263 U.S. 515 (2013), United States v. Illinois Central Railroad Company

Citation:263 U.S. 515, 44 S.Ct. 189, 68 L.Ed. 417
Party Name:United States v. Illinois Central Railroad Company
Case Date:January 07, 1924
Court:United States Supreme Court

Page 515

263 U.S. 515 (2013)

44 S.Ct. 189, 68 L.Ed. 417

United States


Illinois Central Railroad Company

United States Supreme Court

Jan. 7, 1924




        1. When a joint through rate, maintained by a trunk line and an independent connection, though not unreasonable in itself, works

Page 516

undue prejudice to a shipper on the connection in view of lower through rates for the same commodity from competing points in the same territory over the trunk line and its branches and other independent connections, both the trunk line and the other participant in the high rate participate in the unjust discrimination, and may be required by an order of the Interstate Commerce Commission to remove the discrimination. P. 520.

        2. A discrimination in rates is not illegal under § 3 of the Interstate Commerce Act unless it is unjust. P. 521.

        3. The fact that preferential rates on traffic originating from some of its connections are given by a carrier in order to retain and increase its business may relieve it from any charge of favoritism or malice, but it will not justify a resulting unjust discrimination. P. 523.

        4. A difference in rates is not illegal unless shown not to be justified by the cost and value of the respective services rendered and by other transportation conditions. P. 524.

        5. The fact that a rate is inherently reasonable and that a lower rate from competing points is not shown to be unreasonably low does not establish that the discrimination is just. Id.

        6. A blanket rate from points on a trunk line was made applicable from points on some only of its connections through shrinkage or absorptions allowed the connecting carriers by the trunk line, with resulting prejudice to a shipper on another connection in the same territory to which the privilege was not extended. Held that the fact that the preferential rate was for the purpose of developing traffic on the main carriers lines, or of securing competitive traffic, did not establish the innocence of the discrimination as a matter of law, but was one only of several proven factors to be weighed by the Interstate Commerce Commission, and that the Commission's finding of unjust discrimination, based on a consideration of them all, was conclusive. Id.

        7. Such a decision of the Commission is not an attempted substitution of the Commission's policy of ratemaking for that of the carrier. P. 525.

        8. An order of the Commission that a trunk line and short line, participating in a joint rate, desist from resulting discrimination, but which may be satisfied by raising other competing rates of the trunk line or by reducing its division of the joint rate complained of, is not subject to the objection that it will have a confiscatory effect upon the short line. P. 526.

Page 517

        9. An agreement of a shipper to ship all his products over a railroad is not a continuing assent to the rates in effect when it is made. P. 527.

        10. The power of the Commission to remove unjust discrimination applies to a through rate consisting of a combination of locals, as well as to a joint through rate. Id.

        No. 40, decree reversed.

        No. 38, decree affirmed.

        Appeals from decrees of the district court in suits to enjoin enforcement of orders of the Interstate Commerce Commission. In the first case, there was a perpetual injunction; in the second, the bill was dismissed.

        BRANDEIS, J., lead opinion

        MR. JUSTICE BRANDEIS delivered the opinion of the Court.

        These cases, brought to set aside orders of the Interstate Commerce Commission, were argued together, and present, in the main, the same questions of law. In

Page 518

each, carriers who were found to have unjustly discriminated against shippers of lumber located on an independent short line were ordered by the Commission to cease and desist from charging them higher through rates than were contemporaneously charged for like services from other points within what is called blanket territory.1 Each case was heard before three judges on plaintiff's motion for a preliminary injunction, on defendant's motion to dismiss the bill for want of equity, and on final hearing. In each, the whole record before the Commission was [44 S.Ct. 191] introduced. In No. 40, the Federal Court for Southern Mississippi perpetually enjoined the enforcement of the order issued by the Commission in Swift Lumber Co. v. Fernwood & Gulf R. Co., 61 I.C.C. 485. In No. 38, the Federal Court for Wyoming dismissed the bill, thus sustaining the order issued for the Commission in Pioneer Lumber Co. v. Director General, 64 I.C.C. 485. Each case is here on direct appeal under the Act of October 22, 1913, c. 32, 38 Stat. 208, 220.

        The facts in No. 40 present most of the questions of law requiring discussion. The so-called blanket territory, which extends south from Jackson, Mississippi, to the Gulf of Mexico (about 200 miles), and from the Mississippi river into Alabama, produces yellow pine lumber in quantity. Through this territory, the Illinois Central Railroad extends from New Orleans to Jackson and thence to the Ohio River crossings and leading lumber markets of the North. Partly by its main line, partly also by branches, and partly by connections with independent lines, it serves a large percentage of the lumber mills in the territory. From all these points on the

Page 519

Illinois Central main line, from all on its branches, from all on three independent short lines which connect indirectly with it, and from all on the Mississippi Central (a longer independent line which crosses it running east and west), the carriers have established the same through lumber rates to the Northern markets regardless of the varying distances within the blanket territory. At Fernwood, Mississippi, a little south of its...

To continue reading