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this practice was issued by the Commission and was the subject of the proceeding in court.
In its decision, based upon the record before the Commission and the additional testimony taken, the court found that these carriers were engaged in pooling, in violation of section 5 of the act to regulate commerce, and said that its conclusions on the pooling issue rendered it unnecessary to pass upon any of the other questions alleged in the The principal rulings of the court in relation to the question of pooling were as follows:
A pool is constituted whenever the contract or agreement provides any special means or agency for apportioning the freights which destroys the rivalry which would otherwise exist between the railroads, and a contract or agreement by which the apportionment is left absolutely and unqualifiedly to the will of the initial carrier, accomplishes this end as effectually as though definite percentages were fixed in the contract. The prohibition of section 5 against pooling freights protects competition in rate as well as in service. Any contract, agreement, or combination between different and competing railroads whereby the volume or quantity of freights is apportioned by any special means or agency which was intended to, and does, suppress competition, either in rate or service, is a traffic pool within the meaning of section 5 of the act to regulate commerce. A rule or regulation in a joint tariff, reserving to the initial carrier the absolute and unqualified right of routing beyond its own terminal, is a contract between common carriers who are parties to said tariff, and if the means or agency used under such rule or regulation apportions freights among connections of the initial carrier, such rule or regulation is essentially a pool within the meaning of section 5 of the act to regulate commerce. Section 5 of the act to regulate commerce by declaring unlawful certain contracts, agreements, and combinations therein mentioned makes it the duty of common carriers to refrain from entering into such contracts, agreements, or combinations; and the Interstate Commerce Commission, in directing common carriers to desist from an unlawful practice, performs a judicial function which is entirely lawful.
THE KEARNEY, NEBR., CASE.
The case of the Interstate Commerce Commission against the Southern Pacific Company, and others, in the United States circuit court for the northern district of Nebraska, was a proceeding in equity under section 16 of the act to regulate commerce for the enforcement of an order of the Commission. The order was the result of a complaint made to the Commission by one A. J. Gustin, a resident of Kearney, Nebr. The complaint charged, and the fact was conceded by the defendant carriers to be, that the rate of the defendants on
sugar from San Francisco and other Pacific coast common points to Kearney was 77 cents per 100 pounds, while the rate for the haul over the same line through Kearney and 196 miles on to Omaha was only 50 cents per 100 pounds-the Kearney rate being more than 50 per cent higher than the Omaha rate and being equal to the entire through rate of 50 cents to Omaha, plus an additional rate of 27 cents. The Commission held that the comparatively low rate of 50 cents to Omaha was the result of competition at that point, and therefore justified, but that the rate of 77 cents to Kearney was unreasonably high as compared with the Omaha rate and in pursuance of this finding directed in its order that the Kearney rate should not exceed the Omaha rate to the extent of 27 cents per 100 pounds, but by reason of the difference in conditions brought about by competition at Omaha the Kearney rate might be made to exceed the Omaha rate by not more than 15 cents per 100 pounds.
There was evidence before the Commission and also a large amount of additional evidence taken before the court tending to show the unreasonableness of the Kearney rate. The court, however, held that it was unnecessary to pass upon this question whether the Kearney rate was unreasonable in itself, because the Commission had not found that the Kearney rate was in itself excessive, but had only found that the Kearney rate was relatively unreasonable as compared with the Omaha rate. On the ground that the low rate to Omaha was justified by competition at that point and the much higher rate to Kearney had not been found by the Commission to be unreasonable in itself, the court dismissed the bill of complaint of the Commission. The court cited as authority for this ruling I. C. C. v. L. & N. R. R. Co. et al. (190 U. S., 273).
MANDAMUS TO COMPEL FILING OF ANNUAL REPORTS.
The Lake Shore and Michigan Southern Railway Company having refused to file an annual report, as required by an order of the Commission under section 20 of the act to regulate commerce, a petition for mandamus was filed in the circuit court of the United States for the northern district of Ohio to compel compliance with the order of the Commission. The defendant interposed a motion to dismiss for alleged want of jurisdiction in the court to issue an original writ of mandamus. There was no question as to the authority of the Commission to require the report called for and no issue as to the legality of the order. The only question was whether the court had jurisdiction to issue the writ. This was decided in the negative and the petition was dismissed. The court did not deliver a written opinion, but stated orally, as ground for sustaining the motion to dismiss, that the jurisdiction to issue an original writ of mandamus was in the State
court and not in the Federal court. The case is now in the Supreme Court on writ of error. If that court sustains the circuit court the act should be amended so that Federal courts will be expressly authorized to issue writs of mandamus in such cases. Petitions for mandamus in similar cases have also been filed against the Boston & Maine Railroad in the United States circuit court for the district of Massachusetts and against the New York Central & Hudson River Railroad and the Delaware & Hudson Company in the United States circuit. court for the southern district of New York. Proceedings on these petitions have been suspended pending the action of the Supreme Court in the Lake Shore case.
CASES INCIDENTALLY CONSTRUING THE ACT TO REGULATE COMMERCE.
The question whether a State court, in refusing to limit the recovery for the loss of property to the valuation agreed upon in the bill of lading, denied to the defendant carrier a right or privilege secured by the act to regulate commerce has been determined by the United States Supreme Court. The court held during the present year, in the case of Pennsylvania Railroad Company v. Hughes (191 U. S., 447), that while it may be assumed that under the broad power conferred upon Congress over interstate commerce as defined in reported decisions of the Supreme Court it would be lawful for Congress to make provisions as to contracts for interstate carriage permitting the carrier to limit its liability to a particular sum in consideration of lower freight rates for transportation, that body has not yet done so. Upon examination of the terms of the act to regulate commerce the court failed to find any such provision therein, and looked in vain in such act for any regulation of the matter.
On appeal from a decree of the circuit court of appeals affirming a decree of the circuit court dismissing the plaintiff's bill, in the case of Central Stock Yards Company v. Louisville & Nashville Railroad Company (192 U. S., 568), the United States Supreme Court last February affirmed the decisions of the courts below, and held that neither the act to regulate commerce nor any provision in the constitution of the State of Kentucky imposes an obligation upon a railroad having its own stock yards in Louisville under a lease from a stock yard company to accept live stock from other States for delivery at the stock yards of another railroad in the same city and neighborhood, although there is a physical connection between the two roads.
The right of the Government of the United States in buying transportation on a railroad for its soldiers in parties of ten or more to a reduced ten-party rate was denied by the circuit court of appeals for the seventh circuit in the recent case of United States v. Chicago & Northwestern Railway Company (127 Fed. Rep., 785). The court held H. Doc. 146, 58-3- -6
that the refusal to give the Government the party rates it gave to theatrical, hunting, and other parties did not constitute an unjust discrimination against the Government or subject it to undue prejudice or disadvantage, in violation of the act to regulate commerce, where it was shown that the purpose and effect of the party rate given by the schedule was to increase the company's business, and that tickets sold thereunder were closely limited in time and were paid for in cash in advance, while those furnished to the Government were not so limited, were furnished on a requisition, and were only paid for after indefinite delay in the auditing and allowance of the claims by the War and Treasury Departments. The court decided that the conditions and circumstances under which the service was rendered were essentially different, and justified the making of different rates.
In the case of Gulf, Colorado & Santa Fe Railway Company v. Moore (80 S. W. Rep., 426), the court of civil appeals of Texas held that the refusal by a railroad company to stop its train to let off a passenger who purchased a ticket at a point on its own road, outside the State, at a station at which it stopped to let off passengers who purchased tickets over other roads at points outside the State, was a violation of section 3 of the act to regulate commerce, damages for which are recoverable in a civil action in the courts of that State.
The supreme court of Mississippi, in the case of Laurel Cotton Mills v. Gulf & Ship Island Railroad Company (37 So. Rep., 134), held that sections 2 and 3 of the act to regulate commerce do not forbid all discriminations, but only discriminations against some person, locality, or corporation, made for the advantage of the carrier, or by receiving greater or less compensation from one class of persons than from another for similar services, and therefore that a contract by a railroad to maintain rates from a factory not exceeding, to competitive points, the rates from two other places, is not, on its face, void for discrimination. It was also decided in this case that a milling-intransit agreement by which the railroad contracts to credit on the freight charges on manufactured goods any freight on raw material shipped to the factory was not violative of these sections.
An interesting question arose in the United States Supreme Court, in Pennsylvania Railroad Company v. Knight (192 U. S., 21), as to whether a cab service maintained by the Pennsylvania Railroad Company to take passengers to and from its terminus in the city of New York, for which the charges are separate from those of other trans portation and wholly for service within the State of New York, is interstate commerce. The court held that it is not, although all persons using the cabs within the company's regulations are either going to or coming from the State of New Jersey by the company's
ferry. "Many things have a more or less close relation to interstate commerce," said the court, "which are not properly to be regarded as a part of it. If the cab which carries the passengers from the hotel to the ferry landing is engaged in interstate transportation, why is not the porter who carries the traveler's trunk from his room to the carriage also so engaged? If the cab service is interstate transportation, are the drivers of the cabs and the dealers who supply hay and grain for the horses also engaged in interstate commerce? And where will the limit be placed?"
A case of some importance involving a phase of this question was recently decided by the supreme court of Texas in Gulf, Colorado & Santa Fe Railway Company v. State (78 S. W. Rep., 495). It appeared that a grain company at Kansas City, Mo., having sold a firm at Goldthwaite, Tex., two cars of corn which as yet it did not own, contracted with a commission company, also at Kansas City, for the purchase of two cars of corn to be delivered at Texarkana, Tex. Previous to this the commission company had purchased two cars of corn to be delivered to it at Texarkana, the shipment originating at Hudson, S. Dak., with a receiving carrier whose bills of lading limited its liability to its own line, with a like limitation for all connecting carriers. The purchase from the commission company by the grain company took place while this shipment was at Kansas City on its way south, and two days after the purchase the grain company ascertained that the corn to fill its order would come from Kansas City. The commission company had an agent at Texarkana who, by arrangement between the two companies, reshipped the corn without breaking bulk to the firm at Goldthwaite, blank bills of lading having been furnished the commission company by the grain company, which were forwarded to the agent who, when they were executed by the carrier receiving the corn at Texarkana, delivered them to its grain company. The receipt of these bills was the first notice the commission company had of the ultimate destination of the shipment. Upon this state of facts the court held that on delivery by the commission company to the grain company at Texarkana the shipment lost its character of interstate commerce, and from Texarkana to Goldthwaite fell within the jurisdiction of the State railroad commission.
The supreme court of Minnesota last April, in the case of Connery v. Quincy, Omaha & Kansas City Railroad Company (64 L. R. A., 624), held that a railroad car of a foreign company sent into that State with freight to be delivered there, and then, within a reasonable time necessary for its return, reloaded, and, in the customary and usual course of business, forwarded to the State from which it came is not liable to attachment issued in an action in the courts of Minnesota. It appeared that the car in question had been used in an interstate shipment of goods therein from St. Louis to points in Minnesota,