Court Opinion

ID: 7306699
Source: CourtListenerOpinion
Date Created: 2022-07-25 20:54:51.305303+00
Date Added: 2024-06-11T16:19:30.388921
License: Public Domain

Bigelow, J. A. D.
(dissenting). I concur in the reversal of the order of the Board, but I cannot agree with the direc*403lion that the Board conduct a rehearing at which a rate base may be proved. The implication is that the Board should again deny relief if the Company fails again io prove the present value! of its property used in the intrastate carriage of passengers. Such, 1 understand, is my colleagues’ decision.
I surmise that everyone will agree that the Board has authority to establish or approve an individual rate, as distinguished from a comprehensive tari if or schedule of rates, without first establishing a “rate base.” The Chamber of Commerce of a certain town petitions for a lower commutation sale between their town and the neighboring city. The Board lias power, I assume, to grant the application if a comparison with other rates shows that the existing rate is unreasonable and the desired rate is fair. Some years ago the Public Utility Commission fixed rates for coke in carload lots from the .Hackensack Hi ver at Kearny to all points in New Jersey within 50 miles. Of course, there was no valuation of the railways involved. Not only railroads but gas, electric, telephone, water—all utilities—have occasion to file new individual rates, and the Board must pass on them if objection is made. R. 8. 48 :2-21(d).
1 submit that the present case is in essence one dealing with individual rates in which no rate base need be proved. The Hudson & Manhattan llailroad Company is a passenger carrier engaged almost exclusively in interstate business. All its trades, facilities and equipment are employed in interstate traille, and all its trains run between New York and New Jersey. However, a few passengers enter and leave the trains while still in New Jersey—a trifle less than four per cent of total passengers in 1949. The average New Jersey intrastate ride is only half as long as the average interstate ride, so New Jersey intrastate passenger-miles are only two per cent of total passenger-miles. It is the rate for that two per cent of the Company’s business that is the only subject of the present proceeding.
The Company proved that its present rate is insufficient. On any basis of allocation of expense, it costs the Company *404more than the five-cent fare to carry a New Jersey passenger. Whether the Company also proved that its proposed rate was reasonable and fair should be determined in the first instance by the Board.
The Interstate Commerce Commission in 1950 approved an increase of the interstate fare from ten cents a passenger to fifteen cents and the New York intrastate rate was lifted from five cents to ten cents. The rates so established, especially that set by the Interstate Commerce Commission for 97 per cent of the Company’s transportation service, must be accepted as reasonable and may be used as a yardstick for New Jersey intrastate fares. The New Jersey rate, five cents, had been half of the interstate rate. On the basis of average passenger-miles, the two rates had been the same, for the interstate passengers travel twice as fax as the local passengers. Using the same ratio, our intrastate rate would now be 7% cents. But the Company says that expense does not vary exactly with distance, and it points out practical reasons against a fare that includes odd cents.
The present five-cent fare of the Company is, perhaps, not the only five-cent transportation fare still in effect in the United States, but certainly very few remain. Its rarity or uniqueness testifies to its insufficiency.
The New Jersey fare has been five cents since the Company began operations 40 years ago. If the rate in past years has not been too high, it is too low now, because of the decline of the purchasing power of money. There are businesses in which the fall in the value of money is offset by increase in volume, and by labor-saving devices. But the Company’s business, instead of gaining, has fallen off with the passing years. The practical abandonment of the Pennsylvania passenger terminal in Jersey City, the opening of the Holland Tunnel, the evergrowing competition of the automobile, have had serious effects. Nor have there been any substantial savings in labor-hours.
In my opinion, the evidence proved that the Company’s present rate is too low, and afforded a basis for determining what rate would be fair.