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cede a cutting for clearing the land for cul-, even when permanent improvements and tivation, and deny it for other purposes. At equipment were charged to operating exwhat time shall we date the preparation for penses. cultivation and make the right to sell the Carriers—reasonableness of rates. timber depend? Must the axe immediately 2. Expenditures for permanent improveprecede the plow and do no more than keep ments and equipment should not be charged out of its way? And if that close relation to the current or operating expenses of a be not always maintained, may the purpose reasonableness of an increased freight rate.
single year for the purpose of testing the of an allottee be questioned and referred to some advantage other than the cultivation Carriers-reasonableness of rates-presump
tion. of the land, and his title or that of his vendee to the timber be denied ? Nor does the freight rate upon a particular commodity
3. No presumption of law that a argument which makes the occupation of is reasonably low exists because such rate the land a test of the title to the timber has been duly published and filed by the seem to us more adequate to justify the carrier with the Interstate Commerce Comqualification of the Indians' rights.
mission. It is based upon the necessity of superin. Interstate Commerce Commission-powerstending the weakness of the Indians and
judicial enforcement of order. protecting them from imposition. The argu: carriers in the freight rate upon a particu
4. A concerted advance by interstate ment proves too much. If the provision against alienation of the land be extended and unjust by the Interstate Commerce
lar commodity may be held unreasonable to timber cut for purposes other than the Commission and by a Federal circuit court cultivation of the land it would extend to in the subsequent proceedings to enforce the timber cut for the purpose of cultivation. order of the Commission, although such rate What is there in the former purpose to pro- may be but a mere division of a through tect from imposition that there is not in the rate. other? Shall we say such evil was con- Appeal-review of facts. templated and considered as counterbal- 5. Findings of fact made by the Interanced by benefit? And what was the bene. state Commerce Commission, when fit? The allotments, as we have said, were be disturbed unless the record establishes
curred in by a Federal circuit court, will not to be of arable lands useless, may be, cer- that clear and unmistakable error has been tainly improved by being clear of their tim committed. * ber, and yet, it is insisted that this improvement may not be made, though it have the
[No. 588.] additional inducement of providing means Argued April 22, 23, 1907. Decided May 27, for the support of the Indians and their
1907. families. We are unable to assent to this view.
APPEAL from the Circuit Court of the
United States for the Eastern District Judgment affirmed.
of Louisiana to review a decree enforcing an
order of the Interstate Commerce CommisMr. Justice Moody took no part in the desion requiring carriers to desist from charcision of this case.
ging an increased freight rate on lumber. Affirmed.
Statement by Mr. Justice McKenna: ILLINOIS CENTRAL RAILROAD COM- This case involves the validity of an or
PANY, Gulf and Ship Island Railroad der of the Interstate Commerce Commission Company, Southern Railroad Company, et requiring the appellants "to cease and deal., Appts.,
sist on or before the 1st day of April, 1905,
from further maintaining or enforcing the INTERSTATE COMMERCE COMMISSION. unlawful advance of 2 cents per 100 pounds,
or the said unlawful rates resulting thereAppeal-harmless error.
1. Even if error could be attributed to from, for the transportation of lumber from the Interstate Commerce Commission in de- shipping points on defendants' respective ciding that expenditures for permanent im- lines in the state of Louisiana east of the provements and equipment should not be Mississippi river, and in the states of Mischarged to the current or operating ex- sissippi and Alabama to Cincinnati, Louispenses of a single year for the purpose of ville, Evansville, Cairo, and other points on testing the reasonableness of an increased the Ohio river commonly called and known freight rate, such error would not require as Ohio river points.” the reversal of a decree enforcing an order
The order was made in the matter of the of the Commission requiring carriers to desist from enforcing such rate, where the complaint filed with the Commission by the findings show that the old rates were prof-Central Yellow Pine Association, an incorpo. • itable and that dividends were declared / rated association composed of persons, firms,
*Ed. Note.--For cases in point, see vol. 10, Cent. Dig. Commerce, § 148.
and corporations engaged in the business of , mingled somewhat with legal arguments, manufacturing yellow pine lumber in the but the following may be selected as im. states of Mississippi, Alabama, and that portant and pertinent to the questions which part of Louisiana east of the Mississippi the controversy presents: river,
The lumber-producing districts are diThe complaint charged that the appellants vided in territory (1) west of the Missiswere common carriers by rail, engaged in in- sippi river; (2) territory east of the river; terstate commerce, and as such were engaged and (3) southeastern territory, composed of in the transportation of yellow pine lumber the states of Georgia, Florida, and part of from the mills and lumber plants of the Alabama. The lumber of each of these dismembers of the Yellow Pine Lumber Asso-tricts competes in the sale of their products ciation to the territory known as the "Cen- in "Central Freight Association territory." tral Freight Association territory," which The roads of the appellants are located lies on the north of the Ohio river and on in and serve the second of these territories. and between the Mississippi river on the The advance in rates was made as well west and a line running through Buffalo and in territory west of the Mississ ppi river, Pittsburg on the east, and that the members and was made, in fact, though not exof the association are dependent upon appel. pressly, by agreement between the defendlants for the transportation of their lumber ants (appellants) and the roads west of the to the markets of the country; that the ap- river,” after several meetings, at a consultapellants and the railways carrying yellow tion between the representatives of the pine lumber to the same markets from the roads. The roads east of the river took the territory west of the Mississippi river, em- initiative. bracing the states of Texas, Arkansas, and
At Cairo traffic from a large portion of that part of Louisiana west of the river, the lumber-producing districts meets or conby agreement or concert of action advanced verges en route to destination. The rates the rate on yellow pine lumber from the on other Ohio river crossings are based on territories both east and west of the Mis-Cairo; that is, they bear a fixed relation sissippi river on and beyond the Ohio river to the Cairo rate, being advanced or reduced in Central Freight Association territory 2 as that rate is advanced or reduced. The cents per 100 pounds. The advance was through rates to points beyond the Ohio made applicable south of the Ohio river and river in Central Freight Association terrieffective on and from April 15, 1903, except | tory are made up of the full local rates of as to the Louisville & Nashville road, as to the roads north of the Ohio as the prowhich it became effective June 22, 1903. And portions of those roads. Whatever is left it was alleged that such advance was "un- of the through rates are the proportions of just, unreasonable, as well as discriminative, the roads south of the Ohio. The rates to in violation of the act to regulate com- interior points north of the Ohio are made merce.” The answer of the railways admit- on the lowest combination rates to the Ohio ted the advance, but denied that it had the plus the rates beyond, and are blanket rates, character and effect charged, but alleged being the same from all shipping points or that, on the contrary, it was reasonable and points of production to the same destinajust and not in violation of law. The an- tion. The rates to the Ohio are to the north swers also specifically justified the advance bank and include the bridge tolls. by the conditions of the market and the There are divisions of rates south of the traffic, including competition, and the costs Ohio between what are termed the "orig. of operating the roads. Testimony was inating" roads, on which the lumber is printaken on the issues thus formed.
cipally manufactured, and the roads interThe Commission sustained the complaint mediate between them and the river. and made the order recited above. 10 In
There had been, from time to time, ters. Com. Rep. 505. The railways refused changes or fluctuations in the rate. Prior to obey. The Commission then instituted to 1894 the roads west of the Mississippi this proceeding in the circuit court of the United States for the eastern district of claimed and were allowed a differential of Louisiana, where further proof was taken 2 cents. This placed at a disadvantage the and a decree rendered which affirmed the shippers east of the Mississippi, and a reorder of the Commission and made it the adjustment of rates was made, and on May order of the court. The roads were also 1, 1894, the rate to Cairo from east of the enjoined from further disobedience to the Mississippi was reduced to 13 cents per 100 order. No opinion was filed. The testimony pounds, the rate in force from we of the was voluminous, and the report and findings Mississippi. This rate remained until Sepof the Commission are very long. They are tember 9, 1899, about five years, when it reported in 10 Inters. Com. Rep. 505, supra. was advanced to 14 cents, and so remained The conclusions of the Commission until April 15, 1903, nearly four years, when
the advance of 2 cents complained of was have resulted in a constant increase in net made.
earnings. This is shown in the tables set The railroads west of the Mississippi forth in our findings of fact (finding 14).” make a certain allowance to the mills which Sufficient cause was not shown, either in have "logging roads," that is, roads by the alleged profit in the lumber business or which logs are hauled from the timber to in the increased cost of operating the roads, the mills. This is called “tap line al for the advance in the rates on lumber. lowance or division.” It ranges 1 to And, answering the contention that the for2 cents per 100 pounds, up to as high as 6 mer rate was not adequately remunerative, cents, and varies, to some extent, according the Commission expressed the view that to the destination of the traffic. The mills "reasonableness in this sense of a rate on east of the river have logging roads also, but a single article of traffic is one of almost appellants make no allowance to them. The insuperable difficulty.” And further, that only exception is the Mobile & Ohio road, the value of the entire property of a road which grants allowances to about four mills “can shed but little, if any, light upon the on its line. The New Orleans & North- question.” The rate on one article might eastern road put in a tap line allowance of reasonably or unreasonably be high and the 2 cents, but other roads east of the river total of rates be remunerative or otherwise: objected, and it was withdrawn. There does But, it was concluded, even if that be a misnot appear to be any reason for such allow- taken view, it was impossible, with any deance west of the Mississippi which does not gree of accuracy, to determine from the voapply east of that river, and it amounts to luminous and conflicting testimony on the a rebate or reduction from the regularly subject introduced in behalf of both parties published rate, and gives an advantage to what was the value of the property emthe mills west of the Mississippi over those ployed by the roads. The Commission east, although the published rates from both thought that the elements to be considered are the same.
in determining the reasonableness of an enThe lumber business had grown from its tire system of rates were "widely variant" inception and was largely and possibly more from those to be considered in determining prosperous than it had been before, but the the reasonableness of a single rate, and exproof does not show that for two or three pressed the elements upon which the latter years preceding the advance the prices of depends to be "the value, volume, and other mill products had materially increased or characteristics affecting the transportation that the profits realized were unusual or ex- of the particular commodity to which it is cessively large.
applied.” The Commission referred to its As to the operating expense of the roads findings of facts as having "many things the Commission said:
disclosed by the evidence” which bore direct“The proof shows increases in wages and ly upon the reasonableness of the particular in prices of material and equipment, but rate in question, and which aided it in arnot in a marked degree for the two years, riving at a correct judgment in respect 1901 and 1902, immediately preceding the thereto, saying that: advance rate. These increases have doubt- "In the first place, the present advanced less added materially to operating expenses, rate is the last (up to date) of a series of but the total annual increases in those ex- advances, and was made by joint or concertpenses are, of course, due only in part to ed action of the carriers. It is claimed by the advances in wages and prices of supplies them that in advancing the rate they acted and equipment. They are attributable in a independently, each for itself, but the proof great measure to the constant growth or shows conclusively that the advance was the enlargement of the business of the roads. outcome of a concert of action and a previNot only has the lumber business of the ous understanding between the companies. roads greatly increased, but their business Through their authorized official representin general. The greater the volume of busi- atives they conferred with each other reness, the greater is the aggregate cost of peatedly as to the making of an advance; conducting it; or, in other words, of oper- recognized the fact that, because of competiating the roads. The total operating ex- tion in common markets between the lumpenses of the roads, as reported by them, ber-producing districts served by them, the have also been much enlarged by the in advance should be from all those districts clusion therein of large expenditures for per- or none, and finally they all promulgated manent improvements.
the advance, to take effect at exactly the
same time for exactly the same amount. "While the operating expenses of the de. This concurrence of action
not fendants have constantly grown, the gross only between the railway
railway companies, earnings from operation have also increased parties defendant in this
this case, and in from year to year to such an extent as to relation to the rates charged by them, but
was participated in by the lumber-hauling | proportions of the former roads. If the roads serving the territories west as well as allowances to the originating roads are uneast of the Mississippi river.”
reasonably large, as they appear to be from The 14-cent rate in force at the date of a distant standpoint, and result in unreathe advance had been maintained nearly sonably low proportions to the other roads, four years, and a still lower rate, 13 cents, this cannot be remedied by an advance in had been maintained for the preceding five the total through rates charged the public. years and four months. And the testimony It is the total rate, and not its proportions, of the officers of the roads was that there which is in issue. was a profit in both rates. The answer also “Although both the net and gross earnadmitted profit, but averred that lumber ings of the defendants have grown from "was not an exceedingly profitable commodi- year to year, the percentages of what are ty.” The Commission said:
reported by the defendants as 'operating “No reason is given or shown why lum- expenses' to earnings have also somewhat ber should be singled out as a commodity increased (table, 'finding 14), and this is upon which an 'exceedingly' large profit urged as showing the necessity for an adshould be earned. A reasonable profit is all vance in the lumber and some other rates. the defendants are entitled to, and the tes. It is to be noted that these operating extimony is far from convincing us that the penses embrace large annual expenditures profit under the 14-cent rate was not rea- for real estate, right of way, tunnels, sonable or would not now be reasonable. bridges, and other strictly permanent imAs stated in our 'Findings of Facts, the provements, and also for equipment, such 14-cent rate appears to be reasonably high as locomotives and cars." when compared with the rates on other com- And the Commission said repairs, whether modities which are at all analogous to lum- to improvement or equipment, were properly ber in respect to value, volume, and the chargeable to operating expenses, but that various conditions affecting the service of expenditures for improvements and equiptransportation. During the period from ments should not "be taxed as part of the 1894 to 1899, while the 13-cent rate was op-current or operating expenses of a single erative, there were large annual increases year, but should be, so far as practicable, in the net earnings of the defendants, and and so far as rates exacted from the public the same was the case from 1899 to 1903, are concerned, 'projected proportionately while the 14-cent rate was operative (find over the future.'” It was said further, if ing 15). During those periods there was such expenditures should be deducted from also a large growth in the tonnage of lum- the annual operating expenses it would be ber hauled by the defendants, and therefore found that the percentage of operating extheir increases in net earnings were in part, penses to earnings had, in some instances, at least, derived from the lumber traffic un- diminished, and in others increased, to no der those rates. Dividends have been de material extent. clared during those periods, and in addition The tenth and eleventh conclusions are considerable surpluses have been reported as follows: (finding 16), and large sums have been in- “10. The general rule is, the greater the vested in permanent improvements or bet- tonnage of an article of traffic, the lower is terments' (finding 14)."
the rate. No rule is more firmly grounded The seventh and eighth conclusions of the in reason or more universally recognized by Commission we give entire, as follows: carriers. It is because of the greater densi.
“The defendants, other than the originat- ty of traffic north of the Ohio river in Cening roads, complain of the small amount of tral Freight Association territory and in revenue or low rate per ton per mile realized eastern territory that rates in general are by them out of their proportions of the materially lower in those territories than through rates. This is due to the large al- in southern territory. The defendants have lowances out of the rates made to the made yellow pine lumber an exception to this originating roads. (See findings 3 and 4.) rule; while the tonnage in general of the Those allowances commenced under the low defendants and lumber tonnage in particuer rates in force prior to the advance, and lar have grown greatly, the lumber rate has raise the presumption that those lower rates, not been lowered, but has been materially minus the allowances, were then considered advanced. Moreover, the testimony is that reasonably remunerative for the remainder a decrease in the rates on traffic in general of the hauls to the Ohio river crossings. As has been going on throughout the United the 2 cents advance goes entirely to the States since the improvements in transroads continuing the transportation on to portation have been put in operation;' here, the Ohio and none of it to the originating again, lumber has been taken from under, roads, the inference is that advance was and deprived of the benefits of, the general made solely with a view of increasing the rule.
“11. As said in Marten v. Louisville & N., L. ed. 309, 20 Sup. Ct. Rep. 209; East TenR. Co. 9 Inters. Com. Rep. 589, and shown nessee, V. & G. R. Co. v. Interstate Comby the proof in this case, 'lumber is an in- merce Commission, 181 U. S. 1, 27, 45 L. ed. expensive freight and only a few other com- 719, 729, 21 Sup. Ct. Rep. 516. And, in any modities furnish to carriers so large a ton- special case of conflicting evidence, a probanage.' The lumber business is constant, tive force must be attributed to the findings . yielding the carriers revenue all the year; of the Commission, which, in addition to no special equipment is constructed or fur- | “knowledge of conditions, of environment, nished for its carriage; it is loaded by the and of transportation relations,” has had shipper and unloaded by the consignee, and the witnesses before it and has been able to where open cars are furnished, the shipper is judge of them and their manner of testifyrequired at considerable expense to equip ing. In the case at bar these considerations them so as to protect the load and the are reinforced by a concurrent judgment of train; there is small risk incident to its the circuit court. transportation, and, in case of accident, the The question is one of the reasonableness damage is insignificant. For these reasons of a rate, and such a question was said to lumber should be given rates which are be one of fact in Texas & P. R. Co. v. Inrelatively low.
terstate Commerce Commission, 162 U. S. “Our conclusion on the whole is that the 197, 40 L. ed. 940, 5 Inters. Com. Rep. 405, advance, April 15, 1903, of 2 cents in the 16 Sup. Ct. Rep. 666; Cincinnati, N. O. & T. Cairo rate (with a corresponding increase P. R. Co. v. Interstate Commerce Commisin the rates to the other Ohio river cross- sion, 162 U. S. 184, 40 L. ed. 935, 5 Inters. ings) was not warranted under all the facts Com. Rep. 391, 16 Sup. Ct. Rep. 700. In in evidence, and that the resultant increased these cases, however, it was declared that rate is unreasonable and unjust. An order the conclusions of the Commission are subwill be issued in accordance with these ject to review if it excluded "facts and cirviews."
cumstances that ought to have been con
sidered." Upon this declaration appellants Mr. Ed. Baxter for appellants.
rely, and justify their invocation that this Messrs. L. A. Shaver, T. M. Miller, Mar- court express and enforce the principles of cellus Green, and Garner Wynn Green for transportation which, they contend, the appellee.
Commission disregarded; and appellants
venture the observation that unless this be Mr. Justice McKenna delivered the opin- done "there will be no settled principles of ion of the court:
law for the guidance of either the CommisCounsel for appellants in his oral argu- sion or of the courts,” and that “the interment made the declaration that it would state railroad companies will be the only not be necessary for this court to open the persons in this country who will not be able pages of testimony contained in the record, to obtain the opinion of the courts upon and says in his supplemental brief:
questions of law which vitally affect their "I do not insist that this court shall read interest.” We think the apprehension is the voluminous testimony contained in these groundless and is demonstrated to be records, but I do most respectfully ask it groundless by the cases cited. In all of to lay down the rules or principles of trans- them legal propositions were reviewed as portation law which are fairly involved in elements in the inquiry of the reasonablethe just determination of these cases, and to ness of a rate. Those cases, however, are remand them to the Commission, to be re- in marked contrast to the pending case. It examined upon the testimony in conformity will be observed that in them the instances with the principles of transportation law were very simple. There was a salient cirto be announced by this court."
cumstance in each of them about which To what, then, shall we resort? How there was no uncertainty. In other words, shall we determine what "principles of it was unconfused by dispute and was not transportation law” were involved? How put to question by a conflict of testimony. determine whether they were recognized and A definite legal proposition unmixed with applied, or denied and rejected, by the Com- | fact was presented, and the only act of mission, and, necessarily, by the circuit judgment exercised by the Commission was court? An examination of the testimony, to reject it. by concession of counsel, is out of the ques- In Cincinnati, N. 0. & T. P. R. Co. v. Intion. And the findings of the Commission terstate Commerce Commission, passing on are made by law prima facie true. This the effect of a shipment on a through bill court has ascribed to them the strength due of lading to give jurisdiction to the Comto the judgments of a tribunal appointed by mission (in which the Commission was suslaw and informed by experience. Louisville tained), the questions presented were the & N. R. Co. v. Behlmer, 175 U. S. 648, 44 power in the Commission to fix a maximum