§ 181. Allowances to Industrial Tracks.-Except for the proviso of the commodities clause which excepts from its provisions "timber and the manufactured products thereof," the principles applicable to allowances to industrial railroads are similar to those applicable to divisions to tap-line roads. In the first Industrial Railways case,' 152 the Commission said: "The allowances are made to the industries or to their subsidiary railways in the form of (a) divisions out of the rate, (b) per diem reclaims, (c) remission of demurrage and (d) furnace allowances." It was held that these various allowances depleted the revenues of the carriers and were generally unlawful. Following the decision of the Supreme Court in the Tap-Line cases, the Commission modified its holding, saying:153 "Since the Supreme Court decided the tap-line cases, we have given effect to the court's decision by fixing the maximum divisions of rates or switching allowances which the tap-line roads may receive from the trunk-line carriers. Since that time we have also decided In re Joint Rates with the Birmingham Southern R. R. Co., 32 I. C. C. 110, and the Manufacturers Railway Case, 32 I. C. C. 100, giving effect in each instance, under the facts there found, to the principles announced by the Supreme Court. The General Electric Company case, supra, the Solvay Process Company case, supra, and the Crane Iron Works case, 17 I. C. C. 514, were decided upon the facts, circumstances, and conditions appearing in connection with each. Those cases, however, differed from the tap-line cases and from the instant case in that in each of the former cases the industrial railway, or the industrial corporation which in fact owned it, sought to have us require the trunk-line roads to accord the industrial roads allowances or divisions which the trunk-line roads were unwilling to accord and which they contended would be unlawful." by Tap Lines, 53 I. C. C. 656; New 152 Industrial Railways Case, 29 I. C. C. 212. 153 Industrial Railways Case, 32 I. C. C. 129, 131; and see Manufacturer's Railway Case, 32 I. C. C. 100; General Electric Co. v. N. Y. C. & H. R. R. Co., 14 I. C. C. 237; Solvay Process Co. v. D. L. & W. R. Co., 14 I. C. C. 246. The Supreme Court referred to the distinction drawn by the Commission between "allowances" and "absorptions" as "abstruse," and stated that when applied to tap lines and industrial roads these words and "divisions" mean essentially the same thing.154 By whatever name called, they may not be prohibited by the Commission, but they must be reasonable and free from unlawful discrimination, and they could probably, when not included in the rates charged, be withdrawn by the carriers. Mr. Commissioner Harlan for years advocated plans under which many of the accessorial services performed or paid for by the carriers would have been discontinued; or, if continued, paid for in addition to the regular rates. That, under the law, the carriers could adopt such plans is free from doubt. Whether the change should be made is an economic question. The Commission may not compel the adoption of the plans, unless, perhaps, under its augmented power derived from the Transportation Act, 1920, to safeguard the revenues of the carriers, but it can prevent unlawful discrimination and improper payments.155 § 182. Illegal for Carriers to Transport Commodities Produced or Owned by Them or in Which They Are Interested.The ownership or control by carriers of a particular commodity gives such carriers an opportunity to transport such commodity and sell it at less than can its competitors who have no means of transportation and must pay the carrier to transport their commodity of like kind. The carrier could do this, because it could forego some of the rate its competitor was compelled to pay and, therefore, undersell such competitor. This evil was prevalent and the Commission had sought to remedy it so far as it could with the limited power it had in this respect before the passage of the Hepburn Amendment. Prior to the passage of the Amendment containing this clause, the Interstate Commerce Commission 154 Manufacturers R. Co. v. United States, 246 U. S. 457, 482; 62 L. Ed. 831, 844, 38 Sup. Ct. 383. 155 Car-Ferry Allowances, 32 I. C. C. 578; St. Louis Terminal Case, 34 I. C. C. 453; Second Industrial Railways Case, 34 I. C. C. 596, and cases there cited; Five Per Cent Case, 31 I. C. C. 351, 408, 409; Mitchell Coal & Coke Co. v. P. R. R. Co., 38 I. C. C. 40; Westport Stone Co., Second Industrial Case, 38 I. C. C. 316; National Tube Co. v. Lake Ter. R. Co., 56. I. C. C. 272 and cases there cited. brought its bill seeking to enjoin a contract described in the allegation as follows:156 "In the spring of 1903 the Chesapeake & Ohio made a verbal agreement with the New Haven to sell to that road 60,000 tons of coal, to be carried from the Kanawha district to Newport News, and thence by water to Connecticut, for delivery to the buyer at $2.75 per ton, and that a considerable portion had already been delivered and the remainder was in process of delivery. It was averred that the price of the coal at the mines where the Chesapeake & Ohio bought it, and the cost of transportation from Newport News to Connecticut, would aggregate $2.47 per ton, thus leaving to the Chesapeake & Ohio only about 28 cents a ton for carrying the coal from the Kanawha district to Newport News, whilst the published tariff for like carriage from the same district was $1.45 per ton." Upon this allegation, the court formulated the question involved as follows: "The question, therefore, to be decided is this: Has a carrier engaged in interstate commerce the power to contract and sell and transport in completion of the contract the commodity sold, when the price stipulated in the contract does not pay the cost of the purchase, the cost of delivery, and the published freight rates?'' The evils of carriers' engaging in the purchase and sale of commodities transported by them were forcibly pointed out in the course of the opinion. Cases were cited, and the conclusion was to direct the court below to issue a decree "perpetually enjoining the Chesapeake & Ohio from taking less than the rates fixed by its published tariff of freight rates, by means of dealing in the purchase and sale of coal." § 183. Commodities Clause of Act of 1906. It is obvious that the evils pointed out so forcibly by the Supreme Court apply equally where the carrier puts the ownership of the com 156 New York, N. H. & H. R. Co. v. Int. Com. Com., 200 U. S. 361, 50 L. Ed. 515, 26 Sup. Ct. 272. modity in a corporation in which the carrier owns all the stock, and that the difference is only in degree and not in kind where the carrier has only a part of the stock in the corporation owning the commodity. Congress, by virtue of its plenary power to regulate interstate commerce, sought to prevent these evils, and the prohibition was made to apply where the carrier had an interest, direct or indirect, in the commodity transported. This clause the Circuit Court held unconstitutional but the Supreme Court, upon appeal, held the provision valid157 as construed. This construction is as follows: "We then construe the statute as prohibiting a railroad company engaged in interstate commerce from transporting in such commerce articles or commodities under the following circumstances and conditions: (a) When the article or commodity has been manufactured, mined or produced by a carrier or under its authority, and at the time of transportation the carrier has not in good faith before the act of transportation dissociated itself from such article or commodity; (b) When the carrier owns the article or commodity to be transported in whole or in part; (c) When the carrier at the time of transportation has an interest, direct or indirect, in a legal or equitable sense in the article or commodity, not including, therefore, articles or commodities manufactured, mined, produced or owned, etc., by a bona fide corporation in which the railroad company is a stockholder." "In my judgment the act, reasonably and properly construed, according to its language, includes within its prohibitions a railroad company transporting coal, if, at the time, it is the owner, legally or equitably, of stock-certainly, if it owns a majority or all the stock-in the company which mined, manufactured or produced, and then owns, the coal which is being transported by such railroad company. Any other view of the act will enable the transporting railroad company, by one device or another, to defeat altogether the purpose which Congress had in view, which was to divorce, in a real, substantial sense, production and transportation, 157 United States v. Delaware & H. Co., 213 U. S. 366, 415, 53 L. Ed. 836, 29 Sup. Ct. 527. For opinion of lower court, see 164 Fed. 215. and thereby to prevent the transporting company from doing injustice to other owners of coal." In construing the clause when brought before it the second time, the Supreme Court held that when the carrier so exercised its power as a stockholder in a corporation owning the commodity as to deprive such corporation of actual independent existence, the commodities so owned were within the prohibition of the law.158 When a carrier organized a coal company to which its coal properties were leased and, although the stock of the company so organized was not owned by the carrier, such company was, in substance, controlled by the carrier, it was held that the commodities clause was violated.159 § 184. Cars Must Be Furnished Without Discrimination.— Transportation includes in its meaning "cars," and Section 1 of the Act provides: "Cars shall be furnished irrespective of ownership or any contract, express or implied, for the use thereof." It, therefore, is the duty of the carriers subject to the Act to furnish cars without any unlawful preference. In the Pitcairn Coal case,160 the Circuit Court of Appeals prescribed rules for coal car distribution. The Supreme Court, however, held that the courts had no jurisdiction prior to action by the Interstate Commerce Commission, and the lower court was reversed. The Supreme Court said: "The distribution to shippers of coal cars including those owned by the shippers and those used by the carrier for its own fuel is a matter involving preference and discrimination and within the competency of the Interstate Commerce Commission, and the courts cannot interfere with regulations in regard to such discriminations until after action thereon by the commission. ''161 158 United States v. Lehigh Valley R. Co., 220 U. S. 257, 55 L. Ed. 458, 31 Sup. Ct. 387. 159 Post, Sec. 410; U. S. v. Delaware, L. & W. R. Co., 238 U. S. 516, 59 L. Ed. 1438, 35 Sup. Ct. 873. For further history of the litigation re lating to this clause, see U. S. v. L. V. R. Co., 225 Fed. 399. 160 United States ex rel. Pitcairn Coal Co. v. Baltimore & O. R. Co., 165 Fed. 113. 161 Baltimore & O. R. Co. v. United States, 215 U. S. 481, 54 L. Ed. 292, |