The Evening statesman. [volume] (Walla Walla, Wash.) 1903-1910, 1909-05-10
SUPREME COURT MAKES UNIQUE
RULING IN CASE AGAINST
THE RAILROADS.
May Hold Mines and Transport Goa
by Holding Stock in Subsidiary
Corporation.
Especial Washington Correspondent of
The StateSman)

The Statesman)
WASHINGTON. May 10.-"You may
own coal mines and transport Goa
/ from the same over your lines, but
| you must not own the coal mines un-
der your own name! Own them by
holding stock in a subsidiary corpora
| toni"
Thus. in effect, is the command OF
the United States supreme court to the
railroads owning coal mines, as made
in the commodities clause decision.
On it's face the decision sustains the
contention of the government, but in
fact it is substantial victory for the
railroads, many of which have appar-
emily been anticipating a similar deci-
sion as they have disposed of direct
ownership in mines and are now hold
ing and controlling them in a manner
declared by the highest tribunal to be
lawful.
Here is what the court rules:
That it will be unlawful for a rail-
road company to transport over its
lines those articles which it directly
produces or has legal interest or title
in.
But that a railroad will not be held
to have legal interest or title in an ar
ticle which is manufactured, mined,
produced, or owned" by another cor
poration in which the railroad is a
stakeholder
The latter proviSo in the opinion OF
the most brilliant legal authorities in
Washington, is the clause of the opin-
ion which does not prevent railroad
from doing anything complained of by
the government, but which merely
makes it necessary for the carrier to
hold and own mines through subst-
Diary corporation. 1t may then continue
to transport coal from mines so held.
This decision of course refers to in
terstate traffic. A railroad company
may own coal mines in its own name
and transport coal over its lines within
the state, but it would be unlawful I'M
der the supreme court decision to haul
coal 50 held outside of the state.
The decision makes it easily, possible
for the mine owning roads to reorgan-
iZe their holdings under new subsidiary
corporations. and continue without
substantial change in their business re-
lations
For the larger part-indeed. the most
part-the actual mining is done by
mining companies controlled by the
railroads This is not interferred with
by the decision.
The Lehigh Valley, the Reading, the
Lackawanna, the Henry H. Rodgers
Virginia railroad, the Erie and other
eastern roads own coal mines along
their lines through subsidiary corpor
ations principally. although some may
own lines in their own name, as well.
The Burlington, Northern Pacific,
Union Pacific, Denver and Rio Grande,
and other of the big western railroads
own coal properties through subsidiary
corporations, and the decision will
have little or no effect on these roads.
The decision is of vital interest to
avery railroad in the country. Seventy
five per cent of the coal mined and
brought to the surface in Pennsylva-
MIA, the great coal producing state, is
owned by railroads. directly or indi-
rectly within the state. Ninety per cent
of all the coal yet unmined in the state
is controlled by them. 1t is estimated
that railroads own an interest in more
than 90 per cent or the unmlned coal
supply of the country.
The decision upholds the clause of
the Hepburn act which makes it I'M
lawful for a railroad to haul between
states "any article or commodity,
other than timber and the manufac-
tured products thereof, manufactured,
mined or produced by it, or under its
authority, or which it may own in
whole or in part, or in which it may
have any interest direct or indirect"
The following paragraph of the de-
cfsion. which relates to the construc-
ton placed upon the words direct or
Indirect is the one which prevents
the government from attaining the
ends for which the legislation was
framed:
at is also decided that the provi
sion of the commodities clause relating
to interest, direct or Indirect does not
embrace an interest which a carrier
may have in a producing corporation
as a result of the ownership by the
carrier of stock in such corporation,
irrespective of the amount of stock