sion for shipment east, he pays the through rate from Porter to Boston, and the local rate previously paid is refunded. The through rate from Porter to Boston is the same as the through rate from South McAlester to Boston, or $1.05. The through rate from Muskogee to Boston is, however, $1.

On shipments originating at Muskogee the local rate to South McAlester is paid and refunded after compression, the net rate thus being the $1 rate from Muskogee to Boston. The fact that the cotton originates at the $1 point, is carried to a $1.05 point, and is then shipped from there at the $1 rate, is disregarded. In other words, under the practice of "floating" cotton the through rate from point of origin to ultimate destination is protected in all cases.

It is the contention of the complainants that the practice of the defendant of hauling cotton through and out of Muskogee to South MoAlester under the conditions stated above constitutes a violation of section 3 of the act to regulate commerce.

The defendant contends that the manner in which it conducts its business under Circular 676 is not unlawful, and that the advantages to South McAlester and disadvantage to Muskogee growing out of it are not of the character prohibited by section 3 of the act, for the reason that the hauling is done and the advantage given at the instance of the shipper, who would otherwise give his business to other and competing lines of railroad.

The defendant asserts that this competition exists at Muskogee, where the Midland Valley and Muskogee, Oklahoma & Gulf roads will accept "flat" cotton on demand of the Lesser-Goldman Cotton Company and haul it to Fort Smith, Ark., where the Lesser-Goldman Company has a press, and that it also exists at Wagoner, 15 miles north of Muskogee, on defendant's main line, where the Iron Mountain Railroad, also reaching Fort Smith, is ready to perform the same service for the LesserGoldman Company.

The defendant offered testimony to show that the Tulsa branch points were also competitive by reason of the fact that cotton might be hauled by wagon from them to stations on the Midland Valley, or to Wagoner, and thence shipped to Fort Smith. This would mean a wagon haul of from 10 to 20 miles and across an unbridged river. The further position of the defendant, as expressed in the words of its counsel, is as follows:

Complainants seem to think that they, or those whom they represent, have acquired some vested interest or right in doing certain work for the railway company, which work is but an adjunct to the service of transportation. The defendant, it must be admitted, might, if it chose, carry the cotton "flat" to the point of destination. Whether it goes "flat" or compressed is a matter of indifference to the shipper. In either case the rate of charge to him is the same. For reasons which are sufficient to the carrier, it elects in certain cases to compress the cotton at its

own cost and expense; and the sole question in this case is whether or not, in a matter which rests entirely in its discretion, which it may elect to do, or which it may not elect to do, and which in no sense is a service due and owing to the public, and which the public have no right to insist upon, and a service which no one can claim any vested rights in performing for the carrier, if it elects to have such service performed for its own advantage, is it subject to regulation by this Commission under the terms of the interstate commerce act upon the complaint of some one wishing to perform such services for the carrier? No shipper is complaining of the practices complained of. As we look at the case the complainants are in no better situation than a local car repair shop at Muskogee would be if it complained of the fact that the railway company, for good and sufficient reasons to itself, took its cars by Muskogee to South McAlester and had them repaired there; or if, instead of buying certain supplies which it needed on its line north of Muskogee at that point, should buy them at South McAlester. * * On the theory of complainants, if there were two compresses in Muskogee, then each of the compress companies would have the right to demand that the defendant give each of them an equal share of its cotton for compression.

*

The first line of defense made by the carrier is that it was compelled by threatened loss of the business of the Lesser-Goldman Company, which could patronize other roads in the Muskogee territory, to permit that company, or any other shipper so desiring, to have its cotton carried for compression to South McAlester. This is the defense of justification by reason of competitive conditions.

The second line of defense is that compression is purely a matter in which the railroads are interested, as they are in the repair of their own cars, and therefore is nobody's business but their own. a plea to the jurisdiction of the Commission.

This is

Let us for a moment give consideration to the latter question— whether compression is to be regarded solely as a part of the internal economy of the railroad and a matter in no way subject to regulation and control-and to this end we look to the facts presented in this

case.

The compress at Muskogee is operated by a professional compressor. It does not buy, sell, or deal in cotton in any manner, directly or indirectly; it receives "flat" cotton from the railroad company, receipts for it, insures it, compresses it, and loads it-all services for the carrier, and for which the carrier pays. There are no charges to the shipper. No shipper, it is clear, can secure any favor or advantage over any other shippers through this press, since it knows no shipper in the transaction. On the other hand, the compress at South McAlester is owned and controlled by the Lesser-Goldman Cotton Company, one of the heaviest cotton buyers and shippers in the territory. Through this compress it handles both its own cotton and that of other buyers.

The charge for compression-in the Indian Territory, 10 cents a hundred, or about 50 cents a bale-is paid by the carrier to the compressor out of the freight rate collected by the carrier from the shipper.

If then the compressor to whom this 10 cents a hundred is paid is also a shipper, the transaction amounts to a return to the shipper of that amount. So much of the 10 cents as is not expended in operating the compress is clearly gained to the compressor shipper over every other shipper. The freight rate paid by the compressor shipper is thus 10 cents a hundred less than the rate paid by the shipper who does not own a compress, and to whom this amount is not returned.

His net advantage is such part of the 10 cents as he does not expend in the running of the compress-in other words, the profit in compression. This profit it is not easy to judge from the record, but is estimated by witnesses at from 15 to 20 cents a bale. In addition to this the buyer who operates a compress has the advantage, if he chooses to use it, of an intimate knowledge of the buying, selling, and shipping arrangements of every other buyer whose cotton passes through his press; he knows where the cotton is bought and where it is to be sold, and the opportunity is thus open to him to compete most effectively at both ends of the market.

He has also practical control over the movement of his competitor's cotton. If the compress is congested and some cotton must be delayed in compression, he can put his own through and hold that of his rival. If cars are scarce and all the cotton can not be shipped, he can ship his own and leave that of the other buyer standing on the platform. In short, the railroad company which accepts goods for transportation so deals with those goods as to place one shipper under a business disadvantage with relation to his rivals. This is not an ideal condition of things, and sooner or later a way must be found by which carriers will be denied opportunity to pursue any such practices.

The railroads must, if they wish this cotton compressed for their own convenience, either go into the business of compression for them selves, or give such work to those who have no interest whatever in the buying and selling of cotton. If, as the railroad claims, it has the option either to carry this cotton "flat" or to compress it in transit, it must exercise this right to compress in such manner as will allow no discrimination as between shippers or localities. And in this statement compression is assumed to be a matter which enters into transportation. It is admitted by the railroad that the rate is fixed upon a basis which permits it to pay 10 cents a hundred pounds for compression.

In view of all these facts, the question of compression is not one with which the railroad may deal entirely as it sees fit and without respect to the effect which its practices have upon the transportation of cotton. Either the carrier must publish a rate upon "flat" cotton and another rate upon compressed cotton, and divorce itself entirely from the matter of compression, or else such compression as is given by the railroad becomes subject to the jurisdiction of this Commission.

Assuming now that the contention of the defendant, that the matter of compression is entirely a matter within the railroad's discretion, is true, and that this can be carried to the extent of establishing but a single compression point in the territory, as it might have but one repair shop in the territory-could the cotton shippers in and about Muskogee complain? We think they clearly could, inasmuch as such practice would affect the facilities of transportation that were granted. But, without respect to this question, if the Missouri, Kansas & Texas Railway Company declares a policy with respect to compression at the nearest point, it can not vary that rule so as to give certain shippers the opportunity to avoid it and thereby receive an advantage which is not given to shippers generally.

And in this connection we must insistently bear in mind the purpose of the law, and that it is the duty of this Commission to look through any arrangement by the carrier to see what its effect is or may be. This principle has often been expressed by the Commission, but perhaps in no clearer language than that used by Commissioner Bragg in the case of Shamberg v. Delaware, Lackawanna & Western Railroad Company, 4 I. C. C. Rep., 654:

In the contemplation of the statute any methods, however skillfully devised, by which an unlawful result is effected, become devices for the end attained. In a case of this kind the law deals with the results produced; and it is not material what means may be employed for the purpose, whether the means be direct or indirect, open or covert, is of no importance if they in fact culminate in what the law forbids. The offense is fully seen in final result; but, the result being unlawful, the condemnation of the statute falls alike upon the result itself and the means by which it is reached. When the ultimate thing done is unlawful, the steps for the purpose of its perpetration are equally unlawful. The parties engaged in the transaction must be presumed to have intended by their acts the breach of law which ensues, with the necessary consequence.

The railroad says very frankly that it does not desire to haul cotton past compress points, and that it is its general practice to haul cotton only to the nearest compress point; but that, by reason of the demand of the Lesser-Goldman Company, that its cotton originating at Muskogee and north thereof should be compressed at its South McAlester compress, they inserted in their circular the provision which has been above quoted giving to shippers on their demand the right to have compression made at South McAlester. According to the record the only shipper who made such demand was the Lesser-Goldman Company; and it threatened, if its demand was not complied with, to divert its traffic from the Missouri, Kansas & Texas Railway to competing lines which could carry the cotton for compression to Fort Smith where the Lesser-Goldman Company had another compress.

The exception to its rule, therefore, as to compressing at the nearest point, was made, not because there were other railroads at Muskogee, but because the Lesser-Goldman Company had another compress at

Fort Smith. This is not the character of competition which justifies discrimination in the rules or practices of a railroad. If a year hence the Lesser-Goldman Company should choose to establish a cotton compress at Muskogee or buy that one now in existence in that city, it would doubtless say to the railroad company: "We no longer desire to ship our cotton from the Muskogee territory to South McAlester, and therefore you may withdraw the provision of your circular as to shippers being given the option to compress at South McAlester "—and the "competition" would disappear.

It seems clear that the framing of Circular 676 was not compelled by the competition of other railroads so much as by the interest of a shipper having two compresses somewhat strategically placed. If the defendant may use its compressing right to hold the Lesser-Goldman business as against other roads, it can also, of course, use that right to favor any other shipper, and thus make the compressing of cotton a matter of traffic inducement quite as seductive as any other special privilege.

We are led to the conclusion, therefore, that the defendant is not justified in making the exception which appears in its circular of November 12, 1906; and that it must grant all the privileges to one compressing point herein considered that it grants to the other, and an order will be made accordingly.

No. 820.

PACIFIC COAST JOBBERS AND MANUFACTURERS'

ASSOCIATION

v.

SOUTHERN PACIFIC COMPANY, DEFENDANT; AND ATCHISON, TOPEKA & SANTA FE RAILWAY COMPANY, INTERVENER.

Submitted June 11, 1907. Decided June 24, 1907.

The tariff of the Southern Pacific Company on traffic westbound to San Francisco contains a schedule of transportation rates imposed upon such traffic, and by a note in such tariff headed "Toll at San Francisco, Cal.," an additional charge of 5 cents per ton is levied upon such traffic reaching San Francisco by both the Ogden and the Coast Line routes: Held

1. That traffic moving by the Coast Line is not subject to the payment of such charge; and