The Lehigh Valley Transportation Company and its Great Lakes fleet was very busy and successful up through World War 1,
but ran into some trouble with the US Government beginning in 1912.
In 1912, The ICC passed the "Panama Canal Act", which declared railroad ownership of water-borne
common carriers to be illegal, which included all railroad-owned shipping on the Great Lakes.
The Panama Canal Act stated that no railroad could directly compete with its own shipping line.
the LV argued, quite correctly, that its rails ended in Buffalo, and therefore could in no way be
competing by rail with its own ships, and therefore the act should not apply to the LV.
The LV took the US government to court. The case went all the way to the Supreme Court, ending in 1917.
the LV lost the case..not because they were wrong about not directly competing with their own ships,
but because the Supreme Court ruled that the LV's participation in through-freight with other railroads that
did serve the same ports as the LV ships, was reason enough to dismiss the LV's case.
the actual case summary can be read here:
http://supreme.justia.com/cases/federal ... /case.html
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