ICC v. Alabama Midland Railway Co.
168 U.S. 144 (1897)

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U.S. Supreme Court

ICC v. Alabama Midland Railway Co., 168 U.S. 144 (1897)

Interstate Commerce Commission v.

Alabama Midland Railway Company

No. 203

Argued March 12, 15-16, 1897

Decided November 8, 1897

168 U.S. 144

Syllabus

Cincinnati, New Orleans & Texas Pacific Railway v. Interstate Commerce Commission,162 U. S. 184, and Interstate Commerce Commission v. Cincinnati. New Orleans & Texas Pacific Railway Company,167 U. S. 479, adhered to, to the points that Congress has not conferred upon the Interstate Commerce Commission the legislative power of prescribing rates, either maximum, or minimum, or absolute, and that, as it did not give the express power to the Commission, it did not intend to secure the same result indirectly by empowering that tribunal, after having determined what, in reference to the past, were reasonable and just rates, to obtain from the courts a peremptory order that in the future the railroad companies should follow the rates thus determined to have been in the past reasonable and just.

Competition is one of the most obvious and effective circumstances that make the conditions under which a long and short haul is performed substantially dissimilar, and as such must have been in the contemplation

Page 168 U. S. 145

of Congress in the passage of the Act to Regulate Commerce. This is no longer an open question in this Court.

The conclusion which the Court reached in Interstate Commerce Commission v. Baltimore & Ohio Railroad,145 U. S. 263, and Wight v. United States,167 U. S. 512, that, in applying the provisions of §§ 3, 4 of the Interstate Commerce Act of February 4, 1887, c. 104, 24 Stat. 379, making it unlawful for common carriers to make or give any undue or unreasonable preference or advantage to any particular person or locality or to charge or receive any greater compensation in the aggregate for the transportation of passengers or of like kind of property, under substantially similar circumstances and conditions, for a shorter than for a longer distance over the same line in the same direction, competition which affects rates is one of the matters to be considered, is not applicable to the second section of the act.

The purpose of the second section of that act is to enforce equality between shippers over the same line, and to prohibit any rebate or other device by which two shippers, shipping over the same line, the same distance, under the same circumstances of carriage, are compelled to pay different prices therefor, and it was held in Wight v. United States,167 U. S. 512, that the phrase "under substantially similar circumstances and conditions," as used in the second section, refers to the matter of carriage, and does not include competition between rival routes.

This view is not open to the criticism that different meanings are attributed to the same words when found in different sections of the act; for, as the purposes of the several sections are different, the phrase under consideration must be read, in the second section, as restricted to the case of shippers over the same road, thus leaving no room for the operation of competition, but in the other sections, which cover the entire tract of interstate and foreign commerce, a meaning must be given to the phrase wide enough to include all the facts that have a legitimate bearing on the situation -- among which is the fact of competition when it affects rates.

The mere fact of competition, no matter what its character or extent, does not necessarily relieve the carrier from the restraints of the third and fourth sections; but these sections are not so stringent and imperative as to exclude in all cases the matter of competition from consideration in determining the questions of "undue or unreasonable preference or advantage," or what are "substantially similar circumstances and conditions." The competition may in some cases be such as, having due regard to the interests of the public and of the carrier, ought justly to have effect upon the rates, and in such cases there is no absolute rule which prevents the Commission or the courts from taking that matter into consideration.

The conclusions of the Court on this branch of the case are (1) that competition between rival routes is one of the matters which may lawfully be considered in making rates for interstate commerce, and (2) that substantial dissimilarity of circumstances and conditions may justify

Page 168 U. S. 146

common carriers in charging greater compensation for the transportation of like kinds of property for a shorter than for a longer distance over the same line, in such commerce.

Whether, in particular instances, there has been an undue or unreasonable prejudice or preference, or whether the circumstances and conditions of the carriage have been substantially similar or otherwise, are questions of fact depending on the matters proved in each case.

The circuit court had jurisdiction to review the finding of the Interstate Commerce Commission on these questions of fact, giving effect to those findings as prima facie evidence of the matters therein stated, and this Court is not convinced that the courts below erred in their estimate of the evidence, and perceives no error in the principles of law on which they proceeded in its application.

On the 27th day of June, 1892, the Board of Trade of Troy, Alabama, filed a complaint before the Interstate Commerce Commission at Washington, D.C., against the Alabama Midland Railway Company and the Georgia Central Railroad Company and their connections, claiming that, in the rates charged for transportation of property by the railroad companies mentioned and their connecting lines, there is a discrimination against the Town of Troy in violation of the terms and provisions of the Interstate Commerce Act of Congress of 1887.

The general ground of complaint is that, Troy being in active competition for business with Montgomery, the defendant lines of railway unjustly discriminate in their rates against the former, and give the latter an undue preference or advantage in respect to certain commodities and classes of traffic. The specific charges insisted on at the hearing, and to which the testimony relates, are:

1. That the Alabama Midland Railway, and the defendant roads, forming lines with it from Baltimore, New York, and the East to Troy and Montgomery, charge and collect a higher rate on shipments of class goods from those cities to Troy than on such shipments through Troy to Montgomery, the latter being the longer-distance point, by 52 miles.

2. That the Alabama Midland Railway and Georgia Central Railroad and their connections unjustly discriminate against Troy and in favor of Montgomery in charging and collecting $3.22 per ton to Troy on phosphate rock shipped

Page 168 U. S. 147

from the South Carolina and Florida fields, and only $3.00 per ton on such shipments to Montgomery, the longer-distance point by both of said roads, and that all phosphate rock carried from said fields to Montgomery over the road of the Alabama Midland has to be hauled through Troy.

3. That the rates on cotton, as established by said two roads and their connections, on shipments to the Atlantic seaports, Brunswick, Savannah, and Charleston, unjustly discriminate against Troy and in favor of Montgomery, in that the rate per one hundred ponds from Troy is forty-seven cents, and that from Montgomery, the longer-distance point, is only forty cents, and that such shipments from Montgomery over the road of the Alabama Midland have to pass through Troy.

4. That on shipments for export from Montgomery, and other points within the so-called "jurisdiction" of the Southern Railway & Steamship Association, to the Atlantic seaports, Brunswick, Savannah, Charleston, West Point, and Norfolk, a lower rate is charged than the regular published tariff rate to such seaports, and that Montgomery and such other points are allowed by the rules of said association to ship through to Liverpool via any of these seaports at the lowest through rates on the day of shipment, which may be less than the sum of the regular published rail rate and the ocean rate via the port of shipment; that this reduction is taken from the published tariff rail rate to the port of shipment; that this privilege being denied to Troy is an unjust discrimination against that town, in favor of Montgomery and such other favored cities, and that it is also a discrimination against shipments which terminate at such seaports, in favor of shipments for export.

5. That Troy is unjustly discriminated against in being charged on shipments of cotton via Montgomery to New Orleans the full local rate to Montgomery by both the Alabama Midland and Georgia Central.

6. That the rates on "class" goods from Western and Northwestern points, established by the defendants forming lines from those points to Troy, are relatively unjust and discriminatory

Page 168 U. S. 148

as against Troy when compared with the rates over such lines to Montgomery and Columbus.

The Commission, having heard this complaint on the evidence theretofore taken, ordered, on the 15th day of August, 1893, the roads participating in the traffic involved in this case "to cease and desist" from charging, demanding, collecting, or receiving any greater compensation in the aggregate for services rendered in such transportation than is specified as follows, to-wit:

1. On class goods shipped from Louisville, Kentucky, St. Louis, Missouri, or Cincinnati, Ohio, to Troy aforesaid, no higher rate of charge than is now charged and collected on such shipments to Columbus, Georgia, and Eufaula, Alabama.

2. On shipments of cotton from Troy aforesaid through Montgomery, Alabama, to New Orleans, Louisiana, no higher rate of charge than fifty cents per one hundred pounds.

3. On shipments of cotton from Troy aforesaid for export through the Atlantic seaports, to-wit, Brunswick, Savannah, Charleston, West Point, or Norfolk, no higher rate of charge to these ports than is charged and collected on such shipments from Montgomery aforesaid.

4. On shipments of cotton from Troy aforesaid to the ports of Brunswick, Savannah, or Charleston, no higher rate of charge than is charged and collected on such shipments from Montgomery aforesaid through Troy to said ports.

5. On shipments of class goods from New York, Baltimore, or other Northeastern points to Troy aforesaid, no higher rate of charge than is charged and collected on such shipments through Troy to Montgomery aforesaid.

6. On shipments of phosphate rock from South Carolina and Florida fields to Troy aforesaid, no higher rate of charge than is charged and collected on such shipments through Troy to Montgomery aforesaid.

The defendants having failed to heed these orders, the Commission thereupon filed this bill of complaint in the Circuit Court of the United States for the Middle district of Alabama, in equity, to compel obedience to the same. On the hearing in said court, the bill of complaint was dismissed, and

Page 168 U. S. 149

complainant, the Interstate Commerce Commission, appealed the cause to the United States Circuit Court of Appeals for the Fifth Judicial Circuit at New Orleans, Louisiana. And thereupon, in said last-named court, on the second day of June, 1896, the decree of the said Circuit Court of the United States for the Middle district of Alabama was in all things duly affirmed, and from this judgment and decree the appellant has appealed to this Court.

Page 168 U. S. 161

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