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the group or average distance of 149 miles, is nearly six mills per ton per mile, taking the tide coal as an average; some being carried to other points at lower, and some at higher, rates.
“Now, certainly, there is no statements in the railroad company's report to the effect that the cost of carrying coal from the Lehigh and Mahanoy regions to Perth Amboy was eighty-five cents per ton. That is the estimate of the Commission, and it purports to rest upon the report of the railroad company for the year 1887. That report shows that the gross receipts from all coal carried by the defendant during the year averaged twelve mills per ton per mile, and that the average cost of carrying each ton of coal per mile was 6.67 mills. Upon the basis of this average cost per mile, namely, 6.67 mills, the cost of transporting a ton of coal from the Lehigh and Mahanoy regions to Perth Amboy (149 miles) would be 99.38 cents. By what method, then, did the Commission proceed in making its estimate? No satisfactory answer to this inquiry is to be found in the report of the Commission. The counsel for the Commission, in a supplemental brief furnished the court since the hearing of the case, makes this explanation: ‘The correct method of obtaining such cost of transportation, and the method which the Commission has again stated, since the argument, to have been the one adopted by it, is shown as follows.'
“The counsel then states that the Commission found from the railroad company's report for 1887, that the operating expense on all coal carried from all points of shipment to all destinations during that year was about fifty-six per cent of the gross coal receipts; that the Commission ascertained that the average rate charged by the company for carrying the larger sizes of coal from the Lehigh and Mahanoy mines to Perth Amboy in 1887 was $1.54 per ton, and that the average rate charged upon the pea, buckwheat, and culm was $1.36 per ton; that the Commission estimated that 75 per cent of this tonnage took the $1.54 average rate, and that twenty-five per cent thereof took the $1.36 average rate, and hence that the average revenue per ton from this tidal coal was $1.495. The counsel's brief then proceeds thus:
“The fair average gross receipts per ton actually obtained by the company in 1887 for carrying anthracite coal from the Lehigh and Mahanoy mines to Perth Amboy having thus been found to be $1.495 per ton, and it having also been ascertained, as above shown, that nearly fifty-six per cent. of the company's gross revenue from coal was absorbed by the cost of carriage, it follows that fifty-six per cent. of the average rate of $1.495 per ton would furnish 83.7 cents as the basis on which to estimate the cost of carrying a ton from said coal regions to Perth Amboy in 1887. The Commission, to be entirely safe, increased this by 1.3 cents, and placed its estimate of the cost of carriage at eighty-five cents per ton. The calculation above described applies the coefficient of expenses on coal traffic (56 per cent of gross receipts) directly to the traffic in question and the receipts actually received for its transportation.'
"If the explanation thus given bythe counsel for the Commission is a correct statement of the method pursued by the Commission in making its estimate of eighty-five cents, then, in our judgment, that method is without justification. For having adopted an estimated average rate of revenue, namely, $1.495, from each ton of coal carried over the 149 iniles from the Lehigh and Mahanoy regions to Perth Amboy, the Commission assumed that the expenses of the transportation of coal over this particular branch of the defendant's railroad system was necessarily only the average cost of the carriage of all coal upon the defendant's entire system. The assumption which thus underlies the Commission's estimate is unwarrantable. Merely because the cost of carriage of all coal upon the defendant's entire railroad system from all points of shipment to all destinations was fifty-six per cent of the gross receipts from all coal, is no reason for concluding that upon a particular line or part of the system the cost of carriage bears the same ratio to the coal receipts from that particular line or part. The railroad company's report for 1887, upon which the Commission based its estimate, does not furnish the data by which the actual cost of carrying coal from the Lehigh and Mahanoy mines to Perth Amboy can be ascertained. The Commission, therefore, resorted to an estimate of the carrying cost. That estimate, however, as we have seen, rests upon an erroneous principle, and is unreliable. Hence the order based thereon cannot be sustained, and is not to be judicially enforced.
“We have only to add that the evidence before us is quite convincing that the actual cost of transporting coal from the Lehigh and Mahanoy regions to Perth Amboy was and is considerably more than eighty-five cents per ton.”
The Social Circle Case.*
“If the Commission, instead of withholding judgment in such
a matter until an issue shall be made and the facts found, itself fixes a rate, that rate is prejudged by the Commission to be reasonable.”—Decision of the Supreme Court in this case.
This case is especially interesting because it is the only one in which any part of an order of the Interstate Commerce Commission has received the approval of the United States Supreme Court. The original complaint involved the rate on buggies, carriages, and freight taking “first class” rates from Cincinnati to Social Circle, Georgia, and from the same point to Atlanta. The complaint concerning the rate to Social Circle involved the Fourth section, or long and short haul clause, of the law, and the facts showed that while the rate to Social Circle was $1.37 per hundred pounds the same kind of freight was carried through Social Circle to Augusta for $1.07 per one hundred pounds. The Atlanta rate was alleged to be unjust in comparison with that to Augusta because both were the same while the route through Atlanta to Augusta was 171 miles longer than the route to Atlanta. On both points the Commission decided in favor of the complainant. The defendants were ordered to "cease and desist” from charging more from Cincinnati to Social Circle than to Augusta and from charging more than $1.00 per hundred pounds to Atlanta.
* The James & Mayer Buggy Company vs. The Cincinnati, New Orleans & Texas Pacific Railway Company, The Western & Atlantic Railroad Company, and The Georgia Railroad Company; Interstate Commerce Commis sion (4 1. C. C. Rep. 744), decided June 29, 1891. Interstate Commerce Commission vs. Same Defendants; Circuit Court, Northern District of Georgia (56 Fed. Rep. 925), decided June 3, 1893. Interstate Commerce Commission, Appellant, vs. Same Defendants; Circuit Court of Appeals, Fifth Circuit (4 Inter. Com. Rep. 582), decided May 29, 1894. Cincinnati, New Orleans & Texas Pacific Railway Company et al., Appellants, vs. Interstate Commerce Commission; Interstate Commerce Commission, Appellant, vs. Cincinnati. New Orleans & Texas Pacific; Supreme Court (162 U. S. 184), decided March 30, 1896.
The Circuit Court refused to enforce any part of this order and dismissed the petition of the Commission. Its refusal, so far as concerns the Social Circle rate, was based wholly upon its interpretation of the meaning of the word "line" in the Interstate Commerce law, and the decision contains no statement of the views of the court as to the substantial justice of charging more to Social Circle than to Augusta. As the order of the Commission so far as it affected the Social Circle rate was subsequently approved and its enforcement decreed by the Supreme Court, it is not necessary now to consider that question. On the point of the reasonableness of the Atlanta rate all of the courts which passed upon the case disagreed with the Commission. The report of the latter indicates that it did not have a great deal of evidence on which to decide this point. The following is an extract: