Evening star. [volume] (Washington, D.C.) 1854-1972, 1905-12-04
Judge Philips Makes an I'm
portant Ruling.
RAILWAY REBATE CASE
DECLARES THAT COURT HAS NO
JURISDICTION.
Extended Opinion Rendered at Kansas
City in Which Position of
Railways is Defined.

| KANSAS CITY, December A. Judge John
F. Phillips, In the United States district
court for the western district of Missouri
| today delivered an opinion holding that his
court was without jurisdiction in the cases
brought here by the federal government
charging the Missouri Pacific. the Atchison.
Topeka and Santa Fe and other railways
with giving rebates shipments of salt
| in Kansas and on coal in Colorado, and
other products, in violation of the Elkins
act.
The motion of the railways to quash the
proceedings was granted.
History Of Case.
On March 25. 1902 at the instigation of
the Attorney Generals Office at Washing
| ton. Judge Phillips granted temporary
| order restraining the Missouri Pacific, the
Santa Fe the Chicago and Alton, the Bur-
lington and the Rock Island railway COM
panies from giving alleged rebates on vari-
Gus products. Last summer M. d. Purdy,
| ditional proceedings. citing the officials of
| the railways named for contempt. on the
allegation that they had violated the courts
order in continuing to give rebates.
The contempt proceedings were argued In
Judge Phillips court on November Is. when
| the attorneys for the railways moved that
| the proceedings be quashed. claiming that
the court was without Jurisdiction. Judge
| Phillips today, in de,ivering his opinion,
which sustained the motion Of the railroads.
was very lengthy and went into detail in
covering the points involved.
Grounds of the Decision.
The grounds of the decision predicated in
| the opinion are substantially as follows:
| The original bill Of complaint which
| the restraining order was granted March
| %. 1902. was filed at the instance Of the
Attorney General OF the United States
4 ILL ytala Inns n hn
! terstate commerce law in granting rebates
on shipments Of grain and packing house
products from Kansas City to eastern
points.
United States circuit court IN equity to
| carry out the policy of the interstate COM
merce law and to enjoin railroads gener-
ally from violating It. But after the tenn
| norary restraining order was made, ana
| after the demurrer to the original bill was
| argued and submitted, the Supreme Court
| of the United States, In the case OF Mis-
| souri, Pacific Railway Company vs. United
! States, 1s0th United States reports. de-
| cided that the United States circuit court
| for the western district OF Missouri was
| without Jurisdiction to make 1t, therefore,
the defendant could notbe held to be In
| contempt Of the court for violating an or
| der which 1t was without JURISDICTION 10
| make.
| Elkins act, passed by Congress in Febru-
| airy, 1908 authorized such a proceeding by
| the United States district attorney OF the
| Jurisdiction where the offense was COM
| mitted, this act being passed nearly year
| after the restraining order of March %,
1902 had no retroactive operation so as
to validate that order.
| And while the original suit might. after
| the passa ge of the Elkins act have been
continued in force by an amendment there
| of or summary motion on the part of the
| United States Attorney, alleging that the
| to grant rebates of the character men
toned in the original bill. yet no
| such action was taken by the dis
| trict attorney and If it had been the
| been predicated of acts being done by the
| railroad company at the time of the amend
| ed proceedings under the Elkins act.
This suit was based upon the conception
of the Attorney General that the United
States had right to resort to the United
States circuit court in equity to carry out
the policy of the interstate commerce law
and to enjofn
But it would not have had a retroactive
effect so as to validate the original injunc-
ton order. And, furthermore, the ofense
charged in the information for contempt Is
the alleged granting of rebates by the de-
PENDANT railroad company on the commod-
ity of salt shipped from Hutchinson, Kans.,
year or more after the granting of the
temporary restraining order. and on a sub
| ject matter of commerce entirely different
from that covered by the restraining order
an offense committed in the jurisdiction
of the United States circuit court of Kan
sas and which should have been proceeded
in by the United States district attorney Of
that state instead of resorting to an infor-
nation in this Jurisdiction.
The court commented upon the fact that
the observation-disclosures Salt Company was
using a short line railroad connecting with
it's plant and also connecting with the de-
PENDANT railway company, the information
charging that the stockholders of said short
railroad were the same as the stockholders
of the observation-disclosures Salt Company;
and that the defendant railway company
bod rod int Int traff He orrn Qylf
with that road in the shipment of salt,
making an unreasonable division of the
joint rate with the short line road.
Not for Court to Decide.
The court in its opinion animadverts upon
bringing such a question before this court
for determination in a collateral contempt
proceeding, rather than proceeding in the
Jurisdiction where the short line railroad
company was INCORPORATED and where all
of its business was conducted. It Is for the
state authorities, 1t says, to determine
whether the state corporation Is violating
the law of its creation in charging excessive
rates: that Congress has never undertaken
to determine what Is the reasonable or
equitable division of joint rates between
two railroad companies.
The interstate commerce act only requires
that the joint rate, which Is a matter of
private contract between the Companies
when made. shall be filed with the inter-
state commerce commission at Washing
ton. and that it shall not be departed from;
that If the per cent of the rate charged Is
unduly apportioned to the local state road
the salt company used it for the purpose of
holding up" the Atchison, Topeka and
Santa Fe Railway Company by refusing to
do business with it unless it would submit
to the exorbitant exaction; that the great
est offender in such transactions is the ship |
per, and instead of going directly after the
shipper under the law the government seeks |
alone, by contempt proceeding, to punish |
the railroad company who has been held up
by the shipper; and that the government |
win never strike at the root of the rebate |
evil until 1t goes after the shipper as well |
as the railroads: that 1T is not fair play and |
"a square deal' that the railroads should |
first be "held up by the shipper and then |
punished by the government for being
held up" while the shipper gets the rake |
Off"
Suggestion to Railroads.
The court suggested in the opinion that |
the railroads could best assist In relieving
themselves from such an attitude by open
ing, rather than closing, the mouths OF