Macon Grocery Co. v. Atlantic C.L.R. Co.

• Decision Date: 01 August 1908
• Citation: 163 F. 738
• Parties: MACON GROCERY CO. et al. v. ATLANTIC C.L.R. CO. et al.
• Court: U.S. District Court — Southern District of Georgia

163 F. 738

MACON GROCERY CO. et al. v. ATLANTIC C.L.R. CO. et al.

United States Circuit Court, S.D. Georgia, Western Division.

August 1, 1908

The complainants are wholesale dealers in groceries, food products, and like commodities in several towns and cities within the territorial jurisdiction of this court. The respondents are certain railway companies organized and existing under the laws of states other than Georgia, but whose lines extend throughout the state, and into the division and district of this jurisdiction. The respondents are common carriers engaged in interstate commerce. They transport grain, flour, grain products, hay, meats, corn, and many other staple commodities from Ohio and Mississippi river crossings from Nashville, Tenn., and other points made with relation thereto, to what are termed 'southeastern points of destination.' The latter expression includes all points of delivery within the states of South Carolina Georgia, Florida, and a large part of Alabama.

The respondents, it is charged, are members of what is termed the 'Southeastern Freight Association,' and this organization constitutes an illegal combination in restraint of interstate trade, for the promotion of monopoly, and for the destruction of fair competition among carriers engaged in that trade . The respondent railway companies, it is alleged by concurrence of action, and through the medium of this Southeastern Freight Association, can and do fix and maintain rates for transportation of freights from Ohio and Mississippi river crossings to destinations in the states of Georgia, Florida, and South Carolina. One of the respondents the Louisville & Nashville Railway Company, has continuous lines from Cincinnati, Louisville, Evansville, St. Louis Memphis, and Nashville to Atlanta. As one of the lessees of the Georgia Railroad, this respondent has entrance into Athens, Macon, and Augusta. The Nashville, Chattanooga & St. Louis Railway maintains and operates a through line from the Ohio river at Paducah, Ky., and from the Mississippi river at Hickman, in the same state, and at Memphis, via Nashville, to Atlanta. Another respondent, the Atlanta Coast Line Railroad Company, is also a lessee of the Georgia Railroad, and has direct connection with the Louisville & Nashville and the Nashville, Chattanooga & St. Louis. Over its own lines of railway it reaches many important destinations in south Georgia and Florida. Another respondent, the Southern Railway, in connection with the Cincinnati, New Orleans & Texas Pacific Railway, maintains and operates through lines from Cincinnati, Louisville, and St. Louis to Atlanta, Macon, Columbus, and other important points within the state of Georgia. The Nashville, Chattanooga & St. Louis Railway Company is owned or controlled by the Louisville & Nashville Railroad Company through the ownership of a majority of its capital stock. The Atlantic Coast Line Company, a holding company, organized under the laws of the state of Connecticut, owns or controls both the Louisville & Nashville Railroad Company and the Atlantic Coast Line Railroad Company.

The Cincinnati, New Orleans & Texas Pacific Railway Company is owned or controlled by the Southern Railway Company, through the ownership of stock or otherwise, and is practically a part of the Southern Railway System. The lines of the companies enumerated are all, by virtue of their location, naturally competitive. There is no other railway system with its own lines extending from Ohio and Mississippi river crossings from Nashville, Tennessee, and points made with relation thereto to destinations in the states of Georgia, Florida, and South Carolina. Because of the advantages afforded by their continuous and controlled lines, the Southern Railway System and the Atlantic Coast Line System can and do fix and maintain the rates between Nashville, Ohio, and Mississippi river crossings, and relative points to all points of destination in the southeastern territory mentioned.

It is charged that any combination, agreement, or understanding between these naturally competitive lines, whereby rates are advanced and maintained, is in suppression of competition.

In the year 1904, and prior thereto, there was much discontent with the rates of freight from eastern and western points of origin to Atlanta and other relative points, including many cities of middle and southern Georgia. Shippers and interested parties sought of the carriers a reduction of rates, and as a result a citizens' committee was appointed by the city council of Atlanta to confer with a committee of traffic officials of railway lines initial at that city. The whole body of rates from eastern and western points of origin was discussed, and a general readjustment resulted from conferences in November and December, 1904. The following reductions from Ohio and Mississippi river crossings to Atlanta were voluntarily accorded by the railroads: Class B, 2 cents per 100 pounds; class C, 2 cents; class D, 2 cents; class F, 4 cents; flour in sacks, 2 cents; fresh meats C.L., 2 cents. Similar reductions were also made to Macon, Columbus, and other points related in rates to Atlanta. It was agreed between the traffic officials of the railroad companies and the Citizens' Committee that the reduced rates were just, reasonable, and compensatory. The companies then prepared and issued, effective February 1, 1905, their freight tariff incorporating these reduced rates, in which, it is charged, each of the respondents to the bill joined and concurred. These reduced rates thus put into effect have since been maintained, under them a large and growing traffic has moved, and they were satisfactory to the shippers and remunerative to the carriers. During the years in which they have been maintained business and trade conditions became adjusted to the present rates, and all parties interested have prospered thereunder.

Some time prior to the 1st of June, 1908, certain of these carriers began a concerted movement for an increase of the rates established as described. It was essential for the two great controlling systems to unite in the proposed increase. In order to accomplish this, the intervention of the Southeastern Freight Association was sought and employed. As a result the Louisville & Nashville, the Atlantic Coast Line, and the Southern Railway, composing the two naturally competing systems, joined in a declaration. This they filed with the Southeastern Freight Association. It declared that on August 1, 1908, they would make effective an advance in rates on fresh meats, grain products, hay, and packing house products from the producing points above mentioned to southeastern points. These commodities are classified by the Interstate Commerce Commission as 'B,' 'C,' 'D,' and 'F.' In class B are salt meats in bulk, ham, shoulders, sides, pigs' feet, beef, pork, tripe, sausages, canned meats, fish, lard substitutes, or compounds, cooking oils, products of cottonseed oil or cocoanut oil, and other related articles. On all products of this class the respondents propose an increase in the charges of transportation of 3 cents per 100 pounds. Class C imports flour, if not otherwise specified, in sacks. On the actual weight of this commodity the carriers notify the shipping public of an advance over present rates of 2 cents per 100 pounds. Class D includes such articles as beet pulp, bran, shorts, linseed cake, cerealine (used for brewing), kaffir corn, corn cobs, cotton stalks, excelsior, the fiber of cocoanut and palmetto, animal and poultry food, brewers' grain, grain in sacks, corn, oats, rye, wheat, hay, fodder, straw, husks, shucks, malt, meal of various kinds, middlings, oatmeal, palmetto or palm leaves, peas (cow, clay, or field), peanut cribble, flour, grits, bran, hulls, rice (crystal or prepared), rough rice, rice polished (bran, chaff, and middling), sea grass, sea weed or salt hay, seed cotton (car load), shavings, wood, not otherwise specified, pressed in bales. On all articles of class D the proposed increase is 2 cents per 100 pounds. In class F are to be found the important articles of flour in barrels and half barrels and grits in barrels. Class F, if the respondents' purposes are made effective, will pay an increase of 4 cents per barrel. Fresh meats will pay an increase of 3 cents per 100 pounds; grain and hay, 2 cents per 100 pounds; grain products, 2 cents; and packing house products, 3 cents.

The Southeastern Freight Association, through its chairman, Mr E. H. Hinton, on June 26, 1908, sent out its manifesto, termed 'Information Issue No. 517,' which announces the purpose of the defendant companies and of the Central of Georgia Railway Company (which is not a party to this bill) to 'advance present rates' on the commodities and in the amounts heretofore described. The manifesto, or 'Information Issue,' also expressly supersedes the Southeastern Freight Tariff and Information Issues in conflict therewith. It is careful to state that each company acts separately for itself; and with equal care states that the rates, rules, and regulations in this tariff are the 'separate' rates, rules, and regulations of each of the carriers named and their connections. It will be observed, however, that there is striking unanimity in the rates. They are communicated to each of the separate lines by the chairman of the Southeastern Freight Association; and it is charged that this effectively suppresses competition, and forces all connecting carriers either to agree therein, or give up the traffic. All interested lines did concur, acting in this regard through the agency of the Southeastern Freight Association. Subsequently the Louisville & Nashville and the Southern Railway filed with the Interstate Commerce Commission their...