Abilene & S. Ry. Co. v. United States

• Decision Date: 16 March 1923
• Docket Number: 278-N.
• Citation: 288 F. 102
• Parties: ABILENE & S. RY. CO. et al. v. UNITED STATES et al.
• Court: U.S. District Court — District of Kansas

288 F. 102

ABILENE & S. RY. CO. et al. v. UNITED STATES et al.

No. 278-N.

United States District Court, D. Kansas, Second Division.

March 16, 1923

[Copyrighted Material Omitted]

T. J Norton, of Chicago, Ill., and M. G. Roberts, of St. Louis Mo., for plaintiffs.

Blackburn Esterline, of Chicago, Ill., for the United States.

J. Carter Fort, of Washington, D.C., for the Interstate Commerce Commission.

Clifford Histed, of Kansas City, Mo., and E. A. Boyd, of Wichita, Kan., for Kansas City, M. & O.R. Co.

Before LEWIS, Circuit Judge, and KENNEDY, and SYMES, District Judges.

LEWIS Circuit Judge.

This is a final hearing on petition and application of 13 plaintiff carriers for the writ of injunction permanently restraining the enforcement of an order of the Interstate Commerce Commission made in August, 1922, in these terms:

'A hearing and investigation of the matters involved in this proceeding having been had, and said division having, on the date hereof, made and filed a report containing its findings of fact and conclusions thereon, which report is hereby referred to and made a part hereof:

It is ordered, That on and after September 15, 1922, the divisions of interstate joint rates received by Abilene & Southern Railway Company, the Atchison, Topeka & Santa Fe Railway Company, the Chicago, Rock Island & Pacific Railway Company, the Clinton & Oklahoma Western Railway Company, Fort Worth & Denver City Railway Company, the Galveston, Harrisburg & San Antonio Railway Company, Gulf, Colorado & Santa Fe Railway Company, Midland Valley Railroad Company, Missouri, Kansas & Texas Railway Company of Texas, and C. E. Schaff, Receiver, Missouri Pacific Railroad Company, St. Louis-San Francisco Railway Company, the Texas & Pacific Railway Company, and J. L. Lancaster and Charles L. Wallace, Receivers, and the Wichita Falls & Northwestern Railway Company, hereinafter termed the connecting lines, on freight traffic interchanged with the Kansas City, Mexico & Orient Railroad Company and its Receiver, and the Kansas City, Mexico & Orient Railway Company of Texas, and their successors, hereinafter termed the Orient, shall not exceed the following percentages of the divisions accruing on such traffic to said connecting lines, respectively:

Abilene & Southern Railway Company . . . 85 per cent.

The Atchison, Topeka & Santa Fe Railway Company . . . 75 per cent.

The Chicago, Rock Island & Pacific Railway Company . . . 80 per cent.

The Clinton & Oklahoma Western Railway Company . . . 90 per cent.

Fort Worth & Denver City Railway Company . . . 70 per cent.

The Galveston, Harrisburg & San Antonio Railway Company . . . 75 per cent.

Gulf, Colorado & Santa Fe Railway Company . . . 70 per cent.

Midland Valley Railroad Company . . . 80 per cent.

Missouri, Kansas & Texas Railway Company of Texas, and C. E. Schaff, Receiver . . . 80 per cent.

Missouri Pacific Railroad Company . . . 80 per cent.

St. Louis-San Francisco Railway Company . . . 80 per cent.

The Texas & Pacific Railway Company, and J. L. Lancaster and Charles L. Wallace, Receivers . . . 80 per cent.

The Wichita Falls & Northwestern Railway Company . . . 75 per cent.

'It is further ordered, That divisions of joint rates applicable to traffic as to which the Orient is an intermediate carrier shall be adjusted by the connecting lines on relative basis of proportions prescribed above.

'It is further ordered, That the several amounts by which the divisions accruing to said connecting lines are reduced under this order shall on and after September 15, 1922, accrue to the said Orient, in addition to the divisions theretofore accruing to said Orient on such traffic.

'It is further ordered, That the resulting divisions shall be reduced as far as practicable to two-figure percentages according to the rule prescribed in said report.

'It is further ordered, That said connecting lines above named, according as they participate in the transportation, be, and they are hereby, notified and required to cease and desist, on and after September 15, 1922, and thereafter to abstain, from asking, demanding, collecting, or receiving divisions of said interstate joint rates with the Orient upon other basis than those above prescribed.

'It is further ordered, That said connecting lines, respectively, and the Orient shall jointly report to this Commission on or before September 15, 1922, the divisions established under this order, of each of said carriers with respect to freight traffic moving under interstate joint rates between each of the stations or groups of stations for which such divisions are determined; and shall thereafter jointly report the number of tons, ton-miles, and revenue with respect to such traffic actually interchanged for the period from September 15 to December 31, 1922, inclusive, and for the period from January 1 to June 30, 1923, inclusive; said reports for the period from September 15 to December 31, 1922, inclusive, shall be rendered on or before April 1, 1923, and the reports for the period from January 1 to June 30, 1923, inclusive, shall be rendered on or before October 1, 1923.

'It is further ordered, That the word 'division' as herein used, shall mean the total apportionment of a joint rate, whether determined by percentages, arbitraries, or otherwise.

'And it is further ordered, That this order shall continue in force until the further order of the Commission.'

The proceeding resulting in the order against the 13 carriers complaining here was on application of the Kansas City, Mexico & Orient Railway Company of Texas and the Receiver of the Kansas City, Mexico & Orient Railroad Company, together called the Orient System, which owns and operates a continuous line of railroad 737 miles long extending from Wichita, Kansas, to Alpine, Texas. That application asked for relief from the Commission as to routing of traffic over the Orient System consigned by or to the United States, and also traffic not routed by the shipper (with neither of which we are now concerned), and also, thirdly, 'for investigation and appropriate order applicable to just, reasonable and equitable division of joint and through rates, fares and charges to enable applicant to pay operating expenses and taxes on its railway property held for and used in the service of transportation, under Paragraph 6, Section 15, Interstate Commerce Act,' as amended by the Act of February 28, 1920 (41 Stat. 474). The application recited that the Orient could not longer render transportation service to the territory which it served, pay the interest and principal on its loan from the United States and pay operating expenses and taxes on its property, unless it was given relief, and that it must cease operation if relief was not obtainable. It suggested for consideration as a method of relief an equalization of earnings between the weaker and stronger lines, and submitted with its application illustrated tables, Exhibits A to J, inclusive, of selected shipments that had been routed over its line. The first table selected a car of sewing machines shipped from Cleveland, Ohio, to San Francisco, which passed over six different lines including the Orient. The amounts received by each carrier under the existing divisions of the tariff were noted. The method suggested was to deduct from the earnings of the stronger lines a per cent. of their gross earnings per mile and apply it to the existing divisions of the weaker lines, thus changing the amount that would be received by each carrier, so that the initial carrier, the New York Central Lines, instead of receiving $141.73 would receive $88.52, and the Orient, an intermediate carrier, instead of receiving $159.73 would receive $226.96. All of the other exhibits dealt with through shipments and were illustrated in the same way, and it was said in the application:

'Under such a plan the gross earnings per mile of each line in the United States would be adjusted annually. The burden of supporting the weaker lines would automatically shift to the lines at the time most able to bear it. The transportation systems would become self-sustaining and the rate burden upon the public lessened. * * * Basing the distribution of earnings upon existing divisions, a plan should be adopted, which would prevent the stronger lines from retaining the earnings in excess of a 6 per cent. return, and whereby such excess could be automatically applied to the aid of the weaker lines participating in the haul. The problem of the weaker lines would then be solved. * * * We look to the Commission with a full assurance that the difficulties of the Orient System, and of all other weak lines, which are necessary to the communities served, will be met and that a plan will be adopted which will constitute a permanent cure, and not simply a temporary relief;'

and it was prayed that the Commission make investigation and appropriate orders in aid of the Orient System 'applicable to divisions of rates, fares and charges in support of the weaker lines. ' Attention was called to the points or stations along the route of the Orient at which the roads of the 13 plaintiffs connected with the Orient.

An elaborate brief and argument accompanied the application, in which, in support of the third suggested method, it was said:

'The plan, here suggested, will enable the Commission, which has the power, to order the distribution of that fund, as soon as collected from the paying public, to the immediate relief of the lines requiring aid, and in such a form as will not exhaust the credit nor add to the ultimate burden of the line receiving the aid. If the weaker line can only have access to this fund as a borrower, the evil day is only postponed. The interest and the principal must

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