Nos. 829, 830, 831, 832, 833, 834, 835, 836.
Argued April 8, 9, 13, 1914. Decided May 25, 1914.
An order of the Interstate Commerce Commission, based on its finding that the service rendered by a connecting line is not a service of transportation by a common carrier railroad, but a plant service by a plant facility, to the effect that allowances and divisions of rates are unlawful and must be discontinued, is affirmative in its nature and subject to judicial review by the Commerce Court. Where the validity of an order of the Interstate Commerce Commission directing discontinuance of divisions of rates with another railroad depends upon whether the latter is a common carrier or a plant facility, the determination of that question upon undisputed facts is a conclusion of law which is subject to judicial review. Although a railroad may have originally been a mere plant facility, after it has been acquired by a common carrier duly organized under the law of the State and performing service as such and regulated and operated under competent authority, it is no longer a plant facility but a public institution, even though the owner of the industry of which it formerly was an appendage is the principal shipper of freight thereover. The extent to which a railroad is in fact used does not determine whether it is or is not a common carrier, but the right of the public to demand service of it. Railroads owned by corporations properly organized under the laws of the State in which they are and treated as common carriers by the State, authorized to exercise eminent domain, dealt with as common carriers by other railroad corporations, and engaged a carrying for hire goods of those who see fit to employ them, are common carriers for all purposes, and cannot be treated as such as to the general public and not as to those who have a proprietary interest in the corporations owning them. Congress has expressly excepted the transportation of lumber from the operation of the commodities clause, and had power so to do. United States v. Del. Hudson Co., 213 U.S. 366. Debates in Congress may be resorted to for the purpose of showing that which prompted the legislation. This court will not, in interpreting the power of the Interstate Commerce Commission in regard to a particular traffic, ignore a declaration of public policy in regard to that traffic as shown by an enactment of Congress. Congress, by the exemption of lumber from the operation of the commodities clause, shows that it regarded railroad tap lines for lumber, owned and operated by the owners of the timber, as essential for the development of the timber interests of the country. It is beyond the authority of the Interstate Commerce Commission to order a tap line to cease a division of rates as to lumber owned by is or by those having proprietary interest therein, if it is allowed such division as to lumber shipments by others. If the division of joint rates between the principal carrier and the tap line really amounts to a rebate or discrimination in favor of the tap line owners, it is within the power and duty of the Interstate Commerce Commission to reduce such division to a proper point. 209 F. 244, affirmed.
Mr. Blackburn Esterline, Special Assistant to the Attorney General, with whom The Solicitor General and Mr. Karl W. Kirchwey, Attorney, were on the brief, for the United States:
Mr. Charles W. Needham, with whom Mr. Joseph W. Folk was on the brief, for the Interstate Commerce Commission:
The trunk lines sought to cancel their tariffs prescribing divisions and allowances to the tap lines. The latter filed petitions with the Commission, complaining of this action. They requested that an answer be required from each trunk line, that an investigation be entered into, and that through routes and joint rates be established between the trunk lines and the tap lines. The Commission found that the tap lines were plant facilities of the lumber companies, denied the relief prayed, and by a single order dismissed the several petitions. This order was a negative order. As no affirmative order was entered against the tap lines, which they might annul or enjoin, the Commerce Court was without jurisdiction. Proctor Gamble Co. v. United States, 225 U.S. 282; Hooker v. Knapp, 225 U.S. 302.
In cases of preference and discrimination, this court has held that judicial review is limited to the single inquiry, Was there substantial evidence before the Commission to support the order? In their petitions to the Commerce Court, the tap lines alleged much matter other and different from that which they adduced before the Commission. They also offered new evidence. Among other things, they sought to show conditions which they had created after the hearing before the Commission on relating to the operation of the tap lines, and also to swell substantially the volume of the tonnage handled for others than the proprietary companies. They now seek to destroy the report and order of the Commission with a record which was not before it. Congress did not contemplate a retrial of the same issues of fact before another tribunal. The Commerce Court was right in disregarding the testimony taken before it, and in striking it from the record. I.C.C. v. Un. Pac. R.R. Co., 222 U.S. 541, 550; I.C.C. v. Louis. Nash. R.R. Co., 227 U.S. 88; United States v. Ball. Ohio R.R. Co., 225 U.S. 306, 323.
The Commission had the right to look behind the fact of separate incorporation to ascertain the actual relations of the parties. The tap lines are not bona fide common carriers of the traffic of the lumber companies, but they are mere devices created for the purpose of taking over the switch tracks and logging equipment of the several lumber companies, and converting allowances, which would otherwise be bald rebating transactions, into private divisions between the appellee tap lines and the trunk lines, in order to evade the provisions of the Act to Regulate Commerce, and simultaneously to maintain advantages over other shippers of lumber. Miller Lux v. Canal Co., 211 U.S. 293; So. Pacific Co. v. I.C.C., 219 U.S. 498, 521; United States v. Union Stock Yard, 226 U.S. 286, 304; United States v. Lehigh Valley R.R. Co., 220 U.S. 257; Fourche River Co. v. Lumber Co., 230 U.S. 316; Crane Iron Works v. United States, 209 F. 238.
The particular preferences and advantages to the lumber companies may be thus summarized: 1. The allowance of 1 1/2c to 5c per 100 pounds from the freight rate, and the resultant advantages of these lumber companies over their competitors in the transportation and sale of lumber in the markets. Some of the mills turn out 2,500 cars per year; 4c per 100 pounds, on the basis of 50,000 pounds to the car, would amount to $50,000 to a single company within a single year. 2. The use by the lumber companies of the tracks, switches and sidings as holding yards for loaded and empty cars, which enables them to evade all demurrage and car service charges. The tap lines hold for the lumber companies the cars of the trunk lines on the basis of 50c a day after 6 days free time, instead of the lumber companies paying the usual $1 and $2 per day over 48 hours free time. 3. The use of free interstate transportation over the trunk lines distributed wholesale to the officers and agents of the lumber companies and used by them in travelling in the interest of the lumber companies, or in their own interest.
In order to gain these preferences and discriminations, the lumber companies are making the transportation of their enormous traffic a matter of bargain with all of the trunk lines, and the sale of it to the one or two which pays the highest allowances. With the power wielded in controlling the routing, the lumber companies are forcing the trunk lines to make allowances to the tap lines, of which the stockholders of the lumber companies are getting the benefit.
The conclusions reached by the Commission did not proceed upon arbitrary and unlawful distinctions and are supported by substantial evidence.
The switching service within 3 miles of the trunk line, being one which the trunk line held itself out to perform under the through rate, was a service "connected with transportation" when performed by the shipper or its agent. Switching for a greater distance so performed was purely an accessorial service. Taenzer Co. v. C.R.I. P. Ry. Co., 191 F. 543; C. A. Ry. Co. v. United States, 156 F. 558; affirmed, 212 U.S. 563; Central Yellow Pine Association v. V.S. P.R. Co., 10 I.C.C. 193; Fourche River Co. v. Bryant Lumber Co., 230 U.S. 316, 322; United States v. B. O.R.R. Co., 231 U.S. 274; I.C.C. v. Diffenbaugh, 222 U.S. 42; Matter of the Transportation of Hutchinson Salt, 10 I.C.C. 1, 9; Star Grain Co. v. A., T. S.F. Ry. Co., 17 I.C.C. 338; Fathauer Co. v. St. L., I.M. S. Ry. Co., 18 I.C.C. 517; Industrial Lumber Co. v. S.L.W. G. Ry. Co., 19 I.C.C. 50: Santa Fe Ry. v. Grant Bros., 228 U.S. 177, 185; Crane Iron Works v. United States, 209 F. 238; Kaul Lumber Co. v. Central of Georgia Ry. Co., 20 I.C.C. 450; United States v. B O. Ry. Co., 231 U.S. 274; General Electric Co. v. N.Y.C. H.R.R.R. Co., 14 I.C.C. 237; Solvay Process Co. v. D., L. W.R.R. Co., 14 I.C.C. 246; Re Allowances for Sugar Transfer, 14 I.C.C. 619; C. O. Ry. Co. v. Standard Lumber Co., 174 F. 107; Industrial Railways Case, 29 I.C.C. 212; Le Roy Fibre Co. v. C., M. St. P. Ry. Co., 232 U.S. 340, 354; Am. Sugar Co. v. D., L. W.R.R. Co., 200 F. 652, 656; Mitchell Coal Co. v. Penna. R.R. Co., 230 U.S. 247, 264.
A plant facility tap line performing this service within the 3 mile limit was entitled to an allowance under § 15, but to no division out of the through rate. A common carrier tap line was entitled to a division or allowance out of the through rate on a haul of either more or less than 3 miles. The movement of the logs from the forest to the mill was not a transportation service to be paid for out of the through rate, but an accessorial service for which the shipper should pay.
Any allowance for switching within 1,000 feet of a trunk line was a mere device to effect an unlawful payment. These findings are within the principles approved by this court in Mitchell Coal Co. v. Penna. R.R. Co., 230 U.S. 247, 265, to the effect that an allowance to a tap line under § 15 "is lawful only when the trunk line prefers, for reasons of its own and without discrimination, to have the lumber company perform the service."
The Commerce Court affirmed in all respects the report and order of the Commission, with the single and sole exception that the Commission had arbitrarily found the tap lines to be plant facilities of the lumber companies, and impliedly recognized them as common carriers of an insignificant amount of traffic of a few other shippers, amounting to only 1 or 2 per cent of the whole.
The tap lines, the lumber companies, and the trunk lines, in all of their arrangements among themselves, and in various forms, carefully and clearly separated the traffic of the proprietary companies from the traffic of other shippers, and the Commission simply treated the case as the parties themselves had made it.
The preferences and discriminations found by the Commission do not arise out of the insignificant amount of traffic handled for shippers other than the proprietary companies. Such shippers do not receive the allowance of 1 1/2c to 5c, or free demurrage and car service, or free passes. Rebates are not paid to the public on insignificant amounts of traffic, but they are paid to private parties on large volumes of traffic.
Any allowance whatever to as many as 57 tap lines was stricken down as unlawful, and the petitions were dismissed by negative orders. To 35 other tap lines the Commission allowed either a small division of the rate or an arbitrary switching charge, in the amounts which the Commission found they were entitled to receive for the service which they rendered. To 5 other tap lines the Commission refused any allowance on the traffic of the proprietary companies. No trunk line has come forward to challenge the validity of the order. Those which were brought in by summons have answered that they would allow the United States to defend. Out of a total of 97 tap lines against which the order was directed, 92 have accepted its terms. Only 5 have objected. Twice the report of the Commission has been sanctioned by this court to the extent of citing it as authority. Mitchell Coal Co. v. Penna. R.R. Co., 230 U.S. 247, 264, 265; Fourche River Co. v. Bryant Lumber Co., 230 U.S. 316, 322. The five objecting parties are met with the powerful presumptions of validity which accompany the order, which are reenforced by the nonaction of the great majority of the interested parties, and the sanction which this court has already given to the report in the cases already cited.
Mr. Robert Dunlap and Mr. James L. Coleman, with whom Mr. T.J. Norton and Mr. Gardiner Lathrop were on the brief, for the Atchison, Topeka Santa Fe Railway Company, and other trunk line railway companies, appellants in Nos. 830, 832, 834 and 836:
The tap line division is a rebate and the various steps taken by appellees in their attempts to legalize such rebate are mere devices to evade the payment of the published tariff rate in full.
The incorporation of the various tap line railroads and the other steps taken by them were for the sole purpose of continuing under the name of a division the old open rebate which was paid direct to the lumber companies. Masquerading as railroads, the lumber companies were making their traffic a matter of bargain and sale and by the device of a secret division were compelling the trunk lines to bid against each other in the dark for such business. Such was the proper finding of the Interstate Commerce Commission.
The points raised by appellees before the Commerce Court and before the Interstate Commerce Commission are without merit. The facts of record and the law are that:
The service performed by each of the appellee railroads herein is not a service of transportation by a common carrier railroad within the meaning of the Act to Regulate Commerce, but is an industrial service to the plant; the appellee railroads are plant facilities and perform a plant facility service for the proprietary lumber companies; there was abundant evidence upon which the Commission could base its finding that the participation by the appellee railroad in joint rates upon the logs and lumber of the proprietary lumber companies constitutes an undue and unreasonable preference and subjects other shippers to unjust discrimination within the meaning of the Act to Regulate Commerce.
The Commission's order does not result in undue or unreasonable preference or unjust discrimination within the meaning of the Act to Regulate Commerce, either as between common carriers subject to the Act to Regulate Commerce, or as between shippers.
The order does not deprive the appellees of their rights under the Constitution of the United States.
The Commodities Clause does not repeal the Act to Regulate Commerce with respect to the prohibitions against rebating and discriminations.
Cases heretofore relied upon by appellees can be distinguished.
In support of these contentions, see Armour Packing Co. v. United States, 209 U.S. 56; Blackstone v. Miller, 188 U.S. 206; Brundred v. Rice, 49 Ohio St. 640; Central Pine Assn. v. Shreveport c. R.R. Co., 10 I.C.C. 193; Chicago Alton R.R. Co. v. United States, 156 F. 558; 1 Cook on Corporations, 6th ed., 31; 2 Cook on Corporations, 6th ed., 1972, 1974, 1975, 1983, 1985, 1986, 1987; Corporation Tax Cases, 220 U.S. 107; Crane Iron Works v. United States, 209 F. 238; Crane Iron Works v. Central R.R. Co., 17 I.C.C. 514; Crane Railroad Co. v. Phila. Reading Ry. Co., 15 I.C.C. 248; Demko v. Carbon Hill Coal Co., 136 F. 162; Eastern Western Ry. Co. v. Rayley, 157 F. 532; General Electric Co. v. N.Y.C. H.R.R., 14 I.C.C. 237; Hunter v. Baker Vehicle Co., 190 F. 665; Ill. Cent. R.R. Co. v. Int. Com. Comm., 206 U.S. 441; Industrial Railways Case, 29 I.C.C. 212; Re Divisions of Joint Rates, 10 I.C.C. 661; Re Hutchinson Salt, 10 I.C.C. 1; Re Investigation of Tap-line Connections, 23 I.C.C. 277, 283; Int. Com. Comm. v. C., R.I. P. Ry. Co., 218 U.S. 88; Int. Com. Comm. v. D., L. W.R.R. Co., 220 U.S. 235; Int. Com. Comm. v. L. N.R.R. Co., 227 U.S. 88; Re Rieger, 157 F. 609; Kendall v. Klapperthal Co., 202 Pa. 596, 52 A. 92; Lehigh Mining Co. v. Kelly, 160 U.S. 327; Louis. Nash. R.R. Co. v. Mottley, 219 U.S. 467; La. Pac. Ry. Co. v. United States, 209 F. 247; Martin v. Martin Co., 88 A. 612; Miller Lux v. East Side Canal Co., 211 U.S. 293; McKilvergan v. Alexander Lumber Co., 102 N.W. 332; New York, N.H. H.R.R. Co. v. Int. Com. Comm., 200 U.S. 361; Northern Securities Co. v. United States, 193 U.S. 197; Peavey Elevator Case, 222 U.S. 42; Procter Gamble v. United States, 225 U.S. 282; Santa Fe c. Ry. Co. v. Grant Bros., 228 U.S. 177; Seymour v. Spring Forest Assn., 144 N.Y. 333; Solvay Process Co. v. D., L. W.R.R. Co., 14 I.C.C. 246; So. Pac Terminal Co. v. Int. Com. Comm., 219 U.S. 498; Swift v. United States, 196 U.S. 375; Union Pacific R.R. Co. v. Updyke, 222 U.S. 215; Taenzer Co. v. C., R.I. P. Ry. Co., 170 F. 240; S.C., 191 F. 543; United States v. Bags of Coffee, 8 Cr. 415; United States v. B. O.R.R. Co., 231 U.S. 274; United States v. Del. Hud. R. Co., 213 U.S. 366; United States v. Milwaukee Transit Co., 142 F. 247; United States v. Union Stock Yard, 226 U.S. 286; Wade v. Lutcher, 74 F. 517; Watson v. Bonfils, 116 F. 157; Williams v. Northern Lumber Co., 113 F. 382.
Mr. Luther M. Walter and Mr. H.M. Garwood, with whom Mr. W.R. Thurmond was on the brief, for appellees:
The service performed by each of the appellee railways is a service of transportation by a common carrier within the meaning of the Act to Regulate Commerce.
Appellee railways are not plant facilities and do not perform a plant facility service for the lumber companies, appellees herein.
There was no evidence upon which the Interstate Commerce Commission could base its finding that the participation by the appellee railways in joint rates upon the logs and lumber of the appellee lumber companies constitutes an undue or unreasonable preference or subjects any party to any illegal discrimination within the meaning of the Act to Regulate Commerce.
The Commission's order results in undue and unreasonable preference and unjust discriminations within the meaning of the Act to Regulate Commerce as between carriers subject to the Act to Regulate Commerce and as between shippers.
The order deprives appellees of their rights under the Constitution of the United States.
The order of the Commission expressly overrides the exception contained in the Commodities Clause of the Act to Regulate Commerce.
In support of these contentions, see Amos Kent Co. v. Assessor, 114 La. 862; Butte Puc. Ry. Co. v. Montana Union R. Co., 16 Mont. 504; Bridal Veil Lumber Co. v. Johnson, 30 Or. 581; 46 P. 790; Beaumont c. R.R. v. A., T. S.F., 24 I.C.C. 161, 163; Chapman v. Trinity Valley Ry. Co., 138 S.W. 440; Columbia Conduit Co. v. Commonwealth 90 Pa. 307; Contra Costa Ry. Co. v. Moss, 23 California 323; Commodities Clause Case, 213 U.S. 366-417; Crane Iron Works v. United States, 209 F. 238; DeCamp v. Hibernia Ry. Co., 47 N.J.L. 46; Diffenbaugh Case, 176 F. 409; Elevator Cases, 14 I.C.C. 324; 176 F. 409; 222 U.S. 42; Federal Sugar Case, 20 I.C.C. 200; Gloucester Ferry Co. v. Pennsylvania, 114 U.S. 196; Greasy Creek Co. v. Ely Jellico Coal Co., 132 Ky. 692; General Electric Co. v. N.Y.C. H.R.R.R. Co., 14 I.C.C. 237; Kans. Tex. Ry. Co. v. North West. Coal Co., 161 Mo. 288; 61 S.W. 864; Kettle River Ry. Co. v. Eastern Ry. Co., 43 N.W. 473; La. Pac. Ry. Co. v. United States, 209 F. 247; Manufacturers Ry. Co. v. St. L., I.M. So. Ry., 21 I.C.C. 304, 312; Madura Railway Co. v. Raymond Granth Co., 86 P. 27; Mitchell Coal Co. v. Pennsylvania Ry. Co., 230 U.S. 247, 264; Solvay Process Co. v. D., L. W.R.R. Co., 14 I.C.C. 246; Ulmer v. Railway Co., 98 Me. 581; 57 A. 1001; Union Stock Yard Case, 226 U.S. 286; United States v. Balt. Ohio R.R. Co., 231 U.S. 274.
Mr. Wylie M. Barrow, with whom Mr. Ruffin G. Pleasant, Attorney General of the State of Louisiana, was on the brief, for the Railroad Commission of Louisiana, intervenor and appellee:
The interest of the State of Louisiana in these cases lifts them from the category of mere private controversy and places them on the plane of public questions.
Many important railroads now operating in Louisiana originated as tap lines.
There is a public necessity for the tap line railroads.
The questions here presented, being public in their nature, and not merely private controversy, are of great interest to the people of the State of Louisiana.
In support of the contentions of the State, see Agee v. Louis. Nash. R.R. Co., 152 Ala. 344; Amos Kent Brick Co. v. Tax Collector, 114 La. 862; Butte Pac. R. Co. v. Montana Union Ry., 16 Mont. 504; Caldwell v. Richmond c. R. Co., 89 Ga. 550; Central Yellow Pine Ass'n v. Vicksburg c. R.R. Co., 10 I.C.C. 193; Chi., B. Q.R.R. Co. v. Cutts, 94 U.S. 155; Chi., B. Q.R. Co. v. Porter, 43 Minn. 527; De Camp v. Hibernia Ry. Co., 47 N.J.L. 43; Denver c. R. Co. v. Cahill, 8 Colo. App. 158; Re Divisions of Joint Rates, 10 I.C.C. 385; Dock Co. v. Garrity, 115 Ill. 155; Lake Superior R.R. Co. v. United States, 93 U.S. 442; McCloud Lumber Co. v. So. Pac. Co., 24 I.C.C. 89; National Dock Co. v. Central R.R. Co., 32 N.J. Eq. 755; N.Y. Cent. R.R. Co. v. Lockwood, 17 Wall. 357; Phillip v. Watson, 63 Iowa 28; 18 N.W. 859; Star Grain Co. v. Atchison c. Ry. Co., 17 I.C.C. 338; S.C., 14 I.C.C. 364; Tap Line Cases, 23 I.C.C. 277; Re Transportation Hutchinson Salt, 10 I.C.C. 1; Ulmer v. Lime Rock Ry. Co., 98 Me. 579; United States v. Union Stock Yard, 226 U.S. 286; Winona R.R. Co. v. Blake, 94 U.S. 180.
A preliminary objection is made to the jurisdiction of the Commerce Court in that the order of the Commission is not reviewable because merely of a negative character. The Commerce Court examined this question and in view of the amended order of October 30, 1912, reached the conclusion that the order was affirmative in its nature and of a character permitting of review by proper proceedings in that court under the act giving it jurisdiction in such cases. We find no reason to differ with this conclusion and are of opinion that the Commerce Court had jurisdiction in the case.
It is further insisted upon the authority of Procter Gamble Co. v. United States, 225 U.S. 282, and other cases in this court which have followed that decision, that in the present cases the decision rests upon conclusions of the Commission as to matters of fact only, which are within the sole jurisdiction of that body and not reviewable in the courts. But we shall consider the case upon the findings of fact preceding this opinion, which are identical with those made by the Commission, and test the conclusions reached as matters of law, giving proper consideration to matters of fact which are not in dispute.
The final decree of the Commerce Court vacated and set aside the portion of the Commission's order reading as follows:
"That the tracks and equipment with respect to the industry of the several proprietary companies are plant facilities, and that the service performed therewith for the respective proprietary lumber companies in moving logs to their respective mills and performed therewith in moving the products of the mills to the trunk lines is not a service of transportation by a common carrier railroad, but is a plant service by a plant facility; and that any allowances or divisions out of the rate on account thereof are unlawful and result in undue and unreasonable preferences and unjust discriminations, as found in the said reports;
"3. It is Ordered, That the principal defendants [trunk lines, naming them], be, and they are hereby notified and required to cease and desist, and for a period of two years hereafter, or until otherwise ordered, to abstain from making any such allowances to any of the above named parties to the record in respect of any such above described service."
The question now before this court is the correctness of this decree.
A perusal of the findings and orders of the Commission make it apparent that the grounds of decision upon which it proceeded were two, first, that these roads were mere plant facilities, second, that they were not common carriers as to proprietary traffic. The Commission held that before incorporation they were plant facilities and that after incorporation they remained such. What the Commission means by plant facilities may be gathered from a consideration of some of its decisions. In General Electric Co. v. N.Y.C. H.R.R.R., 14 I.C.C. 237, a network of interior switching tracks constructed to meet the necessities of the business, were held to be mere plant facilities. The same principle was applied to the internal trackage of large industrial plants in Solvay Process Company v. Delaware, Lackawanna Western R.R. Co., 14 I.C.C. 246. These systems of internal trackage were not common carriers, and, however extensive, were intended to and did furnish service for the plants which owned and operated them. But a common carrier performing service as such, regulated and operated under competent authority, as observed by Commissioner Prouty in Kaul Lumber Co. v. Central of Georgia Railway Co., 20 I.C.C. 450, 456, is no longer a mere appendage of a mill "but a public institution." It thus becomes apparent that the real question in these cases is the true character of the roads here involved. Are they plant facilities merely or common carriers with rights and obligations as such."
It is insisted that these roads are not carriers because the most of their traffic is in their own logs and lumber and that only a small part of the traffic carried is the property of others. But this conclusion loses sight of the principle that the extent to which a railroad is in fact used, does not determine the fact whether it is or is not a common carrier. It is the right of the public to use the road's facilities and to demand service of it rather than the extent of its business which is the real criterion determinative of its character. This principle has been frequently recognized in the decisions of the courts. We need not cite the many state cases in which it has been so held, in view of the fact that the same principle was laid down in the late case of Union Lime Co. v. Chicago N.W. Ry. Co., 233 U.S. 211. In that case the Supreme Court of Wisconsin sustained the extension of a spur track to reach the quarries and lime kilns of a single company as a public use authorizing the exercise of the right of eminent domain, and this court affirmed the judgment. Dealing with the contention that the Wisconsin statute was invalid because it authorized action appropriating property upon the exigency of a private business, this court said (p. 221):
"A spur may, at the outset, lead only to a single industry or establishment; it may be constructed to furnish an outlet for the products of a particular plant; its cost may be defrayed by those in special need of its service at the time. But none the less, by virtue of the conditions under which it is provided, the spur may constitute at all times a part of the transportation facilities of the carrier which are operated under the obligations of public service and are subject to the regulation of public authority. As was said by this court in Hairston v. Danville Western Rwy. Co., supra (p. 608) [ 208 U.S. 598]: `The uses for which the track was desired are not the less public because the motive which dictated its location over this particular land was to reach a private industry, or because the proprietors of that industry contributed in any way to the cost.' There is a clear distinction between spurs which are owned and operated by a common carrier as a part of its system and under its public obligation and merely private sidings. See De Camp v. Hibernia R.R. Co., 47 N.J.L. 43; Chicago c. R.R. Co. v. Porter, 43 Minn. 527; Ulmer v. Lime Rock R.R. Co., 98 Me. 579; Railway Company v. Petty, 57 Ark. 359; Dietrich v. Murdock, 42 Mo. 279; Bedford Quarries Co. v. Chicago c. R.R. Co., 175 Ind. 303."
The Commission has recognized this principle as applicable to tap lines, for in the Central Yellow Pine Association v. The Vicksburg, Shreveport Pacific R.R. Co., 10 I.C.C. 193, 199, it said:
"While these logging roads are almost or quite without exception mill propositions at the outset, built exclusively for the purpose of transporting logs to the mill, they soon reach a point where they engage in other business to a greater or less extent. As the length of the road increases, as the lumber is taken off and other operations obtain a foothold along the line, various commodities besides lumber are transported, and this business gradually develops until in several cases what was at first a logging road pure and simple has become a common carrier of miscellaneous freight and passengers. Almost all these lines, even where they are run as private enterprises, do more or less outside transportation, and it would be difficult to draw any line of demarkation between the logging road as such and the logging road which has become a general carrier of freight."
This representation it is contended by the Attorney General of Louisiana, who appears here in behalf of the Louisiana Railroad Commission, intervenor, is aptly descriptive of the growth and development of railroads in that State.
Furthermore, these roads are common carriers when tried by the test of organization for that purpose under competent legislation of the State. They are so treated by the public authorities of the State, who insist in this case that they are such and submit in oral discussion and printed briefs cogent arguments to justify that conclusion. They are engaged in carrying for hire the goods of those who see fit to employ them. They are authorized to exercise the right of eminent domain by the State of their incorporation. They were treated and dealt with as common carriers by connecting systems of other carriers, a circumstance to be noticed in determining their true character. United States v. Union Stock Yard Transit Co., 226 U.S. 286. They are engaged in transportation as that term is defined in the Commerce Act and described in decisions of this court. Coe v. Errol, 116 U.S. 517; Covington Stock Yds. Co. v. Keith, 139 U.S. 128; Southern Pac. Term. Co. v. Interstate Com. Comm., 219 U.S. 498; United States v. Union Stock Yard Co., supra.
Applying the principles which we have stated as determinative of the character of these roads and without repeating the facts concerning them, they would seem to fill all the requirements of common carriers so employed, unless the grounds upon which they were determined not to be such by the Commission are adequate to that end. The Commission itself as to all shippers other than those controlled by the so-called proprietary companies, treated them as common carriers, for it has ordered the trunk lines to reestablish through routes and joint rates as to such traffic. But says the Government, and it insists that this fact alone might well control the decision, the roads are owned by the persons who also own the timber and mills which they principally serve.
This fact is not shown to be inconsistent with the laws of the State in which they are organized and operated. On the contrary the public authorities of that State are here insisting that these companies are common carriers. Congress has not made it illegal for roads thus owned to operate in interstate commerce. While Congress in enacting the Commodities Clause amending § 1 of the Act to Regulate Commerce (June 29, 1906, c. 3591, 34 Stat. 584) sought to divorce transportation from production and manufacture and to make transportation a business of and by itself unallied with manufacture and production in which a carrier was itself interested, the debates, which may be resorted to for the purpose of ascertaining the situation which prompted this legislation, show that the situation in some of the States as to the logging industry and transportation was sharply brought to the attention of Congress and led to the exemption from the Commodities Clause of timber and the manufactured products thereof, thus indicating the intention to permit a railroad to haul such lumber and products although it owned them itself. And that Congress had the constitutional power to enact such exemption was held in United States v. Delaware Hudson Co., 213 U.S. 366, 416-7. This declaration of public policy which is now part of the Commerce Act cannot be ignored in interpreting the power and authority of the Commission under the act. The discussion resulting in the action of Congress shows that railroads built and owned by the same persons who own the timber were regarded as essential to the development of the timber regions in the Southwest and the necessity of such roads was dwelt upon and set forth with ample illustration by Commissioner Prouty in his concurring opinion in this case.
As we have said, the Commission by its order herein required the trunk lines to reestablish through routes and joint rates as to property to be transported by others than the proprietary owners over the tap lines. This order would of itself create a discrimination against proprietary owners, for lumber products are carried from this territory upon blanket rates applicable to all within its limits. It follows that independent owners would get this blanket rate for the entire haul of their products while proprietary owners would pay the same rate plus the cost of getting to the trunk line over the tap line. The Commission, by the effect of its order, recognizes that railroads organized and operated as these tap lines are, if owned by others than those who own the timber and mills, would be entitled to be treated as common carriers and to participate in joint rates with other carriers. We think the Commission exceeded its authority when it condemned these roads as a mere attempt to evade the law and to secure rebates and preferences for themselves.
It is doubtless true, as the Commission amply shows in its full report and supplemental report in these cases, that abuses exist in the conduct and practice of these lines and in their dealings with other carriers which have resulted in unfair advantages to the owners of some tap lines and to discriminations against the owners of others. Because we reach the conclusion that the tap lines involved in these appeals are common carriers, as well of proprietary as non-proprietary traffic, and as such entitled to participate in joint rates with other common carriers that determination falls far short of deciding, indeed does not at all decide, that the division of such joint rates may be made at the will of the carriers involved and without any power of the Commission to control. That body has the authority and it is its duty to reach all unlawful discriminatory practices resulting in favoritism and unfair advantages to particular shippers or carriers. It is not only within its power, but the law makes it the duty of the Commission to make orders which shall nullify such practices resulting in rebating or preferences, whatever form they take and in whatsoever guise they may appear. If the divisions of joint rates are such as to amount to rebates or discriminations in favor of the owners of the tap lines because of their disproportionate amount in view of the service rendered, it is within the province of the Commission to reduce the amount so that a tap line shall receive just compensation only for what it actually does.
For the reasons stated, we think the Commerce Court did not err in reaching its conclusion and decision, and its judgment is