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Louisville, Ky., and Cincinnati, Ohio, and a line of the Baltimore & Ohio system runs between Cincinnati and Philadelphia, Pa., by way of Baltimore. Dyersburg is on the Chesapeake, Ohio & Southwestern R. R., 70 miles nearer to Louisville over the same line than Memphis, and cotton-seed meal is not shipped from that point by water to eastern points.

2. The rates from Memphis by all lines, including the lines of the three defendants first named, to Philadelphia, was at the time of the investigation 29 cents per 100 pounds on cotton-seed meal. No joint through rate from Dyersburg to Philadelphia had been published. The rate from Dyersburg to Philadelphia was 34 cents per 100 pounds, made up of a local rate from Dyersburg to Louisville over the Chesapeake, Ohio & Southwestern Railroad of 11 cents per 100 pounds, and a through rate thence to Philadelphia over the lines of the other two defendant companies, of 23 cents per 100 pounds.

3. Formerly, when cotton-seed meal was less valuable and classified as fertilizer, it had a rate of 11 cents per 100 pounds to Louisville from Dyersburg over the Chesapeake, Ohio & Southwestern R. R. When new uses were found for this product and its value was greatly increased, it was taken from the fertilizer class and given a commodity rate of 17 cents per 100 pounds, but on through business, though the Chesapeake, Ohio & Southwestern disclaimed having, or being a party to, a through rate from Dyersburg, it accepted 11 cents per 100 pounds to Louisville.

4. From Memphis, there is water transportation by the Mississippi and Ohio rivers to Cincinnati, by which cotton-seed meal was carried for 12 cents per 100 pounds, and from Cincinnati by rail to Philadelphia the rate was and is 17 cents per 100 pounds, making the through rate from Memphis to Philadelphia by rail and water over this route 29 cents.

5. From Memphis, the Mississippi River affords water transportation to New Orleans; and a rail rate was in existence of 9 cents per 100 pounds on cotton-seed meal to that point, from which the rate by steamship to New York was 15 cents per 100 pounds, making a through rate from Memphis to New York of 24 cents per 100 pounds. A small per cent of the product was carried by this route. What the rate was to Philadelphia by way of New Orleans, if there were any carrying from Memphis by that route, did not appear.

6. The local rate over the Chesapeake, Ohio & Southwestern R. R. from Dyersburg to Memphis on cotton-seed meal was 61 cents per 100 pounds; this, with the above rates via New Orleans, would give Dyersburg a 30 cent rate to New York by that route. The only shipments of considerable volume from Memphis to Philadelphia are cotton, cotton-seed products and lumber; and of these, the larger part is carried by rail. Philadelphia ships little freight through New Orleans to Memphis, the least expensive route, yet a large per cent of such freight leaves Philadelphia by water for Norfolk or Savannah, and goes thence by rail to Memphis, with better time than by the New Orleans route, and better rates than by any other than the New Orleans

route.

It appearing after investigation that the road of said Chesapeake, Ohio & Southwestern Railroad Company was operated by the Illinois Central Railroad Company, this latter company was by order of this Commission made a party defendant, served with a copy of the complaint, and required to answer. This company, the Illinois Central, answering as required by the Commission, says:

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It denies that at the time of the filing of the complaint herein it had any supervision over or any interest whatsoever in the line known as the Chesapeake, Ohio & Southwestern Railway, and it can therefore neither affirm nor deny any of the allegations set forth by the complainants.

"3d. This respondent admits that it now acts as agent for the owner of the line formerly known as the Chesapeake, Ohio & Southwestern Railway, one of the defendants in this proceeding, and as such agent that it has put into effect the same tariff of rates on cotton-seed meal, in carloads, from Dyersburg, Tennessee, as from Memphis, which tariff of rates is lower than that complained of. Vide Illinois Central (Agent) G. F. O. 731 A -I. C. C. 239, October 21st, 1896, making rate on cotton-seed meal from Dyersburg to Philadelphia 26 cents per 100 pounds, same as from Memphis," and "prays that the proceeding against it in this case be dismissed.”

On further investigation it is found that the Illinois Central Railroad Company operating the line of the Chesapeake, Ohio & Southwestern Railroad Company has established and put into effect the same rate,-26 cents per 100 pounds,-in carloads on

cotton-seed meal from both Memphis and Dyersburg, Tenn., to-
Philadelphia, Pa. The rates being no longer in conflict with the
statute and the grievance complained of having been corrected,
the carriers have made reparation and no order will be issued.
The case will be dismissed.

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IN THE MATTER OF ALLEGED VIOLATIONS OF THE FOURTH SECTION OF THE ACT TO REGULATE COMMERCE BY ATCHISON, TOPEKA & SANTA FÉ RAILWAY COMPANY AND THE RECEIVERS THEREOF, AND OTHERS.

Decided March 1, 1897.

No disturbance of rates, secret or open, creates such dissimilarity of circumstances and conditions under section four of the Act to Regulate Commerce as will justify either of two or more competing carriers subject to that Act in charging more for the short than for the long haul, without an order of the Commission.

Kenna & Dunlop for Atchison, Topeka & Santa Fé System and Receivers.

REPORT AND OPINION OF THE COMMISSJON.

PROUTY, Commissioner :

Previous to October 7, 1895, the rate on fifth-class freight from Chicago to Colorado points by all competing roads had been 92 cents per 100 pounds in carload lots. By a tariff regularly published, taking effect as of that date, the receivers of the Atchison, Topeka & Santa Fé Railway reduced the rate to 50 cents. Other companies at once followed this by reductions to 38 cents October 13, and 30 cents October 14. In making these rates some of the carriers so arranged their tariffs to intermediate points as not to conflict with the fourth section. Most of them did not. The receivers of the Santa Fé road made no attempt in their tariff of October 7th or in subsequent tariffs to do so, but upon the contrary the receivers of that railroad insisted, both by their answer in this case and by the sworn testimony of one of the Receivers upon the hearing, that the rates, although lower to Colorado points than intermediate points, were not in violation of the fourth section, for the reason that the circumstances and conditions were so dissimilar that they were justified in making the lower rate for the longer haul, dissimilarity of circumstances and conditions being found in the fact that there was then prevalent a rate war between different competing lines to those points.

The rates were soon restored to their normal condition, so that

the question has ceased to be a live one, nor would it deserve any further consideration from us were it not for the fact that it was seriously claimed by a prominent railroad manager that the act of the Santa Fé under the circumstances was not in violation of law. Since the same condition of things may, and is almost certain to, arise from time to time, we deem it proper to express our views upon that claim.

As we understand the position of Mr. Walker, it was as follows: As the receiver of the Santa Fé system he stood charged with the preservation of its properties; he found in the management of those properties that the traffic from Chicago to Coloradopoints, which belonged to and had formerly passed over his lines, was being diverted, and he became satisfied that this was owing to the irregular practices of his competitors in accepting less than the published rates. He became convinced that the only way in which this secret and unlawful competition could be met was by meeting the rate which they made, and he accordingly did so.. The rate which he established to Colorado points was, as he well knew, an unremunerative rate, and was only established to meet the immediate necessities of the occasion and as a temporary expedient. The rates to intermediate points had been substantially the same for many years, and were just and reasonable. He did not believe there was any equitable reason why these rates should be reduced and the revenues of his system diminished because he found it necessary to make a low rate for the purpose of checking unlawful competition. It was the fact of this unlawful and secret competition which justified him in making the lower rate for the longer haul by creating dissimilar circumstances and conditions.

In the case Re Louisville & N. R. Co. 1 I. C. C. Rep. 31, 1 Inters. Com. Rep. 278, it was held by the Commission that the fourth section did not apply where the circumstances and conditions were dissimilar, and that in the case of such dissimilar circumstances and conditions the carrier might lawfully charge more for the short than for the long haul. Under this decision, which was upon the most elaborate consideration of the questions involved, two classes of cases might arise with reference to the fourth section: first, those in which the circumstances and con-ditions were dissimilar, to which the section did not apply; sec

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