Louisville, so that section 4 of the act did not apply, that a difference of one cent in the rates fully offset this difference in circumstances and conditions, and that any greater difference rendered the rates from the intermediate points relatively unreasonable in violation of sections 1 and 3, although the commission said that it did not feel competent to say that the rates from the intermediate points, independent of the Nashville rate, were absolutely unreasonable in and of themselves.

The commission has considered the claims of unjust preference in the adjustment of rates as between localities in a great variety of cases from all parts of the country. Thus in 8 I. C. C. R. 608, the subject of the transcontinental rates was considered, and it was ruled that the rates from Denver to San Francisco should not be higher than the rates from Missouri river points to San Francisco. It was found however that the rate on sugar might be higher to Denver from San Francisco than to the Missouri river on the ground that the circumstances and conditions governing the traffic were different when it was carried to Missouri river points than when it stopped at Denver, but that there was nothing shown justifying higher intermediate rates on any article west bound.

In 10 I. C. C. R. 460, decided January 17, 1905, the differential between Wichita and Kansas City and other Missouri river points of fifteen cents against Wichita was ruled excessive. In a former case, 6 I. C. C. R. 586, such a differential was held violative of the long and short haul clause, but that decision was rendered before the construction of the clause by the supreme court. As railroad competition existed at Kansas City, a higher charge to Wichita was justified, but the amount of the differential, fifteen cents per one hundred pounds, on sugar in carloads, was ruled unduly preferential under section 3. The rate from New Orleans to Wichita, forty cents per one hundred pounds, was also ruled to be unreasonable per se.

In 8 I. C. C. R. 503, the rates from St. Louis, Nashville and Chattanooga, to Hampton and Palatka, in Florida, were ruled prejudicial to the Hampton merchants. That while the competition at Palatka justified a lower rate, the difference should not be greater than the local rate from Palatka to Hampton. In 9 I. C. C. R. 160, rates on sugar from New Orleans to Tifton, Georgia, were ruled unduly prejudicial as compared with

rates to other Georgia points. See also on general subject of undue preference to localities, 8 I. C. C. R. 316, and 8 I. C. C. R. 290.

Where an existing relation of rates is found to be unduly preferential as between localities, the discrimination may be corrected by raising one rate or reducing the other, provided of course, the rate when adjusted is reasonable in itself. See 10 I. C. C. R. 456. In this case it was ruled that the existence of water competition between Buffalo and New York did not justify any wider difference in the rates from Saginaw and Buffalo to points on the New York and Long Branch Railroad than existed in the rates from those shipping points to New York.

These and other cases cited under the different topics of this section will illustrate the almost infinite variety of circumstances bearing upon the complex question of the adjustment of rates between localities.

§ 241 (184). Recognition of natural advantages of localities not an unjust preference.-The commission has repeatedly ruled that a town favorably situated for trade, possessing natural advantages therefor, is entitled to the benefits in rates naturally arising from such location. See 5 I. C. C. R. 571, 4 Int. Com. Rep. 230; 10 I. C. C. R. 148 (the Michigan Salt Case). The law requires the regulation of railroad charges according to the ascertained rights of persons and places, and it is not an agency for the regulation of trade by enabling shippers or communities to do business by putting them on even terms with rivals more remote from competitive territory. 6 I. C. C. R. 458, 8 I. C. C. R. 409. The equal right of a competing locality is neither increased nor diminished by municipal subscriptions advanced for the building of a road. 2 I. C. C. R. 147 and 2 Int. Com. Rep. 95.

The refusal to give a through rate is not an unjust discrimination to a locality when the same rule is applied to all towns and the privilege accorded to none, although the refusal may operate prejudicially to one town and favorably to another, as the discrimination must consist in doing for or allowing to one party or place what is denied to another. 1 I. C. C. R. 401, and 1 Int. Com. Rep. 703.

Neither can a railroad be held to discriminate against a town which it does not reach and in whose carrying trade it does not participate. 5 I. C. C. R. 264, and 4 Int. Com. Rep. 65. While the commission has conceded that the recognition of natural advantages of localities is not unjustly preferential, yet it has also ruled that the mere fact that one point is larger than another with more business does not justify a discrimination in its favor, 9 I. C. C. R. 42, and that one of the underlying principles of the act was equality between great and small. See also 2 I. C. C. R. 25 and 2 Int. Com. Rep. 32.

§ 242 (185). Competing cities on opposite banks of rivers.— The principle that a city is entitled to the benefits arising from its location, and that when it enjoys exceptional advantages in one respect it should not therefore be subjected to discrimination in other respects, has been applied in the case of cities situated on the banks of rivers, which railroads must cross by expensive bridges for which an arbitrary toll is charged, or which must be allowed for in an apportionment of through rates. Several such instances have been presented to the commission. Thus the cases of Omaha and Council Bluffs, St. Louis and East St. Louis, Cincinnati and Louisville were presented, though in the latter case the cities are situated on the opposite banks of the Ohio river some distance apart, but are competitors for the business of the same territory.

In the case of Cincinnati, 7 I. C. C. R. 180, complaint was made by the Freight Bureau of the Chamber of Commerce against the higher rates charged from Cincinnati than Louisville to southern points. The commission said that the location of Cincinnati upon the north bank of the Ohio river and the fact that the railroads, leading south must cross that river by expensive bridge charges justified a higher differential from Cincinnati over rates from Louisville on the south bank of the river. As the commission had nothing before it except the fact of distance, it did not pass any opinion as to whether the existing differentials were just or excessive.

In the case of Omaha and Council Bluffs, 7 I. C. C. R. 386, it was ruled that there was no unjust discrimination against Omaha in the fact that rates to points in Iowa were higher for Omaha than for Council Bluffs by the amount of the bridge toll on an expensive bridge over the Missouri river. It was

said in the opinion that all like or group rates were frequently applied to cities considerably further apart than Omaha and Council Bluffs, but that the usage in this regard was not so uniform and well established as to make their application to those cities even prima facie unjust.

In 5 I. C. C. R. 57 and 3 Int. Com. Rep. 701, an East St. Louis miller was ruled entitled to the advantage of his location on the east side of the river as against his competitors on the other side of the river in St. Louis, and a railroad terminating in East St. Louis which allowed St. Louis millers a rebate for the cost of their teams across the bridge to the railroad station was unjustly discriminating against the East St. Louis miller, and the latter was therefore entitled to a reduction of six cents a barrel as to flour handled by him to the station on the rates in force, as long as the railroads bore that amount of the cost of carriage for the St. Louis shippers.

243 (186). Differentials between competitive cities.-The intense competition of modern commerce is illustrated in the complaints made to the commission by the Boards of Trade or other commercial organizations of different cities against alleged discriminations in the relative railroad rates to competing localities. The differentials allowed by the trunk line associations, particularly on the grain traffic from the west to the seaboard, as between the different seaboard cities, have been very exhaustively investigated. Thus in the case of the alleged discriminations against Boston, 1 I. C. C. R. 436 and 1 Int. Com. Rep. 756, the commission ruled in 1888 that the then existing differentials between Boston and New York, being ten cents per hundred pounds on the first and second classes, and five cents per hundred on the four other classes, on traffic from west of Buffalo, were not unreasonable. The conclusion was based upon the greater cost of transportation to Boston, the greater volume of business to and from New York, the competition by water and through lakes and canal and Hudson river to New York, and the geographical and commercial advantages of New York.

Later however in 1892, the commission re-examined the subject and concluded that the differential was excessive and should be made, not by adding an arbitrary sum to the New

York rate, but by adding a percentage, ten per cent, to the New York rate. In this case the commission ruled that the doctrine of estoppel was not applicable, as the commission was not a court, and that the whole spirit and scope of the act made the report and order of the commission in no sense final, except in the sense that the parties may be impressed with the justice of the order and acquiesce therein. 5 I. C. C. R. 166, 3 Int. Com. Rep. 830.

In 1898 the commission, on the complaint of the New York Produce Exchange, investigated the differentials allowed by the railroads of two cents to Philadelphia and three cents to Baltimore below the New York rate on grain, flour and provisions. 7 I. C. C. R. 612. The commission made an exhaustive investigation of the commerce of the three ports, and concluded that the differentials were legitimately based upon the competitive relations of the carriers, and did not result in any unlawful preferences or advantage to Philadelphia or Baltimore over the city of New York. It was contended in this case that the rates were really made by the trunk line associations, but the commission ruled that, so far as the alleged violation of the third section was concerned, this was immaterial.

Still another application was made in 1904, and in an opinion in 11 I. C. C. R. 13, the differentials were again considered, this time relating only t, export trade. The commission ordered a reduction of two conts on flour at Baltimore and one cent at Philadelphia, allowing the existing export differentials otherwise to remain in force. Commissioner Clemens dissented, saying that he did not think that competing carriers could lawfully effect through the agency of the commission a restraint of competition in trade between themselves and the ports, when such action on their own part would be unlawful.

On a complaint of the Saginaw Board of Trade (17 I. C. C. R. 128), it was ruled that the proximity of Detroit and Toledo to the great channels of through transportation and their location on direct through routes where the amount of traffic is very great and the general operating and traffic conditions are favorable, are elements that cannot be ignored by the rate maker and must necessarily tend to lower rates than can be accorded to communities that are removed from these great streams of traffic.