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U.S. Supreme Court

United States v. Illinois Central R. Co., 263 U.S. 515 (1924)

United States v. Illinois Central Railroad Company

Nos. 40 and 38

Argued November 12, 13, 1923

Decided January 7, 1924

263 U.S. 515


1. When a joint through rate, maintained by a trunk line and an independent connection, though not unreasonable in itself, works chanroblesvirtualawlibrary

Page 263 U. S. 516

undue prejudice to a shipper on the connection in view of lower through rates for the same commodity from competing points in the same territory over the trunk line and its branches and other independent connections, both the trunk line and the other participant in the high rate participate in the unjust discrimination, and may be required by an order of the Interstate Commerce Commission to remove the discrimination. P. 263 U. S. 520.

2. A discrimination in rates is not illegal under § 3 of the Interstate Commerce Act unless it is unjust. P. 263 U. S. 521.

3. The fact that preferential rates on traffic originating from some of its connections are given by a carrier in order to retain and increase its business may relieve it from any charge of favoritism or malice, but it will not justify a resulting unjust discrimination. P. 263 U. S. 523.

4. A difference in rates is not illegal unless shown not to be justified by the cost and value of the respective services rendered and by other transportation conditions. P. 263 U. S. 524.

5. The fact that a rate is inherently reasonable and that a lower rate from competing points is not shown to be unreasonably low does not establish that the discrimination is just. Id.

6. A blanket rate from points on a trunk line was made applicable from points on some only of its connections through shrinkage or absorptions allowed the connecting carriers by the trunk line, with resulting prejudice to a shipper on another connection in the same territory to which the privilege was not extended. Held that the fact that the preferential rate was for the purpose of developing traffic on the main carriers lines, or of securing competitive traffic, did not establish the innocence of the discrimination as a matter of law, but was one only of several proven factors to be weighed by the Interstate Commerce Commission, and that the Commission's finding of unjust discrimination, based on a consideration of them all, was conclusive. Id.

7. Such a decision of the Commission is not an attempted substitution of the Commission's policy of ratemaking for that of the carrier. P. 263 U. S. 525.

8. An order of the Commission that a trunk line and short line, participating in a joint rate, desist from resulting discrimination, but which may be satisfied by raising other competing rates of the trunk line or by reducing its division of the joint rate complained of, is not subject to the objection that it will have a confiscatory effect upon the short line. P. 263 U. S. 526. chanroblesvirtualawlibrary

Page 263 U. S. 517

9. An agreement of a shipper to ship all his products over a railroad is not a continuing assent to the rates in effect when it is made. P. 263 U. S. 527.

10. The power of the Commission to remove unjust discrimination applies to a through rate consisting of a combination of locals, as well as to a joint through rate. Id.

No. 40, decree reversed.

No. 38, decree affirmed.

Appeals from decrees of the district court in suits to enjoin enforcement of orders of the Interstate Commerce Commission. In the first case, there was a perpetual injunction; in the second, the bill was dismissed.

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