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December 10, 1952 Eon. Olin Culberson, Chairman Railroad Commission of Texan Austin, Texas Opinion No. V-1549 Re: Authority of the Rail- road Commi8aion to pre- Bcribe joint or propor- tional rail-barge or truck-barge rates for traffic moving on the Dear Sir: intracoaetal canal. You have requested the opinion of this office a8 to the jurisdiction, if any, of the Railroad Commission to prescribe joint rail-barge or joint truck-barge freight rates applicable to the movement of traffic on the intracoastal canal. The information you furnish reveals that a barge operator on the canal ha8 inquired a8 to the ponsibility of the Commiesion'~ prescribing ouch joint rates 80 that barge operatore may meet the competition of truck and rail operation between points also served by barges. You set out the specific rates that would have to be prescribed by the Commission to accomplish this, a8 followa: "1. That the Commission prescribe motor carrier, or railroad rates, from interior pointe in Texas to points along the lntracoastal canal, .ae proportional rates to be applied in connection with rubsequent move- ment by barge, which rate8 would be leaa than rates of the motor carriers, or rallroadn, for application from the same origin to the #ame destination on the canal on freight that would remain at that point. "2. That the Coauniasionprescribe ratee, via motor, carriers, or railroads, as the cane may be, from points on the intracoaetal canal, to interior points in Texae, as proportional rates on freight which ha8 originated at some point along the canal, moved by barge to another point on the canal, and to be moved therefrom to an in- terior point or points by motor carrier, or by rail, which would be less than would apply by motor carrier, or rail, a6 the case may be, from the same origin to the same destination but which had not had a prior barge move- ment, , Ron. Olin Culbereon, Page 2 (V-1549) “3. That the Commission prescribe rates, via motor carrier, or via railroad, from points in the interior of Texas to points along the canal, and rates from other points along the canalto interior points, on which there has been an intermediate haul by barge. This would involve two sep- arate motor carrier, or railroad movemente, one at origin and the other at destination end, which might be via the same or different carriers. “4. That.the Commission prescribe through rates to be applied from interior points in Texas to interior points in Texas, via motor carrier, or rail, thence via barge, thence via motor carrier or rail; or through rates from points on the canal via barge, thence motor carrier or rail, or vice versa." We think we can beet examine the proposal of the barge operator by quoting directly from his letter accompanying your opin- ion request, which gives a graphic illustration of the problem: II . . . Assume any commodity originating at Houston for destination Riseion, Texas, which Is an interior point lo- cated only a short dietance from the newly opened port of Harlingen. The truck rate from Harlingen to Mission being a short haul is comparatively high. The all rail rate from Houston to Mission ie,'of course, a through rate as is also the truck rate. The spread between the Houston--Mission rail or truck rate and the truck rate from Harlingen to Miee- ion is very thin 80 that if a given commodity moved barge from Houston to Harlingen, truck Harlingen to Mission, there would be no spread from which the barge movement could be compen- Bated. The traffic is, therefore, denied movement in this manner. If the Railroad Commission could, however, prescribe a through rate from Houston to Mission (or vice-versa) for application on a movement partly by truck and partly by water and only so applicable, in connection with which the partici- pating carriers could agree on divisions, then such movement could occur from a competitive standpoint and no question of discrimination would be involved because there would be no such thing a8 a truck line performing its portion of the service between Harlingen and Miesion or in the reverse at a rate less than it would perform the same service between Har- lingen and Mission or Mission and Harlingen, for only shippers between Houston and Mission or Mieeion and Houston would be involved." It appears, therefore, that the barge operation problem is occasioned by an unfavorable competitive position caused by the combination of barge rates with local rail and truck rates to points on the canal, when contrasted with all-rail or all-truck rates Hon. Olin Culberson, Page 3 (V-1549) between the same ultimate points of the traffic movement. We observe initially that the Railroad Commission is a regulatory agency which possesses only such authority as Is conferred by law. Texas & N.O. Ry. Co. v. Houston Belt & Terminal Ry. Co.,
227 S.W.2d 610(Tex.Civ.App. 1950); Foster v. Railroad Commission,
215 S.W.2d 267(Tex.Civ.App. 1948m road Commission v. Red Arrow Freight Lines,
96 S.W.2d 735-x. Civ.App. 1936, error ref.). As such. the Railroad Commission has no authorltv con- ferred by law to regulate barge rates or movement on the intra- coastal canal. See Consolidated Chemical Industries v. Rail- road Commission,
201 S.W.2d 124(Tex.Civ.App. 1947, error ref. n.r.e.) and former Attorney General's Opinion, dated August 22, 1932. Insofar, therefore, a6 you propose to prescribe a rate, either joint or proportional, to be collected for barge movement per se, there is no statutory authority therefor, and the came would be illegal. A different question arises as to your proposal to prescribe proportional rates applicable to rail or truck move- ment either preceding or following barge movement. As indicated in your opinion request, such proportional rates would necessarily be subnormal rates in order to achieve competitive equality in the overall rate to attract traffic now moving all-rail or all- truck. A proportional rate has been defined in Atchison, T. & S.F. Ry. Co. v, United States,
279 U.S. 768,
49 S. Ct. 494(1929), as follows: "A through rate Is ordinarily lower than the com- bination of local rates. When a through rate Is made by combination ox'rates for intermediate distances, the rate for the later link in the shipment is, when lower than the local, spoken of as a proportional rate." For a similar definition, also Bee 9 Am. Jur. 101.6, -Car- riers, sec. 946. It is necessary for proportional rates to be reasonable and non-discriminatory in order for them to be legal. Atchison, T. & S.F. Ry. Co. v. United
States, supra. Hon. Olin Culberson, Page 4 (V-1549) We obserre from your request that the subnormal pro- portional rates which would be applicable to the prior or subse- quent rail or truck movement are not requested by the railroads nor by the truckers, as they patently would not be, since the application of these rates wouldattract traffic from its present all-rail or all-truck movement to movement partially by barge. Furthermore, the movement of traffic all-rail or all-truck be- tween the same ultimate destinations, generally the ports, is now moving on water-compelled rates which are lower than normal rates and were requested by the rails or trucks to meet barge competition. It becomes necessary to inquire whether the imposition of these special subnormal proportional rates on the railroads or the truckers would be discriminatory. We conclude that it would be. It is required by law that rates promulgated by the Rail- road Commission be non-discriminatory. Art. 6474, V.C.S. The rates about which you inquire would in effect grant discriminatory preferences to points located on the intracoastal canal insofar as rail or truck rates to these points are concerned, when contrasted with rail or truck rates for similar distances to points located elsewhere than on the canal. This is specifically set out in your questions. The Court in Railroad Commission v. Galveston Chamber of Commerce,
105 Tex. 101,
145 S.W. 573(1912) made the following per- tinent observations in discussing the discrimination question! "It seems to be in the mind of the attorneys for defendants in error that Galveston is entitled by law to some favor because of its location and water trans- portation. The advantage exists, and that position would not cause adverse discrimination nor favorable indulgence. The benefit of access to the high seas be- longs to the people of all the states, and may be, and no doubt has been used by the Commission for the general good. The bayou affords some competition with the railroads between Houston and Galveston, and, if it were sufficient, might force the railroads to seek lower rates to Galveston; but Galveston would have no right to demand lower rates on the railroads." (Emphasis supplied) In this connection, we emphasize that it does not appear from your request that the railroads and truckers have requested these subnormal rates which they would realize, and which would cause them to lose much of the volume of their through traffic. Hon. Olin Culberson, Page 5 (V-1549) We are of the opinion that the imposition of such rates on the rails and truckers for the purpose you propose would be un- reasonable and discriminatory as to the rails and truckers, and therefore without authority in law. Railroad Commission V. Hous- ton Chamber of Commerce,
124 Tex. 375,
78 S.W.2d 591(1935); Rail- road Commission V. Galveston Chamber of Commerce,
115 S.W. 94- (T~x.c~v.A``. 1908, error ref.). Applying this conclusion to the~specific rate proposals about which you inquire, we hold that the Railroad Commission has no authority to prescribe any of the rail or truck rates set out. SUMMARY The Railroad Commission has no authority to pre- scribe barge rates applicable to the intrastate move- ment of traffic by barge on the intracoastal canal. Former Attorney General's Opinion, dated August 22, 1932. The Railroad Commission may not prescribe propor- tional rail or truck rates applicable to the intrastate movement of traffic, by rail or truck and by barge on the intracoastal canal, if such rail or truck rates are lower than the local or other normal rate applicable to move- ment to the uoint on the canal at which the rail or truck movement ends or begins. Art. 6474, V.C.S. Railroad Commission v. Houston Chamber of Commerce,
124 Tex. 375,
78 S.W.2d 591(1935); Railroad Commiselon v. Galveston Chamber of Commerce, 115 mrrerror S.W. 9 ref.). APPROVED: Yours very truly, E. Jacobson PRICE DANIEL Executive Assistant Attorney General Price Daniel Attorney General BY I!JC:mds
Document Info
Docket Number: V-1549
Judges: Price Daniel
Filed Date: 7/2/1952
Precedential Status: Precedential
Modified Date: 2/18/2017