The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1911-12-21
~
SHARP ISSUE With
COMMERCE COURT
Annual Report of Interstate
Commission Transmitted
to Congress.
TRANscoNTlNENTAt RATES
Different Views Carried on APP
peal to United States SUI
preme Court.
7 RAMscoNTINENTAt RATES

issue is taken by the Interstate Com
| merce Commission with the Commerce
Court in the twenty Hfth annual re-
port of the commission transmitted to
Congress to-day.
| Tho issue is made principally upon
what popularity is known as tho trans
! continental rate cases." involving
| freight rates from tho Atlantic to
Pacific Coast terminals. and to inter
| mediate points. Existing rates of the
| trnnsoontinental lines from Eastern
points to inter-Rocley Mountain cities
are materially higher than to Pacific
coast terminals. In a decision inter
pretng the long land -short-hau pro-
vision OF tho present law. the Inter
state Commerce Commission, directed
by order. that a relation OF rates
should be established between the
five zones. Into which the United States
was divided.
The OBJECT OF the order was to re-
duce rates to inter-Rocky Mountain
cities and prevent the railroads from
exaoung from shippers the Pacific
Const rate plus the local rate from
Pacific coast terminals to the inter
mediate points The orders of the
commission on application or the
transcontinental carriers were cn1oin-
ed by the Commerce Court and the
matter has been carried. on appeal. to
tho United States Supreme Court.
| uneconomicaI and Wrong,
| In Its report to Congress to-day the
com mission declares that "t Ia 4 waste
of transportation. and therefore IN
economical ond wrong to maintain a
system OF tariffs which arc expressly
| Intended to develop the Pacific coast
| citeB and to arrest the development
/ OF tho interior points.
1T IS impossible TO disassociate the
intermediate from the long distance
point Whether the intermediate rate
is reasonable depends upon what rate
is made TO other points on both sides
of 1t. and to permit the railroads II
this country TO select point, where
| they VIII and where they will not com
pete would be intolerable."
In discussing the erect OF water
competition upon rates the commits
sion spya that II cannot Gx a rate
from New York to San Francisco below
which the rail limo shall not 60 for IL
has no authority to fx minimum
rate. There is, therefore. no way In
which II can prevent discrimination
oy the fixing OF an absolute rate at
San Francisco and another absolute
rate at Reno. 1t can only accomplish
| this purpose by prescribing the dir
ference which may properly exist, ow-
ing to the effect of this competition
and allowing the carrier TO make what
ever rate II Gees 1T to tho moro dis
tant point. so lons as 10 observes this
differental."
The report indicates the desire of
shippers from points in tho interior Of
the country to obtain the same rates
to tho Pacific Coas, that are accorded
by the railroads to their competitors
on the Atlantic seaboard. The rates
arc made the same by the trans
continental lines on the ground of mar
ket competition.
40 justify their rates from coast to
coast" says tho report. the railroads
advance water competition. and 10
justify the same rates from interior
points to Pacific Coast points they rely
on market competition, under which
they give lower rates from all the In
terror cities two-thirds OF the way
across the continent to tho same coast
cities than to inter-mountnin points
This is the kind OF discrimination tho
commission has attempted to minimize"
Effect Is Ncutrnlized.
While the commission recognizes
the full effect OF water competition
upon the rail rates. 1t says: we have
the frank admission OF the raiiroa d
managers that they have subsidized
or bought some OF the steamship
lines and terroriZed others until they
can make the boast that the erect OF
i
"a railroad policy OF rate making
must certainly be subject to limita-
lions OF the law. or else there Is no
law. To say that there is long-and
short-haul section under which car
rier may not charge more for the
shorter than for the longer haul, but
that the railroads may, to any extent
they please carry out policy OF
blanketlng the country for the benefit
I OF the father NO ha
er points, Is to say that a railroad may,
without restraint, effect a ruinous dis
elimination and give no Justification
save its own determination or whim
There can be no regulation of rates as
to discrimination or preference under
such an Interpretation of the law
The Commerce Court intimetes that
the mistake of the commission ia in
having attempted to fix relation OF
rates instead of establishing reason
able rates; but as we have already
pointed out there Is no way in which
The discrimination found 10 exist in
! these tariffs can be prevented, except
| by fixing differcntisl, since we have
no power to establish an absolute rate
| or fix a minimum charge below which
the carrier Is not free to go.
I'VE feel strongly that water com
petition, even when the widest reason
able latitude Is given to tho effect Of
market competition. cannot by any
possibility Justify a, higher rate from
Omaha to Reno than from Omaha to
San Francisco: from ST. Paul to Spo-
kane than from st. Paul to Seattle.
| Upon the other hand, 1t should be
noted that the opening of the Panama
Canal may 80 add to the intensity or
this water competition as to call for
some modification of the conclusions
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, have no power to review such
| ratcs as may have been ESTABLISHED