Word: fair
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Dates: during 1920-1929
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While maintaining that the recapture provision was not confiscatory, the Court declined, from the evidence presented, to pass on the adequacy of the valuation on which "fair earnings" were based...
...provision of the act in question was the so-called "recapture" clause. By this clause the Interstate Commerce Commission, after fixing freight rates and a fair rate of return on the assessed valuation of each road, may "recapture" one-half of the earnings of any road which exceed such a "fair return." The rate of a fair return has been fixed by the Commission at 5.75% per annum. The moneys received by the Government under this provision of the Act are placed in a fund from which loans are made and equipment leased to railways, the purpose being to bolster...
...case was brought by the Dayton-Goose Creek Railway Co., a small road operating in Texas. It reported to the Commission that in ten months of 1920 its profits were $21,666 more than the "fair rate" and that in twelve months of 1921 its profits were $33,766 in excess. The Commission asked the road to remit one-half of these amounts. The railway asked for an injunction to prevent this capture of part of its profits, on the grounds that the "recapture" clause was unconstitutional. The Federal Court for the Eastern District of Texas denied the petition...
...Recapture Clause enables the Government "to maintain uniform rates for all shippers and yet keep the net returns of railways, whether strong or weak, to the varying percentages which are fair for them...
...Confiscation. "Under the Transportation Act the carrier is only a trustee for the excess over a fair return. Though in its possession,, the excess never becomes its property, and it accepts custody of the product of all the rates with this understanding...