The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1902-05-30
Charged With Forming Pool to
Control Rates
EVIDENCE IS VERY STRONG
Vice President Finley of the Southern
Railway Makes a Statement, In
Which He Explains Position
of the Various Companies.

Memphis, May 2s.-rhe first prosecution
of common carriers in the United States,
under section of the Interstate Com
merce act, as am ended, has begun here
with indictments against six railroads.
as follows: Illinois Central Railroad
Company. the Frisco (Kansas City. Mem
phis and Birmingham System, Southern
Railroad Company, Nashville, Chatta-
nooga and st. Louis Railroad Company.
The indictments were returned against
these railroads and their officials because
the government contends that the declar-
alton by each railroad is In fact a pool
among them to divide on pro rata
basis lhe cotton out of Memphis and to
maintain rates. This agreement was
known among the railroads as ''declara-
ton"
The government called 1t a pool and
the evidence of it is alleged to have been
so strong that the grand Jury returned
the indictments.
United States District Attorney Ran
dolph and j. 7. Marchand, special at
torney of the Interstate Commerce Com
mission. are conducting the suits for the
government.
Finley Makes Statement.
Vice President Finley of the Southern
Railroad today made the following state
ment:
1T have information that the railroad
companies entering Memphis and inter
ested in the transportation of cotton from
that point have been indicted by the
grand jury of the Federal Court at Mem
phis on the charge that the railroad com
panies entering that city have defined the
respective proportions OF cotton which
they are prepared to handle from and
passing through that city. Several years
ago 1t was alleged rebates were being Sc
cured and rates unlawfully reduced
| thro ough the routing of cotton via certain
intermediate ard connecting lines, and to
stop these illegal practices and in pursu-
ance of the policy of the lines In the
South to conduct trade with proper OBJ
servance of the laws of the country.
steps were taken by the lines entering
Memphis individually to control the rout-
ing with respect to intermediate lines:
Furthermore, and acting under advice of
counsel traffic officials of the various
lines, recognizing the exceptional condi-
tions under which the cotton crop is
moved and the dependence of interior cot
ton markets In the South on reasonable
regulation OF the cotton movement adopt
ed the principle of announcing each for
himself alone the proportion of cotton his
company wes prepared to handle. No
penalty was attached and no agreement
entered into.
both of these arrangements were in
volved in a suit subsequently brought at
Memphis, entitled Post vs.. Southern
Railroad Company and in that suit the
Supreme Court held the following:
Several Safe Routes.
Where goods are rendered for ship
ment to a point beyond the initial car
riers line, and there are several routes
equally safe, prompt. reliable and cheap,
such carriers cannot be compelled to ac-
cept the goods to be carried over one
route In preference to another. at the
shippers option. unless some reason ap-
pears therefor: especially where the use
of one route may be advantageous to the
carrier without injury or sacrifice to the
shipper.
An initial carrier cannot be compell-
ed to make a through shipment to a
point beyond its line over any particular
route. merely to enable the shippers or
consignee to get a rebate under secret
agreement with the line.
An initial carrier Is liable to the
shipper for loss from its selection of an
insolvent company, as is the connecting
line In a through shipment to point be-
yond its line.
:" In order to obtain relief in courts of
equity against the concerted action of
carriers there must be not only concert
of action, but its direct and immediate
effect must be to restrain commerce and
trade; and this Is not the case where the
roads simply made declarations that they
will not unlawfully or secretly reduce
their published rates on cotton from a
certain point and that to preserve the
integrity of such rates they will control
the routing of cotton and that they will
limit to a certain per cent their carry
ing of cotton and from passing through
such point, and where the rates were
not advanced in consequence of such de-
claration. but were maintained at reason
able figures, where competition had placed
them
81 am at a loss to account for such ac-
ton of the grand jury of the federal court
at Memphis and the cause inspiring such
action, in the light of the above decision"