It is admitted by complainants that no discrimination was practiced by this defendant in these cases and that during the time when it absorbed the switching charges for any it absorbed them alike for all, and that when it required payment by shippers all shippers were alike required to pay.

The law recognizes the right of a carrier to fix its transportation and service charges, subject to regulation, if, after hearing upon complaint, they are shown to be unreasonable or unjust. No such showing is made in this instance, and the cases should be dismissed.

No. 931.

COMMERCIAL CLUB OF SANTA BARBARA, CALIFORNIA,

v.

SOUTHERN PACIFIC COMPANY; UNION PACIFIC RAILROAD COMPANY; ATCHISON, TOPEKA & SANTA FE RAILWAY COMPANY; MISSOURI PACIFIC RAILWAY COMPANY; DENVER & RIO GRANDE RAILROAD COMPANY; AND RIO GRANDE WESTERN RAILWAY COMPANY.

Submitted September 23, 1907. Decided November 4, 1907.

Complainant asked that Santa Barbara, Cal., be given the benefit of terminal rates on westbound transcontinental shipments, and based its petition upon the contention that the transportation conditions and circumstances obtaining in that city are similar to those which exist at other Pacific coast cities in California to which such rates are voluntarily extended by the rail carriers; Held, that, from the facts disclosed by the record, there is no real, potential, compelling competition between the transcontinental rail carriers and those carrying similar traffic by water which effects directly the rail rates obtaining at Santa Barbara, and that the complaint should be dismissed.

W. H. Barnes and B. F. Thomas for complainant.

C. W. Durbrow for Southern Pacific Company, Union Pacific Railroad Company, Missouri Pacific Railway Company, Denver & Rio Grande Railroad Company, and Rio Grande Western Railway Company.

T. J. Norton for Atchison, Topeka & Santa Fe Railway Company. REPORT OF THE COMMISSION.

LANE, Commissioner.

The commercial interests of the city of Santa Barbara, Cal., ask that they be given the benefit of terminal rates on westbound trans

continental shipments, and base their petition herein upon the contention that the transportation conditions and circumstances obtaining in that city are similar to those which exist at other Pacific coast cities in the State of California to which such rates are voluntarily extended by the rail carriers.

Santa Barbara is a coast city. It faces Santa Barbara Channel, which is protected by a line of islands to the south. It enjoys communication by sea with ports to the north and to the south, and is a regular stopping place for the steamships of the Pacific Coast Steamship line, which take on and discharge freight and passengers over a wharf 2,300 feet in length, extending from the beach immediately in front of Santa Barbara into the channel. Santa Barbara lies 111 miles northwest of Los Angeles and 371 miles south of San Francisco, and is served directly by but one railroad, the Coast Line of the Southern Pacific system. The other California cities with which it asks to be placed on a parity are Marysville, San Francisco, Los Angeles, Sacramento, Stockton, Benicia, South Vallejo, Port Costa, Crockett, Diamond, Antioch, Oakland, Richmond, San Jose, National City, and San Diego, all of which enjoy what are known as coast terminal rates. Whatever eastern traffic moves via the Coast Line to Los Angeles must pass southward through Santa Barbara; and westbound eastern traffic, when destined to San Jose or San Francisco and moved by the Sunset and Coast Line routes, must likewise pass on its northward journey through Santa Barbara. The full strength of the complainant's position can not be better stated than in its brief, in which it is said

that each of the above-named terminal points enjoys a cheaper rate on interstate commerce than that which is afforded to Santa Barbara, thereby causing and effecting an unjust, unreasonable, and unlawful discrimination against the city of Santa Barbara as compared with Marysville, San Jose, Los Angeles, San Diego, and other terminal points herein mentioned, notwithstanding the fact that Santa Barbara has the same natural and geographical situation as Los Angeles and San Diego, and much better facilities for railroad transportation than Marysville, San Jose, or Stockton. This discrimination works an injury to Santa Barbara as a city and locality, to the merchants, the business men of the city, and the entire community in the vicinity of the city of Santa Barbara, and is in violation both of sections 3 and 4 of the interstate-commerce act.

The theory upon which a less rate has been fixed as to the terminal points named is that such points enjoy, or at the time when such rates were established did enjoy, the advantage of competition by ocean carriers, and therefore the rate has been called a "compelled rate"-a rate which the carriers themselves did not voluntarily establish, but which they were required to establish by force of an active and potent competition with ocean-going vessels which transported freight to such terminal points.

It has frequently been found by this Commission and by the courts that such rates when made by railroads in the face of ocean competition are justifiable under the long and short haul clause of the Act, and that the extension of such rates to a community so situated as to be in a position to move its traffic by water or by rail is not such discrimination, as against other communities not so situated, as falls within the condemnation of the law. Louisville & Nashville Railway Co. v. Behlmer, 175 U. S., 648; Interstate Commerce Commission v. Alabama Midland Railway, 168 U. S., 144; Texas & Pacific Railway v. Interstate Commerce Commission, 162 U. S., 197; Interstate Commerce Commission v. Atchison, Topeka & Santa Fe Railroad, 50 Fed Rep., 295; Ex parte Koehler, 31 Fed. Rep., 315; Interstate Commerce Commission v. Nashville, Chattanooga & St. Louis Railway, 120 Fed. Rep., 934; Shippers' Union of Phoenix v. Atchison, Topeka & Santa Fe Railway et al., 9 I. C. C. Rep., 250.

Such competition as will justify under the long and short haul clause of the Act a preferential or discriminatory rate must be potential. Although it is fairly established that at present there is active and real competition between ocean and rail carriers to Pacific coast points, Santa Barbara does not enjoy such water competition as to compel the installation of terminal rates voluntarily on the part of the rail carriers. By three distinct water routes, and at least as many lines of steamships, freight is transported from eastern ports to the Pacific coast; but competition between water and rail carriers does not directly, and of necessity, give Santa Barbara the advantageous rates which other ports have secured, for no steamship line carrying traffic from Atlantic ports, either by way of the Straits of Magellan, the Panama route, or the newly established Tehuantepec route, stops at Santa Barbara.

The moving cause for such omission may be an insufficiency of traffic to justify an ocean liner in making that port; or it may be that these deep-draft vessels regard themselves as debarred by physical conditions from such traffic, because the Santa Barbara channel at the point of greatest depth reached by the local wharf is not sufficiently deep to dock such ships as carry this eastern freight. Whatever the cause, it is undisputed on the record that eastern traffic destined to Santa Barbara and coming by boat is either unloaded at San Diego or at San Francisco, and thence transshipped either by rail or water carrier. There is, therefore, no real, potential, compelling competition between the transcontinental rail carriers and those carrying similar traffic by water which affects directly the rail rates obtaining at Santa Barbara.

In the absence of any showing adverse to the reasonableness of the transcontinental west-bound rates to Santa Barbara in and of

themselves, we are constrained to deny complainant's petition. To hold that the Southern Pacific Company must as a matter of law grant to Santa Barbara a terminal rate because she lies upon the coast line would be in effect declaring that that city enjoys a harbor of a character which nature has not granted to her and transportation advantages which are not existent.

While, therefore, such conditions do not obtain at Santa Barbara as would justify this Commission in requiring the installation of terminal rates based upon the existence of actual water competition, she is not without the advantage of her proximity to points where such rates do obtain, and her position upon the ocean directly and beneficially affects the rail rates which she secures.

If any of the coast terminal points at present enjoying terminal rates are in fact as far removed from the direct effect of ocean competition as is Santa Barbara, such discrimination by the railroads in favor of such points should not lead this Commission to the further extension of what in effect would be a policy of injustice toward those points properly entitled to the advantage of their location and transportation facilities. The complaint will be dismissed.

No. 1219.

COFFEYVILLE VITRIFIED BRICK & TILE COMPANY

2.

ST. LOUIS & SAN FRANCISCO RAILROAD COMPANY AND CHICAGO, ROCK ISLAND & PACIFIC RAILWAY COMPANY.

Submitted November 9, 1907. Decided November 11, 1907.

This Commission can make no general ruling that through rates must not exceed the sum of the locals; each case must be disposed of upon its own merits.

W. H. Buckles for complainant.

F. C. Dumbeck for defendants.

REPORT OF THE COMMISSION.

PROUTY, Commissioner:

The complainant made shipment of one car of brick, weighing 51,200 pounds, from Cherryvale, Kans., to Duncan, Ind. T., over the line of the St. Louis & San Francisco Railroad from Cherryvale to Chickasha, Ind. T., and from Chickasha to Duncan over the Chicago, Rock Island & Pacific Railway. The shipment was a through shipment, and the defendants applied to it their joint through rate of 12 cents per 100 pounds, which was then in effect. The St. Louis & San Francisco

Company had at the time a local rate of 8 cents from Cherryvale to Chickasha, and the Chicago, Rock Island & Pacific Company a local rate of 3 cents from Chickasha to Duncan, making upon the combination a through rate of 11 cents. The complaint is that the through rate should not exceed the sum of the locals.

When the case was called for hearing on October 26, the defendants stated that a joint tariff had been filed by them naming a rate of 11 cents per 100 pounds from Cherryvale to Duncan, to become effective November 19, and an inspection of our files confirms this statement. Thereupon the defendants asked that an order be made in favor of the complainant for the difference in freight between the rate of 12 cents, which was paid, and the rate of 114 cents, and that otherwise the case be dismissed.

The complainant stated that this petition had been filed not for the purpose of securing of securing a refund of the small amount involved in the particular shipment specified, but with a view to obtaining a general ruling of the Commission that through rates must not exceed the sum of the locals.

Plainly, the Commission can make no such general ruling, for while we have often said that, ordinarily, the through rate should not exceed the sum of the locals, we have also several times held in the past with respect to passenger fares that the through charge might exceed the combination of locals; Board of Railroad & Warehouse Commissioners v. Eureka Springs Ry. Co., 7 I. C. C. Rep., 69; Savannah Bureau of Freight & Transp. v. Charleston & Savannah Ry, Co. et al., 7 I. C. C. Rep., 601; Brabham v. Atlantic Coast Line R. R. Co., 11 I. C. C. Rep., 464; Artz v. Seaboard Air Line Ry., 11 I. C. C. Rep., 458; Railroad Commissioners of Arkansas v. St. Louis & North Arkansas R. R. Co., 12 I. C. C. Rep., 233, and have in a very recent case reached the same conclusion with respect to freight rates. Morgan v. Missouri, Kansas & Texas Ry. Co. et al., 12 I. C. C. Rep. 525. The general rule is as contended for by the complainant, but each case must be disposed of upon its own merits.

An order will issue for reparation in the sum of $2.56, that being the difference between the rate of 12 cents, which was charged, and the rate of 11 cents, which the defendant now concedes to have been reasonable.

We also think that an order should be issued establishing the 114cent rate for the future. If, upon service of this complaint, the defendants had filed their answers admitting the unreasonableness of the 12-cent rate, and stating that they had published the proper tariff to put in effect a rate of 11 cents, this, together with an expression of willingness to make reparation for the shipment specified, would probably have amounted to a satisfaction of the com12 I. C. C. Rep.