Robert Allen v. St Louis, Iron Mountain Southern Railway Company No 440 Robert Allen v. St Louis Southwestern Railway Company No 441

• Decision Date: 16 June 1913
• Docket Number: Nos. 440 and 441,s. 440 and 441
• Citation: 33 S.Ct. 1030,230 U.S. 553,57 L.Ed. 1625
• Parties: ROBERT P. ALLEN et al., Railroad Commissioners of the State of Arkansas, Appts., v. ST. LOUIS, IRON MOUNTAIN, & SOUTHERN RAILWAY COMPANY. NO 440. ROBERT P. ALLEN et al., Railroad Commissioners of the State of Arkansas, Appts., v. ST. LOUIS SOUTHWESTERN RAILWAY COMPANY. NO 441
• Court: U.S. Supreme Court

230 U.S. 553

33 S.Ct. 1030

57 L.Ed. 1625

ROBERT P. ALLEN et al., Railroad Commissioners of the State of Arkansas, Appts.,

v ST. LOUIS, IRON MOUNTAIN, & SOUTHERN RAILWAY COMPANY.

NO 440.

ROBERT P. ALLEN et al., Railroad Commissioners of the

State of Arkansas, Appts.,

v. ST. LOUIS SOUTHWESTERN RAILWAY COMPANY.

NO 441.

Nos. 440 and 441.

Argued April 12 and 15, 1912.

Decided June 16, 1913.

Mr. Joseph M. Hill for appellants.

Messrs. John M. Moore, Martin L. Clardy, and Samuel H. West for appellees.

Mr. Justice Hughes delivered the opinion of the court:

The legislature of Arkansas, on February 9, 1907, passed an act fixing the maximum passenger fare within the state, on railroads over 85 miles in length, at 2 cents a mile. On June 4, 1908, the Railroad Commission of the State adopted Standard Distance Tariff No. 3, which superseded the former freight tariff, and established maximum intrastate freight rates for all classes and commodities. The requirement with respect to maximum passenger fares as provided by the legislature was also promulgated by the commission.

In July, 1908, the appellees, the St. Louis, Iron Mountain, & Southern Railway Company and the St. Louis Southwestern Railway Company, respectively, filed their bills in the circuit court, alleging that the action of the legislature and the commission, in fixing these rates, was unreasonable and confiscatory, and also that it amounted to an unconstitutional interference with interstate commerce. Answers were filed by the defendants, the members of the railroad commission, and voluminous evidence was taken. The court found the rates to be confiscatory, and a decree was entered enjoining their enforcement. 187 Fed. 290. The railroad commissioners appeal.

The contention of the complainants based upon the asserted interference with interstate commerce was rightly overruled by the court below (Simpson v. Shepard, 229 U. S. ——, ante, 729, 33 Sup. Ct. Rep. 729), and the only question which remains for our consideration is whether the proof was sufficient to sustain the finding of confiscation.

It is said on the part of the commissioncrs, that the freight tariff No. 3, adopted in 1908, was substantially similar to that which had been prescribed in 1904, and that the latter was in substance a repetition of the first tariff of the commission, which had been put into effect in 1900; that is to say, that, while changes had been made from time to time to provide suitable adjustments, there were no substantial differences in the rates imposed by the last tariff, of which complaint was made, as compared with those of the earlier years when considered with respect to the effect upon the freight revenue in its entirety. It is urged, however, by the companies, that there were reductions in fact, and that, apart from this, there had been a continuous increase in the expenses incident to operation in the state and in the burdens imposed upon the companies; and also that the passenger fare act of 1907 had largely reduced the revenues of the roads. We deem it to be clear that the right of the complainants to contest the validity of the rates, if, as applied to changed conditions, they were found to be confiscatory, was not impaired by their action in putting them into effect. When these suits were brought, the passenger fare act had been in force for more than a year, but this gave opportunity to ascertain the actual results, and, even if it were assumed that the new freight tariff of 1908 did not greatly reduce the former rates, the complainants were certainly not barred from presenting to the court their contention that the operation of the rates as a whole deprived them of a fair return from their entire intrastate business.

No question is presented as to the value of the properties within the state which were used by the companies in the public service. This was the subject of a formal stipulation by which it was conceded that the assessments made by the state tax commission, multiplied by two, should represent the value of these properties, respectively, for the purposes of these suits. Upon this basis, the value of the property of the St. Louis, Iron Mountain, & Southern Railway Company was found to be $39,986,564; and that of the St. Louis Southwestern Railway Company, $14,029,634.

In the case of the Iron Mountain road, the period taken for the purpose of calculation was the six months ending December 31, 1907. According to the statement of the company, the total earnings from the business in Arkansas, interstate and intrastate, for this period, were $6,675,076.79. The total operating expenses, together with taxes and rentals, amounted, for the same period, to $5,175,301.44. The net earnings for the six months were thus $1,499,775.35; and this amount was equivalent to a return at the annual rate of 7.5 per cent upon the entire value of the property.

The statement submitted by the St. Louis Southwestern Company...