Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1909-05-03
Government WINS
COMMODITIES SUIT
UNITED STATES SUPREME COURT
GIVES FAVORABLE DECISION
ON HEPBURN LAW.
DECISION CAUSES SLUMP
IN RAILROAD STOCKS
Pacific Groups, Pennsylvania and New
York Central Sell of When News
Reaches Wall street-chmaracter Of
Decree Not Made Public by the
Courts Unanimous Decision.


Washington, May 3.-That the "com-
modities clause" of the interstate COM
merce act Of 1906, known as the Hep
burn railroad rate law. is constitutional
was today in effect declared by the su-
preme court Of the United States. The
decision was announced by Justice
White. The court reversed and re-
manded the decision of the United
States circuit court, but the only direc-
tions were to enforce and apply the
statute as it is now construed.
Briefly summarized, the dicision of
the supreme court in commodities
clause cases holds the law to be con-
stitutional, but does not concede the
contention of the government as to its
scope.
Especial exception was as, to own
ership OF stock in different corpora
tions, which it was held did not con-
stitute such ownership as would pro-
hibit transportation under the terms of
the law 1t was also held that the own
ership of commodity applied to the
time of transportation. If before trans
porting it the railroad company has in
good faith parted with the commodity.
it may carry 1t. The principal point
of the decision was in relation to hold
ing of stock Of subordinate companies.
and on that important point the find
ing is favorable to the roads. Justice
Harlan dissented on the stock feature,
but otherwise the decision was snan-
imous.
Coal Roads Are Affected.
No member of the interstate COM
merce commission, in advance Of the
reading Of the decision Of the court,
would express an opinion as to its ef-
feet. The concrete situation Is that
only two of the anthracite roads own,
operate and market their own coal. 1t
is regarded that under the decision of
the court the law applies to those
ware, Lackawanna & Western. The
effect Of the decision, it is believed.
will be to induce those lines to organ
ize separate coal companies and con-
duct their operations thru them, be-
cause the mere holding Of stock in
such coal companies is held by the
court to be not in violation Of law.
Decision Causes Surprise.
Philadelphia, May S.-The decision
cf the United States supreme court in
the commodities clause was surprise
to lawyers and others of this city inter-
ested in the case. 1t had been con-
fidently expected the court would af-
firm every point in the lower courts
decision, which was written by Judge
Gray and concurred in by Judge Dali
las. 1t is not yet clear what the Read
ing company's position is under the
decision.
Summary Of Opinion.
Following is summary of the opin-
ion in the commodities cases:
"First-The claim that tn govern
ment provision contained in the Hep
burn act, approved June 29, 1906, COM
monty called the commodities clause,
prohibits railway company from
moving commodities in interstate
commerce because the company manu-
featured, mined or produced them, or
owned them in whole or in part or had
an interest, direct or indirect, in them
wholly irrespective Of the relation or
connection of carrier with the COM
modities at the time Of transportation,
is decided to be untenable. 1t is also
decided that the provision of the COM
modities clause relating to the interest,
direct or indirect, does not embrace the
interest which the carrier may have
in the producing corporation as the re-
suit of ownership by the carrier in the
stock In such corporation, irrespective
Of the amount Of stock which the car
rier may own in such corporation, pro-
vided the corporation has been organ
lied in good faith.
,Second-Rejecting the constructioe,
placed by the government upon the
commodities clause, it is decided that
that clause, when all it's provisions are
harm oniously construed, has solely for
its object to prevent carriers engaged
in interstate commerce from being as
ISOLATED in interest at the time of
transportation with the commodities
modities clause only prohibits railroad
companies engaged In interstate COM
merce commodities, under the follow
merce from transportating such COM
merce commodities under the follow
ing circumstances and conditions:
When commodity has been man
ufactured, mined or produced by the
railway company or under it's author
ity, and at the time Of transportation,
the railway company has not in good
faith before the act Of transportation
passed with its interest in such COM
modify: when the railway company
owns the commodity to be. transported,
in whole or in part; when the railway
company at the time Of transportation
has an interest, direct or indirect, in a
legal sense. in commodity which the
last prohibition does not apply, to COM
modities manufactured, mined, pro-
duced. owned, etc, by a corporation
because the railway company Is a
stockholder in such corporation. Such
ownership Of stock in producing COM
pany by railway company does not
cause Il as owner Of the stock to have
q legal interest in the commodity man
ufactured, ETC.. by the producing cor-
poration. X +
Third-A thus construed the com.
modities clause Is q regulation OF COM