672
THE GREEN BAG
this no one was willing to give it up, and they continued the war in a vague hope that some day things would be better. But they remembered the beginning of competition for the orange business, and found them selves hoist with their own petard. The situation eventually became intoler able. The orange trust was demoralizing the market, and doing it at a profit; the small growers were being ruined; the con necting roads were carrying oranges without profit; traffic was in a chaotic condition over the initial lines, for their connections had no interest in effecting a prompt return of empty cars, and the result was a constant car shortage; neither had their connections any interest in making prompt deliveries; transportation became slower; great quan tities of fruit spoiled in transit; and the result was litigation, loss, and general dis satisfaction. The Southern Pacific and the Santa Fe" began to think the time had come to put a stop to this general orgy of competition: On October 6th and 7th, 1899, a conference was held at San Francisco, at which it was resolved to resume control of the routing of citrus fruit, by publishing a new joint tariff containing the following provision: "In guaranteeing rates, the absolute and unqualified right of routing beyond its own terminals is reserved to initial carrier giving guaranty." This determination was com municated to all the connecting lines, and was greeted by them with applause. "We are indeed glad," wired the freight traffic manager of the Cleveland, C. C. & St. L. R. Co., "to get this information, as it will protect the revenues of the Eastern roads against the undue competition of the sev eral refrigerator lines, who have heretofore practically sold their business at auction." The car lines and the fruit exchanges were not so well pleased, for obvious reasons. The new rule went into effect January i, 1900. On the 24th and z6th of February, following, two of the disgruntled exchanges commenced proceedings before the Inter
state Commerce Commission, demanding that the Southern Pacific and Santa F6 be required to compete, that the connecting lines in the East be required to compete, and to that end that the old order be re stored. Two years and a quarter were con sumed in obtaining a decision from the com mission; two years and a quarter more in obtaining a review by the circuit court; and a year and a half more in obtaining a rever sal by the Supreme Court of both the pre vious decisions. No rebates have since the first day of January, 1900, been given or received. Ill To a student of the chief economic ques tion of our day, this case is extremely in structive. It illuminates vividly several important phases of the problem, suggests many others, and points its own moral with much emphasis. A few of the conclusions clearly indicated or dimly shadowed it will be interesting to note. They touch the vital points of a very vital matter. First, competition is war. Its ends are victory and the spoils of victory. It gives no quarter, and it cannot be made polite by law. Its weapons are determined solely by the exigencies of battle, and are as far be yond the control of law as are the effects of supply and demand. If rebates are a necessary weapon of competition, no law can suppress them. Second, the law in such cases as the pres ent both requires competition and at the same time prohibits competition. The only means of competition in this case, as in many others, is the rebate, the only alterna tive combination. Both are prohibited by law. Third, in such cases as the present, the only hope for the preservation of commerce lies in a deliberate violation of law by com bination; and the demoralization of com merce is assured by observation of the law of competition. Fourth, in such cases as the present,
