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(Points DECIDED BY THE COMMISSION DURING THE YEAR.) Edward G. Davies v. The Pere Marquette Railroad Company and The Michigan

Central Railroad Company. (10 I. C. C. Rep., 405.) 1. Complainant alleged the collection by defendants of charges in excess of the

tariff rate on certain shipments of fruit from Michigan points to Chicago, and an unlawful contract with a delivering agent in Chicago, and thereupon complainant insisted that defendants had been guilty of penal offenses under the law which should be reported for prosecution. The complainant disclaimed at the hearing any demand for damages or reparation. The facts show errors in charges arising from lack of knowledge by the agent at Chicago of the kind of package used, or the actual contents of the package shipped to complainant, the shipments having been unloaded by complainant, and also from a practice by the agent of the initial carrier at one point temporarily used as a receiving station for fruit, of making a charge in addition to the freight rate without the knowledge of the railroad company. The compensation paid to the delivering agent in Chicago for unloading and handling the freight in that city was apparently reasonable. Held, upon consideration of the evidence, that defendants were not

guilty of any wilful or intentional violation of the law. Wm. Wrigley, jr., v. The Cleveland, Cincinnati, Chicago & St. Louis Railway Com

pany; The Chicago, Indianapolis & Louisville Railway Company; The Pennsylvania Company; The Pittsburgh, Cincinnati, Chicago & St. Louis Railway Company; The Chicago & Eastern Illinois Railroad Company; The Illinois Central Railroad Company; The Louisville & Nashville Railroad Company; The Southern Railway Company; The Mobile & Ohio Railroad Company; The Central of Georgia Railway Company; The Chesapeake & Ohio Railway Company; The Seaboard Air Line Railway, and The Atlantic Coast Line Railroad Company. The CowartLofton Company, intervener. (10 I. C. C. Rep., 412.) 2. Defendants' rule, providing that the minimum charge upon any single shipment

of freight shall be for 100 pounds at the class or commodity rate applying upon the article, which is in force in the territory roughly described as south of the Ohio and Potomac and east of the Mississippi rivers, and also on traffic shipped to that territory from points in the Central West, held, upon the facts in this case, not to be unreasonable or unjustly discriminating in its application to complainant's traffic. No opinion expressed as to the

legality of the rule upon traffic generally. Paxton Tie Company v. Detroit Southern Railroad Company. (10 I. C. C. Rep.,

422.) 3. Between December 16, 1902, and April 6, 1903, defendant unjustly discrimi

pated against complainant in furnishing cars for the shipment of cross ties by refusing to provide any cars for such shipments by complainant while it did furnish cars to other persons for the interstate shipment of lumber, stone, and many other freight articles, and also supplied cars for the shipment of cross ties destined almost entirely for its own use. Reparation in

the sum of $630 awarded to complainant. The Chicago Live Stock Exchange v. The Chicago Great Western Railway Company;

The Atchison, Topeka & Santa Fe Railway Company; The Burlington, Cedar Rapids & Northern Railway Company; The Chicago, St. Paul, Minneapolis & Omaha Railway Company; The Chicago & Alton Railway Company; The Chicago & North Western Railway Company; The Chicago, Burlington & Quincy Railroad Company; The Chicago, Milwaukee & St. Paul Railway Company; The Chicago, Rock Island & Pacific Railway Company; The Hannibal & St. Joseph Railroad Company; The Illinois Central Railroad Company; The Iowa Central Railway Company; The Kansas City, St. Joseph & Council Bluffs Railroad Company; The Minneapolis & St. Louis Railroad Company; The Missouri Pacific Railway Company; The Missouri, Kansas & Texas Railway Company; The Omaha, Kansas City & Eastern Railroad Company; The St. Louis & San Francisco Railroad Company; The Wabash Railroad Company, and The Wisconsin Central Railway Company. The Railroad & Warehouse Commissioners of the State of Minnesota; The St. Paul Union Stock Yards Company of St. Paul, Minnesota; The South St. Joseph Live Stock Exchange; The Union Stock Yards Company of Omaha, Nebraska; The Sioux City Stock Yards Company, and the Sioux City Live Stock Exchange of Sioux City, Iowa, interveners. (10 I. C. C. Rep., 428.) 4. The complainant, an incorporated association, is entitled under section 13 of the

act to regulate commerce to bring and maintain a proceeding of this

character. 5. The defendant, the Atchison, Topeka & Santa Fe Ry. Co., removed the discrimi

nation complained of as to its lines, and it appeared that the defendant, the St. Louis & San Francisco Railroad Co., does not participate in the

rates in question. Complaint as to those lines dismissed. 6. Defendants exact higher rates for transporting cattle and hogs than for trans

porting live-stock products to Chicago from points west, northwest, and southwest thereof, including Missouri River points and South St. Paul, Minn. Upon all the facts and circumstances, Held, That such discrimination is not justified by difference in cost of transportation or otherwise, and subjects the traffic in cattle and hogs at Chicago and other points, and those interested therein, to undue and unreasonable prejudice and disadvantage, and gives to the traffic in the products of hogs and cattle, and to shippers and localities interested in such traffic, undue and unreasonable preference and advantage, in violatiou of the act to regulate commerce. Chicago Board of Trade v. Ć. A. & R. Co. (4 I. C. C. Rep., 158) reaffirmed and the principle therein announced extended to the transportation of cattle and their products. That the desire of a carrier to secure additional business for its line of road does not justify a change in the relation of rates resulting in a higher rate upon cattle and hogs, the raw material, than upon live-stock product, the manufactured article, where, as in this case, the articles are in sharp competition with each other in markets of purchase and sale, where it appears that upon other lines and in other sections rates are generally no higher, and in many instances much lower, on the traffic prejudiced than on that favored by the change, and where numerous and important industries, which have been built up and maintained under the former adjustment, and those interested in such

industries, will be injuriously affected by the action taken. Mershon, Schuette, Parker & Company v. The Central Railroad Company of New

Jersey and The Pennsylvania Railroad Company. (10 I. C. C. Rep., 456.) 7. Defendants' rates for transporting lumber in carloads to points on the New York

& Long Branch Railroad are made by adding to the rate to New York, N. Y., an arbitrary charge of 5 cents per 100 pounds when the shipping point is Saginaw, Mich., but only 2 cents per 100 pounds when the shipping point is Buffalo, N. Y. Water competition between Buffalo and New York affects the rates to New York, but it justifies no wider difference in the rates from Saginaw and Buffalo to these interior destinations than exists in the rates from these shipping points to New York. Held, That

the discrimination is undue and in violation of the act to regulate commerce. The Lehman-Higginson Grocer Company, The Wichita Wholesale Grocery Company,

The Aylesbury Mercantile Company, and W. E. Jett and Frank C. Wood, copartners doing business under the name and style of Jett & Wood v. The Atchison, Topeka & Santa Fe Railway Company, The Chicago, Rock Island & Pacific Railway Company, The St. Louis & San Francisco Railroad Company, The Missouri Pacific Railway Company, The Illinois Central Railroad Company, The St. Louis, Iron Mountain & Southern Railway Company, and The Texas & Pacific Railway Company. Ryley-Wilson Grocer Company and Nave-McCord Mercantile Company, interveners. (10 I. C. C. Rep., 460.) Complainants alleged that defendants having in effect on sugar in carloads from

New Orleans rates per hundred pounds which were 25 cents to Wichita and 20 cents to Kansas City and other Missouri River points, increased those rates to 47 cents to Wichita and 32 cents to Missouri River points, thereby increasing the differential as between Wichita and Kansas City from 5 cents to 15 cents per hundred pounds, and that the new rates were, as against Wichita, unjust and unreasonable in themselves and relatively; and it was further alleged that new advanced rates from other points of origin imposed the same differential as between Wichita and Kansas City, and that, as against Wichita, those rates were also unlawful. Wichita and Kansas City compete for the sale of sugar in common competitive territory. The competitive conditions applying in the transportation of this traffic to Wichita and Kansas City are stated and found not to justify the 15-cent differential against Wichita, and the existing rates to Wichita

are excessive. Held: 8. That the rate of 47 cents on sugar from New Orleans to Wichita is unreasonable. 9. That the present differential of 15 cents applied at Wichita above Kansas City

on shipments of sugar from the Atlantic seaboard and New Orleans subjects Wichita to undue discrimination; and such differential should not

be more than 8 cents per 100 pounds. 10. That as to traffic passing through Wichita to Kansas City the rule laid down

in Johnston-Larimer D. Co. v. A., T. & S. F. Ry. Co., 6 I. C. C. Rep., 586, forbidding any higher charge to Wichita than to Kansas City on shipments from Galveston, is, in the light of decisions of the United States Supreme Court, no longer applicable, and defendants operating lines through Wichita to Kansas City are not prohibited from charging a higher rate on sugar to Wichita than to Kansas City so long as the Wichita rate

is reasonable. In the matter of alleged unlawful rates and practices in the transportation of coal

and mine supplies by the Atchison, Topeka and Santa Fe Railway Company. (10 I. C. C. Rep., 473.) 11. The act to regulate commerce, which requires carriers to publish and adhere to

their tariffs, has been grossly and continuously violated by the Atchison, Topeka and Santa Fe Railway Company during the last five years in the following respects: It published rates on interstate shipments of coal from mines in Colorado and New Mexico which, under the tariffs, applied only to the transportation thereof, but which for the Colorado Fuel and Iron Company were made by the railway company to include the price of the coal, and such price was paid to the fuel and iron company by the railway company. While giving rebates to the fuel and iron company from such tariff rates, it charged the full tariff rates on interstate shipments of coal by other shippers in not only the general coal region involved, but in the same coal field. This practice of the railway company resulted in closing markets for coal to shippers competing with the Colorado Fuel and Iron

Company. 12. The act of February 19, 1903 (the so-called Elkins law), which prohibits car

riers from transporting traffic until a tariff has been published, requires observance of the tariff, provides a penalty for each violation of not less than $1,000 nor more than $20,000, and applies both to the carrier and the party receiving the concession, has, respecting the transportation involved in this proceeding, been systematically and continuously violated by the Atchison, Topeka and Santa Fe Railway Company and the Colorado Fuel and Iron Company from the day of its passage down to November 27, 1904, when the tariffs upon which this coal moved were reduced in all cases $1.15; and this notwithstanding the Atchison, Topeka and Santa Fe Railway Company has, in a suit begun in the United States circuit court at the instance and request of this Commission, been under injunction since

March 25, 1902, to observe in all respects its published schedules of rates. Duluth Shingle Company v. Duluth, South Shore & Atlantic Railway Company;

Chicago, St. Paul, Minneapolis & Omaha Railway Company; Northern Pacific Railway Company; Great Northern Railway Company; and Chicago, Milwaukee, & St. Paul Railway Company. (10 I. C. C. Rep., 489.) 13. The defendants, by charging a higher rate on shingles than on lumber, in car

loads, from Duluth, Minn., to Chicago, Ill., unjustly discriminate against shingles in favor of lumber, subject Duluth and complainant and other shingle shippers from that point to undue prejudice and disadvantage, and afford undue preference and advantage to other places from which shingles

are carried at rates as low as those applied on lumber therefrom. The Central Yellow Pine Association v. The Illinois Central Railroad Company; The Gulf & Ship. Island Railroad Company; The Southern Railway Company; The Mobile & Ohio Railroad Company; The New Orleans & North Eastern Railroad Company; The Alabama Great Southern Railroad Company; The Cincinnati, New Orleans & Texas Pacific Railway Company; The Alabama & Vicksburg Railway Company; The Louisville & Nashville Railroad Company; The Mobile, Jackson & Kansas City Railroad Company. (10 I. C. C. Rep., 505.)

Complaint was made of an advance by defendants of 2 cents per 100 pounds on

April 15, 1903 (except as to the L. & N. R. Co., as to which the advance became effective June 22, 1903), in the rates on lumber in carloads from points in lumber-producing territories east of the Mississippi River in Louisiana, Mississippi, and part of Alabama served by defendant roads, to Ohio River points, applying both on shipments locally to such Ohio River points and to shipments destined beyond. On September 9, 1899, the rate previously in effect from May 1, 1894, was advanced 1 cent, making a total advance of 3 cents since May 1, 1894. The rates prior to the advance

on April 15, 1903, were remunerative to the defendant carriers. Held: 14. That when a railroad company advances a rate which has been for some time

in force, the fact of its continuance is in the nature of an admission against that company which tends to show the unreasonableness of the advance; and in this case the rates in effect for long periods prior to the advance are

shown to have been profitable to the defendant carriers. 15. That the test of the reasonableness of a rate is not the amount of profit in the

business of the shipper or manufacturer, but whether the rate yields a reasonable compensation for the services performed. Carriers necessarily and justly participate in the prosperity of their patrons in the resultant

enlargement of their own business. 16. That the advance in rates by defendants was not justified by increased cost of

operating the roads, for while the operating expenses have constantly increased they have been enlarged by the inclusion therein of large expenditures for permanent improvements, and defendants' gross earnings have increased from year to year to such extent as to result in a constant

increase of net earnings. 17. That the value of the entire property of a road employed for the public con

venience can shed but little, if any, light upon the question whether the rate on one among thousands of articles of traffic yields its proper proportion of a fair return upon that value; and moreover, the voluminous and conflicting testimony in this case on that subject does not enable the Com

mission to determine the value of defendants' respective properties. 18. That the elements to be considered in determining the reasonableness of an

entire system of rates are widely different from those involved in the ques

tion of the reasonableness of the rate upon a single commodity. 19. That the advance of rates complained of in this case was the result of concerted

action by defendants and other carriers; and while the question whether such concert of action is in violation of the “antitrust act” is for determination only by the courts, it is the province and duty of this Commission, when the reasonableness of rates is in issue before it, to consider whether the advanced rates resulted from untrammeled competition or

were fixed by concert of action or combination of carriers. 20. That the rates in effect prior to the advance were reasonably high when com

pared with the rates on other commodities which are at all analogous to lumber in respect to value, volume, and the various conditions affecting

the service of transportation. 21. That carriers have no right to advance a rate which is already reasonably high

and which yields an adequate return for the services rendered solely

because additional revenue is needed. 22. That logging roads, or “tap lines,” to which the defendant M. & O. R. Co.

grants allowances from its published rates, are not common carriers, but such tap lines are the private properties of mill owners, and the allowances are therefore unlawful. Cent. Yellow Pine Assn. v. V. S. & P. R. R. Co.

(10 I. C. C. Rep., 193), cited and applied. 23. That section 3 of the act to regulate commerce, which prohibits undue prefer

ences as between individuals or localities, is not violated by the failure or refusal of defendants to make "tap-line" allowances to mill owners in their territory while such allowances are granted to mill owners by other other carriers in the territory west of the Mississippi; but if the rate west of the Mississippi River, minus the allowance, is reasonable, it tends to support the proposition that a similar reduction east of the river would leave the rate reasonably high; and the M. & 0. R. Co., by voluntarily making such allowances east of the river, practically concedes this propo

sition as to itself. 24. That no rule is more firmly grounded in reason or more universally recognized

by carriers than that the greater the tonnage of an article of traffic the lower should be the rate, but defendants have made yellow-pine lumber an exception to this rule.

25. That lumber rates should be relatively low, in view of the fact that lumber is

is inexpensive freight and few other commodities furnish to carriers so large a tonnage; that the lumber business is constant, yielding carriers revenue all the year; that no special equipment is constructed or furnished for its carriage; that it is loaded by shippers and unloaded by consignees, and where open cars are furnished the shipper is required, at considerable expense, to equip them so as to protect the lumber and the train, and that

there is small risk and in case of accident the damage is insignificant. 26. That the advance on April 15, 1903, of 2 cents per 100 pounds in the rate from

the shipping points in question to the Ohio River was not warranted, and

that the resultant increased rates are unreasonable and unjust. H. H. Tift, W. S. West, J. Lee Ensign, J. S. Betts & Company, Garbutt Lumber Com

pany, Alapaha Lumber Company and Southern Pine Company v. Southern Railway Company; Atlantic Coast Line Railroad Company; Louisville & Nashville Railroad Company; Nashville, Chattanooga & St. Louis Railway Company; Seaboard Air Line Railway; Central of Georgia Railway Company; Georgia Southern & Florida Railway Company; Macon & Birmingham Railway Company; and the Southeastern Freight Association and S. F. Parrott, chairman of said Southeastern Freight Association. (10 I. C. C. Rep.548.) Defendants made effective on June 22, 1903, an advance of 2 cents per 100 pounds

over rates previously in effect from Georgia points to Ohio River destinations on lumber in carloads, whether shipped locally to said Ohio River points or shipped beyond. The rates prior to that date were in effect from September 8, 1899, on which date an advance was made of 1 cent from Group 2 points on the Southern Railway, and of 2 cents from most other grouped shipping points in Georgia over rates in force May 17, 1894. From the various groups the present advanced rates to Cincinnati, Louisville, and Evansville are, as to some, 4 cents higher than in 1892, and as to others, 3 cents higher than in 1891. The rates prior to the advance

complained of were remunerative to the carriers. Held: 27. That complainants, constituting only a small portion of the membership of the

Georgia Saw Mill Association, which is alleged by defendants to be an unlawful association, were entitled to bring and maintain this proceeding in their own behalf and in the interest of all shippers of the traffic

involved and others constituting the public at large. 28. That the advance of rates complained of in this case was the result of concerted

action by defendants and other carriers; and while the question whether such concert of action is in violation of the "antitrust act” is for determination only by the courts it is the province and duty of this Commission, when the reasonableness of rates is in issue before it, to consider whether the advanced rates resulted from untrammeled competition or

were fixed by concert of action or combination of the carriers. 29. That where an advance is made in rates which have been long maintained,

and the evidence shows that the traffic affected is large, important, and constantly increasing, the advance will be held unjust, unless it is satis

factorily explained. 30. That the test of the reasonableness of a rate is not the amount of profit in the

business of the shipper or manufacturer, but whether the rate yields a reasonable compensation for the services performed. Carriers necessarily and justly participate in the prosperity of their patrons in the resultant enlargement of their own business, and no rule is more firmly grounded in reason, or more universally recognized by carriers, than that the greater

the tonnage of the article transported the lower should be the rate. 31. That if permanent improvements are not included in the operating expenses

of defendants, and if only such expenditures for equipment as are properly chargeable to a single year are included, the percentages of operating

expenses to gross earnings will be materially reduced. 32. That carriers have no right to advance a rate which is already reasonably high

and which yields an adequate return for the service rendered, solely because additional revenue is needed. The mere fact of the need of additional revenue to meet increased expenses does not justify the advance in rates on these lumber shipments from Georgia to and beyond the Ohio River, which are, for the most part, of low grade and comparatively small value.

H. Doc. 195, 59-1-8

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