The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1911-12-20
Says It's Work Is Nullified BIZ
Judicial Body.
WORK OF THE YEAR
Is Reviewed in It's Annual Re-
port to Congress.
Recites History of the Trans
continental Rate Cases.


mission transmitted to congress to-
day.
The issue is made principally upon
what popularity is known as the
"transcontinental rates cases. involv-
ing freight rates from the Atlantic to
the Pacific coast terminals and to in
termediate points. Existing rates of
the transcontinental lines from east
ern points to inter-Rocky mountain
cities are materially higher than to
Pacific coast terminals. In a decision
interpreting the long-and-short haul
provision of the present law, the in
terstate commerce commission. direct
ed, by order, that a relation of rates
cific coast and points of origin in five
zones, into which the United States
was divided.
The effect of the order was to re-
duce rates to inter Rocky mountain
cities and prevent the railroads from
exacting from shippers the Pacific
coast rate plus the local rates from
Pacific coast terminals to the inter
commission, on application of the
transcontinental carriers were enjoin-
ed by the commerce court and the
matter has been carried on appeal to
the United States supreme court.
Waste of Transportation.
It it's report to congress today the
commission declares that ''it is a waste
Of transportation and therefore un-
system of tariffs which are expressly
intended to develop the Pacific coast
cities and to arrest the developrn ent of
the interior points.
1T is impossible to diSassociate the
intermedia from the long distance
point. Whether the intermediate rate
is reasonable depends upon what rate
is made to other points on both sides
of it, and to permit the railroads of
this country to select points where
they Will and where they will not COM
pete would be intolerable."
In discussing the effect of water COM
petition upon rates the commission says
that it cannot fix a rate from New
York to San Francisco below which the
rail line shall not go, for it has no
authority to fix a minimum rate There
is, therefore, no way in which it can
prevent discrimination by the fixing Of
an absolute rate at San Francisco and
another absolute rate at Reno. 1t can
only accomplish this purpose by pre-
perly exist owing to the effect of this
competition and allowing the carrier to
make whatever rate it sees fit to the
more distant point long as it OBJ
serves this differential.
On the Ground of Competition.
The report indicates the desire or
shippers from points in the interior
of the country to obtain the same rates
to the Pacific coast that are accorded
by the railroads to their competitors on
the Atlantic seaboard. The rates are
made the same by the transcontinental
lines on the ground of market compe-
tition.
ITO justify their rates from coast TO
coast" says the report, the railroads
advance water competition, and to jus
tify the same rates from interior points
TO Pacific coast points they rely on
market competition, under which they
give lower rates from all the interior
cities tWo-thirdS of the way across the
continent to the same coast cities than
to intermountain points This is the
kind of discrimination the commission
has attempted to minimize
While the commission recognizes the
full effect Of water competition upon
the rail rates it says I'VE have the
frank admission of the railroad mana
gers that they have subsidized or
bought some of the steamship lines and
terrorized others until they can make
the boast that the effect OF the sea mas
been neutralized-''
"A railroad policy Of rate making
must certainly be subject to Hmita-
tons of the law, or else there is no law.
To say that there is a long-and-short-
haul section under which a carrier may
not charge more for the shorter than
for the longer haul. but that the rail-
roads may, to any extent they please,
carry out a policy of blanketing the
country for the benefit of the farther
points and not the nearer points, is to
say that a railroad may, without re-
straint, effect a ruinous discrimination
and give no justification save its own
discrimination or whirn. There can be
no regulation of rates as to discrimina-
ton OF preference under such an inter-
probation of the law
No Other way.
THE commerce court intimates that
the mistake of the commission is in
having attempted to fix a relation of
rates instead of establishing reason
able rates; but as We have already
fd Y in wi Ph
the discrimination found to exist in
these tariffs can be prevented except
by fixing a differential. since We have
no power to establish an absolute rate
or fix minimum charge below which
the carrier is not free to 60
I'VE feel strongly that water compe-
tftion. even when the widest reasonable
latitude is given to the effect of mar
lSet competition, cannot by any posi-
bility justify a higher rate from Oma-
ha to Reno than from Omaha to San
Francisco: from ST. Paul to Spokane
than from St. Paul to Seattle.
Upon the other hand. it should be
noted that the opening of the Panama
canal may so add to the intensity Of
this water competition as to call for
some modification OF the conclusion
now reached"
The commission holds the fixing OF
reasonable rates to be a legislative
function. not subject to review by the
courts Congress, it is maintained. has
delegated that power to the commits
sion, and the intimation is clear that
the courts, in the opinion of the COM
mission, has no power to review such
rates as may have been established
through the orders Of the commission
in the transcontinental cases.
The report declares that during the last
year So cases. embodying sol formal de-
cisfons. were disposed OF. During the |
year 8S1 formal complaints were filed and |
u proceedings of inquiry were instituted |
by the commission on its own initiative |
In addition there were instituted E3 pro-
ceedings of Investigations and suspen-
sInns of fariffs confai rllraa. rnrnrarsnd IN |