tioned to the point of destination is much greater than the average distance from Pensacola & Atlantic stations to Savannah, and yet the rate is invariably much less. We find that it costs more to ship cotton from River Junction to Savannah, 259 miles, than it does to ship cotton from Sneads, a station on the Pensacola & Atlantic, 6 miles from River Junction, to New York, a distance of 1,173 miles, or from the most distant point in Mississsippi to Norfolk, 1,154 miles.

The facts ascertained by the commission and herein set forth are of the highest significance. In the absence of satisfactory reply by the respondents, they must control the action of the court. The act to regulate commerce (sections 14 and 16) provides that "the findings of fact in the report of the commission shall be prima facie evidence of the matters therein stated." And it will be observed that the conclusions of the commission upon the facts and the orders based thereon have equal effect. The interstate commerce commission must be regarded as an expert tribunal with relation to transportation rates. Said Judge Taft, delivering the opinion of the circuit court of appeals for the Sixth circuit in the case of East Tennessee, V. & G. R. Co. v. Interstate Commerce Commission:

"It has been suggested that the traffic managers are much better able, by reason of their knowledge and experience, to fix rates, and to decide what discriminations are justified by the circumstances, than the courts. This cannot 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." 39 C. C. A. 425, 99 Fed. 64.

It may be added that whether the members of the commission be in fact expert or otherwise is not open to question, for they are, by section 12 of the act, required to execute and enforce its provisions regulating commerce. In the case of Interstate Commerce Commission v. Louisville & N. R. Co., 102 Fed. 709, the circuit court of the United States for the Southern district of Alabama declares:

"The findings of fact in the report of the 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 well founded and correct."

It follows that the burden is upon the respondents to show the erroneous character of the commission's findings. A brief inquiry will indicate, we think, that this has not been done.

As a part of the defense it is contended by the learned counsel for the respondents that the rates complained of are justified because Pensacola is entitled to rates lower than to Savannah from stations on the Pensacola & Atlantic. This, however, does not meet the commission's finding. If Pensacola offered all the advantages to shippers that can be obtained in Savannah, the traffic would naturally go to the former market, for the reason that it is nearer. But since, on the other hand, superior advantages in the way of higher prices, better inspection regulations, cheaper export rates, and cheaper marine insurance are afforded at Savannah, that city may, in spite of its greater distance, expect to receive a share of the traffic originating on the Pensacola & Atlantic road, provided, of course, that the rates to Savannah are reasonable as compared with the rates to Pensacola. It does not

follow that, because the rates to Pensacola would ordinarily be less in the aggregate than the rates to Savannah, that the Louisville & Nashville has the right to make the latter so much higher and the Pensacola rates so much lower as to utterly exclude Savannah from any share of the traffic originating in its line.

It is further contended against the report of the commission that the fact that the Pensacola rates are lower does not establish the unreasonableness of the rates to Savannah. That may be conceded. It has been held that:

"The fact that a rate over a road or line in one direction is materially higher than the rate on the same road or line, and between the same points, in the opposite direction, does not, as in the case of a haul over the same line in the same direction, establish prima facie the unreasonableness of the higher rate." Duncan v. Railroad Co., 6 Interst. Com. R. 103.

Where the movement in a certain direction is greatly in excess of the movement in another, or where there is a substantial difference in the cost of operation by reason of heavy grades, or because the tonnage runs largely in one direction, it is conceivable that a discrimination in rates may not be unreasonable; but do any of these conditions appear in this case? On the contrary, by the evidence of a principal witness for the respondents the contrary is made to appear. Mr. Saltmarsh, division superintendent of the Pensacola & Atlantic Railway was asked: "Is there any reason why the haul east over the Pensacola & Atlantic Division should be more expensive than the haul over the division for the same distance west?" He replied: "So far as the actual cost of transportation is concerned, perhaps not; but the bulk of our business is southbound, and we have empty cars coming north. To the extent that this is the case, it would, of course, make a difference in the cost of transportation in each direction." Surely it cannot with good reason be urged that this would justify the tremendous difference in rates of which complaint is here made. Nor is there any other evidence to justify rates so preferential to one port and so prejudicial to the other.

It is, moreover, contended that it is competent for the Louisville & Nashville Railroad Company to advance its own interest to the extent of building up a seaport on its own line at the expense of another port on a rival line. That this may be done to a reasonable degree may be conceded. It is competent for a railroad company to so adjust its rates as to promote its legitimate interest, but it cannot, with this purpose, adopt rates excessive in themselves, unduly preferential to its own port and unduly prejudicial to another port. The rate to Savannah is not only excessive, but it is prohibitory. This is shown by the testimony taken by the commission. One witnessMr. W. C. Powell, a commission merchant dealing in naval stores at Savannah-testified rosin and turpentine cannot be brought from Pensacola & Atlantic stations to Savannah because of the rates charged; that the superior market, the regularity and fairness of grading, superior marine insurance, and the like, afforded by Savannah, did not amount to enough to overcome the difference in rates. Another witness-Mr. J. H. Godwin-testified the rate seemed to be prohibitory in an easterly direction. The result is, not only to give the

inferior market of Pensacola a monopoly, but, as we have seen, to give the entire control of that market to one dealer in naval stores.

It is settled law relative to questions of this kind that discriminations or preferences in rates may be justified to safeguard the interest of the public. It follows that the contrary proposition is true, that they may not be justified when they injure the interest of the public. The rates now in force result in injury not only to Savannah, but to the people along the Pensacola & Atlantic Railroad, for it debars them from the advantage of two markets for their products, and restricts them to one, and that the inferior market, and to a private monopoly there. Nor does the fact that the Pensacola & Atlantic, considered as a separate railroad, fails to pay its expenses, justify this discrimination in rates. There are many such roads absorbed by the principal railway systems of the country, and, if this contention were allowable, it would, in a great majority of cases, involving unfair and prejudicial rates, effectually nullify the interstate commerce law and the powers of the interstate commerce commission. Indeed, it has been held by the supreme court of the United States in Smyth v. Ames, 169 U. S. 544, 18 Sup. Ct. 433, 42 L. Ed. 819:

"It cannot be admitted that a railroad corporation maintaining a highway under the authority of the state may fix its rates with a view solely to its own interest, and ignore the rights of the public."

In the case of Road Co. v. Sandford, 164 U. S. 596, 597, 17 Sup. Ct. 205, 41 L. Ed. 560, the same high authority has declared:

"The public cannot properly be subjected to unreasonable rates in order simply that the stockholders may earn dividends. If a corporation cannot maintain such a highway and earn dividends for stockholders, it is a misfortune for it, and one which the constitution does not require to be remedied by imposing unjust burdens upon the public."

Many other considerations of less important character are suggested in the very able and extended oral and printed argument of the respondents' counsel. None of them, however, are deemed of sufficient weight to overcome that presumptive force which the law imparts to the findings of the commission. The considerations sustaining the report of the commission with regard to Savannah rates on naval stores are with the greater force applicable to its ruling with regard to rates to Savannah on uncompressed cotton. It is contended by the counsel for the defendants that the commission had no jurisdiction to declare this $3.30 rate unreasonable and excessive, because it was not in effect at the time of the hearing before the commission. It is true, however, that the respondents advanced the rate while the case was pending before the commission. The advanced rate was filed with the commission, and therefore its attention was called to it by the defendants. A matter in issue before the commission was the cotton rate to Savannah, and the legal effect of the commission's findings will not be defeated upon a technical objection of this character. Besides, whatever the defendants might have said before the commission, they are estopped from objecting to the jurisdiction of this court, because in their answer to the tenth paragraph of the bill they deny that the rates charged and received by them at the date (January 8, 1900) of said order-Exhibit F to the bill-were then or are now in violation of

sections 1 and 3 of the act to regulate commerce, as found by the commission in its report and opinion,-Exhibit E hereto attached. On this issue evidence has been taken, and the defendants have clearly submitted to the jurisdiction of this court in respect to the advanced

cotton rate.

It may be said generally that in this case the usual plea of competition is neither set up nor available to sustain these rates. The discriminations against Savannah are practically admitted by the respondents. The sole justification relied upon is the promotion of the interest of the Louisville & Nashville Railroad by building up a nearby port, and further by securing the long haul from Pensacola towards the northwest. But considerations of this character cannot justify rates unreasonable and excessive, in violation of section I of the law. Nor can they justify rates unduly prejudicial to one locality and unduly preferential to another, in violation of section 3 of the law. Nor has a railway company engaged in interstate and foreign commerce the right or authority to enact rates which are actually prohibitory to traffic in one direction without regard to the wishes of the shippers, or the fair opportunity of a community thus prejudiced to promote its commercial prosperity. In all cases it must be regarded as true that discriminations made for the purpose of promoting the interests of the carrier are subservient to the interests of the general public and to the principles of justice in such matters sought to be attained by the purpose of congress to regulate commerce. It is self-evident that rates which would give to producers and manufacturers on the Pensacola & Atlantic the competitive benefit of the Savannah market would be more conducive to their business and prosperity than rates which confine them to the Pensacola market; and, while it is true that a carrier has the right to exact a fair return for the public utilities it affords, the public is entitled to exact that no more be required of it for the use of such utilities than the services rendered are reasonably worth, and where there is a plain and irreconcilable conflict between the interest of the public and the interest of the carrier the former must prevail.

In this case an injunction will be granted against each and all of the respondent companies, so that the order of the commission may be enforced. This is made necessary by the fact that the rates to Savannah, which are declared to be unreasonable and prejudicial, are joint through rates of all the defendants. Such rates must be construed as entireties. It follows, necessarily, that each carrier who is a member of the through line must be regarded as severally as well as jointly responsible for the unfair and oppressive rate. While this unfairness appears to be attributable to the exactions made by the Louisville & Nashville, the other members, by their assent, are joint participants in the wrong. These are regularly published rates, in which each of the defendants participated, and their proportionate divisions are brought about by agreement between themselves. This constitutes "a common control, management, or arrangement for a continuous carriage or shipment," as defined by section 1 of the act to regulate commerce, and it therefore appears that each of the participating roads are within the scope of the act to regulate commerce, and to the extent of its authority under the control of the interstate commerce commission.

118 F.-40

Louisville & N. R. Co. v. Behlmer, 175 U. S. 662, 20 Sup. Ct. 209, 44 L. Ed. 309; Cincinnati, N. O. & T. P. R. Co. v. Interstate Commerce Commission, 162 U. S. 192, 193, 16 Sup. Ct. 700, 40 L. Ed. 935; Texas & P. R. Co. v. Same, 162 U. S. 205, 16 Sup. Ct. 666, 40 L. Ed. 940.

We do not underestimate the gravity and importance of the interests involved in this controversy. The record has been given that anxious and deliberate consideration, seemingly appropriate, and which, besides, was made necessary by its great volume and complexity. The railways of our country have been aptly said to constitute the arteries of the national life. The public official or other person who would grudge to them the large measure of prosperity which their inestimable services to the country deserve is as shortsighted as unpatriotic, as narrow as unjust. While this is true, the mistakes or excesses of zeal or judgment on the part of railway officials may at times make these vast enterprises, ordinarily benevolent, instrumentalities of grave private wrong and communal injury. The framers of the constitution, though unconscious of the indescribable development in the intercommunication of the people, yet "prophetic and prescient of all the future had in store," provided for every contingency when it bestowed upon congress the tersely expressed but elastic power "to regulate commerce with foreign nations and among the several states." Congress has exercised this power, and the righteous orders of the great commission it has primarily entrusted with the tremendous duty should in all proper cases be respected and enforced by the courts of the country. The organic law upon which this power in congress and in the courts is founded is the sure guaranty to investors in transportation lines against the assaults whether of the agrarian or the demagogue, the anarchist or the mob. While, on occasion, the railway company or other corporation may suffer a temporary diminution of revenues from an order of this character, the interest of the public, and in the end the interest of the corporation itself, is conserved. In all such cases. the general welfare must control. "Salus populi est suprema lex.".

NATIONAL BANK OF THE REPUBLIC OF NEW YORK et al. v. HOBBS et al.

(Circuit Court, S. D. Georgia, W. D. August 10, 1901.)

1. CREDITORS' SUITS-ABATEMENT-EFFECT OF BANKRUPTCY PROCEEDINGS. The jurisdiction of a federal court of equity to proceed to a final decree in a pending suit by judgment creditors, commenced after the return of executions nulla bona, to set aside alleged fraudulent conveyances by the debtor, is not affected by the filing of a petition in voluntary bankruptcy by the defendant.

2. SAME-EVIDENCE-PRESUMPTION FROM FAILURE TO PRODUCE BOOKS OF BANK. In a creditors' suit against the members of an insolvent banking firm to set aside alleged fraudulent transfers of the bank's assets, the failure of defendants to produce the important books of the bank when required, or to account for the same, raises a presumption of fraud, of the most damaging character.

¶ 1. See Bankruptcy, vol. 6, Cent. Dig. §§ 289, 651.