arbiter in
economies" In other words, the determination OF rail-
way valuef for general purposes Of ate-makin was a
function quite distinct from that Of granting or refusing
altered rates requested on certain commodities or on
specified classes Of traffic. The real significance Of the
courts decision lies in its r~eassertion of q precedent OF
the utmost Importance to all industries under public
regulation.
It will b perceived that even the dissenting opinions
do not dispute the general principle thus asserted.
Judge Brandeis holds that higher reproduction cost
docs not necessarily tend to prove q present higher
value" Justice Stone does not find 1t proved that the
commission actually failed ITO give appropriate weight
to evidence Of present reproduction cost" But the first
OF these contentious does not traverse any essential part
Of the matortty decision. and the second is . matter Of
opinion. The court has not required higher valuations,
but merely observance Of the lawful method of ascer-
tanning them: its judgment that the commission had
not Adequately observed the law In that regard Is based
. 1oe1bal statements ~ the commissioners themselves