Long Haul-Short Haul Rate Discrimination

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LONG HAUL-SHORT HAUL RATE DISCRIMINATION

Long haul-short haul discrimination was one of the most notorious abuses practiced by railroads in the late nineteenth and early twentieth centuries. The practice involved charging a higher rate for a short haul that was included within a longer haul over the same line. Although Congress outlawed this discriminatory practice in Section 4 of the interstate commerce act (1887), the Supreme Court effectively nullified that section in ICC v. Alabama Midland Railway Company (1897). The Court rested its decision on the commission's power to grant exemptions if the long and short hauls did not occur "under substantially similar circumstances and conditions." Sufficient differences existed between hauls to justify departures from Section 4's prohibition. In 1910 Congress revived the prohibition by reenacting the long haul-short haul clause minus the "similar circumstances" clause. Carriers were now forbidden to charge higher rates for shorter (included) hauls regardless of different conditions, although the commission was still authorized to make exceptions. A unanimous Supreme Court sustained this provision to United States v. Atchison, Topeka, & Santa Fe Railway Co. (1914).

David Gordon
(1986)

Bibliography

Sharfman, Isaiah L. 1931–1937 The Interstate Commerce Commission. 4 Vols. New York: Commonwealth Fund.