Hence the

we have seen, rests upon an erroneous principle, and is unreliable. order based thereon can not be sustained, and is not to be judicially enforced.

We have only to add that the evidence before us is quite convincing that the actual cost of transporting coal from the Lehigh and Mahanoy regions to Perth Amboy was and is considerably more than 85 cents per ton.

THE SOCIAL CIRCLE CASE.a

"If the Commission, instead of withholding judgment in such a matter until an issue shall be made and the facts found, itself fixes a rate, that rate is prejudged by the Commission to be reasonable." Decision of the Supreme Court in this case.

This case is especially interesting because it is the only one in which any part of an order of the Interstate Commerce Commission has received the approval of the United States Supreme Court. The original complaint involved the rate on buggies, carriages, and freight taking "first-class" rates from Cincinnati to Social Circle, Ga., and from the same point to Atlanta. The complaint concerning the rate to Social Circle involved the fourth section, or long and short haul clause, of the law, and the facts showed that while the rate to Social Circle was $1.37 per 100 pounds, the same kind of freight was carried through Social Circle to Augusta for $1.07 per 100 pounds. The Atlanta rate was alleged to be unjust in comparison with that to Augusta because both were the same, while the route through Atlanta to Augusta was 171 miles longer than the route to Atlanta. On both points the Commission decided in favor of the complainant. The defendants were ordered to "cease and desist " from charging more from Cincinnati to Social Circle than to Augusta and from charging more than $1 per 100 pounds to Atlanta.

The circuit court refused to enforce any part of this order and dismissed the petition of the Commission. Its refusal, so far as concerns the Social Circle rate, was based wholly upon its interpretation of the meaning of the word "line" in the interstate-commerce law, and the decision contains no statement of the views of the court as to the substantial justice of charging more to Social Circle than to Augusta. As the order of the Commission, so far as it affected the Social Circle rate, was subsequently approved and its enforcement decreed by the Supreme Court, it is not necessary now to consider that question. On the point of the reasonableness of the Atlanta rate all of the courts which passed upon the case disagreed with the Commission. The report of the latter indicates that it did not have a great deal of evidence on which to decide this point. The following is an extract:

The only testimony offered or heard as to the reasonableness of the rate to Atlanta in question was that of the vice-president of the Cincinnati, New Orleans and Texas Pacific Company, whose deposition was taken at the instance

The James & Mayer Buggy Company v. The Cincinnati, New Orleans and Texas Pacific Railway Company, The Western and Atlantic Railroad Company, and The Georgia Railroad Company; Interstate Commerce Commission (4 I. C. C. Rep., 744), decided June 29, 1891. Interstate Commerce Commission v. Same Defendants; Circuit Court Northern District of Georgia (56 Fed. Rep., 925), decided June 3, 1893. Interstate Commerce Commission, Appellant, v. Same Defendants; Circuit Court of Appeals, Fifth Circuit (4 Inter. Com. Rep., 582), decided May 29, 1894. Cincinnati, New Orleans and Texas Pacific Railway Company et al., Appellants, v. Interstate Commerce Commission; Interstate Commerce Commission, Appellant, v. Cincinnati, New Orleans and Texas Pacific; Supreme Court (162 U. S., 184), decided March 30, 1896.

of said company. The witness testified that he had been in the railroad service about twenty-six years, and had much to do with rates during all that time, and that he considered $1.01 per 100 pounds, in less than carloads, a reasonable rate on first-class freight from Cincinnati, Ohio, to Atlanta, Ga. This statement or estimate of the rate from Cincinnati to Atlanta, we believe, is fully as high as it may reasonably be, if not higher than it should be; but without more thorough investigation than it is now practicable to make we do not feel justified in determining upon a more moderate rate than $1 per 100 pounds of first-class freight in less than carloads. The rate on this freight from Cincinnati to Birmingham, Ala., is 89 cents, as compared with $1.07 to Atlanta, the distance being substantially the same. There is apparently nothing in the nature and character of the service to justify such difference, or, in fact, to warrant any substantial variance in the Atlanta and Birmingham rates from Cincinnati.

Discussing the foregoing, the opinion of the circuit court says:

It will be perceived that the only finding of fact was the testimony of one witness that the rate of $1.01 was reasonable, and the comparative rate to Birmingham, on which the Commission seems to lay stress. It seems that for a short time at least a rate of $1.01 was in force from Cincinnati to Atlanta and that it was as to this rate that the testimony of one witness before the Commission was taken. It appears in evidence here that the rate from Cincinnati' to Atlanta, in 1879, was $1.39, and that afterwards it was $1.10, and subsequently $1.07, except, perhaps, as stated, it was for a short time $1.01. As to the rate to Birmingham, there is evidence before the court which was evidently not before the Commission-namely, that the rate from Cincinnati to Birmingham, which seems previously to have been $1.08, was forced down to 89 cents by the building of the Kansas City, Memphis and Birmingham Railroad, which new road caused the establishment of a rate of 75 cents from Memphis to Birmingham; and by reason of water routes to the northwest such competition was brought about that the present rate of 89 cents from Cincinnati to Birmingham was the result. It seems to be no sufficient reason to determine the rate from Cincinnati to Atlanta unreasonable because of the lower rate to Birmingham, when such lower rate is caused by conditions which do not operate as to Atlanta.

The conclusion of the Commission should undoubtedly be considered in connection with the facts on which that conclusion was based; and the principal fact which seems to have been in the mind of the Commission is satisfactorily explained here, as has been indicated. The evidence offered here on behalf of the railroads is, in the opinion of the court, sufficient to overcome any prima facie case that may have been made by the findings of the Commission. On the whole testimony, as now before the court, it is not believed that the Commission would have found the rate in question to be unreasonable.

The circuit court of appeals reversed the decision of the circuit court and ordered the enforcement of the Commission's order relating to the Social Circle rate, but denied its petition as to the Atlanta rate. Both parties appealed to the Supreme Court, the Commission asking for the enforcement of its order as to the Atlanta rate, the railways seeking the reversal of the decree of the circuit court of appeals as to the Social Circle rate.

The Supreme Court sustained the circuit court of appeals on both points in a most notable decision, written by Judge Shiras, in which it declared that the Commission had not received from Congress the power to fix or make rates. This decision was rendered on March 30, 1896. The position taken by the Supreme Court in regard to the Atlanta rate is shown by the following:

As already stated, the circuit court of appeals adopted the views of the circuit court in respect to the reasonableness of the rate charged on first-class freight carried on defendant's line from Cincinnati to Atlanta, and as both courts found the existing rate to have been reasonable we do not feel disposed to review their finding on that matter of fact.

CARTAGE CASE.

"Not in fact the complaint of a shipper but of a rival and competing line.”— Dissenting opinion of Commissioner Bragg.

The complainants in this case were engaged in business at Ionia, Mich., which is a point on the defendant's line between Detroit and Grand Rapids. The substance of their complaint was that the defendant supplied free cartage of freight between its depot in Grand Rapids and the stores, warehouses, etc., of its patrons, while the consignees and shippers at Ionia were required to perform their own cartage. The following stipulation of fact, among others, was agreed to by both parties before the Commission:

That the respondent provides, at its own expense, drays, carts, and trucks at the city of Grand Rapids for the service of transporting merchandise and freight generally, as well as merchandise and freight consigned from Philadelphia, New York, Boston, and points east of Detroit, between its station at Grand Rapids and the places of business of merchants, traders, and other patrons of its road at that place, which service it performs without additional charge to the owner or shipper of property on account thereof; that this service is not furnished to complainants or other merchants, traders, and patrons of its road at the city of Ionia; that this service at Grand Rapids has been openly and notoriously rendered for a long period of time, to-wit, for twentyfive years and upward; that its station at the said city of Grand Rapids is within the corporate limits thereof, and is on an average 14 miles from the business sections of said city where the traffic of the places tributary to respondent's road originates and terminates, while respondent's station for receipting and discharging freight and property at the city of Ionia is not to exceed an eighth of a mile from the business center of said city; that at the city of Grand Rapids there are two other railroads, the Michigan Central Railroad and the Grand Rapids, Lansing and Detroit Railroad, both of which are immediately and directly in competition with respondent's road for the business of Grand Rapids; that the stations of both of said roads for receiving and discharging freight and property at Grand Rapids are near the business center of said city, requiring only short haul to and from their stations. on an average about one-quarter of a mile; that respondent did the carting of freight to and from its station at Grand Rapids substantially in the same manner as at present, long prior to the time when either said Michigan Central or Grand Rapids, Lansing and Detroit railroads was constructed to that place. The schedule rates to Ionia and Grand Rapids were the same. Three of the five members of the Commission took the view that to supply free cartage at Grand Rapids and not at Ionia was illegal. They regarded it as an illegal concession from the published rate, as an unjust discrimination in favor of Grand Rapids, and as in violation of the long and short haul clause. Commissioner Veazey did not sit in the case and Commissioner Bragg wrote an opinion strongly dissenting from the view of the majority. The latter said in part:

If the construction of the statute reached in this proceeding by the majority of the Commission is to be adopted as the rule on this subject, the point of receipt or delivery of freight in every case may become material in determining the

Mary O. Stone and Thomas Carten v. The Detroit, Grand Haven and Milwaukee Railway Company; Interstate Commerce Commission (3 I. C. C. Rep., 613), decided April 26, 1890. Interstate Commerce Commission v. Detroit, Grand Haven and Milwaukee Railway Company; Circuit Court, Western District of Michigan, Southern Division (57 Fed. Rep., 1005), decided October 6, 1893. Detroit, Grand Haven and Milwaukee Railway Company, Appellant, v. Interstate Commerce Commission. Circuit Court of Appeals, Sixth Circuit (74 Fed. Rep., 803), decided April 14, 1896. Interstate Commerce Commission, Appellant, v. Detroit, Grand Haven and Milwaukee Railway Company; Supreme Court (167 U. S., 633), decided May 24, 1897.

question of a violation of section 4; or of an unlawful preference; or of an unreasonable or unjust prejudice; and towns where the station is comparatively distant may insist that other towns beyond them on the same line can not enjoy the advantage of stations much nearer unless a corresponding change in rates is made because drayage is materially less. it will then logically follow and be next In order for us to prescribe what must be the average distance of a depot from the business portion of a town or city in order to avoid unjust discrimination, or unlawful preference, or undue or unreasonable prejudice to the business of such town or city.

*

* * As incident to its business, a carrier, like the defendant, has a right to engage in the cartage of goods to and from its depot. It may make a reasonable charge for this service; but if it does it must charge all alike for the same service at the same depot. In the accommodation of its traffic and in the exigencies of its business it may, as a transportation expense, make no charge for such service; but if it does this it must treat all alike at that depot and must not show preference to some over others in rendering the same service. * A depot warehouse is a convenience of which it may avail itself or not as it may determine the accommodation of its traffic requires at a particular station, or it may make personal delivery of freight to every consignee of that station, or receive at his place of business freight from every shipper at that station, provided in doing so it treats all fairly and alike and makes no extortionate charge for the service rendered.

*

*

It seems that for about three months the Michigan Central Railroad Company and the Detroit, Lansing and Northern Railroad Company transported their freight to and from Grand Rapids in the same manner that it is now complained by the Michigan Central Railroad Company that it is done by the defendant. But they abandoned this about twelve months ago, for what cause is not shown; and then petitioners were procured to make this complaint by the Michigan Central Railroad Company. By this method of business at Grand Rapids no injury or prejudice is shown to have been done to the business of Ionia, and no shipper or consignee at Ionia complains of it or demands that the defendant shall do its business in this way at Ionia. This complaint is in substance and in fact the complaint of the Michigan Central Railroad Company, a rival and competitor of the defendant for the business of Grand Rapids, and the purpose of it is manifest; and this is stated in no spirit of criticism or censure, but as a fact that is deemed of some importance in the case, for it shows that it is not in fact the complaint of a shipper, but of a rival and competing line, who alone is to be benefited by a decision against the defendant.

A delivery or receipt of freight such as is here made by the defendant at Grand Rapids is made by railway carriers at other exceptional stations in the State of Michigan, and by railway carriers at exceptional stations in other States of the Union. Its origin, as a rule, is found in the fact that one carrier is unable to locate its depot otherwise than at a long distance from the business portion of a city or town, while other carriers have succeeded in establishing their depots near to or in the business portion of such city or town. The carrier whose depot is thus located at the greater distance resorts to this expensive method of transporting its traffic and equalizing its terminal facilities, as far as this may be done in this manner, with those of its competitors in transporting freight to and from that town or city, as the case may be. Ordinarily other carriers adopt the same method of doing business at such city or town by way of competition.

Actual and fair competition between carriers for transportation traffic was one of the chief objects aimed at by Congress in the enactment of the act to regulate commerce. This is apparent not only from the debates but from the section against pooling-section 5 of the act. This view of the statute has been repeatedly recognized by the Interstate Commerce Commission in its annual reports and in its decisions. Where rival carriers are engaged in active competition for the business of a common point upon their lines, and of necessity make their transportation rates the same upon freight to and from that point, it is wholly immaterial upon a question of the justice and reasonableness of such rates, or whether they comply with the law as to the long and short haul clause, that it costs one of them more than it does the other to transport the freight, or to receive or deliver it, for in every such instance that is more or less the case. In disposing of such a case the Commission would enter into no such question as that. The 2 cents per hundred pounds estimated as being expended by the defendant under the circumstances and conditions shown by the evidence in transporting freight to and from Grand Rapids is nothing more

nor less than an expenditure of that amount in the cost it incurs in the transportation of its freight. Similar instances may be found in most, if not all, of the States of the American Union, in exceptional cases. The expense

incurred in such a case is met by the transportation rate charged, and is covered by that rate. A blow that strikes down the benefits of such competition to the business of Grand Rapids, and to the business of the defendant, and which will benefit alone its rival and competing lines at Grand Rapids, without conferring any benefit whatever upon Ionia, and upon the grounds here claimed, is a result that, in my humble opinion, is not sanctioned by the act to regulate commerce. The attempt to justify it on the ground that it is the extirpation of either an old or a young abuse is not warranted by the evidence in this proceeding and the statute we are required to administer.

The circuit court directed the enforcement of the Commission's order although Judge Severens wrote a dissenting opinion, and Judge Taft, in delivering the opinion of the court referred to the admission of counsel for the complainants before the Commission that his

clients

had no real grievance, but were instigated to their prosecution by a competitor of the defendant, the Michigan Central Railway, which is paying the expenses of the litigation.

Judge Severens said, among other things, of the argument which would sustain the Commission's order:

The argument appears to me to rest upon unsubstantial grounds which have been swept away by the rulings of the Commission itself upon constructions of the law which have been acquiesced in as just and reasonable.

In overruling the circuit court and refusing to enforce the order of the Commission the circuit court of appeals left no room for doubt as to its opinion concerning the question here under consideration, which is whether the final determination of the case was in the direction of substantial justice. The concluding sentence of the opinion, written by Judge Hammond, referring to the order of the Commission, reads as follows:

In any view, therefore, either because this order was not according to the right of the case, as we understand it, or because it directed an improper mode of redressing the abuse, if any existed, the decree must be reversed, and the cause remanded to the circuit court, with directions to dismiss the petition, with costs.

Elsewhere in the opinion, which is long, exhaustive, and able, the court said:

We have come to the conclusion that, so looking at the facts and circumstances of this case, none of the sections of this act have been violated by the fact that the railroad company collects and delivers at the premises of the consignors and consignees at Grand Rapids, and does not collect and deliver at the premises of the consignors and consignees at Ionia. The two localities are widely separated in distance, and so related to the general trade with which this transportation traffic is concerned that they are not at all competitors with each other in that trade. It is found as a fact in this case that there is **but slight competition" between them, and we take it, for practical purposes, that there is none. This extra accessorial service which is rendered at Grand Rapids could not well be an undue and unreasonable advantage or preference of a rival in trade, when there is no competition in trade and such rivalry does not in fact exist.

Our law affords abundant instances of its tender regard of the established customs of the people. We think that the consequences of the deprivation to the people of Grand Rapids of this custom may be held to be one of the circumstances which may relieve a carrier from the statutory obligation of equal facilities elsewhere, to say nothing of injury to itself. There having been no such long-established custom at Ionia, and their station having been located much