The
Tap Line Case, ante, p.
234 U. S. 1,
followed to the effect that:
The fact that the same ownership controls the freight offered
and the stock of a railroad company which is a common carrier does
not justify a different rate imposed upon the same kind of
traffic.
Under the Commodities Clause, it is not unlawful for a common
carrier to carry lumber owned by it, and until the law otherwise
provides, it may treat freight owned by it in the same manner as
like freight independently owned.
Page 234 U. S. 30
If the division of rates between a trunk line and a common
carrier controlled by the same interest as controls the bulk of the
freight moved by the carrier, is a mere cover for rebates and
discriminations, the Interstate Commerce Commission has power to
prevent such practices.
209 F. 260 affirmed.
The facts, which involve the status of a lumber tap line and the
powers of the Interstate Commerce Commission in regard to
establishment of joint rates thereover, are stated in the
opinion.
Page 234 U. S. 31
MR. JUSTICE DAY delivered the opinion of the Court.
The appellee, the Butler County Railroad Company, filed with the
Interstate Commerce Commission its petition asking for the
reestablishment of through routes and joint rates with certain
trunk lines, which was consolidated with and decided upon the same
record as the complaints before the Commission in the
Tap Line
Case involved in
Page 234 U. S. 32
the previous cases Nos. 829 to 836, just decided,
ante,
p.
234 U. S. 1. The
general statement of the Commission in its report and supplemental
report, filed April 23 and May 14, 1912 (23 I.C.C. 277, 549),
referred to in those cases, preceded the following findings of
fact:
The Butler County Railroad Company, the Brooklyn Cooperage
Company, which owns the railroad company, and the Great Western
Land Company, owning most of the timber reached by the railroad,
are all subsidiaries of the American Sugar Refining Company.
The tap line, which was acquired from the cooperage company,
consists of a section of track at Linstead, near Poplar Bluff,
Missouri, extending into the plant of the cooperage company, and
connecting it with the St. Louis, Iron Mountain & Southern
Railway and the St. Louis & San Francisco Railroad, which are
within three-quarters of a mile of the plant, and the principal
track extending about 7 miles from Lowell Junction, a station on
the Iron Mountain, 7 1/2 miles from Poplar Bluff, to Baileys, with
a branch about 3 miles from Rossville, an intermediate point, and
with trackage rights over unincorporated spurs from Baileys
belonging to the cooperage company, and over the Iron Mountain from
Lowell Junction to Poplar Bluff, paying for the latter 65� a train
mile for 25 cars. It has 2 locomotives, 2 passenger coaches, 3
cabooses, and about 100 freight and log cars.
The tap line hauls the logs, all of which are hardwood, from a
connection with the unincorporated track to Lowell Junction, then
over the Iron Mountain to Linstead, and thence to the mill over its
own track, where they are unloaded by the cooperage company. The
regular manufacturing rate under the Missouri distance tariff is
charged the cooperage company by the tap line, 1 to 1 1/2 � per 100
pounds, approximately $4 per car. The loaded cars are switched to
the Frisco or Iron Mountain, less than 1
Page 234 U. S. 33
mile, and the appellee receives from them an allowance of from 2
to 5� per 100 pounds. The rates from tap line points, including the
mill at Linstead, are in all cases 2� higher than the rates of the
trunk lines from Poplar Bluff, excepting to New Orleans and New
York, to which points most of the shipments of the cooperage
company go, and to which Poplar Bluff rates apply.
184,688 tons of forest products and 2,475 tons of other freight
were hauled during the year ending June 30, 1910; of the first
amount, 107,527 tons being furnished by the controlling interests,
77,161 tons by outsiders, but all the timber coming from the lands
of the Great Western Land Company, and of the miscellaneous
freight, 1,195 tons of inbound machinery and coal being for the
proprietary companies. Passenger revenues were $4,104.22. Three
mixed trains in each direction are operated daily between Linstead
and Melville, a point beyond Baileys on the unincorporated track,
two being used principally for passenger service.
The Great Western Land Company furnishes timber to several
independent industries on the tracks of the tap line near Linstead,
the tap line switching their product to the trunk lines. Their
factory sites are leased from the cooperage company, the purpose of
making such leases being to secure traffic upon which the tap line
might obtain divisions. A few independent producers on the main
track of the tap line team their supplies and ship their products
over the tap line. They pay the local rate of the tap line and the
trunk line rate, or a through rate that is 2 cents higher than the
Poplar Bluff rate.
The Commission found that the sugar company, having refineries
at New Orleans and New York, so adjusted the rates to such places
as to induce movements to them and restrict movements to other
points, and limited the amount the tap line might receive on
proprietary traffic
Page 234 U. S. 34
moved from the mill to the Iron Mountain and Frisco to a
switching charge fixed at $1.50 per car.
The order of the Commission, so far as it related to the
appellee, required the trunk lines named to reestablish and
maintain with it the through interstate routes and joint rates in
effect, in accordance with their respective tariffs filed with the
Commission on April 30, 1912, provided that the rates on
yellow-pine lumber and articles taking the same rates from points
on the line of the appellee should not exceed the current rates in
effect from the junction points, and
"Provided further, that the allowances or divisions out of such
joint rates to be paid by said principal defendants [the trunk
lines], respectively, to the said last-named parties to the record
[the appellee and others] on the products of the mills of the said
respective proprietary companies named in said report, shall not
exceed the divisions or allowances specified in the aforesaid
supplemental report of the Commission [in this instance, the
switching charge of $1.50 per car] which are hereby fixed as
maximum divisions or allowances thereon, until further order, the
Commission finding upon the record that any allowances or divisions
in excess thereof result in undue preferences and unjust
discriminations and are unlawful."
The appellee then brought suit in the United States Commerce
Court, seeking to enjoin and annul the order of the Commission
insofar as it forbade a division out of the joint rates of more
than $1.50 per car. The Commerce Court held, after stating that the
Commission had found this road to be a common carrier both of logs
and of lumber, and not a plant facility, but had denied it the
right to receive either a division or allowance for the log
traffic, and only an allowance for the lumber traffic of the
proprietary mill, while permitting it to receive a division out of
the joint rate for both log and lumber traffic of nonproprietary
companies, that the reasons stated in the other
Page 234 U. S. 35
opinion applied here, and that the distinctions made were
arbitrary, and the order beyond the power of the Commission, and
the Commerce Court decreed that that part of the order of the
Commerce Court above quoted, with reference to the divisions and
allowances to be made out of the joint rates, be vacated and set
aside as to the appellee. 209 F. 260.
The United States and the Interstate Commerce Commission, the
latter having intervened in the proceeding in the Commerce Court,
prosecuted this appeal.
This case was argued on the same day with the other tap line
cases, and much that is said in those cases is applicable here. The
Commission ordered the restoration of the schedule of tariffs of
April 30, 1912, thus recognizing the right of this road to
participate in joint tariffs with other common carriers and to
receive a division out of the joint rates. But the Commission
excepted from this right traffic offered to the appellee by its
proprietary company, evidently upon the theory enforced in the
other cases before the Commission that, as to such traffic, the
railroad company had not the rights of a common carrier, and as to
such traffic limited the compensation of the railroad company to a
switching charge of $1.50 per car.
We think the Commerce Court correctly held the fact that the
same ownership controlled the freight offered and the railroad
company would not justify the different rate imposed upon the same
kind of traffic. Under the commodities clause of the Act to
Regulate Commerce, as amended, 34 Stat. 584, c. 3591, the right of
a carrier, as we have said in the former opinion in these cases, to
carry this class of freight, although owned by it, is recognized as
lawful. This being so, such carrier, until the law otherwise
provides, has the right to treat such freight in the same manner as
it does like freight independently owned. Of course, if the
division of the rates
Page 234 U. S. 36
is a mere cover for rebates or discriminations, such practices
may be controlled by the Commission under the authority given to it
in the act to regulate commerce.
We find no error in the disposition the Commerce Court made of
this case, and its judgment is therefore
Affirmed.