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A treatise on the law of carriers (Volume 4) online

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the primary purposes of the act to regulate commerce, its supplements, and amend-
ments. Many provisions are directed to that end. Consequently it is not to the
specific power to prescribe maximum rates, but to the broad powers, applicable in
the case of violations of the act by unjust discriminations, conferred by § 12, 'to
execute and enforce the provisions of this act,' and, by § 15, 'to make an order
that the carrier shall cease and desist from such violation to the extent to which
the commission find the same to exist,' that resort must be had." ^''

Where Other Schedules Deranged. — It is no objection to the validity of an
order of the Interstate Commerce Commission determining and prescribing rates
to be charged by a carrier that it would derange the schedule of rates on other
routes. ^^

Power to Protect Industries and Interests. — The order of the interstate
commerce commission reducing the blanket rate charged by railroad companies for
the carriage of lemons from Pacific Coast points to points east of the Rocky
Mountains, is void as beyond the powers of the commission, because based prima-
rily on the assumed authority to protect the lemon industry against -foreign compe-
tition, and not on traffic considerations.*''^ An order of the Interstate Commerce
Commission setting aside new rates on lumber between certain points, and restor-
ing substantially the old rates, is void as beyond its powers, where, from the record
and the opinion of the commission, and from the express exclusion of one of the
points from the benefit of the reduced rate, and the reasons assigned for such
exclusion, it is clear that the commission was not exercising its authority to con-
demn unjust and unreasonable rates and fix reasonable ones, but was acting upon
the assumption that it had the right to protect the lumber interests from the con-
sequences of a change in rates, even if the change was from a rate which had
been fixed unreasonably low, for the purpose of encouraging the industry, to a
higher rate which is not in itself unjust or unreasonable.'^^ But the Interstate

66. Fixing through to equal local rates. Commerce Comm., 184 Fed. 118.

— Louisville, etc., R. Co. v. Interstate 69. Power to protect industries and in-

Commerce Comm., 184 Fed. 118. terests. — Atchison, etc., R. Co. v. Inter-

67. Power to fix relative rate. — -New state Commerce Comm., 190 Fed. 591.
York, etc., R. Co. v. Interstate Commerce 70. Southern Pac. R. Co. v. Interstate
Comm., 168 Fed. 131. Commerce Comm., 219 U. S. 433, 55 L.

68. Where other schedules deranged. Ed. 283, 31 S. Ct. 288, reversing decree,
— Louisville, etc., R. Co. v. Interstate 177 Fed. 963.

3673 INTERSTATE C0MMI<:RCE ACT. §§ 4062-4065

•Commerce Commission can not be said to have ordered a reduction in the rates on
lumber because of the effect upon the lumber industry of the carriers' action in
advancing the rates, where, ahhough the commission considered that subject, its
opinion, taken as a whole, affirmatively shows that it confined itself to the exer-
cise of its statutory power to condemn unjust and unreasonable rates and fix rea-
sonable onesJi

§ 4063. Prerequisites to Establishing-. — By the express provisions of the
statute, before going on to prescribe future rates, the commission must reach the
conclusion that the existing rates established by the carrier are unjust and un-
reasonable. "^ It is only where after due notice and a full hearing, whether on
complaint of a shipper or upon investigation by the commission of its own mo-
lion, it is made to appear that the rate is unjust and unreasonable that the com-
mission is empowered to fix another."^

§ 4064. Form and Requisites of Order. — The Interstate Commerce Com-
-mission has no power to annul or change a rate, regulation, or practice established
by a railroad company by its filed and published schedules, except by a formal
order made in conformity to the Act of June 29, 1906."** Where the commission
does not state in its order how long it should remain in force, nevertheless this
inaction on the part of the commission does not invalidate the order. The act it-
self prescribes the maximum time an order can remain in force. The commission
may prescribe a shorter time, but, in the absence of such limitation, an order re-
mains in force the maximum time of two years. The law reads the limitation into
it. But, while the absence of an express limitation in an order does not render it
void, there is no reason why the direction implied in the statute that the time be
prescribed in the order should not be complied with. There is no merit whatever
in the contention of the commission, that there is a distinction with respect to the
application of the two-year limitation between affirmative and negative orders.'^ ^

§ 4065. Review of Courts. ^ — Questions of Law. — Enforcement of an or-
der of the Interstate Commerce Commission, reducing gathering rates for citrus
fruits and vegetables from production points in Florida to a basing point in the
same state, will be enjoined where rendered without any evidence to support
it; this being a question of law, which it is the duty of the courts to decide.'''^

Affirmative Order. — An order of the Interstate Commerce Commission which,
amending a prior order refusing to compel certain trunk line railroads to estab-
lish or re-establish through routes and joint rates to certain tap lines, and which re-
quired the trunk line to desist from making allowances to the tap lines, is affirma-
tive in character and reviewable in the commerce court.'^'^

71. Interstate Commerce Comm. v. sonable time, not less than thirty days,
Union Pac. R. Co., 222 U. S. 541, 56 L. and continue in force for such period,
Ed. 308, 32 S. Ct. 108. not exceeding two years, as shall be pre-

72. Prerequisites to establishing.— Lou- scribed in the order of the commission"
isville, etc.. Railroad v. Interstate Com- unless suspended or set aside, etc., an
merce Comm., 195 Fed. 541. order relatmg to rates is not mvalid be-

wo T „ • -11 i -DM J T i. cause it fails to prescribe the time it shall

73. Louisville, etc., Railroad v. Inter- • • r u ^ • i i.i
o<.^4.„ r'^™^,^ ^J n^JL -inc T^ A KA^ remain in force, but in such case the or-
state Commerce Comm., 195 i'ed. 541. , . . ' . ,

. . der remains in force for two years, the

74. Form and requisites of order.— maximum time prescribed l)y the statute;
American Sugar Rcfin. Co. v. Delaware, i^it the commission should comply with
etc., R. Co., 207 Fed. 733. ^l^g implied requirement of the statute

75. Under the provision of § 15 of the and fix the time. New York, etc., R. Co.
interstate commerce law (Act Feb. 4, v. Interstate Commerce Comm., 108 Fed.
1887, c. 104, 24 Stat. 384 [U. S. Comp. 131.

St. 1901, p. 3105]), as amended by the 76. Review of courts. — Florida, etc.,

Hepburn act (Act June 29, 1906, c. 3591, R. Co. v. United States, 334 U. S. 167,

§ 4, 34 Stat. 589 rU. S. Comp. St. Supp. 34 S. Ct. 867.

1907, p. 900]), that "all orders of the 77. Affirmative order. — United States v.

commission, except for the payment of Tvouisiana, etc., R. Co., 234 U. S. 1, 34 S.

money, shall take effect within such rea- Ct. 741, Ann. Cas. 1913D, 880.

§§ 4066-4067 carriers. 3674

§ 4066. Established by Court. — Where an interstate carrier charged
plaintiff the regular posted tariff rates, plaintiff could not maintain an action at
law either under the Anti-Trust Act,"^ or the Interstate Commerce Act,'^'' for a
readjustment of such rates on the ground that the same were unreasonable or
unlawful, its remedy being by application to the Interstate Commerce Commission
to have the schedule of tariffs adjusted on a reasonable and lawful basis.^^^ It
is not within the legitimate province of a court of equity, in a controversy be-
tween interstate carriers and shippers, to interpose and fix a maximum freight
rate, either upon an independent consideration of what is a reasonable charge or
by relation to some other rate then or therefore in force, and thereupon enjoin
the carrier from demanding more than the rate so established, inasmuch as such
an order effectually deprives an interstate carrier of the right to fix its rate in
the first instance, and to change the same, which power, as it seems, is conceded
to the carrier by the Interstate Commerce Act.^^

§§ 4067-4074. Determination of Reasonableness of Rate. — § 4067.
In General. — The commission is the tribunal that is intrusted with the execu-
tion of the interstate commerce laws, and has been given very comprehensive
powers in the investigation of and determination of the proportion which the
rates charged shall bear to service rendered, and this power exists, whether the
system of rates be old or new. If old, interests will have probably become at-
tached to them, and, it may be, will be disturbed or disordered if they be changed.
Such circumstance is, of course, proper to be considered, and constitutes an ele-
ment in the problem of regulation, but it does not take jurisdiction away to en-
tertain and attempt to resolve the problem.s2 The power to determine the rea-
sonableness of interstate joint tariff rates is conferred by the Interstate Com-
merce fhe Interstate Commerce Commission has original and exclusive
jurisdiction to determine the question of the reasonableness of an established
rate for the interstate transportation of freight, and when a schedule of rates
has been duly filed and has gone into eff'ect the rates thereby prescribed are the
only lawful rates until changed by the commission, and a court has no power to
enjoin their enforcement.^^ The final determination of the reasonableness of
interstate freight rates is within the jurisdiction oi the Interstate Commerce Com-
mission and not with the courts. ^^ While a court below rightly refuses to en-
force an order of the Interstate Commerce Commission, by which it is found that
an alleged terminal charge, made by a carrier, for the delivery of live stock to
the stockyards of a city, is unjust and unreasonable, and hence violative of the

78. Established by court.— Act July 2, nia R. Co., 159 Fed. 278.

1890 c 647, 26 Stat. 209 [U. S. Comp. 81. Southern Pac. Co. v. Colorado Fuel,

St. 1901, p. 3200]. etc., Co., 42 C. C. A. 12, 101 Fed. 779.

79. Interstate Commerce Act, Feb. 4, 32. Determination of reasonableness of
1887, c. 104, 24 Stat. 379 [U. S. Comp. St. rate.— Interstate Commerce Comm. v.
1901, p. 3154]. Chicago, etc., R. Co., 218 U. S. 88, 54 L.

80. "There is no right of action either gj, 945^ 30 S. Ct. 651.

under the Anti-Trust Act or the Inter- it is no longer open to question that

state Commerce Act for a readjustment the Interstate Commerce Commission is

of tariff rates filed and posted other than ^n expert tribunal charged by law with

through the Interstate Commerce Com- the d.^termination of the reasonable or

mission. A shipper can not maintain an unreasonable character of the rate

action at law for excessive and unrea- charged for transportation in interstate

sonable freight rates exacted on interstate commerce. Decree, Tift v. Southern R.

shipments where the rates charged were Co., 138 Fed. 753, affirmed in 148 Fed.

those which had been duly fixed by the 1021, 79 C. C. A. 536.

carrier according to the act and had not gg^ Minneapolis, etc., R. Co. v. Minne-

been found to be unreasonable by the In- ^^^^^ ^gg U. S. 257, 46 L. Ed. 1151, 22 S.

terstate Commerce Commission. iexas, q^ ^qq

etc., R. Co. V. Abilene Cotton Oil Co., '. ^ , -nt ., t, r^ t^ i- n

204 U. S. 426, 51 L. Ed. 553. 27 S. Ct. 350, ^ 84. Great Northern R Co. v. Kahspell

9 Am. & Eng. Ann. Cas. 1075; Clement v. Lumber Co., 165 l-ed. 25.

Louisville, etc., R. Co., 153 Fed. 979." 85. Arlington Heights Fruit Co. v.

American Union Coal Co. v. Pennsylva- Southern Pac. Co., 175 Fed. 141.

3675 INTERSTATE COMMERCE ACT. §§ 4067-4068

act to regulate commerce, nothing in the decree refusing to execute the order of
the commission should be construed as preventing that body, if it deems it best
to do so, from hereafter commencing proceedings to correct any unreasonable-
ness in the rate resulting from the additional terminal charge as to any territory
to which the reduction referred to in the opinion, if any such there be, does not
apply.^^ The power given the Interstate Commerce Commission by the Act of
June 18, 1910, to authorize a carrier to charge less for a long than for a short
haul, does not extend to the making of an order determining the relation be-
tween long and short haul rates, irrespective of absolute rates.^'^

It is the exclusive power of the Interstate Commerce Commission, in the first
instance, to pass on the fairness of rates contained in the schedule of rates fixed
by an interstate carrier on articles transported in interstate commerce.^^

Power of Court. — Courts are without jurisdiction to determine the reason-
ableness of a tariff published and filed with the Interstate Commerce Commission,
as required by the Act of Jmie 29, 1906, unless redress be invoked primarily
through the commission.*'^

Power of Secretary of Interior. — The authority of the secretary of the in-
terior to review railway rates in Alaska, conferred on him by the Act of May 14,
1898, was superseded by the amendment of June 29, 1906, to the Interstate Com-
merce Act giving the Interstate Commerce Commission power to prescribe rates.^*^

§ 4068. Judicial Act. — The inquiry by the Interstate Commerce Commission
whether rates which have been charged and collected are reasonable, is a judicial

Determined on Evidence. — The hearing which is so provided for is not a
perfunctory one. The carrier is entitled to know and to rely on the evidence ad-
duced at it, either for or against the existing rate, and the commission is not au-
thorized to disregard it and reach a conclusion not at all justified by it. If the
rate attacked is shown to be unjust, it may be abrogated and a new one estab-
lished. But, if that is not the outcome of the hearing, and, on the contrary, it is
clearly shown that the rate is not unjust, the evidence as to this can not be put
aside, and if it is, and the commission without reference to its proceeds to con-
demn the rate and to fix another, its action is invalid.^- Tested by these prin-
ciples, an order must be held invalid as exceeding the delegated powers of the
commission, where there is no substantial evidence to sustain it. It is not merely
that the evidence preponderates in favor of the reasonableness of the rates which
have been cut down. Concededly, that would not be enough to challenge the ac-
tion of the commission. Not only is the commission vested with a dis-
cretion which can not be disturbed, and which courts intend unqualifiedly to re-
spect, but it is entitled to select the testimony which it will believe and rely upon,
according as it addresses itself to the discriminating judgment of the commis-
sion. But it is not within the authority of the commission to reduce the rates

86. Interstate Commerce Comm. v. Chi- 91. Judicial act. — Interstate Commerce
caRo, etc., R. Co., 180 U. S. 320, 46 L. Comm. v. Cincinnati, etc., R. Co., 167 U.
Ed. 1182, 22 S. Ct. 824. S. 479, 42 L. Ed. 243, 17 S. Ct. 896; Sa-

87. Act June 18, 1910, c. 309, § 8, 36 vannah, etc., R. Co. v. Florida Fruit
Stat. 547; Atchison, etc., R. Co. v. United Exch., 167 U. S. 512, 42 L. Ed. 257, 17 S.
States, 191 Fed. 856. Ct. 998.

88. Thacker Coal, etc., Co. v. Norfolk, 92. Determined on evidence. — "This
etc., R. Co., 67 W. Va. 448, 68 S. E. 107, construction of the commission's author-
28 L. R. A., N. S., 108. ity and the conditions which limit its

89. Power of court. — Starks Co. v. exercise appear to us clearly and defi-
Grand Rapids, etc., R. Co., 165 Mich. 642, nitely settled by the recent decision in
131 N. W. 143. Interstate Commerce Comm. v. Union

90. Power of secretary of interior.— Pac. R. Co., ?22 U. S. 541, 56 L. Ed. 308,
Interstate Commerce Comm. v. Hum- 32 S. Ct. 108." Louisville, etc., Railroad
boldt Steamship Co., 224 U. S. 474, 56 L. v. Interstate Commerce Comm., 195 Fed.
Ed. 849, 32 S. Ct. 556, affirming judgment, 541.

37 App. D. C. 266.

§§ 4068-4070



not merely against the weight of the evidence produced to sustain them, but with-
out anything substantial to warrant the conclusion reached or the reasons as-
signed therefor.^^

§ 4069. Question of Fact. — The question of reasonableness of a rate is
one of fact.^'* The question whether there is at any point an additional service
performed in the receipt and delivery on industrial spur tracks within the switch-
ing limits in a city of car load freight in interstate commerce, justifying an ex-
tra charge in addition to the line-haul rate to or from such city, or whether there
is a substituted service like that included in the line-haul rate, is a question of
fact on which the Interstate Commerce Commission can pass.'*^

§ 4070. Facts Considered. — From whatever standpoint the powers of the
Interstate Commerce Commission may be viewed, they touch many interests, they
may have great consequences. They are expected to be exercised in the coldest
neutrality. The commission was instituted to prevent discrimination between per-
sons and places. It would indeed be an abuse of its powers to exercise them so
as to cause either. Therefore, the outlook of the commission and its powers
must be greater than the interest of the railroads or of that which may affect
those interests. It must be as comprehensive as the interest of the whole country,
and if the problems which are presented to it are complex and difificult, the means
of solving them are as great and adequate as can be provided.^*' The interests of
both the public and the owner of the property are to be considered,'^" and those of
the carrymg company as well.®*^ In determining whether the rates charged by a
carrier to and from a city are unjust and unreasonable in themselves, the great-
est weight should be given to the following considerations : The opinions of ex-

93. Louisville, etc.. Railroad v. Inter-
state Commerce Comm., 195 Fed. 541,
citing Interstate Commerce Comm. v.
Chicago, etc., R. Co., 209 U. S. 108, SS
L. Ed. 705, 28 S. Ct. 493.

94. Question of fact. — Illinois Cent. R.
Co. V. Interstate Commerce Comm., 206
U. S. 441, 51 L. Ed. 1128, 27 S. Ct. 700;
Texas, etc., R. Co. v. Interstate Com-
merce Comm., 162 U. S. 197, 40 L. Ed.
940, 16 S. Ct. 666; Cincinnati, etc., R. Co.
'V. Interstate Commerce Comm., 162 U.
S. 184, 40 L. Ed. 935, 16 S. Ct. 700, 4 Am.
& Eng. R. Cas., N. S., 223; Interstate
Commerce Comm. v. Chicago, etc., R.
Co., 141 Fed. 1003, affirmed in 209 U. S.
108, 52 L. Ed. 705, 28 S. Ct. 493.

The reasonableness of the rate, in a
given case, depends on the facts, and the
function of the commission is to consider
these facts and give them their proper
weight. Interstate Commerce Comm. v.
Cincinnati, etc., R. Co., 167 U. S. 479,
493, 43 L. Ed. 243, 17 S. Ct. 896.

95. Interstate Commerce Comm. v.
Atchison, etc., R. Co., 234 U. S. 294, 34
S. Ct. 814; Interstate Commerce Comm.
V. Southern Pac. Co., 234 U. S. 315, 34
S. Ct. 820.

96. Facts considered. — Interstate Com-
merce Comm. V. Chicago, etc., R. Co., 218
U. S. 88, 54 L. Ed. 946, 30 S. Ct. 651; In-
terstate Commerce Comm. v. Illinois, etc.,
R. Co., 215 U. S. 452, 54 L. Ed. 280, 30
S. Ct. 155.

97. It was declared by the federal su-
preme court in Covington, etc.. Road

Co. V. feandford, 164 U. S. 578, 41 L. Ed.
560, 17 S. Ct. 198, that in determining the
question of reasonableness "its duty is to
take into consideration the interests both
of the public and of the owner of the
property." Interstate Commerce Comm.
V. Cincinnati, etc., R. Co., 167 U. S. 479,
511, 42 L. Ed. 243, 17 S. Ct. 896.

98. Interstate Commerce Comm. v. Al-
abama Mid. R. Co., 168 U. S. 144, 42 L.
Ed. 414, 18 S. Ct. 45; Texas, etc., R. Co.
V. Interstate Commerce Comm., 162 U.
S. 197, 40 L. Ed. 940, 16 S. Ct. 666.

In rate making, the welfare and advan-
tage of the great body of the citizens
who constitute the producers, shippers,
and consumers should be considered, and
also the welfare and advantage of the
various localities and of the common car-
riers. Interstate Commerce Comm. v.
Chicago, etc., R. Co., 141 Fed. 1003, af-
firmed in 209 U. S. 108, 52 L. Ed. 705, 28
S. Ct. 493.

In passing on the question of unrea-
sonable preference under the Interstate
Commerce Act, the court should con-
sider, not only the difference in the
charges, but also the convenience of the
public, the interest of the carrier, the
relative volume of the traffic involved, the
cost and profit, and the situation and cir-
cumstances of the respective customers
with reference to each other, as competi-
tive or otherwise. Interstate Commerce
Comm. V. Chicago, etc., R. Co., 141 Fed.
1003, affirmed in 28 S. Ct. 493, 209 U. S.
108, 52 L. Ed. 705.

3677 inte:rstate commerce: act. § 4070

pert witnesses, the effect of the rates charged on the growth and prosperity of
the city, the cost of transportation as compared with the rates charged and the
rates in force at numerous other cities, where the circumstances are as nearly
similar as may he to those prevailing at such city/^^

Improvements and Equipment. — In determining the rea^nableness of a
rate, the cost of permanent improvements and equipment ought not to be charged
to operating expenses. Expenditures for additions to construction and equip-
ment, as expenditures for original construction and equipments, should be reim-
bursed by all of the traffic they accommodate during the period of their duration,
and improvements that will last many years should not be charged wholly against
the revenue of a single year.^

Where Interests Dependent upon Old Rates. — If the rates are old, inter-
ests will have probably become attached to them, and it may be that such interest
will be disturbed or disordered if the rates be changed. Such circumstance is, of
course, proper to be considered, and constitutes an element in the problem of
regulation but it does not take jurisdiction away to entertain and attempt to solve
the problem.- On the other hand, the order of the commission is void, where it
manifests that that body did not merely exert the power conferred by law to
correct an unjust and unreasonable rate, but that it made the order which is
complained of upon the theory that the power was possessed to set aside a just
and reasonable rate lawfully fixed by a railroad whenever the commission deemed
that it would be equitable to shippers in a particular district to put in force a re-
duced rate.^

Costs to Carriers. — Maximum rates prescribed by the Interstate Commerce
Commission, to be just and reasonable within the constitutional limitation, must
have reasonable regard for the cost to the carrier of the service rendered and
the value of the property employed therein, and also reasonable regard for the
value of the service to the public ; and where the cost to the carrier is not kept
within reasonable limits, or for any reason its business can not reasonably be so
conducted as to render it profitable, the misfortune must fall upon the car-

Fixing of an interstate freight rate at a sum not exceeding the out-of-pocket
expense of the service would be invalid, in the absence of extraordinary circum-
stances and conditions justifying such action.^ Where a freight rate fixed by
the Interstate Commerce Commission not only was sufficient to cover the costs
of the service, the operating costs fairly apportionable to the particular traffic,
and to contribute to some extent to interest, charges, and dividends, it was not
arbitrary or unreasonable.^

Remuneration to Particular Carrier. — While it is true that a carrier has

99. Interstate Commerce Comm. v. 3. Southern Pac. R. Co. v. Interstate

Southern R. Co., 117 Fed. 741, judgment Commerce Comm., 219 U. S. 433, 55 L.

affirmed in 122 Fed. 800, GO C. C. A. 540. Ed. 283, 31 S. Ct. 288.

1. Permanent improvements and equip- 4^ Costs to carrier.— Missouri, etc., R.
ment.— Ilhnois Cent. R. Co. z;. Interstate Co. v. Interstate Commerce Comm., ]64
Commerce Comm., 20G U. S. 441, 51 L. ped 645

Ed. 1128, 27 S. Ct. 700, distinguishing Un- _* ..', • ^ -o n tt v j

;^„ -Po^ x> n^ -, n\.:<-^A cV„4.„^ nn tt 5- Atchison, etc., R. Co. v. United

ion rac. K. Lo. v. United States, 99 U. c^ .. ohq v a t;«

S. 402, 25 L. Ed. 274, 14 Ct. CI. 587. states, ^03 i^ed. 5b.

Online LibraryThomas Johnson MichieA treatise on the law of carriers (Volume 4) → online text (page 108 of 214)