USA > South Dakota > History of Dakota Territory, volume III > Part 44
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The pontoon bridge at Chamberlain cost about forty thousand dollars and served its purpose well. By September, 1906, the Milwaukee extension west- ward from Chamberlain had reached the Town of Interior, which was then booming. It was at this time that the rival companies, Milwaukee, Northwestern and St. Louis were engaged in making large extensions to their lines with a design of encompassing much of the trade of the country further to the west- ward. The Milwaukee line was grading from Presho to Rapid City. The Northwestern had its grade nearly finished from Pierre to Rapid City. The
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Milwaukee was grading further westward on its Pacific extension from Glenham across Standing Rock Indian Reservation into North Dakota about eighty miles of line being in South Dakota. Already by September the rails were laid to the Missouri River and a steel bridge was being built near the mouth of Grand River. The Milwaukee Company was also completing a line from Sioux Falls via Renner to Madison. The Northwestern had under contract the big steel bridge at Pierre, also an extension of thirty miles on the Bonesteel line. The Minneapolis & St. Louis line was being graded from Watertown to Leola and a branch from this line was projected from Cone to the Missouri River at LeBeau. The Crouch line from Rapid City to Mystic was built and put in operation in 1906. The railway work throughout the state at this time was so extensive that there was much delay on every extension owing to the lack of laborers. In fact, during 1906 the railway construction in the state was unquestionably the most important event. Next to it in all probability was the Belle Fourche irri- gation project under the direction of the reclamation service of the general Government.
In 1907 and earlier, the railway passenger rate west of Chicago as far as the South Dakota line was two cents per mile. In this state the rate was three cents. At the legislative session of 1907 a bill to reduce the railway passenger rate in South Dakota from three cents to two cents per mile was introduced by the insurgents, but was vigorously opposed by the railways and the regulars. The bill provided for a two cent fare on mileage books and a two and one-half cent fare on tickets. It finally failed to pass. Enough insurgents voted with the regulars to defeat the measure, because it was said the railways could not stand the cut in fare.
The last rail of the Milwaukee extension from Chamberlain to Rapid City was laid July 18, 1907. During the week before the last line on the Northwestern system between Pierre and Rapid City was completed, thus two great systems of railways connected the eastern and western portions of the state at almsot exactly the same time. The Milwaukee system immediately began ballasting this line preparatory for the running of regular trains. In August such trains began speeding westward from Chamberlain to the Hills. The two systems thus constructed across the great Sioux Reservation may be counted as one of the most important events in the history of the state. The delay had retarded the growth of the western half almost a quarter of a century, but now it remained for the state itself to complete the great movement through which and by which settlers could be induced to obtain permanent homes on the great cattle ranges west of the Missouri River. Already at this time the Northwestern was operat- ing its line from Rapid City to Belle Fourche.
On October 14th the big steel bridge over the Missouri at Pierre was com- pleted. While these extensions were going on, the Milwaukee Company was at work in the northern part of the state and had its large steel bridge at Mobridge well advanced toward completion. The Minneapolis & St. Louis reached the Missouri River at LeBeau about this time on its way northwestward to Leola. The South Dakota Central was busily engaged on its extension from Rutland to Watertown.
By June 30, 1907, the railways of the state were more prosperous than ever before, which fact was due mainly to the almost unprecedented prosperity of
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the farming community. The marketing of the bountiful crops, the carrying of live stock and the increased passenger travel, greatly augmented the reventtes of the railways. Grain buying was greatly stimulated by the immense crops harvested, and elevator and warehouse sites were demanded at various points along the lines. There were a number of complaints on the ground of over- charges, but as a whole the business of the railways and of the farmers was satisfactory to both. The railways returned the complaint of the farmers over shortage of cars by declaring that shippers did not fulfill their duty in handling the cars with dispatch. Often they were left standing on the side-tracks a week or two weeks at a time before being loaded and sent to market. In 1907 the total mileage owned by the railway companies in South Dakota aggregated 3,636.67. This was an increase over the previous year of 431.79 miles. The total freight earnings for South Dakota railroads within the state were $5,659,813.II and the total earnings from all other sources were $68,703.26. This did not include the Chicago, Burlington & Quincy line.
At a meeting of the railroad commissioners November 22, 1906, a resolution to rearrange the distance tariff schedule then in effect in the state was passed. It was believed at the time that a reduction in the maximum charges of freight rates in the state was desirable and could then be reasonably required. Accord- ingly a meeting between the railway company authorities and the commission was held at Sioux Falls in December. A number of shippers and jobbers were present who addressed the commission on the subject of rates from their stand- point. They pointed out the inequalities and unreasonableness of the rates in several respects, and the railway companies presented their side of the contro- versy. All wanted additional time to prepare statistics to be submitted to the commission. An adjournment was taken until late in December, when the discussion was resumed. Another adjournment was necessary, whereupon all assembled again at Aberdeen in January, 1907. The Aberdeen shippers offered somewhat serious complaints and were heard at great length by the commission. Still another adjournment was made for further investigation, and on January 25th all assembled at Sioux Falls and another adjournment was made to Feb- ruary 15th. By this time it was learned that much investigation was still to be done. Accordingly further adjournments were had and special meetings were held at Lead and Deadwood and other places throughout the state. Shippers particularly along the lines of the railways desired time in which to collect data showing the inequalities and injustice of freight rates. Meetings were held also at Belle Fourche and other cities and towns of the Black Hills. The com- mission finally, at the meeting held in Sioux Falls on February 15th, passed a resolution that the railroads doing business in the state be arranged for purposes of freight transportation into classes A and B. In class A were the Chicago, Milwaukee & St. Paul east of the Missouri River; Chicago, Rock Island & Pacific; Chicago & Northwestern east of the Missouri River ; Dubuque & Sioux City ; Illinois Central; Chicago, St. Paul, Minneapolis & Omaha; Great North- ern; Duluth, Watertown & Pacific; Wilmar & Sioux Falls; class B embraced the following roads : Minneapolis, St. Paul & Sault Ste. Marie; Minneapolis & St. Louis ; Minnesota, Dakota & Pacific and the South Dakota Central. It was ordered that the classification of freight adopted and specified in the documents should apply to all the above railroads regardless of classification, and that the
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schedule of maximum freight rates then adopted and specified in the documents for the transportation of freight within this state should apply to all of class A railroads. It was further ordered that the maximum rates for the transportation of freights to all class B railroads be fixed at the rate of 10 per cent higher than the rates fixed for class A railroads; that the maximum rates for the transporta- tion of freight within the state should be as set forth in the schedule; that the western classification with amendments as then in use be adopted as South Dakota classification; that the schedule of reasonable maximum rates of charges for transportation of freight and cars be adopted by the railroad commissioners of South Dakota; and that all the railroads herein classified be directed to adjust all existing rates to the schedule of maximum rates and state classification of freights for the transportation of freight within the state. At this time the commissioners published a complete schedule of rates in accordance with the above orders.
In 1907, the Milwaukee Company completed its line through the White River Valley from Chamberlain to Rapid City, a distance of 219 miles, and established more than sixteen stations. The same company pushed its extension westward and established train service from Mobridge to Bowman in North Dakota, a distance of 162 miles. About fifteen new stations were established on this new line. About ninety-eight miles of this line was in South Dakota. The same company put in operation during the year the line known as the Madison Cut Off, extending from Madison to Renner, a distance of forty-two miles. Six new extensions were built on this line. Hundreds of thousands of dollars' worth of improvements in the way of stations, side tracks, depots, plat- forms, stock yards and sheds, stock scales, section houses, etc., were constructed by this road. Nearly all the lines made important improvements. Warehouse licenses to the number of 1,049 were issued during the year ending June 30, 1907. This was an increase of twenty-one over the previous year and an increase of 178 over the year 1905. D. C. Ricker was warehouse and scale inspector. He was succeeded by Olaf Paulson.
The Legislature of 1907 enacted the following railway legislation: (1) mak- ing orders of the railway commission presumptively legal and placing the burden of proof upon the opposite party; (2) general anti-pass law prohibiting the giving of free transportation or service on railroads, telegraph, telephone, express or sleeping cars ; (3) general reciprocal demurrage law, relating to the charge for demurrage on cars both by shippers and railroad companies; (4) joint resolution proposing and agreeing to an amendment to the state constitu- tion to change the system of taxation of corporate property to allow the appli- cation of the gross earnings system to the taxation of railroads; (5) requiring railway companies to put in connecting tracks at junction points and authorizing the railroad commission to make joint through rates for such connecting roads ; (6) placing the local department of the railroad commission under the control of the attorney-general and the appointment of the warehouse and scale inspector in the hands of the governor; (7) authorizing and empowering the railroad com- mission to enter warehouses and examine the books of such concerns; (8) authorizing the railroad commission at its option to increase the salary of the secretary to $1,500 per annum; (9) limiting the time of continuous employment of railway employes to sixteen hours; (10) requiring railway companies to
University Buildings Law Building, University of South Dakota Old log schoolhouse
Monument commemorating the first perma- nent schoolhouse erected in South Dakota
SCENES AT VERMILLION
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pay double damages for live stock killed on their roads where cases were taken into court and judgment for the amount asked was secured; (II) empowering railroad commission to fix railway passenger rates not to exceed 21/2 cents per mile; (12) providing for double damages from loss of property by fire set by railway companies if they took their case into court and judgment for the amount asked was secured; (13) making it unlawful for a railway com- pany to abandon an established station unless by consent of the railroad com- mission; (14) authorizing the railroad commission to employ expert assistants and ascertain the true cash value of railroad property in the state for the pur- pose of fixing rates and as a basis for taxation; (15) prohibiting the paralleling of railway lines within eight miles without the consent of the railroad com- mission. Apparently the railroad commission was so well pleased with these numerous amendments to the railroad law that it deemed it advisable to make no recommendations or suggestions respecting any further legislation or changes in existing statutes concerning railroads, but deferred any such action until the next meeting of the Legislature.
For the fiscal year 1907-8 South Dakota enjoyed its greatest railroad con- struction era. Besides the extensions above named other small ones were com- menced or projected. An electric line was proposed and connected Brookings with Sioux Falls. The extension of the line west of Pierre made a great differ- ence in the accessibility of the capital to the people in the western part of the state. It reduced the distance between Pierre and the Black Hills from about one thousand miles to two hundred miles. In 1908 the Minneapolis & St. Louis began running passenger trains from Conde, running out every morning and back every evening.
The gross earnings railroad law was enacted in 1883 and was opposed in the older sections of the territory as being a uniform method of taxing such prop- erty. It was finally repealed in January, 1889, by unanimous vote of Terri- torial House and Council. Afterwards from time to time efforts to re-enact the old gross earnings law were made. In 1908 such a measure was favored by Crawford, then in Congress. In 1907 the Legislature passed the 21/2-cent rail- road rate law and in 1909 passed the 2-cent railway rate law. Notwithstanding the various acts of the Legislature the railroads managed to evade an adequate assessment during all previous years. In 1909 the state and the railways, both of which had previously prepared for the emergency, engaged in a mad contest to see which should bring the first action in the courts. The state authorities at once began action in the Supreme Court at Pierre. The railways began action from their standpoint in the Federal Court at Sioux Falls. It was said that within fifteen minutes after the bill had become a law, the railway lawyers at Sioux Falls had filed their papers in the Federal Court there. The object of the railways was to postpone the enforcement of the 21/2-cent rate law as long as possible and in the end they succeeded in their object. Other proceedings were temporary injunctions to prevent an enforcement of the law on numerous points, and the leading railways of the state, except the Great Northern, united with this movement. The railways tried to enjoin the enforcement of the law in the Federal Court at Sioux Falls, and Attorney-General Clark tried to circumvent this step by getting earlier action against the railways for the enforcement of the law in the Supreme Court at Pierre.
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In 1909 the Milwaukee was busy on two lines within the state, one from Mobridge to Pontis and on west of the river through the Cheyenne Reservation, and another southward across Moreau River along the valley to Virgin Creek and thence westward to the ceded lands in the northwestern part of the state. At this time the Northwestern was surveying and preparing to build the line from Blunt to Gettysburg.
In 1907 the famous passenger rate case was instituted and involved the 21/2-cent passenger rate, but this had not been settled by the time the Legis- lature of 1909 convened. At this session a law was passed reducing the rate to 2 cents per mile in South Dakota. This action of the Legislature caused the mandamus proceedings against the 2-cent rate. Judge Carland appointed John H. Gales, of Sioux Falls, as master in chancery and authorized him to take testimony. The 21/2 and the 2-cent cases were consolidated to save expense and because both covered the same ground. After this the case grew in magni- tude until the testimony covered 3,000 typewritten pages and embraced sixty- eight exhibits. In the meantime Judge Carland was succeeded on the federal bench by Judge Elliot. The master found that the 3-cent passenger rate in South Dakota would bring an income of 88/10 per cent on the valuation of the Northwestern company's line, and that a 21/2-cent rate would bring an income of 65/10 per cent. In the judgment of the master the latter was a reasonable income. The case was still pending in June, 1912.
In regard to the physical valuation of railroads the administrations of Gov- ernor Crawford and Governor Vessey were both criticised, because it was charged that from $100,000 to $117,000 was spent by the state to secure such valuation. This criticism was shown to be incorrect by the state board. There were but two appropriations made by the Legislature to aid this physical valuation. One of $10,000 was made in 1907, and the Legislature of 1909 appropriated $25,000 to complete the work. Of this total sum of $35,000 nearly $10,000 was returned by the board to the state treasury, leaving the actual expenses at a little over $25,000.
In 1897 the first comprehensive statute in South Dakota granting jurisdiction to the railroad commissioners to make schedules of freight and passenger rates was passed. This law, with some amendments, was still in effect in 1912. It went into effect July 1, 1897. Prior to that date the commissioners prepared schedules of rates to take effect when the law should go into operation. This schedule was held void by the railroads and the order of the commissioner announcing the same was enjoined upon the ground that the statute did not go into effect until July Ist, and the commissioners had assumed jurisdiction under the law and prepared a schedule before July Ist when they had no power under the law then in force to prepare such a document. After this statute had been enjoined the commissioners published notices in the papers as required by statute and met in regular session at Sioux Falls in August to take testimony in ref- erence to the fixing of a schedule of freight and passenger rates within this state. During this time all the railroads appeared before this commission and offered testimony to show that the purely intrastate or local business done by the railroads was not sufficient to afford the railroads enough earnings to pay dividends upon the stock and to meet the interest upon the funded debt over and above the operating expenses. On August 26th the commissioners reaffirmed the old
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schedule which had been prepared to take effect July Ist and made an order classifying railways and fixing the fare at 3 cents per passenger per mile. When this law went into effect the passenger rate was 4 cents east of the Missouri River for one-way tickets and 3 cents for return tickets; while west of the Missouri River the rate was a straight 5 cents per mile.
On August 27th the railroads filed in the Circuit Court of the United States bills of complaint to enjoin the enforcement of these rates, and a restraining order was issued and the time of hearing fixed upon application of the railroad company for a temporary injunction. In this case the state commission in the hearing on the application for the temporary injunction was represented by the attorney-general and by T. H. Null, C. S. Palmer and F. M. Brown. Upon the hearing temporary injunctions were issued suspending the rates which had been announced. To hear this case L. W. Crowfoot, of Aberdeen, was appointed special master in chancery. The only case tried was that of the Milwaukee Company, the other companies agreeing to abide the litigation of the case. The testimony, including the pleadings, filled one volume of 959 pages. Upon the first report made by the master in chancery, Judge Carland, found in favor of the state and against the railway company; whereupon the latter were enjoined from violating the provisions of the order and were required to put the rates into effect. Appeal was taken from this judgment to the Supreme Court of the United States, where the decision was reversed and remanded to be again heard in the lower court, with instructions to be referred to a master in chancery to make computations in accordance with the rules laid down in that opinion.
In 1900 the case again went to Judge Crowfoot and in May was again argued before the special master who in June reported to the court with computations fixing the value of the railroad company's property at $15,000,000 and showing that the rates promulgated by the railway commission if enforced would amount to a confiscation of the property of the railroad company. This report was heard by Judge John E. Carland of the United States Circuit Court, who in August, 1901, entered a similar decree perpetually restraining the attorney-general and the railroad commissioners from enforcing either the freight or passenger schedules and holding them unconstitutional and void. However, the decree provided that whenever the circumstances so changed that the rates adopted should be yielding to the companies a reasonable compensation for their services, the commissioners might apply to the court for a supplemental bill, and the ques- tion would then be reheard. The litigation in this case cost the state over twenty-five thousand dollars.
In October, 1901, the commission met with the various railway companies and agreed upon a schedule of maximum freight rates, which was issued by the railways as the first intrastate distance tariff applicable to freight traffic between stations in South Dakota. At the same conference the rates of passenger fares were reduced from 4 cents to 3 cents per mile east of the Missouri River, and from 5 cents to 4 cents per mile west of the Missouri River, in South Dakota. In September, 1906, the rate was made a plain 3 cents per mile over the entire state. In the meantime the railroad companies were making sworn statements that on purely intrastate or local business in South Dakota they were suffering a loss. From their reports it was shown that they were making money on inter- state business over which the commissioners had no jurisdiction, but were losing
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money on intrastate or local business where the commissioners did have juris- diction. For this reason the commissioners were not in position to go to court for the purpose of sustaining a reduction in rates. Owing to these facts the commission made no order to reduce freight rates from 1895 to 1907, except the orders which were made in 1897, the enforcement of which was enjoined as above narrated, by the United States Circuit Court. In December, 1906, new hearings were commenced and an investigation made into freight rates, and in February, 1907, the commission issued a new tariff schedule to be effective March 18, 1907, reducing the rate on freight of all kinds east of the Missouri River.
The next freight tariff was issued April 10, 1908, to take effect west of the Missouri River May 9, 1908. Rates on many things were made under this schedule. Emigrant movables westward bound were reduced 50 per cent. On carload lots the reduction was from 5 to 4 per cent, according to the distance and the different classes. No reduction had been made west of the river previous to the issuance of this tariff, because the railroads had promised that as soon as the line west of the river was graded they would put on a fair schedule ; but when in October, 1907, they had failed to do so the commission waited until the following spring, fixed new rates west of the river, but left the rates there higher than east of the river. This was done because there was not the same volume of traffic in the west as there was in the east, and because the traffic nearly all was west bound. In other words freight trains carried loads west but returned empty east. The next tariff adopted was on January 20, 1910, to go into effect February 15, 1910, and to apply on coal in carload lots. The rate reduced the rate on coal in carload lots from Rapid City to Pierre $1.60. The next tariff was issued to apply on wood for fuel in carload lots and went into effect March 1, 1910. It reduced the rate on wood and was used for the pur- pose of giving the people west of the river a chance to make use of the timber in the Black Hills for fuel purposes. The next tariff became effective May I, Igro, and applied to lumber in carload lots on all lines of railway except the Burlington.
In the fall of 1910 action was commenced before the railroad commissioners to secure the reduction in all rates west of the Missouri River on the same basis as the rates east of the river. In order to make the same basis of rates applicable to the whole state a separate tariff was also made at this time. It reduced rates on wheat, flour, corn, rye, oats, barley and mill stuffs in carload lots ; also lignite and bituminous coal so that the people in all parts of the state could obtain fuel at a less cost. Hearings by the board were held at Lemmon, Aberdeen, Huron, Rapid City, Deadwood and Pierre. As a result three tariffs were issued applicable to these products. This was termed unfair by the railroad companies which went into court in Minneapolis, and before Judge Charles A. Willard obtained a temporary restraining order, and at the hearing secured temporary injunctions against the rates pending the trial of the cases. Many important questions came up during the trial. Other states were involved in similar movements and all were awaiting the decision of the United States Supreme Court, to which several cases had been appealed. At this time the gross earnings or revenue basis cut a considerable figure in the decision of these cases. During the trial a thorough comparison of freight rates on all
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