Omaha daily bee., 1909-05-04
Law is Upheld, but Government Con,
strued it Too Broadly.
.oADs MAY NOT OWN FREIGHT
But They May Hold Stocks in Com
panies that Produce 1t.
CONGRESS WITHIN IT'S POWERS
Dcciaion Holds that IL Map 60 Fur,
thrr and Prohibit Carriers from
Owning tOcks In other
Corporations.

WASHINGTON May at has beer
many a day isnce a decision Of the su
preme court of the United States has beet
received with so much interest as was man
Tested today In the decision Of that couri
in what are known the commodities
clause" cases affecting the anthracite GOA
carrying railroads. These cases had beer
decided by the United States circuit cour
for the eastern district of Pennsylvania
favorably to the railroads IN that tn,
clause of the Hepburn rate law, which pro
hibits interstate railroads from carrying
commodities manufactured, mined or pro
duced directly or indirectly by the road,
was declared unconstitutional and the gen
eral impression had been that that decl
sion would be affirmed by the supreme
court When, therefore, there was a re
versal instead of an affirmation. the in
tercst was much manifested. When agaii
1t was found that the reversal was baset
on technical grounds and that the effec
was really favorable to the railroads, sen
timent took another turn and those wht
had anxiously awaited the announcement
of the result found tl'"eclves much puz
zled
white Announces DecIsiOn.
The courts judgment was announced b,
Justice White, who while he read from al
claborately printed opinion, declined tC
give out anything more than summary
showing the net result of the courts find
ing. There was also surprise over the fac
that there were no elaborate dissenting
opinions and. indeed, only one dissentin;
opinion of any kind Because OF the court,
| delay in announcing its conclusion 1t wai
/ ppnarallV hot tIo
be found to be much divided. The dissen
was announced by Justice Harlan, who
| In a few words, stated that he did no
follow the conclusion of the court on tn,
point that the law does not prohibit tn,
| railroad ownership of stock in commodftiel
producing companies.
Analysed Justice Whites decision il tiiai
congress did not transcend its constitutions
authority In the enactment OF the commod,
| tiles provision, but on the other hand II wal
| held that the governments construction o,
the provision had been entirely too compre,
! hensive. AS construed by the court the sol,
| object Of the clause is to prevent carrier,
| from being associated i'm interest with tn,
commodities transported a the time oi
! transportation, hence that the law only
prohibits the transportation of article;
when they have been produced by a rail-
/
parted with them, when the company own,
or controls, in whole or in part, the com
modify to be transported and when TIN,
company has an interest direct or indirect
| In the commodity I'm legal sense. II wal
| especially held, however, that the prohibit
! tion does not apply to the ownership o
stock in a producing company, but that
carrier may own stock in such a company
and at the same time transport the produces
of that company.
Question of Consultations.
Summed up the act only compels com,
panies to dissassociate themselves from the
products they carry, and the contention OF
the government that the law applies to tn,
ownership of stock and prohibits the trans,
portation of commodities simply because
| they have been produced by a railroad com.
pany, regardless OF the fact that the com,
pany has parted with them, is untenablS
| and incapable of enforcement. 1t thus ap'
pears, first, that the commodities clause ID
| a vital and operative statute with respect
| to all products such as coal, which th(
railroad companies actually own at the
time of transportation, and that the rail
| roads must sell such products 20 some.
body else before they can lawfully ship
them; and, second, that unless the act ID
promptly amended so as to include stock
ownership, the railroads can escape the Law
entirely by conveying their ownership of
coal properties into stock ownership by the
organization OF subsidiary coal companies
Government Upheld In Principle.
The effect of the decision under existing
conditions is favorable to the railroads and
the government lost on practically all
points except in the substantlation prin,
ciple involved, In holding that congress-
had not gone beyond its authority in en-,
acting the law the court comedies the right
to legislate. and it is believed that II sd
disposed congress might enlarge and ex'
tend the scope OF the provision. Hence,
while the railroads gain a practical vic.
tory the government is not confronted by
a constitutional bar from further acting in
the direction of control of the roads In the
matter OF the shipment of their own com
modities.
The cases made their first appearances
in the supreme court on October 10 last,
Trey were argued during the month OF
January and the decision has been anx-
iously awaited ever since the latter date.
The decision sustained the provision OF
the law exemptng timber from the opera
tions OF the clause. This exemption was
used as a basis of attack by the railroads
on the law as discriminatory. but Justice
White refused to accept hat view. As
enacted the law did not apply TO the trans
portation Of timber, and IL Is, Of course,
untouched by the decision.
Reverses Lower Court.
The announcement as-rto the commodi'
ties clause was made in deciding the
I twelve injunction and mandamus cases
brought by the government against the
Delaware & Hudson, the Erie, the New
b I
wanna, the Pennsy and the Lehigh
Valley railroads. The cases came 20 ths
court from the United states circuit court
for the eastern district OF Pennsylvania
whose decision as announced by judge
George Gray In 1903 attracted much Atten.
ton. They originated in the circuit court
| and In ITS petiIiou the RoVernmanf cha rsss