TEXAS & PACIFIC RAILWAY CO. ET AL. v. UNITED STATES ET AL.
No. 1
Supreme Court of the United States
Decided May 29, 1933
Argued October 12, 13, 1931. Reargued October 11, 12, 1932.
289 U.S. 627
These views render unnecessary any consideration of the merits of the controversy.
Judgment affirmed.
TEXAS & PACIFIC RAILWAY CO. ET AL. v. UNITED STATES ET AL.
No. 1. Argued October 12, 13, 1931.—Reargued October 11, 12, 1932.—Decided May 29, 1933.
Mr. Luther M. Walter, with whom Messrs. John S. Burchmore and Nuel D. Belnap were on the brief, for the New Orleans Joint Traffic Bureau et al., appellants.
Mr. Wylie M. Barrow, Special Assistant to the Attorney General of Louisiana, with whom Mr. Percy Saint, Attorney General, was on the brief, for the State of Louisiana, intervener-appellant, on the original argument. Mr. Barrow also reargued the cause, and with Mr. Gaston L. Porterie, the then Attorney General of Louisiana, filed a brief on behalf of the State.
Mr. Edward R. Schowalter filed a brief on behalf of the Louisiana Public Service Commission, intervener-appellant.
Mr. Daniel W. Knowlton, with whom Solicitor General Thacher and Assistant to the Attorney General O‘Brian, were on the brief, for the United States and Interstate Commerce Commission, appellees.
Mr. R. S. Outlaw, with whom Messrs. C. S. Burg, Fred L. Wallace, G. B. Ross, E. E. McInnis, and Joseph M. Bryson were on the brief, for the Missouri-Kansas-Texas R. Co. et al., appellees.
Mr. R. C. Fulbright, with whom Messrs. James V. Allred, Attorney General of Texas, Elbert Hooper, Assistant Attorney General, Mart Royston, Fred N. Oliver, and John C. White were on the brief, for the Galveston Chamber of Commerce and the State of Texas et al., intervener-appellees.
By leave of Court, Messrs. Samuel Silverman and A. Henry Walter filed a brief on behalf of the City and Port of Boston, as amici curiae.
MR. JUSTICE ROBERTS delivered the opinion of the Court.
The Galveston Commercial Association complained to the Interstate Commerce Commission that carload commodity rates on import, export and coastwise traffic between a portion of western classification territory and Galveston were unreasonable, and their relationship with those to and from Houston, Texas City, Beaumont, Port Arthur, and Orange, Texas, and New Orleans, La., was unduly prejudicial to Galveston.1 The claim of unreason
The Commission found that export and import rates on fourteen commodities from or to points in Arkansas, Texas, Oklahoma, southern Kansas, and Louisiana west of the Mississippi River, were unduly prejudicial to Galveston, and unduly preferential of New Orleans. In all instances where the distance to Galveston is less than the distance to New Orleans by not over one hundred miles it permitted equal rates; but for differences in distance exceeding one hundred miles it prescribed certain named minimum differentials in favor of Galveston.2
On rehearing the prior decision was modified by including the other Texas ports with Galveston in the finding of undue prejudice; substituting a twenty-five per cent. difference in distance for the 100-mile basis; exempting from the scope of the order rates to or from points on the Texas & Pacific and the Louisiana Railroad & Navigation Company;3 exempting rates on petroleum
The proceeding was later reopened for the purpose of deciding whether the Texas & Pacific and the L. R. & N. should continue to be exempted. The Commission reversed its previous finding and included them within its orders.5 Both carriers filed bills in the District Court to enjoin the enforcement of all the orders except in so far as the second exempted them from the finding of preference and prejudice. The cases were consolidated, and upon final hearing before three judges the bills were dismissed.6 The plaintiffs, Texas & Pacific and L. R. & N., and also the State of Louisiana, the New Orleans Traffic Bureau and other intervenors appealed.
The Texas ports are served by some half dozen lines which either themselves or through their connections reach the areas of origin or destination embraced in the Commission‘s order. Generally speaking their routes trend north rather than east of Galveston. The Southern Pacific is the only carrier serving both Galveston and New Orleans. Texas is also connected with New Orleans by the Gulf Coast Lines, by the Texas & Pacific, extending east from El Paso through Dallas and Fort Worth to Shreveport, La., and thence southeast to New Orleans, and by the L. R. & N., which connects eastern Texas and western Louisiana with that port. Several other lines extend between New Orleans and western Louisiana, Arkansas, Kansas, and Oklahoma.
With minor and immaterial exceptions the carriers serving the Texas ports and New Orleans have for many years equalized the import and export commodity carload rates between the territory embraced in the Commission‘s orders and Galveston and New Orleans. The gravamen
“It shall be unlawful for any common carrier . . . to make or give any undue or unreasonable preference or advantage to any particular person, company, firm, corporation, or 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.”9
The appellants contend that in the circumstances disclosed the ports as such are not localities preferred or
The cause has been twice argued; it was first presented at the October Term, 1931, and on account of the importance of the questions involved a reargument was ordered and was had at the October Term, 1932.10 Statement of certain facts and settled principles will tend to clarify and define the issues presented.
The traffic with which we are concerned does not move on through bills of lading, but the movement is, nevertheless, from points of origin to a foreign or coastal destination, or vice versa, and is, therefore, essentially through transportation. Compare Binderup v. Pathe Exchange, 263 U.S. 291, 309. As the Commission said in this case, “A port is neither the destination nor the origin of traffic passing through it. It levies toll on the traffic, in substantially the same manner as do common carriers, in its charges for the use of its facilities in the transfer of traffic between the rail and water carriers.”
The choice of route is determined solely by the rail rates from or to the ports. If these are equalized the shipper has an option; but if they are disparate the route through the port taking the higher rate is necessarily excluded. A very slight differential in the rail rate, in some instances as little as a fraction of a cent per hundred pounds, will divert the traffic through the port so advantaged. The application of a distance scale to the rail rate automatically precludes shipment through the more distant port.
Long prior to the passage of the Act to regulate commerce the railroads, recognizing this situation, and desiring to hold to their own lines the traffic running to ports which they served, equalized rates through the ports reached by their own lines with those maintained by their rivals to other ports, or established differentials in favor of their own ports in order to retain a portion of the competitive export business. And a carrier serving two ports has for like reason fixed an equal or lower rate to the more distant of the two, solely to meet the competition of rivals who reached it by more direct routes. These practices have not been indulged either to aid or to harm a port as such, but solely to obtain or retain business for the carrier‘s own line.12 With the abstract fairness of such ad
The theory of the Act is that the carriers in initiating rates may adjust them to competitive conditions, and that such action does not amount to undue discrimination; Texas & Pacific Ry. Co. v. Interstate Commerce Comm‘n, 162 U.S. 197. There the charging of rates on import traffic moving from a port on through bills of lading, much lower than those fixed for domestic transportation, was held not to amount as matter of law to discrimination forbidden by
While the carriers may, therefore, meet competition by equalizing rates or maintaining differentials both to interior points and to ports, they may not adjust their rates with the motive of injuring or aiding a shipper, a particular kind of traffic, or a locality, for so to do is to depart from the transportation standard, conformity to which the Act contemplates, and substitute others which are prohibited. A tariff published for the purpose of destroying a market or building up one, of diverting traffic from a particular place to the injury of that place, or in aid of some other, is unlawful; and obviously, what the carrier may not lawfully do, the Commission may not compel. Southern Pac. Co. v. Interstate Commerce Comm‘n, 219 U.S. 433, 444; Interstate Commerce Comm‘n v. Diffenbaugh, 222 U.S. 42, 46; Ellis v. Interstate Commerce Comm‘n, 237 U.S. 434, 445; United States v. Illinois Central R. Co., 263 U.S. 515, 524; Atchison T. & S. F. Ry. v. Interstate Commerce Comm‘n, 190 Fed. 591; Anchor Coal Co. v. United States, 25 F. (2d) 462, 471.16
Considered as points of origin or destination any or all of these are localities within the purview of the section.
The legislative history of the Act demonstrates that Congress did not intend to forbid the equalization of export or import rates by lines serving several ports in order to meet competition. These rates, it was said, were not to be proportioned to the respective distances between inland origins or destinations and the ports.18 Both
Appellees say, however, that the Commission has always treated ports as localities within the meaning of
Moreover we do not find that any such settled construction had been adopted or that Congress intended to sanction it. With few and occasional exceptions the Commission has not until a recent date essayed to prescribe differentials in export rates. Prior to the Hepburn Amendment in 1906, port differentials were considered in three cases.19 In the first certain carriers applied for leave to equalize their export rates to Boston with those charged to New York. The petitions were dismissed on the ground that the Commission should not authorize what the carriers might lawfully do without permission. In the second, a New York trade association complained that the maintenance of differentials in export rates to Philadelphia and Baltimore voluntarily established by the carriers worked undue prejudice against New York. The Commission found they did not result in undue prejudice; though it treated the ports as localities which would be entitled to relief under a proper showing. In the third case shippers and carriers serving north Atlantic ports submitted to the Commission the question of the fairness of the current differentials, and that body acted merely as an arbitrator and not in its official capacity.
The legislative history of the Hepburn amendment discloses a clear intent not to confer power to circumscribe the adjustment of export and import rates by the carriers to meet competition.20 The expressions used disclose
Between the dates of the Hepburn amendment and the Transportation Act, 1920, the Commission had before it two cases relevant to the power to prescribe port differentials.22 In the first the Commission recognized its lack of power to deal with the relationship of the rates.23 In
We think that at the date of the passage of the Transportation Act, no such administrative practice had been established as to require the conclusion that in failing to amend
It remains to determine whether since 1920 there has been such a uniform and repeated assertion of this authority as would constrain us to adopt the principle. The instances in which the Commission has considered export and import traffic fall into several classes: First, where shippers’ complaints concerning port differentials established by carriers were dismissed,25 or were found justified and prejudice ordered removed;26 secondly, where, on
We conclude that ports as such are not localities with respect to export and import traffic routed through them, susceptible of undue preference or prejudice within the intent of the Act.
While the Commission‘s jurisdiction of port rate relation was fully argued, the appellees seek to support the orders under the power to abate discrimination between persons and shippers. The argument is based upon averments of the complaint as to prejudice of persons at Galveston. There is, however, no allegation that shippers or consignees in the interior, are prejudiced or preferred by the equalization of the New Orleans rates with those to the Texas ports, and the Commission made no finding of preference or prejudice of shippers or consignees, or localities of origin and destination.30 It compared at great
“We find that the present relationships of the assailed rates on export, import, and coastwise traffic, . . . are unduly prejudicial to Galveston and unduly preferential of New Orleans.” (100 I.C.C. 122.)
In its second report it stated:
“We find that the present parity of rates as between the Texas and Louisiana ports . . . does not result in substantial injury to the Texas ports in respect of
petroleum and its products, but does result in substantial injury to and prejudice against the Texas ports in respect of the other commodities considered.” (128 I.C.C. 388.)
And finally:
“Upon further consideration we now find . . . that the present relationships of the assailed carload rates on export, import and coastwise traffic . . . are, and for the future will be, unduly prejudicial to Galveston and the other Texas ports taking the same rates, and unduly preferential of New Orleans.” (160 I.C.C. 359.)
The action of the Commission cannot be justified upon any theory that it was protecting shippers and consignees, who would naturally desire all possible routes for foreign shipment. On the contrary, the orders prohibited a practice born of competition, and not proved to involve a loss of revenue to the appellants. The plain purpose of the orders was to build up the Texas ports by diverting export and import traffic to them. As we have shown,
The Commission‘s action is challenged for another, and wholly independent reason, which, if sustained, also requires a reversal of the decree. By its second order the Commission excluded the Texas & Pacific and the L. R. & N. from its findings of undue preference and prejudice and exempted them from the requirement as to differentials. The Texas & Pacific had been included by the first order on the theory that it was part of the Missouri Pacific system which served both New Orleans and the Texas ports. Upon rehearing the conclusion was that the line was independently operated. Exemption was thereupon granted both appellants pursuant to a rule which the Commission had consistently followed since its organization: namely, that a carrier may not be held responsible for undue prejudice or preference unless both of the localities affected are upon its lines, or it effectively participates in the rates to both. In the final report these roads were
The line of the Texas & Pacific in Texas is intersected at intervals of about 40 miles by north-and-south lines directly or indirectly serving the Texas ports. The population of these junction points is over ten times as great as that of all other open stations on this appellant‘s line in Texas, and the greater volume of export and import traffic originates and terminates at the junctions.33 Thus the question is whether the Texas & Pacific may continue to participate in the handling of the traffic moving through the ports to and from points on its own rails, on an equality of rates with competing lines which extend to the Texas ports, or may be forbidden so to do because it is a party with the competing carriers to joint rates from stations on its own line to the Texas ports. The same issue is presented with respect to the L. R. & N. Neither of the appellants controls the rates to the Texas ports and the Commission so finds.34 Though the Texas port lines can reduce their rates to and from those ports without the concurrence of the New Orleans lines, no reductions can be made in those rates by the New Orleans lines,
The classical case of discrimination in rates is presented where a single carrier serving two points approximately equidistant from a common origin on the carrier‘s line, exacts unequal rates for the two hauls. Not only is the prejudice obvious, but equally so the ability of the carrier to abate it by raising the rates to the point enjoying the lower rates, or decreasing those to the point subject to the higher charge. The principle comprehends, as well, instances of joint rates where the same carriers participate in the rates to both points,35 and where the originating (or delivering) carriers are different, but the delivering (or originating) carriers are the same.36 So, too, a carrier may be responsible for preference or prejudice where it participates in one of several through routes between point of origin and the prejudiced destinations, although its own line may reach only one or neither of the latter, St. Louis S. W. Ry. v. United States, 245 U.S. 136, for the discrim
The principle has been approved in decisions of this court with respect to practices, Interstate Commerce Comm‘n v. Diffenbaugh, 222 U.S. 42; Central Railroad of New Jersey v. United States, 257 U.S. 247, and rates, East Tenn. V. & G. Ry. Co. v. Interstate Commerce Comm‘n, 181 U.S. 1; Penn Refining Co. v. Western N.Y. & P. R. Co., 208 U.S. 208, 221.
In the Central Railroad case it was said (p. 259): “But participation merely in joint rates does not make connecting carriers partners. They can be held jointly and severally responsible for unjust discrimination only if each carrier has participated in some way in that which causes the unjust discrimination; as where a lower joint rate is
In the East Tennessee case the court said (p. 18):
“The prohibition of the third section, when that section is considered in its proper relation, is directed against unjust discrimination or undue preference arising from the voluntary and wrongful act of the carriers complained of as having given undue preference, and does not relate to acts the result of conditions wholly beyond the control of such carriers.”
The appellees contend, however, and the Commission concluded that in later cases the court has held the principle inapplicable in circumstances so like those here exhibited that it should not control our decision in the instant case. One of these is St. Louis S. W. Ry. Co. v. United States, 245 U.S. 136, cited for the proposition that the Commission has power to prevent carriers which participate in rates from blanket territory from discriminating against a particular destination, although one of them does not with its own lines reach such destination, but bills through traffic to it over connecting lines. The order there under review was for the establishment of a reasonable joint rate, or in the alternative new through routes with joint rates, under
Chicago, I. & L. Ry. Co. v. United States, 270 U.S. 287, is relied upon because of the statement in the opinion [p. 293] that “Wherever discrimination is, in fact, practiced, an order to remove it may issue; and the order may extend to every carrier who participates in inflicting the injury.” This was said with respect to a mandate to three carriers serving Michigan City, each of which had refused to enter into interchange arrangements with an electric railroad. Their lines did not connect directly with the electric line, but required for interchange the service of an intermediate switching carrier. The order of the Commission was held proper because each defendant railroad was solely responsible for the prejudice resulting from its own refusal to maintain interchange arrangements with the electric line, and for the preference of maintaining such arrangements with other carriers at Michigan City. Each could, without reference to the conduct of any other, correct the unjust discrimination which it individually practiced. The very question here is whether the New Orleans lines in fact control the rates to the Texas ports and the Commission has answered it in the negative.
Principal reliance is placed upon United States v. Illinois Central R. Co., and Wyoming Ry. Co. v. United States, 263 U.S. 515. In the first it appeared that the Illinois Central equalized rates on lumber to certain destinations from all its main and branch line points in blanket origin territory, and from points on certain independent short lines within the blanket area, but refused
In the second case it was shown that the Burlington published a blanket rate on lumber to destinations on a portion of its main line and to points located on its branch lines, but refused to join in an equal rate to a point on an independent branch line connected with the blanketed portion of the main line. The service to the latter point at the higher combination rate was less than was rendered to points on the Burlington‘s branch lines. The Commission ordered both carriers to abolish the undue preference and prejudice.41
It will be noted that in the one case the Illinois Central and in the other the Burlington made the one rate and was a party to the other. Not only so, but in each case the trunk line carrier controlled the joint or combination rate to or from the prejudiced locality. Quite clearly the independent line could not equalize that rate with the one in force to the preferred locality without the concurrence of the trunk line. Both railroads joined in the bill to enjoin enforcement of the order in the Illinois Central case, but only the independent carrier filed the bill in the Burlington case.
The appellees insist that as the orders ran against the independent road as well as the trunk line, and this court refused to set them aside, it necessarily follows that a carrier may be liable for unjust discrimination by virtue of its mere participation in one of the rates whether or
We find nothing in any of the decisions which renders inapplicable the principle upon which the Commission has acted, with the approval of this court, for more than forty years in the administration of
The conclusions announced render it unnecessary to consider the other questions pressed by the appellants.
The judgment must be reversed and the cause remanded to the District Court for further proceedings in conformity with this opinion.
Reversed.
MR. JUSTICE STONE, dissenting.
The Interstate Commerce Commission, acting under
Stated generally, the discrimination complained of is the maintenance of rates by the rail carriers which give no recognition to the proximity of Galveston and other Texas ports to the interior points involved. The rates thus deprive the Texas ports of the natural advantage of their geographical position over that of a rival port, New Orleans; and as the commercial advantages of New Orleans exceed those of the Texas ports, the rates result in the diversion of traffic to the former from territory normally tributary to the latter. The Commission found that although the length of haul from the interior shipping
In holding that the Commission is without power to make the order, the Court does not deny that a discrimination which is produced by charging equal rates for unequal service is prohibited by the statute as much as one resulting from unequal rates for equal service. Compare The Shreveport Case, 234 U.S. 342, 346. Nor does the Court consider material, in this respect, the findings
First. The Court holds that this power is lacking because the locality injured by the discrimination, a port, is neither the origin nor the ultimate destination of the traffic involved, but a gateway through which it passes, albeit it is arrested there pending its transshipment upon a new and independent contract for ocean transportation. It is said that a gateway is not a “locality” within the meaning of the Act because it was never intended that the statute should forbid discrimination against localities which are not points of origin or ultimate destination, however unreasonable and unjust the discrimination may be.
I can find nothing in the purpose or history of the statute which suggests that it means any less than it says. This Court has often declared that the purpose of the all-embracing language of the statute was to suppress every form of unreasonable discrimination which it was within the power of Congress to condemn. Merchants Warehouse Co. v. United States, 283 U.S. 501, 512; Louisville & Nashville R. Co. v. United States, 282 U.S. 740, 749-750; The Shreveport Case, supra, 356; Louisville & Nashville R. Co. v. Mottley, 219 U.S. 467. It has said that discrimination was the principal thing aimed at and “the
Statutory language so unambiguous and a purpose so comprehensive do not readily yield to the conclusion that a locality which is a port is not a “locality” within the meaning of the Act. The bare fact that a port is a gateway and not the ultimate destination of the traffic, does not support that conclusion, for the commercial interests of a port, always of great magnitude, may suffer the same destruction from discriminatory rates as do shippers or other industrial interests at points of origin or destination. A rate structure which diverts from one port to another a portion of the ocean-borne traffic, which would otherwise naturally pass through the former, sufficient to destroy the business of banks, marine insurance companies, freight forwarders, freight and ship brokers, stevedores, tonnage companies, pilots, dry docks, ship supply and bunker coal merchants, customs brokers, export and import commission houses, centered there, would seem to have an effect upon the commerce and general welfare of the country of precisely the kind which the act was intended to prohibit and the Commission empowered to prevent. So the Commission has concluded in a series of cases dealing with discrimination against ports, going back to the first years of its existence. See N. Y. Produce Exch. v. B. & O. R. Co., 7 I.C.C. 612, 658, 660; In re Export and Domestic Rates, 8 I.C.C. 214; In re Differential Rates, 11 I.C.C. 13; Chamber of Commerce of N.Y. v. New York Central, 24 I.C.C. 55, 27 I.C.C. 238; Astoria v. S. P. & S. R. Co., 38 I.C.C. 16; In re Import Rates, 24 I.C.C. 78; New York Harbor Case, 47 I.C.C. 643; Mobile Chamber of Commerce v. Mobile & O. R. Co., 57 I.C.C. 554; Coffee from Galveston and other Gulf Ports, 58 I.C.C. 716; 64 I.C.C. 26; G. S. R. Co.” cite=“89 I.C.C. 501” court=“unknown” date=“unknown“>Charleston Traffic Bureau v. Ala. & G. S. R. Co., 89 I.C.C. 501; Maritime Assn. of Boston v. Ann Arbor R. Co., 95 I.C.C. 539; Oswego v. B. & O. R. Co., 151 I.C.C. 717.
This administrative practice and construction cannot be dismissed with the observation that where “a statutory body has assumed a power plainly not granted no amount of such interpretation is binding upon the court,” for the question obviously is whether or not a power was granted which the language of the statute plainly embraces and which certainly was not plainly denied. In determining that question when the meaning of the statute is doubtful on its face, we have often said that administrative construction is of persuasive force, see United States v. Chicago North Shore & Milwaukee R. Co., 288 U.S. 1; N.Y., N.H. & H.R. Co. v. Interstate Commerce Comm‘n, 200 U.S. 361, 401, particularly where, as here, the statute has been frequently amended and the provision relied upon retained in identical form. Compare Brewster v. Gage, 280 U.S. 327, 336; National Lead Co. v. United States, 252 U.S. 140, 147. This construction certainly cannot be summarily disregarded in favor of another which departs both from the plain meaning of the words and from the policy which has hitherto been thought to have inspired their use.
To support such a departure it is said that as the railroads, before the enactment of the statute, had in some instances attempted to equalize competing ports by setting up a rate structure which did not conform wholly to the carrier service involved, and as Congress, in the
The port differentials and equalizations maintained prior to the passage of the original act, in order to secure
“Such an adjustment necessarily disregards distance and commercial instead of natural advantages control. We have consistently refused to condemn such an adjustment where it is shown to serve the best interests of the public, but where, as here, it builds up one port at the expense of another equally favored by natural advantages from the origin territory here considered, a line must be found beyond which distance may not be disregarded.”
This language of the Commission appears to me to suggest the only reasonable interpretation of the statute consonant with its language, its history and its background. The statute does not command or the Commission‘s order
Close scrutiny of the legislative history of the original act and of the Hepburn Amendment fails to disclose any intention to except from the forbidden discriminations against localities, undue or unreasonable discriminations against ports. Senator Cullom, who was in charge of the earlier bill, made no reference to the present question in his explanatory statement,3 cited in the opinion of the
of more for a shorter than a longer distance over the same line under substantially similar conditions, would not eliminate port differentials, then in existence, favoring Boston: “. . . if we are going to regulate these corporations at all, if we are going to stop unjust discriminations and the secret rebates by which towns are built up and towns are destroyed, by which individuals are destroyed and individuals are built up, we must have something in the bill which will mean something, or else we might as well lay the bill on the table and go at other business.” (Cong. Rec., 49th Cong., 2d Sess., vol. 18, pp. 485, 486.) Compare his statement in discussing the conference report: “It has been said over and over again here that the railroad companies would build up one man and crush another; that their policy has been to destroy one locality or city and build up another. Here we have undertaken to so regulate them as to prevent them from doing those things so far as we can do so.” (Cong. Rec., 49th Cong., 2d Sess., vol. 18, p. 660.)
Second. The Court also holds that even if a port is a “locality” within the meaning of the statute, and prejudicial discriminations against it are forbidden, still the Commission is without power to order the Texas & Pacific R.R. Co. and the Louisiana Railroad & Navigation Com-
tion 3 is unjust under the provisions of this bill, and such will be prohibited; but we will not allow the making of a minimum or absolute rate, which is the only adequate way of controlling a differential.” Cong. Rec., vol. 40, p. 2085. It does not appear that Mr. Mann‘s statement (Cong. Rec., vol. 40, p. 2247) quoted by the Court (note 20) was intended to have any different meaning. Indeed his reference to ports and to “cities” would seem to indicate that he did not believe that ports were in any different position with reference to differentials than points of origin or destination. See also Cong. Rec., vol. 40, p. 3792, and compare the remarks of Senator Lodge, Cong. Rec., vol. 40, p. 4111, which indicate, if anything, his belief that the differentials between Boston and other Atlantic ports were within the control of the Commission. It was also pointed out that relative rates on different roads were not within the control of the Commission. In discussing differentials, Senator Raynor pointed out that the provisions of the bill “are limited to discriminations upon the same roads. The words ‘unjustly discriminatory’ or ‘unduly preferential’ or ‘prejudicial’ apply to rates and regulations and practices upon the same road, because there can be no such thing as an unjust discrimination or an undue preference between different roads supplying different territory and terminating at different points. . . . If one road charges an un-
The Commission may, in directing the removal of a discriminatory rate or practice, not otherwise objection-
reasonable rate or a discriminating rate, that would surely not justify the Commission‘s adjusting the rate between this road and some other road that has no connection with it by law or privity of contract. . . .” (Cong. Rec., vol. 40, p. 6683.) Read in the light of this statement, there is nothing to support the conclusion of the Court in the other statement of Senator Raynor referred to in the opinion (note 20) that there is no “power whatever in the Commission to adjust relative rates and strike the proper proportions between them. The ports of the United States, therefore, are not within the jurisdiction of the Hepburn Act. If there is a differential between different ports upon different lines of railroads, there is no provision in this measure that invests the Commission with the right to change it. It has a perfect right, of course, where discrimination exists upon the same line, as if a rate to an inland point compared with a rate to a terminal point is unreasonable or unjustly discriminatory, to prescribe a maximum rate; but it has no right to bring competitive roads struggling for competitive markets within its jurisdiction, and I deny in its entirety the proposition that the Commission could by any exercise of its power, direct or inferential, take away from any railroad its right to charge its own rates, unless the rate is unreasonable or unduly preferential or discriminatory upon its own line.” (Cong. Rec., vol. 40, p. 3792.)
But the statute does not compel the Commission to afford such an alternative or permit an offending carrier to avoid its salutary provisions merely for the reason that, although participating in both the offending rates, it can with certainty control only one. It is true that in cases arising before the enactment of
The situation here appears to be identical with that presented to this Court in United States v. Illinois Central R. Co., supra, and in St. Louis Southwestern Ry. Co. v. United States, supra. In both cases the carriers’ rails reached one of the competing points only through its connections. In the first the order leaving the carrier free to remove the discrimination by raising one rate or lowering the other, and in the second an order requiring the carrier to remove the discrimination by establishing a lower joint rate with its connections, was upheld by this Court. In St. Louis Southwestern Ry. Co. v. United States, this Court said, page 144:
“Carriers insist also that the order is void on the ground that, since their ‘rails do not reach Paducah, they cannot be guilty of discrimination against that city.’ They, however, bill traffic via Cairo or Memphis through to Paducah in connection with the Illinois Central, thus reaching Paducah, although not on their own rails. And, thereby, they become effective instruments of discrimination. Localities require protection as much from combinations of connecting carriers as from single carriers whose ‘rails’
reach them. Clearly the power of Congress and of the Commission to prevent interstate carriers from practicing discrimination against a particular locality is not confined to those whose rails enter it.”
The judgment should be affirmed.
The CHIEF JUSTICE, MR. JUSTICE BRANDEIS and MR. JUSTICE CARDOZO concur in this opinion.