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TRANSPORTATION THROUGH DIFFERENT STATES WHICII BEGINS AND ENDS IN TIIE

SAME STATE.

In the same proceeding the milk case) a road commencing in New York and engaged in transportation to New York City, but running for the most part through the State of New Jersey, claimed that the transportation by it of milk from points in New York to New York City was not subject to the act to regulate commerce. The Commission held in 1888 that all transportation not wholly within one State is subjected to regulation by provisions in the act to regulate commerce (New Orleans Cotton Exchange Case, 2 I. C. C. Rep., 375); but the carrier cited a later decision of the United States Supreme Court in Lehigh Valley R. Co. v. Pennsylvania (145 U. S., 194). That case, however, related wholly to a question of taxation by the State on receipts which arose from service over the Lehigh Valley mileage within Pennsyl. vania, in relation to traffic between points in that State carried through New Jersey. If the State of Pennsylvania had attempted to regulate the aggregate charge or charges made for the entire transportation through different States the court would have had an entirely different case to consider; and attention was called in that court decision to the fact that the case was one of taxation, and not one of direct regulation, as was involved in Pacific Coast Steamship Company v. The California Railroad Commission (9 Sawyer, 253).

In the latter case, where the California Commission sought to regulato commerce between ports of that State when carried by a line of vessels navigating the Pacific Ocean more than a marine league from the shore, Mr. Justice Field, sitting as circuit justice, said:

To bring the transportation within the control of the State, as part of its domestic commerce, the subject transported must be within the entiro voyage under the exclusive jurisdiction of the State.

That decision seems to have been rendered entirely upon the commerce clause in the Constitution, and if the steamship or vessel plying between California ports was, while on the ocean, engaged in commerce with foreign nations, then a railroad company in carrying between points in the same State by a route which passes through another State is as clearly engaged in commerce among the States while operating in the second State. The case of the Covington Bridge (154 U. S., 204) and the Import Rate Case (162 U. S., 197) were also considered by the Commission upon this question of jurisdiction. The Commission held that the State of New York is without power to authorize the construction of a route from a point in that State through the State of New Jersey to New York City, or to control the operation of such a route, or to regulate charges made thereover, and that the railroad company is as much subject to regulation under the act to regulate commerce in respect of that portion of its milk business from New York points which it carries through New Jersey and delivers in New York City as it is in regard to other interstate transportation in which it is engaged.

REASONABLE PASSENGER FARES.

The Railroad Commission of Missouri having complained that a pas. senger fare of 10 cents per mile for 184 miles, charged by the Eureka Springs Railway Company between Eureka Springs, Ark., and Seligman, Mo., was unreasonable and unjust, it appeared that for 104 miles the railway is in the State of Arkansas and that the other 8 miles of its line is in Missouri; that by statutes of the two States the railway may charge not' to exceed 5 cents a mile in Arkansas and not more than 4 cents a mile in Missouri. On the basis of these State rates the aggregate charge between Eureka Springs and Seligman would be 821 cents, and, as stated in the opinion, ordinarily the whole charge should not be more than all its parts. Eureka Springs is a health resort, mostly frequented as such during the spring and summer. Seligman is the only station on the road in Missouri; Gaskins, a flag station, and The Narrows, a place visited for fishing and other outing sports, are the only other stations, and the great bulk of the passenger traffic is between Eureka Springs and Seligman. The defendant, in support of the reasonableness of its charges, urged insufficient income from its passenger service and insisted that any reduction of its rate for carrying passengers would result in insolvency.

In the apportionment of earnings and expenses between passenger and freight traffic the defendant credited a much larger part of its earnings to freight than to passenger traffic, while it charged to the passenger traffic much the larger part of the expenses. Any apportionment of the net earnings derived from these sources is largely an estimate. It appeared also that, on the basis of the actual cost of the road, the income of the company was more than sufficient for a fair return on the investment, though on the basis of the face value of bonds and stock issued the earnings were not equal to such return. It did appear, however, that there had been a falling off or decline in the annual earnings of the company. The Commission found the existing rate of $1.85 unlawful, and held that to be lawful the passenger rate between Eureka Springs and Seligman should not exceed $1.20, or 61 cents per mile. The carrier reduced its passenger rate as required by the order. This decision was also rendered and complied with prior to the ruling of the Supreme Court, in May last, that the statute confers no power upon the Commission to prescribe maximum rates.

LOWER RATES ON FREIGIIT BETWEEN TIIE SAME POINTS WIIEN FORWARDED BY

WAGON FROM THE RAILWAY TERMINAL.

Another case involved freight rates over the Eureka Springs Railway and the St. Louis and San Francisco Railway between points in Missouri and points in Arkansas. The Eureka Springs and St. Louis and San Francisco Railway Companies had formed a line of transportation and established joint rates and charges over it between St. Louis and Springfield, Mo., and Eureka Springs, Ark., the southern terminus

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of the line and the end of the track or road of the Eureka Springs Railway Company, and by arrangement between them and the Harrison Transportation Company they attempted to extend their lino beyond Eureka Springs to Harrison, Berryville, and other points in Arkansas not reached by the line of railway. The transportation between Eureka Springs, Harrison, Berryville, and such other points in Arkansas was conducted or effected by teams nominally under the supervision of the transportation company. For transportation of freight consigned to Eureka Springs the railway companies charged considerably more, and on the higher classes from 25 to 60 per cent more, than they did for carrying freight to Eureka Springs to be forwarded by wagon to Harrison and other points beyond Eureka Springs. These unequal transportation charges to Eureka Springs were for equal distances over the same line.

The Commission held that the provisions of the act to regulate commerce do not apply to transportation by team or wagon, and that neither the joint tariffs nor the arrangement of defendants with the Harrison Transportation Company made them joint carriers with the transportation company, nor carriers at all beyond Eureka Springs. The fact that traffic was hauled from Eureka Springs by wagon did not constitute substantially dissimilar circumstances and conditions in the transportation of such traffic to that point by the defendants within the meaning of the second section of the act. In collecting more from complainants and others for carrying goods to Eureka Springs, not to be forwarded, than they accepted for carrying goods of the same classes from the same places to Eureka Springs to be forwarded to points in the so-called Harrison transportation district, the carriers were guilty of unjust discrimination; and in denying to complainants and other shippers of articles to Eureka Springs, for use there or for distribution from that place, the same transportation charges which they accorded to shippers and receivers of like articles there to be forwarded to Harrison and other places for distribution, the carriers violated the provision against undue preference and unreasonable disadvantage.

REASONABLE FREIGIIT RATES BETWEEN POINTS IN MISSOURI AND A POINT IN

ARKANSAS.

It was also alleged in this case that the freight rates from St. Louis and Springfield, and also from Seligman, Mo., to Eureka Springs, were unreasonable and unjust, and the Commission so found. It appeared that the current annual earnings of the defendants were not equal to the average for the past several years. If they had been, the Commission said, we would not hesitate to declare any rate between Eureka Springs and St. Louis or Springfield in excess of the rates so long and still conceded to shippers to or from the Harrison district unreasonable and unlawful; but in view of the temporary insufficient earnings, “we do not feel justified in declaring the Eureka Springs rates excessive

H. Doc. 157-48

to the full extent of the discriminations so long made by the carriers against the complainants and other shippers and receivers of goods at that place.” Under the circumstances, it was believed that only a moderate present reduction should be made.

POWER AND DUTY OF THE COMMISSION AS TO UNREASONABLE RATES SINCE DECI

SION OF THE SUPREME COURT IN THE FREIGHT BUREAU CASES.

The above-mentioned case, involving the reasonableness of freight rates on the Eureka Springs Railway, was decided on August 21, after the decision of the Supreme Court in “The Freight Bureau Cases." The report of the Commission in this case concludes with the following statement:

While thus deciding that under the interstate commerce act power to prescribe rates which shall control in the future has in no caso been given to the Commission, it is conceded that the act has given the Commission power “to determine what, in reference to the past, was reasonable and just, whether as maximum or minimum or absolute” rates. How this power to say what was reasonable and just in the past will benefit the public, correct any abuse, be of any advantage or afford any relief to shippers, who are made to pay whatever unreasonable rates and charges the carriers may in the future establish or continue to exact, is a matter about which the court gives no information. In the case first above cited (162 U. S., 184), the court said: “The reasonableness of the rate iu a given case depends on the facts, and the function of the Commission is to consider the facts and give them their proper weight.” What is their proper weight which ean be given them as to the past? For what purpose is tho Commission to consider them? How can the fact that the rates were unreasonable and unjust in the past be given or have any weight, while like unreasonable and unjust rates are, and may continue to be, exacted in the future? In this case (162 U. S., 184), the court adopted the view of the late Justice Jackson, that, “subject to the two leading prohibitions that their charges shall not bo unjust or unreasonable, and that they shall not unjustly discriminate so as to give undue preference or advantago or subject to undue prejudice or disadvantage persons or traffic similarly circumstanced, the act to regulate commerce leaves common carriers as they were at common law.”

We aro hero advised that the act to regulate commerce subjected common carriers to two leading prohibitions to which they were not subject at common law, one of which is that their charges shall not be unjust or unreasonable. Until the court decided to the contrary in the Freight Bureau Cases, it was believed that this prohibition meant that the charges of common carriers shall not be unreasonable and unjust in the future or after the time tho act was passed. In these later cases the court says: “The fact that the carrier is given the power to establish in the first instance, and tho right to chango and the conditions of such change specified, is irresistible evidence that this action on the part of the carrier is not subordinate to and dependent upon the judgment of the Commission.” But it is nowhere decided or claimed that under the interstate commerce or other act tho right of the carrier to establish and to change its rates is subordinate to or dependent upon the judgment or action of any other tribunal; and, freed from the judgment and made independent of the Commission, interstate carriers are not subject to any provision of law requiring their rates and charges to be just or reasonable.

The first section of the act to regulate commerce provides that all charges made for any transportation service "shall bo reasonable and just; and every unjust and unreasonablo charge for such service is prohibited and declared to be unlawful.” Under tho decision of the Supremo Court no charge for such service is prohibited. Reasonable and just rates are contemplated, not required.

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Under the law so construed the Commission has power to say what in respect to the past was unreasonable and unjust; but as to rates complained of as unreasonable, unjust, and unlawful, and so found to be in the case under consideration, the Commission can make no provision or order for their reduction which the courts are required to enforce or the carriers are obliged to obey. Having, in the light of these decisions, given the facts due consideration, we ascertained, found, and reported the rates which would be reasonable from and to St. Louis, Springfield, and Seligman, Mo., to and from Eureka Springs, Ark., and have recommended that the carriers reduce and conform their charges to the facts so found and reported. This recommendation may impress the carriers only as may seem to accord with their own nterests, since, in the present state of the law as declared by the court, common carriers have the power to establish, change, and exact rates independent of the judgment of the Commission.

The court concedes to the Commission power under the Interstate Commerce Act to determine what, in referenco to the past, was reasonable and just.” In the case under consideration the Commission' has determined that the rates complained of, and which are now charged by the defendants, were in the past and are now unjust, unreasonable, and in violation of the statute. The duty of notifying and requiring the defendants to cease and desist from such violations is enjoined upon the Commission by the following provision of the act:

“SEC. 15. That if in any case in which an investigation shall be made by said Commission it shall be made to appear to the satisfaction of the Commission, either by the testimony of witnesses or other evidence, that anything has been done or omitted to be done in violation of the provisions of this act, or of any law cognizable by said Commission, by any common carrier, or that any injury or damage has been sustained by the party or parties complaining, or by other parties aggrieved in consequence of any such violation, it shall be the duty of the Commission to forthwith cause a copy of its report in respect thereto to be delivered to such common carrier, together with a notice to said common carrier to cease and desist from such violation."

The order of the Commission in the above-mentioned Eureka Springs freight case, including its recommendations for the reduction of rates to Eureka Springs, was complied with by the carriers.

RULES OR REGULATIONS WHICH CHANGE OR AFFECT RATES.

A company engaged in Illinois in buying and shipping grain to Indianapolis, Cincinnati, and other points, complained that the Indiana, Decatur and Western Railway Company had in effect rules or regulations concerning minimum and maximum carload weights which varied with the capacity of the car furnished by it to the shipper, which resulted in increasing its public charges, and which were not shown upon the rate schedules. Upon a carload of corn shipped from Garretts, Ill., to Indianapolis, Ind., weighing 40,865 pounds, the pub. lished tariff rate was 7 cents a hundred pounds, equal to an aggregate charge of $28.61, but the sum exacted by the carrier was $32.72. The higher charge was made by reason of a circular requiring application of the less than carload rate of 13 cents to all weight of grain loaded in the car in excess of 4,000 pounds added to the marked capacity of the car. The car furnished for the shipment had a marked capacity of 30,000 pounds, the 13-cent rate was charged on 6,865 pounds, and the carload rate on the remainder. This regulation was not shown or

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