Interstate Commerce Commission v. Southern Pac. Co.

132 F. 829, 1904 U.S. App. LEXIS 5051
CourtU.S. Circuit Court for the District of Southern California
DecidedSeptember 6, 1904
DocketNo. 1,039
StatusPublished
Cited by2 cases

This text of 132 F. 829 (Interstate Commerce Commission v. Southern Pac. Co.) is published on Counsel Stack Legal Research, covering U.S. Circuit Court for the District of Southern California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Interstate Commerce Commission v. Southern Pac. Co., 132 F. 829, 1904 U.S. App. LEXIS 5051 (circtsdca 1904).

Opinion

WEEEBORN, District Judge.

This proceeding, brought under sec- ^ tion 16 of the act to regulate commerce (Act Feb. 4, 1887, c. 104, 24 Stat. 384 [U. S. Comp. St. 1901, p. 3165]); was before me some time ago on demurrer to the complaint, and the order sought to be enforced is set forth in my opinion filed on that hearing and reported in 123 Fed. 598. The defendants are initial carriers for the transportation of citrus fruits of southern California to points on and east of the Missouri river. The termini of the Southern Pacific Company are at Ogden and El Paso. The Santa Fé terminal is at Chicago. The points of destination located beyond these termini are reached through connecting carriers. Pursuant to a previous agreement between the defendants and their Eastern connections, effected through correspondence opened by the circular letter of R. H. Countiss, agent, dated October 9, 1899, hereinafter set forth, and sent out at the instance of defendants to their said connections, a joint tariff relating to citrus fruits, and fixing a through rate thereon of $1.25 per 100 pounds, from southern California to all points east of the Missouri river, was filed with the Interstate Commerce Commission, on January 1, 1900. Said tariff embodies, among other things, the rule or regulation, whose enforcement the order of the commission forbids, and which was one of the terms of said agreement, and which, with the directions given by defendants to their agents, is as follows:

“In guarantying the through rate named herein, the absolute and unqualified right of routing beyond its own terminal is reserved to initial carrier giving the guaranty. In accordance with this rule, agents will not accept shipping orders or other documents, if routing instructions are shown thereon. Neither will agents accept verbal routing instructions.”

Prior to said agreement the keen rivalry existing between defendants’ Eastern connections led to a far-reaching system of rebates, which was violative of the commerce act, and cannot be too strongly reprobated. Among the participants in this system were certain incorporated companies owning ventilator or refrigerator cars, which were peculiarly adapted to the carriage of citrus fruits, and were hired by the initial carriers because they did not want to own equipment which they could keep in service only a part of the year, while the car companies could use the equipment for other business in other parts of the United States during the lull in the orange trade. Mr. Morton, then second vice president of the Atchison, Topeka & Santa Fé Railway Company, after testifying, in effect, that these car companies made arrangements with the connections of his company east of Chicago and the Southern Pacific connections east of its different termini to get a certain bonus of from $10 to $40 per car in consideration of the car being routed over the line paying the bonus, a part of the bonus, varying from one-quarter or less to one-half, being usually turned over to the shipper by the car company for the privilege allowed it ,of rout[831]*831ing the shipment; that the connections of the Southern Pacific Company between Ogden and the Missouri river would pay $15 per car, and the connections between the Missouri river and Chicago would pay $10 a car, making $25 a car that the Atchison System would have to pay or forego the business; that it made no difference to the Atchison System whether the cutting in the rate was entirely west of Ogden, or east of Ogden, or at El Paso, or whether the cut was made by the Southern Pacific, or by some connection of the Southern Pacific; that, so far as cuts in the rate east of Chicago were concerned, the Atchison System was generally able to secure for oranges moving over its line the same concession made on shipments originating on the Southern Pacific coming east by the Southern Pacific, the Atchison System paying over to the shipper what it received from the connecting line — proceeds as follows;

“Now, it cost our car company the last year, the year preceding 1900, quite a large amount of money to meet this competition, and shippers in southern California who did not get the full benefit of this reduction, and who had to divide it with Mr. Earl and others, naturally were indignant, and it was in order to prevent that state of affairs solely, and for no other reason in the world than to maintain legal rates, that we took the routing of this business into our own hands. * * * Q. You stated a moment ago, as I understood, that your sole object in assuming control of the routing was to put an end to this rebate and cutting of the legal published tariffs? A. Yes. * * * Certainly. This cutting of rates was all done secretly. There was no publication of tariffs, or anything of the kind. It was all in violation of the interstate commerce act. Q. And in violation of your published tariff? A. And in violation of our published tariff. Q. That is what I wanted to get at. Now, you stated that the sole purpose of assuming control of the routing was to do away with the condition that you have described. A. That was, I won’t say the sole purpose, but the chief purpose. I might say the sole purpose was to maintain our rates. * * * Q. Now, you have stated the purpose of taking into your hands the routing of this citrus business, namely, the stopping of rebates and this secret cutting of the published tariff rates. Was this stopped? A. It was. Q. Definitely and fully? A. Absolutely. Q. And in the opinion of the Interstate Commerce Commission the statement is made that it is not clear how that would stop it. Could you illustrate or explain how? A. Well, every connection was given to understand that, in case they were found offering concessions for this citrus fruit business after the 1st day of January, 1900, we would see to it that the business was diverted from their lines; and I remember going so far as to say that, if I found anybody cutting our through rates secretly after the 1st of January, 1900, we would not only divert the citrus fruit business from them, but we would take away other business; that it was our intention that the published tariff rates should be absolutely maintained; and that was done in the interest of the small shipper, and in the interest of not having any discrimination in that business. Q. If the initial carrier assumed the routing of the shipment, the connecting carrier would be in no position to bid for the business of a connecting line, would it? A. No. When we took the routing of this business into our hands, the Eastern connection had to do business with us, instead of the car company or the shipper.”

Mr. W. A. Bissell, assistant traffic manager of the same company, testifies on this subject as follows:

“Q. Had the business of citrus fruit shipping been leaving you before you established this practice of routing? A. Yes, sir. We made several endeavors. We tried the costly experiment of being honest in this thing, living up to the law as we understood it, and declining to pay rebates; and we lost so much business that we found we had got to do as the Romans did, and, as there seemed to be an idea that the ear lines were exempt from the interstate law, [832]*832which provided Imprisonment for railroad men caught doing this thing, we had to arrange to do our business through an outside ear line. Q. Did you have a car line operating on the Santa Fé? A. Well, we had. We didn’t have an outside organization until this rebate business came up. We then provided an outside organization, and leased our cars to it, in order to endeavor to hold the business to us that we thought rightfully belonged to us. Q.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
132 F. 829, 1904 U.S. App. LEXIS 5051, Counsel Stack Legal Research, https://law.counselstack.com/opinion/interstate-commerce-commission-v-southern-pac-co-circtsdca-1904.