254 F. 335 | D.N.J. | 1918
As the indictments in these cases are in all material respects the same, as are also the questions which the demurrers to each raise (at least so far as the points relied upon at the argument are concerned), the demurrers were argued together, and the decision herein announced will apply to all of the cases. The indictments are based on alleged violations of section 1 of the Act of February 19, 1903, c. 708, 32 Stat. 847, commonly known as the El-kins Act, as the same was amended by the Act of June 29, 1906, c. 3591, § 2, 34 Stat. 587, commonly known as the Hepburn Act (8 U. S. Comp. St. 1916, § 8597). All are alike in form, and each contains several counts.
A summary of the first count of the indictment against the defendant Crouse will suffice to illustrate what all set forth. It alleges, in substance, that on January 24, 1918, the Pennsylvania Railroad Company was a common carrier, engaged in interstate commerce, and subject to the various acts to regulate commerce; that on that date, “under the authorization” of the Director General of Railroads, who had theretofore been appointed as such by the President, when the latter, on December 28, 1917, took possession of the railroad systems of the country, and “upon the recommendation of the Regional Director, said Pennsylvania Railroad Company,” because of the extremely severe weather, particularly affecting the operation of railroads crossing the Allegheny Mountains, which then prevailed, laid an “embargo against the transportation of property, including, among other things, lumber not constituting war supplies specifically approved by the War Department of the United States,” over certain of its railway routes, including the points mentioned in the indictment; that the defendant, who was engaged in “purchasing, shipping, and selling lumber” at Perth Amboy, in this district, on April 2, 1918, in order to deceive the Pennsylvania. Railroad Company, and obtain transportation over its lines of a carload of lumber from the .state of Virginia, where it was located, to Perth Amboy, in the state of New Jersey, notwithstanding the embargo, caused the lumber to be consigned to “Ira R. Crouse, in care of United States Government Quartermaster, Government Order A-l-1014 U. S. Property G-783-347 at Perth Amboy”; that he thereby caused the railroad company to believe that the lumber consisted of war supplies specifically approved by the War Department, and therefore that the transportation of it was not prohibited by the embargo, and to transport it accordingly, notwithstanding the embargo, although he knew that the lumber was not war supplies specifically
In five of the counts (this likewise applies to all of the indictments) he is charged under the same circumstances with having accepted and received “a concession in respect to the transportation” of lumber, “whereby an advantage was 'given to”’ him. Stated concisely, the charge is that the several defendants, by deceiving the railroad officials as to the character of the shipments, through the device of having lumber fraudulently consigned to themselves in care of various army officers, or directly to the latter, procured its transportation in interstate commerce over the lines of the Pennsylvania Railroad Company, while the embargo was in force, and thus procured transportation service which the embargo forbade, and which in some instances others, de-: siring to ship over the same route of the said Pennsylvania Railroad Company, were unable to procure because of the existence of the embargo, thereby receiving discriminations or concessions in respect to the .transportation of such property in interstate commerce.
The indictments are attacked on numerous grounds, all of which, however, are fairly embraced within the fundamental objections which will hereafter appear. As the acts complained of occurred after the President had taken control of the railroads of the country, pursuant to proclamation of December 26, 1917, the objections may he divided primarily into two classes: (1) Those which are claimed to exist irrespective of any effect which the President’s act may have had on the Interstate Commerce Acts, and the duties and liabilities of the Pennsylvania Railroad and the defendants thereunder; and (2) those based upon changes alleged to have been effected thereby. I will first consider the grounds of demurrer which fall within the first of the before-mentioned classes. Hereinafter, when the Elkins Act is spoken of, it will be understood, unless the contrary is indicated, that that act as it was amended by the Hepburn Act is meant.
By section 10 (Comp. St. 1916, § 8574) a criminal liability was imposed upon any common carrier who should willfully do or cause to be done, or suffer or permit to be done, “any act, matter or thing in this act prohibited or declared to be unlawful, or who shall aid or abet therein,” etc. By the same section, as amended by the Act of March 2, 1889, c. 382, § 2, 25 Stat. 855, it was made a criminal offense for a carrier “by means of false billing, false classification, false weighing or false report of weight, or by any other device or means,”" to knowingly and willfully assist or suffer or permit any person to obtain transportation for property “at less than the regular rates then established,” on the line of transportation of such carrier. The same section, as amended by the act last mentioned, also provided that any one for whom, as “consignor or consignee,” property should be carried by a common carrier, who should knowingly and willfully, “by false billing, false classification, false weighing, false representation of the contents of the package or the substance of the property, false report of weight, false statement, or by any other device or means, whether with or without the consent or connivance of the carrier,” obtain or attempt to obtain transportation for such property “at less than the regular rates then established,” should be guilty of a crime, as should likewise any person who should, “by payment of money or other thing of value, solicitation, or otherwise, induce or attempt to induce any common carrier * * * to discriminate unjustly in his,
It will thus be noted that, while the law made it unlawful and criminal for a carrier to give any unreasonable preference or advantage or to subject .any person to an' unreasonable prejudice or disadvantage in respect to transportation over its lines, and quite comprehensively prohibited and provided penalties for discrimination in the matter of compensation for transportation and from departing from the filed and published tariffs, it did not prohibit tire receipt of discriminations in respect to transportation sendee, strictly speaking, by the shipper, nor make it criminal for him to accept transportation at a less compensation than was charged to others for a like service, or at less than the published tariffs, except when accomplished by false billing or bribery or something akin thereto, mentioned in section 10. In this condition of the law, the Elkins Act, which has been well described as ‘catchall’ provision for any practice by either carrier or shipper which by any device whatever would tend to defeat the purpose of the law” (United States v. Vacuum Oil Co., 153 Fed. 604 [D. C. W. D. N. Y.]), was passed. The provision pertinent to these cases is as follows:
“It stall be unlawful for any person, persons, or corporation to offer, grant, or give, or to solicit, accept, or receive any rebate, concession, or discrimination in respect to the transportation of any property in interstate or foreign commerce by any common carrier subject to said act to regulate commerce and the acts amendatory thereof whereby any such property shall by any device whatever be transported at a less rate than that named in the tariffs published and filed by such carrier, as is required by said act to regulate commerce and the acts amendatory thereof, or whereby any other advantage is given or discrimination is practiced. Every person or corporation, whether carrier or shipper, who shall, knowingly, offer, grant or give, or solicit, accept, or receive any such rebates, concession, or discrimination shall be guilty of a misdemeanor.” Comp. St. 1916, § 8597.
The language used is sufficiently broad and- comprehensive to embrace a discrimination in transportation service, as well as a discrimination in respect to rates. The purpose which Congress had in passing the various acts to regulate commerce has been often stated by the Supreme Court. For instance, Chief Justice White, in New Haven R. R. Co. v. Interstate Com. Com., 200 U. S. 361, 391, 26 Sup. Ct. 272, 277 (50 L. Ed. 515), expressed it as follows:
“It cannot be challenged that the great purpose of the act to regulate commerce, whilst seeking to prevent unjust and unreasonable rates, was to secure equality of rates as to all and to destroy favoritism, * * * and forbidding rebates, preferences and all other forms of undue discrimination. * * * ' If the public purpose which the statute was intended to accomplish be borne in mind, its meaning becomes, if possible, clearer. What was that purpose? It was to compel the carrier as a public agent to give equal treatment to all.”
In Armour Packing Co. v. United States, 209 U. S. 56, 72, 28 Sup. Ct. 428, 432 (52 L. Ed. 681), Mr. Justice Day said:
“The Elkins Act proceeded upon broad lines and was evidently intended to effectuate the purpose of Congress to require that all shippers should be treated alike.”
In Chicago, Indianapolis & Louisville Ry. Co. v. United States, 219 U. S. 487, 496, 31 Sup. Ct. 272, 274 (55 L. Ed. 305), Mr. Justice Harlan said:
"Tile legislative department intended that all wlio obtained transportation on interstate lines should be treated alike In the matter of rates, and that all who availed themselves of the services of the railway company (with certain specified exceptions) should be on a plane of equality.”
And in Louisville & Nashville R. R. Co. v. Mottley, 219 U. S. 467, 478, 31 Sup. Ct. 265, 269 (55 L. Ed. 297, 34 L. R. A. [N. S.] 671), the same distinguished Justice said:
“But the purpose of Congress was to cut up by the roots every form of discrimination, favoritism and inequality.”
In United States v. Union Stockyard, 226 U. S. 286, 307, 33 Sup. Ct. 83, 89 (57 L. Ed. 226), Mr. Justice Day, in referring to the previous decisions of the Supreme Court respecting the purpose of Congress in enacting these laws, said that it was “to require equal treatment of all shippers and to prohibit unjust discrimination in favor of any of them,” and on page 309 of 226 U. S., on page 90 of 33 Sup. Ct. (57 L. Ed. 226), he said:
“It is the object of the Interstate Commerce Law and the I'llkins Act to prevent favoritism by any means or1 device whatsoever a.nd to prohibit practices which run counter to the purpose of the art to place all shippers upon equal terms.”
Similar expressions” in the reported cases could be multiplied, but it would serve no useful purpose to do so. Of course, as happens with almost every piece of remedial legislation, the accomplishment of the end sought was reached by degrees, as the practical operation of the act and the decisions of the courts developed deficiencies, and as one radical change resulted in a further step in advance. Finally in the development of the legislative object the Elkins Ae$ was passed, which, by its language, seems to be all-embracing, and to cover the loopholes which the previous acts left open for discrimination and the exercise of favoritism. It also brought within the prohibition of the law many acts of the shipper which had not theretofore been criminal; thus making the law more effective to accomplish the object sought.
It needs no argument to demonstrate that there is fully as much room for the exercise of favoritism and resulting inequality in the granting or withholding of transportation service or facilities as there is in the matter of compensation to be paid for such service, for as was said by the Interstate Commerce Commission in the matter of The New England Investigation, 27 Interst. Com. Com’n R. 560, 616, “service is often of even greater importance than the rate itself.” This is especially manifest when there exists an embargo, such as the indictments in these cases allege. Hence, bearing in mind that the purpose of Congress in passing the Elkins Act was to utterly eliminate every form or kind of discrimination, favoritism, and inequality, it is quite impossible to believe that when Congress used the broad and compre
The purpose of Congress being ascertained, and it being apparent that to permit discriminations in transportation service would thwart that purpose, and the languagemsed in the act being amply sufficient to embrace such discriminations, it seems to me that the conclusion is irresistible that such a discrimination as is complained of in these indictments is within the criminal provisions of the Elkins Act. Indeed, although he was not passing upon the precise question here under discussion, Mr. Justice Day, in the Armour Packing Co. Case, supra, at page” 74 of 209 U. S., at page 232 of 28 Sup. Ct. (52 L. Ed. 681), said:
“For the penal section is not only aimed at offenses whereby property is transported in interstate commerce at less than published rates, but in terms covers the offering, granting, giving, soliciting, accepting or receiving of rebates, concessions or discriminations, ‘whereby any other advantage is given or discrimination is practiced’ in respect of interstate transportation.”
While the decisions which deal with the right of the government, through the instrumentality of the Interstate Commerce Commission or the courts, to restrain undue discrimination or preference in the matter of transportation facilities or service, such as Interstate Com. Com. v. Ill. Cent R. R. Co., 215 U. S. 452, 30 Sup. Ct. 155, 54 L. Ed. 280, are not dispositive of the question under consideration, which has to do with the criminal provisions of the Elkins Act, they do illustrate the spirit in which the acts have been construed, and demonstrate that any practice which works a discrimination in respect to transportation service is within the general scope of the act. I cannot conceive, therefore, ■ that it can be successfully maintained that Congress, when it used the broad language found in the Elkins Act, did not intend to make it a penal offense to give or receive a discrimination or concession in respect to transportation service or facilities, without regard to whether the same in any way affects the rate or compensation to be paid therefor. This conclusion seems also to be in harmony with the views of Judge Mayer, as expressed in his decision in United States v. Lehigh Valley Ry. Co. et al. (D. C. S. D. N. Y.) 254 Fed. 332.
Bearing in mind the purpose which Congress had in mind in enacting the Elkins Act, as before set forth, and considering, as will be hereafter shown, that a construction such as defendants urge would in many cases defeat that purpose, and further bearing in mind that one of the ways in which it was sought to eliminate all favoritism and inequality of treatment was by visiting criminal punishment on those who would be the beneficiaries thereof, it would be unjustifiable, 1 think, in the absence of language from which it can be clearly found, to attribute to Congress an intention to limit the operation of the act to only such transactions as are consciously participated in by both the shipper and the carrier. Such a construction would free from criminal responsibility both the carrier and the shipper in all those cases where the shipper could, without the knowledge of the carrier, secure advantages and discriminations in transportation service, by means which do not fall within the provisions of section 10 of the Act to Regulate Commerce, as it was amended by the Act of March 2, 1889, c. 382, § 2, 25 Stat. 855, and the Act of June 18, 1910, c. 309, § 10, 36 Stat. 539. The provisions of that section, except as to the acts interdicted in the last paragraph, deal only with the procuring of transportation at less than the established rates. The last paragraph seems clearly to deal only with cases in which the carrier knowingly participates, or in which an attempt is made to secure the discrimination by means which would acquaint the carrier with the object sought. The language of that paragraph is:
“If any * * * person * * * shall, by payment of money or other tiling of value, solicitation, or otherwise, induce or attempt to induce”
—any carrier to discriminate in. its favor. Under the settled rule of construction, the word “otherwise” should be construed to include offenses which are akin to those specifically mentioned; that is to say, bribery and solicitation, both of which would, of course, necessitate acquainting the carrier with the object sought to he accomplished. The use of the word “induce” would also seem to lead to the same conclusion. Hence, section 10, as amended and supplemented, would not cover cases such as these or many others which may be readily imagined. Moreover, if it was intended to cover, by section 1 of the Elkins Act, only the receipt of discriminations which are granted with the carrier’s knowledge, that part of the act was quite unnecessary, because it was for all practical purposes already covered by the last paragraph of section 10 of the Act to Regulate Commerce. It was held by the Circuit Court of Appeals of the Sixth Circuit, in Nichols & Cox Lumber Co. v. United States, 212 Fed. 588, 590, 129 C. C. A. 124, that the amendment made to that section by the Act of June 18, 1910, did not repeal the Elkins Act, because they were aimed at different evils.
It is further urged that the views expressed by Judge Holt in United States v. N. Y. Cent. & H. R. R. Co., 146 Fed. 298, 303 (C. C. S. D. N. Y.), are opposed to those above expressed. It is true that Judge Holt said 'in that case:
“I think that the offense of giving or receiving rebates is such an act. It requires the concurrence of two persons. A rebate cannot be given unless there is some one who agrees to receive it and who does receive it, and cannot be received unless there is some one who agrees to give it and who does give it.”
These remarks may be entirely correct so far as rebates are concerned (and they related only to rebates), because a rebate (a giving back) may very "properly imply a consciousness on the part of the carrier of what it was doing. That may have been the reason for the amendment made to section 10 of the-Act to Regulate Commerce by the Act of June 19, 1910, which prohibits the procuring of refunds by false statements and representations as to value, injury, etc., of property theretofore transported. But because it may be that the giving and acceptance of a rebate requires the conscious participation on the part of the carrier, it does not follow that every discrimination or concession must also require a like participation. My conclusion therefore is that the receipt of a discrimination or concession such as the indictments in this case allege that the defendants received, is made criminal by the provisions of the Elkins Act, irrespective of whether the carrier consciously and knowingly participated therein.
‘Tt cannot bo necessary that others should have known of the partiality anil should have demanded equal treatment. Such concessions are naturally not made generally known.”
Moreover, when the embargo was laid, every person desiring to avail himself of transportation facilities within the area of the embargo had a right to presume that it would be enforced. I do not think, therefore, that it would be necessary, in order to show the receipt of discriminations on the part of the defendants, that others had actually applied lor transportation service similar to that which the defendants received, and had been denied it; it would be sufficient to show the promulgation of the embargo, the desire of the others to ship, the fact that they did not do so, or attempt to do so, by reason of the embargo, and the method by which the defendants procured transportation service in violation of the embargo. 1 think the remarks of Judge Hazel, in United States v. Vacuum Oil Co., 153 Fed. 598, 607 (D. C. W. D. N. Y.), support this view. The indictment in United States v. Hanley, supra, was framed under section 2 of the Act to Regulate Commerce, long before the Klkins Act was passed, and the objection was that it did not allege that the rebate which had been given to the defendant had been denied to others similarly situated. The fact that there were other shippers of lumber, who desired to avail themselves of transportation facilities while the embargo was in force, and who did not do so by reason of the embargo, coupled with the means by which tbe defendants did procure such service, readily distinguishes this case from the Hanley Case.
■ That it was the intention of Congress that the criminal provisions of section 1 should reach consignees under such ^circumstances, is made more manifest when they are read in connection with the last paragraph of that section and section 10 of the Act to Regulate Com
The context of the paragraph in which the words “whether carrier or shipper” are found must not be overlooked. “Every person or corporation, whether carrier or shipper,” who knowingly gives, accepts, etc., are made thereby guilty of a crime. The use of the words “every person” would seem to indicate that Congress never intended to limit the application of that part of the act to only such shippers as occupy the position of consignors. Hence, without attempting to lay down any general rule applicable to all cases, I think that in a case such as these, where the consignees, as is alleged, exercised such direct control over the shipments as enabled them, by their own acts, to- procure for themselves discriminations in respect to transportation service, they are clearly “shippers,” within the meaning of the" act. In such a case the transportation service is really rendered for them, not for the consignors, and they are in reality the shippers. The view above expressed finds direct support in the remarks of Judge Eandis in United States v. Standard Oil Co. (D. C.) 148 Fed. 719, 722, and some support, I think, in that part of the opinion in United States v. Milwaukee Refrigerator Transit Co., 145 Fed. 1007, 1012 (C. C. E. D. Wis.), which deals with the defendant’s contention that the El-kins Act touched only the carrier and the shipper, and not to the part of the opinion which construes the words “parties interested in the traffic,” as it does also in the decision of the Interstate Commerce Commission in St. Louis Terminal Case, 34 Interst. Com. Com’n R. 453, 460, 461.
In the cases at bar the defendants are charged, not with having secured discriminations through or by means of the embargo, but in violation of it; therefore, the reasonableness of the embargo is not in question. There would be nothing for the Interstate Commerce Commission, so far as any action on their part could affect the issues in this case, to pass upon. The distinction between the cases at bar and 'the supposed case is pointed out in Penna. R. R. Co. v. International Coal Co., supra, and in Mitchell Coal Co. v. Penna. R. R. Co., supra, where the two classes of cases are specifically dealt with, and particularly in Penna. R. R. Co. v. Puritan Coal Mining Co., 237 U. S. 121, 131, 35 Sup. Ct. 484, 59 L. Ed. 867, as it is also in Penna. R. R. Co. v. Stineman Coal Co., 242 U. S. 298, 37 Sup. Ct. 118, 61 L. Ed. 316, Penna. R. R. Co. v. Sonman Coal Co., 242 U. S. 121, 37 Sup Ct. 46, 61 L. Ed. 188, and Hocking Valley R. R. Co. v. United States, 210 Fed. 735, 745, 127 C. C. A. 285 (C. C. A. 6th Cir). The right of a carrier to lay embargoes for the proper conduct of its business is not, and I do not think could be successfully, contested. This right, wholly or partially, is recognized in nearly all of the cases last above cited, and especially in the decision of the Interstate Commerce. Commission in Baltimore Chamher of Commerce v. Baltimore & Ohio Railroad, 45 Interst. Com. Com’n R. 40. If the defendants conceived that the embargo was unreasonable, or unjustly discriminatory, so far as they were concerned, they should have applied to the Interstate Commerce Commission for its vacation or modification, as was done in the case last cited, rather than to endeavor to evade it, and thus procure a discrimination over .other shippers who were in the same class as themselves.
“Until and except so far as said director [the Director General of Railroads] shall from time to time otherwise by general or special orders determine, such systems of transportation shall remain subject to all existing statutes and orders of! the Interstate Commerce Commission”
—and that by section 10 of the subsequent Act of Congress of 'March 21, 1918, c. 25, commonly known as the Federal Control Act, it was provided :
“That carriers while under federal control shall be subject to all laws and liabilities as common carriers, whether arising under state or federal laws 1 or at common law, except in so far as may be inconsistent with the provisions of this act or any other act applicable to such federal control or with any order of the President.”
There was no express provision in the before-mentioned Act of August 29, 1917, repealing, suspending or providing for the suspension of any of the Interstate Commerce Acts; therefore, if that act did bring about or authorized any such suspension (which I do not attempt to decide), it would have to be implied from the fact that control by the President would be inconsistent with all or some of the provisions of the Interstate Commerce Acts. However, it is clear that the President did not consider that his control was thus inconsistent, because, as appears from the above-quoted extract from his proclamation, he specifically provided that the railroads should remain suhject to all existing statutes and orders of the Interstate Commerce Commission until the Director General of Railroads should, by general or special order, otherwise provide. To the same effect is (he subsequent Act of Congress of March 21, 1918. I do not think that it needs any argument to demonstrate that if the official to whom the law committed the possession and control of the railroads did not deem such possession and control, except as occasion might arise thereafter, so inconsistent with the Interstate Commerce Acts as. to necessitate a suspension of them, that any court would be justified in holding to the contrary. Especially is that true when Congress by its later act, in effect gave the same interpretation, as I think it did, to its prior act. If it be assumed that the President could, by special or general order, under either of the Federal Control Acts, authorize discriminations in transportation serv
It may be readily conceded that the act, by virtue of which the President first assumed control, was passed pursuant to the “war power” of Congress (article 1, § 8, pars. 11, 12, 13, of the Constitution), as defendants contend; but that in no way affects these cases, because tire provisions of the Interstate Commerce Acts, pertinent to them, were, at the time the offenses are alleged to have been committed, in full force and effect, as I have heretofore found. The embargo was not, as some of the counsel for the defendants seemed to assume, promulgated “under the war power of .Congress.” Even though it gave preference to war material and supplies, it was nothing more than a regulation incident to the proper conduct of the business of the railroads. The President had assumed control by virtue of an act passed under the war power of Congress; but the embargo was. only an incident of the control, in the same sense that any embargo laid by a carrier, while a railroad was under its control, would he incidental to the proper conduct of its business.
7. I think that all of the objections to the indictment, which need more than a passing remark, are embraced within the points that have been discussed. There are one or two minor ones, of a very technical nature, which I think are deserving of no more discussion than that I have examined them and find them without merit.
My conclusion therefore is that the demurrers should be overruled.
