626
THE GREEN BAG
are cited Hanley v. Kansas, etc., R. Co., 187 U. S. 617, 23 Sup. Ct. 214, 47 L. Ed. 3,33; Lord v. Steamship Co., 102 U. S. 541, 26 L. Ed. 224; Pacific Coast Steamship Co. v. Railroad Com missioners (C. C), 9 Sawy. 253, 18 Fed. 10. The court says that the case of Lehigh Valley R. Co. v. Pennsylvania, 145 U. S. 192, 12 Sup. Ct. 806, 36 L. Ed. 672, upon the authority of which the case of United States ex rel. Kellogg v. Lehigh Valley R. Co. (D. C), 115 Fed. 373, and similar cases have been decided, was a case of a tax imposed by the state upon the receipts in the proportion of the amount of the transportation within the state, and observes that the United States Supreme Court in the Hanley case dis tinguishes it upon this ground and holds that those cases, which out of deference to the Lehigh Valley case have held that transportation of merchandise from one point in a state through other states to another point in the same state was not interstate commerce, carried its conclu sions too far. Aside from the authorities cited, the court is of the opinion that on principle the shipment was interstate commerce. To fortify this position, the court says: " The defendant's road passes through New Jersey, Pennsylvania, and New York. Neither of those states alone could regulate the transportation of merchandise over any part of the line except that which was situated within that state. Transportation upon such a road, therefore, cannot be efficiently regulated at all unless it is regulated by the United States. It is true that if the United States government has authority to regulate the trans portation of merchandise between New York and Buffalo on the Lackawanna, the Erie, and the Lehigh Valley roads, and not upon the New York Central there is a possibility that the New York Central road might obtain undue advantages in competition with the other three roads mentioned. On the other hand, if the government has not the power to regulate such transportation on the three roads first mentioned, and the state of New York should regulate transportation on the New York Central, between points in the state of New York, it would be possible for the three roads mentioned to obtain undue advantage over the Central to a still greater extent. There is a possibility of some discrimination under any theory, but I think that the simplest theory is that as soon as mer chandise is carried from one state to another it becomes interstate commerce." At one time it seemed to be decided that a car riage from one terminus within a state through another state to a terminus within the same state did not constitute interstate commerce since there was no interchange of commodities between states
involved. But since the Hanley case supra it has been regarded as settled, that interstate commerce is found wherever there is carriage across state boundaries. As an original question it may be that the former view was the sounder, but it is not well to litigate the matter any longer, but to accept the present plan. B. W. CARRIERS. (Interstate Commerce.) U. S., S. C. — In Adams Express Company v. Com monwealth of Kentucky 27 Sup. Ct. Rep. 606. the United States Supreme Court takes the position that an agreement by a local agent of an express company to hold for a few days a C. O. D. inter state shipment of intoxicating liquors, to suit the convenience of the consignee in paying for such liquors and taking it away, does not destroy the character of the transaction as interstate com merce, so as to render the express company amenable to prosecution for violating a state local option law. This decision is based on the recent case of Heymann v. Southern R. Co., 203 U. S. 270, 27 Sup. Ct. 104, and by it the Supreme Court reverses the decision of the Kentucky Court of Appeals to the contrary in 27 Ky. Law, Rep. 1096, 87 S. W. mi. CARRIERS. (Reasonableness of Rates.) U. S. Sup. Ct. — In determining the reasonableness of railroad rates, expenditures for permanent improvements and equipment should not be charged to the current or operating expenses of a single year, according to the recent decision of the United States Supreme Court in Illinois Central Railroad Company v. Interstate Commerce Com mission, 27 Sup. Ct. Rep. 700, 51 Lawyers' Edition 3. The court is of the opinion that such expenditures should be reimbursed by all of the traffic they accomodate during the period of their duration and not by the revenue of a single year. In this connection, the court distinguishes the case of Union Pacific R. Co. v. United States, 99 U. S. 402, 25 L. Ed. 274. That case was con cerned with the construction of the words " net earnings" in an act of Congress under which five per cent of the net earnings of the Union Pacific were to be applied annually to the loan by the government to the railroad. For the ultimate payment of the loan it was to the advantage of the United States to have the earnings of the com pany applied to permanent improvements and equipment. The debt to the government had to be paid and the value of the railroad property was enhanced by the permanent improvements. Along with that, the general security of the government for the ultimate payment of the debt was also proportionately increased. A clear decision such as this is upon a funda mental point marks distinct advance in the grow
