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Syllabus.

234 U.S.

THE PIPE LINE CASES.1

APPEALS FROM THE UNITED STATES COMMERCE COURT.

Nos. 481, 482, 483, 506, 507, 508. Argued October 15, 16, 1913.-Decided June 22, 1914.

The provision in the Hepburn Act, amending the Act to Regulate Commerce by making persons or corporations engaged in transporting oil from one State to another by pipe lines carriers within the provisions of the act, applies to the combination of pipe lines owned and controlled by the Standard Oil Company and to the constituent corporations united in a single line, although the only oil transported is that which has been purchased by the Standard Oil Company or by such constituent corporations prior to the transportation thereof. As applied to existing corporations, the pipe line provision of the Hepburn Act does not compel persons engaged in interstate transportation of oil to continue in operation, but it does require them not to continue to transport oil for others or purchased by themselves except as common carriers.

The fact that the article transported between interstate points has been purchased by the carrier, is not conclusive against the transportation being interstate commerce; and in this case, held that interstate transportation of oil purchased from the producers by the owner of the pipe is interstate commerce and under the control of Congress.

While the control of Congress over commerce among the States cannot be made a means of exercising powers not committed to it by the Constitution, it may require those who are common carriers in substance to become so in form.

The provision in the Hepburn Act requiring persons or corporations engaged in interstate transportation of oil by pipe lines to become common carriers and subject to the provisions of the Act to Regulate Commerce is not unconstitutional, either as to future pipe lines or as to the owners of existing pipe lines, as depriving them of their property without due process of law.

1 Docket title of these cases: No. 481. United States v. Ohio Oil Company. No. 482. United States v. Standard Oil Company. No. 483. United States v. Standard Oil Company of Louisiana. No. 506. United States v. Prairie Oil & Gas Company. No. 507. United States v. Uncle Sam Oil Company. No. 508. United States v. Benson, doing business under the Partnership Name of Tide Water Pipe Company, Limited.

234 U. S. Argument for Interstate Commerce Commission.

Requiring a person engaged in interstate transportation of oil by pipe lines to become a common carrier does not involve a taking of private property, and the provision in the Hepburn Act to that effect is not unconstitutional under the Fifth Amendment.

A corporation engaged in refining oil may draw oil from its own wells through a pipe line across a state line to its own refinery for its own use without being a common carrier under the pipe line provisions of the Hepburn Act, the transportation being merely incidental to the use of the oil at the end.

204 Fed. Rep. 798, reversed in part and affirmed in part.

THE facts, which involve the constitutionality, construction and application of the provisions in the Hepburn Act relating to interstate transportation of oil by pipe lines, are stated in the opinion.

The Solicitor General for the United States and Mr. Charles W. Needham for the Interstate Commerce Commission:

The pipe line amendment applies to these petitioners. Congress intended the act to apply to every interstate oil-carrying pipe line, and to compel every such interstate pipe line to become a common carrier as a condition precedent to engaging in interstate commerce. Whether any particular pipe line had or had not been a common carrier prior to the passage of the act is wholly immaterial.

The debates in Congress may be consulted to ascertain the evils at which the act was aimed, its legislative history, the amendments that were offered and rejected during its passage and the general history of the times. Am. Net. Co. v. Worthington, 141 U. S. 468, 473; Binns v. United States, 194 U. S. 486, 495, 496; Blake v. National Bank, 23 Wall. 307, 319; Holy Trinity Church v. United States, 143 U. S. 457, 465; Jennison v. Kirk, 98 U. S. 453.

Here the debates show that the evil aimed at was the monopolization of the oil business by owners of private pipe lines. Amendments restricting the application of the act to pipe lines engaged in transportation "for hire" or

Argument for Interstate Commerce Commission. 234 U. S.

"for the public" were repeatedly rejected. 40 Cong. Rec. 6361, 6365, 6999-7009, 9254-9256.

The rule of construction followed in the Commodities Case, 213 U. S. 366, is not applicable here. That rule applies only when the statute is ambiguous. Employers' Liability Cases, 207 U. S. 463, 500.

The act is constitutional. It stands the test laid down in Minnesota v. Barber, 136 U. S. 313, 320; C., B. & Q. Ry. v. Drainage Commissioners, 200 U. S. 561, 592; McCulloch v. Maryland, 4 Wheat. 421, namely, that:

The object of the act is one for which the Federal authority may properly be exercised.

The means employed have in fact a real and substantial relation to the object sought. They are reasonable and not arbitrary or beyond the necessities of the case.

The object of the pipe line amendment, to regulate interstate commerce in oil by protecting well owners and independent refiners from duress by pipe line owners is one for which the authority of Congress may properly be exercised. Standard Oil Co. v. United States, 221 U. S. 1; Waters-Pierce Oil Co. v. Texas, 212 U. S. 86, 109; Central Lumber Co. v. South Dakota, 226 U. S. 157; Continental Paper Co. v. Voight, 212 U. S. 227, 271.

The private operation of pipe lines carrying oil in interstate commerce tends to monopoly. Standard Oil Case, 221 U. S. 1, 12, 42, 80-81; Tex. & Pac. Ry. Co. v. Int. Com. Comm., 162 U. S. 197, 210; Report on the Petroleum Transportation, 59 Cong., 1st Sess., House Doc. 812, pp. 29, 37, 62; Report of Int. Com. Comm., 59 Cong., 2d Sess., House Doc. 606, pp. 2, 5, 6,

14.

No other means of transportation can possibly compete with pipe lines. If a well owner cannot ship by pipe line he cannot (practically) ship at all. Without a pipe line the small producer is as truly shut in as was the mine owner in Strickley v. Highland Boy Mining Co., 200 U. S. 597, or the arid land owner in Clark v. Nash, 198 U. S. 361. Ohio

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

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