New-York tribune., 1909-12-28
GOVERN MENT WINS
IN TERMINAL SUIT.
District Court Gires Commits
sion 4uthorifg IN Test Case.
rrrom The Tribune Bureau. ]

Washington. Dec. 27.-The United States
Court for the Southern District OF Texas
has handed down decision OF far-eaching
importance 10 the government in its en-
foroement Of the Hepburn rate law. A copy
of this decision viii reach Washington to-
morrow. ami will be read eagerly by the
members OF the Interstate Commerce Com
mission. II is the first case in which the
right of the commission TO control the ter
ninsl facilities of interstate common car
riers IS clearly established.
II is understood that, as a result Of this
decision. the commission will now proceed
10 investigate alleged terminal discrimina
tions which. IL is said. extend TO New York
city. and an effort will be made to break
up the practice Of certain carriers which.
ty contracts made In the name Of subsld-
isry corporations have granted exclusive
terminal privileges to selected shippers and
thus imposed a hardship upon all others
In some instances the effect Of these dis
ordinations has been to give the favored
shipper 4 practical monopoly of export
trade.
HISTORY OF CASE
Tho case decided by the court in Texas
grew out II A complaint made by Carl
Eichenbers against the Southern Pacinc
company. II appears that the Southern Pa
cific Terminal Company. Texas corpora
tion. controls valuable docks and wharves
~ Galveston. About 9e per cent Of the
stock OF this corporation is owned by the
southern Pacific Railroad. In 1905 the ter
minaI company entered into a contract win
h. H Young. whereby it agreed TO lease 10
him for Sl5oOo for five years pier l'""
feet long, which the terminal company hao
erected al a cost Of $4,000 Young Is an
importer Of cottonseed cake and meal
Within the inclosure covered by his lease
he placed twenty hydraulic cake sackins
machines capable Of sacking 1.5cO tons of
cake day, and grinding machines capable
of sacking and grinding 200 tons Of meal
day A. times he employed as many as 200
men Young was exempt from demurrage
charges. being given all the time he need
ed to assemble his cargoes.
He had no wharfage charge Of any kind
10 pay. whereas other shippers are charged
a. the rate Of one cent p hundred pounds
He had other advantages amounting 10
from 20 10 55 cents d ton. From September
! 1905. 10 September !. 1895, Young export
go from Galveston about 10000 tons OF
cotronseed cake and about the same
amount Of cottonsaed meal All other eX-
porters in Galveston did not ship 10 ex-
ceed 5000 tons Of both products in the
same period.
MILL OWNERS UNITE.
Cotton mill owners throughout Texas
complained that their market for the sale
Of cottonseed products was dominated by
Young and that he depressed prices
abroad In 1907 about lGS mill owners in
Texas formed an association, but found
mat they were not in q position 10 COM
pete with Young He would not assign his
agreement with the Terminal Company eX-
cept upon the consideration of $4,000 bonus
and payment for all his improvements
Tns Terminal Company said il would not
be able TO construct additional docks and
piers in less than year and would require
lease under the same terms and condi-
lions as that given 10 Young. Mr.. Eichen-
berg brought these facts 70 the attention
~ the Interstate Commerce Commission
and asked for relief He testified that in
TWO years ne lost about $4,000 in attempt
ing 10 DO an expert cottonseed product
business in competition with Young
The Terminal Company insisted that the
commission was without Jurisdiction TO
grant the relief asked by Eichenberg. The
following four propositions were put for
ward ny the attorneys for the Terminal
Company:
with fee simple title 10 the property
teaSed 70 Young and with full power TO
make such a contract. and that the COM
MISSION was without power TO deprive il
Second-Thst it was not a common car
rier nor an appurtenance thereof and had
right TO lease or convey q portion OF
rs property which was not devoted TO any
Third-That its contract with Young
oid not constitute an unlawful undue
preference
Out authority. inasmuch as the commerce
handled by Young was intended wholly
for eXport-commerce which was wholly
inira5tafe ana domestic. and which moved
from a point within Texas TO d depot
of concentration and which thereafter,
without The Intervention of any common
carrier, moved directly 10 the ships hold
for export 10 Europe
CASE TO Pc APPEALED.
The commission held that as the rail-
road and steamship lines were in one con-
trol and that the Terminal Company
was organized 10 furnish terminal IA
ciIties for the Southern Pacific Rail
road a. Galveston il formed q necessary
link iD the chain of interstate commerce
and was subject 10 the Hepburn act.
The commission held that il was not
concluded b. the form. but looked 10 the
substance OF the relations between corpora
tions engaged in interstate commerce. II
made no difference, the commission said
whether or not the connecting railroad
company owned the Terminal Company if
the ownership Of both was vested in the
same corporation. The commission held
that the lease made with Young was de-
signed TO secure 20 the Terminal Company
and allied interests control Of the trans
poration Of The product Of a great in
dlsIry- The commissions decision Was
that Young was given an undue preference
and ar unlawful advantage over other
shippers
In sustaining the finding OF The com
mission The United States Court for the
Southern District q Texas was divided
= Judges Mccormick and Shelby supported
the commission ana Judge Pardee dis
sen.ed The case will now go 20 the
United States Supreme Court, for IL in
wolves d principle of the utmost impor-
Trcr r,r3r- 2 MES