Texas Railway Company v. Interstate Commerce Commission/Dissent Harlan

Mr. Justice HARLAN, dissenting.

The interstate commerce act, as amended March 2, 1889, requires every common carrier, subject to its provisions, to print and keep open to public inspection schedules showing its rates and charges for the transportation of passengers and property. It also requires that such schedules 'shall plainly state the places upon its railroad between which property and passengers will be carried, and shall contain the classification of freight in force'; further, that any common carrier subject to the provisions of the act, 'receiving freight in the United States to be carried through a foreign country to any place in the United States shall also in like manner print and keep open to public inspection, at every depot or office where such freight is received for shipment, schedules showing the through rates established and charged by such common carrier to all points in the Unites States beyond the foreign country to which it accepts freight for shipment.'

The act contains no provision for printed schedules, to be kept open to public inspection, of freight shipped from a foreign country, not adjacent to this country, on a through bill of lading, and to be carried, after it reaches an American port, to some place in the United States. I think the reason for this is that congress did not intend that the rates to be charged for service by carriers subject to the provisions of the interstate commerce act should depend upon or be affected by rat § established abroad for ocean transportation.

The commission, thus interpreting the act of congress, and in order that American interests might not be injuriously affected by freight arrangements made by railroad companies with companies engaged in ocean transportation, and which were not subject to our laws, issued, on the 23d day of March, 1889, the following general order: 'Imported traffic transported to any place in the United States from a port of entry or place of reception, whether in this country or in an adjacent foreign country, is required to be taken on the inland tariff covering other freights.'

Subsequently, November 29, 1889, proceedings were commenced before the commission by the petition of the New York Board of Trade and Transportation against the Pennsylvania Railroad Company, the Pittsburg, Ft. Wayne & Chicago Railroad Company, and the Pittsburg, Cincinnati & St. Louis Railroad Company.

The petition charged that those companies violated the interstate commerce act, and were guilty of unjust discriminations, in that they charged their regular tariff rates upon property delivered to them at New York and Philadelphia for transportation to Chicago and other Western points, while charging rates much lower for a like contemporaneous service under substantially similar circumstances and conditions when the property was or is delivered to them at New York or Philadelphia by vessels and steamship lines, under through bills of lading from foreign ports and foreign interior ports, issued under common arrangement between the defendants and such vessels and steamship lines and foreign railroads for continuous carriage at joint rates from the point or port of shipment to Chicago and other Western points; the defendants' share of such through rate for the inland transportation being lower than its regular tariff rates, in some cases as low as 50 per cent. thereof.

The petition further charged that the defendants failed to state in their published tariffs or in such through bills of lading the inland charge separately from the ocean and other charges in order to prevent ascertainment of the actual inland rates; that they made and gave undue and unreasonable preferences and advantages to persons, firms, companies, corporations, and localities interested in the transportation of imported traffic from the seaboard under such through bills of lading, and had subjected persons, companies, firms, and corporations in and about some localities to undue and unreasonable prejudice and disadvantage by reason of the higher rates charged to them for like and contemporaneous service under substantially similar circumstances and conditions; that there are no conditions or circumstances relating to the transportation of imported traffic which justify any difference in rates between imported traffic transported to any place in the United States from a port of entry and other traffic from such ports, and that the inland published tariff must by law be the same for all such freights.

In the course of the proceedings different commercial exchanges and chambers of commerce became co-plaintiffs, and other railroads were made defendants.

It appears from the opinion of the interstate commerce commission that numerous roads conformed to the order of March 23, 1889, and insisted that their inland rates were the same for all traffic, whether domestic or imported.

In the progress of the proceedings the Texas & Pacific Railway Company was brought before that tribunal; and on the 29th day of January, 1891, and order was made that certain railroad companies, including the Texas & Pacific Railway Company, should wholly cease and desist from carrying any article of import traffic shipped from any foreign port through any port of entry of the United States, or any port of entry in a foreign country adjacent to the United States, upon through bills of lading, and destined to any place within the United States, upon any other than the published inland tariff c vering the transportation of other freight of like kind over their respective lines from such port of entry to such place of destination, or at any other than the same rates established in said published inland tariff for the carriage of other like kind of traffic in the elements of bulk, weight, value, and expense of carriage.

The present case was commenced by the interstate commerce commission by petition filed in the circuit court of the United States for the Southern district of New York against the Texas & Pacific Railway Company.

A decree was entered by that court, enjoining the latter company, its board of directors, officers, agents, attorneys, clerks, servants, employees, and all persons claiming or holding under them, or either or any of them, from carrying any article of import traffic shipped from any foreign port through any port of entry in the Unites States, or any port of entry in a foreign country adjacent to the United States, upon through bills of lading, and destined to any place within the United States, upon any other than the published inland tariff covering the transportation of other freight of like kind over its line from such port of entry to such place of destination; or at any other than the same rates established in said published tariff for the carriage of other like kinds of traffic in the elements of bulk, weight, value, and expense of carriage; or from carrying imported traffic at lower rates for like service than the defendant charges for like traffic originating in the United States; or from charging or accepting for its share of through rates upon imported traffic a lower sum than it charges or receives for domestic traffic of like kind to the same destination from the point at which the imported traffic enters the country; or for such share of through rates upon imported traffic any other than the rates established in the defendants' published tariff for the carriage of other like kind of traffic in the elements of bulk, weight, value, distances, and expense of carriage.

This decree was affirmed in the court of appeals for the Second circuit.

The record shows that the rate in cents per 100 pounds charged for the transportation on through bills of lading of books, buttons, carpets, clothing, and hosiery from Liverpool and London, via New Orleans, over the Texas & Pacific Railroad and the railroads of the Southern Pacific System, to San Francisco, is 107, while upon the same kind of articles-carried, it may be, on the same train-the rate charged from New Orleans, over the same railroads, to San Francisco, is 288. The rate in cents per 100 pounds charged for the transportation on through bills of lading of boots and shoes, cashmeres, cigars, confectionery, cutlery, gloves, hats and caps, laces, linen, linen goods, saddlers' goods, and woolen goods from Liverpool and London, via New Orleans, over the same railroad, to San Francisco, is 107, while upon like goods, starting from New Orleans, and destined for San Francisco, over the same line,-it may be, on the same train,-the rate charged is 370. Discrimination, in the matter of rates, is also made by the railway company (though not to so great an extent) in favor of blacking, burlaps, candles, cement, chinaware, cordage, crockery, common drugs, earthenware, common glassware, glycerine, hardware, leather, nails, soap, caustic soda, tallow, tin plate, and wood pulp, manufactured abroad and shipped, on through bills of lading, from Liverpool and London, via New Orleans, to San Francisco, and against goods of like kind carried from New Orleans to San Francisco over the same railroads.

These rates have been established by agreement between the railway company whose line, with its connections, extends from New Orleans to San Francisco, and the companies whose vessels run from Liverpool to New Orleans. And the question is presented whether the Texas & Pacific Railway Company can, consistently with the act of congress, charge a higher rate for the transportation of goods starting from New Orleans and destined to San Francisco than for the transportation between the same places of goods of the same kind in all the elements of bulk, weight, value, and expense of carriage, brought to New Orleans from Liverpool on a through bill of lading, and to be carried to San Francisco. If this question be answered in the affirmative; if all the railroad companies whose lines extend inland from the Atlantic and Pacific seaboards indulge in like practices,-and if one may do so, all may and will do so; if such discrimination by American railways, having arrangements with foreign companies, against goods, the product of American skill, enterprise, and labor, is consistent with the act of congress,-then the title of that act should have been one to regulate commerce to the injury of American interests, and for the benefit of foreign manufactures and dealers.

The railway company insists that the competition existing between it and the ocean lines running between Liverpool and San Francisco via Cape Horn and the Pacific Ocean, and between Liverpool and San Francisco via the Isthmus of Panama, compel it to charge a higher rate from New Orleans to San Francisco for the transportation of goods originating at New Orleans than on like goods originating at Liverpool and destined to San Francisco, via New Orleans; otherwise, it contends, goods that originate at Liverpool would fall into the hands of its competitors in the business of transportation. The interstate commerce commission held that, in determining the question before it, no weight could be attached to the circumstances arising from the conduct of ocean lines by corporations or associations who were in no wise subject to the provisions of the act of congress; and that the provision which expressly forbids common carriers from making or giving undue preferences or advantages in any respect whatsoever was intended to be so far rigid in its nature that it could not be relaxed by reason of circumstances or conditions arising out of or connected with foreign countries, or that were caused by agencies beyond the control or supervision of the commission. The court now holds that the commission erred in thus interpreting the act of congress.

To what common carriers does the interstate commerce act of 1887 apply? 24 Stat. 379, c. 104; 25 Stat. 855, c. 382. This question is answered by the first section of that act.

By that section, the provisions of the act are declared to 'apply to any common carrier or carriers engaged in the transportation of passengers or property wholly by railroad, or partly by railroad and partly by water when both are used, under a common control, management or arrangement, for a continuous carriage or shipment, from one state or territory of the United States, or the District of Columbia, to any other state or territory of the United States or the District of Columbia, or from any place in the United States to an adjacent foreign country, or from any place in the United States through a foreign country to any other place in the United States, and also to the transportation in like manner of property shipped from any place in the United States to a foreign country and carried from such place to a port of transshipment, or shipped from a foreign country to any place in the United States and carried to such place from a port of entry either in the United States or an adjacent foreign country: provided, however, that the provisions of this act shall not apply to the transportation of passengers or property, or to the receiving, delivering, storage or handling of property, wholly within one state, and not shipped to or from a foreign country from or to any state or territory as aforesaid.' Again: 'All charges made for any service rendered or to be rendered in the transportation of passengers or property as aforesaid, or in connection therewith, or for the receiving, delivering, storage or handling of such property, shall be reasonable and just; and every unjust and unreasonable charge for such service is prohibited and deelared to be unlawful.'

From this section it is clear that the Texas & Pacific Railway Company is, and that the ocean lines connected with that company are not, subject to the provisions of the act. This interpretation is supported by the declaration made on the floor of the senate by the chairman of the select committee which reported the original bill. He said: 'While the provisions of the bill are made to apply mainly to the regulation of interstate commerce, in order to regulate such commerce fairly and effectively it has been deemed necessary to extend its application also to certain classes of foreign commerce which are intimately intermingled with interstate commerce, such as shipments between the United States and adjacent countries by railroad, and the transportation by railroad of shipments between points in the United States and ports of transshipment or of entry, when such shipments are destined to or received from a foreign country on through bills of lading. To avoid any uncertainty as to the meaning of these provisions in regard to what may be at the same time in some instances state and foreign commerce, it is expressly provided that the bill shall not apply to the transportation of property wholly within the state and not destined to or received from a foreign country.'

We have, then, an explicit declaration by congress that the act not only embraces common carriers of the class to which the Texas & Pacific Railway Company belongs, but that its provisions as to rates apply to the transportation of property 'shipped from a foreign country to any place in the United States, and carried to such place from a port of entry either in the United States or an adjacent foreign country.'

What is the rule declared by congress in respect to rates for the tranportation of property or goods of the kind just described? It is clearly defined by the second, third, and fourth sections, which declare:

'Sec. 2. That if any common carrier subject to the provisions of this act shall, directly or indirectly, by any special rate, rebate, drawback or other device, charge, demand, collect or receive from any person or persons a greater or less compensation for any service rendered, or to be rendered, in the transportation of passengers or property, subject to the provisions of this act, than it charges, demands, collects or receives from any other person or persons for doing for him or them a like and contemporaneous service in the transportation of a like kind of traffic under substantially similar circumstances and conditions, such common carrier shall be deemed guilty of unjust discrimination, which is hereby prohibited and declared to be unlawful.

'Sec. 3. That it shall be unlawful for any common carrier subject to the provisions of this act to make or give any undue or unreasonable preference or advantage to any particular person, company, firm, corporation or locality, or any particular description of traffic, in any respect whatsoever, or to subject any particular person, company, firm, corporation or locality, or any particular description of traffic, to any undue or unreasonable prejudice or disadvantage in any respect whatsoever. * *  *

Sec. 4. That it shall be unlawful for any common carrier subject to the provisions of this act to charge or receive any greater compensation in the aggregate for the transportation of passengers or of like kind of property, under substantially similar circumstances and conditions, for a shorter than for a longer distance over the same line, in the same direction, the shorter being included within the longer distance; but this shall not be construed as authorizing any common carrier within the terms of this act to charge and receive as great compensation for a shorter as for a longer distance: provided, however, that upon application to the commission appointed under the provisions of this act, such common carrier may, in special cases, after investigation by the commission, be auth rized to charge less for longer than for shorter distances for the transportation of passengers or property; and the commission may from time to time prescribe the extent to which designated common carriers may be relieved from the operation of this section of this act.'

I am unable to find in these sections any authority for the commission, or for a carrier subject to the provisions of the act of congress, to take into consideration the rates established by ocean lines as affecting the charges that an American carrier may make for the transportation of property over its routes. The transportation, for instance, by the Texas & Pacific Railway Company of boots and shoes from New Orleans to San Francisco for A., and the transportation of like goods over the same route for B., is 'a like and contemporaneous service' by the carrier for each shipper, and is performed under precisely the same circumstances and conditions. A discrimination between A. and B., in respect of charges for a like and contemporaneous service in transporting the same kind of property, over the same route, is an unjust discrimination, because it necessarily operates to give that one to whom the most liberal rates are given an undue or unreasonable preference or advantage over the others.

I am unwilling to impute to congress the purpose to permit a railroad company, because of arrangements it may make, for its benefit, with foreign companies engaged in ocean transportation, to charge for transporting from one point to another point in this country goods of a particular kind, manufactured in this country, three or four times more than it charges for carrying over the same route, and between the same points, goods of the same kind manufactured abroad, and received by such railroad company at one of our ports of entry.

The fourth section of the statute relating to long and short distances, and which authorizes the commission, in special cases, to allow less to be charged for longer than for shorter distances for the transportation of passengers or property over the same route, does not refer to distances covered and services performed on the ocean between this country and foreign countries not adjacent to this country, nor to transportation between the same points in this country over the same road. When the question is as to rates for service by a carrier between two given points in this country, and in reference to the same kind of property, congress, I think, intended that for such 'like and contemporaneous service,' performed, as they necessarily are, under the same circumstances and conditions, no preference or advantage should be given to any particular person, company, firm, corporation, or locality. Consequently, when goods are to be carried from one point in the United States to another, the rate to be charged cannot properly be affected by an inquiry as to where such goods originated or were manufactured.

Congress intended that all property transported by a carrier subject to the provisions of the act should be carried without any discrimination because of its origin. The rule intended to be established was one of equality in charges, as between a carrier and all shippers, in respect of like and contemporaneous service performed by the carrier over its line, between the same points, without discrimination based upon conditions and circumstances arising out of that carrier's relations with other carriers or companies, especially those who cannot be controlled by the laws of the United States.

After referring to the fact that goods originating in a foreign country are carried upon rates that are practically fixed abroad, and are not published here, while carriers governed by the act of congress are required to publish their rates for transportation in this country, the commission, speaking by Commissioner Bragg, well said: 'Imported foreign merchandise has all the benefit and advantage of rates thus made in the foreign ports. It also has all the benefit and advanta e of the low rates made in the ocean carriage arising from the peculiar circumstances and conditions under which it is done. But when it reaches a port of entry of the United States, or a port of entry of a foreign country adjacent to the United States, in either event upon a through bill of lading, destined to a place in the United States, then its carriage from such port of entry to its place of destination in the United States, under the operation of the act to regulate commerce, must be under the inland tariff from such port of entry to such place of destination covering other like kind of traffic in the elements of bulk, weight, value, and of carriage, and no unjust preferences must be given to it in carriage or facilities of carriage over other freight. In such case all the circumstances and conditions that have surrounded its rates and carriage from the foreign port to the port of entry have had their full weight and operation, and in its carriage from a port of entry to the place of its destination in the United States the mere fact that it is foreign merchandise thus brought from a foreign port is not a circumstance or condition under the operation of the act to regulate commerce, which entitles it to lower rates or any other preference in facilities and carriage over home merchandise or other traffic of a like kind carried by the inland carrier from the port of entry to the place of destination in the United States for the same distance and over the same line.' I concur entirely with the commission when it further declared: 'One paramount purpose of the act to regulate commerce, manifest in all its provisions, is to give to all dealers and shippers the same rates for similar services rendered by the carrier in transporting similar freight over its line. Now, it is apparent from the evidence in this case that many American manufacturers, dealers, and localities, in almost every line of manufacture and business, are the competitors of foreign manufacturers, dealers, and localities for supplying the wants of American consumers at interior places in the United States, and that under domestic bills of lading they seek to require from American carriers like service as their foreign competitors in order to place their manufactured goods, property, and merchandise with interior consumers. The act to regulate commerce secures them this right. To deprive them of it by any course of transportation business or device is to violate the statute. Such a deprivation would be so obviously unjust as to shock the general sense of justice of all the people of the country, except the few who would receive the immediate and direct benefit of it.'

It seems to me that any other interpretation of the act of congress puts it in the power of railroad companies which have established, or may establish, business arrangements with foreign companies engaged in ocean transportation, to do the grossest injustice to American interests. I find it impossible to believe that congress intended that freight originating in Europe or Asia and transported by an American railway from an American port to another part of the United States could be given advantages in the matter of rates, for services performed in this country, which are denied to like freight originating in this country, and passing over the same line of railroad between the same points. To say that congress so intended is to say that its purpose was to subordinate American interests to the interests of foreign countries and foreign corporations. Such a result will necessarily follow from any interpretation of the act that enables a railroad company to exact greater compensation for the transportation from an American port of entry, of merchandise originating in this country, than is exacted for the transportation over the same route of exactly the same kind of merchandise brought to that port from Europe or Asia, on a through bill of lading, under an arrangement with an ocean transportation company. Under such an interpretation the rule stablished by congress to secure the public against unjust discrimination by carriers subject to the provisions of the interstate commerce act would be displaced by a rule practically established in foreign countries by foreign companies, acting in combination with American railroad corporations seeking, as might well be expected, to increase their profits, regardless of the interests of the public or of individuals.

I am not much impressed by the anxiety which the railroad company professes to have for the interests of the consumers of foreign goods and products brought to this country under an arrangement as to rates made by it with ocean transportation lines. We are dealing in this case only with a question of rates for the transportation of goods from New Orleans to San Francisco over the defendant's railroad. The consumers at San Francisco, or those who may be supplied from that city, have no concern whether the goods reach them by way of railroad from New Orleans, or by water around Cape Horn, or by the route across the Isthmus of Panama.

Nor is the question before the court controlled by considerations arising out of the tariff enactments of congress. The question is one of unjust discrimination by an American railway against shippers and owners of goods and merchandise originating in this country, and of favoritism to shippers and owners of goods and merchandise originating in foreign countries. If the position of the Texas & Pacific Railroad Company be sustained, then all the railroads of the country that extend inland from either the Atlantic or the Pacific Ocean will follow their example, with the inevitable result that the goods and products of foreign countries, because alone of their foreign origin and the low rates of ocean transportation, will be transported inland from the points where they reach this country at rates so much lower than is accorded to American goods and products that the owners of foreign goods and products may control the markets of this country to the serious detriment of vast interests that have grown up here, and in the protection of which against unjust discrimination all of our people are deeply concerned.

It is said that only boards of trade or commercial exchanges have complained of the favorable rates allowed by railroad companies for foreign freight. It seems to me that this is an immaterial circumstance. So long as the questions under consideration were properly raised by those boards and exchanges, it was unnecessary that individual shippers, producers, and dealers should intervene in the proceedings before the commission. But I may ask whether the interests represented by these boards of trade and commercial exchanges are not entitled to as much consideration as the interests of railroad corporations. Are all the interests represented by those who handle, manufacture, and deal in American goods and merchandise that go into the markets of this country to be subordinated to the necessities or greed of railroad corporations? As I have already said, congress, by enacting the interstate commerce act, did not seek to favor any special class of persons, nor any particular kind of goods because of their origin. It intended that all freight of like kind, wherever originating, should be carried between the same points, in this country, on terms of equality.

It is said that the interstate commerce commission is entitled to take into consideration the interests of the carrier. My view is that the act of congress prescribes a rule which precludes the commission or the courts from taking into consideration any facts outside of the inquiry whether the carrier, for like and contemporaneous services, performed in this country under substantially similar circumstances and conditions, may charge one shipper more or less than he charges another shipper of like goods over the same route, and between the same points. Undoubtedly, the carrier is entitled to reasonable compensation for the service it performs. But the necessity that a named carrier shall secure a particular kind of business is not a sufficient reason for permitting it to discriminate unjustly against American shippers, by denying to them advantages granted to foreign shippers. Congress has not legislated upon such a theory. It has not said that the inquiry whether the carrier has been guilty of unjust discrimination shall depend upon the financial necessities of the carrier. On the contrary, its purpose was to correct the evils that had arisen from unjust discrimination made by carriers engaged in interstate commerce. It has not, I think, declared, nor can I suppose it will ever distinctly declare, that an American railway company, in order to secure for itself a particular business, and realize a profit therefrom, may burden interstate commerce in articles originating in this country by imposing higher rates for the transportation of such articles from one point to another point in the United States than it charges for the transportation between the same points, under the same circumstances and conditions, of like articles originating in Europe, and received by such company on a through bill of lading issued abroad. Does any one suppose that if the interstate commerce bill, as originally presented, had declared, in express terms, that an American railroad company might charge more for the transportation of American freight between two given places in this country than it charged for foreign freight between the same points, that a single legislator would have sanctioned it by his vote? Does any one suppose that an American president would have approved such legislation?

Suppose the interstate commerce bill, as originally reported, or when put upon its passage, had contained this clause: 'Provided, however, the carrier may charge less for transporting from an American port to any place in the United States freight received by it from Europe on a through bill of lading than it charges for American freight carried from that port to the same place for which the foreign freight is destined.' No one would expect such a bill to pass an American congress. If not, we should not declare that congress ever intended to produce such a result; especially when the act it has passed does not absolutely require it to be so interpreted.

Let us suppose the case of two lots of freight being at New Orleans, both destined for San Francisco over the Texas & Pacific Railroad and its connecting lines. One lot consists of goods manufactured in this country; the other, of goods of like kind manufactured in Europe, and which came from Europe on a through bill of lading. Let us suppose, also, the case of two passengers being at New Orleans (the act of congress applies equally to passengers and freight), both destined for San Francisco, over the same railroad and its connecting lines. One is an American, the other a foreigner who came from Europe upon an ocean steamer belonging to a foreign company that had an arrangement with the Texas & Pacific Railroad Company by which a passenger with a through ticket from Liverpool would be charged less for transportation from New Orleans to San Francisco than it charged an American going from New Orleans to San Francisco. The contention of the railroad company is that it may carry European freight and passengers, between two given points in this country, at lower rates than it exacts for carrying American freight and passengers between the same points, and yet not violate the statute, which declares it to be unjust discrimination for any carrier, directly or indirectly, by any device, to charge, demand, collect, or receive from any person or persons a greater or less compensation for any service rendered or to be rendered in the transportation of passengers or property than it charges, demands, collects, or receives from any other person or persons for doing for him or them a like and contemporaneous service in the transportation of a like kind of traffic under substantially similar circumstances and con itions. And that discrimination is justified fied upon the ground that otherwise the railroad company will lose a particular traffic. Under existing legislation, such an interpretation of the act of congress enables the great railroad corporations of this country to place American travelers, in their own country, as well as American interests of incalculable value, at the mercy of foreign capital and foreign combinations,-a result never contemplated by the legislative branch of the government.

I cannot accept this view, and therefore dissent from the opinion and judgment of the court.

I am authorized by Mr. Justice BROWN to say that he concurs in this opinion.

Mr. Chief Justice FULLER, dissenting.

In my judgment, the second and third sections of the interstate commerce act are rigid rules of action, binding the commission as well as the railway companies. The similar circumstances and conditions referred to in the act are those under which the traffic of the railways is conducted, and the competitive conditions which may be taken into consideration by the commission are the competitive conditions within the filed occupied by the carrier, and not competitive conditions arising wholly outside of it.

I am therefore constrained to dissent from the opinion and judgment of the court.