some uniform classification rule which shall definitely control the question of mixed carload shipments.

Continuing the statement of facts in reference to the case in hand, it should be further noted that a comparison of the classifications shows that in the Western Classifica

Different elas

tion, in force on business from the Pacific Coast to all points west of the Missouri river, raisins are sification of classed higher than dried fruits, while in the Pa- raisins and cific Coast East Bound Classification, in force on dried fruit. business from the Pacific coast to the Missouri

river and common points, St. Louis and common points, Chicago and common points, New York and common points, etc., California raisins in carload lots are found in the same class with dried fruits. in carloads.

These diversities involved the subject in confusion, as understood by complainants and presented in their proofs. It is a source of infinite misunderstanding that classifications so widely different as the two last above named should be employed on business from the same points, in the same direction over the same lines. Separate tariffs are issued for the business conducted under these classifications, the tariff subject to the Western Classification reading “ Joint Through Tariff between San Francisco, Sacramento," and other Pacific coast points, " and all points on the Union Pacific system east of Ogden in Utah, Wyoming, Nebraska, Kansas; and all points on the Denver Pacific and Kansas Division in Colorado; and all points on the St. Joseph and Grand Island railroad."

Any person having in his hands this tariff would understand that it was applicable as well to Omaha, Atchison, Leavenworth, and Kansas City, as to Denver; but in fact another tariff is used on the business from the same Pacific points to points on the Missouri river, which is subject to the Pacific Coast East Bound Classification; and this is true although the Pacific Coast East Bound Classification contains upon its face a statement of the roads which employ it "in connection with the eastern lines," apparently excluding the idea that it is used on business to the eastern terminals of the roads in question.

It is not surprising, under these circumstances, that complainants failed to obtain an accurate understanding of the rates to Missouri river points for comparison with the rates to Denver.

In the Western Classification dried fruits are rated L. C. L. Class 3, C. L. Class 4; while in the Pacific Coast East-bound Classification the same articles are rated L. C. L. Class 5, L.

C. L. Class 7. Raisins, in the Western Classification, stand L. C. L. Class 2, C. L. Class 3; while in the Pacific Coast Eastbound Classification they stand L. C. L. Class 4, C. L. Class 7.

One effect of applying the Western Classification to this article is to impose a carload rate on raisins higher than is charged on dried fruits. In the Pacific Coast Eastbound Classification raisins in carloads are in the same class with dried fruits in carloads. In less than carloads the classification of raisins is higher than that of dried fruits in both

cases.

It appears from the evidence that the value of California raisins is quite uniformly less than the value of the article sold as California dried fruits. Complainants testify that no distinction in classification between California raisins and dried fruit was enforced on shipments to Denver previous to April 5, 1887. No reason is apparent why the dried fruits of California should not be construed to embrace raisins, except the fact that the classification has the word "raisins" in another place. This interpretation would have entitled the complainants to a carload rate in Class 4 of $1.95 on 20,925 lbs. $408.03.

These irregularities and inconsistencies are not reasonable. In all matters of classification the influence of the Commission will be cast in the direction of clearness and simplicity. Instead of seeking for reasons justifying the existing confusion, persistent efforts should be made to efface it. It is of little consequence how such complications arose. The present question is, what is now reasonable and just in view of the principles established in the act to regulate commerce. Whatever is not so should be corrected as speedily as is practicable.

In the present case the rating of the same kind of commodities in different classes works an injustice which needs only be stated to be seen. Dried grapes are certainly dried. fruit, equally with dried peaches, plums, or apricots; their value, as above shown, is less; and the word "raisins" in the Western Classification (very likely in the first instance applied to the shipments west from Chicago of the imported "raisins" of Europe), has the effect here to impose a burden which is not supported upon any reason adduced in the proofs, and which the Eastbound Classification for through business, deliberately adopted by the same carriers, does not impose.

Returning again to the complainant's statement of complaint, they allege that the rates from San Francisco to

ing rates to terminus and

Denver are greater than the rates from San Francisco to the Missouri river and back again to Denver, by means of which discrimination they aver that they have Intermediate been driven out of the market in the vicinity of rates exceedtheir own home. They introduced evidence in support of this allegation, which they evidently return. believed to be true. This evidence need not be stated in detail, for the reason that it was founded upon a natural confusion growing out of the application of different classifications to the rates in the tariff sheets. It is sufficient

to say that the Commission does not find the fact to be as alleged; but, on the contrary, it appears from a careful examination of all the tariffs, classifications, rules, and circulars in force upon the lines in question that in no case does the rate charged to or from any local station now exceed the rate which would be made by adding the rate to or from the nearest terminal point to the local from such terminal point to the station in question.

It is proper to add that this subject also is one which was taken up by the Commission on its own motion in June, 1887. As the rate sheets were then applied by the defendants, cases existed of the nature here in question. The Commission brought an example of this kind to the attention of the officials of the roads, and inquired whether there was any valid reason why a general rule should not be established in cases where the charge for the long haul is less than the charge for the short haul, providing that the local rate should never exceed the through rate with the local back from the terminus. The traffic managers of the roads in question gave assurances that a general rule of this nature should be established, and expressed their entire willingness to unite therein, and this result has been effected by the issuance of directions to agents, making the principle imperative. The language of the circular issued by the Union Pacific R. Co. is as follows:

"To agents: Announce to shippers that through rates between your station and Pacific coast common points will in no case exceed the current rates between such Pacific coast common points and the Missouri river plus the local rate between your station and the Missouri river."

In the correspondence respecting this matter, which was considerable and which resulted in very material reductions from the original tariff rates at points between Denver and the Missouri river and between Elko and San Francisco, the Commission was exceedingly careful to disclaim the expression of any opinion upon the question of whether a greater sum could in any case be properly charged for a

shorter distance than for a longer upon the trans-continental lines.

The purpose in view was simply the immediate correction of a glaring injustice which enabled an intelligent shipper by a combination of rates to obtain an advantage over one who had less information, but who relied upon the published tariff alone, thus practically making two different rates at the same time to and from the same points in direct contravention of the act to regulate commerce. This was so obviously illegal that the Commission has insisted upon its correction forthwith, not only upon the defendant roads, but wherever it was found to exist, without reference to the underlying question of whether the rates so obtained could be justified under the rule of the fourth section and pending a more careful examination of the general subject which the Commission has had in hand.

The remaining question in the case, and one which is of very grave importance, is the consideration of whether a tariff of rates from San Francisco to Denver higher Section four than the rates charged at the same time from San of act-Long Francisco to Kansas City is justifiable under the and short haul fourth section of the act to regulate commerce. clause. Upon this question the Commission has as yet expressed no opinion whatever, except as the subject is incidentally discussed in the opinion filed June 15, 1887, in the matter of the application of the Louisville & Nashville R. Co. for relief under section 4 of the act to regulate commerce. The rates in force from the Pacific Coast August 9, 1887, were as follows:

It is obvious that the question presented in this naked form involves the entire subject of relative rates as between shorter and longer hauls on all the trans-continental lines; it was so presented by the parties and must be so considered by the Commission.

A brief historical statement is necessary to an understanding of the subject. Ever since the opening of the first transcontinental line it has been customary to make higher rates at intermediate points than at the terminals, the through business having been treated as competitive and the long distance rates being subject to considerable fluctuation. The com. petition, which at the outset, on the traffic from the

Historical statement as to transconti

nental traffic.

Pacific to the Atlantic Coast, was with the Pacific Mail Steamship Co. via Panama and with clipper ships around Cape Horn, was afterwards more active among the various railroads themselves as they were successively constructed. But while each road entered into this competition in making rates for through traffic, they also quite consistently maintained, each for itself, the local rates to points served only by its own line. The opening of the Union Pacific Railway, the Southern Pacific Railway, the Atchison, Topeka and Santa Fe, and the Denver and Rio Grande to Ogden, successively afforded new routes from the Pacific Coast to the city of Denver, and competition was entered into among these lines for business to that point and other common points in its vicinity, as well as to the more distant points on the Missouri river and beyond. The result was that for some two years or more prior to the enactment of the act to regulate commerce the rates from San Francisco to Denver were placed on a competitive basis by all the lines; for example, dried fruits and raisins were carried for $1.30 per hundred, as stated above; the rates named upon the tariff sheets were treated as merely nominal rates, from which rebates were allowed and drawbacks given as seemed necessary to obtain the business. A transcontinental association was at one time formed among the various lines with the object, among other things, of maintaining rates upon a uniform and more profitable basis, but it was not successful, and it finally went to pieces in February, 1886. From that time forward what is known as a “war of rates" was carried on among the various transcontinental lines in respect to all competitive busiThis was conducted with considerable bitterness and involved the continual use of secret rates, rebates, drawbacks, underbilling, and devices of various kinds by which business was taken from one to another as opportunity offered.

An effort was made to put an end to this confusion in the fall of 1886, but without any very substantial success, and the "war" continued until about the time of the taking effect of the act to regulate commerce. The rates which were made 'on long distance business during this period were very low, and, to a considerable extent, unremunerative. There can be no doubt that a great deal of business was hauled at an absolute loss to the carriers; in fact it appears that very little regard was paid to the price obtained, tonnage being the object principally aimed at in respect to competitive freight.

Meanwhile the rates at intermediate points did not participate in these reductions, and the complaint was, in many instances, undoubtedly just, that shippers to and from the focal stations were obliged in some measure to compensate the