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question, was the result of conferences between said Commission and officials of the interested carriers.
After the complaint in this case was filed the Minnesota Commission notified the defendants referred to above as operating between Chicago and South St. Paul that if the rates on live stock from Minnesota points to Chicago were reduced the Commission would make corresponding reductions in the rates on live stock from such Minnesota points to South St. Paul.
Complainant introduced considerable evidence which showed that Chicago as compared with South St. Paul and the Missouri River markets has received a smaller proportion during recent years than prior thereto of the live stock raised in the territory under consideration, and claimed that this tended to show that the discrimination complained of has injured the Chicago livestock market and those interested therein.
On the other hand, defendants showed that during recent years great improvements have been made in the facilities for handling live stock at South St. Paul and the Missouri River markets, including the erection of new packing houses and additions to old ones; that there has been a greater increase in the amount of live stock raised west of the river than east of it; and that live stock shipped from the river to Chicago shrinks, in weight from 3 to 5 per cent while in transit; and claimed that these facts and others that are similar fully account for changes shown in the destinations of live-stock shipments.
That the facts shown would tend to produce the effect claimed for them is evident, but in that connection it is impossible to determine to what extent each of the facts was effective.
Complainant also introduced considerable evidence tending to show that the rates exacted by defendants for transporting live stock to Chicago from points in the states of Iowa, Missouri, Wisconsin and Minnesota are unreasonable per se, but the testimony upon that point is unsatisfactory and we do not feel justified in making a finding in relation thereto.
Based upon the foregoing, we make specific findings as follows:
The discrimination against the transportation of live stock to Chicago from the shipping points in question, brought about by defendants' action in establishing and putting in force upon. the products of live stock rates of transportation lower than those contemporaneously exacted by defendants for the transportation of live stock between the same points injured the live-stock market of Chicago and those interested therein, is not justified by difference to defendants in the cost of transportation, and is not otherwise justified, and therefore subjects the traffic in live stock and the Chicago live-stock market and those interested therein, including complainant, to undue and unreasonable prejudice and disadvantage, and gives to the traffic in the products of live stock and shippers and localities interested in such traffic undue and unreasonable preference and advantage.
Complainant is an incorporated association whose members are engaged in the purchase, shipment and sale of live stock, and whether or not a purpose of its organization is, as some of the defendants have alleged, to restrain, limit and destroy competition in trade, it had a right under section 13 of the Act to regulate commerce to institute and maintain this proceeding.
Cattle Raisers' Association of Texas v. Fort Worth & Denver City Railway Company et al., 7 1. C. C. Rep. 513.
The jurisdiction of the Commission over the defendants is not denied.
In the Chicago Board of Trade case hereinbefore mentioned the Commission, after stating the circumstances and conditions surrounding the transportation of live hogs and the products of hogs, including the competitive relations existing between these two kinds of traffic, and the cost of transportation, held that the greater charge exacted by the defendants for transporting the former was unlawful, and issued an order requiring the defendants to cease and desist from charging more per 100 pounds for transporting live hogs than for transporting the products of hogs. The territory there in question was substantially the same as that now under consideration, and, as shown in the findings of fact, essential conditions have not changed materially since. It follows, therefore, that if the order referred to was right when issued the discrimination complained of, so far as it relates to
the transportation of hogs and their products to Chicago from the river and points intermediate between the river and Chicago, is unlawful. And if it is unlawful to exact a higher rate on hogs than on their products it is unlawful to charge more for transporting cattle than for transporting the products of cattle, because the relation between the live animal and its products is substantially the same in each case, and, at the same rate, the net revenue per 100 pounds received by defendants for transporting cattle is greater than the net revenue on equal tonnage received by them for transporting hogs.
Packing house products and fresh and dressed meats include almost the entire products of live stock, and although at the same rate per 100 pounds the traffic in packing house products pays, above cost of transportation, a greater revenue than the traffic in either fresh or dressed meats, defendants make no difference in their rates on that account. They also charge the same rates for transporting cattle that they exact for transporting hogs.
If cattle and hogs are considered together on the one hand and packing house products and fresh and dressed meats on the other it will be seen that after deducting mileage according to payments made by defendants the revenue received by them compared with the paying and non-paying tonnage hauled is greater at the same rate on live stock than on the products of live stock. But expenses incidental to the transportation do not apply equally to the different classes of traffic.
Although the products of live stock are shipped to some extent from packing houses located at some of the intermediate points and the local rate from the river is made the maximum for such shipments, generally speaking, the local rates in question apply to live stock shipped from the intermediate points and products of live stock shipped from Missouri River points and South St. Paul, because the bulk of the live-stock shipments in question is from the intermediate points while shipments of the products are largely from the river and South St. Paul.
At intermediate stations where the tonnage of live stock shipped is considerable defendants provide, for the accommodation of this traffic, cattle yards, and, in many instances, weighing
facilities. This is an expense that does not apply to shipments of the products; but, on the other hand, the switching and terminal charges paid on the products at Missouri River points and absorbed by defendants, although not definitely shown, are large, and fully sufficient, we think, to offset terminal expenses on live stock at the intermediate shipping points.
Apparently, the switching and terminal charges paid by defendants at Chicago, when that point is the final destination, are the same whether the traffic is live stock or the products of live stock, except that defendants pay 25 cents per car for unloading the live stock and also pay for cleaning the live-stock cars, and we understand that nearly all the former traffic and a large portion of the latter is delivered at the Union Stock Yards; but while defendants exact a terminal charge of $2 per car for such delivery of live stock they make no terminal charge whatever for such delivery of live-stock products when the shipments are from points west of Joliet, Ill. The latter point is located a short distance south-westerly of Chicago.
Another expense incidental to the transportation of live stock that does not apply to the products is that connected with the transportation of men who accompany the livestock shipments. Such transportation subjects defendants to some additional risk, but we think this risk is about the only expense connected with the transportation of the men that should be considered in connection with the transportation of the live stock. These men take care of the stock while in transit and thus relieve defendants of duties they would otherwise have to perform, and the carriage of the men free is incidental to, and cannot be considered separately from, the transportation of the live stock. But whatever the expense to defendants thus caused may be, we are convinced that it is offset, and more than offset, by the fact that 20 per cent or more of the live-stock cars are returned to the shipping points loaded, while refrigerator cars are nearly always returned empty.
There are a few other differences in cost of transportation, but they are not very important and have been fully explained in the findings of fact; we do not deem it necessary, therefore, to notice them here in detail.
After a careful consideration of all matters disclosed by the record we conclude that the discrimination complained of is not justified by difference to defendants in the cost of transportation. And this was the view expressed by some of defendants' officials. The freight traffic manager of the Atchison Company, as hereinbefore stated, testified that from the Missouri River to Chicago a 12-cent rate on live stock is as profitable as a rate of 1812 cents on fresh meat. But this might be true when applied to transportation by the Atchison Company although not true when applied to transportation by some of the other defendants. What are called “out-of-pocket” expenses, which are paid by the defendants and because of which no charges in addition to the regular rates of transportation are exacted from shippers, vary according to the variations in location of defendants' respective lines of railway
In making calculations concerning cost of transportation we have endeavored to describe the general situation and have not attempted to give in detail the differences that exist between the different lines operating in the territory under consideration; first, because it would be impossible to state such differences accurately, and, second, because although we think cost of transportation is a very important element we do not consider it a controlling element in this case.
In determining what the relation should be between the rates charged for transporting two different freight articles value is often an important factor; but this is not alone because of the greater risk connected with the transportation of the more valuable article. Improvements made during recent years in the road-beds and equipment of carriers have rendered the item of risk in many cases of little consequence. The value of the article is important, principally, because of its bearing upon the value to the shipper of the transportation service; and the value of the service is, and has always been considered by carriers, one of the important elements to be considered when fixing the rates to be charged for transportation. As stated in the findings of fact, live-stock products, compared with the live animals, are about twice as valuable. Another very important factor is the relation existing between