before the Commission, and the defendant was entitled to have the reasonableness of the rate considered, in the first instance at least, by the Commission upon a full consideration of all the circumstances and conditions upon which a legitimate order could be based. Especially was this true when there was no person, firm or corporation claiming that he or they had been aggrieved by the disparity in the rates, the party complaining being the Commission itself.

This decision was construed as applying to export rates as well as to import rates. The Commission in its report of 1897 said that the carriers insisted that this decision controlled the rates for inland carriage to the seaboard of traffic for export, and recommended that Congress amend the act giving the Commission power to control inland rates, both import and export, but no such amendment has been enacted.

It is therefore a question of fact whether rates upon export or import traffic as well as those upon domestic traffic are unreasonable and unjustly preferential, but as a matter of law, it is not any violation of the Act for the carrier to make a lower rate to the point of export or from the port of import upon the traffic which is exported or imported than upon that which is locally consumed. See 8 I. C. C. R. 214.

§ 179. Application of the import rule to intermediate points on the line. It was ruled by the Commission, 8 I. C. C. R. 214, after the decision in the Import Rate case, that in the application of export grain rates the carrier should in no case make the rate from any point to the seaboard less than from any intermediate point on the same line, and that a rate on export flour from Minneapolis which was one and one-half cents less than the domestic rate to the port of export, with no corresponding concessions to intermediate millers, was an unlawful discrimination, and that any line participating in any such lower export rate on flour from Minneapolis must make a corresponding reduction on the same article from all intermediate points. See also 8 I. C. C. R. 110, 9 I. C. C. R. 534.

As to the publication of rates on export traffic, see infra, section 6. See also 8 I. C. C. R. 185, and S I. C. C. R. 110. The Commission said in the case first cited that the Import Rate decision did not bar the import and export traffic from the purview of the Commission, although it did require that

conditions abroad as well as at home should be considered, and that the interests of classes, and not of a single class, should be taken into account. See 8 I. C. C. R. 304.

§ 180. Competiton created by carriers.- In the Nashville and Chattanooga Rate case, supra, the Circuit Court of Appeals in an opinion by Judge Taft, 1. c. 424, commented upon the fact that the competition at Nashville was between railroads under the same control, the Louisville & Nashville railroad owning the majority of the stock of the Nashville, Chattanooga & St. Louis Railroad Company, and that but for the restriction of normal competition by the Southern Traffic Association the situation of Chattanooga would win for her certainly the same rates as Nashville. The Supreme Court in its opinion reversing the case, held that the Commission and the Circuit Court and Circuit Court of Appeals had proceeded upon an erroneous construction of the Act, in holding that a preference enforced by controlling competition could be unjust, and that the assertion that the road from Chattanooga to Nashville, growing out of the stock ownership, was in effect the Louisville & Nashville, was necessarily antagonistic to the express finding of the commission that the carriers through Chattanooga and Nashville were placed in position where they must meet the competition to Nashville or abandon all traffic to that point. The court said that it could not undertake the duty of weighing the evidence and determine the issues of fact which the statute required the Commission in the first instance to pass upon, and the case was therefore directed to be re-committed to the Commission for that purpose.

In Commission v. Southern Railway Co., 117 Fed. Rep. 741, the railroad coupany had acquired the ownership of the only road which had previously competed for the business to a certain point, but it was held that this could not effect the question whether its rates unjustly discriminated against such point in favor of another point where competition existed where it affirmatively appeared that the rates to the non-competitive point had not been increased since the purchase of the competing road.

In the later case of Interstate Commerce Commission v. L. & N. Railroad Co., 190 U. S. 273, 1. c. p. 283, 47 L. Ed. 1047, the Supreme Court said that if by agreement or combination

among carriers it was found that at a particular point, rates were unduly influenced by a suppression of competition, that fact would be proper to consider in determining the question of undue discrimination and the reasonableness per se of the rates to such possible competitive points. It must be an actual and not possible competition. See also infra, section 4. It therefore is a question of fact to be determined by the Commission whether the preference is induced by the competition, and whether competition is forced upon the carrier or whether the preference is effected through an agreement or combination stifling competition. But if the preference is compelled by the competition, then it is not unjust, under section 3, though the rates may still be unreasonable per se and on this ground violative of section 1 of the act.

$181. The "Basing Point System" not illegal.-The Commission in several cases had condemned what had been called the "Basing Point System" prevailing in the south, 4 I. C. C. R. 686, 3 Int. Com. Rep. 482 and 6 I. C. C. R. 342; 6 I. C. C. R. 361; 8 I. C. C. R. 142. This system consisted in basing local rates according to the relative distance of the local points by the distance of such points from the competitive points, the rate being ascertained in each case by adding to the through rate to the basing point, the local rate from that point back to the local point, the result being that the local points were given an advantage resulting from their proximity to the basing point in proportion to the degree of such proximity. The Interstate Commerce Commission on the complaint of a merchant of La Grange, Alabama, made an order upon the railroad to desist from charging upon this basing rate to La Grange based upon its rate to Atlanta, the basing point. The Circuit Court sustained the order of the Commission. 102 Fed. Rep. 709. This judgment was reversed by the Circuit Court of Appeals, 108 Fed. Rep. 988, and the judgment of the latter court was affirmed by the Supreme Court, Commission v. L. & N. Railroad Co., 190 U. S. 273, 47 L. Ed. 1047. The latter court said that as it was conceded that the rate on the through freight from New Orleans to Atlanta was the result of competition to Atlanta, there was a resulting dissimilarity of circumstances which prevented any unjust preference in the fact of a higher charge to La Grange and that

there was no just cause of complaint in giving to the local stations the advantage resulting from their proximity to Atlanta, the competitive point, as the same result would have followed if the rate had been fixed at Montgomery, the competitive point nearer to New Orleans, and the local rate fixed from thence on.

§ 182. Grouping of rates. While section 4 of the act prohibits under similar circumstances and conditions the charging of a greater rate for the shorter distance, there is no prohibition against charging the same aggregate rates on like traffic for the longer distance over the same line in the same direction. There is in the act no requirement of mileage apportionment of rates. The Commission in several cases has passed upon the so called "group" or "blanket" rates, that is, the making of the same rates for different points situated on the same line, or on different lines under the same control communicating with a common centre and being the same or approximately the same distance from such centre and possessing substantially the same commercial relations. The principle was applied in 2 I. C. C. R. 540, and 2 Int. Com. Rep. 313, to a large number of mines composing a coal mining district extending across the state of Illinois to points in western Wisconsin, Iowa and Minnesota, the distance by some part of the route being substantially a fair equivalent for the distance from other points and the commercial necessities being substantially the same for all.

In another case the grouping of coal rates at the rate of ninety cents per ton for a distance covering a radius of forty miles around Pittsburgh, Pennsylvania, was sustained. 2 I. C. C. R. 618, 2 Int. Com. Rep. 436. The Commission said that actual undue prejudice or damage of which the rate is the cause, must result to more favorably situated producers to render a group, rate unlawful. In this case the Commission cited the practice under the English Railway & Canal Traffic Act of 1854, where it had been held that the grouping of rates was not unlawful, unless as a matter of fact the effect was to produce an undue preference, and noted that the new English act of 1888 had made specific provision for grouping of rates in conformity with the rule which had been acted on by the Commissioners and the courts. See also 4 1. C. C. R.

533, and 3 Int. Com. Rep. 460, where grouping of mines in the Lehigh anthracite coal region was held to involve no unreasonable disadvantage.

Thus in 4 I. C. C. R. 417, 3 Int. Com. Rep. 400, it was found that the rates on wheat and wheat flour for reasons peculiar to the territory lying west of the Mississippi river and comprising the large portion of Texas, the state of Missouri and a considerable portion of Kansas, were grouped without reference to distance. In 7 I. C. C. R. 92, the subject of grouping of rates was considered in its application to the rates on milk, which was fixed at a uniform rate from all interstate shipping stations along the lines of the New York, Susquehanna & Western Railroad west of the Hudson river to the points of delivery at Weehawken, Hoboken and Jersey City. The Commission said, reaffirming 6 I. C. C. R. 131, that the practice of making one rate for the same product over a very large district and thus equalizing the burdens of transportation to the same market was only justified under special and exceptional circumstances. The circumstances in this case were peculiar, in that the furnishing of an extra perishable article like milk in no greater quantity than is required for daily use in a great city was a business which falls naturally to those producers nearest the city who were able to provide the needed supply. The Commission found under the facts that a uniform or blanket rate from all stations of the road was an unreasonable preference to the more distant stations, and said there should be at least four divisions, extending respectively forty miles, fifty-two miles, one hundred miles, one hundred and ninety miles and stations beyond one hundred and ninety miles, with rates adjusted to the respective groups according to distance. On this application of the grouping of rates to milk traffic, see 2 I. C. C. R. 272, and 2 Int. Com. Rep. 162.

In 5 I. C. C. R. 478, and 4 Int. Com. Rep. 183, "blanket" or group class rates applying upon the Northern Pacific road for a distance of over five hundred and eighty miles were found relatively unreasonable.

In 7 I. C. C. R. 43, group rates of seventy per cent. on second class articles and forty-four per cent. on third class applying within a distance of two hundred and seventy-one miles from Pritchard, Alabama, to Verona, Mississippi, on ship