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Lusk v. Atkinson,

The question, therefore, to be decided is whether or not the facts, as we have heretofore found them to be, entitled the defendat carrier to charge for the ties transported to Commerce, Missouri, the interstate rate for that portion of such ties which were afterwards forwarded by the shipper in fulfillment of his previous contracts with the foreign buyers? This question must be determined by the law as expounded by the Supreme Court of the United States, to which we will now recur.

A leading case is So. Pac. Term. Co. v. Interstate Commerce Comm., 219 U. S. 498. The controversy was whether the Federal board had jurisdiction to regulate the charges of a terminal company at Galveston, Texas, which had leased a wharf to one shipper upon terms that enabled him to get an advantage over other shippers who were required to pay certain charges for wharfing privileges. The Interstate Commerce Commission ordered the wharf owner to cease giving such preference. The use to which the wharf was put was to receive cotton-seed cake purchased by the lessees, which was ground into meal on the wharf and then put in sacks and exported to fill certain present and future contracts. The bill to enjoin the order of the commission was dismissed, and an appeal taken to the Supreme Court of the United States, where it was held: First, that the Terminal system owning the wharf was a link in transportation and thus became subject to the jurisdiction of the Interstate Commerce Commission; second, that the fact that the favored shipper caused these products to be billed to his own order from interior points in the State of Texas to the city of Galveston in the same State, and after receiving them there, unloaded them and changed their form from cotton-seed cake by grinding it into cotton-seed meal, and then sacked the meal and shipped the sacks to fill foreign orders did not make the transportation to Galveston from the initial point in Texas, intrastate commerce; but that such shipments became interstate commerce when they

Lusk v. Atkinson.

were delivered in the form of cotton-seed cake to the initial carrier in the interior of the State.

Again, in Ohio Railroad Comm. v. Worthington, 225 U. S. 1. c. 107, the suit was to enjoin the State commission of Ohio from fixing rates for the shipment of coal from interior points in that State to its lake ports under billings to the shippers' orders. The court in its findings of facts, recited, to-wit:

"There is testimony to the effect that when the coal leaves the mines it is not known in what vessel it will be loaded nor to what particular ultimate destination it will go, and that sometimes such coal is sold and vessels arranged for after the coal is at Huron, but it is subject to demurrage charge if it remains on the cars beyond a specified time.

"All coal thus loaded in vessels is, and must practically be, carried to points in other States-or to Canada. The lake ports in Ohio receive coal by rail from interior points, but not by boat from other Ohio ports. It might be that a quantity of coal, so small as to be negligible, is unloaded on one of the Ohio islands in Lake Erie, but no substantial importance is claimed for this circumstance nor could be given to it.'

"This finding of fact was practically approved and adopted in the Circuit Court of Appeals, and we have no occasion to dissent from its correctness.

"The question thus presented is: Was the Railroad Commission of Ohio authorized to put in force the rate in question as to lake cargo coal? It is not necessary to review the cases in this court which have settled beyond peradventure that the National Government has exclusive authority to regulate interstate commerce under the Constitution of the United States; nor to do more than reaffirm the equally well settled proposition that over interstate commerce transportation rates the State has no jurisdiction and that an attempt to regulate such rates by the State or under its author

Lusk v. Atkinson.

ity is void. [Louisville & Nashville Railroad Company v. Eubank, 184 U. S. 27.]

"And an order by a state commission under assumed authority of the State, which directly burdens or regulates interstate commerce, will be enjoined. [McNeill v. Southern Railway Company, 202 U. S. 543.]

"The question is, then, one of fact. Does the transportation which the rate prescribed by the Railroad Commission of Ohio covers, constitute interstate commerce?

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"It is contended that this transportation of the coal under the rate fixed by the Railroad Commission is not within the power and authority of the Interstate Commerce Commission under section 1 of the Act to Regulate Commerce, which makes the provisions of the act inapplicable to the transportation of property wholly within one state, and not shipped to or from a foreign country from or to a state or territory; and, furthermore, that a transportation of the character here in question is only within the jurisdiction of the Interstate Commerce Commission when it is a transportation partly by railroad and partly by water when both are used under a common control, management or arrangement for a continuous carriage or shipment; and therefore that the subject-matter in question is left within the state jurisdiction. On the other hand, it is contended that this transportation is within the jurisdiction of the commission under the Act to Regulate Commerce. It is enough to now hold, as we do, that the establishing of the rate in question is an attempt to regulate interstate commerce and is therefore beyond the power of the state or a commission assuming to act under its authority.

"We therefore reach the conclusion that under the facts shown in this case the Railroad Commission, in fixing the rate of seventy cents for the transportation above described, attempted to directly regulate and control interstate commerce, and, for that reason, the

Lusk v. Atkinson,

enforcement of its order should be enjoined." (Italics ours.)

Next comes the case of Texas & N. O. Railroad v. Sabine Tram Co., 227 U. S. 1. c. 119, where the only question was whether the shipment of lumber from Ruliff to Sabine (both points of Texas) to shipper's order, but subsequently exported, was interstate commerce, and hence not subject to a state rate. The modified finding of facts contained the following:

"Powell & Company purchased lumber from other mills in Texas, with which to supply its said sales in part; it did not know when any particular car or stick of it left Ruliff, into which ship or to what particular destination it would ultimately go, or on which sale it would be applied; this not being found out until its agent, Flannagan, inspected the invoice mailed to and received by him after shipment. Upon inspection of the invoice he determined from the character of the lumber described whether it was suited for one cargo or the other.'" (Italics ours).

The court said upon these facts, to-wit (1. c. 126): "The determining circumstance is that the shipment of the lumber to Sabine was but a step in its transportation to its real and ultimate destination in foreign countries. In other words, the essential character of the commerce, not its mere accidents, should determine. It was to supply the demand of foreign countries that the lumber was purchased, manufactured and shipped, and to give it a various character by the steps in its transportation would be extremely artificial. Once admit the principle and means will be afforded of evading the national control of foreign commerce from points in the interior of a state. There must be transshipment at the seaboard, and if that may be made the point of ultimate destination by the device of separate bills of lading, the commerce will be given local character, though it be essentially foreign."

Lusk v. Atkinson.

A judgment for the difference between the State rates and that fixed by the Interstate Commerce Commission was reversed, the court saying (1. c. 130):

"Nor, as we have seen, did the absence of a definite foreign destination alter the character of the shipments. Judgment reversed and case remanded for further proceedings not inconsistent with this opinion."

In the case of Louisiana R. R. Comm. v. Tex. & Pac. Ry. Co., 229 U. S. 1. c. 341, the foregoing cases are quoted and approved, and it is said:

"In those cases there was necessarily a local movement of freight, and it necessarily terminated at the seaboard. But it was decided that its character and continuity as a movement in foreign commerce did not terminate, nor was it affected by being transported on local bills of lading. The principle enunciated in the cases was that it is the essential character of the commerce, not the accident of local or through bills of lading, which determines Federal or State control over it. And it takes character as interstate or foreign commerce when it is actually started in the course of transportation to another state or to a foreign country. The facts of the case at bar bring it within the ruling." (Italics ours).

Also, in the case of Chi., M. & St. P. Ry. v. Iowa, 233 U. S. 1. c. 343, the question arose upon a shipment into Davenport, Iowa, of coal purchased in Illinois. The consignee was a coal dealer, and Davenport, Iowa, was his selling and distributing point. None of this coal was sold prior to its arrival. On that point the finding of the commission and the State Supreme Court was adopted by the Supreme Court of the United States, and was to-wit:

"The coal was under the control of the consignee and he could sell it in transit or at Davenport or reconsign it to a point on respondent's railway, or any other railway, at his own discretion." "

The court (Supreme Court of Iowa) said:

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