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Eastern points were, with some exceptions, as low to Griffin as to Macon, and that from Louisville and Cincinnati there was railroad competition for traffic to Griffin as well as to Macon. The defendants relied upon competition between markets as well as railroad competition, and also upon competition of carriers by water from Eastern cities to Savannah or Brunswick and of boat lines running up from the coast. This river competition was found to be inactive and of no controlling force, and the competition of carriers by water from Eastern cities was not competition for freight from Louisville or Nashville. The Commission reaffirmed its previously announced construction of the fourth section, to the effect that water competition, to justify higher shorter-distance charges, must be actual for the transportation involved and such as to dictate the rate by rail; and that competition between markets, or between carriers subject to the regulating statute, does not create such dissimilarity of circumstances and conditions as will justify carriers in charging more for the short than for the long haul, under the fourth section, without an order of the Commission.
But the Commission further held that if there can be esceptional instances in which competition between railroad carriers subject to the act may create the dissimilarity of circumstances and conditions under the fourth section, this case, where such competition is shown at both Griffin, the shorter-distance point, and Macon, the longer-distance point, is not one of them, “Indeed," said the Commission, it is difficult to conceive of a situation which more strongly calls for the application of the inhibition of that section than the present. Here are two cities, each of which has in fact railway competition, but in case of which the railroads interested have determined that one shall and the other shall not enjoy the benefit of that competition in the matter of rates. If the mere fact that competition exists between the different carriers interested in these and kindred rates gives to those carriers absolute juris. diction, so to speak, to say where effect shall and where it shall not be given to such competition, it is difficult to understand what remains of the fourth section."
It was also decided in that case that defendants' rates unjustly discriminate against Griffin and in favor of Macon, in violation of section three. Every inhabitant of Griffin who buys a barrel of flour or a can of becf pays more for it than he would if he resided in Macon. “The complainants are absolutely prohibited from competing upon equal terms with the Macon wholesaler outside the limits of the city of Griffin itself. This sort of discrimination is intolerable, and should under no circumstances be permitted unless justified by necessity." The railways interested arbitrarily determine that Macon shall be a basing point and that Griffin shall not be. This does not accord with the spirit or letter of the act. “It should not be left to the whim of one or half a dozen railroad managers to determine whether a given city may or may not be a trade center. The same causes which operate in one instance should have the same effect in another instance."
Another decision, rendered August 20, 1897, involved rates for the transportation of coal from mines in Alabama to longer and shorter distance destinations on the Alabama and Vicksburg Railway, which extends from Meridian to Jackson, Miss., and thence to Vicksburg. The longer-distance points involved, and to which lower rates were charged, were Jackson and Vicksburg, and just before the decision was rendered the rates to Jackson and Vicksburg were made the same—$1.55 per ton—while to all other points on the Alabama and Vicksburg Railway the rate from Alabama mines was 50 cents greater, or $2.05 per ton. Railroad, water, and market competition, the defense usually relied upon by carriers in the Southern States, under the fourth section, was insisted upon by the defendants in this case as justifying the higher shorter-distance charges.
As to transportation to Vicksburg, the Commission said that coal transported from Corona and other Alabama mines to Vicksburg must go by railroad, and the competition of such coal, and coal from other Alabama mines in the Vicksburg market, is with coal brought over long distances down the Ohio and Mississippi rivers from Pittsburg and other points in that district; that this is not competition between rail and water lines for transportation from a particular locality, but the competition of markets or mines for the supply of coal at Vicksburg, the force and effect of which is determined by commercial considerations peculiar to the business of shippers and wholly disconnected from the circumstances and conditions under which the transportation is conducted.
As to the transportation to Jackson, it appeared that the defendants and other carriers, all subject to the act to regulate commerce, were engaged in the transportation of coal, wholly by railroad, from mines in Alabama and other States to Jackson under agreed rates which were less for each line than those charged on coal for shorter distances over the same line in the same direction; and the Commission held that the transportation by defendants from such mines to Jackson and the shorter-clistance localities on the Alabama and Vicksburg Railway is performed under substantially similar circumstances and conditions within the meaning of the fourth section,
The Commission was enabled in this decision to show the fallacy of a defense which relies upon railroad competition to justify charges not in conformity with the general rule of the fourth section:
Under the facts pertaining to coal transportation to Jackson and the shorterdistance localities, the defense amounts to a claim that the carriers to Jackson are entitled, under the fourth section, to make the lower longer-distance rates to Jackson because of artificial conditions created by themselves. All of these carriers are subject to the law, all of them depart from the long and short haul rule of the law, and each defendant attempts to justify its departure by the similar act of the other carriers. If there were but one carrier to Jackson, the long and short haul rule, it is practically admitted, would apply on coal to that city; but because there are different interstate rail lines over which coal is carried to Jackson, it is contended, in substance, that each line is authorized to ignore that rule.
After stating its decision, the Commission pointed out that the prohibition in the fourth section is limited to traffic cover the same line" and “in the same direction;” that it applies only to “transportation under substantially similar circumstances and conditions," and that the “shorter” must be included within the longer distance.” “Notwithstanding these limitations in the statute," said the Commission, “the law furnishes a method by which carriers may secure needful relief from any unjust burdens which observance of this rule would impose, and the remedy so provided must be deemed adequate to their protection." The remedy thus indicated is that obtainable under the proviso to the section upon application to the Commission for an order of relief.
In two cases involving rates under the fourth section, decided during the year, the carriers were found to have made such changes prior to the decision as to obviate the necessity for an order. In one case the defendants charged on cotton-seed meal to Philadelphia 29 cents from Memphis, Tenn., and 34 cents from Dyersburg, Tenn., a shorter-distance intermediate point on the same line. A rate of 20 cents was put in force from both Memphis and Dyersburg. In the other case, rates for the transportation of wheat to Morristown and other points in Tennessee were higher for the shorter distance from Nicholasville, Ky., than for the longer distance over the same line in the same direction from Cincinnati, Ohio; but by a joint tariff filed with the Commission before the case was disposed of, the rates froin Nicholasville were made not higher than those from Cincinnati.
RATES ON MILK FROM COMPETING PRODUCING LOCALITIES TO A COMMON MARKET.
An important case decided in March last involved rates on milk shipped from producing sections, principally in New York, Pennsylvania, and New Jersey, for consumption in New York and adjacent cities. Under a long prevailing practice the same rate was charged for all distances, whether short or long, and this rate was the same over all the carrying lines engaged in the traffic. The rate was 32 cents per can of 40 quarts. If the milk was shipped in bottles it was still 32 cents per 40 quarts, or 0.8 of a cent per quart bottle. On cream the rate was 50 cents per 40-quart can, or 14 cents per quart bottle. Six delivering carriers with their connections participated in transportation at those rates. Another, the New York, New Haven and Hartford Railroad Company, brought milk from Connecticut points at much lower charges and from a different section of country, and for reasons stated in the decision no order was made as to that road. The other six lines, all operated west of the Hudson River, made delivery in New Jersey oppo. site New York City, at Weebawken, Jersey City, and Hoboken. The Erie brought milk at the 32-сent rate from as far west as Hornellsville, N. Y., 332 miles from Jersey City; the Lackawanna line brought it from Columbia, N. Y., 310 miles, and some from Leicester, N. Y., 354 miles
from Hoboken, and the Lehigh Valley had a milk station at Romulus, N. Y., 335 miles from Jersey City. The same charge was made when the milk came from the nearest interstate shipping station, for example, Turners, N. Y., on the Erie, 46 miles from Jersey City.
The complaint was brought by an association of producers at the shorter distance localities, alleging the uniform rate to be unreasonable for the service rendered to them, and to result in undue preference to the more distant shippers, and these allegations were fully sustained by the evidence. There had been uniformity in charge but absence of uniformity as to service and traffic inducements on the lines west of the Hudson River. Natural disadvantages of more distant producers were thereby overcome and producers nearer the common market were denied recognition of their more favorable location. The same question was before the Commission in 1887 in the Howell Case (2 1. C. C. Rep., 272), when the uniform rate extended over much less distance on most of the lines and when fewer lines were engaged in the traffic, and the Commission, upon the record of that case, held that there was no proof that injury resulted to the near-by producers from the uniform rate as it was then applied, or that the rate was unreasonable from any of the localities. But since that decision other carriers had entered extensively into the business, one of them having succeeded in securing and bringing more milk to the New York market than any of its competi. tors, while some of the old lines had lost traffic, most of which had come from the near-by region; and all the long-distance lines had greatly extended the application of the rate. · One road, after the case was heard, put in a tariff under which the 32-сent rate was available from a station 417 miles from its New York terminal, and just east of Buffalo, N. Y., and that rate was also in force for any milk that might be shipped from a station 19 miles from the terminal. The peculiarity of the traffic and the situation as found by the Commission is indicated in the following extract from our report of the case:
Unlike most cases in which the legality of group or uniform rating lias been questioned, the traffic which is the subject of present consideration constitutes the great bulk of an important daily food supply for New York and adjacent cities which, because of its extra perishability, can be drawn only from sources accessible by daily rail communication from the market of consumption and sale; and, on the other hand, the sale or demand in such market is necessarily limited to the quantity required for daily consumption. While the available milk supply should at all times be sufficient to meet the needs of consumers in such a market, a surplus of this commodity can not, because of its perishability, bo kept over or reshipped for sale in other cities. Under such circumstances the shipments are practically limited to the amount of daily consumption, and this fact emphasizes the duty of the carriers to establish rates which will not deprive producers more favorably situated with reference to and dependent upon that market of part of their trade in a limited traffic, or prevent them from supplying their share of the greater demand due to increase in the city population or in consumption per capita. Furnishing an extra perishable article like milk in no greater quantity than is required for daily use in a given city is a business which falls naturally to those producers nearest to the city who are able to provide the needed supply.
Instead of the single rate for all distances the Commission ordered that there should be at least four divisions of stations, each group taking different rates. These four groups and the maximum rate for each were determined as follows: Group 1, 40 miles from the terminal, 23 cents per 40-quart can. Group 2, next 60 miles, 26 cents per 40-quart can. Group 3, next 90 miles, 29 cents per 40-quart can. Group 4, beyond 190 miles from the terminal, for which the present rate of 32 cents was found not to be excessive. The rate on cream in cans was permitted to remain 18 cents higher than the rate charged on milk for each group. Some exceptions were made, so as to make rates apply over short-line distances, and for one road, the Ulster and Delaware, the third group distance was made 30 instead of 90 miles, because of difficult grades over a range of mountains and the fact that all of the shipments over that road were made from beyond the mountains. The carriers were recommended to make a difference of at least one-fifth of a cent'a quart between rates on shipments in cans and shipments in bottles packed in cases, the latter having been found to weigh much more than when the same quantity is carried in cans.
An application to slightly modify the order as to one or two points on a branch of the New York, Ontario and Western Railway was opposed by a competing carrier from the same section and denied. Shippers on the Ulster and Delaware road, as to which the above stated exception in group distance and rate was made, are seeking by complaint to have the group distances and maximum rates determined for the other lines apply also on that road. The order was promptly obeyed in all respects by cach of the carriers, and it is understood that the decision is regarded by the carriers, as well as most of the shippers, as a generally satisfactory solution of a difficult question involving the adjustment of relative rates over different lines and from many localities.
The case was decided and the order complied with prior to the decision of the Supreme Court denying power in the Commission to prescribe maximum rates for carriers to observe in the future.
FREE TRANSPORTATION OF SHIPPERS.
It appeared in the milk case above mentioned that on some of the defendant lines passes were issued to shippers or dealers on account of the interstate milk traffic of the road. It was held that the issuance of such passes for interstate transportation is an offense against the law, as affording transportation for an interstate journey at less than established rates; and whether the pass issued entitles the holder to interstate passage or not, if granted on account of the interstate transportation of freight it results in a rebate or device whereby the pass holder obtains such freight transportation not only at something less than tariff rates, but for less net price than is exacted from persons not so favored who are shippers of like traffic, transported under similar conditions, between the same points.