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would otherwise have been afforded.



True it is, that by this method a lower
rate from New Orleans than was ex-
acted at LaGrange obtained at the longer
distance places lying between LaGrange
and Atlanta, but this was only the result
of their proximity to the competitive
point, and they hence obtained only the
advantage resulting from their situation.
Interstate Commerce Comm. v. Louis-
ville, etc., R. Co., 190 U. S. 273, 47 L.
Ed. 1047, 23 S. Ct. 687.

63. Osborne v. Chicago, etc., R. Co.,
48 Fed. 49.

64. Free cartage. — ludgment, 21 C. C.
A. 103, 74 Fed. 803, afifirmed in Inter-
state Commerce Comm. v. Detroit, etc.,
R. Co., 167 U. S. 633, 42 L. Ed. 306, 17
S. Ct. 986.

The prohibition of the fourth section
is against a greater compensation for the
shorter haul, "in the aggregate," which
includes, not only the "rates" and "fares"
(for transportation on the rails proper),
but also the "charges" (for accessorial
services, including cartage). And there-
fore, where the "aggregate" is the same
for both the shorter and the longer haul,
the section is not violated, in its very
terms, although in the case of the longer
haul an additional cartage service is fur-
nished, which is not furnished in the case
of the shorter haul. Detroit, etc., R. Co.
V. Interstate Commerce Comm., 74 Fed.
803, 21 C. C. A. 103.



3721 interstate; commerce act. §§ 4103-4107

where such merchants are obliged to cart their goods from the raihvay station to
their storehouses at their own expense; and such free cartage is not justified by
the fact that competitors of defendant railroad company have stations at the
more distant city, in the business center, thus placing it at a disadvantage; nor
by the fact that such city is a much larger place than the nearer city, and that
the greater amount of business which the company does at the more distant city
enables it to do carting cheaper there than at the nearer city.^^

§ 4104. Shipment Through Foreign Country. — A railroad ticket from Ft.
Worth through El Paso to the City of ^lexico, purchased at El Paso by a citizen
thereof, at a less price than the regular fare from El Paso to the City of ^lexicp,
is not void as being in violation of the United States interstate commerce act, in
that it was purchased for less than others could purchase like transportation for,
though the purchaser and the ticket agent had knowledge of the facts.^'^

§ 4105. Interest of General Public— The interest of the public, especially
at the place from which traffic moves and the place to which it is to be delivered,
as well as of that of the carrier, must be taken into consideration in determining
the right of the carrier to charge, of his own motion, a lesser sum for the longer
haul. c 7

§ 4106. Destination of Shipment.— The fact that the freight for the
longer distance was billed to some point short of the destination of the shorter
haul will not bar plaintiff's recovery, when such freight was intended to be, and
was in fact, taken to the destination of the shorter haul.^s

§ 4107. Consent of Commission to Charge.— When the circumstances and
conditions are such as to justifv it. a railroad company may charge more for the
shorter than for the longer haul without first obtaining leave from the com-
mission.^^ It may, on the contrary, establish such rate in the first instance, and
when the same is^challenged in the" courts, or before the commission, may justify
itself by showing a substantial dissimilarity of circumstances and conditions,
within the meaning of the act.'O Such charge is lawful if the circumstances and
conditions are not in fact substantially similar, and the carrier may determine
the question for himself, subject to a liabilitv for violating the act, if, on investi-
gation, the fact be found against him.'^i Competition which is actual and sub-
stantial in its effect upon rates, if resulting from the action of other carriers who
were subiect to the act to regulate commerce, may produce the dissimilarity of
circumstances and conditions provided in the fourth section of the act. so as to
enable a carrier in adjusting rates to take into view such competition without the
previous assent of the commission.'^ 2 Congress did not intend, by the fourth
section and the proviso thereto, to forbid common carriers, in cases where the
circumstances and conditions are substantially dissimilar, from making different
rates until and unless the commission shall authorize them so to do ; much less

65. Interstate Commerce Comm. v. A. 103.

Detroit, etc.. R. Co., 57 Fed. 1005. 71. Interstate Commerce Comm. v.

66. Shipment through foreign country. Atchison, etc., R. Co., 50 Fed. 295.

Mexican Cent R Co. v. Goodman 72. Interstate Commerce Comm. v. Al-

(Tex Civ ^pp) 43 S. W. 580. abama Mid. R. Co., 168 U. S. 144. 42 L.

67.' Interest of general public— Louis- Ed. 414, 18 S. Ct. 45; Texas, etc., R. Co.

ville etc R Co. v. P.clilnicr. 20 S. Ct. r. Interstate Commerce Comm., 162 U.

-209 'l75 V S 648. 44 L. I'd. 309. S. 197, 40 L. Ed. 940, 16 S. Ct. 666; Lou-

68. .Destination of shipment. - Jnnod v. isvillc, etc.. R. Co. v. Behlmer, 175 V. S.
Chicago, etc., R. Co., 47 Fed. 290. r48. 44 L. Ed. 309 20 S Ct. 209; East

69. Consent of commission to charge. Tennessee, etc., R. Co. z; Interstate Com-
— Interstate Commerce Comm. r. I'.ast merce Comm., 181 U. S. 1. 45 L. Ed.
Tennessee, etc., R. Co., 85 Fed. 107. 719, 21 S. Ct. 516; Interstate Commerce

70 Detroit etc., R.< Co. v. Interstate Comm. v. Clyde Steamship Co., 181 U.
Commerce Comm., 74 Fed. 803, 21 C. C. S. 29, 45 L. Ed. 729. 21 vS. Ct. 512.



§ 4107 CARRIERS. 3722

was it the intention of congress that the decision of the commission, if apphed to,
could not be reviewed by the courts. The provisions of § 16 of the act, which
authorize the court "to proceed to hear and determine the matter speedily as a
court of equity, and without the formal pleadings and proceedings applicable to
ordinary suits in equity, but in such manner as to do justice in the premises, and
to this end, such court shall have power, if it think fit, to direct and prosecute
in such mode and by such persons as it may appoint, all such inquiries as the
court may think needful to enable it to form a just judgment in the matter of
such petition," extend as well to an inquiry or proceeding under the fourth sec-
tion as to those arising under the other sections of the act.'^^ The provision au-
thorizing the interstate commerce commission in special cases, after investigation,
to exempt a carrier from the prohibition against charging a lower rate for a long
than for a short haul, is to be construed in harmony with the other provisions of
the act, and as not giving the commission an unlimited discretion, but imposing
upon it, not merely the right, but the duty, to grant such exemption whenever, on
investigation, it shall find that no violation of any section of the act would thereby
be involved. y\s so construed, the section is constitutional.'^"^

The dissimilarity of circumstance and condition pointed out Ijy the stat-
ute, which relieves from the long and short haul clause, arises from the command
of the statute, and not from the assent of the commission ; the law, and not the
discretion of the commission, determining the rights of the parties. It follows
that the construction affixed by the commission to the statute upon which its
entire action was predicated was wrong."-^

Where There Is Competition. — Where, in consequence of competitive con-
ditions 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
m charging a lesser rate for a longer haul to the competitive point than is asked
for the shorter haul to the non-competitive point, although in so doing a prefer-
ence in favor of the competitive point arises or a discrimination against the non-
competitive point is produced. A preference or discrimination so arising or pro-
duced is not an undue preference or unjust discrimination prohibited by the third
section."^

Revision by Commission. — But it does not mean that the action of the car-
riers, in fixing and adjusting the rates, where dissimilar circumstances and condi-
tions are shown, is not subject to revision by the commission and the courts, when
It is charged that such action has resulted in rates unjust or unreasonable, or in
unjust discriminations and preferences.'^" A railroad company being subject,
under the facts found, to the provisions of the act to regulate commerce, in respect
to its interstate freight, it follows that it was within the jurisdiction of the com-
mission to consider whether the said company, in charging a higher rate for a

73. Interstate Commerce Comm. v. 21 S. Ct. 516, holding that a contrary-
Alabama Mid. R. Co., 168 U. S. 144, 42 rule is not sustained by the opinions in
L. Ed. 414, 18 S. Ct. 45. Interstate Commerce Comm. v. Alabama

74. Atchison, etc., R. Co. v. United Mid. R. Co., 168 U. S. 144, 42 L. Ed.
States, 191 Fed. 856. 414. 18 S. Ct. 45; Louisville, etc., R. Co.

75. East Tennessee, etc., R. Co. v. In- v. Behlmer, 175 U. S. 648, 44 L. Ed. 309,
terstate Commerce Comm., 181 U. S. 1, 20 S. Ct. 209, followed in Interstate Com-
45 L. Ed. 719, 21 S. Ct. 516, citing Texas, merce Comm. v. Clyde Steamship Co.,
etc., R. Co. V. Interstate Commerce 181 U. S. 29, 45 L. Ed. 729. 21 S. Ct. 512;
Comm., 162 U. S. 197, 40 L. Ed. 940, 16 Interstate Commerce Comm. v. Louis-
S. Ct. 666; Interstate Commerce Comm. ville, etc., R. Co., 190 U. S. 273, 47 L.
V. Alabama Mid. R. Co., 168 U. S. 144, Ed. 1047, 23 S. Ct. 687.

42 L. Ed. 414, 18 S. Ct. 45; Louisville, 77. Revision by commission.— Tnter-

etc, R. Co. V. Behlmer, 175 U. S. 648, state Commerce Comm. v. Alal:»ama Mid.

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

76. Where there is competition. — East S. Ct. 45; Louisville, etc., R. Co. v. Behl-
Tennessee. etc., R. Co. v. Interstate Com- mer, 175 U. S. 648, 44 L. Ed. 309, 20 S.
merce Comm., 181 U. S. 1, 45 L. Ed. 719, Ct. 209.



Z72Z inte:rstate: commerce: act. §§ 4107-4110

shorter than for a longer distance over the same hne, in the same direction, the
shorter heing included within the longer distance, was or was not transporting
property, in transit hetween states, under "substantially similar circumstances and
conditions."'^'''

Where Prohibited by Commission. — It is not unlawful to charge more for
a shorter than for a longer haul, when the circumstances and conditions are in
fact substantially dissimilar, although the interstate commerce commission has
"made an order forbidding such charges in the particular case."*^

§ 4108. Determining Right to Different Charge. — Under the interstate
commerce law the power of determining whether a railroad company is relieved
from the operation of the long and short haul clause lies solely with the interstate
commerce commission ; and in an action for damages in a federal court for a
violation of that clause, when no authority from the commission is shown, the
company can not claim that it was justified in so doing by reason of the existence
of a secret cut rate among competing roads, whereby a large part of the traflfic
naturally tiibutary to it was diverted. ^*^

§ 4109. Establishing Zones. — The authority of the interstate commerce
commission on an application by carriers for relief from the long and short haul
clause of tliat section, extends to establishing by percentages the relation to be
maintained between the lower rate for longer hauls and the higher rate to inter-
mediate points, and to adopting zones of influence for the purposes of establishing
percentages which, as to such zones, vary on the basis of the influence of the
competition in such areas. ^^

§ 4110. Remedies. — Where the circumstances and conditions are similar, or
substantially similar, and the result to the carrier is injurious, relief can be had
only through the commission.^-

Damages. — As the right of action given by the law is one for damages, as for
a tort, any railroad company which makes the overcharge is liable for the full
amount of the damages, notwithstanding that it has shared the illegal freight with
another road under a joint tarifif agreement. ^^ In an action by a shipper against
a railroad company for charging a greater compensation for a shorter than for a
longer haul, in violation of the interstate commerce law, the measure of damages is
the excess in the rate charged for the shorter haul over that for the longer haul.'-^
It is the province of the jury, under the act, to determine whether interest shall
be allowed on the amount of the overcharge which they have found. ■^■''

Enjoining Order of Commission. — The jurisdiction given to the commerce
court of suits to enjoin orders of the interstate commerce commission, is not de-
feated so far as an order on application by carriers for relief against the long and
short haul clause of that act is concerned, on the theory that the consequence
v/ould be to enjoin a criminal prosecution.^*^

78. Cincinnati, etc., R. Co. v. Interstate ,34 S. Ct. 986; United States v. Union Pac.
Commerce Comm., 162 U. S. 184, 40 L. R. Co., 2.34 U. S. 495. 34 S. Ct. gg.*).

Ed. 935, 16 S. Ct. 700, 4 Am. & Eng. 82. Remedies.— Missouri Pac. R. Co.

R. Cas., \. S.. 223. V. Texas, etc., R. Co., 31 Fed. 862.

79. Where prohibited by commission. 83. Damages. — Osborne v. Chicago,
— Interstate Commerce Comm. v. Ala- etc., R. Co., 48 Fed. 49.

bama Mid. R. Co.. 168 U. S. 144, 42 L. 84. Osborne v. Chicago, etc., R. Co.,

Ed. 414, 18 vS. Ct. 45, followed in Brewer 48 Fed. 49.

V. Central, etc., R. Co.. 84 Fed. 258. 85. Osborne v. Chicago, etc., R. Co.,

80. Determining right to different 48 Fed. 49.

charge. — Osborne v. Chicago, etc., R. Co., 86. Enjoining order of commission. —

48 Fed. 49. See ante, "Similar Circum- United Stales -'. Atcliison, etc., R. Co.,

stances and C\.nditions," § 4098. 234 U. S. 476, 34 S. Ct. 986; United States

81. Establishing zones.— United States v. Union Pac. R. Co., 234 U. S. 495, 34
V. Atcliison, etc., R. Co., 234 U. S. 476, S. Ct. 995.



■§ 4111 CARRIERS. 3724

§ 4111. Pooling Freights. — The fifth section of the Interstate Commerce
Act provides that it shall be unlawful for any common carrier subject to the pro-
visions of the act to enter into any contract, agreement, or combination with any
other common carrier or carriers for the pooling of freights of different and com-
peting railroads, or to divide between them the aggregate or net proceeds of the
earnings of such railroads, or any portion thereof ; and in any case of an agree-
ment for the pooling of freights as aforesaid each day of its continuance is deemed
a separate offense.*' Either a distribution of property offered for transportation
among different and competing railroads in proportions and on percentages
previously agreed upon, or a money pool, whereby the aggregate or net pro-
ceeds of certain different and competing railroads are divided among them, is
prohibited.*^

Any arrangement, oral or otherwise, or combination, which has for its
purpose and eventuates in the pooling of freights of dift'erent and competing
railroads, is within the prohibition of the interstate commerce act.*^

Percentage of Rates.- — Where the initial carrier which had established a
rule by which it resented the right to route freight to destination beyond its own
line, made arrangements with the connecting carriers to give them a certain per-
centage of its through tariff rates, in order to break up rebating by such con-
necting carriers, held, that this agreement was valid, and was not a violation of
lhe provision against the pooling of freights. ^^

Main and Branch Lines. — The section of the Interstate Commerce Act pro-
hibiting railroad companies from entering into agreements for pooling freights
or dividing their earnings, does not invalidate a contract between two railroad
companies, whose lines of road are parallel, by which certain territory is pre-
served to each, within which it shall prosecute the work of extending its branch
lines, though it may prevent certain pooling provisions therein from being op-
erative.''^

Proportionate Share of Rate. — A combination of railroad companies into
joint traffic associations, under articles of agreement by which each road car-
ries the freight it may get, over its own line, at its own rates, and has the earn-
ings to itself, though providing proportional rates, or proportional division of
traffic, is not a pooling or traffic on freights, or division of net proceeds of earn-
ings, within the prohibitions of the interstate commerce law, nor of the act
against unlawful restraints and monopolies. ''-

Under Anti- Trust Law. — This provision does not authorize or prohibit an
agreement between competing railroads relating to traffic rates for the trans-
portation of articles of commerce between the states, such as the anti-trust law
seeks to prevent. ^^

Agreement as to Routing Goods. — The pooling of freights of competing
railroads, is not accomplished by the adoption by common carriers, as part of

87. Pooling freights. — Interstate Com- act, even where the initial carrier prom-
merce Comm. v. Brimson, 154 U. S. 447, ises fair treatment to the connecting
38 L. Ed. 1047, 12 S. Ct. 1125; United roads, and carriers out such promises."
States V. Trans-Missouri Freight Ass'n, Southern Pac. Co. v. Interstate Com-
166 U. S. 290, 41 L. Ed. 1007, 17 S. Ct. merce Comm., 200 U. S. 536, 50 L. Ed.
540; Interstate Commerce Comm. v. Cin- 585, 26 S. Ct. 330.

cinnati, etc., R. Co., 167 U. S. 479, 42 L. 91. Main and branch lines. — Ives v.

Ed. 243, 17 S. Ct. 896; Savannah, etc., R. Smith, 55 Hun 606, 8 N. Y. S. 46, 28 N.

Co. V. Florida Fruit Exch., 167 U. S. Y. St. Rep. 917.

512, 42 L. Ed. 257, 17 S. Ct. 998. 92. Proportionate share of rate. —

88. In re Pooling Freights, 115 Fed. Decree 76 Fed. 895, affirmed in United
588. States v. Joint Traffic Ass'n, 32 C. C. A.

89. In re Pooling Freights, 115 Fed. 491, 89 Fed. 1020.

588. 93. Under anti-trust law. — United

90. Percentage of rates. — "No case is States v. Trans-Missouri Freight Ass'n,
-made out of the violation of the pool- 16C U. S. 290, 41 L. Ed. 1007, 17 S. Ct.
ing provision in the fifth section of the 540.



3725 INTERSTATE COMMERCE ACT. §§ 4111-4113

an agreement for a through rate from California to the East for oranges
and other citrus fruits, of a rule under which the right of routing beyond its
own terminal is reserved to the initial carrier as the condition of guarantying
the through rates to the shipper, even though the initial carrier promises fair
treatment to the connecting lines, and carries out such promise, where such rule
has served, as was intended, to break up rebating by the connecting lines, and,
in its practical operation, the actual routing is generally conceded to the shipper,
and his requests to divert shipments en route are usually allowed. °-^

Agreement to Prevent Rebating. — A rule in practice adopted and put in
force by an agreement between com]jeting railroads and their connecting lines,
hy which a through rate on a certain class of traffic is conditioned on a reserva-
tion to the initial carrier of absolute and unqualified power to route shipments
beyond its own line, for the purpose of enabling such initial carrier to control
and maintain the rate, the purpose of which is to prevent rebating, does not
-constitute a tonnage pool.'^"'

Remedies. — The enforcement of an order of the interstate commerce com-
mission directing common carriers to desist from maintaining or enforcing a
rule adopted by them may be decreed by a federal circuit court if it finds such
rule is, for any reason, in violation of the act, although such reason may not
have been the one relied upon by the commission itself to invalidate the rule.^^

§ 4112. Mileage Tickets. — The Interstate Commerce Act was not de-
signed to prevent competition between different carriers, or to interfere with the
customary arrangements made by railway companies for reduced fares in con-
sideration of increased mileage, where such reduction does not operate as an un-
just discrimination against other persons traveling on the same road.^^

§ 4113. Party-Rate Tickets. — The issuance of party-rate tickets, each
good for a party of ten or more persons, at the rate of two cents per mile, while
single passengers are charged three cents, is neither an unjust discrimination
nor an undue or unreasonable preference or advantage, within the meaning of
the Interstate Commerce Act when such tickets are offered to the public gen-
erally.^'^ There is no merit in the suggestion that such tickets may be used by
ticket brokers as a means of evading the law, since, being for ten or more per-
sons, they would hardly be available for that purpose, and, if issued for so
small a number of persons as to become available, the courts would have au-
thority to apply the proper remedy. ^^ Where a railroad company is charged
with violating the interstate commerce act, by the issuance of "party-rate tickets"
at less than the rates charged single passengers, the burden of proving that
such lower charge constitutes an undue preference is upon the person making
the charge.^

Although not identical with mileage, excursion or commutation tick-
ets, under the act, the principle is the same as that applicable to commutation

94. Agreement as to routing goods. — 98. Party-rate tickets. — Interstate Corn-
Decree, Interstate Commerce Comm. v. merce Comm. v. Baltimore, etc., R. Co.,
Southern Pac. Co., 132 Fed. 829, reversed 145 U. S. 263, 36 L. Ed. 699, 12 S. Ct.
in 26 S. Ct. 330, 200 U. S. 536, 50 L. Ed. 844; Interstate Commerce Comm. v. Ala-
585. bama Mid. R. Co., 168 U. S. 144, 42 L.

95. Agreement to prevent rebating. — Ed. 414, 18 S. Ct. 45; Texas, etc., R. Co.
Southern Pac. Co. v. Interstate Commerce v. Interstate Commerce Comm., 162 U.
Comm., 200 U. S. 536, 50 L. Ed. 585, 26 S. 197, 40 L. Ed. 940, 16 S. Ct. 666; Inter-
S. Ct. 330. state Commerce Comm. v. Baltimore, etc.,

96. Remedies. — Decree, Interstate Com- R. Co., 43 Fed. 37.

merce Comm. v. Southern Pac. Co., 132 99. Interstate Commerce Comm. z\ Bal-

Fed. 829. reversed 26 S. Ct. 330, 200 U. timore, etc., R. Co., 145 U. S. 263. 36 L.

S. 536, 50 L. Ed. 585. Ed. 699, 12 S. Ct. 844, affirming 43

97. Mileage tickets. — Interstate Com- Fed. 37.

merce Comm. v. Baltimore, etc., R. Co., 1. Interstate Commerce Comm. v. Bal-

145 U. S. 263, 12 S. Ct. 844, 36 L. Ed. 699, timore, etc., R. Co., 43 I^'cd. 37.
affirming 43 Fed. 37.



§§ 4113-4115 CARRIERS. 3726

tickets.- The difference between commutation and party-rate tickets is that
commutation tickets are issvied to induce people to travel more frequently, and
party-rate tickets are issued to induce more people to travel. This is, however,
no difference in principle between them, the object in both cases being to in-
crease travel without unjust discrimination, and to secure patronage that would
not otherwise be secured.^

Where Not Sold to General Public. — If a case were presented where a
railroad refused an application for a party-rate ticket upon the ground that it
was not intended for the use of the general public, but solely for theatrical
troupes, there would be much greater reason for holding that the latter were
favored wnth an undue preference or advantage.^

United States Soldiers. — The government of the United States, in buying
transportation on a railroad for its soldiers, in lots of ten or more, is not en-
titled to the benefit of a reduced party rate given by the railroad company's
schedule to "theatrical, operatic, or concert companies, hunting and fishing par-
ties, glee clubs, brass or string bands, boat, baseball, polo, or tennis clubs, foot-
ball teams, and other parties of like character." Nor does the refusal to give it
the same rates constitute an unjust discrimination against it, or subject it to
undue prejudice or disadvantage, in violation of the Interstate Commerce Act,
where it is shown that the purpose and effect of the party rate given by the
schedule is to increase the company's business, and that tickets sold thereunder
are closely limited in time, and are paid for in cash in advance, while those fur-
nished on a requisition, and are only paid for after indefinite delay in the audit-
ing and allowance of the claims by the war and treasury departments. In such
case the conditions and circumstances under which the service is rendered are



Online LibraryThomas Johnson MichieA treatise on the law of carriers (Volume 4) → online text (page 117 of 214)