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reasonableness of rates to Danville the court compared those rates with rates to other cities in the South and found that the Danville rates compared favorably with those to other Southern cities; but this, as shown in the opinion of the Commission, results from the system of rate making employed in the South, and other considerations—such, for instance, as distance from the point of shipment--might operate to destroy the value of such comparison. The Commission held that this system of rate making into Southern territory, under which, on traffic from St. Louis, Chicago, and other points, the rates to Danville are the sums of locals to and from the Ohio River, and the rates to Lynchburg are made on a much lower joint-rate basis, is utterly unreasonable. We expressed no opinion as to the system as a general scheme, but said if the carriers desired to make rates in that manner they must so adjust their charges as not to annihilate the city of Danville; that rates to Danville must be adjusted with relation to rates to competitive localities like Lynchburg, and that the carriers from the point of origin to destination should prorate in these rates if they participate in either Lynchburg or Danville business.

We further said that in determining the Danville rate from New Orleans and Western points of shipment, the Southern Railway, which dominates the situation, should, instead of adding to the rate to Lynchburg the local back from Lynchburg, recognize that the business is through business upon which Lynchburg, a competitor of Danville, enjoys a low through rate, and upon which Danville itself is entitled to a through rate.


In this case the Commission ordered the defendant carriers to cease and desist from charging rates from St. Louis, Nashville, and Chattanooga which were much higher for the shorter distance to Hampton, Fla., than for the longer distance to Palatka, Fla., but that the rates to Hampton might lawfully be certain stated differentials higher than those to Palatka. The defendant carriers having disobeyed the order, suit to enforce it was brought by the Commission in the United States circuit court for the southern district of Florida. After trial the court dismissed the petition without a written opinion and appeal was taken to the circuit court of appeals.

A number of cases in Federal and State courts construing the act to regulate commerce and involving questions bearing on the carriage of interstate commerce have been decided, and are briefly noticed below.


A decision in the case of the Lehigh Valley Railroad Company v. Rainey et. al. (112 Fed. Rep., 487) was rendered on January 4, 1902, in the United States circuit court for the eastern district of Pennsylvania. The case was brought originally in the State court by Rainey and others to recover damages for unjust discrimination in rates on coal, the discriminating rates apparently have been granted to the Lehigh Valley Coal Company, a corporation owned by the railroad company.

The case was removed to the Federal court on defendant's petition, and the court directed a verdict in favor of the plaintiffs. Thereafter, on motion for a new trial, the court rendered the decision above mentioned, which is short and reads as follows:

For present purposes it must be assumed that the rate complained of was discriminating, but I still think that a mere paper rate, which is never carried into effect, and is therefore simply a proposition to carry for a specified sum, is not such a violation of the interstate-commerce act as to prevent the carrier from recovering freight from other than the theoretically favored shippers. It is discrimination in fact, and not a mere intention to discriminate, that is punishable; and in the case before the court there was no evidence that a pound of coal had been carried to be sold in the market by any other shipper than the defendants. Hence no rival of the defendants was benefited by the unaccepted rate, and no harm was done to their business.

It did appear, however, that coal was carried by the plaintiff from the disputed point of shipment for use in its own engines; this coal having been mined by the Lehigh Valley Coal Company, which was clearly proved to be the Lehigh Valley Railroad Company in another dress. The identity of interest between the two corporations was so plain that it seemed idle to question it, so far as its practical effect upon the matter at issue was concerned, although, of course, the court did not intend to treat as nonexistent for all purposes the legal distinction between the two separate corporate entities. But dealing with real things and not with mere shows, it was clear to my mind that (for the purposes of the case before me) the coal company was mining as the scarcely veiled hand of the railroad company, and therefore that it made no difference at all what rate of freight was formally charged by the railroad company for hauling the coal. In essence, the railroad company mined, carried, and burned its own coal; and, under such circumstances, I still think it was correct to say that a charge for freight would be little more than a bookkeeping entry,

A new trial was refused.


In Central Stock Yards Company v. Louisville and Nashville Railroad Company, the United States circuit court for the western district of Kentucky construed the provisions of the act to regulate commerce, with reference to an application for injunction to compel the defendant carrier to deliver stock to a connecting carrier, for the purpose of final delivery at a stock yard other than the yard used by the defendant carrier for such delivery in the same city (112 Fed. Rep., 823). The court said that section 3 of the act to regulate commerce requires every common carrier subject to its provisions to afford all proper and equal facilities for the interchange of traffic between their respective connecting lines; that section 8 of the act makes every such carrier liable to persons injured by the violation of any provision of the act for the damages sustained thereby; that section 9 provides that any person claiming to be so damaged may either make complaint to the Commission or may bring suit for the recovery of such damages in the district or circuit court of the United States; and that section 16 authorizes a resort to equity to enforce the Commission's ruling. And thereupon the court held that the remedies provided by sections 8 and 9 of the act were exclusive, and that an appeal for injunction to compel obedience to section 3 would not lie. It further held that, the defendant having made answer to the bill, and as the complainant's right to preliminary injunction was not practically free from doubt, the preliminary injunction should not be granted.

This case having been appealed to the circuit court of appeals for the sixth judicial circuit, that court rendered its decision in July last (118 Fed. Rep., 113), the points of which are briefly stated as follows: Where a railroad company has, by building stock yards, or by contract with a stock yards company, made adequate provision for the discharge of its duty as a common carrier with respect to live stock shipped over its line to a city, it is not required by the common law to make delivery of stock consigned to such city to connecting roads for delivery at other stock yards therein. It is the duty of a carrier of live stock to provide reasonable facilities for the unloading and care of such stock; and where it has done so, either by building stock yards of its own or by contract with a stock yards company, its refusal to deliver stock to other stock yards in the same city is not an unlawful discrimination, in violation of section 3 of the interstate-commerce act. In the absence of statutory provision, the interchange of traffic between two connecting railroads is a matter for contract between them, and the courts have no power to compel such interchange, or to fix the terms on which it shall be made. Nor is such power conferred upon the courts by the interstate-commerce act.

A State is without power to compel a railroad company to transfer cars of live stock to a connecting road at a point of connection within the State, where the shipment was received in another State, and is, therefore, a subject of interstate commerce.


In Gulf, Colorado and Santa Fe Railway Company v. Leatherwood 69 S. W. Rep., 119), the Texas court of civil appeals held that in an action to recover excess freight charges, evidence that a certain rate higher than that contracted for by the carrier, which higher rate was demanded by the agent at final destination, was in a printed tariff furnished the agent, and which tariff was on file in the office of the general freight agent, was not sufficient to show that it was established and published, as required by the interstate-commerce act.


In Ratican v. Terminal Railway Association of St. Louis, the United States circuit court for the eastern district of Missouri decided on March 11, 1902 (114 Fed. Rep., 666), that the interstate-commerce act prescribed no limitation of time within which actions based upon it shall be instituted, and therefore such actions (meaning actions for the recovery of damages) must be governed, as to limitation, by the statutes of the State wherein they are brought. It was also held in this case that the interstate-commerce act is a penal statute, and an action to recover damages for a violation of section 2, prohibiting discrimination in rates, is one to recover money in the nature of a penalty, and when brought in Missouri is governed, as to limitation, by section 2425 of the Revised Statutes of that State, which requires that action "upon any statute for any penalty or forfeiture to be given in whole or in part to the party aggrieved” be brought wholly within

three years.


In the United States circuit court for the district of Maine the court in Duncan v. Maine Central Railroad Company (113 Fed. Rep., 508), held that a person riding over a railway on a pass given without consideration, and after assenting to the conditions that he should assume all risk of accident, and that the carrier should not be liable, can not recover from the railway for injuries caused by the negligence of its servants. It was also decided in this case that it was immaterial that the giving of the pass was a breach of the act to regulate commerce.


The decision of the United States Supreme Court in Minneapolis and St. Louis Railroad Company against Minnesota (186 U. S. 257), held that the act of the legislature of Minnesota creating a railroad commission is not unconstitutional in assuming to establish joint through rates or tariffs over the lines of independent connecting railroads and apportioning and dividing the joint earnings. Such a commission, says the court, has a clear right to pass upon the reasonableness of contracts in which the public is interested, whether such contracts be made directly with the patrons of the road, or for a joint action between the roads in the transportation of persons and property,

in which the public is indirectly concerned. In this case the railroad commission undertook to revise an already existing joint rate, and the court held that without deciding whether connecting roads may be coinpelled to enter into contracts as between themselves and establish joint rates, it is none the less true that where a joint tariff between two or more roads has been agreed upon, such tariff is as much within the control of the legislature as if it related to transportation over a single line. It is further held that the rates fixed by the commission must be presumed to be reasonable, and that the burden of proof is upon the railroad company to show the contrary. There was showing on the part of the defendant carrier that if the tariff fixed by the commission were applied to all freight, the road would not pay its operating expenses. But the court ruled that this did not prove the tariff fixed by the commission to be unreasonable, since it might well be that the existing rates upon merchandise, which are not disturbed by the commission, might be sufficient to earn a large profit to the company, though it might earn little or nothing upon coal in carload lots.

A further statement in the decision is that in exercising its power of supervising coal rates the commission is not bound to reduce the rates upon all classes of freight, which may perhaps be reasonable except as applied to a particular article; and if, upon examining the tariffs of a certain road, the commission is of opinion that the rate upon the particular article or class of freight is disproportionately or unreasonably high, it may reduce such rate, notwithstanding that it may be impossible for the company to determine with mathematical accuracy the cost of the transportation of that particular article as distinguished from all others.



We discussed in our last annual report a decision by the United States circuit court for the western district of Arkansas, which was to the effect that transportation passing through different States, but beginning and ending in the same State, constitutes commerce among the States, and is subject only to regulation by Congress. It is understood that this case is now pending on appeal in the United States Supreme Court. During the present year a contrary decision has been rendered by the United States district court for the western district of New York, in United States ex rel. Kellogg et al. v. Lehigh Valley Railroad Company (115 Fed. Rep., 373). In this case it was held that a shipment of grain over a single railroad between two points, both within the same State, but passing en route through different States, is not an interstate shipment so as to bring it within the terms of the interstate commerce act and authorize a Federal court to compel such shipment at the same rates charged other shippers of a like commodity. It is expected that this much-disputed question, which has given rise to numerous conflicting decisions, will now, on the appeal of the Arkansas case, be finally determined by the court of last resort.

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