The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-06-23
POWER OF FIXING RAILROAD RATES
SHIFTED BY COURTS NEW DECISION

United States except those operating in'
certain parts Of the southern territory
The defendants specifically named in
the original order were the Union pa.
cihc. the Southern Pacific aud other
iranscontinenlal lines. Practically al
n the transportation business from
coast to coast is embraced in The re-
adjustment Of rates required
The Supreme Court holds for the first
time that the Interstate Commerce Com
mission under the long ana short haul
clause of the Interstate commerce act has
the power To fix rate. Up 10 this time the
powers Of the Interstate Commerce 'om-
mission. ss Interpreted by the supreme
Court. have been confined to the reviewing
rates fixed BY III. railroads themselves
The CHIEF Justice declared that the
effect OF the long and short haul clause
amendment mad been ~ shift the power
from the carriers and vest 1t in the
commission making that body pri-
mary power in The fixing Of rates in-
saead OF leaving the primary action 10
the carriers themselves.
1t was on the ground that the COM
Axing a zone system OF rates in the
intermountaiu cases tina. the United
States Commerce Court overruled the
commissions order and issued AN IN
Junction.
New Principles Laid Down.
The Supreme Court nov sets aside that
restraining order and lays down new prin-
ciples VI far reaching importance.
For many years the railroads have
openly maintained lower rates for haul
from Eustern points to the Pacific coast
terminals than they charged for the
shorte hauls to Intermediate points on the
same line OF railroad
In some cases IN. rates to the inter
mediate points have amounted 10 ne much
AZ che rate FOR the through haul ~ coas,
plus the rate from the coast point back
20 the intermediate point.
When this practice has heen attacked
the roads have Insisted that a. was neoes
sAry for them 10 maintain these higher
rates to the intermediate points for the
reason that the through rate had TO he
lowered 20 the level OF the rate ma lntained
by the water carriers
Seventeen railroads joined in the appeal
to be relieved from the rigorous applica-
ton OF the long and short haul amend
ment TO the railway dcT 1917.
The feature " the RAILWAY act Of 1910
that was under review to-day IL known as
section T. The commerce affected by IL
extends from the Ataatic To the Pacific
and. as the Chief Justice observed EN-
braces practically ;he cnt!r. county,
Limitation set.
In the amendment made by Congress
to section OF the Interstate commerce
act regulating long and short hauls, the
carriers were forbidden 20 charge any
greater compensation as through route
than the aggregate intermediate rates
subject to the provisions of this act"
But this was not to be construed as
authorizing the carriers to receive a
greater compensation Tor a short than for
long distance. The section also per-
United the carriers to apply TO the Inter
state Commerce Commission for relief
and the commission received power to re-
leve them from thu opera,av.: OF the
section.
After the passage Of the amendment
the Interstate Commerce Commission wa:
petitioned by seventeen carriers who
asked for authority to continue all rates
shown on the turitis from the Atlantic
seaboard to the Pacific coast and bach
again and to and from interior points.
In their petition the railroads asked
for permission 20 'ontlue the lower
rates to intermediate points. such lower
petition of various water carriers and Of
carriers partly by water and partly by
rail" Competition ~ Canadian carriers
was assigned The commission denied
the petition hut issued an order which
while II made substantial reductions
permitted in some respects over rat.
to be charged for the longer haul 10 tn,
Pacinc coast than To the intermediate
points.
The Zone system.
The comm ssion prescribed zone sys
tenn. II ordered that no rate from
point west OF the Missouri River coul'
exceed the through rate TO the Pacih
coast: that in the zone from Chicago
the through rate should be exceeded b.
not more than per cent. NAT ~ IN
third. or Pittsburg zone not more ina
rs per cent. should he added 10 IN
through rate and that in the fourth 81
Atlantic seabosrd zone the rates 70 Inter
mountain points shoIld be % per cent
in excess % the through rate
When the case was before the liner
state Commerce Commission the carrier
contended that they could not AFFORD tn
loss in revenue which would result. Tn
commission. however, made an actual ob
servation of the carriers books over
given period and announced mat the
were not impressed with that argument
The Chief Justice dismissed the Goa
tention of the railroads that this l1gisls
ton amounted To the delegation OF leg
islative power. stating succinctlN The ef
feet OF the amendment. he said
"In substance. thu amendment intrtns
cally states no new rule o. principle. bu
simply shifts thu powers conferred b
the section - az IT originally stood
that is II takes from the carriers a de
post of public power previously lodg
In them and vests IL IN the commisslo
as a primary instead Of a reviewing funl