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than existed in the rates from these shipping points to New York. The discrimination was held to be undue and in violation of the act to regulate commerce.
Harrisburg Milling-in-Transit case.-In W. J. Koch and H. W. Koch v. Pennsylvania Railroad Company and Pittsburg, Cincinnati, Chicago & St. Louis Railway Company (10 I. C. C. Rep., 675), it was held that shippers are not entitled as a matter of right to mill grain in transit and forward the milled product under the through rate in force on the grain from the point of origin to the place of ultimate destination; but allowance of the privilege by a carrier to shippers in one section must be without wrongful prejudice to the rights of shippers in another section served by its line.
It was further decided that, considering the defendants as a single line, the granting of transit milling west of Pittsburg and denying it to millers at Harrisburg was not necesarily unlawful, because conditions on that line in Ohio and Indiana might be very different from the conditions in eastern Pennsylvania, and it did not follow that the allowance of transit privileges in the former territory requires as a matter of law the like allowance in the latter territory; but such differences were not shown nor their bearing explained by the testimony in this proceeding, and upon the meager and incomplete facts appearing the Commission was not warranted in making a decision which in principle, if complainants' contention was well founded, would involve a general extension of transit privileges into a large territory where theretofore such privileges had not been allowed. The case was continued for further hearing, but no application therefor has been made.
Miscellaneous cases.—The Charlotte (N. C.) Shippers' Association had instituted two cases—one against the Southern Railway Company et al. and the other against the Seaboard Air Line Railway et al.--and these cases were decided by the Commission in June last. (11 I. C. C. Rep., 108). Freight rates to Charlotte, N. C., from New York and other northern and eastern points, and from Louisville, Chicago, and other western points, were complained of as unjust, and those from the West as greater for the shorter distance to Charlotte than for the longer distances through Charlotte to more distant localities. The freight rates to Charlotte are made by combining rates to Lynchburg and other Virginia cities with the local rates from those cities to Charlotte.
Competition forces low rates to the Virginia cities and also compels the low rates in force from the west to certain points east of Charlotte. If through rates to Charlotte lower than the combination of charges to and from the Virginia cities were established, the disadvantage now resulting to Charlotte dealers in their competi
tion with dealers at Virginia cities would to that extent be removed, and the carriers were recommended to consider taking such action, but in the absence of a showing that the present through charges are unreasonable the Commission was without authority to require discontinuance of the charges now exacted. After citing decisions of the courts, it was held that the facts presented do not constitute the basis for an order of relief which could be enforced, and therefore the complaints must be dismissed.
The case of George M. Spiegle & Co. v. Chesapeake & Ohio Railway Company and Pennsylvania Railroad Company was decided in October (11 I. C. C. Rep., 367). On complaint that defendants' rates on oak lumber in carloads to Philadelphia were unlawfully higher from Afton, Va., and points east thereof, to and including Gordonsville, Va., than those for the longer distances over the same line from Staunton and Basic City, Va., it appeared that a rate of 14 cents per 100 pounds applied over the whole territory for a period of about nine years between November 1, 1892, and August 1, 1901. Effective competition was shown by defendants' witnesses at Basic City and Staunton, and complainants failed to offer any testimony. It was held that the higher rate from the Afton-Gordonsville group does not constitute unlawful discrimination. The complainants were allowed reparation for conceded erroneous charges on two carloads of oak lumber.
A case brought by the Bureau of Freight and Transportation, of Charleston, S. C., against the Norfolk & Western Railway Company, et al., involved the reasonableness and justice of freight rates from Chicago, St. Louis, Louisville, and other Ohio River and Mississippi River points. This case was similar to and was held to await the final disposition of the case of Wilmington Tariff Association v. Cincinnati, P. & V. R. Co., et al. (9 I. C. C. Rep., 118), in which proceeding the Commission entered an order requiring correction of rates from the same points to Wilmington, N. C., but such order the United States circuit court declined to enforce. During the present year the rates from Chicago to Ohio River crossings were materially reduced on shipments destined to southeastern points, resulting in reduction of through rates from Chicago to Charleston and Wilmington. In view of the decision of the circuit court in the Wilmington case no enforceable order for relief coulc be predicated upon
the facts shown in this case, and the complaint was dismissed (11 I. C. C. Rep., 235).
In Rock Hill Buggy Company v. Southern Railway Company and Seaboard Air Line Railway (11 I. C. C. Rep., 229), it was decided that the rate of $1.30 per 100 pounds on buggies in carloads from Rock Hill, S. C., to Tallahassee, Fla., was not shown to be unreasonable, and under the construction placed upon section 4, or the long
and short haul clause of the statute, by the United States Supreme Court, competition by the Atlantic Coast Line justified defendants' lower rate of $1.10 for the longer distance to Quincy, Fla.
DISCRIMINATION BETWEEN COMMODITIES.
Planters' Compress Company case.- In the case of the Planters' Compress Company v. Cleveland, Cincinnati, Chicago & St. Louis Railway Company et al., decided by the Commission in October (11 I. C. C. Rep., 382), which involved an alleged discrimination between cotton shipped in round and square bales, and which is for convenience treated under this heading, it was shown that cotton is transported by defendants and carriers generally at the same rate per hundred pounds, whether shipments are made by the carload or in less quantities. The usual shipment weighs about 25,000 pounds when the common method of square-bale compression is used, though considerably greater weight may be loaded in the ordinary car. The round-bale process permits the shipment of 45,000 pounds or more per car, and complainant asked a ruling which would in effect require one rate on cotton as ordinarily loaded, and a lower rate based upon a carload minimum of 45,000 pounds or more.
The reasonableness of the defendants' rates as applied to all cotton was not questioned, and the sole object of this proceeding was a carload differential based upon a high carload minimum, which could not be complied with by shippers using the square-bale process without considerable difficulty and greater expense. The cotton grower would benefit by a general reduction of cotton rates, but no advantage would result to either the cotton grower or the middleman from such a differential, and complainant's proposal would not advance the interests of the public. After considering all the conditions and circumstances, including the effect of the proposed differential upon carriers from producing territory as well as defendants, the following rulings were made in this case:
No classification can be so minute as to conform to the differing varieties and conditions of traffic, and to separate different grades or densities of the same article into different classes with varying rates, even if it could be accomplished, would go far to defeat the real purpose of classification. If the rate on an article is reasonable to those who ship the great bulk of that article in the form in which it is commonly prepared for transportation, that rate does not become unreasonable to the shipper of a small quantity of the same article merely because he chooses to prepare his shipments in a form which affords the carrier a greater profit per hundred pounds, particularly when the preparation of that article in the more profitable form would impose some degree of hardship upon a large majority of shippers because of its greater expense or for other reasons. While carriers may lawfully establish carload and less than carload rates on cotton, with a reasonable difference between the two rates and a reasonable carload minimum securing to shippers generally the lower carload rates, it does not follow that they are bound to do so, much less that they can be required to establish a differential based upon an unusual carload minimum. Defendants' refusal to grant lower rates on cotton in carloads of 45,000 pounds or more was not a violation of the regulating statute.
The Live Stock and Live-Stock Product case.—The case brought by the Chicago Live Stock Exchange against the Chicago Great Western Railway Company et al., decided in January last (10 I. C. C. Rep., 428), involved the exaction of higher rates for transporting cattle and hogs than for transporting live-stock products to Chicago from points west, northwest, and southwest thereof, including Missouri River points and South St. Paul, Minn. It was held by the Commission that such discrimination was not justified by difference in cost of transportation or otherwise, and subjected the traffic in cattle and hogs at Chicago and other points, and those interested therein, to undue and unreasonable prejudice and disadvantage, and gave 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 violation of the act to regulate com
The decision in Chicago Board of Trade v. C. & A. R. Co. (4 I. C. C. Rep., 158), was reaffirmed and the principle therein announced extended to the transportation of cattle and their products. It was further held 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 products, 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 whero 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.
This case arose from the action of the Chicago Great Western Railway Company in entering into a contract with packers doing business at Missouri River points under which that company established and put in force lower rates on live-stock products than on live stock. The contract provided that the rates should remain in force seven years and that the packers should deliver to the Chicago Great Western a certain percentage of their traffic in the products, or, upon failure to do so, pay it each month, by way of liquidated damages, an agreed amount for each car short of the agreed percentage. The rates put in effect by the Chicago Great Western were also established by the other interested carriers. Subsequently the Atchison, Topeka & Santa Fe removed the discrimination in rates as between live stock and live-stock products, and it was dismissed from the proceeding before the Commission. The carriers refused to obey the order issued by the Commission and suit to enforce it was instituted in the United States circuit court for the northern district of Illinois. That court has recently rendered a decision dismissing the petition of the Commission. This decision is referred to elsewhere in this report.
The Corn and Corn-Products cases.-Upon complaint of millers on or near the Missouri River the Commission instituted in March last three investigations of relative rates on corn and corn products from Missouri River points. One relates to points in Texas, another to points in Louisiana, and the other to Pacific coast destinations. These cases were all decided in August.
In the case involving rates to Louisiana points (11 I. C. C. Rep., 227), it appeared that prior to July 1, 1905, rates per 100 pounds from Missouri River points were 5 cents higher on corn meal than on corn, but on that date the differential was removed by the carriers and the rates on corn and corn meal made the same. Such action having obviated the complaint, no order was considered necessary.
In the case relating to the rates on corn and corn products from the Missouri River to points in Texas (11 I. C. C. Rep., 220), it appeared that up to February 19, 1905, the rate on corn meal was 3 cents per 100 pounds higher than the rate on corn for shipments between the points named. On that date the differential against corn meal was advanced so that it varied from 7 to 91 cents. On April 15 the differential was made 5 cents for all Texas destinations. The differential for hominy grits and bran remained at 3 cents. It was ruled that the differential on corn meal shipped from Missouri River points to Texas destinations should not be more than 3 cents above the rate on corn in force between the same points.
In the case relating to the rates on corn and corn products from the Missouri River to points in Washington, Oregon, and California (11 I. C. C. Rep., 212), the following general situation was disclosed : The relation of rates on corn and corn products from Missouri River points to California terminals was for about one year after January 1, 1890, a differential of 9 cents against corn products. Then, for about one and a half years it was 9 cents in favor of corn products. The rates were the same between July, 1892, and March, 1895, when a differential of 5 cents against corn products was established. In