“The difference in rates on coal oil has been so great that oil has sometimes been shipped from Chicago to San Francisco and back again to Denver.”

“Boots and shoes are carried from Chicago to Colorado common points at $2.05 per hundred, from Chicago to California at $1.50 per hundred. If a jobber in Colorado wishes to ship boots and shoes to California he must pay $3, making a total freight rate of $5.05 from Chicago to California in this way. Cotton-piece goods under commodity rates are shipped from Boston to the Missouri River for 52 cents per hundred, while the rate from the Missouri River to Denver is $1.25 for a haul of one-third the distance. The rate from the Missouri River through Denver to California is only $1.”[[131]]

No wonder a Denver manufacturer said to the Industrial Commission: “My city, Denver, and State, Colorado, and all the territory embraced in the one hundred and fifth meridian section, are violently discriminated against by the railroads and express company. We are denied commercial equality, which forbids the development of our resources. Our freight rates are anywhere from 100 to 300 percent higher per ton per mile than those of our Eastern and Western competitors.”[[132]]

Such conditions tend to force dealers to points on the Missouri River or east of it. The shipper at St. Joseph on the Missouri River, for example, can get goods from Chicago at 80 cents and reship to San Francisco for $1.50, while the Denver shipper must pay $2 from Chicago to Denver and $3 from Denver to San Francisco,—$5 for the Denver shipper against $2.30 for the St. Joseph man.[[133]]

CHAPTER XV.
LONG-HAUL DECISIONS OF THE SUPREME COURT.

The long-haul clause did not realize the intent of its framers. It received a series of shocks from the United States Supreme Court, which produced, if not paralysis, at least a bad case of nervous prostration.[[134]]

At first, believing that the law would be enforced in accordance with its purpose and intent to get rid of unjust and needless discrimination between localities, the Northern and Western roads revised their tariffs in good faith in reference to long and short haul rates, but, later, when they found that the Supreme Court did not intend to enforce the 4th section, they joined the Southern roads in practical disregard of it wherever they found it convenient to do so, and only in a few cases has their disregard been checked.

Within 5 days after the Commission was appointed a large number of railroads applied for relief from the long and short haul clause; and in many cases, on the ground of water competition, etc., relief was given.[[135]] The Commission held that dissimilar circumstances existed under the 4th section in case of competition with water carriers, or railroads not under the Act (foreign railroads and railroads lying wholly within a single State), and in “rare and peculiar cases of competition between interstate railroads, when a strict application of the rule would be destructive of legitimate competition,”[[136]] but ordinarily competition between interstate roads was not regarded as sufficient to relieve them from the 4th section.

In November, 1892, the Commission decided the famous Alabama Midland Case. The complaint was that rates from the East and Northeast to Troy, Ala., were higher than to Montgomery, a longer haul passing through Troy. The railroads pleaded competition at Montgomery. The Commission held that railway competition would not justify departure from the rule of Section 4 of the Interstate Act. Five years later, in November, 1897, the United States Supreme Court sustained the judgment of the Circuit Court and Circuit Appeals Court, overruling the Commission, and held that the existence of railway competition at Montgomery made a substantial difference of circumstances within the meaning of the exception in Section 4.[[137]]

The Court held that competition even of interstate lines is a substantial difference of conditions which may justify a greater charge for a short than for a long haul, but said, “We do not hold that the mere fact of competition, no matter what its character or extent, necessarily relieves the carrier from the restraints of the 3rd and 4th sections.”