73 F. 409 | U.S. Circuit Court for the District of Middle Tennessee | 1896
This ca.se had its origin in an informal complaint laid before the interstate commerce commission at the instance of certain citizens of Nashville, upon which, the commission having decided to investigate the matter, an order was made calling upon the defendant for an answer, which was in due time filed before the commission. The commission, under proper orders, directed proof taken in regard to the. questions raised by this answer to the complaint. When the proof was in, the case was heard before the commission, and resulted in a report and order by the commission. The defendant wras directed by this order to make certain changes in its rate of charges on coal traffic from certain mines in western Kentucky to Nashville, Tenn., and particularly the rates from .Earlington, Ky., to Nashville; and, as the principle involved is the same, it will be convenient to refer to Earlington alone as the shipping point in question, it being the principal point of production and shipment. The defendant, denying that this order was a legal and proper one to be made upon the facts, refused to obey the same, and thereupon the commission, pursuant to section 16 of the interstate commerce act, has filed this bill in the United States circuit court for the Middle district of Tennessee to enforce the order and mandate of the commission. The original complaint put before the commission alleged discrimination — First, in favor of Memphis and against.Nashville, in the rates on coal from the Earlington mines; and, second, discrimination in the rates to consumers at Nashville, between persons engaged in certain manufacturing and in running-steamboats and the public generally. The defendant had so readjusted its rates to Nashville pending the investigation, and'before the decision of the case by the commission, that the established rate then was $1 per ton to all persons on that kind of coal known as “run of the mines, nut and slack,” and this rate was uniform the entire year round. On what is called “screened coal” the rate was $1.15 per ton during the period from April 1st to September 1st; while for the remainder of the year, to wit, from September 1st to April 1st, the rate was $1.40 per ton. The rate to Memphis remained just as it was; it being a uniform rate on all coal, and at all seasons, of $1.40 per ton, from the same mines to Memphis. This change in the rate, and in the company’s method of doing business had eliminated from the case, when the commission came to act on it, every disputed question, except that of the alleged discrimination in favor of Memphis as against Nashville; and really all that was then complained of in this respect was the difference in the rate on “screened coal” from Earlington to Nashville of $1.40 per ton from September 1st to April 1st of the year, which, as will appear, was the difference between a rate of $1.15 per ton and $1.40 per ton; and the only order which the commission made affecting the defendant was to reduce the rate from $1.40 per ton to $1.15 per ton, and to make that rate uniform the year round. It will become necessary, therefore, only to consider in this case the order of the commission
“Section 1. *' * * Ail charges made for any service rendered, or to be rendered, in the transportation of passengers or property as aforesaid, or in connection therewith, or for the receiving', delivering, storage, or handling of such property, shall be reasonable and just; and every unjust and unreasonable charge for such service is prohibited and declared to bo unlawful.
“See. 2. That if any common earner subject to the provisions of this act shall, directly or indirectly, by any special rate, rebate, drawback, or other device, charge, demand, collect, or receive from any person or persons a greater or less compensation for any service rendered, or to bo rendered, in the transportation of passengers or property, subject to the provisions of this act, than it charges, demands, collects, or receives from any other person or persons for doing for him or them a like and contemporaneous service in the transportation of a like kind of traffic under substantially similar circumstances and conditions, such common carrier shall be deemed guilty of unjust discrimination, which is hereby prohibited and declared to be unlawful.
“Sec. 3. That it shall be unlawful for any common carrier subject to the provisions of this act to make or give any undue or unreasonable preference or advantage to any particular person, company, firm, corporation, locality, or any particular description of traffic, in any respect whatsoever, or to subject any' particular person, company, firm, corporation, or locality, or any particular description of traffic, to any undue or unreasonable prejudice or disadvantage in any respect whatsoever.”
The only complaint that could be made in regard to the rate in question here would be that such rates violated either section 1, 2, or 8, as above set forth.
Under section 1 the question might be made that a given rate was in and of itself unreasonable and unjust, and in the consideration of such question as this, rates to other places or points of shipment would be unimportant, except as a circumstance or fact in the proof, and having no other than an evidentiary bearing. Under sedition 2 the question of undue discrimination, and under section 3 that of undue or unreasonable preference or advantage, would arise. In determining a question under either or both of these sections it would often, if not always, become necessary to contrast the rates
Next to the last paragraph in the opinion of the commission is exactly the order which it made in the case, and may be safely taken as a condensed statement of its ruling, and this I will give in full, as follows
“Tké rate should be so arranged that, while Memphis is getting a rate as low as $1.40, Nashville should have a rate from the same mines of not more than $1.00 on ‘run of mines, nut and slack,’ and not more than $1.15 ‘screened coal’ at any season. It is therefore ordered that from and after this date, so long as the rate charged by the Louisville & Nashville Railroad Co. for the transportation of coal of any kind or class from the mines on its Henderson & Owensboro divisions in the state of Kentucky-to Memphis shall not exceed the amount of $1.40 per ton, the rate charged by the said company for the transportation from said mines to Nashville of coal classed as ‘run of mines, nut and slack,’ shall not at any time exceed the amount of $1.00 per ton, and the rate charged by said company for the transportation from said mines to Nashville of coal classed as ‘screen coal’ shall not at any time exceed the amount of $1.15 per ton. And any reduction made by the Louisville & Nashville Railroad Co. in the rate for the transportation of coal of any kind or class from said mines to Memphis shall be accompanied by a proportionate reduction in the rates charged for the transportation of ‘run of mines, nut and slack coal,’ and of ‘screened coal,’ respectively, from said mines to Nashville.”
It appears from this that the commission fixed only a relative rate as reasonable for Nashville, having regard all the time to the rate at Memphis. The rate put in effect was clearly intended to be based on and in proportion to the Memphis rate, with the provision that, in the event there should be a reduction in the Memphis rate, there should be a proportionate reduction in the rates charged from the mines to Nashville. Upon what basis the proportionate rate was made between the two places the report again leaves undisclosed, except inferentially. As the case is, the rate established for Nashville depends upon the fortunes of the Memphis rate, and goes up or down with that. This order is wholly inconsistent with the proposition that any decision was made respecting the Nashville rate as béing too high of itself and independently of the Memphis rate. If the rate to Nashville of itself had been under investigation the rates to Memphis were of little value as evidence compared with rates from Tracy City, from Coal Greek and other mines in East Tennessee, from Bon Air at Sparta, and from Alabama mines. Bates from these points, not only to Nashville, but to Chattanooga, Atlanta, and other cities, were readily obtainable from the Southern and other railways on application; and the conditions throughout are so similar that they would be of great value on that question.
For in the report it is observed:
“As between Memphis and Nashville, considering the respective distances of those two cities from the mines in western Kentucky, the rate of $1.00*418 per ton to Nashville does not seem to he low compared with- the $1.40 rate to Memphis.”
In the absence oí a more definite finding and statement of conclusions by the commission, it must be assumed, as I think the result shows, that the commission contrasted the distance at which the two cities are situated from the mines, and also contrasted the difference in rates, and concluded that the Nashville rate was relatively too high, and that this mode of adjusting the rates gave an undue preference, and was a violation of section 3 of the act; and that the commission rested its decision in part, though not entirely, upon this proposition. The entire omission of any finding or com elusion in respect of competing rates at Memphis, and what effect, if any, this circumstance had on the case, leaves no choice but to infer — as I think may be safely done — that the commission excluded entirely from its consideration any question of competition, so far as it related to the only point actually ruled on by the commission, as the case was left when it was called upon to pass judgment. If, therefore, the defendant company had the right to put in issue the question whether or not it was controlled by competing rates at Memphis, and if it was the duty of the commission to take into consideration that element or condition in passing on the case, it becomes apparent that the action of the commission was erroneous in two particulars: (1) In its omission to make any finding at all in regard to the fact of competition; and (2) in its refusal or failure to take into account such competition, and to give the same due consideration, and without doing which it failed to dispose of the leading issue in the case. It is important, therefore, to determine whether the commission was under a legal duty to accept evidence of. competition, and to investigate and decide thereon; for, if such evidence was competent, and was evidence which the commission was required to receive as other evidence, its report and order would be analogous to a court judgment, showing upon its face that the court had excluded from consideration material evidence in the case and had made no response whatever to one of the issues joined. And whether the commission treated the rate which the defendant company had in effect at Memphis as a violation of section 3 or 3 of the interstate commerce act, it seems not now open to doubt that the fact of competing rates was a condition which it must have taken into account, and must have duly considered as evidence in the case, and must have decided whether the company’s defense, based upon that circumstance, was made out or not. In Interstate Commerce Commission v. Baltimore & O. R. Co., 48 Fed. 51, it was pointed out by Judge Jackson that sections 2 .and 3 of our interstate commerce act substantially embody section 2 of the English railway traffic act of 1854, and section 90 of the act of 1845. It was held, too, that the interstate commerce act having thus substantially adopted these provisions, the construction given to such provisions by the English courts must be received as incorporated in the act, and the supreme court of the United States announced the same proposition in Interstate Commerce Commission v. Baltimore & O. R. Co., 145 U. S. 284, 12 Sup. Ct. 844, affirming the judgment below.
“The English eases referred to above, and others that might be cited, establish the rule that, in passing upon the question of undue or unreasonable preference or disadvantage, it is not only legitimate, but proper, to take into consideration, besides tlie mere differences in ('barges, various elements, such as tlie convenience of the public, tlie fair interest of the carrier, the relative quantities or volume of ¡lie traffic involved, the relative cost of the services and proiit to the company, and tlie situation and circumstances of the respective cus lomera with reference to each oilier, as competitive or otherwise. The English decisions cited, and tlie case of Denaby Main Colliery Co. v. Manchester, S. & L. R. Co., 11 App. Cas. 97, 55 Law J. Q. B. 181, further establish that the burden of proving tlie undue preference or tlie undue prejudice rests upon tlie complaining party.’’
And the supreme court, in the same case just referred to, after reviewing' tlie English decision*;,, stated the result as follows:
“In short, the substance of all these decisions is that railway companies are only bound to give the same terms to all persons alike under tlie same conditions and circumstances, and that any fact which produces an inequality of condition and a change of circumstances jusliiios an inequality ol* charge.”
It is lo lie borne in mind that when competition enters as an .element in the determination of a case, this question — whether or not there is an undue preference or advantage — is a question not of law, but of fact. Whether or not the evidence is competent, and must be taken into account, is, of course, a question oí law; but, with the evidence once admitted, tlie issue them becomes one of fact. And so, if the commission ought to have received and taken info account the evidence of competitive rates, its failure to do so was an error of law; as was also its failure to dispose of this issue at all. When the evidence was admitted, the question of undue preference, as stated, is one of fact which should have been found. It may therefore be accepted as the result of the cases in this country that the circumstance of competition is an element which must be considered, and the English oases are now full and clear upon the subject.
It must be stated, too, that questions of this kind must be treated broadly and practically. The carrier’s business is one which involves so many considerations, and tlie necessity of taking info account so many conditions, that questions of this kind do not admit of any rigidly theoretical rules in their solution. It must be kept in mind, too, that the carrier’s business of transporting goods involves the rights of, and the necessity of doing justice to, three parties. The interest of the seller at the point of departure, the rights of (he carrier, and the rights or interest of the trader or consumer at the point of delivery are all concerned in a given transaction, and must be duly considered by a tribunal or court in the decision of any case involving the carrier’s freight tariff. It is entirely conceivable that by taking into account the interest and advantage of the tradei* at the point of delivery alone, serious injury might be done to the trader at the point of departure as well as the carrier, without any substantial benefit to the trader at the point of delivery; or a loss might be inflicted on the trader at the point oí de
There is also, besides the. parties named, the interest of the public concerned in a traffic question like this. The public at large ate greatly interested in competition, — with the more favorable prices which it brings, and, for that purpose, in keeping open the larger markets of the country to all points of production and supply. It is obvious, therefore, that in judicial action upon the question of rates the effect of the ruling must be closely observed, as it thus falls in different directions, and upon different interests, and no one particular interest can properly be considered to the exclusion of others. As the trader at the point of delivery, and who generally pays the rates charged, is the one actively complaining, it generally happens that his interest and that of the carrier are represented before the court, and thus brought out into prominence, and attention directed top exclusively to the proximate, rather than the more distant, results, and ih a given case it may be to interests of relatively small magnitude. I will now refer briefly to two recent English cases involving the construction of the clauses in the English traffic act substantially embodied in ours. In the case of Phipps v. Railway Co. [1892] 2 Q. B. 242, the English court of appeals was considering a case which had been appealed from the decision by the railway commissioners. The statement of the case, so far as is necessary to be now noticed, was as follows:
“The case made by the company was that the comparatively lower rates charged to Butlins and Islip were forced upon them by the competition of the Midland Railway Company; that the lower charge was made bona fide, and was, in the terms of section 27 of the act of 1888, ‘necessary for the purpose of securing in the interest of the public the trafile in respect of which it was made’; that there was still a difference of 6d. a ton in favor of the plaintiffs, and that the plaintiffs had not been injured by the rates charged to Butlins and Islip; and they produced evidence to show that the competition in the South Staffordshire market was such that a difference of Gd. a ton, or even less, in the price of iron of the same quality, would often be enough to secure a contract. The railway commissioners (Wills, .L, Sir Frederick Peel, and Viscount Oobham) held that the London & Northwestern Railway Company, in fixing the rates in question, were entitled to take into account the circumstance that Butlins and Islip had access to another line of railway which was in competition with their own, and that no sufficient case of undue preference had been made out against them. The plaintiffs appealed.”
The court of appeals, in giving its opinion and referring to a previous case, said:
“Is not it a question of fact, and not of law, whether such a preference is due or undue? Unless you could point to some other law which defines what*421 shall be held to- be reasonable or unreasonable, it must be and is a mere question, not of law, but of fact. The lord chancellor there points out that the mere circumstance that there is an advantage does not of itself show that it is an undue preference within the meaning of the act, and, further, that whether there be such an undue preference or advantage is a question of fact, and of fact alone. No rule is given to guide the court or Hie tribunal in the determination of cases or applications made under the second section of the act of 185-1. The conclusion is one of fact, to bo arrived at looking at the matter broadly and applying common sense to the facts that are proved. I quite agree with Wills, J., that it is impossible to exercise a jurisdiction, such as is conferred by this section, by any process of mere mathematical or arithmetical calculation. When you have a variety of circumstances differing in the two cases, you cannot say that such a difference of circumstances represents or is equivalent to such a fraction of a penny difference-of charge in the one case as compared with the other. A much broader view must be taken, and it would be hopeless to seek to decide a case by any attempted calculation.”
And, referring to the matter of mileage as a method of determining what a rate should be, the court said:
“Therefore, what they call attention to as their ground for alleging that there was no undue preference is this: that mileage rale is not, and cannot alone be, the test. That where a train is started or taken from one point to another, there are certain initial charges and certain charges at the other end. I will not call them ‘terminal’ charges, because that is a word used to describe different things, and the use of it often gives rise to misunderstanding and dispute, but certain initial charges, and certain terminating charges, which are constant whatever distance the train has traveled; and that, before comparing the mileage rate, you must in each case deduct those initial and terminating charges, and then, and then only, will the comparison be a fair one. Now, dealing with the matter in relation to Butting alone for the moment, can it be said that the railway commissioners were not entitled to take that circumstance into consideration, and, looking at the distance, and looking at the difference of charge, to say that it was not established to their satisfaction that, there was undue preference, inasmuch as the rail-way company had pointed to circumstances which led them to the conclusion that there was no reason for saying otherwise than that the Cd. fairly represented the difference of charge which might be made without constituting any undue preference or any undue disadvantage? It was on that ground distinctly, on that part of the case so far as the mere difference of charge to Butlins was concerned, that Wills, J., proceeded in his judgment. What lie said may be shortly put thus: ‘It is true that, if you try it merely as a matter of mileage, it is about a half penny as compared with one penny for the distance traveled, but when you eliminate from the charge those constant charges at both ends, which must always exist whatever the distance, when you consider the longer lead there is in the one ease than the other, and when you consider the necessities of the ease which are brought about by the active competition of the Midland, putting all those things together. the difference is not nearly large enough to render it either necessary or desirable that this court should interfere.’”
And, continuing, the court further said:
“Now, there is no doubt that in coming to that determination the court below did have regard to the competition between the Midland and the London and Northwestern, and the situation of these two furnaces which rendered such competition inevitable. If the appellants can make out that in point of law that is a, consideration which cannot be permitted to have any influence at all, that those circumstances must be rigidly excluded from consideration, that they are not circumstances legitimately to be considered, no doubt they establish that the court below has erred in point of law. But It is necessary for than to go as far as that in order to make any way with this appeal, because, once admit that lo any extent, for any purpose, the question of competition can be allowed io enter in, whether the court has*422 given too much weight to it or too little, becomes a question of fact, and not of law.”
And, discussing the question of the trader’s proximity to the market, the court observed:
“Can we say that the local situation of one trader, as compared with another, which enables him, by having two competing routes, to enforce upon the carrier by either of those routes a certain amount of compliance with his demands, which would be impossible if he did not enjoy that advantage, is not among the circumstances which may be taken into consideration? I am looking- at the question now as between trader and trader. It is said that it is unfair to the trader who is nearer the market that he should not enjoy the full benefit of the advantage to be derived from his geographical situation at a point on the railway nearer the market than his fellow trader who trades at a point more distant; but X cannot see, looking at the mattei as between the two traders, why the advantageous position of the one trader in having his works so - placed that he has two competing routes is not so much a circumstance to be taken into consideration as the geographical position of the other trader, who, though he has not the advantage of competition, is situated at a point on the line geographically nearer the market. Why the local situation, in regard to its proximity to the market, is to be the only consideration to be taken into account in dealing with the question as a matter of what is reasonable and right as between the two traders, I cannot understand. Of course, if you are to exclude this from consideration altogether, the result must inevitably be to deprive the trader who has the two competing routes of a certain amount of the advantage which lie derives from that favorable position of his works. All that I have to say is that I cannot, find anything in the act which indicates that when you are left at large (for you are left at large) as to whether, as between two traders, the ‘company is showing an undue and unreasonable preference to the one as compared with the other, you are to leave that circumstance out of consideration any more than any other circumstance which would affect men's minds. I should have said so, and I do say so, upon the act of 180-1, and 1 find nothing in the act of 188S to exclude any such consideration, if it is not excluded by the act of 1851.”
And, treating of tlie railway’s right and motive in the attempt to secure traffic, (lie court said:
“Of course, a railway company endeavors to secure the traffic for its own advantage. That is the motive which operates upon the railway company. Naturally enough they want to secure all the traffic they can in order to do the best trade they can. But I think that the legislature has here pointed out that in considering a question of this sort you are not only to consider the legitimate desire of the railway company to secure traffic, but that you are to consider whether it is in the interest of the public that they should secure that traffic, rather than abandon it, or not attempt to secure it. Of course, many eases might be put where, although the object of the railway company is to secure the traffic for their own purposes upon «their own line, yet, nevertheless, the very fact that they seek by the charges they make to secure it operates in the interest of the public. One class of cases unquestionably intended to be covered by the section is that in which traffic from a distance of a character which competes with the traffic nearer the market is charged low rates, because, unless such low rates were charged, it would not come in to the market at all. It is certain that, unless some such principle as that were adopted, a large town would necessarily have its food supplies greatly raised in prices. So that, although the object of the company is simply to get the traffic, the public have an interest in their getting 1he iraffic, and allowing the carriage at a rate which will render that traffic possible, and so bring the goods at a cheaper rate, and one which makes it possible for those at a greater distance from the market to compete with those situated nearer to it. * * * I cannot but think that a lower rate which is charged from a more distant point by reason of a competing route which exists thence is one of the circumstances which may be taken into account*423 Tinder those provisions, and which would fall within the terms of the enactment quite as much as the case to which 1 have called attention. Suppose That to insist upon absolutely equal rates would practically exclude one of the two railways from the traffic, it is obvious that those members of the public who are in ihe neighborhood where they can have the benefit of this competition would be prejudiced by any such proceedings. And. further, inasmuch as competition undoubtedly tends to diminution of charge, and the charge of carriage is one which ultimately falls upon the consumer, it is obvious that the public have an interest in the proceedings under this act of parliament not being so used as to destroy a traffic which can never be secured but by some such reduction of charge, and the destruction of which would be prejudicial to the public by tending to increase prices.”
And Lindley, L. J., in a concurring opinion, expresses the same view in language as follows:
“Now, the appeal here is put, as it must be put, upon a question of law, viz. whether there is any rule which compels us to say that the commissioners had no right to take into their consideration the fact that Butlins and I slip had two routes oí communication westward instead of one. It appears ro me that there is no such rule, as 1 cannot help thinking it would be extremely unreasonable if there were. Upon what principle of good sense can any business man, or anybody else, exclude from his consideration the locality of either place? If there is a physical difference in favor of one or the other, or any artificial difference, by reason of the facilities of traffic, whether by sea or by land, why is not everything which is material to be taken into account, and upon what principle can it be said that you are to exclude from consideration one of the main elements in the ease? The observations which I have made have no reference to the equality clause. The equality clause imposes a rigid rule, and. putting it shortly, it is to the effect that for the same service the same sum is to be paid. One can understand that. Everything turns upon the words ‘the same.’ The moment the service is not the same, the rule does not apply; and it appears to me that, if the law were to the effect contended for, it would be extremely irrational.” .
So in tho case of Mansion House Ass’n Railway Traffic v. London & S. W. Ry. Co. [1895] 1 Q. B. 932, before the railway and canal commission, the question was one of an unjust advantage or preference as between home and foreign goods, and Collins, J., giving the opinion, and referring to the argument of counsel, said:
“It is obvious that this argument, if accepted, would involve the most momentous consequences; consequences which Mr. Balfour Browne did not dispute. For instance, let us assume that some trader in Southampton made it his business to collect home merchandise of the same description named in the application, and to deliver it to the railway company there at. fixed dates and in large quantities, just as the respondents now deliver foreign merchandise for delivery to London, and was charged by the company the same rate, namely, Cis. a ton. On a complaint by the present applicants impugning such charges as an undue preference, it would be open to the company to justify it by urging all these topics which have been recognized by many decisions, and are sanctioned by subsection 2, such as difference of conditions, reducing the cost, and increasing the profit of the company, the existence of competition by land or water from Southampton to London, and so forth; and if they prove their facts they might be entitled to have their complaint dismissed.”
And another member of Hie commission, giving a sepárale concurring opinion, observed;
“The other alternative would be to raise the shipping rates to the level of the local rates. These shipping rates are charged upon traffic of a highly competitive character, and we may take it that they are fixed at the highest point that is consistent with securing a remunerative share of the traffic. I am not introducing competition to justify the preference, but only as a*424 factor in the result which it seems to me will inevitably follow upon the raising of the Southampton dock rates, namely, the loss of the whole shipping traffic to the railway. A slight increase would probably have this effect; any approximation to the level of the local rates most certainly so. It is not denied that the traffic would go to London by sea all the same, and at the same rates as before. The only difference would be that the railway company would be more or less impoverished, not to the advantage of the farmer, who would gain nothing, but solely to the advantage of the shipping interest, which is not, of course, wholly a British interest. * * * I am of opinion, therefore, that if not by the use of the words ‘same or similar services,’ then by the general sense of the proviso as interpreted by the learned jxxdge, it is intended that in cases where undue preference of foreign goods is alleged, that we should take .into consideration, as we have always been entitled to do in the ease of home goods, the circumstances of the traffic as regards its' quantity, its packing, its regularity, and all other matters affecting its cost to the company, except so far as they may be matters special to the foreign origin of the goods; that is, the limitation impo'sed by the proviso, the object of which is, in my opinion, not to give home traffic a preference over foreign traffic, but to place them in a position of strict equality.”
It thus appears beyond question, without reference to further authorities, that,- in every case where a difference in the rates between two points of shipment is the ground of complaint, a leading and important element in the determination of the question is that of competition or want of competition. It is entirely apparent, too, that other practical conditions are to be taken into account, and that the mileage, while a circumstance to be considered with all the other facts and conditions, is by no means controlling or the most important. As early as 1872 it had been fully demonstrated in England that equal mileage as a basis for settling the difficulty was entirely impracticable. In that year the committee upon the amalgamation of railways reported upon this subject, and the substance of this report is found in the note to the case of Ransome v. Railway Co., 1 Nev. & McN. 63, which was one of the Coal Traffic Cases. In reporting against equal mileage, the committee said:
“(a) It would prevent railway companies from lowering their fares and rates so as to compete with traffic by sea,- by canal, or by a shorter or otherwise cheaper railway, and would thus deprive the public of. the benefit of competition and the company of a legitimate source of profit.
“(b) It would prevent railway companies from making perfectly fair arrangements for carrying at a lower rate than usual goods brought in large and constant quantities, or for carrying for* long distances at a lower rate than for short distances.
“(c) It would compel a company to carry for the same rate over a line which has been very expensive in construction, or which, from gradients or otherwise, is very expensive in working, at the same rate at which it carries over less expensive lines. In short, to impose equal mileage on the companies would be to deprive the public of the benefit of much of the competition which now exists or has existed, to raise the charges on the public in many cases where the companies now find it to their interest to lower them, and to perpetuate monopolies in carriage, trade, and manufacture in favor of those routes and places which are nearest and least expensive, where the varying charges of the company now create competition. And it will be found that the supporters of equal mileage, when pressed, often really mean, not that the rates they themselves pay are too high, but that the rates which .others pay .are too low.”
As has already been seen in tbis case, tbe commission, so far as it rested its decision on tbe difference in rates to Nashville and Memphis, evidently worked out a result by contrasting tbe distance of
“Subject to tlie two leading prohibitions that iheir charges shall not be unjnst and unreasonable, and that they shall not unjustly discriminate so as to give undue, preference or advantage, or subject to undue preference or disadvantage persons or traffic similarly circumstanced, the act to regulate commerce leaves common carriers as they were at common law, free to make special contracts looking to the increase of their business, to classify their traffic, to adjust and apportion their rates so as to meet the necessities of commerce, and generally to' manage their important interests upon the same principles which are recognized as sound, and adopted in other trades and pursuits. Conceding tlie same terms of contract to all persons equally, may not the carrier adopt both wholesale and retail rates for its transportation services? In Nicholson v. Railway Co. (1 Nev. & McN. 147), which involved the ‘undue preference’ clause of tlie act of 1854, Earle, C. J., said: ‘I take the free power of making- contracts to he essential for making commercial profit. Railway companies have that power as freely as any merchant, subject only (as to this court) to the duty of acting impartially without respect of persons; and this duty is performed when the offer of the contract is made to all who wish to adopt it. Large contracts may he beyond tlie means of small capitalists; contracts for long distances may he beyond tlie needs of those whose traffic is confined to a home district; but the power of the railway company to contract is not restricted by these considerations.’ ”
It is no objection to this method of doing business to say that certain persons — for example, large dealers and others whose position enables them to store away quantities of coal — take advantage of such low rates, and supply themselves during the summer months, while others not so situated, or who are engaged in such business as that they aie without motive to do so, will not take advantage of the rates. This is no undue advantage or discrimination which is made by the company, or which results from its method of doing business at all. If such a difference as that suggested results, it
“In Baxendale v. Railway Co. (Reading Case) 5 C. B. (N. S.) 336, 28 Law J. C. P. 81, Cockburn, C. J., alter stating that, if it were made to appear that ihe disproportion [in rates] was not justified by the circumstances of the traffic, the court: would interfere, proceeds as follows: ‘So, again, if an arrangement was made by a railway company whereby persons bringing a large amount of traffic to the railway should have their goods carried on more favorable terms than those bringing a less quantity, although Ihe court might, uphold such an arangement as an ordinary incident, of commercial economy, provided the same advantages were extended to all persons under the like circumstances, yet it would assuredly insist on the. latter condition.’ And, while recognizing the duty on the part of the court, to redress any injustice or inequality prohibited by the law, ho makes the further pertinent observation: ‘At the same time we must carefully avoid interfering, except where' absolutely necessary for the' above purpose, with the ordinary right (subject to the above-named qualifications) which a railway company, in common with every other company or individual, possesses, of regulating and managing its own affairs, either with regard to charges or accommodation as to the agreements and bargains it may make in its particular business.' As regards the ‘undue preference.’ branch of the Knglish acts, the effect of the decision seems io be that a company is bound to give the same treatment to ail persons equally under the same circumstances; but that there is nothing to prevent a company, if acting with a view to its own profit, from imposing such condition as may incidentally have the effect of favoring one class of traders, or one town, or one portion of their traffic, provided the conditions are the same to all persons, and are such as lead to the conclusion that they are really imposed for the benefit of the railway company.”
I am, therefore, without further discussion, clearly of opinion that the defendant railroad company had the right to make it difference in its summer and winter rates on ihe coal traffic. It is to be observed that 1 am not now called upon to pronounce any opinion as to whether either the summer or winter rate is in and of itself just and reasonable, being restricted, as before stated, to an approval or disapproval of the action of the commission.
The commission refers to the fact that the defendant road has been buying coal ai: the Earlington mint's and selling on the Memphis market, and states that, as ihe price of coal is very low at Memphis, it presumes no profit: could he math' on the sale, and assumes that there must be a profit: in the rate of transportation. The presumption that there is no profit in handling coal on the Memphis market
I have considered whether or not, if the result of the commission’s action might be sustained on any ground, I could reopen the case in this court, and allow the plaintiff to introduce proof to show whether or not the rate to Nashville is of itself too high. This could apparently be easily done by procuring the schedule of rates on coal to and from the points suggested herein, where the conditions are similar to the traffic between Earlington and Nashville. Whether I could do so under section 16 of the act is doubtful. As, in any event, I would be without power to substantially change the order made by the commission, and as I do not think that order is a lawful and proper one, I have concluded that it is best to decide the case upon the record as now made up. An objection is made to the form of the order, in that it is made in terms to operate indefinitely in the future without any reservation of the power of change or modification such as changes in traffic conditions might make absolutely necessary. It is argued that, if the order of the commission were made the judgment of this court, it would become a bar to any change in the future. I cannot, however, concur in this view. The order of the commission is essentially an administrative one', and is not final or conclusive in the sense of a court judgment or decree, and the order of this court is one merely to give effect to the order made by the commission, and does not change its character or make it a final judgment. There are no private vested rights in the order of the commission, or that of this court, such as exist in a regular judgment or decree of this court. And, if necessity should arise for a change in the tariff of rates, no reason is perceived why the carrier might not make this on notice to the commission under the act of congress, just as such carrier is permitted to do in regard to the published rates filed with the commission. But there exists another objection to the form of this order which goes deeper. I pass by now the very serious question of the commission’s power to make rates at all. It has been seen that the order of the commission does not put in effect a rate at Nashville complete in itself, but only a schedule measured by the Memphis rate, and depending for its continuance or discontinuance, and for any modification or change, on the Memphis rate. If a change should be made in the rate to Memphis, it would be open to the Nashville trader under-this order to complain that such change was arbitrary and unreasonable, and this would devolve on the commission, and next on the court, the duty of .an examination and decision of the Memphis rate upon its own merits. So, too, if the trader at another point or place in the state should, complain that the rates to the trader at Nashville violate the act, or the trader at Nashville should complain of discrimination in-rates to the trader at another place in the state, the question in
After the foregoing opinion was written it was withheld until the opinion in Cincinnati, N. O. & T. P. Ry. v. Interstate Commerce Commission (known as the “Social Circle Case”) 16 Sup. Ct. 700, could be seen, the decision of the case having just been announced. That opinion is now before me, and with it also the opinion in Texas & P. Ry. Co. v. Interstate Commerce-Commission, Id. 666. I find nothing in these cases which seems to call for any change or modification of the opinion as already written. On the contrary, so far as the same points were considered, these cases furnish authoritative confirmation of the conclusions readied from a study of the issues in advance of the light thrown upon the subject by these instructive cases. The Social Circle Case denies power in the commission to fix rates, and puts that question at rest. And the opinion in Texas & P. Ry. Co. v. Interstate Commerce Commission fully supports the proposition that in the determination of a question arising under sec-lions 2 or 3 of the interstate commerce act, as between different places, the condition of competitive rates is an element which the commission must take into consideration, and that it is a material issue in the case which the commission is not at liberty to disregard.