Rufus Wheeler Peckham

“ The points of difference between the railroad and other corporations are many and great. It cannot be disputed that a railroad is a public corporation, and its business pertains to and greatly affects the public, and that it is of a public nature. The company may not charge unreasonable prices for transportation, nor can it make unjust discriminations, nor select its patrons, nor go out of business when it chooses, while a mere trading or manufacturing company may do all these things. ”

“ We recognize the argument upon the part of the defendants that restraint upon the business of railroads will not be prejudicial to the public interest so long as such restraint provides for reasonable rates for transportation, and prevents the deadly competition so liable to result in the ruin of the roads, and to thereby impair their usefulness to the public, and in that way to prejudice the public interest. ”

“ Trade or commerce under those circumstances may nevertheless be badly and unfortunately restrained by driving out of business the small dealers and worthy men whose lives have been spent therein, and who might be unable to readjust themselves to their altered surroundings. Mere reduction in the price of the commodity dealt in might be dearly paid for by the ruin of such a class and the absorption of control over one commodity by an all-powerful combination of capital. ”

“ A contract, therefore, that is in restraint of trade or commerce is, by the strict language of the act, prohibited, even though such contract is entered into between competing common carriers by railroad, and only for the purposes of thereby affecting traffic rates for the transportation of persons and property. If such an agreement restrain trade or commerce, it is prohibited by the statute, unless it can be said that an agreement, no matter what its terms, relating only to transportation, cannot restrain trade or commerce. ”

“ Large numbers do not agree that the view taken by defendants is sound or true in substance, and congress may, and very probably did, share in that belief in government is to be found in its statutes, government is to be found in its statutes and, when they have not directly spoken, then in the decisions of the courts and the constant practice of the government officials; but when the lawmaking power speaks upon a particular subject, over which it has constitutional power to legislate, public policy in such a case is what the statute enacts. ”

“ It is entirely appropriate generally to subject corporations or persons engaged in trading or manufacturing to different rules from those applicable to railroads in their transportation business, but when the evil to be remedied is similar in both kinds of corporations, such as contracts which are unquestionably in restraint of trade, we see no reason why similar rules should not be promulgated in regard to both, and both be covered in the same statute by general language sufficiently broad to include them both. ”

“ Viewed in the light of all these facts, it is broadly and confidently asserted that it is impossible to believe that congress, or any other intelligent and honest legislative body, could ever have intended to include all contracts or combinations in restraint of trade, and, as a consequence thereof, to prohibit competing railways from agreeing among themselves to keep up prices for transportation to such a rate as should be fair and reasonable. ”

“ The mere dissolution of the association is not the most important object of this litigation. The judgment of the court is sought upon the question of the legality of the agreement itself for the carrying out of which the association was formed, and, if such agreement be declared to be illegal, the court is asked, not only to dissolve the association named in the bill, but that the defendants should be enjoined for the future. ”

“ It is matter of common knowledge that agreements as to rates have been continually made of late years, and that complaints of each company in regard to the violation of such agreements by its rivals have been frequent and persistent. Rate wars go on notwithstanding any agreement to the contrary, and the struggle for business among competing roads keeps on, and, in the nature of things, will keep on, and alleged agreement to the contrary notwithstanding ”

“ The fact that the provisions of the interstate commerce act may have changed in many respects the conduct of the companies in the carrying on of the public business they are engaged in does not show that it was the intent of congress, in the enactment of that statute, to clothe railway companies with the right to combine together for the purpose of avoiding the effects of competition on the subject of rates.' The whole opinion is a remarkably strong presentation of the views of the learned judge who wrote it. ”

“ What one company may do in the way of charging reasonable rates is radically different from entering into an agreement with other and competing roads to keep up the rates to that point. If there be any competition, the extent of the charge for the service will be seriously affected by that fact. Competition will itself bring charges down to what may be reasonable, while, in the case of an agreement to keep prices up, competition is allowed no play. ”

“ Trading, manufacturing, and railroad corporations are all engaged in the transaction of business with regard to articles of trade and commerce, each in its special sphere,-either in manufacturing or trading in commodities, or in their transportation by rail. ”

“ Whether they be able to find other avenues to earn their livelihood is not so material, because it is not for the real prosperity of any country that such changes should occur which result in transferring an independent business man, the head of his establishment, small though it might be, into a mere servant or agent of a corporation for selling the commodities which he once manufactured or dealt in ”

“ It is true the results of trusts, or combinations of that nature, may be different in different kinds of corporations, and yet they all have an essential similarity, and have been induced by motives of individual or corporate aggrandizement as against the public interest. In business or trading combinations they may even temporarily, or perhaps permanently, reduce the price of the article traded in or manufactured, by reducing the expense inseparable from the running of many different companies for the same purpose. ”

“ In order to do this, the defendants call attention to many facts which they have already referred to in their argument, upon the point that railroads were not included at all in the statute. They again draw attention to the fact of the peculiar nature of railroad property. When a railroad is once built, it is said, it must be kept in operation. It must transport property, when necessary in order to keep its business, at the smallest price, and for the narrowest profit, or even for no profit, provided running expenses can be paid, rather than not to do the work ”

“ That free and unrestricted competition in the matter of railroad charges may be productive of evils does not militate against the fact that such is the law now governing the subject. No law can be enacted nor system be devised for the control of human affairs that in its enforcement does not produce some evil results, no matter how beneficial its general purpose may be. There are benefits and there are evils which result from the operation of the law of free competition between railway companies. ”

“ Manufacturing or trading companies may also affect prices by joining together in forming a trust or other combination, and by making agreements in restraint of trade and commerce, which, when carried out, affect the interests of the public. ”

“ They have stated in their fourty annual report that competition may degenerate into rate wars, and that such wars are as unsetting to the business of the country as they are mischievous to the carriers, and that the spirit of existing law is against them. ”

“ In any great and extended change in the manner or method of doing business it seems to be an inevitable necessity that distress, and, perhaps, ruin, shall be its accompaniment, in regard to some of those who were engaged in the old methods. ”

“ It is wholly different, however, when such changes are effected by combinations of capital whose purpose in combining is to control the production or manufacture of any particular article in the market, and by such control dictate the price at which the article shall be sold; the effect being to drive out of business all the small dealers in the commodity, and to render the public subject to the decision of the combination as to what price shall be paid for the article. ”

“ Should and member insist upon a reduction of rate against the views of the majority, or if the majority favor the same, and if, in the judgment of such majority, the rate so made affects seriously the rates upon other traffic, then the association may, by a majority vote, upon such other traffic put into effect corresponding rates to take effect on the same day. By unanimous consent, any rate, rule, or regulation relating to freight traffic may be modified at any meeting of the association without previous notice. ”

“ It may be entirely true that, as we proceed in the development of the policy of public control over railway traffic, methods will be devised and put in operation by legislative enactment whereby railway companies and the public may be protected against the evils arising from unrestricted competition, and from rate wars which unsettle the business of the community ”

“ To the question why competition should necessarily be conducted to such an extent as to result in this relentless and continued war, to eventuate only in the financial ruin of one or all of the companies indulging in it, the answer is made that, if competing railroad companies be left subject to the sway of free and unrestricted competition, the results above foreshadowed necessarily happen from the nature of the case ”

“ In other words, we are asked to read into the act, by way of judicial legislation an exception that is not placed there by the lawmaking branch of the government, and this is to be done upon the theory that the impolicy of such legislation is so clear that it cannot be supposed congress intended the natural import of the language it used. This we cannot and ought not to do. That impolicy is not so clear, nor are the reasons for the exception so potent, as to permit us to interpolate an exception into the language of the act, and to thus materially alter its meaning and effect. ”

“ To subject the locomotives and cars to forfeiture under such circumstances might also cause great confusion to the general business of the carrier, and in that way inflict unmerited punishment upon the innocent owners of other property in the course of transportation in the same cars and drawn by the same locomotives. ”

“ It is true that, as to a majority of those living along its line, each railroad is a monopoly. Upon the subject now under consideration, it is well said by Judge Oliver P. Shiras, United States district judge, Northern district of Iowa, in his very able dissenting opinion in this case is the United States circuit court of appeals, as follows: 'As to the majority of the community living along its line, each railway company has a monopoly of the business demanding transportation as one of its elements. ”

“ The provisions of that act look to the prevention of discrimination; to the furnishing of equal facilities for the interchange of traffic; to the rate of compensation for what is termed the 'long and the short haul'; to the attainment of a continuous passage from the point of shipment to the point of destination, at a known and published schedule, and, in the language of counsel for defendants, 'without reference to the location of those points or the lines over which it is necessary for the traffic to pass'; to procuring uniformity of rates charged by each company to its patrons ”

“ If the agreement be legal, it does not owe its validity to any provision of the commerce act; and, if illegal, it is not made so by that act. The fifth section prohibits what is termed 'pooling,' but there is no express provision in the act prohibiting the maintenance of traffic rates among competing roads by making such an agreement as this, nor is there any provision which permits it. Prior to the passage of the act the companies had sometimes endeavored to regulate competition and to maintain rates by pooling arrangements, and in the act that kind of an arrangement was forbidden. ”

“ A change from stagecoaches and canal boats to railroads threw at once a large number of men out of employment. Changes from hand labor to that of machinery, and from operating machinery by hand to the application of steam for such purpose, leave behind them, for the time, a number of men who must seek other avenues of livelihood. ”

“ It must also be remembered that railways are public corporations organized for public purposes, granted valuable franchises and privileges, among which the right to take the private property of the citizen in invitum is not the least (Cherokee Nation v. Southern Kan. Ry. Co., 135 U.S. 641, 657, 10 Sup. Ct. 965) ; that many of them are the donees of large tracts of public lands, and of gifts of money by municipal corporations, and that they all primarily owe duties to the public of a higher nature even than that of earning large dividends for their shareholders. ”

“ They admit that the lines of railroad mentioned in the bill furnish lines of transportation and communication to persons engaged in freight traffic between and among the states and territories of the United States, having through lines for freight traffic in that region of country lying to the westward of the Mississippi and Missouri rivers and east of the Pacific Ocean, but deny that they are the only such lines, and allege that there are several others, naming them. ”