The herald., 1898-10-25
JOINT TRAFFIC CASE
PUT IN LIST OF QUESTIONS
DECIDED
THE RIGHT TO POOL is DENIED
The Most Important Case Ever Taken
to the Supreme Court-The
Government Wins
THE RIGHT TO POOL is DENIEl
Associated Press Special Wire.

WASliINGlON, OcC. AL ne CHiteu
States Supreme Court today 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 TO the
general public and because OF the vast rail-
road properties represented by the 1rafflc
Association. The association was formed on
November 10, 1895, by thirty-one railways,
representing the great trunk lines ana their
network of branches. The purpose oi the
association, as stated in the articles OF agree
nent, was "to establish and maintain rea-
sonabe and Just rates, fares and regulations
on State and interstate traffic"
A similar association, on Il smaller scale,
was formed among southwestern roads,
known as the Transmissouri 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
transmissour agreement first reached the
United States Supreme Court, where, in a
notable opinion, the court held that the as
sociation was illegal, being in effect a COM
bination in restraint OF trade and COM
merce and therefore violative of the anti
trust law. This opinion was by a divided
bench, the division being very close, viz.
Chief Justice Fuller and Justices Harlan,
Hrewer Brown and Peckham holding the
Traffic Association illegal, while Justices
Field, Gray, Shiras and White filed dis
senting opinion, upholding the association.
Soon after this decision Justice Field gave
place to Justice Mckenna.
Although the Missouri case was consid-
cred somewhat of a test, yet the Joint Iraf-
tfc Association prepared to make stubborn
contest IN support of its existence. The case
against it was begun on January I, 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 bill and
the Court of Appeals affirming the dismissal.
States Supreme Court. An exceptionally
brilliant array Of counsel appeared for the
association and several railroads, including
ex-senator Edmunds, James &. Carter and
L. j. Phelps.
Soicitor-General Richards filed the brief
for the government. The main contention
of the government was that the traffic agree
ment is a combination to prevent competi-
tion, thus constituting a contract in re-
straint of trade or commerce. The answer
oi 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 secret and un-
just discrimination
PECKHAM'S OPINION
In the joint traffic opinion Justice Peck
ham gives history of the early stages of the
litigation and the main issue between the
government and the association.
After pointing out the similarity between
the transmissouri 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 agree
ment and the one set forth in the trans
missouri case. In that case the rates were
established by the agreement and any com
pany violating the schedule of rates as es
tablished under the agreement was liable
to penalty. A company could Withdraw
from the association by giving thirty DAYS
notice, but while it continued member il
was bound to charge the rates fixed, under a
penalty for not doing so. In this case the
companies are bound to charge rates fixed
quently recommended by the board of man
ayers, and the failure to observe their rec
concentrations is deemed a violation of the
agreement. The only alternative is the
adoption of a resolution by the board OF
directors of another company providing for
change of rates SO far as that company is
concerned and the service of a copy thereof
on the board of managers. It is this pro
vision which is referred to by counsel as
most material and apt and which consti
tutes material and important distinctio,
between the two agreements.
After holding that the propositions of the
two cases are not essentially different, 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 otherwis,
prevail, and the differences between then
are not sufficiently important to call fol
different judgments on the two cases on any
such grounds"
The opinion then takes up the constitu
tionality of the antitrust act as affectin.
railroads. Justice Peckham says that ii
is worthy of remark that the question wa
never raised or limited at upon the argumen
i'll the former case. The fact that
not one of the many astute and able coun
sci for the transportation companies in tina
case raised an objection of such conclusiv,
character, if well founded, is strong evi
dence that the reasons showing the invalid
ity of the act as construed do not lie on tn,
surface and were not then apparent to coun
sci. =. Upon the constitutionaity O
the act 1T is now earnestly contended tina
contracts in restraint of trade are not neces
sarily. prejudicial to the welfare and secur
power. to prohibit generally all contracts il
| restraint Of trade and that the efforts to d,
this invalidates the act in question"
| Justice Peckham comments on the fear
expressed by counsel for the railroad asso
citation. that the effect of these decisions
would be far-reaching, rendering illegal mos
! business contracts or combinations, such a
contracts to maintain wages, contracts of in
corporation for any line Of business or part
nership contracts.
This makes quite formidable list" tn,
opinion states, but it will be observed tha
no contracts of the nature described are nov
before the court"
The formation of corporations has nevel
been regarded, the opinion states, as in tn,
nature of contracts in restraint of trade
The same is true of partnerships. Proceed
ing. the opinion says:
| has not congress, with regard to inter
state commerce and in the course of regula
ting it in the case of railroad companies, thu
power to say that no contract or commission
shall be legal which shall restrain trade ant
commerce by shutting out the operation o
the general law of competition? We thnl
it has. The business of railroad
carrier is of public nature, and in perform
ing it the carrier is also performing, to ,
certain extent, function of government
which requires them to perform the servic,
upon equal terms to all. This public serv
ice, that Of transportation of passengers ant
freight, is part of trade and commerce anc
when transported between states such com
merce becomes what is described as inter
state and comes to a certain extent unde
the jurisdiction of congress by virtue of it
power to regulate commerce among the sev
eral states. When the grantees of this pub
lie franchise are competing railroad com
panies for interstate commerce we thinl
| congress is competent to forbid any agree