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does not justify the making of freight rates to Chattanooga ranging from twenty-
five to seventy-four per centum higher on the different classes of freight than
those charged on similar classes to Nashville, over the same route, which is one
hundred and fifty-one miles beyond Chattanooga. Such rates are both an un-
lawful discrimination, under § 3, and a violation of § 4; and an order of the

32. Must be actual and material.^Inter- 373, 47 L. Ed. 1047.

state- Commerce Comm. v. Alabama Mid. 35. Louisville, etc., R. Co. v. Behlmer,

R. Co., 168 U. S. 144, 42 L. Ed. 414, 18 175 U. S. G4S, 44 L. Ed. 309, 20 S. Ct. 209.

S. Ct. 45. 36. Under construction of act by com-

33. Interstate Commerce Comm. v. mission. — Interstate Commerce Comm. v.
Southern R. Co., 117 Fed. 741, judgment Louisville, etc., R. Co., 190 U. S. 273, 47
affirmed in 60 C. C. A. 540, 122 Fed. 800. L. Ed. 1047, 23 S. Ct. 687.

34. The possibility of competition aris- 37. What are competing carriers.^In-
ing at a particular point does not render tcrstate Commerce Comm. v. Alabama
freight rates to that point, though higher Mid. R. Co., 168 U. S. 144, 42 L. Ed. 414,
than those for a longer haul to a point 18 S. Ct. 45.

where competition prevails, olinoxious to 38. Interstate Commerce Comm. v. Ala-
the prohibition of the Interstate Commerce bama Mid. R. Co., 168 U. S. 144, 42 L.
Act [U. S. Comp. St. 1901, p. 3154] against Ed. 414, 18 S. Ct. 45, followed in Brewer
a greater charge for a shorter than for a z'. Central, etc., R. Co., 84 Fed. 258.
longer haul under substantially similar 39. Interstate Commerce Comm. v. Ala-
circumstances and conditions. Decree, I)ama Mid. R. Co., 168 U. S. 144, 42 L.
Louisville, etc., R. Co. v. Interstate Com- Ed. 414, 18 S. Ct. 45; Illinois Cent. R.
merce Comm., 108 Fed. 988, 46 C. C. A. Co. v. Interstate Commerce Comm., 206
685, affirmed in 23 S. Ct. 687, 190 U. S. U. S. 441, 51 L. Ed. 1128, 27 S. Ct. 700.

4 Car— 39



§ 4099 CARRIERS. 3716

interstate commerce commission, forbidding higher charges to Chattanooga than
to Nashville, will be enforced.'*'^

Where Charge Unjust or Unreasonable. — The right of a carrier to take
into consideration the existence of competition as the producing cause of dissim-
ilar circumstances and conditions is subject to the requirement that all rates shall
be just and reasonable and that competition shall not be artificial or merely con-
jectural, but material and substantial.^ ^ Where a lower rate charged for the
carriage of freight to a longer-distance point results solely from the controlling
influence of competition at such point, which renders the circumstances and con-
ditions substantially dissimilar from those existing at an intermediate point, so
as to exclude the application to the case of the fourth section of the act, and such
competitive rate is not so low as to be unremunerative to the carrier, it can not
afford basis for a claim of undue and unreasonable preference or advantage in
favor of the competitive point, or of unreasonable prejudice or disadvantage
against the intermediate point, within the inhibition of the third section."*-

Where Preference or Discrimination Is Produced. — While a carrier may
take into consideration the existence of competition as the producing cause of dis-
similar circumstances and conditions, his right to do so is governed by the absolute
command of the statute that all rates shall be just and reasonable, and that no
undue discrimination be brought about, though, in the nature of things, this latter
consideration may in many cases, be involved in the determination of whether
competition was such as created a substantial dissimilarity of condition.-^^ But
where in consequence of competitive conditions existing at a particular point, the
dissimilarity of circumstance provided in the fourth section of the act arises, it
may justify a carrier on his own motion in charging a lesser rate for a longer
haul to the competitive point than is asked for the shorter haul to the npncompet-
itive point, although in so doing a preference in favor of the competitive point
arises or a discrimination against the noncompetitive point is produced. A pref-
erence or discrimination so arising or produced is not an undue preference or un-
just discrimination prohibited by the third section. ^-^

Where Distant Point Is Commercial Center.— A greater charge for a
shorter than for a longer haul is not unlawful, when the rate for the shorter
distance is not in itself unreasonable, and the more distant point is a commercial
center and large distributing point, where strong competition exists both by land
and water, none of which conditions are present at the other point. "^^

Presumptions. — The effect of the competition of rival lines in justifying
rates is, in every case, a question of fact, which is not to be settled by any pre-
sumptions, either prima facie or conclusive. The question is to be tried in the
courts, under the same rules as to presumptions, burden of proof, and the like,
whether or not the carrier has applied to the commission, in the first instance,
for permission to charge less for a longer than for a shorter haul.-^G

Competition with Foreign Carriers. — The interstate commerce commission
holds that where railroads which are subject to the act to regulate commerce

40. Interstate Commerce Comm. v. East a contrary rule is not sustained by the
Tennessee etc., R. Co., 85 Fed. 107. opinions in Interstate Commerce Comm.

41. Whe.e charge unju.. or unreason- - Alabama Mid R^ Co 1^68 U^ & J44,

able. — Louisville, etc., K. Co. v. lielilmer, -^ -o n^ ., R^i-,i,-,-,^r i7f^ TT «; fiis 44
on Q Pf ono i7f; TT q (Ud 44 T V d ''.04 etc., R. Co. V. Behlmer, 175 U. £>. b4», 44
20 S. Ct. 209, 175 U. b. b48, 44 U lid. oOy. ^ .^^^ ^^^^ ^^ g^ ^^^ ^^^^ followed in

42. Interstate Commerce Comm v interstate Commerce Comm. v. Clyde
Western, etc., R. Co., 35 C. C. A. 217, 93 steamship Co., 181 U. S. 29, 45 L. Ed. 729,
Fed. 83. _ 31 s. Ct. 512.

43. Where preference or discrimination 45. Where distant point is commercial
is produced. — Louisville, etc., R. Co. v. center. — 'Brewer v. Central, etc., R. Co., S4
Behlmer, 175 U. S. 648, 44 L. Ed. 309, 20 ped. 258; Interstate Commerce Comm. v.
S. Ct. 209. Western, etc., R. Co., 88 Fed. 186.

44. East Tennessee, etc., R. Co. v. In- 46. Presumptions.— Detroit, etc., R. Co.
terstate Commerce Comm., 181 U. S. 1, v. Interstate Commerce Comm., 21 C. C.
45 L. Ed. 719, 21 S. Ct. 516, holding that A. 103, 74 Fed. 803.



3717 INTERSTATE COMMERCE ACT. §§ 4099-4100

compete with Canadian or other railroads, which are not subject to the act, such
competition constitutes dissimilar circumstances and conditions; but that competi-
tion between two railroads, both of which are subject to the act, does not con-
stitute dissimilar circumstances and conditions. The commission, however, also
holds that it has no authority to raise railroad rates. If a railroad, which is sub-
ject to the act, is met with competition from other railroads, which are also sub-
ject to the act, and the commission has no authority to require such other railroads
to increase their rates, even when the competition is ruinous, there is no practical
difference between such a case and the case of competition with railroads not
subject to the act. If the general conclusion is correct that competition will con-
stitute dissimilar circumstances and conditions, in the sense of which that term
is used in the act, there is no good reason for drawing the line where it has been
drawn by the commission. On the contrary, competition of carrier with carrier,
both subject to the act, is as much within the terms of § 4 as competition with a
carrier not subject to the act.'*"

Competition between Markets. — Competition of market with market may
not be so direct in its eft'ect as competition of carrier with carrier; but when it
does exist it is influential, and perhaps as effective and controlling, with carriers,
as to their rates, as other competition. It may therefore constitute a part of the
circumstances and conditions which a carrier can consider in fixing rates for the
transportation of goods.'*'*

§ 4100. Shipments over Same Line. — There was a clear distinction be-
tween the term "railroad," as used in the other parts of the act, and the term
"line," as used in the fourth section. The use of the word "line" is significant.
Two carriers may use the same "road," but each has its separate "line." One
railroad company may lease trackage rights to another, but the joint use of the
same track does not create the same "line" so as to compel either company to
graduate its tariff' by that of the other.-*'-^ There must be a common arrangement
between connecting carriers, such as the making of a joint tariff, before a new
"line" can be formed; and the "line" so formed under the joint tariff of connect-
ing companies is one which is separate and independent from that of either of the
connecting carriers. ^*^ No power exists at common law, and none is given by the

47. Competition with foreign carriers. — 50. Interstate Commerce Comm. v. Cin-
Interstate Commerce Comm. v. Cincin- cinnati, etc., R. Co., 56 Fed. 925.

nati, etc., R. Co., 5G Fed. 925. There is no "common arrangement" or

48. Competition between markets. — The "joint tariff" between the Georgia Rail-
fact that the rate from Cincinnati to So- road Company and its connections as to
cial Circle is greater than the joint tariff traffic to its local stations. On the con-
rate from Cincinnati to Augusta, consti- trary, there is an express refusal by that
tutes no "undue or unreasonable prejudice company to make any "common arrange-
or disadvantage" against Social Circle, ment" whatever in regard to that traffics.
and no "undue or unreasonable preference The Georgia Railroad Company demands
or advantage" in favor of Augusta. Rail- and collects its full local rates on all ship-
way companies are only bound to give ments to its local stations. Whether ship-
the same terms, to all persons alike, under ments come from points west of Atlanta,
the same conditions and circumstances; or originate at Atlanta, the rate is pre-
and any fact which produces an inequality cisely the same, and as to the Georgia
of condition, and a change of circum- Railroad the carriage is the same. Inter-
stances, justifies an inequality of charge. state Commerce Comm. v. Cincinnati,
Augusta and Social Circle are not "un- etc., R. Co., 56 Fed. 925.

der the same conditions and circum- The Cincinnati, New Orleans & Texas

stances." Interstate Commerce Comm. v. Pacific Railway Company, the Western & '

Cincinnati, etc., R. Co., 56 Fed. 925; In- Atlantic Railroad Company, and the Geor-

terstate Commerce Comm. v. Baltimore, gia Railroad Company have formed "a

etc.. R. Co., 145 U. S. 263, .36 L. Ed. 699, new and independent line," by the adop-

12 S. Ct._844. tion of a joint through tariff from Cin-

49. Shipments over same line. — Inter- cinrati to Augusta; but such "new line"
state Commerce Comm. v. Cincinnati, etc., is distinct and separate from that of either
R. Co., 56 Fed. 925; Chicago, etc., R. Co. of the railroads named. Case cited: Chi-
V. Osborne, 3 C. C. A. 347, 52 Fed. 912, cago, etc., R. Co. v. Osborne, 3 C. C. A.
53 Am. & Eng. R. Cas. 18. 347, 52 Fed. 912, 53 Am. & Eng. R. Cas.



§§ 4100-4101



CARRIIJRS.



3718



act to regulate commerce, to compel connecting railroad companies to unite in a
joint tariff, or to enter into a through-rate arrangement for transportation, unless
they desire to do so. They can not be compelled to abandon the full control of
their separate roads, and neither of them is bound to adjust its own local tariff
to suit the other. ^1

§ 4101. Through and Local Rates. — The fact that a shipper under a joint
schedule of rates over two connecting railroads is charged , a smaller rate on
through shipments over the entire length of the joint line than to intermediate
points does not establish a claim that the latter rates are unjust or unreasonable,
nor does it entitle him to claim that such rates are discriminative.^- The portion
of a through rate received by one of the companies party thereto may be less
than its local rate. All that is necessary is that the total through rate shall be
greater than the local rate, so as not to violate in this respect the long and short
haul clause.-''^ A petition alleging that a rate of tariff between two points on a
railroad, established by the company as a part of what purported to be a joint
rate on through shipments to certain points on connecting lines, was less than the
local rate charged for a shorter distance, does not show an unlawful discrimina-
tion, where the entire through rate is not shown, and it is not sufficiently alleged
that any shipments were made at the lower rate except such as were billed
through under the joint rate.^^ Where two connecting carriers unite in a joint



18. Interstate Commerce Comm. v. Cin-
cinnati, etc., R. Co., 56 Fed. 925.

Social Circle is a local station on the
Georgia Railroad, 52 miles east of At-
lanta, and 119 miles west of Augusta. The
Georgia Railroad Company charges its
full local rate from Atlanta to Social
Circle. The rate from Cincinnati to So-
cial Circle is arrived at by adding to the
rate from Cincinnati to Atlanta the full
local rate of the Georgia Railroad from
Atlanta to Social Circle. The rate thus
made from Cincinnati to Social Circle is
greater than the joint through tariff rate
from Cincinnati to Augusta. Held no vio-
lation of the "long and short haul" clause
of the act to regulate commerce, because
the two rates are not made "over the
same line," as the rate to Augusta is made
by the "line" formed by a "common ar-
rangement" between three companies for
a joint tarifT between those points; and
the rate to Social Circle is made greater
than the rate to Augusta by the Georgia
Railroad Company demanding its full lo-
cal rate on its own road, which road is
separate and independent from the "line"
made by said three companies. Interstate
Commerce Comm. v. Cincinnati, etc., R.
Co., 56 Fed. 925.

51. Interstate Commerce Comm. v. Cin-
cinnati, etc., R. Co., 56 Fed. 925. Case
quoted: Chicago, etc., R. Co. v. Osborne,
3 C. C. A. 347, 52 Fed. 912, 53 Am. &
Eng. R. Cas. 18. See also, Kentucky, etc..
Bridge Co. v. Louisville, etc., R. Co., 37
Fed. 567, 2 L. R. A. 289; Little Rock, etc.,
R. Co. V. St. Louis, etc., R. Co., 41 Fed.
559.

52. Through and local rates. — Allen v.
Oregon R., etc., Co., 98 Fed. 16.

53. Parsons v. Chicago, etc., R. Co., 167
U. S. 447, 42 L. Ed. 231, 17 S. Ct. 887;



United States v. Mellen, 53 Fed. 229, fol-
lowing Chicago, etc., R. Co. v. Osborne, 3
C. C. A. 347, 52 Fed. 912, 53 Am. & Eng.
R. Cas. 18.

The long and short haul clause of the
Interstate Commerce Act (§ 4) does not
apply to a case where the short haul rate
is a combination of the local rates of two
connecting lines, and the lower long haul
rate is a joint rate made by the two
lines acting together. United States v.
Mellen, 53 Fed. 229, following Chicago,
etc., R. Co. V. Osborne, 52 Fed. 912, 3
C. C. A. 347, 53 Am. & Eng. R. Cas. 18.

Several independent, connecting rail-
roads, forming a line from Memphis,
Tenn., to Charleston, S. C, agreed upon
a charge of 19 cents for certain freight
between those points, which sum was to
be divided between them in certain pro-
portions. Upon the same freight, from
Memphis to S., a point in South Caro-
lina, but nearer Memphis, 8 cents was
charged, the excess over the through rate
all going, however, to the road which per-
formed the transportation in South Car-
olina, and the other roads receiving only
their proportion of the through rate.
Held, that such charge was not a viola-
tion, on the part of such other roads, of
the long and short haul clause of the In-
terstate Commerce Act. Behlmer v. Lou-
isville, etc., R. Co., 71 Fed. 835.

54. A joint tariff rate established by two
connecting railroads on through ship-
ments does not constitute a standard by
which the reasonableness of local rates
on either road are to be determined, nor
does the fact that the part of such joint
rate received by one of the roads is less
than its local rate charged for a shorter
distance render it subject to the penalty
for violation of the long and short haul



3719



interstate; commerce act.



§ 4101



tarifif, they form practically a new and independent line, and that the joint rate
established over such line may be made less than the sum of the local rates, or
even less than the local rate of either company over that part of its road con-
stituting a part of the joint line, without violating the long and short haul clause
found in the fourth section of the interstate commerce law.-'^^ The foregoing
proposition is limited by the proviso that, under the first section of the Interstate
Commerce Act, all rates, whether local or joint, must be reasonable and unjust
But the contention that a local rate between two points on the same road is
necessarily unlawful because it is higher than the rate charged under a joint tarifif
for a much longer haul over a line which is composed in part of that portion of
the road to which the local rate applies, is overruled.^^ Xhe fact that a shipper
under a joint schedule of rates over two connecting railroads is charged a smaller
rate on through shipments over the entire length of the joint line than to inter-
mediate points does not establish a claim that the latter rates are unjust or un-
reasonable, nor does it entitle him to claim that such rates are discrimina-
tive.^"

Rate Fixed by Joint Agreement. — A railroad company can not justify a
charge of a greater compensation for a shorter than for a longer haul, under
substantially similar conditions, contrary to the interstate commerce law on the
ground that the rate is fixed by a joint tarifif agreement with other roads.^^

Rates Are Independent.— Where two railroad companies owing connecting
lines of road unite in a joint through tarifif, they form for the connected roads
a new and independent line, and the through tarifif on the joint line is not the
standard by which the separate tarifif of either company is to be measured in
determining whether such separate tarifif violates the act which forbids greater
compensation for a shorter than for a longer haul.'^^

Shipment from Foreign Country.— Where a through freight rate included
a rate for foreign ocean transportation, the fact that the proportion of the
through contract rate allowed for the carriage from the port of entry to destina-
tion was less than the rate scheduled for freight originating at such port of
entry and carried to the same destination did not render the lesser rate neces-
sarily unlawful as a violation of the Interstate Commerce Act.«"



clause of § 4 of the Interstate Commerce
Act. Judgment, 11 C. C. A. 489. 63 Fed.
003, affirmed in Parsons v. Chicago, etc..
R. Co., 17 S. Ct. 887, 167 U. S. 447, 42
L. Ed. 231.

55. Parsons v. Chicago, etc., R. Co., 11
C. C. A. 489, 63 Fed. 903; Chicago, etc..
R. Co. V. Osborne, 3 C. C. A. 347, 52 Fed.
912, 53 Am. & Eng. R. Cas. 18.

56. Coeur D'Alene. etc., R. Co. v. Un-
ion Pac. R. Co., 49 Wash. 244, 95 Pac. 71.

57. Allen v. Oregon R., etc.. Co., 98
Fed. 16.

58. Rate fixed by joint agreement. —
Osborne v. Chicago, etc.. R. Co.. 48
Fed. 49.

The interstate commerce law (Act
Cong. Feb. 1887) provides (§ 4) that a
common carrier shall not charge a greater
compensation for the transportation of a
like kind of property, under substantially
similar circumstances, for a shorter than
for a longer distance over the same line,
in the same direction, the shorter being
included in the longer distance. _ Held
that, in an action for breach of this sec-
tion, the fact that the rate for the longer
distance was established jointly between
defendant and connecting railroads does



not exempt defendant from liability. Ju-
nod V. Chicago, etc., R. Co., 47 Fed. 290.

59. Rates are independent. — Chicago
etc., R. Co. V. Osborne, 52 Fed. 912, 3
C. C. A. 347, 53 Am. & Eng. R. Cas. 18.
reversing 48 Fed. 49; Tozer v. United
States, 52 Fed. 917.

60. Shipment from foreign country.^
Fisher v. Great Northern R. Co., 49 Wash.
205, 95 Pac. 77.

Defendant carrier published a through
rate on canned goods from Stavanger,
Norway, to Seattle, of 85 cents per 100.
The pul:)lished schedule also contained a
statement that such rates would be pro-
tected only when the ocean rate procur-
able was such as to allow the rail carrier
from the Atlantic ports a minimum pro-
portion of 75 cents per 100, and if tlie
difference between the through published
rate and the rail line's minimum propor-
tion of 75 cents per 100 was less than the
ocean proportion, the through rate would
be the ocean proportion plus 75 cents
per 100. Defendant made a contract rate
for tlie sliipment of canned goods fo*-
plaintiff between such ports in accordance
witli such published rate, but when the
shipment was made the best ocean rate



§§ 4102-4103



carrie:rs.



3720



§ 4102. Group Rates. — It is concededly not an infringement of the long
and short haul clause for a carrier engaged in interstate commerce, by a so-called
"group rate," to charge the same for like kinds of freight to and from different
points on its line from and to points outside the state.*^^ The railroad com-
panies could consider the competitive rates prevailing at a competitive point
and use those rates as a basis for the charges to points within the competitive
area in order thereby to give a lower rate to such points than they otherwise
would have enjoyed. It was not true that because the competitive rate to the
competitive point was not unduly low, therefore any higher charge to an inter-
mediate point, for the shorter distance, was unreasonable.^- A violation of the
:ong and short haul clause can not be justified because the result comes about
by reason of the selection of different points on the line as a basis for computing
rates, so as to charge one rate over one part of the road and a different rate
over anotlier part.^^

§ 4103. Cartage Charges. — The fourth section of the interstate commerce
law, prohibiting a greater charge for a shorter than for a longer haul over the
same line in the same direction, in respect to railroad transportation, applies
only to carriage by rail; and when the property has been discharged from the
company's cars at the city of their destination, without any greater charge for
the longer haul, the obligations of the company under this section are fulfilled,
and it is no violation thereof for the company to then furnish free cartage to the
stores or business houses of the consignees.*^-* But where a railroad company
ships goods from without the state to its station in the more distant of two cities,
free cartage by the company to the business section of the city, for delivery to
the consignees, is a violation of the long and short haul clause of the Interstate
Commerce Act, when the same freight rates are charged to the merchants of a
jiearer city, through which the road passes to reach the city given free cartage, but



procurable was 38.7 cents per 100 on
canned goods, which, added to the car-
rier's minimum, 75 cents per 100, made
the total tariff of $1,137, which defendant
claimed the right to charge. Held, that,
in the absence of proof by defendant that
the conditions attending ocean competi-
tion did not justify the contract rate stip-
ulated for, thereby rendering it unlawful,
such contract rate was not necessarily in
violation of the interstate commerce law,
and was therefore enforceable. Fisher v.
Great Northern R. Co., 49 Wash. 205, 95
Pac. 77.

61. Group rates. — Interstate Commerce
Comm. V. Detroit, etc., R. Co., 167 U. S.
633, 42 L. Ed. 306, 17 S. Ct. 986.

62. The railroad companies had a right
to take the lower rate prevailing at At-
lanta (a competitive point) as a basis for
the charge made to places in territory
contiguous to Atlanta, and to ask in ad-
dition to the low competitive rate the
local rate from Atlanta to such places,
provided thereby no increased charges re-
sulted over those which would have been
occasioned if the low rate to Atlanta had
been left out of view. That is to say,
it seems incontrovertible that in making
the rate, as the railroads had a right to
meet che competition, they were author-
ized to give the shippers the benefit of
it liy according to them a lower rate than



Online LibraryThomas Johnson MichieA treatise on the law of carriers (Volume 4) → online text (page 116 of 214)