The record-union., 1898-10-25
Declared Illegal by United States
Supreme Court.
1t Is In Violation Of the Antitrust Act
Passed by Congress.
No Difference Between This and
the Trans-Missouri Case, Which
Was Decided Year Ago
Against the Railroads.

WASHINGTON, Oct. 24-Tne united
States Supreme Court to-day decided
the Joint Traffic Association case in
favor of the United States, and against
the railroads.
The case was considered one of the
most important that has ever come to
the Supreme Court, not only to the
railroads, but the general public, and
because of the vast railroad properties
represented by the traffic association.
The association was formed on No
vember 10, 1895, by thirty-one rail-
ways, representing the great trunk
lines and their network of branches.
The purpose of the association, as
stated in the articles of agreement,
was to establish and maintain rea-
sonable and just rates, fares and >regu-
lations on State and interstate traffic"
similar association, on a smaller
scale, was formed among Southeastern
roads known as the Trans Missouri
Association.
These associations were soon at
tackled in the courts on the ground
that they were in violation Of the Sher-
man antitrust law, and also of the
interstate commerce service. The
trans-M Missouri first reached the United
States Supreme Court, where, in a
notable opinion, the court held that the
association was illegal, being in effect
a com bination in restraint of trade and
commerce. and therefore violative of
the antitrust law. This opinion was
by a divided bench, the division being
very close, viz: Chief Justice Fuller
and Justices Harlan, Brewer, Brown
and Peckham holding the traffic asso-
citation illegal, while Justices Field,
Gray, Shiras and White filed a dissent
ing opinion, upholding the association.
Soon after this decision Justice Field
gave place to Justice McKenna.
Although the Missouri case was con-
sidered somewhat of test, yet the
Joint Traffic Association prepared to
make stubborn contest in support of
its existence. The case against it was
begun on January Z. 1896, in the Unit
ed States Circuit Court for the South
ern District of New York, the United
States being complainant and the At
torney General directing its course.
The case went against the Government
in the lower courts, the Circuit Court
dsmissing the bill. and the Court of
Appeals affirming the dismissal.
United States Supreme Court An ex
ceptionally brilliant array of counsel
appeared for the association and sew
eral railroads, including ex-senator
Edmunds, James c. Carter and T. j.
Phelps. Solicitor General Richards
filed the brief for the Government.
The main contention of the Govern
ment was that the traffic agreement
is combination to prevent competi-
ton. thus constituting a contract In
restraint of trade and commerce. The
answer of the association maintained
the legality of the agreement, on the
ground that the vast needs of COM
merce require joint action, and that
such action insures uniform and just
rates, and prevents secret and unjust
determinations.
Justice Peckham announced the de-
cision. After pointing out the similarity
between the trans Missouri case and
the present one, the opinion says:
so far as the establishment of rates
and fares is concerned, we do not see
any substantial differences between
this agreement and the one set forth
in the trans Missouri case. In that
case the rates were esta blished by the
agreement, and any company violating
the schedule of rates as established
under this agreement was liable to a
penalty. A company could withdraw
from the association, giving thirty
days notice but while it continued a
member it was bound to charge the
rates fixed, under a penalty for not do
ing so. In this case the companies
are bound TO charge rates fixed upon
originally in the agreement, or subse-
ouently recommended by the Board of
Managers. and the failure to observe
the recommendations is deemed a vio-
lation of the agreement. The only al
tentative is the adoption of resolution
by the Board of Directors of another
company providing for a change of
rates so far as that company is con-
cerned. and the service of a copy there
of on the Board of Managers. 1t is this
provision which is referred 70 by coun-
sci as most material and important, and
one which constitutes a material and
important distinction between the two
agreements"
After holding that the propositions of
the two cases are not essentially differ
ent. the opinion proceeds:
THE natural and direct effect of the
two agreements is the same, viz: to
maintain rates at a higher level than
would otherwise prevail, and the differ
ences between them are not sufficient
~ important to call for different judg-
ments on the two cases on any such
grounds
The opinion then takes up the consti-
tutionality of the Antitrust Act, as az
fecting railroads. Justice Peckham says
that 1T is worthy of remark that the
question was never raised or limited at
upon the argument in the former case
The fact that not one of the many
astute and able counsel for the trans
portation companies in that case raised
an objection of such conclusive charac-
ter If well founded, is strong evidence
that the reasons showing the individu-
ality of the Act as construed do not
lie on the surface, and were not then
apparent TO those counsel.
Upon the constitutionality Of the Ac,
IT is now earnestly contended that con-
tracts in restraint of trade are not
necessarily prejudicial to the welfare
and security of society, and that Con-