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V. Hughes, 191 U. S. 477, 48 L. Ed. 268, 38. Charging unlawfid rates. — Meeker
24 S. Ct. 132. v. Lehigh \'alley R. Co., 162 Fed. 354.

36. "The said contract was not only



3651 INTERSTATE COMMERCE ACT. §§ 4045-4047

by the interstate commerce commission nor made the basis of a denial to the rail-
road of rights accorded to another road not so owned. ^^

§ 4046. Pooling Agreements. — See elsewhere.'*'^

§§ 4047-4048. Transportation of Goods Manufactured by Carrier —
§ 4047. In General. — The power of congress to regulate commerce can be
constitutionally so exerted as to compel a railroad company engaged in interstate
commerce to dissociate itself in interest from the commodities which it trans-
ports in interstate commerce, even though, by existing state laws, the railroad
company may have a lawful right of ownership or association with the com-
modity upon which the regulation operates.^ ^ Congress could properly enact, as
a regulation of commerce, so much of the Act of June 29, 1906, as forbids a
carrier from transporting articles or commodities in interstate commerce when
they have been manufactured, mined, or produced by the carrier, or under its
authority, and, at the time of transportation, such carrier has not, in good faith,
before the act of transportation, dissociated itself therefrom, or when the carrier
owns the article or commodity to be transported, in whole or in part, or when
the carrier, at the time of transportation, has an interest therein, direct or indi-
rect, in a legal or equitable sense although, by existing state legislation, such
carrier may have a lawful right of ownership of or association with the articles
or commodities upon which these provisions operate."*-

Due Process of Law. — Railway companies enjoying the right, under exist-
ing state legislation, of ownership of or association with the articles or commod-
ities carried, are not denied the due process of law guaranteed by the constitution
of the United States, by so much of the provisions of the Act of June 29, 1906,
as forbids a carrier from transporting articles or commodities in interstate com-
merce when they have been manufactured, mine(i, or produced by the carrier or
under its authority, and, at the time of transportation, such carrier has not in
good faith, before transporting them, dissociated itself therefrom, or when the
carrier owns the article or commodity, to be transported, in whole or in part, or
when the carrier, at the time of transportation, has an interest therein, direct or
indirect, in a legal or equitable sense. "*^

Effect of Partial Invalidity of Act. — The possible invalidity of the clause
of the act imposing penalties for violations of its provisions forbidding railway
carriers from transporting in interstate commerce commodities with which they
are associated, or in which they are interested, can not alTect the validity of these
provisions, since the penalty clause is wholly separable therefrom.^-*

Purpose and Object of Act. — The dissociation of railway companies prior
to transportation from the articles or commodities transported, whether such as-
sociation result from manufacture, mining, production, or ownership, or interest,
direct or indirect, is the common purpose of the provisions of the act, making it
unlawful for a railway carrier to transport in interstate commerce articles or
commodities "manufactured, mined or produced by it or under its authority, or
which it may own in whole or in j^art, or in which it may have any interest, di-

39. Ownership of lumber mill by rail- Co., 213 U. S. 366, 53 L. Ed. 835, 29 S.
road. — Louisiana, etc., R. Co. v. United Ct. 527, reversing United States v. Dela-
Statcs, 209 ]'"cd. 244. ware, etc., Co., 164 Fed. 215.

40. Pooling agreements. — See post, 43. Due process of law, — Attorney Gen-
"I'oolinK' FrLMKhts," § 4111. eral v. Delaware, etc., Co., 213 U. S. 366,

41. Transportation of goods manu- 53 L. Ed. 835, 29 S. Ct. 527, reversing
factured by carrier.— Attorney General v. United States v. Delaware, etc., Co., 164
Delaware, etc., Co., 213 U. S. 366, 53 L. Fed. 215.

Ivl. 835, 29 S. Ct. 527; United States v. 44. Effect of partial invalidity of act. —

Lehi^di Valley R. Co., 220 U. S. 257, 55 L. Attorney General v. Delaware, etc., Co.,

I'.d. 458, 31 S. Ct. 387. 213 U. S. 366, 53 L. Ed. 835, 29 S. Ct.

42. Attorney General v. Delaware, etc., 527.

4 Car— 35



§ 4047 CARRIERS. 3652

rect or indirect."'*^

What Is Railroad Company. — A company, chartered to secure coal lands
and mine coal, and to construct a canal and railroad for the purpose of trans-
porting the products of its mines, being also engaged as a carrier by rail in the
transportation of coal in the channels of interstate commerce, is a "railroad com-
pany" within the meaning of the Act of June 29, 1906, prohibiting such com-
panies from transporting in interstate commerce commodities with which they
are associated, or in which they are interested."**'

The statute deals with railroad companies as public carriers, and the
fact that they may also be engaged in a private business does not compel congress
to legislate concerning them as carriers so as not to interfere with them as miners
or merchants. If such carrier hauls for the public and also for its own private
purposes, there is an opportunity to discriminate in favor of itself against other
shippers in the rate charged, the facility furnished or the quality of the service
rendered.^'^

Production, Ownership and Interest. — Transportation when the thing to
be transported has been manufactured, mined, or produced by the carrier or
under its authority, and at the time of transportation the carrier has not, in
good faith, before the act of transportation, dissociated itself there-
from, or when the carrier owns the thing to be transported, in whole or in part,
or when the carrier, at the time of transportation, has an interest therein, direct
or indirect, in a legal or equitable sense, is all that is forbidden by the provisions
of the act making it unlawful for a railway carrier to transport in interstate com-
merce articles or commodities manufactured, mined, or produced by it or under
its authority, or which it may own in whole or in part, or in which it may have
any interest, direct or indirect."*^ Following the rule that where a statute is sus-
ceptible of two constructions, the court will adopt that construction which will
sustain the constitutionality of the act, rather than that which renders it uncon-
stitutional, it is held that the statute must be construed as prohibiting a railroad
company engaged in interstate commerce from transporting in such commerce
articles or commodities under the following circumstances and' conditions : ( 1 )
When the article or commodity has been manufactured, mined, or produced by
a carrier or under its authority, and, at the time of transportation, the carrier
has not, in good faith, before the act of transportation dissociated itself from such
article or commodity; (2) when the camier owns the article or commodity to be
transported, in whole or in part; (3) when the carrier, at the time of transporta-
tion, has an interest, direct or indirect, in legal or equitable sense, in the article
or commodity, not including, therefore, articles or commodities manufactured,
mined, produced, or owned, etc., by a bona fide corporation in which the railroad
company is a stockholder.^^

Interest as Stockholder. — The ownership by a railway carrier of stock in
a bona fide corporation manufacturing mining, producing, or owning the com-
modity carried is not the interest, direct or indirect, in such commodity, forbid-
den to the carrier by the act, but such words are to be taken as embracing only

45. Purpose and object of act. — Attor- Co. v. United States, 231 U. S. 363, 34

ney General v. Delaware, etc., Co., 213 S. Ct. 65.

U. S. 366, 53 L. Ed. 835, 29 S. Ct. 527, 46. What is railroad company.— Attor-

reversing United States v. Delaware, etc., ney General v. Delaware, etc., Co., 213

Co., 164 Fed. 215. U. S. 366, 53 L. Ed. 835, 29 S. Ct. 527.

"The commodities clause was not an ^^^ Delaware, etc., R. Co. v. United

unreasonable and arbitrary prohibition ^^ ^^^ ^ 5 3^3 3^ 5 ^^ g^

against a railroad company transporting ' . ' .

its own useful property, but a constitu- 48. Production, ownership and interest

tional exercise of a governmental power —Attorney General v. Delaware, etc., Co.,

intended to cure or prevent the evils that ^^'^ U. S. 366, 53 L. Ed. 835, 29 S. Ct.

might result if, in hauling goods in or ^^7.

out, the company occupied the dual and 49. Attorney General v. Delaware, etc.,

inconsistent position of public carrier Co., 213 U. S. 366, 53 L. Ed. 835, 29 S.

and private shipper." Delaware, etc., R. Ct. 527.



3653 INTERSTATE commerce; act. § 4047

a legal or equitable interest in the commodities to which they refer.^*^ While it
had been expressly held that stock ownership by a railroad company in a bona
fide corporation, irrespective of the extent of such ownership, did not preclude
a railroad company from transporting the commodities manufactured, mined, pro-
duced, or owned by such corporation,^'^ it has been held in a subsecjuent case that
nothing in that decision foreclosed the right of the government to question the
power of a railroad company to transport in interstate commerce a commodity
manufactured, mined, owned, or produced by a corporation in which the railroad
held stock, and where the power of the railroad company as a stockholder was.
used to obliterate all distinctions between the two corporations. That is to say^
where the power was exerted in such a manner as to so commingle the affairs of
both as by necessary effect to make such affairs practically indistinguishable, and
therefore to cause both corporations to be one for all purposes.-'*- In view, there-
fore, of the express prohibitions of the commodities clause, it must be held that
while the right of a railroad company as a stockholder to use its stock ownership
for the purpose of a bona fide separate administration of the affairs of a corpora-
tion in which it has a stock interest may not be denied, the use of such stock
ownership in substance for the purpose of destroying the entity of a producing,
etc., corporation, and of commingling its affairs in administration with the af-
fairs of the railroad company, so as to make the two corporations virtually one,
brings the railroad company so voluntarily acting as to such producing, etc., cor-
poration within the prohibitions of the commodities clause. In other words, that
by the operation and effect of the commodities clause there is a duty cast upon a
railroad company proposing to carry in interstate commerce the product of a
producing, etc., corporation in which it has a stock interest, not to abuse such
power so as virtually to do by indirection that which the commodities clause pro-
hibits — a duty which plainly would be violated by the unnecessary comminglings
of the affairs of the producing company with its own, so as to cause them to be
one and inseparable.^^

Where Railroad Has Controlling Interest in Corporation. — The exercise
by a railway carrier of its power as a stockholder in a corporation manufacturing,
mining, producing, or owning the commodity carried in such manner as to de-
prive the latter corporation of all independent existence, and to make it vir-
tually but an agency, or dependency, or department of the carrier, is forbidden
by the provisions of the act, making it unlawful for a railway carrier to transport
in interstate commerce articles or commodities manufactured, mined, or produced
by it or under its authority, or which it may own in whole or in part, or in which
it may have any interest direct or indirect.^'*

Mining and Shipping Coal to Separate Company. — The transportation
in interstate commerce by a railroad company of coal produced from its mines,
but sold at the breakers to a distinct bona fide coal company organized for the
purpose, and in which the railroad company owned no stock, is not within the
prohibition of the commodities clause of the Hepburn Act.^^ It is insufficient to

50. Interest as stockholder.— Attorney L. Ed. 458, ?>1 S. Ct. 387.

General v. Delaware, etc., Co., 213 U. S. 55. Mining and shipping coal to sepa-

306, 53 L. Ed. 835, 29 S. Ct. 527. rate company.— A contract between a

51. Attorney General v. Delaware, etc., railroad company owning coal mines and
Co., 213 U. S. 366, 53 L- Ed. 835, 29 S. Ct. a coal company, by which the latter
527. agreed to buy the coal produced l)y the

52. Stock ownership in sham corpora- former f. o. b. at the mines, and to pay
tion. — United States v. Lehigh Valley R. for certain grades a per cent of the gen-
Co., 220 U. S. 257, 55 L. Ed. 458, 31 S. cral average prices at tidewater points,
Ct. 387. • held not to leave in the railroad company

53. United States v. Lehigh Valley R. after such sales any interest in the coal
Co., 220 U. S. 257, 55 L. Ed. 458, 31 S. which rendered its transportation by such
Ct. 387. company unlawful under the commodities

54. Where railroad has controlling in- clause of the Hepl)urn Act. United
terest in corporation. — United States v. States v. Delaware, etc., R. Co., 213 Fed.
Lchigli Valley R. Co., 220 U. S. 257, 55 240.



§§ 4(347-4050 carriers. 3654

render such transportation unlawful that a comparatively small number of per-
sons own a controlling interest in both the railroad company and the coal com-
pany, and that some of the officers and directors of the two are the same, where
the business of each is separately conducted, and no discrimination is shown to
have been made by the railroad company in favor of the coal company as a ship-
per. ^^^

Both Inbound and Outbound Shipments. — The statute relates to all com-
modities, excei)t lumber, owned by the company and includes inbound as well as
outbound shipments.^"

§ 4048. Manufactured from Wood. — The exception in favor of timber
and manufactured products thereof, contained in the provisions of the act, for-
bidding railway carriers from transporting in interstate commerce articles or com-
modities with which they are associated, or in which they are interested, does not
render the statute invalid for discrimination. •''■'^

§ 4049. Limiting Liability. — A limitation of liability in a receipt for an
express package is invalid, as to an interstate shipment.^'*

Injury to Goods by Connecting Carrier. — A carrier may not by contract
limit the liabilities imposed on it by the Interstate Commerce Act, making the
initial carrier of an interstate shipment liable for any loss or injury thereto
caused by any connecting carrier, because of the rate charged for the transpor-
tation. <■" '

§§ 4050-4057. Connecting Carriers — § 4050. Discriminations. — It is

the duty of a connecting carrier to take the cars as they are delivered to it by the
initial carrier and in so doing it is not liable for a discrimination practiced by the
initial carrier merely because such connecting carrier has participated in the
adoption of a joint through rate, reasonable in itself, notwithstanding the provi-
sion contained in the Act of February 4, 1887, that a carrier which shall do,
cause to be done, or permit to be done, any act, matter or thing in this act pro-
hibited or declared to be unlawful shall be liable to the full amount of the dam-
ages sustained by one injured thereby.''^
Distinguished from Discriminations against Shippers. — There is a great

56. United States v. Delaware, etc., R. merely because such connecting carrier
Co., 213 Fed. 240. has participated in the adoption of a

57. Both inbound and outbound ship- Joint through rate for barrel shipments,
ments.— Delaware, etc., R. Co. v. United which is in itself, reasonable, ahhough,
States, 231 U. S. 363, 34 S. Ct. 65. W Act February 4, 1887, c 104 § 8, 24

_„ ,, r ^ J r A \i.4. Stat. 379 a carrier which shall do, cause

58. Manufactured from wood.-Attor- ^^ ^^ ^ ^^ .^ ^^ ^^ ^^^

n^ -ffSf'?. t' ?5 T^'^raq S>f%7 =^^t, matter, or thing in this act prohibited

U. S. 366, 53 L. Ed. 835, 29 S. Ct. 52/. ^^ declared to be unlawfu'l," shall be

59. Limiting liability.— Southern R. liable to the full amount of the damages
Co. V. Harrison, 119 Ala. 539, 24 So. 552, sustained by one injured thereby. Judg-
43 L. R. A. 385, 72 Am. St. Rep. 936; j„ent, Western New York, etc.. R. Co.
Mobile, etc., R. Co. v. Dismukes, 94 Ala. ^, Penn Refin. Co., 137 Fed. 343, 70 C.
131, 10 So. 289, 17 L. R. A. 113; Central, c. A. 23. affirmed in 208 U. S. 208, 52
etc., R. Co. V. Sims, 169 Ala. 295, 53 So. l. gd. 456, 28 S. Ct. 268.

826; Southern Pac. Co ^. Crenshaw, 5 ^^^^^ complainant, an interstate car-

Ga.App. 675 63 S. E 865; Silverman v. ^-^^^ maintained terminal facilities at N..

Weir (App. Term), 114 N. Y. S. 6. j^^^j,^g physical connection with the

60. Injury to goods by connecting car- tracks of other railroads, including the B.
rier.— Central, etc., R. Co. v. Sims, 169 & q Co., over whose lines the B., R.
Ala. 295, 53 So. 826. & p. Co. transported freight into N., the

61. Connecting carriers. — A connecting latter was entitled to have its cars trans-
carrier which takes the cars as they are ported to terminal destination by com-
delivered to it by the initial carrier is plainant on the same terms and under
not liable for a discrimination in favor the same conditions as prescribed for the
of shippers of oil in tank cars and traffic of other lines, under Interstate
against shippers of oil in barrels, which Commerce Act, § 3. Pennsylvania Co. v.
may be practiced by the initial carrier, United States, 214 Fed. 445.



3655 INTERSTATE COMMERCE ACT. §§ 4050-4051

difference between competing carriers claiming the right to use the facihties
of one another, and the patrons of the same carrier contending for ecjuahty of
treatment."' -

Recognizing Through Tickets. — The Iron Mountain Railroad from St. Louis
to Texarkana with its connections has a branch Hue to Memphis. The Little Rock
and ^lemphis Railroad runs from Little Rock, where it has a physical connection
with the Iron Mountain Railroad, to Memphis. At Memphis each road has ecjual
facilities for connections with, and transfers to, roads running into the states east
of the Mississippi River. The East Tennessee, Virginia and Georgia Railroad with
its leased line of the Memphis and Charleston Railroad, runs from Memphis to
the seaboard. Formerly, and before the building of the branch line of the Iron
Mountain Railroad to Little Rock, the Little Rock and Memphis Railroad had
traffic arrangements with the Iron Mountain Railroad and the East Tennessee,
A'irginia and Georgia Railroads for the through ticketing of passengers both ways.
Since the building of its branch line the Iron Mountain Railroad refused to recog-
nize through tickets over the Little Rock and Memphis Railroad to or from points
in the Iron Mountain system beyond Little Rock, and the East Tennessee, Virginia
and Georgia Railroad declined to keep such tickets on sale, or to offer its passen-
gers a choice of routes, because the Iron Mountain Railroad did not make such
tickets ; but it did issue on equal terms through tickets over either route to Little
Rock itself. As between the Iron Mountain and Little Rock & Memphis roads,
this was not a discrimination between connecting lines, prohibited by the Inter-
state Commerce Act, but only a legitimate off'er of the superior facilities of a
through line over a local line in competition for the through travel, and that the
ownership of a rival line authorized such preference of one's own road ; that,
as between the Little Rock & Memphis and the East Tennessee, \'irginia &
Georgia roads, there was not any unjust, undue, or unlawful discrimination,
because the facilities off'ered by the Iron Mountain, of a longer and through
track to points not reached by the other road, were superior to those offered by
the local and shorter road, and, until the Iron Mountain would make through
rates with it that would afford equal facilities in this respect, there could be no
through tickets sold usefully by the East Tennessee, Virginia & Georgia road,
and hence there was no unlawful discrimination in the transaction.^^

§§ 4051-4052. Facilities— § 4051. In General.— The Interstate Com-
merce Act provides that every common carrier shall, according to their respective
powers, aft'ord all reasonable, proper, and equal facilities for the interchange of
traffic, between their respective lines, and for the receiving, forwarding and de-
livery of property and passengers to and from their several lines, and those
connecting therewith, and shall not discriminate in their rates and charges be-
tween such connecting lines, but shall not be construed as requiring any common
carrier to give the use of its tracks or terminal facilities to another carrier en-
gaged in like business.*^^ In the absence of statutory provision, the interchange
of traffic between two connecting railroads is a matter for contract between them,
and the courts have no power to compel such interchange, or to fix the terms on
which it shall 1je made. Xor is such power conferred upon the courts by the
Interstate Commerce Act.""' A railway maintaining a live stock dejwt as a ]:)oint
of delivery for cattle having a municipality as their general destination can not
be compelled to receive live stock billed to a similar depot at subslanlialK' the same

62. Distinguished from discriminations Rock, etc., R. Co. v. East Tennessee, etc..
against shippers. Southern I'ac. Tcrnii- \i. Co.. 47 Fed. 771.

nal Co. V. Interstate Commerce Comm., 64. Facilities. — Act Fell. 4, 1888, St. at

219 U. S. 498, .5.5 L. Ed. .310, 31 S. Ct. Lar«e iss.VHT, p. 379.

279, distinguishing Wecms Steamboat 65. Central Stockyards Co. v. Louis-
Co. V. People's Steamhoat Co., 214 U. S. villc, etc., R. Co., 118 Fed. 113, 55 C. C.
345. 53 L. Ed. 1024, 29 S. Ct. COl, 1 .^ni. A. 63. 63 L. R. A. 213, affirmed in 24 S.
& Enp. Ann. Cas. 1222. Ct. 339, 192 U. S. 568, 48 L. Ed. 565.

63. Recognizing through tickets. -Little



§ 4051 CARRIERS. . 3656

point on another railway, and to deliver the same to that railway at a point of
physical connection between the two roads for ultimate delivery there, by virtue
of the provision of the Act of Feb. 4, 1887, making it unlawful for common car-
riers subject to the act to give unreasonable preferences and requiring them to
afford all reasonable, proper, and equal facilities for the interchange of traffic
between their respective lines, and for the receiving, forwarding, and delivery of
property to and from their several lines and those connecting therewith.*^^ 'p^g
provision in the charter of the Northern Pacific Railroad Company requiring the
company to permit other companies to form "running connections" with it, in-
cludes only such arrangements as to the arrival and departure of freight and
passenger trains, and as to stations, platforms, and other facilities, as will enable
companies desiring to make connections to do so without serious inconvenience,
and does not impose any obligation upon the company to carry freight in the
cars in which it is tendered by a connecting line when its own cars are not in use,
and the freight would not be injured by transfer to another car.^"

Wharfage Facilities. — Where a railroad company, owning a wharf extend-
ing into public navigable waters, maintained thereon a station and passenger
depot, and used the wharf for its own line of steamers, in connection with its
railroad traffic. A steamboat company, not a rival of the railroad company in its
railroad business, was entitled to the use of the wharf, for a reasonable compensa-
tion, to the extent of receiving and discharging passengers and freight.*^ ^ That
a wharf is too small to accommodate steamers, other than those of a railroad
company which owns it, is not a ground for denying to a steamboat company,
not a competitor except in its steamboat business, the right to use the wharf, for
a reasonable wdiarfage, for the purpose of receiving and discharging freight and
passengers, since a railroad, as a public carrier, must provide necessary facilities
for the transaction of its business with safety and reasonable convenience to its
passengers.*'^ But a transportation company operating a railway and a line of
steamboats connecting at the company's wharf is not required, by the third sec-
tion of the interstate commerce act, to pennit the boats of a competitor to land



Online LibraryThomas Johnson MichieA treatise on the law of carriers (Volume 4) → online text (page 104 of 214)