"The facts *

San Bernardino Case.*

are widely different from those set out in the report of the Commission."-Decision of the Circuit Court in this case.

In this case the Board of Trade of San Bernardino contended that the higher charges from New York, Cincinnati, Detroit, Chicago, and St. Louis to San Bernardino, than from the same points, over the same lines, to Los Angeles, a more distant point, were in violation of the Fourth section, or long and short haul clause of the Interstate Commerce law. This clause forbids higher charges to intermediate than to more distant points on the same line in the same direction when the transportation to the points compared is contemporaneous and is undertaken under "substantially similar circumstances and conditions." The defendant alleged that the lower charge to Los Angeles was justified by dissimilar conditions growing out of water competition at that point which did not exist at San Bernardino. The Commission decided in favor of the com

*The San Bernardino Board of Trade vs. The Atchison, Topeka & Santa Fe Railroad Company et al.; Interstate Commerce Commission (4 I. C. C. Rep. 104), decided July 19, 1890. Interstate Commerce Commission vs. Atchison, Topeka & Santa Fe Railroad Company et al.; Circuit Court Southern District of California (50 Fed. Rep. 295), decided April 25, 1892.

plainant, denying the existence of actual water competition at Los Angeles, and declaring that potential competition could not be made to justify an exception to the groundrule of the Fourth section. Its order required the discontinuance of the existing relation on September 1, 1890. It would have been satisfied either by a reduction of the San Bernardino rates or by advancing the Los Angeles rates.

As this order was not obeyed the Commission appealed to the Circuit Court for its enforcement. The Court decided adversely to the Commission. In its opinion it declared that:

"The common carrier cannot be required to ignore or overcome existing differences in the transportation facilities of different localities, created, not by its own arbitrary action, but by nature or by enterprises beyond its control."

The defendant before the court contended that the Commission's findings of fact did not accurately portray the real conditions which controlled the transportation to Los Angeles and San Bernardino, respectively, and the court declared that with respect to the water competition at Los Angeles, the facts were "widely different from those set out in the report of the Commission." After quoting at length testimony which clearly establishes the existence of actual water competition, of controlling force and amount, at Los Angeles, the court said:

"The testimony in the case is altogether too voluminous to refer to in detail, but I think it is safe to say, generally, that it shows that the water carriers mentioned are now, and that some of them for years past have been, competing with the overland railroads for the carriage of general freight, including the commodities mentioned in the petition, from the cities and country east of the Missouri river to the Pacific coast, including the city of Los Angeles; that they are and have been actively engaged in such transportation, soliciting the freight and carrying what they can get; and that they actually do carry an important part of many of the commodities mentioned in the petition.

"The fact that such means of transportation actually exist, and is actually and actively seeking the traffic, constitutes competition, and was doubtless one of the most important factors in making Los Angeles a terminal point. Not only does the evidence show that such water competition exists, but it shows that the shipments by water are increasing; and a number of the witnesses testify that, in the event the all-rail rates should be increased from what they are now, it would result in much larger shipments by water, both in quantity and kind. For the reason stated I am of the opinion that the circumstances and conditions attending the transportation of the commodities in question to Los Angeles and San Bernardino are essentially dissimilar, and, therefore, that the long and short-haul clause of the Interstate Commerce act does not apply to the case. As has been said, it is not claimed that the rates to San Bernardino are otherwise unjust or unreasonable."

The Coxe Case.*

"The Commission's estimate * * rests upon an erroneous principle and is unreliable.”—Decision of the Circuit Court in this case.

The object of the original complaint in this case was to secure a reduction in the charges for carrying anthracite from the mines owned by the complainant to Perth Amboy, New Jersey, the tide-water point reached by the defendant. The Commission ordered a reduction and afterward petitioned the Circuit Court to enforce its order.

After an adverse decision by the Circuit Court the Commission appealed to the Circuit Court of Appeals, but subsequently withdrew its appeal. In denying the request of the Commission the Circuit Court, in an opinion by Judge Acheson, said:

"The Commission found, and in its report states, that the operating cost of carrying a ton of anthracite coal from the Lehigh anthracite regions to Perth Amboy was eighty-five cents. This conclusion the Commission deduced from the

* Coxe Brothers & Company vs. The Lehigh Valley Railroad Company Interstate Commerce Commission (4 I. C. C. Rep. 535), decided March 13, 1891. Interstate Commerce Commission vs. Lehigh Valley Railroad Company; Circuit Court, Eastern District of Pennsylvania (74 Fed. Rep. 784), decided May 11, 1896. Interstate Commerce Commission, Appellant, vs. Lehigh Valley Railroad Company; Circuit Court of Appeals, Third Circuit (32 Fed. Rep. 1002), minute of withdrawal of suit on motion of appellant.

Lehigh Valley Railroad Company's annual report for the year ending November 30, 1887. In the report of the Commission are the following statements and tables: 'The business; receipts, with sources from which derived; expenses, and on what account incurred,-for year ending November 30, 1887, as appears from the annual report of said railroad company, were:

"From the above reported facts it appears that the tonmile receipts, expenses, and profits, or net receipts, for the year 1887, were on:

"The operating expenses for the transportation of all freight are sixty-three per cent of the reported operating income, while the cost of transporting coal is but fifty-six per cent of the income from coal, as appears from the said annual report of 1887. The estimated cost of carrying coal from the Lehigh and Mahanoy regions to Perth Amboy, based on said report, is eighty-five cents per ton, which, for