a point in a group to which it does not belong may prejudice it quite as substantially as a discrimination in the amount of the rate would do.36 If this system is adopted it must be applied without discrimination to all places similarly situated. 37 Each case must, therefore, stand on its own merits, 38 and if it appears that the rate adjustment which was intended to do substantial justice between all shippers generally has resulted in individual instances in disproportionate inequality, it has failed of its purpose to that extent, and the arbitrary theory upon which it was built should yield sufficiently to prevent gross injustice.39

§ 771. Conditions which are not dissimilar.

On the other hand, circumstances and conditions are not so dissimilar as to justify a preference because the city preferred has subscribed toward the building of the road,40 or because it is much larger and has more important and extensive business interests than another, 41 or because it is an assembling point, 42 or because it possesses an option market, 43 or because it is a trade center. 44 The Commission has even held that the fact that a city is an important market should be a reason against rather than for discrimination in its favor. 45 Lack of proper policing at a transit point is not ground for the maintenance of rate

Ry., 4 I. C. C. 348, 6 I. C. C. 1; Commercial Club of Duluth v. B. & O. Ry., 27 I. C. C. 639.

42 Iowa State Board of Railroad Commissioners v. A. E. Ry., 28 I. C. C. 193.

43 Chamber of Commerce of New York v. N. Y. C. & H. R. Ry., 24 I. C. C. 55; Payne-Gardner Co. v. L. & N. Ry., 19 I. C. C. 638.

44 Bowling Green Business Men v. L. & N. Ry., 24 I. C. C. 228. 45 In re Rates on Salt, 24 I. C. C. 192.

discrimination against that point. The financial inability of the defendant is no answer to a charge of undue preference," nor the fact that its line is so long and circuitous that it is obliged to make rate concessions in order to share in the traffic. 48 It must be remembered that it is only dissimilarity in transportation conditions which justify preferential rates. Commercial and transporta

50

51

tion conditions must not be confused. The condition of the market as to any specific commodity is not the controlling element.49 So long as a rate is fair and just from the standpoint of service performed, the Commission may not take into account either the relative cost of production at competing points, nor the price at which the shipper markets his product. Neither the amount of traffic involved, 52 nor the size of a community, 53 nor the absence of competition between manufacturers can justify preferences and prejudices. 54 The fact that the complaining locality has advantages in other territory naturally tributary to it does not constitute a difference of condition which subjects it to discrimination in favor of localities not having those advantages.55 In determining rates on imported goods, the Commission may not refuse to reduce them on the ground that to do so would give an advantage

46 Indianapolis Freight Bureau v. C., C., C. & St. L. Ry., 26 I. C. C. 53.

47 Brewer v. L. & N. Ry., 7 I. C. C. 224; Mayor & Council of Boston v. A. C. L. Ry., 24 I. C. C. 50.

48 B. & A. Ry. v. B. & L. Ry., 1 Int. Com. Rep. 500, 1 I. C. C. 158.

49 Bovaird Supply Co. v. A., T. & S. F. Ry., 13 I. C. C. 56.

50 Colorado Coal Traffic Ass'n v. C. & S. Ry., 18 I. C. C. 572; Investigation of Alleged Unreasonable Rates on Meats, 22 I. C. C. 160; Empson Packing Co. v. C. M. Ry., 22 I. C. C. 268; Oklahoma Portland Cement Co. v. M., K. & T. Ry.,

24

52 Beach v. A. A. Ry., 26 I. C. C. 410.

53 Harbor City Wholesale Co. of San Pedro v. So. Pac. Ry., 19 I. C. C. 323; Suffern Grain Co. v. I. C. Ry., 22 I. C. C. 178; In re Rates on Salt, 24 I. C. C. 192.

54 Chamber of Commerce of Mason v. C., N. O. & T. P. Ry., 27 I. C. C. 263.

55 Sioux City Commercial Club v. C. & N. W. Ry., 22 I. C. C. 110.

to foreign manufacturers on account of inadequate import duties. 56 The Act which it is the duty of the Commission to administer was not passed for the purpose of re-enforcing the tariff law in the matter of protection from foreign competitors. 57 Whatever it may be permissible for carriers to do for the favoring of industries or for granting them a larger measure of protection against foreign competition than Congress has given them, no such power may lawfully be exercised by the Commission.58 Likewise the Commission has no authority to order the same rates on flour for export as on wheat for export for the purpose of placing American millers on a competitive equality with foreign millers, in the absence of legislation by Congress adopting such a national policy.59 But on the other hand, if a town is recognized as an important trading center, and has gained and retained such recognition through undue discrimination, the position thus attained is not such a difference of circumstance as justifies preferential rates.60 Carriers should keep in close touch with commercial conditions pertaining to sales of commodities and the needs of communities, and adjust their charges, as far as practicable, within reasonable limits, to meet those conditions and encourage trade and the movement of freight. But it cannot be held to be the duty of the carrier so to adjust its charges as to insure to a market the continuance of trade which it once enjoyed, nor to equalize the value of commodities in their final distribution,62 nor vary its own charges to accord with the differing values of the same commodity produced by different shippers.63

56 Union Pacific Tea Co. v. Pennsylvania Ry., 14 I. C. C. 545.

57 In re Advances on Manganese Ore, 25 I. C. C. 663.

58 A., T. & S. F. Ry. v. Interstate Commerce Commission, 190 Fed. 591; Southern Pac. Ry. v. Interstate Commerce Commission, 219 U. S. 433, 55 L. ed. 283, 31 Sup. Ct. 288.

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59 Bulte Milling Co. v. C. & A. Ry., 15 I. C. C. 351.

60 Payne-Gardner Co. v. L. & N. Ry., 13 I. C. C. 638.

61 Baltimore Chamber of Commerce v. B. & O. Ry., 22 I. C. C. 596. 62 Chicago Lumber & Coal Co. v. T. S. Ry., 16 I. C. C. 323.

63 Hafey v. St. L. & S. F. Ry., 15 I. C. C. 245.

§ 772. Dissimilarity of condition is a question of fact.

The question as to what in any particular case justifies a difference of rate is one of fact.64 "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 haul 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." 65 The amendment of the fourth section adopted in 1910 and the construction put upon it in the Intermountain Rate Cases (see post, sec. 783) make it even more clear that deviation from the rigid long-andshort-haul rule depends upon questions of fact to be determined by the Commission.

§ 773. Discrimination against points off the line.

When the question was first presented to the Commission as to whether a carrier could be held for discrimination against points not on its line, the Commission held with

64 Shiras, J., in Interstate Commerce Com. v. Alabama Midland Ry., 168 U. S. 144, 42 L. ed. 414, 18 Sup. Ct. 45, B. & W. 433.

65 Citing Denaby Main Colliery Co. v. Manchester, &c., Ry. Co., 3 Ry. & Can. Cas. 426; Phipps v. London & Northwestern Railway,

2 Q. B. 229; Cincinnati, N. O. & Tex. Pac. Ry. v. Interstate Commerce Commission, 162 U. S. 184, 40 L. ed. 935, 16 Sup. Ct. 700; Texas & Pacific Railway v. Interstate Commerce Commission, 162 U. S. 197, 40 L. ed. 940, 16 Sup. Ct. 666.

great positiveness: "It would be quite absurd to charge a railroad with giving a preference or advantage to a community which it does not serve, and it is equally illogical to say that it can prejudice or discriminate against such a community." 66 Some years later the Commission said: "A carrier cannot discriminate within the meaning of the statute except as between those whom it serves or whom it may lawfully be required to serve. It is not guilty of discrimination merely because it does not afford as favorable rates as others served in different territory, though the products carried by each are brought to the same market. The law does not deal in these matters with all carriers collectively as a single unit or system, but its commands are directed to each, with respect to the service which it is required to perform." 67 The unqualified stand here taken has long since been abandoned. A more guarded statement is that a carrier cannot be said to discriminate against a town which it does not reach and in whose carrying trade it does not participate.68 The most frequently recognized exception to the rule with which the Commission started is found in the case of joint rates. An undue discrimination against a given point may be effected by a joint rate as easily as by a one-line rate; and if a carrier enters into a joint rate which results in discrimination which it could control, it is no less responsible than it would be if the discrimination were the result of a one-line rate." 69 Each carrier that participates in joint

66 Eau Claire Board of Trade v. C., M. & St. P. Ry., 4 Int. Com. Rep. 65. Even though the unqualified rule of this case has long since been abandoned, its language is frequently found in later decisions. See Friend Paper Co. v. C., C., C. & St. L. Ry., 18 I. C. C. 178; Utica Traffic Bureau v. N. Y. C. & H. R. Ry., 18 I. C. C. 271; Schmidt & Sons v. Mich. Cent. Ry., 19 I. C. C. 535. But an examination of the facts in each case will

usually show that while the Commission still clung to the language of the Eau Claire case it had certain qualifications in mind.

67 Chicago Lumber & Coal Co. v. T. S. Ry., 16 I. C. C. 323.

68 Chamber of Commerce of Ashburn v. G. S. & F. Ry., 23 I. C. C. 140; Blodgett Milling Co. v. C., M. & St. P. Ry., 23 I. C. C. 448.

69 Ashland Fire Brick Co. v. So. Ry., 22 I. C. C. 115; Rates from the