US SUPREME COURT DECISIONS

The laws of Michigan prescribing a maximum intrastate passenger fare for railroads whose gross passenger earnings equalled a certain amount per mile required that all lines of a railroad within the state should be treated as a unit in computing such earnings and in applying the rate limitation. In determining whether the rate was confiscatory in this case,

Held:

(1) In the absence of any suggestion of illegality or mismanagement in acquisition or operation, all parts of the railroad's system within the state, profitable or unprofitable, should be embraced in the computation. P. 250 U. S. 611.

(2) Unremunerative parts were not to be excluded because built and used primarily for interstate traffic (p. 250 U. S. 611), or because not required to supply local transportation needs (p. 250 U. S. 612); nor was a reasonable, chanrobles.com-red

Page 250 U. S. 608

though unremunerative, extension of service because furnished by acquiring traffic rights from another company. P. 250 U. S. 613.

(3) Sleeping car, parlor car, and dining car services should not he treated as separate operations, but the passenger service, including these facilities, must be treated as a whole. Id.

(4) In the present state of railroad accounting, what formula should be adopted for dividing charges and expenses common to freight and passenger services and not capable of direct allocation is a question of fact, rather than of law, and the Court cannot say that the trial court erred in adopting the method pursued in this case. P. 250 U. S. 614.

Affirmed.

The case is stated in the opinion.