United States v. Pacific & Arctic Railway & Navigation Company

Indictment for alleged violations of the Sherman anti-trust act and of the interstate commerce act.

The indictment contains six counts. The first and second couns charge violations of the anti-trust law. The first, by the defendants engaging in a combination and conspiracy in restraint of trade and commerce with one another, to eliminate and destroy competition in the business of transportation in freight and passengers between various ports in the United States and British Columbia in the south, and the various cities in the valleys of the Yukon river and its tributaries, both in British and American territory, in the north, upon a line of traffic described, for the purpose and with the intention of monopolizing such trade and commerce. The second count charges the monopolization of trade and commerce in the same business and between the same ports. The manner of executing the alleged criminal purpose is charged to be the same in both counts.

The places of the incorporation of the corporate defendants are alleged, and the following facts: The Pacific Coast Steamship Company and the Alaska Steamship Company operate respectively lines of steamships as common carriers of freight and passengers running in regular route between Seattle, state of Washington, and Skagway, Alaska. The Canadian Pacific Railway Company is a like carrier, and operates a line of steamships between Vancouver, British Columbia, and Skagway. During the time mentioned in the indictment, the Pacific & Arctic Railway & Navigation Company owned and operated a railroad from tidewater at Skagway to the summit of White Pass, a distance of about 20 miles to the boundary line between Alaska and British Columbia, at which latter point it connected with a railroad owned and operated by the British Columbia Yukon Railway Company. The latter road extended from the summit of White Pass to the east shore of Lake Bennett and the boundary line between British Columbia and Yukon district of Canada, a distance of about 25 miles, at which point it connected with another railroad, owned and operated by the British Yukon Railway Company, which extends to White Horse on the headwaters of the Yukon river, in Yukon district of Canada. During all the times mentioned there was a line of steamers plying upon the Yukon river and the headwaters thereof between White Horse and Dawson, owned and operated by the British Yukon Navigation Company. The four corporations last above mentioned and their stocks and bonds were owned and controlled by the same persons and individulas, and the said three lines of railroads and their lines of steamers were under one and the same management, and were operated as one continuous line of common carriers of freight and passengers between the towns of Skagway and Dawson and way points, under the name and style of the White Pass & Yukon Route, referred to as 'the railroad,' and had the sole and exclusive monopoly of the transportation business between Lynn canal and the navigable waters of the Uukon river. A General trade and commerce was carried on between British Columbia and Puget sound ports and the Yukon valley, both in American and British territory, over the designated routes and to the various places on the routes, and the shortest and most natural route for such trade and commerce was, has been, and is by water craft from said southern ports to Skagway, and thence over Moore's wharf, so called, to the points of destination. Trade and commerce from White Horse and Dawson to said southern ports would naturally, when left untrammeled by unlawful interference, move up the Yukon to the headwaters of that river, and thence, by the way of said railroad, to Skagway, Alaska, thence over said Moore's wharf, and thence by steamship or other water craft to the said southern ports.

The North Pacific Wharves & Trading Company was the owner and in exclusive possession and control of all of the wharves at Skagway at which steamships or other water crafts could take and discharge, or load cargo, that company having a complete and absolute monopoly of the wharfage business at Skagway, and owning and operating the Moore wharf, which wharf, by agreement between the Wharves Company and the railroad, had been made and was the terminus of the railroad, over which all freight going to or coming from or passing through Skagway had necessarily to pass. The wharf was operated as a public wharf. Continuously during the three years immediately preceding the finding of the indictment, the defendants combined and conspired together to eliminate and destroy competition in the transportation business between the said southern ports and Skagway, for the purpose and with the intention of giving to and creating for the Alaska Steamship Company, the Pacific Coast Steamship Company, and the Canadian Pacific Railroad Company, a monopoly of such business, and, to that end, purpose, and intention, entered into, and continuously maintained, a joint traffic arrangement between the railroad and the steamship companies, by and through the individual defendants as officers and agents of the corporate defendants, pursuant to which arrangement either of the steamship companies could and did bill freight and passengers through from either of the said southern ports to any point on the said railway or on said Yukon river or its tributaries along and over the route of travel and transportation described, and the railroad could and did bill freight and passengers through from Yukon and other northern points to said southern ports only on ships from Skagway south, billing to either of the steamship companies. The rates for freight and passengers were fixed, and an apportionment between the said respective carriers of the gross receipts was established and agreed upon. With the like intent and purpose it was agreed that the railroad should, and it did, refuse to enter into any joint through traffic arrangement with any other carrier or carriers, and refused to receive any other through billing on shipments from the said southern ports except such as arrived at Skagway by some ship belonging to one of the steamship companies, or from said Yukon points to the southern ports, except by the same ships. As part of the same combination and with the same intent and purpose it was agreed that the Wharves Company should, and it did, during all the times mentioned, charge wharfage at the rate of $2 per ton for all freight handled over its wharf except when the same was shipped on a vessel owned by either of the companies, or was consigned to someone who had entered into or was about to enter into a contract with either of said steamship companies to bind himself to have all of his freight carried by such steamship company and by no one else, in which latter case a wharfage of $1 per ton only was charged, and any charge in excess of $1 was unreasonably high, and was exacted for the unlawful purpose aforesaid. With like intention and purpose, and as part of the same combination and conspiracy, it was arranged and agreed by and between the defendants that the said railroad should, and it accordingly did, fix and establish local rates and transportation charges for freight and passengers from 5 per cent to 25 per cent higher than the through joint rates, differing according to classification of the various commodities shipped. Pursuant to such arrangement, and the purpose and intention aforesaid, the said railroad received for through shipments, as its share of freight charges, from 15 per cent to 30 per cent less than it charged for the same class of freight shipped between Skagway and the same Yukon points. By reason of the facts alleged it became and was, during all of the time mentioned, unprofitable for the public to employ any carrier in the trade, traffic, or commerce save and except the said steamship companies, and competition in the said water transportation between the steamship companies and other carriers was in that manner and by the means of said combination and conspiracy eliminated and destroyed, the defendants being enabled to monopolize such trade, traffic, transportation, and commerce, to the injury of the public.

The third count charged an unlawful and unjust discrimination in the transportation of passengers and freight, in violation of the interstate commerce act. The discrimination is charged to have been practised against the Humboldt Steamship Company between January 1, 1909, and August 10, 1910, which company is alleged to be a California corporation, and engaged as a common carrier of freight and passengers, operating a line of steamers from the same ports from which the defendant steamship companies operate their respective lines to Skagway, Alaska. In the conduct of its business the Humboldt Steamship Company operated a steamship called the 'Humboldt' on a regular schedule and route between Seattle, Washington, and Skagway. 'The railroad,' as we have seen the White Pass & Yukon Route is called in all of the counts, had entered into and maintained during the time aforesaid, with the defendant steamship companies, a joint traffic arrangement whereby and under the terms of which freight and passengers might be billed at a joint through rate from the said southern ports over the route described to the various Yukon points, but refused, without cause or excuse, to enter into a joint traffic arrangement with the Humboldt Company, though requested to do so, or to receive, carry, or handle any freight billed through from Seattle to Yukon points on the railroad or the Yukon river; and neither would nor did carry any freight whatever from Skagway to any of said points in British or American territory at a less rate or charge than from 5 per cent to 30 per cent more, according to classification and character, than it received from the defendant steamship companies as its proportion of joint through rates from such southern points to the corresponding Yukon points. The railroad company, it is charged, caused the North Pacific Wharves & Trading Company to charge for all freight shipped on the steamship 'Humboldt' for transhipment on the railroad to points along its line on the Yukon river, a wharfage of $2 per ton, whereas it included at the same time in its portion of the through rate on through bills under its arrangement with defendant steamship companies all wharfage charges. And it is alleged that the defendants knowingly, wilfully, and maliciously induced and incited the railroad company to practise the discrimination described, and each and all aided and abetted one another and the railroad company in such practice.

The other facts as to routes, commerce, and carriers, their relations and arrangements and the effect of them, are the same as in the first and second counts, the order of statement being somewhat different.

Count 4 is the same, as to the facts alleged, as the third count, except the discrimination is charged to have been practised against the Humboldt Steamship Company between August 18, 1910, and January 1, 1912.

Count 5 brings the discrimination charged down to the finding and presentation of the indictment. There is no allegation of discrimination in wharfage charges.

Count 6 charges the crime of conspiracy to commit an offense against the United States by destroying competition between the defendant steamship companies and the Humboldt Steamship Company. The same facts are alleged as in the other counts.

Motions to quash the indictment and each of its counts were made and denied. Demurrers to the indictment were filed and sustained to all counts but the 6th. To that, the demurrer of the individual defendants was sustained.

Solicitor General Bullitt for plaintiff in error.

[Argument of Counsel from pages 94-96 intentionally omitted]

Messrs. W. H. Bogle, Carroll B. Graves, W. B. Stratton, Ira Bronson, Morven Thompson, and Bruce C. Shorts for defendants in error.

Statement by Mr. Justice McKenna:

[Argument of Counsel from pages 96-100 intentionally omitted]

Mr. Justice McKenna, after stating the case as above, delivered the opinion of the court: