report on reargument tending to show that it was the purpose to modify in other particulars the findings as previously made."

The decision of the court in this case concludes as follows:

The finding in the first report is that the reduction applied to the whole territory and removed all ground of complaint if the through rate could be considered, while the statement in the report after the reargument is that the reduction in the through rate did not apply to the whole territory, but was only partial. Aside from this difficulty another confronts us. The first finding of the Commission was that both the through rate and the terminal rate, separately considered as distinct charges, were in and of themselves just and reasonable at the time the complaint was filed, and this is expressly reiterated in the report delivered after the reargument. Now, the passage which we have just previously excerpted from the report after the reargument, states that the reduction of the through rate was partial and applied only to portions of the territory, and that it was made in order to "equalize the rates from those sections as compared with other sections." But it is impossible in reason to accept this conclusion, even if it be treated as a finding of fact, if the finding made originally and reiterated after the reargument is to be applied; that is, that the rates, when separately considered, were just and reasonable. This is necessarily the case, since in consonance with reason it can not at the same time be declared that the rates separately considered were just and reasonable at the time the complaint was filed, and yet it be found that some of the just and reasonable rates were unequal and hence unjust, and required to be changed in order to remove the inequality, and therefore the unreasonableness which existed in them. If, however, the conflicts to which we have referred be put out of view and the statement in the report after the reargument, to which we have adverted, be treated as a substantive finding and as overthrowing by implication the findings expressly made in the first report and some of those expressly reiterated in the second report, we find ourselves nevertheless unable to reverse the court below and direct the execution of the order entered by the Commission. That order was general and operated upon all the carriers in the whole territory covered by the complaint. But if the statement on the rehearing, which we are considering, be taken as a finding and given, arguendo, the force previously stated, then it follows that the rate from the points in the territory to which the reduction applied were just and reasonable, and as to those points the order should not have been rendered, and there is no finding establishing the points to which the reduction applied which would enable us to separate the reasonable from the unreasonable rates. It results that the findings do not afford the basis of even sustaining the order in part. Whether or not, in making the reduction, the terminal charge entered into the minds of the carriers is a matter of no concern. The question is, Was the rate as reduced just and reasonable?

Being then constrained to the conclusion that the order of the Commission was not sustained by the facts upon which it was predicated, we can not enter into an independent investigation of the facts, even if it be conceded the record is in a condition to enable us to do so, in order that new and substantive findings of fact may be evolved, upon which the order of the Commission may be sustained.

The court thereupon affirmed the judgment of the court below, but directed that nothing in the decree refusing to execute the order of the Commission should be construed as preventing that body, if it deemed best to do so, from thereafter commencing proceedings to correct any unreasonableness in the rate resulting from the additional terminal charge as to any territory to which the reduction referred to in the opinion, if any such there be, did not apply.

In the opinion of the Commission upon the reargument there was no claim that the reduction in the rate referred to was made on account of the imposition of the terminal charge or that it would not have been. made if no terminal charge had been imposed, nor that if the Chicago rate of June 1, 1894, ought to have carried with it a delivery at the stock yards the present rate should not likewise do so. The view taken by the Commission was in accord with the general view above set forth as having been taken by the court, namely, that if the rate prior to June 1, 1894, was just and reasonable, the addition, without reason, of $2 per car caused the rate to become unjust and unreasonable to the extent of $1 per car, it having been found that the carriers were subjected after June 1, 1894, to a further average cost in delivering cattle to the stock yards in Chicago of $1 per car.

It is unfortunate that the exact purpose and effect of the reduction in the through rate were not shown upon the record as presented to the court, and that the statements in the two opinions of the Commission which the court found to be irreconcilable could not have been explained upon the record previous to the entry of the final decree. It is expected that the case will be reopened before the Commission, and that further testimony, especially such as will indicate the extent and character of the reduction in the through rate on October 1, 1896, will be taken.

THE SAVANNAH, GA., NAVAL STORES AND COTTON CASE.

This was a case brought by the Commission in the United States circuit court for the eastern division of the southern district of Georgia against the Louisville and Nashville Railroad Company, the Florida Central and Peninsular Railroad Company, and the Savannah, Florida and Western Railroad Company to enforce its order issued against those companies in a case instituted before the Commission by the Savannah Bureau of Freight and Transportation and nine other complainants, who were described as "general merchants, naval stores manufacturers, and cotton shippers" in Florida along the line of the Pensacola and Atlantic Division of the Louisville and Nashville Railroad Company. The decision of the circuit court, rendered in July last and reported in 118 Fed. Rep. 613, sustained the order of the Commission. The Louisville and Nashville Railroad Company, in order to prevent the movement eastward to Savannah of cotton from its Pensacola and Atlantic Division stations, and cause that traffic to move in the opposite direction to New Orleans and over its lines to the Northwest, advanced the Savannah cotton rate from $2.75 to $3.30 per bale, and also, with the same end in view, made the rates from such Pensacola and Atlantic Division stations on naval stores-turpentine and rosin— to Savannah, relatively as well as absolutely, very much higher than its rates to Pensacola and over its lines to the Northwest. The court found

that the rates thus established were not only excessive, but prohibitory, and subjected Savannah to an undue prejudice in favor of Pensacola, New Orleans, and other points on the lines of the Louisville and Nashville road to the Northwest. It said that these discriminations against Savannah were practically admitted by the defendants, and that the sole justification relied upon was the promotion of the interest of the Louisville and Nashville Railroad by building up the port of Pensacola, and further by securing to that road the long hauls from Pensacola to the Northwest. The court held that while a railroad may so adjust its rates as to promote its legitimate interests, it can not for this purpose adopt rates excessive in themselves, in violation of section 1 of the law, or unduly preferential to points on its own line and unduly prejudicial to points on another line, in violation of section 3 of the law.

The rates complained of on naval stores from Pensacola and Atlantic Division stations to Savannah were held by the court to be not only unduly prejudicial to Savannah, but also unduly prejudicial to such stations on the Pensacola and Atlantic Division in that they limited them to the so-called Pensacola market and debarred them from the better market at Savannah.

The court further held in this connection that a railroad corporation may not fix its rates with a view solely to its own interests and ignore the rights of the public; the public can not properly be subjected to unreasonable rates in order simply that the stockholders may receive dividends.

It appeared that the Pensacola and Atlantic Division of the Louisville and Nashville road, extending from Pensacola to River Junction, Fla., on the Chattahoochee River, taken as a separate road and not as a part of the Louisville and Nashville system, failed to pay its expenses; but it was held by the court that this did not justify the discriminations shown in this case; that there are many such roads absorbed by the principal railway systems of the country and, if this contention were sustained, it would in a great majority of cases, involving unfair and prejudicial rates, effectually nullify the interstate-commerce law and the powers of the Interstate Commerce Commission.

It appeared that the advance of the cotton rate to Savannah from $2.75 to $3.30 per bale was not made until after the hearing before the Commission, but was made while the case was pending before the Commission, was called to the attention of the Commission by the defendants, and was embraced in the order of the Commission. One of the matters in issue, therefore, before the Commission was the Savannah cotton rate. The defendants in their answer in the court denied that the rate of $3.30 was in violation of either section 1 or 3 of the law, and on this issue evidence was taken and argument had,

H. Doc. 181-4

The defendants contended that, as the increased rate was made after the hearing before the Commission, the Commission had no jurisdiction to declare the rate of $3.30 unreasonable and excessive; but the court held that as the cotton rate to Savannah was in issue before the Commission the legal effect of the Commission's findings would not be defeated upon a technical objection of this character, and, moreover, that whatever the defendants might have said before the Commission, they were estopped from objecting to the jurisdiction of the court, because they denied in their answer that such rates were in violation of the act, as found by the Commission, and that upon this issue evidence had been taken in the court and the defendants had clearly submitted to the jurisdiction of the court in respect to the advanced cotton rate.

The rates to Savannah were regularly published rates, participated in by each of the defendants, and their proportionate divisions were brought about by an agreement between themselves. This, it was said, constituted "a common control, management, or arrangement for a continuous carriage or shipment," as defined by section 1 of the act to regulate commerce, and therefore each of the participating roads was within the scope of the act, and, to the extent of its authority, under the control of the Commission.

Speaking of the Commission, the court said the Interstate Commerce Commission must be regarded as an expert tribunal with relation to transportation rates, and that whether the members of the Commission are in fact expert or otherwise is not open to question, for they are, by section 12 of the act, required to execute and enforce its provisions regulating commerce.

Construing sections 14 and 16 of the statute, the court further held that the act to regulate commerce expressly makes the findings of fact in the report of the Commission prima facie evidence of the matters therein stated; that the conclusions of the Commission upon those facts and its order based thereon are also to be held prima facie correct and lawful; and that the burden is upon the defendants to show the erroneous character of the Commission's findings and the unlawfulness of its order.

In concluding its opinion, the court said:

We do not underestimate the gravity and importance of the interests involved in this controversy. The record has been given that anxious and deliberate consideration seemingly appropriate, and which besides was made necessary by its great volume and complexity. The railways of our country have been aptly said to constitute the arteries of the national life. The public official or other person who would grudge to them the large measure of prosperity which their inestimable services to the country deserve is as short-sighted as unpatriotic, as narrow as unjust. While this is true, the mistakes or excesses of zeal or judgment on the part of railway officials may at times make these vast enterprises, ordinarily benevolent, instrumentalities of grave private wrong and communal injury. The framers of the Constitution, though

unconscious of the indescribable development in the intercommunication of the people, yet "prophetic and prescient of all the future had in store," provided for every contingency when it bestowed upon Congress the tersely expressed but elastic power "to regulate commerce with foreign nations and among the several States." Congress has exercised this power, and the righteous orders of the great Commission it has primarily intrusted with the tremendous duty should in all proper cases be respected and enforced by the courts of the country. The organic law upon which this power in Congress and in the courts is founded, is the sure guaranty to investors in transportation lines against the assaults, whether of the agrarian or the demagogue, the anarchist or the mob. While on occasion the railway company or other corporation may suffer a temporary diminution of revenues from an order of this character, the interest of the public, and in the end the interest of the corporation itself, is conserved. In all such cases the general welfare must control.

THE DANVILLE, VA., LONG AND SHORT HAUL CASE.

On August 4, 1902, the United States circuit court for the western district of Virginia rendered its decision in a case brought by this Commission against the Southern Railway Company to enforce an order issued against that carrier in a proceeding before the Commission instituted by the city of Danville. The decision of the court is reported in 117 Federal Reporter, 741.

The Commission held in this case that freight rates from Northern and Eastern cities, from Western points of shipment, and from New Orleans to Lynchburg, Va., the longer distance point, might properly be somewhat lower than the rates to Danville, the shorter distance point, but that rates to Danville as compared with those then in force to Lynchburg were excessive under the long and short haul clause as well as the undue preference section of the act to regulate commerce; that the rates from Northern and Eastern cities to Danville and the rates from New Orleans to Danville on sugar, molasses, rice, and coffee should not exceed those to Lynchburg by more than 10 per cent, and that the rates between Danville and the West, including the rate on tobacco to Louisville, Ky., should not exceed those between Lynchburg and the West by more than 15 per cent.

The circuit court refused to enforce the order of the Commission, holding in substance that the lower rates to Lynchburg, the longer distance point, were compelled by the competition of other railway carriers, and that the prima facie case made by the findings of the Commission that the rates charged by the Southern Railway Company to and from Danville were unjust and unreasonable, was overcome by the evidence, which included new evidence taken since the hearing before the Commission. An appeal was taken to the circuit court of appeals, and the case was argued in that court in November.

Apparently the circuit court in disposing of this case took no account of the situation of Danville and Lynchburg, the trade competition between the two cities, or the general method of making rates adopted by carriers in Southern territory. In considering the question of the