Argument for the Government.

234 U. S.

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 111⁄2c 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

234 U. S.

Argument for Trunk Line Railways.

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 VOL. CCXXXIV-2

Argument for Trunk Line Railways.

234 U. S.

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 Oh. 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 Fed. Rep. 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 Fed. Rep. 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 Fed. Rep. 162; Eastern & Western Ry. Co. v. Rayley, 157 Fed. Rep. 532; General Electric Co. v. N. Y. C. & H. R. R., 14 I. C. C. 237; Hunter v. Baker Vehicle Co., 190 Fed. Rep. 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.

234 U.S.

Argument for Tap Lines

88; Re Rieger, 157 Fed. Rep. 609; Kendall v. Klapperthal Co., 202 Pa. St. 596, 52 Atl. Rep. 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 Fed. Rep. 247; Martin v. Martin Co., 88 Atl. Rep. 612; Miller & Lux v. East Side Canal Co., 211 U. S. 293; McKilvergan v. Alexander Lumber Co., 102 N. W. Rep. 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 Fed. Rep. 240; S. C., 191 Fed. Rep. 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 Fed. Rep. 247; United States v. Union Stock Yard, 226 U. S. 286; Wade v. Lutcher, 74 Fed. Rep. 517; Watson v. Bonfils, 116 Fed. Rep. 157; Williams v. Northern Lumber Co., 113 Fed. Rep. 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

Argument for Tap Lines.

234 U. S.

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 Louisiana, 862; Butte & Pac. Ry. Co. v. Montana Union R. Co., 16 Montana, 504; Bridal Veil Lumber Co. v. Johnson, 30 Oregon, 581; 46 Pac. Rep. 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. Rep. 440; Columbia Conduit Co. v. Commonwealth, 90 Pa. St. 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 Fed. Rep. 238; DeCamp v. Hibernia Ry. Co., 47 N. J. Law, 46; Diffenbaugh Case, 176 Fed. Rep. 409; Elevator Cases, 14 I. C. C. 324; 176 Fed. Rep. 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 Kentucky, 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 Missouri, 288; 61 S. W. Rep. 864; Kettle River Ry. Co. v. Eastern Ry. Co., 43 N. W. Rep. 473; La. & Pac. Ry. Co. v. United States, 209 Fed. Rep. 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 Pac. Rep. 27; Mitchell Coal Co. v.