No. 1127. COSMOPOLITAN SHIPPING COMPANY v. HAMBURG-AMERICAN PACKET COMPANY; NORTH GERMAN LLOYD STEAMSHIP COMPANY; WILSON (HULL) LINES, AND SCANDINAVIAN-AMERICAN LINE. Submitted January 8, 1908. Decided March 9, 1908. 1. Complaint in this case alleges that defendant steamship companies transport traffic under through bills of lading between inland points of the United States and foreign ports and are thereby subject to the jurisdiction of this Commission; that such defendants have made an arrangement for the pooling of eastbound export traffic moving by rail to Atlantic ports and thence by steamship lines to points in Denmark, Sweden, Norway, Finland, and German points on the Baltic; that this "Baltic pool" arbitrarily determines the ultimate rates from such inland points of the United States to such foreign ports via the North Atlantic ports; and that the Hamburg-American Packet Company maintains a monopoly of westbound and eastbound traffic forwarded on local and on through bills of lading between Germany and other continental countries and inland cities of the United States. The prayer is that the Commission declare the "Baltic pool" to be an illegal pooling of freights under the act, that the monopoly of the Hamburg-American Packet Company be declared unlawful, and that general relief be granted. To this complaint defendants demur, on the grounds (1) that this Commission has no jurisdiction of the subject-matter, or power to proceed against defendants, and (2) that the complaint sets forth no matter which is cognizable by this Commission, or which it has been given authority to remedy. Held, That, for reasons stated in the opinion, the demurrer will be sustained and the complaint dismissed. 2. This Commission has no jurisdiction as to shipments moving from ports of the United States to a foreign country not adjacent when such shipments are not carried by rail, or by rail and water, from an inland point of origin to a port of transshipment. An inland movement of export or import traffic is a condition precedent to the attaching of jurisdiction. 3. The jurisdiction of this Commission is not to be determined by anything other than the language of section 1 of the act, and in this section is found a clear distinction drawn between interstate commerce and foreign commerce to a country not adjacent to the United States; and this distinction saves such foreign commerce from the effect of that provision of the section as to con tinuous carriage beyond the American seaboard. 4. The Commission may regulate interstate traffic, whether by rail or by a combined rail-and-water route, from point of receipt to point of delivery; but the Commission in its control over foreign commerce is limited to the regulation of such traffic, whether by railroad or by a combination of rail and water carriers, from and to the point of transshipment. 5. The act provides no machinery by which its provisions can be enforced as to trans-Atlantic steamship lines; the absence of such provision can be explained only by accepting the interpretation that the Commission has no jurisdiction in the premises. 6. The pooling of traffic by water carriers is plainly a matter over which this Commission has no jurisdiction. 7. A rail carrier may control, or connect with, a line of steamships engaged in foreign commerce, with which it may interchange business as freely as with another rail carrier, and it may quote a combined rate for the through movement, the agent of the railroad company acting as the agent of the steamship company in so doing. 8. The act provides that this Commission shall exercise jurisdiction over the inland portion of the haul, either to or from the foreign country; and it must logically and necessarily follow that the rate which must be filed with the Commission under section 6 of the act is the rate governing such movement. On foreign commerce the rate to be published with this Commission should be the rate to the port and from the port-an open rate, which any who desire to do so may use with equal advantage. 9. This position does not conclude the Commission against an examination into the relation which exists between the rail carriers of the United States and the defendant water carriers and condemnation of such arrangement, if the rail carriers to the seaboard are by any means whatsoever disobeying any provision of the act or omitting to comply with its every requirement. Ward W. Pierson and Frank L. Neall for complainant. John C. Spooner, William G. Choate, and Harrington Putnam for defendants. REPORT OF THE COMMISSION. LANE, Commissioner: The Commission is petitioned in this case to restrain, control, and regulate the practices of the trans-Atlantic steamship lines named as defendants. The complainant, a New Jersey corporation, operates a line of steamships out of the port of Philadelphia to Copenhagen, Denmark; Rotterdam, Holland, and Leith, Scotland. The defendants are ocean carriers between various ports of the United States and foreign ports; the Hamburg-American Packet Company transporting traffic between Boston, New York, Philadelphia, Baltimore, Norfolk, and Newport News, and Hamburg, Germany; the North German Lloyd Steamship Company between New York and Philadelphia and Bremen, Germany; the Wilson. (Hull) lines between Boston and New York and Hull, England; the Scandinavian-American line between Boston and New York and Copenhagen, Denmark. It is alleged in the complaint (and this allegation is the foundation of the present proceeding) that the defendants transport traffic under here, that this Commission has jurisdiction as to shipments moving from ports of the United States to a foreign country not adjacent when such shipments are not carried by rail, or by rail and water, from an inland point of origin to a port of transshipment. An inland movement of export or import traffic is a condition precedent to the attaching of jurisdiction. There may be an unlimited volume of all-water commerce from the American seaboard to the European seaboard, but over such commerce, or the carriers engaged therein, this Commission has no regulating power whatsoever so long as the shipments originate at the seaboard and are not transshipped to the ocean carriers. This exemption appears of great significance in the construction of the law, for the question at once is raised in the mind: Why should Congress distinguish between that foreign commerce which originates at, or is destined to, a seaboard city and that which is sent from, or taken to, an interior point? The answer is found in the fact that Congress has not sought to exercise control over all-water carriage, either transoceanic or inland. The act to regulate commerce arose out of the unjust and discriminatory practices of the rail lines; and all other carriers, when entirely independent thereof, were exempted from the restrictions imposed by this act and denied its benefits. Indeed, it may be said that the primary purpose of the law, judging from the reports and debates of Congress prior to and succeeding the enactment of the act of 1887, was to regulate rail carriers; but for the purpose of successful regulation of these it was found necessary that water carriers operated in connection with rail carriers should be made subject to the same regulating power. Accordingly it has been the uniform interpretation of the law that an all-water carrier engaged in carrying freight originating at New York or at New Orleans may engage in such traffic between such ports without filing its rates with this Commission, and so may the steamships plying between Seattle and San Francisco, or the carrier which transports freight from Duluth to Chicago on the Great Lakes, or the river carrier from Memphis to New Orleans; but if such water carriers are controlled or managed by the same corporation as controls or manages a rail line, or if between a rail and a water line there is an arrangement for continuous carriage, then such water line becomes subject to all the provisions mandatory and prohibitory of the act to regulate commerce. The complainant now asks an extension of this principle so as to govern foreign commerce when such traffic is carried by rail to the seaboard and thence by steamship to European ports, it being the theory of the complainant's case that because a through bill of lading is given at the inland point where the freight is received, upon which the traffic moves to the point of foreign destination, all the of the defendant, according to the port, and carried thence to foreign destinations, either directly when reached by the water carrier or in connection with other carriers; that the volume of traffic assembled in each of these seaports of the United States is so distributed as to insure each of the respective members of the pool their arbitrarily agreed upon percentage of the traffic actually moved; that these percentages are regulated and controlled in New York by means of frequent reports and comparisons of records; that such an apportionment involves the determination, both as to kind and amount of traffic originating in western cities which is to be forwarded to each of said ports upon the Atlantic seaboard; that when a member of the pool is doing more than its apportioned share of the business, shippers are instructed to send their goods to ports from whence other lines make their sailings; that in this way freight shipments are arbitrarily manipulated so as to put out of business the ocean freight service of a line not belonging to said pool; that such pool results in unjust discrimination between different of the American ports and against complainant and American owners of American boats, unduly prefers foreign boat owners, and threatens to annihilate the American-controlled shipping companies that attempt to compete for such foreign traffic. A further allegation is that the Hamburg-American Packet Company maintains and manipulates a monopoly of westbound and eastbound traffic forwarded on local and on through bills of lading between Germany and other continental countries and the inland cities of the United States. It is the prayer of the petition that the Commission declare the "Baltic pool" to be an illegal pooling of freights under the act, and that the monopoly of the Hamburg-American Packet Company be declared unlawful as tending to decrease competition, and therefore to the illegal advancement of transportation charges; and that the Commission prescribe such rules and regulations in lieu of those now existing over defendants' lines as will in future operate to prevent the continuance of the exactions, unjust discriminations, and undue and unreasonable prejudice and disadvantage to the complainant, to other shippers, and to said inland points in the United States, as are alleged and may be found to obtain. To this complaint the defendants demur, (1) that it appears upon the face of the said petition that this Commission has not, under the laws of the United States, jurisdiction of the subject-matter thereof, or power to proceed thereunder against the said defendants or either thereof; (2) on the ground that said petition sets forth no matter or matters which are cognizable by this Commission, or which it has been given authority to remedy or relieve against. There is thus raised for determination the jurisdiction of this Commission over ocean carriers engaged in the transportation of property which moves on through bills of lading from points in the interior of the United States to foreign countries not adjacent to the United States. It is clear that under the plain reading of the act no basis exists for the contention, nor is the contention made by complainant here, that this Commission has jurisdiction as to shipments moving from ports of the United States to a foreign country not adjacent when such shipments are not carried by rail, or by rail and water, from an inland point of origin to a port of transshipment. An inland movement of export or import traffic is a condition precedent to the attaching of jurisdiction. There may be an unlimited volume of all-water commerce from the American seaboard to the European seaboard, but over such commerce, or the carriers engaged therein, this Commission has no regulating power whatsoever so long as the shipments originate at the seaboard and are not transshipped to the ocean carriers. This exemption appears of great significance in the construction of the law, for the question at once is raised in the mind: Why should Congress distinguish between that foreign commerce which originates at, or is destined to, a seaboard city and that which is sent from, or taken to, an interior point? The answer is found in the fact that Congress has not sought to exercise control over all-water carriage, either transoceanic or inland. The act to regulate commerce arose out of the unjust and discriminatory practices of the rail lines; and all other carriers, when entirely independent thereof, were exempted from the restrictions imposed by this act and denied its benefits. Indeed, it may be said that the primary purpose of the law, judging from the reports and debates of Congress prior to and succeeding the enactment of the act of 1887, was to regulate rail carriers; but for the purpose of successful regulation of these it was found necessary that water carriers operated in connection with rail carriers should be made subject to the same regulating power. Accordingly it has been the uniform interpretation of the law that an all-water carrier engaged in carrying freight originating at New York or at New Orleans may engage in such traffic between such ports without filing its rates with this Commission, and so may the steamships plying between Seattle and San Francisco, or the carrier which transports freight from Duluth to Chicago on the Great Lakes, or the river carrier from Memphis to New Orleans; but if such water carriers are controlled or managed by the same corporation as controls or manages a rail line, or if between a rail and a water line there is an arrangement for continuous carriage, then such water line becomes subject to all the provisions mandatory and prohibitory of the act to regulate commerce. The complainant now asks an extension of this principle so as to govern foreign commerce when such traffic is carried by rail to the seaboard and thence by steamship to European ports, it being the theory of the complainant's case that because a through bill of lading is given at the inland point where the freight is received, upon which the traffic moves to the point of foreign destination, all the |