Georgia Rebels Again

Soon after the muskets were stacked at Appomattox the South started crying that its industrial growth was being stunted by southern freight rates, which average 39% higher on manufactured goods than rates in the North.

Last week, in a significant decision, the Supreme Court agreed to take up the South's case against the railroads. Spokesman for the South is Georgia's New Dealing Governor Ellis Arnall. Peppery, young (38) Governor Arnall has already killed the poll-tax law in Georgia, rewritten the State's Constitution, cut the debt way down. Last June he set out after the biggest game of all. In a suit against the Pennsylvania Railroad Co. and 19 other carriers Governor Arnall charged that the railroads and some 60 other rate-makers have violated antitrust laws, discriminated against southern shippers. He charged:

P: The railroads rigged their rates on freight for export so that the vast flow of cargoes from the West passed through North Atlantic ports. Item: from Alton, Ill. to Baltimore or New York the first-class freight rate is $1.68 per 100 pounds. But to the deep-water port of Savannah the rate is $2.39, though the mileage from Alton to the three ports is about the same.

P: Northern railroads refused to join with southern railroads in reducing through rates on shipments from the South to the North and West.

P: The rate on a carload of work clothes from Macon to Chicago (819 miles) is $1.56 per 100 pounds v. only $1.12 from Philadelphia to Chicago (816 miles). Other Georgia rates are just as bad.

These practices, said Governor Arnall, cost Georgia shippers $2,000,000 a year.

This was heady stuff, politically, and Arnall made the most of it. Without a by-your-leave from other southern Governors, who have an equal grievance against the railroads, Arnall bypassed the lower courts, rushed Georgia's case right to the Supreme Court. There he will argue his cause himself. In his haste he did not wait for the Interstate Commerce Commission, where the eleven casual Commissioners have been conducting their own investigation of southern freight rates for over five years.

What to Do? The Supreme Court has agreed to hear Arnall (by a 5-to-4 decision), but it is not clear how the Court can help.

In writing the majority opinion, Justice William O. Douglas admitted that the Court cannot set aside the rates approved by ICC. Nor can the Court act as a rate-making body, a function which Congress has specifically delegated to ICC. But, said Justice Douglas: "If the alleged combination is shown to exist, the decree which can be entered will be no idle or futile gesture. It will eliminate . . . the collusive practices which the antitrust laws condemn. . . . It will supply an effective remedy." On this, the dissenting Justices, led by Chief Justice Harlan F. Stone, said sharply: "It seems obvious that this Court cannot give any effective relief . . . without breaking down rate regulation by the [Interstate Commerce] Commission."

In any case, Governor Arnall has greatly improved the chances of Attorney General Francis Biddle to win his antitrust case against 47 western railroads (TIME, Sept. 4) on similar charges of rate discrimination. And by taking his case direct to the Supreme Court, Governor Arnall may prod the snail-slow ICC into action for the relief of southern shippers.

This file is automatically generated by a robot program, so reader's discretion is required.