property moving wholly by railroad from one state to another, it is as much subject to this Act as it would be if it owned and operated a railway connecting points in different states. U. S. v. Illinois Terminal R. Co., (1909) 168 Fed. 546.

-There

Effect of published schedule rate. is no presumption of law that a freight rate upon a particular commodity is reasonably low because such rate has been duly pub. lished and filed by the carrier with the Interstate Commerce Commission. Illinois Cent. R. Co. v. Interstate Commerce Commission, (1907) 206 U. S. 441, 27 S. Ct. 700, 51 U. S. (L. ed.) 1128.

Expenditures for permanent improvements and equipments should not be charged to the current or operating expenses of a single year for the purpose of testing the reasonableness of an increased freight rate. Illinois Cent. R. Co. v. Interstate Commerce Commission, (1907) 206 U. S. 441, 27 S. Ct. 700, 51 U. S. (L. ed.) 1128.

A concerted advance by interstate carriers in the freight rate upon a particular commodity may be held unreasonable and unjust by the Interstate Commerce Commission and by a federal Circuit Court in the subsequent proceedings to enforce the order of the Commission, although such rate may be but a mere division of a through rate. Illinois Cent. R. Co. v. Interstate Commerce Commission, (1907) 206 U. S. 441, 27 S. Ct. 700, 51 U. S. (L. ed.) 1128.

Demurrage. The provisions of this section, requiring rates for the transportation and for the receiving, delivering, storage, or handling" of property by an interstate carrier to be reasonable, and prohibiting discrimination, are sufficiently broad to cover demurrage charges. Michie v. New York, ete., R. Co., (1907) 151 Fed. 694.

Reconsignment charges. The remedies afforded by this Act extend to the regulation of charges imposed by railroad companies for the transportation of consignments from the part of a city to which they were originally delivered to some other part at the consignee's order, and exclude the review of such question by quo warranto in the state courts. State v. Atchison, etc., R. Co., (1903) 176 Mo. 687, 75 S. W. 776.

Effect on state statutes. To the same effect as the original note, see Spratlin v. St. Louis Southwestern R. Co., (1905) 76 Ark. 82, 88 S. W. 836.

The Texas statute (Sayles' Annot. Civ. St. Supp. 1897-1904, Act 4502 c, d, e) providing for penalties against railroads for each day freight is held after payment or tender of freight charges, or holding freight for collection of excess of freight thereon, is in conflict with this Act and as to interstate shipments of freight is void. Trinity, etc., R. Co. v. Geppert, (1911), 135 S. W. 164.

Co. v. Smith, (1910) 123 Tenn. 678, 134 S. W. 866.

Common-law rights. An interstate carrier can exercise all its rights under the common law to the full extent unless made unlawful by the Interstate Commerce Act. McElvain v. St. Louis, etc., R. Co., (Mo. 1910) 131 S. W. 736.

Jurisdiction of court. A court has not the power, in the first instance, to inquire into the reasonableness of a rate regularly estab lished by a carrier and filed with the Interstate Commerce Commission and published, but whether or not a rate is reasonable is, in the first instance, for the commission. Great Northern R. Co. v. Loonan Lumber Co., (1910) 25 S. D. 155, 125 N. W. 645.

Ferry rates. This Act did not strip a state of any power to fix rates of ferriage which it theretofore possessed. New York Cent., etc., R. Co. v. Chosen Freeholders, (1909) 80 N. J. L. 305, 74 Atl. 954.

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66

Shipments made under common arrangement." Under the provision of this Act that "the provisions of this Act shall apply to any common carrier or carriers engaged in the transportation of passengers or property . . . under a common control, management, or arrangement for a continuous carriage or shipment from one state . . . to any other state," as a general rule a common arrangement" is established by proof of a shipment under a through bill of lading and a continuous interstate carriage thereunder, coupled with proof of concerted action among the connecting carriers with regard to the payment of the charges and the receipt and movement of the traffic, even if an agreed division of a single through rate is not shown. Standard Oil Co. v. U. S., (1910) 179 Fed. 614, 103 C. C. A. 172.

Comparison of rates. - A carrier's rates on through business do not prove that a local rate is unreasonable, nor can the local rate throw light on the justice or injustice of discriminations between nonlocal shipments of the same origin and destination. Southern R. Co. v. St. Louis Hay, etc., Co., (C. C. A. 1907) 153 Fed. 729.

A finding that the rates charged by railroads for shipment to a particular point are unreasonable in themselves, and in violation of section 1 of the Interstate Commerce Act, cannot properly be based on evidence which only tends to show that they are too high as compared with the rates charged between the initial points and one or two other points. Interstate Commerce Commission v. Nashville, etc., R. Co., (C. C. A. 1903) 120 Fed. 934.

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Factors to be considered in fixing reasonable rates Cost of service to the carrier. — The cost of service to the carrier would be an ideal theory for rate making; but it is not practical. Such cost can be reached approximately, but not accurately enough to make this factor controlling. It is, however, worthy of consideration and is a very important factor. Interstate Commerce Commission v. Chicago G. W. R. Co., (1905) 141 Fed. 1003, affirmed (1908) 209 U. S. 108, 28 S. Ct. 493, 52 U. S. (L. ed.) 705.

Value of service to shipper. There are a great many factors and circumstances to be considered in fixing rates, and among other things is the value of the service to the shipper, which includes the value of the goods and the profits which the shipper can make by having them transported from one point to another. The evidence and authorities in the cases show that this method of rate making is not only ideal, but practical, when not interfered with by competition; and it is based on an idea similar to taxation. Interstate Commerce Commission r. Chicago G. W. R. Co., (1905) 141 Fed. 1003, affirmed (1908) 209 U. S. 108, 28 S. Ct. 493, 52 U. S. (L. ed.) 705.

Amount of the product or commodity offered for transportation. The fact that there is a large amount of a product or commodity in the hands of a few persons under almost one control, which is offered for shipIment at stated intervals, in fixed and continuous quantities, may be considered in rate making, thus recognizing the principle of selling cheaper at wholesale than at retail. Interstate Commerce Commission r. Chicago G. W. R. Co., (1905) 141 Fed. 1003, affirmed (1908) 209 U. S. 108, 28 S. Ct. 493, 52 U. S. (L. ed.) 705.

Weight, bulk, and convenience of transportation. The weight and bulk of the arti cle to be transported, and the convenience or inconvenience to the carrier in transporting it, may be considered in rate making. Interstate Commerce Commission r. Chicago G. W. R. Co., (1905) 141 Fed. 1003, affirmed (1908)

Vol. III, p. 813, sec. 2.

CONSTRUCTION AND OPERATION IN GENERAL.

Construction of English act followed.-The settled construction of the equality clause of the English Railway Clauses Consolidation Act of 1845, as forbidding the charging of a higher rate for the carriage of goods for an intercepting or forwarding agent than for others, applies in construing the provisions of this section, which were substantially taken from the English statute. Interstate

Commerce Commission r. Delaware, etc., R. Co., (1911) 220 U. S. 235, 31 S. Ct. 392, 55 U. S. (L. ed.) 448.

Not a defense to action for damages for delay. If a contract for the shipment of stock was void as discriminating in favor of the shipper by giving him a rate which was too low, so that the carrier would be entitled to collect the correct rate, it would not prevent the shipper from recovering damages for delay in shipment where he had no actual knowledge that the rate was unlawful. Kirby r. Chicago, etc., R. Co., (1909) 242 Ill. 418, 90 N. E. 252.

Liability of lessor railroad. Where a railroad company owning a part of the through route over which oil was transported under an alleged discriminating rate leased its line to another company, and the lessee, by virtue of the lease or otherwise, was not a partner, agent, or representative of the lessor company during the time the former was operat

209 U. S. 108, 28 S. Ct. 493, 52 U. S. (L. ed.) 705. General public good. The general public good may be considered in rate making. This includes the welfare and advantage of the great body of the citizens of the United States, who constitute the producers, shippers, and consumers; and it also includes the welfare and advantage of the various locali ties and of the common carriers. Interstate Commerce Commission r. Chicago G. W. R. Co., (1905) 141 Fed. 1003, affirmed (1908) 209 U. S. 108, 28 S. Ct. 493, 52 U. S. (L. ed.) 705.

Competition. Competition may be considered in rate making. The authorities, as well as the experts in these cases, recognize that competition may be a controlling factor. Interstate Commerce Commission v. Chicago G. W. R. Co., (1905) 141 Fed. 1003, affirmed (1908) 209 U. S. 108, 28 S. Ct. 493, 52 U. S. (L. ed.) 705.

No one factor controlling. None of the above factors alone are considered as necessarily controlling. Neither are all of them controlling as a matter of law. It is a question of fact, to be decided by the proper tribunal in each case, as to what is controlling. In every case the Supreme Court has held that competition may be controlling. In only one has it, as a matter of fact, been held not to be a defense. Interstate Commercer. Chicago G. W. R. Co., (1905) 141 Fed. 1003, affirmed (1908) 209 U. S. 108, 28 S. Ct. 493, 52 U. S. (L. ed.) 705.

ing such portion of the through route, the lessor was not personally liable for violation of the Interstate Commerce Act by the les see's participation in such discriminating rate during the continuance of the lease. Western New York, etc., R. Co. v. Penn Refining Co., (1905) 137 Fed. 343, 70 C. C. A. 23, affirmed (1908) 208 U. S. 208, 28 S. Ct. 268, 52 U. S. (L. ed.) 456.

"Contemporaneous service." - Under this section services rendered to a complaining and a favored shipper are "contemporaneous as long as the discriminating rates remain in force, and for the purpose of comparison they need not be rendered on the same day, nor during the same week or month. Mitchell Coal, etc., Co. r. Pennsylvania R. Co., (1910) 181 Fed. 403.

Rebates. In Mitchell Coal, etc., Co. r. Pennsylvania R. Co., (1910) 181 Fed. 403, it was held that a shipper was not entitled to recover damages from a railroad company for discrimination in rates because of rebates paid to a shipper from another district; the rate from such district with the rebates deducted being higher than that paid by plaintiff.

Action by person who has received rebates. -In Pennsylvania R. Co. v. International Coal Min. Co., (1909) 173 Fed. 1, 97 C. C. A. 383, it was held that a coal shipper. which, with others, was given rebates by a

railroad company in violation of law, could not maintain an action against the company to recover damages for discrimination because others were granted larger rebates.

Right of United States to party rate for transportation of soldiers. The government of the United States, in buying transportation on a railroad for its soldiers in lots of ten or more, is not entitled to the benefit of a reduced ten-party rate given by the railroad company's schedule to theatrical, operatic, or concert companies, hunting and fishing parties, glee clubs, brass or string bands, boat, baseball, polo, or tennis clubs, football teams, and other parties of like character." Nor does the refusal to give it the same rates constitute an unjust discrimi nation against it, or subject it to undue prejudice or disadvantage, in violation of the Interstate Commerce Act, where it is shown that the purpose and effect of the party rate given by the schedule is to increase the company's business, and that tickets sold thereunder are closely limited in time, and are paid for in cash in advance, while those furnished to the government are not so limited, are furnished on a requisition, and are only paid for after indefinite delay, in the auditing and allowance of the claims by the War and Treasury Departments. In such case the conditions and circumstances under which the service is rendered are essentially different, and justify the making of different rates. U. S. r. Chicago, etc., R. Co., (1905) 127 Fed. 785, 62 C. C. A. 465.

Aggregation of shipments of various owners for carload rates. A carrier may not forbid the aggregation of the shipments of various owners for the purpose of carload rating in official classification territory, or the combi. nation of such shipments by forwarding agents for that purpose, where preferences and discriminations forbidden by this section will result from the carrier's action. Interstate Commerce Commission r. Delaware, etc., R. Co., (1911) 220 U. S. 235, 31 S. Ct. 392, 55 U. S. (L. ed.) 448.

A forwarding agent is a person within the meaning of this section. Interstate Commerce Commission r. Delaware, etc., R. Co., (1911) 220 U. S. 235, 31 S. Ct. 392, 55 U. S. (L. ed.) 448.

"Dissimilar conditions." - The ownership or nonownership by the shipper of the goods tendered for carriage is not a dissimilar circumstance and condition, within the meaning of this section, prohibiting inequality and discrimination in rates. Interstate Commerce Commission r. Delaware, etc., R. Co., (1911) 220 U. S. 235, 31 S. Ct. 292, 55 U. S. (L. ed.) 448.

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Relates to service rendered. The provisions of sections 2 and 3, prohibiting unjust discriminations and undue and unreasonable preferences, have reference to the service rendered, and not to the person of the sender or consignee. U. S. v. Wells-Fargo Express Co., (1908) 161 Fed. 606, affirmed (1909) 212 U. S. 522, 29 S. Ct. 315, 53 U. S. (L. ed.) 635.

Injunction. Prior to the enactment by Congress of the Elkins Act (Act Feb. 19,

1903, ch. 708, 32 Stat. L. 847, 10 Fed. Stat. Annot. 172, a United States Circuit Court had no jurisdiction in equity over a suit instituted by direction. of the Attorney-General of the United States to enjoin a railroad company from granting rebates under the interstate commerce law, especially where no order had hitherto been made by the Interstate Commerce Commission on the railroad company to discontinue the forbidden act. U. S. v. Atchison, etc., R. Co., (1905) 142 Fed. 176.

WHAT CONSTITUTES UNJUST DISCRIMINATION UNDER SECTION 2.

Only unjust and unreasonable discriminations illegal. -All discriminations are not forbidden, but only discrimination against some person, locality, or corporation, made for the advantage of the carrier, or by receiving greater or less compensation from one class of persons than from another for similar services; and hence a contract by a railroad to maintain rates from a factory not exceeding, to competitive points, the rates from two other places, is not, on its face, void for discrimination. Laurel Cotton Mills v. Gulf, etc., R. Co., (1904) 84 Miss. 339, 37 So. 134.

Reconsignment charges. An additional charge by a carrier of two cents per hundredweight for the privilege of reconsigning hay at East St. Louis, originating in northwestern territory and shipped into southeastern territory, was held to be excessive, within section 1, prohibiting excessive rates, and thereby produced an unjust discrimination, in violation of sections 2 and 3. Southern R. Co. v. St. Louis Hay, etc., Co., (C. C. A. 1907) 153 Fed. 728.

Allowance for trackage of shipper. - The allowance by a railroad company to certain coal companies shipping over its line of a stated sum per ton, ostensibly for the use of trackage owned by such companies and the service of their own locomotives in hauling cars thereon, from the rate charged plaintiff, which was also a shipper in the same district under similar circumstances, was held to be an unlawful discrimination. Mitchell Coal, etc., Co. v. Pennsylvania R. Co., (1910) 181 Fed. 403.

The phrase "substantially similar circum- . stances and conditions" relates to the circumstances and conditions of carriage only, and does not include matters affecting individual shippers; and a railway company is not authorized to charge one shipper of coal a lower rate than is charged another shipper between the same terminals, because the former is shipping under contracts extending over a term of years, based on lower rates which were in force when such contracts were made, while the other shipper has no such contracts. Pennsylvania R. Co. v. International Coal Min. Co., (1909) 173 Fed. 1, 97 C. C. A. 383.

A. 23, it was held that railroads could not be charged with discriminating against shippers of oil in barrels from the Pennsylvania oil fields to Perth Amboy, New Jersey, because they charge for the barrel package without making a corresponding charge upon shipments in tank cars owned by those shippers who can afford to build and furnish them, the carriers having none of their own, where the transportation by tank cars is more remunerative to the carriers than the transportation by barrels, and the barrel shippers have made no demand for tank cars, and cannot use them economically for shipments to Perth Amboy, on account of the lack of facilities for unloading at that point.

Acceptance of advertising in payment of transportation. The acceptance of advertising by a carrier in lieu of money in payment of interstate transportation furnished to the publisher, his employees, and the immediate members of his and their families, violates the provisions of this Act, and the Acts amendatory thereof, prohibiting the furnishing of interstate transportation for a compensation less than or different from that specified in the carrier's published rates. Chicago, etc., R. Co. v. U. S., (1911) 219 U. S. 486, 31 S. Ct. 272, 55 U. S. (L. ed.) 305.

A state statute authorizing a railway company incorporated under the laws of the state to issue transportation in payment for printing and advertising must give way, so far as interstate transportation is concerned, before the provisions of this Act, and the Acts amendatory thereof, under which a carrier can accept nothing but money in exchange for interstate transportation. Chicago, etc., R. Co. v. U. S., (1911) 219 U. S. 486, 31 S. Ct. 272, 55 U. S. (L. ed.) 305.

'Milling in transit " agreement. An agreement by which the railroad contracts to credit on the freight charges on manufactured goods any freight on raw material shipped to the factory is not violative of this section. Laurel Cotton Mills v. Gulf, etc., R. Co., (1904) 84 Miss. 339, 37 So. 134.

Sale and delivery of goods by carrier. - An interstate carrier, not empowered by its charter or by any legislation existing at the time of the adoption of this Act to mine and market coal, violates the mandate of the Act respecting the maintenance of published rates, and its prohibitions against undue preferences and discriminations, by stipulating to sell and transport coal at an agreed price, insuffi cient to yield its published freight rates after deducting the cost of purchase and delivery. New York, etc., R. Co. v. Interstate Commerce Commission, (1906) 200 U. S. 361, 26 S. Ct. 272, 50 U. S. (L. ed.) 515, wherein the court said: "That a carrier engaged in interstate commerce becomes subject as to such commerce to the commands of the statute, and may not set its provisions at naught whatever otherwise may be its power when carrying on commerce not interstate in character, cannot in reason be denied. Now, in view

of the positive command of the second section of the Act that no departure from the published rate shall be made directly or indirectly,' how can it in reason be held that a carrier may take itself from out the statute in every case by simply electing to be a dealer and transport a commodity in that character? For, of course, if a carrier has a right to disregard the published rates by resorting to a particular form of dealing, it must follow that there is no obligation on the part of a carrier to adhere to the rates, because doing so is merely voluntary. The allembracing prohibition against either directly or indirectly charging less than the published rates shows that the purpose of the statute was to make the prohibition applicable to every method of dealing by a carrier by which the forbidden result could be brought about. If the public purpose which the statute was intended to accomplish be borne in mind, its meaning becomes, if possible, clearer. What was that purpose? It was to compel the carrier, as a public agent, to give equal treatment to all. Now if, by the mere fact of purchasing and selling merchandise to be transported, a carrier is endowed with the power of disregarding the published rate, it becomes apparent that the carrier possesses the right to treat the owners of like commodities by entirely different rules. That is to say, the existence of such a power in its essence would enable a carrier, if it chose to do so, to select the favored persons from whom he would buy, and the favored persons to whom he would sell, thus giving such persons an advantage over every other, and leading to a monopolization in the hands of such persons of all the products as to which the carrier chose to deal. Indeed, the inevitable result of the possession of such a right by a carrier would be to enable it, if it chose to exercise the power, to concentrate in its own hands the products which were held for shipment along its line, and to make it, therefore, the sole purchaser thereof and the sole seller at the place where the products were to be marketed; in other words, to create an absolute monopoly. To illustrate: If a carrier may, by becoming a dealer, buy property for transportation to a market and eliminate the cost of transportation to such market, a faculty possessed by no other owner of the commodity, it must result that the carrier would be in a position where no other person could ship the commodity on equal terms with the carrier in its capacity of dealer. No other person owning the commodity being thus able to ship on equal terms, it would result that the owners of such commodity would not be able to ship, but would be compelled to sell to the carrier. And as, by the departure from the tariff rates, the person to whom the carrier might elect to sell would be able to buy at a price less than any other person could sell for, it would follow that such person, so selected by the carrier, would have a monopoly in the market to which the goods were transported."

Vol. III, p. 816, sec. 3.

IN GENERAL.

In

The object of this section was to prevent undue preference or advantage to any person, company, firm, corporation, or locality, or any particular description of traffic. terstate Commerce Commission v. Chicago G. W. R. Co., (1905) 141 Fed. 1004, affirmed (1908) 209 U. S. 108, 28 S. Ct. 493, 52 U. S. (L. ed.) 705; De Rochemont v. New York Cent., etc., R. Co., (1909) 75 N. H. 158, 71 Atl. 868.

Validity of statute. This section is valid and enforceable in a civil action for failure to comply with its provisions. Gulf, etc., R. Co. v. Moore, (Tex. 1904) 80 S. W. 426.

State statutes. This section is not in conflict with a state statute permitting the attachment of freight cars when not in actual use. De Rochemont r. New York Cent., etc., R. Co., (1909) 75 N. H. 158, 71 Atl. 868.

WHAT CONSTITUTES UNDUE PREFERENCE OR ADVANTAGE.

Definition. The statute does not define the phrase "undue or unreasonable preference or advantage." Whether a preference or advantage is "undue " or " unreasonable" must be determined by the circumstances of each case. Interstate Commerce Commission v. Chicago G. W. R. Co., (1905) 141 Fed. 1003, affirmed (1908) 209 U. S. 108, 28 S. Ct. 493, 52 U. S. (L. ed.) 705.

Preference or advantage not necessarily unlawful. To the same effect as the second paragraph of the original note, see GambleRobinson Commission Co. v. Chicago, etc., R. Co., (C. C. A. 1909) 168 Fed. 161, 16 Ann. Cas. 613; Union Pac. R. Co. v. Updike Grain Co., (C. C. A. 1910) 178 Fed. 223.

Mere inequality of charge does not constitute undue or unreasonable preference or advantage. Railroads are only bound to give the same terms to all persons alike, under the same conditions and circumstances; and any fact which produces an inequality of conditions and a change of circumstances justifies an inequality of charge. Interstate Commerce Commission v. Chicago G. W. R. Co., (1905) 141 Fed. 1003, affirmed (1908) 209 U. S. 108, 28 S. Ct. 493, 52 U. S. (L. ed.) 705.

Substantially similar circumstances and conditions must exist in order to render a preference or advantage illegal. U. S. v. Oregon R., etc., Co., (1908) 159 Fed. 975.

The similarity of circumstances and conditions under which a service of carriage is rendered, which, under the Interstate Commerce Act, requires an equality of rate, relates to the circumstances and conditions which affect the service only, and where different coal-mining localities are grouped into a district for rate-making purposes, a carrier is not justified in making a different rate for the same or substantially similar service from a particular locality in such district, or on the product of a particular

mine or vein, from that charged others because the difference in the product from such locality mine or vein and that from other mines in the district is such that it can pay a higher rate and still compete in the market. Philadelphia, etc., R. Co. v. Interstate Commerce Commission, (1909) 174 Fed. 687.

Preference between localities. The same evidence which warrants a finding that dissimilar circumstances and conditions exist which justify a lower rate for a longer haul to one point than for a shorter haul to another also establishes that the charging of such rates does not give one point an undue preference and advantage over the other, in violation of section 3 of the Interstate Commerce Act. Interstate Commerce Commission . Nashville, etc., R. Co., (C. C. A. 1903) 120 Fed. 934.

In Interstate Commerce Commission v. Cincinnati, etc., R. Co., (1903) 124 Fed. 624, it appeared that the conditions are such at Norfolk and Richmond, Va., by reason of the large number of carrying lines, both rail and water, which enter such places, and the fact that they are in what is known as the "trunk line territory," as to create a very active competition on shipments from the west, and to justify the making of low rates on such shipments; and the fact that such low rates are made on through shipments from Chicago, St. Louis, and East St. Louis by a material reduction from local tariff rates by the connecting lines west of the Ohio river, while substantially the local rates are charged on the same lines on through shipments from the same points to Wilmington, N. C., which is not within the trunk line territory, but in the southern territory, and has fewer lines of transportation and less active competition, resulting in higher through rates to the latter place, although the length of haul is substantially the same, does not operate to give Norfolk and Richmond an undue or unreasonable preference or advantage, or subject Wilmington to an undue or unreasonable prejudice or disadvantage, in violation of section 3.

Classification. The classification of railway cross-ties in a different class from "lumber," imposing on them a higher rate, constitutes unjust discrimination. American Tie, etc., Co. v. Kansas City Southern R. Co., (C. C. A. 1909) 175 Fed. 28.

The disturbance in the relations between freight rates for soap in carload and less than carload lots, created by advancing the former from class 6 to class 5, and the latter from class 4 to class 3 in a new classification adopted to govern in official classification territory, was not cured by classifying soap in less than carload lots at twenty per cent. less than third class, but not less than fourth class, where the result of applying this modified percentage classification to the varying rates is to leave soap in less than carload lots in the fourth class in portions of the territory and in a higher class in other portions. Cin