Interstate Commerce Commission v. Reichmann

• Decision Date: 27 February 1906
• Docket Number: 27,507.
• Citation: 145 F. 235
• Parties: INTERSTATE COMMERCE COMMISSION v. REICHMANN.
• Court: U.S. District Court — Northern District of Illinois

145 F. 235

INTERSTATE COMMERCE COMMISSION v. REICHMANN.

No. 27,507.

United States Circuit Court, N.D. Illinois.

February 27, 1906

C. B Morrison, for complainant.

Levy Mayer, for defendants.

LANDIS District Judge.

This controversy involved the power of the Interstate Commerce Commission. That body was in session at Chicago, endeavoring to ascertain how the managers or owners of cars not owned by carriers, but employed by them in the interstate transportation of freight, conducted their business. The respondent was on the stand as a witness, and having testified that he was vice president of Street's Western Stable Car Line, an Illinois corporation owning some 9,000 cars, in general use for the transportation of live stock over the lines of the various railroads on this continent was asked the following question: 'What part of the mileage, or from whatever source, have you given up to shippers during the last six months? ' On the advice of counsel, the witness refused to answer, on the ground, as alleged, that the Commission was without authority to exact from him the information called for, and the Commission petitioned the court for an order requiring the witness to answer. It appears that the Street Company's cars are not let to railway companies under regular lease, but that they pass indiscriminately over all lines participating in the live stock transportation business to such extent as may be dictated by the carrier's necessity or policy, in the discharge of its obligation to supply shippers with cars that the car company's only revenue for the use of its cars is six-tenths of a cent for each mile run, paid by the railway company on whose rails the mileage has been earned. The car company has no direct or open relations with the intending shipper. It does not undertake to supply him with cars. This is done by the carrier, and when the shipper is furnished cars belonging to the Street Company, he gets no other or better transportation service than when his cattle go forward in cars of the carrier railway company. Nominally at least, the car company's only relation respecting freight to be shipped is with the carrier, and its only interest in the transaction is that the freight may go forward in its cars; and this, because when the car stands idle it produces no revenue for its owner, and when it is in motion it is earning mileage. It will therefore be observed that the best business policy of the car company is that which produces a maximum of activity on the part of its cars.

In considering the question, I shall assume, as counsel did at the argument, that an answer by the witness would have disclosed that payments of money were made by the Street Company to shippers of freight, and with a view to thereby inducing such shippers to demand that carriers furnish them with Street's cars for the transportation of their future shipments. And I shall further assume, as the proof indicates, that these payments were made by the car company solely on its own initiative and responsibility-- disassociated, completely from any connivance on the part of the carrier railway company to which the shipper delivered the traffic, in the first instance, for transportation. For if such payment should come from the carrier to the shipper, the Street Company being used by the parties merely as an agency of payment, it would be a rebate, and therefore a plain violation of law. It was maintained for respondent that the witness should be excused from answering the question on the theory that existing statutes of the United States are operative on common carriers and not on private car companies, and (having particular reference to the so-called 'Elkins Act' of february 19, 1903, c. 708, 32 Stat. 847 (U.S. Comp. St. Supp. 1905, p. 599)), that Congress is without power to prohibit the payment of money by private car companies to shippers of freight; in other words, that the Commission is without authority to inquire into such a corporation's affairs. When the words 'commerce' and 'transportation' are used herein, they are to be understood as relating to interstate 'commerce' and 'transportation.'

The purpose of the enactment of the statutes relating to interstate commerce was to give to all shippers of property uniform treatment in the matter of transportation, and the Interstate Commerce Commission was created to secure the enforcement of those statutes. In the discharge of this duty the Commission is authorized to procure information from any person whatsoever tending to show whether those laws are being obeyed. The question then presented is would the payment, by the private car company, of a sum of money to a shipper who had previously paid the railway company the regular rate, place such shipper in a more favorable position respecting the question of transportation than that prescribed by the published tariff and occupied by shippers generally, and if so, has Congress prohibited a private car company from making such payment, and is such prohibition authorized by the federal Constitution. That the person to whom the payment is made had been, thereby, removed from the level of the payment is made has been, thereby, removed from the level of equality, to establish which the laws were passed, is too plain to justify extended consideration. With respect to the transportation of his property, he is just as much better off than the general run of shippers as the payment amounts to. The net cost of the transaction to him-- his freight expense-- has been reduced just that much. It, therefore, being apparent that in such a case the purpose of the legislation has been defeated, the inquiry is, 'has this defeat resulted from the violation of a valid statute of the United States.?' And first, of the power of Congress. The language of the commerce clause of the Constitution is' 'The Congress shall have power to regulate commerce with foreign nations, and among the several states, and with the Indian tribes. ' It will be observed that this grant is without qualification or restriction; that it is all the power over the subject that the people had; that, therefore, there now abides in Congress sovereign authority over interstate commerce; that is to say, all the authority over the subject that inheres in government. The real question, therefore, presented, is not merely whether Congress has authority to regulate private car companies, but, rather, 'is the power to require a uniform freight rate an attribute of sovereignty? ' I am not aware that the general principle that this authority does exist is now seriously antagonized. One result of the enactment of the original Interstate Commerce law, and of the controversy that has arisen under it, is the practically universal acquiescence in this proposition. But the application of the principle to the case at bar is disputed. Let us, therefore, have an understanding of what is meant by 'freight rate.' It cannot be denied that there is very respectable authority in support of the contention that a rate is the sum of money which the carrier receives from the shipper when he delivers his property for transportation. But is this the real--...