controls. As the noncompetitive point thus gets the benefit of the lowest rate to any of the neighboring competitive points, and as the carriage of the competitive traffic to the respective competitive points is remunerating to the carriers to an extent that more than pays the expense of moving the competitive traffic, it is difficult to perceive how the noncompetitive points are subject to any undue or unreasonable prejudice or disadvantage by this scheme of rate making. Our conclusion is that the circuit court did not err in refusing to enforce the orders of the Commission in these cases, and therefore the decrees of that court from which these appeals are taken are affirmed.

This decision seems to rest wholly upon the fact of competition, notwithstanding the competitive rates are reasonable to the carrier, and to ignore the ruling of the Supreme Court in the Troy case that all the circumstances and conditions, including the interests of traders and shippers and the welfare of the communities to which the goods are delivered, the shorter, as well as the longer distance points, are entitled to due consideration. Attention is called to the wide difference between the views expressed by the fifth circuit court of appeals in this case and those of the sixth circuit court of appeals in the Chattanooga case above mentioned, both cases having been tried under the long and short haul clause of the act to regulate commerce, and both of the appellate tribunals having applied the decision of the Supreme Court in the Troy case as the governing authority.


The petition filed by the Commission for enforcement of its order against the Chicago, Burlington & Quincy Railroad Company et al. in the case of the Cattle Raisers’ Association of Texas and the Chicago Live Stock Exchange against the same carriers has lately been dismissed by the United States circuit court for the northern district of Illinois. The Commission held that a terminal charge in Chicago of $2 per carload for delivering live stock to the Union Stock Yards in that city was unreasonable and unjust and unduly prejudicial under sections 1 and 3 of the statute. This case is fully described in our last annual report. To a long-existing through rate from Western and Southwestern points to Chicago the delivering carriers in Chicago added a $2 terminal charge on June 1, 1894. Prior to that time they had not imposed any such charge in addition to the through rate. We found that a charge of $2 might not be unreasonable if viewed as a mere switching charge, but the through rate to Chicago had always covered delivery to the Union Stock Yards in that city, and it could not be said that the cost of delivery at the stock yards in Chicago was a new expense. This finding was, however, made subject to one exception, and that was that the Stock Yards Company had on January 1, 1894, for the first time imposed a trackage charge, and this amounted to 40 cents per car each way, or 80 cents in the aggregate, as against most of the carriers. The Commission held upon all the facts that a terminal charge of $1 per car would not be unlawful, and recommended the carriers not to exceed that sum. The defendants filed a demurrer to the petition, which was overruled by the court in May last. (94 Fed. Rep., 272.) In its opinion overruling the demurrer the court held that a petition to enforce an order of the Commission requiring carriers to cease and desist from charges which the Commission has declared unreasonable and unjust is authorized by the act and is not subject to objection as an attempt to fix maximum rates, the question of the reasonableness of the charge as complained of being one which the court is required to determine in such proceeding. The court also said that the Commission found “that the flat rate to Chicago includes compensation for a portion of the $2 charge; that the $2 charge is made in part for services which should be included in the flat Chicago rate; that the flat Chicago rate is a reasonable charge for all the services which should be included in the transportation of freight to Chicago, and the $2 charge is unreasonable and unjust.” In its recent opinion dismissing the petition the court concurred with the Commission in finding that the stock yards had been the common depot of the defendant carriers for delivery of live stock consigned to Chicago. The court says that if the carriers did segregate their charges, so that the Chicago rate did not include the expense of delivery at the stock yards, and did make a special rate from their tracks to the stock yards, there can be no question of double charge involved. After stating that question the opinion goes on to the end as follows: Unless the one or the other of these charges in and of itself is unjust and unlawful, or the same was illegally made, the petitioner's contention must fail. The justness and fairness of the Chicago rate is not called in question in this proceeding. The act provides in what manner rates may be changed. The defendants have complied with that requirement, and there can be no doubt but that they have, as they legally might, divided up or segregated their Chicago and terminal charges. That such segregation could have been legally accomplished, and was both advisable and desirable, was unequivocally held in the case of Walker v. Keenan (73 Fed., 758). This, too, is the spirit of the Covington Stock Yards case. It is just and reasonable that one who ships to points on the tracks of the several defendants in Chicago should not be required to pay a rate which is based in part upon the actual cost to the carrier of delivery at the stock yards from the point to which he ships. He should not be required to go to the stock yards to get his money's worth. Therefore, the only question remaining is as to the lawfulness and justice of this terminal charge, in and of itself. The petitioner admits that if it is to be considered by itself, it must be held to be reasonable, and therefore just and lawful. Having held that it must be so considered, there remains no alternative but to deny the prayer of said petition, and the same is denied. Inview of the above, it becomes unnecessary to pass upon the question as to whether or not this cause is properly within the interstate commerce act. In the court the trial was limited to the question of reasonableness, and the further ruling of the Commission that the $2 charge subjected the city of Chicago to undue prejudice under section 3 of the act was not reached. The court seems to have overlooked what we believed to be the dominant consideration in the case—that if the through rate to Chicago was a reasonable rate before January 1, 1894, it became an unreasonable rate when the $2 terminal charge was added on that date. To make a reasonable through rate represent less service than formerly and add on another charge for the part of the service formerly covered by the through rate plainly may make the total charge unreasonable, and that was this case. Now, the delivering carriers in Chicago imposed this $2 additional charge, and they were wholly responsible for it. The connecting carriers which participate in the through rate to Chicago had nothing to do with it. It was this action on the part of the carriers at Chicago which created the cause of complaint, and we held that such particular carriers and this particular $2 charge should be dealt with irrespective of the other carriers and the other charges which make up the entire rate.


In re Belknap (96 Fed. Rep.,614) and In re Ault (not reported) presented identical questions. The Belknap case was decided in the United States district court sitting at Louisville, Ky., and the Ault case in the United States district court sitting at Cincinnati, Ohio. Both Belknap and Ault had been indicted in Texas for violating the act to regulate commerce by obtaining transportation to points in Texas at less than the regular published rates through misrepresentation of freight articles shipped, commonly known as false billing. In the Belknap case the court found that the rates of transportation were obtained in Kentucky, and that the merchandise had been delivered for transportation to the carriers in that State; and it held that upon fair construction of the language of the indictment the offense was necessarily committed and completed in the State of Kentucky, and that the statute does not give jurisdiction to any court of the United States except the one in the district in which the offense was committed.

It was contended for the Government that this was a continuing offense, which began in Kentucky and was finally ended by delivery of the goods to the consignee in Texas. The court said:

To constitute the offense there must be, first, a willfully false billing, classification, or misrepresentation of the character of the property to be shipped; second, the obtaining by that means of a lower rate of transportation than the regular rate; and, third, either the delivery of the property to the common carrier for transportation or its actual transportation by it. All these elements appear from the indictment to exist in this case, but each one arises out of acts done in Kentucky, and not in

Texas. It therefore inevitably follows that the offense they constitute was committed in Kentucky, and can, under the statute, only be punished here.

The court accordingly refused to grant the warrant of removal. The Attorney-General has informed the Commission that he has directed the district attorney not to take an appeal to the circuit court of appeals.

As already stated, the Ault case presents the same question. Ault and others doing business at Cincinnati were indicted in the Federal court in Texas for obtaining transportation from Cincinnati to points in Texas at less than the published tariff rate by means of “false billing.” This case came before the United States district court sitting in Cincinnati, after the ruling in the Belknap case, upon application for a warrant permitting removal of the defendants to the jurisdiction of the United States court in Texas. The decision of the United States court in Kentucky in the Belknap case was laid before the court in this Ault case, and the fact that the Attorney-General had concluded not to direct an appeal in the Belknap case was also called to its attention; but the court took the contrary view and granted the application for the warrant of removal. No opinion has been filed in this case.


Price and others were indicted for conspiring to obstruct the justice of the United States by taking from Wilson, a witness residing in Arkansas, who had been subpoenaed to appear before a United States grand jury in Kentucky, certain papers which he had been directed to produce as furnishing testimony in relation to a charge of violating the act to regulate commerce then before that grand jury (96 Fed. Rep., 960). Two of the indicted persons plead that they had been called upon to and had testified before the grand jury concerning such violation of the act to regulate commerce, and had also testified concerning the taking of the papers in question from Wilson and the delivery of the documents to Price, such papers being certain invoices and bills of lading. The court pointed out that these defendants were indicted for conspiring to obstruct justice and not for any violation of the act to regulate commerce. The pleas in abatement were based upon the first section of the act of February 11, 1893, which is as follows: That no person shall be excused from attending and testifying or from producing books, papers, tariffs, contracts, agreements, and documents before the Interstate Commerce Commission, or in obedience to the subpoena of the Commission, whether such subpoena be signed or issued by one or more Commissioners, or in any cause or proceeding, criminal or otherwise, based upon or growing out of any alleged violation of the Act of Congress entitled “An act to regulate commerce,” approved February fourth, eighteen hundred and eighty-seven, or of any amendment thereof, on the ground or for the reason that the testimony or evidence, documentary or otherwise, required of him, may tend to criminate him or subject him to a penalty of forfeiture. But no person shall be prosecuted or subjected to any penalty or forfeiture

for or on account of any transaction, matter, or thing concerning which he may testify or produce evidence, documentary or otherwise, before said Commission, or in obedience to its subpoena, or the subpoena of either of them, or in any such case or proceeding: Provided, That no person so testifying shall be exempt from prosecution and punishment for perjury committed in so testifying.

In its opinion overruling the pleas the court said:

This section certainly does provide that no person shall be excused from attending and testifying as a witness before the Interstate Commerce Commission, or “in any cause or proceeding, criminal or otherwise, based upon or growing out of any alleged violation of the Act of Congress entitled ‘An act to regulate commerce,’” and complete amnesty is expressly given any person so testifying in respect to such matters (Brown v. Walker, 161 U. S., 591; 16 Sup. Ct., 644); but the court is of opinion that it was the intention of Congress, in the section copied, to limit this amnesty to a “cause or proceeding based upon or growing out of an alleged violation” of the said act to regulate commerce, and that as to matters outside of those the witness was left, first, to his privilege of refusing to answer lest he might criminate himself, or, second, if he had answered, then to his rights under section 860 of the Revised Statutes, as supplemented by the act of 1893, prohibiting the use of his testimony against him. It was not the intention of Congress to grant him amnesty as to other crimes merely because he had testified to violations of the interstate commerce law. The first clause of the act of 1893 provided that no person should be excused from testifying in cases “based upon or growing out of any alleged violation of the” interstate commerce law. That was all. It went no further. The second clause of the Act must logically and necessarily be limited to the same thing, and evidently that is all Congress intended. The constitutional principles announced in Counselman v. Hitchcock made it necessary that the amnesty provided should be coextensive with the requirement to testify in such cases. But nothing in the case last mentioned, nor in Brown v. Walker, demanded anything more. They were both based entirely upon the refusal of witnesses to testify in cases of alleged violations of the interstate commerce act. The first clause of the act of 1893 made necessary the second clause; otherwise, neither would have been effective. The latter supplemented the former, but was limited by it, and refers to nothing except the matters upon which witnesses shall not be excused from testifying by virtue of the express provisions of the act. If this is not the proper construction of the act of 1893, the least collusion with a single friendly grand juror might enable the worst violator of the laws of the United States to entitle himself to amnesty by procuring himself to be summoned as a witness nominally to testify or to be asked about a violation of the interstate commerce law. It seems to the court that the plain language of the act of 1893 requires this construction; and, besides, it is very doubtful whether the pleas in abatement afford the proper way to determine the matter of fact alleged, wherein it is averred that this indictment was found upon the testimony before the grand jury given by these defendants. At all events, the court sustains the demurrer, overrules the pleas, and reserves for investigation at the trial certain matters of fact alleged in the pleas.


In Kizer v. Texarkana & Fort Smith Railway Company (13 Am. and Eng. R. R. Cases, N. S., 288), the supreme court of Arkansas held that an agreement by a railroad company to allow a shipper an unreasonably low special rate on interstate shipments, which would give the shipper an undue advantage over other shippers of like goods, is in

« ForrigeFortsett »