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mine and thus in all probability disturb the rates from all of the mines, not only on this defendant's lines but on the lines of other railways which also haul coal from competitive fields to same competitive markets. The complaint should be dismissed.
MISSOURI & KANSAS SHIPPERS' ASSOCIATION
MISSOURI, KANSAS & TEXAS RAILWAY COMPANY.
Submitted October 23, 1907. Decided November 4, 1907.
1. The Commission is essentially an administrative body, and in the examina
tion of formal complaints ought to get at the real substance of the issue
presented unembarrassed by technical considerations. 2. In a proceeding based on an infraction of section 4 of the act, a merely theo
retical or paper rate that has not been used and was unknown to the defendant until casually discovered will not be accepted as affording a just basis for an order for reparation on shipments made to an intermediate point at a slightly higher rate. C. W. Durbin and J. T. Burney for complainant. James Hagerman and E. A. Neel for defendant.
REPORT OF THE COMMISSION.
Until May 27, 1907, and for some years prior to that date, the rates on hay in carloads from Piqua, Neosha Falls, Hartford, Burlington, and Bristol, in the State of Kansas, to Kansas City and St. Joseph, in the State of Missouri, were so adjusted in the published tariffs of the defendant as to involve it in an infraction of the provisions of section 4 of the act. St. Joseph is 63 miles beyond Kansas City on the through route which passes through Kansas City from the producing points in question, and of which the defendant's line forms a part. And the rates to St. Joseph as lawfully published were less, until they were corrected on the date mentioned, than the rates from the same points to Kansas City. The defendant was therefore receiving greater compensation for the transportation of a like kind of property under substantially similar conditions to Kansas City
12 I. C. C. Rep.
than it was charging to St. Joseph, the haul to the former destination being included within the longer haul to St. Joseph.
The explanation of this state of affairs as made by the defendant at the hearing is as follows: Prior to December 14, 1903, the rates to Kansas City on hay in carloads from the points named were 11 and 111 cents per 100 pounds. On that date they were reduced to 104 cents from Burlington and Bristol and to 10 cents from Piqua and Neosha Falls. Hartford, which is a strictly local point on the defendant's line, seems to have retained its former rate of 114 cents. These are commodity rates. And the rates from Burlington and Bristol have now been reduced to 10 cents. There had been and still is a considerable movement of hay from those points to Kansas City, and commodity rates were established to take care of that traffic. But for many years there seems to have been no movement of hay from those points to St. Joseph, and no commodity rates on hay had been put into effect until May 27, 1907, the date above mentioned, when, some hay having been offered to defendant for shipment to St. Joseph, it was discovered that Class C in the defendant's tariffs included hay and yielded a rate to St. Joseph of 10 cents per 100 pounds, being less than the rates to Kansas City, which was intermediate. This fact had theretofore escaped the attention of the defendant, but it at once adjusted the situation and established a commodity rate to St. Joseph by adding an arbitrary of 41 cents to the rate to Kansas City.
Although it is clear that the Class C rate was a paper rate only, so far as hay was concerned, and that the breach by defendant of the provisions of section 4 was therefore purely technical and in no sense substantial, the object of this petition is to take advantage of the situation and to secure reparation on shipments that moved to Kansas City while the defendant inadvertently permitted its tariffs to remain in that condition.
While its procedure is to some extent judicial in nature, the Commission is essentially an administrative body; and in the adjustment of contentious proceedings of this kind it ought to examine into the real substance of the matter unembarrassed by considerations that are purely technical. Looking at the complaint from this point of view, it seems to us wholly without merit. We are unable to accept a merely theoretical or paper rate, for the longer haul, that has not been used and was unknown either to the defendant or to the complainant, until casually discovered after it had been the published rate for some years, as affording a just basis for an order for reparation on shipments made to an intermediate point at a slightly higher rate. This view of the matter is supported by the uncontradicted evidence of the defendant, tending to show that the Class C rate of 10 cents to St. Joseph was not a compensatory rate on hay, and by the complete failure of the complainant to show that the rate to Kansas City was in itself excessive. That issue although raised in the complaint was abandoned on the hearing.
The petition must be dismissed and it will be so ordered.
CHICAGO, MILWAUKEE & ST. PAUL RAILWAY COMPANY; GREAT NORTHERN RAILWAY COMPANY; CHI
GO & NORTHWESTERN RAILWAY COMPANY; AND CHICAGO, BURLINGTON & QUINCY RAILWAY COMPANY.
Submitted October 19, 1907. Decided November 4, 1907.
Defendant Chicago, Milwaukee and St. Paul Railway Company's rate on er
and eggs from Granite Falls, Minn., to Chicago, Ill., is 59 cents per 100 pounds in carload lots. Defendant's rate from Pipestone, Minn., to Chicago, Ill., is 47 cents per 100 pounds in carload lots, although Granite Falls is 41 miles nearer Chicago, but on a different branch of the road. The same rates are in force by defendant Great Northern Railway Company, although Granite Falls is an intermediate point between Pipestone and Chicago on the line made by the Great Northern Railway and its connections. Held, defendant Chicago, Milwaukee and St. Paul Railway Company's rate of 59 cents per 100 pounds on butter and eggs in carload lots from Granite Falls to Chicago is unreasonable and unjust, and should not exceed 47 cents per 100 pounds. Bert 0. Loe and A. E. Morse for complainant.
William Ellis, J. T. Conley, and E. C. Nettels for Chicago, Milwaukee & St. Paul Railway Company.
J. D. Armstrong for Great Northern Railway Company, Chicago & Northwestern Railway Company and Chicago, Burlington & Quincy Railway Company.
REPORT OF THE COMMISSION.
The complainant is a corporation having its principal place of business at Granite Falls, Minn. It is engaged in buying and selling eggs and butter and shipping the same to wholesale markets in various States. Its method of business is to send bids to various towns in the State of Minnesota and South Dakota, which bids name prices offered for butter and eggs f. o. b. at such towns of purchase. On butter and eggs so purchased it pays the local rate to Granite Falls. Shipments are there consolidated into carload lots, which are shipped from Granite Falls to the wholesale markets.
The defendants are carriers subject to the act to regulate commerce, operating between Chicago, Ill., and both Granite Falls, Minn., and Pipestone, Minn., as through routes or as portions of through routes.
The complaint is directed against the rate of 56 cents per 100 pounds charged by the defendants for carrying butter and eggs in carload lots from Granite Falls to Chicago. This is the rate upon third-class products, no commodity rate on butter and eggs being published in the territory where Granite Falls is situated. Complainant contrasts the Granite Falls third-class rate with the rate of 43 cents per 100 on third-class products in carloads, including butter and eggs, from Pipestone to Chicago, and charges that this relation in rates is a discrimination against him and in favor of his competitors at Pipestone.
Granite Falls is as to certain territory in Minnesota a competitive point with Pipestone in the business of purchasing and shipping butter and eggs. Both Granite Falls and Pipestone are on the same line of the Great Northern Railway, Granite Falls being an intermediate point between Pipestone and Chicago on the line between the two latter cities made by the Great Northern and its connections. By this line Granite Falls is 70 miles nearer Chicago than is Pipestone.
Granite Falls is also situated upon the Chicago, Milwaukee & St. Paul Railway, the distance from Chicago to Granite Falls via this road being 535 miles. Pipestone is also reached by the Chicago, Milwaukee & St. Paul Railway, by a different line, however, than the line of that road reaching Granite Falls. The distance from Chicago to Pipestone via the Chicago, Milwaukee & St. Paul Railway is 576 miles.
It thus appears that Granite Falls is nearer Chicago than is Pipestone by every possible route; that the rate on butter and eggs in carloads from Granite Falls to Chicago is 13 cents per hundred pounds higher than the rate from Pipestone to Chicago; and that by the Great Northern Railway and its connections Granite Falls is an intermediate point between Chicago and Pipestone.
The defendant railroads admit all the above facts and seek to justify them as follows: The Great Northern Railway disclaims responsibility for the lower rate from Pipestone. It shows that its rate from Granite Falls is somewhat less than its rates from certain other towns equally distant from Chicago, and also that the low Pipestone rate is out of proper relation to its rates from other points on the same branch. As to the Pipestone rate, it shows that it is a rate forced upon it by the competition of the branch of the Chicago, Milwaukee & St. Paul Railway extending from Milwaukee, Wis., to Sioux Falls, S. Dak. This, of course, is such competition as would justify a departure from the provisions of the fourth section of the act to regulate commerce. The burden of the defense is thus shifted to the Chicago, Milwaukee & St. Paul Railway.
The defense of the latter is briefly this: Pipestone has a low rate because Sioux Falls, S. Dak., a point with which it competes for certain jobbing business, has a low rate. No transportation competition at Pipestone is shown to justify the existence of an exceptionally low rate at that point. Neither is there any claim that the rate from Pipestone is not voluntarily made by the Chicago, Milwaukee & St. Paul Railway and remunerative and reasonable to all the carriers involved. Regarding this Pipestone rate, testimony was given by Mr. E. C. Nettels, assistant general freight agent of the St. Paul road, as follows:
Mr. ELLIS. Why is the adjustment of class rates at Pipestone lower than the adjustment at Granite Falls?
Mr. NETTELS. That requires a little explanation. The class rates in effect from Chicago to the Missouri River—that is, Kansas City, Omaha, Sioux City, and Sioux Falls—are all the same. The distances between those points are different. The distance between Chicago and Kansas City is about 490 miles. I don't know the exact distance to Omaha, but it is something over 500 miles ; Sioux City is a little farther, and to Sioux Falls still a little farther. Those class rates are all the same—the basis of rates arrived at by all the lines in competition for business between these points. Sioux Falls and Pipestone have been considered competitive points as far as the jobbing houses are concerned. When the adjustment of rates was made, Pipestone, being in directly intermediate territory, was in competition with Sioux Falls, and the class rates were made to give the jobber handling shipments under the classification an opportunity to do business. The distances, as I say, were not materially considered in the application of these rates or the making of them, and there is no such thing, as I understand, as a jobbing house at Granite Falls. There are distributing points, but there is no competition between the points so far as that is concerned, while the rate at Sioux Falls fixed the rate at Pipestone.
Mr. ELLIS. Pipestone being, at least technically, intermediate to Sioux Falls from Milwaukee, and practically so as to certain routings, carried the Missouri River rate back to Pipestone, didn't it?
Mr. NETTELS. Yes.
Mr. NETTELS. Yes, except now it does not. The rate to Pipestone is higher than it is at Sioux Falls, for the reason we have been enjoined from putting in the basis of rates at Sioux Falls that formerly applied there.