may not be predicated on the lower cement rates, because the commodities are not competitive." In denying relief where competition between localities was alleged, the Commission said: "It does not appear that there is such a competitive relation between Baton Rouge and New Orleans in respect of the commodity in question that different rates to these points are prima facie unlawful.''67

Between the rates on wheat and coarse grain, which are "competitive in no practical sense, '68 and between rates on poles and lumber,69 there can be no undue or unlawful preference because of lack of competition.

§ 155. Discrimination Beyond the Control of the Carrier.On this subject, the Supreme Court has said:70

"The prohibition of the 3d 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. '71

Many past discriminations have been defended on the ground that the particular carrier complained against could not remedy the situation; the claim being made that the conditions had grown up and existed without the aid and contrary to the wishes of the carrier.

Such a claim cannot, however, be successfully maintained

66 Acme Cement Plaster Co. V. Lake Shore & M. S. Ry. Co., 17 I. C. C. 30, 36.

67 Southern Bitulithic Co. v. Illinois C. R. Co., 17 I. C. C. 300.

68 Board of Trade of Chicago v. Chicago & A. R. Co., 27 I. C. C. 530, 535.

69 California Pole & Piling Co. v. Southern Pac. Co., 27 I. C. C. 670; See also Texarkana Freight Bureau v. St. L. I. M. & S. Ry. Co., 43 I. C. C. 224, 226; Laundrymen's Nat'l Assn. v. Adams Express Co., 45 I. C. C. 361,

362 (laundry & bread); Kansas City & M. Ry. Co. v. St. L. & S. F. R. Co., 46 I. C. C. 464, 465. The general question was interestingly discussed by Henry Hull, Case & Comment, April 1918.

70 East Tenn., Va. & Ga. Ry. Co. v. Int. Com. Com., 181 U. S. 1, 18, 45 L Ed. 719, 725, 21 Sup. Ct. 516.

71 East Tenn., Va. & Ga. Ry. Co. v. Int. Com. Com., 99 Fed. 52, 63, 39 C. C. A. 413, 425. See also Board of Trade of Chicago v. Chicago & A. R. Co., 4 I. C. C. 158, 3 I. C. R. 233.

to prevent the establishment of joint rates, through combination rates having been voluntarily established.72 Controlling competition may justify a rate situation which would be otherwise unlawful.73 The "test of the discrimination is the ability of one of the carriers to put an end to the discrimination by its own act.'"74

*

Length of time that an unreasonable preference has existed will not justify it. Judge Taft, in East Tenn., Va. & Ga. Ry. Co. v. Int. Com. Com. (Note 71), said:

"We are pressed with the argument that to reduce the rates to Chattanooga will upset the whole southern schedule of rates, and create the greatest confusion; that for a decade Chattanooga has been grouped with towns to the south and west of her, shown in the diagram; and that her rates have been the key to the southern situation. The length of time which an abuse has continued does not justify it. It was because time had not corrected abuses of discrimination that the Interstate Commerce Act was passed."

From these authorities it is seen that in determining whether or not undue preference exists all the surrounding facts and circumstances must be considered, including competition and the interests of the public and the carriers.. The commerce of this vast country could not be transacted in a satisfactory manner unless carriers were allowed to meet market and other competition by taking all traffic that increases receipts more than expenditures. Nor are shippers that are seemingly discriminated against by this lower competitive traffic really subjected to unjust and unreasonable discrimination or preference when the situation is thoroughly analyzed. If this creaper-rate traffic pays any profit, to that extent it increases the revenues of the carrier and enables it better to perform its public duties. As said by W. B. Dabney (The Public Regulations of Railways, 111, 113): "Discrimination which produces no injury cannot

72 St. Louis & S. W. Ry. Co. v. United States, 245 U. S. 136, 62 L. Ed. 199, 38 Sup. Ct. 49.

73 Eastern Shore, etc. Produce Exchange v. N. Y. P. & N. R. Co., 40 I. C. C. 328, 334 and cases cited.

74 Ashland Fire Brick Co. v. S. Ry. Co., 22 I. C. C. 115; Traffic Bureau, Toledo v. C. H. & D. Ry. Co., 43 I. C. C. 446, 456; Commercial Club of Mitchell v. A. & W. Ry. Co., 48 I. C. C. 40, 43.

be considered unjust; if it can be shown that discrimination may in certain cases be actually beneficial to the community apparently discriminated against, it should, instead of being denounced, be encouraged. It is not the commerce of one nation or continent alone, that determines the conditions of transportation within its limits, but that of the civilized world." Carriers, however, cannot use these arguments to do more than meet the situations presented by the circumstances and conditions, and any discrimination in excess of that required by the different conditions is unjust and unreasonable.75

§ 156. Removal of Discriminations and Preferences in Rates Specifically Enjoined by the Hoch-Smith Resolution.The Hoch-Smith Resolution, passed by the Sixty-Eighth Congress,76 seeks, through mandatory directions to the Interstate Commerce Commission, the removal of all unjust discriminations and undue preferences-not only those relating to persons, places, sections and territories, but those applicable to commodities and particular descriptions of traffic as well— in the freight-rate structure of the country.

This resolution embodies no new inhibitions against discriminations and preferences; it merely expresses, in specific terms, the desire of Congress that the Interstate Commerce Commission exercise its authority and powers in the elimination and removal of such discriminations and preferences as the law already prohibited. Agricultural products are the object of special consideration by this resolution.

An investigation to this end was required, and, acting in accordance with the mandate of such resolution, the Interstate Commerce Commission instituted a nation-wide investigation of rates, intrastate and interstate, under its docket No. 17,000-Rate Structure Investigation.

The entire burden and responsibility of removing discrim

75 As to competition, see ante, Section 154, post, Sec. 248. Rates made by a state, Sec. 44, ante. As to the regulation of competitive industrial conditions by rate adjustments, see Anchor Coal Co. v. U. S., 25 Fed. (2d)

462. The dismissal of the appeal in this case by the Supreme Court left this important question undecided by the final judicial authority.

76 43 Stat. 801; 49 U. S. C. A., Sec. 55. See Secs. 65 and 107, ante.

inations and preferences are placed by this resolution upon the Interstate Commerce Commission. No direct obligation or duty was placed upon the carriers or any other agency by such resolution.

§ 157. Facilities for Interchange of Traffic and Rates and Charges to Connecting Lines Must be Without Undue or Unreasonable Preference.-Prior to the Interstate Commerce Act, a carrier was not compelled to form a business connection with another carrier and was not compelled to "afford all reasonable, proper, and equal facilities for the interchange of traffic" with connecting carriers. In Atchison, T. & S. F. R. Co. v. Denver & N. O. R. Co.," a bill was brought by the Denver company to compel the Atchison company to unite with it in forming a through line of railroad transportation with all the privileges as to exchange of business that were customary with connecting carriers and that were then conceded to a competitive line of complainant. It appears from the evidence that it was the custom of connecting lines to make arrangements with reference to the interchange of business and the formation of through lines. Of the facts, the court said:

"A large amount of testimony is found in the record, as to the custom of connecting roads in respect to the interchange of business and the formation of through lines. From this it appears that, while through business is very generally done on through lines formed by an arrangement between connecting roads, no road can make itself a part of such a line, so as to participate in its special advantages, without the consent of the others. Oftentimes new roads, opening up new points, are admitted at once on notice, without a special agreement to that effect or in reference to details; still, if objection is made, the new road must be content with the right to do business over the line in such a way as the law allows to others that have no special contract interest in the line itself. The manner in which its business must be done by the line will depend not alone on the connection of its track with that of the line, but upon the duty which the line as a carrier owes to it as a customer. No usage has been established which re

77 Atchison, T. & S. F. Ry. Co. v. Denver & N. O. R. Co., 110 U. S. 667, 28 L. Ed. 291, 4 Sup. Ct. 185,

quires one of the component companies of a connecting through line to grant to a competitor of any of the other companies the same privileges that are accorded to its associates, simply because the tracks of the competing company unite with its own and admit of a free and convenient interchange of business. The line is made up by the contracting companies to do business as carriers for the public; and companies, whose roads do not form part of the line, have no other rights in connection with it than such as belong to the public at large, unless special provision is made therefor by the legislature or the contracting companies."

The decree entered by the trial court had fixed, in detail, rules and regulations for the working of the Atchison, Topeka and Santa Fe and Denver and New Orleans roads, in connection with each other as a connecting through line and, in effect, required the Atchison, Topeka and Santa Fe Company to place the Denver and New Orleans Company on an equal footing as to the interchange of business with the most favored of the competitors of that company, both as to prices and facilities, except in respect to the issue of through bills of lading, through checks for baggage, through tickets and, perhaps, the compulsory interchange of cars.

The Supreme Court goes somewhat at length into the history of state legislation with reference to connections between carriers and holds that "such matters are and always have been proper subjects for legislative consideration" and that remedies for failure to make connections or to make connections without discrimination "can only be obtained from the legislative branch of the government." The court then discussed the "undue preference clause" of the English Railway and Canal Traffic Act of 1854 and said:

"Were there such a statute in Colorado, this case would come before us in a different aspect. As it is, we know of no power in the judiciary to do what the Parliament of Great Britian has done and what the proper legislative authority ought perhaps to do, for the relief of the parties to this controversy.

"All the American cases to which our attention has been called by counsel relate either to what amounts to undue discrimination between the customers of a railroad, or to the