190
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88 rEDERAL,
tended,to sh9'Y that they places of business. by to :l!;tthsse points by reason of the;,flUan:tarate. The evidfPnce for wail f9r the purpose .of !;lAOwing, and that the _ rate to is the result qfactive competition.; ",ate tp"tpl'!,local'statiQIlfil named & were in and of themselves; als.o ·that a ·lower rate: tOr il;b,e local stations would not materially affect the amQupt, goods carried to those stations,or the voillrileof business trani'ltlcted. The testimony ,is :of considerable length, and no attempt will to quote from. the evidence for either side except from wit1l;ess out of a number, as, to competition the Mr.J. M. Culp, the traffic manager of the Southern Railway, was a witness for the defendants, and the following extract is ,taken from hjs testimony, by questions and answers: a controlled by any, alld, If. so, to what, extent, ,.by competition. A.. They .nreentirel:r <;ontrolled by competition. They are controlled by competition the themselves, the railroads leading from the Ohio river themselves, .and controlled by' competition from the Eastern seliboard. The .adjustment otrlltes on certain cif the classes Is 'based, upon the same rates from Cincinnati to. Atlanta ali! ,from Baltimorll'to Atlanta.. Xb,ls Is not true -of ,<all claslSes,.,but It is true of,'anumberot classes. Q..State whether there is any such C9mpetition at' .Calhoun,Adalrsvllle, KingstOn, CarterSVille, A.cworth, and Marietta as :exists 'at Atlanta, Georgia. A,' There Is not the 'same competltlon. There Is competition existing up to Cbattanooga,-strong eompetltion;and the rates fixed by that competlti9n are used In making rates to these IOcaJ,:lltations. As Ihaye before testlij,ed,to .these COIllpetltlve rates up to are added the rates ,,:hlch lire the same the same distance as the rates 01' the Georgia co:tnmlsslon."" , . , . "i I
RaHroil9. ,. at
"Q. State whether the rates of freight from Qhio river points to Atlanta
While the testimony l'wmewhat,' the above is in line with the on the testimony of all the witnesses for the defendants who subject. The present ca.se was heaI,'d and decided by the interstate commerce commission in 1892. At that time there had been no authoritative !ietermination of the question as to whether or not competition at a Io;nger distance point would render the carriage of freight to such poin,t dissimilar circu,mstances and conditions fromtbose,eDsting at a shorter distance point within the meaning of the .fourtll.!;lection of the act to reg'1fate commerce: Since that time several cases have been before the court, and the question thoroughly discussed. It appea'rs to be !lOW finally settled by the decision the suprem(l cOTlrt in the case of Commerce Commission v· .A.lllbama M. Ry. Co., 168U. S. 144,18 Sup. Ct. 45; In that case the substance the decision by tbe court may be gathered from a headnote as follows:, .. "Competition Is one of the most and etl'ectlveclreumstances that the under wq.i,sh a long and short haul)1\ stantJally dlssIIl;l\lar, and as must, hllve. In tb;econtemplatlon of congress In the passage of the llCt to regUlate 'C\?lilmerce; This Is -no longer anopen'questlbn In this court...· ..
In
I _
Qf oJ li'reight & v. :Ry. ·Co., 7 Interl.{ Com.'(lt,i479, the i:q·
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INTERSTATE COMMERCE COMMISSION V. WESTERN & A. R. CO.
191
terstate commerce commission, speaking of this decision in the Alabama M. Ry. Co. Case, used the following language: .'<.Ith!! commission has uniformly held. lip to the present time, that this species of competition does not create the necessary dissimilarity of circUmstances and conditions under that section, and SUCh. would have been its decision in this case upon tl1e law as It was supposed to be when the findings of fact were prepared. Since then. however, the supreme court of tl1e United States, by its decision in the case of Interstate Commerce Commission v. Alabama M. Ry. Co. (decided Nov. 8, 1897) 168 U. S. 144, 18 Sup. Ct. 45, has determined that this view of the law is erroneous, and that railway competition may create such dissimilar circumstances and conditions as exempt the carrier. from an observance of the long and short haul provision. Under this interpretation of the law as applied to the facts found in this case, we are of the opinion that the charging of the higher rate to the intermediate points as set forth is IJ,ot obnoxious to the fourth section. l.'he section declares that the carrier shall not make the higher charge to the nearer point under 'substantially similar circumstances and conditions.' If the conditions and circulllstances are not substantially similar, then the section does not apply, and the carrier is not bound to regard it in the making of its tariffs. The court has decided that railway competition, if it exists, must be considered. If, therefore, such competition does actually control the rate at the more distant point, that rate is not made under the same circumstances and conditions as is the rate at the Intermediate point, and the higher rate Is not prohibited by the fourth section."
In the Eleventh Annual Report of the Interstate Commerce Commission (page 37) the commission discussed the Alabama M. Ry. Co. Case, decided by the supreme court, as follows: "It Is stated in the foregoing pages that there was pending before the supreme court of the United States a case arising under the fourth section. Since the above was written, that case has been decided adversely to the contention of the commission. It Is proper, therefore, to further state the nature and bearing of that decision. 'l'he case is entitled 'Interstate Commerce Commission v. Alabama Midland Railway Company and Others,' and was decided November B,1897. The original complaint was brought by the Board of Trade of Troy, Ala., against the Alabama Midland Railway Company and the Georgia Central Railroad Company and their connections. The facts, In brief, are these: Troy, Ala., is situated upon the Alabama MIdland Railway, 52 miles east of Montgomery. Rates from all points in the East llnd Northeast are higher to Troy than to Montgomery via the Alabama .:Midland, although the traffic over that line passes through Troy on Its way to Montgomery. Rates on cotto'n from Troy to Eastern seaports, like Savannah, are higher than rates on cotton from M()ntgomery, although the Montgomery cotton passes thrpugh Troy upori'lts way to Savannah. There were other questions In the case, but these sufficiently illustrate what was decided In reference to the fourth section. Troy Is reached by two railroads, the Alabama Midland and GeorgIa Central, and both these lines actually compete at that point for all kinds of trafil.c. Montgomery Is the converging point for several lines of. railway, which also compete for all kinds of traffic. The defendants claimed that the lower' rate at Montgomery was justified and made necessary by this competltlou between. the different lines centering there, ,which did not affect the r;ite to Troy. The, fourth section provides that more shall not be cbllrrged for t)le short than for the long haul when the transportation Is under 'substantially slmillir circumstances and conditions.' The defendants Insisted that the fact of railway competitlonilt Montgomery made the circumstances llnd conditions at Troy and at Montgomery dissimilar, and that,therefore, the inbibitionof .th,e fourth section dld not apply, The commission had held in man,y cases, and held In this railway competition between carriers subject to the provisions of the act should not of Itself create necessary dissimlla'rity In clrculDstances and conditions. 'ThiscoriteJitiotl Is ,not snstll!n¢d by the supreJ;I,1/l court, which :holds that such competition
192
88
FEDERAL REPORTER.
create that, dlsslmlIarlty, and that the higher rate to Troy 18 not prohibited by the fourth section." ;
Then, after discussing at some' length the origin of this section, the views of the commission, its purposes, etc., it states (page 43): "This language Is Intelligible as to the third section, but we are at a loss to understand how it can be applied to the fourth. That section enacts that the carrier shall not charge more for the short than for the long haul under substantially similar circumstances and conditions. If the circumstances and conditions are similar, the greater charge caunat be made. If the circumstances and conditions are not similar, the section does not apply. The court holds that railway competition of contro111ng force makes the circumstances dissimilar. If, therefore, we find in a particular case that competition of controlling force actually exlsis, that ends the matter. We have no power to say whether, nor to what extent, such competition justifies the higher rate to the intermediate point. The third section Is still left, and under that section we may Inquire Whether, under all the circumstances, the rates as adjusted give an undue preference to the competitive point, but the fourth section Is by this decision eliminated from the act."
In view of the foregoing statements made by the interstate commerce commission in its report, and in the decision of the Savannah Bureau of Freight & Transportation Case, it may reasonably be assumed that the commission itself would not now, upon the record and facts, decide, in the case under consideration, that the fourth section of theae! was violated. Examining the question of existence of such competition at Atlanta as is necessary to justify the lower rate, we find that the interstate commerce commission has expressed itself in this case. In its report and opinion in the present case the commission stated: "The present adjustment of rates to Atlan,ta Is the outcome of severe com· petition between lines leading 'from competing markets, like St. Louis, Baltimore, Cincinnati, etc., and With, ,spm,e modlfications,occurrlng from time to time, has been in effect for a consIderable period."
If competition generally with other lines renders the circumstances and conditions of the haul dissimilar, severe competition would seem to make it beyond question. As a matter of general publio knowledge, Atlanta is many times as large as either of the points ()n the Western & Atlantic Railroad as to which complaint is made. It is also well known, and it is disclosed by the evidence, that at Atlanta several different lines of railroad compete activelYJor business; and not only is competition active between carriers,but also between markets competing for the Atlanta business. Goods may be brought by 'Yater from New York, Philadelphia, Baltimore, and other Eastern points by steamer to Charleston,' Bruriswick, and Savannah, and thence by competing lines of railway to Atlanta. From fiimilar points in. the North and East there are also competing lines .of rail. From points in middle :North and the great Northwest, there is com]?etition by rail"jand partly by water routes. Eight of railroads enter Atlanta. Its commercial and manufacturing interests are large and varied. At the local points on the Western & Atlantic'RaH1'oad mentioned there is very little, if any, competition. It must be apparent at a glance that the conditions under which is effected to Atlanta and at any of the local stations are entirely different. Assuming, therefore, what is now
INTERSTATE COMMERCE COMMISSION V. WESTERN'" A. R. CO.
193
clearly decided, that competition may distinguish the circumstances, and should be considered in determining whether a given rate is obnoxious to the fourth section of the act to regulate commerce, it seems clear that the rates complained of in this case are not violative of that section. In the case of Brewer v. Railway 00., 84 Fed. 258, recently decided by Judge Speer, of the Southern district of Georgia, it is held that the competition existing at Macon, Ga., is such as to distinguish the and conditions of transportation to that city from those existing at Griffin; and a construction is given the fourth section of the act in accordance with what has been hereinbefore expressed. Judge Speer, in concluding his opinion, aptly says: "Shall government undertake the Impossible, but Injurious, task of makIng the commercial advantages of one place equal to those of another'! It might as well attempt to equalize the Intellectual powers of Its people. There should be no attempt to deprive a community of Its natural advantages, or those legitimate rewards which flow from large Investments, business Industries, and competing systems of transportation to facilitate and Increase commerce. The act to regulate Interstate commerce has no such purpose, and ,yet this appears to be the Inevitable result of the relief the complainants seek In this case, without any adequate corresponding advantage either to themselves or to the community In which they live."
It is said, however, that, even if the rates in question here are not objectionable under the fourth section of the act, the charges made to Calhoun, Kingston, Adairsville, Cartersville, Acworth, and Marietta are, in and of themselves, unjust and unreasonable, and as such come within the prohibition of the first section of the act referred to. That section provides that "all 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 receiving, delivering, storage or handling of such property shall be reasonable and just; and every unreasonable and unjust charge for such service is prohibited and declared to be unlawful." It has been stated already that the charge originally made in this case, and the one to which evidence was directed, hearings had, and orders made, up to the present time, was the violation of the fourth section of the act, and that the charges made to the local stations on the Western & Atlantic Railroad relatively to the charge made at Atlanta were in violation of that section. But there is no evidence whatever to justify a finding that the rates charged to Oalhoun, Kingston, Adairsville, Cartersville, Acworth, and Marietta are unjust and unreasonable in and of themselves. It is argued that the fact that the rate to Atlanta is said to be a reasonable and just rate by the witnesses for the defendant, that the rates to the other points, being higher, must be unreasonable. The witnesses speak of the rate to Atlanta as a part of a general system of rates, and a fair construction of their evidence is that they are spoken of as reasonable in connection with this general system of rate-making. These witnesses testify in response to questions of counsel for complainant that the rate to Atlanta pays something above the cost of the I!lervice of carriage. It is doubtful as to what this expression means, and a!! to what it includes,-whether it relates simply to the 88 F.-1S
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Jl'IlDlllRAL. RlIIPORTlllR.
cost transportation of the goods; or -whether'it em.braceeall of the' :costto the railroad, company, includ. lng its, bed charges; etc. ,,,But; either ,way, th:e;fact that thei,rate to Atlanta is reasonable does not show, that the otber: rates are' un. reasonable. ', It is said, also, thit :the,fact that,;ii nart of tlierate to Calhoun, artersville, Acworth, and Mal'ietta is the Kingston, Adairsville, local rate fixed by the Georgia railroad commission for local hauls shows that it is unreasonable. fl'he rates to these points are made up of a 'highly competitive rate to Chattanoog"l:l. with the local rate added. The testimony is that each is reasonable of itself. In the Alabama M. Ry. Co. Case in the circuit court of appeals (21 C. C. A. 51, 74 Fed. 723), in reply to a question of this sort, raised in that case, it is said "the rates in question, when separately considered, Ilre notunrell$onable or unjust." The"facts here bein.g similar, the be the same. ' It is further urged that this bill should be sustained upon the that the rates complained of violate the third section of the act, in that there is an undue preference and advantage in favor of the longer distance point, and an unreasonable prejudice or disadagainst the shorter distance point. It was said by this court in the case of Interstate Commerce CommissioDv. Cincinnati, N. O. & T. P.Ry. Co., 56 Fed. 925, as follows: ".As to the question of undue preference, under section 3 or the act to regulate commerce, It may be stated that, unless the traffic Involved here Is obnoxious to the fourth clause or the act, It can hardly be said to be an undue preference In favor of Augnsta, or an undue prejudice or disadvantage against Social Circle. In the party rate case (Interstate Commerce Commission v. Baltimore & O. R. CO" 145 U. S. 263, 12 Sup. Ct. 844) the supreme court say: 'But so far as relates to the question of 'Undue preference, It may be presumed that congress, In adopting the language Of the English act. had In mind the constructions given to these words by the English courts, and Into the statute. · ., ,. In short, the subIntended to Incorporate !iltance of all these l!l that railway companies are only bound to give the same terms to all persons alike, llnder' the same conditions and clrcumstances, and that any' :tact which produces an Inequality of condition, and a change or circumstances, jUstifies an inequality of charge." So that, 'unless as compared with each other. violate the fourth secthe rates complained of the act, there ,seems to be very llttle ground for claiming that they violate the undue preference provision or : . ; , the third section." . : .
There might be, of cOl'>:t'se, a case: of undue preference on the one hand and undue prejudice on the. other in connection with a charge of 'a greater rate for the shorter than for the longer haul. But the evidence here fails to show -that there is' any undue preference in fator of ,the longen distance pOint. The evidence shows that the rate to Atlanta is forced on, the railroad officials by competition. There 'is no evidence whatever of any improper desire on the part of these officials to give Atlanta a lower rate or the local points a higher rate. The matter is controlled by existing competitive conditions. brief, invites the attention . Counsel for the commission, in of the court to the fact that' "violations of the long and short haul rule of section 4 are c!lnlya species of!undue preference in rates be-
INTERSTATE COMMER(JE COMMISSION V. WESTERN &: A. R. CO.
195
tween localities, and that such violations fall within the purview of the provisions of section 3 forbidding undue preference between localities, and would have been unlawful under that section, although not specifically denounced in .section 4. .Congress, therefore, in making the greater charge for the shorter than the longer haul the subject .of specific denunciation in a distinct section of the law, only intended to emphasize its disapprobation of that particular species of undue preference in rates between and to point it out as one of the principal evils which called for remedial legisla· tion, and which the commerce law was especially designed to rem· edy." But congress, by the fourth section, intended to establish a test as to the lawfulness- or unlawfulness of charges in connection with the long and short baul. Wbere, under tbe terms of the section distinctly and specifically dealing with tbe long and sbort baul question, certain rates are legal, we cannot turn to another broader and more comprehensive part of the law, and determine them to be illegal. If tbe lesser charge to the longer distance point results from dissimilar circumstances and conditions brought about by com· petition, it cannot be said to be a preference which is undue or unreasonable. Attention has been ealled by counsel for the commission to a recent decision by Judge Severens in the circuit court for the Eastern district of Tennessee, at Chattanooga, in the case of Interstate CommerceCommission v. East Tennessee, V. & G.·R. Co., 85 Fed. 107, and special stress is laid on a part of the opinion by Judge Severens, as follows: "Now, I do not understand tbat sucb a conclusion follows from tbat decision [decision of the supreme court in the Alabama Midland Case]. On the contrary, I suppose that wben a violation of the long and short haul provision is charged, competition is one of the elements which enter into the determination whetber the conditions are similar; and, if dissimilarity is found, then the further question arises whether the dissimilarity is so great as to justify the discrimInation which is complained of. The language of tbe act ougbt not to be tied up by such liberal construction. If it were, tben If it should be found that the dissimilarity of conditions is really in favor of the locality discriminated against, the provision would not applY,-a result contrary to tbe manifest intent. In other words, my opinion is that the restraint of section 4 is to be applied upon the scale of comparison between dissimilarity of conditions and the disparity of rates, and that it Is competent under tbat section to restrain the exaction of the greater charge for the shorter baul, altbough there may be a substantial dissimilarity of conditions, provided the dissimilarity is not so great as to justify the discrimination made."
This view of the law suggested by Judge Severens, it is submitted with the utmost deference, is not tbe view adopted by the courts, or, indeed, by the interstate commerce commission itself. The view generally entertained is that, if the circumstances and conditions at the longen distance point are substantially dissimilar from those at the shorter distance point, then tbe fourth section of the act is inapplicable. In the case of In re Louisville & N. R. Co., 1 Interst. Commerce Com. R. 57, speaking through Judge Cooley, with reference to the phrase "under substantially similar circumstances and conditions," in the fourth section of the act, the commission says:
196
FEDERAL RBlPORTBlR.
"It .the circumstances arid conditions of the two hauls are dissimilar, the .tatute 18 not violated."
In the Eleventh Annual Report, ·embraced in the language hereto· fore quoted, is this expression by the commission: "If, therefore, we find In a particular case that competition of controlling force actually exists, that ends the matter. We have no power to say whether, nor to what extent, such competition 'ustifies the higher rate to the Intermediate point."
The language of the commission in the Louisville & N. R. Co. Case has been quoted with approval by Judge Ross in Interstate Commerce COmmission v. Atchison, T. & S. F. R. Co., 50 Fed. 300, and by Judge Siinonton in Behlmer v. Railroad Co., 71 Fed. 839. Alabama M. Ry. Co. Clise,supra. In the opinion of the circuit court of appeals for the Fifth circuit (21 C.O. A.59, 74 Fed. 723) in the Alabama M. Ry. Co. Case, by Cir· cuit Judge McCormick, this occurs: "Within the limits of the exercise of intelligent good faith In. the conduct of their business, and sUbject to the two leading prohibitions that their charges shall not be unreasonable or unjust, and that they shall not unjustly dIscriminate so as to give undue preference or disadvantage to persons or traffic similarly circumstanced, the act to regulate commerce leaves common carriers as they were at the common law, free to make special rates looking traffic, to adjust and apporto the increase of their business, to tiQn their rates so as to meet the necess1t1es of commerce and of their own situation and relation to J.t, and, generally, to manage their important Interests upon the same principles which are regarded as sound. and adopted in other trades and pursuits. The carriers are better qualified to adjust such matters than any court or board of public administration; and, within the limitations suggested, it is safe and wise to leave to their traffic managers the adjusting of dissimilar circumstances and conditions to their business."
In the same case in the supreme court this language of the circuit court of appeals is drawn in question, and in the opinion by Justice Shiras for the supreme court (168 Dc S. 173, 18 Sup. at. 51) it is said: "The last sentence in this extract is objected to by the commission's counsel, as declaring that the determination of the extent to which discrimination Is justified by circumstances and conditions should be left to the car· riers. If so read, we should not be ready to adopt or approve such a posl· tion. But we understand the statement, read in the connection in which It occurs, to mean only that, when once a substantial dissimilarity of circumstances and conditions has been made to appear, the carriers are, from the nature. of the question, better fitted to adjust their rates to suit such dissimilarity of circumstances and conditions than courts or commissions; and when we consider the difficulty-the practiCal imposslbll1ty-of a court or a commission taking into view the various and continually changing facts that bear upon the question, and intelligently regulating rates and charges accordingly; the observation .objected to is manifestly just. But it does not mean that the action of the 'carriers in fixing and adjusting rates in such instances is not subject to revision by the commission and the courts, when it is charged that such action has resulted in rates unjust or unreasonable, or in unjust discrimination and preferences."
The meaning of this must be that, where the circumstances and conditions at the longer distance point are substantially dissimilar, the carrier may judge of this for itself, in the first instance, and fix the rates for the longer distance point without violating the fourth section of the act; but this does not preclude the courts or the com·
BARROW S. S. CO. V.
197
mission from ip,quiring as to whether the rates to the shorter distance points are unjust or unreasonable, or whether they constitnte undue _ preference for, <tr unjust prejudice against, any locality. It may be said finally that, in order to constitute dissimilarity under the fourth section of the act, the competition must be real, and not imaginary or trifling, and to this effect are all the decisions on the subject. It is conceded that the second section of the act is wholly inapplicable here, in that it deals with preferences as between shippers, and not as between localities. The conclusions reached in this case are: 1. It is shown by the evidence and by the record that competition at Atlanta is active and effective, and controls in the making of the rates in controversy to Atlanta, and that there is little or no competition at any of the local points as to which complaint is made by the George commission. Consequently, the haul to Atlanta is not under circumstances and conditions substantially similar to those at the other localities, and therefore the fourth section of the act is not violated. 2. There is nothing whatever in the evidence or in the record from which it can be justly concluded that the rates to any of the local points named are, in and of themselves, unjust and unreasonable, in violation of the first section of the act. 3. The evidence fails to show that the rates complained of violate the third section of the act. The only complaint made, and all that the evidence shows, is that the rate to Atlanta, the longer distance point, is less than the rate to these shorter distance points; and as the rate to Atlanta is shown to have been brought about by, and to be the result of, active competition at that point, it cannot be held to be a preference which is undue or unreasonable in favor of Atlanta, or to subject the local points named to any undue or unreasonable prejudice or disadvantage. Entertaining the foregoing opinion of the case, the court must deny the injunction prayed for to restrain the continuance of the rates in question BARROW S. S. CO., Limited, v. KANE. (Circuit Court of Appeals, Second Circuit. No. 98. June 24, 1898.)
1.
CARRIERS-INJURY TO PASSENGER-INDEPENDENT CONTRACTORS.
A carrier's obligation to transport his passengers safely cannot be shifted from himself by delegation to an Independent contractor, and it extends to all the agencies employed, and Includes the duty of protecting the passenger from an Injury caused by the act of any subordinate or third person engaged in any part of the service required by the contract of transportation.
I.
SAME.
The agents of a steamship company were charged with the duty of transferring Its passengers by tugs or tenders from the port of embarkation, and putting them on board Its ships. For this they received a commission, paying the expenses themselves. They employed a steam tender and two persons In charge thereof, and these persons, while plalntUr was