This suit was brought in the federal District Court for New Jersey to enjoin the enforcement of an order of the Interstate Commerce Commission on the ground that it exceeds the powers of the Commission, was arbitrary, and is void. The plaintiffs were the Central Railroad of New Jersey, the Pennsylvania, and 21 other railroads located in Trunk Line territory and New England. The defendants were the United States and the Interstate Commerce Commission. The former filed a motion to dismiss; the latter an answer which admitted the material allegations of the bill of complaint. On these pleadings the case was heard before three judges on an application for a preliminary injunction. This was denied without written opinion; and the case is here on appeal under the Act of October 22, 1913, c. 32, 38 Stat. 208, 220.
The order of the Commission was entered upon a petition of the American Creosoting Company to which these twenty-three carriers-and no others -were made respondents. American Creosoting Co. v. Director General, 61 Interst. Com. Com'n R. 145. It alleged that the petitioner had a creosoting plant at Newark, N. J., which was connected by switch tracks with the Central and the Pennsylvania; that these carriers had failed to establish there the privilege known as creosoting in transit; that this failure was unjust and unreasonable in violation of section 1 of the Act to Regulate Commerce of February 4, 1887 as amended (Comp. St. § 8563), and that it was also unjustly discriminatory in violation of section 3 (section 8565). The Commission found that failure to establish this transit privilege was not unjust or unreasonable and denied relief under section 1. But it found on the facts hereinafter stated that this failure subjected the company to unjust discrimination; and, granting relief under section 3, the Commission directed that the discrimination be removed by the respondents, who are the appellants here.
By the privilege called creosoting in transit forest products received for shipment may be stopped and unloaded at an intermediate point, there subjected to the process of creosoting, and later forwarded on the original bill of lading to the destination therein named. Where the privilege is granted and availed of, delivery is made of the commodity to the creosoting plant, as if that were the final destination. It is there unloaded and treated; and at some time thereafter it is redelivered to the carrier, as if there were an initial shipment of the creosoting product. Then it is forwarded to the final destination. Although some charge is made for the transit service, the shipper secures thereby a lower freight rate. For through rates are generally much less than the rate on the untreated forest product from point of origin to the transit point plus that on the treated product from there to destination.
The plant of the American Creosoting Company is not reached by lines of any of the twenty-three appellants except the Central and the Pennsylvania. Neither of these two carriers accords the creosoting in transit privilege at any point on its lines; and no competitor of the company has a plant on those of either. Nor is the privilege granted in Trunk Line territory by any carrier, with a single exception not here material. Some competitors of the American Creosoting Company have plants in Mississippi, Indiana, Illinois, Ohio, and Pennsylvania; and the several railroads on which these plants are located have, each acting independently, established the privilege at the places where those plants are situated. Under the rules of the Commission governing the making, filing and publishing of tariffs, privileges like creosoting in transit are treated as a matter local to the railroad on which the transit point is situated. Whether the privilege shall be granted or withheld is determined by the local carrier. If granted the local carrier determines the conditions; and these are set forth in the local tariff. Although a joint through route with joint rates is established by concurrent action of several carriers, the transit privilege may thus be granted by a carrier without the consent of, and without consulting, connecting carriers. And the whole revenue received for use of the privilege is retained by the local carrier. The appellants did not participate in any way in establishing the transit privileges enjoyed by competitors of the Newark concern on lines of the Southern and Midwestern carriers; and none of those carriers is controlled by any of the appellants. But appellants did join with those Southern and Midwest railroads in establishing joint rates on forest products over routes which pass through the points at which this privilege prevails and also through Newark.