was made by " combination " upon St. Louis-that is to say, the rate from the Atlantic seaboard to Kansas City was determined by adding together the local rate from the East to St. Louis and the local rate from St. Louis to Kansas City. Roughly speaking, it is 1,100 miles from New York to St. Louis, and the rate at that time, first class, was 87 cents. It is 280 miles from St. Louis to Kansas City, and the firstclass rate was 60 cents. The complainant argued with great earnestness that if 87 cents was a reasonable charge for the service from New York to St. Louis, 60 cents was utterly unreasonable from St. Louis to Kansas City, and it asked the Commission to project the same mileage rate west of the Mississippi River as existed east.

The Commission declined to comply with this request of the complainant, but it did hold that the through rate from the Atlantic seaboard to Kansas City was unreasonable, and that it was unreasonable because the part of the rate from St. Louis to Kansas City was excessive; and it ordered that part of the rate reduced.

Let it be carefully noted that the complaint before the Commission was of the through rate; there was no complaint of the rate from St. Louis to Kansas City. The order of the Commission was that the 60-cent rate should be reduced to 51 cents as applied to through business from the Atlantic seaboard. The railroads insist that this order was unlawful because it created, in and of itself, a discrimination against points intermediate between the Atlantic seaboard and Kansas City. There is of necessity a relation in rates between different business centers; that from New York to Kansas City bears a certain relation to that from Pittsburg to Kansas City or from Detroit to Kansas City, and the defendants urged that if the relation had been correct before the order of the Commission it was made incorrect by that order.

Of this there can be no question. The order of the Commission did disturb the relation which had previously existed between different territories east of the Mississippi River; but that resulted, not from any unlawful action on the part of the Commission, but from the operation of the statute under which we act.

The act authorizes the Commission to prescribe a reasonable rate only in case of complaint, and after hearing. The sole complaint before the Commission was as to rates from the Atlantic seaboard to Kansas City. There was no complaint as to rates from intermediate territory. Nothing was said either in the testimony or the argument or in the opinion of the Commission as to rates from intermediate territory. Under these circumstances the Commission, as it construes the law, could only act upon the rate which had been presented to it. If the next day Pittsburg had presented its complaint or Detroit had filed its complaint, then we could have passed upon those cases and have made orders affecting those rates.

The act may be defective in not authorizing the Commission to deal in a comprehensive fashion with the whole situation necessarily involved in a complaint like that under consideration, but to say that the Commission can not reduce a rate because the relation between localities is thereby disturbed would be to say that it can make no reduction whatever, for the instances are few in which the rate acted upon does not bear some relation to other rates not embraced in the order.

The court assumed that it was the intention of the Commission to prescribe "trade zones" which should be tributary to trade centers, and set aside the order upon the ground that no such authority was conferred by the act. As one reason for its holding that it was the purpose of the Commission to establish such zones, the court said:

Since that time the Commission has spoken in the Denver rate hearing and also in its annual report. In neither has there been a disavowal of the power said to be claimed and the effect said to be produced.

In view of this statement of the court the Commission desires to disavow any attempt to create so-called "trade zones" by the orders referred to. It has repeatedly said that such was not the function either of this Commission or of the railroads of this country; that every locality was entitled, so far as might be, to a reasonable rate and to do whatever business it could upon that rate. The Commission further desires to state that, so far as it understands the effect of these orders, they do not in fact create trade zones. The Commission has simply attempted to prescribe reasonable rates between the points named. It has said that a long-distance rate may properly be less than the sum of the shorter-distance rates which make up the longer-distance rate. Assuming that 87 cents from New York to St. Louis is reasonable and that 60 cents from St. Louis to Kansas City is reasonable, it does not follow, in the opinion of the Commission, that $1.47 is a reasonable rate from New York to Kansas City. Assuming that 80 cents from Chicago to Omaha and $1.25 from Omaha to Denver are reasonable first-class rates, $2.05 is not of necessity a reasonable first-class rate from Chicago to Denver. The cost of the through service is less, ordinarily, than the combined cost of the two local services. It is, moreover, necessary that for the purpose of uniting the widely separated portions of our country long-distance tariffs should be somewhat less, in proportion to the actual cost of the service, than shorter-distance rates.

But it is one thing to say that the through rate may be less and quite another thing to say that it shall be less. This Commission has never yet said that the carriers might not, if they saw fit, reduce the rate from St. Louis to Kansas City on all business to 51 cents, first class; it has never said that the carriers leading from Chicago to Denver may not reduce their local rates from Chicago to Omaha

and from Omaha to Denver by such amount as will equal the through rate established; and until that is said there is no compulsion upon the part of the carrier to change the relations which have formerly existed. We simply require that for these long-distance hauls reasonable rates shall be established. The carrier is free to so reduce its local rates that the combination will equal the through rate if it desires.

While, however, there has been no attempt upon the part of the Commission to obliterate the Missouri River and the Mississippi River as base lines if the carriers desire to make local rates sufficiently low so that the combination of those rates will produce a reasonable through rate, still, it seems proper to say, that, as we understand the law, the Commission has jurisdiction to do this if occasion requires. If it should be found that the system of rate making now in force creates undue prejudice in favor of localities upon the Missouri River or the Mississippi River the Commission may, for the purpose of removing that discrimination, remove the base line itself. In the establishment of rates it may be necessary to create or to destroy base lines; to make or unmake groups. This Commission is required to fix rates which are reasonable and nondiscriminatory, and in the discharge of that duty it rests under no obligation to regard base lines which are in effect or zones which have long existed. The only limitation is that the rates established shall be in harmony with the requirements of the law.

It should also be noted that when the Commission fixes a given rate, that rate thereby becomes the standard of reasonableness to which carriers must align their related rates. In the case before us, when the Commission reduced the rate from the Atlantic seaboard to Kansas City, it was the duty of the carriers to adjust their intermediate rates from Pittsburg and Detroit accordingly. The resulting discrimination did not spring from the order of the Commission but from the failure of the carriers in their duty to properly readjust their other schedules.

PORTLAND GATEWAY CASE.

The case Northern Pacific Railway Co. v. Interstate Commerce Commission, decided by the circuit court for the district of Minnesota, commonly known as the Portland Gateway case, involves the making of through passenger routes.

A passenger at St. Louis, for example, can travel to Seattle, Wash., by way of various lines to St. Paul, Minn., and from thence by either the Great Northern or the Northern Pacific to Seattle; or by various lines to Kansas City, and from thence by the Burlington route to Billings and the Northern Pacific to Seattle. He can also go by a great variety of routes to Ogden, from thence via the Union Pacific

line to Portland and from thence via the Northern Pacific to Seattle. In the former case he must travel over the Great Northern, Northern Pacific, and Burlington, so-called "Hill lines," the greater part of the distance, while in the latter event he would only travel by the Northern Pacific from Portland to Seattle.

If he goes via St. Paul or via Billings he can purchase a through ticket, upon which his baggage will be checked to destination, but if he journeys by way of Portland he must be furnished by the Union Pacific with a ticket upon the train, which is exchanged at Portland for another ticket, upon which his baggage is rechecked, since there is no through route and joint rate via Portland. This has led to much complaint and great inconvenience to the traveling public in the handling of baggage and the exchanging of tickets at Portland.

The Commission, believing that the matter ought to be investigated, instituted a proceeding upon its own motion, and as a result of the investigation ordered the Union Pacific lines and the Northern Pacific to establish through routes via Portland to Seattle and similar points, and this order the Northern Pacific resisted.

The act to regulate commerce empowers the Commission to establish through routes and joint rates provided "no reasonable or satisfactory through route exists," and the Northern Pacific claimed that there was already in existence such a route. Upon this point the Commission found that the passenger could travel as quickly and as comfortably via the Northern Pacific and Great Northern lines, by which a joint through route already existed, as he could via Portland, but it also found that great numbers of persons for various causes desired to use the more southern routes, which brought them through Portland. We were of the opinion that this desire was a reasonable one and that accordingly, with respect to such travelers, there was no reasonable through route already in effect. In other words, while it was immaterial whether a carload of lumber was transported from Seattle to St. Louis via the northern lines or via Portland, provided it reached there in a reasonable time in good order, at the same rate, there was, in the case of the passenger, the element of personal choice, which the railway companies ought to recognize. A person who had traveled once by the northern line might properly desire for the purposes of observation, or for other reasons, to go by the southern line.

The circuit court granted an injunction upon the ground that a reasonable and satisfactory route already existed. In contemplation of law, therefore, the human element is not to be considered in determining whether a reasonably satisfactory route already exists. The same test controls with a carload of human beings which would control with a carload of live stock.

In view of this interpretation of the act, we think that the proviso limiting the jurisdiction of the Commission to cases where no reasonable and satisfactory through route already exists should be eliminated, certainly as to passenger traffic. The testimony showed that on the average 8,000 persons traveled each year from eastern destinations through Portland to Seattle and corresponding points, notwithstanding the difficulties and inconveniences by which that route is beset. Under the interpretation of the court the Union Pacific Company may decline to establish through routes to Portland itself via Ogden and may compel all passengers who desire to travel from the Missouri River to Ogden by any other route than its own to stop at Ogden, purchase a ticket to Portland, and recheck their baggage.

It is not suggested that through passenger routes should be established in all cases. The mere caprice of the traveler is not enough to require carriers to maintain through routes where it is against their pecuniary interest to do so; but there is in passenger service an element of rational desire which does not exist with the transportation of freight, and whenever the public may reasonably wish to use a given route that route should be open to it.

The legitimate interest of carriers can always be protected in the division of the rate. If a railroad is required to establish a through route and joint rate which give it the short haul upon business as to which it would otherwise obtain the long haul, this may properly be recognized in determining its share of the joint rate; but the first consideration is the public convenience, and the mere selfish interest of carriers should not be allowed to override that. Neither the Hill lines nor the Harriman lines should be permitted to dictate the route by which transcontinental travel shall move against the reasonable desire of the passenger.

During the year nine bills have been filed to restrain the orders. of the Commission. These are:

Diffenbaugh et al. v. Interstate Commerce Commission. Western District of Missouri. The Commission ordered carriers to desist from the payment of elevation allowances upon the Missouri River, upon the ground that this was a discrimination against parties not using elevators and against localities where similar allowances were not paid. This suit is brought by certain shippers upon the Missouri River, with whom certain railroads join, to restrain the operation of that order. The record had been completed and the case assigned for argument. The Commission believing it to be in the public interest that the lawfulness of this order should be determined before it was enforced, since otherwise discrimination might arise between different localities, has postponed the effective date until April 1, 1910, to give opportunity for consideration by the court.