Dawson in favor of Albany to the southeast, Americus to the northeast, and Eufaula to the west, these three places thus surrounding Dawson upon all sides. No matter from what point the traffic came, whether from the north, east, south, or west, the rate to Albany, Americus, or Eufaula was lower than to Dawson. It followed, both from necessary inference and from actual testimony, that this preference worked to the disadvantage of Dawson as compared with the other cities named. After fully considering the conditions and circumstances, including situation of the localities, possible transportation via the Chattahoochee River, railway competition, the competition of markets, and the basing point system of rate making as practiced in the South, the Commission held that the preference so created in favor of Americus, Albany, and Eufaula by the higher rates to Dawson was undue, and an order was entered directing the carriers to cease and desist therefrom. The situation complained of in this case grew out of the system of basing points which prevails in Southern territory. For the purpose of making rates into this territory certain points are selected to which an arbitrary rate is made, the rate to surrounding points being determined by adding to these arbitrary base rates the local rates. Americus, Albany, and Eufaula were basing points, and by virtue of that circumstance enjoyed the low rates in question. Dawson was not a basing point. The Commission said, granting that the carrier may make lower rates to competitive points than are made to intermediate noncompetitive points, we think it clear that the carrier is not at liberty in the selection of these basing points to determine that this town shall have the benefit of the low rate and that town shall not, when the means of competition and the conditions surrounding that competition do not materially differ. As an illustration, the only two railroads serving Americus and Dawson are the lines of the defendants, and no water competition was involved. The distances from the markets in question to these two cities are substantially the same. Yet, on sugar from New Orleans the rate to Americus was 18 cents, while Dawson paid a rate of 31 cents upon the same commodity. It was claimed that competition between the defendant roads was the cause of the lower rate at Americus, and that the same competition did not operate at Dawson, although the same means of competition existed. In its decision this situation is stated as follows: The city of Dawson, in its distress, asks of the traffic manager of the Central of Georgia Railway, “Why do you make the low rate to Americus and maintain the high rate to Dawson?” And the answer is, “I make the low rate to Americus because my competitor, the Georgia & Alabama Railway, over which I have no control, makes that rate, and I must either meet it or go out of business. I do not make a corresponding rate to Dawson because my competitor, the Georgia & Alabama Railway, does not make such a rate.” Thereupon the city of Dawson turns to the

traffic manager of the Georgia & Alabama Railway and inquires, “Why is it that you make the low rate to Americus while maintaining the high rate to Dawson?” And again the answer is, “I make the low rate to Americus because my competitor, the Central of Georgia Railway, over which I have no control, makes that rate, and I must meet it or refuse the business. I do not make the same rate to Dawson because my competitor, the Central of Georgia Railway, does not.” This is worse than the Hindoo mythology, according to which the earth was supported upon the back of a tortoise, which in turn rested on the back of an elephant. In that case the turtle at least had something to stand upon.

Another reason advanced in justification of the higher rates to Dawson was that Americus was a larger trade center than Dawson, and therefore entitled to a better rate; that is to say, that Dawson with 2,000 inhabitants and two railways was not entitled to the same rate as Americus with 6,000 inhabitants and the same two railways. It should be observed, said the Commission, that this discrimination is one which fortifies itself from year to year, since the more favorable freight rate increases every day the difference in population between the two cities. The order in this case was promptly complied with. In the case of Gustin v. Atchison, Topeka & Sante Fe Railroad Company et al. (8 I. C. C. Rep., 277), the reasonableness of rates from eastern points to Kearney, Nebr., as compared with those in force from the same points to Omaha, was involved. The rates to Kearney were combinations of the rates to and from Omaha. Some of the defendant carriers contended that the rates to and from Omaha must be considered in the light of separate charges for distinct shipments, and not as constituting a total or through charge for through service on a continuous shipment from Chicago or other eastern point of shipment to Kearney. The Commission ruled that the defendants, having engaged under their tariffs and course of business in the through transportation of traffic from Chicago and other points to Kearney over continuous lines formed by their connected roads, were required by the act to make their rates on such transportation reasonable and otherwise in conformity with the provisions of the statute. The complainant relied mainly upon comparisons of rates per ton per mile. The rates per ton per mile west of Omaha were compared with those east of Omaha. We held on this point that the necessities of carriers often demand, and traffic conditions frequently warrant them in exacting, a share of through rates which gives them more per mile than that which results to a connecting carrier from the division accepted by it. The Commission also said that the rate per ton per mile rule brings rates down to the narrowest point of scrutiny, and for that purpose is valuable; but it excludes consideration of other circumstances and conditions which enter into the making of rates, no matter how compulsory or imperious they may be, and it can not therefore be accepted as controlling in determining the reasonableness of rates. The really serious feature of the case was that these rates from the east to Kearney were equal to a combination of local rates to and from Omaha. The Commission said that while, in mere amount, rates so made may be entirely reasonable, they may nevertheless operate to unduly oppress the more distant locality. Combination rates always afford an advantage to the basing point, and entail some disadvantage upon the town to which the combined rates are applied, and when traffic is brought to the two places to be distributed in common territory the preferences and prejudices resulting from such rates must generally be held unreasonable and undue. In this case the rate combination was made up of rates to and from a point on the Missouri River, and it might be that conditions governing transportation east and west of that river are such that this method of making rates is forced upon the carriers from the east to points in the interior of Nebraska. Upon that point we could express no opinion at the time of the decision. This branch of the case received but little attention at the hearing, and whether rates made in the manner described did under all the circustances actually subject Kearney merchants to unlawful disadvantage was a question which could not be determined upon the record. The evidence was insufficient to warrant us in holding that the wrong existed. In Castle v. Baltimore & Ohio Railroad Company (8 I. C. C. Rep., 333), the Commission said that common carriers are bound by every principle of justice and of law to accord equal rights to all shippers who are entitled to like treatment, both in the receiving of supplies and the shipment of their products, and a carrier which under any pretext whatsoever grants to one shipper an advantage which it denies to another violates the spirit and thwarts the purpose of the law. The complainant in this case alleged that the defendant carrier had unjustly discriminated in rates and facilities for the transportation of sand against him and in favor of his competitors, but the evidence was not sufficient to show breach of legal duty on the part of the carrier, and the complaint was dismissed without prejudice. In the case brought by the Trades League of Philadelphia v. Philadelphia, Wilmington & Baltimore Railroad Company et al. (8 I. C. C. Rep., 368), the classification of iron-pipe fittings when shipped in boxes or cases was alleged to be unlawful. It appeared that iron-pipe fittings shipped in cases from Philadelphia and other northern points to points in the Southern States take second-class rates, but if shipped in casks, barrels, or kegs a special iron rate, lower than the sixth-class rate, is applied on any quantity. The barrel package is cheaper than the case, except when the quantity is insufficient to fill a barrel, but when that happens a keg can be used for packing with but little inconvenience or additional expense, and the lower special iron rate is thereby secured. The lower rate is not allowed for some exceptional or expensive mode of shipment, but on the package long in general use and apparently favored by shippers irrespective of rates, because of its suitability for the purpose and the low cost for which it can be procured. We found that as the choice is wholly with the shipper, it can not be a hardship for him, under the circumstances disclosed, to pay the higher rate when he elects to pack his goods in cases. Neither were we able to see, as was suggested by complainant, how the present classification of pipe fittings in cases operated of itself to aid dishonest shippers in underbilling goods of greater value, or how the opportunity for false billing would be lessened by giving the special iron rate to pipe fittings packed in cases. Pipe fittings and numerous other articles are included in the list taking special iron rates. We said that if this particular class of goods ought to be carried at the same rate, whether packed in barrels or cases, there was substantially the same reason for holding that a large number of commodities (to which the higher rate is applied when shipped in boxes) should be so reclassified as to take the special iron rate. Such a ruling was not warranted by the facts and circumstances shown in this case. The decision was that the defendant carriers had not exceeded the limits of their discretion in placing iron-pipe fittings packed in cases in a higher class than iron-pipe fittings packed in kegs or barrels, and that such action was not unreasonable or otherwise in violation of the act to regulate commerce. In Savannah Bureau of Freight & Transportation et al. v. Louisville & Nashville Railroad Company et al. (8 I. C. C. Rep., 377) the Commission rendered its decision just prior to the close of this report. The Savannah organization joined with certain shippers in Florida on the Pensacola and Atlantic division of the Louisville & Nashville Railroad in complaining against rates to and from points on that division. The Louisville & Nashville connects with the Plant System and the Florida Central & Peninsular at River Junction, Fla., and the lines so formed carry traffic between such points in Florida and Savannah. These carriers charged a rate of $2.75 per bale on uncompressed cotton from Louisville & Nashville stations in Florida to Savannah at the time of the hearing, when the complaint was filed, and for some years prior thereto, but subsequent to the hearing, and while the case was still pending before the Commission, this rate was increased 55 cents— to $3.30 per bale. The rates to Mobile and New Orleans were and still are, respectively, $2 and $2.50 per bale. We held that the rate of $2.75 per bale to Savannah was not unlawful, but that the whole advance of 55 cents was unlawful and that any higher rate on uncompressed cotton to Savannah than the former difference of 25 cents per bale above the rate in force from the same stations to New Orleans was in violation of sections 1 and 3 of the statute. A still more important question in this case was based upon the relative rates on rosin and turpentine from these Pensacola and Atlantic division stations in Florida to Pensacola and Savannah. It appeared that Savannah, which was formerly the market for naval stores produced on the Pensacola and Atlantic division, no longer received shipments in any volume from points on that division, and that the traffic nearly all went westward to Pensacola or through that point to various destinations. This diversion of the traffic took place, not on account of increased rates to Savannah, but because of relatively low rates put in effect by the Louisville & Nashville to Pensacola. The rates to Savannah were joint rates of 24+ cents on rosin and 38% cents on turpentine from all stations, while to Pensacola the rates of the Louisville & Nashville ranged from 5 to 94 cents on rosin and from 7 to 21 cents on turpentine. Out of the through rates to Savannah the Louisville & Nashville exacted 15 cents on rosin, leaving 94 cents to its connection carrying over the much longer distance from River Junction, and 25 cents on turpentine, leaving 13% cents to the road east of River Junction. The proportions east of River Junction were reasonably low. The shares secured by the Louisville & Nashville for its hauls to River Junction were very much greater than the rates it charged over like distances for local service, including expenses of receipt and delivery, to Pensacola. The difference in freight charges to the two markets included the difference in price, which was higher at Savannah, and still left a large margin in favor of Pensacola. From one point this advantage amounted to over $37 on a carload of turpentine and over $36 on a carload of rosin. The Louisville & Nashville insisted that the near-by market of Pensacola was entitled to all of this great advantage. It claimed that the lower rates to Pensacola were necessary to create a market there for these stores, and, further, that the carriage to Pensacola was only a part of its haul on a great majority of the shipments, while on shipments to Savannah it could only have the short haul to River Junction, where it must turn the traffic over to one of its connecting roads. Whatever difference in rates may have seemed necessary at the outset to create a demand in the Pensacola market, it appeared to us that the rates to Savannah as compared with the Pensacola rates were, after several years' trial, giving an unwarranted advantage to Pensacola. The Louisville & Nashville so controlled the adjustment of rates to the two markets as to give Pensacola a practical monopoly of the trade. We held that this was unlawful and that a carrier can not lawfully establish and maintain an adjustment of rates which in practice prevents shippers on its line from availing themselves of a principal market which they have long been using and confers a substantial. monopoly upon a new market in which, for reasons of its own, it has greater interest. The further and perhaps chief ground relied upon to justify this abnormal relation in rates was that the existing lower scale of rates to Pensacola was required to hold the traffic for long hauls on the Louisville & Nashville system. That company made through rates on naval stores

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