Northern Pac. Ry. Co. v. Lee

• Decision Date: 09 September 1912
• Docket Number: 1,094.,1,093
• Citation: 199 F. 621
• Parties: NORTHERN PAC. RY. CO. v. LEE et al. GREAT NORTHERN RY. CO. v. SAME.
• Court: U.S. District Court — Western District of Washington

199 F. 621

NORTHERN PAC. RY. CO. v. LEE et al.

GREAT NORTHERN RY. CO. v. SAME.

Nos. 1,093, 1,094.

United States District Court, W.D. Washington, Southern Division.

September 9, 1912

Geo. T Reid, J. W. Quick, and L. B. da Ponte, all of Tacoma, Wash for complainant Northern Pac. Ry. Co.

W. V Tanner and Stephen V. Carey, both of Seattle, Wash., for defendants Lee, Jones, Wilson, and Tanner.

F. V Brown, of Seattle, Wash., for complainant Great Northern Ry. Co.

S. J. Wettrick, of Seattle, Wash., for defendants Sylvester.

CUSHMAN District Judge.

These cases are now before the court upon demurrers to the complaints. They were heard together, and will be considered and disposed of in the same way.

The bill in case No. 1,094 alleges: That complainant is operating as one system lines of railroad in the state of Washington and other states, and is engaged in state and interstate commerce. That the greater part of its business in said state is interstate; the same cars being used for both interstate and intrastate commerce. That defendants Lee, Jones, and Wilson constitute the Public Service Commission of the state of Washington. That the defendant Tanner is its Attorney General. That the defendants Hyde and Carman are intrastate shippers of the state of Washington, sued as representatives of that class of shippers.

That in February, 1912, said Commission made an order requiring complainant to cease making charges under its freight tariffs throughout the state, and thereafter to charge only lower rates fixed in the Commission's order. That complainant has complied with the order to avoid numerous suits and the risk of large penalties, which penalties might have aggregated more than $100,000 a day.

That the rates lowered by the Commission were on freight in classes 1, 2, 3, 4, 5, A, B, C, D, and E, according to complainant's classification of freight products, and excluded 'lower class, or commodity rates * * * specifically established.'

That the Commission found complainant's property used as a common carrier in the state of the value of $127,250,000. This was conceded by the bill to be approximately true. The value of the property is alleged to be:

For state business............................ $70,648,971 00

For interstate business....................... $56,601,029 00

For state freight business.................... $43,480,949 00

For state passenger business.................. $27,168,022 00

For interstate freight business............... $39,833,444 00

For interstate passenger business............. $16,767,585 00

That for the fiscal year ending June 30, 1911, its revenues in the state of Washington, under the old tariff, were:

From state freight business ................................ $6,415,416 35

From interstate freight business ........................... $5,877,130 10

Miscellaneous freight earnings ............................. $ 561,050 41

Intrastate proportion miscellaneous freight earnings ....... $ 292,806 60

Interstate proportion miscellaneous freight earnings ....... $ 268,243 81

Revenues received on account of hire of freight equipment .. $ 638,379 65

Intrastate proportion of same .............................. $ 333,163 96

Interstate proportion of same .............................. $ 305,215 69

Revenues from intrastate passenger business ................ $3,654,988 04

From interstate passenger business ......................... $2,255,824 66

Miscellaneous passenger earnings ........................... $ 867,420 50

Intrastate proportion of same .............................. $ 536,378 14

Interstate proportion of the same .......................... $ 331,042 36

Rental passenger equipment ................................. $ 336,647 69

Intrastate proportion of same .............................. $ 208,169 47

Interstate proportion of same .............................. $ 128,478 22

Received from operations connected with passenger service .. $ 124,500 04

Intrastate proportion of same .............................. $ 76,985 84

Interstate proportion of same .............................. $ 47,514 20

That for the same year the operating expenses for the state of Washington were $13,280,609.31, segregated as follows:

For carrying freight ........................... $8,502,079 84

For carrying passengers ........................ $4,778,529 47

The ton miles carried intrastate freight were .. 420,662,143

The ton miles interstate freight carried were .. 738,963,823

That one ton mile, intrastate freight, costs 2 1/2 times as much as one ton mile interstate freight. That, therefore, of the total freight expense--

The proportion intrastate would be.................... $4,993,356 51

The proportion interstate would be.................... $3,508,723 33

For the same period--

The intrastate passenger miles were................... 128,783,847

The interstate passenger miles were................... 105,843,492 That the intrastate passenger miles cost 15 per cent. more than the interstate passenger miles. That, therefore, of the total expense for carrying passengers--

The proportion for intrastate service was............. $2,786,838 39

The proportion for interstate service was............. $1,991,691 08

That for said year the taxes paid were chargeable as follows, segregated on the basis of revenue:

Against intrastate freight earnings ............................. $ 442,881 65

Against interstate freight earnings ............................. $ 405,729 45

Against intrastate passenger earnings ........................... $ 276,723 92

Against interstate passenger earnings ........................... $ 170,788 72

The total earnings, as shown for intrastate freight and freight

equipment, was ................................................ $7,041,386 91

The total expense and taxes chargeable against the same was ..... $5,436,238 16

Leaving an income of ............................................ $1,605,148 75

That this income only amounts to 3.692 per cent. on the part of the property assignable to intrastate freight business.

The total intrastate passenger earnings, including rental and

hire of passenger equipment, were ............................ $4,476,521 49

The total taxes and expenses chargeable against the same

were ......................................................... $3,063,562 31

Leaving an income for intrastate passenger business ............ $1,412,959 18

-- or a percentage on the property assignable to intrastate passenger business of 5.201 per cent.

That on the total valuation assignable to all intrastate business, both freight and passenger, amounting to $70,648,971, the percentage of income was 4.272 per cent. That, using the same method of calculation for the fiscal year ending June 30, 1910, the income upon such valuation was 4.771 per cent. That the rates for the years 1910 and 1911 are as great as can be reasonably anticipated for the future, and constitute a less rate than capital employed similarly in the state of Washington generally receives. That the charges fixed by the Commission are much lower than the tariffs of 1910 and 1911, and that the change will cause a reduction in freight revenue of two hundred thousand dollars annually. That complainant's road 'is well and judiciously located, properly equipped and built, having reference to the business of the country and that reasonably to be expected, and is well and economically operated.'

The prayer of the complaint is that the order of the Commission be declared unconstitutional and void, and the rates fixed thereby unreasonable and confiscatory; that the Commissioners and Attorney General and their successors be enjoined from enforcing the provisions of the order and the rates fixed, and that the other defendants and all other shippers be enjoined from attempting to ship under said rates or to enforce the provisions of the order; that an accounting be taken of complainant's earnings and expenses and the value of the portion of its property devoted to freight traffic in Washington; and that an ascertainment be made of the return the complainant can receive thereon under existing rates.

The bill of complaint in case No. 1,093 alleges: That complainant is operating, as one system, lines of railway in the state of Washington and other states, and is engaged in state and interstate commerce. Public Service Commission of the state of Washington. That the defendant Tanner is its Attorney General, and that the defendants Fred Sylvester and George E. Sylvester are intrastate shippers of the state of Washington, sued as representatives of that class of shippers. That the power and duty of the Public Service Commission are defined by chapter 81, Washington Laws of 1905, as amended by chapter 226 of the Laws of 1907, as further amended by chapter 93 of the Laws of 1909, and as further amended by chapter 117 of the Laws of 1911. That by those laws it is made the Commission's duty 'to supervise and regulate the operation of public carriers, including railroads in said state, * * * to prohibit charging and collection of unreasonable charges, tariffs, rates and fares and to prescribe reasonable charges, rates and fares.'

That complainant's railroads were constructed and acquired at the fair and reasonable value thereof. That the same are judiciously and wisely located, and have been at all times, and now are, well, properly, and economically operated.

That upon complaint to said Commission-- made by certain commercial organizations of the cities of Tacoma and Seattle-- that the rates and fares of complainant and other carriers in the state were unreasonably high, a hearing was had, and the Commission made an order on December...