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
MR. JUSTICE SHIRAS, after stating the facts in the foregoing
language, delivered the opinion of the Court.
Several of the assignments of error complain of the action of
the circuit court of appeals in not rendering a decree for the
enforcement of those portions of the order of the Interstate
Commerce Commission which prescribed rates to be thereafter charged
by the defendant companies for services performed in the
transportation of goods.
Discussion of those assignments is rendered unnecessary by the
recent decisions of this Court wherein it has been held,
Page 168 U. S. 162
after elaborate argument, 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.
Cincinnati, New Orleans & Texas
Pacific Railway v. Interstate Commerce Commission,
162 U. S. 184;
Interstate Commerce Commission v. Cincinnati, New Orleans &
Texas Pacific Railway, 167 U. S. 479.
Errors are likewise assigned to the action of the court in
having failed and refused to affirm and enforce the report and
opinion of the Commission wherein it was found and decided, among
other things, that the defendant common carriers which participate
in the transportation of class goods to Troy from Louisville, St.
Louis, and Cincinnati, and from New York, Baltimore, and other
Northeastern points, and the defendant common carriers which
participate in the transportation of phosphate rock from South
Carolina and Florida to Troy, and the defendant common carriers
which participate in the transportation of cotton from Troy to the
ports of New Orleans, Brunswick, Savannah, Charleston, West Point,
or Norfolk, as local shipments, or for export, have made greater
charges, under substantially similar circumstances and conditions
for the shorter distance to or from Troy than for longer distances
over the same lines in the same direction, and have unjustly
discriminated in rates against Troy, and subjected said place and
dealers and shippers therein to undue and unreasonable prejudice
and disadvantage in favor of Montgomery, Eufaula, Columbus, and
other places and localities, and dealers and shippers therein, in
violation of the provisions of the Act to Regulate Commerce.
Whether competition between lines of transportation to
Montgomery, Eufaula, and Columbus justifies the giving to
Page 168 U. S. 163
those cities a preference or advantage in rates over Troy, and,
if so, whether such a state of facts justifies a departure from
equality of rates without authority from the Interstate Commerce
Commission under the proviso to the fourth section of the act, are
questions of construction of the statute, and are to be determined
before we reach the question of fact in this case.
It is contended in the briefs filed on behalf of the Interstate
Commission that the existence of rival lines of transportation, and
consequently of competition for the traffic, and not facts to be
considered by the Commission or by the courts when determining
whether property transported over the same line is carried under
"substantially similar circumstances and conditions," as that
phrase is found in the fourth section of the act.
Such evidently was not the construction put upon this provision
of the statute by the Commission itself in the present case, for
the record discloses that the Commission made some allowance for
the alleged dissimilarity of circumstances and conditions, arising
out of competition and situation, as affecting transportation to
Montgomery and Troy, respectively, and that among the errors
assigned is one complaining that the court erred in not holding
that the rates prescribed by the Commission in its order made due
allowance for such dissimilarity.
So, too, in case In re Louisville & Nashville Railroad, 1
I.C.C. 77, in discussing the long and short haul clause, it was
said by the Commission, per Judge Cooley, that
"it is impossible to resist the conclusion that in finally
rejecting the 'long and short haul clause' of the house bill, which
prescribed an inflexible rule, not to be departed from in any case,
and retaining in substance the fourth section as it had passed the
Senate, both houses understood that they were not adopting a
measure of strict, prohibition in respect to charging more for the
shorter than for the longer distance, but that they were instead
leaving the door open for exceptions in certain cases, and, among
others, in cases where the circumstances and conditions of the
traffic were affected by the
Page 168 U. S. 164
element of competition, and where exceptions might be a
necessity if the competition was to continue. And water competition
was, beyond doubt, especially in view."
It is no doubt true that, in a later case, Railroad Commission
of Georgia v. Clyde Steamship Co., 5 I.C.C. 327, the Commission
somewhat modified their holding in the Louisville & Nashville
Railroad Company case, just cited, by attempting to restrict the
competition that it is allowable to consider to the cases of
competition with water carriers, competition with foreign
railroads, and competition with railroad lines wholly in a single
state, but the principle that competition in such cases is to be
considered is affirmed.
That 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 of Congress in the passage of the Act to
Regulate Commerce, has been held by many of the circuit courts. It
is sufficient to cite a few of the number:
Ex Parte
Koehler, 31 F. 319;
Missouri Pacific Railway v. Texas
& Pacific Railway, 31 F. 862;
Interstate Commerce
Commission v. Atchison, Topeka &c. Railroad, 50 F. 306;
Interstate Commerce Commission v. New Orleans & Texas
Pacific Railroad, 56 F. 943;
Behlmer v. Louisville &
Nashville Railroad, 71 F. 835;
Interstate Commerce
Commission v. Louisville & Nashville Railroad, 73 F.
409.
In construing statutory provisions forbidding railway companies
from giving any undue or unreasonable preference or advantage to or
in favor of any particular person or company or any particular
description of traffic in any respect whatever, the English courts
have held, after full consideration, that competition between rival
lines is a fact to be considered, and that a preference or
advantage thence arising is not necessarily undue or unreasonable.
Denaby Main Colliery Co. v. Manchester, Sheffield &
Lincolnshire Railway, 11 App.Cas. 97;
Phipps v. London
& North Western Railway, 2 Q.B.D. 229.
But the question whether competition, as affecting rates, is an
element for the Commission and the courts to consider in
Page 168 U. S. 165
applying the provisions of the Act to Regulate Commerce, is not
an open question in this Court.
In
Interstate Commerce Commission v. Baltimore & Ohio
Railroad, 145 U. S. 263, it
was said, approving observations made by Jackson, Circuit Judge (43
F. 37), that the Act to Regulate Commerce was
"not designed to prevent competition between different roads, or
to interfere with the customary arrangements made by railway
companies for reduced fares in consideration of increased mileage
where such reduction did not operate as an unjust discrimination
against other persons traveling over the road; that it was not
intended to ignore the principle that one can sell at wholesale
cheaper than at retail; that it is not all discriminations or
preferences that fall within the inhibitions of the statute -- only
such as are unjust or unreasonable,"
and accordingly it was held that the issue by a railway company,
engaged in interstate commerce, of a "party-rate ticket" for the
transportation of ten or more persons from a place situated in one
state or territory to a place situated in another state or
territory at a rate less than that charged to a single individual
for a like transportation on the same trip does not thereby make
"an unjust or unreasonable charge" against such individual within
the meaning of the first section of the Act to Regulate Commerce,
nor make "an unjust discrimination" against him within the meaning
of the second section, nor give "an undue or unreasonable
preference or advantage" to the purchasers of the party-rate ticket
within the meaning of the third section.
In
Texas & Pacific Railway v. Interstate Commerce
Commission, 162 U. S. 197, it
was held that,
"in passing upon questions arising under the act, the tribunal
appointed to enforce its provisions, whether the Commission or the
courts, is empowered to fully consider all the circumstances and
conditions that reasonably apply to the situation, and that, in the
exercise of its jurisdiction, the tribunal may and should consider
the legitimate interests as well of the carrying companies as of
the traders and shippers, and, in considering whether any
particular locality is subjected to an undue preference or
disadvantage, the welfare of the communities occupying the
localities where the
Page 168 U. S. 166
goods are delivered is to be considered, as well as that of the
communities which are in the locality of the place of shipment;
that among the circumstances and conditions to be considered, as
well in the case of traffic originating in foreign ports as in the
case of traffic originating within the limits of the United States,
competition that affects rates should be considered, and in
deciding whether rates and charges, made at a low rate to secure
freights which would otherwise go by other competitive routes, are
or are not undue and unjust, the fair interests of the carrier
companies and the welfare of the community which is to receive and
consume the commodities are to be considered."
To prevent misapprehension, it should be stated that the
conclusion to which we are led by these cases -- that, in applying
the provisions of the third and fourth sections of the act which
make 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.
As we have shown in the recent case of
Wight v. United
States, 167 U. S. 512, the
purpose of the second section 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 we there held 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 what we hold is that, as the purposes of the
several sections are different, the phrase under
Page 168 U. S. 167
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 that, 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
we find the fact of competition when it affects rates.
In order further to guard against any misapprehension of the
scope of our decision, it may be well to observe that we do not
hold that the mere fact of competition, no matter what its
character or extent, necessarily relieves the carrier from the
restraints of the third and fourth sections, but only that 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.
It is further contended on behalf of the appellant that the
courts below erred in holding, in effect, that competition of
carrier with carrier, both subject to the Act to Regulate Commerce,
will justify a departure from the rule of the fourth section of the
act without authority from the Interstate Commerce Commission,
under the proviso to that section.
In view of the conclusion hereinbefore reached, the proposition
comes to this: that when circumstances and conditions are
substantially dissimilar, the railway companies can only avail
themselves of such a situation by an application to the
Commission.
The language of the proviso is as follows:
"That upon application to the Commission appointed under the
provisions of this act, such common carrier may, in special cases,
after investigation by the Commission, be authorized to
Page 168 U. S. 168
charge less for longer than shorter distances for the
transportation of persons or property, and the Commission may from
time to time prescribe the extent to which such designated common
carrier may be relieved from the operation of this section of this
act."
The claim now made for the Commission is that the only body
which has the power to relieve railroad companies from the
operation of the long and short haul clause on account of the
existence of competition, or any other similar element which would
make its application unfair, is the Commission itself, which is
bound to consider the question, upon application by the railroad
company, but whose decision is discretionary and unreviewable.
The first observation that occurs on this proposition is that
there appears to be no allegation in the bill or petition raising
such an issue. The gravamen of the complaint is that the defendant
companies have continued to charge and collect a greater
compensation for services rendered in transportation of property
than is prescribed in the order of the Commission. It was not
claimed that the defendants were precluded from showing in the
courts that the difference of rates complained of was justified by
dissimilarity of circumstances and conditions by reason of not
having applied to the Commission to be relieved from the operation
of the fourth section.
Moreover, this view of the scope of the proviso to the fourth
section does not appear to have ever been acted upon or enforced by
the Commission. On the contrary, in the case of In re Louisville
& Nashville Railroad v. Interstate Commerce Commission, 1
I.C.C. 57, the Commission, through Judge Cooley, said, in speaking
of the effect of the introduction into the fourth section of the
words, "under substantially similar circumstances and conditions,"
and of the meaning of the proviso:
"That which the act does not declare unlawful must remain lawful
if it was so before, and that which it fails to forbid the carrier
is left at liberty to do without permission of anyone. . . . The
charging or receiving the greater compensation for the shorter than
for the longer haul is seen to be forbidden only when both are
under substantially similar
Page 168 U. S. 169
circumstances and conditions, and therefore if in any case the
carrier, without first obtaining an order of relief, shall depart
from the general rule, its doing so will not alone convict it of
illegality, since, if the circumstances and conditions of the two
hauls are dissimilar, the statute is not violated. . . . Beyond
question, the carrier must judge for itself what are the
'substantially similar circumstances and conditions' which preclude
the special rate, rebate, or drawback which is made unlawful by the
second section, since no tribunal is empowered to judge for it
until after the carrier has acted, and then only for the purpose of
determining whether its action constitutes a violation of law. The
carrier judges on peril of the consequences, but the special rate,
rebate, or drawback which it grants is not illegal when it turns
out that the circumstances and conditions were not such as to
forbid it; and, as Congress clearly intended this, it must also,
when using the same words in the fourth section, have intended that
the carrier whose privilege was in the same way limited by them
should in the same way act upon its judgment of the limiting
circumstances and conditions."
The view thus expressed has been adopted in several of the
circuit courts.
Interstate Commerce Commission v. Atchison,
Topeka &c. Railroad, 50 F. 300;
Interstate Commerce
Commission v. Cincinnati, N.O. & Tex. Pac. Railway, 56 F.
925, 942;
Behlmer v. Louisville & Nashville Railroad,
71 F. 839. And we do not think the courts below erred in following
it in the present case. We are unable to suppose that Congress
intended, by the fourth section and the proviso thereto, to forbid
common carriers, in cases where the circumstances and conditions
are substantially dissimilar, from making different rates until and
unless the Commission shall authorize them so to do. Much less do
we think that it was the intention of Congress that the decision of
the Commission, if applied to, could not be reviewed by the courts.
The provisions of section 16 of the act, which authorize the court
to
"proceed to hear and determine the matter speedily as a court of
equity, and without the formal pleadings and proceedings applicable
to ordinary suits in equity, but in such manner as to do
justice
Page 168 U. S. 170
in the premises, and to this end, such court shall have power,
if it think fit, to direct and prosecute in such mode and by such
persons as it may appoint, all such inquiries as the court may
think needful to enable it to form a just judgment in the matter of
such petition,"
extend as well to an inquiry or proceeding under the fourth
section as to those arising under the other sections of the
act.
Upon these conclusions, that competition between rival routes is
one of the matters which may lawfully be considered in making
rates, and that substantial dissimilarity of circumstances and
conditions may justify 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, we are
brought to consider whether, upon the evidence in the present case,
the courts below erred in dismissing the Interstate Commerce
Commission's complaint.
As the third section of the act, which forbids the making or
giving any undue or unreasonable preference or advantage to any
particular person or locality, does not define what, under that
section, shall constitute a preference or advantage to be undue or
unreasonable, and as the fourth section, which forbids the charging
or receiving greater compensation in the aggregate for the
transportation of like kinds of property for a shorter than for a
longer distance over the same line under substantially similar
circumstances and conditions, does not define or describe in what
the similarity or dissimilarity of circumstances and conditions
shall consist, it cannot be doubted that 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.
Denaby Main Colliery Company v. Manchester &c. Railway
Co., 3 Railway & Canal Traffic Cases 426;
Phipps v.
London & North Western Railway, 1892, 2 Q.B.D. 229;
Cincinnati, N. O. & Tex. Pac. Railway Co. v. Interstate
Commerce Commission, 162 U. S. 184,
162 U. S. 194;
Texas & Pacific Railway v. Interstate Commerce
Commission, 162 U. S. 197,
162 U. S.
235.
Page 168 U. S. 171
The circuit court, after a consideration of the evidence,
expressed its conclusion thus:
"In any aspect of the case, it seems impossible to consider this
complaint of the board of trade of Troy against the defendant
railroad companies, particularly the Midland and Georgia Central
Railroads, in the matter of the charges upon property transported
on their roads to or from points east or west of Troy, as specified
and complained of, obnoxious to the fourth or any other section of
the Interstate Commerce Act. The conditions are not substantially
the same, and the circumstances are dissimilar, so that the case is
not within the statute. The case made here is not the case as it
was made before the Commission. New testimony has been taken, and
the conclusion reached is that the bill is not sustained, that it
should be dismissed, and it is so ordered."
69 F. 227.
The Circuit court of appeals, in affirming the decree of the
circuit court, used the following language:
"Only two railroads, the Alabama Midland and the Georgia
Central, reach Troy. Each of these roads has connection with other
lines, parties hereto, reaching all the long distance markets
mentioned in these proceedings. The Commission finds that no
departure from the long and short haul rule of the fourth section
of the statute, as against Troy, as the shorter distance point, and
in favor of Montgomery, as the longer distance point, appears to be
chargeable to the Georgia Central. The rates in question, when
separately considered, are not unreasonable or unjust. As a matter
of business necessity, they are the same by each of the railroads
that reach Troy. The Commission concludes that, as related to the
rates to Montgomery, Columbus, and Eufaula, the rates to and from
Troy unjustly discriminate against Troy, and, in the case of the
Alabama Midland, violate the long and short haul rule."
"The volume of population and of business at Montgomery is many
times larger than it is at Troy. There are many more railway lines
running to and through Montgomery, connecting with all the distant
markets. The Alabama River, open all the year, is capable, if need
be, of bearing to Mobile, on the sea, the burden of the goods of
every class that
Page 168 U. S. 172
pass to or from Montgomery. The competition of the railway lines
is not stifled, but is fully recognized, intelligently and honestly
controlled and regulated, by the traffic association, in its
schedule of rates. There is no suggestion in the evidence that the
traffic managers who represent the carriers that are members of
that association are incompetent, or under the bias of any personal
preference for Montgomery or prejudice against Troy, that has led
them, or is likely to lead them, to unjustly discriminate against
Troy. When the rates to Montgomery were higher a few years ago than
now, actual active water-line competition by the river came in, and
the rates were reduced to the level of the lowest practical paying
water rates, and the volume of carriage by the river is now
comparatively small, but the controlling power of that water line
remains in full force, and must ever remain in force as long as the
river remains navigable to its present capacity. And this water
line affects, to a degree less or more, all the shipments to or
from Montgomery from or to all the long distance markets. It would
not take cotton from Montgomery to the South Atlantic ports for
export, but it would take the cotton to the points of its ultimate
destination, if the railroad rates to foreign marts through the
Atlantic ports were not kept down to or below the level of
profitable carriage by water from Montgomery through the port of
Mobile. The volume of trade to be competed for, the number of
carriers actually competing for it, a constantly open river present
to take a large part of it whenever the railroad rates rise up to
the mark of profitable water carriage, seem to us, as they did to
the circuit court, to constitute circumstances and conditions at
Montgomery substantially dissimilar from those existing at Troy,
and to relieve the carriers from the charges preferred against them
by its board of trade. We do not discuss the third and fourth
contentions of the counsel for the appellant further than to say
that, within the limits of the exercise of intelligent good faith
in the conduct of their business, and subject to the two leading
prohibitions that their charges shall not be unjust or unreasonable
and that they shall not unjustly discriminate so as to give undue
preference
Page 168 U. S. 173
or disadvantage to traffic or persons similarly circumstanced,
the Act to Regulate Commerce leaves common carriers, as they were
at the common law, free to make special rates looking to the
increase of their business, to classify their traffic, to adjust
and apportion their rates so as to meet the necessities of commerce
and of their own situation and relation to it, and generally to
manage their important interests upon the same principles which are
regarded as sound and adopted in other trades and pursuits. The
carriers are better qualified to adjust such matters than any court
or board of public administration, and, within the limitations
suggested, it is safe and wise to leave to their traffic managers
the adjusting or dissimilar circumstances and conditions to their
business."
74 F. 715.
The last sentence in this extract is objected to by the
Commission's counsel as declaring that the determination of the
extent to which discrimination is justified by circumstances and
conditions should be left to the carriers. If so read, we should
not be ready to adopt or approve such a position. But we understand
the statement, read in the connection in which it occurs, to mean
only that when once a substantial dissimilarity of circumstances
and conditions has been made to appear, the carriers are, from the
nature of the question, better fitted to adjust their rates to suit
such dissimilarity of circumstances and conditions than courts or
commissions, and when we consider the difficulty, the practical
impossibility, of a court or a commission taking into view the
various and continually changing facts that bear upon the question,
and intelligently regulating rates and charges accordingly, the
observation objected to is manifestly just. But it does not mean
that the action of the carriers in fixing and adjusting the rates
in such instances is not subject to revision by the Commission and
the courts when it is charged that such action has resulted in
rates unjust or unreasonable, or in unjust discriminations and
preferences. And such charges were made in the present case, and
were considered, in the first place by the Commission, and
afterwards by the circuit court and by the circuit court of
appeals.
Page 168 U. S. 174
The first contention we encounter upon this branch of the case
is that the circuit court had no jurisdiction to review the
judgment of the Commission upon this question of fact; that the
court is only authorized to inquire whether or not the Commission
has misconstrued the statute, and thereby exceeded its power; that
there is no general jurisdiction to take evidence upon the merits
of the original controversy; and, especially, that questions under
the third section are questions of fact, and not of power, and
hence unreviewable.
We think this contention is sufficiently answered by simply
referring to those portions of the act which provide that, when the
court is invoked by the Commission to enforce its lawful orders or
requirements, the court shall proceed as a court of equity to hear
and determine the matter, and in such manner as to do justice in
the premises.
In the case of
Cincinnati, N.O. & Texas Pac. Railway v.
Interstate Commerce Commission, 162 U.
S. 184, the findings of the Commission were overruled by
the circuit court, after additional evidence taken in the court,
and the decision of the circuit court was reviewed in the light of
the evidence, and reversed, by the circuit court of appeals, and
this Court, in reference to the argument that the Commission had
not given due weight to the facts that tended to show that the
circumstances and conditions were so dissimilar as to justify the
rates charged, held that as the question was one of fact,
peculiarly within the province of the Commission, and as its
conclusions had been accepted and approved by the circuit court of
appeals, and as this Court found nothing in the record that made it
our duty to draw a different conclusion, the decree of the circuit
court of appeals should be affirmed. Such a holding clearly implies
that there was power in the courts below to consider and apply the
courts below to court to review their decisions.
So, in the case of
Texas & Pacific Railway v. Interstate
Commerce Commission, 162 U. S. 197, the
decision of the circuit court of appeals, which affirmed the
validity of the order of the Commission upon the ground that, even
if ocean competition should be regarded as creating a dissimilar
condition, yet that
Page 168 U. S. 175
in the case under consideration the disparity in rates was too
great to be justified by that condition, was reversed by this Court
not because the circuit court had no jurisdiction to consider the
evidence and thereupon to affirm the validity of the order of the
Commission, but because that issue was not actually before the
court, and that no testimony had been adduced by either party on
such an issue, and it was said that the language of the act
authorizing the court to hear and determine the matter as a case of
equity "necessarily implies that the court is not concluded by the
findings or conclusions of the Commission."
Accordingly our conclusion is that it was competent in the
present case for the circuit court, in dealing with the issues
raised by the petition of the Commission and the answers thereto,
and for the circuit court of appeals on the appeal, to determine
the case upon a consideration of the allegations of the parties and
of the evidence adduced in their support, giving effect, however,
to the findings of fact in the report of the Commission as
prima facie evidence of the matters therein stated.
It has been uniformly held by the several circuit courts and the
circuit courts of appeal in such cases that they are not restricted
to the evidence adduced before the Commission, nor to a
consideration merely of the power of the Commission to make the
particular order under question, but that additional evidence may
be put in by either party, and that the duty of the court is to
decide, as a court of equity, upon the entire body of evidence.
Coming at last to the questions of fact in this case, we
encounter a large amount of conflicting evidence. It seems
undeniable, as the effect of the evidence on both sides, that an
actual dissimilarity of circumstances and conditions exists between
the cities concerned, both as respects the volume of their
respective trade and the competition, affecting rates, occasioned
by rival routes by land and water. Indeed, the Commission itself
recognized such a state of facts, by making an allowance in the
rates prescribed for dissimilarity resulting from competition, and
it was contended on behalf of the Commission,
Page 168 U. S. 176
both in the courts below and in this Court, that the competition
did not justify the discriminations against Troy to the extent
shown, and that the allowance made therefor by the Commission was a
due allowance.
The issue is thus restricted to the question of the
preponderance of the evidence on the respective sides of the
controversy. We have read the evidence disclosed by the record and
have endeavored to weigh it with the aid of able and elaborate
discussions by the respective counsel.
No useful purpose would be served by an attempt to formally
state and analyze the evidence, but the result is that we are not
convinced that the courts below erred in their estimate of the
evidence, and that we perceive no error in the principles of law on
which they proceeded in the application of the evidence.
The decree of the circuit court of appeals is accordingly
Affirmed.
MR. JUSTICE HARLAN, dissenting.
I dissent from the opinion and judgment in this case. Taken in
connection with other decisions defining the powers of the
Interstate Commerce Commission, the present decision, it seems to
me, goes far to make that Commission a useless body, for all
practical purposes, and to defeat many of the important objects
designed to be accomplished by the various enactments of Congress
relating to interstate commerce. The Commission was established to
protect the public against the improper practices of transportation
companies engaged in commerce among the several states. It has been
left, it is true, with power to make reports and to issue protests.
But it has been shorn, by judicial interpretation, of authority to
do anything of an effective character. It is denied many of the
powers which, in my judgment, were intended to be conferred upon
it. Besides, the acts of Congress are now so construed as to place
communities on the lines of interstate commerce at the mercy of
competing railroad companies engaged in such commerce. The judgment
in this case, if I do not misapprehend its scope and effect,
Page 168 U. S. 177
proceeds upon the ground that railroad companies, when
competitors for interstate business at certain points, may, in
order to secure traffic for and at those points, establish rates
that will enable them to accomplish that result, although such
rates may discriminate against intermediate points. Under such an
interpretation of the statutes in question, they may well be
regarded as recognizing the authority of competing railroad
companies engaged in interstate commerce -- when their interests
will be subserved thereby -- to build up favored centers of
population at the expense of the business of the country at large.
I cannot believe that Congress intended any such result, nor do I
think that its enactments, properly interpreted, would lead to such
a result.