the situation as competition and compromise-rate wars and peace treaties-worked it out. The Texas Common Point group is itself an illustration of the equalizing effects of competition. It embraces substantially all the thickly settled and cultivated portions of the state. It had its origin in the rivalry for traffic between the all rail lines. entering the state through the northern and eastern gateways, and those entering the interior from the gulf coast. From the territory east of Pittsburgh the rail and water routes competed actively with the all-rail routes. The result of this competition, supplemented by further competition as new lines have been extended in western Texas, is a rate group extending a maximum distance of 500 miles north and south and 465 miles east and west. In general, all points in this group pay the same rate from or to a point in the United States on or east of the Missouri and Mississippi Rivers.1 A St. Louis business man, for example, may ship to Corpus Christi on the Gulf for the same rate he pays to San Antonio, 150 miles less distant, or to Denison, on the northern border of Texas, 375 miles closer than San Antonio. A New York business man reaching the market through Galveston may ship to Denison or Ft. Worth for the rate which he pays to San Antonio or Waco. The competitive tendency to extend the Common Point group was intensified by the frankly expressed policy of the Texas state authorities to protect local jobbers-the policy which led to the Shreveport Case. It was, moreover, the policy to create a number of jobbing centers scattered over the state, and to that end the state was divided into two intrastate rate adjustment areas: Common Point Territory and Differential Territory. These territories corresponded roughly (1) with the Common Point group as established for rates into and out of Texas, and In the Northern part of the state is a district to which, in accordance with the "distance-group rate" principle, rates from nearby territory are lower than to the rest of common point territory, Dallas Chamber of Commerce v. A. T. & S. F. Ry. Co., 40 I. C. C. 619. And Galveston and Houston enjoy specially low commodity rates because of the necessity to meet water competition from the Seaboard-a Fourth Section departure justified by water competition and "market competition." The Common Point Group is also important on Colorado business, although the rate groupings are slightly different, in accordance with the Commission's order, Public Utilities Commission of Colorado v. A. T. & S. F. Ry. Co., 52 I. C. C. 439, 453, which insisted upon a recognition of distance. (2) Differential Territory: the Texas territory to which or from which interstate rates were made by adding published amounts to the Common Point rates. It was within the Common Point Territory that rates were prescribed on the mileage table basis, marked by the peculiarity that no increases were effective after a distance of 245 miles was reached. This meant, of course, that once a distance of 245 miles was reached all Texas jobbers, wherever located in the state, could compete on an equal basis, since all paid the same "in" rates. To points in Differential Territory, rates were calculated on the mileage table to a town on the border of Common Point Territory, the through rate being calculated by adding the established "differentials" to this amount. Because the "Common Point Group" for inbound shipments, and the "Common Point Territory" in which the Texas Scale was applied, were not identical, the issue of discrimination arose when the "Panhandle" country was opened up. Amarillo was included in the territory paying the intrastate scale. But it paid "differential rates" (i. e. rates in excess of the Common Point rates) on merchandise inbound. The Texas Common Point Case of 1913 arose from the filing of tariffs by the carriers proposing to shrink the size of the Common Point group to equalize the competitive situation. The new tariffs, which left Amarillo rates alone, but advanced the rates at such competitive points as Sweetwater and Big Springs, were suspended, and, upon order of the Commission, withdrawn. The justice of the contention of the Amarillo interests was granted by the carriers, and recognized by the Commission. On the basis of distance they were entitled to Common Point rates. But, instead of shrinking the Common Point Group as proposed by the carriers, or expanding it to include Amarillo, a compromise was arranged. Special commodity rates on the articles sold through jobbers were provided, effecting an equalization of Amarillo and the Common Points to the extent that the competition had constituted a basis of complaint.1 Rates between Texas and the North and East are built upon the St. Louis rates as the "base scale." St. Louis is a strategic crossroads. The first through line into Texas from the North 1 Texas Common Point Case, 26 I. C. C. 528. was the Missouri, Kansas & Texas and its connections with St. Louis at Sedalia (Missouri Pacific), and Vinita (the original Atlantic & Pacific line of the present "Frisco" system). St. Louis is the principal rate breaking point, and railroads under new ownership extend into the South and West. The St. Louis "base scale" of class rate (and the commodity rate structure was built up on the same principles as the class rate structure), prior to the series of changes occasioned by changes in the rate level, was the following: 1 The rates to and from other groups were then determined by adding or subtracting the agreed differentials. Thus the differentials effective on Chicago business were, on the first five classes, 20, 16, 12, 10, 7 cents over St. Louis, giving rates of 167, 141, 116, 106, 82 per 100 pounds. Higher differentials were added to the base rates to fix the scales at more distant groups. These rates were advanced during the emergency period and, in 1922, reduced with resultant changes in the rate relationships, though not in the rate structure. The old flat differences in rates have been destroyed, but the essential competitive relationships have been maintained. The total rates as published are graded upon the distance principle. § 4. The complex Lake Cargo Coal adjustment represents a similar recognition of the distance principle in the establishment of group rate differentials. In 1917, when the Commission made. its comprehensive investigation, the rate structure illustrated on the map was found in effect. This was in part the result of a series of isolated opinions by the Commission: the Lake Cargo Case was to furnish the basis for a comprehensive revision looking at the situation as a whole. In general the original group rates illustrate two essential principles of rate making: the 1 The rates in this base scale were prescribed as maxima by the Commission in R. R. Com. of Tex. v. A. T. & S. F. Ry. Co., 20 I. C. C. 463, following an advance made in 1908, which increased the 1903 scale of 137, 121, 104, 96, 75 to 147, 129, 112, 102, 80. See also Class & Commodity Rates to Texas, 11 I. C. C. 238, for discussion of the 1903 advances. 2 These various opinions are cited in Lake Cargo Coal Rates, 46 I. C. C. 159, 161. A typical case is that of Boileau v. P. & L. E. R. R. Co., 22 I. C. C. 640. Many of the contentions in the Lake Cargo Case appear in Bituminous Coal to C. F. A. Ty., 46 I. C. C. 66. |