Show FREIGHT RATE CAS E DECIDED Spokane Finally Wins a Dis Dispute Dispute Dispute With the Transcontinental Transcontinental Transcontinental Lines LASTED SEVENTEEN YEARS DECISION OF VAST IMPORTANCE TO INTERIOR POINTS nn n t Spokane Sp ka Wash Wash March r h 2 The Spokane Merchants association asso Is planning for a great celebration in honor of the freight rate decision announced by the interstate com corn commerce commerce merce commission today The de tie cislon which comes after a cam cant campaign campaign that has been waged by shippers for seventeen years is ex expected expected expected to add a vast territory to jobbing field and is de deC C dared by President Doland of the Merchants association to be one of the greatest things that has ever happened In the history of Spokane Washington March 2 The Interstate commerce commission today decided the two points paints in the complaint filed by bythe bythe bythe the city of Spokane against the North Northern ern em Pacific tho the Great Northern and the Union Pacific which were First That the rates from eastern destinations to Spokane were higher than to Seattle a more point p pt Second That the rates to Spokane were inherently unreasonable Water W ter Competition On the first point defendants main maintained maintained tamed that water competition com corn compelled compelled polled them to charge the rates in ef of effect effect foot to Seattle and that therefore they might charge a higher rate to Spokane without violating the tho long and short haul provision or without discriminate ing against Spokane under the law The commission sustains the claim of tho the defendants in this respect and holds that the rates to Spokane al although although a though thought higher than to Seattle are not unlawful On tho the second point the commission sustains the claim of the lie petitioner and holds that the rates from front eastern doe des destinations to Spokane arc are unjust and unreasonable It reduces class rates from St Paul to Spokane 16 23 3 per percent percent percent cent and makes substantially the same reduction from Chicago to Spokane Rates east of ot Chicago are arc not dealt with The decision if it applied in Jn principle to all commodities and ana to all interior points must work a revolution in rates from eastern points of origin to all In Interior Interior tenor transcontinental territory and in that view it Is one of the most far reaching decisions ever eer rendered by the commission Opinion Unanimous The case has been under consideration tion for about a year and a half For many months the commission has been endeavoring to settle the th Intricate points involved but not until a few days ago was an agreement possible The unanimous opinion of the commis commission commission commission sion was prepared by Commissioner Prouty It is pointed out that nearly all com corn commodities commodities to the Pacific P coast move un under under under der commodities fates ates and these were the principal subject of complaint upon i ithe the part of Spokane Rates from all points on the tho Missouri river to Seattle are the same while rates from the same points to Spokane usually are consider considerably considerably considerably ably higher than to Seattle and an they increase as the points of origin He lie far farther farther ther flier east As illustrative of this condition the complaint referred to arti artl articles des cles The decision holds that the com corn commission commission mission can fix the rates only upon the articles enumerated The cut in rates ordered is horizontal and amounts in same instances to 90 per cent in other ot I cases to only 6 or 8 S per cent In the hearing the cost of reproducing I the properties of the Great Northern and Northern Pacific their financial II history their present capitalization and I their earnings In recent years eurs were ere I fully considered Findings of Commission Tho The commissions findings in brief follow First The system sY of transcontinental rates now In force applies lower trans franc transportation transportation charges from points of origin upon the Missouri river and east to Pa Pacific Pacific P rifle coast cities than are applied to in tn intermediate Interior points held that this scheme of rate making has been forced by water competition between the Atlantic and the Pacific coasts and that the maintenance of the lower rate to the lie more distant coast point is not of necessity a violation of the third or orthe orthe orthe the fourth sections since water compe competition competition creates a dissimilarity of circum circumstances circumstances circumstances stances and condition between the in interior Interior tenor and coast Second Water competition may jus ins justify justify a difference in carload minimums and in the right of combining different commodities at the carload rate as well w as in the rate Itself but carriers should be prepared to justify such preference Question of Reasonable Rates Third In determining what arc are rea ra reasonable r rates between two points nei net neither neither ther thor that railroad which can afford to handle traffic at the lowest rate or that Continued on Page 3 n FREIGHT RATE CASE DECIDED Continued from Page 1 whose necessities might justify the highest rate should be exclusively con considered considered considered Rates must be established with reference to the whole situation Fourth Certificates issued against the ore lands lauds formerly owned by the Great Northern company cannot be considered in determining what are tea rea reasonable earnings for fOl that company at atthe atthe atthe the present day da Fifth The Great Northern Railroad company has in the its stock issues among its Ito stockholders at par from time to time although the market value of the tho s stock tock was often most always above aboe par Without ex cx expressing pressing any opinion upon the legality or propriety of this practice it is held that thal this fact at this time can have haye no bearing upon the tho earnings to which that is entitled Sixth Neither can enn the capital stock of the Great Grant Northern Railway com corn company compan puny pany pan be reduced for the purpose of de dt determining determining what its fair earnings should be by the amount of that stock which was originally issued without consider consideration r Seventh In determining what will be reasonable for the future the tile commis commission com mis Ion sion may properly consider that the rates in effect erred a large surplus has been accumulated In the pat past pa t but It should not make mako rates for the purpose of disturbing that surplus to the public Eighth The importance of or the ques question tion whether a railway shall be allowed to earn a return upon the unearned in increment increment crement represented in the value of Its IU right of way wa is Illustrated by the facts fats in this ease case but is not nut discussed or de do decided decided Excessive Earnings Ninth on an examination of fhe he history of these properties the cost of ot reproducing them at the present ent time tune the original cost of construction the present and the man manner manner mannor ner nor in which that capitalization has hils been made mUl held that the earnings of both the Great Northern and Northern Pacific in recent years has been excessive sire sive Tenth The only duty dut of the commis commission commission sion in this case is 11 to establish reason reasonable reasonable able rates from eastern points of or origin to Spokane and in so 50 doing It can only act acl upon those rates specifically called rolled to its attention although it must have In mind the effect upon the revenues of or these companies pf pr resulting reductions upon other commodities om modi ties and at other points than han Spokane Eleventh The rates attacked are class rates from St Paul and Chicago to Spokane and commodity rates upon thirtyfour enumerated articles Class rates are established from St Paul to Spokane which are 16 23 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 arbitrages Twelfth In case of all commodities except five the present rate from Chi Chicago Chicago Chicago cago to Seattle Is established as a rea rca reasonable reasonable local rate from StPaul St Paul to kane Upon five articles somewhat higher rates are fixed Rates nates on these commodities from Chicago to Spokane are made 16 23 3 per cent above those from St Paul Neither class nor com corn commodity commodity rates are named from points east of Chicago The order will be made effective May Mayl Ma L |