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Railroad to Memphis was $1.40 per ton, the rate from the same points to Nashville on “run of mines, nut and slack" coal should not exceed $1.00 and that on screened" coal should not exceed $1.15 per ton, and that any reduction in the rate to Memphis should be accompanied by a proportionate reduction in that to Nashville. The opinion of the Commission says:
“At present there is a uniform rate from the western Kentucky mines to Nashville of $1.00 per ton to all persons, on the kinds of coal known as 'run of mines, nut and slack,' and this rate does not vary with the season. On screened coal' the rate is $1.15 per ton during the period from April 1st to September 1st, while for the remainder of the year, viz: from September 1st to April 1st, it has been fixed at $1.40 per ton.
“The amount of the difference made at different seasons of the year, cannot, however, be justified either by the evidence in this case or by the custom of the roads there seems no good reason why the practice should longer exist."
It is obvious from the foregoing, that the effect of the Commission's order would be the enforcement of the rule, suggested in the last paragraph of the quotation, that rates should not vary with the season.
The Commission appealed to the Circuit Court for a decree enforcing its order, and its petition was denied. The decision of the Court characterizes the order of the Commission as "without
precedent or analogy in court judgments or decrees,” and summarizes the reasons impelling a refusal to grant the desired decree as follows:
“There is in the case, in my opinion, no discrimination under section 2, and no undue advantage under section 3, to the Memphis trader as against the Nashville trader; and the proposition that the railroad was without power to make a difference in the summer and winter rates was, I think, erroneous; and whether or not, the Nashville rate, considered upon its own merits, is unjust and unreasonably high, was not inquired about nor decided by the Commission.”
Concerning the suggestion that the railway ought not to be permitted to continue the practice of making lower rates to Nashville in summer than in winter the Court said:
“The Commission based its ruling in part upon the ground that the defendant railway company was without right to make any difference between what may be called the summer and winter rates, and the Commission required the company to reduce its winter rate so as to conform to the summer rate, and make that uniform the year round, and this brings up the question whether its opinion on that point was sound. Neither the Commission in its report, nor its able counsel in the argument, have referred the Court to any particular provision of the Interstate Commerce act with the terms or just implication of which this mode of doing business is in conflict. The Commission, in its report, assigns no reason why such mode of business is not lawful, except the statement that it is not customary. Indeed, counsel for the Commission took occasion to say expressly that he regarded this mode of adjusting its rates by the defendant so as to furnish a lower rate during the summer, or dull season, than was furnished during the winter, or active season, as a sound, perfectly just, and proper business method in and of itself, and apparently conceding that it might be well if the act of Congress allowed the business to be transacted in this way. It is difficult to understand how the question of whether such a difference in rates had been customary or not was controlling in the decision of that point. It has not been suggested that there is any particular common-law principle which prohibited what was thus done, and it is certain that methods of business have been followed for almost time out of mind closely analogous to this. It is customary in manufacturing and other industrial establishments to lower the price of goods in order to keep business going during the summer, or dull season of the year. And so, too, it is a matter of common knowledge that coal in any market may be bought during the summer or heated season of the year at rates lower than it can be obtained during the winter, when the consumption is large, and the demand for this commodity active. It is well known, as the proof in this case abundantly shows, that it is very difficult for mining and manufacturing establishments to find market during the summer months for the product or output of such establishments. This is due to the fact that there is comparatively little demand for their products during those months. It has come to be well known, therefore, as the 'surplus output' of product, and the question of a market for such surplus output during the dull season of the year is everywhere recognized as a difficult one, and concessions are made in prices and rates in order that this surplus output may be handled. This is necessary to enable those owning and operating such establishments to furnish employment to the common laborers of the country, whose subsistence depends upon continuous employment. It enables those operating such concerns to keep their working forces together, in order that a sufficient output may be furnished during the active season of the year to meet the increased demands of the trade. It is apparent, therefore, that no sound public policy is affected by such mode of doing business, and counsel admits that it is in itself reasonable, just, and humane to those who need consideration most. It would be surprising, therefore, if it could be found that a mere business method, wholly without objection within itself, is repugnant to the spirit and purpose of the Interstate Commerce act. The injurious effect of a suspension of business during a dull season with idle machinery, and with those dependent on wages thrown out of employment, is certainly entitled to some consideration in following out the possible results of such a rule as the Commission here announces. And if those who own and operate mining establishments may properly attempt to keep the same going during the summer season, it would be singular if the railroad company may not also have the right of keeping such appliances and cars as it devotes to the coal traffic from becoming idle, and also avoid throwing the crews of men who operate such cars out of employment, by joining with the coal miners in a reduction of rates in order to find a market for the surplus output. The Interstate Commerce act is not to be construed so as to abridge or take away the common-law right of the carrier to make contracts and adopt proper business methods further than its terms and recognized purposes require. *
“I am, therefore, without further discussion, clearly of opinion that the defendant railroad company had the right to make a difference in its summer and winter rates on the coal traffic. It is to be observed that I am not now called upon to pronounce any opinion as to whether either the summer or winter rate is in and of itself just and reasonable, being restricted, as before stated, to an approval or disapproval of the action of the Commission."
On the question of fact involved in this case, which was whether the rates in question had been shown to discriminate unjustly against Nashville, the court disagreed with the Commission.
The former said:
“Taking the case as it was, and the rates as put in effect at the time the Commission decided the case, Memphis was left with an even or flat rate of $1.40 per ton on all classes of coal the year round; and Nashville with a rate of $1.00 per ton on the cheaper class of coal, uniform for all seasons of the year, and with a rate of $1.15 on 'screened' coal during the summer, and $1.40 during the winter. This was a difference of 40 cents per ton on the lower grade of coal