No. 1204.

PECOS MERCANTILE COMPANY

v.

ATCHISON, TOPEKA & SANTA FE RAILWAY COMPANY; CHICAGO, ROCK ISLAND & PACIFIC RAILWAY COMPANY; COLORADO & SOUTHERN RAILWAY COMPANY; DENVER & RIO GRANDE RAILROAD COMPANY; KANSAS CITY SOUTHERN RAILWAY COMPANY; MISSOURI, KANSAS & TEXAS RAILWAY COMPANY; MISSOURI PACIFIC RAILWAY COMPANY; ST. LOUIS, IRON MOUNTAIN & SOUTHERN RAILWAY COMPANY; KANSAS CITY NORTHWESTERN RAILROAD COMPANY; PECOS VALLEY & NORTHEASTERN RAILWAY COMPANY; ST. LOUIS & SAN FRANCISCO RAILROAD COMPANY; ST. LOUIS SOUTHWESTERN RAILWAY COMPANY; CHICAGO & EASTERN ILLINOIS RAILROAD COMPANY; CHICAGO, ROCK ISLAND & GULF RAILWAY COMPANY; EL PASO & SOUTHWESTERN RAILROAD COMPANY; FORT WORTH & DENVER CITY RAILWAY COMPANY; FORT WORTH & RIO GRANDE RAILWAY COMPANY; GULF, COLORADO & SANTA FE RAILWAY COMPANY; HOUSTON & TEXAS CENTRAL RAILROAD COMPANY; MISSOURI, KANSAS & TEXAS RAILWAY COMPANY OF TEXAS; ST. LOUIS, KANSAS CITY & COLORADO RAILROAD COMPANY; ST. LOUIS, SAN FRANCISCO & TEXAS RAILWAY COMPANY; ST. LOUIS SOUTHWESTERN RAILWAY COMPANY OF TEXAS; GALVESTON, HARRISBURG & SAN ANTONIO RAILWAY COMPANY, AND TEXAS & PACIFIC RAILWAY COMPANY.

Submitted February 29, 1908. Decided March 10, 1908.

Under the circumstances and conditions shown to exist in this case the Commission is unable to find that the class rates now in effect for transportation of property from Chicago, St. Louis, Omaha, and Denver to El Paso, Tex., unduly prejudice Pecos, Tex., or that the lower rates from such points of origin to El Paso constitute a violation of the fourth section of the act as that section is construed by the courts. Complaint dismissed.

T. J. Hefner for complainant.

S. H. Madden for Atchison, Topeka & Santa Fe Railway Company, Pecos Valley & Northeastern Railway Company, and Gulf, Colorado & Santa Fe Railway Company.

H. F. Lambert for Colorado & Southern Railway Company.

E. L. Sargent for Texas & Pacific Railway Company.

J. C. McCabe for Chicago Rock Island & Gulf Railway Company. D. L. Meyers for Pecos Valley Lines.

REPORT OF THE COMMISSION.

CLEMENTS, Commissioner:

It is alleged in this complaint that rates charged by defendants for transportation of commodities from Chicago, Ill., St. Louis, Mo., Omaha, Nebr., and Denver, Colo., to Pecos, Tex., are excessive, unreasonable, and unjust; but it was stated at the hearing by representatives of the complaining company that the only purpose of the complaint is to test the lawfulness of defendants' charge of greater compensation for transportation of commodities from the points named to Pecos than to Big Springs and El Paso, Tex. It is alleged that the traffic passes through Pecos to reach Big Springs and El Paso, longer distances over the same line and in the same direction, and that the shorter hauls to Pecos are included within the longer hauls to Big Springs and El Paso, in violation of section 4 of the act. Facts necessary to be here considered are as follows:

Complainant is a Texas corporation engaged in a general wholesale and retail merchandise and farm machinery business at Pecos, located at a junction of the Texas & Pacific and Pecos River railroads, the latter being a subsidiary line of the Santa Fe System. Pecos is 215 miles east of El Paso and 135 miles west of Big Springs. The complaining company does business to the amount of $300,000 to $350,000 a year and pays about $30,000 a year in freight charges. It employs one traveling man who makes sales of goods to points 125 miles west and 87 miles east of Pecos on the line of the Texas & Pacific, and about 65 miles north of Pecos on the line of the Santa Fe. It meets in competition wholesale merchants of El Paso, Big Springs, and Roswell, N. Mex., as well as jobbers of more distant and important points. There are located at Pecos several smaller concerns which conduct a limited amount of wholesale business. The population of Pecos is about 1,500, of El Paso about 35,000, and of Big Springs about 5,000. El Paso is located on the border between Texas and Mexico, about 800 miles from the Pacific Ocean, and is a junction point of the El Paso & Southwestern System, Southern Pacific, Santa Fe, and Texas & Pacific railroads, and two Mexican railroads-the Mexican Central, and Rio Grande, Sierra Madre & Pacific.

The complaint brings in issue all class rates on commodities originating at the points named and transported to Big Springs, Pecos, and El Paso. Class rates to El Paso and Pecos, and to Roswell, Albuquerque and Las Vegas, N. Mex., which were at the time of filing the complaint and are now in effect are shown by the following tables:

It does not appear that there is any movement of traffic from any of the originating points named to Big Springs via Pecos or to Pecos via El Paso. Big Springs is situated on the western border of Texas common point territory and Pecos under existing tariffs takes differentials higher than Texas common points. The short line to El Paso from Denver does not pass through Pecos, the route being via Trinidad, Colo., and Albuquerque, N. Mex. The distance however from Denver to Pecos and El Paso is approximately the same, about 850 miles.

Most of the traffic destined to El Paso from St. Louis and Omaha and points taking the Chicago rates passes through Pecos. Shipments from Chicago may be made to El Paso via the Rock Island to

Santa Rosa, N. Mex., thence via the El Paso & Southwestern System, a distance of 1,465 miles. El Paso and Pecos are reached by the Santa Fe which owns lines reaching from Chicago to those points. The distance from Chicago to El Paso via this line is 1,630 miles. The short line distance from St. Louis to El Paso is 1,351 miles.

The greater charge to Pecos is attempted to be justified in part by a statement of the traffic manager of the Texas & Pacific to the effect that shortly after the passage of the Interstate Commerce act in 1887 application was made by receivers of that road to the Commission for relief under the proviso to the fourth section and for permission to charge lower rates to El Paso than to points east thereof; that such permission was granted; and that rates were made and have since been maintained upon that basis.

Records of the Commission show that receivers of the Texas & Pacific Railway Company made application on April 4, 1887, to the Commission for relief as above stated, and that on April 19, 1887, an order was entered suspending the operation of the section so far as that road and shipments to El Paso were concerned for a period of ninety days. Afterwards, and on June 15, 1887, the Commission announced a decision to the general effect that railroad companies in the first instance should determine for themselves whether transportation to longer distance points is conducted under substantially similar circumstances and conditions as that to shorter distance points on the same line and in the same direction, taking into consideration water and rail competition, which determination is subject to change in a proper case upon finding and order of the Commission. 1 I. C. C. Rep., 31.

It appears that continuously since 1887, except for the period between May 22, 1900, and January 1, 1903, freight rates to El Paso from the points designated in the complaint have been lower than those to Pecos.

It is further contended in behalf of defendants that transportation of freight to El Paso is not made under substantially similar circumstances and conditions as to Pecos; that El Paso is reached by four railroads which are competitors for business from points of origin named; that to three Mexican gateways, Laredo, Eagle Pass, and El Paso rates have been and must be maintained at the same figure; that Laredo which is 300 miles nearer Chicago than El Paso fixes the rates to the Mexican border which are very low; that water rates from St. Louis to New Orleans and the Gulf of Mexico and Mexican ports, and rates to and through the port of Galveston influence rates to El Paso and the other Rio Grande crossings; and that rates to wholesale dealers in El Paso must be maintained at a low average to enable them to compete for Mexican business with jobbers located at the other gateways.

Examination of tariffs on file with the Commission shows that rates to points in Arizona and New Mexico about 215 miles in a northerly direction from El Paso, and at even greater distances, are much higher than those to Pecos, and that rates to points southeast of El Paso on the Southern Pacific are fixed at about the same relation as those to Pecos.

It is stated in behalf of defendants that prior to May 22, 1900, the Santa Fe put into effect "jobbers rates" to points north of Pecos and that to equalize those rates Pecos was put on an equality with El Paso with respect to all shipments from distant points in the north and east. The results were unsatisfactory to the roads and shippers generally and on January 1, 1903, rates to Pecos were made differentials higher than Texas common-point rates.

No evidence was submitted with respect to the reasonableness of any rate per se, and while it may be that some class and commodity rates to Pecos are too high no finding with respect thereto can be made on this record. The only purpose of filing the complaint is to test the lawfulness of the charge by defendants of higher rates to Pecos than to El Paso. Thus the one question presented for our determination is whether lower rates to El Paso than to Pecos from the points named are under existing circumstances and conditions in violation of the fourth section of the act?

It is now well settled that competition with other carriers at a longer distance point may justify lower freight rates to that point than to neighboring shorter distance points not having the same competition. Cincinnati, New Orleans & Texas Pacific Railway v. Interstate Commerce Commission, 162 U. S. 184; East Tennessee, Virginia & Georgia Railway v. Interstate Commerce Commission, 181 U. S. 1; Interstate Commerce Commission v. Louisville & Nashville Railroad, 190 U. S. 273. El Paso is reached by four railroads which compete for business from the points named in the complaint. Rates from those points are influenced by the location of El Paso as a Rio Grande River crossing in relation to other river crossings. For more than seventeen years prior to 1900 and since 1903 freight rates to Pecos. from points east and north have been uniformly higher than those to El Paso. The fact that for a brief period rates were the same is not conclusive that a higher charge to Pecos is unlawful. Pecos enjoys more favorable rates generally with relation to El Paso than points north, northeast and southeast of the latter place. This relation has been maintained for a long period of years. In the recent case of Roswell Commercial Club et al. v. Atchison, Topeka & Santa Fe Railway Company et al., 12 I. C. C. Rep. 339, the Commission considered and fixed rates to Roswell, Carlsbad, Artesia and Hagerman, N. Mex., with reference in part to the rates in effect at Pecos. This is not a case in which all the rate adjustments covering the great territory