United States v. Pennsylvania Railroad Company (242 U.S. 208)

On petition of the Pennsylvania Paraffin Works and the Crew-Levick Company the Interstate Commerce Commission made the following order:

'It is ordered, that the Pennsylvania Railroad Company be, and it is hereby, notified and required to cease and desist, on or before August 15, 1915, and thereafter to abstain, from refusing upon reasonable request and reasonable notice therefor to provide and furnish tank cars to the complainants herein for interstate shipments of petroleum products, which refusal has been found in said report to be in violation of the provisions of the act to regulate commerce and amendments thereto.

'It is further ordered, that said defendant be, and it is hereby, notified and required to provide, on or before August 15, 1915, and thereafter to furnish, upon reasonable request and reasonable notice, at complainants' respective refineries, tank cars in sufficient number to transport said complainants' normal shipments in interstate commerce.

'And it is further ordered, that this order shall continue in force for a period of not less than two years from the date when it shall take effect.'

The time of compliance was subsequently extended to November 15, 1915, on which date the railroad company brought this suit to enjoin the enforcement of the order. A preliminary injunction was prayed, and, upon a hearing by three judges, was granted. 227 Fed. 911. To review that action this appeal is prosecuted.

The Commission made quite elaborate findings, which, however, we do not think it is necessary to quote in full. It found the production of the oil companies, and the following additional facts:

(1) That 91 per cent of the oil produced by the Paraffin Company was shipped in tanks, 1 1/2 per cent in barrels loaded in cars other than tank cars, and 7 1/2 per cent in pipe lines, while of the shipments made by the other company 86.8 per cent moved in tank cars, 4.7 per cent in barrels and 8.5 per cent in pipe lines.

(2) For a long time the bulk of refined oil in the United States has been shipped in tank cars and at present 91 per cent is so transported. The railroad has been using tank cars for twenty-five years. The capacity of the cars is found, and they are so constructed that they may be rapidly loaded at the refineries, and jobbers and dealers in refined oil throughout the country have the proper and necessary facilities for unloading the cars by gravity at their various stations.

(3) The only other method of transporting oil is in barrels or similar containers, the cost of which is from 3 1/2 to 3 3/4 cents a gallon above the cost of transportation in tank cars, and this makes such method of transportation practically prohibitive, and the refusal of the railroad to furnish an adequate supply of tank cars would tend to drive out of business refiners who are unable to supply themselves with enough cars to move their own products; and witnesses for the railroad admitted that tank cars are an economic necessity for the transportation of refined products.

(4) In 1887 the railroad acquired 1,308 tank cars, some of which have since been sold to independent refiners, but it owned at the time of the hearing 499 cars, of which 482 are furnished to shippers of oil located on its lines.

(5) At the time of the hearing the Paraffin Company owned 54 tank cars and the Crew-Levick Company 57; and it was testified that these companies for five or six-years have daily made inquiry for the delivery of cars to them, and that formal orders for cars have been constantly on file in the railroad's offices.

(6) On November 11, 1912, shortly before the filing of the complaints before the Commission, complainants served notice upon the railroad company, requesting it to furnish a sufficient number of tank cars to ship respectively 450,000 gallons of oil per month from the Paraffin Company's refinery at Titusville, and 600,000 gallons per month from the Glade (Crew-Levick Co.) Oil Works at Warren.

To the request of complainants, the railroad company replied:

'We beg to say that the railroad company is not prepared to increase its present tankcar equipment, but is prepared to transport the commodities in question when properly contained in barrels or other similar retainers at rates that are fair, reasonable, and nondiscriminatory.'

Solicitor General Davis and Mr. Robert Szold for the United States.

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