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Lusk v. Atkinson.

"That the facts showed that the coal was originally consigned to the coal company in Davenport, that it was there held until sales were made, and that the consignee had taken delivery, paying the freight to the initial carrier and assuming full control. [152 Iowa, 317, 319.]" (Italics ours).

Upon these facts all future sales and deliveries in Iowa were held to be intrastate dealing by the local commission and the State courts. As to which the Supreme Court of the United States said, to-wit:

"The record discloses no ground for assailing this finding. It is undoubtedly true that the question whether commerce is interstate or intrastate must be determined by the essential character of the commerce and not by mere billing or forms of contract."

This ruling was a full recognition and affirmance of all the foregoing cases cited in support of the above statement of the rule, but the facts in the latter case demanded a converse application of the rule, for as shown above, the facts were that the consignee in Davenport, Iowa, had never sold nor contracted to sell any of the coal which he imported to that point from the coal fields of Illinois, but simply caused it to be brought to himself in Davenport for future sale. He paid the freight in full and took possession of the coal after it arrived in Davenport. This necessarily ended its interstate transit. He thereafter, as owner of the property, made sales of it to certain other localities in Iowa, and in fulfilling these latter sales, the transaction in the strictest sense of the term, was an intrastate one. Had these shipments been made to Davenport for the purpose of fulfilling previous sales of the coal by the consignee to buyers at other points in Iowa, the transaction in question would have been an interstate commerce one from the beginning point in Illinois until the coal reached its ultimate destination in Iowa, and the break in the journey at Davenport would not, in any respect,

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Lusk v. Atkinson.

have affected its character as interstate commerce. This is demonstrated by the above ruling which affirmed and cited all the previous rulings of the Supreme Court of the United States to that effect.

As to the complete immunity of interstate commerce from even the indirect effect of competitive state rates, an advanced ruling is expressed by the opinion of the Supreme Court of the United States (Mr. Justice HUGHES) in Houston, E. & W. Tex. Ry. v. United States and Tex. & Pac. Ry. v. U. S., 234 U. S. 342, 1. c. 353. It is there held that the paramount power of Congress to control interstate commerce extends through its agency (the Interstate Commerce Commission) to the control of intrastate transactions of interstate carriers, where that is necessary to protect interstate commerce. Said the court:

"We find no reason to doubt that Congress is entitled to keep the highways of interstate communication open to interstate traffic upon fair and equal terms. That an unjust discrimination in the rates of a common carrier, by which one person or locality is unduly favored as against another under substantially similar conditions of traffic, constitutes an evil, is undeniable; and where this evil consists in the action of an interstate carrier in unreasonably discriminating against interstate traffic over its line, the authority of Congress to prevent it is equally clear. It is immaterial, so far as the protecting power of Congress is concerned, that the discrimination arises from intrastate rates as compared with interstate rates. The use of the instrument of interstate commerce in a discriminatory manner so as to inflict injury upon that commerce, or some part thereof, furnishes abundant ground for Federal intervention. Nor can the attempted exercise of state authority alter the matter, where Congress has acted, for a state may not authorize the carrier to do that which Congress is entitled to forbid and has forbidden."

Lusk v. Atkinson.

The point for decision in that case arose out of the fact that there was a sharp competition between the city of Shreveport, Louisiana, and certain cities in the interior of Texas, for the business of certain towns lying between the two competing points. The Interstate Commerce Commission has fixed the rates from Shrèveport, Louisiana, to the competitive points. The Texas law had fixed an intrastate rate which permitted the carriage of similar products from other cities in Texas the same distance as Shreveport from the competitive points, at a lower rate than that fixed by the Federal board. Thereupon the latter (Interstate Commerce Commission) required the railroads using the lower state rate to equalize their charges, and to desist from discrimination resulting from using the local state rate. The Supreme Court affirmed the validity of that order in the following language:

"It is also clear that, in removing the injurious discriminations against interstate traffic arising from the relation of intrastate to interstate rates, Congress is not bound to reduce the latter below what it may deem. to be a proper standard, fair to the carrier and to the public. Otherwise, it could prevent the injury to interstate commerce only by the sacrifice of its judgment as to interstate rates. Congress is entitled to maintain its own standard as to these rates, and to forbid any discriminatory action by interstate carriers which will obstruct the freedom of movement of interstate traffic over their lines in accordance with the terms it establishes.

"Having this power, Congress could provide for its execution through the aid of a subordinate body; and we conclude that the order of the commission now in question cannot be held invalid upon the ground that it exceeded the authority which Congress could lawfully confer."

It was accordingly ruled that the order of the commission requiring in substance the discriminating rail

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Lusk v. Atkinson.

road to charge a higher rate for intrastate carriage than fixed by the local statute, thereby ceasing its discrimination against Shreveport, Louisiana, should be obeyed. To the same effect: Railroad v. United States, 205 Fed. 380 and 391; Intermountain Rate Cases, 234 U. S. 476. The decision of the Supreme Court in the Shreveport case, and its previous ruling in the Minnesota Rate Cases, 230 U. S. 1. c. 433, have been made the theme of a learned discussion of the evolution of the law under the commerce clause of the Constitution. The writer analyzes all the decisions from Gibbons v. Ogden, 9 Wheat. 1. c. 222, to the cases cited. [Harvard Law Review, Nov. 1914, page 34 et seq.] This article is accurate and instructive in its historical review, though critical in commenting on the decisions in Minnesota Rate Cases and the Shreveport case, supra. These decisions, however, are the final word on the subject of the power of Congress under the commerce clause of the Constitution and are but the corollaries of the rulings in the Minnesota Rate Cases, to-wit:

First. "The grant in the Constitution of its own force, that is, without action by Congress, established the essential immunity of interstate commercial intercourse from the direct control of the states with respect to those subjects embraced within the grant which are of such a nature as to demand that, if regulated at all, their regulation should be prescribed by a single authority. It has repeatedly been declared by this court that as to those subjects which require a general system or uniformity of regulation, the power of Congress is exclusive."

Second. "In other matters, admitting of diversity of treatment according to the special requirements of local conditions, the states may act within their respective jurisdictions until Congress sees fit to act; and, when Congress does act, the exercise of its authority overrides all conflicting state legislation.

Lusk v. Atkinson.

Third. "The principle which determines this classification, underlies the doctrine that the states cannot under any guise impose direct burdens upon interstate commerce. For this is but to hold that the states are not permitted directly to regulate or restrain that which from its nature should be under the control of the one authority and be free from restriction save as it is governed in the manner that the national legislature constitutionally ordains." [Minn. Rate Cases, 230 U. S. 1. c. 400.]

Fourth. Subject to the above limitations, "the completely internal commerce of a state then may be considered as reserved for the state itself." [Gibbons v. Ogden, 9 Wheat. I. c. 195.]

The foregoing rulings may be condensed, to-wit:

1. As to those subjects of interstate commerce which require a general system or uniformity of regulation, the power of Congress is exclusive whether exercised or not. This exclusive power results from the mere grant in the Constitution.

2. As to those subjects which do not fall in this class but owing to local conditions may be regulated by two authorities, the states may act until Congress does, but when Congress acts it obliterates all state legislation on the subject. In these cases the power of Congress becomes exclusive only when exerted.

3. The reason for this distinction is that interstate commerce proper, requiring for its protection singleness of regulation, if regulated at all, must be regulated by that authority (Congress) to which the Constitution has granted the power.

4. As to subjects purely local and whose regulation does not directly or indirectly affect interstate traffic, full power to deal with them is reserved to the several states.

Applying the foregoing decisions to the facts in this case, the sole question presented is: what was the "essential character" of the shipments of ties over de

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