Sec. 567. Requiring prepayment of freight by connecting carrier is not unjust discrimination.-At common law a railroad corporation has the right to require the prepayment of freight charges by all its customers or some of them, as it may think best. It has the same right as any other individual or corporation to exact payment for a service before. it is rendered, or to extend credit. This common-law right of requiring payment in advance of some customers and of extending credit to others, has not been taken away by the Interstate Commerce Act, nor does an interstate carrier subject another to an unreasonable or undue disadvantage because it exacts of that carrier the prepayment of freight on all property received by it at a given station, while it does. not require charges to be paid in advance on freight received from other individuals and corporations at such station. 43 Sec. 568. Duty to afford equal facilities for interchange of traffic. The Interstate Commerce Law does not require an interstate carrier to treat all other carriers in precisely the same manner without reference to its own interests. Some play is given in the act to self-interest, and the clause which requires carriers "to afford all reasonable, proper and equal facilities for the interchange of traffic" does not require that such "equal facilities" shall be afforded under dissimilar circumstances and conditions. Moreover the direction "to afford equal facilities for an interchange of traffic" is controlled and limited by the proviso that the clause "shall not be construed as requiring a carrier to give the use of its tracks or terminal facilities to another carrier. "44 Thus it len v. R. & Nav. Co., 98 Fed. 16, affirming 51 Fed. 465; Railway 8. c. 106 Fed. 265. Co. v. Miami Steamship Co., 86 Fed. 407, 30 C. C. A. 142. 43. Little Rock & M. R. Co. v. St. Louis S. W. Ry. Co., 63 Fed. 775, 11 C. C. A. 417, 27 U. S. App. 380, 26 L. R. A. 192, affirming 59 Fed. 400; Oregon Short Line, etc. Ry. Co. v. Railroad, 61 Fed. 158, 9 C. C. A. 409, 15 U. S. App. 479, 44. Little Rock & M. R. Co. v. St. Louis S. W. Ry. Co., 63 Fed. 775, 11 C. C. A. 417, 27 U. S. App. 380, 26 L. R. A. 192, affirming 59 Fed. 400; Kentucky & I. Bridge Co. v. Louisville & N. R. Co., 37 has been held that the third section of the Interstate Commerce Act does not require an interstate carrier to receive freight in the cars in which it is tendered by a connecting carrier, and to transport it in such cars, paying a mileage rate thereon, when it has cars of its own that are available for the service and the freight will not be injured by transfer.45 So a railroad is under no obligation to build up a rival's business by giving its rival the same facilities enjoyed by a branch of its own and operated by it, nor does the Interstate Commerce Act forbid its preferring a road with through facilities to one with only local facilities, a road that goes all the way to one going only part of the way. 46 But if the defendant company is a separate independent company from the favored one, owning no stock therein, neither having built, bought nor leased it, it, conducted its business, nor received its earnings, a mere contract between the two companies for the interchange of traffic will not have the effect to make one line an extension of the other, nor relieve the defendant company from fulfilling its obligations to roads which connect physically with itself. In order to be otherwise, the union of the combined lines must. be of such a character that one has practically become the property of the other.47 The question of the existence of discrimination and of an actionable refusal of equal facilities is to be ascertained by applying all the considerations of equity affecting the case, and should be found to exist only when such facilities can be afforded "under substantially similar circumstances and conditions," but there is nothing in the act which makes mere distance between connecting neints, whether a furlong, a mile, or ten, or twenty, controlling of that question. 48 Fed. 571; Oregon Short Line, etc. 45. Oregon Short Line, etc. Ry. Co. v. Northern Pac. R. Co., 51 Fed. 465, 474. 46. Little Rock & M. R. Co. v. East Tennessee. V. & G. R. Co., 47 Fed. 771, appeal dismissed, 15) U. S. 698. 47. New York & N. Ry. Co. t. New York & N. E. R. Co., 50 Fed. 867. 48. New York & N. Ry. Co. v. New York & N. E. R. Co., supra. A transportation company engaged in interstate carriage of property partly by railroad and partly by water is not obliged to allow the boats of a competitor to land at its wharf. A railroad company cannot combine with its proper business a business not cognate to it and discriminate in favor of itself, but this principle does not extend to boats owned by a railroad as part of a continuous line.49 Sec. 569. Question of similarity or dissimilarity of circumstances under section four is one of fact.-As the fourth section of the Act, which forbids the charging or receiving greater compensation in the aggregate for the transportation of like kinds of property for a shorter than for a longer distance over the same line, under substantially similar circumstances and conditions, does not define or describe in what the similarity or dissimilarity of circumstances shall consist, the question as to whether the circumstances and conditions of the carriage have been substantially similar, or otherwise, is a question of fact depending on the matters proved in each case.50 In deciding what circumstances and conditions may be proved in each case, however, the Supreme Court of the United States has practically eliminated the fourth section from the Act. Sec. 570. Real and substantial competition a factor under section four. It has been decided by the Supreme Court of the United States that all competition, provided it possesses the attribute of producing a substantial and material effect upon traffic and rate making, is proper, under the statute, to be taken into consideration. Especially is this true where the 49. Ilwaco Ry. & Nav. Co. v. Oregon Short Line & U. N. Ry. Co., 57 Fed. 673, 6 C. C. A. 495, 15 U. S. App. 173. 50. Interstate Commerce Commission v. Alabama Midland Ry. Co., 168 U. S. 144, 18 Sup. Ct. R. 45, 42 L. Ed. 414, affirming 74 Fed. 715, 21 C. C. A. 51, 41 U. S. App. 453 and 69 Fed. 227. The commission, therefore, has no power to declare that the rate for a shorter distance shall not exceed three-fourths of the rate for a longer distance over the same road, thereby assuming to establish a rate by relation. Southern Pacific Co. v. Colorado Fuel & Iron Co., 101 Fed. 779, 42 C. C. A. 12. competitor is a carrier by water, because that is the cheapest known kind of transportation, and is unrestricted by law. But the same rule is also true where the competition is wholly between carriers who are subject to the Act. And where competition exists, a carrier subject to the Act has a right of his own motion to take it into view in fixing rates to the competitive point. If the rates charged by a railroad to a particular point, therefore, are not unreasonable in themselves, the fact that lower rates are charged for a longer haul to other points does not create an unjust discrimination against such point, in violation of the Interstate Commerce Act, where such lower rates are due to active legitimate competition.2 Sec. 571. "Basing Point System" is not illegal under section four. It having been established that competition af 1. Interstate Commerce Commission v. Louisville & N. R. Co., 190 U. S. 273, 23 Sup. Ct. R. 687, 47 L. Ed. 1047, affirming 108 Fed. 988, 46 C. C. A. 685, reversing 102 Fed. 709 and 101 Fed. 146; Interstate Commerce Commission v. Clyde Steamship Co., 181 U. S. 29, 21 Sup. Ct. R. 512, 45 L. Ed. 729, modifying Interstate Commerce Commission v. Western & A. R. Co., 93 Fed. 83, 35 C. C. A. 217, and 88 Fed. 186; East Tennessee, Virginia & Georgia Railway Co. v. Interstate Commerce Commission, 181 U. S. 1, 45 L. Ed. 719, 22 Sup. Ct. R. 516, reversing 99 Fed. 52, 39 C. C. A. 413 and Interstate Commerce Commission v. East Tennessee, etc. Ry. Co., 85 Fed. 107; Railroad Co. v. Behlmer, 175 U. S. 648, 20 Sup. Ct. 209, 44 L. Ed. 309, reversing Behlmer Railroad, 83 Fed. 898, 28 C. C. A. 229, 42 U. S. App. 581, and modifying Id., 71 Fed. 835; Interstate Commerce Commission v. Ala v. bama Midland Ry. Co., 168 U. S. 144, 18 Sup. Ct. R. 45, 42 L. Ed. 414, affirming 21 C. C. A. 51, 74 Fed. 715, 41 U. S. App. 453 and Id. 69 Fed. 227; Texas & Pacific Ry. Co. v. Interstate Commerce Commission, 162 U. S. 197, 16 Sup. Ct. R. 666, 40 L. Ed. 940, reversing Interstate Commerce Commission v. Texas & Pacific Ry. Co., 57 Fed. 948, 6 C. C. A. 653, 20 U. S. App. 6 and Id., 52 Fed. 187; Interstate Commerce Commission v. Southern Ry. Co., 122 Fed. 800, 60 C. C. A. 540, affirming 117 Fed. 741; Interstate Commerce Commission v. Southern Ry. Co., 105 Fed. 703; Brewer v. Railway Co., 84 Fed. 258; Interstate Commerce Commission v. Atchison, T. & S. F. R. Co., 50 Fed. 295, appealed dismissed 81 Fed. 1005, 29 U. S. App. 746, 26 C. C. A. 685. 2. Interstate Commerce Commission v. Southern Ry. Co., 122 Fed. 800, 60 C. C. A. 540, affirming 117 Fed. 741; Brewer v. Railway, fecting rates existing at a particular competitive point produces the dissimilarity of circumstances and conditions contemplated by the fourth section of the act, it inevitably follows that the railway companies have a right to take the lower rate prevailing at that competitive point as a basis for the charge made to non-competitive places in territory contiguous to the competitive point, and to ask in addition to the low competitive rate the local rate from the competitive point to such non-competitive places, provided thereby no increased charges result over those which would have been occasioned if the low rate to the competitive point had been left out of view.3 This result practically eliminates the fourth section, at least so far as territory immediately contiguous to the competitive points is concerned. The Court of Appeals of Kentucky, and rightly, in construing a clause in its state statute similar to the fourth section of the Interstate Commerce Act refused to follow the Supreme Court of the United States and criticised the above rule sharply.4 Sec. 572. Competition must not be conjectural.-A nearer but non-competitive point is not entitled to the same rate as a competitive point farther away on the same line merely because a combination of carriers might, if they chose, bring about competition at the non-competitive point equivalent to the competition existing at the competitive point. The substantial dissimilarity of circumstances and conditions provided by the Act must depend upon a real and substantial competition at a particular point affecting rates, not upon the mere possibility of the arising of such competition. To hold otherwise would be to destroy the whole effect of the Act and cause every case where competition was involved to depend, not upon the fact of its existence as affecting 84 Fed. 258; Interstate Commerce Commission v. Atchison T. & S. F. R. Co., 50 Fed. 295, appeal dismissed, 81 Fed. 1005, 29 U. S. App. 746, 26 C. C. A. 685. 3. Interstate Commerce Commission v. Louisville & N. R. Co., 190 U. S. 273, 23 Sup. Ct. R. 687, 47 L. Ed. 1047, affirming 108 Fed. 988, 46 C. C. A. 685, reversing 102 Fed. 709 and 101 Fed. 146. 4. Louisville & N. R. Co. 9. Commonwealth, 106 Ky. 633, 51 S. W. Rep. 164, 21 Ky. L. Rep. 232, 90 Am. St. Rep. 236. |