The Brookings register. [volume] (Brookings, Brookings County, S.D.) 1903-1971, 1906-03-01
A Blow at Monopoly

The decision of the United States
supreme court in the Chesapeake and
Ohio case furnishes the courts with
another powerful weapon for the des-
truction of freight rate discrimina-
tions by the railways. Incidentally it
broadens the scope OF the interstate
commerce law and provides an ave-
nue. of escape from the exactions of
the coal monopoly now under inves-
tigation by congress.
The case was one in which the
Chesapeake and Ohio had been deliv-
ering coal at a price lower than would
be warranted if the regular freight
rate had been added to the market
price of coal at the mine. In this
particular instance the immediate eff
feet Of the contract in question was
not wholly bad, for it meant that a
consumer got fuel at a bargain. But
the general effect was bad, for by
continuance Of that policy the road
could make it impossible for indie
pendent coal operators to do any BUSH
ness. The road owned the coal mines
and the means Of transporting the
coal to market. In order to get the
business away from independent mine
owners the road virtually carried the
coal for nothing. 1t is quite clear
that this procedure amounted to an
indirect departure from the published
rates for coal transportation by a COM
mon carrier. By reason of it's dual
ownership OF coal mine and transport
tation facilities the road was enabled
to make a profit on the whole transact
ton, while an independent mine opera
tor in the same locality could not pay
the published freight rate without sell
ing his coal at a loss.
The supreme court has upheld an
injunction restraining the Chesapeake
and Ohio from selling coal or contract
ing to sell coal for less than the mar
ket price, when such action would
amount to the giving of an indirect
rebate to the consumer. On the ques-
ton recently brought up in congress
as to the right of common carriers
to own coal mines when such owner
ship tended to establish a monopoly,
the supreme court has not passed.
Some of the railways are authorized
by their charters to mine coal as well
as to engage in the business of COM
mon carriers. The question was not
raised in the present suit. 1t is quite
probable that the supreme court would
uphold the rights of the railways to
mine coal so long as their handling Of
the commodity did not violate any
law. But the decision as it stands is
broad enough to cover the principal
evil arising from combined ownership
OF coal mines and railway lines. The
railroad, in its capacity as owner of a
coal mine, is forbidden to sell coal
lower than the market price and then
recoup itself in its capacity OF carrier
by making a prof. in carrying the
coal at published rates. Such action
is held to be a violation of the inter-
state commerce law. Neither the
Chesapeake nor any other railway can
hereafter gouge the independent mine
owner by resorting to the expedient
complained OF.
Not only does the decision strike a
serious blow at the coal monopolists,
but it is likely to have an important
effect upon the dual ownership of pack
ing houses and refrigerator car lines.
The interstate m commission
now holds that refrigerator car lines
are common carriers. Ii the courts
hold that the private car lines are not
common carriers they can easily be
placed there by legislation. With the
refrigerator a lines classed as COM