THE UNIVERSITY OF ILLINOIS LIBRARY v.u' .mmm Hmm ROOM THE TRAFFIC LIBRARY The Traffic Library Interstate Commerce Law Act to Regulate Commerce Principles of Regulation PART I Prepared under the direction of the Advisory Traffic Council of The American Commerce Association By EDWARD J. MARTIN, LL. B. ELVIN S. KETCHUM, A. B., Pd. M. Editor-in-Chief Originator of Systematic and Scientific Training in Practical Traffic Work EDWARD G. WARD Editorial Director Former President and Editor-in-Chief of the Railway World ; also for- merly with the Interstate Commerce Commission ; also with the U. S. Department of Agriculture as Transportation Expert and with the U. S. Department of Commerce and Labor as Internal Commerce Expert. €l&e American Commerce ^t^^efoeiation CHICAGO Copyright 1917 BY The American Commerce Association PREFACE THE term "Interstate Commerce Law," in its abstract sense, is comprehensive of the several laws which constitute the national system of regulation of common carriers engaged in interstate commerce. There are some twenty of these federal statutes, of which the Act to Regulate Commerce is the parent act. Not all of these acts, however, apply directly to the transportation of interstate commerce, but in one respect or another they each relate to the function of interstate transportation, either as to the medium or agency of intercourse and the processes incidental thereto, or to the persons or instru- mentalities employed in connection therewith. Having formulated a statutory system for regulating common carriers engaging in interstate commerce, the National Government created the Interstate Commerce Commission to administer the details of these regulatory laws. The powers of such an administrative body are necessarily limited to those specifically enumerated in the act of its creation, and while the Interstate Commerce Commission is vested with practically absolute adminis- trative authority over interstate transportation and its agencies, the exercise by Congress of its powers, in en- dowing the Commission with such authority, is subject to review by the courts as to their constitutional suffi- ciency. Thus, in analyzing the requirements and effects of the workings of this system of regulatory statutes, we are confronted with a duality in the legal situation — namely, 111 IV PREFACE the administrative effect given to these laws by the Inter- state Commerce Commission and the constructive sanction or disapproval of them, or their parts, by the courts, in review of the legislative powers exercised through the Commission as an administrative agent of Congress. The purpose of "Interstate Commerce Law," Parts I, II, III and IV, is to explain and simplify both the judicial interpretation of the regulatory laws by the courts and their administration by the Interstate Commerce Com- mission. Hence, the treatment of "Interstate Commerce Law," which is followed throughout these volumes, is one of amplification ; in other words, a working explana- tion, under a system of correlated subjects, of the manner in which these regulatory laws have been and should be administered and complied with, with such reference to interpretations of the laws by the courts, as is necessary to their full comprehension. The treatment is illustrative rather than argumentative, and the copious citations of authorities in connection with the subjects and details in the t'ext are for reference purposes, frequently showing, by their number, the extent to w^hich a particular principle or rule has been followed in the administrative labors of the Commission. It is not the intention that these citations should be given analyt- ical or argumentative significance. In Part I of "Interstate Commerce Law" is contained a review of the historical premises of the exercise of federal control of interstate commerce, the five great epochs of the country's commercial history, the enact- ment of the original Act to Regulate Commerce molded after similar legislation then existing in Great Britain, the virtual reconstruction of the Act to Regulate Com- merce by amendatory and supplemental legislation, and the beginning of the amplification of its judicial and admin- PREFACE V istrative interpretation and enforcement. The most important step in the ampHfication of section 1 of the Act is the analysis of its jurisdictional features. The test of status determinative of the jurisdiction of the Act over the' many forms of transportation agencies employed in the commercial intercourse of the nation, is here developed in its fullest details. Part II is devoted to a continuation of the amplification of the several sections of the Act to Regulate Commerce, giving categorical expression to the working details of the administrative application of the Act to railway trans- portation, rail and water service, and shipping transac- tions. In Part III the amplification of the remaining sections of the Act is concluded and a complete detailed interpre- tative analysis of the workings of the Act and its amend- atory and supplemental acts consummated. In Part IV is embraced a complete description and analysis of the machinery provided for the administration of the Act to Regulate Commerce and its amendatory and supplemental acts; in other words, a functional analy- sis of the organization, and departmental and divisional operations of the Interstate Commerce Commission, in- cluding its rules of practice and procedure, with stand- ardized forms for use therewith. Comprehensive and accurate recitations of the regula- tory laws, rulings of the Interstate Commerce Commission and dicisions of the courts, are contained in the respective sections constituting the general context of the four volumes on "Interstate Commerce Law," but, in addition thereto, an appendix containing the full text of laws and other documents supplemental to the general context is appended at the conclusion of Volume IV and to which reference will be found in each of the volumes. TABLE OF CONTENTS Page CHAPTER I. Federal Control of Interstate Commerce. § 1. Historical Premises of the Exercise of Federal Control of Interstate Commerce 3 § 2. The Case of "Gibbons vs. Ogden" 7 § 3. The "Granger Cases" 15 CHAPTER II. Exercise of Federal Authority. § 1. What is "Commerce ?" 19 § 2. Constitutional Powers y Exclusive Federal Au- thority, and Authority Concurrent with the State ; 22 § 3. The "Commerce Clause" of Article 1 of the Con- stitution of the United States 23 §4. "Federal Sovereignty in Interstate Commerce". 25 § 5; Kinds of Commerce Cases 27 §6. What Constitutes "Interstate Commerce?".... 28 §7. Regulation of Interstate Commerce 30 § 8. Amendments to the Act to Regulate Commerce 32 (1) Amendment of March 2, 1889 33 (2) Amendment of February 10, 1891 33 (3) Amendment of February 11, 1893 33 (4) Amendment of February 8, 1895 33 (5) Supplementary Act of February 11, 1903. 33 (6) Supplementary Act of February 19, 1903, Elkins Act 34 (7) Amendment of June 29, 1906 , 35 vii viii AMERICAN COMMERCE ASSOCIATION Page (8) Amendment of April 13, 1908 38 (9) Amendment of June 18, 1910 38 (10) Amendment of August 24, 1912 39 (11) Amendment of March 1, 1913 41 (12) Supplemental Act of October 15, 1914.. 42 (13) Amendment of March 4, 1915 43 (14) Supplemental Act of August 9, 1916 43 (15) Amendment of August 29, 1916 43 CHAPTER III. The Act to Regulate Commerce as Amended. § 1. Jurisdiction and Scope of the Act — General. ... 47 § 2. Creation of the Interstate Commerce Commis- sion 52 Chapter IV. The Act to Regulate Commerce as Amended. — Continued. § 1. Carriers and Kinds of Transportation Subject to the Act 57 § 2. Definition of Terms in the Act 58 (1) Term "Carrier" Defined .' . 58 (2) Term "Common Carrier" Defined 58 (3) Term "Railroad" Defined 58 (4) Term "Transportation" Defined 58 (5) Term "Employees" Defined 59 (6) Term "Families" Defined 59 § 3. Detailed Description of Carriers Subject to the Act 59 CHAPTER V. The Act to Regulate Commerce as Amended — Continued. Amplification of Sections. § 1. Statutory Provisions of Section 1, as Amended. 65 § 2. Kinds of Carriers Subject to the Act 71 (1) Pipe Lines 71 § 3. Telegraph, Telephone and Cable Companies.. 7^ INTERSTATE COMMERCE LAW ix ♦ Page § 4. Common Carriers by Railroad and by Railroad and Water 75 § 5. Jttrisdictional Status of Common Carriers in General 75 § 6. Common Law Definition of a Common Carrier 77 § 7. Common Law Obligations and Rights of Com- mon Carriers not Abrogated by the Act .... 78 § 8. Incorporation of Common Carrier not full Test of Jurisdiction 79 § 9. Effect of Incorporation of Common Carrier. . . 80 § 10. Carriers not Subject to the Act 80 § 11. Jurisdiction of Act Over State Common Car- riers 81 § 12. Common Arrangement Between Carriers 82 § 13. Interstate Commerce Commission on "Com- mon Arrangement" prior to Amendment of 1906 84 § 14. Through Bill of Lading not Necessary to Con- stitute "Common Arrangement" (Prior to 1906) 85 § 15. Foreign Carriers 86 § 16. Rail and Water Carriers 86 § 17. Carriers Transporting Express Matter 88 § 18. Bridges and Bridge Companies 89 § 19. Relation of Carrier Operating Over Bridge with Bridge Company 89 § 20. Bridges Connecting Two States 89 § 21. Bridges Included in Term "Railroad" 89 § 22. Bridges as Part of Carrier's Line 90 § 23. Bridges not Common Carriers 90 § 24. Cable Companies as Common Carriers 91 § 25. Fast Freight Lines as Common Carriers 91 §26. Express Companies as Common Carriers.... 92 AMERICAN COMMERCE ASSOCIATION Page § 27. Car Ferries as Common Carriers 93 ( 1 ) Car Ferries 96 (2) Municipal Ferries 97 §28. Foreign Railroads as Common Carriers 97 § 29. Inland Water Carriers 100 § 30. Interstate Railroads 112 § 31. Electric Street Railways! 114 §32. Intraterritorial Common Carriers 114 (1) Common Carriers in Alaska 115 (2) Common Carriers in Porto Rico 116 (3) Common Carriers in Hawaii 120 (4) Common Carriers in Philippine Islands. 120 (5) Common Carriers in the Panama Canal Zone 120 § 33. Lighters and Lighterage Companies 120 § 34. Ocean Carriers 121 . § 35. Private Car Companies 121 § 36. Purchasers and Successors of Common Car- riers 123 § 2)7. Trustees and Receivers of Common Carriers. .123 § 38. Lessees of Common Carriers 125 § 39. Sleeping Car Companies 125 § 40. State Railroads Engaged in Interstate Trans- portation 126 (1) Rulings Respecting State Carriers Prior to the 1906 Amendment to the KzX. to Regulate Commerce 127 § 41. Street Railways within the District of Colum- bia : 130 § 42. Terminal and Belt Railroads Engaged in Hand- ling Interstate Traffic 131 (1) Industrial Railways 133 INTERSTATE COMMERCE LAW xi Page (2) Tap Lines 137 (3) Plant Facilities 140 § 43. Jurisdiction of the Commission not Affected by Nature of Organization of Carrier 143 § 44. Kinds of Transportation Subject to the Act. . . 144 § 45. Movement in Transportation Conclusive. .... .144, § 46. Difference Between Interstate Carriers and In- terstate Transportation 145 § 47. Interstate and Foreign Commerce Subject to Act 147 § 48. Transportation of Foreign Traffic Between the United States and Adjacent Foreign Coun- try 148 § 49. Statutory Provisions Relating to Transporta- tion to Ports of Transshipment 151 § 50. Statutory Provisions Relating to Transporta- tion of Foreign Traffic from a Foreign Coun- try to a point in the United States 152 § 51. When Act to Regulate Commerce Abrogates State Statute 153 §52. "Interstate Commerce" — What Constitutes. .. 155 § 53. Character of Transportation Determined by Contract of Shipment 156 § 54. Character of Transportation Controls, Not Shipper's Intent 157 § 55. ''Common Arrangement" Clause not Applicable to All-Rail Transportation 159 § 56. Effect of Temporary Stoppage in Transit 160 § 57. Intraterritorial Transportation 161 § 58. Rail-and- Water Transportation 161 xii AMERICAN COMMERCE ASSOCIATION Page CHAPTER VI. The Act to Regulate Commerce as Amended — (Continued) . Amplification of Sections — (Continued). § 1. Not all Carriers or Transportation Subject to the Act 167 § 2. Intrastate Transportation when not Subject to Act 168 (1) Status of States and Territories under the Commerce Clause of the Constitution of the United States 171 (2) Effect of Admitting State into Union. . . 171 § 3. Foreign Transportation not Subject to the Act to Regulate Commerce 172 § 4. Water Transportation not Subject to the Act. 173 § 5. Instrumentalities of Transportation within Au- thority of the Act to Regulate Commerce. . . 173 § 6. Transportation Services within Authority of the Act to Regulate Commerce 173 § 7. Duties of Carriers Subject to the Act to Regu- late Commerce to Furnish Transportation Services 174 § 8. Duty of Carriers Subject to the Act to Regu- late Commerce to Furnish Facilities 174 § 9. Special Facilities for Handling and Transport- ing Live Stock 176 § 10. Through Routes and Joint Rates 178 (1) Additional Statutory Provisions 178 § 11. Purpose of the Through Route Requirement. .180 § 12. What is a Through Route 181 § 13. What Constitutes a Joint Rate 182 § 14. Divisions of Joint Rate 182 § 15. Jurisdiction of Interstate Commerce Commis- sion over Through Routes and Joint Rates. 185 (1) Circuitous Routes 186 INTERSTATE COMMERCE LAW xiii Page (2) Voluntary Establishment of Through Routes ..... ^.' 190 (3) The Commission may Compel the Es- tablishment of Through Routes 192 (4) The Establishment of Through Routes may be Required with Electric Rail- way '. 192 (5) Establishment of Through Route may be Required wnth Water Line 193 (6) "Railroads of Different Character" De- fined 194 § 16. Joint Rates Compared with Through Rates. . 194 § 17. Changes in Rates do not Affect Traffic in Course of Through Transportation 195 § 18. When Changes in Rates may Affect Traffic in Course of Transportation 196 § 19. Right of Shipper to Reasonable Through Rates 196 § 20. Through Rates — Combination of Joint Rate to Common Points and Local Rate Beyond... 197 § 21. Basing Points or Factors for Combination Rates may be Specified 198 CHAPTER VII. Act to Regulate Commerce as Amended — (Continued). Amplification of Sections — (Continued). § 1. Amplification of Section 1 as Amended (Con- tinued) — Reasonableness of Rates 203 § 2. Interrelationship of Sections 1, 3, 4 and 15, re- specting Reasonableness of Rates 206 xiv AMERICAN COMMERCE ASSOCIATION Page § 3. Original Jurisdiction of the Interstate Com- merce Commission 214 § 4. What Constitutes a "Reasonable Rate?" 221 § 5. Reasonableness of Rates per se 229 § 6. Relative Reasonableness of Rates 241 § 7. Courts on the Reasonableness of Rates 244 § 8. The "Minimum Rate" Bogey 255 § 9. Interblending of State and Interstate Rates. , .257 § 10. Presumption of Reasonableness of Rates 259 § 11. Powers of Interstate Commerce Commission not Contravened by Shipping Act 260 CHAPTER VIII. Act to Regulate Commerce as Amended — (Continued) . Amplification of Sections — (Continued). § 1. Amplification of Section 1 as Amended (Con- tinued) — Reasonableness of Classification. .263 § 2. Jurisdiction of Interstate Commerce Commis- sion over Classification of Property for Transportation 265 § 3. Classification— "The Shipper's Problem" ....274 § 4. The Importance of Classification 276 § 5. Relation of Classification to Freight Rates... 279 § 6. The Legal Status of a Freight Classification Schedule 281 § 7. Methods of Developing Classifications 282 § 8. General Principles of Freight Classification. . .285 § 9; The Interstate Commerce Commission on the General Principles of Classification 289 § 10. The Interstate Commerce Commission on Uni- form Classification 307 INTERSTATE COMMERCE LAW xv Page CHAPTER IX. The Act to Regulate Commerce as Amended — (Continued) . Amplification of Sections — (Continued). § 1. Amplification of Section 1 as Amended (Con- tinued) — Administrative Regulation of Rea- sonableness of Rates by the Interstate Com- merce Commission 313 § 2. Joint Rates to Adjacent Foreign Countries Must be Reasonable 314 § 3. Distinguishment of Terms "Legal" and "Law- ful" as Applied to Rates 317 § 4. Right of Carrier to Initiate Rates 320 § 5. Relative Rates — License of Comparison 321 § 6. Comparison of Rates on Different Lines 325 § 7. Comparison of Rates on Different Branches of Same Line 326 § 8. Comparison with Division of Joint Rate 326 § 9. Comparison with Water Compelled Rates... 328 § 10. Comparison with Rates Fixed by State Au- thority 329 §11. Comparison with Rates Established by Inter- state Commerce Commission 337 § 12. Illustrating Standards of Comparison by Inter- state Commerce Commission 337 § 13. Adjudicated Rates — Maintaining Rate Re- duced After Complaint is Filed 340 (1) Carrier May Withdraw Rate Con- demned by Commission in Another Case 341 (2) Reduction of Rate when Formal Com- plaint Against it is Pending .341 xvi AMERICAN COMMERCE ASSOCIATION Page § 14. Rate Advanced for Short Period with Return to Former Rate Raises Presumption of Un- reasonableness of Advanced Rate 341 (1) Advance Justified when Effect is to Equalize Nearby Rates 342 (2) When Advance in Carload Minimum Rate is Not an Advance in Rate 342 § 15. Agreement as to Rates; Validity and Effect of Between Shipper and Carrier 342 § 16. Bill of Lading — Shipments Tendered Under Other than Conditions of, Subject to Higher Rates 344 § 17. Burden of Proof of Reasonableness of Rates. .346 (1) Carriers May Not Benefit by Another Carrier's Meeting Burden of Proof Requirement 346 § 18. Capitalization 346 § 19. Combination Among Carriers w^hen Rates are Product of 348 CHAPTER I. FEDERAL CONTROL OF INTERSTATE COMMERCE. § 1. Historical Premises of the Exercise of Federal Control of Inter- state Commerce. § 2. The Case of "Gibbons vs. Ogden." § 3. The "Granger Cases." CHAPTER I. FEDERAL CONTROL OF INTERSTATE COMMERCE. § 1. Historical Premises of the Exercise of Federal Con- trol of Interstate Commerce. The enactment into law of the original Act to Regulate Commerce ^^^ in 1887, marked the end of a long period of persistent agitation for the affirmative exercise of the federal authority over quasi public corporations'^^ theretofore in more or less absolute possession and control of the high- ways and means of carrying on commerce betw^een the several states. It was the culmination of a movement along constitutional lines and established a new epoch in the commercial history of the United States. The subject of federal control over interstate commerce is opportunely dealt with at this time since the enlargement of the present system of national regulation, to include control of commerce within the states, is being urged by those interests which seek maximum efficiency in the national regulating system comprehensive of equitable uniformity throughout the country. To fully comprehend the necessity for the exercise of the federal power over commerce between the states, inclusive of the full scope of the federal authority — where its' authority is exclusive and, where jointly with the state, its authority is '1' Commonly termed "The Interstate Commerce Law." <2) Quasi-public corporations are those bodies corporate of private ownership, finance and operation which, under either state or federal franchisement, operate public utilities, such as electric light plants, gas plants, street car systems, rail- ways, etc. 8 4 AMERICAN COMMERCE ASSOCIATION concurrent over the subject-matter of the regulation — it is essential that a brief survey be made of the commercial development of the country, passing for the moment aca- demic discussion of the extent of the powers inherent in the national government by virtue of its constitutional in- vestiture and the complete or partial exercise of such powers through the enactment of regulatory statutes. The commercial history of the nation is that of a marvelous development of natural resources and commerce. In this process of development has been involved the evolution and growth of the means of transportation on a scale equally as wonderful. With each succeeding decade the country has sur- prised the world by its tremendous commercial .growth and by the development of prodigious systems of industry and trade. Since the adoption of the Constitution, five commercial transportation epochs in our industrial history have tran- spired, and, during that time, the commercial pendulum has swung from the extreme of a commerce almost wholly domestic and local within the individual states, to the op- posite extreme of a tremendously increased commerce, as predominantly interstate as the former was locally domes- tic. During these periods of commercial growth, the medium of commercial intercourse has passed through successively pro- gressive states of development. — from the horse-drawn vehi- cle of revolutionary days to the mighty railroad system of the present. The early commerce, existing at the time of the confed- eration of the original thirteen states, was not extensive, and the function of transportation then employed consisted of the horse-drawn vehicle, and the small sailing vessels which plied along the coastwise waters and the larger rivers, lakes and harbors of the eastern region. With these INTERSTATE COMMERCE LAW 5 meager means of intercourse, the new nation passed through the first of its commercial transportation eras. Following this early period came the use of canals as com- mercial highways, and this means of commercial intercourse afforded easily operated and inexpensive transportation. The commerce during this period, as in the one immediately pre- ceding it, was still predominantly domestic and carried on almost exclusively within the states and with what little interstate commerce there was, so small in quantity as to be practically negHgible, Our commercial transition began in the third epoch, with the introduction of steam as a motive power for machines, railroads and vessels. The names of Fulton, Stephenson, and Whitney stand forth brilliant beacons of prophecy of a future then trammeled with scepticism, ignorance and prejudice. But despite those deterrent influences, the advent of the steam locomotive, the steamboat, and the cotton gin, created an era which found its climax in the well-laid beginning of a great and varied commerce between the several states and with the world at large. A constructive period, both commercially and transportationally, it gave birth to the great economic move- ments which were later to develop the immeasurable natural resources of the country and create vast markets within the country and abroad. The rapid progress of this great com- mercial period was temporarily arrested by the internecine struggle between the north and the south, which, for the moment, plunged the country's commercial activity to its lowest ebb in the nation's history. With the passing of the war and its immediate effects, indus- trial enterprise reasserted itself and commercial activity began its movement toward the unexploited west, with its vast and luring promises for the future. There came upon the country a realization of its unlimited resources and wonderful possi- bilities for the nation again united and devoted to pursuits of 6 AMERICAN COMMERCE ASSOCIATION peace. It was not alone a reconstructive period, but one of industrial and commercial expansion. Transportation, as a necessary function to give to commerce its new fields of activ- ity, shared in the development, and great railroads were con- structed with the aid of local, state and municipal powers and credit, as well as with the assistance of the national govern- ment. With the growth of the railway system throughout the country, standardization of the facilities of carriage and methods of transportation became necessary in order to afford the required continuity in the movement of the articles of commerce. Still greater railroad systems were created by means of great corporate consolidations of management, opera- tion, and properties, and much was done by the states and by local communities to encourage and further the building of lateral extensions and branch lines of railways. The rail car- riers were looked upon as public benefactors, and special char- ters, with extraordinary privileges, were granted to builders of railroads by the states. By legislative approval and enact- ment, these charters, many times, became local laws. The right of eminent domain, a power supreme over the rights of the individual citizen, was delegated to the corporate carrier. Neither hindrance of law nor disapproval by pub- lic opinion stood in the way of the railroad locating itself wherever it might feel so disposed. In fact, so absolute and unrestricted w^ere the rights and privileges granted to the earlier American railroads, that their power for good or evil was practically in their own hands. Before the advent of the steam railroad, and while the commerce of the country was almost entirely conducted within the respective states, the regulation thereof, both state and interstate so far as then seemed essential, was left to the special legislation of the states and to the rules of the common law relating thereto. The power of the INTERSTATE COMMERCE LAW 7 federal congress, to regulate and control the diminutive commerce between the states which then existed, was never agitated, if, indeed, it was even seriously thought of at that time. Such land carriers as then existed had derived all of their rights from the states which, in those early days, had exclusive power to regulate such agencies. On the other hand, water carriers performing their transportation function on the ocean, the rivers, and the lakes, had already been brought under the control and authority of the federal govermiient under laws passed by Congress to regulate the "commerce on the ocean and other navigable waters." But the power of Congress to extend its authority over navigable waters within the states was seriously questioned, and finally resulted in the question being litigated. Upon the issue reaching the Supreme Court of the United States, that eminent tribunal declared that the jurisdiction of the federal authority was as complete over the waters of a state where they consti- tuted a highway for interstate and foreign commerce, "so far as they concern such commerce," as it was over the ocean and coastwise waters of the country. ^'^ § 2. The Case of "Gibbons vs. Ogden." The early constitutional history of the United States is by no means silent upon the complex question of distin- guishing between the scope of the sovereign power of the federal government and the extent of the sovereign powers of the state with respect to the interstate and intrastate commerce of the country. It was the eminent jurist, Chief Justice Marshall, who first gave potent flexibility to his interpretation of the federal constitution and declared that the powers of the sovereign are divided between the gov- ernment officers of the Union and those of the states. (3) Gibbons vs. Ogden. 9 Wheat. (U. S.) 1, 6 L. ed. 23. 8 AMERICAN COMMERCE ASSOCIATION They are each sovereign with respect to the rights com- mitted to it, and neither sovereign v^ith respect to the rights committed to the other/*' The case of Gibbons vs. Ogden, supra, is the first of those great decisions of the highest judicial tribunal in the country giving constructive scope to the plenary pow^ers of Con- gress for defining and regulating interstate commerce and those instrumentalities and their functions incidental to and directly concerned w^ith its operations. The federal government is without general police powers, but it is, nevertheless, empowered to pass laws necessary for the administration of its constitutionally enumerated powers. It is a legislative body deriving all of its powers directly from the Constitution of the United States. ^''^ The Supreme Court of Massachusetts said that it was a bold, wise and successful attempt to place the people under two distinct governments, each sovereign and independent within its own sphere of action, dividing the jurisdiction between them, not by territorial limits nor by the relation of superior or subordinate, but classifying the subjects of jurisdiction and designating those over which each had entire and independent jurisdiction. At the time of the decision in Gibbons vs. Ogden the gen- eral government had, however, evinced no disposition to interfere with the state and common law regulation and control of the land carriers. The case concerned the con- stitutionality of the exclusive right to operate boats with fire or steam as motive power upon the waters within the state of New York, which had been granted by the state authorities, to the exclusion of vessels licensed by the federal government to operate in the coastwise trade. The question of the right of the state to exclude the <*) McCulloch vs. Maryland, 4 Wheat. (U. S.) 316, 438. "^' In the Opinion of Justices, 14 Gray 615. INTERSTATE COMMERCE LAW 9 federal-licensed-boat from the coastwise waters was the paramount issue carried to the Supreme Court and in the opinion of that court, written by Chief Justice Marshall, the great constitutionaHst, the New York state-grant was held void as in contravention of the power vested in the general government by the commerce clause of the na- tional constitution.^®^ While the federal government, at the time of this deci- sion, abstained from any interference with the regulation of land carriers by the states, its assumption of exclusive jurisdiction over navigable waters, and the subsequent definement in the Supreme Court's declaration of the su- premacy of the federal power over the agencies of com- mercial intercourse, laid the immutable basis of federal '^) Nowhere is the scope and effect of this learned judicial interpre- tation of the federal constitution better put than in the language of Mr. Frederick N. Judson, in his admirable treatise on "The Law of Interstate Commerce;" (2nd ed. section 6, page 11): — "The broad and comprehensive construction of the term 'commerce' in this opinion is the basis of all subsequent de- cisions construing the commerce clause, and is the recognized source of authority. Commerce is more than traffic; it includes intercourse. The power to regulate is the power to prescribe the rules by which the commerce is to be governed. This power, like all others vested in congress, is complete in itself, and may be exercised to its utmost extent, and acknowledges no limita- tions other than as prescribed in the constitution. The power over commerce with foreign nations and among the several states, said the court, is vested in Congress as absolutely as it would be in a single government having in its constitution the same restrictions on the exercise of the power as is found in the Constitution of the United States. The power comprehended navigation within the limits of every state, so far as navigation may be in any manner connected with commerce, with foreign nations or among the several states, or with the Indian tribes, and therefore it passed beyond the jurisdictional line of New York and included the public waters of the state which were connected with such foreign or interstate commerce." "The most important and far-reaching declaration in the opinion was that of the supremacy of the federal power, so that in any case of conflict the act of congress was supreme, and state laws must yield thereto, though enacted in the exercise of powers which are not controverted." 10 AMERICAN COMMERCE ASSOCIATION jurisdiction over the commerce moved by the inland car- riers between the states as well as the respective agencies of such commercial intercourse. However, this latter ex- tension of the federal authority was not undertaken by Congress until many years later. Thus, in the third epoch of the nation's commercial and transportation development, the dawn of "interstate commerce" regulation was ushered in and the supremacy of the federal power first asserted, even though in connection with but a rela- tively negligible part of the country's commerce. The fourth epoch in this wonderful era of commercial progress was impregnated with conditions which were inevi- tably destined to bring about the afifirmative exercise of the federal authority over commerce between the states. As we have seen, the land carriers were mostly corporate bodies, — artificial persons created by the sovereign power of the state and endowed thereby with unusual privileges and new rights. Presumptively and logically, the state could not create a body politic more powerful than itself or which it could not regulate and control. Theoretically this was true; in reality, the state government became enthralled in the meshes of its new corporate entities to the point of regulative inertia. In addition to state statutes passed in the exercise of the state authority, the common law was still considered by many adequate to restrain the corporate land carriers from per- petrating wrongs against the public. In practice, however, while the power in the state was sufficient, its actual exercise in restraint of the land carriers was, in many ways deplorably inefifective. The corporate transportation entity had been nur- tured and fostered until its proportions had become over- whelming. The grant to a corporation of the right to engage in and operate public utilities for private gain with unrestricted privileges of management and operation must inevitably tend INTERSTATE COMMERCE LAW 11 to monopoly; and it was this very evil which had become pre- dominant in the period under consideration. Eventually some of the states, by constitutional amendment, curbed the power of the legislature to grant such extensive cor- porate powers to the land carriers as had been the practice in the past, but, even in these instances, the state's exercise of its powers was confessedly incapable of complete or even effec- tive regulation of the land carriers. To turn to the com- mon law for relief was even more futile than to appeal to the state's authority, for transportation was unknown to the common law as it had developed under the newer agencies, and the scope of the common law to deal effec- tively with these corporate land carriers was very much in doubt and unsettled by the courts. And, so far as the fed- eral power of control could be looked to for relief, the benefit derived therefrom was by way of negation rather than by affirmative restraint. The mesh of these conditions became more and more complicated and involved as time went on. In the rela- tionship which the corporate land carriers bore towards one another and towards the general public, conditions were interposed and considerations demanded which, in their general effect, amounted to making laws for them- selves. Practically speaking, the carriers were left to themselves to formulate the conditions of their service, the charges therefor, the facilities they should furnish, their methods of handling the public's business, their ar- rangements for interchanging traffic, and the development of their own properties. The fixing of terms of their con- tractural relationships with the public they served, the uncertainty of the law and the difficulty and expense of invoking its aid, necessarily have anything but a whole- some effect upon the industrial, commercial and social life of the country at large, although it was in many ways 12 AMERICAN COMMERCE ASSOCIATION directly attributable to conditions which the public had subtly fostered upon the carriers. Following the decision of the Supreme Court in Gibbons vs. Ogden, no further assertion of the federal power nor of the exercise thereof over the land carriers was attempted until 1866, when Congress passed the Act of June 15th of that year, authorizing railroad companies whose roads were operated by steam power to transport persons and property upon and over continuous lines of transportation.'^' This act was reviewed by the courts, and the language of the Supreme Court of the United States, upholding the exclusive power of Congress,^^^ was prophetic of a more extensive exercise of the national authority. <7> Section 5258, Revised Statutes of the United States, pro- vides that — "Every railroad company in the United States whose road is operated by steam, its successors and assigns, is hereby authorized to carry upon and over its road, boats, bridges, and ferries, all passengers, troops, government supplies, mails, freight, and property on their way from any state to another state, and to receive compensation therefor, and to connect with roads of other states so as to form continuous lines for the trans- portation of the same to the place of destination. But this sec- tion shall not affect any stipulation between the Government of the United States and a railroad company for transportation or fares without compensation, nor impair or change the con- ditions imposed by the terms of any act granting lands to any such company to aid in the construction of its road, nor shall it be construed to authorize any railroad company to build any new road or connection with any other road without authority from the state in which such railroad or connection may be pro- posed. And Congress may at any time alter, amend, or renew this section." (8) Railroad Company, vs. Richmond, 19 Wall. (U. S.), 584. The Court said : — "These Acts were passed under the power vested in Congress to regulate commerce among the several States, and were de- signed to remove trammels upon transportation between different States which had previously existed, and to prevent a creation of such trammels in future, and to facilitate railway transpor- tation by authorizing the construction of bridges over the navi- gable waters of the Mississippi; and they were intended to reach trammels interposed by State enactments or by existing laws INTERSTATE COMMERCE LAW 13 The principal act reviewed by the court was the "Railroad Act of 1866,"^®^ which had been enacted in conjunction with some desultory legislative activity by the general government on the subject of the transportation of passengers and mer- chandise, having reference mainly to water carriers, ^^°^ and also in the matter of the transportation of nitro-glycerine and other explosives by either land or water carriers, ^"^ as sub- jects of commerce among the states. It was also legislatively provided that these "two perceding sections shall not be so construed as to prevent any State, Territory, district, city or town within the United States from regulating or from pro- hibiting the introduction thereof into such limits for sale, use or consumption therein." ^"^ The Supreme Court in reviewing these sections declared : — So far as these regulations made by Congress extend they are certainly indications of its intention that the transportation of commodities between the States shall be free, except where it is positively restricted by Congress itself, or by the States in particular cases by the express permission of Congress, 'i^' The direct effect of this national legislation, and its subse- quent construction and interpretations by the Supreme Court, was to authorize and facilitate the carriage of goods from one state into another. It in nowise interfered with the police powers of the state over interstate traffic, then existing, nor with the laws of the state safeguarding its property and the welfare of its people. The legislation gave emphasis, never- theless, to one important premise of its later-to-be exercised of Congress. * * * The power to regulate commerce among the several states was invested in Congress in order to secure equality and freedom in commercial intercourse against discrimi- nating State legislaton." '9> See foot-note <«>. <10) Rev. Stats. U. S., sections 4252-4289, chapter 6, title 8. Rev. Stats. U. S., sections 4278-4279, chapter 6, title 8. Moore on Interstate Commerce, secton 11, page 25, and cases cited in footnote <19^ CHAPTER II. EXERCISE OF FEDERAL AUTHORITY. § 1. What is "Commerce?" § 2. Constitutional Powers; exclusive Federal Authority, and Authority Concurrent with the State. S 3. The "Commerce Clause" of Article I of the Constitution of the United States. § 4. "Federal Sovereignty in Interstate Commerce." § 5. Kinds of Commerce Cases. § 6. What Constitutes "Interstate Commerce?" § 7. Regulation of Interstate Commerce. § 8. Amendments to the Act to Regulate Commerce. (1) Amendment of March 2, 1889. (2) Amendment of February 10, 1891. (3) Amendment of February 11, 1893. (4) Amendment of February 8, 1895. (5) Supplementary Act of February 11, 1903. (6) Supplementary Act of February 19, 1903, Elkins Act. (7) Amendment of June 29, 1906. (8) Amendment of April 13, 1908. (9) Amendment of June 18, 1910. (10) Amendment of August 24, 1912. (11) Amendment of March 1, 1913, (12) Supplementary Act of October 15, 1914. (13) Amendment of March 4, 1915. (14) Supplemental Act of August 9, 1916. (15) Amendment of August 29, 1916. 17 CHAPTER II. EXERCISE OF FEDERAL AUTHORITY. § 1. What is "Commerce?" " "Commerce" is, in its literal sense, generally understood to mean the process of exchange of property in the function of "trade," — i. e., in the buying and selling of commodities. However, modern civilization and commercial practices give to its abstract meaning a much broader scope. One of the earliest legal definitions of the term by the courts w^as in the famous case of Gibbons vs. Ogden, supra, where it v^as said : — "Commerce, in its simplest signification, means an exchange of goods, but in the advancement of society, — labor, transportation, intelligence, care, and various mediums of exchange, become commodities, and enter into commerce; the subject, the vehicle, the agent, and their various operations, become the objects of commercial regulation. * * * Commerce, undoubt- edly, is traffic, but it is something more, it is inter- course. It describes the commercial intercourse be- tween nations, and parts of nations, in all its branches, and is regulated by prescribing rules for carrying on the intercourse." It has also been said by the courts that commerce "includes the usual agencies of communication and transportation em- ployed to affect the change." ^^^ Inasmuch as the word "commerce," as used in the consti- (1) People, ex rel., vs. Reardon, 184 N. Y. 431, 432; 11 N. E. Rep. 970. 19 20 AMERICAN COMMERCE ASSOCIATION tution of the United States, is without distinction as to its scope or operation, we must look to the judicial interpreta- tions and constructions of the commerce clause of the consti- tution for a comprehensive view of its possibilities and objec- tive. The main distinction which the courts have drawn with respect to it is that it embraces not only the function involved in making the exchange, but the things exchanged, and the persons engaged in contracting therefor. It includes the mediums of intercourse and communication, such as horses and wagons, railroads, vessels, and the navigable waters upon which they ply to the extent of such use. Mr. Frederick Judson, in his "Law of Interstate Com- merce," <^> calls attention to the case of the Pensacola Telegraph Company, ^^) which in commenting upon the rule laid down in Gibbons vs. Ogden, supra, added that commercial inter- course "was not confined to the instrumentalities of com- merce known or in use when the constitution was adopted," but extended from the instrumentalities of ear- lier days to the railroad, the telegraph, and the successive agencies of commercial evolution. It is apparent, therefore, that "commerce" as judicially viewed is given sufficient scope to include not only the object exchanged, but also the agency of exchange, or com- munication and the persons involved in its operation, in order to give substantive premise for the exercise of the co-efKcient power of the federal government to enforce the intended effec- tiveness of the commerce clause of the constitution. <2) Judson's "Law of Interstate Commerce," (2nd ed.) section 7, page 12. <3) 96 U. S. 1, 24 Law ed. 708, 711, the Court stating:— "They extend from the horse with its rider to the stage coach, from the sailing vessel to the steamboat, from the coach and steamboat to the railroad, and from the railroad to the telegraph, as these new agencies are successively brought into use to meet the demands of increasing population and wealth. They were intended for the government of the business to which they relate at all times and under all circumstances." INTERSTATE COMMERCE LAW 21 There are, however, things incidental to the operation of commerce but which cannot be included as a part of it, such as the contractual relationships which are involved in and es- sential to commercial intercourse. The bill of lading, as a document of title, is a symbolic representative of the property transported in the process of commerce, but it is merely inci- dental to commerce and not a part of it. This accounts for the lack of authority in the federal government to deal with bills of lading as is explained in the chapters relating to bills of lading. Bills of exchange, notes, drafts, etc., while all essentially in- strumentalities of commerce, are excluded from being parts of commerce because of their merely contributory nature. Likewise, there are things which are not subjects of com- merce, as for instance, articles and persons whose presence in commercial transactions are in contravention of the police regulations of a state safeguarding the moral and physical welfare of its people. There are many decisions of the courts dealing with the restricted inclusion in com- merce of such persons as paupers, immoral persons, con- victs, and persons afflicted with contagious diseases, and with such articles as spirituous liquors, explosives, diseased animals, oleomargarine, tobacco in certain forms, etc. The question of the application of the "original package" rule was early involved in the commerce of the states with relation to the state's police and taxing powers. The question ^*^ arose as to when the state's taxing power began to operate and the courts, as early as 1827, held that it began when the "original package" in which the goods were received in im- portation was" broken up or sold, — the word "import," at that time, having local significance as between the states. Sub- sequently, in the development of the expressed intent of the federal government that interstate commerce should be free as between the states, the original package rule came to have no application in the commerce between the states. So, while 22 AMERICAN COMMERCE ASSOCIATION the original package rule has been adhered to with respect to the state's power to tax certain imports from foreign coun- tries, goods brought from one state into another are subject, in common with other property in that state, to taxation whether in the original package or not. §2. Constitutional Powers; exclusive Federal Authority, and Authority Concurrent with the State. The federal government is without inherent sovereignty, but derives its authority from the enumerated powers vested in it by the constitution of the United States and its co-efficient power to pass such laws as may be necessary to carry into effect the specific powers conferred by the constitution itself. The national constitution contains nine enumerated powers from which the federal government derives its authority over interstate commerce. These enumerated powers, including those embraced in the "commerce clause," are as follows : — ( 1 ) The congress shall have power * * * ^q regulate commerce with foreign nations, among the several states and with the Indian tribes. *^^ (2) To establish post offices and post roads.*®* (3) The congress shall have power to make all laws which shall be necessary and proper for carrying into effect the fore- going powers, and all other powers vested by this constitu- tion in the government of the United States, or in any depart- ment, or officer thereof.'^* (4) No tax or duty shall be laid on articles exported from any state.*®* (5) No preference shall be given by any regulation of commerce or revenue to the ports of one state over those <4) Judson's "Law of Interstate Commerce," section 17, page 30, and cases cited. <6> Const. U. S., Art. I, section 8, paragraph 3. (6) Const. U. S., Art. I, section 8, paragraph 7 tT) Const. U. S., Art. I, section 8, paragraph 18. <*' Const. U. S., Art. I, section 9, paragraph S. INTERSTATE COMMERCE LAW 23 of another; nor shall vessels bound to or from one state be obliged to enter, clear, or pay duties in another.'®' (6) The citizens of each state shall be entitled to all the privileges and immunities of the citizens of the several states. *'°' (7) This constitution and the lav^s of the United States which shall be made in pursuance thereof, and all treaties made or which shall be made under the authority of the United States shall be the supreme law of the land; and the judges in every state shall be bound thereby, anything in the con- stitution or laws of any state to the contrary notwith- standing.'"' (8) The powers not delegated to the United States by the constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people. '^^' (9) All persons born or naturalized in the United States and subject to the jurisdiction thereof are citizens of the United States and of the state wherein they reside. No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States, nor shall any state deprive any person of life, liberty or property without due process of law, nor deny to any person within its jurisdic- tion the equal protection of the laws. ^^^^ ^^^*^ § 3. The "Commerce Clause" of Article I of the Constitu- tion of the United States. The "commerce clause" of Article I of the Constitution of the United States vests in the federal government the power "to regulate commerce * * * among the several states." The history of its judicial interpretation is a striking illus- '9' Const. U. S., Art. I, section 9, paragraph 5. <10) Const. U. S., Art. IV, section 2. <"' Const. U. S., Art. VI, section 2. <12) Const. U. S., Amendt. X, January 8, 1798. fi3) Const. U. S., Art. XIV, section 1. The reference alone to "ports" in the language of the constitution is due to the fact that at that time the com- merce among the states was carried on wholly by naviga- tion, with the exception of the slight amount handled by wagon; but this intent of restraint has been deemed suffi- cient by the courts to judicially apply it in general restraint of the regulation of interstate commerce by the national government under modern conditions and agen- cies. '^^' '14) Judson's Law of Interstate Commerce, section 1, paragraph 2. '15) Const. U. S., Art. I, section 9, paragraph 5. '16) Vol. II, Senate Reports, page 1674. <17) Judson's Law of Interstate Commerce, section 3, page 7, foot- note 1. The defect in section 12 was remedied by the amendment of February 11, 1893, compelling self-incriminating testimony. *''*' (4) Amendment of February 8, 1895/^'* The amendment of February 8, 1895, added to section 22 a proviso permitting the issuance of joint interchangeable five-thousand mile tickets with special privileges as to the amount of free baggage to be carried under mileage tickets of one thousand or more miles.<'«' (5) Supplementary Act of February 11, 1903.'^^' The <29) 25 Stats, at Large 855; 1 Supp. Rev. Stats. U. S. 684. (30) For full text of amendment of March 2, 1889, see Appendix, Part IV. (31) 26 Stats, at Large, 743; 1 Supp. Rev. Stats. U. S. 89L (32) por full text of amendment of February 10, 1891, see Ap- pendix, Part IV. '33) 27 Stats, at Large, 443. (34) Por full text of amendment of February 11, 1893, see Ap- pendix, Part IV. '35) 28 Stats, at Large, 643; 2 Supp. Rev. Stats. U. S. 369. (36) Por full text of amendment of February 8, 1895, see Appendix, i Part IV. (37) 32 Stats, at Large, 823; as amended by an act approved June 25, 1910. 34 AMERICAN COMMERCE ASSOCIATION Expedition Act, passed February 11, 1903, effected an addition to the Act to Regulate Commerce providing for expediting the procedure in suits brought by the United States or suits prosecuted in the name of the Commission by the attorney-general.*^®' (6) Supplementary Act of February 19, 1903,''^' Elkins Act. The amendment of February 19, 1903, known as the Elkins Act, affected sections 2, 6, and 10, of the Act to Regulate Commerce. In its most important aspect it was intended to strengthen certain provisions of the general act and abolish rebating by heavily increasing the fines therefor. The Elkins Act made the published tariff of the carrier the standard of lawfulness in the demand and collection of trans- portation charges, declaring any departure therefrom a mis- demeanor. It also made the act of any person acting for or in the employ of any carrier subject to the act, and acting within the scope of his employment, the act of such carrier. Thus, the violation of the Act by the employee was in such instances the offense of the carrier. This Act, as originally enacted, also abolished the penalty of imprisonment but this feature was restored three years later by the Hepburn amendment in 1906. The amendment effected through this supplemental legislation made the carrier corpora- tion liable to prosecution in cases where its officers or agents were liable for violations of the original Act to Regulate Com- merce, such agents and officers continuing to be liable as theretofore. Jurisdiction of prosecutions of offenses under the new act was vested in the United States courts having jurisdiction of crimes within the district in which the vio- lation was committed or the transportation passed through. '""> (38) por full text of amendment of February 11, 1903, see Ap- pendix, Part IV. (89) 32 Stats, at Large, 847; amended in 34 Stats, at Large, 584. (40) For full text of the Elkins Act, see Appendix, Part IV. INTERSTATE COMMERCE LAW 35 (7) Amendment of June 29, 1906.'*'^ The most impor- tant and extensive amending of the Act was accompHshed by the legislation of June 29, 1906, known as the Hepburn Act. These amendments broadened the scope of the Act by including pipe lines, express companies and sleeping car companies as common carriers subject thereto and included all cars and vehicles and all instrumentalities and facilities of shipment or carriage, irrespective of ownership or of any contract, express or implied, for the use thereof and all services in connection with the receipt, delivery, elevation, and transfer in transit, ventilation, refrigeration or icing, storage, and handling of property transported. A commodity clause was included in the amendments prohib- iting a carrier from transporting its own commodities. A very substantial enlargement of the powers of the Com- mission was afforded by the amendments. Free passes were prohibited, connections between railway lines required, punish- ment by imprisonment restored, establishment of through routes by the Commission with liability upon the initial carrier for damage to a through shipment, and certain reports and forms of accounts of carriers were required. From an economic standpoint, the most important of these enlarged powers of the Commission was that authorizing it to establish through routes and joint rates, and also to determine just and reasonable rates to be thereafter charged as well as any just, reasonable, or fair regulation respecting the trans- portation to be followed in the future. A limit of two years was fixed as the time wherein any order of the Commission should be in force. The main purpose of the legislation, said the Commission, in its annual report for 1907, was to provide more adequate means for the enforcement of rights and duties already de- clared to exist. (41) 34 Stat«. at Large, 584. . 36 AMERICAN COMMERCE ASSOCIATION Following the passage of the Hepburn Act, the Commis- sion devoted a considerable part of its time to the giving of administrative construction to various provisions of the amended law for the guidance of both shippers and carriers, for it was obvious that the best results secured with the least possible delay could only be enjoyed through a correct and uniform interpretation of the statute. Numerous rulings ex- plaining the Commission's view and application of different sections and paragraphs of the statute were promulgated and in practically every instance accepted by the carriers, even in cases where their legal advisers were not entirely in accord with the opinion of the Commission. ^*^^ <42) The Commission in its Annual Report, for 1907, commented on the immediate effects of the Hepburn Act (amendment of June 29, 1906), as follows:— "The amended law has now been in force for upwards of fifteen months, and some opinion may be expressed as to its operation and effects. The substantive provisions of the original act, for- bidding the exaction of unreasonable charges and prohibiting discriminations between persons and places, were unchanged by the legislation of 1906. The main purpose of that legislation was to provide more adequate means for the enforcement of rights and duties already declared to exist. The vital principle of a right is found in the obligation to respect it. Without remedial procedure the declaratory portion of any law is little more than the statutory expression of a sentiment, but when efficient machinery for securing observance is provided the per- formance of definite duties and the recognition of definite rights may be expected to follow in ordinary conduct without resort to litigation. That this is true in regard to the amended act, and to an extent not generally appreciated, is confidently asserted. Just as the value of criminal laws is measured by the peace and security of society rather than the occasional conviction of offenders, so the salutary effects of the present statute are shown in the more general enjoyment of previously existing rights rather than by the number of cases in which the authority of the Commission has been invoked or the list of decisions and prosecutions which makes up the record of administration. It is likewise true that the substantial and permanent benefits of this law are indirect and frequently unperceived even by those who in fact profit by its observance. It means much for the present and more for the future that the principles of this law have gained greatly in general understanding and acceptance. The injustice of many practices which were once almost char- acteristic of railway operations is now clearly apprehended, and an insistent public sentiment supports every effort for their sup- pression. By railway managers almost without exception the INTERSTATE COMMERCE LAW 37 The Hepburn Act became a law on June 29, 1906, and under joint resolution took effect sixty days after its approval, to-wit: August 28, 1906. ^*^> amended law has been accepted in good faith, and they exhibit for the most part a sincere and earnest disposition to conform their methods to its requirements. It was not to be expected that needed reforms could be brought about without more or less difficulty and delay, but it is unquestionably the fact that great progress has been made and that further improvement is clearly assured. To a gratifying extent there has been read- justment of rates and correction of abuses by the carriers them- selves. Methods and usages of one sort and another which operated to individual advantages have been voluntarily changed, and it is not too much to say that there is now a freedom from forbidden discriminations which is actual and general to a degree never before approached. As this process goes on, as special privileges disappear and favoritism ceases to be even suspected, the indirect but not less certain benefits of the law will become more and more apparent. An incidental respect in which equality of treatment has been greatly promoted is in such matters as switching, terminal, de- murrage, reconsignment, elevation, and other charges making up the aggregate cost of transportation. In the past it was often within the power of a carrier to waive charges of this nature in favor of particular shippers while collecting them from busi- ness rivals. Now the law and the rules of the Commission require all charges of this description to be plainly stated in the tariffs and to be applied with the same exactness and uniformity as the transportation rate itself. This is only one of the ways in which distinct advance has been made toward placing^ com- peting shippers in each locality upon a basis of equality in the enjoyment of a public service. It is this general and marked improvement in transportation conditions that the Commission observes with special grati- fication. The amended law with its enforceable remedies, the wider recognition of its fundamental justice, the quickened sense of public obligation on the part of railway managers, the clearer perception by shippers of all classes that any individual advantage is morally as well as legally indefensible, and the augmented influence of the Commission resulting from_ its in- creased authority have all combined materially to diminish offensive practices of every sort and to signally promote the purposes for which the law was enacted. This results in the voluntary adjustment by the parties with- out resort to the Commission of a vast number of controversies which otherwise would ripen into complaint and litigation, while in numerous instances a settlement is effected by the friendly intervention of the Commission, through correspondence or personal interviews, between the shipper and carrier directly concerned." '43) Exhaustive hearings were conducted by the Senate and House Interstate Commerce Committees, during the course of 38 AMERICAN COMMERCE ASSOCIATION (8) Amendment of April 13, 1908/**^ The fourth para- graph of section 1, of the Act, was amended by the enact- ment of April 13, 1908, giving greater certainty to the persons to whom free passes or franks might be given. ^*^^ This same part of the law was again amended by the legis- lation of June 18, 1910. (9) Amendment of June 18, 1910.'*'' The act of June 18, 1910, commonly known as the Mann-Elkins law en- larged the substantive provisions of the Act to Regulate which the Attornej'-General of the United States, upon request, rendered the following opinion which will be found in Senate Reports, volume II, page 1674 (May 5, 1905). "1. There is a governmental power to fix the maximum future charges of carriers by railroad, vested in the legislatures of the states with regard to transportation exclusively within the states, and vested in congress with regard to all other trans- portation. "2. Although legislative power, properly speaking, cannot be delegated, the law-making body, having enacted into law the standard charges which shall control, may intrust to an admin- istrative body not exercising in the true sense judicial power, the duty to fix rates in conformity with that standard. "3. The rate-making power is not a judicial function and can- not be conferred constitutionally' upon the courts of the United- States, either by way of original or appellate jurisdiction. "4. The courts, however, have the power to investigate any rate or rates fixed by legislative authority and to determine whether they are such as would be confiscatory of the property of the carrier, and if they are judicially found to be confiscatory in their effect, to restrain their enforcement. "5. Any law which attempts to deprive the courts of this power is unconstitutional." He also advised that reasonable rates determined by the legislative authority would not constitute a preference between the ports of different states within the prohibition of article 1, section 9, paragraph 6, of the Constitution, even though they resulted in a varying charge per ton per mile to and from the ports of the different states. Also included in Judson on Interstate Commerce, 2nd ed., section 51, pages 79, 80, footnote 1. (44> 35 Stats, at Large, 60. (45) por full text of amendment of April 13, 1908, see Appendix, Part IV. <«) 36 Stats, at Large, 539. INTERSTATE COMMERCE LAW 39 Commerce, corrected numerous defects, which experience had disclosed, conferred upon the pubHc new rights and ' remedies, and correspondingly increased the jurisdiction and authority of the Commission. As in the period fol- lowing the enactment of the Hepburn law of 1906, much consideration was given to the administrative interpre- tation of the amended act for the guidance of shippers and carriers. The questions presented involved the appli- cation to daily transactions between carriers and shippers of substantially every provision of the amended statute. Immediately following the passage of the Mann-Elkins law the Commission was called upon to exercise what is perhaps the most far-reaching and fundamentally im- portant power conferred upon it by that act, namely, the authority to suspend proposed advances in rates pending investigation of their propriety. In the first half of 1910 numerous carriers had given notice of general advances in rates, and it was commonly understood that other carriers would shortly take similar action. As a result of conferences between the Government authorities and representatives of the carriers, the dates on which the pro- posed advances were to become effective were postponed pending the passage of the bill then under consideration by the Congress, and section 12 of that bill was made effective upon its passage in order that the Commission might at once institute investigations thereunder. Thereupon two general investigations were instituted, one relating to the general advances in rates proposed by eastern carriers and the other to those proposed by western carriers. In both proceedings organizations of shippers asked for and were given leave to intervene. ^*^^ (10) Amendment of August 24, 1912.'*'^ By the provi- (47) For full text of amendment of June 18, 1910, see Appendix, Part IV. <48) 37 Stats, at Large, 566. 40 AMERICAN COMMERCE ASSOCIATION sions of the amendment of August 24, 1912, known as the Panama Canal Act, the jurisdiction of the Interstate Com- merce Commission over carriers by water was extended. The Act to Regulate Commerce applied to carriers by- water only when engaged in transportation "partly by railroad and partly by water when both were used under a common control, management, or arrangement for a continuous carriage or shipment." Section 11 of the Panama Canal act amended section 5 of the Act to Regu- late Commerce by adding a paragraph, which may be summed up in the following words : From and after July 1, 1914, it has been unlawful for any common carrier sub- ject to the act to own or to have any interest whatsoever in any common carrier by water or any vessel with which the aforesaid common carrier does or may compete for ■traffic. The Commission is given jurisdiction to determine questions of fact as to the competition or possibility of competition, and may, if it is of the opinion that the existing service by water other than through the Panama Canal is of advantage to the convenience and commerce of the people, extend the time during which such service by water may be operated beyond July 1, 1914.^**^ **°^ <"> <*9> Section 11 of the Panama Canal Act, also provides: "In every case of such extension the rates, schedules, and practices of such water carrier shall be filed with the Interstate Commerce Commission and shall be subject to the act to regulate commerce and all amendments thereto in the same manner and to the same extent as is the railroad or other com- mon carrier controlling such water carrier or interested in any manner in its operation. "It will be observed that, under this wording of the law, the jurisdiction of the Interstate Commerce Commission extends over the rates, schedules, and practices of such carriers filed with the Commission. Apparently the intention of Congress was to bring the traffic of these carriers under the provisions of the act to regulate commerce in the same manner and to the same extent as is the traiific of the carriers controlling them. Under this assumption the controlled carrier would be subject to all the provisions of the act to regulate commerce, or, to state the matter in another way, the Commission would be charged with INTERSTATE COMMERCE LAW 41 (11) Amendment of March 1, 1913/'^' By the amend- ment of March 1, 1913, the Commission was required to value the property of all common carriers subject to the Act to Regulate Commerce, such valuation work to be begun within 60 days after the taking effect of the amend- the duty of inquiring as to the management of the business in order to keep itself informed as to the manner in which the same is conducted and would have the right to compel the dis- closure of full information as to the manner in which said car- riers are conducting their business. It seems impossible that the Interstate Commerce Commission could perform the duties imposed upon it without having such information. "From the foregoing, it will be seen that the Commission's jurisdiction under the act to regulate commerce, as amended by the Panama Canal act, extends: "(1) To carriers by water when engaged in transportation handled partly by rail and partly by water when both are used under a common control, management, or arrangement for a continuous carriage or shipment; "(2) To carriers by water or vessels when such carriers or vessels are under the control of a railroad or other common carrier with which they compete or may compete. "This leaves carriers that are engaged in transportation wholly by water independent of regulation, so long as they are not controlled by other carriers." I. C. C. Ann. Rep. 1912, pages 49, 50. • <50) "Under the Panama Canal Act, approved August 24, 1912, the president of the United States is authorized to fix the tolls to be charged for use of the canal. He may change them by giving six months' notice. The act provides that no tolls shall be levied upon vessels engaged in the coastwise trade of the United States. Vessels owned by railroads or by any company or person doing business in violation of anti-trust laws are excluded from the use of the canal. "By a proclamation issued November 13, 1912, President Taft fixed the tolls to be paid by foreign shipping for passage through the Panama canal as follows: "On merchant vessels carrying passengers or cargo, $1.20 per net vessel ton — each 100 cubic feet — of actual earning capacity. "On vessels in ballast without passengers or cargo, 40 per cent less than the rate of tolls for vessels with passengers or cargo. "Upon naval vessels other than transports, colliers, hospital ships and supply ships, 50 cents per displacement ton. "Upon army and navy transports, colliers, hospital ships and supply ships, $1.20 per net ton, the vessels to be measured by the same rules as are employed to determining the net tonnage of merchant vessels. (51) For full text of amendment of August 24, 1912, see Appendix I. (52) n Stats, at Large, 701. 42 AMERICAN COMMERCE ASSOCIATION ment, and sessional reports made to Congress of the progress thereof/^^* (12) Supplemental Act of October 15, 1914.''*^ The Act to Regulate Commerce was further amended and enforced by the enactment of the Clayton Anti-Trust Law of 1914, which divided the enforcement of its new powers between the Commission and other government regulajting agen- cies. While prosecutions arising from this practice have been against shippers only, there have been evidences that the laxness of the carriers in recognizing and paying false claims amounts, in efifect, to the granting of rebates from the lawful rates. Evidence of this kind, tending to show that carriers as well as shippers are responsible for the filing and payment of excessive damage claims, was under review by the Interstate Commerce Commission. These prosecutions, resulting from the investigations, indicate the volume of work handled before grand juries and in the courts. However, the larger part of the field investigations did not disclose violations of law. It is proper to state that in many instances investigations of complaints made by shippers and others against carriers disclosed that the complaint was groundless and that the carrier's practice was beyond criticism. Indeed, in one or two cases it was found that the carrier was not only complying with the law but that the very efficiency of its policing arrangements was the real reason for the complaint. As to several other matters investigated, while the prac- tice involved was found to be questionable, the subject was handled by correspondence or conference and the ob- jectionable features thus eliminated. As the strict re- quirements of the law become more completely appre- (53) For full text of amendment of March 1, 1913, see Appendix I. (M> 38 Stats, at Large, 730. INTERSTATE COMMERCE LAW 43 dated it may be anticipated that the number of cases in which questionable practices can be corrected by confer- ence rather than prosecution will increase. '^^^ (13) Amendment of March 4, 1915/"> The Cummins Amendment was an amendatory act passed on March 4, 1915, amending section 20, of the Act to Regulate Com-- merce, to prohibit common carriers subject to the Act limiting their common-law liability, not only as insurers against loss or damage to property received by them for transportation, but also as tortfeasors for loss or damage caused by their negligence. Many widely varying or diametrically opposed ideas were expressed as to the effect of this amendment. Some looked upon the legislation as having the effect to auto- matically advance railroad freight rates ten per cent. The Commission on May 7, 1915, gave administrative expres- sion to its views respecting this and certain other ques- tions which may be found discussed under "Limitation of Liability," post.<"> (14) Supplemental Act of August 9, 1916.'"' The Bill of Lading Act, known as the Pomerene Bill, is a distinct enactment by the national legislature relating to bills of lading, but to the extent that its provisions affect the use of the bill of lading in interstate commerce, its effect is amendatory of the bill of lading provisions of the Act to Regulate Commerce.'^®' (15) Amendment of August 29, 1916/®°' Congress re- (66) For full text of amendment of October 15, 1914, see Appen- dix, Part IV. <»e) 38 Stats, at Large, 1197 became effective June 3, 1915. (57) For full text of amendment of March 4, 1915, see Appendix, Part IV. <58) Public No. 239, 64th Congress. (59) For full text of amendment of August 9, 1916, see Appen- dix, Part IV. <«0) 39 Stats, at Large, 556. 44 AMERICAN COMMERCE ASSOCIATION amended the 1915 amendment of section 20, of the Act to Regulate Commerce, known as the "Cummins Amend- ment," specifically qualif3nng the several provisions of the amendment as to which serious questions of interpreta- tion had arisen. '°^' The new statute regulating bills of lading became ef- fective January 1, 1917. (61) For full text of Amendatory Act of August 29, 1916, see Ap- pendix, Part IV. CHAPTER III. THE ACT TO REGULATE COMMERCE AS AMENDED. § 1. Jurisdiction and Scope of tihe Act — General. S 2. Creation of the Interstate Commerce Commission. 45 CHAPTER III. THE ACT TO REGULATE COMMERCE AS AMENDED. § 1. Jurisdiction and Scope of the Act — General. The Act to Regulate Commerce as originally passed in 1887, applied only to those carriers who were engaged in the transportation of persons or property, or both, wholly by railroad or partly by railroad and partly by water and to all such transportation and the agencies thereof not ex- clusively within the jurisdiction of the state government. It did not bring within the scope of the act transporta- tion by means of teams and wagons or wholly by water, nor did it include as carriers certain special transportation agencies of ultra-modern nature. It was plainly the intent of the act to apply to all the interstate commerce of the country conducted by railroad transportation or by combined railroad and water trans- portation. The scheme of regulation promulgated through the enactment sought not only to regulate such interstate commerce and the transportation agencies thereof, but to provide the necessary means for enforcing such regu- lation through the instrumentality of an administrative commission created by the act. The purpose of the act, the courts said, was "to secure just and reasonable charges for transportation; to prohibit unjust discrimination in the rendition of like services under similar conditions and cir- cumstances; to prevent undue and unreasonable prefer- ences to persons, corporations, or localities; to prohibit greater compensation for a shorter than for a longer dis- 16-4 47 48 AMERICAN COMMERCE ASSOCIATION tance of transportation over the same line; and to abolish combinations for the pooling of freights." I C. C. vs. Cincinnati, etc., 167 U. S. 479, 510. I. C. C. vs. B. & O. R. R. Co., 145 U. S. 263. U. S. vs. Mo. Pac. Ry. Co., 65 Fed. Rep. 903, 905. I. C. C. vs. B. & O. R. R. Co., 43 Fed. Rep. 37. In other words, the statute was designed by its framers to afford means for enforcing equal rights of shippers, equality and stability of rates, abolishment of favoritism among shippers, publication of rates, rules and regulations of the carriers subject to the act, and the inhibition of dis- criminatory practices, such as the allowing of rebates to shippers, undue preferences, etc. While the act neither enlarged nor curtailed the rights of the carriers at com- mon law, it had for its objective the regulation of such carriers under then existing laws and the bringing of them back into their real character of public agencies affording equitable transportation treatment of the ship- pers. The broad public purpose of the legislation was to apply the regulatory provisions of the act to the country as a unit. The operation of the inquisitorial and adjustive fea- tures of the act could only be set in motion by specific complaint against a direct injury to persons or industries or indirect injury to communities. Although the statute authorized and empowered the Interstate Commerce Com- mission, created by it, to prescribe maximum rates, it afforded no power in that body to establish general rate schedules, but left to the carriers the right to initiate their own rates, charges, rules, and regulations not in violence to any of the provisions of the act. It further qualified the exercise of this right by the carriers on a basis of equality. It in no way interfered with the common law right of the carriers to make contracts, nor did it prevent INTERSTATE COMMERCE LAW 49 competition or hamper the business of the carriers; on the contrary, it sought to facilitate commercial transportation within its jurisdiction and to encourage legitimate and open competition among the carriers. The original act soon reached the courts and their analyses and constructions of its constitutional character- istics occupy the most prominent portions of the early his- tory of the statute's administration. These judicial re- views of the act have an important bearing upon the con- stitutional power of Congress to enact the commerce law. In the Social Circle Case, the Supreme Court of the United States, in speaking of the scope of the Act to Regu- late Commerce, quoted from the B. & O. R. R. Co. case, as follows : — "Subject to the two leading prohibitions that their charges shall not be unjust or unreasonable, that they shall not unjustly discriminate, so as to give undue preference or disadvantage to persons or traffic simi- larly circumstanced, the act to regulate commerce leaves common carriers as they were at the common law, free to make special contracts looking to the in- crease of their business, to classifying their traffic, to adjust and apportion their rates so as to meet the necessities of commerce, and generally to manage their important interests upon the same principles which are regarded as sound, and adopted in other ■trades and pursuits." Social Circle Case, 162 U. S. 184. U. S. vs. B. & O. R. R. Co., 43 Fed. Rep. 47. The act "abrogated all executory contracts between shippers and carriers inconsistent with its provisions," and it was held to be not contrary to the constitution in so doing. Moore on Interest. Com., section 17, page 40. K. & I. Br. Co. V. L. & N. R. Co., 1 I. C. C. Rep. 703, 715. 50 AMERICAN COMMERCE ASSOCIATION Fitzgerald vs. Fitzgerald & M. C. Co., 41 Neb. 374. Haddock vs. D. L. & W. R. R. Co., 3 I. C. C. Rep. 302. Even though the courts had pointedly indicated the necessity for the exercise of the federal regulation of the carriers before the passage of the Act to Regulate Com- merce, in 1887, their subsequent construction of the act reflects subtle antagonism to the quasi-judicial powers conferred upon the Commission. That the enactment of the statute was within the powers vested in Congress by the constitution was never doubted but in the early life of the Commission, it was necessary that construction should be given to the several sections of the Act by the Commission in its administrative enforce- ment of the provisions of the statute. The nature of the act as a whole was remedial and the Commission's earliest constructions were sufificiently broad and liberal to accom- plish the purposes for which the statute was passed. In the Express Companies Case, the Interstate Com- merce Commission, speaking of the constructive analysis of the Act, said : — "While this statute contains certain provisions for penalties, in the execution of which the courts will, no doubt, follow the recognized canons of construction, nevertheless the statute, as a whole, should be re- garded as highly remedial in its purpose and scope. It was clearly designed to secure to the public equal and impartial rights and privileges, and to put an end to ancient and well-known abuses in the services ren- dered by common carriers. Such a statute should be construed liberally and fairly, of course, but always with the object in view of reaching as closely as pos- sible the end proposed by the legislative intention, and making the beneficial result desired operative to its greatest available extent." In re Express Companies, 1 I. C. Rep. 677, 681, INTERSTATE COMMERCE LAW 51 The administrative experience of the Commission de- veloped defects in the provisions of the Act in rendering inefifectual its control of contingencies and artifices not contemplated nor comprehended by the lawmakers at the time of its enactment. The constructions of the Act by the Supreme Court of the United States and of the lower federal courts in reviewing and setting aside the orders of the Commission prior to 1906 had had the efifect of rendering to a large degree ineffective the power of the Commission to enforce its orders and regulations. The Supreme Court had ren- dered ineffective the long-and-short-haul clause in the fourth section of the Act by holding that competition inherently prevented shippers from being situated under substantially similar conditions and circumstances. The Commission was thereby rendered powerless to prevent the miscarriage of many of its primary powers, and suc- cessive amendments have been necessary to give to the Act to Regulate Commerce its present superlative effi- ciency, the most important extensive supplementations of the Act being the enactments known as the Hepburn Act of 1906 and the Mann-Elkins Act of 1910. The Supreme Court's interpretation of the powers of the Commission under the several sections of the Act was, in many instances, decidedly different from the construc- tion and exercise of administrative powers as interpreted by the Commission itself. The court held the Commis- sion to be without power to fix maximum or minimum rates for the future, despite the language of the Act, and the need for curative amending of the statute was con- stantly felt in the early years of the Commission's existence. Social Circle Case, supra. 52 AMERICAN COMMERCE ASSOCIATION The general jurisdiction of the Act to Regulate Com- merce, as amended, is national in character, relating to the interstate and foreign commerce of the country as a whole, but in its determination, the jurisdiction arises from the character of the transportation. Prior to the amendment of 1906, the court had held that the jurisdiction of the Act to Regulate Commerce did not lie as to a state railroad ''unless by common ownership or control, or by some agreement, it became a part of a line which did handle" interstate traffic, but since the Hepburn amendment the jurisdiction is determined by the character of the transportation itself rather than by any inter- carrier arrangement for its transportation. The jurisdiction of the Act to Regulate Commerce, and its supplementary and amendatory acts, is not concurrent with the authority of Congress, as it does not extend to and include all forms of interstate transportation, such, for instance, as interstate transportation, wholly by water, or by vehicles or instrumentalities other than those enu- merated in the first section of the statute, over which should Congress legislate, its constitutional authority is unquestioned. An accurate analysis of the jurisdictional features of the interstate regulating system must of necessity be lengthy, and the many ramifications of the Commission's powers require subjugated treatment, which will be found in the subsequent sections on "Interstate Commerce Law." Moore on Interstate Commerce, section 31, page 63. Leonard vs. K. C. S. Ry. Co., 13 I. C. C. Rep. 573. § 2. Creation of the Interstate Commerce Commission. Section 11 of the original Act to Regulate Commerce created a commission consisting of five commissioners to INTERSTATE COMMERCE LAW 53 be appointed by the President of the United States and concurred in by the Senate, to be known as the "Interstate Commerce Commission." The Commission was charged with the power and duty of administering the provisions of the Act to Regulate Commerce. The principal oflfiice of the Commission was fixed at Washington, D. C, where its general sessions were to be held, but it was also authorized, when public convenience and economy required, to hold sessions in any part of the United States. Under the provisions of the original Act, the salaries of the respective commissioners were fixed at $7,500 per annum, but by the amendment of June 29, 1906 (Hepburn Law), the salaries were increased to $10,000 a year and the membership of the Commission to seven. For the legal nature of, executive and departmental organization of the Interstate Commerce Commission, see "Interstate Commerce Commission," Part IV, post. CHAPTER IV. THE ACT TO REGULATE COMMERCE AS AMENDED. (CONTINUED). § 1. Carriers and Kinds of Transportation Subject to the Act. § 2. Definition of Terms in the Act. (1) Term "Carrier" Denned. (2) Term "Common Carrier" Defined. (3) Term "Railroad" Defined. (4) Term. "Transportation" Defined. (5) Term "Employees" Defined. (6) Term "Families" Defined. § 3. Detailed Description of Carriers Subject to the Act. 55 CHAPTER IV. THE ACT TO REGULATE COMMERCE AS AMENDED. (CONTINUED). § 1. Carriers and Kinds of Transportation Subject to the Act. The jurisdiction of the Act to Regulate Commerce, as amended, extends over and inckides the following abstract description of carriers and transportation: (a) Any corporation, person or persons engaged in the transportation of oil or other commodity, except water and except natural pr artificial gas, by means of pipe lines, or partly by pipe lines and partly by railroad, or partly by pipe lines and partly by water; (b) Telegraph, telephone and cable companies, whether wire or wireless, engaged in sending messages; (c) Any common carrier or carriers engaged in the transportation of passengers or property wholly by rail- road, or partly by railroad and partly by water when both are used under a common control, management or arrange- ment for a continuous carriage or shipment; from one state or territory of the United States or the Dis- trict of Columbia to any other state or territory of the United States or the District of Columbia, or from one place in a territory to another place in the same territory, or from any place in the United States to an adjacent foreign country, or from any place in the United States through a foreign country to any other place in the United States; 57 58 AMERICAN COMMERCE ASSOCIATION The transportation in like manner of property shipped from any place in the United States to a foreign country and carried from such place to a port of transshipment, or shipped from a foreign country to any place in the United States and carried to such place from a port of entry in the United States or an adjacent foreign country. § 2. Definition of Terms in the Act. The Act contains definitions of certain terms the mean- ings of which are of particular significance in the descrip- tive jurisdiction of the regulatory laws. (1) Term "Carrier" Defined. The use of the word "carrier" in the Act is defined to mean "common carrier." (2) Term "Common Carrier" Defined. The common- law definition of the term "common carrier" is not given in the words of the Act, but the term is nevertheless sub- ject to such common-law definition, and as now used in the Act includes express companies and sleeping car com- panies. Tap Line Cases, 234 U. S. 1. (3) Term "Railroad" Defined. The term "railroad," as used in the Act, is defined by the statute to include all bridges and ferries used or operated in connection with any railroad, and also all the road in use by any corpora- tion operating a railroad, whether owned or operated under a contract, agreement, or lease, and also all switches, spurs, tracks, and terminal facilities of every kind used or necessary in the transportation of the persons or prop- erty designated in the Act, and also all freight depots, yards, and grounds used or necessary in the transportation or delivery of any of said property. (4) Term "Transportation" Defined. The term "trans- INTERSTATE COMMERCE LAW 59 portation," as used in the Act, is defined by the statute to include cars and other vehicles and all instrumentalities and facilities of shipment or carriage irrespective of own- ership or of any contract, express or implied, for the use thereof and all services in connection with the receipt, delivery, elevation, and transfer in transit, ventilation, refrigeration or icing, storage, and handling of property transported. (5) Term "Employees" Defined. The term "em- ployees," as used in the Act, is defined by the statute to include furloughed, pensioned, and superannuated em- ployees, persons who have become disabled or infirm in the service of any common carrier subject to the Act, and the remains of a person killed in the employment of such a carrier and ex-employees traveling for the purpose of entering the service of any such common carrier. (6) Term "Families" Defined. The term "families," as used in the Act, is defined by the statute to include the families of those persons named in the proviso in the Act relating to free transportation, and also the families of persons killed, and the widows during widowhood and minor children during minority of persons who died in the service of any common carrier subject to the Act. Act to Regulate Commerce, section 1. § 3. Detailed Description of Carriers Subject to the Act. The basis of jurisdiction of the Act to Regulate Com- merce over common carriers is functional. The descrip- tion of such transportation entities in the language of the statute is in the abstract. Categorically, the following transportation agencies, when engaged either wholly or partly in interstate com- 60 AMERICAN COMMERCE ASSOCIATION merce, are within the jurisdiction of the Act to Regulate Commerce and its amendatory and supplemental acts: Belt railroads. Bridges and bridge companies. Cable companies. Car ferries. Express companies. Fast freight lines. Ferries and ferry companies. Foreign railroads. Inland water carriers. Interstate steam railroads. Interstate electric railroads. Interstate street railways. Intraterritorial common carriers. Lighters and lighterage companies. Ocean carriers. Pipe lines and pipe line companies. Private car companies. Purchasers of common carriers subject to the Act. Receivers of common carriers subject to the Act. Sleeping car companies. State railroads (steam or electric). Successors of common carriers subject to the Act. Telegraph comipanies. Telephone companies. Terminal and belt railroads. Trustee of common carriers subject to the Act. CHAPTER V. THE ACT TO REGULATE COMMERCE AS AMENDED. (CONTINUED). Amplification of Sections. f 1. Statutory Provisions of Section 1, as Amended. § 2. Kinds of Carriers Subject to the Act. (1) Pipe Lines. § 3. Telegraph, Telephone and Cable Companies. § 4. Common Carriers by Railroad and by Railroad and Water. § 5. Jurisdictional Status of Common Carriers in General. § 6. Common Law Definition of a Common Carrier. § 7. Common Law Obligations and Rights of Common Carriers not Abrogated by the Act. § 8. Incorporation of Common Carrier not full Test of Jurisdiction. § 9. Effect of Incorporation of Common Carrier. § 10. Carriers not Subject to the Act. § 11. Jurisdiction of Act over State Common Carriers. § 12. Common Arrangement Between Carriers. § 13. Interstate Commerce Commission on "Common Arrangement" prior to Amendment of 1906. § 14. Through Bill of Lading not Necessary to Constitute "Common Arrangementi." (Prior to 1906.) § 15. Foreign Carriers. § 16. Rail and Water Carriers. § 17. Carriers Transporting Express Matter. § 18. Bridges and Bridge Companies. § 19. Relation of Carrier Operating over Bridge with Bridge Company. § 20. Bridges Connecting two States. § 21. Bridges Included in Term "Railroad." § 22. Bridges as Part of Carrier's Line. § 23. Bridges not Common Carriers. § 24. Cable Companies as Common Carriers. § 25. Fast Freight Lines as Common Carriers. § 26. Express Companies as Common Carriers. § 27. Car Ferries as Common Carriers. (1) Car Ferries. (2) Municipal Ferries. 61 62 AMERICAN COMMERCE ASSOCIATION § 28. Foreign Railroads as Common Carriers. § 29. Inland Water Carriers. § 30. Interstate Railroads. § 31. Electric Street Railways. § 32. Intraterritorial Common Carriers. (1) Common Carriers in Alaska, (2) Common Carriers in Porto Rico. (3) Common Carriers in Hawaii. (4) Common Carriers in Philippine Islands. (5) Common Carriers in the Panama Canal Zone. § 33. Lighters and Lighterage Companies. § 34. Ocean Carriers. § 35. Private Car Companies. § 35. Purchasers and Successors of Common Carriers. § 37. Trustees and Receivers of Common Carriers. § 38. Lessees of Common Carriers. § 39. Sleeping Car Companies. § 40. State Railroads Engaged in Interstate Transportation. (1) Rulings Respecting State Carriers prior to the 1906 Amendment of the Act to Regulate Commerce. § 41. Street Railways v/ithin the District of Columbia. § 42. Terminal and Belt Railroads Engaged in Handling Interstate TrafEc. (1) Industrial Railways. (2) Tap Lines. (3) Plant Facilities. § 43. Jurisdiction of the Commission not Affected by Nature of Organ- ization of Carrier. § 44. Kinds of Transportation Subject to the Act. § 45. Movement in Transportation Conclusive. § 46. Difference between Interstate Carriers and Interstate Transpor- tation. § 47. Interstate and Foreign Commerce Subject to Act. § 48. Transportation of Foreign Traffic Between the United States and Adjacent Foreign Country. § 49. Statutory Provisions relating to Transportation to Ports of Transshipm.ent. § 50. Statutory Provisions relating to Transportation of Foreign Traffic from a Foreign Country to a Point in the United States. § 51. When Act to Regulate Commerce Abrogates State Statute. § 52. "Interstate Commerce" — What Constitutes. § 53. Character of Transportation Determined by Contract of Ship- ment. § 54. Character of Transportation Controls, Not Shipper's Intent. INTERSTATE COMMERCE LAW 63 § 55. "Common Arrangement" Clause not Applicable to All-Rail Trans- portation. § 56. Effect of Temporary Stoppage in Transit. § 57. Intraterritorial Transportation. § 58. Rail-and-Water Transportation. 16—5 CHAPTER V. THE ACT TO REGULATE COMMERCE AS AMENDED. (CONTINUED). Amplification of Sections. § 1. Statutory Provisions of Section 1, as Amended. (As amended June 29, 1906, April 13, 1903, and June 18, earners 1910.) and tran sportatlon subject to the Act. "Tliat the provisions of this Act shall apply to any corporation or any person or persons engaged in the transportation of oil or other commodity, except water and except natural or artificial gas, by means of pipe lines, or partly by pipe lines and partly by railroad, or partly by pipe lines and partly by water, and to tele- graph, telephone, and cable companies (whether wire or wireless) engaged in sending messages from one State, Territory, or District of the United States, or to any other State, Territory, or District of the United States, or to any foreign country, who shall be consid- ered and held to be common carriers within the mean- ing and purpose of this Act, and to any common car- rier or carriers engaged in the transportation of passengers or property wholly by railroad (or partly by railroad and partly by water when both are used under a common control, management, or arrange- ment for a continuous carriage or shipment), from one State or Territory of the United States or the District of Columbia, to any other State or Territory of the United States or the District of Columbia, or from one place in a Territory to another place in the same Territory, or from any place in the United States to an adjacent foreign country, or from any place in the United States through a foreign country to any other place in the United States, and also to the trans- 65 Telegrann. tsla- lilione, and ch- ble companios. Railroads and water lines. 66 AMERICAN COMMERCE ASSOCIATION portation in like manner of property shipped from any place in the United States to a foreign country and carried from such place to a port of transshipment, or shipped from a foreign country to any place in the United States and carried to such place from a port of entry either in the United States or an adjacent for- *V°*ta"tra": eign country: Provided, however, That the pro- ?y''*wVthin*''on; visious of this Act shall not apply to the transporta- tion of passengers or property, or to the receiving, delivering, storage, or handling of property wholly within one State and not shipped to or from a foreign country from or to any State or Territory as aforesaid, nor shall they apply to the transmission of messages by telephone, telegraph, or cable wholly within one State and not transmitted to or from a foreign country from or to any State or Territory as aforesaid. "The term 'common carrier' as used in this Act, ^"n'tM^an/Te"! shall iuclude express companies and sleeping car com- ing car compa- • r-r^-, , ( -i j> i • i • a < ,. , nies included, pauics. i hc tcmi railroad as used m this Act shall What the term . , , ,, , . , , ^ . , . . oi'JdM'"'" '"■ ii'iclude all bridges and ferries used or operated in connection with any railroad, and also all the road in use by any corporation operating a railroad, whether owned or operated under a contract, agreement, or lease, and shall also include all switches, spurs, tracks, and terminal facilities of every kind used or necessary in the transportation of the persons or property desig- nated herein, and also all freight depots, yards, and grounds used or necessary in the transportation or delivery of any of said property; and the term 'trans- portation' shall include cars and other vehicles and ^''''tVan''s%o*rta™ all instrumentalities and facilities of shipment or car- tlon" include». . . ... , . . riage, irrespective of ownership or of an)'- contract, express or implied, for the use thereof and all services in connection with the receipt, delivery, elevation, and transfer in transit, ventilation, refrigeration or icing, storage,, and handling of property transported; and it shall be the duty of every carrier subject to the provisions of this Act to provide and furnish such transportation upon reasonable request therefor, and INTERSTATE COMMERCE LAW 67 to establish through routes and just and reasonable rates applicable thereto; and to provide reasonable facilities for operating such through routes and to make reasonable rules and regulations with respect to the exchange, interchange, and return of cars used therein, and for the operation of such through routes, and providing for reasonable compensation to those entitled thereto. *'A11 charges made for any service rendered or to be ^''jt.8ra!!d"'rea- rendered in the transportation of passengers or prop- """""'• erty and for the transmission of messages by tele- graph, telephone, or cable, as aforesaid, or in connection therewith, shall be just and reasonable; and every unjust and unreasonable charge for such service or any part thereof is prohibited and declared to be unlawful: Provided, That messages by tele- graph, telephone, or cable, subject to the provisions of this Act, may be classified into day, night, repeated, unrepeated, letter, commercial, press, Government, and such other classes as are just and reasonable, and different rates may be charged for the different classes of messages : And provided further. That nothing in this Act shall be construed to prevent telephone, tele- graph, and cable companies from entering into con- tracts with common carriers, for the exchange of services. "And it is hereby made the duty of all common car- riers subject to the provisions of this Act to establish, observe, and enforce just and reasonable classifica- tions of property for transportation, with reference to which rates, tariffs, regulations, or practices are or may be made or prescribed, and just and reasonable regulations and practices affecting classifications, rates, or tariffs, the issuance, form, and substance of tickets, receipts, and bills of lading, the manner and method of presenting, marking, packing, and deliver- ing property for transportation, the facilities for transportation, the carrying of personal, sample, and excess baggage, and all other matters relating to or connected with the receiving, handling, transporting, Class i fl cation?, regulations, and practices musl be Just and raa- sonable. 68 AMERICAN COMMERCE ASSOCIATION storing, and delivery of property subject to the pro- visions of this Act v/hich may be necessary or proper to secure the safe and prompt receipt, handling, trans- portation, and delivery of property subject to the pro- visions of this Act upon just and reasonable terms, and every such unjust and unreasonable classification, regulation, and practice with reference to commerce between the States and with foreign countries is pro- hibited and declared to be unlawful. ""freetrrnsportal "^^o common Carrier subject to the provisions of tion prohibited, ^j^jg js^^^ ^^^^^ ^f^^j. January first, nineteen hundred and seven, directly or indirectly, issue or give any interstate free ticket, free pass, or free transportation for passengers, except to its employees and their fami- lies, its officers, agents, surgeons, physicians, and Excepted ciass«a. attomcys at law ; to ministers of religion, traveling secretaries of railroad Young ]\Ien's Christian Assn- ciations, inmates of hospitals and charitable and eleemosynary institutions, and persons exclusively engaged in charitable and eleemosynary work; to indigent, destitute, and homeless persons, and to such persons when transported by charitable societies or hospitals, and the necessary agents employed in such transportation; to inmates of the National Homes or State Homes for Disabled Volunteer Soldiers, and of Soldiers' and Sailors' Homes, including those about to enter and those returning home after discharge; to necessary care takers of live stock, poultry, milk, and fruit; to employees on sleeping cars, express cars, and to linemen of telegraph and telephone companies; to Railway Mail Service employees, post-office inspec- tors, custom inspectors, and immigration inspectors; to newsboys on trains, baggage agents, witnesses attending any legal investigation in which the com- mon carrier is interested, persons injured in wrecks and physicians and nurses attending such persons : Interchange of Provided, That this provision shall not be construed passes author- _ '_ _ J^ ized. ^Q prohibit the interchange of passes for the officers, agents, and employees of common carriers, and their INTERSTATE COMMERCE LAW 69 families; nor to prohibit any common carrier from carrying passengers free v/ith the object of providing relief in cases of general epidemic, pestilence, or other calamitous visitation: And provided further, That this provision shall not be construed to prohibit the privilege of passes or franks, or the exchange thereof with each other, for the officers, agents, employees, and their families of such telegraph, telephone, and cable lines, and the officers, agents, employees, and their families of other common carriers subject to the provisions of this Act: Provided further. That the term 'employees' as used in this paragraph shall what term •••m- include furloughed, pensioned, and superannuated j'/u^^V'^'" '"" employees, persons vv^ho have become disabled or infirm in the service of any such common carrier, and the remains of a person killed in the employment of a carrier and ex-employees traveling for the purpose of entering the service of any such common carrier; and the term 'families' as used in this paragraph shall include the families of those persons named in this proviso, also the families of persons killed, and the widows during widowhood and minor children during minority of persons who died, while in the service of any such common carrier. Any common carrier vio- Jurisdiction and V ^ _ _ penalty for vio- lating this provision shall be deemed guilty of a misde- '"*''>"• meanor, and for each offense, on conviction, shall pay to the United States a penalty of not less than one hundred dollars nor more than two thousand dollars, and any person, other than the persons excepted in the provision, who uses any such interstate free ticket, free pass, or free transportation shall be sub- ject to a like penalty. Jurisdiction of offenses under this provision shall be the same as that provided for offenses in an Act entitled, 'An Act to further regu- late commerce with foreign nations and among the States,' approved February nineteenth, nineteen hun- dred and three, and any amendment thereof. "From and after May first, nineteen hundred and commodities eight, it shall be unlawful for any railroad company 70 AMERICAN COMMERCE ASSOCIATION to transport from any State, Territory, or the District of Columbia, to any other State, Territory, or the Dis- trict of Columbia, or to any foreign country, any article or commodity, other than timber and the manufactured products thereof, manufactured, mined, or produced by it, or under its authority, or which it may o\vn in whole or in part, or in which it may have any interest, direct or indirect, except such articles or comm.odities as may be necessary and intended for its use in the conduct of its business as a common carrier. "Any common carrier subject to the provisions of this Act, upon application of any lateral, branch line of railroad, or of any shipper tendering interstate traffic for transportation, shall construct, maintain, and operate upon reasonable terms a switch connec- tion with any such lateral, branch line of railroad, or '^wnstTuefsiyh pi'ivate side track which may be constructed to con- ocnncctioi.s. ^^^^^ with its railroad, where such connection is rea- sonably practicable and can be put in with safety and will furnish sufficient business to justify the construc- tion and maintenance of the same; and shall furnish cars for the movement of such trafhc to the best of its ability without discrimination in favor of or against any such shipper. If any common carrier shall fail to install and operate any such sv/itch or connection as aforesaid, on application therefor in writing by any shipper or owner of such lateral, branch line of railroad, such shipper or owner of such lateral, branch line of railroad may make complaint to the Commis- sion, as provided in section thirteen of this Act, and the Commission shall hear and investigate the same and shall determine as to the safety and practicability thereof and justification and reasonable compensation therefor, and the Commission may make an order, as provided in section fifteen of this Act, directing the ^*on*s'' m^"''b8 couimon carrier to comply with the provisions of this ordered by the . • • i •. i t , i 11 Commission. scctiou m accordaucc with such order, and such order shall be enforced as hereinafter provided for the INTERSTATE COMMERCE LAW 71 enforcement of all other orders by the Commission, other than orders for the payment of money." § 2. Kinds of Carriers Subject to the Act. Since the character of the transportation is the real inter- state jurisdictional test rather than the corporate, physical, or other status of the carrier, the subsequent classification of the various kinds of carriers subject to the Act is pre- liminary to a more searching jurisdictional test of the functions performed by the several types of transportation agencies in the carriage of interstate traffic. (1) Pipe Lines. The Act provides in section 1 that it shall apply to "any corporation, person or persons, engaged in the transportation of oil or other commodity, except w^ater and except natural or artificial gas, by means of pipe lines, or partly by pipe lines and partly by railroad, or partly by pipe lines and partly by water. Act to Regulate Commerce, section 1. A pipe line is defined in the law dictionay to be a con- nected series of pipes for the transportation of oil, gas, or water. And again, as a line of pipes running upon or in the earth carrying with it the right to the use of the soil in which it is placed. Bouvier's Law Dictionary, subj.. "Pipe Lines." Dietz vs. Mission Trans. Co., 95 Cal. 92, 30 Pac. Rep. 380. A pipe line company for conveying oils is a common carrier, bound to receive and transport for all persons alike, all goods entrusted to its care, and is not in any sense, or at any time, an agent for the person committing oil to its care. Griffin vs. S. W. Pa. Pipe Lines, 33 Atl. Rep. 578. Columbia Conduit Co. vs. Com., 90 Pa. 307. 72 AMERICAN COMMERCE ASSOCIATION In the Matter of Pipe Lines, 24 I. C C. Rep. 1, the Commission declared that the Act to Regulate Commerce impressed the obligations of a common carrier upon a pipe line engaged in the transportation of oil in interstate com- merce, even though such pipe line was built over its pri- vately acquired right-of-w^ay, and transported only its own oil. Such traffic is not divested of its interstate character by the placing of the ownership of the pipe line in a differ- ent corporation in each state through which the transpor- tation is performed and by transferring the title to the oil to each of such corporations contemporaneously with the entrance of the oil into the pipes of that corporation at the state line. However, the utilization by a pipe line of the right-of- way of a common carrier railroad does not impress upon that pipe line the obligations of a common carrier, nor is a pipe line impressed with the obligations of a common carrier merely because, by arrangement with the abutting owner, it uses a public highway for right-of-way purposes. The transfer by a common carrier pipe line to a private corporation of a portion of its property theretofore used in its common carrier operations, but not located in the state wherein it was incorporated as a common carrier, can not effect a release of the property from the obliga- tions of a common carrier. The Commission held that the transportation by the New York Transit Co., in New Jersey, and by the Na- tional Transit Co., in New Jersey and Maryland, prior to November 1, 1905, was transportation by these corpora- tions as common carriers. In this case the Commission declined to pass upon a Kansas statute making pipe lines common carriers, merely holding that as to the phases of the federal statute which INTERSTATE COMMERCE LAW 73 are ineffective, a similar state enactment must also be ineffective.^^* Thus an oil company owning a common carrier pipe line which actually did, or which might, compete with its own steamers, was held to bring such a situation within the scope of the Panama Canal Act. S. P. Ownership of Oil Steamers, 34 I. C. C. Rep. 11, 82. See in this connection the status of common carriership applied to tap lines by the Supreme Court in this chapter, post. § 3. Telegraph, Telephone, and Cable Companies. Whether wire or wireless, a telegraph, telephone, or cable, company, engaged in sending messages from one state, territory, or district of the United States, to any other state, territory, or district of the United States or to any foreign country, is within the jurisdiction of the Act. Act to Regulate Commerce, section 1. Telegraph, Telephone and Cable companies were not subject to the Act prior to the amendment of June 18, 1910. A telephone, telegraph, or cable company is a public '1' The Commission, in the proceeding referred to, declared the following pipe lines to be common carriers within the jurisdiction of the Act to Regulate Commerce: Oklahoma Pipe Line Co. Prairie Oil & Gas Co. Standard Oil Co. iof Louisiana, Ohio Oil Co. Standard Oil Co. of New Jersey. Tidev/ater Pipe Line Co., Ltd. Producers' & Refiners' Oil Co., Ltd. United States Pipe Line Co. Pure Oil Co. Pure Oil Pipe Line Co. National Pipe Line Co. Uncle Sam Oil Co. Uncle Sam Oil Co. of Kansas, 74 AMERICAN COMMERCE ASSOCIATION servant, and subject to the provisions of the amended Act forbidding undue preference or unjust discrimination Barnes, Interstate Commerce, sections 37, 38, 39. The character of the transportation service is also the in- terstate jurisdictional test as to telegraph, telephone, or cable companies. It has been held that telegraphic and tele- phonic intercourse and communication between points in different states constitute interstate commerce, and a state telegraph or telephone company v^hich transmits interstate messages is within the jurisdiction of the Act. I. C. C. Confr. Rulings, Bulletin No. 6, Ruling No. 305 (compare Ruling No. 291). Local" Commercial Telephone Service in Pittsburgh, Pa., 27 I. C. C. Rep. 622, 624. Shoemaker vs. C. & P. Telephone Co., 20 I. C. C. Rep. 614, 621. W. U. Tel. Co. vs. Pendleton, 122 U. S. 356. Muskogee Nat. Tel. Co. vs. Hall, 118 Fed. Rep. 382. Sunset Tel. & Tel. Co. vs. Eureka. 172 Fed. Rep. 755. Re Penn. Tel. Co., 48 N. J. Eq. 91. N. W. Tel. Co. vs. Chicago, 76 Minn. 334. Legal logic of Social Circle Case, supra. See also: Malone vs. N. Y. Telephone Co., 40 I. C. C. Rep. 185. No jurisdiction lies in the Act over telegraph or tele- phone companies, or cable lines, as to their business operated solely within the District of Columbia, such authority being vested in the Public Utilities Commission of the District of Columbia. But all telephone, telegraph, or cable companies transmitting interstate messages or communications must conform to the provisions of the Act the same as other common carriers subject thereto. Act to Regulate Commerce, section 1. INTERSTATE COMMERCE LAW 75 § 4. Common Carriers by Railroad and by Railroad and Water. Any common carrier or carriers engaged in the trans- portation of passengers or property wholly by railroad, or partly by railroad and partly by water when both are used under a common control, management, or arrangement for a continuous carriage or shipment, come within the juris- diction of the Act. Act to Regulate Commerce, section 1. § 5. Jurisdictional Status of Common Carriers in General. All common carriers enumerated in the provisions of the Act, engaged in the transportation between points in different states of interstate commerce, as defined in the Act, inclusive of such common carriers engaged in such transportation between a point in the United States and an adjacent foreign country, between points in the United States and ports of transshipment or entry therein, and between points in the same state when part of the trans- portation passes through another state, are within the jurisdiction of the Act to the extent so engaged. By specie, such common carriers are steam railroads, electric railroads, pipe lines (except for water and artificial or natural gas), express companies, sleeping car companies, boat lines (when used under arrangement for through carriage with railroads), telegraph, telephone, and cable companies. Rates in Chicago Switching District, 34 I. C. C. Rep. 234 237 238 A. T.' & S. F. R. Co. vs. K. C. Stockyards Co., 33 I. C. C. Rep. 92, 98, 100. Campbell's Creek Coal Co. vs. A. A. R. R. Co., 33 I. C. C. Rep. 558, 560. Stone's Express vs. B. & M. R. R. Co., 33 I. C. C. Rep. 638, 641. Joint Rates with Birmingham Southern R. R. Co., 32 I. C. C. Rep. 110, 120. 76 AMERICAN COMMERCE ASSOCIATION Industrial Railways Case, 32 I. C. C. Rep. 129, 133. Eastern Shore Dev. & S. S. Co. vs. B. & O. R. R. Co., 32 I. C. C. Rep. 238, 242. N. Y. Dock Ry. vs. B. & O. R. R. Co., 32 I. C. C. Rep. 568, 573, 574. Application of S. P. Co. in re operation of S. S. Co., 32 I. C. C. Rep. 690, 695. Decatur Xav. Co. vs. L. & N. R. R. Co., 31 I. C. C. Rep. 281, 285. Five Per Cent Case, 31 I. C. C. Rep. 351, 357. Flour City S. S. Co. vs. L. V. R. R. Co., 24 I. C. C. Reo. 179, 185. In re Cancellation of Joint Rates on Coal on the C. Z. & G. R. R. Co., 27 I. C. C. Rep. 353, 362. Kansas City, etc., vs. K. C. V. & T. Co., 24 I. C. C. Rep. 22. 25. Anton Piano Co. vs. C. M. & St. P. Ry. Co., 139 X. W. Rep. 743, 745 (Wis.). The Tap Line Case, 23 I. C. C. Rep. 277, 291, 292. In re Wharfage Charges, etc., 23 I. C. C. Rep. 535, 544. Gulf Coast Xav. Co. vs. K. C. S. Ry. Co., 19 I. C. C. Rep. 544. It should be noted, in this connection, that the functional test of the carrier as a jurisdictional determinant, while seemingly plainly stated in the language of the Act itself, has been flexed by the liberal interpretation given to the status-test by the Supreme Court in the Tap Line cases. The Interstate Commerce Commission had applied the test of service and ownership in determining the status of tap lines, but the Supreme Court declared such a conclu- sion lost sight of the principle, that the extent to which a railroad is in fact used does not determine the fact whether it is or is not a common carrier. It is the extent to which a railroad may be used as a matter of right — "the right of the public to use the road's facilities and to demand service of it rather than the extent of its busi- ness" — which is the real criterion determinative of its character. Tap Line Cases, 234 U. S. I. INTERSTATE COMMERCE LAW 77 § 6. Common Law Definition of a Common Carrier. At common law, a common carrier is one who under- takes as a business to carry and transport from one place to another, for hire, the goods of all persons who might apply for such carriage, provided the goods are of the kind which he professes to carry, and the persons so applying will agree to have them carried upon the terms prescribed by the carrier. Elliott on Railroads, volume IV, section 1391, et seq. 2 Am. & Eng. Encyl. of Law, title, "Carriers." Redfield on "Railway Carriers," 1. Hutchinson on "Carriers," section 47. And this is essentially an acceptable definition of a com- mon carrier at the present time, although the conditions of carriage which the carrier may now prescribe must be consonant with the regulatory laws. The test of status of a common carrier now is the character of service which it renders or holds itself out as willing to render, and which the public may demand of it. Stonega Coke & Coal Co. vs. L. & N. R. R. Co., 23 I C. C. Rep. 17. Tap Line Cases, 234 U. S. 1. Compare : Tap Line Case, 23 I. C. C. Rep. 277, 291, 292, and 23 I. C. C. Rep. 549. Hence, a common carrier, under the more modern acceptation of the term, is one who holds himself out as ready to engage in the transportation for hire as a public employment, and, in general, the liability of a common car- rier does not attach to one who does not so hold himself out. Kansas City vs. K. C. V. & T. Ry. Co., 24 I. C. C. Rep. 22, 25. 78 AMERICAN COMMERCE ASSOCIATION § 7. Common Law Obligations and Rights of Common Carriers Not Abrogated by the Act. The Act to Regulate Commerce does not abridge or take away the right of the common carrier, at common law, to make contracts or adopt proper business methods for the conduct of its business. Fundamentally the statute reaffirms the common law rules governing common carriers insofar as they pertain to and govern the trans- portation of interstate commerce, but vests in the Inter- state Commerce Commission an administrative super- vision of the carriers to the end that the lines of interstate carriers shall form a national system of public highways, the use of which may not be restricted by carriers in their own interests regardless of the rights of shippers. I. C. C. vs. L. & N. R. R. Co., 11 Fed. Rep. 409. Memphis Hay & Grain Assn. vs. St. L. & S. F. R. R. Co., 24 I. C. C. Rep. 609, 615. At common law it is the duty of a common carrier to transport persons and property at reasonable rates. Tift vs. So. Ry. Co., 123 Fed. Rep. 789. This principle, predicated as it is upon the quasi public nature of common carriers of persons and property for the public, was given voice to in the opinion of the Supreme Court in the Abilene case, where it was judicially declared : "Without going into detail, it may not be doubted that at common law, where a carrier refused to re- ceive goods offered for carriage except upon the pay- ment of an unreasonable sum, the shipper had a right of action in damages. It is also beyond controversy that when a carrier accepted goods without payment of the cost of carriage or an greement as to the price to be paid, and made an unreasonable exaction as a condition of the delivery of the goods, an action could INTERSTATE COMMERCE LAW 79 be maintained to recover the excess over a reasonable charge. And it may further be conceded that it is now settled that even where, on the receipt of goods by a carrier, an exorbitant charge is stated, and the same is coercively exacted either in advance or at the completion of the service, an action may be main- tained to recover the overcharge. 2 Kent, Comm, 599, and note A; 2 Smith Lead. Cas., part 1, 8th Ed., Hare & Wallace Notes, page 457. Texas & Pacific Ry. Co. vs. Abilene Cotton Oil Co., 204 U. S. 426. Penn. R. R. Co. vs. Preston, 237 U. S. 121. The common law condemned unjust discrimination and favored equality in the treatment of shippers under like conditions, and we find the Act to Regulate Commerce but adding concrete administrative force to the already existing principle of law. The right of the public to regulate common carriers in the performance of their duties and obligations has long been recognized by the courts, which early in the history of our transportation era gave utterance to the doctrine that he who devotes his property to a use in which the public has an interest, in effect, grants to the public an interest in that use. Munn vs. Illinois, 94 U. S. 113. § 8. Incorporation oi Common Carrier Not Full Test of Jurisdiction. . Any carrier, whether incorporated under the laws of a foreign country or a federal or state charter, when engaged in the transportation of interstafe commerce defined in the Act, is subject to the jurisdiction of the Act within the confines of the United States. 10 I. C. C. Rep. 217. 4 I. C. C. Rep. 447, 3 I. C. Rep. 417. 3 I. C. C. Rep. 89, 2 I. C. Rep. 497. 16—6 80 AMERICAN COMMERCE ASSOCIATION § 9. Effect of Incorporation of Common Carrier. So far as interstate transportation as defined in the Act is concerned, incorporation is not a condition precedent to the right to be a common carrier by rail. It is the character of the service which a carrier renders or holds itself out as willing to render and that the public may demand of it, as a matter of right, that is controlling in determining whether it is a common carrier. Truckers' Transfer Co. vs. C. & W. C. Ry. Co., 27 I. C. C. Rep. 275, 277. Tap Line Cases, 234 U. S. 1. Tap Line Case, 31 L C. C. Rep. 490. Stonega Coke & Coal Co. vs. L. & N. R. R. Co., 23 I. C. C. Rep. 17. Compare : Tap Line Cases, 23 I. C. C. Rep. 275, 277, and 23 L C. C. Rep. 549. § 10. Carriers Not Subject to the Act. The canons of statutory construction call for strict adherence to the legislative intent, and there may not be read into the Act, by implication, a jurisdiction over car- riers not definitely brought within its scope of authority by its terms. Not all carriers are subject to the authority of the Act. Carriers, even of the phyiscal and legal nature described in the Act, not engaged in the transportation of passengers ur property as defined therein and under the conditions established, are not within the jurisdiction of the regulatory statute. The test of service excludes certain carriers under certain conditions and other carriers under all conditions. Thus, water carriers, unless partici- pating in the transportation of interstate commerce under a common control, management, or arrangement with a rail carrier, are not within the jurisdiction of the Act ; nor INTERSTATE COMMERCE LAW 81 are wagon carriers; nor state railroads not engaged in interstate transportation. Act to Regulate Commerce section 1. § 11. Jurisdiction of Act Over State Common Carriers. A carrier whose line is situated wholly within a state, but which participates in a carriage of shipments originat- ing at, or destined for, points in other states, is subject to the Act. The jurisdiction of the Act attaches to state common carriers whenever such carriers engage in interstate com- merce as defined in the Act. Thus, the transportation of a shipment from a point in one state to a point in another state, over lines of a state and an interstate carrier as a continuous line, becomes subject to the Act b)^ reason of the fact that having entered into a common arrangement for the through cai'riage of goods, a new line of transpor- tation has been formed independent of its constituent elements, which included among its number a state rail- road. The syllabus of the decision of the Supreme Court involving this holding is as follows: "When a state railroad company whose road lies within the limits of the state enters into the carriage of foreign freight by agreeing to receive the goods by virtue of foreign through bills of lading, and to partici- pate in through rates and charges, and thereby be- comes part of a continuous line, not made by a con- solidation with the foreign companies, but by an arrangement for the continuous carriage or shipment from one state to another, and thus becomes amenable to the Federal Act in respect to such interstate com- merce; and, having thus subjected itself to the control of the Interstate Commerce Commission, it camiot Hmit tliat control in respect to foreign traffic to certain points on its road to the exclusion of other points. 82 AMERICAN COMMERCE ASSOCIATION "When goods shipped under a through bill of lading; or in any other way indicating a common con- trol, management, or arrangement from a point in one state to a point in another state are received in transit by a state common carrier, such carrier, if a railroad company, must be deemed to have subjected its road to an arrangement for a continuous carriage or ship- ment within the meaning of the Act to Regulate Com- merce." C. N. O. & T. P. Ry. Co. vs. I. C. C, 162 U. S. 184. See also Jurisdiction over Water Carriers, 15 I. C. C. Rep. 205, 207. Augusta, etc., R. Co. vs. Wrightsville R. R., 74 Fed. Rep. 533. § 12. Common Arrangement Between Carriers. Originally the test of common arrangement between carriers, within the meaning of the terms of the Act, was the successive receipt and forwarding in ordinary course of business by two or more carriers of interstate ship- ments under through bills of lading for continuous car- riage over their lines, without previous express agreement between such carriers. Previous express agreement be- tween such carriers is not necessary to bring such trans- portation within the scope of the Act. Railroad Commission of Georgia vs. Clyde S. S. Co., 5 I. C. C. Rep. 324. 4 I. C. Rep. 120. Thus, where a state common carrier accepted and trans- ported interstate trafific under through bills of lading, it was held to have subjected its Hne to a "common control, management, or arrangement for a continuous carriage or shipment" within the meaning of the Act, although such INTERSTATE COMMERCE LAW 83 state carrier charged its full local rates for the service performed by it. Pa. Millers', etc., Assn. vs. P. & R. Ry. Co., 8 I. C. C. Rep. 531. Bost. Fruit & Prod. Exchange vs. N. Y. & N. E. R. R. Co., 4 I. C. C. Rep. 664. Freight Bureau of Cincinnati vs. C. N. O. & T. P. Ry. Co., 6 I. C. C. Rep. 195, 4 I. C. Rep. 592. Railroad Commission of Florida vs. S. F. & W. Ry. Co., 5 I. C. C. Rep. 13. T. & P. Ry. Co. vs. Clark, 4 Tex. Civ. App. 611, 23 S. W. Rep. 698. Phelps & Co. vs. T. & P. Ry. Co., 6 I. C. C. 36, 4 I. C. Rep. 44. U. S. vs. Standard Oil Co., 155 Fed. Rep. 305. U. S. vs. Seaboard Ry. Co., 82 Fed. Rep. 563. U. S. vs. N. Y. C. & H. R. R. Co., 146 Fed. Rep. 298. Interstate Stock Yards Co. vs. Indianapolis U. Ry., 99 Fed. Rep. 472. See also, this volume, chapter V, section 40. "State Railroads Engaged in Interstate Transportation," post. The Supreme Court, in C. N. O. & T. P. Ry. Co. vs. I. C. C, 162 U. S. 184, said: "All we w^ish to be understood to hold is that when goods shipped under a through bill of lading from a point in one state to a point in another are received in transit by a state common carrier, under a conven- tional division of the charges, such carrier must be deemed to have subjected its road to an arrangement for a continuous carriage or shipment within the meaning of the Act to Regulate Commerce." This ruling of the Supreme Court upheld the ruling of the majority of the Commission in the matter of Jurisdic- tion over Water Carriers, 15 I. C. C. Rep. 205, where it was held that a shipper may not use a carrier subject to the Act, or its agent, as his agent for the purpose of receiving consignments of property and rebilling the same in order to break an interstate journey or make an intra- state one, the Commission's authority being confined to 84 AMERICAN COMMERCE ASSOCIATION the carriers subject to the Act and until a carrier becomes subject to the Act voluntarily or as a matter of law, the Commission's rule as to a shipper availing himself of the services of such carrier as his agent, does not apply. In re Transportation by the C. & O. Ry., 21 I. C. C. Rep. 207, 209. This earlier rule has been since modified to conform with the more liberal construction being given to the Act as a whole. The test of subjection to the Act is now one of through routing, and, irrespective of what control, management, or arrangement may exist between carriers, when such carriers accept and undertake the movement of an interstate shipment for continuous carriage over their lines, the movement of and charges for such ship- ments become a unit and express agreement for a through rate is not required; the character of the service under- taken by the constituent lines in the continuous movement of a through shipment brings such carriers and transpor- tation within the authority of the Act. 204 U. S. 403. C. N. O. & T. P. Ry. vs. I. C. C, 162 U. S. 184. In the Matter of Transportation by C. & O. Ry. Co., 21 I. C. C. Rep. 207, 209. See Kanotex Case ruling in last preceding section. See also: Moore on Interstate Commerce, sections 29, 61. Troy Bd. of Trade vs. A. M. R. R. Co., 6 I. C. C. Rep. 1. Daniels vs. Chicago, R. I. & P. Ry. Co., 6 I. C. C. Rep. 458. Trammel! vs. Clyde S. S. Co., 5 I. C. C. Rep. 324. 181 U. S. 29. § 13. Interstate Commerce Commission on "Common Arrangement" Prior to Amendment of 1906. Prior to the amendment of 1906, the test of a "common arrangement" within the meaning of the Act, was the INTERSTATE COMMERCE LAW 85 receipt and delivery of through shipments between dif- ferent carriers. There need not be a control of a through line centered in a single source of authority, but the "arrangement" for continuous carriage or shipment is complete whenever the carriers have arranged for receipt and delivery of through traffic to and from each other and such an arrangement is necessarily "common." Trammell vs. Clyde S. S. Co., 5 I. C. C. Rep. 324. James, etc, Co. vs. Cincinnati, etc-, R. R. Co., 4 I. C. C. Rep. 744. Mattingly vs. Pa. R. Co., 3 I. C. C. Rep. 592. Pa. Millers' Assn. vs. Phila. R. Ry. Co., 8 I. C. C. Rep. 531, 549. Gustin vs. A. T. & S. F. R. R. Co., 8 I. C. C. Rep. 277. . Cincinnati Frt. Bu. vs. Cinn., etc., R. R. Co., 6 I. C. C. Rep. 195, 2ZZ. U. S. vs. Standard Oil Co. of Indiana, 155 Fed. Rep. 305. I. C. C. vs. Detroit, G. H. & M. Ry. Co., 167 U. S. 633. Cinn. N. O. & T. P. Ry. Co. vs. I. C. C, 162 U. S. 184. Daniel Ball vs. C. S., 10 Wall. (U. S.) 565, 19 L. Ed. 1C02. In re Transportation by C. & O. Ry. Co. et al., 21 I. C. C. Rep. 207. § 14. Through Bill of Lading Not Necessary to Constitute "Common Arrangement" (Prior to 1906). A through bill of lading was held, prior to the amend- ment of 1906, not essential to a "common arrangement" between carriers engaged in transporting interstate ship- ments, nor was it necessary that there should be an ex- press agreement respecting such transportation entered into by the constituent carriers in the line of movement. U. S. vs. Seaboard Ry. 82 Fed. Rep. 563. Boston Fruit Exchange vs. N. Y. C. & H. R. R. Co., 4 I. C. C. Rep. 654. Moore on Interstate Commerce, section 34, page 66. For subsequent modification of the rule respecting "common control, management, and arrangement," see 86 AMERICAN COMMERCE ASSOCIATION this volume, chapter V, section 44, "Kinds of Transporta- tion Subject to the Act." § 15. Foreign Carriers. The jurisdiction of the Act to Regulate Commerce ex- tends to and includes shipments actually moving in foreign commerce as to that part of the transportation which is through the United States, irrespective of whether such shipments are interstate. T. & P. Ry. Co. vs. R. R. Com. of La. 183 Fed. Rep. 1005, 1007. Aransas Pass Channel & Dock Co. vs. G. H. & S. A. Rv. Co . 27 I. C. C. Rep. 403, 414. Humboldt S. S. Co. vs. White Pass Yukon Route, 25 I. C. C. Rep. 136, 140. Eagle Pass Lbr. Co. vs. Nat. Rys. of Mexico, 25 I. C. C. Ren. 5, 6, 7. Fullerton Lumber & Shingle Co. vs. B. B. & B. C. R. R. Co., 25 I. C. C. Rep. 376, 378. In re Rates, etc., of the La. Ry. & Nav. Co., 22 I. C C. Rep. 558. Borgfeldt & Co. vs. S. P. Co., 18 I. C. C. Rep. 552, 553. Payne vs. Morgan's S. S. Co. 15 I. C. C. Rep. 185. Ullman vs. Adams Ex. Co., 14 I. C. C. Rep. 340, 345. Cosmopolitan Shipping Co. vs. Hamburg-American Packet Co., 13 I. C. C. Rep. 266, 271, 281. The Commission, however, has no power to establish through routes and joint rates for shipments to destina- tions in foreign countries. Aransas Pass Channel & Dock Co. vs. G. H. & S. A. Ry. Co., 21 I. C. C. Rep. 403, 414. §16. Rail and Water Carriers. A carrier by water uniting with a rail carrier in making a rate for interstate traffic and issuing a through bill of lading therefor is subject to the Act with respect to such interstate trafific. U. S. vs. Woods, 145 Fed. Rep. 405. INTERSTATE COMMERCE LAW 87 Prior to the taking effe&t of the Panama Canal Act, approved August 24, 1912, the Commission's jurisdiction of interstate transportation did not extend over traffic moving entirely by w^ater, a common arrangement for through transportation by rail and w^ater being necessary to set up the authority of the Act. The Panama Canal Act gave the Commission the follov^^ing jurisdiction in addition: "When property may be or is transported from point to point in the United States by rail and water, through the Panama Canal or otherwise, the trans- portation being by a common carrier or carriers, and not entirely within the limits of a single state, the Interstate Commerce Commission shall have jurisdic- tion of such transportation and of the carriers, both by rail and hy water, which may or do engage in -the same, in the following particulars, in addition to the jurisdiction given by the Act to Regulate Commerce, as amended June eighteenth, nineteen hundred and ten. » "To establish through routes and maximum joint rates between and over such rail and water lines and to determine all the terms and conditions under which such lines shall be operated in the handling of the traffic embraced." While a common arrangement for a through transpor- tation of an interstate shipment by rail and water carriers brought the water carrier within the jurisdiction of the Commission, such water carrier could not then, and may not now, lawfully accept interstate shipments for trans- portation on through bills of lading issued by a rail car- rier, unless the water carrier has on file with the Commis- sion lawfully published rates applicable thereto.' A. & S. S. Co. vs. O. S. S. Co., 26 I. C. C. Rep. 380, 384, 387. 88 AMERICAN COMMERCE ASSOCIATION See also: Delaware & Hudson Boat Lines, 40 I C. C. Rep. 297. Port Huron & Duluth S. S. Co. vs. P. R. R. Co., 35 I. C. C. Rep. 475, 476. Chattanooga Packet Co., vs. I. C. R. R. Co., 33 I. C. C. Rep. 384 392. Stone's Express vs. B. & M. R. R. Co., et al., 33 I. C. C. Rep. 638, 643. Curry & Whyte Co., vs. D. & I. R. R. R. Co.. 32 I. C. C. Rep. 162, 171. App. of S. P. Co. in re Operation S. S. Co., 32 I. C. C. Rep. 690, 697, 698. Bowling Green Protective Assn. vs. E. & B. G. Packet Co., 31 I. C. C. Rep. 301. Pacific Nav. Co. vs. S. P. Co., 31 I. C. C. Rep. 472. Erickson vs. C. M. & St. P. Ry. Co., 29 I. C. C. Rep. 414, 416. New Orleans Board of Trade vs. I. C. R. R. Co., 29 I. C. C. Rep. 32. T. & N. O. R. Co. vs. Sabine Tram. Co., 227 U. S. 111. See also: Chapter V, this volume; section 27, "Car Ferries as Common Carriers" ; section 29, "Inland Water Carriers"; section 23, "Lighters and Lighterage Com- panies"; section 34, "Ocean Carriers"; section 55, "Com- mon Arrangement Clause Not Applicable to All-Rail Transportation" ; and section 58, "Rail-and-Water Trans- portation." Compare : Charleston & Norfolk S. S. Co. vs. C. 8z O. R. R. Co., 40 T. C. C. Rep. 382, holding steamship company, owning no vessel, not a carrier. Application made under Panama Canal Act. §17. Carriers Transporting Express Matter. A railroad not otherwise subject to the Act to Regulate Commerce subjects itself to the authority of the Com- mission and the provisions of the Act if it transports express matter for an express company that is subject to the Act. I. C. C. Confr. Rulings Bull. No. 6, Ruling No. 197. INTERSTATE COMMERCE LAW 89 § 18. Bridges and Bridge Companies. Bridges are included within the meaning of the term "railroad" in the Act, not for the purpose of exempting them from any liability to publish and observe their rates when such bridges are operated by their owners as com- mon carriers, but rather to make certain that, where these agencies are employed by the railroad, the transportation service rendered by them shall be subject to the provisions of the Act. Enterprise T. Co. vs. P. R. R. Co., 12 I. C. C. Rep. 327. §19. Relation of Carrier Operating Over Bridge with Bridge Company. Where a railroad company acquires by contract the right to use a bridge with approaches for its engines, cars and trains, section 1 of the Act to Regulate Commerce regards the railway company as the owner or operator of said bridge and approaches, as to all traffic transported by the railway company over said bridge ; and as to all such trafific the railway company, and not the bridge company, is the common carrier. K. &I. B. Co. vs. L. & N. R. R. Co., 37 Fed. Rep. 567. § 20. Bridges Connecting Two States. A bridge company owning and operating freight and passenger trains, or either, for hire, over a bridge connect- ing two states, is a common carrier within the meaning of section 1 of the Act. § 21. Bridges Included in Term "Railroad." The term "railroad" in section 1 of the Act to Regulate Commerce is defined to include all bridges used or oper- 90 AMERICAN COMMERCE ASSOCIATION ated in connection with any railroad, whether owned or operated under contract, agreement or lease. Section 1, paragraph 2, Act to Regulate Commerce as amended. § 22. Bridges as Part of Carrier's Line. A bridge constructed under contract with independent company to be used as a part of carrier's line is as much a part of the railroad of the carrier as if owned by it, and the railroad as a common carrier is subject to the Act; but the bridge company, as an independent company, is not a common carrier, and, therefore, not subject to the statute. Enterprise T. Co. vs. P. R. R. Co.. 12 I. C. C. Rep. 327. Barnes on I. C, section 43, page 100, paragraph 4. § 23. Bridges Not Common Carriers. A bridge company itself not owning or operating any rolling stock is not a common carrier within the scope and meaning of the Act. It merely furnishes a highway for interstate commerce. K. & I. B. Co. vs. L. & N. R. R. Co., 37 Fed. Rep. 567. C. & C. B. Co. vs. Com., 154 U. S. 204. A bridge company which does not hold itself out as a common carrier, which has no rolling stock or motive power, whose structure is not rented to or operated in connection with a railroad and over whose structure no interstate freight has been transported, is not a common carrier subject to the Act, though some passengers were carried over it in the cars and by the motive power of a street railway company. Kansas City vs. K. C. V. & T. Ry. Co., 24 I. C. C. Rep. 22, 26. R. R. Com. of la. vs. I. C R. R. Co., 20 I. C. C. Rep. 181, 186, 188 R. R.Com. of Ind. vs. K. & I. B. & R. R. Co., 14 I. C. C. Rep. 563, 564. INTERSTATE COMMERCE LAW 91 § 24. Cable Companies as Common Carriers. See telegraph, telephone and cable companies, section 3, this chapter. § 25. Fast Freight Lines as Common Carriers. Where a fast freight line operates over the lines of sev- eral connecting carriers, w^ith agreed divisions of earnings and expenses amongst such carriers, it is the duty of such carriers to see that the fast freight line tariffs are filed with the Commission, and its rates made to conform with the requirements of the Act. Vt. St. Grange vs. B. & L. R. R. Co., 1 I. C. C. Rep. 158; I. C. C. Tariff Cir. 18-A, Rule No. 15, page 36. The fast freight line was the forerunner of the through route and had its origin in the lack of arrangements for the interchange of equipment. These fast freight lines acquired large numbers of freight cars and made arrange- ments with certain roads over which it was desired to establish a through service, and these lines are still in existence, although in most instances they are but a trade- name for a through fast freight service operating via established through routes. Lake Lines App. under Panama Canal Act, 33 L C. C. Rep. 700, 708, 709. If a fast freight line is not incorporated, but merely operates under a trade-name as a service of several con- necting carriers, its tariffs must be published and filed in the name of the corporate carriers and in conformity with the tariff rules governing all common carriers subject to the Act. 92 AMERICAN COMMERCE ASSOCIATION § 25. Express Companies as Common Carriers. The amendment of the Act in 1906 (Hepburn Act) brought independent express companies, operating over hues of railway, within the jurisdiction of the Act as com- mon carriers, and to the same extent as all other common carriers. In re Express Rates, etc., 24 I. C. C. Rep. 380, 387, 423. In re Express Rates, etc., 28 I. C. C. Rep. 131, 137. The Commission regards express companies as agen- cies created by the railroads and recognized by law for the conduct of a certain kind of freight business, to which these agencies have added a service that is distinctive and peculiarly their own. An express company, operating over or in connection with a railway line or lines, stands, under the Act, in the same attitude as that of a railroad, except in so far as the language of the Act specifically excludes it. U. S. vs. Wells Fargo & Co., 161 Fed. Rep. 606, 609. See also: Am. Ex. Co., vs. U. S. 212 U. S. 522. I. C. C. vs. D. L. & W. R. R. Co., 6 I. C. C. Rep. 148. Douglas Shoe Co. vs. Adams Ex. Co., 19 I. C. C. Rep. 539, 542, 543. Williams vs. Wells Fargo & Co., 18 I. C. C. Rep. 17. 18. Saunders vs. So. Ex. Co., 18 I. C. C. Rep. 415. In re Contracts of Express Companies, 16 I. C. C. Rep. 246, 249. Am. Bankers Assn. vs. American Express Co., 15 I. C. C. Rep. 15, 21, 22. California Commercial Assn. vs. Wells Fargo & Co., 14 I. C. C. Rep. 422, 425. State vs. Adams Express Co., 171 Ind. 138, 151, 85 N. E. Rep. 337. I. C. C. Confr. Rulings Bull, No. 6, Ruling No. 197. And to the same extent the recent Cummins amend- ments to the Act applies to express companies. Cummins Amendment, 33 I. C. C. Rep. 682, 698. Stone's Express vs. B. & M. R. R. Co., 33 I. C. C. Rep. 638, 640. INTERSTATE COMMERCE LAW 93 § 27. Car Ferries as Common Carriers. The term "railroad" in section 1 of the Act to Regulate Commerce is defined to include all ferries used or operated in connection with any railroad, whether owned or oper- ated under contract, agreement or lease. Section 1, Act to Regulate Commerce as amended. A ferry is a water carrier and primarily not subject to the Act; but when it affords facilities for "carrying on interstate commerce" and enters into arrangement with a rail carrier for the carriage of interstate traffic, it becomes subject to the jurisdiction of the Commission. Enterprise T. Co. vs. P. R. R. Co., 12 I. C. C. Rep. 326. A ferry constructed and effected under contract with an independent company to be used as part of a carrier's line, is as much a part of the railroad of the carrier as if owned by it, and the railroad is a carrier and subject to the Act and therefore the ferry, in its relation with the railroad, becomes subject to the Act. Enterprise T. Co. vs. P. R. R. Co., 12 I. C. C. Rep. 326. But an independent ferry company is not subject to the Act, nor to the jurisdiction of the Commission, even ■though it be engaged in receiving from and delivering freight to a connecting railroad, if it is not operating with such railroad under a "common control, management, or arrangement" for a continuous carriage. Such a ferry, although an instrumentality of commerce over which Con- gress has full and complete power of regulation and con- trol, has not been brought within the scope of the Act to Regulate Commerce. Gloucester Ferry Co. vs. Pa., 114 U. S. 196. Grain Rates from Milwaukee, 33 I. C. C. Rep. 417, 424. 94 AMERICAN COMMERCE ASSOCIATION In re N. Y. C. & H. R. R. vs. Hudson County, 227 U. S. 248. the jurisdiction of the Interstate Commerce Commis- sion was declared to include the New York-Jersey City ferries, requiring such ferries to file with the Interstate Commerce Commission rates, fares, rules, and regulations, as required by section 6. The Court held that Congress did not divide its authority over the elements of inter- state commerce intermingled with the movement of the regulated interstate ferriage, for to do so would render the national authority inefficacious by the confusion and conflict which would result. The Supreme Court of the United States, in the course of its opinion in this case, said: "It is equally clear that the contention of the de- fendant in error as to the absence of all power in Con- gress over interstate ferries is merely academic. From this it necessarily arises that the only ground relied upon to sustain the judgment below is the ruling in the Gloucester Ferry Case, and the further proposition that there has been no action of Congress over the subject of the ferriage here involved which authorizes the holding that state power no longer obtains. As, therefore, the claim on the one side of an all-embracing and exclusive federal power may be, temporarily at least, put out of view and the assertion on the other of an absolutely exclusive state power may also be eliminated from consideration because not relied upon or because it is both demonstrated and admitted to be without foundation, it follows to dispose of the case we are called upon only, following the ruling in the Gloucester Ferry Case, to determine the single and simple question whether there has been such action by Congress as to destroy the presumption as to the ex- istence in the state of vicarious and revocable author- ity over the subject. We say simple question because its decision is, we think, free from difficulty, in view INTERSTATE COMMERCE LAW 95 of the express provision of the first section of the Act to Regulate Commerce (Act of February 4, 1887, chapter 104, 24 Stat. 379), subjecting railroads as therein defined to the authority of Congress, and ex- pressly declaring that 'the term railroad as used in this Act shall include all bridges and ferries used or operated in connection with any railroad, and also all the road in use by any corporation operating a railroad, whether owned or operated under a con- tract, agreement, or lease, * * *.' The inclusion of railroad ferries within the text is so certain and so direct as to require nothing but a consideration of the text itself. Indeed, this inevitable conclusion is not disputed in the argument for the defendant in error, but it is insisted that as the text only embraces rail- road ferries and the ordinances were expressly de- cided by the court below only to apply to persons other than railroad passengers, therefore the action by Congress -does not extend to the subject embraced by the ordinances. But as all the business of the ferries between the two states was interstate com- merce within the power of Congress to control and subject in any event to regulation by the state as long only as no action was taken by Congress, the result of the action by Congress leaves the subject, that is, the interstate commerce carried on by means of the ferries, free from control by the state. We think the argument by which it is sought to limit the operation of the Act of Congress to certain ele- ments only of the interstate commerce embraced in the business of ferriage from state to state is wanting in merit. In the absence of an express exclusion of some of the elements of interstate commerce, entering into the ferriage, the assertion of power on the part of Congress must be treated as being coterminous with the authority over the subject as to which the purpose of Congress to take control was manifested. Indeed, this conclusion is inevitable since the assump- tion of a purpose on the part of Congress to divide its authority over the elements of interstate commerce 16—7 96 AMERICAN COMMERCE ASSOCIATION intermingled in the movement of the regulated inter- state ferriage would be to render the national author- ity inefficacious by the confusion and conflict which would result." See also: New York-Jersey City Ferry Rates, 37 I. C. C. Rep. 103, 106. Peninsular & Occidental S. S. Co., 37 I. C. C. Rep. 432, 435. Grain Rates from Milwaukee, 33 I. C. C. Rep. 417, 424. O.-W. R. R. & N. Co., ownership of Steamboats, 33 I. C. C. Rep. 658, 661, 663. Illinois Coal Cases, 32 I. C C. Rep. 659, 676, 681. Colonial Salt Co. vs C. B. & Q. R. R. Co., 31 I. C. C. Rep. 559, 569. St. Clair Co. vs. I. S. & C. T. Co., 192 U. S. 454. Pt. Richmond & B. P. F. Co. vs. County of Hudson, 234 U. S. 317. Covington Bridge Co., vs. Kentucky, 154 U. S. 204. L. S. & M. S. Ry. vs. Ohio, 165 U. S. 365. U. S. vs. Union Bridge Co., 204 U. S. 364. Manigault vs. Springs, 199 U. S. 473. The Abby Dodge, 223 U. S. 166. Mayor of New York vs. Starin, 106 N. Y. 1, 12 N. E. Rep. 631. Mayor of New York vs. New Eng. Transp. Co., 14 Blatch, 159 Fed. Cas. 10197. Brodnax vs. Blake, 94 N. C. 675. Compare : Levy vs. U. S. 177 U. S. 621. Wilmington Trans. Co. vs. R. R. Com. of Calif. 236 U. S. 151. Sault Ste. Marie, etc., vs. International Trans. Co., 234 U. S. 333. (1) Car Ferries. A car ferry is a vessel or barge, or sometimes a float, fitted with tracks for the holding of railroad cars and the transporting of them across a water- way or lake. A car ferry is subject to the same regula- tion by interstate authority as ferries in general. Car ferries are in most instances owned and operated by the rail carriers and become included in "all-rail" routes. I. C. C. Conference Rulings Bulletin No. 6, Ruling No. 284. INTERSTATE COMMERCE LAW 97 (2) Municipal Ferries. Where a municipal ferry ar- ranges with rail carriers to perform its service in the transportation of passengers under through tickets, includ- ing the ferry service, such municipal service is subject to the Act. I. C. C. Confr. Rulings Bull. No. 6, Rulings No. 162. Prior to the amendment to the Act of June 29, 1906, ferries were not subject to the jurisdiction of the Commis- sion except when used by a rail carrier and operated as a part of its road. N. Y. C. & H. R. R. Co. vs. Freeholders of Hudson, 76 N. J. L. 654, 74 Atl. Rep. 954. In the appeal of this same case the Supreme Court held that section 1 of the Act, as amended, subjected railroad ferries to its provisions. Congress having so occupied the field of regulation as to render invalid an ordinance fixing rates on a railroad passenger-ferry extending from New York City across the river to Weehawken, N. J., and that regardless of whether the passengers rode only on the ferry or rode thereon in connection with travel on the railroads owning the same. N. Y. C. &. H. R. R. Co. vs. Board of Freeholders, 227 U. S. 248. See also quotation from the opinion of the Supreme Court in this section, ante. § 28. Foreign Railroads as Common Carriers. Foreign railroads, as common carriers, suffer no ob- struction imposed upon them by the law to transportation from or into the United States, but such carriers in con- ducting their business within this country are required 98 AMERICAN COMMERCE ASSOCIATION to conform to the same regulations that govern domestic carriers. In re Investigation of Acts of G. T. R. R. Co., 3 I. C. C. Rep. 89. Curry & Whyte Co. vs. D. & I. R. R. R. Co., 32 I. C. C, Rep. 162, 171. ' Application of S. P. Co., in re Operation S. S. Co., 32 I. C. C. Rep. 690, 697, 698. T. & P. Ry. Co. vs. I. C. C, 162 U. S. 197. Buttfield vs. Stranaham, 192 U. S. 470, 493. T. & P. Ry. Co. vs R. R. Com. of La. 182 Fed. 1005. In re Rates, etc., of La. Ry. Co., 22 I. C. C. Rep. 55. Cosmopolitan Shipping Co. vs. Hamburg-American Packet Co., 13 I. C. C. Rep. 266, 271, 281. The character of foreign commerce is not determined by the bilHng, but by the fact that at point of origin it is destined to a foreign port and is taken up by successive intervening common carriers. Application of S. P. Co., in re Operation S. S. Co., 32 I. C. C. Rep. 690, 697, 698. S. P. Term. Co. vs. I. C. C. 219 U. S. 498, 527. T. & N. O. R. R. Co. vs. Sabine Tram Co., 227 U. S. 111. In the Sabine Tram Co. case, supra, the Supreme Court said: "The determining circumstance is that the ship- ment of the lumber to Sabine was but a step in its transportation to its real and ultimate destination in foreign countries. In other words, the essential character of the commerce, not its mere accidents, should determine. It was to supply the demand of foreign countries that the lumber was purchased, manufactured, and shipped, and to give it a various character by the steps in its transportation would be extremely artificial. Once admit the principle and means will be afforded of evading the national con- trol of foreign commerce from points in the interior of a state. There must be transshipment at the sea- board, and if that may be made the point of ultimate destination by the device of separate bills of lading INTERSTATE COMMERCE LAW 99 the commerce will be given local character, though it be essentially foreign." This is a reaffirmance of the same principle laid down by the court in the S. P. Terminal Co. case, supra, where it was said: "The manufacture or concentration on the wharves of the terminal company are but incidents, under the circumstances presented by the record, in the trans- shipment of the products in export trade and their regulation is within the power of the Interstate Com- merce Commission. To hold otherwise would be to disregard, as the Commission said, the substance of things and make evasions of the Act of Congress quite easy. It makes no difference, therefore, that the shipments of the products were not made on through bills of lading or whether their initial point was Galveston or some other place in Texas. They were all destined for export and by their delivery to the Galveston, Harrisburg & San Antonio Railway they must be considered as having been delivered to a carrier for transportation to their foreign destination, the terminal company being a part of the railway for such purpose. The case, therefore, comes under Coe vs. Errol, 116 U. S. 517, where it is said that goods are in interstate and necessarily as well in foreign com- merce when they have 'actually started in the course of transportation to another state, or delivered to a carrier for transportation.' " A common arrangement for the transportation of for- eign commerce may exist without the establishment of a through route or the recognition of a through bill of lading. The fact that there is an arrangement by which it is to be carried as foreign freight is evidenced by the conduct of each of the carriers. Application of S. P. Co., in re Operation S. S. Co., 32 I. C. C. Rep. 690, 697, 698. 100 AMERICAN COMMERCE ASSOCIATION C N. O. & T. P. Ry. Co. vs. I. C. C. 162 U. S. 184. Baer Bros. Co. vs. D. & R. G. R. R. Co., 223 U. S. 479, 491. R. R. Comm. of La. vs. T. & P. Ry. Co., 229 U. S. 336, 341. See also: Aransas Pass Channel & Dock Co. vs. G. H. & S. A. Ry. Co., 27 I. C. C. Rep. 403, 414. Fullerton Lbr. Shingle Co. vs. B. B. & B. C. R. R. Co., 25 I. C. C. Rep. 376, 378. Humboldt S. S. Co. vs. W. P. & Y. Route, 25 I. C. C. Rep. 136. 140. Eagle Pass Lbr. Co. vs. Xat'l Rys. of Mexico, 25 I. C. C. Rep. 5. § 29. Inland Water Carriers. Inland water carriers when participating in interstate transportation under common control, management, or arrangement with rail carriers have always been to the extent of such transportation subject to the Act, but as to other traffic not so transported it was held In re Jurisdiction of V/ater Carriers, 15 I. C. C. Rep. 205, 207, that they were removed from the jurisdiction of the Act. This limitation upon the authority of the Act was removed by the additional jurisdiction conferred by the Panama Canal Act. The Elkins Act of 1903 was not made applicable to car- riers by water and a water carrier did not become subject to the Act in respect to interstate shipments, the move- ment of which was in part over its line and part over the line of a connecting rail carrier, unless, as provided in section 1 of the Act to Regulate Commerce, such move- ment was "under a common control, management, or ar- rangement" with the rail carrier or carriers for the continuous carriage of such interstate shipments. National Transp. Co. vs. U. S. 178 Fed. Rep. 364. It has also been held that there is no arrangement for INTERSTATE COMMERCE LAW 101 continuous carriage or shipment from one state to another between a rail carrier and a carrier by water not subject to the Act, where shipments by railroads entirely within one state are consigned to the care of a carrier by water which acts as the agent of the consignee at a point in that state and the carrier by water transports such consign- ments to a point in another state, such ultimate destina- tion not appearing in the original carrier's bill of lading. In the matter of Transportation by the C. & O. Ry. Co. et al., 21 I. C. C. R. 207. (Citing C. N. O. & T. P. R. R Co. vs. I. C. C. 162 U. S. 184.) G. C. & S. F. R. R. Co. vs. Texas, 204 U. S. 403, 51 L. Ed 540, affirming 97 Texas 274, 78 S. W. 495, citing Coe vs. Errol, 116 U. S. 517. 29 L. Ed. 715. The jurisdiction of the Interstate Commerce Commis- sion over inland^ water carriers has been the subject of recent supplementary legislation. The Panama Canal Act amended section 6 of the Act to Regulate Commerce to the following effect: "VV^hen property may be or is transported from point to point in the United States by rail and water, through the Panama Canal or otherwise, the trans- portation being by a common carrier or carriers, and not entirely within the limits of a single state, the Interstate Commerce Commission shall have jurisdic- tion of such transportation and of the carriers, both by rail and by water, which may or do engage in the same, in the following particulars, in addition to the jurisdiction given by the Act to Regulate Commerce, as amended June eighteenth, nineteen hundred and ten. * * 5f: "To establish through routes and maximum joint rates between and over such rail and water lines and to determine all the terms and conditions under which such lines shall be operated in the handling of the traffic embraced * * *." 102 AMERICAN COMMERCE ASSOCIATION But this does not give the Commission authority over all traffic moving entirely by water. It is obvious that the enlargement of the Commission's authority over inland v^ater carriers was not predicated upon an operating control, but rather on tariff grounds, to the end that the continuity of interstate shipments might be promoted through the establishment and opera- tion of through routes and joint rates between rail and water carriers. Since the passage of the Panama Canal Act, approved August 24, 1912, the Commission has conducted an inves- tigation of the conditions and relations of interownership obtaining between the lake lines and rail lines, under the following provisions of the Panama Canal Act : "From and after the 1st day of July, 1914. it shall be unlawful for any railroad company or other com- mon carrier subject to the Act to Regulate Commerce to own, lease, -operate, control, or have any interest whatsoever (by stock ownership or otherwise, either directly, indirectly, through any holding company, or by stockholders or directors in common, or in any other manner) in any common carrier by water oper- ated through the Panama Canal or elsewhere with which said railroad or other carrier aforesaid does or may compete for traffic or any vessel carrying freight or passengers upon said water route or elsewhere with which said railroad or other carrier aforesaid does or may compete for traffic; and in case of the violation of this provision, each day in which such violation continues shall be deemed a separate offense. "If the Interstate Commerce Commission shall be of the opinion that such existing specified service by water other than through the Panama Canal is being operated in the interest of the public and is of advan- tage to the convenience and commerce of the people, and that such extension will neither exclude, prevent, INTERSTATE COMMERCE LAW 103 nor reduce competition on the route by water under consideration, the Interstate Commerce Commission may, by order, extend the time during which such service by water may continue to be operated beyond July 1, 1914." In passing upon the question of whether or not a par- ticular boat line was being operated within the require- ments of the Panama Canal Act, the Commission commented upon the purpose and scope of this legislation as follows : "From an examination of the congressional debate from which the act emerged, it is at once clear that the spirit which undoubtedly prompted this legislation was a desire to preserve to the common interest of the people, free and unfettered, the 'water roadbed' via the Panama Canal, which was nearing completion. Coupled as it is, the legislative purpose of the other parts of the amendment with respect to waters "else- where" must necessarily have been to restore all the water routes of the country to the same condition of freedom from any domination that would reduce their usefulness. "For any case to be within the spirit of this proviso it is necessary to show a situation in which are present all the elements which prevail, or would prevail, were the water service independently operated. On a watercourse where the boats and boat lines are free from domination or control by the railroads, and where they are left to survive as their merit or the ingenuity of their owners makes possible, there will be, and always is, a healthy rivalry and striving between such boat lines themselves and v/ith paralleling railroads for all suitable and available traffic. There is com- petition. This rivalry manifests itself in several ways. The rates charged fluctuate according to eco- nomic principles, and the shipper enjoys invariably, as a result, lower charges for the transportation routed over such waterways and thereby reaps a return from 104 AMERICAN COMMERCE ASSOCIATION the 'nation's highway.' Necessarily, coincident with the lowering of the rate, there is a rivalry in service which is an equally strong weapon of competition. The condition is one which results in the beneficial use of the waterways accruing to the shippers. As far as this legislation concerns water routes elsewhere than through the Panama Canal, the spirit and pur- pose of it is to restore to the people the beneficial use of the natural common highways. "The right to use the waterways of the country as a means of transportation is a natural right, but this right may not be abused to the injury of others, and it is the public right that the waters be so used as to return benefit to the people. "The waterways of the country furnish ready-made roadbeds for transportation routes, on which the rates for shipment may be made low because of this physical fact. But these arteries of commerce, with- out boats to ply on them, are useless for transporta- tion purposes. And although there may be many boats plying on these water routes, they may be so operated as to produce practically the same condition of things as would exist were there no boats atioat. "As a natural and usual course of experience, where a railroad acquires and undertakes to operate a com- peting boat line, the rate for the water transportation ceases to be influenced solely by those ordinary con- ditions which affect such traffic, because a new ele- ment is introduced into the situation, namely, the interest of the owning railroad. "This discussion of general principles points the basis for the legislation here under consideration. If such is the basis, what is the purpose of the legisla- tion, if it is not to relieve the watercourses of the country from the domination of the rail carriers? "Congress has decreed that there shall be a restora- tion of conditions which prevailed when railroads had no interest in and exercised no control over the boat lines plying the country's water routes. That the legislation might not be arbitrary but be effective INTERSTATE COMMERCE LAW 105 within constitutional limitations, certain provisions were made so that in given instances which form ex- ceptions to the usual experiences in cases of joint own- ership, such ownership may be continued. To comply with this legislative direction, however, it is necessary to divorce the railroads from their boat lines, unless the particular case comes within the exception as pro- vided. If this is not the result, of what avail is this legislation? "The inquiry in these cases is, therefore, Is the joint operation of these boat lines such as to make of them an exception? Or, in the words of the statute, Is the service by water being operated in the interest of the public, and is it of advantage to the convenience and commerce of the people, and will an extension and a continuance thereof exclude, prevent, or reduce competition on the route by water under consider- ation? ■^'The contentions of petitioners as to responsibility and regularity of this service under joint operation lose weight when it appears that there has been no lowering of the cost of water transportation accom- panying them. It appears from correspondence pass- ing between a boat-line manager and an official of the owning railroad, which forms a part of these records, that this manager attributes the small tonnage hauled by his line, and the consequent small revenues, to the fact that the differential between the lake-and-rail rates and the all-rail rates is too small. He urged a larger differential, assuring his superior that such a policy would enable him to profitably operate the boat line. "Instead of lower rates in prospect, it is made to appear that it is only the greater financial strength of the owning railroads that enables the present boats to operate, as it is contended that certain boat lines are being operated at a loss. If this be true, then there is no prospect for lower rates under continued joint ownership, and the public is reaping little bene- fit from this waterway, and the situation is almost the same and will be the same as if no waterway existed. 106 AMERICAN COMMERCE ASSOCIATION "No doubt, under joint operation, certain econo- mies can be effected, but these economies have not manifested themselves in a reduced lake-and-rail transportation cost to the public. Instead of any reduction in lake-and-rail rates they have been stead- ily advanced under joint ownership. Beginning about 1900, when trunk line control over the lake lines was becoming perfected, the first-class lake-and-rail rate from New York to Chicago has been advanced by successive increases from 54 cents to 62 cents; the rates on the other classes have been correspondingly advanced. In 1910, according to statements in the records which were not controverted, the trunk line interests agreed that the lake-and-rail rates should actually be advanced to the all-rail basis, and thus wipe out the differential except on first class, which was to be advanced from 62 to 70 cents. This action was only thwarted by the refusal of a foreign railroad owning a lake line to acquiesce therein. These suc- cessive advances, as the records show, have had the effect not only of preventing an increase in lake line tonnage, but in diverting from the lake routes to the all-rail lines, part of the tonnage which formerly moved on the lakes. Furthermore, there is much in the rec- ords tending to show that the very purpose of these advances in lake-and-rail rates was to divert tonnage to the all-rail lines. As a direct result of this rate poHcy of the owning railroads, the lake boats have operated with small cargoes, although their operating expense was almost as great as if they had been fully loaded. This has in turn resulted in a high operating cost to the lake lines per unit of freight. Does not this policy fully explain the lake line deficit? Again, do not such facts make clear that whatever economies might be realized by joint ow^nership are offset by the waste resulting from the unfair use of vessel tonnage in the interest of the owning railroads? The railroad control of these boat lines can not be said to be in the public interest when the policy of these railroads has been, by an artificial rate structure to deprive the INTERSTATE COMMERCE LAW 107 public of the natural benefits that would flow from a free use of this waterway. "In deciding these cases, the Commission is required to judge as to whether or not these boat lines are being- operated in the public interest under joint own- ership, and then it must say whether the continuance of this operation will result in reducing, preventing, or excluding competition on the route by water. "That the joint ownership and operation of these boat lines has resulted in no real benefit to the people and that operation is not in the interest of the public or of advantage to the convenience and commerce of the people is established by the facts as above indi- acted, and a complete monopoly is exercised by the owning railroads over the lake line situation through the medium of the Lake Line Association. "The arguments that the increased powers of the Commission have remedied the situation are faulty, since it does not appear that this Commission has any special jurisdiction under this amendment to stop the operation of this Lake Line Association or to prevent the establishment of some other like arrangement later on. These arguments also lose weight in view of the fact that the increased jurisdiction of the Com- mission will be just as available in the control of the lake line situation hereafter under independent opera- tion of the lake lines, as under a continued joint operation. The public will enjoy all the benefits con- tained in the amendment through the enlargement of the Commission's jurisdiction with respect to water transportation and at the same time, and in addition, there will accrue such benefits as will result when water rates and service are influenced by competi- tion. "After divorcement this Commission may still regu- late just as fully as under joint control, the through rail-and-water rate, fixing a reasona,ble maximum. It may also fix the maximum rail proportional of such through rate. It may still require the physical con- 108 American commerce association nection between the dock of a water line and the rails of any and all carriers serving a port on interchange." In re Application of Lake Lines, 33 L C. C. Rep. 699, 700. Augusta & Savannah Steamboat Co. vs. O. S. S. Co., of Savan- nah, 26 L C. C. Rep. 380, 384. The boat lines operating on the great lakes in conjunc- tion with the barge lines operating on the Erie Canal fur- nish a through water route from western lake ports to the eastern seaboard. It is significant that the through route arrangements and the interchange of traffic between lake lines and these canal barge lines have been terminated under the joint ownership of the lake lines, and the traffic has practically disappeared, to the injury of the boat lines and of the Erie Canal barge lines on eastbound traffic. There is no power in the Commission to require the es- tablishment of a through route between these rail road- owned lake lines and barge lines operating the Erie Canal, but under divorcement the lake lines will be free to make arrangements for the through carriage of freight in con- nection with the Erie Canal barge lines, and it will be to their interest to do so. On the other hand the Commission has found certain car-ferries operating on the Great Lakes in conjunction vyith railroads to be of advantage to the convenience and commerce of the people and that a continuance thereof will neither exclude, prevent or reduce competition on the routes by water in such instances. And in such case the ferry b,oat lines were required to file their tariffs with the Commission in accordance with the provisions of the Act taking effect July 1, 1915. The policy of the Panama Canal Act is the bringing about of a discontinuance of railroad ownership and con- trol of water lines, except in those instances where the Commission is of the opinion that the existing specified service by water, other than through the Panama Canal INTERSTATE COMMERCE LAW 109 is being operated in the interests of the pubHc and is of advantage to the convenience and commerce of the people and that such extension will neither exclude, prevent, nor reduce competition on the route by w^ater under considera- tion. And in such cases the "existing specified service by water" is not determined or measured by the character of the shipments, but by the vessel by which they are borne. In construing this portion of the Act, the Commission in the Application of the Southern Pacific Company, said : — "If, therefore, it be found that the service here con- sidered other than that through the Panama Canal, is operated in the interests of the public and is of ad- vantage to the convenience of the people, and that its continuance will neither exclude, prevent, nor reduce competition on the route by water, the Act contem- plates authorizing a continuance of the service, even though there is, or may be, some measure of competi- tion between petitioner and the steamship line. "The proposition on the record is to operate the boats through the Panama Canal, but it is also pro- posed to carry freight that will not pass through the canal or be competitive. The question arises, there- fore, whether this language is to be construed as ap- plying to the vessels or to each particular shipment carried by the vessels. The language upon this point is, 'such existing specified service.' The petitioner would have us construe this language as applying to each shipment carried. But reference to other por- tions of the section lead to a different conclusion. The language employed is, 'such application may be filed for the purpose of determining whether any ex- isting service is in violation of this section and pray for an order permitting the continuance of any vessel or vessels already in operation.' Here the words 'ex- isting service' clearly refer to any vessel or vessels. When we consider the probable difficulties to be met by the common carrier in excluding particular ship- ments and the easy way in which the terms of the no AMERICAN COMMERCE ASSOCIATION statute could be evaded under such a construction, we are led to hold that the words 'specified service' refer to the vessel or vessels operated. Under the proposed amendment of the application and the testimony of the vice-president of the steamship company, we are confronted with the fact that these vessels are pro- posed to be operated through the canal to Colon. In view of these conditions and of the policy and require- ments of the Act, we are of the opinion that as to ves- sels of the steamship company which pass through the Panama Canal the Commission has no power to ex- tend the time within which they may continue to be operated." The Act provides that in every case in which the Com- mission grants extension of time during which the service by water may continue to be operated beyond July 1, 1914, "the rates, schedules, and practices of such water carrier shall be filed with the Interstate Commerce Com- mission and shall be subject to the Act to Regulate Com- merce and all amendments thereto in the same manner and to the same extent as is the railroad or other common carrier controlling such water carrier or interested in any manner in its operation." This language is definite and unqualified. It applies to evety case in which such exten- sion is granted, and it follows that if, under an amend- ment to the petition or upon further hearing, extension of time be granted as to any of the boats of the steamship company, the rates, schedules, and practices governing traffic subject to the Act, moved by such boats, must be filed with the Commission and be subject to all of the pro- visions of the Act in the same manner and to the same extent as those of the rail carrier. Peninsular & Occidental S. S. Co., 38 I. C. C. Rep. 662. Ocean S. S. Co. of Savannah, 37 I. C. C. Rep. 422. Peninsular & Occidental S. S. Co., 11 I. C. C. Rep. 432. INTERSTATE COMMERCE LAW HI The Boat "H. B. Plant", 37 I. C C. Rep. 453. Steamship Great Northern, 37 I. C. C. Rep. 260, 261. See also: 16—8 Port Huron & Duluth S. S. Co. vs P. R. R. Co., 35 I. C. C. Rep. 475. Federal Sugar Refining Co. vs. C R. R. of N. J., 35 I. C. C. 488. Steamer Lines on Chesapeake Bay, 35 I. C. C. Rep. 692, 697. P. Co., of Canada, Operation of Pa. Ontario Transp. Co., 34 I. C. C. Rep. 47. B. R. & P. Ry. Co. of Canada, Operation of Car Ferry Co., 34 I. C. C. Rep. 52. G. T. W. Ry. Co., Operation of Car Ferry Co., 34 I. C. C. Rep. 54. S. P. Ownership of Oil Steamers, 34 I. C. C. Rep. 11, 81. A. A. R. R. Co., Operation of Car Ferry Boats, 34 I. C. C. Rep. 83, 85. P. M. & B. L. E. R. R. Co.'s, Operation of Car Ferry Boats, 34 I. C. C. Rep. 86. O. W. R. R. & N. Co., Ownership of S. F. & P. S. S. Co., 34 I. C. C. Rep. 165, 168. S. P. Co. Steamboats on Sacramento River, 34 I. C. C. Rep. 174. 176. Erie R. R. Co., Operation of Lake Keuka Nav. Co., 34 L C. C. Rep. 212. C. & E. R. R. Co., Ownership of Water Equipment, 34 L C. C. Rep. 218, 220. Joint Ownership & Operation of Mackinac Transp. Co., 34 L C. C. Rep. 229, 230. S. P. Co. Ownership of Stock in Transportation Co., 34 L C. C. Rep. 648. Chattanooga Packet Co. vs. L C. R. R. Co., 33 L C. C. Rep. 384, 391. Rates on Asphaltum, etc., 33 L C. C. Rep. 480, 486. S. P. Co. Ownership of Schooner Pasadena, 33 L C. C. Rep. 476, 478. Financial Relations, etc., L. & N. R. R. Co., 33 I. C. C. Rep. 168, 207, 211, 212. Railway Ownership of Boat Line on Lake Tahoe, 33 L C. C. Rep 426, 427. Damon vs. Crosby Transp. Co., 33 L C. C. Rep. 448, 451. Lake Line Applications, 33 L C. C. Rep. 699, 705. Tampa Board of Trade vs. A. V. Ry. Co., 33 L C. C. Rep. 457, 461. Ownership of Dallas, Portland & Astoria Nav. Co., ZZ L C. C. Rep. 462, 467. G. F. & A. Ry. Co., Ownership of Boat Line, 33 L C. C. Rep. 632, 633. The Twin Cities Cases. ZZ \. C. C. Rep. 577, 582. Eastern Shore Development S. S. Co. vs. B. & O. R. R. Co., 32 L C. C. Rep. 238, 242. Application of S. P. Co. in re Operation S. S. Co., 32 L C. C. Rep. 690, 699. Transcontinental Commodity Rates, 32 L C. C. Rep. 449, 457. 112 AMERICAN COMMERCE ASSOCIATION Mobile Chamber of Commerce vs. M. &. O. R. R. Co., 32 I. C. C. Rep. 272, 278. Commodity Rates to Pacific Coast Terminals, 32 I. C. C. Rep. 611,618. Decatur Nav. Co. vs. L. & N. R. R. Co., 31 I. C. C. Rep. 281, 288. Financial Investigation of N. Y., N. H. &. H. R. R. Co., 31 I. C. C. Rep. 32, 44. Pacific' Nav." Co! vs. S. P. Company, 31 I. C. C. Rep. 472, 479, Colonial Salt Co. vs. C. B. & Q. R. R. Co., 31 I. C. C. Rep. 559, 562, 563. Milwaukee Produce & Fruit Exchange vs. Crosby Transporta- tion Co., 30 I. C. C. Rep. 653, 655. Tampa Board of Trade vs. L. & N. R. R. Co., 30 I. C. C. Rep. 377, 381. Fourth Section Violations in the Southeast, 30 I. C. C. Rep. 153, 169, 170, 183, 193, 230, 259, 263, 266, 269, 278. Lake-and-Rail Butter and Egg Rates, 29 I. C. C. Rep. 45, 51. St. Paul and Puget Sound Accounts, 29 I. C. C. Rep. 508, 516. Lumber Rates from Oregon and Washington, 29 I. C. C. Rep. 609, 618. Nev^r England Investigation, 27 I. C. C. Rep. 560, 567. Compare : Galveston Coml. Assn. vs. A. T. & S. F. Ry. Co., 25 I. C. C. Rep. 216, 255. Escanaba Business Men's Assn. vs. A. A. R. R. Co., 24 I. C. C. Rep. 11, 17. Cosmopolitan Shipping Co. vs. Hamburg-American Packet Co., 13 I. C. C. Rep. 266, 274, 281. I. C. C. vs. Goodrich Company, 224 U. S. 194. Goodrich Transit Co. vs. I. C. C. 190 Fed. Rep. 943, 959. L. & N. R. R. Co. vs. I. C. C, 184 Fed. Rep. 118, 123. Joseph Ullman vs. Adams Express Co., 14 I. C. C. Rep. 340, 345. Lykes Steamship Line vs. Commercial Union, 13 I. C. C. Rep. 310, 316. Benton Transit Co. vs. Benton Harbor, St. J. Ry. & Light Co., 13 L C. C. Rep. 542, 545. § 30. Interstate Railroads. A railroad company which holds itself out to the public as a common carrier, files tariffs with and makes reports to the Interstate Commerce Commission as is required of common carriers by law, and is engaged in the transporta- tion of interstate traffic, is a common carrier subject to the provisions of the Act to Regulate Commerce. The test of whether it is a common carrier is not the extent to INTERSTATE COMMERCE LAW 113 which its service is used, but the right of the public to demand service of it. Tap Line Cases, 234 U. S. 1. See also: Joint Rates with Birmingham Southern R. R. Co., 32 I. C. C. Rep. 110. Tap Line Cases, 31 L C. C. Rep. 490. Compare : Stonega Coke & Coal Co. vs. L. & N. R. R. Co., 23 L C. C. Rep. 17. The term "railroad" includes all bridges and ferries used or operated in connection w^ith any railroad, and also all the road in use by any corporation operating a rail- road, v^hether used or operated under a contract, agree- ment, or lease, and all switches, spurs, tracks, and termi- nal facilities of every kind used or necessary in the trans- portation of the persons or property designated in the Act, and also all freight depots, yards, and grounds used or necessary in the transportation or delivery of any of such property. Act to Regulate Commerce, section 1. No distinction is made in the Act between railroads operated by steam power and railways whose motive power is electricity. The Act terms them "common car- riers" and applies the jurisdiction of the Commission to such common carriers when engaged in the interstate transportation of persons and property as designated in the statute. Therefore, both steam and electrically operated railways, when engaged in such interstate trans- portation, fall within the authority of the Act. Act to Regulate Commerce, section 1. West End Imp. Club vs. O. & C. B. Ry. & Br. Co., 17 I. C. C Rep. 239. 114 AMERICAN COMMERCE ASSOCIATION C. & M. Elec. R. R. Co. vs. III. Cent. R. R. Co., 13 I. C. C. Rep. 20. O. & C. B. St. L. Ry. Co. et al'., vs. I. C C, 179 Fed. Rep. 243. An electric street railway line operating between the cities of Omaha and Council Bluffs was held to be a com- mon carrier, engaged in the interstate transportation of persons, and therefore amenable to the terms and jurisdic- tion of the Act. West End Imp. Club vs. O. & C. B. Ry. Co. et al., 17 I. C. C. Rep. 239. An electric street railway operating between the City of Washington, D. C, and Chevy Chase Lake, in Mont- gomery County, Md., was held to be a common carrier engaged in interstate transportation within the intent and meaning of the Act. Those interstate roads which are constructed upon pub- lic highways to provide the means for local passenger transportation (by electricity) in the streets of towns and cities and their various suburbs, are amenable to the Act. Wilson vs. R. C. Ry Co., 7 I. C. C. Rep. 83. Jurisdiction of Commission over electric railways en- gaged in interstate transportation as defined by the Act was affirmed by courts. O. & C. B. St. L. Ry. Co. vs. I. C. C, 230 U. S. 324, 57 L. Ed. 1501. O. & C. B. St. L. Ry. Co. vs. I. C. C, 179 Fed. Rep. 243. § 31. Electric Street Railways. See section 30, this volume, chapter V, "Interstate Rail- roads," ante. § 32. Intraterritorial Common Carriers. Any common carrier engaged in the transportation of persons and property as defined in the Act between points INTERSTATE COMMERCE LAW 115 within any territory of the United States, and where such transportation is performed wholly within such territory, is subject to the Act. Jurisdiction over intraterritorial transportation was conferred upon the Commission by the amendment of June 29, 1906. Act to Regulate Commerce (Amd. 1906) section 1. The Commission's jurisdiction over intraterritorial common carriers is purely statutory and when a territory becomes a state the intraterritorial jurisdiction of the statute expires automatically, and the prohibition against intrastate regulation by the national government imme- diately takes effect, excluding the Commission's power to proceed under complaint even though such complaint was filed prior to the date of admission to statehood. Chandler Cotton Oil Co. vs. Ft. Smith & W. R. R. Co., 13 I. C. C. Rep. 473. Hussey vs. Chicago, R. I. & P. Ry. Co., 13 I. C. C. Rep. 366. Since all territories within the United States have been admitted to statehood this intraterritorial jurisdiction has automatically ceased. (1) Common Carriers in Alaska. The Commission originally held that it had no jurisdiction over common carriers within the territory of Alaska, but the Supreme Court of the United States ruled to the contrary, and the Commission has since entertained its authority therein. In its original holding as to its jurisdiction over common carriers in Alaska, the Commission followed the territorial status of Alaska as defined by the Supreme Court in the Insular Cases: Humboldt S. S. Co. vs. U. S., 224 U. S. 474. Humboldt S. S. Co. vs. White Pass & Yukon Route, 25 I. C. C. Rep. 136, 140. Humboldt S. S. Co. vs. White Pass & Yukon Route, 19 I. C. C. Rep. 105. 116 AMERICAN COMMERCE ASSOCIATION Rassmussen vs. U. S., 197 U. S. 516, 49 L. Ed. 862. Dorr vs. U. S., 195 U. S. 138, 49 L. Ed. 128. Hawaii vs. Mankicki, 190 U. S. 197, 47 L. ed. 1016. Downes v§. Bidwell, 182 U. S. 244, 45 L. Ed. 1088. See also : Article 1, Section 8, clause 3, Const, of U. S. In the matter of Jurisdiction over Rail and Water Carriers Operating in Alaska, 19 I. C. C. Rep. 81. (2) Common Carriers in Porto Rico. The Safety Ap- pliance Act of 1893, and as amended in 1896, applied only to "any common carrier engaged in interstate commerce by railroad." By the amendatory Act of 1903 the pro- visions and requirements of the Act of 1893 were made applicable "to common carriers by railroads in the terri- tories and the District of Columbia." These amendments were later followed by amendatory acts of 1910 and 1911. Even after this amendment, however, it was not con- sidered that the provisions of the Safety Appliance Acts were applicable to common carriers by railroad in Porto Rico, the general understanding being that the territories referred to were those included within the territorial limits of the United States. The Supreme Court having held that the Safety Appli- ance Acts applied to common carriers by railroad in Porto Rico, the Interstate Commerce Commission entered upon an investigation to determine the character and kind of equipment used in the transportation of passengers and property by common carriers by railroad in Porto Rico, the safety appliances in use and the character of appli- ances that might be required under the provisions of the Safety Appliance Acts. The jurisdiction of the Interstate Commerce Commis- sion is not to be determined by anything other than the language of section 1 of the Act, and in this section is INTERSTATE COMMERCE LAW 117 found a clear distinction drawn between interstate com- merce and foreign commerce to a country not adjacent to the United States; and this distinction saves such foreign commerce from the effect of that section as to continuous carriage beyond the American seaboard. Thus, the Commission has no jurisdiction over the ocean carriers transporting shipments from the United States to a foreign country not adjacent to the United States. By the plain terms of the Act, the Commission, in its control over foreign commerce to and from a country not adjacent to the United States, is limited to the regu- lation of such traffic from the point of origin to the port of transshipment, or from the port of entry to the point of destination. An inland movement of either export or import traffic is a condition precedent to the attachment of the jurisdiction of the Commission, and then only over such inland portion of the movement. The Act provides no machinery by which its provisions can be enforced as to oceanic transportation lines. Prior to the supplemental legislation of 1912, known as the Panama Canal Act, approved August 24, 1912, and effective July 1, 1914, the Act to Regulate Commerce did not apply to the port-to-port traffic of water carriers. For the present jurisdiction of the Act over certain water car- riers, including coastwise oceanic lines, see this volume, chapter V, section 29, "Inland Water Carriers," ante. See also: Aransas Pass Channel & Dock Co. vs G. H. & S. A. Ry. Co., 27 I. C. C. Rep. 403. 414. Augusta & Savannah Steamboat Co. vs. O. S. S. Co., 26 I. C. C. Rep. 380, 383. Galveston Commercial Assn. vs. A. T. & S. F. Ry. Co., 25 I. C. C. Rep. 216, 225. Chamber of Commerce of New York vs. N. Y. C. & H. R. R. R. Co., 24 I. C. C. Rep. 55, 74. 118 AMERICAN COMMERCE ASSOCIATION Borgfeldt & Co. vs. S. P. Co., 18 I. C. C. Rep. 442, 553. In Re Jurisdiction over Water Carriers, 15 I. C. C. Rep. 205, 207, 208. 211. Joseph Ullman vs. Adams Express Co., 14 I. C. C. Rep. 340, 345. Cosmopolitan Shipping Co. vs. Hamburg-American Packet Co., 13 I. C. C. Rep. 266, 279. Lvkes Steamship Line vs. Commercial Union, 13 I. C. C. Rep. 310, 316. I. C. C. vs. Goodrich Co., 224 U. S. 194, 213. Goodrich Transit Co. vs. I. C. C. 190, Fed. Rep. 118, 123. Compare : Transcontinental Commodity Rates, 32 I. C. C. Rep. 449, 457. Jurisdiction over Water Carriers under the Panama Canal Act, see Panama Canal Act. In the course of its report, the Commission has this to say: "It seems not inappropriate to outline briefly the mode of government of Porto Rico since its acquisi- tion by the United States, as set forth in Ochoa vs. Hernandez, 230 U. S. 139. "By Act of April 25, 1898, 30 Stat. 364, chapter 189, Congress declared that a state of war existed between this country and Spain. Porto Rico, then a colony of Spain, was occupied by the military forces of the United States under Major-General Miles on July 25, 1898. A protocol was signed in Washington, Aug. 12, 1898, 30 Stat. 1742, under which hostilities were suspended j^ending negotiation of a treaty for the establishment of peace. In this protocol Spain agreed to cede the island of Porto Rico to the United States and to immediately evacuate it. Commissioners were appointed to treat at Paris and proceed to the negotia- tion and conclusion of the treaty. Pending the nego- tiation of the treaty, this government by its military forces occupied Porto Rico as a colony of Spain and was bound by the principles of international law to do whatever was necessary to secure public safety, social order, and the guaranties of private property. The island, and the islands and keys adjacent and be- longing to it, were by order of Oct. 1, 1898, General INTERSTATE COMMERCE LAW 119 Order No. 158, established as a military department. A treaty was signed at Paris, Dec. 10, 1898, and rati- fications were exchanged at Washington, April 11, 1899, 30 Stat. 1754. By the terms of this treaty Porto Rico was ceded to the United States, and 'the civil rights and political status of the native inhabitants of the territory hereby ceded to the United States shall be determined by Congress.' Article IX, page 1759. The military occupation of Porto Rico was im- mediately followed by the establishment of a pro- visional government, and this government continued in control of the affairs of the island continuously until the ratification of the treaty, and thereafter until the enactment of the Foraker Act of April 12, 1900, entitled 'An Act temporarily to provide revenues and a civil government for Porto Rico, and for other pur- poses,' 31 Stat. 77 , chapter 191. "The civil government provided by the Foraker Act consisted of a governor and executive council, a legis- lature subject to the laws of Congress and courts. Provision was made for review by the Supreme Court of decisions of the highest court of Porto Rico." Section 14 of this Act provided: "The statutory laws of the United States not locally inapplicable * * * shall have the same force and effect in Porto Rico as in the United States. "The Supreme Court has held that Porto Rico is an organized territory, appurtenant to, but not incor- porated in, the United States." In American R. R. Co. vs. Birch, 224 U. S. 547, it was held that "the Employers' Liability Act expressly applies to Porto Rico." The Safety Appliance acts were held to extend to Porto Rico in American R. R. of Porto Rico vs. Didricksen, 227 U. S. 145. It was the final conclusion of the Commission that pend- ing action by Congress in the premises it was constrained to hold that the cars, as well as the locomotives, of the 120 AMERICAN COMMERCE ASSOCIATION carriers in Porto Rico must be made to conform with the requirements of the Safety Appliance Acts. In Re Safety Appliances on Equipment of Railroads in Porto Rico, 37 I. C. C. Rep. 470, 471. (3) Common Carriers in Hawaii. The Interstate Com- merce Commission entertains jurisdiction, under the Act, over common carriers operating within the territory of Hawaii. (4) Common Carriers in Philippine Islands. The ju- risdiction of the Act to Regulate Commerce does not extend over common carriers operating within the terri- tory of the Philippine Islands. Compare : I. C. C. Conference Rulings Bull. No. 6, Ruling No. 389. (5) Common Carriers in the Panama Canal Zone. The Interstate Commerce Commission exercises jurisdiction over common carriers operating within the Panama Canal Zone, except that Colon, although within the geograph- ical Hmits of the Canal Zone, is governed by and is under the sovereignty of the Republic of Panama. The Com- mission has, therefore, held that shipments from the United States to Colon are entitled to export rates. I. C. C. Conference Rulings, Bull. No. 6, Ruling No. 359. § 33. Lighters and Lighterage Companies. A lighterage carrier, independently operated, but en- gaged in the interstate transportation of passengers or property under a common control, management, or arrangement, with a rail carrier, is subject to the Act. Eagle Pass Lumber Co. vs. National Railways of Mexico, 25 I. C. C. Rep. 5. INTERSTATE COMMERCE LAW 121 Murray Lighterage & Transportation Co, vs. D. & H. Co., 25 I. C. C. Rep. 388. Federal Sugar Refining Co. vs. B. & O. R. R. Co., 20 I. C. C. Rep^200. Federal Sugar Refining Co. vs. B. & O. R. R. Co., 17 I. C. C. Rep. 40, 45. Act to Regulate Commerce as amended. § 34. Ocean Carriers. Ocean carriers are not subject to the Act, and the Com- mission has no power to establish through routes or joint rates to destinations in a foreign country. The Commis- sion may deal with import and export rate situations only as though the ports of entry and transshipment were destinations instead of gateways. From a careful reading of section 1 of the Act, inarti- ficially drawn as it is, the legislative intention is clear to bestow upon the Interstate Commerce Commission juris- diction over such ocean carriers only as may form a con- necting link in the through transportation of passengers or property internal to the United States, to an adjacent foreign country, or to and from ports of transshipment and entry either in the United States or an adjacent for- eign country, when operated in connection with a railroad under a common control, management, or arrangement for a continuous carriage or shipment. The word "adjacent," as used in the Act to modify the word "foreign," would seem to mean adjacent in the sense of a possibility of substantial continuity of rails. § 35. Private Car Companies. Section 1 of the Act, by its definement of the term "transportation" to include "cars and other vehicles, and all instrumentalities and facilities of shipment or carriage, irrespective of ownership, or of any contract, express or implied, for the use thereof," brings private car companies 122 AMERICAN COMMERCE ASSOCIATION within the jurisdiction of the Act when furnishing cars for or engaging in interstate transportation. Act to Regulate Commerce, section 1. Section 1 of the Elkins Act, providing that "it shall be unlawful for any person, persons, or corporation to offer, grant, or give, or to solicit, accept or receive any rebate, concession, or discrimination in respect to the transporta- tion of any property in interstate or foreign commerce by any common carrier subject to said Act to Regulate Com- merce and the acts amendatory thereof whereby any such property shall by any device whatever be transported at a less rate than that named in the tariffs published and filed by such carrier, or whereby any other advantage is given or discrimination is practiced," brings within the jurisdiction of the Act a private car company which deliv- ers its cars to a common carrier subject to the Act to be furnished indiscriminately for the use of shippers, receiv- ing from such carrier compensation for the use thereof on a mileage basis. The jurisdiction of the Commission attaches to such private car company as an agency of transportation which may be so conducted as to impair or destroy uniformity of rates, which is the substantive object to the statute. Elkins Act, section 1, Pub. 103, app. Feb. 19, 1903. I. C. C. vs. Reichman, 145 Fed. Rep. 235. I. C. C. Ann. Rep. for 1904, "Private Car Monopolies." See also: Ellis vs. I. C. C, 237 U. S. 434, 59 L. Ed. Pa. Paraffine Works vs. P. R. R. Co., 34 I. C. C. Rep. 179, 193 Vulcan Coal & Mining Co. vs. I. C. R. R. Co., 33 I. C. C. Rep. 52. A. T. & S. F. Ry. Co., U. S., 232 U. S. 199. Arlington Heights Fruit Exchange vs. Southern Pacific Co., 20 I. C. C. Rep. 106. Chappelle vs. L. & N. R. R. Co., 19 I. C. C. Rep. 56, 59. INTERSTATE COMMERCE LAW 123 Chappelle vs. L. & N. R. R. Co., 19 I. C. C. Rep. 456. Carr vs. No. Pac. Ry. Co., 9 I. C C. Rep. 1, 12. Worcester Excursion Car Co. vs. Penn. R, R. Co., 3 I. C. C. Rep. 577, 2 I. C. Rep. 792. § 36. Purchasers and Successors of Common Carriers. The purchasers or successors of common carriers sub- ject to the Act remain under the jurisdiction of the statute so long as such common carrier is subject to the regulating authority. It would indeed be lamentable, said the court, if a law- ful order against unjust discrimination, made by the Interstate Commerce Commission after a protracted inves- tigation, could be nullified by the subsequent reorganiza- tion of the company, or transfer of its railroad and franchises to another corporation. It is a settled principle that the purchaser of property in litigation, pendente lite, is bound by the judgment or decree in the suit. I. C. C. vs. W., etc., R. R. Co., et al., Fed. Rep. 192. § 37. Trustees and Receivers of Common Carriers. The text of the statute recognizes two classes of com- mon carriers, namely natural persons and corporations. It contemplates receivers of railroads as persons in charge of the affairs of such carriers without reference to their offi- cial relation to the court appointing them. Barnes on Interst. Transportation, section 51, page 111, citing 8th Ann. Report of I. C. C, for 1895, and Beach on Receivers. The principle that the receiver as an officer of the court appointing him is subject only to the authority of such court is modified as to many of his duties by the Act to Regulate Commerce, and other federal statutes, and offers no impairment of the jurisdiction of the Commission. Act to Regulate Commerce, sees. 1, 6, 9, 10, 16 and 20. Elkins Act, sec. 1. 124 AMERICAN COMMERCE ASSOCIATION Arbitration Act, section 1. Removal of Causes Act, sections 3, 24 St. at L., 554. Amend, of 1888, C. 886, section 3, 25 St. at L. 436. See also: Beach on Receivers. It is very clear from all the authorities, as well as from the reason of the matter, that the attitude of a receiver to the Act to Regulate Commerce is precisely that of the atti- tude of the corporation whose affairs have not been taken possession of by the court. The business performed is pub- lic. It is, as has been stated and shown so many times, the administration of public functions. The managers of railroads, whether they are owners or receivers, are put- ting in operation a function of the government, and the mere fact of sequestration of the property and the appoint- ment of receivers for the benefit of creditors does not ex- onerate a management from performing the public duties according to the rules and regulations which the statutes may prescribe for such business. Barnes on Interst. Transportation, section 51, page 114, citing the Ann. Report of I. C C, for 1895. Where carrier corporations are subject to the Act, their receivers are subject to its prohibitions, requirements, and regulations. Indep. Ref. Assn. vs. W., etc., R. R. Co., et al., 6 I. C. C. Rep. 378. Where a receiver of a carrier subject to the Act has been appointed, prior leave of the court appointing him is not necessary to entitle the shipper to bring complaint against such receiver before the Commission, nor is it necessary to give the Commission jurisdiction of such pro- ceeding. May vs. McNeill, Receiver, 6 I. C. Rep. 250. INTERSTATE COMMERCE LAW 125 When the line of a carrier subject to the Act is operated by a receiver or trustee, both the carrier and its receiver or trustee should be made defendants in cases involving transportation over such line. Rules of Practice before Commission, Rule 11. A receiver or trustee has the same right to question the Commission's order as to its validity, or interpose the same defense to the proceeding, as the carrier itself. Farmers' L. & T. Co. vs. Nor. Pac. Ry. Co., 83 Fed. Rep. 249. § 38. Lessees of Common Carriers. By leasing its road, a common carrier subject to the Act cannot remove itself from the prohibitions, requirements, and penalties of the Act, nor in pending proceedings claim exemption during the tenure of such lease. The jurisdic- tion of the Act attaches to the lessee to the same extent that it does to the carrier leasing its property. Indpendent Rfrs. Assn. vs. Western N. Y. & P. R. R. Co., 6 I. C. C. Rep. 378. Compare : Western N. Y. & P. R. R. Co. vs. Penn. Refining Co., 137 Fed. Rep. 343, 356, 70 C. C. A. 23, holding that where a railroad company subject to the Act leases its line to another com- pany the lessor company is not liable in damages under sec- tion 8 of the Act for violations of law by the lessee company. § 39. Sleeping Car Companies. By amendment of June 29, 1906, sleeping car companies were specifically brought w^ithin the jurisdiction of the Act. Act to Regulate Commerce, section 1. The Pullman Company, which is a sleeping car com- 126 AMERICAN COMMERCE ASSOCIATION pany, is a common carrier and subject to the jurisdiction of the Act. Kurtz vs. Pennsylvania Co., 16 I. C. C. Rep. 410. See also: Pullman Co. vs. Linke, 203 Fed. Rep. 1017, 1019. Corporation Commission of Oklahoma vs. A. T. & S. F. Ry. Co., 25 I. C. C. Rep. 120. §40. State Railroads Engaged in Interstate Transporta- tion. When a state carrier engages in interstate commerce, it becomes a national instrumentality for the purpose of such commerce and is subject to the regulations prescribed by the national authority. Barnes on Interst. Transportation, section 33, page 86, para- graph 1. The extent to which participation in shipments originat- ing at, or destined for, other states is sufficient to bring within the Act a carrier whose line is situated wholly within one state, seemed to produce some confusion in the earlier decisions of the courts and the Commission. This was mainly due to the somewhat ambiguous language used in section 1 of the Act, reading as follows: "That the provisions of this Act shall apply to any common carrier or carriers engaged in the transpor- tation of passengers or property wholly by railroad (or partly by railroad and partly by water when both are used under a common control, management, or arrangement for a continuous carriage or shipment)." This provision of the law remained unchanged from time of the original enactment in 1887 up to June 29, 1906, when, by the Hepburn Act, the parentheses, as indicated INTERSTATE COMMERCE LAW 127 in the foregoing quotation, were inserted. This language has been recently said to indicate the intention of Con- gress to be : First. To apply the Act to all railroad carriers engaging in interstate transportation. Second. To apply the Act to such interstate transporta- tion partly by railroad and partly by water when, and only when, both the railroad and the water are used by the respective carriers under a common control, management, or arrangement for a continuous carriage or shipment. Moore on Interst. Commerce, section 25, page 55, referring to concurring opinion of Comr. Cockrell, in re Jurisdiction over Water Carriers, 15 I. C. C. Rep. 205, 212. See also: Hood & Sons vs. Delaware & Hudson Company, 17 I. C. C. Rep. 15. In re Transportation by C. & O. Ry. Co. et al., 21 I. C. C. Rep. 207. (1) Rulings Respecting State Carriers Prior to the 1906 Amendment to the Act to Regulate Commerce. A state common carrier when operating under arrangement for continuous carriage of interstate traffic was subject to the provisions of the Act. Heck vs. East Tenn. V. & G. Ry. Co., 1 I. C. C. Rep. 495, 1 I. C. Rep. 775. Mattingly vs. Pa. Co., 3 I. C, C. Rep. 592, 2 I. C. Rep. 806. Boston Fruit and Produce Exchange vs. N. Y. & N. E. R. R. Co., 4 I. C. C. Rep. 664, 667, 3 I. C. Rep. 493. Pa. Millers', etc., Assn. vs. P. & R. Ry. Co., 8 I. C. C. Rep. 531. Augusta S. R. Co. vs. Wrightsville R. Co., 74 Fed. Rep, 522. As to what constituted evidence of arrangement for con- tinuous carriage, see: 16—9 L. & N. R. R. Co. vs. Behlmer, 175 U. S. 648, 20 Sup. Ct. 209, 44 L. Ed. 310. 128 AMERICAN COMMERCE ASSOCIATION Cinn., etc., Ry. Co. vs. I. C. C, 162 U. S. 184, 16 Sup. Ct. 700, 40 L. Ed. 935, affirming same case, 13 U. S. App. 730, same case, 56 Fed. Rep. 925, same case, 4 I. C. C. Rep. 744, 3 I. C. Rep. 682. T. &. P. Ry. Co. vs. Clark, 4 Tex. Civ. App. 611, 23 S. W. 698. R. R. Com., etc., vs. Clyde S. S. Co. et al., 5 I. C. C. Rep. 324, 4 I. C. Rep. 120. Phelps & Co. vs. T. &. P. Ry. Co. et al., 6 I. C. C. Rep. 36, 4 I. C. Rep. 363. Frt. Bu. of Cinn. vs. Cinn., etc., Ry. Co. et al., 6 I. C. C. Rep, 195, 233, 4 I. C. Rep. 592. U. S. vs. Seaboard Ry. Co., 82 Fed. Rep. 563. U. S. vs. Standard Oil Co., 155 Fed. Rep. 305. U. S. vs. N. Y. C, etc., R. R. Co., 153 Fed. Rep. 630. By participating in through movement of interstate traffic, although its own movement was performed wholly within the state, a carrier whose railroad was wholly within the limits of the state became subject to the Act. Baer Bros., etc., vs. Mo. Pac. Ry. Co., 13 I. C. C. Rep. 329. Nollenberger vs. M. P. Ry. Co. et al., 15 I. C. C. Rep. 595. U. S. vs. Standard Oil Co. of Ind., 155 Fed. Rep. 305. Every part of every transportation of articles of com- merce in a continuous passage from a commencement in one state to a prescribed destination in another was a transaction of interstate commerce. Every carrier who transported such goods through any part of such con- tinuous passage was engaged in interstate commerce, whether the goods were carried upon through bills of lading or were rebilled by the several carriers. Barnes Interst. Transportation, section 33, page 88, citing Wilson vs. Rock Creek Ry., etc., 7 I. C. C. Rep. 83. Any corporation which engaged in interstate commerce as defined by the Act subjected itself to all the provisions of the Act and all other regulative provisions relating thereto constitutionally prescribed by the Congress. Cassatt vs. Mitchell C. & C, 150 Fed. Rep. 32. INTERSTATE COMMERCE LAW 129 A state railroad, or other railroad not otherwise subject to the Act, if it engaged in the transportation of express matter for an express company that was subject to the Act, subjected itself to the Act in relation to such express traflfic. I. C C. Conf. Rulings, Bull No. 6, Ruling No. 197. Prior to the amendment of June 29, 1906, state railroads were not held to be subject to the jurisdiction of the inter- state commission unless they handled traffic, even though such traffic were interstate in character, under a common control, management, or arrangement for a continuous carriage or shipment of interstate commerce, but since the above mentioned amendment, the statute holds any carrier, state or otherwise, which engages in the move- ment of articles of commerce from a point in one state to some point in a different state, even though such carrier performs its part of such service wholly within the state in which it operates and not under a through bill of lading, is subject to the provisions of the statute. Leonard vs. K. C. S. Ry. Co. et al., 13 I. C C. Rep. 573. In re Transportation by C. & O. Ry. Co., et al., 21 I. C. C. Rep. 207. C. N. O. & T. Ry. Co. vs. I. C. R.. 162 U. S. 184. See also: Kanotex Refining Co. vs. A. T. &. S. F. Ry. Co., 34 I. C. C Rep. 271. T. & N. O. R. R. Co. vs. Sabine Tram. Co., 227 U. S. 111. Ohio R. R. Comm. vs. Worthington, 225 U. S. 101. So. Pac. Terminal Co. vs. I. C. C, 219 U. S. 498. Compare : C. M. & St. P. Ry. Co. vs. Iowa, 233 U. S. 334. G. C. & S. F. Ry. Co. vs. Texas, 204 U. S. 403. 130 AMERICAN COMMERCE ASSOCIATION §41. Street Railways Within the District of Columbia. The District of Columbia bears the same relation to the federal government as a city sustains to the state legis- lature. U. S. vs. McFarland, 20 App. D. C. 552. It is in that sense a municipal corporation possessing no legislative power and over which the plenary power of Congress is supreme. Cohens vs. Virginia, 6 Wheat. (U. S.) 264, 5 L. Ed. 257. In the Employers' Liability cases the Supreme Court said that "the legislative power of Congress over the Dis- trict of Columbia is plenary and does not depend upon the special grant of power such as the commerce clause of the Constitution." Employers' Liability Cases, 207 U. S. 463, 28 Sup. Ct. 141. Barnes Interstate Transportation, section 30, page 76, Section 1 of the Act to Regulate Commerce subjects to its provisions all carriers within the District of Columbia engaged in the transportation designated in the Act. Act to Regulate Commerce, section 1. Prior to the enactment of the District of Columbia Pub- lic Utilities Law, the District of Columbia Street Railways Act of 1908, regulating street railways within the District of Columbia, conferred upon the Interstate Commerce Commission jurisdiction and authority to enforce obe- dience to its provisions and required such street railways to comply with the orders of the Commission, Dist. of Columbia St. Rys. Act, approved May 23, 1908, Pub. No. 134, 35 Stats, L. 246. Since 1912 public utilities within the District of Colum- bia have been under the jurisdiction and authority of the INTERSTATE COMMERCE LAW 131 Public Utilities Commission of the District of Columbia, which body reports direct to Congress. Public Utilities Act of D. C, Pub. No. 435, approved March 4, 1913. §42. Terminal and Belt Railroads Engaged in Handling Interstate Traffic. A belt or terminal railroad is a Hne or lines of railway constructed generally in and about a large city, terminal, or shipping center, to form a connection between dif- ferent lines of railroad, and having connections, by switch or otherwise, with the lines of railway entering and leav- ing such point or terminal, for the purpose of unifying the service and expense of the interchange of traffic between the lines at such point or terminal. Such belt or terminal railroads may be owned subsidiarily or by one or more of the lines entering or leaving such terminal or point as a part or parts of their system or systems, or as an inde- pendent corporation. Portland Lumber Co. vs. O.-W. R. R. Co., etc., 21 I. C. C. Rep. 292. A belt or terminal railroad engaged in the transporta- tion of property moving from a point in one state to a point in another state is "as much subject to the Act as though it owned and operated all the line of railroad con- necting the points in different states between which moved the commodities mentioned." U. S. vs. Illinois Terminal Rd. Co., 168, Fed. Rep. 546. I. C. C. Conf. Rulings, Bull. No. 6, Ruling No. 312. A belt or terminal railroad receiving shipments of inter- state freight moving under through bills of lading to or from industries on its line, subjects its line to an act of common control for a continuous shipment within the meaning of section 1 of the Act. Interst. S. Y. Co. vs. Indpls. Un. Ry. Co., et al., 99 Fed. Rep. 472. 132 AMERICAN COMMERCE ASSOCIATION Note — Since the amendment of 1906, the through bill of lading would not be essential, as the test of appHcation of the authority of the Act is the charac- ter of the transportation and the service the public may demand rather than the manner in which the transportation service is performed. Much of the authority applicable to state carriers participating in interstate traffic is likewise applicable to terminal and belt railroads in the determination of when the juris- diction of the Act begins. Where a holding company controls an extensive system of railroads, including a terminal company which operates certain wharves and docks, both the holding company and the terminal company are proper parties to a proceeding involving a question of discrimination where a preference is charged through the leasing to a favored shipper by the terminal company of certain property, although neither said holding nor terminal company, considered alone, came within the definition of a common carrier, but the terminal company is a necessary element in and facility of the interstate transportation in which the entire system controlled by the holding company was engaged, and to the extent such transportation was interstate, the statu- tory jurisdiction of the Commission obtains. Eichenberg vs. So. Pac. Co., 14 I. C. C. Rep. 250. The rule that "the movement of freight from a point in one state to a point in another state by rail must be re- garded as an entirety and every railroad participating in that movement thereby becomes subject to the Act to Regulate Commerce, even though its service is performed entirely within a single state," applies to a belt or terminal railroad participating in the movement of interstate traffic. Leonard vs. K. C. S. Ry. Co., 13 I. C. C. Rep. 573. INTERSTATE COMMERCE LAW 133 The duty of regulating terminal charges, when related to traffic between the states, has been lodged with the Commission, and a statute of a state prescribing certain terminal charges with respect to interstate traffic is not controlling. Wilson Prod. Co. vs. Penna. R. R. Co., 14 I. C. C. Rep. 170. A belt or terminal railroad, independently operated, as a state railroad, would become subject to the provisions of the Act if it engages in interstate commerce, although it enters into no arrangement with any other carrier by rail or water for the movement of traffic between such points on its line and points without the state. Leonard vs. K. C. S. Ry. Co., 13 I. C. C. Rep. 573. In re question, "Is a belt line owned by a municipality, which participates in interstate movements, subject to the jurisdiction of the Act and of the Commission?" the Com- mission held it was subject to such jurisdiction. I. C. C. Confr. Rulings, Bull. No 6, Ruling No. 89, page 24. See also this volume, chapter V, section 27, "Municipal Ferries." (1) Industrial Railways. In its original report in the Industrial Railways Case, the Commission made no dis- tinction between the industrial roads, although their phys- ical characteristics and conditions surrounding them varied widely. It held these roads to be merely plant facilities and not common carriers, following the rule laid down in the original Tap Line Cases before the Commis- sion. Subsequent to the decision of the Supreme Court in the Tap Line Cases, the Commission modified its pre- vious ruling in the Industrial Railways Case to permit the trunk line roads, if they so elected, to arrange by agreement divisions of rates with any industrial railroads 134 AMERICAN COMMERCE ASSOCIATION which are common carriers under the test applied by the Supreme Court in the Tap Line Cases. The question in- volved was whether the industrial railways were common carriers and therefore amenable to the Act to Regulate Commerce. The Commission in its supplemental report divided the industrial railways into six groups. The first group included such industrial railways as had a very general merchandise and commodity traffic aside from the traffic of the controlling industries. They were of the trunk line type; performed hauls ranging from 11 to 380 miles. These lines were common carriers within the Supreme Court test. The second group was of lines extended from lumber mills to junctions of the trunk line carriers and were, in reality, tap Hues. These lines also in all respects fell within the principles laid down by the Supreme Court in the Tap Line Cases, except that in the Tap Line Cases the tap lines were all located within the producing territory from which the trunk lines applied a blanket rate to all important markets, whereas within the second group no large blanket existed, the rates on lumber bemg graded with some regard to distance. In the case of short-haul traffic in this territory some recognition was given to the two-line hauls involved from points on the tap lines. The third group of lines included those, the physical operations of which were, in all respects, similar to those involved in the General Electric Co., Solvay Process Co., Crane Iron Works, and Alan Wood, Iron & Steel Co. cases, the only essential difference being that the lines in the third group were incorporated and held themselves to be common carriers. Again, the Supreme Court test in the Tap Line Cases was used to determine the character INTERSTATE COMMERCE LAW 135 of the common carrier, that test being that, "it is the right of the public to use the road's facilities and to de- mand service of it rather than the extent of its business, which is the real criterion determinative of its character." The fourth group of lines resembled the lumber tap lines Mrith the important exception that they hauled com- modities other than lumber, and thus, in some instances, fell under the direct inhibition of the commodities clause. In the fifth group were placed plant facilities. An in- dustry had plant tracks which could under no conceivable conditions be considered as having any common-carrier characteristics. In order to give to them such a status, a railroad was incorporated, the tracks of the plant leased to it, and the trunk line granted trackage rights and even leased its rails to the industrially owned railroad corpora- tion. The industrial railroad thereupon published tariffs, filed them with the Commission, made reports, and as a matter of form assumed the appearance of a common car- rier subject to the Act, thereby deriving from the trunk line, divisions out of the rate applicable to the locality for the same service which the industry had previously per- formed without compensation. This practice, the Com- mission condemned as unquestionably a device to give an undue advantage to the shipper. The sixth group was composed of industrial plant tracks which were neither owned nor operated by common car- riers and which were not dedicated to public use, the own- ership and right of use being in the controlling industries which operated them. This group of lines sought allow- ances out of the locality basis of rates under section 15 of the Act, based on the theory that they were performing a service of transportation which the trunk line was obli- gated to perform under the rate structure. The Commis- sion in this connection called attention to the "passing of 136 AMERICAN COMMERCE ASSOCIATION the necessity for the provision of section 15 under which shippers may be compensated by the trunk lines for their facilities used in the handling of their own shipments. This legislative measure was enacted to give this Commis- sion a means of eliminating certain unjust discriminations. The gradual ehmination of discriminatory practices by other processes leaves this provision of the law to be used as a cloak for various payments which but for it would be looked upon as rebates." The Commission said further: "Because of the varying nature of the operations of the industrial lines and because each of them must be treated on the particular facts pertaining to it, it is proper that we point out the principles and decisions which must guide those desiring to enter into joint rate arrangements and the limitations within which such arrangements may be made. There must be de- termined with respect to each of the lines, first, whether the instrumentality performing the service is a bona fide common carrier; second, whether the ser- vice which it performs between the point of inter- change with the trunk line and point of placement on the line of the industrial road is plant service or public transportation; third, whether a charge should be made for such service in addition to the line-haul rate applicable to or from points on the rails of the trunk line at the junction. With these questions there is to be considered the larger economic problem whether part of the money paid to the trunk Hne carriers for public transportation service is to be used to defray the expense of particular shippers in conveying their traffic to and from the terminals of the trunk line car- riers. The Industrial Railways Case rests largely upon the principle of placing the cost of service where it properly belongs. In approaching the question whether the common carrier status of an industrial line is bona fide it must be borne in mind that there INTERSTATE COMMERCE LAW 137 are interests of the industry beyond the mere question of rates in maintaining such a status. The recogni- tion of such lines as common carriers in the associa- tion of railroads through which the interchange of cars is provided inures to the very great advantage of the controlling industry served by such a line in the way of remission of charges for the detention of cars. In our original report on the Industrial Railways Case this matter was fully discussed." Second Industrial Rys. Case, 34 I. C. C. Rep. 596, 600. A. T. & S. F. Ry. Co. vs. Kans. City Stk. Yds. Co., 33 I. C. C. Rep. 92. In re Joint Rates with the Birm. Sou. Ry. Co., 32 I. C. C. Rep. 110. Mfrs. Ry. Case, 32 I. C. C. Rep. 100. Industrial Rys. Case, 32 I. C. C. Rep. 129, 130. Tap Line Cases, 234 U. S. 1. U. S. VS-. B. & O. R. R. Co.. 231 U. S. 274. I. C. C. vs. Diffenbaugh, 222 U. S. 42. I. C. C. vs. Stickney, 215 U. S. 98, 105. Compare : Alan Wood Iron & Steel Co. vs. P. R. R. Co., 22 I. C. C. Rep. 540. Cancellation Joint Rates in connection with C. Z. & G. R. R. Co., 27 I. C. C. Rep. 353. Industrial Rys. Case, 29 I. C. C Rep. 212. Crane Iron Wks. vs. C. R. R. of N. J., 17 I. C. C, Rep. 514, . (affirmed) Crane vs. U. S. 209 Fed. Rep. 238. Solvay Process Co. vs. D. L. & W. R. R. Co., 14 I. C. C. Rep. 246. Gen. Elec. Co. vs. N. Y. C. & H. R. R. R. Co.. 14 I. C C. Rep. 237. See also : Second Industrial Rys. Case, 37 I. C C. Rep. 408, 491, 497, 558, 566. Second Industrial Rys. Case, 38 I. C. C. Rep. 316. Industrial Rys. Case, 38 I. C. C. Rep. 510. Industrial Rys. Case, 39 I. C. C. Rep. 312. Second Industrial Rys. Case, 41 I. C. C. Rep. 68. Industrial Rys. Case, 41 I. C. C. Rep. 53. Second Industrial Rys. Case, 41 I. C. C. Rep. 46. Second Industrial Rys. Case, 41 I. C. C. Rep. 42. (2) Tap Lines. Tap lines or industrial railroads affil- iated with lumber companies have several times been 138 AMERICAN COMMERCE ASSOCIATION before the Interstate Commerce Commission on the ques- tion of their status as common carriers subject to the Act to Regulate Commerce. Defining what is a tap line, the Commission said: "Originally it was usual to refer to all the rails used in a lumber mill operation as a 'logging road,' but since the practice of making allowances to the lumber companies west of the Mississippi River has crept in, and more particularly within the last four or five years, the rails leading from the mill to or through the timber, and usually to a logging camp or company town, have come to be known as the main line or 'tap line.' The spurs radiating into the forest from that point or from other points along the main line are now usually referred to as the 'logging road.' " The tap lines, in their physical characteristics and rela- tion to the proprietary lumber companies, differed mate- rially. A difference in practice on the two sides of the Mississippi River was in vogue. The railroads west of the Mississippi made certain allowances to the mills which had "logging roads" which was called a "tap-line allow- ance or division." The mills east of the river, although having logging roads, were made no such allowance. The Supreme Court, in the Illinois Central R. R. Case, de- clared that no reason appeared for such allowance west of the Mississippi which did not apply east of that river, and that it amounted to a rebate or reduction from the regu- larly published rate giving an advantage to the mills west of the Mississippi over those east, although the published rates from both were the same. The Commission, in general, declared the tap lines in- volved in the original investigation to be merely plant facilities and not common carriers. It held that while a common ownership of an industry and a short line serving it was not in itself sufficient to divest the railroad of its INTERSTATE COMMERCE LAW 139 status as a common carrier, on the other hand, the fact that the rails, locomotives, and cars of an industry had been turned over to an incorporated railroad company ow^ned and operated by the industry or in its interest, did not divest those appliances of their character as a plant facility if such in fact was the case. In other vvrords, the Commission sought to distinguish between what is transportation and what is industry, and between a facility of transportation and a plant facility or tool of the industry, treating each case, however, on its own merits. Its general conclusion was that the service performed for the proprietary lumber companies by certain tap lines, then before the Commission, was not a service of trans- portation by a common carrier. The Supreme Court, in reviewing the Commerce Court decision in the Tap Line Cases, held that the test of com- mon carriership was the right of the public to use the railroad's facilities and to demand service of it rather than the extent of its business, and held the five tap lines which had appealed, to be common carriers with respect to both proprietary and non-proprietary traffic. Applying the rule thus laid down by the Supreme Court, the Commis- sion has, upon the facts in each individual case, deter- mined the status of tap lines throughout the country, holding those tap lines of which the public has a right to use the road's facilities and demand service, to be common carriers, and in so far as they participate in interstate transportation, to be subject to the Act to Regulate Com- merce. Tap Lines Cases, 234, U. S. 1. Tap Line Case, 31 L C. C. 490. Tap Line Case, 34 L C. C. 116. Tap Line Case, 35 L C. C. 485. 140 AMERICAN COMMERCE ASSOCIATION See also: O'Keefe Tap Line Case, 240 U. S. 294. Caddo River Lumber Co. vs. C. & C. R. R. Co., 38 L C. C. Rep. 330. Union Lumber Co. vs. G. C. & S. F. Ry. Co., Zl L C. C. Rep. 225. Black & White River Transp. Co. vs. M. P. Ry. Co., 37 L C. C. Rep. 244, 246. Ladd & Co. vs. Gould Southwestern Ry. Co., 36 L C. C. Rep. 179. 183. (3) Plant Facilities. The determination of the status of an industrial railroad, either as a common carrier or a plant facility, amounts to looking to the substance of the service and not to its form. A plant facility may be gen- erally defined as the instrumentalities — such as storage and switching tracks, locomotives, electric motors, and in some instances, special cars — operated as a part of an in- dustrial plant. In the General Electric Co. Case the plant facilities con- sisted of 12 miles of broad gauge switching tracks and 7 miles of narrow gauge electric tracks, electric motors, en- gines, and a crew of men to operate these instrumentali- ties. The test of the status of these plant facilities, originally applied by the Commission, was that used in the original Tap Lines investigation, but since then the Supreme Court has ruled that the criterion determinative of the character of the industrial railroad as a common car- rier is the right of the public to demand service of it and not the extent of its business as a plant facility. Plant facilities as such, of course, are not subject to the Act to Regulate Commerce. It is only when the indus- trial railroad, although it may perform a plant service as to proprietary traffic, becomes a common carrier under the Supreme Court test, that the jurisdiction of the Act takes effect. Plant facilities of this character are divisible into two INTERSTATE COMMERCE LAW 141 general classes, (1) those which are incorporated as com- mon carriers, and (2) those which are not incorporated as common carriers, nor dedicated to public use. In the case of the incorporated plant facilities the pro- cedure of creation was to incorporate a railroad, lease such tracks as belonged to the plant to the incorporated rail- road and procure from the trunk line trackage rights and leases of its rails, and thereupon to file tariffs with the Interstate Commerce Commission and make reports thereto by the incorporated company; thus, as a matter of form, assuming the appearance of a common carrier sub- ject to the Act. The purpose of this procedure was to procure from the trunk line divisions out of the rates applicable to the locality for the same service which the industry had previously performed without compensation. For a trunk line carrier to offer its faciHties by lease or by trackage rights and thereby give an undue advantage to a single shipper was condemned by the Commission as in contravention of the provisions of the Act to Regulate Commerce. The attempt of these industrial plant sys- tems to procure allowances out of the locality basis of rates under section 15 of the Act to Regulate Commerce was denied by the Commission, and such action by the Commission is in no wise repugnant to the holding of the Supreme Court in the Tap Line Cases, supra, which said : << * He * If the service is public transportation defendant may be compensated, even though it be not a common carrier. Railroads are not required to own all of the instrumentalities required for the perform- ance of the service which they are bound or undertake to perform. They may also lease or hire suitable facilities or discharge a part of their duties through agents and without restriction as to the public or pri- vate status of such agents or of the owners of the in- strumentalities procured. The only restriction is that 142 AMERICAN COMMERCE ASSOCIATION contained in section 15 of the Act to the effect that allowances to shippers for furnishing transportation or instrumentalities thereof shall be supervised by the Commission." The extent of the right of an industry to be allowed compensation under section 15 of the Act for the services and facilities rendered by it to the trunk lines and common carriers subject to the Act, through its plant facilities, is a question solely within the jurisdiction of the Act and the authority of the Commission, but beyond this point the present system of regulation does not reach to plant facili- ties and their operation. See, also, citation of cases in this section, sub-(l), "In- dustrial Railways," and sub-(2), "Tap Lines." Compare : A. T. & S. F. Ry. Co. vs. Kansas City Stk. Yds. Co., 33 I. C. C. Rep. 92. Associated etc., Los Angeles vs. A. T. &. S. F. Ry. Co., 18 I. C. C. Rep. 310, 313. Crane Iron Wks. vs. C. R. R. Co. of N. J., 17 I. C. C. Rep. 514. Solvay Process Co. vs. D. L. & W. R. R. Co., 14 I. C. C. Rep. 246. Gen. Elec. Co. vs. N. Y. C. & H. R. R. R. Co., 14 I. C. C. Rep. 237. (Affirmed) Crane Iron Works vs. U. S., 209 Fed. Rep. 238. In this connection it is well to note the rulings of the Su- preme Court of the United States in the Newcastle (236 U. S. 351) and Pacific Coast Switching Cases, the latter being commonly known as the Los Angeles Switching Case. In Pennsylvania Co. vs. U. S., 236 U. S. 351, the court held that the term "transportation," as used in the Act to Regulate Commerce, "covers the entire carriage and serv- ice in connection with the receipt and delivery of property transported." In the Pacific Coast Cases, 234 U. S. 294, and 234 U. S. 315, the court held that the delivery and receipt of goods INTERSTATE COMMERCE LAW 143 within the switching limits of a city is not necessarily an additional service for which a carrier may make an addi- tional charge, but that it is a question of fact for the Commission to determine whether such delivery and re- ceipt is an additional service or whether it is merely a substituted service which is substantially a like service to that included in the line-haul rate. Attention is called to these two decisions merely for the purpose of pointing out the effect of these rulings on the extent to which the plant facility might be used in accom- plishing the receipt or delivery of freight which is, in real- ity, a part of the "transportation" which carriers are required to afford under the provisions of the Act, thus effecting the right of the proprietary shippers and receivers of freight to receive allowances under section 15 of the Act. § 43. Jurisdiction of the Commission Not Affected by Nature of Organization of Carrier. Section 1 of the Act applies the jurisdiction of the Act to "any common carrier or carriers," and makes no dis- tinction as to the nature of the carrier's organization, cor- porate or otherwise. Any common carrier, whether operated as a corporation, stock company, partnership, or by individual ownership, is subject to the provisions of the Act when it engages in the character of transportation designated in the statute. American Bankers' Assn. vs. Am. Ex. Co. et al., 15 I. C. C. Rep. 15. Congress has power to charter a railroad company, and such federally incorporated carrier is subject to the juris- diction of the Act and of the Commission. Pacific R. Cases, 115 U. S. 2, 29 L. Ed. 319. Calif, vs. Pac. R. R. Co., 127 U. S. 1, 22 L. Ed. ISO. 16—10 144 AMERICAN COMMERCE ASSOCIATION Decker vs. R. R. Co., 30 Fed. Rep. 723. Raworth vs. No. Pac. R. R. Co., et al., 5 I. C. C. Rep. 234, 3 I. C. Rep. 857. Mer. Un. of Spokane Falls vs. No. Pac. R. R. Co., 5 I. C. C. Rep. 478, 4 I. C. Rep. 183. § 44. Kinds of Transportation Subject to the Act. In the language of section 1 of the Act to Regulate Commerce, the transportation service of the common car- riers made subject thereto, is generally described as the transportation of persons and certain named kinds of property from one state or territory of the United States or the District of Columbia to any other state or territory of the United States or the District of Columbia, or from one place in a territory to another place in the same terri- tory, or from any place in the United States to an adjacent foreign country, or from any place in the United States through a foreign country to any other place in the United States, and also the transportation in like manner of prop- erty shipped from any place in the United States to a for- eign country and carried from such place to a port of transshipment, or shipped from a foreign country to any place in the United States and carried to such place from a port of entry either in the United States or in an adjacent foreign country. § 45. Movement in Transportation Conclusive. And in specific movement from any point in a state of the United States To any point in another state -of the United States. To any point in a territory of the United States. To any point in the District of Columbia. To any point in the same state, but passing through an adjacent state, territory, or foreign country. From any point in a territory of the United States To any point in a territory of the United States. INTERSTATE COMMERCE LAW 145 To any point in another territory of the United States. To any point in a state of the United States. To any point in the District of Columbia. From any point in the District of Columbia To any point in a state of the United States. To any point in a territory of the United States. To any point in the District of Columbia. From any point in the United States To an adjacent foreign country. To any other point in the United States passing through a foreign country. To the port of transshipment where traffic is destined to a foreign country. From port of entry in the United States, or an adja- cent foreign country, of traffic from a foreign country to any point in the United States. The "Territories" and "District of Columbia," for juris- dictional purposes, should be treated as "States" as that word is used in the "Commerce Clause of the Constitution of the United States." Hanley vs. K. C. S. Ry. Co., 187 U. S. 617, 23 Sup. Ct. 214, 47 L. Ed. 333. Stoutenburgh vs. Hennick, 129 U. S. 141, 9 Sup. Ct. 256, 32 L. Ed. 637. Matter of Wilson, 10 N. M. 32, 60 Pac. 73, 48 L. R. A., 417. §46. Differences Between Interstate Carriers and Inter- state Transportation. There is a pertinent distinction between an interstate carrier and interstate transportation. The carrier becomes an interstate carrier by reason of its participation in the movement of interstate commerce. The movement as an entirety, of the thing transported from a point in one state 146 AMERICAN COMMERCE ASSOCIATION to a point in another state characterizes it as interstate transportation. The carrier is but a means of interstate transportation or movement of interstate commerce, as contradistinguished from the movement itself of the thing transported. While, to the lay mind, this distinction may appear anomalous, nevertheless it is essential to a compre- hensive analysis of the jurisdiction of the Act to Regulate Commerce and the acts amendatory thereof and supple- mentary thereto, over the movement of the thing trans- ported and over the means or instrumentality by which its transportation is accomplished. The movement or transportation function may involve several independent carriers, each performing its individual portion of the ser- vice, but the character of the transportation itself is deter- minable from its movement as an entirety from its original point of origin to its ultimate point of destination. Thus, if the movement, as an entirety, is from a point in one state to a point without the state, the transportation is interstate in character. This distinction failed, however, prior to the amend- ment of 1906, for, under the interpretation by the courts of the clause "wholly by railroad, or partly by railroad and partly by water when both are used, under a common control, management, or arrangement, for a continuous carriage or shipment," the manner in which the transpor- tation was conducted determined its amenability to the Act rather than the character of the transportation itself. Since the removal of the ambiguity in this language of the original Act, the character of the transportation con- trols instead of the manner of its performance. Thus, except as to transportation partly by rail and partly by water, the common arrangement test has no application. A rail carrier, not otherwise subject to the provisions of the Act, becomes subject to the Act the moment it engages INTERSTATE COMMERCE LAW 147 in or becomes a party in the transportation of interstate commerce, whether it does so by "a. common control, management, or arrangement for continuous carriage or shipment." § 47. Interstate and Foreign Commerce Subject to Act. It was clearly the original intent and purpose of Con- gress to make all interstate transportation wholly by railroad, and such interstate commerce as might be transported partly by railroad and partly by water, sub- ject to the Act, but only when such latter carriage was had under a common control, management, or arrange- ment between the rail and water carriers for a continuous carriage or shipment. In the Matter of Jurisdiction over Water Carriers, 15 I. C. C. Rep. 205. Foreign commerce in transportation is not subject to the Act, except when moving to or from an adjacent for- eign country, and then only as to the part of the transpor- tation performed within the United States. The Supreme Court in referring to the provisions of sec- tion 1 of the Act relating to foreign commerce, said: *Tt would be difficult to use language more unmistakably sig- nifying that Congress had in view the whole field of com- merce (excepting commerce wholly within a state) as well that between the states and territories as that going to or coming from foreign countries." Import Rate Case, 162 U. S. 197, 40 L. Ed. 940 (1896). The Commission's jurisdiction covers that part only of through import or export rates which apply to the inland haul. Re Relative Export and Domestic Rates, 8 I. C. C. Rep. 214, (see also: 10 I. C C. Rep. 55). 148 AMERICAN COMMERCE ASSOCIATION An inland movement, by rail, or by rail and water, of import or export traffic, submits the transportation of such foreign commerce to the jurisdiction of the Commission. Cosmopiolitan Shipping Co. vs. Hamburg-American Packet Co., 13 I. C. C. Rep. 266. The transportation or transmission of messages within the District of Columbia or between points within a terri- tory of the United States is not subject to the Act. The Act as to telephone, telegraph, and cable messages reads : "from one state, territory, or district of the United States to any other state, territory, or district of the United States." Act to Regulate Commerce, section 1. §48. Transportation of Foreign Traffic Between the United States and Adjacent Foreign Country. The Act does not purport to regulate foreign commerce while within an adjacent foreign country, at foreign ports, nor on the high seas. It does apply, however, to all for- eign commerce as soon as it comes through a port of entry in the United States upon through bills of lading destined •to a place in the United States, and the transportation thereof within the United States is performed either by a rail carrier, or partly by rail and partly by water carriers, and to such foreign commerce as comes through a port of entry in an adjacent foreign country upon through bills of lading destined to a place in the United States, and the transportation of which is performed by a rail carrier, or partly by rail and partly by water carriers, and with like effect to such foreign commerce moving from points within the United States to points or ports of transshipment in adjacent and distant foreign countries in the reverse direc- tion. INTERSTATE COMMERCE LAW 149 It may be broadly said that as soon as the foreign com- merce enters, or while it remains within the territorial jurisdiction of the United States, it is subject, in like man- ner as purely interstate traffic, to the provisions of the Act. N. Y., etc., vs. P. R. R. Co. et al., 4 I. C. C. Rep. 447, 3 I. C. Rep. 417. The jurisdiction of the Act applies exclusively to the part of the transportation wholly within the United States — from point of origin in the United States to the port of transshipment, in case of export, and from port of entry to point of destination either in the United States or an adjacent foreign country, in the case of import com- merce. In the Matter of Jurisdiction over Water Carriers, 15 I. C. C. Rep. 205. The Act applies" within the United States, to messages by telegraph, telephone, or cable, to any foreign country. Act to Regulate Commerce, section 1. The Act applies to foreign commerce in its transporta- tion from the point of origin in the United States to the port of transshipment and from the port of entry to its destination in the United States or adjacent foreign coun- try, even though the transportation within the United States be performed wholly within one state. Re Investigation of Acts of Grand Trunk Ry. Co., 3 I. C. C. Rep. 89, 2 I. C. Rep. 496. Traffic transported under a through bill of lading from a point within the United States through a port of trans- shipment to a point in a foreign country is subject to the Act. Re Tariflfs on Export and Import Traffic, 10 I. C. C Rep. 55. T & P. R. Co. vs. I. C. C, 162 U. S. 197, 16 Sup. Ct. 666, 40 L. Ed. 940. T /- /- Re Investigation of Acts of Grand Trunk Ry. Co., 3 I. C. C. Rep. 89, 2 I. C. R. 496. 150 AMERICAN COMMERCE ASSOCIATION The provisions of the Act to Regulate Commerce apply to foreign as well as domestic common carriers engaged in the transportation of passengers or property, for a con- tinuous carriage or shipment, from a place in the United States to a place in an adjacent foreign country, where such foreign carriers are within the territorial jurisdiction of the United States. Moore on Interst. Com. Law, section 39, page 12. The Commission is without jurisdiction over violations of the Act committed wholly or partly in Canada. U. S. vs. Knight, 3 I. C. Rep. 801. The jurisdiction of the Act over foreign commerce is limited to the control of its transportation by rail, or partly by rail and partly by water, to and from the point of trans- shipment. Cosmopolitan, etc., Co. vs. Ham. Am., etc. Co., 13 I. C. C. Rep. 266. See also: Payne vs. Morgan's, etc., Co., 15 I. C. C. Rep. 185. The Commission has no jurisdiction over foreign com- merce, or the rates thereon, from foreign point of origin to port of entry in the United States or an adjacent for- eign country, or from the point of transshipment in the United States, or adjacent foreign country, to its foreign destination. N. Y., etc., Co. vs. Penna. R. R. Co., 4 I. C. C. Rep. 447, 3 I. C. Rep. 417. Senate Report on original Act to Regulate Commerce, 1886 The transportation of any shipment originating in the United States and going to a destination in an adjacent foreign country is subject to the Act within the United States. In Re Investigation of Acts of Grand Trunk Ry. Co., 3 I. C. C. Rep. 89, 2 I. C. Rep. 496. INTERSTATE COMMERCE LAW 151 § 49. Statutory Provisions Relating to Transportation to Ports of Transshipment. The Act applies to the transportation of property- shipped from any place in the United States to a foreign country and carried from such place to a port of transship- ment. Act to Regulate Commerce (Amd. 1910) section 1. The transportation of foreign traffic between the point of origin in the United States and the port of transship- ment, whether performed by railroad, or partly by rail- road and partly by water, is subject to the Act up to the port of transshipment. Act to Regulate Commerce (Amd. 1910) section 1. It is not necessary that the transportation of foreign commerce between the point of origin in the United States and the port of transshipment be through more than one state to bring it within the jurisdiction of the Act. The transportation of the inland movement of a foreign ship- ment may be performed wholly within one state, and the jurisdiction of the Commission still attaches. In Re Investigation of Acts of Grand Trunk Ry. Co., 3 I. C. C. Rep. 89, 2 I. C. Rep. 496. T. & P. Ry. Co. vs. I. C. C, 162 U. S. 197, 16 Sup. Ct. 666, 40 L. Ed. 940. Since it is the nature of the traffic, and not its mere inci- dents, that establishes regulatory jurisdiction, this general test may not be omitted in the case of foreign commerce. The fact that there is an arrangement by which traffic is to be carried as foreign freight is evidenced by the conduct of each of the carriers. Thus, where foreign freight origi- nating at places in the United States is sent to San Fran- cisco, taken by the steamship line and carried to Balboa or Colon, where it is unloaded for transshipment and is 152 AMERICAN COMMERCE ASSOCIATION taken up by the foreign ship and carried to its destination, constitutes foreign commerce. Application S. P. Co., in re Operation S. S. Co., 32 I. C. C. Rep. 690, 698. Curry & Whyte Co. vs. D. &. I. R. R. R. Co., 32 I. C. C. Rep. 162, 171. See also: New Orleans Board of Trade vs. I. C. R. R. Co., 29 I. C. C. Rep. 32. § 50. Statutory Provisions Relating to Transportation of Foreign Traffic from a Foreign Country to a Point in the United States. The Act appHes to the transportation in like manner of property shipped from a foreign country to any place in the United States and carried to such place from a port of entry, either in the United States or an adjacent foreign country. Act to Regulate Commerce, section 1. The jurisdiction of the Act is over the movement of traffic from a foreign country from the port of entry in the United States or in an adjacent foreign country to the point of destination w^ithin the United States, and the jurisdiction lies even though such internal movement be consummated wholly v^ithin the confines of a single state. R. R. Com., etc., vs. Clyde S. S. Co. et al., 5 I. C. C. Rep. 324, 4 I. C. Rep. 120. The transportation of property from foreign countries not adjacent through the United States to an adjacent for- eign country is subject to the Act as to the internal move- ment and tariffs covering such movement must be filed. I. C. C. Confr. Rulings, Bull. No. 6, Ruling No. 294. INTERSTATE COMMERCE LAW 153 See also: Eagle Pass Lumber Co. vs. National Railways of Mexico, 25 I. C. C. Rep. 5. Humboldt S. S. Co. vs. White Pass & Yukon Route, 25 I. C. C. Rep. 136, 140. Fullerton Lumber & Shingle Co. vs. B. B. & B. C. R. R. Co., 25 L C. C. Rep. 376, 378. Young & Son vs. C. P. Ry. Co., Unreported Op. 935. L C. C. vs. H. S. Co., 224 U. S. 474, 484. § 51. When Act to Regulate Commerce Abrogates State Statute. All state statutes and general laws in conflict with the Act are abrogated by its provisions. Gulf, etc., R. Co. vs. Hefiey, 158 U. S. 98, 15 Sup. Ct. 802, 39 L. Ed. 910. McNeill vs. Southern Ry. Co., 202 U. S. 543, 26 Sup. Ct. 722, 50 L. Ed. 1142. T. & P. R. Co. vs. Mugg, 202 U. S. 242, 26 Sup. Ct. 628. 50 L. Ed. 1011. Spratlin vs. 'St. L., etc., Ry. Co., Id Ark. 82, 88 S. W. 836. People vs. Chicago, etc., Ry. Co., 223 111. 581, 79 N. E. 144. Larabee Co. vs. Mo. Pac. Ry. Co., 74 Kans. 808, 88 Pac. 72. Atlanta, etc., R. Co. vs. Home, 106 Tenn. 73, 59 S. W. 134. Fielder vs. Mo., etc., R. R. Co., (Tex. Civ. App.) 42 S. W. 362. All local regulations, private contracts, and terms of franchise charters must give way to the jurisdiction of the Act when in conflict with it, since the power of the federal government to regulate interstate commerce is paramount to state authority. Am. Bankers' Assn. vs. Am. Ex. Co., 15 L C. C. Rep. 15, 21. Congress has by the Act to Regulate Commerce and amendatory and supplementary statutes covered the entire field of rates and rate making as to interstate commerce, which enactments have had the effect of superseding state legislation pertaining thereto, hence such rates cannot be prescribed or controlled by the states, nor can contracts with respect to such rates be subject to state legislation. St. L. L M. & S. Ry. Co. vs. Edwards, 227 U. S. 265. Wabash R. R. Co. vs. Priddy, 101 N. E. 724, 728; 154 AMERICAN COMMERCE ASSOCIATION St. L. & S. F. R. R. Co. vs. Bilby, 130 P. Rep. 1089. Sargent vs. Rutland R. R. Co., 85 A. Rep. 654, 659. St. L. & S. F. R. R. Co. vs. Zickafoose, 135 P. Rep. 406. State vs. C. M. & St. P. Ry. Co., 140 N. W. Rep. 70, 74. National Rice Milling Co. vs. N. O. & N. R. R. Co., 61 So. Rep. 708, 720. \ Chicago, R. I. & P. Ry. Co. vs. Beatty, 126 P. Rep. 736. Jones vs. Southern Express Co., 61 So. Rep. 165, 166. Sullivan vs. M. & R. R. Ry. Co., 142 N. W. Rep. 3. Pace Mule Co. vs. S. A. L. Ry. Co., 76 S. E. Rep. 513, 520. Duluth Superior Milling Co. vs. N. P. Ry. Co., 140 N. W. Rep. 1105. Harring vs. A. C. L. R. R. Co., 16 S. E. Rep. 527. State vs. Western & A. R. R. Co., 76 S. E. Rep. 577. Ezell vs. City of Atlanta, 78 S. E. Rep. 821. M. K. & T. Ry. Co. vs. Hailey, 156 S. W. Rep. 1119, 1121. Ford vs. C. R. I. & P. Ry. Co., 143 N. W. Rep. 249. See also: 1915 Western Rate Advance Case, 35 I. C. C. Rep. 497, 576. Shands vs. S. A. L. Ry. Co., 34 I. C. C. Rep. 214. Truckers' Transfer Co. vs. C. & W. C. Ry. Co., 27 I. C. C. Rep. 275. Memphis Freight Bureau vs. I. C. R. R. Co., 27 I. C. C. Rep. 1, 2. Public Service Commission of Washington vs. W. P. Ry. Co., 26 I. C. C. Rep. 272, 274. Ohio R. R. Com. vs. Worthington, 225 U. S. 101, 108. Southern Ry. Co. vs. Reid, 222 U. S. 424, 442. Southern Ry. Co. vs. Reid & Beam, 222 U. S. 445. Southern Ry. Co. vs. Burlington Lumber Co., 225 U. S. 99. S. P. Co. vs. Campbell, 189 Fed. Rep. 696, 698. T. & P. Ry. Co. vs. R. R. Comm. of La.. 183 Fed. Rep. 1005, 1007. St. L. L M. & S. Ry. Co. vs. Edwards, 127 S. W. Rep. 713, 715. Chicago, etc., R. R. Co. vs. R. R. Comm., 87 N. E. Rep. 1030. Pittsburgh, etc., R. R. Co. vs. R. R. Comm., 86 N. E. Rep. 328. McElwain vs. Railroad, 131 S. W. Rep. lid. State vs. Missouri P. Ry. Co., 115 N. W. Rep. 614. Reid vs. Southern Ry. Co., 69 S. E. Rep. 618. Reid & Beam vs. Southern Ry. Co., 64 S. E. Rep. 874. Atchison T. & S. F. Ry. Co. vs. State, 123 P. Rep. 1065. St. -L. & S. F. R. R. Co. vs. State, 107 P. Rep. 929. Martin vs. Oregon R. & Nav. Co., 113 P. Rep. 1620. Meetze vs. Southern Exp. Co., 74 S. E. Rep. 823, 824. L. & N. R. R. Co. vs. Smith, 134 S. W. Rep. 866, 872. R. R. Comm. of Tex. vs. T. & P. Ry. Co., 140 S. W. Rep. 829, 835. Trinity & B. V. Ry. Co. vs. Geppert, 135 S. W. Rep. 164, 165. Adams Exp. Co. vs. Charlottesville Woolen Mills, 63 S. E. Rep. 8, 9. INTERSTATE COMMERCE LAW 155 § 52. "Interstate Commerce" — What Constitutes. It is the essential character of the commerce, not its mere incidents, that determines whether or not it is inter- state. Interstate commerce begins with the shipment of the article in one state directed and destined to another state. It ends only with the delivery at destination. All com- mon carriers by railroad which participate in its actual transportation, from the time of shipment to the time of delivery, are engaged in the transportation of property from one state to another whether their services be per- formed wholly within one state or in more than one state, whether such services be primary and called "carriage," or incidental, and called "switching," whether the carriers be paid a flat sum per car or a percentage of the through rate, and whether such payment be made directly by a shipper or consignee on the one hand, or by the initial or the final carrier on the other hand. Where the business of through lines of railroad, of which a state carrier forms a part, consists, in a measure, of the transportation of passengers and freight into a state from other states and out of such state into other states, such business is interstate commerce and the transporta- tion thereof subject to the Act. N. &. W. R. vs. Pa. 136 U. S. 114, 34 L. Ed. 394, 10 Sup. Ct. 958, see also 3 I. C. R. 178. James, etc., vs. Cinn., etc., Ry, Co., 3 I. C. R. 682, 4 I. C. C. Rep. 744. Mattingly vs. Pa. Co., 3 I. C. C. Rep. 592, 2 I. C. Rep. 806. Aug. So. Ry. Co. vs. Wrightsville, etc, R. R. Co., 74 Fed. Rep. 522. Ex Parte Koehler, 30 Fed. Rep. 867, 1 I. C. Rep. 28. In Re Annapolis, etc , Ry. Co. (Tex. Civ. App.), 44 S. W. 542. Because a state carrier receives as its share of the total charge, where connecting carriers have made a through route and established joint rates, an amount equal to its 156 AMERICAN COMMERCE ASSOCIATION individually established local rate, is not sufficient to make its carriage of such shipments of purely local character, but, on the contrary, such shipments remain interstate in character and subject to the Act. Ind. Refrs.' Assn. vs. W., etc., R. R. Co., 6 I. C. C, Rep. 378. U. S. vs. Seaboard Ry. Co., 82 Fed. Rep. 563. See also: U. S. vs. Union S. & T. Co., 192 Fed. Rep. 330. 339. Seymour vs. M. L. & T. R. R. & S. S. Co., 35 I. C. C. Rep. 492, 493. Kansas City, Mo., River Nav. Co. vs. C. & O. Ry. Co., 34 I. C. C. Rep. 67, 69. Jurisdiction over Urban Electric Lines, 33 I. C. C. Rep. 536, 638. U. S. vs. Union Stockyard & T. Co., 226 U. S. 286. Aransas Pass Channel & Dock Co. vs. G. H. &. S. A. Ry. Co., 27 I. C. C. Rep. 403. 410. T. & P. Ry. Co. vs. Sargbehm, 150 S. W. Rep. 244, 246. S. P. Terminal Co. vs. I. C. C, 219 U. S. 498. Oregon Ry. & Nav. Co. vs. Campbell, 180 Fed. Rep. 253, 256. Louisville & N. R. R. Co. vs. Coquillard Wagon Works As- signees, 144 S. W. Rep. 1080, 1081. Baldwin Land Co. vs. Columbia Ry. Co., 114 P. Rep. 469. Galveston, H. & S. A. Ry. Co. vs. Wood, 146 S. W. Rep. 538, 541. § 53. Character of Transportation Determined by Con- tract of Shipment. The courts have held that the character of the transpor- tation, w^hether the shipment is intrastate or interstate, will depend upon the contract for transportation. If a contract is entered into for transportation from a point in one state to a point in another state, the interstate charac- ter of the transportation will not change to intrastate or local without a change to that effect in the contract of transportation between the shipper and carrier. Gulf, C. & S. F. Ry. Co. vs. Texas (1907), 204 U. S. 403, 27 Sup. Ct. 360. In a through shipment the determinative feature is the agreement of transportation at the inception of the car- INTERSTATE COMMERCE LAW 157 riage that the shipment will be transported to the point of destination at a through rate. In Re Alleged Unlawful Rates and Practices in Transporta- tion of Cotton, (1899) 8 I. C. C. Rep. 121. Whenever an article destined to a place without the state is started in transit, it becomes the subject of interstate commerce. Ex Parte Koehler (1887), 30 Fed Rep. 867. The Daniel Ball, 10 Wall, (U. S.) 557, 19 L. Ed. 999. Where a commodity is delivered to a common carrier to be carried on a continous voyage or trip to a point beyond the limits of the state where such delivery is made, the character of interstate commerce, or of foreign com- merce, attaches thereto, Houston, etc., Nav. Co. vs. Ins. Co. N. A. (1895), 89 Tex. 1, 32 S. W. 889, 30 L. R. A. 713. See also subsequent section 54, "Character of Transpor- tation Controls, Not Shipper's Intent." § 54. Character of Transportation Controls, Not Shipper's Intent. Prior to the amendment of 1906, a state carrier was not subject to the Act unless, by a common control, manage- ment, or arrangement, it made itself part of a line for the continuous carriage of interstate commerce, and necessa- rily the jurisdiction of the Commission was determinable from the nature of the arrangement for, rather than the character of, the transportation. Since the Hepburn amendment, however, the jurisdiction of the Commission over any all-rail transportation is determined from the character of the transportation itself, and not any arrange- ment under which the transportation is performed. Leonard vs. K. C. S. Ry. Co., 13 I. C. C. Rep. 573. 158 AMERICAN COMMERCE ASSOCIATION The intention of the owners of an interstate shipment to forward the same from its original terminal point to an- other point within the same state, does not make the shipment between such points, carried by a connecting carrier to which the shipment was delivered by the original terminal carrier in accordance with the shippers' instruc- tions, interstate. Nor is such secondary transportation exempt from the authority of the state in which it is per- formed. Gulf C. & S. F. Ry. Co. vs. Texas, 204 U. S. 403, 27 Sup. Ct. 360. See also: Cutting vs. Fla. Ry. & N. Co., 46 Fed. Rep. 641. A shipper's intention to have a shipment, originally made between points wholly within the same state, go on to an ultimate destination outside of the state in the absence of a joint rate from original point of origin to the ultimate destination, does not make it interstate up to the original terminal point, although it is the practice and custom of such shipper to forward his shipments on to points in other states. Mo., etc., R. R. Co. vs. Cape Girardeau, etc., R. R. Co., 1 I. C. C R 30 1 I C R 607 Hope Cotton Oil Co. vs'. Texas & Pac. Ry. Co., 10 I. C. C. R. 696, 703. St. Louis Hay & Grain Co. vs. Chicago, etc., R. R. Co., 11 I. C. C. R. 82. Laning-Harris Co. vs. Mo. Pac. R. R. Co., 13 I. C. C. R. 154. Hope Cotton Oil Co. vs. T. & P. Ry. Co., 12 I. C. C. R. 265. In this connection the question has arisen whether a shipper has a legal right to evade the lawfully published joint rate on a shipment moving between points in ad- joining states by arranging to bill the shipment on the local rates to and from an intermediate point instead of using through billing to the ultimate destination. INTERSTATE COMMERCE LAW 159 The Interstate Commerce Commission passed upon this question in the Kanotex Case, holding that the lawfully- established interstate rate applies to shipments first billed to an intermediate point within the state of origin and then rebilled to the intended destination in an adjoining state, citing in support thereof the Southern Pacific Ter- minal Co., Worthington, and Sabine Tram Co. cases, wherein the Supreme Court of the United States upheld the principle in Coe vs. Errol, 116 U. S. 517, that goods are in interstate, and necessarily as well in foreign, com- merce when they have "started in the course of transpor- tation to another state or delivered to a carrier for transportation." Kanotex Refining Co. vs. I. C. C, 219 U. S. 498. Ohio R. R. Comm. vs. Worthington, 205 U. S. 101. Tex. & New Orl. R. R. Co. vs. Sabine Tram Co., 207 U. S. 111. Compare : C. M. & St. P. Ry. Co. vs. Iowa, 233 U. S. 334. Gulf, Colo. & Santa Fe Ry. Co. vs. Texas, 204 U. S. 403. See also, this volume, chapter V, section 56, "Effect of Temporary Stoppage in Transit," post. § 55. "Common Arrangement" Clause Not Applicable to All- Rail Transportation. Since the amendment of 1906, the original purpose of the Act to apply its provisions to all interstate all-rail transportation has been given effect by the holdings of the Commission that the words "common control, manage- ment, or arrangement," now plainly apply only to trans- portation which is partly by rail and partly by water, and the Act now unmistakably subjects any carrier which engages in the movement of freight by rail from a point in one state to a point in another state, to its provisions. 16—11 160 AMERICAN COMMERCE ASSOCIATION Such was the undoubted intention of the framers of the original Act and such was the suggested interpretation of the courts and the Commission. In Re Jurisdiction over Water Carriers, 15 I. C. C. Rep. 205. Leonard vs. K. C. S. Ry. Co., 13 I. C. C. Rep. 573, 578. See also: T. & P. R. R. Co. vs. I. C. C, 162 U. S. 197, 211, 16 Sup. Ct. 666, 40 L. Ed. 940. Vermont St. Grange vs. B. & L. R. R. Co., 1 I. C. C. Rep. 159, 1 I. C. Rep. 500. B. & A. R. R. Co. vs. B. & L. R. R. Co., 1 I. C. C. Rep. 158, 1 I. C. Rep. 500. § 56. Effect of Temporary Stoppage in Transit. An article remains an article of interstate commerce as long as it is subject to a transit tariff. Where a ship- ment is destined to a point outside of the state, its tem- porary stoppage within the state of its origin will not divest it of its interstate character. When a commodity is purchased in and shipped from one state to a point in another state the transaction is indelibly impressed with the character of interstate com- merce, and the various mutations through which the article passes and the handlings which it undergoes while in tran- sit are merely incidental to the movement. Transit Case, 24 I. C. C. Rep. 340, 351. Hood & Sons vs. D. &. H. C. Co.. 17 I. C. C. Rep. 15. D. & H. C. Co. vs. Commonwealth, 2 I. C. Rep. 222. R. R. Commission of Louisiana vs. St. L. S. W. Ry. Co. et al., 23 I. C. C. Rep. 31, 42. Compare : Doran & Co. vs. N. C. & St. L, Ry. Co., 33 I. C. C. Rep. 523, 530, 531. See also, this volume, chapter V, section 54, "Character of Transportation Controls, Not Shipper's Intent." INTERSTATE COMMERCE LAW 161 § 57. Intraterritorial Transportation. See this volume, chapter V, section 2>2, "Intraterritorial Common Carriers," ante. § 58. Rail-and- Water Transportation. Prior to the taking effect of the Panama Canal Act, the Act to Regulate Commerce did not apply to transportation by water unless the same was used in interstate trans- portation in connection with a railroad, "under a common control, management, or arrangement for a continuous carriage or shipment." Ex Parte Koehler, 30 Fed. Rep. 867. U. S. vs. Wood et al., 145 Fed. Rep. 405. The receiving, forwarding, and delivering of trafific originating in one state and with its prescribed destination in another state by connecting carriers, establishes the existence of a common arrangement between such car- riers for a continuous carriage or shipment. And the principle likewise applies to rail-and-water carriers. Phelps & Co. vs. T. &. P. Ry. Co., 6. I. C. C. Rep. 36, 4 I. C. Rep. 363. The Commission has said that the main purpose of the Act was to regulate transportation by railroad; that the regulation of water lines was merely incidental and col- lateral, and was included in order that the regulation of railroads might be effective and not virtually nullified by arrangements between railroads and water lines. As a fundamental proposition it is obvious that interstate com- merce wholly by water is not subject to the Act. It is equally obvious that interstate commerce partly by rail- road and partly by water, under a common control, man- agement, or arrangement for a continuous carriage or shipment, is subject to the Act. Does the fact that some 162 AMERICAN COMMERCE ASSOCIATION of the commerce transported by a carrier is subject to the Act ipso facto, render all the commerce transported by that carrier, including its port-to-port traffic, subject to the Act? The Commission, after a full and careful consid- eration of this question, prior to the taking effect of the Panama Canal Act, announced that it was constrained to change its former ruling (Conference Ruling 66, of May 4, 1908), and to adopt the view that water carriers were sub- ject to the law only as to such traffic as was transported under a common control, management, or arrangement, with a rail carrier, and that as to traffic not so transported they were exempt from its provisions, citing Re Jurisdic- tion over Water Carriers, 15 I. C. C. Rep. 205. While in some instances the courts have declared that their holdings as to what constitutes a "common arrange- ment" between railroads does not apply to cases where one of the participating carriers is an independent water line, still there can be little doubt that the principle would apply in such latter instance. But the language of the Commission itself fixes with certainty the "common ar- rangement" test it applied where the transportation was partly by rail and partly by water, having repeatedly held that the receipt, forwarding, and delivery of shipments by connecting carriers clearly established the existence of a common arrangement between the carriers for continuous carriage or shipment. Moore on Interst. Com. Law, section 45, page 81. Camden Iron Wks. vs. U. S., 158 Fed. Rep. 561, 563. • Ex Parte Koehler, 30 Fed. Rep. 867, 869. U. S. vs. Colorado, etc., R. R. Co., 157 Fed. Rep. 321, 342. Phelps & Co. vs. Texas & Pac. Ry. Co., 6 I. C. C. Rep. 36. The acceptance by a water carrier of through traffic on through bills of lading issued by a rail carrier is an evi- dence of an arrangement for continuous carriage which INTERSTATE COMMERCE LAW 163 subjects the traffic to the provisions and jurisdiction of the Act to Regulate Commerce. I. C. C. Confr. Rulings Bull. No. 6, Ruling No. 354. Traffic moving by rail from an inland point to a port and thence by water to another port, or moving by water from one port to another port and from the latter port to an inland point by rail, and which does not pass into the possession or custody of the owner or his agent at the port, is interstate traffic, subject to the Act and under the jurisdiction of the Commission. I. C. C. Confr. Rulings Bull. No. 6, Ruling No. 155. Referring to water carriers, as defined in section 1 of the Act, the Commission has held: That if a rail carrier and a water carrier separately pub- lish and file their rates applicable to through shipments, traffic over such route may lawfully be transported under through bills of lading, even though the rates are not joint through rates. That a water carrier may not lawfully accept shipments for transportation on through bills of lading issued by a railroad carrier unless the water carrier has lawfully pub- lished and filed rates applicable thereto. That the acceptance by a water carrier of through traffic on through bills of lading issued by a railroad carrier is an evidence of an arrangement for continuous carriage which subjects the traffic to the provisions and jurisdiction of the Act. That it is not lawful for a rail carrier to issue through bills of lading under an arrangement with a water carrier for continuous carriage, when the water carrier has no lawfully published and filed rates applicable to such trans- portation. 164 AMERICAN COMMERCE ASSOCIATION These holdings are not to be understood as conflicting with Rule 71, Tariff Circular 18-A. I. C. C. Confr. Rulings Bull. No. 6, Ruling No. 353. For extended jurisdiction of the Commission over water carriers since the taking effect of the Panama Canal Act, see, this volume, chapter V, section 16, "Rail and Water Carriers," and section 29, "Inland Water Carriers." See also: Federal Sugar Refining Co. vs. C. of N. J. R. R. Co., 35 I. C. C. Rep. 488. Tampa Board of Trade vs. A. & V. Ry. Co., 33 I. C. C. Rep. 457. Transcontinental Commodity Rates, 31 I. C. C. Rep. 449. Pacific Navigation Co. vs. S. P. Co., 31 I. C. C. Rep. 472. Bowling Green Protective Assn. vs. E. &. B. G. P. Co., 31 I. C. C. Rep. 301, 306. Decatur Navigation Co. vs. L. &. N. R. R. Co., 31 I. C. C. Rep. 281 Tainpa Board of Trade vs. L. & N. R. R. Co., 30 I. C. C. Rep. 377. Lumber Rates, Oregon and Washington to Eastern Points, 29 I. C. C. Rep. 609, 619. Trucker's Transfer Co. vs. C. &. W. C Ry. Co., 27 I. C. C. Rep. 275. Wharfage Facilities at Pensacola, Fla., 27 I. C. C. Rep. 252, 257. Augusta & Savannah Steamboat Co. vs. O. S. S. Co., 26 I. C. C. Rep. 380. Panama Canal Act, sections 2 and 3. Act to Regulate Commerce, section 6. CHAPTER VI. THE ACT TO REGULATE COMMERCE AS AMENDED (CONTINUED). Amplification of Sections (Continued). § 1. Not all Carriers or Transportation Subject to the Act. § 2. Intrastate Transportation when not Subject to the Act. (1) Status of States and Territories under the Commerce Clause of the Constitution of the United States. (2) Effect of Admitting State into Union. § 3. Foreign Transportation not Subject to the Act to Regulate Com- merce. § 4. Water Transportation not Subject to the Act. § 5. Instrumentalities of Transportation within Authority of the Act to Regulate Commerce. § 6. Transportation Services within Authority of the Act to Regulate Commerce, § 7. Duty of Carriers Subject to the Act to Regulate Commerce to Furnish Transportation Services. § 8. Duties of Carriers Subject to the Act to Regulate Commerce tO' Furnish Facilities. § 9. Special Facilities for Handling and Transporting Live Stock. § 10. Through Routes and Joint Rates. (1) Additional Statutory Provisions. § 11. Purpose of the Through Route Requirement § 12. What is a Through Route. § 13. What Constitutes a Joint Rate. § 14. Divisions of Joint Rate. § 15. Jurisdiction of Interstate Commerce Commission over Through Routes and Joint Rates. (1) Circuitous Routes. (2) Voluntary Establishment of Through Routes. (3) The Commission may Compel the Establishment of Through Routes. (4) The Establishment of Through Route with Electric Rail- way may be Required. 165 166 AMERICAN COMMERCE ASSOCIATION (5) Establishment of Through Route with Water Line may be Required. (6) "Railroads of Different Character" Defined. § 16. Joint Rates Compared with Through Rates. § 17. Changes in Rates do not Affect Traffic in Course of Through Transportation. § 18. When Changes in Rates may Affect Traffic in Course of Trans- portation. § 19. Right of Shipper to Reasonable Through Rates. §20. Through Rates — Combination of Joint Rate to Common Points and Local Rate Beyond. §21. Basing Points or Factors for Combination Rates may be Speci- fied. CHAPTER VI. THE ACT TO REGULATE COMMERCE AS AMENDED (CONTINUED). Amplification of Sections (Continued). § 1. Not All Carriers or Transportation to the Act. The Act provides that its provisions shall not apply to the transportation of passengers or property, or to the receiving, delivering, storage, or handling of property wholly within one state and not shipped to or from a foreign country from or to any state or territory, nor shall its provisions apply to the transmission of messages by telephone, telegraph, or cable wholly within one state and not transmitted to or from a foreign country from or to any state or territory. Act to Regulate Commerce, section 1. Congress itself is without power to regulate the com- merce wholly within a state. Constitution of U. S. article 1, section 8, clause 3. Re Jurisdiction over Water Carriers, 15 I. C. C. Rep. 205, 208. The intent and purpose of Congress in the passage and subsequent amendatory and supplemental legislation was to provide for the regulation by the Commission of the whole field of national commerce — that between states and territories, within the territories and the District of Columbia, and going to and coming from foreign coun- tries — except that wholly within a state. T. & P. Ry. Co. vs. I. C. C, 162 U. S. 197, 16 Sup. Ct. 666, 40 L. Ed. 940. 167 168 AMERICAN COMMERCE ASSOCIATION See also: Simpson vs. Shepard, 230 U. S. 352. I. C. C. vs. C. N. O. & T. P. Ry Co.. 167 U. S. 479, 495. Wabash, etc., R. Co. vs. Illinois, 118 U. S. 557. Peik vs. C. & N. W. Ry. Co., 94 U. S. 164. § 2. Intrastate Transportation When Not Subject to the Act. Transportation of passengers or property, by rail or otherwise, when handled or carried wholly within a single state is not subject to the provisions of the Act to Regu- late Commerce, nor has the national Commission jurisdic- tion 'or power to award reparation for discrimination affecting such traffic. N. J., etc., Exchg. vs. Cent., etc., of N. J., 2 I. C. C. Rep. 142, 2 I. C. Rep. 84. Gallogly, etc., vs. Cinn., etc., Ry. Co., 11 I. C. C. Rep. 1. Ex Parte Koehler, 30 Fed. Rep. 867. Cen. Tr. Co., etc., vs. P. S. & N. R. Co., 101 N. Y. Sup. 837. A common carrier whose line is wholly within one state may form a link in a line of interstate commerce, but if its relation to such commerce, or interest in, or liability for the carriage thereof, does not extend beyond the line of the state, it is not within the purview of the Act to Regu- late Commerce. Ex Parte Kehler, 30 Fed. Rep. 867. Since the amendment of 1906, and under the rulings of the Commission, any carrier whose line is wholly within one state but which engages in interstate commerce as defined in the Act, becomes subject thereto. Thus, a state common carrier is only exempt from the operation of the Act when it is engaged in that part of its business the transportation of which begins and terminates within the same state. Employers' Liability Case, 207 U. S. 463, 28 Sup. Ct. 141, 52 L. Ed. 297. INTERSTATE COMMERCE LAW 169 Ft. W. & D. C. Ry. Co. vs. Whitehead, 6 Tex. Civ. App. 595, 26 S. W. 172. U. S. vs. Chicago, etc., R. R. Co., 81 Fed. Rep. 783. I. C. C. vs. Bellaire, etc., Co., 11 Fed. Rep. 942. Haines vs. Chicago, etc., Ry. Co., 13 I. C. C. Rep. 214. Rogers & Co. vs. P. & R. Ry. Co., 12 I. C. C. Rep. 308. Parks vs. Cinn., etc., R. R. Co., 10 I. C. C. Rep. 47. Where the carriage or handling of a shipment is per- formed independently and wholly within the same state, and the carrier performing such state service has nothing to do with the further transportation of the shipment without the state, the carriage wholly within the state does not become subject to the jurisdiction of the Com- mission. K. & I. Br. Co. vs. Louisville, etc., R. R. Co., 37 Fed. Rep. 567, 2 I. C. Rep. 162 (Appeal dismissed by 149 U. S. Ill, 13 Sup. Ct. 1048, 37 L. Ed. 964). Interst. S. Y. Co. vs. Indpls. Un. Ry. Co. et al., 99 Fed. Rep. 472. N. J., etc., Ex. vs. Central, etc., of N. J., 2 I. C. C. Rep. 142, 2 I. C. Rep. 84. U. S. vs. Chicago, etc., Co., 81 Fed. Rep. 783. I. C. C vs. Bellaire, etc., Ry. Co., 11 Fed. Rep. 942. F. W. & D. C. Ry. Co. vs. Whitehead, 6 Tex. Civ. App. 595, 26 S. W. 172. Ex Parte Koehler, 30 Fed. Rep. 867, 1 I. C. Rep. 28. Mo., etc., Co. vs. Cape Girardeau, etc., Ry. Co., 1 I. C. C. Rep. 30. 1 I. C. Rep. 607. In the Minnesota Rate Case (230 U. S. 352) the power of the state to regulate transportation between points within the state was clearly defined and upheld, to be exer- cised by the state in such manner as not to invade the carriers' rights under the Fourteenth Amendment. The court said: "If this authority of the state be restricted, it must be by virtue of the paramount power of the Congress over interstate commerce and its instruments; and, in view of the nature of the subject, a limitation may not be implied because of a dormant federal power, that is, one which has not been exerted, but can only be found in the actual exercise of federal control in 170 AMERICAN COMMERCE ASSOCIATION such measure as to exclude this action by the state which otherwise would clearly be within its province." Simpson vs. Shepard, 230 U. S. 352. I. C. C. vs. C. N. O. & T. P. Ry. Co., 167 U. S. 479. Wabash, etc., Ry. Co. vs. Illinois, 118 U. S. 557. Peik vs. N. W. Ry. Co., 94 U. S. 164. So. Ry. Co. vs. Reid, 222 U. S. 424, 435. In the Reid Case the Supreme Court divided the power of the state over the general subject of commerce into three classes: (1) "Those in which the power of the state is exclusive;" (2) "Those in which the states may act in the absence of legislation by Congress;" and (3) "Those in which the action of Congress is exclusive and the state cannot act at all." See also: Western Union Tel. Co. vs. James, 162 U. S. 650, 655. Covington, etc., Bridge Co. vs. Kentucky, 154 U. S. 204, 209. The Supreme Court, in discussing the control of the state over commerce, had previously said: "Every person, every corporation, everything within the territorial limits of a state is, while there, subject to the constitutional authority of the state government. Clearly under this rule Mississippi may govern this corporation, as it does all domestic corpo- rations, in respect to every act and everything within the state which is the lawful subject of state govern- ment. It may, beyond all question, by the settled rule of decision in this court, regulate freights and fares for business done exclusively within the state, and it would seem to be a matter of domestic concern to pre- vent the company from discriminating against persons and places in Mississippi. So, it may make all need- ful regulations of a police character for the govern- ment of the company while operating its road in that jurisdiction. In this way it may certainly require the company to fence so much of its road as lies within the state; to stop its trains at railroad crossings; to slacken speed while running in a crowded thorough- fare; to post its tariffs and time-tables at proper places, and other things of a kindred character affect- INTERSTATE COMMERCE LAW 171 ing the comfort, the convenience, or the safety of those who are entitled to look to the state for protec- tion against the wrongful or negligent conduct of others. * * * "From what has thus been said, it is not to be in- ferred that this power of limitation or regulation is itself without limit. This power to regulate is not a power to destroy, and limitation is not the equivalent of confiscation. Under pretence of regulating fares and freights, the state cannot require a railroad corpo- ration to carry persons or property without reward; neither can it do that which in law amounts to a tak- ing of private property for public use without just compensation or without due process of law." Stone vs. Farmers Loan & Trust Co., 116 U. S. 307. (1) Status of States and Territories Under the Com- merce Clause of the Constitution of the United States. Territories and the District of Columbia are to be re- garded as states in the sense that that word is used in the commerce clause of the Constitution, otherwise inter- nal commerce within a territory, between a state and a territory, would be beyond the reach of any legislative authority, either state or federal. Art. 1, section 8, cj. 3, Const, of U. S. Hanley vs. K. C. S. Ry. Co., 187 U. S. 617, 23 Sup. Ct. 214, 47 L. Ed. 333. Stoutenburgh vs. Hennick, 129 U. S. 141, 9 Sup. Ct. 256, 32 L, Ed. 637. Re Hennick, 5 Mackey (D. C.) 489. Matter of Wilson, 10 N. M. 32. 60 Pac. Rep. 73. Wilson vs. Rk. Cr. Ry. Co., 7 I. C. C. Rep. 83. Re Wilson, 8 Mackey (D. C.) 341, 12 L. R. A. 624. Neil vs. Wilson, 14 Oreg. 410, 12 Pac. Rep. 810. (2) Effect of Admitting State Into Union. The juris- diction of the Act and the authority of the Commission automatically cease as to intraterritorial commerce when a territory is admitted to statehood in the Union, and the Commission is at once without authority to act in cases of 172 AMERICAN COMMERCE ASSOCIATION complaint filed with the Commission prior to such admis- sion to statehood. Koenigsberger vs. Richmond Silver Min. Co., 158 U. S. 48, 15 Sup. Ct. 751, 39 L. Ed. 892. McNulty vs. Batty, et al., 10 How. (U. S.) 173, 13 L. Ed. 333. Freeborn, et al., vs. Smith, et al., 2 Wall. (U. S.) 173, 17 L. Ed. 922. Hussey vs. C, etc., Ry. Co., 13 I. C. C. Rep. 366. Chandler Cotton Oil Co. vs. Ft. S. & W. R. R. Co., 13 I. C. C. Rep. 473. § 3. Foreign Transportation Not Subject to the Act to Regulate Commerce. The jurisdiction of the Commission is over only that part of the through import or export rate which applies to' the inland transportation of the carrier, and it has not jurisdiction or authority over non-adjacent foreign des- tined traffic after it leaves the seaboard point of transship- ment or non-adjacent foreign originating trafific before it reaches a port of entry on the American seaboard, nor over foreign destined traf^c originating at a seaport and involving no inland transportation. Import Rate Case, 162 U. S. 197, 40 L. Ed. 940. Cosmopolitan, etc., Co. vs. Hamburg American, etc., Co., 13 I. C. C. Rep. 266. See, this volume, chapter V, section 26, "Foreign Rail- roads as Common Carriers"; section 32, "Ocean Car- riers"; section 45, "Interstate and Foreign Commerce Sub- ject to the Act"; section 46, "Transportation of Foreign Traf^c Between the United States and Adjacent Foreign Country"; section 47, "Statutory Provisions Relating to Transportation to Ports of Transshipment"; section 48, "Transportation of Foreign Traffic from a Foreign Coun- try to a Point in the United States." INTERSTATE COMMERCE LAW ' 173 § 4. Water Transportation Not Subject to the Act. See, this volume, chapter V, section 16, "Rail-and- Water Carriers," and section 29, "Inland Water Car- riers." Act to Regulate Commerce, section 1. § 5. Instrumentalities of Transportation Within Authority of the Act to Regulate Commerce. The Act to Regulate Commerce specifies, defines, and enumerates as subject to its provisions the following in- strumentalities of transportation and shipping: Railroads. Bridges and ferries used or operated in connection with any railroad. Railroads in use by any corporation operating a rail- road, whether owned or operated under a contract, agree- ment, or lease. Switches, spurs, tracks, and terminal facilities of every kind used or necessary in the transportation of the persons or property designated in the Act. Freight depots, yards, and grounds used or necessary in the transportation or delivery of any of said property. Cars and other vehicles, and all instrumentalities and facilities of shipment or carriage, irrespective of owner- ship or of any contract, express or implied, for the use thereof. Vessels and other water bottom carriers designated in the amendatory portions of the Panama Canal Act. Act to Regulate Commerce, sections 5 and 6. § 6. Transportation Services Within Authority of the Act to Regulate Commerce. The provisions of the Act to Regulate Commerce bring within its jurisdiction and authority all services in connec- 174 AMERICAN COMMERCE ASSOCIATION tion with the receipt, delivery, elevation, and transfer in transit, ventilation, refrigeration or icing, storage, and handling of property transported. Act to Regulate Commerce, section 1. § 7. Duties of Carriers Subject to the Act to Regulate Commerce to Furnish Transportation Services. The provisions of the Act to Regulate Commerce re- quire the carriers to furnish transportation service as defined in the Act upon reasonable and just terms, equally and impartially, to all entitled thereto. The terms of the Act require such carriers to establish through routes and just and reasonable rates applicable thereto. Act to Regulate Commerce, section I. § 8. Duty of Carriers Subject to the Act to Regulate Com- merce to Furnish Facilities. Under the common law^ it is the duty of the carrier to furnish adequate and essential facilities necessary and in- cidental to the services performed by the carrier. For a long time the Interstate Commerce Commission vvras with- out power to enforce this common law requirement, even though the subject was within the Commission's con- structive jurisdiction. Truck Farmers, etc., Assn. vs. N. E. R. R. Co., 6 I. C. C. Rep. 295. Knudsen-Ferguson, etc., vs. M. C. R. R. Co., 148 Fed. Rep. 968. Consl. & F. Co. vs. S. P. R. R. Co., 10 I. C. C. Rep. 590. Re Transportation, etc., of Fruit, 11 I. C. C. Rep. 129. R. R. Comm., etc., vs. L. & N. R. R. Co., 10 I. C. C. Rep. 173. See also: Atlantic Coast Line R. R. Co. vs. Garaty, 166 Fed. Rep. 10. The provisions of the Act to Regulate Commerce re- INTERSTATE COMMERCE LAW 175 quire that every common carrier subject thereto shall pro- vide reasonable facilities for the operation of through routes with reasonable rules and regulations with respect to the exchange, interchange, and return of cars used therein, and for the operation of such through routes, and providing for reasonable compensation to those entitled thereto. Act to Regulate Commerce, section 1. The third section of the Act requires such carriers to afford all reasonable, proper, and equal facilities for the interchange of traffic between their respective lines, and for the receiving, forwarding, and delivering of passen- gers and property to and from their several lines and those connecting therewith. Act to Regulate Commerce, section 3, par. 2. In the Five Per Cent Case, the Commission clearly stated its attitude toward the development of, and neces- sity for, adequate transportation service. It said : "The means of transportation are fundamental and indispensable agencies in our industrial life and for the common weal should be kept abreast of public re- quirements," for "the public interest demands not only the adequate maintenance of existing railroads, but a constant increase of our transportation facilities to keep pace with the growth and requirements of our commerce." The carriers must furnish, if they are to fulfill the funda- mental purpose of the Act, an efficient transportation ser- vice, including adequate and necessary facilities, at reasonable rates. Five Per Cent Case, 31 I. C. C. Rep. 351 and 32 I. C. C. Rep. 325. Penn. Paraffine Works vs. Penn. R. R. Co., 34 I. C. C. Rep. 179. Vulcan Coal & Mining Co. vs. I. C. R. R. Co., 33 I. C. C. 16—12 Rep. 52. 176 AMERICAN COMMERCE ASSOCIATION It has also been held by the courts that whatever trans- portation services or facilities the law requires the carrier to supply, the carrier has a right to furnish. In other words, the carrier is not compelled by law to use the facilities of others either by lease or otherwise. Atchison, etc., Ry. Co. vs. U. S., 231 U. S. 199. Arlington Heights Fruit Exchange vs. S. P. Co., 20 I. C. C. Rep. 106. See also: Pittsburgh & Southwestern Coal Co. vs. W.-P. T. Ry. Co., 31 I. C. C. Rep. 660, 662. Merchants & Mfrs. Assn. vs. B. & O. R. R. Co., 30 I. C. C. Rep. 388, 393. Lumber Rates through Ohio River Crossings, 29 I. C. C. Rep. 38, 39. Penn. Paraffine Works vs. P. R. R. Co., 34 I. C. C. Rep. 179, 190. Car Spotting Charges, 34 I. C. C. Rep. 609, 617. Vulcan Coal & Mining Co. vs. I. C. R. R. Co., 33 I. C. C. Rep. 52. St. L. S. & P. R. R. Co. vs. P. & P. W. Ry. Co., 26 I. C. C. Rep. 226, 234. Southwestern Mo. Millers' Club vs. St. L. & S. F. R. R. Co., 26 I. C. C. Rep. 245, 252. Protection of Potato Shipments in Winter, 26 I. C. C. Rep. 681, 684. Arlington Heights Fruit Exchange vs. S. P. Co., 20 I. C. C. Rep. 106. § 9. Special Facilities for Handling and Transporting Live Stock. The statutory requirement in the Act to Regulate Com- merce, since amendment of 1906, that the carrier shall furnish the necessary facilities for the receipt, transporta- tion, delivery, and handling of property transported, in- cludes the obligation on the part of the carrier to furnish such designated special facilities as the particular nature of the property transported may require. Thus, in the case of the receipt, care, handling, transporting, and deliv- ery of live stock, the carrier is required to furnish adequate and suitable facilities therefor, such as pens, chutes, yards. INTERSTATE COMMERCE LAW 177 watering and feeding facilities, inspectors, and live stock cars. The carrier may not assess charges in addition to the legitimate tariff charges for receiving or delivering live stock through yards provided for that purpose. This duty the common law placed upon the carrier even before the passage of the original Act to Regulate Commerce, and the amendment of the Act in 1906 was but a detail in the statutory expression of the common law. Covington Stk. Yds Co. vs. Keith, 139 U. S. 128, 35 L. Ed. 73. N. P. R. R. Co. vs. Commercial, etc., of Chicago, 123 U. S. 127, 31 L. Ed. 287. If a carrier offers to and provides rates for the trans- portation of live stock, such as sheep and hogs in double deck cars, it is under the duty to furnish such special equip- ment, and a state regulation requiring a carrier to furnish double deck cars ,for the transportation of sheep is a rea- sonable requirement and constitutional. Pa. Paraffine Works vs. P. R. R. Co., 34 I. C. C. Rep. 179. Emerson vs. St. L. & R. Co., Ill Mo. 161. A carrier may not own or exercise any control over an independent stock yards at a given point, but if such yards are in fact the point to which such carrier transports and unloads stock, such yards will be deemed the carrier's live stock depot at that point. Cattle Raisers' Assn. vs. Chicago, etc., R. R, Co., 11 I. C. C. Rep. 277. If the carrier has provided special yards as a live stock depot at a particular city, such carrier may not be com- pelled, under the provisions of the Act to Regulate Com- merce, to make delivery of live stock shipments at some other yard or point in that city, even though it connects with the line of the carrier on which such other yards are situated. 178 AMERICAN COMMERCE ASSOCIATION Central Stock Yds. Co. vs. N. &. P. R. R. Co., 118 Fed. Rep. 113. Central Stock Yds Co. vs N. & P. R. R. Co., 192 U. S. 68, 48 L. Ed. 565. § 10. Through Routes and Joint Rates. Section 1 of the Act to Regulate Commerce requires every common carrier subject to the Act to "estabHsh through routes and just and reasonable rates applicable thereto and to provide reasonable facilities for operating such through routes and to make reasonable rules and regulations w^ith respect to the exchange, interchange, and return of cars used therein and for the operation of such through routes and providing for reasonable compensation to those entitled thereto." The requirement to establish through routes was incor- porated into the Act by the amendment of June 29, 1906, and the words "and to provide reasonable facilities for operating such through routes and providing for reason- able compensation to those entitled thereto," were added by the amendment of June 18, 1910. Act to Regulate Commerce, section 1. (1) Additional Statutory Provisions. In addition to the above requirements in section 1 of the Act, section 15 empowers the Commission, after hearing, on a complaint or upon its own initiative without complaint, to establish through routes and joint classifications and joint rates as the maximum to be charged, including terms and condi- tions under which such through routes shall be operated. The Commission is also authorized to prescribe the divi- sions of such joint rates as well as the terms and conditions under which such through routes shall be operated when- ever the carriers themselves shall refuse or neglect to estabHsh voluntarily such through routes or joint rates, INTERSTATE COMMERCE LAW 179 this provision also applying when one of the connecting carriers is a water line. The section goes on to provide that the Commission shall not, however, establish any through route, classification, or rate between street elec- tric passenger railways, not engaged in the general busi- ness of transporting freight in addition to their passenger and express business and railroads of a different character, nor shall the Commission have the right to establish any route, classification, rate, fare, or charge when the trans- portation is wholly by water. Transportation by water, affected by the Act, is subject to the laws and regulations applicable to transportation by water and the provisions of the Panama Canal Act. The power of the Commission to prescribe through routes is limited to the extent that in establishing such through routes the Commission may not require any com- mon carrier, without its consent, to embrace in such route substantially less than the entire length of its railroad and of any intermediate railroad operated in conjunction and under a common management or control therewith, which lies within the termini of such proposed through route, unless to do so would make such through route unreasonably long as compared with a practicable through route which could otherwise be established. Act to Regulate Commerce, section IS. The sixth section of the Act authorizes the Commission to establish through routes and maximum joint rates be- tween and over rail and water lines having physical con- nection and to de,termine all the terms and conditions under which such lines shall be operated in the handling of the traffic moving or to be moved via such through route. Act to Regulate Commerce, section 6. 180 AMERICAN COMMERCE ASSOCIATION It is further provided in section 6 of the Act that if any rail carrier subject to the Act enters into arrangements with any water carrier operating from a port in the United States to a foreign country through the Panama Canal or otherwise for the handHng of through business between interior points of the United States and such foreign coun- try, the Commission may require such railway to enter into similar arrangements with any or all other lines of steamships operating from said port to the same foreign country. Act to Regulate Commerce, section 6. The prohibition of section 4 applies with equal force to the charging of a greater compensation via a through route than the aggregate of the intermediate rates. Act to Regulate Commerce, section 4. § 11. Purpose of the Through Route Requirement. It is a rule of statutory construction that sentences, phrases, or even sections of a law, may not be given a segregated meaning but must be read and construed in conjunction with the whole of the statute of which they are a part. Thus, as we read the first section of the Act to Regulate Commerce in conjunction with its other sec- lions, we find a cohesive effect in the aggregate given to its requirements. The purpose of the section relating to through routes is to require the railroads subject to the Act to so unite themselves that they will constitute one national system, for by these provisions of the Act they must establish through routes, keep such routes open and in operation, furnish the necessary facilities for trans- portation, make reasonable and proper rules of practice as between themselves and the shippers and as between each other. Mo. and 111. Coal Co. vs. 111. Cent. R. R. Co., 22 I. C. C. Rep. 39, 46. INTERSTATE COMMERCE LAW 181 § 12. What Is a Through Route? The words "through route" contemplate an agreement, voluntary, or under the requirement of the Commission, of two or more carriers to provide a line made up of all or parts of their lines between certain points Such a through route is a unit of transportation movement and such a common arrangement may be evidenced by the issuing of through bills of lading for continuous carriage thereunder or the publication of through rates therefor. A through route in the sense in which this term is gen- erally used embraces two or more lines of railroad moving traffic under conventional agreements at rates or fares made applicable for through service between designated points. The phrase "common arrangement" has been inter- preted by the courts to mean an "agreement or under- standing between connecting carriers respecting the transportation of property and the charges and divisions to be made therefor." A rail carrier, by participating in a through route be- tween two termini, only one of which is reached by its rails, in fact serves both termini, and may compete within the meaning of section 5 with steamers operating as part of another through route between the same termini. Peninsular & Occidental S. S. Co., 37 I. C. C. Rep. 432, 434. The Ogden Gateway Case, 35 I. C. C. Rep. 131, 142. Kansas City, Mo., and Kansas City, Kans., vs. Kansas City Viaduct & Term. Ry. Co., 24 I. C. C. Rep. 22, 26. Flour City S. S. Co. vs. Leh. Val. R. R. Co., 24 I. C. C. Rep. 179. Augusta & Savannah S. S. Co. vs. O. S. S. Co. of Savannah, 26 I. C. C. Rep. 380, 383. Commercial Club of Omaha vs. A. & S. R. R. Co., 27 I. C. C. Rep. 302, 318. People's Fuel & Supply Co. vs. G. T. R. R. Co., 27 I. C. C. Rep. 24, 28. Mutual Transit Co. vs. U. S., 178 Fed. Rep. 664, 666. C. B. & Q. R. R. Co. vs. U. S., 157 Fed. Rep. 830, 833. 182 AMERICAN COMMERCE ASSOCIATION Citizens of Somerset, etc., vs. Wash. Ry. & Elec. Co., 22 I C. C Rep. 187. 191. Truckers Transfer Co. vs. C. & W. C. Ry. Co., 21 I. C. C. Rep. 275. A through route may now be estabHshed with a water carrier under the construction given to the provisions of the Panama Canal Act. Panama Canal Act, see Appendix. Federal Sugar Refining Co. vs. C. of N. J. R. R., 35 I. C. C. Rep. 488. Pacific Navigation Co. vs. S. P. Co., 31 I. C. C. Rep. 472. Decatur Navigation Co. vs. L. & N. R. R. Co., 31 I. C. C. Rep. 281. Augusta & Savannah S. S. Co. vs. Ocean S. S. Co., 26 1. C. C. Rep. 380, 384. See also, this chapter, section 15, sub-(5), "Establish- ment of Through Route May Be Required with Water Line," post. § 13. What Constitutes a Joint Rate. A joint rate is construed to mean a rate that extends over the lines of two or more carriers and is made by agreement between such carriers. The provisions of section 1 of the Act to Regulate Com- merce, requiring carriers to establish through routes, must be read in conjunction with the latter part of section 3 and section 15, and that the duty thus imposed may not be subjected to too narrow a construction, these provisions must also be read with regard to the intendment of the Act as a whole. I. C. C. TariflF Circular 1&-A, page 3, par. 4. Flour City S. S. Co. vs. Lehigh Valley R. R. Co., 24 I. C. C. Rep. 179, 185. § 14. Division of Joint Rate. The Commission is empowered by the Act to prescribe the divisions of joint rates applicable to through routes established by order of the Commission, or otherwise, INTERSTATE COMMERCE LAW 183 where the participating carriers fail to agree among them- selves upon the apportionment of such rates. In the Galveston Case, decided shortly after the amend- ment of 1906, the Commission, in giving construction to this part of the statute, expressed doubt as to its power to establish divisions of rates not fixed by it. Act to Regulate Commerce, section 15. In re Wharfage Charges, Galveston Wharf Co., 23 I. C. C. Rep. 535, 547. Giving to the words "or otherwise" their full legal significance, as they appear in the statute, no other conclu- sion can be reached but that the jurisdiction of the Com- mission is complete over the division of joint rates where there is a failure of the carriers to agree upon their appor- tionment. It was said in the Star Grain & Lumber Company Case, "that the phrase, 'the just and reasonable proportion of such joint rate to be received by each carrier,' necessarily implies that it is the duty of the Commission in fixing divisions to take into consideration all of the circum- stances, conditions, and equities that are necessary to arrive at what is a fair and proper adjustment of the sit- uation as between the two roads, and precludes the idea that joint rates must be divided between the participating carriers on a mileage or any other fixed basis." Star Grain & Lumber Co. vs. A. T. & S. F. Ry. Co., 14 I. C. C. Rep. 364, 370. It is well settled that a disagreement between carriers as to divisions does not justify cancellation of joint rates or withdrawal of through routes, nor is a disagreement between carriers as to division of rates in itself any justi- fication for an increase in rates. Thus, in the Lake-and- Rail cases, it was held that the mere fact of disagreement between carriers as to divisions did not prove that the 184 AMERICAN COMMERCE ASSOCIATION joint rates were unreasonable or that the routes over which they applied should be abandoned. On the other hand, the Commission held that the carriers in interest should have made further endeavor to agree. Lake & Rail Rate Cancellations, 38 I. C. C. Rep. 201, 202. Passenger Fares from Milwaukee, Wis., 38 I. C. C. Rep. 98, 100. Coal to Ky. points, 37 I. C. C. Rep. 194. 197. In re Lumber Rates, 27 L C. C. Rep. 6. Truckers Transfer Co. vs. C. &. W. C. Ry. Co., 21 L C. C. Rep. 275, 279. Rates on Corn Milled at Oneonta, N. Y., 27 L C. C. Rep. 367, 369. Board R. R. Commissioners of Montana vs. D. &. R. G. R. R. Co., 27 L C. C. Rep. 522, 524. Chamber of Commerce, Newport News vs. Sou. Ry Co. 23 I. C. C. Rep. 345, 356. Germain vs. N. O. & N. E. R. R. Co., 17 L C. C. Rep. 22, 24. Louisville Board of Trade vs. L C. & S. Tract. Co., 34 I. C. C Rep. 640. Coal Rates from Oak Hills, Colo., 35 I. C. C. Rep. 456. Rates on Lumber & Other Forest Products, 30 \. C. C. Rep. 371, 372. People's Fuel & Supply Co. vs. G. T. W. Ry. Co., 30 L C. C. Rep. 657. New Mexico Coal Rates, 28 L C. C Rep. 328. Missouri River-Illinois Wheat and Flour Rates, 27 L C. C Rep. 286. Texas Cement Plaster Co. vs. St. L. &. S. F. R. R. Co., 26 L C. C. Rep. 508, 510. Advances on Ground Iron Ore, 26 I. C. C. Rep. 675. West Pullman and Southern Railroad Co. case, 37 I. C. C. Rep. 408, 415. Delray Salt Co. vs. C. St. P. M. & O. Ry. Co., 16 I. C. C. Rep. 507, 511. Celina Mill & Elevator Co. vs. St. L. & S. W. Ry. Co., 15 I. C. C. Rep. 138, 142. Gentry vs. A. T. & S. F. Ry. Co. 13 I C. C. Rep. 171, 172. Star Grain & Lumber Co. vs. A. T. & S. F. Ry. Co., 14 I. C. C Rep. 364, 370. Sou. Pac. Co. vs. I. C. C, 200 U. S. 536, 553, 50 L. Ed. 585, 593. See also: Memphis & L. R. R. Co. vs. Sou. Exp. Co., 117 U. S. 1, 29 L. Ed. 791. Reno Grocery Co. vs. S. P. Co., 23 I. C. C. Rep. 400, 401. Stacy & Sons vs. O. S. L. R. R. Co., 20 I. C. C. Rep. 136, 139. Beekman Lumber Co. vs. M. C. R. R. Co., 21 I. C. C. Rep. 276, 279. Re Divisions of Joint Rates on Coal, 22 I. C. C. Rep. 51, 53. Youngblood vs. T. &. P. Ry. Co., 21 I. C. C. Rep. 569. INTERSTATE COMMERCE LAW 185 Fla. Mer. Agency vs. P. R. R. Co., 21 T. C. C. Rep. 85, 87. Board of Trade of Chicago vs. A. C. R R. Co., 20 I. C. C. Rep. 504. Re Restricted Rates, 20 I. C. C. Rep. 426, 429, 432. Loup Creek Colliery Co. vs. Va. Ry. Co., 12 I. C. 0. Rep. 471, Compare In re Enterprise Transp. Co., 11 I. C. C. Rep. 587. Clark Co. vs. L. S. & M. S. Ry. Co., 11 I. C. C. Rep. 558. Commer. Club of Omaha vs. C. R. I. & P. Ry. Co., 6 I. C. C. Rep. 647. In re Application of F. W. Clark, 3 I. C. C Rep. 649, 2 I. C. C. Rep. 797. § 15. Jurisdiction of Interstate Commerce Commission Over Through Routes and Joint Rates. The power of the Commission to establish through routes under the statutory provisions can be exercised only over carriers subject to the Act to Regulate Com- merce. Primarily the Act requires the carrier subject thereto, in the first instance, to establish through routes and joint rates, and by section 15 of the Act empowers the Commission to establish such through routes and joint rates upon the failure of the carriers so to do. The Com- mission must first be applied to in the matter of the failure of the carriers to establish and maintain through routes and joint rates and the unjust discrimination re- sulting therefrom, before the courts may entertain juris- diction, either criminally or civilly. This jurisdiction ex- tends to and includes a water line when it is one of the carriers involved in the through route. The Panama Canal Act has extended the jurisdiction of the Commission over transportation by water and em- powers the Commission to establish through routes and maximum joint rates between and over rail and water lines, determining all the terms and conditions under which 186 AMERICAN COMMERCE ASSOCIATION such lines may be operated in the handHng of through traffic. Truckers Transfer Co. vs. C. &. W. C. Ry. Co., 27 I. C. C. Rep. 275. Augusta & Savannah S. S. Co. vs. O. S. S. Co., 26 I. C. C. Rep. 380. Aransas Pass Channel & Dock Co. vs. G. H. & S. A. Ry. Co., 27 I. C. C. Rep. 403, 414. Wichita Falls System John Conl Rate Ca^es, 26 I. C. C. Rep. 215 222 U. S. 'vs. Pacific & A. R. & N. Co., 228 U. S. 87, 33 Sup. Ct. 443, 447. Missouri & Illinois Coal Co. vs. I. C. R. R. Co., 22 I. C. C. Rep. 39. Int. Com. Com. vs. Humbolt S. S. Co., 224 U. S. 474, 483; 56 L. Ed. 849. Re Unreasonableness of rates on meats, 23 I. C. C. Rep. 656. Sunderland Bros. vs. St. L. & S. F. R. R. Co., 23 I. C. C. Reo. 259, 261. Compare: C. & C. Tract. Ca vs. B. & O. S. W. R. R. Co.. 30 I. C. C. Rep. 486, 490. (Order of Commission enjoined in B. & O. S. W. R. R. Co. vs. U. S., 195 Fed. Rep. 962.) . Int. Com. Com. vs. B. & O. R. R. Co. 225 U. S. 326, 57 L. Ed. 1107. Under the law, prior to the amendment, it was held, in the Northern Pacific Coal Case, that the non-existence of a reasonable or satisfactory through route was jurisdic- tional, but where there was such through route the Com- mission had no power to order another route established. Int. Com. Com. vs. No. Pac. R. R. Co., 216 U. S. 538; 54 L. Ed. 608. See also: Pac. Coast Lumber Mfrs. Asso. vs. N. P. Ry. Co., 14 I. C. C Rep. 51, 53. Spring Hill Coal Co. vs. Erie R. R. Co., 18 I. C. C. Rep. 508. Southern Cal. Sugar Co. vs. S. P. L. A. & S. L. R. R. Co., 19 I. C. C. Rep. 6. Cedar Hill Coal & Coke Co. vs. Colorado & Southern Ry. Co.. 17 I. C. C. Rep. 479. Enterprise Fuel Co. vs. Penn. R. R. Co., 16 I. C. C. Rep. 219. (See 12 I. C. C. Rep. 326). (1) Circuitous Routes. The limitation imposed by the INTERSTATE COMMERCE LAW 187 Act upon the Commission's power to establish through routes was fixed by the amendment of 1910, providing that no carrier, without its consent, may be required to em- brace in a through route substantially less than its entire length or of any intermediate railroad operated in con- junction with it or under a common management, owner- ship, or control. This limitation, however, it has been held, may not be used to create unjust discrimination and violations of other provisions of the Act. Act to Regulate Commerce, section 15. Hughes Creek Coal Co. vs. K. & M. R. R. Co., 29 I. C. C Rep. 671, 679. The effect of this limitation on the Commission's power was considered in the Meridian Fertilizer Factory Case, where it was said: "The contention most strongly urged by this de- fendant in opposition to a change in the rates from Shreveport is that 'a reduction thereof would short- haul our lines and divert the trafific from the industries located thereon to other channels and would violate that equitable provision of the Act to Regulate Com- merce (section 15) which limits the Commission in the establishment of joint through rates to the maxi- mum haul of the carriers.' Section 15, however, merely ordains that between two given points a car- rier shall not be deprived of a haul which it is capable of providing by a reasonably direct route." Meridian Fertilizer Factory vs. T. & P. Ry. Co., 26 I. C. C. Rep. 351. 352. With the exception of this limitation the power of the Commission, while primarily discretionary, seems com- plete over through routes and joint rates. Under section 15 of the Act, the Commission is authorized to establish through routes and joint rates whenever the carriers themselves have refused or neglected to voluntarily estab- 188 AMERICAN COMMERCE ASSOCIATION lish such through routes or joint classification or joint rates, and this provision likewise applies when one of the connecting carriers is a water line. The Commerce Court in discussing this section of the Act in the Crane Iron Works Case, said : "That this invests the Commission with discretion- ary power, and was so intended, can not be seriously doubted. Not only is the grant of authority permis- sive in form but the entire paragraph contemplates the exercise of judgment upon the facts disclosed, and implies the right and duty of the Commission to order or decline to order joint rates, as the circumstances and conditions developed in each inquiry may seem to require. The provision for a hearing upon complaint or the equivalent initiative of the Commission involves the liberty and obligation of the administrative tribu- nal to decide a controversy of this nature upon its merits with due regard to the interests of both ship- pers and carriers. In short, it seems clear to us that the question of establishing joint rates or declining to do so rests in the discretion of the Commission, and it is equally clear that the refusal of the Commission in this case was a lawful and proper exercise of that discretion." Crane Iron Works vs. U. S.. 209 Fed. Rep. 238. (This decision was not appealed from.) Basing its administrative expression on this discretion- ary power, the Commission has efifected a fundamental rule that a line is circuitous beyond the intention of the statute when it exceeds the short line mileage by 15 per cent or more, and it is the reasoning of the Commission that circuitous routes unnecessarily maintained cause wasteful transportation which should be avoided wherever possible. Rates on Bituminous Coal, 36 I. C. C. Rep. 401, 420. Bituminous Coal Rates. 39 I. C. C. Rep. 378, 390. Rates on Tropical Fruits, 30 I. C. C. Rep. 621, 632. INTERSTATE COMMERCE LAW 189 Class and Commodity Rates from Louisville, 36 I. C. C. Rep. 319. Cullman Commer. Club vs. L. &. N. R. R. Co., 33 I. C. C. Rep. 634, 636. 4th Section Violations in the Southeast, 32 I. C. C. Rep. 61, 67. Sugar Rates from New Orleans, 32 I. C. C. Rep. 606, 609. 610. Rates on, Sugar, 31 I. C. C. Rep. 495, 502, 510. Rates on Grain and Grain Prods., 31 I. C. C. Rep. 616. 4th Section Violations in the Southwest, 30 I. C. C. Rep. 153. Rates on Tropical Fruits from Gulf Ports, 30 I. C. C. Rep. 621, 633, 634. Paducah Board of Trade vs. I. C. C, 29 I. C. C. Rep. 583, 591. Edwards & Brandford Lumber Co. vs. C. B. & Q. R. R. Co., 25 L C. C. Rep. 93, 94. In re Lumber Rates, 25 L C. C. Rep. 50, 51. In re Southern Ry. Co., 25 I. C. C. Rep. 407, 410. McCullough vs. L. & N. R. R. Co., 25 I. C. C. Rep. 48, 49. Re Advances on Meats and Packing House Prods., 23 I. C. C. Rep. 656. 662. Pac. Coast Lumber Mfrs.' Asso. vs. No. Pac. Ry. Co., 14 I. C. C. Rep. 51, 54. The Commission has given the following general admin- istrative expression to this provision of the Act: Section 15 of the Act merely reads to all practical in- tents and purposes that between two given points a car- rier shall not be deprived of a haul which it is capable of providing by a reasonably direct route. Meridian Fertilizer Factory vs. T. & P. Ry. Co. et al., 26 I. C. C. Rep. 351, 352. Public necessity for a through route may exist, but a through route does not always necessitate joint rates, since the route may be open to traffic upon the payment of a combination of local rates. Baer Bros. & Merc. Co. vs. Mo. Pac. Ry. Co., 17 I. C. C. Rep. 225, 226. Where a through route exists the Commission cannot award damages for the failure of other carriers to effect a through route and joint rate via which the shipment in question might have moved. Edison Portland Cement Co. vs. D. L. & W. R. R. Co., 20 I. C. C. Rep. 95, 97. 190 AMERICAN COMMERCE ASSOCIATION A rail carrier, by participating in a through route be- tween two termini, only one of which is reached by its rails, in fact serves both termini and may compete within the meaning of section 5 of the Act with steamers operat- ing as part of another through route between the same termini. Peninsular & Occidental S. S. Co., 37 I. C. C Rep. 432, 434. The prohibition of section 15 prevents the Commission from entering an order embracing in any through route substantially less than the entire length of a carrier's line. Cement Rates from Mason City, 30 I. C. C. Rep. 426, 430. Concentration of Cotton at Points in Arkansas, 29 I. C. C. Rep. 106, 108. Wichita Board of Trade vs. A. & S. Ry. Co., 29 I. C. C. Rep. 376, 379. Marble Rates from Vermont Points, 29 I. C. C. Rep. 607, 608. Lumber Rates from Oregon and Washington, 29 I. C. C Rep. 609, 617. Campbell's Creek Coal Co. vs. A. A. R. R. Co., 29 I. C. C. Rep. 682, 690. Rate on Cotton Seed and its Products, 28 I. C C. Rep. 219, 221. If it is proposed to cancel an existing route, it is proper to consider whether or not the Commission could have required the establishment of the route as an original proposition. Ocean-and-Rail Rates to Charlotte, N. C, 38 I. C. C. Rep. 405, 410. (2) Voluntary Establishment of Through Routes. While at common law a common carrier was not com- pelled to accord traffic coming off the rails of other car- riers and not originating on its own line, necessary facilities for through movement, under the provisions of the Act to Regulate Commerce, as amended June 29. 1906, common carriers are required to enter into through INTERSTATE COMMERCE LAW 191 routes and furnish the necessary facilities for the through movement of interstate trafific. Cedar Hills, etc., Co., et al., vs. C. & S. Ry. Co., et al., 17 I. C. C. Rep. 479, 480. See Frt. Ru., etc. vs. M. V. R. R. Co., 13 I. C. C. Rep. 243. Cardiff Coal Co, vs. Chicago, etc., Ry. Co., 13 I. C. C. Rep. 460. Chamber of Commerce vs. Chicago, etc., Ry., etc., Co., 15 I. C. C. Rep. 460. Standard, etc., Co. vs. C. V. R. R. Co., 15 I. C. C. Rep. 620. Shipments sent through to destination, without inter- vention of shippers at junction points, constitute an ar- rangement for through and continuous carriage which clearly brings the transportation within the scope of the Act to Regulate Commerce. Baer Bros., etc., Co. vs. Mo. Pac. Ry. Co. et al., 17 I. C. C. Rep. 225, 226. The Commission has held that where no joint through rate is in effect the combination of separately established rates via the route of movement constitutes the through rate, and that such through rate is as binding, definite, and absolute as a joint through rate. S. T. Fish & Co. vs. N. Y., etc., R. R. Co. et al., 19 I. C. C. Rep. 452. See Re Through Routes and Through Rates, 12 I. C. C. Rep. 163. There is no through route and joint rate where one of the connecting roads does not file tariffs with the Commis- sion. S. T. Fish & Co. vs. N. Y., etc., R. R. Co. et al., 19 I. C. C. Rep. 452, 453. By forming through routes and publishing through rates applicable thereto, both of the interested carriers were held to have merged their lines into one route or line so far as the particular traffic covered by such through route and through rates was concerned. Rates on Grain Milled in Transit, 35 I. C C. Rep. 27, 32, 16—13 192 AMERICAN COMMERCE ASSOCIATION (3) The Commission May Compel the Establishment of Through Routes. Much stress has been laid upon the limitation as to the character of the through route pre- scribed by the amendment of 1910, to the effect that no common carrier without its consent may be required to embrace in the through route substantially less than the entire length of its railroad or of any railroad operated in conjunction therewith or controlled thereby. Aside from this limitation the Commission has full power to require the establishment of through routes, but even this limita- tion may not be used to discriminate in violation of any provision of the Act, nor as a protection to the carrier in the charging of unreasonable rates. The Commission has well expressed its attitude towards the administration of this power by saying that "the railroads of the country are called upon to so unite themselves that they will consti- tute one national system; they must establish through routes; keep these routes open and in operation; furnish the necessary facilities for transportation; make reason- able and proper rules of practice as between themselves and the shippers, and as between each other." Truckers Transfer Co. vs. Charleston & Western Carolina Ry. Co., 27 I. C. C. Rep. 275, 277. Meridian Fertilizer Factory vs. T. & P. Ry. Co. et al., 26 I. C. C. Rep. 351. 352. Missouri & Illinois Coal Co. vs. I. C. R. R. Co., 22 I. C C. Rep. 39, 46. See also: Hughes Creek Coal Co. vs. K. &. M. Ry. Co., 29 I. C. C Rep. 671, 679. (4) The Establishment of Through Routes May Be Required with Electric Railway. An electric railway, when operated as a common carrier subject to the Act, is entitled to through routes and joint rates. In the inter- pretation of the law by the Commission to the effect that INTERSTATE COMMERCE LAW 193 a certain traction company's line was not a lateral branch road, the Commission denied the application of the trac- tion company for the establishment of a through route. The Supreme Court of the United States reversed this holding by ruling that electric railways operating as com- mon carriers of interstate traffic are entitled to through routes and joint rates. United States vs. B. & O. R. R. Co., 226 U. S. 14, 57 L. Ed. 104. (5) Establishment of Through Route May Be Required with Water Line. The Commission has held that by vir- tue of the obvious effect and meaning of the words "or otherwise," in the Panama Canal Act, it has authority to establish through routes with a water carrier. Section 1 1 of the Panama Canal Act, which amends sec- tion 6 of the Act to Regulate Commerce, embraces the following provision: "When property may be or is transported from point to point in the United States by rail and water through the Panama Canal or otherwise, the transpor- tation being by a common carrier or carriers, and not entirely within the limits of a single State, the Inter- state Commerce Commission shall have jurisdiction of such transportation and of the carriers, both by rail and by water, which may or do engage in the same, in the following particulars, in addition to the jurisdic- tion given by the Act to Regulate Commerce, as amended June eighteenth, nineteen hundred and ten: ♦ mir ^U >!' ^I' ^^ >!' *i^ *S^ ^n ^^ *y» *|* ^f% ^f* ^» ^* "To establish through routes and maximum joint rates between and over such rail and water lines, and to determine all the terms and conditions under which such lines shall be operated in the handling of the traf- fic embraced." The contention was raised that the words "or other- vv?ise" modify the phrase "by rail and water," and not 194 AMERICAN COMMERCE ASSOCIATION the phrase "through the Panama Canal." The Commis- sion declined to accept this construction of the words "or otherwise," and stated that the plain, every-day reading of the Act is "through the Panama Canal or otherwise," and that the words "or otherwise" would be pure sur- plusage if not so read. The Commission therefore held that it had jurisdiction to establish through routes and joint rates with water carriers. Augusta & Savannah Steamboat Co. vs. Ocean Steamship Co., 26 I. C. C. Rep. 380. See also: Ind. Transp. Co. vs. Gr. Rapids, Holland & Chicago Ry., 39 I. C. C. Rep. 757. Port Huron & Duluth Steamship Co. vs. Pennsylvania R. R. Co., 35 I. C. C. Rep. 475. Decatur Navigation Co. vs. Louisville & Nashville R. R. Co., 31 I. C. C. Rep. 281. (6) "Railroads of Different Character" Defined. In the establishment of a through route the authority of the Commission is limited by the provision in section 15 that it "shall not, however, establish any through route, classification, or rate between street electric passenger railways not engaged in the general business of trans- porting freight in addition to their passenger and express business and railroads of a different character." In this connection "railroads of a different character" mean rail- roads whose motive power is steam as contradistinguished from electricity. Kansas City, Mo., and Kansas City, Kans. vs. Kansas City Via- duct & Terminal Railway Co., 24 I. C. C. Rep. 22, 26. § 16. Joint Rates Compared with Through Rates. The term "joint rate" as used by the Commission in its tariff regulations is construed to mean a rate that ex- tends over the lines of two or more carriers and is made INTERSTATE COMMERCE LAW 195 by agreement between such carriers, both as to its unity and divisions. A "through rate" is the net rate between the point of origin and the point of destination. It may be composed of several local or intermediate rates applicable to the separate hauls of the several carriers participating in and constituting the through route of the shipment. A joint rate when duly established and in force, becomes the only lawful rate for through transportation and super- sedes any through rate made up of a combination of the intermediate rates. Section 15 of the Act to Regulate Commerce as amended, confers upon the Commission power to establish joint rates applicable to through routes established by it and to prescribe the divisions of such rates in the event the carriers refuse or neglect to establish through routes or joint rates. The power thus vested in the Commission to establish joint rates is complementary to its authority to establish through routes and necessary to make such routes workable for the shipping public. I. C. C. Tariff Circular 18-A, Rule 55. S. P. Co. vs. I. C. C, 200 U. S., 536. Sunderland Bros. Co. vs. S. L. & S. F. R. R. Co., 23 I. C. C. Rep. 259, 261. See also, this chapter, section 13, "What Constitutes a Joint Rate," ante. § 17. Changes in Rates Do Not Affect Traffic in Course of Through Transportation. The only lawful rate which may be applied to an inter- state shipment is the legal rate in efifect at the time the shipment is delivered to the carrier. So, if the movement be over the lines of two or more carriers, the through or joint rate, whichever be in efifect at the time the originat- 196 AMERICAN COMMERCE ASSOCIATION ing carrier receives the shipment, is the only legal rate applicable. § 18. When Changes in Rates May Affect Traffic in Course of Transportation. If a shipment moves over the lines of two or more car- riers who have made no arrangement, express or implied, for a through route, then the transportation is not "through" and its movement as a unit is displaced by a series of successive movements over the individual lines, and, in this event, the shipment is subject to any legal changes in rates of a successive carrier which become effective before the shipment passes into the possession of such successive carrier. • Brady vs. P. R. R. Co., 2 I. C. C. Rep. 131, 2 I. C. Rep. 78 § 19. Right of Shipper to Reasonable Through Rates. The Commission has said that it may be laid down as a general rule admitting of no qualification, that a manu- facturer or merchant who has traffic to move and is ready to pay a reasonable rate for the service is entitled to have it moved and to have reasonable rates established for the movement, regardless of the fact that the revenues of the carrier may be reduced by reason of the shipper's competi- tion with other shippers in the distant markets; and under all ordinary conditions he is entitled also to have the benefit of through routes and reasonable joint rates to such dis- tant markets if no "reasonable or satisfactory" through routes already exist. Cardiff Coal Co. vs. C. M. & St. P. Ry. Co., 13 I. C. C. Rep. 460, 467. The power of the Commission, under the amended fif- teenth section, is now absolute to establish through routes INTERSTATE COMMERCE LAW 197 and joint rates, and the non-existence of reasonable or satisfactory through routes is no longer a condition prece- dent to its exercise. § 20. Through Rates — Combination of Joint Rate to Com- mon Points and Local Rate Beyond. In order to secure uniformity in practice and under- standings and to remove the cause of many complaints, the Commission has held that when a joint through rate is the same to two or more points and the rate on a through shipment to a local station to which no specific joint through rate applies is made up by combination of such joint through rate to common points and local rate be- yond, the rate for through shipment must be determined by calculating the joint through rate to the point from which the lower local rate applies to point of destination and adding thereto such local rate. For example : Joint through tarifif names the same rates from certain eastern points to Chicago and Milwaukee. If shipment is destined to a point to which the local rate is less from Milwaukee than from Chicago, the rate applied should be the joint through rate to Milwaukee plus the local rate from Mil- waukee to destination, and unless the lines of the delivering carrier reach both Chicago and Milwaukee the shipment should move via Milwaukee. If the local rate from Chica- go to point of destination is lower than from Milwaukee, the rate should be the joint through rate to Chicago plus the local rate from Chicago to destination, and unless the lines of the delivering carrier reach both Milwaukee and Chicago the shipment should move via Chicago. Rates for outbound through movements from such local stations and under like circumstances must be applied on the same basis, where the joint through rates are the same from two or more points. 198 AMERICAN COMMERCE ASSOCIATION This does not authorize any carrier to apply to transpor- tation over its lines any rate except that stated in its own lawfully published tariffs or in the lawfully published joint tariffs in which it has concurred. If a carrier desires to "meet the rate" of a competitor, it must do so by lawfully including in its own tariffs such specific rates, proportional or otherwise, as may be necessary so to do. I. C. C. Conference Rulings, Bulletin No. 6, Ruling- No. 215. See also Rulings Nos. 195 and 214. It is suggested that shippers can assist in avoiding mis- takes and misunderstandings by calling attention to the rate that should apply in such cases as come under this rule, by indicating it on shipping bill in connection with routing instructions; for instance, "Rate on Milwaukee." This is, however, merely a suggestion by the Commission, and does not relieve the agents of carriers from the respon- sibility of quoting and applying the correct lawful rate. This rule does not apply where a shipment has reached destination as originally given by shipper and has been reconsigned, except when tariff contains reconsigning rule that provides for such application. This rule must not apply in any case where there is an applicable specific joint through rate from point of origin to point of destination. I. C. C. Tariff Circular No, 18-A, Rule No. 55. I. C. C. Confr. Rulings Bull. No. 6. Ruling No. 215. Larrowe Milling Co. vs. C. & N. W. Ry. Co., 17 I. C. C. Rep. 443. Larrowe Milling Co. vs. C. & N. W. Ry. Co.. 17 I. C. C. Rep. 548. Rehberg & Co. vs. Erie R. R. Co., 17 I. C. C. Rep. 508. § 21. Basing Points or Factors for Combination Rates May Be Specified. Carriers are permitted to provide in tariffs that, in the absence of a specific rate from point of origin to destina- tion for a through shipment, the combination rate to or INTERSTATE COMMERCE LAW 199 via basing points, or, the combination rate specified in cer- tain tariffs, will be the lawful rate for the shipment. If the shipment moves to or from a point of origin or destination or via a junction point with connecting or branch line at which interchange is made directly inter- mediate to the base point upon which the lowest combina- tion makes, such combination must be applied; and it is not necessary to haul the shipment to such base point and back again to or through point of origin or destination or such junction point. CHAPTER VII. ACT TO REGULATE COMMERCE AS AMENDED (CONTINUED). Amplification of Sections. § 1. Amplification of Section 1 as Amended (Continued) — Reason- ableness of Rates. § 2. Interrelationship of Sections 1, 3, 4, and 15, respecting Reason- ableness of Rates. § 3. Original Jurisdiction of the Interstate Commerce Commission. § 4. What Constitutes a "Reasonable Rate?" § 5. Reasonableness of Rates per se. § 6. Relative Reasonableness of Rates. § 7. Courts on the Reasonableness of Rates. § 8. The "Minimum Rate" Bogey. § 9. Interblending of State and Interstate Rates. § 10. Presumption of Reasonableness of Rates. § 11. Powers of Interstate Commerce Commission not Contravened by Shipping Act. 201 CHAPTER VII. ACT TO REGULATE COMMERCE AS AMENDED (CONTINUED). Amplification of Sections. (Continued.) § 1. Amplification of Section 1 as Amended (Continued) — Reasonableness of Rates. The charge of the common carrier for its service both at common law and under the Act to Regulate Commerce is required to be just and reasonable. This is a principle of law arising from the extraordinary franchise rights and practical monopoly incident to the business of common carriage. The first section of the Act to Regulate Com- merce provides that *'all charges made for any service rendered or to be rendered in the transportation of passen- gers or property and for the transmission of messages by telephone, telegraph, or cable, * * * or in connection therewith, shall be just and reasonable; and every unjust and unreasonable charge for such service or any part thereof is prohibited and declared to be unlawful." This provision of the Act has direct reference to the "trans- portation" services defined in this same section of the Act, and therefore means that all charges made for any service in connection with the interstate transportation of passen- gers or property, the receipt, delivery, elevation, and trans- fer in transit, ventilation, refrigeration, icing, storage, and handling of property transported, demurrage, and terminal services, and for the transmission of messages by tele- phone, telegraph, and cable must be just and reasonable. This requirement that the carrier's charge shall be just 203 204 AMERICAN COMMERCE ASSOCIATION and reasonable is a right in the public, springing from the common law, statutorily extended into concurrent con- formity with the aggregate purpose of the Act. Hence, the charge for any service rendered by a common carrier incident to the transportation of persons or property must be just and reasonable, and to this rule no proper excep- tion lies. In the St. Louis Hay & Grain Company Case, the Supreme Court of the United States, reversing the Com- mission and the lower courts, held that common carriers were entitled to compensation in addition to the actual expense incurred for the service rendered in stopping goods in transit. Southern Railway Co. vs. St. Louis Hay & Grain Co., 214 U. S. 297, 53 L. Ed. 1004. The most difficult problem confronting the regulating authority is that of determining what is a just and reason- able charge for transportation. The wording of the Act presumes such a determination, but in the practical ad- ministration of the law such an economic status of a rate is possible only of relative determination. The inquisitorial powers of the Commission have never achieved more than approximations of reasonableness. Rate making is not an exact science and the difficulties encountered by the Commission in administrating this all- important mandate of the Act were well expressed in its own language in the 1910 Western Rate Advance Case, where, in speaking of the issue of unreasonableness, it said: "Our laws do not seek to establish dominion over private capital for any other purpose than to make sure against injustice being done the public, and thereby make such capital itself more secure. We are dealing here with a difficult problem, involving INTERSTATE COMMERCE LAW 205 multitudinous facts and an infinite variety of modify- ing conditions, which make the estabHshment of prin- ciples and the framing of policies a matter of slow evolution. Congress has laid down a few rules. These rules we are attempting to apply. It is not for us to say that we represent the Government and may have a policy of our own which in any degree runs counter to the power granted to us or the duty im- posed upon us. The railroads may not look to this tribunal to negative or modify the expressed will of the legislature. They have laid before us the facts and law which would make for a justification of their course in the increasing of rates. To our minds their justification has not been convincing." 1910 Advances in Rates— Western Case, 20 I. C. C. Rep. 307, 379. In its report in the 1915 Western Rate Advance Case, recurring to the same issue again before it, the Commis- sion expressed itself as follows, relative to the difficulty of exactly determining the reasonableness of transportation rates: "The problem of estimating the cost of transport- ing specific commodities is at best in a developmental stage. Progress has been made in this field, how- ever, and the effort to attain to a more thoroughly tested and a more comprehensive method of such specific cost accounting deserves every encourage- ment. Rate making in the past has not been prose- cuted parallel with comparative cost studies. The competition of markets, of producers, and of rival car- riers, especially by water, has resulted in a freight rate system which can not be assumed to be so adjusted that the rates effective result in earnings proportioned nicely to the respective costs involved. Where bare expenses are covered by the rate and an increase would kill the traffic, commercial necessities may make the rate the best paying rate on that commodity which the carrier can obtain. The margin of profit 206 AMERICAN COMMERCE ASSOCIATION on a particular kind of traffic may be relatively small, and at the same time practical commercial exigencies may prevent the carrier from proposing increases on the traffic in question. Another variety of traffic may be yielding a relatively high return and yet afford a practical opportunity, without raising the rate thereon to an unreasonable or extortionate level, of obtaining needed additional revenue." 1915 Western Rate Advance Case, 35 I. C. C Rep. 497, 561, 562. §2. Interrelationship of Sections 1, 3, 4, and 15, Respect- ing Reasonableness of Rates. That there is an interrelationship between the mandate of reasonableness in the first section of the Act and the prohibition of the third section, is apparent from a com- parison of the elements of reasonableness under the former section with the nature of rates which may give rise to the discriminations forbidden by the latter section. Section 3 prohibits the giving of any undue or unreason- able preference or advantage to any particular person, company, firm, corporation, or locality, or any particular description of traffic, in any respect whatsoever, or the subjecting of any particular person, company, firm, cor- poration, or locality, or any particular description of traf- fic, to any undue or unreasonable prejudice or disadvan- tage, in any respect whatsoever, or discriminating by common carriers, subject to the Act, in their rates and charges between connecting lines. Thus, it is obvious that a rate which is reasonable per se (i. e., in and of itself) under the provisions of section 1 of the Act may violate the third section by affording undue preference or disadvantage to an individual, locality, or particular de- scription of traffic. On the other hand, facts which affirmatively show the existence of an unlawful discrim- ination or prejudice may in no wise reach to the question INTERSTATE COMMERCE LAW 207 of the reasonableness of the rate per se. Still further, however, it may, where a certain state of facts determines the rate to be unreasonable per se, be shown by the same set of facts that the rate is also unduly prejudicial. This legal relationship of the two sections has been given cognizance by the courts in holding that the unreasonable- ness of a rate under section 1 cannot be established solely by proof of a violation of the third section. As we have seen under the provisions of section 3, there may not be discrimination in rates between localities, but this prohibition may fundamentally affect the reason- ableness of rates, and in section 4 this principle is extended so as to prohibit the farther point being given an undue advantage over that point which is nearer to the point of origin. In the Matter of Advances in Rates on Coal, 22 I. C. C. Rep. 604, 613. I. C. C. vs. N. C. & St. L. R. Co., 120 Fed. Rep. 934. It should, therefore, be borne in mind that in attacking rate under section 1 the violation to be established is that of unreasonableness without reference to its relationship with other rates or practices involving a discrimination, but where the rate is attacked upon both grounds — that of its unreasonableness and its discriminatory eflfect, there must be sufficiency of facts to prove the violation of sec- tion 1 as well as the violation of the third section. The amended fifteenth section of the Act provides that whenever, after full hearing upon a complaint made as provided in section 13 of the Act, or after full hearing under an order for investigation and hearing made by the Commission on its own initiative (either in extension of any pending complaint or without any complaint what- ever), the Commission shall be of opinion that any indi- vidual or joint rates or charges whatsoever demanded, 16—14 208 AMERICAN COMMERCE ASSOCIATION charged, or collected by any common carrier or carriers subject to the provisions of the Act for the transportation of persons or property or for the transmission of messages by telegraph or telephone as defined in the first section of the Act, or that any individual or joint classifications, regulations, or practices v^hatsoever of such carrier or car- riers subject to the provisions of the Act, are unjust or unreasonable or unjustly discriminatory, or unduly prefer- ential or prejudicial or otherwise in violation of any of the provisions of the Act, the Commission is authorized and empow^ered to determine and prescribe what will be the just and reasonable individual or joint rate or rates, charge or charges, to be thereafter observed in such case as the maximum to be charged, and what individual or joint classification, regulation, or practice is just, fair, and reasonable, to be thereafter followed, and to make an order that the carrier or carriers shall cease and desist from such violation to the extent to which the Commission finds the same to exist, and shall not thereafter publish, demand, or collect any rate or charge for such transporta- tion or transmission in excess of the maximum rate or charge so prescribed, and shall adopt the classification and conform to and observe the regulation or practice so pre- scribed. Whenever there shall be filed with the Commission any schedule stating a new individual or joint rate, fare, or charge, or any new individual or joint classification, or any new individual or joint regulation or practice afifect- ing any rate, fare, or charge, the Commission shall have, and it is given, authority, either upon complaint or upon its own initiative without complaint, at once, and if it so orders, without answer or other formal pleading by the interested carrier or carriers, but upon reasonable INTERSTATE COMMERCE LAW 209 notice, to enter upon a hearing concerning the propriety of such rate, fare, charge, classification, regulation, or practice; and pending such hearing and the decision thereon the Commission upon filing with such schedule and delivering to the carrier or carriers affected thereby a statement in writing of its reasons for such suspension, may suspend the operation of such schedule, and defer the use of such rate, fare, charge, classification, regulation, or practice, but not for a longer period than one hundred and twenty days beyond the time when such rate, fare, charge, classification, regulation, or practice would other- wise go into effect; and after full hearing, whether com- pleted before or after the rate, fare, charge, classification, regulation, or practice goes into effect, the Commission may make such order in reference to such rate, fare, charge, classification, regulation, or practice as would be proper in a proceeding initiated after the rate, fare, charge, classification, regulation, or practice had become effective: provided, that if any such hearing can not be concluded within the period of suspension, as. above stated, the Inter- state Commerce Commission may, in its discretion, extend the time of suspension for a further period not exceeding six months. At any hearing involving a rate increased after January first, nineteen hundred and ten, or of a rate sought to be increased after the passage of the Act, the burden of proof to show that the increased rate or pro- posed increased rate is just and reasonable shall be upon the common carrier, and the Commission shall give to the hearing and decision of such questions preference over all other questions pending before it and decide the same as speedily as possible. The Commission may also, after hearing, on a complaint or upon its own initiative without complaint, establish 210 AMERICAN COMMERCE ASSOCIATION through routes and joint classifications, and may establish joint rates as the maximum to be charged and may pre- scribe the division of such rates as hereinbefore provided and the terms and conditions under which such through routes shall be operated, whenever the carriers themselves shall have refused or neglected to establish voluntarily such through routes or joint classifications or joint rates; and this provision shall apply when one of the connect- ing carriers is a water line. The Commission shall not, however, establish any through route, classification, or rate between street electric passenger railways not engaged in the general business of transporting freight in addition to their passenger and express business and rail- roads of a different character, nor shall the Commission have the right to establish any route, classification, rate, fare, or charge when the transportation is wholly by water, and any transportation by water affected by this Act shall be subject to the laws and regulations applicable to transportation by water. And in establishing such through route, the Commission shall not require any company, without its consent, to embrace in such route substantially less than the entire length of its railroad and of any intermediate railroad operated in conjunction and under a common management or control therewith which lies between the termini of such proposed through route, unless to do so would make such through route unreasonably long as compared with another practicable through route which could otherwise be established. Under the powers thus vested in the Commission it has conducted extensive investigations into the reasonableness of express and freight rates. In the 1915 rate advance cases it searched the financial affairs of the carriers for INTERSTATE COMMERCE LAW 211 the determining cause for the alleged necessity of the car- riers for additional revenues. In this respect the power of the Commission is exclusive and unreviewable by the courts. 1915 Western Advance Rate Case, 35 I C. C. Rep. 497, 501. The Five Per Cent Case, 31 I. C. C. Rep. 351. Central Commercial Co. vs. L. & N. R. R. Co., 27 I. C. C. Rep. 114, 115. Wickwire Steel Co. vs. N. Y. C. & H. R. R. R. Co., 27 I. C. C. Rep. 168, 169. In re Wool, Hides and Pelts, 25 I. C. C. Rep. 675, 676. Porter vs. St. L. & S. F. R. R. Co., 15 I C. C. Rep. 5. Morse Produce Co. vs. C. M. & St. P. Ry. Co., 15 I. C. C. Rep. 334, 337. Leonard vs. K. C S. Ry. Co., 13 I. C. C. Rep. 573, 578. The authority granted the Interstate Commerce Com- mission under section 15 of the Act to prescribe reason- able rates does not confer absolute or arbitrary power to act on any consideration which the Commission may deem best for the public, the shipper, and the carrier. Its order must be based on transportation considerations. While it may give weight to all factors bearing either on the cost or the value of the transportation service, it must disregard as well the demand of the shipper for protection from legitimate competition, domestic or foreign, for unlimited markets, or for the enforcement of equitable estoppels arising from a justifiable expectation that past rates will be maintained, as the demand of the carrier for the maximum rate under which the traffic will move freely. To be just and reasonable, within the meaning of the constitutional guaranty, the rates must be prescribed by the Interstate Commerce Commission with reasonable re- gard for the cost to the carrier of the service rendered and for the value of the property employed therein; but this does not mean that regard is to be had only for the interests of the carrier, or that the rates must necessarily 212 AMERICAN COMMERCE ASSOCIATION be such as to render its business profitable, for reasonable regard must also be had for the value of the service to the public. And vv^here the cost to the carrier is not kept w^ithin a reasonable limit, or w^here for any reason its busi- ness cannot reasonably be so conducted as to render it profitable, the misfortune must fall upon the carrier. It is obvious that the plain, unmistakable requirement of the law is that traffic shall be subject to just, reasonable, and non-discriminatory rates. Hammerschmidt & Franzen Co. vs. C. &. N. W. Ry. Co., 30 I. C. C. Rep. 71, 82. A T. & S. F. Ry. Co. vs. I. C. C, 190 Fed. Rep. 591, 594. M. K. & T. Ry. Co. vs. I. C. C, 164 Fed. Rep. 645, 648. How the reasonableness and justice of a rate are to be determined is not prescribed by the statute, nor has any satisfactory test been evolved by transportation experts. Conflicts about rates arise from conflicting interests of carriers and shippers. But when a controversy arises be- tween the public and a carrier, the question of the rea- sonable limit of a rate usually involves many considera- tions, and is often difficult to determine. A rate that might be regarded as reasonable and just by a producer and shipper, might, from a carrier's standpoint, be deemed extremely unreasonable and unjust, and so, conversely, a rate that a carrier might claim to be reasonable in itself, and which it might support with strong reasons based upon the cost of the service, the. quantity of the business and the characteristics of its line of road, might exhaust the greater part of the proceeds of the producer's commodity and be destructive to his interests. It is only stating a truism, therefore, to say there is no recognized test of a rate mutually reasonable for a carrier and for the producer of the traffic. The reasonableness of a rate must consequently be as- certained in every instance in which the question arises, INTERSTATE COMMERCE LAW 213 by its relations both to the carrier and to the shipper, and by comparison with rates normally charged for like or similar service. Delaware St. Grange, etc., vs. N. Y., etc., R. R. Co. et al., 4 I. C. C. Rep. 588, 3 I. C. Rep. 554. The fact that the law requires interstate rates to be just and reasonable does not mean that the rates of one carrier shall be exactly equal to those of another carrier. It is obvious that a rate that might be reasonable for one car- rier operating under one set of conditions might be entirely unreasonable for another carrier surrounded by different conditions. The law requires that the charges of each shall be reasonable. Re Advances on Coal to Lake Ports, 22 I. C. C. R. 604, 625. Swift & Co. vs. Chicago & Alton R. R. Co., 16 I. C. C. R. 426, 429. Marley & Son vs. N. & W. Ry. Co., 11 I. C. C. R. 616. In Corn Belt Meat Producers' Assn. vs. C. B. & Q. Ry. Co., 14 I. C. C. R. 376, 394, the Commission said : "The interstate rates of this country have not been established upon any consistent theory. They are a process of growth; they have come into existence under the operation of various forces and conditions and are not by deliberate design. With these rates we must deal as we find them. This Commission has no authority to establish general rate schedules. What we take off in one place we can not add in some other. Unless, therefore, the general result of all rates is to yield an undue revenue to the carrier, we should not reduce a particular rate simply because we might think, if establishing that rate de novo as part of" a general scheme, that it ought to be somewhat lower or somewhat higher in proportion to others. The rate attacked must be so out of proportion as to be unreasonable or must so discriminate as to be 214 AMERICAN COMMERCE ASSOCIATION undue or must be unlawful for some other special reason." See also: Kindel vs. Adams Ex, Co., 13 I. C. C. R. 475, 485. Frye vs. No. Pac. Ry. Co., 13 I. C. C R. 501, 507. There is no standard by which the cost of the service or the reasonableness of rates can be fixed with any cer- tainty. The rates which the carriers themselves have voluntarily established differ in different sections and at different times. There is almost as wide a difference in the rates established by different commissions after mature consideration. Beatrice Creamery Co., et al., vs. I. C. R. Co., et al., 15 I. C. C. R. 109, 132. There is no absolute test of a reasonable rate, and the Government has supplied none. As all authorities in such matters agree, one of the most satisfactory tests of the reasonableness of the rates of one carrier is a comparison with the rates of other carriers operating in the same terri- tory under the same general conditions. Chamber of Commerce, etc., vs. C. R. I, & P. Ry. Co. et al., 15 I. C. C. R. 460, 466. City of Spokane et al., vs. No, Pac. Ry. Co. et al.. 15 I. C. C. R. 376. 416. Compare : Black Mt. Coal Land Co. vs. S. Ry. Co.. 15 I. C. C. R. 286, 295. Kindel vs. N. Y., etc., R. R. Co., 15 I. C. C. R. 555, 558. § 3. Original Jurisdiction of the Interstate Commerce Commission. The mandate of the Act to Regulate Commerce as now amended is that all charges of common carriers subject thereto, for a service rendered or to be rendered in the transportation of passengers or property or in connection INTERSTATE COMMERCE LAW 215 therewith, must be "just" and "reasonable." This is simply a specific enactment into statute by Congress of the common-law requirement that the carriers' charges must be "reasonable" and "just." At the common-law, however, the construction placed on the terms "just" and "reasonable" in connection with transportation charges did not mean that the charges were to be equal to all. It would be beyond the purpose of this volume to recur to a purely academic discussion of the common-law re- quirement of common carriers with respect to the reason- ableness of their charges, the relations of carrier and shipper out of which such requirement of the common-law sprang, or the practical difificulties attending enforcement of the reasonableness of rates through the courts. Maximum Rate Case, 167 U. S. 479, 42 L. Ed. 251 (1897). Granger Cases, 94 U. S. 113, 24 L. Ed. 11 (1887). Smyth vs. Ames, 169 U. S. 466, 42 L. Ed. 819 (1898). Windsor Coal Co. vs. C. & A. R. R. Co.. 52 Fed. Rep. 716 (1892). Cook vs. C. R. I. & P. Ry. Co., 81 Iowa 551, 9 L. R. A. 764 (1890). So. P. R. R. vs. Colorado Fuel & Iron Co., 101 Fed. Rep. 779 (1900). The early judicial construction of the Act was in many instances not only repugnant to the evident purpose of the legislation, but more or less opposed to the apparent neces- sities of the statute. It is difficult to escape from the belief that but for the hampering judicial constructions thrown about the administration of the Act prior to 1906, through the practical judicial destruction of the force of the statute, the Commission's regulation of transporta- tion rates and practices respecting their justness and rea- sonableness would have been accomplished with much more simplicity and effectiveness than may now be hoped for. This is essentially true because of the economic 216 AMERICAN COMMERCE ASSOCIATION fusing of industrial, commercial, and transportation con- ditions in the last few years, preventing the readjustment of transportation charges and practices except as a process of slow evolution. The amendment of 1906, besides conferring original jurisdiction upon the Commission to entertain proceed- ings and conduct investigations involving the reasonable- ness of rates and to pass upon the reasonableness or unreasonableness of existing rates, bestowed upon that tribunal the necessary co-efficient power to determine, fix, and require the observance of reasonable rates as maxima for the future. Thus was created an original authority which the shipper must primarily invoke for redress from the imposition of unjust and unreasonable rates and prac- tices. The affirmative duty of the courts to afford this redress at common law had been negatively exercised, and the question of the right of a shipper to proceed in a court of law for damages against a carrier because of the exac- tion of a legally published rate alleged to be unreasonable, was presented to the Supreme Court of the United States in the Abilene Cotton Oil Company Case, 204 U. S. 426, 51 L. Ed. 553, and in reviewing the exclusive nature of these enlarged powers of the Commission, the court said: "For if, without previous action by the Commission, power might be exerted by courts and juries gener- ally to determine the reasonableness of an established rate, it would follow that unless all courts reached an identical conclusion a uniform standard of rates in the future would be impossible, as the standard would fluctuate and vary, dependent upon the divergent con- clusions reached as to reasonableness by the various courts called upon to consider the subject as an origi- nal question. Indeed, the recognition of such a right is wholly inconsistent with the administrative power conferred upon the Commission and with the duty, INTERSTATE COMMERCE LAW 217 which the statute casts upon that body, of seeing to it that the statutory requirement as to uniformity and equality of rates is observed." In addition to the enlargement of its powers to control the reasonableness of rates, the Commission was invested by the amendment of 1910 with the further power to re- strain increases in rates for a definitely fixed period, until a determination may be had as to whether the increased rates conform with the statutory requirement of reason- ableness or are but evidence of the exercise of an arbitrary power on the part of the carriers. The power to fix a rate in future is not a judicial power but a legislative one. The courts are therefore without power to fix rates for the future. The legislative author- ity has delegated to the Commission the power to fix rates for the future and in the exercise of such extensive author- ity, the broadest consideration of the economic and finan- cial effect of its orders is justified. While in its every essential an administrative tribunal, the Commission has been termed by the Supreme Court of the United States, an "economic court," or, to give it a more commonplace definition, but one of stricter legal analogy, a select jury to pass upon the reasonableness and justness of transpor- tation rates and practices. Within the broad lines of dis- cretion possessed by the Commission, the courts now regard as final its conclusions on questions of fact affecting rate adjustments and transportation practices. A review of the Commission's orders, however, is not a procedure equally open to the carrier and shipper. The carrier may apply to the courts for a review of the ques- tions of law involved in proceedings before the Commis- sion, but unless a constitutional guarantee is violated by the order of the Commission its action is final, provided, V 21S AMERICAN COMMERCE ASSOOATION it dc-es z:: overstep the jnrisdictioiial Imes -■-f ^T2:"te, Bnt as to the shipper, the J 1 rnbnnal of his remedy against j£e may proceed in the courts in ; ^ e order of the Commission dis- — '-e must restrain his ac- :..= ''"- ? limitations for his of the A:: :: Pr^-als^i . — r-^-:f -'^ "railv ^ -^ * 5- , — — ^j^-t c - i: : ct - :.:= :i:::cv„=: r : f r : comrr :. .-^ - ' that the : : : ■ e Act are in ii: : ;.. rtrnedics. ~ :..: :i- zc: :c ccr r--.-ed as c:- . - ■ f ^-'n-^er :: — - — -'-w rights, i.:^ con- t:: ^ t ripngnant to and in- C3C- -- T Act- It is bnt Ic^cal tfcs- 1 : - - 1 - The conrts against the reifi-i: T — : - -ri : i: rtss ' ^ rate which has bei- ~ Ti Iimr f :- rrromnlgated in accrrii- r -eqmre— izi; i: :.- ---.: to Regulate Cc=:~ T - T _ : - rate is the only legal rate which iz '- z : :t : i~er to charge and coQect nnder the c : ■ T " 1 " : 1 ■ T : : :he Act mtbi cjianged in accordance vr : - ? of the Act- So the ^ppo* may not, wuLL _ . : - T : 1 :: ?^ by the Comfnis5aon, maintain ac- tioos tc 1 - - redress for violations of the Act, conferrt i -. except as to snch wrongs as can cc - t context of the Act, be re- dressed t«^ : :v tbe Commission. ? : - - — ost import^.. : _ - _ : lional dedsioo, the S_::t~r r : i: ••"We -.:l^i^l : i: it inevitably follows from the con- text of tbe Act that the independent right of an in- dnridnal original^ to maintain actions in courts to INTERSTATE COMMERCE LAW 213 obtain pccnniaiy rec-^-- --'- xicHz' ' - - -'- ^ Act conferred by tl^ nir. a mt: - . -- redress of such wroc. ~an, coosfstenthr context of the Act, \- - ' - 1 ssed t : r : .- p^evious action by tht I : r r .issioo- Tcxas Pat Ry. Ca " 3 Co, 20* U. S 4afiL C L & S. Co. Ts. K : Fe«L Ue^ 261 R« Advances ia Ri i— em Case 30 L C C ?-tc 31'. Mempliis Yztzz'. Z .tan vs. K. C S Ry. Co, 17 L C C Rrp. 9a Adrance in Ra:-: - rsteni Case, 20 L C C Rc^l 307, 3Ul See also: Fraiddm rs. PhibL ^ R. R. R. Co^ 203 Fed. Rep. 134L 13B. Tbe New E^lasd Ivrest«alioa. 27 L C C RepL 5601 OtiL H - Mi & Co. Ts. Old Dooaiaa Sl Sl Co, 27 L C C RcpL C: f Onaba Ts.A-&.SR.Ry. Col,27LCC RepL K. Coal CoL Ts. H. V. Ry. Co, 26 L C C Rrp. r-eT : - :* T C Rep. UKk, 311 St. L: - ; Z 7 t Co- T3- V. Rv. Co, 24 L C C ?-e^ i-f*! 37a RH^:rside'Mi . £ _ & S. F. R. R. Co, 2*L C C Rt: - 646l Compare I. C R_ R- Co. vs. Xevbvc Hfll Coal Cbu 2» U. Sl 27S. Peima R. R. Co. ts. Paritaa Coal Co, 237 U. S. 12L See also: New York-Jerser City Ferrr Rates. 37 L C C RepL MBw 111 Cool Rates £raai Oak USOs, Colo, 30 L C C Rep^ SDSL SB- The Mississvpi River Case, 28 L C C Rep. 47. 59. Board of Tia^ of Cairofltoa. Ga. vs. C of Ga. Ry- Co, 28 L C C Repu 154. 168. Boston Cfaanbcr of Ccnrrerre ts. A. T. ft Sl F. Rt. Co, 28 L C C RepL ZSOL 234. Central Comnerdal Co. ts. I. & X. R. R. Co, 27 L C C Rep. 114. 115. Wlckwire Steel Co. ts. X. Y. C i H. R. R. R. Cou, 27 L C C Rep. 168, 169. Lumber Rates from Mes^ins a^ 0'±tz F Xev Or- leans. 27 I. C C RepL 471. 48fi. In re Wool. Hides awl Ptits. 25 I ~ Anadarko Cotton Oi! Co. ts. A T i. :: . J .- 1 C- C ' Rep. 327. In re .'.drance oi Coal to Lake Pons. 22 i. C C RepL 6"- la re Aoraaces im Ratcs-Wcstcn Case. 20 L C C Re; 220 AMERICAN COMMERCE ASSOCIATION Railroad Commission of Wisconsin vs. C. &. N. W. Ry. Co., 16 I. C. C. Rep. 85, 89. Porter vs. St. L. & S. F. R. R. Co., 15 I. C. C. Rep. 1, 6. Abilene Cotton Oil Co. vs. T. &. P. Ry. Co., 204 U. S., 426. Washer Grain Co. vs. M. P. Ry. Co., 15 I. C. C. Rep. 147, 156. Morse Produce Co. vs. C. M. & St. P. Ry. Co., 15 I. C. C. Rep. 334, 337. City of Spokane vs. N. P. Ry. Co., 15 I. C. C. Rep. 376, 416. Holley Matthews Mfg. Co. vs. Y. & M. V. R. R. Co., 15 I. C. C. Rep. 436. 437. Hussey vs. C. R. I. & P. Ry. Co., 13 I. C. C. Rep. 366, 368. Leonard vs. K. C. S. Ry. Co., 13 I. C. C. Rep. 573, 578. Douglas & Co. vs. C. R. I. & P. Ry. Co.. 21 I. C. C. Rep. 541. Joynes vs. P. R. R. Co., 17 I. C. C. Rep. 361. Arkansas Fuel Co. vs. Chicago M. & St. P. Ry. Co., 16 I. C. C. Rep. 95, 96. Wholesale Fruit & Produce Ass'n vs. A. T. & S. F. Ry. Co., 14 I.e. C. Rep. 410, 421. Railroad Com. of Ohio vs. Wheeling & L. E. Ry. Co., 12 I. C. C. Rep. 398; Rail & River Coal Co. vs. B. & O. R. R. Co., 14 I. C. C. Rep. 86. Re Allowances to Elevators, 12 I. C. C. Rep. 85. Cattle Raisers' Ass'n vs. Mo. Kan. & Tex. Ry. Co., 12 I. C. C Rep. 1, 3. Hastings Malting Co. vs. Chicago, M. & St. P. Ry. Co., 11 I. C. C. Rep. 675. Tift vs. So. Ry. Co., 10 I. C. C. Rep. 548, and. Central Yellow Pine Ass'n. vs. 111. Cent. R. R. Co., 10 I. C. C. Rep. 505, where an advance was declared illegal, and Southern Pine Lumber Co. vs. So. Ry. Co., 14 I. C. C. Rep. 195, where the full ad- vance was decided to be the measure of reparation. Cary vs. Eureka Springs Ry. Co., 7 I. C. C. Rep. 286, 319. Freight Bureau of Cincinnati vs. Cincinnati N. O. & T. P. Ry. Co., 6 I. C. C. Rep. 195, 4 I.C. Rep. 592, 617. Merchants Union of Spokane Falls vs. N. Pac. Ry. Co., 5 I. C. C. Rep. 478, 4 I. C. Rep. 183, 198. Murphy, Wasey & Co. vs. Wabash R. R. Co., 5 I. C. C. Rep. 122, 3 I. C. C. Rep. 725, 726. Coxe Bro. & Co. vs. Lehigh V. R. R. Co., 4 I. C. C. Rep. 535, 577 578 L. & N. r'. R. Co. vs. U. S. 238, U. S. 1. I. C. C. vs. L. & N. R. R. Co., 227 U. S. 88. So. Pac. Co. vs. I. C. C, 219 U. S. 433. So. Pac. Co. vs. I. C. C. 215 U. S. 226. I. C. C. vs. C. & A. R. R. Co.. 215 U. S. 479. I. C. C. vs. I. C. R. R. Co., 215 U. S. 452. I. C. R. R. Co. vs. I. C. C, 206 U. S. 441, 454. C. H. & D. R. R. Co. vs. I. C. C, 206 U. S. 142, 149. I. C. C. vs. C. N. O. & T. P. Ry. Co.. 167 U. S. 479. C. N. O. & T. P. R. R. Co. vs. I. C. C, 162 U. S. 184. T. & P. Ry. Co. vs. I. C. C, 162 U. S. 197. L. & N. R. R. Co. vs. I. C. C, 195 Fed. Rep. 541, 564. A. T. & S. F. Ry. Co. vs. I. C. C, 190 Fed. Rep. 591, 594. L. & N. R. R. Co. vs. I. C. C, 184 Fed. Rep. 118, 122. Phila. & R. Ry. Co. vs. I. C. C, 174 Fed. Rep. 687, 688. INTERSTATE COMMERCE LAW 221 M. K. & T. Ry. Co. vs. I. C. C, 164 Fed. Rep. 645, 648. Am. Sug. Refg. Co. vs. D. L. & W. R. R. Co., 207 Fed. Rep. 733. C. &'a. R. R. Co, vs. I. C. C, 173 Fed. Rep. 930. Mo. River Rate Case, 171 Fed. Rep. 680. Pitcairn Coal Co. vs. B. & O. R. R. Co., 154 Fed. Rep. 108. Logan Coal Co. vs. P. R. R. Co., 154 Fed. Rep. 497. So. Pac. Ter. Co. vs. I. C. C, 166 Fedi Rep. 134. D. L. & W. R. R. Co. vs. I. C. C, 166 Fed. Rep. 498. Stickney vs. I. C. C, 164 Fed. Rep. 638, 644. Kiser vs. C. of Ga. Ry. Co., 158 Fed. Rep. 193, 198. Farmer's L. & T. Co. vs. N. P. R. R. Co., 83 Fed. Rep. 249, I. C. C. vs. L. V. R. R. Co.. 74 Fed. Rep. 784, 787. I. C. C. vs. L. & N. R. R. Co., 73 Fed. Rep. 409, 414, I, C. C. vs. Detroit G. H. & M. R. R. Co., 57 Fed. Rep, 1005. K. &. I. Bridge Co. vs. L. &. N. R. R Co., 37 Fed. Rep. 567, 613. C & C. Trac. Co. vs. B. & O, S, W. R. R. Co., 20 I. C. C. Rep. 486, 490. Marshall Oil Co. vs. C. &. N. W. Ry. Co., 14 I. C. C. Rep. 210. Pa. Millers' State Ass'n. vs. P. &. Ry. Co., 8 I. C. C. Rep. 531. Dallas Frt. Bu. vs. M. K. & T. Ry. Co., 12 I. C. C. Rep. 427. Ashland Fire Brick Co. vs. S. Ry. Co., 22 I. C. C. Rep. 115, 121. Mobile, etc., vs. M. & O. R. R. Co., 23 I. C. C. Rep. 417, 421. Cosby vs. Richmond Transfer Co., 23 I. C. C. Rep. 72, IT . Sunderland Bros. Co. vs. S. L. & S. F, R. R, Co., 23 I. C. C. Rep. 259, 261. Porter vs. St. L. & S. F. R. R. Co., 15 I. C. C. Rep. 1. Pacific Coast Lumber Mfrs. Ass'n vs. Nor. Pac. Ry. Co., 16 L C. C. Rep. 465. N. Y. C. & H. R. R. R. Co, vs. L C. C, 168 Fed. Rep. 131. Loup Creek Colliery Co. vs. Virginian Ry. Co., 12 I. C. C. Rep. 471. Southwestern Produce Co. vs. W. R. R. Co., 20 L C. C. Rep, 458, 461. Commutation Rate Case, 21 L C. C. Rep. 428, 429. Re Rates on Lumber, 21 I. C. C. Rep. 16. Re Suspension of Rates on Packing House Products, 21 L C. C, Rep. 68, 70. §4. What Constitutes a "Reasonable Rate"? What is a reasonable rate? Is a rate unreasonable because it does not pay its full share of taxes, fixed charges, and dividends? At the end this is the question to which we come in a case involving the reasonableness of a rate per se. The carriers themselves, having fixed the rates under the mandate of the law that they shall establish just and reasonable rates, have they justified higher rates by a showing that the existing rates which they had thus 222 AMERICAN COMMERCE ASSOCIATION established fall short of meeting expenses which the car- rier must bear, not only for transportation but to secure an adequate return upon its property? Let us see where this doctrine would lead to. If a carrier may raise all its rates to a basis where each will bear its share of cost, including all costs, and no lower rate is rea- sonable, then it must follow that all rates are unreasonable which yield to the carrier a greater return than such cost. Under such a theory what would be the rate on tea or silks, or hig-h-priced horses, or delicate machines? Is there to be no classification of freight excepting upon the basis of cost of transportation plus insurance risk? If so, the tariffs of every railroad in the United States must sufifer a revo- lutionary change. In all classifications of property for transportation, con- sideration must be given to what may be termed public policy, the advantage to the community of having some kinds of freight carried at a less rate than other kinds. And this is essentially the only competent meaning of the much-abused phrase, "what the traffic will bear." It expresses the consideration that must be shown by the traffic official to the need of the people for inter- course in certain commodities. He accordingly imposes a higher rate upon what may be termed luxuries as com- pared with that imposed upon those articles for which there is a more universal demand. He also gives consid- eration to the fact that the rate so imposed enters into the ultimate price to the consumer to but a small degree when the article is one of high value, and that those in the com- munity who can afford to purchase such article can well afford to pay a rate greater than that which could reason- ably be imposed upon the general public for commodities of common use. In this sense what the traffic will bear and the value ' INTERSTATE COMMERCE LAW 223 of the service are analogous. No one would claim that a carrier was violating its duty under the law in charg- ing three times the rate upon Oriental rugs that it im- posed upon cotton. This would not be undue discrim- ination as between commodities, even though it costs no more to transport the rugs than it did the cotton, assuming both to be carried at the owner's risk, for the one does not compete with the other, and one of them may reasonably bear a higher rate than the other, without con- travening the propriety of public policy. The Commission, therefore, under the amendment to section 1 passed by Congress in 1910, giving to it the con- trol of freight classification, has power to determine the reasonableness of the differences that are made between the rates made applicable to the various kinds of commod- ities transported. It may not say that a rate shall be fixed so as to meet the requirements or needs of any body of shippers in their efforts to reach a given market, nor may it establish rates upon any articles so low that they will not return out-of-pocket cost. Neither may it fix an entire schedule of rates which will only yield an inadequate re- turn upon the fair value of the property used in the service given. There is, however, a zone within which it may properly exercise "the flexible limit of judgment which be- longs to the power to fix rates." These are the words of the Chief Justice of the Supreme Court of the United States (206 U. S. 26). There is no flexible limit of judgment if all rates must be upon a level of cost, and out of every dollar paid to the carrier must come a fixed amount of return for capital invested. The recognition of such a doctrine has never been suggested either by Congress or the Supreme Court. A just and reasonable rate must be one which respects alike the carrier's deserts and the character of the traffic. 16-15 224 AMERICAN COMMERCE ASSOCIATION It can not be a rate that takes from the carrier a profit and thus favors the shipper at the carrier's expense, nor is it one which compels the shipper to yield for the trans- portation given, a sum disproportionate to the service rendered to the shipper. The words "just and reasonable" imply the application of good judgment and fairness, of common sense, and a sense of justice to a given condition of facts. They are not fixed, unalterable, mathematical terms. Their meaning implies the exercise of judgment, and against the improper exercise of that judgment the Constitution gives protection. Investigation and Suspension Docket Nos. 26 to 26C., 22 I. C. C. Rep. 604, 623. The following discussion of the reasonable rate and cost of service, from the report of the Commission in Advance in Rates— Western Case, 20 I. C. C. Rep. 307, 347, is of such instructive value as to justify its quotation: "What is the reasonable rate that shall be charged to the shipper? The legislature may not make rates so as to confiscate the carrier's property. The car- rier, on the other hand, may not make rates which are unjust to those who by economic necessity are com- pelled to employ its services. Here, then, we have the minimum of legislative power and the maximum of the carrier's power. Between these lies a zone, in- definite and variable. Without question the carrier will tend toward the maximum, while governmental authority will be inclined — in fact, has been created — to repress this upward tendency. One moves inevita- bly upward to the highest rate which the traffic will bear; the other attempts to discover some relation between charge for service and cost of service. "The present record is full of contrasts between these two lines of tendency. The carriers, for in- stance, gave the following as their full justification as to the reasonableness of each and all of the proposed INTERSTATE COMMERCE LAW 225 advanced rates in and of themselves : 'In making up the tariff,' said the vice president of the Burlington road (and all other carriers adopted tliis testimony as their own), 'we considered each individual item, and we made no increase which in our judgment would materially affect the movement of the business or place an undue burden on the traffic. I think that the present rates were originally established to meet in many cases conditions that no longer exist, and that the same necessity from a commercial standpoint does not exist now as it did when the rates were originally established, and that' as a rule the value of the com- modity is greater, and the shipper and consignee are both better able to pay approximately the same rate today than they were to pay these special commodity rates when they were originally established. We, as I have stated, advanced no rate beyond a figure which in our judgment it could stand and freely move.' A full hearing was extended to all carriers as to the rea- sonableness from its standpoint of each rate involved, with no further result than this one answer. "The Supreme Court has said that one of the ele- ments which should be given consideration in the establishment of a reasonable rate was the cost of the service, Smyth vs. Ames, supra, but this is regarded by railroad men as an almost negligible factor. " 'I think,' said Mr. Ripley, 'that the cost of service is only one of the items to be considered in the mak- ing of a reasonable rate, and not a very important item at that — either the cost of service or the returns made on capital. I think that while they may be con- sidered under certain conditions they are remote.' And again, 'I think that the cost of the service has very little consideration in the making of rates. Rates are made without a consciousness on the part of the carrier's agent of the return that these rates will bring.' "This is the purport of more of Mr. Ripley's testi- mony, and it is to be remembered in this connection that Mr. Ripley's experience as a traffic manager has Ic. 226 AMERICAN COMMERCE ASSOCIATION extended from the Atlantic to the Pacific coast and over several great systems of railroad. 'The maker of the rate,' he says, 'in the first instance must make the rate such as to permit of the freest intercourse and the freest interchange of commodities in the coun- try, regardless of capital, regardless of cost — almost regardless of cost, but entirely regardless of capital.' Then being asked as to whether the Commission should make rates after this railroad fashion, he said, T think they (the Commission) should consider the value of the service first and foremost and leave the cost and the value of the properties to altogether sec- ondary consideration.' He was asked if he had said that the making of freight rates 'has not, never did have, never will have, never ought to have, any rela- tion to the capitalization of the railroads,' to which he replied that this was a correct expression of his views. ''Discarding the elements of cost and capitalization, he was asked to define a reasonable rate, and replied that it was one that the traffic would bear, 'and the amount that the traffic would bear,' he said, 'is that amount of charge at which it will most freely move over the lines of transportation.' This definition he again repeated when he was asked if the phrase, 'what the traffic will bear,' meant the rate at which the com- modities would 'most freely move over the lines of the carrier,' to which he replied, 'I will qualify that by saying, 'What the traffic will bear and still move most freely and enable the products and the manu- factures of one part of the country to be used to the utmost possible extent in the other.* "This is the latest, the most modern, and the most liberal definition of this much-abused phrase. Indeed, it is so liberal that it is impracticable unless properly qualified. Mr. Ripley would not have us understand that a railroad is an eleemosynary institution. To say that a reasonable rate is one under which the traffic will most freely move is to say that it is the rate which casts the least burden upon the shipper. The INTERSTATE COMMERCE LAW 227 rate that will carry the traffic farthest for the smallest amount of money — the lowest possible rate. But all of the time there is present in the mind the necessity of securing out of all of such rates not only the cost of transportation, which Mr. Ripley regards as neg- ligible, but an adequate return upon the value of the property used. While this definition, therefore, sounds to the ear most philanthropic, it was doubtless not intended to convey any more subtle or philosophic meaning than this: That an individual rate should not be made with reference to the cost of the service to the railroad, nor should it be made with regard to the return which it would yield to the capital invested in the plant. It should be made so low that as great a body as possible of that character of traffic should move, but all the time there must be borne in mind the fact that out of its aggregate rates the property must be made to pay. This is the American system of railroad rate making. " 'What the traffic will bear' may mean 'all that the traffic will bear.' If it means that the rate must be measured by the amount that the shipper is willing to pay under necessity, it is extortion. On the other hand it may mean the least return for which the car- rier can afford to transport the traffic. This theory of rate making seems to be that there is a certain amount of traffic which can be developed; that there is a certain volume of traffic which is to be moved, or which can be moved ; that the rate should not be so high as to prevent any of this traffic from moving, nor should it be a lower amount than the carrier can ob- tain and still permit the freest possible movement. Such definition apparently makes the rate entirely a matter of judgment as to which there may be error. And, carried to its last degree, it permits indefinite discrimination between individuals, as well as between communities, for if the rate is to be made so as to per- mit the freest possible movement one shipper may not be able to extend his market at the rate given to another. Therefore he is entitled to a rebate. And 228 AMERICAN COMMERCE ASSOCIATION the more distant community may not be able to com- pete with the nearer community for a common mar- ket. And therefore it is entitled to a lower rate than its more advantageously situated competitor. The experience of the commercial w^orld led to the enact- ment of the Act to Regulate Commerce which inter- fered with the full application of this theory, and we, of course, assume that Mr. Ripley stated his principle of rate making, not only with the limitation we have already noted — that rates were to be made so that, as a whole, they yielded adequate return to the carrier — but with the further limitation that they must be sub- ject to the prohibitions of the law. Manifestly, under this principle all that stands between the shipper and extortion is the wisdom and the good sense of the traffic manager w^ho makes the rates. If, in his judg- ment, it is advisable to carry a small volume of traffic upon a high rate, rather than a large volume of traffic upon a low rate, there is nothing to interfere with this decision, and all the consequences affecting the country at large, excepting now the right of appeal to the Government as represented in this Commis- sion. "Rates being made upon this theory, the function of the traffic manager is that of a statesman; he deter- mines zones of production and consumption, the profits of the producer and the cost to the consumer; he makes his rates, if he so pleases, to offset and nullify the effect of import duties and determine the extent and character of our foreign markets. "To make rates for transportation based solely upon the ability of the shipper to pay those rates is to make the charge for transportation depend upon the cost of production rather than upon the cost of carriage — to measure a public service by the economies practiced by the private shipper. This necessarily gives to the carrier the right to measure the amount of profit which the shipper may make and fix its rate upon the traffic manager's judgment as to what profit he will be permitted. This theory entitles the railroad to INTERSTATE COMMERCE LAW 229 enter the books of every enterprise which it serves and raise or lower rates without respect to its own earnings but solely with respect to the earnings of those whose traffic it carries. This is not regulation of railroads by the nation, but regulation of the indus- tries and commerce of the country by its railroads." § 5. Reasonableness of Rates per se. The preceding section is strikingly emphatic of the lim- ited benefits to be derived from a determination of the reasonableness of a rate per se. That is, in and of itself, that it does not represent more than the cost of the ser- vice plus a reasonable proportionate return upon the value of the carrier's property and that it pays its full share of taxes, fixed charges, and dividends. There are instances, nevertheless, when the conditions of facts warrant the ascertaining of the reasonableness of rates per se. The elements of evidence essential to such a hearing have been referred to heretofore. But the mathematical process of determining such value in a rate has not thus far been developed. In fact, it has been strongly intimated that the ascertainment of such values is not possible with practical accuracy. It can not, it is true, be accomplished with precise accuracy, but with very substantial fairness. On this important phase of rate analysis, the Railroad Commission of Wisconsin, which has given this question searching consideration, said. In re Rates on Wood Pulp, Decisions R. R. Com. of Wis., No. 89, pages 57-59: "To determine even the approximate cost per unit of transportation to the carriers is very difficult, and can only be done through a series of long and compli- cated calculations, most of which have been explained in former decisions. The first step necessarily in- volves a separation of the expenses between the different branches of traffic. Complicated as this is, 230 AMERICAN COMMERCE ASSOCIATION it is yet our judgment that it can be accomplished with a fair degree of accuracy and in a manner that is fair to all concerned. The next step is to separate the expenses on the basis of which the traffic is handled, that is, between the cost of handling the traffic at the terminal and the cost of moving it between the ter- minals. In this case, as in the case of separating the expenses between the different branches of traffic, many items are met with which are common to both sides, and which do not readily admit of exact distri- bution. But even these difficulties may be overcome. Upon close and detailed examinations of the various factors involved, some way can usually be found in which the common items can be fairly and equitably assigned. This is not a matter of opinion merely, but has been shown to be so in actual practice. The next step consists of finding some units upon which the various classes of these expenses, or the terminal and movement costs, can be pro-rated, and the gross and net cost per any given quantity of the traffic deter- mined. The best units for this purpose would seem to be the loaded car. This must necessarily be so since freight is usually handled and moved in carloads. The terminal costs, for instance, may be pro-rated on the number of these cars and the movement expenses on their mileage. "When the cost per car in turn for terminal ex- penses is pro-rated upon the freight in the car, the amount of these expenses to each unit of the traffic -is obtained. When the cost per loaded car per mile is pro-rated on the weight of both the car and the load, the average cost per gross ton per mile of haul is found. This cost per gross ton, or other unit, can be used as the basis upon which the movement ex- penses per net ton or other unit is computed. Under these methods it is possible to determine the average cost per net unit of traffic of handling the freight at the terminals, as well as of moving it between the terminals. Furthermore, it is possible from the data as a whole to ascertain these costs under various kinds INTERSTATE COMMERCE LAW 231 of loading or for lighter as well as for heavier loading. ''The fourth step involves such an adjustment of these costs as to apply to local as well as through business. In these operations, however, the terminal expenses are not involved. It is perfectly clear that these costs have no relation to the length of the haul. They appear to be as great for a carload going a hun- dred miles as for one going five hundred miles. The movement costs, however, vary with the distance and not far from in the same proportion. But the cost of handling way freight which makes frequent stops and slow time is relatively much greater than the cost for through freight or traffic which is moved through from one place to another on faster schedules. To determine the difference in the cost as between through and local traffic, like all other apportionments of expenses, is far from any easy matter, but under a complete analysis of both the expenses and operating conditions it can be done in a manner that would seem to be fair all around. "In this matter it is possible to obtain approxi- mately correct ideas of the cost per unit to the carrier for handling the traffic. This cost is undoubtedly the most important element in rate-making. This is par- ticularly true since it is possible to ascertain the same for less than carload as well as for carloads, or for both smaller and larger shipments. The value of the products is an element that in importance in this re- spect is second only to the cost. As already pointed out, articles of high value can fairly bear higher rates than low-priced ones, and in view of this fact it is only just that the charges levied for transportation should be relatively greater in the former case." It is a rare case where the question of reasonableness of rates per se is advanced by the carrier itself in justifica- tion of their advance. Such a case occurred, however, in Investigation and Suspension Docket Cases Nos. 26 to 26C, from which we have quoted in the last preceding sec- tion, and while the formula suggested by the Wisconsin 232 AMERICAN COMMERCE ASSOCIATION Commission was not worked out with the approximate accuracy which might be anticipated, the application of the doctrine is easily followed. The case involved a sus- pension by the Commission of coal rates applying from the West Virginia coal fields to lake ports, which the Norfolk & Western Railroad Company had attempted to advance. Other lines were also parties to the case because of attempted advances. From November, 1910, to March, 1911, the Chesapeake & Ohio Railway Company, Baltimore & Ohio Railroad Company, Norfolk & Western Railway Company, the Kanawha & Michigan Railway Company, and their con- nections, filed with the Commission tariffs advancing their rates upon lake coal, which is coal originating in the West Virginia coal fields and moving during the season of open navigation on the great lakes to various ports on Lake Erie for transshipment by vessels beyond. The Norfolk & Western Railway Company alone justified the advance in rates and in the proceedings before the Commission established, with approximate accuracy, the cost of trans- porting coal over its lines. The Norfolk & Western Railway Company had for many years maintained a system similar to that which prevails on the Santa Fe, of making a separation between passen- ger and freight traffic and allotting to each the separate and distinct charges applicable thereto. These accounts of cost were kept as to each of the divisions of the road extending from Norfolk, Va., on the east, to Columbus, Ohio, on the west. They showed that the carriage of all freight resulted in a cost per ton per mile of approximately 2.28 mills on the line between Bluefield and Columbus, which consisted of the Pocahontas, the Kenova, and the Scioto divisions. The coal transported over this line INTERSTATE COMMERCE LAW 233 amounted to 60 per cent of the entire traffic, 20 per cent being coke and the remaining 20 per cent general mer- chandise. The per car tonnage factors were, respectively, coal 45, coke 32.2, and general merchandise 17.35 tons per car. The 2.28 mills per ton, cost of moving all freight, included the charge of concentration peculiar to the coal traffic. The estimates of costs for carrying coal on the Bluefield-Columbus line were: Pocahontas Division, 2.905 mills; Kenova Division, 1.691 mills; and the Scioto Division, 1.893 mills per ton per mile. The fair average of these cost factors was 2 mills per ton per mile for the carrying of coal upon the Bluefield-Columbus line, but this was not all of the cost of hauling lake coal, for there had to be apportioned to it a proper share of interest, taxes, and dividends. Severe contention arose over the fixing of the value of the property used for handling this particular traffic. The book cost of the system was generally accepted as the basis by the experts. While the books revealed the total book cost of the system at $130,000 per mile of main line, they did not disclose the actual cost of the Bluefield- Columbus line. The carrier contended for a composite figure which so nearly approximated the ton-miles of this portion of the system to the ton-miles of the whole sys- tem that this figure was taken as expressing the value of the line from Bluefield to Columbus, which was 48 per cent. The Norfolk & Western Railway Company was, .at the time of the hearing, 1,542 miles in length, of main line, and the Bluefield-Columbus line 346 miles in length, of main line. The 346 miles of the Bluefield- Columbus line was credited with 48 per cent of the value of the whole because of the density of its traffic. There was no doubt but that this portion of the road, the very 234 AMERICAN COMMERCE ASSOCIATION heart of the system, probably cost more than any other part of the system to construct. The branch lines on this section constituted 56 per cent of the total branch lines of the system, 395 miles. The second track on the Blue- field-Columbus Hne was 59 per cent of the system's second track of 348 miles; and the sidings were 47 per cent of the system's sidings of 996 miles. Thus was made up a track mileage, Bluefield to Columbus, which was 38 per cent of the total all-track system mileage of 3,283 miles. There was a difference of opinion as to the balancing of all sid- ings, branches, and second tracks against main-line mile- age, and those experts who thought such a balance unfair credited the Bluefield-Columbus line with 34 per cent of the total cost of the system, the figure being arrived at by adding main-line, second-track, and branch-line mileage alone. Thus something less than one-fourth of the main- line mileage was estimated as worth slightly more than one-third of the value of the system. Therefore, to the approximate cost of 2 mills per ton per mile for the haul- ing of coal over the Bluefield-Columbus Hne, an additional 1 mill was added in order that the coal on a tonnage basis should bear its full percentage of the taxes, interest, and dividends, distributable to all freight upon this line. This 1 mill was added under the 48 per cent division of cost of the Norfolk & Western Railway Company, but on the 34 per cent basis the addition would have been but 0.75 of a mill. Such an allowance for fixed charges and dividends placed on this lake-cargo coal its full percentage of such costs allotable to all freight and disregarded the value of the commodity hauled and the fact that the rate was made as a portion of a through rate upon traffic moving over the lakes and farther into the northwest by rail, which therefore rendered the charge analogous to a division of INTERSTATE COMMERCE LAW 235 the through rate. It is a commonly expressed belief that two-thirds of a railroad's revenue goes for operating and maintenance expenses and the other third for return upon the plant. This theory was apparently proved by the ratios on the Bluefield-Columbus line ; 2 mills for operat- ing and maintenance, and 1 mill for revenue, show how nearly this formula is correct. It was shown that the freight-operating ratio of the Norfolk & Western Railway Company was 54.72 for the Bluefield-Columbus Hne, for 1910, and 59.61 in 1911, the all-system ratio in 1910 being 58.54. The Commission, in its report in this case, announced with particularity its conclusions as to the justification of the Norfolk & Western Railway Company's proposed advances in rates on lake coal and set forth with analyt- ical precision the cost and revenue factors and ratios deter- minative of the reasonableness of the rates. While the Commission has since more stringently searched the cost and revenue ratios of transportation rates involved in investigations of tremendous scope, the results obtained are less of mathematical potency than the facts established in the Norfolk & Western case. In the latter case, the Commission said: "We meet in this case the interesting question which for the first time is presented to the Commis- sion — the right of a carrier to increase its rates upon a large volume of traffic solely because such traffic does not bear a certain proportionate share of the re- turn which the carriers make upon their stock. It is to be noted, (1) that there is no claim that the carrier under present rates does not receive full return upon the value of its property, (2) if the proposed rates go into effect and the present volume of traffic to the lakes is maintained the return at present received will 2HG AMERICAN COMMERCE ASSOCIATION be much increased, (3) the carrier does not propose to reduce its rates upon any coal or other commodity, and (4) it would appear to follow that whenever a carrier finds that it is carrying traffic which does not yield its proportionate share of fixed charges and divi- dends as it may always do as long as freight is classi- fied it may increase the rates on such traffic up to the point where all traffic, and this means each particular kind of traffic, yields the same net return above cost of its movement to the carrier. "This contention, however, the president of the Norfolk & Western disavows. Being asked, 'Do you think that if the average cost of doing all the business on a railroad is taken into consideration, and it is shown that any class of business like the coal business is paying something less than that average cost or only slightly more, it would follow that those rates are too low?' he replied, T think this, that when the indi- vidual commodity and rate are taken, and it is demon- strated that over a certain section of the line on which that particular commodity is transported under iden- tically the same conditions, the same plant is em- ployed, with a condition that prevails as it does in this particular instance absolutely alike for a large per- centage of the tonnage handled over a particular part of the railroad, as we are undertaking to show here, I believe that the principle that I have enunciated is a correct one and that the business of this company can be done in that way without injury to any of the interests. I do not mean to carry out this principle on every kind of traffic over every line of road, but I am trying to show that here is a case where it can be done, and it is the only equitable basis on which this rate ought to be made.' Counsel for the Norfolk & Western, in their brief, comment upon his statement as follows : 'Thus Mr. Johnson is not contending that over an entire railroad system on the numerous and varied classes of traf^c and commodities the basis which he has mentioned should apply. On this par- ticular division, however, he compares lake-coal traffic INTERSTATE COMMERCE LAW 237 with similar traffic and finds that what his company receives from the lake rates is very much less than on any other classes of its coal traffic or on any other similar commodities. Again, Mr. Johnson states that he does not contend as an abstract proposition, ap- plied to an entire system, that no class of traffic can under any circumstances be carried for less than its full share of the cost of operating and maintaining the railroad, but he does contend that where a comparison is made of lake coal with the other coal traffic, and it is discovered that the lake coal returns a very much- smaller revenue than the other coal traffic, this is a material matter and one which justifies an advance in the lake rates.' * * * "According to the figures furnished by the Norfolk & Western, the cost of carrying all freight over the Bluefield-Columbus line is 2.28 mills per ton per mile. This is lower than the average cost of carrying all freight over the balance of the system, for this is stated by the carrier to be 2.95 mills. We have then as cost these two figures, 2.28 mills for the Bluefield- Columbus coal, including lake coal, and 2.95 mills for all other coal, assummg that the cost of carrying coal on all other portions of the line equals the cost of carrying all freight on all other portions of the Hne, which is the assumption that the carrier has proceeded upon as to the Bluefield-Columbus line. "We now pass to all coal excepting the coal carried over the Bluefield-Columbus line. This yields a rev- enue of 3.51 mills per ton-mile, and costs, we have assumed, to transport it 2.95 mills. Therefore all coal (coal carried short distances or into exclusive non- competitive territory or in single carloads and switched to industries, as well as the transshipped by ocean) costs 84 per cent of its revenue, while lake- cargo coal costs 82.6 per cent of its revenue. Thus •the Norfolk & Western receives as a profit, over and above costs, 17.4 per cent on lake-cargo coal. Blue- field to Columbus, while on all coal over the balance of the system it receives only 16 per cent above cost. 238 AMERICAN COMMERCE ASSOCIATION "The carrier shows also that the earnings per ton- mile on coal from the Pocahontas field eastward to the Atlantic seaboard for shipment beyond the port for 1910 was 3.187 mills. It also shows that the cost per ton-mile of all freight on the line from Bluetield to Norfolk over which this coal moves was 2.136 mills, thus showing that the ratio of this cost to the revenue is 67.02 per cent as compared with 82.6 per cent on the lake-cargo coal. However, it must be borne in mind that the cost, Bluefield to Norfolk, of 2.136 does not include any of the extraordinary cost of con- centrating the coal which passes over this division. That entire cost of concentration is borne in the Pocahontas division on the Bluefield-Columbus line, the entire expense thereof thus being made a charge upon the coal between Bluefield and Columbus. To make a fair comparison of cost revenue on coal des- tined to Norfolk, on the one hand, and that des- tined to Sandusky on the other, it becomes neces- sary' to add to the cost of all freight, Bluefield to Norfolk (2.136 mills), a proper charge for concen- trating coal, which is estimated from figures furnished by the carrier to be .414, approximately four-tenths of a mill per ton per mile, thus making the total cost of the coal, Bluefield to Norfolk, 2.55 mills, which is 80.01 per cent of the revenue of 3.187 mills, approxi- mately the same ratio of cost to revenue as on the lake- cargo coal (82.6). "Another way of comparing the ratio of all freight cost to revenue of the coal destined beyond the capes from Bluefield to Norfolk with the coal destined be- yond Sandusky, between Bluefield and Columbus, is to contrast the cost of all freight, Bluefield to Norfolk (2.136 mills) with the main-line cost of all freight from Bluefield to Columbus (1.939 mills). Between Blue- field and Norfolk this main-line cost is 67.02 per cent of the 'beyond-the-capes' revenue of 3.187 mills, while the main-line cost, Bluefield to Columbus, is 70 per cent of the lake-cargo revenue of 2.76 mills. "By way of illustrating the revenue received by this carrier from the transportation of coal with that re- INTERSTATE COMMERCE LAW 239 ceived from the transportation of other commodities, the Commission asked the Norfolk & Western to fur- nish it with the earnings received from a train of 35 cars of through merchandise from Norfolk to Colum- bus and another from Norfolk to Bristol. "From these figures it would appear that for the haul from Norfolk to Columbus, 707 miles, the Nor- folk & Western receives less per car-mile for trans- porting sugar, ammunition, canned goods, or even dry goods than it does for transporting coal over the Bluefield-Columbus line, 330 miles. While the aver- age earnings per car-mile from Norfolk to Bristol, 408 miles, on a train of 35 cars, consisting of 5 cars of sugar, 1 of potatoes, 1 of hides, 1 of ammunition, and the remainder of general merchandise, were 7.92 cents, the average revenue on lake coal, Bluefield to Columbus, 330 miles, was 10.58 cents. The earnings averaged per train-mile on the train of merchandise ^2.77, and on the train of 35 cars of coal $3.02. The 35-car train from Norfolk to Columbus, 707 miles, of general merchandise yielded earnings of $1,237.70, while the same number of cars of lake coal from Blue- field to Columbus, 330 miles, yielded $1,222.76. The train of 35 cars of merchandise from Norfolk to Bris- tol, 408 miles, brought earnings of $1,132.16, w^hile the same number of cars of lake-cargo coal from Bluefield to Columbus, 330 miles, earn $1,222.76. Thus we dis- cover that, while the rate per ton per mile on the carriage of lake-cargo coal appears extremely low, the real earnings of the car or the train compare most favorably with the earnings upon the highest class of freight which the railroad carries. "There could be no better illustration than this of the fallacy of placing reliance upon ton-mile earnings as a basis of rate-making. As the Commission has heretofore found in many cases a much fairer basis is that found in the earnings per car-mile and per train- mile. Much of the profitable freight carried by the railroads of the United States, and perhaps this might be made broader and it could be truthfully said that 16—16 240 AMERICAN COMMERCE ASSOCIATION most of the freight which pays the carriers the best is that which yields the lowest rate per ton-mile. This arises out of many facts which the traffic manager takes into consideration, the volume of the traffic, the heavy load per car, and the regularity of movement. Some of the roads here concerned are among the most prosperous in the country, and yet their rate per ton- mile is lower than that of many which enjoy no such prosperity." Re Transportation of Coal 22 I. C. C. Rep. 604, 617. Compare : Cattle Raisers' Assn. vs. Missouri F. & T. Ry. Co., 11 I. C. C. Rep. 296, where the Commission discussed the following elements bearing on the reasonableness of specific rates, but with purely relative results: Terminal cost at points of origin and destination, cost and maintenance of equipment, cost of loading, unloading, and reloading, such as watering, feeding, and resting stock in transit, character of the move- ment, number of cars in train, average load per car, volume and desirability of the traffic, return of empty cars, liability of the traffic to damage, cost of carriage, increased cost of producing live stock, decreased selling price, method of making the advanced rates, disappearance of competition, cost of railroad labor and supplies, improved methods of railway operation, increase in traffic mileage revenue per ton per car and per train, and other conditions and circum- stances bearing on the cost of transportation. The problem of estimating the cost of transporting specific commodities is at best in a developmental stage. The most important step in the direction of measuring the reasonableness of a rate in and of itself is the physical valuation of the railroad properties now being prosecuted by the Commission, the result of which, however, will be realized sometime in the future. It is generally believed that this colossal task will not be completed for some vears. It is obvious that the carriers in the past have not con- ducted their rate making parallel with studies and analyses of comparative transportation costs. That the trend of INTERSTATE COMMERCE LAW 241 regulation, however, is firmly set toward the determina- tion of the reasonableness of rates per se is clearly ap- parent from a close study of the more recent rate investi- gations conducted by the Commission. Eastern Live Stock Case, 36 I. C. C. Rep. 675, 689, 690, 693. Rates for Transportation of Anthracite Coal, 35 I. C. C. Rep. 220, 261, 263, 264, 265, 347, 348, 352, 362, 363. Western Rate Advance Case, 35 I. C. C. Rep. 497, 450, 561, 569. Car Spotting Charges, 34 I. C. C Rep. 609. Five Per Cent Case, 31 I. C. C. Rep. 351. Much valuable accounting data and information is now available to the Commission in proceedings involving rea- sonableness of rates resulting from the system of carriers' accounts promulgated and enforced by the Commission. "Allocated expenses," such as engine service, yard office, salary expense, car detention expense, interest and main- tenance charges on facilities, are available for purposes of cost comparisons, while "unallocated expenses," such as general ofifice, traffic and transportation expenses, taxes, and other general expenses, may now be made of relative value in the distribution of the cost burden in rate-making. Rates for Transportation of Anthracite Coal, 35 I. C. C. Rep. 220, Appendix 352-362. Saginaw Milling Co. vs. Michigan Central R. R. Co., 33 I. C. C. Rep. 25, 27. Separation of Operating Expense, 30 I. C. C. Rep. 676. § 6. Relative Reasonableness of Rates. A transportation rate may be unreasonable, either per se, i. e., in and of itself, or relatively, i. e., in comparison with other rates. In the last preceding section attention has been drawn to the paramount difficulty attendant upon the determina- tion of the reasonableness of a rate per se. This difficulty is not encountered in the measuring of rates for their rela- tive reasonableness. The essence of relative reasonable- 242 AMERICAN COMMERCE ASSOCIATION ness in a rate is the comparison of such rate with a rate of known reasonableness. The term "known reasonable- ness" is perhaps ill-advisedly used. It might be the more accurate to say that the comparison should be made with a presumptively normally reasonable rate, for it is obvious that any comparison would achieve no more than a pre- sumptive relativity of the elements of reasonableness. The nearer identical the elements and conditions of traflfic in such comparisons the more accurate, of course, will be the result. Relative unreasonableness of a rate may arise from any one of a number of causes. It may proceed from the classification or the relation between commodity and class ratings or by reason of discrimination between particular kinds of traffic or between localities or indi- viduals. Since it is apparent that so much difficulty attends the determination of the reasonableness of a rate per se, it fol- lows that the Commission has invariably measured the reasonableness of rates relatively. The freight rates of this country, both upon different commodities and between different localities, are largely interdependent, and it is the fact that such rates do not bear a proper relation to one another rather than the fact that they are too high or too low, that most often gives cause for complaint. Early in its experience the "Commission became cognizant of the fact that the rate structures of the country were not machinations of the moment. The rates themselves and their relativity are the result of a process of slow evolu- tion. Industrial, commercial, and transportation condi- tions have proceeded from the very inception of the com- mercial railway in a state of interdependence. Their de- \elopment has been the occasion for the formulating and maintaining of vast structures of related transportation rates. The process has gone on until the point has been INTERSTATE COMMERCE LAW 243 reached where there seldom exists a specific rate which may stand except for the existence of other rates. Our entire national transportation rate structure is interwoven with local interregional and national rate structures solely interdependent one upon the other. The Commission has held that in the determination of the proper freight rate which must of necessity be charged by competing lines of railway, it must give consideration to this interdependence of rates and may not look exclu- sively to that line which can handle the traffic the cheapest or which is the strongest financially. It must give consid- eration as well to the weaker rival. In this the Commis- sion again encounters an equitable restraint because it may not fix the rate solely with reference to the weakest line, and it would be unjust to the public in the establish- ment of such a rate to consider merely the most expensive and circuitous route. Commercial Club, etc., vs. Santa Fe Ry. Co., 19 I. C. C. Rep. 218, 222. See also: 11 I. C. C. Rep. 238. If the rates on a particular commodity bear a uniform relation to the rates of a certain class, the inequalities in those rates as between different places are those peculiar to that class, and the Commission has therefore held that a finding that rates on such a commodity, made to conform to a class, are relatively unjust, would inferentially con- demn the adjustment with respect to the entire class. It is clear, therefore, that the interdependence of rates is a factor of the utmost importance in determining the reason- ableness of rates. Acme Cement Plaster Co. vs. L. S. & M. S. Ry. Co., 17 I. C. C. Rep. 30, 35. 2U AMERICAN COMMERCE ASSOCIATION § 7. Courts on the Reasonableness of Rates. As previously stated, it is not within the power of the courts to fix interstate transportation rates since such an authority is purely a legislative one. But like all other legislative action, the legislating of a rate, whether per- formed by the legislature itself or through an administra- tive body created by it, must be passed upon judicially when presented to the courts. The courts in their review of cases involving the rea- sonableness of rates have distinguished such cases into two classes — ^first, those cases where the legislative author- ity has been exercised and the rate fixed and in which the carrier seeking relief from the confiscatory effect of such legislatively established rate must assume the burden of proving that the state authority has fixed an unreason- able and confiscatory limitation upon the carrier's rates, and, second, those cases arising under the Act to Regulate Commerce upon complaint of an aggrieved shipper, and in which the burden is placed upon the complaining shipper to show that the carrier has exercised an unreasonable standard in the charges which it imposes and collects. In their judicial construction of transportation and rate legislation, the courts have not been uniform in their ad- ministration of legal principles. Indeed, at the present time, dire confusion exists between the decisions rendered by the state courts and the rulings of the federal judiciary. It may be truthfully said, however, that the supremacy of the federal judicial authority is gradually molding a new constructive legal code in the application of transporta- tion regulatory laws under which the state courts are grad- ually giving harmonizing effect to their holdings. The desired effect of uniform judicial construction of the regu- latory laws, however, has not been realized, although great INTERSTATE COMMERCE LAW 245 progress has been achieved in clarifying the legal situa- tion. The scope of this volume does not admit of a prolonged analysis of past judicial reviews of transportation regula- tion and, therefore, the references here made to decisions of the courts bearing upon the subject are illustrative rather than exhaustive. Not alone have the courts frequently applied the consti- tutional test to the regulatory acts, but have had presented to them, and passed upon, important economic phases of rate regulation. In the case of Smythe vs. Ames, 169 U. S. 466, the Supreme Court, in 1898, speaking of the basis of calculations to be used in determining the reason- ableness of transportation rates, said : "We hold, however, that the basis of all calculation as to the reasonableness of rates to be charged by a corporation maintaining a highway under legislative sanction must be the fair value of the property being used by it for the convenience of the public. And in order to ascertain that value, the original cost of con- struction, the amount expended in permanent improve- ments, the amount and market value of its bonds and stocks, the present as compared with the original cost of construction, the probable earning capacity of the property under particular rates prescribed by statute, and the sum required to meet operating expenses, are all matters for consideration and are to be given such weight as may be just and right in each case. We do not say that there may not be other matters to be re- garded in estimating the value of the property. What the company is entitled to ask is a fair return upon the value of that which it employs for the public con- venience. On the other hand, what the public is entitled to demand is that no more be exacted from it for the use of a public highway than the services ren- dered by it are reasonably worth." 246 AMERICAN COMMERCE ASSOCIATION In the same case, the court advocated two fundamental elements of reasonableness — the cost of the service to the carrier and the value of the service to the shipper. In many cases before the Commission, the latter principle has been followed so far as it may be said that any dis- tinctive principle of determining the reasonableness of rates has been observed by the Commission. In its first annual report, the Commission declared the cost of service principle to be untenable for the reason that it "would restrict within very narrow limits the commerce in articles whose bulk or weight was large as compared with their value." I. C. C. First Annual Report, pages 30 to 32. The federal courts have also declared the necessity of separating state and interstate traffic, both as to their cost and revenues, that neither may bear the burdens of the other. Thus spoke the court in Seaboard Air Line R. R. vs. Railroad Commission, 155 Fed. Rep. 792: "A state can not justify unreasonably low rates for domestic transportation considered alone upon the ground that the carrier is earning large profits upon interstate business, over which, so far as the rates are concerned, the state has no control, nor can the car- rier justify unreasonably high rates on domestic busi- ness on the ground that it will be able, in that way, to meet the losses on its interstate business. Domestic and interstate commerce, and the value of the prop- erty so devoted, must be kept separate in determining reasonableness of rates for domestic commerce." In those states where statutes have been passed reas- serting the common law requirement of reasonable trans- portation rates, thereby superseding the common law, and including in most instances provisions for the publication and submission of tariffs to an administrative body or INTERSTATE COMMERCE LAW 247 commission, it has been the judicial presumption that the standard of reasonableness has been created as of the rate established by publication and submission to the state commissioners and their approval of it for filing. Illus- trative cases referred to holding the presumption conclu- sive as to reasonableness of rates thus established and denial of the right of recovery for damages arising out of the alleged unreasonableness of such charges are of his- torical interest rather than of practical value at the present time. See in this connection: Windsor Coal Co. vs. C. & A. R. R. Co., 52 Fed. Rep. 716. Young Bros. vs. K. C, etc., R. R. Co., 33 Mo. App. 509. McGrew vs. Mo. Pac. Ry. Co., 144 Mo. 210. R. R. Co. vs. People, 11 III. 443. Sorrell vs. R. R. Co., 75 Ga. 509. Burlington, etc., R. R. Co. vs. Dey, 82 la. 312. In this connection it is important to note that the Inter- state Commerce Commission, upon general principles of comity, has always accorded due respect to the action of a state commission in fixing a rate on state traffic, but the national commission has never felt itself bound to accept a state-made rate as a necessary measure of the reason- ableness of an interstate rate. Pulp & Paper Mfrs. Traffic Assn. vs. C. M. & St. P. Ry. Co., 27 I. C. C. Rep. 83, 96. Highland Park Mfg. Co. vs. S. Ry. Co., 26 I. C. C. Rep. 67, 70. Waukesha Lime & Stone Co. vs. C. M. & St. P. Ry. Co., Id I. C. C. Rep. 515, 517. In re Investigation of Unreasonable Rates on Meats, 23 I. C. C. Rep. 656, 664. Investigation of Alleged Unreasonable Rates on Meats, 22 I. C. C. Rep. 160, 164. Willman & Co. vs. St. L. I. M. & S. Ry. Co., 22 I. C. C. Rep. 405. In re Advances in Rates, etc., 21 I. C. C. Rep. 546, 552. Baxter & Co. vs. G. S. & F. Ry. Co., 21 I. C. C. Rep. 647, 648. Cobb vs. N. P. Ry. Co., 20 I. C. C. Rep. 100, 103. Waco Freight Bureau vs. H. & T. C. R. R. Co., 19 I. C. C. Rep. 22, 26. 248 AMERICAN COMMERCE ASSOCIATION Saunders & Co. vs. Southern Express Co., 18 I. C. C. Rep. 415, 424. Commercial Club of Omaha vs. Anderson & Saline River Ry. Co., 18 I. C. C. Rep. 532, 536. Bartles Oil Co. vs. C. M. & St. P. Ry. Co., 17 I. C. C. Rep. 146. 148. R. R. Comm., etc., vs. C. & N. W. Ry. Co., 16 I. C. C. Rep. 85, 89, 91. ^ Fort Dodge Commercial Club vs. I. C. R. R. Co., 16 I. C C. Rep. 572, 579. Paola Refining Co. vs. M. K. & T. Ry. Co., 15 I. C. C. Rep. 29, 31, 32. Board of Mayor and Aldermen vs. V. & S. W. Ry. Co., 15 I. C. C. Rep. 453, 459. Marble Falls Insulator Pin Co. vs. H. & T. C. R. R. Co., 15 I. C. C. Rep. 167, 169. In the first Minnesota Rate Case, 186 U. S. 257, 46 L. Ed. 1151, the Supreme Court referred to the economic phase of transportation rate-making in a case where state estab- lished rates were under attack as to their reasonableness and discriminatory efifect, in the following language : "Each case must be determined by its own consid- erations, and while railroads are entitled to a fair return upon the capital invested, they are not justi- fied in charging exorbitant rates even in order to pay- operating expenses if the conditions of the country did not permit it. It sometimes happens that, for the pur- poses of ultimate profit and for building up a future trade, railways carry both freight and passengers at a positive loss; and while it may not be in the power of the Commission to compel such a tarifY, it could not, upon the other hand, be claimed that the rail- roads could in all cases be allowed to charge grossly exorbitant rates as compared with rates paid upon other roads, in order to pay dividends to stock- holders." Prior to its decision in the first Minnesota Rate Case, supra, the Supreme Court had said on this subject: "It is the real value of the property which should be taken into consideration. What the company is INTERSTATE COMMERCE LAW 249 entitled to demand in order that it may have just com- pensation, is a fair return upon the reasonable value of the property at the time it is being used for the public. The property may have cost more than it ought to have cost, and its outstanding bonds for money borrow^ed and which went into the plant may be in excess of the real value of the property." San Diego Land & Town Co. vs. National City, 174 U. S. 739, 43 L. Ed. 1154. In the Maximum Rate Case, 167 U. S. 479, it was held that a rate may be unreasonably low or it may be unrea- sonably high, and thus the interests of the stockholders are most concerned in the former instance, while those of the shipper are paramount in the latter case. Both the interest of the public and of the owner of the property involved should be taken into consideration in the deter- mination of the reasonableness of a rate. In this same case the court significantly added that it was not the un- qualified right of a public utility to earn a given per cent on its capital irrespective of the interests of the public, and that the rights of the public should not be ignored in considering the rights and interests of the stockholders of the corporation. The courts also considered the relation of the rate to the investments of the earnings of the railroad in better- ment of and additions to its property. It is obvious to what an unwarranted extent this principle might be car- ried unless the rights of the public were fully and fairly considered as well as the necessities of the carrier. A just rule, said the court in the Illinois Central R. R. Case, is that "expenditures for additions to construction and equip- ment, as well as expenditures for original construction and equipment, should be reimbursed by all of the traffic they accommodate during the period of their duration, and im- 250 AMERICAN COMMERCE ASSOCIATION provements that will last many years, should not be charged against the revenue of a single year." Maximum Rate Case, 167 U. S. 479, 42 L. Ed. 251. Nebraska Rate Case, 212 U. S. 12, 53 L. Ed. 371. Illinois Cent. R. R. Co. vs. I. C. C, 206 U. S. 441, 51 L. Ed. 1128. Metropolitan Trust Co. (Texas) vs. R. R. Co., 90 Fed. Rep. 683. See also: Cotting vs. Godard, 183 U. S. 79, L. Ed. 92. The conclusions to be drawn from the decisions of the courts thus far referred to is that the courts had prior to the enlargement of the Commission's powers in 1906 ar- rived at two controlling bases for the determination of reasonableness in transportation rates — the cost of the service to the carrier and the value of the service to the shipper. The importance of these general judicial crite- ria, however, loses weight under the present authority vested in the Interstate Commerce Commission to enter- tain original jurisdiction of and pass finally upon all ques- tion of facts involved in determining the reasonableness of transportation rates. This power of fixing rates has been possessed by the Commission since the passage of the Hepburn amendment in 1906, and its action in deter- mining the reasonableness of rates is now subject to the review of the courts only upon the legal questions in- volved. In fact, it is the usual practice of the Supreme Court, in those cases where it has differed from the Com- mission in its construction of the law, to remand the cases for reinvestigation of the propriety of the rates involved based upon proper construction of the Act to Regulate Commerce. INTERSTATE COMMERCE LAW 251 In the Clyde Steamship Co. Case, the Supreme Court adopted such a procedure, saying: "In the East Tennessee, Virginia & Georgia Case, just decided, following the ruling made in Louisville & Nashville Railroad Co. v. Behlmer, 175 U. S. 648, 667, and previous cases, we have held that, where the Commission by reason of its erroneous construction of the statute had in a case presented to it declined to adequately find the facts, it was the duty of the courts, on application being made to them, to enforce the erroneous order of the Commission, not to pro- ceed to an original investigation of the facts which should have been passed upon by the Commission, but to correct the error of law committed by that body, and after doing so to remand the case to the Commis- sion so as to afiford it the opportunity of examining and finding the facts as required by law. The inves- tigation which we have given the questions which arise in these cases and the consideration which we have bestowed on the issues which were involved in the case of the East Tennessee, Virginia & Georgia Railroad have served but to impress upon us the necessity of adhering to that rule, in order that the statute may be complied with both in letter and spirit. Acting in accordance with this requirement, whilst alarming the decree below which refused to enforce the order of the Commission, we shall do so without prejudice to the right of the Commission, if it so elects, to make an original investigation of the ques- tions presented in these records." I. C. C. vs. Clyde Steamship Co., 181 U. S. 29, 45 L. Ed. 729. In Simpson vs. Shepard (Minnesota Rate Case), 230 U. S. 352, 57 L. Ed. 1511, the Supreme Court gave expres- sion to the effect of the interblending of operations in the conduct of interstate and intrastate traffic upon the rea- sonableness of rates, saying: "The interblending of operations in the conduct of 252 AMERICAN COMMERCE ASSOCIATION interstate and local business by interstate carriers is strongly pressed upon our attention. It is urged that the same right of way, terminals, rails, bridges, and stations are provided for both classes of traffic; that the proportion of each sort of business varies from year to year, and, indeed, from day to day; that no division of the plant, no apportionment of it between interstate and local traffic, can be made today which will hold tomorrow; that terminals, facilities, and con- nections in one state aid the carrier's entire business and are an element of value with respect to the whole property and the business in other states; that securi- ties are issued against the entire line of the carrier and can not be divided by states; that tariffs should be made with a view to all the traffic of the road and and should be fair as between through and short haul business; and that, in substance, no regulation of rates can be just which does not take into consideration the whole field of the carrier's operations, irrespective of state lines. The force of these contentions is empha- sized in these cases, and in others of like nature, by the extreme difficulty and intricacy of the calculations which must be made in the effort to establish a segre- gation of intrastate business for the purpose of deter- mining the return to which the carrier is properly entitled therefrom." Norfolk & Western R. R. Co., vs. West Va., 236 U. S. 605. No. Pac. R. R. Co. vs. North Dakota. 236 U. S. 585. Knott vs. C. B. & Q. R. R. Co., 230 U. S. 474, 57 L. Ed. 1571. The capitalization of a carrier as an element determina- tive of reasonableness of rates is becoming a more frequent factor in rate issues presented to the Commission, and it is important to note what the Supreme Court has said regarding the honest value of capitalization and a bona fide return thereupon: "The cost of reproduction is not always a fair INTERSTATE COMMERCE LAW 253 measure of the present value of a plant which has been in use for many years. The items composing the plant depreciate in value from year to year in a varying degree. Some pieces of property, like real estate for instance, depreciate not at all, and some- times, on the other hand, appreciate in value. * * * Counsel for the company urge rather faintly that the capitalization of the company ought to have some in- fluence in the case in determining the valuation of the property. It is a sufficient answer to this contention that the capitalization is shown to be considerably in excess of any valuation testified to by any witness, or which can be arrived at by any process of reason- ing. The cause for the large variation between the real value of the property and the capitalization in bonds and preferred and common stock is apparent from the testimony. All, or substantially all, the pre- ferred and common stock was issued to contractors for the construction of the plant, and the nominal amount of the stock issued was greatly in excess of the true value of the property furnished by the con- tracts. * * * It perhaps is unnecessary to say that such contracts were made by the company with per- sons who, at the time, by stock ownership, controlled its action. Bonds and preferred and common stock issued under such conditions afford neither meas- ure of nor guide to the value of the property." Knoxville vs. Knoxville Water Co., 212 U. S. 1, 53 L. Ed. 371. As to the extent to which judicial review may now be had of the action of the Interstate Commerce Commis- sion in determining the reasonableness of rates, the lan- guage of the Supreme Court in the Louisville & Nashville Case is significant. There the court said: "But the statute gave the right to a full hearing, and that conferred the privilege of introducing testi- mony, and at the same time imposed the duty of deciding in accordance with the facts proved. A find- 254 AMERICAN COMMERCE ASSOCIATION ing without evidence is arbitrary and baseless. * * * In the comparatively few cases in which such ques- tions have arisen it has been distinctly recognized that administrative orders, quasi-judicial in character, are void if a hearing was denied ; if that granted was inadequate or manifestly unfair; if the finding was contrary to the 'indisputable character of the evi- dence.' " I. C. C. vs. L. & N. R. R. Co., 227 U. S. 88. 57 L. Ed. 431. I. C. R. R. Co. vs. I. C. C. 206 U. S. 441, 51 L. Ed. 1128. In summary, it is clear that the Interstate Commerce Commission has original jurisdiction and final determina- tion of the propriety of interstate rates based upon a proper construction of the Act to Regulate Commerce, but that the courts will not permit the Commission to regulate and control the policy of railroads in fixing rates or to force them to substitute a lower rate for one that is just and reasonable. So, if a new rate is reasonable, the carriers may not desist from its enforcement because the former rate had long been in use and important business interests developed thereby. Southern Pac, Co. vs. I. C. C, 219 U. S. 433. 55 L. Ed. 283. See also: Wilcox vs. Consolidated Gas Co., 212 U. S. 19. 53 L. Ed. 382. Prentis vs. Atlantic Coast Line R. R., 211 U. S. 210, 53 L. Ed. 150. Cotting vs. Godard, 183 U. S. 79, 46 L. Ed. 92. The technical judicial view was aptly illustrated in the Arlington Heights Case, where the Commerce Court held that the Commission was without power to effect through the reduction of alleged unreasonable rates the protection of the California lemon industry as against foreign com- petition. This decision of the Commerce Court turned upon a technicality in the grounds upon which the Com- INTERSTATE COMMERCE LAW 255 mission based its ruling. While the facts before the Commission were sufficient to have warranted a finding that the rates were unreasonable per se, the Commission based its order on the ground of discrimination against the domestic in favor of the foreign lemon industry. Had the holding of the Commission been that the rates were unreasonable per se the order would have undoubtedly- been sustained by the Commerce Court. A subsequent decision in the same case by the Commission declared the rates unreasonable per se and such order went into efifect as a reduction in the rates. See also: Texas & Pacific Ry. Co. vs. Abilene Cotton Oil Co., 204 U. S. 426, 51 L. Ed. 553, holding that the courts are without power to grant redress to shippers until the Commission has declared a rate to be unreasonable. § 8. The "Minimum Rate" Bogey. Theoretically the "minimum rate" has been proclaimed as the correct economic measure of reasonableness in rates, but the evil of the theory is worse than the ill it seeks to cure. The theory itself is a disavowal of every equitable principle in rate-making and would simply amount to measuring the reasonableness of a rate per se by the rigid proportionment of revenue to weight of freight, weight of car under load, and weight of car in return movement. The minimum rate test is but a sub- terfuge for the construction of rates embodying the cost of service principle with a misnomer to disguise its vicious- ness. It is only in an infinitely small number of cases that a minimum rate might represent a reasonable rate, whereas, on the other hand, the proportionment of rates resulting from the establishment of minimum rates could be manipulated with vicious and irregular effect. 16—17 256 AMERICAN COMMERCE ASSOCIATION That the authorities are not agreed upon the constitu- tionahty of the power to fix minimum rates if such author- ity were delegated by Congress, is apparent from the fol- lowing quotation from Mr. Ripley's "Railroads, Rates, and Regulations:" "May power to fix minimum rates, so necessary to an adequate program of control, be constitution- ally delegated by Congress? The question has never been squarely presented to the Supreme Court. But the language in many cases has been such as to indi- cate that maximum rates alone may be lawfully es- tablished. Is the reiteration of the word "maximum" intentional? Or may it be that the judicial mind has never yet contemplated the need of regulating the minimum rate? Surely it seems an anomaly that the government should ever seek to fix such a lower limit, below which compensation may not be had. And yet many cases show that it is absolutely necessary, to the end that justice may be done. Or may the un- constitutionality of fixing minimum rates depend upon the fact that, if thus prescribed along with maximum rates, it will amount, practically, to determination of the absolute rate — the bogey which the carriers seem most of all to hold in dread? Interesting and invit- ing possibilities of judicial interpretation are indeed suggested along this line, were there opportunity to pursue them further." City of Spokane vs. N. P. Ry. Co., 21 I. C. C. Rep. 400, 415. I. C. C. Ann. Rep. 1911, page 34. Commissioner Harlan, in his dissenting opinion in the Shreveport Case, gave paramount efifect to minimum over maximum rates as against state authority in the following language : "The power of the federal government to fix max- imum rates on state traffic, even when conducted by an interstate carrier, is therefore a matter of no small INTERSTATE COMMERCE LAW 257 doubt. Its power to fix minimum rates on state traf- fic conducted by an interstate carrier, on the general theory that such traffic ought to contribute ratably to the cost of operating a vehicle of interstate commerce in order not to become a burden upon such com- merce, seems to me to be more clear. On the same general theory I think that the Congress in aid, or rather in protection, of interstate commerce may for- bid discriminations by a railroad or other instrument of interstate traffic in favor of state traffic. This how^- ever it has not yet undertaken to do. In my judg- ment the language of the proviso of section 1 admits of no other reasonable construction than that the Con- gress intended expressly to withhold from this Com- mission the right, directly or indirectly, to exercise its powers with respect to state commerce or to en- force upon such traffic any of the provisions of the act." R. R. Comm. of La. vs. St. L. S. W>. Ry. Co., 23 I. C. C. Rep. 31, 54. § 9. Interblending of State and Interstate Rates. The question of the extent to which the national gov- ernment may exercise control over state rates in their effect upon interstate rates has assumed important pro- portions within the last few years. The matter of cen- tralized federal control over both interstate and intrastate traffic is now being agitated and strongly urged by many railroad and business interests, presumably in the interest of greater uniformity and regulation efficiency. It is not deemed advisable within the scope of this volume to do more than direct attention to two recent utterances on the subject by the Supreme Court : 'Tf the situation has become such by reason of the interblending of the interstate and intrastate oper- ations of interstate carriers, that adequate regulation of their interstate rates can not be maintained with- 258 AMERICAN COMMERCE ASSOCIATION out imposing requirements with respect to their in- trastate rates which substantially affect the former, it is for Congress to determine, within the limits of its constitutional authority over interstate commerce and its instruments the measure of the regulation it should supply. It is the function of this court to interpret and apply the law already enacted, but not under the guise of construction to provide a more comprehen- sive scheme of regulation than Congress has decided upon." Simpson vs. Shepard, 230 U. S. 352, 57 L. Ed. 1511. In the Shreveport Case the same court laid down the rule even more specifically, thus : "The fact that carriers are instruments of intra- state commerce, as well as of interstate commerce, does not derogate from the complete and paramount authority of Congress over the latter or preclude the Federal power from being exerted to prevent the in- trastate operations of such carriers from being made a means of injury to that which has been confided to federal care. Wherever the interstate and intrastate transactions of carriers are so related that the govern- ment of the one involves the control of the other, it is Congress, and not the state, that is entitled to pre- scribe the final and dominant rule, for otherwise Con- gress would be denied the exercise of its constitutional authority and the state, and not the nation, would be supreme within the national field. * * * This is not to say that Congress possesses the authority to regulate the internal commerce of a state, as such, but that it does possess the power to foster and pro- tect interstate commerce, and to take all measures necessary or appropriate to that end, although intra- state transactions of interstate carriers may thereby be controlled. * * * That an unjust discrimination in the rates of a common carrier, by which one person or locality is unduly favored as against another under substantially similar conditions of traffic, constitutes INTERSTATE COMMERCE LAW 259 an evil is undeniable; and where this evil consists in the action of an interstate carrier in unreasonably discriminating against interstate traffic over its line the authority of Congress to prevent it is equally clear. It is immaterial, so far as the protecting power of Congress is concerned, that the discrimination arises from intrastate rates as compared with inter- state rates. The use of the instrument of interstate commerce in a discriminatory manner so as to inflict injury upon that commerce, or some part thereof, furnishes abundant ground for federal intervention. Nor can the attempted exercise of state authority al- ter the matter, where Congress has acted, for a state may not authorize the carrier to do that which Con- gress is entitled to forbid and has forbidden." Houston, E. & W. T. R. R. Co. vs. United States, 234 U. S. 342, 58 L. Ed. 1341. § 10. Presumption of Reasonableness of Rates. The legal presumption is that a rate fixed by the legis- lative authority is reasonable and the burden of proof rests upon the party seeking to challenge the validity of the Act of the legislature. In other words, if the carrier seeks to demonstrate that the rate established by the legislative action is an infringement of the constitutional guarantee of protection of property, it must assume the burden of proving a clear case in its favor or the legislation must be upheld. C. M. & St. P. Ry. Co. vs. Tompkins, 176 U. S. 167, 44 L. Ed. 417. See also: M. & St. L. R. R. Co. vs. Minnesota, 186 U. S. 257, 46 L. Ed. 1151, holding that "the presumption is that the rates fixed by the Commission are reasonable and the burden of proof is upon the railroad company to show the contrary." The mere existence of a rate presumes its reasonable- 260 AMERICAN COMMERCE ASSOCIATION ness, but it is not a presumption that a new or higher rate would be unreasonable. I. C. C. vs. Union Pac. R. R. Co., 222 U. S. 541, 56 L. Ed. 308. So. Pac. Co. vs. I. C. C, 219 U. S. 433, 55 L. Ed. 283. §11. Powers of Interstate Commerce Commission Not Contravened by Shipping Act. The recent Act to Regulate Vessels in Domestic Com- merce, enacted September 7, 1916, does not affect the power or jurisdiction of the Interstate Commerce Com- mission, nor does it confer upon the shipping board con- current power or jurisdiction over any matter within the power or jurisdiction of such Commission; nor is the ship- ping Act to be construed to apply to intrastate commerce. Regulation of Vessels in Domestic Commerce, Act Sept. 7, 1916, 39 U. S. Stats., chapter 451, section 33. CHAPTER VIII. ACT TO REGULATE COMMERCE AS AMENDED (CONTINUED). Amplification of Sections. (Continued.) § 1. Amplification of Section 1 as Amended (Continued)— Reason- ableness of Classification. § 2. Jurisdiction of Interstate Commerce Commission Over Classifica- tion of Property for Transportation. § 3. Classification— "The Shipper's Problem." § 4. Importance of Classification. § 5. Relation of Classification to Freight Rates. § 6. The Legal Status of a Freight Classification Schedule. § 7. Methods of Developing Classifications. § 8. General Principles of Freight Classification. § 9. The Interstate Commerce Commission on the General Principles of Classification. § 10. The Interstate Commerce Commission on Uniform Classifica- tion. 261 CHAPTER VIII. ACT TO REGULATE COMMERCE AS AMENDED (CONTINUED). Amplification of Sections. (Continued.) § 1. Amplification of Section 1 as Amended (Continued) — Reasonableness of Classification. Section 1 of the Act to Regulate Commerce makes it the duty of all common carriers subject to the Act "to estab- lish, observe, and enforce just and reasonable classifica- tions of property for transportation, with reference to which rates, tariffs, regulations, or practices are or may be made or prescribed, and just and reasonable regula- tions and practices affecting classifications, rates, or tar- iffs, the issuance, form, and substance of tickets, receipts, and bills of lading, the manner and method of presenting, marking, packing, and delivering property for transporta- tion, the facilities for transportation, the carrying of per- sonal, sample, and excess baggage, and all other matters relating to or connected with the receiving, handling, transporting, storing, and delivery of property subject to the provisions of this Act which may be necessary or proper to secure the safe and prompt receipt, handling, transportation, and delivery of property subject to the provisions of this Act upon just and reasonable terms, and every such unjust and unreasonable classification, regula- tion, and practice with reference to commerce between the states and with foreign countries is prohibited and declared to be unlawful." 263 264 AMERICAN COMMERCE ASSOCIATION In the fifteenth section of the Act the Commission is empowered to "estabhsh through routes and joint classi- fications, and may estabhsh joint rates as the maximum to be charged and may prescribe the division of such rates as hereinbefore provided and the terms and conditions under which such through routes shall be operated, when- ever the carriers themselves shall have refused or neglected to establish voluntarily such through routes or joint classifications or joint rates; and this provision shall apply when one of the connecting carriers is a water line." The section further provides "that whenever, after full hearing upon a complaint made as provided in section thir- teen of this Act, or after full hearing under an order for investigation and hearing made by the Commission on its own initiative (either in extension of any pending com- plaints or without any complaint whatever), the Commis- sion shall be of opinion that * * * any individual or joint classifications * * * of such carrier or carriers subject to the provisions of this Act are unjust or unrea- sonable or unjustly discriminatory, or unduly preferential or prejudicial or otherwise in violation of any of the pro- visions of this Act, the Commission is hereby authorized and empowered to determine and prescribe what ♦ * * individual or joint classification * * * is just, fair, and reasonable to be thereafter followed, and to make an order that the carrier or carriers shall cease and desist from such violation to the extent to which the Commis- sion finds the same to exist, * * * and shall adopt the classification * * * so prescribed. * * * "Whenever there shall be filed with the Commission * * * any new individual or joint classification, * * * the Commission shall have, and it is hereby given, author- ity, either upon complaint or upon its own initiative with- INTERSTATE COMMERCE LAW 265 out complaint, at once, and if it so orders, without answer or other formal pleading by the interested carrier or car- riers, but upon reasonable notice, to enter upon a hearing' concerning the propriety of such * * * classification * * * ; and pending such hearing and the decision thereon the Commission upon filing with such schedule and delivering to the carrier or carriers affected thereby a statement in writing of its reasons for such suspension may suspend the operation of such schedule and defer the use of such * * * classification, * * * i^^^t not for a longer period than one hundred and twenty days beyond the time when such * * * classification * * * would otherwise go into effect ; and after full hearing, whether completed before or after the * * * classification * * * goes into effect, the Commission may make such order in reference to such * * * classification * * * as would be proper in a proceed- ing initiated after the * * * classification * * * had become effective : Provided, That if any such hearing can not be concluded within the period of suspension, as above stated, the Interstate Commerce Commission may, in its discretion, extend the time of suspension for a further period not exceeding six months." § 2. Jurisdiction of Interstate Commerce Commission Over Classification of Property for Transportation. The mandate of the statute as now amended is that whatever classification the carriers apply to the property they undertake to transport it must be just and reason- able, and authority is vested in the Commission to sus- pend and investigate any individual or joint classification or property for transportation which may be filed with it by any carrier or carriers, either upon complaint or upon 266 AMERICAN COMMERCE ASSOCIATION its own initiative without complaint. In the event the Commission finds such classification unjust and unreason- able, or unduly discriminatory, or prejudicial, or prefer- ential, or otherwise in violation of any of the provisions of the Act to Regulate Commerce, or of the acts amendatory thereof, it is empowered to determine and prescribe what shall be a just and reasonable individual or joint classifica- tion and to enter an order requiring the carriers to observe and enforce such prescribed classification. Prior to the 1910 amendment of the Act to Regulate Commerce, the Interstate Commerce Commission was not in statutory terms specifically empowered to establish just and reasonable classifications of property for transporta- tion, nor were there any specific provisions in the Act previous to that time relating to the classification of freight. The Commission had required the carriers to file their tariffs and that those tariffs should contain the classi- fication of freight in effect, and where the Commission had considered classification cases it had dealt with classifica- tion as a "practice" or "regulation" affecting rates. The Act, as now amended, requires the establishment and observance of just and reasonable classifications of prop- erty for transportation, and empowers the Commission to establish fair and reasonable classifications and to require their observance. C. H. & D. R. R. Co. vs. I. C. C. 206 U. S. 142. Interior Iowa Cities Case, 28 I. C. C. Rep. 64. Board of Trade of Chicago vs. C. & A. R. R. Co., 27 I. C. C. Rep. 530, 534. Re Western Classification No. 51, 25 I. C. C. Rep. 442, 469, 609. See also: In re Advances on Coal to Lake Ports, 22 I. C. C. Rep. 604, 624. Caldwell Co. vs. C. I. & L. Ry. Co., 20 I. C. C. Rep. 412, 415. McClung & Co. vs. S. Ry. Co., 22 I. C. C. Rep. 582, 584. INTERSTATE COMMERCE LAW 267 National Hay Assn. vs. M. C. R. R. Co., 19 I. C. C. Rep. 34, 38. Rail & River Coal Co. vs. B. & O. R. R. Co., 14 I. C. C. Rep. 86, 88. California Commercial Assn. vs. Wells, Fargo & Co., 14 I. C. C. Rep. 422, 433. Procter & Gamble vs. C. H. & D. R. R. Co., 9 I. C. C. Rep. 440. It should be noted in this connection that prior to the amendment of 1910 the Supreme Court had held that the Act to Regulate Commerce gave to the Commission power "to consider the whole subject and the operation of the new classification in the entire territory, as also how far its going into eflfect would be just and reasonable, would create preferences or engender discriminations; in other words, its conformity to the requirements of the Act to Regulate Commerce." C. H. & D. R. R. Co. vs. I. C. C, 206 U. S. 142, 51 L. Ed. 995 (1907). See also: In re Advances on Coal to Lake Ports, 22 I. C. C. Rep. 604, 624. McClung & Co. vs. So. Ry. Co., 22 I. C. C. Rep. 582, 584. Caldwell Co. vs. C. I. & L. Ry. Co., 20 I. C. C. Rep. 412, 415. National Hay Assn. vs. M. C. R. R. Co., 19 I. C. C. Rep. 34, 38. In its report In re Western Classification No. 51, 25 I. C. C. Rep. 442, 453, the Commission recited the history of classifications of freight from the year 1887, when the original Act to Regulate Commerce took effect : "The early development of classification of freight by the railways in the United States was not along any definite lines. Acting independently, carriers or- iginally adopted individual classifications. It has been estimated that there were, at one time, as many as 138 distinct classifications in eastern trunk line terri- tory, varying in the number of classes provided, each classification built up independently of all others to serve the needs of the particular road to which it ap- plied. 268 AMERICAN COMMERCE ASSOCIATION "The formation of through routes over connecting lines and the growth of through trafific necessitated the estabHshment of classifications in addition to those adopted by each separate carrier for its own •traffic. To meet this need confederations of railroad companies established classifications for through traf- fic in various sections of the country, some covering large and some small areas. The following are classi- fications so formed, all of which were later absorbed by the official classification: The trunk lines west- bound classifications, the eastbound classification, the joint merchandise freight classification, the middle and western states classification, the east and south- bound classification. "As a result of this multiplicity of classifications there was great confusion in the traffic situation in this respect. In very many cases two or more classi- fications were in force on one road ; one for local traf- fic, one for through traffic in one direction, another for that in the opposite direction, and a fourth, per- haps, for traffic coming from or going to a particular section of the country. In 1883 the Wabash Railroad Company had nine different classifications in effect for traffic originating on its line. The existence of so many classifications was a public evil and neces- sarily resulted in constant embarrassment in the in- terchange of traffic between the roads. Traffic mana- gers and agents found it difficult to quote rates on through traffic with any degree of accuracy, and the owners of the freights were frequently subjected to the payment of freight charges greatly in excess of what they had anticipated. It was evident that great- er uniformity in classification was an urgent need. "The prohibition of unjust discrimination by the interstate-commerce act of 1887 stimulated the move- ment for uniformity. It was recognized by railroad officials that they could not observe the law without establishing greater uniformity of classification. "The first important step in that direction was the establishment of the official classification, which was INTERSTATE COMMERCE LAW 269 put in force in 1887 contemporaneously with the tak- ing effect of the act to regulate commerce. This class- ification was generally adopted throughout the terri- tory north of the Ohio and Potomac rivers, and east of a line roughly drawn from Chicago to St. Louis and the junction of the Mississippi with the Ohio. There were at this time 131 railway companies with- in official classification territory, many of which still had a separate local classification. At first the official classification did not entirely displace all others within the territory which it covered. Of the total number of roads using it in 1888, 87 used the official classifi- cation exclusively, 35 used one other, and 9 used two others. "In 1882 the joint western classification, the fore- runner of the present western classification, was adopted by certain roads running west from Chicago and became effective in 1883. The roads making use of the western classification steadily increased in number until in June, 1889, there were 69. During the same year the roads that formed the Texas associa- tion and also the transcontinental lines used this class- ification so that, by the end of the year, practically all the railways operating throughout the territory from Chicago and St. Louis to the Pacific coast had adopted it. "By 1889 the lines south of the Ohio River and east of the Mississippi River had adopted the classification of the Southern Railway & Steamship Association, later designated as the southern classification. "Since the passage of the interstate commerce law no practical advance has been made toward unifica- tion except as the result of the absorption of special and exceptional classifications into those of the three chief classifications of the country. "At the present time these three great classifica- tions, the official western, and southern, subject to exception sheets and commodity rates of the individ- ual carriers and the limited use of certain state class- ifications, transcontinental tariffs, and the Canadian classification, are the only classifications applying to 270 AMERICAN COMMERCE ASSOCIATION interstate traffic. Occasionally however, these classi- fications overlap. Articles shipped from a point in one territory to a point in another are sometimes governed by the classification of the point of origin and at other times by that of the place of destination. Confusion arises particularly in the shipment to and from a point located comparatively near a classifica- tion boundary. St. Louis, for instance, uses the offi- cial classification for eastbound freight, the western for westbound freight, the southern for southbound freight, and the transcontinental tariffs for Pacific coast trade. "As early as 1887 an attempt was made by traffic officials of lines east and west of Chicago to unify the official and western classifications, but a series of rate wars interfered with the work. "In 1888 the House of Representatives passed a resolution authorizing and directing the Interstate Commerce Commission within three months, or by January 1, 1889, to prescribe a 'uniform classification' for all the roads in the United States. The resolution was unacted upon by the Senate, representations hav- ing been made that if the railroad companies were given further time they would obviate the necessity for congressional action. Prompted by the disposi- tion thus manifested in the popular branch of Con- gress and urged thereto by pressure constantly brought to bear by this Commission, a convention of traffic officials of transportation companies through- out the country met in Chicago. December 4 and 5, 1888, for the purpose of considering uniformity of classification. At this meeting a standing committee of two members from each of the eight traffic associa- tions represented was selected and was instructed 'to endeavor to combine the existing classifications in one general classification by the use of such number of classes as will prevent conflicting commodity as well as class rates in the several sections of the country, without sacrificing the proper interests of the car- riers. "Meetings were held by this committee at various INTERSTATE COMMERCE LAW 271 places from time to time during the years 1889 and 1890; and finally in June, 1890, a classification was agreed upon and recommended for adoption by all the roads on January 1, 1891. The proposed classifi- cation contained nominally 11 classes, in addition to which the classification provided one and one-half, double, two and a half, three and four times first class, making the reality 16 classes. The first 5 numbered classes and the multiples of first class applied to less- than-carload lots, while for carload lots the remaining 6 numbered classes were used. "With the proposed uniform classification the com- mittee submitted a set of rules for the establishment of a permanent organization. These rules provided for a board of uniform classification to consist of represen- tatives from various territories in which the proposed classification would be made effective. This board was to have power by a vote of two-thirds of its members to make necessary changes in or additions to the class- ification, and its decisions were to be final. The board was to elect a chairman and three district chairmen, one for the district covered by the present official classification, one for that covered by the southern classification, and a third for that covered by the west- ern classification. It being recognized that many changes would have to be made in the classification from time to time, the rules provided that applica- tions for relief were to be made to the district chair- man who would summarize the cases, and present them to the board for determination. The district chairmen were to unite in recommendations as to the rate to be given new or analogous articles, but such advice should not prevail unless the chairman approved, authority thus given to be subject to review by the board at its succeeding meetings. "The following traffic associations were represent- ed on the committee which made this report : The New England Freight Association, Central Freight Association, Western Freight Association, Mississippi Valley Railroads, Trunk Line Association, Southern Railway & Steamship Association, Trans-Missouri 16—18 ara AMERIC\X CX)MMERCE ASSOCIATION AssodaticMi, and the Southern Interstate Association. Earir in the proceedings the Transcontinental Asso- ciation had withdrawn its representatives from the connnittee ^nd had failed to unite in the result reached by the conference. '"The members of the ccnnmittee emphasized the aecessitr of showing a broad and hberal spirit. While at no time forgetful of the interests they represented, they endeavored to keep within the horizon the de- sir^iiity of also re^airding matters from a national rather than a ^r 1 standpoint. In their report the deabrabiKty c: r 7 ^ the number of conmiodity rates in the - - - : r : : 5 to a minimum was emphasized :_ .. :f roads by agreement to make cr _ rj-.rr as conceded, it was un- derstcxMl that this privilege should be exercised spa iin gly. The report stated: *The continne 1 iir-ition of the interstate ccMnmerce law made z he necessity for great- er uniformity. In cr = thereto, and also to meet the demand : - r" lines, it became essential to facilitate t -:ion of through rates between points far removed. This could most readily be done by the issuance of tari€Fs goremed by antered proved annoying to shippers ani e; r^ssing to the roads. The public failed to perceive, nor was it always possible to a^ain. why articles of commcm use should be classified differently east and west or north and sooth of certain dividing lines. The constant increase of traffic interchanged with railroads in the populous states, together with the legal requirements as to the publication ion 7no Trier vs. C. St. P. M. & O. Ry. Co., 30 I. C. C. Rep. 707, 709. In Trier vs. C. St. P. M. & O. Ry. Co., 30 I. C. C. Rep. 707, it was said, at page 709: "On principle it would seem that the reasonable- INTERSTATE COMMERCE LAW 335 ness per se of an interstate rate should be independ- ently determined. To the extent that state-establish- ed rates are permitted either conclusively or presump- tively to determine the reasonableness of rates for interstate journeys, to that extent must this Commis- sion, as a federal tribunal, be embarrassed by the anomalous situations arising from conflicts betw^een state and federal jurisdictions. We are inclined to doubt the propriety and legality of permitting the assumption that a passenger who buys a through ticket for an interstate journey pays a charge which consists of a combination of a number of state charges, or of an interstate charge plus an intrastate charge. It would seem that an interstate journey should be viewed in its entirety, and that a complain- ant should not be permitted, except so far as the fourth section is applicable, to divide the interstate rate into as many parts as the number of states through which the interstate journey runs, merely for the purpose of ascertaining whether each separate intrastate leg of an interstate journey carries a rate which conforms to the rate prescribed for intrastate trips by the state in which that leg lies. In other words, an interstate rate, except for fourth-section purposes, should be deemed indivisible in gauging its justice and reasonableness." In the Beer and Malt Products Case, 31 I. C. C. Rep. 544, in speaking of the Minnesota statute, the Commission said, at page 544: "It was shown that, should this intrastate rate be reduced to the interstate rate, the carriers would thereby, under the provisions of the law as construed, make this reduced rate the measure of all other rates on beer for the same distance on their lines through- out of the state of Minnesota. Unquestionably the law of Minnesota presents a situation to the carriers which makes it necessary for them either to adjust some interstate rates to the mileage rates prescribed by that law, to leave their intrastate and interstate 16—22 336 AMERICAN COMMERCE ASSOCIATION rates out of line, or to suffer material reductions be- low the intrastate rates fixed thereunder. While we may consider this fact, "Congress does not directly or indirectly interfere with local rates by adopting their sum as the interstate rate", L. & N. R. R. Co. vs. Eubank, 184 U. S., 27, 42, and we can not say that merely because a higher intrastate rate exists that an increase of an interstate rate to meet the state-made rate is justified, even though the transportation con- ditions as to distance and territory are similar. Nor do the facts here presented require that we consid- er the application of the decision of the Supreme Court in the Shreveport case, H. E. & W. T. Ry. Co. vs. United States, 234 U. S., 342. This conclusion makes it unnecessary for us to more particularly de- scribe the Minnesota statute and the situation result- ing therefrom." Referring to the same facts in Freight Rates from Min- nesota Points, 32 I. C. C. Rep. 361, the Commission said, at page 363 : "The same principle applies to the matter now be- fore us, and we need not consider further the Minne- sota statute except in so far as the rates established under it may be regarded as evidence tending to sup- port the claim that the rates under suspension are just and reasonable. It is well settled that state- made rates may be considered in determining the reasonableness of interstate rates in the same general territory." Citing: Minneapolis Civic & Commerce Assn. vs. C. M. & St. P. Ry. Co., 30 I. C. C. Rep. 663. Pulp & Paper Mfrs. Traffic Assn. vs. C. M. & St. P. Ry. Co., 27 I. C. C. Rep. 83. In Marshall Oil Company vs. C. & N. W. Ry. Co., 14 INTERSTATE COMMERCE LAW 337 I. C. C. Rep. 210, the Commission's attitude was unmis- takably set forth: "The decisions of the several state railroad com- missions are worthy of consideration, but this Com- mission is not justified under the law in accepting a comparison of lower intrastate rates prescribed by the state authorities with those applying on inter- state traffic as conclusive of the unreasonableness of the interstate rates." It is said that the effect of the order entered by the Com- mission in the South Dakota Express Case is to "blow up" the entire state structure of express rates because of their discriminatory effect upon the interstate express rates. Traffic Bureau, etc., vs. Am. Ex. Co., 39 I. C. C. Rep. 703, 724. The same attitude of the Commission respecting com- parison with state-made rates in the determination of unjust discrimination against interstate rates, was clearly apparent in the noteworthy Shreveport, Memphis, St. Louis Business Men's League, and South Dakota Express Rate cases. § U. Comparison with Rates Established by Interstate Commerce Commission. When comparison is made between challenged rates and rates established pursuant to an order of the Commission, the latter are to be regarded in the same light, and given the same weight, as rates made by the carriers without an order of the Commission. Davenport vs. So. Ry., 11 I. C. C. R. 650, 657. § 12. Illustrating Standards of Comparison by Interstate Commerce Commission. The general level of rates in Central Freight Associa- tion Territory east of the Mississippi River is very much S38 AMERICAN COMMERCE ASSOCIATION lower than that prevailing in territory west of that river. For example, rates in cents per 100 pounds upon the num- bered classes by the Santa Fe from Coffeyville, Kansas, to Fort Madison, Iowa, compare with corresponding rates from Columbus, Ohio, to Fort Madison, as follows: Coffeyville to Fort Madison. Class 1 2 3 4 5 Rate 101 83 69>4 52 43 Columbus to Fort Madison. Class. 1 2 3 4 5 6 Rate.. 59 51>^ 41 29>^ 24>^ 20 In the Sunflower Glass Case, the Commission declined to reduce the western rates because the difference in the class rates above shown fairly represented the difference in the general level of rates. Sunflower Glass Co. vs. Mo. Pac. R. Co.. 22 I. C. C. Rep. 391, 392. The Commission has also held that because of this dif- ference in rate levels, the difference in transportation con- ditions may justify a lower commodity rate, mile for mile, east than west of the Mississippi River. Sunflower Glass Co. vs. Mo. Pac. R. Co.. 22 I. C. C. Rep. 391, 392. Bd. of R. R. Comrs. of State of Kansas vs. Atchison, etc., R. Co., 22 I. C. C. Rep. 407, 415. Generally speaking, articles transported in Southern Classification Territor\' pay higher rates than when trans- ported for a like distance under Official Classification ratings. There are exceptions to this rule, however; and _ INTERSTATE COMMERCE LAW 339 as a generality, there is no such difference in the level of the rates between Official Classification Territory and Southern Classification Territory as there is between Offi- cial Classification Territory and the territory west of the Mississippi River. See : Rau vs. P. R. R. Co., 12 I. C. C Rep. 199, 201. In Dallas Freight Bureau vs. Gulf, Col. & S. F. Ry. Co., 12 I. C. C. Rep. 223, 225, it was said: "While the revenue per ton per mile over other routes on other lines and to other destinations is often suggestive in arriving at a proper estimate of the reasonableness of a rate over a route complained of, it is by no means conclusive. Varying conditions existing on different lines must of necessity justify differences in rates for hauls of the same distance. The real question in any such complaint is the rea- sonableness of a particular rate on the particular line between the particular points in question. In testing such a rate the rates on the same or adjacent lines in the immediate territory where the same con- ditions exist are of much greater significance and afford a much more accurate basis for the Commis- sion's action." Comparison of rates is in recognition of a long estab- lished principle of determining relative values of property, and, with necessary qualification, is the customary method of judging the reasonableness of rates. Cement to Long Island Points, 37 I. C. C Rep. 694, 695. Rates and Rules on Shipments of Packing House Products, 36 I. C. C. Rep. 62, 67. The Iron and Steel Cases, 36 I. C. C. Rep. 86, 94. Carey Mfg. Co. vs. G. T. Ry. Co., 36 I. C. C. Rep. 203, 204, 206. Classification of Chairs, 36 I. C. C. Rep. 243, 244. Peppard Seed Co. vs. A. T. & S. F. Ry. Co., 36 I. C. C. Rep. 311, 314. Oklahoma Traffic Asso. vs. A. & S. Ry. Co., 36 I. C. C. Rep. 329, 343. 340 AMERICAN COMMERCE ASSOCIATION Prest-0-Lite Co. vs. B. & A. R. R. Co.. 36 I. C. C. Rep. 545, 548. Eastern Live-Stock Case. 36 I. C. C. Rep. 675, 680, 697. Parfrey vs. Chicago. M. & St. P. Ry. Co.. 20 I. C. C. Rep. 104. Delray Salt Co. vs. D. T. & I. Ry. Co., 18 I. C. C. Rep. 245. Snyder-Malone-Donahue Co. vs. Chicago, B. & Q. R. Co., 18 I. C. C. Rep. 498. 499. Pankey & Homes vs. Central New England Ry. Co., 18 I. C. C. Rep. 578. Clark & Co. vs. Buffalo & S. Ry. Co., 18 I. C. C. Rep. 380. Cannon vs. Mobile & O. R. Co., 11 I. C. C. Rep. 537, 543. Marten vs. Louisville & N. R. Co., 9 I. C. C. Rep. 581. 597. Worrell vs. Union Pacific R. Co., 6 I. C. C. Rep. 121, 4 I. C. Rep. 469. Freight Bureau of Cincinnati vs. C. N. O. & T. P. Ry. Co., 6 I. C. C. Rep. 195. 4 I. C. R. 592. 610. 611. Manufacturers' and Jobbers' Union vs. Minneapolis & St. L. R. Co., 4 I. C. C. Rep. 79, 3 I. C. Rep. 115. Lincoln Creamery Co. vs. Union Pac. R. Co., 5 I. C. C. Rep. 156. 3 L C. Rep. 794. Re Tariffs of Transcontinental Lmes, 2 L C. C. Rep. 324, 2 L C. Rep. 203. § 13. Adjudicated Rates— Maintaining Rate Reduced After Complaint is Filed. On December 2, 1907, it was decided that when a rate is reduced after answer has been made and before hearing, the report disposing of the proceeding shall carry with it an order directing the defendant to maintain that rate as a maximum for not less than two years. On December 6 it was decided that orders in special reparation cases should include a clause providing that the new rate or regulation upon the basis of which reparation is granted should be maintained for a period of at least one year. It has since been agreed that the one year in orders in special reparation cases and the two years so required in orders upon formal complaints shall run from the date of the order and not from the date when the reduced rate or new regulation became efiFective. I. C. C. Confr. Rulings Bull. No. 6, Ruling No. 14. Apply this ruling as affected by modifications and additions to be found in Confr. Rulings Nos. 130, 200-a, and 200-c. INTERSTATE COMMERCE LAW 341 Compare : P. & G. Distributing Co. vs. A. & V. Ry. Co., 40 I. C. C. Rep. 367, where finding in prior case disposed of issue in pending case. (1) Carrier May Withdraw Rate Condemned by Com- mission in Another Case. A carrier withdrew a rate which the Commission had condemned in a previous case as unreasonably low. This amounted to an advance in the carrier's rate. The Commission declared: "To hold that defendant may not withdraw a rate found by the Commis- sion to be unreasonably low, merely because that rate was voluntarily established in the first place, would amount to requiring unjust preference of complainant, and to setting aside the fundamental principle that rates must be uniform under similar conditions." Fairmont Creamery Co. vs. C. B. & Q. R. R. Co., 22 I. C. C. Rep. 252, 254. (2) Reduction of Rate when Formal Complaint Against it is Pending. If the rate is reduced after complaint is made and before ffearing, to the sum demanded by the complainant, the order of the Commission disposing of the proceeding will require the maintenance of that rate as maximum for not less than two years. I. C. C. Confr. Rulings, Bull. 6, Ruling No. 11 (see Rulings N.O. 14, 130, 200-a, and 200-c). § 14. Rate Advanced for Short Period with Return to Former Rate Raises Presumption of Unreason- ableness of Advanced Rate. In the absence of unusual circumstances or conditions, the advance of a rate for a short period, followed by the restoration and maintenance of the former rate, tends to raise a presumption of fact that the advanced rate was 342 AMERICAN COMMERCE ASSOCIATION unreasonable. While of evidentiary bearing, special facts or circumstances may modify the presumption. Fairmont Creamery Co. vs. C. B. & Q. R. R. Co., 22 I. C. C. Rep. 252, 253. ( 1 ) Advance Justified when Effect is to Equalize Nearby Rates. The Commission approved an advance in coal rates from mines in Illinois to Chicago as reasonable and justi- fied by the fact that the advance was made to equahze the rates from other near-by mines, and that the advanced rate itself was not unreasonable. Re Advances on Bituminous Coal, 22 I. C. C. Rep. 341, (2) When Advance in Carload Minimum Weight is not an Advance in Rate. If an advance in the carload mini- mum weight is made which causes the shipper no difficulty in complying therewith, and places no additional burden upon him, such increased minimum weight will not operate as an increase in rate. Re Transportation of Wool, Hides, arid Pelts. 23 I. C. C. Rep. 151, 158. § 15. Agreement as to Rates; Validity and Effect of be- tween Shipper and Carrier. The Commission has no authority to approve or enforce a private agreement made between shippers and carriers concerning charges for transportation, nor is it bound by such an agreement when the reasonableness of such charges are challenged in the mode prescribed in the act. It follows a fortiori that the Commission will not under- take to interpret or construe an agreement nor to deter- mine its legal effect, nor to say that a tariff shall be issued in compliance therewith. The force and effect of such agreements as fixing obligations between the parties there- INTERSTATE COMMERCE LAW 343 to are to be determined by the courts, but under its rules of practice such contracts may be regarded and used as evi- dence so far as pertinent to questions which the Commis- sion may determine, and it is desirable that the facts be thus agreed upon whenever practicable. When the parties thereto agree upon a rate, the agreement may be regarded as an admission as between the parties executing it of strong evidentiary value that the rate agreed upon is reasonable, and such evidence will be considered by the Commission together with all other facts, circumstances, and conditions that may reasonably apply to the matters under investigation, keeping in view all interests involved, and its duty to establish just and reasonable rates avail- able for all shippers alike without discrimination in favor of any particular shipper by reason of an agreement with the carrier. On the other hand the Commission is expressly author- ized and empowered to pass upon the reasonableness of a charge for transportation or the reasonableness of any regulation or practice affecting such charge, expressed in a tariff issued by any carrier subject to the provisions of the Act. The rates charged and collected must be in accordance with the tariff legally effective, whether in compliance with any private agreement with the shipper or not, and the Commission must therefore look to the provisions of the tariff to ascertain the rate that has been challenged or the reasonableness of any regulations or practices affecting such rates, and to determine and pre- scribe upon consideration of all the evidence what will be a reasonable charge to be thereafter observed and what regulation or practice is fair to be thereafter followed. Where the language of a tariff is ambiguous in its spec- ifications, and where there is a reasonable doubt as to its true import and meaning, the agreement may be examined 344 AMERICAN COMMERCE ASSOCIATION and treated as a medium of explanation of the tarifif to re- move the ambiguity. Hood & Sons vs. Delaware & Hudson Company, 17 I. C. C. Rep. 15, 18. § 16» Bill of Lading. — Shipments Tendered Under Other Than Conditions of, Subject to Higher Rates. The Commission has held, where the tarififs of a carrier provide higher rates on shipments tendered with other than a uniform bill of lading, that the tender of the ship- ment accompanied by other than a uniform bill of lading may not be taken by the carrier as evidence of the ship- per's election to use the higher rate. It is the duty of •the carrier to direct the shipper's attention to the fact that a lower rate is available under the uniform bill of lading. A similar rule obtained in the case of released valuation clauses on bills of lading, it being the duty of the carrier to secure the shipper's signature to such a release on the bill of lading when it had reasonable notice of the shipper's desire to take advantage of the lower rate upon a released valuation. This was prior to the taking* effect of the Cummins amendments, but is still an efficacious rule. It follows, therefore, that, under proper conditions, a higher rate based on the carrier's assumption of the risk of insurer under other than the uniform bill of lading, and a lower rate based upon a lesser assumption of risk might be justified under the law, the reasonableness of such high- er rates is not precluded thereby from attack. I. C. C. Conf. Ruling Bull. No. 6, Ruling No. 160. I. C. C. Conf. Ruling Bull. No. 6, Ruling No. 226. At the time of the enactment of the Cummins Amend- ment it was most vigorously argued by shippers and their traffic representatives that the effect of the limita- INTERSTATE COMMERCE LAW 345 tion of liability prohibition would be to automatically, on the taking effect of the amendment, increase all rates in the United States 10 per cent, because of the conditioning of the use of bills of lading then in effect, which were included in the classification schedules of the carriers on file as tariffs with the Interstate Commerce Commission. The Commission gave the following construction to the amendment in answering the query — "If no* changes are made in the existing shipping contracts and rate schedules, will the higher rates provided therein auto- matically become lawfully applicable upon the date upon which the amendment takes effect?" "It is to be remembered that the Cummins amend- ment is not a separate statute, but is an amendment to the act. It must, therefore, be construed as a part of, and in connection with other portions of, the act, and in such a way as to give effect to the whole statute. There does not seem to be any indication of legislative intent to change any provision of the act other than that part known as the Carmack amendment. The new amendment should, if possible, be so construed as to give full force to its clear pur- pose, without impairing the effect of any other pro- visions of the act. * * * * "As we have seen, the Carmack amendment, adopted in 1906, provided that no contract, receipt, rule, or regulation should exempt the carrier from the liability thereby imposed. As has been said, no effort was made to change rates because of that amendment to the act. The classifications or rate schedules provide that unless the terms of certain bills of lading are accepted higher rates will apply. The terms of the bill of lading could be modified or changed to any extent without automatically chang- ing any rate. Prior to 1913 many of the limitations contained in bills of lading or other shipping con- tracts were treated as if they did not exist, and it was 346 AMERICAN COMMERCE ASSOCIATION never suggested that the validity or invalidity of any such provision affected the rate. "It is contran- to all canons of construction to hold that an act of Congress produces a result not in- tended by Congress unless the express language of the act compels such a construction. There is nothing in the expressed terms of this act or in the history of this legislation that shows any intent or purpose on the part of Congress to affect in any degree the ex- isting rates charged by carriers for transporting prop- erty. The legislation is aimed at specified contracts and declares them to be unlawful. The lawful rates on file at this time, therefore, are the rates providing for the limited liability. The Cummins amendment, by making contracts limiting liability for loss caused by the carriers unlawful, does not destroy these rates, but they remain in effect and are lawfully applicable, for the 10 per cent increased rates are merely addi- tional and can not stand in and of themselves. "Applying correct rules of interpretation, the Cum- mins amendment does not automatically bring into effect the increased rates named in the classifications and tariff publications as applicable to shipments which are not made subject to the terms of the uni- form or carrier's bill of lading." The Cummins Amendment, 32 I. C. C. Rep. 682, 692, 693. § 17. Burden of Proof of Reasonableness of Rates. See ''Interstate Commerce Law," Part IV, "Practice and Procedure before Commission" — "Burden of Proof," post. (1) Carriers may not Benefit by another Carrier's meet- ing of Burden of Proof Requirement. See "Interstate Com- merce Law," Part I\', "Burden of Proof," post. § 18. Capitalization. The government has permitted private capital to invest in the construction and operation of common carriers, such higher rates not precluded thereby from attack. INTERSTATE COMMERCE LAW 347 While it might have established their rates, it has left that to competitive forces. The public has for many years known the results of the operations of these carriers, and their securities have thereby acquired certain values upon the market. At these values enormous private in- vestments have been made. Private investors have bought, not for speculative purposes, but as a legitimate and permanent investment, large amounts of the stocks of many of these carriers. Now, the government having permitted this to be done, can not close its eyes to the fact that it has been done. Nor can the Commission be oblivious to the effect of its action upon the value of these investments, which have been made in good faith. 'Tn this view the market value of these stocks and bonds for the last 10 years certainly," said the Commission, "and the effect which our action may have upon their market value for the future, must be considered. We can not, of course, allow such rates as will in all cases guarantee or perpetuate the prices at which these stocks have been bought, but in viewing the entire situation we should have that price in mind." Advances in Rates— Eastern Case, 20 I. C. C. Rep. 243, 259, 389. Advances in Rates— Western Case, 20 I. C. C. Rep. 307, 320, 335. Watered stock may not be considered as an element in the determination of the reasonableness of rates. City of Spokane vs. N. P. Ry. Co., IS I. C. C. Rep. 376, 410. See also: 1915 Western Rate Advance Case, 35 I. C. C. Rep. 497. Five Per Cent Case, 31 I. C. C. Rep. 351, 406. In establishing a parity of rates between Atlanta, Ga., and Birmingham, Ala., the population, wealth and capital- ization of the two cities were compared, the complainant 348 AMERICAN COMMERCE ASSOCIATION in the case showing that Atlanta excels Birmingham in population and wealth, in bank clearings, capitalization, and deposits, in industrial and manufacturing operations, including the capitalization of plants, the value of the ma- terials used, the value of the products, the number and compensation of employees, etc. The wholesale and job- bing business of Atlanta is more extensive than that of Birmingham, and Atlanta's geographical location is said to be more favorable to development along such lines than that of Birmingham. In passing upon these facts, the Commission said: "Facts of this character, however, can carry weight only to the extent to which a definite relation be- tween them and freight rates can be shown. With respect to means of communication with surrounding territory, Atlanta is said to be on a footing of sub- stantial equality with Birmingham, there being about the same number of lines radiating from one center as from the other." Atlanta Freight Bureau vs. N. C. & St. L. Ry. Co., 29 I. C. C. Rep. 476, 480. § 19. Combination among Carriers when Rates are Product of. In determining the reasonableness of a rate, the Com- mission should inquire into the circumstances under which the rate was made. Said the Commission: *Tf we find that it was not the product of free com- petition, but was the result of an agreement, this fact would rob the rate of the presumption of reason- ableness which might otherwise attach, and should be considered by the Commission in determining whether the advance was justifiable; but if, after giv- ing due weight to that and all other circumstances, we are still of the opinion that the rate in effect is INTERSTATE COMMERCE LAW 349 not too high, the mere fact that it was the product of an unlawful combination will not justify us in setting it aside. Such is the fair import of what we have said in several cases. In Matters of Advances in Rates from St. Louis to Texas Points, 11 I. C. C. R. 238 ; Cattle Raisers' Association of Texas vs. Mis- souri, Kansas & Texas Railway Co., et al., 11 I. C. C. Rep. 296; Tift vs. Southern Railway Co., et al., 10 I. C. C. Rep. 548; Central Yellow Pine Association vs. Illi- nois Central Railroad Co., et al., 10 L C. C. Rep. 505." China & Japan Trading Company, Ltd., vs. Ga. R. R. Co., 12 I. C. C. Rep. 236, 241. See also: I. C. C. vs. L. & N. R. Co., 190 U. S. 273, 47 L. Ed. 1047. Warren Mfg. Co. vs. So. Ry. Co., 12 I. C. C. Rep. 381, holding that an agreement between carriers to increase rates is not conclusive that the increased rates are unreasonable. (Fol- lowed in 12 I. C. C. Rep. 451, 15 I. C. C. Rep. 453, and 16 I. C. C Rep. 323.) INDEX ABILENE COTTON OIL COMPANY CASE 78, 216 ACCESSORIAL SERVICE (SWITCHING). Where receipt and delivery within switching limits is additional service or included in line-haul rate 142 ACCOUNTS. Certain forms required of carriers 35 ACT OF JUNE 15, 1866. Railroads authorized to transport over continuous lines 12 ACT TO REGULATE COMMERCE (see also DISTRICT OF COLUM- BIA, JURISDICTION, STATE RAILROADS, THROUGH ROUTES AND JOINT RATES, WATER CARRIERS). Alaska, common carriers in, subject to 115 Amendments to, to remove and remedy weaknesses pointed out by the courts and extend scope and authority of Commis- sion 32 Amendments of 1889, 1891, 1893, 1895, 1903, 1906: 1908, 1910, 1912, 1913. 1915 and 1916 33, 34, 35, 38 Amendment of March 2, 1889 33 Amendment of February 10, 1891 33 Amendment of February 11, 1893 33, 39, 41, 42, 43 Amendment of February 8, 1895 33 Amendment of February 11, 1903 33 Amendment of June 29, 1906 35 Amendment of April 13, 1908 38 Amendment of March 1, 1913 41 Amendment of June 18, 1910, known as "Mann-Elkins" Law, en- larging substantive provisions of Act 38 Amendment of August 24, 1912, extending jurisdiction of Com- mission over water carriers 39 Amendment of 1915 (Cummins), prohibiting limitation of liabil- ity in bills of lading 32, 43 Amendment of August 29, 1910, known as (iummins Amend- ment, prohibiting limitation of carrier's liability and qualify- ing Cummins Amendment of 1915 43 Supplementary Act of February 11, 1903, "Expedition Act" 33 Supplementary Act of February 19, 1903, "Elkins Act" 34 Supplementary Act of October 15, 1914, "Clayton Anti-Trust Law" 42 Supplementary Act of August 9, 1916, Pomerene Bill relating to bills of lading 43 Amplification of Sections, section 1 65 Carriers and Transportation, kinds of subject to the Act 57, 59, 65, 71 Carriers, not subject to 80 "Carriers," term defined 58 Commodities Clause 69 Constitutional Characteristics of Act, early in the courts 49 Constitutionality of, never seriously questioned 32 Construction, of, early judicial, repugnant to evident purpose of Act, and opposed to necessities of statute 215 "Employees," term includes 59, 69 "Families," term includes 59, 69 Hawaii, common carriers in, subject to 120 Interstate Commerce Commissioners appointed by President and concurred in by Senate 52 Interstate Commerce Commission, an administrative body created to enforce provisions of Act 32 Jurisdiction of, does not apply to transportation wholly within one state 66 351 352 AMERICAN COMMERCE ASSOCIATION Page Jurisdiction of, affected by temporary stoppage-in-transit 160 Jurisdiction of, not affected by nature of organization of carrier 143 Jurisdiction of Act takes effect only when one becomes common carrier under Supreme Court of tlie United States test » 140 Jurisdiction and scope of, general 47 Jurisdiction, general, is national in character 52 Jurisdiction over carriers not definitely brought within scope of authority by terms may. not be read into Act by implica- tion 80 Panama Canal Zone, common carriers in, subject to 120 Philippine Islands, common carriers in, subject to 120 Pipe Lines, Express Companies, and Sleeping Car Companies, in- cluded as common carriers subject to Act by Hepburn Amendment 35, 71 Plant facility as such not subject to Act 140 Prohibition against pooling of freight 32 Porto Rico, common carriers in, subject to 116 Power of not contravened by Shipping Avt 260 Purpose of, "to secure just and reasonable charges for trans- portation," and prohibit unjust discrimination 47 Right left in carriers to initiate their own rates 48 "Railroad," term defined 58, 66 Railroads and water lines 65 Railways, connections required between, by Hepburn Amend- ment 35 State statute, when provisions of are abrogated 153 State railroads, not engaged in- interstate transportation, not subject to 81 Switch connections, carrier's duty to construct 70 Telegraph, Telephone Companies or Cable Lines within District of Columbia, not subject to 74 Telegraph, Telephone and Cable Companies, subject to. 57, 60, 65, 73 Through routes and joint ra.tes 67 "Transportation," defined in Hepburn Amendment 35, 58, 66 Transportation, kinds of subject to 57, 144 Transportation, service and facilities must be furnished by carriers 174 "Under substantially similar circumstances and conditions" in- corporated into provisions of long-and-short-haul clause in original Act 32 Wagon Carriers, not subject to 81 Water Carriers, Act cannot be enforced as to oceanic lines 117 Water Carriers, when not subject to 80 General, Abrogates executory contracts between shippers and car- riers inconsistent with its provisions 49 Adds concrete administrative force to common law condemnation of unjust discrimination and the re- quirement of equality in treatment of shippers 79 Congress, intent of (1) to apply to railroad carriers en- gaged in interstate transportation and (2) to such interstate transportation partly by railroad and partly by water when under common control, man- agement and arrangement 127 Cummins Amendment not separate statute, but amend- ment to 346 Carriers, forming part of through line of railroad trans- porting interstate commerce, although service per- formed wholly within one state, engaged in inter- state commerce subject to the Act IBB Franchise charters, terms of, local regulations and private contracts must give way to the requirements of the Act 153 Interrelationship of sees. 1, 3, 4 and 15 206 Commission without jurisdiction over violations of Act committed in Canada 150 Carrier subject to Act the moment it engages in inter- state commerce 146 Mandate of rates must be just and reasonable 216 Movement in transportation conclusive 144 Nature of Act as a whole remedial 60 Originally passed, as 3 Original, passed Feb. 4, 1887, modeled after English Railway Acts 31 INTERSTATE COMMERCE LAW 353 Page Regulatory provisions apply to country as a unit 47 Rates and charges must be just and reasonable 313 Seeks to facilitate transportation and encourage com- petition 49 Any common carrier or carriers whether corporation, stock company, partnership or of individual owner- ship engaging in the character of transportation designated in the statute is subject to the Act 143 ADJACENT (see FOREIGN COUNTRY and FOREIGN COMMERCE). ADJUDICATED RATES. Maintaining rate reduced after complaint is filed 340 Carrier may withdraw rate condemned by Commission in another case 341 Reduction of rate while formal complaint is pending 341 ADVANCED RATES (see WESTERN ADVANCED RATE CASES 1911 and 1915, and RATES). Carriers rarely raise question of reasonableness of rates per se in justification of advanced rates 231 Cummins Amendment of 1915, believed to automatically advance existing rates 10 per cent 43 Five Per Cent Case 210 Western Advanced Rate Case of 1911 39, 224 Rate advance for short period with return to former rate raises presumption of unreasonableness of advanced rate 341 When advance in carload minimum weight is not advance in rate 342 Justified when effect is to equalize nearby rates 342 ADVANTAGE (see DISCRIMINATION). AGENCY. Shipper may not use carrier subject to Act to Regulate Com- merce or its agent as shipper's agent 83 Carriers may discharge part of duties through agents 141 AGREEMENT. As to rates, validity and effect of between shipper and carrier. . 342 ALASKA. Common carriers In, subject to the Act to Regulate Com- merce 115, 316 "ALLOCATED EXPENSES." What constitutes 241 ALLOWANCES. Plant systems, industrial, attempt of to procure allowances out" of locality basis of rates condemned by the I. C. C. but not repugnant to the holding of the Supreme Court in Tap Line Cases 141 Section 15 of Act, to Regulate Commerce, passing of necessity for allowances to shippers under 135 Section 15 of Act, to Regulate Commerce allowances to shippers under must be supervised by I. C. C 141 Section 15 of Act, to Regulate Commerce, purpose of, to give I. C. C. power to eliminate certain discriminations in allow- ances to shippers 136 To plant facilities, when unlawful 135 AMENDMENT (see CUMMINS AMENDMENT and ACT TO REGU- LATE COMMERCE). AMENDMENT. June 29, 1906, conferred on Commission original ju- isdiction over reasonableness of rates 216 AMENDMENT. Of June 29, 1906, Increased necessity for uniform classification by enlargement of Commission's powers 273 AMENDMENTS. To Act to Regulate Commerce 32 Of April 13, 1908, to Act to Regulate Commerce, gave greater certainty to persons to whom free passes or franks might be issued 38 Amendment of June 18, 1910. the Mann-Elkins Act, conferred authority on ComiMission to suspend advances in rates pend- ing investigation of their proprietv 39 Of August 24, 1912, to Act to Regulate Commerce extended juris- diction of Commission over water carriers 39 Of August 24, 1912, to Act to Regulate Commerce known as the Panama Canal Act 39 Of March 1, 1913, to Act to Regulate Commerce, providing for valuation of property of common carriers subject to Act.... 41 354 AMERICAN COMMERCE ASSOCIATION Page Of March 4, 1915, known as Cummins Amendment to Act to Regulate Commerce, prohibited limitation of carrier's lia- bility 43 Of August 29, 1916, known as the Cummins Amendment, qualify- ing prohibition of limitation of carrier's liability 43 Supplementary Act of August 9, 1916. to Act to Regulate Com- merce, known as Pomerene Bill relating to bills of lading. . 43 ANIMALS. Diseased, restricted inclusion of in commerce 21 AXTI-PASS LAW (see FREE TRANSPORTATION). ARRANGEMENT, COMMON (See COMMON CONTROL, MANAGE- MENT OR ARRANGEMENT). ATLANTA, GEORGIA (see COMPARISON). BACK-HALTJ (see RATES). BELT RAILROADS. Subject to Act to Regulate Commerce 60 BETTERMENTS. Relation of rates to investments of earnings in betterments and additions 249 Expenditures for additions to construction and equipment, and for original construction and equipment should be reim- bursed by all traffic accommodated by them 249 Improvements that will last many years should not be charged against revenue ot a single year. 250 BILLS OF LADING (see COMMON ARRANGEMENT). As document of title and symbolic of property transported 21 Lack of authority, in Federal Government to deal with 21 Goods shipped under through bill of lading from point in one state to point in another and received in transit by a state common carrier under conventional division of charges sub- jects such state carrier to an arrangement for a continuous carriage or shipment within the meaning of the Act 83 "Where state common carrier charges its full local rates, does not divest shipments of interstate character 82 Where state common carrier accepts and transports interstate traffic under bill of lading it subjects its line to a "common control, management or arrangement for a continuous ship- ment" 82 Supplementary Act of August 9, 1916, known as the Pomerene Bill, relating to 43 Through bill of lading, foreign transportation under, subject to the Act to Regulate Commerce within the U. S 149 Through bill of lading, not necessary to bring state railroad engaged in interstate transportation within the jurisdiction of the Act to Regulate Commerce 129 Defeating through rates by rebilling shipments at intermediate state point repugnant to rule in Kanotex Case 158 When element of through route 181 Shipments tendered under other than conditions of, when subject to higher rates 344 Through bill of lading, if rail and water carriers separately publish and file their rates applicable to through shipments traffic may be lawfully transported under through bills of lading even though rates are not joint rates 163 Water carrier may not lav%-fully accept shipments on through bills of lading issued by rail carrier unless water carrier has on file lawfully published rates applicable thereto 163 BIRMINGHAM, ALA. (see COMPARISON). BOAT LINES (see WATER CARRIERS). BRANCH LINE (see RAILROAD). BRIDGES AND BRIDGE COMPANIES. Subject to the Act to Regulate Commerce 60 Relation of carrier operating over bridge with bridge company. . 89 Bridges as part of carriers' lines 90 Bridges connecting two states 89 Bridges not common carriers. 90 Bridge company, although street railway operated over bridge, not a common carrier 90 Bridge company not owning rolling stock is a highway for in- terstate commerce but not common carrier 90 Included in term "Railroad" in the Act to Regulate Commerce.. 89 INTERSTATE COMMERCE LAW 355 Page Where railroad company acquires by contract right to use bridge, it and not the bridge company is common carrier.... S9 BRIDGES AND FERRIERS (see TRANSPORTATION). BULK. Of commodity, element in rate-making 290, 294, 295, 297 BURDEN OF PROOF. As to reasonableness of rates, cross reference 346 Carriers may not benefit by another carrier meeting burden of proof requirement, cross reference 346 Upon common carrier to show that increased rate or proposed increased rate is just and reasonable 208 CABLE COMPANIES. As common carriers 91 Subject to Act to Regulate Commerce 57, 60, 65, 73 CABLE MESSAGES (see TELEGRAPH MESSAGES). CALIFORNIA. Lemon rates, reasonableness of 256 CANADA. I. C. C. without jurisdiction over violations committed wholly or partly in Canada 150 CANALS. As commercial highways 6 CAPITALIZATION. As element of reasonableness of rates 252, 346 CAR FERRIES (see WATER CARRIERS, COMMON CARRIERS, FERRIES). As common carriers 93 Definition of 96 I. C. C. has found certain car ferries on Great Lakes to be of advantage to the convenience of the people and permitted their continuance 108 Independent ferry company, though eng;aged in receiving and forwarding freight to connecting railroad, if not operating under common management or arrangement not subject to Act to Regulate Commerce 9S Owned and operated by rail carriers, included in "all-rail" line. . 96 Subject to Act to Regulate Commerce 60 CARRIAGE (see TRANSPORTATION). Primary service of transportation , 155 CARRIERS (see COMMON CARRIER, FOREIGN CARRIERS, STATE and WATER CARRIERS). Term "carrier" in Act to Regulate Commerce includes 58, 66 Accounts of, subject to Act to Regulate Commerce 57 All carriers or transportation not subject to the Act 80, 167 Common arrangement between 82 Interstate carriers and interstate transportation, difference be- tween 145 Interstate, becomes such by reason of participation in interstate movement 145 Interstate transportation contradistinguished from the move- ment of the thing transported, is but a means of 145 Not subject to Act to Regulate Commerce 80 Previous express agreement between carriers not necessary to bring through transportation within scope of Act to Regulate Commerce 82 Rail-and-water uniting in rate for interstate traffic and issuing through bill of lading, subject to Act to Regulate Commerce. 86 Right of, to initiate own rates 48, 320 Receiving out of established joint rate amount equal to Indi- vidually established local rate, does not thereby remove carrier from the jurisdiction of the Act 156 Steamship company owning no vessel not a carrier 88 Service, jurisdictional test of, excludes certain carriers under certain conditions and other carriers under all conditions. ... 80 Subject to Act to Regulate Commerce, or its agent, cannot be made agent of shipper 83 Subject to Act the moment carrier engages in interstate com- merce 146 Subject to Act,' kinds of 57, 65, 71 Subject to Act, detail description of 59, 60 Switch connection, duty to construct 70 Transporting express matter for express carrier subject to Act to Regulate Commerce 88 356 AMERICAN COMMERCE ASSOCIATION Page CARS (see LIVE STOCK, PORTO RICO. PRIVATE CAR COM- PANIES. SLEEPING CAR COMPANIES and TRANSPOR- TATION). Cars, as well as locomotives of carriers in Porto Rico must con- form with Safety Appliance Acts !!• Double-deck, carrier must furnish if it undertakes to transport and provides in tariff rates therefor 177 Interchange between railroads inuring to advantage of industry controlling industrial railroad 137 Live stock carrier required to furnish live stock cars 178 Reasonable rules and regulations w^ith respect to exchange, In- terchange, and return of cars 174 CHARGES (see RATES). State statutes prescribing terminal charges not controlling when relating to traffic between the states 138 CHARTER. Congress has power to charter a railroad and make same sub- ject to the Act 143 Special, extraordinary privileges granted by states to railroad builders • Special railroad, legislative approval of • Terms of franchises, charters, local regulations and private con- tracts, must give way to the requirements of the Act to Regulate Commerce 168 CHILDREN. "When entitled to free transportation 69 CHUTES (see LIVE STOCK). CLAIMS. Supplementary Act of Oct. 15, 1914, known as the Clayton Anti- Trust Law of 1914 as to pavment of false claims 42 CLASSIFICATION JOINT (see SECTION 15). Best accomplishment is reasonable and substantial approxima- tion in relationship of articles 292 Classification is art or science in itself 281 Classifications must be just and reasonable 67 Carload and less-than-carload ratings, excessive differences between constitute undue preference 304 Carload ratings, should be established whenever carload quan- tities are offered 304 Carriers required by Act to establish, observe and enforce just and reasonable classifications of property 263 Carriers required to adopt classification prescribed by Interstate Commerce Commission 264 25.000 articles of commerce affected by transportation.. 276 Commission recognizes distinction between legal obligations and lawful discretion of carriers in 291 Cotton, classification of. comparison of square and round bales. . 288 Early development of classification by railways in U. S. not along definite lines 267 General principles of 285, 289 Elements of, reviewed in prominent cases by Interstate Com- merce Commission 297, 302 Bulk, element in 290, 294, 295, 297 Commercial conditions, element in 291 Cost plus insurance risk 222 Density of population, effect on quantity and basis of traffic and trade 282 Desirabilitv of traffic, element in 291, 294 Liabilitv to damage, element in 291, 294, 295, 296 Misbillihg, prevention of. element in classification 293, 295, 302 Package, security of, element in 305 Packing, element in 294 Should be kept entirely separate from questions of rates or revenues of carriers 303 Value of commodity, element in 290, 294. 296 Value, declared, element in 296 Volume of traffic, element in 290. 294. 296 Intention of framer of classification or arbitrary practice of carriers thereunder not authoritative construction thereof. . 297 Importance of. as foundation of rate-making 276 Interstate classifications, three general ones now in effect 283 Interstate classification schedules established and promulgated through associations or committees representing the carriers 284 INTERSTATE COMMERCE LAW 357 Joint, Commission may establish 187, 209 Jurisdiction of 1. C. C. over 265 Prior to 1910, Commission did not have in statutory terms power to establish just and reasonable classifications of property.. 266 Methods of developing classifications 282 Method of. In vogue on American railways recognized by modi- fications in classifications made by way of differential adjustments 278 Metropolitan Paving Brick Case 293, 302 Misbilling and misrepresentation 296 Mixtures, liberal provision should be made for 304 Multiplicity of individual classifications prior to Act to Regu- late Commerce 267 Must be varied to meet competitive conditions 293 Must not rest upon use to which commodity is to be put after sale 293 Necessity for equitable classification demonstrated 277 New or second-hand condition of article, not an element in.... 296 No mathematical accuracy in determining relative grouping of articles 292 Not exact science 294 OflScial classification, constructional features 284 Official classification, establishment of 268 Procter and Gamble Case 299 Public function 303 Rate-making, importance of classification as foundation of.. 276, 278 Rates, difference in not well based not founded upon transporta- tion distinction in articles 292, 294, 295 Rates, relation of classification to freight rates 279 Rating, raised at destination account character of container, classification schedule should provide initial carrier liable for difference in absence of misrepresentation by shipper. . 306 Reasonableness of classification ~ 263 Reasonableness of rates, classification material factor in de- termining, but not only factor 306 Reasonableness of rates, Commission may determine rates on different commodities 223 Regulations, practices, and classifications must be just and rea- sonable 67 Review by Interstate Commerce Commission of prominent classi- fication cases 297, 302 Schedules must be construed according to their language 297 Schedule, legal status of 281 "Shippers problem," The 274 Southern classification, constructional features of 284 Southern classification, establishment of 269 Standard, for convenience oi: uniformity causing unreasonable- ness of rates 297 Stowe-Fuller Company Case 292-301 Tariffs of rates and classification schedules are interdependent. 279 Terms of, indefinite and incapable of application, condemned by Commission -. 296 There can never be certainty or exact justice in 290 There should be unvarying relations between articles of sub- stantial traffic likeness 294 Unification of official and western classifications attempted in 1887 270 Uniform, authorized by Congress in 1888 270 Uniform, Commission has repeatedly emphasized necessity for. . 303 Uniform, history of development and progress of 270 Uniform, I. C. C. on 307 Uniform classification, necessity for increased by enlarged pow- ers given Interstate Commerce Commission by Hepburn Amendment 273 Units, compilation of, expressing relation between articles aa to weight, space and value 303 Unit test, constitutes basis of comparison with other articles. . 306 Unit test may not finally determine classification of article.... 306 Vagaries of traffic cannot be reduced to basis of exact relation- ship 292 Weight, carload minimum, carriers should consider both physical and commercial minimum 304, 305 Western Classification Case 267. 303, 306 358 AMERICAN COMMERCE ASSOCIATION "Western Classification, constructional features of . . 284 "Western Classification, establishment of . pro CLASSIFICATION COMMITTEE. Classification machinery of the carriers 290 Revisory tribunal should hesitate to disturb results' of' delibera- tions of oqi CLAYTON ANTI-TRUST LA"W. COLON ^^ October 15, 1914, as to the payment of false claims 42 Although within geographical limits of Panama Canal Zone Is governed by and under the sovereignty of the Republic of Panama i oa COMBINATION. ^^^ Among carriers, reasonableness of rates when product of 348 COMMERCE (see FOREIGN COMMERCE). Activity, commercial, at lowest ebb in nation's history 6 Articles and persons whose presence in commercial transactions are in contravention of State police regulations, not subjects of 21 Bills of exchange, notes, drafts, etc., excluded from being parts of 21 Commercial historians and text writers prolific and sometimes imaginative 15 Commodities, transportation of, between state's' to 'be free, except where restricted by Congress 13 Communication and transportation, include usual agencies of 19 Constitution of U. S., "commerce" as used in, is without distinc- tion as to scope or operation 19 Constitution of the U. S., commerce clause of, its possiiaiii'tiea and objective Ij Contract of shipment, determined by . . . . . . .' .' .' ." .' .' .' .' " .' 29 Court decisions dealing with restricted inclusion of pauper's' im- moral persons, convicts, persons afllicted with contagious diseases: spirituous liquors, explosives, diseased animals, oleomargarine, tobacco in certain forms, etc 21 Definition of term, in the abstract 30 Distinction, main, drawn by the courts .". 20 Domestic, regulations of vessels in 260 Early regulation of, by states 6 Early interstate, negligible in quantity !.!!.'!.*! 6 Early, in connection with canals * * " k Early, of original thirteen states .'..'..'.'.'. 4 Essential character of, not its mere incidents, determine whether or not it is interstate I55 Expansion, commercial and industrial .............'.'. 6 Federal and state governments, sovereign powers of with re- spect to interstate and intrastate commerce 7 Foreign, I. C. C.'s jurisdiction covers only that part of through import or export rates applicable to inland haul 147 Foreign, in transportation, not subject to the Act to Regulate Commerce except as to movement within the U. S 147, 172 Foreign, Inland movement by rail or by rail-and-water, subjects the transportation within U. S. to jurisdiction of Act 148 152 i-oreign traflfic between U. S. and adjacent foreign country sub- ject to Act within U. S 148, 149, 150, 161 foreign as soon as enters or while remains within territorial jurisdiction of U. S. subject to Act same as purely interstate traffic 14J Foreign, Act applies to inland movement oic when transportation performed wholly within one state 149 152 Foreign, statutory provisions relating to transportation to ports of trans-shipment 151 Foreign, what constitutes; jurisdictional test deterrniried' by nature of traflic ' 151 Foreign, statutory provisions relating "to transportation ' from foreign country to a point in the U. S 162 Foreign, from foreign country not adjacent through the if 's to an adjacent foreign country, subject to Act within U. S. . . 152 Foreign, character of not determined by billing 98 Foreign, Southern Pacific Terminal Co. Case 99 Foreign, conduct of carriers evidence of arrangement to carry as foreign freight 99 INTERSTATE COMMERCE LAW 359 Page Foreign, Sabine Tram Company Case 98 Foreign, where shipment at point of origin is destined to foreign port and is taken up by successive intervening common carriers, effect of 98 Foreign, if rail carrier participates with a water carrier in foreign traffic tlirough Panama Canal it may be required to malve similar arrangements with any or all other lines of steamships operating from said port to the same foreign country 180 Intent and purpose of Congress to provide for regulation of whole field of national commerce, except that wholly within a state 167 Interstate and foreign, when subject to the Act to Regulate Commerce 147 Interstate transportation, original intent to make all, wholly by railroad and such interstate transportation as might be partly by railroad and partly by water under a common control, management or arrangement, subject to the Act to Regulate Commerce 147 Interstate, in order to be divested of interstate character in commercial intercourse must be within exclusive jurisdiction of the state at all times during its niovement 30 Interstate movement, where contract is for, interstate character of movement cannot be ■ changed except by change in con- tract for its transportation 30 Interstate, federal sovereignty in 26 Interstate shipment, where transportation is between ports within the same state, but passes over public waters 20 "Interstate Commerce," what constitutes 28, 29, 155 Interstate, regulation of 30 Interstate shipment, where, In course of movement passes through adjacent foreign country entire transit is within jurisdiction of federal government 30 Intrastate, Shipping Act does not apply to 260 Judicially interpreted to include objects exchanged, agency of exchange or communication, and persons involved in opera- tion 20 Kinds of cases; where state power is exclusive; where power is concurrent with the state; and where authority of Congress is exclusive , 27 Means of carrying on, between the states 3 Mediums of intercourse and communication, includes 20 Natural resources and commerce of nation 4 On the ocean and other navigable waters 7 "Original Package" rule, early application of 21 Quantity within the states, reversal of former conditions 14 Right of, was so essentially national in character that any action of federal government was equivalent to determining that the commerce should be free and the state wholly with- out power to interfere with or regulate such commerce.... 31 Stoppage in transit, effect of, within state of origin 29 Southern Pacific Terminal Case 98 Things incidental to the operation of, but not part of 21 What is 19 Gibbons vs. Ogden, giving constructive scope to the plenary power of Congress for regulating interstate 8 Comprehensive construction of term, by Chief Justice Marshall. . 9 "When origin and destination are within the same state but ship- ment passes outside of state during transportation 30 When transportation determines 29 Wholly within one state, courts without power to regulate, . . . 167 Within the state, compared with interstate 6 COMMERCE CLAUSE. Of article I of Constitution of U. S 23 Of constitution of U. S. legislative power of Congress over Dis- trict of Columbia is plenary and does not depend upon special grant of power such as the Commerce Clause of the Con- stitution 130 Status of states and territories under 171 COMMERCIAL CONDITIONS. Element in rate making 291 Element in classification making 291 360 AMERICAN COMMERCE ASSOCIATION COMMERCIAL MINIMUM (see MINIMUM). COMMODITIES CLAUSE (see ACT TO REGULATE COMMERCE). Of Act to Regulate Commerce, included by Hepburn Act 35 Fourth group of industrial railways by I. C. C. in some instances fell under the direct inhibition of the commodities clause.. 135 Prohibits carrier from transporting own commodities 35 In section 1 of Act to Regulate Commerce , 69 COMMODITY RATES (see RATES). COMMON ARRANGEMENT (see THROUGH ROUTES AND JOINT RATES; TRANSPORTATION). Acceptance by water carrier of through traffic on through bills of lading issued by rail carrier evidence of common arrange- ment and subjects traffic to Act to Regulate Commerce. 162, 163 "Arrangement" for continuous shipment is complete whenever carriers have arranged for or undertake receipt and delivery of through traffic 85 Between carriers 82 "Common arrangement" clause not applicable to all-rail trans- portation 159 Common arrangement for continuous carriage between rail and water carriers where water carrier not subject to Act to Regulate Commerce 100 For through and continuous carriage eifected, where shipments sent through to destination without intervention of shippers at junction points 191 If rail carrier participates with a water carrier in foreign traffic through Panama Canal it may be required to make similar arrangements with any or all other lines of steamships operating from said port to the same foreign country .. 180, 190 Interpreted by courts to mean an "agreement or understanding between connecting carriers respecting the transportation of property and the charges and divisions to be made therefor". 181 Interstate Commerce Commission on, prior to 1906 84 Lighterage Company independently operated but engaged in interstate transportation under common control, manage- ment or arrangement with rail carrier, is subject to the Act. 120 May exist without establishment of a through route or recogni- tion of a through bill of lading 99 Modification of rule 86 Original intent to make all interstate transportation wholly by railroad and such interstate transportation as might bo partly by railroad and partly by water under a common con- trol, management or arrangement, subject to the Act to Regulate Commerce 147 Provisions of Section 1 of Act. somewhat ambiguous prior to 1906. 126 Terminal or belt railroad receiving interstate shipments on •through bills of lading to or from industries on its line sub- jects its line to an act of common control, within the mean- ing of the Act to Regulate Commerce 131 Test of, prior to 1906 84 Through billing not necessary to constitute 86 Transportation to an adjacent foreign country under common control, management or arrangement for a continuous car- riage or shipment, subject to the Act to Regulate Commerce as to movement within U. S 121 Where one of participating carriers is independent water carrier bound by principle of "common arrangement" between rail- roads 162 COMMON CARRIERS (see CARRIERS. INTERSTATE COMMERCE, LIGHTERS AND LIGHTERAGE COMPANIES. STATE, INTRA- TERRITORIAL CARRIERS, WATER CARRIERS. CAR FERRY, BRIDGES AND BRIDGE COMPANIES AND FOREIGN RAIL- ROADS). Under Act to Regulate Commerce, two classes — natural persons and corporations — recognized by 123 Alaska, in 115, 316 Bridges as part of carrier's line 90 Bridge company, although street railway operating over bridge, not a common carrier 90 Bridges not common carriers 90 By railroad and by railroad and water 75 Cable companies as 76, 91 INTERSTATE COMMERCE LAW 361 Page Car ferry as 98 Common law definition of 77 Common law oblig-ations and rights of not abrogated by Act to Regulate Commerce 78 Express companies as 75, 92 Fast freight lines as 91 Foreign railroads as 98 Hawaii, in 120 Incorporation not condition precedent to right to be common carrier by railroad 80 Incorporation of, effect of 80 Incorporation of, not full test of jurisdiction 79 Industrial railways 133 Jurisdictional status of boat lines 75 Jurisdictional status of cable companies 7B Jurisdictional status of common carriers in general 75 Jurisdictional status of electric railroads 75 Jurisdictional status of express companies 75 Jurisdictional status of pipe lines 75 Jurisdictional status of sleeping car companies 76 Jurisdictional status of steam railroads 75 Jurisdictional status of telegraph and telephone companies.... 75 Lessees 125 Lighters and lighterage companies 120 May not restrict use of railroad or facilities of transportation in own interest regardless of rights of shippers 78 Meaning of term in Act to Regulate Commerce 66 Not subject to the Act to Regulate Commerce 80 Panama Canal Zone, in 120 Philippine Islands, in 120 Porto Rico, in 116 Principle that receiver is officer of court appointing him and subject only to its authority modified by his duties fixed by Act to Regulate Commerce 123 Principle that he who devotes his property to use in which public has interest, in effect, grants to public an interest in that use 79 Private car companies 121 "Railroad," term defined 58, 66 Relation of, operating over bridge with bridge company 89 Right of public to regulate, in the performance of carrier's duties and obligations has been long recognized by the courts.... 79 Real test of common carrier, extent to which railroad may be used as matter of right, ruling by Supreme Court in Tap Receivers and Trustees' of, subject to Act to Regulate Com- merce ■ • • • • • •°2' }nK Sleeping car companies 35, 60, 66, 125 State, jurisdiction of Act to Regulate Commerce over 81 Subject to the Act, by railroad and by railroad and water 76 Successors and Purchasers of, subject to Act to Regulate Com- merce 60, 123 Tap lines 13Y Test of status of common carriers 77 Transportation service and facilities, must be furnished by carriers subject to the Act to Regulate Commerce 174 Where railroad company acquires by contract right to use bridge, it and not bridge company is common carrier 89 COMMON CONTROL. MANAGEMENT OR ARRANGEMENT (see COMMON ARRANGEMENT). Original application of Act to Regulate Commerce to transporta- tion "partly by railroad and partly by water when both were used under common control, management or arrangement for continuous carriage or shipment" .40, 82 COMMON LAW. Act to Regulate Commerce interferes in no way with common law right of carriers to make contract 48 At one time considered adequate to restrain corporate land carriers 10 Common carriers, definition of at 77 Common law obligation and rights of common carriers not abrogated by the Act 77 362 AMERICAN COMMERCE ASSOCIATION Requirement as to reasonableness of rates enacted into statute by Congress 215 Test of status of common carrier at .'. 77 Transportation unknown to, as developed in the U S. 11 COMPARATIVE RATES (see RELATIVE RATES; REASONABLE- NESS OF RATES). COMPARISON (see REASONABLENESS OF RATES; RELATIVE RATES). ■ Essence of reasonableness of rate is comparison with rate of known reasonableness 241 License of, relative rates .'.'.'.'.'.'.'.'..'.'.'.'."'.*.'"' 321 Most satisfactory test of reasonableness of rates* is to compare rates of one carrier with those of others in same territory under same general conditions 214 Of rates on different branches of same line 326 Of rates on different lines ' 325 Population, wealth and capitalization of Atlanta, Gra.,'and" Bir'rn- ing-ham, Ala., compared in establishing parity of rates be- tween those cities 347 With division of joint rates !. i ..!..!!!!.!!.!!. ! 326 With rates established by I. C. C, latter rates regarded in' same light as rates made by carriers without order of Commission 337 With rates fixed by state authority 329 With water-compelled rates qoa COMPENSATION. If service is public transportation he who renders same may be compensated whether a common carrier or not 141 COMPETITION. Competitive conditions, classifications must sometimes be varied to meet 293 Held by Supreme Court of the U. S. to 'inherently 'prevent' ship- pers being situated under substantially similar circum- stances and conditions 61 Oil company owning common carrier pipe line which does 'or might compete with its own steamers, within scope of Panama Canal Act 73 Rail carrier, by participating in through "route "between "two termini, only one of which is reached by its rails, in fact serves both termini, and may compete under Section 5 with steamers operating as part of another route between same termini jgj Unlimited markets, domestic or foreign, legitimate "competition for 211 Within proper limitations, competition is element to be con- sidered in classifying freight 293 COMPLAINT. For unreasonableness of rates under provisions of sec. 1 of Act. . 207 I. C. C. cannot proceed under, after territory admitted to state- hood, even though complaint filed prior thereto 115 If carrier is subject to Act to Regulate Commerce both carrier and receiver or trustee should be made defendants in com- plaints 125 Maintaining rates reduced after complaint is filed 340 Reduction of rate when formal complaint against it is pending. . 341 Where receiver is subject to the Act, prior leave of court ap- pointing him not necessary to entitle shipper to bring com- plaint against such receiver 124 CONCESSION (see DISCRIMINATION and REBATES AND REBAT^ ING). CONDITIONS (see REASONABLENESS OF RATES and BETTER- MENTS AND CONSTRUCTION). Industrial, commercial, and transportation, have proceeded from very inception in state of interdependence 242 CONFISCATION. Limitation not equivalent to 171 CONGRESS (see FEDERAL). Action of renders state regulations void when in conflict 27 Authority over navigable waters early questioned but declared complete by Supreme Court 7 Citizens of each state entitled to privileges and immunities of citizens of the several states 28 Co-efficient power of, and exercise of ".20, 22 INTERSTATE COMMERCE LAW 363 Page Constitution and laws of United States, and all treaties made under authority U. S. supreme law of the land 23 Derives all powers directly from Constitution 8 Did not divide authority over elements of interstate commerce intermingled with interstate ferriage 94 Power to regulate and control early interstate commerce never agitated 7 Has covered entire field of interstate rates and rate-making, superseding state legislation pertaining thereto 153 May not tax articles exported from any state 22 No preference to ports of one state over those of another; nor vessels bound to or from one state obliged to enter, clear, or pay duties in another 22 Persons born or naturalized in United States and subject to juris- diction thereof are citizens of U. S. and of state wherein they reside 23 Power in, to regulate, but unexercised by it, admits exercise of power by state until federal power is asserted 28 Power not delegated to, by Constitution, nor prohibited by it to the states, reserved to the states 23 Power to establish postofflces and post roads 22 Power to regulate commerce with foreign nations, among several states and with Indian tribes 22 Power to charter railroad and make same subject to Act to Regulate Commerce 27 Where subjects of commerce are national in nature or admit of only one uniform system or plan of regulation, power of Congress is exclusive 27 CONSTITUTION (see COMMERCE CLAUSE). And laws of United States, and all treaties made under authority of U. S. constitute the supreme law of the land 23 Of United States enumerates powers vested in Federal govern- ment with co-efRcient power to pass laws giving effect to constitutional powers 22 CONSTRUCTION (see BETTERMENTS). CONTRACT. Congress has covered entire field of interstate rates and rate- making superseding state legislation pertaining thereto... 153 Of shipment as determinative of character of transnortation. . . . 156 Terms of franchises, charters, local regulations, and private contracts must give way to requirements of Act to Regulate Commerce 153 CONVICTS. Restricted inclusion of, in commerce 21 CORPORATE BODY. As common carrier recognized by Act to Regulate Commerce. . . . 123 CORPORATIONS (see COMMON CARRIERS). Land carriers mostly corporate bodies 10 Quasi-public authority over . . : 3 Relationship between corporate land carriers and general public at one time amounted to carriers making laws for them- selves 11 COST OF SERVICE. And value of service fundamental elements of reasonableness of rates 246, 250 Competition of markets, of producers, and of rival carriers, especially by water, has resulted in freight rate system which cannot be assumed to have resulted in earnings pro- portioned nicely to the respective costs involved 205 Difficult to determine proximate cost per unit of transportation. . 229 Element in rate-making 290 Factors bearing upon 211 No standard by which cost of service or reasonableness of rates can be fixed with certainty 214 Problem of estimating cost of transporting special commodities at best in developmental stage 205 Rate-making in the past has not been prosecuted parallel with comparative cost studies 205 Separation of cost of handling traffic at terminal and cost of moving between terminals 230 Separation of expenses on basis on which traffic is handled. . . . 229 Valuation of railroads, most important step in measuring rea- sonableness of rates 240 364 AMERICAN COMMERCE ASSOCIATION Fact that carrier has not kept cost within reasonable limit has bearing upon reasonableness of rates 21? COTTON (see CLASSIFICATION). COURTS. Affirmative duty to afford redress at common law for unreason- able rates has been negatively exercised 216 On the reasonableness of rates '' *' 244 Pointed out necessity for federal activity and gave wise arid judicial constructions, paving the way for the general government to exercise its existing powers 31 CUMMINS AMENDMENT. Applies to express companies 92 Not a separate statute but amendment to Act to Regulate Com- merce 345 Of March 4, 1915, prohibited limitation of carriers' liability.!.. 43 ,H?^ *• 1915, qualified by Cummins Amendment August 29, 1916 4j Shipments tendered under other than conditions of bill of lad- ing, effect on rates 344 DAMAGES. Liability of initial carrier for, or loss of through shipment 3( Shipper may not proceed in court for rate, without previous action by Interstate Commerce Commission 216 DECLARATION. Of value, element in rate-making 296 DELIVERY (see TRANSPORTATION; LIVE STOCK). Whether receipt and delivery of goods within switching limits of a city is additional service or included in line-haul rate 142 DEPOTS (see TRANSPORTATION; LIVE STOCK and STOCK YARDS). oxv^uiv DISADVANTAGE (see DISCRIMINATION). DISCRIMINATION (see REASONABLENESS OF RATES" SECTION 1; SECTION 3; SECTION 4; SECTION 15; REBATES AND REBATING). Act to Regulate Commerce prohibits unjust discrimination in transportation services or between persons, like kinds of traffic or localities 47 Act to Regulate Commerce prohibits greater compeRsatiori for longer than for a shorter distance 47 Allowance by trunk lines of divisions to plant facilities con- demned by I. C. C. as device to give undue disadvantage to shipper , 135 Allowances to tap lines east and west of the Mississippi River!! 138 Between persons and localities, early practices 16 Between state and interstate rates — Shroveport situations 332 Difference in rates on non-competitive commodities not undue.. 223 Effect of South Dakota Express Case ruling on entire state structure of express rates 337 Excessive difference between carload and less-than-carload rat- ings constitutes undue preference of carload shipper 304 Facts determining rate to be unreasonable per se may also show rate to be unduly prejudicial 208 Lawful order against unjust discrimination cannot be nullified by subsequent reorganization or transfer of property to another corporation 123 Minnesota Rate Case 333 Purpose of Section 15 of the Act to Regulate' Commerce to give Commission power to eliminate certain discriminations in allowances to shippers 136 Rate attacked must so discriminate as to be undue. ...!!!!!!!!! 213 Section 1 of Elkins Act makes solicitation, acceptance or receipt or unjust discrimination unlawful 122 Section 3 of Act to Regulate Commerce makes giving oic ii'ndue or unreasonable preference or advantage or subjecting to undue or unreasonable prejudice or disadvantage unlawful. 206 Shreveport Case 256 South Dakota Express Case !!!.!!!! 337 Unjust, prohibited at common law ! ! ! ! ! 79 Unreasonableness of rates under Section 1 not established sls'leiy by proof of violation of Section 3 207 INTERSTATE COMMERCE LAW 365 Page Where holding' company Includes terminal company operatiner Interstate transportation facilities, both holding and termi- nal company are proper parties to proceeding involving discrimination 132 Where jobbing centers are situated near state lines, differences in interstate and state rates result in discrimination 331 Where lower intrastate rates over which carrier has no control do not amount to unlawful discrimination 330 Where lower state rates create discrimination against interstate rates 256, 257 Where paramount to question of reasonableness of rates 256 DISTRICT OF COLUMBIA. A municipal corporation possessing no legislative power and over which the plenary power of Congress is supreme 130 Act to Regulate Commerce, no jurisdiction over telegraph or telephone companies or cable lines within District of Co- lumbia 74 Bears same relation to federal government that city sustains to state legislature 130 For jurisdictional purposes should be treated as one of "states" as word is used in "commerce clause of Constitution of U. S." 145, 171 Legislative power of Congress over, is plenary and does not depend upon the special grant of power such as the com- merce clause of the constitution 130 Public Utilities Law of 1912 130 Section 1 of the Act brought all carriers engaged in transporta- tion described within the District of Columbia under juris- diction of Act 130 Street Railways Act of 1908 130 Street Railways -within, prior to enactment of District of Colum- bia Public Utilities Law were subject to jurisdiction of Act to Regulate Commerce 130 Telegraph messages within, not subject to Act to Regulate Commerce 148 DIVISIONS. And allowances with industrial railroads, legality of dependent upon particular facts in each case 136 Commission authorized to prescribe divisions of joint rates ap- plicable to through routes 178 Comparison of, in joint rate 326 Disagreement between carriers does not prove rates unreason- able or justify increase in rates 183 Elements Commission must consider in determining just and reasonable proportions of joint rates 183 Giving to words "or otherwise" their full legal significance. Commission's jurisdiction over division of rates unques- tioned 183 Joint rates. Commission empowered to prescribe division of. . . . 182 Joint rates need not be divided between participating carriers on mileage or any other fixed basis 183 Limitations prescribed by I. C. C. within which joint rate ar- rangements may be made between trunk lines and industrial railways 136 Purpose of procedure in creating incorporated common carrier out of plant facility to procure divisions from trunk lines. . 141 Trunk lines, divisions allowed by, to plant facilities, condemned by I. C. C 135 Trunk line roads permitted to arrange divisions of rates with in- dustrial railroads which are common carriers ,. . , 133 ELECTRIC RAILWAYS (see STREET RAILWAYS, RAILROAD, THROUGH ROUTES AND JOINT RATES). Jurisdiction of Interstate Commerce Commission over, when engaged in interstate transportation, affirmed by courts.. 144 Street electric, when subject to Act to Reerulate Commerce.... 114 Street, Commission may not establish through routes, joint classifications or rates between street electric passenger railways not engaged in generally transporting freight and railroads of a different character 210 ELEVATION (see TRANSPORTATION). ELKINS ACT (see DISCRIMINATION). Jurisdiction of prosecutions of offenses 84 366 AMERICAN COMMERCE ASSOCIATION Page Prohibits rebates and rebating 122 Provisions of, in aid of Act to Regulate Commerce 34 Punishment by imprisonment restored by Hepburn Act 35 Section 1 of, brought private car companies within the jurisdic- tion of Act to Regulate Commerce 122 Water carriers not applicable to 100 EMINENT DOMAIN. Power of supreme over the rights of individual citizen 6 "EMPLOYEES," term defined 59, 69 EMPLOYERS' LIABILITY ACT. Expressly applies to Porto Rico 119 EMPLOYERS' LIABILITY CASE 169 ENGLISH RAILWAY ACTS. Railway and Canal Act of 1854 31 Railway Clauses Consolidation Act of 1845 31 Regulations of Railways Act of 1873 31 Original Act to Regulate Commerce modeled after 31 EQUALIZED RATES. When advance in carload minimum weight is not advance in rate 342 ERIE CANAL. No power in the I. C. C. to establish through routes between railroad owned lake lines and barge lines operating on the Erie Canal 108 ESTOPPEL (see REASONABLENESS OP RATES). Equitable, arising from justifiable expectation that past rates will be maintained 211 EXCHANGE (see CARS). EXPEDITION ACT. Supplementary to Act to Regulate Commerce providing for ex- pediting procedure in suits brought by the U. S. or prose- cuted in the name of the I. C. C. by the Attorney-General.. 33 EXPENSES (see ALLOCATED EXPENSES). EXPLOSIVES. Restricted inclusion of, in commerce 21 EXPORT (see COLON, FOREIGN COMMERCE, IMPORTS, PORT OP TRANS-SHIPMENT and RATES). Traffic not subject to Act to Regulate Commerce except as to movement within U. S 147, 148 Interstate Commerce Commission may deal with import and export rate situations only as though ports of entry and trans-shipment were destinations instead of gateways 121 Shipments to Colon are exports 120 EXPRESS CARRIERS. South Dakota Express Case, effect is to "blow up" entire state structure of express rates 337 As common carriers, subject to Act to Regulate Commerce.... 35, 60, 66, 92 Cummins Amendment applies to 92 Express Companies Case 60 Interstate Commerce Commission regards express companies as agencies created by railroads for conduct of certain kinds of freight business 92 Operating over or in connection with railway line or lines stands in same attitude as a railroad except insofar as language of Act to Regulate Commerce precludes it 92 Railroad, not otherwise subject to the Act to Regulate Com- merce, transporting express matter for express carrier sub- ject to the Act to Regulate Commerce also becomes subject to the Act 88 FACILITIES (see THROUGH ROUTES and JOINT RATES; LIVE STOCK; RAILROADS; TRANSPORTATION). Carriers must furnish facilities for through routes 191 Carrier not compelled to use facilities of other either by lease or otherwise 176 Carriers subject to the Act to Regulate Commerce required to afford all reasonable, proper and equal facilities for receiv- ing, forwarding, interchanging and delivering traffic be- tween their respective lines 175 Carriers subject to Act required to furnish adequate facilities. . 174 Lease of or offer of trackage rights by trunk line carrier to give undue advantage to shipper, condemned by I. C. C. .. 141 INTERSTATE COMMERCE LAW 367 Page Or transportation service, whatever law requires carrier to supply it has the right to furnish 176 Railroads may lease suitable facilities 141 Special, for live stock 176 "FAMILIES." term defined 59, 69 PARES (see RATES). FAST FREIGHT LINES. As common carriers, subject to Act to Regulate Commerce. .. 60, 91 If unincorporated and mere trade name tariffs must be filed in name of corporate carriers \ 91 Must file tariffs with I. C. C 91 Usually trade names for fast freight service 91 FEDERAL (see CONGRESS). Commerce Clause of Constitution of U. S. vests power In federal government to regulate commerce among the several states. 23 Constitutional powers; exclusive authority and authority con- current with the state 22 Plenary power of federal government sufficient to remove evils and distress 31 "Federal sovereignty in interstate commerce" 25 Government finally exercised power of regulation over inter- state commerce in 1887 31 Government without inherent sovereignty 22 Interstate commerce, control of 3 Interstate commerce, exercise of authority over 19 FERRIES AND FERRY COMPANIES. Not subject to Act to Regulate Commerce, prior to amendment of 1908, except when part of common arrangement 97 Congress did not divide its authority over the elements of in- terstate commerce intermingled with interstate ferriage... 94 As common carrier, subject to Act to Regulate Commerce 60 Gloucester Ferry Case 94 Municipal, when subject to Act to Regulate Commerce 97 New York-Jersey City ferries subject to jurisdiction of I. C. C. 94 FINANCE. Financial disasters accompanying consolidation of competitive rail lines and absorption of small and weak roads 14 FIVE PER CENT CASE 175. 210 FORAKER ACT. Of April 12, 1900 119 FOREIGN CARRIERS. Jurisdiction of Act to Regulate Commerce over part of trans- portation which is through U. S 86 FOREIGN COMMERCE (see COMMERCE). "Adjacent" is used to modify the word "foreign" 121 What is meant bv "substantial continuity of rails" 121 FOREIGN COUNTRY (see ALASKA. HAWAII, PORTO RICO, and FOREIGN COMMERCE, CUBA, PHILIPPINE ISLANDS). FOREIGN RAILROAD. As common carrier, subject to Act to Regulate Commerce. . . .60, 97 FOURTH SECTION (see LONG-AND-SHORT-HAUL and SECTION 4). FRANCHISE. Terms of franchises, charters, local regulations and private contracts must give way to requirements of Act to Regulate Commerce 163 FRANKS (see FREE TRANSPORTATION). FREE TRANSPORTATION. Excepted classes of persons in prohibition of free passes or free transportation - 68 Free passes and free transportation prohibited 35, 68 Greater certainty of persons to whom free passes or franks might be given, provided by amendment to Act to Regulate Commerce of April 13, 1908 38 Jurisdiction and penalty :....:.. 69 Term "employee" includes 69 Term "Families" Includes 69 Where interchange of passes authorized 68 Widows, when entitled to 69 FREIGHT. Handling (see TRANSPORTATION). FULTON, ROBERT. Invantor of steamboat 6 368 AMERICAN COMMERCE ASSOCIATION Page GIBBONS vs. OGDEN. Giving constructive scope to the plenary powers of Congress for regulating interstate commerce 7, 8 GLOUCESTER FERRY CASE 94 GOVERNMENT. Dual system in the United States, relative powers of federal, and state 7 "GRANGER CASES," THE. Action by grain-producing states of the west to control rail- roads 16 GROUNDS (see TRANSPORTATION). HAWAII. Common carriers in, subject to Act to Regulate Commerce.... 120 HEPBURN ACT. Amendment to Act to Regulate Commerce June 29, 1906, provid- ing more adequate provisions for the enforcement of rights and duties declared to exist 34 Certain reports and forms of accounts required 36 General provisions of 35 Included commodities clause 35 Limitation of two years provided in which order of I. C. C. shall be in force 35 Meaning of term "transportation" defined by 36 Power vested in I. C. C. to determine just "and reasonable rates for future 35 Took effect, under general resolution, August 28, 1906 27 HISTORICAL. Commercial History of Nation 4 First epoch 4 Second epoch 5 Third epoch of nation's commercial and transportation develop- ment 10 Fourth epoch of nation's commercial progress lead to afRrma- tive exerci.=:e of federal authority 10 Fifth epoch of nation's commercial and transportation progress. 15 Premises of exercises of federal control of interstate commerce. 3 HOLDING COMPANY (see DISCRIMINATION, TERMINAL AND BELT RAILROADS). ICING (see TRANSPORTATION). IMMORAL PERSONS. Restricted inclusion of, in commerce 21 IMPORT (see EXPORT, PORT OF ENTRY, RATES). Foreign, I. C. C.'s jurisdiction covers only that part of through or export rates applicable to inland haul 147 Interstate Commerce Commission may deal with import and export rate situation only as though ports of entry and trans-shipment were destinations instead of gateways 121 Local significance of, in early commerce between the states.... IMPORT RATE CASE 172 IMPRISONMENT. Punishment bv. restored bv Hepburn Act 35 IMPROVEMENTS (see BETTERMENTS). INDUSTRIAL RAILROADS (see TAP LINES, RAILROADS). Industrial railroads 133 Industrial Railways Case rested largely upon the principle of placing the cost of service where it properly belongs 136 INDUSTRY. Prodigious systems of, and trade 4 What is transportation and what is industry, I. C. C. sought to distinguish in Industrial Railway Cases 139 When comes common carrier under Supreme Court test then industry jurisdiction of Act only takes effect 140 IN FUTURO. Power in Commission to fix rates 217 INLAND WATER CARRIERS (see WATER CARRIERS). Subject to the Act to Regulate Commerce 60, 100 INSTRUMENTALITIES OF TRANSPORTATION (see TRANSPORTA- TION). INSULAR CASES. INTERSTATE COMMERCE LAW 369 Page Status of Alaska as established by the Supreme Court in, fol- lowed by I. C. C. in refusal to accept jurisdiction of common carriers in Alaska 115 INTENT (see SHIPPER'S INTENT). INTERCHANGE (see CARS; FACILITIES). INTERCOURSE. Commercial, canals as highways 5 Discrimination a burden and interference with unrestricted commercial intercourse 15 Medium of commercial, development of 4 Supremacy of federal powers over agencies of commercial 9 INTERSTATE. Separation of state and interstate traffic 246, 252 State traffic should not bear the burdens of interstate traffic. . . . 246 INTERSTATE COMMERCE (see COMMERCE; WATER CARRIERS). Interstate Commerce Law 3 Part of transportation performed from port-to-port by water carrier is interstate commerce 163 "Whenever article is started in transit destined to a place with- out a state it becomes the subject of interstate commerce. . 157 When in what constitutes 155, 160 Commodities once impressed with character of, various muta- tions of transportation and handling merely incidental to movement 160 INTERSTATE COMMERCE COMMISSION (see INVESTIGATION). A select jury to pass upon reasonableness of transportation rates and practices 217 An administrative body created to enforce the provisions of the Act 32 Aim of, to effect a national system of public highways , 78 Attacked upon question of power vested in 32 Charged with the duty of administering the provisions of the Act to Regulate Commerce 53 Co-efficient power to determine, fix and require observance of reasonable rates as maximum 216 Creation of 52 Given power, under provisions of Panama Caaal Act, to deter- mine questions of fact as to competition or possibility of competition 40 Has no authority to establish general rate schedules 48, 213 Has original jurisdiction in determining reasonataletiess of rates. 214 Jurisdiction of, not affected by nature of organization of carrier. 143 Magnitude of its activities in administrative regulation of rates is tremendous 313 May extend time during which service other than through the Panama Canal, by water may be operated beyond July 1, 1914 40 On uniform classification 307 Originally consisting of five commissioners 52 Powers of, not contravened by Shipping Act 260 Power to prescribe maximum rates 207 Principal office of, at Washington, D. C, but may hold sessions in any part of the U. S 53 Salaries of commissioners originally fixed at $7,500 per annum, but increased by Hepburn Amendment to $10,000 per year. . 53 Substantial enlargement of powers by the Hepburn Act 35 Termed by Supreme Court an "economic court" 217 Review of Commission's orders not a procedure equally open to carrier and shipper 217 Revisory tribunal should hesitate to disturb results of delibera- tions of classification committees 291 INTERSTATE ELECTRIC RAILROAD. Subject to Act to Regulate Commerce , . . 60 INTERSTATE RAILROADS (see RAILROADS). INTERSTATE STEAM RAILROADS (see RAILROADS). Subject to Act to Regulate Commerce 60 INTERSTATE STREET RAILWAYS (see RAILROADS). Subject to Act to Regulate Commerce 60 INTRATERRITORIAL COMMON CARRIERS (see ALASKA. COM- MON CARRIERS, HAWAII, PHILIPPINE ISLANDS, PORTO RICO, PANAMA CANAL ZONE and TRANSPORTATION). 1. C. C. jurisdiction of, purely statutory 114 370 AMERICAN COMMERCE ASSOCIATION Page Since all territories in U. S. have been admitted to statehood intraterritorial jurisdiction has automatically ceased 115 INVESTIGATIONS. Commission, under provisions of Sec. 15, has conducted ex- tensive investigations of reasonableness of express and freight rates 210 Power of Commission to investigate reasonableness of rates is exclusive and unreviewable by the courts 210 JUDICIAL CONSTRUCTION (see ACT TO REGULATE COMMERCE). JURISDICTION (see CARRIERS' INTERSTATE COMMERCE COM- MISSION AND INVESTIGATION). Contract of shipment as determinative of 156 Movement in transportation, conclusive of 144 Of Act to Regulate Commerce affected by temporary stoppage- in-transit 160 Of Commission not affected by nature of organization of carrier. 143 Of Act to Regulate Commerce held by courts prior to 1906, not to lie as to state railroad "unless by common ownership or control, or by some agreement, it became part of a line which handled interstate traffic" 52 Of Act to Regulate Commerce over transportation services 173 Of through routes and joint rates 185 "JUST AND REASONABLE" (see REASONABLENESS OF RATES). Application of good judgment, fairness, common sense and a sense of justice to a given condition of facts 224 Are not fixed, unalterable, mathematical terms 224 Common law construction placed upon terms "just" and "reason- able" 216 Imply exercise of judgment 224 KANOTEX CASE (see RATES). LAKE LINES (see WATER CARRIERS). "LAKE LINES DIVORCE" (see WATER CARRIERS). LAKE AND RAIL CASES 183 LATERAL BRANCH LINES OF RAILROAD (see RAILROADS). "LAWFUL." Distinguishment between terms "legal" and "lawful" as applied to rates 317 LEASE (see FACILITIES). "LEGAL." Distinguishment between terms "legal" and "lawful" as applied to rates 317 LEGISLATIVE. Approval of special railroad charters and their enactment into local laws 6 Power of state legislatures to grant extensive corporate powers to land carriers curbed 11 Special charters with extraordinary privileges granted by states to builders of railroads 6 LESSEE (see COMMON CARRIER). Of common carrier, subject to Act to Regulate Commerce 125 LIABILITY (see LIMITATION OF LIABILITY). Initial carrier liable for difference in classification rating raised at destination account character of container in absence of misrepresentation by shipper 305 Of goods to damage, element in rate-making 291, 294, 295, 296 To damage, security of package, as element in classification.... 305 LIGHTERS AND LIGHTERAGE COMPANIES (see COMMON CAR- RIERS). As common carries subject to Act to Regulate Commerce 60 Lighter carrier, independently operated but engaged in interstate transportation is subject to the Act to Regulate Commerce. . 120 LIMITATION (see THROUGH ROUTES AND JOINT RATES). Effect of limitation on power to establish through rates con- sidered by the Commission 187 Limitation on Commission's power to establish through route may not be used to create unjust discrimination 187 Of rights of carriers not equivalent to power to confiscate 171 Of two years wherein order of I. C. C. shall be in force 35 INTERSTATE COMMERCE LAW 371 Page LIMITATION OF LIABILITY. Cummins Amendment of March 4, 1915, to Act to Regulate Com- merce prohibits 43 Cummins Amendment of March 4, 1915, qualified by Cummins Amendment of August 29, 1916 43 LIQUORS. Spirituous, restricted inclusion of in commerce 21 LIVE STOCK (see CARS). Carrier may not assess additional charges for receiving or delivering live stock through yards provided for that pur- pose 177 Carrier required to furnish pens, chutes, yards, live stock cars, and watering and feeding facilities 176 If carrier fails to provide necessary facilities may be required to deliver through those furnished by consignee 177 Special facilities for, carrier required to furnish 176 LOSS. Liability of initial carrier for, or damage to through shipment.. 36 "LOGGING ROAD" (see TAP LINES). LONG-AND-SHORT-HAUL (see SECTION 4). Act to Regulate Commerce prohibits greater compensation for a shorter than for a longer distance 47 Prohibition of Section 4 applies to through routes 180 Supreme Court of U. S. held that competition inherently prevents shippers from being situated under substantially similar circumstances and conditions 51 MACHINES. Steam as motive power for S "MAIN LINES" (see TAP LINES). MALFEASANCE. Practices of shippers many times the direct cau.=;e of carrier's. ... IB MANAGEMENT, COMMON CONTROL OF (see COMMON ARRANGE- MENT). MANN-ELKINS LAW. Amendment to Act to Regulate Commerce, June 18, 1910, en- larging substantive provisions of the Act 38 MARKETS (see COMPETITION). Creation of vast, within the country and abroad 6 MARSHALL, CHIEF JUSTICE. Comprehensive construction of the term "commerce" 9 State statute in contravention of power vested in general gov- ernment by commerce clause of the national constitution. ... 9 Interpretation of federal constitution 7 MAXIMUM RATE CASE 249 METROPOLITAN PAVING BRICK COMPANY CASE 302 MILITARY (see PORTO RICO). MINIMUM. Physical, see CLASSIFICATION. Commercial, see CLASSIFICATION. Carload weight, carriers should consider both physical and com- mercial minimum 304, 305 MINIMUM RATE (see REASONABLENESS OF RATES). "Minimum Rate Bogie" 255 Only in infinitely small number of cases that minimum rate may represent reasonable rate 255 MINNESOTA RATE CASE 169, 248, 251, 331, 333, 336 MONOPOLY. When a predominant evil in commercial history of U. S 11 Where grant of rights and privileges to body corporate amounts to 10 MOODY, ATTORNEY-GENERAL. Opinion on preference created by legislatively determined rea- MUNICIPAL BELT RAiLROADS (see' RAiLROADS)'. MUNICIPAL CORPORATION (see DISTRICT OF COLUMBIA). MUNICIPAL FERRIES. When subject to the Act to Regulate Commerce 97 NEW YORK-JERSEY CITY FERRIES. Ordinance fixing rates on railroad passenger ferry rendered invalid by Section 1 of the Act to Regulate Commerce 97 Subject to the Jurisdiction of Act to Regulate Commerce 94 372 AMERICAN COMMERCE ASSOCIATION FSfCfd NEWCASTLE SWITCHING CASE 142 NORFOLK AND WESTERN CASE. Advancing rates because unreasonable per se, question first presented to Commission 235 Determination of reasonableness of rates, per se 232 Freight operating ratios 235 Separation of passenger and freight traffic 232 Theory, two mills for operation and maintenance and one mill for revenue, proof as to 235 Value of property used in service 233 OCEAN CARRIERS (see WATER CARRIERS). OFFICIAL CLASSIFICATION 283. 284 OFFICIAL CLASSIFICATION COMMITTEE 284 OLEOMARGARINE. Restricted inclusion of, in commerce 21 ORDER. Of Interstate Commerce Commission, trustee or receiver has same right to question validity of, as carrier 125 ORIGINAL PACKAGE. Rule of involved in early commerce of the states 21 "OR OTHERWISE" (see PANAMA CANAL ACT). PACIFIC COAST SWITCHING CASE 142 PANAMA CANAL ACT (see COMPETITION, THROUGH ROUTES AND JOINT RATES; and WATER CARRIERS). "Existing specified service by vi^ater" not determined or meas- ured by character of shipments 109 Does not govern Colon although such city is within the geo- graphical limits of the Panama Canal Zone 120 Panama Canal Act has extended the jurisdiction of the Inter- state Commerce Commission over water carriers involved in through routes 87, 100, 101, 179, 185, 193 Since its passage, I. C. C. has investigated conditions and rela- tions of interownership of lake lines and rail lines 102 If rail carrier participates with a ■water carrier in foreign traffic through Panama Canal it may be required to make similar arrangements with any or all other lines of steam- ships operating from said port to the same foreign country 180 Oil company owning common carrier pipe line which does or might compete with its own steamers, within scope of Panama Canal Act 78 Policy of, to bring about discontinuance of railroad ownership and control of water lines 108 Policy of, to preserve to the common interests of the people free and unfettered the "water road bed" via the Panama Canal 103 Words ' or otherwise" must be read in conjunction with "through the Panama Canal" 193 PANAMA CANAL ZONE, common carriers in . 120 PANAMA, REPUBLIC OP. Shipments from U. S. to Colon are exports 120 PARITY OF RATES (see RATES). PASSES (see FREE TRANSPORTATION). PAST RATES. Enforcement of equitable estoppels arising from Justifiable ex- pectation that past rates will be maintained 211 PAUPERS. Restricted inclusion of, in commerce 21 PENALTIES. For violations of anti-pass provisions of Act to Regulate Com- merce 69 Jurisdiction over violations of anti-pass provisions of Act to Regulate Commerce same as provided in Act of February 19,1903 69 Of imprisonment abolished by Elkins Act, but later restored by Hepburn Act 34 PENS (see LIVE STOCK). PERSONS. Afflicted with contagious diseases, restricted inclusion of in commerce 21 Born or naturalized in U. S. or subject to Jurisdiction thereof are citizens of U. S. and of state wherein they reside 23 INTERSTATE COMMERCE LAW 373 Page Natural, as common carriers, recognized by Act to Regulate Commerce 123 PHILIPPINE ISLANDS. Common carriers in, subject to Act to Regulate Commerce 120 PIPE LINES. Common carriers within tlie Jurisdiction of Act to Regulate Com- merce 35, 60, 71 Pipe Lines declared common carriers subject to Act to Regulate Commerce: — Pure Oil Pipe Line Co 73 Prairie Oil and Gas Co 73 National P'ipe Line Oo 73 Producers and Refiners Oil Co., Ltd 73 Standard Oil Co. of New Jersey 73 Pure Oil Co 73 Oklahoma Pipe Line Co 73 Ohio Oil Co 73 Standard Oil Co. of Louisiana 73 Tidewater Pipe Line Co., Ltd 73 United States Pipe Line Co 73 Uncle Sam Oil Co 73 Uncle Sam Oil Co. of Kansas 73 Defined as common carrier; must transport for all persons alike 71, 72 Oil company owning common carrier pipe line which does or might compete with its own steamers, within scope of Panama Canal Act 73 Transfer of common carrier pipe line to private corporation does not effect release of obligations of common carrier 72 Utilization of right of way of railroad does not make pipe line common carrier 72 PLANT FACILITY. As such, not subject to Act to Regulate Commerce 140 Beyond authority to regulate allowances to; present system of interstate regulation does not reach to creation and opera- tion of plant facilities 142 Incorporation of as procedure in creation of common carrier. . . . 141 Determination of status as common carrier looks to the sub- stance of the service and not to its form 140 Divided into two classes(l) incorporated and (2) unincorporated 140 Divisions allowed by trunk lines to, condemned by the I. C. C. . . . 135 Fifth group of industrial railways, held to be 135 I. C. C. in Industrial Railway Cases sought to distinguish be- tween what is facility of transportation and a plant facility or tool of the industry 139 Incorporation of and assumption of appearance of common car- rier not sufflcient to determine status 135 Industrial, attempt of industrial plant systems to procure al- lowances out of locality basis of rates condemned by I. C. C. but in no wise repugnant to holding of Supreme Court in Tap Line cases i •." "j Industrial, turning over rails, locomotives, and cars of industry to incorporated railroad company does not divest these appliances of their character as a plant facility 139 Industrial railroads, when • • • 133 Purpose of procedure In creating incorporated common carrier out of plant facility to procure divisions from trunk Imea. . 141 Right of industry to compensation under Section 15 of Act to Regulate Commerce solely within jurisdiction of Act 142 Section 15, allowances to plant facilities when unlawful 135 Tap lines ;•,•••••.•; r •••.<,••• V/. • •'•* ' Test of status as common carrier determined by right of public to demand service of carrier and not extent of its business. 140 "When it becomes common carrier under Supreme Court of the U. S. test then jurisdiction of Act to Regulate Commerce only takes effect 140 POLICE POWER. a Federal government without ■ • • • » When state police and taxing powers began to operate under original package rule *1 POMERENE BILL (see BILLS OF LADING). POOLING OF FREIGHT . „« .lo Prohibited by Act to Regulate Commerce 32, 48 374 AMERICAN COMMERCE ASSOCIATION Page "PORTS." In language of Constitution before advent of railroads; Intent of restraint judicially recognized 24 PORT OF ENTRY (see COMMERCE). Jurisdiction of Act to Regulate Commerce attaches at port of entry in adjacent foreign country 152 PORT OF TRANS-SHIPMENT (see COMMERCE). Jurisdiction of Act to Regulate Commerce extends to port of trans-shipment in adjacent foreign country 149, 150, 151 PORTO RICO (see EMPLOYERS LIABILITY ACT). Cars as well as locomotives of carriers in Porto Rico must con- form with Safety Appliance Acts 119 Common carriers in, subject to Act to Regulate Commerce 116 Employers Liability Act expressly applies to 119 Held to be an organized territory, pertinent to but not incorpo- rated in the U. S 119 Occupied by military forces of U. S 118 Mode of government in 118 Protocol of August 12, 1898 118 Statutory laws of the U. S., not locally inapplicable, have same force and effect as in U. S 119 Treaty of 1898 119 PRACTICES (see RE(3-ULATIONS). PREFERENCES (see DISCRIMINATION), PREJUDICE (see DISCRIMINATION). PRESUMPTION (see STANDARDS). Of reasonableness of rates 259 Bate advanced for short period with return to former rate raises presumption of unreasonableness of advanced rate 341 PRIVATE CAR COMPANY. As agency of transportation is subject to Act to Regulate Com- merce when engaged in interstate transportation. . .60, 121, 122 Section 1 of Elkins Act brings private car companies within the Jurisdiction of Act to Regulate Commerce 122 Term "transportation" includes 121 PROCTER AND GAMBLE CASE 289, 290, 299 PROPRIETARY COMPANIES (see PLANT FACILITIES). PULLMAN COMPANY (see COMMON CARRIERS). Common carrier subject to Act to Regulate Commerce 126 PURCHASERS (see COMMON CARRIERS). Of interstate common carriers subject to Act to Regulate Com- merce 60, 123 Of property in litigation pendente lite bound by decree or judgment in suit 123 RAIL and WATER TRANSPORTATION (see TRANSPORTATION). RAILROADS (see CHARTER, COMMON CARRIERS, FOREIGN RAIL*. ROADS, INDUSTRIAL RAILWAYS, STATE RAILROADS AND TRANSPORTATION). And water lines 66 Meaning of term in Act to Regulate Commerce 58, €6 No distinction in Act to Regulate Commerce between steam and electric 113 Interstate, subject to Act to Regulate Commerce 112 Application by lateral branch line of railroad for switch con- nections 70 Building up of national system of 14, 78 Development of, in U. S 6, 14 Electric street railway line operating between city of Omaha and Council Bluffs held to be interstate common carrier 114 Electric street railway line operating between Washington, D. C, and Chevy Chase Lake, in Montgomery County, Md., held to be an interstate common carrier 114 Performing service for proprietary company but engaging in in- terstate transportation Is subject to Act to Regulate Com- merce 140 Extent to which railroad participates in interstate transportation sufficient to bring it within the jurisdiction of the Act.... 126 Honesty and integrity of, today at par 276 Industrial 133 Juggling of properties 14 Municipal owned railroad engaged in interstate movement sub- ject to the Act to Regulate Commerce 133 INTERSTATE COMMERCE LAW 375 Page Not required to own all of the instrumentalities for performinB transportation service 1*1 Of different character, defined 194 Railway systems and standardization of facilities 8 Steam as motive power for 6 Term "Railroad" defined 58, 66 Terminal and belt, defined 60, 131 Terminal and belt, character of ownership 131 What term "railroad" includes 113 RATE-MAKING (see COST OF SERVICE). Capitalization, as element of 347 Declaration of value, element in 396 Desirability of traffic, element in 291 Elements of, — value, bulk, cost of service, volume, etc 290 Impracticability of system of separate rate for each individual article 277 Liability of goods to damage, element in 291, 294 Not an exact science 294 RATES (see ADVANCED RATES; BILLS OP LADING; COMPARI- SON; COMPARATIVE RATES; DIVISIONS; EXPRESS CAR- RIERS; MINIMUM RATE; PAST RATES; REASONABLE- NESS OP RATES; RELATIVE RATES; THROUGH ROUTES AND JOINT RATES and TRANSPORTATION). Back-hauling of shipment not necessary where lowest com- bination is provided for in tariffs 199 Basing points or factors for combination rates must be specified in tariffs 198 Changes in, not affecting traffic in course of through transpor- tation 195 Changes in, when may affect traffic in course of transportation 196 Congress has covered entire field of interstate rates and rate- making superseding state legislation pertaining thereto.... 153 Commission has no authority to establish general schedules of 213 (IJommission may establish through routes and maximum joint rates between rail and water lines and determine terms and conditions under which such through routes may be operated 185 Commodity, generally articles or commodities afforded, are those of coarse and cheap nature and of large consumption 280 Defeating through rates by rebilling shipments at intermediate state point repugnant to rule in Kanotex Case 158, 159 Difference in, not well based unless founded upon a distinction which has transportation significance 292 Effect of Cummins Amendment of 1915, to automatically advance rates 10 per cent 43 Joint, meaning of term, what constitutes 182, 194 Joint, Commission may establish 209 Joint, division of. Commission empowered to prescribe 182 Joint, Avhen duly established and in force, becomes lawful rate 195 "Legal" and "lawful," distinguishment in terms as applied to.. 317 Limitations prescribed by I. C. C. within which joint rate ar- rangements may be made between trunk lines and industrial railways 136 Maximum, demand of carrier for 211 Relative, license of comparison 321 Right of carrier to initiate own 48, 320 Short-haul, recognition given to two line hauls involved from points on tap lines 134 Through, combination of joint rate to common points and local rate beyond 197 Through, when publication of element of through route 181 When advance in carload minimum weight is not advance in rate 342 No joint through rate in effect, combination of intermediate rates constitutes through rate 191 RATIOS. Freight (see NORFOLK AND WESTERN CASE). REASONABLENESS OP RATES (see BURDEN OF PROOF; CLASSI- FICATION, COST OP SERVICE; INVESTIGATION: REGULA- TIONS. RELATIONSHIP and TRANSPORTATION CONDI- TIONS). Charges must be just and reasonable 67 Standard of classification for convenience or uniformity causing unreasonableness of rates 297 376 AMERICAN COMMERCE ASSOCIATION Page Difference in rates not well based unless founded upon a dis- tinction which has transportation significance 292 When product of combination among- carriers 348 Comparison of rates on different lines 325 Comparison of rates on branches of same line ' " ' 326 Comparison of divisions of joint rates " .' .' 326 Comparison with water-compelled rates ' ' 328 Comparison with rates fixed by state authority. 329 "Legal" and "lawful" distinguishment between terms as applied to rates 317 Rate advanced for short period with return to former rate raises presumption of unreasonableness of advanced rate. . 341 Advanced rate justified when effect is to equalize nearby rates 342 VVhen advance in carload minimum weight is not advance in rate 342 If reasonableness of rate is attacked under both Sees. 1 and 3 of the Act to Regulate Commerce, there must be sufficiency of facts to prove violation of Sec. 1 as well as violation of Sec. 3 207 Carriers required by Act to Regulate Commerce to establish, observe and enforce just and reasonable classifications of property 263 Jurisdiction of Commission over classification 265 Commission prior to 1910, did not in statutory terms have power to establish just and reasonable classifications 266 Western Advance Rate Case, 1911 224 Difficult problem to determine g..: 204 Possible only of relative determination ". . 204 Commission has never achieved more than approximations of reasonableness 204 Requirement that carrier's charge shall be just and reasonable is a right in the public springing from the common law, statutorily extended into concurrent conformity with the aggregate purpose of Act to Regulate Commerce 203 Charge for any service incident to transportation must be just and reasonable 204 Carriers entitled to additional compensation for actual expense incurred in stopping goods in transit 204 Per se 206, 221 and 229 Facts which affirmatively show the existence of an unlawful dis- crimination or prejudice may in nowise reach to the ques- tion of the reasonableness of the rate per se 206 All charges for any service rendered or to be rendered in the transportation of persons or property must be just and reasonable 203, 212, 213, 215 At common law and under the provisions of the Act carriers' rates and charges must be just and reasonable 203, 215 Inter-relationship of Sees. 1, 3, 4 and 15 of Act to Regulate Commerce 206 Commission may give weight to all factors bearing either on the cost or value of the service, may not disregard demand of shipper for protection from legitimate competition, and equitable estoppels arising from justifiable expectation that past rates will be maintained and demand of carrier for maximum rate under which traffic will move 211 After full hearing the Commission may establish maximum just and reasonable rates and remove discrimination 207 Facts determining rate to be unreasonable per se may also show rate to be unduly prejudicial 206 Unreasonableness of rates under Sec. 1 of the Act not estab- lished solely by proof of violation of Sec. 3 207 While carriers entitled to fair return on investment they are not justified in charging exorbitant rates in order to pay operating expenses if conditions of country do not permit.. 248 To be Just and reasonable, within the meaning of the constitu- tional guarantee, Commission must prescribe with regard to certain factors 211 Requirement that rates shall be just and reasonable does not mean that all rates shall be exactly equal 213 Reasonable rate for one carrier may be entirely unreasonable for another 213 Interstate rates in this country have not been established upon any consistent theory 218 INTERSTATE COMMERCE LAW 377 Page Rates established by carriers voluntarily differ in different sec- tions and at different times 214 Wide difference in rates established by different commissions after mature consideration 214 No absolute test of reasonable rate and government has sup- plied none 212, 214 Advancing rates because unreasonable per se first dealt with by Commission in Norfolk & Western Case 235 Determining cost of transportation in developmental stage 240 Valuation of railroads, most important step in measuring rea- sonableness of rates 240 Rate-making has not been parallel with studies in transporta- tion costs • • 240 Interstate Commerce Commission, upon principles of comity has always accorded due respect to rates established by state commissions 247 Intertate Commerce Commission not bound to accept state-made rates as measure of reasonableness of interstate rates 247 No standard by which cost of service or reasonableness of rates can be fixed with certainty 214 Commission has no authority to establish general rate schedules 213 Rate attacked must be so out of proportion as to be unreasonable or must so discriminate as to be undue or must be unlawful for some other special reason 213 Mandate of Act to Regulate Commerce is that rates must be just and -^^fesonable 215 Most satisfactory test of reasonableness of rates is to compare rates of one carrier with those of others in same territory under same general conditions 214 Commission has original jurisdiction over 214, 216 Statutory requirement as to uniformity and equality of rates.. 217 Railway revenue — two-thirds goes for operating expenses and one-third for return on plant 235 Conflicts about rates arise from conflicting interests of carriers and shippers 212 When controversy arises between public and carrier question of reasonableness involves many considerations and often difficult to determine 212 Must be determined by the relation of the rate both to the car- rier and to the shipper and by a comparison with rates nor- mally charged for like or similar service 212 Elements of, — value, bulk, cost of service, volume, etc 290 Minnesota Rate Legislation 331, 333, 336 Shreveport Case 256, 332 Per se, of interstate rates should be determined independently of state rate 334 Comparison with rates established by I. C. C, latter rates to be regarded in same light as rates made by carriers without order of Commission 337 Comparison, standards of, by Commission, illustrated 337-340 Adjudicated rates — maintaining rate reduced after complaint is filed 340 Carrier may withdraw rate condemned by Commission in an- other case 341 Agreement as to rates, validity and effect of between shipper and carrier 342 Bill of lading, shipments tendered under other than conditions of, subject to higher rates 344 The "Minimum Rate Bogie" 255 Combination among carriers, when rate product of 348 Theoretically "minimum rate" is correct economic measure of reasonableness of rates 256 Minimum rate test is but subterfuge for the construction of rates embodying cost of service principle with a misnomer to disguise its viciousness 255 Only in infinitely small number of cases that minimum rate may represent a reasonable rate 255 Proportionment of rates resulting from establishment of min- imum rates could be manipulated with vicious and Irregular effect 255 Presumption of reasonableness 259 Existence of rate presumes reasonableness, but is not presump- tion that new or higher rate would be unreasonable 269 378 AMERICAN COMMERCE ASSOCIATION Page Classification material factor to be considered but not only one. 306 Classifications, regulations and practices, must be just and reasonable 67 Rates may not vary between each station according to the grades or other physical incidents of transportation 306 Administrative regulation by I. C. C. embodies application of major principles of Act to Regulate Commerce 313 Administrative regulation by I. C. C. has been attended with economic and legal difficulties 313 Administrative regulation by I. C. C. adheres to no strict rules of precedent 314 Joint rates to adjacent foreign countries must be reasonable.. 314 Right of carrier to initiate own rates 320 Relative rates — license of comparison 321 Reduction of rates when formal complaint against it is pending. 341 Public interest should be considered in determining reasonable- ness of a rate 249 Expenditures for additions to construction and equipment, as well as for original construction and equipment, should be reimbursed by all traffic thev accommodate 249 Improvements that will last for many vears should not be charged against revenue for single vear 250 Cost of service and value of service fundamental elements of reasonableness 250 Commission's powers enlarged by amendment of 1906. .......... 217 Commission has power to suspend rates for definite period 217 Power in Commission to fix rates for future 217 Broadest consideration of economic and financial effect of Com- mission s orders must be considered 217 Shipper may not complain in court against unreasonableness of rate 218 What constitutes 221 Theory that all rates are unreasonable which yield a greater return than cost of service 222 Classification based on cost plus insurance risk 222 "What the traffic will bear," meaning of phrase 222 Commission may determine reasonableness of difference in rates on different kinds of commodities 223 Commission may not fix an entire schedule of rates which will only yield a fair return on the value of property used in the service 223 Foreign countries, adjacent, joint rate to must be reasonable. . 314 No flexible limit of judgment if all rates must be on a level of cost 223 A reasonable rate is one which respects alike the desserts of the carrier and the character of the traffic 223 Terms "just" and "reasonable" are not fixed, unalterable, mathe- matical terms 224 Terms "just" and "reasonable" imply exercise of judgment 224 Advance in rates — Western Case, 1911 224 Determination of proximate cost per unit of transportation is difficult 229 Carriers rarely advance question of reasonableness of rates per se in justification of advance in rates 231 Determination of reasonableness of rates per se in the Norfolk & "VSTestern R. R. Case 232 Separation of passenger and freight traffic 232 Value of property used in service 233 Application of good judgment and fairness or common sense and a sense of justice to a given condition of facts 224 Per se, the Wisconsin Formula 299 Separation of cost of handling traffic at terminal and cost of moving it between terminals 230 Separation of expenses between different branches of traffic... 229 Separation of expenses on the basis on which the traffic is han- dled 229 Value of the products as an element second only in importance to the cost 231 Sepa^ration of state and interstate traffic 246, 252 Capitalization as element of reasonableness 252, 346 Cost of reproduction not always fair measure of reasonableness 252 New rate, if reasonable, carriers may not desist from its enforce- ment because former rate had long been in use 264 INTERSTATE COMMERCE LAW 379 Page Where question of discrimination is paramount to that of rea- sonableness 255 Reasonableness of California lemon rates 255 Tendency of Commission is to develop basis for determination of reasonableness of rates per se 240 "Allocated expense," what constitutes 241 Relative reasonableness of rates 241 Difficulties of determining' reasonableness of rates per me not present in determining relative reasonableness 241 Essence of relative reasonableness of rate is comparison with rate of known reasonableness 241 Term "known reasonableness" is perhaps ill-advisably used 242 Relative unreasonableness of rates may arise from any one of a number of causes 242 Commission invariably measures reasonableness of rates rela- tively 242 Specific rate can seldom stand except for other rates 243 Interdependence of rates, consideration must be given to 243 Commission encounters equitable restraint in fixing reasonable rates 243 Courts on reasonableness of rates 244 Value of property used for convenience of public, basis of all cal- culation as to reasonableness of rates 245 Interblending of state and interstate rates 257 Cost of service and value of service fundamental elements of reasonableness 246 State and interstate traffic, neither must bear the burdens of the other 246 "Where state statute has retained requirement of common law that rates shall be reasonable judicial presumption is that standard of reasonableness has been created as of the rates established by publication and submission to the state com- mission-ers and their approval of them for filing 247 REBATES AND REBATING. Section 1 of Elkins Act makes solicitation, acceptance or receipt of unjust discrimination unlawful 122 Section 1 of Elkins Act brings private car companies within jurisdiction of Act to Regulate Commerce 122 Unlawful for any person, persons, or corporation, to offer, grant, or give rebates, concessions or unjust discrimination. . 122 RECEIPT (see TRANSPORTATION). Whether receipt and delivery of goods within switching limits of a city is additional service or included in line-haul rate.. 142 RECEIVERS (see COMMON CARRIERS and TRUSTEES AND RE- CEIVERS). „„ _„ Of common carriers, subject to Act to Regulate Commerce. .60, 123 REFRIGERATION (see TRANSPORTATION). REGULATION (see THROUGH ROUTES AND JOINT RATES). Classifications, regulations and practices must be reasonable. ... 67 Fair, respecting transportation to be followed in the future, power vested in the I. C. C. by Hepburn Act to determine. . 35 Of vessels in domestic commerce 260 Terms of franchises, charters, local regulations and private con- tracts must give way to the requirements of the Act to Regulate Commerce 153 RELATIONSHIP. Of carrier and shipper an element m determining reasonable- ness of rates 212 RELATIVE RATES (see REASONABLENESS OP RATES). REMEDIES. , ^ ^ „ Nothing contained in Sec. 22 of Act to Regulate Commerce shall abridge or alter existing remedies at common law or by statute , 218 Sec. 22 of the Act to Regulate Commerce does not continue in shipper any common law rights repugnant to Act 218 Shipper may not maintain action in court except for such wrongs as may, consistently with context of Act to Regulate Com- merce, be redressed without previous action by the Com- mission • 218 Under Sec. 9 shipper may not mantain action in court for redress for violations of Act to Regulate Commerce 218 REPORTS. . ^ ^ Certain reports and forms of accounts of carriers required by Hepburn Act 35 AMERICAX COMMERCE ASSOCIATIOX •LuTi L.TiE .»i*M»»«M< iiTj^ (riT rrtEWfir»tn --..■.___.,-.... ' jmmatmiiHHiftllrp ___»» «_____________. i nmiiixi BFHffiffff iSims. tnvtiMflk&nte off naajQrand n^^tsasse sbks At • TT:i-^ BnipQyttt^ ■^•Tii— j; ^'i' TTs-xoapw osef (oasBttiiHBs «£ Sewt SIX •MittB'H" . Litniia- 2M flB aamaQs' ^m tsamroEBaB fftetttB guHiritfteR, mxtt ajje ■ ^ _ - HUtii — — T ' "" - • maa^ nun mssaxstijai stniSam &e aaoirtt ffinr mtiiltimtB ffistr 'v^aD»- -jiiij* (Eff /iftmr tBB IBsgaitea* 'raiicrmsmBR, ■wfinflHmtt jt i tMj n r Mi w; Bay ( n«mnii>Bmmi ^ aufitfU «BiiH wfta tae tftwuiiwtH off j^ffitt tts S^gadtatls am." mh)i%j i3i. "" 2U 198 3wr INTERSTATE COMMERCE LAW 381 SBCnOX 15 r aDasasees to ilii|iii[ ii s. Pietcats Older eaAcacia^ xaAetaatsany less Aaa ■"■='-»^g- at earnafm liae. Provides, after tmBt heariae. that C3CHO L?^. 257 jai->- ^ with S. «B. Cft. US MS. 2>4 T T to EBSs^rszaxe ; rAXTAKDS. Of roBipwr: Where rec able t as of .„. — to the state c SBas^ 5. 11» SST-SM MT 382 AMERICAN COMMERCE ASSOCIATION STATE (see COMPLAINT; RAILROADS; STANDARDS). Admission of territory to statehood removes jurisdiction of Act to Regulate Commerce 115, 126, 171 Action of Congress renders state regulations void when in con- flict 27 Act to Regulate Commerce does not apply to transportation wholly within one 66 Cannot create body politic more powerful than itself 10 Carrier, forming part of through line of railroad transporting interstate commerce, although service performed wholly within one state, is engaged in interstate commerce and sub- ject to Act to Regulate Commerce 81, 126, 128, 156 Carrier, where carriage is performed independently and wholly within the same state, not subject to Act to Regulate Com- merce 169 Carrier whose line lies wholly within one state and whose rela- tion to or interest in or liability for the carriage of inter- state commerce does not extend beyond the line of the state not subject to Act to Regulate Commerce 168, 169 Character of transportation since 1906 determines when state railroad becomes subject to Act to Regulate Commerce.... 126, 127, 129 Comity between, and I. C. C, respecting rates fixed by state authority 329, 331, 332, 333, 334, 335 Commission will not w'ithhold action in interstate situation be- cause opposing or retaliatory action is anticipated on the part of state 330 Congress has covered entire field of interstate rates and rate- making superseding state legislation pertaining thereto.... 153 Defeating through rates by rebilling shipments at intermediate state point repugnant to rule in Kanotex Case 158 Effect of admission into the Union 171 Every person and every corporation, being within ttie territorial limits of a state are, while there, subject to the constitu- tional authority of the state government 170 Federal power, supremacy of, in case of conflict with 9, 153 Interblending of state and interstate rates 257 Interstate traffic should not bear burdens of state traffic.,..;. 246 Intrastate movement of shipment must at all times be within exclusive jurisdiction of the state , 30 May make all needful regulations of a police character for gov- ernment of carriers within the state 170 May not do that which amounts to taking property for public use without just compensation or without due process of law 23, 171 May regulate interstate commerce until Congress acts 16 No further weight given rates fixed by state authority than to rates voluntarily established by carriers -. . . 330 Police and taxing powers, when operating under original pack- age rule 21 Power to regulate intrastate transportation and exercised In such manner as not to invade carrier's rights under the fourteenth amendment upheld in the Minnesota Rate Case 169, 170 Power to regulate is not power to destroy, limitation Is not equivalent to confiscation 171 Railroads engaged in interstate transportation 126 Railroad transporting express matter for express company sub- ject to Act to Regulate Commerce becomes subject thereto. . 128 Rates, Shreveport Case 256, 332 Reasonableness of rates, "Wisconsin formula 229 Regulating powers, as affected by "federal sovereignty in inter- state commerce" , 25 Regulation by, urged 3 Right to regulate state carriers affirmed by Supreme Court of U. S. in Granger Cases 16 Rules respecting state carriers prior to 1906 127 Separation of state and interstate traffic 246, 252 Shall not make nor enforce law abridging privileges or immuni- ties of citizens of the U. S 28 INTERSTATE COMMERCE LAW 383 Shipper's intention to have shipment, originally intrastate, for- warded to ultimate destination outside of the state in the absence of a joint rate from point of origin to ultimate des- tination, held not to make shipment interstate up to the original terminal point Status of states and territories under the Commerce Clause of the U. S 171 Statute, when Act to Regulate Commerce abrogates 153 Stoppage in transit, effect of 160 Transportation wholly within not subject to the Act 167, 168 Where lower intrastate rates over which carrier has no control do not amount to unlawful discrimination 330 Where lower state rates create discrimination against inter- state rates 256, 257 When subjects of commerce are not national in nature, state may regulate during Inaction of Congress 27 Without power to interfere with or regulate interstate com- merce since right of interstate commerce is so essentially national in character that inaction of federal government is equivalent to determination that the commerce should be free 31 statehood' (see' STATE). STATE RAILROADS (see RAILROADS). Subject to the Act to Regulate Commerce, when 60 STATUTES. U. S. Revised Sec. 5258 12 STEAM. Invention of steam locomotives 6 STEAMSHIP COMPANY. Owning no vessel not a carrier 88 STEPHENSON, GEO. Inventor of steam locomotives 6 STOCK YARDS. At point where a carrier transports and unloads live stock deemed to be carrier's live stock depot at that point 177 Carrier may not own or exercise control over independent stock yards 177 Necessary for handling live stock in transportation, carrier re- quired to furnish 176 Where carrier provides special, as live stock depot at particular city carrier may not be compelled to make delivery at some other yard or point in that city 177 STOPPAGE IN TRANSIT. Article remains in interstate commerce as long as subject to transit tariff 160 Carriers entitled to additional compensation for actual expense incurred in stopping goods in transit 204 When affects jurisdiction of Act to Regulate Commerce 160 STOCKS AND SECURITIES. Freezing out of original and small investors in railroad organi- zations 14 Railroad, watering of 14 STORAGE (see TRANSPORTATION). STOWE-PULLER CASE 301, 392 STREET RAILWAY (see RAILROADS). Electric, when subject to Act to Regulate Commerce 114 Subject to jurisdiction of District of Columbia Public Utilities Law 130 SUCCESSORS (see COMMON CARRIERS). To common carriers subject to the Act to Regulate Commerce.. 60 SUSPENSION OP RATES (see TARIFFS). SWITCHES AND SWITCH CONNECTION (see TRANSPORTATION). Connections between railways required by Act to Regulate Com- merce 85 Duty of carrier to construct 70 May be ordered by I. C. C "lO SWITCHING. Incidental service of transportation 166 TAP LINES (see INDUSTRIAL RAILWAYS). Industrial railroads 133 Defined 13g 384 AMERIOVX COMMERCE ASSOCIATION L C C has applied rule of Supreme Oomt in Tap Line cases upon firs in eacb indiTidual case 13$ Iz i - 5 . r iL attempt of industrial plant systems to procure allow- 1 T r -t of locality basis of rates condemned by tbe I. C CL : - o wise repuenaat to holding of the Supreme Court - -, : —ir^'? cases. 14^ Ir.-.: Ti - vg-inal investieation declared by' LCic. "to be - - ; . i'S aad not common carriers 138 - -^ - -^ . -^^ned 138 ■ -...^ 138 vunber companies 138 5 : - lumber companies by. not a service of 13» il T rs before I. C C 137 ---■ - "7":' = r. right of public to demand . ; - business 13$ -.1775 fr 7?^? V - 7 777- . OT!- JOIXT RATES). ^ i : : . - : . ; : i _■.:.-. i t 1 - ; ■ : 1 nsportation over different - - = : ■ ". r T :; ; - - : - its O'wn lawfully pub- - 1 : ::- nt tariffs in ^vhidhi it _ 1 - 198 -::;£:;. tti :; -7 _ iual or joint rate. '-'-'- '-■ T - - - lotion or practice ^ - - 20s -'-'= - ^ schedules of _ - 213 L-= - - C. C 91 27* . :z.- - ; :: j.-. ^_;i.r:. : :;:v.^r- ; ; _ntry 152 ~ : : - practice of carriers 5cn 2»7 - : " ^ fore it may partic- 87 i oi oonnectine roads a 191 - -~-r rdependent 279 3 2SS T " 5 r-i time beyond al Act, "rates. - - required to be ■ ■ — ..-....— — -^T. »««»»««, ,,,,„a«,, Z9 ■ .r7 .i ; 7- ; r :: : : ^ :. ::her in tic c:.g.:.il : - -: :e 22 : - V . e under the orig- 21 J 7 .- TJ. s. when ulti- ihin one state not subject to Act to :a not subject to Act to Regulate 149 1«7 148 fierce 67. St. €5. 73 r«? within U. S. when ulti- mtry 149 T not subject to Act to 181 - Csee COMMOX ABRAXGE- ... ...rATI03f>. INTERSTATE COMMERCE LAW 385 TERBrrORTES. For jurisdictional purposes should be treated as "stateer as word is used in the **Commerce Clause of the Constitution of the U. S ' 145. 1"1 THROUGH ROUTES AXD JOINT RATES < see COMMON ARRAXGE- 3Ji:XT; COMPETITI'Z'X: ELECTRIC RAIL"«"ATS; FACILI- TIES: SECTION 1 and SECTION 15). Basing^ points or factors for combination rates must be specifled in tariffs 197. 19t By forming through routes and publishing through rates carriers interested held to hare merged lines into one route or line 191 Carriers must keep through routes open and in oi>eration, ftir- nish necessary facilities and make reasonable and proper rules of practice as between themselTes and shippers and as befsreen each other 180 Carrier not authorized to apply to transportation o ver different lines anv rate except that stated in its ottu lawfully pub- lished tariffs or lawfully published joint tariffs in which it has concurred !•• Carrier required to establish through routes but provisions of Sec. 1 must be read in conjunction with latter i>art of Sec- 3 and Sea 15 and the duiy thus imjwsed determined with rega.rd to the intendment of the Act as a ■whole 181 Carriers required to unite in national railroad system 192 Carriers subject to Act to Regulate Conunerce required to pro- T-ide reasonable facilities for 1T4, !"• Carriers subject to Act to Regulate Commerce required to pro- vide for return of cars used in through routes l~f, 178 Car ferries in most instances o'WTied and operated by rail carrier and included in ""all-rail"' routes 98 Circuitous routes, limitation imposed upon Commission's power to establish through routes fixed by amendment of 1916. . 179, 18«. 187 Circuitous routes unnecessarily maintained cause wasteful trans- portation 18S Circuitous routes fundamental rule of Commission that circuit- ous route is beyond the intention of the state ■when it exceeds the short line mileage by 15 per cent or more 188 Commission authorized to prescribe terms and conditions of operation where carriers refuse or neglect to establish through routes and joint rates 17S. Is5. 152. 208 Commission may not establish joint classification or joint rate between street electric railways not engaged in general business of transporting freight and railroads of a differ- ent character 1"9 Commission may not establish any route, classification, rate, fare or charge when transportation is wholly by water. . . . 179 Commission may not prescribe routes embracing, "withotit the consent of the carrier less than substantially the entire length of the railroad party to the route 7S. 187. JIO Interstate Commerce Commission has no power to establish through routes and joint rates for shipments for destina- tions In foreign countries 88 Limitation of Commission's power to establish through routes may not be used to create unjust discrimination 187 Commission may establish through routes and maximum joint rates bet'ween rail and water lines and determine terms and conditions under which such through routes may be oper- ated 1 J5 19* Commission must be first applied to where carriers fail to es- tablish and mantain through routes and joint rates before cotirts may entertain jurisdiction 185 r>€feating through rates by rebilling shipments at intermediate state point repugnant to rule in Kanotex Case lit Establishment of, voluntarily by carriers -. --■ 19» Embraces two or more lines of railroad moving traffic under conventional agreement 1*1 Establishment of by L C. C when liability upon initial earner for damage to or loss of through shipment S5 3W AMEKICAX COIOBEKCE ASSQdATlOX — - — . .-. asr E aSt&BB* 'IW'lllli'PTTr - ass _ » onS 33« -nng OlUI.— ET iim>ur •2^ ■fu. inr tr fiiii-] one !» fft^prri^isfi 3IS IIJKV l"! LiffiT i- ■ r jntTC r. ■re-."' ?"HtIIlE=Bt. ■'U - .JiJl. ^a.11. Jlij" ii h-. ts s^-j . ■Hj^tl Jiiaa^, iffiUixL" xsMBfc T"*"**- Sitr iixyuu^ Sis^ni -ZiflD. : 1*3 iC, ^tnwiiHmi TXT- W5r»-TTffJ*;rny - «s sz&l^aJt l^rrZ^^SlJsJTZ _ 1 jQilZ jr. TaesasssEB mxrasiZ- vr -•-i~ •.su u- irg-iyaginir- '.m »f»y ST. jmyr nUi nB-i i-i-nrmTny jir :sr wrir 3=Ii±ti2S If r3 ML- ■£ r: i.; -.■■,,, 4 33S xt isrr jrr- -1 .3 -as ^ta^si^ist ~jiii ,— "^^^^B^.. .^ SB 'CteftSB 388 AMERICAN COMMERCE ASSOCIATION Page Wholly by water, Commission may not establish any route, classification, rate, fare or charge for 179 TRANSPORTATION COXDITIOXS. Commission's order prescribing reasonableness of rates under powers of section 15 must be based on transportation con- ditions 211 TRANSFER (see TRANSPORTATION). TRUSTEES AND RECEIVERS (see COMMON CARRIERS). Of common carriers, attitude toward Act to Regulate Commerce should be attitude of corporation wbxjse affairs have not been taken possession of by court 124 Of common carriers, contemplated by Act to Regulate Commerce as persons in charge of affairs of carriers without reference to their official relation to court appointing them 123 Trustees of common carriers, subject to the Act to Regulate Commerce 60 If carrier is subject to Act to Regulate Commerce, both the car- rier and its receiver or trustee should be made defendants in complaints 125 If corporation is subject to the Act its receiver or trustee is. . . . 124 Have same right to question validity of I. C. C.'s. order or inter- pose same defense thereto as the carrier 125 Where receiver is subject to Act to Regulate Commerce prior, leave of court appointing him not necessary to entitle ship- per to bring complaint against such receiver 124 "UNDER SUBSTANTIALLY SliOLAR CIRCUMSTANCES AND CON- DITIONS." Incorporated into provisions of long-and-short-haul clause of original Act to Regulate Commerce 32 UNIFORM CLASSIFICATION. Interstate Commerce Commission. Carrier entitled to fair return on value of property used for convenience of public 244, 248 Cost of service and value of service fundamental elements of reasonableness of rates 246, 250 Interstate Commerce Commission authorized by Amendment of March 1, 1913, to value the property of all common carriers subject to Act to Regulate Commerce 41 Of railroads, most important step in measuring reasonableness of rates 240 Of products second only in importance to cost of service as ele- ment of reasonableness of rates 231, 290, 294, 295 Review by Commission 297, 302 VALUE. Declaration of, element in rate and classification-making 296 VALUE OF SERVICE. Factors bearing upon 211 To the public, reasonable regard must be had for in prescribing rates 212 VEHICLES (see TRANSPORTATION). Development of from horse-drawn to steam locomotive 4 VENTILATION (see TRANSPORTATION). VESSELS. In coastwise trade 4 Regulation of in domestic commerce 266 Steam as motive power for 5 VOLUME. Of traffic, element in rate-making 290, 294, 295 WAGON CARRIERS. Not subject to Act to Regulate Commerce 80 WAR. Civil, passing of and immediate eCEects upon industry 5 WASTEFUL TRANSPORTATION. Caused bv unnecessarilv maintained circuitous routes 188 WATER CARRIERS (see BILLS OF LADING; COMMON ARRANGE- MENT; INTERSTATE COMMERCE; PANAMA CANAL ACT; THROUGH ROUTES AND JOINT RATES; TRANSPORTA- TION). INTERSTATE COMMERCE LAW 389 Page Jurisdiction of Act to Regulate Commerce extends to and in- cludes a water line involved in a through route -10, 83, 100, 101, 164, 185. 264, 179 When not subject to Act to Regulate Commerce 93, 121, 173 Car ferry as 93 "Common arrangement" clause applies only to interstate trans- portation partly by railroad and partly by water 159 Continuity of interstate shipments through establishment of through routes and joint rates between rail and water carriers purpose of Panama Canal Act 102 Enlargement of I. C. C.'s. authority over inland water carriers not predicated upon operating control but rather on tariff grounds 102 Even under common arrangement by rail and water carriers, water carrier may not accept through interstate shipment on through bill of lading issued by rail carrier unless water carrier has on iile with the I. C. C. lawful rates applicable thereto g7 Inland, when subject to the Act to Regulate Commerce 100 "In re Jurisdiction of Water Carriers" lOO I. C. C. investigates interownership of lake lines and rail lines . 102 Interstate commerce wholly by water not subject to the Act.. 161 Prior to passage of Panama Canal Act, Interstate Commerce Commission had no jurisdiction of port-to-port traffic of water carriers 87, 117 Not made subject to Elkins Act ". . ... . .' lOO Ocean Carriers 121 Powers of I. C. C. not contravened by Shipping Act. . 260 Rail common carrier subject to Act prohibited from owing or having any interest in carrier by water or anv vessel with which the common carrier by water does or may compete for traffic 40 Regulation of, in interstate commerce merely incidental to regu- lation of transportation by railroad 161 WESTERN CLASSIFICATION 283, 284 WESTERN CLASSIFICATION CASE 267. 280, 281, 303, 306 WESTERN CLASSIFICATION COIVIMITTEE 285 WESTERN RATE ADVANCE CASE. Of 1911, difficulties encountered by Commission in determining reasonableness of rates 204, 224 Of 1915, difficulties encountered by Commission in determining reasonableness of rates 205 "WHAT THE TRAFFIC WILL BEAR." Meaning of phrase 222 And value of service are analogous 222 "WATER ROAD BED" (see PANAMA CANAL). WATER TRANSPORTATION (see WATER CARRIERS). Act to Regulate Commerce applies to combined railroad and water transportation 47 "Commerce on the ocean and other navigable waters" 7 Right of state to exclude federal-licensed boat from coastwise waters 8 Vessels in coastwise trade 4 Wholly by water, not included in Act to Regulate Commerce.. 47 WHITNEY, ELI. Inventor of cotton gin 6 WIDOWS. When entitled to free transportation 69 WISCONSIN. Formula for determining reasonableness of rates per se 230 YARDS (see LIVE STOCK; STOCK YARDS and TRANSPORTATION). I