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it. Complaints allege that inasmuch as defendant indulged in the practice and after discontinuance resumed it that it has committed itself to the unreasonableness of requiring shippers to at any time pay said switching charge, and therefore reparation is asked for switching charges paid during the period when defendant required that such charges should be paid by shippers. The reasonableness of the charge of $3 per car for the service performed is not attacked, and no substantial showing is made as to the difference in commercial conditions which may have obtained at the different times. Held, that to support the contention of complainants in these cases would be to say that transportation charges must in every instance remain at a fixed figure or be reduced by the carrier at the peril of being called upon to respond in damages on all charges that have before that time been collected under the rates so reduced. It is admitted that no discrimination as between shippers was indulged in in the application of the tariff charges and no showing is made in these cases that the tariff charges were unjust or unlawful. Complaints dismissed.

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CLARK, Commissioner:

The complaints in these cases are alike, and it was stipulated by representatives of complainants and defendant that they should be submitted on the record and treated as a whole. They will, therefore, be included in one report.

The facts alleged in the complaints and admitted by the defendant are that prior to December 31, 1903, it was the custom of the defendant to absorb out of its freight earnings a switching charge of $3 per car on coal brought to Kansas City by it and delivered to industries located on the lines of other carriers, this switching charge being the charge made by such other carriers for the service performed by them in making delivery on their tracks; that on January 1, 1904, defendant discontinued this practice, and from that date to June 12, 1905, required shippers to pay said switching charge of $3 per car; that on June 12, 1905, defendant resumed the practice of absorbing this switching charge and continued that practice until December 18, 1906, when its rule was modified to limit such absorption to carloads upon which its net revenue is not less than $15 per car.

Complainants allege that defendant, having discontinued this practice and again resumed it, has tacitly admitted the unreasonableness of the requirement that shippers should pay the switching charge during the period when they were required to make such payments, and reparation is demanded as to the shipments that moved between January 1, 1904, and June 12, 1905.

It is agreed that defendant had in its published tariffs no provision that shippers would be required to pay the switching charge; and it is understood that it did not have any provision in its tariffs that said charge would be paid by it. As before noted, the switching charge was a charge assessed by another carrier for its services, and it was collected by defendant for and turned over to such other carrier, except during the periods when defendant absorbed it—that is, paid it itself instead of requiring shippers to pay it.

The record is not clear as to whether or not shippers had formal notice of the changes in the practice of defendant as to these absorptions. The practice at that time of absorbing switching charges without a specific tariff provision therefor was very general among the carriers. If offense against the law was involved in such practice it would rest in the absorption rather than in requiring shippers to pay, because the switching charge, being the charge of another carrier, should appear in its tariff. No switching or other terminal charges should be absorbed except under a plain and specific tariff provision therefor. No irregularities in tariff construction or application which might affect these cases could be lawfully adjusted by now awarding the reparation prayed for.

As said in cases 1073 and 1074, Laning-Harris Coal & Grain Company v. Atchison, Topeka & Santa Fe Railway, 12 I. C. C. Rep., 479, in the absence of tariff provision to the contrary the transportation rates shown in carrier's tariff to a given point include delivery on its own rails, and if shipper or owner of consignment requires delivery on the rails of another carrier he must pay the lawful charges of that other carrier for its services.

It is not alleged that the charge of $3 per car is unreasonable for the service performed, but it is claimed that the payment should be made by the defendant company and not by the shipper.

To support the contention of complainants in these cases would be to say that transportation charges must in every instance remain at a fixed figure or be reduced by the carrier at the peril of being called upon to respond in damages for all charges that have before that time been collected under the rates so reduced.

No showing of any moment is made as to reasons for the change in practice on the part of this defendant or of conditions which may have led to or influenced its action. It is admitted that during the period when the shippers were required to pay the switching charge the tonnage shipped was less.

The assessment of switching charges upon business to or from competitive points taken from or delivered to a competing carrier is universal. Under tariff regulations carriers now absorb such switching charges or require payment of same by shippers in accordance with the competitive conditions that obtain and the circumstances that surround the transportation.

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 29, 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 transcontinental 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 transporta. tion 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. Atchi8on, 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

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