§ 163. Long-and-Short-Haul Clause under Act of 1910.Congress, in 1910, for the first time since the passage of the Act to Regulate Commerce, amended the so-called long-andshort-haul clause of the Act (Sec. 4). The Amendment struck out the words of the former law "under substantially similar circumstances and conditions," but gave the Commission power, upon application and after investigation, to grant relief from the operation of the section as amended.9s Construing the amended Act, the Commission held it constitutional; held that its provisions granted the Commission power to determine how far relief should be extended; power to determine whether or not a wrong resulted from a particular application of rates, and power to correct that wrong if found to exist. The history of the old and the new law was given and the conclusion reached that, while in determining what relief should be granted under the power conferred by the proviso, the Commission could not act arbitrarily, but must apply the principles controlling in administering other portions of the Act. Applying this conclusion to transcontinental transportation, the Commission divided the United States into zones and fixed a rate percentage between the different zones.99 Suit being filed in the Commerce Court, that court enjoined the order of the Commission.100 An appeal being taken to the Supreme Court, that court reversed the Commerce Court and sustained the validity of the statute, thus leaving in force the orders of the Commission.101 Parsons v. Chicago & N. W. Ry. Co., 167 U. S. 447, 42 L. Ed. 231, 17 Sup. Ct. 887; Int. Com. Com. v. Detroit, G. H. & M. Ry. Co., 167 U. S. 633, 42 L. Ed. 306, 17 Sup. Ct. 986; Louisville & N. R. Co. v. Behlmer, 175 U. S. 648, 44 L. Ed. 309, 20 Sup. Ct. 209; East Tenn., Va. & Ga. Ry. Co. v. Int. Com. Com., 181 U. S. 1, 45 L. Ed. 719, 21 Sup. Ct. 516. See also Int. Com. Com. v. Clyde S. S. Co., 181 U. S. 29, 45 L. Ed. 729, 21 Sup. Ct. 512; Brewer v. Central of Ga. R. Co., 84 Fed. 258; Int. Com. Com. v. Western & A. R. Co., 88 Fed. 186. 98 Sec. 432, post. Also old and new law contrasted, Atchison, T. & S. F. Ry. Co. v. United States, 191 Fed. 856, 857, and Railroad Com. of Nev. v. So. Pac. Co., 21 I. C. C. 329, 332, 333. 99 Railroad Com. of Nevada V. Southern Pac. Co., 21 I. C. C. 329; City of Spokane v. Northern Pac. Ry. Co., 21 I. C. C. 400. 100 Atchison, T. & S. F. Ry. Co. v. United States, 191 Fed. 856. 101 United States v. Atchison, T. & S. F. Ry. Co., 234 U. S. 476, 58 L. Ed. 1408, 34 Sup. Ct. 986, reversing Atchison, T. & S. F. Ry. Co. v. United The right primarily to determine for themselves the existence of circumstances as a basis of charging higher rates for shorter than for longer distances was taken from the carriers and vested in the Commission by the Amendment of 1910. This fact was stated by the Supreme Court, following which statement it was said:102 "This results from the fact that by the amendment in question the original power to determine the existence of the conditions justifying the greater charge for a shorter than was exacted for a longer distance, was taken from the carriers and primarily vested in the Interstate Commerce Commission, and for the purpose of making the prohibition efficacious it was enacted that after a time fixed no existing rate of the character provided for should continue in force unless the application to sanction it had been made and granted." § 164. Long-and-Short-Haul Clause Under Act of 1920.— For years there have been advocates of a provision which would unqualifiedly prohibit a greater charge for a shorter than for a longer haul over the same line or route in the same direction. The Amendment of 1920 (Section 433, post) is a compromise between such advocates and those who were satisfied with the Amendment of 1910. The quotation concluding Section 163, ante, is ample authority to sustain the Amendment of 1920. The purpose of such Amendment was further to restrict the power of the Commission in granting relief from the operation of the long-and-short-haul rule, and the Commission has recognized the restrictive effect of this Amendment since its passage in numerous decisions on petitions for fourth section relief. The Commission can now only grant relief from the operations of the fourth section of the Act under application of the carrier or carriers concerned, after investigation, and only in special cases. The Commission is authorized from time to States, 191 Fed. 856, supra, and sustaining order of the Commission in 21 I. C. C. 329 and 400, supra; Opinions Commerce Court Nos. 50, 51, p. 229 (Intermountain Case ''). 102 United States v. L. & N. R. Co., 235 U. S. 314, 59 L. Ed. 245, 35 Sup. Ct. 113, citing Intermountain time to prescribe the extent to which a designated common carrier may be relieved from the operation of such section, but in exercising this authority the Commission may not permit the establishment of any charge to or from the more distant points that is not reasonably compensatory for the service performed. If a circuitous rail line or route is, because of such circuity, granted authority to meet the charges of a more direct line or route, such authority shall not include intermediate points as to which the haul of the petitioning line or route is not longer than that of the direct line or route between the competitive points; and no such authority may be granted on account of merely potential water competition which is not actually in existence. In U. S. v. L. & N. R. R. Co., 235 U. S. 314, 59 L. Ed. 245, 35 Sup. Ct. 113, the Supreme Court declared that Sections 2, 3 and 4 of the Act are in pari materia and require a harmonious construction. This decision was rendered prior to the Amendment of 1920, but presumably such principle of construction is still applicable. In an application by transcontinental carriers for relief from the operation of the fourth section of the Act in connection with rates on lumber which for years had been published and maintained under a group arrangement as to points of origin and destination,103 the Commission, by a majority of one, declined to grant relief without the observance of the so-called equi-distant clause in order to enable the carriers to maintain the established grouping of origins and destinations, which the carriers contended constituted a special case, it being held by the majority that the fourth section as amended does not authorize the Commission to grant relief in such circumstances. The decision in this case contains an interesting discussion of opposing views relative to the Commission's power to grant 103 Commodity Rates on Lumber and Other Forest Products, 151 I. C. C. 763. For other cases involving applications for relief from the amended fourth section of the Act and for the Commission's views relative to the meaning and purpose of the amended provisions of such section, see Southern Class Rate Investigation, 100 I. C. C. 513, 109 I. C. C. 300, 113 I. C. C. 200, 128 I. C. C. 567; Consolidated Southwestern Cases, 123 I. C. C. 203; Pacific Coast Fourth Section Applications, 129 I. C. C. 3; Fourth Section Departures, 129 I. C. C. 187; Coal and Coke from Kentucky, Alabama and Tennessee, 151 I. C. C. 543. relief from the fourth section in special cases. An application for rehearing was filed by the carriers in this case. § 165. Fourth Section-Relation Between Through Rates and Intermediate Rates. That through rates should not exceed the sum of the local rates and that, prima facie, the through rates should be less than the aggregate of the locals, were general principles announced and applied by the Commission prior to the Act of 1910. The Amendment contained in that Act made it illegal for a carrier "to charge any greater compensation as a through rate than the aggregate of the intermediate rates subject to the provisions of" the Act.104 The Commission has assumed to grant relief from this particular clause of the fourth section as it has done and certainly was authorized to do with respect to the provision relating to long and short hauls. The purpose of the Amendment was to fix one method of measuring rates and to prevent unjust discrimination. Obviously, two or more hauls over intermediate lines should cost more than one haul over the same lines; therefore, to charge more for what costs less is unjust discrimination. The subject has been discussed, ante, Sections 125, 126 and 127. The decision of the Supreme Court in Patterson v. L. & N. R. R. Co., 269 U. S. 1, 70 L. Ed. 131, 46 Sup. Ct. 131, sustained the jurisdiction of the Commission over applications for relief from the operation of the aggregate-of-intermediates clause of the fourth section. § 166. Discrimination Between Carloads and Less than Carloads. A differential between carload and less-than-carload shipments is not prohibited by the Interstate Commerce Act, and the Commission has said:105 "It is a sound rule for carriers to adapt their classifications to the laws of trade. If an article moves in sufficient volume, and the demands of commerce will be better served, it is reasonable to give it a carload classification and rate. The carload is probably the only practicable unit of quantity." Whether or not there should be a differential and, if any, what, between carloads 104 Sec. 247, post. 105 Thurber v. New York C. & H. R. R. Co., 3 I. C. C. R. 473, 2 I. C. R. 742. and less than carloads depends upon the facts and circumstances of each particular case. One of the most important facts to be considered is the difference, if any, in the cost of service. Noyes, in his excellent work on American Railroad Rates,106 says: "Shipments in carload lots furnish a large paying freight relative to dead weight, and smaller proportionate expense for loading and unloading, billing and collecting, than small shipments." The differential, like a rate, should be reasonable and should be fixed with a view to the just interests of all concerned and the adjustment of this difference rests primarily with the carriers.107 This principle has been very generally recognized by carriers. The number of commodities taking carload classifications has materially increased. This progressive recognition of the law that it is unjust discrimination to charge for a less expensive movement the same as for a more expensive one, would seem to justify the hope that this form of discrimination may eventually be abolished. While the Commission has always shown reluctance to require the establishment of carload ratings, it has, in order to prevent unjust discrimination, ordered carriers to make such a rating.108 The question is discussed in Sections 119, 120 and 121, ante, and there is a full review of the authorities in the Taylor Dry Goods case.109 106 Noyes, American Railroad Rates, 73. 107 Business Men's League of St. Louis v. Atchison, T. & S. F. Ry. Co., 9 I. C. C. 318, 358, 359, 368; Califorria Com. Asso. v. Wells Fargo Ex. Co., 14 I. C. C. 422; Scofield v. Lake S. & M. S. R. Co., 2 I. C. C. 90, 2 I. C. R. 67. 108 Spokane v. N. P. R. Co., 19 I. C. C. 162. 109 Taylor Dry Goods Co. v. M. P. Ry. Co., 28 I. C. C. 205. In the 1915 Western Advance Rate Case, 30 I. C. C. 497, 495; Chicago Wool Co. v. C. M. & St. P. Ry. Co., 40 I. C. C. 101; Southeastern Cotton Goods, 43 I. C. C. 530, 536, and Consolidated Classification Case, 54 I. C. C. 8, the Commission continues its "progressive recognition" of the text of this section written in 1909. In Wyeth Hdw. & Mfg. Co. v. A. T. & S. F. Ry. Co., 39 I. C. C. 697, 700, the Commission came near to a retrograte movement. The question is further discussed in Southern Class Rate Investigation, 100 I. C. C. 513, and in National Asso. of Ink Mfgrs. v. A., T. & S. F. Ry. Co., 151 I. C. C. 777, the Commission stated that a third-class rating, less than carload, and a fifth-class rating, carload, represented a normal spread in rates. |