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stances and conditions within the meaning of the act, and a discrimination in
favor of any such shipper over others is unlawful under said sectionJ*'

To Persons Similarly Situated. — The carriers are better qualified to ad-
just such matters than any court or board of public administration, and, within
the limitations suggested, it is safe and wise to leave to their traffic managers the
adjusting of dissimilar circumstances and conditions to their business. This last
sentence does not declare that the determination of the extent to which discrim-
ination is justified by circumstances and conditions should be left to the carriers,
but means only that, when once a substantial dissimilarity of circumstances and
conditions has been made to appear, the carriers are, from the nature of the
question, better fitted to adjust their rates to suit such dissimiliarity of circum-
stances and conditions than courts of commissions. '^ The Interstate Commerce
Act allows difi:erential and discriminative rates so long as they are not unjust or
do not operate unfairly, and the essence of the act is that whatever the rate is it
shall be the same to all persons similarly situated. "-

Similar Points of Shipment and Destination. — That carriers transport
coal of other shippers from practically the same territory at the same rates to the
same territory and at the same time refuse to carry petitioners' coal shows unjust

In respect to passenger traffic, the positions of the respective persons, or
classes, between whom difl:'erences in charges are made, must be compared with
each other, and there must be found to exist substantial identity of situation and
of service, accompanied by irregularity and partiality resulting in undue advan-
tage to one, or undue disadvantage to the other, in order to constitute unjust dis-

68. Contract for continuous shipment.— Mid. R. Co., 168 U. S. 144, 42 L. Ed. 414,
Pennsylvania R. Co. v. International Coal 18 S. Ct. 45.

Min. Co., 97 C. C. A. 383, 173 Fed. 1. 72. Pittsburgh, etc., R. Co. v. Mitchell,

69. Delaware, etc., R. Co. v. Interstate 175 Ind. 196, 91 N. E. 735, 93 N. E. 996.
Commerce Comm., 166 Fed. 498. 73. Similar points of shipment and des-

70. Coal shippers. — Langdon v. Pennsyl- tination. — Stony Fork Coal Co. v. Louis-
vania R. Co., 194 Fed. 486. ville, etc., R. Co., 195 Fed. 88.

71. To persons similarly situated.— In- 74. Interstate Commerce Comm. v. Balti-
terstate Commerce Comm. v. Alabama more, etc., R. Co., 145 U. S. 263, 36 L.

Ed. 699. 12 S. Ct. 844.


The ownership or nonownership by the shipper of the goods tendered for
carriage is not a dissimilar circumstance and condition, within the meaning of
Act Feb. 4, 1887, prohibiting inequahty and discrimination in rates. A carrier
may not, therefore, under the Act make the ownership of goods tendered to it
for carriage the criterion by which its charge for such carriage is to be meas-

Facilities for Delivery. — Differences with respect to competition between
coal intended for railway consumption and other coal, and with respect to the
manner of delivery, depending upon a diff'erence in the facilities possessed by
the railroads and other consignees, do not make the interstate traffic therein dis-
similar in circumstances and conditions, within the meaning of the Act of Febru-
ary 4, 1887, so as to justify the giving of a power rate for the transportation of
railway fuel coal than is given to shippers of other coal between the same points."^^
In its most abstract form the simple statement of the controversy is whether
the companies may charge a different rate for the transportation of fuel coal to a
given point than for the transportation of a commercial coal to the same point.
The commission insisted upon the simplicity of the problem and contended that
there was nothing in the conditions of the traffic which dispensed with the clear
legal duty of the companies under the Interstate Commerce Act to carry for all
shippers alike. The fuel and commercial coal went to the same point, and were
delivered at the same point. There was, it is true, a difference in the manner of
delivery, depending upon the difference in the facilities possessed by the rail-
roads and other consignees, and it was urged that the shipment of the fuel coal
to a particular railroad "for the use of that railroad" makes special the traffic.
And, further, that "a railroad is not a person," but is "rather in the nature of a
geographical division and extends through long distances." The court held that
it could not accept the likeness nor the distinctions which were said to establish it,
and that the railroad company could not be put out of view as a favored

Facilities. — Diff'erences as to competition between coal intended for railway
consumption and other coal, depending on diff'erence in facilities possessed by
the different parties, do not make interstate commerce therein dissimilar so as
to justify the giving of a lower rate for transportation of railway coal."'*

Shipment in Carloads. — A railroad company is not required by the Inter-
state Commerce Act to give the same carload rates on interstate shipments to
forwarding agents who solicit property for shipment from different owners, each
having less than a car load, and combine it into carload lots, that it makes on
carload shipments by a single owner; the charges in such case not being for "a
like and contemporaneous service in the transportation of a like kind of traffic
under substantially similar circumstances and conditions," so as to render the
difference in the rates made an unlawful discrimination.''''-^

Shipments over Competitive Lines. — The phrase "under substantially simi-
lar circumstances and conditions," as used in the second section of the act refers
to the matter of carriage, and does not include competition between rival routes,
is not open to the criticism that different meanings are attributed to the same
words when found in different sections of the act, because, as the purposes of
the several sections are different, the ])hrase in question must be read, in the

75. Interstate Commerce Comm. v. Del- U. Ed. 1107, 32 S. Ct. 742, Ann. Cas.
aware, etc., R. Co., 220 U. S. 235, .55 L. Ct. 742, Ann. Cas. 1914A, 504.

Ed. 448. 31 vS. Ct. 392, reversing decree in 78. Facilities. — Interstate Commerce

1<;() Fed. 499. Comm. v. BaUimore, etc., R. Co., 225 U.

76. Facilities for delivery.— Interstate vS. 320, 56 L. Ed. 1107, 32 S. Ct. 742, Ann.
Commerce Comm. v. Baltimore, etc., R. Cas. 19 14. A, 50 1.

Co., 225 U. S. 326, 56 L. Ed. 1107, 32 S. 79 Shipment in carloads.— Ennd(|uist v.

Ct. 742, Ann. Cas. 1914A, 504. Grand Trunk Western R. Co., 121 Fed.

77. Interstate Commerce Comm. v. 915.
Baltimore, etc., R. Co., 225 U. S. 320, 50

§§ 4076-4078 carriers. 3690

second section, as restricted to the case of shippers over the same road, thus
leaving no room for the operation of competition, but in the other sections, it
covers the entire tract of interstate and foreign commerce, and a meaning must
be given to the phrase wide enough to include all the facts that have a legitimate
bearing on the situation— among which is found the fact of competition when it
affects rates. ^^

§ 4077. Persons Discriminated against. — The provision of the act pro-
hibiting unjust discriminations in charges has reference to the service rendered,
and not to the person of the consignor or consignee. ^^ Because a carrier has the
power to prescribe rates, it does not follow that it can discriminate as to those
who shall be entitled to avail themselves of them.^-

Forwarding Agents. — A forwarding agent is a person within the meaning of
the Act of February 4, 1887, forbidding preferences and discriminations in rates.
Therefore a carrier may not forbid the aggregation of the shipments of various
owners for the purpose of carload rating in official classification territory, or the
combination of such shipments by forwarding agents for that purpose, where
preferences and discriminations forbidden by the Act will result from the carrier's
action. S3 The proposition that, as the wide range of carload rates and the extent
of the facility for combining articles for the purpose of obtaining such rates al-
lowed in official classification territory are the result of the voluntary act of the
railroads, therefore the power existed in the railroads to restrict and limit the
enjoyment of such rate, as was done by the assailed rules, rests upon the fallacious
assumption that because a carrier has the authority to fix rates, it has the right to
discriminate as to those who shall be entitled to avail themselves of them.'^-*

Shipper Who Has Accepted Bonus. — An undue advantage and unlawful
discrimination forbidden by the act is accorded by a contract between a packing
house firm and a stockyard company, by which the company paid a bonus to
the packers if they would erect their new plant adjacent to the stockyard instead
of in another city as proposed, and operate the plant, and buy only such stock as
moved through such stockyards, and pay regular charges on live stock not so
bought as if the same had moved to the stockyards. ^•''

Shippers Estopped by Contract. — Shippers subjected to discriminatory
charges for delivery and receipt on industrial spur tracks within the switching
limits in a city of car load freight in interstate commerce are not estopped to
bring the matter before the Interstate Commerce Commission, because, when
making the contracts under which the spur tracks were constructed, the shippers
consented to a special charge when freight should be received and delivered

§§ 4078-4083. Determining Discrimination and Preference — § 40 7 8^
Competition. — The interstate commerce commission, in considering the question
whether there has been an unjust discrimination against one locality, or an undue
preference to another locality, in the rates fixed by a railroad company for the
transportation of passengers or freight to such localities, is bound to take into

80. Shipments over competitive lines. — 393, reversing 16G Fed. 499.

Wight V. United States, 167 U. S. 512, 42 84. Interstate Commerce Comm. v. Del-

L. Ed. 258, 17 S. Ct. 822; Interstate Com- aware, etc., R. Co., 220 U. S. 235, 55 L.

merce Comm. v. Alabama Mid. R. Co., 168 Ed. 448, 31 S. Ct. 392.

U. S. 144, 42 L. Ed. 414, 18 S. Ct. 45. 85. Shipper who has accepted bonus.—

81. Persons discriminated against. — United States v. Union Stockyard, etc.,
United States v. Wells, Fargo Exp. Co., Co., 226 U. S. 286, 33 S. Ct. S3, modifying
161 Fed. 606. judgment Attorney General v. Union

82. Interstate Commerce Comm. v. Dela- Stockyard, etc., Co., 192 Fed. 330.

ware, etc., R. Co., 220 U. S. 235, 55 L. 86. Shippers estopped by contract.— In-

Ed. 448, 31 S. Ct. 392. terstate Commerce Comm. v. Atchison,

83. Forwarding agents.— Interstate Com- etc., R. Co., 234 U. S. 294, 34 S. Ct. 814;
merce Comm. v. Delaware, etc., R. Co., Interstate Commerce Comm. v. Southern
220 U. S. 235, 55 L. Ed. 448, 31 S. Ct. Pac. Co., 234 U. S. 315, 34 S. Ct. 820.

3691 INTERSTATE COMMERCE ACT. §§ 4078-4079

consideration the existence of competition with such railroad company in one
of such locahties, to accept evidence thereof, and to investigate and decide
thereon ; and its failure to do so, if the existence of such competition is put in
issue by the parties, renders its action erroneous.^" The making of a lesser rate
to a more distant and competitive point than is charged to a nearer noncompeti-
tive point is not an unjust discrimination against the nearer point, nor does it give
an undue preference to the more distant point, in violation of the Interstate Com-
merce Act, where such rate is induced by real and substantial competition.'^'^

After Purchase of Competing Line. — The fact that a railroad company has
acquired the ownership of the only road which previously competed with its own
for business at a certain point can not affect the question whether its rates un-
justly discriminate against such point in favor of another point where competition
exists, where it affirmatively appears that the rates to the noncompetitive point
have not been increased since the purchase of the competing road.^"-*

Statute Not Intended to Prevent Competition. — The complainant's bill
alleged that it was a wholesale dealer in merchandise, located at Portland ; that
the defendants, owners of connecting railroad lines, had established a schedule
of joint-freight traffic between Portland and points in Idaho on the second line ;
that such second road, in connection with a third, had also established a schedule
of joint rates on freight from San Francisco to the same points, under which
the charge from San Francisco was the same as from Portland, although the
distance was greater; and that, under the divisions made between the respective
roads, the second road received a smaller rate, relative to the length of the haul
over its line, under the latter than under the former schedule, in which the haul
was from the opposite direction. The bill charged that such facts constituted
an undue preference in favor of San Francisco and its merchants over Portland
and its merchants, in violation of § 3 of the Interstate Commerce Law, and that
therefore the rates charged from Portland were unjust and unreasonable, under
§ 1 of such law. The bill stated no grounds for relief under either section, for
the reason that it isjiot the purpose of the third section of the act to prevent com-
petition in rates between dift"erent points on different lines of road.^"

§ 4079. Quantity of Goods Shipped. — Prior to the enactment of the In-
terstate Commerce Act the courts were of the opinion that discriminations by
railway carriers in the rates of freight charged to shippers, based solely on the
ground of the quantity of freight shipped, without reference to any conditions
tending to decrease the cost of transportation, were contrary to sound public
policy, and inconsistent with the obligations of such carriers to the public. ^^
It might well be that shippers would be induced to increase their traffic with a
carrier by the offer of such discrimination, perhaps by withdrawing part of it
from a rival carrier, perhaps by stimulating the shipper to enlarge his business
operations ; and thus the discrimination might be profitable to the carrier. The
English courts, in cases arising under the English Traffic Act, have held that
preferences given to particular shippers to induce them not to divert traffic
from the carrier, or to induce them to transfer traffic to one carrier which other-
wise would go to another carrier, are unlawful, and can not be justified on the
ground of profit to the carrier allowing them. If they were to justify a discrim-

87. Determining discrimination. — ^Intcr- 90. Statute not intended to prevent corn-
state Commerce Comm. v. Louisville, etc., petition. — Allen v. Oregon R., etc., Co., 9S
R. Co., !?> Fed. 409. i'ed. in.

88. Interstate Commerce Comni. v. 91. Quantity of goods shipped. — Inter-
Soutlicrn R. Co., 117 Fed. 741, judgment state Commerce Comm. v. Texas, etc., R.
affirmed in (U) C. C. A. ;V10, IL'li I'\'d. HOO. Co., .'52 Fed. 187, citing Hays & Co. v.

89. After purchase of competing line. — Pennsylvania Co., 12 I"ed. 309, 4 Ky. L.
Interstate Commerce Comm. v. Soutiiern Rep. 87; Burlington, etc., Co. v. North-
R. Co., 117 Fed. 741, judgment affirmed in western Fuel Co., 31 Fed. G52.

00 C. C. A. .'540, 122 I'"cd. 800.

■^§ 4079-4081 CARRIERS. 3692

ination upon such reasons, a railway company might in any case grant a pref-
erence to one person over another, provided it acted bona fide in the belief that
such a course would be to its advantage. A railway company can not, merely for
the sake of increasing their traffic, reduce their rates in favor of individual cus-
tomers, unless, at all events, there is a sufficient consideration for the reduction,
which shall lessen the cost to the company of the conveyance of their traffic, or
some equivalent or other services are rendered to them by such individuals in
relation to such traffic.'-*- The Interstate Commerce Act would be emasculated
in its remedial efficacy, if not practically nullified, if a carrier can justify a dis-
■crimination in rates merely upon the ground that, unless it is given, the traffic
obtained by giving it would go to a competing carrier. A shipper having a choice
between competing carriers would only have to refuse to send his goods by
one unless given exceptional rates to justify that one in making the discrimina-
tion in his favor on the ground of the necessity of the situation.^^

§ 4080. Long and Short Haul. — In determining the question whether a
'difi^erence in rates between points of shipment involves an unjust discrimination
or an undue preference by a railroad company, it is error for the interstate com-
merce commission to reach its conclusion solely by contrasting the distance of
such places, respectively, from the starting point, or upon a mileage basis, without
taking into account the existence of competitive rates to one of such places.^"*

Where Long and Short Haul Clause Not Violated. — Where a lower rate
for a long than for an included short haul is justified by dissimilar circumstances
and conditions, and does not violate § 4 of the interstate commerce law, prohibit-
ing a greater charge for a shorter than for a longer distance, it can not be held
an undue preference, within the meaning of § 3.-'^

§ 4081. Disparity between Through and Local Rates. — The mere fact
that the disparity between the through and the local rates was considerable did
not, of itself, warrant the circuit court of appeals in finding that such disparity
constituted an undue discrimination — much less did it justify the court in finding
that the entire difference between the two rates was undue or unreasonable,
especially as there was no person, firm, or corporation complaining that he or
they had beei;. aggrieved by such disparity.^^ A carrier's rates on through busi-
ness do not prove that a local rate is unreasonable, nor can the local rate throw
light on the justice or injustice of discrimination between nonlocal shipments of
the same origin and destination.'*"

Question for Jury. — Whether the difference between a local rate and a through
rate is an undue and unreasonable preference or advantage over the local shipper,
within the meaning of the Interstate Commerce Act, is a question for the jury.^^

92. Interstate Commerce Comm. v. v. Southern R. Co., 149 Fed. 609, affirmed
Texas, etc., R. Co., 52 Fed. 187, citing Har- in 82 C. C. A. 614, 153 Fed. 728.

ris V. Cockermouth & Worthington R. Co. Congress did not intend to leave car-

(Eng.), 3 C. B., N. S., 693; Evershed v. riers the power to grant undue prefer-

London & Northwestern R. Co. (Eng.), ences, or to subject persons or places

2 Q. B. Div. 254. to undue disadvantages, by any devices,

93. Interstate Commerce Comm. v. or by any adjustment of joint through
Texas, etc., R. Co., 52 Fed. 187. rates with relation to local rates. When

94. Long and short haul. — Interstate two carriers establish a joint through
Commerce Comm. v. Louisville, etc., R. rate, the proportion thereof that one car-
Co., 73 Fed. 409. rier receives for carriage of property be-

95. Where long and short haul clause tween two points on its line may be com-
■not violated. — Interstate Commerce pared with its local rates between the
Comm. V. Western, etc., R. Co., 88 Fed. same points, for the purpose of establish-
186. ing that an unreasonable preference has

96. Disparity between through and lo- been given, or that a shipper has been
cal rates. — Texas, etc., R. Co. v. Inter- subjected to an undue disadvantage,
stale Commerce Comm., 162 U. S. 197, United States v. Tozer, 39 Fed. 904.

40 L. Ed. 940, 16 S. Ct. 666. 98. Question for jury. — United States

97. Judgment, St. Louis, etc.. Grain Co. v. Tozer, 39 Fed. 369; S. C, 39 Fed. 904.

3693 interstate; commerce act. §§ 4082-4084

§ 4082. Disparity in Rates between Different Localities. — The com-
clainant's bill alleged that it was a wholesale dealer in merchandise, located in
Portland ; that the defendants, owners of connecting lines of railroad, had estab-
lished a schedule of joint freight tariffs between Portland and points in Idaho and
Utah, on the second line of road, which were unreasonable and excessive, both
a? a whole and the proportion thereof received by each company. But the injury
-complained of did not arise from the fact that such rates were unreasonable in
themselves, but that they were excessive as compared with other rates charged
to the same points on shipments from the opposite direction under a joint tariff"
between the second company and a third, which gave San Francisco merchants
the same rate to such points as complainant, by reason of which fact complainant
was unable to compete wath the San Francisco merchants at such points. The
relief prayed for was that the second company be enjoined from charging, under
any joint rate with its codefendant from Portland, any greater rate per ton or
fraction thereof per mile for carriage over its road than it charged for the car-
riage of like property per ton or fraction thereof per mile under its joint rate
from San Francisco. The bill stated no grounds for relief under the interstate
commerce law; its gravamen being, not the excessive rates, but the eciuality of
rates between San Francisco and Portland. ^^

Rates Reasonable in Themselves. — Though the preference given to one lo-
cality or the disadvantage to which the other is subjected is not due to the volun-
tary act of the carrier, and although the interstate rates in force may be reason-
able in themselves, the interstate commerce commission can correct the discrim-
ination by requiring a just equalization in rates between the tw^o localities. ^

Power of Commission to Determine. — Section 15 of the Interstate Com-
merce Act of Feb. 4, 1887, as amended by Act June 29, 1906, confers on the
interstate commerce commission ample power, in a hearing under § 13, to deter-
mine whether rates put in force by carriers are unjustly discriminatory as be-
tween two cities, to extend the scope of its examination far enough to arrive at
the true situation. -

Court Can Not Determine. — The question whether an undue preference to
any locality forbidden by the Interstate Commerce Act arose from the operation
of the intrastate rate as compared with an interstate rate, or whether any locality
was unreasonably prejudiced, would be for the determination of the interstate
commerce commission and not for the courts."'

§ 4083. Division of Freight by Connecting Carriers. ^ — The proportion
in which freight earned by two connecting railroads under a joint-tariff schedule
is divided between them is a matter for their consideration alone, and can not be
taken cognizance of by a court for the purpose of determining that the share re-
ceived by one constitutes an unjust or discriminative rate, under the interstate
■commerce law.*

§ 4084. Special Rates. — A railway contract, whereby a shij)per of lumber
is allowed a special rate, which gives such shipper a preference of from one to
two cents a pound over other shippers of lumber, is in violation of the interstate

99. Disparity in rates between differ- against Newport News, and an order re-

ent localities. — Allen v. Oregon R., etc., quiring the same rates to be maintained

Co., 10(5 Fed. 20,5. with respect to each city held within the

1. Rates reasonable in themselves. — power of the commission. Southern R.
Texas, etc.. R. Co. v. United States, 205 Co. v. United States, 204 Fed. 40.5.
Fed. 380. 3. Court can not determine. — Simpson

2. Power of commission to determine. ?'. Shepard, ,'{.'{ S. Ct. 7:i\). 2M) U. S. .l.'SS,
— Findings by the interstate commerce 57 L. Kd. 1511, 48 L. R. A., N. S., 1151,
commission that rates put in force by modifying decree Shepard v. Northern
Southern railroads between Norfolk and Pac. R. Co., 184 Fed. 705.

points in the southeastern territory, and 4. Connecting carriers. -.Allen 7'. Ore-

between Newport News and the same gon R., etc., Co., 98 Fed. 10.
points, were unjustly discriminatory

§§ 4084-4085



commerce law, so that it can not be enforced as relating to interstate shipments.-'*
Where an interstate carrier had not provided a special rate for expedited ship-

Online LibraryThomas Johnson MichieA treatise on the law of carriers (Volume 4) → online text (page 111 of 214)