The Manitowoc pilot. [volume] (Manitowoc, Wis.) 1859-1932, 1909-05-06
HEPBURN RAIL WAY
RATE LAW IS
CONSTITUTIONAL
SUPREME COURT REVERSES De
CISION OF CIRCUIT COURT
IN TEST CASE.
COAL ROADS BACK OF SUIT.
Carriers, to Engage in 0ther Business,
Are Allowed to Hold Stock only
in Separate Companies.
EASY EVASION OF ACT is SEEN


WASHINGTON, d. c., May 3.-That
the commodities clause" Of the inter
state commerce act of 1906, known as
the Hepburn railroad rate law, is con
stitutionaI was today in effect declared
by the supreme court of the United
/ States The decision was announced ny
Justice White. The court reversed and
remanded the decision of the United
| States circuit court, but the only dITec-
lions were to enforce and apply the
| statute as it Is now construed.
Briefly summarized, the decision OF the
! supreme court in the commodities clause
| cases holds the law TO be CONSTITUTIONAL
| but it does not concede the contentious
Of the government as to its scope. An
| especial exception was regarding the
ownership of stock i'll a different cor
poration, which, it was held, did not
/ constitute such ownership as would pro
. hibit Transportation under the terms OF
the law. 1t was also held that owner
ship of the commodities applied only 10
the time of transportation. II before
transporting it the railway company mas
in good faith parted with commodity 1t
may carry It.
The principal point Of the decision was
in relation to railways holding the stock
! Of subordinate companies, and on that
4 important point the finding was favor
4 able to the roads.
Justice Harlan dissented on the stock
feature, but otherwise the decision was
unanimous.
Twelve Cases Decided
The announcement as to the com
moditics clause was made IN decluIhS the
twelve Injunction and mandamus cases
brought by the government against the
Delaware & Hudson, the Erie, the New
Jersey Central the Delaware n Lack
awanna, the Pennsylvania and the lie
high Valley railways The eases came
to the court from the United States cir.
cult court for the eastern district OF
PENNSYLVANIA. whose decision as an
nounccd by Judge George Gray in 1908.
attracted much attention. They orig
ingtcd in the circuit court, and in ts
petition the government charged that the
railway companies in question were en-
gagged in transporting in interstate com
morcc anthracite coal mined by them.
selves in their own mines which are To-
Gated in Pennsylvania
The Hepburn act makes it unlawful
/ for any railway company to transport
/ from any state to any other state or to
( any foreign country any article or com
modify, other than timber, manufactured,
mined. or produced by it, or under its
Iuuthority or which it may own IN whole
or i'm part, or in which il may have any
/ interest, direct or Indirect, except such
articles or commodities as may be ncces-
sary and intended for its use in the con
durt Of its business rs a common car
ricr.
Decision of Lower Court
The circuit court decided against the
,uuStitutiouality of the provision because,
as il was alleged, il dcprives the cor
Z h..ir
process Of law which is prohibited by
The fifth amendment to the constitution.
II was also held by that court that the
clause mot indirectly but directly
works practical cuniiscatlnn Of the
property Of the railway; hence the law
was held to be invalid and lin It's nature
and effect dscrimnatiye prohibition
That verdict was reversed 10y today :
decision
Summary of Opinion.
The following is summary of the
opinion in the commodities cases:
/ one rhr cmim of the government lhat
th,, provision contained In the Hepburn act
approved June - 1906, commonly called the
+ commodities clause, prohibits a railway
/ r.tutauv from moving commodities iu inter
4 State commerce because the company has
manufactured, mined, or produced them, or
owned them Ia whole or in pnrt or has iAd
Iuu interest direct or Indirect Ia them, Nho.
is Irrespective uf the relation or connection
/ VI the carrier win the commodities ~ the
. time ~ transportation is decided to b" I'M
tcuuhIr IT IS also decided That he pro-
vision Of the commodities clause rrluiiu to
. interest direct or Indirect. does not embrace
au Interest which carrier may haN" ~ 20
producing corporation as The "osut of the
/ ownership Ly the cuJivr of stock In surh
J corporation irrespective of the amount OF
/ -ruck which the carrier may own ~ such
corporation, provided the corporation has
been organized In good iaiih
Railway Business Restricted
+ Two Rejecting III" construction placed
Iy the government upon the rOmlutAll Ties
I clause. it is decided that TINT clause when
+ all It's provisions ARE harmoniUuSIy con.
! stru,d has solely for its object To prevent
1 rgrri,rs engaged IN Interstate commerce
from being associated In Interest ut the
/ time Of transportation with the commodi
/ Ties Transported, and therefor" TIA" com
| muditirs claus" Ouly prohibits railway com
/ pauIrs engaged In Interstate CumW"rv"
! from transporting such commerce" COM.
modtlrs under the following circumstances
. and conditions.
4. When the commodity has been manu-
farlurpd. mined or produced by 20 railway
I company or under It's authority aud NJ the
. umr ~ transportation the railway con.
pauy has not iu good faith before the act
of trau-ponnti"n passed with it4 interest
! Bio such commodity.
T. When the railway company owns the
, commodity TO hr transported In whul" or
| g. When the railway company at the
tlm" Of transportation has an interest III
/ rect ur Indirect m legal Sense In the
commodity which last prohibition docs not
Apply 10 commodities manufacturer. mfurd
/ rtulrr"d. owned. etc.. by a corporate ion
! h,cauzr "a railway company II siorEholdrr
/ iu such corporation. such ownership NJ
stock VA producing company hy rail-
/ why company does not cause II aS the own.
err ~ me stock to have y legal interest m
the commodity manufactured, etc. by the
/ producing corporation