sification in force when the petition was filed, sufficient grounds might exist for sustaining the complaint or a portion of it. But upon the classification of the goods in question under the changes that took effect October 18th, 1888, in force at the time of the hearing and still in force, the decision of the Commission is that the complaint is not sustained.

L. LIPPMAN & CO. v. THE ILLINOIS CENTRAL

RAILROAD COMPANY.

A railroad company is under special obligation to give reasonable rates for its local business, but there are many influences which may affect through rates while not bearing upon local rates at all, or if at all, in less degree.

Through rates are not necessarily illegal which when divided between carriers give them less than their local rates, provided that the through rate itself is not less than some one of the locals, or unjustly discrim inating against individuals or localities, or so low as to burden other business with part of the cost of the business upon which it is imposed.

BY THE COMMISSION:

The complaint in this case is in the following words: "The Illinois Central Railroad charges $1.85 per bale of cotton from this point to New Orleans, La.

"Steamboats on the Yazoo river issue bills of lading for cotton from points on the river north of here at the rate of $1.85 per bale through to New Orleans by river and rail. The railroad pays the steamboats 50 cents per bale, and pays 10 cents per bale transfer from the steamboat landing to the cars. Consequently, for cotton shipped thus via Yazoo City, she receives only $1.25 per bale, while she charges us here, for the same service, $1.85 per bale."

This is the whole of the complaint, except the formal beginning and conclusion.

It will be seen that no complaint is made that the rate from Yazoo City to New Orleans is too high, or is in any way unreasonable, considered by itself; the complaint is that it is more than is accepted by the railroad company as its division of through rates from points above Yazoo City. It is quite consistent with the complaint that the rate from Yazoo City is a fair one, and that the rates from points above are unreasonably low, made so under the stress of competition, or for other reasons. Cases of that kind are sometimes met with, especially where water competition

exists.

But, independent of any such consideration, it is well

known by all who are familiar with the influences which necessarily affect the making of rates, that local rates cannot be the measure of what the railroad company shall accept as its division of through rates. In the first place, the through rate is almost universally less, in proportion to distance, than the local rates; the carriers can afford to make it lower; if they were compelled to measure the one by the other there would be no inducement to form through lines, and shippers would be annoyed by having to deal with a succession of local roads instead of with one road acting for all. But if the through rate is less in proportion than the local, some of the carriers, if not all of them, must accept for their division of the through rate a sum less than the local rate. This is very manifest.

It is well known also, that many influences affect the making of a through rate that may not bear at all, or if at all in less degree, upon the local rates. This is especially the case when there are competitive lines reaching points for which the through rate is made or through which the transportation is to be had. Such competition may in some cases force the making of a through rate which will barely pay the cost of moving the freight.

A railroad company is under special obligation to give reasonable rates for its local business. If it does that it will not be illegal for it to accept business from other carriers on through rates which, when divided between them, will give to any one of them less for its division than its own local rates. This, however, is subject to the condition that the through rate is not in itself illegal, either because of being less than some one of the locals, or of being unjustly discriminating against individuals or localities, or so low as to burden other business with some part of the cost of the business on which it is imposed. The local shipper is not wronged by the carrier accepting through business, provided the condition above stated is observed.

This point has been touched upon in several cases heretofore decided; among others, in the Boston Chamber of Commerce v. The Lake Shore & Michigan Southern Railway Co., 1 I. C. C. Rep. 436; Detroit Board of Trade v. Grand Trunk

Railway Co., 2 I. C. C. Rep. 315; and The New Orleans Cotton Erchange v. The Cincinnati, New Orleans & Teras Pacific Railway Co., 2 I. C. C. Rep. 375.

In the present case certain geographical facts appear which stand closely related to the tariffs of the Illinois Central Railroad, as found on file in this office. A branch of that road bears to the northwest from Jackson, Mississippi, which strikes the Yazoo River at Yazoo City, distant 45 miles, and continues northerly to Parsons, 70 miles farther on, running generally some distance east of said river and touching it occasionally; one of the points of contact is Greenwood, 18 miles south of Parsons. The railroad rate on cotton to New Orleans is $2.75 from Parsons, falling to $2 at Greenwood, and remaining $2 at all stations as far south as Yazoo City, where the rate, as above stated, is $1.85.

A joint tariff on file, effective November 19, 1888, shows a through rate of $1.85 by boat and rail from the river landings between Greenwood and Yazoo City to New Orleans, divided as follows:

The case, therefore, presents an instance of grouped rates: First, all-rail, $2, grouped from Greenwood, followed by a joint tariff, boat and rail, $1.85, also grouped from Greenwood. The grouping of rates in this manner is at times. justifiable, as the Commission has often had occasion to say, and there may be reasons adequate to justify it here. In a section of country like that between Greenwood and Yazoo City, rail and water rates mutually influence each other, so that transportation by rail from Yazoo City may be worth as much to a shipper there as to a shipper at Greenwood. Without going further into the question, no reason is stated by petitioner why transportation by boat from Greenwood and intermediate landings as far south as Yazoo City may not fairly take a common rate to New Orleans; and if the boats, instead of providing water carriage to New Orleans, elect to deliver the cotton to the railroad for transportation from Yazoo City, the division of the through rate is not of

itself an evidence of injustice to local shippers at Yazoo City. It is not correct to say, as appears to be understood by complainants, that the railroad company charges local shippers $1.85, and charges the boat lines only $1.25 or $1.15 for the same service. The true situation is that a through rate is made from river landings above Yazoo City no greater than from Yazoo City itself. This of itself, without some substantial damage or injury resulting therefrom, does not constitute a contravention of the Act to regulate commerce. As has been repeatedly said by the Commission, in respect to rates constructed like those now under consideration, such a situation only becomes illegal when it can be shown that illegal results follow from it. La Crosse Manufacturers' and Jobbers' Union v. Chicago, Milwaukee & St. Paul R'y Co., 1 I. C. C. R. 631; Business Men's Ass'n of Minnesota v. Chicago, St. Paul, Minneapolis & Omaha R. R. Co., 2 I. C. C. R. 52.

As the case is presented in the petition there is nothing which calls for an investigation by the Commission, and no order of notice will be made.