Walter Chadwick Noyes.

American railroad rates online

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1 The clanger of these principles lies in their application. Dis-
criminations in favor of the importer made without restraint may be
large enough to drive the local shipper from the field. Ocean com-
petition justifies discrimination, but the extent to which it should be
permitted to go without regulation presents a serious question. See
Report of Industrial Commission, Vol. XIX. p. 369.



112 AMERICAN RAILROAD RATES

attached,' is the result of a compromise between
the Senate and the House вАФ the latter favoring an
absolute inhibition.

A statute absolutely denying to a railroad the
right to charge the less for the longer haul, while
seeming just at first glance, would contravene those
elementary principles which we have considered.
Charges could no longer be based upon the value of
the service. A railroad must take business from
competitive points at competitive rates ; and if it can-
not charge intermediate traffic proportionally more
it must, often, go into bankruptcy. And if it must
subsist upon the local traffic alone the same result
is likely to follow. Instead of the railroads losing
money on long hauls, and making it up on the
short, whatever is received from through traffic
above the additional expense of earning it is extra
and goes that far toward maintaining the railroad.
Inequalities in charges in favor of the long haul
manifestly constitute discriminations between local-
ities; but they are not unjust unless the differences
in charges fail to correspond to differences in con-
ditions.

The " long and short haul clause " as finally con-

^ " Pro'vided, hon.ve'ver, that upon application to the Commission
appointed under the provisions of this act, such common carrier may,
in special cases, after investigation by the Commission, be authorized
to charge less for longer than for shorter distances for the transpor-
tation of passengers or property ; and the Commission may from
time to time prescribe the extent to which such designated common
carrier may be relieved from the operation of this section of this act."



DISCRIMINATION 113

strued by the Supreme Court of the United States
is not in conflict with these principles. It only pro-
hibits those local discriminations coming within its
provisions which are unjust. This result came
about through the interpretation of the phrase
" under substantially similar circumstances and
conditions " which, by the language of the clause,
must exist to make it applicable. The Interstate
Commerce Commission for nearly ten years after
its creation ruled that the competition of rival rail-
roads did not constitute a dissimilarity of conditions,
although it held that competition of water ways had
that effect. The Commission declined to recognize
any distinction between local and through traffic, and
refused to exempt railroads under the proviso, ex-
cept in "rare and peculiar" cases. The Supreme
Court, however, in the Alabama Midland case
overruled the decision of the Commission and held
that competition, whether of railroads or trade
centres, is a factor in determining whether a simi-
larity of circumstances and conditions exists.^

1 Interstate Commerce Commission nj. Alabama Midland R. Co.
i68 U. S. Rep. 144.

2 In East Tennessee etc. R. Co.


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Online LibraryWalter Chadwick NoyesAmerican railroad rates → online text (page 8 of 17)