Iowa state bystander. [volume] (Des Moines, Iowa) 1894-1916, 1909-05-07
VICTORY FOR ROADS.
SUPREME COURT DECISION olvGs
pic ADVANTAGE 70 THE
RAILWAYS.
NAY HOLD SUBSIDIARY STOCK
Although Highest Tribunal Declares
Hepburn Rate Law Valid. the Com
panies Win Important Points-Easy
to Dodge the Statute.

W0ShiDGtOn.-1ke 0eclSlON TeuucISu
by the supreme court of the United
States in the commodities clause"
cases affecting the railroads has at
tracted the greatest attention. That It
is one of the biggest surprises the
highest tribunal ever has sprung Is
manifested by the comments OF law
yers in all parts OF the country. By
the decision the railroads are the chief
winners, although the Hepburn law Is
declared constitutional.
These cases had been decided BY
the United States circuit court for the
eastern district of Pennsylvania ia
yorably to the railroads in that the
clause Of the Hepburn rate law,
which prohibits interstate railroads
from carrying commodities manufac-
tured, mined or produced directly or
indirectly by the roads. was declared
unconstitutional.
When it was found that the reversal
was based on technical grounds and
that the effect was really favorable
to the railroads, those who had been
anxiously awaiting the announcement
of the result found themselves much
puzzled.
The courts judgment was announced
by Justice White. Analysed, Justice
Whites decision is that congress did
not transcend its constitutional au-
thority in the enactment Of the COM
modities provision, but on the other
hand, it was held that the govern
ment's construction of the provision
had been entirely too comprehensive.
As construed by the court, the sole
object Of the clause is to prevent car
riers from being associated in inter
est with the commodities transported
at the time of transportation. hence
that the law only prohibits the trans
portation of articles when they have
been produced by railway company
which has not, IN good faith. parted
with them. when the company owns
or controls, in whole or in part, the
commodity to be transported, and
when the company has an interest d.
rect or indirect in the commodity in
a legal sense It was especially held,
however, that the prohibition does not
apply to the ownership Of stock in a
producing company. but that carrier
may own stock in such a company,
and at the same time transport the
product Of that company.
Summed up, the act only compels
companies to dissasociate themselves
from the products they carry, and the
contention of the government that the
law applies to the ownership Of stock
and prohibits the transportation Of
commodities simply because they have
been produced by the railroad COM
pany, regardless OF the fact that the
company has parted with them, is un.
tenable and incapable of enforce.
ment.
Unless the act is promptly amended
Sc IS to include stock ownership, the
railroads can escape the law entirely
by converting their direct ownership
of coal properties into stock owner
ship by the organization Of subsidiary
coal companies.
The effect of the decision under ex-
listing conditions is favorable to the
railroads, and the government lost on
practically all points except in the sus.
tentation of the principle involved.