case adverse to the defendant the rates to and from Danville must be held unreasonable in and of themselves. If reasonable, they cannot be held to subject Danville to an undue prejudice, or to give Lynchburg an undue preference, merely because the Lynchburg rates are considerably lower. * * * Whether or not the Danville rates are reasonable per se is a question that has given me no small amount of trouble. * **The effect of the present rates on the growth and prosperity of Danville is worthy of careful consideration. *** If the testimony for the complainant had shown that Danville had not prospered as it should have done, or that its trade territory had been reduced, in comparison with other cities where competition had not produced unusually low rates, and where the circumstances are otherwise similar to those at Danville, it would be proper to conclude from such testimony that the Danville rates are too high. But such testimony was not offered. * * * It is difficult to conceive of any interest that the defendant could have to unduly prefer Lynchburg and oppress Danville, for the defendant has practically the whole of the transportation to and from Danville, and only a portion of that to and from Lynchburg. * * * If we consider the income derived from the whole system of the Southern Railway Company, there is no doubt left by the evidence that its earnings are rather less than a fair return. * The inconclusive and unsatisfactory results, and the inherent difficulties in applying the above mentioned tests, have led me to the conclusion that the most satisfactory test to be applied in this case is to compare the Danville rates with those in force at numerous other cities and

**

towns in the South, where the circumstances are as nearly as may be similar to those at Danville. * * * The result of comparison between these rates and the Danville rates is the conclusion that the latter compare favorably with the former. * As judged, then, by this last test, I am led to the conclusion that the Danville rates are not unreasonably high."

The Circuit Court, therefore, refused to enforce the Commission's order. This refusal was affirmed by the Circuit Court of Appeals, which, after quoting approvingly from the opinion of the Circuit Court, said, in part:

"It being, therefore, ascertained that the low rates to Lynchburg and Richmond are due to active, legitimate competition, and that the local rates charged by the Southern Railway Company, from Lynchburg to Danville are not within themselves unreasonable, we are of the opinion that the principles of law as above stated apply, and the judgment of the Circuit Court is affirmed."

An appeal to the Supreme Court, in this case, pending.

is now

Savannah Naval Stores Case.*

I

"It is not so much the difficulty of the law as it is of its administration. * The Commission * think, has put on the robes when, perhaps, it ought to have worn the overalls."-Judge Grosscup, speech before Economic Club of Boston, on March 11, 1905. Reported in 'Freight" for April, 1905.

In this case the Circuit Court directed obedience to the Commission's order and the defendant railways did not appeal.

Wilmington Case.t

"There are sufficient reasons for dissimilarity in rates."-Decision of the Circuit Court in this case.

The complainant before the Commission alleged that the defendant's rates for the transportation of freight from

* Savannah Bureau of Freight and Transportation et al. vs. Louisville & Nashville Railroad Company et al.; Interstate Commerce Commission (8 Inter. Com. Rep. 377), decided January 8, 1900. Interstate Com merce Commission vs. Louisville & Nashville Railroad Company et al.; Circuit Court, Southern District of Georgia, Eastern Division (118 Fed. Rep. 613), decided July 1, 1902.

†The Wilmington Tariff Association of Wilmington, North Carolina, vs. The Cincinnati, Portsmouth & Virginia Railroad Company et al.; Interstate Commerce Commission (9 Inter. Com. Rep. 118), decided December 17, 1901. Interstate Commerce Commission vs. Cincinnati Portsmouth & Virginia Railroad Company et al.; Circuit Court, Eastern Division of North Carolina (124 Fed. Rep. 624), decided August 10, 1903

Louisville, Cincinnati, St. Louis, Chicago and other points of shipment to Wilmington, North Carolina, were unreasonable and unjust as compared with those from the same points of shipment to Norfolk, Richmond and other Virginia cities. It was alleged that in order not to subject Wilmington to undue prejudice and disadvantage within the meaning of the law, there should be such an adjustment, as between Norfolk and Wilmington, that either rates should be the same to both ports or that the differences should be in proportion to the short line distances or upon a differential basis. The defendants contended that the circumstances and conditions controlling rates at Wilmington and at Norfolk were substantially dissimilar and that while water competition decreases the rates of both ports it is much stronger at Norfolk. The Commission concluded that the rates from Cincinnati and Louisville to Wilmington were not unreasonable as compared with those from the same points to Norfolk, but that the adjustment as between St. Louis, East St. Louis, Chicago and Wilmington on the one hand, and St. Louis, East St. Louis, Chicago and Norfolk on the other, was unduly disadvantageous to those doing business at Wilmington. Its order was that the rates from the three points named should be relatively reasonable and just, and that those from East St. Louis to Wilmington should not exceed 135 per cent of the rates contemporaneously charged from East St. Louis to Norfolk. Issuance of this order was

suspended for forty days after service of the report and opinion of the Commission upon the defendant carriers in order that they might have opportunity to make the adjustment recommended and they were directed in the meantime to file a report of their action with the Commission. The Circuit Court refused to enforce the order of the Commission and the following are extracts from its opinion:

"If competition controls rates-and there is no contention that it should not and does not-Norfolk and Richmond are territorially located to be entitled to trunk line rates, which have been extended to that territory. * * * This trunk line rate is not shown to have been extended to Norfolk and Richmond from any disposition to favor these points or prejudice Wilmington, but on account of the competition referred to, * the competition at Wilmington, with one line of steamers and two systems of railroad, is not near so great, active and sharp. If the rule established by the courts in the case cited and others *** be applied, there are sufficient reasons for dissimilarity in rates, *** competition fixes freight rates, as it gives life to commerce. * * * As pointed out, the territory north and west of the Ohio river is in a sharply contested section for freights-in the 'trunk line' territory, which has been extended to include Norfolk and Richmond, with their several competing carriers by rail and water— a geographic, traffic and commercial advantage which Wilmington does not enjoy. The one favored more by natural and artificial (constructed) lines of traffic; both enjoying in