New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1911-07-25
RAILROADS LOSE AGAIN
Pacific Coast Freight Rate RuI-
ing Against Them.
NEW PRINCIPLE is FIXED

Interstate Commerce Commits
sion Holds Roads Cannot
Set Market Limits.
Washington, July 2t-The Interstate
Commerce Commission to-day ordered a
material reduction I'm freight rates from the
East 10 points between Denver and the
Western terminals of the great transconti-
mental railroads The ruling was made in
the Spokane Reno-Pacihc Coast cases.
Fcr many years the railroads have ex-
acted from shippers to intermediate points
such as Spokane and Reno, higher rates
on Eastern freightS than were Charged for
! the much longer hauls 10 Seattle, San
Francisco and other Pacific Coast points
| The theory has been that the railroads
must meet water competition to tho Pacific
Coast. The higher rates 10 intermediate
points, arbitrarily fixed, have been defend
ed by comparison with the Coast rates.
plus theoretical back haul from tho Coast
to the inland stations along the line.
The commission recognizes the right OF
a railroad 10 meet water competition 10
Pacific Coast points. but practically elm
mates the back haul rates TO iIter-Rocky
Mountain territory. 1t lays down what II
considers would be fair and Just rates 10
| freight zones in the West and gives the
railroads until October Is to adjust their
tariffs.
/ The commission also lays down the I'M
/ portant principle that hereafter railroads
| will not be permitted to fix arbitrary mar
! ket limits and that hereafter commercial
! conditions rather than the will OF rail-
way traffic managers shall control rates
on transcontinentsl transportation.
Wide Territory Affected,
! The decisions announced late to-day af-
/ feet directly all freight rates between the
Atlantic Ocean and the Pacific Coast. Par
/ ticularly they affect the rates N tho terri
/ tory lying between Denver and Pacific
/ Coast points. Hereafter the rates paid BY
shippers Will be governed by strict inter
probation Of the long and short-haul clause.
The commission holds IN the so-called
| Reno case that traffic originating in Chi
cago and in Chicago territory moving under
! commodity rates may have rate per
cent higher 10 intermediate points than
| that imposed on freight originating in Chi
]
Pacific Coast terminals. From Buffalo
/ Pittsburg territory the rates may rise
above those demanded from the same
points 70 Pacific Coast terminals 70 the
| extent az j. per cent. while from New
/ York and trunk line territory tho rates
charged shall not exceed % per cent over
/ Pacific Coast terminal rates.
! Those are the frst decisions announced
/ by the commission IN which definite prin-
| ciple I'm respect 20 the long-and-short haul
provision IS laid down. Although the opin-
! ions fully recognize the influence Of water
| competition. 10 a marked extent they draw
a Inc on indiscrminatc market comper-
/ tion The effect Of the decisions will be 70
| inform the carriers they will be permitted
/ 70 meet water competition 70 reasonable
/ extent. but that the location Of markets
! hereafter will be left more 20 the play or
commercial causes than 70 the WI Of the
traffic managers % RAILWAYS.
The cases arc those Of tho city ~ Spo-
/ kane against the Northern Pacific Railway
/ COMPANY, tho Commercial club OF salt
! Lake CITY against the Atchison Topeka q
Santa re and others, the Railroad Com
mission of Nevada against tho Southern
Pacific Company and others and the Mari
coma County Commercial club against the
Santa Fs. Prescott e. Phoenix Railway
7 COMPANY and other carriers. As the cases
generally dovetail, the commission an
nounces its decisions in two opinions.
/ Stands by Old Ruling.
The commission takes the view rhich u
I took in its opinions Of the same cases ar %
nouncAd A wear ago last June" Az That
time the commission said II would make no
order respecting the rates which Il snS
rssfsd might he put into effect until II had
/ had an opportunity 20 determine from re-
norris made 10 II by the carriers Of the
nrobablo effect Of the suggested rates.
! Meantime. tho carriers have submitted 30
| che commission their earnings under tho
/ old rates and what would have been their
! earnings under the rates proposed. Ihose
| tab,,lated statements have CONVINCED inc
! commission that the rates determined upon
/ NV the commission in its decisions OF Juns
/ : 1910. were generally fair and reasonable
/ The commission says that there Is no rea-
| son why those rates should not no" DC
established.
| The commission says
! rho corplainants contend that the pro
| ,iso IN the amended section, peIIuit tI.,a
| the commission 10 authorize IN pa. -. ,''a !.
/ instance tho charging OF higher rate ~
t T., ter,,ediate pcint is void a dele
| CATION OF Legislative authorily ma. t,. "a
/ ssEould be rejected and the section apphep
| ~ Ito commission as though II were M
| absolute long and short-hau prOhlDil'oh'
/ This contention IS not sustained -,
| 'rba defendants contend that inc ouly
! effect Of the amendment - 20 cast upon IN
rsrriers the burden of assuming the inItid-
/ ito in iustifying the higher rate ~ me
/ i,,er,3edisto point II upon investigation
/ - a. found that competition exists az the
moro distant point ana hol AZ w ,,'-,
n,eiia,o point then the commission mus I;
| without further inquiry grant the reHet
! sesad for. # no such competition exists II
| must dcnv tho application. This conten-
I ttor H. not sustained.
''TI,' ar,andlng thu fourth section by strik-
/ 30, out tho words "gimilar circumstances
/ Nd conditions" Congress INTENDED 10 IN
/ vest the commission win autnor',. IT,
/ from the disregard for the long d-shor' .
/ I.ul provision. but also 10 correct that
wrong If IT. was found 10 exist.
Cannot Act Arbitrarily.
g. determining whether thA carriers
| sbau ne permitted 20 make the higher IN
| +ern,adiate charge the commission cailnot
| act arbitrarily. but must apply tIe pll!ti-
| ~ other portions of the. act ~ must IN
oi,ira whether the maintenance or ths
| higher Intermediate rate VIII result IN un
! liz r,bia charges or unjust discrimina
| lions II 80. the permission must be re-
| fused otherwise II must be granted.
The commission may prescribe ~ an
vav that is definite ana ,ertalh lle y
,ort IN which the intermediate rate may
exceed the long distance rate IN cases
ubera this IS necessary ia prevent unrea-
sonsble rates and unjust determinations q.
The transcontinental carriers, therefore,
aro ordered 20 resdiust their present rates
49,