St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1888-09-20
Charges for Long and Short
Eauls Must Have Equal
Basis.
Incidentally the Interstate
Commission Gives the Bur-
lington a Rub.
Upon It's Own Showing Its
Crates Seem to Be EX-
eeSSiVe.

st. Paul & Kansas City Railroad COM
pany. This company in June last noti-
fed the commission that owing to the
action of competing lines covering rates
between Chicago, st. Paul and Mime
apolis, it had been obliged to reduce its
own rates between these points below
the rates which it could afford to accept
to intermediate points, so that upon its
line there would be greater charges
made upon the shorter haul than upon
the longer in the same direction, and it
stated that if complaint should be made
of this it would undertake to JUS
tify its action under the in
terstate commerce law. The com
mission thereupOn made an order for a
hearing to be held at Dubuque, at which
the company would be called upon to
Justify its action and for public notiiica-
ton. so that other companies Interested,
and also any commercial organizations
or any other party desiring to be heard,
might have the opportunity. y hearing,
was accordingly had, and on the hear
ing the respondent company gave evil
dence tending to show that the action
it had taken was forced upon it by the
Burlington & Northern Railroad COM
pany, which had made a rate between
Chicago, st. Paul and Minneapolis be-
low that which would be compensatory,
and below what it was possible for any
competing lines to make
WITHOUT ACTUAL LOSS,
and it produced evidence tending
strongly to show that the Burlington d
Northern OH the rates it was making
was not paying operating expenses.
The Chicago, Milwaukee d st. Paul
road also appeared and offered similar
evidence, taking a similar position to
that of the respondent company. The
Burlington IL Northern, on the other
hand. was represented by its general
officers, and insisted that its rates were
TemuneTatiYe, and showed that it was
accepting them without making at any
point the greater charge upon the short
er haul. The evidence that its receipts
were sufficient to cover operating eX-
penSeS were not very strong, and
it clearly appeared that for the
current year it was falling behind.
The respondent company insisted that
the commission should either sanction
the rates it was making to intermedi-
ate stations between its termini. which
were rates fair in themselves, or that it
should order the Burlington d North
ern TO increase its rates between Chi
cago and st. Paul and Minneapolis so
as to make them just and reasonable to
the carriers themselves, as well as to
the public-in other words, TO make
them fairly remunerative-and 1t was
insisted that the provision of the inter-
state commerce law that all charges
shall be reasonable and just was not
complied with unless they were reason
able and just considered from the
cfon6Rnint nf fhn ilrnan =
we'll as from that of the general public.
The Burlington Il Northern, it was
therefore cOntented, was in constant
violation of the interstate commerce law
in making the rates SO low that neither
itself nor its rivals could accept them
without steady and destructive drain
upon their resources. The principal
question, therefore, IaiSed before the
commission at the hearing was whether
it had the power to compel the Durling
ton 81 Northern to increase its rates to
remunerative point, If they were found
to be below that point.
THIS QUESTION Is DISCUSSED
in the opinion. The commission dis
claims possessing any such power. 1t
holds that congress, in the provision re-
curing all rates to be reasonable and
Just, was legislating for the protection
of the general public and not for the
protection of railroad companies against
the action of their own managers, or
against the unreasonable competition of
rivals, and that it was never i'll the con-
temptation of congress that it should be
within the power of the commission to
order an increase of rates which, in its
opinion, ought to have been made higher
than they were. In this respect it was
supposed that the railroad companies
had ample remedy in their own hands,
in the authority which they possessed
to make rates. and that the protection
needed from the government was the
protection of those who would be COM
PEELED to pay the rates that should thus
be made. The further question was
discussed whether the fact that the
Burlington q Northern made rates
which were unreaSOnably low made out
the diSsimilar circumstances and cOndi
tiOnS, under the fourth section of the
act, which would entitle the respondent
company to make a greater charge on
the shorter haul. The respondent con-
tended that if the commission could not
control the making of
DESTRUCTIVELY LOW RATES
the competition of railroads which
were subject to the act to regulate COM
merce was Just as harmful as was the
CUHiDtllllUll Vi NCOSClO VI ljlC IOllipGll-
ton of railroads not subject to the act,
and therefore the competition of the
Burlington & Northern at the terminal
points of respondents road established
such diSSimilar circumstances and con-
ditiOnS as justified its charging less at
such terminal points than at intermedi-
ate stations. The commission does not
assent to this view. The showing of
respondent is merely that a perveTSe
rival makes unreasonably low rates to
the terminus of its road, but if this
makes out the dissimilar circumstances
and conditions intended by the fourth
section of the act, then any one railroad
manager in the NorthWeStmay at pleas
ure, by
y FOOLISH TARIFF SHEET,
give to one or more points of railroad
competition preference and advantage
over all others and this would defeat
one of the leading purposes had
in view in adopting the act. which was
to put an end TO the determinations
which before were so common between
different localities. The act itself
would therefore, as to one of its leading
purposes, be dependent on the will of
any single railroad manager who from
policy OF pcrVerSity might see fit to
nuIlifV it. The effect of the doctrine
contendcd for on the part of the re-
spondent would be that railroad COM
panies, if they chose to do SO. may at will
build up a single point in the Northwest
to preponderating and conclusive as
tendency at the expense of all Others,
Giving 1T rates which in proportion
would be mere fraction of what other
localities must pay might fix its ascend
ency with little regard to natural OF
other advantages. 1t will not do to say
that the rates to intermediate stations
are Just and fair in and of themselves
The question of what are just and fail
rates is always relative. Low rates to
one place may not be just and fair il