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ing rate of 302 cents. Rates upon other grain bave been usually somewhat lower than upon wheat, but no distinction was attempted in this case as there was no very good ground for compelling such difference unless the carriers should see fit to make it voluntarily.
In this case the Missouri Pacific was made a defendant, but the St Louis, Iron Mountain & Southern Company, which is subsidiary to the Missouri Pacific, was not made a defendant. The Commission said that while the St. Louis, Iron Mountain & Southern Railway Company was a proper it was not a necessary party, and that while service upon the Missouri Pacific may not have amounted to legal service upon the Iron Mountain, had that been required, it did in fact for all practical purposes notify the latter company of the proceeding.
In the case of the Mayor and City Council of Wichita, Kans., against the Chicago, Rock Island & Pacific Railway Company and others (9 I. C. C. Rep., 569), the complaint was that rates from lumber-shipping points west of the Mississippi River in Louisiana, Arkansas, and Texas to Wichita were unreasonable and unduly prejudicial as compared with rates on like traffic from the same points to Kansas City, Mo., Omaha and Lincoln, Nebr., and Topeka, Kans., and that such rates were higher via the lines of the defendants, the Santa Fe and Rock Island systems, for the shorter distance to Wichita than for the longer distance through Wichita to Kansas City and the other destination points mentioned. It appeared in this case that there are competitive conditions at Kansas City, Omaha, and Lincoln which do not exist at Wichita, and which produce the low rate at Kansas City and those other points. The defendants did not control the Kansas City rate and could not advance it. Upon the ruling of the Supreme Court of the United States, as set forth in the cases above mentioned, the defendants did not, therefore, under the facts of this case, violate the third or fourth section by maintaining a higher rate to Wichita than to Kansas City, Omaha, or Lincoln. The Commission said, however, that it knew of no good reason why the lumber rates from Southern mills should be higher to Wichita than to Kansas City, but that the relation had been established and we were apparently without power to change it under the law as it had been interpreted.
The circumstances and conditions relating to the transportation of lumber to Topeka were found not to differ from those governing the transportation of this lumber to Wichita. We held, therefore, that all of the defendants were in violation of the third section in according a lower rate to that city than they maintained to Wichita, a much nearer point, and that the Sante Fe and Rock Island companies also violated the fourth section, since lumber destined to Topeka is carried through Wichita by those routes. The Commission said that probably the only effect of an order to cease and desist from this unlawful dis. crimination would be the raising of the rate to Topeka, but that the
point had been made by the complainant, and it seemed to be our duty to administer the law.
It was further found in this case that the existing rate of 284 cents per 100 pounds charged by the defendant lines to Wichita for the transportation of lumber from Camden, Ark., and Trinity, Tex., points in the lumber-producing region, to Wichita was excessive, and those defendants were ordered to cease and desist from maintaining that rate.
Another Wichita case (9 I. C. C. Rep., 507) involved the transportation of sugar from Sugar City and Rocky Ford, Colo., in which it was alleged that a higher rate was charged for the shorter distances to Wichita and Hutchinson than for the longer distance to Kansas City, Mo. The rates were 25 cents to Kansas City and 32} cents to Wichita and Hutchinson. The case was called for hearing but it transpired that after the filing of the complaint the rates to Hutchinson and Wichita had been reduced so that they were no higher than to Kansas City. This avoided the necessity of any order and the complaint was dismissed.
Still another case relating to the transportation of coal involved only the consideration of the third and first sections of the act. This was the case of the Mayor and City Council of Wichita against the Atchison, Topeka & Santa Fe Railway Company and others (9 I. C. C. Rep., 558). The coal originated at Minden, Mo., McAlester, Ind. T., and Russellville, Ark., and it was alleged that the higher rates on such coal to Wichita were unlawful as compared with defendants' coal rates from the same points to Kanasas City. The Commission held that the preference given Kansas City in making these lower rates on coal was not in violation of the third section, inasmuch as it was induced by competitive conditions at that point which do not obtain at Wichita.
A further element in this case was that Kansas City was shown to obtain its low coal rates primarily because of its natural location. It was not because defendants had agreed that they would compete at Kansas City and not at Wichita that the former locality has cheaper coal than the latter, but rather because coal deposits are plentiful at its very doors. Wichita, distant 170 miles from the nearest coal field, could not expect as cheap coal as Kansas City where coal is plentiful at from 30 to 50 miles. The Commission said it is possible that this natural advantage had been unduly intensified by railway competition, but that it clearly existed and justified a lower rate than was accorded to Wichita. No final order was entered and complainant was given until January 1, 1904, to apply for leave to submit further testimony upon the reasonableness of the coal rates to Wichita.
In the case of S. Marten against the Louisville and Nashville Railroad Company, decided in November last (9 I. C. C. Rep., 581), it appeared that rates on lumber from Fountain Head, Gallatin, St. Blaise, Pilot Knob, and Nashville, Tenn., to Detroit, Mich., were made by adding the rates of defendant to Louisville, Ky., to rates in force from Louisville to Detroit. The rates of the Louisville and Nashville to Louisville were 10 cents per 100 pounds for the shorter distances from Fountain Head, Gallatin, St. Blaise, and Pilot Knob, and 8 cents for the longer distance over the same line from Nashville.
In this case the Commission had to consider alleged railroad competition from Nashville, water competition from Nashville, and competition between Nashville and Chattanooga for timber in common territory. We found that the Cumberland River at Nashville was not and for many years had not been a potent factor, though it was probable that if the 8-cent rate from Nashville should be raised to 10 cents some lumber would move from that point via the water route; that the presence at Nashville of a navigable river, and other circumstances and conditions of importance that do not exist at the intermediate points, justify such departure from the rule of the fourth section as was made by the defendant in May, 1885, when it reduced the Nashville rate from 10 to 9 cents. It was admitted by the defendant carrier that the reduction from 9 to 8 cents in the rate to Louisville, which was made in December, 1894, was not caused by river competition at Nashville; that the defendant makes the rate from Nashville, and that other carriers there simply followed that rate. The Commission held that the later reduction, namely, from 9 to 8 cents, unaccompanied as it was by a corresponding reduction from intermediate points, Fountain Head, Gallatin, St. Blaise, and Pilot Knob, and placing as it did the latter points at a disadvantage in competing with Nashville in the Detroit market of sale and consumption, resulted in undue, unreasonable, and unjust discrimination against the intermediate points and rendered the 10-centrate therefrom relatively unreasonable, and, therefore, that it was and is under the circumstances in violation of sections 1 and 3 of the act.
Following this general holding, the Commission proceeded to discuss the justification claimed by the defendant carrier. The reason given by the defendant for the reduction from 9 to 8 cents in the rate from Nashville to Louisville was that the Cincinnati Southern Railroad Company had reduced the rate from Chattanooga, and thereby changed the relations formerly existing between Nashville and Chattanooga. We found that competition between the Louisville and Nashville and the Cincinnati Southern was confined very largely to territory lying between Nashville on the one hand and Chattanooga, Burnside, and Emory Gap, in East Tennessee, on the other, and that the character of this territory is such that the lumber which originates there will naturally move in the first instance to Nashville. A large portion was produced at points along the Cumberland River between Nashville and Burnside, and of this it was shown that Nashville secured 95
Ever since the reduction from 9 to 8 cents from Nashville the rate on lumber from Nashville to Detroit was lower than the rate to the same destination from any of the Cincinnati Southern points mentioned to the extent of at least 1 cent per 100 pounds, and at the time of the decision it was 2 cents lower than the rate from either Chattanooga or Emory Gap, and 1 cent lower than that from Burnside.
In this case the decision of the United States Supreme Court in Louisville and Nashville Railroad Company v. Behlmer (175 U. S., 648) was cited by the Commission. In that decision the court said:
Whilst the carrier may take into consideration the existence of competition as the producing cause of dissimilar circumstances and conditions, his right to do so is governed by the following principles: First, the absolute command of the statute that all rates shall be just and reasonable, and that no undue discrimination be brought about, though, in the nature of things, this latter consideration may
many cases be involved in the determination of whether competition was such as created a substantial dissimilarity of condition; second, that the competition relied upon be not artificial or merely conjectural, but material and substantial, thereby operating on the question of traffic and rate making, the right in every event to be only enjoyed with a due regard to the interest of the public, after giving full weight to the benefits to be conferred on the place from whence the traffic moved as well as those to be derived by the locality to which it is to be delivered.
The Commission followed the method of investigation thus indicated in this case.
The Commission said that it is often difficult to say what constitutes a reasonable rate, and more difficult to give in detail the reasons that lead to the conclusion reached; that, although the Supreme Court of the United States had given certain rules by which to test the reasonableness of transportation charges, and although the Commission has endeavored to apply those rules, yet whenever it has interrogated railway officials as to whether or not they are governed by them when making rates of transportion they have invariably answered in the negative and said that to do so would be impracticable. The carriers do not apparently possess the necessary data for that purpose, and there is at present no other source from which the Commission can obtain such data.
Under these circumstances, said the Commission, to hold that, after substantial dissimilarity of circumstances and conditions has been shown, the longer-distance rate can not in any case or to any extent be considered by way of comparison in determining whether or not the shorter-distance rate is unreasonably or unduly prejudicial, particularly when, as in this case, competition and other compulsory conditions are not found to justify the whole disparity between the shorter and longer-distance rates, would be to reject a most appropriato and necessary test of the reasonableness and justice of railway charges. We held that in a case involving shorter-distance charges higher than those to or from longer-distance points the carrier can not rightfully claim justification for greater dissimilarity in the rates than may be indicated by the ascertained dissimilarity in circumstances and conditions.
The defendant insisted that it was entitled to reduce the rate from Nashville and yet leave undisturbed the rate from the intermediate points in question, solely because a reduction had been made from Chattanooga, a point not served by this railway, and timber comes to Chattanooga and Nashville from the intervening country and from a considerable section south of those cities. The Commission found as a matter of fact that the conditions relating to the supply of material for lumber manufactured at Nashville and Chattanooga from this southern territory were not such as to require the defendant, for the protection of its legitimate interests, to reduce tbe rate from Nashville to Louisville from 9 to 8 cents, and in arriving at that conclusion of fact we fully considered all of the reasons insisted upon by the defendant. It resulted, therefore, that the ground of justification relied upon by the defendant was untenable upon the facts appearing in the record.
We also said that if the facts were otherwise we should have little difficulty in disposing of defendant's contention. The question here was whether on account of a reduction in the rate on lumber from Chattanooga, on the line of the Cincinnati Southern, the Louisville and Nashville was justified in charging a lower rate on lumber from Nashville than from points north of Nashville to Louisville.
A change in rates on particular traffic from points in one section may lead to changes in rates on such traffic from points in another section, but that is a circumstance or condition which naturally affects the general movement of traffic and the general system of rates on such traffic rather than the traffic and rates from a specified point. Years before this case was brought the Cincinnati Southern had reduced its rates on lumber not only from Chattanooga, but also from points north of that city to Cincinnati. The defendant, acting upon such reduction from Chattanooga, reduced its rate from Nashville only and kept up its rate from intermediate points north of Nashville. It wholly disregarded the competition of Gallatin and the other points on its line north of Nashville with Nashville, with Chattanooga, and with Emory Gap, Burnside, and other points north of Chattanooga.
The Commission said that a broad view of what constitutes profitable policy for a carrier includes the increase of trade at all stations and the building up of the various localities along its line, and while a carrier may find some temporary or comparative profit in concentrating traffic in large cities the interests of the public, generally speaking, lie in an opposite direction, and it is easy to see that a carrier may do