The Washington times., 1906-02-20
Effect of Ruling in C.
and O. Case Will Be
Far-Reaching.
STOPS FREIGHT TRADING
Roads Cannot Hereafter Sell
Commodities They
Haul.

The longer railroad lawyers look at
yesterdays decision of the Suprema
Court Of the United States in the IN
terstate Commerce Commission-Chesa
peake and Ohio-New Haven rate con-
troversy, the less they like It. Unless
some loophole may be found by the
railroad jurists IN the sweeping opinion
by Justice White, the law, as now laid
down BY the highest court in the land
as 10 the particular branch OF the rail-
read question covering trading IN COM
Tnodites transported. constitutes an ab-
solute prohibition against such trading.
The Supreme Court went further in
this decision than IL has seen 1T 10 go
in many a day.
Ruling by Implication.
Had the court confined its opinion to
the facts as presented in the Chesapeake
and Ohio case. the railroads would stiH
have been IN a comparatively safe po-
sition. But it went further and laid
down a broad rule OF policy, based on
no express provision OF the act OF ISg1.
but implied by the court as a neces-
ssTy adjunct to the enactment Of Con-
gTess 10 regulate interstate commercs.
This rule is that. regardless Of the Dos
sibility that a railroad may pay .tself
the published tariff on commodities in
which ii is both a carrier and q dealer.
such a transaction violates the spirit
OF the act.
The Chesapeake and Ohio, one of ths
subsidiary lines IN the Pennsylvania
system. contracted TO sell and deliver
70 the Kew York New Haven and Hart
ford road coo. 900 tons Of coal. during the
nye years from July /. 1887. TO July !,
livered. this amount being undelivered
because OF strikes
Rate Cutting Charged
The New Haven load. unable TO ge;
the last 5000 tons Of its order. bought
the coal in open market at a much
higher price. and presented g bill for
the difference to the Chesapeake and
Ohio. Instead OF paying this claim, the
Chesapeake and Ohio agreed 20 COM
pIete its contract as soon as the coal
could be had. More than half Of this
remaining 60,000 tons had been supplied
when the Interstate Commission appear
ed in court with a complaint that the
Chesapeake and Ohio was cutting its
own rate or coal in order 10 make such
a low price at New Haven.
The Supreme Court orders that the
case shall be remanded and an injunc-
tlOn shall issue as asked by the commits
! sion, restraining the Chesapeake and
its published rates
William A Day. counsel for the COM
mission. IN arguing the case. used Ian
guage that was practically adopted by
I Justice White in his decision
MF. Day said:
If railroad company having author
/ ity to buy and sell merchandise. or
usurping authority TO do So viii tba
acGuiesCeEce of the State which created
] il. may transport goods TO market over
/ its own line and sell them there for less
! than the cost OF the goods plus the cost.
I Of the transportation computed at the
| published rates. manifestIy it may Gs-
stroy every producer and shipper along
/ its line
Ends Coal Trading.
One result seems undoubted. Tbs
| coal roads engaged in interstate COM
merce. which have for years pursued
the policy Of buying great quantities OF
coal at the mines for sale at the points
! Of distribution. will have to make an
end TO this system.
As a single instance Of this. in the
anthracite field, may be noted the ar
| rangement existing between the Erie
railroad and the Delaware and Hudson.
| The Delaware and Hudson has no tide
water connections, and sells a vast
I En6
Erie. the latter road carrying it
| through to tidewater. Such sale and
purchase between the two roads was
freely admitted in the hearing before
the Interstate Commerce Commission,
the only alternative being for the Erie
| to confess q favored rate below the
published tariff to the Delaware and
Hudson on the IatteT's coal. This
whole contract could now be condemned
| as against public policy
~~-F~ -Hr-T -
| the anthracite region. while dozens Of
bituminous coal roads are the busiest
kind of traders I'm the great commodity
or which they pose as common carrier
Some Have Charter Rights.
Where the railroads own mines, oper-
ating them under charter rights, a diff
! ferent case is presented; but 1t is be-
Iisved that such roads, If engaged in
interstate commerce, may be required
To make other arrangements. for the
! reason that the Supreme Court of the
United States could easily hold that
state charter rights. both to mine and
trade in coal. are void, since they at
| tempt to grant to the carriers powers
in Interstate commerce which Congress
has impliedly prohibited in the inter
| state commerce act under the rule as
| laid down yesterday.
| The next few weeks will probably
see dozens of suits fled by the Inter
| state Commerce COmmi SSlon to reScfnd
| contracts, restrain railroads from viO-
| lating the law I'm this newly discovered
manner, and confine the carriers 10 the
business of carrying exclusively.
| Helps Two Resolutions.
The case is of special interest at this
| time because 1t involves the relations
of the Pennsylvania railroad system 10
/ the coal industry of the Pennsylvania
| and West Virginia fields. which IS the
subject Of Congressional attack just