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About The commoner. (Lincoln, Neb.) 1901-1923 | View Entire Issue (June 20, 1913)
! ' ' 9( K JONB 20, 11J The Commoner. r tho railroads can bo beat accomplished through tho federal government, and that tho net re sults of such control will be a just and equit able administration as between the railroads and tho shippers. Senator Newlands of Nevada today voiced tho opinion of tho democrats by saying ho did not believe any now legislation was necessary, but that there should be a meeting of railroad com missioners of all the states for the purpose of working out a harmonious programme. THE DECISION INTERPRETED Washington dispatch to the Chicago Record Herald: So far-reaching was tho decision of tho supremo court in tho Minnesota rate cases that the full significance was not immediately realized. Naturally one of the new questions raised as a result of the court's declaration that states may fix reasonable rates bearing on intra state traffic until such time as congress exer cises its latent power to regulate all rates, was as to tho probability or possibility of a move ment to force congress to act as suggested. Expressions of opinion strongly indicate that there will be no movement of that kind in tho near future. Democratic leaders appear satis fied with the court's decision and will be loath to discontinue the dual regulation which has been given the highest judicial sanction. Victor Murdock, progressive party leader In the house, was emphatic in a demand for a com plete, ilnsupplementod federal control; but his demand finds no piercing echo. Even those who have been most insistent in their contention that single regulation was the thing, including railroad lawyers, feel that tho supreme court's sustaining of state rights in the matter will cause the dual control to continue indefinitely unless changed industrial conditions bring in jury and show that railroaod prosperity can bo recouped only through centralized regulation. There is another phase of the railroad ques tion reached by the decision in the intrastate rate cases which may affect railroads far and wide fully as much, if not more, than regula tion at the hands of forty-eight states as well as tho federal government. With digestion of tho supremo court's opinion comes realization ,of tho fact that a rule practically has been laid down for tho guidance not only of state com missions but of tho interstate commerce com mission in the matter of determining the valua tion of railroad property. Tho Minnesota cases, so far as reasonable ness of the rates applied by tho state railroad and warehouse commission were concerned, turned largely on the theory on which the valu ation of the property of tho railroads was worked out. The rates which the supreme court declared not to be excessive might havo been held excessive if the method of determining physical valuation which the railroads con tended was correct had been sustained. Tho interstate commerce commission is about to begin the tremendous task of establishing a value for the entire railroad property of the country. This is to bo done under authority of tho act passed by the last congress after years of agitation, which was started in a national way by Senator La Follette. Inasmuch as findings and orders of tho inter state commerce commission are subject to ulti mate review by the supreme court, It is to be assumed that the rule laid down by that tri bunal as to valuation will be followed in the work about to be undertaken. The railroad contention has been that the value of the company's property should be de termined by what It would cost to reproduce the road. But the railroads have further contended that in the cost of reproduction, .acquisition of a right of way should take into consideration the cost of adjacent property, which naturally has been enhanced in value, perhaps many fold, by the railroad already there. The supreme court holds, according to the present under standing of its opinion, that to judge railroad property by its "railroad value" instead of what the value would be if the railroad had not come there, or to judge the value of adjacent property by the increment resulting from the tracks which it abuts, is to give an excessive value for rate-making purposes. Such excessive value is held to have been given railroad property in Minnesota by the master who heard the witnesses in the cases before their appeal. The rule of the supreme court apparently Is that values should bo determined by the actual investments, taking into consideration a fair market value of the property if no previous line of railroad was running there, together with, cost of operation under a well managed system. This extract from tho supremo court decision, referring to argument against tho master's finding in tho Minnesota cases, is Illuminating on this featuro of tho mattor: "It is conton'ded that tho valuation was made on a wrong theory; that It Is a specula tive estimate of 'cost of reproduction;' that It Is largely In excess of the market valuo of adja cent or similarly situated property; that it does not represent the present valuo, in any truo sense, but constitutes a conjecture as to tho amount which the railway company would havo to pay to acquire Its right of way, yards and terminals, on an assumption, Itself Inadmissible, that, while the railroad did not exist, all other conditions, with Respect to tho agricultural and industrial development of tho state, and the location, population and activities of towns, villages and cities, woro as they now are." Tho court substantially upheld this conten tion. Referring to the results of the endeavor to apply the cost-of-productlon method In determ ining tho value of a railroad right of way, tho highest tribunal has held it to be apparent that, so far as tho estimate rests upon a supposed compulsory featuro of the acquisition, it can not bo sustained. Tho court holds it Is possible to assume, In making a judicial finding of what it would, cost to acquire tho property, that tho company would be compelled to pay more than its fair market valuo. It Is equipped with tho governmental power of eminent domain. In view of its public purpose it has been granted this privilege to prevent advantage being taken of its necessi ties. It would be free to stand on its legal rights and It can not be supposed that they would be disregarded. It had been urged that, in this 'view, the com pany would bo bound to pay "tho railway valuo" of the property. But supposing the railroad to be obliterated and tho lands to be held by others the owner of each parcel would bo en titled to receive on its condemnation its fair market value for all its available uses and pur poses, according to tho supreme court. One additional important point is to be noted. Tho supreme court took pains to explain that in determining valuo by actual investment there may be an exception where tho investment has been reckless or improvident, sustaining "losses which the community does not underwrite." that is in o fleet, and perhaps evon in Intention, interstate rato regulation. May congress rln to tho task and opportunity! Tho unanimity of tho court is cortalnly imprcsalvo and should bo welcomed by all sides; a decision by a divldod tribunal would havo loft much uncertainty and perplexity. Chicago Record-Horald. UP TO CONGRESS There are those who rejoice in the supreme court decision in the "great rate cases" as a memorable victory for state rights. The several governors who so vigorously protested against the rulings jand dicta in the "court below" and submitted a special brief to the supreme court are naturally pleased. There are thoso who re gard the decision as a blow to the rule of reason and to uniformity and fairness in rate regula tion and who fear the results of conflicting state laws and policies. To tho lay and Impartial observer the out standing featuro of tho decision Is the declara tion of the entire court that It will not legislate under the guise of "interpretation," and that, while congress undoubtedly hag the exclusive power to regulate interstate commerce, where it has failed to regulate the court will not in terfere with state regulation unless such regula tion is manifestly unjust and unconstitutional. The court refuses to invoke ff vague doctrine of "dormant authority;" it refuses to stretch an act of congress; it declines to establish another twilight zone between state and federal juris dictions. Until congress acts, it says, tho state may act, and the courts must respect state regu lation notwithstanding indirect consequences and logical implications of settled principles, unless a state goes too far and deprives a car rier of its constitutional property rigBts, in cluding the right to earn a proper return on capital. If tho regulation of tho states, even when not too drastic, unduly trenches upon or in directly nullifies interstate regulation; if the time has come for the exercise of full congres sional authority over the whole field of inter state commerce, to the exclusion of much state regulation even when its effect on interstate commerce is indirect, let congress act delibe rately and openly. The supreme court, unanimously and after anxiotis and prolonged study of a momentous and difficult legal question, has thus "put up" to congress and the executive the question of national supersession of the states in a large, unexplored field of intrastate rate regulation MR. McADOO ON GUARD Following is a Washington dispatch to the New York Herald: William G. McAdoo, secre tary of tho treasury, called tho attention of na tional banks to tho fact that thoro is a reservoir of $500,00.0,000 omorgoncy currency circulation which thoy can tap at any time business re quires it. Under tho terms of tho Aldrlch-Vrcoland bill of 1008 that amount of circulating notos was printed and Is stored in tho vaults of the Union Trust company. On government bonds at a very low tax, or on approved securities or commercial paper at a heavier and monthly increasing tax, banks 'may avail themselves of tho emergency circulation. Mr. McAdoo Issued this statement: "Secre tary McAdoo was asked If any applications had been received by the government from national banks or currency associations for tho issuance of currency under tho provisions of tho Aldrlch Vrecland bill of May 30, 1908. Ho ropllod that no such application had been rocelved. Tho secretary said that tho Aldrlch-Vrcoland act paBsed five years ago authorizes tho Socrotary of tho treasury to issue additional currency to national banks and currency assoclatlqns upon tho security of state and municipal bonds as well as governmont; and also, under certain condi tions, to currency associations, on high class short timed commercial paper as well as on gov ernment, state and municipal bonds. "In accordance with tho act tho secretary of tho treasury has actually on hand $500,000,000 In new national bank notes, which can bo Issued Immediately to any national banks or currency associations applying therefor and complying with tho provisions of tho act. "Tho secretary said that he would not hesltato to Issue currency to any banks making applica tion and qualifying under the act. "Tho secretary explained that tho now cur rency is, of courso, exactly like existing national bank notes and that if such currency should bo issued there is nothing In tho notes or in tho manner of their delivery to Indicate that they aro special currency issued under the Aldrich Vrooland act. "National currency associations have bcon organized in various parts of tho country, from Massachusetts to California, including the large cities of Now York, Chicago, St. Louis and others and aro now qualified to tako tho benefits of tho act. The national banks and these cur rency associations upon compliance with tho act may quickly receive additional currency to tho extent of $500,000,000 If they require it upon application to tho treasury department. Tho Aldrich-Vreoland act expires Juno, 1914." UNIVERSAL PEACE THE GOAL Following Is an Associated Press dispatch: Washington, June 13. Commencement exer cises at the Holy Cross academy here today were made notable by the presence of Cardinal Gib bons, as presiding officer, and Secretary Bryan as orator of tho day. Mr. Bryan said he found the inspiration for his address in a poem by one of the graduates, "A Song of Peace." "Universal peace Is the goal toward which we aro heading," the secretary declared. "Tho Christian world is wearied of wars. It in wearied of international bickerings that do not always end in the shedding of men's blood, but too often engender bitter feelings that only the passing of years can take away. It was- a mis take to believe that In doing away with wars we would become a race of weak and irresolute men. Men are beginning to understand tho meaning of brotherhood as taught by the 'Princo of Peace.' " PULITZERS MAGAZINE In The Commoner's notice of the forthcoming publication of Pulitzer's Magazine It was stated that Mr. Walter Fulitzer is the son of Joseph Pulitzer. This should have read, "Walter Pulit zer is the son of Albert Pulitzer." This was a Commoner office error. The Pulitzer Magazine company has ,no affiliation whatever with tho newspaper property of the late Joseph Pulitzer. '4 I !