all points in Central Freight Association
territory lying east of said imaginary line,
still excepting St. Louis and the Ohio
River crossings, so that the relationship
between points in the Central Freight
Association territory from the Atlantic sea-
board was re-established except as to St.
Louis and Ohio River crossings. The rates
on coffee were advanced 2c per 100 Ibs.
to the Ohio River crossings, while the
rates to those points on sugar remained
unchanged. No change was made in the
rates to St. Louis on either coffee or
sugar. Effective October 15, 1908, de-
fendants increased the rates on coffee
and sugar from New Orleans to points in
Central Freight Association territory ly-
ing east of the imaginary line from Michi-
gan City to Louisville, excepting the Ohio
River crossings, and thus the former re-
lationship of rates on coffee and sugar
from New Orleans to points in Central
Freight Association territory was re-
stored, excepting as to St. Louis and the
Ohio River crossings. At the time of
the hearing the relationship of rates on
coffee and sugar to points in Central
Freight Association territory, from both
Atlantic seaboard and New Orleans, had
been restored except as to St. Louis and
the Ohio River crossings, and the cases
were therefore heard on the understand-
ing that the question brought in issue
and to be determined was the alleged dis-
crimination against Indianapolis created
by the change in the relationship of rates
on sugar and coffee from the Atlantic
seaboard and from New Orleans as be-
tween Indianapolis on the one hand and
St. Louis and the Ohio River crossings
on the other hand. It appeared that po-
tential water competition controlled the
sugar rates from New Orleans to St.
Louis and the Ohio River crossings, but
that such competition did not appear as
to coffee. It also appeared that the
sugar rates from the Atlantic seaboard
to St. Louis and the Ohio River crossings
were controlled by the rates from New
Orleans, but did not appear as to the
rates on coffee. It also appeared that for



the purpose of making rates from the
Atlantic seaboard to Central Freight As-
sociation, this territory had been divided
into zones, each taking a certain per-
centage of the New York-Chicago rates,
in the fixing of which percentage consid-
eration is given to the distance from New
York. Out of this system of rate adjustment
have grown well-established rates be-
tween the different cities and in the Cen-
tral Freight Association Territory. HELD,
that departure from the former relation-
ship of rates on sugar from New Orleans
and Indianapolis and St. Louis and the
Ohio River crossings is not unjustly dis-
criminatory against Indianapolis, because
the rates on sugar from New Orleans to
St. Louis and to the Ohio River crossings
are controlled by potential water com-
petition, but that it is unjustly discrimi-
natory against Indianapolis to depart
from the former relationship of rates on
coffee as between Indianapolis and St.
Louis and the Ohio River crossings, be-
cause such rates on coffee are not con-
trolled by water competition. That rates
on sugar from Atlantic seaboard points to
St. Louis and the Ohio River crossings
are controlled by the water-controlled
rates from New Orleans and that it is not
unjustly discriminatory against Indianap-
olis to depart from the former relation-
ship of rates on coffee as between In-
dianapolis and St. Louis and Ohio River
crossings, which are not so controlled by
water competition. Indianapolis Freight
Bureau v. Penn. R. R. Co., 15 I. C. C.
567.

(qq) Complainant's members were en-
gaged in shipping oil from points in Ohio
to Omaha, Neb. The combination
through rate on carload lots from Cleve-
land to Omaha, based upon Chicago, was
composed of the 13 %c rate east of Chi-
cago, plus defendants' 27c rate west of
Chicago, making a total of 40 y 2 c. Com-
plainant attacked the Chicago to Omah?
rate and asked for its reduction without
making the carriers east of Chicago
parties defendant. Consumers at Omaha
were able to obtain oil at a much lower
freight rate from standard refineries in
the vicinity of Kansas City, namely, a
rate of 13c per 100 Ibs.; although the dis-
tance from Chicago to Omaha is 493
miles, and that from Chicago to Kansas
City 458 miles, the rate between the
latter points was only 22c. It appeared
that the rates from Chicago to Kansas
City were fixed at a differential of 5c
above the rate from St. Louis to Kansas



DISCRIMINATION, 4 (r) (rr)



239



City; that on account of a decision of
the Missouri State Commission the rate
from Kansas City to St. Louis was fixed
at 17c; and that defendants placed the
Chicago to Kansas City rate at 22c in
order to preserve this differential. The
rate from Chicago to Omaha on beer,
acid, crude glycerine and linseed oil
ranged from 15c to 20c, while canned
goods, coffee, sugar and similar articles
took the same rate as petroleum, namely,
the fifth class rate of 27c. HELD, the
Chicago to Omaha rate on petroleum was
excessive and should not for the future
exceed 90 per cent of fifth class, or
24. 3c per 100 Ibs., which rate would
give the carriers the same revenue per
ton mile as accrued to them from the
20c Chicago to St. Paul petroleum rate
voluntarily established by them. Na-
tional Petroleum Ass'n v. C. M. & St. P.
Ry. Co., 14 I. C. C. 287, 289, 290.

(r) The rate on canned goods, fifth
class, from Irving, N. Y., to Burlington,
Vt., should not exceed the rate from Irv-
ing to Boston. Erie Preserving Co. v.
L. S. & M. S. Ry. Co., 14 I. C. C. 118.

(rr) Complainant attacked the rates
on coal, lumber, cement, paving brick,
glass and glassware, salt, egg-case fillers,
rice and sugar from points south and
west of Kansas City and lying west and
southwest of the Mississippi and Mis-
souri rivers to Lincoln and Omaha as
unjustly discriminatory in favor of
Omaha. This traffic might move via Kan-
sas City or via some interior Kansas junc-
tion point to Omaha and Lincoln. The
short line distance from Kansas City to
Omaha was 205 miles and to Lincoln 208
miles, and moved over the same line, the
M. P. Ry., for the first 150 miles out of
Kansas City. Over the other short line
route, the C. B. & Q. R. R., the dis-
tances from Kansas City to Omaha and
Lincoln were the same. The cost of de-
livering traffic from Kansas City to the
two points was the same. (1) Coal
Fields in Iowa, Illinois, Missouri and
Kansas competed in the sale of coal to
Omaha. On Iowa coal the same rate
from fields varying from 130 to 200
miles from Omaha was extended to
Omaha as to its competitor, Council
Bluffs, the rates being very low as fixed
by the Iowa Commission. The rates from
the Illinois, Kansas and Missouri fields
were controlled by Iowa rates. Lincoln
took rates from all these fields at 15c a
ton higher than Omaha, Lincoln rates be-
ing $1.75 for lump and $1.50 for slack over



typical distance of 350 miles. HELD,
Omaha was entitled to its strategic po-
ition in connection with the Iowa fields
and the low Iowa Commission rates and
he rates assessed to Lincoln not being
unreasonable per se were not unduly
discriminatory. (2) Cement. Cement
was originally obtained both at Omaha
and Lincoln from the east, the rate to
Lincoln being 3c higher. The source of
supply shipped and the cement used at
Lincoln came mainly from Hannibal,
Mo., and from lola and other points in
the Gas Belt of Kansas, and from both
sources the distance to Omaha and Lin-
coln was about the same. Omaha, how-
ver, had a source of supply from Mason
!ity, la., 130 miles east, and at Mankato,
Minn., 175 miles distant. HELD, the
rate of lOc to Omaha from Hannibal
and lola being made under stress of com-
petition with the Omaha rate from the
latter's source of supply, Omaha was en-
titled to a somewhat lower rate, but such
differential should not exceed l^c per
100 Ibs. (3) Paving Brick. Paving brick
shipped to Lincoln came principally from
Galesburg, 111., and to some extent from
Coffeyville, Kan., and other southern
points. The rate from both Galesburg
and Coffeyville to Omaha was 7%c and
to Lincoln lO^c, the .distance from
Galesburg to Omaha being 333 and 388
miles, respectively; from Coffeyville to
both Omaha and Lincoln, 364 miles.
HELD, for the same reasons applying to
cement Omaha was entitled to a some-
what lower rate, but the differential
should not exceed !M$c. (4) i-umber.
The differential upon lumber against
Lincoln and in favor of Omaha was Ic.
The supply came 80 per cent from the
south, 15 per cent from the Pacific coast
and 5 per cent from the northwest. The
cost of the haul from the south was the
same to Lincoln as to Omaha. HELD,
Lincoln should enjoy the same rates as
Omaha. (5) Rice. Rice formerly came
from the Orient and South Carolina, but
at present came from Louisiana and
Texas and reached Lincoln by the same
distance and at the same cout as Omaha.
HELD, the rates should be the same to
the two points. (6) Glass. Glass orig-
inally came from the east, taking a
rate 3c higher to Lincoln than to Omaha.
At present its source was in the Gas
Belt of Kansas. HELD, the rates to
Lincoln and Omaha should be the same.
(7) Salt. Salt originally came from
Michigan. At present it came from
Hutchinson and other Kansas points, the



240



DISCRIMINATION, 4 (s)_5 (d)



element of distance being in favor of
Lincoln. HELD, the rates should be the
same. (8) Egg-case Fillers. Egg-case
fillers shipped into Omaha and Lincoln
for concentration were then shipped out
in various directions, the fillers being ob-
tained in the Gas Belt of Kansas. The
rate to Lincoln was 3c higher than to
Omaha and on shipments of eggs east
Omaha obtained a rate 3c less than Lin-
coln. HELD, the rates on fillers should
be the same to the two points. (9)
Sugar. The rates on sugar from west-
ern points were the same to Lincoln and
Omaha. Sugar was produced at points
in Louisiana west of the Mississippi
River. HELD, the rates to Lincoln and
Omaha from these points should be the
same. Lincoln Commercial Club v. C.
R. I. & P. R. R. Co., 13 I. C. C. 319,
322-328.

(s) Grain originating on the Illinois
River was carried via packet lines to
Pekin, 111., then forwarded to Indianap-
olis, where milled under through rate
to the East. One of the packet lines
omitted the privilege from the tariff
through error. HELD, discrimination,
and reparation awarded on shipments
moving via such packet line. Evans
Milling Co. v. C. C. C. & St. L. Ry. Co.,
Unrep. Op. 351.

5. Test of Discrimination.

See Cars and Car Supply, 14 (a), 15
(a), 27 (a).

(a) When one shipping center
through an adjustment of rates is placed
at a disadvantage to another the question
to be determined is whether such dis-
advantage is the result of unjust dis-
crimination or undue or unreasonable
prejudice, due to the rate adjustment.
Chamber of Commerce of Newport News
v. S. Ry. Co., 23 I. C. C. 345, 351.

(b) When general rate adjustments
in and between large territories, which
contemplate substantial justice between
all shippers generally, result in individ-
ual instances of disproportionate in-
equality, they fail in their purpose to that
extent, and their strict observance in
such cases upon no other ground than
the arbitrary theory of their existence
should yield to the extent necessary to
prevent gross injustice, just as many
other general rules are necessarily sub-
ject to exceptions. Alpha Portland Ce-
ment Co. v. B. & O. R. R. Co., 22 I.
C. C. 446, 449.



(c) Mills of complainants are situ-
ated at an average distance of 150 miles
from Detroit. Complainants alleged that
freight rates on carload shipments of
cement from manufacturing points lo-
cated in the Lehigh Valley district are
so low when compared with rates from
the plants of the complainants to con-
suming points in Central Freight Asso-
ciation territory as to constitute undue
preference. Complainants cannot ship
to most points of Central Freight Asso-
ciation territory, nor to the east for any
great distance, without meeting compe-
tition from Lehigh Valley shippers.
HELD, that merely because a greater
distance point has lower rate per ton
mile than a shorter distance point, dis-
crimination does not necessarily result.
But rates must not only be reasonable
in and of themselves, but also relatively
reasonable. The rates complained of are
on a lower basis than those from Detroit
and vicinity to competitive points, dis-
tance considered. The fact that the ag-
gregate charges from the Lehigh Valley
district are higher in every instance is
immaterial. Elk Cement and Lime Co.
v. B. & O. R. R. Co., 22 I. C. C. 84, 88.

(d) Complainant attacked the ex-lake
rate on grain from Buffalo to Boston of
13.3c per 100 Ibs., as compared with the
all-rail rate from Chicago to Boston of
18c per 100 Ibs. The ton mile revenue was
from 5 mills to 6% mills. Complainant
contended that the ex-lake rate from Buf-
falo was part of a through transportation
from Chicago, and that the line east
from Buffalo had no right to impose upon
the through traffic which came by water
a higher rate than was imposed upon
similar traffic which came to Buffalo by
rail; and that the ex-lake rate, Buffalo
to Boston, ought not to exceed the pro-
portional rate of 7.9c on the Chicago to
Boston haul. HELD, that the all-rail
rate from Chicago east competes with
the lake-and-rail rate, and that the di-
vision of the line east of Buffalo cannot
be made the standard by which to fix
a reasonable rate from Buffalo; that the
division of a through rate was not a mat-
ter of concern to the public, and that
while it might be looked to for certain
purposes it should not ordinarily be made
the standard of reasonableness or the
measure of discrimination; that the ex-
lake rate from Buffalo east was reason-
able of itself. Complaint dismissed.
Board of Trade of Chicago v. A. C. R. R.
Co., 20 I. C. C. 504.



DISCRIMINATION, 5 (e) 6 (b)



241



(e) Complainant, merchants and man-
ufacturers of Des Momes, attacked rates
generally from Des Moines to the west-
ern portion of Minnesota and the states
of North and South Dakota and the ter-
ritory west thereof as unduly discrim-
inatory, compared with rates from Chi-
cago, 111., St. Louis, Mo., and Dubuque,
Davenport, Clinton, Muscatine and Bur-
lington, la. The complaint attacked
the whole rate structure and demanded
that the rates from Des Moines should
bear the same relation to distances in-
volved as those from Chicago. Under
the rate structure attacked the rates
from Chicago and St. Louis were rela-
tively lower than those from Des Moines
on account of the competition of the car-
riers serving the points of destination
in question through the gateways of
Duluth, Chicago and St. Louis. The
rates from Chicago to these points were
generally the same as those from St.
Paul and Minneapolis. The low rate
from St. Louis to St. Paul influenced th
rates from all points on the Mississippi
River as far north as Dubuque, la. HELD,
that while distance was a factor in the
determination of rates, the Commission
was not justified in adopting it as the
sole basis, in ignoring the difference in
circumstances and conditions between
Des Moines and the other points of origin
in question, and in destroying the present
rate adjustment. Complaint dismissed.
(Lane, Comm'r, dissenting.) Greater
Des Moines Committee v. C. M. & St. P.
Ry. Co., 18 I. 0. C. 73, 79.

(f) Any discrimination which exists
must not exceed that which is warranted
by the differences in circumstances and
conditions. Sondheimer Co. v. I. C. R. R.
Co., 17 I. C. C. 60, 64.

(g) Whether or not a discrimination
shall be removed is not measured by its
amount, whether large or small, but by
a determination of whether or not it is
undue. Fort Dodge Commercial Club v.
I. C. R. R. Co., 16 I. C. C. 572, 581.

(h) The freight is so small an item
in the cost to the retail dealer or- the
consumer of both woolen and cotton gar-
ments that this does not seem to pro-
duce any practicable effect. While in
fact the discrimination exists, it is not
sufficient to become obvious. Associa-
tion of Union-Made Garment Manufac-
turers v. C. & N. W. Ry. Co., 16 I. C. C.
405, 408.

(i) Lower proportionals from points
served by foreign carriers afford no basis



for charge of discrimination against com-
plaining point served by other carriers.
Indianapolis Freight Bureau v. C. C. C.
& St. L. Ry. Co., 16 I. C. C. 56, 66.

(J) Not all discriminations are un-
lawful, but only such as are undue or
unreasonable; if based on -reason and
good cause, discriminations cannot be
condemned as unreasonable. The evi-
dence and effectiveness of competition
between carriers, whether by rail or
water, whether subject to the Act or not,
and competitions of markets, or the ab-
sence of such competition, are, among
other things, pertinent to the question
of similarity of circumstances and con-
ditions involved in the ultimate ques-
tion of fact under sections 3 and 4, and
as to whether the discrimination com-
plained of is or is not undue or unreason-
able. Discriminations in sections 3 and
4 of the Act, in so far as they result
from the bona fide action of a carrier
in meeting circumstances and conditions
not of its own creation, and which are
reasonably necessary, do not of neces-
sity fall under the condemnation of the
law. Pittsburgh Plate Glass Co v. P.
C. C. & St. L. Ry. Co., 13 I. C. C. 87, 99.

III. JUSTIFICATION.

See Advanced Rates, 5 (2) (g), (h).

6. Carrier as Shipper or Consignee.

See Evidence, 46; Forwarders, (I;
Reasonableness of Rates, 23; Re-
stricted Rates.

(a) The fact that a railroad in fuel
coal does not come into competition with
commercial coal and is in competition
with coals coming upon the line of the
consuming railroad, at other points, does
not constitute such a difference in cir-
cumstances as to warrant the carriers
under sections 2 and 3 of the Act in ac-
cording a different rate to fuel coal than
to commercial coal, and the practice of
extending such a difference in -rates
amounts to unjust discrimination under
said sections of the Act. I. C. C. v. B. &
O. R. R. Co., 225 U. S. 326, 32 Sup Ct.
742, 747; 56 L. ed. 1107.

(b) A carrier as a shipper over the
lines of another carrier may not have
any preference in the application of
transportation rates and charges. Con-
versely, it may have the same privileges
under the tariffs as any other shipper.
In Re Transportation of Company Ma-
terial, 22 I. C. C. 439. 440.



242



DISCRIMINATION, 6 (c) (h)



(c) Carriers buying what will ulti-
mately become company material con-
tract with shippers located off their lines,
and agree that if the vendor will bill
the shipment beyond a designated junc-
tion point, at which their own lines and
the lines of the initial carriers meet, the
purchasing carrier will absorb its own
division of the joint through rate and the
shipper assume only that portion of the
joint through rate which accrues to the
initial carriers 'as their division of the
rate up to the junction point designated
in the billing. HELD, this practice re-
sults in the application of a portion of a
joint rate from the point of origin to the
junction point for the benefit of a par-
ticular shipper, which is not published
for the public at large nor filed with the
Commission under section 6 of the Act.
Nor is it material whether the contractor
for a carrier, or the purchasing carrier
itself, is the consignor. In either case
the shipment should be billed and con-
tinuously transported from point of ori-
gin through the junction point of tho
purchasing carrier and to the point of
final destination on the purchasing car-
rier's line. The purchasing carrier is
there clearly entitled to its division of
the joint, rate and the charge which it
must pay on its shipment of material to
the junction point is the division of the
rate accruing to the initial carrier and
connections, if any, up to the junction
point in question. If the shipment is
billed, or is actually carried, only to the
junction point of the purchasing carrier,
whether the carrier or its contractor or
other private party acts as consignor, the
division of a joint rate cannot apply un-
less this division has been lawfully pub-
lished as applicable to movements to
such junction point for shipment beyond.
The Act gives no indication that either
carriers or contractors who furnish com-
pany materials and supplies are to be
preferred over other individuals so far
as rates are concerned. The published
rate is the only lawful rate and is ap-
plicable to all alike without distinction.
If one shipper is to have the advantage
of such a division of a through rate then
all other shippers should have the same
advantage, and the only way to secure
this advantage to one is to publish it
available for all. A carrier acting in the
capacity of shipper or consignor stands,
upon a footing of absolute equality with
every other shipper with respect to the
application of published rates to such



shipments, except in regard to that part
of a joint rate which accrues upon the
purchasing carrier's own line. Practice
condemned and complaint dismissed.
Beekman Lumber Co. v. St. L. & S. F.
R. R. Co., 21 I. C. C. 270, 272, 273, 275.

(d) If a railroad is entitled to a low
rate because of its facilities, any ship-
per providing like facilities must be
awarded the same rate. In Re Restricted
Rates, 20 I. C. C. 426, 435.

(e) On shipments of coal for railway
use from the district near Wheeling, W.
Va., defendant carriers extended much
lower rates than when the coal was to be
used for other purposes. HELD, such prac-
tices on the part of the carriers ought to
be stopped as resulting in unjust dis-
crimination in favor of producers hav-
ing contracts for the sale of coal to car-
riers. There is no warrant in the com-
mon law or the Act for the theory that a
carrier as a shipper over the lines of
other carriers may be given a preferred
rate. The practice cannot be upheld
without removing the very cornerstone of
the Act designed to prevent unjust dis-
crimination and practices. If carriers in-
sist upon making or maintaining such
preferential rates they may confidently
expect that such voluntary action on
their part will be accepted in any fur-
ther proceedings in this or any similar
cases as evidence of the unreasonable-
ness of higher rates which they may un-
dertake to enforce against other ship-
pers. Hitchman Coal & Coke Co. v. B.
& O. R. R. Co., 16 I. C. C. 512, 517, 518.

(f) A carrier as shipper over lines of
another carrier may not lawfully be given
any preference in application of tariff
rates on interstate shipments. Hitchman
Coal & Coke Co. v. B. & O. R. R. Co.,
16 I. C. C. 512, 517.

(g) Character of the consignee or the
use made of the coal is not a proper or
lawful basis for a difference in rates on
coal of the same kind. Board of Mayor
arid Aldermen v. V. & S. W. Ry. Co., 15
I. C. C. 453, 456.

(h) So long as there is identity of
ownership in the agency of transporta-
tion and the thing transported, it is ex-
tremely difficult, if not impossible, to
prevent discrimination between shippers.
Cedar Hill Coal & Coke Co. v. A. T. &
S. F. Ry. Co., 15 I. C. C. 73, 78.



DISCRIMINATION, 7 (a) (d)



243



7. Carrier Not Serving Prejudiced
Point.

See Evidence, 23; Facilities and
Privileges, 21 (kk) ; Procedure Be-
fore Commission, 2 (rr); Through
Routes and Joint Rates, 2 (k).

(a) The fact that carriers serving a
certain milling center but not serving a
competitive center establish transit privi-
leges at the former and thus compel a
carrier serving both milling centers to
similarly establish such privilege at the
one, but not at the other, where no com-
petition between carriers exist, does not
in law render the carriers not serving
the competitive milling center guilty of
subjecting it to undue prejudice or dis-
advantage. Blodgett Milling Co. v. C.
M. & St. P. Ry. Co., 23 I. C. C. 448, 449.

(aa) A railroad cannot be said to dis-
criminate against a town which it does
not reach and in whose carrying trade it
does not participate. Blodgett Milling
Co. v. C. M. & St. P. Ry. Co., 23 I. C. C.
448, 449; Chamber of Commerce of Ash-
burn v. G. S. & F. Ry. Co., 23 I. C. C.
140, 149; Chamber of Commerce of New-
port News v. G. S. & F. Ry. Co., 23 I. C.
C. 345, 352.

(b) Complainant mills rye and buck-