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100 pounds applied on such tonnage amounts to an addition of $741,185 to the railway revenues and to the burden of charges borne by farm and mill products carried only by those lines via or from Chicago and such other junctions to the seaports mentioned.
THE LONG AND SHORT HAUL CLAUSE.
On November 8, 1897, the Supreme Court beld, in the case entitled Interstate Commerce Commission v. Alabama Midland Railway Company et al. (The Troy Case, 168 U.S., 144), that railroad competition may create discriminating circumstances and conditions under the fourth section and thereby justify greater charges for the shorter laul. This case is also discussed under another head in this report. The following facts are an interesting commentary on the effect of the decision :
During October of the present year lines leading west from Chicago, Mississippi River, and Missouri River points materially reduced their rates to Denver and other Colorado common points, and it was observed rom tariffs which were filed that the higher old rates were kept in effect to intermediate stations on some of the rail lines to these Colorado cities; but, upon the institution of an investigation by the Commission, the higher short-haul charges were promptly lowered to the basis of the longer distance rates, except upon a single line. Before any further action could be had, the decision of the Supreme Court in the Troy Case was announced on November 8, and within a few days thereafter wide rate disparities against intermediate stations were notified to become effective on November 20 over all the lines, and four days later still lower rates were put in force to Denver and other Colorado cities. The long-established rates in cents per 100 pounds to Denver and all intermediate points have been, and to intermediate stations still are, as follows:
The present rates to Denyer and other Colorado common points (shorter distance rates remaining as above) are:
69 49 25
The cuts so made amount to from 26 cents on Class E to $1.18 on Class 1, from Chicago and Mississippi River points, and from 15 cents
on Class E to $1 on Class 1 from Omaha, Kansas City, and other Missouri River points. The present rate for Class 1 is only 20 per cent, and Class 2 and Class A rates are but 25 per cent, of those which have usually been charged from Missouri River cities to Denver. While rates of from 30 to 60 cents have been in force on classes E, D, C, B, A, and 5, and from 65 cents to $1.25 on the other classes, from Missouri River points to Denver, and are still in effect to shorter-distance points, the freight classification as to Denver and common points is almost wholly discarded under present rates, there being now but two instead of ten class rates to such points, namely 25 and 15 cents. Other combinations of classes also appear in the foregoing statement. Like higher rates for the shorter haul on lines to Colorado common points are now made from many other points, including New York and other Eastern cities.
The differences which have usually prevailed between rates from Chicago to Missouri River points and rates from Chicago to the much more distant Colorado points, and the differences which now exist under present rates are as follows:
Such was the situation on December 1, the date of this report. On December 13, rates are notified to be effective on at least one line which will be from 4 to 10 cents less from Chicago to Denver than those in force from Chicago to Kansas City or Omaha, and which will also be less to that extent from St. Louis to Denver than from St. Louis to Kansas City or Omaha.
THE SUMMERVILLE IIAY CASE."
On November 3, 1897, five days before the decision of the United States Supreme Court in the Troy Case, the Fourth circuit court of appeals rendered a contrary decision, as to construction of the fourth section, in the “Summerville Hay Case,” which had been appealed to that court from the United States circuit court for the district of South Carolina. The complainant, Behlmer, had, upon complaint to and hearing before the Commission, obtained an order prohibiting the South Carolina Railway Company and other connecting carriers from charging more on hay in carloads from Memphis, Tenn., for the shorter clistance to Summerville, S. C., than for the longer distance over the same line to Charleston, S. C., 22 miles beyond Summerville. In its report and opinion the Commission held that railroad or market competition did not create substantially dissimilar circumstances and con. (litions under the fourth section; that water competition, to justify
lower longer-distance charges, must exist between the point of shipment and the longer-distanco destination, and that the carriers to obtain relief must make suitable showing upon an application as provided for in the proviso to the fourth section. This construction of the law, which was not approved by the circuit court, was fully sustained by the circuit court of appeals. It is understood that, relying upon the decision of the Supreme Court in the Troy Case, the defendant carriers have applied to the circuit court of appeals for a rehearing of the Summerville Case.
"THE WIGHT CASE."
This case was decided by the United States Supreme Court on May 24, last (167 U. S. 512). Mr. Wight, one of the general officers of tho Baltimore and Ohio Railroad, had been indicted and convicted in tho district court for the western district of Pennsylvania for violating section 2 of the act, and upon writ of error the matter was brought before the Supreme Court. A rate of 15 cents per hundred pounds was in force on beer in carloads from Cincinnati to Pittsburg by both the Pittsburg, Cincinnati and St. Louis and the Baltimore and Ohio roads. Bruening, a wholesale dealer in beer, had his warehouse in Pittsburg on a siding of the Pittsburg, Cincinnati and St. Louis, so that beer coming to him by that road could be unloaded directly at his place of business. The Baltimore and Ohio station in Pittsburg was some distance from Bruening's warehouse, and there was no track connection between them, so that beer coming to him over that road must be hauled in wagons from the station to the warehouse. To get Bruening's shipments agents of the Baltimore and Ohio agreed to haul his beer from its station to his place of business without charge. This cost the railroad company 34 cents per hundred, and when Bruening afterwards offered to do the hauling himself at that price, his offer was accepted, and the agreement was approved by Wight. Wolf, another wholesale dealer in beer at Pittsburg, also received shipments of beer from Cincinnati, but his warehouse, situated near the Baltimore and Ohio station in Pittsburg, was not connected by track with any railroad. Wolf had to haul beer from the station at his own cost and pay the full rate of 15 cents per hundred pounds. Wolf's warehouse was 140 yards, and Bruening's was 172 yards from the Baltimore and Ohio station, but on account of the steep ascent the latter generally carted the beer a longer distance. The defendant contended that it was necessary for the Baltimore and Ohio Company to offer this inducement to Breuning in order to get his business, and not necessary to make the like offer to Wolf, because he would have to go to the expense of cartago by whichever road transported; and that, therefore, the traffic was not “under substantially similar circumstances and conditions” under the provisions of section 2. The decision of the court gives full effect to the section, and is as follows:
Whatever the Baltimore and Ohio Company might lawfully do to draw business from a competing line, whatever inducements it might offer to the customers of that
competing line to induce them to change their carrier, is not a question involved in this case. The wrong prohibited by the section is a discrimination between shippers. It was designed to compel every carrier to give oqual rights to all shippers over its own road and to forbid it by any device to enforce higher charges against one than another. Counsel insist that the purpose of the section was not to prohibit a carrier from rendering more service to one shipper than to another for the same charge, but only that for the same service the charge should be equal, and that the effect of this arrangement was simply the rendering to Mr. Bruening of a little greater service for the 15 cents than it did to Mr. Wolf. They say that the section contains no prohibition of extra service or extra privileges to one shipper over that rendered to another. They ask whether if one shipper bas a siding connection with the road of a carrier it can not run the cars containing such shipper's freightonto that siding and thus to his warehouse at the same rate that it runs cars to its own depot, and there delivers goods to other shippers who are not so fortunate in the matter of sidings. But the service performed in transporting from Cincinnati to the depot at Pittsburg was precisely alike for each. The one shipper paid 15 cents a hundred; the other, in fact, but 114 cents. It is true he formally paid 15 cents, but he received a rebate of 34 cents, and regard must always be had to the substance and not to tho form. Indeed, the section itself forbids the carrier "directly or indirectly by any special rate, rebate, drawback, or other device” to charge, demand, collect, or receive from any person or persons a greater or less compensation, etc. And section 6 of the act, as amended in 1889, throws light upon the intent of the statute, for it requires the common carrier in publishing schedules to "state separately the terminal charges, and any rules or regulations which in any wise change, effect, or determine any part or the aggregate of such aforesaid rates and fares and charges.” It was the purpose of the section to enforce equality between shippers, and it prohibits any rebate or other device by which two shippers, shipping over the same line, the same distance, under the same circumstances of carriage, are compelled to pay different prices therefor.
The court further said: It may be that the phrase "under substantially similar circumstances and conditions,” found in section 4 of the act, and where the matter of the long and short haul is considered, may have a broader meaning or a wider reach than the same phrase found in section 2. It will be time enough to determine that question when it is presented. For this case it is enough to hold that phrase, as found in section 2, refers to the matter of carriage, and does not include competition.
As stated above, the Supreme Court has since decided the Troy Case and held that “substantially similar circumstances and conditions” in section 4 (which is a rule against unjust discrimination between places) includes competition, notwithstanding its ruling in this Wight case that the identical phrase in section 2 (which prohibits unjust discrimination between individuals) does not include competition.
Another decision of the United States Supreme Court was rendered in May last in the case of the Commission against the Detroit, Grand Haven and Milwaukee Railway Company, commonly called the “ Free Cartage Case.” This carrier charged on traffic from the East the same rates to Ionia and Grand Rapids, Mich., the latter a longer distance point by 33 miles on the same line of road, and gave free cartage of freights at Grand Rapids between its depot and business houses in that city at a cost to itself of 2.cents per hundred pounds, but refused to make a corresponding reduction in rates to Ionia, where the depot was located but a short distance from the business center. The carrier did not publish its free cartage regulation at Grand Rapids. The Commission found and held that under this practice the carrier was giving rebates from its published rates and charges to shippers and consignees at Grand Rapids, and was thereby also violating the long and short haul clause, because the actual charge on freights at Grand Rapids was less than it exacted on like freights at Ionia, the shorter distance locality. The circuit court upheld the order of the Commission, but that decree was reversed by the circuit court of appeals, as stated in our last annual report, and the Supreme Court has since affirmed the decision of the circuit court of appeals. The decision of the Supreme Court as to the application of the fourth section is embodied in the following-quoted paragraph:
We agree with the circuit court of appeals in thinking that the fourth section of tho interstate commerce act has in view only the transportation of passengers and property by rail, and that, when the passengers and property reached and were discharged from the cars at the company's warehouse or station at Grand Rapids, for the same charges as those received for similar services at Ionia, the duties and obligations cast upon this company by the fourth section were fulfilled and satisfied. The subsequent history of the passengers and property, whether carried to their places of abode and of business by their own vehicles or by those furnished to the railway company, would not concern the Interstate Commerce Commission.
In this case, the court also doubted whether free cartage comes within the meaning of “terminal charges,” or can be regarded as a rule or regulation which in anywise changes, affects, or determines any part of the aggregate of the rates," both of which the statute requires to be shown in published tariffs, and was not persuaded that, by omitting to publish its free cartage practices at Grand Rapids, the defendant company had acted in any intentional disregard of the sixth section. The court added, however, that "in a matter of this kind, much should be left to the judgment of the Commission, and should it direct, by a general order, that railway companies should thereafter regard cartage when furnished free as one of the terminal charges, and include it as such in their schedules, such an order might be regarded as a reasonable exercise of the Commission's powers."
ORDER OF COMMISSION BINDING UPON SUCCESSOR CORPORATIONS.
In the Summerville Hay Case the order of the Commission was entered on June 27, 1894, and thereafter served upon the defendants, including the South Carolina Railway Company and its receiver. In April, 1894, the road was sold under foreclosure, and the property by virtue of the sale came into the possession of the South Carolina and Georgia Rail. road Company. The new company had not been made a party defendant to the case before the Commission, but when the order was served a copy was also sent to the successor corporation. The circuit court