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Statement of the Case.

panies, among others, the appellees herein, it would upon proper petition enter an order requiring the establishment of such routes and rates or enter upon an inquiry with respect thereto, and further provided that all divisions of joint rates should be submitted to the Commission for approval.

The appellees thereupon by their several petitions filed in the United States Commerce Court sought to have the order of the Commission, so far as applicable to them, enjoined and annulled. The Interstate Commerce Commission, the Atchison, Topeka and Santa Fe Railway Company, the Gulf, Colorado and Santa Fe Railway Company and the Railroad Commission of Louisiana intervened. The Commerce Court said that the question was whether the Commission had acted arbitrarily and on improper considerations in determining under what circumstances a common carrier tap line would be deemed to be performing a mere plant service for a proprietary company, and held that as the service rendered to the proprietary and non-proprietary mills by the tap lines was the same, and as it was held to be a transportation service by an interstate common carrier as to the non-proprietary mills, it must be held to be a similar service as to the proprietary mills, and concluded that the Commission was without power to prohibit the making of joint rates by the trunk lines and the tap lines and the payment of some division of such rates to the tap lines for their services in hauling logs to and lumber from the proprietary mills, and annulled the order of the Commission in this respect and so far as it applied to the appellees.

The United States and the Interstate Commerce Commission, and the Atchison, Topeka & Santa Fe Railway Company and the Gulf, Colorado and Santa Fe Railway Company entered separate appeals from the decrees of the Commerce Court in the four cases instituted by the appellees.

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Argument for the Government.

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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 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.

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Argument for the Government.

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. Balt. & 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 Fed. Rep. 238.

The particular preferences and advantages to the lumber companies may be thus summarized: 1. The allowance of 111⁄2c 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

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Argument for the Government.

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.

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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 Fed. Rep. 543; C. & A. Ry. Co. v. United States, 156 Fed. Rep. 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.

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Argument for the Government.

177, 185; Crane Iron Works v. United States, 209 Fed. Rep. 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 Fed. Rep. 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 Fed. Rep. 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.

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