Interstate Commerce Commission v. Chicago, Rock Island Pacific Railway Company No 663 Burnham, Hanna Munger Dry Goods Company v. Chicago, Rock Island Pacific Railway Company No 664

• Decision Date: 31 May 1910
• Docket Number: 664,Nos. 663,s. 663
• Citation: Interstate Commerce Commission v. Chicago, Rock Island Pacific Railway Company No 663 Burnham, Hanna Munger Dry Goods Company v. Chicago, Rock Island Pacific Railway Company No 664, 218 U.S. 88, 30 S.Ct. 651, 54 L.Ed. 946 (1910)
• Parties: INTERSTATE COMMERCE COMMISSION, Appt., v. CHICAGO, ROCK ISLAND, & PACIFIC RAILWAY COMPANY et al. NO 663. BURNHAM, HANNA, MUNGER DRY GOODS COMPANY et al., Appts., v. CHICAGO, ROCK ISLAND, & PACIFIC RAILWAY COMPANY et al. NO 664
• Court: U.S. Supreme Court

218 U.S. 88

30 S.Ct. 651

54 L.Ed. 946

INTERSTATE COMMERCE COMMISSION, Appt.,

v CHICAGO, ROCK ISLAND, & PACIFIC RAILWAY COMPANY et al.

NO 663.

BURNHAM, HANNA, MUNGER DRY GOODS COMPANY et al., Appts.,

v. CHICAGO, ROCK ISLAND, & PACIFIC RAILWAY COMPANY et al.

NO 664.

Nos. 663, 664.

Argued April 5, 6, 1910.

Decided May 31, 1910.

Messrs. Wade H. Ellis, Luther M. Walter, and Edwin P. Grosvenor for appellant in No. 663.

Messrs. John Lee Webster, George T. Bell, and John H. Atwood for appellants in No. 664.

Messrs. Frederick Manley Ives and Everett M. Burdett as amici curice in support of position of appellants.

Messrs. William D. McHugh and Colin C. H. Fyffe for appellees.

Mr. Justice McKenna delivered the opinion of the court:

The question in the case is the validity of an order of the Interstate Commerce Commission, reducing the class rates charged by the appellee railroad companies on through freight shipped from the Atlantic seaboard to Kansas City and St. Joseph, Missouri, and Omaha, Nebraska, cities on the Missouri river, and called throughout the record, and in this opinion, Missouri river cities.

The through class rates were reduced from 1/147, 2/120, 3/93, 4/68, 5/57 in CENTS PER 100 POUNDS TO 1/138, 2/113, 3/88, 4/64, 5/54. the numbers above the lines indicate the classes and the numbers below the lines the rates.

The reduction was made in that part of the through rate which applied to the haul between the Mississippi and Missouri rivers. Explaining its order of reduction, the Commission said the through rates from Atlantic seaboard terminals to the Missouri river cities are made by adding together the rates from points of origin to the Mississippi river crossings, using proportional rates when such were available, and the local rates from the Mississippi crossings to the Missouri river cities. The through rates the Commission pronounced to be unreasonably high, 'because those portions of the through rates which apply between the Mississippi river crossings and the Missouri river cities are too high. These are defendants' 'separately established rates,' which are 'applied to the through transportation,' and therefore the through rates should be adjusted by reduction of those factors or parts thereof which are found to be unreasonable.'

The division of the rates, as established by the railroad, was as follows: From New York to the several Mississippi river crossings on traffic moving through them to points beyond, in cents per 100 pounds, 1/87, 2/75, 3/58, 4/41, 5/35. From the Mississippi river crossings to the Missouri river cities, 1/60, 2/45, 3/35, 4/27, 5/22. The latter are local class rates under the Western classification, and are those which the Commission adjudged too high, and which it reduced in cents per 100 pounds, to the following: 1/51, 2/38, 3/30, 4/23, 5/19. The amount of reduction it will be observed, is 9 cents on first-class freight and a proportional reduction on the other four classes.

The order of the Commission required the railroad companies to cease and desist on or before the 25th of August, 1908, from charging, demanding, or collecting anything in excess of the rates last above set out, and the companies were required to put such rates in force before the 25th of August, 1908, and maintain them for a period of not less than two years.

The proceedings before the Commission were begun by a petition filed by appellants in case No. 664, who were doing business in Kansas City and St. Joseph, Missouri, and Omaha, Nebraska. They alleged that they were engaged in either the mercantile or manufacturing business, and in buying and selling various commodities shipped from the Atlantic seaboard to them, respectively, under the definite freight classifications maintained by the railroad companies. The rates, according to the classifications, from New York to St. Paul and Minneapolis, and rates from New York to Chicago, and from the latter city to Kansas City, St. Joseph, and Omaha, the petition alleged, 'are arrived at by adding to the rates from Mississippi river points, as shown above, the following rates, subject to official classification, to wit: 87 cents, 75 cents, 58 cents, 41 cents, and 35 cents per hundred pounds for said five classes, respectively; that the aforesaid through rates, applying from New York to Kansas City, are observed by defendant carriers on traffic moving by way of Chicago; that in the division of said through rates from Atlantic seaboard to said three Missouri river cities, Kansas City, St. Joseph, and Omaha, each of said defendant railroad companies allows and pays to said Eastern connections 72.3 cents, 62.4 cents, 48.4 cents, 34.3 cents, and 29.4 cents per hundred pounds on the said five classes, respectively; and charges, accepts, and retains, as their respective shares of said through rates upon the several classes aforesaid, 74.7 cents, 57.6 cents, 44.6 cents, 33.7 cents and 27.6 cents per hundred pounds.'

A table showing the distance of the various roads from New York to St. Paul and Minneapolis and the Missouri river cities is given, which shows that the distances are not materially different, and also shows distances west of Chicago.

It is alleged that the rates charged and the classifications enforced by the company for the transportation of property from the Atlantic seaboard and other producing territory to the Missouri river cities 'are in themselves unreasonable and relatively unjust, unfair, and prejudicial as compared with rates from the same territory to St. Paul and Minneapolis,' through the volume or tariff and the cost of handling it is not greater. Discrimination is alleged, with a detail of circumstances, against the Missouri river cities, and the violation of the interstate commerce act.¹

What are conceived to be reasonable rates are set out, and that the rates charged are alleged to be discriminatory against the complainants, and are excessive and unreasonable in and of themselves, because higher and greater than enough to pay the cost of transportation and maintenance and a fair profit on the valuation of the property employed.

The railroad companies filed separate answers, in which they admitted the charges and rates set out in the petition and the division thereof, but denied discrimination in favor of St. Paul and Minneapolis against the Missouri river cities, and alleged competitive conditions existing as to the firstnamed cities. They deny that the rates from the Atlantic seaboard to the lastnamed cities, suggested by the petitioners, would be reasonable or just, or that the rates charged are unduly high or excessive, or discriminate against the Missouri river cities or the petitioners.

The Chicago & Northwestern Railway Company filed an amended answer, in which it alleged that the complaint related to the through rates from the Atlantic seaboard to the Missouri river cities, and that they were alleged to be unfair and prejudicial compared to rates to St. Paul and Minneapolis, and 'unreasonable and excessive in and of themselves.' And, further, that the rates had been fixed and established by the railroad companies by virtue of joint traffic agreements, and had been duly filed, posted, and published by the companies, and that all the companies to such agreements were necessary parties. Fifty or more companies were named.

The Eastern companies (those operating east of Chicago), answering, denied that there was any agreement between them and the original respondents for the shipment and division of through rates between the Atlantic seaboard and St. Paul and Minneapolis, and alleged that, in conjunction with their several connections, they receive to Chicago the same rate in cents per hundred pounds as applied upon like tariff originating at the same points of origin and terminating at Chicago, and are not concerned with the rates or proportional rates charged or accepted by the different carriers from Chicago to St. Paul or Minneapolis. They also denied that they were parties to any joint tariff or class rates from the Atlantic seaboard to the Missouri river cities. They admitted participation in joint through class rates to Mississippi river points, and denied that they, however, were unreasonable or unjust in or of themselves, or as respectively applied to shipments destined to St. Paul or Minneapolis, or shipments destined to points west of the Mississippi river.

They further alleged as follows:

'That the rates from New York city to East St. Louis, Illinois, are computed at 116 per cent of the rates from New York to Chicago, according to relative distances, that the rates from New York to East St. Louis are part of a general structure of rates whereby all rates from New York and other Eastern points to points in the states of Ohio, Indiana, Illinois, Michigan, Pennsylvania, Kentucky, and Wisconsin, and the province of Ontario are made upon the bases of percentages of the rates from the points of origin to Chicago; that the said rates for the first five classes governed by the official classification from New York to East St. Louis of 87 cents, 75 cents, 58 cents, 41 cents, and 35 cents per hundred pounds, respectively, are applied as proportional rates to the various Mississippi river crossings north of East St. Louis, to and including East Dubuque, Illinois, and that from other Eastern points than New York city the rates to East St. Louis apply equally to said Mississippi river crossings, and all of such rates to said Mississippi river crossings apply uniformly upon all shipments destined to all points west of the Mississippi river and east of Pacific coast terminals and points taking the same rates. Respondents allege that all of the rates from Eastern points to said Mississippi river crossings are just and reasonable in and of themselves, and as applied to shipments destined to any point west of the Mississippi river and east of Pacific coast terminals.

They alleged that the rates to the Mississippi river...