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American cases which sustain the interpretation given to the clause “under substantially similar circumstances and conditions as including competition.
Yours very truly, (Signed.)
ALBERT FINK. Will you not send a copy of this letter to the parties to whom you have sent your paper?
[Enclosure.] EXTRACT FROM OPINION OF GEO. DAVIS, ESQ., COUNSEL FOR THE AT
LANTIC COAST LINE, REGARDING INTERSTATE COMMERCE LAW.
The contention that shipments made from competitive points are not “under substantially similar circumstances and conditions with those made at non-competitive points, is not without authority to support it. It has the sanction of a highly-respectable text writer: "It may be said that the rule is, both at common law and under most of the regulatory statutes, that under like circumstances and the same class of goods, the same rates should be charged to all.”. Wood's Railway Law, Vol. I, p. 565. And in illustrating this general rule the author says, page 571: "Thus, if A and B are each the proprietors of a coal mine, and both send their coals to the same market, A's mine being within twenty miles of the market, and B's forty miles; in order to place A and B on an equality in the market, the company would not, for this reason alone, be justified in charging
A the same rates for hauling his coals to the market that are charged to B, as this would be a palpable inequality of rates to deprive A of his natural advantages. But where there is a competing line from B and not from A, and the competing line carries the freight from B at the same rates that it is carried from X, the company would be justified in making such discrimination.”
In Rogan vs. Aiken, 9 La. 609, the Supreme Court of Tennessee, after recognizing the common law rule that the carrier is bound to carry at equal rates for all customers in like conditions, decided that “ mon carrier may discriminate in favor of persons living at a distance from the end of the route, where the object is to secure freight which would otherwise reach its destination by a different route; and other customers not in like condition will have no right of action because of discrimination, if the charges made against them are reasonable.”
In ex parte Koehler, Receiver, in the Circuit Court of the United States, 21 Am. & Eng. R. R. Cus., 52, 58, the Legislature of Oregon passed an Act entitled “An Act to regulate the transportation of passengers and freight by railroad corporations,” which provided, among other things, that "no greater or less compensation shall be charged one person than another for like contemporaneous service,” and “no greater rate shall be charged for carrying similar property a short haul than a long one, in the same direction.”
Deady, J.: “I assume that the State has the power to prevent a railroad company from discriminating between persons and places for the sake of putting one up or another down, or any other reason than the real exigencies of business.
But where the discrimination is between places only, and is the result of competition with other lines or means of transportation, the case, I think, is different.
For instance, the act prescribes a reasonable rate for carrying freight between Corvallis and Portland, or from either to points intermediate thereto. But Corvallis is on the river and has the advantage of water transportation for some months in the year. The carriage of goods by water usually costs less than by land, and as water craft are allowed to carry at a rate less than the maximum fixed for the railway, they will get all the freight from this point unless the latter is allowed to compete for it.
If the Legislature can not require a railway corporation, formed under the laws of the State, to carry freight for nothing, or at any less rate than a reasonable one, then it necessarily follows that this provision of the Act can not be enforced so far as to prevent the railway from competing with the water craft at Corvallis and other similarly situated points, even if in so doing they are compelled to charge less for a long haul than for a short one in the same direction.”
THE REAGAN AND CULLOM BILLS COMPARED.
BY GEORGE R. BLANCHARD, COMMISSIONER THE CENTRAL
TRAFFIC ASSOCIATION. [Written for the Railway Age, June, 1886.] Watt's puff of steam has materialized into the vastest energy of the world. To regulate only its railway branch wisely in its commercial relations to a great nation is worthy any man's thought.
The complexities and difficulties of govermental administration of railway rates are greater in the United States than in any other country. This is caused by its greater area, larger railway mileage, longer coast lines, more numerous navigable lakes and rivers, diversities of soil, climate and products, differences between rates on high mountain gradient and level lines, the rapidity of traffic development, our desire to grasp foreign markets, the crudities and dissimilarities of railway charters and legislation, the proximities of foreign governments and carriers and the anomalies and contrarieties of state and national authority within and across non-physical lines. It has taken half a century in insular and parliamentary England to reach its present legal stage there and it is still incomplete and unsatisfactory. How much more difficult here !
The phenomenal increase of our people and the rapid opening of remote, new, and often sterile localities have combined to induce if not justify some excessive charges. Bonuses, discounts and speculations in bonds and shares gave fictitious values to many railways. Railway and legislative collusion not infrequently procured the sanction of law to excessive capitalization. As rapidly as new lines competed with and reduced the rates of older ones, unreasonable disparities between through and local rates often resulted. Competition became strife, strife became rancor, rancor begat reprisals, drawbacks, preferences, discriminations and excesses on local rates to equalize losses on through traffic. It is time this was controlled.
The time is here, too, when an honest railway and an honest forwarder, engaged in completing an honest commercial transaction at honest, open and non-preferential values for product and carriage, should have support and protection from law against the dishonest railway which combines with the cut-rate forwarder. Railway managers of old and responsible lines, who intend to deal fairly and impartially with the public are often compelled to bury that desire under the preferential and narrower policies or needs forced upon them by adjacent or longer or more poorly equipped railways. The latter cut rates to deplete the former, and law now encourages rather than stops them. Farther than that, the thoughtful sentiment of intelligent railway man
agers favors non-preferential rates from conviction, and that they be equitably proportioned upon through and local traffic and justly adjusted as between long and short hauls. When such broad and just views compete with narrower rail way knowledge, or purposes or manipulations of less breadth and honesty, the honest manager goes down and usually amid plaudits from many law-makers, who regard it as the result of competition. The honest railway class should seek and have law against the latter as clearly as an honest merchant requires it against the procurer of any other goods under false pretenses. ` A wise and well administered transportation act should therefore prove of as much value to well-intending railways, as to the great bulk of patrons who ask no advantages. That the people demand it is apparent. It should be mutual, carefully formulated to avoid needless disturbances of trade and finance, be practical, easily applied, and neither too restrictive nor too lax. It will involve more capital and revenue than the nation's debt and incomes, or any industry; more labor than any other special calling, and more complications than any or all mercantile traffics combined; directly or indirectly it will touch annually nearly every inhabitant as a patron or beneficiary, and next to government bonds, the values involved represent our credit, prosperity or depression, at home and abroad, with investors and peoples at large. Led therefore by different causes and interests to common premises, the views of the advocates of congressional regulation again diverge as authoritatively shown by the variance in two measures pending at Washington. They mark the present stage of the crystallization that began with the granger laws and a comparison of their salient features is the purpose of this paper.
The Cullom bill was introduced in the Senate February 16, passed its third reading May 11 by a vote of 47 to 4 and went to the House.
The Reagan bill was introduced in the House January 6, and passed the 8th of that month by a vote of 158 to 75. The majority each bill secured in its own branch of the co-ordinate congress indicates radical differences between which all railway legislation in the current session may fail, but it will come in its season.
The Senate bill apparently results from a determination to treat the question justly, keeping wrongs, rights and difficulties in view, after traversing the principal transportation districts to ascertain them. The House bill is stamped with the idea of its author that railways are monopolies, practicing aggrandizement and discrimination in preference to fair dealing; and that the public rights in them at least equal those of their owners. Hence its narrower plan to regulate sternly from the standpoint of antagonism rather than mutuality.
The Reagan bill is entitled: "A bill to regulate interstate commerce and to prevent unjust discriminations by carriers.”
The Senate bill is entitled: "A bill to regulate commerce.
Neither is properly entitled. They do not attempt to regulate commerce but only the transportation element or percentage in commodity values. That is not commerce but the carriage of commerce. It is like taxing one stave in a barrel.
With this note in passing, the following citations demonstrate the relative equities of the bills:
FIRST-TO WHAT TRAFFICS DO THEY APPLY. (a) The House bill is silent as to passenger transportation, an omission which has been frequently suggested to its author. The Senate bill protects both with like safeguards, provisions and penalties.
(6) The Reagan bill says:
That it shall be unlawful for any person or persons engaged alone or associated with others in the transportation of property by railroad,” etc.
The Cullom bill says:
“The provisions of this act shall apply to any common carrier or carriers engaged in the transportation of passengers or property wholly by railroad, or partly by railroad and partly by water when both are used.'
The Reagan bill therefore exempts connecting boats on lakes, rivers and oceans.
If they be parallel to the railways, it permits those free and unregulated water carriers to control the rates of one or many other restricted rail carriers. A rail and lake transaction from Chicago to New York is exempted on the lake by the Reagan bill. It is controlled under the Cullom law the same as are parallel all rail carriers. The Reagan bill therefore encourages unregulated water routes to contest rail charges, but if they fail so to do the bill provides how to regulate the remainder.
(c) Another difficult phase of this problem is the close proximity of competing railways in Canada. The necessity for the equality of American lines is apparant. The senate bill applies to property transported
from any place in the United States to an adjacent foreign country, or from any place in the United States through a foreign country to any other place in the United States."
The Reagan bill contains no such provision, although it is essential as well as just that shipments between Chicago and Boston and New York through Canada shall be upon no preferential footing as against the rails wholly on our own soil.
The fifth section of the senate bill also proposes to enjoin foreign carriers from doing business in the States if, and while they violate the terms and conditions applied to our own railways.
SECOND-EQUALITY OF CHARGE AND SERVICE. The requirements of both measures, that all charges for like services shall be just and reasonable, are proper, but in carrying them into effect the recognition by the senate bill of the practical in trade as contrasted with the impracticable in theory in the house bill is striking.
(a) The house bill says all railroads
"shall furnish, without discrimination, the same facilities for the carriage, receiving, delivery, storage and handling,
and shall perform with equal expedition,” etc.
This means that if freight taken to New York for export, misses a steamer and is stored a week waiting another--all freight must be stored a week if demanded. It means that if large quantities of freight are lightered to a steamer small quantities must be lightered to a private warehouse. It means that if a railway builds a siding to a large factory or coal depot, it must build one at the same point for a small individual