New-York tribune., 1920-11-11
E on Co.
Upheld i'm Coal
Hoardingg g Case
Justice Mayer Rules That
Lever Act Does Not Apply
to Public Utilities Cor
porations That Store Fuel
Duty To Be Foresighted
Firm Alleged 10 Have Sold
Product at Excessive Rate
Also Freed of CHARGES


public utilities corporation such as the
Brooklyn Edison Company is not pun
lshable under the provisions of the
Lever act.
Judge Julius NJ. Mayer decided this
Yesterday in She United States District
Court when he sustained the demur-
rers interposed by counsel for the
Brooklyn Edison Company and the
Adelphia Coal Company to indictments
returned charging boarding and prof.
teering in coal
Lynch Decision Reserved
Decision was reserved in the case
against the B. J. lynch Coal Company.
This has to do with the alleged misuse
CT priority permits gained through the
instance of the Brooklyn Edison Com
Iany. 1t is said that the B. J. Lynch
| Coal Company used this coal for it's
own profit after it had been obtained
Under false pretenscs.
Judge Mayer also reserved decision
IN the case against Walter Wells, vice
president Of the Brooklyn Edison Com
pany. Harry Wood, formerly in charge
If all the Brooklyn Edison Companv's
coal transactions, pleaded guilty re-
Gently. All three were named in the
Indictments
Judge Mayer said in his decision on
the Brooklyn Edison Company:
"Passing on the constitutional cues
tlOrlS ind
stand unless the defendant is one of
shose prohibited. under Section Of
the so-called Lever act, from doing
the acts there denounced.
The defendant is not wholesaler.
retailer or other dealer in coal, nor
is 1t manufacturer within the mean
ing of Section 6.
The defendant is public utilities
corporation engaged in the business
OF the manulacture, production and
sale Of electric Light and power. 1t is
matter Of common knowledce that
the business of such corporations is
subject to regulation by public serv-
zee commissioners or similar bodies.
"Such corporations are not in the
same situation as uncontrolled private
corporations or individuals. They owe
a duty to the community TO furnish
/ light and power adequately and with
OUT cessation so far as practicable.
to perform this duty they need coal.
and ,eNlgencies and contingencies
must be foreseen.
Il am Of the opinion that Congress
never intended that this discretion
should be controlled or interfered with
by this act, particularly in view Of the
many regulatory statutes, national and
state, which relate either to public
utility corporations or carriers inter
state or intrastate.
"Futher, the phrase public utility
loquially and technically. If Congress
had intended to apply Section to
public utility corporations it could
have so stated in simple language But
there is an even broader reason Man
Ltacturer' does not refer 10 corpora
tons like the defendant
The furnishing Of light and power
was vital to the welfare of the coun-
try during the war No one could fore
see what might happen or be needed.
Il was the duty Of the light and power
public utility corporation to be prudent
Sc far as possible, and to safeguard
eainst The shutting down or suspen-
sion Of service of light and power.
II am therefore OF the opinion that
Section does not apply to this de-
icldant. There are other reasons which
H~PyplI L tlS NlEN: II NdN the lnQlCtn1Put
,a2ls to set forth allegations sufficient
t charge crime bu. these it is an
'Ccessary to discuss"
In the Indictment the Brooklyn Edi-
son Company was charged with pur-
chasing coal in excess Of its needs and
at an unnecessarily high price. and by
SO doing gaining from the Public Serv-
ice Commission the right to charge
higher rates to consumers of its light
and power, the rates being based,
among other things, upon the price
paid by the public utility corporation
for its coal
Adelphia Case Decision
In making his ruling in favor of the
Adelphia Coal Company Judge Mayer
said:
This indictment, in effect, charges
the defendant with conspiring to the
end that the Brooklyn Edison Company
would purchase coal from the Adel lphia
Coal Company at excessive prices and
would pay bonuses and commissions.
The indictment fails to charge that
any Of the acts alleged in any way
affected or prevented an adequate sup
ply and distribution of coal.
"Section OF the Lever Act was de
signed TO safeguard against practices
or acts which would injuriously affect
the adequate supply and the equitable
distribution q of necessaries. Therefore
the acts alleged cannot be redressed
under this statute"