to LaGrange, Georgia, arrived at by charging the through rate to Atlanta, Georgia, fixed as the result of competition at that point, and adding thereto the local rate back over the same line from Atlanta to LaGrange, are not obnoxious to the prohibition of the Interstate Commerce Act against undue dis crimination and a greater charge for a short er than for a longer haul under substantially similar circumstances and conditions, because stations between LaGrange and Atlanta to which the same rule is applied receive lower rates from New Orleans than LaGrange, where the LaGrange rates, if based on the nearest competitive point south, with the local rate from such point added, would be still higher.

2. The possibility of competition arising at a particular point does not render freight rates to that point, though higher than those for a longer haul to a point where competition prevails, obnoxious to the prohibition of the Interstate Commerce Act against a greater charge for a shorter than for a longer haul under substantially similar circumstances and conditions.

[No. 214.]

continuous carriage or shipment of freights,
wholly by railroad, from New Orleans,
Louisiana, to LaGrange, Georgia, are unjust
and unreasonable *in themselves, and rela-[275]
tively unjust and unreasonable as compared
with lower rates charged by defendants for
carrying the same commodities over longer
distances from New Orleans through La-
Grange to Hogansville, Newnan, Palmetto,
and Fairburn, Georgia, and other localities;
that defendants' said rates from New Or-
leans to LaGrange and said longer-distance
points and other localities unjustly discrim-
inate against complainant and others, the
city of LaGrange and vicinity and traffic
carried thereto, and subject merchants and
dealers therein to undue and unreasonable
prejudice and disadvantage, and give undue
and unreasonable preference and advantage
to merchants and dealers at Hogansville,
Newnan, Palmetto, Fairburn, and other lo-
calities and traffic consigned thereto; that
defendants' said rates from New Orleans to
LaGrange, Hogansville, Newnan, Palmetto,
and Fairburn give them greater aggregate

Argued April 13, 1903. Decided May 18, compensation for the transportation of like

Statement by Mr. Justice White:

The connecting roads of the appellees form the short line- 496 miles in lengthbetween New Orleans and Atlanta. The through line consists of the Louisville & Nashville Railroad from New Orleans to Montgomery, the Western Railway of Alabama between Montgomery and West Point, and the Atlanta & West Point Railroad from West Point to Atlanta.

LaGrange is on the Western Railway of Alabama, 104 miles from Montgomery. Opelika lies between Montgomery and LaGrange, and is 38 miles distant from the latter place. LaGrange and the following stations between it and Atlanta are distant from Atlanta, as follows: LaGrange, 71 miles; Hogansville, 58 miles; Newnan, 30 niles; Palmetto, 25 miles; and Fairburn, 18 miles.

Pursuant to § 13 of the Act to Regulate Commerce [24 Stat. at L. 383, chap. 104, U. S. Comp. Stat. 1901, p. 3164], Fuller E. Calloway, a merchant of LaGrange, filed a complaint against the appellees herein with the Interstate Commerce Commission. We take from the opinion rendered by the Commission in that proceeding the following synopsis of the averments of the complaint and answer:

"The complaint alleges, in substance, that defendants are subject to the provisions of the Act to Regulate Commerce; that rates charged by them for the transportation by

kind of property, under substantially similar circumstances and conditions, for the shorter distance from New Orleans to LaGrange than for the longer distance over the same line, in the same direction, from New Orleans to Hogansville, Newnan, Palmetto, or Fairburn; that the rates charged by defendants as aforesaid are in violation of §§ 1, 2, 3, and 4 of the Act to Regulate Commerce. The rates and distances involved are set forth in the complaint, and it is further alleged therein that the lowest rate charged by defendants from New Orleans to LaGrange yields them over 13 cents per ton for each mile of haul, and that their highest rate between said points affords them nearly 6 cents revenue per ton per mile.

"The defendants filed a joint answer, in which they admit that the rates charged are substantially as alleged in the complaint; that their rates to LaGrange amount for each mile to 1.36 cents per ton on the lowest class of freight (D), and to 6.71 cents per ton on the highest class (1), and that the rates for the shorter distance from New Orleans to LaGrange are more than they charge for the longer distances in the same direction from New Orleans to Hogansville, Newnan, Palmetto, and Fairburn; but they deny that the transportation to LaGrange Hogansville, and other points mentioned is conducted under substantially similar cir-[276] cumstances and conditions, and thereupon further deny that their said rates are in violation of § 4 of the statute. The defendants also deny the unreasonableness, injustice, wrongful discrimination, and undue and unreasonable prejudice and preference, advantage, and disadvantage, alleged by complainant under the 1st, 2d and 3d sections of the act. The answer contains statements of rates from New Orleans to the points in question, and to and from Montgomery, Alabama, and Atlanta, Georgia, showing, also, that the through rates to LaGrange, Hogansville, and the other points mentioned

are made by combination of rates to Atlanta | opinion. The remaining clauses of the order
with local rates back over the same line to are set out in the margint
Fairburn, Palmetto, Newnan, Hogansville,
and LaGrange; and it is further averred
that the disparities in rates complained of
are caused by a competitive situation at At
lanta which compels low rates to that point
from New Orleans. The competitive cir-
cumstances and conditions at Atlanta are

Portion of Order of Commission. It is further ordered and adjudged that said defendants, the Louisville & Nashville Rallroad Company, the Western Railway of Alabama, and the Atlanta & West Point Railroad Company, do more particularly cease and desist from violations of the law, so found and set forth in sald report and opinion as follows, to wit: cease and desist from charging, demanding, collecting, or receiving rates for the transportation of the several kinds or classes of freight from New Orleans, Louisiana, to LaGrange, Georgia, which, as a whole or upon any article of merchandise, are in any respect unreasonable or unJust.

1. That said defendants and each of them

2. That said defendants and each of them

stated in the answer to be the competition
of such supply markets as New Orleans,
Baltimore, and other northeastern cities,
Cincinnati, Louisville, and other Ohio river
cities, and the competition of carriers from
such markets to Atlanta, and to have re-
sulted, after frequent and disastrous rate
wars, in the establishment of certain rela-
tive rates from these various market cities
to Atlanta, a disturbance of which would im-
mediately lead to a repetition of such wars.
Similar competitive conditions are claimed
by the defendants to exist at Montgomery,
Alabama, through which freight passes over
defendants' through line to LaGrange and
the other points mentioned or referred to in
the complaint, and they further assert that 143
the present relation of rates to Montgomery
and Atlanta must also, under existing cir-
cumstances, be maintained. The following A.
extract from the answer seems to succinctly 41
set out the defendants' position in this case:

"The rates from Atlanta to those sta tions, respectively, LaGrange, Hogansville, Newnan, Palmetto, and Fairburn, are fixed by the Georgia Railroad Commission, and are just and reasonable. The rates from New Orleans to Atlanta are fixed by the competition between markets, and the com. petition between carriers, as explained above, and are just and reasonable. The rates charged by respondents are the sum [277] of those rates, *and, therefore, respondents' rates themselves are just and reasonable. The reason that Fairburn, Palmetto, Newnan, and Hogansville have lower rates than LaGrange is due alone to the fact that they are nearer to Atlanta, and not to any favoritism or discrimination on the part of the respondents."

The evidence introduced at the hearing before the Commission, in support of the complaint, consisted solely of the testimony of the complainant, which dealt merely with the discrimination alleged to exist against LaGrange in the lesser rates accorded to greater distance points from New Orleans beyond LaGrange towards Atlanta, viz., Hogansville, Newnan, Palmetto, and Fairburn. Much evidence - both oral and documentary was introduced on behalf of the railroads in support of the averments of the answer.

The various contentions contained in the complaint were sustained by the Commission, which made voluminous findings, and issued an order requiring the railroads in general terms to "wholly cease and desist from each and every of the violations of law" found and set forth in its report and

cease and desist from charging, demanding, collecting, or receiving the following unreasonable, unjust, and unlawful rates for the transportation from New Orleans, Louisiana, to La Grange, Georgia, of articles embraced in the various classes of their freight classification, that is to say:

1.

3. That said defendants and each of them cease and desist from charging, demanding, collecting, or receiving rates or charges for the leans, Louisiana, to LaGrange, Georgia, which are transportation of freight articles from New Or equal to rates or charges contemporaneously in force over their railroads on like traffic carried from New Orleans through La Grange to Atlanta, Georgia; added to local rates in force on such traffic for local service over the Atlanta &

West Point Railroad back from Atlanta to La Grange, such combined rates having been found and held in and by said report and opinion of the Commission herein to be unreasonable, unJust, unduly prejudicial, and unlawful, and so unlawful to the extent of such added local unreasonable, unjust, unduly prejudicial, and charges of the defendant the Atlanta & West Point Railroad Company.

4. That said defendants, and each of them, cease and desist from charging, demanding, collecting, or receiving any greater compensation in the aggregate for the transporting of freight articles from New Orleans, Louisiana, for the shorter distance to LaGrange, Georgia, than they contemporaneously charge, demand, collect, or receive for transporting the like kind of freight traffic from New Orleans for the longer distance over the same line in the same direction to Hogansville, or Newnan, or Palmetto, or Fairburn, Georgia, the shorter being included within the longer distance.

5. That said defendants, and each of them, cease and desist from charging, demanding, collecting, or receiving unreasonable, unjust, unduly prejudicial, and unlawful rates for the transportation of freight articles from New Orleans to LaGrange, which are higher than aggregate rates contemporaneously charged, demanded, collected, or received by them, or either of them, for the transportation of like kind of freight from New Orleans to Hoga: sville, or from New Orleans to from New Orleans to Fairburn. Newnan, or from New Orleans to Palmetto, or

6. That said defendants, and each of them, in

situation as the Act to Regulate Commerce | Grange are unreasonably high in and of was designed to remedy, and this case falls themselves. clearly within the evil which that act was enacted to suppress.

Louis, I. M. & S. R. Co. 4 Inters. Com. Rep. | Commerce prohibits only such preferences 537, 59 Fed. 402; Little Rock & M. R. Co. v. as are unjust or unreasonable. St. Louis, I. M. & S. R. Co. 26 L. R. A. 192, Interstate Commerce Commission v. Bal4 Inters. Com. Rep. 854, 11 C. C. A. 417, 27 timore & O. R. Co. 145 U. S. 276, 277, 36 U. S. App. 280, 63 Fed. 778; St. Louis L. ed. 703, 704, 4 Inters. Com. Rep. 92, 12 Drayage Co. v. Louisville & N. R. Co. 5 In- Sup. Ct. Rep. 844; Interstate Commerce ters. Com. Rep. 137, 65 Fed. 41; Gulf, C. & Commission v. Alabama Midland R. Co. 5 S. F. R. Co. v. Miami S. S. Co. 30 C. C. A. Inters. Com. Rep. 308, 69 Fed. 231; Com142, 52 U. S. App. 732, 86 Fed. 419; South-mercial Club v. Chicago & N. R. Co. 7 ern Indiana Exp. Co. v. United States Exp. Inters. Com. Rep. 404. Co. 88 Fed. 662; Interstate Commerce Commission v. Western & A. R. Co. 35 C. C. A. 217, 93 Fed. 92.

When freight is shipped from New Orleans, consigned to La Grange, the carrier is bound to receive it at Montgomery, carry it to La Grange, and there deliver it to the consignee; but it has the right to charge on such freight a reasonable local rate from Montgomery to La Grange.

Atchison, T. & S. F. R. Co. v. Denver & N. O. R. Co. 110 U. S. 684, 28 L. ed. 297, 4 Sup. Ct. Rep. 185.

A through rate which is less than the sum of two or more reasonable local rates cannot be unreasonable, especially where it does not exceed a low competitive rate by more than a reasonable local rate.

Minneapolis & St. L. R. Co. v. Minnesota, 186 U. S. 259, 46 L. ed. 1152, 22 Sup. Ct. Rep. 900.

Similar combination rates have been approved by the courts.

The competition which exists at Atlanta is entitled to the same consideration under § 3, as it is under § 4, of the Act to Regulate Commerce.

Texas & P. R. Co. v. Interstate Commerce Commission, 162 U. S. 232, 40 L. ed. 952, 5 Inters. Com. Rep. 405, 16 Sup. Ct. Rep. 666; Interstate Commerce Commission v. Baltimore & O. R. Co. 3 Inters. Com. Rep. 192, 43 Fed. 53; Louisville & N. R. Co. v. Behlmer, 175 U. S. 665, 44 L. ed. 315, 20 Sup. Ct. Rep. 209; East Tennessee, V. & G. R. Co. v. Interstate Commerce Commission, 181 U. S. 18, 19, 45 L. ed. 725, 21 Sup. Ct. Rep. 516.

While "mere" competition does not authorize a less charge for a longer than a shorter distance, the reverse is true where the competition, having due regard to the interests of the public and of the carrier, ought justly to have effect upon the rates.

Texas & P. R. Co. v. Interstate Commerce Commission, 162 U. S. 233, 40 L. ed. 952, 5 Inters. Com. Rep. 405, 16 Sup. Ct. Rep. 666; Interstate Commerce Commission v. Alabama Midland R. Co. 168 U. S. 166, 42 L. ed. 423, 18 Sup. Ct. Rep. 45; Louisrille & N. R. Co. v. Behlmer, 175 U. S. 674, 675, 44 L. ed. 319, 20 Sup. Ct. Rep. 209; East Tennessee, V. & G. R. Co. v. Interstate Commerce Commission, 181 U. S. 1, 45 L. ed.

Troy Bd. of Trade v. Alabama Midland R. Co. 4 Inters. Com. Rep. 348; Interstate Commerce Commission v. Alabama Midland R. Co. 5 Inters. Com. Rep. 308, 69 Fed. 227, 5 Inters. Com. Rep. 685, 21 C. C. A. 51, 41 U. S. App. 453, 74 Fed. 715, 168 U. S. 144, 42 L. ed. 414, 18 Sup. Ct. Rep. 45; Interstate Commerce Commission v. Western & A. R. Co. 88 Fed. 186, 35 C. C. A. 217,719, 21 Sup. Ct. Rep. 516. 93 Fed. 83; Interstate Commerce Commission v. Clyde S. S. Co. 181 U. S. 29, 45 L. ed. 729, 21 Sup. Ct. Rep. 512.

The second section of the Interstate Com merce Act is the equivalent of what is known as the English "equality clause."

Wight v. United States, 167 U. S. 516, 518, 42 L. ed. 259, 260, 17 Sup. Ct. Rep. 822. The English "equality clause" requires equality of charge in no case except where goods pass "only over the same portion of the line of railway under the same circumstances."

2d Annual Report of Interstate Commerce Commission (1888) p. 89.

The English "equality clause" has no ap plication where freight of one shipper, though carried over the same line, is carried a greater distance from a common point of departure than the freight of another shipper.

Lancashire & Y. R. Co. v. Greenwood, L. R. 21 Q. B. Div. 217.

The English "equality clause" did not apply either where the points of departure were different, or where the points of arrival were different, or where the distances over which the goods were carried were different. Ibid.

The third section of the Act to Regulate

Atlanta is as much entitled to the advantage of the fact that it can avail itself of the competition which exists between the various competing lines, which extend from New Orleans to Atlanta, and of the competition which exists between those lines and other lines reaching Atlanta from other markets, as La Grange is entitled to avail itself of the advantage of the fact that it is (by appellees' line) nearer to New Orleans than Atlanta is.

Phipps v. London & N. W. R. Co. [1892] 2 Q. B. 229; Texas & P. R. Co. v. Interstate Commerce Commission, 162 U. S. 224, 40 L. ed. 948, 5 Inters. Com. Rep. 405, 16 Sup. Ct. Rep. 666; Interstate Commerce Commission v. Alabama Midland R. Co. 168 U. S. 164, 42 L. ed. 422, 18 Sup. Ct. Rep. 45.

It is only "where the carrier cannot meet the competitive rate to a given point without transporting the merchandise at less than the cost of transportation, and therefore without bringing about a deficiency, which would have to be met by increased charges upon other business," that compe tition becomes illegitimate.

East Tennessee, V. & G. R. Co. v. Interstate Commerce Commission, 181 U. S. 20, 45 L. ed. 726, 21 Sup. Ct. Rep. 516.

The mere fact that there is a material dis