REPORT AND OPINION OF THE COMMISSION. SCHOONMAKER, Commissioner: This case was first heard by the Commission at St. Paul, on the 16th and 17th days of September, 1887. On the 28th day of October, 1887, the respondents put in effect a tariff changing the rates to Mankato to the same basis as the rates to Waterville and the other points that had more favorable rates. A memorandum was filed by the Commission on the 21st day of November, 1887, setting forth the fact that the rates had been changed as desired by the complainants, and that no decision of the questions raised was therefore necessary. These rates, as changed, continued in effect until the 4th day of June, 1888, when they were again changed to the former figures. A new complaint was thereupon filed by the complainants on the 13th day of November, 1888. The answer of the defendants to the new complaint was filed on the 17th day of December, 1888. No new testimony was taken by either party, but a stipulation was filed to the effect that the case should be heard and decided upon the testimony given on the original hearing. An opinion was prepared in April, 1889, upon the facts then existing, but for reasons not necessary to mention was not issued. The rates have fluctuated more or less since that date, and for some time have been low, and relatively on an apparently fair basis. The complaint charges that the defendant roads, which unite in making through rates from Chicago to Minneapolis and to intermediate points, discriminate against the dealers and traders at Mankato by charging higher rates to that city than to Minneapolis, and to points east of Waterville to Red Wing (the distance being less to Mankato from Chicago than to Minneapolis and to Red Wing respectively). The complainants ask that the defendants be required to so adjust their tariffs from the city of Chicago and other points that their rates to the city of Mankato and all other points west of Waterville, on all classes of freight, shall be no higher than the rates established by said companies from Chicago and other points to Waterville, and to points east of Waterville to the city of Red Wing, and to points north of Waterville to the city of Minneapolis; and to so adjust said rates that the city of Mankato shall be charged no higher rate per ton per mile than is charged to Waterville and other points on said line of road at less distance than the city of Mankato from Chicago or other points of origin. The answer, in substance, sets forth that the line of the defendants is the longest line of several competitors between Chicago and Minneapolis; that the rates under which traffic is moved between Chicago and Minneapolis and the intermediate points mentioned in the complaint are established by the other lines engaged in the competitive business; and that the defendant line is obliged to accept those rates or to withdraw from the business. The facts, so far as they are material to the case, are as follows: The several defendant roads, by arrangements between them, constitute a through line, and carry traffic on joint rates, between Chicago and Minneapolis and the various intermediate points. The length of the line from Chicago to Minneapolis is 520 miles. The village of Waterville is a point on the line 455 miles from Chicago and 65 miles from Minneapolis. At Waterville the line of the defendants is crossed nearly at right angles by the Wisconsin, Minnesota and Pacific Railway, a road that is controlled and operated by one of the defendant roads, the Minneapolis and St. Louis Railway Company. The Wisconsin, Minnesota & Pacific Railway extends from the city of Red Wing, as its eastern terminus, to the city of Mankato, its western terminus. Red Wing is 66 miles east from Waterville, and Mankato is 28 miles west of Waterville. The distance from Chicago to Mankato by the defendant lines is 483 miles. Mankato is also reached by other competing lines of road. The distance to Mankato from Chicago by the Chicago, St. Paul & Kansas City line, through Randolph, is 425 miles. The distance by the Chicago, Milwaukee and St. Paul Line is 432 miles. The distance by the Chicago, St. Paul, Minneapolis and Omaha line, in connection with the Chicago and North-Western road, is 498 miles. The distance by the Winona and St. Peter road, in connection with the Chicago and North-Western, is 435 miles. The rates by all of these lines to Mankato and to the territory east of Waterville, and also to Minneapolis from Chicago, are the same as by the defendant line. The rates charged, in cents per hundred pounds, from Chicago to Mankato, and also from Chicago to Waterville, to Minneapolis, and to points east of Waterville, to and including Red Wing, were when the complaint was filed, and again when the second complaint was filed, respectively, as follows: CLASS, Mankato rate. 60 1 2 3 4 5 A. B. C. D. E. 50 35 25 17 22 18 16 13 10 40 30 20 12 17 15 13 10 8 2 Minneapolis & Waterville rate 50 10 10 5 5 41 4 3 3 3 The business that goes over the line operated by the defendant east of Waterville, toward Red Wing, was at the time of the hearing eighty per cent. of the freight business on the line. The business of the line from Red Wing to Waterville and Mankato has not been remunerative, and the line has been continuously operated at a loss down to the end of the fiscal year, June 30, 1889. The precise facts, showing the earnings and operating expenses and extent of the loss of this road, and the balance sheets of the other connecting roads, are not necessary to be set out. It is sufficient to state that the earnings are less than the operating expenses and fixed charges. The rates in effect at the present time and since April 1st, 1890, from Chicago are as follows: CLASS, Mankato rate... 1 2 3 4 5 A. B. C. D. E. 45 35 25 19 14 19 17 14 11 11 Minneapolis & Waterville rate 40 30 22 17 12 Difference.. 17 15 12 10 10 5 5 3 2 2 2 2 2 1 1 CONCLUSIONS. The only question in this case is that of the relation that the transportation charges from Chicago to Mankato should bear to the rate from Chicago to Waterville and Minneapolis; in other words, whether the deflection from the main or direct line of the respondents at Waterville, to reach Mankato, twenty-eight miles west of Waterville, justifies a higher charge than the Waterville rate, which is identical with the Minneapolis rate, and if so to what extent. The variations and uncertainties in rates at the northwest for a considerable time, due perhaps largely to the opening of new and competing routes, have made it difficult to follow the frequent changes made, and even more difficult to lay down any permanent rule that, under constant rate fluctuations, can be completely effective to prevent more or less discrimination among localities. The present case, however, illustrates the importance of some limitations upon the arbitrary action of carriers in imposing relatively disproportionate charges upon localities not widely dissimilar in situation, nor in the transportation service of the carrier. The principle of relative equality of rates has frequently been applied by the Commission, and the extent indicated to which dissimilarities of conditions in particular cases might reasonably warrant a difference in charges to localities served by the same carrier without unjust discrimination. (Boards of Trade Union, &c. v. Chicago, Milwaukee & St. Paul R'y Co., 1 I. C. C. Rep., 251; Raymond v. Same Company, 1 I. C. C. Rep., 230; In re Chicago, St. Paul & Kansas City R'y Co., 2 I. C. C. Rep., 231). The principle of relative justice applied is that when a carrier, by reason of competitive conditions, or for other reasons, serves certain localities at very low rates, the concessions made must not subject other localities or other patrons dependent on the same carrier to undue or unreasonable prejudice or disadvantage, but there must be an equitable adjustment of rates so that there is no unjust discrimination between competitors in like pursuits. There may be cases in which a carrier legitimately engaged in serving some territory is compelled by some new and aggressive competition to reduce normal and reasonable rates to retain business for its line, and where corresponding reductions at points not affected, or less affected, by destructive competition might be unreasonable. But when a carrier voluntarily enters a field of competition where, by reason of a disadvantageous route, or the rigor of the competitive conditions, remunerative rates cannot be charged, and its service to a portion of its patrons is unprofitable, it accepts the legal obligation that its service shall be impartial to all who sustain similar relations to the traffic, and for whom the service itself is not substantially dissimilar. As was said in the matter of Chicago, St. Paul and Kansas City R'y Co., 2 I. C. C. Rep. 231, "If they (carriers) deliberately proceed to destroy each other, the law must take care that in doing so they injure as little as possible individuals and communities dependent upon them for transportation facilities" (page 267). This is the plain requirement of the statute, and it is in accordance with obvious principles of justice. In the case in hand there can be no question that all the rates are exceedingly low. Rates of 45 cents a hundred pounds for the highest classes, graded downwards to 11 cents a hundred pounds for the lowest classes, for the haul from Chicago to Mankato, a distance of 483 miles, present a scale of charges that cannot be considered high, and they seem, in comparison with former rates, so low as to preclude any ground of complaint, even on an ample volume of business. It is not understood, in fact, that these rates, standing alone, are complained of. The complaint is, in substance, that Mankato should have no higher rate than Minneapolis and points east of Waterville, on the ground of distance. Under the present tariff the rates to Minneapolis are five cents a hundred pounds lower on classes 1 and 2 respectively, than to Mankato, three cents a hundred lower on class 3, two cents a hundred lower on classes 4, 5, A, B, and C, and one cent lower on classes D and E. The main line of the respondent passes through Waterville north to Minneapolis. Mankato is twenty-eight miles west of Waterville, and Minneapolis is sixty-five miles north of Waterville. Red Wing is sixty-six miles east of Waterville. The theoretical justice of the claim made by the complainants may be admitted, but, as often happens in transportation problems, the difficulty lies in applying the rule invoked to the situation; and the strict application of the rule is not |