209 U. S.

Argument for Appellant.

Mr. L. A. Shaver and Mr. S. H. Cowan for appellant:

A higher rate on live stock than on its products is contrary to the natural rule or law that the raw-material rate shall not be higher than that on the manufactured article.

A departure from that rule is contrary to public policy, because it involves the destruction of large public interests which have been built up under the rule.

The making of the live-stock rate higher than the product rate is contrary to the almost universal practice of carriers throughout the country under which the rate on live stock is made no higher, but in many instances less, than the rate on the prepared product.

The higher rate on the live stock than on the product is violative of the rule that, other things being equal, value should control or be taken into account in rate making-the article of higher value taking a higher rate than one of lower value.

The changed relation is unlawful because it was made for an unlawful purpose, namely, the building up of the Missouri River markets at the expense of the Chicago markets, and its natural tendency is to that end.

The changed relation is unlawful because it was initiated. by the Chicago Great Western Railway Company solely with a view of promoting its own interest and without regard to the public interest involved.

The changed relation is unlawful because there was no legitimate competition in rates necessitating it—the only prior competition being in the shape of rebates.

The contract of the Chicago Great Western Railway Company with the Missouri River packers is unlawful under the so-called "anti-trust" act because it gives that company a 'monopoly of a part of the trade or commerce among the several States," and, also, because it is "a contract in restraint of trade and commerce among the several States."

The contract is unlawful because it was for the reduction of a rate on the product claimed to be already unreasonably

low and which, that being the case, as reduced, places a burden upon other traffic.

The contract is unlawful because it gives an undue preference to one article of traffic (the product) over another article of traffic (live stock), both articles being in active competition with each other in the markets.

Mr. Cordenio A. Severance, with whom Mr. Frank B. Kellogg and Mr. Robert E. Olds were on the brief, for appellee, Chicago Great Western Railway Company:

Findings of fact by the Circuit Court should be accepted on appeal as witnesses testified in open court. Halsell v. Renfrow, 202 U. S. 291; Shappirio v. Goldberg, 192 U. S. 240; Beyer v. Le Fevre, 186 U. S. 119; Stuart v. Hayden, 169 U. S. 14; Warren v. Keep, 155 U. S. 267; Crawford v. Neal, 144 U. S. 596; Evans v. Bank, 141 U. S. 107.

The contract between respondent Chicago Great Western Railway Company and various packers was proper exercise of its right to compete for business. Cotting v. Godard, 183 U. S. 79; Hopkins v. United States, 171 U. S. 600; Delaware, Lackawanna & Western Ry. Co. v. Kutter, 147 Fed. Rep. 51; Interstate Comm. Comm. v. B. & O. Ry. Co., 43 Fed. Rep. 37; Whitwell v. Continental Tobacco Co., 125 Fed. Rep. 454.

The rate on live-stock products brought about by the Chicago Great Western contract did not involve an undue preference or unjust discrimination within the meaning of the Interstate Commerce law. Interstate Comm. Comm. v. B. & O. Ry. Co., 145 U. S. 276; East Tenn., V. & G. Ry. Co. v. Interstate Comm. Comm., 181 U. S. 1; Texas & Pacific Ry. Co. v. Interstate Comm. Comm., 162 U. S. 197; Interstate Comm. Comm. v. Alabama Midland Ry. Co., 168 U. S. 144; Louisville & Nashville Ry. Co. v. Behlmer, 175 U. S. 648; Interstate Comm. Comm. v. Louisville & Nashville Ry. Co., 190 U. S. 273; D., L. & W. Ry. Co. v. Kutter, 147 Fed. Rep. 51; Interstate Comm. Comm. v. B. & O. Ry. Co., 43 Fed. Rep. 37; Platt v. Le Cocq, 150 Fed. Rep. 391; Interstate Comm. Comm. v. Western & Atlantic

Ry. Co., 93 Fed. Rep. 83; Judson on Interstate Commerce, §§ 175-183.

Neither the Commission nor the court had the right to ignore the relative cost of the service in determining whether the apparent discrimination was undue or unreasonable. Squire v. Michigan Central Ry. Co., 3 I. C. C. R. 521.

The Commission, previous to the amendment of the law in 1906, had no power to fix rates, and hence no power to establish the relation between rates. Cincinnati, N. O. & Tex. Pac. Ry. Co. v. Interstate Comm. Comm., 162 U. S. 184; Interstate Comm. Comm. v. C., N. O. & Tex. Pac. Ry. Co., 167 U. S. 479; Interstate Comm. Comm. v. Alabama Midland Ry. Co., 168 U. S. 145; Southern Pacific Co. v. Colorado Fuel & Iron Co., 101 Fed. Rep. 779.

Findings of fact of the lower court, from which the conclusion necessarily followed that respondents have a decree in their favor, was abundantly supported by the testimony and the law.

Mr. Ed. Baxter for appellees as of record. Mr. Charles A. Clark for intervenor, T. M. Sinclair & Company, Limited. Mr. Frank T. Ransom for intervenor, Union Stock Yards Company of Omaha, Limited. Mr. Stephen S. Brown and Mr. John E. Dolman filed a brief on behalf of intervenor, St. Joseph Stock Yards Company of St. Joseph, Missouri. Mr. S. A. Lynde filed a brief on behalf of appellee, The Chicago & Northwestern Railway Company.

MR. JUSTICE BREWER, after making the foregoing statement, delivered the opinion of the court.

It is unnecessary to define the full scope and meaning of the prohibition found in § 3 of the Interstate Commerce Act-or even to determine whether the language is sufficiently definite to make the duties cast on the Interstate Commerce Commission ministerial, and therefore such as may legally be imposed

upon a ministerial body, or legislative, and therefore, under the Federal Constitution, a matter for Congressional actionfor within any fair construction of the terms "undue or unreasonable" the findings of the Circuit Court place the action of the railroads outside the reach of condemnation.

The complainant, before the Interstate Commerce action, was an incorportated association. The purposes for which it was organized were, as stated in its charter, "to establish and maintain a commercial exchange; to promote uniformity in the customs and usages of merchants; to provide for the speedy adjustment of all business disputes between its members; to facilitate the receiving and distributing of live stock, as well as to provide for and maintain a rigid inspection thereof, thereby guarding against the sale or use of unsound or unhealthy meats; and generally to secure to its members the benefits of coöperation in the furtherance of their legitimate pursuits." Its members were, as found by the Commerce Commission, "engaged in the purchase, shipment and sale of live stock for themselves and upon commission." It was such an association, with members engaged in the business named, that initiated these proceedings and in whose behalf they were primarily prosecuted. While it may be that the proceedings are not to be narrowly limited to an inquiry whether this particular complainant has been in any way injured by the action of the railroad companies, yet that question must be regarded as the one which was the special object of inquiry and consideration. It is true that the Commission subsequently commenced under the Elkins Act an independent suit in its own name, but it was practically to enforce the award made by the Commission after its inquiry into the controversy between the live stock exchange and the railroad companies.

It must be remembered that railroads are the private property of their owners; that while from the public character of the work in which they are engaged the public has the power to prescribe rules for securing faithful and efficient service and equality between shippers and communities, yet in no

proper sense is the public a general manager. As said in Int. Com. Com. v. Ala. Mid. R. R. Co., 168 U. S. 144, 172, quoting from the opinion of Circuit Judge Jackson, afterwards Mr. Justice Jackson of this court, in Int. Com. Com. v. B. & O. R. R. Co., 43 Fed. Rep. 37, 50:

"Subject to the two leading prohibitions that their charges shall not be unjust or unreasonable, and that they shall not unjustly discriminate so as to give undue preference or disadvantage to persons or traffic similarly circumstanced, the act to regulate commerce leaves common carriers, as they were at the common law, free to make special rates looking to the increase of their business, to classify their traffic, to adjust and apportion their rates so as to meet the necessities of commerce and of their own situation and relation to it, and generally to manage their important interests upon the same principles which are regarded as sound and adopted in other trades and pursuits."

It follows that railroad companies may contract with shippers for a single transportation or for successive transportations, subject though it may be to a change of rates in the manner provided in the Interstate Commerce Act-Armour Packing Co. v. The United States, ante, p. 56, and also that in fixing their own rates they may take into account competition with other carriers, provided only that the competition is genuine and not a pretense. Int. Com. Com. v. B. & O. R. R. Co., 145 U. S. 263; T. & P. Ry. Co. v. Int. Com. Com., 162 U. S. 197; Int. Com. Com. v. Ala. Mid. Ry. Co., supra; L. & N. R. R. Co. v. Behlmer, 175 U. S. 648; East Tenn. &c. Ry. Co. v. Int. Com. Com., 181 U. S. 1; Int. Com. Com. v. L. & N. R. R. Co., 190 U. S. 273.

It must also be remembered that there is no presumption of wrong arising from a change of rate by a carrier. The presumption of honest intent and right conduct attends the action of carriers as well as it does the action of other corporations or individuals in their transactions in life. Undoubtedly when rates are changed the carrier making the change must,