Commissioner Prouty saying: "The ocean freights from Boston and New York are substantially the same. It follows, therefore, that the inland rate must also be the same. It has been decided that a differential of substantially 2 cents per hundred pounds may be properly made on domestic grain against Boston, but if the export rate were 2 cents higher to Boston than to New York, no traffic would move through the port of Boston. The object of these two rates, therefore, is to equalize the export rate between the ports of Boston and New York. The export rate to Boston is not in reality a Boston rate at all, but is in essence the inland division of a through rate through that port to foreign ports. That the inland carrier may receive in such case for its division a sum less than the domestic rate has been, as we have just seen, determined by the Supreme Court of the United States; hence the thing accomplished by the making of these two rates is not, as a matter of law, illegal."

67

§ 120. Foreign competition justifies only necessary differ

ences.

But while foreign competition may be considered in fixing the inland share of the through rate, the difference thus justified between the inland and the export or import rate is only such difference as is necessary to meet the competition.68 The Supreme Court in Texas & Pacific Railway v. Interstate Commerce Commission under discussion distinctly pointed out that this was a question of fact to be determined in each case, and a question which was

67 For a discussion of competition as affecting domestic and export lumber rates, see Industrial Lumber Co. v. St. L. W. & G. Ry., 19 I. C. C.

50.

68 In one proceeding involving export rates through different ports the Commission was of the opinion that differentials under New York on all

rail and lake-and-rail export shipments from differential territory to Baltimore should not exceed 3 cents per 100 pounds, and to Philadelphia 2 cents, on classes and commodities other than grain; Chamber of Commerce of New York v. N. Y. C. & H. R. R. R. Co., 24 I. C. C. 55.

not raised in the actual litigation. The questions whether certain charges were reasonable or otherwise, whether certain discriminations were due or undue, were questions of fact, to be passed upon by the Commission in the light of all facts duly alleged and supported by competent evidence. The mere fact that the disparity between the through and the local rates was considerable did not, of itself, warrant the court in finding that such disparity constituted an undue discrimination; much less did it justify the court in finding that the entire difference between the two rates was undue or unreasonable,-especially as there was no person, firm, or corporation complaining that he or they had been aggrieved by such disparity.69

§ 121. Limitations upon export and import rates.

That foreign business must not be unduly favored at the expense of domestic business has been expressly pointed out by the Interstate Commerce Commission.70 "The decision of the United States Supreme Court in Texas & Pacific Railway Company v. Interstate Commerce Commission, supra, has been understood in some quarters as virtually removing import and export traffic from the jurisdiction of the Commission. Such is not by any means its scope or effect. That decision simply broadened the power of the Commission in reference to such traffic. If any individual or locality feels itself aggrieved by the rates made upon export or import business as compared with domestic business, the Commission has full authority to consider and pass upon that grievance. The propriety, as a matter of fact, of the rates maintained by the Texas & Pacific Railway Company has never been upheld by the decision of any tribunal. It has

59 In a later proceeding the Commission has pointed out that the difference in rates between north Atlantic and Gulf ports may be equalized in total through rates from

foreign port to St. Louis. Memphis Freight Bureau v. B. & O. R. R. Co., 28 I. C. C. 543.

70 Kemble v. Boston & A. R. R., 8 I. C. C. Rep. 110, 115.

never been decided that that company may transport boots and shoes for the English manufacturer from New Orleans to San Francisco for one-sixth the amount charged the American manufacturer for the same service, but merely that, in determining whether such rate constitutes an unjust discrimination or an undue preference, the interest of the carrier and the consumer should be taken into account as well as that of the producer." It was accordingly held by the Commission, in the case of New York Produce Exchange v. New York Central & H. R. Railroad," that the inland portion of an export rate through New York must be no less than the inland rate from the originating point to New York. Nothing was shown in the case to justify a difference in rates; and it is no doubt the fact that no differential is needed in order to secure shipments for export through New York.

Topic B. Interstate Commerce

§ 122. What are considered States?

Commerce between an Indian reservation and other parts of the State in which it is situated is not interstate commerce.72 But commerce between the District of Columbia and the State of Maryland is interstate, and may constitutionally be so regarded.73 Thus an electric line engaging in transportation between Washington, D. C., and Laurel, Md., must file and post its tariffs.74 Likewise the Commission might establish rates from Oklahoma when it was a territory to the State of Texas.75 One-way and round-trip fares between Washington, D. C., and Virginia points being found unreasonable, the defendant was required to provide commutation rates from designated stations so long as such rates are maintained from 713 I. C. C. Rep. 138, 2 Int. Com. Rep. 553.

72 Selkirk v. Stevens, 72 Minn. 335, 75 N. W. 386, 40 L. R. A. 759.

73 Willson v. R. C. R. R.,

Rep. 83.

7 I. C. C.

74 Silvester v. C. & S. R. R. of Wash., 22 I. C. C. R. 201.

75 Corporation Com. of Oklahoma v. A. & S. Ry., 26 I. C. C. 520.

other stations under similar circumstances.76 And in another case an electric line, operating between Washington, D. C., and Virginia points being held subject to Act, its passenger rates were ordered reduced." The provision of the Act to Regulate Commerce applying to carriers transporting property "from one place in a territory to another place in the same territory," so far as it related to the Territory of Oklahoma, expired by its own force on November 16, 1907, when Oklahoma was admitted as a State.78 And since the admission of Oklahoma as a State the Commission is without power to fix rates to be observed in the future within the present limits of that State.79 The Commission at one time refused to take jurisdiction over alleged discrimination in service in Alaska, or to make orders giving relief from the conditions complained of.80 Whereupon mandamus was sought in the courts to compel the Commission to take jurisdiction; and the United States Supreme Court finally held that Alaska was sufficiently within the word "territory" used in the Act.81

$123. What constitutes commerce between the States?

The question whether a certain transaction constitutes interstate commerce must be determined by ascertaining what the real transit is, and whether that traffic is or is not between separate States. The Supreme Court of the United States 82 long ago held that whenever a commodity has begun to move as an article of trade from one State to another, commerce in that commodity between the States

76 Bitzer v. W. V. R. R., 24 I. C. C. 255.

"Beall v. W. A. & M. V. Ry., 20 I. C. C. 406.

78 Chandler Cotton Oil Co. v. F. S. & W. R., 11 I. C. C. 473.

"Haines v. Chicago, R. I. & P. R., 11 I. C. C. 214.

80 Humbolt S. S. Co. v. W. P. & Y. R., 19 I. C. C. 105.

81 Interstate Commerce Commission v. Humbolt S. S. Co., 224 U. S. 474, 56 L. ed. 308, 32 Sup. Ct. 556.

82 The Daniel Ball, 10 Wall. 557, 19 L. ed. 999.

See also No. Carolina R. R. Co. v. Zachery, 232 U. S. 248, 34 Sup. Ct. 305.

has commenced, and the fact that several different and independent agencies are employed in transporting the commodity, some acting entirely in one State and some acting through two or more States, in no respect affects the character of the transaction. And the United States Supreme Court 83 has very recently held that the Interstate Commerce Commission had jurisdiction to pass upon the reasonableness of the Denver & Rio Grande Railroad Company's freight rate from Pueblo to Leadville, both in the State of Colorado, on beer received at St. Louis by the Missouri Pacific Railroad Company to be delivered in Leadville, although no through rate or through route had been established, and although the freight was received by the first-named carrier at Pueblo as an independent shipment originating at that point, and was forwarded as an intrastate shipment on a local waybill, where all this was in accordance with a long-continued course of dealing between the two carriers under which they divided the freight according to their local rates, with the knowledge that it had been paid as compensation for the single haul.

§ 124. Traffic in movement between States.

It follows that, even under the proviso in Section 1 of the Act, to the effect that its provisions shall not apply to the transportation of passengers or property wholly within one State and not shipped to or from a foreign country from or to any State or Territory, a carrier participating in the movement of interstate commerce is not exempted from the Act by the fact that in handling its portion of the haul it operated wholly within one State. It is the essential character of the commerce, not its mere incidents, that determine whether or not it is interstate.84

83 Baer Bros. Mercantile Co. v. Denver & R. G. Ry. Co., 233 U. S. 479, 34 Sup. Ct. 641.

See also Railroad Commission of

La. v. Texas & P. Ry., 229 U. S. 336, 57 L. ed. 1215, 33 Sup. Ct. 9.

84 Aransas P. C. & D. Co. v. G. H. & S. A. Ry. Co., 27 I. C. C. 403,