# Appendix — Baltimore & Ohio R. Co. v. United States

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Appendix
- **Published:** January 1, 1928
- **Citation:** 277 U.S. 291

## Text

APPENDIX A
(R. 27, 28)
Order of the Commission entered July 12, 1926
No. 16697

The Chicago, Rock Island & Pacific Railway Com-
pany, Missouri-Kansas-Texas Railroad Com-
pany, Missouri Pacific Railroad Company, and
St. Louis-San Francisco Railway Company

Vv.

The Baltimore and Ohio Railroad Company and
numerous other railroad companies including
the appellants

This case being at issue, upon complaint and
answers on file, and having been duly heard and
submitted by the parties, and full investigation of
the matters and things involved having been had,
and the commission having, on the date hereof, made
and filed report containing its finding of fact and
conclusions thereon, which said report is hereby
referred to and made a part hereof:

It is ordered, That the above-named defendants,
according as they participate in the transportation,
be, and they are hereby, notified and required to
cease and desist, on or before October 12, 1926, and
thereafter to abstain from the practice of requiring
the above-named complainants, together with the
(51)

52

Chicago, Burlington & Quincy Railroad Company
and the Wabash Railway Company, to bear the
charges for transfer services from East St. Louis,
Ill., to St. Louis, Mo., on westbound freight traffic
passing through both points on combination rates
which are the same on St. Louis as on East St. Louis.

It is further ordered, That said defendants, ac-
cording as they participate in the transportation,
be, and they are hereby, notified and required to
establish, on or before October 12, 1926, upon notice
to this commission and to the general public by not
less than 30 days’ filing and posting in the manner
prescribed in section 6 of the interstate commerce
act, and thereafter to maintain and apply to the
transportation of westbound freight traffic passing
through both East St. Louis, Ill., and St. Louis, Mo.,
on combination rates which are the same on St.
Louis as on East St. Louis, and delivered to com-
plainants, or the Chicago, Burlington & Quincy
Railroad Company or the Wabash Railway Com-
pany, the practice of bearing or absorbing on such
traffic the charges for transfer services from de-
fendants’ lines in East St. Louis, Ill, to the lines
of complainants, or of the Chicago, Burlington &
Quincy Railroad Company or the Wabash Railway
Company in St. Louis, Mo.

And it is further ordered, That this order shall
continue in foree until the further order of the
commission.

APPENDIX B

In Terminal Railroad Association vy. United
States, 266 U.S. 17, the East Side Lines, who were
represented by at least one of the learned counsel
who appears for them here and who subscribed to
their briefs in both cases, said in their main brief
in that case (p. 27):

WHAT ARE THE POWERS OF THE INTERSTATE COMMERCE COMMISSION
IN REFERENCE TO THE MATTER HERE IN CONTROVERSY?

It would be tedious and altogether unnecessary
to cite the many cases determined by this Court,
holding that where a matter is within the cogni-
zance of the Interstate Commerce Commission no
appeal can be made to the Courts until and unless
application has been first made to the Commission.
Teras & Pacific Railroad Co. vy. Abilene Cotton Oil
Co., 204 U. S. 426, is of course the leading case on
that subject, and it has been followed by many
decisions such as Robinson v. B. & O. R. R. Co.,
222 U.S. 506; 7.C.C.v. I. C. R. R. Co., 215 U.S.
452; B. d& O. R. R. Co. vy. Piteairn Coal Co., 215
U.S. 408; Precter d&} Gamble v. United States, 225
US. 282; Southern Railway Co. v. Reid, 222 U.S.
425,

The Interstate Commerce Act has given from
time to time broad and still broader powers over
the railroad system. We mention the following as
examples of this control:

Section 1, Par. 4, makes it the duty of every
common carrier to establish through routes and
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54

just and reasonable rates, fares, and charges ap-
plicable thereto, and to provide reasonable facili-
ties for operating through routes and to make rea-
sonable rules and regulations with respect to the
operation of through routes; and in case of joint
rates, fares, or charges, to establish just, reason-
able, and equitable divisions thereof as between the
carriers participating therein.

The term ‘‘car service’ is by Section 1, Par. 10,
defined to be, among other things, the interchange
of cars and other vehicles used in the transporta-
tion of property.

And by Section 1, Par. 11, it is made the duty of
every carrier to establish, ovserve, and enforce just
and reasonable rules, regulations, and practices
with respect of car service.

By Section 3, Par. 3, it is provided that all car-
riers engaged in the transportation of passengers
or property shall afford all reasonable, proper, and
equal facilities for the interchange of traffic between
their respective lines, and for receiving, forward-
ing, and delivering passengers or property to and
from their several lines and those connecting there-
with.

By Section 15, Par. 2, it is provided that the
Commission may establish through routes, joint
classifications and joint rates, fares, or charges,
and the divisions of such rates, fares, or charges,
and the terms and conditions under which such
through routes shall be operated.

By section 15, Par. 6, it is provided that the Com-
mission finding that the divisions of joint rates,
fares, or charges is unjust, unreasonable, inequit-
able, or unduly preferential may, by order, pre-

ei nail nina eae ae ee ee ew rr ee ey Se ee PP OES

55

scribe the just, reasonable, and equitable divisions
thereof to be received by the several carriers.
By section 208 of the Transportation Act, 1920, it
is provided that all rates, fares, and charges, and
all classifications, regulations, and practices, which
on February 29, 1920, were in effect, should con-
tinue in force and effect until thereafter changed
by State or Federal authority, respectively, or pur-
suant to authority of law.
And by Par. (b) of said Section 208 it was pro-
vided that all divisions of joint rates, fares, or
charges, which on February 29, 1920, are in effect
between the lines of carriers subject to the Inter-
state Commerce Act, shall continue in foree and
effect until thereafter changed by mutual agreement
between the interested carriers or by State or Fed-
eral authorities, respectively.
What are the powers of the Interstate Commerce
Commission in reference to the matter here in con-
troversy and what was the purpose of passing the
Transportation Act is stated concisely in the opin-
ion of this Court, delivered January 7, 1924, in the
case of Dayton Goose Creek Ry. Co. v. The United
States. We make the following extract :

The new Act seeks affirmatively to build
up a system of railways prepared to handle
promptly all the interstate traffic of the
country. It aims to give the owners of the
railways an opportunity to earn enough to
maintain their properties and equipment in
such a state of efficiency that they can carry
well this burden. To achieve this great pur-
pose, it puts the railroad systems of the
country more completely than ever under
the fostering guardianship and control of
the Commission which is to supervise their
issue of securities, their car supply and dis.

PapeRIT er ene UN TREO AS

56

tribution, their joint use of terminals, their
construction of new lines, their abandonment

of old lines, and by a proper division of joint

rates, and by fixing adequate rates for inter-

state commerce, and in ease of discrimina-

tion, for intrastate commerce, to secure a fair
return upon the properties of the carriers
engaged.

A very large part of these powers had been con-
ferred on the Interstate Commerce Commission
prior to the passage of the Transportation Act and
the amendments at that time made in the Inter-
state Commerce Act. But if we appeal to the law
as it was written before or since the passage of the
Act, practically the same result would be reached.
We have had no hesitancy, however, in reciting the
terms of the present law, for the reason that in
matters of public concern, decrees of Courts and
their execution are to be governed by laws in force
when the decree is called in question.
Hodges v. Snyder, 261 U.S. 600, and the
Wheeling Bridge case therein referred to.

Thus while the Commission has had jurisdiction
to prescribe divisions of joint rates since 1906 (34
Stat. L. 584, approved June 29, 1906), the scope of
that power has been extended and emphasized by
the Transportation Act, 1920 (41 Stat. L. 484, ap-
proved February 28, 1920). The Commission, un-
der the direction of Congress in this latter act, has
divided the carriers of the United States into
groups for rate-making purposes. (Section 15a,
Interstate Commerce Act, 41 Stat. L. 488, approved
February 28, 1920.) The Mississippi River was
made the dividing line between the Eastern, West-
ern and Southern groups. (Increased Rates, 1920,

. - CRAGIN LOVEE LT IONE
PPG CLINI GE IO ELIT SO anita evo oe 3 2

Eee

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57

58 I. C. C. 220, at 225.) In the same proceeding the
Commission also prescribed rate levels for groups
thus created. In prescribing rate levels for groups
it is an important adjunct of the Commission’s au-
thority for it to apportion revenue resulting from
joint rates among groups of carriers so as to pro-
vide ‘‘as nearly as may be’’ a fair return for
each group. The New England Divisions Case, 261
U.S. 184. In the present case the West Side Lines
are in the rate group denominated by the Comm‘s-
sion in Increased Rates, 1920, supra, as the Western
group, while the East Side Lines are, generally
speaking, either in the Eastern or Southern Group.
Consequently the apportionment of divisions of
joint rates as between carriers and the decision
as to which set of carriers should pay for transfer
charges on traffic moving from one rate group to
another, has more than ever become a matter of
administrative discretion for the Interstate Com-
merce Commission, which is directed by Congress
to prescribe rates that shall yield for each group
the ‘‘fair return’’ provided by the Act. (Section
lda, Interstate Commerce Act.)

Obviously such a fair return can not be deter-
mined without also exercising an authority in
respect to the division of earnings under joint rates
and the apportionment of expense that shall be
made in respect to traffic moving between the
groups established by the Commission. Hence,
while the division of joint rates has for eighteen
years been a matter within the exclusive primary
jurisdiction of the Commission, the new law has
emphasized the necessity for guarding the juris-
diction thus conferred by Congress as exclusive at
least until after the Commission shall have acted.

- 7 ¥ > . ei
PRA NIS EUT HT IS REEL ILE IES EOE Reo

Be Os hy Mehl ied gee eS ee esta

58

In their reply brief the same learned counsel fur-
ther maintained (p. 25):

THE ACTIVITIES OF TERMINAL ASSOCIATION ARE SUBJECT TO THE
EXCLUSIVE CONTROL OF THE INTERSTATE COMMERCE COMMISSION
UNDER THE TRANSPORTATION ACT OF 1920
The appellees argue that the Transportation Act

of 1920 does not apply to the regulation and con-

trol of the Terminal Association, since they say
that they and the East Side Lines have agreed upon
the use of the terminal properties, and the appellees
seem to contend that the Interstate Commerce Com-
mission would only have jurisdiction over this ter-
minal situation in the event of a disagreement.

(Brief for appellees, p. 22.)
In the light of the controversy that is now raging

both over the use of the terminal properties as well

as the payment for such use, we are utterly at a

loss to understand how the appellees conceive that

no such disagreement exists at present between
themselves and the East Side Lines.

The Terminal Association insisted in its brief,
and again reiterates, that the Transportation Act
of 1920 vested exclusive jurisdiction in the Inter-
state Commerce Commission to control the relations
between these Terminal Companies and all the user
lines, whether Proprietary or Nonproprietary, and
that if the West Side Lines are not satisfied with
the present method and practice under which the
terminal charges are * posed, then their remedy
lies before the Interstate Commerce Commission
and can not be invoked as growing out of the viola-
tion of any Court decree.

We further contended, and still contend, that this

Court has no jurisdiction to disturb rate conditions

which have existed here since 1877, and the destruc-

MAS a yy Pee Satin oS -

59

tion of which would not profoundly disturb the
revenues of other eastern carriers at this gateway
not parties to these proceedings, but would affect
the rate structures now in effect at other crossings
of the Mississippi River.

It seems to us too clear for much argument that
this action is but an effort on the part of the West
Side Lines to obtain by indirection and through an
order of Court a change in a matter which is origi-
nally and exclusively within the power and author-
ity of the Interstate Commerce Commission.

It is difficult to understand why the West Side
Lines, if they feel themselves unfairly treated, have
not taken this controversy to the Interstate Com-
merce Commission, where their right to relief is
perfectly clear, provided their cause be just.

7 ease KMS Heer OD ante aa AE Ie eee eT
LESAGE SLY LEEDS AEP BOS AEE IOI ES ONL OE FE DOERR PT Pe ay a ¥ DAL

APPENDIX C

Representative Mann (Illinois) on April 12, 1910,
moved that the House resolve itself into the Com-
mittee of the Whole House for the consideration
of the bill H. R. 17536, the railroad-rate bill.
(Cong. Ree. Vol. 45, Pt. 5, 61st Cong., 2d Sess., p.
4571.) Speaking to the bill, Representative Mann
said (pp. 4572, 4573, 4578, 4579) :

Broadly speaking, the propositions in-

' volved in the pendiig bill may mostly be
covered under three general heads:
* * * * *
Second. Enlarging the statutory duties of
the railways and the rights of shippers and
increasing the powers of the Interstate Com-
merce Commission; so that classifications,
regulations, and practices shall be just and
reasonable and enforceable as such, whether

affecting the rates charged or not.
* * * * *

Mr. Mann. We have conferred upon the
Interstate Commerce Commission the broad-
est kind of powers now so far as railway
vates are concerned, and we are proposing
in this bill to greatly enlarge their power
by giving them the same power over classifi-
cations, regulatiens, and practices which
they now have over rates. That power is
in the way of a legislative power which can
not be conferred upon the courts, and we

(60)

=

61

have, so far as that is concerned, I think, in
the law restricted the power of the courts
just as far as it is possible for legislation
to restrict it. And I sometimes think pos-
sibly we have restricted it too much, and
yet there has been no injury from that cause
as yet.

*

* * * +

REGULATIONS AND PRACTICES

Just how far that term goes—regulations
and practices affecting rates—has never been
fully determined by the courts. The Inter-
state Commerce Commission exercises the
power over the rates. They have never ex-
ercised the power over classification of
freight, although classification of freight is
just as important as rates, because by mov-
ing a particular article from one class to an-
other you affect the rates. They have never
exercised the power over certain practices of
the railroads or regulations of the railroads
which may seem apart from the question of
rates. The practice of the law is that Con-
gress first declares the duty of the railroad
companies and, under existing law, declares
that rates must be just and reasonable. The
rest is conferring power upon the commis-
sion to ascertain the fact; but the jurisdic-
tion of the commission depends, first, upon
the declaration by Congress that it is the
duty of the railroads to make rates just and
reasonable.

SPORE ITE AAA PLT EAE EBS eee

62

AMENDMENT PROPOSED

That is contained in section 1 of the exist-
ing law, and we propose an amendment to
that law, as follows:

And it is hereby made the duty of all com-
mon carriers subject to the provisions of this
act to establish, observe, and enforce just
and reasonable classifications of property for
transportation, with reference to which rates,
tariffs, regulations, or practices are or may
be made or prescribed, and just and reason-
able regulations and practices affecting clas-
sifieations, rates, or tariffs, the issuance, form
and substance of tickets, receipts, and bills of
lading, the manner and method of present-
ing, marking, packing, and delivering prop-
erty for transportation, the facilities for
transportation, the carrying of personal,
sample, and excess baggage, and all other
matters relating to or connected with the re-
ceiving, handling, transporting, storing, and
delivery of property subject to the provisions
of this act which may be necessary or con-
venient to secure the safe and prompt re-
ceipt, handling, transportation, and delivery
of property subject to the provisions of this
act upon just and reasonable terms, and
every unjust and unreasonable classifica-
tions, regulation, and practice is prohibited
and declared to be unlawful.

This is a distinct step forward in the con-
trol of the railroads. It undertakes to re-
quire, when carried out in the rest of the
bill, the duty on the part of the railroads to

ENGEL LEIP RIL BE EER ORE EEN TE LEI NON OE IEE SO OE NI aaa

63

make just and reasonable regulations and
practices, and gives to the commission in suc-
ceeding sections of the bill the power, if the
railroads do not make just and reasonable
classifications, regulations, and practices, to
make them and to enforce them on the rail-

roads.
+ * * * *

We cover part of them under existing law,
but there are a great many provisions, as the
gentleman can understand, arising from the
countless transactions throughout the United
States where regulations and practices are
agreed to by railroads, where they have one
practice on one railroad and another practice
on another road, practices affecting the same
matter not now controlled by the commission,
but under these provisions of the law the
commission will have control over these
matters.

Representative Mann (Illinois), on May 5, 1910,
moved that the House resolve itself into the Com-
mittee of the Whole House for further considera-
tion of the bill H. R. 17546, the railroad rate bill.
(Cong. Ree. Vol. 45, Pt. 6, 61st Cong. 2d Sess.,
p. 5839.) In the course of the remarks the follow-
ing occurred (p. 5852) :

Mr. Mann. Mr. Chairman, so far as I
could learn from the reading of the amend-
ment, everything in it is now covered in the
bill. It would be too dangerous to reinsert it

a second time in different language. Sec-
tion 6a of the bill, amending section 1, makes

64

it the duty of common carriers to establish
just classifications, regulations, and _prac-
tices in reference to a number of things that
are enumerated in the bill, and practically
covering everything in connection with the
receipt, handling, transporting, storage, and
delivery of property subject to the provisions
of the act which may be necessary or con-
venient to secure the safe and prompt re-
ceipt, handling, transportation, and delivery
of property upon just and reasonable terms;
and every unjust and unreasonable classifi-
cation and practice is prohibited and de-
clared to be unlawful. That is all in section
1. It imposes that duty on railway carriers,
and section 13 of the act provides that if
this is not done complaint can be filed before
the commission, or the commission, on its
own initiative, may make the investigation.
Section 15 of the act to regulate commerce,
which is section 9 of this bili now under econ-
sideration, gives to the commission, if the
railway company does not establish these
just and reasonable regulations, practices,
classifications, and rates, the power to estab-
lish them, and require the railway company
to enforce and observe them.

That language is carefully worked out in
connection with the existing law so as to be
sure it is constitutional. I do not know what
the effect of the gentleman’s amendment
would be, but it would duplicate language,
possibly, in a form which would not meet
the approval of the courts. In the language

65

which we have employed we lave followed the
provisions as to form of the existing law,
which has been construed by the commission
and the courts. We are on safe ground. We
give to the commission under this bill the
authority to enforce upon the railroad com-
panies any reasonable regulations and prac-
tices, classifications, or rates which may be
necessary in the handling, receiving, stor-
age, or transportation of property, and noth-
ing further can be done. The gentleman’s
amendment is unnecessary, and I fear it
would be dangerous to insert it in the bill.

O

CONTENTS

Page
STATEMENT OF THE CASE____--------------- 1
Proceedings Before the Commission___--__--___- 2
a tani dele nantirnenants 12
Proceedings in the Court Below_.____._-.---- 29
I CGD nacccacnacmoasnsmace 29
_ EES EAE CO 29
ee eee en 99

Il. The Order Is Within the Power Conferred Upon
EE Se aes ee ae eee 30

Il. The Order Is Supported By Substantial Evi-
Ts cid csighehecbts en cnitehiibncisadnaniloneseneatiandian ebaiiionatttelttbite 49
I, isha it stateichini Gicnenidainscinnbahdilieaiinininn ttitarenie 54

CASES CITED
Alabama 4 Vicksburg Ry. Co. vy. Jackson & Eastern Ry. Co., 271

OL ES a 44, 45
Birmingham Sou. R. R. Co. vy. Ala. Great Sou. Ry., 61 I. C. C.

I cecesaie ig teenies inh areijnnenioenicmniiiiindnitsaaaiaaniininiaeineimaaiatenpincvaldblaitbianen 21
Brimstone R. R. & Canal Co. vy. United States, —U. 8.—, not

yet officially reported, decided Feb. 20, 1928_...-.---------- 52
oe a Conse Geele Case, @ 1. CO. CO. B06 nce cccccceccenseces 28
Central R. R. Co. v. United States, 257 U. 8. 247_---------- 44, 47, 50
Chicago, Indpls. 4 Louisv. Ry. Co. vy. United States, 270 U. 8.

EE ee 43, 45
Chicago, Mil. & St. P. Ry. Co. vy. Un. Pac. R. R. Co., 88 LI. C. C.

Ee a ee ee ae ee a ee eN 44
ee US 28
Jndastriel Reilwaye Case, 29 1. C. C. 212...........-..--.--- 21
Lowisvilie 4 Nashville R. R. v. United States, 238 U. 8. 1.------ 45
Missouri Pac. R. R. Co. vy. Reynolds-Davis Grocery Co.. 268 U. 8.

| EE RE ee Se a ee eR | Le a 21, 47
Myrick v. M’chigan Central R. R. Co., 107 U. 8. 102_--------- 47
New England Divisions Case, 261 U. 8. 184.......-...-.------- 52
Peoria 4 Pekin Union Ry. Co. v. United S/ates, 263 U. 8. 528__- 45
Penna. Co. v. United States, 236 U. 8. 351.........-.-_-.-_---_- 43, 45

Railroad Commission of Calif. v. Sou. Pac. Co., 264 U. 8. 331_-- 4A
Routing on Coal from Western Maryland Mines, 66 I. C. C. 103;

I

Page
St. Louis 8. W. Ry. Co. v. United States, 245 U. S. 136____ 44,50
Sou. Pac. Co. v. I. C. C., 200 U. 8. 536 43
Terminal R. R. Assn. v. United States, 266 U. S. 17____ 16, 29, 30, 48

United States v. Abilene & Sou. Ry. Co., 265 U. S. 274________ 52
United States v. Amer. Ry. Exp. Co., 265 U. S. 425_-___________ 44
United States v. Mich. Port. Cement Co., 270 U. S. 521_________ 45
United States v. N. Y. Cent. R. R., 272 U 8. 457_-_________ 43, 44, 47
United States v. P. R. R. Co., 266 U. 8. 191 44, 45
United States v. St. Louis Terminal, 224 U. S. 383; 236 U. S.

Pil iataiica sabcibeceacicsceraa sa aiictepdeikchaaaainatep telbsteiatekdheciedainaensadanainapssatanio 13, 14, 30, 47

Virginian Ry. Co. v. United States, 272 U. 8S. 658______________ 51

Inthe Supreme Court of the Wnited States

OctToBER TERM, 1927
No. 404

Toe BALTIMORE AND OHIO RarmrRoaD COMPANY
et al., appellants
v.

Tue UNITED STATES OF AMERICA, INTERSTATE ComM-
merce Commission, et al., appellees

BRIEF FOR INTERSTATE COMMERCE COMMISSION

STATEMENT OF THE CASE

This is an appeal under the Act of October 22,
1913, 38 Stat. 219, from a decree of the District
Court for the Northern District of Illinois, Eastern
Division (Anderson, Circuit Judge, and Wilkerson
and Cliffe, District Judges), dismissing, for want
of equity, a bill brought by thirteen railroad com-
panies * to enjoin and set aside an order of the In-

*Baltimore & Ohio R. R. Co.; Chicago & Alton R. R. Co.;
Chicago & Eastern Illinois Ry. Co.; Cleveland, Cincinnati,
Chicago & St. Louis Ry. Co.; Illinois Central R. R. Co. ; Illi-
nois Traction, Inc. ; Litchfield & Madison Ry. Co.; Louisville
& Nashville R. R. Co.; Mobile & Ohio R. R. Co.; New York,
Chicago & St. Louis R. R. Co.; Pennsylvania R. R. Co.;
Southern Railway Company; Wabash Railway Company.
(1)

Oe es Fes

2

terstate Commerce Commission requiring them to
bear or absorb the charges for transfer services
from their lines in East St. Louis, Lilinois, to the
lines of six railroad companies’ in St. Louis, Mis-
souri, on westbound freight traffic passing through
both East St. Louis, Illinois, and St. Louis, Mis-
souri, on combination rates which are the same on
St. Louis as on East St. Louis. (R. 27-29.)

No opinion was delivered by the court below.

The Commission’s order was entered in a pro-
ceeding entitled Chicago, Rock Island d&: Pacific
Ry. Co. et al. v. Baltimore & Ohio R. R. Co. et al.,
the report in which is published at 113 I. C. C. 681.
The order (R. 27-28) was directed against 39 rail-
road companies but only the 13 who are appellants
herein joined as plaintiffs in the suit to annul the
order. (R. 1.)

Proceedings Before the Commission

The complaint (R. 30) was filed February 5,
1925. Hearing was held at St. Louis September 21
to 26, 1925, before an examiner of the Commission,
in which all parties participated (R. 75-392). A
proposed report by the examiner was issued, to
which certain exceptions were taken; briefs were
filed and the case was orally argued before the Com-

* The four who were complainants before the Commission,
viz, The Chicago, Rock Island & Pac. Ry. Co.; Missouri-
Kansas-Texas R. R. Co.; Missouri Pacific R. R. Co.; St.
Louis-San Francisco Ry. Co.; and two who were cross com-
plainants, viz, the Chicago, Burlington & Quincy R. R. Co.;
and the Wabash Railway Company.

3

mission. July 12, 1926, the Commission rendered its
report and order. August 14, 1926, defendants
petitioned the Commission for reargument and re-
consideration, which was denied. The effective date
of the order was October 12, 1926, but by supple-
mental order (R. 30) it was postponed until De-
cember 11, 1926, when it became operative.

The four complainant railroad companies op-

erate lines which extend westward from St. Louis,
Missouri, and are called west-side lines. The ap-

pellants were among the principal defendants.
They operate lines on the east side of the Mis-
sissippi river, terminating at East St. Louis, Hli-
nois, and they are called east-side lines.

None of the steam lines, either west side or east
side, has its own rails across the Mississippi river
between St. Louis and East St. Louis, and there is
no direet physical connection between any west-
side line with any east-side line in the St. Louis-
East St. Louis District. In all instances connee-
tion is made through the intermediary of the Ter-
minal Railroad Association of St. Louis and its sub-
sidiaries, all of whieh are collectively referred to
herein as the Association. (Ex. 4.) *

The Association is a terminal transfer and
switching eompany with faeilities on both sides of
the Mississippi river, conneeted by two bridges, the

*This statement is correct in reference to all steam lines.
The Ilinois Traction System, an electric line, has rails over
its own bridge inte St. Louis, and it imterehanges traffie with
the west-side lines in St. Louis. (R. 90.)

4

Eads and the Merchants. It has connections with
all railroads on both sides of the river. The Asso-
ciation is a cooperative enterprise, being owned
jointly by 15 of the east-side and west-side car-
riers. (R. 76; Ex. 4.) It operates under contract
with the various proprietary and tenant carriers,
and under those contracts the carriers have track-
age rights over the rails of the Association between
St. Louis and East St. Louis. (Ex. 51.) These
trackage rights are exercised by all carriers for
passenger traffic, and by two carriers, the Chicago
& Eastern Illinois and the Wabash, for freight.
(R. 90; 192; 200; 297; Ex. 4, p. 50.) The other
carriers utilize the services of the Association for
transferring freight. Under the contracts men-
tioned, the properties of the Association constitute,
in effect, an extension of the rails of the east-side
lines into St. Louis, and, at the same time, an ex-
tension of the rails of the west-side lines into East
St. Louis. By virtue of this joint facility the routes
of the east-side carriers to St. Louis and of the
west-side carriers from East St. Louis overlap be-
tween St. Louis and East St. Louis.

As stated in the Commission’s report, in addition
to the facilities that the Association affords them,
several of the east-side lines own or lease other
facilities in St. Louis, such as depots and team
tracks, where they receive and deliver in their own
names traffic moving between St. Louis and points
on their lines. The east-side lines advertise through
service to and from St. Louis, and in their tariffs

5

show St. Louis as a point on their lines. In ap-
parently all respects as to both freight and passen-
ger traffic the east-side lines individually recognize
St. Louis as a station on their lines. (R. 81-86; 89;
205-206 ; 211-218; 239; Exs. 4; 21-24; 30-47; 49.)

The transfer charges of the Association vary
according to the commodity, ranging from 13 cents
per 100 pounds on low-grade commodities like coal
and iron ore to 5 cents per 100 pounds on commodi-
ties taking first-class rates. These charges are not
collected by the Association directly from the ship-
pers, but in all instances are paid to the Associa-
tion by the line-haul carriers. Their rates include
the transfer, and they pay the Association’s
charges out of those rates. The proceeding before
the Commission presented the question whether the
east-side lines or the west-side lines should pay and
bear the Association’s transfer charges on west-
bound through freight.

The complaint of the west-side lines alleged that
for many years the east-side lines had refused to
pay any part of these charges on through freight,
either eastbound or westbound; that they had com-
pelled the west-side lines to pay such charges on
all freight in both directions; that their action in
refusing to pay the charges on through traffic in
one direction (westbound) constituted a practice
which was unjust and unreasonable, unjustly dis-
criminatory, and unduly preferential and prejudi-
cial, in violation of sections 1, 2, and 3, respectively,
of the Interstate Commerce Act. The west-side

6

lines were willing to continue to pay the transfer
charges on eastbound traffie, and for that reason
they sought relief only im respect of westbound
_ traffie.

The complaint further alleged ‘‘ that under a
proper, just, reasonable, lawful, nonprejudicial and
nonpreferential practice, the point of interchange
as to all through westbound traffie should be on the
west side of the Mississippi river ’’ (R. 35-36) ; and
that the east-side lines had ‘‘failed, negleeted, and
refused * * * to provide reasonable facilities
for operating through routes and to make reason-
able rules and regulations with respect to the oper-
ation of through routes, all in violation of the duties
imposed upon them by the Interstate Commerce
Act ’’ (R. 36). Reparation was asked.

The Chicago, Burlington & Quiney Railroad
Company and the Wabash Railway Company each
has a line which enters East St. Louis from the east
and a line which enters St. Louis from the west.
Both were named as defendants and both filed eross-
complaints with respect to trans-Mississippi trafhe
moving over their lines west of the river and inter-
changed with each other or with any of the other
east-side lines through the St. Louis-East St. Louis
gateway, and, to the extent that they were cross-
complainants, sought whatever relief was aceorded
complainants.

St. Louis is one of the important gateways of
transportation between the east and the west and
southwest. The eastern and western carriers

>>

whose lines are joined by the Association maintain
through routes between points on their lines, and,
with other carriers with whom they in turn con-
nect, between practically all points in the United
States. A large part of the traffic over these
through routes via this gateway moves on joint
rates; where joint rates are not in effect the traffic
moves on combinations of separately established
rates, and, as a rule, the applicable combination is
the one made on St. Louis or East St. Louis. Sub-
ject to but few exceptions, the combination made
on St. Louis is the same as that made on East St.
Louis. This is due to the fact that both the east
side and the west side lines accord like rates to both
points. As an example, the rate of the east-side
lines on wrought pipe from Youngstown, Ohio, to
East St. Louis and to St. Louis is 21.6 cents and
the rate of the west-side lines from East St. Louis
and from St. Louis to Augusta, Kansas, is 33.5
eents. Therefore, whether the combination be
figured on St. Louis or on East St. Louis, the
through combination rate is the same, viz, 55.1
cents. (Ex. 73.)

In all such cases the east-side lines followed the
practice of applying the East St. Louis combination
and refusing to apply the St. Louis combination.
The purpose and effect of this practice was to com-
pel the west-side lines to pay the charge for trans-
ferring the traffic across the river. The application
of the East St. Louis combination put the west-side
line under the necessity of paying the transfer

90630—28——_2

charge out of its rate to or from East St. Louis.

Of course, if the St. Louis combination were ap-

plied, instead of the East St. Louis combination, the

necessity of paying the transfer charge would fall

upon the east-side lines. To prevent the application

of the St. Louis combination and to compel the ap-

plication of the East St. Louis combination, the

east-side lines carried a provision in their published

tariffs to the effect that where no joint rate was

provided and the combination was the same on 8t.

Louis as on East St. Louis, the through rate would

be made on the East St. Louis combination. (R.

261.) In this regard the Commission stated in its
report as follows:

‘‘On traffic in both directions, where the

combination is the same on St. Louis as on

Fast St. Louis, the east-side lines apply their

St. Louis-East St. Louis rates only to or from

East St. Louis, leaving it to the west-side

lines to protect the combination rates by ap-

plying the St. Louis-East St. Louis rates to

or from East St. Louis. This, of course, com-

pels the west-side lines to pay the cost of

the transfer, and leaves the full St. Lovis-

East St. Louis rates for the east-side lines.

The entire practice above outlined is in ae-

cordance with the tariffs of the east-side

lines, which contain a provision to the effeet

that where no joint rates are provided and

the combinations are the same on St. Louis

as on East St. Louis, through rates will be

made on the East St. Louis combinations.

This provision is intended to mean that the

9

east-side lines’ local rates to and from St.
Louis may not legally be used as proportional
or basing rates on traffic coming from or des-
tined to points beyond. It has no effect on
the amount of the through rates, nor does
it create joint rates, but it is a direction to
agents and accounting forces to use the east-
side lines’ factors in the combination rates
only to or from East St. Louis.’”’ (R. 19.)

The Commission found that for the future the
practice of the east-side lines in requiring the west-
side lines to bear the transfer charges on west-
bound freight traffic moving through St. Louis and
East St. Louis on combination rates which are the
same on St. Louis as on East St. Louis will be un-
just and unreasonable, and that the just and
reasonable practice with respect to such traffie will
be for the east-side lines to bear or absorb all such
transfer charges. In making this finding the
Commission said:

“As a rule, the carrier which performs
the inbound haul, the delivering carrier,
switches or trucks the freight to its connec-
tion, or pays the expense of that service if
performed by a third party. * * *
Among the few instances throughout the
country in which reciprocity does not pre-
vail is the situation here presented. * * *”’

‘*Defendants’ practice is contrary to the
generally accepted practice throughout the
country. The usual practice among rail car-
riers is to divide the switching expenses
when the services of an intermediate carrier

10

are utilized in effecting interchange, the
switching charge being absorbed by the car-
rier that delivers the traffic to its connection.
There is a generally recognized obligation on
part of all carriers on through traffic to
make delivery on the rails of their connec-
tions, either direct or by bearing the charges
of the intermediate-switching line, and this
is the general practice of railroads through-
out the country. We believe this to be a
just, fair, and reasonable practice for gen-
eral application, and one which should be
followed by the carriers serving the St.
Louis-East St. Louis district. We are not
unmindful of the fact that such a practice,
if applied at St. Louis and East St. Louis,
ean not bring about exact reciprocity be-
cause the volume of the through traffic is
considerably greater eastbound than west-
bound, but complainants are not asking for
exact reciprocity ; moreover, we believe that
adoption of this practice at interchange
points generally would distribute the costs
of interchange switching among the respec-
tive carriers as a whole in a fair and equita-
ble manner.”’

With respect to traffic moving on joint rates,

the Commission said:

**As to this traffic the carriers’ divisional
arrangements provide that the joint rates,
eastbound and westbound, shall break on
East St. Louis; that is, that certain propor-
tions shall accrue up to that point and cer-
tain proportions beyond. Generally speak-

-—

ing, the divisional arrangements make no
specific provision regarding the payment or
disposition of the transfer expense. How-
ever, as the joint rates break on East St.
Louis and as the transfer takes place west
of that point the east-side lines have always
left the transfer expense in connection with
both eastbound and westbound through traf-
fic moving on joint rates to be borne by the
west-side lines. Apparently, in only one in-
stance, affecting a relatively small volume of
traffic, do the divisional arrangements make
any specific provision respecting the trans-
fer. In this instance provision is made for
deducting, before prorating, an amount in
excess of the transfer expense and adding it
to the proportion accruing to the west-side
lines. The deduction, of course, has the ef-
fect of apportioning the expense between the
east-side and the west-side lines.’’

The Commission made no definite finding in re-
spect to westbound tr: ffic moving on joint rates.
It said:

‘“* * * we are not convinced that the
reception for a number of years by the west-
side lines of divisions of such joint rates in
which the transfer charge was included does
not constitute an acquiescence by the west-
side lines in such divisions which is tanta-

| mount to an agreement on their part to pay
| the transfer charge on such traffic. As to
traffic moving under joint rates, therefore,
we are not prepared at this time to make a
definite finding upon the issues and record

Vm

ll

12

before us. We commend to the interested
carriers, however, a careful study of the
divisions of joint rates on westbound traffic,
with a view to readjustment thereof if and
where necessary to conform to the just and
reasonable practice in respect of interchange
switching hereinabove approved for general
application. If this is not done within a
reasonable time complainants are at liberty
to again bring this matter to our attention.”
Accordingly, the Commission’s order has no ap-
plication whatever to the transfer charges on traffic
moving on joint rates. It is expressly confined to
the transfer charges on traffic moving on combina-
tion rates and then only when the St. Louis combina-
tion is the same as the East St. Louis combination.
The allegations of the complaint of unjust dis-
crimination and undue prejudice and preference
in violation of sections 2 and 3 of the Act were not
sustained; and the prayer for reparation was
denied.
The Evidence

In addition to the evidence supporting the above-
stated facts, the record contains much other im-
portant evidence, and in view of the appellants
contention that the evidence was insufficient, a fur-
ther statement of the facts established by the record
is here set out.

The stock of the Association is held in equal pro-
portions by 15 of the east-side and west-side car-

13

riers. (R. 76-77.) Five of the 15 are west-side car-
riers, the remaining 10 are east-side carriers. The
east-side carriers hold a majority of the shares. (R.
93.) Representatives of the east-side carriers have
always constituted a majority of the Board of Di-
rectors of the Association. (R. 93.) It was testi-
fied that through this domination and control of the
Association’s Board of Directors, the east-side lines
for many years have been able to force the west-
side lines to pay and bear the transfer charges on
through traffic in both directions. (R. 95.)

The Association is a common carrier, but may
not legally operate in all respects as a railroad
transportation company, having been perpetually
enjoined from operating otherwise than as a ter-
minal and interchange facility for railroads in
United States vy. St. Louis Terminal, 224 U. S.
383, and 236 U.S. 194. Exhibit No. 50 is a copy of
the final decree in that proceeding, filed March 2,
1914, as amended by the decree of January 29, 1917.

The charges for the transfer and other services
performed by the Association are fixed at a figure
which is sufficient only to pay its operating and
other expenses. No profit has ever been made out
of the operation of its properties and no dividend
has ever been declared on any of its outstanding
stock. The 15 railroads which constitute the As-
sociation are guarantors of the bonds and other
obligations of the Association and are its sponsors.
(Ex. 58.)

14

Exhibit No. 51 is a copy of the various agree-
ments between the Association and its proprietary
companies. The original agreement was made in
1889; it was amended Sept. 21, 1914, to conform to
the decree in United States v. St. Louis Terminal,
supra. The exhibit consists of 145 printed pages.
As found by the Commission these agreements con-
template that all carriers shall have equitable treat-
ment in the matter of service, rights, accommoda-
tions, benefits, burdens, charges, and expenses. This
exhibit was introduced by the west-side lines to show
that through their payment of the transfer charges
on nearly all traffic in both directions they are con-
tributing in major part to the Association’s ex-
penses and that, therefore, its expenses are not
equitably apportioned, although the contracts con-
template that they should be.

The east-side lines operate their passenger trains
in their entirety to and from the Union Station in
St. Louis, usually hauling them with their own
locomotives. (R. 200.)

Passenger, mail, and express traffic passing
through St. Louis is interchanged between the east-
side and west-side carriers at the Union Station in
St. Louis. (R. 202.)

The Chicago & Eastern Illinois (an east-side
line) interchanges its through traffic direct with the
Frisco and Missouri Pacific (west-side lines) at
23d St., St. Louis, handling its freight with its own
power over the tracks of the Association, using the

15

Merchants bridge, but the west-side lines pay and
pear the transfer expense just As though the service
had been performed by the Association. (R. 90,
197.)

A history of the efforts nade by the west-side
lines; beginning in 1905, to obtain relief from the
transfer expense on traffic in one direction is given
at R. 91-95, 237-238, and 343-344. Only part of
this need be referred to. In August, 1914, the west-
side lines attempted to change the practice by de-
tlining to pay the transfer expense on eastbound
traffic. The eastern lines refused to accept the
freight unless the transfer was paid by the west-
side lines. (R. 268-269.) As a result several hun-
dred cars were handled between the western and
eastern lines many times. Congestions followed;
the Terminal became blocked. (R.92:) At a meet-
ing of the Board of Directors of the Association
held at this time it was voted to refuse to handle
the traffic unless the western lines guaranteed the
transfer charge. (R. 92-93.) At that meeting the
eastern lines were in a majority. (R. 93.) Mean-
while, many complaints had been made to the Com-
thission by shippers because of delay to their freight,
and the Commission took the matter up informally
with the carriers. Thereupon, the western lines, in
order to prevent further hardships upon their pa-
trons, yielded and resumed their old practice of pay-
ing the transfer charge on eastbound as well as on
westbound traffic. (R. 343-344.) In August, 1920,

90630—28——_3

16

the west-side lines instituted the contempt proceed-
ings referred to in Terminal R. R. Asso. v. United
States, 266 U.S.17. This court there held that the
subject should be first submitted to the Commis-
sion and thereupon the west-side lines filed the
complaint which began the present proceedings.
(R. 94.)

There was much evidence to support the finding
of the Commission regarding the generally ac-
cepted practice of carriers throughout the country
of reciprocally assuming the expenses of inter-
change service. This evidence consisted of a com-
prehensive and detailed statement of the practice
prevailing at a great many points of interchange
in the United States where investigation has been
made, supplemented by the testimony of experi-
enced railway traffic and operating officials who
were familiar with the general practice. (R. 104
182 ; 207-211 ; 220-223 ; 224-234 ; 238-239 ; 362-363;
385-386. )

This testimony shows that the following practice
generally prevails:

Where two carriers connect directly, the line
carrying the freight to the point of interchange, i.
e., the delivering carrier, delivers the freight upon
the joint interchange tracks. (R. 104-105, 107.)

Where no direct physical connection exists and it
is necessary to use the services of an intermediate
switching line, the customary practice is for the de-
livering line to assume and bear the expense of
making delivery of its freight to the receiving line,

17
using the intermediate switching line in order to
effect that delivery. (R. 105-107.)
Witness James E. Hutchison, Vice President in

charge of operations of the St. Louis—San Francico
Railway, described the practice as follows:

‘‘* * * The principle has been uni-
versal that a railroad bringing traffic to a
terminal which is to be delivered to another
railroad, either for placement at industries
on that line of road or for movement out
over that line of railroad, stands the expense
incident to such delivery.

In many cases the railroads do not have
direct connection one with the other and an
intermediate line of some description is
used. In such cases it has been the practice
that the line that originates the business or
brings it into a terminal for delivery to an-
other line compensates the intermediate line
for any service it may render, either by the
use of its rails or switching service which it
may perform in effecting the delivery.’’
(R. 220.)

In some instances the receiving line, instead of
the delivering line, pays the expense of intermedi-
ate switching, ‘‘But in any event, the practice is
always reciprocal between the lines.”’ (R. 222.)

The Car Service Rules of the American Railway
Association, an association representing practically
all the railroads of the United States, recognize
that there is an obligation on the part of carriers to
make delivery of through traffic to the receiving

f

18

carrier in its yard and on its designated track for
receipt of the traffic, either by direct delivery with
the power of the delivering line or by using an
intermediate-switching line to act as its agent in
effecting delivery of the through shipment. (R.
224.) The obligation of the inbound carrier has
not been fulfilled when the shipment has reached
the end of its rails; there is a further obligation,
that of placing the shipment in the proper channel
for its continuous movement to fina] destination.
This can be done only by the delivery of the ship-
ment in the yard of the outbound carrier. Whether
this is accomplished direct by the use of the in-
bound carrier’s power, or through the agency of
an intermediate-switching line, or through a recip-
rocal arrangement between the carriers whereby
the receiving line performs for the delivering line
the service for which the delivering line is respon-
sible, the principle is the same. Rule 6 of the code
of Car Service Rules of the American Railway
Association reads in part:

‘* Cars shall be considered as having been
delivered to a connecting railroad when
placed upon the track agreed upon and
designated as the interchange track for such
deliveries, accompanied or preceded by
proper data for forwarding and to insure
delivery, and accepted by the car inspector
of the receiving road.’’ (R. 225.)

Further obligation of the delivering line is rec-
ognized in American Railway Association Car

-_

Servive Rule 14, which rule places upon delivering
line the responsibility for cost of transfer of ship-
ments delivered in cars which ean not be forwarded
by receiving line because of (a) defeetive equip-
ment; (b) improper loading or overloading; (e)
when delivering line does not desire its equipment
to go beyond junctions; (d) when ears ean not pass
approved clearances. Under these sections of rule
14 it is the recognized obligation of the delivering
earrier to not only make delivery in the yard of
the outbound carrier but to insure the through
and uninterrupted movement of the shipment by
the outbound earrier, or assume the costs of plac-
ing the shipment in condition for such forwarding
by the outbound line. (R. 225.)

Regarding traffie delivery at destination, there
is a recognized obligation on the part of the inbound
carriers to effect final delivery to consignee at billed
destination, either upon the rails of the inbound
carrier or upon the rails of a terminal switching
line within designated switching limits. The obli-
gation is further assumed when it is necessary to
effect delivery to a consignee on a terminal switeh-
ing line through an intermediate switching line.
(R. 226.)

In accepting a shipment at point of origin for
transportation to final destination there is no dif-
ference in principle between the obligation of the
carrier to make final delivery at destination and the
obligation to effect delivery to the outbound carrier
at the junction point where shipment leaves its line

19

20

in the through movement to destination. In the
first instance the inbound carrier assumes the ex-
pense of effecting actual delivery to consignee on
its own rails, on the rails of a terminal switching
line, or through an intermediate switching line and
a terminal switching line, and in addition recognizes
the terminal switching line and intermediate switch-
ing line as its agents. This is evidently the intent of
the American Railway Association Per Diem Rule
5 which reads in part:

*‘An amount for each car in switching
service may be reclaimed by each individual
switching road from the road for which the
service was performed. This amount shall
be based upon the average number of days,
not to exceed 5, for cars handled in terminal
switching service. * * *” (R. 227.)

(Italies ours.)

The Association makes a per diem reclaim as to
east and westbound through traffic moving across
the Mississippi river at St Louis and East St. Louis.
The reclaim made by the Association where west-
bound through traffic is involved is made upon the
delivering carrier, viz., the east-side line. Where
eastbound traffic is concerned the reclaim is like-
wise made against the delivering line which in this
instance is the west-side line. The practice of mak-
ing a per diem reclaim on the east-side lines as to
westbound traffic has been in effect at the St. Louis
terminal for 10 or 15 years. (R. 241-242.) This
evidence was adduced to show that, while the west-

21

side lines have paid the Association’s transfer
charge, nevertheless there was a recognition by the
east-side lines of the fact that the Association was
their agent in performing the transfer service in
that they honored the Association’s per diem
switching reclaims, under rule 5 of the Car Service
Rules of the American Railway Association, which
provides that such per diem shall be paid by the
line ‘‘for which the service was performed.”’ *

The situation at St. Louis as between the east-
side lines, on the one hand, and the west-side lines,
on the other hand, is entirely divorced from the gen-
eral practice, in that the west-side lines are required
to assume the intermediate switching expense on
through traffic in both directions. (R. 228.)

The practice between carriers in the method of
interchange—reciprocity in taking care of the
switching charges—is in effect at junctions where
the rates are on combinations of locals, as well as
where the rates are joint through rates. (R. 373;
375 ; 385-386. )

It was shown that the east-side carriers them-
selves follow the above practice generally when

*Compare Mo. Pac. R. R. Co. v. Reynolds-Davis Grocery
Co., 268 U.S. 366. In regard to per diem reclaims see /ndus-
trial Railways Case, 29 I. C. C. 212, 231; Birmingham So.
R. R. Co. y. Ala. Great So. R. R. Co., Director General,
Agent, 61 I. C. C. 551. Section 15 (8) of the Interstate Com-
merce Act, giving shippers the right to route traffic under
certain circumstances, recognizes that it is the duty of
each carrier in a through route to transport the property
over its own line “and deliver the same to a connecting line
eta * ° °°

interchanging traffic other than that passing be-
tween them and the west-side lines through East St.
Louis-St. Louis. For example, at Hast St. Louis
the east-side lines interchange traffic with each
other (traffic not crossing the river) through the
intermediary of the Association and the inter-
change expenses are borne reciprocally. (R. 137-
153.)

The evidence regarding the interchange practice
of carriers was practically undisputed; and only
two exceptions to the general practice were shown
(1) interchange at St. Louis between the Illinois
Traction System and the west-side lines, through
the intermediary of the Association, where the ex-
pense is borne by the Traction System on traffic in
both directions (R. 153-156), but this is no doubt
due to the fact that the service performed by the
Traction System in handling traffic over its bridge
into St. Louis is paid for by the west-side lines on
traffic in both directions (R. 90); (2) interchange
between certain carriers at Cincinnati, Ohio-Cov-
ington, Ky. There the expense of interchange be-
tween the Big 4 and the L. & N. is borne by the
L. & N. on traffic in both directions, but this is not
in fact an exception to the general rule because
the rails of the Big 4 do not extend to Covington.
(R. 199.)

Based on a test period of 28 months on west-
bound traffic, and of 17 months on eastbouna traf-
fic, the carload movement between the four west-
side lines and the east-side lines at St. Louis and

-_—

East St. Louis was divided, on the average per
month, 29 per cent westbound and 71 per cent east-
bound (R. 242-246 ; 247-248 ; 250-251; Exhibits 52,
53, 55, and 56.) On that basis the transfer charges
of the Association on this traffic during 12 months
embraced within both of those periods would have
divided $1,746,016.55 on eastbound traffic and
$713,161.69 on westbound traffic. These were the
aggregate transfer charges of the Association on
all traffic interchanged between the east- and west-
side lines, including traffic moving on joint rates
as well as on combination rates.

23

Evidence Regarding Rates

The evidence showed the various rate territories
between which joint rates are in force and those
between which the St. Louis-East St. Louis combi-
nations apply. (R. 279, 281, 283, 291, 292, 298,
329, 339, 342, 343.) In the opinion of one witness,
a traffic official, not over 15% of the traffic moves
on combination rates which are the same on St.
Louis as on East St. Louis. (R. 390.)

From all territory east of the Mississippi river,
except a zone within 100 miles east of East St.
Louis, the rates of the east-side lines are the same
to St. Louis as to East St. Louis. This has been
true since 1908. (R. 267.) From the 100-mile
zone mentioned, which includes a large bituminous
coal producing area, the rates are higher to St.
Louis than to East St. Louis. (R. 267.) Through
traffic from this zone to points west of St. Louis

90630—28——4

24

moves on joint rates and therefore the order in
question does not apply thereto. (R. 281, 283, 292,
298. )

On all traffic from the territory east of the Mis-
sissippi destined to St. Louis, and on all traffic
originating at St. Louis and destined to that ter-
ritory, the east-side lines pay and bear the transfer
charges of the Association. (R. 297.)

To territory within about 100 miles west of St.
Louis the rates of the west-side carriers from East
St. Louis are higher than from St. Louis, sometimes
to the extent of the Association’s transfer charge.
(R. 364.) No joint rates are in effect to this terri-
tory on traffic from points east of the Mississippi
(except from the 100-mile zone east of East St.
Louis) and this traffic moves on combination rates.
The St. Louis combination, and not the East St.
Louis combination, is applicable, because the St.
Louis combination is the lower, due to the fact that
the St. Louis-East St. Louis rates of the east-side
carriers are on a common level, while the rates of the
west-side lines from East St. Louis to this 100-mile
territory are higher than from St. Louis. With re-
spect to this traffic there is no question as to who
must bear the transfer expense, as it is included in
only one of the rate factors, i. e., the factor of the
east-side lines to St. Louis. On this traffic, there-
fore, the east-side lines have paid and borne the
transfer expense. (R. 99-102; 482; Ex. 7.)

To all territory west of the Mississippi (except
the 100-mile zone) the rates of the west-side lines

25

from East St. Louis are the same as from St. Louis.
(R. 364-365.)

On traffic from eastern points to western points
beyond the last-mentioned 100-mile zone, on which
the St. Louis and East St. Louis combinations are
equal, the east-side lines have refused to apply the
St. Louis combination, have forced the application
of the East St. Louis combination, and have thus
compelled the west-side lines to pay the transfer
expense out of their rate factor from East St. Louis.

As a result, the east-side lines receive a greater
net revenue on through traffic than they do on local
St. Louis traffic. As previously shown, St. Louis
is a station on the lines of the east-side carriers, and,
with the exception of the 100-mile zone east of
East St. Louis, their rates are the same to St. Louis
as to East St. Louis. Through the agency of the
Association their rails reach and serve industries
in St. Louis. The east-side lines absorb all switch-
ing and other charges necessary to effect such de-
liveries in St. Louis at the St. Louis rate. (R.
297.) Of course, on this traffic the east-side lines
pay the Association’s charge for transferring the
traffic across the river, but when the traffic is trans-
ported to a point on a west-side line beyond the
St. Louis switching district and beyond the 100-
mile zone, the east-side line refuses to pay the
transfer expense. Thus, on such through traffic the
east-side lines obtain a greater revenue (the full
St. Louis-East St. Louis rate, undiminished by ab-

26

sorption of transfer or switching expense) than it
would on the same traffic delivered locally in St.
Louis. (R. 345, 347.)

This is illustrated by Exhibit No. 73, a statement
of shipments from eastern points to Kansas, on
which the St. Louis-East St. Louis combinations
were equal. On each shipment the East St. Louis
combination was applied, consequently the east-side
line received and retained its full St. Louis-Kast
St. Louis rate ; and the west-side line was compelled
to pay the transfer charge out of its factor. The
testimony shows that on these shipments the east-
side lines received $3,471.64; that the transfer
charges (paid by the west-side lines) were $260.02,
whereas had the same shipments been billed and
delivered locally at St. Louis the transfer charges
would have been paid by the east-side lines and
therefore the net revenue would have been $3,-
211.62, or about 7.4 per cent less than they actually
received. (R. 345-347.)

There was much other evidence regarding the
rates of both the east-side and west-side carriers
directed to the opposing contentions that each
group of carriers had adjusted their St. Louis-East
St. Louis rates so as to compensate for the transfer
expense. This evidence shows, in general, that, due
principally to competitive conditions, the west-side
lines extended their St. Louis rates to East St.
Louis in the first instance without any increase to
compensate them for the transfer expense which

27

they were thereby obliged to assume, and that the
force of these competitive conditions have com-
pelled a continuance of that original adjustment,
while the east-side lines have been able to effect sev-
eral increases in revenue to offset the transfer ex-
pense which they necessarily assumed when they
equalized their St. Louis-East St. Louis rates.
This evidence is here summarized.

Due to the competition of the Alton, the west-
side lines extended their St. Louis rates to East
St. Louis in the first instance without any increase.
(R. 87-88 ; 254-257 ; 324.) Competition of the Cot-
ton Belt, the Illinois Central, the Missouri Pacific,
and the Burlington, as well as the Alton, each of
which has a line which reaches East St. Louis from
the east side, and which name the same rates from
East St. Louis as from St. Louis, yia other cross-
ings, has compelled a continuance of the original
adjustment, and has prevented the west-side lines
from increasing their St. Louis-East St. Louis rates
to an extent sufficient to cover the Association’s
transfer charges. (R. 354-358.) Action by State
commissions and the Interstate Commerce Commis-
sion in rate cases has also exerted an influence upon
the matter. (R. 235; 354-356.)

On the other hand, the evidence shows that when
the east-side lines equalized their St. Louis-East
St. Louis rates in 1908 they first increased their
East St. Louis rates and then extended the in-
creased rates to St. Louis. At the same time, sim-

28

ilar increases were made in their proportional
rates to upper Mississippi River crossings, and
these rates applied on traffic from all eastern points
to the western territory, except on transcontinental
traffic, a tremendous volume of through traffic,
vastly larger than the St. Louis traffic. (R. 265-
266; 342-343.) Further, in revising their rates
under the authority of the Commission’s order in
C.F. A. Class Scale Case, 45 I. C. C. 254, the east-
side lines added three miles to the actual East St.
Louis mileage in computing their rates to St. Louis,
this, of course, for the purpose of covering the ex-
pense of the river transfer. (R. 267, 273, 280.)
The scale of distance rates there prescribed re-
sulted in material increases. Before the revised
rates were made effective they were further in-
creased 15%, under the authority of The Fifteen
Per Cent Case, 45 I. C. C. 308. (R. 342-348.)

It is evident that whenever the local rates of the
east-side lines to St. Louis, thus increased to offset
the transfer expense, were applied to through traf-
fic, those lines received revenue for a service which
they did not perform and for which they did not
pay, but which was borne by the west-side lines.

The above is far from a complete statement of the
evidence submitted to the Commission. It is, how-
ever, illustrative of the general character of the evi-
dence and appears to be sufficient to indicate there
was substantial evidence to support the Commis-
sion’s order.

29

Proceedings in Court Below

On November 12, 1926, the 13 railroads, appel-
lants herein, filed their bill in the United States
District Court for the Northern District of Illinois,
Eastern Division, seeking to enjoin and set aside
the Commission’s order. (R. 1.) The United
States was named as defendant. The Commission
and the four west-side lines intervened as defend-
ants. All defendants filed answers. (R. 59, 62, 65.)
Final hearing was held before the three-judge court
November 29, 1926. (R. 74.) December 8, 1926,
the court entered its order dismissing the bill for
want of equity. (R. 68.)

Appellants’ Contentions

The various contentions of the appellants are
reducible to two propositions, viz.,
I. That the Commission had no power to make
the order.
II. That the order is not supported by substan-
tial evidence.
ARGUMENT

SUMMARY

I. The order is within the power conferred upon
the Commission. This court so held in Terminal
Railroad Asso. vy. United States, 266 U.S. 17.

II. The order is supported by substantial evi-
dence. Evidence required by section 15 (6) of
the Act in cases relating to divisions of joint rates
was not necessary in this case, because the order

does not prescribe divisions of joint rates. The
ania

30

reasonableness of the level of the rates was not in
issue and absence of evidence relating thereto does
not affect the validity of the order.

I

The Order Is Within the Power Conferred Upon the
Commission

The question whether the Commission has the
power to make an order fixing liability for the
transfer charges here under consideration is no
longer open to debate, because that particular ques-
tion was decided in the affirmative by this court in
Terminal R. R. Asso. v. United States, 266 U. S. 17.

In August, 1920, the four west-side lines who
were complainants before the Commission in the
ease at bar filed a petition and motion in the Dis-
trict Court of the United States for the Eastern
District of Missouri to have the east-side lines and
the Association adjudged guilty of contempt of
court for violating the decree entered in pursuance
of the mandate of this court in United States v.
St. Louis Terminal, 224 U. S. 383 and 236 U. S.
194, a proceeding brought by the United States
against the Association, the east- and west-side
lines, which owned its capital stock, and certain
others, alleging a combination in violation of the
Sherman Anti-Trust Act.

The substance of the decree referred to is stated
in the opinion of this court, 266 U. S. at pp. 23-25,
as follows:

31

*€1, The Terminal Railroad Association of
St. Louis is an unlawful combination con-
trary to the Anti-Trust Act of July 2, 1890
(26 Stat. 209), when it and the various bridge
and terminal companies composing it are op-
erated as railroad transportation companies.
The combination may, however, exist and
continue as a lawful unification of terminal
facilities upon abandoning all operating
methods and eharges as and for railroad
transportation and confining itself to the
transaction of a terminal business such as
supplying and operating facilities for the
interchange of traffic between railroads and
to assist in the collecting and distributing
of traffic for the carrier companies, switch-
ing, storing, and the like, and modifying its
contracts as herein specified. An election
having been made to continue the combina-
tion for terminal purposes, the defendants
are therefore perpetually enjoined from in
anywise managing or conducting the said
Terminal Railroad Association or any of its
constituent companies and from operating
any of the properties belonging to it or its
constituents otherwise than as terminal facil-
ities for the railroad companies using the
same, and from making charges otherwise
than for and according to the nature of the
services so lawfully authorized to be ren-
dered. Provided, however, that the right of
said Terminal Railroad Association as an
accessory to its strictly terminal business to
carry on transportation as to business exclu-

32

sively originating on its lines, exclusively
moving thereon, and exclusively intended for
delivery on the same is hereby recognized,
and nothing in this decree shall be construed
to deny such rights.”’

‘*‘ Paragraph 2 of the decree directs a re-
organization of the contracts between the de-
fendant railroad companies and the Terminal
Association by providing for the admission
of any railroad to joint ownership and con-
trol of the combined terminal properties on
terms of equality with the then proprietary
companies, and for the use of the terminal
facilities by any railroad not a joint owner
upon such terms as will, in respect of use,
character, and cost of service, place every
such railroad upon as nearly an equal plane
as may be, with respect to expenses and
charges, as that occupied by proprietary com-
panies, and by eliminating from the existing
agreement any provision which restricts any
proprietary company to the use of the facili-
ties of the Terminal Association.

‘¢ Paragraph 3 abolishes the practice of
billing to East St. Louis or other junction
points and then rebilling traffic destined to
St. Louis or points beyond.

‘‘Paragraph 4 abolishes any special or so-
called arbitrary charge for the use of the
terminal facilities in respect of traffic origi-
nating within the so-called 100-mile area that
is not equally applied in respect of traffic
originating outside of that area.

‘‘Paragraph 5 extends the effect of the
decree to all railroad companies thereafter

33

admitted to ownership or use of the terminal
facilities.

‘*Paragraph 6 is as follows: ‘Nothing in
this decree shall be taken to affect in any
wise or at any time the power of the Inter-
state Commerce Commission over the rates
to be charged by the Terminal Railroad As-
sociation, or the mode of billing traffic pass-
ing over its lines, or the establishing of joint
through rates or routes over its lines, or any
other power conferred by law upon such
commission.’ ”’

The proceedings in the District Court in the
contempt suit and the decree entered therein are
stated at pp. 26-27 of the opinion of this court, as
follows:

‘*. . . The parties so complained of (ap-

pellants here) appeared and moved to dis-
miss the petition and also filed answer. An
examiner was appointed, and, after the tak-
ing of evidence and a hearing, the court de-
nied the motion to dismiss and entered its
decree that the appellants ‘have continuously
since the entry of said final order and de-
cree, in contempt of this court, violated the
terms thereof and are still violating its said
terms—

***(a) In that defendants, the Terminal
Railroad Association of St. Louis and its
subsidiary companies are not acting in good
faith as the impartial agents of the various
proprietary lines.

‘**(b) In that the proprietary lines other
than the petitioners, through the domination

34

and control of the Board of Directors of de-
fendant, the Terminal Railroad Association
of St. Louis and its subsidiaries, compelled
the petitioners to pay the Terminal Rail-
road Association its transfer charges for
supplying and operating facilities for the
interchange of both through east bound and
through west bound freight traffie between
the east-side lines and the west-side lines.

** *(¢) In that the defendants [the east side
lines above named] . . . have not paid and
are not now paying the reasonable trans-
fer charges of defendant, the Terminal Rail-
road Association of St. Louis and its sub-
sidiary companies on west bound through
freight to the rails’ of the petitioners and
other defendants whose lines enter St. Louis
from the West. ...

‘* And the decree commands that within
60 days the appellant companies cease vio-
lating the final decree in the respects above
set forth, and that the east side lines ‘ be and
they are hereby required to pay within 60
days after the amount of same shall have
been ascertained and determined for the use
and benefit of said west side lines . . . the
total amount of the transfer charges of de-
fendant Terminal Railroad Assoeiation of
St. Louis and its subsidiary companies paid
by said west side lines on west bound through
freight of said east side lines to the rails of
said west side lines at St. Louis, Missouri;
from the date of the entry of said final de-
cree, to wit; March 2, 1914, to the date of

—

this order .. .’ And the decree prescribed
and directed how such total amount should

be determined. ”’ ‘
It is obvious from the above quotations that the
transfer charges referred to in the contempt pro-
_ ceedings were the same as those under considera-
| tion in the ease at bar. That the controversy there
was the same as here is shown by the following

quotation from page 27 of this court’s opinion:

“The proceedings were instituted by the
west side lines, not to vindicate the author-
ity of the court, but to enforce rights _
', claimed by them under the original decree. | |
| | The controversy is between them and the | |
east-side lines as to whether the former or

the later shall bear transfer charges on west-
bound through freight.”

This court reversed the decree of the lower court,
holding that the refusal of the east-side lines to
pay the transfer charges was not a violation of the
decree in the Anti-Trust suit.

This court further held that the subject matter
of the suit, which obviously was the same as in the
ease at bar, was one within the jurisdiction of the
Interstate Commerce Commission. In so holding
this court said:

‘‘ The making of rates is a legislative and
not a judicial function. Keller v. Potomac
Electric Co., 261 U. 8. 428, 440; Ohio Valley
Co. v. Ben Avon Borough, 253 U. 8S. 287, 289;
Louisville d& Nashville R. R. Co. v. Garrett,

rf

231 U. 8. 298, 305; Interstate Commerce
Commission v. Humboldt S. S. Co., 224 U. 8.
474, 483; Prentis v. Atlantic Coast Line Co.,
211 U. S. 210, 226. The division of joint
rates is also legislative in character. The
Interstate Commerce Commission is author-
ized to establish through routes and joint
rates and to prescribe conditions upon which
such routes shall be operated and to fix divi-
sions of such rates among carriers. Section
15(1), (3), (6), Interstate Commerce Act,
Section 418, c. 91, 41 Stat. 485, 486. It is well
settled as a general rule that the question of
the reasonableness of rates or of divisions of
joint rates will not be considered by the
courts before application has been made to
the Commission. Texas & Pacific Ry. v.
Abilene Cotton Oil Co., 204 U. S. 426, 440;
Robinson v. Baltimore & Ohio R. R., 222
U.S. 506; Mitchell Coal Co. v. Pennsylvania
R. R. Co., 230 U.S. 247, 254-261; Skinner &
Eddy Corporation v. United States, 249 U.
S. 557, 562; United States v. Abilene d:

Southern Ry. Co., 265 U. 8. 274.. The Termi-

nal Association and its subsidiaries are com-
mon carriers by railroad and, like the pro-
prietary companies, are subject to regula-
tion by the Commission. The origina

“cree doés not purport to regulate rates or

prescribe divisions of joint rates, or fix lia
bility for such transfer charges. “On the
other hand, it expressly provides that it
shall not affect in any wise or at any time
the power of the Commission over charges to
be made by the Terminal Association or its

37

subsidiaries, or any power conferred by law
upon the Commission. In the exercise of its
powers under existing law, the Commission
is untrammeled by the decree and may make
and regulate rates on through freight and

the divisions thereof.’’ (Ibid. 30-31.)
Examination of the transcript of record in that
ease shows that the evidence therein was largely
the same as that adduced before the Commission in
the case at bar. As here, there was a full explana-
tion of the basis of making and applying rates
through the St. Louis-East St. Louis gateway, and
it was fully explained what traffic moved through
that gateway on joint rates and what moved on the
St. Louis-East St. Louis combinations. At pp.
440-441 of the record in that case (No. 425, October
Term, 1923) is a comprehensive statement of the
traffic which moved through that gateway on joint

rates, followed by a statement which reads:

WAN of the foregoing traffic is covered by
joint through rates.) On all other traffic than
that above described, the rates are made on
combination of rates published separately to
and from the Mississippi River. Such other
traffic embracing that moving between points
east of the Indiana-Illinois State Line, and
Lake Michigan, upon the one hand, and all
territory west of the Mississippi River, and
on, and north of the Arkansas, Missouri, and
Oklahoma-Kansas State Lines, including
New Mexico and Arizona, but exclusive of
Trans-Continental traffic, upon the other
hand. As to this traffic where the rates make

upon the Mississippi River combinations,
the current custom, and that heretofore fol-
lowed has been to allow the lines east of
Kast St. Louis their local rate. To the state-
ment made in this paragraph, the following
exception exists:

‘‘A—The Burlington interchanges eastern
traffic with western roads at St. Louis.

‘*B—In a comparatively few instances, the
lowest combination of locals make on 8t.
Lowtis, and not on East St. Louis; in such
instances the eastern lines absorb the bridge
tolls.

‘“‘C—On traffic moving between Llinois
and Missouri points within a short radius
east and west of St. Louis and East St. Louis,
the rates make on the Mississippi River
combination, with bridge tolls added.’’

See also pp. 265, 269, and 430 of that record.

In view of the facts in the case, it is evident that
the holding of the court that the subject matter of
the suit was within the jurisdiction of the Commis-
sion applies with equal force to instances in which
the traffic moves on combination rates as as to in-
stahees in which it moves ves on joint rates, 3, No dis-
tinction was made in the opinion as between the
two traffics. It follows, therefore, that the holding
of this court was that the entire subject matter is
within the jurisdiction of the Commission. After
the decision of this court therein—rendered Octo-
ber 14, 1924—the west-side lines filed their com-
plaint with the Commission.

POLAR LTC IP SLT PL PRI B PORES OLE AO ETN -

39

Appellants concede that the Commission has jur-
isdiction under section 15(6) but contend that the
order can not be sustained under that provision
because of lack of evidence. This contention will
be discussed under section II hereof. Appellants
also contend that the subject matter of this suit
“is not a ‘practice’ within the meaning of that word
as used in the Interstate Commerce Act, but if it
were a ‘practice,’ would be a practice not of the
plaintiffs but of the West Side Lines * * *”
We think it is clear that the practice was one within
the contemplation of the Act and that the evidence
shows it was a practice of the east-side lines.
Various provisions of the Act vest the Commis-
sion with jurisdiction over practices of carriers,
viz., Section 1, par. (6), read in connection with
par. (3), and Section 15, pars. (1) and (3), per-
tinent provisions of which read as follows:
‘*Section 1 (6) : It is hereby made the duty
of all common carriers subject to the pro-
visions of this Act to establish, observe, and
enforce ... just and reasonable regu-
lations and practices affecting all...
matters relating to or connected with the re-
ceiving, handling, transporting, storing, and
delivery of property subject to the pro-
visions of this Act which may be necessary
or proper to secure the safe and prompt
receipt, handling, transportation, and de-
livery of property subject to the provisions
of this Act upon just and reasonable terms,
and every unjust and unreasonable classifi-

ETE RE TT NE NE aS

40

cation, regulation, and practice is prohibited
and declared to be unlawful.’’

**(3) The term ‘transportation’ as used
in this Act shall include. , . all services
in connection with the receipt, delivery,

. . and transfer in transit . . . and han-
dling of property transported.”’

** Section 15(1): That whenever, after
full hearing, upon a complaint made as pro-
vided in section 13 of this Act, .. . the
Commission shall be of opinion .. . that
any individual or joint classification, regula-
tion or practice whatsoever of such carrier
or carriers subject to the provisions of this
Act, is or will be unjust or unreasonable

. or otherwise in violation of any of the
provisions of this Act, the Commission is
hereby authorized and empowered to deter-
mine and prescribe . . . what individual or
joint classification, regulation, or practice is
or will be just, fair, and reasonable, to be
thereafter followed, and to make an order
that the carrier or carriers shall cease and
desist from such violation to the extent to
which the Commission finds that the same
does or will exist, . . . and shall adopt the
classification and shall conform to and ob-
serve the regulation or practice so pre-
seribed.’’

**(3) The Commission may, and it shall
whenever deemed by it to be necessary or
desirable in the public interest, after full
hearing upon complaint . . . establish
through routes, joint classifications, and
joint rates, fares, or charges, applicable to

41

the transportation of... property,...

and the divisions of such rates, fares, or

charges as hereinafter provided, and the

terms and conditions under which such

through routes shall be operated; ... The

Commission shall not, however, establish any

through route, classification, or practice, or

ary rate, fare, or charge, between street elec-

tric passenger railways not connected in the

general business of transporting freight in

addition to their passenger and express busi-

ness, and railroads of a different character ;

nor shall the Commission have the right to

establish any route, classification, or practice,

or any rate, fare, or charge when the trans-

portation is wholly by water. . . .’’ (Italies
ours. )*

In the case at bar the east-side lines have followed

a very definite practice for many years respecting

all shipments interchanged by them with the west-

side lines and passing through St. Louis and East

St. Louis at combination rates made the same on

both points, and that is, in each instance they have

applied the East St. Louis combination and have

refused to apply the St. Louis combination, to the

The last sentence of this paragraph, prohibiting the Com-
mission from establishing any practice as between certain
types of carriers, is persuasive that in the absence of such a
provision the Commission would have such power and infers
that the Commission may establish practices as between other
carriers not within the prohibition, an inference which is
strengthened by the fact that this sentence was amended by
Transportation Act, 1920, by the insertion of the word

“ practice.”

42

end that the transfer charge would not be included
in the rate factor accruing to them and would be
included in the west-side lines’ factor. This prac-
tice was published by the east-side lines in the form
of a provision in their tariffs which were posted and
filed with the Commission. It was published in
the tariffs of all the east-side carriers applying to
and from St. Louis and East St. Louis. (R. 261.)
In the language of Witness Sudborough, General
Traffic Manager of the Pennsylvania System,

**To make the point clear, the provision
that I have read has the effect of preventing
the use of the St. Louis combination in mak-
ing rates where the East St. Louis combina-
tion is the same, that is, produces the same
through rate that would be produced by the
use of the St. Louis combination.’’ (R. 262.)

This tariff provision was published in 1914 after

the west-side lines had declined to pay the transfer

| eharges on eastbound traffic, and its intended effect

was to control the application of the rates so as to

cast the burden of the transfer charges upon the

west-side lines. (R. 343-344.)

Thus, the practice is one directly concerned with

the application of rates. The Commission’s order

/) regulates the > application of the existing rates; its

effect is to require the application of the St. Louis

combination on westbound through traffic, instead
of the East St. Louis combination, to the end that_
ansfer_ charge will have tobe paid by the—
east-side lines out of their rate factor to St. Lous.

i eel oe eo” “

Y
S
\ }
S
\)
\
\
YX
\
\
\

— :

Its further effect is to require the cancellation of
the above-mentioned tariff provision of the east-
side lines. The order does not change the present
practice in respect of eastbound traffic, but on that
traffic leaves the East St. Louis combination appli-
cable; nor does it change the practice where the
St. Louis combination is the lower, as in the case of
traffic from eastern points to the 100-mile zone
west of St. Louis.

As a result of this practice the west-side car-
riers were damaged, and they had the right to com-
plain under section 13 (1) of the Act, which pro-
vides that any common carrier may complain to the
Commission of anything done or omitted to be done
by any common carrier in contravention of the pro-
visions of the Act. Penna. Co. v. United States,
236 U. 8S. 351; Chgo., Indpls. & Louisv. Ry. Co. v.
United States, 270 U.S. 287; United States v. N.Y.
Cent. R. R., 272 U. 8. 457, 462.

We think that this practice, closely related as it
is to the application of interstate rates of carriers
subject to the provisions of the Act, is one within
the contemplation of the provisions of the Act
quoted above and within the jurisdiction of the
Commission.

But the question of importance is not whether
the subject matter is a ‘‘practice’’ but whether
it is one within the power of the Commission under
any provision of the Act. Sou. Pac. Co. v. Inter-
state Commerce Com’n, 200 U. 8S. 536, 556-557.

44

We think that the matter is within the control of
the Commission under the comprehensive powers
conferred upon it (1) to require extensions of lines,
section 1 (21), Railroad Commission of California
v. Sou. Pac. Co., 264 U. 8. 331, Ala. & Vicksb. Ry.
Co. v. Jackson & Eastern Ry. Co., 271 U. 8. 244;
United States v. P. R. R. Co., 266 U. S. 191; (2)
to control the matter of physical connections be-
tween main lines of railroads, section 1 (18) to (21),
section 1 (4) and section 15 (3), Ala. & Vicks. Ry.
Co. v. Jack. & East. Ry. Co., supra; (3) to establish
through routes, section 15 (3), United States v.
Amer. Ry. Exp. Co., 265 U. 8. 425, St, Louis S. W.
Ry. Co. v. United States, 245 U. S. 136; (4) to
require carriers to make reasonable rules and regu-
lations with respect to the operation of through
routes, section 1 (4), Cent. R. R. Co. v. United States,
257 U. S. 247, 257; (5) to fix the terms and condi-
tions under which through routes shall be operated,
section 6 (13) and section 15 (3), United States v.
Amer. Ry. Exp. Co., supra, United States v. N.Y.
Cent. R. R. Co., 272 U. 8. 457, and, incidentally to
fix the point of interchange of traffic as between car-
riers forming the through route, Routing on Coal
from Western Maryland Railway Mines, 66 I. C. C.
103 and 74 I. C, C. 127, Chgo. Mil. & St. P. Ry. Co.
v. Un. Pac. R. R. Co., 88 I. C. C. 312; (6) to control
the movement, exchange and interchange of cars
used in the transportation of property and to en-
force just and reasonable rules, regulations, and

45

practices with respect to car service, section 1 (10)
to (17), Peoria & Pekin Union Ry. Co. v. United
States, 263 U. S. 528, United States v. Mich. Port.
Cement Co., 270 U. 8. 521, Ala. & Vick. v. J. & E.,
supra; (7) to require carriers to afford reasonable,
proper, and equal facilities for the interchange of
traffic, section 3 (3), Chgo. Indpls. & Louisv. Ry. Co.
vy. United States, 270 U. 8. 287, Penna. Co. v. United
States, 236 U. S. 351, Louisv. d& Nash. R. R. v.
United States, 238 U.S. 1, United States v. P. R. R.
Co., 266 U. 8. 191.

Of special relevancy is the power to require car-
riers to make reasonable rules and regulations with
respect to the operation of through routes, to fix the
terms under which through routes shalk be op-
erated, and to fix the point of interchange of traf-
fie as between carriers forming the through route.
As previously stated, the east- and west-side lines
maintain and operate through routes via the St.
Louis gateway. By virtue of their joint owner-
ship of the Association and their trackage rights
over its rails, the routes of the east-side lines ex-
tend to St. Louis and those of the west-side lines to
East St. Louis and consequently there is an over-
lapping of their routes between St. Louis and East
St. Louis. In a real sense the question presented
to the Commission was, In the operation of such
an overlapping through route, what should be the
point of interchange of the traffic, St. Louis or East

46

St. Louis? Would a reasonable rule or regulation
with respect to the operation of such a through
route require the east-side line to carry its traffic
to the point of interchange with the west-side line
in St. Louis, and, conversely, require the west-side
line to carry its traffic to the point of interchange
with the east-side line in East St. Louis?

As a matter of physical handling there have
been two points of interchange, one in East St.
Louis between the east-side line and the Associa-
tior, the other in St. Louis between the Association
and the west-side line, but East St. Louis has been
considered the point of interchange as between the
east- and west-side lines on through traffic in both
directions because the west-side lines have borne
the transfer charge on all such traffic. The west-
side lines urged that under a reasonable rule or reg-
ulation with respect to the operation of the through
routes the point of interchange of westbound traf-
fic should be at St. Louis.

Under its power to fix the terms and conditions
under which such a through route should be oper-
ated, the Commission would have authority to re-
quire that on westbound traffic the east-side line
should take the traffic to the point of interchange
with the west-side line in St. Louis. In effect, the
order of the Commission requires this to be done; it
requires that on westbound traffic the east-side car-
rier shall transport the traffic to the end of its line,
St. Louis, and there interchange it with the west-

-_

side line, or, what is equivalent, pay the transfer
charge of the Association.’

The duty on the part of a common carrier, when
it had received goods for transportation beyond the
terminus of its line, to make delivery to the next
succeeding carrier in the route, was recognized by
the common law. Myrick v. Michigan Central R. R.
Co., 107 U. S. 102. The duty is now imposed by
the Interstate Commerce Act. Under the decree in
United States v. St. Louis Terminal, supra, the As-
sociation is enjoined from operating its properties
otherwise than as terminal facilities for the rail-
roads using the same—as their agent in performing
the intermediate switching service in the terminal.
When the east-side line delivers westbound traffic to
the Association for transfer across the river,
whether for delivery to a consignee in St. Louis or
to a west-side earrier for further transportation,
it engages the Association as its agent. Missouri
Pae. v. Reynolds-Davis, 268 U.8., supra. In such
case the only connection between the east-side line
and the west-side line is in St. Louis. Therefore,
it is the duty of the east-side line to make delivery
to the west-side line in St. Louis, and it is its duty

The fact that the through routes were already in existence
by the voluntary act of the carriers, and that they were not
established by the Commission, does not affect the power of
the Commission to require reasonable rules and regulations
with respect to the operation of them. Central R. R. Co. v.
United States, 257 U. S. 247, 257-258; cf. United States v.
N.Y. Central R. R., 272 U.S. 457.

48

to pay its agent for the transfer service which it
performs for it.

Of course, under section 15 (6) the Commission
has power to fix the divisions of joint rates. There-
fore, in respect of traffic moving on joint rates, it
could, upon proper evidence, have fixed liability for
the transfer charges by adjusting the divisions as
between the east- and west-side lines. This it did
not do, but confined its order to traffic moving on
the Mississippi River combination. It would not
seem to be a reasonable or logical construction of
the Interstate Commerce Act that the Commission
would have power to decide which of the two groups
of carriers should bear the transfer expense in
instances where the traffic moves on joint rates and
would lack that power in instances where the traffic
moves on combination rates. This court said
plainly in Terminal R. R. Assn. v. Umted States,
supra, that the Commission has power over the sub-
ject matter of the transfer charges under pars. (1),
(3), and (6) of section 15. The Commission’s
power over divisions of joint rates, including the
power to make an order, is complete under par. (6)
of section 15. If the court had been referring only
to divisions of joint rates, reference to pars. (1)
and (3) of section 15 would have been surplusage.
The language of the court is:

‘The Interstate Commerce Commission

is authorized to establish through routes
and joint rates and to prescribe the terms

49

and conditions upon which such routes shall
be operated and to fix divisions of such rates
among carriers. Section 15 (1), (3), (6),
Interstate Commerce Act.” (Ibid. 31.)

On the same page, the court pointed out that the
original decree did not purport to (1), regulate
rates or (2) prescribe divisions of joint rates, or
(3) fix liability for such transfer charges. ‘On
the other hand,’’ the opinion continues, ‘‘it ex-
pressly provides that it shall not affect in any wise
or at any time the power of the Commission over
charges to be made by the Terminal Association or
its subsidiaries, or any power conferred by law
upon the Commission.”’

It seems that the language above quoted must be
construed as saying that where joint rates are in
effect the Commission can control the question as
to what group of carriers shall bear the transfer ex-
pense by fixing the divisions of the joint rates under
section 15 (6); and where combination rates are
applicable, the Commission can control that ques-
tion under section 15 (1) or (3) or (1) and (3).

II
The Order Is Supported By Substantial Evidence

We have hereinbefore referred to some of the
important evidence adduced before the Commis-
sion. The evidence fully supports all the facts

found by the Commission; and this is not denied.
The evidence was ample to support the order.

50

Evidence required by section 15 (6) of the act in cases relating to
divisions of joint rates was not necessary in this case because the
order does not prescribe divisions of joint rates

Section 15(6) requires that in ‘“‘preseribing and
determining the divisions of joint rates,’’ the Com-
mission shall give due consideration to certain speci-
fied matters, such as the efficiency with which the
carriers concerned are operated, the amount of rey-
enue required to pay their respective operating ex-
penses, taxes, ete., ‘‘ and any other fact or circum
stance which would ordinarily, without regard to
the mileage haul, entitle one carrier to a greater or
_less proportion than another carrier of the joint
rate, fare, or charge.”’

Appellants assert there was no evidence upon
these matters and therefore the order is void. But
this provision has no application to the case at bar,
because the order does not preseribe divisions of
joint rates. The order has no reference to joint
rates and no application whatever to traffie moving
on joint rates. On the contrary, it unmistakably
applies only to traffic moving on combination rates.
These combination rates are through rates—that is,
they are combinations of separately established rates
applied to through transportation—but they are not
joint rates. The distinction between joint rates, on
the one hand, and through rates made by combining
separately established rates, on the other hand, is
clear, and has often been noted by this court. (St
Louis S. W. Ry. Co. v. United States, 245 U. S.
136, 139, note 2; Central R. R. Co. v. United States,

51

257 U. S. 247, 258; Virginian Ry. v. United States,
272 U.S. 658, 666.) If there were any doubt as to the
meaning of the term ‘‘joint rates’’ as used in sec-
tion 15(6), it could easily be resolved by reference
to other provisions of the Act, especially section
6(1) which reads in part as follows:

“That every common carrier subject to the
provisions of this Act shall file with the Com-
mission created by this Act and print and
keep open to public inspection schedules
showing all the rates, fares, and charges for
transportation between different points on
its own route and between points on its own
route and points on the route of any other
carrier by railroad, by pipe line, or by water
when a through route and joint rate have
been established. If no joint rate over the
through route has been established, the sev-
eral carriers in such through route shall file,
print and keep open to public inspection as
aforesaid, the separately established rates,
fares, and charges applied to the through
transportation.”’

It follows indubitably that section 15 (6) has
reference only to joint rates and not to separately
established rates applied to through transportation.
The through rates in question being made on the
Mississippi River combination, there is, of course,
no occasion for and no possibility of the Commis-
sion fixing ‘‘divisions’? of them as between the
east-side and west-side carriers, for each neces-

sarily receives its separately established rate to or

from the river. For these reasons, the absence of
evidence upon the matters refered to in section
15 (6) would have no effect upon the validity of this
order. Compare New England Divisions Case, 261
U. 8. 184; United States v. Abilene & So. Ry. Co.,
265 U. 8. 274; Brimstone R. R. & Canal Co. vy.
United States, — U. 8. —, decided Feb. 20, 1928.

The reasonableness of the level of the rates was not in issue and
absence of evidence relating thereto does not affect the validity
of the order

It is further contended that there should have
been a showing of the services performed by the
east-side carriers as compared with those per-
formed by the west-side carriers under their re-
spective rates, including evidence of distances and
the like. But such evidence would not have con-
tributed to a decision of the issue presented, and
was unnecessary as a matter of law, in view of the
showing that the rates of both groups of carriers
applied to both St. Louis and East St. Louis, and
that, therefore, the rates of both groups of car-
riers included the transfer services. Stated differ-
ently, the rates of the east-side lines to St. Louis
included the transportation service to St. Louis and
delivery in St. Louis, and under those rates, when
applied to joral St. Louis traffic, the east-aide lines
paid and bore the transfer expense, that expense
being included in their rates. Likewise, the rate
of the weet-cide lines from Kast St. Louie included
the transfer expense Heme, in the came of through
shipments moving on the 81 Lowe Bast 84 Louk

combination, the situation is presented of a two-
factor combination, ei‘her factor of which, if ap-
plied separately, would include the transfer charge.
In determining which carrier, under these circum-
stances, should pay the transfer charge, there would
be no necessity of considering the measure of those
rates. Raising or lowering the St. Louis-East St.
Louis rates of either group of carriers would not
affect the question at issue, i. e., which of the two
groups of carriers should bear the transfer charges
on through shipments.

Under these circumstances it was not necessary
that the Commission have before it evidence bear-
ing on the question of the reasonableness of the
rates, and even if there was a total absence of such
evidence, which we do not concede, the validity of
this order would not be affected. The order, as
previously explained, relates to the application of
existing rates and does not raise or lower the level
of those rates. If as a result of the Commission's
requirement that they pay the transfer charges on
westbound traffic, the revenues of the east-side lines
thould be impaired, they are at liberty to propose
readjustments of their rates, subject of course, to
review by the Commission.

The evidence shows, it may be added, that the
tart side lines, as a group, are in a more prosperous
Seancial condition than the west-cide lines (Ex.
TT), amd therefore they are better able to bear the
burden of thee tranm|efer charges, whech burden se
Might fully theirs than the weet cide limes

54
CONCLUSION

We respectfully submit that the decree of the
District Court should be affirmed.
J. Stantey Payne,
For Interstate Commerce Commission.

P. J. FaRRew.,
Of Counsel.

oO

MAR 6 }:

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IN THE

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TABLE OF CONTENTS.

Page

L

Suceinct and Accurate Summary of Salient Facts
in Record and Résumé of Contentions of West
and East-side Lines With Respect Thereto....

IL.

As the Terminal is a Jointly Owned Facility for
Interchanging Traffic, Law Requires that Its
Sr 4 ag) wid be — Borne by East and

Statute Empowers Commission to Order FEast-
Side Lines to Make P and Lawful Delivery
and to Participate in Burden and Expense of
Interchange Without saan or Adjudica-

Appellants Admitted Before this Court that Fun.
damental Question Involved Here is the Point

of Interchange and that the Commission Has

Sey GP REED BO ecsccsoccdocesevessees

ll

ii Table of Contents Continued.

P
VIL. ”

Order of Commission is Valid and is a Lawful Ex-
ercise of Power Even Though the Interchange
Arrangements Condemned Did Not Constitute
a ‘‘Practice’’ Within the Meaning of that Term
i ee EE ASO coco ce recdsereseuesecins 49

ED oboe -nbcndenbcocadesnepedvssioes cess 55
INDEX OF CASES.
Associated Jobbers of Los Angeles v. Atchison, T.

OG FS Gn BOE OG BBs oc vec ccccens.
Atchison, T. & S. F. Ry. Co. v. United States, 232

Si SU EM MA cccvevcndcinccecocaaves 54
Business Men’s League of St. Louis v. A. T. &

8. F. By. Co., 44 LC. C. 308, 1. c. 311........ 15, 55
Central R. Co. of N. J., et al., v. United States, et

* £9 &§ APY Aree 54

Chicago Junction Case, 264 U.S. 258, 1. c. 267.... 50
Chicago, M. & St. P. Ry. Co. v. Des Moines U. Ry.

Co., 254 U. 8. 196, l. c. 204............6- 25, 28, 56
Chicago, M. & St. P. Ry. Co. v. Minneapolis Civic

Pv) % gs F See Prerrrerires
Chicago, R. I. & P. Ry. Co. v. Baltimore & O. R.

Se ee ie Ms Oe Ono ons cectccccoccsceces 33
Class and Commodity Rates, 32 L. C. C. 471, L. ¢.

UE 4 cdnkoneacessatooduae abeteashecccens 15, 55
Control of Subsidiaries by Terminal R. Ass’n, 99

Ee Ms MR cckc ccecespnenndecoeeenpeseten 2
Interstate Commerce Commission v. Atchison, T.

& 8. F. Ry. Co., 234 U.S. 294...........0005- 32

Louisville & Nashville R. Co. v. United States, 238
Ws A GED cbeccccoccvcecsceseccesscers 54
Manufacturers Ry. Co. v. St. L., I. M. & 8. Ry. Co.,
oo BSE err ee 14, 55
Myrick v. Michigan C. R. Co., 107 U. 8. 102, L e.
Dt da cheadnedesncenceudnesueanesaceus 33, 52, 55

|

Table of Contents Continued. iii
Page
National Wholesale Grocery Co. v. Dir. Gen., 62
os Fey Perri te 32
New England Divisions Case, 261 U. S. 184; 62
LO GO Gib: OB 1. GG GBR. oc cccccccccccess. 31
Northern Pacific v. Solum, 247 U. S. 477, 1. ¢c.483.. 54
113 I. C. C. 681, 1. ¢. G82, GOO... .cccccccccccees 4,49

Pennsylvania Co. Vv. United States, 236 U.S. 318.. 54
Peoria & Pekin U. Ry. Co. Case, 115 IL. C. C. 469... 27
Peoria & Pekin U. Ry. Co. Case, 93 L C. C. 3,

RE oc ckn csc ueneseenkeaseucscewuesaees 33, 27
Postal Telegraph-Cable Co. v. Western Union Tele-

graph Co., 59 L. C. C. 512, 1. c. 516............ 54
Richmond C. of C. v. Seaboard A. L. Ry. Co., 44

5k ee se koe ed kokbesiccensbuss 26, 51
St. Louis C. of C. v. Dir. Gen., 74 L. C. C. 308,

a rn cadens Kuesserensceuhvapebassedndses 3
St. Louis Terminal Case, 34 I. C. C. 453, 1. ¢. 456. .15, 55
State of Oklahoma v. State of Texas, 256 U. S.

CI EN schoo puhaeees si bube bees seeneehes 44
Swift & Co. v. Dir. Gen., 56 I. C. C. 309, l.e. 312... 14
Tap Line Cases, 234 U. 8. 1, 1. c. 29...........«- 50
SD COP FUTIS GEG wc ec veccccccvevccsenes 33, 52, 55
Terminal R. Ass’n of St. L. v. United States, 266

U. 8. 17, lc. 27..........-. +20, 26, 35, 36, 43, 53, 56

Co SR pene 33, 52

236 U. S. PC eee eet 14, 24
Vicksburg v. Henson, 231 U. 8S. 259, 1. ¢. 269, 273.. 43
Wharton Steel Co. v. Dir. Gen., 59 T. C. C. 11, 1. ¢. “

errr errr re rr ree Tr rer
Whitaker-Glessner Co. v. Baltimore & O. R. Co.,

Se ys es ko cee coeccvessoescsetas

IN THE
Supreme Court of the United States

Ocroser Term, 1927.

No. 404.

The Baltimore & Ohio Railroad Company; William W.
Wheelock and William G. Bierd, Receivers of the
Chicago & Alton Railroad Company; Chicago &
Eastern Illinois Railroad ~_y @ The Cleve-
land, Cincinnati, Chicago & St. Railway
Company; Illinois Traction, Inc.; Lllinois Central
Railroad Company; Litchfield & Madison Railway
Company; Louisville & Nashville Railroad Com-
pany; Mobile & Ohio Railroad Company; The New
York, Chicago & St. Louis Railroad Company; the
Pennsylvania Railroad Company; Southern Rail-
road Company, and Wabash Railway Company,

Appellants,
vs.

The United States of America, The Interstate Com-
merce Commission; The Chicago, Rock Island &
Pacific Railway Company; Missouri-Kansas-Texas
Railroad Company; Missouri Pacific Railroad
Company, and St. Louis-San Francisco Railway
Company,
| Appellees.

| BRIEF FOR WESTERN CARRIERS, APPELLEES.

I.

Succinct and Accurate Summary of Salient Facts in
Record and Resume of Contentions of West and
East-side Lines With Respect Thereto.

This brief is filed by the Appellees who were com-
plainants in the proceeding before the Interstate Com-

PDS ARE ETD CSRS GE SPS FOS OL TT EAE, IRL IIS COLETTE I ES

2

merce Commission and they will be hereinafter re-
ferred to as the west side lines.

A tremendous amount of through trans-river traffic,
carload as well as less-than-carload, is interchanged
between the east and the west-side lines in the St.
Louis-East St. Louis switching district; for the mile-
age of the carriers entering that gateway from all di-
rections is 80,000, or about 30 per cent of the entire
mileage in the United States (Ex. No. 4, p. 6)... The
interchange facilities, therefore, provided (the Ter-
minal Railroad Association of St. Louis and its sub-
sidiary companies) are large, valuable and extremely
expensive to maintain. The Terminal’s* investment
in road and equipment and improvements on leased
properties in 1924 amounted to $45,463,369.45 (Ex. No.
80, p. 5). Its capital (stock and funded debt) amount-
ed to $48,848,100.00. It operates 372.35 miles of track
solely in switching and terminal service (Ex. No. 80,
pp. 1, 7; Ex. No. 58, pp. 3, 18, 21). Its properties, in-
cluding two bridges across the Mississippi River, are

operated as one comprehensive terminal facility per-
forming terminal and interchange service for the

twenty-eight lines with which it connects. It has over
6,000 employees (Control of Subsidiaries by Terminal
R. Ass’n, 99 I. C. C. 698). Its operating expenses for
‘the year 1924 amounted te $9,096,413.70 (Ex. No. 80,
p.6) It interchanged with its connections during 1924
a total of 3,883,116 cars, or more than 10,000 ears a day.
(Control of Subsidiaries by Terminal R. Ass’n, 99
I. C. C. 698.) The distance between St. Louis and
East St. Louis across the Mississippi River is usually

1 The exhibits referred to in this brief are those introduced in the
hearing before the Interstate Commerce Commission or filed thereafter
by agreement of parties.

2 When we refer to the Terminal herein the subsidiary operating com-
panies are included.

3

figured on a three-mile basis (St. Louis Chamber of
Commerce v. Dir. Gen., 74 I. C. C. 308, 1. ec. 310). The
through trans-river freight traffic involved herein is
interchanged in switching service (Ex. No. 58, pp. 3,
13, 21).* Some of the less than-carload through traffic
is interchanged by certain transfer companies (Ex. No.
52, pp. 1, 2).

Prior to the order of the Interstate Commerce Com-
mission (Rec. 27-29), the four west side lines, Appel-
lees herein, were exclusively saddled with the con-
tinuous duty of producing the large and heavy oper-
ating expenses (Rec. 288, lines 31-35) of the Terminal
in interchanging this through trans-river traffic with
their eastern road-haul connections. It involved an
annual expense of approximately $3,000,000 to these
four west side lines and the thirteen east side trunk
lines shared no part of the burden and bore no part of
the expense. Based upon a test period of 28 months
on westbound, and 17 months on eastbound traffic, the
eastbound through traffic constituted 71 per cent and
the westbound traffic 29 per cent, of the total inter-
changed in both directions. The east side lines, there-
fore, receive about three times more traffic than they
give to the west side lines. If the transfer charges,
during one year embraced within the foregoing period,

sUnder the decree of the United States District Court the Association
was permitted to exist and continue ‘‘as a lawful unification of terminal
facilities upon abandoning all operating methods and charges as and
for railroad transportation and confining itself to the transaction of a
terminal business such as supplying and operating facilities for the in-
terchange of traffic between railroads and to assist in the collecting and
distributing of traffic for the carrier companies, switching, storage and
the like, and modifying its contracts as herein specified’’ (Ex. No. 50,
p. 2). The proprietary companies were enjoined ‘‘from in anywise
managing or conducting the said Terminal Railroad Association or any
of its constituent companies and from operating any of the properties
belonging to it or its constituents otherwise than as terminal facilities
for the railroad companies using the same, and from making charges
otherwise than for and according to the nature of the services so law-
fully authorized to be rendered’’ (Ex. No. 50, p. 2).

EPMO IE, TENET LLL foe EAM, AR Seo OTM SDL

Ee on Rey RAT Ca RAR RD RE AS a? . ae. os

+

had been borne by the east side lines on westbound
traffic, and by the west side lines on eastbound traffic,
the thirteen eastern carriers combined would only
have paid $713,161.69, while the west side lines would
have paid $1,746,016.55. These figures included car-
load but not 1. ¢. 1. traffie (113 I. C. C. 681, 1. ¢. 682, 3rd
Par.; Friseo’s Ex. No. 52; Rock Island’s Ex. No. 53;
Missouri Pacifie’s Ex. No. 55; Katy’s Ex. No. 56).

- However, the Commission’s order involved here covers

;
}

only that part of the westbound through traffic moving

on a combination of locals and a subsequent order

covering westbound traffic Moving under joint rates
undoubtedly largely depends upon the decision of this
Court in this ease (113 I. C. C. 681, 1. ¢. 690, 3rd Par.);
so that, as a result of this long-continued litigation,
if the west side lines are accorded the legal redress to
which they are entitled, and which they are asking for
(the assumption of the burden of interchange by the
east side lines on westbound traffic only) the four west-
ern roads will still be assuming the burden and expense
of interchanging approximately 71 per cent of the total
traffic, and the remaining 29 per cent of the total traf-
fic will be borne by the thirteen east side trunk lines
as they participate in the movement. The Appellants
contend that they should not even b compelled to as-
sume the burden and bear the expense of this com-
paratively small amount of the total, notwithstanding
the fact that during the year 1924 their railway op-
erating revenues and their net railway operating in-
come averaged $32,593 and $4,944, respectively, per
mile of road, while the same revenues and income for
the four west side lines averaged only $16,900 and

2.826, respectively, per mile of road (Press’ Ex. No.
77; Ree. 387).

ecratngy Ravens : Pons OR

5

Furthermore, the east side lines since 1906 have as-
sumed the burden and expense of delivering traffic
consigned to St. Louis proper, including all freight to
industries on the rails of these west side lines in the
St. Louis switching district, but from 1906 to the ef-
fective date of the order herein in 1926 they persist-
ently refused to so deliver traffic consigned to points
beyond St. Louis, although their rates on the traffic des-
tined beyond St. Louis, are exactly the same as their
rates on traffic consigned locally to St. Louis. In 1906
when the east side lines recognized St. Louis and East
St. Louis as one community, entitled to the same
rates and the same_ services of delivery and
transfer, they increased their East St. Louis rates from
116 to 117 per cent, and applied the East St. Louis
rates thus increased to St. Louis. From that time on,
they absorbed the transfer charges on traffic consigned
to or from St. Louis proper. However they appliec
these increased rates not only to the local traffic but
also to the traffic involved herein and moving to points
beyond St. Louis but refused to assume the same bur-
den and expense of delivery with reference thereto that
they assumed on local St. Louis traffic. No explana-
tion whatever was made in the record by the east side
les as to why they applied the increased rates in
1906 to the traffic consigned to points beyond St. Louis
which is many, many times more than the local St.
Louis traffic, and then refused to perform thereon the
same service that they did on freight for St. Louis
proper. They continued to compel the west side lines
to receive the traffic going beyond St. Louis at East St.
Louis, notwithstanding the fact that their East St.
Louis rates were increased. No law justified such ac-
tion except the law that might makes right and the fact

ERIE NN SIR

Sen at

te Leta ey arias

lata ht hag ale hs hgh ee Dalat

rae a

6

that there are thirteen trunk lines on the east side and
four trunk lines on the west side with equal represen-
tation on the board of directors of the Terminal Rail-
road Association. The eastern carriers have thereby
perpetuated this unjust burden on the western car-
riers long after the initial cause which compelled the
west side lines to absorb the charges in both directions
had lost all its force, for in 1877 when the west side
lines were forced through the compulsion of competi-
tion to meet the action of the Chicago and Alton by
absorbing the transfer in both directions, the railroads
themselves controlled the routing of traffic and there
was no interchange and terminal facility serving both
the west and the east banks of the River and jointly
owned, controlled and used by the east and the west
side lines with supposedly equal rights, benefits and
burdens.

The rates of the east side lines to St. Louis—East St.
Louis have received a series of increases since 1906
and they are today approximately and on the average
100 per cent higher (Appendix A, infra; Exhibit No.
72), so that the volume and measure of their rates
are, according to the undisputed data in this record,
ample and adequate for them to participate recipro-
cally as the law requires them to do in the burden and
expense of interchanging through traffic with their
western road-haul connections.

The legal issues and contentivns of the respective
parties.

The ultimate legal question involved herein is
whether the Commission has the power under the Act

: Ee at ee DA GS Te A Pers wr ‘
TK sitet fo A4 Kid (Pv

7

(a) to adjudicate and order the precise point
of interchange or delivery between road-haul car-
riers in handling through freight,

(b) to compel carriers to share and participate
in the burden and expense of interchanging
through vroad-haul traffic, and

(c) to order carriers to furnish the facilities
for through routes on traffic destined to points be-
yond their own rails.

The Commission’s order requires the east side lines
to share in the burden and_expense of interchanging
such through traffic involved by compelling them to
absorb the transfer or switching charges of the joint
agencies in one direction only and thereby deliver
westbound through traffic on the west bank of the river
(St. Louis).

Appellants contend that this order is invalid be-
cause :

(a) The former method of interchanging and
delivering through freight by which the west side
lines assumed the burden and expense of inter-
changing and delivering in both directions, did
not constitute a ‘‘practice’’ within the meaning
of the Act, and

(b) That the Commission cannot either compel
a carrier to make a lawful and proper delivery
as a part of its road-haul duties, or participate in
the burden and expense of interchanging through
traffic upon which it enjoys road-haul revenue,
unless the complainant also raises an issue as to

the level, measure or volume of the rates and di-
visions under which such traffic happens to move.

Appellees contend that these legal issues so raised
are without merit because:

(a) The order of the Commission herein is a
valid and lawful exercise of its power under those
provisions of the act which do not relate to prac-
tices. It is, therefore, immaterial whether the in-
terchange arrangements condemned and corrected,
constitute a ‘‘practice’’ within the meaning of that
term as used in certain other provisions of the
act. The provisions of the Act not relating to
practices relied upon by Appellees before the com-
mission are hereinafter discussed. (Chapter VII,
infra.)

(b) The Commission can compel a carrier to per-
form such services and incur such expenses
as are a part and parcel of its road haul transpor-
tation duties under existing rates, such as making
a delivery of through traffic to its road haul con-
nections and participating reciprocally in the bur-
den and expense of interchanging freight, without
considering rates and divisions; because the obli-
gation of a carrier under its line-haul rates includes
such services and expenses, irrespective of the
measure, volume or level of the line-haul rates. The
carrier is thereby simply fulfilling the law’s re-
quirements as to service under those rates. (Chap-
ter ITI, infra.)

(ec) That the provisions of the Act relied upon
by Appellees (paragraphs (3), (4), (6), (10),
and (11) of Section 1, paragraphs (1) and (.:) of

9

Section 3, and paragraphs (1) and (3) of Section
15 of the Act) may be enforced without a ecneur-
rent issue being raised under paragraph (6) of
Section 15 of the Act relating to divisions; because
the former are distinct, separable and independent
of the provisions relating to rates and divisions.
(Chapter III, infra.)

(d) That even if complainants before the Com-
mission were required to ra

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386007_0131%3A5. Public record. Not legal advice.