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play of competition to adjust rates, subject only to the requirements made of each carrier that its rates shall be reasonable and just and shall not unduly discriminate between commodities or between persons and localities reached or served by it, and that duly established and published rates be observed. The foregoing report proceeds upon the idea that there is some legitimate and ascertainable standard of fairness by which there can be fixed a limited and proper degree of competition and measure of distribution of the traffic between the ports and carriers other than that wrought by competition. The law undertakes to fix no such standard or limitation; nor does it authorize the Commission to do so even for the purpose of putting to rest these questions so long and so often involved in competitive contests between carriers. The futility of the undertaking of the Commission to do so is illustrated in the following admission contained in its conclusions:

We have endeavored to find some fundamental principle by the application of which this dispute might be laid at rest, but entirely without success. It is said that a fair differential is one which would give to these several ports the traffic to which they are entitled. It is also said that these several ports are entitled to what of this traffic they can obtain under a fair differential.

The findings declare "there is no testimony in this record which attempts to show the relative cost of handling this traffic," yet the question of a differential in rates is intimately connected with the question of the reasonableness of the rates involved, and cost of service is one factor of too much importance in connection therewith to be ignored. It is not enough to say that equalizing the export rates is but taking into account the carriage from origin to destination and taking from the inland rate as compensation the post-terminal charges from the outports, for on this point the findings are no more satisfactory. They say, "it is therefore impossible to find with any degree of confidence what the rates from these ports have been." The higher insurance rates to be compensated are quite as elusive. These it is said "would be in the long run a real disadvantage against these ports, but there is no testimony in this case from which we can place any exact figure upon this disadvantage," but the differentials are to be fixed to the fraction of a cent. The futility of the undertaking is further illustrated in the following declaration found in the opinion:

There is no just principle which would compel this company against its will to apply at New York the same rate as at Philadelphia, when the cost of rendering that service is distinctly greater. It might, as a matter of competition, see fit to do so, but it could not in justice be compelled to.

It is further said:

If, again, it can be properly done these rates should be so adjusted that this competitive traffic will be fairly distributed between the different lines of railway which serve these ports.

Thus it is seen the purpose and effect of the conclusions is to declare what differences in rates the railroads should make to the four ports for the purpose of distributing the business. Whether the carriers see fit to follow the suggestions of the Commission, which they are, of course, in no sense bound to do, or decline to accede to the same will, in my opinion, leave the Commission in an embarrassing attitude. If they refuse we are powerless to enforce the recommendations, yet compromised in any subsequent proceeding against finding other as

reasonable rates. If they acquiesce we will have gone beyond our authority to interfere in the course of trade, determining the direction and destination of commerce, a matter with which we are not charged. To-morrow we may be called upon to determine what share the Gulf ports may have, and the Gulf roads may carry; the next day to fix the proportion to which the Pacific coast is entitled.

While the situation justified the inquiry, the facts disclosed do not, in my judgment, justify the conclusions reached for the reason that I believe they do violence to the great principle of competition which the Congress and the Supreme Court have so jealously and consistently nourished as one of the fundamental rights of the public. In declaring as between competing lines and competing ports what differentials shall govern, assuming that they will govern, we hamper competition, and by this regulation of distribution effect in reality a division of territory, a division of traffic, and a division of earnings, which in substance and effect tend to defeat not only the purposes of the antitrust act against the restraint of trade, but the pooling provision of the interstate commerce act, with the enforcement of which the Commission is charged.

In this thirty years contest over the traffic under consideration there have been truces and arbitrations before this; but when Mr. Fink was chosen it was by the carriers, and when Judge Cooley and his associates, the advisory commission, were called in 1882, it was by the carriers. When Judge Cooley was called in 1886 on western differentials, it was by the carriers. And these arbitrators did what? They left, as they were doubtless expected and as they were bound to do, conditions as they found them. The carriers by competition and every device in economy human ingenuity could invent had reached in these years of struggle, competition and the natural course of trade, results which were not satisfactory to all of the communities and to shippers, and to satisfy these, disinterested noncarriers were called in to give a lay opinion and pleading lack of information and substantial justice they approved what they found and the differentials were accordingly left undisturbed while the truce lasted.

May competing carriers lawfully effect through the agency of the Commission restraint of competition and trade by a division of traffic between themselves and the ports when to do the same thing through an agency of their own would be unlawful? I think not.

The expectation of putting these questions to ultimate rest could spring only from a Utopian dream. Their permanent rest is perhaps neither practicable in view of the interests of the ports and carriers nor desirable in the interest of the public.

The unmolested freedom of competition by lawful methods permitting the free course of traffic is more likely to give to each community and carrier the fair and just rewards of its enterprise and public spirit and just rates to the public than any devised plan of fixed differentials between competing carriers to compose conflicting interests by apportionment of the traffic and which in the nature of the case must be more or less arbitrary. It is at least safe to keep within both the spirit and letter of the law.

Part I.


Chapter from "Federal Statutes Annotated,” volume 3,
compiled by William M. McKinney and Peter C. Kem-
per, jr.; copyright by Edward Thompson Company,
Northport, Long Island, New York, publishers, 1904.
Printed by permission of the publishers, by whom all
rights are reserved.

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