New-York tribune., 1909-05-04
THE COUuODITIES DECISION.

The decision of the Supreme Court affirming
the validity of the commodities clause OF the
Hepburn railroad rate law will apparently, not
greatly affect the interests of railroads hltherto
engaged both in mining coal and Transporting
it. The construction put upon the clause 10y
the Supreme Court will not prevent railroads
which operate coal properties from transferring
title to those properties to separate corporations
and retaining practical ownership through Ihe
stock acquired in exchange. The court holdS
that such ownership Of stock does not consu-
tute direct or an indirect intereSt-in legal
sense-in the commodity offered for transporta-
ton coal railroad under the courts inter
Dretation of the law, is forbidden TO carry coal
produced by it or under its authority the IN
terest in which it has not in good faith DIS
posed of before the act of transportation coal
owned by the railroad in whole or in part eX-
cept for its own uses and coal in when II mas
a direct or indirect interest in the strict legal
sense, that interest not existing when the coal
is mined by a corporation in which the railroad
is a StockhOlder.
The decision in its practical effect is an appli-
cation of the general principles laid down in
the Chesapeake & Ohio Railroad decision, the
opinion in that case having also been prepared
by Justice White The Supreme Court NAM
tains that a railroad as A common carrier must
give equal service to all shippers at equal rates.
1t should not be allowed TO discriminate IN us
own favor and when the Chesapeake X Ohio
Railroad undertook to lay down coal on the
seaboard at a price less than the railroad rate
10 tidewater plus the market price ton at the
mine the court held that the transaction was
Illegal because in its double relation as pro-
ducer and transporter the railroad was in Il
position to iuggle the figures, charging q fuh
freight rate for the transportation and less
than the market rate for the coal, when II
might really be selling the coal at full price
and carrying it below the established freight
tariff. The double relation of producer and
carrier was held to be an eQuivocal and dan
gerous one. since the railroad, in order to do
Justice TO all should be in a position to treat
all comerS on an equal basis. The separate coal
corporation, not being q common carrier, can
raise or lower It's price for coal as 1t pleaSeS
so long as it pays the same freight rate that is
paid by all other shippers. The vital practical
object of the law. according TO the Supreme
Court is to eliminate conditions which make
rebating and unlawful freight rate discrimina-
tons possible.
From theoretical and constitutional point
of view the decision is important in broadly
reaffirming the power of Congress to regulate
interstate commerce. The decision of the Cir
cult Court for the Sd Circuit was obviously
not in harmony with the ideas of the present
Supreme Court-ideas developed in a long
series of decisions. The lower courts decision
was handed down by two extreme antfederal-
ist judges-Messrs. Gray and Dallas-both
more or less in sympathy with ante-bellum
strict construction theories. Judge Gray held
that the commodities clause was not regula-
ton of interstate commerce but a prohibition
of it and therefore unconstitutional He
wanted to restrict the application of the power
of Congress to regulate interstate commerce
TO narrower limits. Judge Burlington, the Sd
Circuit Judge who is more In sympathy with
modern judicial thought, differed absolutely
with his two colleagues, saying without quail
fcation:
Satisfied that under the Constitution the
mower 10 regulate commerce between the states
is vested in Congress, that such power includes
the power to regulate carriers thereof and that
the divorce of the dual relation of public carrier
and private transportation is regulation OF
commerce, hold this law is constitutional
This view has been sustained by the Su-
preme Court as the Chesapeake Ohio de-
cision indicated that 1t would be- Some of the
constructions put upon the law by the govern
ment in arguing the case were repudated in
Justice Whites opinion, especially those dehn-
ing direct and indirects interest as covering
railroads holding of stock in a mining corpora
ton The law does not interfere with a rail-
roads holding stock in noncOmmon carrier
corporation and transporting its product If the
separation Of interests is a bona fde one and
the railroad charges the same freight rates on
the corporations coal the coal of other
producers AS the Attorney General, however,
points out Congress may extend the prOhibi-
ton to stock ownership and so If the coal roads
should attempt any evasion by means of sub
sidiary companies of the law intended to put ali
producers and shippers on equal terms 1t will
be possible to stop the discrimination.