INTERSTATE COMMERCE COMMISSION'S RULING
IHB complainants In this proceedings are
B the City of Spokane. "Wash., the Spo-
fcane Chamber of Commerce and
the Spokane Jobbers' Association of Spo
kane. Before the .hearings began the coun
ty of Spokane was permitted to Intervene
as a complainant. All interests of that
locality are therefore represented.
One of the al legations in the complaint
is that the rates of the defendants un
duly prefer Seattle, Tacoma, Portland and
other Coast points. This allegation affects
the commercial interests of those localities
and. with a. view to protecting such inter
ests, the Pacific Coast Jobbers and Manu
facturers' Association, the Portland Cham
ber of Commerce, the Merchants' Protec
tive Association of Seattle and the Tacoma
Traffic Association have become parties of
Tecord by petitions of Intervention.
The complaint was originally brought
against the Northern Pacific Railway Com
pany, the Great Northern Kcllway Company,
the Union Pacific Railroad Company, t he
Oregon Railroad & Navigation Company and
the Spokane Falls Northern Railway
Company. The first four of these de
fendants form through lines of railway be
tween the Missouri iclver and Spokane. The
last named extends north from Spokane to
Nelson, where It connects with the Cana
dian Pacific Railway, thus affording a
possible route from Spokane to Eastern
destinations.
The complaint puts in Issue not only rates
from the Missouri River to Snokane, but
also from territory east of that basing line
extending as for as the Atlantic seaboard.
It seemed to the Commission upon an ex
amination of the complaint that carriers
participating in these rates east of the
Missouri River ought to be made parties
of Tecord as well as the Canadian Pacific,
which may handle traffic in connection
with the Spokane Falls & Northern from
Spokane, We accordingly directed that the
Canadian Pacific Ratlwav Company, the
Chicago. Burlington & Qlilncy Railway Com
pany, the Chicago & Northwestern Rail
way Company, the Lake Shore Ac Mlchtg&n
Scuthern Railway Company, the New York
Central & Hudson River Railroad Cnm
pany. the Pittsburg, Fort Wayne & Cnica
go Railway Company. the Pennsylvania
Railroad Company, the New York. New
Haven Hartford Railroad- Company, and
the Boston & Maine Railroad be made par
ties to this proceeding, and they were ac
cordingly brought in as additional defend
ant and have answered.
The issues presented are important both
from the traffic, the pecuniary and the eco
nomic questions involved. A large amount
of testimony has been taken and the case
lias been elaborately and ably argued by
counsel representing all phases of the con
troversy. Thete Issues, while treated upon
the hearing and argument in a great va
riety of form, really reduce themselves to
three:
" First Do the rates of the defendants
unduly discriminate against Spokane In
favor of Coast points? This includes the
further Inquiry whether these rates are in
violation of the fourth section.
Second Io the defendants Improperly al
low certain privileges to Coast . traffic
which are denied to Spokane, like the mix
ing of carloads, lighter mlniraums. etc?
Third Are the rates applied by the de
fendants to Spokane Inherently unjust and
unreasonable ?
Spokane is situated some 400 miles east
of Seattle, and Missoula. Mont., Is , upon
the line of the Northern Pacific about 250
miles east of Spokane. For the purpose
of indicating the scheme of rate-making
against which this complaint is directed,
these three points are taken as illustrative.
Below are given the class rates, in cents
per 10O pounds, from St. Faul. Chicago and
New York respectlvelj-. to Setttle and. Spo
kane. Wash., and Missoula. Mont. :
To Seattle,
From 1 2 3 4 5 ! A j B C D j K
St. Paul, Minn :.on) 2)0 2COf -JH lflol 1OI J2M lOOt 9.M S
Chicago. Ill -iool f.nl ion ivj jrtnt 12. looi ions or.
New York. V. V . . . SOfiJ -H S'-jnj IPO ltt5 l;0j 1251 10i 10p 05
To Spokane, Wash.
From 112 1 Sl 5 A H CI E
St. Paul. Minn 3.Mj 2nl 22oj lonf -j0o! I4n 12.". lnnl ,-J r.
Chicago. Ill ftfiOj 31Ql 2iM 210 170j 17l H-, 117! 1H
To Missoula,
St. Paul, Minn.
Chicago. III.
New York to Chicago
Rates from New York to Spokane and
Chicago.
From an examination of the above tables
It will be seen that class-rates from St
Paul to Seattle and Spokane are the snme
and that they are less to Missoula. From
Chicago the class-rates are higher to Spo
kane than to Seattle In all cases, but
somewhat lower to Missoula than to either
Spokane or Seattle. There are no Joint
through rates from Chicago to Missoula,
the above rates being arrived at by com
bination upon St. Paul.
From New York class-rates are still the
same to Seattle as from Chicago and St.
Paul, , but are materially higher both to
Spokane and Missoula. No Joint through
class-rates are published from New York,
the through rat above given to Spokane
being obtained by combination on Chicago,
while the rate to Missoula is made by com
bining the rates from New York to Chicago,
from Chicago to St. Paul and from St. Paul
to Missoula.
It will be se?n, therefore, that if all
traffic moved upon class-rates no discrimi
nation would exist against Spokane when
the traffic originated at the Missouri
River, save that the defendants would
charge the same for transporting traffic
1829 miles to Seattle as for the 1490 miles
to Spokane. If, howevec, the traffic origi
nated east of the Missouri River, it would
in aucases pay a somewhat higher rate to
Spokane than to Seattle. the difference
against Spokane Increasing with the dis
tance from St. Paul.
Only a comparatively small part of Spo
kane's traffic, however, moves upon the class
rate. The great bulk of the tonnage from
Kastern points of origin to Spokane moves
upon commodity rates, and this is even
emore true of the Pacific Coast. Hence it is
necessary in order to appreciate the force
of this discrimination to examine these com
modity tariffs.
The complainants have referred in the com
plaint to a number of commodities as illus
trative of the general situation, and we
have selected from these ten articles giving
below the rates from St. Paul.-Chicago and
New York to Seattle. Spokane and Missoula.
The first column In the table indicates
whether the rate for less-than-carload
movements, while the last two columns
repeat this information for carload ship
ments. In some cases, especially from New
York to Spokane and Missoula, the rate
is made by combination upon Chicago, in
volving sometimes both class and commodity
rates. This Is Indicated in the tables by
the abbreviation "comb." See table
From an Inspection of. these last tables In
comparison with the class rates previously
Siven it will be seen: iy
When the article moves under a com
modity rate to both Seattle ami Spokane
ioVeitni8 "rUaJly !!i6rhr t0 Spokane than
to Seattle. Take the second item, "shov
els, spades and scoot.' This takes a
commodity rate to Seattle in both carloads"
and less than carloads; the second-class rate
to Spokane in less than carloads and a
commodity rate in carloads. The carload
Sat oattJe U f11.5 Per 106 pounds- "hfle
that to Spokane is $1.1,4 per 100 pounds.
k Cmpla,nant state ts complaint
made by adding to the Seattle rate the full
local rate from Seattle to Spokane This is
not correct. In some instances the Spo
Ja26ifat constructed in that manner,
and It was said in testimonv that these
items embrace 14 per cent of the whole
in number. In other instances thxs Spo
kane commodity rate is the samo as the
Seattle rate, and the testimony shows that
this is true of about 16 per cent of the dif
ferent items In number. With the great
bulk of commodities the Spokane rate ex
ceeds materially the Seattle rate, but not
by the full local back. It was said that
the Spokane rate was higher than that o
Seattle by about 70 per cent of the local
from Seattle to Spokane in the majority of
canes.
It often happens, moreover, that an arti
cle may move on the commodity rate to
Seattle, while it takes the class rate to
Spokane; thus the first Item, "tin boxes
and lard, nails, nested." move in iht
carloads to both Seattle and Spokane under
in secona-ciass rate, which is tn-a same
in each case, J2.6U per 100 pounds; but if
this commodity is shipped in carloads, as It
usually is, the rate to Seattle is a com
modity rate of 85 cents, while that to Spo
kane is a fourth-class rate of $1.80. This
is perhaps the most grievous source of dis
crimination against Spokane. The trans
continental tariff now In force carries 150
westbound commodity rates, many of these
rates being applicable to more than one
article, while the number of such rates
from St. Paul to Spokane is only 63.
It has also been noted that class rates
to Seattle apply as blanket rates for the
most part to all territory east of the Mis
souri River and the same is generally
true of westbound commodity rates. Now
even those commodity rates which apply
from St. Paul do not In all cases extend
to territory east of St. Paul. Of the 3s
already referred to only 407 apply east of
Chicago, and of this number by no means
all extend to New York
It will be seen, therefore, that Spokane
rents, owing to the structure of its tariffs,
under two disabilities. It must, in the first
place, pay a higher rate upon practically
everything which reaches that locality from
the Missouri River on east, and It Is re
stricted. In the second place, in the mar
kets In which it can buy, for while Seattle
and other Coast cities can purchase In all
territory east of the Missouri Rl er upon
even terms, this is by no means true of
Spokane.
Traffic over the Union Pacific lines for
Portland does not touch Spokane, but all
freight transported by the Northern Pacific
and Great Northern companies to the coast
of necessity passes through Spokane, so
that with respect to all the coast business
of these two defendants the complainant
city is strictly an intermediate point. The
distance from Spokane to Seattle by the
Or eat Northern is 5 3 9 miles, to Tacoma by
the Northern Pacific 896 miles, and to
Portland 641 miles. The first claim of thu
complainants Is that these defendants In
thus charging lower rates to the coast
points violate the fourth section by making
a higher charge at the Intermediate point,
and the third section by unduly discrimi
nating against Spokane, a nearer point.
The defendants do not dony the fact of
the discrimination, but insist that this
schem of rates is justified by water com
pel it ion. Traffic may move from the At
lantic seaboard to these Pacific coast points
by water. The defendants say that the
water rates are much lower than a reason
able all -rail rate from the Atlantic sea
board to these same Pacific coast destina
tions; that these water rates absolutely
llm it tho rail rates which can be charged ;
that this creates a dissimilarity of circum
stance and cond It Ion which withdraws the
case from the prohibition of the fourth sec
tion, and that in view of these conditions
the discrimination is not undue, and there
fore not unlawful under the third section.
This Commission has"several times exam
ined this claim of the defendants with re
spect to other intermediate points, has
found that water competition did exist as
now arscrted by the defendants, and has
held that this competition did in the main
Justify the system of transcontinental tar
iffs whluh theso defendants have established.
Kind ell vs. A tchlson, Topeka & Santa Fe
Hy. Co.. 8 I. C. C. Rep.. 60S; Shippers I'n.on
of Phoenix vs. Atchison, Topeka &. Santa Fe
Ry. Co., 9 lb., 260 ; Business Men's League
of St. Louis v. A tch ison, Topeka Sc. Santa
Fe Ry. Co., 9 lb., 318. It also reached sub
stantially the same conclusion with respect
to the city of Spokane In a former proceed
ing. Merchants Union of Spokane vs.
Northern Pacific Ry. Co., et el., 6 1. C. C.
Rop., 4 78.
1 1 might be sufficient to adopt without
discussion the conclusions reached In those
Investigations, but inasmuch as the whole
question was gone Into anew upon this
hearing, and since this matter of water
competition between the- coasts Is one of
an ever-varying? nature, and especially since
there can be no adequate understanding of
the difficulties which beset th-3 making of
these transcontinental rates without a thor
ough appreciation of this competition, it
seems proper to briefly state those condi
tions here.
For many years before the construction of
en v transcontinental line of railway the
only practicable means of transporting
Wash.
Mont.
1 f 2 3 4 J 5 A B C D B
2.101 201 lr 1421 118 118! 94! S3
r.oi- 47
2frt! 2M 205 167 138 143 314 100
73 00
2 1 3
6
25
65 no f as
Missoula are made on combination over
freight in considerable quantities from the
Atlantic to the Pacific coast was .by water,
and after the railway became available this
same method of transportation continued to
be used. In the early days of the develop
ment of the Pacific, coast passengers and
freight were taken by water to Colon, car
ried by staga acrosss the Isthmus of Pan
ama, and again shipped by water to San
Francisco or other points upon the coast.
Subsequently the Panama, Railroad took the
place of the stage line, and this route is
today In active operation. It Is well under
stood that for th9 purpose of preventing
competition by this line, the transcontinental
railroads for several years purchased a suf
ficient amount of the entire space available
by the steamships plying in connection with
the Panama Railroad to control the ratos.
Today this line maintains rates somewhat
below the all-rail rates and handles ap
proximately 40,0u0 tons of traffic annually.
A certain amount of traffic Is carried
each year between tne coasts by what are
termed tramp vessels; that is to say, ves
sels which do not ply regularly between
these points. If, for example, a steamship
is constructed upon the Atlantic seaboard
and is sent to the Pacific coast for service,
it carries out a cargo, and is with respect
to that voyage a tramp. It was estimated
by a witness familiar with these matters
that during the year 1906 this tramp ton
nage amounted to approximately 25,000 tons.
In the past that route carrying the larg
est amount of traffic and producing the
groat est effect upon transcontinental rates
has been the regular service around Cape
Horn or through the Straits. Down to the
year 1900 the ships employed on this route
were ontlrely sailing vessels, and the serv
ice was known as the clipper service.
The nominal time was about 135 days, but
this, owing to the means of propulsion, was
often lengthened to 175 or even 200 days.
This route always labored under many . in
herent disabilities. The date of arrival was
uncertain; the time consumed was usually
long; the cost of insurance was high. Nev
ertheless, It always produced an effect. In
fact a, controlling effect, upon railway rates
from the Atlantic to the Pacific Coast.
About the year 1900 the American Ha
waiian Steamship Company, which had for
merly been Interested In these sailing ves
sels, put Into service a line of steamers-via
the Straits of Magellan In the place of these
clipper ships. The time by this new line
from New York to San Francisco was 60
days, and the date of arrival could be
counted upon with great certainty. This
reduced the cost of insurance, eliminated
the element of uncertainty as to time of ar
rival, and altogether rendered the route a
much more attractive one. It commanded
from the first all the traffic Its ships could
carry. In the year 190S the tonnage via
this route between New York and the Pa
cific Coast was about 115.000 tons.
Beginning early in, the year 1907 the
American Hawaiian Steamship Company in
augurated a new route, known as the Te
huantepec route, consisting of a ship car
riage from New York to Coatxacoalcos,
Mexico, a rail carriage from thence across
Mexico, 193 miles via the Tehuantepec Na
tional Railroad to Salinas Crus, and thence
by vessel to destination.
The time by this route is 25 days from
New York to San Francisco, 35 days to
Portland, and 40 days to Seattle. When
the testimony in this case was taken this
route had only just been opened for busi
ness, but its traffic manager testified that
he expected to carry to the full capacity of
bis vessels with ease, and that this capacity
would be at the outset 250.000 tons per an
num. The ships of this line sail weekly from
the port of New York, but the traffic which
they carry comes from the whole eastern
part of the middle and New England sec
tions of the United States, being transported
to New York by rail from the points of
origin. The traffic manager testified that at
the present time he did not usually reach
west of the Buffalo-Ptttsburg line for his
traffic, but that he had taken starch from
Chicago, radiators from Detroit, books and
papers from Milwaukee, farm implements
SUMMARY OF COMMISSION'S DECISION IN
SPOKANE RATE CASE
1. The system of transcontinental rates now In force applies lower transportation charges from points of origin
upon the Missouri River and east to Pacific Coast cities than are applied to Intermediate Interior points: Held., that
this scheme or rate makir.gr has been forced by water competition between the Atlantic and the Pacific Coasts! and
that the maintenance of the lower rate to the more distant coast point Is not of necessity -a violation of the third
or the fourth sections, since water competition creates a dissimilarity of circumstance and condition between the
interior and .the coast.
2. Water competition may Justify a difference In carload minlmums and la the right of combining different
commodities at the carload rate, as well as In the rate Itself; but carriers should be prepared to Justify such prefer
ence. ,
S. In determining what are reasonable rates between t.vo points neither tha railroad which can afford to handle
traffic at the lowest rate nor that whose necessities might justify the highest rate should be exclusively considered.
Rates must be established with reference to the whole situation.
4. Certificates Issued against the ore lands f orderly owned by the Great Northern Railway Company cannot be
properly considered in determining what are reasonable earnings for that company at the present day.
5. The Great Northern Railway Company has in tho past distributed Its stock Issues among lta stockholder at
par from time to time, although the market value of the stock was often much above par. Without expressing any
opinion upon the legality or propriety of this practice. It Is held that this fact, at this time, can have no bearing
upon the earnings to which that company Is entitled.
6. Neither can the capital stock of the Great Northern Railway Company be reduced for the purpose of deter
mining what its fair earnlnRS should be by the amount of that stock which was originally Issued without money
consideration. .
7. In determining what will be reasonable rates for the future the Commission may properly consider that under
the rates in effect a large surplus has been accumulated In the past, but It should not make ratea for the purpose
of distributing that surplus to the public,
8. The importance of the question whether a railway shall be allowed to earn a return upon the unearned In
crement represented In the value of its right-of-way Is illustrated by the facts In this case, but la not discussed or
decided. .
9. Upon an examination of the history of these properties, the cost of reproducing them at the present time the
original cost of construction, the present capitalization, and the manner In Which that capitalization has 'been
made; Held, that the earnings of both the Great Northern and the Northern Pacific in recent years have been ex-
cesslve.
10. The only duty of the Commission In this case is to establish reasonable rates from Eastern points of origin
to Spokane, and In so doing It can only act upon those rates specifically called to Its attention, although It must
have in mind the effect upon the revenues of these companies of resulting reducUons upon other commodities and at
other points man Spokane.
11. The rates attacked are class rates from St. Paul and Chicago to Spokane, and commodity tales upon M
enumerated articles. Class rates are established from t. Paul to Spokane which are M 2-3 per cent less than those
now In effect, and class rates from Chicago to Spokane are made higher than those from St.- Paul by certain named
aroitrarles.
12. In caso .of all commodities except five the present rate from Chicago to Seattle is established aa a reasonable
local rate from St. Paul to Spokane. Upon five articles somewhat higher rates are fixed. Rates on all these com
modules from-Chicago to Spokane are made 16 2-3 per cent above those from St. Paul. Neither class nor commodity
rates are named from points east of Chicago.
from South Bend, and that shipments of va
rious kinds frnm points west of thin line
were comparatively frequent. He stated that
the rates by his line from New York were
from 20 to 60 per cent lower than via the
all-rail route to San Francisco, and that
substantially the San Francisco rate was ap
plied at Portland. Seattle and Tacoma. He
further said that his line carried all kinds
of commodities with the exception of high
explosives. At the present time this line
does not absorb the rail rate from the In
terior point of orleln to New York, al
though in naming; the rate from New York
account Is sometimes taken of the point
where the traffic originates. The rates from
New York via this line are not published or
maintained, but are varied as may be neces
sary to suit the varying necessities of the
business, which means that the steamer
makes whatever rate may be necessary to
fill Its capacity.
Rates are made only to the seaports upon
the Pacific Coat, and the consignee always
receives the goods and ' pays the freight
charges at the port. It frequently happens,
however, that shippers at interior points in
the Pacific States avail themselves of this
means of transportation from the East by
rebilllng at the port to the interior desti
nation at the regular local rate. fchlr
ments have been made in this manner to
Spokane itself.
The traffic manager of this line was
asked to file a statement which would show
in detail with respect to that one of his
steamships which was then loading at New
York the articles which it carried, giving
the character and weght of each consign
ment, the point of origin and the destina
tion, together with the rate received for the
service; and such statement has been filed
and Is a part of this rcord. It fully bears
out the testimony of the witness. The cargo
consisted of a grent variety of commodities
More than half the consignments originated
To Seattle, Wash.
Rates In cents per 100 pounds.
From St. Paul. Minn.
Tin boxes and lard palls, nested In boxes
Shovels, spades and scoops .
Fruit Jars and glasses ,
Canned corn, peas and beans . . ....III!
t'rugs and medicines
Cotton ducks and denims , ..."
(Glassware, n. o. s
Stoves, n. o. s . . .llllll' 11" ' " ' ' '
Twine. In bales, boxes or barrels" I '. '. I " 1 " ! '. Ill "
Copper wire
Wire fencing, in rolls ....lllllll 1 1 II 1 1
From Chicago. 111.
Tin boxes Hnd lard palls, nested In boxes
Shovels, spades and scoops
Fruit Jars and glasses Ill
Canned corn, peas and beans... I .. Ill 11
Irugs and medicines 1 . 1 11 ,
Cotton ducks and denims. I H H H
fJlassware, n. o. s. ;
Stoves, n. o. s ..........Il.I.Iilllil"
Twine, in bales, boxes or barrels. ... II 11 HI III H H
Copper wire
Wire fencing. In rolls '"II I ll'.ll Hill
From New York. X. Y.
Tin boxen and lard pails, nested In boxes...... ,
Shovels, spades and scoops.
Fruit Jars and glasses I.. I "I!!!""
Canned corn, peas and beans ill!"
lrugs and medicines
Cotton ducks and denims 1 . 1 1 , 1 1 1 1 1 1
Glassware, n. o. s
Twine. In bales, boxes or barrels 1 1 . 1 1 1 H H H 1 1 1 1
Copper wire ,
Wire fencing. In rolls I 1 1 1 1 III I ' I
Stoves, n. o. s. (not crated or boxed)
To Spokane. Wann.
From St. Paul. Minn.
Tin boxes and lard palls, nested In boxes
Shovels, spades and scoops.. ...I! I
Fruit Jars and glasses
Canned corn, peas'and beans 111111X11
Drugs and medicines 1 1 1 1 ! 1 1
Cotton ducks and denims 1 !! 1 1 ! 1 ! 1 1
Olassware, n. o. s
Stoves, n. o. 1 1 1 H I
Twine. In bales, boxes or barrels. . I '. 1 1 1 1 1 1 1 I HI I ' I' H
Copper wire
Wire fencing. In rolls.... 111!!""
From Chicago, III.
Tin boxes and lard pails, nested In boxes
Shovels, spades and scoops "
Fruit Jars and glasses ----....!!!!!"""
Canned corn, peas and beans............,,
Irugs and medicines ...."!!!!""
Cotton ducks and denims...................!""""""""
Glassware, n. o. s..,.
Stoves, n. o. s ll'.ll!!!!!
Twine, in bales, boxes or barrels .1
Copper wire -.........."""""
Wire fencing. In rolls 1 !! 1 1 1 1 1 ! "
From New York. N. Y. ....
Tin boxes and lard palls, nested In boxes. . .
Shovels, spades and scoops
Fruit jars and glasses
Canned com. peas and beans..............
Druw and medicines !!!!!!""
Cotton ducks and denims............ !
Glassware, n. o. s .........""""""
Twine, in bales, boxes or barrels ..111!!!!!!!!""
Copper wire
Wrlre fencing. In rolls ."111!!""""
Stoves, n. o. a. (not crated or boxed) I!!!!!!!!!
, ' . . ... To Mlssonla, Mont.
From St. Paul. Minn:
Tin boxes and lard pails, nested In boxes....'
Shovels, spades and scoops .......11111"""
Fruit Jars and glasses ! ! ! !! HI 1 1
Canned corn, peas and beans..............!""""""
nrugs and medicines , 11111111!
Cotton ducks and denims !!!!!!!!
Glassware, n. o. s ....i......
................
Stoves, n. o. 8
Twine. In bales, boxes or barrels.. ..!!!!!1!"11
Copper wire
Wire fencing, in rolls .!
From Chicago. III.
Tin boxes and lard palls, nested In boxes............
Shovels, spades and scoops .........I!!!!!!!!!
Fruit Jars and glasses .........I"!!"!!.!
Canned corn, peas and beans...... ..111!!!!!!!
lirugs and medicines 1 !! 1 1 1 1 1 1 1 1
Cotton ducks and denims 1 1 ! 1 1 1 1 1 " 1
Glassware, n. o. s i.11'1"!"!"
Stoves, n. o. 8 -........!!"!"!!"
Twine. In bales, boxes or barrels.......!!!!
Copper wire
Wire fencing, in rolls . . 11 1 1 " 1 " 1 ! "
From New York. N. Y. "
Tin boxes and larrl palls, nested In boxes. ,----
Shovels, spades and scoops
Fruit Jars and glasses .....!..... 1 .11"
Canned corn, peas and beans........,,..!. .!.."""'
Tirtigs and medicines ......11 .1.1111"
Cotton ducks and donlms..... ....11! .!!!!!!!!
GlaS3Ware. n. o. ...!!!! .!!"""
Twine, in bales, boxes or barreis. . . . 1 ! 1 ! 1 ! I 11111111!
Copper wire
Wire fencing. In rolls .".".".".'!! 111111111
Stoves, n. o. s. tnot crated or boxed).....!! 111!!!!
at New, York, but a considerable portion
came from Interior points. The prevailing
destination was San Francisco, but ship
ments were also made to Seattle. Portland.
Tacoma and Los Angeles. The rate of
freight was In every case materially lower
than the published rail schedule from the
point of origin. The time involved In trans
porting this freight from point of origin to
destination was materially less than would
have been required. In the then congested
condition of traffic, for the same service by
rail, and was probably as short as could be
expected upon the average under normal
conditions.
It cannot be denied. In view of these un
controverted facts, that water competition
does exist, and tha. It does produce a con
trolling effect upon rates to the Pacliic
Coast, from many Kastern destinations. It
Is beyond doubt that this competition abso
lutely limits those rates from New York
and points within a few hundred miles of
New York to Pacific Coast terminals. There
Is no assignable reason why a shipper should
pay from 15 to 00 per cent more money to
transport his goods by rail when the water
service is equally rellabls and almost as ex.
peditlous. l.p to the present time the
transportation facilities by 'water available
have not been sufficient to prnduc. a de
moralization In .those rates. Those water
carriers do not yet need to offer the induce
ment which they might profitably. The rail
rate to New York is not absorbed nor are
low rates made from New York even. When
this business com to be solicited by the
water routes In the same way that ocean
and rail business is today solicited by water
lines for Southern and Western destinations,
transcontinental carriers will be confronted
with a situation much different from that
which they meet today; but today even they
are compelled to fix their terminal rates In
view, of this competition.
It Is not meant that rail carriers might
Class. jlC. L,. class. C. I
Second.. 2rt0 Comb... 85
Comb... lfl.V...do... 113
...do... JTo ...do... 7T,
...do... 14. ...do... 85
...do... lsi ...do... 140
...do... i :tri . . .do. . . po
...do... ltto. . . .do. .. no
Third... 2ju . . .do.. . 15
Comb... ...do. .. io
...do... 111". . . .do. .. HO
...do... l.'ioj . . .do. .. -loo
Second.. 2ocomb... 85
Comb... 175 ...do...
...do... J .Ml ...do... 8
...do... ...do... lo
...do... 3io ...do... 140
...do... ...do... tv)
. . .do. .. in do. .. 110
Third... 220 do... JUS
Comb... 1.1 ...do... ho
...do... it;r. ...do... no
...do... iso ...do.. loo
Second.. Sfl) Comb... 85
Comb... 17r ...do... 11:5
...do... l.Ml . . .do. .. 8r
...do... lr.u ...ilo... !5
. . .do. .. IM11' . . .do. .. 14H
...do... J.t.V . . .do. .. HO
..do... lH.i ...do... no
...do... !'-'"! .do. .. I.)
...do... 10.-. ...do... no
. ..do... 1 .'.().. .do.. . loo
IThlrd... . 2J0 . ..do... 15
. .'Second.
, J . . .do. .
.3 Third. .
. .'Fourth.
. .First. ..
. J . . .do. .
. .' Second .
. J Third. .
. .'Second.
. .1 . . .do. .
. . Third,.
. .'second.
. J . . . do . .
.Third. .
. . Fourth.
. . First . . .
. . . .do. .
. .'Second.
. J Third . .
. .' Second .
500 Fourth.
10O
2M Comb.
154 I
1' jo
I'.hi
;ioo
:toti
2 '.n
2-0
2CO
20O
20,
. . .do.
1 -'it
IL'5
1!1
175
ISO
l.M
1B-J
li
100
310
1M
111'J
l:i
inn
175
ISO
14
loll
245
1V5
1 .111
143
l'JO
17.-.
1SS
12
181
1!
173
. . .do.
. . .do.
. ..do.
. . .do.
. . .do.
. . .do.
. ..do.
. . .do.
810 Fourth .
SKI Comb. .
2iiH . . .do. .
LIIO
. .do. .
..do. .
..do. .
..do..
..do. .
..do. .
. . .do.
..do. .
lilSil
3 1.0
:iio
2I0
310
810
2i0
. . .do. .
Third. .
r
8rt5 Comb..
.Comb..
.do. .
.do. .
.do. .
.do. .
.do. .
.do. .
.do. .
.do. .
.do. .
Mo. .
8'i
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815
2..0
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4 1 .-
8tl5
3 no
8110
lion
810
. .do. .
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. -do. .
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..do. .
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. .do. .
. .'Second.
..I . . .do. .
. .1 Third..
. .Fourth.
. . First. . .
. . . . .do. .
. J Second.
. J Third. .
. .: Second.
. .i . . .do. .
. .j Third. .
. .'Second.
! . . .do. .
. -j Third. .
. .Fourth.
. J First. .
- J Comb. .
. . Second .
. - Third. .
. .! Second.
-I . . .do. .
- . Third. .
20iFourth..l
'HI Comb. . .
!" . ..do. ..
142! . . .do. ..
2:sir . . .do. ..,
2:iii; First. ..
142
14S
135
15
111
28
142
147
142
14
100
li
lt! 4,
l:i5
l:l
1!M1
27
167
1C.2
lf.7
17
110
202
1!4
185
HW1
2411
20
212
2H3
140
1W2
201 Fourth
lil.V Comb.
2U1 Fourth
211 . . .do.
165 Comb.
I
251 Fourth
2.M , Comb.
20.1: ...do.
HIT- . . .do. ..
21ic, . . .do. ..
'270 . . .do. ..
2.-.1 Fourth..
"5 Comb.
2."il Fourth..
2..1 I . . .do. ..;
205 j Comb. ..
81(1 Comb. ..
Comb. .
. . .do. .
...do. .
. . .do. .
...do..
.-. -do. .
. . .do. .
...do..
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. . .do. .
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371
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ami
inn I
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24 5
2u5
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. .do
not at the present time maintain temporar
ily higher rates than are now in effect to
Pacific Coast terminals. Thev probably
could, certainly on many articles. In 1U04
most transcontinental rates were advanced
10 per cent, and that advance was followed
by corresponding advances In water rates.
But to make these rates materially higher
than they now are would not only result la
the Immediate loss of some traffic, but
would Invite certain competition which la
the end must result In material reductions.
This water competition not only limits the
rates which are now In effect from the At
lantic Coast to Portland. Seattle and Ta
coma, but the existence of this competition,
especially In view of the approaching com
pletion of the Panama Canal, must be a
dominant factor In determining both the
present rates and the future policy of these
transcontinental lines.
When once the fact of this competition
and Its effect upon these rates have been
found, the decisions of the Supreme Court
of the United States foreclose our conclu
sion. That court has held in numerous
cases that if competition exists at the more
distant point which controls the rate at that
point, the charging of a higher rate at an
Intermediate point is not necessarily In vlo
laton of the third or fourth section. In
terstate Commerce Commission v. Alabama
Midland It. H. Cd.. 1.19 u. s.. 173; Louis
ville A Nashville R. R. Co. v. Behlmer. 173
I", f.. S; Interstate Commerce Commission
v. East Tennessee. Virginia A Georgia R R
Co.. 1S1 V. 8 . 1.
These water rates to Pacific Coast termi
nals apply only from New York. Shipments
are made from various other Coast points
and from various Interior points, but In
such case the shipper must be to the ex
pense of transporting his goods from the
nterlor to New York CHy. This mean, that
the rate by water from the Interior point
n the eastern portion of the Inlted States
to San Francisco Increase, as the distance
Lrm. .tW Yrk ,nrr: hat la. the rate
which these railroad, must meet grow, pro
gressively higher a, the seaboard 1. receded
from The case further shows that as a
practical matter traftlc only move, in very
small quantities by thl. water rout, from
nY. ,hRa th0 B-lo-P'tt.bur
air.'.? rat ,0 SP". e have
already seen, are higher than to Portland
from all territory east or the Missouri River
Assuming now. that under the decisions of
the supreme Court these defendant, may
properly name a lower rate from New York
to s.attl, than to Spokane, or possibly that
they may properly do th. .am. ,h,nK' from
Buffalo or from Pittsburg, upon what possi
ble theory can they alip:T tno.. rate, from
an Interior point from which trafilo never
move, by water and could not .0 move ow-
PoTnt to t- h'Sv- l0:1 -8 frm tn "terlor
point to New York.
Article, consumed upon the Pacific Coast
rn"cr.",UtaCU,"d b'n ,n Nw Vork and
t?v. "r"" ,he" poln" l!'utra-
Jn v y-w !f the artJcle " nwnufacturod
Francisco and the rail carrier. In order to
obtain a p.rt of this business, must name
thh" . Ne"' York to San Frnclsco
which is equivalent to the water rate If
the same article Is manufactured In Chi
cago It cannot, generally .peaking, move
by water, but must move by rail. In this
,V" r11 " 10OO mile, .horter
and the cost of .ervlce to the r.llroad
company materially less. it u therefor,
for the Interest of the railway that article,
consumed upon th. Pacific Coast .hould b.
manufactured In Chicago rather than In
New lork. The hlc.go manufacturer
moreover, demand, of the railway a rat.
which will enable him to .ell ln competi
tion with the manufacturer In New York
For this reason railways have applied
from all Eastern territory the sagne rat.
which water competition force, them to
make from the Atlantic seaboard and ter
ritory Immediately contiguous. Th. Com
mission has previously examined this phase
of the question, ha. hold that carrier,
need not make a lower rat. from the Mid
dle West than from the Atlantic seaboard,
and ha. virtually approved the present ys
tem of blanket ratea (Business Men'.
League, of St. Louis va Atchison. Topeka A
Santa Fe Railway Company. 0 I. c. C. Rep..
818.) "
It 1. suggested that th. Commission pos
sesses today, under the amended law a
more extensive authority than It formerly
had and that for this reason w. should
declare thl. discrimination against Spokane
ln favor of the Coast town, to b. unlaw
ful. Th. amendments of June 20. 1906.
which conferred these enlarged power, did
not In any respect change the third and
fourth sections. The Interpretation which
had been put upon those section, by th.
court wa. well known to Congress, and th.
alleged discriminations and hardships re
sulting from that Interpretation were called
forcibly to the attention of the committee,
having that legislation In charge. That
Congress did not. In making the extensive
revision of the act which wa. effected by
these amendments, see fit to alter the third
and. fourth sections in this particular. 1.
highly persuasive that It wa. th. Inten
tion of that body to leave the law and lt
practical working, a. applied to the cas
before us. exactly a. It had been.
We are constrained to hold that the de
fendant, do not by the scheme of rates
under consideration violate th. third and
fourth sections.
Tho complaint also alters, that the de
fendant. grant to th. Coast teiminal more
favorable minimum, and permit. In cer
tain cases, the mixing nf carload shipment,
to the prejudice of Spckane, In addition t
the charging of. the higher rate. Very
little was said upon this branch of the case
ln the testimony and It ha. .carcely been
referred to In the argument. It doe. not
appear from an examination of the tariffs
that In th. instance referred to is th. com
IN SPOKANE CASE
plaint a better minimi m 1. accorded upon
shipments to the Coast than would be
available upon similar shipments to Spo
kane, and also that, notably In the hand.lng
of varlou. kind, of cotton fabrics, the right
to mix carloads is accorded Coast ship
ments and not to shipment, to Sokane.
Water competition may Justify a dif
ference ln minimum, or ln the privilege
of mixing carloads exart'y as It Ju.tlflc.
a lower rate. This Commission held In
Klndel v.. Boston Albanv Railroad Com
pany. 11 I c c. Rep.. 4H5. that carrier,
need not accord a carload rate to hlp
ments of cotton piece good, to Denver, al
though they did apply Uch rate, on ship
ment, to San Francisco. It wa. held In
the same rase that a refusal to allow the
mixing of different kind, of cotton fabric,
in case of Denver traffic while permitted
upon transcontinental business was not ln
violation of lnw.
The presumption is that whatever privi
lege of this sort Is accorded one l,cs!lty
should be accorded the other, both be
ing served under the same circumstances
by the same carrier. It would fairlv be In
cumbent upon the defendant, to .how In
thla ease th. circumstance, which require
the more favorable rule at the Coast ter
minal. So Httle attention ha. been paid
to thl. matter, however, that we .hall
undertake to make no order on thl. branch
of the casea If there I. any discrimination
of the kind against Spokane which does
not rest upon a substantial hast, and which
the defendants are not prepared to Justify,
they will undoubtedly correct It without
further proceedings. If the complainants
conceive that discrimination of thl. kind
Is unduly continued the better way Is to
file a new petition and bring thl. matter
specifically to the attention of the Com
mission. One other matter which wa. gone Into
at some length upon the hearing may be
referred to In this connection The report
or the Commission In the original Spokane
case. B I. c. C Rep. 478. found that Spo
kane was discriminated against not only
in comparison with the Coast towns rarther
west, hut also as compared with Missoula
and other town, upon the east. There is
some suggestion ln the complaint th.t Mli
soula still enjoy, th. benefit of more fa
vorable rate, in a few Instances
The original case wa. decided ln the
Winter of 18H2. and soon after the North
ern Pacific Railway Company, which wa.
the defendant In that proceeding. at
tempted to comply in substance with the
order of the Cunmlsston. which had di
rected certain changes In rates to Spo
kane, principally the charging of a lower
class rate from St Paul than wa. made
to the Pacific Coast. The advent of the
Great Northern Railroad as a transconti
nental competitor at about the same time
.till further complicated the situation, and
the result was a period of very unsettled
and tinstatlsfactory transcontinental rate
conditions lasting from 1SH3 down to lvis
The Jobbers upon the Pacific Coast, notably
those of San Francl.-ro. insisted that the
rate, were too favorable to their competitors
ln the Middle West, and they were ag
gressive In their Insistence upon a readjust
ment of these tariffs. Finally an under
standing was reached between the Jobbers
of the Pacific Coast and the transcoiitlnn
tal lines by which rates were restored, the
difference between carload, and less than
carloads being materially widened. The
adjustment of rate, then put into effect
was subsequently in the main approved by
this Commission In Business Men'. league
of St. Louis v.. Atchison. Topeka Santa
Fe Railway Company. I. c. C. Rep., 31S,
and has remained In effect ever since.
- By this restoration of rate, m 180S tho
original discrimination against Spokane
aa restored, all attempts to comply with
the order of the Commission being aban
doned and rates re-established upon the
original basis. We have seen that In l'.xio
the American Hawaiian Steamship Company
put Into service a line of .tearr.shlps via
the Straits or Magellan, and by tho year
11812 this company had extended Its oper
ations as far north as Ta -oma and Seattle.
Traffic had also begun To move t some
extent via this line and these Sound pvt.
to Srnkane. For the purpose of meeting
this competition the defendants pnt Into
effect, about 1902. certain additional com
sviodlty rates to Spokane, hut the general
situation was not changed.
Certain r1ght.-of-way through the City
of Spokane were needed by the Great North
ern Railway In the course of It. construc
tion from th. Kast to the coast, and
that company applied 10 th. citizen, of
Spokane for a donation of the necessary
land. The president of that company held
several meeting, with the citizens and with
varlou. committees on this eubloct. during
w-hlch he elLher exoressly said or left a
very strong Impression that If this right-of-way
wa. granted the Great Ncrthern
Railway would apply terminal rate, at
Spokane. At about the time that railroad
wa. opened for operation to Spokane, a cer
tain tariff wa. printed, but apparently never
put Into effect, which named rates to Spo
kane not quite, as low as those to Seattle,
but very much lower than any which were
ever actually applied. The alleged failure
of -Mr. Hill to keep hi. promise, and the
Inability of Spokane to procure in any way
w hat Jobber, conceived to b. fair ratea
finally led. In 1M04, to the organisation of
a boycott by the Jobber, of Spokane against
the Great Northern and Northern raclflo
Pne.. These shipper, by concerted action
diverted their entire shipments to the t nlon
Pacific line, of which the Oregon Railway
Navigation . Company 1. the delivering
carrier. The result was a conference be
tween the railways and th. Jobbing Interest,
of Spokane at which Coast Jobber, wer.
also represented, the outcome being an un
derstanding that Spoken, wa. to be ac
corded a certain defined territory.
It wa. said upon thl. hearing that thl.
territory was turned over to the Spokane
Jobbers by reducing the distributing rate,
from Spokane, which ware declared to b.
very much lower than the corresponding
distributing ratea from Coast towns.
Whether those rate, are er are not more
favorable to Spokane, we have not consid
ered, but It seem, certain that no change
wa. made In the.e rate, at this time. The
purpose was effected by according to Spo
kane certain carload commodity rates from
E.istern points of supply. The railway. In
quired where the various Jobbers obtained
their supplies and put Into effect such
rates from those points as would, ln com
parison with rates to terminal points, en
able Spokane to undersell the terminal Job
ber. Previous to this time the commodity
rates accorded to Spokane had been few In
number. Thev were now very much In
creased. Previous to thl. they had seldom
xtended farther east than St. Paul and
never beyond Chicago. Now many of them
were applied a. far a. the Buffalo-Pttt.burg
line r.d .oma wer. extended even to the
Atlantic seaboard. The conceded effect wa.
to paw over to the Jobber of Spokane a
territory about 1O0 miles ln extent to the
east and to the south. Including the l'a
lous. country upon the north, of the Snake
River.
While, therefore, Spokane re.ts under th.
rat. disabilities and discrimination, stated
ln th. opening of thl. report. It enjoy.. Id
so far a. It can under that scheme of rate
making, exceptional freight rate.. Spokane
I. probably more favored ln thl. respect
then any other Interior Jobbing point.
The real question which this commission
ha., therefore, to consider arises upon the
third claim of the complainant, that these
rate, to Spokana from the Ka.t are unjust
and, unreasonable, under the first section of
the act.
Before proceeding to the main question,
there 1. one preliminary matter raised both
by the pleading, and upon th. argument
which .hould be noticed, namely, with ref
erence to what line of railroad 1. the rea
sonableness of these rates to be determined.
The Great Northern Railway was th. last
of these transcontinental lines to be con
structed. It was built at a time when the
cost of construction wa. exceedingly low.
It Mem. to hav. been honestly built. The
con per mile mas much les. probably than
th. cost of either of the other routes. It.
location ln th. matter of grades and curve.
I. favorable. .0 that th.- expense of opera
tion by thl. line 1. perhap. lower than by
either of the other routes. I'pon the other
hand, the Northern Pacific and the Union
Paclflo were built at a much earlier date
than most of the Great Northern. They In
volved much of what may be termed ex
perimental outlay. If from the first the
best or Judgment and the greatest of econ
omy had been employed ln constructing and
developing those .ystems. the actual amount
of money invested today would have been
greater than In case of the Great Northern.
In fact, ln the earlier days of both these
properties there was waste and poor Judg
ment and d:shoneeiy. so that both the cost
of construction and the amount of the orig
inal Investment-are probably much greater
than with the Great Northern.
Now the complainant, say th.t It i the
buslnes. of the commission to tnke the least
expensive of t!:ee route, and to determine
these rates upon the basis of the Investment
In that route. we should a'.low tho Great
Northern Company. If that be the least ex
pensive, what w.li b a r:r return upon In
property considering the tinnnclal l-.lst. rv ot
that company, and no more, even tuough
thu "'abllshed when applied to
tho business of its conipetuors would de
prive them of a Xa.!r return u;n their In
vestment. The defendant, insist th.t ex.cfv the op
posite course shou:d be r-.llnw.ed Thev urge
that a railroad is entitled t.. a fair rc-iurc
upon it. Investment, and that this ru.o ap
plies to a.l railn.ads l:ke. This is t-.
rlK-ht ot the railroad luhr:ng u-.iier disad
vantages of location and operation, as well
as of that one more favorably circum
stanced. Hence the commission " must con
sider that railroad ho net earning. wlU
be lea.t. for if it establishe. rate, which
only yield fair return, to the road most
favorably .Ituated. It or necessity know
ingly and Intentionally deprive, every other
road of a fair return upon tho value or It.
Property.
ln .upport or these proposition, counsel
ror the coinplninan-.s relies upon t:ie we l
known case. Protrieior. of Charles Plver
Bridge Company v. proprietors of Warren
Bridge company, n peters. 40. In 175
the Legislature of Massachusetts granted a
charter for the construction of a toll b.-.vls.
acros. th. Charles River. The charter pro
vided that the proprietors of th. brlde
might .x.ct toll, for Its use for a certain
period, after which It should become free,
and thl. time, according to an amended
charter, would expire about I SAO
In is7 lae Massachuet is t ..i.'.i.ir.
granted auihotity
t'-r the conMruetiun of
second hri.i., .
... i,..!,,.,,.! lo ana 111 close prox
imity with th., Charles River br.dte T -
bridge was t.. be used as a l-.ll bridge lir
six years, and after the exptr.itlon of that
time was to be free. It was erected, main
tained as a toll bridge fir the .pecltled
years, and became a free bridge In 1S..7.
This, of course, virtually conns, ated the
Charles River bridge, smce no u.-i would
pay toll when he could go for nothing upon
the Warren bridge.
Thcreuivun. the proprietor, of the Chr.rle.
River bridge brought suit, claiming that
their charter was virtually a contract al
lowing theni to maintain their bridge .t a
profit, and that the Legislature, bv granting
cnarter. nad taken th
I rop-
en witnout warrant of law.
The court
M.-m. nooever. that the granting of t'.e
first charier did not prevent the gram ng
or th. se. ond. even tlioush the pra.-ti. ai
effect of It was to render valuel.s. the
property w hich tho plaintiff, had construct
ed under that charter.
The City of Spokane, argue the com
plaint.. Is entitled to the cheapest means of
transportation between St. Paul and Spo
kane. The .Government may construet a
railway or It may delegate that duty to an
'nl- If It electa to employ an agent U
may require It. and Indued must req-.ilr. It,
to establish reasonable rates with respect to
Its own line, even though this should bank
rupt other lines already ln existence.
Thl. claim find, some support In Brun-wl.-k
Top-ham Water iMstrlct v Mam.
Water Company, e.i Maine. R71. a well-con-aldered
c.se. do, 1,1. d ln l.4. That pro
ceeding was for the condemnation bv t'-e
water district of a portion of the plant of
the Maine Water Company, the question
being the basis upon whieh damages should
be assessed. The water district claimed that
the cost or construction furnished the true
measure of damages, but the court held that
the defendant was entitled to whatever Its
property wa. fairly worth a. a going con
cern furnishltfg water to the people of that
community at reasonable rate.. Being In
quired cf what was meant by a reaaora'il.
rate It answered that the ce.t to tne com
munity of supplying Itsc.r by the cheareet
mean, would be a very Important element
ln determining th.t rate.
These cas-. .how. what tnd-ed must r.
evident upon general punrip'.e. that th.
charter of a puhlic-servu e corporation doe.
not guarantee to It any return upon it. in
vestment. The public may perform the
ame .ervlce or It may charter another cor
poration for that purpose, without reference
to th. effect upon til. revenue, of the exist
ing company.
While, however, thla 1. th. law we do
not think that ,h. re.u.-t c .nTet'ei Tor fy
the complainant of necessity follow, wh.n
these principle, ar. ,p,lc(1 0 t:1.
of this country. There 1, a wide d rr. r. Ti."
between a water stem which sui .0 . a
;'"k;'',w'"m"""1' " "of-j winch i.
?'0 ,f rontmcrcial and industrial
..ippl.ving many communities. In, ,,r
bpokane could not deve.-.p ,f .rj ,.
oreat .Northern Railway a one. nor , we
look wholly ,0 ,h. interest of .-;.os.,.
The whoie territory served ,v t..-e de-
...ic mufi De considered
existence of all Uie.se railroad, t,.
r.d th.
tliml u-r-l'ne
ra:i-
' aosolute.y e.-.-nli.il
cannot exist utiles:
llshed which will yield
their property. - mut
rates in. e:a'
fa.r return u;nn
there. .re. ir
Ing these rales, have r . ..
mut-h abort
man o- th L'nton la
upon the m.iin m,.
Spokana
Ute-sw. mads, w liilo it 1
th Union Paeifitv ti.
i upon a hrai:. -i -t
1 much mr an Iiiil.Jcn
uur.tnrsa of ;,ik ,j-t
lu case v. : i e
- nion i -He inc. It Is
rt- from St. !tu. t
kit:
not-i other rm.s of tho I :
la
, " r. a or other
Ilnp. and that thin r.-..Ke,
traniMi.i:i-,..nT il
ff-t t r.iu-: i.
eonnid-ered by
owinic to ihe rt ;:ii..ii nhi
Tittta between rates from all K:i
-""l-""" men an u j n, :f c ,
iKslnta. But .'ill m xamlmnK t;:e V:n.m"
the complainanta that Die ia:-?t f-o-i
I'ul are excwsiv e. n ire inri.r..-.! t- t .iJ
that we should mainly hav r- f. r.n.-e t
two Uikaia which moat d:reci!y handle U
traffic.
What. then. ar rfavnaMe rnt.p to
! K tO br
pilar: to
cnurKea over the line of tno Of
principally from St. I'aui ani corrfsjvirKln.ir
territory, bavins tvf. u na' tnainlv to Th
Northern Pacific and :.' Ore.-it Northern
companies ?
in that of i -quoted sP-serrju fr-.n
v. Ames. ItiS U. . 4J6, the ;Sujre.-
Sm yt It
v'ourt
or tne l nited states said:
' We hold, however, tiiat the bns:a of all
calculations as to the r'A-tnnit;neM of
rates to be char-trod by a corporation main
tain In a hi5uy under leKi:ative sane
tlon must be the fair va.ua.iwin of the
property b ir.rr us-M by It for the con
en.me of the public. And In order to
ii-ertam that aiix'. the orlftln.il com of
construction, the amount expended In per
manent Improvement a. the amount and
alue of t bonus and stock, t he pres-nt
a a compared n ith th original cost of con
s' ruct Ion. t h-e rrbable earn .nf capacity
the property under particular raies "pre
scribed by the statu? and the sum required
to me-t operating xpe-n-es are ail matte-
for conslderat !n. and are to be s:tvn such
weight as may be Just and riirht In ea--fi
case. Wo do not any that th re may not
be other matters to be regarded In esti
mating the value of the property. What
the company la entitled to a.k Is a f!r
return upon the value of that which It .em
ploys for the public convent nee."
What of the elements above enumerated
have we before us In the prener.i case -We
have, first, an est 1 ma to of the cort o!
reproducing at the present time hot', the
properties. Second, some lr.formation as t.i
the money which has actually pone In"
their construction. Third. ths present capi
talization. Fourth, their earninrs hof.i
IS r os and net for recent years under t'.
present schedule of rates We hae ai.:
- statement showing tho reduction ln reve
nue which would result from certain
change tn these rates to Spokane. We will
briefly atate the facta upon the flrst four
headings with respect to euch of then, two
defendanta, bee Inn ma; with the Northern
Pacific.
Cost of Repi-oductlon Northei-ri Piscine,
The Northern Pacife ."ompany with a
view to showing the cost of reproducing
that property, pave evidence upon the hear
In a- to the following Import:
In ls. after the conclusion of the last
receivership and after the present com
pany bad entered luto th operation oX the
to muy one particu.or ra..r..J oul , ',.,
whole .Ituation. and must coi.Moer ,e e -feet
Of whatever order e make UJ " .',
these defendant. flu. h wis .....
formerly ,.KN.,.d a "" ';" "
adhere K"P" Gi'!" to lh1 "Wnion w.
- " 1 1 1 r.i'i 1