United States. Interstate Commerce Commission.

Annual report of the Interstate Commerce Commission online

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158. Carriers should bring their tariffs into conformity with the statute without

suggestions £rom the Commission as to details.

The La Crosse Manufacturers and Jobbers' Union v. The Chicago, Milwaukee and
Saint Paul Railway Company, the Chicago and Northwestern Railway Company,
and the Chicago, Burlington and Northern Railroad Company. (II. C. C. Rep.,
629.)

159. The fact that the rates of a railroad company are not established on a mileage

basis does not necessarily make out their illegality or injustice.

160. A prayer in a petition against a railroad company, that the company be

required to make its rates &om one terminus to the town from which the
petition proceeds and to other towns in the same section, and also from
such terminus to the petitioning town and from thence to such other towns,
on a uniform and equal mileage basis, can not be granted, the Commission
having no power to require the adoption of such a basis.

161. A compSbint will not be nled of which no reasonable ground for investigation

appears.

In the matter of Underbilling. (1 1. C. C. Rep., 633.)

162. Underbilling, a device by which a shipper pays for the transportation of a less

quantity of freight than is actually carried, and thereby obtains a reduced
rate upon the gross shipment, is forbidden by the act to regulate commerce.

163. Unjust aiscrimiuation results &om underbilling, in that the favored shipper

pays a less sum than is charged others for the same service.

164. Common carriers are bound to exact equality in their service of the public.



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150 EEPOBT OF THE INTERSTATE OOMMEBOE COMMISSION.

165. Organized action by carriers to prevent nnderbilling commended ; their duty

to put an end to the practice iusisted upon.

166. Carriers should be held, and in turn should hold every agent, responsible for

the shipment of goods at exact weights aud correctly classified.

167. Commissions paid to soliciting agents when divided with shippers effect a

breach of the law.

168. Shippers should be required to extend to carriers the same honesty expected

in other commercial transactions.

169. Preferences obtained by nnderbilling explained, and remedies suggested.

170. Legislation recommended imposing a moderate penalty upon shippers who

willfully and fraudulently obtain reduced rates of transportation for their
property.

John H. Martin and M. H. Martin v. The Southern Pacific Company, the Central
l^acitic Kailrond Company, and the Union Pacific Railway Company. (21. C. C.
Rep., 1.)

171. Mixed carload lots of freight are treated in different ways under the classi-^

fications employed in different parts of the country, resulting in much con-*
fusion and annoyance to shippers, especially upon traffic passing irom one
section to another. The immediate adoption of a uniform and reasonable
rule urgently recommended.

172. Classification of dried fruits and raisins, both California products, in different

classes, taking dlfiereut rates of freight, works an injustice to shippers. Id
all matters of classification clearness and simplicity should bo aimed at, and
irregularities and inconsistencies should be eliminated.

173. Rates obtained by combination, which produce a lower rate than the tariff

calls for, are unjust^ because they enable an intelligent shipper to obtain an
advantage over one who has less information, ana they are illegal because
they show two rates to the same point, over the same line, at the same time.
The tariff rates should not exceed the combination rates in any case.

174. Violation of the fourth section of the act can be accomplished by differences

in classification as well as by differences in tariff rates.

175. Canadian competition at the present time does not justify a higher charge

from San Francisco to Denver than to Kansas City, it having been with-
drawn at the latter point, and the Canadian road now working upon an
agreement as to rates with the roads in the United States at all points where
it formerly competed.

176. The great distance of Denver from the Missouri River of itself denotes an

impropriety in the charges to that point which exceed those to Kansas City.

177. In re Louisville and Nashville Railroad Company (1 1. C. C. Rep., 31) affirmed;

and in accordance with the principles the e laid down, the conclusion fol-
lows that the greater charge for the shorter haul complained of in the
present case can not now be justified.

178. The commission prefers to permit the carriers to work out for themselves all

tariff details, and accords a reasonable time for that purpose.

Euclid Martin and others, constituting the freight bureau of the Omaha Board of
Trade, v, the Chicago, Burlington and Quincy Railroad Company, the Chicago and
Northwestern Railway Company, the Union Pacific Railway Company, the Chicago,
Milwaukee and Saint Paul Railway Company, the Chicago, Rock Island and Pacific
Railway Company, and the Burlington aud Missouri River Railroad Company in
Nebraska. (2 I. C. C. Rep., 25.)

179. The principles laid down in the case of Crews v. The Richmond and Danville

Railroad Company (1 1. C. C. Rep., 401) restated and reaffirmed.

180. Trade centers of large commercial towns are not, as a matter of right, entitled

to have more favorable rates than the smaller towns for which they form
distributing centers; and if carriers shall give to such smaller towns rates
as favorable as to the larger, the Commission will not interfere.

181. The fact that, under rates which are impartially arranged as between large

aud small towns, one large distributing center may have an advantage over
another in competition for the business of the small towns, does not make
out a case of undue preference in favor of the one distributing center as
against the other. Impartial rates are not rendered illegal by their effect
upon the business of localities.

182. A distributing center, however great or important, can not demand, as a

matter of right, that the rates from a common source of supply to more
distant and smaller towns shall be made up of the sum of the'rate to itself
and the rate thence to such smaller towns; but the carriers may make rates
from the common source of supply to the smaller towns directly, as single
rates; and if the single rate is less than the sum of the two which are mf^e
to and from the distributing center, it is not, for that reason, necessarily
objectionable.



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DECISIONS OF THE COMMISSION. 151

183. A case can not be decided on a theory which is neither presented by the com-

plaint nor advanced on the taking of the testimony.

184. What constitutes local and what through rates considered.

The Business Men's Association of the State of Minnesota v. the Chicago, Saint Paul,
Minneapolis and Omaha Railway Company. (2 I. C. C. Rep., 52.)

185. One feature of the transportation of freight by railroads in long hauls on joint

rates, or what is usually called through rates; unless there be exceptional
conditions which modify the rule^ is that the rate per ton per mile grows
less in proportion to the greater distance, while the aggregate of the rate
increases in proportion to such greater distance ; but this is not found to
, exist in the case of the local rates of a railroad, wnere the stations are occa-
sionally grouped, but more usually graded according to distance, except as
au incident of rare and highly exceptional conditions of the transportation
service.

186. The method of testing the freight rates of a railroad by the rate per ton per

mile is one by which these rates may be brought down to the narrowest
point of scrutiny, and in this sense is valuable ; but it is lilte looking at them
with a microscope, for it ignores all other tests except that which it alone
furnishes, and does not take into consideration any of the surrounding cir-
cumstances and conditions that enter into the making of the rate, no matter
how compulsory or imperious these may be, and for this reason it can not
be considered a controlling rule in determining the reasonableness of rates.

187. To determine the reasonableness and justness of any freight rate made by a

railroad company, all the surrounding circumstances and conditions must
be considered, as well as the rights of the shipper, and if these circum-
stances and conditions are so compulsory or imperious that they fairly and
justly exercise any controlling influence in the making of the rate, they can
not be disregarded in a proceeding in which the reasonableness and just-
ness of the rate is presented for determination.

188. The words '* substantially similar circumstances and conditions," as found in

the second and fourth sections of the act to regulate commerce, in certain
important particulars define the rights and duties of carriers and the rights
of shippers as well. For example : If the carrier claims to act under the
compulsion of circumstances and conditions of his own creation or conniv-
ance in the making of an exceptional rate, then these will not avail him.
Or if the carrier claims to act under a compulsion of circumstances and con-
ditions in the making of an exceptional rate which he could obviate by
reasonably fair and just exertion on his part, then they will not avail hiui.
But if the carrier is in good faith acting under a compulsion of circum-
stances and conditions beyond his control, not of his own connivance, and
which he could not obviate by any reasonably fair and just effort on his
part, and to avoid large loss adopts exceptional rates on a portion of his
fine, not unreasonable in themselves, and forced upon him by the action of
an independent State railroad, which is not subject to the act to regulate
commerce, and which is operating a slightly shorter and competing line
with his own, these are circumstances and conditions under the operation
of the statute which justify him in adopting such exceptional rates thus
forced upon him on this portion of his line.

189. When a carrier, acting in good faith, has adopted an exceptional rate, not

unreasonable in itself, on a portion of its line, because that rate has been
forced upon it by an independent State railroad company in direct compe-
tition with it and not subject to the act to regulate commerce, the reason-
ableness and justness of rates on other portions of the carrier's line
extending into a far interior region of the country where no such conditions
exist, can not be measured, alone, by the standard thus furnished, but must
be governed by considerations which fairly and justly apply to them.

190. The exceptional conditions of railroad transportation in proximity to the

waterways of the great lakes, Michigan and Superior, and of rival com-
peting railway lines operating between the ports on these lakes, as to the
method of grouping stations under the combined effect of the competition
of these waterways and of the fourth section of the act to regulate com-
merce, are found and stated by the Commission in this proceeding, citing
and approving the Manufacturers and Jobbers' Union of La Crosse against
the Chicago, Milwaukee and Saint Paul Railway Company (1 1. C. C. Rep.,
632).

191. The conditions of transportation on that portion of defendant's lines in a broad

extent of far interior country, where it is in competition with other great
rival railway lines extending to Lake Michigan ports, while that of the
defendant extends to Lake Superior ports, and the relation of each arising
therefrom, examined, found, and considered by the Commission.



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152 BEPORT OF THE INTERSTATE COMMERCE COMMISSION.

192. The act to resulate commerce was not enacted to destroy competition, and

the establishmeDt of the rufe of the rate per ton per mile, insisted npon by the
complainant, would have very much the effect of practically making
the rates charged for a lon;^ distance at the stations along the line of the
defendant and its great rivals, the Chicago, Milwaukee and Saint Paul
Railway and the Minneapolis and Saint Louis Railway, in the nature of
strict mileage rates, thereby destroying competition to a large extent at
these stations, unsettling the business of their shippers, con^rring upon
them no practical benefits, and loading the business of the carrier and the
shipper at every such station with a multitude of Infinitesimal fractions
nowhere known in the business of railroads.

193. Elaborate tariffs of rates, the result of competition, made by one of several

great railway systems, all competing for the business of a large extent of
territory, are examined and considered in connection with those of its com-
petitors, and with a view not to break down the legitimate competition
thus existing, whereby rates are cheapened to the public generally, and
these railways are correspondingly benefited in performing the work for
which they were chartered and constructed.

The Business Men's Association of the State of Minnesota v. The Chicago and North-
western Railway Company. (2 I. C. C. Kep., 73.)

194. The circumstances and conditions as to the transportation of freight on the

line of the defendant between Chicago and St. Peter, on the one hand, and
between St. Peter and Pierre on the other, found, examined, and considered
by the Commission, and held to be substantially dissimilar upon the facts
set forth in the report and findings in this proceeding.

195. The rule of the rate per ton per mile decreasing for the greater distance

while the rate is increasing in the aggregate, examined and discussed by
the Commission in its application to the present proceeding, and held to
be inapplicable.

196. The difference between the cost of service by which the local business of this

railroad and its through business is done relatively, examined and consid-
ered by the Commission so far as they are involved in this proceeding.

197. Comparison of rates charged by railroad companies under circumstances and

conditions substantially dissimilar really proves nothing, and can not be
adopted as standards in arriving at the reasonableness and justice of rates.

198. Exceptional cases of rates made lower than other rates by a carrier on one

portion of its line by the action of a competitor, and in which it is without
lault itself under the operation of the act to regulate commerce, can not be
adopted as the standard as to other rates npon a far distant portion of its
line where no such exceptional conditions exist, and the reasonableness of
its rates must be determined by altogether different considerations.

199. Where the evidence adduced in a proceedinpj like this fails to establish

grounds relied upon, as stated in the complaint, and upon which it is heard
and tried before the Commission by the parties and their counsel, and to
which the evidence is directed, but shows that upon a portion of its line,
as, for example, between St. Peter, in the State of Minnesota, and Pierre,
in the Territory of Dakota, that the rates are made upon a basis which
seems to grade them with large differences between stations contiguous to
each other, and the grounds assigned for this by the carrier are the addi-
tional cost of service incident to operating a new line through a thinly
inhabited and but little cultivated country, with very light traffic, and in
which the transportation is seriously impeded by snow blockades, and
where the coal used for fuel in operating the trains has to be brought by the
carrier a distance of nearly 500 miles, but the evidence is not given with
that fullness of detail which should sustain such extra rates of charge, the
Commission, while it will not hold the rates to be unreasonable, will also
not hold that they are reasonable, but will investigate this question in a
separate proceeding under the statute by which all the parties in interest
will have an opportunity to be fully heard, and can bring forward all the
evidence upon a subject that is important and involving valuable rights,
alike to the public and to the carrier.

200. When, in a proceeding such as this, evidence is introduced by a party and he

is permitted to do so for the single purpose of the bearing it may have upon
the reasonableness of the rate, which would be inadmissible for any other
purpose, and it tends to show a ditterence of rates of the carrier by which
a combination could be made of those rates upon the different tariff's that
would be improper and unjust, the carrier not being allowed to controvert
it upon the hearing, as to any other feature, except so far as it had a bear-
ing upon the reasonableness of rates, because it would involve a collateral
inquiry, the Commission will not determine this collateral inquiry or the



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DECISIONS OF THE COMMISSION. 153

question it presents until an opportunity has been furnished the parties
to be heard in a proceeding^ such as is provided for by the statute. For
example : Where the complaint of the petitlouer makes no allegation that
under the tariflfs of the carrier freight may be shipped from Chicago to St.
Peter at one rate, there unloaded, and then subsequently reshipped from
St. Peter to each of the stations between St. Peter and Pierre at a rate which,
added to the rate from Chicago to St. Peter, is considerably less than the
direct rate from Chicago to each of these stations, but on the hearing the
complainant is allowed to introduce evidence upon this subject simply
for the purpose of showing that the rates between St. Peter and Pierre
are unreasonable and for no other purpose, the carrier having at the time
the complaint was made a number of tariffs as follows: A distance tariff
for the State of Illinois, a distant tariff for the State of Wiscoosin, a dis-
tance tariff for the State of Minnesota, a distance tariff for the Territory
of Dakota, local tariffs to aud from all points on its line in each of the
States through which it passes and the Territory of Dakota, and a tariff
from and to Chicago and all points along its line, extending to Pierre, a
distance of 781 miles.

William C. Scofield, Daniel Shurmer, John Teagle, and Charles W. Scofield, part-
ners under the firm name and style of Scofield, Shurmer & Teagle ; James K. Tim-
mins and Andrew R. Timmins, partners under the firm name and style of J. R.
Timmins &, Co. ; Christian J. Werwage, doing business under the name and style
of The Manfacturer's Oil Company ; John W. Fawcett and Thomas F. Wright,

Sartners under the name and style of J. W. Fawcett & Co. ; Alfred Whitaker,
oing business under the name and style of The Brooks Oil Company; William F.
Vliet, Willard L. Nutt, and Martin P. Case, partners under the name and style of
Vliet, Nutt &, Co.; W. Carroll Lawrence, Felix Burgert, Henry C. Meyers, and
August E. Schade, partners under the name and style of The Merchants' Oil Com-
pany; The Excelsior. Refining Company, a corporation organized under the laws
of Ohio; The Globe Oil Company, a corporation organized under the laws of Ohio;
The Cleveland Refining Company, a corporation organized under the laws of
Ohio ; Louis C. Carran, doing business under the name and style of L. C. Carran
& Co., i\ The Lake Shore and Michigan Southern Railway Company. (2 I. C. C.
Rep., 90.)

201. Upon the facts of this case it is found, and held, that there is an unlawful

preference given by the carrier, in favor of oil shipments in tank-car lots,
as against like shipments in barrels, carload lots, which is ordered to be
corrected, and the mode prescribed by which this must be done, giving
equal rates on each per pound.

202. It is a common law and charter duty of every railway carrier subject to the

act to regulate commerce to furnish a proper and adequate car equipment
for all the reasonable needs of the business it advertises and undertaKes to
do, and if the carrier fails to do this, to the wrongful injury of the shipper,
it is liable in damages therefor, but the statute has not clothed the Inter-
state Commerce Commission with the jurisdiction to order the carrier to
furnish any particular equipment of cars, or in fact, any cars at all. It is
the duty of such carrier to select and furnish its own equipment of cars,
under all the responsibility which the law requires of it in so vital and
important a matter, for the public has not undertaken to divide responsi-
bility with the carrier in this respect.

203. The law does not forbid a carrier from obtaining cars for the transportation

of freight over its line from other carriers or car-furnishing companies, but
in every such instance the rates of freight must be exactly the same, and
none other, as they would be, if such cars were owned by the carriers so
using them.

204. The law does not forbid a carrier from obtaining cars from a shipper for the

transportation of such shipper's freight over its line, but in every such
instance, after deducting a reasonable rent published in the tariff as part of
the rate and paid by the carrier to the shippers for the use of such cars, the
rates must be exactly the same, and none other, as upon freight transported
in the same service in the carrier's own cars; and in every such transaction
the carrier, at his peril, must see to it that a shipper furnishing his own cars
receives no other or different rates than other shippers who use the cars of
the carrier for a similar service.

205. To render a preference of one over another unlawful, under the act to regu-

late commerce, it is not necessary that it should be accomplished by any
**device," and it is equally true that the ingenuity of man can not invent
a ** device" for the perpetration of an unlawful preference on the part of a
carrier engaged in interstate commerce without incurring the penalties
prescribed by the statute.



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154 REPORT OF THE INTERSTATE COMMERCE COMMISSION.

206. In this particular instance, on acconnf. of the phenomenal differences in

expense of service rendered, the exceptionally high rates on oil in barrels
less than carload lots as compared with oil in carload lots are sustained,
but the defendant and all other carriers engaged in interstate commerce
are notified that there seems to be too great a tendency on their part to
make excessive differences in favor of all shipments generally in carload
lots as against shipments of similar articles in less than carload lots, and
that it would be well for each of them to look to their tariffs in this respect
before the Commission takes further action on this subject.

Frank L. Hurlburt v. The Lake Shore and Michigan Southern Railway Company.
(21. C. C. Rep., 122.)

207. In a proceeding to correct a classification of freight made by the initial car-

rier, which freight before reaching its destination must pass over the roads
of several carriers, it is proper to make all such carriers parties; but if the
initial carrier alone is made defendant, the proceeding is not for that reason
defective. An order requiring that carrier to make the correction will be
effectual for the purposes of all subsequent consignments, and there is no
difficulty in its being complied with without asking the consent of others.

208. Persons having an interest in a question pending before the Commission will

bo allowed to appear and be heard when the case is being submitted with-
out their being made formal parties.

209. A.ssurances made by a carrier that if one will locate in business on the line

of its road his property shall be taken for transportation as belonging to a
specified class can not bind the carrier so as to compel a classiHcation
accordingly. A right to special rates can not be made out in that way ;
the classific$^t|on must have the same construction in favor of all persons ;
the law requires uniformity and impartiality in the dealings of a carrier
with all persons.

210. The railway officials who have made a classification can not testify to their

understanding of its construction. A classification sheet is put before the
public for general information; it is supposed to be expressed in plain
terms so that the ordinary business men can understand it, and in connec-
tion with the rate sheets can determine for himself what he can be lawfully
charged for transportation. The persons who prepared the classification
have no more authority to construe it than anybody else, and they must
leave it to speak for itself.

211. It is competent to prove by the testimony of witnesses in what sense terms

of art or terms peculiar to any occupation or business are used by those
engaged in such occupation or business. But when such terms are made



Online LibraryUnited States. Interstate Commerce CommissionAnnual report of the Interstate Commerce Commission → online text (page 19 of 56)