Court Opinion

ID: 8787232
Source: CourtListenerOpinion
Date Created: 2022-11-26 13:38:54.344564+00
Date Added: 2024-06-11T17:03:08.913928
License: Public Domain

DENISON, Circuit Judge
(concurring in part, dissenting in part). I quite agree that the present ownership of the Sunday Creek stock by or for the railroads is unlawful, and that the coal companies and the railroads should be separated. This conclusion must be tentative,, until the other necessary parties can be heard, but it seems probable that all the facts have been developed. I would base this result on the commodities clause of the Hepburn Act and the “mere instrumentality” theory of the Eehigli Case, 220 U. S. 257, 31 Sup. Ct. 387, 55 L. Ed. 458, rather than upon the Sherman Act; but the use of either basis brings the same result. Beyond the matter of the coal companies, and in the mere present relation of the railroads to each other, I am unable to see any monopoly or restraint of commerce forbidden by the anti-trust law. Some of the considerations compelling me to this opinion are these:
1. It is true that the history of their former relations during the 1900-1910 period must he studied for whatever bearing it may have on their present intent; but this study discloses to me, not continuance but change, not identity but antithesis. The Hocking and the Central6 were parallel roads with common termini and with other common points. They had competed bitterly for the Hocking coal district traffic to Columbus and to Toledo, as well as for all other traffic originating on their lines and destined to common points. In 1900, the Hocking bought the Central, and from then until March, 1910, tills naturally and theretofore actually competing line was owned by the Hocking. The Hocking dictated the policy of both. Both had the same directors and managing officers. The merger was complete. Competition was not restrained; it was eliminated. No more perfect union and joinder in operation, while saving the former corporate identity of each, could be stated. After March, 1910, these two roads continued jdiysiealiy as before; but neither the Hocking nor its dominating stockholder had any ownership of the Central or had any interest, direct or indiicct, iti such ownership; nor did the Central or its dominating stockholder have any ownership of or direct or indirect interest in tilt: Hocking. No director or officer of one road was director or officer in the other, or had any share in its management or operation. No more complete severance of the two roads could be formulated. There remained no connecting link (except the common control of the Kanawha, hereafter discussed).
2. Since March, 1910, there has been full and complete competition between these two roads (save only for the Kanawha traffic). As to all the Hocking coal district traffic bound for Columbus or Toledo, and as to all other business originating on these roads, competition is unimpaired. So reads all the evidence; there is no proof to the contrary. The competitive conditions prevailing before the unlawful merger of 1900 have been restored — excepting only that the rate-cut*320ting war then in progress has not been resumed. Both roads maintain their rates against sudden or secrét cuts, as they are bound to do by both state and federal law. To base the assumption that they are combining in restraint of trade solely upon their maintenance of the same rates between common points would,',by the same token, convict every railroad in the United States which is obeying the law; yet such assumption is, to my mind, the only basis for believing that such combination has existed since March, 1910 (still excluding from our thought and reasoning the Kanawha traffic).
3. The conclusion just stated — that there is no other basis for inferring a suppression of competition — is not affected by observing the joint trackage contract. It is true this contract was made during the period of undue intimacy, and probably it would not have been made between roads actively competing as strangers to each other; but this does not determine its character or effect. In March, 1910, the two purchasers (the Chesapeake & Ohio and the Lake Shore) of these roads found this joint trackage contract in existence. They saw that the entire physical and traffic situations on both roads were accommodated to this contract. They saw that it served, in large measure, as a substitute for double tracking each road; that it enabled each road to haul more traffic and give better service and at a less cost, and so, presumably, at a less rate, than either could otherwise have done, except by expending vast amounts in double tracking; that it was an operating arrangement having no connection whatever with competitive traffic seeking; that of itself it was of great and undisputed benefit to both railroads and to the shipping public, and of itself did not and could not work any harm to any interest, public or private. Under these circumstances, the purchasers preserved and continued this public and private benéfit, and I cannot see how such conduct has any bearing, even evidential, to convict them of suppressing competition in traffic getting.
4. The conclusion that since March, 1910, competition in traffic originating on these lines has not been restrained, is confirmed by the fact that there is no complaint by shippers of such traffic. Serious or long continued restraint of proper competition is a disease producing inevitable and well-known symptoms — discrimination, excessive rates, poor service, unfair practices, and the like. The relations now said to be unlawful had been in existence for a year when this bill was filed, and for another year before the testimony was closed; and we did not have pointed out to ¿is in the argument, nor have I seen in the record, any instance of any complaint by any shipper or consignee on any of these subjects.7
*3215. If I am so far correct, there remains for consideration among the primary inquiries only the matter of joint control of the Kanawha by'the other two roads: and the conclusion which we reach as'to whether or not this joint ownership and control, as developed in this case, are violative of the law, must, I think, determine the whole case. 1 agree that the fact of the ownership of this stock by the Chesapeake & Ohio and the Lake Shore, instead of by the Hocking and the Central, is not of itself controlling. The presence of the former roads, instead of the latter, in the field of the problem, can affect only the question of the dominant intent in the whole transaction. The name in which they entered their Kanawha stock purchases means nothing. I agree, also, that the entire arrangement of March, 1910, was accompanied by, and in some degree depended upon, a clear understanding (and, therefore, an agreement) that the Kanawha should, as far as it could, divide its through north-bound traffic equally between the Hocking and the Central. This does not become less true because they never executed the contemplated written agreement, nor because their perfected understanding referred to a division that should be “fair” rather than to one that should be “equal.” Under the anticipated conduct of all parties — equal furnishing of cars, etc. — no division which was not equal would be fair, and the two mean the same thing.
6. We are brought, then, to the general question when and how far the purchase, by two parallel and competing roads, of a common connecting and continuing' road, under an agreement to divide the through traffic derived therefrom, violates the law, and then to the specific question of application to the facts of this case.
Purchase by one line of a connecting and continuing line has never been thought unlawful, although, if the purchasing line is one of two or more competing for the through traffic from the connecting line, such purchase, inevitably, strongly tends to destroy existing competition.8 Such a joint purchase by two competing lines has never been held ipso facto unlawful. Indeed, the Supreme Court has said (by what is probably a dictum, Southern Pac. Co. v. Interstate Com. Com., 200 U. S. 559, 26 Sup. Ct. 330, 50 L. Ed. 585) that such competition is not the competition which an analogous statute was intended to preserve. In March. 1910, the first carrier had the right to select the continuing carrier. After June, 1910, this right belonged to the shipper; if he chose to exercise it; and it calls for a construction of the statute which has not yet been given to say that an agreement between carriers as to how they will divide and carry this kind of traffic (a very differ*322ent thing from a pooling contract) or the carrying, on of such division when this bill was filed is a monopolizing or restraint of trade or commerce contemplated by the act.9 At the same time it is clear that competition between carriers for traffic from one connecting line may affect the condition of the shipper upon the originating line, and I see no reason to doubt the proposition which, in this respect, must underlie the opinion of the court, viz., that the forbidden restraint may be found ' in this joint purchase of a common extension by two competing roads; but it seems clear that in a case of this class the criterion must consist in the principle stated by Mr. Justice Eurton in the St. Eouis Terminal Case, 224 U. S. 394, 32 Sup. Ct. 510, 56 L. Ed. 810:
“Whether it (the transaction in question) is a facility in aid of interstate commerce or an unreasonable restraint forbidden by the act of Congress * * * will depend upon the intent to be inferred from the extent of the control thereby secured over the instrumentalities which such commerce is under compulsion to use, the method by which such control has been brought about and the manner in which that control has been exerted.”
From this statement and from the very recent, familiar decisions of the Supreme Court, including the Union Pacific Merger Case, supra, and the Reading Case, 226 U. S. 324, 33 Sup. Ct. 90, 57 L. Ed. -, it seems accurate to say that whether the situation created in March, 1910, operated in aid of interstate commerce or in the forbidden, unreasonable restraint thereof will depend upon (1) the extent of commerce restraining power inherent in the joint ownership of the Kanawha; (2) the characterizing intent and purpose of this joint ownership to be inferred not only from the power secured, but from all tire proofs; in other words, whether such restraint of competition as was inherent in the joint ownership would amount to a primary, and therefore direct, restraint of trade, or would rather be incidental to ends primarily lawful; and (3) the amount of restraint, actual or potential, which did take place:
7. If this joint ownership has the prohibited effect, it must be found (a) in competition as to divisions; (b) in competition as to rates; or (c) in competition as to service.
(a) Clearly this joint ownership tends to prevent the Central and the Hocking from bidding up against each other in the divisions that they will offer- to the Kanawha for this traffic, and so the other Kanawha stockholders might make less money. This is not the kind of competition which the statute desires to preserve. It serves no public interest. It tends, because of a disproportionate division to the initiating carrier, to poor service by the continuing carrier and to indifference by both to the interests of the shipper. It has long been recognized as a traffic evil. On its elimination we cannot predicate guilt.
(b) It is clear,'too, that an agreement to divide traffic would, as a *323general proposition, have some tendency to prevent competition in rates; that is, the Hocking would not be so likely to name its lowest rate from the Ohio to the lake as if it was not sure of half the traffic any way, and so the through rate from the Kanawha district to the lake might not fall to the point where it would be brought by full competition.10 This is, I think, as strongly as this feature can be stated. It is, of course, now perfectly well settled that free competition is the policy of the law, and it is none of our concern whether this is, as to railroads, the best economic policy; but, when.we are trying to decide whether we are compelled to find a dominating intent to restrict trade merely because one inducement to compete in rates is removed, we cannot shut our eyes to the small part'which rate competition now plays. These contracting parties knew, in 1910, as we all now know perfectly well, that under the thorough and efficient administration of the Interstate Commerce Haw rate cutting, as a means of getting business, either from shippers or from connecting lines, has ceased. All rates, through as well as local, must be published, and cannot be cut until after 30 days’ notice. A published cut is reasonably sure to be met by all who are competing without a differential. No contract for traffic in consideration of a cut can be made, and, as cutting rates will not get business away from a competitor, rates are not voluntarily cut. I do not mean to say that this disappearance of rate cutting makes lawful a contract to maintain rates — not at all; but it does affect and minimize the evidential importance of a contract removing .one inducement to cut rates, when we are determining the character of the entire transaction of which that removal is only one element.11
(c) Coming to competition in service, it is not to be denied that such a traffic-dividing agreement as here exists tends to discourage this kind of competition, and that there is here, in theory, some degree of restraint, more likely to have actual effect than is the restraint as to rates.12
We find, then, both as to rates and service, some impediment to ideally free competition; but that ideal is rare, if it exists at all. We must have a practical standard of comparison. That standard must be *324the lawful situation which would exist, except for the agreement said to be-forbidden. This lawful situation is usually that which was displaced by the agreement under attack; but in this case the next earlier situation was itself unlawful, and to get on solid ground we must go back to 1899. The theoretically perfect remedy would be to restore the condition existing in 1899. The bill of complaint and the logic of the situation lead there and lead us nowhere else. When we get there, we find that the Central practically owned the Kanawha. For 10 years it had been the majority stockholder, and it was in absolute control. For the Kanawha traffic, the Kanawha and the Central formed one through unitary line from the mines to the lake. The Hocking could not compete for part of the haul, and, so far as concerns any benefit to the Kanawha shippers, the Hocking might as well have been out of existence.13 As compared with this situation, I cannot doubt that the present arrrangement is an aid, not a restraint, to competition.
This was in 1899. If we ought to look for a standard of comparison in 1910, that standard must be such other lawful arrangement as might naturally have resulted in the course of separating the two Ohio roads, if the contract for joint control of the Kanawha had not been made. This other arrangement would almost certainly have been the purchase of the Kanawha by or for either the Hocking or the Central exclusively in its own interest. The Kanawha had always been operated in connection with one or the other or both of these roads. It had little reason for existence, except as an extension of one or both of these roads. Except in co-operation with them, it could not get its coal to market. It is not impossible that a wholly independent purchaser for the Kanawha might have been found, but that there should be an independent purchaser who did not plan to resell to one of the other through lines, and who would pay anything like the price which the road was worth to either one of the Ohio lines as an extension, is highly improbable. Suppose, then, that it had been purchased in 1910, by or for the Central • (and the government concedes this would have been lawful), it follows that all the Kanawha-traffic would havé gone through Ohio over the Central so far as the Kanawha and the Central,, acting directly or indirectly, could have brought about this result. So long as a satisfactory through route was provided by the Kanawha-Central line, the Kanaawha could not have been compélled to establish a through route or rate by way of the Hocking, and the Hocking could not have competed at all.14 Even if the Kanawha could have been compelled to establish *325a through route and rate via the Hocking the same as via tiie Central, the Kanawha-Central could have made the part of the rate south of the Ohio river so high, and the part north of the river so low, that the Hocking could not make a competing local rate; or, even if this trouble was overcome, there would still remain the numerous practical obstacles which the Kanawha-Central management could oppose to a diversion of part of its through traffic. In any of these events, the Kanawha shippers would have no remedy from the law or from the Interstate Commerce Commission, excepting to compel a reasonable through rate; and that remedy has never been impaired.
These considerations lead me directly to the conclusion that the Kanawha-Hocking-Central relationship now attacked produced (inherently) for the Kanawha district shippers less monopoly and more competition and better service than would have followed from either of the alternative arrangements which would naturally have resulted in 1910, if this one had not been made. The other would have been concededly lawful. I cannot find unlawful monopoly, resulting from inherent power to restrain competition, where that power is less than it would be in the lawful alternative situations.
8. If the intent unlawfully to monopolize or restrain may not be inferred merely from the existence of the power, where that power is of the limited extent and of the peculiar nature which have been described, is that intent otherwise proved by this record ?
The five trunk lines had been engaged in an unlawful combination and had been directed by the Ohio Supreme Court to dissolve such combination. It is their purported dissolution which is now under review. Where the only question is whether the defendants are in bad faith continuing a violation of the law after having pretended to quit, it seems to me reasoning in a circle to draw, from their former misconduct, any serious inference of their present bad faith.
If the Chesapeake & Ohio and the Lake Shore had purchased the Kanawha stock with no interest in the subject-matter, except to control its traffic for the Hocking and the Central, the question would lie different ; but that was not the sole interest of either purchaser. The Chesapeake & Ohio desired an outlet to Lake Erie for all of its own great *326traffic.15 For this purpose, it desired to buy the Hocking. This purpose and this desire were beyond criticism; but to reach Gallipolis, the nearest point on the Hocking, it must build across the Ohio river and over 30 miles of difficult country, and it must then, for its traffic, either practically rebuild the Hocking river division, 75 miles, to Logan, or build, new, 50 miles, to Athens, in order, one way. or the other,' to reach the modernized lines of the Hocking. Why should it be required to do this, paralleling the Kanawha, when it could buy such an interest in the Kanawha as secured to it the indefeasible right to use the Kanawha as this connecting link? What rule of public policy required it to build this new road instead of buying the existing road ?
Turning to the Lake Shore, we find that it desired to buy the Central for the purpose of reaching the coal fields and getting both coal traffic and fuel coal for itself and its allied New York Central lines, and to make connections for through traffic both ways, with the Cqal & Coke and the Western Maryland roads. These were rightful and legitimate objects, also beyond criticism. So was its desire to have this feeder reach the Kanawha district. Apparently, no one questions that it could rightfully have purchased the Kanawaha outright, nor is there, to my mind, any reason for ascribing to the Lake Shore any moving purpose in the whole transaction of March, except that just mentioned.
We find, then, that the Chesapeake & Ohio had the legal right to buy the Kanawha and a strong and lawful motive for so doing, and that the Lake Shore had the same right and an equally strong and lawful motive, and that this underlying and justifying motive by each had nothing to do with the thought of suppressing competition between the Hocking and the Central; yet the Lake Shore knew that, if the Chesapeake & Ohio made the purchase, the Lake Shore would be defeated in its plan of reaching the Kanawha fields, and the Lake Shore’s subsidiary, the Central, would get no Kanawha traffic which the Kanawha could divert; and the Chesapeake & Ohio knew that, if the Lake Shore made the purchase, not only would the former’s subsidiary, the Hocking, get little through traffic, but the whole scheme for the Chesapeake & Ohio outlet to the lake would be defeated. Under these circumstances, what more natural than that they should join in buying the Kanawha, each secure against exclusion by the other, and what primary or characterizing unlawful purpose can be found in such a joint purchase? If this joint purchase was, for these reasons, rightful and lawful, as I believe it was, the arrangement for dividing between *327the Central and the Hocking the traffic originating on the Kanawha, though important in itself, becomes relatively a mere incident of the main transaction, and its real purpose was to prevent a monopoly of this traffic by either purchaser. It makes little difference how express the equal division agreement was. Such an agreement would be implied from such a situation. Nothing else would be fair or right. If a receiver should be appointed for the Kanawha, the court would direct him to do just what this division agreement called for and what these parties have been doing, viz., divide this traffic equally between the two Ohio lines, so far as he could do so and so far as they were equal in their furnishing of cars and other facilities; in other words, “to treat them fairly.”
9. The remaining element of the assumed general criterion is the amount of restraint, actual or potential, which did take place.16 Here, again, we find that the natural symptoms of a suppression of competition did not exist. No one complains of any suppression or of any practices resulting therefrom; and this for the very good reason that there never was any competition to suppress. It is difficult to prove that defendants have put a burden upon a thing which never existed. Not only is the record barren of any suggestion that the Kanawha shippers ever had the benefit of any competition between the Central and the Hocking, but it affirmatively shows that during' the 10 years before 1910 competition was impossible, because the Hocking controlled ev-' erything; and that before 1900 it was impossible, because the Kanawha belonged to the Central.
It is certain, then, that the result which will condemn the agreement-must be found in the suppression of “potential” competition, and we must ascertain what this means. In the Union Pacific Case the thought was applied with reference to undeveloped traffic from territories already reached by the two roads, and which traffic might grow into larger volume; but the same idea must extend to new and likely methods of competition and even, in some instances, to the building of new roads or branches to make competitive territory out of that which has been tributary to one road only. Whether competition, between the roads now existing, in cutting rates, etc., is probable enough or would be serious enough under the facts of this case to be that potential competition which must be preserved, has been discussed. It is still possible that the Ohio road which saw the Kanawha sold away from it would have built a new line to the Kanawha district even in spite of the great topographical difficulties. Such new road apparently could not have reached any mines now on the Kanawha, because there is room for no new track along the river next to these mines; but, treating the district and not the individual mines as the shipping unit, it could have reached other parts and developed new mines. That *328it would have done so is, however, the merest surmise. It is not even probable, so far as the record informs us; and I cannot condemn the joint Kanawha purchase because it has possibly prevented the building of another line in some unknown location at some vague future time. An arrangement which removes the motive for building a competing line cannot, for that reason alone, amount to an unlawful forestalling of potential competition, unless such forestalling was a substantial and moving purpose of the arrangement, and unless the building of such other line was at least reasonably probable — indeed, the latter condition covers both, because it could not be the main and sufficient motive, unless the new road was foreseen as- probable.
Finally, in testing the actual results, we must look to the Kanawha shippers. All this controversy is to protect their interests — and, of course, the correlative interests of the public which buys from them. Have the shippers been injured? Are their rights in jeopardy? On one hand, it appears that there is somewhat less of motive on the part of the Central and the Hocking to compete on a part of the through haul than there would be under certain other circumstances which never did exist, which, would not have been a probable alternative, but which perhaps • might have come into existence. I find nothing else to put on this side of the scale. On the other hand, it appears that .the great trouble in coal shipments is to get cars, and that the Kanawha, even when in combination with the Central and the Hocking, was poorly supplied with cars and served its shippers poorly. It was greatly interested in its own coal companies, and it would have supplied them if it could, even if it did not impartially distribute all the cars it could get. Under these conditions, coal shipments from the mines along the Kanawha amounted, in the last six months of 1909, to 36,000 cars. With the transfers in March, 1910, there came a new outlet to all the western C. & O. territory, and direct and close relations which made it to the interests of these two trunk lines to furnish cars to the Kanawha.17 It seemingly must have been due, at least in a large part, to these greater facilities that the shipments by the mines along the Kanawha had increased in the last six months of 1911, to 42,000 cars. This does not seem to indicate a 'substantial restraint of trade and commerce. It seems to me cleár that the Kanawha shippers and their dependent public have been benefited by the transaction of March, 1910, taken as a whole, and that interstate trade and commerce have been promoted thereby;18 while the only restraint affecting such shippers or such commerce is theoretical rather than actual, and such as *329it is, arises out of a natural, if not necessary, incident of the main transaction.
10. There remain for consideration two further suggestions. It is said that the Hocking and the Kanawha are competing roads, and hence that the former cannot take part in managing the latter, either directly or through the instrumentality of the blocking’s chief stockholder. I am not satisfied that these two roads are in any fair sense competing. That portion of the Kanawha extending from Hobson north 40 miles to Corning, and that portion of the Hocking extending from Logan south SO miles to the river, are substantially parallel and 20 miles apart. There is some traffic to and from two or three small towns, Pomeroy, Middleport, and Gallipolis, but the Kanawha does not reach these towns with its own track, and runs to them over the Hocking under a trackage contract which does not permit it to compete with the Hocking, except by the latter’s sufferance. A small amount of coal is produced at some mines along the southern part of the Hocking river division. The Kanawha -might, by building its own spurs and branches, reach these three towns and these mines, but'the whole of the traffic so reachable and as to which, theoretically, there might be competition, is negligible both in percentages and in total volume; neither is any reason shown to anticipate increase.
The relative positions of the Hocking and the Kanawha are not those of parallel and competing roads, but those of connecting and continuing roads having an end overlap. It is, in principle, though not in degree, as if the New York Central ran -from the east to Niagara Falls through Buffalo, and the Michigan Central, from the west, to Buffalo, through Niagara Falls. Here would be from Buffalo to Niagara Falls two parallel roads, and they might compete for the freight originating at those and intermediate points. This could hardly he thought sufficient to deprive these two roads of their substantially connecting, rather than competing, character. So here, one looking at the map must, 1 think, observe that the.Hocking and the Kanawha form substantially a connecting and continuing line from Gauley Bridge to Lake Erie, and do not lose this character because a branch or spur of the Hocking Toledo-Athens main line branches off at Logan, parallels the north end of the Kanawha and strikes it at Kenauga.
It is true the Ohio court made a finding that these roads were parallel and competing, but the court was considering that portion of the Kanawha north of the river, and not, as we must do, the entire road; and also was treating the Kanawha as part of one system with the Central, a thing which we now cannot do. That court was also considering intrastate commerce, as to which the conclusion of fact might well be different from the proper conclusion regarding the immense volume of traffic involved under this record.
11. It is also said that the C. & O. and Kanawha are competing roads, and hence the former cannot take part in the management of the latter. The roads are parallel from Gauley Bridge to Charleston, a distance of 30 miles along opposite sides of the Kanawha river. The mines on one side ship over the Kanawha; on the other side, over the C. & O. On neither side can they practically reach the other rail*330road. The cost of crossing the river would be prohibitive. On neither side could another railroad track be built, the river valley being, at many places, a mere gorge. From Charleston to the Ohio river the courses are generally divergent, one tending north, the other west. Charleston is a common point, and there should be, at this point, competition for freight originating at Charleston or coming in oyer the Coal & Coke Railroad and destined for the Northwest. The interest of the C. &' O. in the Kanawha would theoretically tend to restrict this competition, though the tendency would be imperfect, because over its own lines the C. & O. would get the entire haul to Chicago, while the other way it would be interested in half the profit on the haul from Charleston to Armitage, and half of the volume of the traffic from Armitage to Toledo. One common point, with the amount of traffic existing at Charleston, would, in any event, be hardly sufficient to give a cotiipeting character to these railroads, but, even if the theoretical but imperfect tendency to limit this competition could ever sufficiently invalidate an interest by one in the other, yet, in this case, such tendency must yield to the undisputed testimony, which is that the competition at Charleston between the soliciting agents has continued active and vigorous since March, 1910, as before.
The map also suggests that control of the Kanawha might be used to block the making of a through line from the seaboard to the lakes, by way of the Virginian, the Kanawha and the Central, which through line would, as a whole, compete with the C. & O. It is sufficient to say of this suggestion that no such issue is suggested by any pleading, and that the Lake Shore, in purchasing its interest in the Kanawha, guarded against interference by the C. & O. with such possible future plan.19
Upon the whole case I see two great shipping districts with interests involved — the Hocking coal district and the Kanawha coal district. The Hocking shippers zaere subject to a monopolistic combination of all transportation facilities. Théy now have these facilities divided between two-trunk .lines, wholly independent of each other, as to competition between which there exists no obstacle which a court can remove. The Kanawha shippers were ahvays subject to that monopoly which results from having only one railroad outlet. This has been neither increased nor diminished; but by the alliance between their railroad outlet and two strong lines the shippers can reach much new territory, and the outlet has its facilities and usefulness much increased. As to the one feature (joint Kanawha control), in which the position of the shippers might be better, we are asked, it seems to me, to create competition.

 I will refer to Hie Iloeking Yalley Railway Company as “the Hocking"; to the Toledo & Ohio Central and the Zanesville & Western Railroads as “the Central”; to the Kanawha & Michigan Railway Company as “the Kana'wha”; to the Lake Shore & Michigan Southern Railway Company as “the Lake Shore”; and to the Chesapeake & Ohio Railway Company as “the Chesapeake <& Ohio ’ or “the C. & O.”

 do not overlook the broad complaint that the rates from the Hocking district were too large in proportion to the rates from the Kanawha district ; but, in fact, all rates were iixed with relation to the Pittsburgh-Ashtabula rate. This rate was not made by these defendants, but it was the “keystone of the arch.” When the Commission reduced this Pittsburgh rate from 88 to- 78 cents, the Hocking voluntarily reduced its Hocking-Toledo rate from 85 to 75 cents, and the 75-cent rate has been sustained by the Commission. See Interst. Com. Com’n R., opinion No. 1941, ease No. 4274, New Pittsburgh Coal Co. v. Hocking Valley Ry. Co., vol. 24, p. 244.

 At one time, the New York Central, the Erie and tho Lehigh competed at Buffalo for the oast-hound through trafile from the Lake Shore, and tho Michigan Central, (Land Trunk, and Lake Shore competed for the westbound through traffic from the New York Central. The purchase of the Lake Shore by the New York Central restricted, if it did not end. this competition, for not until June, 1910, could joint rates have been compelled, nor, if there had been through joint rates, did the shipper, until that time, have the right of selection. See 3(i Stat. at Large, 552, 553. Formerly, a. through joint route could be compelled only as there was no existing ‘"practicable” through route. And see note LI as to joint through routes after June, 1910.

 Without doubt, two parallel roads might ,ioin in building, from a common terminus, and owning a new road connecting with and continuing both. Joining in buying an existing extension seems to stand, logically, on the same ground, unless, as matter of fact, the purchase was with the dominant purpose of stopping existing or normal competition.

 The actual effect of the (theoretical) rate sustaining interrelationship is minimized by the fact that coal rates go by districts, and a change in one district would affect all the others. (See note 2.)

 In the same way, when some tendency to maintain high rates is only an incident of the contract under attack, we may well remember that the shippers’ meritorious grievance on this point is the maintenance of an unreasonable rato, and for that he has an effective remedy.

 While each road is content with half the Kanawha traffic, and the Kanawha has the power to equalize, the agreement to divide tends to make both Ohio roads careless as to good service. Now that the shipper has the absolute right of through routing, the Kanawha’s power to equalize rests solely on its relations to the Sunday Greek mines, which originate a considerable part of the tonnage, available as an equalizing medium, so that here, too, the Sunday Creek ownership is the real evil. With this removed, the agreement to divide the Kanawha traffic becomes comparatively ineffective, and the shippers’ right of through routing must bring the freight solicitors to them in competition.

 There was ttien (in 1899) no way of compelling the Kanawha to join the Hocking in a through route or joint rate; nor was there, indeed, in 1910. (See noté 14.)

 In March, 1910, the Commission could direct two roads to join in a through rate and route only, “provided no reasonable or satisfactory through route exists.” 34 S. L. 590. It seems clear that the Kanawha-Central route would have been made and kept, a “reasonable and satisfactory through route” so that the power to compel the Kanawha to join with the Hocking never would have arisen. 'In June, 1910, this proviso was cut out, but its place was taken by the provision (36 S. L., 552): “And in establishing such through *325route, the commission shall not require any company, without, its consent, to embrace in such route substantially less than the entire length of its railroad and of any intermediate railroad operated in conjunction and under a common management or control therewith which lies between the termini o£ such proposed through route, unless to do so would make such through route unreasonably long as compared with another practicable through route which could otherwise be established.” This is awkwardly expressed, because of the lack of definite antecedent for “to do so”; but'it seems to mean that if the condition in 1899 was restored, and if the Hocking demanded from the Kanawha a joint through route, via either Athens or the river division, the Kanawha could not be required to comply, because such route would embrace substantially less than the entire length of the Kanawha to Corning, and less than the entire route between its termini, the Kanawha district and Toledo, over railroads “operated in conjunction and under a common management and control." So the Hocking solicitors, in the Kanawha 'district, would have been helpless.

 That this was real, not pretended, is shown by what happened. In 1909, the first full year before the change, the O. & O: delivered to the Kanawha for hauling over its line, 4,000 tons of coal and coke and 70,000 tons of other freight. In 1911, the first full year after the change, it so delivered 811,000 tons of coal and coke, and 168,000 tons of other freight. Between the same periods, southeasterly bound freight received by the O. & O. from the Kanawha increased from 122,000 tons to 199,000 • tons. This enormous tonnage given by the O. & O. to the Kanawha was. not merely diverted from the other connections of the O. & O., because there was no decrease in the tonnage given to these other connections.

 Tiie Kanawha traffic to he divided was about twenty-five per cent, of the total traffic of the two Ohio roads. This appears only as to the Hocking; I assume a similar ratio on the Central. T reach this result by taking the figures for 1911 (Ex. 138) and excluding the south-bound tonnage from the total of Kanawha and excluding the O. & O. tonnage from total Kanawha and total Hocking.

 Up to July, 1909, the Hocking, Central, and Kanawha cars were pooled and used interchangeably on these roads. During the nine months intermediate the end of this pooling arrangement and May 1, 1910, the date of full effect of the March contracts, the Central furnished to the Kanawha an average of 266 cars per month. During the same months of 1910 and 1911 it so furnished an average of 1,466 per month.

 In 1909 the New York Central lines were furnishing 1,600 cars per month to the Central; in 1911, 8,300 cars per month. Coal production at the mines on the Central increased 500,000 tons for 1911 over 1909.

 Indeed, the entire subject-matter of this numbered paragraph should be disregarded for the same reason. Paragraph 20 of the bill limits the issue to the charge of a continued combination between the Hocking, the Central, the Zanesville and the Kanawha. It is important to know what the C. & O., as owner of the Kanawha, i-s doing with the Kanawha; but, to the issue tendered and made, it is immaterial whether the O. & O. is under disability to become the owner of the Kanawha.