struction of branch lines into sections of the Walla Walla the road runs northeasterly The defendant alleges that the adoption of a rate of freight charges for its road as low as that prayed for in these complaints would make it impossible to operate its road and pay -operating expenses and cost of repairs, to say nothing of dividends or interest; and that such rate would prevent the construction of the new lines now under way and in contemplation by defendant, and would, in effect, destroy its entire property as an investment. twenty-three miles to Bolles' Junction, at The evidence in these cases, by deposition, daily line of steamers between said cities, car- Without reciting the details of this mass of evidence, which, for the purposes of this report and opinion, would be wholly unnecessary, but all of which we have carefully considered, we content ourselves with stating, in substance, the facts we find from it material to the inquiry involved. Exclusive of the Columbia and Palouse Railroad, the Oregon Railway & Navigation Company operates a main track of 576 miles. That portion of its system which extends from Portland to Walla Walla is 246 miles in length, and is construct ed along the Columbia River a distance of 187 miles to Umatilla Junction. From Umatilla Junction one branch of this railroad is constructed southeasterly through the Counties of Umatilla, Union, and Baker, in the State of Oregon, to Huntington, where it connects with the Oregon Short Line, and with that and the Union Pacific forms a through line from the Missouri River to Portland. The other line of this railroad extends from Umatilla Junction up the Columbia River about twenty-seven miles to Wallula, where it connects with the Northern Pacific, the two forming a through line from St. Paul to Port land. From Wallula Junction there is a branch of this road easterly about thirty-two miles to Walla Walla City, at which point it connects with the Pendleton Branch of de fendant's system from the South. From For the year ending December 31, 1886, the net earnings of the Chicago, Milwaukee & St. Paul Railway were 41.09 per cent of its gross earnings; and its total expenses per mile were $2,925.51, its gross earnings being $4.966.53. For the year ending December 31, 1886, the net earnings of the Burlington, Cedar Rapids & Northern Railway were 27.30 per cent of its gross earnings; and its total expenses per mile were $2,052.36, its gross earnings per mile being $2,823.20. For the year ending May 31, 1886, the net earnings of the Chicago & Northwestern Railway were 42.93 per cent of its gross earnings, and its total expenses per mile were $3,561.46, its gross earnings per mile being $6,139.22. For the year ending December 31, 1886, the net earnings of the Chicago, St. Paul, Minneapolis & Omaha Railway were 37.45 per cent of its gross earnings, and its total expenses were $2,841.77 per mile, its gross earnings per mile being $4,591.27. year 1887 being estimated to be about one third | its total expenses per mile were $4,778.57, its larger than that of the year 1886. There has gross earnings being $8,095.84 per mile. been a great decline in the price of wheat on the Pacific Coast steadily every year during the last five or six years. The average price of wheat now in the Portland market is about $1.05 per 100 pounds. By the course of trade wheat shipped from Walla Walla to Portland is exported to Liverpool and other European markets. The country is sparsely settled from Portland to Walla Walla and vicinity. Since April 1, 1887, the defendant has made general and very large reductions in its freight rates on nearly all commodities transported over its line between Portland and Walla Walla. During the month of July, 1887, defendant made and put in effect a rate on wheat from Walla | Walla to Portland of $5 per ton, or twenty-five cents per 100 pounds. Pendleton is 231 miles from Portland, Centreville 248 miles, Blue Mountain 265 miles; and at each ofthese points defendant has been maintaining a rate of $6 per ton on wheat shipped to Portland, the same as to Walla Walla, and they appear to have been grouped together for the purposes of this rate. For eleven months ending December 31, The construction of defendant's roads has been 1886, the net earnings of the Central Iowa at its own expense, and without any aid-fed- Railway were 10.42 per cent of its gross earneral, state, or municipal-either in their build-ings, and its total expenses per mile were ing or equipment, and in a new and sparsely $2,062.69, its gross earnings being $2,302.65 settled country. For the year ending June 30, per mile. 1886, the defendant paid as rental to the Northern Pacific Terminal Company for terminal facilities an expense of $171,452.36 and for the year ending June 30, 1887, $144,266.26. There is no competition between defendant and any other road or water line in the section of country through which its lines are operated. We find that the net earnings of the Railroad Division of the Oregon Railway & Navigation Company, 576 miles, and exclusive of the Columbia & Palouse Division, for the year end ing June 30, 1886, was $2,068,488.69, or 52.70 per cent of its gross earnings, and that its operating expenses per mile were $3,223.98. Upon the point of the expense of operation, as well as of earnings, as urged by petitioners, we have compared the earnings and expenses of operation of this Company on that division and during that period with other railroads more nearly similarly situated than any other in the United States, as contended by petition ers, and which are also more or less wheat carrying roads; and from such examination and comparison we find that while the average percentage of expense of operation was not greater on the Railroad Division of the Oregon Railway & Navigation Company than on them and its percentage of net earnings was considerably larger than either of them, yet its wheat rates were very much higher than any of them. The railroads taken for this comparison have been the Missouri Pacific Railway, the Chicago, Milwaukee & St. Paul Railway, the Burlington, Cedar Rapids & Northern Railway, the Chicago & Northwestern Railway, the Chicago, St. Paul, Minneapolis & Omaha Railway, the Central Iowa Railway, the At chison, Topeka & Sante Fé Railroad, and the Central Vermont Railroad Company. For the year ending December 31, 1886, the net earnings of the Missouri Pacific railway were 40.98 per cent of its gross earnings, and INTER S. For the year ending December 31, 1886, the net earnings of the Atchison, Topeka & Santa Fé Railroad were 49.19 per cent of its gross earnings, and its total expenses per mile were $3.355.51; its gross earnings, $6,604.57 per mile. For the year ending June 30, 1886, the net earnings of the Central Vermont Railroad Company were 31.39 per cent of its gross earnings, and its total expenses per mile were $3,841.13, its gross earnings per mile being $5,598.63. This list of railroads, except the Central Vermont Railroad Company, was named and selected by the petitioners. We included the Central Vermont Railroad because it is constructed and operated much of its way through a mountainous country, away from populous cities, and its through freights are large in proportion to its local freights. For the year ending June 30, 1886, the gross earnings per mile of the Railroad Division of the Oregon Railway & Navigation Company (576 miles) were $6.815.11, and the operating expenses per mile during the same period were $3,223.98. The wheat rates charged on these respective railroads we find to be as follows:* We do not find the expenses of operation of the defendant's railroad lines to be exceptionally high in proportion to its earnings. We find that the wheat shipments amount in a general way to nearly one fifth of the entire freight carrying traffic of the defendant between points on its railroad division (exclusive of the Columbia & Palouse Division) and Portland, and we are satisfied that this is a much larger percentage of wheat, when compared with its other local freights on this division, than is carried by either of the other railroads above named in proportion to their other local freights. We find from the evidence that the Table given on next page. 44 estimated wheat crop along the defendant's gerous to the successful existence of such railroad division is about one third greater the present year than ever before. We speak of the defendant's "railroad division" because it also owns a river division operated by steamboats on the Columbia River, and an ocean di vision operated by steamships on the Pacific Ocean, besides other properties. We also find that the defendant transports wheat in sacks from Walla Walla to Portland, and that this is a more expensive mode to the carrier of trans porting wheat than in car load quantities of solid wheat received from and delivered to el evators located along railroad lines. Having considered the evidence and arguments of counsel and parties, we are of opinion that the rate of thirty cents per 100 pounds charged each of the petitioners was too high. We are also of opinion that a rate of 234 cents per 100 pounds from Walla Walla to Portland, under all the circumstances, would be reasonable. Further than this we are not prepared to say that this wheat rate should now be re duced. A very large proportion of the business of the defendant is derived from through freights and cannot at present be otherwise than received from through freights. The volume of through freights fluctuates very greatly, in some seasons being more and in others less, and is frequently influenced by causes beyond the control of a remote carrier like the defendant. These fluctuations are occasionally haz ardous to the business of such a carrier. The expense of frequently hauling empty cars to reach this wheat before it can be received for carriage back to Portland is a circumstance that cannot be overlooked in an inquiry of this description, where the reasonableness of the rate charged upon it is the only question involved. The bare statement of these combined considerations, without amplifying them at length, as we could do, by abundant statistics and obvious reasoning, shows them to be vital and of very controlling weight, and that they cannot be ignored in a proceeding of this character. A variety of considerations of a very practical nature must always enter into the making of freight rates by a railroad company, and these also go very far in every instance to determine the question of whether such rates are reasonable or unreasonable. It would be very dan The defendant's railroad lines are phenomenally well situated in their relation to other transportation facilities and a large field of growing commerce and agriculture; and the consideration of their alleged large earnings has been urged upon us as a circumstance to show that it ought to reduce its rates upon wheat very greatly from Walla Walla to Portland. It is plain to be seen that the revenue derived by the defendant from this valuable property is very remunerative, but as to its amount the evidence is conflicting, and leaves would be antirely too great under the circumstances by which the defendant is surrounded at this time. the actual result in inextricable doubt at this time. Upon the theory of petitioners it would be between 10 and 11 per cent net per annum; upon the theory of defendant, and taking into The order, therefore, is that on and after the the estimate the several judgments rendered 15th day of December, 1887, the defendant against it for $210,000 by the Federal Court in must cease to charge more than 23 cents per Oregon, and now pending on appeal in the Su-100 pounds, or $4.70 per ton, on wheat transpreme Court of the United States, it would be about 6 per cent per annum. We have considered this, but it does not change the conclusion we have reached and which has been already stated. ported by it over its railroad lines from Walla Walla, in Washington Territory, to Portland, in the State of Oregon, during the present grain season. The order is also made in this form as to the A certified copy of a recommendation made present grain season upon the statement in the on the second day of June, 1887, by the hon-answer of the defendant that further reducorable Board of Railroad Commissioners of tions on wheat rates are intended to be made the State of Oregon to the Oregon Railway & by defendant as soon as this can be done, and Navigation Company, recommending, among upon the general course of dealing of defendother things, to reduce its rates on wheat to ant, as shown in the proofs, that the rate for twenty cents per 100 pounds in car load lots the next season on wheat will doubtless be furfrom certain points east in that State to Port- ther modified. land has been introduced in evidence by petitioners and is relied on by them as sustaining their view of this case. Among the points thus named are Centreville, Blue Mountain, and Pendleton. A recommendation of that honorable board as evidence upon any matter to which it relates receives, as it deserves to receive, at our hands a very high and respectful consideration; but we do not know the evidence upon which that recommendation was made, and if we did we would still be constrained to be governed by the evidence that is before us in this proceeding, which involves interstate commerce and is within a peculiar jurisdiction, which is devolved upon us by the Statute. Shortly after these petitions were filed the defendant, as it had a right to do under the statute, reduced its rate on wheat from Walla Walla to Portland from $6 per ton to $5 per ton, or twenty five cents per 100 weight. Since the first of April, 1887, the defendant has reduced its rates as follows: Cents per LINCOLN BOARD OF TRADE V. CHICAGO, BURLINGTON & QUINCY (No. 94.) BSTRACT of complaint filed November A17, 1887, alleging the imposition of unreas onable rates between Chicago and Lincoln. Complains that the rates between Chicago and Lincoln are unreasonable being 10 to 40 per cent higher than to Louisville or Omaha. That the Chicago, Burlington & Quincy with its connections, transports by a through line to San Francisco in accordance with a joint traffic arrangement. It transports from San 33 Francisco (principally sugar and canned goods) to Denver, Lincoln, Omaha and Chica37 go, and has published a joint tariff. 15 15 Bacon, in car loads, Nails, in car loads and less than car loads, Hardware, Agricultural implements in less than car loads, Lime, in car loads, 15 Canned goods sugar. .75 .60 33 15 Soap, Starch, less than car loads, Starch, in car loads, Barbed wire, Coal oil, less than car loads, Freight over Chicago, Burlington & Quin 43 cy from San Francisco to Omaha and Chicago 38 These are large and general reductions on a fine line of freights, and they are fairly entitled to be taken into consideration in a proceeding of this nature. Rates are, and should be, to a considerable extent, so related to each other in the manner in which they are laid for the revenue of a railroad that the instances very frequent in which a change of the freight upon one important article of commerce in volves a consideration of the relative rates on other articles. This case is one of that de scription. A reduction of rates, such as is claimed by petitioners, to fifteen cents per 100 pounds, or $3 per ton, on wheat shipments from Walla Walla to Portland is one that passes through Lincoln. Present rates to and from Lincoln discriminate against this locality. Defendants violate: A The LINCOLN BOARD OF TRADE v. The MISSOURI PACIFIC R. R. CO. (No. 95.) BSTRACT of complaint filed November 17, 1887, alleging the imposition of unreasonable rates between St. Louis, Missouri, and Lincoln and other places in Nebraska. Ichased and billed at one time" consigned to complainants at Lincoln, Nebraska, 375 barrels of sugar by way of defendants' lines at rates set forth in exhibits annexed; said shipment was by continuous carriage, without break of bulk or change of cars, from SanFrancisco to Lincoln. For the purpose of evading the Act and in pursuance of said agreement, etc., the Southern Pacific Railway Company declined to make a rate from San Francisco to Lincoln; but pursuant to request of Union Pacific Company and said agreement guarantied that the rate to Omaha should not exceed sixty cents per 100 Complain that the rates between St. Louis. Missouri and Lincoln, Nebraska and adjacent and competitive points in Nebraska are unreasonable as compared with former rates and rates to other points on their system (specifying cases), being from 10 to 50 per cent high-pounds on car load lots. er than from St. Louis to Weeping Water or Omaha. For twelve years previous to the Act Lincoln enjoyed Omaha rates. Lincoln should not be considered a local station but "a rate basing point from which rates are graded." Lincoln is a jobbing point of 45,000 population. The charges are too great in themselves and constitute discrimination against Lincoln, inasmuch as they give preference to certain lo. calities. PLUMMER, PERRY AND CO. v. The UNION PACIFIC R. CO. and Southern Pacific Co. (No. 96.) ABSTRACT of complaint filed November 17, 1887, alleging an imposition of an extra and discriminative charge for the transporta tion of sugar. Complainants are wholesale grocers at Lincoln, Nebraska. The Union Pacific, in pursuance of agreement, refused to switch the goods by way of the Omaha & Republican Valley Railroad direct to their destination, but sent them to Omaha where they were rebilled. Causing the goods to be shipped to Omaha and there rebilled involved additional distance of transit of seventy miles and imposed an extra charge on complainants-thereby discriminating against them. The NEW ORLEANS COTTON EX CHANGE, a Corporation Established under the Laws of Louisiana, V. NEW ORLEANS, CINCINNATI & TEXAS ABSTRACT of complaint filed November Defendant is "a common carrier engaged in the transportation of passengers and property The Union Pacific owns and operates the by railroad under a common control, etc.," Omaha & Republican Valley Railway (giv-"for a continuous carrying or shipment from ing points of connections of the roads). one State of the United States to other States Defendants, pursuant to an agreement, com- of the United States, to wit:" from New Orbination etc., operate lines of railway constit-leans, Louisiana, to and through Loiusiana, uting a through line connecting San Francisco with Omaha and Lincoln, Nebraska. That the said Union Pacific Railway Company and the said Southern Pacific Company by virtue of said agreement, had fixed a sched ule of prices and rates for carrying goods and passengers from San Francisco to Omaha; but when the rates to interior points and towns west of the Missouri River in Nebraska were agreed upon and schedule of prices fixed, the complainants are not informed. On information, etc., complainants allege that it was a part of said agreement and "such has been the practice of said companies that the rate only should be quoted from the City of Francisco to the City of Omaha, Nebraska, so that the Union Pacific Railway Company could rebill all goods at the City of Omaha to interior points and towns on their line of Railway and get the benefit of a charge for local rates." Complainants allege that heretofore to wit: on the 24th and 25th days of June, 1887, the American Sugar Refining Company of San Francisco, California, shipped at that point "the goods and property having been pur Mississippi, Tennessee, Kentucky, Pennsylva nia, New York and other States to the Cities of Lowell and Boston, Massachusetts, and New York City, and in the opposite direction from said respective places to New Orleans. Defendant for the last six months has been and still is making unjust and unreasonable rates for hauling cotton from Meridian, Mississippi, to New Orleans, Louisiana, and from points between Meridian and New Orleans to New Orleans in violation of the last clause of the first section of the Act. Has charged "or received from" some persons more than others for doing a "like, etc.," service, under substantially, etc. (Quoting words of Act.) Has given undue and unreasonable advantage, etc., to Lowell and Boston and subjected to undue, etc., disadvantages, New Orleans. Specifies: Has charged and does charge for transporting cotton from Meridian, Mississippi, to Boston and Lowell, Massachusetts (1,500 miles, or less), seventy five cents per 100 pounds and pays out of that sum ten cents per 100 pounds for compressing-making net rate to Boston and Lowell sixty-five cents per 100 pounds also. |