Owen J. Roberts

“ In holding that the Commission is without power to make the order, the Court does not deny that a discrimination which is produced by charging equal rates for unequal service is prohibited by the statute as much as one resulting from unequal rates for equal service. ”

“ While the carriers may therefore, meet competition by equalizing rates or maintaining differentials both to interior points and to ports, they may not adjust their rates with the motive of injuring or aiding a shipper, a particular kind of traffic, or a locality, for so to do is to depart from the transportation standard, conformity to which the act contemplates, and substitute others which are prohibited. A tariff published for the purpose of destroying a market or building up one, of diverting traffic from a particular place to the injury of that place, or in aid of some other, is unlawful ”

“ The traffic with which we are concerned does not move on through bills of lading, but the movement is, nevertheless, from points of origin to a foreign or coastal destination, or vice versa, and is therefore essentially through transportation. ”

“ It would have no authority to fix an absolute rate, which must be observed by the carrier, and no authority to fix a minimum rate, below which the carrier cannot go; and a preferential can not be controlled without there is authority to control absolutely both legs of the differential. ”

“ The Commission has found, and it is not questioned, that transportation costs and conditions throughout the southwest territory are substantially the same; that the rates established by the carriers disregard generally and materially the amounts and costs of service; that the discrimination has deprived, and will continue to deprive, the Texas ports of the natural advantage of their more favorable geographical position, and has resulted, and will continue to result, in building up the port of New Orleans to their detriment and at their expense. ”

“ The choice of route is determined solely by the rail rates from or to the ports. If these are equalized, the shipper has an option; but, if they are disparate, the route through the port taking the higher rate is necessarily excluded. A very slight differential in the rail rate, in some instances as little as a fraction of a cent per hundred pounds, will divert the traffic through the port so advantaged. The application of a distance scale to the rail rate automatically precludes shipment through the more distant port. ”

“ Assuming that neither rate is unreasonable, the one carrier cannot be compelled to alter its rate, because the other's is higher or lower for the same service. A carrier or group of carriers must be the common source of the discrimination-must effectively participate in both rates, if an order for correction of the disparity is to run against it or them. ”

“ The appellants contend that in the circumstances disclosed the ports as such are not localities preferred or prejudiced, but that, if they may be so denominated, the Texas & Pacific and the L.R. & N. cannot be held responsible for any undue prejudice to the Texas ports, since they do not reach those ports with their own lines or control the rates to or from them. They also assert that the orders violate article 1, § 9, of the Constiution, which prohibits any regulation of commerce giving preference to ports of one state over those of another; are without support in the evidence, and arbitrary. ”

“ The statute does not command, or the Commission's order direct, that the rates shall be measured exclusively by mileage or carrier service; carrier competition for business passing through gateways or elsewhere is not forbidden, but, when the discrimination goes so far beyond the line of reasonableness as to result in the commercial destruction of a locality, the Commission may declare it 'undue or unreasonable,' and therefore forbidden by the statute, whether aimed at ports or points of shipment or destination. ”

“ Petroleum is one of the commodities as to which complaint was made. There is no transportation difference discoverable in the record between this traffic and that of the other freights affected by the order. But the Commission concluded that New Orleans was not receiving more than its fair share of this business, and that a differential advantage would be of little benefit to the Texas ports by diverting this commodity to them, and therefore refused to make any order respecting the rates on petroleum and its products. ”

“ If these are the rate of one carrier to point A and that of another to point B while a relationship of one to the other may be determined, neither the first nor the second carrier alone can be held to have created the relation. ”

“ It was also pointed out that relative rates on different roads were not within the control of the Commission. In discussing differentials, Senator Raynor pointed out that the provisions of the bill 'are limited to discriminations upon the same roads. The words 'unjustly discriminatory' or 'unduly preferential' or 'prejudicial' apply to rates and regulations and practices upon the same road, because there can be no such thing as an unjust discrimination or an undue preference between different roads supplying different territory and terminating at different points. ”

“ The purpose of the guaranty provision was to stabilize the credit position of the roads by assuring them a minimum operating income. They were bound to operate their properties in order to avail themselves of the government's profer. Under the terms of the statute, no sum could be received save as a result of operation. If the fruits of the employment of a road's capital and labor should fall below a fixed minimum, then the government agreed to make up the deficiency, and, if the income were to exceed that minimum, the carrier bound itself to pay the dxcess into the federal treasury. ”

“ Appellees say, however, that the Commission has always treated ports as localities within the meaning of section 3, and exercised the power to abate discrimination by prescribing differentials in export rates. They add that, though the act has been several times amended, this section has been retained in its original form, and Congress has thus sanctioned the Commission's interpretation. Where a statutory body has assumed a power plainly not granted, no amount of such interpretation is binding upon the courts. ”

“ Texas is also connected with New Orleans by the Gulf Coast Lines, by the Texas & Pacific, extending east from El Paso through Dallas and Fort Worth to Shreveport, La., and thence southeast to New Orleans, and by the L.R. & N., which connects Eastern Texas and Western Louisiana with that port. Several other lines extend between New Orleans and Western Louisiana, Arkansas, Kansas, and Oklahoma. ”

“ It is not suggested that a discrimination effected by reasonable rates may not result in gross injury to the locality discriminated against; and the opinion does not question the correctness of the findings here that such injury is inflicted on the Texas ports by the prohibited rates. ”

“ The first paragraph prohibits the giving of any undue or unreasonable preference to any particular person or locality, or any particular description of traffic, in any respect whatever, and declares such a preference unlawful. * * * This covers in general terms, though by no means so completely, the provision of section 2 as to discriminations against persons, but goes further and includes discriminations against localities or particular descriptions of traffic. ”

“ While the government had either paid, or was obligated to pay, just compensation for their requisition, the amount of it was known to be insufficient for rehabilitation of the roads as privately owned and operated organizations. ”

“ As the carriers are in competition for the business, they may, within the zone of reasonableness, [14] prescribed by the statute, adjust their rates so as to obtain or retain the desired traffic for their own lines. ”