The San Francisco call., 1904-11-29
Judge Morrow Decides in Fa-
yor of the Corporations
and Against Commission
STATUS OF SHORT HAUL
Attorney for the Federal
Board Failed to Prove
the Charges Unreasonable

| OAANAAN ou0SC hOllONs AA AAA-
opinion Judge Morrow exhaustively
discusses the case and decides that
the Interstate Commerce Commission
is not vested with legislative powers
4 to establish rates and that it had not
! been shown that the rate complained
! of on sugar from San Francisco to
I Kearney, Nebr, was unreasonable per
Sc. The suit was entitled The Inter
! state Commerce Commission VS.. the
| Southern Pacific Company, the Union
| Pacific Railway Company and s. H.
II. Clark, Oliver W. Mink, e. Ellery
Anderson, John w. Doane and Freder-
lex R. Coudert, as receiver of the
Union Pacific Railway Company. and
the Union Pacific Railroad Company
as successor of the Union Pacific Rail-
way Company.
This was a suit in equity TO restrain
the defendants from collecting certain
freight charges on sugar in violation
of the order of the Interstate Com
merce Commission. The facts of the
case, as found by Judge Morrow, are
as follows:
On December 0, 1890, A. ]. Gustin. a
resident of Kearney, Nebr., filed a pc
tition with the Interstate Commerce
Commission alleging that the South
ern Pacific Company. Union Pacific
Railway Company and it's successor,
the Union Pacific Railroad Company,
had violated the interstate commerce
act, in that they had charged a rate
of n cents per 100 pounds on sugar in
carload lots from San Francisco over
their joint through line to Kearney,
Nebr, while at the same time charging
30 cents per 100 pounds on the same
freight for the longer haul through
Eearney to Omaha. On March 3, 1900,
the commission found the charges COM
planned of to be in violation of the act
and ordered that the defendants desist
from making them.
1t is alleged in the present suit that
the defendants willfully violated this
order of the commission. The commits
sion asked for writ of injunction or
other process restraining defendants
from furt her disobedience to the order
and requiring them to pay the costs
and counsel fees. The defendant rail-
way companies filed answers admit
ting that they had charged the rate
mentioned, but denying that it was in
violation of law, alleging that the
lower rate to Omaha Than to Kearney
was forced upon them by competitive
conditions beyond their control, name
ly, water and rail rates through the
Dominion of Canada and water COM
petition to and from the Atlantic and
gulf ports.
Judge Morrow said that while the
commission had determined that
int ~, hn
TRANSPORTATION Of sugar, and that the
defendants were forced to make the
rate of 50 cents per 100 pounds from
san Francisco to that poirt it did
not determine that the rate of - cents
per 100 pounds to Kearney was unrea-
sonable per Sc. but that it was only
relatively so. In other words, by COM
pairing the rate of II cents per 100
pounds from San Francisco to Kear-
ney, the shorter distance, with the rate
OF 80 cents per 100 pounds from San
Francisco to Omaha. the longer dis
tance, the commission reached the con-
clusion that tie greater charge for
the shorter distance was relatively un-
reasonable. The question had been
submitted to the court whether this
difference of 27 cents per 100 pounds
between the rates to Kearney and
Omaha was unreasonable.
Judge Morrow, after quoting the
cases Of Texas and Pacific Rail-
way VS.. Interstate Commerce Commis-
sion and East Tennessee Railway
Company VS.. Interstate Commerce
Commission, says:
1t follows that unless the greater charge for
the shorter haul is in and Of Itself unreason-
able, and the lesser rate charged for the longer
haul s voluntary. the prohibition Of the third
section of the act does not apply. IL is true
that in this court it is contended that the
support Of this contention il is urged that the
unreasonableness of the Kearney rate appears
livered at Kearney direct the Kearney rate
is made up OF the rate for the haul through
Kearney and 100 miles beyond to Lincoln.
competitive point plus the local rate Of %
cents per 100 pounds from Lincoln back to
Kearney, and that the kearney rate embraces
charges for two hauls ,aggregatlpg 300 miles
not in fact made. The attention offthe court
is also called to statement or the average
eastbCund rate per ton per mile maintained
by the Union Pacific Railroad Company on
Pacific Coast business for number Of years,
from which it appears that the local rate of
2T cents per 100 pounds from Lincoln to Kear-
ney is In excess Of such average rate. But
after 1t has been determined that Omaha is
an active competitive point. and the rate to
that point has been reduced by competition,
finding by the commission upon evidence be-
fore IL that the rate of AZ cents per 100 pounds
from San francisco to kedrney is In and or
itself unreasonable. This was the defect in
the proceedings before the commission in the
case of Interstate Commission VS.. Louisville,
etc. r. r. Co., 1870 u, S. 273, where the
Supreme Court pointed ont that there
nothing in the proceeding to sustain the view
that the commission had adjudSed that the
higher rates for the shorter hauls were in and
of themselves unreasonable, irrespective of the
competitive conditions prevailing at a point
on the longer haul where a lesser charge had
been established by force of competitive con-
dtions.
1t is to be observed, further, that while there
is no finding Of fact in this case upon which
the order of the commission can be based. the
evidence itself is not believed to be sufficient
TO support the order The evidence before the
court on the contrary, appears to be sufficient
to support finding that the Kearney rate in
and of itself was and is reasonable But in
view Of what has been said 1t will not be
necessary to review the evidence upon that
question Nor will II be necessary to con-
slider the objection that the order of the com
mission seeks to fix and establish rates, a
legislative power the commission does not pos
under the statute. Interstate Commerce
Commission Alabama Midland Ry. Co., 16S
u. q. IA 161. 162. Neither will IL be neces-
sary to discuss the question whether the Union
Pacific Railroad Company is bound by the
order of the commission by reason of the fact
that II was not originally party to the COM
plaint before the commission. The conclusion
reached is thai the bill has not been sustained
for the reason stated, and should be dismissed.