The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1898-10-25
Power of Congress to Regulate Rail.
road Corporations by Restrictive
Legislation Upheld.
LOWER COURTS OVERRULED
ON THE SAME GROUNDS TAKEN IN
THE MISSOURI CASE.
Dissenting Opinion by Justices Grays
Shiras and White-TwO Other Cases
Decided Against Uncle sam.

WASHINGTON. Oct 24.-The United
States Supreme Court to-day decided the
Joint Traffic Association railroad case In
favor of the United States and against the
railroads. The case Is considered one OF the
most important that has ever come before
the Supreme Court, not only to the rail-
roads, but to the general public, and be-
| cause of the vast railway properties rep
resented by the traffic association. The as
sociation was formed on Nov 10, 1895, by
thirty-one railways. representing the great
trunk lines and their network of branches.
The purpose of the association, as stated
in the articles of agreement, was ito estah-
lish and maintain reasonable and Just rates.
fares, rules and regulations on state and
Interstate traffic." A similar association, on
a smaller scale, was established among
Southwestern roads, known as the Trans
missouri Association.
These associations were soon attacked in
the courts on the ground that they were
in violation of the Sherman antitrust law.
and also of the interstate-commerce law.
The transmissouri case first reached the
United States Supreme Court, where, in
notable opinion the court held that the as
sociation was illegal. being, in effect. a
combination in restraint of trade and COM
merce, and therefore violative of the anti
trust law. This opinion was by divided
bench, the division being very close-Chief
Justice Fuller and Justices Harlan.s Brewer,
Brown and Peckham holding the traffic
association Illegal, while Justices Field
Gray, Shiras and White filed a dissenting
opinion, upholding the association. Soon
after this decision Justice Field gave place
to Justice McKenna
Although the Missouri case was considered
somewhat of a test, yet the Joint Traffic
Association prepared to make a stubborn
contest in support of it's existence. The
case against it was begun on Jan 4 1896.
in the United States Circuit Court for the
Southern district of New York, the United
States being complainant and the attorney
general directing its course. The case went
against the government in the lower COURTS
the Circuit Court dismissing the bin and
the Court of Appeals affirming the dis
missal The government appealed to the
United States Supreme Court. An excep-
tionally brilliant array of counsel appeared
for the association and the several rail-
roads, including ex-senator Edmunds Jas
c. Carter and e. ]. Phelps. Solicitor General
Richards filed a brief for the government.
The main contention of the government was
that the traffic agreement is a combination
to prevent competition, thus constituting u
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 commerce require
joint action. and that such action insures
uniform and just rates and prevents q
secret and unjust discrimination
PECKHAM READS THE DECISION.
Justice Peckham announced the decision.
After pointing out the similarity between
the transmissouri case and the present
| one the opinion says: 80 far as the eS-
| tablishment of rates and fares is concerned.
| we do not see any substantial difference
between this agreement and the one set
| forth in the transmissouri case. In that
| case the rates were established by the
agreement, and any company violating the
schedule of rates established under the
agreement was liable to penalty. A COM
pany can withdraw from the association
| on giving thirty days notice, but while 1t
continued member it was bound to charge
| the rates fixed, under penalty for not do
! ing so. In this case the companies are
bound to charge the rates fixed upon orig
inally in the agreement subsequently
recommended by the board of managers,
and the failure to observe their recon-
mendations is deemed a violation OF the
agreement. The only alternative is the
directors of any company providing for a
change of rates so far as that company Is
concerned, and the service of a copy there-
of upon the board of managers. 1t Is this
provision which is referred to by counsel
as most material and important, and onr
which constitutes material and impor-
tant distinction between the two agree
ments."
After holding that the provisions OF the
two cases are not essentially different the
opinion proceeds: THE natural and direct
effect of the two agreements Is the same.
namely. TO maintain rates at higher level
than would otherwise prevail, and the diff
ferences between them are not sufficiently
important or material to call for different
judgments in the two cases on any such
ground"
The opinion then takes up the constitu-
tionality of the antitrust act. as affect
ing railroads. Justice Peckham says: 1T
is worthy OF remark that this question was
never raised or limited at upon the argu-
ment in the former case. The facs
that none OF the many astute and able
counsel for the transportation companies in
that case raised objection OF such con-
elusive character, If we'll founded. is strong
evidence that the reasons showing the in
validity of the act. as construed. do not lie
on the surface and We're not then apparent
10 those counsel Upon the con-
stitutionality OF the act il Is now earnest
ly contended that contracts in restraint OF
trade are not necessarily prejudicial to the
security or welfare OF society. and that
Congress Is without power to prohibit gem