United States v. Erie Railroad

Background

A buyer in New Jersey (Hamersley Manufacturing) arranged to buy wood pulp from foreign mills through a New York broker who acted as the mills' commission agent. The broker contracted in his own name, paid the mill when the goods were shipped, and received the ship's bill of lading. The mill sent large shipments to the Hoboken dock marked by brand, and the broker allocated specific bales for delivery to Garfield, New Jersey. The broker made dock orders and issued a local bill of lading to move the allocated bales by rail to Garfield. The buyer paid the rail freight.

Reasoning

The rail carriers sued, arguing the Hoboken-to-Garfield movement was a separate local shipment and not subject to federal rate control. The Interstate Commerce Commission found the broker was an agent and that from the time the pulp went aboard the foreign steamer there was an intent to transport it on to Garfield. The Court explained that the character of the shipment depends on the essential nature of the commerce, not on when title passed or the use of a local bill of lading. Because the Commission's factual findings were supported by evidence, the Court treated them as conclusive and reversed the lower court.

Real world impact

This decision means the federal agency may set and enforce rail rates for imported goods that continue inland from the port. Railroads cannot avoid federal rate authority simply by issuing a local bill of lading at the dock. The ruling affects importers, brokers, and carriers who move imported cargo from ports to inland destinations, and it upholds the federal government's reach over the inland segment of import shipments.