United States v. Delaware & Hudson Co.

• Decision Date: 10 September 1908
• Docket Number: 202,208,212,,206,at Law.,204,214
• Citation: 164 F. 215
• Parties: UNITED STATES v. DELAWARE & H. CO. Nos. 85, 87, 89, 91, 95, and 97, in Equity.
• Court: U.S. District Court — Eastern District of Pennsylvania

164 F. 215

UNITED STATES v. DELAWARE & H. CO.

Nos. 85, 87, 89, 91, 95, and 97, in Equity.

Nos. 202, 204, 206, 208, 212,, 214, at Law.

United States Circuit Court, E.D. Pennsylvania.

September 10, 1908

Buffington Circuit Judge, dissenting.

Charles J. Bonaparte, Atty. Gen., and T. C. Spelling, and L. Allison Wilmer, Sp. Asst. Attys. Gen., for the United States.

James H. Torrey, James M. Beck, and Wm. S. Opdyke, for Delaware &amp H. Co.

George F. Brownell and Adelbert Moot, for Erie R. Co.

Jackson E. Reynolds and Robert W. de Forest, for Central R.R. of N.J.

John L Seager and W. S. Jenney, for Delaware, L. & W.R. Co.

Francis I. Gowen, George V. Massey, and John G. Johnson, for Pennsylvania R. Co.

Frank H. Platt and J. F. Schaperkotter, for Lehigh Valley R. Co.

Before DALLAS, GRAY, and BUFFINGTON, Circuit Judges.

GRAY Circuit Judge.

There have been filed in this court on behalf of the United States, by the Attorney General thereof, six bills in equity against the railroad corporations, defendants respectively, as named in the cases set forth in the caption-- the Delaware & Hudson Railroad Company and the Erie Railroad Company being corporations by and under the laws of the state of New York; the Central Railroad Company a corporation by and under the laws of the state of New Jersey; and the Delaware, Lackawanna & Western Railroad Company, the Pennsylvania Railroad Company and the Lehigh Valley Railroad Company, corporations by and under the laws of the state of Pennsylvania. There were also filed at the same time, on behalf of the United States, at the relation of the said Attorney General, under the authority of the act of Congress, entitled 'An act to regulate commerce,' approved February 4, 1887, and of acts amendatory thereof, petitions for mandamus against the said defendants respectively. Both the bills in equity and the petitions for mandamus are founded upon the same acts in alleged violation, or threatened violation, by the defendants respectively, of one of the provisions of section 1 of the said act to regulate commerce, approved February 4, 1887 (Act Feb. 4, 1887, c. 104, 24 Stat. 379 (U.S. Comp. St. 1901, p. 3154)), as amended June 29, 1906 (Act June 29, 1906, c. 3591, 34 Stat. 584 (U.S. Comp. St. Supp. 1907, p. 894)), the said provision being as follows:

'From and after May first, nineteen hundred and eight, it shall be unlawful for any railroad company to transport from any state, territory, or the District of Columbia, to any other state, territory, or the District of Columbia, or to any foreign country, any article or commodity, other than timber and the manufactured products thereof, 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 except such articles or commodities as may be necessary and intended for its use in the conduct of its business as a common carrier.'

These charges of violations of this so-called 'commodities clause' are, as we have said, the same in the bill in equity as in the petition for mandamus against each defendant. It is, in substance, charged in the bill and petition against each defendant, that it operates, and has been operating, long prior to the said 8th day of May, 1906, a railroad or railroads in and through the anthracite coal fields of the state of Pennsylvania, and into New Jersey, New York and other states, and, as a common carrier through all said period, has been engaged in interstate transportation of the article or commodity known as anthracite coal, from the mines and mining lands in the state of Pennsylvania to the said other states; that as to some of said defendants, the coal so transported has been in large measure owned, in whole or in part, by them, either through purchase, or as being the product of their own mines and coal lands. It is also charged in each of said bills and petitions, that the defendant has been engaged during the period aforesaid in the interstate transportation of coal, in which it had an interest, direct or indirect, by reason of its ownership of the stock of other companies owning or mining and producing the coal; and generally, that by continuing such interstate transportation of said coal, as aforesaid, each defendant has acted in violation of the said 'commodities clause,' by so transporting an article or commodity, other than timber and the manufactured products thereof, owned by said defendant in whole or in part, or in which it has or will have an interest, direct or indirect, or which has been mined or produced by it or under its authority, and which article or commodity is not necessary or intended, and will not be necessary and intended 'for its use in the conduct of its business as a common carrier.'

Each bill seeks to enjoin the defendant therein from further transporting in interstate commerce the anthracite coal, which it alleges it is the purpose of said defendant to transport, as thereinbefore stated, and each petition for mandamus prays for the issuance of an alternative writ, commanding and directing the defendant therein to forthwith and hereafter comply with the provisions of the law hereinbefore quoted, by forthwith and thereafter ceasing and refraining from transporting in interstate commerce, as therein alleged, the anthracite coal which, as is alleged, it is the purpose of the defendant to transport, or to appear and show cause, etc.

To these several bills and petitions, answers have been filed by the defendants therein, respectively. In these answers, it is admitted, generally, by the defendants, that the allegations in the bills and petitions as to their corporate existence, are true, and that they own or operate railroads engaged in the interstate transportation of coal from the anthracite region of Pennsylvania. They also admit that this transportation has been carried on by the several defendants long prior to the 8th day of May, 1906, and in the case of some of them, for a period varying from a quarter to more than half a century prior thereto. In addition to these general admissions, detailed statements are made by the defendants, respectively, of the character and extent of the ownership or other interest possessed by them in the coal so transported, or in the lands or mines from which it is produced. It is only necessary to briefly summarize these statements:

(1) The Delaware & Hudson Company alleges that it directly owns its coal lands as it does its railroad; that it was incorporated by an act of the Legislature of the state of New York, April 23, 1823 (Laws 1823, p. 305, c. 238), and was 'authorized to construct a canal or water navigation from the anthracite coal district in Pennsylvania to the Hudson river in New York; to purchase lands in Pennsylvania containing stone or anthracite coal; and to employ its capital in the business of transporting to market coal mined from such lands. ' That this authority was also expressly conferred by acts of the Legislature of the state of Pennsylvania, between the years 1823 and 1871, and that these acts of the state of Pennsylvania resulted from the desire and policy of said state to create and foster the industry of mining such coal and developing the transportation thereof; that under the authority of these statutes of Pennsylvania and of New York the said defendant, beginning as early as the year 1825, invested its capital in the purchase of a large quantity of coal lands in the state of Pennsylvania and in the construction of canal navigation in Pennsylvania from the Delaware river to the Hudson river; that later, under statutes of both states, it invested additional capital in the construction of railroads in the state of Pennsylvania, and in the construction and acquisition of railroads and leasehold estates in the state of New York, for the same general purpose of transporting coal from the coal lands owned by it; that it has invested large sums of money, not only in the acquisition of coal property, but in the erection of structures for mining and terminal facilities; that some of its coal properties were acquired under leases upon royalties payable to the lessors for each ton of coal mined, the leases fixing large minimum amounts by way of rent; that large fixed rentals are required to be paid, not only for those mining lands but for railroads acquired for the purpose of transporting coal; that there are three coal companies whose shares are practically all owned by it, viz., the Northern Coal & Iron Company, the Jackson Coal Company, and the Hudson Coal Company; that its mining lands thus owned and acquired are located upon or contiguous to the railroads of defendant; that said railroads are the only reasonable, practical, and conveniently available avenues of transportation whereby the coal by it produced can be transported in interstate commerce and the coal mined by the defendant and by said coal companies upon its lines of railroad amounts approximately to 70 per cent. of the entire transportation by it, or to about 4,300,000 gross tons, its daily shipments averaging about 12 trains of 37 coal cars each; that the coal lands so acquired by the defendant and by said three coal companies would have little, if any, value, except for the mining of coal therefrom and its sale as a commercial commodity, and that if it is deprived, by virtue of the said act of Congress, of the right to transport said coal, it will be deprived of the only possible enjoyment of its property. It further avers that it is not a 'railroad company' within the meaning of the act of Congress, but that it is a coal company, and that since the year 1870 it has become, incidentally to its business as a coal mining company, a common carrier by railroad of...