COST OF CARRIAGE become a gainer; further, the Fremont Company in 1893 shifts to the other side of the line, becoming a gainer and holding the Union Pacific with it, while five other companies still remain losers.1 Thus, it clearly appears that there must be some error in the mathematical method of this case. The Supreme Court had occasion to con sider the cost of transportation in the so-called South Dakota Case.2 In that case a schedule of rates had been prescribed by the railroad commission of South Dakota. Here the Circuit Court assumed that for succeeding years the tonnage carried by the railroads would remain substantially the same, and it undertook to separate the passenger and freight business, and found from the testimony that the gross receipts from passenger business, had the legislaturemade rates been in effect, would be reduced 15 per cent, and a reduction in freight charges would have diminished the gross receipts from that source by 17 per cent. It was also found that the cost of doing the business, as expressed in the term operating expen ses, would be practically the same. The court below found the value of the particular carrier's' property in South Dakota to be 1 The statistics cover tftree years, 1891, 1892, and 1893. The companies were the Burlington, St. Paul, Fremont, Union Pacific, Omaha, St. Joseph, Kansas City. In 1891 had the earnings under the law been reduced, according to the expert testimony (29$ per cent) the several companies would have lost from 5.74 per cent to 59.76 per cent, except the Fremont Company, which would have gained 10.63 Per cent. In 1892, the several companies would have lost from 3.73 per cent to 32.6^2 per cent, except the Union Pacific Company, which would have gained 4.06 per cent (the year before this company would have lost 8.44 per cent). In 1893. the several companies would have lost from 1.55 per cent to 33.64 per cent, except the Fremont Company and the Omaha Company, the former gaining 6.84 per cent and the latter 1.99 per cent. The table in full is to be found in 169 U. S. 535. » C. M. & St. P. R. R. v. Tompkins (176 U. S. 171). ' C. M. & St. P. R. R.
167
$10,000,000,* but it was held, that it was not fair to consider that sum as employed in doing the local business, for the same property was employed in doing the inter state business. The court below also found that the true way to determine the value of the property which is employed in the local business was to divide the total valua tion of $10,000,000 according to the pro portion that existed between the amount of gross receipts from the interstate and from the local business, both of which amounts were accurately stated.' Upon this basis of division it was found that the value of the property employed in local busi ness in a particular year3 was $1,900,000; dividing this amount by the gross receipts from local business, it was ascertained that these receipts represented 16.03 Per cen* of the valuation. The court then proceeded upon the supposition that the commission's schedule of rates had been enforced during the year it had been considering. Taking the supposed reduced earnings, it found that the valuation of the carrier's road engaged in the local business would have been $1,600,000, and upon such basis that the gross receipts from local business (under revised schedules) would have amounted to 16.02 per cent of the valuation of the property. As a matter of law, it was held that the variation of percentage was not sufficient to justify a declaration that the reduced rates prescribed by the commission were unreasonable; in short, the court be low was of the opinion that the earning capacity of the road was so slightly reduced that it could not be affirmed that the new rates were unreasonable. Commenting upon this method the Su preme Court of the United States suggests 1 This fact was found by the court below, notwithstanding evidence to the effect that it was bonded for over $19,000,000. 1 The receipts from local and interstate business were ascertained from the testimony of the carrier. "The court considered the effect of the statute for four years.
