A state may insist upon equality of rates, and although a state
may not compel a railroad company to do business at a loss, and
even though the company may, against the power of the state,
establish rates which afford reasonable compensation, if it
voluntarily establishes local rates for some shippers -- even
though under the guise of a rebilling rate on interstate shipments
-- it cannot resist the power of the state to enforce the same rate
for all shippers or claim that the rate so fixed by the Commission,
acting under authority of the state, deprives it of its property
without due process of law.
86 Miss. 667 affirmed.
On November 16, 1903, the Railroad Commission of Mississippi, by
written order, directed the Alabama & Vicksburg Railway
Company, hereinafter called the Vicksburg Company, to put into
effect, over its line of road from Vicksburg to Meridian, a flat
rate of 3 1/2 cents per 100 pounds on grain and grain products.
December 3, 1903, an application was made by the railway company to
the Chancellor of the Fifth Chancery District of the state to
restrain the enforcement of this order. July 11, 1904, a temporary
injunction issued on the filing of the bill was dissolved, and the
bill dismissed. On appeal to the supreme court of the state, this
decree of the chancellor was affirmed (86 Miss. 667), and thereupon
this writ of error was sued out.
Page 203 U. S. 499
MR. JUSTICE BREWER delivered the opinion of the Court.
The facts in this case are few. The company made what it called
a "rebilling rate" of 3 1/2 cents per 100 pounds on grain and grain
products shipped from Vicksburg to Meridian, that rate, however,
being applicable only in case of shipments over the Vicksburg,
Shreveport & Pacific Railroad, hereinafter called the
Shreveport Road. Instead of being enforced as solely a rebilling
rate, the Vicksburg merchant who received a car load of grain or
grain products over the Shreveport Road was permitted to either
forward it over the plaintiff's road to Meridian, or at any time
within ninety days, in lieu thereof, send a similar carload, no
matter whence received, from Vicksburg to Meridian at the same
rate. It was in consequence of this effort on the part of the
plaintiff to favor shippers who brought grain to Vicksburg over the
Shreveport Road that the
Page 203 U. S. 500
Railroad Commission made the order declaring that all grain
products shipped from Vicksburg to Meridian should be at the same
rate, 3 1/2 cents per 100 pounds. The order of the Commission
merely meant this: if a Vicksburg merchant who received a carload
of grain over the Shreveport Road was permitted by the railway
company to ship over the Vicksburg Road to Meridian any other
carload 3 1/2 cents per 100 pounds, every other merchant in
Vicksburg should be permitted to ship at the same rate, although he
had had no dealings with the Shreveport Company. It is unnecessary
to inquire whether the order could be sustained if it appeared that
the plaintiff received only 3 1/2 cents as its share of a total
rate on through shipments to Meridian from the Northwest by the
Shreveport Road, for here, under the guise of a rebilling rate, the
Vicksburg merchant who dealt with this Western road was given a
rate of 3 1/2 percent on any grain that he might see fit to ship to
Meridian. While it may be true that a local railway's share of an
interstate rate may not be a legitimate basis upon which a state
railroad commission can establish and enforce a purely local rate,
yet whenever, under the guise or pretense of a rebilling rate, some
merchants are given a low local rate, the Commission is justified
in making that rate the rate for all. It is not bound to inquire
whether it furnishes adequate return to the railway company, for
the state may insist upon equality, to be enforced under the same
conditions against all who perform a public or
quasi-public service. When voluntarily the Vicksburg
Company established a local rate of 3 1/2 percent from Vicksburg to
Meridian for those who had, within 90 days, made a shipment over
the Shreveport Road, it estopped itself from complaining of an
order making that rate applicable to all shipments, no matter
whence they arose, and in favor of all merchants, whether those
transporting over the Shreveport Road or not.
We are not unaware of our decision in
Texas & Pacific
Railway v. Interstate Commerce Commission, 162 U.
S. 197, in which, on review of the Interstate Commerce
Act, we held that
Page 203 U. S. 501
a mere inequality of rate was not always proof of undue
discrimination, but we were passing upon an act of Congress, and
seeking to ascertain its intent and scope. There was no intimation
that it was not within the power of Congress to prescribe an
absolute equality of rate. In the present case, we are not
construing an act of the State of Mississippi or passing upon the
powers which by it are given to the state railroad commission.
Those matters are settled by the decision of the supreme court of
the state, and the question we have to consider is the power of the
state to enforce an equality of local rates as between all parties
shipping for the same distance over the same road. That a state has
such power cannot be doubted, and it cannot be thwarted by any
action of a railroad company which does not involve an actual
interstate shipment, although done with a view of promoting the
business interests of the company. Even if a state may not compel a
railroad company to do business at a loss, and conceding that a
railroad company may insist, as against the power of the state,
upon the right to establish such rates as will afford reasonable
compensation for the services rendered, yet, when it voluntarily
establishes local rates for some shippers, it cannot resist the
power of the state to enforce the same rates for all. The state may
insist upon equality as between all its citizens, and that equality
cannot be defeated in respect to any local shipments by
arrangements made with or to favor outside companies.
We see no error in the ruling of the Supreme Court of the
Mississippi, and its judgment is
Affirmed.