Atlanta semi-weekly journal. (Atlanta, Ga.) 1898-1920, 1909-05-04
Famous Clause of Hepburn
Railroad Rate Law So Vi.
ciously Attacked Now De-
clared To Be Constitutional.
[. S. CIRCUIT COURT
PREVIOUSLY DECIDED
! AGAINST GOVERNMENT
First Decision, Which Was Rendered
by Justice Gray, Attracted Univer-
sal MISUNDERSTANDING of Decis-
ion Handed Down Monday.
By Ralph Smith

By Ralph Smith
/ WASHINGTON, D. G., May S.-Some Of
the biggest railroad systems in the coun-
/ the supreme court of the United States
reversed the decision of the lower courts
/ in connection with the commodities clause
| in the rate law. Under the decision Of
! the court today many of the big roads
. will have to divest themselves of their
: coal properties provided congress does
| not come to their relief.
/ In the brief time allowed for an analy-
/ sis of the decision, which was read bay
| Justice White, it appears that as constru-
| ed by the court, the rate law provides
! that a road may not haul in interstafe
/ traffic an article, such as coal, when il
| directly owns and controls the production
| of such article, a road, however, is not
barred from hauling such commodity
| merely because it owns the stock of the
concern producing the commodity. This
interest in the article does not constitute
! a legal interest in or title to the commod-
| ity on the part of the hauling railroad.
Body Blow TO Railroads
Under this Interpretation the Pennsyi-
I
| large number of coal companies, may
! haul the product of the companies. The
Reading company will not be greatly hurt
| as much of its interest in coal properties
/ is in the shape of stock ownership in SUBJ
/ sidiary companies.
/ The Delaware and Hudson, the Delaware
! and Lackawanna the Lehigh Valley the
, Norfolk and Western all stated in the EVIL
| dence that they owned and operated coal
mines directly. Under the courts decis-
1 ion they will have to get rid of these
| properties Some of them also have stock
interests in outside mining properties.
The decision today overturns in large
part the recent decision OF the circuit
| court of the Eastern district of Pennsyl-
| vania, which declared the commodities
clause to be unconstitutional.
The announcement as TO the commodi-
ties clause was made in deciding the
I twelve injunction and mandamus cases
brought by the government against the
Delaware and Hudson, the Erie, the New
Jersey Central, the Delaware and Lack
awanna, the Pennsylvania and the Lee
high Volley railroads.
/ The cases came to the court from the
United States circuit court for the east
ern district of Pennsylvania, whose de-
cision as announced by Judge George
Gray, in 1905 attracted much attention
/ in its petition the government charged
that the railroad companies In question
were engaged in transporting interstate
commerce in anthracite coal mined BY
| themselves in their own mines, which are
located in Pennsylvania.
What Act Provides
/ The Hepburn act makes it unlawful sfor
any railroad company TO transport from
any state to any other state or to any
| foreign country any article or Commodity.
other than timber, manufactured, mined.
or produced by it, or under its authority.
| on which IL may own in whole or in part
or in which it may have any interest. di
rect or indirect, except in such articles
/ or commodities as may be necessary and
intended for its use in the conduct of its
business as a common carrier"
| The circuit court decided against the
constitutionality of the provision because,
az IL was alleged, it deprives the corpora
| tons Of their liberty and of property in
a way that is prohibited by the ffteetnh
! amendment to the constitution.
| 1t was also held by that court that the
clause not indirectly but directly" works
| a practical confscation of the properfy
of the railroad; hence the law was held
TO be invalid, and lin its nature and eff
feet discriminative prohibition"
| That verdict was reversed by today.s
decision.
Summary of Opinion
! The following is summary OF the opin-
/ ion in the commodities cases:
! 1.-The claim of the government that
/ the provision contained in the Hepburn
! act approved June %, 1906, commonly cali
/ ed the commodities clause prohibits a
! railway company from moving comnodi-
| ties in interstate commerce because the
company has manufactured mined or
produced them, or owned them in whole
or in part or has had an interest direct
I or indirect in them, wholly irrespective of
; the time of transportation is decided to
| be untenable. 1t is also decided that the
| provision of the commodities clause re-
| lating to interest direct or Indirect does
not embrace an interest which a carrier
may have in producing corporation as
| the result of the ownership by the car
| Tier of stock in such corporation irres-
| pective of the amount of stock which the
| carrier may own in such corporation pro-
vided the corporation has been Organized
in good faith.
2-Rejecting the construction placed bv
the government upon the commodities
clause, 1t is decided that that clause when
all its provisions are tremendously con-
strued has solely for its object 20 prevent
carriers engaged in interstate commerce
from being associated in interest at the
time of transportation with the commod-
tiles transported, and therefore the COM
modities clause only prohibits railroad
companies engaged in interstate COM
nlerce frem transporting such commerce
commodities under the following circum-
stances and conditions:
Not In good Faith
a-When the commodity has been manu-
factjsred. mined or produced by railway
.,s,-,nsrsr or under its authority and at
he ,ime of transportation, the railway
company has not in good faith before the