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Several decisions have been rendered by Federal courts during the year in cases arising under the act to regulate commerce. Four of these cases were instituted to enforce orders of the Commission.
THE CHATTANOOGA CASE.
The case entitled East Tennessee, Virginia & Georgia Railway Company et al. v. Interstate Commerce Commission (99 Fed. Rep., 52) was pending in the United States circiut court of appeals, sixth circuit, on appeal by the carriers from the decision rendered in favor of the Commission by the United States circuit court for the eastern district of Tennessee. This proceeding is known as the Chattanooga case. Railway and steamship companies engaged in the transportation of . freight from New York and other Eastern cities via South Atlantic ports charged more for the shorter distance to Chattanooga than for the 152 miles longer distance to Nashville. The case was decided by the Commission in December, 1892, and in March, 1893, its petition for enforcement of the order issued against the carriers was filed in the circuit court. Largely because of the pendency of cases in the United States Supreme Court involving construction by that court of the long and short haul clause, and which was thought would be controlling in this case, the case was not heard in the circuit court until December, 1897. The circuit court filed its decision in February, 1898. The case on appeal to the circuit court of appeals was submitted in June of that year, and in November, 1899, the court of appeals affirmed the decision of the circuit court. This decision fully sustains the arguments advanced on behalf of the Commission. Following is a brief statement of the rulings made in this case by the court of appeals: While it is settled in Interstate Commerce Commission v. Alabama Midland Railway (168 U. S., 164, 167) that competition is one of the most obvious and effective circumstances that makes the conditions under which a long and short haul is performed substantially dissimilar, yet it is further held in that case that the mere fact of competition, no matter what its extent or character, does not necessarily relieve the carrier from the restraints of the third and fourth sections of the act to regulate commerce. The Supreme Court in that case only went to the extent of holding that the third and fourth sections are not so stringent and imperative as to exclude consideration of competition in determining dissimilarity of conditions, and that the competition may in some cases be such as, having due regard for the interests of the public and the carrier, ought justly to have effect upon rates. It is the duty of the Commission and the reviewing courts to consider not only the extent but the character of the competition at the
longer distance point relied on as a justification for discrimination against the nearer point, and it is relevant to ask why such competition is not also present at the nearer point. The rates to Chattanooga from Cincinnati and from the Eastern seaboard are fixed by agreement between the carriers as members of an association of the Southern railway and steamship companies, and without this agreement it is not possible to see why normal competition would not give Chattanooga substantially the same rates as Nashville. The interstate commerce law was enacted to encourage normal competition, but it is not in accord with the spirit or letter of that law to recognize, as a condition justifying discrimination against one locality, competition at a more distant locality, when competition at the nearer point is stifled or reduced, not by normal restrictions, but by agreement between those who otherwise would be competing calfiers. The difference in conditions thus produced is effected by a restraint upon trade and commerce, which is not only violative of the common law but of the Federal Antitrust Act. It is immaterial that Chattanooga is grouped with towns to the south and west and that to reduce her rates may call for a readjustment of rates to such towns. Justice can not be denied to one locality because it may require a change of rates to other localities with which it has been grouped by carriers. It is also immaterial that the rates to Chattanooga and the other towns with which Chattanooga is grouped have been in force for a long period of time. The length of time which an abuse has continued does not justify it; it was because time had not corrected abuses of discrimination that the interstate commerce act was passed. The argument made in this case, that the fact of competitive lower rates at the more distant point speaks for itself, and that the similarity of condition can not exist in the face of such competitive rates, is only one of many arguments advanced in behalf of the carriers which, reduced to their last analysis, involve as a major premise that the existence of a rate and movement of business under it are a complete justification of it and foreclose judicial investigation. This would render the interstate commerce law nugatory and useless. While it may be true, as suggested in behalf of the carriers, that traffic managers are better able, by reason of their knowledge and experience, than the courts to fix rates and decide what discriminations are justified by the circumstances, yet this can not be conceded so far as it relates to the Interstate Commerce Commission, which, by reason of the experience of its members in this kind of controversy and their great opportunity for full information is, in a sense, an expert tribunal. The courts, moreover, are continually called upon to review the work of experts in all branches of business and science, and the intention of Congress that they should revise the work of railway traffic experts, whether railway managers or commerce commissioners, is too clear to admit of dispute. The order of the Interstate Commerce Commission requiring certain railroad companies to cease and desist from collecting on freight from New York and other Eastern cities more for the shorter distance to Chattanooga than for the longer haul over the same line in the same direction to Nashville was a lawful order, and the judgment of the circuit court of the United States for the eastern district of Tennessee granting the petition of the Interstate Commerce Commission for enforcement of such order is affirmed.
THE LA GRANGE CASE.
In Interstate Commerce Commission v. Louisville & Nashville Railroad Company et al., the United States circuit court for the southern district of Alabama recently filed an opinion and issued a decree enforcing the order of the Commission in what is known as the La Grange case. La Grange is some 71 miles southwest of Atlanta, on the Atlanta & West Point Railroad. That road, in connection with the Western of Alabama and Louisville & Nashville, charged more on freight articles from New Orleans to La Grange than for the longer distances to Atlanta or to Hogansville, Newnan, Palmetto, or Fairburn, intermediate points between La Grange and Atlanta. The rates to those points and to La Grange were the rates to Atlanta plus the local rates back from Atlanta. The first, third, and fourth sections were involved. The circuit court affirmed the order of the Commission requiring the defendants to cease and desist from charging the existing rates complained of from New Orleans to La Grange; from charging rates to La Grange made by combining through rates from New Orleans to Atlanta with the local rates back to La Grange; from charging higher rates to La Grange than those for the longer haul through La Grange to Hogansville, Newnan, Palmetto, or Fairburn; and from charging rates to La Grange which subject the complainant and the city of La Grange to undue and unreasonable prejudice or disadvantage and give undue preference or advantage to consignees at Atlanta, Fairburn, Palmetto, Newnan, or Hogansville.
A further ruling made by the court in the La Grange case was that the findings of fact in the report of the Interstate Commerce Commission are made by law prima facie evidence of the matters therein stated, and the conclusions of the Commission based upon such findings are presumed to be correct, and they will not be set aside unless error clearly appears. The court said that unless the record clearly shows that the findings and conclusions of the Commission are erroneous, the court should not overrule or in any manner interfere with them.
THE GEORGIA RAILROAD COMMISSION CASES.
On March 21 last the circuit court of appeals, fifth judicial circuit, handed down its decision in three cases brought by the Commission to enforce its orders in what are known as the Georgia Railroad Commission cases (93 Fed. Rep., 83). These cases were pending in that court on appeal from the circuit court for the northern district of Georgia. Two more of these Georgia commission cases are on the docket of the circuit court for the southern district of Georgia. The five cases brought by the Georgia railroad commission were decided by this Commission in one report and opinion on November 11, 1892. It was in that decision of the Commission that the construction of the fourth section of the act was announced which was overruled by the United States Supreme Court in the Alabama Midland Railway or Troy case (168 U. S., 144). The ruling so announced by the Commission was that the competition of carriers subject to the act to regulate commerce did not justify them in departing from the rule of the long and short haul clause.
The Supreme Court held in the Troy case that competition which affects rates, whether railway or water competition, may, though it does not necessarily, create a dissimilarity in conditions which would warrant a lesser rate for the longer haul, and that such competition is one of the matters which must be considered by the Commission and the courts. The Supreme Court further said, reaffirming its decision in the Import Rate case (162 U. S., 197), that all of the circumstances and conditions which reasonably apply to the situation, including the legitimate interests of the railway companies, those of the traders and shippers, and the welfare of the communities where the goods are delivered, should have consideration. The circuit court of appeals in the three cases above mentioned held that if such competition is real and controlling as to the rate charged to one point, while it does not affect rates to another, it creates substantially different circumstances and conditions as between the two, and that in such case the fourth section does not apply.
In one case the rates from Cincinnati and other Ohio River points were lower to Atlanta than for shorter distances to intermediate points on the same line between Chattanooga and Atlanta. In another the rates from New York and other Eastern cities were lower to Atlanta than for the shorter distances to intermediate points on the same line between Augusta and Atlanta. In the third case the rates from New York and other Eastern points were lower to Opelika, Ala., than for the shorter distances to intermediate points on the same line between Atlanta and Opelika. The rates to these intermediate points were combination rates made by adding the rate to the competitive point— Atlanta, for example—and the local rate from that point to the shorter distance stations. This local rate was fixed by the Georgia State Commission. The rates to Atlanta, Opelika, Chattanooga, and Augusta, while shown to be competitive, were nevertheless, as appeared from testimony offered by the carriers, reasonably remunerative, considering the competitive conditions at those points. The court says:
There is in these cases no complaint by the appellant, or by any of the witnesses whom the appellant called, that the rates to Atlanta, Opelika, Chattanooga, Augusta, and other competitive points are too low. There is a suggestion by the Commission that the average of the rate per ton per mile tends to show that such complaint could not well be made, and that these rates are at least reasonably high. And the testimony offered by the appellees shows that, considering the competitive conditions in operation at those points, the rates to those points are reasonably remunerative. On the basis of this evidence, it is earnestly contended by counsel for the appellant that the rates at the longer distance points being shown to be reasonably remunerafive, and the rates at the shorter distance points being admitted to be higher, the latter must, of logical necessity, be found to be unreasonably high, and therefore unreasonable and unjust, and such as give an undue preference to the longer distance points, and subject the shorter distance points to an undue and unreasonable prejudice and disadvantage. It will be perceived that this argument excludes all consideration of the force of competition, and ignores its presence at the longer distance points and its comparative absence from the shorter distance points. What is a reasonable action, or a reasonably remunerative rate for carriage, at a given time and place, necessarily has relation to the circumstances and conditions bearing upon the actor or upon the carrier at the time and place. The appellant does not say, and the railroad commission of Georgia did not say, and none of the witnesses called by the appellant in the cases have said, that the rates at any of the points, considered separately, are too high or are too low, or are not reasonable and just.
The burden of their complaint is that the relation between the rates is wrong. It is not insisted, or even suggested, that the rates to the longer distance points should or can be raised. Nor is it now asked that the rates to the shorter distance points shall be lowered. It is asked only that the appellees shall be required to cease and desist from charging more for the shorter than for the longer haul. This requirement seems to have possible relation only to the fourth section of the act. It can not adequately meet the requirements of the first and third sections, if either of them is violated by the conduct from which the appellees are required to “cease and desist.” If the mere charging of a greater rate for the shorter than for the longer haul gives an undue and unjust preference to the longer distance points, and subjects the shorter distance points to any undue prejudice or disadvantage, it is difficult to see how the charging exactly the same rate for the shorter haul that is charged for the longer shall escape condemnation. The appellees are held to be subject to the act and to the jurisdiction of the Commission, because, by express or implied agreement, they have consented to carry freight on through bills of lading from points beyond the State of Georgia to points within that State. The sixth section of the act to regulate commerce, as originally passed and as since amended, recognizes the existence and validity of such contracts or agreements, express or implied, and makes certain provisions with reference to the action of the connecting carriers parties thereto. The act does not, however, require such connecting carriers to enter into such agreements. Nor does it authorize the Commission to require through routing and billing, or to establish and fix through rates over connecting lines.
In fixing the rates to these intermediate points, the through rate to that competitive point, which, combined with the local rate from the competitive point to the point of destination, will give the lowest through rate to the noncompetitive point,