other to lower the rate, no hay whatever | tion of § 4 of the Interstate Commerce Act would come from the hay-producing territory tributary to Memphis, and all the southeast Atlantic states would be compelled to rely on other portions of the west, north, [658]or northeast for hay. *“The evidence clearly shows that the rate to Charleston was forced down by this competition. But this is an advantage to all the territory tributary to Charleston, and all stations share in it. No such competition exists at Summerville, a small inland town. If it, and others like it, were permitted to share in the circumstances and conditions surrounding Charleston, and to get the benefit of the competition which Charleston enjoys, and they have not, then, ex necessitate, the South Carolina Railway will be called upon to elect between its through business and its local business, and in this election to give up the former. Thus, all stations on the line of road will pay local freight on hay, and the market, to the extent of imports from Memphis, will be destroyed. The interstate commerce law was intended to promote trade. Such a construction as is now sought would destroy competition, the life of trade." Subsequently the attention of the circuit court was called to the asserted fact that there had been a service on the defendant, as to whom it was stated, in the opinion of the court, there had been no service of process. In a memorandum opinion the court in substance said that, conceding, arguendo, the correctness of the fact called to its attention, as it would not change the result of the decision it was unnecessary to further consider it. The circuit court of appeals decided that the circuit court had mistakenly held that one of the parties essential to the cause had not been properly served, and that the circuit court had also fallen into error in deciding that the carriers in question were not, within the intendment of the commerce act, a continuous line for through transportation under a common management and control. When it came to consider the conflicting conclusions of the Commission and the circuit court as to the meaning of the 4th section of the act, the court held that the interpretation adopted by the Commission was right, and that upheld by the circuit court was wrong. In other words, the circuit court of appeals decided that no competition existing at the place of delivery, however far reaching or arising at the initial point from the [659]action of other carriers who were subject to the control of the act, could justify a carrier in making a greater charge for a shorter than for a longer haul, although such competitive conditions might empower the Commission, on application of the carrier, to grant the right to make such charge. The reasons which impelled the circuit court of appeals to the conclusion by it reached are very clearly stated in its opinion, from which a member of the court (Morris, District Judge) dissented. The court said (42 U. S. App. 594, 83 Fed. Rep. 905, 28 C. C. A. 236): "The decisions of the Interstate Commerce Commission concerning the proper construc have not been uniformly sustained by the "We adopt the conclusion heretofore Approaching, then, a solution of the ques ment at bar. They may be assumed, there- tions which arise from the report of the Commission and the decisions below rendered, which substantially also embrace the essential matters covered by the assignments of error and the material issues which were urged in the argument at bar, it appears that the propositions involved are threefold. 1st. The conceded facts from which it was First. Was it correctly decided that the deduced as a matter of law that the carriers carriers as the result of the arrangements were operating "under a common control, between them constituted, within the pur- management, or arrangement for a continuview of the 1st section of the Act to Regu-ous carriage or shipment" were as follows: late Commerce, a continuous line, so far at The several carriers transported hay from least as regards the shipments between Memphis under through bills of lading, by Memphis, Summerville, and Charleston? continuous carriage, to Summerville and Second. Was it correctly held by the Com-Charleston. The several roads shared in an mission and decided by the circuit court of agreed rate on traffic to Charleston and in a appeals, that under the 4th section of the act precisely equal in amount rate on craffic to no competition, however material, unless it Summerville. On shipments to Summerarose from certain enumerated sources or ville, however, there was added to the was of the inherent character stated by the Charleston rate the amount of the local rate [661]* Commission and the circuit court of appeals, from Charleston to Summerville, the benefit could create such dissimilarity of circum- of which additional exaction was solely re stance and condition as would authorize the ceived by the local road on which Summercarrier, of his own motion, to charge a greater ville was situated. The contenton that rate for a lesser than for a longer distance? under this state of facts the carriers did not The provisions of the 4th section which are constitute a continuous line, bringing them involved in the second proposition are as within the control of the Act to Regulate follows: Commerce, is no longer open to controversy in this court. In Cincinnati, N. O. & T. P. R. Co. v. Interstate Commerce Commission, 162 U. S. 184, 40 L. ed. 935, 5 Inters. Com. Rep. 391, 16 Sup. Ct. Rep. 700, decided since the case in hand was before the Commission and the circuit court, it was held under a state of fact substantially similar to that here found, that the carriers were thereby subject to the Act to Regulate Commerce. "§ 4. That it shall be unlawful for any traffic, and Charleston *would be also cut off[663] The construction of the 4th section of the Act to Regulate Commerce and the question whether competition which materially oper ated on traffic and rates was a proper subject to be considered by a carrier in charging a greater rate for the shorter than was asked for the longer distance, on account of the dissimilarity of circumstance and conThe first two of the foregoing questions in dition produced by such competition, has effect solely involve propositions of law, for, recently, after elaborate argument and great although the essential predicate upon which consideration, been passed upon by this they rest takes into consideration certain court. In Texas & P. R. Co. v. Interstate facts, they were not disputed below, and Commerce Commission, 162 U. S. 197, 40 L. [662]their existence was not denied in the argu-ed. 940, 5 Inters. Com. Rep. 405, 16 Sup. Ct. Rep. 666, the facts as stated by the court | Orleans in any event. That the result of After stating that the foregoing facts were fully established by the proof and in effect conceded, and after remarking (p. 207, L. ed. p. 943, Inters. Com. Rep. p. 413, Sup. Ct. Rep. p. 670) that they "would seem to constitute 'circumstances and conditions' worthy of consideration, when carriers are charged with_being_guilty of unjust discrimination or of giving unreasonable and undue preference or advantage to any person or local. ity," the court observed (p. 217, L. ed. p. 947, Inters. Com. Rep. pp. 422, 423, Sup. Ct. Rep. p. 674): which are pertinent to the legal question now the order would be to injuriously affect the under consideration were briefly as follows defendant company in the carriage of arti (pp. 196-200, L. ed. pp. 940, 941, Inters. Com.cles of foreign imports to Memphis, St. LouRep. pp. 406, 107, Sup. Ct. Rep. p. 668): is, Kansas City, and other Missouri river The Interstate Commerce Commission en-points." tered an order directing the railway to "forthwith cease and desist from carrying any article of imported traffic shipped from any foreign port through any port of entry of the United States, or any port of entry in a foreign country adjacent to the United States, upon through bills of lading destined to any place within the United States, at any other than upon the inland tariff covering other freight from such port of entry to such place of destination, or at any other than the same rates established in such inland tariff for the carriage of other like kind of freight, in the elements of bulk, weight, "The Commission justified its action whol value, and expense of carriage." The rail-ly upon the construction put by it on the Act way company refused to obey the order, and to Regulate Commerce, as forbidding the a proceeding was initiated by complaint Commission to consider the 'circumstances filed in the circuit court to compel it to do and conditions' attendant upon the foreign The substance of the answer of the rail- traffic as such circumstances *and conditions [665] road, so far as material to the matter now as they are directed in the act to consider. under review, was thus recited by the court | The Commission thought it was constrained (pp. 205, 206, L. ed. pp. 942, 943, Inters. by the act to regard foreign and domestic Com. Rep. p. 412, Sup. Ct. Rep. 670): traffic as like kinds of traffic under substan"The answer of the Texas & Pacific Rail- tially similar circumstances and conditions, way Company to the petition of the New and that the action of the defendant comYork Board of Trade & Transportation be-pany in procuring through traffic that would, fore the Interstate Commerce Commission, except for the through rates, not reach the and the answer of said company to the pe-port of New Orleans, and in taking its pro tition of the Commission filed in the circuit rata share of such rates, was an act of 'uncourt, allege that rates for the transporta- just discrimination,' within the meaning of tion of commodities from Liverpool and Lon- the act. don, England, to San Francisco, California, are in effect fixed and controlled by the competition of sailing vessels for the entire disLater, in recurring to the subject of com[664]tance; *by steamships and sailing vessels in petition as creating dissimilarity of circumconnection with railroads across the isth-stance and condition, the court said (p. mus of Panama; by steamships and sailing 233, L. ed. p. 952, Inters. Com. Rep. p. 437, vessels from Europe to New Orleans, con- Sup. Ct. Rep. pp. 680, 681): necting these under through arrangements "That among the circumstances and conwith the Southern Pacific Company to San ditions to be considered, as well in the case Francisco. That, unless the defendant com- of traffic originating in foreign ports as in pany charges substantially the rates speci- the case of traffic originating within the lim fied in its answer, it would be prevented, by its of the United States, competition that reason of the competition aforesaid, from en- affects rates should be considered, and in degaging in the carrying and transportation of property and import traffic from Liver- ciding whether rates and charges made at a pool and London to San Francisco, and low rate to secure foreign freights which would lose the revenue derived by it there-routes are or are not undue and unjust, the would otherwise go by other competitive from, which is considerable, and important fair interests of the carrier companies and and valuable to said company. That the rates charged by it are not to the prejudice or disadvantage of New Orleans, and work no injury to that community, because, if said company is prevented from participating in said traffic, such traffic would move via the other routes and lines aforesaid without benefit to New Orleans, but, on the contrary, to its disadvantage. That the foreign or import traffic is upon orders by persons, firms, and corporations in San Francisco and vicinity buying direct of first hands in London, Liverpool, and other European markets; and if the order of the Commission should be carried into effect it would not result in discontinuance of that practice or in inducing them to buy in New "In so construing the act we think the Commission erred." the welfare of the community which is to receive and consume the commodities are to be considered." In Interstate Commerce Commission v. Alabama Midland R. Co. 168 U. S. 144,42 L. ed. 414, 18 Sup. Ct. Rep. 45, the controversy was this: A proceeding was commenced to compel a carrier to obey an order of the Commission forbidding the charge of a lesser rate for transportation to Montgomery, the longer distance, than was charged to Troy on the same line, the shorter distance. The nature of the competition relied on by the carriers is fully shown by a statement in the opinion, referring to one of the assignments of error made in the cause. The court said (Id. p. 162, L. ed. p. 421, Sup. Ct. Rep. | the existence of rival lines of transportation, p. 47): and consequently, of competition for the "Errors are likewise assigned to the ac- traffic, are not facts to be considered tion of the court in having failed and re- when determining whether property transfused to affirm and enforce the report and ported over the same line is carried 'under opinion of the Commission, wherein it was substantially similar circumstances and confound and decided, among other things, that ditions' as that phrase is found in the 4th the defendants, common carriers which par- section of the act." The court then examticipate in the transportation of class goods ined this question, and after citing from an [666] to Troy *from Louisville, St. Louis, and Cin- opinion of Judge Cooley in the matter of cinnati, and from New York, Baltimore, and Re Southern R. & S. S. Asso. 1 Inters. Com. other northeastern points, and the defend- Rep. 278, 287, sub nom. Re Louisville & N. R. ants, common carriers which participate in Co. 1 I. C. C. Rep. 31, 78, said (p. 164, L. ed. the transportation of phosphate rock from p. 422, Sup. Ct. Rep. p. 48): South Carolina and Florida to Troy, and the "That competition is one of the most obdefendants, common carriers which partici-vious and effective circumstances that make pate in the transportation of cotton from the conditions, under which a long and short Troy to the ports of New Orleans, Bruns-haul is performed, substantially dissimilar, wick, Savannah, Charleston, West Point, and as such must have been in the contemor Norfolk, as local shipments or for export, plation of Congress in the passage of the Act have made greater charges, under substan- to Regulate Commerce, has been held by It is sufficient tially similar circumstances and conditions, many of the circuit courts. for the shorter distance to or from Troy to cite a few of the number: Ex parte than for longer distances over the same lines Koehler, 31 Fed. Rep. 315, 1 Inters. Com. in the same direction, and have unjustly dis- Rep. 317; Missouri P. R. Co. v. Texas & P. criminated in rates against Troy, and sub- R. Co. 31 Fed. Rep. 862, 4 Inters. Com. Rep. jected said place and dealers and shippers 434; Interstate Commerce Commission v. therein to undue and unreasonable prejudice Atchison, T. & S. F. R. Co. 50 Fed. Rep. 295, and disadvantage in favor of Montgomery, 4 Inters. Com. Rep. 323; Interstate ComEufaula, Columbus, and other places and lo-merce Commission v. Cincinnati, N. O. & T. calities and dealers and shippers therein, P. R. Co. 56 Fed. Rep. 925, 943, 4 Inters. in violation of the provisions of the Act to Com. Rep. 332; Behlmer v. Louisville & N. Regulate Commerce." R. Co. 71 Fed. Rep. 835; Interstate Commerce Commission v. Louisville & N. R. Co. It will thus be observed that the facts pre-73 Fed. Rep. 409." sented were, in legal effect, the equivalent of those arising on this record. The competition which the carrier asserted had created such dissimilarity of circumstance and condition as justified, on its own motion, the lesser charge for the longer than was made for the shorter distance, was competition not only arising by water transportation, but alleged to spring from common carriers who were confessedly subject to the control of the Act to Regulate Commerce. The error which it was asserted the record contained was that such competition had been held, by the lower courts, sufficient to create dissimilar circumstances and conditions, and that the right of the carrier to avail himself of such dissimilarity without the previous assent of the Commission had been also sustained. This court said (pp. 162, 163, L. ed. p. 421, Sup. Ct. Rep. p. 47): It is to be remarked that among the cases approvingly cited in the passage just quoted will be found the opinion of the circuit court ion was opposed to the construction of the in the very case now before us, which opinlaw taken by the Commission and to that announced by the circuit court of appeals in this cause. Referring to the claim that under a correct interpretation of the proviso of the 4th section carriers were not allowed to avail themselves of dissimilar *circum-[668] stances and conditions, arising from competition, without the previous assent of the Commission, the court again cited from an opinion of the Interstate Commerce Commission delivered by Judge Cooley, as follows (pp. 168, 169, L. ed. pp. 423, 424, Sup. Ct. Rep. pp. 49, 50): "That which the act does not declare unlawful must remain lawful if it was so be "Whether competition between lines of transportation to Montgomery, Eufaula, and fore, and that which it fails to forbid the Columbus justifies the giving to those cities carrier is left at liberty to do, without permission of anyone. The charging a preference or advantage in rates over Troy, and, if so, whether such a state of facts jusor receiving the greater compensation for tifies a departure from equality of rates the shorter than for the longer haul is seen without authority from the Interstate Com- to be forbidden only when both are under merce Commission under the proviso of the substantially similar circumstances and con0714th section "of the act, are questions of con- ditions; and, therefore, if in any case the struction of the statute, and are to be deter-carrier, without first obtaining an order of mined before we reach the question of fact relief, shall depart from the general rule, its in this case." doing so will not alone convict it of illegalProceeding to the question of law, the con-ity, since, if the circumstances and condistruction of the fourth section, which was tions of the two hauls are dissimilar, the involved in supporting the interpretation of statute is not violated. Beyond the Commission, it was stated, as follows: question, the carrier must judge for itself "It is contended in the brief filed on behalf what are the 'substantially similar circumof the Interstate Commerce Commission that stances and conditions' which preclude the special rate, rebate, or drawback, which is, made unlawful by the 2d section, since no tribunal is empowered to judge for it until after the carrier has acted, and then only for the purpose of determining whether its action constitutes a violation of law. The earrier judges on peril of the consequences; but the special rate, rebate, or drawback which it grants is not illegal when it turns out that the circumstances and conditions were not such as to forbid it; and as Congress clearly intended this, it must also, when using the same words in the 4th section, have intended that the carrier, whose privilege was in the same way limited by them, should in the same way act upon its judgment of the limiting circumstances and conditions." And the approval of the construction given to the act in the passage from the opinion of Judge Cooley was not left to implication, since the court added (p. 169, L. ed. p. 424, Sup. Ct. Rep. p. 50): The view thus expressed has been adopted in several of the circuit courts (Interstate Commerce Commission v. Atchison, T. & S. F. R. Co. 50 Fed. Rep. 295, 300, 4 Inters. Com. Rep. 323; Interstate Commerce Commission v. Cincinnati, N. O. & T. P. R. Co. 56 Fed. Rep. 925, 943, 4 Inters. Com. Rep. 332; Behlmer v. Louisville & N. R. Co. 71 [469]Fed. Rep. 835, 839); and we do not think the courts below erred in following it in the present case. We are unable to suppose that Congress intended, by the 4th section and the proviso thereto, to forbid common carriers, in cases where the circumstances and conditions are substantially dissimilar, from making different rates until and unless the Commission shall authorize them so to do." subsequently to the decision in this case by it is argued that it was correctly decided be low that substantial and material competition resulting from conditions existing at the point of delivery (such aз accessibility of that place to other lines of transportation from other places by rail or water, or both, was, as a matter of law, correctly decided below to be without legal efficacy in producing dissimilarity of circumstances and con Before determining the final question we notice certain contentions pressed in argument, whereby it is asserted that there is such a difference between the legal issues here arising and those which were presented in the cases referred to that this case should not be controlled by them. In any event, it is argued, the action of the Commission and the circuit court of appeals in this controversy was of such a nature as to render the previous rulings of this court inapposite, and hence it is unnecessary to apply them. Whilst it is not denied as regards competition arising from other carriers at the place of origin of the traffic, who were subject to the control of the Act to Regulate Commerce, that the decision here under review is not in accord with the rulings of this court, such it is claimed is not the case as It is then settled that the construction to competition not originating at the ingiven in this cause by the Interstate Com-itial point of carriage. From this premise merce Commission and the circuit court of appeals to the 4th section of the Act to Regulate Commerce was erroneous, and hence that both the Interstate Commerce Commission and the circuit court of appeals mistakenly considered, as a matter of law, that competition, however material, arising from carriers who were subject to the Act to Regulate Commerce could not be taken into consideration, and likewise that all competi-ditions. In this regard, then, the decree tion, however substantial, not originating at the initial point of the traffic, was equally, as a matter of law, excluded from view. It follows that the decree of the circuit court must be reversed unless it be the duty of this court to examine the evidence, which was not passed on by the Commission or the circuit court of appeals, for the purpose of ascertaining whether the competition relied on was so substantial and so controlling on traffic and rates as to cause it to produce a dissimilarity of circumstance and condition within the meaning of the 4th section of the act. A consideration of this subject leads to a solution of the third question which we have previously stated was involved in the cause. In passing, however, it is well to say that both the opinions of this court, just referred to, were announced below, it is insisted, was correct. But the |