Omaha daily bee., 1906-06-13
'ase Involves Right of Railroads to Make
Special Contracts,
COURT RULES THAT THEY ARE ILLEGAL
Life Of Agreement Cannot Extend Beyond
Posting Of New Rates.
SENTENCE DEFERRED BY JUDGE MCPHERSON
Punishment of Defendants Not 20 ne
Announced Until the BurIinE-
ton IL Tried for Civ
inE Rebate.

KANSAS CITY, June ;:.-Armour 4 Co.
Swift and Company, Cudahy & Co. and the
Nelson Morris Packing company were
found guilty in the United States district
court here this morning OF accepting con-
cessions from the Chicago. Burlington &
Quincy railway on export shipments on
packing house products.
The case was given to the jury at 1890
The verdict returned at 1l!40
The statutes under which convictions
were obtained provide for fines of not less
than 1900 nor more than $4,000. for each
count The indictments in the four cases
contain one count each. so that none of the
packing companies can be fined more than
$4,000
Judge Mcpherson will not announce the
fines to be imposed until some time next
week. Before this is done counsel for the
convicted corporations will prepare mo-
tions for new trials If these are refused,
appeals will be taken to the United States
circuit court of appeals.
The specific case considered, which is
practically identical with the others. Is that
charging Cudahy & Co. with accepting a
rate Of % cents per 100 pounds on a ship
ment Of lard to New York for export to
Germany when the legal tariff then on file
with the Interstate Commerce commission
was 35 cents.
Trial is Important.
The trial began last week and after
lengthy arguments was continued until this
morning, when Judge Smith Mcpherson of
Red Oak, Ia, the presiding Judge. in
structed the jury.
The present bears unusual import
ance in the list of rebate trials to come up
in this court, for 1t is the first time that
any concern has been brought 20 trial be-
l fore jury on charge affecting export
: rates applied to the interstate com
! merce act. Counsel for the defendants In
2 this trial contended that the court lacked
jurisdiction. which was overruled by Judge
! Mcpherson and then that when they signed
E a contract covering the 23-cent rate Il was
{ legal and that the burlington later raised
: its tariff to 90 cents. Judge McPherson's
Instructions to the jury covered the points
Y fully.
e Instructions by Court.
o Judge Mcpherson. in stating the case,
said that according TO the indictment re-
turned against the defendant the packing
company signed a contract to run until
December 81 1906, in which the Burlington
, railway agreed with other connecting rail-
ways to carry packing house products from
the Missouri river to Germany billed via
New York: that the rate agreed upon In
cluded rate OF % cents per 100 pounds
= between the Mississippi river and New
k York; that while this contract was in
- istence the Burlington railway filed with
o the Interstate Commerce commission an
= amended tariff OF IS cents on these products
t from the Mississippi river to New York.
!. and that the defendant continued to accept
|, the 23-cent rate after August s, 1906 when
e the alleged offense was committed.
Judge Mcpherson says:
e The constitution of the United States
e merce % between the States and With foreign reign
y nations And In the exercise or this power
n eongress did enact the two statutes ,o6o o.
the last being amendatory Of the former.
d And the court charges you that in carry
ing the products from Kansas City, Kan.
:, in and through this division and district
d TO the Atlantic seaboard ports, to there he
; ports, such commerce was with foreign ma
= tions and was such commerce I'm .n as is re-
10 ments of congress mentioned.
Position of Defer dant.
In this case the defendant packing COM
4 pany was both the shipper and the con-
Kansas CITY, Kan. TO. within, through and
e beyond this division and judicial district to
SG SaceS ASPoG Spon an OCEAN vessel to be carried
to a European port, both the detendant
packing company the B1rhaston IN company my
/ amenable to the two statutes In question.
II And IL the law has been violated f,,t, IN the
"A herein then this court has jurisdiction TO
l. hear and determine the case e2d render
:, such judgment as your verdict and justice
'e AND AND II II such shipment Of 'such packing
d house products we're made from kansas :
~ City. Kan, TO the European ports as =
- through shipment consigned by ne deJeno-
y ant packing company at kansas 1lity ran; an,
"A was so known by the defendant when "
- made the shipment. and II this faet was
company when Il received the product, and
n in turn each OF the eonnecting lines OF
al knew such fact when receiving such prod
a uct then II Is not controlling that iht re-
" ceipts contracts Writings OF biis o. ,1 sdu."R
n, | were through contracts or hills OF ladinH'
% Question ~ Issue.
\ Judge Mcpherson said that in the case
lg on trial there IL no question as 70 the
s. reasonableness OF the rates nor as To the
efaciencv OF the service. but the question
is. did the defendant packing company
8 receive unlawful concessions In making
said shipments. He reclted the fact that
- while their contract on the basis OF the g.
cent rate was in effect they were aware oi
the fact that the Burlington railway and
its connecting lines had fled 35-cent tarih
e. with the Interstate Commerce commission
IN The court declared that as a matter o'
o. law the question as to the validity OF the
m packers contract was not a practical ques-
X tion because and for the reason that the
Se defendant company had no right TO make 4
TO contract that would extend beyond the time
OF filing new schedules with the commits
o. sion AZ Washington, hNing the rate 10 th'
d. general public AZ a higher and different
e rate than that covered by the contract"
He continued:
he And when the mandatory rate east Of tks
q Mississippi river was filed With the com
=. mission August 8, and the defendant Knew
~ OF the same Il could not knowingly -
ceiYe a less rate OF concession than that
paid by the general pubic without hetne
guilty OF receiving an unlawful concession
provided that the same was thus received
- by any kind of device as hereinafter re
lt cited.
- Right 10 Contract MOdiaeG.
le This Is so because the right privlleg,
er and liberty OF contract usually exigtinl
Is between all persons aud corporations Il
D. modihed and controlled by that pr0Vlaiot
Of the e0nEutntton Whieh gives = q