28 Indeed, prevailing for various points within the group. it has been said repeatedly that group rates not infrequently are the most just, and promote the highest degree of healthy competition.29 As a matter of policy the system of grouping should be encouraged, and growers should have as free and unrestricted a field as possible in which to establish their credit and purchase the supplies necessary to conduct their business.30 It is plainly undesirable to disturb a method of rate making, long established and generally satisfactory, without convincing proof of its injustice.31 The rate structure as worked out in practice will ordinarily make rates break at ports and on the banks of rivers; but to have rates break at a particular point, even if conditions are much the same, is not an inherent rate right. 32 The Commission has conceded that a governmental authority has not the same latitude in fixing blanket rates as the carriers themselves.33 But it has said shrewdly that if the courts should rule that the Commission had no authority to establish blanket rates in territory, it would seem to follow that the carriers are without authority.34 However, the Commission went ahead prescribing rates which would presumably result in blanketing the points of origin between localities mentioned. 35 And while the Commission often approved blanket rates, blanket rates have been condemned where they result in unreasonable charges.36 Until very recently the Commission felt it would be inopportune to proceed upon the theory that it had power to establish a blanket rate generally applicable.37 28 Victor Mf'g Co. v. S. Ry., 27 I. C. C. 661. 29 Waukesha Lime & Stone Co. v. C., M. & St. P. Ry., 26 I. C. C. 515. 30 Concentration of Cotton, 26 I. C. C. 585. 31 Acme Cement Plaster Co. v. L. S. & M. S. Ry., 17 I. C. C. 30. 32 Commercial Club of Duluth v. B. & O. R. R., 27 I. C. C. 639. But after the decision in the Lemon Rates Case, 38 it was obvious that if it acted with due caution, it would be safe to follow out the zone policy when the conditions were favorable. And in the Intermountain Rates Case, 39 it would seem to have been made sufficiently clear that the Commission can give relief by establishing zones, if that is appropriate. § 602. Creation of a market by preferential rates. Only to a certain extent the carrier may be allowed to favor a new town, and thereby create a new market and stimulate competition. 40 "The Louisville & Nashville insists that the near-by market of Pensacola is entitled to all of this great advantage. It claims that the lower rates to Pensacola were necessary to create a market there for these stores, and, further, that the carriage to Pensacola is only part of its haul on the great majority of the shipments, while on shipments to Savannah it can only have the short haul to River Junction, where it must turn the traffic over to one of its connecting roads. Whatever difference in rates may have seemed necessary at the outset to create a demand in the Pensacola market, it is apparent now, after several years' trial, that the rates to Savannah as compared with the Pensacola rates give an unwarranted advantage to Pensacola. In endeavoring to build up a near-by market at Pensacola, and so furnish these products with a market in addition to the one existing at Savannah, the Louisville & Nashville was acting in the interest of producers of and dealers in naval stores on its Pensacola & Atlantic division. It went beyond this, however, and so controlled the adjustment of 38 Interstate Commerce Commission v. A., T. & S. F. Ry., 231 U. S. 736, 34 Sup. Ct. 316. 39 United States v. A., T. & S. F. Ry., 234 U. S. 476, 34 Sup. Ct. 986. 40 Savannah Bureau of Freight & Transportation v. Louisville & N. R. R., 8 I. C. C. Rep. 377, affirmed in 118 Fed. 613. No jobbing point is entitled, through unfair rate adjustment, to supremacy in a particular consuming territory. Billings Chamber of Commerce v. C., B. & Q. R. R., 19 I. C. C. 71. rates to the two markets as to give Pensacola a practical monopoly of the trade. A carrier cannot lawfully establish and maintain an adjustment of rates which in practice prevents shippers on its line from availing themselves of a principal market which they have long been using, and confers a substantial monopoly upon a new market in which, for reasons of its own, it has greater interest. That is what has been done in this case." 41 § 603. Equalizing manufactures in different localities. To a certain extent subject to many limitations discussed elsewhere, a railroad management may equalize the access of manufacturers in different near-by localities to their sources of supply so that all may compete upon equal terms in common markets. That this tends to promote distribution of manufacturing industries, which has its advantages, may be admitted, but the extent to which the common carrier may be permitted to play the part of a beneficent despot is a question. The Commission has never approved a group system which imposed upon any part of group an unjust and unreasonable or unduly discriminating transportation charge.42 It has held, for example, in regard to any basing system that the intermediate rate should not exceed the long-distance rate, plus a reasonable local charge from the more remote point back to intermediate point, and should, perhaps, in some cases be even less. In a territory under the basing point system, rates to a complaining point, made by a combination of the 43 41 The Commission has repeatedly recognized and approved the grouping of points, within reasonable limits. Stiritz v. N. O. M. & C. R. R., 22 I. C. C. 578. Every city is entitled to the advantage of its location, and may not lawfully be subjected to high freight charges merely because carriers for reasons of convenience or otherwise include it with a number of other points in surrounding territory, which latter points are not similarly situated. Corporation Commission of North Carolina v. N. & W. Ry., 19 I. C. C. 303; decision of Commission sustained, N. & W. Ry. v. U. S., 195 Fed. 953. 42 Southwestern M. Millers' Club v. M., K. & T. Ry., 22 I. C. C. 422. 43 Bluefield Shippers' Ass'n v. N. & W. Ry., 22 I. C. C. 519. through rate to the nearest trade center and the local beyond need not, under the construction of the fourth section of the act by the Supreme Court, be reduced to the basis of every neighboring point of like distance, when the other points have the advantage of water or other competition.44 And, indeed, the authorities are now quick to appreciate that the rapid increase of rates as the point of production is removed from base points presents an anomaly in rate making which calls for explanation.45 And the Commission has laid it down that, if the basing point system is adopted, it must be applied alike to all places where real dissimilarity of circumstances or controlling competition do not exist.46 Thus where three towns are strong competitors, it is important to have a common rate, if the conditions justify it.47 And it is improper to place a particular commodity in a given zone without due regard to geographical boundaries of production. 48 It is realized, however, that blanket or group rates in many cases are of great advantage to the public without serious injustice to any interest, though there is of necessity more or less disregard of distance and varying degrees of inequality.49 A basing point is established that all roads might share in the business and all shippers be given opportunity to compete in common markets. 50 Indeed, the chief justification for a blanket rate is that it places all producers on the same footing at a market.51 44 Commercial & I. Ass'n of Union Springs v. L. & N. R. R. Co., 12 I. C. C. 372. 45 Florida F. & V. S. P. Ass'n v. A. C. L. R. R., 22 I. C. C. 11. 46 Columbia Grocery Co. v. L. & N. R. R., 18 I. C. C. 502. 47 Railroad Commissioners of Fla. v. S. A. L. Ry., 16 I. C. C. 1. 48 Ferguson Saw Mill Co. v. St. L., I. M. & S. Ry., 18 I. C. C. 391. 49 Chicago Lumber & Coal Co. v. Tioga Southeastern Ry., 16 I. C. C. 323. 50 Avery Manufacturing Co. V. A., T. & S. F. Ry., 16 I. C. C. 20. 51 Ferguson Saw Mill Co. v. St. L., I. M. & S. Ry., 18 I. C. C. 396. BOOK III PREVENTION OF DISCRIMINATION PART I-WHAT CONSTITUTES DISCRIMINATION CHAPTER XIII GENERAL PRINCIPLES RELATING TO DISCRIMINATION § 610. Provisions of the Act. 611. Development of the rule against discrimination. Topic A. Successive Theories as to Discrimination § 612. Nothing but reasonableness once required. 616. Exclusiveness of the privilege creates discrimination. 622. Public injury by discriminations in freight rates. Topic B. What Constitutes Statutory Discrimination § 624. What amounts to a rebate. 625. Prohibition of special rates. 626. Explanation of this policy. 627. What discrimination is forbidden. 628. Departure from published rate. 629. Sanctity of the scheduled rate. 630. Devices for concealing preference unavailing. 631. Certain unlawful devices considered. 632. Schemes to cover discrimination. 633. Criminal provisions for discrimination. 634. What intent is necessary. 635. Civil liability for discrimination. |