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234 U. S. Argument for Interstate Commerce Commission.
Oil Co. v. Indiana, 177 U. S. 190. The statute is designed to prevent an unconscionable use of economic advantages.
The operation of pipe lines as common carriers is beyond question commercially practicable, as is shown by prior Federal legislation; prior Federal decisions; state legislation; state decisions; public records and reports; current sources of information, encyclopædias, etc.
The Fifth Amendment does not prohibit the adoption by Congress of this means, so found to be in fact reasonable and appropriate to the accomplishment of its purpose. Congress may prohibit a kind of commerce harmful to the public. Hoke v. United States, 227 U. S. 308; The Lottery Cases, 188 U. S. 358. This power may be exerted for purely economic purposes whenever the strong, preponderant public opinion believes that there is a great public need. Noble State Bank v. Haskell, 219 U. S. 104; C., B. & Q. R. Co. v. Drainage Commissioners, 200 U. S. 561, 592; Standard Oil Case, 221 U. S. 1.
In many instances regulations have taken the form of prohibition except upon such conditions as would protect the public welfare. The Commodities Case, 213 U. S. 366; Atlantic Coast Line v. Riverside Mills, 219 U. S. 186, 202, 203; Norfolk & Western Ry. Co. v. Dixie Tobacco Co., 228 U. S. 593; Southern Ry. v. Reid, 222 U. S. 424, 438.
It is immaterial that in the present case the condition is not express but implied. The same was true of the banking act and the Carmack Amendment, 34 Stat. 584, 595; Noble State Bank v. Haskell, 219 U. S. 213; Atlantic Coast Line Case, 219 U. S. 186, 203; see also Engel v. O'Malley, 219 U. S. 128; Mugler v. Kansas, 123 U. S. 623.
The present statute is valid as a means of preventing owners of pipe lines from obtaining an inequitable proportion of the oil from the common reservoir. Ohio Oil Co. v. Indiana, 177 U. S. 190, 210; Lindsley v. Natural Carbonic Gas Co., 220 U. S. 61. Even at common law it would have been unlawful for a single proprietor to install
Argument for Interstate Commerce Commission. 234 U. S.
at great expense pumping machinery so powerful that he could rapidly draw away the entire common reservoir. Forbell v. City of New York, 164 N. Y. 522, 526. See also Kansas v. Colorado, 206 U. S. 46. Clearly the use of such pumps might be forbidden by statute. Manufacturers Gas Co. v. Indiana Gas Co., 155 Indiana, 461; Oklahoma v. Kansas Gas Co., 221 U. S. 229, 262. And if their use could be prohibited absolutely, why could it not also be prohibited except upon condition that their owner should give to the adjacent proprietors an equitable proportion of the common property.
Nor does the law violate the Fifth Amendment in that, being general in its terms, it might cover pipe lines which are not public markets for oil. Whether purely private pipe lines must be entirely prohibited in order to give the public adequate protection is a matter of legislative discretion. Purity Extract Co. v. Lynch, 226 U. S. 192; Booth v. Illinois, 184 U. S. 425; Lemieux v. Young, 211 U. S. 489; Powell v. Pennsylvania, 127 U. S. 678, 685; Silz v. Hesterberg, 211 U. S. 31; Commonwealth v. Gilbert, 160 Massachusetts, 157; Knoxville Iron Co. v. Harbison, 183 U. S. 13; The Slaughter-house Cases, 16 Wall. 36; The Pure Food Law, 34 Stat. 768, 770.
Nor does the act take property for public use without compensation. This clearly is true as to the prohibition of purely private operation. The exclusive element is the monopoly element. No compensation need be given for that. There is no vested right in a noxious use of property. Standard Oil Case, 221 U. S. 1; Mugler v. Kansas, 123 U S. 623, 669; Commodities Case, 213 U. S. 366, 405; Noble State Bank v. Haskell, 220 U. S. at 100; Union Bridge Co. v. United States, 204 U. S. 364; Slaughter-house Cases, 16 Wall. 36; L. & N. R. Co. v. Mottley, 219 U. S. 467; C., B. & Q. R. Co. v. Drainage Commissioners, 200 U. S. 561, 592.
The business of the appellees is quasi-public. The test to determine whether a business is quasi-public is by as
Argument for Appellees.
certaining whether public grants and franchises are essential to establish and carry on the business; if the business cannot be carried on without such privileges it is quasipublic; such grants and franchises subject the business to a continuing public control; as is the case with all public utility companies requiring rights in public streets and reservations.
Public markets where agents of a business determine property rights for the public by inspecting, grading, weighing and measuring staple products regularly offered for sale at such markets, are charged with a public interest. W. W. Cargill Co. v. Minnesota R. & W. Comm., 180 U. S. 452.
Pipe lines require, and are granted, franchises to cross and run along public highways, streets, rights of way of railroads, public lands and reservations. These privileges, or some of them, have been granted to each of the appellees. Each appellee is engaged in buying crude oil in the fields of production; they have their business headquarters where oil is bought from producers; the oil is inspected, graded and gauged for sale, by the agents of the appellees and other pipe lines.
In the Ohio Oil Case the transportation is sixty miles and across a state line. This is not a "plant facility." It is transportation from the field of production to a point of consumption. Ownership of the pipe line, or the oil, does not change the control of Congress over it. If the State of Kansas should require a license tax of all persons or corporations bringing oil into the State by means of pipe lines, it would be held to be invalid as a burden upon interstate commerce, regardless of ownership. If it can receive protection under the commerce clause, it is certainly liable to regulation under that provision of the Constitution. Robbins v. Tax. Dist. of Shelby Co., 120 U.S. 489.
Mr. John G. Milburn, with whom Mr. Frank L. Crawford, Mr. Walter F. Taylor, Mr. M. F. Elliott and Mr.
Argument for Appellees.
234 U. S.
Chester O. Swain were on the brief, for appellees in Nos. 481, 482, and 483:
The Interstate Commerce Act as amended in 1906 does not apply to the appellee, nor to any owner of a private pipe line.
The act was intended to relate to persons engaged in the business of transporting oil. Any other interpretation raises grave and doubtful constitutional questions.
Debates in Congress may not be referred to in aid of construction of a statute. Omaha St. Ry. v. Int. Com. Comm., 230 U. S. 324.
As construed by the Government, the act makes common carriers of persons and corporations owning and operating private pipe lines used solely for the purpose of transporting the oil of the owners in the conduct of their private business, even though such owners have never held themselves out as common carriers, have never exercised or possessed and do not now possess any right of eminent domain, and derive no powers from state laws under which commen carrier corporations are organized. It follows that the act deprives such persons and corporations of their property without due process of law, and takes it for public use without just compensation.
To make the owners of private pipe lines common carriers as to those lines is to subject private property to a public use and is a "taking" of property within the meaning of the Fifth Amendment.
Since the act, as thus construed, takes private property without providing for due compensation, it violates the Fifth Amendment.
The power of Congress to regulate interstate commerce, like all other powers delegated to that body, is subject to the limitations imposed by the Fifth Amendment.
The contention of the United States that just compensation is provided is untenable. The rates to be paid for
Argument for Appellees.
transportation are not the compensation intended by the Fifth Amendment.
This act cannot be sustained on the theory of the United States that the operation of private pipe lines is monopolistic, that the act prohibits their operation (save as common carriers) as an appropriate means to prevent monopolistic results, and that the adoption of this means by Congress is not within the inhibitions of the Fifth Amendment.
234 U. S.
There is nothing inherent in the nature or operation of private pipe lines which causes a tendency to monopoly.
Neither the authorities cited nor the debates in Congress nor the Report of the Commissioner of Corporations sustains the Government's position on this point.
Nor does the Report of the Interstate Commerce Commission, dated January 28, 1907.
Cases cited in support of position that the private operation of pipe lines tends to monopoly do not help the Government
There is no proof of "duress" or "oppression" on part of owners of private pipe lines. Cases cited under this head are irrelevant.
The mere extent of acquisition of business or property achieved by fair and lawful means or commercial dominance fairly resulting from the ownership of private property lawfully obtained is not the criterion of monopoly or monopolization, within the legal meaning of those words. Monopolization is the unlawful exclusion of others from opportunities and privileges which are rightfully theirs. Monopoly, in the legal sense, is the condition resulting from monopolization thus defined.
It follows therefore that the act, even regarded as an act prohibiting the operation of pipe lines save as common carriers, cannot be sustained as an appropriate means to prevent monopoly, because there is no real and substantial relation between what the act ordains and monopoly.