bound to do so with others in the same situation. In the leading case in the United States Supreme Court, Atchison, Topeka and Santa Fe Railroad v. Denver and New Orleans Railroad, it was squarely held that a railroad might enter into through traffic agreements with one railroad, pro rating its through rate, and at the same time refuse to enter into a similar agreement with another railroad traversing the same territory as the first and having the same terminus. To quote but one paragraph from the elaborate opinion of Chief Justice Waite: "At common law, a carrier is not bound to carry except on his own line, and we think it quite clear that if he contracts to go beyond he may, in the absence of statutory regulations to the contrary, determine for himself what agencies he will employ. His contract is equivalent to an extension of his line for the purposes of the contract, and if he holds himself out as a carrier beyond the line, so that he may be required to carry in that way for all alike, he may nevertheless confine himself in carrying to the particular route he chooses to use. He puts himself in no worse position, by extending his route with the help of others, than he would occupy if the means of transportation employed were all his He certainly may select his own agencies and his own associates for doing his own work." own. § 830. Through arrangements compelled. In some states, however, under authority of statute, through arrangements may be compelled by the body which has general power of the services and rates of the companies. The question has been raised whether such statutes are constitutional, but there seems to be little doubt.10 In holding such a Minnesota statute valid Mr. Justice Collins said: "We see no reason why, under the amendatory act (Gen. Laws 1895, chap. 91), the commission cannot lawfully compel a joint arrangement in 8 110 U. S. 667, 28 L. Ed. 281, 4 Sup. Ct. 185, B. & W. 265 (1884). 10 State v. Minneapolis & St. L. R. R., 80 Minn. 191, 83 N. W.60 (1900). a case like this. The evidence shows that the location of the Duluth road and the Minneapolis and St. Louis road, their track facilities, equipment, etc., are such that, by operating together under joint traffic agreements, the cost of the service can be greatly lessened. The public has, at least, a right to share in the benefits of this condition. If it is judicious so to do and of public benefit to have joint traffic arrangements in any given case, why should not the public be permitted to compel that such arrangements be made?" "If the state is to have any voice, therefore, in the establishment of reasonable rates, it must have a voice in some degree and some manner in the business of the carrier. Where a single carrier is being dealt with, this can be accomplished by determining what the operating expenses ought reasonably to be; the reasonable value of the capital invested; what return, under all the circumstances of the case, would be fair; and then, by adjusting the rate, an economical management is secured. But in a case like the one at bar, where each may plead its inability to make the necessary agreement with the other, the state must have the power to arbitrate between them, and, within proper limitations, compel the acceptance of its award." "If the state is powerless to decide as between carriers, we have, as said by counsel for the commission, the following absurdity, namely: (a) The state may regulate rates; (b) the rate must be reasonable; (c) it must afford the carrier compensation over and above operating expenses; (d) the method of operating and consequent expenses is beyond the state control.' But this question has heretofore been considered and disposed of in this state adversely to defendant's contention in Jacobson v. Railroad Company. It was there held that the act of 1895 did not, under the facts of that case, contravene the federal or the state constitution when conferring upon the commission the power to compel the transfer and interchange of loaded cars, and 1171 Minn. 519, 74 N. W. 893, 40 L. R. A. 389 (1898), affirmed 179 U. S. 287, 45 L. Ed. 194, 21 Sup. Ct. 115 (1900). the making of joint rates for through shipments, where the haul was in part on one, and in part on the other, of two connecting roads. There are no facts here which take this case out of the operation of the rule thus established, and we must abide by it as perfectly legitimate, until the federal court declares that an error has been committed. We hold, therefore, Laws 1895, chap. 91, is constitutional." CHAPTER XXV. DISCRIMINATION BETWEEN LOCALITIES. TOPIC A-DISCRIMINATION BETWEEN LOCALITIES AT COMMON LAW. § 831. Locality has no right to complain of rates at common law. 832. Discrimination as evidence that the higher charge is unreasonable. 833. Weight to be given to such evidence. 834. Lower rate as evidence of unreasonableness of higher. 835. Higher rate not necessarily unreasonable. 836. What circumstances may be considered. 837. Elements affecting cost of service at one point. TOPIC BUNDUE PREFERENCE OF LOCALITIES UNDER STATUTE. § 838. General principles of statutory regulation. 839. Reasonableness of rate per se immaterial under statute. 840. Interdependence of rates to various localities. 841. What preferential rates are obnoxious. 842. Discrimination explained by circumstances. TOPIC C-WHAT CIRCUMSTANCES JUSTIFY PREFERENTIAL RATES. § 843. Equalization of commercial advantages. 844. Equalizing rates sometimes may be established. 845. Public policy for equalization. 846. Grouping by reason of competition in the articles transported. 847. Burden upon the railroad to defend discriminatory rates. 848. Question of dissimilarity of condition one of fact. TOPIC D-LONG AND SHORT HAUL. § 849. Statutes regulating rates for long and short haul. 850. Various systems of making distance rates. 851. Long and short haul at common law. 852. Limitations upon charging less for longer haul. 853. Competition justifies reduction. TOPIC E-COMPETITION AS A FACTOR. § 854. Competitive rate must be reasonable. 855. Non-competitive rate must not be extortionate. 856. Competition may affect all parts of a joint rate. 857. Potential competition. 858. Competition artificially removed at the nearer point. 859. Nominal competition as justifying lower rate for longer haul. 860. Stifling of competition by consideration. 861. Carrier need not consider competition. TOPIC A--DISCRIMINATION BETWEEN LOCALITIES AT COMMON LAW. 831. Locality has no right to complain of rates at common law. At common law the carrier deals with individuals, not with cities or towns, and no one but a person has a right to complain that rates are too high. Except under a statute, a city or locality or the citizens in general cannot complain of the rates charged by a carrier. At common law the wrong, if any, is against the individual shippers at the various stations. They may complain if the rates charged them are unreasonable. While discrimination in rates between individuals is illegal, even if the higher rate is reasonable in itself, this is not true as to discrimination between localities. If a general rate charged to all shippers in a certain place is reasonable in itself it is not rendered illegal merely because shippers in another place are charged a lower rate. § 832. Discrimination as evidence that the higher charge is unreasonable. When, however, a rate between two points is attacked by an individual shipper as unreasonable in itself, as evidence in support of the complaint he may show that rates are lower for a similar haul between other points.1 1 State v. Minneapolis & S. L. Ry., 80 Minn. 191, 83 N. W. 60 (1900); Cordele Machine Shop v. Louisville & N. R. R., 6 I. C. C. Rep. 361 (1895). |