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of section 4 of the Interstate Commerce Act unless treated as a terminal charge and published as such in its schedules, or directed to be so published by an order of the Interstate Commerce Commission. Interstate Com. Co. v. Detroit Railway,

167 U. S. 633.

Long and Short Haul Mode of Fixing Rates. After a full hearing and investigation, the Interstate Commerce Commission made an order directing the defendant carriers to cease and desist from enforcing certain rates, charging more for a short than for a long haul, the points being from Cincinnati to Chattanooga, Atlanta, and intermediate points. The carriers. refused to obey the order, and the Commission brought suit in the Circuit Court to secure an injunction to restrain the carriers from enforcing the rates which the Commission found to be unlawful. The court dismissed the bill. The Court of Appeals affirmed the decree.

The court observed "in fixing the rates to these intermediate points, the through rate to that competitive point which, combined with the local rate from the competitive point to the point of destination, will give the lowest through rate to the noncompetitive point controls. As the noncompetitive point thus gets the benefit of the lowest rate to any of the neighboring competitive points, and as the carriage of the competitive traffic to the respective points is remunerative to the carriers to an extent that more than pays the expense of moving the competitive traffic, it is difficult to perceive how the noncompetitive points are subject to any undue or unreasonable prejudice or disadvantage by this scheme of rate making."

The Supreme Court held, however, that an error of law had been committed in the interpretation given by the Commission in making its order as to the rule laid down in Louisville Railroad v. Behlmer, 175 U. S. 648. In respect to this rule, the court held, that when a violation of the long-and-short-haul clause of the Interstate Commerce Act is charged, competition is one of the elements which enter into the determination as to whether or not the conditions are similar. If a dissimilarity is found, then the further question arises whether the dissimilarity is so great as to justify the discrimination which is complained of.

For these reasons the Supreme Court modified the decree of the Court of Appeals (reported in 93 Fed. Rep. 83), and directed that the dismissal of the bills be modified without prejudice to the right of the Interstate Commerce Commission, if it so elects to make an original investigation of the questions contained in the record pertinent to the complaints presented by that body, and as modified decree affirmed. Interstate Com. Co. v. Western Railroad, 181 U. S. 29; Interstate Com. Co. v. Clyde SS. Co., 181 U. S. 29.

Carrier Need not Apply to Commission to Fix Rates.-A carrier in making a tariff rate may judge in the first instance as to whether, in prescribing a greater charge for a short than for a long haul, the circumstances and conditions are or are not "substantially similar." He is not obliged to seek an investigation by the Interstate Commerce Commission as to whether circumstances and conditions justify the rate. But in fixing

the rate, the carrier does so at its peril subject to liability under the act if it should be afterward adjudicated that the charge so fixed is unlawful. Interstate Com. Co. v. Atcheson, 50 Fed. Rep. 295.

Damages - Long and Short Haul. A shipper who is injured by reason of the fact that he was not given the same rate for the shorter haul than was charged other shippers for the longer haul may bring an action at law against the carrier. If he is entitled to recover the measure of damages will be the difference between the amount which plaintiff was obliged to pay and the lesser rate shown to have been paid by other shippers for like services. (June, 1891, Cir. Ct. So. Dist. Iowa.) Junod v. Chicago Railroad, 47 Fed. Rep. 290.

Plaintiff claimed that he was charged more by defendant for carrying grain to Chicago from Carroll, Iowa, than was charged by defendant to shippers transporting grain from Blair, Neb., to Chicago. It was alleged that plaintiff was obliged to pay 19 cents per 100 pounds from Carroll to Chicago, while shippers in Blair, Neb., were charged for the same service 11 cents per 100 on grain shipped by them to Chicago. That the distance from Blair to Chicago is much farther than from Carroll to Chicago. The court charged the jury that if they

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found a verdict for plaintiff they might, in their discretion, add interest, but the interest must be computed from the date of the last shipment made by plaintiff. Ib.

That it shall be

§ 5. Pools and Combinations Prohibited. unlawful for any common carrier subject to the provisions of this act to enter into any contract, agreement, or combination with any other common carrier or carriers for the pooling of freights of different and competing railroads, or to divide between them the aggregate or net proceeds of the earnings of such railroads, or any portion thereof; and in any case of an agreement for the pooling of freights as aforesaid, each day of its continuance shall be deemed a separate offense.

Object and Scope of Section 5.- The object of this section of the act is to prevent agreements among carriers which will operate to shut out competition. Competing lines of carriers throughout the country are forbidden to combine their business, and divide the profits of the pool among themselves. If such combinations were permitted, it is claimed the shipper and consumer would be practically at the mercy of one carrier operating the various connecting lines of railroad as constituent companies in the common interest. Such a merger or combination would operate to destroy competition and restrain trade and commerce to such an extent that commerce would be practically controlled by the carrier, who could, through secret agencies, also become the producer and shipper. Notwithstanding the stringent provisions of section 5, combinations in restraint of trade became so formidable that on July 2, 1890. Congress passed the Sherman Act, entitled "An Act to protect trade and commerce against unlawful restraints and monopolies." The provisions of the act were made universal in their application to reach the heart of the evil sought to be remedied. It declares that every contract" in restraint of trade or commerce is unlawful. It is immaterial, therefore, whether such

a contract, if it affects interstate commerce, is made with the carrier, shipper, manufacturer, or producer. The contract, if it restrains trade and commerce, is unlawful. The Sherman Act, with reference to the Commerce Act, is practically supplemental legislation. Its effect and operation is to broaden the provisions of section 5 so as to embrace not only carriers, but manufacturers and producers as well.

The Interstate Commerce Act and the Sherman Act are not repugnant to each other. The Supreme Court of the United States has held that both acts must stand (October, 1898, United States v. Joint Traffic Association, 171 U. S. 505), and must be construed as harmonious legislation. Merger Cases -Northern Securities Company v. United States, 193 U. S. 197. (March, 1904.)

Pooling Defined. The statute contemplates two methods of pooling, both of which are prohibited. First, a physical pool, which means a distribution of property by the carrier offered for transportation among different and competing railroads in propertions and on percentages previously agreed upon; and secondly, a money pool, which is described best in the language of the statute "to divide between them [different and competing railroads] the aggregate or net proceeds of the earnings of such railroads or any portion thereof." The words "any common carrier," as used in the act, means carriers engaged in interstate commerce. In re Pooling Freights, 115 Fed. Rep. 588 (May, 1902, Dist. Ct. West. Dist. Tenn.).

Pooling Agreements Unlawful.- Congress has power, power, in legislating upon interstate commerce, to declare that no contract, agreement, or combination shall be legal which shall restrain trade and commerce by shutting out the operation of the general law of competition. United States v. Joint Traffic Assn., 171 U. S. 505; United States v. Trans-Missouri Freight Assn., 116 U. S. 290; Northern Securities Company v. United States, 193 U. S. 197.

In the Joint Traffic cases it appeared that thirty-one railroad companies, engaged in interstate commerce between Chicago and the Atlantic coast, made a joint traffic agreement, and entered into articles of association with respect to the regulation of

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rates, fares, and charges, and the rules applicable thereto, governing competitive traffic (with certain specific exceptions) which passed through the western termini of the trunk lines of the respective roads operated by the members of the association, and such other points as might be thereafter designated by the managers. The agreement was drawn for the purpose of avoiding the objections to the validity of a similar agreement, which was declared void by the court in the United States v. TransMissouri Freight Assn., 166 U. S. 290.

The agreement declared expressly that it was made to aid in fulfilling the purposes of the Interstate Commerce Act, and to co-operate with the respective parties and adjacent transportation associations to establish and maintain reasonable and just rates, fares, rules, and regulations on State and interstate traffic; to prevent unjust discrimination, and to secure the reduction and contraction of agencies, and the introduction of economies in the conduct of freight and passenger service.

A bill was filed on behalf of the United States in the southern district of New York for the purpose of obtaining an adjudication that the agreement in question was unlawful in restraint of trade, and in violation of the provisions of the Interstate Commerce Act, and of the Sherman Act, and to restrain and enjoin its further execution. The government claimed that although the agreement professed in terms to aid and fulfil the purposes of the Interstate Commerce Act, yet its direct and immediate results would operate to defeat the object and purposes of the act, create a monopoly, and stifle competition; that it was in direct violation of section 5 of the act, which in terms forbids common carriers to pool freights of different and competing roads, or to divide the aggregate net proceeds of the earnings of such roads, or any portion thereof, and making such pooling agreements an offense under the act. The court below dismissed the bill and its judgment was affirmed in the Circuit Court of Appeals. The judgment was reversed in the Supreme Court and the case remanded for further proceedings. The Supreme Court held that there was no legal distinction between the agreement of the Joint Traffic Association, then before the court, and the agreement in the Trans-Missouri case. That the agreement was in restraint of trade and commerce and was