Cornell University Library 
 KF 2344.B36 1915 
 
 Railroad rate regulation, with special re 
 
Cornell University 
 Library 
 
 The original of this book is in 
 the Cornell University Library. 
 
 There are no known copyright restrictions in 
 the United States on the use of the text. 
 
 http://www.archive.org/details/cu31924018726731 
 
RAILROAD 
 
 RATE REGULATION 
 
 WITH SPECIAL REFERENCE TO THE POWERS OF THE 
 
 INTERSTATE COMMERCE COMMISSION 
 
 UNDER THE ACTS TO RECtj^ATE COMMERCE 
 
 BY 
 JOSEPH HENRY BEALE, A. M., LL.B., LL.D. 
 
 ROYALL PEOFESSOH OP LAW IN HAKVABD UNIVERSITY 
 AND SOMETIME DEAN OP THE CHICAGO LAW SCHOOL 
 
 AND 
 BRUCE WYMAN, A. M., LL.B. 
 
 RECENTLY PROPESSOR OF LAW IN HARVARD UNIVERSITY 
 NOW IN CONSULTING PRACTICE AT THE MASSACHUSETTS BAR 
 
 SECOND EDITION 
 
 BY 
 
 BRUCE WYMAN 
 
 NEW YORK 
 BAKER, VOORHIS & CO. 
 
 1915 
 
Copyright, 1906, 
 By JOSEPH HENRY BEALE, Jr., 
 
 AND 
 
 BRUCE WYMAN. 
 
 Copyright, 1907, 
 By JOSEPH HENRY BEALE, Jr., 
 
 AND 
 
 BRUCE WYMAN. 
 
 Copyright, 191B, 
 By BRUCE WYMAN. 
 
PREFACE TO THE SECOND EDITION 
 
 The historical development of the general principles of 
 rate regulation receive such attention throughout the 
 course of this book from the very beginning that there 
 would seem to be no reason for undertaking any summary 
 of them in this place. But in preface to a Second Edition 
 one cannot fail to remark the extraordinary growth in 
 the subject he is treating in the few years which have 
 passed since the First Edition was written. The occasion 
 for the writing of this book originally was the belief that 
 by the passing of the Hepburn Act of 1906 the Interstate 
 Commerce Commission was to have a power in shaping 
 the destinies of the commerce of the country beyond any- 
 thing which would have been possible under the Act to 
 Regulate Commerce of 1887. In writing the First Edition 
 we had only the rulings of the original Conmiission to guide 
 us and the few decisions of the Courts, mostly to the effect 
 that the Act did not justify what was ordered. In this 
 Second Edition we have the many volumes of the Commis- 
 sion making orders as to future conduct, which are supported 
 in most instances by the decisions of the Courts. This 
 Second Edition, covering the past eight years of the activi- 
 ties of the Commission, has several hundred per cent more 
 opinions as the basis for its text than the First Edition, 
 covering the first twenty years. 
 
 The story of the rise of the Commission by successive 
 amendments to the Act is told so fully in the early chap- 
 ters of this Edition that it need not be anticipated here. 
 To one who has had anything to do with directing in con- 
 sultation as counsel the policies to be pursued in answering 
 complaints filed before the Commission, the necessity 
 seems apparent of being conversant with the dates of the 
 additions to the powers of the Commission in order to be 
 
 [iii] 
 
Pkeface to the Second Edition 
 
 able to know what rulings of a former time are no longer 
 of current authority under the Act as it now reads. And 
 it may be pointed out that, in addition to the progress 
 in the extension of the jurisdiction of the Commission 
 by changes in the Act by Congress, there may be seen, by 
 one who is accustomed to look for development in the law 
 by the course of the decisions of those administering it, a 
 continual revelation of the expansion of the scope of the 
 obligations to the public of the carriers conducting trans- 
 portation subject to the Act. And from all this one can 
 attempt with some confidence to prophesy as to the like- 
 lihood of further advance in the authority of the Com- 
 mission, as a lawyer in practice must inevitably be able 
 to do with respect to every new case brought to his atten- 
 tion. 
 
 In the First Edition of this book fully a third of the text 
 was devoted to an exposition of the fundamental obligations 
 of public employment in general and common carriers in 
 particular. At that time there was no general discussion of 
 public employment and its necessary incidents in any book ; 
 but even in the few years which have intervened the general 
 principles of the peculiar law of public calling have become 
 well understood. In 1911 in writing his general treatise on 
 Public Service Companies, the present author made use of 
 this material, note being made in the preface that this 
 matter would be omitted from the Second Edition of the 
 Railroad Rate Regulation when the time came. While in 
 the nature of things there is thus a certain amount of gen- 
 eralization concerning rates which the author has come to 
 regard as fundamental in much the same language in both 
 of these works, this is the only matter which the Second 
 Edition of this book, now devoted exclusively to Railroad 
 Rate Regulation, has in common with the current edition 
 of the Public Service Companies, in which the charging 
 of proper rates is treated along with the many other ob- 
 ligations of public employment. It may also be remarked 
 that the Public Service Companies is based entirely on 
 [iv] 
 
Preface to the Second Edition 
 
 the cases decided in the Courts with hardly a reference to 
 the rulings of the Commissions, while the Railroad Rate 
 Regulation in its present form is based almost entirely upon 
 the decisions of the Commission under the Act, only those 
 decisions of the Courts upon appeal therefrom being in- 
 cluded, unless some point requires particular discussion. 
 
 It may be noted further in explaining the structure 
 of this Second Edition that in the First Edition there 
 was after Book I on the general law of common car- 
 riers, Book II with a general discussion of Rates and Dis- 
 crimination from the court decisions, and finally Book III, 
 having a particular commentary on the Act itself based 
 upon the rulings of the Commission then in existence. 
 This involved not necessarily a duplication of the dis- 
 cussion, but a separation of parts naturally complemen- 
 tary. The basis upon which this new Edition is worked 
 out is, therefore, the consolidation of these separated 
 chapters and the rewriting of them in the light of the 
 mass of cases decided since. Thus the subjects of Rates 
 and Discriminations are brought together under a single 
 analysis of the several elements of the problems therein 
 involved, and it is all remoulded in accordance with the 
 lines indicated by the progress of the administration of 
 the law since the original chapters were written. It should 
 be said, however, that certain chapters stand without struc- 
 tural change as the foundation of the present treatment; 
 this is especially noteworthy in the case of the chapters on 
 Classification of Goods, Discrimination between Localities, 
 Schedules of Rates, and Investigations of the Conunission. 
 In each of these chapters fully four times as many cases are 
 cited in the footnotes as in the original chapters; and these 
 long chapters, so fundamental in any book dealing with the 
 principles governing Railroad Rate Regulation deal with 
 matters to which only a few pages are devoted in the general 
 treatment of Public Service Companies. 
 
 Moreover, there are many topics peculiar to the subject 
 of the regulation of rates by the Commission under the Act, 
 
 [V] 
 
Preface to the Second Edition 
 
 necessarily disposed of far too briefly in the First Edition, 
 which can now receive the fullest possible consideration. 
 Thus two considerable chapters in the first book of this 
 Second Edition are devoted to treating of the scope of the 
 jurisdiction of the Federal Government over the regulation 
 of charges for interstate transportation and the extent of the 
 jurisdiction conferred upon the Interstate Commerce Com- 
 mission over common carriage and other transportation 
 services. When the First Edition was written in 1906 the 
 Commission had just been given power to fix rates for the 
 future, and the power to suspend advances in rates was not 
 granted until 1910; likewise its power to order joint rates, 
 not granted until 1906, was not perfected until 1910. All 
 of the treatment upon the Functions of the Commission in 
 establishing Rates and the Jurisdiction of the Commis- 
 sion over Joint Rates which extends over several chapters 
 in the Second Edition is, therefore, new matter written 
 upon the basis of important decisions, all of which have been 
 decided since the First Edition. The headings throughout 
 are made so specific that the practitioner can easily seize 
 upon the subject which is of interest to him for the time being 
 in the matter he is examining. And after thus placing 
 the business with which he is dealing, the lawyer working 
 up a case will find under the appropriate heading in the 
 Table of Contents the provisions of the Act summarized 
 in the first section of each chapter followed by a statement 
 of the scope of the powers of the Commission. 
 
 Attention may be called to the way in which the contrast 
 is brought out between opposing theories of rate regulation 
 where the conflict in the law is as yet not determined. Thus 
 the policies of basing schedules as a whole upon the original 
 Cost of the plant or upon its present Value are elaborately 
 discussed together, with an indication of the collateral 
 effects of a decision one way or the other. Likewise, whether 
 in dealing with particular rates the Cost of the service or its 
 Value is to be taken as the test, receives treatment to the 
 extent of a chapter upon each. The author does not hesitate 
 [vi] 
 
Preface to the Second Edition 
 
 to let his ovm preference for cost as the basis of regulation ap- 
 pear, although he appreciates the modifications to which this 
 theory must be subjected when put into practice. But at 
 the same time in putting this book at the service of the pro- 
 fession at large, he has felt that care should be taken to 
 set forth fully all that could be said for value as the basis of 
 regulation, subject to such Umitations as must necessarily 
 be recognized. All of these four chapters on Rates in Par- 
 ticular and the Basis of Rate Structure are so largely re- 
 written as to be practically new matter. 
 
 As in the First Edition unusual space is devoted to the 
 details of practice. Practically every case involving a point 
 of practice of importance before the Commission has been 
 treated in the text of the long chapter devoted to Procedure 
 before that tribunal. And ia regard to subsequent Proceed- 
 ings before the Courts every case in which the action of the 
 Commission has been brought in question ia the Courts 
 has been cited in this final chapter. Moreover, in the 
 Appendix there are not merely the statutory provisions, but 
 the Rules of Practice, and along with these Forms of Plead- 
 ings, both before the Commission and the Courts, which have 
 stood the test of litigation. To make room for all this de- 
 tailed matter the extracts from the statutes relating to the 
 State Commissions, which were ta the First Edition have 
 been omitted. Indeed, in his work as counsel for the National 
 Civic Federation in 1913 the writer found that the statutory 
 matter collected on this point alone was sufficient to fill a 
 large volume of its publications, such has been the growth of 
 the Commission Control of Public Utihties in the past few 
 years. 
 
 There remains the pleasant opportunity afforded by 
 the preface to a Second Edition to express the gratitude 
 of the author to the profession at large for the reception 
 which has been accorded to the First Edition. Seldom has 
 a law book been reviewed at such length in periodicals 
 of standing, and aside from the gratification which an 
 author naturally feels from such consideration, he hopes 
 
 [vii] 
 
Preface to the Second Edition 
 
 that he will be found to have profited from justified criti- 
 cisms upon certain details. It rather belongs to the pub- 
 lisher than to the author to point out in advertisement 
 of this Edition that this book has at times been quoted 
 and discussed in ruUngs of Commissions and opinions of 
 Courts and in briefs and arguments. The author trusts he 
 appreciates the obligations which this recognition of the 
 book lays upon him in the making of a Second Edition with 
 the rewriting it has involved. 
 
 To many of his former colleagues upon the faculty of 
 the Harvard Law School with whom the author has talked 
 over most of these questions and particularly to Professor 
 Joseph H. Beale, who was his senior partner in the writing 
 of the First Edition, the author first of all acknowledges 
 his indebtedness. But not less does he appreciate the 
 part in providing him the basis for working out this Edi- 
 tion owed to the discussions which he had had in and out of 
 the class room with thousands of fellow students dm-ing 
 the past ten years. From the point of view of the practi- 
 tioner will be of perhaps greater interest what the writer 
 has gained from experience as a consultant from his con- 
 ferences on the scope of their functions with public officials 
 and regulating bodies and particularly from his service as 
 counsel under railroad executives and traffic officers. In 
 closing, peculiar indebtedness should be acknowledged to 
 Dr. Lawrence B. Evans, formerly head of the Department 
 of History and Public Law in Tufts College now of the 
 Massachusetts Bar, who has done practically all the work 
 of revision on the two chapters on the important questions 
 of Local Discrimination and Court Procedure with the skill 
 and knowledge of an expert in governmental and economic 
 learning. 
 
 B. W. 
 
 Boston, March 1, 1915. 
 
 [ viii ] 
 
PREFACE TO THE FIRST EDITION 
 
 The passage of the Federal Railroad Rate Act of 1906 
 has both emphasized the present importance and added 
 to the future importance of the law governing the regu- 
 lation of railroad rates. In all interstate shipments, which 
 comprise so large a proportion of our railroad traffic, 
 and in the local shipments of a very large number of our 
 States, the maximum rates are now regulated by law; 
 either directly by legislature, or (as is usually the case) 
 by the action of a commission under authority conferred 
 by the legislature. 
 
 It is hardly necessary at this time to call special atten- 
 tion to the practical importance to every member of the 
 community of the charges made by the railroads. To the 
 vast majority these charges are an important part of the 
 cost of their food; it is in the power of the great trunk 
 lines, except where the law can restrain them, by an in- 
 crease of rates to cause a famine as serious as would be 
 caused by a complete failure of the crops. To a great 
 number of our people, on the other hand, — to the great 
 farmers of the interior, to the ranch men of the plains, 
 to the planters of the South, to the manufacturers of the 
 seaboard, and to the millions of their employees who are 
 dependent upon their prosperity, — railroad charges are of 
 greater immediate importance. The railroads, if unre- 
 strained by law, can prosper or can ruin them; they can 
 build up a great and flourishing business, or they can 
 turn an industrious city into a wilderness again. That 
 power such as this should be the subject of legal restraint 
 is inevitable; that the legal qualities and limitations of 
 such restraint should be of the greatest interest to the 
 profession and to the people at large is clear. 
 
 From the earliest times some restraint has been exer- 
 
 [ix] 
 
Preface to the First Edition 
 
 cised over such lines of industry as are of vital interest 
 to the public. The establishment of the King's peace, 
 the protection of the weak against the actual physical 
 violence of the strong, is the fundamental function of 
 government in the modern sense; but of equal importance 
 and of almost equal antiquity is the protection of the 
 common people against the greed and oppression of the 
 powerful. In matters not vital to the life and well-being 
 of mankind the laws of society may be left free to operate, 
 without limitation by the sovereign power; but in all that 
 has to do with the necessaries of life the protection of the 
 sovereign is extended. He protects equally against physi- 
 cal violence and against oppression that affects the means 
 of living. 
 
 In modern times the prevalence in commercial life of the 
 principle of laissez faire has led to the formation of great 
 industrial combinations. Great enterprises have taken 
 the place of small ones, and great industries have been 
 localized at the most convenient parts of the country. 
 All this commercial organization has been based upon the 
 development of railroads; which are necessary not only 
 to bring the raw material to the factory and to distribute 
 the finished product, but also to supply with the neces- 
 saries of life every inhabitant of the country. The result 
 has been the establishment of great and powerful cor- 
 porations in whose hands is the railroad carriage of the 
 country. But as these great combinations of capital have 
 grown up under the law, so their legal rights must be 
 subject to the rights of the whole people; great power 
 brings as its consequence the need of control of that power 
 for the good of the whole people. 
 
 Two ways only can be found to exercise such control. 
 One way, that advocated by the most radical statesmen, 
 is the government ownership and operation of the rail- 
 roads. The other way, which is in fact the conservative 
 method of dealing with the problem, is the control of the 
 rates and practices of the railroads for the public good. 
 [x] 
 
Peeface to the First Edition 
 
 One or the other of these methods must be finally adopted. 
 The conservative method is now on trial. It behooves 
 the lawyers to see to it that it be so intelligently tried, 
 and that the law applicable to the case be so accurately 
 enforced, that we may not be driven perforce to the radical 
 alternative of public ownership. 
 
 The belief that this duty has, almost without warning, 
 been thrust upon the profession, and that the average 
 lawyer has not been prepared either by study or by ex- 
 perience to solve the difficult questions that may arise, 
 has led the authors to prepare and publish this treatise, 
 with the hope that it may help the profession to meet 
 its new and perplexing problems. But in order to render 
 such assistance, it seemed to the authors that a treatise 
 which merely collected and discussed judicial decisions upon 
 railroad rates would be a very imperfect work. The law 
 of railroad rates is based upon the general principles of 
 pubUc-service law and cannot be mastered without an 
 adequate knowledge of that law. The first task of the 
 authors has therefore been to give a sufficient though 
 concise view of such portions of the primary obligations 
 of those in public employments, and particularly of car- 
 riers, as bears essentially on the problem of rates. For 
 this portion of their subject the authors have been pre- 
 pared by special studies during the last ten or twelve 
 years; and though the subject has not been greatly elabo- 
 rated, it is their hope that this first part of the treatise 
 will be found generally useful. 
 
 That portion of the subject which deals more particularly 
 with the fixing of rates has been studied with patient 
 care, and authorities have been sought wherever it was 
 thought they could be fomid. As this is a topic in the 
 law of public employments, the doctrines involved are 
 the same whether the rates in question are those of rail- 
 roads, or of gas or water companies, or of other companies 
 engaged in a public employment. Cases therefore in- 
 volving the rates of these companies have been sought 
 
 [xi] 
 
Pkeface to the First Edition 
 
 and cited. Even including these cases, the judicial de- 
 cisions in which the law governing rates has been involved 
 have been few and almost invariably recent; for the im- 
 portance of the law is new. It has, therefore, seemed 
 best to examine the most important decisions in detail 
 and to give in many cases the very language of the courts; 
 since thus only may the reader have an accurate knowledge 
 of the current doctrine and its probable development. 
 Not that the authors have hesitated to express their own 
 opinions upon novel or difficult points; indeed, they fear 
 that the bar may feel that they have been too free in 
 giving their own views of the law. 
 
 In dealing with rate problems, the authors have cited 
 and examined the decisions of the Interstate Commerce 
 Commission in the same way that they have cited and 
 examined those of the courts. They regard this course 
 of action as most important. Not only in proceedings 
 before the Commission itself, but even in the Supreme 
 Court of the United States, these decisions have been 
 cited as authoritative; and with the increased power 
 given to the Commission by the late Act its opinions 
 will have an increased importance and will contribute 
 most materially to the development of the law. 
 
 Our purpose has involved not merely a study of the 
 common law as it bears upon railroad rates, but an ex- 
 amination as well of the statutory provisions. We have 
 given the full text of the Interstate Commerce Act as it 
 now stands, with full annotations including the decisions 
 of the Commission and of the courts. We have also 
 given such parts of the State acts as were thought to be 
 of use in such a book, our idea being to let a lawyer 
 in any State know what sort of statutes there are in other 
 States. 
 
 This treatise aims to give not merely the law of rail- 
 road rates, but also the practice before the Interstate 
 Commerce Commission. For this purpose those sections 
 of the Act which touch on practice have been annotated 
 [xii] 
 
Prej^ace to the First Edition 
 
 with especial fulness, and in the Appendix have been in- 
 cluded the Rules of Practice of the Commission and a set 
 of approved Forms. This, it is hoped, will assist lawyers 
 who will be engaged for the first time in practice before 
 the Commission by reason of its enlarged powers and in- 
 creased functions. 
 
 A few words of apology must be added. While the 
 authors have been studying this subject for many years, 
 and have had the great advantage of discussing it with 
 successive classes of students during that period, they 
 undertook to write this treatise in a very few months, 
 their idea being that to be of real use to the profession 
 the book should be published as soon as the new federal 
 legislation went into effect. For those who can realize 
 by experience the labor of writing and putting through 
 the press a work of this size and scope in so short a time 
 the errors, typographical and otherwise, will appear not 
 unnatural or altogether inexcusable. Many such errors 
 will be found; we hope however, that nothing of the sort 
 will be so serious as to obscure the meaning of the text, 
 and that the practical usefulness of the book will not be 
 affected. 
 
 J. H. B., Jr. 
 
 B. W. 
 Cambridge, July 1, 1906. 
 
 [xiii] 
 
TABLE OF CONTENTS 
 
 BOOK I 
 JURISDICTION OF THE COMMISSION 
 
 CHAPTER I 
 
 HISTORICAL INTRODUCTION 
 § 1. Public callings and private business. 
 
 Topic A. The Early Policy of Regulation 
 
 § 2. The mediaeval theory of State control. 
 
 3. The regulation of business in the middle ages. 
 
 4. Early differentiation of the public service law. 
 
 5. The history of the carrier. 
 
 6. The position of the wharfinger. 
 
 7. Continuance of State regulation. 
 
 8. Parliamentary regulation of rates. 
 
 9. Restriction of prices in the colonies. 
 
 10. Persistence of the legislative power. 
 
 11. Survival of the common law. 
 
 Topic B. Persistence of State Regulation 
 
 § 12. Introduction of improved highways. 
 
 13. The building of turnpikes. 
 
 14. The era of canal construction. 
 
 15. The coming of the railways. 
 
 16. Transportation facilities as a class. 
 
 17. Alteration in economic conditions. 
 
 18. Development in the common law. 
 
 19. Special restrictions in early charters. 
 
 20. The struggle against encroaching monopoly. 
 
 21. Conservative and radical views of regulation. 
 
 Topic C. State Control of Public Utilities 
 
 § 22. The public services of the present day. 
 
 23. The effect of natural monopoly. 
 
 24. Difficulty of distribution as a factor. 
 
 25. Scarcity of advantageous sites. 
 
 26. Limitation of available time. 
 
 [xvj 
 
Table of Contents 
 
 j 27, The public services a necessity. 
 
 28. Economic limitations create public employment. 
 
 29. Cost of the plant. 
 
 30. Service on a large scale. 
 
 31. Legal privileges accompanying public employment. 
 
 To-pic D. Modern Regulation of Public Services 
 
 ( 32. Necessary regulation of virtual monopoly. 
 
 33. Economic conditions at the present time. 
 
 34. Control of the public services. 
 
 35. Diiferentiation of the public service law. 
 
 36. Unity of the public service law. 
 
 37. The modern programme of State control. 
 
 38. Overshadowing importance of rate regulation. 
 
 39. Present state of the public service law. 
 
 40. Ultimate limitations upon public employment. 
 
 41. State control not socialism. 
 
 CHAPTER II 
 
 STATUTORY REGULATION 
 
 j 50. Provisions of the Act. 
 51. Development of legislative control. 
 
 Topic A. Course of Legislation in England 
 
 i 52. Carriers' liability before 1830. 
 63. The Carriers' Act of 1830. 
 
 54. The Railway and Canal Traffic Act of 1854. 
 
 55. The Railway and Canal Commission. 
 
 56. Scope of its powers. 
 
 57. Increase by later amendments. 
 
 58. Influence of English legislation. 
 
 59. Authority of English decisions. 
 
 Topic B. Regulations in the Stales 
 
 t 60. The Granger rate legislation. 
 
 61. Railroad commissions of former times. 
 
 62. Additions to their powers. 
 
 63. The modern public service commissions. 
 
 64. The spread of the movement. 
 
 65. Extent of their supervision. 
 
 66. Regulation of rates. 
 
 67. Adequacy of service. 
 
 68. Keeping of accounts. 
 
 69. Issue of securities. 
 
 [xvi] 
 
Table of Contents 
 
 Topic C. The Establishment of the Federal Commission 
 § 70. The Interstate Commerce Act of 1887. 
 
 71. Scope of the original provisions. 
 
 72. The immediate amendments found necessary. 
 
 73. The Elldns Act of 1903. 
 
 74. The long and short haul clause. 
 
 75. Limited jurisdiction over rates. 
 
 76. Lack of power over through rates. 
 
 77. The demand for radical changes. 
 
 Topic D. The Strengthening of the Commission 
 
 § 78. The Hepburn Act of 1906. 
 
 79. Effect of these Amendments. 
 
 80. Occasion for the Act. 
 
 81. Installation of private switches. 
 
 82. Regulation of private facilities. 
 
 83. Power to fix maximum rates. 
 
 84. Ordering through routes and rates. 
 
 85. The problem of the industrial railways. 
 
 Topic E. The Elaboration of its Powers 
 
 § 86. The Mann Act of 1910. 
 
 87. The new long and short haul clause. 
 
 88. Establishment of through routes. 
 
 89. Suspension of rate advances. 
 
 90. The Hadley Commission. 
 
 91. The Commerce Court. 
 
 92. The Panama Act. 
 
 93. The Valuation Act. 
 
 Topic F. Recent Decisions Defining Jurisdiction 
 
 § 94. The Abilene Oil case. 
 
 95. The Proctor Gamble case. 
 
 96. The WiUiamette VaUey case. 
 
 97. The Lemon Rates case. 
 
 98. The Baltimore & Ohio Southwestern case. 
 
 99. The Minnesota rate case. 
 
 100. The Shreveport case. 
 
 101. The Intermountain case. 
 
 102. The Pipe Line case. 
 
 103. Inherent limitations upon commission action. 
 
 CHAPTER m 
 
 FEDERAL JURISDICTION 
 
 § 110. Provisions of the Act. 
 111. Scope of power conferred. 
 
 [ xvii ] 
 
Table of Contents 
 
 Topic A. Foreign Commerce 
 
 112. Foreign carriers. 
 
 113. Ocean carriers. 
 
 114. Foreign carriers and discriminations. 
 
 115. Inland portion of foreign commerce. 
 
 116. Requisites of port proportionals. 
 
 117. Export and import rates. 
 
 118. Import rates may be regulated by competition. 
 
 119. Export rates regulated by competition. 
 
 120. Foreign competition justifies only necessary differences. 
 
 121. Limitations upon export and import rates. 
 
 Topic B. Interstate Commerce 
 
 122. What are considered States? 
 
 123. What constitutes commerce between the States? 
 
 124. Traffic in movement between States. 
 
 125. Termini within a single State routed through another State. 
 
 126. Carriage wholly within a State. 
 
 127. Local carriage when through transportation contemplated. 
 
 128. Beginning and ending of interstate transit. 
 
 129. Precedent and subsequent transportation. 
 
 130. Power to fix rates under the Constitution. 
 
 131. Extent of the Federal jurisdiction. 
 
 Topic C. Continuous Carriage under Common Control 
 
 132. Existence of common arrangement. 
 
 133. Continuity of interstate shipment. 
 
 134. Relations with water lines. 
 
 135. What constitutes continuous carriage? 
 
 136. Local carrier participating in through carriage. 
 
 137. Intrastate part of interstate movement. 
 
 138. Line of the distinction. 
 
 139. Device to break through shipment. 
 
 140. Publishing of proportional rates. 
 
 141. Transit privileges under through arrangements. 
 
 Topic D. Conflict between Federal and State Jurisdiction 
 
 142. Power of Congress to regulate. 
 
 143. Effect of action by Congress. 
 
 144. Jurisdiction of State and nation. 
 
 145. Division of jurisdiction normally. 
 
 146. Application of regulating statutes. 
 
 147. Respective powers over service. 
 
 148. Legislation relating to facilities. 
 
 149. State legislation burdening interstate commerce. 
 
 150. Exercise of the Federal supervision. 
 
 151. Scope for State police power. 
 
 [ xviiii ] 
 
Table of Contents 
 CHAPTER IV 
 
 SERVICES SUBJECT 
 
 i 160. Provisions of the Act. 
 161. Continual extension of jurisdiction. 
 
 Topic A. Callings Subject 
 
 I 162. Railroads. 
 
 163. Water lines. 
 
 164. Passenger transportation. 
 
 165. Street railways. 
 
 166. Express companies. 
 
 167. Sleeping car companies. 
 
 168. Parlor car service. 
 
 169. Dispatch lines. 
 
 170. Pipe lines. 
 
 171. Telegraph hnes. 
 
 172. Telephone systems. 
 
 173. Government services. 
 
 Topic B. Incidental Services 
 
 i 174. Transfer. 
 
 175. Wharfage. 
 
 176. Terminals. 
 
 177. Switching. 
 
 178. Lighterage. 
 
 179. Drayage. 
 
 180. Loading. 
 
 181. Refrigeration. 
 
 182. Elevation. 
 
 183. Storage. 
 
 184. Transit privileges. 
 
 185. Transportation services. 
 
 Topic C. Public Profession 
 
 t 186. Who are common carriers. 
 
 187. Commitment to public service. 
 
 188. Nature of public profession. 
 
 189. Extent of the power of regulation. 
 
 190. PubUc raih-oads. 
 
 191. Private railroads. 
 
 192. Industrial railways. 
 
 193. Joint rates. 
 
 194. Tap lines. 
 
 195. Plant facilities. 
 
 196. Line haul. 
 
 197. Intermingled service. 
 
 [xix] 
 
Table of Contents 
 
 Topic D. Public Duty 
 
 ( 198. Public obligation the fundamental principle. 
 
 199. Nature of the public duty. 
 
 200. Limitations upon the profession. 
 
 201. Public duty the basis. 
 
 202. Extent of the carrier's route. 
 
 203. Scope of the service. 
 
 204. Carriage of live stock. 
 
 205. Carriage of rolling stock. 
 
 206. Profession limited to car service. 
 
 207. Special trains. 
 
 208. Forwarders offering consolidated shipments. 
 
 209. Problem of dependent service. 
 
 BOOK II 
 
 LIMITATION OF CHARGES 
 
 PART I— THE SCHEDULE AS A WHOLE 
 
 CHAPTER V 
 
 GENERAL PRINCIPLES GOVERNING COMPENSATION 
 
 I 210. Provisions of the Act. 
 211. General principles governing reasonableness. 
 
 Topic A. Certain Limitalions Fundamental 
 
 I 212. Rates must be fair to the company and to the public. 
 
 213. Limitations within which rates must be made. 
 
 214. Unreasonable regulation universally forbidden. 
 
 215. Value of the services constitutes minimum. 
 
 216. Interests of the companies to be considered. 
 
 217. Interests of the public to be considered. 
 
 218. Accommodation of the interests of both sought. 
 
 219. The complexities of the general problem. 
 
 Topic B. The Schedule taken as a Whole 
 
 ( 220. Reasonableness of the schedule as a whole. 
 
 221. Tests of the reasonableness of a schedule. 
 
 222. Many elements to be taken into account. 
 
 223. Relation of a particular rate to a whole schedule. 
 
 224. Conclusions as to proportionate rate. 
 
 225. Company cannot make unreasonable rates, 
 
 226. Company cannot justify exorbitant profits. 
 
 227. Special circumstances affecting the particular rate. 
 
 [xx] 
 
Table of Contents 
 
 Topic C. The Particular Rates Considered Separately 
 
 § 228. Reasonableness of the separate rates. 
 
 229. Schedule as a whole may throw Ught. 
 
 230. Bearing of tariff as a whole. 
 
 231. Rule of proportionality in sharing costs. 
 
 232. Average cost always modified. 
 
 233. Application of both tests necessary. 
 
 234. Service not worth usual amount. 
 
 235. Service of unusual value. 
 
 Topic D. Bases of Regulation 
 
 § 236. Constitutional limitations upon commission regulation. 
 
 237. Reasonable rates not necessarily profitable. 
 
 238. When fair net earnings left. 
 
 239. Possibility of increase of business. 
 
 240. Making rates compared with levying taxes. 
 
 241. Governmental regulation best for all concerned. 
 
 242. Inherent difficulties of accommodating all tests. 
 
 243. Conflicting authorities still persist. 
 
 CHAPTER VI 
 
 BASIS OF CAPITAL CHARGES 
 
 § 250. Provisions of the Act. 
 251. Various theories as to proper capitalization. 
 
 Topic A. Original Cost 
 
 § 252. Actual investment entitled to return. 
 
 253. Cost of proper facilities. 
 
 254. What is the actual cost. 
 
 255. Cost enhanced by fraudulent contract. 
 
 256. Construction now thought unwise. 
 
 257. Equipment long since superseded. 
 
 258. Portion of plant not now utilized. 
 
 259. Treatment of outside investments. 
 
 260. Allowance for unremunerative betterments. 
 
 261. Contributions made by the State. 
 
 Topic B. Outstanding Capitalization 
 
 § 262. Capitahzation outstanding. 
 
 263. Nominal capitalization. 
 
 264. Stock issues often deceptive. 
 
 265. Bonded indebtedness beyond present values. 
 
 266. Market value of securities. 
 
 267. Securities issued upon reorganization. 
 
 268. Capitalization authorized by public authorities. 
 
 [xxi] 
 
Table of Contents 
 
 j 269. The problem of watered stock. 
 
 270. Property acquired from surplus earnings. 
 
 271. Inquiry into foregone profits. 
 
 272. Existing capitalization hardly excessive. 
 
 ToTpic C. Present Value 
 
 \ 273. Power to set aside a statutory rate. 
 
 274. Constitutional requirements. 
 
 275. Original cost as affecting present value. 
 
 276. Going value. 
 
 277. Franchise values. 
 
 278. Purchase value. 
 
 279. Tax appraisals. 
 
 280. Development cost. 
 
 281. CapitaUzed rights. 
 
 282. Governmental valuations. 
 
 283. Treatment of unearned increment. 
 
 284. Valuation of utilized realty. 
 
 Topic D. Cost of Reproduction 
 
 \ 285. Rule of the Minnesota courts. 
 
 286. Methods of Texas Commission. 
 
 287. The federal courts opposed. 
 
 288. Explanation of the California decisions. 
 
 289. Condition of the plant itself. 
 
 290. What physical reproduction means. 
 
 291. Identical reproduction. 
 
 292. Intervening conditions. 
 
 293. Piecemeal construction. 
 ■ 294. Overhead charges. 
 
 295. Unit prices. 
 
 296. Cost of building up the business. 
 
 CHAPTER VII 
 
 RATE OF RETURN 
 
 I 300. Provisions of the Act. 
 301. Elements in determining a fair return. 
 
 Topic A . Establishment of the Doctrine 
 
 I 302. Establishment of the power to restrict charges. 
 
 303. Rates fixed must not produce a deficit. 
 
 304. Adequate return must be left. 
 
 305. Reasonable return must be left. 
 
 306. Reasonableness of return a judicial question. 
 
 307. Reasonable profit upon each transaction. 
 
 308. Jurisdiction of the Commission. 
 
 309. Status of the companies affected. 
 
 [xxii] 
 
Table of Contents 
 
 Topic B. Fair Rate of Return 
 
 I 310. Interest upon bonds protected. 
 
 311. Rates at which governments can borrow no criterion. 
 
 312. Prevailing rate of interest allowed. 
 
 313. What are reasonable dividends? 
 
 314. Current rate of return. 
 
 315. Fair rate of return. 
 
 316. Current rate the standard. 
 
 317. Reasonable profits sufficiently safe. 
 
 318. Rate of return upon investments in general. 
 
 319. Public service has its peculiar risks. 
 
 Topic C. Policies Respecting Return Allowed 
 
 § 320. General policy for allowing a fair return. 
 
 321. No right to raise rates in prosperous times. 
 
 322. Commercial conditions affecting dividends. 
 
 323. More than current rates of interest not secured. 
 
 324. How interest payable is considered. 
 
 325. Profits divided not operating expense. 
 
 326. Consolidation of interest and dividends. 
 
 327. Reductions ruinous only to certain companies. 
 
 328. Creating a fund for payment of uniform dividends. 
 
 329. Greater profit for better service. 
 
 Topic D. Character of the Enterprise 
 
 § 330. Larger returns in risky enterprises, 
 
 331. Hazards of the business considered. 
 
 332. Whether uniform return upon all property. 
 
 333. Rate of interest dependent upon safety. 
 
 334. Risk by reason of depreciated security. 
 
 335. Rate of return dependent upon locality. 
 
 336. Investment in pubhc service. 
 
 337. Present tendencies in regulation. 
 
 CHAPTER Vni 
 
 OPERATING EXPENSES 
 
 § 340. Provisions of the Act. 
 341. Real cost of operation. 
 
 Topic A. Cost of Performing Service 
 
 § 342. Cost of rendering service. 
 
 343. Net earnings in general. 
 
 344. Salaries paid to officials. 
 
 345. Cost of suppHes. 
 
 346. Unreasonable expenditures. 
 
 [ xxiii ] 
 
Table of Contents 
 
 ! 347. Improvident arrangements. 
 
 348. Estimating labor cost. 
 
 349. Scientific management. 
 
 350. Loans. 
 
 351. Taxes. 
 
 Topic B. Expenditures on the Plant 
 
 t 352. Expense of equipment and maintenance. 
 
 353. Cost of rolling stoclc. 
 
 354. Losses by accident. 
 
 355. Betterments considered as maintenance. 
 
 356. Improvement of existing plant. 
 
 357. Replacement considered as repair. 
 
 358. Permanent improvements should not be annual charge. 
 
 359. New construction should be charged to capital. 
 
 360. New construction not an operating expense. 
 
 361. Betterment out of income. 
 
 Topic C. Depreciation Requirements 
 
 ! 362. Allowance for depreciation. 
 
 363. Types of depreciation. 
 
 364. Authorities refusing to allow depreciation. 
 
 365. Renewal of equipment to offset depreciation. 
 
 366. Fund to repair depreciation. 
 
 367. Capitalization of past depreciation. 
 
 368. Payments into sinking fund. 
 
 369. Amortization of franchise rights. 
 
 Topic D. Operations of Consolidated Properties 
 
 370. Complications in case of systems. 
 
 371. Divisions as integral parts of the whole system. 
 
 372. Unprofitable portions of the line not considered. 
 
 373. Systems considered as wholes. 
 
 374. Treatment of branch lines. 
 
 375. Constituent roads operated under separate charters. 
 
 376. Rent of leased portions. 
 
 377. If rental becomes unjustifiable. 
 
 PART II— THE RATES IN PARTICULAR 
 CHAPTER IX 
 
 COST OF PARTICULAR SERVICE 
 
 i 380. Provisions of the Act. 
 381. Various theories as to rate making. 
 
 [ xxiv ] 
 
Table of Contents 
 
 Topic A. Cost of Service as the Basis 
 
 ( 382. Method of estimating cost of service. 
 
 383. Distribution of the burden. 
 
 384. Respect paid to the cost basis. 
 
 385. Cost of service the basic test. 
 
 386. Costs considered in determining comparative reasonableness. 
 
 387. Limitation upon the law of increasing returns. 
 
 388. Length of haul as a factor affecting a particular rate. 
 
 389. Modification of the principle of the length of haul. 
 
 390. Volume of traffic as a factor affecting the rate. 
 
 391. Increased volume of traffic causing increase of cost. 
 
 Topic B. Method of Determining Particular Costs 
 
 ') 392. Proper proportions of total costs. 
 
 393. Apportionment of separable costs to different services. 
 
 394. Allocation of joint costs. 
 
 395. Basis of the distribution. 
 
 396. Basis of the proportion. 
 
 397. Average rate per unit of service. 
 
 398. Recognition of the ton-mile cost basis. 
 
 399. Ton-mile cost basis not oppressive. 
 
 400. Argument for permitting disproportionate rates. 
 
 401. Authorities opposed to disproportion. 
 
 Topic C. Factors Modifying Average Cost 
 
 j 402. Cost of service insufficient in itself. 
 
 403. Special conditions affecting cost. 
 
 404. Amount of service asked as a factor. 
 
 405. Effect of low average haul. 
 
 406. Local business peculiarly expensive. 
 
 407. Circumstances of particular service. 
 
 408. Divisions in sparsely populated territory. 
 
 409. Cost of handling business. 
 
 410. Proportionate rates always legal. 
 41L Relative reasonableness of rates. 
 
 Topic D. Proper Distribution of Costs 
 
 I 412. Law of decreasing costs. 
 
 413. Cost of service for different systems. 
 
 414. Cost of service for different parts of the same system. 
 
 415. Cost of service estimated from special expenditures. 
 
 416. Distance as a factor. 
 
 417. Amount of traflBc as a factor. 
 
 418. Costs of special service. 
 
 419. Conditions affecting transportation costs. 
 
 420. Current theoFies as to relative rates. 
 
 421. Conclusion as to proportionate rate. 
 
 [ XXV ] 
 
Table of Contents 
 CHAPTER X 
 
 VALUE OF SERVICE RECEIVED 
 
 i 430. Provisions of the Act. 
 431. Rates based upon value. 
 
 Topic A. Value as the Basis 
 
 I 432. What the traffic will bear. 
 
 433. Essential defects in the principle. 
 
 434. Legal limitations peculiarly necessary. 
 
 435. Value of service to shipper. 
 
 436. Value of the goods. 
 
 437. Limit of value of service. 
 
 438. Traffic will continue to move at unfair rates. 
 
 439. Worth of the service to the owners. 
 
 440. Treating the schedule as a whole. 
 
 441. Doctrine hardly applicable to passenger fares. 
 
 Topic B. Rates Reasonable Per Se 
 
 1 442. Carrier entitled to reasonable compensation. 
 
 443. General principles as to reasonableness. 
 
 444. Customary rate presumably reasonable. 
 
 445. Rates unreasonable in themselves. 
 
 446. What makes rates unreasonable? 
 
 447. Current rates for other transportation. 
 
 448. Comparison with other rates. 
 
 449. Evidence inadmissible unless conditions are similar. 
 
 450. Comparison of rates between different localities. 
 
 451. Usual rates govern passenger fares. 
 
 Topic C. Rates Dictated by Competition 
 
 I 452. Rates may be made to meet competition. 
 
 453. Competition as a factor in rate making. 
 
 454. Policy for permitting competitive rates. 
 
 455. Rates low enough to hold business. 
 
 456. Reduction below a remunerative basis. 
 
 457. Standard rate among competing lines. 
 
 458. Competition not a ground for raising rates. 
 
 459. Absence of competition does not justify increase. 
 
 460. No obligation to meet competition. 
 
 461. Competition in passenger fares. 
 
 Topic D. Rates Designed to Equalize Advantages 
 
 > 462. Operation of the principle of equalization. 
 464. Limitations upon the Commission. 
 464. Rates made from a commercial standpoint. 
 [ xxvi ] 
 
Table of Contents 
 
 ! 465. Rates should not equalize differences in value. 
 
 466. Carriers not obliged to equalize disadvantages. 
 
 467. Protection of natural advantage. 
 
 468. No right to build artificial markets. 
 
 469. No equalization of patrons. 
 
 470. Equahzation of advantage as a factor. 
 
 471. Passenger fares slightly affected by this principle. 
 
 CHAPTER XI 
 
 CLASSIFICATION OF COMMODITIES 
 
 I 480. Provisions of the Act. 
 481. Prevalence of classification. 
 
 Topic A . Methods of Classification 
 
 \ 482. The meaning of classification. 
 
 483. Cla.ssification the method of establishing the rate. 
 
 484. The necessity of a proper classification. 
 
 485. Classification a convenience in rate fixing. 
 
 486. History of classification in the United States. 
 
 487. Uniformity of classification attempted. 
 
 488. Classification necessarily imperfect. 
 
 489. Classification not unduly minute. 
 
 490. Extra class divisions. 
 
 491. Commodity rates. 
 
 492. Method of classification. 
 
 493. Interpretation of the classification sheet. 
 
 Topic B. General Principles of Classifying 
 
 \ 494. Influences determining classification. 
 
 495. Adjustment of business to established classification. 
 
 496. Classification according to representations. 
 
 497. Bases of classifying goods. 
 
 498. Justification for making classification on railroads. 
 
 499. Reasonableness of classification requisite. 
 
 500. A proper rate involves reasonableness of classification. 
 
 501. Classification not determined by a particular commodity. 
 
 502. Jurisdiction of the Commission. 
 
 503. Relief from improper classifications. 
 
 504. Low-grade commodities. 
 
 505. High-grade manufactures. 
 
 Topic C. Comparison of Commodiiies 
 
 506. Elements in comparison of commodities. 
 
 507. Like classification for similar goods. 
 
 f xxvii 1 
 
Table of Contents 
 
 § 508. Different classification for dissimilar goods. 
 
 509. Certain commodities compared. 
 
 510. Provisions. 
 
 511. Groceries. 
 
 512. Vegetables. 
 
 513. Lumber. 
 
 514. Bottled goods. 
 
 515. Dry goods. 
 
 516. Difference between commodities. 
 
 517. Raw material and manufactured products. 
 
 Topic D. Differences Between Commodilies Carried 
 
 I 518. Classification based on the package. 
 
 519. Business expensive to handle. 
 
 520. Shipment in form more convenient for handling. 
 
 521. Perishable freight. 
 
 522. Less than usual care required. 
 52.3. Unusual care in handling required. 
 
 524. Classification based on volume of business. 
 
 525. Large volume of traffic in a certain commodity. 
 
 526. Value of the goods as an element. 
 
 527. Different classification of coals. 
 
 528. Bases of comparing values of goods. 
 
 529. Differing value of some kind of freight. 
 
 Topic E. Carload and L. C. L. 
 
 ) 530. Different classification and rating. 
 
 531. When difference in classification is required. 
 
 532. Minimum carloads. 
 
 533. Minimum carload regulations. 
 
 534. Mixed carloads. 
 
 535. Shipment in form permitting greater carload. 
 
 536. Trainloads. 
 
 537. Traffic handled in special trains. 
 
 538. Car loaded by several shippers. 
 
 539. Commission rulings upon special ratings. 
 
 540. Car sizes. 
 
 641. Special equipment not necessary. 
 
 Topix: F. Difference in Rate Between Classes 
 
 \ 542. Principles governing differences between classes. 
 
 543. Low-grade commodities may be carried at low rates. 
 
 544. High-grade commodities should not be overcharged. 
 
 545. Proportionate difference between the classes. 
 
 546. Principles in making commodity rates. 
 
 547. Reasonableness tested by comparison. 
 
 548. Slight differences between similar commodities. 
 
 \ xxviii 1 
 
Table of Contents 
 
 i 549. Discrimination between commodities forbidden. 
 
 550. Difference between values justifies different classification. 
 
 551. Relative differences between ratings. 
 
 CHAPTER XII 
 
 METHODS OF FIXING RATES 
 
 § 560. Provisions of the Act. 
 561. Fixing the particular rate. 
 
 ToTpic A. The Unit of Charge 
 
 § 562. Characteristics of a rate. 
 
 563. Established unit prima facie reasonable. 
 
 564. Classification sheet not varied by representation. 
 
 565. Methods of charging in rate making. 
 
 566. A minimum rate is justifiable. 
 
 567. Basis of minimum weights refund. 
 
 568. Charge for excess over minimum. 
 
 569. All factors enter into a particular rate. 
 
 Topic B. Additional Charges for Special Service 
 
 § 570. General principles as to additional charges. 
 
 571. Propriety of making extra charges. 
 
 572. Freight should cover the entire transportation. 
 
 573. No separate charge for a part of the transit. 
 
 574. Charges for services dui'ing transportation. 
 
 575. Services after carriage is ended. 
 
 576. Storage charges. 
 
 577. Demurrage costs. 
 
 578. Terminal facilities usually included. 
 
 579. Terminals regarded as connections. 
 
 Topic C. Distance Rates and Ike Tort-Mile Rate 
 
 ! 580. Mileage rate tends to decrease inversely. 
 
 581. General standard of comparison the ton-mile. 
 
 582. Equal mileage rates impractical. 
 
 583. Rates in rough proportion to distance normallj'. 
 
 584. Construction of distance rates. 
 
 585. Bases of rate structure. 
 
 586. Different cost of haulage. 
 
 587. Divisions built through a difficult territory. 
 
 588. Factors modifying distance rates. 
 
 589. Comparison of through rates and local rates. 
 690. Carriage in opposite directions. 
 
 591. Passenger fares generally on mileage basis. 
 
 [ xxix ] 
 
Table of Contents 
 
 Topic D. Grouping Stations and Basing Points 
 
 \ 592. The system of grouping. 
 
 593. Distances considered in grouping. 
 
 594. Grouping must be reasonable. 
 
 595. Testing reasonableness of grouping. 
 
 596. Uniform rate to a group of stations. 
 
 597. Commutation rates for suburban passengers. 
 
 598. How basing points are established. 
 
 599. Whether basing points justified. 
 
 600. Determination of base rate. 
 
 601. Extent of power over grouping. 
 
 602. Creation of a market by preferential rates. 
 
 603. Equalizing manufactures in different localities. 
 
 BOOK III 
 
 PREVENTION OF DISCRIMINATION 
 
 PART I— WHAT CONSTITUTES DISCRIMINATION 
 
 CHAPTER XIII 
 
 GENERAL PRINCIPLES RELATING TO DISCRIMINATION 
 
 § 610. Provisions of the Act. 
 611. Development of the rule against discrimination. 
 
 Topic A. Common Law Theories as to Discrimination 
 
 § 612. Nothing but reasonableness once required. 
 
 613. No rule against discrimination as such. 
 
 614. Later rule against unreasonable differences. 
 
 615. Outright discrimination next condemned. 
 
 616. Exclusiveness of the privilege creates discrimination. 
 
 617. Special concessions from established rates. 
 
 618. Complainant charged more than regular rates. 
 
 619. All discrimination forbidden by the better view. 
 
 620. Necessity for the rule against discrimination. 
 
 621. Rule forbidding personal discrimination. 
 
 622. Public injury by discriminations in freight rates. 
 
 623. Policy of the Act. 
 
 Topic B. What Constitutes Statutory Discrimination 
 
 § 624. What amounts to a rebate. 
 625. Prohibition of special rates. 
 
 [ XXX I 
 
Table of Contents 
 
 j 626. Explanation of this policy. 
 
 627. What discrimination is forbidden. 
 
 628. Departure from published rate. 
 
 629. Sanctity of the scheduled rate. 
 
 630. Devices for concealing preference unavailing. 
 
 631. Certain unlawful devices considered. 
 
 632. Schemes to cover discrimination. 
 
 633. Criminal provisions for discrimination. 
 
 634. What intent is necessary. 
 
 635. Civil liability for discrimination. 
 
 Topic C. Established Exceptions to Rule 
 
 j 636. Public wrong in giving free passes. 
 
 637. Passes prima facie discrimination. 
 
 638. Reductions for general classes. 
 
 639. Whether statutory exceptions are exclusive. 
 
 640. Special forms of passenger tickets. 
 
 641. Concession for government business. 
 
 642. Reduction for charitable purpose. 
 
 643. Transportation for the carrier itself. 
 
 644. Sale and delivery of commodities. 
 
 645. Policy of the commodities clause. 
 
 646. Carriage for other companies. 
 
 647. No obligation to grant such concessions. 
 
 648. Collateral results of illegal discrimination. 
 
 Topic D. Other Considerations for Reductions 
 
 \ 649. Other consideration formerly considered dissimilar circumstance. 
 
 650. Whether indefinite considerations can be a basis. 
 
 651. Concessions to those who deal with the carrier. 
 
 652. Fostering the interests of the carrier. 
 
 653. Barter of transportation forbidden. 
 
 654. Inconsistent contracts held unavailing. 
 
 655. Continuing contracts no justification. 
 
 656. Whether executed contracts are different. 
 
 657. Preference in certain services permissible. 
 
 658. What concessions constitute discrimination. 
 
 659. Where service of different character. 
 
 660. Where no public service involved. 
 
 CHAPTER XIV 
 
 FORMS OF ILLEGAL DISCRIMINATION 
 
 670. Provisions of the Act. 
 
 071. The s:imc rate for substantially similar services. 
 
Table of Contents 
 
 Topic A. Concessions lo get Competitive Business 
 
 \ 672. Whether concessions may be made in competition. 
 
 673. Competitive conditions do not justify discriminations. 
 
 674. Reductions to get competitive business illegal. 
 
 675. Concessions to get. shipments from outlying territory. 
 
 676. Such concessions forbidden by later cases. 
 
 677. Shippers making expensive preparations. 
 
 678. Additional services performed for certain shippers. 
 
 679. Concessions to certain localities. 
 
 Topic B. Concessions to Large Shippers 
 
 ) 680. Whether concessions may be made to large shippers. 
 
 681. Unreasonable differences universally forbidden. 
 
 682. Unreasonable differences forbidden by all courts. 
 
 683. Reasonable difference permitted by some courts. 
 
 684. Prevalent doctrine against reduction. 
 
 685. Reductions to large shippers unjust to small shippers. 
 
 686. Services to large and small practically identical. 
 
 687. Differences in amount of shipment. 
 
 688. Reductions to groups of passengers. 
 
 689. Special kinds of passenger transportation. 
 
 Topic C. Rebates to Exclusive Shippers 
 
 I 690. Lower rates formerly made to exclusive shippers. 
 
 691. Such discriminations foster monopolies. 
 
 692. Shippers who agree to give all their business. 
 
 693. Consideration of the cost of serving. 
 
 694. Shippers requiring less service. 
 
 695. Shippers who agree to furnish large quantities. 
 
 696. Charging other shippers more than contract rates. 
 
 697. Competitive rates for through business. 
 
 698. Previous or subsequent haul. 
 
 699. Other methods of holding business. 
 
 Topic. D. Concessions for Special Kinds of Business 
 
 \ 700. Different rates for goods used for different purposes. 
 
 701. Such rates formerly allowed. 
 
 702. Repudiation of this doctrine. 
 
 703. Such differences now held illegal discrimination. 
 
 704. Classification based upon use. 
 
 705. Personality of shipper. 
 
 706. Restricting rates to certain purposes. 
 
 707. When commodities are of different character. 
 
 708. Rates to certain classes of shippers. 
 
 709. Special classes of passengers. 
 
 [ xxxii ] 
 
Table of Contents 
 CHAPTER XV 
 
 INSTANCES OF JUSTIFIABLE DIFFERENCES 
 
 § 710. Provisions of the Act. 
 711. Modification of the rule forbidding different rates. 
 
 Topic A. What are Reasonable Differences 
 
 § 712. What preference is undue and unreasonable. 
 
 713. Differences in transportation cost. 
 
 714. Certain economies in operation. 
 
 715. Like circumstances and conditions. 
 
 716. What circumstances can be considered. 
 
 717. Differences in the conditions of service. 
 
 718. Proportionate differences may be made. 
 
 719. Rates should not be disproportionate. 
 
 Topic B. Shipment in more Convenient Units 
 
 ] 720. Differences in the character of the service. 
 
 721. Shipment in carloads. 
 
 722. Advantages of carload traffic. 
 
 723. Permission to mix carloads. 
 
 724. Lower rates for shipments in bulk. 
 
 725. Shipments in trainloads problematical. 
 
 726. Contracts for regular shipments. 
 
 727. Units in passenger service. 
 
 728. The basis of the differential. 
 
 729. Comparison of bulk and package rates. 
 
 Topic C. Facilities Furnished by Shippers 
 
 j 730. Terminal facilities furnished by shippers. 
 
 731. Undue prejudice in granting allowances. 
 
 732. Unjustifiable differences in rates. 
 
 733. Concessions to shippers in bulk considered. 
 
 734. Railroad without tank cars. 
 
 735. Transportation expenses paid by shipper. 
 
 736. Rental paid on shipper's cars. 
 
 737. Allowance for cars or facilities furnished. 
 
 Topic D. Restriction to Scheduled Allowance 
 
 I 738. Extent of statutory restrictions. 
 
 739. Both rates must be open to all. 
 
 740. Lighterage allowance. 
 
 741. Elevation charges. 
 
 742. Transit privileges. 
 
 743. Terminal allowances. 
 
 744. Allowances for facilities closely scrutinized. 
 
 745. Allowances for facilities still permissible. 
 
 [ xxxiii ] 
 
Table of Contents 
 CHAPTER XVI 
 
 DISCRIMINATION BETWEEN LOCALITIES 
 
 i 750. Provisions of the Act. 
 751. Scope of its principles. 
 
 Topic A. Discriminaiwn at Common Law and under Statute 
 
 i 752. Locality has no right at common law to complain of rates. 
 
 753. Statutory regulation of discrimination between localities. 
 
 754. Lower rate as evidence of unreasonableness of higher. 
 
 755. Weight to be given to such evidence. 
 
 756. Higher rate not necessarily unreasonable. 
 
 757. Reasonableness of rate per se immaterial under statute. 
 
 Topic B. General Principles of Statutory Regulation 
 
 j 758. What discrimination is not unlawful. 
 
 759. Discrimination which is not undue. 
 
 760. Interdependence of rates to various localities. 
 
 761. No vested right in preferential rates. 
 
 762. Discrimination explained by local circumstances. 
 
 763. Distance as a factor in rate making. 
 
 764. Difference between through and local rates. 
 
 765. Railroad rates tend towards a cost basis. 
 
 766. Various systems of making distance rates. 
 
 767. Burden upon the railroad to defend discriminatory rates. 
 
 Topic C. What Constitutes Undue Prejudice 
 
 i 768. Provisions against undue prejudice. 
 
 769. Discrimination resulting from intrastate rates — The Shreveport case. 
 
 770. Discrimination by means of rate adjustments. 
 
 771. Conditions which are not dissimilar. 
 
 772. Dissimilarity of condition is a question of fact. 
 
 773. Discrimination against points off the line. 
 
 774. What constitutes a through line. 
 
 775. Equalization of economic advantages — Economic theory. 
 
 776. Equalization of economic advantages — Legal practice. 
 
 777. Discrimination against the staple industry of a locaUty. 
 
 778. Equalization of values. 
 
 779. Disproportionate charges inconsistent with public duty. 
 
 Topic D. Long and Short Haul 
 
 ( 780. Long and short haul at common law. 
 
 781. Legal justification of lower long-haul rate. 
 
 782. 'jtatutory regulation of long and short-haul rates. 
 
 783. The Fourth Section Amendment of 1910. 
 
 784. General principles governing the Fourth Section. 
 
 [ xxxiv ] 
 
Table o^ Contents 
 
 i 785. Relation between long-haul and short-haul rates. 
 
 780. Interpretation of the Fourth Section. 
 
 7S7. Application of the Fourth Section. 
 
 7SS. Principles governing deviation from the Fourth Section. 
 
 7Sii. Recognition of carrier's right to relief. 
 
 790. Conditions justifying relief from the Fourth Section. 
 
 791. Competition as ground for relief from the Fourth Section. 
 
 Topic E. Competition as a Factor in Rate Making 
 
 ; 792. Competition as a justification for discrimination. 
 
 793. Competition as a factor in rate making. 
 
 794. Incidents of competition. 
 
 795. Commodity and market competition. 
 
 796. How the Commission determines justifiable discrimination. 
 
 797. Competitive rates must be compensatory. 
 
 798. Xon-competitive rates must be reasonable. 
 
 799. Potential competition. 
 
 800. Suppression of competition by agreement. 
 
 801. Suppression of competition by consolidation. 
 
 802. Carrier may refuse to make competitive rates. 
 
 Topic F. What Circumstances Justify Preferential Rates 
 
 i 803. Substantial differences of condition which justify discrimination. 
 
 804. Cost of service as a difference of condition. 
 
 805. Reconsignment arrangements and transit privileges. 
 
 806. Back freights may be lower than outward freights. 
 
 807. What differentials may be allowed. 
 
 808. Systems of rate making based on differentials. 
 
 809. No obligation to make preferential rates. 
 
 PART II— PREVENTION OF DISCRIMINATION 
 CHAPTER XVII 
 
 SCHEDULES OF RATES 
 
 ; 810. Provisions of the Act. 
 811. Scope of its policy. 
 
 Tujiic A. Adhercnci' to Published Schedules 
 
 i 812. What rates must be published. 
 
 813. Effect of scheduling rates. 
 
 814. Terminal and transit charges. 
 
 815. Rules and regulations. 
 
 816. Publication of schedules. 
 
 817. Posting in station. 
 
 [ XXXV ] 
 
Ti^BLE OF Contents 
 
 I 818. Posting distinguished from filing. 
 
 819. Consequences of failing to file. 
 
 820. Any variation herefrom forbidden. 
 
 821. Devices to avoid the section. 
 
 822. Only scheduled rates legal. 
 
 823. Rate wars no excuse. 
 
 Topic B. Departure Jrrnn Published Rates 
 
 i 824. Reparation for improper charges. 
 
 825. Certain technical points discussed. 
 
 826. Criminal liability for violation. 
 
 827. Essentials of the crime. 
 
 828. Requirements relating to fifing. 
 
 829. Conclusive presumption of legaUty. 
 
 830. Of whom filing required. 
 
 831. Provisions cannot have retroative effect. 
 
 832. Schedules working changes in rates. 
 
 833. Invalidity of varied rate. 
 
 834. Stipulations in bills of lading. 
 
 835. Limitations of legal obligations. 
 
 Topic C. Joint Tariffs and Schedules 
 
 ) 836. Meaning of joint tariff. 
 
 837. Making and filing jointly. 
 
 838. What particulars must be published. 
 
 839. Rates based upon combinations. 
 
 840. What combinations are justified. 
 
 841. Whether export rates must be filed. 
 
 842. Divisions and proportional rates. 
 
 843. Parties liable to prosecution. 
 
 Topic D. Form of Schedules Required 
 
 5 844. Clearness of statement. 
 
 845. Necessary fullness of statement. 
 
 846. Methods of stating rates. 
 
 847. Requirement of the Commission. 
 
 848. Consequences of indefinite tariffs. 
 
 849. All pertinent conditions requisite. 
 
 850. Rules for construing schedules. 
 
 851. Specific ratings overrule general. 
 
 CHAPTER XVIII 
 
 INTERCHANGE OF TRAFFIC 
 
 i 860. Provisions of the Act. 
 861. Duties as to connecting services. 
 
 [ xxxvi ] 
 
Table of Contents 
 
 Topic A . Basis on Which Through Service is Undertaken 
 
 i 862. Through service may be undertaken. 
 
 863. Presumptions as to through carriage. 
 
 864. Effect of the Carmack Amendment. 
 
 865. What constitutes connecting service. 
 
 866. Obligation of initial carrier to take to connection. 
 
 867. Obligation of second carrier to accept. 
 
 868. Obligations as to routing. 
 
 869. Fixing the blame for misrouting. 
 
 870. Carriers not compelled to bill through. 
 
 871. Discrimination forbidden where public duty involved. 
 
 Topic B. Requisites as to Through Rates 
 
 i 872. Joint rates must be reasonable. 
 
 873. Limitations upon joint rates. 
 
 874. Nature of a joint rate. 
 
 875. Joint rate lower than combination. 
 
 876. Concurrence of carriers concerned. 
 
 877. Share of separate carrier as evidence. 
 
 878. Through rate although transit is broken. 
 
 879. Policing of transit privileges. 
 
 880. Proportional rates. 
 
 881. Export rates. 
 
 Topic C. Facilities for the Interchange of Bttsiness 
 
 \ 882. Physical connections at common law. 
 
 883. Discrimination between connecting lines. 
 
 884. Extent of these requirements. 
 
 885. Demand for connecting service. 
 
 886. Compulsory interchange of business. 
 
 887. Through arrangements not obligatory. 
 
 888. Carrier might formerly select route. 
 
 889. Present scope of the Act. 
 
 890. Duty to deliver to connections. 
 
 891. Policy of recent legislation. 
 
 Topic D. Compulsory Joint through Rating 
 
 I 892. Jurisdiction of the Commission. 
 
 893. Discretion in its exercise. 
 
 894. Limitations upon the Commission, 
 
 895. The policies involved therein. 
 
 896. Protection from short hauling. 
 
 897. What routes considered circuitous. 
 
 898. Power of the Commission to fix divisions. 
 
 899. How divisions are determined. 
 
 900. Theories of basing divisions. 
 
 901. Constructive mileage. 
 
 [ xxxvii ] 
 
Table of Contents 
 CHAPTER XIX 
 
 EQUALITY OF SERVICE 
 
 § 910. Provisions of the Act. 
 911. Extension of service facilities. 
 
 Topic A. Duly to Render Service 
 
 § 912. General obligation to serve all. 
 
 913. Extent of federal supervision. 
 
 914. Rulings of the Commission. 
 
 915. Different treatment constitutes discrimination. 
 
 916. Scope of present jurisdiction. 
 
 917. Freight embargo as an excuse. 
 
 918. Carriers discriminating against its rivals. 
 
 919. Railroad cutting its own rates for itself. 
 
 Topic B. Provision of Reasonable Facilities 
 
 I 920. Not required by original Act. 
 
 921. Orders concerning freight delivery. 
 
 922. Contracts with grain elevators. 
 
 923. Arrangements with stockyards. 
 
 924. Service at private sidings. 
 
 925. Installing switches now under the Act. 
 
 926. Basis for ordering switch connection. 
 
 927. Any discriminatory treatment forbidden. 
 
 928. Establishment of stations. 
 
 929. Protection of its terminals. 
 
 Topic C. Supply of Equipment 
 
 \ 930. Basis of the duty to supply equipment. 
 
 931. Commission jurisdiction over facilities. 
 
 932. The obligation treated reasonably. 
 
 933. Provision of special equipment. 
 
 934. Demand foreseen although unusual. 
 
 935. Reasonable time to increase facilities. 
 
 936. Carriage through in same car. 
 
 937. Provision of cars in through service. 
 
 Topic D. Disfribution of Equipment 
 
 \ 938. Discrimination in use of cars. 
 
 939. Jurisdiction of the Commission. 
 
 940. Order of preference between shippers. 
 
 941. Where no preference justifiable. 
 
 942. Basis of prorating cars. 
 
 943. Respective requirements compared. 
 
 944. Cars needed by railroads. 
 
 945. Private facilities considered in the apportionment. 
 
 [ xxxviii ] 
 
Table of Contents 
 
 CHAPTER XX 
 
 REGULATION OF FINANCIAL OPERATIONS 
 
 § 950. Provisions of the Act. 
 951. Prohibition of intercorporate relationships. 
 
 Topic A. Supervision of Current Accounting 
 
 § 952. Who must file reports. 
 
 953. Extent of powers over accounts. 
 
 954. Methods of amortization accounting. 
 
 955. Depreciation cannot be capitalized. 
 
 956. Writing off superseded property. 
 
 957. Supervision of fixed charges. 
 
 958. Permanent improvements out of capital. 
 
 959. Absorbing earnings in improvements. 
 
 Topic B. Separation of Interstate Accounts 
 
 § 960. Apportionment of interstate business. 
 
 961. Methods of the division. 
 
 962. Bases of the proportion. 
 
 963. Apportionment of total expense. 
 
 964. Inherent difficulties of the problem. 
 
 965. Comparisons with interstate rates. 
 
 966. Supremacy of the federal system. 
 
 967. Discrimination produced by State action. 
 
 Topic C. Valuation of Carrier's Properties 
 
 \ 968. The tests of the Supreme Court. 
 
 969. The inquiries of the Congress. 
 
 970. The investigations of the Commission. 
 
 971. Necessity for official valuations. 
 
 972. Valuation based upon investment. 
 
 973. Present value the basis of valuation. 
 
 974. Whether market values should be considered. 
 
 975. Consideration given to the entrepreneur. 
 
 976. Details of the present valuation. 
 
 977. Finality of this valuation. 
 
 Topic D. Prohibition of Intercorporate Relationships 
 
 \ 978. Restraint of trade at common law. 
 
 979. Certain decisions support pooling. 
 
 980. Pooling forbidden by the Commerce Act. 
 
 981. Meaning of the Sherman Act. 
 
 982. Extent of the Clayton Amendments. 
 
 983. Provisions of the Panama Act. 
 
 984. Examples of pooUng arrangements. 
 
 985. Certain agreements held valid. 
 
 [ xxxix 
 
Table or Contents 
 
 BOOK IV 
 POWERS OF THE COMMISSION 
 
 CHAPTER XXI 
 
 SUPERVISORY POWERS OP THE COMMISSION 
 
 I 990. Provisions of the Act. 
 991. Power to investigate rates. 
 
 Topic A. Bases of Commission Regulation 
 
 i 992. Regulation of rates by the State. 
 
 993. Ways in which power is exercised. 
 
 994. Power to pass on reasonableness of rates. 
 
 996. Duty of the courts to pass on reasonableness of rates. 
 
 996. Fixing rates by administrative commissions. 
 
 997. Nature of their powers. 
 
 998. Delegation of rate-making power. 
 
 999. Limitations of the principle. 
 
 Topic B. Administrative Functions of the Commission 
 
 1 1000. Nature of the Commission. 
 
 1001. Functions of the Commission. 
 
 1002. Basis of its powers. 
 
 1003. Limitations upon its jurisdiction. 
 
 1004. Extent of its supervision. 
 
 1005. Visitorial powers in general. 
 
 1006. What supervision implies. 
 
 1007. Status of the Commission. 
 
 Topic C. Authority to Investigate Conditions 
 
 < 1008. Investigation by the Commission. 
 
 1009. Limitation of its scope. 
 
 1010. Investigation by federal Conunission. 
 
 1011. Extent of its powers. 
 
 1012. Powers of State Commissions. 
 
 1013. Jurisdiction of the State courts. 
 
 1014. Testimony compelled in quasi-judicial proceedings. 
 
 1015. Summoning witnesses in general investigations. 
 
 Topic D. Proceedings on Its Own Motion 
 
 \ 1016. Investigation by the Commission on its own motion. 
 
 1017. Investigation as a result of filing new tariff. 
 
 1018. Investigation by order of Congress. 
 
 [Xl] 
 
Table of Contents 
 
 1019. Procedure upon such investigation. 
 
 1020. Due process of administration. 
 
 1021. Jealous protection of substantial rights. 
 
 1022. Constitutional limitations upon the federal government. 
 
 1023. Recognition of these by the Commission. 
 
 CHAPTER XXII 
 
 QUASI-JUDICIAL FUNCTIONS OF THE COMMISSION 
 
 § 1030. Provisions of the Act. 
 1031. Orders of the Commission. 
 
 Topic A. Power to Order Changes 
 
 § 1032. Power to fix rates originally denied. 
 
 1033. Decision of the Supreme Court. 
 
 1034. Powers established by later Amendments. 
 
 1035. No disturbance of reasonable rates. 
 
 1036. Basis of reasonable rates. 
 
 1037. JurisdictiongJ. limitations upon rate revision. 
 
 1038. Working within legal bounds. 
 
 1039. How the Commission now views its function. 
 
 Topic B. Reparation for Past Miscondibct 
 
 § 1040. Nature of the rate. 
 
 1041. Reparation in connection with relief. 
 
 1042. Concurrent jurisdiction over relief. 
 
 1043. Attitude of the courts. 
 
 1044. Things outside Commission jurisdiction. 
 
 1045. Limitations upon its powers. 
 
 1046. Basis of Commission jurisdiction. 
 
 1047. Extent of its powers. 
 
 Topic C. Jurisdiction of the Commission 
 
 § 1048. Recovery based upon published rate. 
 
 1049. Effect of misquoted rate. 
 
 1050. Recovery of scheduled rate through legal proceedings. 
 
 1051. State courts deprived of jurisdiction. 
 
 1052. Scheduled rates conclusive in the courts. 
 
 1053. No reparation for misquoted rate. 
 
 1054. Liability for negligence in quoting rates. 
 
 1055. Limitations of this policy. 
 
 Topic D. Findings of the Commission 
 
 § 1056. Reparation. 
 1057. Bases of award by reparation. 
 
 [xli] 
 
Table of Contents 
 
 § 1058. Extent of the jurisdiction. 
 
 1059. Damages to business generally. 
 
 1060. Nature of the order. 
 
 1061. How far party may reopen case. 
 
 1062. Finding of Commission does not work an estoppel. 
 
 1063. The two-year rule. 
 
 1064. New petition may be filed. 
 
 1065. Reopening a case for rehearing. 
 
 CHAPTER XXIII 
 
 PROCEDURE BEFORE THE COMMISSION 
 
 § 1070. Provisions of the Act. 
 1071. Conduct of the proceedings. 
 
 Topic A. Proceedings before the Commission 
 
 § 1072. Procedure in regular course. 
 
 1073. Scope of the proceedings enlarged. 
 
 1074. Course of the pleadings. 
 
 1075. Raising the question of jurisdiction. 
 
 1076. Individual rate during general inquiry. 
 
 1077. Statement of the wrong. 
 
 1078. Sufficiency of the complaint. 
 
 1079. Answers in defense. 
 
 1080. Amendment to complaint. 
 
 1081. Responsiveness to pleadings. 
 
 1082. Application for relief. 
 
 1083. Informal complaint. 
 
 1084. Complainant not coming with clean hands. 
 
 1085. Scope of the doctrine. 
 
 Topic B. Parties to the Proceedings 
 
 § 1086. Person interested as complainant. 
 
 1087. Requisites in this regard. 
 
 1088. Complaint by an association. 
 
 1089. Board of Trade. 
 
 1090. State Railroad Commission. 
 
 1091. Intervening parties. 
 
 1092. Proper parties defendant. 
 
 1093. Necessary parties defendant. 
 
 1094. Who are parties in interest. 
 
 1095. Defendants must have an interest. 
 
 1096. One of several joint parties. 
 
 1097. Liabilities in through carriage. 
 
 1098. Who entitled to reparation. 
 
 1099. As between consignor and consignee. 
 
 [xlii] 
 
Table of Contents 
 
 Topic C. Order of Procedure 
 
 I 1100. Default for failure to proceed. 
 
 1101. Dismissal of the complaint. 
 
 1102. Stay of proceedings. 
 
 1103. Satisfaction of complaint. 
 
 1104. Conditions of granting reparation. 
 
 1105. Scrutiny of reparation agreements. 
 
 1106. Parties given opportunity to be heard. 
 
 1107. Hearing duly notified indispensable. 
 
 1108. Requisities as to hearings. 
 
 1109. Course of the proceedings. 
 
 1110. Limitation of actions. 
 
 1111. Dismissal when order unnecessary. 
 
 Topic D. Evidence and Burden of Proof 
 
 i 1112. Rules of evidence. 
 
 1113. Res adjudicata. 
 
 1114. Insufficient grounds for findings. 
 
 1115. Proof of damage required. 
 
 1116. Presumptions from voluntary continuance. 
 
 1117. Admissions by making changes. 
 
 1118. Privilege against self-crimination. 
 
 1119. Adverse interest of witnesses not to be considered. 
 
 1120. Testimony on both sides should be introduced. 
 
 1121. Production of books and papers. 
 
 1122. Burden of establishing case. 
 
 1123. Burden of justifying advances. 
 
 CHAPTER XXIV 
 
 JUDICIAL REVIEW OF COMMISSION ACTION 
 
 1130. Provisions of the Act. 
 
 1131. Further provisions. 
 
 Topic A. Basis of Judicial Determination 
 
 1132. Jurisdictional limitations upon Commission action. 
 
 1133. The nature of the Commission. 
 
 1134. The functions of the Commission. 
 
 1135. Preliminary action by the Commission necessary. 
 
 1136. Certain consequences of this doctrine. 
 
 1137. Appeal from the Commission to the courts. 
 
 1138. Jurisdiction of the Federal courts. 
 
 1139. Constitutional and statutory limitations distinguished. 
 
 r xliii 
 
Table of Contents 
 
 Topic B. Grounds of Invalidity of Commission Action 
 
 \ 1140. Action under an unconstitutional statute. 
 
 1141. Action not within the statute. 
 
 1142. Action in violation of constitutional guarantees. 
 
 1143. Action after an inadequate hearing. 
 
 1144. Action upon mistaken conclusions of law. 
 
 1145. Action contrary to evidence. 
 
 1146. Limitation to evidence in the record. 
 
 1147. Conclusiveness of Commission findings. 
 
 Topic C. Procedure for Determining Validity of Commission Action 
 
 i 1148. Temporary restraining order. 
 
 1149. Injunction against enforcement. 
 
 1150. Balance of equities. 
 
 1151. Appeal from the district court on petitions for injunctions. 
 
 1152. Sufficiency of averments. 
 
 1153. Necessary and proper parties. 
 
 1154. Venue of enforcement suits. 
 
 1155. Introduction of new evidence. 
 
 Topic D. Enforcement Proceedings in the Courts 
 
 • 1156. Functions of the Commission in the enforcement of the Act. 
 
 1157. Judicial process in aid of proceedings before the Commission. 
 
 1158. Judicial action necessary to the enforcement of orders. 
 
 1159. Parties to enforcement suits. 
 
 1160. Orders unenforceable because of defects. 
 
 1161. Power of the courts to modify orders of the Commission. 
 
 1162. Sufficiency of averments. 
 
 1163. Recovery on a reparation order of the Commission. 
 
 1164. Findings' of the Commission as evidence. 
 
 APPENDICES 
 
 APPENDIX A 
 
 The Act to Regulate Commerce as Amended 
 
 APPENDIX B 
 
 District Court Jurisdiction Act 
 
 APPENDIX C 
 
 Compulsory Testimony and Immunity Acts 
 
 [xliv] 
 
Table of Contents 
 
 APPENDIX D 
 
 Elkins Act 
 
 APPENDIX E 
 
 Expediting Act 
 
 APPENDIX F 
 
 Clayton Anti-Trust Act 
 
 APPENDIX G 
 Rules op Practice 
 
 APPENDIX H 
 
 Forms of Procedure 
 
 [xlv] 
 
TABLE OF CASES CITED 
 
 [References are to sections] 
 
 Absorption of Switching Charges 
 
 at St. Louis, 195. 
 Acme Cement Co. v. C. & A. R. R., 
 
 128. 
 Acme Cement Plaster Co. v. C. G. 
 
 W. Ry., 587, 699. 
 Acme Cement Plaster Company 
 
 V. C. & N. W. Ry., 375. 
 Acme Cement Plaster Co. v. L. 
 
 S. & M. S. Ry., 450, 547, 601, 
 
 776, 899. 
 Acme Cement Plaster Co. v. 
 
 Union Pacific R. R., 1074. 
 Adams Exp. Co. v. Crovinger, 
 
 226 U. S. 491, 33 Sup. Ct. 148, 
 
 and cases cited, 864. 
 Advances in Freight Rates, Re 
 
 Proposed, 214, 226, 235, 387, 
 
 391, 435, 438, 457, 459. 
 Advances in Freight Rates, In re, 
 
 240, 311, 328, 345, 351, 360, 
 
 415, 544, 546, 968, 970, 971, 
 
 972, 973, 1017. 
 Advance in Rates Cases of 1910, 
 
 283, 349, 440, 912, 969, 970, 
 
 1003. 
 Advance in Rates, Eastern Case, 
 
 162, 220, 266, 271, 308, 318, 
 
 320, 345, 348, 349, 361, 377, 
 
 417, 467, 858, 971, 974, 1019, 
 
 1023, 1044, 1081, 1117, 1123. 
 Advances in Rates, Western Case, 
 
 220, 262, 263, 283, 327, 329, 
 
 363, 366, 391, 432, 439, 440, 
 
 469, 776, 1001, 1006, 1023, 
 
 1094, 1101, 1123, 1133, 1137. 
 Advances in Barley, 594, 600, 753, 
 
 793,898,1017, 1039,1123. 
 
 Advance in Class & Commodity 
 
 Rates, 502, 894. 
 Advances in Class Rates, 1075, 
 
 1108. 
 Advances in Demurrage Charges, 
 
 179, 183, 530, 625, 753, 758, 
 
 803. 
 Advances in Rates from Chicopee, 
 
 897. 
 Advances in Rates on Grain, 791, 
 
 1060, 1123. 
 Advances in Rates on Lemons, 
 
 484. 
 Advances in Rates on Locomotives 
 
 and Tenders, 495, 503, 566, 
 
 794, 1108, 1123. 
 Advances on Apples, 492, 600. 
 Advances on Cattle and Sheep, 
 
 389. 
 Advances on Cement, In re, 229, 
 
 600, 1122. 
 Advances on Coal, In re, 898, 1123. 
 Advances on Coal to Lake Ports, 
 
 228, 231, 243, 309, 381, 384, 
 
 394, 432, 440, 499, 502, 776, 
 
 1006, 1095. 
 Advances on Cooperage, 467, 776. 
 Advances on Cotton, 115. 
 Advances on Cotton Seed Products, 
 
 593, 832. 
 Advances on Flaxseed, 385, 466, 
 
 467, 503, 793. 
 Advances on Fruits and Vegetables, 
 
 1074. 
 Advances on Hay, 385, 967. 
 Advances on Hops, 385, 393. 
 Advances on Ice, 177, 770. 
 Advances on Iron and Steel Arti- 
 cles, 1123. 
 
 [ xlvii i 
 
Table of Cases Cited 
 
 [References 
 
 Advances on Ejiitting Factory 
 
 Products, 768, 793. 
 Advances on Livestock, 382, 385, 
 
 584, 1108, 1110. 
 Advances on Logs, 1107. 
 Advances on Lumber, 513, 539, 
 
 1060. 
 Advances on Manganese Ore, 116, 
 
 625, 676, 761, 771, 792, 850. 
 Advances on Milk, 551. 
 Advances on Oil, 770. 
 Advances on Potatoes, 181, 253, 
 
 453, 590, 738, 764, 933, 1123. 
 Advances on Vehicles, 654. 
 Advance Thresher Co. v. Orange 
 
 & N. W. R. R., 1100. 
 Alabama Coal Operators' Ass'n 
 
 V. So. Ry., 583, 768. 
 Alabama G. S. Ry. Co. v. Mc- 
 
 Clesky, 145. 
 Alabama Lumber & Export Co. 
 
 V. P. B. & W. R. R., 1049, 
 
 1053, 1058. 
 Alabama & V. Ry. Co. v. Missis- 
 sippi R. R. Comm., 809. 
 Alabama & V. Ry. v. Morris, 149. 
 Alabama & V. R. R. Co. v. Rail- 
 road Comm., 699, 805. 
 Alan Wood Iron & Steel Co. v. 
 
 P. R. R., 177, 562, 575, 679, 
 
 738, 1082. 
 Albree v. B. & M. R. R., 385, 
 
 1006, 1023. 
 Aldrich v. So. Ry., 1854. 
 Alexander v. S. P. Co., 848. 
 Algert Co., C. H., v. D. & R. G. 
 
 R. R., 835, 868, 914. 
 Alleged Unlawful Charges for 
 
 Transportation of Vegetables, 
 
 Re, 845. 
 Alleged Unlawful Rates, Re, 644, 
 
 805, 815. 
 Alleged Unlawful Rates for Cotton, 
 
 Re, 879. 
 Alleged Unlawful Transportation 
 
 Charges, Re, 1102. 
 Alleged Violation of Act, In re, 763, 
 Allun V. Lackneles, 188. 
 
 [ xlviii ] 
 
 are to sections] 
 
 Allen V. Louisville N. A. & C. R. 
 
 R., 1093. 
 Allen V. Oregon Ry. & Nav. Co., 
 
 446, 715, 870. 
 Allentown Portland Cement Co. 
 
 V. P. & R. Ry., 773. 
 AUman v. Adams Express Co., 
 
 881. 
 Allowances for Transfer of Sugar, 
 
 Re, 740, 846. 
 Allowances to Elevators, In re, 574. 
 Allowances to Elevators by U. P. 
 
 R. R., In re, 182, 741. 
 Alpena Electric Co. v. Alpena, 305. 
 Alpha Portland Cement Co. v. 
 
 B. & 0. Ry., 767, 770. 
 Alpha Portland Cement Co. v. 
 
 P. R. R., 817, 839. 
 
 Alphons Custodis Chimney Con- 
 struction Co. V. S. Ry., 630. 
 
 American Agricultural Chem. Co. 
 V. B. & A. R. R. Co., 125. 
 
 American Bankers' Ass'n v. Ameri- 
 can Express Co., 919, 928. 
 
 American Brake Shoe & Foundry 
 Co. V. A. G. S. R. R., 533, 833. 
 
 American Central Insurance Com- 
 pany V. C. & A. Ry., 694. 
 
 American Cigar Co. v. P. & R. 
 Ry., 791, 1117. 
 
 American Coal Co. v. B. & 0. Ry., 
 786, 808. 
 
 American Creosote Works v. I. 
 
 C. R. R., 630, 654, 940. 
 American Express Co. v. U. S., 
 
 639, 826. 
 American Insulated Wire & Cable 
 
 Co. v. C. & N. Ry., 459, 783, 
 
 804. 
 American National Live Stock 
 
 Ass'n V. S. P. Co., 386. 
 American Sugar Refining Co. v. 
 
 D., L. & W. Ry., 1135, 1160. 
 American Tie & Timber Co. v. 
 
 K. C. S. Ry. Co., 651, 930. 
 American Union Coal Co. v. 
 
 Railway Co., 1135. 
 American Warehousemen's Ass'n 
 
Table of Cases Cited 
 
 [References are to sections] 
 
 V. Illinois Central R. R., 
 
 814, 815. 
 Ames V. Union Pac. Ry., 370. 
 Ames Bros. Co. v. Rutland R. 
 
 R., 628, 826. 
 Anaconda Copper Mining Co. v. 
 
 C. & E. R. R., 536, 704, 725, 
 
 1110. 
 Anacostia Citizens' Ass'n v. B. & 
 
 0. Ry., 129, lV9, 794, 804. 
 Anadarko Cotton Oil Co. v. A., 
 
 T. & S. F. Ry., 214, 405, 416, 
 
 446, 793, 1060, 1107, 1116, 
 
 1122. 
 Anderson, Clayton & Co. v. C, 
 
 R. I. & P. Ry. Co., 576, 738, 
 
 742, 819. 
 Andrews Soap Co. v. Pittsburgh, 
 
 C. & St. L., 489, 496. 
 Andrus v. Columbia & 0. Steam- 
 boat Co., 47 Wash. 333, 92 
 
 Pac. 128, 130, 867. 
 Andy's Ridge Coal Co. v. S. Ry., 
 
 466, 707, 769, 778, 795, 967. 
 Anthony v. P. & R. Ry., 542. 
 Anthony Salt Co. v. Missouri 
 
 Pacific Ry., 491, 508, 516. 
 Appalachia Lumber Co. v. L. & N. 
 
 • R. R., 584, 764, 874, 1094. 
 Application of Southern Pacific 
 
 Co., In re, 758, 768, 784, 789. 
 Arabol M'fg Co. v. S. B. Ry., 784, 
 
 837. 
 Aransas Pass Channel & Dock Co., 
 
 V. G. H. & S. A. Ry., 113, 114, 
 
 124, 163, 198, 599, 753, 768, 
 
 776, 830, 874, 895. 
 Arizona Corp. Com. v. A., T. & 
 
 S. F. Ry., 584, 586. 
 Arkansas Fertilizer Co. v. St. L., 
 
 1. M. & S. Ry., 126, 598, 704, 
 706, 793, 799, 1110. 
 
 Arkansas Fuel Co. v. C, M. & 
 
 St. P. Ry., 1053. 
 Arkansas Pass Channel & D. Co. 
 
 V. G. H. & S. A. Ry., 816. 
 Arkansas R. R. Rates, In re, 344, 
 
 354, 395, 400, 963. 
 
 Arlington Heights Fruit Exch. v. 
 A., T. & S. F. Ry., 573, 584. 
 
 Arlington Heights Fruit Exchange 
 V. S. P. Co., 349, 402, 581, 
 592, 601, 931, 1148. 
 
 Armour Car Lines v. So. Pac. Co., 
 635, 825, 1105. 
 
 Armour Packing Co. v. United 
 States, 631, 633, 634, 655. 
 
 Ashbum, City of, v. G. S. & F. Ry., 
 1092. 
 
 Ashland, City of, v. N. Y. C. & 
 H. R. Ry., 786. 
 
 Ashland Fire Brick Co. v. So. Ry., 
 773, 776. 
 
 Asphalt & Asphaltum, Rates on, 
 533. 
 
 Associated Jobbers of Los Ange- 
 les V. A., T. & S. F. Ry., 573. 
 
 Associated Wholesale Grocers v. 
 Mo. P. R. R., 448, 709, 1072, 
 1075. 
 
 Association of Union Made Gar- 
 ments M'frs V. Chicago & N. 
 W. R. R., 503. 
 
 Atchison, City Council of, v. Mo. 
 Pac. Ry., 768. 
 
 Atchison v. St. L., I. M. & S. Ry., 
 1080, 1104. 
 
 Atchison, T. & S. F. Rv. v. Denver 
 & N. 0. R. R., 927. 
 
 Atchison, T. & S. F. Ry. v. Holmes, 
 1051. 
 
 Atchison, T. & S. F. Ry. v. Inter- 
 state Commerce Commission, 
 463, 771, 1148. 
 
 Atchison, T. & S. F. Ry. v. Su- 
 perior Refining Co., 1043. 
 
 Atchison, T. & S. F. Ry. v. U. S., 
 181, 539, 552, 573, 633, 634, 
 721, 789, 827, 1134, 1139. 
 
 Atlanta Journal Co. v. S. A. L. 
 Ry., 759, 793. 
 
 Atlanta & W. P. R. R., Re, 828, 
 1008. 
 
 Atlantic C. L. Ry. v. Florida, 232, 
 398. 
 
 Atlantic C. L. Ry. v. Georgia, 161. 
 
 [xlix] 
 
Table of Cases Cited 
 
 [References 
 
 Atlantic C. L. Ry. v. Geraty, 934. 
 Atlantic C. L. Ry. v. I. C. C, 
 
 1020, 1022, 1142, 1143, 1145, 
 
 1151, 1152. 
 Atlantic C. L. Ry. v. Macon Gro- 
 cery Co., 1136. 
 Atlantic C. L. Ry. v. Mazursky, 
 
 147. 
 Atlantic C. L. Ry. v. No. Car. 
 
 Corp. Comm., 131, 891. 
 Atlantic C. L. Ry. v. Riverside 
 
 MiUs, 1158. 
 Atlantic C. L. Ry. v. Wharton et 
 
 al., 149. 
 Atlantic Packing Co. v. Am. Exp. 
 
 Co., 928. 
 Atlantic & P. Ry. v. U. S., 370. 
 Atlantic & P. Tel. Co. v. Western 
 
 U. Tel. Co., 867. 
 Attorney-General v. Chicago & 
 
 N. W. Ry., 996. 
 Audley Hill & Co. v. S. Ry., 799, 
 
 1116, 1117. 
 Augusta S. Ry. v. W. & J. R. R., 
 
 889. 
 Augusta & Savannah Steamboat 
 
 Co. V. O. S. S. Co. of Savannah, 
 
 134, 163, 1077, 1108. 
 Auto Vehicle Co. v. C, M. & St. 
 
 P. Ry., 531, 851. 
 Auton Piano Co. v. Chicago & St. 
 
 P. Ry., 194. 
 Avery M'fg Co. v. A., T. & S. F. 
 
 Ry., 603, 623, 768, 776, 808. 
 Avinger v. So. Car. Ry., 672, 696. 
 
 B 
 
 Bacon v. Boston & M. R. R., 1005. 
 
 Bacon v. Rutland Ry., 1137. 
 
 Badenoch Co. v. C. & N. W. Ry., 
 150, 851. 
 
 Baer Bros. Mercantile Co. v. Den- 
 ver & R. G. Ry. Co., 123, 1133, 
 1162. 
 
 Baer Bros. Mercantile Co. v. M. 
 P. Ry., 124, 761, 786, 1042, 
 1091. 
 
 [1] 
 
 are to sections] 
 
 Bagley & Co. v. P. M. R. R., 
 
 531. 
 Bahenburg Bros. & Co. v. A.. C. 
 
 L. R. R. Co., 179, 393, 572, 
 
 793, 921. 
 Bainbridge Board of Trade v. L. 
 
 H. & St. L. Ry., 455, 588, 
 
 802, 803. 
 Baker v. Cumberland Valley Ry., 
 
 768. 
 Baker Conamercial Club v. 0. W. 
 
 R. R. & N. Co., 125, 385, 793, 
 
 768, 1103, 1107. 
 Baker Mf'g Co. v. C. & N. W. Ry., 
 
 1057, 1098, 1099. 
 Baldwin Land Co. v. Columbia 
 
 R. Ry., 1055. 
 Balfour, Guthrie & Co. v. 0. W. 
 
 R. R. & N. Co., 738. 
 Ball V. Rutland R. R., 306. 
 Ballard v. No. Pac. Rv. Co., 1050. 
 Ballin v. S. P. Co., 689. 
 Baltimore Butchers' Livestock Co. 
 
 V. O. B. & W. R. R., 927. 
 Baltimore Butchers Livestock Co. 
 
 V. P. B. & W. R. R., 654. 
 Baltimore Chamber of Commerce 
 
 V. B. & 0. R. R., 771, 776, 
 
 787, 880, 
 Baltimore & 0. Ry. v. Interstate 
 
 Commerce Commission, 853. 
 Baltimore & 0. R. R. v. La Due, 
 
 1052. 
 Baltimore & 0. Ry. v. Pitcairn 
 
 Coal Co., 1134, 1136. 
 Baltimore & O. Ry. v. U. S., 945, 
 
 1134. 
 Banner Grain Co.' v. Gt. Northern 
 
 Ry., 177. 
 Bannon v. Southern Express Co., 
 
 812, 826. 
 Barnard Co. v. C, M. & St. P. Ry., 
 
 532, 540. 
 Barr Bros. M. Co. v. M. P. Ry., 
 
 137, 893. 
 Barr Chemical Works v. P. & R. 
 
 Ry., 526, 1093. 
 Barrett v. New York, 145. 
 
Table of Cases Cited 
 
 [References are to sections] 
 
 Barrett M'fg Co. v. C, M. & St. P. 
 
 Ry., 507, 844. 
 Barrow v. Yazoo & M. V. R. R., 
 
 1056. 
 Bartles Oil Co. v. C, M. & St. P. 
 
 Ry., 546, 965. 
 Bartlesville Salvage Co. v. M., 
 
 K. & T. Ry., 400, 433, 434. 
 Bascom Co. v. A., T. & S. F. Ry., 
 
 679, 699, 768, 805, 880. 
 Bash Fertilizer Co. v. Wabash R. 
 
 R., 595. 
 Bates V. Pennsylvania R. R., 
 
 627, 1065, 1097. 
 Baxendale v. Great Western R. Co., 
 
 692. 
 Baxendale v. So. W. Ry., 208. 
 Bayles v. Kansas Pacific R. R., 
 
 1095. 
 Bayou City Rice Mills v. T. W. 
 
 0. R. R., 791, 880. 
 Beach v. A. A. Ry., 768, 771. 
 Beadell v. Eastern Counties R. 
 
 Co., 2 C. B. (N. S.) 509, 571. 
 Beall v. W. A. & M. V. Ry., 122, 
 
 593, 597, 1078. 
 Beatrice Creamery Co. v. I. C. 
 
 Ry., 466, 753. 
 Beaumont & G. N. R. R. v. A., T. 
 
 & S. F. Ry., 193, 822. 
 Becker v. B. & M. Ry., 184. 
 Becker v. P. M. R. R., 842, 1059. 
 Beekman Lumber Co. v. L. Ry. 
 
 & N. Co., 813, 819, 820, 869. 
 Beekman Lumber Co. v. M. C. 
 
 R. R., 1108. 
 Beekman Lumber Co. v. 0. Ry. 
 
 & N. Co., 1097. 
 Beekman Lumber Co. v. St. L., 
 
 L M. & S. Ry., 439. 
 Beekman Lumber Co. v. St. L. S. 
 
 W. Ry., 577. 
 Beekman Lumber Co. v. St. L. & 
 
 S. F. R. R., 840, 1109, 1110. 
 Behrend v. Washington S. Ry., 
 
 714. 
 Bell Co., C. S., V. Baltimore & 
 
 0. S. Ry., 417. 
 
 BeUsdyke Coal Co. v. No. B. Ry., 
 
 586, 692, 765, 804. 
 Bennet v. Button, 803, 871. 
 Bennett v. M., St. P. & S. S. M. 
 
 Ry., 1091. 
 Benson & Co., Ex parte, 613. 
 Benton Transit Co. v. Benton 
 
 Harbor & St. J. & R. L. Co., 
 
 134. 
 Bernheim & Co. v. 0. R. R. & 
 
 N. Co., 436. 
 Bigbee & W. R. Packet Co. v. 
 
 M. & 0. Ry., 676, 697, 803. 
 Big Blackfoot Milling Co. v. N. 
 
 P. Ry. Co., 768. 
 Big Canon Ranch Co. v. G. H. & 
 
 S. A. Ry. Co., 127. 
 Billings Chamber of Commerce 
 
 V. C, B. & Q. R. R., 374, 603, 
 
 804, 809, 918. 
 Bird V. Railroads, 915. 
 Birge-Forbes Co. v. M. R. & T. 
 
 Ry., 1048. 
 Birmingham, Corporation of, v. 
 
 Manchester S. & L. Ry., 62, 
 
 876. 
 Birmingham So. Ry. Case, 196. 
 Bituminous Coal for Railroad Sup- 
 ply, 703. 
 Bituminous Coal Operators v. 
 
 Penn. Ry., 776. 
 Bitzer v. W. V. R. R., 122, 165. 
 Black Horse Tobacco Co. v. I. 
 
 C. R. R., 848. 
 Blackman v. Southern Ry., 574, 
 
 576, 714, 814. 
 Black Mountain Coal Land Co. 
 
 V. So. Ry., 308, 374, 405, 580, 
 
 588, 753, 761, 768, 803. 
 Blair v. Sioux City & P. Ry. Co., 
 
 873. 
 Blakely So. R. R. v. A. C. C. Ry., 
 
 895. 
 Blodgett Milling Co. v. C, M. 
 
 & St. P. Ry., 773, 794. 
 Bluefield Shippers' Ass'n v. N. & 
 
 W. Ry., 581, 603, 764, 784, 
 
 788, 789, 796, 798. 
 
 [li] 
 
Table of Cases Cited 
 
 [References 
 
 Blue Grass Lumber Co. v. L. & 
 
 N. R. R., 436. 
 Blume & Co. v. Wells, Fargo & 
 
 Co., 1011, 1044. 
 Blumenstein v. P. & R. Ry., 418, 
 
 523. 
 Blum Lumber Co. v. So. Pac. Co., 
 
 824. 
 Board of Improvement v. St. L. 
 
 & S. F. R. R., 585. 
 Board of Mayor and Aldermen v. 
 
 V. & S. W. Ry., 965. 
 Board of Railway Commissioners 
 
 V. A., T. & S. F. Ry., 681, 763, 
 
 777. 
 Board of Railroad Comrs. v. 
 
 Florence Ry., 418. 
 Board of Trade v. Central of Ga. 
 
 Ry., 598. 
 Board of Trade of Carrollton v. 
 
 C. of G. Ry., 598, 599, 627, 
 
 759, 776, 784. 
 Board of Trade of Chicago v. A. 
 
 C. R. R., 793, 799, 881. 
 Board of Trade of Chicago v. C. & 
 
 A. Ry., 505, 776. 
 Board of Trade of Chicago v. I. 
 
 C. C, 1107. 
 Board of Trade of Chicago v. I. 
 
 C. R. R., 761, 828. 
 Board of Trade of Lynchburg v. 
 
 Old Dominion S. S. Co., 
 
 757. 
 Board of Trade of Morristown v. 
 
 A. C. L. R. R., 793, 1082. 
 Board of Trade of Troy v. Alabama 
 
 Midland Ry., 580. 
 Boards of Trade Union of Minne- 
 sota, 1072. 
 Board of Trade of Winston-Salem 
 
 V. Norfolk & W., 125, 242, 
 
 318, 372, 374, 406, 407, 589, 
 
 764, 768, 776, 804, 888, 899, 
 
 901. 
 Boards of Trade Union v. Chicago, 
 
 M. & St. P. R., 501, 768. 
 Boileau v. P. & L. E. R. R., 400, 
 
 409, 467, 588, 776, 1097. 
 
 [lii] 
 
 are to sections! 
 
 Boise Commercial Club v. Adams 
 
 Express Co., 658, 851, 915. 
 Boney & Harper Milling Co. v. 
 
 A. C. L. R. R., 581, 880. 
 Bon Marche v. C. R. R. Co. of 
 
 N. J., 850. 
 Boston Chamber of C. v. A., T. 
 
 & S. F. Ry., 415, 487, 580, 
 
 589, 764, 793. 
 Boston Fruit & P. Exch. v. N. Y. 
 
 & N. E. R. R., 135, 1113. 
 Boston, Mayor & Council of, v. 
 
 A. C. L. R. R., 793, 1082. 
 Boston & A. Ry. v. B. & L. Ry., 
 
 771, 1039. 
 Boston & M. R. R., Re, 625, 652. 
 Boston & M. R. R. v. Hooker, 
 
 144, 835, 864, 1134. 
 Bovaird Supply Co. v. A., T. & 
 
 S. F. Ry., 588, 771, 789, 791, 
 
 792, 795, 803. 
 Bowles & McCandless v. L. & N. 
 
 R. R., 825. 
 Bowling Green Business Men v. 
 
 L. & N. R. R., 771, 789, 791, 
 
 799, 800, 801, 897. 
 Boyer v. Chesapeake, O. & S. W. 
 
 Ry., 1095, 1111. 
 Boyle V. G. F. & 0. D. R. R., 165, 
 
 597. 
 Brabham v. Atlantic C. L. R. R., 
 
 442, 444. 
 Brady v. Perm. Ry., 804. 
 Brandt Milling Co. Case,. 678, 
 
 697. 
 Brantly Co. v. Ocean S. S. Co., 
 
 1055, 1135. 
 Bras V. McConnell, 873. 
 Brass ex rel. v. Stoesser, 189. 
 Breeze Trenton Mining Co. v. W. 
 
 Ry., 793. 
 Brewer v. C. & G. Ry., 713, 776. 
 Brewer v. L. & N. Ry., 756, 763, 
 
 771. 
 Brewer & Haulerter v. Louisville 
 
 &N.Ry., 223, 1145. 
 Bridgeman-Russel Co. v. G. N. 
 
 Exp. Co., 125, 509. 
 
Table of Cases Cited 
 
 (References are to sections] 
 
 Bristol V. Bristol & Warren Water- 
 works, 278. 
 Brockway v. Ulsters & D. R. R., 
 
 586. 
 Brooklyn Union Gas Co. v. City 
 
 N. Y., 305. 
 Brook-Rauch Mill & Elevator 
 
 Co. V. M. P. Ry., 576, 632, 738. 
 Brook Rauch Mill & Elevator Co. 
 
 V. St. L., I. M. & S. Ry., 1109. 
 Broom Rates to Colorado Points, 
 
 528. 
 Brown v. Grand Trunk Ry., 577. 
 Brown v. New York C. & H. R. R., 
 
 865. 
 Brown v. Walker, 1118. 
 Brown & B. Coal Co. v. Grand 
 
 Trunk Ry. Co., 915. 
 Browne Grain Co. v. F. W. & R. 
 
 G. Ry., 436, 439. 
 Brownell v. Columbus & C. M. 
 
 R. R., 507, 510, 531, 714, 1122. 
 Brundred v. Rice, 649, 672, 677, 
 
 730, 734, 736. 
 Brunswick B. C. Co. v. Atchison, 
 
 T. & S. F. R. R., 518. 
 Brunswick & T. Water Dist. v. 
 
 Maine Water Co., 277-330. 
 Bryant Co. v. Ft. W. & D. C. 
 
 Ry., 776. 
 Brymer v. Butler W. Co., 222, 252, 
 
 270, 310, 315, 316, 856, 994. 
 Buckeye Buggy Co. v. Cleveland, 
 
 C, C. & St. L. Ry., 417, 538, 
 
 687. 
 Buckland v. Adams Express Co., 
 
 166. 
 Buckway v. Y. & D. Ry., 804. 
 Buffalo Hardwood Lumber Co. 
 
 v. B. & 0. S. W. R. R. Co., 
 
 1058. 
 Buffalo, R. & Pitts. R. R. v. Pa. 
 
 Ry., 177. 
 Buffalo Union Furnace Co. v. 
 
 L. S. & M. S. Ry., 177, 193, 
 
 743. 
 Bulah Coal Co. v. P. R. R., 938, 
 
 1086. 
 
 Bulte Milling Co. v. C. A. R. R., 
 
 436, 460, 517, 771, 877. 
 Bunch Co., T. H., v. Chicago, R. 
 
 I. & P. R., 1103. 
 Buren v. So. Pac. Co., 818, 832. 
 Burgess v. Transcontinental 
 
 Freight Bureau, 806. 
 Burlington, C. R. & X. Ry. v. 
 
 Northwestern Fuel Co., 621, 
 
 680, 718, 682. 
 Burlington & M. R. R. R. v. 
 
 Chicago Lumber Co., 577. 
 Bumham, Hanna, Munger Co. v. 
 
 C.,R. I. & P. Ry., 588, 776, 797. 
 Burton Stock Car v. C, B. & Q. 
 
 R. R., 169, 657. 
 Business Men's Ass'n v. Chicago 
 
 & N. W. Ry., 388, 763, 1106. 
 Business Men's Ass'n v. Chicago, 
 
 S. P. M. & I. R. R., 581. 
 Business Men's Ass'n v. Chicago, 
 
 S. P., M. & 0. Ry., 389, 443, 
 
 763, 803. 
 Business Men's League of Albert- 
 lea V. B. & 0. Ry., 134, 793. 
 Business Men's League of St. L. 
 
 V. A., T. & S. F. Ry., 417, 545, 
 
 722, 1115. 
 Butchers' & D. S. Y. Co. v. Louis- 
 
 viUe & N. R. R. Co., 578, 923. 
 Butler County Railroad Case, 197. 
 Buttfield V. Stranahan, 1133. 
 Butts V. M. T. M. Transp. Co., 143. 
 Byrnes v. Atlantic C. L. R. R., 
 
 1094. 
 Byzer v. W. Va. Ry., 597. 
 
 Cady Lumber Co. v. M. P. Ry., 
 
 326, 831, 1105. 
 Caldwell Co., W. E., v. C. I. & 
 
 L. Ry., 439, 489, 502, 1057. 
 Caldwell v. Richmond & D. R. 
 
 Co., 164. 
 California Commercial Ass'n v. 
 
 Wells, Fargo & Co., 524, 1088, 
 
 1089. 
 
 [liii] 
 
Table of Cases Cited 
 
 [References 
 
 California Pole & Piling Co. v. 
 
 S. P. Co., 814. 
 California Refrigeration Cases, 574. 
 Calloway v. L. & N. Ry., 764. 
 Cambria Steel Co. v. B. & 0. R. 
 
 R., 623. 
 Campbell's Creek Coal Co. v. A. 
 
 A. R. R., 645. 
 Canada So. Rv. v. International 
 
 Bridge Co.] 307, 331. 
 Canadian Valley Grain Co. v. 
 
 C, R. I. & P. Ry., 828, 
 
 840. 
 Cancellation of Joint Rates in 
 
 Connection with C. Z. & G. 
 
 R. R., 193, 198. 
 Capehart v. Louisville & N. R. R., 
 
 870. 
 Capital City Gas Co. v. Central 
 
 Vt. Ry., 703. 
 Capital City Gaslight Co. v. Des 
 
 Moines, 256, 258, 291. 
 Capital Electric Co. v. B. & 0. 
 
 C. T. R. R., 386. 
 Cardiff Coal Co. v. C, M. & St. 
 
 P. Ry. Co., 136, 895. 
 Cardiff Coal Co. v. Chicago W. 
 
 & S. P. R., 917. 
 Carnegie Board of Trade v. P. Co., 
 
 502, 727. 
 Carrey v. Spencer, 132. 
 Carsten's Packing Co. v. Oregon 
 
 R. R. & N. Co., 1047. 
 Carstens Packing Co. v. O. S. L. 
 
 Ry., 536, 551, 725, 789. 
 Carstens Packing Co. v. 0. & W. 
 
 R. R., 460, 502, 505, 776. 
 Carstens Packing Co. v. S. P. Co., 
 
 1117. 
 Carter White Lead Co. v. N. & 
 
 W. Ry., 706. 
 Cary v. Eureka Springs Ry., 225, 
 
 445, 676, 796. 
 Casassa v. P. R. R., 179, 921, 
 
 1087. 
 Castle V. Baltimore & 0. R. R., 
 
 703, 712, 735, 1115. 
 Cator V. Southern P. Co., 715. 
 
 [Hv] 
 
 are to sections] 
 
 Cattle Raisers' Ass'n v. C. B. & 
 
 Q. R. R., 579, 1056, 1092, 1097, 
 
 1109, 1163. 
 Cattle Raisers Ass'n v. Fort Worth 
 
 & D. C. R. R., 128, 574, 794, 
 
 1084, 1088. 
 Cattle Raisers' Ass'n of Texa.s v. 
 
 G. H. & S. A. Ry., 1102. 
 Cedar Hill Coal & Coke Co. v. 
 
 Atchison, T. & S. F. R. R., 
 
 200, 644, 1076. 
 Cedar Hill Coal & Coke Co. v. 
 
 C. & S. Ry., 407. 
 Cedar Lumber Products Case, The, 
 
 651. 
 Cedar Rapids G. & E. Light Co. 
 
 V. Chicago, R. I. & P. Ry. Co., 
 
 925. 
 Cedar Rapids Water Co. v. Cedar 
 
 Rapids, 276, 292, 317, 364. 
 Cement Rates from Pennsylvania 
 
 to New Jersey, 967. 
 Central California Traction Co. 
 
 V. C, M. & St. P. Ry., 292, 
 
 851. 
 Central Commercial Co. v. A., T. 
 
 & S. F. Ry., 1099. 
 Central of Georgia Ry. v. Mc- 
 
 Lendon, 1142. 
 Central R. Co. v. Railroad Com- 
 mission, 316. 
 Central Stockyards Co. v. Louis- 
 ville & N. Ry., 578, 657, 865, 
 
 870, 923. 
 Central Yellow Pine Ass'n v. L C. 
 
 Ry., 242, 321, 435, 444, 522, 
 
 959. 
 Central Yellow Pine Ass'n v. Vicks- 
 
 burg, etc., Ry., 193, 194, 776, 
 
 1086, 1088. 
 Central of Ga. Ry. v. Butler M. 
 
 & G. Co., 648. 
 Central of Ga. Ry. v. McLendon, 
 
 239, 400. 
 Central of Ga. Ry. v. Murphey, 
 
 147. 
 Central of Ga. Ry. v. Railroad 
 
 Commission of Ala., 995. 
 
Table of Cases Cited 
 
 [References are to sections] 
 
 Chaffia Coal Co. v. C, M. & St. 
 P. Ry., 1103. 
 
 Chamber of Commerce of Ashbum 
 V. G. S. & F. Ry., 773. 
 
 Chamber of Commerce of Augusta 
 V. S. Ry., 1081. 
 
 Chamber of Commerce of Mason 
 V. C, N. 0. & T. P. Ry., 771. 
 
 Chamber of Commerce of Milwau- 
 kee V. C, R. I. & P. Ry., 434, 
 448, 468, 868, 892, 900. 
 
 Chamber of Commerce of Mimieap- 
 olis V. Great No. Ry., 776. 
 
 Chamber of Commerce of New 
 York V. N. Y. C. & H. R. R. 
 R. Co., 113, 120, 134, 385, 467, 
 549, 592, 623, 740, 761, 771, 
 773, 776, 793, 797, 807, 896. 
 
 Chamber of Commerce of Newport 
 News V. Southern Ry., 758, 
 773, 776, 793, 884. 
 
 Chandler Cotton Oil Co. v. F. S. 
 & W. R., 122. 
 
 Chappelle v. Louisville & N. R. 
 R., 205. 
 
 Charges for Transportation & Re- 
 frigeration, In re, 814. 
 
 Charges on Food Products, Re, 
 562. 
 
 Charge to Grand Jury, Re, 622. 
 
 Chattanooga Chamber of Com- 
 merce V. Southern Ry., 446. 
 
 Chattanooga Feed Co. v. A. G. 
 S. R. R., 761, 1081. 
 
 Cherokee Lumber Co. v. A. C. L. 
 Ry., 763, 804. 
 
 Chesapeake & 0. Ry. v. Conley, 
 1137. 
 
 Chesapeake & O. Ry. v. Standard 
 Lumber Co., 631, 739. 
 
 Chesapeake & P. Telephone Co. 
 V. Manning, 142, 172. 
 
 Chesapeake & P. Telephone Co. 
 • V. Baltimore & 0. Telegraph 
 Co., 172. 
 
 Chicago V. Rogers P. R. Co., 305. 
 
 Chicago Board of Trade v. A., T. 
 & S. F. Ry., 758. 
 
 Chicago Board of Trade v. Chicago 
 
 & A. R. R., 777. 
 Chicago & A. R. R. V. Chicago V. 
 
 & W. Coal Co., 655, 735. 
 Chicago & A. R. R. v. Coal Co., 
 
 - 649,672. 
 Chicago & A. Ry. v. Dumser, 934. 
 Chicago & A. R. R. v. Interstate 
 
 Commerce Commission, 944. 
 Chicago & A. R. R. v. Kirby, 648. 
 Chicago & A. R. R. v. People, 620. 
 Chicago & A. R. R. v. United 
 
 States, 624. 
 Chicago, B. & Q. R. R. v. Burling- 
 ton, C. R. & N. Ry., 936. 
 Chicago, B. & Q. R. R. Co. v. 
 
 Feintuch, 1020, 1146, 1158, 
 
 1162. 
 Chicago, B. & Q. R. R. v. Iowa, 
 
 302, 885. 
 Chicago, B. & Q. R. R. v. United 
 
 States, 135, 634. 
 Chicago F. & I. Co. v. So. Pac. 
 
 Ry., 776. 
 Chicago F. P. C. Co. v. Chicago 
 
 & N. W. Ry., 678, 764, 885, 
 
 1056. 
 Chicago & Grand Trunk Ry. v. 
 
 Wellman, 303, 342, 370, 372. 
 Chicago Lighterage Charges, 178, 
 
 898. 
 Chicago L. S. Exch. v. Chicago G. 
 
 W. Ry., 549, 777, 1084, 1111. 
 Chicago Lumber & Coal Co. v. T. 
 
 S. Ry., 595, 603, 770, 771, 773, 
 
 796, 802, 804, 808. 
 Chicago & M. El. Ry. v. I. C. R. 
 
 R., 165, 893. 
 Chicago, M. & St. P. Ry. v. Ackley, 
 
 302. 
 Chicago, M. & St. P. Ry. v. Iowa, 
 
 138. 
 Chicago, M. & St. P. Ry. v. Smith, 
 
 963. 
 Chicago, M. & St. P. Ry. v. Tomp- 
 kins, 342, 370, 395, 406, 861. 
 Chicago, M. & St. P. Ry. v. Wa- 
 bash, St. L. & P. Ry., 978. 
 
 [Iv] 
 
Table of Cases Cited 
 
 [References are to sections] 
 
 Chicago, M. T. P. S. Accounts, 970. 
 Chicago, N. O. & T. P. Ry. v. I. 
 
 C. C, 1154. 
 Chicago & No. W. Ry. v. Dey, 
 
 211, 239, 265, 302, 303, 310, 
 
 324, 342, 998. 
 Chicago & N. W. Ry. v. Jenkins, 
 
 577. 
 Chicago & N. W. Ry. v. Morehouse, 
 
 190. 
 Chicago & N. W. Ry. v. Osborne, 
 
 787, 837, 870. 
 Chicago & N. W. Ry. v. People of 
 
 Illinois, 922, 924. 
 Chicago, R. I. & P. R,y. v. Cramer, 
 
 144. 
 Chicago, R. I. & P. Ry. v. Hard- 
 wick F. El. Co., 144. 
 Chicago, R. I. & P. Ry. v. Inter- 
 state Commerce Commission, 
 
 775. 
 Chicago, R. I. & P. Ry. v. Lena 
 
 Lumber Co., 1055. 
 Chicago, St. L. & N. 0. R. R. v. 
 
 PuUman So. Car Co., 167. 
 Chicago, St. P., Mo. & O. Ry. v. 
 
 Becker, 303, 393. 
 Chicago, St. P., M. & 0. Ry. v. 
 
 United States, 633, 634. 
 Chicago, S. P. & K. C. Ry., Re, 
 
 443, 456, 1122. 
 Chicago Union Traction Co. v. 
 
 Chicago, 267. 
 Chicago W. & V. Coal Co. v. C, 
 
 B. & Q. R. R., 927. 
 Chicago, Ind. & L. Ry. Co. v. 
 
 United States, 653. 
 Chickasaw Compress Co. v. Gulf, 
 
 C. & S. F. Ry., 467. 
 
 Chiles V. Chesapeake & 0. R. R. 
 
 Co., 149. 
 China & Japan Trading Co. v. 
 
 Georgia Railroad, 793, 984, 
 
 1009. 
 Chippewa Valley & N. Ry. Co. v. 
 
 M., St. P. & S. S. M. Ry., 193. 
 Christie v. Mo. Pac. R. R., 616. 
 Cincinnati Chamber of Commerce 
 
 [Ivi] 
 
 V. Baltimore & 0. S. W. Ry., 
 1008. 
 
 Cincinnati Freight Bureau v. Cin- 
 cinnati, N. 0. & T. P. Ry., 
 435, 448. 
 
 Cincinnati & C. T. Co. v. B. & 
 
 0. S. W. R. R., 165, 893, 1087, 
 1109. 
 
 Cincinnati, H. & D. R. R. v. 1. C. 
 
 C, 236, 502, 719, 721, 728, 
 
 1021, 1073. 
 Cincinnati, N. 0. & T. P. Ry. v. 
 
 1. C. C, 131, 132, 136, 142, 
 758, 772, 782, 793, 1032, 1133, 
 1134, 1135, 1144. 
 
 Cist V. Michigan Central R. R., 
 
 112, 419, 451. 
 Clark' Bros. C. Na. Co. v. Pa. Ry., 
 
 1163. 
 Classification of Empty Barrels, 
 
 In re, 385. 
 Clearfield Lxmiber Co. v. C. & 0. 
 
 Ry., 1117. 
 Clement v. L. & N. Ry., 1135, 
 
 1162. 
 Clements, Com., in Roth v. Texas 
 
 & P. Ry., 534. 
 Cleveland, C. & S. L. Ry. v. Hol- 
 
 den, 577. 
 Cleveland, C, C. & St. L. R. R. 
 
 Co. V. Illinois, 149. 
 Clinton Bridge & Iron Works v. 
 
 C, B. & Q. R. R., 1112. 
 Clinton Refining Co. v. C. & N. 
 
 W. Ry., 1049, 1078. 
 Clough V. Boston & M. R. R., 1051. 
 Clough V. Grand Trunk Ry. Co., 
 
 207. 
 Coal Co. V. Caledonia Ry. Co., 765. 
 Coal & Coke Co. v. Conley, 269, 
 
 317, 359, 374, 401. 
 Coal Rates on the Stony Fork 
 
 Branch, 768, 835, 876, 931, 
 
 938, 939, 1098. 
 Cobb V. N. P. Ry., 1039. 
 Coe V. Erroll, 764. 
 Coe V. Louisville & N. R. R. Co., 
 
 923. 
 
Table of Cases Cited 
 
 [References are to sections] 
 
 Coffers Box Lumber Co. v. C. & 
 
 N. W. Ry., 1110. 
 Coffeyville B. & T. Co. v. St. L. 
 
 & S. F. R. R. Co., 137. 
 Cohen & Co. v. Mallory S. S. Co., 
 
 509, 802. 
 Coke Producers' Ass'n of Corinells- 
 
 ville V. B. & O. Ry., 179, 232, 
 
 383, 385, 435, 465, 503, 545, 
 
 759, 793. 
 Collingwood Brick Co. v. P. M. 
 
 R. R., 309, 397. 
 Colonial Salt Co. v. M. I. & I. L., 
 
 194, 195. 
 Colorado Coal Traffic Ass'n v. 
 
 C. & S. Ry., 771, 783, 793. 
 Colorado Coal Traffic Ass'n v. D. 
 
 & R. G. R. Co., 940, 941. 
 Colorado Free Pass Investigation, 
 
 636, 643, 709. 
 Colorado F. & I. Co. v. So. Pac. Co., 
 
 436, 543, 716, 844, 872, 1141. 
 Colorado Mf rs Ass'n v. A., T. & S. 
 
 F. Ry. Co., 134. 
 Columbia Chamber of Commerce 
 
 V. S. Ry. Co., 588, 770. 
 Columbia Grocery Co. v. L. & 
 
 N. R. R., 603, 761, 770. 
 Columbus I. & S. Co. v. Kanawha 
 
 & M. Ry., 1050, 1052, 1135, 
 
 1136. 
 Commercial Club v. C. & N. W., 
 
 804. 
 Commercial Club v. C, R. I. & 
 
 P. Ry., 805, 870, 1079. 
 Commercial Club of Duluth v. 
 
 B. & 0. Ry., 486, 601, 771, 789, 
 
 799, 1091. 
 Commercial Club of Omaha v. A. 
 
 & S. Ry., 433, 435, 445, 967, 
 
 1041, 1042, 1089, 1099. 
 Commercial Club of Omaha v. 
 
 Chicago & N. W. Ry., 592, 
 
 1115. 
 Commercial Club of Omaha v. C, 
 
 R. I. & P. Ry., 776. 
 Commercial Club of Omaha v. S. 
 
 P. Co., 1116. 
 
 Commercial Club of Salt Lake 
 City V. A., T. & S. F. Ry., 
 222, 309, 386, 390, 449, 457, 
 461, 591, 595, 601, 790. 
 
 Commercial Club of Superior v. 
 G. N. Ry., 213, 237, 402, 460, 
 468, 583, 584, 753, 773, 776, 
 793, 797, 801, 896, 1113. 
 
 Commercial Coal Co. v. B. & 0. 
 Ry., 802. 
 
 Commercial & I. Ass'n of Union 
 Springs v. L. & N. R. R. Co., 
 603, 758. 
 
 Commodity Rates Between Mis- 
 souri River Points, 533, 1076. 
 
 Commonwealth v. Fitchburg R. 
 R. Co., 164. 
 
 Commonwealth v. Louisville & N. 
 R. R. (Ky.), 508. 
 
 Commutation Rate Cases, 201, 384, 
 441, 471, 597, 689, 1009. 
 
 Concentration of Cotton, 585, 601. 
 
 Concord & M. R. R. Co. v. Bos- 
 ton & M. R. R., 928. 
 
 Concord & P. R. R. v. Forsaith, 
 614, 680, 683. 
 
 Conference Ruling, No. 184, 826. 
 
 Conference Ruling, 784, 785, 786. 
 
 Conference Rulings, 299b, 304a, 
 310, 787. 
 
 Consolidated Forwarding Co. v. 
 Southern Pacific Co., 574, 836. 
 
 Consolidated Fuel Co. v. A., T. 
 & S. F. Ry., 402, 645, 1004. 
 
 Consolidated Gas Co. v. Willcox, 
 269. 
 
 Consolidated Pump Co. v. L. S. 
 & M. S. Ry., 926, 1047. 
 
 Consolidation Fuel Co. v. A., T. 
 & S. F. Ry., 1004. 
 
 Consumers' Ice Co. v. A., T. & 
 S. F. Ry., 768. 
 
 Contracts of Express Companies, 
 Re, 654. 
 
 Conyers v. Postal Telegraph Cable 
 Co., 867. 
 
 Cook V. Chicago, R. I. & Pac. Ry. 
 Co., 615, 680, 681, 720. 
 
 [Ivii] 
 
Table of Cases Cited 
 
 [References are to sectionsjj 
 
 Cordile Machine Shops v. L. & N. 
 Ry., 388, 598, 754. 
 
 Cormick v. Chicago, B. & Q. R. 
 R., 926. 
 
 Corn Belt Meat Producers' Ass'n 
 V. C, B. & Q. Ry., 442, 753, 
 965, 967. 
 
 Corporation Commission v. Rail- 
 road, 997. 
 
 Corporation Commission of North 
 Carolina v. N. W. Ry., 405, 
 467, 593, 602, 770, 776. 
 
 Corporation Commission of Okla- 
 homa V. A. O. & W. R. R., 
 507. 
 
 Corporation Commission of Okla- 
 homa V. A. & S. Ry., 122. 
 
 Corporation Commission of Okla- 
 homa V. A., T. & S. F. Ry., 
 168, 931, 1001. 
 
 Cosby V. Richmond Transfer Co., 
 129, 185, 209. 
 
 Cosmopolitan Shipping Co. v. 
 Hamburg - American Packet 
 Co., 112, 113, 115, 163, 881. 
 
 Cotting V. Kansas City Stock 
 Yards Co., 304, 307, 317, 330. 
 
 Councill V. Western & A. R. R., 
 712, 1056. 
 
 Counselman v. Hitchcock, 1118. 
 
 Coup V. Wabash, St. L. & P. Ry., 
 207. 
 
 Covington Gaslight Co. v. City of 
 Covington, 278. 
 
 Covington Stockyards Co. v. Keith, 
 578, 923. 
 
 Covington Road Co. v. Sandford, 
 217, 306. 
 
 Cowan V. Bond, 805. 
 
 Cowden v. Pacific S. S. Co., 612, 
 615. 
 
 Cowley V. Northern Pacific Ry., 
 656. 
 
 Coxe V. Lehigh Valley R. R., 442, 
 444, 485, 527, 596, 644. 
 
 Craig Lumber Co. v. V. Ry., 876. 
 
 Crane Iron Works v. Central R. 
 R. of N. J., 195. 
 
 [ Iviii ] 
 
 Crane R. R. Co. v. P. & R. Ry., 
 
 193, 743. 
 Crawford, City of, v. C. & N. W. 
 
 Ry., 793. 
 Crescent Coal & Mining Co. v. 
 
 B. & O. R. R., 705, 814, 822, 
 1047. 
 
 Crescent Coal Mining Co. v. C. 
 
 & E. I. R. R., 140, 187, 813, 
 
 820, 845, 847, 849, 1049. 
 Crews V. R. & D. Ry., 416, 764, 
 
 769, 776, 804. 
 Crombie Co. v. S. P. Co., 850. 
 Crommelin v. N. Y. & H. R. R., 
 
 577. 
 Crowell & Spencer Lumber Co. v. 
 
 T. & P. Ry., 632, 1105. 
 Crutchfield & W. v. F. E. C. Ry., 
 
 567. 
 Crutchfield & W. v. L. & N. R. R., 
 
 450. 
 Crutchfield & W. v. S. P. Co., 181, 
 
 814, 1058, 1099. 
 Crutchfield & W. Co. v. T. F. Ry., 
 
 822. 
 Cumberland Tel. & Tel. Co. v. 
 
 Railroad Commission, 273, 316. 
 Curry v. Kansas & C. P. Ry., 652, 
 
 656. 
 Curry & W. Co. v. D. I. & R. Ry., 
 
 401. 
 Curtis Bros. Co. v. So. Pac. R. R., 
 
 177. 
 Cutting V. Florida Ry. & Nav. Co., 
 
 133, 136. 
 
 D 
 
 Dairymen's Supply Co. v. P. R. 
 
 R. Co., 647. 
 Daish & Sons v. Cleveland, A. & 
 
 C. Ry., 917, 938. 
 
 Dallas Freight Bureau v. G., C. 
 
 & S. F. R., 587, 1101. 
 Dallas Freight Bureau v. M., K. 
 
 & T. R. Co., 1016, 1101. 
 Dallas Freight Bureau v. Texas 
 
 & P. Ry., 446. 
 Daniel Ball, The, 123. 
 
Table of Cases Cited 
 
 (References 
 
 Daniell v. So. Pac, 1162, 1163. 
 Daniels v. C, R. I. & P. R. R., 
 
 135, 712, 776, 1092. 
 Danville v. Southern Ry., 264, 
 
 776, 975. 
 Darling & Co. v. B. & O. R. R., 
 
 448, 450, 791, 802. 
 Darlington Lumber Co. v. Mo. 
 
 Pac. Ry., 146. 
 Darnell v. 111. C, 1162. 
 Davenport Commercial Club v. 
 
 Y. & M. Ry. Co., 770. 
 Davenport Pearl Button Co. v. 
 
 Chicago, B. & Q. R. R., 1101. 
 Davenport Pearl Button Co. v. 
 
 Chicago, B. & St. L. R. R., 
 
 1097. 
 Davies v. I. C. R. R., 179, 185, 
 
 208. 
 Davies v. Louisville & N. R. R., 
 
 179, 1081. 
 Davis V. West Jersey Express Co., 
 
 435. 
 Davis Bros. Lumber Co., Ltd., 
 
 V. C, R. I. & P. Ry., 418, 
 
 598, 895, 897. 
 Davis Sewing Machine Co. v. P. 
 
 C. C. & St. L. Ry., 544, 1091, 
 
 1123. 
 Davison v. Gillies, 366. 
 De Camp Bros. & Yule Iron Coal 
 
 & Coke Co. v. V. & S. W. Ry., 
 
 876. 
 Deeves Lumber Co. v. A. & V. 
 
 Ry., 846. 
 Delaware & H. C. Co. v. Com., 
 
 125, 139. 
 Delaware, L. & W. Ry. v. I. C. C, 
 
 1152. 
 Delaware, L. & W. Ry. v. U. S., 
 
 645. 
 Delaware State Grange v. New 
 
 York, P. & N. R. R., 218, 371, 
 
 418, 537, 1080, 1108. 
 Delrav Salt Co. v. M. C. R. R., 
 
 1081. 
 Delray Salt Co. v, Penn. R. R., 
 
 585. 
 
 are to sections] 
 
 Demer Son & Co. v. A. T. & N. R. 
 
 R., 309. 
 Deming Lumber Co. v. S. P. Co., 
 
 1099. 
 Denaby Main Colliery Co. v. Man- 
 chester, S. & L. R. Co., L. R. 
 
 11 App. Cas. 97, 674, 772. 
 Denison L. & P. Co. v. M., K. & 
 
 T. Ry., 522, 1115. 
 Denver & R. G. R. Co. v. I. C. C, 
 
 136. 
 Des Moines W. W. Co. v. Des 
 
 Moines, 292. 
 Detroit Board of Trade v. Grand 
 
 Trunk Ry., 764, 768. 
 Detroit Chemical Works v. M. C. 
 
 Ry., 761. 
 Detroit G. H. & N. Ry. v. Int. 
 
 Com. Comm., 804, 1161. 
 Detroit Reconsigning Case, 869. 
 Detroit Switching Charges, 176, 
 
 253, 282, 382, 971, 1114. 
 Detroit Traffic Ass'n v. L. S. & M. 
 
 S. Ry., 185, 1117. 
 Diamond Mills v. B. & M. R. R., 
 
 878, 1002. 
 Di Giorgio I. & S. S. Co. v. Penn- 
 sylvania R. R. Co., 933. 
 Dillon V. Erie R. R., 125. 
 Dillon Coal & Transfer Co. v. 0. 
 
 S. L. R. R. Co., 1110. 
 Diphwys Casson Slate Co. v. 
 
 Festiniog R., 692, 726. 
 Disher Hoop & Lumber Co. v. 
 
 St. L. & S. F. R. R. Co., 137. 
 District No. 1, Fort Smith, Ark., 
 
 V. St. L. & S. F. R. R., 582. 
 Divisions of Joint Rates, Re, 192. 
 Divisions of Joint Rates on Coal, 
 
 In re, 743. 
 Douglas, Council & Mayor of, v. 
 
 A. B. & A. Ry., 755. 
 Douglas & Co. V. C, R. I. & P. Ry., 
 
 468, 706, 776, 1063, 1081, 
 
 1107, 1108, 1109. 
 Douglas Shoe Co. v. Adams Ex- 
 press Co., 916, 1102. 
 Dow V. Biedelman, 255, 303. 
 
 [lix] 
 
Table of Cases Cited 
 
 [References are to sections] 
 
 Dubuque Shippers' Ass'n v. C. & 
 
 N. W. Ry., 916, 935. 
 Duluth Shingle Co. v. D. S. S. & 
 
 A. Ry., 777. 
 Duluth Superior Milling Co. v. 
 
 No. Pacific Ry., 139. 
 Duluth Log Rates, 394. 
 DuMee, Son & Co. v. P. R. R. Co., 
 
 115. 
 Duncan v. A., T. & S. F. Ry., 417, 
 
 419, 446, 448, 590, 703, 708. 
 Duncan & Co. v. N. C. & St. L. 
 
 Ry., 531, 607, 768, 807. 
 Dunham v. Boston & Maine R. 
 
 R. Co., 877. 
 Dupont de Nemours Powder Co. 
 
 V. C. R. R. of N. J., 137, 523. 
 Du Pont de Nemours Powder Co. 
 
 V. D. & N. R. R. Co., 847. 
 Du Pont de Nemours Powder Co. 
 
 V. P. R. R., 140. 
 Durham v. I. C. Ry., 598. 
 
 E 
 
 Eagle Distillery v. L. H. & St. 
 
 L. Ry., 758. 
 Eagle P. L. Co. v. N. Rys. of M., 
 
 112, 137, 818. 
 Eagle White Lead Co. v. I. C. C, 
 
 1142. 
 East Dubuque Supply Co. v. I. 
 
 C. R. R., 584. 
 East St. Louis Cotton Oil Co. v. 
 
 St. L. & S. F. R. R., 504, 517, 
 
 776, 804. 
 East St. Louis Walnut Co. v. St. 
 
 Louis S. W. Ry., 1110. 
 East Tennessee V. & G. R. R. v. 
 
 Hunt, 577. 
 East Tennessee V. & G. Ry. v. I. C. 
 
 C, 420, 599, 754, 765, 782, 791, 
 
 793, 799, 1144. 
 Eastern Wheel M'frs Ass'n v. A. 
 
 & V. Ry., 507, 513. 
 Eau Claire Board of Trade v. 
 
 Chicago, M. & S. P. R. R., 
 
 501, 581, 763, 773, 776. 
 
 [Ix] 
 
 Echols & Co. V. A., T. & S. F. Ry. 
 
 Co., 163. 
 Eddlemann v. Midland Valley 
 
 R. Co., 1046. 
 Edgar & Son v. L. & N. Ry., 
 
 763, 795. 
 Edison Portland Cement Co. v. 
 
 v., D. & W. R. R., 838, 876. 
 Edson V. So. Pac. Ry. Co., 727. 
 Edwards & Bradford Lumber Co. 
 
 V. C, B. & Q. Ry., 787, 791, 
 
 897. 
 Eichenberg v. S. P. Co., 1059. 
 Electric Co. v. City of Wymore, 
 
 305. 
 Electric Malting Co. v. A., T. & 
 
 S. F. Ry., 517. 
 Elevation Allowances, Re, 184, 
 
 741. 
 Elevator Allowances at St. Louis 
 
 and East Louis, 745, 769. 
 Elgin Commercial Club v. B. & 
 
 M. R. R., 584, 793. 
 Elk C. & L. Co. V. B. & O. R. R., 
 
 580, 583, 776. 
 Elkins V. Boston & M. R. R., 186. 
 Ellsworth Produce Co. v. U. P. 
 
 R. R., 914. 
 El Paso & B. Ry. v. Gutierrez, 
 
 143. 
 Emerson v. Chicago, R. I. & P. Ry., 
 
 642. 
 Employers' Liability Cases, 143. 
 Empson Packing Co. v. C. M. Ry., 
 
 511, 771, 776. 
 Enterprise Fuel Co. v. Penna. Ry., 
 
 886. 
 Enterprise Manufacturing Co. v. 
 
 Ga. R. R., 793, 1117. 
 Enterprise Transp. Co. v. Penna. 
 
 Ry., 830. 
 Erickson Co. v. C, M. & St. P. 
 
 Ry., 764. 
 Erie v. Erie Gas & C. Co., 359. 
 Erie R. R. Co. v. Wanaque Lumber 
 
 Co., 1051. 
 Erie & P. Ry. v. Douthet, 652. 
 Escanaba Business Men's Ass'n 
 
Table of Cases Cited 
 
 IReferences are to sections] 
 
 V. Ann Arbor Ry., 134, 791, 
 
 793, 1045. 
 Eschner v. Pennsylvania R. R., 
 
 689. 
 Esson Granite Co. v. S. Ry., 1081, 
 
 1103. 
 Evans v. Oregon Ry. & Nav. Co., 
 
 443. 
 Evans v. Union Pacific Ry., 448. 
 Evens & Howard Fire Brick Co. 
 
 V. St. L., I. M. & S. Ry., 212, 
 
 404,414,793, 1091, 1098. 
 Evens & H. Fire Brick Co. v. W. 
 
 R. R., 824, 825. 
 Evershad v. Railway Co., 617. 
 Ewing V. Leavenworth, 95, 125. 
 Export & Domestic Rates on Grain, 
 
 Re, 112, 549, 764, 841, 1008, 
 
 1116. 
 Export Rates from Points East 
 
 and West of Miss. River, Re, 
 
 776, 825, 836. 
 Export Shipping Co. v. Wabash 
 
 R. R., 503. 
 Export Trade of Boston, Re, 1100. 
 Express Cases, 166, 209. 
 Express Companies, Re, 166. 
 Express Rates, In re, 166, 203, 226, 
 
 281, 307, 309, 347, 387, 432, 
 
 458, 485, 648, 793, 814, 823, 
 
 835, 838, 844, 851, 900, 914, 
 
 915, 921, 1060, 1108, 1115. 
 
 F 
 
 Fabrication in Transit Charges, 
 
 184. 
 Fagg, J., in Ballentine v. North 
 
 Mo. R. R. Co., 930. 
 Fairbault Furniture Co. v. Chicago 
 
 Gt. W. R. R., 817, 832, 1049, 
 
 1053. 
 Fairmont Creamery Co. v. A., T. 
 
 & S. F. Ry., 770. 
 Falls & Co. V. C, R. I. & P. Ryj 
 
 Co., 539, 840, 1047. 
 Falmouth v. Falmouth Water Co., 
 
 254. 
 
 Farmers' Co-operative Educational 
 
 Union v. G. N. Ry., 898. 
 Farmers' Loan & T. Co. v. No. Pac. 
 
 Ry., 386, 1141, 1159, 1160, 
 
 1161. 
 Farmers' Warehouse Co. v. L. & 
 
 N. R. R., 1104. 
 Farrar v. East Tenn., V. & G. R. 
 
 R., 388, 416, 580. 
 Farrar Lumber Co. v. N. C. & St. 
 
 L. Ry., 509. 
 Federal Sugar Refining Co. v. B. 
 
 & 0. R. R. Co., 178, 576, 740. 
 Fels & Co. V. P. R. R., 1079, 1092, 
 
 1113. 
 Ferguson Saw Mill Co. v. St. L. 
 
 L, M. & S. Ry., 603, 770, 1082. 
 Fewell v. R. & D. Ry., 790. 
 Field V. Southern R., 689. 
 Filing Copies of Joint Tariff, Re, 
 
 837. 
 Financial Operations of the N. Y., 
 
 N. H. & H. R. R., 1018. 
 First Trust & Savings Bank v. So. 
 
 Ind. Ry., 833. 
 Fish & Co. v. N. Y. C. & St. L. 
 
 R. R., 837, 839, 876. 
 Fisher v. Gt. Northern Ry., 136. 
 Fiske & Sons v. B. & M. R. R., 
 
 454, 1083. 
 Fitchburg R. R. v. Gage, 612, 690. 
 Fitzgerald v. Grand Trunk Ry., 
 
 649, 655, 672, 680, 700. 
 Five Per Cent Case, 218. 
 Five Per Cent Case of 1914, Aug. 2 
 
 and Dec. 18, 1914, 308, 346, 
 
 349, 361, 363, 440, 969.' 
 Flaccus Glass Co. v. C, C, C. & 
 
 St. Louis Ry., 1097. 
 Flint & Walling M'fg Co. v. G. R. 
 
 & I. Ry., 798. 
 Florida Cotton Oil Co. v. C. of 
 
 G. Ry., 872. 
 Florida, C. & P. R. R. Co. v. State 
 
 ex rel., 928. 
 Florida East Coast Line v. U. S., 
 
 1146. 
 Florida Fruit & Vegetable Ass'n 
 
 [Ixi] 
 
Table of Cases Cited 
 
 [References 
 
 V. Atlantic C. L. R. R., 322, 
 
 459, 468, 470, 603, 790, 1074, 
 
 1077. 
 Flour City S. S. Co. v. L. V. R. R., 
 
 134, 140, 175, 203, 782, 801, 
 
 873, 892, 894, 1079, 1087, 
 
 1113. 
 Folmer & Co. v. G. W. Ry., 812, 
 
 1045, 1047. 
 Fond du Lac Church Furnishing 
 
 Co. V. C, M. & St. P. Ry., 
 
 1099. 
 Ford V. W. V. Ry. Co., 165. 
 Ford Co. V. M. C. 'R. R. Co., 439, 
 
 496, 497, 519, 526, 822, 1048. 
 Forest City Freight Bureau v. 
 
 Ann Arbor R., 490, 498, 516, 
 
 528, 569, 1088. 
 Form and Contents of Rate Sched- 
 ules, Re, 838. 
 Forrester v. Southern Ry. Co., 
 
 933. 
 Forster Bros. Co. v. D. S. S. & 
 
 A. Ry., 1048. 
 Fort Dodge Commercial Club v. 
 
 I. C. R. R., 409, 623, 803, 965, 
 
 1077. 
 Fort Smith Traffic Bureau v. St. 
 
 L. & S. R. R., 704. 
 Fort Worth & D. C. Ry. Co. v. 
 
 Whitehead, 127. 
 Forward v. Pittard, 52. 
 Foster G. Co. v. Kansas City So. 
 
 Ry., 1050. 
 Foster Lumber Co. v. G. C. & S. 
 
 F. Ry., 791. 
 Franke Grain Co. v. I. C. R. R., 
 
 816, 817, 1048. 
 Frederick & Kempe Co. v. N. Y., 
 
 N. H. & H. Ry., 802. 
 Freeman v. Atchison, T. & S. F. 
 
 R. R., 1115. 
 Freeman Lumber Co. v. St. L., 
 
 I. M. & S. Ry., 1001, 1060. 
 Freight Bureau v. Cincinnati, N. 
 
 O. & T. P. R. R., 416, 447, 
 
 581, 640, 776, 804, 883, 980, 
 
 984, 1116. 
 
 [ Ixii ] 
 
 are to sections] 
 
 Freight Rates, Re Proposed, 432. 
 Friend Paper Co. v. C, C, C. & 
 
 St. L. Ry., 773. 
 Fruit Growers' Ass'n v. A. C. L. 
 
 Ry., 791. 
 Frye & Bruhn v. Northern P. R. 
 
 Co., 224. 
 Fry V. Louisville & W. Ry., 701. 
 FuUerton Lumber & Shingle Co. 
 
 V. B. B: & B. C. Ry., 112, 769. 
 Fulton V. Chicago, S. P., M. & 
 
 D. R. R., nil. 
 Furhmann v. Cataract Power & 
 
 Conduit Co., 281. 
 Furniture Rates in the Northwest, 
 
 404, 505, 776. 
 
 G 
 
 Galena & C. Y. R. R. Co. v. Yar- 
 
 wood, 164. 
 Galveston, H. & S. A. Ry. v. Piper 
 
 Co., 1013. 
 Galveston, H. & T. C. Ry. v. 
 
 Wallace, 1054. 
 Galveston Commercial Ass'n v. 
 
 A., T. & S. F. Ry. Co., 113, 
 
 117, 134, 768, 773, 804, 869, 
 
 931, 1092. 
 Gamble-Robinson Commission Co. 
 
 V. Chicago & N. W. Ry., 658, 
 
 915. 
 Gamble-Robinson Commission Co. 
 
 V. No. Pac. Ry., 1082. 
 Gamble-Robinson Commission Co. 
 
 V. St. L. & S. F. Ry., 798, 1078, 
 
 1083, 1098, 1110. 
 Gardner v. Southern R. R., 521, 
 
 537, 541, 793, 1056, 1104. 
 Garton v. Bristol & E. R. R. Co., 
 
 692. 
 General Electric Co. v. N. Y. C. & 
 
 H. R. R. R., 738, 819, 1047. 
 George Tileston Mill Co. v. No. 
 
 Pac. Ry., 760. 
 Georgetown Ry. & Light Co. v. 
 
 N. & W. Ry., 793. 
 Georgia R. R. v. Creety, 1050. 
 
Table of Cases Cited 
 
 [References are to sections] 
 
 Georgia-Carolina Buck Co. v. S. 
 
 Ry., 802, 1117. 
 Georgia Peach Growers' Ass'n v. 
 
 Atlantic Coast Line, 418, 436. 
 Geraty v. A. C. L., 1162. 
 Gerke Brewing Co. v. L. & N. Ry., 
 
 763. 
 Germain Co. v. N. O. & N. E. R. 
 
 R., 842, 898, 1117. 
 German KaU Works v. A., T. & 
 
 S. F. Ry., 528, 531. 
 Gibbs V. Consolidated Gas Co., 
 
 979. 
 Gibson Fruit Co. v. C. & N. W. 
 
 Ry., 868, 1099. 
 Gile & Co. V. So. Pac. Ry., 791. 
 Gill V. Erie Ry., 656. 
 GiUis & Son V. P. B. & W. Ry., 
 
 791, 798. 
 Glade Coal Co. v. Baltimore & 0. 
 
 R. R., 419, 716, 1056. 
 Globe Milling Co. v. C, M. & St. 
 
 P. Ry., 600, 776, 1097. 
 Gloucester Water Co. v. Glouces- 
 ter, 218, 254. 
 Goerres Cooperage Co. v. C, M. 
 
 & St. P. Ry., 851. 
 Goldenberg v. Clyde S. S. Co., 818. 
 Goldfield Consolidated M. & T. 
 
 Co. V. A., T. & S. F. Ry., 
 
 582. 
 Goodman M'fg Co. v. P. R. R. Co., 
 
 869. 
 Goodrich v. Union Pac. Ry., 650. 
 Gordon v. Manchester & L. R. R. 
 
 Co., 934. 
 Gottron Bros. Co. v. G. & W. Ry., 
 
 195, 412, 483, 504, 770, 791, 
 
 793. 
 Gough & Co. V. I. C. R. R., 816. 
 Grain Rates in C. F. A. Territory, 
 
 504, 528, 584, 770, 798, 880. 
 Grain Shippers' Ass'n v. Illinois 
 
 Cent. R. R., 230, 263, 436, 
 
 466, 494, 495, 506, 526, 793, 
 
 1056, 1104. 
 Grand Haven v. Grand Haven W. 
 
 W., 362. 
 
 Grand Junction Chamber of Com- 
 merce V. D. & R. G. Ry., 137, 
 
 789, 791. 
 ' Grand Junction Mining & Fuel 
 
 Co. V. C. M. Ry., 403, 759. 
 Grand Trunk Railway, In re, 114, 
 
 1008. 
 Grand Trunk Ry. v. Railroad 
 
 Comm. of Michigan, 131, 150. 
 Granger Cases, 993. 
 Grant Bros. Co. v. Atchison, T. & 
 
 S. F. Ry., 643. 
 Greason v. Ry., 146. 
 Great Northern Ry. v. O'Connor, 
 
 1135. 
 Great Northern Ry. v. Kalispell 
 
 Lumber Co., 1050, 1051, 1136. 
 Gt. Northern Ry. v. Loonan 
 
 Lumber Co., 1031, 1135. 
 Greater Des Moines Committee 
 
 V. C, M. & St. P. Ry., 763, 
 
 793. 
 Green v. Telegraph Co., 171. 
 Green Bay Business Men's Ass'n 
 
 V. B. & 0. Ry., 219. 
 Green Bay Soap Co. v. C, M. & 
 
 St. P. Ry., 523. 
 Greene v. St. John & M. Ry., 205. 
 Greenbaum Co. v. C. & 0. Ry. Co., 
 
 773, 1046. 
 Grenada Oil Mill v. I. C. R. R., 
 
 1093. 
 Griffee v. Burhngton & M. R. Ry., 
 
 627. 
 Griffin v. Goldsboro Water Co., 
 
 620, 649. 
 GrifiSn v. So. W. Pa. Pipe Lines, 
 
 170. 
 Griffing v. C. & N. W. Ry., 505, 
 
 1107. 
 Grimes v. Minneapolis, L. & M. 
 
 Ry., 652. 
 Gulf, C. & S. F. Ry. Co. v. Fort 
 
 Grain Co., 133. 
 Gulf, C. & S. F. Ry. Co. v. Hefley, 
 
 143, 1050, 1136. 
 Gulf, C. & S. F. Ry. Co. v. Miami 
 
 S. S. Co., 885, 888. 
 
 [ Ixiii ] 
 
Table of Cases Cited 
 
 [References are to sections] 
 
 Gulf, C. & S. F. Ry. Co. v. Nelson, 
 
 132, 836. 
 
 Gulf, C. & S. F. Ry. Co. v. Rail- 
 road Commission (Tex.), 231, 
 392, 401. 
 
 Gulf, C. & S. F. Ry. Co. v. State, 
 
 133, 936. 
 
 Gulf, C. & S. F. R. Co. V. Texas, 
 
 128, 138. 
 Gulf Coast Navigation Co. v. K. 
 
 C. S. Ry., 194. 
 Gund & Co. V. C, B. & Q. Ry., 
 
 185, 759. 
 Gustin V. Atchison, T. & S. F. R. 
 
 R., 443, 581, 598, 766. 
 Guthril V. Chicago, R. I. & P. Ry., 
 
 1100. 
 
 H 
 
 Haddock v. Delaware, L. & W. R. 
 
 R., 3 Int. Com. Rep. 302, 4 
 
 I. C. C. 296, 644, 1121. 
 Hafey v. St. L. & S. F. Ry., 437, 
 
 771. ■ 
 Hagan Iron Co. v. Pennsylvania 
 
 R. R., 840. 
 Hail V. Decuir, 149. 
 Haines v. Chicago, R. I. & P. R., 
 
 122, 1045. 
 Hamilton v. Chattanooga, R. & 
 
 C. R. R., 766. 
 Hampton Board of Trade v. Nash- 
 ville C. & S. L. Ry., 766. 
 Hampton Mf'g Co. v. 0. D. S. S. 
 
 Co., 838, 1044. 
 Handy v. Railroad Co., 677. 
 Hanley v. Kansas City So. Ry. 
 
 Co., 125. 
 Hanley Milling Co. v. P. Co., 1059. 
 Hanna Coal Co. v. Nor. Pac, 
 
 824. 
 Harbor City Wholesale Co. of San 
 
 Pedro V. S. P. Co., 119, 753, 
 
 771, 802, 912, 1093. 
 Hardaway v. Southern Ry., 1043, 
 
 1055. 
 Hardie Mf'g Co. v. 0. R. R. & N. 
 
 Co., 704. 
 [ Ixiv ] 
 
 Harding v. Chicago & A. R. R., 
 
 1122. 
 Harding v. C, St. P., M. & O. R. 
 
 Co., 756. 
 Hare v. London & Northwestern 
 
 Ry., 979. 
 Harp V. Choctaw, 0. & G. R. R., 
 
 200, 745, 924. 
 Harriman v. Interstate Commerce 
 
 Commission, 1015, 1141, 1157. 
 Harris v. Cockermouth & W. R. 
 
 Co., 674. 
 Harris v. Duval, 1111. 
 Harte v. State, 149. 
 Harvard Co. v. Pennsylvania Ry., 
 
 624, 538, 548. 
 Harvey v. L. & N. R. R., 636. 
 Haurigan v. Chicago & N. W. Ry. 
 
 Co., 1050. 
 Havens & Co. v. C. & N. W. Ry. 
 
 Co., 641. 
 Haverhill Box Board Co. v. B. & 
 
 A. R. R. Co., 125, 897. 
 Hayden & W. Lumber Co. v. Gulf 
 
 & S. I. R. R., 1077. 
 Hays V. Pennsylvania Co., 638, 
 
 680, 684, 713, 717, 718, 720. 
 Heard v. Georgia R. R., 712. 
 Heck V. East Tennessee, V. & G. 
 
 R. R., 135, 187, 1056. 
 Hecker- Jones- Jewell Milling Co. 
 
 V. Baltimore & 0. R. R., 776, 
 
 881. 
 Heileman Brewing Co. v. C, M. 
 
 & St. P. Ry., 789. 
 Henderson Elevator Co. v. Illi- 
 nois Central R. R., 880. 
 Hennepin Paper Co. v. N. P. R. 
 
 R., 1097. 
 Bennington v. Georgia, 161. 
 Herbeck Demer Co. v. B. & 0. 
 
 R. R., 640, 758. 
 Herndon v. Chicago, R. I. & P. 
 
 R. R. Co., 147. 
 Hettler Lumber Co. v. G. & S. I. 
 
 R. R. Co., 869. 
 Hewins v. New York, N. H. & 
 
 H. R. R., 168, 715. 
 
Table of Cases Cited 
 
 [References 
 
 Hezel Milling Co. v. St. Louis, A. 
 
 & T. H. R. R., 625, 678, 714. 
 Highland Park M'fg Co. v. S. Rv., 
 
 825, 845. 
 Hill V. P. R. R., 581, 666, 763, 787, 
 
 1058. 
 Hillsdale Coal & Coke Co. v. P. 
 
 R. R., 927, 939, 940, 944, 945, 
 
 1011, 1059. 
 Hilton Lumber Co. v. Atlantic 
 
 Coast Line, 638, 690, 702. 
 Hilton Lumber Co. v. Wilmington 
 
 & W. R. R., 388, 442, 580, 
 
 581. 
 Hines & Battle v. Wilmington & 
 
 C. Ry., 715. 
 Hitchman Coal & Coke Co. v. B. 
 
 & 0. R. R. Co., 309, 759, 803, 
 
 804. 
 Hocking Valley Ry. v. United 
 
 States, 915. 
 Holbrook v. St. Paul, M. & M. 
 
 R. R., 1100, 1102. 
 Holcomb, Hayes & Co. v. Illinois 
 
 C. R. R., 1105. 
 Holdzkom v. M. C. Ry., 793. 
 Holland Blow Stave Co. v. A. C. 
 
 L. R. R., 517, 773, 793, 1081. 
 Holland v. Festiniog R. Co., 726. 
 Hollingshead & B. v. P. & L. E., 
 
 868. 
 Hollingshead & Co. v. P. Co., 915. 
 Holmes v. Southern R. R., 563, 
 
 1116, 1122. 
 Home Telephone Co. v. Los Ange- 
 les, 1137. 
 Hood & Son V. Delaware & Hud- 
 son, 551, 847. 
 Hooker v. Interstate Commerce 
 
 Commission, 227, 235, 304, 
 
 329, 457. 
 Hooker v. Vandewater, 979. 
 Hooper v. C, M. & St. P. Ry., 449. 
 Hooper v. Chicago & N. W. R. R., 
 
 865. 
 Hooper v. Knapp, 1137. 
 Hoover v. Pennsylvania R. R. Co., 
 
 234, 638, 649, 700, 701. 
 
 are to sectioas] 
 
 Hope Cotton Oil Co. v. Texas & 
 
 P. Ry., 419, 697, 716, 1056. 
 Hormel & Co. v. C, M. & St. P. 
 
 Ry., 253, 347, 349. 
 Hot Springs v. Curry, 209. 
 Hot Springs v. Western N. C. R. 
 
 R., 1102. 
 Houston Coal & Coke Co. v. N. & 
 
 W. Ry., 1136. 
 Houston D. & N. Co. v. Insurance 
 
 Co., 133. 
 Houston, E. & W. T. Ry. v. United 
 
 States, 100, 769, 966, 1140. 
 Houston & T. C. Ry. Co. v. Davis, 
 
 132. 
 Houston & T. C. Ry. v. Mayes, 
 
 144. 
 Houston & T. C. Ry. v. Rust & D., 
 
 613. 
 Houston & T. C. R. R. Co. v. 
 
 Storey, 296, 368. 
 Houston & T. C. Ry. Co. v. Wil- 
 liams, 132. 
 Howard Mills Co. v. Mo. Pac. Ry., 
 
 761. 
 Howard Supply Co. v. C. & 0. Ry., 
 
 1136. 
 Howell V. New York, L. E. & W. 
 
 R. R., 418, 436, 448, 526, 550, 
 
 766. 
 Hoyt V. Chicago, B. & Q. R. R., 
 
 202. 
 Huerfano Coal Co. v. C. & S. E. 
 
 R. R., 937, 938. 
 Hull V. So. Pac. Co., 842, 849. 
 Hull Co. V. M. P. Ry., 540. 
 Humboldt S. S. Co. v. White Pass 
 
 & Y. R., 112, 122, 175, 1048, 
 
 1103. 
 Hurlburt v. Lake Shore & M. S. 
 
 R. R., 493, 564, 716, 1091, 
 
 1097, 1112. 
 Hurley v. Big Sandy & C. Ry. Co., 
 
 656. 
 Hussey v. ' C, R. I. «fe P. Ry., 
 
 1001. 
 Hutchison C. & C. Co. v. B. & 0. 
 
 R. R., 646. 
 
 [ Ixv 1 
 
Table of Cases Cited 
 
 [Refereaces 
 
 Hutchinson MiU Co. v. A., T. & 
 
 S. F. Ry., 820, 849. 
 Hydraulic Press Brick Co. v. St. 
 
 Louis & S. F. Ry., 593, 846. 
 Hydraulic Press Brick Co. v. Van- 
 
 dalia R. R., 783, 1076. 
 
 Idaho Commercial Clubs v. O. S. 
 
 L. R. R., 408, 589. 
 Illinois C. Ry. v. Behrends, 143. 
 Illinois C. R. Co. v. Dunnigan, 647. 
 Illinois C. Ry. v. Henderson E. Co., 
 
 818, 1050. 
 Illinois C. Ry. v. Interstate Com. 
 
 Comm., 358, 1134, 1164. 
 Illinois Central Ry. v. Seitz, 493, 
 
 648. 
 Ilwaco R. & Nav. Co. v. Oregon 
 
 S. L. & U. N. Ry., 883, 920. 
 Imperial Coal Co. v. Pittsburgh 
 
 & L. E. R. R., 549, 580, 787, 
 
 807. 
 Independent Refiners' Ass'n v. 
 
 W. N. Y. & P. R. R., 714, 732, 
 
 1163. 
 Independent Relief Ass'n v. West- 
 ern N. Y. & P. R. R., 1097. 
 Indian Supplies, Re, 641. 
 Indiana Steel & Wire Co. v. C, 
 
 R. I. & P. Ry., 774. 
 Indianapolis Freight Bureau v. 
 
 Chicago, C, C, & St. L., 197, 
 
 460, 463, 493, 545, 583, 592, 
 
 695, 742, 753, 758, 761, 768, 
 
 771, 776, 790, 791, 793, 833, 
 
 880. 
 Indianapolis Freight Bureau v. 
 
 P. R. R., 460, 793, 1068. 
 Industrial Lumber Co. v. St. L. 
 
 W. & G. Ry. Co., 119, 737, 
 
 793. 
 Industrial Railway Case, 196. 
 Industrial Siding Case, 924. 
 Ingate v. Christie, 188. 
 Inman, Akers & G. v. A. C. L. Ry., 
 
 184. 
 
 [ Ixvi ] 
 
 are to sections] 
 
 Inmates of National Homes, Re, 
 
 1039. 
 Interior Iowa Cities Case, 584, 598, 
 
 880, 898, 900. 
 International Agricultural Corpo- 
 ration V. L. & N. R. R., 517, 
 
 776. 
 International Salt Co. v. G. & W. 
 
 R. R., 731, 791, 793. 
 International & G. N. Ry. Co. v. 
 
 Railroad Commission of Texas, 
 
 882. 
 Interstate Commerce Commission 
 
 V. Alabama Midland Ry., 
 
 420, 758, 772, 791, 793, 797, 
 
 798, 808, 1032, 1033, 1144. 
 Interstate Commerce Commission 
 
 v.A.,T.&S.F.Ry. (231U.S. 
 
 736), 97, 236, 601, 743, 782, 
 
 791, 1038, 1145. 
 Interstate Commerce Commission 
 
 V. A., T. & S. F. Ry. (234 
 
 U. S. 294), 129, 150, 177, 196, 
 
 573, 743. 
 Interstate Commerce Commission 
 
 V. A., T. & S. F. Ry. (50 Fed. 
 
 295), 782, 791, 1163. 
 Interstate Commerce Commission 
 
 V. Baird, 1014, 1021, 1144, 
 
 1147. 
 Interstate Commerce Commission 
 
 V. B. & O. R. R. (145 U. S. 
 
 163), 639, 641, 688, 711, 717, 
 
 718, 720, 727, 758, 1144. 
 Interstate Commerce Commission 
 
 V. B. & 0. R. R. (225 U. S. 
 
 326), 646, 705, 708. 
 Interstate Commerce Commission 
 
 V. B. & 0. R. R. (43 Fed. 37, 
 
 420), 712, 1032, 1162. 
 Interstate Commerce Commission 
 
 V. Bellaire C. & Z. R. R., 830, 
 
 952, 1141. 
 Interstate Commerce Commission 
 
 V. Brimson, 1014, 1157. 
 Interstate Commerce Commission 
 
 V. Chesapeake & 0. Ry. Co., 
 
 128 Fed. 59, 648, 650, 834. 
 
Table of Cases Cited 
 
 [References are to sections] 
 
 Interstate Commerce Commission 
 
 V. Chicago & Alton R. R. Co., 
 
 945. 
 Interstate Commerce Commission 
 
 V. Chicago, B. & Q. R. R., 
 
 579, 923, 1164. 
 Interstate Commerce Commission 
 
 V. Chicago Gt. W. Ry., 420, 
 
 435, 436, 517, 712, 719, 758, 
 
 777, 793, 803, 1005, 1144. 
 Interstate Commerce Commission 
 
 V. C. P. & V. Ry., 1145, 1163. 
 Interstate Commerce Commission 
 
 V. Chicago, R. I. & P. Ry., 
 
 775, 1036, 1134. 
 Interstate Commerce Commission 
 
 V. Cinn., H. & D. Ry., 1134. 
 Interstate Commerce Commission 
 
 V. Cincinnati, N. 0. & T. P. 
 
 Ry., 142, 236, 1032, 1033, 
 
 1133, 1141. 
 
 Interstate Commerce Commission 
 V. Clyde S. S. Co., 791, 793, 
 
 1134, 1144. 
 
 Interstate Commerce Commission 
 
 V. Delaware, L. & W. R. R. 
 
 Co., 216 U. S. 531, 925, 1141, 
 
 1144, 1148. 
 Interstate Commerce Commission 
 
 V. D., L. & W. R. R. Co. (220 
 
 U. S. 235), 208, 538, 918, 1134. 
 Interstate Commerce Commission 
 
 V. D., L. & W. R. R. Co. (64 
 
 Fed. 723), 436, 489, 517, 529, 
 
 1038, 1161. 
 Interstate Commerce Commission 
 
 V. Detroit, G. H. & M. Ry., 
 
 179, 419, 679, 768, 804, 816, 
 
 1144, 1159. 
 Interstate Commerce Commission 
 
 V. Diffenbaugh, 776, 794, 1144, 
 
 1146. 
 Interstate Commerce Commission 
 
 V. East Tennessee V. & G. Ry., 
 
 754, 796, 1161. 
 Interstate Commerce Commission 
 
 V. Goodrich Transit Co., 134, 
 
 259, 953, 999, 1010, 1133. 
 
 Interstate Commerce Commission 
 
 V. Humbolt S. S. Co., 122, 
 
 1137, 1141. 
 Interstate Commerce Commission 
 
 V. IlUnois C. R. R., 939, 944, 
 
 1132, 1136. 
 Interstate Commerce Commission 
 
 V. L. S. & M. S. Ry., 488, 502, 
 
 728, 1161. 
 Interstate Commerce Commission 
 
 V. Lehigh VaUey R. R., 414, 
 
 1032, 1141, 1164. 
 Interstate Commerce Commission 
 
 V. Louisville & N. R. R. (5 I. 
 
 C. C. Rep. 656), 419, 1032, 
 
 1134, 1161, 1164. 
 Interstate Commerce Commission 
 
 V. Louisville & N. R. R. (227 
 
 U. S. 88), 1020, 1106, 1134, 
 
 1143, 1146, 1147. 
 Interstate Commerce Commission, 
 
 V. L. & N. R. R. (190 U. S. 
 
 273), 420, 599, 766, 791, 799, 
 
 800, 808, 1135. 
 Interstate Commerce Commission 
 
 V. Louisville & N. R. R. (5o 
 
 Fed. 409), 449. 
 Interstate Commerce Commission 
 
 V. Louisville & N. R. R. (73 
 
 Fed. 110), 1061. ■ 
 Interstate Commerce Commission 
 
 v. Louisville & N. R. R. (73 
 
 Fed. 409), 752, 1133, 1145. 
 Interstate Commerce Commission 
 
 V. Louisville & N. R. R. (101 
 
 Fed. 146), 1150. 
 Interstate Commerce Commission 
 
 V. Louisville & N. R. R. (118 
 
 Fed. 613), 370, 447, 768, 
 
 776. 
 Interstate Commerce Commission 
 
 V. Nashville, C. & S. L. Ry., 
 
 446, 448, 756, 1144. 
 Interstate Commerce Commission 
 
 v. N. E. Ry. of S. C, 1141. 
 Interstate Commerce Commission 
 
 V. New York P. & N. Ry., 
 
 1141. 
 
 [ Ixvii ] 
 
Table of Cases Cited 
 
 [References are to sections] 
 
 Interstate Commerce Commission 
 
 V. Norfolk & W., 176, 214, 
 
 1032, 1034. 
 Interstate Commerce Commission 
 
 V. Northampton Ry., 1032. 
 Interstate Commerce Commission 
 
 V. No. Pac. Ry., 892, 1141, 
 
 1144, 1148. 
 Interstate Commerce Commission 
 
 V. Reichman, 744, 1015. 
 Interstate Conmierce Commission 
 
 V. Seaboard A. L. Ry., 952. 
 Interstate Commerce Commission 
 
 V. Southern Ry., 755, 791, 
 
 793, 801, 1144. 
 Interstate Commerce Commission 
 
 V. Southern Pac. Co., 1084, 
 
 1150, 1161. 
 Interstate Commerce Commission 
 
 V. Stickney, 214, 238, 304, 
 
 411, 570, 1035, 1144. 
 Interstate Commerce Commission 
 
 V. Texas & Pac, 1153. 
 Interstate Commerce Commission 
 
 V. Union Pac. R. R. (212 U. S. 
 
 541), 411, 1132, 1147. 
 Interstate Commerce Commission 
 
 V. Union Pac. R. R. (222 U. S. 
 
 541), 236, 304, 763, 1134. 
 Interstate 'Commerce Commission 
 
 V. Western A. R. R. Co. (88 
 
 Fed. 187), 410, 791. 
 Interstate Commerce Commission 
 
 V. Western A. R. R. Co. (93 
 
 Fed. 83), 762. 
 Interstate Commerce Commission 
 
 V. Western A. R. R. Co. (181 
 
 U. S. 29), 808. 
 Interstate Commerce Commission 
 
 V. W. N. Y. & P., 937, 1162, 
 
 1163. 
 Interstate Stockyards Co. v. In- 
 dianapolis Ry. Co., 131, 133, 
 
 204. 
 I. C. C. Conference Ruling No. 281, 
 
 849. 
 I. C. C. Conference Ruling No. 296, 
 
 916. 
 
 [ Ixviii ] 
 
 I. C. C. Conference Ruling No. 374, 
 
 952. 
 I. C. C. Conference Ruhng No. 381 , 
 
 952. 
 Interstate Consolidated St. Ry. 
 
 Co. V. Massachusetts, 400. 
 Inverness Chamber of Commerce 
 
 V. Highland Ry., 709. 
 Investigation of Advances in Rates 
 
 on Cement, In re, 243, 440. 
 Investigation of Advances in Rates 
 
 on Grain, In re, 228, 753. 
 Investigation of Alleged Unrea- 
 sonable Rates on Meats, 768, 
 
 771, 776, 895. 
 Investigation & Suspension Docket, 
 
 In re, 600, 654. 
 lola Portland Cement Co. v. M., 
 
 K. & T. Ry., 1112. 
 Iowa V. A. C. L. R. R., 1044. 
 Iowa Barb Steel Wire Co., Re, 
 
 1039. 
 Iowa V. Chicago, M. & S. P. Ry., 
 
 885. 
 Iowa Grain Rates, 791. 
 Iowa & G. M. Ry. v. C, B. & Q. 
 
 Ry., 176. 
 Iowa-Minnesota Cement Rates, 
 
 504, 521, 784. 
 Iowa State Board of Railroad 
 
 Commissioners v. A. E. Ry., 
 
 490, 551, 764, 768, 771, 785, 
 
 791, 894. 
 Ireland & Rollings v. St. L. & S. 
 
 F. R. R., 507. 
 Isbell-Brown Co. v. M. C. R. R., 
 
 1048, 1100. 
 
 Jackson v. Rogers, 5. 
 
 Jackson v. St. Louis, A. & T. Ry., 
 
 1100. 
 Jackson Arcliitectural Iron Works 
 
 V. Hurlbut, 785. 
 Jackson & Perkins v. S. P. Co., 
 
 835. 
 Jacoby & Co. v. P. R. R., 1059, 
 
 1135. 
 
Table of Cases Cited 
 
 [References are to sections] 
 
 James v. Canadian P. R. R., 501, 
 
 776, 1086, 1116. 
 James v. East Tennessee V. & 
 
 G. R. R., 565, 590, 763. 
 James & A. Co. v. B. & M. R. R., 
 
 491, 528. 
 James & M. B. Co. v. C, N. 0. & 
 
 T. P. Ry., 763, 776. 
 Janesville Clothing Co. v. C. & 
 
 N. W. Ry., 803. 
 Jennings v. Big Sandy & C. Ry. 
 
 Co., 145. 
 Jennison Co. v. Gt. Northern Ry., 
 
 462, 795, 1091. 
 Jerome Hill Cotton Co. v. Mis- 
 souri, K. & T. Ry., 229, 230. 
 Jobbins v. C. & N. W., 824. 
 Johnson v. A., T. & S. F. Ry., 1048. 
 Johnson v. C, S. P., M. & O. Ry., 
 
 817. 
 Johnson v. C, M. & St. P. Ry., 
 
 754. 
 Johnson v. Dominion Exp. Co., 
 
 208, 918. . 
 
 Johnson v. Midland Ry., 200. f 
 
 Johnson v. M., St. P. & S. S. M. 
 
 Ry., 128, 840. 
 Johnson v. Pensacola & P. R. R., 
 
 612, 614, 649, 672, 675. 
 Johnson & Co. v. A., T. & S. F. Ry., 
 
 828. 
 Johnson & Hunt v. St. L., I. M. 
 
 & S. Ry. Co., 90, 125. 
 Johnston-Larimer D. G. Co. v. 
 
 Atchison, T. & S. F. R. R., 791, 
 
 844. 
 Joint Coal Rates to Clinton, Iowa, 
 
 468. 
 Joint Rates with Washington West- 
 ern Ry., 195. 
 Joint Water & Rail Lines, Re, 870. 
 Joice & Co. V. Illinois Central Ry., 
 
 1105. 
 Jones V. K. C. S. Ry., 1099. 
 Jones V. Newport N. & M. V. R. 
 
 R., 924. 
 Jones V. Southern Ry., 207. 
 Jones V. St. L. & S. F. R., 928. 
 
 Jones Bros. Co. v. M. & W. R. 
 
 R. R., 706, 1092. 
 Joynes v. Pennsylvania R. R., 1003, 
 
 1016. 
 Jubitz V. S. P. Co., 137, 764, 1086. 
 Junod V. Chicago & N. W. Ry., 
 
 787. 
 Jurisdiction in Alaska, In re, 1132, 
 
 1133. 
 Jurisdiction over Water Carriers, In 
 
 re, 163. 
 
 K 
 
 Kansas v. A., T. & S. F. Ry., 233, 
 
 585. 
 Kansas City v. K. C. U. & T. Ry., 
 
 135, 162, 165, 174, 190, 1045. 
 Kansas City Ass'n v. M. P. Ry., 
 
 442. 
 Kansas City So. Ry. v. Kan. Valley 
 
 Dist., 148. 
 Kansas City So. Ry. v. Tonn, 1055. 
 Kansas City So. Ry. v. United 
 
 States, 256, 365, 854, 856, 953, 
 
 999, 1133. 
 Kansas City & M. Ry. Rate Can- 
 cellation, 179, 898. 
 Kansas City Ry. v. Albers C. Co., 
 
 1145. 
 Kansas City Transportation Bu- 
 reau V. A., T. & S. F. Ry., 589, 
 
 593, 761, 763, 770, 776, 804. 
 Kansas-Iowa Brick Rates, 373, 384, 
 
 589, 785, 802. 
 Kansas Pac. Ry. v. McCann, 577. 
 Kansas Pacific Ry. Co. v. Nichols, 
 
 204. 
 Kansas Wholesale Grocery Co. v. 
 
 A. & W. Ry., 763. 
 Kauffman Milhng Co. v. Mo. Pac. 
 
 Ry., 1061. 
 Kaufmann Commercial Club v. 
 
 T. & N. D. Ry., 808. 
 Kaye & Carter Lumber Co. v. C, 
 
 M. & St. P. Ry., 831. 
 Keats Auto Co. v. 0. R. R. & N. 
 
 Co., 793. 
 Keller v. St. L. S. Ry., 436. 
 
 [Ixix] 
 
Table of Cases Cited 
 
 [References 
 
 Kellogg Food Co. v. G. T. Ry. of 
 
 Canada, 494. 
 Kellogg Toasted Corn Flake Co. 
 
 V. M. C. Ry., 768, 784, 791, 
 
 792. 
 Kennebec Water Dist. v. Water- 
 
 ville, 215, 275, 278. 
 Kennedy & Co. v. St. L. S. W. Ry., 
 
 837, 840, 874. 
 Kenner Truck Farmers' Ass'n v. 
 
 111. Cent. Ry., 794. 
 Kent Co. v. N. Y. C. & H. R. R. R., 
 
 648. 
 Kentucky & I. B. Co. v. Louisville 
 
 & N. R. R., 129, 174, 870, 882, 
 
 884, 885, 1000, 1011, 1093, 
 
 1133, 1138, 1145, 1148. 
 Kentucky R. R. Com'rs v. Cincin- 
 nati, N. 0. & T. P. Ry., 446. 
 Kentucky Wagon Mf'g Co. v. I. 
 
 C. Ry., 799. 
 Kentucky Wagon Mf'g Co. v. Ohio 
 
 & M. Ry., 577. 
 Keogh V. M., St. P. & S. Ste. M. 
 
 Ry., 137, 967. 
 Kessler & Co. v. L. & N. R. R., 
 
 874. 
 Kettle River R. R. Co. v. Eastern 
 
 Ry., 191. 
 Keystone Elevator Co., In re, 741. 
 Kibbe v. St. L., B. & M. Ry., 
 
 533. 
 Kibler v. Southern Ry., 566. 
 Kile & M. V. D. Ry., 837. 
 Kimberly v. C. & O. Ry., 784. 
 Kindel v. Adams Express Co., 166, 
 
 307, 600, 771, 793. 
 Kindel v. Boston & A. R. R., 119, 
 
 121, 764, 766, 841. 
 Kindel v. N. Y., N. H. & H. Ry., 
 
 386, 758, 761, 776. 
 Kindelon & Co. v. Southern Pa- 
 cific, 1106. 
 King V. New York, N. H. & H. R. 
 
 R., 876. 
 Kingfisher Mill & Elevator Co. v. 
 
 Chicago, R. I. & P. R., 1100. 
 Kinnavey v. Terminal R. R., 829. 
 
 [Ixx] 
 
 are to sections] 
 
 Kinsley v. Buffalo, N. Y. & P. R. 
 
 R., 680, 686. 
 Kiser Co. v. Central of Ga. Ry., 
 
 542, 547, 1078. 
 Klauer Mf'g Co. v. A., T. & S. F. 
 
 Ry., 503. 
 Kleibacker v. L. & N. R. R., 551, 
 
 1087. 
 Knapp, Com., in Board of Trade 
 
 of Lynchburg v. Old Dominion 
 
 S. S. Co., 753. 
 Knapp, Com., in Commercial Club 
 
 of Omaha v. Chicago & N. R. 
 
 R., 759. 
 Knoxville v. Knoxville Water Co., 
 
 255, 262, 289, 367, 855. 
 Koch V. Pennsylvania Ry., 805, 
 
 878. 
 Koch Secret Service v. Louisville 
 
 & N. Ry., 689. 
 Koehler, ex parte, 127, 132, 643, 
 
 791, 793. 
 Kurtz V. Pa. Ry., 451. 
 
 L 
 
 La Crosse, M. & J. Union v. Chi- 
 cago, M. & S. P. Ry., 416, 763. 
 Lagomarcino-Grup Co. v. I. C. 
 
 R. R., 444. 
 La Grange Chamber of Commerce 
 
 V. A. & W. P. Ry., 202, 599, 
 
 773, 793. 
 Lake Shore & M. S. Ry. Co. v. 
 
 Ohio, 149. 
 Lake Shore & M. S. Ry. v. Smith, 
 
 400, 727, 993. 
 Lamb, McGregor & Co. v. C. & 
 
 N. W. Ry., 1098. 
 Lamson v. Grand Trunk Ry., 650. 
 Landers, Frary & Clark v. A., T. 
 
 & S. F. Ry., 507. 
 Laner & Son v. So. Pac. Ry., 804. 
 Langdon v. Penn. R. R., 635, 659, 
 
 819, 1042. 
 Lanmg-Harris Coal & Grain Co. 
 
 V. A., T. & S. F. R. Co., 177, 
 
 202. 
 
Table of Cases Cited 
 
 [References are to sections] 
 
 Laning-Harris Coal & Grain Co. v. 
 
 Missouri P. R., 589, 839. 
 Laning-Harris Coal & Grain Co. 
 
 V. St. L. & S. S. F. R. R., 
 
 1046, 1047, 1048. 
 
 Larkin Co. v. E. & W. T. Co., 
 
 1047, 1058. 
 
 Larrison v. Chicago & G. T. Ry., 
 
 640. 
 Larson Lumber Co. v. G. N. Ry. 
 
 Co., 848, 1092. 
 LaSalle & B. County R. Co. v. 
 
 Chicago & N. W. R. Co., 814, 
 
 1075, 1080. 
 LaSalle Paper Co. v. M. C. Ry., 
 
 16 I. C. C. 149, 802. 
 Laurel Mills v. Railroad Co., 655. 
 La very v. New York C. & H. R. 
 
 R. R., 714. 
 Lawrence-Wardenburg Co. v. S. 
 
 P. Co., 601. 
 Lead Commercial Club v. C. & N. 
 
 W. Ry., 799. 
 League of So. Idaho Commercial 
 
 Clubs V. Ore. Short Line, 375, 
 
 784. 
 Lebanon Commercial Club v. L. 
 
 & N. Ry., 137, 776, 791, 793. 
 Lee Co. v. I. C. R. R. Co., 508. 
 Leggett & Piatt Spring Bed & 
 
 Mf'g Co. V. M. P. Ry., 517. 
 Lehigh Valley v. Clark, 1146, 1164. 
 Lehigh Valley v. Meeker, 1158, 
 
 1163. 
 Lehigh Valley R. R. v. Pennsyl- 
 vania, 125. 
 Lehigh Valley R. R. v. Rainey, 
 
 627. 
 Lehigh Valley R. R. Co. v. United 
 
 States, 552, 813, 821, 1142. 
 Lehman v. Texas & P. Ry., 804. 
 Lehman-Higginson Grocery Co. v. 
 
 A., T. & S. F. Ry., 793. 
 Lemon v. Pullman P. Car Co., 167. 
 Leo P. Harlow, Trustee, v. W. S. 
 
 Ry., 835. 
 Leonard v. Chicago & A. R. R., 2 
 
 Int. Com. Rep. 419, 568. 
 
 Leonard v. K. C. S. Ry. Co., 124, 
 
 136. 
 Leonard v. Union Pacific Ry., 1100. 
 Lesinsky V. A., T. & S. F. Ry., 1107. 
 Lewis V. Chesapeake & Ohio Ry. 
 
 Co., 890. 
 Lewis V. C, B. & Q. Ry., 786. 
 Liberty Mills v. Louisville & M. R. 
 
 R., 1095. 
 Lilly V. Northern Pacific Ry., 1051, 
 
 1052, 1162. 
 Lincoln Board of Trade v. B. & 
 
 M. Ry., 757, 763, 771. 
 Lincoln Board of Trade v. Mis- 
 souri Pac. Ry., 758. 
 Lincoln Board of Trade v. Union 
 
 P. R. R., nil. 
 Lincoln Creamery v. Union P. 
 
 Ry., 446. 
 Lindsay Bros. v. B. & 0. S. W., 
 
 802, 839. 
 Lindsay Bros. v. C, R. & I. R. R., 
 
 1098. 
 Lindsay Bros. v. L. S. & M. Ry., 
 
 901. 
 Lindsay Bros. v. P. M. R. R., 385, 
 
 386, 467, 846. 
 Lippman v. Illinois Cent. R. R., 
 
 872, 875. 
 Listman Mill Co. v. Chicago, M. 
 
 & S. P. Ry., 805. 
 Little Rock Chamber of Commerce 
 
 V. St. L., I. M. & S. Ry., 404. 
 Little Rock & M. Ry. v. Oppen- 
 
 heimer, 768. 
 Little Rock & M. Ry. v. East 
 
 Tennessee, V. & G. R. R., 
 
 883, 1138. 
 Little Rock & M. Ry. v. St. Louis 
 
 S. W., 657, 870, 885, 927. 
 Local Telephone Service at Pitts- 
 burg, 172. 
 Loch Lynn Construction Co. v. 
 
 Baltimore & 0. R. R., 659, 
 
 758, 920. 
 Loftus V. Pullman Co., 1064, 1122. 
 Logan V. Chicago & N. W. R. Co., 
 
 767. 
 
 [Ixxi] 
 
Table of Cases Cited 
 
 (References 
 
 Logan Coal Co. v. Pennsylvania 
 
 Ry. Co., 945. 
 Logansport Gas Co. v. Peru, 270. 
 London & Northwestern R. R. v. 
 
 Evershed, 673. 
 Long Branch Commission v. Tin- 
 turn Manor Water Co., 282, 
 
 319, 362. 
 Lorraine v. Pittsburg J. E. & E. 
 
 R. R., 652. 
 Los Angeles Switching Case, 1134. 
 Loud V. South Carolina Ry., 418, 
 
 443, 521. 
 Lough V. Outerbridge, 612, 617, 
 
 638, 672, 690. • 
 Louis S. W. Ry. Co. v. Phoenix 
 
 Cotton Oil Co., 937. 
 Louisiana Railroad Coram, v. Cum- 
 berland Telephone Co., 367, 
 
 855. 
 Louisiana Sugar Planters' Ass'n 
 
 V. I. C. Ry., 758. 
 Louisiana & P. R. R. v. United 
 
 States, 999. 
 Louisville Board of Trade v. I. C. 
 
 & S. T. Co., 165. 
 Louisville Cotton Seed Products 
 
 Co. V. L. & N. R. R., 450, 463, 
 
 517. 
 Louisville, E. & St. L. C. R. R. v. 
 
 Crown Coal Co., 707. 
 LouisviUe, E. & St. L. C. R. R. v. 
 
 Wilson, 649, 651, 690, 691, 693, 
 
 695. 
 Louisville & N. Ry. Co., In re, 
 
 782, 1122. 
 Louisville & N. Ry. v. Behlmer, 
 
 131, 782, 793, 1135, 1145. 
 Louisville & N. Ry. v. Brown, 
 
 279, 316, 335, 370, 375, 996. 
 Louisville & N. Ry. Coal and 
 
 Coke Rates, 343, 349, 358, 
 
 372, 373, 384, 402, 413, 494, 
 
 858, 1114. 
 Louisville & N. Ry. v. Common- 
 wealth, 703, 713, 791. 
 Louisville & N. Ry. v. Cook Brew. 
 
 Co., 1013, 1135. 
 
 [ Ixxii ] 
 
 are to sections] 
 
 Louisville & N. Ry. Co. v. Co- 
 quillard Wagon Wks., 648. 
 
 Louisville & N. Ry. Co. v. Cen- 
 tral S. Y. Co., 148, 923, 937. 
 
 Louisville v. N. Ry. Co. v. Dick- 
 erson, 1158. 
 
 Louisville & N. Ry. Co. v. Eu- 
 bank, 143. 
 
 Louisville & N. Ry. v. Finn, 1145. 
 
 Louisville & N. Ry. v. Fulgnam, 
 649, 701. 
 
 Louisville & N. fey. v. Garrett, 
 304, 306, 1133, 1134, 1137, 
 1142, 1151. 
 
 Louisville & N. Ry. v. Higden, 148. 
 
 Louisville & N. Ry. v. I. C. C. 
 (184 Fed. 118), 130, 449, 
 1021, 1134, 1144, 1146, 1157. 
 
 LouisviUe & N. Ry. v. I. C. C, 
 (195 Fed. 118), 997, 1007, 
 1009. 
 
 Louisville & N. Ry. v. I. C. C. 
 (206 U. S. 142), 1073. 
 
 Louisville & N. Ry. Co. v. M., 
 St. P. & S. S. M. Ry., 193, 
 1046. 
 
 Louisville & N. Ry. v. Mottley, 
 656, 826. 
 
 Louisville & N. Ry. v. Scott, 1013. 
 
 Louisville & N. Ry. v. Siler, 997. 
 
 Louisville & N. Ry. v. State, 928. 
 
 Louisville & N. v. U. S. (218 Fed. 
 89), 1154. 
 
 Louisville & N. Ry. v. Van Cleave, 
 124, 136. 
 
 Louisville & N. Ry. Co. v. Walker, 
 768. 
 
 Louisville & N. Ry. Co. v. West 
 Coast N. S. Co., 175. 
 
 LouisviUe, N. O. & T. R. R. v. 
 State, 164. 
 
 Louisiana & P. Ry. v. U. S., 1134, 
 1147. 
 
 Loup Creek CoUiery Co. v. Vir- 
 ginian Ry., 874, 893. 
 
 Lowe V. Seaboard A. L. Ry. Co., 
 146. 
 
 Lowrey v. C, B. & Q. Ry., 1138. 
 
Table of Cases Cited 
 
 [References are to sections] 
 
 Ludowici-Celadon Co. v. A. C. 
 
 L. R. R., 845. 
 Ludowici-Celadon Co. v. M. P. 
 
 Ry., 869. 
 Luken v. Lake S. & M. S. Ry., 161. 
 Lull Carriage Co. v. C. K. & S. 
 
 Ry., 589. 
 Lum V. G. N. Ry., 1085, 1087. 
 Lumber Co. v. Railroad, 234, 776. 
 Lumber from Louisiana to North 
 
 Atlantic Points, 1114. 
 Lumbermen's Exchange of St. 
 
 Louis V. A. & S. R. Ry., 764, 
 
 768, 770, 793. 
 Lumber Rates, In re, 784, 787, 
 
 789, 791, 899. 
 Lumber Rates from Memphis and 
 
 other Points to New Orleans, 
 
 458, 895. 
 Lumber Rates from S. W., 383, 401. 
 Lumber Rates Texas, etc., to Okla- 
 homa and Missouri, 405, 763, 
 
 768, 1114. 
 Lunquist v. Grand Trunk Ry., 
 
 208, 538, 918. 
 L}Tiah & Read v. B. & 0. Ry., 
 
 804. 
 Lynde v. D., L. & W. Ry., 1109. 
 Lykes S. S. Line v. C. U., 112, 
 
 113. 
 
 M 
 
 MacBride C. & C. Co. v. St. P., 
 
 M. & 0. Ry., 1045. 
 Macloon v. Boston & M. R. R., 
 
 590, 715. 
 Macloon v. Chicago & N. W. Ry., 
 
 1056. 
 Majestic Coal & Coke Co. v. 
 
 nUnois C. R. R., 944. 
 Manahan v. N. P. Ry., 899. 
 Manchester & L. R. R. Co. v. 
 
 Concord R. R., 979. 
 Mannheim Ins. Co. v. Erie & W. 
 
 T. Co., 629, 845. 
 Manning v. C. & A. R. R., 1011. 
 Mansion House Ass'n v. London 
 
 & S. W. Ry., 118. 
 
 Manufacturers' Coal Rates Case, 
 
 703. 
 Manufacturers' Construction Mar 
 
 terial Case, 703. 
 Manufacturers & Jobbers' Union 
 
 V. Minneapohs & S. L. R. R., 
 
 456, 581, 767, 768, 1111. 
 Manufacturers & Merchants' Ass'n 
 
 V. A. & A. R. R., 174, 773, 793, 
 
 898, 1041, 1057, 1092. 
 Manufacturers Ry. Co. v. St. L., 
 
 I. M. & S. Ry., 176, 187, 190, 
 
 192, 193, 195, 575, 738, 1098. 
 Marian Coal Co. v. D., L. & W. 
 
 R. R., 392, 396, 1083. 
 Maricopa County Commercial Club 
 
 V. S. P. Co., 874. 
 Maritime Exchange v. P. R. R., 
 
 402, 1044. 
 Marshall & M. G. Co. v. St. Louis 
 
 & S. F. R. R., 868. 
 Marshall OU Co. v. C. & N. W. 
 
 Ry., 443, 523, 534, 965. 
 Marten v. L. & N. Ry., 793. 
 Martin v. Oregon Ry. & N. Co., 
 
 147. 
 Martin v. So. P., 588. 
 Maryland Tel. Co. v. Simons Sons 
 
 Co., 305. 
 Masee & Felton Lumber Co. v. S. 
 
 Ry., 505, 776, 795. 
 Massachusetts-Maine Wool Rates, 
 
 756, 1081. 
 Masurite Explosive Co. v. Pitts- 
 burg & L. E. R. Co., 523. 
 Mathews v. Board of Corp. Comm., 
 
 221, 322, 761. 
 Matter of Alleged Unlawful Rates, 
 
 141. 
 Matter of Allowance to Elevators, 
 
 737. 
 Matter of Allowances for the Trans- 
 fer of Sugar, 180. 
 Matter of Car Shortage, 934. 
 Matter of Elevation Allowances, 
 
 183. 
 Matter of Proposed Advances in 
 
 Freight Rates, 828, 1016. 
 
 [ Ixxiii ] 
 
Table of Cases Cited 
 
 [References 
 
 Matter of Released Rates, 436. 
 Matter of Through Routes, 831. 
 Mattingly v. Pennsylvania Co., 
 
 870. 
 Mattison v. Pennsylvania Co., 
 
 1001, 1059, 1074, 1102. 
 Mauldin v. Seaboard Air Line Ry. 
 
 Co., 935. 
 Maxwell v. W. F. & N. W. Ry., 
 
 822, 824, 1117. 
 May Bros. v. Y. & M. V. R. R., 
 
 352, 699, 926. 
 Mayor & Council of Boston v. 
 
 A. C. L. R. R., 771, 1074. 
 Mayor & Council of Douglas v. 
 
 A. B. & A. R. R., 405, 406, 
 
 698. 
 McCloud River Lmnber Co. v. S. 
 
 P. Co., 193, 595, 892. 
 McCuUough V. L. & N. R. R., 787, 
 
 791, 894. 
 McDuffee v. Portland & R. R. R. 
 
 Co., 209, 642, 717. 
 McElvain v. Railroad, 913. 
 McGrew v. Missouri Pac. R. R., 
 
 465, 547, 787, 1086. 
 Mcintosh V. Oregon Ry. & Nav. 
 
 Co., 203. 
 McLaughlin G. K. Co. v. Maine 
 
 S. S. Co., 518. 
 McLean Lumber Co. v. L. & N. 
 
 R. R., 1049. 
 McMorran v. Grand Trunk Ry., 
 
 580, 1116. 
 McNeer v. Mo. Pac. Ry., 690. 
 McNeill V. Durham & C. R. R. 
 
 Co., 648. 
 McNeill V. Southern Ry. Co., 133. 
 McRae Grocery Co. et al. v. South- 
 em Ry., 1101, 1103. 
 McRae Terminal R. Co. v. South- 
 em Ry., 926. 
 Meeker & Co. v. L. V. Ry., 256, 
 
 352, 527, 631, 790, 1110, 1162. 
 Memphis Cotton Oil Co. v. I. C. 
 
 C. Ry., 407, 446, 459, 593, 799. 
 Memphis Freight Bureau v. B. & 
 
 0. R. R. Co., 117, 120, 799. 
 [ Ixxiv ] 
 
 are to sections] 
 
 Memphis Freight Bureau v. F. 
 
 S. & W. Ry., 699, 790. 
 Memphis Freight Bureau v. I. C. 
 
 R. R., 405. 
 Memphis Freight Bureau v. L. 
 
 & N. R. R., 356, 444. 
 Memphis Freight Bureau v. St. 
 
 L. S. W. Ry., 704, 776, 1078, 
 
 1093. 
 Memphis Grain & Hay Ass'n v. 
 
 St. L. & S. F. R. R. Co., 212. 
 Memphis News Co. v. Southern 
 
 Ry. Co., 203. 
 Menacho v. Ward, 618, 672, 690. 
 Menefee Lumber Co. v. T. & P. 
 
 Ry., 462, 823. 
 Mercantile Lumber & Supply Co. 
 
 V. St. L. S. W. Ry., 825, 840. 
 Mercantile Trust Co. v. Columbus 
 
 S. & H. R. R., 924. 
 Merchants' Cotton Press & Storage 
 
 Co. V. I. C. R. R., 657, 660, 
 
 742, 758. 
 Merchants' C. P. & S. Co. v. Insur- 
 ance Co. of North America, 
 
 648, 834. 
 Merchants' Dispatch Storage Co. 
 
 V. I. C. R. R. Co., 737. 
 Merchants' Freight Bureau of 
 
 Little Rock v. A., T. & S. F. 
 
 Ry., 793, 803. 
 Merchants' Freight Bureau of 
 
 Little Rock v. Mo. Pac. Ry., 
 
 786. 
 Merchants' Union of Spokane v. 
 
 N. P., 1160. 
 Merchants' & Manufacturers' Ass'n 
 
 V. A. C. L. R. R., 396. 
 Merchants' & Manufacturers' Ass'n 
 
 V. Baltimore & 0. R. R., 179. 
 Merchants' & Manufacturing Ass'n 
 
 V. Penn. R. R., 929. 
 Meridan Fertilizer Co. v. V. S. & 
 
 P. Ry., 468, 604. 
 Meridian B'd of Trade v. A. G. S. 
 
 Ry., 791, 793. 
 Meridian Fertilizer Factory v. T. 
 
 & P. Ry., 495, 552, 699, 897. 
 
Table of Cases Cited 
 
 [References are to sections] 
 
 Merschom, S. P. & Co. v. Central 
 Ry., 793. 
 
 Messenger v. Pennsylvania R. R., 
 619, 672, 690, 711, 717. 
 
 Metropolitan Paving Brick Co. 
 V. A. A. R. R., 498, 504, 518, 
 583, 641, 700, 704, 794, 795. 
 
 Metropolitan Trust Co. v. Hous- 
 ton & T. C. R. R., 216, 257, 
 287, 322, 355. 
 
 Michigan Box Co. v. Flint & P. 
 M. R. R., 507, 513, 1111. 
 
 Michigan Congress Water Co. v. 
 Chicago & G. T. R. R., 1093, 
 1112. 
 
 Michigan Copper & Brass Co. v. 
 D. S. S. & A. Ry., 212, 386, 
 509, 804. 
 
 Michigan Hardwood Mf rs Ass'n 
 v. Transcontinental Freight 
 Bureau, 1080, 1089. 
 
 Michigan Seating Co. v. G. T. W. 
 Ry., 519. 
 
 Michigan Upper Peninsula Pig- 
 iron Rates, 469, 654. 
 
 Middlesboro Board of Trade v. 
 L. & N. Ry., 585, 761. 
 
 Milburn Wagon Co. v. L. S. & M. 
 S. Ry., 163, 502, 545, 761, 
 850, 1107. 
 
 Mileage Books, In re, 840. 
 
 Mileage, Excursion and Commuta- 
 tion Tickets, In re, 689. 
 
 Miles V. St. Louis & S. F. Ry., 
 1051. 
 
 MiUc Producers' Protective Ass'n 
 V. Delaware, L. & W. R. R., 
 125, 347, 374, 520, 594, 652; 
 766, 784, 1086, 1088. 
 
 Millinery Jobbers Ass'n v. Ameri- 
 can Express Co., 483. 
 
 Milwaukee Chamber of Commerce 
 V. C, M. & St. P. Ry., 416, 
 763, 787. 
 
 Milwaukee Chamber of Commerce 
 V. Flint & P. M. R. R., 768. 
 
 Milwaukee Electric Co. v. C, M. 
 & St. P. Ry., 786. 
 
 Milwaukee Elec. Ry. Co. v. Mil- 
 waukee, 257, 285, 287, 304, 
 
 312, 333, 365, 368, 369, 370, 
 
 471. 
 Milwaukee P. & F. Exch. v. Crosby 
 
 Transp. Co., 163. 
 Mine Ratings, In re, 188, 253, 776, 
 
 939. 
 Miner v. New York, N. H. & H. 
 
 R. R., 594, 1137. 
 Minneapolis Chamber of Commerce 
 
 V. Great Northern Ry., 1096. 
 Minneapolis & St. L. Ry. v. Minne- 
 sota, 238, 325, 370, 400, 411, 
 
 1035, 1139. 
 Minneapolis Steel & Machinery 
 
 Co. V. C, M. & St. P. Ry., 
 
 1104. 
 Minneapolis Threshing Machine 
 
 Co. V. C, R. I. & P. Ry., 635, 
 
 1041. 
 Minneapolis Threshing Machine 
 
 Co. V. St. P., M. & 0. Ry., 
 
 238, 1023, 1085. 
 Minnesota Rate Cases, 131, 854, 
 
 857, 964, 1140, 1152. 
 Mississippi River Case, 491, 585, 
 
 761, 803. 
 Missouri & Illinois Coal Co. v. 
 
 I. C. R. R., 917. 
 Missouri & Kansas Shippers' Ass'n 
 
 V. M., K. & T. Ry., 786, 1133. 
 Missouri, K. & T. R. R. Co. v. 
 
 Fookes, 132. 
 Missouri, K. & T. R. R. v. Harri- 
 
 man Bros., 835. 
 Missouri, K. & T. R. R. v. Inter- 
 state Commerce Commission, 
 
 236, 304, 1022, 1137, 1142, 
 
 1145, 1148, 1154. 
 Missouri, K. & T. R. R. v. Love, 
 
 284, 316, 375, 406, 765. 
 Missouri, K. & T. R. R. v. McCann, 
 
 862. 
 Missouri, K. & T. R. R. v. New Era 
 
 Millmg Co., 871. 
 Missouri, K. & T. R. R. v. Trinity 
 
 C. L. Co., 701. 
 
 [ Ixxv] 
 
Table of Cases Cited 
 
 (References 
 
 Missouri Pacific Ry. v. Kansas, 
 
 147. 
 Missouri Pacific Ry. v. Keyes, 
 
 304. 
 Missouri Pacific Ry. v. Larra- 
 
 bee Flour Mills, 129. 
 Missouri Pacific Ry. v. Neb., 1137. 
 Missouri Pacific Ry. v. Smith, 225, 
 
 237. 
 Missouri Pacific Ry. v. Texas & P. 
 
 Ry., 793. 
 Missouri Pacific Ry. v. Tucker, 
 
 304, 306, 342, 399, 1137. 
 Missouri Rate Cases, 1152. 
 Missouri T. K. Shippers' Ass'n 
 
 V. A., T. & S. F. R. R., 1111. 
 Mitchell Coal & Coke Co. v. Penn- 
 sylvania R. R., 196, 635, 731, 
 
 1084, 1085, 1134, 1136, 1137, 
 
 1142. 
 Mixon-McClintock Co. v. St. L., 
 
 I. M. & S. Ry. Co., 137. 
 Mobile Chamber of Commerce v. 
 
 M. & 0. Ry. Co., 114, 623, 768. 
 Mobile, J. & K. C. R. Co. v. State, 
 
 997. 
 Mobile & 0. Ry. v. Dismukes, 818. 
 Moise Brothers' Co. v. C, R. I. 
 
 & P. Ry., 787. 
 Molasses Rates from Mobile, 116, 
 
 509, 510, 632, 739. 
 Monroe Progressive League v. 
 
 St. L., I. M. & S. Ry., 784, 
 
 808. 
 Montague & Co. v. A., T. & S. F. 
 
 Ry., 532. 
 Montana Ice Co. v. D., L. & W. 
 
 Ry., 1110. 
 Montana Union Ry. Co. v. Lang- 
 
 lois, 209. 
 Montell V. Baltimore & 0. R. R., 
 
 nil. 
 
 Montezuma v. C. of G. Ry., 583, 
 
 598, 599. 
 Montgomery Freight Bureau v. 
 
 L. & N. Ry., 793. 
 Montgomery Freight Bureau v. 
 
 Western Ry. of Ala., 764, 1103. 
 
 [ Ixxvi ] 
 
 are to sections] 
 
 Montpelier & W. R. R. R. v. United 
 
 States, 826. 
 Moore v. D. & R. G. R. R. Co., 
 
 1114. 
 Moran & Son v. Mo. Pac. Ry., 628. 
 More Produce Co. v. C, M. & 
 
 St. P. Ry., 1041. 
 Morgan v. M., K. & T. R. Co., 
 
 1101. 
 Morgan Grain Co. v. A. C. L. Ry., 
 
 216, 221, 311, 381, 385, 452, 
 
 757, 971, 1023. 
 Morgan's L. & T. R. R. & S. S. Co. 
 
 V. Railroad Commission, 463. 
 Morran v. Grand Trunk Ry., 764. 
 Morrell v. Union Pacific Ry., 448, 
 
 450, 458. 
 Morris, Re, 627. 
 Morris Iron Co. v. B. & 0. R. R., 
 
 884, 886, 929. 
 Morrisdale Coal Co. v. Penn. R. R., 
 
 939, 1043. 
 Morse Bros. Co. v. 0. R. I. & P. 
 
 Ry., 770. 
 Morton Salt Co. v. M. L. & T. 
 
 R. R. & S. S. Co., 840. 
 Motorcycle M'frs Ass'n v. B. & 
 
 0. R. R., 507. 
 Mousen & Co. v. Gila V. G. & N. 
 
 Ry., 1048. 
 Mountain Fruit Co. v. Southern 
 
 Pac. Ry. Co., 890. 
 Mountain Ice Co. v. D., L. & W. 
 
 R. R., 343, 468, 546, 1077, 
 
 1091, 1093, 1097, 1099. 
 Mt. Vernon Milling Co. v. Chicago, 
 
 M. & S. P. Ry., 920. 
 Multnomah Lumber and Box Co. 
 
 V. S. P. Co., 382, 402. 
 Muncie & W. R. R., Re, 195. 
 Munn V. Illinois, 10, 189, 302, 
 
 992. 
 Murphy v. Wabash R. R., 417. 
 Murphy Bros. v. New York C. 
 
 & H. R. R. R., 1105. 
 Murray Lighterage & Tr. Co. v. 
 
 D. & H. Co., 163, 178. 
 Muschamp L. & P. J. Ry., 863. 
 
Table of Cases Cited 
 
 [References are to sections] 
 
 Muskogee Commercial Club v. 
 
 M., K. & T. R. Co., 676. 
 Muskogee Traffic Bureau v. A., 
 
 T. & S. F. Ry., 384, 593, 595, 
 
 770. 
 Mutual Rice Trade & Develop- 
 ment Ass'n V. I. & G. N. R. 
 
 R., 551, 593, 776. 
 Mutual Tr. Co. v. United States, 
 
 126, 134, 163. 
 Myer v. C, C, C. & St. L. Ry., 497. 
 Myers v. Pennsylvania Co., 444, 
 
 507, 508, 514, 1065. 
 
 N 
 
 Nashua & L. R. R. v. Boston & 
 
 L. R. R., 359. 
 Nashville Grain Exch. v. United 
 
 States, 1021, 1089, 1148. 
 Nassau Advancement Ass'n v. C. 
 
 & N. W. Ry., 785, 793. 
 National Ass'n of Letter Carriers 
 
 V. A., T. & S. F. Ry., 689. 
 National Coal Co. v. B. & O. R. 
 
 R., 941, 943, 1059. 
 National Hay Ass'n v. L. S. & M. 
 
 S. Ry., 390, 444, 500, 532, 777, 
 
 1116. 
 National Hay Ass'n v. M. C. R. 
 
 R., 253, 394, 439, 502, 552, 
 
 1063, 1113. 
 National League of Commission 
 
 Merchants of U. S. v. A. C. L. 
 
 Ry., 783. 
 National Lumber Co. v. S. P. L. 
 
 A. & St. R. R., 1085. 
 National Lmnber Exporters' Ass'n 
 
 V. K. C. S. Ry. Co., 117, 125. 
 National Lumber Exporters' Ass'n 
 
 V. St. L., L M. & S. Ry., 117, 
 
 262, 352, 397. 
 National M'fg Co. v. Chicago G. 
 
 W. Ry., 1057. 
 National Mohair Growers' Ass'n 
 
 V. A., T. & S. F. Ry., 515. 
 National Petroleum Ass'n v. Chi- 
 cago, M. & St. P. Ry., 1082. 
 
 National Petroleum Ass'n v. L. & 
 
 N. R. R. 623, 913. 
 National Pole Co. v. C. & N. W. 
 
 Ry., 1136. 
 National Refining Co. v. Atchison, 
 
 T. & S. F. R. R., 1084, 1110. 
 National Refining Co. v. C, C, 
 
 C. & St. L. Ry., 517, 809. 
 National Refining Co v. Mo. Pac. 
 
 Ry., 462, 776. 
 National Refrigerator & Butchers' 
 
 Supply Co. V. St. L., I. M. & 
 
 M. Ry., 791. 
 National Syrup Co. v. C. & N. W. 
 
 Ry., 382, 1087, 1106. 
 National Wholesale Lmnber Co. 
 
 V. A. C. L. R. R. Co., 179. 
 National Wholesale Lumber Deal- 
 ers Ass'n V. Atlantic C. L. R. 
 
 R., 180. 
 National W. W. Co. v. Kansas City, 
 
 286, 289. 
 National Wool Growers' Ass'n v. 
 
 0. S. L. R. R., 211, 397, 1057, 
 
 1094, 1098, 1110. 
 National Wool Growers' Case, 184. 
 Natural Operating Obstacles, 403. 
 Nebraska-Iowa Grain Co. v. U. 
 
 P. R. R., 731, 1007. 
 Nebraska Material Co. v. C, B. 
 
 & Q. Ry., 791. 
 Nebraska Maximimi Freight Rates 
 
 Case, 408. 
 Nebraska State Railway Com- 
 mission V. C, B. & Q. Ry., 343, 
 
 786. 
 Nebraska State Railway Commis- 
 sion V. Un. Pac. Ry., 456, 
 
 795. 
 Neosho Milling Co. v. Kansas 
 
 City So. Ry., 812. 
 Newark Machine Co. v. P. C. C. 
 
 & St. L., 881. 
 Newding v. M. R. & T. Ry., 1053. 
 Newland v. Northern P. R. R., 
 
 229. 
 Newman Lumber Co. v. M. C. R. 
 
 R., 850, 869. 
 
 [ Ixxvii ] 
 
Table of Cases Cited 
 
 [References are to sections] 
 
 Newton Gum Co. v. C, B. & Co., 
 
 850. 
 New Albany Furniture Co. v. M. 
 
 J. & K. C. R. R., 877. 
 New England Coal & Coke Co. v. 
 
 N. & W. Ry., 180, 812, 814. 
 New England Investigation, 350, 
 
 363, 386, 791, 799, 916, 984. 
 New Jersey Fruit Exchange v. 
 
 Central R. R., 127. 
 New Memphis Gas Light Co. v. 
 
 New Memphis, 313. 
 New Mexico ex rel. v. Denver & 
 
 R. G. R. R. Co., 161. 
 New Mexico Coal Rates, 898. 
 New Orleans B. of T. v. Illinois 
 
 Central Ry., 764, 794, 841, 
 
 881. 
 New Orleans Cotton Exch. v. Cin- 
 cinnati, N. O. & T. P. R. R., 
 
 125, 388, 445, 580, 1093. 
 New Orleans Cotton Exch. v. 
 
 lUinois Cent. R. R., 224, 413, 
 
 419, 586, 804. 
 New Orleans Cotton Exch. v. 
 
 Louisville, N. 0. & T. Ry., 812. 
 New Orleans Live Stock Exch. 
 
 V. Texas & P. Ry., 354, 586. 
 New Pittsburg Coal Co. v. H. V. 
 
 Ry., 115, 453, 757, 764, 901, 
 
 1042, 1063, 1074. 
 New York ex rel. v. Knight, 129. 
 New York Bd. of Trade & Transp. 
 
 V. Pennsylvania R. R., 114, 
 
 714, 817. 
 New York Butter and Cheese 
 
 Rates, 356, 858. 
 New York Central & H. R. R. R. 
 
 Consolidation, 970. 
 New York Central & H. R. R. v. 
 
 Board of Hudson Co., 174, 
 New York Central & H. R. R. v. 
 
 Int. Com. Comm., 116, 1034, 
 
 1063. 
 New York Central v. United States, 
 
 633, 634. 
 New York, N. H. & H. R. R. Fi- 
 nances, 970. 
 
 [ Ixxviii ] 
 
 New York, N. H. & H. R. R. v. 
 
 Int. Com. Comm., 644, 821, 
 
 919 1141. 
 New York, N. H. & H. R. R. v. 
 
 New York, 161. 
 New York, N. H. & H. R. R. v. 
 
 Piatt, 836, 870. 
 New York, N. H. & H. R. R. v. 
 
 Scovill, 209. 
 New York & N. Ry. v. New York 
 
 & N. E. R. R., 883, 884. 
 New York Produce Exch. v. Balti- 
 more & 0. R. R., 416, 753, 
 
 758, 1002. 
 New York Produce Exch. v. N. 
 
 Y. C. & H. R. R., 121, 764. 
 New York T. & M. R. R. v. Galla- 
 gher, 721. 
 Nicholson v. Gt. Western Ry., 
 
 536, 684, 726. 
 Nitshill Coal Co. v. Caledonian 
 
 Ry., 804. 
 Noble V. G. T. W. Ry. Co., 847. 
 Noble V. J. L. C. & E. R. R., 868, 
 
 1097. 
 Noble V. St. L. & S. F. R. R., 1097. 
 NoUenberger v. Missouri Pacific 
 
 Ry., 1083. 
 Norfolk & W. R. R. v. Pa., 132, 136. 
 Norfolk & W. Ry. v. United States, 
 
 449, 602, 770, 1042, 1147. 
 Norman Lumber Co. v. L. & N. 
 
 R. R., 901. 
 Norrisdale Coal Co. v. Penn. Ry., 
 
 1036. 
 Northern Lumber Mf'g Co. v. T. 
 
 & P. Ry., 833, 1048. 
 Northern Pacific Ry. Co. v. Keyes, 
 
 395, 406, 765, 963. 
 North Bros. v. C, M. & St. P. Ry., 
 
 588, 802. 
 No. Carolina R. R. Co. v. Lack- 
 
 ery, 187. 
 North Fork Cannel Coal Co. v. 
 
 A. A. R. R., 382, 402, 759, 793, 
 
 850. 
 North Staffordshiro Ry. Co. v. 
 
 Salt Union, Ltd., 571. 
 
Table of Cases Cited 
 
 [References are to sections] 
 
 Northwestern I. G. & S. S. Ass'n 
 
 V. Chicago & N. W. Ry., 374, 
 
 448, 716. 
 Northwestern Leather Co. v. 0. R. 
 
 R. & N. Co., 593, 595. 
 Xorwich Gas & E. Co. v. City of 
 
 Norwich, 276, 310. 
 Nucoa Butter Co. v. E. R. R., 526. 
 Nutting V. Conn. R. R. R., 863. 
 
 
 
 Oak Grove Farm Creamery v. 
 
 Adams Exp. Co., 509, 534. 
 O'Brien & Co. v. N. P., 1053. 
 O'Brien Commercial Co. v. C. & 
 
 N. W. Ry., 1086. 
 Ocean S. S. Co. v. Savannah L. 
 
 W. & S. Co., 203. 
 Ocheltree Grain Co. v. Chicago 
 
 R. R. & P., 1083. 
 Ocheltree Grain Co. v. Texas & 
 
 P. R. R., 1100. 
 Ohio AlHed With Product Shippers 
 
 V. E. Ry., 436, 761. 
 Ohio Coal Co. v. Whitcomb, 744. 
 Ohio Face Brick M'frs Ass'n v. 
 
 Adams Express Co., 385. 
 Ohio Foundry Co. v. P., C, C. & 
 
 St. L. Ry., 851. 
 Ohio Iron & Metal Co. v. C, M. 
 
 & St. P. Ry., 177. 
 Ohio Iron & Metal Co. v. Wabash 
 
 R. R., 450. 
 Ohio River Hay Rates, 585. 
 Oklahoma v. Atchison, T. & S. F. 
 
 R. R., 1076. 
 Oklahoma & Ark. Coal Traffic Bu. 
 
 V. C, R. I. & P., 455. 
 Oklahoma-Colorado Potato Rates, 
 
 771. 
 Oklahoma Grain Rates, 898. 
 Oklahoma Portland Cement Co. 
 
 V. M., K. & T. Ry., 467, 
 
 771. 
 Olanta Coal M. Co. v. Beech Creek 
 
 R. R., 924. 
 Olcott v. Super\'isors, 13. 
 
 Old Dominion C. & S. Co. v. P. 
 
 R. R., 825. 
 Omaha & C. B. St. Ry. Co. v. Int. 
 
 Com. Comm., 165, 1141. 
 Omaha Grain Exchange v. A., T. 
 
 & S. F. Ry., 632. 
 Omaha Grain Exchange v. C, M. 
 
 & St. P. Ry., 802. 
 Omaha Grain Exchange v. C. & 
 
 N. W. Ry., 581, 763. 
 Omaha Grain Exchange v. C, R. 
 
 I. & P. Ry., 467, 584, 585, 778, 
 
 793, 795, 1081, 1095, 1106. 
 Omaha- Wisconsin Grain Rates, 770. 
 Ontario Iron Ore Co. v. N. Y. C. 
 
 & H. R. R. R., 384, 791. 
 Order of Railway Conductors, Re, 
 
 1039. 
 Order of Railway Conductors, 
 
 Traders & Travelers Union v. 
 
 Phila. & Reading R. R., Re, 
 
 1039. 
 Oregon Lumber Co. v. 0. R. R. & 
 
 N. Co., 540. 
 Oregon R. & Nav. Co. v. Camp- 
 bell, 146, 148. 
 Oregon Ry. & N. Co. v. Coolridge, 
 
 1055. 
 Oregon Ry. & N. Co. v. Fairchild, 
 
 1143, 1145, 1154. 
 Oregon Short Line & V. N. Ry. 
 
 Co. V. Northern Pacific Ry. 
 
 Co., 870, 885, 936, 1079. 
 Oregon & Washington Lumber 
 
 Manufacturers' Ass'n v. So. 
 
 Pac. Ry., 417, 595, 796, 
 
 808. 
 Oregon & Washington Lumber v. 
 
 U. P. R. R. Co., 435, 460, 508, 
 
 802. 
 Osborne v. Chicago & N. W. Ry., 
 
 787. 
 Oskosh Logging Tool Co. v. Chi- 
 cago & N. W. Ry., 1078. 
 Oster Bros. v. M. L. & T. R. R. & 
 
 S. S. Co., 1048, 1109. 
 Otlinger v. So. Pac. R. R., 627, 
 
 1086. 
 
 [ Ixxix ] 
 
Table of Cases Cited 
 
 [References 
 
 Oxlade v. North Eastern R. Co., 
 
 674. 
 Ozark Bell Tel. Co. v. Springfield, 
 
 304. 
 Ozark Fruit Growers' Ass'n v. St. 
 
 L. & S. F. Ry., 396, 509, 759, 
 
 765. 
 
 Pabst Brewing Co. v. Chicago, M. 
 
 & St. P., 396, 1057, 1105. 
 Pacific Coast Biscuit Co. v. S. P. 
 
 & S. Ry., 482, 850. 
 Pacific Creamery Co. v. S. P., 505. 
 Pacific Coast Jobbers & M'frs Ass'n 
 
 V. S. P., 177. 
 Pacific Coast Lumber M'frs Ass'n 
 
 V. N. P. Ry., 468, 896. 
 Pacific Stationery & Printing Co. 
 
 V. 0. W. R. R. & N., 507. 
 Page V. Delaware, L. & W. Ry., 
 
 497, 500, 501, 529, 712, 1065, 
 
 1096. 
 Paine v. Penn. Ry., 713. 
 Paine Bros. & Co. v. Lehigh Val- 
 ley R. R., 536, 687, 725, 1102, 
 
 1111. 
 Paine Lumber Co. v. C, C, C. & 
 
 St. L. Ry., 816. 
 Page V. Delaware, L. & W. R. R., 
 
 489, 515. 
 Palatka Waterworks v. Palatka, 
 
 306. 
 Palo Alto Case before the Calif. R. 
 
 R. Comm., 293. 
 Paola Refining Co. v. M., K. & 
 
 T. Ry., 965. 
 Panking & Holmes v. C. N. E. Ry., 
 
 450. 
 Paragon Plaster Co. v. N. Y. C. & 
 
 H. R. R. R., 699, 791. 
 Paragould Lumber Co. v. M. P., 
 
 868. 
 Parkhurst v. Pennsylvania R. Co., 
 
 877. 
 Parks V. Cincinnati & M. V. R. R., 
 
 715. 
 Parmelee v. Lowitz, 865. 
 
 [ Ixxx ] 
 
 are to sections] 
 
 Parsons v. Chicago & N. W. Ry., 
 612, 764, 873. 
 
 Partridge Co. v. B. & M. R. R., 
 1104. 
 
 Partridge & Sons Co. v. Penn. Ry., 
 773. 
 
 Party Rate Tickets, Re, 689. 
 
 Passenger Tariffs, Re, 625. 
 
 Passenger Tariffs and Rate Wars, 
 In re, 823. 
 
 Passes for Charitable Institutions, 
 Re, 642. 
 
 Patten v. Wisconsin Central Ry., 
 1100. 
 
 Paxton Tie Co. v. Detroit S. R. R., 
 630, 652, 816, 1056. 
 
 Payne V. M. 0. L. & T. R. R. v. 
 S. C. Co., 844. 
 
 Payne-Gardner Co. v. L. & N. Ry., 
 771, 776. 
 
 Peale, Peacock & Kerr v. Central 
 R. R. Co. of N. J., 183, 816, 
 822, 829, 1053, 1085. 
 
 Peavey & Co. v. Union Pacific R. 
 R., 182, 660, 741, 745, 1089, 
 1152. 
 
 Pecos Mercantile Co. v. A., T. & 
 S. F. Ry., 791. 
 
 Pelham v. A. C. L. R. R., 600. 
 
 Pennsylvania Co. v. Louisville, 
 N. A. & C. R. R., 1039, 1111. 
 
 Pennsylvania Millers' State Ass'n 
 V. Philadelphia & R. R. R., 
 .135, 574, 714, 768, 784, 814. 
 
 Pennsylvania R. R. v. Hughes, 884. 
 
 Pennsylvania R. R. Co. v. Inter- 
 national Coal Mining Co., 627, 
 648, 653, 715, 803, 1085. 
 
 Pennsylvania R. R. Co. v. Phila- 
 delphia County, 231, 238, 305, 
 310, 313, 316, 327, 392, 394, 
 401, 410. 
 
 Pennsylvania Refining Co. v. West- 
 ern N. Y. & P. R. R. Co., 724, 
 729, 937, 1144. 
 
 People V. Budd, 11. 
 
 People V. Chicago & A. R. R., 
 928. 
 
Table of Cases Cited 
 
 [References 
 
 People V. Chicago, I. & L. Ry., 
 
 1005, 1012. 
 People ex rel. v. St. L. A. & T. H. 
 
 R. R., 930. 
 People V. Western Union Tele- 
 graph Co., 865. 
 People -ex rel. v. Willcox, 280. 
 People ex rel. D. & H. R. R. v. 
 
 Stevens, 268. 
 People's Fuel & Supply Co. v. G. 
 
 T. W. Ry., 874, 899, 1080, 
 
 1114. 
 Perk V. Chicago & N. W. Ry. Co., 
 
 302. 
 Perkins v. Northern Pacific Ry. 
 
 Co., 269. 
 Perry v. Florida C. & P. R. R., 
 
 766, 1122. 
 Petition of Toledo Produce Ex- 
 change, Re, 1064, 1065. 
 Phelps V. Texas & P. Ry., 419, 567, 
 
 716, 814. 
 Philadelphia & R. Ry. v. Interstate 
 
 Commerce Commission, 465, 
 
 778, 1007, 1036. 
 Philadelphia Veneer & Lumber 
 
 Co. V. C. Ry. of N. J., 793, 804. 
 Phillips V. Louisville & N. R. R., 
 
 768, 1122. 
 Phillips-Trawick-James Co. v. So. 
 
 Pac. Ry., 791. 
 Phipps V. London & Northwestern 
 
 Ry., 420, 454, 772, 782. 
 Pierce v. Pittsburgh & L. E. Ry., 
 
 177. 
 Pierce Co. v. N. Y. C. & H. R. R. 
 
 R. Co., 126, 177, 705, 847. 
 Pioneer Tel. & Tel. Co. v. Westen- 
 
 haver, 283. 
 Pipe Lmes, In re, 170, 1007. - 
 Pitts & Son, H. B., v. St. Louis & 
 
 S. F. Ry., 844, 1056. 
 Pittsburgh, C. & S. L. Ry. v. Balti- 
 more & 0. R. R., 688, 812. 
 Pittsburgh, C, C. & St. L. Ry. v. 
 
 Knox, 1013, 1047. 
 Pittsburgh, C. & St. L. Ry. v. 
 
 Mitchell, 758. 
 
 axe to sections] 
 
 Pittsburgh, C. & St. L. Ry. v. Mor- 
 ton, 202. 
 Pittsburgh, C, C. & St. L. Ry. v. 
 
 State ex rel., 146, 148. 
 Pittsburgh Plate Glass Co. v. P., 
 
 C, C. & St. L. Ry., 659, 7S8, 
 
 790, 793, 803. 
 Pittsburgh Steel Co. v. L. S. & M. 
 
 S. Ry., 185, 405, 465. 
 Pittsburgh Vein Operators of Ohio 
 
 V. P. Co., 128, 137, 397. 
 Pittsburg Vein Operators v. So. 
 
 Pac. Ry., 140. 
 Planters Compress Co. v. Cleve- 
 land, C, C. & St. L. Ry., 417, 
 
 489, 498, 535. 
 Planters' Gin & Compress Co. v. 
 
 G. & M. V. Ry., 793, 799, 
 
 804. 
 Flatten Produce Co. v. K. L. S. 
 
 & C. Ry., 1058, 1097. 
 Plummer Co. v. N. P. Ry., 43. 
 Pole Stock Lumber Co. v. G. & 
 
 S. I. R. R., 835, 1048. 
 Ponchatoula Farmers' Ass'n v. 
 
 I. C. R. R., 434, 436, 439, 533, 
 
 790, 850, 931, 1058, 1045. 
 Pond-Decker Lumber Co. v. Spen- 
 cer, 873. 
 Pooling Freights, In re, 980. 
 Poor Grain & P. Co. v. C, B. & 
 
 Q. Ry., 628, 869, 1048, 1054. 
 Port Arthur B. of T. v. A. & S. Ry., 
 
 470, 803, 1039. 
 Port Arthur MilUng Co. v. T. & 
 
 S. F. Ry., 116, 124, 127, 
 
 764. 
 Port Richmond & H. Ferry Co. 
 
 V. Board of Commissioners, 
 
 145, 174. 
 Porter v. St. Louis & S. F. Ry., 
 
 846, 851. 
 Portland Chamber of Commerce 
 
 V. 0. R. R. & N. Co., 252, 290, 
 
 585. 
 Portland Lumber Co. v. 0. W. R. 
 
 R. & N. Co., 129. 
 Potato Shipments in Winter, 1079. 
 
 [Ixxxi] 
 
Table op Cases Cited 
 
 [References are to sections] 
 
 Potter Mf'g Co. v. Chicago & G. 
 
 T. R. R., 546. 
 Poughkeepsie Iron Co. v. New 
 
 York C. & H. R. R. R., 763, 
 
 1093. 
 Powhatan Coal & Coke Co. v. 
 
 Norfolk & W. R. Co., 938, 
 
 939, 942, 943. 
 Prentis v. Atlantic Coast Line Ry., 
 
 1142. 
 Preston v. C. & O. Ry., 793, 835. 
 Proctor V. Cincinnati, H. & D. 
 
 R. Ry., 1064. 
 Proctor & Gamble Co. v. Cincin- 
 nati, H. & D. R. R., 494, 506, 
 
 508, 511, 563, 564, 1116. 
 Proctor & Gamble Co. v. Cleve- 
 land, Cin., Chicago & St. L. 
 
 Ry., 488. 
 Proctor & Gamble v. U. S., 95, 
 
 945, 1134, 1135, 1137. 
 Producers' Pipe Line Co. v. St. L., 
 
 I. M. & S. Ry., 1100, 1101. 
 Proportional Rates on Excelsior 
 
 and Excelsior Wrappers, 937. 
 Proposed Advances in Freight 
 
 Rates, Re, 872. 
 Proposed Rate on Lumber, In re, 
 
 847, 894. 
 Protection of Potato Shipments 
 
 in Winter, 916. 
 Providence Coal Co. v. Providence 
 
 & W. R. R., 625, 685, 686. 
 Providence Rubber Co. v. Good- 
 year, 1062. 
 Public Service Gas Co. v. Public 
 
 Utility Commissioners, 280, 
 
 974. 
 Publication & Filing of Tariffs, Re, 
 
 841. 
 Pullman Co. v. Luke, 168. 
 Pulp & Paper Mf'rs Traffic Ass'n 
 
 V. C, M. & St. P. Ry., 583, 
 
 764. 
 Puritan Coal Mining Co. v. Penna. 
 
 Ry., 149. 
 Pyle V. East Tenn., Va. & Ga. Ry., 
 
 487, 507. 
 
 [Ixxxii] 
 
 Q 
 
 Quammen & Austad Lumber Co. 
 
 V. C, M. & St. P. Ry., 1073, 
 
 1077, 1114. 
 Queens Borough G. & G. Co. Case, 
 
 294. 
 Qmmby v. Me. Central Ry., 776. 
 
 R 
 
 Ragan & Buffet v. Aiken, 672, 675. 
 RaU and River Coal Co. v. B. & 
 
 0. R. R., 623, 627, 913, 939, 
 
 941, 942, 943. 
 Railroad Commission Cases, 142, 
 
 303, 994, 996, 1005. 
 Railroad Commission, v. Louis- 
 ville & Nashville Railroad, 
 
 803, 804, 1004. 
 Railroad Commission v. Savannah, 
 
 F. & W. R., 444, 877. 
 Railroad Commission v. Telegraph 
 
 Co., 95, 125. 
 Railroad Commission v. Texas & 
 
 P. Ry., 138, 1012. 
 Railroad Commission of Ark. v. 
 
 St. L., I. M. & S. Ry., 176, 177. 
 Railroad Commission of Ark. v. St. 
 
 L. & N. Ark. R. R. Co., 126. 
 Railroad Commission of Calif, v. 
 
 Ala. G. & S. Ry., 181. 
 Railroad Commission of Ind. v. 
 
 K. & I. B. & R. R. Co., 174. 
 Railroad Commission of Kansas 
 
 V. A., T. & S. F. Ry., 417, 439, 
 
 469, 768, 773, 790, 791. 
 Railroad Commission of Kentucky 
 
 V. Louisville & N. R. R., 657, 
 
 793, 1002. 
 Railroad Commission of La. v. 
 
 St. L. S. W. Ry., 589, 628, 776, 
 
 967. 
 Railroad Commission of La. v. 
 
 Texas & P. Ry., 113, 123, 139. 
 Railroad Commission of Montana 
 
 V. N. P. Ry., 382, 708, 1087, 
 
 1090. 
 Railroad Commission of Nevada 
 
Table or Cases Cited 
 
 [References 
 
 V. N. C. D. Ry. & S. V. Ry., 
 
 764. 
 Railroad Commission of Nevada 
 
 V. N. C. 0. Ry., 327, 585, 589. 
 Railroad Commission of Nevada 
 
 V. S. P. Co., 433, 552, 601, 753, 
 
 758, 768, 783, 784, 789, 795, 
 
 799, 1007, 1123. 
 Railroad Commission of Ohio v. 
 
 Hocking Valley Ry., 945. 
 Railroad Commission of Ohio v. 
 
 Worthington, 130, 138, 140, 
 
 1140. 
 Railroad Commission of Oregon. 
 
 V. S. P. Co., 583, 584, 764, 
 ■ 791, 1090, 1091. 
 Railroad Commission of Tennessee 
 
 V. Ann Arbor Ry., 623, 773, 
 
 774, 796. 
 Railroad Commission of Texas v. 
 
 A., T. & S. F. Ry., 349, 417, 
 
 1044. 
 Railroad Commission of Texas 
 
 V. Texas & P. Ry., 953. 
 Railroad Commission of Wiscon- 
 sin V. C. & N. W. Ry., 444, 
 
 742, 1113. 
 Railroad Commissioners, In re, 
 
 1012. 
 Railroad Commissioners v. A., 
 
 T. & S. F. Ry., 1061. 
 Railroad Commissioners v. Louis- 
 ville & N. R. R., 920. 
 Railroad Commissioners v. Weld, 
 
 417, 721. 
 Railroad Commissioners of Fla. v. 
 
 A. C. L. R. R. Co., 375. 
 Railroad Commissioners of Florida 
 
 V. S. A. L. Ry., 309, 603, 808, 
 
 1023. 
 Railroad Commissioners of Florida 
 
 V. Savannah, F. & W. R. R., 
 
 541, 1090. 
 
 Railroad Commissioners of Florida 
 V. S. Exp. Co., 166, 382, 438, 
 
 542, 725. 
 
 Railroad Commissioners of Iowa 
 V. I. C. R. R., 308, 309. 
 
 are to sections] 
 
 Railroad Co. at als., Appellants, v. 
 R. R. et. al, 695. 
 
 Railroad Telegraph Contracts, Re, 
 643, 646. 
 
 Rainey & Rogers v. St. L. & S. F. 
 R. R., 588, 798. 
 
 Raleigh & Gaston R. R. v. Davis, 
 15. 
 
 Ralston Townsite Co. v. M. P. 
 Ry., 925, 1011, 1046, 1047. 
 
 Randall v. Railroad, 915. 
 
 Randolph Lmnber Co. v. S. A. L. 
 Ry., 793. 
 
 Ransome v. Eastern Counties Ry., 
 582. 
 
 Rates on Bananas from Gulf Ports, 
 585, 745. 
 
 Rates on Cantaloupes, 418. 
 
 Rates and Charges on Food Prod- 
 ucts, Re, 229, 233, 417, 435, 
 437, 443, 444, 569, 1016, 1018, 
 1019, 1113. 
 
 Rates on Coal from Iowa to the 
 Dakotas, 585. 
 
 Rates on Coal to Milwaukee, 
 175. 
 
 Rates on Common Brick to Can- 
 ada, 384. 
 
 Rates on Corn & Corn Products, 
 In re, 777. 
 
 Rates on Cottonseed and its Prod- 
 ucts, 116, 787, 896. 
 
 Rates on Crushed Stone, 542. 
 
 Rates on Food Products, In re, 
 1008. 
 
 Rates on Fresh Meats and Packing- 
 House Products, 1113. 
 
 Rates on Fuel Wood, Sawdust, 
 and Shavings, 504. 
 
 Rates on Linseed Oil, 232, 468, 
 545, 738, 776. 
 
 Rates, etc, of the Louisiana Ry. 
 & Nav. Co., 115, 140, 881. 
 
 Rates on Meats, 776. 
 
 Rates on News Print Paper from 
 Sault Ste. Marie, 594. 
 
 Rates on Packing-House Products, 
 539. 
 
 [ Ixxxiii ] 
 
Table of Cases Cited 
 
 [References 
 
 Eates on Plaster and Gypsum 
 
 Rock, 200. 
 Rates and Practices in the Trans- 
 portation of Grain, In re, 821. 
 Rates & Practices of Mobile & 0. 
 
 R. R., Re, 805, 815, 820, 879. 
 Rates from St. Louis to Texas 
 
 Points, 286, 343, 348, 353. 
 Rates on Salt, In re, 623, 771, 787, 
 
 791. 
 Rates on Sand to Houston, Tex., 
 
 401, 504, 528. 
 Rates on Sash, Doors, and Blinds 
 
 into Texas, 505, 851. 
 Rate Schedules, Re, 844. 
 Rates for Single Packages In re, 
 
 401, 769, 967. 
 Rates on Soda Ash and Other 
 
 Commodities, 112. 
 Rates from Walsenburg Coal Field, 
 
 199, 545, 769, 773. 
 Raworth v. Northern P. R. R., 
 
 776, 1079, 1122. 
 Rawson v. Newport News & M. 
 
 V. R. R., nil. 
 Raymond v. Chicago, M. & St. 
 
 P. R., 501. 
 Rea V. Mobile & O. Ry., 448, 548, 
 
 816, 872, 1056, 1102, 1116. 
 Reagan v. Farmers' Loan & Trust 
 
 Co., 303, 357, 994, 995, 996, 
 
 1140. 
 Ream v. S. P. Co., 708, 850, 1094. 
 Rebate Tank & Barrel Rates, Re, 
 
 733. 
 Receivers & S. Ass'n of Cincinnati 
 
 V. Cincinati, N. 0. & T. P. Ry., 
 
 187, 375, 376, 457, 582, 758, 
 
 769, 776, 793, 796, 1095. 
 Reconsignment and Storage of 
 
 Lumber and Shingles, 183, 
 
 193. 
 Red Cloud Mining Co. v. South- 
 ern Pac. Co., 834. 
 Red Cloud Oil Mf'g Co. v. A. & V. 
 
 R. R., 203. 
 Red R. O. Co. v. T. & P. Ry., 115, 
 
 698, 776. 
 [ Ixxxiv ] 
 
 are to sections] 
 
 Red Rock Fuel Co. v. Baltimore 
 
 & O. R. R., 712, 920. 
 Redlands, L. & C. D. Water Co. 
 
 V. Redlands, 288, 310, 364. 
 Reduced Rates on Returned Ship- 
 ments, In re, 436, 439. 
 Refrigerating Charges of Kansas 
 
 City So. Ry., 181. 
 Refrigerator Ice Machine Co. v. 
 
 C. & N. W. Ry., 520. 
 Refuge Cotton Oil Co. v. St. L., 
 
 I. M. & S. Ry., 868, 1081. 
 Reiter, Curtis & Hill v. N. Y. S. 
 
 & W. R. R., 926. 
 Relative Tank & Barrel Rates, Re, 
 
 419. 
 Released Rates, Re, 835, 846. 
 Reliance Textile & Dye Works v. 
 
 S. Ry. Co., 137, 758, 768. 
 Religious Teachers, Re, 642. 
 Reno Grocery Co. v. So. Pac, 
 
 1097. 
 Reno Wholesale Liquor Store v. 
 
 Southern Pacific Co., 1053. 
 Rental Charges on Private Cars, 
 
 169. 
 Rentals for Insulated Cars, Re, 181. 
 Restricted Rates, In re, 632, 643, 
 
 646, 685, 689, 699, 705, 714, 
 
 731, 739, 803, 816, 826, 899. 
 Reynolds v. Western New York 
 
 & P. Ry., 513, 716, 1080. 
 Rhinelander Paper Co. v. Mo. 
 
 Pac. Ry., 654. 
 Rhode Island Egg & B. Co. v. 
 
 Lake Shore & M. S. R. R., 
 
 419, 518. 
 Rice V. Cincinnati, W. & B. R. R., 
 
 419, 630, 714, 733, 737, 920, 
 
 1002, 1112, 1119, 1120, 1121. 
 Rice V. Louisville & N. R. R., 732, 
 
 733, 1100. 
 Rice V. Western N. Y. & P. R. R., 
 
 418, 446, 462, 586, 625, 733, 
 
 804, 1061, 1064, 1065. 
 Richards v. Atlantic C. L. Ry., 
 
 725. 
 Richmond Elevator Co. v. Pere 
 
Table or Cases Ci'TEd 
 
 [References are to sectiocB) 
 
 Marquette R. R., 627, 630, 
 
 940, 1115. 
 Riddle v. Baltimore & 0. R. R., 
 
 938, 1080. 
 Riddle v. New York, L. E. & W. 
 
 R. R., 938, 1061. 
 Riddle v. Pittsburgh & L. E. R. R., 
 
 932, 938, 1065, 1093. 
 Right of Railroad Companies to 
 
 Exchange Transportation, Re, 
 
 646. 
 Riter v. O. S. L. R. R., 815, 985. 
 River-Illinois Wheat and Flour 
 
 Rates, 776. 
 River Lumber Company v. Bryant 
 
 Lumber Co., 656. 
 Riverside Mills v. A. C. L. Ry., 
 
 1159. 
 Riverside Mills v. G. R. R., 934, 
 
 10^8, 1083, 1110, 1116. 
 Riverside Mills v. St. L. & S. F. 
 
 R. R., 540. 
 Riverside Mills v. Southern Rail- 
 way, 509. 
 Roberts Cotton Oil Co. v. I. C. R. 
 
 R. Co., 99, 126. 
 Robinson v. B. & 0. R. R. Co., 
 
 1051, 1052. 
 Robinson Land & Lumber Co. v. 
 
 M. & 0. R. R., 469. 
 Roby V. State ex rel., 722. 
 Rock Spring Distilling Co. v. I. 
 
 C. R., 1092. 
 Rocky Hill Buggy Co. v. Southern 
 
 Ry., 791. 
 Rocky Mt. Mills v. Wilmington 
 
 & W. R. Co., 169. 
 Roden B. Grocery Co. v. A. G. G. 
 
 R. R., 575. 
 Rogers v. Oregon Ry. & Nav. Co., 
 
 791. 
 Rogers & Co. v. P. & R. Ry., 1059. 
 Rogers Locomotive & Machine 
 
 W. V. Erie R. R., 918. 
 Root V. Long I. R. R., 694, 718, 
 
 720, 730. 
 Root V. Long I. R. R., 694, 718, 
 
 720, 730. 
 
 Root V. Railroad Co., 717. 
 Roper Lumber Cedar Co. v. Chi- 
 cago & N. W. Ry., 1114. 
 Rosenbaum Bros. v. B. & 0. R. 
 
 R., 831. 
 Rosenblatt & Sons v. C. & N. W. 
 
 Ry., 436, 439. 
 Roth V. Texas & P. Ry., 723, 1056, 
 
 1106, 1135. 
 Rothschild v. Wabash R. R., 618, 
 
 649, 680, 681. 
 Rowland v. N. Y., N. H. & H. R. 
 
 R. Co., 1050. 
 Royal Coal & Coke Co. v. So. Ry., 
 
 815, 943, 944. 
 Running v. St. P., M. & 0. Ry., 
 
 868, 1048. 
 Rutland R. R. Co. v. Bellows 
 
 Falls & S. R. St. Ry. Co., 882. 
 Ryland & Brooks Liunber Co. v. 
 
 G. & 0. Ry., 868. 
 Ryley v. W. R. R., 738, 741, 794. 
 
 S 
 
 Saget & Co. V. III. C. Ry., 658. 
 Saginaw Board of Trade v. G. T. 
 
 Ry., 776, 793, 808. 
 Saginaw & Manistee Lumber Co. 
 
 V. A., T. & S. F. Ry., 802. 
 St. Louis Blast Furnace Co. v. V. 
 
 Ry., 704, 820, 828, 1082, 1110. 
 St. Louis Drayage Co. v. Louisville 
 
 & N. R. Co., 179, 865, 870. 
 St. Louis Hay & Grain Co. v. 
 
 Illinois Cent. R. R., 805, 875, 
 
 878. 
 St. Louis, I. M. & S. Ry. v. Ed- 
 wards, 146. 
 St. Louis, I. M. & S. Ry. v. Ren- 
 
 froe, 933. 
 St. Louis & S. F. Ry. v. Burge- 
 
 ForbesCo., 117. 
 St. Louis & S. F. Ry. Co. v. Gill, 
 
 304, 400. 
 St. Louis & S. F. Ry. v. Hadley, 
 
 317, 327, 344, 395, 406, 637, 
 
 765, 963. 
 
 r Ixxxv 1 
 
'Table of Cases Cited 
 
 [References are to sections] 
 St. Louis & S. F. Investigation, 
 
 970. 
 St. Louis & S. F. Ry. v. Ostrander, 
 
 1050. 
 St. Louis & S. F. Ry. v. State, 128, 
 
 146, 1012. 
 St. L., S. & P. Ry. V. P. & P. U. 
 
 Ry., 136, 165, 176, 187, 193, 
 
 886, 913, 929. 
 St. Louis S. W. Ry. v. Clay Ginn. 
 
 Co., 935. 
 St. Louis S. W. Ry. v. Lewallan 
 
 Bros., 1054. 
 St. Louis S. W. Ry. v. State, 
 
 937. 
 St. Paul Board of Trade v. M., 
 
 St. P. & S. Ste. M. Ry., 837. 
 St. Paul and Puget Sound Accounts, 
 
 360, 363, 1009. 
 St. Regis Paper Co. v. N. Y. C. 
 
 & H. R. R. R., 881. 
 Salt Rates from Wisconsin to 
 
 Iowa, 895. 
 Samuels v. Louisville & N. R. R., 
 
 621, 871, 887, 1116. 
 Samuels & Co. v. St. L. S. W. Ry., 
 
 868. 
 San Bernardino Bd. of Trade v. 
 
 Atchison, T. & S. F. R. R., 829. 
 San Diego L. & T. Co. v. National 
 
 City, 306. 
 San Diego L. & T. Co. v. Jasper, 
 
 314. 
 San Diego L. & T. Co. v. National 
 
 City, 269, 370. 
 San Diego Water Co. v. San Diego, 
 
 288, 368. 
 Sanders v. C, M. & St. P. Ry., 
 
 825. 
 Sandford v. Catawissa W. & E. R. 
 
 R., 209, 619. 
 Sandford v. Western Express Co., 
 
 793. 
 Sandstone, Minn.-Missouri River 
 
 Building Stone Rates, 764, 
 
 900. 
 Sanford v. Western Express Co., 
 
 1081. 
 
 [ Ixxxvi ] 
 
 Santa Fe P. & P. Ry. Co. v. Grant 
 
 Bros. C. Co., 203. 
 Santa Rosa Traffic Ass'n v. So. 
 
 Pac. Ry., 374, 793, 804. 
 Sargent v. Railroad Co., 617. 
 Saunders & Co. v. So. Express Co., 
 
 769. 
 Saunders & Co. v. S. P. Co., 1043. 
 Savannah Bureau v. Charleston & 
 
 Savannah Ry., 591. 
 Savannah Bureau of Freight & 
 
 Transp. v. Louisville & N. 
 
 R. R., 418, 602, 776, 870. 
 Savery v. New York C. & H. R. 
 
 R., 709, 1002. 
 Savitz V. Ohio & M. Ry., 680, 717, 
 
 720, 730. 
 Sawyer & Austin Lumber Co. v. 
 
 St. L., I. M. & S. Ry., 505, 
 
 514. 
 Sayles v. N. Y., N. H. & H. R. R., 
 
 1104. 
 Schemn v. L. & N. R. R., 1039. 
 Schmidt & Peters, Inc., v. A., T.. 
 
 & S. F. Ry., 531, 794. 
 Schmidt & Sons v. M. C. R. R., 
 
 552, 583, 584, 593, 595, 773, 
 
 805, 1113. 
 Schowalter & Company, A. H., v. 
 
 Chicago, R. I. & P. R. Co., 
 
 1092. 
 Sehulz-Hansen Co. v. S. P. Co., 
 
 179, 815. 
 Schumacher Milling Co. v. Chicago, 
 
 R. I. & P. R. R., 435, 484, 487, 
 
 501, 508, 525, 549, 550, 723. 
 Schuyler v. Southern Pacific Co., 
 
 639, 648. 
 Schwager & Nettleton v. Great 
 
 Northern Ry., 816. 
 Scofield V. Lake Shore & M. S. 
 
 R. R., 627, 690, 691, 720, 722, 
 
 724, 730, 733, 920, 1002. 
 Scott V. T. & N. O. R. R., 833, 1049. 
 Scott-Mayer Commission Co. v. 
 
 C, R. I. & P. Ry., 842. 
 Scott Paper Co. v. P. R. R., 761, 
 
 1061. 
 
Table of Cases Cited 
 
 [References are to sections] 
 
 Scrap-iron Rates between Duluth 
 
 and Chicago, 504, 783, 799. 
 Scudder v. T. & P. Ry., 539, 835. 
 Scull V. Atlantic C. L. R. R. Co., 
 
 806. 
 Sea Gull Specialty Co. v. Baltimore 
 
 Steam Packet Co., 492. 
 Seaboard Air L. R. Co. v. Florida, 
 
 232, 275, 399, 410, 809, 1119. 
 Seaboard Air Line Ry. Co. v. Rail- 
 road Comm., 304. 
 Seasongood v. Term. & O. Transp. 
 
 Co., 866, 871. 
 Seawell v. Kansas City, F. S. & M. 
 
 Ry., 125, 787. 
 Selkirk v. Stevens, 122. 
 Shamberg v. Delaware, L. & W. 
 
 Ry., 347, 737. 
 Sheridan Chamber of Commerce 
 
 V. C, B. & Q. R. R. Co., 373, 
 
 405, 467, 583, 584, 771. 
 Shiel & Co. V. Illinois C. R. Co., 
 
 1101. 
 Shipper P. Ass'n v. Atlantic C. L. 
 
 R. R., 868. 
 Shoemaker v. C. & P. Tel. Co., 
 
 653, 705. 
 Sholl V. German Coal Co., 190. 
 Shoupe & Co. V. T. & B. V. Ry., 
 
 868. 
 Shreveport Rate Case, 100. 
 Sidman v. Richmond & D. R. R., 
 
 • 716. 
 Sieber Co. v. Chicago, M. & St. P. 
 
 Ry., 137. 
 Silkman v. Water Commissioners, 
 
 680, 683. 
 Silvester v. C. & S. R. R. of Wash., 
 
 122. 
 Simpson v. Shepard, 99, 284. 
 Sims V. M. & W. R. R. R., 504, 583. 
 Sinclair & Co. v. C, M. & St. P. 
 
 Ry., 548, 654, 796, 1108. 
 Sioux City Commercial Club v. 
 
 C. & N. W. Ry., 771, 776. 
 Sioux City Terminal Elevator Co. 
 
 V. C, M. & St. P. Ry., 468, 
 
 776, 793, 794. 
 
 Slider v. So. Ry., 462, 467, 802. 
 Sligo Iron Store Co. v. Atchison, 
 
 T. & S. F. R. R., 503, 700, 
 
 1085. 
 Sligo Iron Store Co. v. Union P. 
 
 R. R., 436, 527, 707. 
 Smith-Booth-Ushier Co. v. L. S. 
 
 & M. S. Ry., 509. 
 Smith V. Alabama, 161. 
 Smith V. Gt. No. Ry. Co., 493. 
 Smith V. No. Pacific R. R., 709. 
 Smyth V. Ames, 131, 217, 262, 274, 
 
 304, 310, 323, 324, 395, 756, 
 
 857, 960, 968, 1134. 
 Snook V. Central R. R. of N. C, 
 
 928. 
 Snyder M. D. v. Chicago, B. & Q., 
 
 1049. 
 Soft Coal Rates from Southern 
 
 Illinois to Arkansas, 193. 
 Solvay Process Co. v. D., L. & W. 
 
 R. R., 743. 
 Somerset, Citizens of, v. W. Ry. & 
 
 Co., 135, 165. 
 Sondheimer Co. v. I. C. R. R., 
 
 659, 768, 793, 803, 804, 805, 
 
 1059. 
 South Atlantic Waste Co. v. S. 
 
 Ry., 793, 901. 
 Southcote's Case, 52. 
 Southern Bitulithis Co. v. I. C. Ry., 
 
 795. 
 Southern California Sugar Co. v. 
 
 S. P. L. A. & S. L. R. R., 894, 
 
 927. 
 Southern Cotton Oil Co', v. A. C. 
 
 L. R. R., 832. 
 Southern Furniture Mf'rs Ass'n 
 
 V. S. Ry., 594, 773, 793, 
 
 1082. 
 Southern Illinois Millers' Ass'n 
 
 V. L. & N. Ry., 764, 787. 
 Southern Indiana Exp. Co. v. 
 
 United States Exp. Co., 885, 
 
 915. 
 Southern Ry., In re, 791. 
 Southern Ry. Co. v. Atlanta Sand 
 
 & S. Co., 930. 
 
 [ Ixxxvii ] 
 
Table of Cases Cited 
 
 [References are to sections] 
 
 Southern Ry. v. Atlanta Stove 
 
 Wks., 400, 463, 775. 
 Southern Ry. v. Harrison, 1050. 
 Southern Ry. v. McNeill, 304, 
 
 400. 
 Southern Ry. v. Railroad Commis- 
 sion, 806. 
 Southern Ry. v. Reid, 147. 
 Southern Ry. v. St. Louis H. & G. 
 
 Co., 393, 765, 1145. 
 Southern Ry. v. Tift, 1051. 
 Southern Indiana R. R. v. R. 
 
 Commission, 463, 1037. 
 Southern Pacific Co., Re, 1074. 
 Southern Pacific Co. v. Bartine, 
 
 69, 273. 
 Southern Pacific Co. v. Interstate 
 
 Commerce Commission, 96, 
 
 411, 463, 771, 802, 838, 985, 
 
 1037, 1134, 1141, 1144, 1148, 
 
 1161. 
 Southern Pacific Co. v. Patterson, 
 
 572. 
 Southern Pacific Co. v. Railroad 
 
 Comrs., 279, 304, 324, 350, 
 
 351, 359. 
 Southern Pacific Co. v. Redding, 
 
 834, 1050, 1122. 
 Southern Pacific Ry. v. Tift, 1135, 
 
 1138. 
 Southern Pacific Terminal Co. v. 
 
 Interstate Commerce Commis- 
 sion, 129, 175, 189, 731. 
 Southern Paint & G. Co. v. Lake 
 
 Erie& W. Ry., 1102, 1115. 
 Southern Timber & Land Co. v. 
 
 So. Pac. Ry., 784, 798. 
 Southern Wire Co. v. St. Louis B. 
 
 & T. R. R., 655. 
 Southwestern Millers' League v. 
 
 A., T. & S. F. Ry., 535. 
 Southwestern Missouri Millers' 
 
 Club V. M., K. & T. Ry., 450, 
 
 595, 603. 
 Southwestern Missouri Millers' 
 
 Club V. St. L. & S. F. R. R., 
 
 739, 744, 931, 933. 
 Southwestern Produce Distribu- 
 
 [ Ixxxviii ] 
 
 tors V. W. R. R., 179, 185, 209, 
 
 657, 660, 1004, 1046. 
 Southwestern Railroad Co. v. 
 
 Webb, 162. 
 Southwestern Shippers' Traffic 
 
 Ass'n V. T. & S. F. Ry., 127, 
 
 134, 163, 460, 584, 761, 764, 
 
 791, 880, 896, 900. 
 Spartanburg Board of Trade v. 
 
 Richmond & D. R. R., 1120, 
 
 1122. 
 Speigle V. S. Ry., 184, 385, 598. 
 Spiegle & Co. v. So. Ry., 768. 
 Spillers & Co. v. L. & N. R. R., 
 
 815, 820. 
 Spokane, City of, v. No. Pac. Ry., 
 
 237, 253, 259, 266, 271, 274, 
 
 290, 308, 320, 322, 326, 328, 
 
 353, 386, 456, 595, 763, 776, 
 
 782, 783, 785, 788, 789, 791, 
 
 793, 794, 795, 797, 799, 802, 
 
 858, 971, 1003, 1007, 1023, 
 
 1064, 1078, 1102, 1123. 
 Spregle v. S. Ry., 878. 
 Sprigg V. B. & 0. R. R., 441, 597, 
 
 640, 1004. 
 Spring Valley Waterworks v. San 
 
 Francisco, 288, 305, 310, 
 
 314. 
 Spring Valley Waterworks v. Schot- 
 
 tler, 305. 
 Springfield Commercial Ass'n v. 
 
 P. R. R., 584. 
 Squire v. Michigan Central R. R., 
 
 448,464. 
 Stacey Mercantile Co. v. M., St. P. 
 
 & L. St. M. Ry., 757. 
 Stacy & Sons v. 0. S. L. R. R., 601, 
 
 901. 
 Stahl V. Oregon Ry. & Nav. Co., 
 
 1104. 
 Standard Lime & Stone Co. v. 
 
 Cumberland Valley Ry., 623, 
 
 758. 
 Standard Mirror Co. v. Pa. Ry., 
 
 352, 383, 393. 
 Standard Oil Co. v. C. T. T. R. R. 
 
 Co., 1110. 
 
Table or Cases Cited 
 
 [References are to sections] 
 Standard Oil Co. v. United States, 
 
 135. 
 Standard Oil Co. of Indiana v. 
 
 United States, 633, 634, 848. 
 Standard Oil Co. of N. Y. v. United 
 
 States, 628, 843. 
 Stanislaus Co. v. San Joaquin C. & 
 
 I. Co., 305, 312. 
 Star Grain & Lumber Co. v. A., T. 
 
 & S. F. Ry., 188, 193, 194, 195, 
 
 830, 880, 898. 
 State V. Adams Express Co., 147, 
 
 758, 776, 884. 
 State V. Atchison, T. & S.'F. Ry. 
 
 Co., 805. 
 State V. Atlantic C. L. Ry., 394, 
 
 805, 962. 
 State V. Central Vt. Ry., 305, 682, 
 
 715. 
 State V. Chicago & A. Ry., 626. 
 State ex rel. v. Chicago, B. & Q. 
 
 R. R. Co., 935. 
 State V. Chicago, S. P. M. & O. 
 
 R. R. Co., 96, 125. 
 State V. Cincinnati, N. O. & T. 
 
 P. R. R. Co., 729, 730, 734, 
 
 736. 
 State V. Citizens' Telephone Co., 
 
 172. 
 State ex rel. v. Delaware, L. & W. 
 
 Ry. Co., 727. 
 State V. Great Northern Railway, 
 
 998. 
 State V. Gulf, C. & S. F. Ry. Co., 
 
 132. 
 State V. Jacksonville Terminal 
 
 Co., 176. 
 State of Kansas v. A., T. & S. F. 
 
 Ry., 808. 
 State V. Martyn, 637. 
 State ex rel. v. Minneapolis & St. 
 
 L. R. R. Co., 275, 325, 463, 
 
 754, 775, 807. 
 State V. Mo. Pac. R. R., 146, 997. 
 State ex rel. v. Northern Ry. Co., 
 
 400. 
 State ex rel. v. Railroad Commis- 
 sion, 267. 
 
 State ex rel. v. Seaboard A. L. Ry. 
 
 Co., 237, 275, 317, 359, 375. 
 State V. Southern Ry. Co., 133, 
 
 136, 637, 652. 
 State V. Southern P. Ry., 8, 128. 
 State V. Union Pac. Ry., 639, 653. 
 State V. Yazoo R. R., 999. 
 Steamship Co. v. McGregor, 617. 
 Steenerson v. Gt. No. Ry., 258, 
 
 265, 285, 310, 323, 324, 332, 
 
 334, 370, 372, 377, 408, 807, 
 
 860. 
 Steinberger v. Cape Fear & Y. V. 
 
 R. R. Co., 96, 125. 
 Steinfeld & Co. v. I. C. R. R., 125, 
 
 791, 796, 1104. 
 Steritz v. No. M. & C. R. R., 602. 
 Sterling & Son Co. v. M. C. R. R. 
 
 Co., 185, 737. 
 Stevenson v. Montreal Telegraph 
 
 Co., 862. 
 Stewart & Clark Mf'g Co. v. A., 
 
 T. & S. F. Ry., 507. 
 Stickney v. I. C. C, 1145. 
 Stilwell V. L. & H. R. Ry., 832. 
 Stone V. Detroit, G. H. & M. Ry., 
 
 625. 
 Stone V. Natchez R. R., 997. 
 Stone et al. v. Yazoo & M. V. R. R., 
 
 629. 
 Stone & Meyers Co. v. Louisville 
 
 & W:, 1109. 
 Stone 0. Co. v. P. B. & W. R. R., 
 
 848. 
 Stonega C. & C. Co. v. L. & N. 
 
 Ry., 193, 759, 760. 
 Storega C. & C. Co. v. Louisville 
 
 & N. R. R., 195. 
 Stowe-Fuller Co. v. Pennsylvania 
 
 Co., 706. 
 Substitution of Tonnage at Transit 
 
 Points, In re, 698. 
 Suburban Rate Case, 597. 
 Sun. Co. V. I. S. R. R. Co., 593. 
 Suffem V. Indiana, D. & W. Ry., 
 
 419, 815, 818, 820, 833. 
 Suffern Grain Co. v. B. & 0. R. R., 
 
 738. 
 
 [ Ixxxix ] 
 
Table of Cases Cited 
 
 [References are to sections] 
 
 Suffern Grain Co. v. I. C. R. R., 
 
 79, 576, 744, 768, 771, 776, 
 
 805, 807, 895. 
 Suffern, Hunt & Co. v. Indiana, 
 
 D. & W. Ry., 533, 567. 
 Sunderland Bros. v. Missouri R. 
 
 & F. Ry., 848. 
 Sunderland Bros. Co. v. P. M. R. 
 
 R., 444. 
 Sunderland Bros. Co. v. St. L. & 
 
 S. F.R. R. Co., 404, 873. 
 Sunnyside Coal Mining Co. v. D. 
 
 & R. G. R. R., 1098. 
 Superior Commercial Club v. G. 
 
 N. Ry., 434, 594, 753. 
 Suspension of Rates on Packing- 
 House Products, 784. 
 Swaffield v. Atlantic Coast Line, 
 
 507, 508. 
 Swift & Co. V. Ronan, 191. 
 Swift & Co. V. B. & O. R. R. Co., 
 
 116. 
 Swift & Co. V. Chicago & A. R. R., 
 
 450, 460, 823, 1084. 
 Switching at Baltimore, 383. 
 Switching Charges at Sheffield, 
 
 Minn., 405. 
 Switching at Galesburg, 111., 177. 
 Switzer Lumber Co. v. K. C. S. 
 
 Ry., 594. 
 
 Taezer v. Chicago, R. I. & P., 
 
 648. 
 Talge Mahogany Co. v. S. Ry. Co., 
 
 117. 
 Tantz Bros. & Co. v. L. V. Ry., 
 
 761. 
 Tap Line Cases, 187, 192, 193, 
 
 194, 195, 196, 714, 731, 743, 
 
 1145. 
 Tariffs & Classifications of Pa. R. 
 
 R., Re, 1111. 
 Tariffs of Transcontinental Lines, 
 
 Re, 768. 
 Taylor v. M. P. Ry., 1105, 1122. 
 Taylor v. N. & W. Ry., 382, 402, 
 
 405, 600, 725. 
 
 [xc] 
 
 Taylor Dry Goods Co. v. M. P. 
 
 Ry., 503, 515, 531, 770, 793, 
 
 848. 
 Tecumseh Celery Co. v. Cincin- 
 nati, J. & M. Ry., 507, 512, 
 
 534. 
 Telephone Co. v. Brown, 866. 
 Terre Haute & T. R. R. v. Peoria 
 
 & P. V. Ry. Co., 176. 
 Texarkana Freight Bureau v. St. 
 
 L., I. M. & So. Ry., 124, 223, 
 
 486, 584, 598, 791, 793, 799. 
 Texas Brewing Co. v. A., T. & S. F. 
 
 Ry., 517, 1117. 
 Texas Central Railroad Company 
 
 V. Rust, 696. 
 Texas Common Points Case, 600, 
 
 808. 
 Texas & N. 0. R. R. Co. v. Sabine 
 
 Transp. Co., 138, 305. 
 Texas & P. Ry. v. Abilene Cotton 
 
 Oil Co., 629, 829, 1051, 1133, 
 
 1134, 1135. 
 Texas & P. Ry. y. Am. Tie & 
 
 Timber Co., 1135, 1136. 
 Texas & P. Ry. v. Avery, 133. 
 Texas & P. Ry. v. I. C. C, 111, 118, 
 
 420, 588, 764, 772, 782, 793, 
 
 873, 1000, 1089, 1092, 1096, 
 
 1133, 1134, 1145. 
 Texas & P. Ry. v. Mugg, 629, 829, 
 
 1050, 1136. 
 Texas & P. Ry. v. Railroad Com- 
 mission, 148. 
 Texico Transfer Co. v. L. & N. 
 
 R. R., 837, 1097. 
 Thacker Coal & Coke Co. v. N. & 
 
 W. Ry., 1135. 
 Thatcher v. Fitchburg Ry., 784. 
 Theatrical Rates, Re, 1039. 
 Thely Grain Co. v. F. S. & W. R. 
 
 R., 1063. 
 Thomas Iron Co. v. Penn. Ry., 791. 
 Thompson v. London, etc., R. Co., 
 
 676. 
 Thompson v. Penn. R. R., 716. 
 Thompson Lumber Co. v. I. C. C, 
 
 230, 1092, 1110, 1122. 
 
Table of Cases Cited 
 
 [References are to sections] 
 
 Thorpe v. New York C. & H. R. 
 
 R. R., 168. 
 Through Passenger Routes, In re, 
 
 896. 
 Through Rates & Through Rates, 
 
 Re, 874. 
 Thurber v. New York C. & H. R. 
 
 R. R., 213, 486, 511, 530, 538, 
 
 687. 
 Tickets, Re, 812. 
 Tift V. So. Ry., 230, 235, '^21, 433, 
 
 435, 444, 508, 525, 959, 984, 
 
 1084, 1138. 
 Tifton, Mayor & Council of, v. 
 
 L. & N. Ry., 758, 808 
 Tilley v. Savannah F. & W. R. R. 
 
 Co., 302. 
 Toledo, A. A. & N. M. Ry. v. 
 
 Pennsylvania Co., 884, 1138. 
 Toledo Produce Exch. v. Lake 
 
 Shore & M. S. R. R., 763, 
 
 1000, 1062. 
 Topeka Traffic Ass'n v. A. & V. 
 
 Ry., 768. 
 Toledo, W. & W. R. Co. v. Elliott, 
 
 616. 
 Tone Bros. v. I. C. R. R., 511, 525. 
 Toomer v. London R. Co., 692. 
 Topeka Banana Dealers' Ass'n 
 
 v. St. L. & S. F. Ry., 786, 794, 
 
 802. 
 Topeka Traffic Ass'n v. A. & V. 
 
 Ry., 584, 585. 
 Tozer v. United States, 764, 765, 
 
 873. 
 Trades League of Phila. v. P. W. 
 
 & B. R. R., 520. 
 Traders & Travelers Union v. 
 
 Phila. & R. R. R., 1002. 
 Traer v. C. & A. R. R., 943. 
 Traer v. C, B. & Q. R. R., 1006. 
 Traffic Ass'n of St. Louis Coffee 
 
 Importers v. I. C. Ry., 511, 
 
 776, 791, 802. 
 Traffic Bureau of Merchants' Ex- 
 change of San Francisco v. 
 
 S. P. Co., 373, 408, 409. 
 Traffic Bureau of Nashville v. 
 
 L. & N. R. R., 396, 405, 409, 
 
 725, 763, 793, 1091. 
 Traffic Bureau of St. Louis v. C, 
 
 B. & Q. R. R., 182. 
 Traffic Bureau of W. v. L. & N. 
 
 R. R., 349. 
 Trammell v. Clyde Steamship Co., 
 
 135, 388, 598, 877, 1074, 1095. 
 Trans-Missouri Freight Ass'n, 981. 
 Transcontinental Commodity 
 
 Rates, 600, 789, 799, 832. 
 Transcontinental Rates from Group 
 
 F., 776, 785, 787. 
 Transit Case, 141, 184, 738, 820, 
 
 831, 879. 
 Transportation Bureau of Wichita 
 
 V. St. L. & S. F. R. R., 594. 
 Transportation by the C. & O., Re, 
 
 128. 
 Transportation Co. v. Block Bros., 
 
 169. 
 Transportation Co. v. Parkersburg, 
 
 189. 
 Transportation of Coal, Re, 644. 
 Transportation of Coal and Mine 
 
 Supplies, Re, 821. 
 Transportation of Company Ma- 
 terial, In re, 643, 646. 
 Transportation of Fruit, In re, 169, 
 
 181, 574, 814, 1002, 1003. 
 Transportation of Immigrants from 
 
 New York, Re, 941, 985. 
 Transportation & Refrigeration of 
 
 Fruit, Re, 920. 
 Transportation of Wool, Hides and 
 
 Pelts, In re, 385, 439, 468, 505, 
 
 508, 509, 568, 594, 761, 796, 
 
 801. 
 TrajTiham v. Charleston & W. C. 
 
 Ry., 148. 
 Trier v. C, St. P., M. & 0. Ry., 
 
 394. 
 Trinity & B. V. Ry. Co. v. Gep- 
 
 pert, 146. 
 Troutman v. Smith, 331, 994. 
 Troy Board of Trade v. Ala. M. 
 
 Ry., 135, 139, 640, 771, 1095, 
 
 1116. 
 
 [xci] 
 
Table of Cases CiteI) 
 
 [References 
 
 Truck Farmers' Ass'n v. North- 
 eastern R. R., 444, 574. 
 
 Truck Growers Ass'n v. A. C. L. 
 R. R., 469, 585, 793. 
 
 Tucker v. Missouri Pac. Ry., 344, 
 394, 728. 
 
 Twellis V. Pa. R. R. Co., 692. 
 
 Twitchell v. Spokane, 362. 
 
 Tyson & I. Buggy Co. v. A. & A. 
 Ry., 1057. 
 
 U 
 
 UUman v. Adams Express Co., 
 
 764, 1109. 
 Ulric V. L. S. & M. S. Ry., 787. 
 Underbilling, In re, 346, 623, 625, 
 
 630. 
 Union Bridge Co. v. U. S., 1133. 
 Union Pacific Ry. v. Goodridge, 
 
 649. 
 Union Pacific Ry. v. United States, 
 
 355, 370, 765, 873, 877. 
 Union Pacific Ry. v. Updike Grain 
 
 Co., 182, 737, 741. 
 Union Pacific Tea Co. v. Penn- 
 sylvania Ry., 436, 526, 771. 
 Union Ry. of Bait. v. Canton R. R., 
 
 176. 
 Union Tanning Co. v. S. Ry., 212, 
 
 382, 402, 439, 529, 583, 600, 
 
 632, 705, 763, 1075. 
 Union Trust Co. v. Atchison, T. & 
 
 S. P. R. R., 572, 578. 
 United States v. A., T. & S. F. R. 
 
 R., 624. 
 United States v. A., T. & S. F. Ry., 
 
 650, 827. 
 United States v. A., T. & S. F. Ry., 
 
 101, 601. 
 United States v. B. & 0. R. R., 
 
 737, 1148, 1150. 
 United States v. B. & 0. R. R., 
 
 178, 740. 
 United States v. B. & 0. R. R., 
 
 939, 942, 944, 1145. 
 United States v. B. & O. S. W. 
 
 Ry., 98, 891, 925, 1020, 1106, 
 
 1144,1145,1146. 
 
 \. [ xcii ] 
 
 are to sections] 
 
 United States v. Bunch, 633. 
 United States v. B. Z. & C. Ry. 
 
 Co., 126. 
 United States v. C. & A. Ry., 
 
 739. 
 United States v. Chicago, K. & S. 
 
 Ry., 128, 830. 
 United States v. Central Vt. Ry., 
 
 633. 
 United States v. Chicago & N. W. 
 
 Ry., 647, 716. 
 United States v. C. R. & Nav. Co., 
 
 659. 
 United States v. Delaware & H. 
 
 R. R., 645. 
 United States v. Delaware, L. & W. 
 
 Ry., 645. 
 United States ex rel. Morris v. 
 
 D., L. & W. R. R., 169. 
 United States v. Freight Associa- 
 tion, 756. 
 United States v. Ganley, 627. 
 United States v. Geddes, 126. 
 United States v. Grimaud, 1133. 
 United States v. Hocking Valley 
 
 Ry., 631, 653, 658. 
 United States v. Howell, 818. 
 United States v. Illinois Terminal 
 
 R. R., 626, 830. 
 United States v. Joint Passenger 
 
 Traffic Ass'n, 981. 
 United States ex rel. v. Kansas 
 
 City. & So. Ry., 952. 
 United States v. Knight, 112. 
 United States v. Lehigh V. R. R., 
 
 125, 645. 
 United States v. Louisville & N. 
 
 Ry., 1134. 
 United States v. Mellen, 787. 
 United States v. Merchants' & 
 
 Miners' Transp. Co., 634, 816. 
 United States v. Michigan Central 
 
 R. R., 622, 1155. 
 United States v. Miller, 818. 
 United States v. Milwaukee Refrig. 
 
 Transit Co., 624. 
 United States v. N. Y. C. & H. 
 
 R. R. R., 843. 
 
' Table of 
 
 [References 
 
 United States v. Norfolk & W. Ry. 
 
 Co., 942, 945. 
 United States v. Northern Pac. 
 
 Ry. Co., 866. 
 United States v. Ohio Oil Co., 102, 
 
 170, 189. 
 United States ex rel. v. Oregon Ry. 
 
 & Nav. Co., 803, 942. 
 United States v. Pac. & Arctic Co., 
 
 1136. 
 United States v. Pacific Ry. & N. 
 
 Co., 163. 
 United States v. Philadelphia & 
 
 R. Ry., 631. 
 United States v. Seaboard Ry. Co., 
 
 131, 132. 
 United States v. So. Pac. Co., 641, 
 
 830, 1058. 
 United States v. Standard Oil Co., 
 
 817, 827, 843, 848. 
 United States v. Sunday Creek 
 
 Co., 628. 
 United States v. Texas & P. R. R., 
 
 634, 826, 827. 
 United States v. Tozer, 627, 680, 
 
 686, 758. 
 United States v. Transmission 
 
 Freight Ass'n, 1011. 
 United States v. Union Pac. R. 
 
 R., 647, 892, 896, 1044, 
 
 1087. 
 United States v. Union S. Y. & 
 
 T. Co., 138, 187, 206, 830, 
 
 952, 1010, 1145. 
 United States v. Vacuum Oil Co., 
 
 633, 843. 
 United States v. Wells, Fargo Exp. 
 
 Co., 659. 
 United States v. West Virginia 
 
 Northern Ry. Co., 938, 942. 
 United States, v. W. & N. R. R., 
 
 523, 544. 
 United States Button Co. v. C, 
 
 R. I. & P. Ry., 177. 
 United States Commission of Fish 
 
 & Fisheries, Re, 1039. 
 United States Leather Co. v. S. 
 
 Ry., 495, 1077, 1078, 1108. 
 
 Cases Cited 
 
 are to sections] 
 
 Utica Traffic Bureau v. N. Y. C. & 
 H. R. Ry., 773, 794. 
 
 VaUey Flour Mills v. A., T. & S. F. 
 
 Ry. Co., 768, 776, 784. 
 Van Natla Bros. v. C, C, C. & 
 
 St. L. Ry., 773. 
 Van Patten v. Chicago, M. & S. 
 
 P. Ry., 782, 829, 1051, 1135. 
 Veitch V. S. A. L. Ry., 847. 
 Vemis v. St. Louis, I. M. & S. Ry., 
 
 1105. 
 Vernier v. Urbana W. W. Co., 291. 
 Victor Fuel Co. v. A,, T. & S. F. 
 
 Ry., 831. 
 Victor Mf'g Co. v. S. Ry., 69, 231, 
 
 583,585,1117. 
 Virginia-Carolina Chemical Co. 
 
 V. A. C. L. R. R., 439, 705, 
 
 706. 
 Virginia-Carolina Chemical Co. v. 
 
 St. Louis, I. M. & So., 551. 
 Virginia-Carolina Chemical Co. v. 
 
 St. L. S. W. Ry. Co., 776. 
 Virginia C. & I. Co. v. Louisville 
 
 & N. R. R., 837. 
 Virginia & Georgia Ry. v. I. C. C, 
 
 800. 
 Volco Mf'g Co. V. A., T. & S. F. 
 
 Ry., 492. 
 Voorheds v. 0. C. L. Ry., 819, 825. 
 Vulcan Detinning Co. v. U. P. R. 
 
 R. Co., 436, 528. 
 Vulcan Iron Works Co. v. A., T. 
 
 & S. F. Ry., 509, 803, 1092. 
 
 W 
 
 Wabash, St. L. & P. Ry. Co. v. 
 Illinois, 149. 
 
 Waco Freight Bureau v. H. & T. 
 C. R. R., 181, 444. 
 
 Wade V. Lutcher & Moore Lum- 
 ber Co., 162, 191. 
 
 Wadell Show Case & Cabinet Co. 
 V. M. C. R. R. Co., 418, 519. 
 
 [ xciii ] 
 
Table or Cases Cited 
 
 [References 
 
 Wadley Southern Ry. v. Georgia, 
 
 1137. 
 Wagner v. City of Rock Island, 713. 
 Wagner, Zagelmeyer & Co. v. D. 
 
 &M..Co., 917. 
 Wakita Coal & S. Co. v. Atchison 
 
 & St. F. Ry., 1100. 
 Walker v. B. & 0. R. R. Co., 640. 
 Walker v. Keenan, 578. 
 Walker v. York & No. M. Ry., 53. 
 Wampum Cotton Mills v. Caro- 
 lina & N. W. Ry., 866. 
 Warner v. N. Y. C. & H. R. R. R., 
 
 497, 625. 
 Warren-Ehret Co. v. Central R. 
 
 R., 1008., 1092, 1097. 
 Warren Manufacturing Co. v. So. 
 
 Ry., 460, 1011. 
 Washburn-Crosby Co. v. Penn. 
 
 Ry., 776. 
 Washer Grain Co. v. Missouri 
 
 Pacific, 1040, 1057, 1058, 1060. 
 Washington MiUing Co. v. N. & W. 
 
 Ry., 764. 
 Washington So. Ry. v. Com., 962, 
 
 963. 
 Washington Store Door Delivery, 
 
 179. 
 Washington So. Ry. v. Com., 963. 
 Washington Suburban Rates, 441, 
 
 471. 
 Watson Co. v. Lake Shore & M. 
 
 S. Ry., 1103. 
 Waukesha Lime & Stone Co. v. 
 
 C, M. & St. P. Ry., 601, 808. 
 Waverly Oil Works v. P. R. R., 
 
 176, 382, 886, 896, 900, 929. 
 Waxelbaum v. A. C. L. R. R., 813, 
 
 916. 
 Weber C. & I. Fair Assur. N. P., 
 
 461. 
 Webster Grocery Co. v. C. & N. 
 
 W. Ry., 842, 872, 874, 1092, 
 
 1097. 
 Weems Stb. Co. v. People's Stb. 
 
 Co., 189. 
 Weighing of Freight by Carriers, 
 
 In re, 567, 849, 1047. 
 
 [ xciv ] 
 
 are to sections] 
 
 Weleetata Light & Water Co. v. 
 
 Ft. S. & W. R. R. Co., 631, 
 
 926, 1102. 
 Wellman v. Chicago & G. T. Ry., 
 
 227, 403, 587. 
 Wells V. Oregon Ry. & Nav. Co., 
 
 302. 
 Wells-Higman Co. v. G. R. & I. 
 
 Ry. Co., 126. 
 Wells-Higman Co. v. St. L., I. M. 
 
 & S. Ry., 125, 450. 
 Wentz-Bates Mercantile Co. v. 
 
 Union Pac. Ry., 1051. 
 Werner Saw Mill Co. v. Illinois 
 
 Central R. R., 1080, 1110. 
 West Bound Lake-and-Rail, Knit 
 
 Goods Commodity Rates, 
 
 783. 
 West End Improvement Club v. 
 
 0. & C. B. Ry. Bridge Co., 
 
 164, 174, 1088. 
 West Texas Fuel Co. v. Texas & 
 
 P. Ry., 1081. 
 West Va. R. Co. v. B. & O. R. R. 
 
 Co., 125, 464, 468, 776. 
 West Va. Transp. Co. v. Volcanic 
 
 O. & C. Co., 170. 
 Western Classification Case, 183, 
 
 208, 385, 483, 486, 499, 502, 
 
 503, 504, 514, 520, 529, 530, 
 
 539, 551, 562, 666, 627, 693, 
 
 794, 835, 849, 860, 851, 914, 
 
 915, 932. 
 Western Fruit Jobbers' Ass'n v. 
 
 C, R. I. & P. Ry., 521, 759, 
 
 851. 
 Western Mantle Co. v. S. P. & 
 
 S. Ry. Co., 847. 
 Western N. Y. & P. Ry. Co. v. 
 
 Penna. Ry., 933, 1158, 1161, 
 
 1163, 1164. 
 Western N. Y. & P. Ry. v. Pa. 
 
 Refining Co., 1137. 
 Western Oregon Lumber v. S. P. 
 
 Co., 444. 
 Western Traffic Ass'n v. B. & M. 
 
 R. R., 544. 
 Western U. T. Co. v. Call Pub. 
 
Table of Cases Cited 
 
 [References are to sections] 
 
 Co., 171, 420, 619, 680, 681, 
 
 715, 717, 718. 
 Western Union Telegraph Co. v. 
 
 Hamilton, 171. 
 Western U. T. Co. v. James, 149. 
 Western U. Tel. Co. v. Pendleton, 
 
 147. 
 Western Union Telegraph Co. v. 
 
 Simmons, 866. 
 Weyl Zuckerman & Co. v. C. M. 
 
 Ry., 868, 869. 
 Whaley-Warren Lumber Co. v. 
 
 C. C. & 0. Ry., 869. 
 Wharfage Charges at Galveston, In 
 • re, 115, 200, 739, 804. 
 Wharfage Charges at Texas City, 
 
 Re, 679. 
 Wharfage Facilities at Pensacola, 
 
 In re, 175, 632, 926. 
 Wharton Steel Co. v. D., L. & W. 
 
 R. R., 207, 396, 405, 584, 725. 
 Wheeler & Hotter Mercantile Co. 
 
 V. C, B. & Q. R. R., 851. 
 Wheeling Corrugating Co. v. B. & 
 
 0. R. R., 491, 551, 784. 
 Whitcomb v. C. & N. W. Ry., 529. 
 White V. Michigan Cent. R. R., 
 
 1001. 
 White & Co. V. B. & O. S. W. R. R., 
 
 12 I. C. C. 306, 565. 
 Whiteland Canning Co. v. P. C. C. 
 
 & St. L. Ry., 511. 
 Wholesale Fruit & Product Asso- 
 ciation V. A., T. & S. F. Ry. 
 
 Co., 179, 921, 939. 
 Wholesale Produce Dealers' Assur. 
 
 V. L. I. R. R., 632, 672. 
 Wichita v. Atchison, T. & S. F. R. 
 
 R., Mayor and City Council 
 
 of, 1097, 1111. 
 Wichita v. Mo. Pac. Ry., 776. 
 Wichita Board of Trade v. A., T. 
 
 & S. F. Ry., 215, 598, 763, 
 
 764, 776, 899. 
 Wichita Falls System Joint Coal 
 
 Rate Cases, 469, 776. 
 Wickwire Steel Co. v. N. Y. C. & 
 
 H. R. R. R., 761, 1051, 1136. 
 
 Wiemer & Rich v. C. N. W. Ry. 
 
 Co., 935. 
 Wiggins Ferry Co. v. East St. Louis 
 
 Union Ry., 164, 206. 
 Wight V. United States, 624, 672, 
 
 678. 
 Wilhoit V. Missouri P. R. Co., 1101. 
 Wilkes-Barre v. Spring Brook Wa- 
 ter Co., 256, 319, 332, 333, 
 
 362. 
 Willcox et al. v. Consolidated Gas 
 
 Co., 268, 277, 279, 317, 400, 
 
 440. 
 Williams v. Judge of Dist. Ct., 191. 
 Williams Co. v. U. S. & P. Ry., 763, 
 
 764. 
 Williams Co., v. Western U. T. Co., 
 
 149, 171. 
 Williamette Pulp & Paper Co. v. 
 
 N. P. Ry., 898, 1049. 
 Willson V. Rock Creek R. R., 122, 
 
 165, 657. 
 Wihnan & Co. v. St. L., I. M. & 
 
 S. Ry. Co., 125. 
 Wilmington Tariff Ass'n v. C. P. 
 
 & V. A. Ry., 769. 
 Wilmington Transp. Co. v. Rail- 
 road Commission, 125, 163. 
 Wilson Produce Co. v. Pennsyl- 
 vania Ry. Co., 150, 183, 575, 
 
 768. 
 Winona Carriage Co. v. Penn. Ry., 
 
 764. 
 Winsor Coal Co. v. C. & A. Ry., 
 
 761. 
 Winston-Salem v. Norfolk & W. 
 
 R. R., 445. 
 Winterbotham & Sons v. M. P. 
 
 Ry., 1092. 
 Winters Paint Co. v. Chicago, M. 
 
 & St. P., 926. 
 Winters MetalUc Paint Co. v. C, 
 
 M. & St. P. Ry., 384. 
 Wisconsin Central Ry. Co. v. 
 
 United States, 634, 819. 
 Wisconsin Lime & Cement Co. v. 
 
 C, C, C. & St. L. Ry., 832, 
 
 1058. 
 
 [ XCV ] 
 
Table of Cases Cited 
 
 [References 
 
 Wisconsin, M. & P. R. R. Co. v. 
 
 Jacobson; 882. 
 Wisconsin Pulp Wood Co. v. G. N. 
 
 Ry., 513. 
 Wisconsin R. R. Com. Rep., vol. V, 
 
 p. 13,294. 
 Wisconsin State Millers' Ass'n v. 
 
 C, M. & St. P. Ry., 793, 1117, 
 
 1123. 
 Wisconsin Steel Co. v. P. & L. E. 
 
 R. R., 396, 706. 
 Wolf Brothers v. Allegheny Val- 
 ley R. R., 507. 
 Wood V. Vandalia R. R., 342, 
 
 398, 1152. 
 Woodger v. Great Western R. Co., 
 
 565. 
 Wood, Iron & Steel Co. v. P. Ry., 
 
 768. 
 Wood-Mosaic Flooring & Lumber 
 
 Co. V. L. & N. R. R., 833, 
 
 1044, 1086. 
 Woodward-B. Co. v. S. P., L. A., 
 
 & S. L. Ry., 531. 
 Wool, Hides, and Pelts, In re, 532, 
 
 776. 
 Wool Transportation, Re, 585. 
 Worcester Excursion Car Co. v. 
 
 Pa. Ry., 167. 
 
 are to sections] 
 
 World's Fair, Re, R. W. & 0. Ry., 
 
 782. 
 Wright V. Howe, 146. 
 Wright V. U. 8., 179. 
 Wright & Co. V. V. R. R., 568. 
 Wright Wire Co. v. P. & L. E. Ry., 
 
 791, 793. 
 Wrigley v. Cleveland, C, C. & St. 
 
 L. Ry. et. al., 566, 687. 
 Wylie V. Northern Pac. R. R., 837. 
 
 Yawman & E. Mf'g Co. v. A., T. 
 & S. F. Ry., 498, 519, 565. . 
 
 Yazoo & M. V. R. R. Co. v. Blum 
 Co., 934. 
 
 Yeomans, Com., in Duluth Shin- 
 gle Co. V. Duluth, S. S. & A. 
 Ry., 487, 504. 
 
 Young, Ex parte, 1137. 
 
 Youngblood v. T. & P. Ry., 1099, 
 1110. 
 
 Youngstown S. & T. Co. v. P. & 
 L. E. Ry., 382. 
 
 Zellerbach Paper Co. v. Atchison, 
 T. & S. F. Ry., 1101. 
 
 XCVl 
 
RAILROAD RATE REGULATION 
 
BOOK I 
 
 JURISDICTION OF THE COMMISSION 
 
 CHAPTER I 
 
 HISTORICAL INTRODUCTION 
 S 1. Public callings and private business. 
 
 Topic A. The Early Policy of Regulation 
 § 2. The mediaeval theory of State control. 
 
 3. The regulation of business in the middle ages. 
 
 4. Early differentiation of the public service law. 
 
 5. The history of the carrier. 
 
 6. The position of the wharfinger. 
 
 7. Continuance of State regulation. 
 
 8. Pariiamentary regulation of rates. 
 
 9. Restriction of prices in the colonies. 
 
 10. Persistence of the legislative power. 
 
 11. Survival of the common law. 
 
 Topic B. Persistence of State Regulation 
 § 12. Introduction of improved highways. 
 
 13. The building of turnpikes. 
 
 14. The era of canal construction. 
 
 15. The coming of the railways. 
 
 16. Transportation facilities as a class. 
 
 17. Alteration in economic conditions. 
 
 18. Development in the common law. 
 
 19. Special restrictions in early charters. 
 
 20. The struggle against encroaching monopoly. 
 
 21. Conservative and radical views of regulation. 
 
 Topic C. State Control of Public Utilities 
 
 § 22. The pubUc services of the present day. 
 
 23. The effect of natural monopoly. 
 
 24. DiflSculty of distribution as a factor. 
 
 25. Scarcity of advantageous sites. 
 
 26. Limitation of available time. 
 
 27. The public services a necessity. 
 
 [3] 
 
§ 1 ] Railroad Rate Regulation 
 
 § 28. Economic limitations create public employment. 
 
 29. Cost of the plant. 
 
 30. Service on a large scale. 
 
 31. Legal privileges accompanying public emplojfment. 
 
 Topic D. Modern Regulation of Public Services 
 § 32. Necessary regulation of virtual monopoly. 
 
 33. Economic conditions at the present time. 
 
 34. Control of the public services. 
 
 35. Differentiation of the public service law. 
 
 36. Unity of the public service law. 
 
 37. The modem programme of State control. 
 
 38. Overshadowing importance of rate regulation. 
 
 39. Present state of the public service law. 
 
 40. Ultimate limitations upon public employment. 
 
 41. State control not socialism. 
 
 § 1. Public callings and private business. 
 
 The difference between public callings and private 
 business is a distinction in the law governing business 
 relations which has always had and will always have most 
 important consequences. Those in a public calling have 
 always been under the extraordinary duty to serve all 
 comers at reasonable rates, while those in a private busi- 
 ness may always refuse to act unless they are paid any 
 price they may choose to ask however exorbitant. So great 
 a distinction as this constitutes a difference in kind of 
 legal control rather than merely one of degree. The 
 causes of this division are, of course, rather economic than 
 strictly legal; and the relative importance of these two 
 classes at any given time, therefore, depends ultimately 
 upon the industrial conditions which prevail at that pe- 
 riod. Thus in the England which we see through the 
 medium of our earliest law reports, the mediaeval system 
 of established monopolies called for the legal requirement 
 of indiscriminate service from those engaged in almost all 
 employments. There followed in succeeding centuries an 
 expansion of trade which gradually did away with the 
 necessity for coercive law. Indeed, in the early part of the 
 nineteenth century, free competition became the very basis 
 of the social organization, with the consequence that the 
 [4] 
 
Historical Introduction [ §§ 2, 3 
 
 recognition of the public callings as a class almost ceased. 
 It is only in very recent years that it has again come to 
 be recognized that the process of free competition fails 
 in some cases to secure the public good; and it has been 
 reluctantly admitted that State control is again necessary 
 over such lines of industry as are affected with a public 
 interest. 
 
 Topic A. The Early Policy of Regulation 
 
 § 2. The mediaeval theory of State control. 
 
 The mediaeval system involved almost universal reg- 
 ulation of all the doings of men, and therefore its com- 
 mercial poUcy was almost completely restrictive. The 
 ideal held was a society in which all things were ordered, 
 the full conception being that every man had a right to 
 his place in this established order. This state of affairs 
 was by most men greatly desired. Indeed, a regulated 
 monopoly with the corresponding obligation of public 
 service seemed in that age to the great majority of people 
 far better than an unregulated competition without pub- 
 lic obligation. It was thought that things were put in a 
 true balance by requiring each person to perform his part 
 and allowing no person to interfere with the employment 
 of another. And all of this control of industrial affairs 
 was felt to be ultimately for the benefit of the whole pub- 
 Uc who could obtain thereby without favor at reasonable 
 prices proper service in accordance with their require- 
 ments. In this industrial regulation it has been well said 
 that the mediaeval system was a consumer's policy by 
 reason of its limitation of prices, far more than it was a 
 producer's poUcy by virtue of its monopoly of service. 
 
 § 3. The regulation of business in the middle ages. 
 
 In mediaeval England this thorough system of State 
 control reached a high state of development. Most of 
 the trades in the towns were parceled out to the gilds. 
 Under this system the services to be rendered to the 
 
 [5] 
 
§ 4 ] Raileoad Rate Regulation 
 
 public in the trades were governed by gild codes. These 
 by-laws were continually declared void by the local courts 
 if they were really inconsistent with public service. In 
 the country at the same time there were to be met similar 
 privileges in carrying on business in connection with the 
 manorial system. Some business required the investment 
 of more or less capital in constructing a plant, as the 
 bakehouse and the mill. It may have been necessary at 
 the outset that these should be provided by the lord of 
 the manor; at all events in later times the seignorial ban 
 covered these, the lord granting franchises to certain per- 
 sons. Here again those who conducted these businesses 
 were bound to serve all fairly or answer for it to the courts 
 of the manor. But, upon the whole, the ordinary trades 
 and crafts were more freely open to anyone in the country 
 than in the towns with their craft gilds and merchant 
 gilds. This may explain why the cases requiring pubUc 
 service of carriers and inn-keepers, ferrymen and farriers, 
 appear so early in the royal courts; for there were no local 
 courts with clear jurisdiction over the lines of travel across 
 the country. 
 
 § 4. Early differentiation of the public service law. 
 
 Thus there is to be found from the earliest times a pe- 
 culiar law governing the conduct of those engaged in a 
 public employment. The characteristic thing then as now 
 was the legal imposition of an affirmative duty of proper 
 actions upon those who openly professed a public employ- 
 ment, while those who carried on private business were 
 under practically no duties which were not pure negative 
 in character. This general distinction between the legal 
 obligations of those in pubUc calling and in private busi- 
 ness was often of the utmost importance in our early 
 common law. Indeed, whether the defendant was in 
 common employment or not, made more difference in the 
 success of a plaintiff's action or its failure than it does 
 to-day. In those days contract law was so undeveloped 
 [6] 
 
Historical Introduction [ § 5 
 
 that in an ordinary business one could not be held to his 
 bargaias, yet at that time in a pubhc calling such as 
 innkeeptng one was held to the pubUc undertaking he 
 made to serve all that might apply. So, too, while the 
 law of tort as yet gave no remedy against one for negli- 
 gent injury to property voluntarily intrusted to him in the 
 course of ordinary business, in a public employment such as 
 that of the blacksmith one was answerable for failing to use 
 proper skill in the calling he had assumed. However 
 obsolete this substantive law may be as to private business, 
 the subsequent developments in the law in no manner 
 affect the force of these decisions in estabhshing the 
 fundamental difference in legal situation between those 
 engaged in public employment and those in private busi- 
 ness. The law which suffices for ordinary businesses has 
 never been enough for the protection of the pubhc in 
 their dealings with these extraordinary services. Special 
 law has always been necessary for the regulation of prices 
 in public employments; and these principles of our com- 
 mon law are for all time. 
 
 § 5. The history of the carrier. 
 
 From the earhest times it has been agreed that the 
 common carrier of goods is in a public employment. A 
 statement of the early law is to be found in one of the 
 leading cases on carriers, Jackson v. Rogers.^ "This was 
 an action on the case for that whereas defendant is a 
 common carrier from London to Lymmington et abinde 
 retrorsum, setting forth as the custom of England, that he 
 is bound to carry goods, and that the plaintiff brought 
 him such a pack, he refused to carry them, though offered 
 his hire. And held by Jeffries, C. J., that the action is 
 maintainable, as well as it is against an innkeeper for 
 refusing a guest, or a smith on the road who refuses to 
 shoe my horse, being tendered satisfaction for the same. 
 
 • 2 Show. 327 (1683). The whole report of this case is included in the quota- 
 tion which follows. 
 
 [7] 
 
§ 6 ] ' ' Railroad Rate Regulation 
 
 Note, that it was alleged and proved that he had co^ven- 
 ience to carry the same; and the plaintiff had a verdict." 
 In Plantagenet England the population lived apart in 
 separate communities. Small attention was paid to the 
 roads connecting them which were no more than trails 
 winding through the wilderness. No cart could pass over 
 them, only pack animals with the goods in their panniers. 
 So many were the bands of outlaws in the greenwood 
 that no man might with safety traverse these paths alone. 
 The transportation of goods was, therefore, given over to 
 the carrier, who traveled oftentimes with trains of pack 
 animals, and a considerable company. Few would pass 
 over the same roads between the same towns, because 
 the traffic was still comparatively small, as England had 
 as yet but Httle beyond a local economy where each com- 
 munity was sufficient to itself, into a national economy 
 which involved interchanges of goods between distant 
 markets. The conditions surrounding transportation, 
 therefore, were those of virtual monopoly. The merchant 
 must appeal to the protection of the law, a protection 
 without which he was at the mercy of the carrier with 
 whom circumstances forced him to deal without a chance 
 for choice. 
 
 § 6. The position of the wharfinger. 
 
 In a commercial port those who own the convenient 
 sites for wharfage upon deep water possess a pecuUar 
 advantage. It was of such wharfinger that Lord Hale in 
 his De Portibus Maris ^ wrote the most famous paragraph 
 in the whole law relating to pubhc service. It is there 
 that he says that whenever the king or a subject have a 
 pubhc wharf to which all persons must come who come to 
 that port to unload their goods — "in that case there cannot 
 be taken arbitrary and excessive duties for cranage, 
 wharfage, etc., but the duties must be reasonable and 
 moderate, for now the wharf and crane and other con- 
 
 * Hargrave Law Tracts, 78. 
 
 [8] 
 
Historical Introduction [ §§ 7, 8 
 
 veniences are affected with a public interest and they 
 cease to be juris private only." No more significant 
 phrases were ever penned. 
 
 § 7. Continuance of State regulation. 
 
 The irresistible advances of the modem competitive 
 system gradually worked the destruction of the mediaeval 
 organization of industry. Great, however, as was this 
 change from the old economic theory to the new, it was 
 gradual, and it was never complete. There was a swing 
 of the pendulum. General but not absolute restriction 
 of freedom of trade was the poUcy of the middle ages; 
 general freedom of trade, with the restriction of certain 
 exceptional occupations, has become the policy of mod- 
 em times. A state of free competition has been for several 
 centuries now considered to be for the best interests of 
 society; and, therefore, in modem times almost every 
 business has been opened to almost every man. And yet 
 at all times in economic history, both restriction and free- 
 dom are to be found in the law. The proportion, however, 
 changes greatly. In one epoch there is much legal limita- 
 tion, with little freedom left; in another age there is almost 
 universal competition, with some little franchise to be found. 
 And the rule will generally hold true that the more the nat- 
 ural laws of competition regulate service and price, the less 
 the State need interfere in these respects; but conversely 
 when competition ceases to act efficiently State control be- 
 comes necessary. 
 
 § 8. Parliamentary regulation of rates. 
 
 During this transitional period when the mediaeval 
 system of customary laws ceased to operate effectively. 
 Parliament itself frequently regulated the prices of neces- 
 saries of life by direct legislation. The great staples, 
 like wool and food, were habitually regulated in this way, 
 and the employment and the price of labor was a subject 
 of statutory provision. Thus, in 1266, Henry III, after 
 
 [9] 
 
§§ 9, 10 ] Railboad Rate Regulation 
 
 reciting former statutes to the same effect, regulated the 
 price of bread and ale according to the price of wheat 
 and barley, and forbade forestalling; that is, cornering the 
 market. In 1337 it was made felony to export wool, 
 and the importation of cloth was forbidden. In 1349 
 all laborers were obliged to serve for the customary wages, 
 and "butchers, fishmongers, regrators, hostelors (i. e., inn- 
 keepers), brewers, bakers, poulterers, and all other sellers 
 of all manner of victuals," were bound to sell for a rea- 
 sonable price. These statutes continued in force through- 
 out the middle ages, and until after the settlement of 
 America. 
 
 § 9. Restriction of prices in the colonies. 
 
 This legislative power the colonists brought to America 
 with them. In a new colony life is a serious thing, the 
 necessaries of life are scarce, and the needs of the public 
 are pressing. The conditions are ideal for a distressing 
 cornering of the market by merchants. Accordingly, 
 though most of the statutory regulations of trades and 
 prices had either been repealed or had become obsolete 
 in the mother country, the colonies at an early time 
 passed statutes regulating the prices of staple commodi- 
 ties. Thus in Massachusetts in 1635 shopkeepers and 
 merchants were forbidden to charge excessive prices. 
 In Plymouth colony the price of boards was fixed in 1668. 
 Corn and tobacco, beer and bread, beef and boards, all 
 that was most important for the colonists to have was 
 regulated as a matter of course by the assembhes of the 
 time. 
 
 § 10. Persistence of the legislative power. 
 
 This extreme form of the police power over public 
 employment remained in the legislative branch notwith- 
 standing the general guaranties of individual liberty con- 
 tained in the American constitutions. To compel the 
 proprietors of those businesses which had been regarded 
 [10] 
 
Historical Introduction t§ H 
 
 as peculiarly affected with a public interest to serve all 
 that applied at reasonable rates was immemorial practice, 
 and therefore was indisputably due process of law. This 
 historical argument was given chief place by the Supreme 
 Court of the United States in the leading case ' on this 
 branch of the police power. "Under these powers," said 
 the CQurt, "the government regulates the conduct of its 
 citizens one towards another, and the manner in which 
 each shall use his own property, when such regulation 
 becomes necessary for the pubhc good. In their exercise 
 it has been customary in England from time immemorial, 
 and in this country from its first colonization, to regulate 
 ferries, common carriers, hackmen, bakers, millers, wharf- 
 ingers, innkeepers, etc., and in so doing to fix a maximum 
 of charge to be made for services rendered, accommodations 
 furnished, and articles sold. To this day, statutes are to 
 be found in many of the States upon some or all these 
 subjects; and we think it has never yet been successfully 
 contended that such legislation came within any of the 
 constitutional prohibitions against interference with pri- 
 vate property." 
 
 § 11. Survival of the common law. 
 
 From one point of view the constitutional validity of 
 legislative control is conclusive evidence of the persist- 
 ence of the common-law principles regulating pubHc em- 
 ployments. The common law persists from age to age, 
 and though the instance of its rules may be seen to change 
 as old conditions pass away and new conditions arise, 
 its fundamental principles remain. The early cases which 
 were just under discussion are illustrations of this course 
 of events. Barber, surgeon, smith and tailor are no 
 longer in common calling because the situation in the 
 modem times does not require it; but innkeeper, carrier, 
 ferryman and wharfinger are still in that classification, 
 since even in modern business the conditions require them 
 ' Munn V. Illinois, 94 U. S. 113, 24 L. ed. 77. 
 
 [11] 
 
§ 12 ] Railroad Rate Regulation 
 
 to be so treated. With changed economic conditions in 
 modern times new callings have come into being with 
 such potentiahties that this special law has been utiUzed 
 as never before in regulating them. Indeed, from the 
 point of view of one who believes in om" common law the 
 (ilass of public callings is capable of indefinite extension 
 whenever new conditions bring new emplojrments within 
 its scope." And in all times our law has held to the prin- 
 ciple that this peculiar regulation was necessary in certain 
 kinds of business. It depends largely upon the opinion 
 current at the time how far this law shall be extended. 
 But, however much public opinion may change, this possi- 
 bility of the enforcement of the obligation to the public 
 owed by those who conduct a business public in char- 
 acter, remains. 
 
 To'pic B. Persistence of State Regulation 
 
 § 12. Introduction of improved highways. 
 
 What was destined to give the greatest scope to the 
 public service law was the improved facilities for trans- 
 portation. It was late in the eighteenth century that 
 the need for transportation of persons and goods more 
 quickly and more cheaply between distant communities 
 began to outgrow the facilities for commerce then at the 
 disposal of the pubhc. The solution of this question 
 thenceforth became one of the most pressing economic 
 problems of the time, engaging the attention of states- 
 men, as every great commercial problem must. The 
 scheme gradually worked out was a system of improved 
 turnpikes all over the country supplemented by toll 
 bridges, and between the most important markets the con- 
 struction of canals and the development of existing water 
 ways. The theory of the statesmen of the early nineteenth 
 century, who dealt with the conditions under which these 
 
 * The historical argument is ef- than in People v. Budd, 117 N. Y. 1, 
 fectively used in many cases, but in 22 N. E. 670, 5 L. R. A. 549, 15 
 no one is it more elaborately put Am. St. Rep. 460 (1889). 
 
 [12] 
 
Historical Introduction [ § 13 
 
 works of internal improvement should be constructed, 
 was that private enterprises were better than State owner- 
 ship. However, they were willing to meet the need of the 
 time for immediate construction of these expensive works 
 by grants from the State treasury or by guaranty of the 
 bonds of the private companies. These improved high- 
 ways were considered like other highways, public in 
 character and open to all, though maintained by private 
 companies which were given the franchise to charge tolls, 
 without which none could be demanded. 
 
 § 13. The building of turnpikes. 
 
 On important lines of travel even over considerable 
 spans, bridges began to replace the ferries. As the ferries 
 had been maintained by private parties with an exclusive 
 franchise, charging ferriage, the bridges were built by 
 private companies with an exclusive franchise such as the 
 ferryman had, charging tolls as the ferryman did. For 
 the charging of tolls it is to be remarked a rough classifi- 
 cation was made, and on that point there is some public 
 service law from this period. One interesting scheme was 
 the chartering of bridge companies with the provision that 
 when the cost of the bridge, together with a certain per 
 cent of profit should have been repaid to the proprietors, 
 the bridge should become free. Throughout the country, 
 turnpikes were constructed of various kinds, gravel roads 
 and plank roads, for example. These were built by private 
 companies with a protecting franchise, charging tolls 
 roughly classified. Some little public service law dates from 
 this period; for such improved highways were regarded as 
 public in character by whomsoever owned. As one court ^ 
 put this principle in those earlier days: "Though the owner- 
 ship is private, the use is public. So turnpikes, bridges, 
 ferries and canals, although made by individuals imder pub- 
 Uc grants, or by companies, are regarded as publici juris." 
 
 'The quotation is from Olcott v. Supervisors, 16 Wall. 678, 21 L. ed. 
 382 (1872). 
 
 [13] 
 
§§ 14, 15 ] Railroad Rate Regulation 
 
 § 14. The era of canal construction. 
 
 In England the canal period was of considerable dura- 
 tion. Construction was begun soon after the middle of 
 the eighteenth century and did not noticeably cease until 
 about the middle of the nineteenth century. From the 
 first the canals carried a very large traffic upon which 
 they imposed regular tolls upon a classified basis. In 
 the United States also many canals were constructed, 
 largely aided by the State governments. At one time it 
 seemed to the most enthusiastic believers in the canal 
 system that it was the ultimate solution of the transporta- 
 tion problem. It was recognized in all cases that all 
 boatmen had the right to pass through these canals upon 
 paying to their proprietors the estabUshed tolls. Much 
 public service law dates from this time. The cases upon 
 the proper priorities to be observed in the management 
 of a public business are particularly interestiag. 
 
 § 15. The coming of the railways. 
 
 It is a matter of history that where the first railways 
 were laid down at the beginning of the nineteenth century 
 the theory upon which they were constructed was that 
 they would be public highways, for the use of which those 
 that drove their vehicles over them should pay toll as for 
 the use of a turnpike or a canal. The introduction of the 
 steam locomotive brought about the end of that' theory 
 almost before it was put into practice. A train drawn by 
 a locomotive was too expensive, the operation was too 
 costly, and its management too intricate for any shipper, 
 or even for any private carrier. Ahnost from the outset, 
 therefore, the railway company provided and operated the 
 engines and cars themselves, and accepted for trans- 
 portation such goods as were offered. When the right of 
 eminent domain was first given to the early railroads its 
 constitutionality was doubted, as the railroads had now 
 become carriers. All such doubts were set at rest by the 
 masterly opinion of Chief Justice Ruffin in Raleigh & 
 [14] 
 
Historical Introduction [ §§ 16, 17 
 
 Gaston Railroad v. Davis,^ in the course of which he 
 showed his appreciation of the benefits accruing from the 
 undertaking of pubUc services by private concerns. 
 
 § 16. Transportation facilities as a class. 
 
 In the first part of the nineteenth century, therefore, the 
 generaUzation was being made (and not without a certain 
 justification from the facts) that all of the public employ- 
 ments were connected in one way or another with trans- 
 portation. Indeed, this generalization became so accepted 
 that when later in the century new conditions pressed for 
 further appUcation of the law requiring the service to the 
 public, the attempt was made in the first common-law 
 decisions dealing with these businesses to include other 
 services quite different in character within this generaliza- 
 tion. Thus telegraph companies and even telephone com- 
 panies were said to be common carriers, and sleeping cars 
 and steamboats were by some thought to be inns. But 
 those judges who looked at these new callings in this light 
 saw through a glass darkly. It was given to others to see 
 the vision of a great class of public callings of which 
 those connected with transportation constituted but one 
 branch, although the principal one. 
 
 § 17. Alteration in economic conditions. 
 
 In the early part of the nineteenth century a combina- 
 tion of economic factors brought about in the business 
 world as near an approach to a condition of freedom in 
 competition as can ever happen in a world limited by 
 time and space. Naturally enough with such individual 
 freedom of action laissez faire became the accepted policy 
 for dealing with the business world as the occasions for 
 the application of the principles of law regulating pub- 
 lic callings become fewer. This condition of affairs pre- 
 vailed to a remarkable extent in the United States during 
 the first half of -the nineteenth century. The English 
 
 ' 2 Dev. & Bat. 451. 
 
 [15] 
 
§§ 18, 19 ] Railkoad Rate Regulation 
 
 system of excessive legislative regulation by Parliament 
 having become distasteful, the constitutions of the original 
 States and of the United States carefully limited the 
 power of legislatures to interfere with the ordinary affairs 
 of busiuess. Regulation of private affairs by the law may 
 be said to have been at a minimum in the first half of the 
 nineteenth century. And in this time of small enterprises 
 it was safe to leave the individual proprietor free to deal 
 with his customers as he pleased. 
 
 § 18. Development in the common law. 
 
 It is almost a truism that the spirit of the age molds 
 its law. Those who frame the laws are members of the 
 community and share its spirit. The age's ideal of right 
 is their ideal, the method of thought about justice which 
 is prevalent at the time is their method of thought, too; 
 and it therefore follows that in working out legal prob- 
 lems, both bench and bar work along the hues prescribed 
 by the spirit of the age in which they Uve. Nowhere is 
 the influence of the spirit of the time on the common law 
 more evident and more potent than in this question of 
 the regulation of common callings. Following the change 
 in economic thought which has been described, the judges 
 of the last century began to say as to his business activities 
 that it lay with the tradesman to conduct his business 
 as he pleased, at his own prices. This was a period when 
 all men were much attracted by the theory of laissez 
 faire — that the most desirable thing was the least possible 
 interference with business relations by the State. That the 
 coercive law of pubhc calling survived this period is proof 
 positive of its absolute necessity to a greater or lesser 
 extent in every society. 
 
 § 19. Special restrictions in early charters. 
 
 One method of regulation of enterprises public ia char- 
 acter during this period has not been mentioned as yet. 
 These were great undertakings which were projected — 
 [16] 
 
Historical Introduction [ § 20 
 
 bridges and turnpikes, canals and railways. To carry 
 them out required aggregated capital; to maintain them 
 required permanent organization. There was a form of 
 organization as yet confined to purposes in some degree 
 governmental, which was best designed to bring together 
 the necessary capital and give the necessary permanence — 
 the corporation. And although it was not as yet con- 
 sidered proper to give this franchise of being a corpora- 
 tion to men engaged in purely private business, it was 
 thought most appropriate for the State to create a cor- 
 poration for such purposes. Moreover in granting the 
 franchises the State could impose upon the grantee such 
 terms as it might think necessary for the protection of 
 the public in its dealings with the corporation. And so 
 the charters of this period are often elaborate in their 
 provisions, imposing upon the corporation the duty to 
 serve all that apply properly and without exceeding a cer- 
 tain fixed profit. Thus the beginning of statutory regula- 
 tion of the American railways is coeval with the railways 
 themselves. The first railway charters contained regulations 
 as to the doing of the business, which have been of consid- 
 erable importance in the history of statutory regulation. 
 One of the earliest such charters was that of the Baltimore & 
 Ohio Railway in 1827. This charter, among other provisions, 
 limited the amount of tolls to be charged for freight and 
 also expressly reserved to any future company the right to 
 connect with the road. The charter of the Worcester 
 Railroad in 1829 limited the toll to six cents a ton per mile. 
 Other charters limited the earnings of the railroad to a 
 certain percentage each year to amounts varying from ten 
 to twenty-five per cent per annum. 
 
 § 20. The struggle against encroaching monopoly. 
 
 As the prevalence of competitive conditions in busi- 
 ness limits the application of the principles of public 
 service law, so the prevalence of monopolistic conditions 
 extends their appUcation. Such a change came about in 
 2 [17] 
 
§ 21 ] Railkoad Rate Regulation 
 
 the latter part of the nineteenth century. About a gen- 
 eration ago a change in commercial practice showed with 
 remarkable distinctness the advantage of combination. 
 Great enterprises took the place of small ones, and great 
 enterprises required co-operation and combination. As 
 the people became accustomed to look upon combination 
 as the price of success, they came more and more to re- 
 gard it as a blessing rather than an evil; and pubUc opin- 
 ion has gradually turned away from the individualistic 
 ideal until to-day it has been fairly discarded by the cur- 
 rent philosophy. With the principle of combination as 
 the spring of action has come a corresponding need of 
 controlling the action of such combinations for the good 
 of the whole pubhc. As the rights of the individual 
 trader sdeld to the rights of the great corporation, so in 
 the view of the man of the present day, the rights of the 
 corporation, should in their turn yield to the rights of 
 the whole people. The same spirit which fosters combi- 
 nation, fosters also control of the combination for the 
 public benefit. The spirit of the present age, therefore, 
 has come to be a spirit which demands that great busi- 
 ness enterprises should be conducted in accordance with 
 the requirements of society.' The programme of organized 
 society is practically to see to it that those who have 
 gained a substantial control of their market shall not be 
 left free to exploit those who look to them to supply their 
 needs. Men now see clearly that freedom of action in 
 the industrial world may work injuriously for the pub- 
 lic, and it must then be restrained in the public interest. 
 Having seen the results of unrestrained power we no 
 longer wish those who have control of our destinies to 
 be left free to do with us as they please. Such liberty 
 for them would mean enslavement for us. 
 
 § 21. Conservative and radical views of regulation. 
 
 While it is generally agreed that a change has come over 
 the spirit of our time, that State regulation is the prevail- 
 
 [18] 
 
Historical Introduction [ § 22 
 
 ing philosophy of the people at the begiimiiig of the 
 twentieth century; it must be borne in mind that this has 
 been the result of a gradual progress of thought, and that 
 this progress has not affected all men or all lawyers 
 equally. Now, as at all times, there are conservative 
 lawyers and radical lawyers, the former as far behind the 
 prevailing spirit of the time as the latter go beyond it. 
 In every change of popular thought there have been 
 laggards, and in every such change there have been those 
 who are unable justly to estimate the true meaning of the 
 change, and work beyond it into eccentricities in which 
 the people will never follow them. We have, therefore, 
 three general types of thought at every time: the con- 
 servatives, the moderates and the radicals. And this is 
 as true of legal as of economic thought. Many lawyers 
 still hold conservative views as to the apphcation of the 
 law of pubUc callings to modern conditions. They be- 
 lieve that the conductors of every business, however 
 necessary to public welfare, should do whatever seems 
 good in their own eyes. And some economists still teU 
 us that the only way to get efficient service for the pubhc 
 is to allow the public service companies the right of ex- 
 acting such rewards as they are able to get. But in spite 
 of these now obsolescent views there can be no question that 
 the tendency to-day is to restrain in the interests of society 
 all business which has obtained undue power. Individual 
 freedom is limited by the modern notion of social justice. 
 
 Topic C. State Control of Public Utilities 
 
 § 22. The public services of the present day. 
 
 Whatever way we turn to-day we depend upon a service 
 that is public in character. Not only in long travels but 
 in short journeys we employ common carriers — railroads 
 and steamships, coaches and cabs, street cars and omni- 
 buses, the subway car and the elevated train. If we ship 
 goods there are various transportation services at our 
 disposal — railroads and ships, express companies and dis- 
 
 [19] 
 
§ 23 ] Railroad Rate Regulation 
 
 patch lines, refrigerator lines and tank cars. If we are 
 journeying we eat at hotel restaurants, and put up at 
 pubhc inns, or travel in palace cars and lodge ourselves in 
 sleeping cars. Our freight in its transit has its needs at- 
 tended to: for our goods, warehouses, for our grain, eleva- 
 tors, for our cattle, stockyards, and for our exports, docks. 
 In almost every conununity, even relatively small, we have 
 for our household needs gas, electricity, water supply 
 and sewerage service provided for us, usually, except the 
 last two, by private companies in pubhc service, and 
 always to the law governing pubhc service, even when 
 provided by the municipality itself. For speedy com- 
 munication in our business and pleasure, we have the 
 telephone and telegraph in common use, and ticker service 
 and messenger call for special needs. One may judge by 
 this incomplete list how common to every part of our 
 modern life are the various public services, and how neces- 
 sary it is that they should be required by law to serve 
 us all with adequate facilities for reasonable compensation 
 and without discrimination. 
 
 § 23. The effect of natural monopoly. 
 
 The case for public service is plainest in those few 
 utilities where there are natural limitations upon the 
 sources of supply which are essential to the business. 
 This situation in itself gives some degree of monopoly to 
 those who control the sources of supply most accessible to 
 their market, in preventing effective competition with the 
 local service already established. Thus those who control 
 the most advantageous watershed have a natural monopoly 
 of the supply of water in a given district; and so by estab- 
 hshed law the waterworks established to distribute water 
 to a community must supply aU that apply to the extent 
 of their undertaking. So too an irrigation system by 
 which a stream is impounded and its water is distributed 
 over lands within its flow has a pubhc character. Sites 
 where water power may be developed to greatest advan- 
 [20] 
 
Historical Introduction [ § 24 
 
 tage are necessarily limited; and, if the enterprize con- 
 templates the sale of water power at the canal to various 
 users, it would seem that there should be no discrimination 
 therein. For like reasons those who have pre-empted the 
 natural gas fields must deal without discrimination with 
 the public which they have assumed to serve therefrom. 
 All members of the public within the range of the opera- 
 tions of these systems may demand that the law put them 
 upon an equality with their neighbors in obtaining these 
 services so necessary to their welfare. For were not the 
 law ready to act in their behalf there would be the gravest 
 danger of intolerable injustice. 
 
 § 24. Difficulty of distribution as a factor. 
 
 Another natural limitation upon competition results 
 from the character of the product. If the physical char- 
 acteristics of the product are such that it can only have a 
 local distribution the barrier against outside competition 
 may fairly be said to be natural. What after all is that 
 element in the situation which makes the sale of gas a 
 public employment, while the vending of candles is a 
 private business? Is it not that the box of candles may 
 be sent from any factory to compete in any market, while 
 a thousand cubic feet of gas can only be got in any par- 
 ticular community from the pipes of the local company? 
 Much the same argument could be made in differentiating 
 the supply of electricity from the sale of energy in the 
 shape of coal; and indeed electric lighting was held to be a 
 public service from the moment of its first installation 
 upon a pubhc basis. Electricity must be distributed over 
 a wiring system as it is made; it cannot be transported 
 independently and stored indefinitely. The purpose for 
 which the supply is used would seem to be immaterial 
 so long as thereby a public need is satisfied. Neverthe- 
 less there have been some doubts raised about the public 
 status of an electric company supplying power exclusively. 
 To give a modem example of a pubhc employment made 
 
 [21] 
 
§§ 25, 26 ] Railroad Rate Regulation 
 
 such by the special character of the product supplied and 
 the peculiar necessities of the local public, one might 
 instance the ice-plants in the cities. It may be predicted 
 with confidence that the ice-plants will henceforth be 
 found upon the Ust of those businesses so important to the 
 public that they can no longer be left to the private hands 
 without pubhc control. 
 
 § 26. Scarcity of advantageous sites. 
 
 The sites upon which certain services can be conducted 
 to best advantage are few in number. In Munn v. Illinois 
 (perhaps the leading case upon pubhc employment) the 
 Supreme Court spoke of the grain elevators as taking toll 
 at the gateways of commerce. Likewise the owners of the 
 established docks obviously command the situation; and 
 this is the explanation of the fact that wharfingers are 
 held to serve the public. The necessity of these locations 
 to proper conduct of the business may be so great that 
 those who are possessed of these sites may well be said to 
 enjoy a natural monopoly; since if others venture to 
 establish themselves at all at such disadvantage, their 
 competition will be comparatively ineffectual. At all 
 events, those in the favorable locations could exact higher 
 prices than would be fair, were it not for the fact that the 
 law intervened. Terminal facilities, such as union stations 
 furnish the most striking examples of this importance of 
 particular sites; and there are cases compelling them to 
 take in all railroads desiring entrance. To a lesser extent 
 this is true of those services which although not dependent 
 upon an exact location are operated with pecuhar advan- 
 tage in particular areas, such as stockyards, which by 
 recent decisions have been held subject to public control of 
 their business conduct. 
 
 § 26. Limitation of available time. 
 
 Another obvious restriction upon effective competition 
 results from limitation of time. When the need of the ap- 
 [2§S] 
 
HiSTOEicAL Introduction [ § 27 
 
 plicant is immediate, the person from whom he asks 
 service has an unfair advantage. It is this instant need 
 which gives to those agencies established for the rapid 
 transmission of inteUigence that virtual monopoly which 
 the earlier telegraph and the later telephone have always 
 had. The very nature of their business is such that one 
 must deal with the established plant upon whatever terms 
 its owners are allowed to make. This is equally true of 
 news-gathering agencies such as the press bureau, and 
 the stock tickers. There are those who must have this 
 service in their business or they cannot get on at all in 
 competition with their rivals. Thus the law must step in 
 and see to it that only reasonable rates are imposed. In 
 these businesses public regulation of the service furnished 
 is peculiarly necessary, or else public needs will not be 
 met. There are other ways of sending communications by 
 mail or by messenger, but since time is of the essence here 
 they are not effective substitutes. It is not accidental that 
 the telephone cases and the associated press cases furnish 
 the best discussion of the fundamental basis of the special 
 law of public employment. Obviously this coercive law is 
 imperatively required to meet the monopolistic conditions 
 surrounding these pecuUar services. 
 
 § 27. The public services a necessity. 
 
 The test here suggested is that whether a business is 
 public or not depends upon the situation of the public 
 with respect to it. Wherever there is in private hands 
 substantial control of a public necessity, it may well be 
 said that the public has now an interest in the conduct 
 of these businesses by their owners. Since these agencies 
 are carried on in a manner to make them of public con- 
 sequence, they have become affected with a public interest. 
 Therefore, as the old books say, having devoted their 
 property to a use in which the public has an interest, 
 they in effect have granted to the public an interest in 
 that use, and must submit to be controlled by the public 
 
 [23] 
 
§ 28 ] Railroad Rate Regulation 
 
 for the common good to the extent of the interest they 
 have created. It is only a few years since we have had 
 any detailed law for the regulation of pubhc services. 
 If they did not refuse to render their usual service, and 
 did not charge extortionate prices, little fault was to be 
 found with them in the last generation. Now we are 
 demanding of them the utmost service which they are 
 capable of rendering, upon the terms of full equality for 
 the whole public. If they do not increase their facilities 
 to meet the needs of their growing business, and if they 
 give one customer in any way the least advantage over 
 another, we sternly call their owners to account. 
 
 § 28. Economic limitations create public employment. 
 
 The conditions which may produce virtual monopoly, 
 such as natural sources of supply, restricted opportunities 
 of access, limited time at disposal and difficulties in dis- 
 tribution have just been discussed. ■ But of almost equal 
 importance are other factors producing true economic 
 monopoly by deterring effectual competition, such as the 
 cost of the plant, the large scale upon which the business 
 is done, the absence of effectual substitutes and the de- 
 pendent position of the particular service. These ele- 
 ments in the general situation have doubtless already 
 been taken into account unconsciously; but they are of 
 such importance as to deserve mention. These economic 
 forces of various sorts may either singly or in combination 
 with others, naturally result in a given business in a monop- 
 oly of a sort which bids fair to be permanently character- 
 istic of that employment. In these businesses the larger 
 the scale upon which the business is done the lower the 
 cost of performing the service. In such businesses there 
 must be such great sums expended in construction of the 
 plant that none would venture to sink an equal sum in a 
 competing service at the risk of total loss in case of failure. 
 The common fact therefore in all instances of pubhc 
 employment is virtual monopoly so established in the 
 [24] 
 
Historical Introduction [ §§ 29, 30 
 
 nature of things that society must reckon with it. And it 
 matters not by what conditions this situation is estabUshed 
 so that it has the elements of permanence. 
 
 § 29. Cost of the plant. 
 
 The usual characteristic of a pubUc service is the 
 relatively large cost of the plant. In very many instances 
 this runs high into millions which must be invested before 
 the service can be begun. This necessity of getting to- 
 gether so much capital limits fundamentally the amount 
 of such construction. Canals and railroads furnish the 
 chief examples of this. It would take perhaps twenty 
 billion dollars to duplicate our present facilities for trans- 
 portation; and it is, therefore, practically inconceivable 
 that it will be done. Moreover, in most monopolies 
 there is still another reason why capital is kept from in- 
 vestment in a competing service. The capital invested 
 must be sunk at the risk of failure in this one market. 
 The investment made in such services cannot be with- 
 drawn. PubUc privileges may be given to a business 
 public in character; and by the same token public reg- 
 ulation of such businesses as are affected with a public 
 interest is justifiable. But what those businesses are de- 
 pends upon what the experience of our time is and what 
 our insight into the situation with which we are confronted 
 teaches us. Thus to the enormous cost as a deterrent to 
 competition is added the imminent risk of total loss in 
 a desperate competition in which one must perish. 
 
 § 30. Service on a large scale. 
 
 The appUcant who wishes an individual service of the 
 kind rendered by the estabUshed company is almost al- 
 ways at great disadvantage relatively in supplying him- 
 self. It is, of course, rare that the possibilities in any 
 given case will be so restricted that if the apphcant is 
 refused service by the particular company no alternative 
 is open to him; usually in some way or other he could hit 
 
 [25] 
 
§ 31 ] Railroad Rate Regulation 
 
 upon some way out in such a case. But the alternative 
 offered will often be an inadequate substitute, disadvanta- 
 geous to a greater or lesser degree. In such a situation 
 there is no effectual competition to regulate the action of 
 the original company, and without the interposition of the 
 law there might be great oppression. It is plain that a 
 railroad may not base its rates to a particular shipper 
 upon what it would cost him to cart his goods to market. 
 The mere fact that there are two services is not enough to 
 alter the fact that the situation is essentially monopohstic, 
 for if one may refuse service, the other may also. This 
 would be plainly true in the case of a city where there 
 were two competing telephone systems. There are, 
 therefore, extrinsic conditions by which it is to be deter- 
 mined what businesses are affected with a public interest; 
 and the law must here as elsewhere deal with existing 
 facts. 
 
 § 31. Legal privileges accompanying public emplo3nnent. 
 
 That legal privileges frequently accompany pubUc 
 emplojTnent is a coincidence that has struck many ob- 
 servers as a characteristic of the whole class. It is indeed 
 common to find in the case of public employments of all 
 sorts the enjoyment of an exclusive franchise, or the 
 exercise of eminent domain, the use of the streets, or even 
 a direct grant from the public treasury. The common 
 argument is that because these businesses have been granted 
 these privileges they have thereby acquired their pubUc 
 character. It is submitted, however, that under our con- 
 stitutional system no special privileges can be granted 
 except for a public purpose; for unless there is pubUc 
 interest apparent the grant is void. We have seen already 
 that the conditions of virtual monopoly, however caused, 
 may give rise to pubhc calling, even when the State has 
 had no hand in the establishment of the situation. This 
 is most suggestive; indeed, one is thus led to an entire 
 inversion of the common statement of the relation between 
 126] 
 
Historical Introduction [ § 32 
 
 the existence of public privileges and the establishment of 
 pubUc employment. The real truth of the matter seems to 
 be in the opposite statement, that no business can be 
 granted a privilege under our constitutional system unless 
 it is pubUc in character. 
 
 Topic D. MDdern Regulation of Public Services 
 
 § 32. Necessary regulation of virtual monopoly. 
 
 A review of all of the instances of public emplojmient 
 which have been cited in the course of this whole dis- 
 cussion will show that this conception of virtual monopoly 
 will cover everything. Nothing narrower will do, as for 
 example the difference sometimes put forward between the 
 undertaking of a public service in contradistinction to the 
 furnishing of a pubhc supply. Now, it is true that most 
 of the cases are cases of service — the railway and the ware- 
 house, for example; but other of the cases are of supply, — 
 the waterworks and gas works, for instance. Indeed, there 
 is nothing in this distinction, either in economics or in 
 law. It is submitted that any business is made out to be 
 pubhc in character where there is a virtual monopoly 
 inherent in the nature of things. If virtual monopoly is 
 made out as the permanent condition of affairs in a given 
 business, then the law, it seems, will consider that caUing 
 pubhc in its nature. On the other hand, if effective com- 
 petition is proved as the regular course of things in a 
 given industry, the law will hold all businesses within it as 
 private in their character. Under our constitutional 
 system a distinction is made upon this line. In the pubhc 
 calhng, regulation of service, facihties, prices and dis- 
 criminations is possible to any extent. Monopohstic 
 conditions demand such policy; and at no period in history 
 has this been more apparent than now. In the private 
 callings no such legislation should be permitted. Where 
 competitive conditions prevail there should be freedom; 
 and at no epoch in our industries has it been more im- 
 portant to insist upon this. Wherever there is estabUshed 
 
 [27] 
 
§§ 33, 34 ] ■ Railroad Rate Regulation 
 
 monopoly in a business of public importance at any time 
 and from any cause, the protection of the law is requisite, 
 requiring that all shall be served on a reasonable basis. 
 But wherever competition prevails it may be relied upon 
 to bring about all these results by its own imperative laws. 
 
 § 33. Economic conditions at the present time. 
 
 As a result of these changed business ideas, and of the 
 great inventions which have constantly tended to increase 
 the magnitude of business enterprises there has been as 
 has been seen in the last fifty years a great growth of em- 
 plojrments which have gained virtual monopoly in mat- 
 ters of public necessity. The positive law of the pub- 
 lic calling is the only protection that the public have 
 in a situation such as this, where there is no competi- 
 tion among the sellers to operate in its favor. So much 
 has our law been permeated with the theory of laissez 
 faire, which was but lately so prominent in the policy of 
 our State, that the admission has been made with much 
 hesitation that State control is ever necessary. But the 
 modern conclusion, after some bitter experience, is that 
 freedom can be allowed only where conditions of virtual 
 competition prevail; for in conditions of virtual mo- 
 nopoly, without stem restrictions, there is always great 
 mischief. There is now fortunately almost general assent 
 to State control of the public service companies, since it is 
 recognized that the special situation requires an exacting law. 
 
 § 34. Control of the public services. 
 
 In recent times there undoubtedly is an increasing need 
 of this stricter regulation of all employments which appear 
 to be affected with a public interest. While it is true that 
 there are many men who still avow the principle of laissez 
 faire, who say that it is the better policy to leave all busi- 
 ness with as little interference from the law as possible; the 
 most of men at least appreciate that the law has already 
 taken control of the situation for all time. It is hardly 
 [28] 
 
Historical Introduction [ § 35 
 
 too much to say that the efficient regulation of the public 
 employments by sufficient law is the most pressing prob- 
 lem confronting this nation; and it must be met without 
 further hesitation. As these great combinations of capital 
 have grown up under the law, so their legal rights must 
 be subject to the rights of the whole people. Great power 
 brings as its consequence the need of control of that 
 power for the good of the whole people. Two ways only 
 can be found to exercise such control. One way, that 
 advocated by the radical persons, is government owner- 
 ship and operation of the public utihties. The other way, 
 which is in fact the conservative method of dealing with 
 the problem, is the control of the rates and practices of 
 the public service corporations for the public good. One 
 or the other of these methods must be finally adopted. 
 The conservative method is now on trial. It behooves 
 us all to see to it that it be so intelligently tried, and that 
 the law applicable to the case be so accurately enforced, 
 that we may not be driven perforce to the radical alterna- 
 tive of public ownership. 
 
 § 35. Differentiation of the public service law. 
 
 The hypothesis here put forward is that whether a 
 business is public or not depends upon the situation of the 
 pubhc with respect to it. Are there enough of such pur- 
 veyors to serve the pubhc? or are there, for permanent 
 reasons, never enough? If so, there will be virtual com- 
 petition; if not, there will be virtual monopoly. In all of 
 the businesses to be discussed in these chapters, competi- 
 tion, although from a legal point of view possible, is from 
 the economic point of view improbable. So far as one can 
 see, virtual competition is at an end in these industries, 
 and virtual monopoly will henceforth prevail. Therefore 
 it must be said that the public has now an interest in the 
 conduct of these businesses by their owners. They are 
 affected with a public interest, since these agencies are car- 
 ried on in a manner to make them of public consequence. 
 
 [29] 
 
§ 36 ] Railroad Rate Regulation 
 
 Therefore, having devoted theu- property to a use in which 
 the pubUc has an interest, they in effect have granted to 
 the pubUc an interest in that use, and must submit to be 
 controlled by the public for the common good to the 
 extent of the interest they have created. Plainly we have 
 in the accepted use of these phrases the manifestation of 
 a deep-seated change in habits of thought. Only twenty- 
 five years ago the general feeling as to every sort of 
 industrial relation was that it was better to leave all 
 alone, that it was better to leave people to work out their 
 own salvation. But of late years we have been calling 
 upon the State to save us from monopoly in all its forms; 
 and we are impatient if it delays. 
 
 § 36. Unity of the public service law. 
 
 Not only has it been realized at last that we have 
 relating to the public services a distinct department of 
 the law, but also it is becoming recognized that within 
 this department there is a consistent body of law in 
 process of unification. It is in the firm belief that the law 
 governing the public services will prove upon analysis to 
 be a really unified body that the author has been working 
 for many years. Certainly the general propositions hold 
 true as to all public emplojonents — that all must be 
 served, adequate facilities must be provided, reason- 
 able rates must be charged, and no discriminations must 
 be made. Moreover in dealing with the minor details 
 of these principles, cases from one service will be found 
 in point in another — ^what conditions there are precedent 
 to service, what will excuse failure in provision of facilities, 
 what is a proper basis for calculating rates and what 
 differences constitute discrimination. It has been re- 
 marked many times that the common law may be relied 
 upon to meet, by the continual development of its funda- 
 mental principles, the complex conditions created by the 
 constant evolution in the industrial organization. One 
 of the most striking of modern instances of this capacity of 
 [30] 
 
Historical Introduction [ §§ 37, 38 
 
 growth in the common law is the astonishing progress in 
 the working out of the detail of the exceptional law govern- 
 ing the conduct of public caUings. 
 
 § 37. The modem programme of State control. 
 
 In many of the States commissions have been estab- 
 lished with full powers of ultimate supervision over prac- 
 tically all matters affecting the service, facilities, rates 
 and discriminations of all the public employments now 
 recognized as such. And in recent years the jurisdiction 
 of the Commission at Washington has been extended ex- 
 tensively over interstate commerce until it includes not 
 only common carriers and transportation facihties to a 
 greater extent than at first, but such additional services as 
 telephone and telegraph. Moreover, the powers of supervi- 
 sion of the Commission have been increased intensively by 
 successive amendments to the Act beyond merely in- 
 vestigating conditions and reporting upon unproper prac- 
 tices, as it did at first, to the present stage where it fixes 
 rates and future service, and gives reparation and other 
 redress for past misconduct. It is our conscious programme 
 to make stUl more effective our policy of public control of 
 private ownership, but there is danger that unconsciously 
 by failing to do what is right to all concerned on all sides 
 we may drift into a position where we may be forced into 
 public ownership and operation. For if this systematic 
 programme to regulate effectually the charges of the pub- 
 Uc service companies fails of something like full success, 
 there is no alternative but State ownership with its un- 
 knowable consequences. As matters stand to-day the 
 advocates of State control are really the conservatives. 
 
 § 38. Overshadowing importance of rate regulation. 
 
 All people who come in touch with the problem of rate 
 regulation by any method of approach are agreed as to its 
 overshadowing importance. Extracts from some note- 
 worthy opinions will serve to show what strong language it 
 
 [31] 
 
§ 39 ] Railroad Rate Regulation 
 
 is necessary to use to give any idea of vital consequence 
 of the general issue. "The administration of justice," said 
 Webster, "is the chiefest concern of man upon earth." 
 Within the scope of that function of government there is, 
 perhaps, no single topic of greater magnitude or moment 
 than controversies which arise in trade and commerce. 
 Said Sir Walter Raleigh, "Whosoever commands the 
 trade of the world commands the riches of the world, and 
 consequently the world itself." In a material sense, and in 
 our astonishing civilization, nothing is more important 
 than the transportation of commodities sold or inter- 
 changed, and in transportation the stability and reasonable 
 character of the rates charged therefor is scarcely less 
 important than transportation itself. The three grand 
 departments of government, legislative, executive, and 
 judicial, are with steady and swerveless purpose enacting 
 or enforcing laws to safeguard the rights of the general 
 public, and as well that portion engaged in the conduct of 
 the public services. 
 
 § 39. Present state of the public service law. 
 
 In the belief of the writer the public service law has at 
 length reached a stage of development in which it may be 
 possible to state its principles with some degree of con- 
 fidence. It is only within the last few years that it would 
 -have been within the range of possibiUty to do this. 
 Twenty-five years ago the public services which were rec- 
 ognized were still few and the law as to them imperfectly 
 realized. It was known from olden times that those who 
 professed a public employment must serve all at a reason- 
 able rate. As to the duty to serve it was thought that 
 there were exceptions. As to the restriction of rates 
 there was no standard. The important duty to provide 
 adequate facilities had hardly advanced beyond the gen- 
 eral law as to negligence. And the duty not to discrimi- 
 nate, was denied altogether. Even ten years ago when 
 these four obligations had become generally recognized, 
 [32] 
 
Historical Introduction [ § 40 
 
 the details as to them in regard to any particular employ- 
 ment had been worked out only in very fragmentary 
 manner. But at the present day it is just being appre- 
 ciated that rapid progress may be made by the general 
 recognition of the unity of the pubhc service law, whereby 
 cases as to one calling may be used to show the law in all. 
 Indeed, it is only in our present day that the attempt 
 to treat the public service law as a consistent body of 
 law could be made with any hope of success. 
 
 § 40. Ultimate limitations upon public employment. 
 
 In this crisis of affairs the people must be assured that 
 the law is indeed adequate to deal with the situation, 
 that it has not only elaborated detail to meet obvious 
 wrongs seldom defended, but also enlightened compre- 
 hension to deal with the large policies openly justified 
 which are truly inconsistent with public duty. That 
 those who profess a public employment owe the utmost 
 pubhc service should be generally accepted as the funda- 
 mental principle upon which the law governing public 
 employment is to be based. It is not agreed, however, 
 how far this principle should be pressed; there is a clash 
 of interests here, and there is an inchnation on the part 
 of those who conduct the pubhc services to contest every 
 issue. This is hardly an enlightened selfishness; for it 
 seems to many who appreciate the temper of the pubhc, 
 that the time has come when extension of the law and en- 
 forcement of it should be the avowed attitude of all con- 
 servative persons who wish the perpetuation of the pres- 
 ent condition of individual enterprise. It would be well, 
 therefore, if the restless and the doubting who see many 
 abuses and many wrongs in the conduct of our public 
 services without prompt remedy or adequate redress, 
 might be relieved and heartened by being shown that the 
 common law is adequate to deal with all real industrial 
 wrongs, and that with the aid of remedial statutes the 
 administration of the law can be relied upon. It should 
 3 [33] 
 
§ 41 ] Raileoad Rate Regulation 
 
 be sufficiently emphasized at all times in all situations 
 that pubhc servants may not adopt to the prejudice of 
 their public various profitable policies, and then justify 
 them as inherent rights which other men in ordinary 
 business may use in the advancement of their interests. 
 
 § 41. State control not socialism. 
 
 Regulation to the extent here proposed does not mean 
 socialism. This programme proposed such supervision of 
 those businesses which have become public in their char- 
 acter as the situation demands; but it leaves the manage- 
 ment of these concerns in the hands of their owners. Be- 
 lief ia State control of public utilities does not lead one to 
 socialism; indeed, it saves one from sociahsm if truly 
 understood. It is only in those few businesses where the 
 conditions are monopolistic that dangerous power over 
 their public has been attained by those who have the 
 control. In most businesses the virtual competition which 
 prevails puts the distributors at the mercy of their pubhc. 
 In cm-rent opinion the recognition of this distinction is 
 manifest. The demand is for freer trade where competi- 
 tion prevails and stricter regulation where monopoly is 
 found. In this time of peril to our industrial organization 
 faith in our common law may show the way out. It can- 
 not be that this law has guided our destinies from age 
 to age through the countless dangers of society, only to 
 fail us now. 
 
 [34] 
 
CHAPTER II 
 
 STATUTORY REGULATION 
 
 § 50. Provisions of the Act. 
 51. Development of legislative control. 
 
 Topic A. Course of Legislation in England 
 § 52. Carriers' liability before 1830. 
 
 53. The Carriers' Act of 1830. 
 
 54. The Railway and Canal Traffic Act of 1854. 
 
 55. The Railway and Canal Commission. 
 
 56. Scope of its powers. 
 
 57. Increase by later amendments. 
 
 58. Influence of English legislation. 
 
 59. Authority of English decisions. 
 
 Topic B. Regulations in the States 
 § 60. The Granger rate legislation. 
 
 61. Railroad commissions of former times. 
 
 62. Additions to their powers. 
 
 63. The modern public service commissions. 
 
 64. The spread of the movement. 
 
 65. Extent of their supervision. 
 
 66. Regulation of rates. 
 
 67. Adequacy of service. 
 
 68. Keeping of accounts. 
 
 69. Issue of securities. 
 
 Topic C. The Establishment of the Federal Commissian, 
 § 70. The Interstate Commerce Act of 1887. 
 
 71. Scope of the original provisions. 
 
 72. Immediate amendments found necessary. 
 
 73. The Elkins Act of 1903. 
 
 74. The long and short haul clause. 
 
 75. Limited jurisdiction over rates. 
 
 76. Lack of power over through rates. 
 
 77. The occasion for radical changes. 
 
 Topic D. The Strengthening of the Commission 
 \ 78. The Hepburn Act of 1906. 
 
 79. Effect of these Amendments. 
 
 80. Occasion for the Act. 
 
 [35] 
 
§ 50 ] Railroad Rate Regulation 
 
 § 81. Installation of private switches. 
 
 82. Regulation of private facilities. 
 
 83. Power to fix maximum rates. 
 
 84. Ordering through routes and rates. 
 
 85. The problem of the industrial railways. 
 
 Topic E. The Elaboration oj Its Powers 
 
 § 86. The Mann Act of 1910. 
 
 87. The new long and short haul clause. 
 
 88. Establishment of through routes. 
 
 89. Suspension of rate advances. 
 
 90. The Hadley Commission. 
 
 91. The Commerce Court. 
 
 92. The Panama Act. 
 
 93. The Valuation Act. 
 
 Topic F. Recent Decisions Defining Jurisdiction 
 
 § 94. The Abilene Oil case. 
 96. The Proctor Gamble case. 
 
 96. The Williamette Valley case. 
 
 97. The Lemon Rates case. 
 
 98. The Baltimore & Ohio case. 
 
 99. The Minnesota rate case. 
 
 100. The Shreveport case. 
 
 101. The Intermountain case. 
 
 102. The Pipe Line case. 
 
 103. Inherent limitations upon Commission action. 
 
 § 50. Provisions of the Act. 
 
 The history of the course and progress of the action of 
 the powers of Congress over commerce through the in- 
 strumentality of the Commission is written most briefly 
 in the preamble at the head of the pamphlet containing 
 the Act as amended, in the form in which it is now pub- 
 lished by the Government Printing Office: "An Act to 
 Regulate Commerce, approved February 4, 1887, as 
 amended by an act approved March 2, 1889 (25 Statutes 
 at Large, 855), by an act approved February 10, 1891 
 (26 Statutes at Large, 743), by an act approved Febru- 
 ary 8, 1895 (28 Statutes at Large, 643), by an act ap- 
 proved June 29, 1906 (34 Statutes at Large, 584), by a 
 joint resolution approved June 30, 1906 (34 Statutes at 
 Large, 838), by an act approved April 13, 1908 (35 Stat- 
 [36] 
 
Statutory Regulation [ § 51 
 
 utes at Large, 60), by an act approved February 25, 1909 
 (35 Statutes at Large, 648), by an act approved June 18, 
 1910 (36 Statutes at Large, 539), by an act approved 
 August 24, 1912 (37 Statutes at Large, 566), and by an act 
 approved March 1, 1913 (37 Statutes at Large, 701)." 
 
 § 51. Development of legislative control. 
 
 At the time of the beginning of the railroads every in- 
 ducement was held out by the authorities of the State to 
 those who would devote their capital to construction of 
 these highways. In the early charters the legislatures not 
 only often permitted profits which to-day would seem 
 incredible, but gave exclusive franchises to protect the 
 proprietors in getting the returns expected. After some 
 experience with this policy, however, the legislatures began 
 to grow cautious about granting exclusive rights for rail- 
 road construction; for it was felt in accordance with the 
 theory of political economy then in vogue that competition 
 would protect the public in all contingencies. This policy 
 of laissez faire had hardly been developed when it was dis- 
 covered that not only did unrestricted railroad building 
 produce wastes costly to all concerned, but that the in- 
 evitable end of all such competition was a combination 
 of some sort, which would almost inevitably result in 
 higher rates. There followed a period of legislative control 
 by direct action, rates being drastically reduced by popular 
 clamor; but it turned out that much of this legislation was 
 so ill advised as to practically bring the business of trans- 
 portation to a standstill. Not until what may be called 
 our own time has it been discovered that although control 
 was necessary it could be better exercised by commissions 
 given jurisdiction to deal with particular problems upon 
 general principles enounced by the legislature. Only 
 recently, therefore, has it generally been appreciated that 
 an administrative body with its elasticity of procedure 
 can do more to protect the public than any judicial tri- 
 bunal with its inherent limitation to private litigation. 
 
 [37] 
 
§§ 52, 53 ] Railroad Rate Regulation 
 
 Topic A . Course of Legislation in England 
 
 § 62. Carriers' liability before 1830. 
 
 The practice of the carriers of escaping full liability 
 for goods carried became established at a very early date. 
 The hint for this was given by Lord Coke in his report of 
 Southcote's case.'^ In a note to that case he pointed out 
 the desirability of bailees' making a special acceptance 
 of goods to hold as their own in order to escape the ab- 
 solute liabiUty which, as he believed, all bailees imder- 
 went. His view as to the absolute liability of all bailees 
 was soon modified by the courts, but carriers continued 
 under this liability, and indeed the stringent nature of their 
 obligation was increased by the decision of the Court of 
 the King's Bench in the case of Forward v. Pittard.^ In 
 order to escape this excessive obligation, carriers came 
 more and more to limit their liability by special accept- 
 ance. This was usually effected by the giving of notice 
 to shippers that the carrier would not be responsible under 
 certain circumstances, or to the full extent of the value of 
 the goods carried. These notices were usually posted in 
 the shipping office, and were often contained in advertise- 
 ments in newspapers. The courts allowed the practice 
 and permitted the carriers thus to limit their liability. 
 Eventually the carriers attempted so great a limitation of 
 their habiUty that shippers were really left without pro- 
 tection, and it became necessary to correct the evil by 
 legislation. This was the occasion of the first Engfish 
 statute— The Carriers' Act of 1830. 
 
 § 53. The Carriers' Act of 1830. 
 
 The Carriers' Act of 1830 applied to all carriers by land. 
 Its most important provision forbade the limitation of 
 hability by pubhc notice, permitting, however, the carrier 
 to make special contracts for the conveyance of goods.* 
 
 ' 4 Coke, 83b. ' 11 Geo. 4 & 1 Wm. 4, c. 68. 
 
 « 1 T. R. 27. 
 
 [38] 
 
Statutory Regulation [ § 54 
 
 The statute further exempted the carrier from hability 
 beyond the value of £10 unless special notice of value was 
 given. Under this Act the giving of special notices ceased 
 for several years, but finally the carriers again attempted 
 to limit their liability by the giving of special notice, and 
 the courts finally found a way of permitting the limitation 
 of liability in this way notwithstanding the provisions of 
 the statute. In the case of Walker v. York and No. 
 Midland Railway,^" the plaintiff sued the carrier for the 
 loss of fish he had shipped, which had been injured by the 
 negligent delay of the carrier. The defendant had dis- 
 tributed to the plaintiff and others printed notices saying 
 it would not be liable for any damage caused by delay and 
 that no servant had any authority to alter this condition. 
 The plaintiff claimed that he was not bound by such a 
 notice, and that it would not protect the carrier, and, so 
 claiming, he shipped the fish. The court advised the 
 jury if they found that the plaintiff had received the 
 notice to find for the defendant, unless the plaintiff had 
 unambiguously refused to deliver the goods on the terms of 
 the notice and the defendant had acquiesced in the re- 
 fusal. Under this instruction the jury found for the de- 
 fendant, and the Court of the. Queen's Bench held the 
 verdict correct. 
 
 § 64. The Railway and Canal Traffic Act of 1854. 
 
 Partly as a result of this practice of the carriers thus 
 legalized by the courts, Parliament passed the Railway and 
 Canal Traffic Act of 1854." This Act apphed only to 
 carriers by railway and canal. It forbade the limitation 
 of liability by notice and provided that no contract limit- 
 ing hability should be valid unless it was in writing and 
 signed by the shipper. In addition to this provision it 
 contained several other important regulations of carriage 
 by railway. In the second section it provided that every 
 railway and canal company should afford all reasonable 
 
 w 2 E. & B. 750. " 17 & 18 Vict. c. 31. 
 
 [39] 
 
§ 55 ] Railroad Rate Regulation 
 
 facilities for the receiving and forwarding and delivering 
 of traffic upon and from the several railways and canals 
 and for the return of carriages, trucks, boats, and other 
 vehicles; that no such company should give any undue or 
 unreasonable preference or advantage to or in favor of 
 any particular person or company, or any particular de- 
 scription of trafl&c, or subject any person, company, or de- 
 scription of traffic to any undue or unreasonable preju- 
 dice or disadvantage in any respect whatsoever; and that 
 every such carrier having a railway or canal which formed 
 a part of a continuous line of communication or which had 
 a station near the station of another carrier should afford 
 all due and reasonable faciUties for receiving and for- 
 warding all the traffic arriving by one or the other such 
 railway without any unreasonable delay or preference or 
 advantage, so that no obstruction might be offered to the 
 public desirous of using such railways or canals as a con- 
 tinuous line of communication, and so that all reasonable 
 accommodation might at all times be afforded to the 
 public. In the third section it was provided that any 
 company or person might complain of a violation of the 
 act in any of the coujts, and that the attorney-general 
 might complain on behalf of the public; that injunctions 
 might be issued and a penalty exacted for disobedience of 
 such injunction. 
 
 § 56. The Railway and Canal Commission. 
 
 In 1888 ^^ a Commission was established in Great Britain, 
 called the Railway and Canal Commission, with both 
 administrative and judicial duties. The Commission is 
 composed of two appointed members (one of them expe- 
 rienced in railroad business) and a judge of the Superior 
 Court, appointed in each county of the United Kingdom 
 for the business of that county. All three commissioners 
 sit in each case brought before the Commission; but the 
 two appointed members may do administrative business. 
 
 " 51 & 52 Vict. c. 25. 
 
 [40] 
 
Statutory Regulation [ § 56 
 
 To this Commission the returns are to be made; and they 
 are to hear complaints for violation of the provisions of the 
 Railway and Canal Traffic Act or other regulative acts, 
 and any dispute with regard to tolls, rates and charges. 
 They may order such reasonable faciUties for traffic as the 
 interests of the public may require. They may award 
 damages for violations of law or for overcharge; but no 
 damages can be awarded for overcharge where the rate 
 charged had been properly published. The Commission 
 may order two or more companies to make joint arrange- 
 ments for traffic, and apportion the expense. Complaint 
 may be made by municipal bodies or by trade associations. 
 On questions of fact no appeal is allowed from an order or 
 decision of the Commission. On any question of law the 
 judicial member of the Commission shall decide, in case of 
 difference of opinion; and from the decision of the Com- 
 mission an appeal lies regularly to the Court of Appeal 
 and thence to the House of Lords. On appeal the court 
 may draw such inferences as are not inconsistent with the 
 facts expressly found, when it is necessary to determine the 
 question of law. 
 
 § 66. Scope of its powers. 
 
 A classification and rate sheet must be submitted by 
 every railway to the Board of Trade, which after hearing 
 passes upon it; the schedule after approval is then intro- 
 duced into Parliament and passed as a statute, fixing 
 thereby the maximum rates of the railway. If the schedule 
 of the railway is not approved, the Board of Trade may 
 make and introduce into Parliament its own schedule. It 
 was also provided that if a joint rate is necessary as a 
 reasonable faciUty for traffic, the railways may be re- 
 quired to make a joint rate. Differences in charges for 
 similar services to traders of different districts presumably 
 constitute an undue preference, and the burden of proving 
 them reasonable is on the railway. The Commission 
 may so far as it thinks reasonable consider whether such 
 
 [41] 
 
§ 57 ] Railroad Rate Regulation 
 
 difference is necessary for the purpose of securing in the 
 interests of the public the traffic in respect of which it is 
 made; provided no difference shall be made in the treat- 
 ment of home and foreign merchandise. The Commis- 
 sioners have power to direct that no higher charge shall 
 be made to any person for services in respect of merchan- 
 dise carried over a less distance than is made to any other 
 person for similar services in respect of the hke description 
 and quantity of merchandise carried over a greater dis- 
 tance on the same line of railway; but group rates are 
 permitted. Provisions are made for posting the tariff 
 sheet at stations; for complaints to the Board of Trade; for 
 filing returns; and for the Board of Trade making rules 
 and regulations. 
 
 § 57. Increase by later amendments. 
 
 Six years later, by an amendment," it was provided that 
 if a railway increased its rates, and a shipper filed a com- 
 plaint with the Commission, the complainant (unless 
 otherwise ordered by the Commission) need pay at the 
 outset no more than the old rate; and the burden is on 
 the railway to justify the increase. In 1904 it was pro- 
 vided further " that the reasonable facilities required by 
 the Railway and Canal Traffic Act shall include reasonable 
 facihties for the junction of private sidings or private 
 branch railways with the main line, and reasonable facil- 
 ities for receiving, forwarding and delivering traffic upon 
 and from those sidings or private branch railways. The 
 most important legislation since that time would seem to 
 be the Railway Companies Accounts and Returns Act of 
 1911." That Act provided most elaborately for the 
 system of accounts to be kept by corporations under the 
 supervision of the Commission. There are schedules 
 annexed to the Act with the elaboration of detail charac- 
 teristic of English legislation setting forth the various 
 
 " 57 & 58 Vict. c. 54. "1 «fe 2 Geo. 5, c. 34. 
 
 " 4 Edw. 7, c. 19. 
 
 [42] 
 
Statutoby Regulation [ §§ 58, 59 
 
 forms to be followed by the companies, both as to the 
 accounts which they should keep and the returns which 
 they must make. 
 
 § 68. Influence of English legislation. 
 
 It will be noted at various points throughout this book 
 that there has been an interchange of ideas between 
 England and America concerning the exercise of the pow- 
 ers of regulation over railroads. The Interstate Com- 
 merce Act of 1887, in its substantive provisions in the 
 earher sections, particularly those relating to undue or 
 unreasonable preference, or advantage in the treatment of 
 shippers or traffic, is plainly modeled upon the Railway 
 and Canal Traffic Act. That provision of the Hepburn 
 Act giving the Commission power to require the connec- 
 tion of branch sidings with the main line had been antic- 
 ipated by English legislation of a few years earlier. And 
 the provision of the Mann Act to the effect that increases 
 in rates could be suspended until passed upon by the 
 commission — the burden of proof being upon the railroad 
 to justify the advance — was also founded upon English 
 legislation. On the other hand, the recent Act of Parha- 
 ment relating to the making of reports and the keeping of 
 accounts is related in character to provisions of the Act 
 to Regulate Commerce of long standing. 
 
 § 69. Authority of English decisions. 
 
 This fact, that several of the fundamental provisions 
 of the Interstate Commerce Act have been founded upon 
 the Railway and Canal Traffic Act, has had a consequence 
 of importance in determining the interpretation which our 
 courts have put upon these sections. Thus, the section of 
 the Interstate Commerce Act, limiting the condemnation 
 of rates described as discriminating to those charged under 
 circumstances and conditions substantially similar, was so 
 clearly founded upon the similar provision in the Rail- 
 way and Canal Traffic Act, that the decisions of the 
 
 [43] 
 
§ 60 ] Railroad Rate Regulation 
 
 English courts as to the application of this proviso, which 
 were in their reports at the time the Act to Regulate 
 Commerce was passed, were, in accordance with the ac- 
 cepted canon of statutory construction, held to have been 
 in the contemplation of the Congress when the Act was 
 passed, to such an extent as to make these decisions 
 governing. A late example of this same doctrine is the 
 case where it was decided that no difference could be 
 made between shippers who had gathered together goods 
 of others for shipment and other shippers, such forwarders 
 having been held long before by the English courts to have 
 rights not to be discriminated against when interpreting 
 the similar provisions upon which the American Act was 
 founded. 
 
 Topic B. Regulation in the States 
 
 § 60. The Granger rate legislation. 
 
 Between 1870 and 1880 the western States began to pass 
 stringent statutes for the regulation of railway charges. 
 The railways running through this section were principally 
 organized and owned in the eastern States, and the farmers 
 of the west had become dissatisfied with the treatment they 
 received, believing that the roads were managed exclusively 
 in the interest of their eastern owners. The cruder legis- 
 lation at the beginning of this period provided in the 
 statute itseK maximum rates for the carriage of freight. 
 For instance, in the constitution of 1870 the Illinois legis- 
 lature was given express power to establish reasonable 
 maximum rates by railroads for the transportation of 
 passengers and freight on the different railroads of the 
 State. Meanwhile other difficulties were felt by the 
 people beside that of excessive charges. The discrimina- 
 tion of railroads in favor of certain shippers came to be 
 an industrial evil, and provisions were adopted in State 
 after State forbidding such discrimination. Among the 
 earliest was that contained in the constitution of Penn- 
 sylvania of 1873, in which it was provided that persons 
 [44] 
 
Statutory Regulation [ §§ 61, 62 
 
 and property should be transported without undue or 
 unreasonable discrunination in charges or in facilities. 
 
 § 61. Railroad commissions of former times. 
 
 The regulation of charges by direct legislation was 
 found not to be a convenient or effective method; and as 
 early as the period during the era of the construction of 
 the original railroads there were commissions estabUshed 
 by the legislatures from time to time to report upon 
 certain phases of the problems which the railroads pre- 
 sented. Following the period of the Granger legislation 
 with its more or less unfortunate results the States not 
 long thereafter began establishing permanently commis- 
 sions, which were given in several States the power to 
 fix rates; and this movement for the establishment of 
 railroad commissions eventually covered the entire country. 
 Almost every State had a transportation commission, 
 although the powers intrusted to it differed widely in the 
 different States. The effectiveness of these commissions 
 depended to a great extent upon the skill and ability 
 with which they are administered, and the confidence 
 felt in their decisions. The original commissions were 
 established simply to investigate conditions and report 
 to the legislature. Thus, until recently, the Massachusetts 
 Commission had fundamentally no greater power than to 
 make recommendations to the railroads, which if dis- 
 obeyed, were more or less certain to result in specific 
 action by the legislature. On the other hand, the Com- 
 missions of later origin, such as the Texas Commission, 
 were given by the legislature not only the power to revise 
 the rates estabUshed by the railroads, but to fix rates on 
 its own initiative. 
 
 § 62. Additions to their powers. 
 
 Later, more extensive powers over railroads were given 
 to the various State commissions. It was realized that 
 the attempt to regulate the railroads by laws passed from 
 
 [45] 
 
§ 63 ] Railroad Rate Regulation 
 
 time to time had broken down. Such legislative control 
 was sporadic in its character, and scattering in its effect. 
 It was so far without principles that it was continually 
 being set aside by the courts, and yet it paid httle atten- 
 tion to particular situations requiring special treatment. 
 Altogether, it was at last appreciated that the problem 
 of the regulation of railroads is more administrative than 
 it is legislative. It is comparatively easy to say in general, 
 from year to year, what in general is right to be done, 
 but it is impossible to decree from day to day, just what 
 in particular should be the service rendered. For a full 
 generation now, it has generally agreed that the authority 
 to give orders in particular cases, with power of the State 
 behind it, should be given to the commission charged with 
 supervision over the railroads. In States such as Missis- 
 sippi, this power was early established, to be followed in the 
 other States as they were willing to face the problem. 
 In these States it wiU be noted the legislature went no 
 further in delegation of its power, than to give the com- 
 mission power to apply the principles laid down to par- 
 ticular cases, but in some States the legislature has gone 
 to the extent of virtually abdicating its functions by giving 
 to the commission power to lay down general obhgations 
 governing all carriers. A commission which has the power 
 given to it as in Missouri of promulgating schedules to which 
 all railroads must conform, is having powers given it which 
 it seems should not properly be conferred. 
 
 § 63. The modern public service commissions. 
 
 The powers of these railroad commissions of the earlier 
 time had by 1900 gradually been extended over facilities 
 connected with transportation, warehouses for example 
 where the elevation of grain is a matter of importance. 
 Then came a period, soon after 1900, when the importance 
 of the transmission of intelligence by wire had become of 
 such moment that jurisdiction over telephone companies 
 was added to the powers of almost all of the railroad 
 [46] 
 
Statutory Regulation [ § 64 
 
 commissions. Only a little later, it was appreciated that 
 the regulation of the municipal utilities such as gas works 
 and electric plants could not be accomplished effectively by 
 the crude methods of limitations in charters, long abandoned 
 in the matter of transportation services, or by municipal 
 ordinances passed at sporadic intervals and often set aside 
 by the courts as beyond the power of the city. In some 
 few States this need was met by the establishment of 
 special conunissions to deal with these new services. But 
 almost simultaneously all over the United States, beginning 
 with New York about 1906, legislation was passed estab- 
 Ushing in place of the existing commissions new commis- 
 sions with power over all the pubUc services of consequence 
 to the Commonwealth. The Wisconsin commission was 
 at about the same time given even more extensive powers 
 over the public services within its borders. There can be 
 no doubt that this movement to put all the public service 
 companies under one State commission is sweeping the 
 country. And indeed such concentration of the regulating 
 authority seems plainly to be the desirable thing, save where 
 particular circumstances may make it for the time imprac- 
 ticable. 
 
 § 64. The spread of the movement. 
 
 Nothing is more significant in the history of American 
 institutions of late years, than the spread of this move- 
 ment. The concentration of the regulation of all the 
 utiUties which are pubhc in character has become a 
 policy to which all parties have given their support. 
 During the past few years there has not been a time 
 when the establishment of a public service commission, 
 with general jurisdiction over all the utilities, has not been 
 written in the annals of the legislation of several States. 
 The New England States, with their conservative tradi- 
 tions, have acted one by one until there is a pubhc service 
 commission now in every State. The middle States of 
 the tier which crosses from the Atlantic to the Mississippi, 
 
 [471 
 
§ 65 ] Railroad Rate Regulation 
 
 in place of their railroad commission have created general 
 pubhc utility commissions. There is now a commission 
 with more or less extended powers over businesses affected 
 with a pubhc interest in practically every State in the 
 Union; and the railroads, it is needless to say, are subject 
 to the control of the commission in every case. The im- 
 pelhng forces back of this movement which has thus swept 
 the country is the fundamental unity. It is recognized, at 
 last, that the law governing the public utilities is one and 
 the same, and that, therefore, there should be one body 
 versed in it all with full powers over the whole situation. 
 
 § 65. Extent of their supervision. 
 
 It has been assumed throughout the country for so long 
 that these public utilities of every sort ought not to be 
 left unregulated in private hands that argument to that 
 effect would be superfluous. Indeed, it is now appreciated 
 that the only alternative to an impetuous movement to- 
 ward public ownership is real success in effective regulation 
 of private ownership. The whole movement toward com- 
 mission regulation rests upon the pubhc conviction that 
 the earlier methods of regulation attempted through 
 court processes has proved upon the whole ineffective, 
 and that specific legislation has been in most instances 
 unintelligent. As a practical matter the justification of 
 commission activity and supervision, as against statutory 
 control enforced by the courts, is that there is thereby 
 estabUshed a specialized body, expert in the particular 
 work which it has to perform. The modern statutes 
 establishing these bodies recognize the commission as the 
 organ of the State both for protecting the rights of the 
 utilities in the performance of their functions and for com- 
 pelling the utilities to render in proper manner all of their 
 pubhc duties. Chief among the powers essential to such 
 a commission is the right to obtain full information upon 
 every point affecting the operatives of the companies 
 subject to its jurisdiction. 
 [48] 
 
Statu TOEY Regulation [ §§ 66, 67 
 
 § 66. Regulation of Rates. 
 
 The power is generally given to the commissions in the 
 States to determine and estabUsh after notice and hear- 
 ing just and reasonable rates and the classifications and 
 regulations appertaining thereto. Experience seems to 
 have also made it plain that the protection of all concerned 
 requires the further provision that the rates and classifica- 
 tions shall be filed with the commission before going into 
 effect, thereby becoming the only legal rates which can 
 be charged anyone. This has the consequence of making 
 the charging of any different rate than that which has 
 duly been scheduled conclusively illegal as discrimination, 
 without any possibility of urging extenuating reasons for 
 making a difference in rates. It is common to provide 
 that rates may not be advanced without the permission of 
 the commission having first been obtained. Indeed, in the 
 more thorough-going States the power not merely to 
 suspend advances in rates but to prevent the lowering of 
 rates unduly is given to the commission — to fix the min- 
 imum in fairness to all concerned as well as the maximum 
 of charge for protection of the public has been given. 
 
 § 67. Adequacy of service. 
 
 It is only in recent years that it has been appreciated 
 that the power to compel adequate service is if anything 
 of more importance to the community than the keeping of 
 rates to a reasonable level. By the provisions of the 
 modern statutes, the commission is given full power for 
 determining not merely adequacy and safety of the service 
 but also a large influence in determining its character and 
 extent, so far as this may be done consistently with the 
 constitutional rights of the companies concerned. The 
 power of the commission to order both repairs and addi- 
 tions to the plant and increase and extension of facilities 
 is usually set forth in general language; but such matters 
 as those with which the courts had hesitated to deal, such 
 as the opening of stations and the making of switch 
 4 [49] 
 
§§ 68, 69 ] Railroad Rate Regulation 
 
 connections, are usually specifically mentioned. That such 
 things as train service and freight facilities can better be 
 handled by a commission with discretion than by the pass- 
 ing of special statutes or codes is clear. Indeed, the former 
 attempt to bring about proper service by judicial process 
 brought at private expense to enforce statutory provisions 
 proved a dismal failure. 
 
 § 68. Keeping of accounts. 
 
 The modern statutes call for uniform accounts by public 
 utilities kept in a way prescribed by the commission with 
 the right of the commission at discretion to classify utiUties 
 for this purpose. The power to prescribe uniform account- 
 ing would of course be useless without the provision made 
 for sufficient inquisitorial powers to see that all orders of 
 the commission are obeyed. It is also plain that the orders 
 of the commission could be evaded if companies were not 
 forbidden to keep one set of books for use before commis- 
 sions and another set for their own information. In the 
 latest statutes certain matters of accountancy, such as 
 depreciation reserves, the fixing of the rate of depreciation 
 for utilities of various classes is properly left to the discre- 
 tion of the commission. It is plain that for the protection 
 of the public the utilities must be required to set aside 
 sufiicient funds to keep the plant in a state of operating 
 efficiency and the investment at a fixed level. It should be 
 added that all this has its effect in determining the rate of 
 dividend which these corporations may properly pay. 
 
 § 69. Issue of securities. 
 
 In a great many States the commissions have been given 
 power to pass upon the securities which the corporations 
 subject to their jurisdiction are proposing to issue. The 
 object of regulating capitahzation is to see that all cap- 
 italization upon which the public is expected to pay a 
 retm-n represents money actually used in serving the 
 public, and to make certain that no part of such securities 
 [50] 
 
Statutory Regulation [ § 70 
 
 represents improper expenditure for what are not fairly 
 capital purposes. Furthermore, if these provisions are to 
 be effective the Commission must see that the proceeds of 
 capital issues are in fact spent for the objects for which the 
 issue was made and for no other. Ample leeway is usually 
 given the companies to meet temporary needs and emer- 
 gencies by unregulated and unfunded issues of short time 
 obUgations, which will not therefore become a permanent 
 burden upon the public. It is equally necessary that 
 consolidations of corporations shall be passed upon by the 
 Coromission, together with whatever new securities the 
 combination involves. This is peculiarly necessary to 
 prevent the capitalization of franchise values, which would 
 prevent any effective regulation of rates based upon con- 
 fining the company to a fair return upon the capital ac- 
 tually invested. 
 
 Topic C. The Establishment of the Federal Commission 
 
 § 70. The Interstate Commerce Act of 1887. 
 
 The power given to Congress by the Constitution over 
 commerce between the States was not taken advantage of 
 until the year 1887, when the Interstate Commerce Act 
 was passed. This act was founded to a considerable ex- 
 tent on the English Railway and Canal Traffic Act, 
 although many of its provisions were influenced by prior 
 State legislation. In the original Act the Interstate Com- 
 merce Commission was created and its organization 
 defined. Railroads were forbidden to charge more than 
 just and reasonable rates, or to discriminate between 
 persons or places. The Commission was given the power 
 to investigate alleged violations of the Act and to make 
 orders thereon, and power was given to the courts to act 
 in support of such orders. One or two particular abuses 
 were directly forbidden. Thus it was forbidden to charge 
 more for a shorter than for a longer haul in the same direc- 
 tion and over the same route under substantially similar 
 conditions, and the practice of giving rebates or free car- 
 
 [51] 
 
§§ 71, 72 ] Railroad Rate Regulation 
 
 riage was forbidden. And it was provided that in dealing 
 with connecting carriers no preferences or priorities in 
 facilities or service should be given to one over another. 
 
 § 71. Scope of the original provisions. 
 
 In running through the Act as it originally stood there 
 are certain points which will be worth noting in view of 
 later developments. The jurisdiction of the Commission 
 extended generally only to carriers wholly by railroad 
 engaged in interstate and foreign commerce; it did not 
 cover water carriers, unless operated under common con- 
 trol with railroad carriers. Generally speaking, there was 
 no idea of giving anything but supervisory power over 
 the railroads; the Commission was primarily established 
 by the Congress as an investigating body. It did have 
 powers, however, in addition to conducting general investiga- 
 tions, to hear particular complaints; but in respect to such 
 complaints, it had no powers of its own to grant relief. 
 The most that the Commission could do was to make 
 findings on such complaints, and its report thereupon 
 could be used as prima fade evidence in proceedings in 
 the courts based upon the wrongs alleged. However, the 
 railroads in these subsequent proceedings, which were 
 virtually regarded as de novo, put in any evidence they had, 
 and it was more or less of a scandal that the railroads 
 showed very generally a disposition in important cases to 
 withhold much of their evidence from the Commission and 
 produce it before the courts, with the result that the 
 courts would very frequently come to a different conclu- 
 sion from that which the Commission had announced. 
 
 § 72. Immediate Amendments found necessary. 
 
 It was found from the very outset, that the Commission 
 had not been given in this legislation the equipment to 
 carry out the objects for which it was created, moderate 
 as these were in their purpose. The Commission was 
 particularly charged with seeing whether rates were reason- 
 [52] 
 
Statutory Regulation [ §§ 73, 74 
 
 able in themselves, and whether rebates were being given; 
 but the carriers were not required to file their schedules of 
 rates so that it could be known how matters stood, and 
 what was being done. Moreover, although the duty to 
 investigate conditions and report thereon was imposed 
 upon the Commission, its powers to call witnesses and 
 eUcit testimony were by no means suflBcient for the pur- 
 pose. The Amendments of 1889 and 1891 were, therefore, 
 necessary to clear things up in these two respects, if the 
 Commission was to have any real power to accompUsh the 
 objects for which it was created. 
 
 § 73. The Elkins Act of 1903. 
 
 In 1903 the so-called Elkins Act was passed to perfect 
 the Act. In the first section carriers in interstate com- 
 merce are made criminally responsible for violations of the 
 Act. In the second section provision is made for bring- 
 ing into any proceeding before the Commission all carriers 
 or other persons interested in the inquiry. In the third 
 section jurisdiction is given to the courts sitting in equity, 
 at the request of the Commission, to inquire into and 
 enjoin any infraction of the provisions of the Act. These 
 suits shall be prosecuted by the District Attorneys under 
 order of the Attorney-General, and shall not preclude 
 suit by private persons. And provision is made for speedy 
 trial by expediting such suits. 
 
 § 74. The long and short haul clause. 
 
 It seems to have been undoubtedly the intention of the 
 framers of section 4, the long and short haul clause, to 
 forbid absolutely the practice of charging more for a shorter 
 haul, unless upon application to the Commission express 
 permission so to charge was given. The section, however, 
 was a matter of contention between the two houses of 
 Congress, and as it was finally passed the qualifying 
 phrase "under substantially similar circumstances and con- 
 ditions" was inserted, without probably any very clear 
 
 [53] 
 
§ 75 ] Railroad Rate Regulation 
 
 belief that the meaning of the section was thereby funda- 
 mentally altered. At first the railroads acted upon the 
 supposition that express permission of the Commission 
 must be obtained according to the proviso in the section, 
 if a greater charge was to be made for the shorter haul, 
 and this seemed to be the view at first taken by the courts. 
 The philosophy of the Act was that competition would 
 reduce the rates to a fair amount at all competitive points, 
 and that the fourth section would then keep the rates at 
 non-competitive points down to the level of the competitive 
 rates. The courts, however, finally decided, in view of the 
 limitation of the, section to cases where the conditions were 
 substantially similar, that competition with other carriers 
 would justify a lower rate for the longer haul, and as practi- 
 cally all cases of the sort before the passage of the Act had 
 been due to the competition of other carriers, this decision 
 ia effect nullified the whole section until its force was 
 restored in 1910 by Amendment to the Act. 
 
 § 75. Limited jurisdiction over rates. 
 
 From the outset of its history the Commission claimed 
 that under the Act it had the power not merely to forbid 
 an unreasonable rate, but also to indicate to any railroad 
 what it would regard as a reasonable rate for any par- 
 ticular service, and that then the railroad disregarding 
 such recommendation would be subject to the action of 
 the courts. The lower federal courts, however, from the 
 beginning denied this power to the Commission. The 
 question did not reach the Supreme Court of the United 
 States for ten years, but finally in the Cincinnati, New 
 Orleans and Texas Pacific Railway case the issue was 
 fairly presented; and the Supreme Court of the United 
 States decided that the Commission had no power to fix 
 rates. After that time the Commission under certain cir- 
 cumstances advised a railroad that in its opinion a reason- 
 able rate would be no greater than a sum named; but no 
 attempt was made to go further than this in fixing rates, 
 [54] 
 
Statutoby Regulation [ §§ 76, 77 
 
 until in 1906 this power was given it by amendment to 
 the Act. 
 
 § 76. Lack of power over through rates. 
 
 The practice of carriers to make through traffic arrange- 
 ments with some one connecting Une, and to throw all 
 business into the hands of that line, notwithstanding the 
 wishes of the shipper and without regard to his interests, 
 caused dissatisfaction from the outset. It is true that in 
 case such an arrangement was made the through rate 
 would be posted; but if the tariff sheet did not state the 
 route the shipper was deprived of a chance to discover and 
 ship by a cheaper route, or one more agreeable to him for 
 any reason. Furthermore, the connecting carriers some- 
 times refused to recognize the joint rates and collected 
 their entire local charges. The Commission early ordered 
 that published joint tariffs should indicate the route, and 
 that the connecting carriers should file a consent to the 
 rate. But the carriers refused to abide by this order; and 
 upon a suit for enforcing it the Supreme Court finally 
 held that the carrier might pubUsh a through tariff of- 
 rates, reserving the right to route as it pleased. All this 
 has been changed by later amendments to the Act, to be 
 discussed subsequently in this chapter. 
 
 § 77. The occasion for radical changes. 
 
 The attitude of the courts toward the Interstate Com- 
 merce Act caused considerable dissatisfaction, especially 
 in those parts of the country where the great bulk of 
 freight originates, and the desire for further regulation 
 culminated in the passage of the Rate Regulation Act 
 of 1906. This action of Congress had been foreshadowed 
 by a very considerable body of similar legislation in the 
 States just previously. It was characteristic of this legis- 
 lation that it confers on the railway commissions the power 
 of fixing a maximum rate; and the giving of such power 
 to the Interstate Commerce Commission was in fact the 
 
 [55] 
 
§§ 78, 79 ] Railroad Rate Regulation 
 
 chief object of those who secured the passage of the Rail- 
 road Rate Act. The decisions of the Supreme Court 
 which had given most dissatisfaction were the decision 
 .denying the Commission the power to fix rates and that 
 permitting the carrier to charge a less sum for a longer 
 haul. In addition to this, certain omissions in the original 
 Act were found to work badly, in view of the railroad 
 practices. Most of these defects had been remedied by 
 legislation in England. It was believed by a large portion 
 of the shippers that railway rates were in many instances 
 too high, and that favoritism through rebates and other 
 forms of discrimination were indulged in by various 
 methods by the carriers. 
 
 To-pic D. The Strengthening of the Commission 
 
 § 78. The Hepburn Act of 1906. 
 
 The act of 1906, was in the form of an amendment to 
 the original Interstate Commerce Act; and its object was 
 to perfect that Act by an extension of its scope. It in- 
 creased the number of commissioners from five to seven; 
 and their salaries from 17500 to $10,000. It included in 
 the provisions of the Act express and sleeping-car com- 
 panies and pipe lines for the transportation of oil or any 
 other commodity except water and natural or artificial 
 gas. It enumerated at great length the persons to whom 
 free passes may be issued (the original Act having named 
 typical classes only), and made it a crime to issue or to 
 use a pass contrary to the provisions of the Act. It made 
 the penalties for a violation of the Act more severe, and 
 provided more carefully for the institution of prosecutions 
 for violation of the Act. 
 
 § 79. Effect of these Amendments. 
 
 The legislation of this period fundamentally changed 
 
 the character of the Commission, so much so that it is 
 
 spoken of in Washington circles as the New Commission 
 
 when contrasting it with the Old Commission before 1906. 
 
 [56] 
 
Statutory Regulation [ § 80 
 
 Under the old law, the Commission was primarily an in- 
 vestigating body, aiding the legislative branch in showing 
 it the way. Its powers were hardly more than adminis- 
 trative, being confined largely to supervision by inquiry 
 into the course the carriers were taking, rather than any 
 regulation of their conduct by order. But from now on 
 the Commission may fairly be said to have combined in 
 its constitution quasi-judicial functions along with its 
 administrative duties. It henceforth not merely declares 
 matters of which complaint has been made so improper 
 that relief should be granted; but it fixes for the future the 
 standard of propriety to be observed. Since this time it 
 has become a regulating commission with the fundamental 
 powers characteristic of such bodies. It remained only to 
 develop those powers still further by subsequent legislation. 
 
 § 80. Occasion for the Act. 
 
 The occasion for the new Act was thus stated by the 
 Congressional Committee that reported the bill: "It has 
 been beheved by a large portion of the shippers that 
 railway rates were in many instances too high, and that 
 favoritism through rebates and other forms of discrimina- 
 tion were indulged in by various methods by the carriers. 
 The ingenuity of some of the carriers and shippers has 
 resulted in avoiding the provisions of that Act through 
 the use of joint tariffs, involving, in some instances, a 
 railroad and a mere switch owned by a shipper; through 
 arrangements whereby excessive mileage was given to the 
 shipper of products who owned his own cars; through the 
 use of refrigerator cars; through the permission given to 
 independent corporations to render some service incident 
 to the shipment, as the furnishing of ice in the bunkers of 
 the car; by what is known as the 'midnight tariff,' a 
 method involving an arrangement with a shipper to as- 
 semble his freights, have them ready for shipment at a 
 particular date, whereupon the carrier would give the neces- 
 sary three days' notice of a reduction in the rate. Compet- 
 
 [57] 
 
§ 81 ] Railroad Rate Regulation 
 
 ing carriers and shippers would know nothing about this 
 arrangement. The freight would be shipped at the new 
 lower rate, and then there would be a restoration of the 
 old rate. The law of to-day would be fairly satisfactory 
 to all shippers if the spirit of fairness required by it had 
 controlled the conduct of the carriers, and the necessity 
 for the proposed legislation is the result of and is raade 
 necessary by the misconduct of parties who are now most 
 clamorous against additional restraint. If the carriers had 
 in good faith accepted existing statutes and obeyed them 
 there would have been no necessity for increasing the 
 powers of the Commission or the enactment of new 
 coercive measures." 
 
 § 81. Installation of private switches. 
 
 Several new provisions in this 1906 legislation were 
 directed against certain abuses which had fostered monop- 
 oUes. The original Act had left it possible for a railroad 
 to serve a favored shipper by making connection with his 
 private switch and refusing a similar connection to another 
 shipper. By a provision in section 1 of the Hepburn Act, 
 it was provided that any common carrier subject to the 
 provisions of the Act upon application of any lateral, 
 branch Hne of railroad, or of any shipper tendering inter- 
 state traffic for transportation, shall construct, maintain, 
 and operate upon reasonable terms a switch connection 
 with any such lateral, branch line of railroad, or private 
 side track which may be constructed to connect with its 
 railroad, where such connection is reasonably practicable 
 and can be put in with safety and will furnish sufficient 
 business to justify the construction and maintenance of 
 the same; and shall furnish cars for the movement of such 
 traffic to the best of its ability without discrimination in 
 favor of or against any such shipper. In case the carrier 
 refused upon application, to make or operate such connec- 
 tion, an appeal for the issuance of an order was allowed to 
 the Commission for any shipper aggrieved by a refusal; 
 [58] 
 
Statutory Regulation [ § 82 
 
 it was not until the Mann Act, after the omission had 
 been pointed out by the Supreme Court, that the owner of 
 the lateral line was also given the right to go to the Com- 
 mission for an order for installation of a switch. 
 
 § 82. Regidation of private facilities. 
 
 One of the most galUng monopolies estabUshed by action 
 of the railroads and permissible under the original act, was 
 that of the private car. For example, a few great corpora- 
 tions, by contract with the railroads, established a monop- 
 oly of the supply of refrigerator cars for the carriage of 
 perishable fruit; and a similar, and hardly less far-reaching 
 mohopoly was created in tank cars. The evil of the 
 private car line was felt in two directions: first, the charge 
 to ordinary shippers using the cars was increased by 
 monopohstic rates; second, the charge to the owners of the 
 cars was greatly lessened by rebates for the use of the cars. 
 In the first section of the Hepburn Act it was provided 
 that the term "transportation" shall include cars and 
 other vehicles and all instrumentalities and facilities of 
 shipment or carriage, irrespective of ownership or of con- 
 tract, express or implied, for the use thereof and all 
 services in connection with the receipt, delivery, elevation, 
 and transfer in transit, ventilation, refrigeration or icing, 
 storage, and handhng of property transported; and it shall 
 be the duty of every carrier subject to the provisions of 
 this Act to provide and furnish such transportation upon 
 reasonable request therefor, and to establish just and 
 reasonable rates applicable thereto. In a later section it 
 was further provided that if the owner of property trans- 
 ported, directly or indirectly, render any service con- 
 nected with such transportation, or furnishes any in- 
 strumentaUty used therein, the charge and allowance 
 therefor shall be no more than is just and reasonable, and 
 the Commission may, after hearing on a complaint, deter- 
 mine what is a reasonable charge as the maximum to be 
 paid by the carrier or carriers for the service so rendered 
 
 [59] 
 
§§ 83, 84 ] Railroad Rate Regulation 
 
 or for the use of the instrumentahty so furnished, and fix 
 the same by appropriate order. 
 
 § 83. Power to fix maximum rates. 
 
 The most important feature of the 1906 Amendment was 
 that giving the Commission the power to fix maximum 
 rates. The fixing of maximum rates already had not been 
 uncommon in the States; and in other countries it had 
 been usual, if not universal. In England, maximum rates 
 were fixed, not by the Railway and Canal Commission, but 
 by the Board of Trade, one of the executive departments 
 of the government, after due hearing; and the rates thus 
 fixed were enacted in the form of statute by Parliament, 
 after an opportunity for hearing before a committee. The 
 provisions of the Hepburn Act which are still in force were 
 that upon complaint the Conmiission, after hearing, shall 
 determine a reasonable maximum rate, which shall take 
 effect at such time after thirty days as may be fixed by 
 the Commission, and shall continue in force not more than 
 two years, unless suspended or set aside by the Commis- 
 sion or the courts. The carrier aggrieved may appeal to 
 the courts for an injunction against the rate so fixed; but 
 no injunction or interlocutory order shall be issued without 
 a hearing after five days' notice to the Commission. An 
 appeal from the Circuit Court hes directly to the Supreme 
 Court, and preference is given to such cases. No change 
 in rates, even within this maximum, shall be made by the 
 carriers until after thirty days' notice, unless this period is 
 shortened by the Commission. 
 
 § 84. Ordering through routes and rates. 
 
 The EngUsh acts gave to the Railway and Canal Com- 
 mission power to estabhsh through routes and to Parlia- 
 ment, on recommendation of the Board of Trade, power to 
 establish through rates whenever this course was required, 
 in order to create reasonable facilities; but this power was 
 not included in the original Interstate Commerce Act. 
 [60] 
 
Statutory Regulation [ § 85 
 
 The Interstate Commerce Commission had often recom- 
 mended that the power be granted, and this was done in 
 the Hepburn Act. In section 1 of the new Act, it was 
 made the duty of every carrier subject to the provisions of 
 the Act to estabhsh through routes and just and reason- 
 able rates apphcable thereto. In section 15 of the Act it 
 was provided that the Commission may, after hearing on a 
 complaint, establish through routes and joint rates as the 
 maximum to be charged and prescribe the division of such 
 rates, and the terms and conditions under which such 
 through routes shall be operated, when that may be 
 necessary to give effect to any provision of the Act, and 
 the carriers complained of have refused or neglected to 
 voluntarily establish such through routes and joint rates, 
 provided no reasonable or satisfactory through route 
 existed. 
 
 § 85. The problem of the industrial railways. 
 
 Another matter, which was even at that time being 
 considered as leading to abuses which ought to be brought 
 within the power of the Commission to remedy, was the 
 matter of the industrial railways. These are short lines of 
 railway, owned in some connection with the industries 
 which they were primarily designed to serve; either the 
 corporation owning the industry owns the railroad, or its 
 ownership is vested in those who are prominent in it. 
 These railroads are usually operated in pretense at least as 
 common carriers, however improbable it may be that any- 
 one else will want to ship over them. And posing as 
 connecting carriers they have always been accustomed to 
 see that they got a good division as originating carriers 
 out. of the joint rate. But if this tap hne really is a com- 
 mon carrier although the pubUc resorting to it is small, 
 there would seem to be no way to prevent this; but even 
 so the Commission could be given power to pass upon the 
 propriety of the division. If, however, it is really a plant 
 facility it should not have any such standing whatsoever to 
 
 [61] 
 
§§ 86, 87 ] Railroad Rate Regulation 
 
 get what would virtually be a rebate, if it went beyond a 
 switching allowance, duly sanctioned by the Commission 
 and made to all shippers furnishing such facihties. It 
 will be seen, therefore, that by getting powers over divi- 
 sions and allowances the Commission in 1906 got a meas- 
 xire of control over the situation as a whole. 
 
 Topic E, The Elaboration of its Powers 
 
 § 86. The Mann Act of 1910. 
 
 By the Mann Act of 1910 a number of amendments 
 of great importance were made to the Act to Regulate 
 Commerce, whereby the jurisdiction of the Commission 
 was extended into new fields and its powers over the com- 
 panies subject to its jurisdiction strengthened. Telephone 
 and telegraph companies, whether wire or wireless, were 
 put under the power of the Commission so far as Congress 
 could constitutionally extend jurisdiction. The fourth 
 section of the Act relating to the long and short haul was 
 changed so as to put an end to the controversy. The 
 power over through rates was made positive, the whole 
 matter belonging to the Commission subject to certain pro- 
 visos. The power of the Commission over rates and sched- 
 ules was made more extensive. In particular the Com- 
 mission was given power to suspend advances in rates 
 pending investigation thereof. There were other amend- 
 ments of less importance, such as change in the require- 
 ments as to annual reports and further powers over ac- 
 counts consequent thereon. 
 
 § 87. The new long and short haul clause. 
 
 The controversy which began a generation ago as to the 
 true meaning of the long and short haul clause was finally 
 settled by this legislation by cutting out the clause con- 
 cerning similar circumstances and conditions, by virtue 
 of which the courts had practically nullified the statute, 
 and unequivocally making it unlawful for any common 
 carrier subject to the provisions of this Act to charge or 
 [62] 
 
Statutory Regulation [ § 88 
 
 receive any greater compensation in the aggregate for 
 transportation for a shorter than for a longer distance over 
 the same line in the same direction, the shorter being 
 included within the longer distance. The Commission 
 was confirmed in its jurisdiction to authorize carriers to 
 make charges which would otherwise be in violation of 
 this section, by acting upon applications from time to 
 time and thereupon determining the extent to which a 
 designated common carrier might be relieved from the 
 operation of the section It was provided as a temporary 
 measure that rates lawfully in effect at the time of the 
 passage of the Act might be kept in force provided appli- 
 cations under the section covering them had been duly 
 filed; and this situation has not altogether been cleared 
 up at present. 
 
 § 88. Establishment of through routes. 
 
 The limitations which the Supreme Court had found 
 in the power of the Commission, to establish through 
 routes only when no satisfactory through route existed 
 as the courts themselves viewed the evidence, was elimi- 
 nated by making the clause read so that the Commission, 
 in its own discretion as to the necessity therefor, might 
 act at any time in this matter after hearing, whenever the 
 carriers had failed to establish joint rates themselves. 
 However, a raUroad was protected against being short- 
 hauled by an explicit clause to the effect that, in estabhsh- 
 ing such through route, the Commission shall not require 
 any company, without its consent, to embrace in such 
 route substantially less than the entire length of its rail- 
 road and of any intermediate railroad operated in con- 
 junction and under a conunon management or control 
 therewith, which lies between the termini of such pro- 
 posed through routes, unless to do so would make such 
 through route unreasonably long as compared with an- 
 other practicable through route which could otherwise be 
 established. 
 
 [63] 
 
§§ 89, 90 ] Railroad Rate Regulation 
 
 § 89. Suspension of rate advances. 
 
 Perhaps the most consequential change in the Act was 
 the provision giving the Commission special powers in the 
 case of new schedules filed with it. The Commission may 
 thereupon, either upon complaint or upon its own initiative, 
 without complaint at once and, if it so orders, without 
 answer being filed by the interested carriers provided they 
 have had reasonable notice, enter upon a hearing con- 
 cerning the propriety of the change proposed. Pending 
 hearing and decision thereon, the Commission may by 
 simply deUvering to the carriers the reasons for taking 
 action suspend the operation of such schedule for four 
 months beyond the time when it would otherwise go into 
 effect; and if the hearing is not completed the time may 
 be fiu-ther extended for a period not exceeding six months. 
 After fuU hearing, whether completed before or after the 
 rate goes into effect, the Commission may make such 
 order as Hes within its jurisdiction over rates. At any 
 hearing involving a rate sought to be' increased after the 
 passage of the Act of 1910 the burden of proof to show 
 that the increased rate or proposed increased rates is just 
 and reasonable shall be upon the common carriers, and 
 the Commission shall give to the hearing and decision of 
 such questions preference over all other questions pending 
 before it, and decide the same as speedily as possible. 
 
 § 90. The Hadley Commission. 
 
 Furthermore the Mann Act provided for the appoint- 
 ment by the President of a special commission to investi- 
 gate questions pertaining to the issuance of stocks and 
 bonds by carriers subject to the Act, and the power of 
 Congress to regulate the same. The Commission was 
 authorized to employ experts and assistants, and the 
 several departments and bureaus of the Government were 
 to furnish it officials and employees specially detailed 
 to this work. The Commission as constituted by the 
 President, cdme to be known as the Hadley Commission 
 [64] 
 
Statutory Regulation [ §§ 91, 92 
 
 by reason of the prominence in it of President Hadley 
 of Yale University. It made a report setting forth the 
 practices of the American States in regard to regulating the 
 issuance of securities; and in general advised against any leg- 
 islation by Congress involving regulation by its authority. 
 
 § 91. The Commerce Court. 
 
 The legislation of 1910 also provided for the establish- 
 ment of a commerce court, composed of five circuit judges, 
 appointed thereto, and thereafter assigned for that service. 
 This court was to have the jurisdiction formerly possessed 
 by the circuit courts over cases for the enforcement of any 
 order of the Commission except for the payment of money, 
 and as thus limited it had no functions over forfeitures 
 and penalties. It was thought that there would be an 
 advantage in securing the prompt decision of the funda- 
 mental questions of traffic law, but in the actual result 
 the decisions seemed to point out in a way which had 
 not perhaps been anticipated the jurisdictional limitations 
 upon Conmiission action, both constitutional and statu- 
 tory. That these points, generally speaking, were well 
 taken, would undoubtedly be the opinion of most lawyers; 
 but the pohcy of the court in holding the Commission to 
 the limits of the law was hardly popular. At all events, 
 by the Urgent Deficiency Act of 1913, the commerce 
 court was abolished, and the jurisdiction of the several 
 courts restored to what it was before. 
 
 § 92. The Panama Act. 
 
 Included in the Panama Act of 1912 were various 
 clauses of great importance in extending the power of the 
 Commission over transportation by water, although the 
 commerce moving wholly by water is still excluded from 
 the jurisdiction of the Commission. The sections referred 
 to provide that where property is being transported from 
 point to point in the United States by rail and water the 
 Commission shall have jurisdiction: (a) To establish physi- 
 5 [65] 
 
§ 93 ] Railroad Rate Regulation 
 
 cal connection by spur tracks between the lines of a rail 
 carrier and the docks of a water carrier, whenever such 
 connection is practicable and the amount of business 
 offered is sufficient to justify it; (b) to establish through 
 routes and maximum joint rates between and over such 
 rail and water lines, and to determine all the terms and 
 conditions under which such lines shall be operated in the 
 handling of the traffic embraced; (c) to establish maxi- 
 mum proportional rates by rail to and from the ports 
 to which the traffic is brought, or from which it is taken 
 by the water carrier, and to determine to what traffic and 
 in connection with what vessels and upon what terms and 
 conditions such rates shall apply; (d) if any rail carrier 
 subject to the Act to Regulate Commerce enters into ar- 
 rangements with any water carrier operating from a port 
 in the United States to a foreign country, for the handling 
 of through business between interior points of the United 
 States and such foreign country, the Commission may re- 
 quire such railway to enter into similar arrangements with 
 any or all other lines of steamships operating from said 
 port to the same foreign country. 
 
 § 93. The Valuation Act. 
 
 By another amendment of the Interstate Commerce Act 
 of 1913, the Commission was directed to proceed forthwith 
 to investigate and ascertain the value of all the property 
 owned or used by every common carrier subject to its 
 jurisdiction. Every fact of any sort relating to the prop- 
 erties of the carrier at any time in their existence which 
 might be pertinent is demanded specially; not only the 
 original cost, as nearly as that can be ascertained, but the 
 present value as exactly as that can be appraised. Nor 
 is Congress contented with this determination of actual 
 conditions, past and present, so far as by human assiduity 
 and ingenuity the past can be unravelled and the present 
 be estimated. The Commission is asked further what it 
 would cost to reproduce these properties new at the pres- 
 [ 66 ] 
 
Statutory Regulation [ § 94 
 
 ent time, and what figure would be set upon them if 
 from the estimated cost of reproduction were deducted 
 their indicated depreciation in their present state. And 
 then follow other questions as to past operations and pres- 
 ent conditions of still more difficulty, designed to meet 
 problems of valuation which are bothering even those 
 most conversant with these matters. The Commission 
 is not merely asked to collect all this data and make all 
 these appraisals as to things tangible and intangible, 
 actual and hypothetical. It is told to classify all these 
 things and make comparisons between them, and to state 
 the reasons of these differences and the basis of these values. 
 
 Topic F. Recent Decisions Defining Jurisdiction 
 
 § 94. The Abilene Oil case. 
 
 During the past few years there have been a succession 
 of cases fixing limitations upon the jurisdiction of the Com- 
 mission within the powers now conferred upon it by the 
 Act. Of course, these leading cases receive appropriate 
 treatment in later chapters in their proper place; but there 
 are a few of them which have such a part in the history 
 of the development of the functions intrusted by Congress 
 to the Commission as to make it fitting that they should 
 receive mention here. It is now realized that in regard 
 to the whole field of the determination of the reasonable- 
 ness of the rates the provisions which Congress has made 
 show plainly enough that the jurisdiction of the Com- 
 mission is designed to be exclusive, and the end of trial 
 of such matters before any other tribunal, — otherwise 
 than by recourse to the proper court, to set the order of 
 the Commission aside as in excess of jurisdiction. How 
 far the courts will go in working out such intent is seen 
 in the leading case of Texas & Pacific Railway v. Abilene 
 Cotton Oil Company,^* where it was held that, as to 
 wrongs done shippers for which redress was provided by 
 the processes of the Comnaission, no suit could be brought 
 i« 204 U. S. 426, 51 L. ed. 553, 27 Sup. Ct. 350 (1907). 
 
 [67] 
 
§ 95 ] Railroad Rate Regulation 
 
 elsewhere in any court. If a shipper is ready to prove 
 that the rate charged him was outrageously high he can 
 no longer, as formerly, litigate the matter in the courts, 
 and show that the estabhshed rate is unreasonable. He 
 must go to the Commission to get the scheduled rate 
 set aside, and reparation awarded him for the extortion. 
 Indeed, the theory is that the scheduled rate is the only 
 legal rate until thus altered; and this has had the startling 
 result of compelling shippers to pay the scheduled rate, 
 even when a lower rate was quoted them. Whatever is 
 duly confided to the jurisdiction of the Conmiission is thus 
 automatically withdrawn from the cognizance of the courts 
 as an original question. 
 
 § 96. The Proctor Gamble case. 
 
 It has only recently been pointed out that there is no 
 appeal when the Commission dismisses by an adverse 
 decision a shipper who is complaining that rates charged 
 him are more than he should be obHged to pay. To be 
 sure, where a carrier is subjected to regulation to the extent 
 of being obliged to serve at less than a fair return, it is 
 being subjected to unconstitutional deprivations. But 
 unlike the carrier who must serve all at the rate established 
 by law, the shipper is not obliged to ship unless he wishes, 
 and his property is not therefore taken from him by 
 compulsory process ia the view of the law. This doctrine 
 that, whereas a carrier has constitutional rights to attack 
 the decision of a commission, the shipper only has such 
 statutory rights as may be provided, is shown in the recent 
 case of Proctor Gamble & Co. v. United States." That 
 case held that, as the system of procedure provided by the 
 Interstate Commerce Act contained no provision for ap- 
 peal by a party whose complaint had been dismissed by 
 the Interstate Commerce Commission, he had no right 
 whatever, as he had no basis for recourse to the courts 
 upon the ground that he could not earn a livelihood ship- 
 
 " 225 U. S. 282, 56 L. ed. 1478, 32 Sup. Ct. 761. 
 [68] 
 
Statutory Regulation [ §§ 96, 97 
 
 ping at the rates upon the existing basis. This decision 
 is quite consistent with the theory of administration under- 
 lying our system at present. If the body duly charged 
 with seeing that only such rates are charged as are reason- 
 able decides that the interests of the pubUc are protected, 
 why should anybody have any standing to go to the 
 courts about it any more than for any other difference 
 of opinion as to matters of government? 
 
 § 96. The Williamette Valley case. 
 
 The significance of the limitations in the Act as amended 
 in 1906 was probably not brought to the attention of the 
 country until the case of the Southern Pacific v. Inter- 
 state Commerce Commission.^* The Commission, as it 
 appeared in that case, had come to the rescue of the lumber 
 industry of the Williamette valley, which was threatened 
 by advances in rates which had been put into effect 
 shortly before. At all events, it had after due proceedings 
 fixed lower rates for the future in place of the new rates, 
 apparently upon the ground that it would be a wise pohcy 
 to keep open the markets which had thus been closed. 
 The earlier rates undoubtedly had thus created markets 
 upon which the shippers had come to rely; but, as the 
 Supreme Court pointed out, all these arguments ignored 
 the provisions of the Act. In the absence of a finding that 
 the advanced rates which carriers had put in effect were 
 imreasonable, the Conmaission had no jurisdiction to go 
 further; and this was not made out by showing that pubhc 
 interests would be promoted by lower rates. Such argu- 
 ments might sometimes avail carriers in explaining differ- 
 entials; but they could not justify the Conamissions in order- 
 ing changes. 
 
 § 97. The Lemon Rates case. 
 
 Thus stands at present the jurisdiction of the Interstate 
 Commerce Commission over rates. Under the Act the 
 
 "219 U. S. 433, 56 L. ed. 308, 31 Sup. Ct. 288. 
 
 [69] 
 
§ 98 ] Railroad Rate Regulation 
 
 carrier retains the primary right to make rates; but if, 
 after hearing, they are shown to be mireasonable, the Com- 
 mission may set them aside and fix for the futm-e that 
 rate which it regards as reasonable. Therefore, unless there 
 is evidence before the Commission to show that the rates 
 attacked were unreasonable, there is no jurisdiction to pro- 
 ceed further. What is a reasonable rate is a matter as to 
 which our modern law has some ideas, although they are 
 by no means as clear as they soon wiU be with the develop- 
 ment now going on so rapidly in this branch of the law. 
 We are at a point where progress can at least be made in 
 this matter, with the famous case of Interstate Com- 
 merce Commission v. Atchison, Topeka & Santa Fe Railway 
 at last brought to a termination by the late affirmation 
 of the Supreme Court." This matter of the Lemon rates 
 from the Pacific coast has been going back and forth be- 
 tween the Commission and the courts for some time. 
 First, the Commission reduced the rates for reasons in 
 last analysis more economic than legal; and this order the 
 Commerce Court set aside, as the existing rate had not 
 been sufficiently shown to be unreasonable in the sense of 
 the law. Then the Commission took further testimony, 
 making at least a showing sufficient to justify it in declar- 
 ing the existing rates unreasonable, and substituted new 
 rates; and the federal court then held in effect that what- 
 ever motive might be behind this action there was reason 
 enough apparent in the record for the course it had pur- 
 sued. And indeed this final action is good administra- 
 tion, quite in accordance with the distinction between the 
 motives for taking action at a particular time and the basis 
 upon which that action is taken. 
 
 § 98. The Baltimore & Ohio case. 
 
 Moreover, a carrier does not have the hearing which 
 the Act makes prerequisite imless he knows what evidence 
 is offered or considered, and is given opportunity to ex- 
 
 » 231 U.S. 736, 34 Sup. Ct. 316. 
 
 [70] 
 
Statutory Regulation [ § 99 
 
 plain and refute it. This is not merely a matter of proper 
 construction of the Act, it is a right which comes from the 
 Constitution itself. This argument was brought out fully 
 in the Supreme Court recently where the contention was 
 made that the findings and orders of the Commission under 
 section 15 might be originally supported and subsequently 
 defended by information which the Commission had gath- 
 ered under section 12 for general purposes. But the Su- 
 preme Court would have none of this where the rights of 
 parties were involved. When the point was raised appar- 
 ently for the first time in United States v. Baltimore & 
 Ohio Southwestern Railroad,^" there was no question about 
 the attitude of the Supreme Court. The Supreme Court 
 is now plainly insistent that all parties before the Com- 
 mission in any proceedings directed against them must 
 be fully apprised of the evidence submitted or to be con- 
 sidered and must be given opportunity to cross-examine 
 witnesses and to inspect documents and to offer evidence 
 in explanation and rebuttal. In no other way consistently 
 with what we consider the course of the administration of 
 justice can a party maintain its rights or make out its 
 defense. Moreover, as the Supreme Court has keenly 
 appreciated, in no other way can the courts inquire as to 
 the existence of evidence upon which the finding might 
 be based; for otherwise, even though it appeared that the 
 order was without evidence, the manifest deficiency could 
 always be explained on the theory that the Commission 
 had before it extraneous, unknown but presumptively 
 sufficient, information to support the finding. 
 
 § 99. The Minnesota Rate case. 
 
 When we come to deal with the constitutional complica- 
 tions due to our federal government, too wide a field is 
 opened for anything but reference here. But such a 
 decision as Simpson v. Shepard^' goes far toward making 
 
 »226 U. S. 14, 57 L. ed. 104, 33 "230 U. S. 352, 57 L. ed. 1511, 
 
 Sup. Ct. 5. 33 Sup. Ct. 729. 
 
 [71] 
 
§ 100] Railroad Rate Regulation 
 
 it possible to get at the principles involved. In this 
 Minnesota Rate case it was laid down that for normal 
 cases the rule was as simple as that there should be federal 
 regulation for interstate rates and State regulation for 
 intrastate rates. The rule may be simple, but its applica- 
 tion is accompanied by so many computations based upon 
 assumptions beyond the possibilities of proof as to make it 
 all but impracticable. However, as the Supreme Court 
 points out, whenever Congress judges that the proper 
 regulation of interstate commerce requires that a federal 
 Commission shaU have power also over the intrastate rates, 
 by such express legislation the interstate commission may 
 be given exclusive jurisdiction over the rate situation. 
 Until that time comes, there is no implication from the 
 establishing of the jurisdiction of the Commission over 
 interstate rates sufficient to take from the States the 
 power to fix intrastate rates by such means as they may 
 choose to employ. 
 
 § 100. The Shreveport case. 
 
 In view of the strong dictum in the case just discussed it 
 is not at all surprising that the federal courts have still 
 more recently held that when rates established by a State 
 commission directly interfered with the rate system estab- 
 lished for the whole region, it may come in conflict with 
 the federal jurisdiction as it stands to-day without further 
 legislation by Congress. In the recent case known as 
 the Shreveport Rate Case,^^ the Supreme Court of the 
 United States held that the Commission has power 
 in effect to control rates maintained by the carrier in 
 strictly intrastate transportation by insisting that such 
 rates shall keep in line with the interstate structure. It 
 was seen that to deprive Congress of this power would 
 be to permit a State to place a burden upon interstate 
 commerce, the very harm sought to be remedied by the 
 commerce clause. The decision is significant in that the 
 
 " Houston, E. & W. T. Ry. v. United States, 234 U. S. 342, 34 Sup. Ct. 833. 
 
 [72] 
 
Statutory Regulation [ § 101 
 
 court has at last openly acknowledged the principle that 
 Congress has the power to reach into and touch the internal 
 affairs of a State without resorting to the refinement of 
 designating such action a regulation of interstate commerce. 
 
 § 101. The Intermountain case. 
 
 Nothing is more difficult to bring within these require- 
 ments than the issues raised in the Intermountain Case 
 which has recently been decided by the Supreme Court, 
 There is long history back of the case which has already 
 been sunmiarized in brief compass. Under Section 4, as it 
 originally stood, the United States Supreme Court held 
 that competition existing at the distant point while there 
 was no competition at the intermediate point constituted 
 .a circumstance so dissimilar as to justify charging more for 
 the short haul than for the long without getting permission 
 from the Commission. As amended in 1910, jurisdiction 
 to pass upon those cases where the carrier was charging 
 more for the short haul than for the longer distance was 
 unequivocally conferred upon the Commission. The 
 Commission thereupon made some general orders as to the 
 relation to be observed between the Intermountain rates 
 and those to the Pacific coast. The railroads then con- 
 tended that this is going beyond limits of the administrative 
 function into the realm of arbitrary power. Whether this 
 is so or not depends upon whether the Commission may 
 be said to be basing its action upon principles of law 
 appUcable to the case. We cannot leave -to a commission, 
 any more than to the railroad itself, the power to build up 
 cormnunities or destroy them at its own whim or caprice. 
 We must have here as elsewhere principles of law as to 
 what things in the movement of traffic are of such weight 
 as to determine the reasonableness of the rate charged. 
 However, as to this particular matter it seems to be the 
 opinion of the Supreme Court, ^' that, when competition is 
 found in cases like these, the rate may be reduced suf- 
 
 " United States v. Atchison, T. & S. F. Ry., 234 U. S. 476, 34 Sup. Ct. 986. 
 
 [73] 
 
§ 102 ] Railroad Rate Regulation 
 
 ficiently to meet it, has been so incorporated into the law 
 governing this situation that all that is left to the Com- 
 mission to do is to permit such reductions wherever it 
 finds competition thus acting. 
 
 § 102. The Pipe Line case. 
 
 One other constitutional hmitation upon the regulating 
 power should be noted. Regulation of this pecuhar sort, 
 going to the extent of compulsory service, should be con- 
 fined to what may properly be considered public caUings. 
 Unless the business in question is one which is pubhc in 
 character it is not one which it would be due process of 
 law to regulate to the extent of fixing its rates. And im- 
 less in the particular instance the business is being con- 
 ducted upon a public basis, regulation to that extent of 
 what is still a private affair would be equally improper. 
 The business must be one in which the pubhc has an 
 interest, and at the same time one in which the proprietor 
 has committed himself to serve the public. For the 
 legislature to make a general rule appUcable to all con- 
 cerns in certain businesses, or for a commission acting 
 by its authority, to order that the public should be served 
 by any particular company, unless both requisites are 
 present, would seem to deprive the owners and proprietors 
 of their hberty and property. At all events, we shall know 
 more about all this now that we have got the decision in 
 the Pipe Line Cases, ^^ from the Supreme Court. It was of 
 course clear that the operation of pipe Mnes such as are 
 involved in that case is a business which is affected with 
 a pubhc interest. But when proprietors are independent 
 concerns which have never taken anything but their own 
 oil through these lines, they can hardly be said to have 
 put themselves in public service. However, if the pr in?^ 
 cipal dealers in oil are also the proprietors of the only pipe 
 lines, there may be such an interdependence found that 
 it can fairly be said that transportation is going on iinder 
 
 M 234 U. S. 548, 34 Sup. Ct. 956. 
 
 [74] 
 
Statutory Regtjlation [ § 103 
 
 such conditions as to subject the whole matter to the 
 regulation of the government for the protection of other 
 shippers. At all events such is the opinion of the Supreme 
 Court, so far as it can be gathered from the principal case. 
 
 § 103. Inherent limitations upon Commission action. 
 
 We will not be content in our times with the sort of 
 equity which the Chancellor originally evolved from his 
 inner consciousness to deal with each case as it came before 
 him. Still less will any people with the traditions of our 
 race rest imder proceedings of the order of the Star Cham- 
 ber without being confronted with testimony against them. 
 These decisions mean that as a people we will not be con- 
 tent to have our rights determined by administrative fiat; 
 we demand reasoned judgment based upon ascertained 
 principles generally understood. If the Commission is to 
 be held to its function of administering the law, we must 
 have some basis for determining the meaning of the word 
 reasonable used in the Act. The Commission, as it has 
 been seen, can only set aside a rate if it is unreasonable; 
 in its place it can only fix a rate which is reasonable. But 
 how is it to be determined what rates are unreasonable and 
 what change would make them reasonable, unless we have 
 definite principles universally recognized? The Interstate 
 Commerce Commission itseK has made noteworthy prog- 
 ress in the past few years in establishing by its decisions 
 the bases upon which the reasonableness of rates depend as 
 a matter of law. The Supreme Court has also of late 
 years been giving the stamp of its approval to rules for 
 the determination of the reasonableness of rates which 
 seem at last to be practicable. Vague though a phrase in 
 a statute may apparently be, yet it may well have a 
 definite meaning in the law; and by the prevailing rule, 
 when a given phrase has an accepted significance at 
 common law, it should be taken in that sense. We must 
 have some objective standard to go upon, or we have no 
 security from subjective differences. What is reasonable 
 
 [75] 
 
§ 103 ] Railroad Rate Regulation 
 
 according to principles of law governing the matter is what 
 we must insist upon in order to confine our commissions to 
 administration. If we have nothing to rely upon except 
 what seems upon the whole to the body in power desirable 
 or impolitic, we can hope for nothing better than benevo- 
 lent despotism subject to all the corresponding risks of 
 arbitrary power. 
 
 [761 
 
CHAPTER m 
 
 FEDERAL JURISDICTION 
 
 I 110. Provisions of the Act. 
 111. Scope of power conferred. 
 
 ToTpic A. Foreign Commerce 
 § 1 12. Foreign carriers. 
 
 113. Ocean carriers. 
 
 114. Foreign carriers and discriminations. 
 
 115. Inland portion of foreign commerce. 
 
 116. Requisites of port proportionals. 
 
 117. Export and import rates. 
 
 118. Import rates may be regulated by competition. 
 
 119. Export rates regulated by competition. 
 
 120. Foreign competition justifies only necessary differences. 
 
 121. Limitations upon export and import rates. 
 
 Topic B. Interstate Commerce 
 
 § 122. What are considered States? 
 
 123. What constitutes commerce between the States? 
 
 124. Traffic in movement between States. 
 
 125. Termini within a single State routed through another State. 
 
 126. Carriage wholly within a State. 
 
 127. Local carriage when through transportation contemplated. 
 
 128. Beginning and ending of interstate transit. 
 
 129. Precedent and subsequent transportation. 
 
 130. Power to fix rates under the Constitution. 
 
 131. Extent of the federal jurisdiction. 
 
 Topic C. Continuous Carriage under Common Control 
 
 § 132. Existence of common arrangement. 
 
 133. Continuity of interstate shipment. 
 
 134. Relations with water lines. 
 
 135. What constitutes continuous carriage? 
 
 136. Local carrier participating in through carriage. 
 
 137. Intrastate part of interstate movement. 
 
 138. Line of the distinction. 
 
 139. Device to break through shipment. 
 
 140. PubUshing of proportional rates. 
 
 141. Transit privileges under through arrangements. 
 
 [77] 
 
§ 110] Railroad Rate Regulation 
 
 ropic D. Conflict between Federal and State Jurisdiction 
 
 § 142. Power of Congress to regulate. 
 
 143. Effect of action by Congress. 
 
 144. Jurisdiction of State and nation. 
 
 145. Division of jurisdiction normally. 
 
 146. Application of regulating statutes. 
 
 147. Respective powers over service. 
 
 148. Legislation relating to facilities. 
 
 149. State legislation burdening interstate commerce. 
 
 150. Exercise of the federal supervision. 
 
 151. Scope for State police power. 
 
 § 110. Provisions of the Act. 
 
 With due deference to the constitutional limitations 
 upon the federal government, section 1 of the Act gives 
 the Commission jurisdiction over all services which shall 
 be considered and held to be common carriers within the 
 meaning and purpose of this Act, engaged in what is 
 within the definitions of the Act as some form of trans- 
 portation from one State or Territory of the United States 
 or the District of Columbia, to any other State or Terri- 
 tory of the United States or the District of Columbia, or 
 from one place in a Territory to another place in the same 
 Territory, or from any place in the United States to an 
 adjacent foreign country, or from any place in the United 
 States through a foreign country to any other place in the 
 United States, and also to the transportation in hke man- 
 ner of property shipped from any place in the United 
 States to a foreign country and carried, from such place 
 to a port of transshipment, or shipped from a foreign 
 country to any place in the United States and carried to 
 such place from a port of entry either in the United States 
 or an adjacent foreign country: Provided, however, that 
 the provisions of the Act shall not apply to the transporta- 
 tion of passengers or property, or to the receiving, deliver- 
 ing, storage, or handling of property wholly within one 
 State and not shipped to or from a foreign country from 
 or to any State or Territory as aforesaid, nor shall they 
 apply to the transmission of messages by telephone, 
 [78] 
 
Federal Jurisdiction [§111 
 
 telegraph, or cable wholly within one State and not trans- 
 mitted to or from a foreign country from or to any State or 
 Territory as aforesaid. Generally speaking it is the theory 
 of the Act that a service is within the jurisdiction of the 
 Commission only to the extent that its course is a con- 
 tinuous one; but it is furthermore provided in section 7 
 that no carrier subject to the provisions of the Act shall 
 enter into any combination, contract or agreement, ex- 
 pressed or implied, to prevent, by change of time schedule, 
 carriage in different cars, or by other means or devices, 
 the carriage of freights from being continuous from the 
 place of shipment to the place of destination; and no 
 break of bulk, stoppage, or interruption made by such 
 common carrier shall prevent the carriage of freights from 
 being and being treated as one continuous carriage from 
 the place of shipment to the place of destination, unless 
 such break, stoppage, or interruption was made in good 
 faith for some necessary purpose, and without any intent 
 to avoid or unnecessarily interrupt such continuous car- 
 riage or to evade any of the provisions of this Act. 
 
 § 111. Scope of power conferred. 
 
 The entire commerce of the United States, foreign and 
 interstate, is subject to the provisions of the act of Con- 
 gress to regulate commerce; and the full force of the Act 
 appUes to all carriers and all circumstances within the 
 jurisdiction of the Commission.^'' It is intended to and 
 does apply, not only in cases of direct injury to particular 
 individuals or industries, but also in cases involving in- 
 direct injury to the community as a whole.^^ The extent 
 to which this control may go as a practical matter raises 
 many diflBicult questions. Where a road runs through 
 several States, it is quite obvious that, in determining the 
 
 '' Texas & P. R. Co. v. Interstate " Re Export and Domestic Rates 
 
 Commerce Commission, 162 U. S. on Grain, 8 I. C. C. 214. 
 197, 40 L. ed. 940, 16 Sup. Ct. 666, 
 5 Int. Com. Rep. 405. 
 
 [791 
 
§ 112 ] Railroad Rate Regulation 
 
 reasonableness of a rate established by one of the States, 
 the situation of the whole line must be considered. One 
 of two plans must be adopted: If the income of the whole 
 line is taken as a basis of inquiry, then the possibility of 
 the other States fixing a similar rate must be considered; 
 or if, on the other hand, the one rate is considered, its 
 reasonableness must be determined by an examination of 
 the capitalization and income of the road within the 
 particular State. But the complexities of this matter are 
 such that it cannot be inteUigently discussed until the 
 last chapter is reached. 
 
 Topic A. Foreign Commerce 
 
 § 112. Foreign carriers. 
 
 The Commission can, of course, have no jurisdiction over 
 transportation carried on entirely in a foreign country.^' 
 The word "adjacent," as used in the act to modify the 
 words "foreign country," would seem to mean adjacent in 
 the sense of the possibility of substantial continuity of 
 rails. ^* Thus the Commission has held that it has no 
 jurisdiction over rates for transportation wholly in Cana- 
 dian territory.^' And likewise, it has had occasion to 
 decide that it has no jiirisdiction over railroads operating 
 in Mexico.^" But the Commission has said that, as it is 
 given by the Act jurisdiction over traffic moving from a 
 point in the United States to a point in Canada, it may 
 undoubtedly act upon the American carrier to the extent 
 which it has jurisdiction, leaving it doubtful whether it 
 could require American lines to estabUsh and maintain for 
 the future a rate to Canadian points. '^ Therefore, in order 
 to violate the Act, the giving of the rebate or other viola- 
 tion must take place within the United States, since an 
 
 ^ Humbolt S. S. Co. v. W. P. & Y. '» Eagle P. L. Co. v. N. R. of Mex., 
 
 R., 25 I. C. C. 136. 25 I. C. C. 5. 
 
 ™ Lykes S. S. L. v. Commercial " Rates on Soda Ash and Other 
 
 Union, 11 1. C. C. 310. Commodities, 28 I. C. C. 613. 
 
 2» Fullerton L. & S. Co. v. B. B. & 
 B. C. R. R. Co., 25 I. C. C. 376. 
 [80] 
 
Federal Jukisdiction [ § 113 
 
 Act of Congress cannot affect the legality of anything done 
 outside its jurisdiction; and moreover, improper charging 
 outside the United States cannot be punished under the 
 Act.'^ Nor can discrimination between places in Canada 
 in respect to rates applicable in Canada constitute a viola- 
 tion of the Act.^' As to foreign carriers the jurisdiction 
 of the Commission is not to be determined by anything 
 other than the language of Section 1, and its distinguishing 
 between adjacent countries on our continent and carriage 
 beyond our seaboard must be noted.'^ 
 
 § 113. Ocean carriers. 
 
 It is clearly the intent of the Act that the Commission 
 should have no jurisdiction over ocean carriers. It is 
 understood that the ocean rate varies frequently from day 
 to day, depending upon the price of ocean freights; it is a 
 matter of bargain which may become the subject of con- 
 tract. Thus, an ocean carrier established under the laws 
 of Cuba and transporting traffic between Havana and 
 Galveston is not subject to the Act to Regulate Com- 
 merce.'*^ The Commission has, therefore, no direct author- 
 ity to require the issuing of through export bills of lading, 
 since it has no jurisdiction over the water carriers.'^ In- 
 deed, the act provides no machinery by which its provi- 
 sions can be enforced as to trans-Atlantic steamship Unes, 
 and the absence of such provision can be explained only 
 by accepting the interpretation that the Commission has 
 no jurisdiction in the premises; and the pooling of traffic by 
 water carriers is, therefore, a matter over which the Com- 
 mission has no jurisdiction." The distinction should be 
 noted that while the Conamission may regulate interstate 
 traffic, whether by rail or by a combined rail-and-water 
 
 " United States v. Knight, 3 Int. « Lykes S. S. Line v. C. U., 11 
 
 Com. Rep. 801. I. C. C. 310. 
 
 " Cist V. Michigan Central R. R., '« Galveston C. A. v. A., T. & S. F. 
 
 10 Int. Com. Rep. 217. Ry. Co., 25 I. C. C. 216. 
 
 '* Cosmopolitan S. Co. v. H.-A. P. " Cosmopolitan S. Co. v. H.-A. P. 
 
 Co., 11 1. C. C. 266. Co., 11 1. C. C. 266. 
 
 6 [81] 
 
§ 114] Railkoad Rate Regulation 
 
 route, from point of receipt to point of delivery, the 
 Commission in its control over foreign commerce is limited 
 to the regulation of such traffic, whether by railroad or 
 by a combination of rail and water carriers, from and to 
 the point of transshipment, the inland movement of such 
 trafiic being the only matter which the Commission can 
 regulate.^* Although the Commission has no jurisdiction 
 of ocean rates, and must deal with the port differential 
 question as though the ports were destinations instead of 
 gateways, the rates to and from the water carrier are 
 subject to all provisions of the Act.^' The jurisdiction of 
 the Commission over goods going out of a State in course 
 of foreign commerce attaches although it is at first only 
 moving on local bills/" 
 
 § 114. Foreign carriers and discriminations. 
 
 To a certain extent, so far as they may be applied in 
 accordance with the principles fundamental in the conflict 
 of laws, the provisions of the Act apply to foreign as well 
 as domestic common carriers engaged in the transportation 
 of passengers or property, for a continuous carriage or ship- 
 ment from a place in the United States to a place in an 
 adjacent foreign country. The common carriers engaged 
 in such transportation apparently are subject to the 
 provisions of the Act in respect to the printing of schedules 
 of rates, fares, and charges for the traffic they carry, and 
 posting and filing with the Interstate Commerce Commis- 
 sion of copies of such schedules. It was, therefore, early 
 held by the Commission that the Grand Trunk Railway 
 of Canada violated the Act by allowing a rebate on goods 
 shipped from Buffalo to Canadian points. *i But the reg- 
 ulation of the transportation of foreign merchandise from 
 
 ''Aransas Pass Channel & Dock ^"Railroad Commission of La. v. 
 
 Co. V. G. H. & S. A. Ry. Co., 27 Texas & P. Ry., 229 U. S. 336, 57 
 
 I. C. C. 403. L. ed. 1215, 33 Sup. Ct. 9. 
 
 " Chamber of Commerce of New *' Re Grand Trunk Ry., 2 Int. 
 
 York V. N. Y. C. & H. R. R. R. Co., Com. Rep. 496, 3 I. C. C. 89. 
 24 I. C. C. 55. 
 [82] 
 
Federal Jurisdiction [ § 115 
 
 a port of entry to a place within the United States, upon a 
 through bill of lading, does not extend to the control of 
 rates made in the foreign port for its carriage to the port 
 of entry of the United States, or to a foreign country 
 adjacent/" While the Commission must deal with the 
 export and import rate differential question as though the 
 ports were destinations, it may insist that there shall be 
 no discrimination in treatment between the respective 
 ports considered as localities.''^ And, consequently, the 
 Commission will hold a refusal to issue through export bills 
 of lading through one port, while issuing such bills through 
 other ports to be an undue preference.^'' 
 
 § 115. Inland portion of foreign commerce. 
 
 The Act expressly provides that the Commission shall 
 exercise jurisdiction over the inland portion of the haul, 
 either to or from the foreign country; and it must logically 
 and necessarily follow that the rate which must be filed 
 with the Commission under section 6 of the Act is the 
 rate governing such movement. On foreign commerce the 
 rate to be published with the Commission should be the 
 rate to the port and from the port — an open rate, which any 
 who desire to do so may use with equal advantage. ^^ Even 
 that part of a continuous haul from a foreign country 
 which is confined to a rail transportation from a port of 
 entry to a point in the same State is within the jurisdic- 
 tion of the Commission, although the shipment does not 
 move under through billing nor do the water and rail 
 lines operate under any common control or management.^® 
 It has been held that export traffic moving from a point 
 of shipment whether on through or local bills, is subject to 
 
 « Mobile Ch. of Com. v. Mobile & Co. v. G. H. & S. A. Ry. Co., 27 
 
 0. R. R., 23 I. C. C. 417. I. C. C. 403. 
 
 *' New York Bd. of Trade & *' Cosmopolitan Shipping Co. v. 
 
 Transp. v. Pennsylvania R. R., 3 H.-A. P. Co., 11 1. C. C. 266. 
 
 Int. Com. Rep. 417, 4 I. C. C. ■" In re Rates of Louisiana Ry. & 
 
 447. Nav. Co., 22 I. C. C. 558. 
 
 " Aransas Pass Channel & D. 
 
 [83] 
 
§ 116] Eailboad Rate Regulation 
 
 Act.*^ And it has been said that intrastate traffic, moving 
 from a point in a State to a port in the same State for 
 export, is within Act.^^ All this the Commission has 
 reaffirmed recently; and that it is the view of Congress 
 that such traffic is within its jurisdiction seems plain.*- 
 But the Commission has conceded that it has no jurisdic- 
 tion over shipments of vessel-fuel coal, moving from an 
 interior point to a port of the same State, dehvery being 
 made to the vessel at the dock.^" And it has held that 
 cotton billed locally to Philadelphia, and there sorted and 
 rebilled to piers for export should be subject to storage 
 regulations applicable to local traffic received at Philadel- 
 phia." 
 
 § 116. Requisites of port proportionals. 
 
 The export and import rates for traffic moving through 
 the ports should be open rates for all shippers consigning 
 in the same way. But the Conunission has held the re- 
 striction to certain routes of the apphcation of export, 
 rate from Texas to New Orleans not unreasonable.^^ On 
 the other hand it has held that tariffs for import from cer- 
 tain countries through Mobile should be revised so that 
 the reduced rate would include other foreign countries.^' 
 The rate is only applicable to the traffic in question; and 
 therefore where there was no notation on the bill of lading 
 indicating that the shipments were for export, it was held 
 that the domestic rate was properly assessed.^* Railroads 
 consequently have the right to prevent improper apph- 
 cation of import rates by effective means, such as making 
 them apphcable only to traffic stored in bonded ware- 
 
 " Red R. O. Co. v. T. & P. Ry., " DuMee, Son & Co. v. P. R. R. 
 
 23 I. C. C. 438. Co., 19 I. C. C. 575. 
 
 *' Re Wharfage Charges at Galves- " Rates on Cottonseed and its 
 
 ton, 23 I. C. C. 535. Products, 28 I. C. C. 219. 
 
 « Advances on Cotton, 23 I. C. C. " Molasses Rates from Mobile, 28 
 
 404. I. C. C. 666. 
 
 ™ New Pittsburgh Coal Co. v. " Port Arthur R. M. Co. v. T. & 
 
 H. V. Ry. Co., 24 I. C. C. 244. F. S. Ry. Co., 28 I. C. C. 697. 
 [84] 
 
Federal Jurisdiction I § 117 
 
 houses or delivered from ship side.^* But where importers 
 at the port of entry who take manganese ore from the 
 custody of the carrier at ship's side or at the dock, unless 
 it is put in a custom-bonded warehouse, must pay do- 
 mestic rates thereon, while under the existing rates, other 
 parties might grind the ore at certain points and ship it 
 therefrom at the import rates, it was held that this con- 
 stituted an undue preference.*^ And the Commission may 
 require that the railroads give the same milling rate on 
 goods exported, no matter at what point in transit it is 
 done." 
 
 § 117. Export and import rates. 
 
 When the destination of goods shipped or their origi- 
 nating point is outside the country, so that the entire haul 
 comprehends a partial haul within and a partial haul out- 
 side the country, it was at one time urged that there could 
 be no difference in charge between cases where goods 
 were shipped to or from the port, and cases where that 
 was a port of export or import and the haul was only 
 partially within the country. But it is now agreed that 
 the principles governing through rates and local rates 
 should apply to the situation, and that a lower proportion- 
 ate rate may, therefore, be given to the goods designed 
 for export or coming as imports, as compared with goods 
 shipped to or from the port.*^* It should also be pointed 
 out that, while the export rate is ordinarily lower than 
 the domestic rate, this is due to competitive conditions 
 between the ports, and not to the fact that the cost of 
 service in export shipments is less than on domestic ship- 
 ments. ^^ Export or import rates are scheduled and terms 
 thereof must strictly be followed; and, therefore, a railroad 
 
 "Swift & Co. V. B. & O. R. R. ^s National Lumber Exporters' 
 
 Co., 21 1. C. C. 241. Aaso. v. St. L., I. M. & S. Ry. Co., 28 
 
 " In re Advances on Manganese I. C. C. 215. 
 
 Ore, 25 I. C. C. 663. =' National Lumber Exporters' 
 
 " New York C. & H. R. R. R. v. Aeso. v. K. C. S. Ry. Co., 25 I. C. C 
 
 Interstate Com. Com., 168 Fed. 133. 78. 
 
 [85] 
 
§ 118 1 Railroad Rate Regulation 
 
 which had concurred in import rates on burlap was held 
 bound thereby, although there was no agreed division via 
 its line.^" And, likewise, it was necessary to insist in another 
 case that the joint through rate on imported logs from 
 Mobile to Indianapolis is applicable only when the logs 
 move direct to Indianapolis." The situation under discus- 
 sion is the inland charge for traffic moving in foreign com- 
 merce; when a through rate is given to the foreign point 
 these rulings are inapplicable/^ The mere contract of the 
 ship agent with the interior shipper for the shipment of his 
 freight to the foreign destination, usually called an engage- 
 ment, is evidence of the transaction in question.®' 
 
 § 118. Import rates regulated by competition. 
 
 The question was first definitely settled in connection 
 with the New Orleans import rates. The Texas & Pacific 
 Railway Company made in 1892 through rates from Liver- 
 pool and other foreign ports to San Francisco, the carriage 
 being by steamship from Liverpool to New Orleans, and 
 by railway over the lines of the Texas & Pacific Company, 
 in connection with those of the Southern Pacific Company, 
 to San Francisco. The amount of these through rates 
 was less, sometimes not more than one-third of the rates 
 charged by the Texas & Pacific Company for transporting 
 similar traffic from New Orleans to San Francisco. The 
 Texas & Pacific insisted that these through rates were 
 absolutely fixed by water competition and that it must 
 either take the traffic at that figure or abandon it alto- 
 gether. The Commission held that as a matter of law, 
 foreign competition could not be considered, and ordered 
 the Texas & Pacific, and other roads concerned in the same 
 litigation, to desist from allowing the discriminating 
 rate. This order the Texas & Pacific Company refused to 
 
 «" Memphis Freight Bureau v. '^ st_ l & S. F. R. R. v. Burge- 
 
 B. & O. R. R. Co., 24 1. C. C. 543. Forbes Co., 139 S. W. 3. 
 
 "1 Talge Mahogany Co. v. S. Ry. '^ Galveston Commercial Asso. v. 
 
 Co., 25 1. C, C. 44. A., T. & S. F. Ry. Co., 25 1. C. C. 216. 
 [86] 
 
Federal Jurisdiction [ § 119 
 
 obey; the matter was taken to the courts, and finally to 
 the Supreme Court of the United States.^* The Supreme 
 Court reversed the rulmg of the Commission on the point 
 of law. The court held that conditions abroad as well as 
 conditions existing in the United States should be con- 
 sidered; that the interest of the carrier and the consum- 
 ing community as well as the producing community must 
 be taken into account; and that there was no hard and 
 fast rule which prohibited the carrier, in furtherance of its 
 own interest and the interests of its patrons, from accepting 
 a less sxim for the transportation of imported merchandise 
 from the port of entry to an interior point than it charged 
 for the transportation of domestic merchandise between 
 the same points. Regarding the whole charge, from 
 originating point to destination as a single through charge, 
 therefore, there is nothing in the law to prevent the 
 domestic carrier from receiving as his share of the through 
 charge less than his local charge for the same haul.*^ 
 
 § 119. Export rates regulated by competition. 
 
 In the same way it is clear that export rates may be 
 regulated by' competition, and that the inland portion of 
 a through export rate may reasonably be less, in a proper 
 case, than the rate for the same haul when the trafiic 
 terminates at the exporting port. This was thoroughly 
 considered by the Interstate Commerce Commission in 
 the case of Kemble v. Boston & Albany Railroad.^^ In 
 that case it appeared that the inland rate from Chicago 
 to Boston was two cents higher than the rate from Chicago 
 to New York; but the export rate to the two ports was 
 the same. This was managed by allowing a rebate of two 
 cents on goods which after arriving at Boston were actually 
 shipped abroad. The Commission held the practice legal, 
 
 " Texas & Pac. Ry. v. Int. Com. '* See, to the same effect, Mansion 
 Comm., 162 U. S. 197, 40 L. ed. 940, House Assoc, v. London & S. W. Ry., 
 16 Sup. Ct. 666. 9 Ry. & Can. Tr. Cas. 20. 
 
 "8 I.e. Clio. 
 
 [87] 
 
§ 120 ] Railroad Rate Regulation 
 
 Gommissioner Prouty saying: "The ocean freights from 
 Boston and New York are substantially the same. It 
 follows, therefore, that the inland rate must also be the 
 same. It has been decided that a differential of substanti- 
 ally 2 cents per hundred pounds may be properly made on 
 domestic grain against Boston, but if the export rate were 
 2 cents higher to Boston than to New York, no traffic 
 would move through the port of Boston. The object 
 of these two rates, therefore, is to equalize the export 
 rate between the ports of Boston and New York. The 
 export rate to Boston is not in reality a Boston rate at all, 
 but is in essence the inland division of a through rate 
 through that port to foreign ports. That the inland 
 carrier may receive in such case for its division a sum less 
 than the domestic rate has been, as we have just seen, 
 determined by the Supreme Court of the United States; 
 hence the thing accomplished by the making of these two 
 rates is not, as a matter of law, illegal." " 
 
 § 120. Foreign competition justifies only necessary differ- 
 ences. 
 But while foreign competition may be considered in 
 fixing the inland share of the through rate, the difference 
 thus justified between the inland and the export or import 
 rate is only such difference as is necessary to meet the com- 
 petition.** The Supreme Court in Texas & Pacific Rail- 
 way V. Interstate Commerce Commission imder discussion 
 distinctly pointed out that this was a question of fact to 
 be determined in each case, and a question which was 
 
 " For a discussion of competition rail and lake-and-rail export ship- 
 as affecting domestic and export ments from differential territory to 
 lumber rates, see Industrial Lumber Baltimore should not exceed 3 cents 
 Co. V. St. L. W. & G. Ry., 19 I. C. C. per 100 pounds, and to Philadelphia 
 50. 2 cents, on classes and commodities 
 
 " In one proceeding involving ex- other than grain; Chamber of Com- 
 port rates through different ports the meree of New York v. N. Y. C. & 
 Commission was of the opinion that; H. R. R. R. Co., 24 I. C. G. 
 differentials under New York on all- 65. 
 
 [88,] 
 
Federal Jurisdiction [ § 121 
 
 not raised in the actual litigation. The questions whether 
 certain charges were reasonable or otherwise, whether 
 certain discriminations were due or undue, were questions 
 of fact, to be passed upon by the Commission in the hght 
 of all facts duly alleged and supported by competent evi- 
 dence. The mere fact that the disparity between the 
 through and the local rates was considerable did not, of 
 itself, warrant the court in finding that such disparity 
 constituted an undue discrimination; much less did it 
 justify the court in finding that the entire difference be- 
 tween the two rates was undue or unreasonable,— es- 
 pecially as there was no person, firm, or corporation com- 
 plaining that he or they had been aggrieved by such 
 disparity.** 
 
 § 121. Limitations upon export and import rates. 
 
 That foreign business must not be unduly favored at 
 the expense of domestic business has been expressly 
 pointed out by the Interstate Commerce Commission.'^'* 
 "The decision of the United States Supreme Court in 
 Texas & Pacific Railway Company v. Interstate Com- 
 merce Commission, supra, has been understood in some 
 quarters as virtually removing import and export traffic 
 from the jurisdiction of the Commission. Such is not, 
 by any means its scope or effect. That decision simply 
 broadened the power of the Commission in reference to 
 such traffic. If any individual or locality feels itself ag- 
 grieved by the rates made upon export or import, business 
 as compared with domestic business, the Commission has 
 full authority to consider and pass upon that grievance. 
 The propriety, as a matter of fact, of the rates main- 
 tained by the Texas & Pacific Eailway Company has 
 never been upheld by the decision of any tribunal- It has 
 
 " In a later proceeding the Com- foreign port to St. Louis. Memphis 
 
 misaion has pointed out that the Freight Bureau v. B. & O. R. R. Co., 
 
 difference in rates between north 28 I. C. C. 543. 
 
 Atlantic and Gulf ports may be '"Kemble v. Boston & A. R. R., 
 
 equalized in total through rates from 8 I. C. C. Rep. 110, 115. 
 
 [89] 
 
§ 122] RaijLiROad Rate Regulation 
 
 never been decided that that company may transport 
 boots and shoes for the Enghsh manufacturer from New 
 Orleans to San Francisco for one-sixth the amount charged 
 the American manufacturer for the same service, but 
 merely that, in determining whether such rate constitutes 
 an unjust discrimination or an undue preference, the in- 
 terest of the carrier and the consumer should be taken 
 into account as well as that of the producer." It was 
 accordingly held by the Commission, in the case of New 
 York Produce Exchange v. New York Central & H. R. 
 Railroad,'^ that the inland portion of an export rate 
 through New York must be no less than the inland rate 
 from the originating point to New York. Nothing was 
 shown in the case to justify a difference in rates; and it is 
 no doubt the fact that no differential is needed in order 
 to secure shipments for export through New York. 
 
 Topic B. Interstate Commerce 
 
 § 122. What are considered States? 
 
 Commerce between an Indian reservation and other 
 parts of the State in which it is situated is not interstate 
 commerce.^^ But commerce between the District of 
 Columbia and the State of Maryland is interstate, and may 
 constitutionally be so regarded.''^ Thus an electric hne 
 engaging in transportation between Washington, D. C, 
 and Laurel, Md., must file and post its tariffs.'^* Likewise 
 the Commission might establish rates from Oklahoma 
 when it was a territory to the State of Texas." One-way 
 and round-trip fares between Washington, D. C, and 
 Virginia points being found unreasonable, the defendant 
 was required to provide commutation rates from desig- 
 nated stations so long as such rates are maintained from 
 
 " 3 I. C. C. Rep. 138, 2 Int. Com. » Silvester v. C. & S. R. R. of 
 
 Rep. 553. Wash., 22 I. C. C. R. 201. 
 
 " Selkirk v. Stevens, 72 Minn. 335, " Corporation Com. of Oklahoma 
 
 75 N. W. 386, 40 L. H. A. 759. v. A. & S. Ry., 26 I. C. C. 
 
 " Willson V. R. C. R. R., 7 I. C. C. 620. 
 Rep. 83. 
 
 [90] 
 
Federal Jurisdiction [ § 123 
 
 other stations under similar circumstances.'^ And in 
 another case an electric line, operating between Washing- 
 ton, D. C, and Virginia points being held subject to Act, 
 its passenger rates were ordered reduced." The provision 
 of the Act to Regulate Commerce applying to carriers 
 transporting property "from one place in a territory to 
 another place in the same territory," so far as it related 
 to the Territory of Oklahoma, expired by its own force on 
 November 16, 1907, when Oklahoma was admitted as a 
 State.'* And since the admission of Oklahoma as a State 
 the Commission is without power to fix rates to be ob- 
 served in the future within the present limits of that 
 State.'* The Commission at one time refused to take 
 jurisdiction over alleged discrimination in service in 
 Alaska, or to make orders giving relief from the conditions 
 complained of.*" Whereupon mandamus was sought in 
 the courts to compel the Commission to take jurisdiction; 
 and the United States Supreme Court finally held that 
 Alaska was sufficiently within the word "territory" used 
 in the Act.^^ 
 
 § 123. What constitutes commerce between the States? 
 
 The question whether a certain transaction constitutes 
 interstate conmierce must be determined by ascertaining 
 what the real transit is, and whether that traffic is or is 
 not between separate States. The Supreme Court of the 
 United States *^ long ago held that whenever a commodity 
 has begun to move as an article of trade from one State to 
 another, commerce in that commodity between the States 
 
 ™ Bitzer v. W. V. R. R., 24 1. C. C. " Interstate Commerce Commis- 
 
 255. sion v. Humbolt S. S. Co., 224 U. S. 
 
 " BeaU V. W. A. & M. V. Ry., 20 474, 56 L. ed. 308, 32 Sup. Ct. 
 
 I. C. C. 406. 556. 
 
 "Chandler Cotton Oil Co. v. '^The Daniel BaU, 10 WaU. 557, 
 
 F. S. & W. R., 11 1. C. C. 473. 19 L. ed. 999. 
 
 " Haines v. Chicago, R. I. & P. R., . See also No. Carolina R. R. Co. v. 
 
 11 1. C. C. 214. Zachery; 232 U. S. 248, 34 Sup. Ct. 
 
 " Humbolt S. S. Co. v. W. P. & 305. 
 y. R., 19 I. C. G. 105, 
 
 [91] 
 
§ 124] Railroad Rate Regulation 
 
 has commenced, and the fact that several different and 
 mdependent agencies are employed in transporting the 
 commodity, some acting entirely in one State and some 
 acting through two or more States, in no respect affects 
 the character of the transaction. And the United States 
 Supreme Court *^ has very recently held that the Inter- 
 state Commerce Commission had jurisdiction to pass 
 upon the reasonableness of the Denver & Rio Grande 
 Railroad Company's freight rate from Pueblo to Leadville, 
 both in the State of Colorado, on beer received at St. 
 Louis by the Missouri Pacific Railroad Company to be 
 delivered in Leadville, although no through rate or through 
 route had been established, and although the freight was 
 received by the first-named carrier at Pueblo as an in- 
 dependent shipment originating at that point, and was 
 forwarded as an intrastate shipment on a local waybill, 
 where all this was in accordance with a long-continued 
 course of dealing between the two carriers under which 
 they divided the freight according to their local rates, 
 with the knowledge that it had been paid as compensation 
 for the single haul. 
 
 § 124. Traffic in movement between States. 
 
 It follows that, even under the proviso in Section 1 
 of the Act, to the effect that its provisions shall not apply 
 to the transportation of passengers or property wholly 
 within one State and not shipped to or from a foreign 
 country from or to any State or Territory, a carrier par- 
 ticipating in the movement of interstate commerce is not 
 exempted from the Act by the fact that in handling its 
 portion of the haul it operated wholly within one State. 
 It is the essential character, of the commerce, not its mere 
 incidents, that detennine whether or not it is interstate.*^ 
 
 «» Baer Bros. MercantUe Co. v. La. v. Texas & P. Ry., 229 U. S. 336, 
 
 Denver & R. G. Ry. Go., 233 U. S. 57 L. ed. 1215, 33 Sup. Ct. 9. 
 
 479, 34 Sup. Ct. 641. «< Aransas P. C. & D. Co. v. G. H, 
 
 See also Railroad Commission of & S. A. Ry. Co., 27 li C. C. 403, 
 
 [92] 
 
Federal Jurisdiction [ § 125 
 
 And the nature of commerce, not its mere accidents, must 
 determine whether" a shipment is local or foreign.*^ A 
 railroad company whose road lies entirely within the limits 
 of a single State becomes subject to the Act by participat- 
 ing in a through movement of traffic from a point in an- 
 other State to a point in the State within which it is 
 located, although its own service is performed entirely 
 within the latter State.^^ The theory is that the movement 
 of freight from a point in one State to a point in another 
 State by rail must be regarded as an entirety; and every 
 railroad participating in that movement thereby becomes 
 subject to the Act to Regulate Commerce, even though 
 its service is performed entirely within a single State." 
 Interesting questions arise as to transit when a point is at 
 the boundary; and with boundary cities one must often 
 be very exact as to the point of consignment.** But if 
 coal is mined in Kentucky and loaded there by carrier, 
 the fact that it is billed from a point in Tennessee to Ken- 
 tucky does not make it an interstate shipment.*' 
 
 § 125. Termini within a single State routed through an- 
 other State. 
 The Commission has always held that commerce be- 
 tween points in the same State, but which in being car- 
 ried from one place to the other passed through another 
 State, is interstate commerce, and subject to regulation 
 by the provisions of the Act.'" The Commission logically 
 
 '5 Port Arthur Rice MUling Co. v. Int. Com. Rep. 519, 2 I. C. C. 375; 
 
 T. & P. Ry. Co., 28 I. C. C. 697. Milk Producers' Protective Assoc, v. 
 
 8« Baer Bros. MercantUe Co. v. D., L. & W. R. R., 7 I. C. C. Rep. 92; 
 
 Mo. P. R. Co., 11 1. C. C. 329. Wells Higman Co. v. St. L., I. M. 
 
 «• Leonard v. Kansas City S. R. & Si, 18 I. C. C. 175; Wilman & Co. 
 
 Co., 11 1. C. C. 573. V. St. L., I. M. & S. Ry. Co., 22 I. 
 
 »» Texarkana Freight Bureau v. C. C. 405; Bridgeman-Russel Co. v. 
 
 St. L., I. M. & So. Ry., 28 I. C. C. G. N. Exp. Co., 22 I. C. C. R. 573. 
 
 ggg Johnson & Hunt v. St. L., I. M. & S. 
 
 "Louisville & N. R. R. v. Van- Ry. Co., 24 I. C. C. 648; National 
 
 cleave, 110 Ky. 968, 63 S. W. 23. Lumber Exporters & Asso. v. K. C. 
 
 "New Orleans Cotton Exch. v. S. Ry. Co., 25 I. C. C. 78; Baker 
 
 Cincinnati, N. O. & T. P. Ry., 2 Com. Club v. O. W. R. R. & N. Co., 
 
 [93] 
 
§ 125 ] Railroad Rate Regulation 
 
 goes to the length of holding traffic from points of origin 
 in West Virginia to destinations in the same State, neces- 
 sarily passing in transit about 1,500 feet through Kentucky 
 to be subject to its jurisdiction.'^ But recently a petition 
 to establish between two points in same State a through 
 route and joint rate via a circuitous interstate route was 
 properly dismissed.'^ The Commission also considers as 
 within its jurisdiction a shipment between two points in 
 Maine which passes through a portion of the Dominion 
 of Canada.*' At all events it deals on that basis with a 
 "transit rate" used in sense of rate applicable to business 
 originating in United States, going through Mexico, 
 destined to points in United States.'* The decisions of 
 the courts upon these particular questions have been con- 
 flicting, and even at the present day are still apparently 
 inconsistent on different phases of the wider problem. At 
 one time it seemed that such commerce as now under con- 
 sideration would not be held interstate commerce.'^ But 
 there were always cases in the State courts to the con- 
 trary; and comparatively recently this particular point 
 has been decided by the Supreme Court of the United 
 States in favor of the jurisdiction of the federal Commis- 
 sion over such commerce as against the claims of the State 
 commissions.'^ 
 
 25 I. C. G. 281; Board of Trade of 115 Fed. 373; Seawell v. Kansas 
 Winston-Salem v. N. & W. Ry. Co., City, F. S. & M. R. R., 119 Mo. 222, 
 
 26 I. C. C. 146. 24 S. W. 1002, 5 Int. Com. Rep. 262; 
 " West Va. R. Co. v. B. & O. R. R. DiUon v. Erie R. R., 19 N. Y. Misc. 
 
 Co., 26 I. C. C. 622. 116, 43 N. Y. Supp. 320; Railroad 
 
 ^ Haverhill Box Board Co. v. B. & Com. v. Telegraph Co., 113 N. C. 213, 
 
 A. R. R. Co., 28 1. C. C. 336. IBS. E. 389. 
 
 °' American Agricultural Chem. In Ewing v. Leavenworth, 226 
 
 Co. V. B. & A. R. R. Co., 28 I. C. C. U. S. 464, 33 Sup. Ct. 81, State au- 
 
 398. thorities were permitted to tax such 
 
 " Steinfeld & Co. v. I. C. R. R. business. 
 
 Co., 20 I. C. C. R. 12. M Hanley v. Kansas City So. Ry. 
 
 «6 Lehigh Valley R. R. v. Pennsyl- Co., 187 U. S. 617, 47 L. ed. 333, 23 
 
 vania, 145 U. S. 192, 36 L. ed. 672, Sup. Ct. 214; State v. Chicago, S. P., 
 
 12 Sup. Ct. 806, 4 Int. Com. Rep. 87; M. & O. R. R. Co., 40 Minn. 267, 3 
 
 United States v. Lehigh Valley R. R., L. R. A. 238; Sternberger v. Cape 
 
 [94] 
 
Federal Jurisdiction [ § 126 
 
 § 126. Carriage wholly within a State. 
 
 Carriage perfonned wholly within a State is not within 
 the Interstate Commerce Act by expUcit proviso in the 
 Act itseK, and indeed could not well be subjected by the 
 federal government to regulation since it does not con- 
 stitute interstate commerce. Thus it has several times 
 been held by the federal courts that a railroad company 
 whose line is wholly within a single State, and which, 
 although it carries freight destined to points beyond such 
 State, never issues bills of lading to points beyond its 
 own line, receives no freight on through bills of lading, 
 and has no arrangement with other roads for a convention 
 division of charges, or for a common control or manage- 
 ment, it is not within the provision of the Interstate Com- 
 merce Act or similar legislation regulating commerce by 
 railroad.''' A railroad, lying wholly within a State and 
 keeping itself from entangUng concurrences with other 
 railroads, which transports freight, whether coming from 
 within or without the State, solely on local bills of lading, 
 under a special contract limited to its own Une, and without 
 dividing charges with any other carriers or assuming any 
 other obligations to or for them, does not come within the 
 provisions of the Interstate Conunerce Act, and is not botmd 
 to make any report of its business to the Commission.'^ 
 The Commission, consequently, has frequently held that 
 it has no jurisdiction to order any reduction in rates for 
 transportation wholly intrastate.'' And Ukewise when a 
 
 Fear & Y. V. R. R. Co., 29 S. C. 510; v. B. Z. & C. Ry. Co., 81 Fed. 
 
 Delaware & H. C. Co. v. Com. 783. 
 
 (Pa.), 2 Int. Com. Rep. 222. " Compare Mutual Transit Co. v. 
 
 A State Commission has power to United States, 178 Fed. 664, where a 
 
 fix rates of a steamship company ply- carrier was held not to have engaged 
 
 ing on the high seas between two itself with other carriers in interstate 
 
 ports of the State. Wilmington commerce, with lUinois Terminal Co. 
 
 Transp. Co. v. Railroad Commission v. United States, 168 Fed. 46, where 
 
 (Calif.), 137 Pac. 1135; aff. U. S. the facts showed that the traffic was 
 
 Sup. Ct., Feb. 1, 1915. taken on a through basis. 
 
 " United States v. Geddes, 131 '^ See Raikoad Comm. of Ark. v. 
 
 Fed. 452. See also United States St. L. & N. Ark. R. R. Co., 12 1. C. C. 
 
 [95] 
 
§ 127 ] Railkoad Rate Regulation 
 
 discrimination complained of does ndt affect interstate 
 service, the Commission has ruled that it has no juris- 
 diction, unless a preference in that service is directly 
 effected thereby. ^ 
 
 § 127, Local carriage when through transportation con- 
 templated. 
 
 Even though passengers or goods are being carried be- 
 tween two States, a carrier transporting them may never- 
 theless not be engaged in interstate commerce. Though 
 a carrier receives goods directed to a point outside the 
 State, he is not an interstate carrier if he is only to carry 
 within the State, and there dehver to an entirely independ- 
 ent succeeding carrier, with whom he has no common ar- 
 rangement.^ The same rule applies if the carrier receives 
 within the State of destination goods brought from with- 
 out the State by an entirely independent course of com- 
 merce.' So where goods were shipped in New Jersey, 
 directed to a consignee in New York, but carried only to 
 Jersey City and there received by the consignees, the 
 shipment was not considered interstate.* Mere intention 
 on the part of a shipper to export his traffic, unaccom- 
 panied by any circumstance or outward indication that 
 the traffic is in fact for export, is not sufficient to stamp 
 it as foreign commerce.^ It has always been the imder- 
 standing of the Commission that no jurisdiction has 
 been given it over a shipment moving from one point to 
 another in same State, though intended to go beyond 
 the State and subsequently rebilled beyond State.* And, 
 
 233; Pierce Co. v. N. Y. C. & H. R. ' Fort Worth & D. C. Ry. Co. v. 
 
 R., 19 I. C. C. 579; WeUs-Higman Whitehead, 6 Tex. Civ. App. 595, 26 
 
 Co. V. G. R. & I. Ry. Co., 19 I. C. C. S. W. 172. 
 
 487; Roberts Cotton Oil Co. v. I. C. * New Jersey Fruit Exchange v. 
 
 R. R. Co., 21 1. C. C. 248. Central R. R., 2 Int. Com. Rep. 84, 
 
 1 Local Commercial Telephone Ser- 2 I. C. C. 142. 
 
 Vice in Pittsburgh, 27 I. C. C. 622; « Port Arthur Milling Co. v. T. & 
 
 Arkansas FertiUzer Co. v. St. L., I. F. S. Ry. Co., 28 1. C. C. 697. 
 
 M. & S. Ry. Co., 25 I. C. C. 645. « Big Canon Ranch Co. v. G. H. & 
 
 2 Ex parte Koehler, 30 Fed. 867. S. A. Ry. Co., 20 1. C. C. R. 523. 
 
 [96] 
 
Federal Jurisdiction [ § 128 
 
 indeed, a movement in fact interstate has been held by 
 intervening possession of an independent sort to have been 
 converted into two local movements.^ 
 
 § 128. Beginning and ending of interstate transit. 
 
 On the principles already examined, if the transit is a 
 single unit, continuing from the time of the original ship- 
 ment to the ultimate end of the carriage, with the begin- 
 ning and ending in different States, the entire transit from 
 beginning to end is regarded as interstate; it does not 
 cease to be interstate when the goods finally enter the 
 State of destination, but continues an interstate transit 
 even within that State until delivery.* Indeed, under the 
 Act, it appears that it was the purpose of Congress to 
 assume jurisdiction over the entire subject matter relative 
 to interstate shipments, from the time of the origia of 
 such shipment down to the point where the shipment is 
 entirely at an end, and its character as a transaction of 
 interstate commerce ceases.' On the other hand, the 
 movement of a shipment between points in a State, and a 
 subsequent movement out of the State, is as to the first 
 shipment not interstate commerce, where there is nothing 
 to connect the two shipments, whether in the billing or 
 the charges imposed.'" And correspondingly where goods 
 which had been consigned to one point within a State 
 were afterwards sold and forwarded to another point, the 
 final movement is intrastate commerce and subject to the 
 rates estabhshed by the State commission." There is no 
 arrangement for a continuous carriage or shipment from 
 one State to another between a carrier by railroad and a 
 
 ' Southwestern Shippers' Traffic & S. F. R. R. Co. v. State, 26 Okla. 
 
 Asso. V. A., T. & S. F. Ry. Co., 24 62, 72, 107 Pac. 929. 
 I. C. C. 570. '» Johnson v. M. St. P. & S. S. M. 
 
 8 Cattle Raisers' Assoc, v. F. W. & Ry. Co., 22 I. C. C. 255. 
 D. C. Ry., 7 I. C. C. Rep. 513. See " Acme Cement Co. v. C. & A. 
 
 ako State v. Southern P. Ry. (Tex. R. R., 17 I. C. C. 220. See also Gulf, 
 
 Civ. App.), 49 S. W. 252. C. & S. F. Ry. Co. v. Texas, 204 
 
 » Pittsburgh Vein Operators v. Pa. U. S. 403, 51 L. ed. 540, 27 Sup. Ct. 
 
 Co., 24 I. C. C. 280. See also St. L. 360. 
 
 7 [97] 
 
§ 129 ] Railroad Rate Regulation 
 
 carrier by water not subject to the Act when shipments 
 by railroad entirely within one State are consigned in care 
 of a carrier by water, which acts as agent of the consignee 
 at a port in that State, and the carrier by water trans- 
 ports these consignments to a point in another State, such 
 ultunate destination not appearing in the rail carrier's 
 bill of lading.i^ So where goods are shipped in one State, 
 directed to a consignee in another, but carried only to the 
 State line, and there received by the consignees, the ship- 
 ment is not interstate.^' 
 
 § 129. Precedent and subsequent transportation. 
 
 A mere switching company which transfers goods from 
 one carrier to another within the State, entirely without 
 reference to their final destination, is not engaged in 
 interstate commerce, whatever the destination of the 
 goods." This is true whether the switching is before or 
 after loading, so long as the goods have not as yet been 
 put in course of interstate shipment.^^ But it seems clear 
 that the extent to which deliveries of goods billed through 
 in carload lots should be made by switching cars upon 
 sidings can be made the subject of orders by the Commis- 
 sion, i" And where a railroad system engaged in interstate 
 commerce controls through stock ownership a wharf 
 company, which has been chartered for the purpose of 
 furnishing terminal facilities, the conduct of such a ter- 
 minal is subject to the jurisdiction of the Commission." 
 The distinction taken by the Commission seems to be that 
 undoubtedly the practices of the carrier regarding delivery 
 are within control of Commission, but where the handling 
 
 12 Re Transportation by the C. & Larrabee Flour Mills, 211 U. S. 612, 
 
 O., 21 1. C. C. 207. 53 L. ed. 352, 29 Sup. Ct. 696. 
 
 " United States v. C, K. & S. R. R. *° Interstate Commerce Gommis- 
 
 Co., 81 Fed. 783. sion v. Atchison, T. & S. F. Ry., 234 
 
 "Kentucky & I. Bridge Go. v. U. S. 294, 34 Sup. Gt. 814. 
 
 L. & N. R. R., 37 Fed. 567, 2 L. R. A. " Southern Pac. Terminal Co. v. 
 
 289, 2 Int. Com. Rep. 102. Int. Com. Gomm., 219 U. S. 498, 31 
 
 " Missouri Pacific R. R. Go. v. Sup. Gt. 279. 
 
 [98] 
 
Federal Jurisdiction [ § 130 
 
 follows delivery to the shipper the Commission is without 
 power. ^* Therefore, so far as the carrier has assmned 
 delivery by switch, the Commission will entertain such 
 questions as whether the defendant carrier should not be 
 required to embrace complainants' mills within the switch- 
 ing limits of Portland, Oregon, though not located within 
 the city of Portland. ^^ Where the transportation in ques- 
 tion is plainly disconnected from the interstate transporta- 
 tion it is not difficult to declare the movement altogether 
 intrastate. Thus the cab service from a railroad station, 
 even when operated under the auspices of the railroad 
 itself, is wholly subject to local regulation.^" So a common 
 carrier engaged in transferring passengers and baggage 
 between railroad stations and between such stations and 
 hotels and private residences, though performing a service 
 connected with interstate passenger traffic, is nevertheless 
 not subject to the provisions of the Act.^' 
 
 § 130. Power to fix rates under the Constitution. 
 
 The power of Congress either directly or through a 
 commission to fix the rates of carriers in interstate car- 
 riage was formerly but not recently doubted. It would have 
 been extraordinary if such power were not granted by the 
 Constitution. We have seen that the power existed at 
 common law, and was exercised in England before the 
 Revolution, as well as in the States. At the time of the 
 adoption of the Constitution the power was lodged in the 
 States. It is a maxim of constitutional law that all 
 power not granted to the United States in the Constitu- 
 tion remains in the States; the Constitution of the United 
 States was a power-conferring, not a power-destroying 
 document.^'' But nothing can be clearer than that the 
 
 " Cosby V. R. T. Co., 23 I. C. C. U. S. 21, 48 L. ed. 325, 24 Sup. Ct. 
 
 72, 77. 202. 
 
 " Portland Lumber Co. v. O. W. " Anacostia Citizens Asso. v. B. & 
 
 R. R. & N. Co., 21 1. C. C. 292. O. R. R. Co., 25 I. C. C. 411. 
 
 ™ New York ex rel. v. Knight, 192 " That the Congress may em- 
 
 [99] 
 
§ 131 ] Railroad Rate Regulation 
 
 right of fixing rates for interstate commerce is no longer 
 in the States; a fixing of rates by legislation or commission 
 would be a regulation of interstate commerce, which 
 Congress alone has power to regulate. It would seem to 
 follow without possibility of doubt that the power which 
 was taken away from the States by the Constitution, be- 
 cause it was a power to regulate commerce, was at the 
 same time conferred, as such power, on the Congress.^* 
 
 § 131. Extent of the federal jurisdiction. 
 
 Sometimes it is said that only the federal government 
 has power over interstate matters, and that the States 
 alone have any concern with intrastate matters. But it 
 has always been discovered when it came to the test, that 
 in the traffic movements of railroad companies performing 
 both interstate and intrastate service, there are inextri- 
 cable complications in any entire separation.^* By the 
 better view when the matter is common ground the State 
 will not be kept from the field unless action by the nation 
 has inclosed it. But even so there is the question as to 
 what may fairly be considered as offering scope for regula- 
 tion by either the State or the nation. The decisions as to 
 rates and as to service notably differ in this regard. It 
 seems to be agreed that in respect to rates neither can 
 consider the earnings appropriate to the other, but that in 
 ordering facilities either can consider the business of the 
 
 power a Commission to fix rates for out that the railroad commission of a 
 
 carriage between the States has long State had in a case where Congress 
 
 since been assumed, but of course in had not acted, no more than in any 
 
 fixing rates due process of law must other case, no authority which could 
 
 be observed; and no one shall be constitutionally be given it to fix a 
 
 deprived of life, liberty or property part of a through rate for a transit 
 
 in defiance of the guaranties of the which was essentially interstate. 
 
 Constitution. Louisville & N. R. R. " See Smyth v. Ames, 169 U. S. 
 
 V. Interstate Commerce Commission, 466, 42 L. ed. 89, 18 Sup. Ct. 418. 
 
 195 Fed. 541 (1912). And see the Minnesota Rate Cases, 
 
 ^ In Raikoad Commission of Ohio 230 U. S. 352, 57 L. ed. 1511, 33 
 
 V. Worthington, 225 U. S. 101, 32 Sup. Ct. 729, discussed fully in the 
 
 Sup, Ct. 653 (1912), it was pointed last chapter. 
 
 [100] 
 
t ... ! 
 
 Federal Jurisdiction^ /^ [| 132 
 
 other. '^ The further discussion of these matters is post- 
 poned until the last chapter, where these rules are con- 
 sidered in detail. 
 
 Topic C. Continuous Carriage under Common Control 
 
 § 132. Existence of common arrangement. 
 
 When goods are shipped under a through bill of lading 
 from a point in one State to a point in another, and are 
 taken by a State common carrier under a conventional 
 division of the charges, such carrier must be deemed to 
 have subjected its road to an arrangement for a continu- 
 ous carriage or shipment within the meaning of the law.^* 
 The through billing and rating is the usual but by no 
 means the only method of manifesting a common arrange- 
 ment.^^ In the case of carriage of passengers a similar 
 interpretation will be made; assent by a carrier to the 
 issue of a through ticket over several railroads constitutes 
 an arrangement for continuous carriage.^* Where, there- 
 fore, a local carrier takes part in the carriage of goods 
 through to destination in another State, though its share 
 of the carriage is entirely within the State, it is engaged 
 in interstate conunerce.^' This is often shown to be the 
 case by a through billing and rating of the goods as- 
 sented to by the carrier in question.'" In Texas it has 
 
 " See Atlantic C. L. Ry. v. No. " State v. Gulf, C. & S. F. Ry. Co. 
 
 Car. Corp. Comn., 206 U. S. 1, 51 (Tex. Civ. App.), 44 S. W. 542. 
 
 L. ed. 993, 27 Sup. Ct. 585. ^^ Carrey v. Spencer, 36 N. Y. 
 
 And see Grand Trunk Ry. v. Supp. 886; Missouri, K. & T. R. R. 
 
 Railroad Commission of Michigan, Co. v. Fookes (Tex. Civ. App.), 40 
 
 231 U. S. 457, 34 Sup. Ct. 152, and S. W. 858. 
 
 generally the last chapter. ^s Norfolk & W. R. R. Co. v. Pa., 
 
 29 Cincinnati, N. O. & T. P. Ry. 136 U. S. 114, 34 L. ed. 394, 10 Sup. 
 
 Co. v. Int. Com. Comm., 162 U. S. Ct. 958; Ex parte Kochler, 30 Fed. 
 
 184, 40 L. ed. 935, 16 Sup. Ct. 700; 867; Augusta So. R. R. Co. v. 
 
 Louisville & N. R. R. Co. v. Behhner, Wrightsville & T. R. R. Co., 74 Fed. 
 
 175 U. S. 648, 44 L. ed. 309, 20 Sup. 522. 
 
 Ct. 209; United States v. Seaboard '» Cincinnati, N. O. & T. P. Ry. 
 
 Ry. Co., 82 Fed. 563; Interstate Co. v. Int. Com. Comm., 162 U. S. 
 
 S. Y. Co. V. Indianapolis U. Ry. Co., 184, 40 L. ed. 935, 16 Sup. Ct. 
 
 99 Fed. 472. 700. 
 
 [101] 
 
§ 133 ] Railroad Rate Regulation 
 
 been held that through biUing is not enough, and a State 
 carrier is not engaged in interstate commerce unless it 
 takes part in a through rating. '^ But it is now certain 
 that the rating need not be joint; the State carrier is none 
 the less an interstate carrier, because its share of the total 
 rate is equal to his entire local rate, if it takes part in or 
 permits through billing. ^^ And it does not seem necessary 
 for the establishment of a through carriage to prove that 
 a technical through rate has been named. 
 
 § 133. Contintxity of interstate shipment. 
 
 If the transporting of goods or passengers to an ultimate 
 destination in another State has begun, interstate com- 
 merce has begun, and no device to break up the transit 
 into intrastate portions will affect its real nature. So 
 where transportation of goods destined for a point without 
 the State has been actually begun, temporary stoppage 
 within the State without the intention of abandoning the 
 original movement (which movement is ultimately com- 
 pleted), will not deprive the transportation of the charac- 
 ter of interstate commerce.'^ And so if the goods are first 
 billed to a point in the State of shipment, and at that 
 point are rebiUed to their ultimate destination in another 
 State, without breaking of bulk, the whole constitutes a 
 single carriage.^* Neither is the continuity of the ship- 
 ment broken by a sale of the goods in transitu.^^ If, how- 
 ever, the goods are consigned to a dealer and he, selhng 
 them before arrival, rebills to the purchaser without 
 
 " Gulf, C. & S. F. Ry. Co. v. «' Cutting v. Florida Ry. & Nav. 
 
 Nelson, 4 Tex. Civ. App. 345, 23 Co., 46 Fed. 641. 
 
 S. W. 732; Houston &T.C.Ry. Co. V. "Texas & P. Ry. Co. v. Avery 
 
 Williams (Tex. Civ. App.), 31 S. W. (Tex. Civ. App.), 33 S. W. 704; 
 
 556; Houston & T. C. Ry. Co. v. Houston, D. & N. Co. v. Insurance 
 
 Davis, 11 Tex. Civ. App. 24, 31 S. W. Co., 89 Tex. 1, 32 S. W. 889, 30 
 
 308. L. R. A. 713, 59 Am. St. Rep. 17. 
 
 '2 United States v. Seaboard Ry. '' Gulf, C. & S. F. Ry. Co. v. Fort 
 
 Co., 82 Fed. 563. Grain Co. (Tex. Civ. App.), 72 
 
 S. W. 419. 
 
 [102] 
 
Fedebal Jurisdiction [ § 134 
 
 breaking bulk, the two carriages are distinct.^" Tiie transit 
 is a single unit, continuing from the time of the original 
 shipment to the ultimate end of the carriage; and where 
 the beginning and end are in different States, the entire 
 transit from beginning to end is interstate. It does not 
 cease to be interstate when the goods finally enter the 
 State of destination; it continues an interstate shipment 
 even within that State, until delivery." Therefore it has 
 been held that any attempt by the State to make orders 
 in regard to the switching of such shipments to the con- 
 signee is a regulation of interstate commerce.'^ 
 
 § 134. Relations with water lines. 
 
 Section 1 of the Act defines as subject to its provisions 
 any common carrier or carriers engaged in the transporta- 
 tion of passengers or property wholly by railroad (or 
 partly by railroad and partly by water when both are 
 used under a common control, management, or arrange- 
 ment for a continuous carriage or shipment). Thus 
 carriers partly by railroad and partly by water under a 
 common arrangement for a continuous carriage are as 
 specifically within the terms of the Act as any other 
 carriers named therein.'^ While a mere agreement by an 
 independent water carrier to accept freight from a con- 
 necting railroad and to transport it for its own particular 
 rate, may be an "arrangement" for continuous carriage, 
 but it is not a "common arrangement" within the mean- 
 rag of the Act.*" By concurring in through tariffs in con- 
 nection with a railroad, steamship companies become sub- 
 ject to the jurisdiction of the Commission with respect 
 
 "Gulf, C. & S. F. Ry. Co. v. Sup. Ct. 722. See also Interstate 
 
 State, 97 Tex. 274, 78 S. W. 495, S. Y. Co. v. Indianapolis U. Ry. Co., 
 
 aff'd in Gulf, C. & S. F. Ry. Co. v. 99 Fed. 472. 
 
 Texas, 204 U. S. 403, 51 L. ed. 640, '' Interstate Commerce Commis- 
 
 27 Sup. Ct. 360. sion v. Goodrich T. Co., 224 U. S. 
 
 " State V. Southern Ry. Co. (Tex. 194, 56 L. ed. 729, 32 Sup. Ct. 
 
 Civ. App.), 49 S. W. 252. 436. 
 
 " McNeill V. Southern Ry. Co., " Mutual Transit Co. v. U. S., 178 
 
 202 U. S. 543, 50 L. ed. 1142, 26 Fed. 664. 
 
 [103] 
 
§ 135 ] Railroad Rate Regulation 
 
 to trafl&c in question." And so a steamship line, under 
 a common arrangement with rail carrier, is subject to the 
 Act and entitled to form part of a through route. *^ How- 
 ever, through export bills of lading can only issue as the 
 result of an agreement between the railway and the 
 steamship; and the railroad company consequently has 
 no power to issue a through export bill of lading without 
 the consent of the steamship company.*^ The Commis- 
 sion only has jurisdiction clearly when the rail and water 
 lines have thus combined in through service to the extent 
 of the rates covered by the concurrence, and so long only 
 as they may fairly be said to be still current.^* The Com- 
 mission has had occasion frequently to pass upon the pro- 
 priety of such rates thus put in force, exercising the same 
 power with respect to them as to joint rates all rail.^^ 
 
 § 135. What constitutes continuous carriage. 
 
 Through billing and rating is the usual but by no means 
 the only method of manifesting a common arrangement.^* 
 Under the Act a common arrangement is established by 
 proof of shipment under a through bill of lading and a 
 continuous interstate carriage thereimder, coupled with 
 proof of concerted action among the connecting carriers 
 with regard to the payment of charges even if an agreed 
 division of the rate is not shown.*' Surely, imder any 
 
 " Augusta & Savannah Steamboat O. R. R. Co., 24 I. C. C. 125; Cham- 
 Co. V. O. S. S. Co. of Savannah, 26 ber of Commerce of New York v. 
 I. C. C. 380. N. Y. C. & H. R. R. R. Co., 24 
 
 "Flour City S. S. Co. v. L. V. I. C. C. 55; Escanaba Business 
 
 R. R., 24 I. C. C. 179. Men's Asso. v. A. A. R. R. Co., 24 
 
 *' Galveston Commercial Asso. v. I. C. C. 11; Colorado Mfrs. Asso. v. 
 
 A., T. & S. F. Ry., 25 I. C. C. A., T. & S. F. Ry. Co., 28 I. C. C. 82. 
 216. « Troy Board of Trade v. Ala. M. 
 
 " Benton Transit Co. v. Benton Ry., 4 Int. Com. Rep. 348, 6 I. C. C. 
 
 Harbor & St. J. & R. L. Co., 11 I. C. 1; Daniels v. Chicago, R. I. & P. 
 
 C. 542. Ry., 6 I. C. C. Rep. 458; Pennsyl- 
 
 *' See for example Southwestern vania Millers' State Assoc, v. P. & 
 
 Shippers' Traffic Asso. v. A. O. T. & R. R. R., 8 I. C. C. Rep. 531. 
 S. F. Ry., 24 I. C. C. 570; Business « Standard Oil Co. v. United 
 
 Men's League of Albert Lea v. B. & States, 179 Fed. 614. 
 
 [104] 
 
Federal Jurisdiction [ § 136 
 
 conventional division of charges, a carrier must be deemed 
 to have subjected its road to an arrangement for a con- 
 tinuous carriage or shipment within the meaning of the 
 Act.** Thus such common arrangement exists in a case 
 where the initial carrier furnishes the shipper with a car 
 specially fitted up for his business, which is taken over 
 connecting roads on special through time tables.*' So 
 where a short fine of railroad, entirely within a State, 
 was operated entirely by an interstate railroad as a link 
 in interstate carriage, there was held to be common con- 
 trol.^" The receipt successively by two or more carriers 
 for transportation of traffic shipped under through bills 
 for continuous carriage over their lines, is assent to such 
 a "common arrangement"; and previous formal arrange- 
 ment between them is not necessary to bring such trans- 
 portation under the terms of the Act." The words "through 
 route" contemplate an agreement, voluntary or under re- 
 quirement of the Commission, of two or more carriers to 
 provide a fine made up of all or parts of their lines be- 
 tween certain points. '^^ The fact that through tickets are 
 not used, or through rates paid, does not prove the trans- 
 portation to be other than interstate; for a through route 
 exists when passengers are actually transported by con- 
 tinuous carriage. ""^ 
 
 § 136. Local carrier participating in through carriage. 
 
 Where a local carrier takes part in the carriage of goods 
 through to destination in another State, though his share 
 of the carriage is entirely within the State, he is engaged 
 in interstate commerce.^* This is often shown to be the 
 
 "Chicago, B.&Q.R.R. V. United " TrammeU v. C. S. Co., 4 Int. 
 
 States, 157 Fed. 830. Com. Rep. 120, 5 I. C. C. 324. 
 
 *» Boston Fruit & P. Exch. v. N. Y. ^^ Kansas City v. K. C. V. & T. 
 
 & N. E. R. R., 3 Int. Com. Rep. 493, Ry. Co., 24 I. C. C. 22. 
 
 4 I. C. C. 664. 53 Citizens of Somerset v. W. Ry. & 
 
 >« Heck V. East Tennessee, V. & G. Co., 22 I. C. C. 187. 
 
 Ry., 1 Int. Com. Rep. 775, 1 I. C. C. " Norfolk & W. R. R. v. Pa., 136 
 
 495. U. S. 114, 34 L. ed. 394, 10 Sup. Ct. 
 
 958, 3 Int. Com. Rep. 178. 
 
 , , , [105] 
 
§ 136 ] Railroad Rate Regulation 
 
 case by a through bilUng and rating of the goods, assented 
 to by the carrier in question." Even under the proviso 
 of section 1 of the Act to the effect that its provisions 
 shall not apply to the transportation of passengers or 
 property, wholly within one State and not shipped to or 
 from a foreign country from or to any State or Territory, 
 it has recently been pointed out that a carrier participat- 
 ing in the movement of interstate commerce is not ex- 
 empted from the Act by the fact that in handling its 
 portion of the haul it operated wholly within one State. ^* 
 And the Commission takes the position that under the 
 reading of the Hepburn Amendment it has jurisdiction over 
 carriers engaged in the transportation whoUy by railroad 
 from one State to another, irrespective of common control, 
 management or arrangement, and the test of jurisdiction 
 is not the arrangement under which the freight is dehvered, 
 but rather the character of the transportation itself.^' 
 From the time that the carriage of goods destined for 
 delivery outside the State has begun within the State, 
 the transit is interstate in character.^* And, correspond- 
 ingly, the carriage continues to be interstate after the goods 
 are within the State to which they are consigned, until 
 the transit is over.^* There are a good many cases in the 
 courts decided in accordance with the general principles 
 discussed in this section.^" And there are also subjoined 
 additional citations from the reports of the Commission 
 bearing upon this matter of compelhng the estabUshment 
 of through service between carriers not yet committed to 
 common arrangements.*^ 
 
 " Cincinnati, N. O. & T. P. Ry. '=' State v. Southern Ry., 49 S. W. 
 
 V. Int. Com. Comm., 162 U. S. 184, 252. 
 
 40 L. ed. 935, 16 Sup. Ct. 700, 5 Int. ™ Louisville & N. Ry. v. Van 
 
 Com. Rep. 391. Cleave, 110 Ky. 968, 63 S. W. 23. 
 
 '« Denver & R. G. R. Co. v. I. C. C, See Fisher v. Gt. Northern Ry., 49 
 
 195 Fed. 968. Wash. 205, 95 Pac. 77. 
 
 " Leonard v. K. C. S. Ry. Co., 13 «i Cardiff Coal Co. v. C, M. & St. 
 
 I. C. C. 573. P. Ry. Co., 13 I. C. C. 460; St. Louis, 
 
 '8 Cutting v. Florida Ry. & N. Co., S. & P. R. R. v. P. & P. U. Ry. Co., 
 
 46 Fed. 641. 26 I. C. C. 226. 
 
 [106] 
 
Federal Jurisdiction [ § 137 
 
 § 137. Intrastate part of interstate movement. 
 
 It has been seen that a movement wholly within State 
 which is part of through movement is within the Act.^^ 
 The Commission, therefore, has jurisdiction over a ship- 
 ment between two points in same State, when for trans- 
 shipment beyond State." Where the through rates and 
 charges must necessarily be made up of the separately 
 established rates and charges, because there is no joint 
 tariff, the law requires that carriers subject to the Act 
 must publish and file such separately established rates 
 and charges.*^ And where there is an interstate rate 
 between points in the same State, such interstate rate, 
 and not a lower State rate, is the proper rate to be used 
 in making up a combination through rate on an inter- 
 state shipment in the absence of a joint rate.^^ The fact 
 that a rate is used in combination with other rates does 
 not prohibit it from being considered as a separately es- 
 tablished interstate rate.^* If a discrimination results from 
 the combination of a State and an interstate rate, both 
 estabUshed by the same carrier, the matter is not with- 
 drawn from the jurisdiction of the Commission by the 
 fact that the discrimination is produced by an improper 
 State rate — certainly not when the State rate is volun- 
 tarily made by the carrier.*^ For a carrier to apply 
 higher rates to interstate than to State traffic under 
 like conditions, is a violation of the Act.** It follows that 
 the intrastate portion of combination through rate may 
 be attacked before the Commission as unreasonable.''' 
 
 «2 Grand Junction Ch. of C. v. cage, M. & St. P. Ry., 18 I. C. C. 
 
 D.&R. G., 23 1. C. C. 115. 172. 
 
 " Pittsburgh Vein Operators of " Reliance Textile & Dye Works v. 
 
 Ohio V. P. Co., 24 1. C. C. 280. So. R. Co., 11 1. C. C. 48. 
 
 " Eagle P. L. Co. v. N. Rys. of «« Keogh v. M., St. P. & S. Ste. M. 
 
 M., 25 I. C. C. 7. Ry. Co., 26 I. C. C. 73; see also Barr 
 
 " Coffeyville B. & T. Co. v. St. L. Bros. & Co. v. Mo. Pac. Ry., 13 
 
 & S. F. R. R. Co., 25 I. C. C. 101. I. C. C. 329. 
 
 "^ Disher Hoop & Lumber Co. v. " Lebanon Commercial Club v. 
 
 St. L. & S. F. R. R. Co., 26 I. C. C. L. & N. R. R. Co., 25 I. C. C. 277; 
 
 488. See also Sieber Co. v. Chi- Du Pont de Nemours Powder Co. v. 
 
 [107] 
 
§ 138 ] Railroad Rate Regulation 
 
 § 138. Line of the distinction. 
 
 Two cases in the Supreme Court of the United States 
 will serve excellently to make the line of distinction by 
 which cases are now decided. It was held in one case™ 
 that the reshipment by the consignee to other points 
 within the State of coal consigned to it on interstate ship- 
 ments to a distributing point within the State, although 
 such reshipments are in the cars in which the coal was 
 received, does not establish such continuity of transporta- 
 tion as to place such reshipments outside the pale of State 
 regulation, where the consignee paid the freight to the 
 point of reshipment to the initial carrier, which placed 
 the cars on an interchange track, where they were held 
 by the consignee until sales were made. It was held in 
 the other case ^^ that a stockyard company which operated 
 a railroad system for the transportation of loaded cars to 
 and from trunk lines centering there was a carrier subject 
 to the Act within the definitions therein, since these cars 
 were being handled in the course of their transportation 
 from beyond the State where the stockyards were situated 
 or when outbound were under consignment to points out- 
 side the State; and it was therefore held that the company 
 in carrying on this line of business could be called upon 
 to file its tariffs with the Commission. The attitude of 
 the Supreme Court to-day plainly is that the question of 
 whether the commerce is interstate or not is to be de- 
 termined with respect to the. actual movement in the 
 particular case. It is undoubtedly true that the question 
 whether commerce is interstate or intrastate must be 
 determined by the essential character of the commerce 
 and not by mere billing or forms of contract.''^ But the 
 
 C. R. R. Co. of N. J., 25 I. C. C. 19; T. Co., 226 U. S. 286, 57 L. ed. 226, 
 
 Mixon-McClintock Co. v. St. L., I. 33 Sup. Ct. 83. 
 
 M. & S. Ry. Co., 25 I. C. C. 8; Jubitz " Railroad Commission v. Worth- 
 
 V. S. P. Co., 27 I. C. C. 44. ington, 225 U. S. 101, 66 L. ed. 1004, 
 
 ™ Chicago, M. & St. P. Ry. Co. v. 32 Sup. Ct. Rep. 653; Texas & N. O. 
 
 Iowa, 233 U. S. 334, 34 Sup. Ct. 592. R. Co. v. Sabine Tram Co., 227 U. S. 
 
 "United States v. Union S. Y. & 111, 57 L. ed. 442, 33 Sup. Ct. Rep. 
 [108] 
 
Federal Jurisdiction [ § 139 
 
 fact that commodities received on interstate shipments 
 are reshipped by the consignees, in the cars in which they 
 are received, to other points of destination, does not 
 necessarily estabhsh a continuity of movement." 
 
 § 139. Device to break through shipment. 
 
 The Act expHcitly forbids any attempt by any device to 
 break the continuity of an interstate shipment. If the 
 transporting of goods or passengers to an ultimate destina- 
 tion in another State has started, interstate commerce has 
 begun; and no device to break up the transit into intra- 
 state portions will affect its real nature. The continuity 
 of the carriage of freight over a line formed by two or 
 more roads is not broken in fact and cannot be broken in 
 law by the charge of a local rate by one or more of such 
 roads as its proportion of the through rate; nor can the 
 obhgations imposed by the statute be evaded by the 
 demand of the local charge for the haul over its own road 
 by one or more of such carriers, or by the declaration on 
 the part of one or more of said carriers, that as to the 
 transportation over its road it is a local and not a through 
 carrier.''^ Where transportation of goods destined for a 
 point without the State has been actually begun, tem- 
 porary stoppage within the State, without the intention of 
 abandoning the original movement will not deprive the 
 transportation of the character of interstate commerce. 
 There is a tendency plainly to be seen in the recent cases 
 to hold that the literal reading of the bills of lading is 
 not conclusive; and if in fact the goods are moving in 
 interstate or foreign commerce the Act applies to them and 
 
 229; Railroad Commission v. Texas Sabine Tram Co., 227 U. S. Ill, 129, 
 
 & P. R. Co., 229 U. S. 336, 57 L. ed. 130, 67 L. ed. 442, 449, 450, 33 Sup. 
 
 1215, 33 Sup. Ct. Rep. 837. Ct. Rep. 229. 
 
 " Gulf, C. & S. F. R. Co. V. Texas, " Troy Board of Trade v. Ala. 
 
 204 U. S. 403, 51 L. ed. 540, 27 Sup. Midland Ry., 4 Int. Com. Rep. 306, 
 
 Ct. Rep. 360; Railroad Commission 6 I. C. C. Rep. 1. 
 
 V. Worthington, 225 U. S. 101, 109, See also Delaware & H. C. Co. 
 
 56 L. ed. 1004, 1008, 32 Sup. Ct. v. Com. (Pa.), 2 Int. Com. Rep. 
 
 Rep. 653; Texas & N. O. R. Co. v. 222. 
 
 [109] 
 
§ 140 ] Railroad Rate Regulation 
 
 the jurisdiction of the Commission attaches although at 
 first there has been only local billing^* 
 
 § 140. Publishing of proportional rates. 
 
 A proportional rate is a rate which applies to a part of 
 through transportation which is within the jurisdiction of 
 the .Commission; and in order to be recognized, generally 
 speaking, the balance of the transportation to which the 
 proportional rate applies must be under a rate filed with 
 the Commission^' The pubhcation of proportional rates 
 by rail carriers and a lake steamship company covering 
 through interstate transportation, the actual movement of 
 traffic upon through bills of lading, and the prepayment of 
 freight charges, necessitating an accounting between the 
 carriers, is evidence of a common arrangement for a 
 continuous carriage.^^ Previous to the Panama Act, giving 
 the Commission power to fix port proportionals, the 
 Commission was reluctant on its own initiative to estab- 
 lish a proportional rate applicable to traffic from the 
 Atlantic seaboard, which is lower than a reasonable local 
 rate. But the Commission had held that part of a con- 
 tinuous haul from a foreign country which is confined to a 
 rail transportation from a port of entry to a point in the 
 same State is within the jurisdiction of the Commission, 
 though the shipment does not move under through billing 
 nor do the water and rail lines operate under any common 
 control or management.^* In another case the Commission 
 considered its jurisdiction doubtful over part of cargo from 
 foreign country, coming in chartered vessel without ocean 
 billing to domestic port, and carried thence by rail to 
 point in same State.''' In a recent case in the Supreme 
 
 " See R. R. Comm. of La. v. Texas " Flour City S. S. Co. v. L. V. R. 
 
 & P. Ry., 229 U. S. 336, 57 L. ed. R., 24 I. C. C. 179. 
 
 1215, 33 Sup. Ct. 9; and Duluth- ™ In re Rates of the Louisiana 
 
 Superior Milling Co. v. No. Pacific Ry. & Nav. Co., 22 1. C. C. 558. 
 
 Ry., 152 U. S. 341, 146 N. W. 1105. " Du Pont de Nemours Powder 
 
 ™ Crescent Coal & Mining Co. v. Co. v. P. R. R., 27 I, C. C. 59. 
 C. & E. I. R. R., 24 I. C. C. 149. 
 
 1110] 
 
Federal Jurisdiction [ § 141 
 
 Court of the United States,*" it was pointed out that, 
 notwithstanding the fact that under the Act as it then 
 stood the Interstate Commerce Commission had been 
 apparently given no power by Congress to deal with port 
 proportional rates from a point within a State to a point of 
 shipment within that State, the Railroad Commission of that 
 State had not in such a case, authority which could con- 
 stitutionally be given it to fix such a part of a through 
 rate for a transit which was essentially interstate. 
 
 § 141. Transit privileges under through arrangements. 
 
 An article remains an article of interstate commerce as 
 long as it is subject to a transit tariff.*^ These privileges 
 are only applicable to shipments intended from the outset 
 to be through shipments. Thus in one proceeding before 
 the Interstate Commerce Commission,*^ it appeared that 
 the practice was to ship grain from points west of Kansas 
 City to Kansas City upon the local rate. When this rate 
 was paid an expense bill was delivered to the person pay- 
 ing it. If this expense bill was afterward delivered to a 
 carrier leading eastward from Kansas City, that carrier 
 would transport a corresponding amount of grain forward 
 to Chicago, or any eastern point, not at the rate from 
 Kansas City, but at the balance of the through rate from 
 the original point of shipment. It was not at all requisite 
 that this second lot of grain should be the original lot. 
 Of this scheme the Interstate Commerce Commission said: 
 "The first question arising upon these facts would seem 
 to be. Were the shipments under this practice through 
 shipments, and for that reason entitled to the through rate 
 which they received? It is difficult to understand how they 
 can be so treated. Apparently they had not a single in- 
 cident of a through shipment, but upon the contrary the 
 
 " Railroad Commission of Ohio v. " The Transit Case, 24 I. C. C. 
 
 Worthington, 225 U. S. 101, 32 Sup. 340. 
 
 Ct. 653; see also Pittsburgh Vein ^^ In the Matter of Alleged Unlaw- 
 
 Operators v. So. Pac. Ry., 24 I. C. ful Rates, 7 I. C. C. Rep. 240. 
 C. 280. 
 
 [Ill] 
 
§ 142 ] Railroad Rate Regulation 
 
 transportation from the point of origto to Kansas City was 
 in every respect local. The rate was local. There was 
 nothing upon any paper connected with the transaction 
 which indicated that the grain was to be carried beyond 
 Kansas City. As a matter of fact there was no definite 
 purpose upon the part of its owner to carry it beyond. 
 If it did finally go further, there was no present idea as to 
 what point it would go. It might be consumed at Kansas 
 City. It might be sent forward to Chicago. It might be 
 transported to Liverpool. The object of the owner of the 
 grain -was simply to take it to Kansas City for the purpose 
 of disposing of it there, without any thought as to its 
 ultimate destination. When the grain was unloaded and 
 put upon the market at Kansas City, it was not, in any 
 possible construction, there temporarily in transit upon a 
 through shipment. It had reached its destination. It had 
 become Kansas City grain. When it was shipped out it 
 must take the Kansas City rate, and the fact that it had 
 come from a point farther west was no reason for giving it 
 a different rate." 
 
 Topic D. Conflict between Federal and State Jurisdiction 
 
 § 142. Power of Congress to regulate. 
 
 The regulation of interstate and foreign commerce is 
 one of the principal powers confided by the Constitution 
 to the Congress of the nation. That this power carries 
 with it the right to exercise it in all appropriate ways 
 would seem to be unquestionable.*' In one of the first 
 cases,*^ imder the Interstate Commerce Act Mr. Justice 
 Brewer said of the legislative power of Congress to regu- 
 late rates: "There were three obvious and dissimilar 
 courses open for consideration. Congress might itself 
 prescribe the rates; or it might commit to some subor- 
 
 " Chesapeake & P. Telephone Co. cinnati, N. O. & T. P. Ry. Co., 167 
 
 V. Manning, 186 U. S. 238, 46 L. ed. U. S. 479, 42 L. ed. 243, 17 Sup. 
 
 1144, 22 Sup. Ct. 881. Ct. 896. 
 
 «* Interstate Com. Comm. v. Cin- 
 
 [112] 
 
Federal Jurisdiction [ § 143 
 
 dinate tribunal this duty; or it might leave with the 
 companies the right to fix rates subject to regulations 
 and conditions." There would therefore seem to be no 
 doubt that Congress possesses the inherent right which 
 every legislature having power has, either to fix rates itself 
 or give to its commission power in the premises. Thus 
 far it has wisely refused to fix rates itself; and it has with 
 equal wisdom withheld from the Commission the power 
 to make schedules of rates. By its persistent policy it has 
 given the Commission only power to give relief from un- 
 reasonable rates in particular cases calling for its action. 
 The first grant of power in this regard was held by the 
 courts to go no further than to authorize the Commission 
 to declare the rate complained of improper.'^ But in the 
 latest legislation the Commission is given power in giving 
 relief to designate what the proper rate shall be hence- 
 forth.8« 
 
 § 143. Effect of action by Congress. 
 
 Whatever doubts there may be as to the extent to 
 which State regulation of interstate commerce may go 
 in the absence of federal regulation, there is no doubt as 
 to the fate of State regulation of the conduct of interstate 
 commerce which comes in conflict with federal regula- 
 tion. Thus State legislation forbidding the charging of 
 more for a short haul than for a long haul can have no 
 application to interstate rates in view of the express pro- 
 visions of the Interstate Commerce Act as to this matter." 
 So a State statute providing for redress for those charged 
 more than the scheduled rates is certainly without force 
 as te charges for interstate shipments in view of the 
 similar provision of the Interstate Commerce Act.** But 
 
 '<■ Cincinnati, N. 0. & T. P. Ry. «< LouisviUe & N. Ry. Co. v. Eu- 
 
 Co. V. Interstate Com. Comm., 162 bank, 184 U. S. 27, 46 L. ed. 416, 
 
 U. S. 184, 40 L. ed. 935, 16 Sup. Ct. 22 Sup. Ct. 277. 
 
 700. 8«Gulf, C. & S. F. Ry. Co. v. 
 
 «> See Railroad Commission Cases, Hefley, 158 U. S. 98, 39 L. ed. 910, 
 
 116 U. S. 307, 29 L. ed. 636. 15 Sup. Ct. 802. 
 
 8 [113] 
 
§ 144 ] Railroad Rate Regulation 
 
 Congress cannot go so far in regulation of the conduct of 
 interstate commerce as to invade the power of the States 
 over matters within their jurisdiction. Thus Congress 
 cannot go the length of subjecting all employees of car- 
 riers having an interstate business to the rules which 
 it may attempt to lay down, as was held iu the first 
 Employers' Liability Cases under the first law.*' But 
 since the Second Employers' Liability Cases under the 
 present law, it has been recognized that Congress may 
 make special rules applicable to employees actually en- 
 gaged at the time in service connected with an interstate 
 movement of traffic.'" 
 
 § 144. Jurisdiction of State and nation. 
 
 When we come to deal with the constitutional complica- 
 tions due to our federal government, too wide a field is 
 opened for anything but reference here. It is generally 
 laid down that for normal cases the rule is as simple as 
 that there would be federal regulation for interstate mat- 
 ters and state regulation of intrastate affairs. Thus a 
 State cannot make provision by statute for redress for a 
 refusal made to a shipper by a carrier where the cars 
 desired were for an interstate shipment.'^ And corre- 
 spondingly the State cannot make regulations relating to 
 the delivery of cars which are moving under a consignment 
 in interstate commerce.'^ It has recently been established 
 by a succession of cases that siace the Carmack Amend- 
 ment to the Act has laid down rules for limitation of 
 liability for loss of shipment, all State regulations of every 
 
 «» See The Employers' Liability rez, 215 U. S. 687, 29 Sup. Ct. 250, 
 
 Cases, 207 U. S. 463, 52 L. ed. 297, holding that the Employers' Liabil- 
 
 28 Sup. Ct. 141. ity Act remained effective in the 
 
 See Butts v. M. & M. Transp. territories. 
 
 Co., 230 U. S. 126, 31 Sup. Ct. 118, " Houston & T. C. Ry. v. Mayes, 
 
 holding that the Civil Rights Act is 201 U. S. 321, 50 L. ed. 772, 26 Sup. 
 
 not left applicable upon the high seas. Ct. 491. 
 
 » See Illinois C. Ry. v. Behrends, '^ Chicago, R. I. & P. Ry. v. Hard- 
 
 233 U. S. 473, 34 Sup. Ct. 646. wick F. El. Co., 226 U. S. 426, 57 
 
 See El Paso & B. Ry. v. Gutier- L. ed. 284. 33 Supp. Ct. 174. 
 [114] 
 
Federal Jurisdiction [ § 145 
 
 sort, even an explicit statute apparently generally appli- 
 cable, can have no longer any application to interstate 
 shipments." Indeed, a recent case ^* goes so far as to hold 
 that a regulation contained in the published tariffs of an 
 interstate railway carrier on file with the Interstate Com- 
 merce Commission, limiting its baggage liability to $100 
 unless a greater value is declared and stipulated by the 
 owner and the excess charges paid, is binding upon the 
 passenger in case of loss of the baggage through the car- 
 rier's negligence, regardless of the passenger's lack of 
 knowledge of or assent to such regulation. This means 
 that when Congress, by the Amendment took possession of 
 this phase of the interstate railway transportation of prop- 
 erty, all State rules whatsoever relating thereto were 
 automatically set aside. 
 
 § 145. Division of jurisdiction normally. 
 
 Two recent decisions in the Supreme Court of the 
 United States will serve to show how closely the lines of 
 this distinction are drawn. In one of them '^ it was held 
 that a municipal ordinance requiring a local license to be 
 obtained as a condition precedent to conducting an ex- 
 press business within the municipality should be construed, 
 in the absence of a controUing decision of the courts of 
 the State, as not applicable to the transaction by an express 
 company of its interstate business, since, construed other- 
 wise, the ordinance would be invalid as an unconstitutional 
 regulation of commerce. In the other '^ it was held that a 
 State may fix reasonable rates for ferriage from its shore 
 to the shore of another State over a boundary stream, 
 until Congress undertakes to regulate such rates; and 
 that, therefore. State regulation of the rates to be charged 
 
 " Chicago, R. I. & P. Ry. v. 14, 34 Sup. Ct. 203, and note cases 
 
 Cramer, 232 U. S. 490, 34 Sup. Ct. cited. 
 
 383. »»Port Richmond & B. P. Ferry 
 
 "Boston & M. R. R. v. Hooker, Co. v. Board of Freeholders, 234 
 
 233 U. S. 97, 34 Sup. Ct. 526. U. S. 317, 34 Sup. Ct. 821; and note 
 
 " Ban-ett v. New York, 232 U. S. cases cited. 
 
 [115] 
 
§ 146 ] Railroad Rate Regulation 
 
 for a ticket for a round trip over an interstate ferry from 
 the shore of such State to the shore of d,nother State, and 
 return, is vaUd until Congress undertakes to regulate 
 such rates By way of further contrast two State cases 
 may be cited. In one of them '' it was said that the 
 decisions of the United States courts and the opinions 
 of the Interstate Commerce Commission construing the 
 Act to Regulate Commerce have no appUcation to in- 
 trastate shipments. In the other ^* the fundamental prin- 
 ciple was reiterated that a contract between a shipper and 
 a railroad company for the carriage of goods from a point 
 within one State to a point within another State is inter- 
 state commerce, and not the subject of State regulation 
 as to toUs or compensation. 
 
 § 146. Application of regulating statutes. 
 
 Where a statute may have two interpretations, one 
 unconstitutional, and the other valid, one applying to all 
 commerce, the other simply to intrastate commerce, the 
 latter will be upheld. ^^ Thus State statutes and rulings 
 of State railroad commissioners are not appUcable to in- 
 terstate shipments.^ And provisions against railroad com- 
 panies for overcharges and unjust discrimination in the 
 shipment of freight, have no application to interstate 
 commerce.^ The penalties provided by the State authori- 
 ties for wrongs by carriers cannot apply to interstate 
 shipments.^ The deduction will be absolute that the legis- 
 lature of a State intended by the commission act which 
 it has passed to regulate only intrastate traffic, and did 
 not intend to enter the domain of interstate regulation 
 in violation of the commerce clause of the national Con- 
 
 «' Alabama G. S. Ry. Co. v. Mc- ' Greason v. Ry., 112 Mo. App. 
 
 Clesky, 160 Ala. 630, 49 So. 433. 116, 86 S. W. 722. 
 
 "' Jennings v. Big Sandy & C. Ry. ^ Wright v. Howe (Tex. Civ. App.), 
 
 Co., 61 W. Va. 664, 57 S. E. 272. 24 S. W. 314. 
 
 M Darlington Lumber Co. v. Mo. ' Lowe v. Seaboard A. L. Ry. Co., 
 
 Pac. Ry., 216 Mo. 658, 116 S. W. 63 S. C. 248, 41 S. B. 297. 
 530. 
 
 [116] 
 
Federal Jurisdiction [ § 147 
 
 stitution.* Therefore, a provision for free time for un- 
 loading and loading in a State statute does not apply- 
 to interstate traffic.^ And a penalty for not surrendering 
 freight after tender of charges cannot apply to interstate 
 shipments/ On the other hand, a State penalty for failure 
 to notify has been upheld by a State court as applicable 
 to interstate shipments.^ And, wherever the interests 
 of the State may be said to be pecuUarly affected, its 
 legislation will stand in the absence of explicit action by 
 Congress bearing upon the subject. Thus a State may 
 still regulate the size of train crews.^ And, since there is 
 not enough to show that Congress has any idea of leaving 
 the matter -without regulation, the State may request 
 the payment of wages.' 
 
 § 147. Respective powers over service. 
 
 It is beyond the jurisdiction of a State, as the Supreme 
 Court of the United States has often pointed out, to en- 
 force the performance of transportation for those desirous 
 of shipping beyond the State. ^^ But apparently a State 
 commission may order service to be maintained to and 
 from the State line, although there is no station there, 
 and train movements will necessarily be to and from a 
 junction point beyond the State line." A State body 
 has no jurisdiction to determine whether an express com- 
 pany shall, as to interstate shipments, deliver packages 
 to the residences and places of business of consignees.'^ 
 And by a like course of reasoning it will be apparent 
 
 * Oregon R. & Nav. Co. v. Camp- « Pittsburg, C, C. & St. L. Ry. v. 
 
 bell, 173 Fed. 980. State, 172 Ind. 147, 87 N. E. 1034. 
 
 » St. Louis & S. F. Ry. v. State, 26 " State v. Missouri Pac. Ry. (Mo.), 
 
 Okla. 62, 107 Pac. 929, 30 L. R. A. 147 S. W. 118. 
 
 (N. S.) 137. " Southern Ry. v. Reid, 222 U. S. 
 
 » Trinity & B. V. Ry. Co. v. 424, 32 Sup. Ct. 140, and cases cited. 
 
 Geppert (Tex. Civ. App.), 135 S. "W. " Missouri Pacific R. R. v. Kansas, 
 
 164. 216 U. S. 262, 54 L. ed. 472, 30 Sup. 
 
 ' St. Louis, I. M. & S. Ry. v. Ct. 330. 
 
 Edwards, 94 Ark. 394, 127 S. W. "State v. Adams Exp. Co., 171 
 
 713. Ind. 138, 144, 85. N. E. 337. 
 
 [117] 
 
§ 148 ] . Railroad Rate Regulation 
 
 that a State cannot penalize the failure to deliver a tele- 
 graph message sent from one State to another.^' It has 
 been held that a State may require an interstate carrier 
 to settle claims promptly. ^^ But a State may not increase 
 the liabihties of an initial carrier engaged in interstate 
 commerce. ^^ However, a State reciprocal demurrage law 
 has been held by another State to be generally appU- 
 cable." In still another State, it has been held within the 
 power of the State to penalize delay in performing serv- 
 ice. ^^ But these and other cases of the same sort, where it 
 is insisted that an intent of Congress to occupy the whole 
 field so as to exclude the State must appear, are clearly 
 open to question in view of the present tendencies ob- 
 servable in the decisions of the Supreme Court of the 
 United States. 
 
 § 148. Legislation relating to facilities. 
 
 There seems to be no doubt that a State Commission 
 may as to local movements compel switching to be done 
 on a basis established by it.^* It is possible that this may 
 be done, although the car is destined to another State, 
 if the purposes of such order are to prevent discrimina- 
 tion among shippers in local switching service." Like- 
 wise, a State commission has power to order the construc- 
 tion of an interchange track to connect railroad hues for 
 the exchange of all kinds of traffic, both interstate and 
 intrastate, the purpose being to provide better facUities 
 for railroad service in general.^" Although the Act now 
 provides that the Commission can order switch connections. 
 State bodies duly empowered may still order the making 
 
 " Western U. Tel. Co. v. Pendle- " Traynham v. Charleston & W. C. 
 
 ton, 122 U. S. 347, 30 L. ed. 1187. Ry. (S. C), 71 S. E. 813. 
 
 » Atlantic C. L. Ry. Co. v. Ma- '» Louisville & W. R. R. v. Higden, 
 
 zursky, 216 U. S. 122, 30 Sup. Ct. 378. 234 U. S. 592, 34 Sup. Ct. 948. 
 
 "Central of Ga. Ry. Co. v. '"Texas & P. R. R. v. Railroad 
 
 Murphey, 197 U. S. 194, 49 L. ed. Commission, 183 Fed. 1005. 
 444, 25 Sup. Ct. 218. » Pittsburgh, C, C. & St. L. Ry. v. 
 
 >« Martin v. Oregon Ry. & N. Co., State ex rel., 171 Ind. 189, 86 N. E. 
 
 58 Oregon, 198, 113 Pac. 16. 328. 
 
 [118] 
 
Federal Jurisdiction [ § 149 
 
 of such connections.^^ But a State railroad commission 
 cannot prescribe rules or assume powers not conferred 
 upon it; and the statute should not be held to apply to 
 terminal facilities or transportation in shipment of inter- 
 state commerce. ^^ A Stat6 has power to impose regula- 
 tions on railroads within the State, requiring interchange 
 of cars with another road subsequent to the arrival of the 
 train at the "break-up yards." ^^ 
 
 § 149. State legislation burdening interstate commerce. 
 
 If certain cases only are examined it would seem that 
 State statutes which restrict the conduct of interstate 
 transportation in any substantial degree are unconstitu- 
 tional, the absence of congressional regulation on the sub- 
 ject being held equivalent to a declaration that the matter 
 should be left undisturbed. Thus a State statute for- 
 bidding the separation of travelers has been held void as 
 applied to interstate transportation.^^ But it follows that 
 as the matter is to be left without legislative interference 
 a carrier may make proper regulations separating white 
 passengers from black, which may apply to interstate com- 
 merce.^^ A State statute directed against all discrimina- 
 tion in freight rates has been held unconstitutional, so 
 far as its application to interstate shipments is concerned.^* 
 But it has been said recently in one case that where the 
 
 " See Kansas City So. Ry. v. " HaU v. Decuir, 95 U. S. 485, 24 
 
 Kaw VaUey Dist., 233 U. S. 75, 34 L. ed. 547. 
 
 Sup. Ct. 181, holding that a State But see Alabama & V. Ry. v. 
 
 body cannot order the removal of Morris, 103 Miss. 511, 60 So. 11, 
 
 an interstate bridge. holding that a State may require 
 
 '^ But rates fixed by a State for separation as a police measure, 
 
 transportation therein can have no ^' Chiles v. Chesapeake & O. R. R. 
 
 application to shipments moving Co., 218 U. S. 71, 30 Sup. Ct. 667. 
 
 through, even as part of a combina- See Hart v. State, 100 Md. 595, 
 
 tion rate. Oregon R. R. & N. Co. 85 Atl. 497, holding that for the 
 
 V. Campbell, 230 U. S. 525, 33 Sup. States to require separation would 
 
 Ct. 22. invade federal jurisdiction. 
 
 2» Louisville & N. R. R. Co. v. '^ Wabash, St. L. & P. Ry. Co. v. 
 
 Central S. Y. Co., 133 Ky. 149, 97 Illinois, 118 U. S. 557, 30 L. ed. 
 
 S. W. 778. 244. 
 
 [119] 
 
§ 150 ] Railroad Rate Regulation 
 
 Commission has defined certain acts as discriminatory, 
 the State authorities may declare still others to be dis- 
 criminatory also.^' There have been doubts as to the 
 extent to which a State can regulate the stopping of inter- 
 state trains. It was at first said that the State could order 
 this to be done.^* But it is now well established that this 
 cannot be done by the authorities of the State, if the com- 
 pany provides an adequate local service.^* It apparently 
 has once been said that a State can provide redress for 
 failure to forward a message; but that case was decided 
 before the Commission had been given jurisdiction over 
 telegraphing between the States, and the rule would now 
 be different.'" 
 
 § 150. Extent of the federal supervision. 
 
 Two recent cases in the Supreme Court of the United 
 States throw light upon these difficult distinctions. In 
 one of them '^ it was held that the federal courts will not 
 disturb, on the theory of any interference with interstate 
 cominerce, an order of a State railroad commission sus- 
 pending an interstate railway company's supplemental 
 tariff in order to give the commission an opportunity 
 to investigate, since it seems that Congress has not so 
 
 " Puritan Coal Mining Co. v. James, 162 U. S. 650, 48 L. ed. 1105, 
 
 Penna. Ry., 237 Pa. St. 420, 85 Atl. 16 Sup. Ct. 950, with H. B. Williams 
 
 426. Co. V. Western U. T. Co., 203 Fed. 
 
 ^ Lake Shore & M. S. Ry. Co. v. 140. 
 Ohio, 173 U. S. 285, 43 L. ed. 702, " Grand Trunk Ry. Co. v. Michi- 
 
 19 Sup. Ct. 465. This case was vir- gan Railroad Commission, 231 U. S. 
 
 tually overruled by Cleveland, C, 457, 34 Sup. Ct. 152. 
 C. & St. L. R. R. Co. V. Illinois, 177 The position of the Commission is 
 
 U. S. 514, 44 L. ed. 868, 20 Sup. Ct. that since cartage charges may be 
 
 722. regarded as a proper subject for na- 
 
 '' See the latest cases on this point: tional regulation, federal authority 
 
 Atlantic C. L. R. R. Co. v. Wharton over demurrage and track storage 
 
 et al., 207 U. S. 328, 52 L. ed. 230, charges in connection with interstate 
 
 28 Sup. Ct. 121; Herndon v. Chicago, commerce cannot be challenged and 
 
 R. I. & P. R. R. Co., 218 U. S. 135, is excluded. Wilson Produce Co. v. 
 
 30 Sup. Ct. 633. Pa. Ry., 14 I. C. C. 170. 
 
 '"Compare Western U. T. Co. v. 
 
 [1201 
 
Federal Jurisdiction [ § 151 
 
 taken over the whole subject of terminals, team tracks, 
 switchmg tracks, and sidings, of interstate railways, as 
 to invaUdate all State regulations relative to the inter- 
 change of traffic. On the other hand where a line haul is 
 terminating in a deUvery involving switching, it was held 
 in the later case '^ that the question whether there is at 
 any point an additional service performed by the carrier 
 in the receipt and delivery on industrial spur tracks within 
 the switching limits in a city of carload freight moving 
 in interstate commerce, upon which such carrier may base 
 an extra charge, in addition to the line-haul rate to or 
 from such city, or whether there is merely a substituted 
 service which is substantially a like service to that included 
 in the line-haul rate, and not received, is a question of 
 fact to be determined according to the actual conditions 
 of operation, and one upon which it is manifestly the 
 province of the Interstate Commerce Commission to pass. 
 
 § 151. Scope for State police power. 
 
 It will have been noticed that the problem is how far 
 the conduct of interstate commerce should be left sub- 
 ject to the same law throughout the Union without dis- 
 turbance by local law, and how far the police power of 
 the State may be exercised by general legislation applying 
 to the conduct of interstate commerce as well as to all 
 things done within its borders. Thus a State may pro- 
 hibit a railway from receiving even for interstate ship- 
 ment hides not duly inspected to prevent fraudulent ship- 
 ment of branded skins, because of the peculiar necessity 
 for such policy in those regions.^' And a State may by 
 
 '^ Interstate Commerce Commis- delivery directed by consignees, and 
 
 sion V. Atchison, T. & S. F. Ry., 234 it follows that switching service does 
 
 U. S. 294, 34 Sup. Ct. 814. ' not constitute a local transaction, 
 
 The position of the Commission but interstate commerce. Badenoch 
 
 is that when under tariffs, carriers Co. v. Chicago & N. W. Ry., 22 I. C. 
 
 agree to switch, upon order of con- C. 36. 
 
 signee, the transportation service to " New Mexico ex rel. v. Denver & 
 
 be performed by the carrier is not R. G. R. R. Co., 203 U. S. 38, 51 
 
 ended until cars are given terminal L. ed. 78, 27 Sup. Ct. 1. 
 
 [121] 
 
§ 151 ] Railroad Rate Regulation 
 
 general law prohibit running of freight trains interstate 
 as well as intrastate on Sunday, this statute governing 
 the conduct of all within the jurisdiction.'^ To safeguard 
 its citizens a State may require that all locomotive en- 
 gineers operating trains within its borders shall be ex- 
 amined and licensed.'^ Likewise a State may require all 
 locomotives to be equipped with electric headlights of 
 high power. '^ And it may make rules for safety appliances 
 generally applicable to all cars moving within its borders. '' 
 Perhaps the State may go to this length in the exercise 
 of the police power strictly in regulating service. Thus 
 a State may regulate the heating of cars, those upon inter- 
 state trains as well as others.'* 
 
 3* Hennington v. Georgia, 163 U. S. Georgia, 234 U. S. 280, 34 Sup. C». 
 
 299, 41 L. ed. 166, 16 Sup. Ct. 829. 
 
 1086. »' Luken v. Lake S. & M. S. Ry., 
 
 « Smith V. Alabama, 124 U. S. 248 III. 377, 94 N. E. 175. 
 
 465, 31 L. ed. 508. ss New York, N. H. & H. R. R. Co. 
 
 "Atlantic Coast Line R. R. v. v. New York, 165 U. S. 628, 41 
 
 L. ed. 853, 17 Sup. Ct. 418. 
 
 [122] 
 
CHAPTER IV 
 
 SERVICES SUBJECT 
 
 i 160. Provisions of the Act. 
 161. Continual extension of jurisdiction. 
 
 Topic A. Callings Subject 
 \ 162. Railroads. 
 
 163. Water lines. 
 
 164. Passenger transportation. 
 
 165. Street railways. 
 
 166. Express companies. 
 
 167. Sleeping car companies. 
 
 168. Parlor car service. 
 
 169. Dispatch lines. 
 
 170. Pipe lines. 
 
 171. Telegraph lines. 
 
 172. Telephone systems. 
 
 173. Government services. 
 
 Topic B. Incidental Serviees 
 
 i 174. Transfer. 
 
 175. Wharfage. 
 
 176. Terminals. 
 
 177. Switching. 
 
 178. Lighterage. 
 
 179. Drayage. 
 
 180. Loading. 
 
 181. Refrigeration. 
 
 182. Elevation. 
 
 183. Storage. 
 
 184. Transit privileges. 
 
 185. Transportation services. 
 
 Topic C. Public Profession 
 
 186. Who are common carriers. 
 
 187. Commitment to public service. 
 
 188. Nature of public profession. 
 
 189. Extent of the power of regulation. 
 
 190. Public railroads. 
 
 191. Private railroads. 
 
 192. Industrial railways. 
 
 [123] 
 
§ 160 ] Railroad Rate Regulation 
 
 § 193. Joint rates. 
 
 194. Tap lines. 
 
 195. Plant facilities. 
 
 196. Line haul. 
 
 197. Intermingled service. 
 
 Topic D. Public Duty 
 
 § 198. Public obligation the fundamental principle. 
 
 199. Nature of the pubhc duty. 
 
 200. Limitations upon the profession. 
 
 201. Public duty the basis. 
 
 202. Extent of the carrier's route. 
 
 203. Scope of the service. 
 
 204. Carriage of live stock. 
 
 205. Carriage of rolling stock. 
 
 206. Profession limited to car service. 
 
 207. Special trains. 
 
 208. Forwarders offering consolidated shipments. 
 
 209. Problem of dependent service. 
 
 § 160. Provisions of the Act. 
 
 By section 1 of the Act as it now reads the jurisdiction 
 of the Commission covers any corporation or any person 
 or persons engaged in the transportation of oil or other 
 commodity, except water and except natural or artificial 
 gas, by means of pipe lines, or partly by pipe Unes and 
 partly by railroad, or partly by pipe lines and partly by 
 water; telegraph, telephone and cable companies (whether 
 wire or wireless); and any common carrier or carriers en- 
 gaged in the transportation of passengers or property 
 wholly by railroad (or partly by railroad and partly by 
 water when both are used under a common control, 
 management, or arrangement for a continuous carriage or 
 shipment). The term "common carrier" as used in the 
 Act shall include express companies and sleeping-car com- 
 panies. The term "railroad" as used in this Act shall 
 include all bridges and ferries used or operated in con- 
 nection with any railroad, and also all the road in use by 
 any corporation operating a railroad, whether owned or 
 operated under a contract, agreement, or lease, and shall 
 also include all switches, spurs, tracks, and terminal 
 [124] 
 
Services Subject [ § 161 
 
 facilities of every kind used or necessary in the trans- 
 portation of the persons or property designated herein, 
 and also all freight depots, yards, and grounds used or 
 necessary in the transportation or delivery of any of said 
 property; and the term "transportation" shall include cars 
 and other vehicles and all instrumentalities and facilities 
 of shipment or carriage, irrespective of ownership or of any 
 contract, express or imphed, for the use thereof and all 
 services in connection with the receipt, delivery, eleva- 
 tion, and transfer in transit, ventilation, refrigeration or 
 icing, storage, and handling of property transported. The 
 extent of the powers of the Commission over the rendering 
 of service as the Act now stands is more fully set forth in 
 Chapter XIX. 
 
 § 161. Continual extension of jurisdiction. 
 
 The service subject to the original Act to Regulate 
 Commerce of 1887 was primarily railroad transportation. 
 Water carriers were included only in so far as they were 
 in concurrence with a rail line under a common manage- 
 ment. As the original Act of 1887 read it only covered 
 interstate and carriers by railroad, or partly by railroad 
 and partly by water when both are used under a common 
 control, management or arrangement for a continuous car- 
 riage or shipment. The parenthesis was not put around 
 the latter clause until the revision of 1906; and at the same 
 time power was given to the Commission to establish 
 joint rates between carriers by land or sea who are actually 
 engaged in carrying by rail and water in commerce moving 
 between States. Pipe hnes, express services and sleeping 
 cars were added to the services subject to the Act in 
 1906. Telegraph, telephone and cable companies, whether 
 wire or wireless, were put under the jurisdiction of the 
 Commission in 1910. Services incidental to transportation 
 were more elaborately enumerated in 1906; and jurisdic- 
 tion over allowances for them more particularly covered in 
 1910. By the Panama Act of 1912, further jurisdiction 
 
 [125] 
 
§ 162 ] Railroad Rate Regulation 
 
 was given the Commission over water lines, not, however, 
 going to the extent of making subject to the Commission 
 vessels carrying from port to port without connection 
 with rail lines. 
 
 Topic A. Callings Subject 
 
 § 162. Railroads. 
 
 The cases at law defining the pubHc character of railroad 
 transportation are so numerous that it is difficult to select 
 any one in particular as an illustration. "It is now too 
 well settled in this Staite to admit of questioning, that 
 raUroad companies are common carriers, and as such, that 
 they are amenable to the habilities imposed by the law 
 appUcable to common carriers as the same is administered 
 in this State." '^ But this is applicable only to such rail- 
 roads as make it a business to carry for the public. "A 
 logging railroad appurtenant to a saw-mUl, constructed 
 wholly on private grounds and operated for private 
 purposes is not a common carrier charged with all the 
 duties and responsibilities incmnbent by the laws of the 
 land upon common carriers." *" As the original Act to 
 Regulate Commerce was primarily designed to bruig railroad 
 transportation under the intimate control of the' federal 
 government, the Commission established thereby has 
 never had any question of the character of the business of 
 a railroad engaged in carrying between the States. The 
 Commission has always recognized that it is dealing with 
 a business essentially monopolistic in character, wherein 
 without regulation of rates by the Government there 
 would not naturally be a sufficient regulation by the 
 process of competition." > The Commission also has had 
 httle difficulty in determining what a railroad is; but there 
 is no necessity for it to make nice distinctions as to what 
 
 " Southwestern Railroad Co. v. ber Co., 74 Fed. 517, 20 C. C. A. 515, 
 Webb, 48 Ala. 585. 41 U. S. App. 45. 
 
 *" Wade V. Critcher & M. C. Lum- *' Advance in Rates — Eastern Case, 
 
 20 I. C. C. 243, 
 [126] 
 
Services Subject [ § 163 
 
 constitutes carriage strictly as distinguished from other 
 services, as everything ancillary to the provision of 
 transportation is specifically put under its jurisdiction as 
 well as the carriage itself. However, once ia a while the 
 question conies up as to when transportation by rail in 
 this general sense has finally come to an end, by the 
 employment thereafter in handling the traffic of other 
 facilities of a different character.*^ 
 
 § 163. Water lines. 
 
 As the main purpose of the Act was to regulate trans- 
 portation by railroad, the regulation of water lines was 
 merely incidental and collateral. ^^ Water carriers were 
 not subjected to the control of the Commission, because it 
 was believed that their rates were largely dictated by 
 competition, and it was understood that freedom to quote 
 such rates as they found necessary from day to day, was 
 essential to the carrying on of this commerce to best 
 effect." This has not always proved to be the case; the 
 Commission has found for instance that water transporta- 
 tion between the Atlantic seaboard and Galveston has 
 never been open to free competition.^^ It should be 
 noted in this connection that it has recently been held in a 
 State court that the rates of a steamship company plying 
 on the high seas between two ports in the same State are 
 subject to the jurisdiction of the State Commission.^* 
 Water carriage is not as yet subject to the jurisdiction of 
 the Commission at Washington. As has been seen, only 
 when there is a rail and water route established by some 
 conmion arrangement is there any service subject to the 
 
 « Kansas City v. Kansas City Asso. v. A., T. & S. F. Ey. Co., 24 
 
 V. & T. Co., 24 1. C. C. 22. I. C. C. 570. 
 
 *' In re Jurisdiction over Water * Wilmington Transp. Co. v. Rail- 
 Carriers, 15 I. C. C. 205. road Commission (Cal.), 137 Pac. 
 
 " Cosmopolitan S. S. Co. v. Ham- 135, aff. U. S. Sup. Ct. Feb. 1, 1915. 
 
 burg American S. P. Co., 13 I. C. C. Compare United States v. Pacific Ry. 
 
 266. & N. Co., 228 U. S. 87, 57 L. ed. 
 
 « Southwestern Shippers Traffic 742, 33 Sup. Ct. 443. 
 
 [127] 
 
§ 164 ] Railroad Rate Regulation 
 
 Act.*' Even so, a water carrier, by engaging in interstate 
 transportation with a railroad, does not subject its all- 
 water business to the jurisdiction of the Commission.*^ 
 The Commission, to be sure, may now force the establish- 
 ment of through routes where one of the parties is, a 
 water line.*^ But it is doubtful whether the jurisdiction 
 of the Commission to establish through routes can be 
 exercised except over carriers subjecting themselves to the 
 Act.*" The Commission may pass upon the propriety of 
 whatever rail and water rates are filled with it, but only 
 such rates." But rates once established may subsequently 
 be cancelled, if there is a bona fide withdrawal from the 
 arrangement under which they were offered. ^^ 
 
 § 164. Passenger transportation. 
 
 The pack carriers of mediaeval times concerned them- 
 selves only with goods; it was not until the day of the 
 stagecoach that the carriage of passengers became a prac- 
 tice. It is needless to state that our railways to-day are 
 in general public carriers of passengers as well as com- 
 mon carriers of goods. • Examples, however, wUl occur 
 where a railway has confined its carriage to the carriage of 
 goods only; and in such case it cannot be called upon to 
 take passengers. ^^ On the other hand, if the railroad is 
 operating as a carrier of freight only, it need not run trains 
 for passengers." But the usual fact is that the railroad 
 in question has undertaken to carry passengers as well as 
 
 " Mutual Tr. Co. v. United States, Co., 26 I. C. C. 110; see also South- 
 
 178 Fed. 664. western Shippers Traffic Asso. v. 
 
 « Augusta & Savannah Steamboat A., T. & S. F. Ry. Co., 24 1. C. C. 570. 
 
 Co. V. O. S. S. Co. of Savannah, 26 ^^ Lumber from Louisiana to North 
 
 I. C. C. 380. Atlantic points, 27 I. C. C. 186; see 
 
 ■" Murray L. & T. Co. v. D. & H. also Milburn Wagon Co. v. Lake 
 
 Co., 25 I. C. C. 388; see also Mil- Shore & M. S. Ry. Co., 18 I. C. C. 
 
 waukee P. & F. Exch. v. Crosby 144. 
 
 Transp. Co., 30 I. C. C. 653. " Wiggins Perry Co. v. East St. L. 
 
 5» Aransas P. C. & D. Co. v. G. H. V. Ry., 107 lU. 450. 
 
 & S. A. Ry. Co., 27 1. C. C. 403. " Commonwealth v. Fitchburg R. 
 
 " Echols & Co. V. A., T. & S. F. Ry. R. Co., 12 Gray, 180. 
 
 [128] 
 
Services Subject [ § 165 
 
 goods. ^^ And then it is bound as a public carrier, when 
 not overcrowded, to take all proper persons who may 
 apply for transportation over its liae, on their complying 
 with reasonable rules of the company. ^^ It has never been 
 questioned in the Commission that the provisions of the 
 Act are as expUcit as to its application to the carriage of 
 passengers as to the transportation of goods." And it has 
 been held in the courts that a carrier of passengers is as 
 much subject to the Act as a carrier of goods. ^^ 
 
 § 165. Street railways. 
 
 The Commission from the first maintained that street 
 railways carrying passengers from one State to another 
 were within the provisions of the Act; and it frequently 
 asserted this jurisdiction over railways of this sort, what- 
 ever the character of their service.^' However, the Su- 
 preme Court has recently held that a street railway run- 
 ning across an interstate bridge, and exclusively engaged in 
 carrying passengers, is not within the scope of the word 
 "railroad" used in the Act, as the Commission was 
 designed to deal with the railroad which plays a part in 
 commerce between States, not with the railway which has 
 no real function in such business.'" The Act, it should be 
 noted, makes no distinction between railroads that are 
 operated by electricity and those that use steam locomo- 
 tives; both are subject to its provisions when engaged in 
 interstate transportation, and are entitled to equal con- 
 sideration in any controversy before the Commission.*^ 
 
 55 Caldwell v. Richmond & D. R. Washington Ry. & Eleo. Co., 22 
 
 Co., 89 Ga. 550, 15 S. E. 678. I. C. C. R. 187; Boyle v. G. F. & 
 
 5« Galena & C. Y. R. R. Co. v. O. D. R. R. Co., 20 I. C. C. R. 232; 
 
 Yarwood, 15 lU. 468. Kansas City v. K. C. V. & T. Ry. 
 
 " West End Improvement Co. v. Co., 24 I. C. C. 22; Bitzer v. W. V. 
 
 T. C. B. Ry. & B. Co., 17 I. C. C. Ry. Co., 24 I. C. C. 255; Ford v. 
 
 239. W. V. Ry. Co., 24 I. C. C. 632. 
 
 «8 Louisville, N. O. & T. T. R. R. v. ™ Omaha & C. B. St. Ry. Co. v. 
 
 State, 66 Miss. 662, 6 So. 203, 2 Int. Int. Com. Comm., 230 U. S. 324, 33 
 
 Com. Rep. 18. Sup. Ct. 890. 
 
 5' Willson V. R. C. R. R., 7 I. C. C. " Chicago & M. Elec. R. Co. v. 
 
 Rep. 83; Citizens of Somerset v. Ilhnois C. R. Co., 11 1. C. C. 20. 
 
 9 [ 129 ] 
 
§ 166 ] Railroad Rate Regulation 
 
 It would seem, therefore, that it is not motive power 
 which is conclusive, but the character of the line in ques- 
 tion, and it would follow that ititerurban lines of a com- 
 mercial character are common carriers subject to the 
 act." It is the duty of such'' roads to provide cars and 
 all other facilities necessary to properly serve the public; 
 and through routes and joint rates may now be estab- 
 lished over them.*^ But it is plainly the provision of the 
 Act, as it now reads, that through routes and joint ar- 
 rangements may not be required between a steam road and 
 an electric railway that does not transport freight as well 
 as passengers.^^ 
 
 § 166. Express companies. 
 
 Express companies are peculiarly an American institu- 
 tion, which has flourished under the decisions of the courts 
 to the effect that the railroad can make exclusive arrange- 
 ments with the expressman of their choice; and since they 
 live by the grace of the railroads, their existence can 
 properly be justified only to the extent that their service 
 is more efficient and more reasonable than that which 
 would be given by the railroads themselves. And accord- 
 ing to the way the Commission views their function, 
 the express companies are agencies of the railroad for 
 doing a small parcel business, to be treated as freight 
 forwarders by passenger train, giving supplemental service 
 and intermediate care/^ Express service is desired be- 
 cause shipments to smaller communities are not of suffi- 
 cient size to warrant movement in carload quantities; and 
 freight service is too slow except where package cars are 
 run.** The main object of an express service is expedition; 
 and express rates should not be so low as to attract busi- 
 
 »2 Louisville Board of Trade v. O. S. W. R. R. Co., 20 I. C. C. 
 I. C. & S. T. Co., 27 I. C. C. 499. 486. 
 
 " St. Louis, S. & P. R. R. V, P. & ^^ The Express Cases, 117 U. S. 1, 
 
 P. U. Ry. Co., 26 I. C. C. 226. 29 L. ed. 791, 6 Sup. Ct. 542. 
 
 >* Cincinnati & C. T. Co. v. B. & «« In re Express Rates, 24 I. C. C. 
 
 380. 
 
 [ 130 ] 
 
Services Subject [ § 167 
 
 ness which might properly go by freight, and thereby 
 congest and interfere with the service by express.^'' Under 
 the Act as it originally read, confined primarily to rail- 
 road service, only an express business conducted by a 
 railroad company was held subject to its provisions.** 
 Independent express companies were not made subject 
 to the Commission until the amendment of 1906; but they 
 are now as fully subject to the Act as any of the carriers 
 therein defined.*^ That expressmen are responsible as 
 carriers, not merely as forwarders was settled long ago — 
 not, however, until after much litigation^" 
 
 § 167. Sleeping-car companies. 
 
 Following the analogy of express service the courts have 
 held that the railroads may make exclusive arrangements 
 with one company for the provision of sleeping cars.'' 
 But the parallelism is not perfect; for, although the express 
 company is held a carrier of goods, the sleeping-car com- 
 pany is not a carrier of passengers. It provides, to be 
 sure a vehicle for passengers to ride in, and accommodations 
 for their comfort while in course of transportation. But 
 the railroad company and not the car company under- 
 takes and is responsible for the transportation, and has 
 entire charge of the journey. Although not a common 
 carrier, the sleeping-car company is in a public employ- 
 ment.'^ Sleeping-car service when provided by separate 
 companies was first made subject to the Commission in 
 1906. If the railroad was itself providing the sleeping 
 cars, its rates might be subject to the jurisdiction of the 
 Conmiission under the original Act, but . not otherwise.'^ 
 Now apparently the arrangements between sleeping-car 
 
 «' R. R. Com'rs of Fla. v. S. Exp. " Chicago, St. L. & N. O. R. R. v. 
 
 Co., 28 I. C. C. 634. PuUman So. Car Co., 39 U. S. 79, 
 
 "'Re Express Companies, 1 Int. 35 L. ed. 97, 11 Sup. Ct. 490. 
 
 Com. Rep. 22, 1 1. C. C. 349. " Lemon v. Pullman P. Car Co., 
 
 "Kindel v. Adams Exp. Co., U 52 Fed. 262. 
 
 I. C. C. 475. " See Worcester Excursion Car 
 
 ™ Buckland v. Adams Express Co. v. Pa. Ry., 2 Int. Com. Rep. 792, 
 
 Co., 97 Mass. 124, 93 Am. Dec. 68. 3 I. C. C. 577. 
 
 [131] 
 
§§ 168, 169 ] Railroad Rate Kegtjlation 
 
 companies and railroad companies as to the use of the 
 cars and the compensation therefor are subject to the 
 power of the Commission/* 
 
 § 168. Parlor-car service. 
 
 The business of running drawing-room cars in connection 
 with ordinary passenger cars has become one of the com- 
 mon incidents of passenger traffic on the leading railroads 
 of the coimtry." Parlor-car service when performed by 
 railroads is part of the service offered in passenger trans- 
 portation, and as such was plainly subject to the Act 
 from the outset. In one early case the Conamission went 
 very fully into the parlor-car service then provided by the 
 New York, New Haven & Hartford Railroad between 
 Boston and New York, and made favorable findings upon 
 the rates and practices in relation thereto. ^^ Whether 
 such service when rendered by other companies is made 
 subject to the jurisdiction of the Conamission by the 
 amendments of 1906, which, while only specifying sleeping- 
 car companies, spoke later generally of auxihary services 
 in the course of transportation by whomsoever provided 
 might perhaps have been arguable. But at all events, 
 the Commission has not as yet suggested that there is any 
 difference to be respected between sleeping cars and other 
 special cars. 
 
 § 169. Dispatch lines. 
 
 By the doctrines prevalent in the federal courts, the 
 railroads may make exclusive arrangements with car lines 
 of special character, such, for example as hve stock trans- 
 portation companies for the carriage of cattle.''^ Therefore, 
 the Commission held in any. early decision that the rail- 
 roads were under no obligation to perform without dis- 
 crimination haulage for rival concerns operating stock 
 
 '* See Corporation CommiBsion of ™ Hewins v. New York, N. H. & 
 
 Oklahoma v. A., T. & S. F. Ry. Co., H. R. R., 10 I. C. C. Rep. 221. See 
 
 25 I. C. C. 120. PuUman Co. v. Luke, 203 Fed. 1017. 
 
 " Thorpe v. New York C. & H. R. " United States ex rel. Morris v. 
 
 R. R., 76 N. Y. 407. D., L. & W. R. R., 40 Fed. 101. 
 
 [132] 
 
Services Subject [ § 170 
 
 cars.'^ Freight lines operating as dispatch companies are 
 common carriers, if they arrange for keeping possession 
 of the freight transported en route." But, if the fast 
 freight Une is in reaUty operated by a combination of 
 railroads, the dealings will be held to be with the rail- 
 roads themselves jointly.*" By a practice now prevailing, 
 fruit is carried in refrigerator cars, which are arranged to 
 contain ice; these cars were formerly provided in small 
 numbers by the railroads themselves; but they are now 
 very largely owned by private corporations. Though not 
 technically a carrier, the refrigerator car line is carrying 
 on a business which is of public importance in connection 
 with the railway, and Uke the sleeping-car company, it is, 
 therefore, engaged in a public employment which, though 
 not identical with that of a common carrier, is analogous 
 to it, and imposes similar legal obhgations upon the cor- 
 poration.*^ The same thing would, of course, be true 
 of a tank car line; and as a matter of fact the tank car 
 lines seem usually to be owned or controlled by outside 
 concerns.*^ It should be emphasized again in this con- 
 nection that all services involved in the transportation of 
 goods by rail are by the later amendments to the Act 
 made subject to the jurisdiction of the Commission. And 
 this is so whether the services are conducted by the rail- 
 road itself or by any other parties, so that the private 
 cars in public service are plainly subject to the orders of 
 the Commission. 
 
 § 170. Pipe lines. 
 
 As amended in 1906 the Act to regulate commerce 
 impresses the obligation of common carriers upon all pipe 
 lines engaged in the transportation of oil in interstate com- 
 
 " Burton Stock Car v. C, B. & Q. & W. R. Co., 119 N. C. 693, 56 Am. 
 
 R. R., 1 Int. Com. Rep. 329, 1 1. C. C. St. Rep. 628, 25 S. E. 854. 
 
 132. " See Re Transportation of Fruit, 
 
 ™ Transportation Co. v. Block 10 I. C. C. 360. 
 
 Bros., 86 Tenn. 392, 6 Am. St. Rep. '^ See Rental Charges on Private 
 
 847, 6 S. W. 881. Cars, 31 1. C. C. 255. 
 
 ™ Rocky Mt. Mills v. Wilmington 
 
 [133] 
 
§171] Railroad Rate Regulation 
 
 merce. It had previously been held in the courts that 
 such pipe lines might constitutionally be given eminent 
 domain, as tube highways open to public use.^' It ap- 
 parently makes no difference if the pipe lines in question 
 were buUt over privately acquired right of way, and 
 transport only their own oil; at all events, all the pipe 
 lines carrying oil from one State to another have been 
 considered by the Commission common carriers subject to 
 the Act. And the United States Supreme Court has just 
 decided that pipe hues which have never, as a matter 
 of fact, undertaken to carry for anyone else than their 
 owners are affected with a public interest, if the business 
 is conducted on the basis of insisting that all comers shall 
 sell their oil previously to its being transported to the con- 
 cern which operates the system.*^ This decision is so 
 recent that the Commission has not put into effect any 
 policy of regulation which has as yet come up for decision. 
 
 § 171. Telegraph lines. 
 
 When the law first had to deal with the telegraph, the 
 disposition of the courts was to put it under the class 
 of carriers; but it was soon seen that this technically was 
 not correct.^^ However, it has always been recognized 
 that telegraph lines are plainly public services, potentially 
 subject to governmental regulation through Commission 
 action.*^ Their business in transmitting messages equally 
 clearly constitutes interstate commerce, for the regulation 
 of which Congress may provide.*' This situation was 
 
 *' West Virginia Transp. Co. v. in the original proceedings. In re 
 
 Volcanic O. & C. Co., 5 W. Va. 382. Pipe Lines, 24 I. C. C. 1. 
 
 "A pipe line company is a common '* See the phraseology in Western 
 
 carrier bound to receive and trans- Union Telegraph Co. v. Hamilton, 
 
 port for all persons alike all goods 36 Tex. Civ. AJjp. 300. 
 
 intrusted to its care." Giffin v. ^ See the language in Green v. 
 
 South West Pa. Pipe Lines, 172 Pa. Telegraph Co., 136 N. C. 489, 49 
 
 St. 580, 33 Atl. 578. S. E. 165, 67 L. R. A. 985, 103 Am. 
 
 " United States v. Ohio Oil Co., St. Rep. 955. 
 
 234 U. S. 548, 34 Sup. Ct. 956. See " See the theories advanced in 
 
 also the opinions in the Commission Western Union Telegraph Co. v. 
 
 [134] 
 
Services Subject [ §§ 172, 173 
 
 covered by the Mann Act of 1910 by putting telegraph 
 and cable service (whether wire or wireless) under the 
 jurisdiction of the Commission; and since that time it 
 has been recognized that henceforth the regulation of these 
 services belongs exclusively to the Commission.** 
 
 § 172. Telephone systems. 
 
 The demands of the commerce of the present day make 
 the telephone a necessity. It has long been recognized 
 that all people should have access to this service upon 
 equal terms.** At one time it was insisted that as the 
 telephone was patented its owners could do as they pleased. 
 But it has been agreed almost from the beginning that the 
 service provided by the telephone companies is public 
 in character. Indeed, the best discussion of the essential 
 nature of public calling is to be found in the series of 
 cases brought before the courts not long ago to establish 
 the invalidity of arrangements made by the telephone 
 companies giving special privileges to certain telegraph 
 companies.*" Occasion arose some time ago to say that 
 Congress might regulate this business where it had juris- 
 diction.'^ Telephone service was made subject to the Act, 
 with special provisions relating thereto, by the amend- 
 ments of 1910. Since then the Commission has had oc- 
 casion to deal with this service only a few times; but there 
 have been important developments in this field recently.*^ 
 
 § 173. Government services. 
 
 It should be noted that the Commission has had spe- 
 cially conferred upon it from time to time jurisdiction over 
 
 Call Publishing Co., 181 U. S. 92, Co. v. Baltimore & O. Telegraph 
 
 45 L. ed. 765, 21 Sup. Ct. 561. Co., 66 Md. 399, 7 Atl. 809, 59 Am. 
 
 8« H. B. Williams Co. v. Western Rep. 167. 
 
 U. T. Co., 203 Fed. 140. " Chesapeake & P. Telephone Co. 
 
 «» State V. Citizens' Telephone Co., v. Manning, 186 U. S. 238, 46 L. ed. 
 
 61 S. C. 83, 39 S. E. 257, 85 Am. St. 1444, 22 Sup. Ct. 881. 
 
 Rep. 870. ■ °^ Local Telephone Service at Pitts- 
 
 w See Chesapeake & P. Telephone burg, 27 I. C. C. 622. 
 
 [135] 
 
§ 174 ] Railroad Eats Regulation 
 
 the charges which the government should properly make 
 the public in furnishing the services which it is itself pro- 
 viding. This is the tendency which should become a 
 poUcy with the recognition of the truth that public serv- 
 ices by whomsoever provided should be furnished upon 
 the equitable basis to be found in legal principles. Thus 
 the approval of the Commission is required for changes 
 made by the Postmaster General under the Parcels Post 
 Act.'' And the tolls in certain govermnent owned canals 
 have been made subject to the approval of the Commis- 
 sion.'* Very likely these two instances may show the 
 beginnings of a poUcy. It is quite in accordance with the 
 trend of opinion to give to the Commission more juris- 
 diction along these lines. 
 
 Topic B. Incidental Services 
 
 § 174. Transfer. 
 
 By the provisions of the original Act the term railroad, 
 whenever used, should be held to include aU bridges and 
 ferries used or operated in connection with any railroad. 
 But the courts held that this appUed to the bridges or 
 ferries owned and operated by the railroad company 
 subject to the Act, and not to a bridge company which 
 supplied a roadway only, over which other companies 
 carry, and that such a company, not being itself a car- 
 rier, was not subject to the Act.'^ Apparently the amend- 
 ments of 1906 by which all instrumentalities and facilities 
 of shipment and carriage, irrespective of ownership or 
 arrangement, were made subject to the jurisdiction of the 
 Commission, are not considered to have enlarged the 
 powers of the Commission in respect to this situation, be- 
 yond such facilities as are employed in carriage subject to 
 the Act in the course of transit between the States.'^ It was 
 
 '= No. 402, June 30, 1906. dismissed, 149 U. S. 777, 37 L. ed. 
 
 " No. 336, Aug. 24, 1912. 964, 13 Sup. Ct. 1048. 
 
 " Kentucky & I. B. Co. v. L. & » New York C. & H. R. R. v. 
 
 N. R. R., 37 Fed. 567, 2 L. R. A. Board of Hudson Co., 227 U. S. 248, 
 
 289, 2 Int. Com. Rep. 351, appeal 57 L. ed. 499, 33 Sup. Ct. 269. 
 
 [136] 
 
Services Subject [ § 175 
 
 recently ruled by the Commission that a bridge company 
 with its viaduct approaches, was not a common carrier 
 subject to the Act.'^ But where a bridge company takes 
 the position of an intervening carrier, it will, if it partici- 
 pates in interstate traffic, be held subject in its rates to the 
 jurisdiction of the Commission.'* The reservation of 
 Congress of the right to fix charges over bridges is exer- 
 cised by a delegation of authority to the Commission.'* 
 Unless the circumstances are dissimilar a carrier may not 
 arbitrarily absorb a bridge charge at one river crossing and 
 refuse to do so at another. ^ It has, however, recently 
 been pointed out that mere ferriage across a stream sepa- 
 rating two states was not a matter which Congress had as 
 yet undertaken to regulate.^ As in the case of railway 
 bridges, so in the case of car ferries, if the charge therefor 
 is involved in the through service the Commission has 
 jurisdiction, otherwise not.^ 
 
 § 175. Wharfage. 
 
 A railroad which terminates on navigable water in 
 arranging to handle through trafiic ought to provide 
 proper facilities therefor. As the Commission said in a 
 recent case, it is the duty of defendant carriers to provide 
 facilities for receiving fiour reaching Buffalo via steamship; 
 and if their facilities are inadequate, facilities must be 
 provided elsewhere, and at a charge no greater than would 
 apply via their own docks. ^ And consequently, a wharf 
 used by another as Shagway was held to be an instru- 
 mentality of interstate commerce, in respect to the use of 
 
 " Kansas City v. K. C. V. & T. A. & A. R. R. Co., 24 I. C. C. 331. 
 
 Ry. Co., 24 I. C. C. 22. ^ Port Richmond & H. Ferry Co. 
 
 '« Railroad Commission of Ind. v. v. Board of Commissioners, 234 U. S. 
 
 K. & I. B. & R. R. Co., 14 I. C. C. 317, 34 Sup. Ct. 152. 
 
 563. ' The cost of such car ferriage was 
 
 » West End Improvement Club v. considered in Rates on Coal to Mil- 
 
 O. & C. B. R. & B. Co., 17 I. C. C. waukee, 28 I. C. C. 527. 
 
 239. ■* Flour City S. S. Co. v. L. V. R. 
 
 ' Mfra. & Merchants' Assoc, v. R. Co., 24 I. C. C. 179. 
 
 [137] 
 
§ 176 ] Railroad Rate Regulation 
 
 which discrimination would be forbidden/ It all depends, 
 with the courts, upon the situation which they find to 
 have been estabhshed. A railroad may however, have a 
 special wharf, especially for a particular line connecting 
 with it; and it has been held that from such a wharf it 
 may exclude other lines desirous of using it where, as in 
 that case, sufficient facilities were apparently to be ob- 
 tained at other wharves.* But in the case of the Southern 
 Pacific Terminal Company created by an act of the legisla- 
 ture for the purpose of furnishing terminal facilities at the 
 port of Galveston for use in connection with the Southern 
 Pacific Railroad and Steamship systems and controlled 
 by it through stock ownership, the Supreme Court held 
 that the Commission has jurisdiction to regulate the 
 charges on traffic handled in connection with these carriers, 
 since the terminal was a part of the system and was not a 
 distinct wharfage company.^ Following the lines of these 
 decisions, the Commission has recently investigated wharves 
 maintained by carriers at Fort Myers for use of business 
 from certain boat lines on the Caloosahatchee River.* At 
 Pensacola, also, preferences discovered in berthing vessels 
 in connection with railroad owned wharves were held un- 
 lawful.^ 
 
 § 176. Terminals. 
 
 In the matter of terminals a distinction seems to be 
 made in the law between the "terminals which are part of 
 the system of the railroad itself, and terminals which are 
 maintained for the use of railroads entering the city.^" 
 
 ' Humboldt S. S. Co. v. W. P. & » In re Wharfage Facilities at Pen-. 
 
 Y. R., 25 I. C. C. 136. sacola, 27 1. C. C. 252. 
 
 • Louisville & N. R. R. Go. v. West '" Concerning the obUgations of 
 
 Coast N. S. Co., 198 U. S. 483, 49 pubUo terminals, see State v. Jack- 
 
 L. ed. 1135, 25 Sup. Ct. 745. sonviUe Terminal Co., 41 Fla. 363, 
 
 'Southern Pac. Terminal Co. v. 27 So. 221 (Union station); and 
 
 I. C. C, 219 U. S. 498, 55 L. ed. 310, Union Ry. of Bait. v. Canton R. 
 
 31 Sup. Ct. 278. R., 105 Md. 12, 65 Atl. 409 (belt 
 
 » R. R. Com'rs of Fla. v. A. C. L. line). 
 R. R. Co., 28 I. C. C. 356. 
 
 [138] 
 
Services Subject [ § 176 
 
 Generally speaking, while a railroad company may refuse 
 the use of its terminals to other railroads, a terminal 
 company must permit all railroads to use its facihties 
 upon equal terms." Although the terminals of a railroad 
 are subject to the supervision of the Commission as part 
 of the facilities furnished for the public desiring the trans- 
 portation which the carrier is furnishing, there is an explicit 
 proviso in the Act to the effect that a railroad need not 
 give the use of its terminals to its rivals. Thus a freight 
 depot owned and maintained by a carrier is a terminal 
 facility for use in handling business from its own line, 
 and cannot under section 3 be used for handling business 
 from other lines without its consent. ^^ On the other 
 hand, railroads may voluntarily open their terminals to 
 other carriers, as apparently all railroads at Detroit 
 voluntarily open their trackage to other railroads entering 
 that city.'' Very often, as at St. Louis, the so-called 
 terminal is in reality a connecting carrier; and the law 
 governing such terminal lines is that imposing the obliga- 
 tion of interchange of traffic, rather than the utilization of 
 facilities.''' A company which offers a terminal service as 
 such to all comers would seem to be in a position where it 
 could be compelled to treat all with equality; and in this 
 view of the matter it all depends upon the basis upon 
 which the terminal is constituted. The Peoria case, 
 recently decided, contains the most important rulings of 
 the Commission on these problems. The Commission in 
 effect found that the defendant was a terminal company 
 constructed for the purpose of giving main-line roads 
 access to various industries in and about Peoria, and 
 virtually organized to furnish terminal facihties for car- 
 
 " Unless a terminal is operated '^ R. R. Com. of Arkansas v. St. 
 
 upon a public basis its owners can- L., I. M. & S. Ry., 24 1. C. C. 292. 
 
 not be compelled to admit other rail- " Detroit Switching Charges, 28 
 
 roads; see Terre Haute & I. R. R. v. I. C. C. 494. 
 
 Peoria & P. V. Ry. Co., 167 111. 296, " Mfgrs. Ry. Co. v. St. L., I. M. & 
 
 47 N. E. 513; and Com. v. Norfolk S. Ry., 28 I. C. C. 93. 
 & W. Ry., 103 Va. 291, 68 S. E. 351. 
 
 [139] 
 
§ 177 ] Railroad Rate Regulation 
 
 riers which lacked them; ^^ and it held, therefore, that 
 the very business of such terminals is to furnish faciUties 
 for railroads entering the city, and that section 3 obviously 
 could have application only to railroads as such. To be 
 contrasted with this is the Pittsburgh case later, where 
 the refusal of the Pennsylvania railroad to open its ter- 
 minals interchangeably with other systems entering the 
 city, while arrangements to that end with its own family 
 lines were made, was held not to constitute undue dis- 
 crimination.^* For it would seem clear that to claim that 
 a railroad is required to handle the cars of another over 
 its terminal trackage for a switching charge, however fair 
 the allowance might be, would undoubtedly be to give the 
 use of those terminals to its competitor, unless the through 
 rate is divided. Since the Amendments to section 1 of 
 1906 the proviso in section 3 of the Act has been necessarily 
 modified, and it is now well settled, with the Commission 
 at least, ^^ that a carrier cannot close any of its trackage 
 or its terminals to the uses of the public in through com- 
 merce, where fair compensation in one way or another is 
 allowed, and restrict service thereon to shippers or receivers 
 upon its own lines. 
 
 § 177. Switching. 
 
 Fundamentally, as the courts hold, a railroad is under 
 no obligation to deliver beyond its own trackage; at least 
 it is not bound to make delivery at its own cost beyond 
 its own lines. 1* But, if a railroad goes so far in its sched- 
 ules as to undertake dehvery within switching limits de- 
 fined therein, such track delivery becomes part of the 
 transportation service undertaken xmder the through 
 rate." Consequently, as the Commission has decided, in 
 
 1' St. Louis, S. & P. R. R. V. P. & '^ Banner Grain Co. v. Gt. North- 
 
 P. U. Ry., 26 I. C. C. 226. em Ry., 119 Minn. 68, 137 N. W. 
 
 ■8 Waverly Oil Works v. P. R. R. 161. 
 
 Co., 28 I. C. C. 621. " Interstate Commerce Commis- 
 
 " Iowa & G. M. Ry. v. C, B. & sion v. Atchison, T. & S. F. Ry., 234 
 
 Q. Ry., 32 I. C. C. 172. U. S. 294, 34 Sup. Ct. 814. 
 [140] 
 
Services Subject [ § 177 
 
 the absence of tariff provision to the contrary, rates to a 
 given point include delivery only on a carrier's own rails. ^ 
 But where a wider delivery is scheduled, the switching 
 between the tracks of a carrier and the loading and un- 
 loading points of an industry becomes part of interstate 
 transportation.^' Granting free transfer service to private 
 sidings of some consignees and refusing it to complainants 
 is, therefore, held to be unjust discrimination under the 
 Act.^^ And in the case of a reciprocal switching arrange- 
 ment, which excluded shipments of ice from its operation, 
 it was held that this constituted an unjust discrimination 
 against that traffic.^' Undue disadvantage also results, as 
 will be seen later, from failure to accord a terminal switch- 
 ing allowance to complainant, while granting it to com- 
 peting industries performing similar services. ^^ But re- 
 fusal to switch to its own team track a car received from 
 a connecting line is held not unlawful, notwithstanding 
 the fact that through mistake defendant had on several 
 occasions performed such service for others.^" Of course, 
 a railroad may not reasonably be required to accept and 
 deliver free of charge traffic moved by its competitor.^* 
 And it may charge for foreign line switching, when it 
 makes no charge for similar delivery when it gets the line 
 haul.^' What amounts to a belt line haul justifies an 
 additional transportation charge.^* And a delivering road 
 performing only switching service is entitled to due com- 
 pensation therefor.^' But it would be plain discrimination 
 in service to deliver under the rate on switching cars only 
 
 ™ Ohio Iron & Metal Co. v. C, M. '^ Railroad Commission of Ark. v. 
 
 & St. P. Ry., 28 I. C. C. 703. St. L., I. M. & S. Ry., 24 I. C. C. 292. 
 
 ^^ Alan, Wood Iron & Steel Co. v. ^ Laning-Harris Coal & Grain Co. 
 
 P. R. R., 24 I. C. C. 27. v. A., T. & S. F. R. Co., 12 I. C. C. 
 
 22 Pierce Co. v. N. Y. C. & H. R. 479. 
 
 R. R., 19 I. C. C. R. 579. " pacific Coast Jobbers & Mfgrs. 
 
 " In re Advances on Ice, 24 1. C. C. Assn. v. S. P., 18 I. C. C. 33. 
 
 660. '^ Pierce v. Pittsburgh & L. E. Ry., 
 
 " Buffalo Union Furnace Co. v. 23 I. C. C. 89. 
 
 L. S. & M. S. Ry., 21 I. C. C. R. ^scurtis Bros. Co. v. So. Pac. 
 
 620. R- R-, 23 I. C. C. 372. 
 
 [141] 
 
§ 178 ] Railroad Rate Regulation 
 
 for one concern and not for another across the street.'" It 
 is held by the Commission to be discriminatory to perform 
 switching under an arrangement with one road at a certain 
 point, while refusing to enter into similar arrangements with 
 another. '1 And a carrier may not cancel switching arrange- 
 ments with one carrier, while maintaining former arrange- 
 ments with another.'^ 
 
 § 178. Lighterage. 
 
 Problems as to lighterage cannot be solved in any case 
 until the basis upon which it is being rendered is examined. 
 Railroads terminating in a port may establish a zone of 
 delivery by water, within which they will deUver such 
 freight consigned within the limits set, using Ughters owned 
 by them or operated under their auspices.^' On the other 
 hand, lighterage may be performed to and from water 
 terminals by independent companies, operating as common 
 carriers subject to the Act, and, as such, entitled to through 
 routes and joint rates with a rail hne, so long as such rail 
 line makes similar joint arrangements with complainant's 
 competitors.'* If, by the schedules of the railroad, de- 
 livery within the port by water is undertaken, the carrier 
 may either lighter the goods itself at its own cost, or allow 
 each shipper to do it in his own way, making an allow- 
 ance to the shipper for performing the service. The 15th 
 section of the Act as amended clearly implies that a just 
 and reasonable allowance may be made to the owner of 
 property transported, when such owner renders a service 
 connected with or furnishes an instrumentality used in the 
 transportation.'^ The Sugar Lighterage Case recently 
 decided by the Supreme Court, after a long course of 
 litigation beginning in proceedings before the Commission, 
 
 "•United States Button Co. v. "Chicago Lighterage Charges, 30 
 
 C, R. I. & P. Ry., 32 1. C. C. 149. I. C. C. 390. 
 
 " Buffalo, R. & Pitts. R. R. v. " Murray Lighterage & Tr. Co. v. 
 Pa. Ry., 29 I. C. C. 114. D. & H. Co., 25 I. C. C. 388. 
 
 '" Switching at Galesburg, 111., 31 " Federal Sugar Refining Co. v. 
 
 I. C. C. 294. B. & O. R. R. Co., 17 1. C. C. 40. 
 
 [1421 
 
Services Subject [ § 179 
 
 is the last word on this subject.^^ It was there held 
 that the interstate trunk railway companies whose freight 
 rail terminals are at the New Jersey shore of New York 
 harbor, having established a zone covering substantially 
 the commercial and manufacturing river front of Greater 
 New York, within which, as a part of the transportation, 
 they perform Ughterage service without additional charge 
 to and from any pubUc or private dock, may pay a reason- 
 able compensation upon the tonnage basis to the owners 
 of a water front within such zone, who are operating a 
 sugar refinery near by, for the maintenance by them of a 
 public freight terminal station there, and for lightering 
 all freight between that station and the rail terminals, 
 without allowing similar compensation to sugar refiners 
 whose plant is situated some ten miles beyond the limits 
 of the free lighterage zone for lightering their sugar from 
 refinery to such terminals. 
 
 § 179. Drayage. 
 
 Railroads, however, commonly do not undertake de- 
 livery beyond points reached by their own rails; and, 
 generally speaking, transfer service beyond a station is 
 no part of the transportation service they offer. ^' But a 
 railroad may undertake delivery by wagon to the consignee 
 at his address; and there are instances of store door de- 
 livery in particular localities, although such a service, 
 even if once generally furnished, may later be altogether 
 discontinued.^^ It would necessarily be illegal discrimina- 
 tion between shippers in the same community to make 
 an allowance for cartage to one, and not to all others. '^ 
 But it would not inevitably be undue preference to include 
 drayage in the service to one locality, while not performing 
 it in another.^" While such delivery Service is offered 
 
 " United States v. Baltimore & O. " Washington Store Door Delivery, 
 
 R. R., 231 U. S. 274, 56 L. ed. 1107, 27 I. C. C. 347. 
 
 34 Sup. Ct. 75. =" Wright v. U. S., 167 U. S. 512, 
 
 " Southwestern Produce Distribu- 42 L. ed. 258, 17 Sup. Ct. 822. 
 
 tors V. W. R. R., 20 1. C. C. R. 458. " Interstate Com. Comm. v. De- 
 
 [143] 
 
§ 180 ] Railroad Rate Regulation 
 
 there must be no discrimination within the territory thus 
 served; merchants in one part of Washington, D. C, have 
 been held to be subjected to undue prejudice by being 
 compelled to pay a drayage charge while merchants 
 located in Georgetown, D. C, are given free pick-up and 
 delivery service." But a carrier was not required to re- 
 sume delivery of melons at piers in New York, conditions 
 justifying change of delivery from New York City to Jersey 
 City/^ Free drayage service may be necessitated by com- 
 parative disadvantage of location of station with competitor 
 to the industrial section of city.^^ But discrimination 
 cannot be justified against one locality merely because it 
 is smaller than another locality.''* A drayman may be a 
 common carrier and treated as such in his relation with 
 the railroads; *^ but, short of this actual participation in a 
 through route being shown, the Commission has no juris- 
 diction over a common-carrier transfer company. ^^ And a 
 railroad itself undertaking delivery by wagon may enter 
 into exclusive arrangements with one concern to perform 
 the trucking for it.*^ 
 
 § 180. Loading. 
 
 The present idea as to carload rates is that the consign- 
 ees will imload the cars, and that freight shipped under 
 such rates will not be required to pass through the car- 
 rier's freight houses.*^" Loading by the consignor is a long- 
 recognized rule of carload transportation.*'^ It follows 
 that loading and unloading carload freight is an extra 
 
 troit, G. H. & M. Ry., 167 U. S. 633, San Pedro v. S. P. Co., 19 I. C. C. 
 
 42 L. ed. 406, 17 Sup. Ct. 986. 323. 
 
 " Merchants & M. Assn. v. Balti- '"' Anacostia Citizens Asso. v. B. & 
 
 more & O. R. R., 30 1. C. C. 388. 0. R. R., 25 I. C. C. 411. 
 
 « Casassa v. P. R. R., 24 I. C. C. " S. Louis Drayage Co. v. Louis- 
 
 629. ville & N. R. R., 65 Fed. 39. 
 
 ** Bahrenburg Bros. & Co. v. ■"" In re Advances in Demurrage 
 
 A. C. L. R. R. Co., 24 I. C. C. 561. Charges, 25 I. C. C. 314. 
 
 "Kansas City & M. Ry. Rate "* National Wholesale Lumber Go. 
 
 Cancellation, 28 I. C. C. 640. v. A. X. C. L. R. R. Co., 14 I. C. C. 
 
 "Harbor City Wholesale Co. of 154. 
 
 [144] 
 
Services Subject [ § 181 
 
 service by the carriers/^'' The carrier, therefore, is en- 
 titled to extra compensation for such loading or unload- 
 ing^ird Yree unloading service granted to some shippers, 
 and refused to others, would be improper.^'® For the load- 
 ing and unloading of carload freight is devolved other- 
 wise upon the shipper and consignee. ^'^ It cannot, however, 
 be stated as a matter of law that it is the absolute duty 
 of carriers to unload carloads of package freight, nor that 
 this duty rests upon the shipper, as it is rather a question 
 with respect to each commodity of what, under the cir- 
 cumstances, is just and reasonable, and perhaps also what 
 has been the practice. ^^^ To make allowances based upon 
 the performance by shippers of services which shippers are 
 legally bound to render for themselves, is a violation of 
 the Act.^^ Trimming or leveling coal in the holds of ships 
 is a necessary service in connection with the transporta- 
 tion of coal by water, and where performed by the rail 
 carriers it must be regarded as a part of the delivery.^' 
 But custom and conditions justify compelling shipper to 
 stake open lumber cars.^" 
 
 § 181. Refrigeration. 
 
 When ice is actually needed, and used in transportation 
 of fruit, it depends upon the circumstances of each case 
 whether the icing is a part of preparation which can be 
 done by the shipper, or part of refrigeration which the 
 carrier has the exclusive right to furnish. Where a re- 
 frigeration service is entirely and wholly under the con- 
 trol of a carrier, which determines when ice shall be 
 
 "« Schultz-Hansen Co. v. So. Pac. Ass'n v. A., T. & S. F. Ry., 14 1. C. C. 
 
 Co., 18 I. C. C. 234. 410. 
 
 «^ Davies v. Louisville & N. R. R., *' In the Matter of Allowances for 
 
 18 I. C. C. 540. the Transfer of Sugar, 14 I. C. C. 
 
 «' Davies v. I. C. R. R. Co., 19 619. 
 
 I. C. C. R. 3. "" New England Coal & Coke Co. 
 
 «' Coke Producers' Asso. of Con- v. N. & W. Ry., 22 I. C. C. 398. 
 
 nellsville v. B. & O. R. R. Co., 27 ™ National Wholesale Lumber 
 
 I. C. C. 125. Dealers Assn. v. Atlantic C. L. R. R., 
 
 "" Wholesale Fruit & Produce 14 I. C. C. 154. 
 
 10 [ 145 ] 
 
§ 182 ] Railroad Rate Regulation 
 
 supplied and in what quantities, the amount depending 
 upon the manner in which the carrier itself handles the 
 car, the refrigeration charge should be a gross sum, and 
 shippers should not be required to pay for the ice con- 
 sumed in reicing." Loading the car, by whomsoever 
 done, must be such as to prepare the freight for shipment, 
 and a consignor may, in the absence of a regularly filed 
 tariff covering this work, not only load perishable freight, 
 such as fruit in a car placed at his warehouse, but may do 
 all other acts, including precooling necessary to fit the 
 fruit for shipment and filling bunkers in the car with ice 
 for its preservation.'^^ It should be noted that there are 
 private lines of refrigeration cars offering their services 
 to the shipping pubUc which are now subject to the juris- 
 diction of the Commission." There is no apparent dis- 
 tinction between the duty to furnish heating and duty 
 to furnish refrigeration; and in a recent case the use of 
 privately owned heater cars, and the charges which may 
 properly be made to shippers for use of such cars are 
 fully discussed.^* 
 
 § 182. Elevation. 
 
 Under the Act as amended in 1906, elevation is specific- 
 ally made such a part of transportation as to bring it 
 within the jurisdiction of the Commission, which is au- 
 thorized to determine what is a reasonable allowance to 
 the shipper for elevation services." And the courts have 
 held that the Commission has no power to forbid carriers 
 from paying or allowing for the elevation and transfer 
 of grain in transit reasonable compensation, because there 
 
 " Crutchfield & W. v. S. P. Co., C. R. R., 19 I. C. C. 22; see also 
 
 24 I. C. C. 651; see also Railroad Re Transportation of Fruit, 10 I. C. 
 
 Commission of Calif, v. Ala. G. & C. 360. 
 
 S. Ry., 32 I. C. C. 17. " In re Advances on Potatoes, 25 
 
 '2 Atchison, T. & S. F. Ry. Co. v. I. C. C. 159; see also Re Rentals for 
 
 U. S., 232 U. S. 199, 34 Sup. Ct. 291. Insulated Cars, 31 1. C. C. 255. 
 
 See also Refrigerating Charges of '* Union Pacific R. R. v. Updike 
 
 Kansas City So. Ry., 26 I. C. C. 617. Grain Co., 222 U. S. 215, 56 L. ed. 
 
 " Waco Freight Bureau v. H. & T. 171, 32 Sup. Ct. 39. 
 [146] 
 
Services Subject [ § 183 
 
 is a possibility of a future violation of the law arising 
 out of such allowances. ^^ Considering the elevator allow- 
 ance cases of Supreme Court together, the Commission 
 has concluded that it was the intention of the Supreme 
 Coiirt to hold that, whatever might be the case if railroad 
 saw fit to confine its payment to elevation actually re- 
 quired in transportation of grain, it must, when it makes 
 this allowance to one elevator, under such circumstances 
 as to give that elevator payment for commercial elevation, 
 extend the same privilege to all other elevators similarly 
 situated." A carrier subject to the Act to Regulate Com- 
 merce may either construct and operate the elevator it- 
 self, or furnish elevation by arrangement with the owner 
 of an elevator; and the amount of compensation paid by 
 the carrier to such owner is of no concern to shippers or 
 to other carriers, unless it operates to affect the rates on 
 grain, or by some device a portion of the allowance is 
 returned to shippers, and thus becomes a rebate.^' 
 
 § 183. Storage. 
 
 Storage of commodities outside of cars for convenience 
 of shippers while markets are being sought is not properly 
 carrier's function.^' It is the duty of a consignee to receive 
 his freight within a reasonable time after its arrival at 
 destination; where he neglects to do so, the Hability of 
 the railroad as a common carrier ceases and it becomes a 
 warehouseman. But the railroad is under no legal liabil- 
 ity to continue to discharge the duty of warehouseman, 
 and may insist that the freight shall be removed by the 
 consignee.*" There is no legal right in a consignee of 
 freight to use a car as a warehouse; and no right to use a 
 car or track as a trading place to the embarrassment of 
 
 >* Peavey & Co. v. U. P. R. R. *' In re Allowances to Elevators by 
 
 Co., 222 U. S. 42, 56 L. ed. 83, 32 U. P. R. R., 12 1. C. C. 85. 
 
 Sup. Ct. 1. 15' Reconsignment and Storage of 
 
 " Traffic Bureau of St. Louis v. Lumber and Shingles, 27 I. C. C. 451. 
 
 C, B. & Q. R. R., 22 I. C. C. R. "" In re Advances in Demurrage 
 
 496 Charges, 25 I. C. C. 314. 
 
 [1471 
 
§ 184] Railroad Rate Regulation 
 
 the carrier." As it is not the duty of the carrier to fur- 
 nish storage beyond a reasonable time necessary to unload, 
 the Commission has no authority by the Act, where a 
 carrier has not held itself out as granting storage, to order 
 it furnished; but, if it is furnished and charged for, stor- 
 age becomes an incident in connection with transportation, 
 and the legality of the rule becomes a proper matter for 
 consideration by the Coimnission.^^ While carload quan- 
 tities should not be received in the carrier's freight houses, 
 nevertheless, when a carrier has actually stored and han- 
 dled carload quantities, it is entitled to fair compensation 
 for the additional service."' Storage of grain beyond such 
 a reasonable time as is required for its transfer ceases to 
 have any character as transit elevation subject to the 
 Act; it becomes commercial elevation with which the 
 Commission has "held that it is not necessarily concerned.** 
 
 § 184. Transit privileges. 
 
 A transit privilege is one whereby certain things may be 
 done to goods in transit at an intermediate point without 
 losing the right to have the through rate apply .*^ And the 
 charge, therefore, usually in the form of a fixed simi to be 
 added to the through rate whatever it may be, is a regula- 
 tion affecting the rate of which the Commission has juris- 
 diction.** The Act as amended gives to the Commission 
 adequate power to regulate transit privileges, and it may 
 upon full hearing prescribe such rules therefor as will 
 in its opinion free the operation of transit privileges from 
 illegal practices." Transportation itself includes such 
 services as elevation and refrigeration, storage and de- 
 livery.** But such transit services as milling and recon- 
 
 " Wilson Produce Co. v. Penn. «* National Wool Growers' Case, 
 
 R.R., 161. C. C. 11. 23 I. C. C. 151. 
 
 «* Peale, Peacock & Kerr v. C. R. « Speigal v. S. Ry., 25 I. C. C. 
 
 R. Co. of N. J., 18 I. C. C. 25. 71. 
 
 «' Western Classification Case, 25 " Transit Case, 24 I. C. C. 340. 
 
 I. C. C. 442. «8 Re Elevation Allowances, 24 
 
 '* Matter of Elevation Allowances, I. C. C. 197. 
 14 I. C. C. 315. 
 
 [148] 
 
Services Subject [ § 185 
 
 sigmnent, bagging and compressing, are services for which 
 under the Act the carrier may not improperly be expected 
 to arrange.^' And, generally speaking, the charges for 
 fabrication in transit of any sort, if rendered, may prop- 
 erly be made sufficiently high to give a profit to the com- 
 pany.™ 
 
 § 185. Transportation services. 
 
 What is included under the head of transportation is 
 often difficult to determine; but only for such service can 
 special allowances be made to favored shippers.'^ The 
 Commission is virtually directed to limit the amount that 
 the carrier may pay to a shipper for transportation services 
 rendered by the latterJ^ And, moreover, additional 
 charges should be made for any independent service 
 rendered to any particular shipper.'^^ It is an established 
 principle that the carrier is entitled to repayment of the 
 cost of the service, together with a reasonable profit on 
 that cost, when performing auxiliary functions.'* Certain 
 matters are plainly altogether outside of what is involved 
 'in transportation. Station restaurants, news stands, 
 barber shops, and similar -private enterprises at railroad 
 terminals are no part of transportation service.'^ Services 
 rendered by the defendant in providing a place where 
 consignments of perishable produce can be handled, and 
 in assorting into lots the packages marked with the names 
 of the single dealers to whom they are consigned, is a thing 
 of value to the shipper for which he may properly be 
 required to pay.'* The merchandising of grain is not part 
 of the duty of a carrier, and for carriers to pay shippers for 
 any of the operations of such merchandising is to make 
 
 «' Becker v. B. & M. Ry., 28 I. C. " Pittsburgh Steel Co. v. L. S. & 
 
 C. 645. M. S. Ry., 27 I. C. C. 173. 
 
 '" Fabrication in Transit Charges, '* Detroit Traffic Asso. v. L. S. & 
 
 29 I. C. C. 70. M. S. Ry., 21 1. C. C. R. 257. 
 
 '' Inman, Akers & G. v. A. C. L. '' Southwestern Produce Distrib- 
 
 Ry., 32 I. C. C. 146. utors v. W. R. R., 20 1. C. C. R. 458. 
 
 " SterUng & Son Co. v. M. C. R. " Davies v. I. C. R. R., 17 I. C. C. 
 
 R., 21 1. C. C. R. 451. 186. 
 
§ 186 ] Railroad Rate Regulation 
 
 reduction from published rates by subterfuge." The Com- 
 mission, however, has no jurisdiction over alleged unreason- 
 able changes of a transfer company, where the railroad 
 carrier does not undertake to make dehvery of passenger 
 baggage at residences for rate of fare stated in its tariffs.'* 
 
 Topic C. Public Profession 
 
 § 186. Who are common carriers. 
 
 In the earlier cases of pubhc employment the profession 
 to serve all that appear was spoken of as the assumption 
 of a public trust in undertaking the business or as granting 
 to the public of an interest in that business. The original 
 rule was clearly expressed over two centuries ago by 
 Lord Holt that, wherever any subject takes upon himself a 
 public trust for the benefit of the rest of his fellow-subjects, 
 he is eo ipso bound to serve the subject in all the things 
 that are within the reach and comprehension of such an 
 office, under pain of an action against him. Common 
 carriage, as the cases have always pointed out, involves a 
 certain kind of service performed under certain conditions.- 
 In order to determine whether a person is a common 
 carrier, it must be determined first, whether his business is 
 that of carrying, second, whether it is a public one. One 
 who is transporting goods from place to place for hire as 
 his principal occupation for all that see fit to employ him 
 is a common carrier. A common or public carrier, whether 
 of goods or of passengers, is one who is engaged in carrying 
 as a public employment. "One who by virtue of his call- 
 ing undertakes for compensation to transport personal 
 property from one place to another for all such as may 
 choose to employ him" — is one succinct definition.^' 
 "A person who undertakes to transport from place to 
 place for hire the goods of those who choose to employ 
 
 " Gund & Co. V. C, B. & Q. R. R., " Jackson Architectural Iron 
 
 18 I. C. C. 364. Works V. Hurlbut, 158 N. Y. 34, 
 
 "Cosby V. Richmond Transfer 38, 52 N. E. 665, 70 Am. St. Rep. 
 
 Co., 23 I. C. C. R. 72. 432. 
 
 [150] 
 
Services Subject [ § 187 
 
 him" — is another.*" It is, therefore, recognized every- 
 where, in the commissions as well as in the courts, that the 
 test is whether service is rendered particular customers or 
 whether there is service offered to every shipper who comes 
 along. 
 
 § 187. Commitment to public service. 
 
 When there has been general solicitation of the pubUc, 
 there can be little doubt of the public profession. Some- 
 thing, therefore, must be found to show that in the service 
 in question there has been a conmiitment to the public 
 service.*^ But so long as a road holds itself out as a 
 common carrier, and trunk lines make joint rates with it, 
 innocent third parties have a right to assume that the 
 road is what it purports to be.*^ Incorporation is not a 
 condition precedent to right to be a common carrier by 
 rail, so far as interstate transportation is concerned.*' 
 By the terms of the Act it makes no difference by whom 
 the service is conducted; therefore holding under a track- 
 age agreement wiU be considered to be tantamount to 
 ownership of a line over which the trackage privilege 
 exists.*^ If a lessor company is chartered as a carrier, it 
 appears to be subject to the Act, though the transporta- 
 tion is actually furnished by another.*^ Where a city has 
 constructed a railroad in order to reach a certain market, 
 and leases the same to another railroad, questions of rea- 
 sonableness of rates stand exactly as if the road had been 
 built by private capital.*^ A lessor may, therefore, be in 
 such a position that the law will hold it ultimately re- 
 sponsible for the rendering of the service, as was pointed 
 out in a recent case in the Supreme Court.*' And, as was 
 
 ™ Elkins V. Boston & M. R. R., " Tap Line Case, 23 I. C. C. 277. 
 23 N. H. 275. «= Heck v. East Tenn. & O. G. Ry., 
 
 «' Mfrs. Ry. Co. v. St. L., I. M. & 1 Int. Com. Rep. 775, 1 1. C. C. 495. 
 S. Ry., 21 1. C. C. R. 304. *« Receivers' and Shippers' Ass'n 
 
 '^ St. Louis, S. & P. R. R. V. P. & of Cincinnati v. C, N. O. & T. P. Ry., 
 
 P. U. Ry., 26 L C. C. 226. 18 L C. C. 440. 
 
 " Crescent Coal & Mining Co. v. " No. Carolina R. R. Co. v. Lack- 
 
 C. & E. I. R. R., 24 I. C. C. 149. ery, 232 U. S. 248, 34 Sup. Ct. 308. 
 
 [151] 
 
§ 188 ] Railroad Rate Regulation 
 
 said in another case at about the same time, any attempt to 
 cloak the actual control of the interstate transportation by- 
 having a holding company will fail of its purpose,** 
 
 § 188. Nature of public profession. 
 
 The plainest justification for the imposition of the 
 extraordinary law which requires those who are in public 
 callings to serve all that apply at reasonable rates, is that 
 in initiation the service is voluntary. People are not 
 forced into public service against their wills; it is only when 
 they have held themselves out in some way as ready to 
 accommodate all that apply that they are boimd to serve 
 indiscriminately. Such a case is that of the lighterman, as 
 was decided in the leading case of Ingate v. Christie,** 
 where Baron Alderson delivered the following opinion: 
 "Everybody who undertakes to carry for any one who 
 asks him, is a common carrier. The criterion is, whether 
 he carries for particular persons only, or whether he 
 carries for every one. If a man holds himself out to do it 
 for every one who asks him, he is a common carrier; but 
 if he does not do it for every one, but carries for you and 
 me only, that is matter of special contract. Here we have 
 a person with a counting-house, 'lighterman' painted at his 
 door, and he offers to carry for every one." On the other 
 hand, where the employment is casual only, and not a 
 regular matter of business, the carrier is not a common 
 carrier. As was said in the leading case of Allen v. Lack- 
 neles^" by Mr. Justice Parker: "The only question in the 
 case is, were the defendants common carriers? The facts 
 
 88 United States v. Union S. Y. & » 37 N. Y. 341. 
 
 T. Co., 226 U. S. 286, 33 Sup. Ct. 83. But the Commission wiU not recog- 
 
 8' 3 Car. & K. 61. nize as common carriers any lines 
 
 The Commission rejects the theory that do not publish tariffs in lawful 
 
 that a railroad is a common carrier form, or concur properly in lawful 
 
 only for those who have been accus- tariffs of other lines, or that do not in 
 
 tomed to patronize it, and that it all other respects comply with the 
 
 can favor its old customer at the ex- law. Star Grain & L. Co. v. A., T. & 
 
 pense of its new ones. In re Mine S. F. Ry., 17 I. C. C. 338. 
 Ratings, 25 I. C. C. 286. 
 
 [152] 
 
Sekvices Subject [ § 189 
 
 found by the referee do not, I think, make the defendants 
 common carriers. They owned a sloop; but it does not 
 appear that it was ever offered to the public or to in- 
 dividuals for use, or ever put to any use, except in the 
 two trips which it made for the plaintiffs, at their special 
 request. Nor does it appear that the defendants were 
 engaged in the business of carrying goods, or that they 
 held themselves out to the world as carriers, or had ever 
 offered their services as such. This casual use of their 
 sloop in transporting plaintiffs' property fails short of 
 proof sufficient to show them common carriers." 
 
 § 189. Extent of the power of regulation. 
 
 What would seem to be a constitutional limitation upon 
 the regulating power should be noted. Regulation of this 
 peculiar sort, going to the extent of compulsory service, 
 should be confined to what may properly be considered 
 public calHngs. Unless the business in question is one 
 which is public in character it is not one which it would be 
 due process of law to regulate to the extent of fixing its 
 rates. And unless in the particular instance the business 
 is being conducted upon a public basis, regulation to that 
 extent of what is still a private affair would be equally 
 improper. Thus although the Supreme Court has held in a 
 principal case that the rates at grain elevators might be 
 regulated,^^ it has poiated out in a later case that this 
 would not be applicable to a man who was simply storing 
 his own grain in his own elevator.'^ The business must be 
 one in which the public has an interest, and at the same 
 time one in which the proprietor has committed himself to 
 serve the public. Those who conduct wharves as landings 
 for the pubhc must serve all at reasonable rates; ^' but at 
 his private wharf one may discriminate as he pleases in 
 
 " Munn V. Illinois, 94 U. S. 213, " Transportation Co. v. Parkers- 
 
 24 L. ed. 77. burg, 107 U. S. 691, 27 L. ed. 584, 2 
 
 " Brass ex rel. v. Stoesser, 153 U. S. Sup. Ct. 732. 
 391, 38 L. ed. 757, 12 Sup. Ct. 468. 
 
 [153] 
 
§ 190 ] Railroad Rate Regulation 
 
 the conduct of his business.'* For the legislature to make 
 a general rule apphcable to all concerns in certain busi- 
 nesses, or for a commission acting by its authority, to 
 order that the public should be served by any particular 
 company, unless both requisites are present, would seem 
 to deprive the owners and proprietors of their hberty and 
 property. When the proprietors have never taken any- 
 thing but their own oil through these lines, or at all events 
 never made any profession of taking oU for others, can 
 they be said to have committed themselves to pubhc 
 service? The Supreme Court in the Pipe Line Cases '* 
 recognizes this as a general principle, perhaps, but points 
 out that in the particular cases before them there were 
 found such special circumstances of interdependent pur- 
 chase and transportation as to justify the action taken by 
 the Commission under the discretion of the Congress to 
 prevent restriction of commerce by the monopoly created. 
 Not long before in a case not altogether dissimilar, as it 
 involved the effect of interrelations, the same court *° 
 had held that where a railroad system engaged in inter- 
 state commerce controls through stock ownership a wharf 
 company which has been chartered for the pitrpose of 
 furnishing terminal facilities, the conduct of such a ter- 
 minal being public in character, is subject to the jurisdic- 
 tion of the Interstate Commerce Commission. 
 
 § 190. Public railroads. 
 
 A public railroad is one which holds itself out as ready 
 to engage in transportation for hire as a public employ- 
 ment; and generally the rights of the liabihty of a common 
 carrier do not attach to one who does not so hold itself 
 out." But if a railroad offers its services to all the pubhc 
 who are in a position to avail themselves thereof, the 
 
 " Weems Stb. Co. v. People's Stb. « Southern Pac. Terminal Co. v. 
 
 Co., 214 U. S. 345, 53 L. ed. 1024, Int. Com. Comm., 219 U. S. 498, 31 
 
 29 Sup. Ct. 661. Sup. Ct. 279. 
 
 9» United States v. Ohio Oil Co., '"Kansas City v. K. C. V. & T. 
 
 234 U. S. 548, 34 Sup. Ct. 946. Ry., 24 I. C, C. 22. 
 
 [154] 
 
Services Subject [ § 191 
 
 fact that the class actually using it was limited does not 
 render it any the less a common carrier.'* When a pubUc 
 railroad builds a branch line from its road, primarily to 
 accommodate some individual business, it is nevertheless 
 a common carrier over the branch, and the use of the 
 track is open to all who have occasion to use it as well as 
 to the particular individual for whose benefit it was built. 
 The taking of land for a spur track to connect with a 
 single industry is a taking for public use, if the purpose 
 of the company is to maintain and operate such track as an 
 integral part of its railway system, so as to serve all who 
 may desire it, and all can demand, as a right, to be served 
 without discrimination.'^ The distinction between the 
 public branch and the private spur appears to lie merely 
 in the facts as to the use which can be made of the road. 
 If it runs for a considerable distance, so that at a future time 
 demands not now in existence may come into being and 
 the road may be of use to a number of persons, it is a 
 public road. If, however, the premises of the individual 
 benefited either directly adjoin the railroad or are separ- 
 ated only by a few feet, so that the intervening land can 
 be accommodated from the main track, then the use is a 
 private one; and that was the fact in the cases previously 
 examined of private spurs.''" 
 
 § 191. Private railroads. 
 
 It will follow from what has been said that a railroad, 
 constructed and used merely in connection with the con- 
 duct of a private business, is not a common carrier. A 
 railroad built to haul logs out of the forest, nothing more 
 than a logging railroad appurtenant to a sawmill, con- 
 structed wholly on private grounds, and operated for 
 private purposes, is not a common carrier, charged with 
 all the duties and responsibilities incumbent by the laws 
 
 « Mfgrs. Ry. Co. v. St. L., I. M. & L. R. A. 240, 88 Am. St. Rep. 918. 
 
 S. Ry., 28 I. C. C. 93. »"• ShoU v. German Coal Co., 118 
 
 " Chicago & N. W. Ry. v. More- lU. 427, 10 N. E. 199, 59 Am. Rep. 
 
 house, 112 Wis. 1, 87 N. W. 849, 56 329, 
 
 [155] 
 
§ 192 ] Railroad Rate Regulation 
 
 of the land upon common carriers.' Even such a railway 
 may be a public one, as a Minnesota case holds: "If all 
 the people have the right to use the road it is a public 
 use or interest although the number who have business 
 requiring its use may be small." ^ It has been held in 
 Louisiana that "a railway, whose sole object was to foster 
 the private ends of two certain persons named, who 
 owned jointly two sugar plantations, and who wished to 
 transport the sugar cane grown on one of the plantations 
 to the refinery situated on the other, was not, ex necessi- 
 tate, such a corporation for public improvement as would 
 authorize the expropriation of private property for its pur- 
 poses." ^ And a railroad used in transporting property 
 within a private stock-yard is not a common carrier/ 
 
 § 192. Industrial railways. 
 
 An added importance has accrued to this subject be- 
 cause of the comparatively recent invention of a kind 
 of railway known as the "iadustrial" railway. This is 
 a short line of railway, owned by an industrial corporation 
 or by the owners of some business enterprise, and con- 
 necting the factory or the place of business with the main 
 line of some railway.^ It may amount to no more than a 
 short spur track; but it is organized as an independent 
 railway corporation, and the owners of the industrial 
 enterprise are its stockholders. If such a road, however 
 short it may be, is actually operated independently with its 
 own locomotives and cars, it would seem to be an in- 
 dependent carrier, though it is operated for the exclusive 
 
 ' Wade V. Lutcher & Moore Lum- * Tap Line Cases, 23 Int. Com. 
 
 ber Co., 74 Fed. 517, 20 C. C. A. 515, Rep. 277. 
 
 33 L. R. A. 255. The term "common carrier " used 
 
 * Kettle River R. R. Co. v. Eastern in the Act means those carriers which 
 Ry., 41 Minn. 461, 43 N. W. 469, are common carriers at common law, 
 6 L. R. A. 111. and which have compUed with such 
 
 ' WiUiams v. Judge of Eighteenth requirements as may be imposed by 
 
 Judicial Dist. Ct., 45 La. Ann. 1295, constitutional or legislative author- 
 
 14 So. 57. ity. Mfrs. Ry. Co. v. St. L., I. M. 
 
 * Swift V. Ronan, 103 HI. App. 475. & S. Ry., 21 I. C. C. 304. 
 
 [156] 
 
Services Subject, [ § 193 
 
 benefit of the industrial enterprise which owns it; and this 
 is certainly the case where it accepts such general traffic 
 along its line as may be offered to it. Of the possibilities 
 of the recognition of such railway as carriers subject to 
 the Act, the Commission^ quite early said, by Mr. Com- 
 missioner Prouty: "The Illinois Northern Railroad is a 
 common carrier within the first section of the act to regu- 
 late commerce. It is incorporated as a railroad company 
 under the laws of lUinois. It actually owns and oper- 
 ates a line of raihoad. It maintains a freight station, at 
 which it receives and delivers for the general pubUc con- 
 siderable quantities of less than carload freight. Its 
 main business is the moving of loaded cars to and from 
 various industries along its line, and in this capacity it 
 serves more than two hundred plants, besides that of the 
 International Harvester Company. Manifestly there is 
 no reason in law why this railroad may not make joint 
 rates, file joint tariffs and agree upon joint divisions as 
 other railroads do. We are not called upon to decide what 
 the situation might be if this road were a private carrier 
 maintaining switch tracks and switching cars to and from 
 the McCormick works exclusively. The mere fact that 
 this road is to-day entirely owned by the largest individual 
 shipper over it, or that it was originally organized and 
 built for the purpose of doing the work of that shipper, 
 is not, in our opinion, controlling against the legahty of 
 the transaction before us." 
 
 § 193. Joint rates. 
 
 If such an industrial railway be a common carrier, a 
 through rate may be fixed, originating at the point of load- 
 ing the timber, together with a milling-in-transit privilege.'' 
 
 " Re Divisions of Joint Rates, 10 the same as from other shippers. 
 
 I. C. C. Rep. 385. 28 I. C. C. 93. 
 
 An industrial line, held to be a ' Central Yellow Pine Asso. v. 
 
 common carrier, is thereafter a pubUc Vicksburg, etc., Ry., 10 Int. Com. 
 
 agency which should collect its Co. Rep. 193. 
 charge from former owning industry 
 
 [157] 
 
§ 193 ] ' Railroad Rate Regulation 
 
 But it is always insisted in this regard that with respect 
 to through transportation, at joint rates, the Act applies 
 only to common carriers.* If, therefore, an industrial rail- 
 way may properly be held to be a common carrier, it is 
 entitled to enter into through routes on interstate traffic.^ 
 And, if it be deternuned that the railway is a true common 
 carrier, it is as such entitled to a division of the through 
 rate, the fact that the road is owned by the largest in- 
 dividual shipper over it being of no consequence in this 
 connection.^" Industrial lines controlled financially by 
 same persons who control the industries which furnish the 
 bulk of their tonnage have repeatedly been held to be 
 common carriers, and entitled to divisions." And this is 
 true, although the trackage was originally built for the 
 purpose of doing the work of a particular shipper. ^^ The 
 Commission is not concerned with fact that one shipper 
 also owns the mill in which such shingles were produced, 
 while another shipper has purchased the same from the 
 producer.^' It should be emphasized that the Commission 
 has jurisdiction to fix the maximum divisions to be al- 
 lowed to industrial railways." But it should be noted 
 that transportation allowances under section 15 can only 
 be made to "the owner of property transported." ^^ The 
 Commission will scrutinize the situation to see if favors 
 to a tap line are being given, where there is doubt as to 
 being a common carrier, and whether continuance of di- 
 visions with it may not be working a discrimination against 
 other shippers.^* But whether a carrier may grant an 
 allowance to a terminal road that is a common carrier, 
 
 ' Mfgrs. Ry. Co. v. St. L.j I. M. & " Reconsignment and Storage of 
 
 S. Ry., 21 I. C. C. 304. Lumber and Shingles, 27 I. C. C. 
 
 » St. Louis, S. & P. R. R. V. P. & 451. 
 
 P. V. Ry., 226. » L. & N. R. R. Co. v. M., St. P. & 
 
 '» Star Grain, etc., Co. v. Atchison, S. S. M. Ry., 24 I. C. C. 639. 
 
 etc., Ry., 17 I. C. C. 338. " B. & G. N. R. R. v. A., T. & S. P. 
 
 " McCloud R. L. Co. v. S. P. Co., Ry., 24 I. C. C. 161. 
 
 24 I. C. C. 89. " C. V. & N. Ry. Co. v. M., St. P. 
 
 12 Crane R. R. Co. v. P. & R. Ry., & S. S. M. Ry., 24 1. C. C, 634. 
 15 I. C. C. 248. 
 
 [158] 
 
Services Subject [ § 194 
 
 while denying such allowance to a terminal road not a 
 common carrier, is not altogether clear." It is, however, 
 well estabUshed that common-carrier industrial roads are 
 entitled to be parties to through routes.^* Moreover, the 
 Commission, in the exercise of the power it now possesses, 
 will inquire whether the line in question has held itseK 
 out as being a carrier for the public." If former joint 
 arrangements between trunk lines and industrial lines are 
 cancelled, the Commission may require them to be re- 
 stored.^" The withdrawal of a joint rate which resulted 
 in advance may be held not to be justified, and the former 
 rate may be restored. ^^ 
 
 § 194. Tap lines. 
 
 If the "industrial railway" is simply a "tap line," not 
 a common carrier operating a service over its rails for 
 all that apply, it cannot pose as an independent carrier 
 and demand the right to enter into prorating arrange- 
 ments with succeeding carriers. It was pointed out in the 
 recent Tap Line cases ^^ that whether a company or person 
 claiming to be a common carrier is a common carrier 
 at all and for all purposes, is a question of fact, and 
 whether the service performed for a particular person is a 
 service of transportation or an industrial service, is also a 
 question of fact; and that where the holding out as a 
 common carrier is in furtherance of a plan to secure un- 
 lawful advantages, and the alleged carrier is able to pick 
 up some traffic that is incidental to that purpose, it must 
 
 " Soft Coal Rates from Southern '' 23 I. C. C. 277. 
 
 Illinois to Arkansas, 26 I. C. C. 135. Incorporation of plant facility, to 
 
 " Tap Line Case, 23 I. C. C. secure rebate in form of divisions or 
 
 549. allowances will not avail. Colonial 
 
 " Stonega C. & C. Co. v. L. & N. Salt Co. v. M. I. & I. L., 23 1. C. C. R. 
 
 Ry. Co., 23 I. C. C. 17. 358. 
 
 *> Cancellation of Joint Rates in A railway operating a switching 
 
 Connection with C. Z. & G. R. R., service to and from trunk lines may 
 
 27 1. C. C. 353. be an interstate carrier. Auton 
 
 " Buffalo Union Furnace Co. v. Piano Co. v. Chicago & St. P. Ry., 
 
 L. S. & M. S. Ry., 21 1. C. C. 620. 152 Wis. 156, 139 N. W. 743. 
 
 [159] 
 
§ 195 ] Railroad Rate Regulation 
 
 be regarded simply as a cloak or device to effect unlawful 
 results. The question, whether allowances from the 
 published rate made by the roads west of the Mississippi 
 to logging roads or "tap lines," as they are called, owned 
 or controlled by the lumber mills, constituted departures 
 from published rates in violation of the Act to Regulate 
 Commerce, was presented for decision by the Commission 
 m the case of The Central Yellow Pine Association v. 
 The Vicksburg, Shreveport & Pacific Raikoad,^' and it 
 was held, that the pubUshed rate must be strictly ob- 
 served; that the defendants were not authorized imder 
 the law "to grant a division of the rate to the owner of a 
 lumber mill as compensation to him for the cost of bring- 
 ing his logs to the mill by steam railroad, horse railroad, 
 wagon, or any other means of conveyance;" and that a 
 common carrier subject to the provisions of the Act to 
 Regulate Commerce can "allow a division of rates only to 
 another common carrier which, participating in the par- 
 ticular traffic to which the rate is applied, is also subject 
 to those provisions." 
 
 § 195. Plant facilities. 
 
 If the railway performs no part of the through haul, 
 as even the tap lines do, it is merely an integral part of 
 the industry, doing the shipper's work exclusively, and no 
 payment may lawfully be made. This seems clear, for a 
 carrier cannot pay the cost of carriage from a point off 
 its line to a point on its line either for the purpose of 
 getting business that otherwise it would not get, or for 
 the sake of developing new territory. The Commission 
 has long been wrestling with the problem of whether in a 
 given case there is a tap line or a plant facility.^* Following 
 
 '' 10 I. C. C. 193. which does nothing but transport 
 
 A water carrier, owned by shipper lumber of its owners will be forbidden, 
 
 is not entitled to through routes and Star Grain & L. Co. v. Atchison, T. & 
 
 joint rates, though incorporated as a S. F. Ry., 17 I. C. C. 338. 
 common carrier. Gulf Coast Navi- " Storega C. & C. Co. v. Louisville 
 
 gation Co. v. K. C. S. Ry., 19 I. C. C. & N. R. R., 23 I. C. C. 17. 
 R. 544. And divisions with a tap line 
 
 [160] 
 
Services Subject [ § 196 
 
 the tests suggested above, it has held certain tap lines not 
 to be common carriers at all, but merely plant facilities."' 
 It has insisted recently that incorporation by an indus- 
 try of a railroad company to operate its plant tracks 
 does not give carriers a legal basis for reheving the in- 
 dustry of the cost of operating that part of its plant 
 facilities, by division out of the rates of the trunk line 
 carriers."® In other words, all allowances to plant facilities 
 it tends to regard as illegitimate."' It makes no differ- 
 ence what form those take, a plant facility cannot have 
 allowance for such service."* Thus the Commission has 
 held payment of allowances or division to a boat line, which 
 is a mere plant facility, to be an unlawful rebate."' And, 
 of course, it will not permit a division of a through rate 
 with such services, used simply as a device to evade the 
 law.^" And if a tap hne is found to be a plant facility 
 of its proprietary lumber company, it will support a 
 cancellation of joint rates previously in force.'^ It should 
 be noted that the Commission cannot compel a trunk line 
 to make allowance to an industry under section 15 for serv- 
 ices rendered by industrial lines.'" Indeed, if it is a mere 
 plant facility the carrier will not be permitted to make 
 any allowance for the use of a switch. '' 
 
 § 196. Line haul. 
 
 Ever since the introduction of the industrial spur, it has 
 been the common practice in this country, and the law 
 taken more or less for granted, that the transportation of 
 carloads under the through rate began with picking up 
 the loaded car on the spur track of the shipper, and ended 
 
 25 Tap Line Case, 23 1. C. C. R. 277. '» Gottron Bros. v. G. & W. R. R., 
 
 » Mfgrs. Ry. Co. v. St. L., I. M. & 28 I. C. C. 38. 
 
 S. Ry., 28 I. C. C. 93. " Joint Rates with Washington 
 
 " Star Grain & L. Co. v. A., T. & Western Ry., 27 I. C. C. 630. 
 
 S. F. Ry., 17 I. C. C. 338. " Absorption of Switching Charges 
 
 2« Crane Iron Works v. Central at St. Louis, 32 1. C. C. 100. 
 
 R. R. of N. J., 17 I. C. C. 614. ^' Re Munoie & W. R. R., 30 
 
 » Colonial Salt Co. v. M. I. & L L., I. C. C. 434. 
 23 L C. R. C. 358. 
 
 11 161 ] 
 
§197] Raileoad Rate Regulation 
 
 when spotted at the point designated for unloading on the 
 spur track of the consignee. Such was until recently 
 clearly enough the position of the Commission, and the 
 courts have always upheld rulings based upon this theory. 
 The Los Angeles Switching cases ^* in which the Supreme 
 Court handed down the latest opinion on these points is 
 ample evidence of this attitude. In the meantime in the 
 Clearfield Coal District cases, ^^ the Supreme Court had 
 held that switching movements over industrial tracks may 
 well be part of transportation, if the rate applies to the 
 district, and that consequently making an allowance to the 
 coal companies for performing this part of the transporta- 
 tion was not discrimination in the eye of the Act. The 
 determination that the service performed in switching cars 
 to and from the line is a service performed by the shipper 
 in connection with transportation, depends on two ques- 
 tions. First, what are the limits of the line carrier's 
 transportation service? If the basis upon which the 
 railroad is professing to serve extends up to the door of the 
 proprietary works, when a shipment starts to move from 
 that point, it may be said that the carrier's obligation as 
 such has begun. Second, is the line carrier permitting the 
 shipper to perform a part of this service that otherwise it 
 would be obliged to do? If so, a fair allowance may be 
 made in accordance with section 15 of the Act. 
 
 § 197. Intermingled service. 
 
 If any summary of the situation as at present existing 
 should be attempted, it must be realized that, in the way 
 
 '* Interstate Commerce Commis- tion thereof in 32 I. G. C. 129, is to 
 
 sion V. Atchison, T. & S. F. Ry., 234 be noted. 
 U. S. 294, 34 Sup. Ct. 291. Indeed since these decisions the 
 
 '' Mitchell C!oal Co. v. Pa. Ry., Commission has entered a final order 
 230 U. S. 247, 33 Sup. Ct. 916. in the Tap Line Cases, 31 I. C. C. 
 ' The sweeping ruling in the Indus- 490, fixing allowances for all switch- 
 trial Railways Case, 29 I. C. C. 212, ing services upon a duly graduated 
 against allowances for switching was scale proportional to the service 
 handed down previously to the Su- rendered; see also the Birmingham 
 preme Court cases governing this So. Ry. Case, 32 I. C. C. 110. 
 matter cited above; and the modifica- 
 
 [162] 
 
Sebvices Subject [ § 197 
 
 the Commission has latterly been inclined to view the 
 problem of the industrial railways, the services rendered by 
 industrial railways to their proprietary industries may be 
 any or all of three very different kinds: 1. The industrial 
 railway may be a true common carrier, and thus be in the 
 position of the initial or ultimate carrier as to the shipper 
 industry; but unless the industrial railway is a true com- 
 mon carrier no division of a through rate jointly estab- 
 lished can be made. 2. The shipper owning a tap line 
 with the permission of the carrier may perform part of 
 the service that it would otherwise be the line carrier's 
 duty to transport. 3. The character of the trackage may 
 be exclusively that of a plant facility; it may be merely 
 part of the appliances and equipment of the plant, engaged 
 in carrying the raw material in process of manufacture 
 from building to building, or from the plant to the line 
 carrier, thus performing services that the carrier is not 
 undertaking to do, any more than if the carriage were 
 by dray.^^ Of course in the matter of allowances or 
 divisions, if so large an amount is paid as to amount to a 
 rebate, or if allowances are made to some and not to others 
 so that there is a discrimination, the Commission theoretic- 
 ally has ample power. Where the line carrier makes only 
 proper payments to these industrial railways for services 
 rendered, no objection may be interposed, provided the 
 service is one which the line carrier is bound by its under- 
 taking of transportation to render.'^ If the industrial 
 railway were performing one and only one of the three 
 services outlined above, the problem would be a com- 
 paratively simple one. However, such is not usually the 
 
 ^' In the Tap Line Cases it was for the proprietary industry. 234 
 
 held that it was an arbitrary exercise U. S. 29, 34 Sup. Ct. 741. 
 
 of power for the Interstate Commerce " In the Butler County Railroad 
 
 Commission to determine the nature Case it was held that a proprietary 
 
 of the service performed by an indus- tap line if a common carrier was as 
 
 trial railway merely by ascertaining much entitled to a division of the 
 
 whether or not the work was done through rate as any carrier subject to 
 
 the Act, 234 U. S. 29, 34 Sup. Ct. 748. 
 
 [163] 
 
§ 198 ] Railroad Rate Regulation 
 
 case. The carrier is found to be performing at least two 
 of these services, and not only for the proprietary indus- 
 try, but for others. Thus the line of demarcation between 
 the services it is rendering for which the line carrier should 
 pay, and those which are purely shippers' services becomes 
 difficult and at times impossible to define. And it may be 
 that the problem can never be handled with complete 
 satisfaction until an absolute severance of these services is 
 enforced. 
 
 Topic D. Public Duty 
 
 § 198. Public obligation the fundamental principle. 
 
 From the very beginning of our law, as has been seen, 
 it has been recognized that some kinds of business were of 
 special importance to the public, and that all persons 
 engaged in such business owed the pubUc peculiar duties. 
 No one could be compelled to enter upon the employ- 
 ment; but if he chose to do so, he thereby undertook the 
 performance of the public duties connected with it. The 
 property which he devoted to the public employment was 
 held to be affected with a public interest, ceasing to be 
 juris privati only, as Lord Hale said so long ago. Plainly 
 this is more true to-day than ever before; for the over- 
 shadowing importance of the pubUc services in our modern 
 life must be obvious to all. But the extent to which the 
 primary duty of public service may go is just beginning to 
 be appreciated. The duty placed upon every one exer- 
 cising a public calling is primarily a duty to serve every 
 man who is a member of his pubhc.'^ Implicit in this 
 primary duty, necessarily involved in its fuU performance 
 are various requirements. Not only must all be served, 
 they must have adequate service; not only must they not 
 be charged extortionate rates, but there must be no dis- 
 crimination practiced. In such an elaborated statement 
 
 38 The rails of a common carrier Bureau v. C., C. C. & St. L. Ry., 26 
 constitute the pubhc highway of I. C. C 53. 
 modern times. Indianapolis Freight 
 
 [164] 
 
Services Subject [ § 199 
 
 there is no more than the plain recital of the present 
 recognition of different aspects of pubUc duty. The duty 
 to serve the public is the fundamental principle from which 
 all the rules of pubHc service may be derived.'' In a true 
 sense, therefore, the law governing public service is an 
 entirety. 
 
 § 199. Nature of the public duty. 
 
 The fimdamental fact in public employment is the 
 public duty which results in all cases from public profes- 
 sion of a public caUing.*" It is somewhat difficult to place 
 this exceptional duty in our legal system. It is hke the 
 contractual obUgation in that it is an affirmative duty to 
 act for a certain person; but it is different in that it does 
 not depend upon assent of the party charged. It is like 
 the obligation in tort in that it is imposed by law; but it is 
 not imposed upon anyone against his will as is the obliga- 
 tion in tort. In one sense the obligation to serve the pub- 
 lic is voluntarily assumed; and therein the public duty to 
 act differs from the typical duty not to commit a tort, 
 which each person without his ever being consulted owes 
 to all the world. And yet once this obUgation is estab- 
 hshed by his imdertaking, his duty extends to all within 
 the profession, however unwilling he may be in a particular 
 case to render service. Public duty is in this sense im- 
 posed by law upon those who put themselves into public 
 service; and therein very plainly the situation differs from 
 the typical contractual duty which one owes only in 
 particular cases to the persons with whom he has volun- 
 tarily negotiated a previous agreement. If one may thus 
 employ the two traditional phrases, the duty is absolute 
 
 '' Being a common carrier is a *" Every common carrier owes a 
 
 status existing as a matter of fact; duty to the entire public, and each 
 
 but the Commission can decide by owes a duty to serve the communi- 
 
 the tests accepted in law whether ties which it reaches with its lines, 
 
 or not the condition exists. Cancel- Aransas Pass C. & D. Co. v. G. H. & 
 
 lation of Joint Rates on C. Z. & G. S. A. Ry., 27 I. C. C. 403. 
 R. R., 27 I. C. C. 353. 
 
 [165] 
 
§200] Railroad Rate Regulation 
 
 rather than relative. For it is a duty imposed by law 
 regardless of dissent in particular instances, not one for 
 which the actual assent of the person obhged is necessary 
 in every case.*^ And yet it must be obvious that in public 
 obUgation we have an intermediate case in many respects. 
 It is Uke a status which one is under no obligation to 
 enter except by his own free will; but, once having com- 
 mitted himself to it, the duties pertaining to that status 
 are devolved upon him by operation of law regardless of 
 his own wishes. However, he is committed to it no fur- 
 ther than the peculiar law governing the situation requires. 
 
 § 200. Limitations upon the profession. 
 
 PubUc profession not only establishes public obUgation, 
 but it largely determines the extent of the pubHc duty. 
 Just as people cannot be forced to serve unless they have 
 made public profession, so they cannot be forced to serve 
 beyond what their profession covers. There is some 
 authority in the English cases for the proposition that a 
 carrier may limit his undertaking not only as to the 
 nature of the goods carried, but also as to the points 
 between which he will carry certain goods; so that, for 
 instance, a railway having established three stations, and 
 being a carrier of both coal and iron, might be a common 
 carrier of iron between stations 1 and 2 only, and of coal 
 between stations 2 and 3 only, refusing to receive for 
 carriage iron at station 3 and coal at station 1. "He may 
 limit his obligation to carrying from one place to another, 
 as from Manchester to London, and then he would not 
 be bound to carry to or from the intermediate places." ^^ 
 
 *' The obligation of the common *^ Johnson v. Midland Ry., 4 Exch. 
 
 carrier to serve is a broad one, and 367. 
 
 cannot always be performed on that Railroads should not be allowed to 
 
 basis which is most advantageous so divide and diversify themselves 
 
 to the carrier. Rates from Walsen- by contract and traffic agreements as 
 
 burg Coal Field, 26 I. C. C. to work a practical discrimination. 
 
 85. Cedar Hill Coal & Coke Co. v. A., T'. 
 
 & S. F. Ry., 15 I. C. C. 73. 
 
 [166] 
 
Services Subject [ § 201 
 
 This is brought out, although in too extreme a form, by 
 the way in which the question was introduced to the jury 
 by a federal judge, in a recent case/^ "The questions 
 put, therefore, resolve themselves into this: Who shall 
 have control of the operation of the road, — the company 
 or its customers? Who shall determine what the railroad 
 will transport, — the company or the shippers? Who shall 
 say to what points the company will transport goods, — 
 the company or its customers? Who shall say what the 
 means and methods of transportation shall be, — the 
 company or its customers? In short, who shall determine 
 what the business of the company shall be and how it 
 shall be carried on? Solved by the principle of the com- 
 mon law and common sense, it must be the company, as 
 all will agree that no railroad could be operated at all by 
 those who patronize it." 
 
 § 201. Public duty the basis. 
 
 The fundamental duty in public employment is to serve 
 all who apply; and this duty has important consequences. 
 Therein public employment differs altogether from private 
 business; and while it is true that a man in ordinary 
 business must be permitted to manage his own affairs in 
 his own way, the argument is not apphcable to public 
 callings.*'' The State may, for instance, dictate the price 
 at which a common carrier must serve, because the law 
 requires the carrier to serve the public properly. It would 
 be idle to lay upon the common carrier the duty to serve 
 all who apply and at the same time permit that carrier 
 to charge any extortionate rate that it might be his fancy 
 
 " Harp V. Choctaw, O. & G. Ry., for each particular service of trans- 
 
 118 Fed. 169. portation. Rates on Plaster and 
 
 Rails of an interstate carrier must Gypsum Rock, 27 I. C. C. 76. 
 
 be open from one end to the other ** Equality of opportunity in the 
 
 with no restriction whatever except use of transportation faciUties. In 
 
 such as naturally flows from the Re Wharfage Charges at Galveston, 
 
 right of the carrier to demand and 23 I. C. C. 535. 
 receive a reasonable compensation 
 
 [167] 
 
§ 202 ] Railroad Rate Regulation 
 
 to fix. To establish the right to regulate rates, and the 
 other rights of the public to regulate the business . of 
 common carrier it is necessary to show only the duty of 
 the carrier to serve all who apply/^ Although it is com- 
 monly said that it is the duty of a public service com- 
 pany to serve all, that is a statement of a principle, not of 
 a rule of law. The fact is that there are many conditions 
 precedent to the obligation of a particular public service 
 company to serve a particular applicant. Those who wish 
 service must put themselves in a proper position to de- 
 mand service; until this condition precedent is performed 
 there is no obligation to serve. Moreover, in connection 
 with such proper application there must be tender of 
 adequate compensation; for clearly a public service com- 
 pany is not obliged to serve otherwise. 
 
 § 202. Extent of the carrier's route. 
 
 A carrier cannot be compelled to receive goods, still less 
 to send and get goods, at a point off his line. Upon this 
 general theory a railroad's obligation to receive freight 
 is for transportation over its own route only. The fact 
 that it has connections with other routes makes no differ- 
 ence; it is not bound to provide any other mode of trans- 
 portation than its own. Therefore, it need not furnish 
 means to carry merchandise over other routes; *^ and 
 certainly it need not send cars to fetch freight from other 
 routes. Thus it need not even provide equipment for 
 taking freight from the sidings of other railways very 
 near to its route but not really upon it.*^ Although the 
 Commission recognizes, as it must, that fundamentally 
 a carrier need not take any thought of service to points 
 off its own rails,''* it has been obliged to point out again 
 
 « In sections 1, 2, 3, 4 and 5 is the Morton, 61 Ind. 539, 28 Am. Rep. 
 
 substantive law and machinery for 682. 
 
 public regulation of interstate car- *' Hoyt v. Chicago, B. & Q. R. R., 
 
 riers. Commutation Rate Case, 21 93 lU. 601. 
 
 I. C. C. R. 428. « Laniflg-Harris Coal & Grain Co. 
 
 "Pittsburg, C. & St. L. Ry. v. v. A.,T. & S. F.R.Co., 12I.C.C.479. 
 [168] 
 
Sebvices Subject [ § 203 
 
 and again that if a carrier enters into through arrange- 
 ments with other roads it may be involved in service to 
 points beyond its own lines. It is not essential that a 
 carrier actually reach a point to engage in its traffic to 
 discriminate against it.^' It has been repeatedly held that 
 while a railroad cannot be compelled to accept and agree 
 to carry goods to points beyond its line, yet it might do 
 so. If the carrier contracts to convey beyond its line, it 
 would be liable as a common carrier for the whole distance. 
 
 § 203. Scope of the service. 
 
 A railroad company is bound to take goods only of the 
 class which it has undertaken to carry, but it is obliged 
 to take all freight similar in character to what it has made 
 a practice of handling. Thus a railroad need not handle 
 special trains for the service of construction gangs; and so 
 can make such terms as it pleases. But a steamship 
 Une carrying general freight cannot refuse to handle 
 lumber, or even to postpone it for other more profitable 
 freight.^" And generally speaking what a railroad handles 
 for some shippers it must take for others without dis- 
 crimination. In accordance with these principles the Com- 
 mission has often supported special limitations upon the 
 receipt of particular articles. Thus a rule excluding from 
 transportation benzine, gasoline, and naphtha when con- 
 tained in wooden barrels was not held unjust. And there 
 are rulings of the Conunission to the effect that a common 
 carrier may limit the character of the commodities it 
 wishes to transport, if altogether different from the sort 
 of thing the carrier would normally deal with." Of course, 
 
 *' Lagrange Chamber of Commerce Bros. C. Co. (Ariz.), 108 Pac. 467; 
 
 V. A. & W. P. R. R. Co., 28 I. C. C. and Memphis News Co. v. Southern 
 
 178. Ry. Co., 110 Tenn. 684, 75 S. W. 
 
 «> See particularly Mcintosh v. 941, 63 L. R. A. 150. 
 Oregon Ry. & Nav. Co., 17 Idaho, " See particularly Red C. Oil Mfg. 
 
 100, 105 Pac. 66; Ocean S. S. Co. v. Co. v. A. & V. R. R., 21 1. C. C. 542; 
 
 Savannah L. W. & S. Co. (Ga.), 63 Flour City S. S. Co. v. L. B. R. R., 
 
 S. E. 577, 20 L. R. A. (N. S.) 867; 24 I. C. C. 179; In re Express Rates, 
 
 Santa Fe P. & P. Ry. Co. v. Grant 24 1. C. C, 380, and id. 28 1. C. C. 316. 
 
 fl69] 
 
§204} Railroad Hate Regulation 
 
 a carrier may require that packages containing fragile 
 articles or contained in glass must be plainly marked to 
 indicate contents. And where the shipper refused to state, 
 as required by tariff, the market value of shipment of 
 stocks and bonds, the carrier was under no obligation 
 to transport such seciu-ities, and it was its duty to refuse 
 the shipment. 
 
 § 204. Carriage of live stock. 
 
 Another prominent matter in the topic under discus- 
 sion is the carriage of live stock. The carriage of live 
 stock was not ordinarily within the profession of the 
 early carriers as they had no vehicles large enough for 
 such carriage. Therefore when the railways came in, it 
 was doubted in England whether their carriage could be 
 obUgatory unless express undertaking with respect to 
 them could be found; and in one American jurisdiction, 
 Michigan, it was decided that this special profession was 
 necessary. But this is not the sort of reasoning that 
 appeals to American courts, and it is now almost univer- 
 sally agreed that live stock constitutes one of the many 
 classes of goods which the modern railway undertakes to. 
 carry for the public generally and that the railway is 
 therefore a common carrier of Uve stock in its freight 
 trains. This was strongly stated in an early Kansas case,^^ 
 in which the usual functions of the modern railway are 
 thus described: "It can hardly be supposed that they 
 were created for the mere purpose of taking the place of 
 pack-horses, or clumsy wagons, often drawn by oxen or 
 such other primitive means of carriage amd transportation 
 as were used in England prior to 1607. Railroads are un- 
 doubtedly created for the purpose of carrying all kinds of 
 property which the common law would have permitted 
 to. be carried by common carriers in any mode, either by 
 
 i^^The quotation which follows is Nichols, 9 Kans. 235, 12 Am. Rep. 
 from Kansas Pacific Ry. Co. v. 494. 
 
 [1701 
 
Services Subject [ §§ 205, 206 
 
 land or water, which probably includes all kinds of per- 
 sonal property.^' 
 
 § 205. Carriage of rolling stock. 
 
 This general principle that the railways generally must 
 accept for transportation every kind of freight in every 
 form that is appropriate for transportation is well brought 
 out by the case of rolling stock offered for transportation 
 as freight. As is said by a Canadian court " such trans- 
 portation comes within the general profession of the rail- 
 roads which "hold themselves out as carriers of all de- 
 scriptions of property capable of being reasonably and con- 
 veniently transported over rails by a locomotive engine, 
 to the extent to which they have the means and accommo- 
 dations." Although the Commission realizes that carriers 
 may refuse to carry certain classes of private equipment, 
 it holds that if they do so they may not discriminate 
 between private cars owned by different persons." And, 
 indeed, it has Uttle doubt as to its power to regulate rates 
 upon the movement of cars offered to transportation. 
 
 § 206. Profession limited to car service. 
 
 To go to the other extreme of this problem, there is 
 the railway service which the terminal railway provides. 
 These railways not only undertake the carriage of freight 
 exclusively, but often wiU only take that when offered 
 in loaded cars. The profession of such a road, indeed, is 
 exclusively to transfer loaded cars to and from railway 
 systems. In recognizing this situation the Illinois court ^® 
 said: "Nor do we see anything in the objection that the 
 business of the company is to be limited to the carrying 
 of freight offered in cars only. Every common carrier 
 has the right to determine what particular Une of business 
 
 " See Interstate Stockyards Co. v. " Chappelle v. Louisville & N. 
 
 Indianapolis Ry. Co., 99 Fed. 472. R. R., 19 I. C. C. 456. 
 
 "Greene v. St. John & M. Ry., » Wiggins Ferry Co. v. East St. 
 
 22 N. B. (P. & T.) 252. Louis Union Ry., 107 111. 450, 458. 
 
 [171] 
 
1^ 207 ] Railroad Rate- Regulation 
 
 he will follow. If he elects to carry freight only, he will 
 be under no obligations to carry passengers, and vice 
 versa. So if he holds himself out as a carrier of a particu- 
 lar kind of freight, or of freight generally, prepared for 
 carriage in a particular way, he will only be bound to 
 carry to the extent and in the manner proposed. He will 
 nevertheless be a common carrier." And it has recently 
 been held in the federal courts, in dealing with the extent 
 of the jurisdiction of the Commission under the Act, 
 that loaded cars, as well as other property, may be the 
 matter of carriage by a common carrier.^' 
 
 § 207. Special trains. 
 
 Where cars loaded with freight are to be hauled in a 
 special train at special times, not on the regular schedule, 
 and by a special arrangement, the railroad company in 
 so hauling the cars is not a common carrier. This ar- 
 rangement is commonly made between the owner of a 
 circus and the railroad which transmits the estabhshment 
 from one place of exhibition to another. The circus is 
 transmitted in a special train, made up exclusively of the 
 circus cars, on a special schedule of time, and for a price 
 less than the regular rates; and the owner furnishes men 
 to load and unload. For such transportation the railroad 
 is not responsible as a common carrier.^* "The trains 
 were to be made up entirely of cars which belonged to 
 plaintiff and which the defendant neither loaded nor pre- 
 pared, and into the arrangement of which, and the stowing 
 and placing of their contents defendant had no power to 
 meddle. The cars contained horses which were entirely 
 under control of plaintiff, and which under any circum- 
 stances may involve special risks. They contained an 
 elephant, which might very easily involve difficulty, 
 
 " U. S. V. Union S. & T. Co., 192 111, 22 N. W. 215, 56 Am. Rep. 374. 
 Fed. 330. Haulage service was discussed in 
 
 •* The quotation is from Coup v. Wharton Steel Co. v. D., L. & W. R. 
 
 Wabash, St. L. & P. Ry., 56 Mich. R. Co., 25 I. C. C. 303. 
 [172] 
 
Services Subject [ § 208 
 
 especially in case of accident. They contained wild 
 animals which defendant's men could not handle, and 
 which might also become troublesome dnd dangerous. 
 It has always been held that it is not incumbent on car- 
 riers to assume the burden and risks of such carriage." ^' 
 
 § 208. Forwarders offering consolidated shipments. 
 
 The Cormnission has long maintained that the Act 
 does not justify the classification of shippers with regard 
 to their interest in property shipped. A carrier, it has said, 
 may not properly look beyond the transportation to the 
 ownership of the shipment as a basis for determining 
 the applicability of its rates.^" Its doctrine has been that 
 where shipments belonging to, and ultimately intended 
 for, various consignees have been united in a bulked ship- 
 ment from one consignor to one consignee, it is unlawful 
 for the carrier to refuse to apply the rate applicable upon 
 the shipment as a whole and to insist upon making a 
 separate charge upon the package or packages intended 
 for each ultimate consignee.*' However as a matter of 
 the machinery of transportation, naming one consignee 
 for consoUdated shipments may be required. ^^ And the 
 Commission has approved various rules applying to rates on 
 shipments consolidated or bulked by agents.*' The federal 
 courts at one time had apparently taken a different atti- 
 tude, conceding that the carrier had a right to protect 
 itself from competitors in its own line, thus utiUzing its 
 faciUties.*^ But it has recently been settled by the Su- 
 
 «»Clough V. Grand Trunk Ry. port Shipping Co. v. W. R. R., 14 
 
 Co., 155 Fed. 81, 85 C. C. A. 1, 11 I. C. C. 437. 
 
 L. R. A. (N. S.) 446. " California Com. Asso. v. W., F. 
 
 In one proceeding reparation was & Co., 21 1. C. C. R. 300. 
 
 denied, since the shipment in question °^ Davies v. I. C. R. R., 19 I. C. 
 
 was too long to be loaded through C. R. 3 (4) 682H, 918. 
 
 the side door of a box car. Jones v. '' Western Classification Case, 25 
 
 Southern Ry., 18 I. C. C. 150. I. C. C. 442. 
 
 •» Cahfomia Com. Ass'n v. W., F. '* Lundquist v. Grand Trunk W. 
 
 & Co., 14 I. C. C. 422. See also Ex- Ry., 121 Fed. 915. Seealso Johnson v. 
 
 Dominion Exp. Co., 28 Ont. Rep. 203. 
 
 [173] 
 
§ 209 ] Railkoad Rate Regulation 
 
 preme Court that a carrier cannot, when goods are tendered 
 to it for transportation, make the mere ownership of the 
 goods the test! of the duty to carry, and in effect discrimi- 
 nate in fixing the charge for carriage, not upon any differ- 
 ence inhering in the goods or in the cost of the service 
 rendered in transporting them, but upon the mere cir- 
 cumstances that the shipper is or is not the real owner 
 of the goods.^^ 
 
 § 209. The problem of dependent service. 
 
 A special problem under the general head of the true 
 extent of public duty is whether, in dealing with dependent 
 services, those who conduct the principal service can make 
 such arrangements as they please with those who apply 
 for such special privileges, or whether there is a public 
 duty in the premises, requiring that equal facilities shall 
 be granted. In the first place it is plain that there is no 
 direct duty owed by the management of the principal 
 service to those who conduct these dependent services. 
 The railroad company surely owes no duty to hackmen 
 who would ply their trade upon station premises, its sole 
 duty is to its passengers.*^ On the other hand, that there 
 is some public duty in the premises is plain. In the case 
 of the express service the modern railroad owes a duty of 
 some sort in respect to the transportation of small and 
 valuable parcels safely and quickly.*^ Even when it is 
 once established that there is a public duty toward their 
 own patrons in respect to the subordinate service involved, 
 there remains the conflict of authority as to the extent 
 to which this duty goes. According to the conservative 
 view, the principal company fulfills its duty by making 
 provision for the service desired. Thus a railroad by many 
 
 '5 Interstate Com. Comm. v. D., L. the English act to the same ef- 
 
 & W. R. R. Co., 220 U. S. 235, 55 feet. 
 
 L. ed. 48, 31 Sup. Ct. 392, relying «» Hot Springs v. Curry, 64 Ark. 
 
 upon such cases as Baxendale v. 152, 41 S. W. 55. 
 
 So. W. Ry., 35 L. J. Exch. (N. S.) '' Sanford v. Catawissa R. R., 24 
 
 108, interpreting similar clauses of Pa. St. 378. 
 
 [174] 
 
Services Subject 
 
 [§209 
 
 courts is allowed to make an exclusive contract with one 
 hack concern to use the station ground.^* According to 
 the progressive view the whole law of public service ap- 
 plies to the situation and any discrimination is therefore 
 condemned. And exclusive contract witli one express 
 company for the use of passenger trains is held illegal as a 
 necessary consequence.'' The Commission being bound 
 by the conservative view taken by the federal courts has 
 held that such exclusive arrangements are not preferential 
 in the sense of the Act.™ And of course it finds nothing 
 wrong with special concessions for private enterprises.^^ 
 
 '* Compare the language in the 
 conservative case of New York, 
 N. H. & H. R. R. V. ScoviU, 71 
 Conn. 136, 41 Atl. 246, with the 
 radical conclusions in Montana Union 
 Ry. Co. V. Langlois, 9 Mont. 419, 24 
 Pac. 209. 
 
 °' For the conservative argument 
 see the Express Cases, 117 U. S. 1, 
 6 Sup. Ct. 542, for the progressive 
 case see McDuffee v. Portland & 
 R. R. R. Co., 52 N. H. 430. 
 
 ™ The Commission will assume no 
 jurisdiction over exclusive arrange- 
 ments for baggage transfer on board. 
 Cosby V. Richmond Transfer Co., 
 23 I. C. C. 72. 
 
 " Station restaurants, news stands, 
 barber shops and similar private 
 enterprises at railroad terminals are 
 no part of transportation service. 
 Southwestern Produce Distributers 
 V. W. R. R. Co., 20 I. C. C. 
 458. 
 
 [175] 
 
BOOK II 
 
 LIMITATION OF CHARGES 
 PART I -THE SCHEDULE AS A WHOLE 
 
 CHAPTER V 
 
 GENEKAL PRINCIPLES GOVERNING COMPENSATION 
 
 § 210. Provisions of the Act. 
 211. General principles governing reasonableness. 
 
 To-pie A. Certain Limitations Fundamental 
 \ 212. Rates must be fair to the company and to the public. 
 
 213. Limitations within which rates must be made. 
 
 214. Unreasonable regulation universally forbidden. 
 
 215. Value of the services constitutes minimum. 
 
 216. Interests of the companies to be considered. 
 
 217. Interests of the public to be considered. 
 
 218. Accommodation of the interests of both sought. 
 
 219. The complexities of the general problem. 
 
 Topic B. The Schedule taken as a Whole 
 
 \ 220. Reasonableness of the schedule as a whole. 
 
 221. Tests of the reasonableness of a schedule. 
 
 222. Many elements to be taken into account. 
 
 223. Relation of a particular rate to a whole schedule. 
 
 224. Conclusions as to proportionate rate. 
 
 225. Company cannot make unreasonable rates. 
 
 226. Company cannot justify exorbitant profits. 
 
 227. Special circumstances affecting the particular rate. 
 
 Topic C. The Particular Rates Considered Separately 
 
 \ 228. Reasonableness of the separate rates. 
 
 229. Schedule as a whole may throw light. 
 
 230. Bearing of tariff as a whole. 
 
 231. Rule of proportionality in sharing costs. 
 
 232. Average cost always modified. 
 
 233. Application of both tests necessary. 
 
 234. Service not worth usual amount. 
 
 235. Service of unusual value. 
 
 12 [ 177 ] 
 
§ 210 ] Railroad Rate Regulation 
 
 Topic D. Bases of Regitlation 
 
 § 236. Constitutional limitations upon commission regulation. 
 
 237. Reasonable rates not necessarily profitable. 
 
 238. When fair net earnings left. 
 
 239. Possibility of increase of business. 
 
 240. Making rates compared with levying taxes. 
 
 241. Governmental regulation best for all concerned. 
 
 242. Inherent difficulties of accommodating all tests. 
 
 243. Conflicting authorities still persist. 
 
 § 210. Provisions of the Act. 
 
 The fundamental obligation of the carrier, in connection 
 with commerce subject to the jurisdiction of the Com- 
 mission, to charge no more than such rate as is reasonable, 
 was in the first section of the original Act; and the wording 
 has only been changed in subsequent amendments to keep 
 pace with the extension of the scope of the jurisdiction of 
 the Commission. Much, however, has been done by add- 
 ing clauses giving the Comtmission jurisdiction to pass 
 upon the reasonableness of charges for other services than 
 carriage strictly, as has been seen already. Section 1 as 
 now revised lays it down as a principle that aU charges 
 made for any service rendered or to be rendered in the 
 transportation of passengers or property and for the 
 transmission of messages by telegraph, telephone, or cable, 
 as aforesaid, or in connection therewith, shall be just and 
 reasonable; and every unjust and unreasonable charge for 
 such service or any part thereof is prohibited and declared 
 to be unlawful: Provided, that messages by telegraph, 
 telephone, or cable, subject to the provisions of this Act, 
 may be classified into day, night, repeated, unrepeated, 
 letter, commercial, press. Government, and such other 
 classes as are just and reasonable, and different rates may 
 be charged for the different classes of messages: And pro- 
 vided further, that nothing in this Act shall be construed 
 to prevent telephone, telegraph, and cable companies from 
 entering into contracts with common carriers, for the 
 exchange of services. The machinery by which rates are 
 established is described in Chapter XVII. 
 [178] 
 
Principles Governing Compensation [ § 211 
 
 § 211. General principles governing reasonableness. 
 
 The question of the reasonableness of rates is a complex 
 one. As there are two parties liaving an interest in the 
 rates, the carrier and the shipper, and their interests are 
 diverse and, to a considerable extent, opposed, a rate 
 which is reasonable from the point of view of one may be 
 quite unreasonable from the point of view of the other. 
 It will be noticed that the interest of the carrier is entirely 
 directed toward framing a schedule of rates which as a 
 whole shall produce a certain return, and so long as the 
 return is realized it is immaterial to him what the propor- 
 tion of contribution of each individual shipper is to the 
 whole amount.''^ On the other hand, the shipper is inter- 
 ested in the individual rate charged to him, and in that 
 alone. So long as his rate is a fair one it is immaterial to 
 him that the whole schedule is so arranged as to yield a 
 great profit to the carrier. The reasonableness of the 
 schedule as a whole therefore especially concerns the 
 carrier, that of the separate rate especially concerns the 
 shipper. In order to be entirely reasonable the schedule 
 must as a whole be fair to the carrier, and in detail to 
 each shipper. Here, however, the opposing interests of the 
 carrier and the shipper present a serious difficulty in the 
 working out of the problem of rates. A carrier may be so 
 happily situated as to be able to frame a schedule which 
 will be fair to himseK and at the same time just to the 
 individual shippers.''^ This, however, is quite likely not to 
 be the case. A schedule may not be possible which will 
 yield fair compensation to the carrier without at the same 
 
 " Where the rate is fixed by the given rate is reasonable or not, is a 
 
 legislature or by a commission the matter of judgment. The traffic 
 
 most common inquiry is whether official exercises his judgment in the 
 
 the schedule as a whole will bring in first instance, and the Commission, 
 
 a fair income, and it is in such cases when it revises that rate, substitutes 
 
 that this inquiry is most frequently its judgment for that of the traffic 
 
 made. Chicago & N. W. Ry. v. official. National Wool Growers' 
 
 Dey, 35 Fed. 866, 2 Int. Com. Rep. Asso. v. O. S. L. R. R. Co., 25 I. C. C. 
 
 325. 675. 
 
 " The final answer as to whether a 
 
 [179] 
 
§§ 212, 213 ] Railroad Rate Regulation 
 
 time exacting an unjust amount from some particular 
 shipper. 
 
 Topic A. Certain Limitations Fundamental. 
 
 § 212. Rates must be fair to the company and to the public. 
 
 The fundamental principle as to the reasonableness of a 
 particular rate is that it should be fair compensation for 
 the service rendered. There are, therefore, Umits within 
 which the railroad company must act in fixing its rates. 
 The company must have reasonable compensation; but the 
 shipper must not be charged more than a reasonable price. 
 The Commission has often said that the carrier is entitled 
 to reasonable compensation and the shipper to a reasonable 
 rate for the service performed.''^" The compensation, in 
 order to be reasonable, must be fair to both parties. It is 
 not enough that the whole schedule shall bring in a fair 
 return to the company; the particular rate fixed for car- 
 riage must be in itself no more than a reasonable amount 
 for the customer to pay under the circumstances, for the 
 service rendered him. The question of reasonableness 
 involves the element of reasonableness both as regards the 
 company and as regards the public. The Commission is 
 well aware that a continuous process of reducing carriers' 
 revenue would be detrimental to the public interest as well 
 as to carriers.^* 
 
 § 213. Limitations within which rates must be made. 
 
 Stated in more accurate terms, the law requiring fair 
 compensation has two distinct sides. It is desirable that 
 the carrier should receive the full cost to it of performing 
 
 '*'' Memphis Grain & Hay Aaso. v. " Union Tanning Co. v. S. Ry. 
 
 St. L. & S. F. R. R. Co., 24 I. C. C. Co., 26 I. C. C. 159. 
 
 609. The relative lack of financial pros- 
 Differences in earnings of carriers perity of carriers, considered in de- 
 
 in different territories considered in termining the reasonableness of a 
 
 determining the propriety of rate rate. Michigan Copper & Brass Co. 
 
 comparisons. Evens & Howard Fire v. D. S. S. & A. Ry. Co., 25 I. C. C. 
 
 Brick Co. v. St. L., I. M. & S. Ry. 357. 
 
 Co., 25 I. C. C. 141. 
 
 1180] 
 
Principles Governing Compensation [ § 214 
 
 the service. It is desirable, also, that the shipper should 
 not pay more than the value of the service to him. These 
 two limitations are obviously at the extremes within which 
 in normal cases rates must be made.''^ "The cost of 
 service, while recognized as an important element in 
 classification and rates, is not alone controlling. On that 
 basis some articles, on account of relation of commercial 
 value to cost of service, though furnishing a large volume 
 of traffic, would not be carried at all, and others of high 
 commercial value would have a very low rate without 
 increasing tonnage. Another element of the highest 
 importance, and that cannot be disregarded, is the value 
 of the service to the article carried. This is a factor that 
 largely determines the classification and rates the article 
 will bear in the transactions of commerce, and necessarily 
 qualifies the influence of other factors in the distribution 
 of charges with the view to average reasonable reve- 
 
 § 214. Unreasonable regulation universally forbidden. 
 
 The company performing the service should be pro- 
 tected in getting as a reasonable return for its services, 
 at least what is fairly the cost of those services as a 
 minimum, as the United States Supreme Court has been 
 insisting of late years." This, however, cannot always be 
 done; in such a case the utmost protection possible must 
 still be given to the company. The balance of interests 
 was weU stated by the Interstate Commerce Commission 
 
 " The interests of all lines must be " Interstate Commerce Commis- 
 
 considered, and not alone those of sion v. Stickney, 215 U. S. 98, 30 
 
 the line that can handle the traffic Sup. Ct. 66. 
 
 with the least cost; and the interests It should be noted that the Com- 
 
 of the consumer and of the producer mission has no power vmder the Act 
 
 must not be lost sight of. Commer- to fix minimum rates for the protec- 
 
 cial Club of Superior v. G. N. Ry. tion of a competitor; its jurisdiction 
 
 Co., 24 I. C. C. 96. is confined to fixing maximum rates 
 
 ™ The quotation is from Thurber for the carriers involved in the pro- 
 
 V. New York Central R. R., 2 Int. ceedings before it. See Norfolk & 
 
 Com. Rep. 742, 3 I. C. C. Rep. 473. W. R. R., 195 Fed. 953. 
 
 [181] 
 
§ 215 ] Railroad Rate Regulation 
 
 thus: ^^ "It is vitally important to the development of this 
 country that the service performed by our railways should 
 be efficient and complete. The wealth invested in these 
 enterprises should be sacredly protected, and no imneces- 
 sary burden should be imposed in the way of public 
 supervision. But it is equally important that the rates 
 charged for the service should be just; and, in view of the 
 monopolistic conditions under which these rates are now 
 made, the public has no protection save by regulation by 
 the Government." 
 
 § 215. Value of the services constitutes maximum. 
 
 The value of the services to the customer constitutes the 
 limit of charge which the company is permitted to make. 
 Considering all the circumstances, if the services have a 
 certain value to the consumer and no more, the carrier 
 must charge no more. The elemental principles thus far 
 noted may be summarized as, on the one hand, the right 
 of the company to derive a fair income, based upon the 
 fair value of the property at the time it is being used for 
 the public, taking into account the cost of maintenance or 
 depreciation, and current operating expenses; and, on the 
 other hand, the right of the public to have no more exacted 
 than the services in themselves are worth.'' "While the 
 company is entitled, so far as this case shows, to a fair 
 return upon the value of the property used for the public 
 at the time it is being used, the public (that is, the custom- 
 ers) may demand that the rates shall be no higher than the 
 services are worth to them, not in the aggregate, but as 
 individuals. The value of the services in themselves is to 
 be considered, and not exceeded. These views seem to be 
 
 '* The quotation is from Re Pro- tions therein proposed. Anadarko 
 
 posed Advances in Freight Rates, Cotton Oil Co. v. A., T. & S. F. Ry. 
 
 9 I. C. C. 382. Co., 24 I. C. C. 327. 
 
 The Commission cannot be un- " The quotation is from Kennebec 
 
 mindful of the serious effect upon the Water District v. Waterville, 97 Me. 
 
 revenues of the carriers when reduc- 185, 54 Atl. 6, 60 L. R. A. 856. 
 
 [182] 
 
Principles Governing Compensation [ § 216 
 
 consonant with reason. They are also estabUshed by the 
 highest judicial authority in our country." *" 
 
 § 216. Interests of the companies to be considered. 
 
 However desirable it may be to provide lower rates for 
 the public that is receiving the service, it is equally neces- 
 sary to leave a reasonable return to the company that is 
 performing the service. In some cases where a rate has 
 been fixed by the State the court when it is called upon to 
 pass upon it may find that both interests are suflaciently 
 protected; but in others it may be found that the con- 
 stitutional rights of the company have been ignored in the 
 desire to grant a lower rate to the public. The coiurt 
 found this in Metropolitan Trust Company v. Houston & 
 Texas Central Railway," "As popularly expressed, the 
 rights of the people — the rights of shippers who use it as 
 a carrier — have to be regarded; but, as judicially expressed, 
 these last have to be so regarded as not to disregard the 
 inherent and reasonable rights of the projectors, proprietors, 
 and operators of these carriers. It is settled that a State 
 has the right within the limitation of the constitution, to 
 regulate fares. From the earliest times public carriers have 
 been subject to similar regulations through general law 
 administered by the courts, requiring that the rates for 
 carriage should be reasonable, having regard to the cost to 
 the carrier of the service, the value of the service to the 
 shipper, and the rate at which such carriage is performed 
 by other like carriers of similar commodities under substan- 
 tially similar conditions." The cost of the service in carry- 
 ing any one particular shipment may be difficult to deter- 
 mine, but the cost to the carrier of receiving, transporting, 
 and delivering the whole volume of tonnage and number 
 of passengers in a given period of time must include, as 
 
 *• The shipping public has a right Board of Trade v. A., T. & S. F. Ry., 
 
 to enjoy reasonable rates, and the 25 I. C. C. 625. 
 
 private interests of a carrier cannot " 90 Fed. 683. 
 defeat or qualify this right. Wichita 
 
 [183] 
 
§ 217 ] Railroad Rate Regulation 
 
 one of its substantial elements, a return on the value of 
 the property used in the service. As the Commission has 
 recently said it is necessary that carriers be permitted to 
 charge rates that are fully compensatory for the service 
 they perform, so long as they are not unreasonable.*^ 
 
 § 217. Interests of the public to be considered. 
 
 That there are in reaUty two tests, not one, is pointed 
 out by the most discriminating judges in the more recent 
 cases, and it is the avowed poHcy of the United States 
 Supreme Court that both parties to the service, the carrier 
 and the shipper, should be considered in deciding all cases. 
 Thus, in the leading case of Smyth v. Ames,*^ the court, in 
 declaring the Nebraska maximum freight law unconstitu- 
 tional, guarded itself against being understood as taking 
 an extreme position in favor of the carrier by saying: "It 
 cannot therefore be admitted that a railroad corporation 
 maintaining a highway under authority of the State may 
 fix its rates with a view solely to its own interests and 
 ignore the rights of the public. But the rights of the public 
 would be ignored if rates for transportation of persons or 
 property on a railroad are exacted without reference to 
 the fair value of the property used for the pubUc and the 
 fair value of the services rendered, but in order simply 
 that the corporation may meet operating expenses, pay the 
 interest on its obligations, and declare a dividend to its 
 stockholders." ** And in Covington & Lexington Turn- 
 pike Road Company v. Sandford, the court, in questioning 
 the State legislation, said similarly: "A corporation is not 
 entitled as of right and without reference to the interests 
 of the public, to reaUze a given per cent, upon its capital 
 stock. Stockholders are not the only persons whose rights 
 or interests are to be considered. The rights of the public 
 are not to be ignored. The pubUc cannot properly be 
 
 " Morgan Grain Co. v. A. C. L. " 164 U. S. 596, 41 L. ed. 556, 17 
 E. R., 19 I. C. C. 460. Sup. Ct. 198. 
 
 8' 169 U. S. 466, 42 L. ed. 819, 18 
 Sup. Ct. 418. 
 
 [184] 
 
Principles Governing Compensation [ § 218 
 
 subjected to unreasonable rates in order simply that 
 stockholders may earn dividends." 
 
 § 218. Accommodation of the interests of both sought. 
 
 The effort of the law, therefore, is to accommodate the 
 more or less conflicting interests of the companies and of 
 the public. The rule that the company is entitled to 
 demand a fair return, upon the reasonable value of the 
 property at the time it is being used for the public, is on 
 the basis of taking the actual cost of the plant and its 
 annual depreciation, and of allowing a fair profit on that 
 footing over and above expenses. But while it is strictly 
 true that the company is entitled to no more than a rea- 
 sonable return upon its necessary investment, which is 
 embodied in the structure and its natural increment, if 
 any, that goes but a Uttle way towards the solution of the 
 problem, owing to the difficulty of saying just what is 
 reasonable for the shipper to be charged in a given case. 
 That must, for the most part, be left to the good judg- 
 ment of the tribunal which passes upon each particular 
 case. Only the other day, the Commission in the Five 
 Per Cent Case revised its former conclusions,*^ to the 
 effect that, although the railroads were not perhaps getting 
 enough in way of earnings, they could by making charges 
 for services furnished without adequate compensation, 
 and by instituting further economies of operation, make 
 their net income sufl&ciently large without resorting to 
 direct increases in rates on a large scale. But between 
 August and December of this memorable year the financial 
 situation changed so unexpectedly that the Commission 
 came to the rescue of the earnings of the carriers appreciat- 
 ing that the means of transportation are fundamental 
 and indispensable agencies in our industrial life, and for 
 the common weal should be kept abreast of pubUc re- 
 quirements.** 
 
 " Interstate Commerce Commis- " Interstate Commerce Comuiis- 
 Bion, Aug. 2, 1914. sion, Dec. 18, 1914. 
 
 [185] 
 
§§ 219, 220 ] Railroad Rate Regulation . 
 
 § 219. The complexities of the general problem. 
 
 So many considerations must be taken into account in 
 passing upon rates that the problem is always a complex 
 one. The difficulties, many of them, arise from the desire 
 to give scope to a variety of principles which must in- 
 evitably come into a more or less irreconcilable conflict.*^ 
 "When a controversy arises between the pubUc and a 
 carrier, the question of the reasonable limit of a rate 
 usually involves many considerations, and is often diffi- 
 cult to determine. A rate that might be regarded as 
 reasonable and just by a producer and shipper, might, 
 from a carrier's standpoint, be deemed extremely un- 
 reasonable and unjust, and so, conversely, a rate that a 
 carrier might claim to be reasonable in itself, and that it 
 might support with strong reasons based upon the cost 
 of the service, the quantity of the business and the char- 
 acteristics of its line of road, might exhaust the greater 
 part of the proceeds of the producer's commodity, and be 
 destructive to his interests. It is only stating a truism, 
 therefore, to say there is no recognized test of a rate 
 mutually reasonable for a carrier and for the producer 
 of the traffic. The reasonableness of a rate must conse- 
 quently be ascertained in every instance in which the 
 question arises, by its relations both to the carrier and to 
 the shipper, and by comparison with rates normally charged 
 for Hke or similar service." ^^ 
 
 Topic B. The Schedule taken as a Whole 
 
 § 220. Reasonableness of the schedtile as a whole. 
 
 The reasonableness of the schedule as a whole depends 
 as has been seen, upon whether it yields a fair return to 
 
 " The quotation is from Delaware ditions, but there is no absolute rule 
 
 State Grange v. New York P. & N. requiring for any reason the jndef- 
 
 Ry., 3 Int. Com. Rep. 554, 4 I. C. C. inite continuance of a rate, for the 
 
 Rep. 588. question is what, under all the cir- 
 
 ** A rate cannot be discontinued cumstances, is just and reasonable, 
 
 without taking into account its effect Green Bay Business Men's Ass'n v. 
 
 upon commercial and industrial con- B. & 0. Ry., 15 1. C. C. 59. 
 
 [186] 
 
Principles Governing Compensation [ § 221 
 
 the carrier. This is largely a mathematical question. 
 The carrier is entitled, first, to pay all expenses; which 
 would include both the actual expenses of operation and 
 also certain annual charges that must be paid before any 
 real profit can be realized. He is entitled furthermore 
 to gain a fair profit on his capital invested. The de- 
 termination of the actual amount of the capital invested 
 may be a matter of some difficulty; once determined, the 
 rate of profit upon that amount of capital is a question 
 which will be determined, generally speaking, by the or- 
 dinary business profit of the time and place. A schedule 
 of rates will be reasonable from the point of view of the 
 carrier if it yields him a net profit equal to that which 
 would be realized, as a business question, from any other 
 business where the capital and the risk were the same.^' 
 It is necessary in framing a schedule to require a proper 
 amount of concession from all parties concerned. The 
 principles on which the fairness of the whole schedule 
 would be determined will be limited by the requirement of 
 fairness to the individual shippers; and on the other hand 
 the principles on which the reasonableness of a particular 
 rate would be determined may need modification because 
 of the just claim of the carrier to a fair compensation. 
 The examination of the reasonableness of the carrier's 
 rates may therefore involve a study both of the reason- 
 ableness of the schedule as a whole and also of the reason- 
 ableness of the separate rates.'" 
 
 § 221. Tests of the reasonableness of a schedule. 
 
 As a general rule, therefore, it will be unjustifiable for 
 the government to reduce the total net returns from the 
 schedule as a whole below what will produce a fair return 
 upon a proper capitalization. A general statement as 
 this leaves much undefined; but it is not altogether im- 
 
 ^ See the course of reasoning in '" See the elaborate discussion of 
 
 refusing to permit the general ad- certain principles fundamental in 
 
 vances in 1910 in Advances in Rates, rate regulation in Advances in Rates, 
 
 Eastern Case, 20 1. C, C. 243. Western Case, 20 1. C. C. 307. 
 
 [187] 
 
§ 222 ] Railroad Rate Regulation 
 
 possible to apply it to particular conditions. As an illus- 
 tration of the actual way in which the problem is handled 
 an extract is made from one of modern cases which are 
 establishing a practicable method of dealing with this 
 intricate problem. In passing upon the constitutionaUty 
 of the reduction of rates ordered by a State Commission 
 in Matthews v. Board of Corporation Commissioners *^ 
 Judge Simonton said: "The questions made in this case 
 are federal questions and grow out of the Fourteenth 
 Amendment. If the rates fixed are unreasonable, that is 
 to say, if they compel the railway company to conduct 
 its operations at a loss or without a fair remuneration for 
 its investment, — then the property of the company is 
 taken and used by the public without just compensation, 
 and it is deprived of its property without due process 
 of law. The jurisdiction of this court depends on the 
 federal question. It is its duty, as it is the duty of all 
 courts. State and federal, to see to it that no right secured 
 by the supreme law of the land is impaired by legislation 
 acting directly on the subject, or through agents created 
 by legislation.'^ The law applicable to this case has been 
 settled by a series of decisions of the Supreme Court of the 
 United States. On the other hand, the pubHc cannot 
 require the corporation to use its plant, its money, and 
 its credit without remuneration. The best interests of 
 the public forbid this. Railroads are the arteries of trade. 
 Through them flows the life blood of a commimity. The 
 best statesmanship contributes to their maintenance and 
 encourages their prosperity. What the remuneration shall 
 be depends upon the circumstances of each case." 
 
 § 222. Many elements to be taken into account. 
 
 That these various elements are all taken into considera- 
 tion in passing upon the reasonableness of a schedule of 
 
 »' 106 Fed. 7. entitled to demand rate not higher 
 
 '2 The carrier is entitled to ask a than the services are reasonably 
 
 fair return upon the value of prop- worth. Morgan Grain Co. v. A. C. 
 
 erty devoted to pubUc use; public is L, R. R., 19 I, C. C. 460. 
 
 [188] 
 
Principles Governing Compensation [ § 223 
 
 rates may be shown by extracts from some leading cases. 
 Wages, price of materials and supplies, greater amomit 
 hauled by trains, destiny of traflfic, as affecting cost of 
 operation, and cost of operation are first of all to be con- 
 sidered as the Commission weU reahzes.'' But the test 
 is more elaborate since the fixed charges must also be 
 considered in addition to the operating expenses. As 
 one court has comprehensively said: "Ordinarily that is a 
 reasonable charge or system of charges which yields a 
 fair return upon the investment. Fixed charges and the 
 costs of maintenance and operation must first be provided 
 for, then the interests of the owners of the property are 
 to be considered. They are entitled to a rate of return, 
 if their property will earn it, not less than the legal rate 
 of interest; and a system of charges that yields no more 
 income than is fairly required to maintain the plant, pay 
 fixed charges and operating expenses, provide a suitable 
 sinking fund for the payment of debts, and pay a fair 
 profit to the owners of the property, cannot be said 
 to be unreasonable." '* 
 
 § 223. Relation of a particular rate to a whole schedule. 
 
 The general method in passing upon the reasonableness 
 of rates is therefore to discover whether the particular 
 rate is fair, judging the schedule as a whole. As has 
 been seen, this involves the consideration of many factors, 
 some of them conflicting, but it may be said that rates 
 fixed are fair to the company if from the schedule as a 
 whole it gets a reasonable return, and fair to the people 
 served if they pay in each particular case no more than 
 the service is worth.'^ In order to meet, as far as may be, 
 both requisites, a particular rate should seldom be passed 
 upon without considering the relations to the schedule 
 
 »' Commercial Club of Salt Lake " 179 Pa. 231, 36 Atl. 249, 36 L. R. 
 City V. A., T. & S. F. Ry., 19 I. C. C. A. 260. 
 
 218. '' Brewer & Haulerter v. Louisville 
 
 & N. Ry., 7 I. C. C. 224. 
 
 [189] 
 
§ 224 ] Railroad Rate Regulation 
 
 as a whole, especially as the reasonableness of one rate 
 may be judged with reference to other rates in the same 
 schedule. An example of the way in which such problems 
 are worked out, considering all factors and then giving 
 most weight to one held to be controlling in the particular 
 case, may be seen in various cases before the Interstate 
 Commerce Commission.'*^ "To inquire whether the rev- 
 enues of this railway company might be or ought to be 
 reduced below the present point would raise several in- 
 teresting and important questions, for the consideration 
 of which we have not before us in this case the necessary 
 data. We are furnished with a statement of the funded 
 debt and capitalization of the road, and also with a state- 
 ment of its financial operations for the last year. We are 
 not informed how this debt was created, what it would 
 cost at the present time to replace the property repre- 
 sented by this capitalization, nor what that property is 
 fairly worth, if indeed there be any standard by which 
 its value can be measured." 
 
 § 224. Conclusion as to proportionate rate. 
 
 As a result of these considerations, the conclusion may 
 be drawn that a proportionate rate must be established for 
 each article of traffic. This rate will be fixed according to 
 the share of the entire burden of charge which ought 
 reasonably to be borne by that .particular article. In 
 determining the reasonable share of the burden to be 
 borne by an article, various considerations must be weighed, 
 and the rate when finally established will be determined as 
 a result of all such considerations. It must be clear, 
 therefore, that the establishment of the particular rate 
 is not, like the establishment of the general schedule of 
 ^charges, a matter which can be tested by a mathematical 
 
 *■ Reduction opposed because it not prospering. Texarkana Freight 
 
 would mean serious reduction in the Bureau v. St. L., I. M. & S. Ry. Co., 
 
 revenues, and statement offered to 28 I. C. C. 569. 
 show that roads in the southwest are 
 
 [190] 
 
Principles Governing Compensation [ § 225 
 
 formula. The division of rates among the particular 
 commodities involves judgment and experience; it is not an 
 exact division, but only the closest possible approximation 
 to fairness. Thus in speaking of the requirement of the 
 Federal Interstate Commerce Act of 1887, section 1, that 
 rates should be reasonable and just, the Interstate Com- 
 merce Commission has said:" "The words 'reasonable' 
 and 'just' as used in the Statute, as applied to rates, are 
 each relative terms. They do not mean to imply that the 
 rates upon every railroad engaged in interstate commerce 
 shall be the same or even about the same. The conditions 
 and circumstances of each road surrounding the traffic and 
 which enter into and control the nature and character of 
 the service performed by the carrier in the transportation 
 of property, such as the cost of transportation, which 
 involves volume or lightness of traffic, expenses of con- 
 struction and of operation, competition in some respects 
 of carriers not subject to the Law, rates made by shorter 
 and competing lines to the same points of destination, 
 space occupied by freight, value of freight and risk of 
 carriage to carrier, all have to be considered in determining 
 whether a given rate is 'reasonable' and 'just.'" ^^ 
 
 § 225. Company cannot make unreasonable rates. 
 
 The requirement that no person may be charged more 
 than a reasonable rate may be insisted upon although the 
 result is that the company does not get a fair return from 
 its schedule as a whole. Those who undertake a public 
 employment enter upon a business affected with a public 
 interest, which justifies the State in demanding that the 
 rates charged shall be reasonable to the public. A test 
 
 " The quotation is from New of rates covering the whole traflBc of 
 
 Orleans Cotton Exchange v. Illinois a particular carrier and that required 
 
 Cent. R. R., 2 Int. Com. Rep. 777, to test the reasonableness of a rate 
 
 3 I. C. C. Rep. 534. on a particular commodity between 
 
 ^ The difference in the character two definite points considered and 
 of testimony required to test the discussed. Frye & Bruhn v. North- 
 reasonableness of an entire sbhedule ern P. R. Co., 11 I. C. C. 501. 
 
 [191] 
 
§ 226 ] Railroad Rate Regulation 
 
 case upon this point was Missouri Pacific Railway v. 
 Smith,'* where maximum rates were fixed by the Legisla- 
 txire which the plaintiff railway company claimed would cut 
 off all the profits of their business. The court held that 
 this was not fatal to the constitutionahty of the legislation; 
 Mr. Justice Thomason saying: "Rates of transportation 
 sufiBcient to enable the road to realize a sum large enough 
 to defray current repairs and expenses and pay a profit on 
 the reasonable cost of building the road and equipping it, 
 ought to be reasonable. The earnings of a road might be 
 sufficient for this purpose, and yet not large enough to pay 
 expenses and interest on its debts. Large and unnecessary 
 debts might have been contracted through extravagance, 
 enormous salaries, and mismanagement, exceeding the cost 
 of building and equipping the road, and bearing a rate 
 of interest amounting to more than a reasonable profit 
 on the capital necessary, when judiciously expended, to con- 
 struct and equip the road. Like some iadividuals as to 
 their business, railway companies can reach a point through 
 extravagance, losses and mismanagement, when no reason- 
 able rate of profit will enable them to maintain their roads 
 and pay the interest upon their debts, and when failure and 
 a sale of the road to other parties become inevitable." ^ 
 
 § 226. Company cannot justify exorbitant profits. 
 
 On the other hand, it is certain upon fimdamental prin- 
 ciples that the company cannot justify exorbitant profits 
 by urging that the rates are reasonable in themselves. At 
 first impression this has seemed to some persons unjust to 
 the company; but it should be remembered that the com- 
 pany is stiU allowed a fair return upon its reasonable 
 capitalization, which is all the right that those who have 
 entered upon these enterprises have by estabhshed law. 
 If it is found that rates may be reduced to a point which 
 seems below the reasonable standard and yet produce a 
 
 •• 60 Ark. 221, 29 S. W. 752. ^ See Gary v. Eureka Springs Ry., 
 
 7 I. C. C. 286. 
 
 [192] 
 
Principles Governing Compensation [ § 227 
 
 fair return, the company has no legal grievance if it is 
 not permitted to charge higher rates. To quote a specific 
 illustration: ^ "The rate per ton mile, while often instruc- 
 tive, is not by any means a fair index of a reasonable 
 rate. The cheapest traffic is frequently the most profitable 
 to the carrier. For the year ending June 30, 1901, the 
 average receipts per ton mile upon all kinds of traffic over 
 the Chesapeake & Ohio System, embracing about 1,500 
 miles, was 3.88 mills. The percentage of operating ex- 
 penses was 62.87 — much below the average of the whole 
 United States and among the very lowest. Its net earn- 
 ings were $3,656 per mile, equivalent to 6 per cent, interest 
 on $60,000 per mile — just about the average capitalization 
 of all our raihoads. This example is referred to as showing 
 that business may be profitably done at astonishingly low 
 rates. Indeed, it is usually a question, not of the absolute 
 rate, but of the conditions under which the traffic is 
 handled." ' 
 
 § 227. Special circumstances affecting the particular rate. 
 
 There may be special circumstances connected with a 
 particular transaction which increases or decreases the cost 
 of service; and the effect of such circumstances on the rate 
 must be considered. For instance, the expense of con- 
 structing a mountain branch may be very much greater 
 than that of building the main line; or the population 
 served by the company may in places be so sparse as to 
 make the cost of operation very great in proportion to the 
 service demanded.* All these circumstances may properly 
 affect the rate charged in those portions of the territory 
 
 ' Re Proposed Advances in Freight in fixing a reasonable rate, rates can- 
 Rates, 9 I. C. C. Rep. 382. not be fixed on this basis alone; 
 
 ' In fixing rates an express com- sometimes what is a fair rate will not 
 
 pany should not be allowed to charge leave sufficient earnings, sometimes 
 
 more than a railroad company for the it will result in large earnings, 
 
 same service. In re Express Rates, Hooker v. Interstate Com. Conun., 
 
 24 I. C. C. 380. 188 Fed. 242. 
 
 * While earnings may be considered 
 
 13 [ 193 ] 
 
§ 228 ] Railroad Rate Regulation 
 
 served by the company; yet it appears unjust to place the 
 whole burden upon such territory, thus accentuate its 
 poverty, and place another handicap upon it in the effort 
 to become prosperous. Not all the extra cost of service 
 should be placed upon the particular customers. At the 
 same time, many things besides the mere mileage run 
 must be considered in fixing the rates. A uniform mileage 
 rate imposed upon all railroads would be in reality tmequal 
 and unjust. As Mr. Justice Morse said in Welhnan v. 
 Chicago & Grand Trunk Railway: ^ "If no classification 
 can be made, and the maximum rate must be fixed the 
 same for all, then the law is admitted to operate un- 
 equally and unjustly, because some companies are to less 
 expense than others in the same length of road by reason 
 of the nature of the country through which they run; 
 some have costly terminal facihties, and some have not; 
 some owe large amounts, and some do not; and some do a 
 large amount of business, and some do not." 
 
 Topic C. The Particular Rates Considered Separately 
 
 § 228. Reasonableness of the separate rates. 
 
 The question of the reasonableness of any separate rate 
 is a much more complex one. The individual shipper ought 
 not to pay more than his fair share of the whole amount 
 received by the carrier; and what his fair share may be 
 depends upon the nature of the goods carried, the expense 
 of carrying them as compared with the carriage of other 
 goods, and other similar considerations.^ On the other 
 hand, fairness to the shipper requires that under no cir- 
 cumstances should he be forced to pay a rate greater than 
 the value of the service rendered to him by the carrier, 
 and this involves a determination of the value to him 
 individually of the carriage, and also of the cost to the 
 
 6 83 Mich. 592, 47 N. W. 489. freight carried is that which yields 
 
 ' It is fallacious to place reliance lowest rate per ton per mile. In re 
 
 upon ton-mile earnings as basis of Advances on Coal to Lake Ports, 
 
 rate-making; much of profitable 22 1. C. C. 604. 
 
 [194] 
 
Principles Governing Compensation [ § 229 
 
 carrier of the particular carriage. It is obvious that all 
 these considerations, which taken together enter into a 
 determination of the reasonableness of the separate rate 
 are rather vague, and that it will in the ordinary case be a 
 matter of great difficulty to determine the question.^ 
 
 § 229. Schedule as a whole may throw light. 
 
 The gross income from the schedule as a whole may, 
 however, be considered under some circumstances in 
 determining the reasonableness of the particular rate.* 
 That railroad investments may be as secure as other 
 property, the Commission will be inclined to be liberal in 
 allowing reasonable rates, until earnings are sufficiently 
 large for a fair return on actual expenditure.' In deter- 
 mining reasonable rates, the requirements of operating 
 expenses, bonded debt, fixed charges, and dividend on 
 capital stock from the total traffic, are aU to be considered; 
 but the claim that any particular rate is to be measured 
 by these as a fixed standard, below which the rate may not 
 lawfully be reduced, is one rightly subject to some qualifi- 
 cations, one of which is that the obligations must be actual 
 and in good faith, i" For example upon investigation of 
 certain advances in rates, the Commission found that 
 measured by some of the principal tests that experience 
 has taught it to apply — the per car earnings, the rate per 
 ton mile, volume and value of traffic, rates from and to 
 similar points moving under substantially similar cir- 
 cumstances and conditions — the advance did not appear 
 to be unreasonable.'' 
 
 ' On no traflSc, except it be lumber, ' Newland v. Northern P. R. R., 
 
 are per ton-mile earnings more help- 4 Int. Com. Rep. 474, 6 I. C. C. Rep. 
 
 ful in the determination of a reason- 131. 
 
 able rate than on grain. In re Inves- '" Re Rates and Charges on Food 
 
 tigation of Advances in Rates on Products, 3 Int. Com. Rep. 93, 4 
 
 Grain, 21 1. C. C. 22. I. C. C. 116. 
 
 ' Jerome Hill Cotton Co. v. Mis- " In re Advances on Cement, 22 
 
 souri, K. & T. Ry., 6 I. C. C. Rep. I. C. C. 90. 
 601. 
 
 [195] 
 
§§ 230, 231 ] Railroad Rate Regulation 
 
 § 230. Bearing of tariff as a whole. 
 
 Under the power given in the Act originally to pass on 
 the question of reasonable rates, the Commission seldom 
 had to consider the schedule as a whole; each case pre- 
 sented to the Commission was that of a particular rate, 
 and the considerations which determine the reasonableness 
 of a particular rate are seldom those which determine the 
 reasonableness of the entire schedule of rates. The capital 
 account of a railroad does not necessarily furnish a cri- 
 terion by which the reasonableness of its freight rates is to 
 be determined; and if the capitalization is to be considered 
 in cases involving the readjustment of rates, it must be 
 accompanied by a history of the capital account." The 
 mere fact of the need of additional revenue to meet 
 additional expenses without diminishing net income does 
 not justify an advance in a particular rate.'^ The financial 
 necessities and conditions of a carrier are not controlling 
 to the extent that, independent of other circumstances, 
 any rates are reasonable until the earnings are sufficient 
 to operate the road, and meet aU the obligations of the 
 carrier." Among the considerations to be weighed in 
 determining what is a rieasonable and just rate are in- 
 cluded the general financial and physical conditions of the 
 carrier, the character of the commodity in question, 
 whether it constitutes a large or small part of the business 
 of the carrier, whether it is economical or expensive to 
 handle, how it compares with other commodities hauled, 
 and, as evidencing the railroad's own judgment, whether a 
 different rate has been in effect on this commodity at some 
 time or other." 
 
 § 231. Rule of proportionality in sharing costs. 
 
 In what may fairly be called the more enlightened cases 
 
 '■^ Grain Shippers' Asso. v. Illinois ^* Jerome Hill Cotton Co. v. Mis- 
 
 C. R. R., 8 I. C. C. 158. souri, K. & T. Ry., 6 I. C. C. Rep. 
 
 " Tift V. Southern Ry., 10 I. C. C. 601. 
 
 Rep, 548. " Thompson Lumber Co. v. I. C. 
 
 C. R. R. Co., 13 I. C. C. 657. 
 
 [196] 
 
Principles Governing Compensation [ § 232 
 
 it is now appreciated that the imposition of dispropor- 
 tional rates is in itself improper. As an abstract matter 
 certainly the fairest way to determine the cost of any 
 particular service would be to apportion ratably the total 
 disbursements of every sort to the various items of traffic, 
 and so to arrive at proportionate rates. Theoretically, it is 
 clear, any other method is less just to all concerned. In 
 determining what is a reasonable rate for services ren- 
 dered, it is hardly proper to take the road as existing and 
 as maintained, with its tra,ck and terminal equipments, 
 salaries and all other expenses, and to regard as the total 
 cost of any particular service merely the increased ex- 
 pense necessary to add to its business the service in ques- 
 tion; truly the cost of that service ought to include its 
 fair share of the interest on investments and of the gen- 
 eral expenses. ^^ Upon principle, therefore, a proportionate 
 rate should be estabhshed for each article of traffic. This 
 rate will be fixed according to the share of the entire bur- 
 den of charge which ought reasonably to be borne by that 
 particular article. ^^ In determining the reasonable share 
 of the burden to be borne by an article, various con- 
 siderations must be weighed, and the rate when finally 
 estabhshed will be determined as a result of all such con- 
 siderations. 
 
 § 232. Average cost always modified. 
 
 In the determination of rates upon the basis of propor- 
 tionality the average cost of service must play an impor- 
 tant part. The ton-mile cost of moving freight on the 
 railroad in question must be considered always.'* But the 
 
 '° See particularly, Pennsylvania " See particularly, Gulf, C. & S. F. 
 
 Ry. Co. V. Philadelphia County, 220 R. R. Co. v. Railroad Commission 
 
 Pa. St. 100, 68 Atl. 676, 15 L. R. A. (Tex.), 116 S. W. 795. 
 
 (N. S.) 108. Averages are helpful in determining 
 
 Fairest test of reasonableness of proper relation of rates or proper basis 
 
 rates is earnings per car-mile and for their construction. Victor Mfg. 
 
 per train-mile. In re Advance on Co. v. S. Ry. Co., 21 I. C. C. 222. 
 
 Coal to Lake Ports, 22 I. C. C, 604. "See particularly, Atlantic C. L. 
 
 [197] 
 
§ 233 ] Railboad Rate Regulation 
 
 average cost of service is at best only a standard with 
 which to make comparisons. As a practical matter some 
 factors are present in every particular case which will 
 either raise or lower the actual cost in its relation to the 
 average cost. Thus the establishment of a ton-mile rate 
 as a standard merely brings rates down to the narrowest 
 point of scrutiny, and for that purpose is valuable; but it 
 excludes consideration of other circumstances and condi- 
 tions which enter into the making of rates, no matter how 
 compulsory or imperious they may be, and it cannot, 
 therefore, be accepted as altogether controlling in deter- 
 mining the reasonableness of rates." A particular rate is 
 thus the resultant of many factors. While there are 
 certain economic forces which must be recognized as 
 playing a legitimate part in the establishment of a par- 
 ticular rate, it is the oflSce of the law to interfere to pre- 
 vent the working out of these forces in an oppressive way. 
 
 § 233. Application of both tests necessary. 
 
 It must therefore be assumed, as the basis of further 
 discussion, that not only is it desirable that the company 
 performing the service should have a fair return, but that 
 it is also desirable that the person served should pay no 
 more than a fair price for the service rendered. And it 
 must be recognized, as in many legal situations, that both 
 of these desirable things cannot be brought about in a 
 particular case very often to their full extent; but that it is 
 a case where concession must be made from each principle. 
 Rate making is not an exact science, but a practical prob- 
 
 Ry. Co. V. Florida, 203 U. S. 256, 51 i» See further Seaboard Air Line 
 
 L. ed. 174, 27 Sup. Ct. 108. Ry. Co. v. Florida, 203 U. S. 261, 
 
 The fact that rates upon a certain 51 L. ed. 175, 27 Sup. Ct. 109. 
 
 commodity yield revenue per ton It is of course fundamental that 
 
 mile higher than the average upon per ton-mile revenue decreases with 
 
 all traffic cannot be accepted as increased distance, and sweeping 
 
 conclusive of unreasonableness of statements as to mileage comparisons 
 
 rates. Coke Producers' Asso. of are always subject to this modifica- 
 
 ConneUsville v. B. & 0. R. R., 26 tion. Rates on Linseed Oil, 26 I. 
 
 I. C. C. 125. G. C. 265. 
 
 [198] 
 
Principles Governing Compensation [ § 234 
 
 lem, which cannot be solved without some compromising of 
 the sort thus described.^" "Counsel representing the 
 western roads in the progress of the investigation insisted 
 that the rate of charges which a road may justifiably and 
 reasonably make on its business largely depends upon 
 how much business it has to do, and that the much greater 
 tonnage on eastern roads indicated the much higher basis 
 of charges necessary to be made and which might reason- 
 ably and lawfully be made on western roads; that every 
 road has a right to live and must derive from the business 
 it has to do a sufficient income to meet its obUgations, 
 which are to operate its road, pay interest on its indebted- 
 ness and a dividend on the capital stock; and that any 
 rates which, with other rates on the same road, taken 
 altogether, do not yield a revenue more than sufficient for 
 these purposes, are neither unreasonable nor unjust to the 
 shipper. We have already shown that some qualification 
 need be made to the rule here laid down as the measure 
 of reasonable rates. The rule insisted upon would involve 
 the right to increase rates as often as a new road was 
 built, where roads were already ample for the business. 
 There are eight roads or lines carrying between Chicago 
 and Kansas City; a less number might do the business as 
 well and cheaper. If eight more were built the rates might 
 need to be doubled if all roads constructed have a right 
 to such income as will meet the obligations of the com- 
 panies owing them." 
 
 § 234. Service not worth usual amount. 
 
 Conversely the managers of pubUc service, who are on 
 the outlook for all the business they can get at whatever 
 price the business will bear, claim the right to make 
 extraordinary reductions to those of their patrons who 
 find the service of less value to them than it would be to 
 the average customer. Thus raihoads make extraordi- 
 
 " Kansas v. A., T. & S. F. Ry., 27 " The quotation is from Re Freight 
 I. C. C. 673. Rates on Food Products, 3 I. C. C. 93. 
 
 [199] 
 
§ 235 ] Railroad Rate Regulation 
 
 narily low rates for certain commodities of such an inferior 
 grade that at the average freight rate it would not move 
 at all, so disproportionate would the freight charge be to 
 its actual value. Sometimes the railroads go further, and 
 make a lower charge to these who are going to utilize the 
 commodity in further manufactures, and those to whom 
 it is of sufficient value in its present shape. ^^ This argu- 
 ment in itself is no justification for making disproportion- 
 ate rates against other members of the public who have no 
 cheaper substitute. It is said for allowing these practices, 
 that provided it is understood that no business shall be 
 done unless there is some margin above the bare cost of 
 operation such additional business will benefit those who 
 must pay the fixed charges to some extent by reducing the 
 average cost of their service. It should be noted, however, 
 that no court has ever suggested that a company which 
 neglected its opportunities to make money by such dis- 
 criminating rates was doing wrong. ^^ 
 
 § 235. Service of unusual value. 
 
 That the service in question will be of unusual value to 
 the particular patron is no reason why he should be called 
 upon to pay more than any other member of the public 
 should pay. And as a Federal judge recently said, if 
 lumber will bear the advance, that is no reason why it 
 should.^* That business will still be done at the rate 
 charged is no evidence that it is not unreasonable when a 
 public service is in question, although doubtless it would 
 be in the case of a private business.^* The monopolistic 
 conditions which characterize public employment would 
 result in extortionate prices being possible, while in a 
 
 " According to Hoover v. Pennsyl- such reductions constitute illegal dis- 
 
 vania R. R. Co., 156 Pa. St. 220, 27 crimination. 
 
 Atl. 282, 36 Am. St. Rep. 43, 22 "xift v. Southern Ry. Co., 138 
 
 L. R. A. 263, such reductions may Fed. 763. 
 
 be made. ^s j{,e Proposed Advances in Freight 
 
 ^ According to Lumber Co. v. Rates, 9 I. C. C. 382. 
 Raiboad, 136 N. C. 479, 48 S. E. 813, 
 
 [200] 
 
Principles Governing Compensation [ § 236 
 
 private business the asking of an unreasonable price would 
 simply result in a refusal to do business, since the party 
 quoted the outrageous price could resort to a competitor. 
 The ordinary postulates of political economy are appUcable 
 only to private businesses where the law of competition 
 prevails. In the case of pubUc business the law of the 
 land must be invoked to keep charges down to a reasonable 
 level. 
 
 Topic D. Bases of Regulation 
 
 § 236. Constitutional limitations upon commission regula- 
 tion. 
 
 For a time after the passing of the original Act there 
 was a period when it was doubtful how far Congress had 
 mt^nded to go in dealing with rates; but the Supreme 
 Court finally decided that the Commission could not go to 
 the length of fixing rates. ^^ So long as the Commission 
 only had power to investigate the reasonableness of rates 
 brought to its attention, its findings, if not accepted by 
 the carrier, being simply prima fade evidence in proceedings 
 subsequently brought in the court for the enforcement of 
 its orders, the question of the constitutional limitations 
 upon its affirmative authority as a Commission acting 
 with delegated powers did not arise.^^ Since 1906, as 
 has been seen, the Commission has had the power to 
 fix rates in place of the rates which it finds open to con- 
 demnation as unreasonable. And the basic rule of our 
 constitutional law appUes, therefore, that to declare that 
 the findings of the Commission shall be taken as conclu- 
 sive evidence of what is reasonable in the premises would 
 be withdrawing ultimate rights fundamentally guaranteed 
 from judicial inquiry, which cannot be done under our 
 system.^* It follows that, in a suit in the courts to enjoin 
 
 ^ Interstate Commerce Commis- Interstate Commerce Commission, 
 
 sion V. Cincinnati, N. 0. & T. P. 206 U. S. 142, 51 L. ed. 995, 27 Sup. 
 
 Ry., 167 U. S. 479, 42 L. ed. 243, 17 Ct. 648. 
 Sup. Ct. 896. ^ Hooker v. Interstate Commerce 
 
 " Cincinnati, H. & D. R. R. v. Commission, 188 Fed. 242. 
 
 [201] 
 
§ 237 ] Railroad Rate Regulation 
 
 an order of the Conunission fixing charges, on the ground 
 that to enforce the rates fixed would result in what would 
 be confiscation, the hearing now, may include the taking 
 and consideration of evidence other than produced pre- 
 viously. ^^ Only very recently, therefore, have cases got 
 through to the Supreme Court, involving the bases upon 
 which the rates fixed by the Conunission may be set 
 aside; but on the list of the grounds upon which the court 
 will go to the length of overruling the Commission, the 
 violation of the guaranties of the Constitution by action 
 alleged to be under the Act leads all the rest. In determin- 
 ing whether an order of the Commission shall be suspended 
 or set aside, the court will first of all consider all relevant 
 questions of constitutional power or right.^" And, there- 
 fore, an order, regular on its face, may be set aside if it 
 appears that the rate is so low as to be confiscatory and 
 in violation of the constitutional prohibition against taking 
 property without due process of law.'^ 
 
 § 237. Reasonable rates not necessarily profitable. 
 
 It should not be inferred that the rule that regulation 
 of rates shall leave a fair return by way of profit is without 
 exception. There are decisions which show that this is 
 not an inviolable right. A recent Florida case '^ will 
 bring this out, where Mr. Justice Carter said of a plea 
 that at the rates imposed by the Commission the company 
 would not make a fair return above operating expenses: 
 "The vice in this method of pleading lies in the fact that 
 the question of reasonableness is made to depend upon 
 the capacity of the rates to yield a net income over and 
 
 2' Missouri, K. & T. Ry. Co. v. Co., 231 U. S. 736, 34 Sup. Ct. 316. 
 
 Interstate Commerce Commission, '' State v. Seaboard Air Line, 48 
 
 164 Fed. 645. Fla. 129, 37 So. 314. The interests 
 
 "> Interstate Commerce Commis- of all lines must be considered and 
 
 sion V. Union P. Ry., 222 U. S. 541, not alone those of the line that can 
 
 32 Sup. Ct. 108. handle the traffic with the least cost. 
 
 " See Interstate Commerce Com- Commercial Club of Superior v. 
 
 mission v. Atchison, T. & S. F. Ry. G. N. Ry. Co., 24 I. C. C. 96. 
 
 [202] 
 
Principles Governing Compensation [ § 238 
 
 above the cost of constructing and maintaining the road 
 and the payment of fixed charges, whereas circumstances 
 may exist under which rates are reasonable which do not 
 afford a net income above the cost of operation and taxes, 
 or the cost of operation, taxes and fixed charges. The 
 returns set forth a few elements entering into the ques- 
 tion as to what constitutes a reasonable rate, and attempt 
 to make these elements controlling; whereas the conditions 
 surrounding the operation of the road may deprive them 
 of controlHng force." Consistent with this general con- 
 ception is the contention supported by some cases that 
 transportation for particular transits may be required to 
 be made according to some general system of rates, pro- 
 ducing a fair return for the system as a whole, although 
 it is alleged that in a particular instance loss will result.'' 
 
 § 238. When fair net earnings left. 
 
 It has been held in the case of Minneapolis and St. 
 Louis Railroad v. Minnesota '* that the rate on a single 
 class of freight may be reasonable, though it is more or 
 less than the average rate, and though it would, if ap- 
 plied to all freight, produce more or less than a fair 
 return to the railroad company. This was a State rate 
 fixed by the railroad commission and attacked as con- 
 fiscatory under the Fourteenth Amendment. The rail- 
 road did not claim that the reduction of this rate alone 
 would deprive it of a fair return, but only that if the 
 reduced rate were applied to all freights the income of the 
 
 " Missouri Pacific Ry. v. Smith, See by way of contrast Pennsyl- 
 
 60 Ark. 221, 29 S. W. 752. In es- vania Railroad v. Philadelphia Co., 
 
 tablishing a reasonable rate the 220 Pa. St. 100, 68 Atl. 576, holding 
 
 strongest line should not alone be that to reduce passenger fares so 
 
 considered; the necessities of a line that there was no sufficient profit 
 
 where the conditions of doing busi- left in that branch of the business 
 
 ness are less favorable should be con- was going too far, although the freight 
 
 sidered. Spokane v. No. P. Ry., 15 earnings were so large that the busi- 
 
 I. C. C. 376. ness as a whole was amply profita- 
 
 " 186 U. S. 257, 46 L. ed. 1151, ble. 
 22 Sup. Ct. 901. 
 
 [203] 
 
§ 239 ] Railroad Rate Regulation 
 
 road would be insufficient. The court held the rate legal, 
 notwithstanding this fact, saying that obviously such a 
 reduction could not be shown to be unreasonable simply 
 by providing that, if applied to all classes of freight, 
 it would result in an unreasonably low rate. On the other 
 hand, in the case of Interstate Commerce Commission v. 
 Stickney,^^ it was decided that a carrier under the Act 
 as amended was entitled to a finding by the Commission 
 that the particular charge complained of was unreason- 
 able before a change could be required. Moreover, as 
 that case held, a charge for a service which did not give 
 the carrier more than a fair profit for performing it, was 
 not unreasonable. For the Commission to attempt to 
 fix a new rate at the out of pocket cost, in place of the 
 existing rate which included a profit upon the service 
 performed, was therefore altogether beyond the statutory 
 limitations upon the power of the Commission. Probably, 
 however, this would not be an invasion of constitutional 
 rights, since the profits of the company taken as a whole 
 apparently remained sufficient. 
 
 § 239. Possibility of increase of business. 
 
 The suggestion has been made in some cases that re- 
 duction ordered in rates may be justifiable if it appears 
 certain that there will be no reduction in earnings as a 
 result, since the increased business consequent upon the 
 lower rate might more than make good that loss, although 
 of some force from a theoretical point of view, must ob- 
 viously be acted upon in an actual case with the greatest 
 caution. This was one of the many matters discussed in 
 the important case of Chicago & Northwestern Railway 
 V. Dey.^^ Mr. Justice Brewer disposed of it in this wise: 
 
 " 215 U. S. 98, 30 Sup. Ct. 66. upon which to determine reasonable- 
 
 The fact that the rate on a par- ness of rates. Minneapolis Thresh- 
 
 ticular commodity could be reduced ing Machine Co. v. C, St. P. M. & O. 
 
 without impairing seriously the reve- Ry., 17 I. C. C. 189. 
 
 nues of the carrier, standing alone, ^ 35 Fed. 883, 1 L. R. A. 744 and 
 
 has little value and forms no basis note. 
 
 [204] 
 
Peinciples Governing Compensation [ § 240 
 
 "Again, it is said that it cannot be determined in advance 
 what the effect of the reduction of rates will be. Often- 
 times it increases business, and who can say that it will 
 not in the present case so increase the volume of business 
 as to make it remunerative, even more so than at present. 
 But speculations as to the future are not guides for judicial 
 actions; courts determine rights upon existing facts. Of 
 course, there is always a possibility of the future; good 
 crops may increase transportation business, poor crops 
 reduce; high or low rates may likewise affect; but the only 
 fair judicial test is to apply the rates to the business that 
 has been done in the past, and see whether, upon that 
 basis, such rates will be remunerative, or compel the 
 transaction of business at a loss." '^ 
 
 § 240. Making rates compared with levying taxes. 
 
 It is a common statement in the discussion of rate mak- 
 ing that the situation is the same as in the levying of 
 taxes. This may be used as a figure of speech but it is 
 loose talk at best. There is a certain truth in the prin- 
 ciple of charging more against valuable goods than against 
 cheap goods, as has been conceded; but that the carrier 
 can, in analogy to taxation, throw the burden upon the 
 more valuable goods and relieve the cheaper goods in 
 direct proportion to their respective values cannot be ad- 
 mitted. The duty of the carrier is to move all goods at a 
 reasonable price for the service rendered, a matter not to 
 be determined upon any ad valorem basis. The wrong 
 to the public in making what the goods will bear the basis 
 of rates is well pointed out in the succinct quotation which 
 follows: "It is not a question of what the traffic will 
 bear, but rather of what the public should bear. Condi- 
 tions are such that this rate can be advanced as between 
 the people who pay it and the stockholders who receive 
 
 " In Central of Ga. Ry. Co. v. fixed by a commission unless con- 
 McLendon, 157 Fed. 961, it was held vinced that it will result in reduced 
 that a court will not retain the rate revenue. 
 
 [205] 
 
§ 241 ] Railroad Rate Regulation 
 
 it. Is the advance right? Every question as to the reason- 
 ableness of a rate may present itself in two aspects. First, 
 is the rate reasonable, estimated by the cost and value of 
 the service, and as compared with other commodities? 
 second, is it reasonable in the absolute, regarded more 
 nearly as a tax laid upon the people who ultimately pay 
 that rate? The considerations which determine the first 
 of these aspects are of but little weight in determining the 
 second. Every such inquiry involves the idea of some 
 limit beyond which the capital invested in railways ought 
 not to be allowed to tax other species of property. What 
 is that limit, and how can it be fixed?" ^^ 
 
 § 241. Governmental regulation best for all concerned. 
 
 It may fairly be said that governmental regulation, pro- 
 tecting both the public-service companies and the people 
 whom they serve, ought to be for the best interests of all 
 concerned, if it is a policy which is to commend itself to 
 sober judgment. "The railways of our country have been 
 aptly said to constitute the arteries of the national hfe. 
 The pubhc official or other person who would grudge to 
 them the large measure of prosperity which their inestim- 
 able services to the country deserve is as short-sighted as 
 unpatriotic, as narrow as unjust. While this is true, the 
 mistakes or excesses of zeal or judgment on the part of 
 railway officials may at times make these vast enterprises, 
 ordinarily benevolent, instrumentahties of grave private 
 wrong and communal injury. The framers of the Con- 
 stitution, though unconscious of the indescribable develop- 
 ment in the intercommunication of the people, yet 'pro- 
 phetic and prescient of all the future had in store,' provided 
 for every contingency when it bestowed upon Congress 
 the tersely expressed but elastic power 'to regulate com- 
 merce with foreign nations and among the several States.' 
 Congress had exercised this power, and the righteous orders 
 of the great commission it has primarily entrusted with 
 
 's Re Advances in Freight Rates, 9 I. Q. C. Rep. 382. 
 [206] 
 
Principles GoVEEmNG Compensation [ § 242 
 
 the tremendous duty should in all proper cases be respected 
 and enforced by the courts of the country. The organic 
 law upon which this power in Congress and in the courts 
 is founded is the sure guaranty to investors in trans- 
 portation lines against the assaults, whether of the agra- 
 rian or the demagogue, the anarchist or the mob. While, 
 on occasion, the railway company or other corporation may 
 suffer a temporary diminution of revenues from an order 
 of this character, the interest of the public, and in the 
 end the interest of the corporation itself, is conserved. 
 In all such cases the general welfare should control. Salus 
 populi est suprema lex." ^^ 
 
 § 242. Inherent difficulties in accommodating all tests. 
 
 Whenever the reasonableness of a particular rate charged 
 for a particular service is brought in question there will 
 often be difficulties in accommodating both of these tests 
 which may sometimes seem inseparable. But these 
 difficulties are inherent in the problem, and it is never 
 justifiable not to take both of these tests into account in 
 passing upon a particular rate in its relations to the 
 schedule as a whole. A good illustration of the way 
 in which this sort of problem must be handled may be 
 seen in the extract from a recent case before the Interstate 
 Commerce Commission, which follows:^" "It is further 
 contended in behalf of the defendants that lumber, con- 
 sidering its character and all the conditions incident to the 
 services rendered in its transportation, was not, at the 
 14-cent rate in force at the date of the advance, yielding 
 its proper proportion of the revenue required by the 
 defendants to meet their expenses — in other words, that 
 that rate as applied to lumber was not a reasonable rate, 
 viewed from the carrier's standpoint, in that it was not 
 adequately remunerative. The question of the reasonable- 
 
 " Speer, District Judge, in Inter- *' Central Yellow Pine Assn. v. 
 
 state Com. Coram, v. LouisviUe & Illinois C. Ry., 10 I. C. C. Rep. 
 N. Ry., 118 Fed. 613. 530. 
 
 [207] 
 
§ 243 ] Railroad Rate Regulation 
 
 ness in this sense of a rate on a single article of traffic is 
 one of almost insuperable difficulty." " 
 
 § 243. Conflicting authorities still persist. 
 
 Charging what the traffic will bear will always prove 
 the easiest way to get the proper amount of money, if no 
 legal limitations are put upon this distribution of the bur- 
 den. To leave the distribution of the burden without law, 
 when the total charge is restricted by law, seems almost 
 stultification. For a disproportionate rate to a particular 
 customer may be more oppressive than a system which, 
 although somewhat too large in its total returns, was one 
 in which he contributed only a proportionate share.*^ Of 
 course, on actual application neither of these theories 
 would to-day be pushed to its logical extreme, the econ- 
 omists would profess to deplore actual extortion in an 
 individual charge; the lawyer would not demand exact 
 distribution of the burden. Legal restriction to some 
 degree is admitted by the economist; economic modi- 
 fication is recognized to some extent by the lawyer. For 
 practical purposes the various theories may be thus re- 
 duced to modifications in various degrees of these two 
 persisting theories.^' 
 
 " Where particular rates on a *^ A definite and uniform allot- 
 
 particular commodity between par- ment of funds from the charge im- 
 
 ticular points are challenged, the posed for the movement of each 
 
 question of net earnings on the par- character of traffic to provide for 
 
 ticular lines involved is not impor- interest, dividends, and surplus is 
 
 tant, unless it be shown that the not proper. In re Advances on 
 
 margin of profit is so small on the Coal to Lake Ports, 22 I. C. C. 
 
 system's business, as a whole, that a 604. 
 
 reduction in the particular rates ^' A prohibitive rate so high that 
 would reduce the whole income be- traffic would not move usually con- 
 low the reasonable profit point. demns itself. In re Investigation 
 Board of Trade of Winston-Salem v. of Advances in Rates on Cement, 
 N. & W. Ry. Co., 16 I. C. C. 12, 17. 20 I. C. C. 588. 
 
 [208] 
 
CHAPTER VI 
 
 BASIS or CAPITAL CHARGES 
 
 i 250. Provisions of the Act. 
 251. Various theories as to proper capitalization. 
 
 Toiric A . Original Cost 
 
 j 252. Actual investment entitled to return. 
 263. Cost of proper facilities. 
 
 254. What is the actual cost. 
 
 255. Cost enhanced by fraudulent contract. 
 
 256. Construction now thought unwise. 
 
 257. Equipment long since superseded. 
 
 258. Portion of plant not now utUized. 
 
 259. Treatment of outside investments. 
 
 260. Allowance for unremunerative betterments. 
 
 261. Contributions made by the State. 
 
 Topic B. OiUstanding Capilalization 
 
 \ 262 CapitaUzation outstanding. 
 
 263. Nominal capitalization. 
 
 264. Stock issues often deceptive. 
 
 265. Bonded indebtedness beyond present values. 
 
 266. Market value of securities. 
 
 267. Securities issued upon reorganization. 
 
 268. Capitalization authorized by public authorities. 
 
 269. The problem of watered stock. 
 
 270. Property acquired from surplus earnings. 
 
 271. Inquiry into foregone profits. 
 
 272. Existing capitahzation hardly excessive. 
 
 Topic C. Present Value 
 
 i 273. Power to set aside a statutory rate. 
 
 274. .Constitutional requirements. 
 
 275. Original cost as affecting present value. 
 
 276. Going value. 
 
 277. Franchise values. 
 
 278. Purchase value. 
 
 279. Tax appraisals. 
 
 280. Development cost. 
 
 281. Capitalized rights. 
 
 282. Governmental valuations. 
 
 14 [ 209 ] 
 
§ 250 ] Railroad Rate Regulation 
 
 § 283. Treatment of uneaxned increment. 
 284. Valuation of utilized realty. 
 
 ToTpic D. Cost of Reproduction 
 
 § 285. Rule of the Minnesota courts. 
 
 286. Methods of Texas commission. 
 
 287. The federal courts opposed. 
 
 288. Explanation of the California decisions. 
 
 289. Condition of the plant itself. 
 
 290. What physical reproduction means. 
 
 291. Identical reproduction. 
 
 292. Intervening conditions. 
 
 293. Piece-meal construction. 
 
 294. Overhead charges. 
 
 295. Unit prices. 
 
 296. Cost of building up the business. 
 
 § 250. Provisions of the Act. 
 
 The Commission had nothing directly to do with the 
 determination of the value of the capital devoted to the 
 service of the public, by the carriers subject to its jurisdic- 
 tion, until the Valuation Act of 1913 was passed; and 
 since all the items of value which seem to be of interest 
 are set forth in one way or another in this Amendment, 
 extracts from Section 19a are printed at the beginning of 
 this chapter. Additions to capital currently have long 
 been under the jurisdiction of the Commission over ac- 
 counts, as will appear fi-om the quotations from the pro- 
 visions requiring returns to be made thereof, extracts from 
 which will be reprinted subsequently. By the Valuation 
 Act the Commission is required to investigate, ascertain, 
 and report the value of all the property owned or used 
 by every common carrier subject to the provisions of this 
 Act. The Commission shall make an inventory which 
 shall list the property of every common carrier subject to 
 the provisions of this Act in detail, and show the value 
 thereof as hereinafter provided, and shall classify the 
 physical property, as nearly as practicable, in conformity 
 with the classification of expenditures for road and equip- 
 ment, as prescribed by the Interstate Commerce Commis- 
 sion: Mrst, the original cost to date, the cost of reproduc- 
 [210] 
 
Basis of Capital Charges [ § 251 
 
 tion new, the cost of reproduction less depreciation, and an 
 analysis of the methods by which these several costs are 
 obtained, and the reason for their differences, if any. 
 Second, separately from improvements the original cost of 
 rights of way and terminals owned or used for the pur- 
 poses of a common carrier, and ascertained as of the time 
 of dedication to public use, and the present value of the 
 same, and separately the original and present cost of 
 condemnation and damages or of purchase in excess of 
 such original cost or present value. Third, separately the 
 property held for purposes other than those of a common 
 carrier, and the original cost and present value of the 
 same, together with an analysis of the methods of valuation 
 employed. Fourth, in ascertaining the original cost to 
 date of the property of such common carrier the Commis- 
 sion, in addition to such other elements as it may deem 
 necessary, shall investigate and report upon the history 
 and organization of the present and of any previous corpo- 
 ration operating such property and upon any increases or 
 decreases of stocks, bonds, or other securities, in any 
 reorganization. Fifth, the amount and value of any aid, 
 gift, grant of right of way, or donation, made to any such 
 common carrier, or to any previous corporation operating 
 such property, by the Government of the United States or 
 by any State, county, or municipal government, or by 
 individuals, associations, or corporations. The scope of these 
 provisions of the Act is discussed at large in Chapter XX. 
 
 § 251. Various theories as to proper capitalization. 
 
 In order to decide upon what principles the amount of 
 capital devoted to a public service, and therefore entitled 
 to a return, is to be estimated it is important to examine 
 the various theories which have been brought forward for 
 determining what amount is proper. There is as yet no 
 real agreement among the authorities which have dealt 
 with this problem; but it is desirable that some theory 
 should be found with a sufficient preponderance to be taken 
 
 [211] 
 
§ 252 ] Railroad Rate Regulation 
 
 as a working basis in a given situation. For without a 
 basic theory as to proper capitahzation, rate regulation is 
 virtually impossible; since unless the" charges for return on 
 capital are determined, it cannot be told whether the 
 receipts from any given business are excessive or not. 
 Many theories as to proper capitalization have been 
 advanced at different times; and, indeed, each of them still 
 has some advocates at the present time. But, various as 
 these are, they may be reduced to four. Thus (1) the 
 outstanding capitalization is by a few still regarded as 
 sacred; while at the other extreme are those who refer 
 everything to what might be shown to be (2) the bare cost 
 of substantial reproduction at the present moment. But 
 to most persons both of these standards seem essentially 
 unfair, either to the company concerned or to the public 
 served. And the real controversy it is submitted is be- 
 tween the two remainuig theories, (3) the original cost of the 
 property in question to its owners, or (4) the fair value of the 
 property at the present time. It will be seen that, al- 
 though these amounts may sometimes nearly approximate 
 each other, there is such an inherent difference between 
 these cases that one or the other must ultimately be 
 adopted in a particular case. 
 
 Tojyic A. Original Cost 
 
 § 252. Actual investment entitled to return. 
 
 Actual cost properly considered is the most natural, and 
 in many respects the fairest, single basis for the determina- 
 tion of fair value for rate purposes.^* A fundamental 
 principle of public service regulation is that since the pub- 
 lic service corporation devotes its property to a public use, 
 it may consequently be required to render the service at 
 reasonable rates of charge. Rates of charge to be reason- 
 able may not be in excess of the fair value of the service, 
 
 " A schedule of rates that enables v. Butler Water Co., 179 Pa. St. 231, 
 the company to reaUze no more than 36 Atl. 249, 36 L. R. A. 260. 
 this is reasonable and just. Brymer 
 
 [212] 
 
Basis of Capital Charges [ § 253 
 
 and may not be higher than necessary to produce a fan- 
 re turn on the property devoted to a pubUc use. This is 
 undoubtedly in the first instance, at least, the money that 
 the company has actually and necessarily invested, i. e., 
 the actual cost. As a general working principle the Com- 
 missions generally hold that the original investment, or in 
 the absence of evidence as to that, the cost of reproduc- 
 tion, which probably reflects the original investment more 
 accurately than anything else, may be taken as of primary 
 importance; but neither can be controlling as to the final 
 conclusion, and all available information should be con- 
 sidered, and given such weight as is proper in the case 
 under consideration.^^ It is submitted, at all events, that 
 this rule that a return may be based upon the total in- 
 vestment made in the construction of the plant from 
 first to last, with certain, limitations, may be adopted not 
 unreasonably by a public-service company in making up its 
 own schedule of rates; and it would seem to follow that 
 this should be the basis upon which a Commission would 
 be incUned to act, if given a free hand by the courts. 
 
 § 253. Cost of proper facilities. 
 
 The ultimate test of reasonableness with the carrier 
 itself is based upon the return for the use of its equip- 
 ment and facilities.^* If the carriers are to equip them- 
 selves with cars, motive power, tracks, and terminals so 
 as to meet the demand for transportation, the shipping 
 public should pay interest upon that investment, and for 
 the maintenance of these facilities.*'^ Thus rates were 
 held not unreasonable in a recent case, when the net 
 earnings on heater cars were apparently no more than a 
 just return upon the value of those cars.*^ But state- 
 
 ■"The original cost of carrier's *« National Hay Asso. v. M. C. 
 
 property devoted to public use is an R. R., 19 I. C. C. 34. 
 
 element in determining reasonable- " In re Mine Ratings, 25 I. C. C. 
 
 ness of rate. Portland Chamber of 286. 
 
 Commerce v. O. R. R. & N. Co., 19 « In re Advances on Potatoes, 25 
 
 I. C. C 265. I. C. C. 159. 
 
 [213] 
 
§ 254 ] Raileoad Rate Regulation 
 
 ments of increased cost of transportation by reason of 
 higher price of equipment can have little weight, when 
 presented in the abstract, with no attempt to consider 
 corresponding reductions resulting from greater efficiency.'*^ 
 A new line ought to be worth what it cost; and it ought, 
 therefore, to be allowed to earn a fair return upon that 
 amount if properly shown, without interference from the 
 regulating authorities.^" And the Commission is very 
 ready to recognize the protection due, imder normal cir- 
 cumstances, to the owners of the property devoted to 
 public use.*^ 
 
 § 254. What is the actual cost. 
 
 The question of what constitutes the actual cost of the 
 plant was raised and much discussed in an important 
 case decided in Massachusetts not long ago.^^ A statute 
 gave the plaintiff town a right to take the corporate 
 property of the defendant company on payment of the 
 actual cost with interest. The town exercised the right, 
 and this suit was brought to determine the actual cost. 
 The court held ui the litigation which followed that the 
 actual cost mentioned in the statute was the actual cost 
 of the plant to the company; and this cost they held to be 
 the amount actually paid to the contractor by the com- 
 pany, although the contractor had done the work imder 
 a rather peculiar contract which yielded him a somewhat 
 unusual profit. Mr. Justice Loring said in part: "It is 
 argued by the town that this result amounts to substituting 
 market value for actual cost, and actual cost excludes 
 everything in the nature of a profit. It is true that actual 
 cost excludes everything in the nature of a profit; but what 
 is actual cost to the company includes a profit to the con- 
 tractor, just as what is actual cost to the contractor in- 
 
 « Hormel & Co. v. C, M. & St. P. " Detroit Switching Charges, 28 
 
 Ry. Co., 26 I. C. C. 112. I. C. C. 494. 
 
 » Spokane v. N. P. R. R., 19 " x80 Mass. 325, 62 N. E. 255. 
 I. C. C. 162. 
 
 [214] 
 
Basis of Capital Chakges [ §§ 255, 256 
 
 eludes a profit to the merchants of whom he buys his 
 material." ^' 
 
 § 255. Cost enhanced by fraudulent contract. 
 
 It is clear that, if the contract is coUusively made with 
 the contractor, the company cannot rely on the contract 
 price as the bona fide cost of the plant. If, for instance, 
 the owners of the public service company should, either 
 individually or through an independent corporation, such 
 as a construction company, owned by them, make a con- 
 tract for the payment of an extravagant price for doing 
 the work, it would doubtless be necessary to go behind the 
 form, and find the sum actually expended in the con- 
 struction." But it will be assumed, in the absence of 
 evidence, that the contract was made in good faith and 
 without any ulterior motives. But where securities are 
 issued as bonuses or without any regard to cost they 
 furnish neither a measure nor guide to the value of the 
 property. In one case " the United States Supreme Court 
 pointed out that against a piece of construction costing 
 not more than $124,000 securities aggregating $325,000 
 were given to the contractor. It is perhaps unnecessary 
 to say, remarked the court, that the contracts were made 
 by the company with persons who at that time controlled 
 its voting power. 
 
 § 256. Construction now thought unwise. 
 
 It may turn out in some cases that some parts of the 
 plant will prove of little value in the working of the system 
 at a later time. In fairness it would seem that in such 
 cases the question should be whether the expenditure 
 seemed wise at the time it was made; if so, that expendi- 
 ture should be considered like any other. It is still a 
 
 "See to the same effect, Gloucester 680, 31 L. ed. 841, 8 Sup. Ct. 148. 
 Water Co. v. Gloucester, 179 Mass. " Knoxville v. Knoxville Water 
 
 365, 60 N. E. 977. Co., 212 U. S. 1, 53 L. ed. 371, 29 
 
 " See Dow v. Biedelman, 125 U. S. Sup. Ct. 148. 
 
 [215] 
 
§ 257 ] Railroad Rate Regulation 
 
 question on the authorities whether the stockholders 
 themselves must not bear the burdens of earlier misfor- 
 tunes of railroads instead of present shippers. ^^ If a cheaper 
 mode of construction was deliberately chosen with the 
 knowledge that it must later be superseded, the Commis- 
 sion wiU not permit both the money expended in rectifying 
 the line and the original cost to be charged as capital 
 against the shipping pubUc." On the other hand, if the 
 money may fairly be said to have been judiciously ex- 
 pended at the outset, it would seem that, although it 
 is now seen that the expenditure might have been more 
 wisely made, the capital charge should fairly remain.^* 
 If to-day by the preponderance of expert opinion a better 
 way of laying out a system might have been followed, it 
 still may be true that the construction seemed wise at the 
 time it was done.^^ 
 
 § 257. Equipment long since superseded. 
 
 The extreme form of this problem relates to superseded 
 equipment. Take the case of a street railway which is 
 constructed as a horse railway, then at great expense is 
 changed to a cable road, then later at still greater expense 
 is converted to an electric road, and then is obliged by 
 statute to build a subway and place its tracks underground. 
 It may have happened that all these expenditures were 
 provided for by the raising of new capital for which se- 
 curities are still outstanding. Would it be outrageous to 
 ask that some return on this capital should stiU constitute 
 a charge upon the present concern? In several cases some 
 respect has been paid to this capitahzation long after its 
 tangible results have disappeared, notably in Milwaukee 
 Electric Railway & Light Co. v. Milwaukee,"" where 
 
 s» Meeker & Co. v. L. V. R. R. '» Wilkes-Barre v. Spring Brook 
 
 Co., 21 1, C. C. R. 129. Water Co., 4 Lack. (Pa.) Leg. News, 
 
 "Kansas City So. Ry. v. United 367. 
 States, 231 U. S. 433, 34 Sup. Ct. '» See Capital City Gaslight Co. v. 
 
 125. Des Moines, 72 Fed. 829. 
 
 «> 87 Fed. 577. 
 
 [216] 
 
Basis op Capital Chabges [ § 258 
 
 District Judge Seaman allowed $2,000,000 in addition to 
 the actual value of the present properties, making an 
 allowance for the necessary and reasonable investment in 
 the purchase of the old lines and equipments, which were 
 indispensable to the contemplated improvement, and for 
 the large investment arising out of the then comparatively 
 new state of the art of electric railways for a large system.*' 
 
 § 268. Portion of plant not now utilized. 
 
 As to such portion of the plant as is not utilized at all 
 in the present operation, the problem is more difficult 
 still. If this is being held in condition to operate in 
 emergencies, which are not altogether improbable, it would 
 seem plain in analogy to the decisions just discussed that 
 it may be included. On the other hand, if it is not de- 
 voted to any present use, then it should be plain that 
 allowance should not be made for it in estimating the cost. 
 In this case property no longer of any use should be 
 carried in a separate account, as property should be which 
 is being held for use in the remote futm-e. In accordance 
 with these distinctions a Federal court *^ has allowed for 
 old gas works superseded but held in reserve, while the 
 Minnesota court ^' refused to consider large tracts of land 
 held for possible future freight terminals. These decisions 
 are not necessarily inconsistent. The plant in the first 
 case would be by most business men regarded as suffi- 
 ciently devoted to the immediate business, while the land 
 in the second case is plainly being carried more as a 
 speculation. Business men would demand a business 
 profit on the whole plant in the first case, but they might 
 well be content to carry without profit unimproved lands, 
 relying upon the appreciation of the property for their 
 ultimate profit. 
 
 " See also Metropolitan Trust Co. '^ Capital City Gaslight Co. v. 
 V. Houston & T. C. R. R. Co., 90 Des Moines, 72 Fed. 829. 
 Fed. 683. " Steenerson v. Gt. Northern Ry., 
 
 69 Minn. 353, 72 N. W. 713. 
 
 [217] 
 
§§ 259, 260 ] Railroad Rate Regulation 
 
 § 269. Treatment of outside investments. 
 
 In detennining whether rates for transportation are fair, 
 any other business of the corporation than carriage should 
 be excluded, both as to capital and operation. This was 
 so well worked out by the Commission in the Great 
 Northern case as to be worth restatement here. Ore 
 properties belonging to defendant carrier were transferred 
 to an independent company, ia exchange for certificates 
 entitling the holders thereof to participate in the profits 
 of said company. These certificates were tiu-ned over 
 gratis to the shareholders of defendant; and it was held 
 that, upon a question of reasonableness of rates, this 
 fact could not be urged to deny the right of the share- 
 holders to receive a reasonable income on their stock. 
 The idea of the Commission was that, where the coal 
 lands owned by a carrier are leased to an independent 
 company, which made a profit out of their operation, the 
 carrier should not be permitted to use the value of such 
 property, for the purpose of swelling the amount upon 
 which it may demand an income from rates to be paid 
 by the public.** In a recent case of importance in the 
 Supreme Court,*^ it was held that the Commission might 
 compel carriers engaged in interstate commerce to report 
 upon financial operations ia other lines of activity than 
 those subject to the Act. Thus the investment in amuse- 
 ment parks, if conducted under the same auspices as 
 carriage to and from the park, and the profits from its 
 operation, must be reported, in order that the Commis- 
 sion may be sure there has been no juggling of accounts, 
 in reporting upon the investments in facilities for inter- 
 state commerce and the profits derived therefrom. 
 
 § 260. Allowance for unremunerative betterments. 
 
 It has strenuously been insisted of late by counsel that 
 
 «* City of Spokane v. N. P. Ry., 15 sion v. Goodrich Transit Co., 224 
 I. C. C. 376. U. S. 194, 56 L. Ed. 729, 32 Sup. Ct. 
 
 «5 Interstate Commerce Commis- 436. 
 
 [218] 
 
Basis of Capital Chakges [ § 261 
 
 railroads are being required to expend large sums in cer- 
 tain classes of improvements which do not add to the 
 revenue-earning capacity of the property. Instances are 
 the erection of expensive passenger stations in large 
 terminals, the abolition of grade crossings, the elevation of 
 tracks through towns and cities, the adoption of safety 
 appliances and the like. There is a public demand for 
 these improvements, which often takes the form of a 
 legislative enactment or a municipal ordinance; and it is 
 said that the public which demands all this should expect 
 to pay for the improvement. It is, perhaps, not a solution 
 of the question to say simply that such property is en- 
 titled to its return, along with other property. It may be 
 necessary to isolate this property, and permit of the grad- 
 ual amortization of this form of investment, with the 
 understanding that the sums thus set aside shall not 
 ultimately be capitalized. While it is reasonable to say 
 that such rates may be charged as will permit the ac- 
 cumulation of a fund to take care of charges of this sort, 
 the Commission has indicated that it feels that the stock- 
 holders must expect to forego something by way of 
 dividend to this end. 
 
 § 261. Contributions made by the State. 
 
 Another difficult problem arises from the fact that in 
 many instances the property of the company in question 
 represents in part contributions by the State. The Govern- 
 ment may have given the company the land for its right 
 of way, or it may have made contributions in cash out 
 of which properties have been purchased. It is argued 
 strongly in some quarters that only the property in which 
 the company has invested funds, and not that part which 
 has been donated by the government should be con- 
 sidered in determining reasonable rates. It may be true 
 that actual title and possessions are not always conclusive. 
 The determination of a reasonable rate is ultimately based 
 upon the public poUcy, which may demand that certain 
 
 [219] 
 
§ 262 ] Railroad Rate Regulation 
 
 property to which the company has no title should be 
 included, and certain other property to which the company 
 has title should be excluded. It may well be that the 
 actual investment on the part of the company that is 
 entitled to consideration, regardless of mere title or 
 possession. Take the case of grade separations, for exam- 
 ple, should any difference be made between expenditures 
 for a bridge over the right of way belonging to the railroad 
 and the raised approaches on the pubhc highway. If the 
 company has had to stand the whole cost, it should have a 
 return on all; if it has had to pay only 50%, should it 
 have a return on more? At all events, one can no longer 
 feel safe in maintaining that all property devoted to public 
 service must always be protected, without stopping to 
 reason why. The truth of the matter, whether we like it 
 or not, is that such property is held at the disposal of the 
 public on such terms as the public thinks fair. 
 
 TopicV. Outstanding Capitalization 
 
 § 262. Capitalization outstanding. 
 
 If stock is issued for no real consideration, or for more 
 than the actual consideration received, it clearly cannot 
 be taken as any indication of the capital. This was 
 vigorously said by Mr. Justice Harlan in the leading case 
 of Smyth v. Ames:^^ "It cannot, therefore, be admitted 
 that a railroad corporation maintaining a highway under 
 the authority of the State may fix its rates with a view 
 solely to its own interests, and ignore the rights of the 
 public. The rights of the public would be ignored if 
 rates for the transportation of persons or property on a 
 railroad are exacted without reference to the fair value of 
 the property used for the public or the fair value of the 
 services rendered, but in order simply that the corporation 
 may meet operating expenses, pay the interest on its 
 
 «« Smyth V. Ames, 169 U. S. 466, of Mr. Justice Moody in Knoxville 
 
 42 L. ed. 819, 18 Sup. Ct. 418. v. Knoxville Water Co., 212 U. S. 
 
 And see particularly the language 1, 53 L. ed. 371, 29 Sup. Ct. 148. 
 [220] 
 
Basis of Capital Charges [ § 263 
 
 obligations, and declare a dividend to stockholders. If a 
 railroad corporation has bonded its property for an amount 
 that exceeds its fair value, or if its capitalization is largely 
 fictitious, it may not impose upon the public the burden of 
 such increased rates as may be required for the pxirpose of 
 realizing profits upon such excessive valuation or fictitious 
 capitalization; and the apparent value of the property and 
 franchises used by the corporation, as represented by its 
 stocks, bonds, and obligations, is not alone to be con- 
 sidered when determining the rates that may be reasonably 
 charged." " 
 
 § 263. Nominal capitalization. 
 
 Little if any weight, therefore, is to be attached to the 
 nominal capitalization of the company, even although these 
 shares may now be in the hands of innocent holders. For 
 these holders purchased with imputed knowledge of the 
 public service law by which the State may reduce the rates 
 without unconstitutionaUty to a point where they will 
 yield no more than a fair return upon actual values. The 
 rule that nominal capitalization is inconclusive in a ques- 
 tion as to the validity of a reduction of rates is put 
 strongly in another case ^ before the Commission, where 
 Commissioner Prouty said: "The mere capital account of a 
 railroad does not furnish a conclusive basis by which to 
 adjust the amoimt of its earnings, for the reason, among 
 others, that the capitalization of the railroads of the 
 United States does not represent the actual amount of 
 money invested in the properties, nor the actual value of 
 the properties themselves from any standpoint. There is a 
 continual temptation to increase the Habilities of a railroad 
 company without any corresponding increase in actual 
 value. Whatever of wastefulness or mismanagement there 
 
 " There may, therefore, be values of rate. National Lumber Ex- 
 which are not represented by capi- porters' Asso. v. St. L., I. M. & S. 
 talization. In re Advances in Rates, Ry., 28 I. C. C. 215. 
 Western Case, 20 I. C. C. 307. *' Grain Shippers' Assn. v. Illinois 
 
 Cost of construction as measure C. Ry., 8 I. C. C. Rep. 158. 
 
 [221] 
 
§ 264 ] Railroad Rate Regulation 
 
 may have been in the construction or antecedent history 
 of the railroad, whatever of jobbery or of thievery, even, 
 is apt to find its way into the capital account until it is 
 eliminated by some process of reorganization. In the 
 reorganization itself, the capitalization has no relation 
 ordinarily to the actual value of the property, but is made 
 to depend upon the convenience or even the whim of 
 those who manipulate the reorganization scheme. To make 
 the capital account of our railroads the measure of their 
 legitimate earnings would place, as a rule, the corporation 
 which has been honestly managed from the outset imder 
 enormous disadvantages." ^' 
 
 § 264. Stock issues often deceptive. 
 
 Those who examine into these questions even in the 
 most superficial manner are soon convinced of one thing, 
 and that is that the outstanding stock issues do not neces- 
 sarily constitute a proper basis for the capital charge. This 
 contention was well disposed of by the Commission in 
 a proceeding respecting certain rates of the Southern 
 Railway;™ a part of his opinion follows: "The Southern 
 Railway shows that in the year 1899 it earned nothing 
 upon its $120,000,000 of common stock, and urges that 
 any order of this Commission which depletes the revenues 
 of that company deprives the owners of this stock of their 
 property without due process of law. This common 
 stock was issued as a part of a reorganization scheme 
 under which the Southern Railway Company came into 
 existence. It does not appear that the persons to whom 
 this stock was originally issued ever paid one dollar in 
 actual value for it. It simply appears that the stock is 
 outstanding. This is not enough. Something more is 
 needed when a claim of this kind is set up than the mere 
 fact of the existence and amount of capitalization. It does 
 
 "' Capitalization cannot be accepted '» Danville v. Southern Ry., 8 I. C. 
 as representing value. In re Advances C. Rep. 409. 
 in Rates, Western Case, 20 1. C. C. 307. 
 
 [222] 
 
Basis of Capital Charges [ § 265 
 
 not rest in the whim of a reorganization committee in 
 Wall Street to impose a perpetual tax upon that whole 
 southern country. In the year 1899 the Southern Railway 
 earned net about 4 per cent on $40,000 a mile of the 
 mileage of its entire system. That system extends, as a 
 rule, through sparsely populated territories; no difficult and 
 expensive engineering feats were involved in its construc- 
 tion, nor has it in proportion to its extent many expensive 
 terminals. It will hardly be claimed that the cost of re- 
 producing that property in its present state would equal 
 $40,000 a mile." " 
 
 § 266. Bonded indebtedness beyond present values. 
 
 It used to be more or less a sentiment that there was 
 something sacred about an issue of bonds, especially when 
 based upon a mortgage of realty." At all events, few 
 cases go so far as refuse to recognize the validity of the 
 claim to interest upon bonds, even when the security has 
 depreciated. But in Steenerson v. Great Northen Rail- 
 way '^ Mr. Justice Canty said: "In determining what are 
 reasonable rates, it is perfectly immaterial whether the 
 railroad is mortgaged for two or three times what it would 
 cost to reproduce it, or whether it is free from incum- 
 brance. To hold otherwise would be to hold that the 
 State or the public have indirectly guaranteed the pay- 
 ment of the morgtage bonds of every railroad. The 
 State may as well guarantee the bonds directly as in- 
 directly. But neither the State nor the public have done 
 either the one or the other. It is immaterial how the 
 property has been split up into different rights, interests, 
 and claims. For the purpose of fixing rates, the holders 
 of all these stand in the shoes of the sole owner of the 
 property, unincumbered. The rights of the bondholders 
 
 " See the history of the Rhode " See, especially, Chicago & N. W. 
 
 Island Company in The New Eng- R. R. v. Dey, 35 Fed. 866, 1 L. R. A. 
 
 land Investigation, 27 I. C. C. 744. 
 
 560. " 69 Minn. 353, 72 N. W. 713. 
 
 [223] 
 
§§ 266, 267 ] Railkoad Rate Regulation 
 
 are no more and no less sacred than the rights of such an 
 
 § 266. Market value of securities. 
 
 There have been some remarks in certain opinions which 
 show some disposition to consider the market value of 
 secmities. In one of its general opinions upon rate matters 
 the Commission said that the market value of stock should 
 be considered, but such rates will not necessarily be al- 
 lowed as will guarantee prices at which the stock was 
 brought.'^ And the Commission will pay Uttle attention to 
 what the history of the capitaKzation in question has been. 
 It appeared in one proceeding that the Great Northern 
 Railway had ia the past distributed its stock issues among 
 its stockholders at par, from time to time, although the 
 market value of the stock was often much above par; but 
 this practice, it was said, could have no bearing upon the 
 earnings to which the company was entitled^^ Conversely 
 the fact that a carrier's stock originally sold at less than 
 par cannot be urged on a question of reasonableness of 
 rates to deny the present holders thereof fair dividends 
 therefrom. Nor can the fact that a carrier has issued 
 watered stock be urged, on a question of reasonableness of 
 rates, to deny the right of present holders of the stock to 
 receive reasonable dividends thereon. 
 
 § 267. Securities issued upon reorgamzation, 
 
 A complication frequently met is that the operating 
 company is the result of the consohdation of several pre- 
 vious companies or the reorganization of a previous cor- 
 poration. In many actual cases both reorganization and 
 consohdation are to be found so many times at various 
 stages of the corporate history of the given concern that 
 the outstanding issues tell httle or nothing of real invest- 
 
 " In re Advances in Rates, East- " City of Spokane v. N. P. Ry. 
 em Case, 20 1. C. C. 243. Co., 15 I. C. C. 376. 
 
 [224] 
 
Basis of Capital Charges [ § 268 
 
 ment now devoted to the public service.'^ A reorganization 
 may mean an increase in the nominal capitalization to 
 placate certain interests, or it may mean drastic elision of 
 securities that represented actual investment. A con- 
 solidation similarly may mean increase or decrease in 
 nominal capitalization. Obviously when a holding com- 
 pany is utilized there is a duplication of stock issues, at 
 the very least. And when the consolidation is effected by 
 buying the former properties outright an inflated price 
 is usually paid. When in any of these ways the actual 
 property is buried beneath corporate finance, little respect 
 is to be paid to the outstanding issues as such, but the 
 question should be as to the real values underlying." 
 
 § 268. Capitalization authorized by public authorities. 
 
 Special conditions may be found in certain environments 
 which may call for peculiar treatment. Where, for ex- 
 ample, there has been an explicit legislation, providing for 
 the vahdation of certain issues of securities to an amount 
 named, no tribunal,, it would seem, would venture to ques- 
 tion the action of the legislature. The United States 
 Supreme Court has held in a recent case that, as the capi- 
 talization of the company in question had been fixed 
 in part by special legislation, the court would not question 
 the values thus established.'* So where the laws of the 
 State have provided that stock could not be sold for less 
 than a price fixed by the public authorities, it would 
 seem that this capital, if duly devoted to the objects 
 designated, has peculiar claims to consideration. And it 
 seems that where bonds are sold at various prices it should 
 be a question of par values; as the discount or premium, 
 if proper, really affects the interest rate, not the capital 
 charge.'* 
 
 " See Chicago Union Traction Co. " Willcox v. Consolidated Gas Co., 
 
 V. Chicago, 199 III. 579, 65 N. E. 470. 212 U. S. 19, 53 L. ed. 382, 29 Sup. 
 
 " See also State ex rel. v. Railroad Ct. 182. 
 
 Commission, 137 Wis. 80, 117 N. W. " See People ex rel. D. & H. R. R. 
 
 846. V. Stevens, 197 N. Y. 1, 90 N. E. 60. 
 
 15 [ 225 ] 
 
§§ 269, 270 ] Railroad Rate Regulation 
 
 § 269. The problem of watered stock. 
 
 To make the capital account of a public service com- 
 pany the measure of its legitimate earnings would place, 
 as a rule, the corporation which has been honestly man- 
 aged from the outset under enormous disadvantages. One 
 who examines into these questions even in the most casual 
 manner is soon clear on one point, and that is that the 
 par value of the outstanding stock issues does not neces- 
 sarily constitute a proper basis for the capital charge. 
 Little if any weight, therefore, is to be attached to the 
 nominal capitalization of the company, even although these 
 shares may now be in the hands of innocent holders.*" 
 For, however distressing this circumstance may be, the 
 law must take the attitude that these holders purchased 
 with imputed knowledge of the pubhc service law, by 
 which the State may always reduce the rates without 
 unconstitutionality to a point where they will yield no 
 more than a fair return upon actual values. So notori- 
 ous is it that outstanding securities may have no relation 
 to actual values, that their par value is hardly regarded 
 by anyone to-day.*' 
 
 § 270. Property acquired from surplus earnings. 
 
 Doubts have sometimes been expressed as to the stand- 
 ing of securities issued to stockholders when surpluses have 
 been accumulated. That this process may be stopped for 
 the future by the reduction of rates to a point where no 
 
 "> The plight of such holders ap- securities are pertinent. Houston & 
 
 pealed to Judge Hough in Con- T. C. Ry. Co. v. Storey, 149 Fed. 499. 
 
 soUdated Gas Co. v. WiUcox, 157 But they are inconclusive. Perkins 
 
 Fed. 849. But Judge Ross had no v. Northern Pacific Ry. Co., 155 
 
 sympathy for such holders in San Fed. 445. 
 
 Diego L. & T. Co. v. National City, For an excellent recent case in 
 
 74 Fed. 79. which it is pointed out that fictitious 
 
 In Southern Pacific R. R. Co. v. valuations indicated by overissues 
 
 Bartine, 170 Fed. 751, it was said of securities are to be rejected in 
 
 that the fair value of the outstanding dealing with this problem, see Coal 
 
 securities was one of the elements to & Coke Ry. Co. v. Conley, 67 W. 
 
 be considered. Va. 129, 67 S. E. 613. 
 
 " Allegations as to outstanding 
 
 [226] 
 
Basis of Capital Charges [ § 271 
 
 such surplus will be earned is true. But if at some past 
 time a surplus has been earned and either held as cash 
 or utilized in new construction, an issue of new securities 
 against this would seem to represent capital belonging to 
 the stockholders devoted to the business of the company 
 as much as any other securities paid for by their holders.*^ 
 "In determining the amount of the investment by the 
 stockholders it can make no difference that money earned 
 by the corporation, and in a position to be distributed 
 by a dividend among its stockholders, was used to pay for 
 improvements and stock issued in lieu of cash to the stock- 
 holders. It is not necessary that the money should first 
 be paid to the stockholder and then returned by him in 
 payment for new stock issued to him. The net earnings, 
 in equity, belonged to him, and stock issued to him in 
 lieu of the money so used that belonged to him was issued 
 for value, and represents an actual investment by the 
 holder." '' 
 
 § 271. Inquiry into foregone profits. 
 
 The Commission has several times said that, when the 
 reduction of rates is asked by shippers, past earnings now 
 represented by surpluses cannot be used as an argument 
 for reducing rates, with a view of returning past exactions 
 to the public.** But it has served notice upon the rail- 
 roads that they cannot expect to advance their rates to 
 secure a return upon such values.*^ "We are not here 
 dealing with the value of this property nor with the defini- 
 tion of value, whether value means investment, cost of 
 reproduction, or something else; our position is that a 
 
 »2 See Logansport Gas Co. v. Peru, Previously the Commission had 
 
 89 Fed. 185. said that in fixing rates it cannot as- 
 
 8' Brymer v. Butler W. Co., 179 sume that the surplus accumulated 
 
 Pa. St. 231, 36 Atl. 249, 36 L. R. by a railroad has been derived from 
 
 A. 260. unreasonable exactions, and estab- 
 
 '^Kindel v. Adams Exp. Co., 13 lish low rates with a view of retum- 
 
 I. C. C. 476. ing it to the pubUc. City of Spokane 
 
 «' Advance in Rate Case,— Eastern v. N. P. Ry., 15 I. C. C. 376. 
 Case, 20 I. C. C. 243. 
 
 [227] 
 
§ 272 ] Railroad Rate Regulation 
 
 railroad may not increase rates upon shippers for the rea- 
 son and as an outgrowth of the fact that it has accumu- 
 lated out of rates a balance of profit which has been in- 
 vested in the property. This investment must take care 
 of itself; it must bring a return for itself, either in in- 
 creased traffic or in the reduction of expenses of operation. 
 There is no justification for the investment of this sur- 
 plus if it is to have the effect of increasing the rates upon 
 the shippers over the original fine. If the theory is to 
 be recognized that by increasing the value of their prop- 
 erty by putting back operating revenue into the property 
 a carrier may as a legal right increase rates, then the ship- 
 per is worse off each time he pays a rate which allows a 
 revenue over and above a reasonable return upon the 
 original investment." 
 
 § 272. Existing capitalization hardly excessive. 
 
 The only way in which investments in pubhc service 
 corporations could be jeopardized, by any solution of 
 the present problem which has been proposed, would be 
 by proof that the outstanding capitalization is excessive; 
 but, although this has been loudly claimed, the claim can 
 probably not be supported. Various theories for de- 
 termining capitafization have been suggested, which, as 
 has been seen, may be analyzed into four — the actual 
 investment, the nominal outstanding capitafization, the 
 actual present value, and the cost of reproduction. The 
 law has not as yet made any invidious choice among these, 
 but has considered them all with respect. The Constitu- 
 tion, as its interpretation has been settled by the Supreme 
 Court, secures to the companies the opportunity for a fair 
 return on the actual present value of the property; if 
 hampered improperly in getting this it is said that their 
 property is taken without due process of law. In respect 
 to this test the Commission has pointed out that the pres- 
 ent value is certainly as great as the reproduction value, 
 and that the outstanding capitalization is little if at all 
 [328] 
 
Basis of Capital Charges [ § 273 
 
 greater than this is at the present time. It is true that 
 there are outstanding many billions of securities which 
 did not represent any original cash investment, in other 
 words, "watered stock." But the probabilities are that 
 when the enormous increase in the value of the rights of 
 way and terminal facihties, together with the immense 
 expenditures in improving trackage, roadbeds, grades and 
 structures out of current earnings are all considered, the 
 real value of railroad securities may even be as great as the 
 face value of the securities. However, so disproportionate 
 is capitalization in certain cases, that to some students of the 
 problem who have considered this matter of watered stock at- 
 tentively it has seemed that the business-hke solution would 
 be to have the shares in the corporation without any desig- 
 nated par value, representing simply fractions of the owner- 
 ship. This theory has been taken up by practical promoters, 
 who frankly admit that the real reason for issuing more in 
 par value than the actual expenditures is so that a return 
 commensurate with the risk may be obtained, should the 
 company succeed. Those who argue to eliminate par values 
 altogether must of course concede the power of the State 
 to reduce rates, so that there shall be no more than a 
 fair return proportionate to the risk upon the actual value 
 of the physical properties at any given time. 
 
 Topic C. Present Value 
 
 § 273. Power to set aside a statutory rate. 
 
 It must be borne in mind that the problem presented to 
 a court which is asked to set aside an established rate as 
 unconstitutional because it amounts to a confiscation of 
 property is not precisely the same problem as that pre- 
 sented to a court which is asked to pass upon the fairness 
 of a rate estabUshed by a railroad or other pubhc service 
 company. If a statutory rate takes property, the property 
 affected by it is not the original investment, but the 
 property actually existent and owned by the company.*^ 
 
 » See Cumberland Tel. & Tel. Co. v. Railroad CommiBsion, 156 Fed. 823. 
 
 [229] 
 
§ 274 ] Raileoad Rate Regulation 
 
 If it is a taking of property to deprive the owner of a fair 
 return upon it, the return must be unfair as income de- 
 rived from that actual property. In determining whether 
 the return allowed to the railroad is a fair return on their 
 property, the property is that actually in use at its present 
 value. Where, however, the question is whether the com- 
 pany is exacting too great a return on its investment by 
 means of an unfair schedule, the question is as to the 
 amount actually and bona fide invested. Justifying 
 legislative rates, therefore, is one thing, and holding that 
 unreasonable charges are not being made is quite another 
 matter.*' 
 
 § 274. Constitutional requirements. 
 
 The leading case on this point is Smyth v. Ames.** 
 This was a suit to test the constitutionaUty of certain 
 statutes regulating raihoad rates. In the course of his' 
 opinion Mr. Justice Harlan said: "The corporation per- 
 forming such pubhc services and the people financially 
 interested in its business and affairs have rights that may 
 not be invaded by legislative enactment in disregard of the 
 fundamental guarantee for the protection of property. 
 The corporation may not be required to use its property 
 for the benefit of the pubhc without receiving just com- 
 pensation for the services rendered by it." Proceeding 
 then to discuss the basis upon which the necessary 
 amount of compensation was to be reckoned, he con- 
 tinued: "We hold, however, that the basis of all cal- 
 culations as to the reasonableness of rates to be charged 
 by a corporation maintaining a highway under legis- 
 lative sanction must be the fair value of the prop- 
 erty being used by it for the convenience of the 
 pubUc." *' 
 
 " See Southern Pacific Co. v. ™ Carrier's property devoted to 
 
 Bartine, 170 Fed. 725. public use as a measure of rate. 
 
 88 169 U. S. 466, 42 L. ed. 819, 18 City of Spokane v. N. P. Ry. Co., 
 
 Sup. Ct. 419. 19 I. C. C. 162. 
 
 [230] 
 
Basis of Capital Charges [ §§ 275, 276 
 
 § 276. Original cost as affecting present value. 
 
 It follows from the rule just recited that present value 
 may be shown to be different from actual cost. The true 
 inquiry in constitutional cases is the present value of the 
 plant, and the evidence should be directed to that issue. 
 Without some proof as to that the case must fail. But 
 this does not mean that evidence as to original cost is to 
 be excluded.^" "The rates which it would be reasonable 
 for the company to ask depend upon what would be a 
 fair return, under the circumstances, upon the value of the 
 property used — a question which we shall discuss later on. 
 In determining what would be a fair return, imdoubtedly 
 the amount of money actually and wisely expended is a 
 primary consideration. Actual cost bears upon reason- 
 ableness of rates, as well as upon the present value of the 
 structure as such. It thus bears upon what is a fair return 
 upon the investment, and so upon the value of the prop- 
 erty. In estimating structure value prior cost is not the 
 only criterion of present value, and present value is not 
 what is to be ascertained. The present value may be 
 affected by the rise and faU of prices of materials. If in 
 such way the present value of the structure is greater than 
 the cost, the company is entitled to the benefit of it. If 
 less than the cost, the company must lose it. And the 
 same factors should be considered in estimating the reason- 
 ableness of returns." '^ « 
 
 § 276. Going value. 
 
 So far as the value of a "going business" is increased 
 by the mere element of good will, it cannot demand a 
 return from the rates charged. "The fact that the busi- 
 ness is estabhshed is, of course, a material fact in ascer- 
 
 "> The quotation is from Kennebec " Compare Seaboard Air Line Ry. 
 
 Water Dist. v. WaterviUe, 97 Me. Co. v. Florida, 203 U. S. 261, 51 
 
 185, 54 Atl. 6, 60 L. R. A. 856. L. ed. 175, 27 Sup. Ct. 109. 
 
 See State ex rel. v. Seaboard Air See particularly, State v. Minne- 
 
 Line Ry. Co., 48 Fla. 129, 37 So. apoUs & St. L. Ry., 80 Minn. 191, 
 
 314. 83 N. W. 60. 
 
 [231] 
 
§ 277 ] Railroad Rate Regulation 
 
 taining the value of the plant, and especially is this true 
 where the property is being estimated for the purposes of 
 sale or condemnation; but as a basis for estimating profits 
 its significance is less apparent. The merchant who sells 
 an estabhshed business may properly place a high value 
 on the good will which he relinquishes to the buyer; but 
 so long as he continues in the enjoyment of the business 
 he has created he does not add the value of the good will 
 to his capital stock in estimating the percentage of his 
 annual profits." ^^ To a certain extent, however, a going 
 business is actually more valuable than the mere physical 
 elements of which the plant is composed. The physical 
 connections of its plant, the cost of fitting it for its pur- 
 pose, the loss of interest on the investment during con- 
 struction and until the plant is in complete and lucrative 
 operation, all add an actual value to the plant and are 
 properly included in the construction account and form 
 part of the actual capital employed in the enterprise.^^ 
 
 § 277. Franchise values. 
 
 It should be clear that in estimating the capital upon 
 which a public service company is entitled to a fair return 
 the value of a franchise enjoyed by the company cannot 
 be considered. The value of the franchise is itself based 
 on the capacity of the company to earn profits; and it 
 becomes greater when the earnings of the company are 
 increased. If, therefore, a high rate of income could be 
 justified on account of the great value of the franchise, 
 this fact would in turn enhance the value of the franchise 
 itself and so justify a still higher charge; and there would 
 be no limit to the legal charge of the company which 
 could be enforced should such franchise value be permitted 
 to increase in this way the capital charges. As Mr. 
 Justice Savage said in a Maine case *** not long ago in- 
 
 »2 Quoted from Cedar Rapids Wa- Norwich, 76 Conn. 565, 57 Atl. 746. 
 ter Co. V. Cedar Rapids, 118 Iowa, '* In Brunswick & T. Water Dist. 
 
 234, 91 N. W. 1081. v. Maine Water Co., 99 Me. 371, 59 
 
 '' See also Norwich G. & E. Co. v. Atl. 537. 
 
 [232] 
 
Basis of Capital Charges [ § 278 
 
 volving this point: "In connection it should be noticed 
 that to say that the reasonableness of rates depends 
 upon the fair value of the property used, and that the fair 
 value of the property used depends upon the rates which 
 may be reasonably charged, seems to be arguing in a 
 circle. If we should say that reasonableness of rates de- 
 pended solely upon the value of the property, and that 
 value of the property depended solely upon the rates 
 which may be reasonably charged, such would be the 
 case. But neither proposition is true." It unquestionably 
 follows that such franchise values cannot stand in the way 
 of rate regulation. As Mr. Justice Peckham recently said 
 in the Supreme Court of the United States as to a valua- 
 tion of the property of the Consohdated Gas Company '^ 
 which included some millions for its franchises: "Its past 
 value was founded upon the opportimity of obtaining these 
 enormous and excessive returns upon the property of the 
 company, without legislative interference with the price 
 for the supply of gas, but that immunity for the future 
 was, of course, tmcertain, and the moment it ceased and 
 the legislature reduced the earnings to a reasonable sum 
 the great value of the franchises would be at once and 
 unfavorably affected." 
 
 § 278. Purchase values. 
 
 Whether when the plant of a public service company 
 is taken by a city, by eminent domain or by contract, 
 compensation is to be made for the franchises of the com- 
 pany is not entirely clear on the authorities. The ques- 
 tion should of course be determined according to whether, 
 in view of the purchase or taking, any value remains in 
 the franchise. Although the company may be compelled 
 to submit to statutory rates which make no account of 
 the existence of a franchise, the franchise may neverthe- 
 less be of some value. Even when the rates are so limited, 
 
 's WiUcox V. ConsoUdated Gas Co., 212 U. S. 19, 53 L. ed. 382, 29 Sup. 
 
 Ct. 192. 
 
 [233] 
 
§ 279 ] Railroad Rate Regulation 
 
 the company is still permitted to receive a return on its 
 capital which is greater than that on a government bond; 
 the ownership of the plant may, therefore, have a certain 
 value which the franchise gives. And if the franchise 
 actually has a value, compensation for it should be made. 
 If, then, a public service company has obtained from the 
 public authorities an exclusive franchise for a term of 
 years, which has been granted in such a way as to form a 
 contract which the State cannot impair, the franchise has 
 obviously a certain value, for the opportunity to make 
 a fair rate of return in a business so safe as this is by rea- 
 son of its monopoly in a public necessity is worth a cer- 
 tain smn in itself.'* But no more than this need really 
 be paid even for such an exclusive franchise, no matter 
 what its present profits may be, since the State may at 
 any time reduce its rates to a fair return upon its actual 
 investment. Even if there is no monopoly, if the fran- 
 chise is practically exclusive, it presumably has a value, for 
 which the company must be paid if the plant is taken by 
 eminent domain or is bought under a clause in the charter. 
 The value of this franchise is greater or less according 
 to the practical possibility of competition; it is greatest 
 if the franchise is legally exclusive, and grows less as the 
 likelihood of actual competition increases." 
 
 § 279. Tax appraisals. 
 
 It is sometimes urged that the valuation placed upon 
 the property of the company for taxation should establish 
 the present value. While it is true that this furnishes 
 some criterion, it certainly is open to show the conomon 
 fact that assessments on the district in question are 
 
 9« Bristol V. Bristol & Warren Wa^ ville, 97 Me. 185, 54 Atl. 6, 60 L. R. A. 
 
 terworks, 23 R. I. 274, 49 Atl. 856. 
 974. In case of sale to a city the value 
 
 Compare Gloucester Water Co. v. of company's contract with the city 
 
 Gloucester, 179 Mass. 365, 60 N. E. is to be considered. Covington Gas- 
 
 977. light Co. V. City of Covington, 22 
 
 " Kennebec Water Dist. v. Water- Ky. L. Rep. 796, 58 S. W. 805. 
 [234] 
 
Basis of Capital Chaeges [ § 280 
 
 usually no more than a certain percentage of actual 
 values.^* Even its sworn return of tangible property has 
 been held not to estop the company from showing higher 
 value in disputing the reasonableness of legislative rates. 
 But such returns are evidence against the company which 
 seeks to establish higher value. Returns made to local 
 bodies for parts of the physical property do not however 
 prevent the company from showing that the value of the 
 property as a whole is greater than the aggregate of these 
 parts. On the other hand, the State by assessing a value 
 for taxation does not estop itself from reducing that value 
 by later regulation of rates. As the United States Su- 
 preme Court recently pointed out in the Consolidated 
 Gas Case ^ even a franchise tax is a tax on the actual 
 value of the franchise as it exists at any particular time; 
 and the imposition of it is quite consistent with the value 
 of the franchise being subject to diminution by a dimin- 
 ished income as a result of legislation reducing rates. 
 The company may be taxed upon its franchise when by 
 reason of the failure of the State to keep its rates down it 
 is earning an extraordinary amount upon its physical 
 value. But when the State chooses to so reduce the rates 
 that the company can earn nothing beyond the fair value 
 of its tangible property, it will find that it has Uttle or 
 no franchise value left to tax. 
 
 § 280. Development cost. 
 
 That there are certain actual costs incurred in develop- 
 ing the business during its early stages, for which costs 
 the utility is entitled to be reimbursed, just as clearly as 
 it is entitled to a return on the physical portions of its 
 plant, seems to be too obvious for argument. The in- 
 vestor must go into his pocket to meet one kind of cost 
 
 "Southern Pacific Ry. Co. v. '^ Willcox v. Consolidated Gas 
 
 Railroad Commrs., 78 Fed. 236. Co., 212 U. S. 19, 53 L. ed. 382, 29 
 
 See also Louisville & N. Ry. Co. Sup. Ct. 192. 
 V. Brown, 123 Fed. 946. 
 
 [235] 
 
§ 281 ] Railroad Rate Regulation 
 
 just as clearly as the other. There are two schools of 
 thought with reference to the determination of the so- 
 called "development cost" value. The first of these is a 
 continuation of the cost or investment theory of value, and 
 is based upon the actual losses sustained by the utility 
 in the past, and its subsequent earnings as an offset to 
 such losses. Under the cost method the going value of 
 the enterprise is properly the difference between gross 
 earnings and operating expenses plus depreciation and 
 interest upon the investment. ^ In determining what ex- 
 penditures listed as operating are to be included, the dis- 
 tinction as to what are revenue and what are depreciation 
 and capital expenditures should be carefully maintained. 
 A question of equal importance is whether expenditures 
 have been wisely and necessarily incurred. The cost 
 basis of estimating going value has been variously criti- 
 cised by some, upon the ground that its estimates are too 
 liberal, by others that it results in negative value and 
 takes recognition of the utility's past financial history.^ 
 Its obvious merit lies in the fact that it assumes that the 
 relations of users and utility have at all times been 
 placed upon an equitable basis. The comparative plant 
 method of estimating going value is a combination of the 
 appraisal or cost of reproduction theory of value and is 
 based upon the assumption that an identical utility prop- 
 erty shall have been reproduced at the present time, and 
 estimates the expenditm-es probably made before the hy- 
 pothetical or comparative plant shall have been placed 
 upon an earning basis identical with the present property. 
 
 § 281. Capitalized rights. 
 
 The real truth is that in public service, where there is 
 no right to earn more than a fair return upon capital 
 invested, there is no scope for any intangible value rep- 
 
 ' See Public Service Gas Co. v. ' See People ex rel. v. Willcox, 210 
 
 Public Utility Commisaioners, 84 N. Y. 479, 104 N. E. 911. 
 N. J. L. 463, 87 Atl. 651. 
 
 [ 236 ] 
 
Basis of Capital Charges [ § 282 
 
 resenting additional earning capacity. If a telephone com- 
 pany owns patents, its ownership of such intangible prop- 
 erty is no more sacred than of its tangible property; 
 it is subject to the rights of the pubUc in this respect 
 as in any other; and it must not charge against the pubhc 
 any value in the patent dependent upon the earnuigs 
 which its monopoly of this device would give it. So of 
 patent rights possessed by any utility; such rights may, 
 undoubtedly, have values; but it would hardly seem that 
 such values can properly be considered as permanent 
 capital charges. Rights of this kind are, as a rule, secured 
 because they are profitable or because, in one way or 
 another, they tend to increase the net earnings. Like- 
 wise the exclusive contracts of the express companies 
 with the railroads cannot be capitalized. Express rates 
 cannot be based upon the monopoly right to be the ex- 
 clusive forwarder over one or more railroads.' And a 
 contract which a local lighting company has with a hydro- 
 electric plant to supply it with electricity upon very 
 favorable terms, cannot be capitalized and a return de- 
 manded thereon.^ 
 
 § 282. Governmental valuations. 
 
 In the near future the Commission itself will ascertain 
 the value of railroad properties and if the original cost of 
 the railroads can be satisfactorily determined, and if this 
 is the base of regulation which is thereupon adopted by the 
 courts, it will be in shape to deal with the future on the 
 basis of the past.^ The statute specifically provides that 
 upon the completion of valuation the Commission shall 
 thereafter in like manner keep itself informed of all ex- 
 tensions and other changes in the value of the properties 
 of the railroads, and that it shall from time to time re- 
 
 ' In re Express Rates, 24 I. C. C. Conduit Co., 3 P. S. C. 2d Dist. 
 380. N. Y. 656. 
 
 * Furhmann v. Cataract Power & * Detroit Switching Charges, 28 
 
 I. C. C. 494. 
 
 [237] 
 
§ 283 ] Railroad Rate Regulation 
 
 vise and correct its valuations. To enable the Commis- 
 sion to keep its valuation up to date as far as possible 
 the railroads shall make such reports and furnish such in- 
 formation as the Commission may require. And yet one 
 wonders whether this is an ultimate finality. Can the 
 power be taken from the courts to determine by what 
 facts and under what theories one shall be deprived of 
 his all by governmental bodies? Perhaps by the time 
 this question comes to the courts of last resort people 
 will feel that we should not expect to hold any rights, 
 however fundamental, save at the disposal of the com- 
 missions set over us to take us in charge. This is all 
 largely an engineering problem of a higher sort, and should 
 be solved upon business principles which are well ac- 
 credited. Such authorities would well understand that 
 current interest during the construction period (query 
 whether this should not be a fair profit) is to be added to 
 the capital charge.^ 
 
 § 283. Treatment of unearned increment. 
 
 Not only does it tend in the way described to demoralize 
 public service to throw unmerited loss upon its proprietors, 
 but it is even more obviously against the interests of the 
 public to give the companies benefit of the unearned 
 increment, due to the advance in value of property simi- 
 larly circumstanced. Society is looking hungrily upon these 
 values which it has itself given to private property, and 
 where that property has a pubHc character it is to-day 
 barely holding itself in check. To one who is staking 
 much upon the sanctity of property there is a threaten- 
 ing portent. Said the Commission in one of its most 
 important opinions in late years,' "This question is not 
 of paramount importance in this case, but, it is urged, 
 may become one of supreme moment if the carriers insist 
 
 ' See Long Branch Commission v. ' Advance in Rates Cases of 1910, 
 Tintum Manor W. Co., 70 N. J. Eq. 20 I. C. C. 243 et seq.. 
 
 71, 62 Atl. 474. 
 
 [238] 
 
Basis of Capital Charges [ § 284 
 
 upon a right to increase rates in proportion to increasing 
 land values. In a very real sense these added land values 
 do not come to the railroad as a railroad, but as an in- 
 vestor in land which has been dedicated to a public use; 
 and, being so dedicated, it may be strongly urged that the 
 increment added thereto from year to year by communal 
 growth should not necessitate an imposition of additional 
 burdens upon the public." If the courts weaken in their 
 protection of present values those unearned values wiU 
 be the first to go. The companies will be fortunate then if 
 they can save out of the total enough to recoup themselves 
 for past deficit uneamings. The New York Commission, 
 for example, holds that, while each case must be decided 
 upon the facts peculiar to it, it is proper to take the land at 
 its fair present value, and not at its original cost, and to 
 treat the annual appreciation of the land as a profit of the 
 company.* 
 
 § 284. Valuation of utilized realty. 
 
 Strategic position as such can hardly be urged since the 
 sharp language in the Minnesota Rate Cases.^ It used 
 to be the fashion among railroad counsel to ask what it 
 would cost another railroad to seize an existing terminal 
 of the railroad with its superior position for serving the 
 commercial community. It was claimed, that under the 
 established rule of present value, whatever that cost would 
 be, was protected by the Constitution in rates cases. It 
 was said that this value of the site was to be determined 
 by finding what the adjoining lands were now worth, and 
 what demolition of buildings thereon. The right of way 
 was valued by a corresponding contention at what an 
 .additional strip beside it would cost, having in mind that 
 in condemnation proceedings there was usually a ratio of 
 3 to 1 as compared with other purchases. But the recent 
 
 'See Pioneer Tel. & Tel. Co. v. "Simpson v. Shepard, 230 U. S. 
 
 Westenhaver, 29 Okla. 429, 118 Pac. 352, 57 L. ed. 1511, 33 Sup. Ct. 
 354. 729. 
 
 [ 239 ] 
 
§ 285 ] Railroad Rate Regulation 
 
 decision of the Supreme Court has done away with this 
 line of argument by saying that no arbitrary rules of this 
 sort would be permitted, and that the theory of valua- 
 tion underlying this was simply capitalizing the value of 
 the business which the public was doing with the railroads 
 on this site. A railroad exercises the right of eminent 
 domain to secure its location, and the right of eminent 
 domain can only be lawfully exercised for a public pur- 
 pose. The location secured by this method for a public 
 purpose cannot justly create a monopoly that will be 
 capitalized against the very public purpose that it was 
 intended to serve, the transportation of freight and pas- 
 sengers.^" 
 
 Topic D. Cost of Reproduction 
 
 § 286. Rule of the Minnesota courts. 
 
 According to the rule adopted in Minnesota the value 
 on which a railroad is entitled to a fair return is the cost 
 of reproducing the road in its present condition at pres- 
 ent prices. If extraordinary expenses were necessary in 
 establishing the road, or if higher prices prevailed at the 
 time it was built, these should not enter into consideration 
 at all; the rule of value laid down in the case of Mil- 
 waukee Electric Railway and Light Company v. Mil- 
 waukee " and generally elsewhere, is not followed. The 
 leading case on this point in Minnesota is Steenerson v. 
 Great Northern Railway, ^^ where in delivering the prin- 
 cipal opinion in the case Mr. Justice Canty said: "The 
 railroad may have been constructed years ago, when iron 
 rails cost $85 per ton, and everything else in proportion, 
 or it may have been constructed yesterday, when steel 
 rails cost but $16 per ton, and everything else nearly in 
 proportion. Counsel for the railway company dwell much 
 upon the original cost of the older portions of these lines 
 of road. If a railroad was built 30 years ago at a cost of 
 
 i» See Missouri, K. & T. Ry. v. " 87 Fed. 577. 
 
 Love, 177 Fed. 493. " 69 Minn. 353, 72 N. W. 713. 
 
 [240] 
 
Basis of Capital Charges [ § 286 
 
 $40,000 per mile, and another one equally as good was 
 built within a year through the same territory at a cost 
 of $12,000 per mUe, on what principle should it be held 
 that the old road is entitled to 3 1-3 times as much in- 
 come as the new road? No guaranty was ever given by 
 the State to the old road that the price of materials and 
 the cost of construction would not decline, or that capital 
 invested in raUroads should not be subject to like vicis- 
 situdes as capital invested in other enterprises. Modern 
 improvements and other causes have continued to reduce 
 the cost of construction of all kinds of new plants, and to 
 reduce the value of old plants, or render them wholly 
 worthless, and the State did not guaranty that those 
 causes should not in like manner affect the capital in- 
 vested in railroads. Then the material question is not 
 what the railroad cost originally, but what it would now 
 cost to reproduce it." 
 
 § 286. Methods of Texas commission. 
 
 This rule of replacement has been acted upon by other 
 commissions than that of Minnesota, but not with the 
 same success. In one of the opinions of the Interstate 
 Commerce Commission this is said about the practice 
 of the Texas commission : ^^ "The valuations of the Texas 
 Commission of 1895 were by no means a guess. They 
 were made in great detail, with great pains and with an 
 honest attempt at accuracy. The purpose of the valua- 
 tion was to determine not properly the value of a par- 
 ticular railroad but the cost of reproducing it at that time. 
 Each mUe was taken by itself and each item which enters 
 into the cost of constructing a railroad by itseh in actual 
 quantities as shown by the profiles of the various roads. 
 The allowances for the different items were liberal. Noth- 
 ing was, however, allowed for the seasoning of the roadbed 
 so to speak, nor for the franchise and good will of the 
 railroad. The results arrived at did not perhaps express 
 
 " Rates from St. Louis to Texas Points, 11 I. C. C. Rep. 264. 
 16 f 241 ] 
 
§§ 287, 288 ] Railroad Rate Regulation 
 
 the value of the properties, but they did express, and with 
 substantial fairness and accuracy, the cost of reproducing 
 those properties at the time of the valuation." " 
 
 § 287. The federal courts opposed. 
 
 The Minnesota rule having been applied by the Texas 
 Railway Commission in fixing railroad rates in that State, 
 the railroads filed in the federal court a bill for an injunc- 
 tion against the rates. The rule was held to be an im- 
 proper and unreasonable one, and the exaction of the rates 
 as fixed by the commission was restrained. ^^ Circuit 
 Judge McCormick said: "It is therefore not only im- 
 practicable, but impossible to reproduce this road, in any 
 just sense, or according to any fair definition of those 
 terms. And a system of rates and charges that looks to a 
 valuation fixed on so narrow a basis as that shown to 
 have been adopted by the commission, and so fixed as to 
 return only a fair profit upon that valuation, and which 
 permits no account for betterments made necessary by 
 the growth of trade, seems to me to come clearly within 
 the provision of the Fourteenth Amendment to the Con- 
 stitution of the United States, which forbids that a State 
 shall deprive any person of property without due process 
 of law, or deny any person within its jurisdiction the equal 
 protection of the laws." '' 
 
 § 288. Explanation of the California decisions. 
 
 Certain California decisions ^^ appear to hold that noth- 
 ing but the cost of reproduction is to be considered. The 
 cases did not, however, go quite so far. They are well 
 considered and explained by Circuit Judge Morrow in the 
 federal court in the Ninth Circuit: ^^ "Neither of these 
 
 " See, however, National W. W. " San Diego Water Co. v. San 
 
 Co. V. Kansas City, 62 Fed. 853. Diego, 118 Cal. 656, 50 Pac. 633; 
 
 " Metropolitan Trust Co. v. Hous- Redlands L. & C. D. Water Co. v. 
 
 ton & T. C. R. R., 90 Fed. 683. Redlands, 121 Cal. 365, 53 Pac. 
 
 "Milwaukee Electric Ry. & L. 843. 
 
 Co. V. Milwaukee, 87 Fed. 577, i' Spring Valley Waterworks v. 
 
 goes almost to the same extent. San Francisco, 124 Fed. 574. 
 
 [242] 
 
Basis of Capital Charges [ § 289 
 
 cases goes to the extent of holding that in determining the 
 value of the property of a corporation neither the capital 
 stock nor bonded indebtedness can be considered. It is 
 doubtless true that in many cases these elements may be 
 excessive or fictitious, and represent Speculative, rather 
 than real and substantial, values. But there may be 
 cases where both stock and bonds represent in the market 
 a present actual value in the property of the corporation, 
 and a value that could not be otherwise very well estab- 
 lished. In such a case, what objection can there be to 
 giving the evidence such consideration as, under all the 
 circumstances, it deserves? It seems to me there can be 
 none." 
 
 § 289. Condition of the plant itself. 
 
 The essential inadequacy of the reproduction rule has 
 often been remarked. The different factors that should 
 be considered are well set forth in the case of the National 
 Waterworks Company v. Kansas City,'* a suit brought 
 by a water company to enforce the statutory obligation 
 resting upon the city to pay to the company the "fair 
 and equitable value" of the whole works. In answer to 
 the theory that this would be satisfied by finding what 
 the works could be reproduced for, Mr. Justice Brewer 
 said that reproducing the waterworks plant would not be 
 a fair test, because that did not take into account the 
 value which flows from the established connections be- 
 tween the pipes and the buildings of the city. It is obvious 
 that the mere cost of purchasing the land, constructing 
 the buildings, putting in the machinery, and laying the 
 pipes in the streets — in other words, the cost of reproduc- 
 tion — does not give the present value of the property. A 
 completed system of waterworks, such as the company has, 
 without a single connection between the pipes in the 
 streets and the buildings of the city, would be a property 
 of much less value than that system connected, as it is, 
 
 " 62 Fed. 853, 10 C. C. A. 653. 
 
 [243] 
 
§ 290 ] Railroad Rate Regulation 
 
 with so many buildings, and earning, in consequence 
 thereof, the money which it does earn. In the case of 
 Knoxville v. Knoxville Water Company, 2° Mr. Justice 
 Moody pointed out that in estimating for regulating pur- 
 poses the value of a plant the cost of reproduction is not 
 a fair measure of value unless a substantial allowance 
 is made for the actual depreciation "which makes an old 
 plant of less value than a new one. And this he said in 
 the particular case resulted in putting too high a valua- 
 tion upon the waterworks. Its present physical value 
 he thought was not more than the cost of reproduction 
 less the actual depreciation. 
 
 § 290. What physical reproduction means. 
 
 The Interstate Commerce Commission feels that if 
 any importance whatever is to be attached to the cost of 
 reproduction in the establishment of railway rates, the 
 valuation must be undertaken by the Government itself. ^^ 
 At the same time it should be said that the true value of 
 a plant in operation as a going concern is actually more 
 than the itemized specifications for the construction of 
 the plant. Loss of return before the plant gets running, 
 indeed, is by engineering estimates included in the original 
 cost. At the same time it should be recognized that the 
 physical adaptation of the plant for the business done, 
 brought about by a long course of maintenance, should 
 be taken into account, such as the solidification of the 
 roadbed of a railroad by constant expenditure upon it. 
 Recently, therefore, the cost of reproduction was con- 
 sidered in determining reasonableness of rate.^^ It would 
 seem that it should be conceded that in addition to the 
 value of the tangible property some allowance is prop- 
 erly to be made for the cost of building up the business, 
 
 »> 212 U. S. 1, 53 L. ed. 371, 29 " Portland Chamber of (Commerce 
 Sup. Ct. 148. V. 0. R. R. & N. Co., 19 I. C. C. 
 
 " City of Spokane v. N. P. Ry., 265. 
 15 I. C. C. 376. 
 [244] 
 
Basis of Capital Charges [ § 291 
 
 resulting from the losses sustained before the property 
 has been placed upon a paying basis. Decisions of the 
 State commissions have recognized the necessity of com- 
 pensating for such early losses, and the existence of a 
 going value upon this basis is becoming well recognized. 
 It is the value of the enterprise that is in question, not 
 the plant itself; it is a business which is being regulated, 
 not a property. 
 
 § 291. Identical reproduction. 
 
 There are a number of different conceptions of the cost 
 of reproduction method.^' Cost of reproduction may 
 mean, either the cost at present prices of land, labor and 
 materials under hypothetical conditions, or the cost at 
 present prices of land, labor and materials of reproducing 
 the existing plant under the actual conditions under which 
 the existing plant was originally constructed. It is usual 
 to say that the rule makes the cost of a substantially iden- 
 tical reproduction of the existing plant the standard. It 
 does not mean, however, that obsolete facilities will be 
 exactly duplicated, but that they will be assumed to be 
 replaced by some modern substitute. On the other hand, 
 cost of reproduction may mean the cost of a substitute 
 plant of approved design, capable of performing the same 
 service as the existing plant. The present value of the 
 old plant is, by this standard, measured by the cost of an 
 equally efficient new plant, less an allowance for the de- 
 preciated condition of the old plant. Upon the whole, 
 it seems to be the most logical method of arriving at pres- 
 ent structural value, if that is to be the test. But one 
 difficulty in applying it arises from the fact that in many 
 cases it is exceedingly difficult and expensive to determine 
 on an equally efficient substitute plan.^* 
 
 " In Capital City Gas Light Co. v. the estimated cost of an equally 
 DesMoines, 72 Fed. 829, it was said efficient plant. 
 
 that valuation should be based upon '* See also Venner v. Urbana W. W. 
 
 Co., 174 Fed. 34S. 
 
 [2451 
 
§§ 292, 293 ] Railroad Rate Regulation 
 
 § 292. Intervening conditions. 
 
 Considered from all points of view the method of ar- 
 riving at present value, by inquiring cost of reproduction 
 of the existing plant under the actual physical and other 
 conditions under which it was actually constructed, is 
 perhaps fair to both parties in the majority of cases. It 
 is a rule that corresponds to the actual equities of the 
 parties, while the rule for reproduction, read as a whole 
 at the present time, gives an unfair advantage in some 
 cases to the public and in other cases to the company. 
 Every legitimate expenditure in adapting the utihty to 
 the demands of progress and community growth is a 
 proper charge to construction, and, as such, the investment 
 therefore, is entitled to participate in the distribution of 
 the earnings from operation. ^^ Obviously expenditures by 
 a traction system for payment incurred by the utility in 
 response to assessments levied therefor by the city, or 
 the cost of cutting through a pavement for construc- 
 tion purposes and its replacement, are proper capital 
 charges. It does not necessarily follow that the utility 
 is to capitalize expenses for municipal betterment in which 
 it has not participated, such as pavements laid later, where 
 such accruing benefits to the utility are remote. ^^ 
 
 § 293. Piece-meal construction. 
 
 Whether an allowance for piece-meal construction should 
 be made is more an engineering question than a legal 
 problem. It has seemed to some tribunals that the fact 
 the plant has been constructed piece-meal does not in- 
 crease its present value, although the cost of construction 
 by such method may have been greater than if it had been 
 constructed at one time.^^ On the other hand, as construc- 
 tion goes it is never let under one contract and done at 
 
 " See Des Moines W. W. Co. v. v. Cedar Rapids, 118 Iowa, 234, 91 
 Des Moines, 192 Fed. 193. N. W. 1081. 
 
 ^ But see Cedar Rapids W. Co. " See St. Louis Public Service Com- 
 mission (1911), p. 54. 
 
 [246] 
 
Basis of Capital Charges [ § 294 
 
 one time. The course followed in the constructing of 
 the existing plant would be the better test. Here again 
 if the actual course has been unreasonable, one which 
 could not have been considered good management at the 
 time, it should not be taken as a standard. But if the 
 construction has been well advised, it would seem to be 
 better to follow the actual course rather than a hypothet- 
 ical one. At the same time it should be appreciated that 
 the question for the experts where the reproduction test is 
 involved is what proper construction of the plant in ques- 
 tion would cost.^ 
 
 § 294. Overhead charges. 
 
 Apart from the expense of labor and material incurred 
 in constructing the plant, many additional costs must be 
 met which do not appear in the appraiser's inventory 
 of tangible property. Among these are the expenses of 
 organization preliminary to the construction of the prop- 
 erty, usually consisting of engineering and legal expenses; 
 the expenses of supervising, including the wages of all 
 contractors, superintendence and necessary administrative 
 organization; contingent costs due to loss in time and 
 material; and unexpected obstacles occurring during the 
 progress of construction; and, finally, the expense of financ- 
 ing the construction, consisting principally of interest on 
 money advanced prior to operation.^' Allowances for 
 such expenditures are usually made in appraisals of public 
 utility properties. The amoimt for such a percentage 
 allowance has frequently been made a matter of dispute 
 and is still a controverted point. Two methods of com- 
 puting overhead charges are in use: (1) a scheduling of the 
 items of the overhead; (2) a percentage allowance to be 
 added to structural value. ^^ 
 
 28 See Palo Alto Case before the No. 2, P. S. C. N. Y. 1st Dist. (1911). 
 
 Calif. R. R. Comm. (1913). '"See for the percentage system, 
 
 =»See for the itemized system, Wis. R. R. Com. Rep., vol. V, p. 
 
 Queens Borough G. & G. Co. Case, 13, 
 
 [247] 
 
§§ 295, 296 ] Railroad Rate Regulation 
 
 § 296. Unit prices. 
 
 If it is desired to base fair value on the reproduction 
 method in its strictest form, present prices are doubtless 
 the more logical. If the problem is, what will it cost to- 
 day to replace the existing plant, the prices of to-day 
 will naturally be used. The theory that an average for 
 a period of years preceding equal to the assumed con- 
 struction period shall be used has its difficulties.^^ More- 
 over, price movements are quite frequently in long cycles 
 and therefore present prices may be nearer the average 
 based on the past few years. On the other hand, it is 
 clear that a process of averaging by five or ten year 
 periods greatly reduces the fluctuation in price level. A 
 curve showing monthly prices averaged annually is uneven, 
 while with each lengthening of the period to two years, 
 five years, the curve is smoothed out and the variations 
 from year to year correspondingly reduced. If the re- 
 production method is used, not as an end in itself but as 
 a means of finding a fair and equitable basis for determin- 
 ing the relations between the investor and the consumer, 
 a modification reducing the effect of price fluctuations is 
 not inconsistent.^^ 
 
 § 296. Cost of building up the business. 
 
 The cost of building up the business must be taken into 
 consideration, in determining the value of the plants for 
 rate fixing purposes. Both justice and authority require 
 that a proper allowance should be made for this element in 
 placing a value on the property of public service corpora- 
 tions. The investor in public service properties should 
 receive a return on his investment for the entire period 
 during which it is devoted to the public service, and a 
 return not only on the first investment, but on the amount 
 necessarily spent in putting the business on a paying 
 basis, including profits foregone during the early years. 
 
 "See N. H. P. S. Com., 1912, "See Conn. P. U. Com., 1912, 
 p. 139. p. xxxvi. 
 
 [248] 
 
Basis of Capital Charges [ § 296 
 
 But there is no reason for including in a valuation under 
 the name of going value, the cost of securing all the busi- 
 ness connected with the property appraised. That the 
 allowance for going value should be sufficient to cover 
 the cost of bringing the property to the point where a 
 fair return upon the prior investment can be secured. 
 What should be taken is the average time for the com- 
 pletion of each operating unit, due allowance being made 
 for the cost of such unit. A pure average is not cor- 
 rect, for the amount of interest to be paid has relation, 
 not merely to the period, but to the cost of the work. 
 
 2491 
 
CHAPTER VII 
 
 RATE OF RETURN 
 
 § 300. Provisions of the Act. 
 301. Elements in determining a fair return. 
 
 Topic A. Establishment of the Doctrine 
 
 § 302. Establishment of the power to restrict charges! 
 
 303. Rates fixed must not produce a deficit. 
 
 304. Adequate return must be left. 
 
 305. Reasonable return must be left. 
 
 306. Reasonableness of return a judicial question. 
 
 307. Reasonable profit upon each transaction. 
 
 308. Jurisdiction of the Commission. 
 
 309. Status of the companies affected. 
 
 Topic B. Fair Bate of Return 
 
 § 310. Interest upon bonds protected. 
 
 311. Rates at which governments can borrow no criterion. 
 
 312. Prevailing rate of interest allowed. 
 
 313. What are reasonable dividends? 
 
 314. Current rate of return. 
 
 315. Fair rate of return. 
 
 316. Current rate the standard. 
 
 317. Reasonable profits sufficiently safe. 
 
 318. Rate of return upon investments in general. 
 
 319. Public service has its peculiar risks. 
 
 Topic C. Policies Respecting Return Allowed 
 
 § 320. General policy for allowing a fair return. 
 
 321. No right to raise rates in prosperous times. 
 
 322. Commercial conditions affecting dividends. 
 
 323. More than current rates of interest not secured. 
 
 324. How interest payable is considered. 
 
 325. Profits divided not operating expense. 
 
 326. Consolidation of interest and dividends. 
 
 327. Reductions ruinous only to certain companies. 
 
 328. Creating a fund for payment of uniform dividends. 
 
 329. Greater profit for better service. 
 
 [250] 
 
Rate of Retdrn [ §§ 300, 301 
 
 Topic D. Character of the Enterprise 
 
 § 330. Larger returns in risky enterprises. 
 
 331. Hazards of the business considered. 
 
 332. Whether uniform return upon aU property. 
 
 333. Rate of interest dependent upon safety. 
 
 334. Risk by reason of depreciated security. 
 
 335. Rate of return dependent upon locality. 
 335. Investment in public service. 
 
 337. Present tendencies in regulation. 
 
 § 300. Provisions of the Act. 
 
 The question of rate of return has been subjected to the 
 jurisdiction of the Commission only to the extent of 
 giving it oversight over payments of this sort. Such pay- 
 ments to owners of securities must be duly reported; and 
 the requirements of the Commission in regard to accoimt- 
 ing are such that the result will be that dividends wiU 
 only be showed as having been earned, after allowances 
 for depreciation and betterments, such as the Commission 
 requires, shall be met. In section 20 it is provided that 
 the annual reports, which carriers subject to the Act shall 
 file with the Commission, shall show in detail the amount 
 of capital stock issued, the amounts paid therefor, and 
 the manner of payment for the same; the dividends paid, 
 the surplus fimd, if any, and the number of stockholders; 
 the funded and floating debts and the interest paid thereon; 
 and the cost and value of the carrier's property, franchises, 
 and equipments. Later in the section it is provided that 
 the Commission may, in its discretion, prescribe the forms 
 of any and all accounts to be kept by carriers subject to 
 the provisions of the Act. The exercise of the powers of 
 the Commission under these provisions of the Act are also 
 discussed in Chapter XX, particularly in Topic A. 
 
 § 301. Elements in determining a fair return. 
 
 What constitutes a fair rate of return may not be fixed 
 by general rule, but is largely a question of the particular 
 case. It depends to a certain extent upon the character 
 of the enterprise; in established businesses, a lower rate 
 
 [2511 
 
§ 302 ] Railroad Rate Regulation 
 
 should be expected than in new ventures. Again, it de- 
 pends upon the nature of the security; upon bonds, a 
 lower rate of interest is secured than the percentage pay- 
 able in dividends upon stocks. These are the principal 
 considerations; but as the discussion advances it will 
 be seen that there are other minor matters to be taken 
 into account. It will make some difference, also, in what 
 manner the matter comes before the court for decision. 
 If the question is whether a rate fixed by one in a pubUc 
 service is producing an unreasonably high rate of return, 
 that is one thing. If the question is whether a rate fixed 
 by pubUc authority, either by the legislature directly or 
 by a commission acting in pursuance of legislative au- 
 thority, is unreasonably low, that is another matter. It 
 is obvious that there is all the difference of reasonable 
 alternatives between these two aspects of the problem, 
 that eight per cent might not be too much return by a 
 schedule fixed by the company in one case, while a reduc- 
 tion of a schedule by legislation so as not to produce more 
 than six per cent might not be thought outrageous in the 
 other. 
 
 Topic A. Establishment of the Doctrine 
 
 § 302. Establishment of the power to restrict charges. 
 
 The earUer cases under the Fourteenth Amendment 
 simply established that the State might regulate the rates 
 of those engaged in pubUc employment. The attention 
 of the court was directed to showing that the power to 
 regulate existed, and practically nothing was said about 
 the limitations upon that power. And, indeed, the com- 
 plainants did not adduce evidence that the rates fixed by 
 the State were inadequate; they denied altogether that the 
 rates could be regulated at all. The idea of these earUer 
 cases, so far as one can judge from the language used, 
 was that regulation of rates might go to any extent, so 
 long as a deficit was not brought about.*' In the much- 
 
 " The federal cases of this period, net profit left, apparently no matter 
 which held that if there waa any how small, the legislation was not 
 
 [252] 
 
Rate of Return [ § 303 
 
 quoted case of Chicago and Northwestern Railroad v. 
 Dey,'^ Mr. Justice Brewer, then in the Circuit Coiu*t, 
 said: "The rule, therefore, to be laid down is this: That 
 where the proposed rates will give some compensation, 
 however small, to the owners of the railroad property the 
 courts have no power to interfere. Appeal must then be 
 made to the legislature and the people. But where the 
 rates prescribed will not pay some compensation to the 
 owners, then it is the duty of the courts to interfere and 
 protect the companies from such rates." 
 
 § 303. Rates fixed must not produce a deficit. 
 
 As soon as the power to regulate was once established, 
 the point was urged that the power had its limitations, and 
 this the court conceded in very guarded language. For 
 example, in the Railroad Commission Cases,^^ Chief Jus- 
 tice Waite said: "From what has thus been said it is not 
 to be inferred that this power of limitation or regulation 
 is itself without limit. This power to regulate is not a 
 power to destroy, and limitation is not the equivalent of 
 confiscation." As late as the case of Reagan v. Farmers' 
 Loan & Trust Company '^ this requisite was not stated 
 unequivocally. In that case Mr. Justice Brewer said: 
 "It is imnecessary to decide, and we do not wish to be 
 understood as laying down an absolute rule that in every 
 case a failure to produce some profit to those who have 
 invested their money in the building of a road is conclu- 
 sive that the tariff is \mjust and unreasonable. And yet 
 justice demands that every one should receive some com- 
 pensation for the use of his money and property, if it be 
 possible without prejudice to the rights of others." " 
 
 confiscatory, were: Munn v. Illi- F. & W. R. R. Co., 5 Fed. 641; 
 
 nois, 94 U. S. 113, 24 L. ed. 72; Wells v. Oregon Ry. & Nav. Co., 
 
 Peik V. Chicago & N. W. Ry. Co., 15 Fed. 561. 
 
 94 U. S. 164, 24 L. ed. 97; Chicago, " 35 Fed. 866, 1 L. R. A. 744. 
 
 B. & Q. Ry. Co. V. Iowa, 94 U. S. '' 116 U. S. 307, 29 L. ed. 636. 
 
 155, 24 L. ed. 94; Chicago, M. & » 154 U. S. 362, 38 L. ed. 1014, 14 
 
 St. P. R. R. Co. V. Ackley, 94 U. S. Sup. Ct. 180. 
 
 179 24 L. ed. 99; Tilley v. Savannah, '' The Federal cases of this transi- 
 
 [ 253 ] 
 
§ 304 ] Railroad Rate Regulation 
 
 § 304. Adequate return must be left. 
 
 But in 1898, in the important case of Smyth v. Ames,'* 
 a disposition was shown to give more protection to the 
 owners of the raiboads. It was proved in that case that 
 the regulation complained of might, very probably, leave 
 some return above all proper charges. But this did not 
 satisfy the court, Mr. Justice Harlan saying: "What the 
 company is entitled to ask is a fair return upon the value 
 of that which it employs for the public convenience. On 
 the other hand, what the public is entitled to demand 
 is that no more be exacted from it for the use of a public 
 highway than the services rendered by it are reasonably 
 worth." Ever since this case the doctrine has been well 
 established that except in abnormal cases legislation re- 
 ducing rates which does not leave a fair profit upon the 
 capital involved is virtually confiscatory. It should be 
 noted, as was pointed out not long ago in Missouri, 
 Kansas & Texas Railway v. Interstate Commerce Commis- 
 sion '' that these hmitations apply to the Interstate Com- 
 
 tion period when it was hoped that City S. Y. Co., 183 U. S. 79, 46 L. ed. 
 a profit would normally be left the 92, 22 Sup. Ct. 30; Southern Pac. 
 public service company whose rates Ry. Co. v. Railroad Commission, 78 
 had been reduced by legislation Fed. 236; Northern Pac. Ry. Co. v. 
 were: Dow v. Beidelman, 125 U. S. Keyes, 91 Fed. 47; Milwaukee Elec- 
 680, 31 L. ed. 841, 8 Sup. Ct. 1028; trie Ry. Co. v. Milwaukee, 87 Fed. 
 Chicago & G. T. Ry. v. Wellman, 677; Ozark Bell Telephone Co. v. 
 143 U. S. 339, 36 L. ed. 176, 12 Springfield, 140 Fed. 666; Southern 
 Sup. Ct. 400; Chicago N. W. R. R. v. R. R. Co. v. M'Neill, 155 Fed. 756; 
 Dey, 35 Fed. 866, 1 L. R. A. 744; Seaboard Air Line Ry. Co. v. Rail- 
 Chicago & P. M. & O. R. R. Co. V. road Comm., 155 Fed. 792. 
 Becker, 35 Fed. 883. ''164 Fed. 645. See Hooker v. 
 
 »« 169 U. S. 466, 42 L. ed. 819, 18 Interstate Commerce Commission, 
 
 Sup. Ct. 418. See also St. Louis & 188 Fed. 484. 
 
 San Francisco Ry. Co. v. Gill, 156 See the recent United States 
 
 U. S. 649, 39 L. ed. 567, 15 Sup. Ct. Supreme Court cases in which the 
 
 484. propriety of the action of the Com- 
 
 In the following federal cases, mission under its recent powers to 
 
 among others, the new rates imposed fix rates has been brought in question 
 
 by governmental authority were held such as: Interstate Commerce Com- 
 
 confiscatory by the above prin- mission v. Stickney, 215 U. S. 98, 30 
 
 ciples on the showing made by the Sup. Ct. 66; Interstate Commerce 
 
 evidence adduced. Cotting v. Kansas Commission v. Union P. Ry., 233 
 [254] 
 
Rate of Return [ § 305 
 
 mission by virtue of the protection of property from in- 
 vasion by the United States under the Fifth Amendment, 
 just as much as these principles hold the hands of the State 
 commissions by virtue of the Fourteenth Amendment. 
 
 § 305. Reasonable return must be left. 
 
 The present doctrine of the United States Supreme 
 Court, as seen in Stanislaus County v. San Joaquin Canal 
 and Irrigation Company,^" is that rates of a public service 
 company may be reduced any amount provided that a 
 reasonable return is left to the owners upon the value of 
 the property devoted to the public use. In that case an 
 ordinance adopted by a board of supervisors fixing water 
 rates was objected to because the results would work a 
 reduction of its rates from eighteen to six per cent. The 
 reply of Mr. Justice Peckham, in the Supreme Court of 
 the United States, to this contention was: "It is not con- 
 fiscation, nor a taking of property without due process of 
 law, nor a denial of the equal protection of the laws, to 
 fix water rates so as to give an income of six per cent 
 upon the then value of the property actually used for 
 the purpose of supplying water as provided by law, even 
 though the company had prior thereto been allowed to 
 fix rates that would secure to it one and one-half per cent 
 a month income upon the capital actually invested in the 
 undertaking. If not hampered by an unalterable con- 
 tract, providing that a certain compensation should al- 
 ways be received, we think that a law which reduces the 
 compensation theretofore allowed to six per cent upon the 
 present value of the property used for the public is not 
 unconstitutional. There is nothing in the nature of con- 
 
 U. S. 541, 56 L. ed. 308, 31 Sup. Ct. Missouri Pacific Ry. v. Tucker, 230 
 
 108; and also the latest cases in that U. S. 340, 57 L. ed. 1507, 33 Sup. Ct. 
 
 court on appeal, pointing out that 962; Louisville & N. Ry. v. Garrett, 
 
 for the authorities of a State to 231 U. S. 298, 57 L. ed. 1597, 33 Sup. 
 
 attempt to require a carrier to serve Ct. 985. 
 
 for a rate less than what is truly " 192 U. S. 201, 48 L. ed. 406, 24 
 
 reasonable is virtually confiscation: Sup. Ct. 241. 
 
 [255] 
 
§ 306 ] Railroad Rate Regulation 
 
 fiscation about it." ^^ It should be noted that the State 
 courts are limited by guarantees of similar tenor in their 
 own constitutions, as well as by the Fourteenth Amend- 
 ment to the Federal Constitution. One way or another, 
 therefore, precedents as to the meaning of confiscation 
 are signijficant generally in this connection. ■'^ 
 
 § 306. Reasonableness of return a judicial question. 
 
 In a comparatively recent case, this elementary rule is 
 stated in most emphatic language. It appeared in the 
 case of Palatka Waterworks v. Palatka *^ that an ordi- 
 nance of the city had reduced rates fifty per cent, and 
 against the enforcement of these new rates an injimction 
 was asked. In granting this Judge Shelby said: "Con- 
 ceding the legislative right to regulate the charges to be 
 made by the complainant for water, such regulation must 
 be within reasonable limits. It could not lawfully go to 
 the extent of depriving the complainant of all income 
 from its investment, and in effect confiscate its property. 
 The power to regulate could not legally be used as the 
 power to destroy. The question of the reasonableness 
 of such regulations is one for judicial examination and 
 determination. But the judiciary ought not to interfere 
 with rates estabUshed under legislative sanction, where 
 the legislature has the right to act, unless they are plainly 
 and palpably so unreasonable as to make their enforce- 
 
 " To the same effect is Spring delphia County, 220 Pa. St. 100, 68 
 
 Valley Waterworks v. Schottler, 110 Atl. 676, 15 L. R. A. (N. S.) 108; 
 
 U. S. 347, 28 L. ed. 173, 4 Sup. Ct. State v. Central Vt. Ry. Co., 81 Vt. 
 
 48. 463, 71 Atl. 194, 130 Am. St. Rep. 
 
 " In the following cases, among 1065. 
 
 others, in the State coiu-ts the extent *' 127 Fed. 161. Citing Covington 
 
 of these constitutional limitations Road Co. v. Sandford, 164 U. S. 578, 
 
 was discussed generally: Spring Val- 17 Sup. Ct. 198, 41 L. ed. 560; 
 
 ley Waterworks v. San Francisco, San Diego Land Co. v. National 
 
 82 Cal. 286, 22 Pac. 910; Chicago v. City, 174 U. S. 739, 19 Sup. Ct. 804, 
 
 Rogers Pk. Co., 214 111. 212, 73 N. E. 43 L. ed. 1154. 
 
 375; Maryland Tel. Co. v. Simons See also Farmers' Loan & T. Co. 
 
 Sons Co., 103 Md. 137, 63 Atl. 314; v. No. Pacific Ry., 83 Fed. 249; 
 
 Pennsylvania R. R. Co. v. Phila- Ball v. Rutland R. R., 93 Fed. 513. 
 
 [256] 
 
Rate of Return [ § 307 
 
 ment equivalent to depriving the complainant of reason- 
 able returns on its investment; but judicial interference is 
 proper when the case shows an attack upon the rights 
 of property, under the guise of regulating, which will 
 make the plaintiff's property valueless in his hands." 
 Since reasonableness of return is a judicial question, 
 any attempt to prevent access to the coiu-ts to test the 
 vaUdity of rates established by the authorities by imposing 
 severe penalties as in Ex parte Young ** makes the scheme 
 of regulation void, unless provision is made for trying 
 out the issue in some way. 
 
 § 307. Reasonable profit upon each transaction. 
 
 It will be assumed throughout this discussion that all 
 that the law secures to those who devote their capital to 
 public business is the enjoyment of total receipts from that 
 business, be it large or small, sufficient to show a fair per 
 cent of profit upon that capital each year. This undoubt- 
 edly is the general rule with which the courts have been 
 working. However, there are some decisions as to cer- 
 tain businesses, which must be reckoned with, that suggest 
 a different basis. According to these dicta, in certain 
 businesses, at least, the proprietors are entitled to a fair 
 percentage of profit upon each service it renders, regard- 
 less of the total return this in the aggregate may show 
 upon the capital that is employed. In deciding against 
 legislation reducing the charges of a stock yard the Su- 
 preme Court *^ said: "The question is not how much he 
 makes out of his volume of business, but whether in each 
 
 '* 209 U. S. 123, 52 L. ed. 714, 28 33 Sup. Ct. 985. See also Louisville 
 
 Sup. Ct. 441. See also Missouri & N. v. Garrett, 231 U. S. 298, 34 
 
 Pacific Ry. v. Tucker, 230 U. S. Sup. Ct. 48, when the provisions 
 
 340, 57 L. ed. 1507, 33 Sup. Ct. 961. were held to be separable. 
 
 If, however, the statute imposing « Cotting v. Kansas City Stock 
 
 the penalty may be construed so as Yards Co., 183 U. S. 79, 46 L. ed. 
 
 not to be applicable to one testing its 92, 22 Sup. Ct. 30. 
 
 validity in good faith the difficulty is Citing Canada So. R. R. Co. v. 
 
 obviated. Chesapeake & O. Ry. v. International Bridge Co., L. R. 8 
 
 Conley, 230 U. S. 513, 57 L. ed. 1597, App. Cas. 723. 
 
 17 [ 257 ] 
 
§ 308 ] Railroad Rate Regulation 
 
 particular transaction the charge is an unreasonable trans- 
 action for the service rendered." What the Privy Council 
 had previously said in regard to bridge tolls was ap- 
 proved. "The principle must be, when reasonableness 
 comes in question, not what profit it may be reasonable for 
 a company to make, but what it is reasonable to charge 
 to the person who is charged." These dicta as will be 
 seen when the cases are examined more closely by one, are 
 by the context confined to that small class of pubhc 
 services which receive no public aid either by way of 
 grant or of privilege; thus confined it should not affect 
 the general law.^^ But, certainly, were it to be held a 
 proper principle for all cases, it would subvert the whole 
 basis of the established law. Those businesses in which 
 there are naturally but few transactions comparatively, 
 would be ruined, while those in which a great number of 
 transactions are carried on would profit enormously. 
 
 § 308. Jurisdiction of the Commission. 
 
 It should be noted that the Commission has disclaimed 
 jurisdiction to deal with the question of the rate of re- 
 turn, which the carriers are getting, as such. It declared 
 in the Rate Advance cases of 1910 that it had no author- 
 ity to say that a railroad ought to earn, either as a matter 
 of right or as a matter of pubUc policy, any given per cent 
 upon its value; but, in discharging its duty to say whether 
 the particular rates which the carriers propose to es- 
 tablish, are just and reasonable, it must determine in a 
 general way what a fair return would be.*' It has, until 
 recently, taken the attitude that, strictly speaking, it 
 has no jurisdiction to say defendants are justified in ad- 
 vancing rates for purpose of obtaining greater net rev- 
 
 " It was held in one proceeding See also to the same effect, In 
 
 that 10% of gross express earnings re Express Rates, 24 I. C G. 
 
 in the express business being profit 380. 
 
 is liberal, because the capital in- " In re Advance in Rates — EMtem 
 
 volved is so small. Kendel v. Adams Case, 20 1. C. C. 243. 
 Express Co., 13 I. C. G. 475. 
 
 [258] 
 
Rate of Return [ § 309 
 
 enues; but in the Five Per Cent Rate cases of 1914 this poHcy 
 has apparently been abandoned by the majority of the 
 Commission, to judge from the language of the minority.^* 
 The fact that net earnings may be large does not of it- 
 self justify the Commission in fixing rates less than are 
 reasonable for service; likewise whether the Commission has 
 power to reduce rates for sole reason that revenues are 
 excessive is not decided.*^ At the same time, in reduc- 
 ing rates, the Commission feels bound to consider whether 
 a contemplated readjustment of rates will result in undue 
 impairment of the revenues of the railroad.'" And it 
 will be much swayed by the contention, if supported by 
 the evidence, that a decrease in rates would be ruinous 
 to the business of the protestants. 
 
 § 309. Status of the companies affected. 
 
 Unreasonable rates cannot be permitted simply be- 
 cause the entire result of company's operations might 
 not be as favorable as would otherwise be proper. '^ The 
 mere fact that the road in question is being operated at 
 a loss, does not justify rates unreasonably high for service 
 performed.'^ It follows that the unfavorable financial condi- 
 tion of the defendant railroad cannot lawfully be remedied 
 by imposing unreasonable rates. ''^ The Commission has 
 taken the attitude that an increase made solely for the 
 purpose of obtaining more revenue cannot be justified.'^ 
 And it has said that the capitalization of a corporation is 
 not a measure of the reasonableness of its rates. '^ And 
 in one opinion, at least, the Commission went so far as 
 
 ** The Five Per Cent Cases. °'' In re Advance on Coal to Lake 
 
 Opinions of Dec. 18, 1914. Ports, 22 1. C. C. R. 604. 
 
 *" Railroad Commissioners of Iowa " Hitchman Coal & Coke Co. v. 
 
 V. I. C. C. R. Co., 20 I. C. C. 181. B. & O. R. R. Co., 16 I. C. C. 
 
 See also city of Spokane v. N. P. Ry., 512. 
 
 19 I. C. C. 162. ^* Demer Son & Co. v. A. T. & 
 
 "Black Mountain C. L. Co. v. N. R. R., 19 I. C. C. 575. 
 
 Southern Ry., 15 I. C. C. 286. '^ Commercial Club of Salt Lake 
 
 " In re Express Rates, 24 I. C. C. City v. A., T. & S. F. Ry., 19 1. C. C. 
 
 380. 218. 
 
 [259] 
 
§ 310 ] Railroad Rate Regulation 
 
 to say that a definite and uniform allotment of fimds from 
 the charge imposed for the movement of each character 
 of traffic, to provide for interest, dividends and surplus is 
 not proper.^* Of course, the fact that all concerned have 
 been prosperous, although a matter to be considered, does 
 not conclusively show that rates are not right." But dur- 
 ing the time it is being operated without assm-ance of profit, 
 a new line would not be required to estabUsh as low a rate 
 as a more firmly established road.^* 
 
 Topic B. Fair Rate of Return 
 
 § 310. Interest upon bonds protected. 
 
 It was generally agreed from the very first that, what- 
 ever might be the right to earn a dividend upon stock, 
 the interest upon the outstanding bonds must be pro- 
 tected. Thus in Chicago and Northwestern Railway v. 
 Dey,*" Mr. Justice Brewer was apparently ready to pro- 
 tect the interest upon outstanding bonds in all contin- 
 gencies, although he left the question of whether any surplus 
 should be left for dividends to the discretion of the legis- 
 lature. But, certainly, as the United States Supreme Court 
 said some years later, bond issues which have no actual 
 values behind them have no protection.*" And if the in- 
 terest in the bonds is fixed unduly high at the outset, it 
 will not be protected against legislation reducing rates, 
 as the California courts hold.*^ Indeed, it has been ques- 
 tioned whether more than the current rate of interest 
 upon borrowings, in an enterprise of similar character, 
 can be secured to bondholders. In the case of Steenerson 
 
 ^ Railroad Commissioners of Iowa ™ Smyth v. Ames, 169 U. S. 466, 
 
 V. I. C. R. R., 20 I. C. C. 181. 42 L. ed. 819, 18 Sup. Ct. 418. See 
 
 "Railroad Commissioners of also: Spring Valley Waterworks v. 
 
 Florida v. S. A. L. Ry., 16 I. C. C. 1. San Francisco, 124 Fed. 574. 
 
 '* Collingwood Brick Co. v. P. M. *i Spring Valley Waterworks v. 
 
 R. R., 26 I. C. C. 572. San Francisco, 124 Fed. 574. And 
 
 " 35 Fed. 866. See also Brymer v. compare Redlands L. & C. D. 
 
 Butler Water Co., 179 Pa. St. 231, Water Co. v. Redlands, 121 Cal. 
 
 36 Atl. 249, 36 L. R. A. 260. 365, 53 Pac. 843. 
 
 [260] 
 
Rate of Return [ § 311 
 
 V. Great Northern Railway Company/- the court an- 
 swered the question in the negative, Mr. Justice Canty 
 saying: "If a railway company has made what turns 
 out to be a bad bargain by issuing its bonds for six 
 per cent or seven per cent interest per annum that 
 , should be its misfortune and not the misfortune of the 
 public." *' 
 
 § 311. Rates at which governments can borrow no criterion. 
 
 The Commission has been accustomed to repeat with 
 approval the language of the coxirts to the effect that com- 
 pensation implies payment of cost of service, interest on 
 bonds, and then some dividend. The rates at which gov- 
 ernmental bodies can borrow is obviously no criterion in 
 itself. The standard is what the current rate of return 
 is on securities of private companies conducting other 
 businesses of similar character. This has been pointed 
 out by the Commission, very clearly:" "In many countries 
 the conduct of transportation by railways is undertaken 
 by the government at pubUc expense. The government 
 of the United States could probably borrow what money 
 would be needed to buy or build the railways of this coun- 
 try at from 2 1-2 to 3 per cent. Ought the public to be 
 taxed for the service rendered beyond this rate of interest? 
 Plainly, no such test ought to be apphed. This govern- 
 ment does not undertake that duty, nor does it guarantee 
 any rate of return upon the money invested. It would 
 be clearly unjust to impose upon the private capital which 
 performs this quasi-govemment function all the hazard 
 without allowing it some participation in whatever profit 
 may accrue." ** 
 
 «2 69 Minn. 353, 72 N. W. 713. Co. v. City of Norwich, 76 Conn. 
 
 But see Pennsylvania R. R. Co. v. 565, 57 Atl. 746. 
 
 Philadelphia County, 220 Pa. St. " Morgan Grain Co. v. A. C. L. R. 
 
 100, 68 Atl. 676, 15 L. R. A. (N. S.) R., 19 I. C. C. 460. 
 
 108. '^'Re Advance Freight Rates, 9 
 
 "See contra, Norwich Gas & E. I. C. C. Rep. 382. 
 
 [261] 
 
§§ 312, 313 ] Railroad Rate Regulation 
 
 § 312. Prevailing rate of interest allowed. 
 
 The prevailing rate of interest upon bonds of like secu- 
 rity is to be allowed to bondholders; and the court will 
 inform itself as to that. Thus when the point was raised 
 in Milwaukee Electric Railway Company v. Milwaukee ^* 
 Judge Seaman in protecting the bondholders and others 
 against undue reduction of fares by city ordinance, said: 
 "The interest rate fixed in the bonds issued by the company 
 is 5 per cent. The rate which prevails in this market, 
 as shown by the uncontroverted testimony, is 6 per cent 
 for real estate mortgages and like securities. If the 
 $5,000,000 basis be adopted, surely a better rate must be 
 afforded for the risks of investment than can be obtained 
 on securities of this class, in which there is no risk. Upon 
 the basis of $7,000,000, which is more logical and just, 
 the 5 per cent named in the bonds is clearly not excessive, 
 and should be accepted by a court of equity as the mini- 
 mum of allowance; and, even upon the defendant's partial 
 showing, the return would be less than one-quarter per 
 cent above that, with the large margin for depreciation 
 left out of account." ""^ 
 
 § 313. What are reasonable dividends? 
 
 Within the last ten years, as has been seen, the general 
 principle has become established that there must be left 
 to those who conduct a pubUc enterprise an adequate 
 return on their investment as a whole. This newer view 
 was well put in one sentence in New Memphis Gas Light 
 Company v. New Memphis,^* thus: "The company has a 
 right to such gross revenue from the sale of gas as will 
 enable it to pay all legitimate operating expenses, pay 
 interest on valid fixed charges, so far as bonds or securities 
 represent an expenditure actually made in good faith, and 
 also to pay a reasonable dividend on stock, so far as this 
 
 «» 87 Fed. 577. Joaquin C. & I. Co., 192 U. S. 201, 
 
 " The prevailing rate of interest is 48 L. ed. 406, 24 Sup. Ct. 241. 
 
 the test; see Stanislaus Co. v. San ^' 72 Fed. 952. 
 [262] 
 
Rate of Return [ § 314 
 
 represents an actual investment in the enterprise." What 
 then is reasonable dividend? Dividends upon stock at 
 least where there are outstanding bonds ought to be per- 
 mitted to be somewhat larger than the interest upon the 
 bonds. Since the bonds have a prior hen upon the assets, 
 the risk to the holders of them is much less than to the 
 holders of stock, and the stockholders should therefore 
 have a higher rate of return because of the risk of passing 
 of dividends in bad times or of foreclosure in case of com- 
 plete failure. This question of reasonable dividend de- 
 pends chiefly upon the current rate of return.*' 
 
 § 314. Current rate of return. 
 
 What constitutes a fair rate of return must obviously be 
 determined by some standard. The current rate of return 
 upon enterprises of a similar character is submitted to be 
 the true basis of fixing the percentage. This is the basis 
 insisted upon in testing the evidence in the more discrimi- 
 nating cases which discuss the problem carefully. Thus 
 in Spring Valley Waterworks v. San Francisco,™ where an 
 ordinance passed by a board of supervisors would reduce 
 the annual net earnings below 4.40 per cent on the value 
 of the property necessarily employed in the service, or 
 3.30 per cent on its stock after deducting proper charges, 
 its enforcement was enjoined as fixing a rate so low as to 
 be a taking of private property for public use without just 
 compensation, Judge Merrow said: "The next question 
 to be considered is, what wUl be a fair and reasonable 
 income for the complainant to receive as a just compensa- 
 tion for the public use of its property? A number of 
 bankers have testified as to the usual and customary net 
 income from investments of $10,000,000 and upwards of 
 capital in corporations of a quasi-public nature, where 
 judiciously managed. The affidavits of four bankers of 
 
 8' Among the many cases to this 100, 68 Atl. 676, 15 L. R. A. (N. S.) 
 effect, see Pennsylvania R. R. Co. v. 108. 
 Philadelphia County, 220 Pa. St. " 124 Fed. 574. 
 
 f2631 
 
§ 315 ] Railroad Rate Regulation 
 
 long experience and well-known character and standing 
 fix the rate at not less than 7 per cent per annum, and 
 aver that a net income of less than 7 per cent per annum 
 from large investments would not be a reasonable or fair 
 return. The affidavits of five bankers of like standing and 
 character and similar experience fix the rate at not less 
 than 6^ per cent per anniun, and aver that a net income 
 of less than 6 per cent per annum for large investments 
 would not be a reasonable or fair return. The affidavit 
 of one banker of large wealth and experience fixes the rate 
 of net income from such investments at between 4 and 5 
 per cent per annimi. The weight of evidence is clearly 
 in favor of a rate of not less than 6 per cent per annum." " 
 
 § 316. Fair rate of return. 
 
 According to present ideas, therefore, a fair rate of 
 return must be left in the generality of cases; but if an 
 adequate return is left, the legislation is of course con- 
 stitutional, although it be a reduction from the rates 
 formerly in force. In Cedar Rapids Company v. Cedar 
 Rapids ^^ Mr. Justice Weaver in dismissing a complaint, 
 to the effect that a reduction in rates of a water com- 
 pany made by pubhc authority was unconstitutional be- 
 cause confiscatory, said: "Just the extent which this re- 
 duction will aflfect the company's earnings it is impossible 
 to prove or predict with certainty, but we see no reason 
 to believe that the total revenue, after making all due 
 allowance for discounts, will be reduced below $50,000. 
 The operating expenses charged for the year preceding 
 the trial (being largely in excess of the average in its ex- 
 perience) were 123,000, or, including taxes, $28,000. On 
 this basis the net earnings are 5 1-2 per cent on a valua- 
 tion of $400,000, or 4 2-5 per cent on a valuation of 
 $500,000, or 6 1-2 per cent on the total amount of capital 
 
 " Of the cases cited, see especially U. S. 439, 47 L. ed. 892, 23 Sup. Ct. 
 San Diego L. & T. Co. v. Jasper, 189 571. 
 
 "118 Iowa, 234, 91 N. W. 1081. 
 [264] 
 
Rate of Return [ § 31G 
 
 stock and bonds. Stated otherwise, this will enable the 
 company to pay its interest charge of $7,500, make a 
 dividend of 5 per cent on its capital stock (including stock 
 issued as dividends), and leave a margin of over $3,000 for 
 contingencies. This estimate of earnings may be very 
 materially reduced, or the estimate of the value of the 
 plant be very materially increased, before the court will 
 be justified in saying that the plaintiff s property is being 
 exposed to destruction or confiscation by an unprofitable 
 schedule of rates." ^^ 
 
 § 316. Current rate the standard. 
 
 It will be seen, therefore, that the current rate of return 
 to capital is accepted as the true basis of fixing the 
 percentage. Some illustrations of the way the courts 
 treat the matter nowadays will illustrate this further. 
 In Brymer v. Butler Water Company ^* the court said 
 in reviewing the schedule of a water company, that it is 
 entitled to a rate of return, if the property will earn it, 
 not less than the legal rate of interest; a return of some- 
 thing over six per cent was held not unreasonable there- 
 fore. Furthermore this com"t, in the still later case of the 
 Pennsylvania Railroad Company v. Philadelphia County,^'^ 
 frankly said that it regarded its previous suggestion of 
 six per cent as simply fixing a minimum return, not the 
 maximum one at all. Men do not put their money into 
 business enterprises for small interest, as this court well 
 says. In a recent federal case ^^ the court thought that 
 the owners of a railroad should have a profit above the 
 necessary expense of conducting such business equal to 
 eight per cent per annum upon the value of the property 
 so employed, that being the legal rate of interest in Ala- 
 bama on loans of money, and the current rate of profit 
 
 " See accord Brymer v. Butler " 220 Pa. St. 100, 68 Atl. 676, 15 
 Water Co., 179 Pa. St. 231, 36 Atl. L. R. A. (N. S.) 108. 
 249, 36 L. R. A. 260. ™ Central R. Co. v. Railroad Com- 
 
 " 179 Pa. St. 231, 36 Atl. 249. mission, 161 Fed. 92.5. 
 
 [265] 
 
§317] Railroad Rate Regulation 
 
 upon property used in business enterprises similar to rail- 
 roads. And upon the same general principle, another 
 federal judge held recently that a local Louisiana tele- 
 phone company which was making seven per cent ought 
 not to be disturbed." With these cases in mind, one is 
 justified in saying that the current rate of return to capital 
 invested '* in the community served may confidently be 
 expected.''' 
 
 § 317. Reasonable profits sufficiently safe. 
 
 In any normal case, the proprietor of a pubUc service 
 may therefore expect a dividend equal to the current 
 rate of return in enterprises of similar character. It should 
 be borne in mind, however, that pubHc services have in 
 general more assured permanence, and less danger of 
 ruinous competition, than most private businesses. How- 
 ever, opinions must necessarily differ as to what would be 
 a reasonable profit in a given case. Most courts, when 
 asked to declare the action of some legislative body in 
 reducing certain rates to be virtual confiscation, will take 
 the attitude that, unless the reduction worked is really 
 indefensible, the legislative rate will not be disturbed.*" 
 Thus in a recent Iowa case *^ the court did not consider an 
 ordinance confiscatory which so reduced rates as to leave 
 the company about five per cent on the value of the prop- 
 erty which resulted in this case in over six per cent on 
 its outstanding securities. A recent Florida case,*'' where 
 it was held that the court could not say that even three 
 and one-half per cent upon the cost of a system was con- 
 fiscatory, is to be explained by the fact that the present 
 value might be one-half of the actual cost. Generally 
 
 " Cumberland Tel. & Tel. Co. v. 212 U. S. 19, 53 L. ed. 382, 29 Sup. 
 
 R. R. Commission, 156 Fed. 823. Ct. 192. 
 
 '8 Missouri R. & R. T. Co. v. Love, " Cedar Rapids Water Co. v. 
 
 177 Fed. 493. Cedar Rapids, 118 Iowa, 234, 91 
 
 "Louisville & N. Ry. Co. v. N.W. 1081. 
 
 Brown, 123 Fed. 946. ^^ State ex rel. v. Seaboard A. L. 
 
 ™ Willcox V. Consolidated Gas Co., R. R. Co., 48 Fla. 129, 37 So. 314. 
 
 [266] 
 
Rate of Return [ § 318 
 
 speaking proof that the net earnings which will be left 
 by the proposed reduction will leave an absurdly low per- 
 centage, as in one recent case *^ two and one-third per cent, 
 is enough to condemn the legislative rate. In one of the 
 latest federal cases *^ it is said succinctly that the authori- 
 ties practically establish a six per cent minimum. This 
 is based upon the doctrine in Cotting v. Kansas City 
 Stock Yards Company; *^ the court said in effect that legis- 
 lation cutting the return of the company below six per 
 cent was unconstitutional. Confined by the courts to this 
 extent, regulation by commissions should have no terror 
 to the investor. Bonds and stocks thus protected will not 
 be brought below par by governmental action; indeed, they 
 will in certain instances still seU at a premimn. 
 
 § 318. Rate of return upon investments in general. 
 
 Whatever standards there are in this matter are plainly 
 external, and the court will take into account the rate of 
 return upon investments prevailing in business generally. 
 In a later opinion *^ the Commissions laid down this 
 policy, "It may be admitted that it is for the interest of 
 the general public, as well as the railroads, that their 
 funded debt should bear as low a rate of interest as possible. 
 A very considerable part of the saving to railway com- 
 panies in recent years has come from a reduction in the 
 rate of interest paid. In 1895 the average rate paid by all 
 the railroads of this country was 4.69 per cent; in 1909 
 this figure had been reduced to 3.90 per cent, and the 
 saving computed upon the indebtedness of 1909 represented 
 by this decrease in the rate of interest would have amounted 
 to $77,000,000. Interest upon its funded debt is a fixed 
 charge in the nature of an operating expense, and, in pro- 
 portion as this charge can be reduced, benefit should 
 
 «' Coal & Coke Co. v. Conley, 67 »* 183 U. S. 79, 46 L. ed. 92, 22 
 
 W. Va. 129, 67 S. E. 613. Sup. Ct. 30. 
 
 " St. Louis & S. F. Ry. v. Hadley, ^ Advance in Rates, — Eastern 
 
 168 Fed. 317. Case, 20 1. C. C. 243, passim. 
 
 [267] 
 
§ 319 ] Railroad Rate Regulation 
 
 accrue both to the railway company and its patrons. 
 It must must be conceded, therefore, that railway rates 
 and the treatment of our railways should be such as will 
 make the long-time railway bond, which bears a proper 
 relation to the value of the security, a favorite with the in- 
 vesting public." '^ 
 
 § 319. Public service has its peculiar risks. 
 
 Just what rate of interest a pubhc service company 
 should be allowed to pay upon its securities is difficult to 
 determine by rule, since the circumstances will be different 
 in different cases. Whatever it is obliged to pay to sell 
 its bonds at par, if the negotiations for the issue are con- 
 ducted with good faith, would be the test. And that would 
 depend upon the stability of the business to the mind of 
 the lenders. Public service bonds are sold on the exchanges 
 from as low as a three per cent basis to as high as a sixteen 
 per cent basis, and doubtless will always continue to do 
 so. Enterprise and industrial progress would be at a stand- 
 still if the rate was kept down to that on government bonds.^ 
 It must be remembered that those who embark in public 
 services place their property to a great extent in the hands 
 of the public. They must be always ready to supply the 
 public demand, and must take the risk of any falling off 
 in demand. They cannot convert their property to any 
 other use, however unprofitable the public use may have 
 become.^^ They must run in good times and bad with 
 substantially the same expense. If they lose in bad times, 
 they cannot recoup themselves by extraordinary profits 
 
 " Where particular rates on a the reasonable profit point. Board of 
 
 particular commodity between par- Trade of Winston-Salem v. N. & W. 
 
 ticular points are challenged, the Ry., 16 I. C. C. 12. 
 
 question of net earnings on the ** This is in part paraphrased from 
 
 particular lines involved is not im- WiUces-Barre v. Spring Brook Water 
 
 portant, unless it be shown that the Co., 4 Lack. Leg. News, 367. 
 
 margin of profit is so small on the *' Long Branch Commission v. 
 
 system's business, as a whole, that a Tintern Manor Water Co., 70 N. J. 
 
 reduction in the particular rates Eq. 71, 62 Atl. 474. 
 would reduce the whole income below 
 
 [ 268 ] 
 
Rate of Return [ § 320 
 
 in good times. These risks exist to some extent in all com- 
 munities, but they are greater in some than in others. 
 
 Topic C. Policies Respecting Return Allowed 
 
 § 320. General policy for allowing a fair return. 
 
 According to modern views upon the constitutional 
 guaranties, an adequate return upon the true value of the 
 property devoted to the public use, by those who conduct 
 a pubUc service, ought in all normal cases to be left; other- 
 wise, it is conceded, they are in effect deprived of their 
 property without due process of law, if their rates are so 
 reduced by public authority as to leave no such adequate 
 return. "The ordinary considerations of justice require 
 that the money so invested by invitation of the Govern- 
 ment should be allowed a fair return. This does not mean 
 that we should permit rates which will guarantee all rail- 
 road investment, nor which will guarantee any railroad 
 investment at all times, but we should allow rates which 
 will yield to this capital as large a return as it could have 
 obtained from other investment of the same grade. If 
 rates formerly in effect have become insufficient, then 
 higher rates should be permitted." '" This is based upon 
 sound pubUc policy; it ought always be plain that those 
 who invest their funds in some pubhc employment are 
 going to get a fair per cent upon their investment; because, 
 unless they are assured of this, they will employ their 
 money elsewhere; and many enterprises necessary for the 
 pubhc convenience will not be undertaken, nor will ex- 
 isting plants be extended. It is, then, not only due con- 
 sideration for the rights of others, who have already in- 
 vested their money in pubUc service companies, but also 
 an enlightened selfishness, with a view to the future, which 
 dictates the policy that a reasonable return upon the value 
 of the property used in the public service shall be held 
 to be protected by the constitution. "If the present system 
 
 ™ Advance in Rates, Eastern Case, 20 I. C. C. 243, passim. 
 
 [269] 
 
§§ 321, 322 ] Railroad Rate Regulation 
 
 of private ownership of railways is to be continued, suffi- 
 cient inducement must be extended to private investors." '^ 
 
 § 321. No right to raise rates in prosperous times. 
 
 In prosperous times business all over the country in- 
 creases, and consequently the amount of traffic carried 
 by the railways increases. Since in the railroad business 
 the law of increasing returns because of decreasing costs 
 has surprising scope, this increase of traffic will produce 
 greater profits at the rates formerly established. To a 
 certain extent, the carrier may enjoy these increased profits 
 in prosperous times, without the obligation to reduce rates, 
 but the carrier may not increase rates, because in pros- 
 perous times the shippers can afford to pay more. This 
 contention was well handled by the Commission in one 
 c^se,*^ thus: "The test of the reasonableness of a rate is 
 not the amount of the profit in the business of a shipper 
 or manufacturer, but whether the rate yields a reasonable 
 compensation for the services rendered. If the prosperity 
 of the manufacturer is to have a controlling influence, this 
 would justify a higher rate on the traffic of the prosperous 
 manufacturer than on that of one less prosperous. The 
 right to participate in the prosperity of a shipper by rais- 
 ing rates is simply a license to the carrier to appropriate 
 that prosperity, or in other words, to transfer the shipper's 
 legitimate profit in his business from the shipper to the 
 carrier." '^ 
 
 § 322. Commercial conditions affecting dividends. 
 
 To a certain extent, the dividends which a railroad com- 
 pany can earn are dependent upon commercial conditions 
 generally. When crops fail or when commercial crises 
 
 "' Spokane V. N. P. Ry., 15 I. C. C. said: "The carriers necessarily and 
 
 376. justly participate in the increased 
 
 '^Central Yellow Pine Asso. v. prosperity of their patrons in the 
 
 Illinois C. R. R., 10 I. C. C. Rep. 505. resultant enlargement of their own 
 
 "2 In Tift V. Southern Ry., 10 business." 
 I. C. C. Rep. 548, the Commission 
 
 [27-0] 
 
Rate of Return [ § 323 
 
 come, the general business of the common carrier inevi- 
 tably falls off. Even if it should raise its rates very con- 
 siderably, it would be difficult for it to maintain its reg- 
 ular dividends; and it is doubtful whether it ought to do 
 so, and increase thereby the general distress. This may 
 be pressed too far, and perhaps the point is overstated 
 by those who insist that a railroad cannot say: When 
 times are prosperous and dividends large, we win, when 
 times are hard and business dull, the pubUc must lose.^^ 
 The business of the carrier cannot but be affected by the 
 state of commerce in the country at large. It is, perhaps, 
 true that, with good times and rising prices, the value of 
 the property of a public service company increases with 
 other values; and consequently it may justify higher earn- 
 ings. And, if the carrier must suffer to a certain extent 
 with others in bad times, he ought be allowed to recoup 
 himself to some extent in prosperous times. Promoters 
 and proprietors of roac^s have looked to the futiu-e, as 
 they had a right to do, and as they were induced to do by 
 the solicitation of the viarious communities through which 
 they run, and by various encouragements offered by the 
 State.'^ 
 
 § 323. More than current rates of interest not secured. 
 
 It is a disputed question whether more than the current 
 rate of interest upon enterprises of similar character can 
 be secured to bondholders. In the case of Steenerson v. 
 Great Northern Railway Company *^ the court answered 
 the question in the negative, as this further extract from 
 
 »< See Mathews v. Board of Corp. Houston & T. C. Ry., 90 Fed. 
 
 Comm., 106 Fed. 7. 683. 
 
 As the rates of defendants ought Because the revenues of a carrier 
 
 not to be fixed altogether with re- are high during a period of general 
 
 spect to the recent years of prosperity, prosperity, rates should not be 
 
 so neither should they be established reduced; the periods when it operated 
 
 upon the basis of this year of adverse almost at a loss should be considerecj. 
 
 conditions. City of Spokane v. Florida Fruit & Vegetable Ass'n v. 
 
 N. P. Ry., 15 1. C. C. 376. A. C. L. R. R., 17 I. C. C. 552. 
 
 »6See Metropolitan T. Co. v. « 69 Minn. 353, 72 N. W. 713. 
 
 [271] 
 
§ 324 ] Railroad Rate Regulation 
 
 the radical opinion of Mr. Justice Canty will show: "A 
 railroad company is not entitled to a greater income during 
 the acute stages of a panic because rates of interest are 
 temporarily higher during such times.. Permanent invest- 
 ments do not, as a general rule, bring higher rates of in- 
 come during such times. It would rather seem from these 
 quotations that 4 1-2 per cent per annum was in 1894 a 
 very reasonable rate of interest on such railroad bonds, 
 and that 6 and 7 per cent per annum was grossly exces- 
 sive and unreasonable. If the railway company has made 
 what turns out to be a bad bargain by issuing its bonds 
 for 6 and 7 per cent interest per aimum, that should be 
 its misfortune, and not the misfortune of the pubUc. As 
 before stated, neither the State nor the pubUc has either 
 directly or indirectly guaranteed that rates of interest 
 and rates of income would not fall, to the detriment of the 
 railway company." *^ 
 
 § 324. How interest payable is considered. 
 
 It is very common, and not unnatiu-al, to speak of inter- 
 est payable upon bonded indebtedness as fixed charge, 
 and therefore one of the items in making up the total of 
 annual expenditures. Thus Mr. Justice Brewer speaks of 
 it in the well-known case of Chicago and Northwestern 
 Railway Company v. Dey:^^ "The fixed charges are the 
 interest on the bonds. This must be paid, for otherwise 
 foreclosure would follow, and the interest of the mortgagor 
 swept out of existence. The property of the stockholders 
 cannot be destroyed any more than the property of the 
 bondholders. Each has a fixed and vested interest, which 
 cannot be taken away. I know that often the stockholder 
 and the bondholder are regarded and spoken of as having 
 but a single interest; but the law recognizes a clear dis- 
 
 " When bond issues do not repre- ™ 35 Fed. 866, 1 L. R. A. 744. 
 
 .sent actual investment in the enter- CSted with approval in Southern 
 
 prise, interest upon such bonds is not Pacific Co. v. Railroad Coimnrs., 
 
 protected. Smyth v. Ames, 169 U. 78 Fed. 236. 
 S. 466, 42 L. ed. 819, 18 Sup. Ct. 418. 
 
 [272] 
 
Rate of Return [ § 325 
 
 tinction. A mortgage on a railroad creates the same rights 
 in mortgagor and mortgagee as a mortgage on my home- 
 stead. The legislature cannot destroy my property in 
 my homestead simply because it is mortgaged, neither can 
 it destroy the stockholders' property because the railroad 
 is mortgaged. It cannot interfere with a contract between 
 the company mortgagor and the mortgagee, or reduce 
 the stipulated rate of interest; and so, xmless that stipu- 
 lated interest is paid, foreclosure of course follows, and the 
 mortgagors' rights, the property of the stockholders, are 
 swept away." But as a matter of fact, the real situation 
 is that a public service company must produce a certain 
 amoimt of net income, discovered by deducting the gross 
 annual expenses from the gross income; and that net in- 
 come must be enough to pay all security holders their rate 
 of return, — to the bondholder his stipulated interest, to 
 the stockholder his fair dividend. And according to modern 
 constitutional law, both have the same protection, and 
 both are subject to the same mischances.^' 
 
 § 326. Profits divided not operating expense. 
 
 Profits must be paid, if at all, out of net income, and 
 are in no sense operating expenses. "It seems to us very 
 clear that in estimating the operating expenses of a rail- 
 way stock dividends cannot be included. They are no 
 part of the cost of operation. Nor should they be in- 
 cluded, under any of the authorities, when ascertaining 
 the reasonableness of a rate tariff. This is in no manner 
 denying the defendant's right to earn sufficient to pay 
 its operating expenses, interest upon its bona fide bonded 
 indebtedness, and a proper dividend upon its lawfully 
 issued stock shares or value of the investment." ^ Upon 
 appeal to the Supreme Court of the United States this 
 language of the Minnesota court was affirmed: "In prov- 
 
 " Smyth V. Ames, 169 U. S. 466, 'State ex. rel. v. Minneapolis & 
 
 42 L. ed. 819, 18 Sup. Ct. 418. St. L. R. R. Co., 80 Minn. 191, 83 
 
 See Steenerson v. Gt. Northern N. W. 60. 
 Ry., 69 Minn. 353, 72 N. W. 713. 
 
 18 [ 273 ] 
 
§ 326 ] Railroad Rate Regulation 
 
 ing that the cost of transporting all merchandise exceeded 
 the rate fixed by the commission on this coal, the interest 
 upon bonds and dividends upon stock were included in 
 operating expenses. The propriety of the first is at least 
 doubtful, the impropriety of the second is plain. We do 
 not intend, however, to intimate that the road is not en- 
 titled to something more than operating expenses." ^ 
 
 § 326. Consolidation of interest and dividends. 
 
 In last analysis it will be agreed the company serving 
 the public is entitled to a fair return upon its proper 
 capital, otherwise, as it is held, the owners of that prop- 
 erty are virtually being deprived of it without due process 
 of law. This would seem to mean that they are entitled 
 to what rate of profit is considered fair to all concerned, 
 having in mind the character of the business upon that 
 amount of the property devoted to public use that is rep- 
 resented by a valuation which is thought proper under 
 all the circumstances. That is, upon property valued at, 
 say, $10,000,000, the owners are entitled to earn a profit, 
 if they can get it, of say, $800,000 per annum. If it is a 
 corporation which has issued stock to the whole amount, 
 it could properly pay 8 per cent dividends. But suppose 
 it has outstanding $5,000,000, 6 per cent bonds, can it not 
 pay 10 per cent dividends on its remaining $5,000,000, 
 stock? It is submitted that it would not seem to be any 
 concern of the State how it distributes the $800,000. 
 At all events, the Commission has pointed out that in 
 determining what will be reasonable rates for the future, 
 it may properly consider that, under the rates in effect, 
 a large surplus has been accumulated in the past; but 
 it should not fix rates imduly low for the purpose of dis- 
 tributing that surplus to the public.^ An advance is not 
 necessarily unreasonable, even though for years a carrier 
 
 2 Minneapolis & S. L. R. R. Co. ' Spokane v. N. R, Ry., 15 I. C. C. 
 
 V. Minnesota, 186 U. S. 257, 46 L. 376. 
 ed. 1151, 22 Sup. Ct. 900. 
 
 [274] 
 
Rate of Return [ §§ 327, 328 
 
 has regularly paid interest on the total bonded debt, and 
 recently paid dividends on its stock. ^ 
 
 § 327. Reductions ruinous only to certain companies. 
 
 A difficult question arises where, although there has 
 been a drastic reduction of rates, certain companies are in 
 so strong a position that their earnings are not cut below 
 the minimum of fair profit, while with other companies 
 the reductions will not only wipe out all profits whatso- 
 ever, but compel them to conduct their business at a loss. 
 Whenever this is brought to the attention of the court, 
 their attitude must be that they are dealing only with 
 the case in hand, their sole function being to determine in 
 the particular case before them whether this legislation 
 will virtually confiscate the business property of this 
 complainant/ The consequence follows inevitably that, 
 while the rates imposed may be found unreasonable, and 
 therefore not enforceable as to some of the roads in the 
 State, this does not necessarily render them unreasonable 
 and unenforceable as to other roads doing business in the 
 State.* In considering the reasonableness of a whole 
 schedule of rates the Commission may well at the outset 
 make inquiry as to the general financial condition of the 
 defendant railroad.^ But it is almost axiomatic that 
 rates cannot be made so as to give high earnings to poorly 
 placed and indifferently operated roads without making 
 the charges extortionate.* 
 
 § 328. Creating a fund for pajrment of uniform dividends. 
 A further suggestion has been made, which deserves 
 consideration, that a railroad company, or any public 
 service company, ought to be allowed to set aside in pros- 
 
 ' Cady Lumber Co. v. M. P. Ry., " St. Louis & S. F. R. R. v. Had- 
 
 19 I. C. C. 460. ley, 168 Fed. 317. 
 
 ' Pennsylvania R. R. Co. v. ' R. R. Commission of Nevada v. 
 
 Philadelphia County, 220 Pa. St. N. C. 0. Ry., 22 I. C. C. 205. 
 
 100, 68 Atl. 676, 15 L. R. A. (N. S.) * Advances on Rates, Western 
 
 108 Case, 20 1. C. C. 307. 
 
 [2751 
 
§ 329 ] Railroad Rate Regulation 
 
 perous times a reasonable amount as a surplus out of which 
 it may maintain its dividend in less fortunate years. It 
 is the practice of the strongest and best managed rail- 
 roads and public service companies so to arrange matters 
 by this process that they may always maintain their 
 uniform dividend. This practice has the sanction of the 
 Commission,^ as the following will show: "But it may be 
 urged that after paying its fixed charges, taxes and divi- 
 dend out of its net income for the year 1902, it had left 
 but a comparatively small amount. That year was one of 
 prosperity, and it can hardly be expected that conditions 
 will continue without interruption as favorable. Ought 
 not a railway to be allowed to accumulate, in some form, 
 a surplus during fat years which may tide over subse- 
 quent lean years? To this we would unhesitatingly answer 
 in the affirmative. In times like the present a railroad 
 company should be allowed to earn something more than 
 a merely fair return upon the investment; but we also 
 think that it clearly appears that the Michigan Central is 
 doing this." i" 
 
 § 329. Greater profit for better service. 
 
 Reference might here be made to some recent theories, 
 already resulting in some legislation dealing with the rate 
 of return. The best of these proposals at present is for a 
 shding scale, the rate of dividend being permitted to in- 
 crease as the price of the service to the pubHc decreases. 
 Some method of profit sharing, with increased returns 
 for the corporations and better service for the communities, 
 may be thought out which will spur the company not only 
 to better service, but to wider extensions, not only to 
 larger dividends, but to better maintenance. As the 
 Commission has pointed out, a standard of rates must be 
 so high that any needed carrier which serves the public 
 
 'Re Advances in Freight Rates, has been improperly accumulated. 
 
 9 I. C. C. Rep. 382. Spokane v. N. P. Ry., 15 I. C. C. 
 
 '" It will not, therefore, be assumed 376. 
 that when a surplus is found it 
 
 [276] 
 
Rate of Return [ §§ 330, 331 
 
 with honesty may live; yet rates should still be so much 
 below the possible maximmn as to giye high and excep- 
 tional reward to especially capable management." This 
 amounts to saying that it is reaUzed that a standard living 
 wage should be established for the average line, leaving 
 the better road to get more, while the worse may get less.'' 
 
 Topic D. Character of the Enterprise 
 
 § 330. Larger returns in risky enterprises. 
 
 It follows from what has just been said that in a risky 
 enterprise a large return may be demanded. The principle 
 that as large a return is permissible as is obtained in 
 businesses of similar character, covers the case. And the 
 policy to induce people to imdertake such services for the 
 benefit of the public, requires a larger return for a more 
 risky enterprise." "'Reasonable' is a relative term, and 
 what is reasonable depends upon many varying circum- 
 stances. An equivalent to the prevailing rate of interest 
 might be a reasonable return, and it might not. It might 
 be too high or it might be too low. It might be reason- 
 able, owing to peculiar hazards or difficulties in one place 
 to receive greater returns there than it would in another 
 upon the same investment." " 
 
 § 331. Hazards of the business considered. 
 
 The hazards of the business are therefore to be con- 
 sidered in determining what is a reasonable rate of return 
 in the particular enterprise in question. An excellent 
 example of this problem is to be found in the case of 
 Canada Southern Railway v. International Bridge Com- 
 pany.'^ It was shown in that case that the bridge com- 
 
 " Advances in Rates, Western " The character of the enterprise 
 
 Case, 20 1. C. C. 307. as a factor in determining the rate of 
 
 " See Hooker v. Interstate Com- return is mentioned in Cotting v. 
 
 merce Commission, 188 Fed. 342. Kansas City S. Y. Co., 183 U. S. 
 
 "The quotation is from Bruns- 79, 46 L. ed. 92, 22 Sup. Ct. 30. 
 
 wick & T. W. Dist. v. Maine Water " L. R. 8 App. Cas. 723. 
 Co., 99 Me. 371, 59 Atl. 537. 
 
 [277] 
 
§ 332 ] Railroad Rate Regulation 
 
 pany at its established charges was earning something Uke 
 fifteen per cent upon its investment. The opinion of 
 Lord Chancellor Selborne alluded to the peculiar risks 
 of the enterprise rather by way of dictum than as the 
 basis of his decision. He said, on this point: "You can- 
 not ask a court to say that the persons who have pro- 
 jected such an undertaking as this, who have encountered 
 all the original risks of executing it, who are still subject to 
 the risks which from natural and other causes every such 
 undertaking is subject to, and who may possibly, as in 
 the case alluded to by the learned judge in the court 
 below, the case of the Tay Bridge, have the whole thing 
 swept away in a moment, are to be regarded as making 
 unreasonable charges, not because it is otherwise than fair 
 for the railway company using the bridge to pay those 
 charges, but because the bridge company gets a dividend 
 which is alleged to amount, at the utmost, to fifteen per 
 cent. Their Lordships can hardly characterize that argu- 
 ment as anything less than preposterous." " 
 
 § 332. Whether uniform return upon all property. 
 
 It is suggested in the case of Steenerson v. Great North- 
 ern Railway Company ^^ that a difference is to be made 
 in the rate of return to be allowed upon different kinds 
 of property, in the particular case a lower rate upon the 
 real estate constituting the terminals of the company. 
 This can hardly be. All the property employed in the 
 enterprise should be taken together and a uniform rate 
 of return allowed upon it all by the general principles of 
 public service law. However, as the point is a novel one, 
 the opinion of Mr. Justice Canty is quoted. He said: 
 "Let us now consider what in these times is a reasonable 
 income on $14,000,000, invested in these terminals, and 
 
 '' To the same effect is Troutman of the notorious hazards of the busi- 
 
 V. Smith, 105 Ky. 231, 48 S. W. ness. 
 
 1084, allowing a ferryman a large "69 Minn. 353, 72 N. W. 713. 
 
 profit on the capital invested because 
 
 [278] 
 
Rate of Return [ § 333 
 
 $30,000,000, invested in the rest of the road. The great 
 value of the real estate covered by these terminals is given 
 to it by anticipating the future. Very little of this real 
 estate is in or near to the business center of either city. 
 Most of it is outlying city property and suburban property. 
 It is safe to say that other real estate similarly situated, 
 in the same portions of St. Paul and Minneapolis, does 
 not, on an average, yield an income of 1 per cent per an- 
 nmn above the taxes on the price of valuation at which 
 it is held; and there is, as a general rule, no use to which 
 such property can be put that will cause it to yield any 
 greater income. Such real estate is valued, not on account 
 of its present power to produce an annual income, but 
 because it is believed that it will be still more valuable 
 in the future. The owner of such property cannot expect 
 to eat his loaf and still have it. He cannot expect that 
 the property will pay a full-sized annual dividend, and 
 at the same time double or treble in value every 10 or 20 
 years. He expects his dividends to accumulate in the form 
 of increase in value." It may be that there is justification 
 in disposing of this case in the way in which Mr. Justice 
 Canty does; for if these great tracts of land are being held 
 at inflated valuation full return upon that valuation ought 
 not to be expected. ^^ But, of course, if this policy is 
 adopted there should not be any complaint, if later the 
 company claims the unearned increment, which represents 
 their foregone profit. 
 
 § 333. Rate of interest dependent upon safety. 
 
 Just what rate of interest a public service company 
 should be allowed to pay upon its bonded indebtedness it 
 is difficult to determine by rule, since the circumstances 
 will be different in different cases. Whatever it is obUged 
 
 " In a few cases the point has been upon the same basis. See Wilkes- 
 
 raised that all of the property be- Barre v. Spring Brook Water Co., 4 
 
 longing to the public service com- Lack. Leg. News (Pa.), 367. 
 pany should not come in for returns 
 
 [279] 
 
§ 334 ] Railroad Rate Regulation 
 
 to pay to sell its bonds at par if the negotiations for the 
 issue are conducted with good faith would be the test. 
 And that would depend upon the stability of the business 
 to the mind of the lenders. Public service bonds are 
 sold on the exchanges from as low as a 3 per cent basis 
 to as high as a 12 per cent basis, and doubtless will always 
 continue to do so. The suggestion that some fixed stand- 
 ard should be taken, such as the rate paid upon United 
 States, State, or even municipal bonds in the locality in 
 question has no justice in it. That was said very plainly 
 by Mr. Justice Edwards in Wilkes-Barre v. Spring Brook 
 Water Co.,^^ when an application was made to him under 
 the Pennsylvania statute to order a reduction of rates by 
 a water company which was earning barely 5 per cent, 
 allowing only 1 per cent for depreciation: "Reference 
 has been made to the interest paid on Wilkes-Barre city 
 bonds and on large sums otherwise safely invested. Such 
 investments are not by any means analogous to invest- 
 ments in waterworks. Good bonds such as Wilkes-Barre 
 bonds remain intact. They are not liable to change or 
 diminution in principal. At a time certain the principal 
 is to be paid to the investor to the last cent. If the rate 
 paid on such investments shall determine the percentage 
 of profit to be paid water companies there would be no 
 inducement for anybody to invest money in works of a 
 public nature. It would be much less wearisome to sit 
 down twice a year and cut off coupons from bonds. Enter- 
 prise and industrial progress would be at a standstill. ^^ 
 
 § 334. Risk by reason of depreciated security. 
 
 A very complicated instance of this general problem 
 came up in the case of Steenerson v. Great Northern Rail- 
 way, ^^ already much quoted. The problem and its solu- 
 tion are thus stated by Mr. Justice Canty in his own words: 
 
 19 4 Lack. Leg. News (Pa.), 367. Milwaukee Elec. Ry. Co. v. Milwau- 
 ™ Similar language is used in: kee, 87 Fed. 577. 
 
 2169 Minn. 353, 72 N. W. 713. 
 [280] 
 
Rate of Return [ § 335 
 
 "A large amount of railroad bonds floated years ago, for 
 the full cost of the roads, at high rates of interest, are now 
 very poorly secured. And on the maturity of such bonds, 
 or when an attempt is made to reorganize the road on 
 foreclosure, it is found difficult to scale down the amount 
 of indebtedness to a point where the road will, under present 
 conditions, be sufficient security for bonds drawing a fair 
 rate of interest. These things tend to make the present 
 rates of interest on railroad securities unreasonably high. 
 But should the losses caused by all of these economic 
 changes be borne by the public, or by the owners of the 
 railroad? There can be but one answer to this question. 
 As we have repeatedly stated, neither the State nor the 
 public have ever guaranteed that railroads would always 
 be worth the amount originally invested in them, or that 
 what is a reasonable rate of income would not be less in the 
 future than it was at the time of the investment, and have 
 never guaranteed, directly or indirectly, either the interest 
 or principal of railroad bonds. These losses must be borne, 
 not by the public, but by the owners of the railroad; and, 
 as against the public, the holders of the bonds have no 
 greater rights than the railroad company itself." 
 
 § 335. Rate of return dependent upon locality. 
 
 It is a part of the rule under discussion, that the rate of 
 return which the company in question ought to be allowed 
 to receive is that prevailing in the locality where the com- 
 pany is carrying on its business. This was said in Louis- 
 ville & Nashville Railway Company v. Brown. ^^ In hold- 
 ing a reduction of rates unjustifiable. Judge Pardee said: 
 "At present, I do not think it necessary to consider ex- 
 haustively the question as to how much per cent of net 
 revenue, based on the actual value of the railroad and 
 equipment, a railroad company is entitled to earn. I 
 think it will be conceded that as long as the rates are reason- 
 able, and do not unjustly discriminate, the company is 
 
 « 123 Fed. 946. 
 
 [281] 
 
§ 336 ] Railroad Rate Regulation 
 
 entitled to earn some amount; and it seems reasonably 
 clear to me that, if entitled to earn something under the 
 above conditions, it is entitled to earn under the same 
 conditions a compensatory amount equal, at least, to the 
 usual and legal rate of interest in the locality where the 
 railroad is situated. Judging by the business of the past 
 19 years, in connection with the showing made on this 
 hearing as to present and future business, I conclude that 
 there is no prospect in the immediate future that the net 
 earnings of the complainant's railroads in Florida will 
 approach an amount at all equal to the interest on the 
 value of the said railroads at the usual rate prevailing in 
 Western Florida." 
 
 § 336. Investment in public service. 
 
 Finally, the advantages of investment in public service 
 are strongly presented in the following extract from the 
 opinion of the Commission in the Advance in Rates Case 
 of 1910. "What business can be more attractive to the 
 investor than this, in which no rival is to be apprehended, 
 where the amount of business is assured, and where the 
 price for the transaction of that business is protected by 
 the fundamental law of the land. All this has long since 
 reflected itself in the prices of railway securities. Ten 
 years ago a high-grade, long-time railroad bond like the 
 3 1-2 per cent New York Central underlying mortgage 
 sold at par. To-day, owing apparently to the increase 
 in the rate of interest a similar bond, in order to bring 
 par, must bear a rate of 4 per cent, or perhaps slightly 
 more. These railroad bonds command nearly as high a 
 price when no question of local taxation intervenes as do 
 municipal bonds. The price of railroad stocks in the past 
 has not been controlled by the same considerations as 
 that of railroad bonds. These stocks have been largely 
 the subject of speculation and the prices have been de- 
 termined by other considerations than the mere rate of 
 dividend. These conditions are changing. In Official 
 [282] 
 
Rate of Return [ § 337 
 
 Classification territory the day of railroad construction 
 and railroad consolidation has given place to that of rail- 
 road operation. The successful railroad magnate of the 
 future in this territory will be he who can operate his prop- 
 erties most economically and most satisfactorily." 
 
 § 337. Present tendencies in regulation. 
 
 It is significant that in the Five Per Cent cases of 1914 
 a more liberal policy had been pursued in this respect. 
 It is still true, however, that there is as yet no fixed per- 
 centage applicable to all cases established. Each case 
 is still to be judged on its own merits; it may well be that 
 a railroad in one community would be entitled to one rate 
 of return, while another line in another community would 
 be entitled to a different rate. It may be that a large and 
 solidly established company will not be entitled to as high 
 a return as a smaller one which is struggling against ad- 
 verse circumstances. The most that can be said by way 
 of general principle, is that the return should be at least 
 the average return which is earned by other classes of 
 business of the same degree of hazard in the same com- 
 munity. The Commission in fixing a rate of return should, 
 if it is well advised, be liberal lest too strict a poUcy re- 
 sult in turning capital to other fields of enterprise. The 
 United States still needs development by improvement 
 of its means of transportation. If the period of extensive 
 building is coming to an end, the possibility of intensive 
 development is only in its beginning. In its valuations 
 of properties, the Commission should guard against in- 
 flation, but should be liberal in establishing the rate of 
 return on that value. 
 
 [283] 
 
CHAPTER VIII 
 
 OPERATING EXPENSES 
 
 § 340. Provisions of the Act. 
 341. Real cost of operation. 
 
 Topic A. Cost of Performing Service 
 
 § 342. Cost of rendering service. 
 
 343. Net earnings in general. 
 
 344. Salaries paid to officials. 
 
 345. Cost of supplies. 
 
 346. Unreasonable expenditures. 
 
 347. Improvident arrangements. 
 
 348. Estimating labor cost. 
 
 349. Scientific management. 
 
 350. Loans. 
 
 351. Taxes. 
 
 Topic B. Expenditures on the Plant 
 
 § 352. Expense of equipment and maintenance. 
 
 353. Cost of rolling stock. 
 
 354. Losses by accident. 
 
 355. Betterments considered as maintenance. 
 
 356. Improvement of existing plant. 
 
 357. Replacement considered as repair. 
 
 358. Permanent improvements should not be annual charge 
 
 359. New construction should be charged to capital. 
 
 360. New construction not an operating expense. 
 
 361. Betterment out of income. 
 
 Topic C. Depreciation Requirements 
 
 § 362. Allowance for depreciation. 
 
 363. Types of depreciation. 
 
 364. Authorities refusing to allow depreciation. 
 
 365. Renewal of equipment to offset depreciation. 
 
 366. Fund to repair depreciation. 
 
 367. Capitalization of past depreciation. 
 
 368. Payments into sinking fund. 
 
 369. Amortization of franchise rights. 
 
 [284] 
 
Operating Expenses [ § 340 
 
 Topic D. Operations of Consolidated Properties 
 
 § 370. Complications in case of systems. 
 
 371. Divisions as integral parts of the whole system. 
 
 372. Unprofitable portions of the line not considered. 
 
 373. Systems considered as wholes. 
 
 374. Treatment of branch lines. 
 
 375. Constituent roads operated under separate charters. 
 
 376. Rent of leased portions. 
 
 377. If rental becomes unjustifiable. 
 
 § 340. Provisions of the Act. 
 
 The functions of the Commission in regard to the de- 
 termination of operating expenses are by no means incon- 
 siderable. It can always call upon the carriers for reports 
 of various sorts; and now by the expansion of its practice 
 ia establishing rules for keeping accounts, it keeps a very 
 close control over the proper division between fixed charges 
 and operating expenses. These reports among other things 
 must, in accordance with section 20, include the nimiber 
 of employees, and the salaries paid each class; the acci- 
 dents to passengers, employees, and other persons, and 
 the causes thereof; the amounts expended for improve- 
 ments each year, how expended, and the character of 
 such improvements; the earnings and receipts from each 
 branch of business and from all sources; the operating 
 and other expenses; the balances of profit and loss; and a 
 complete exhibit of the financial operations of the carrier 
 each year, including an annual balance sheet; and the 
 Commission has been in the broadest way possible given 
 power, in its discretion, for the purpose of enabling it 
 the better to carry out the purposes of the Act, to pre- 
 scribe a period of time within which all common carriers 
 subject to the provisions of this Act shall have, as near 
 as may be, a uniform system of accounts, and the manner 
 in which such accounts shall be kept. The Commission 
 by further provisions of section 20 may, in its discretion, 
 prescribe the forms of any and all accounts, records, and 
 memoranda to be kept by carriers subject to the provi- 
 sions of this Act, including the accounts, records, and 
 
 [285] 
 
§§ 341, 342 ] Railroad Rate Regulation 
 
 memoranda of the movement of traffic as well as the re- 
 ceipts and expenditures of moneys. The exercise of the 
 powers conferred upon the Commission under these pro- 
 visions of the Act is also discussed in Chapter XX, particu- 
 larly under Topic A. 
 
 § 341. Real cost of operation. 
 
 The real cost of operation is not so easy a figure to 
 determine as one might first suppose. If brought to the 
 test of inquiry before the courts, not only must the ac- 
 tual expenditures be shown, but they must be defended, 
 if attacked, as reasonable in themselves. Certain items 
 of annual expenditure should obviously be included as 
 annual charges, such as wages and supplies, provided 
 that such expenditures have not been unreasonable. But 
 as to other expenditures there is difficulty in deciding 
 whether they should be included as current expenses or 
 provided for out of new capital, such as replacements 
 and betterments. Involved in this problem is the account- 
 ing permissible in allowing for depreciation and reparation. 
 And in this connection the propriety of setting aside a 
 sinking fxmd or providing against amortization should be 
 considered. Altogether, it will be seen that this is not a 
 matter to be dismissed with the accepted rule that only 
 proper annual charges should be deducted from gross 
 income, while all expenditures for lasting improvements 
 should be provided for from new capital. These are 
 fundamental issues in many cases brought before the 
 courts; a company must make full disclosure of its earn- 
 ings and expenses when it assails as confiscatory the 
 rates fixed by the authorities to which the power to act 
 has been delegated. 
 
 Topic A. Cost of Performing Service 
 
 § 342. Cost of rendering service. 
 
 Before there can be any question of income on the capital 
 employed, the necessary annual charges must be met by 
 [286] 
 
Operating Expenses [ § 343 
 
 the rates; and first of all the actual cost of service furnished. 
 This involves the payment of wages, and the purchase 
 of current supplies. The general principle was concisely 
 stated by Mr. Justice Brewer in Chicago and Northwestern 
 Railway v. Dey:^^ "Compensation imphes three things: 
 Payment of cost of service, interest on bonds, and then 
 some dividend. Cost of service implies skilled labor, the 
 best appliances, keeping the roadbed and the cars and 
 machinery and other appliances in perfect order and repair. 
 The obligation of the carrier to the passenger and the ship- 
 per requires all these. They are not matters which the 
 carriers can dispense with, or matters whose cost can by 
 them be fixed. They may not employ poor engineers, 
 whose wages would be low, but must employ competent 
 engineers, and pay the price needed to obtain them. The 
 same rule obtains as to engines, machinery, roadbed, etc., 
 and it may be doubted whether even the legislature, with 
 all its power, is competent to relieve railroad companies, 
 whose means of transportation are attended with so much 
 danger, from the full performance of this obligation to the 
 public." 24 
 
 § 343. Net earnings in general. 
 
 The proper determination of net earnings is by no 
 means the simple problem it might seem. Of the total 
 costs of conducting transportation something in the 
 vicinity of one-half are what may be termed out-of-pocket 
 costs — that is cost of fuel and wages, and repairs to loco- 
 motives and cars. 2^ It is obvious that there are many 
 
 25 35 Fed. 866, 1 L. R. A. 744, 2 '<■ LouisviUe & N. R. R. C. & C. 
 
 Int. Com. Rep. 325. Rates, 26 I. C. C. 20. 
 
 See further Missouri Pacific Ry. v. Where the operating ratio is 
 
 Tucker, 230 U. S. 340, 57 L. ed. 1507, extraordinarily high, the Commission 
 
 33 Sup. Ct. 961. will not feel justified in ordering a 
 
 " Chicago, M. & S. P. Ry. v. reduction. Nebraska State Railway 
 
 Tompkins, 176 U. S. 167, 44 L. ed. Commission v. C, B. & Q. R. R., 23 
 
 418, 20 Sup. Ct. 336. I. C. C. 121. 
 
 See also Wood v. Vandalia R. R., 
 231 U. S. 1, 34 Sup. Ct. 7. 
 
 [287] 
 
§ 343 ] Railroad Rate Regulation 
 
 other expenditures to be accounted for as annual charges, 
 as to which it is difficult to state rules of apportionment 
 in any itemized schedule of costs, but which nevertheless 
 enter into the cost of performing any part of the trans- 
 portation rendered by the company in question. The 
 character of this problem in general was excellently stated 
 by the Commission in one proceeding ^° thus: "The 
 item of conducting transportation cannot be much modi- 
 fied. Whenever a train moves so much coal must be used 
 and so many men employed at the time of the movement. 
 With maintenance of way and equipment this is not so. 
 A certain amount must be expended to keep the roadbed 
 and other permanent structures and the rolling stock in a 
 going condition, but a certain other amoimt, although 
 necessary to keep the property good in the long run, may 
 be laid out sooner or later according to the will of the man- 
 agement. For example, rails must be relaid but the time 
 of relaying can usually be varied for a considerable period. 
 So in the renewal of a bridge or a culvert there is a leeway 
 of years usually. A car or an engine can be used after 
 good economy would require its abandonment. The build- 
 ing of a station can be postponed almost indefinitely. 
 From these considerations it results that the management 
 can without taking from or adding to the items which 
 are actually needed to keep the property good vary for a 
 particular year or even for a series of years by several 
 hundred dollars per mile the cost of operation and thereby 
 the net results. In addition to this the amount charged 
 to maintenance may be greatly varied by the manner in 
 which the accounts are kept. A new car is purchased in 
 the place of an old one. It is largely more efficient and 
 more expensive. What part of it shall be charged to main- 
 
 ^^ Rates from St. Louis to Texas as formerly, the enchanced cost of 
 
 Points, 11 1. C. C. Rep. 238. operation may properly be offset by 
 
 Where the margin of profit to the an increase of the rate. Mountain 
 
 carrier on a low grade commodity Ice Co. v. D., L. & W. R. R., 15 
 
 was small to begin with and the I. C. C. 305. 
 business itself is not ^o desirable now 
 
 ■ [ 288 ] 
 
Operating Expenses [ § 344 
 
 tenance and what part to permanent improvement? So 
 of the replacement of rails, bridges, culverts, depots and 
 whatever enters into the construction and equipment of a 
 railroad. Some railroads carefully separate what is prop- 
 erly maintenance from what is strictly an addition; others 
 are liberal in the making of these distinctions, charging 
 more to maintenance and renewal and less to betterment, 
 while still others charge all improvements against operating 
 expenses. The general tendency in all parts of the country 
 is to charge more to operation than formerly." 
 
 § 344. Salaries paid to officials. 
 
 The salaries of officials must, of course, be paid, as part 
 of the annual charges; but these salaries must not be 
 fixed at an extravagant amount. If a group of stock- 
 holders who controlled a majority of the stock could vote 
 themselves enormous salaries, and deduct the amount 
 from the receipts of the company before making a return 
 to capital, the highest possible rates might be justified, 
 and the rights of the public be ignored. This question 
 was considered, and well discussed, by Mr. Justice Brewer 
 in Chicago and Grand Trunk Railway v. Wellman:" 
 "It is agreed that the defendant's operating expenses for 
 1888 were $2,404,516.54. Of what do these operating 
 expenses consist? Are they made up partially of extrava- 
 gant salaries, — ^fifty to one hundred thousand dollars to 
 the president, and in like proportions to subordinate 
 officers? Surely, before the courts are called upon to ad- 
 judge an act of the legislature fixing the maximum pas- 
 senger rates for railroad companies to be unconstitutional, 
 on the groimd that its enforcement would prevent the stock- 
 holders from receiving any dividends on their invest- 
 
 " 143 U. S. 339, 36 L. ed. 76, 12 as against a legislative reduction 
 
 Sup. Ct. 400. of rates that the companies would 
 
 In St. Louis & S. F. Ry. Co. v. be compelled to reduce the wages of 
 
 Hadley, 168 Fed. 317, the court their employees, 
 refused to take it into consideration 
 
 19 [ 289 1 
 
§ 345 ] Railroad Rate Regulation 
 
 ments, or the bondholders any interest on their loans, they 
 should be fully advised as to what is done with the re- 
 ceipts and earnings of the company; for, if so advised, it 
 might clearly appear that a prudent and honest man- 
 agement would, within the rates prescribed, secure to the 
 bondholders their interest, and to the stockholders reason- 
 able dividends." ^ 
 
 § 345. Cost of supplies. 
 
 The articles which a railroad company has occasion to 
 buy are very numerous. Some of these are extensively 
 used, others only in limited quantity. Evidently no 
 general average can be constructed which is reliable with- 
 out knowing the quantity which is used of each article. 
 "An advance in the price of coal would be of vital con- 
 sequence to a railway and would be in no wise offset by a 
 corresponding decline in feather dusters." ^* These are 
 general questions considered in passing upon the reason- 
 ableness of rates. The prices of almost all supplies used 
 in railway construction and operation have advanced. 
 "Comparing 1896 with the present year (1910) nearly all 
 kinds of supplies which enter into the construction, main- 
 tenance, and operation of a railroad have very much 
 increased in price. Nearly one-half the cost of operation 
 is labor, and it is said that within that period the wages 
 of railroad employees have advanced 30 per cent. We are 
 told that not only has the price of a day's labor increased, 
 but that the eJEciency of that labor for various reasons 
 has decreased. Legislative enactment, both of the federal 
 and of the State Governments, has in the interest of the 
 public and the employees required the employment of 
 additional labor. Laws like the employers' liability act 
 
 '"This quotation is included with creased cost of labor by reason of 
 
 aptntoval in the opinion of the court the reduction of hours. In re Arkan- 
 
 in Tucker v. Missouri Pacific Ry. aas R. R. Rates, 168 Fed. 720. 
 Co., 82 Kans. 222, 108 Pac. 89. " Re Advances in Freight Rates, 
 
 According to a recent decision, a 9 I. C. C. Rep. 382. 
 court will take into account the in- 
 
 [290] 
 
Operating Expenses [ § 346 
 
 will add to the damages which railroads must pay for in- 
 juries to their employees." '" 
 
 § 346. Unreasonable expenditures. 
 
 The Commission has had occasion several times to 
 animadvert upon the practices of the railways in paying 
 extraordinary sums to get business. These must obviously 
 be tested like other operating expenses of the company, 
 and if found to be unduly high without justifiable reason 
 they should be disallowed. Thus in an early investigation 
 by the Commission it reported: " "Another cause is 
 foxuid in the active competition for traffic, under the 
 stress of which a vast number of soliciting agents are em- 
 ployed, whose offices are found not only on the corners 
 of the most expensive streets of every city, but in the 
 rural communities as well; and who represent, both in 
 their fixed establishments and in their movement up and 
 down the land, not only the carriers directly, but also 
 various so-called 'lines' — red, white, or blue, as the case 
 may be; whose only interest is to obtain traffic; who have 
 little responsibility of their own or to their ultimate em- 
 ployers; and whose object in life is necessarily to make a 
 record of success in securing business which shall warrant 
 the continuance of their employment and of their pay. 
 All this gilded advertisement and persistent solicitation 
 in the end is paid for by the pubUc. The business exists 
 and the public service of transportation must be done, 
 whether or not any agent intervenes to help along the con- 
 tract. Whatever arrangements and considerations are 
 devised for the purpose of securing a shipment to a given 
 line are necessarily at the expense and to the prejudice of 
 some other shipper." '^ 
 
 " Re Advances in Rates, Eastern of their operations to increase their 
 
 Caae, 20 1. C. C. 243. net, instead of expecting advances 
 
 " Re Underbilling, 1 Int. Com. in rates, see the Five Per Cent Cases, 
 
 Rep. 813, 1 1. C. C. Rep. 633. opinions of August 2, 1914, and 
 
 " On the general principle that December 18, 1914. 
 the railroads must look to the basis 
 
 [291] 
 
§ 347 ] Railroad Rate Regulation 
 
 § 347. Improvident arrangements. 
 
 And in one case before it where it was shown that 
 large commissions — 20 per cent of the gross receipts in 
 one case — were being given by certain raihoads for the 
 purpose of developing their milk traffic, the Commission 
 said squarely that such expenditures could not be charged 
 against the shippers in making up the rates. To quote 
 the language used: '.'The Lackawanna and Lehigh Valley 
 are parties to agreements entered into mainly for the pur- 
 pose of developing their milk traffic, and under which com- 
 pensation is afforded to the other contracting parties 
 equal to a considerable share of the gross receipts from 
 the transportation. Such compensation, as the business 
 has been increased or 'developed' on the Lackawanna, or 
 may become greater on the Lehigh Valley, seems extrava- 
 gant, but whether either agreement is disadvantageous to 
 the carrier or otherwise is matter for it to determine. 
 Improvident management of the road is primarily a matter 
 of internal or corporate concern, to be dealt with by the 
 corporation and its creditors among themselves.^^ But 
 extraordinary or unnecessary cost of operation or man- 
 agement cannot be permitted to cause unreasonable or 
 unjust rates, discriminations, preferences or prejudices." '^ 
 In a later case '" where it was shown that the expense of 
 doing the express business was high by reason of the fact 
 that large percentages, often as high as 55 per cent of 
 the gross receipts, were paid to the railroads for the ex- 
 clusive privilege of doing business over their lines, the Com- 
 mission said that neither legally nor morally could it con- 
 sider that these arrangements in themselves would justify 
 higher rates for transportation than would otherwise be 
 legal.'* 
 
 " Citing Shamberg v. Delaware, =* Hormel & Co. v. C, M. & St. P. 
 
 L. & W. Ry., 3 Int. Com. Rep. 502, Ry., 26 I. C. C. 112. 
 
 4 I. C. C. Rep. 660. '« In re Express Rates, 28 I. C. C. 
 
 " Milk Producers' Asso. v. (©ela- 132. 
 ware, L. & W. Ry., 7 I. G.'C. Rep. 92. 
 
 [292] 
 
Operating Expenses [ §§ 348, 349 
 
 § 348. Estimating labor cost. 
 
 Estimating labor cost is by no means so simple a process 
 as it seems. In one important case before the Commis- 
 sion,'' this matter was examined rather elaborately, as 
 the railways affected claimed the right to advance rates 
 by reason, for one cause, of the increase in wages. On 
 that point the Commission said, in part: "The railroads 
 insist that this advance in the per diem wages does not 
 represent .the actual increase in the cost of the labor itself 
 for the reason that owing to the regulations and require- 
 ments of the various labor organizations that labor is 
 less efficient. For illustration, a station agent formerly 
 ■did the work of a telegraph operator whereas to-day two 
 persons must be employed. Without expressing any opin- 
 ion as to the reasonableness of these regulations and re- 
 quirements we are inclined to think that the claim is well 
 taken and that there has been for various reasons a loss, 
 as compared with ten or twelve years ago, in the quantity 
 of work which a day's labor means." In a later proceeding, 
 of even greater importance, the Commission said: "The 
 same remark would seem to apply to wages as they stand 
 after the recent increases. Railroad labor, certainly or- 
 ganized railroad labor, is probably as well paid, and some 
 say better paid, than labor of other kinds, upon the aver- 
 age. Railroad employees will hardly expect to receive 
 wages which exceed those paid to other forms of labor 
 for the same grade of service, and this Commission cer- 
 tainly could not permit the charging of rates for the pur- 
 pose of enabling railroads to pay their laborers extrava- 
 gant compensation as measured by the general average 
 compensation paid labor in this country as a whole." '* 
 
 § 349. Scientific management. 
 
 Statements of increased cost of transportation can have 
 little weight when presented in the abstract, with no at- 
 
 " Rates from St. Louis to Texas '" Advance in Rates, Eastern Case, 
 
 Points, 11 1. C. C. Rep. 238. 20 I. C. C. 243. 
 
 [2931 
 
§ 350 ] Railroad Rate Regulation 
 
 tempt to consider corresponding reductions resulting from 
 greater efficiency. It must be carefully observed that, 
 owing to the introduction of certain economies in rail- 
 road operation, a given quantity of work produces a much 
 greater result; these different economies come mostlj^ to 
 the same end, the handling of a greater amount of pay- 
 ing freight in a train.'* Concerning the possibilities of 
 getting greater results at lower costs out of the same 
 laborers, even at higher wages, by "scientific, manage- 
 ment," so called, the Commission said that it could not 
 find that the railroads could make good any part of these 
 actual advances in wages by the introduction of scientific 
 management, ** but that the Commission still holds to 
 the principle that, before any general advance can be 
 permitted, it must appear that carriers have exercised 
 proper economy in conduct of their business. And cer- 
 tainly rates cannot be advanced because of wasteful, cor- 
 rupt, or indifferent management. *i To put it mildly, it 
 is not clear to the Commission that the pubUc should 
 stand responsible for mistakes made in management of 
 railroads.^^ Railroad management should be most pro- 
 gressive; and continual increases in efficiency are to be 
 looked for.*' If carrier does not see proper to make im- 
 provements that will reduce cost of operation, it cannot 
 claim that it may raise rates because cost approaches or 
 overtakes revenue.** For instance, increased tractive power 
 of locomotives would tend to reduce the operating cost per 
 unit of freight transportation.*' 
 
 § 350. Loans. 
 It is obvious that a loan made by a company during 
 
 " Hormel & Co. v. C, M. & St. P. Atchison, T. & S. F. Ry., 20 I. C. C. 
 
 Ry., 26 I. C. C. 112. 463. 
 
 " Advance in Rates, Eastern Case, ■" Arlington Heights Pruit Ex- 
 
 20 I. C. C. 343; Advance in Rates, change v. S. P. R. R., 20 I. C. C. 156. 
 July, 1914. " Louisville & N. Co. C. & C. 
 
 " The Five Per Cent Cases, I. C. Rates, 26 1. C. C. 20. 
 C. Aug. 2 and Dec. 18, 1914. « Traffic Bureau of W. v. L. & N. 
 
 « R. R. Commission of Texas v. R. R., 28 1. C. C. 533. 
 
 [294] 
 
Operating Expenses [ § 350 
 
 the year cannot be charged as an annual expense. In 
 Southern Pacific Co. v. Railroad Commissioners ^^ that 
 question actually came up for decision. It appeared that 
 the Southern Pacific Company, as lessee, had entered into 
 an elaborate lease with the Oregon & California Company 
 as lessor, by the terms of which the net earnings received 
 by the lessee should be applied to pay the interest on the 
 bonded indebtedness of the lessor with a proviso that if 
 there should not be a sufficiency of net earnings upon 
 the fine to pay this interest the Southern Pacific Company 
 might pay the same on account of the Oregon & Cali- 
 fornia Company and charge the payment to it, being en- 
 titled to reimburse itself from future net earnings with six 
 per cent interest until paid. The Southern Pacific Com- 
 pany claimed that a payment which it had made on this 
 account should be put in as a current expenditure in de- 
 termining whether the rates fixed by the California Com- 
 mission left it a reasonable return above proper expenses. 
 But the court held otherwise; on this point Judge Mc- 
 Kenna said: "Was the payment of the interest a loss to 
 the Southern Pacific Company? Clearly not. It is se- 
 cured to it, and is to be reimbm-sed to it, and is charged in 
 the report as a 'balance deficit payable by Oregon & 
 California Railroad Company.' Clearly, again, if it had 
 not been paid, it could not be claimed as a loss. If paid, 
 and to be reimbursed and secured, it cannot be claimed as 
 a loss, if the debtor or the security be good. I cannot 
 assume now that the debtor or the security will not be good. 
 It may be, of course, that it will not be good, but I can 
 only deal with present conditions, or, at any rate, with 
 those hkely to occiir within a reasonable period of time. 
 That, under the lease, the payment of the deficit is not a 
 charge on the Southern Pacific Company, is not only 
 evident from its terms, but evident from the allegations 
 of the bill." 
 
 " 78 Fed. 236. ineflBcient financiering, in engaging 
 
 " It seems that if there has been on speculative ventures at inflated 
 
 [ 295 1 
 
§§ 351, 352 ] Railroad Rate Regulation 
 
 § 351. Taxes. 
 
 Taxes for the year are obviously a proper annual charge. 
 Overdue taxes for past years paid during the year can 
 hardly, however, be properly regarded as an annual charge.^* 
 Upon the policy for the State to pursue in taxing public 
 service companies in general and railroads in particular, 
 there is and may be much difference of opinion. Such 
 companies should, of course, be taxed upon their tangible 
 property at its locus, and this is generally done. But 
 upon the question of whether there should be a high fran- 
 chise tax opinion differs, although it is now recognized 
 that such taxes are constitutional enough. It may be 
 pointed out, however, that if too heavy a franchise tax 
 is levied upon a railroad company, it is bound in the end 
 to react upon the rates which the railroad will charge 
 the public, as the payments made for taxation require- 
 ments are obviously annual charges. This matter was 
 thus discussed by the Commission in one proceeding/^ 
 "Several of the carriers stated that there was a tendency 
 on the part of States and municipalities to increase the 
 taxes levied upon railroads, and that this imposes an addi- 
 tional burden. Railroad property, like every other species 
 of property, should bear its just burden of taxation. If 
 the property has been once taxed, the stock which repre- 
 sents that property ought not to be taxed a second time; 
 and when it is, the tax on the property is in the nature of 
 an operating expense." 
 
 Topic B. Expenditures on the Plant 
 
 § 362. Expense of equipment and maintenance. 
 
 As the railroad is obUged to provide a sufficient equip- 
 ment for the proper accommodation of the public, and 
 to keep all its appliances and premises in good condition, 
 
 prices, the company and not the " Southern Pacific Co. v. Railroad 
 
 shipper should bear the loss. The Comrs., 78 Fed. 236. 
 
 New England Investigation, 27 I. C. " Re Advances in Freight Rates, 
 
 C. 1. 9 I. C. C. Rep. 382. 
 [296] 
 
Operating Expenses [ § 353 
 
 the cost of maintaining the equipment is, of course, to be 
 repaid from the rates. The Commission is clear that nor- 
 mally rates should be provided for keeping its equipment 
 up to modem standards of operation.*" Maintenance 
 of way and structure should be always taken into account 
 in estimating the cost of operating the road." The public 
 policy of permitting full allowance for upkeep is suffi- 
 ciently obvious to the Commission." And in passing on 
 rates this has been reiterated as occasion arises; for it 
 is well understood nowadays that, when it comes to the 
 question of service, the demand is that it shall be ade- 
 quate, and rates should be allowed sufficient to bring that 
 about. ^'^ The public cannot expect to get from the carriers 
 more than it is paying for; and it must be realized that 
 low rates have an inevitable tendency to result in inade- 
 quate facilities. 
 
 § 353. Cost of rolling stock. 
 
 The expense from use of rolhng stock constitutes one 
 of the heavy items in the operating charges of a railroad. 
 As has been pointed out, this is a charge which tends to 
 increase rather than diminish. In one proceeding before 
 the Commission the ground was gone over in a thorough 
 manner, as the following extract will show: ^* "One of 
 the most important items which enter into the expense 
 of railroad operation is the cost of equipment. For the 
 purpose of arriving at some satisfactory opinion on this 
 subject the Commission examined in this proceeding the 
 first vice-president of the American Car and Foundry 
 Company and in another similar proceeding the general 
 manager of the construction department of the Pullman 
 Company. The testimony of these gentlemen agrees. 
 
 ^ Meeker & Co. v. Lehigh Valley '' National Lumber Exporters 
 
 Ry., 21 1. C. C. 129. Asso. v. St. L., I. M. & S. Ry., 2s 
 
 " Standard Mirror Co. v. P. R. R., I. C. C. 215. 
 
 27 I. C. C. 200. " Rates from St. Louis to Texas 
 
 " May Bros. v. Y. & M. R. R., 26 Points, 11 L C. C. Rep. 238. 
 I.C.C.323. 
 
 [297] 
 
§ 354 ] Railroad Rate Regulation 
 
 The cost of building a car also of necessity varies with the 
 changes in cost of materials and labor which have been 
 about the same in the car shop as in other railroad opera- 
 tions. What should be especially noted, and what largely 
 accounts for the apparent great increase in price is the 
 fact that the car of to-day differs radically from the car 
 of ten or twelve years ago. The evidence as to the cost 
 of locomotives is less complete than in case of cars. En- 
 gines, like cars, are of much greater capacity than formerly, 
 and they are also equipped with many improved devices 
 which are supposed to add to the value in actual opera- 
 tion. In units of tractive power, the difference is less 
 when given by the engine. Even when so measured we 
 are inchned to think that they were distinctly higher in 
 1902 than in 1892. The ownership of the various locomo- 
 tive works of the United States has been so adjusted within 
 the last few years that 'suicidal competition' no longer 
 exists; and this fact is easily observed in the price which 
 railways are compelled to pay." ^'^ 
 
 § 354. Losses by accident. 
 
 A certain amount of loss by accident is inseparable from 
 the conduct of any business, and this is particularly true 
 of a business having so many unavoidable dangers as that 
 of railroad operation. In so far as these losses are without 
 fault of anyone concerned the sums paid to make repara- 
 tion for them may obviously be charged as an expense of 
 operation. But more than this, it seems, must be conceded; 
 a certain amount of negligence by employees cannot be 
 avoided, and these losses also seem inseparable from the 
 conduct of the business. The only losses which the rail- 
 road company may not properly charge against the public, 
 therefore, are those which result from its own reckless 
 management, or its willful failure to provide adequate 
 
 '* An advance will not be justified sufficient. City of Spokane v. N. P. 
 because of acquiring new equipment, Ry. Co., 19 1. C. C. 162. 
 where the former equipment was 
 
 [298] 
 
Operating Expenses [ § 355 
 
 facilities.''* These points were excellently made in a ruling 
 some years ago by the Commission." "The defendant 
 states that excessive damages are claimed by Texas shippers 
 with respect to the shipment of live stock; it apparently 
 insists that these damages are unjust and that it is com- 
 pelled to recoup itself by an advance in the rate. This 
 Commission can hardly find that a judgment rendered in 
 due course of judicial procedure is unjust or excessive. 
 Nor can we assume that this defendant has been coerced 
 into payment of unreasonable or unjust damages by the 
 bringing of such suits. The fact, however, that claims 
 of that kind are made in large amounts, that such claims 
 are often compromised by the carriers, that when not 
 compromised they result in large verdicts and that as a 
 consequence the carrier is obliged to pay large sums for 
 damage to live stock in transit is undoubtedly proper to 
 be shown. It is an incident in the transportation of that 
 commodity, which may properly be taken into account 
 by the railway in establishing its tariff. If for any reason 
 these claims for damages have become more frequent 
 than they were formerly, without fault upon the part of 
 the railway, that might be a reason for increasing the 
 rate. It should be carefully observed, however, that the 
 defendant ought not by this means to escape from its own 
 neghgence." 
 
 § 356. Betterments considered as maintenance. 
 
 It is not always easy to determine whether replacement 
 construction of the plant of a public service company 
 constitutes an annual or a capital charge. Current repairs 
 obviously constitute annual charges. Outright exten- 
 sions just as obviously should be put into the capital ac- 
 count. But as to replacement, and more particularly 
 as to improvements, problems arise which may be handled 
 in different ways. Since they may be handled in different 
 
 *" See In re Arkansas R. R. Rates, change v. Texas & P. Ry., 10 I. C. C. 
 168 Fed. 720. Rep. 331. 
 
 " New Orleans Live Stock Ex- 
 
 [299] 
 
§ 356 ] Railroad Rate Regulation 
 
 ways not unreasonably, it cannot be said that a corpora- 
 tion is acting unreasonably in adopting one policy or the 
 other. This was pointed out by Mr. Justice Bradley when, 
 in Union Pacific Railroad Company v. United States, ^^ 
 the Supreme Court was called upon to decide whether that 
 company had acted unreasonably in so arranging its fi- 
 nances that it did not appear to be making such net earn- 
 ings as by the terms thereof were to be apphed to the re- 
 duction of certain of its bonds. "As a general proposition, 
 net earnings are the excess of the gross earnings over the 
 expenditures defrayed in producing them, aside from and 
 exclusive of the expenditure of capital laid out in construct- 
 ing and equipping the works themselves. It may often 
 be difficult to draw a precise line between expenditures 
 for construction and the ordinary expenses incident to 
 operating and maintaining the road and works of a rail- 
 road company. Theoretically, the expenses chargeable 
 to earnings include the general expenses of keeping up the 
 organization of the company, and all expenses incurred 
 in operating the works and keeping them in good condi- 
 tion and repair; while expenses chargeable to capital in- 
 clude those which are incurred in the original construction 
 of the works, and in the subsequent enlargement and im- 
 provement thereof." ^^ 
 
 § 366. Improvement of existing plant. 
 
 It may fairly be said that it has been the American 
 system of conducting public service companies to charge 
 to maintenance, as an annual expense, betterments, re- 
 placements, improvements, and repairs The question is 
 one of policy, which is usually left to the discretion of 
 the directors. There is but little danger that any board 
 will cause a very large or undue portion of their earnings 
 to be absorbed in permanent improvements.*" The prac- 
 
 ™ 99 U. S. 402, 25 L. ed. 274. «» The Commission feels that re- 
 
 ^' See also Metropolitan Trrst building and strengthening bridges 
 
 Co. V. Houston & T. C. R. R. Co., and trestles and laying heavier rails 
 
 90 Fed. 683. are expenses incident to increased 
 
 [300] 
 
Operating Expenses [ § 357 
 
 tice will only extend to those which may be required, from 
 time to time, by the gradual increase of the company's 
 traffic, the dispatch of business, the public accommoda- 
 tion, and the general permanency and completeness of 
 the works. When any important improvement is needed, 
 such as an additional track, or any other matter which 
 involves a large outlay of money, the owners of the road 
 will hardly forego the entire suspension of dividends in 
 order to raise the requisite funds for those purposes, but 
 will rather take the ordinary course of issuing bonds or 
 additional stock. But for making all ordinary improve- 
 ments, as well as repairs, it may be better for the stock- 
 holders, and all those who are interested in the prosperity 
 of the enterprise, that a portion of the earnings should be 
 thus employed.*' In one sense, a railroad is never com- 
 pleted. There is never, or hardly ever, a time when some- 
 thing more cannot be done, and is not done, to render the 
 most perfect road more complete than it was before. More- 
 over, this American system of maintenance of way from 
 earnings has in practice proved itself far superior to the 
 English system of issuing new securities for every sort 
 of improvement, which accumulates fixed charges, and 
 otherwise hampers the railway by excessive capitaliza- 
 tion. 
 
 § 367. Replacement considered as repair. 
 
 In the leading case of Reagan v. Farmers' Loan & Trust 
 Company,*^ it was contended that the cost of new rails 
 should be charged to construction, and not to expenses 
 of operation; but Mr. Justice Brewer said: "Now, it 
 goes without saying that, in the operation of every road, 
 
 tonnage and are indicative of pros- maintenance, is charged to operating 
 
 perity rather than distress. Mem- expenses, the Commission feels that 
 
 phis Freight Bureau v. L. & N. this constitutes no justification for 
 
 R. R. Co., 26 1. C. C. 402. increase in rates. New York Butter 
 
 "iBut, when the cost of what are and Cheese Rates, 28 I. C. C. 330. 
 
 clearly betterments, in contrast to " 54 U. S. 362, 38 L. ed. 1014, 14 
 
 Sup. Ct. 1047. 
 
 [301] 
 
§ 358 ] Railroad Rate Regulation 
 
 there is a constant wearing out of the rails, and a constant 
 necessity for replacing old with new. The purchase of 
 these rails may be called 'permanent improvements,' or 
 by any other name; but they are what is necessary for 
 keeping the road in serviceable condition. Indeed, in 
 another part of the report, under the head of 'Renewals 
 of rails and ties,' is stated the number of tons of 'New 
 rails laid' on the main Une. Other items therein are for 
 fencing, grading, bridging, and culvert masonry, bridges 
 and trestles, building, furniture, fixtures, &c. It being 
 shown affirmatively that there were no extensions, it is 
 obvious that these expenditures were those necessary for a 
 proper carrying on of the business required of the com- 
 pany." *' Upon the whole every Uberty possible should 
 be given the companies to improve their properties out 
 of current earnings; and it is only when it is plain that 
 outright new construction is being entered upon that the 
 companies should be obliged to issue new securities to 
 provide capital. For as long as the company has a con- 
 tinuous policy that, as improvements are needed in each 
 year, they shall be provided for out of annual earnings, 
 the maintenance of such a policy will roughly from year 
 to year throw a fair share upon each year which gets the 
 benefits of the work done in other years. 
 
 § 358. Permanent improvements should not be annual 
 charge. 
 
 However it may be in doubtful cases, where continual 
 replacements, going on from year to year, may not un- 
 reasonably be considered as equivalent to annual charges 
 to repair account, it is obvious that permanent improve- 
 ments should not be charged as annual expenditures in the 
 year in which they are constructed, but should be carried 
 to capital account. The United States Supreme Court" 
 
 «3 Ace. Southern Pac. Co. v. Rail- " Illinois C. R. R. Co. v. Inter- 
 
 road Comrs., 78 Fed. 236. state Com. Coram., 206 U. S. 441, 51 
 
 L. ed. 1127, 27 Sup. Ct. 700. 
 [3021 
 
Operating Expenses [ § 359 
 
 was perhaps speaking within limits when it held that 
 the Commission was not acting unreasonably in disallowing, 
 as operating expenses of the lUinois Central Railroad, 
 expenditures for real estate, right of way, tunnels, bridges, 
 and other strictly permanent improvements; and also for 
 equipment such as locomotives and cars. The Commis- 
 sion had expressed the opinion that such expenditures 
 should not be charged to a single year, but should be, so 
 far as practicable, projected proportionally over the future. 
 And this view Mr. Justice McKenna, speaking for the 
 court, adopted. "It would seem," he said, "as if ex- 
 penditures for additions to construction and equipment, 
 as expenditures for original construction and equipment, 
 should be reimbursed by all of the traffic they accommo- 
 date during the period of their duration, and that im- 
 provements that will last many years should not be charged 
 wholly against the revenue of a single year." ^^ 
 
 § 369. New construction should be charged to capital. 
 
 The rule will be generally conceded that outright new 
 construction should be charged to capital and should not 
 therefore be admitted as an annual expense of operation. 
 As Mr. Justice Carter of the Florida court recently put 
 it in a case *^ where the railroad, in complaining of the 
 rates put in force by a commission, alleged that its total 
 receipts would not now be sufficient to recoup it for its 
 "costs of operation" and its "cost of constructing:" "The 
 use of the words 'reasonable cost of constructing' renders 
 the pleading very ambiguous. The reasonable cost of 
 construction is to be considered in determining the fair 
 value of the company's property, which is an element 
 entering into the question of reasonableness of the rate; 
 but the cost of construction is not to be deducted from 
 
 «5 Permanent improvements and '' State ex rel. v. Seaboard A. L. 
 
 betterments are not properly charge- Ry. Co., 48 Fla. 129, 37 So. 314. 
 
 able against the earnings for the year. See Erie v. Erie Gas & C. Co., 78 
 
 Louisville & N. C. & C. Rates, 26 Kans. 348, 97 Pac. 468. 
 I. C. C. 20. 
 
 [303] 
 
§ 360 ] Railroad Rate Regulation 
 
 the earnings under the proposed rates in ascertaining if 
 those rates are reasonable; for under such a rule the pubUc 
 would be compelled to pay for constructing the road with- 
 out being entitled to its ownership." So in estimating 
 the net profits of a gas company it was held that operating 
 expenses would not include "expenditures for new weljs, 
 mains, or other permanent improvements or betterments."" 
 
 § 360. New construction not an operating expense. 
 
 The rule, therefore, is that outright new construction 
 should be charged to capital, and should not, therefore, 
 be charged in as an annual expense of operation. It is 
 hardly more unjustifiable to charge a shipper by sea the 
 cost of the vessel than to charge a shipper by rail in a 
 given year the cost of a new terminal freight station. This 
 general problem was discussed with discrimination in one 
 of the earlier investigations by the Commission,** an ex- 
 tract from which follows: "Within recent years this rail- 
 road, in common with many others in the United States, 
 has been extensively improved. Grades have been elimi- 
 nated, curves reduced, wood bridges replaced with those 
 of iron and stone, station buildings rebuilt, equipment 
 of all kinds greatly added to. All this has been rendered 
 necessary, partly by increase in traffic and partly by the 
 desire to handle this traffic in the cheapest possible man- 
 ner; and it adds very materially to the value and the 
 earning capacity of the property. Now, in so far as these 
 outlays are reasonably necessary to keep the property 
 
 " In one of the latest cases on this See Nashua & L. R. R. v. Boston 
 point in the State courts it is held & L. R. R., 136 U. S. 356, 34 L. ed. 
 that the earnings of a railroad com- 363, 10 Sup. Ct. 1004. 
 pany applied to the purchase of '* Re Advances in Freight Rates, 9 
 additional equipment, extension of I. C. C. Rep. 382. 
 its Unes, and other improvements, See also The St. Paul & P. S. Ac- 
 must be regarded as a part of the net counts, 29 I. C. C. 508, pointing out 
 earnings, and are not properly the impropriety of putting items 
 chargeable to operating expenses. plainly belonging to maintenance 
 Coal & Coke Ry. Co. v. Ccnley, 67 into capital, thereby making a better 
 W. Va. 129, 67 S. E. 613. showing in income. 
 [304] 
 
Operating Expenses [ § 361 
 
 up to its former standard, or perhaps to even a higher 
 standard of operation, they are properly a part of the oper- 
 ating expenses of the road, but when they add to the 
 earning capacity of the property, and therefore to its 
 value, they are in the nature of a permanent improve- 
 ment. Assimaing that the stockholder is only entitled to 
 exact from the pubhc a certain amount for the perform- 
 ance of the service, he clearly has no right to both receive 
 that amount in dividends and add to the productive value 
 of his property." 
 
 § 361. Betterment out of income. 
 
 In the famous Rate Advance Cases of 1910, it was 
 contended that rates should be enough to enable carriers 
 not only to pay their current operating expenses, their 
 fixed charges, a reasonable dividend, and to maintain their 
 properties at the present state of efficiency, but also to 
 make improvements and additions to those properties of 
 a permanent character. Those who opposed an increase 
 in the rates answered that improvements of this character, 
 which add to the permanent value of the property, ought 
 not to be paid from the current returns of the railroad, 
 but should rather be made out of new capital. But the 
 Commission, pointing to the recent decisions, which have 
 not been considered, said that it would appear that both 
 the Court and the Commission were committed to the 
 proposition that in fixing a fair return upon railroad prop- 
 erty, for the purpose of determining whether a given ad- 
 vance is reasonable, the railway ought not to treat as a 
 part of its operating expenses the cost of permanent im- 
 provements or extensions; and this must of necessity 
 mean that the rates should not be sufficient to allow both 
 the payment of dividends to stockholders and interest 
 to bondholders and an additional sum for the purpose of 
 improving and increasing the value of the property. 
 Theoretically, this would seem to be just. Therefore, it 
 must be realized that generally speaking the pohcy of the 
 20 [ 305 ] 
 
§ 362 ] Railroad Rate Regulation 
 
 Commission now seems to be that each generation may 
 well be required to bear its own burden, and the stock- 
 holder should not obtain both an adequate dividend upon 
 his stock and an addition to the value of his property.*^ 
 
 Topic C. Depreciation Requirements 
 
 § 362. Allowance for depreciation. 
 
 In general an annual charge to meet the depreciation 
 in the value of the plant by use seems proper. This is 
 again something which cannot be decided by general rules 
 as to a standard percentage, but is a matter to be de- 
 termined by careful investigation into the character of 
 the particular plant.^" It is now seen that the question 
 of depreciation is too difficult for offhand estimation. 
 The courts have, as yet, usually contented themselves 
 with saying that some fair per cent should be allowed. 
 Undoubtedly, in the future, such expert evidence of the 
 amount of the probable depreciation in the particular 
 plant will be relied upon. Concrete viaducts, for example, 
 apparently suffer a very slight depreciation, whUe a rail- 
 road equipment depreciates comparatively fast. The prob- 
 abilities are that sufficient allowance is not being made 
 for the physical depreciation that the usual equipment 
 used in most public services undergoes, to say nothing of 
 the intangible fall in the value of the present equipment 
 due to change of fashion. A well-conducted company may 
 indeed see to it that provision is made for the renewal 
 of equipment which is obviously deteriorating; but few 
 indeed are making imder present conditions provision 
 against the slow but sure depreciation of the plant as a 
 whole. Now that it is becoming recognized in the de- 
 
 *° Advances in Rates, Eastern ™ See Long Branch Commission v. 
 
 Case, 20 I. C. C. 243. Tintum Manor Water Co., 70 N. J. 
 
 See also the Five Per Cent Cases of Eq. 71, 62 Atl. 474. 
 
 1914, showing that the Commission See also Wilkes-Barre v. Spring 
 
 is stiU disinclined to permit earnings Brook W. Co., 4 Lack. L. News, 
 
 to be made to go into betterments 367. 
 of the property. 
 
 [306] 
 
Opebating Expenses [ § 363 
 
 cisions that such allowance is a proper operating cost, 
 more attention will doubtless be paid to this vital matter.^^ 
 
 § 363. Types of depreciation. 
 
 It is the theory of the Commission that the accoimts of 
 cost of construction should contain no factor of obsolescence; 
 when a thing goes out of sfervice, its value should be writ- 
 ten off on the books. There are various types of depre- 
 ciation which must be dealt with in connection with every 
 enterprise of the character under discussion. The phys- 
 ical depreciation such as the wearing out of equipment is 
 obvious.''^ Indeed, depreciation of this sort can be almost 
 exactly determined by those of experience in the re- 
 spective lines. Then there is at the other extreme, func- 
 tional depreciation due to the supersedure of equipment, 
 which is still physically fit to do the work for which it 
 was designed. But no one can tell with any confidence 
 what per cent of risk there is from year to year of develop- 
 ments in a given art, which will make it necessary to scrap 
 existing equipment. What it would mean to the accounts 
 of the railroads to have to throw away passenger cars which 
 still have perhaps twenty years of estimated life and sub- 
 stitute steel equipment, is something which it would be 
 staggering for them to face. A certain obsolescence is to be 
 looked for, however, and an allowance should be granted 
 for making it good. But that changes are likely to affect 
 all parts of the system equally is as improbable as that 
 all parts of the equipment should have imiform wear." 
 
 " See Twitchell v. Spokane, 55 ance for depreciation was made by 
 
 Wash. 86, 104 Pac. 150, 24 L. R. A. the practices of these companies in 
 
 (N. S.) 290. substituting by purchases out of in- 
 
 See also Grand Haven v. Grand come new equipment, to take the 
 
 Haven W. W., 119 Mich. 652, 78 place of those discarded. 
 
 N. W. 890. " See the Five Per Cent Cases of 
 
 "* Re Advances in Rates, Eastern Aug. 2 and Dec. 18, 1914. 
 
 and Western Cases, 20 I. C. C. 243, See also the discussion in the St. 
 
 304. Paul & P. S. Accounts of the impro- 
 
 See also the inquiries made in the priety of charging as depreciation of 
 
 New England Investigation, 27 I. C. rolhng stock only 1 per cent. 
 C. 384, as to whether proper allow- 
 
 [307] 
 
§§ 364, 365 ] Railroad Rate Regulation 
 
 § 364. Authorities refusing to allow depreciation. 
 
 There are, however, a few cases in the State courts which 
 refuse any allowance for depreciation among the annual 
 charges; but the matter of depreciation has been in late 
 years so well understood that these cases have no impor- 
 tance to-day.^* In one case the argument was this: "We 
 see no reason why plaintiff, in addition to operating ex- 
 penses, repairs, and other ordinary charges, should be 
 allowed to reduce the apparent profits by deductions for 
 a restoration or rebuilding fund. The setting aside of 
 such a fund may be a good business policy, and, if the 
 company sees fit to devote a portion of its profits to that 
 purpose (though as we understand the record, no such 
 fimd has yet been created), no one can complain; but it is 
 in no just sense a charge affecting the net earnings of the 
 works. To hold otherwise is to say that the public must 
 not only pay the reasonable and fair value of the services 
 rendered, but must, in addition, pay the company the 
 full value of its works every 40 years — the average period 
 estimated by plaintiff — for all time to come." ^^ The 
 answer to this line of argument plainly is that those who 
 devote their property to the service of the public should be 
 fairly assured that not only are they to have the return 
 on their investment which they would get elsewhere, but 
 that their capital will at all times be secured from impair- 
 ment. 
 
 § 365. Renewal of equipment to offset depreciation. 
 
 The equipment of the road must be renewed from time 
 to time; and an expenditure of the proper proportionate 
 amount in each year for new equipment is a proper annual 
 charge. So in Milwaukee Electric Railway and Light 
 Company v. Milwaukee,'" it was held proper to buy yearly 
 
 " Redlands, L. & C. D. Water Co. Cedar Rapids, 118 Iowa, 234, 91 
 
 V. Redlands, 121 Cal. 363, 53 Pac. N. W. 1081. 
 
 791. ™87 Fed. 577. If a company in 
 
 '' Cedar Rapids Water Co. v. setting aside funds collected for de- 
 
 [308] 
 
Operating Expenses [ § 365 
 
 and charge to annual expenses a sufficient number of cars, 
 with motors and complete electrical equipment, to keep 
 up the necessary standard of equipment. It may aid one 
 to appreciate the nature of the problem and the method 
 of its solution to cite from the expert testimony adduced 
 in that case and adopted by the court: "In reference to 
 the element of depreciation, the witness Beggs gives the 
 following explanation: 'I think experience has demon- 
 strated that the utmost life that can be expected from the 
 best roadbed that can be laid to-day would be, at the out- 
 side, ten or twelve years, when it would have to be almost 
 entirely renewed. The Milwaukee Company is in that 
 condition to-day, because of the different periods that 
 their track went down, and due to the fact that it was 
 not all put down at one time, and it must now of necessity 
 commence to lay about 12 miles of track annually, being 
 about one-twelfth of its total mileage; and will be required, 
 whether they wish to or not, to lay that amount annually 
 hereafter, and will thereby be keeping their tracks fairly 
 up to the standard. The same applies, I might say, to 
 the equipment. In my estimate I have calculated that 
 the Milwaukee Company must do this year, which, as a 
 matter of fact, it is doing, what it did last year, — in other 
 words, put on not less than 20 of the most modern, best- 
 constructed equipments, thereby keeping its standard 
 up to the minimum as it has now, of 240 equipments; be- 
 cause I think it is fair to assmne that the average life of 
 the double equipment, taken as a whole, will not exceed 
 twelve years, the life of the motor being somewhat less 
 than that, and that of the car we hope may exceed it pos- 
 sibly several years, — I mean the car bodies, but that, 
 in the main, we hope that we will get an average life of 
 twelve years out of them. So, taking 20 equipments an- 
 
 preciation beyond current replace- and the company should not expect 
 
 ments immediately necessary invests a profit thereon as for capital devoted 
 
 them in its own plant, these items, it to the service of the public, 
 seems, should be separately handled 
 
 [309] 
 
§ 366 ] Railroad Rate Regulation 
 
 nually, you would keep to your standard of 240 equipments, 
 which is absolutely necessary to maintain — to operate — 
 the Milwaukee Street Railway. I mean cars complete, 
 with motors and complete electrical equipment.' " '''' 
 
 § 366. Fund to repair depreciation. 
 
 This line of argument is well met by that advanced by 
 Sir George Jessel, Master of the Rolls, in the case of Davi- 
 son V. Gillies.'* The by-laws of a tramway company re- 
 quired a "contingencies fund" to be set aside before the 
 payment of dividends; and the court held this proper: 
 "A tramway company lays down a new tramway. Of 
 course the ordinary wear and tear of the rails and sleepers, 
 and so on, causes a sum of money to be required from 
 year to year in repairs. It may or may not be desirable 
 to do the repairs all at once, but if at the end of the first 
 year the line of tramway is still in so good a state of repair 
 that it requires nothing to be laid out on it for repairs in 
 that year, still, before you can ascertain the net proJ&ts, a 
 sum of money ought to be set aside as representing the 
 amount in which the wear and tear of the line has, I may 
 say, so far depreciated it in value as that sum will be re- 
 quired for the next year or next two years. It appears 
 to me that you can have no net profits unless this sum 
 has been set aside. When you come to the next year, or 
 the third or fourth year, what happens is this: As the line 
 gets older the amount required for repairs increases. If 
 you had done what you ought to have done, that is, set 
 aside every year the sum necessary to make good the wear 
 and tear in that year, then in the following years you would 
 have a fund sufficient to meet the extra cost. Where, 
 however, the line had worn out without a proper fund 
 
 " It may be said here in passing as capital added, tlie cost of the 
 that the courts have supported the superseded property shall be written 
 requirements of the Commission that ofJ as depreciation. Kansas City So. 
 while so much of the renewal as rep- Ry. v. United States, 231 U. S. 423, 
 resents betterment may be treated 34 Sup. Ct. 125. 
 
 " 16 Ch. D. 347n. 
 
 [310] 
 
Operating Expenses [ § 367 
 
 having been provided for repairs, it was held that the whole 
 amount necessary could not be charged to a single year, 
 but only the proportionate amount." '^ 
 
 § 367. Capitalization of past depreciation. 
 
 That depreciation is an actual cost to be included in 
 the annual charges of a corporation is shown in a strik- 
 ing manner in a late decision of the United States Su- 
 preme Court ^ to the effect that it must be provided for 
 from year to year out of annual earnings, and cannot be 
 ignored for a long period and then capitalized. The prob- 
 lem as presented to the court, and the solution of it, is 
 so well stated in the opinion of Mr. Justice Moody that 
 to paraphrase it would be inexcusable. "Before coming 
 to the question of profit at all the company is entitled 
 to earn a sufficient sum annually to provide not only for 
 current repairs but for making good the depreciation and 
 replacing the parts of the property when they come to the 
 end of their life. The company is not bound to see its 
 property gradually waste, without making provision out 
 of earnings for its replacement. It is entitled to see that 
 from its earnings the value of the property invested is 
 kept unimpaired, so that at the end of any given term 
 of years the original investment remains as it was at the 
 beginning. It is not only the right of the company to 
 make such a provision, but it is its duty to its bond and 
 stockholders, and, in the case of a public service corpora- 
 tion at least, its plain duty to the public. If a different 
 course were pursued the only method of providing for 
 replacement of property which has ceased to be useful 
 would be the investment of new capital and the issue of 
 new bonds or stocks. This course would lead to a con- 
 stantly increasing variance between present value and bond 
 
 " A railroad may properly accumu- Rates, Western Case, 20 I. C. C. R. 
 late funds to meet obsolescence, un- 307. 
 
 less this charge is taken care of in '" Knoxville v. Knoxville Water 
 
 maintenance. In re Advances in Co., 212 U. S. 1, 53 L. ed. 371, 29 
 
 Sup. Ct. 148. 
 
 [311] 
 
§ 368 ] Railroad Rate Regulation 
 
 and stock capitalization — a tendency which would inevitably 
 lead to disaster either to the stockholders or to the public, 
 or both. If, however, a company fails to perform this 
 plain duty and to exact sufficient returns to keep the in- 
 vestment unimpaired, whether this is the result of un- 
 warranted dividends upon over-issues of securities, or of 
 omission to exact proper prices for the output, the fault 
 is its own. When, therefore, a public regulation of its 
 prices comes under question the true value of the property 
 then employed for the purpose of earning a return cannot 
 be enhanced by a consideration of the errors in manage- 
 ment which have been committed in the past."*^ 
 
 § 368. Payments into sinking fund. 
 
 The suggestion is made in one case that a provision 
 out of current earnings for a sinking fund is proper. In 
 Brymer v. Butler Water Company *^ already quoted, it 
 was said that out of income might be set aside a "suitable 
 sinking fund for the payment of debts." On the other 
 hand, in the recent case of Houston & Texas Central Rail- 
 way Company v. Storey,*' it was held that a railroad com- 
 pany would not be allowed to earn an amount sufficient 
 to provide a sinking fund for the discharge of its indebted- 
 ness in addition to paying the interest thereon. It is in- 
 deed very questionable how far it is true that a public 
 service company should be allowed to include in its annual 
 charges a percentage sufficient to provide for the redemp- 
 tion of its bonds in so far as these bonds represent cost 
 of construction.** To adopt such a policj^ would make 
 the generation during which these bonds are being paid 
 off buy the railroad to that extent, and yet after that it 
 
 *' Where a public service corpora- Coram, v. Cumberland Telephone 
 
 tion raises more money in a particular Co., 212 U. S. 414, 53 L. ed. 577, 29 
 
 year than is required for actual de- Sup. Ct. 357. 
 
 preciation, it cannot carry the excess '^ 179 Pa. St. 231, 36 Atl. 249. 
 
 to capital for the purpose of estimat- *' 149 Fed. 499. 
 
 ing the amount on which it is entitled '* See Dan Diego Water Co. v. San 
 
 to pay dividends. Louisiana Railroad Diego, 118 Cal. 556, 50 Pac. 633. 
 
 [312] 
 
Operating Expenses [ § 369 
 
 would be hard to say that the next generation could de- 
 mand carriage free of fixed charges. The startling truth 
 seems to be, therefore, that a public service company 
 should not any more expect to pay off its bonded indebted- 
 ness than to return the subscribers the subscriptions on 
 their stock. The bonds should be refunded as they fall 
 due, the interest remaining a fixed charge; and the stock 
 should remain outstanding, only reasonable dividends be- 
 ing distributed to it. What the law secures is a return on 
 the capital invested, not a return of it. But if the bond 
 issue represents some expenditure not resulting in ever- 
 lasting addition to the plant utilized, this may properly 
 be provided for by an installment purchase. Such fi- 
 nancial arrangements as equipment bonds are justifiable 
 whereby the amount which the bond issue represents is 
 sunk by periodical payments *^ with the same result as 
 an installment purchase. 
 
 § 369. Amortization of franchise rights. 
 
 Where a franchise for a limited period is granted to a 
 public service company, it may perhaps be proper to de- 
 duct from gross income a sufficient amount to sink the 
 value of a secured franchise which will disappear at the 
 end of the period, since the value of the plant is annually 
 depreciated by that amount. In Milwaukee Electric 
 Railway v. Milwaukee,*" recently cited, the court said: 
 "There is much force in the argument of counsel that con- 
 sideration should also be given to the factor of deprecia- 
 tion by amortization of franchises, as all the franchises in 
 question terminate in the year 1924." In certain of the 
 schemes now much in favor in bargaining between a mu- 
 nicipality and a public service company, it is provided 
 that the works shall be constructed at the expense of the 
 public service company and operated by it as its own 
 for a fixed period, at the end of which time the subway, or 
 
 «' Compare Milwaukee Electric Ry. ^ 87 Fed. 577. 
 
 Co. V. Milwaukee, 87 Fed. 577. 
 
 [313] 
 
§ 370 ] Railroad Rate Regulation 
 
 whatever it may be, thus becomes the property of the 
 municipaUty free of payment. It is obvious that in such 
 a case the public service company must be allowed to 
 sink the cost of such works from sums set aside from an- 
 nual earnings by some process. 
 
 Topic D. Operations of Consolidated Properties 
 
 § 370. Complications in case of systems. 
 
 If the business carried on by the public service company 
 covers a large territory, the difficult question arises whether 
 the system is to be taken as a whole or whether each local- 
 ity is to be taken by itself. Additional compUcations 
 are added to the problem when it is shown that the present 
 system is the result of a consolidation, more or less inte- 
 grated, of several properties; then the question becomes 
 whether each of these original constituents is to be taken 
 by itself in rate regulation or whether all are to be taken 
 together as before. The consideration of this matter of 
 the consolidation of companies belongs of course to those 
 who are writing of the law of corporations in general. Still 
 it may be pointed out that the present railway systems 
 are almost invariably consolidations of various constit- 
 uent companies, and that these constituent companies 
 are almost always left in existence after the consolidation. 
 (1) The commonest form of consolidation is perhaps by 
 a long term lease given by the constituent road to the 
 operating company. (2) Another equally usual is for the 
 consolidating company to hold all or part of the stock 
 of the constituent companies. There are, of course, two 
 other types of combination, one less integrated than either 
 of those just mentioned, the other more consolidated than 
 either. (3) Thus the only bond between the railroad 
 companies may be some traffic agreement or pooling ar- 
 rangement whereby each company is left as an independ- 
 ent unit; (4) there may be complete consolidation, the new 
 corporation taking over the constituent companies out- 
 [314] 
 
Operating Expenses [ § 371 
 
 right, these companies going out of existence.*' It is ob- 
 vious that the problem proposed for discussion in this 
 chapter does not arise in the third and fourth types de- 
 scribed, since, in the third, each road still remains the 
 operating unit, while in the fourth it is plain that the new 
 company is the sole operating unit. Whatever difficulties 
 there may be will occur in the first and second cases. Like 
 most questions of rate regulation, this question may arise 
 in one of two ways: one aspect of it will be whether a rail- 
 road company operating leased lines or held lines is justi- 
 fied in treating its system as a whole; the other side of the 
 question will be whether such an operating company can 
 be required at all to consider its system as a whole in making 
 rates.** 
 
 § 371. Divisions as integral parts of the whole system. 
 
 It must, however, be insisted upon as the usual solution 
 of this problem that the railway system shall be treated 
 as an entirety. By this conception every division is as 
 much an integral part of the whole system as the different 
 portions of the main line are. And the contention is that 
 it is not proper to segregate a division and fix rates for it 
 upon the basis of its own finances taken by themselves, 
 although some slight scope may be given to such considera- 
 tions. This general principle was well expressed, and the 
 reasons establishing it were well set forth, in an early pro- 
 
 ^ The general rule is that systems waukee, 87 Fed. 577; Interstate 
 
 shall be treated as units. Union Pac. Com. Comm. v. Louisville & N. R. R., 
 
 Ry. V. U. S., 99 U. S. 402, 25 L. ed. 118 Fed. 613. 
 
 274, reversing 13 Ct. of CI. 401; '^ But see Chicago & G. T. Ry. v. 
 
 Chicago, Milwaukee & St. P. Ry. v. Wellman, 143 U. S. 339, 36 L, ed. 176, 
 
 Tompkins, 176 U. S. 167, 44 L. ed. 12 Sup. Ct. 400, affirming s. c, 83 
 
 418, 20 Sup. Ct. 336, affirming 90 Mich. 592, 47 N. W. 489; San Diego 
 
 Fed. 363; Minneapolis & St. L. Ry. L. & T. Co. v. National City, 174 
 
 V. Minnesota, 186 U. S. 257, 46 L. ed. U. S. 739, 43 L. ed. 1154, 19 Sup. Ct. 
 
 1151, 22 Sup. Ct. 901, affirming 80 804, affirming 74 Fed. 79; Louisville 
 
 Minn. 191, 83 N. W. 60; Ames v. & N. Ry. v. Brown, 123 Fed. 946; 
 
 Union Pac. Ry., 64 Fed. 165; Atlantic Steenerson v. Gt. N. Ry., 69 Minn. 
 
 & P. Ry. V. U. S., 76 Fed. 186; MU- 353, 72 N. W. 713. 
 waukee Electric Ry. Co. v. Mil- 
 
 [315] 
 
§ 372 ] Railroad Rate Regulation 
 
 ceeding before the Commission, a significant extract from 
 which is subjoined; speaking of an outlying division which 
 was part of a consolidated system it was said:*' "They 
 are feeders to the main lines and help swell the revenues 
 of those lines. Their profitableness is not to be measured 
 solely by what they earn themselves, but by the increase 
 of business and revenue they bring to the main lines. For 
 book-keeping purposes it is proper enough to keep their 
 accounts separately, but for their usefulness to the system 
 of which they form a part, these accounts are slight evi- 
 dence and these feeders are entitled to a much larger credit. 
 A selected fractional pari: of any great railroad might be 
 taken and a showing made by an apportionment of earn- 
 ings and cost of operation and fixed charges, that it is 
 unprofitable, but this would furnish no indication of its 
 value and profitableness as an important part of the whole 
 property. For pm-poses of rates the several auxiliary roads 
 should not be looked upon as wholly independent lines, 
 which may separately establish rates, looking only to a 
 satisfactory ledger account of each separate road. These 
 subordinate and branch roads are, for all purposes of con- 
 trol and operation, parts of one great system." '" 
 
 § 372. Unprofitable portions of the line not considered. 
 
 In Steenerson v. Great Northern Railway " the court 
 considered at length the subject of unprofitable lines; and 
 held that the profitable portions of the system could not 
 be compelled to pay the loss on lines built through a newly 
 and sparsely settled country. The reasoning of Mr. Jus- 
 
 " Per Commission in Delaware one commodity, is not the proper 
 
 State Grange v. New York, P. & N. basis upon which to measure the just- 
 
 Ry., 3 Int. Com. Rep. 554. ness of such rate. Board of Trade of 
 
 ^ To divide a raiboad system into Winston-Salem v. N. & W. Ry. Co., 
 
 its constituent elements and to re- 16 I. C. C. 12. 
 
 quire that each shall show a surplus <" 79 Minn. 353, 72 N. W. 713. 
 
 commensurate with that yielded by See also Chicago & G. T. Ry. v. 
 
 the biisiness of the system as a whole Wellman, 143 U. S. 339, 36 L. ed. 176, 
 
 in j\istification of a particular rate on 12 Sup. Ct. 400. 
 
 [316] 
 
Operating Expenses [ § 373 
 
 tice Canty is as follows: "If," he said, "the road was profit- 
 able a certain reasonable rate would be fixed. If then 
 a new and unprofitable extension were made, and the 
 accounts covered the whole system, the rates on the older 
 portion of the road would necessarily be raised, and that 
 portion would bear the burden of the new extension. But 
 why should the older portion of the line bear a loss due 
 to the mistaken management of the company? A por- 
 tion of a line that is not self-supporting is not a feeder, 
 but an incumbrance; and in determining what are reason- 
 able rates on the rest of the line or system, any State has 
 a right to reject such portion from the line or system. Of 
 course, in rejecting the same all benefit to the rest of the 
 line or system from traffic passing over such portion must 
 also be rejected, and nothing can be allowed to the rest of 
 the line or system on such traffic, except the operating ex- 
 penses on the same, including the additional wear and tear 
 on the rest of the road caused by such traffic. Whether 
 this rule would apply where such a portion of a line or 
 system ceased to be self-supporting by reason of some 
 temporary cause, such as an unusual droiight or a pes- 
 tilence, we need not consider." It is perhaps fair to point 
 out that in a later portion of the same opinion this radical 
 court, apparently inconsistently, expressed the opinion 
 that the whole system should be entitled to share the 
 prosperity of each constituent part of it.^^ 
 
 § 373. Systems considered as wholes. 
 
 Specific illustrations of the various matters which have 
 been discussed under this topic may help to an apprecia- 
 tion of the general problem. For example, in one proceed- 
 ing, not long ago, it was held that cost of a bridge ought 
 
 =2 Assigning costs of system as be- involves a complicated division of ac- 
 
 tween several divisions thereof, divid- counts, and gives only suggestion as 
 
 ing passenger and freight costs, sep- to actual cost. Louisville & Nash- 
 
 arating cost of moving coal and coke ville Raih-oad Coal and Coke Rates, 
 
 as distinguished from other freight 26 I. C. C. 20. 
 
 [3171 
 
§ 374 ] Railroad Rate Regulation 
 
 not to be charged to the traffic on one section of the road.^^ 
 In a later case, it was held that the fact that the line in 
 question, although separately operated, was by stock 
 ownership a part of the Rock Island system could not be 
 ignored, since it afforded an opportunity for shorter hauls, 
 and reduced operating expenses, with correspondingly 
 increased revenue per ton-mile.^* A road is built and 
 operated as a whole; and local rates are not to be made 
 altogether with reference to difficulties of each particular 
 portion, although heavy grades and tunnels add to cost 
 of operation.^' The Pennsylvania lines west of Pittsburg 
 are. controlled or operated by the Pennsylvania Com- 
 pany, the entire stock of which is owned by the Pennsyl- 
 vania Railroad; and they may have terminal arrangements 
 which they need not share with other lines.^® The Com- 
 mission recognizes that it is just and reasonable for two 
 or more independent roads, not parts of same system, 
 making up a through line, to charge more for the through 
 transportation than would be deemed reasonable for trans- 
 portation, if performed wholly by a single road.'' But 
 where there is a system in question the profit on a particu- 
 lar division is not controlling, as the benefit to other por- 
 tions of the system may much more than offset any loss 
 upon the particular division.^^ 
 
 § 374. Treatment of branch lines. 
 
 The typical railroad system has trunk lines with ramify- 
 ing branches. To a certain extent it is plain that the main 
 lines with their denser traffic can be operated at less cost 
 per ton per mile than the lateral branches. At the same 
 
 »3 Traffic Bureau of Merchants' Ex- « 28 I. C. C. 621 . 
 
 change of San Francisco v. S. P. Co., " Sheridan Chamber of Commerce 
 
 19 I. C. C. 259. V. C, B. & Q. R. R. Co., 26 I. C. C. 
 
 "Kansas-Iowa Brick Rates, 28 638. 
 
 I. C. C. 285. »« Louisville & N. C. & C. Rates, 
 
 »5 Traffic Bureau of Merchants' Ex- 26 L C. C. 20. 
 change of San Francisco v. S. P. Co., 
 19 I. C. a 259. 
 
 [318] 
 
Operating Expenses [ § 375 
 
 time, if in a total haulage the distance upon the branch 
 is short relatively to the distance upon the main line, it 
 may not be unjustifiable to make the same proportionate 
 rate for the whole distance. This was one of the many 
 points brought out in. a case before the Commission con- 
 cerning rates upon milk from the tributary territories 
 about New York brought daily to the city itself.^" In 
 that opinion it was said: "Ordinarily, the branch line 
 traflBc should pay more, but most of the branch lines in 
 the nearby section are short, all of them have heretofore 
 been given main line rates on this traffic, and some of 
 them pass through main line stations of other roads or 
 lead to or near the Hudson River where the traffic is af- 
 fected by the competition of a line of steamers. Again, 
 with an additional charge over main line rates from nearby 
 branch line points, applying the same rate on main and 
 branch lines in the distant region, which the long-distance 
 carriers will doubtless deem necessary, would hardly be 
 consistent. In view of these facts, we think that the group 
 distances and rates for this traffic should be made to apply 
 on branch as well as on main lines." ^ 
 
 § 376. Constituent roads operated under separate charters. 
 It is held in some cases that the fact that the constit- 
 
 " Milk Producers' Protective Assn. ' See also Northwestern la. Grain 
 
 V. Delaware, L. & W. Ry., 7 I. C. C. & S. Assn. v. Chicago & N. W. Ry., 2 
 
 Rep. 92. Int. Com. Rep. 431. 
 
 That a given point, otherwise sim- What might perhaps have been 
 ilarly circumstanced, is located on a proper, as between companies op- 
 branch line, while other points enjoy- erating separate and distinct short 
 ing lower rates are located on main lines, may become unreasonable and 
 lines, does not create dissimilarity of unjust when both are absorbed by a 
 circumstances. Santa Rosa Traffic large system, which serves an exten- 
 Asso. V. S. P. Co., 24 I. C. C. 46. sive territory. Black Mountain Coal 
 
 Transportation conditions between Land Co. v. So. Ry., 15 I. C. C. 286. 
 
 main-line points are materially dif- The Commission is inclined to the 
 
 ferent from those prevailing at doctrine that branch lines are op- 
 
 branch-hne points. Board of Trade erated as part of a great system. Bil- 
 
 of Winston-Salem v. N. & W. Ry., lings Chamber of Commerce v. C, B. 
 
 26 I. C. C. 146. & Q. R. R., 19 I. C. C. 71. 
 
 [319] 
 
§ 375 ] Railroad Rate Regulatton 
 
 uent roads still preserve their original charters and are 
 theoretically operated under them is sufficient to justify 
 the requirement that each shall be treated by itself in rate 
 regulation. Thus in one case,^ where the propriety of a 
 reduction in rates ordered by the railroad commission of 
 Florida was in question, it was shown that the Pensacola 
 & Atlantic division of the Louisville & Nashville Railroad 
 System was in reality a separate corporation. It was 
 shown that the rates enforced would not give an adequate 
 return upon the Pensacola & Atlantic Railroad itself, 
 although the Louisville & Nashville System was shown 
 to be profitable. Upon these facts Judge Pardee granted 
 an injunction to prevent the enforcement of these rates, 
 saying in substance: "The fact that a line of railroad is 
 operated in connection with other lines owned by the same 
 company, but under separate charters, whereby the earn- 
 ings of such line are increased and its operating expenses 
 reduced, does not prevent its being considered as a separate 
 and independent line for the purpose of determining the 
 reasonableness of rates thereon, fixed by the State; full 
 consideration of the joint operation being given when the 
 road is credited for the increased business and reduced 
 expenses." ' 
 
 - Louisville & N. R. R. Co. v. em Idaho Commercial Clubs v. O. S. 
 
 Brown, 123 Fed. 946. L. R. R., 18 I. C. C. 562. 
 
 Where traffic originates upon a ' Compare State ex rel. v. Seaboard 
 
 branch Une the main line should ac- A. L. Ry., 48 Fla. 129, 37 So. 314. 
 
 cept for its haul from the junction Commission rates are usually the 
 
 point something less than it receives same for all lines, both main lines 
 
 upon business originating at the and branches. It is fair that the 
 
 junction point. R. R. Com'rs of Fla. main lines should in a degree con- 
 
 V. A. C. L. R. R. Co., 28 I. C. C. 356. tribute to the support of the branch 
 
 The fact that a rate is made ap- line, for the branch-line business when 
 
 plicable to certain destinations, irre- it reaches the main line is surplus 
 
 spective of whether most of them are traffic from which there is a larger 
 
 located on branch lines, does not profit. Receivers & Shippers Ass'n 
 
 justify an unreasonable rate to any of of Cincinnati v. C, N. O. & T. P. 
 
 the destinations involved, but the Ry., 18 I. C. C. 440. 
 
 reasonableness of the rate is to be The contention that such rates 
 
 tested as a whole. League of South- should be applied as would be rea- 
 
 [320] 
 
Operating Expenses [ §§ 376, 377 
 
 § 376. Rent of leased portions. 
 
 Where a bona fide lease of one road to another is made, 
 the operating road is entitled to include the rent of the 
 leased road in its operating expenses. It is the annual 
 expense of providing its appliances for carrying on its pub- 
 lic business, and as such is a proper annual charge against 
 gross income. The rent must be agreed upon in good 
 faith; otherwise it would be in the power of the owners 
 of a railroad to increase the annual charges, by successive 
 leases, to such an extent that any rate would be reason- 
 able. But granting the good faith of the lease and the 
 reasonableness of the rent, it is a proper element of charge.* 
 A railroad is entitled to a fair return upon the value of 
 the property devoted by it to the public use; but it is not 
 entitled to have that property paid for by the public, and 
 cannot therefore demand unreasonably high rates on the 
 ground that one of the railroads leased by it will request 
 permanent improvements before the expiration of the 
 lease, the money for which must come from the income 
 from operation.^ 
 
 § 377. K rental becomes unjustifiable. 
 
 According to the Minnesota doctrine by which the re- 
 production value of the road is the proper basis of charge, 
 the operating line cannot charge to annual operating ex- 
 penses the agreed rental of a leased line, even though it 
 was reasonable at the time the lease was made, if it is 
 now higher than is justified by the present rate of income 
 and reproduction value of the leased road. "If the amount 
 of such fixed charges exceed the amount of what is a 
 reasonable income on the cost of reproducing the road, the 
 patrons of the road should not be required to pay the ex- 
 
 sonable for the average railroad in * 78 Fed. 236. 
 
 that section is untenable in itself ^ Receivers & Shippers Ass'n of 
 
 without reference to the system as a Cincinnati v. C, N. O. & T. P. Ry., 
 
 whole. Acme Cement Plaster Com- 18 I. C. C. 440. 
 
 pany v. C. & N. W. Ry., 18 I. C. C, 
 
 105. 
 
 21 [ 321 ] 
 
§ 377 ] Railroad Rate Regulation 
 
 cess." « On the other hand, if this theory should be 
 followed, it would seem that the company should have 
 the commercial profit of an advantageous lease. And 
 there would be strong ground for urging that the com- 
 pany should have the profit of its trade: ' that is, if it had 
 a lease at 4 per cent on the value of the property, it might 
 claim the right to make 8 per cent on that value as a bonus. 
 
 ' Steenerson v. Gt. Northern Ry. ' Advance in Rates, Eastern Case, 
 
 Co., 69 Minn. 353, 72 N. W. 713. 20 I. C. C. 243. 
 
 [322] 
 
PART II— THE RATES IN PARTICULAR 
 CHAPTER IX 
 
 COST OF PARTICULAR SERVICE 
 
 § 380. Provisions of the Act. 
 381. Various theories as to rate making. 
 
 Topic A. Cost of Service as the Basis 
 
 § 382. Method of estimating cost of service. 
 
 383. Distribution of the burden. 
 
 384. Respect paid to the cost basis. 
 
 385. Cost of service the basic test. 
 
 386. Costs considered in comparative reasonableness. 
 
 387. Limitation upon the law of increasing returns. 
 
 388. Length of haul as a factor affecting a particular rate. 
 
 389. Modification of the principle of the length of haul. 
 
 390. Volume of traffic as a factor affecting the rate. 
 
 391. Increased volume of traffic causing increase of cost. 
 
 Topic B. Method of Determining Particular Costs 
 
 j 392. Proper proportions of total costs. 
 
 393. Apportionment of separable costs. 
 
 394. Allocation of joint costs. 
 
 395. Basis of the distribution. 
 
 396. Basis of the proportion. 
 
 397. Average rate per unit of service. 
 
 398. Recognition of the ton-mile cost basis. 
 
 399. Ton-mile cost basis not oppressive. 
 
 400. Argument for permitting disproportionate rates. 
 
 401. Authorities opposed to disproportion. 
 
 Topic C. Factors Modifying Average Cost 
 
 \ 402. Cost of service insufficient in itself. 
 
 403. Special conditions affecting cost. 
 
 404. Amount of service asked as a factor. 
 
 405. Effect of low average haul. 
 
 406. Local business peculiarly expensive. 
 
 407. Circumstances of particular service. 
 
 408. Divisions in sparsely populated territory. 
 
 [3231 
 
§ 380 ] Railroad Rate Regulation 
 
 § 409. Cost of handling business. 
 
 410. Proportionate rates always legal. 
 
 411. Relative reasonaibleness of rates. 
 
 Topic D. Proper Distribution of Costs 
 
 412. Law of decreasing costs. 
 
 413. Cost of service for different systems. 
 
 414. Cost of service for different parts of the same system. 
 
 415. Cost of service estimated from special expenditures. 
 
 416. Distance as a factor. 
 
 417. Amount of traffic as a factor. 
 
 418. Costs of special service. 
 
 419. Conditions affecting transportation costs. 
 
 420. Current theories as to relative rates. 
 
 421. Conclusion as to proportionate rate. 
 
 § 380. Provisions of the Act. 
 
 The requirements as to the reasonableness of rates in 
 section 1 of the original act are in general terms, as has 
 been seen, it being there stated simply that all rates 
 must be just and reasonable, every unjust and unreason- 
 able charge being prohibited and declared unlawful. 
 The idea of the Act plainly is that there are standards 
 already existing in the law by which the reasonableness 
 of a rate charged may be determined. Vague though 
 phrases in a statute may apparently be, yet they may well 
 have a definite meaning in the law; and by the prevailing 
 rule, when a given phrase has an accepted significance at 
 common law, it should be taken in that sense in interpret- 
 ing legislative enactments. In section 15, in giving the 
 Commission power to fix maximum rates, if the existing 
 charges are found unreasonable, the phrases used are 
 somewhat more definite. If the Commission finds any 
 individual or joint rates, classifications, regulations, or 
 practices whatsoever of such carrier or carriers subject to 
 the provisions of this Act are unjust or unreasonable or 
 unjustly discriminatory, or unduly preferential or prejudi- 
 cial or otherwise in violation of any of the provisions of 
 the Act, the Commission is authorized and empowered to 
 determine and prescribe what will be the just and reason- 
 [324] 
 
Cost of Particular Service [ § 381 
 
 able individual or joint rate or rates, charge or charges, 
 to be thereafter observed in such case as the maximum to 
 be charged, and what individual or joint classification, 
 regulation, or practice is just, fair, and reasonable, to be 
 thereafter followed, and to make an order that the carrier 
 or carriers shall cease and desist from such violation to 
 the extent to which the Commission finds the same to 
 exist. The requirement that rates must not only be 
 reasonable, but also cannot be discriminatory is discussed 
 at large in Chapter XIII. 
 
 § 381, Various theories as to rate making. 
 
 Various theories as to the making of particular rates are 
 still in vogue. Indeed, the first impression, which lasts 
 after much reading on the topic, is that where there is not 
 confusion upon the subject, there is disagreement. But ap- 
 parently the more lawyerlike persons would base all particu- 
 lar rates upon the cost of the service to the company, while 
 the more businesslike persons would make the universal test 
 the value of the service to the patron. Opportunists would 
 leave the making of rates to competition ; paternalists would 
 attempt to equalize the advantage of customers in making 
 rates. But, however various they may seem, these theories 
 as to the proper basis of rate making align themselves into 
 two opposed groups, the legal, which gives chief place to the 
 cost of service, and the economic, which makes the value 
 of the service the basis.^ There used to be these two 
 schools as to the whole schedule, one maintaining that the 
 total receipts which a public service company might take 
 was limited by law, the other one asserting that the cor- 
 porations were entitled to what they could get out of the 
 pubUc. This matter of the whole schedule has so long 
 been settled against economic freedom, and in favor of 
 
 *The carrier is entitled to ask a than the services are reasonably 
 
 fair return upon the value of prop- worth. Morgan Grain Co. v. Atlan- 
 
 erty devoted to public use; the public tic C. L. R. R., 19 I. C. C. 460. 
 is entitled to demand rates higher 
 
 [325] 
 
§ 382 ] Railroad Rate Regulation 
 
 legal restriction, that no one would reopen the controversy 
 with any hope of success. But still at the present time, 
 with all conceding that the gross earnings which a com- 
 pany may take are Umited by law in any given case to 
 a determinate amount, the economic school stUl persists 
 in saying that the company can get these gross receipts 
 by any distribution of the burden that it finds most ad- 
 vantageous.* 
 
 Topic A. Cost of Service as the Basis 
 
 § 382. Method of estimating cost of service. 
 
 In the preceding chapters the total amount of annual 
 receipts which the carrier is justified in taking from its 
 whole business has been discussed. These were, in brief, 
 all annual expenditures, including an allowance for de- 
 preciation requirements, and in addition the fair capital 
 charges for the year, arrived at by determining what would 
 be a reasonable return upon proper capitalization.^" A 
 railroad must get this total from its passenger traffic 
 and from its freight traffic. The first difficulty is to de- 
 cide what proportion should be contributed by the pas- 
 senger traffic and by the freight traffic respectively; then 
 the same difficulties remain in apportioning to each item 
 of traffic a fair share of the burden. It may be difficult, 
 if not impossible, to apportion to each portion of the traffic 
 its proportionate share of the fixed charges with any 
 degree of accuracy, but at the same time, there are cer- 
 tain items in the cost of performing a particular service 
 
 « There is no flexible limit of judg- 63; North Pork Cannel Coal Co. v. 
 ment, if all rates must be upon a A. A. R. R., 25 I. C. C. 241; Taylor 
 level of cost, and out of every dollar v. N. & W. Ry., 25 I. C. C. 613; 
 paid to the carrier must come a fixed Multnomah Lumber & Box Co. v. S. 
 amount of return for capital invested. P. Co., 25 I. C. C. 123; Union Tan- 
 In re Advances on Coal to Lake ning Co. v. S. Ry., 25 I. C. C. 112. 
 Ports, 22 I. C. C. 604. The Commission may not act on 
 
 "I The cost of operation is an ele- general impressions, but only on 
 
 ment to be considered in determining proof. Railroad Commission of 
 
 the reasonableness of a rate. In re Mont. v. No. P. Ry., 26 I. C. C. 
 
 Advances on Live Stock, 25 I. C. C. 407. 
 
 [326] 
 
Cost of Particular Service [ § 383 
 
 which should never be left out of account by a railway 
 management in making its rate for that service. Thus an 
 expert railway management ought to be able to estimate 
 with some degree of accuracy the particular expenditures 
 involved in moving a carload from one point to another — 
 wages, coal, oil and the like." 
 
 § 383. Distribution of the burden. 
 
 From the point of view of the carrier, as has been seen, 
 it is enough if the schedule as a whole yield a fair return 
 by way of profit. To the individual shipper, however, the 
 effect of the tariff as a whole is quite immaterial. ^^ He is 
 interested in a single rate only, that upon the goods 
 which he is shipping; and from his point of view the im- 
 portant thing is that such goods shall pay no more than 
 a reasonable part of the whole necessary return to the 
 carrier. ^^ It is necessary, therefore, to consider next the 
 rules for the proper distribution of the whole burden of 
 the charge upon the individual articles carried." To look 
 at the problem from another point of view, the entire 
 schedule of rates having been established, so that the pro- 
 portion is properly fixed, it will be easy to test the validity 
 of the rates. The amount to be raised by the entire 
 schedule of rates having been determined, according to 
 the principles already examined, the sum of all the par- 
 ticular rates must equal that amount; and this sum is 
 
 " The Commission often goes into which are both relatively and in- 
 
 an analysis of the cost of a particular herently reasonable. Coke Producers 
 
 service. See for instance: Detroit Ass'n v. B. & O. Ry., 27 I. C. C. 125. 
 
 Switching Charges, 28 I. C. C. 494; ^' Rates should be so adjusted as 
 
 Waverly Oil Works v. R. P. R., 28 to be neither too high nor too low 
 
 I. C. C. 621; R. R. Com'rs of Fla. relatively. Lumber Rates from S.W., 
 
 V. S. Exp. Co., 28 I. C. C. 634; 29 I. C. C. 1. 
 
 National Syrup Co. v. C. & N. W. "All the expense going into the 
 
 Ry., 28 1. C. C. 673. performing of transportation, from 
 
 Cost figures must be more than whatever angle it is viewed, should 
 
 approximate. Youngstown S. & T. be taken into account in passing 
 
 Co. v. P. & L. E. Ry., 29 I. C. C. 428. upon rates. Standard Mirror Co. v. 
 
 "Shippers are entitled to rates Pa. Ry., 27 I. C. C. 200. 
 
 [327] 
 
§ 384 ] Railroad Rate Regulation 
 
 determined by adding the rates received on account of 
 the known traffic at each station." 
 
 § 384. Respect paid to the cost basis. 
 
 The Commission appreciates that it is not beyond the 
 range of possibiUty to approximate the cost of carrying 
 freight, as distinguished from passengers, over a certain 
 division, or even the carrying of a certain kind of freight, 
 when this constitutes a considerable portion of the whole 
 traffic over such division. ^^ Distance and ton-mile com- 
 parisons, although often helpful in reaching a conclusion 
 in respect to the reasonableness of rates, could not be 
 made the sole test, so as to deny consideration to many 
 other potent and controlling forces.^' The prevaihng view 
 seems to be that, while they are a factor in rate making, 
 per ton-mile results are not necessarily controlling.'^ 
 Merely because the per car-mile earnings on certain traffic 
 are higher than the average on all business does not 
 show the particular rates are unreasonable. '' The Com- 
 mission has held that improvements, which required 
 expenditure of large sums of money, and have added to 
 the efficiency of the service, and, therefore, to its value 
 to the commuters, are entitled to some recognition in de- 
 termining the reasonableness of increased commutation 
 rates. ^'' Conversely, if a carrier does not think it proper 
 to make improvements that will reduce cost of operation, 
 it cannot claim that it may raise rates, because cost ap- 
 proaches or overtakes revenue.^' The question of costs 
 is never ignored in passing upon rates; and a slight in- 
 crease in the cost of operation, therefore, does not justify 
 
 1* If this expense is due to costly '* Kansas-Iowa Brick Rates, 28 
 
 operation of inadequate facilities it I. C. C. 285. 
 
 will not be allowed. Switching at >' Ontario Iron Ore Co. v. N. Y. C. 
 
 Baltimore, 30 I. C. C. 581. & H. R. R. R., 30 1. C. C. 566. 
 
 '^ In re Advances on Coal to Lake , ™ Commutation Rate Case, 21 
 
 Ports, 22 1. C. C. 604. I. C. C. 428. 
 
 " Muskogee TraflSc Bureau v. " Louisville & N. C. & C. Rates, 
 
 A., T. & S. F. Ry., 17 I. C. C. 169. 26 I. C. C. 20. 
 
 [328] 
 
Cost of Particular Service [ § 385 
 
 an advance of 25 per cent on a low grade commodity.-' 
 A contention of carriers that increased operation costs 
 necessitated increased rates on certain commodities is not 
 supported by any logical inference that it is the rates on 
 the commodity in question which should be advanced, even 
 if the increased cost of operation over the system as a whole 
 is conceded.-' 
 
 § 385. Cost of service the basic test. 
 
 More and more, the Commission has been laying empha- 
 sis upon the cost of the service, as the element to be given 
 precedence in the determining of a rate. And it seems 
 clear that there must finally be an intimate relation be- 
 tween the actual cost of transportation and the rate 
 paid by the public. ^^ Certainly, the adequacy of the 
 revenue for the service performed by the carriers must 
 take precedence over market conditions in determining 
 the reasonableness of a rate.^^ In every phase of regula- 
 tion, it is now recognized that in the end there must be a 
 relation between the cost of service and charge to the 
 public for that service. If the character of service per- 
 formed is changed by public mandate so as to increase 
 expense of performing the service, then the public must 
 pay for its performance; it is therefore in the public inter- 
 est that every transportation service should be performed 
 in the most economical method.-" Many decisions of late 
 years have been devoted to discussion of what cost of 
 service implies. ^^ For it is now understood that the cost 
 of service is necessarily to be considered in determining 
 reasonableness of rate.^* It is an element in the situation 
 
 22 Winters Metallic Paint Co. v. 25 Lindsay Bros. v. P. M. R., 25 
 
 C, M. & St. P. Ry., 18 I. C. C. I. C. C. 368. 
 
 596. -' Albree v. B. & M. R. R., 22 I. C. 
 
 2' Rates on Common Brick to C. 303. 
 
 Canada, 26 I. C. C. 129. " Morgan Grain Co. v. A. C. L. 
 
 " In re Transportation of Wool, R. R., 19 I. C. C. 460. 
 
 Hides, and Belts, 23 I. C. C. '« Ohio Pace Brick Mfrs. Asso. v. 
 
 151. Adams Express Co., 20 I. C. C. .582. 
 
 [ 329 ] 
 
§ 386 ] Railroad Rate Regulation 
 
 which according to present ideas cannot be ignored.^' It 
 is typical of the doctrines now current that the proof al- 
 most invariably demanded for justifying an advance in 
 rates is a showing that the existing rate is unremimera- 
 tive.'" Likewise, in deciding complaints based upon the 
 unreasonableness of rates, the cost of service is considered 
 in determining reasonableness of an existing rate.^^ 
 
 § 386. Costs considered in determining comparative rea- 
 sonableness. 
 
 Respective cost is also held of the greatest importance 
 by the Commission in determining the comparative rea- 
 sonableness of rates.^^ It has long been laid down that 
 rates over the same lines, between the same points, but 
 under differing conditions, must be made with some 
 consideration for the difference in the cost of service.'' 
 In making any comparisons, it will be realized in particular 
 cases that the costs of operation are greater or less than 
 the average. Thus it has been said that the cost of 
 operation is. somewhat more, and corresponding rates may 
 properly be somewhat higher, in the territory west than it 
 is east of the Missouri River.'* And because of the 
 shortness of the haul, the ton-mile receipts of New Eng- 
 land railroads not improperly average higher than those 
 in any other section of this country, where traffic condi- 
 tions are otherwise comparable with New Engla,nd.'^ 
 
 . 29 In re Advances on Cotton, 23 Empty Barrels, 25 I. C. C. 641; 
 
 I. C. C.404. Coke Producers' Ass'n of Connells- 
 
 3" In re Advances on Live Stock, ville v. B. & O. R. R., 27 I. C. C. 
 
 25 I. C. C. 63; In re Advances on 125; Chamber of Commerce of New 
 
 Flaxseed, 25 I. C. C. 337; In re York v. N. Y. C. & H. R. R. R., 27 
 
 Advances on Hay, 25 I. C. C. 680; I. C. C. 238. 
 
 In re Classification of Empty Bar- ^' Capital Electric Co. v. B. & O. 
 
 rels, 25 I. C. C. 641; In re Advances C. T. R. R., 26 1. C. C. 472. 
 
 on Hops, 25 1. C. C. 16. '« Kindel v. N. Y., N. H. & H. R. 
 
 " Baker Commercial Club v. O. R., 15 I. C. C. 555. 
 
 W. R. R. & N. Co., 25 I. C. C. 281; "City of Spokane v. N. P. Ry., 
 
 Western Classification Case, 25 I. C 19 I. C. C. 162. 
 
 C. 442; Speigle v. S. Ry. Co., 25 '^ xhe New England Investigation, 
 
 I. C. C. 71; In re Classification of 271. C. C. 560. 
 [330] 
 
Cost of Particular Service [ § 387 
 
 The relative lack of financial prosperity of carriers will be 
 considered in determining the reasonableness of its rates.'" 
 The adequacy of the revenue for the service performed by 
 the carriers must take precedence over market conditions 
 in determining the reasonableness of a particular rate." 
 Wages, price of materials and supplies, greater amount 
 hauled by trains, and density of traffic on a weak line will 
 be considered.'^ And the fact that the general level of 
 rates is probably higher in sparsely settled than in a more 
 thickly settled territory under consideration. '^ 
 
 § 387. Limitation upon the law of increasing returns. 
 
 That the law of increasing returns cannot be carried too 
 far in rate making has been pointed out many times by 
 those who deal with this question from the legal stand- 
 point. The general caution with which this principle is 
 admitted may be seen by a quotation from one of the 
 earlier opinions of the Commission: *" "Carriers justify this 
 adjustment of rates by which Ash Fork is charged two and 
 one-half times as much as is Los Angeles, although the 
 traffic to the latter point passes through the former, by 
 saying that water competition fixes the rate at Los Angeles, 
 and that although the rate is unreasonably low there is 
 some profit in the movement. The railroad itself must be 
 constructed and maintained, with its station-houses and its 
 operating force. These general expenses must be incurred 
 at all events. Any traffic not otherwise coming to the 
 road which pays something above the cost of moving, 
 including rent of engines and cars, cost of fuel and labor, 
 adds to the gross revenues without correspondingly in- 
 creasing operating expenses. The Commission does not 
 sanction the extent to which this principle is often pressed 
 
 ™ Michigan Copper & Brass Co. City v. A., T. & S. F. Ry., 19 I. C. C. 
 
 V. D. S. S. & A. Ry., 25 I. C. C. 218. 
 
 357. ^' American National Live Stock 
 
 3' Lindsay Bros. v. P. M. R. R., 25 Ass'n v. S. P. Co., 26 I. C. C. 37. 
 
 I. C. C. 368. " Re Proposed Advances in Freight 
 
 38 Commercial Club of Salt Lake Rates, 9 I. C. C. Rep. 382. 
 
 [3311 
 
§ 388 ] Railroad Rate Regulation 
 
 in the making of relative rates; certainly it. does not 
 approve the relation of rates established in the example 
 above cited. There are many limitations to the applica- 
 tion of the principle. Additional traffic in reaUty adds to 
 those expenses which are not in theory affected. It costs 
 more to maintain the track and keep up the operating 
 force of a railroad when transacting a heavy than when 
 doing a light business. The general expenses are higher. 
 Increased tonnage speedily finds its way into the construc- 
 tion account; still up to a point at which traffic can be 
 handled to advantage increase in tonnage at the same 
 rate not only increases gross receipts proportionately, but 
 increases net receipts in a still greater proportion." *^ 
 
 § 388. Length of haul as a factor affecting a particular rate. 
 
 The first and most obvious fact which affects the rate is 
 the length of carriage. The further goods are carried, the 
 less, generally speaking, the charge per mile will be, since 
 certain fixed and terminal charges must be paid once and 
 only once no matter how long the haul. As these charges 
 must be paid out of the rate, it is clear that the more 
 miles the goods are carried the less the amount of the 
 fixed charges which must be added to the rate for each 
 mile.^^ "It is a familiar rule in the transportation of 
 freight by railroads, and has become axiomatic, that while 
 the aggregate charge is continually increasing the further 
 the freight is carried, yet the rate per ton per mile is 
 constantly growing less all the time, unless there be excep- 
 tional conditions modifying this rule. In consequence of 
 the existence of this rule, the increase of the aggregate 
 charge continues to be less in proportion every hundred 
 miles, arising out of the character and nature of the 
 services performed and the cost of the service; and thus it 
 
 " It is particularly true in the case ties so desire. In re Express Rates, 
 
 of the express business that under 28 I. C. C. 132. 
 
 percentage contracts, expenses can *' Farrar v. East Tenn., V. & G. 
 
 be made to increase faster than R. R., 1 Int. Com. Rep. 764, 1 Int. 
 
 revenue whenever contracting par- Com. 487. 
 
 [332] 
 
Cost of Particular Service [ § 389 
 
 is that staple commodities and merchandise are enabled 
 to bear the charges of transportation from and to the most 
 distant portions of our country." *^ 
 
 § 389. Modification of the principle of the length of haul. 
 
 The length of the haul is, however, only one factor in the 
 problem; and its effect may be modified or entirely neu- 
 tralized by other considerations. The natural check, so to 
 speak, on the operation of length of haul is the difficult 
 character of the countrj' through which the longer haul is 
 carried on, making operation more expensive, and thus 
 neutralize the advantage derived from the longer haul. 
 For this or some similar reason, the rule that the rate per 
 ton-mile diminishes in proportion to the length of the haul 
 must continually be modified by other circumstances of 
 various sorts. ^^ "The rule that the rate per ton per mile 
 must be less for the greater distance is one of the tests 
 by which the rates can be carefully scanned in them- 
 selves. It is, however, like looking at them with a micro- 
 scope. It ignores all other tests except that which it alone 
 furnishes. It ignores all surrounding circumstances and 
 conditions and every factor of every kind and description 
 that enters into the making of the rate, no matter how 
 compulsory or imperious that factor may be. It serves in 
 itself a valuable purpose, not only as a close test of what a 
 rate really is, but also as a basis in the cases to which it 
 can be made to justly apply as a rule; but to determine the 
 reasonableness and justness of a rate, all surrounding cir- 
 cumstances and conditions, and the factors which enter 
 
 " Length of haul is plainly an Int. Com. 324; Cordele Machine 
 
 important factor in establishing par- Shop v. Louisville & N. R. R., 6 
 
 ticular rates; in the following cita- Int. Com. 361; Hilton Lumber Co. 
 
 tions this point is emphasized: v. Wilmington & W. R. R., 9 Int. 
 
 New Orleans Cotton Exch. v. Cin- Com. 17. 
 
 cinnati, N, O. & T. P. R. R., 1 Int. " The quotation which follows is 
 
 Com. 764; Business Men's Assoc, v. from Bragg, Com. in Business 
 
 Chicago & N. W. R. R., 2 Int. Com. Men's Assoc, v. Chicago, S. P., M. & 
 
 48, 2 Int. Com. Rep. 73; Trammell v. O. R. R., 2 Int. Com. Rep. 41, 47, 
 
 Clyde S. S. Co., 4 Int. Com. 120, 5 2 I. C. C. Rep. 52. 
 
 [3331 
 
§ 390 ] Railroad Rate Regulation 
 
 into the making of the rate, if there are any that are 
 compulsory or imperious, must be considered as well as 
 the rights of the shipper." *^ 
 
 § 390. Volume of traffic as a factor affecting the rate. 
 
 As the volume of traffic increases, the particular rate 
 tends to diminish. All fixed charges, and other expenses 
 (like station expenses, salaries, and even to a certain 
 extent wages, which are the same whether much or fittle 
 freight is carried), must be paid largely out of the freight 
 rates, and the greater the traffic, the less each separate 
 article must bear. It is a general principle, therefore, that 
 a large volume of traflfic tends to lower the particular 
 rate. This fact is the basis of a theory, sometimes held, 
 which may be described as the law of increasing returns. 
 Traffic to a certain amount is necessary, at a given rate, to 
 pay fixed charges and operating expenses; when that 
 amount of traffic is obtained, further shipments will net a 
 profit even if they pay a low rate.^* It is, therefore, in- 
 ferred that fairness permits a higher charge upon the 
 goods which must be carried, and a lower charge to attract 
 additional traffic, which might not otherwise be obtained. 
 This theory, however, if pressed to its logical result, will 
 result in unfairness. Neither the cost to the carrier, nor 
 the value to the shipper, is affected by such considera- 
 tions. The unfairness is obvious of any rule which would 
 result in an arbitrary difference of charge to two persons 
 requiring identical service; it would not satisfy the shipper, 
 who had first offered goods for shipment to be told that his 
 competitor, who had offered goods afterwards, was given 
 a lower rate, because the law of diminishing' costs justified 
 the making of a lower rate to the second comer. ^^ 
 
 ^ All factors affecting a particular rate making is mentioned often- 
 
 rate must be taken into account, times; see National Hay Ass'n v. 
 
 not merely the length of the haul. Lake S. & M. S. Ry., 9 Int. Com. 264. 
 
 Re Advances on Cattle and Sheep, " Amount hauled by trains and 
 
 231. C. C. 7. density of traflfic is generally con- 
 
 " Volume of traflfic as affecting sidered as affecting the cost of opera- 
 
 [334] 
 
Cost of Particular Service [ §§ 391, 392 
 
 § 391. Increased volume of traffic causing increase of cost. 
 
 In one case the curious position was taken that rates 
 must be raised because the increase in traffic required a 
 large amount of new construction. In reply to this posi- 
 tion the Interstate Commerce Commission said: ^' "It 
 appeared from the testimony that offerings of traffic are 
 at present extremely large; that all lines are taxed to their 
 utmost capacity, and that some have found it absolutely 
 impossible to handle the amount presented. This is re- 
 quiring enormous outlay in the providing of additional 
 track facilities and the furnishing of additional equipment; 
 and it is said that rates ought to be increased in view of 
 this large increase in traffic, and the incident expenditures 
 required. The idea that increased traffic should raise 
 rates is certainly a reversion of previous notions upon that 
 subject. The first class rate from Chicago to New York 
 is 75 cents per hundred pounds, and the distance is one 
 thousand miles. The corresponding rate from Chicago 
 to the Missouri River, one-half the distance, is 80 cents. 
 Rates generally in western territory are higher than those 
 in trunk line territory, and it has commonly been under- 
 stood that this was due to the greater density of traffic 
 in the latter section. Without doubt this increased demand 
 upon railways is requiring the expenditure of large amounts, 
 but there is nothing in this which would justify an ad- 
 vance of rates so long as that expenditure will add propor- 
 tionately to the earning capacity of the properties." ^' 
 
 Topic B. Method of Determining Particular Costs 
 
 § 392. Proper proportion of total costs. 
 
 In the preceding chapters the total amount of gross 
 receipts which a pubhc service company is justified in 
 taking from its whole business has been discussed. These 
 
 tion. Commercial Club of Salt Rates, 9 1. C. C. Rep. 38, 427. 
 Lake City v. A., T. & S. F. Ry., 19 " See also Advance in Rates, 
 
 I. C. C. 218. Eastern & Western Cases, 20 I. C. C. 
 
 *' Re Proposed Advances in Freight 243, 304. 
 
 [335] 
 
§ 393 ] Railroad Rate Regulation 
 
 were in brief all annual expenditures, * including an allow- 
 ance for upkeep, and in addition the fair capital charges 
 for the year, arrived at by determining what would be in 
 the particular case a reasonable return upon proper capi- 
 talization.^" As an abstract matter the fairest way to all 
 concerned to determine the price for any particular service 
 would seem to be to apportion ratably the total disburse- 
 ments of every sort to the various items of business, and 
 so to arrive at proportionate rates." Theoretically, cer- 
 tainly any other method is less just to all concerned. In 
 determining thus what is a reasonable rate for a service 
 to be rendered, it is not proper to take the road as existing 
 and as maintained, with its track and terminal equipments, 
 salaries and all other expenses, and to regard as the total 
 cost of any particular service merely the increased expense 
 necessary to add to its business the service in question. 
 Truly, the cost of each service ought to include its fair 
 share of the interest on investment and of the general 
 expense; and it is necessary, therefore, to consider what 
 rules there may be devised for proper apportionment.'^ 
 
 § 393. Apportionmeiit of separable costs. 
 
 Even in a complicated business, such as railway trans- 
 portation, it ought to be possible to determine the peculiar 
 cost of a particular service with some degree of accuracy. 
 The first difficulty that presents itself is that the ordinary 
 railroad is engaged in at least two different businesses, the 
 transportation of freight and the transportation of pas- 
 
 «° In Pennsylvania R. R. Co. v. v. D., L. & W. R. R. Co., 24 I. C. C. 
 
 Philadelphia County, 220 Pa. St. 140. 
 
 100, 68 Atl. 676, 15 L. R. A. (N. S.) ^^ !„ Qulf, C. & S. F. R. R. Co. 
 
 108, it was held that passenger rates v. Railroad Commission (Tex.), 116 
 
 could not be so reduced as to prevent S. W. 795, the court held a railroad 
 
 the railroad company from earning a could charge for transporting lum- 
 
 fair profit upon that branch of its ber not merely the separable costs of 
 
 business. such transportation, but also its 
 
 *' Comparisons of ton-mile rev- proper proportion of the fixed charges 
 
 enues are frequently resorted to by of the railroad, 
 the Commission. Marian Coal Co. 
 
 [ 336 ] 
 
Cost of Particular Service [ § 394 
 
 « 
 
 sengers, with their costs intermingled.^' Now, many of the 
 particular costs of moving traffic can be separated — the 
 wages paid the train crews of freight trains from those 
 paid to the train crews of passenger trains, and the fuel 
 burned by freight locomotives from that burned by pas- 
 senger locomotives, to take two important items. More- 
 over, to a certain extent the entire expense of transporta- 
 tion may thus be judged from the sums expended in 
 operation.^* When the average amount expended in moving 
 typical quantities of a given commodity is known, a stand- 
 ard is established by which it may be seen whether there 
 is not a full return to the railroad of the entire cost attribu- 
 table to the transportation of these goods. It would be wrong 
 upon any theory to ignore the cost of service, in so far as it 
 may thus be estimated; for to serve some shippers for less 
 than the special costs of serving them would be plainly unfair 
 to other shippers, who would almost inevitably be called 
 upon to make up the deficiency.^'' 
 
 § 394. Allocation of joint costs. 
 
 When the separable costs of operation have thus been 
 distributed to the different kinds of services rendered, 
 it will be found that from forty to sixty per cent of the total 
 
 *' Ton per mile earnings alone are the one dollar allowed in the schedule 
 
 not an absolutely correct test of as compensation, 
 
 reasonableness; a combination of Train mile earnings given as a 
 
 both ton-mile and car earnings is a basis of determining reasonableness 
 
 more correct test than either of those in Standard Mirror Co. v. Pa. Ry., 
 
 factors alone. Bahrenburg Bro. & 27 I. C. C. 200. 
 
 Co. V. A. C. L. R. R. Co., 24 I. C. C. " No complaint can be made of a 
 
 560. charge for a particular service which 
 
 ^* In Chicago, St. P., Mo. & O. not only covers the full cost of the 
 
 Ry. Co. V. Becker, 35 Fed. 883, a particular service asked, but also 
 
 rate for switching cars fixed by a yields a fair profit above that cost, 
 
 commission was enjoined, the com- Southern Ry. Co. v. St. Louis H. & 
 
 I)lainant's testimony showing that G. Co., 214 U. S. 297, 53 L. ed. 1004, 
 
 the actual cost of the service, viz., 27 Sup. Ct. 678. 
 
 wages of employees, rent of engines. Car mile earnings given as a 
 
 and keeping the track in repair, basis of determining reasonableness 
 
 exceeded per car by fourteen cents in Advances on Hops, 25 I. C. C. 16. 
 
 22 [ 337 ] 
 
§ 394 ] Railroad Rate Regulation 
 
 expenditures for which the company should be recouped 
 have been thus accounted for, the percentage depending 
 upon the kind of business in general and the accounting 
 of the company in particular.^® This determination of 
 half of the average cost for particular services with suffi- 
 cient accuracy gives to the further computation greater 
 reliability, as it greatly diminishes the percentage of error 
 in the total, due to the comparative inaccuracy of the 
 other half. This other half consists of the part allocated 
 to the particular business in question of the joint costs of 
 operation, which consist principally of the general expenses 
 and capital charges. Even here some distribution can be 
 made.*' In so far as the freight management and passen- 
 ger management are divided between different officials, 
 their salaries may be separately apportioned; and, as to a 
 large extent freight equipment, and, to a smaller extent 
 freight terminals, are divided, their capital charges may 
 be divided. There remains, however, a very considerable 
 total of joint costs inextricably combined, the salaries of 
 the executive officers and the capital charges upon roadbed, 
 for example. At this point, we are for the first time really 
 driven to computation upon an artificial basis to arrive 
 at some distribution; and obviously this is to be arrived 
 at by striking some proportion.*^ Some students of this 
 subject are content to rest this upon respective utiliza- 
 tion, dividing these joint costs in the proportion (say) 
 of freight ton-mileage to passenger mileage. But this 
 proportion seems to throw too great a burden upon the 
 passenger service, the receipts from the passenger train 
 being so much less than those from the freight train. Other 
 
 '» Pennsylvania R. R. Co. v. State v. Atlantic C. L. Ry., 48 Fla. 
 
 Philadelphia Co., 220 Pa. St. 100, 68 114, 37 So. 657. 
 
 Atl. 676, 15 L. R. A. (N. S.) 108. '» On this point see Re Advances 
 
 See further, Tucker v. Missouri on Coal to Lake Ports, 22 I. C. C. 
 
 Pacific R. R., 82 Kans. 222, 108 Pac. 604. 
 
 89. Train mile earnings as the basis of 
 
 " Coal & Coke Ry. Co. v. Conley, the comparison. Duluth Log Rates, 
 
 67 W. Va. 129, 67 S. E. 613. See also 29 I. C. C. 420. 
 
 [338] 
 
Cost of Particular Service [ § 395 
 
 persons maintain that the volume of business done should 
 determine the proportion, dividing these joint costs (say) 
 in the proportion of freight receipts to passenger receipts. 
 But this proportion, in turn, seems to throw too great a 
 burden upon the freight traffic, the passenger obviously 
 receiving more service than its proportion of the total 
 receipts.'''' 
 
 § 3S5. Basis of the distribution. 
 
 In a late case^" these principles are thus discussed by 
 Judge Hook. "From the very nature of the case, there- 
 fore, some rule must be adopted for charging to each of 
 them their fair and equitable proportion of the common 
 expense. Of necessity it must proceed upon average con- 
 ditions commonly known or shown to exist, and it argues 
 nothing to say that it does not fully apply to this or that 
 exceptional instance. A general rule based on experienced 
 observation is fair, and what is lost by its application in 
 one place is doubtless gained in another, and an equitable 
 equilibrium maintained. Of those suggested the revenue 
 basis appears to be much more uniform in its adaptability 
 and much less subject to substantial objection. It has 
 been frequently employed. It is the one to which the mind 
 naturally turns in every problem involving the charging 
 of common expense to different departments of a business. 
 When a general or common expense cannot be located 
 what is more obviously reasonable than to say in the first 
 place the different branches or departments shall bear 
 it according to the value of their products of their gross 
 earnings, and then make due allowance for exceptional 
 conditions if any are perceived? That seems at the start 
 to satisfy the mind intent on equity. It is a working basis 
 for the distribution of all expense incident to railroad 
 
 *" Rate per ton per mile to be con- rates: See Trier v.C, St.P.,M.&0. 
 
 sidered as relative test in rate mak- Ry., 30 1. C. C. 352. 
 
 ing. National Hay Asso. v. M. C. ™ Missouri, K. & T. Ry. Co. v. 
 
 R. R., 19 1. C. C. 3-t. Love, 177 Fed. 493. 
 
 What are reasonable passenger 
 
 [3391 
 
§ 396 ] Railroad Rate Regulation 
 
 business among its revenue yielding operations of every 
 character." " 
 
 § 396. Basis of the proportion. 
 
 With due deference to those who have been worried 
 in choosing between these two bases of casting propor- 
 tions — the revenue basis and the operating basis each of 
 which it is admitted has its error — the writer would suggest 
 that by a compound proportion, utilizing both proportions, 
 the respective errors in the single proportions would be 
 largely offset, and an entirely defensible result would be 
 reached.*^ One significant comparison to ascertain whether 
 relative injustice is being done one traffic as against an- 
 other, is through the earnings per car.*^ But, where the 
 commodity moves in trainloads, the earnings per train- 
 mile furnish the best criterion.^* And in general it may 
 be said that neither train mileage nor car earnings is suffi- 
 cient in itself; a combination of both ton-mile and car 
 earnings is more apt to show reasonableness than either of 
 those factors alone."" Whatever factors, or combination 
 of factors, are employed in determining what should be 
 the proper average rate per ton per mile for the traffic in 
 question, it is obvious that the carriers are entitled to a 
 higher revenue per ton per mile than this rate on a haul 
 which is shorter than the average.** And in amving at the 
 average cost for a given commodity for a given transit 
 the fairest basis will be that taking into account aU factors 
 in traffic movement.*' 
 
 «i Citing Smyth v. Ames, 169 St. Louis & S. F. R. R., 16 I. C. C. 
 
 U. S. 466, 18 Sup. Ct. 418, 42 L. ed. 106; see also Merchants' & Manu- 
 
 819; Chicago, M. & St. P. R. Co. facturers' Ass'n v. A. C. L. R. R., 
 
 V. Tompkins, 176 U. S. 167, 20 22 1. C. C. R. 467. 
 
 Sup. Ct. 336, 44 L. ed. 417; Northern "Traffic Bureau of Nashville v. 
 
 Pacific V. Keyes, 91 Fed. 47; In re Louisville & N. R. R., 28 I. C. C. 533. 
 
 Arkansas R. R. Rates, 163 Fed. 141; 8* Wisconsin Steel Co. v. P. & 
 
 St. Louis & S. F. R. Co. v. Hadley, L. E. R. R., 27 I. C. C. 152. 
 
 168 Fed. 317. «« Wharton Steel Co. v. D., L. & 
 
 «=i Marion Coal Co. v. D., L. & W. R. R., 25 I. C. C. 303. 
 
 W. R. R., 24 1. C. C. 140. «' Pabst Brewing Co. v. C, M. & 
 
 «' Ozark Fruit Growers' Ass'n v. St. P. Ry., 17 I. C. C. 359. 
 
 [340] 
 
Cost of Particular Service [ §§ 397, 398 
 
 § 397. Average rate per unit of service. 
 
 In dealing with a multiplicity of rates for particular 
 services, the computations described in this topic are next 
 carried to the determination of the average cost per unit 
 of service, which may be used thereafter as a standard 
 for testing the charge for any particular service.*^ Of 
 any given company it may be said that it is entitled to 
 take as gross receipts from its whole business a certain 
 sum, determined by adding together its operating expenses, 
 including therewith all proper maintenance charges, and 
 its fixed charges, that is, a fair return upon a reasonable 
 capitalization. This total amount divided by the total 
 service gives the average cost per unit. In testing freight 
 rates, the standard to be determined is the ton-mile cost. 
 If the smn of the whole amount of freight carried be one 
 hundred million ton-miles, and the gross revenue required 
 from freight be one million dollars, the average rate of 
 freight will be one cent per ton-mile. If there were no 
 other factors in the problem, therefore, a fair proportion- 
 ate rate would be the ton-mile average charge. Because, 
 however, of other factors, which cause a difference be- 
 tween commodities with respect to the fair charge for 
 carrying them, a uniform ton-mile rate applied to all 
 cases would not result in reasonable rates.*^ 
 
 § 398. Recognition of the ton-mile cost basis. 
 
 Although generally abhorrent to economists, the ton- 
 mile cost basis is well recognized by judges to-day as the 
 first test to be employed in determining the reasonable- 
 ness of particular rates. In a recent case ™ in the United 
 
 "' Cost figures are of great value. National Lumber Exporters' Ass'n v. 
 
 Pittsburgh Vein Operators of Ohio v. St. L., I. M. & S. Ry., 28 I. C. C. 
 
 P. Co., 24 1. C.C. 280. 215. 
 
 There is no exact standard by An increase made solely for pur- 
 
 which the reasonableness of a rate pose of obtaining more revenue is 
 
 can be measured. National Wool held by the Commission not to be 
 
 Growers' Ass'n v. O. S. L. R. R. Co., justified. Collingwood Brick Co. v. 
 
 25 I. C. C. 675. P. M. R. R., 26 I. C. C. 572. 
 
 «9 Ton-mile cost as measure of rate. ™ Atlantic C. L. Ry. Co. v. Florida, 
 
 [341] 
 
§ 398 ] Railroad Rate Regulation 
 
 States Supreme Court, where the issue was whether a 
 certain rate upon phosphate fixed by a commission was 
 fair to the raikoad affected, Mr. Justice Brewer, speaking 
 for the court said: "And here we face the situation: The 
 order of the commission was not operative upon all local 
 rates but only fixed the rates on a single article, to wit, 
 phosphate. There is no evidence of the amount of phos- 
 phates carried locally; neither is it shown how much a 
 change in the rate of carrying them will affect the in- 
 come, nor how much the rate fixed by railroads for carry- 
 ing phosphates has been changed by the order of the com- 
 mission. There is testimony tending to show the gross 
 income from all local freights and the value of the rail- 
 road property, and also certain difficulties in the way of 
 transporting phosphates owing to the lack of facilities 
 at the terminals. But there is nothing from which we 
 can determine the cost of such transportation. W.e are 
 aware of the diflSculty which attends proof of the cost 
 of transporting a single article, and in order to determine 
 the reasonableness of a rate prescribed it may be some- 
 times necessary to accept as a basis the average rate of all 
 transportation per ton per mile. We shall not attempt 
 to indicate to what extent or in what cases the inquiry 
 must be special and limited. It is enough for the present 
 to hold that there is in the record nothing from which 
 a reasonable deduction can be made as to the cost of 
 transportation, the amount of phosphates transported, or 
 the effect which the rate established by the commission 
 wiU have upon the income. Under these circumstances 
 it is impossible to hold that there was error in the con- 
 clusions reached by the Supreme Court of the State of 
 Florida, and its judgment is afiirmed." " 
 
 203 U. S. 256, 51 L. ed. 174, 27 Sup. even if all this may have been done 
 
 Ct. 108. convincingly: before the operating 
 
 " See also Wood v. Vandalia R. R., ratios and ton-mile costs established 
 
 231 U. S. 1, 34 Sup. Ct. 7, holding from this proof can be available, it 
 
 that it is not enough to set forth the must be shown that the particular 
 
 capital values and the net earnings, traffic under consideration costs 
 
 [342] 
 
Cost of Particular Service [ § 399 
 
 § 399., Ton-mile cost basis not oppressive. 
 
 At all events it may be said that governmental regula- 
 tion based upon the ton-mile basis is not oppressive. This 
 is shown sufficiently in another case " involving a similar 
 issue decided by the same Justice on the same day. "With 
 reference to the second of these cases the order made by 
 the railroad commission is said by the plaintiff in error 
 to be an 'irregular, unjust and unreliable method of rate 
 fixing,' and this upon the theory that the order makes 
 the rate per mile the same for any distance, whether one 
 mile or a himdred miles. It appears that 16.43 per cent 
 of all the local freight business of the company in Florida 
 comes from the carrying of phosphates, and reference is 
 made to several cases in which the courts have noticed 
 the fact that the cost of moving local freight is greater 
 than that of moving through freight, and the reasons for 
 the difference. But evidently counsel misinterprets the 
 order of the railroad commission. It does not fix the rate 
 at one cent per ton per mile. It simply provided that it shall 
 not exceed one cent per ton per mile, prescribes a maxi- 
 mum which may be reduced by the railroad company, 
 and if distance demands a reduction the company may and 
 doubtless will make it. In addition it must be borne in 
 mind that it is to be presumed that the railroad commis- 
 sion acted with full knowledge of the situation; that phos- 
 phates were in Florida possibly carried a long distance, 
 the place of mining being far from the place of actual use 
 or preparation for use. Further, when we turn to the 
 report of the railroad company (which of course is evi- 
 dence against it) we find that the company's average 
 freight receipt per ton per mile in the State of Florida 
 was SiVt mills; so that the rate authorized for phosphates 
 was nearly two mills per ton larger than such average. 
 Under these circumstances it is impossible to say that there 
 
 more or less than the average, as the Florida, 203 U. S. 261, 51 L. ed. 
 case may be. 175, 27 Sup. Ct. 109. 
 
 '2 Seaboard Air Line Rv. Co. v. 
 
 [343] 
 
§ 400 ] Railroad Rate Regulation 
 
 was error in the conclusions of the Supreme Court of the 
 State, and its judgments are affirmed." " 
 
 § 400. Argument for permitting disproportionate rates. 
 
 So far as there is as yet actual law upon this problem 
 of the revision of particular rates, the outcome still hangs 
 in the balance where it is not unlikely it will long remain. 
 It must be conceded that at first sight the weight of 
 authority would seem to be against one who is claiming 
 that the particular rates in a schedule should not be un- 
 reasonably disproportionate. But upon examination this 
 weight of authority will be found only for a limited propo- 
 sition. It is true that by what is still the weight of au- 
 thority the imposition of a rate by legislation, which fixes 
 so disproportionately low a rate for a particular service 
 as to make that service admittedly unprofitable will 
 nevertheless not be held to be unconstitutional, if from its 
 total receipts the company in question will get a fair 
 return on its proper capital above operating expenses and 
 reasonable charges. The Supreme Court of the United 
 States still holds to the doctrine first clearly announced 
 in Minneapolis & St. Louis Railroad Company v. Minne- 
 sota ''* where Mr. Justice Brown in justifying an order of 
 the State commission so reducing the rate on coal that its 
 
 '* See also Missouri Pacific Ry. v. setts, 207 U. S. 79, 52 L. ed. Ill, 28 
 Tucker, 230 U. S. 340, 57 L. ed. 1507, Sup. Ct. 26; Willcox v. Consolidated 
 33 Sup. Ct. 985, holding that a rail- Gas Co., 212 U. S. 19, 53 L. ed. 382, 
 road can insist upon having a fair 29 Sup. Ct. 192; Southern R. R. 
 return for services rendered, and that Co. v. McNeill, 155 Fed. 756; Cen- 
 to compel it to serve for rates which tral of Ga. Ry. Co. v. McLendon, 
 are unremunerative is virtually con- 157 Fed. 974; In re Arkansas R. R. 
 fiscation. Rates, 168 Fed. 720. But see Lake 
 
 " 186 U. S. 257, 46 L. ed. 1151, 22 Shore & M. S. Ry. Co. v. Smith, 173 
 
 Sup. Ct. 901. The court had al- U. S. 684, 43 L. ed. 858, 19 Sup. Ct. 
 
 ready committed itself to this doc- 565. 
 
 trine in St. Louis & S. F. R. R. See also Southern Ry. Co. v. 
 
 Co. V. Gill, 156 U. S. 649, 39 L. ed. Atlanta Stove Works, 128 Ga. 207, 
 
 567, 15 Sup. Ct. 484; see further to 57 S. E. 429; State ex rel. v. Northern 
 
 the same effect: Interstate Con- Pacific Ry. Co. (N. D.), 120 N. W. 
 
 solidated St. Ry. Co. v. Massachu- 869, 25 L. R. A. (N. S.) 1001. 
 
 [344 1 
 
Cost of Particular Service [ § 401 
 
 transportation would be at a loss said: "Notwithstanding 
 the evidence of the defendant that if the rates upon all 
 merchandise were fixed at the amount imposed by the 
 contunission upon coal in carload lots, the road would 
 not pay its operating expenses, it may well be that the 
 existing rates upon other merchandise, which are not dis- 
 turbed by the commission, may be sufficient to earn a 
 large profit to the company, though it may earn little or 
 nothing upon coal in carload lots." ''^ 
 
 § 401. Authorities opposed to disproportion. 
 
 It should be noted, however, that there has been vigor- 
 ous protest of late years against this proposition, even 
 as it has been limited. In this connection the recent case 
 of the Pennsylvania Railroad Company v. Philadelphia 
 County ^^ deserves full consideration as the latest expres- 
 sion of the modern tendency to look into the different 
 departments of the business in their relation to one an- 
 other. In that case there was a bill in equity to restrain 
 the enforcement of the Pennsylvania statute imposing a 
 two-cent passenger rate. It was urged in defense of the 
 legislation that, although it might leave no profit to the 
 railroad in question upon its passenger traffic, the gross 
 receipts of that railroad would, notwithstanding this, be 
 sufficient to pay a fair profit upon its whole capital. But 
 
 "• Note also the language of the on non-competing articles, unless the 
 
 Commission in at least these two rate on the favored article is so low as 
 
 cases: It is a well-established and to be unremunerative and fail to 
 
 generally recognized rule that ifi carry its share of the burden of 
 
 additional business can be taken on producing revenue. Bartlesville Sal- 
 
 at rates which will contribute little in vage Co. v. M., K. & T. Ry. Co., 
 
 addition to actual out-of-pocket 25 1. C. C. 672. 
 
 expense, the carrier will be advan- ™ 220 Pa. St. 100, 68 Atl. 676, 15 
 
 taged to that extent and all its L. R. A. (N. S.) 108. See further to 
 
 patrons will be benefited to the ex- the same effect: Gulf, C. & S. F. R. R. 
 
 tent to which such traffic contributed Co. v. Raiboad Commission (Tex.), 
 
 to the net revenue. Boileau v. P. 116 S. W. 795; Coal & Coke Ry. Co. 
 
 & L. E. R. R. Co., 24 I. C. C. 129. v. Conley, 82 W. Va. 129, 67 S. E. 
 
 A violation of section 3 cannot be 613. 
 predicated upon a difference in rates 
 
 [345] 
 
§ 402 ] Railroad Rate Regulation 
 
 the Pennsylvania Supreme Court held the legislation un- 
 constitutional upon this showing, Chief Justice Mitchell 
 saying: "True business principles require that the pas- 
 senger and freight traffic not only may, but should be 
 separately considered. The intelligent business of the 
 world is done in that way. Every merchant and manu- 
 facturer examines and ascertains the unprofitable branches 
 of his business with a view to reducing or cutting them 
 off entirely, and there is no reason why a railroad or other 
 corporation should not be permitted to do the same thing 
 as long as its substantial corporate duties under its fran- 
 chise are performed. While the public has certain rights 
 which in the case of conflict must prevail, yet it must not 
 be forgotten that even so-called public service corporations 
 are private property organized and conducted for private 
 corporate profit. And unless necessary for the fulfillment of 
 their corporate duties they should not be required to do 
 any part of their business in an unbusinesslike way with 
 a resulting loss. If part is unprofitable it is neither good 
 business nor justice to make it more so because the loss can 
 be offset by the profit on the rest. To concede that princi- 
 ple would, as the court below indicated, permit the legislature 
 to compel the carriage of passengers practically for nothing 
 though the inexorable result would be that freight must pay 
 inequitable rates that passenger travel may be cheap." " 
 
 To-pic C. Factors Modifying Average Cost 
 
 § 402. Cost of service insufficient in itself. 
 
 To be entirely fair, the cost of service is not always the 
 
 " Note also the following rulings of recoup themselves from the charges 
 
 the Commission: Where proposed levied against other traffic. In re 
 
 rates will yield less than the average Rates for Single Packages, 22 I. C. C. 
 
 cost of operation per ton per mile 328. Large revenue from other 
 
 on all traffic, advances held to be traffic is no reason for reducing the 
 
 justiiied. Rates on Sand to Houston, rate on pulpwood. Curry & W. Co. 
 
 Tex., 26 I. C. C. 677. Carriers may v. D. I. & R. Ry., 30 I. C. C. 1. 
 
 not haul a particular class of traffic or Rates must not be too high or too low 
 
 traffic for a particular community at relatively. Lumber Rates from S. W., 
 
 less than the cost of the service and 29 L C. C. 1. 
 
 [346] 
 
Cost of Particular Service [ § 402 
 
 decisive factor in determining a railroad rate, even if it 
 could in all cases be fairly approximated. The ton-mile 
 average cost in railroad transportation will always be 
 found to be much modified by other factors in actual 
 application.''^ For, in the first place, it must always be 
 impossible to arrive at the exact cost of a particular car- 
 riage. No goods, as a practical matter, are carried by 
 themselves under such circumstances that an exact com- 
 putation can be made of the cost of carriage. In the 
 second place, even if such a computation were possible, 
 it would not necessarily be fair to make a shipper pay the 
 exact cost of carriage of each shipment.''^ To do so would 
 make the freight vary according to the circumstances of 
 each journey; no man could know what he must pay for 
 any particular shipment, and for similar carriages of the 
 same article two shippers would pay very different charges. 
 Practical convenience requires that the charge shall be 
 uniform for a certain article carried over a certain route, 
 although the exact cost of carriage may at one time be 
 very much greater than at another.'" The exact cost of 
 carriage, therefore, or such approximation to it as may be 
 possible, can never be used as the sole factor in a par- 
 ticular rate. But while the cost of carriage cannot be 
 used by itself to determine a particular rate, neither should 
 it ever be neglected. Considered along with other factors, 
 it must have a strong influence in raising or lowering the 
 particular rate." 
 
 "Severe operating conditions N, & W. Ry. Co., 25 I. C. C. 613; 
 
 caused by grades and curves are to North Fork Cannel Coal Co. v. 
 
 be considered in determining the A. A. R. R., 25 I. C. C. 241; Multno- 
 
 reasonableness of a rate. Con- mah Lumber & Box Co. v. S. P. Co., 
 
 solidated Fuel Co. v. A., T. & S. F. 25 I. C. C. 123; Union Tanning Co. 
 
 Ry., 24 I. C. C. 213; ArMngton v. S. Ry. Co., 25 I. C. C. 112. 
 
 Heights Fruit Exchange v. S. P. Co., *» Cost of service is but one of the 
 
 24 I. C. C. 671. elements to be considered in deter- 
 
 '" The severity of operating condi- mining the reasonableness of a rate, 
 
 tions, caused by grades and curves. Commercial Club of Superior v. 
 
 considered in determining the rea- G. N. Ry. Co., 24 1. C. C. 96. 
 
 sonableness of a rate. See Taylor v. " Cost is an important element in 
 
 [347] 
 
§§ 403, 404 ] Railroad Rate Regulation 
 
 § 403. Special conditions affecting cost. 
 
 There may be special circumstances connected with a 
 particular transaction which increase or decrease the cost 
 of service; and the effect of such circumstances on the 
 rate must be considered. For instance, the expense of 
 constructing a mountain branch may be very much 
 greater than that of building the main line; or the popula- 
 tion served by the company may in places be so sparse 
 as to make the cost of operation very great in proportion 
 to the service demanded. All these circumstances may 
 properly affect the rate charged in those portions of the 
 territory served by the company; yet it appears unjust 
 to place the whole burden upon such territory, thus ac- 
 centuate its poverty, and place another handicap upon 
 it in the effort to become prosperous. There are many 
 things besides the mere mileage run which must be considered 
 in fixing the rates. A uniform mileage rate imposed upon all 
 railroads would be in reality unequal and unjust. As 
 Mr. Justice Morse said in Wellman v. Chicago & Grand 
 Trunk Railway:*^ "If no classification can be made, and 
 the maximum rate must be fixed the same for all, then the 
 law is admitted to operate unequally and unjustly, be- 
 cause some companies are to less expense than others in 
 the same length of road by reason of the nature of the 
 country through which they run; some have costly termi- 
 nal facilities, and some have not; some owe large amounts, 
 and some do not; and some do a large amount of business, 
 and some do not." *' 
 
 § 404. Amount of service asked as a factor. 
 
 As the amount of service asked at a particular time in- 
 creases, the cost thereof tends in normal cases to fall be- 
 
 determining reasonableness of freight '' Natural operating obstacles mod- 
 rates, but is not controlling. Louis- ify ton-mile averages. Grand Junc- 
 ville & N. C. & C. Rates, 26 L C. C. tion M. & F. Co. v. C. & M. Ry., 16 
 20. I. C. C. 452. 
 82 83 Mich. 592, 47 N. W. 489. 
 
 [348] 
 
Cost of Particular Service [ § 406 
 
 low the average.'* This is a famihar rule in the transpor- 
 tation of freight by railroads; and it has become axiomatic 
 that while the aggregate charge is continually increasing 
 the further the freight is carried, yet the rate per ^on per 
 mile is constantly growing less all the time. In conse- 
 quence of the existence of this rule the increase of the 
 aggregate charge continues to be less in proportion every 
 hundred miles after the first, arising out of the char- 
 acter and nature of the service performed and the cost 
 of service; and thus it is that staple commodities and mer- 
 chandise are enabled to bear the charges of transporta- 
 tion from and to the most distant portions of the coun- 
 ^j.y_85 j^Yie reason for this rule is that the cost of railway 
 transportation is made up of the expense of the two ter- 
 minals and the intermediate haul, and the terminal ex- 
 penses are the same whether the haul be long or short. 
 A few miles, or even a considerable number of miles, of 
 additional haul may in some instances of long distance 
 transportation be practically of very little importance, 
 and the aggregate rate, therefore, may be very little af- 
 fected by the additional mileage. 
 
 § 405. Effect of low average haul. 
 
 A high average ton-mile revenue of a railroad may be 
 due to short hauls, and the net earnings of such a system 
 may be most unsatisfactory. It has been repeatedly shown 
 that traffic low in ton-mile earnings may, because of its 
 
 " A dissimilarity in the density affecting ultimate cost of transpoi- 
 of traffic and of other conditions tation must be made with a reason- 
 renders unfair a comparison of rates able regard for nature of commodity 
 from central freight association terri- transported. Sunderland Bros. Co. 
 tory to western trunk line territory v. St. L. & S. F. R. R., 23 I. C. C. 
 with rates from St. Louis to Texas. 259. 
 
 Even & Howard Fire Brick Co. v. Noted that cement carried is 
 
 St. L., I. M.&S. Ry., 251. C. C. 141. 2.06 per cent of the entire traffic, 
 
 Minimum revenue per car in this whereas charges thereon amount 
 
 territory compared with rates in to only 1.53 per cent of total revenue, 
 
 other territories. Furnitui-e Rates Little Rock Chamber of Commerce 
 
 in the Northwest, 26 I. C. C. 655. v. St. L., I. M. & S. Ry., 26 I. C. C. 
 
 '^ .\11 rules, regulations and charges 341. 
 
 \ 349 1 
 
§ 405 ] Railroad Rate Regulation 
 
 farther carriage and greater density, be the most re- 
 munerative.*^ An accurate presentation of per ton-mile 
 yield to be significant must include a statement which will 
 show the actual hauls and the average length of the 
 hauls.*^ The principle that carriers are entitled to a 
 somewhat higher revenue per ton per mile on short than 
 on long hauls, is generally conceded.** Relative differences 
 in rates based upon distance should increase as the dis- 
 tance to points of destination increases.*^ A decrease in 
 the mileage divisor makes the cost per ton for a short haul 
 relatively greater than for a long haul.'" Distance is 
 always a factor in determining reasonableness of rate, but 
 distance alone is not controlling.^^ Under prevailing local 
 rates, and the expenses incident to short-haul business, 
 short-haul traffic brings in but small revenue.*^ The 
 fundamental principle is that the ton per imle revenue 
 decreases as distance increases.'^ Plainly therefore the 
 length of haul should not multiply the charge.** The 
 average haul is, therefore, given its due weight when put 
 in evidence.*^ But per car earnings, with distance con- 
 sidered, are much more reliable than ton-mile statistics.'^ 
 But it is well estabhshed that rates are not made with 
 respect to distance alone.*' Differences in cost of service 
 to the carrier, value of service to the shipper and ques- 
 tions of competition in the selling market should be taken 
 into consideration.** 
 
 ^ Traffic Bureau of Nashville v. '^ Mayor & Council of Douglas v. 
 
 L. & N. R. R., 28 I. C. C. 533. A. B. & A. R. R., 28 I. C. C. 445. 
 
 ^ Lumber Rates Texas, etc., to «' Anadrako Cotton Oil Co. v. A., 
 
 Oklahoma and Missouri, 28 I. C. C. T. & S. F. Ry., 20 I. C. C. 43. 
 
 471. '^Switching Charges at Sheffield, 
 
 8» Wharton Steel Co. v. D., L. & Minn., 26 I. C. C. 475. 
 
 W. R. R., 25 I. C. C. 303. '« Pittsburg Steel Co. v. L. S. & 
 
 89 Sheridan Ch. of Com. v. C, B. M. S. Ry., 27 1. C. C. 173. 
 
 & Q. Ry., 26 I. C. C. 638. ^ Memphis Freight Bureau v. 
 
 « Taylor v. N. & W. Ry., 25 I. C. I. C. R. R., 27 I. C. C. 507. 
 
 C. 613. " Traffic Bureau of Nashville v. 
 
 " Corporation Commission of N. L. & N. R. R., 28 I. C. C. 533. 
 
 C. V. N. & W. Ry., 19 I. C. C. »* Black Mountain Coal Land Co. 
 
 303. V. So. Ry., 15 I. C. C. 286. 
 
 [350] 
 
Cost of Particular Service [ § 406 
 
 § 406. Local business peculiarly expensive. 
 
 Sometimes the cost of a particular service is peculiarly 
 expensive. Thus local shipments are more expensive to 
 handle in proportion to the mileage than long distance 
 shipments, and a greater proportionate charge is there- 
 fore justified. "The operating expenses of a railroad 
 consist of two principal items: (1) cost of maintenance 
 of plant; (2) cost of conducting transportation. The 
 former item is constant, and can justly be divided between 
 the different kinds of traffic in proportion to their volume. 
 As to the second item, however, such a division cannot 
 properly be made; for it is agreed, by all who have had 
 occasion to consider the subject, railroad commissioners 
 as well as railroad officials, that the cost of conducting 
 transportation is, relative to income, much higher for 
 local business than for the general business of a road. 
 The causes of this added cost are chiefly three: (1) the 
 shortness of the haul; (2) the lightness of the train loads; 
 (3) expense of billing and handling the traffic." ^' But be- 
 cause a greater charge may be made on local than on 
 through business, it by no means follows that all the 
 charge of maintaining a station can be laid upon the busi- 
 ness done at that station. If, for instance, a small amount 
 of business is done at a station the rates cannot be made 
 much greater at that station than at a neighboring way 
 station, where three or four times as much business is 
 done. Some particular losses are inseparable from the 
 conduct of a general public service.^ 
 
 "Northern Pacific Ry. Co. v. Love, 177 Fed. 493, the court con- 
 
 Keyes, 91 Fed. 47. See also Chicago, sidered elaborately the greater cost 
 
 M. & St. P. Ry. Co. V. Tompkins, of local business in comparison with 
 
 176 U. S. 167, 44 L. ed. 417, 20 Sup. through business. See also St. Louis 
 
 Ct. 336. & S. F. Ry. Co. v. Hadley, 168 Fed. 
 
 Under prevaihng local rates and 317. 
 the expenses incident to short-haul Conditions being materially dif- 
 
 business brings in but small revenue. ferent, rates to main-line points 
 
 Mayor & Council of Douglas v. A. cannot be made the standard of 
 
 B. & A. R. R. Co., 28 I. C. C. 445. reasonableness of rates to branch- 
 
 ' In Missouri, K. & T. Ry. Co. v. line points. Board of Trade of 
 
 [3511 
 
§§ 407, 408 ] Railroad Rate Regulation 
 
 § 407. Circumstances of particular service. 
 
 The view of the Commission seems to be that the rate 
 per ton-mile rule brings rates down to the narrowest point 
 of scrutiny, and for that purpose is valuable; but it ex- 
 cludes consideration of other circumstances and conditions 
 which enter into the making of rates, no matter how 
 compulsory or imperious they may be, and it cannot, 
 therefore, be accepted as controlling in determining the 
 reasonableness of rates. ^ As the Commission has pointed 
 out, the reasonableness of a rate must of necessity depend 
 upon the conditions surrounding the traffic at the time it 
 moves. The length of the haul, the competition to be met, 
 the cost of the service, the value of the service, the density 
 or volume of the tonnage, as well as the general transpor- 
 tation conditions then existing are factors that have a 
 more or less definite relation to the rate that a carrier may 
 reasonably demand for a transportation service. And 
 these factors, except possibly the length of the haul, the 
 grades, and other transportation conditions are in their 
 nature neither permanent nor fixed; but necessarily change 
 with the general economic panorama. No presumption of 
 law, therefore, can arise against an advanced rate simply 
 because a lower rate previously existed.' 
 
 § 408. Divisions in sparsely populated territory. 
 
 It is clear that where a division of a railroad runs 
 through a sparsely populated country, so that the amount 
 
 Winston-Salem v. N. & W. Ry. Co., ' Memphis Cotton Oil Co. v. I. 
 
 •26 I. C. C. 146. C. R. R. Co., 17 I. C. C. 313. 
 
 ' Cedar Hill Coal & Coke Co. v. Terminal Facilities, when ex- 
 
 C. & S. Ry., 16 I. C. C. 387. tensive and costly, are entitled to 
 
 Transportation Conditions weight in consideration of reasonable- 
 found to be materially different ness of rate; and where commodity 
 upon the Winston-Salem division ■ is of high weight and bulk such fa- 
 than those prevailing between main- cilities broadly distributed are of 
 line points or between points on the value to the consignees in that 
 system where main-line conditions amount of cartage is not nearly so 
 control. Board of Trade of Winston- great as if deliveries were confined 
 Salem v. N. & W. Ry. Co., 26 I. C. C. to one or two points. Maritime 
 146. Exchange v. P. R. R., 21 I. C. C. 81. 
 
 [352] 
 
Cost of Particx] lar Service [ § 409 
 
 of business done upon it is comparatively small, and the 
 net earnings are therefore much below the average of the 
 whole road, the charges may be greater than the charges on 
 the other parts of the road. As Mr. Justice Brewer said 
 in the Nebraska Maximum Freight Rates Case:* "It may 
 be true, as testified by some of the witnesses, that the 
 existing local rates in Nebraska are forty per cent higher 
 than similar rates in the State of Iowa. But it is also true 
 that the mileage earnings in Iowa are greater than in 
 Nebraska. In Iowa there are 230 people to each mile of 
 railroad, while in Nebraska there are but 190; and, as a 
 general rule, the more people there are the more business 
 there is. Hence, a mere difference between the rates in 
 two States is of comparatively little significance." This 
 same line of argument was pithily put by Mr. Justice 
 Canty in Steenerson v. Great Northern Railway,' when he 
 asked, "Why should the people of Minnesota and Eastern 
 Dakota be made to pay an income on this idle railroad 
 property further west?" 
 
 § 409. Cost of handling business. 
 
 Costs do not determine rates; yet cost is generally an 
 important element in arriving at a judgment with respect 
 to a rate. What weight shall be given to that element, 
 as compared with all the other elements entering into a 
 particular rate, is a matter to be decided in each individual 
 case.^ The Commission will not compel the establishment 
 of rates solely according to mileage; the pubUc benefits, 
 the greater volume of business of carriers warranting lower 
 rates to all, the force of competition and many other potent 
 
 * 64 Fed. 165, 188. Local Rates are to be made with 
 
 Branch Lines: Higher rates may respect to difficulties of each por- 
 
 be made to points on a branch line, tion of the road. Traffic Bureau 
 
 with proper limitations, than to of Merchants' Exchange of San 
 
 main-line points. Idaho Commercial Francisco v. S. P. Co., 19 I. C. C. 
 
 Clubs V. O. S. L. R. R., 18 I. C. C. 259. 
 
 562. ' Boileau v. P. & L. E. R. R., 22 
 
 5 69 Minn. 353, 72 N. W. 713. I. C. C. 640. 
 
 23 [ 353 ] 
 
§ 410 ] Railroad Rate Regulation 
 
 considerations may far outweigh a claim of right founded 
 only on geographic location/ Ton-mile statistics, reflect- 
 ing as they do neither car loading, train tonnage, nor car 
 or train mileage, are far from being infallible guides in 
 fixing freight rates.* A road is built and operated as a 
 whole and local rates are not to be made with reference to 
 difficulties of each particular portion.'' The drift toward 
 the doctrine that rates should be proportioned according 
 to differences truly existing in the cost of rendering the 
 service, is altogether in accordance with the tendency of 
 the modern law of public service against all discriminatory 
 practices. Indeed, any method of fixing rates which re- 
 sults in disproportionate treatment to different customers 
 asking somewhat different services would seem to be 
 against that fundamental principle of equality which of 
 late years has been held to be violated by discriminatory 
 treatment of different patrons asking substantially similar 
 services. 
 
 § 410. Proportionate rates always legal. 
 
 The rate maker may always, with the approbation of 
 the law, work out a schedule of rates in which the respec- 
 tive rates are based upon their proportional cost of the 
 whole service rendered. Not only would all courts undoubt- 
 edly agree that legislation forbidding disproportionality in 
 rates is constitutional,^" but it is doubtless law that a 
 public service company may so arrange its schedule as 
 to make each rate yield a reasonable profit for each service 
 above the fair cost, without any question as to the legaUty 
 of such a course." It is, therefore, well within limits to 
 say, in summarizing what has gone before, that although 
 
 ' Fort Dodge Commercial Club v. i° Seaboard Air Line Ry; Go. v. 
 
 L C. R. R., 16 L C. C. 572. Florida, 203 U. S. 261, 51; L. ed. 
 
 ' Traffic Bureau of Nashville v. 175, 27 Sup. Ct. 109, and cases cited. 
 
 L. & N. R. R., 28 I. C. C. 533. " Pennsylvania R. R. Co. v. 
 
 'Traffic Bureau of Merchants' Philadelphia County, 220 Pa. St. 
 
 Exchange of San Francisco v. S. 100, 68 Atl. 676, 15 L. R. A. (N. S.) 
 
 P. Co., 19 I. C. C. 259. 108, and cases cited. 
 
 [354] 
 
Cost of Particular Service [§411 
 
 the rate making party is as yet by the weight of authority 
 not held to act illegally in imposing a schedule where the 
 particular rates are out of proportion/^ it is unanimously 
 agreed that, if the policy of proportional distribution of 
 the real costs is adopted by the rate making body, no ob- 
 jection can be made on any grounds whatsoever." The 
 suggestion is sometimes made that a distinction is to be 
 drawn between keeping the different classes of charges 
 proportionate and making the particular rates proportion- 
 ate. Except for the inherent difficulties of pursuing the 
 inquiry further, the writer perceives no difference in prin- 
 ciple between the two; and he has no reason to believe that 
 the distinction has foundation in law. 
 
 § 411. Relative reasonableness of rates. 
 
 The cases which come to the Supreme Court if complaint 
 is made of illegal action by State commissions arise under 
 the Fourteenth Amendment, and are therefore devoted 
 to the constitutional limitations upon commission action. 
 On the other hand, the questions which come to the Su- 
 preme Court where the power of the Interstate Commerce 
 Commission to act has been attacked have usually been 
 questions involving the statutory limitations of the Inter- 
 state Commerce Act. These obviously are different prob- 
 lems; and, as will appear later, what is not confiscation of 
 the property of a company, under the guaranties of the 
 Constitution, may be a course which, by fair interpreta- 
 tion of statutory authority under the Act, it would not be 
 reasonable to require. Such a case is Minneapolis & St. 
 Louis Railway v. Minnesota," where as has already been 
 seen it was held that a State might without violating the 
 Fourteenth Amendment reduce rates on a particular com- 
 modity below what was profitable, so long as the rates as 
 
 " Willcox et al. v. Consolidated " Interstate Com. Comm. v. West- 
 Gas Co., 212 U. S. 19, 53 L. ed. ern A. R. R. Co., 88 Fed. 186, and 
 382, 29 Sup. Ct. 192, and cases cases cited. 
 cited. » 186 U. S. 257, 22 Sup. Ct. 901. 
 
 [355] 
 
§ 412 ] Railroad Rate Regulation 
 
 a whole still produced a return which was adequate. The 
 power of the Commission to alter rates depends altogether 
 upon the fact of their unreasonableness, and in the ab- 
 sence of evidence to that effect the Commission has no 
 authority." All this may not have been so plain in regard 
 to this amendment at the outset as it has become sub- 
 sequently in the light of the decisions interpreting it. But 
 by the time that the case of Interstate Commerce Com- 
 mission V. Stickney " was decided it had become clear 
 enough that a carrier under section 15 of the Act as amended 
 was entitled to a finding by the Commission that the par- 
 ticular charge complained of was unreasonable before 
 a change could be required.'' Moreover, as that case held, 
 a charge for a service which did not give the carrier more 
 than a fair profit for performing it, was not unreasonable. 
 For the Commission to attempt to fix a new rate at the 
 out of pocket cost in place of the existing rate which in- 
 cluded a profit upon the service performed, was therefore 
 altogether beyond the statutory limitations upon the power 
 of the Commission. Probably, however, this would not 
 be an invasion of constitutional rights, since the profits 
 of the company taken as a whole apparently remained 
 sufficient. 
 
 Topic D. Proper Distribution of Costs 
 
 § 412. Law of decreasing costs. 
 
 It has been pointed out, however, in all discussions of the 
 railroad problem by economists that the fixed expenses, 
 which constitute so considerable a proportion of the dis- 
 bursements by a railroad, are to a very large extent inde- 
 pendent of the amount of its traffic carried. Therefore, 
 additional business will always be done at a decreasing 
 relative cost. The net income rises as the business expands, 
 
 15 Interstate Commerce Commis- '« 215 U. S. 98, 30 Sup. Ct. 66. 
 
 sion V. Union Pacific R. R., 212 " Southern Pacific Ry. v. Inter- 
 
 U. S. 541, 32 Sup. Ct. 108. state Commerce Commission, 219 
 
 U. S. 433, 31 Sup. Ct. 288. 
 
 [356] 
 
Cost of Particular Service [ § 413 
 
 and the law of increasing returns is again demonstrated. 
 This may be shown in the simple formula of W. M. Ac- 
 worth, the leading English authority on railway economics.'^ 
 "Expenses increase as traffic increases, but by no means 
 in direct proportion. Certain expenses — for instance main- 
 tenance of works — hardly increase at all; others — for in- 
 stance, terminal handling of goods at big stations, where 
 the staff can be normally kept fully employed — increase 
 almost as fast as the traffic. The bulk of the expense is 
 intermediate between these two extremes. On the whole, 
 a common and probably roughly accurate estimate is to 
 say that half the total expenses is fixed; half varies with the 
 traffic. That is to say, if it costs x to deal with 1,000,000 
 units of traffic, 5,000,000 units will cost not 5x, but ^x+ 
 (ixx5)=Sx. Therefore the heavier the traffic the lower 
 (profits remaining equal) need be the rate." This is no more 
 than a statement of a commonly accepted theory, that 
 unit cost decreases with increase in the units produced.^' 
 
 § 413. Cost of service for different systems. 
 
 It must be obvious from all that has been said, that cost 
 of service is a relative matter, different for different rail- 
 road systems. Upon some systems there will be grades, 
 upon others none. Some are great systems with all the 
 economies of large businesses, while others may conduct 
 small systems through sparsely settled territory. To 
 quote a specific instance from an opinion of the Commis- 
 sion: ^^ "Tested by these rules, a rate may be a very rea- 
 sonable and just rate on one railroad and not reasonable 
 and just on another. For example, a rate that would be 
 reasonable and just on the New York Central & Hudson 
 River Railroad may be so low that it would force the Min- 
 neapolis & St. Louis Railway into bankruptcy in less than 
 
 " Elements of Railway Economies, Gottron Bros. Co. v. G. & W. R. R. 
 p. 50. Co., 28 I. C. C. 38. 
 
 " Ton per mile rates and revenues ^ New Orleans Cotton Exchange 
 
 should decrease as haul increases. v. Illinois Cent. R. R., 2 Int. Com. 
 
 Rep. 777, 3 I. C. C. Rep. 534. 
 
 [357] 
 
§ 414 ] Railroad Rate Regulation 
 
 thirty days; and a rate that might be reasonable and just 
 on the Minneapohs & St. Louis Railway might be so high 
 that if attempted to be enforced on the New York Central 
 & Hudson River Railroad for thirty days it would practi- 
 cally destroy the business of the latter. This diversity 
 is most observable in the different portions of the country, 
 as, for instance, between lines of railroad in the Southern 
 States or the States of the far west, on the one hand, and 
 the railroad lines of the Middle and Eastern States on the 
 other. Where, however, railroad lines reach the same 
 common points> are located in the same territory, and com- 
 pete with each other, as well as with other lines for the 
 business of that territory, their rates are, in general much 
 the same, and this is one of the necessities of the situation. 
 Even among the rail carriers where there may be occasional 
 differences in rates that will be found substantially justified 
 by the different circumstances and conditions under which 
 the lines are operated." ^^ 
 
 § 414. Cost of service for different parts of the same system. 
 
 The point that the cost of service may be different for 
 different pa,rts of the same system was insisted upon in 
 Interstate Commerce Commission v. Lehigh Valley Rail- 
 road Company. ^^ It appeared in that case that the Inter- 
 state Commerce Commission, upon complaint of a shipper, 
 had adjudged a certain rate upon coal unreasonable. The 
 Commission based its finding upon its deductions from 
 the annual report of the defendant company that the 
 average cost of carrying a ton of coal from the Lehigh 
 anthracite regions. to Perth Amboy was 85 cents. Judge 
 Acheson held that this was an inadequate basis to justify 
 the finding that the particular rate in question was unrea- 
 sonable; he said: "If the explanation thus given by the 
 
 ''I Cost per unit of freight moved ^•'Ti Fed. 784, appeal withdrawn, 
 
 decreases with volume. Louisville & 82 Fed. 302, 27 C. C. A. 681. 
 Nashville Railroad Coal and Coke 
 Rates, 26 1. C. C. 20. 
 
 [358] 
 
Cost of Particular Service [§415 
 
 counsel for the Commission is a correct statement of the 
 method pursued by the Commission in making its esti- 
 mate of 85 cents, then, in our judgment, that method is 
 without justification. For, having adopted an estimated 
 average rate of revenue, namely, $1,495, from each ton of 
 coal carried over the 149 miles from the Lehigh and Ma- 
 hanoy regions to Perth Amboy, the Conamission assumed 
 that the expenses of the transportation of coal over this 
 particular branch of the defendant's railroad system was 
 necessarily only the average cost of the carriage of all 
 coal upon the defendant's entire system. The assump- 
 tion which thus imderHes the Commission's estimate is 
 unwarrantable. Merely because the cost of carriage of all 
 coal upon the defendant's entire railroad system from all 
 points of shipment to all destinations was 56 per cent of 
 the gross receipts from all coal is no reason for concluding 
 that upon a particular line or part of the system the cost 
 of carriage bears the same ratio to the coal receipts from 
 that particular line or part." ^' 
 
 § 415. Cost of service estimated from special expenditures. 
 
 To a certain extent the entire expense of transporting 
 may be judged from the sums expended in moving the 
 goods. When the average amounts expended in moving 
 quantities of a given commodity is known, a standard 
 is established by which it may be seen whether there is 
 not a full return to the railroad of the entire cost attribu- 
 table to the transportation of these goods. This method 
 of demonstration was used with good effect in one report 
 by the Interstate Commerce Commission upon the con- 
 tention of the trunk lines that it would be necessary for 
 them to raise the rate on grain, which was 17 1-2 cents 
 from Chicago to New York, as that rate was unremunera- 
 tive. The quotation which follows will show how the 
 
 2' Difference in transportation con- of rate comparisons. Even & Howard 
 ditions in different territories con- Fire Brick Co. v. St. L., I. M. & S. 
 sidered in determining the propriety Ry., 25 I. C. C. 141. 
 
 [359] 
 
§ 416 ] Railroad Rate Regulation 
 
 Commission came to its conclusion that the rate yielded 
 a fair return to the carrier: ^^ "As bearing upon this, cer- 
 tain testimony given in the present investigation by the 
 traffic manager of the Lake Shore & Michigan Southern 
 Railway as to the cost of moving grain over his line is in- 
 teresting and instructive. He testified that the standard 
 train upon the Lake Shore road consists of 50 cars, con- 
 taining 80,000 pounds per car; that the time occupied in 
 hauling this train from Chicago to Buffalo would be 36 
 hours, and that the cost of movement, including labor of 
 trainmen, coal consumed, oil and waste, rent of engine and 
 of cars, would approximate $260. He gave the items mak- 
 ing up this total, which need not be repeated here. The 
 traffic manager of the New York Central Company was 
 unable to give the corresponding figures from Buffalo to 
 New York, but it appeared that a standard locomotive 
 would haul, with the assistance of a helper at one or two 
 points, this train, or an even heavier train, from Buffalo _ 
 to New York in approximately the same time and at ap- 
 proximately the same expense, the distance being about 
 100 miles less. The total train expense, therefore, of mov- 
 ing this traffic from Chicago to New York would be $520, 
 while the total revenue derived from it, at 17 1-2 cents 
 per 100 pounds, would be $7,000." ^^ 
 
 § 416. Distance as a factor. 
 
 As a rule, in the transportation of freight by railroads, 
 while the aggregate charge is continually increasing the 
 farther the freight is carried, the rate per ton-mile is con- 
 stantly growing less all the time, making the aggregate 
 charge less in proportion every hundred miles after the 
 first, arising out of the character and nature of the service 
 performed, and the cost of the service; and thus staple 
 
 ^* Prouty, Commissioner, in Re decrease as distance increases, to 
 
 Advances in Freight Rates, 9 I. C. C. disregard rule is not of necessity a 
 
 Rep. 382. discrimination. Boston Chamber of 
 
 ^' While it is a fundamental Commerce v. A., T. & S. F. Ry. Co., 
 
 maxim that rate per ton-mile shall 28 I. C. C. 230. 
 
 [360] 
 
Cost of Particular Service [ § 417 
 
 commodities and merchandise are enabled to bear the 
 charges of this mode of transportation from and to the 
 most distant portions of the country. ^^ The Act to Reg- 
 ulate Commerce, so far from throwing hampering restric- 
 tions or obstacles in the way of the operation of this 
 salutary rule, gives it all the benefit and aid of its sanction 
 and safeguards by providing that the carrier shall be 
 entitled to receive a reasonable compensation for the 
 service performed upon open published rates, against 
 which no competitor can take advantage by allowing 
 shippers secret rebates and drawbacks in order to get the 
 business. ^^ In the nature of things rates on long hauls 
 usually are, and as a rule should be, lower in proportion 
 to distance than local rates on short hauls of the same 
 commodity. For this reason the rate per ton-mile is not 
 controlling, and cannot be enforced upon carriers by the 
 Commission; but distance is of great importance in fixing 
 rates, and must be considered.^* 
 
 § 417. Amount of traffic as a factor. 
 
 As it is cheaper to move goods in bulk rather than in 
 small lots, a smaller relative rate is permissible upon 
 carload lots than on less than carload lots; but this differ- 
 ence must be no more than is reasonable.^' Before allow- 
 ing a carload rating for a carload shipment, a carrier is 
 allowed to require that goods shall be loaded at one time 
 
 2« New York Produce Exchange v. Commerce v. Chicago, M. & St. P. 
 
 Baltimore & O. R. R., 7 I. C. C. Rep. Ry., 7 1. C. C. 481. 
 
 612; La Crosse, M. & J. Union v. There can be no rule or process 
 
 Chicago, M. & S. P. Ry., 2 Int. Com. whereby definite absolute maximum 
 
 Rep. 277. limit of reasonableness of rate can be 
 
 " Farrar v. East Tenn. & G. fixed with certainty of a demonstra- 
 
 Ry., 1 Int. Com. Rep. 703, 1 1. C. C. tion. Anardarko Cotton Oil Co. v. 
 
 480; Crews v. Richmond & D. R. A., T. & S. F. Ry., 20 I. C. C. R. 43. 
 
 R., 1 Int. Com. Rep. 703, I. C. C. ^ Duncan v. Atchison, T. & S. F. 
 
 401. R. R., 4 Int. Com. Rep. 385, 6 1. C. C. 
 
 «» Freight Bureau v. Cincinnati, 85; Business Men's League v. At- 
 
 N. O. & T. P. Ry., 7 I. C. C. Rep. chison, T. & S. F. R. R., 9 I. C. C. 
 
 180; and see Milwaukee Chamber of Rep. 318. 
 
 [361] 
 
§ 418 ] Railroad Rate Regulation 
 
 and place, that but a single bill of lading shall be allowed, 
 and that the shipment shall be by one consignor to one 
 consignee.^" So, while a carrier should receive a greater 
 compensation in the aggregate for hauling a carload of 
 large tonnage than one of less tonnage, other things 
 being equal, as a general rule, the rate per hundredweight 
 should be less in the former than in the latter case.'^ 
 The large bulk in which a commodity moves by railroad 
 will for the same reason justify a lower rate.^^ Neverthe- 
 less, though carload rates will be justified, it was once 
 held that a carrier cannot be forced to grant lower rates 
 for a carload,'^ or for a larger carload than the ordinary 
 load.'* Density of traffic as element to be considered in 
 determining reasonableness of rate.'^ And it is funda- 
 mental also that a rate should decrease as density of 
 traffic increases.'^ For example, salt is very desirable 
 traffic from a transportation standpoint. It loads heavily, 
 is not liable to loss or damage in transit, can be handled 
 at the convenience of the carrier, and affords a uniform 
 business — all these considerations call for a low rate of 
 transportation.'^ Ordinarily the same rate is appUed to 
 all lumber, being a bulk freight, without reference to its 
 value or condition; and, as a matter of fact, this rate 
 frequently includes not only manufactured lumber, but 
 articles made from it, like doors, sash, blinds, etc.'* 
 
 § 418. Costs of special service. 
 
 A higher rate will be justified where special service is 
 
 ™ Buckeye Buggy Co. v. Cleveland, '* Planter's Compress Co. v. Cleve- 
 
 C, C. & St. L. Ry., 9 I. C. C. Rep. land, C, C. & St. L. Ry., 11 I. C. C. 
 
 620; C. S. Bell Co. v. Baltimore & Rep. 382. 
 
 0. S. Ry., 9 1. C. C. Rep. 632. '^ Railroad Commission of Tex. v. 
 "Murphy v. Wabash R. R., 3 A., T. & S. F. Ry., 20 I. C. C. R. 463. 
 
 Int. Com. Rep. 725, 5 I. C. C. 122. »« In re Advances in Rates, East- 
 
 ^^ Re Rates and Charges on Food em Case, 20 1. C. C. R. 243. 
 
 Products, 3 Int. Com. Rep. 93, 4 '' Railroad Commission of Kansas 
 
 1. C. C. 48. V. A., T. & S. F. Ry., 22 I. C. C. 407. 
 '' Railroad Commrs. v. Weld, 96 '* Oregon & W. Lumber Mfrs. 
 
 Tex. 394, 73 S. W. 529. Ass'n v. S. P. Ry., 21 I. C. C. 389. 
 
 [362] 
 
Cost of Particular Service [ § 419 
 
 required, such as rapid transit, special cars, and speedy 
 delivery for perishable freight.'' This increased rate must, 
 nevertheless, remain reasonable.^" The amount of the 
 reasonable rate may also be affected by other special 
 circumstances. Thus in arriving at what is a just and 
 reasonable rate, on freight transported by a carrier on a 
 short local line having but a small volume of business, 
 where the cost of transportation is exceptionally great, 
 arising from steep grades, sparse population, and light 
 traffic, these are circumstances and conditions of control- 
 ling weight in the making of the rates, and cannot be 
 overlooked when a question of their reasonableness is 
 involved.^' In the same way a higher rate is justified 
 where the carrier goes to expense in collecting his freight.''^ 
 Charges may properly be made somewhat higher for trans- 
 portation of show cases in crates than in boxes; show cases 
 ordinarily are composed largely of glass or woods of value, 
 and the risk of damage is greater when shipped in crates 
 than in boxes. ^^ In making rates on explosives, carriers 
 should vary rates according to risk attendant upon trans- 
 portation of each particular kind." Likewise, empty-car 
 movement, and meager unbound traffic, are to be con- 
 sidered in rate making on a class of traffic. ^'^ 
 
 § 419. Conditions affecting transportation costs. 
 
 A lower rate may be made when, by the arrangement 
 
 3« Delaware State Grange v. N. Y. Transp. v. C. & S. Ry., 7 I. C. C. 
 
 P. & N. R. R., 3 Int. Com. Rep. Rep. 601; Georgia Peach Growers' 
 
 554, 4 I. C. C. 588; Loud v. South Ass'n v. Atlantic C. L. Ry., 10 
 
 CaroUna Ry., 4 Int. Com. Rep. 205, I. C. C. Rep. 255. 
 
 5 I. C. C. 529; Newland v. Northern *« Howell v. New York, L. E. & 
 Pacific R. R., 4 Int. Com. Rep. 474, W. R. R., 2 Int. Com. Rep. 162, 2 
 
 6 I. C. C. Rep. 131. I. C. C. 272. 
 
 "Board of Raiboad Comrs. v. ■•' Wadell Show Case & Cabinet 
 
 Florence Ry., 8 I. C. C. Rep. 1; Co. v. M. C. R. R. Co., 22 I. C. C. 
 
 Rates on Cantaloupes, 26 I. C. C. R. 106. 
 
 IQl ■'■' Blumenstein v. P. & R. Ry., 
 
 " Rice V. Western N. Y. & P. R. 21 1. C. C. R. 90. 
 
 R., 2 Int. Com. Rep. 298, 2 I. C. C. " Davis Bros. Lumber Co., Ltd., 
 
 389; Savannah Bureau of Freight & v. C, R. I. & P. Co., 257. 
 
 [3631 
 
§ 419 ] Railroad Rate Regulation 
 
 for shipment, liability to a certain extent is released.^" 
 And when ticket is bought before taking the train a lower 
 rate may be made than if fare is paid to the conductor.*' 
 So a different rate may be made for summer and win- 
 ter, if traffic conditions differ with the seasons.*^ When 
 a practice had existed on the part of certain carriers of 
 live cattle to make a carload rate irrespective of weight, 
 leaving the shipper to load into the car as many cattle as 
 he pleased and was able to put into it, and the carriers 
 substituted for this practice the rule that while naming a 
 car-lot rate they prescribed a minimum weight for a car- 
 load, and then charged by the hundred pounds in propor- 
 tion to the car-lot rate for any excess over the minimum, 
 it was held that this rule was not unlawful.** A carrier, 
 which had not provided track scales at stations, prescribed 
 a rule or regulation forbidding shippers to load grain in 
 cars beyond a specified weight above the market capacity 
 under a so-called "penalty" of increased rates on the 
 excess weight; this was held not unreasonable provided the 
 increase in charges for excessive weight is not unreason- 
 able, as the margin between such maximum and the 
 carrier's minimum carload weight for grain is so wide that 
 shippers may, without scales, readily comply with both 
 rules. ^^ But unreasonable conditions may not be imposed. 
 A shipper should not be subjected to. unnecessary restric- 
 tions as to the kind of case or package he should use." 
 To make a different rate on coal loaded by tipple than for 
 coal loaded from teams is not reasonable.^^ And a differ- 
 
 « Duncan v. Atchison, T. & S. F. » Suffern v. Indiana, D. & W. 
 
 Ry., 4 Int. Com. Rep. 385, 6 I. C. C. Ry., 7 I. C. C. 255, and see Phelps v. 
 
 Rep. 85. Texas & P. Ry., 4 Int. Com. Rep. 363, 
 
 " Cist V. Michigan Central R. R., 6 I. C. C. Rep. 36; Rice v. Cincinnati, 
 
 10 1. C. C. Rep. 217. W. & B. R. R., 3 Int. Com. Rep. 841, 
 
 *' Interstate Commerce Comm. v. 5 I. C. C. 193. 
 
 Louisville & N. R. R., 5 I. C. C. =i Rhode Island Egg & B. Co. v. 
 
 Rep. 656. Lake Shore & M. S. R. R., 4 Int. 
 
 <' Leonard v. Chicago & A. R. R., Com. Rep. 512, 6 I. C. C. Rep. 176. 
 
 2 Int. Com. Rep. 599, 3 I. C. C. ^2 Glade Coal Co. v. Baltimore & 
 
 241. O. R. R., 10 1. C. C. 226. 
 
 [364] 
 
Cost of Particular Service [ § 420 
 
 ence in the rate based on the ultimate destination of the 
 goods is not justified." When a conditional rate is justi- 
 fied, the difference must be no more than is reasonable 
 under the circumstances.^* And if a difference in rate is 
 authorized, it is only while the circumstances justifying it 
 exist. ^'^ 
 
 § 420. Current theories as to relative rates. 
 
 All the principles governing the fixing of rates which 
 have ever been suggested may be seen in brief compass 
 in an elaborate opinion of Judge Bethea: -^^ "There are a 
 great many factors and circumstances to be considered in 
 fixing a rate.^^ Among other things: (1) The value of the 
 service to the shipper, including the value of the goods and 
 the profit he could make out of them by shipment. This 
 is considered an ideal method, when not interfered with 
 by competition or other factors. It includes the theory so 
 strenuously contended for by petitioners, the commission, 
 and its attorneys, of making the finished product carry a 
 higher rate than the raw material. This method is con- 
 sidered practical, and is based on an idea similar to taxa- 
 tion.^* (2) The cost of service to the carrier would be an 
 ideal theory, but is not practical. Such cost can be reached 
 approximately, but not accurately enough to make this 
 factor controlling. It is worthy of consideration, how- 
 ever.^' (3) Weight, bulk, and convenience of transporta- 
 tion. (4) The amount of the product or the commodity 
 
 " Hope Cotton Oil Co. v. Texas & ^'' Citing Noyes, Am. R. R. Rates, 
 
 P. Ry., 10 I. C. C. Rep. 696. 61, 85-109. 
 
 '•'' New Orleans Cotton Exch. v. '* Citing Interstate Commerce 
 
 Illinois Central R. R., 2 Int. Com. Commission v. B. & O. Ry., 43 Fed. 
 
 Rep. 777, 3 I. C. C. 534. 37. 
 
 55 Re Relative Tank & Barrel *» Citing Western Union Tel. Co. 
 
 Rates, 2 Int. Com. Rep. 245, 2 v. Call Publishing Co., 181 U. S. 
 
 I. C. C. 365. 92, 21 Sup. Ct. 561, 45 L. ed. 765; 
 
 ^ Interstate Commerce Commis- Interstate Commerce Commission v. 
 
 sion V. Chicago Gt. Western R. R., Detroit, Grand Haven & Milwaukee 
 
 141 Fed. 1003. R. R., 167 U. S. 6.33, 17 Sup. Ct. 986, 
 
 42 L. ed. 306, etc. 
 
 [365] 
 
§ 421 ] Railroad Rate Regulation 
 
 in the hands of a few persons to ship or compete .for, 
 recognizing the principle of selhng cheaper at wholesale 
 than at retail.*" (5) General pubUc good, including good to 
 the shipper, the railroad company and the different 
 localities.*^ (6) Competition, which the authorities, as 
 well as the experts, in their testimony in these cases, 
 recognize as a very important factor.'^ None of the above 
 factors alone are considered necessarily controlhng by the 
 authorities. Neither are they all controlhng as a matter 
 of law. It is a question of fact to be decided by the 
 proper tribunal in each case as to what is control- 
 ling." *' 
 
 § 421. Conclusion as to proportionate rate. 
 
 As a result of these considerations, the hypothesis may 
 be drawn that a rate, duly proportioned to what is truly 
 the cost of service, should be established for each article 
 of traffic. In all cases, where other factors in the situation 
 are not such as to imperatively demand recognition, this 
 rate should be fixed according to the share of the entire 
 burden of charge which ought reasonably to be borne by 
 that particular article. In determining the reasonable 
 share of the burden to be borne by an article, various 
 considerations must be weighed, and the rate when finally 
 established will be determined as a result of all such con- 
 siderations. It must be clear, therefore, that the establish- 
 ment of the particular rate is not, like the establishment 
 of the general schedule of charges, a matter which can be 
 settled altogether by a mathematical formula. There are 
 
 ™ Citing Int. Com. Comm. v. B. & U. S. 144, 18 Sup. Ct. 45, 42 L. ed. 
 
 O. Ry., 145 U. S. 263, 12 Sup. Ct. 414; East Tennessee, Virginia & 
 
 844, 36 L. ed. 699. Georgia Railway Co. v. Int. Com. 
 
 " Citing Int. Com. Comm. v. Comm., 181 U. S. 1, 21 Sup. Ct. 516, 
 
 B. & O. Ry., 145 U. S. 263, 12 Sup. 45 L. ed. 719, Texas & Pac. Ry. Co. 
 
 Ct. 844, 36 L. ed. 699. v. Int. Com. Comm., 162 U. S. 197, 
 
 ^'' Citing Phipps v. London & 16 Sup. Ct. 666, 40 L. ed. 940; Int. 
 
 Northwestern Ry., 2 Q. B. D. 229. Com. Comm. v. Louisville & Nash- 
 
 «' Citing Int. Com. Comm. v. ville R. R. Co., 190 U. S. 273, 23 
 
 Alabama Midland Ry. Co., 168 Sup. Ct. 687, 47 L. ed. 1047, etc. 
 
 [366] 
 
Cost of Particular Service [ § 421 
 
 too many economic factors operating in bringing about a 
 particular rate for that to be possible really. The division 
 of rates among the particular commodities involves judg- 
 ment and experience; it is not an exact division, but only 
 the closest possible approximation to fairness. 
 
 [367] 
 
CHAPTER X 
 
 VALUE OF SERVICE RECEIVED 
 
 5 430. Provisions of the Act. 
 431. Rates based upon value. 
 
 Topic A. Value as the Basis 
 
 \ 432. What the traffic will bear. 
 
 433. Essential defects in the principle. 
 
 434. Legal limitations peculiarly necessary. 
 
 435. Value of service to shipper. 
 
 436. Value of the goods. 
 
 437. Limit of value of service. ^ 
 
 438. Traffic will continue to move at unfair rates. 
 
 439. Worth of the service to the owners. 
 
 440. Treating the schedule as a whole. 
 
 441. Doctrine hardly applicable to passenger fares. 
 
 Topic B. Rates Reasonable Per Se 
 
 j 442. Carrier entitled to reasonable compensation. 
 
 443. General principles as to reasonableness. 
 
 444. Customary rate presumably reasonable. 
 
 445. Rates unreasonable in themselves. 
 
 446. What makes rates unreasonable? 
 
 447. Current rates for other transportation. 
 
 448. Comparison with other rates. 
 
 449. Evidence inadmissible unless conditions are similar. 
 
 450. Comparison of rates between different localities. 
 
 451. Usual rates govern passenger fares. 
 
 Topic C. Rates Dictated by Competition 
 
 i 452. Rates may be made to meet competition. 
 
 453. Competition as a factor in rate making. 
 
 454. Policy for permitting competitive rates. 
 
 455. Rates low enough to hold business. 
 
 456. Reduction below a remunerative basis. 
 
 457. Standard rate among competing lines. 
 
 458. Competition not a ground for raising rates. 
 
 459. Absence of competition does not justify increase, 
 
 460. No obligation to meet competition. 
 
 461. Competition in passenger fares. 
 
 i 368 ] 
 
Value of Service Received [ § 430 
 
 Topic D. Bates Designed to Equalize Adoantages 
 
 § 462. Operation of the principle of equalization. 
 
 463. Limitations upon the Commission. 
 
 464. Rates made from a commercial standpoint. 
 
 465. Rates should not equalize differences in value. 
 
 466. Carriers not obliged to equalize disadvantages. 
 
 467. Protection of natural advantage. 
 
 468. No right to build artificial markets. 
 479. No equalization of patrons. 
 
 470. Equalization of advantage as a factor. 
 
 471. Passenger fares slightly affected by this principle. 
 
 § 430. Provisions of the Act. 
 
 The provisions aheady discussed, to the effect that 
 rates must be reasonable, are supplemented by the re- 
 quirements, more fully considered later, that rates shall 
 not be disproportionate. As has been seen, these two re- 
 quirements are combined in section 15 establishing the juris- 
 diction of the Commission to see to it that charges shall 
 not be unjust or imreasonable, or unfair or unjustly dis- 
 criminatory or unduly preferential or prejudicial. In sec- 
 tion 3, as was provided in the original Act, it is said that 
 it shall be unlawful for any common carrier subject to the 
 provisions of this Act to make or give any undue or un- 
 reasonable preference or advantage to any particular per- 
 son, company, firm, corporation, or locality, or any par- 
 ticular description of traffic, in any respect whatsoever, 
 or to subject any particular person, company, firm, cor- 
 poration, or locality, or any particular description of traffic, 
 to any undue or unreasonable prejudice or disadvantage 
 in any respect whatsoever. And to section 4 a para- 
 graph was added recently to the effect that whenever 
 a carrier by railroad shall in competition with a water 
 route or routes reduce the rates on the carriage of any 
 species of freight to or from competitive points, it shall 
 not be permitted to increase such rates, imless after hear- 
 ing by the Commission it shall be foimd that such pro- 
 posed increase rests upon changed conditions other than 
 the elimination of water competition. What is undue pref- 
 24 [ 369 ] 
 
§§431, 432 ] Railroad Rate Regulation 
 
 erence under these provisions of the Act is discussed at 
 large in Chapter XIV. 
 
 § 431. Rates based upon value. 
 
 It is sometimes suggested that the value of the service 
 to the customer is "what the traffic will bear," that is, 
 what he will be willing to pay rather than lack the carrier's 
 service. In one sense, the service is worth what one will 
 pay for it. This is the rule which always appeals to the 
 company as fair and just. And indeed this consideration 
 has some place in every philosophy of rate making; al- 
 though it is submitted that it is a dangerous principle 
 which may often operate to the disadvantage of the 
 public unless it is much modified in many cases. So neces- 
 sary is some such principle felt to be by traffic managers 
 that it will always be found to be continually employed 
 in rate making; and this is one of the prime causes for the 
 necessity of governmental revision, for the protection of 
 the public, of the rates established by the carriers. The 
 real truth of this matter seems to be that the pohcy of 
 charging what will produce the largest volume of business 
 is fundamental in private businesses, but often opposed 
 to the law governing public businesses. 
 
 Topic A. Value as the Basis 
 
 § 432. What the traffic will bear. 
 
 It is often urged in discussion of the railway rate 
 problem that it is justifiable to make rates according to 
 what the traffic will bear. This again is a factor in the 
 situation undoubtedly; for the management in order to get 
 business enough to carry on its service with economy and 
 profit must make some concessions to the low grade com- 
 modities which it will inevitably recoup from the high 
 grade freight. And yet this is clearly a principle which 
 can only be justified under strict limitations. These are 
 well discussed by the Commission in the quotation which 
 [370] 
 
Value of Service Received [ § 433 
 
 follows:*^ "There was the further suggestion running 
 through the testimony of all the witnesses that, after all, 
 a rate was purely a traffic question which could be prop- 
 erly estimated only by traffic and commercial conditions. 
 The real question was said to be, Will the traffic bear 
 these higher rates? One witness distinctly affirmed that 
 no rate was unreasonable under which traffic would move 
 freely, and that since it was for the interest of the carriers 
 to move traffic, there was no probability that these 
 rates were unreasonable, or that unreasonable rates would 
 ever be imposed. This idea contains a half truth. With 
 respect to some kinds of traffic the statement is correct. 
 It is for the interest of the railway to create business 
 upon its fine, and in the legitimate pursuit of that in- 
 terest it fosters industries by the making of rates which 
 would not otherwise be put in force." "'^ 
 
 § 433. Essential defects in the principle. 
 
 Any considerable concession to the principle of charging 
 what the traffic will bear is dangerous. The carrier is 
 acting primarily for the benefit, not for the exploitation 
 of the public. To allow a carrier, for instance, to charge 
 what the traffic will bear is to foster a continual increase 
 of railroad rates. The problem was concisely and unan- 
 swerably stated and discussed by Mr. District Judge 
 Speer in the case of Tift v. Southern Railway.*^ In this 
 
 '" The quotation which follows is In all classifications consideration 
 
 from Re Proposed Freight Rates, 9 must be given to what may be termed 
 
 I. C. C. Rep. 382. public policy, the advantage to the 
 
 "The richest example'' of the community of having some kinds 
 
 charging-what-traffic-will-beartheory. of freight carried at a less rate than 
 
 In re Express Rates, 24 I. C. C. 380. other kinds; this is the true meaning 
 
 *'To base rates upon shipper's of the phrase "what the traffic will 
 
 ability to pay, is to base rates upon bear." In re Advances on Coal to 
 
 cost of production rather than cost Lake Ports, 22 I. C. C. R. 604. 
 
 of carriage; this is in effect a usurpa- "* 138 Fed. 753; see language in 
 
 tion of power of regulation of in- Tift v. Southern Ry., 10 I. C. C. 548. 
 
 dustries and commerce by the rail- Limitations to rule that a carrier 
 
 roads. In re Advances in Rates, should not charge more than an 
 
 Western Case, 20 I. C. C. 307. article can bear, discussed. Bartles- 
 
 [371] 
 
§ 434 ] Railroad Rate Regulation 
 
 case the Southeastern Freight Association, an association 
 including the defendant railways, had raised the freights 
 on liunber from Georgia to the Northwest. At first ship- 
 ments almost ceased; but with a revival of business 
 they began again. Builders felt themselves obliged to 
 have it, whatever the price, and whatever the rate, and 
 large shipments were made on the advanced rates. The 
 fact of the large shipments was relied upon to show that 
 the new rates were not unduly high, but the court said that 
 it was in no sense related to the reasonableness or unrea- 
 sonableness of the rate. "Indeed, to concede the prin- 
 ciple for the fixation of rates upon which the railroads 
 through the mediimi of the Southeastern Freight Associa- 
 tion have acted in this case would concede their power 
 to levy for no better service augmentation of tolls for 
 every increase of profit in every line of endeavor won by 
 the enterprise, sagacity, and industry of the American 
 people. It is superfluous to add that a government of law, 
 and not of men, will never tolerate such domination and 
 control of the trade, manufactures, and commerce of the 
 American people." ^'' 
 
 § 434. Legal limitations peculiarly necessary. 
 
 It is urged sometimes that this principle of charging 
 what the traffic will bear contains its own safeguards; 
 for, if more is charged than the value of the service to the 
 shipper, shipments will cease; and traffic managers, realiz- 
 ing this, as they are in close touch with the situation, will 
 never intentionally or permanently charge more than the 
 transportation is worth to the goods carried. The answer 
 to this seems to be that in many instances shippers will 
 
 ville Salvage Co. v. M., K. & T. Ry., of Omaha v. A. & S. R. Ry., 19 I. 
 
 25 I. C. C. 672. C. C. 419. 
 
 " The Commission is not ready The mere fact that traffic will 
 
 to accept theory that rates may law- bear the imposition does not justify 
 
 fuUy be increased as long as traffic unreasonable rate. Railroad Com- 
 
 moves freely. Commercial Club mission of Nev. v. S. P. Co., 19 I. C. 
 
 C. 238. 
 
 372 
 
Value of Service Received [ § 435 
 
 pay for the transportation of goods more than the true 
 value of the transportation, if that is necessary in order 
 to get their goods to market. They will shift this undue 
 burden upon the consumer if they can, and if not they 
 will be obliged to forego a part, or in extreme cases all, 
 of their legitimate profit in order to get their products 
 sold at all. While the rule that a carrier should not 
 charge more than the traffic can bear has some weight 
 with a carrier in the making of its rates, it does not im- 
 pose upon a carrier any duty to carry traffic at a loss."* 
 Whatever might be the policy in this regard, to adjust 
 rates to correspondingly fluctuate with the values of prod- 
 ucts moving under them is impossible."^ Nothing is 
 better established than that the Commission may not make 
 the needs of the shipper the basis of reasonable rates.™ 
 A shipper is entitled to the transportation that he desires 
 on rates that are reasonable, not when tested by the fact 
 that the carrier may earn larger revenues by hauling his 
 wares, but on rates that are reasonable in accordance with 
 the usual and ordinary tests that are applied to rates.''' 
 
 § 435. Value of service to shipper. 
 
 The value of the service to the shipper should be con- 
 sidered, which includes a consideration of the profit that 
 the shipper can make by having his goods transported 
 to their destination.'^ This was once said by District 
 Judge Bethea to be "an ideal method;" "practical, and 
 is based on an idea similar to taxation." ''^ Neverthe- 
 less, the correctness of this view may be doubted; at all 
 events, the Commission has rejected any theory to the 
 
 «« Bartlesville Salvage Co. v. M., waukee v. C, R. I. & P. Ry., 15 I. C. 
 
 K. & T. Ry., 25 I. C. C. 672. C. 460. 
 
 "' Ponchatoula Farmers' Ass'n v. '^ Re Rates and Charges on Food 
 
 I. C. R. R., 19 I. C. C. 513. Products, 3 Int. Com. Rep. 93, 4 
 
 '" Superior Commercial Club v. I. C. C. 48. 
 
 G. N. Ry., 25 I. C. C. 342. " Interstate Commerce Commis- 
 
 " Chamber of Commerce of Mil- sion v. Chicago G. W. Ry., 141 Fed. 
 
 1003. 
 
 [ 373 ] 
 
§ 436 ] Railroad Rate Regulation 
 
 effect that rates may be increased by successive advances, 
 so long as traffic moves freely.^^ But, on the other hand, 
 the Commission has said repeatedly that consideration 
 must be given to the value of the service in determining 
 reasonableness of rates." It is tolerably well settled by 
 authority that value is nothing but a factor to be considered, 
 and by no means a controlling factor in the determination 
 of the reasonableness of a rate/* The determination of a 
 reasonable rate rests in the service performed, the risk 
 involved, the value of the article, and the degree of care 
 required to be exercised; but the use to which articles are 
 put, without any difference between them and dissimilarity 
 in conditions under which the transportation is performed, 
 may not lawfully be made the basis for a difference in 
 charge." It follows that carriers are not justified in raising 
 rates on the ground that the industries served have greatly 
 prospered under the old rates and can bear the advance; 
 but the lawfulness of an advance in rates must be deter- 
 mined by their reasonableness.^* 
 
 § 436. Value of the goods. 
 
 The value of the goods carried is obviously to be con- 
 sidered to a certain extent in determining the reasonable- 
 ness of the rate, since the greater the value the greater 
 the risk.''^ But the value of the goods cannot be made 
 
 '* Commercial Club of Omaha v. C. Rep. 505; Tift v. Southern Ry., 
 
 A. & S. Ry., 19 I. C. C. 419. 10 I. C. C. Rep. 648. 
 
 '* Coke Producers Ass'n of Con- " Davis v. West Jersey Express 
 
 nellsville v. B. & O. R. R., 27 I. C. C. Co., 16 I. C. C. 214. 
 125. " Oregon & Washington Lumber 
 
 ™ See generally, Cincinnati Freight Mfrs. v. V. P. R. R., 14 I. C. C. 1. 
 Bureau v. Cincinnati, N. O. & T. ™ Interstate Commerce Commis- 
 
 P. Ry., 4 Int. Com. Rep. 592, 6 I. sion v. Delaware, L. & W. R. R., 64 
 
 C. C. Rep. 195; F. Schumacher Mill- Fed. 723, 5 I. C. C. Rep. 144; In- 
 
 ing Co. V. Chicago, R. I. & P. Ry., terstate Commission v. Chicago G. 
 
 61. C.C. Rep. 61; In re Proposed Ad- W. Ry., 141 Fed. 1003; Howell v. 
 
 vances in Freight Rates, 9 I. C. C. New York, L. E. & W. Ry., 2 Int. 
 
 Rep. 382; Central Yellow Pine Assoc. Com. Rep. 162, 2 I. C. C. 272; Colo- 
 
 V. lUinois Central R. R., 10 I. C. rado F. & I. Co. v. Southern Pacific 
 
 [374] 
 
 Co., 6 I. C. C. Rep. 488. 
 
Value op Service Received [ § 436 
 
 an arbitrary standard for fixing the compensation, regard- 
 less of other factors.*" The value of an article is but one 
 of many elements to be considered, especially where there 
 is no additional cost or extra service rendered in transporta- 
 tion of articles of greater value.*^ Thus a higher rate on 
 hardwood than on yellow-pine lumber is not warranted 
 by additional returns derived from the transportation of 
 hardwood.*^ Although value is one element considered 
 in fixing rates, how important it is depends upon circum- 
 stances of particular cases.*' But certainly no impro- 
 priety exists in a graduation of rates scheduled by the 
 carrier scientifically in accordance with the actual values 
 of specified commodities.*^ Likewise the quality of the 
 commodity is to be considered in determining the reason- 
 ableness of rate, to the extent that this affects transporta- 
 tion itself. But to make charges correspondingly fluctuate 
 with values of products, and resultant fluctuations of 
 carrier's risk is impossible. It follows that rates on 
 manufactured products ought generally to be higher than 
 the rates on the raw materials from which they are 
 made.*^ And smithing coal, being of greater value, may 
 properly be charged a higher rate than ordinary bitumin- 
 ous coal.** While there is no objection to a special rate 
 based on depreciated value of damaged goods, there is 
 no justification for special rates on unsalable goods.*' 
 And the Commission has recognized that scrap tin plate, 
 being of little value, can move only under rate relatively 
 
 » Grain Shippers' Assoc, v. Illinois R. G. Ry., 20 I. C. C. R. 410; Rosen- 
 Central R. R., 8 I. C. C. Rep. 158; blatt & Sons v. C. & N. W. Ry., 
 Georgia Peach Growers' Assoc, v. 20 I. C. C. R. 447. 
 Atlantic C. L. Ry., 10 I. C. C. 18; »< Ponchatoula Farmers' Ass'n ». 
 Ohio Allied Milk Product Shippers I. C. R. R., 19 I. C. C. R. 513. 
 V. E. R. R., 21 I. C. C. 522. '^ Bulte Milling Co. v. C. & A. 
 
 " Blue Grass Lumber Co. v. L. & R. R., 15 I. C. C. 351. 
 
 N. R. R., 26 I. C. C. 438; KeUer v. «« Sligo Iron Store Co. v. V. P. R. 
 
 St. L. S. Ry., 21 1. C. C. 488. R., 19 I. C. C. 527. 
 
 '2 In the Matter of Released Rates, '' In re Reduced Rates on Returned 
 
 13 I. C. C. 550. Shipments, 19 I. G. C. R. 409. 
 
 8' Browne Grain Co. v. F. W. & 
 
 [375] 
 
§ 437 ] Railroad Rate Regulation 
 
 low compared with other articles usually classed as junk.** 
 On a demand formerly made that the rates on chinaware 
 be graded according to value, the Commission, while de- 
 clining to do so in that instance, suggested that there 
 are many reasons for adopting such a basis of rates, and 
 referred the consideration of such a plan to the carriers.*" 
 As the Commission has repeatedly recognized that value 
 is one of the established measures of a rate, it has recently 
 held that value justified a difference in rates between 
 liquid sheep dip and liquid tree spray."" 
 
 § 437. Limit of value of service. 
 
 It is clear, at any rate, that the charge is not necessarily 
 limited to the advantage which the customer derives from 
 the service. Thus where farmers in the west were shipping 
 their grain for sale to the eastern markets, and they com- 
 plained of the freight rates because after paying the rates 
 they could not always realize the cost of production, the 
 Commission held that the freight rates could not be so 
 limited that the shipper should always be able to realize 
 a profit, while they also held that the charges should have 
 a reasonable relation to the cost of production and the 
 advantage obtained by the producer from the shipment."^ 
 "Unfortunate it may be, but still of necessity the claims 
 of the shipper must wait upon the rights of those whose 
 services he employs and whose property he uses. The 
 employees who run the train may have neither brick, com 
 nor railroad investment, but they must be paid for their 
 services. The road must be repaired and bridges mended. 
 Actual and honest investment must receive fair reward. 
 All this must be paid before the profits or actual cost of 
 producers are paid unless the services and property of 
 others are to be appropriated to the use of those who for 
 
 «* Vulcan Detinning Co. v. U. P. ""Bernheim & Co. v. O. R. R. & 
 
 R. R. Co., 21 I. C. C. R. 93. N. Co., 25 I. C. C. 156. 
 
 «' Union Pacific Tea Co. v. Penn. '^ In re Rates and Charges on Food 
 
 R. R., 14 I. C. C. 545. Products, 3 Int. Com. Rep. 93, 4 I. 
 
 C. C. Rep. 48. 
 
 376] 
 
Value of Service Received [ § 438 
 
 the time may be engaged in an unprofitable business or 
 disadvantageously located industry. We think it is true 
 that at the prices which have at times prevailed since the 
 gathering of the last crop, corn from the most distant fields 
 could not be marketed at actual cost of production and 
 pay reasonable rates. But the evU cannot be remedied 
 without taking the services or property of men engaged in 
 one business or employment and transferring them to those 
 engaged in other employments. To make such transfer is a 
 prerogative not to be exercised by any tribunal." '^ 
 
 § 438. Traffic will continue to move at unfair rates. 
 
 From a legal point of view it is a conclusive answer to 
 the economic argument, that people will continue to ship 
 goods even at unfair rates:'' "When, therefore, these 
 traffic managers met in New York and determined to ad- 
 vance these rates, they simply laid upon the people of 
 this coimtry a tax of 2 1-2 cents per hundred pounds. 
 If they were entitled to it, that action was justified; other- 
 wise it was unjustified. The fact that the traffic still moves, 
 that people still eat flour and cornmeal, does not by any 
 means conclusively show that the rate is reasonable. As 
 we have already said, the reasonableness of every rate 
 may be presented in two aspects: First, is it reasonable 
 as tested by cost of service, by comparison with other 
 rates, with respect often to commercial conditions? Second, 
 is it reasonable as a tax imposed by a public servant for 
 the performance of a quasi-public duty? " *'' 
 
 "'' An element of importance in Hafey v. St. L. & S. F. R. R., 15 I. 
 
 the fixing of rates is the value of C. C. 245. 
 
 the article shipped, since it affects '' Re Proposed Advances in Freight 
 
 the value of service to the shipper. Rates, 9 I. C C. Rep. 382. 
 When, however, the carrier has es- '* While the fact that traffic moves 
 
 tablished a reasonable rate on a freely has some bearing upon the 
 
 given commodity, it cannot be re- reasonableness of the rates, it is not 
 
 quired to change that rate to accord true that merely because traffic does 
 
 with the differing values of the com- not move the rates are therefore un- 
 
 modity produced by various shippers. reasonable. R. R. Com'rs of Fla. v. 
 
 S. Exp. Co., 28 I. C. C. 634. 
 
 [377] 
 
§ 439 ] Railroad Rate Regulation 
 
 § 439. Worth of the service to the owners. 
 
 A railway may not impose an unreasonable rate merely 
 because the business of the shipper is so profitable that he 
 can pay it.'= Certainly, a rate that nearly approaches the 
 value of the shipment is suggestive of error, or inadvertence, 
 in the adjustment.^* However, it is unsound to say that, 
 except for increased risk, rates upon cheap and valuable 
 commodities should be the same.'^ In other words, while 
 it is a matter to be taken into account, the value of a com- 
 modity is not controlling; and while an increase in value 
 may be considered in advancing rates, there is a general 
 rule against charging what traffic will bear.'* The Com- 
 mission, therefore, is clear enough that rates cannot be 
 made solely with reference to the value of the article trans- 
 ported.'* But it has said, on the other hand, that the ad 
 valorem principle of rate making can never be altogether 
 ignored.^ Therefore, the quality of a commodity is to 
 be considered in determining the reasonableness of the 
 rate.^ And, generally speaking, value must be taken into 
 consideration in framing classifications.^ But minute 
 variations in value cannot be precisely reflected in classifi- 
 cation.^ A rate cannot be based upon the use to which an 
 article is put, even if that use makes it more valuable to 
 its owners.^ And to adjust rates to fluctuate correspond- 
 ingly with the values of products moving under them is 
 impossible.* It is for this reason that there can be no jus- 
 tification for special rates on unsalable goods.^ The Com- 
 
 '5 R. R. Com. of Kans. v. A., T. & = Browne Grain Co. v. F. W. & 
 
 S. F. Ry., 22 I. C. C. 407. R. G. Ry., 20 I. C. C. 410. 
 
 » Beekman Lumber Co. v. St. ' Ford Co. v. M. C. R. R., 19 I. C. 
 
 L., I. M. & S. Ry., 15 I. C. C. 274. C. 507. 
 
 3' Union Tanning Co. v. S. Ry., «W. E. CaldweU Co. v. C. I. & 
 
 26 I. C. C. 159. L. Ry., 20 I. C. C. 412. 
 
 '* National Hay Ass'n v. M. C. = Virginia-Carolina Chemical Co. 
 
 R. R., 19 I. C. C. 34. V. A. C. L. R. R., 22 I. C. C. 394. 
 
 ^ In re Advances in Rates, Western ' Ponchatoula Farmers' Ass'n v. 
 
 Case, 20 I. C. C. R. 307. I. C. R. R., 19 I. C. C. R. 513. 
 
 ' Rosenblatt & Sons v. C. & N. W. ' In re Reduced Rates, on Re- 
 
 Ry., 20 I. C. C. 447. turned Shipments, 19 I. C. C. 409. 
 [378] 
 
Value of Service Received [ § 440 
 
 mission has never accepted the theory that if traffic moves 
 freely under a given rate, that is the best test of reasonable- 
 ness of rate; still it has always deemed the state of an in- 
 dustry a pertinent fact in considering reasonableness of 
 its rates.* 
 
 § 440. Treating the schedule as a whole. 
 
 The Commission has said that it has no authority to 
 establish a general schedule of rates, but must deal with 
 the interstate rates of this country, although they have 
 not been established upon any consistent theory, as it 
 finds them.® What the Conamission takes off in one place 
 it cannot add in another, treating railways of the country 
 as one system. Unless, therefore, the general result of 
 all rates of the company in question is to yield an undue 
 revenue to the carrier, the Commission should not reduce 
 a particular rate simply because it might think, if estab- 
 Ushing that rate de novo as part of the general scheme, that 
 it ought to be somewhat lower or somewhat higher in 
 proportion to others.^" The rate attacked must be so out 
 of proportion as to be unreasonable, or must so discriminate 
 as to be undue, or must be unlawful for some other special 
 reason." Certainly an unreasonable rate cannot be per- 
 mitted, simply because the entire result of company's opera- 
 tions might not be as favorable as would otherwise be 
 proper." And no change will be made by the Commission 
 if the rate involved appears already to be paying its due 
 share of the value of the service." A just and reasonable 
 rate must be one which respects alike the carrier's deserts 
 and the character of the traffic. The words "just and rea- 
 
 ' In re Transportation of Wool, City v. A., T. & S. F. Ry., 19 I. C. C. 
 
 Hides, and Pelts, 23 I. C. C. 151. 218. 
 
 ' Advance in Rates Cases of 1910, '^ In re Advances in Rates, West- 
 
 20 I. C. C. 243, 306. ern Case, 20 I. C. C. 307. 
 
 '" Five Per Cent Cases of 1914, " In re Investigation of Advances 
 
 Aug. 2 and Dec. 18, 1914. in Rates on Cement, 20 I. C. C. R. 
 
 "Commercial Club of Salt Lake 588. 
 
 [379] 
 
§ 441 ] Railroad Rate Regulation 
 
 sonable" imply the implication of good faith and fairness, 
 of common sense and a sense of justice to a given condition 
 of facts. They are not fixed, unalterable, mathematical 
 terms; their meaning implies the exercise of judg- 
 ment." 
 
 § 441. Doctrine hardly applicable to passenger fares. 
 
 Charging what the traffic will bear has obviously very 
 little scope in justifying differences in passenger fares. 
 Plainly rich men cannot be charged more than poor, nor 
 men with important engagements more than people who 
 have no business interests; but then these would be forbid- 
 den as personal discriminations. However, the principle 
 has some operation in making up a schedule of passenger 
 fares for a railroad system. Thus suburban fares for a 
 considerable zone around a large city are placed at con- 
 siderably lower rates per mile than for long distance runs. 
 The real reason is that a heavy passenger traffic to suburban 
 points could not be developed at the average mileage rate 
 for the system. So long as this is a remimerative business 
 it would seem that it is better for the whole traffic that 
 these concessions should be made. In one case before 
 the Commission ^^ it was said: "The granting of commuta- 
 tion rates for suburban travel is quite general and such rates 
 are defensible on various grounds. They tend to benefit 
 the public by permitting and inducing residence at con- 
 siderable distance from the place of occupation, thus aid- 
 ing the territorial growth of cities and relieving their con- 
 gested districts. So far as they have that effect such rates 
 in turn benefit the railways by securing business that other- 
 wise would not exist and revenue not otherwise obtain- 
 able." 1" 
 
 " Advances on Coal to Lake Ports, " See the later Commutation 
 
 22 I. C. C. 604. Rate Cases, 21 I. C. C. 428 (New 
 
 '= Sprigg V. Baltimore & O. Ry., York City-New Jersey) and 27 
 8 I. C. C. Rep. 443; see Washington I. C. C. 549 (New York City-Con- 
 Suburban Rates, 26 I. C. C. 398 necticut). 
 and cases cited. 
 
 [380] 
 
Value of Service Receivei> [ § 442 
 
 To-pic B. Rates Reasonable Per Se 
 
 § 442. Carrier entitled to reasonable compensation. 
 
 The carrier is entitled to reasonable compensation for 
 his services; and if there is no agreement as to the amount 
 he may recover what the services are worth. To a certain 
 extent there are external standards as to what constitutes 
 a fair rate in that community for a given service, so that 
 it might often be possible to say of a particular rate de- 
 manded by a particular public service company that it 
 was reasonable or unreasonable in itself. Where there are 
 such standards the rate which the company has estabhshed 
 to meet its own policies or necessities must yield somewhat. 
 But does it follow that if the rates of a certain company 
 are no higher than these standard rates that it may justify 
 any profits, however large, which may result from its busi- 
 ness? It would seem that this is a situation where one or 
 the other fundamental limitations upon a public service com- 
 pany must be applied, since the public is entitled to pro- 
 tection in either case. Thus no public service company, 
 whatever its necessities, can charge the public more than 
 reasonable rates; while if it is making exorbitant dividends 
 it is not open to it to urge that its rates are not above the 
 ordinary. Reasonable compensation for the service ac- 
 tually rendered is all that a common carrier is permitted 
 to exact. ^^ This is the upper limit of his charge, as the 
 Commission has pointed out; on the other hand, he is en- 
 titled to no more than a reasonable and fair return for his 
 labor and his capital invested. ^^ The question of the rea- 
 sonableness of a rate is always one of fact." ^\nd this 
 must be determined upon every complaint; for, as the 
 Commission always insists, every shipper is entitled to 
 reasonable rates. ^^ Generally speaking the rate attacked 
 
 " Coxe V. Lehigh R. R., 3 Int. " Kansas City Ass'n v. M. P. Ry., 
 
 Com. Rep. 460, 4 I. C. C. 535. 14 I. C. C. 597. 
 
 " Brabham v. Atlantic C. L. Ry., ® Com Belt Meat Producers' Ass'n 
 
 11 1. C. C. Rep. 464. v. C, B. & Q. Ry., 14 I. C. C. 376. 
 
 [381] 
 
§ 443 ] Railroad Rate Regulation 
 
 must be so out of proportion as to be unreasonable, or 
 must so discriminate as to be undue." 
 
 § 443. General principles as to reasonableness. 
 
 A variety of practical considerations must enter into 
 making of freight rates and determine to a great extent 
 whether rates are reasonable.^^ The earnings and ex- 
 penses of operating, rates charged upon the same commod- 
 ity upon other roads as nearly similarly situated as may 
 be, the diversities between the railroad in question and 
 such other roads, the relative amount of through and local 
 business, the proportion borne by the commodity in ques- 
 tion to the remainder of the local traffic, the market value 
 of the commodity and its gradual reduction, the reductions 
 made by the carrier upon other articles which are con- 
 sumed and necessarily required by the producers of the 
 article in question, and all other circumstances affecting 
 the traffic of itself and as related to other considerations, 
 enter into the charges of the carrier.^' All the sur- 
 rounding circumstances must be considered as well as the 
 rights of the shipper; and if these circumstances and condi- 
 tions are so compulsory or imperious that they fairly and 
 justly exercise any controlling influence in the making of 
 the rate, they cannot be disregarded in a proceeding in 
 which the reasonableness and justness of the rate is pre- 
 sented for determination.^* In passing upon the reasonable- 
 ness or rates, the question whether they afford the carrier 
 a proper return for the service rendered is to be con- 
 sidered, as well as the result of the business to the shipper 
 or producer of the traffic. ^^ Under no circumstances should 
 they be so low as to impose a burden on other traffic.^'' 
 
 " Hilton Lumber Co. v. Wilming- go, S. P., M. & 0. Ry., 2 Int. Com. 
 
 ton & W. R. R., 9 I. C. C. 17. Rep. 41, 2 I. C. C. 52. 
 
 "Gustin V. A. T. & S. F. Ry., " Lq^i ^ goytj^ Cai-oijua Ry., 
 
 8 I. C. C. 277. 4 Int. Com. Rep. 205, 5 I. C. C. 529. 
 
 2' Evans v. Oregon Ry. & Nav. ^ Re Rates and Charges on Food 
 
 Co., 1 Int. Com. Rep. 641, 1 I. C. C. Products, 3 Int. Com. Rep. 93, 4 
 
 325. I. C. C. 48. 
 
 '* Business Men's Ass'n v. Chica- 
 
 [382] 
 
Value of Service Received [ § 444 
 
 But a railroad under the Act cannot be compelled to 
 increase its rates, though they are so low as to be ruinous 
 to itself or its rivals. The provision that all rates shall be 
 just and reasonable, was intended for the protection of the 
 general public, and not for that of the carrier against the 
 action of its own oflBcers or the action of rivals. ^'^ The 
 Commission is authorized to condemn an existing rate and 
 prescribe a reasonable maximum rate to be charged in the 
 future, only when upon consideration of all the facts, 
 circumstances and conditions appearing, it is of the 
 opinion that the rate complained of is unreasonable or 
 unjust.^' 
 
 § 444. Customary rate presumably reasonable. 
 
 A railroad company by putting in force and continuing 
 in force a rate of charges, furnishes evidence that the rate 
 is profitable, and if it increases a long-established rate, the 
 new rate will be presumed to be unreasonably high.^' 
 So where a certain rate had been long established for 
 delivery in New York, and the railroad company changed 
 its practice and made delivery in Jersey City, but charged 
 the same rate, this rate, being for less service, was held 
 prima facie unreasonable.^" Where carrier voluntarily main- 
 tained a rate between certain points for a long period of 
 time, the presumption is that such rate is reasonable; and 
 where a long-established rate is raised for a short period, 
 and then volimtarily reduced to the former point, the 
 presumption is that the advanced rate is unreasonable." 
 But a former special rate is not a fair test of the reason- 
 
 =' Re Chicago, S. P. & K. C. Ry., Rep. 688, 5 I. C. C. 13; National 
 
 2 Int. Com. Rep. 137. Hay Ass'n v. Lake Shore & M. S. 
 
 28 Marshall OU Co. v. C. & N. W. R. R., 9 I. C. C. Rep. 264; Central 
 
 Ry., 14 I. C. C. 210. Yellow Pine Assoc, v. lUinois Central 
 
 » Re Rates and Charges on Food R. R., 10 I. C. C. Rep. 505; Tift v. 
 
 Products, 3 Int. Com. Rep. 93, 4 Southern Ry., 10 I. C. C. Rep. 548. 
 
 I. C. C. 48; Coxe v. Lehigh Valley ™ Truck Farmers' Ass'n v. North- 
 
 R. R., 3 Int. Com. Rep. 460, 4 I. C. eastern R. R., 6 I. C. C. Rep. 295. 
 
 C. 535; Railroad Commi.ssion v. " Sunderland Brothers Co. v. 
 
 Savannah, F. & W. Ry., 3 Int. Com. P. M. R. R., 16 I. C. C. 450. 
 
 [383] 
 
§ 445 ] Railroad Rate Regulation 
 
 ableness of present rates, the Act having abohshed special 
 and preferred rates. ^^ And, as the Commission has exclu- 
 sive jurisdiction over interstate rates, it is not necessarily 
 bound to follow decisions of State commissions.'' There 
 may be a presumption that rates fixed by a State commis- 
 sion are reasonable, and the burden of proof is upon the 
 railroad companies to show the contrary, but the pre- 
 sumption is not binding upon the Interstate Commission.'^ 
 In comparing rates it is to be noted that traffic demanding 
 special service is not justly compared with traffic not 
 asking such consideration.'^ The public is entitled to 
 depend, within bounds, upon the continuance of rates when 
 they are once established.'" It has often been pointed out 
 that the long existence of a rate prejudices an advance. '^ 
 For that reason among others, an advanced rate in the 
 absence of good showing by the carriers tending to justify 
 the advance, will be presumed to be unreasonable.'* 
 But while it is always persuasive, yet it is not conclusive 
 that, because rates were lower at one time, the present 
 rates are unreasonable." 
 
 § 445. Rates unreasonable in themselves. 
 
 Occasionally a case will come up when the competition 
 between the principle of protecting the carrier in its fair 
 return and the principle that no more than a reasonable 
 charge should be exacted from the shipper is not a difficult 
 issue to decide. For sometimes the unreasonable character 
 of the charge exacted will be so apparent that the case for 
 the shipper will be unaffected by the most skillful argu- 
 
 '2 Myers v. Pennsylvania Co., "* Western Oregon Lumber v. S. 
 
 2 Int. Com. Rep. 403, 2 I. C. C. 573. P. Co., 14 I. C. C. 61. 
 
 " Railroad Commission of Wis- " Memphis Freight Bureau v. L. 
 
 consin V. C. & N. W. Ry., 16 I. C. & N. R. R., 26 I. C. C. 402. 
 
 C. 85. '« Sunderland Bros. Co. v. P. M. 
 
 " Brabham v. Atlantic C. L. R. R. R., 16 I. C. C. 450. 
 
 R., 11 I. C. C. Rep. 464. "• Lagomarcino-Grup Co. v. I. 
 
 =s Waco Freight Bureau v. H. & C. R. R., 16 I. C. C. 151. 
 T. C. R. R., 19 I. C. C. 22 
 [ 384 1 
 
Value of Service Received [ § 445 
 
 ment for the carrier. Thus in one case under examination 
 by the Commission,'"' the railroad company met the 
 charge that the rate established was unreasonable by 
 attempting to show that they were earning no more than 
 a fair return. But the Commission, in holding for the 
 complainant, seized upon the obvious fact that the rates 
 were plainly unreasonable in themselves. On that point 
 it was said: "In the fiscal year which had just closed when 
 this proceeding was commenced, the average rate received 
 by the railway companies of the United States for hauling 
 one ton of freight one mile, was less than 1 cent. The 
 average received by the railway companies, including the 
 defendants, operating in the territorial group composed of 
 the States of Arkansas, Missouri, Kansas, parts of the 
 States of Colorado and Texas, and Indian and Oklahoma 
 Territories, and part of the Territory of New Mexico, was 
 less than 1.2 cents. The Eureka Springs Railway Com- 
 pany received more than 10 cents per ton per mile, which 
 is about nine times the average amount received by the 
 railway companies operating lines in said States and 
 Territories so grouped, because of similarity of, or in re- 
 spect to, density of population, topography and nature of 
 the country, character of industries served by railways, 
 and other characteristics affecting the question of the cost 
 and reasonable compensation for railway service." *' 
 
 ■" Gary v. Eureka Springs Ry., The Commission is not ready to 
 
 7 I. C. C. Rep. 286. accept the theory that rates may be 
 
 Nine mills per ton per mile is gen- lawfully and reasonably increased 
 
 erally speaking too high a rate nor- by progressive advances as long as 
 
 mally for low grade freight on longish the traffic moves freely, and until 
 
 hauls. Winston-Salem v. Norfolk & the highest point under which the 
 
 W. R. R., 16 I. C. C. 12. traffic will move freely is reached; 
 
 *' A rate unreasonable in itself some traffic will move, and reason- 
 to the person served cannot stand, ably freely, up to the point where 
 See New Orleans C. Ex. v. Cincin- the rate becomes prohibitive. Com- 
 nati, N. O. & T. P., 2 Int. Com. Rep. mercial Club of Omaha v. Anderson 
 289, 2 I. C. C. Rep. 375; Gary v. & Saline River Co., 18 I. C. C. 
 Eureka Springs Ry., 7 I. C. C. Rep. 532. 
 286. 
 
 25 [385] 
 
§ 446 ] Railroad Rate Regulation 
 
 § 446. What makes rates unreasonable? 
 
 Upon a complaint to the Commission for reduction of 
 rates the burden is on the complainant to establish his 
 case; it must aflSrmatively appear that charges assailed as 
 unreasonable are so and ought to be reduced.^^ The 
 reasonableness of a rate must of necessity depend upon 
 the conditions surrounding the traffic at the time it moves. 
 The length of the haul, the competition to be met, the 
 cost of the service, the value of the service, the density or 
 volume of the tonnage, as well as the general transporta- 
 tion conditions then existing, are factors that have a more 
 or less definite relation to the rate that a carrier may 
 reasonably demand for a transportation service. And 
 these factors, except, possibly, the length of the haul, the 
 grades and other transportation conditions, are in their 
 nature neither permanent, nor fixed, but necessarily change 
 with the general economic panorama.*' Where a change of 
 rates would involve a reduction of rates on other competing 
 lines not parties to the proceeding, and unsettle relative 
 rates in a large extent of territory, such a change ought 
 not to be made unless based upon clear grounds.** While, 
 as has been seen, the reasonableness of a rate may be 
 tested by comparison with similar rates, such comparison 
 alone, without other evidence, will not justify the conclu- 
 sion that a rate is unreasonable.*^ The Commission recog- 
 nizes, therefore, that there can be no rule by which a set 
 absolute maximum limit of reasonableness can be fixed 
 with certainty of a demonstration; it all depends upon the 
 preponderance of the evidence adduced in accordance with 
 
 " Lincoln Creamery v. Union P. *^ Allen v. Oregon Ry. & Nav. Co., 
 
 Ry., 3 Int. Com. Rep. 794, 5 I. C. C. 106 Fed. 265; Interstate Commerce 
 
 156; Duncan v. Atchison, T. & S. Commission v. Nashville, C. & S. 
 
 F. R. R., 6 I. C. C. Rep. 85. L. Ry., 120 Fed. 934, 67 I. C. C. A. 
 
 "Memphis Cotton Oil Co. v. 224; Kentucky R. R. Com'rs v. 
 
 I. C. C. Ry., 17 I. C. C. 313, 318. Cincinnati, N. O. & T. P. Ry., 7 I. 
 
 << Rice V. Western N. Y. & P. C. C. Rep. 380; Chattanooga Cham- 
 
 Ry., 2 Int. Com. Rep. 298, 2 I. C. C. ber of Commerce v. Southern Ry., 
 
 389; and see Dallas Freight Bureau 10 I. C. C. Rep. 111. 
 V. Texas & P. Ry., 8 I. C. C. Rep. 33. 
 [386] 
 
Value of Service Received [ § 447 
 
 principles of law applicable to the determination of facts. 
 Therefore, when in 1910 by the Mann Act, the burden of 
 establishing the reasonableness of an advance was shifted 
 to the carrier, a change of great importance was made in 
 the administration of the law, although the burden still 
 rests upon a complainant seeking to have a rate reduced. ^^ 
 
 § 447. Current rates for other transportation. 
 
 It would seem that while not the legal measure of proper 
 charge, the current rates for other transportation within 
 the same territory by the company in question or by other 
 companies performing similar services, is evidence which 
 will furnish a test for the value of the particular services 
 in question. This was one 'of the strongest arguments 
 brought forward in the "Naval Stores Case," " to show 
 that the Savannah rates were themselves unreasonable. 
 A part of the language of Judge Speer on this point is 
 quoted to show this method of testing the reasonableness 
 of rates by comparison of hauls on other lines similarly 
 situated fairly comparable with the distances involved. 
 "In every instance the average distance on the roads 
 last mentioned to the point of destination is much greater 
 than the average distance from Pensacola & Atlantic 
 stations to Savannah, and yet the rate is invariably much 
 less. We find that it costs more to ship cotton from River 
 Junction to Savannah, 259 miles, than it does to ship 
 cotton from Sneads, a station on the Pensacola & Atlantic, 
 6 miles from River Junction, to New York, a distance of 
 1,173 miles, or from the most distant point in Mississippi 
 to Norfolk, 1,154 miles. The facts ascertained by the 
 Commission and herein set forth are of the highest sig- 
 nificance. In the absence of satisfactory reply by the 
 respondents, they must control the action of the com-t." *^ 
 
 « Anadarko Cotton Oil Co. v. ^ See, also, Freight Bureau v. 
 
 A., T. & S. F. Ry., 20 I. C. C. 43. Cincinnati, N. O. & T. R. Ry., 6 I. 
 
 " Interstate Com. Com. v. Louis- C. C. Rep. 195. 
 villa & N. Ry., 118 Fed. 613. 
 
 [387] 
 
§ 448 ] Railroad Rate Regulation 
 
 § 448. Comparison with other rates. 
 
 Where the reasonableness of rates is in question, com- 
 parison thereof may be made, not only with rates on an- 
 other line of the same carrier, but also with those on the 
 lines of other and distinct carriers.*^ But in determining 
 the reasonableness of rates a comparison of one isolated 
 rate with another is not sufficient; the whole field must 
 be considered in order to approximate justice, and at 
 best the result cannot be regarded as other than an ap- 
 proximation.^" Thus the unreasonableness of a rate for 
 mileage tickets cannot be proved by showing that it is 
 higher than the rate for commutation tickets. ^^ And a 
 finding that the rates charged by railroads for shipments 
 to a particular point are unreasonable in themselves can- 
 not properly be based on evidence which only tends to 
 show that they are too high as compared with the rates 
 charged between the initial points and one or two other 
 points. ^^ Any comparison of rates must first be shown 
 to be proper by establishing a similarity in the rates com- 
 pared.^' Thus rates on branch lines and main lines cannot 
 be compared, because of this dissimilarity of conditions.^* 
 Nor can rates in different sections of the country be used 
 in comparison, because of the difference in costs. ^^ Rates 
 in different directions cannot be compared, because 
 it may be more advantageous to move traffic in one 
 direction.^* Of course, even in a case of admitted simi- 
 
 *^ Cincinnati Freight Bureau v. sion v. Nashville, C. & S. L. Ry.j 
 
 Cmcinnati, N. O. & T. P. Ry., 4 120 Fed. 934, 57 C. C. A. 224. 
 
 Int. Com. Rep. 592, 6 I. C. C, Rep. " Evans v. Union Pacific Ry., 
 
 195; MorreU v. Union Pac. Ry., 4 6 I. C. C. Rep. 520. 
 
 Int Com. Rep. 469, 6 I. C. C. Rep. » Northwestern la. G. & S. S. 
 
 121. Assoc. V. Chicago & N. W. Ry., 2 
 
 '» Howell V. New York, L. E. & Int. Com. Rep. 431, 2 I. C. C. 604. 
 
 W. R. R., 2 Int. Com. Rep. 162, " Morrell v. Union Pacific Ry., 
 
 2 I. C. C. 272. 4 Int. Com. Rep. 469, 6 I. C. C. 
 
 •* Assoc, of Wholesale Grocers v. Rep. 121. 
 
 Missouri Pac. Ry., 1 Int. Com. Rep. '« Duncan v. Atchison, T. & S. 
 
 321, 1 I. C. C. 323. F. R. R., 4 Int. Com. Rep. 385, 
 
 " Interstate Commerce Commis- 6 I. C. C. Rep. 85. 
 
 [388] 
 
Value of Service Received [ § 449 
 
 larity, the difference in rates may be explained, as where 
 the lower rate is a violation of the Act; '' or where the 
 lower rate was given by mistake, which the carrier is 
 endeavoring to correct.** However, when all is said, one of 
 the most satisfactory tests of the reasonableness of the rates 
 of one carrier is a comparison with the rates of other 
 carriers operating in the same territory under the same 
 general conditions. ^^ But, before the Commission can con- 
 clude that a rate on a given commodity is too high, be- 
 cause it is higher than some other rate named, it must 
 know that the route selected as the standard for a com- 
 parison is a reasonable and a fair one.*" 
 
 § 449. Evidence inadmissible unless conditions are similar. 
 This comparison cannot be made, however, without con- 
 sidering dissimilar conditions; and conditions may be 
 so dissimilar that no comparison would be proper. Thus 
 in the case of Hooper v. Chicago, Milwaukee and St. 
 Paul Railway," Mr. Justice Kinne said: "Evidence was 
 admitted as to the charges made by defendant in other 
 States, but the court excluded evidence as to rates charged 
 by other companies in other States and other roads in this 
 State. The questions asked touching these matters were 
 very numerous, and cannot all be set out here. In each 
 case, however, the offered testimony was properly ex- 
 cluded because it was not shown that the circumstances 
 and conditions were substantially the same as to the road 
 inquired about as in the case at bar. One or two questions 
 will serve to illustrate: 'Will you state to the court the 
 
 " Squire v. Michigan Central R. «" DarUng & Co. v. B. & O. R. R., 
 
 R., 3 Int. Com. Rep. 515, 4 I. C. C. 15 I. C. C. 79. 
 
 611. " 91 Iowa, 639, 60 N. W. 487. 
 
 " Rea V. Mobile & O. Ry., 7 I. C. In order to sustain reasonable 
 
 C. 43. rates to intermediate points, un- 
 
 " Chamber of Commerce of Mil- reasonable rates between more dis- 
 
 waukee v. C, R. I. & P. Ry., 15 I. C. tant points cannot be sustained. 
 
 C. 460. Norfolk & W. Ry. v. United States, 
 
 195 Fed. 953. 
 
 [389] 
 
§ 450 ] Railroad Rate Regulation 
 
 rates that were being charged at that time in the differ- 
 ent States of the Northwest on the different roads?" 'State 
 what was the charge of the different roads in Iowa for the 
 transportation of hne in 1888.' It requires no argument 
 to show that the charges for carrying a like commodity 
 on another road in Iowa or elsewhere would have no 
 tendency to show the reasonableness of defendant's charges 
 for a shipment of lime from Maquoketa to Sioux City, 
 Iowa, unless the circumstances which must be taken into 
 consideration in fixing the rate inquired about are sub- 
 stantially the same as those applying to the road in con- 
 troversy. The proper foundation for the introduction of 
 such evidence, even if admissible, was not laid." *^ 
 
 § 460. Comparison of rates between different localities. 
 
 The rules against undue preference and their limitations 
 have often been stated.*^ The Commission does not ac- 
 cept the theory that one carrier's rate is unreasonable 
 simply and solely because another carrier had at the time 
 a lower rate; for what is reasonable for one carrier may 
 not be reasonable for another." Freight rates are con- 
 trolled by various and varying conditions; and, therefore, 
 rates in one section furnish no reliable standard by which 
 to measure the reasonableness of rates in another section, 
 where dissimilar conditions prevail.*' Rates can seldom 
 be tested, even as to their reasonableness, strictly by 
 themselves, but must be considered to an extent in refer- 
 ence to their environment.** The unreasonableness of a 
 
 ^2 Compare Interstate Commerce Interstate Commerce Commission, 
 
 Commission v. Louisville & N. Ry., 195 Fed. 541. 
 
 7.3 Fed. 409. «' Morrell v. Union Pacific Ry., 
 
 It is not within the authority of 6 I. C. C. 121. 
 
 the Commission to reduce rates «* Swift & Co. v. C. & A. R. R., 
 
 not merely against the weight of 16 I. C. C. 426. 
 
 the evidence produced to sustain «" Acme Cement Plaster Co. v. 
 
 them, but without anything sub- L. S. & M. S. Ry., 171 C. C. 30. 
 
 stantial to warrant the conclusion '« Southwestern Missouri Millers' 
 
 reached or the reasons assigned Club v. M., K. & T. Ry., 22 I. C. C. 
 
 therefor. Louisville & N. R. R. v, 422. 
 
 [390] 
 
Value of Service Received [ § 451 
 
 rate cannot be established by comparison with rates on 
 other lines operating in different territory, where no evi- 
 dence is offered to explain the conditions under which 
 such rates were estabhshed, or to compare the circum- 
 stances of carriage in such other territory with the move- 
 ment between the points in question.*' Before the Com- 
 mission can conclude that a rate on a given commodity 
 is too high, because it is higher than some other rate 
 named, it must know that the rate selected as the standard 
 of comparison is a reasonable and a fair one.** Certainly, 
 the unreasonableness of the rate is not established by evi- 
 dence merely showing that a lower rate is in effect over 
 another route.*' And a commodity rate to one point 
 over one line affords no basis of comparison with a higher 
 class rate to a longer distance point over two lines.'" It 
 follows that the fact that the cost by rail is higher than by 
 boat, does not establish unreasonableness of the rail rate.'' 
 
 § 451. Usual rates govern passenger fares. 
 
 The principle of permitting the railroads under ordinary 
 circumstances to charge usual rates of fare is particularly 
 useful in dealing with the vahdity of passenger fares. 
 There are certain standards of what will constitute a 
 not unreasonable charge per mile for a passenger in most 
 commimities which it can hardly be shown to be unreason- 
 able to maintain. Thus in one proceeding'^ the Inter- 
 state Commerce Commission said: "We cannot find upon 
 this record that $1.10 is an unreasonable charge from Nia- 
 gara-on-the-Lake to Buffalo. This is a branch line of the 
 defendant and the case does not show density of traffic, 
 
 " Crutchfield & Woolfolk v. L. & ™ Wells-Higman Co. v. St. L., I. 
 
 N. R. R., 14 I. C. C. 558. M. & S. Ry., 18 I. C. C. 175. 
 
 " Darling & Co. v. B. & O. R. R., " Louisville Cotton Seed Products 
 
 15 I. C. C. 79. Co. V. L. & N. R. R., 26 L C. C. 
 
 "'Ohio Iron & Metal Co. v. Wa- 607. 
 
 bash R. R., 18 I. C. C. 299; Pankey " Cist v. Michigan Central Ry., 
 
 & Hohnes v. C. N. E. Ry., 18 I. C. 10 L C. C. Rep. 217. 
 C. 578. 
 
 [391] 
 
§ 452 ] Railroad Rate Regulation 
 
 nor the circumstances under which the passenger service is 
 performed. It simply appears that a rate of 3 cents per 
 mile is imposed. While lower rates are in force in many- 
 parts of the United States, it is also true that there is 
 hardly any section of the country in which a rate as high 
 as 3 cents per mile is not charged for a local service of this 
 distance. The fact that a rate of 85 cents is made during 
 the summer season to meet competition via Lewiston is 
 not controlling, nor is the further fact that the New York 
 Central under compulsion of law establishes a rate of 2 
 cents per mile from Lewiston to Buffalo. We do not find 
 that this rate is reasonable; we simply fail to find that it is 
 unreasonable, as there is no evidence in the record upon 
 which an intelligent judgment can be formed. This is a 
 most unsatisfactory disposition of the question, and if the 
 case were of wider application, or the subject of more 
 general complaint, it would be our duty to proceed on 
 our own motion to develop the necessary facts." ^^ 
 
 Topic C. Rates Dictated by Competition 
 
 § 462. Rates may be made to meet competition. 
 
 Within the many limitations which are discussed through- 
 out this book, a railroad company may make such rates 
 as it is necessary for it to make to meet competition. 
 But whatever may have been the practice in the past of 
 meeting the rate, the tariffs as scheduled must now be 
 adhered to.'* A great deal of transportation is conducted 
 under competitive conditions, the shipper having an al- 
 ternative route by which he may get his goods to market. 
 Under such circumstances railway rates between the com- 
 petitive points will inevitably tend to be lower than be- 
 tween points where there is no competition. To a cer- 
 taia extent the public is rejoiced to see lower rates from 
 whatever cause, and it will in an ordinary case be un- 
 questioned that the carrier may make his competitive 
 
 " See Kurtz v. Pa. Ry., 16 I. C. C. " Menefee Lumber Co. v. T. & 
 
 410. P. Ry., 15 I. C. C. 49. 
 
 [392] 
 
Value of Service Received [ § 453 
 
 rates as low as is necessary to get the business. But this 
 statement is subject to certain Hmitations, some of which 
 will now be discussed, but most of which are discussed 
 more fully in later chapters. However, it is now appreciated 
 that rate wars create a disturbing condition, and that 
 their results cannot be used as a measure of reasonable- 
 ness.^^ 
 
 § 453. Competition as a factor in rate making. 
 
 But while the "law of increasing returns" cannot be 
 pressed too far, it contains an element of truth which may 
 be considered in fixing a particular rate. If traffic may be 
 acquired by a specially low rate which would otherwise 
 be lost, to acquire the traffic would benefit rather than 
 burden other traffic of a different kind, since if under the 
 law of increasing returns it is remunerative, the profit 
 thus earned will tend to diminish the rates charged on 
 the remaining traffic.^* On this ground competition may 
 be considered as a factor in fixing rates. If a carrier is 
 carrying goods from two stations, at one of which there is 
 competition, the rate at the station where the competi- 
 tion exists may fairly be reduced, so far as is absolutely 
 necessary to secure the traffic, provided the reduced rate 
 remains a remunerative one under the law of increasing 
 returns. If the rate were not reduced, ex hypothesi, the 
 traffic would be lost, and the profit realized upon it must 
 be exacted from the non-competitive traffic; if, on the 
 other hand, the rates were reduced equally all over the 
 road, the carrier could not earn a fair return from his whole 
 schedule, since we are assuming that the necessary competi- 
 tive rate is so low as to be profitable only as a result of 
 the law of increasing return. The same result will follow 
 if the competition affects not a particular station but a 
 particular class of goods. It is therefore always fair even 
 
 " Morgan Grain Co. v. A. C. L. R. no justification for advance, where 
 
 R., 19 I. C. C. 460. such rate was not unusually low. 
 
 ™ Little movement under a given In re Advances on Potatoes, 25 I. 
 
 rate to stimulate given article, is C. C. 247. 
 
 [393] 
 
§§ 454, 455 ] Railroad Rate Regulation 
 
 to the shipper who does not get the benefit of the com- 
 petition to consider competition as a factor in reducing 
 the rate." 
 
 § 454. Policy for permitting competitive rates. 
 
 The pohcy of this matter seems to be to permit the mak- 
 ing of rates to meet competition even if proportionately 
 they seem preferential, in order that competition may be 
 possible, which it could not be without this permission. 
 This is very acutely said by Lord Herschell in Phipps v. 
 London & North Western Railway Company:'* "Suppose 
 that to insist on absolutely equal rates would practically 
 exclude one of the two railways from the traffic, it is ob- 
 vious that those members of the public who are in the 
 neighborhood where they can have the benefit of this 
 competition would be prejudiced by any such proceedings. 
 And further, inasmuch as competition undoubtedly tends 
 to diminution of charge, and the charge of carriage is one 
 which ultimately falls upon the consumer, it is obvious 
 that the public have an interest in the proceedings under 
 this Act of Parliament not being so used as to destroy a 
 traffic which can never be secured, but by some such re- 
 duction of charge, and the destruction of which would be 
 prejudicial to the public by tending to increase prices." '* 
 
 § 466. Rates low enough to hold business. 
 
 Without going into the many problems as to local dis- 
 crimination, the result largely of statutory provisions and 
 their construction, which are discussed later, it may be 
 pointed out briefly that it is a general principle recognized 
 in all of those cases that it is permissible to make the com- 
 petitive rate low enough to get business and to hold it. 
 
 " Revenue derived from divisions '« (1892) 2 Q. B. 229. 
 on through business makes it pos- " Circumstances tending to nega- 
 sible to reduce rates on other traffic, tive presumption of unreasonable- 
 which would not be possible other- ness of greater charge to shorter- 
 wise. New Pittsburgh Coal Co. v. distance pomts. Fisk & Sons v. 
 H. V. Ry., 26 I. C. C. 121. B. & M. R. R., 19 I. C. C. 299. 
 [394] 
 
Value of Service Received [ § 456 
 
 It may be true, as will appear later in this book, that the 
 number of carriers actually competing for traffic, and a 
 constantly open water route present to take a large part 
 of it whenever the railroad rates rise up to the mark of 
 profitable water carriage, seem to the Commission to con- 
 stitute circumstances and conditions at one point substan- 
 tially dissimilar from those at another point where no such 
 conditions exist. But a rule that, whenever all-rail carriers 
 establish rates to a given point, they must take notice 
 of the independent water rates from that point, and of 
 the territory that can be reached thereunder, and must 
 make such adjustment as will prevent the use of the water 
 rates from that point to another point, resulting in dis- 
 crimination against that other point by reason of its all- 
 rail rate adjustment, has no support in law.'" As the law 
 stands, in the absence of actual and effective competition 
 compelfing the carriers to make rates upon traffic upon a 
 competitive basis, the Commission is called upon to fix 
 reasonable rates which shall be used as maxima, which, 
 however, the carriers may reduce to meet competition 
 with other carriers and between themselves, as they may 
 deem advisable, so long as they do not discriminate.^' 
 
 § 466. Reduction below a remunerative basis. 
 
 This principle permitting the carrier to make in particu- 
 lar instances low rates to meet competition has its limita- 
 tions; it will not justify the making of rates which will 
 not be remunerative, as that must result in throwing undue 
 burdens upon others. The principle of relative justice 
 applied is that when a carrier, by reason of competitive 
 conditions, or for other reasons, serves certain localities 
 at very low rates, the concessions made must not subject 
 other localities or other patrons dependent on the same 
 carrier to undue or unreasonable prejudice or disadvan- 
 tage, but there must be an equitable adjustment of rates 
 
 «" Bainbridge Board of Trade v. " Okla. & Ark. Coal Traffic Bu. v. 
 
 L. H. & St. L. Ry., 15 I. C. C. 506. C, R. I. & P., 14 I. C. C. 216. 
 
 [395] 
 
§ 457 ] Railroad 'Rate Regulation 
 
 so that there is no unjust discrimination between competi- 
 tors in like pursuits.*^ "There may be cases in which a 
 carrier legitimately engaged in serving some territory is 
 compelled by some new and aggressive competition to 
 reduce normal and reasonable rates to retain business for 
 its line, and where corresponding reductions at points 
 not affected, or less affected, by destructive competition, 
 might be unreasonable. But when a carrier voluntarily 
 enters a field of competition where, by reason of a disad- 
 vantageous route, or the rigor of the competitive condi- 
 tions, remunerative rates cannot be charged, and its service 
 to a portion of its patrons is unprofitable, it accepts the 
 legal obligation that its service shall be impartial to all 
 who sustain similar relations to the traffic, and from whom 
 the service itself is not substantially dissimilar." ^^ 
 
 § 467. Standard rate among competing lines. 
 
 Where a competitive situation has become established 
 by presence of various competing lines performing the same 
 service to the community, it tends to become settled be- 
 tween the competitors what shall be the standard rates 
 and what differentials shall be allowed from these rates. 
 The standard rate might be that established by the shortest 
 and otherwise best located road, but it would not be fair 
 in reducing rates all over the territory involved to reduce 
 all rates to the lowest margin of profit fair to that particular 
 road, for other roads could not meet that rate without 
 ruin, it may be. On the other hand, it would be bad public 
 policy to permit as an artificial standard what the most 
 
 »2 Re Chicago S. P. & K. C. Ry., Commission v. U. P. R. R., 13 I. 
 
 2 Int. Com. Rep. 137, 2 I. C. C. Rep. C. C. 349. 
 231. '' Manufacturers & Jobbers' Union 
 
 The fact that there is competition v. Minneapolis & S. L. R. R., 3 Int. 
 
 between communities for the pur- Com. Rep. 115, 1 I. C. C. Rep. 227. 
 chase of a commodity does not justify That carriers may meet water 
 
 the carrier transporting the same to competition at whatever point and 
 
 levy an unreasonable rate on one com- to whatever extent they see fit can- 
 
 munity. Nebraska State Railway not be admitted. City of Spokane v. 
 
 N. P. Ry., 19 I. C. C. 162. 
 
 [396] 
 
Value of Service Received [ § 458 
 
 circuitous and worst located road might need to make a 
 good profit. As in most problems of rate making the result 
 must be some compromise. This was pointed out by the 
 Commission in one of its investigations,*^ the Commis- 
 sion saying that it might be manifestly unfair to select a 
 single advantageous line and make that the standard. 
 For example, a rate to the seaboard on grain which upon 
 any fair basis of compensation to investment would be 
 reasonable for the southerly lines would be extravagantly 
 high for the trunk lines. To permit such a rate would be 
 to impose upon the general public the payment of an ex- 
 orbitant charge. It should be noted, however, that, in the 
 days of the Commerce Court, that tribunal took judicial 
 notice of the fact that the interstate rates prescribed for 
 the transportation of freight by a common carrier must 
 necessarily be more or less interdependent, or at least be 
 so related to each other, that the rate-making power will 
 not, simply because it has the power, fix a rate upon a 
 single line of railroad which will necessarily disorganize 
 established and reasonable rates on other railroads in the 
 same territory.^^ 
 
 § 468. Competition not a ground for raising rates. 
 
 There are occasional cases where a road has urged the 
 presence of competition as a ground for raising rates. To 
 put one case *^ in the language of the Commission in pass- 
 ing upon it: "Previous to the summer of 1887, grain and 
 other freights destined to Portland from points further 
 
 ^* Re Proposed Advances in Freight of rates from the West to southern 
 Rates, 9 I. C. C. Rep. 382. territory, the interests of all corn- 
 Rates not as a matter of fact are peting lines must be considered, and 
 fixed solely with reference to weaker not merely that line which can handle 
 competing line; cost of handling the business cheapest. Receivers' 
 traffic over short and easy line & Shippers' Ass'n of Cincinnati v. 
 largely influences rates. Commer- C, N. O. & T. P. Ry., 18 I. C. C. 
 cial Club of Salt Lake City v. A., T. 440. 
 
 & S. F. Ry., 19 I. C. C. 218. ^ Morrell v. Union Pacific Ry., 
 
 '* Hooker v. Interstate Commerce 8 Int. Com. Rep. 181, 6 I. C. C. Rep. 
 
 Commission, 188 Fed. 242. 121. See also Lumber Rates from 
 
 In determining the reasonableness Memphis, 27 I. C. C. 471. 
 
 [3971 
 
§ 459 ] Railroad Rate Regulation 
 
 east, including Pullman, passed over the lines of the Oregon 
 Railway & Navigation Company. In 1887 and 1888 the 
 Northern Pacific Railroad Company extended its lines 
 west to Tacoma, thence to Portland, and east to Pullman 
 and other points in the grain growing region in southeastern 
 Washington, and over its lines so extended the Northern 
 Pacific Company took from Pullman and other points a 
 considerable part of the wheat and other freights which 
 would otherwise have been carried over the road of the 
 Oregon Railway &, Navigation Company. The defendants 
 urge this diversion of Pullman and other traffic from their 
 lines in justification of higher transportation charges than 
 would be reasonable if there was no competition for Pull- 
 man business. Competition, or a division of business as 
 the result of building a second road where previously but 
 one existed, should justify lower rather than higher charges." 
 The conclusion of the Commission is undoubtedly the 
 proper way of dealing with such a case, but the reason is not 
 quite obvious. It is plain that there is always some waste 
 in all competition which makes a certain additional cost 
 to be borne by the traffic because of the additional fixed 
 charges by reason of unnecessary duplication of plant. 
 But more than this, perhaps, is the increased cost of trans- 
 portation by reason of decrease in the volume of traffic, 
 consequent upon the division of the business among the 
 competing lines. And yet the principle of value of the 
 service to the shipper seems to come into play here; for 
 the service is worth no more to the shipper whether there 
 be one line or three.'^ 
 
 § 459. Absence of competition does not justify increase. 
 
 To the extent that competition becomes more remote 
 the power to raise rates to any amount that the traffic will 
 bear increases until a point is reached where there is no 
 
 " That the business of the express sharply is no justification for not 
 
 companies has been cut into by the putting express rates upon a basis 
 
 parcel post to such an extent as to which otherwise is reasonable. In 
 
 increase its operating ratio very re Express Rates, 24 I. C. C. 380. 
 
 [398] 
 
Value of Service Received [ § 460 
 
 virtual competition and then that power becomes absolute; 
 but as has been seen already in this chapter, the public 
 needs the protection of the law of the land in this situa- 
 tion, for the economic limitation leaves scope for gross 
 oppression. It is therefore plain law that the absence 
 of competition does not justify an increase in rates. The 
 elimination of railroad competition by the aggregation 
 of large systems has been the characteristic fact in railroad 
 history during the last twenty-five years; and indeed 
 within the last ten years there has been a further extra- 
 legal consolidation of many of these systems by communi- 
 ties of interest, until to-day there are comparatively few 
 groups.^' "Such unification of railway control permits 
 advances in rates and a maintenance of rates which has 
 never before been possible. If carriers are entitled to larger 
 returns, these increases are proper, and should be permitted; 
 otherwise they should be checked. It cannot be accepted 
 without careful consideration that all this vast increase 
 in traffic, all these notable economies in railway operation 
 are to result in the permanent imposition of higher trans- 
 portation charges." ^' 
 
 § 460. No obligation to meet competition. 
 
 The Commission has recognized what it considers to 
 be the natural right of the carrier to establish low rates to 
 
 ** Re Proposed Advances of Freight vance of a "rate which was formerly 
 
 Rates, 9 I. C. C. 382. maintained to meet competition 
 
 Competition has a more or less between different producing points, 
 
 definite relation to the rate that Florida Fruit & Vegetables Ass'n v. 
 
 carrier may reasonably demand. A. C. L. R. R., 17 1. C. C. 552. 
 Memphis Cotton Oil Co. v. I. C. R. By the last paragraph of sec- 
 
 R., 17 I. C. C. 313. tion 4 of the Act as amended in 1910 
 
 " While a carrier may establish it is provided that, if rail rates have 
 
 a lower rate to meet competitive been reduced to meet water competi- 
 
 conditions and the Commission takes tion, they shall not later be advanced 
 
 into account such conditions in pass- for no other reason than that the 
 
 ing upon the reasonableness of the water competition has been discon- 
 
 rate adjustment, it does not follow tinned; see Am. Insul. W. C. v. 
 
 that in a particular instance the Ch. & N. W. Ry., 26 I. C. C. 
 
 Commission will condemn an ad- 415. 
 
 [399] 
 
§ 460 ] Railroad Rate Regulation 
 
 meet competition over other routes.'" A carrier may, 
 therefpre, for competitive reasons, voluntarily do things 
 which it may not lawfully be compelled to do.®^ There is 
 no principle of law that requires a carrier to be content 
 with a part of the traffic, or that forbids it to adjust its 
 rates so as to fight, the moment it feels the effect of its 
 competitors' rates.^^ A carrier may, therefore, volim- 
 tarily make under the force of c6ntroUing competition, 
 rates which it might not be required to make.'' And a 
 competitive rate cannot be said to be voluntary reduction, 
 and ought not to be used as a standard of comparison.''' 
 But while the law permits carriers to make and maintain 
 a low rate under stress of competition, there is no law re- 
 quiring the carriers to make such a rate.'^ It is for this 
 reason that a competitive rate is not a measure of the 
 reasonableness of a non-competitive rate.'^ And the Com- 
 mission has often remarked that it is obvious that a com- 
 petitive rate to one point is not a measure of rate to a 
 non-competitive point. Where, owing to competition, 
 a rate is unnecessarily low, it affords no basis for comparison. 
 A rate comparatively the lowest in its territory on a given 
 article of freight, and by reason thereof made the basis 
 of reductions from competitive points, will not be further 
 reduced on the ground alone that it had at stated periods 
 in the past been somewhat lower, unless shown to be un- 
 reasonably high for the service performed.'' In fixing 
 rates on competitive articles, the relation should be de- 
 termined on the basis of difference in cost of service, and 
 many of the othei* considerations entering into establish- 
 
 ™ Indianapolis Freight Bureau v. Ass'n v. A., T. & S. P. Ry., 24 I. C. 
 
 C. C. C. & St. L. Ry., 26 I. C. C. 53. C. 570. 
 
 " Swift & Co. V. C. & A. R. R., ^^ Oregon & Washington Lumber 
 
 16 I. C. C. 426. Mfrs. Ass'n v. U. P. R. R., 14 I. C. C. 
 
 '^Bulte Milling Co. v. C. & A. 1. 
 
 R. R., 15 I. C. C. 351. ^ Commercial Club of Superior v, 
 
 "^ Indianapolis Freight Bureau v. G. N. Ry., 24 I. C. C. 96. 
 
 P. R. R., 15 I. C. C. 567. " Warren Manufacturing Co. v. 
 
 " Southwestern Shippers' Traffic Southern Ry., 12 I. C. C. 381. 
 
 [400] 
 
Value of Service Received [ §§ 461, 4(52 
 
 ment of rates upon independent or isolated articles should 
 be in large part eliminated.'* 
 
 § 461. Competition in passenger fares. 
 
 Competition dictates particular rates in passenger 
 schedules to a certain extent, but the differences between 
 stations by this process are not made glaring. It is true 
 that between competitive points fares are kept down, but 
 this tends to shrink the whole schedule relating to inter- 
 mediate stations. Even the most extreme cases are usually 
 those where the long haul between competitive points is 
 charged, relatively less than the short haul, or in some 
 cases where the short haul is made as high as the long 
 haul; '' but if a railroad attempted to charge more for a 
 short haul than for a long haul it would hardly be possible 
 to make the public accept a difference of this sort. The 
 general operation of competition upon passenger fares is 
 to keep all down to a lower level. The matter of joint 
 through rates, discussed at another place, gives more 
 scope to the doctrine that particular rates may be lowered 
 to meet competition. Thus the part of a through passen- 
 ger rate apportioned to one of several railroads as its 
 share may often be less than the rate which that railroad 
 makes between its own termini to its own passengers; as 
 these joint through rates may be reduced to meet competi- 
 tion this difference is justified. ^ 
 
 Topic D. Rates Designed to Equalize Advantages 
 
 § 462. Operation of the principle of equalization. 
 
 This topic as to the limitations placed by the law upon 
 making rates designed to equalize advantages is again one 
 that will receive attention later when the construction to 
 be placed upon statutory provisions forbidding local 
 discriminations is brought up. But it seems appropriate 
 
 »« Carstens Packing Ck). v. O. & A. T. & S. F. Ry., 19 I. C. C. 218. 
 W. R. R., 22 I. C. C. 77. ' See Weber C. & I. Fair Assur. 
 
 »9 See Com'l Club of Salt Lake v. N. P., 17 I. C. C. 212. 
 
 26 [ 401 ] 
 
§ 463 ] Railroad Rate Regulation 
 
 to point out in this place that it is a principle in rate- 
 making subject to all of the limitations which have been 
 brought out in this chapter, and that it has therefore 
 a very limited operation. However much this theory may 
 have appealed to some economists who have applied their 
 theories of what is for the best interests of society to the 
 railroad problem, it has very little weight with the lawyers 
 who have had to do with the question.^ "It is not the 
 duty of a carrier to regulate markets. If by reason of 
 competition in transportation or the condition of markets 
 a carrier sees fit to move traffic at very low rates in order 
 to participate in the business, that may be done and often 
 is done, but that is a very different matter from compelling 
 it to reduce all its rates to equalize competition between 
 shippers from different fields of supply and by different 
 and unrelated routes." ^ 
 
 § 463. Limitations upon the Commission. 
 
 The Commission has no power to substitute a new and 
 differing rate for a just and reasonable rate on the ground 
 that it seems to it a wise policy to do so, or that the 
 railroad had so conducted itself as to be estopped in the 
 future from being entitled to receive a just and reasonable 
 compensation for the service rendered.* The authority 
 
 2 Schoonmaker, Com., in Rice v. mission to make all producers on a 
 
 Western N. Y. & Pa. R. R., 2 Int. parity in markets which they have 
 
 Com. Rep. 298. in common. Slider & Co. v. So. Ry., 
 
 It is not the province of the Com- 24 I. C. C. 312. 
 mission to overcome nature. Na- * Southern P. Co. v. I. C. C, 219 
 
 tional Refining Co. v. Mo. P. Ry., U. S. 433, 65 L. ed. 283, 31 Sup. Ct. 
 
 24 I. C. C. 315. 288. 
 
 ' In comparing the transportation In a few States the courts have 
 charges on wheat and on iiour from apparently adopted the theory of 
 Minneapolis to New York, in a con- the economists, that a railroad should 
 troversy between Minneapolis and so fix its rates as to equalize the ad- 
 Buffalo millers, the commercial profits vantages of its patrons in so far as 
 of the parties are neither controlling this will be for the good of the coun- 
 nor important. Jennison Co. v. try. In State v. Minneapolis & St. 
 G. N. Ry., 18 I. C. C. 113. L. Ry., 80 Minn. 191, 83 N. W. 60 
 
 It is not the function of the Com- it was held that a commission in 
 
 [402] 
 
Value of Service Received [ § 464 
 
 granted to the Commission does not confer absolute or 
 arbitrary power to act on any considerations which the 
 Commission may deem best for the pubhc, the shipper, 
 and the carrier; its order must be based on transportation 
 services, and it must disregard as well the demand of the 
 shipper for protection from legitimate competition, domes- 
 tic or foreign, for unlimited markets, or for the enforce- 
 ment of equitable estoppels arising from a justifiable 
 expectation that past rates will be maintained/ And it 
 should be said that the Commission has often insisted that 
 it is not its function to equalize the profit and loss result- 
 ing from competing operations in different localities, by 
 overcoming natural and commercial conditions with rate 
 adjustments." The Commission has not recognized the 
 right of a carrier to fix its rates to or from a given point 
 on a higher level than they otherwise should be, in order 
 to prevent one community from competing with another, 
 or to keep the products of one community out of a terri- 
 tory, the wants of which may be fully supplied by another 
 community.'' 
 
 § 464. Rates made from a commercial standpoint. 
 
 It is sometimes maintained by a shipper of one product 
 
 fixing rates might act upon the ern Indiana R. R. v. Railroad Com- 
 business pohcies which the railroads mission, 172 Ind. 113, 87 N. E. 966. 
 themselves have been accustomed The question then is what, in view 
 to pursue in making rates. And in of all the facts affecting the move- 
 Southern Ry. V. Atlanta Stove ment of a commodity, is the amount 
 Works, 128 Ga. 207, 57 S. E. 429, it which a carrier should obtam to 
 was held that a commission is not recoup itself fully for the service 
 precluded from considering the condi- it is rendering, having in mind the 
 tions affecting the markets it serves. property it is employing in perform- 
 
 ' Atchison, T. & S. F. v. I. C. C, ing the transportation. Morgan's 
 
 231 U. S. 736, 34 Sup. Ct. 316. L. & T. R. R. & S. S. Co. v. Railroad 
 
 The general principle which the Commission, 127 La. 635, 30 So. 83. 
 majority of courts are now laying ^ Louisville Cotton Seed Products 
 
 down as the guide for all concerned Co. v. L. & N. R. R., 26 I. C. C. 607. 
 seems to be that what is a reasonable ' Indianapolis Freight Bureau v. 
 
 rate depends upon the significance C, C, C. & St. L. Ry., 26 I. C. C. 
 
 of that phrase at common law. South- 53. 
 
 [ 403 1 
 
§ 465 ] Railroad Rate Regulation 
 
 which is competitive with another product that the rates 
 should be adjusted so as to equaUze the standing of the 
 competitors. This has been argued before the Commis- 
 sion with great insistence several times, but never with 
 real success. Thus in one case * the contention was made 
 that the rates upon live stock and dressed beef should be 
 so adjusted that a packer in one part of the country might 
 compete upon equal terms with a packer in another part. 
 The Conamission in its opinion pointed out that this was 
 not a basis upon which the carrier could be compelled to 
 make rates, if indeed the railroad ought ever to act upon 
 such a principle to any extent. "It is evident, therefore, 
 that relative rates cannot be adjusted from a purely com- 
 mercial standpoint. In saying this it is not to be under- 
 stood that the increased value of the product is not 
 legitimately to be taken into account in fixing the rate, 
 which is altogether a different proposition from that 
 advanced by the complainants that the rates should be 
 such as to equalize the standing of different producers in 
 the business in the respective markets of the country. 
 We are of opinion that in the fixing of relative rates upon 
 articles strictly competitive, as these are, the proper rela- 
 tion should be determined from the cost of the service, and 
 if the difference in this respect between two competitive 
 articles can be ascertained, such rate should be fixed for 
 each as corresponds to the cost of service. This is fair to 
 the carrier, and we believe the manufacturer has a right 
 to demand of the companies that such a relation of rates 
 as to these articles should be maintained." ' 
 
 § 466. Rates should not equalize differences in value. 
 
 The railroad cannot by its rates equalize qualities of the 
 same article between different producers. In McGrew v. 
 
 « Squire v. Michigan Central Ry., equalize rates, and, therefore, ship- 
 
 3 Int. Com. Rep. 315, 4 I. C. C. Rep. pers have no right to demand that 
 
 611. this shall be done. W. Va. R. Co. v. 
 
 » Carriers are under no duty to B. & O. R. R., 26 I. C. C. 622. 
 
 [404] 
 
Value of Service Received [ § 466 
 
 Missouri Pacific Railway/" the defendant contended that 
 as coal from its mines at Rich Hill has less value for 
 domestic purposes than Myrick coal it might equalize such 
 difference in value by making a lower rate on Rich Hill 
 coal. The complainant's cost of mining coal at Myrick is 
 nearly 50 cents a ton more than it costs defendant to 
 mine its coal at Rich Hill. The Commission, however, 
 held that this difference in quality would not justify a 
 difference in rate: "If difference in quality is to be equal- 
 ized in favor of the defendant, why should not difference 
 in cost of mining be equalized in favor of the complainant? 
 When this complainant acquired his mine he knew that 
 the value of this coal was greater for domestic purposes 
 than that of Rich Hill, and the price of his mine may well 
 have been fixed in view of that fact, but such an adjust- 
 ment of rate as that put in force by the defendant entirely 
 eliminates this element of value and might destroy the 
 worth of complainant's property. If any such process of 
 equalization is permissible defendant may absolutely dic- 
 tate the comparative value of every mine and industry 
 upon its road; and that such rates should be examined 
 with closest scrutiny when resorted to by the carrier in 
 its own favor." " And recently in Philadelphia & Read- 
 ing Railway v. Interstate Commerce Commission, ^^ when 
 similar facts came before the federal courts for decision, it 
 was laid down that a carrier is not justified in charging 
 for the same or substantially similar coal-carrying service 
 a higher rate for coal because, being of better quality and 
 more easily mined, it can bear a higher rate.^^ 
 
 § 466. Carriers not obliged to equalize disadvantages. 
 
 But while the equalization of advantage cannot be a 
 chief factor in rate-fixing, it may legitimately be con- 
 
 >» 8 I. C. C. 630. 1^ 174 Fed. 687. 
 
 " Equalization by rates for freights " Attempt to equalize assembling 
 
 of costs of production condemned. costs in competing districts also 
 
 Pittsburg Steel Co. v. L. S. & M. S. condemned. Coke Producers' Ass'n 
 
 Ry., 27 I. C. C. 73. v. B. & O. R. R., 27 1. C. C. 125. 
 
 [4051 
 
§ 467 ] Railroad Rate Regulation 
 
 sidered as one of the subordinate factors tending to lower 
 the particular rate, and may be taken into account with 
 the other factors enumerated in this chapter. A railroad 
 company may have nothing to do with the principle of 
 equalization, and shippers whose original disadvantages 
 remain have no legal redress. "The complainants intro- 
 duced considerable testimony to show the cost of pro- 
 ducing corn and wheat in northwest Iowa, for the purpose 
 of demonstrating that at the present rate it was not 
 possible for the farmer in that section to embark in this 
 industry at a profit. Very little has been said in reference 
 to this aspect of the case upon the argument, and probably 
 very little could be consistently said. If the farmer can- 
 not, in a given locality, raise and ship produce to market 
 at a profit upon the existing freight rate, that is usually 
 no reason why the carrier should be compelled to accept 
 less than a reasonable sum for its service." " "It seems 
 plain," said the Commission in a later case, "that the 
 duty of the Commission is to establish just and fair 
 transportation charges in so far as it can be done and 
 allow rival creamery methods to operate under those 
 charges; it should not establish a scale of rates with a 
 view and for the purpose of fostering or discouraging 
 either form of this industry." " 
 
 § 467. Protection of natural advantage. 
 
 It is, therefore, not the function of the Commission to 
 equalize commercial or economic conditions. ^^ The traffic 
 
 " Prouty, Com., in Grain Shippers' relation of rates on flaxseed and lin- 
 
 Ass'n V. Illinois Cent. R. R., 8 I. seed oil. In re Advances on Flax- 
 
 C. C. Rep. 158. seed, 25 I. C. C. 337. 
 
 The interest of the consumer must i" Boileau v. P. & L. E. R. R., 24 1, 
 
 be considered, as well as that of the C. C. 129; Chamber of Commerce 
 
 producer. Andy's Ridge Coal Co. of New York v. N. Y. C. & H. R. R. 
 
 V. So. Ry., 18 I. C. C. 405. R., 24 I. C. C. 55; Slider v. S. Ry., 
 
 '* Beatrice Creamery Co. v. I. 24 I. C. C. 312; In re Advances on 
 
 C. Ry., 15 I. C. C. 109. Cooperage, 24 I. C. C. 656; Okla- 
 
 Commercial conditions considered homa Portland Cement Co. v. M., 
 
 in determining the question of the K. & T. Ry., 24 I. C. C. 158. 
 
 [406] 
 
Value of Service Received [ § 467 
 
 standpoint, not revenue standpoint, is that ordinarily 
 to be considered in determining rates." Commercial 
 conditions may be considered in connection with other 
 factors that determine the reasonableness of a particular 
 rate; but the adequacy of the revenue for the service per- 
 formed by the carriers must take precedence over market 
 conditions affecting the commodity transported.^* The 
 alleged necessities of a certain traffic cannot be urged as 
 a reason why the carriers should be required to maintain 
 rates which were established to meet other conditions, 
 and which the Commission finds to be imduly low to-day." 
 Thus the difference in cost of production cannot be recog- 
 nized as a basis for the adjustment of freight rates between 
 different localities.^" And it is not within the province 
 of the Commission to adjust rates, merely to equalize 
 market conditions.^' Indeed, it may be said that every 
 city is entitled to advantages of its location, and caimot 
 be deprived of it by differential rates.^^ Subject to these 
 qualifications, carriers are still permitted to adjust their 
 rates, regulations, and practices with due regard to the 
 circumstances and conditions confronting them and the nat- 
 ural currents and laws of trade and commerce.^' The 
 future may compel greater recognition of distance in the 
 making of many rates, but the present business structure 
 was not developed on that principle, and if a change is to 
 be made it must be a gradual one.^* But it is at least 
 clearly established that a road should not carry the traffic 
 of one city at less than the cost of service and thus unduly 
 burden other traffic.^^ 
 
 " In re Advances in Rates, East- ^^ Corporation Commission of N. 
 
 ern Case, 20 I. C. C. 243. C. v. N. & W. Ry., 19 I. C. C. 303. 
 
 ^' Lindsay Bros. v. P. M. R. R., '^ Chickasaw Compress Co. v. 
 
 25 I. C. C. 368. . Gulf, C. & S. F. Ry., 11 I. C. C. 
 
 " In re Advances on Flaxseed, 187. 
 
 25 I. C. C. 337. " Chamber of Commerce of New 
 
 =» Sheridan Chamber of Commerce York v. N. Y. C. & H. R. R. R., 24 
 
 V. C, B. & Q. R. R., 26 I. C. C. 638. I. C. C. 55. 
 
 "Omaha Grain Exchange v. C, " Boileau v. P. & L. E. R. R., 
 
 R. I. & P. Ry., 28 I. C. C. 680. 24 I. C. C. 129. 
 
 [407] 
 
§ 468 ] Railroad Rate Regulation 
 
 § 468. No right to build artificial markets. 
 
 It has been said again and again that the public interest 
 is the first consideration in determining the reasonable- 
 ness of a rate; but the rate must be reasonable with respect 
 to the service actually performed, and not with respect 
 to the service that could be performed, if the shipper per- 
 mitted the carrier to select a market for him.^^ Where a 
 plant has been estabhshed, and money invested on faith 
 of certain rates and conditions, the carrier may not in- 
 crease those rates to the serious disadvantage of such in- 
 vestment, without good cause or reason." The mills, 
 the industry and the investments, which have been induced 
 by a rate adjustment, should not be destroyed by a rate 
 adjustment, unless such action is absolutely necessary.^* 
 Rates long in effect as the result of experimenting ought 
 not to be disturbed, unless the Commission is certain 
 that justice requires it.^' Where a particular industry 
 has grown up under rates voluntarily established by car- 
 riers, these rates cannot be advanced without considering 
 the effect upon that industry.'" Rates cannot be estab- 
 lished to shut out foreign products, for the purpose of 
 protecting American industries." And, where it is the 
 manifest purpose of an advance to secure to a railroad 
 practical monopoly of the coal business for the mines on 
 its line, the advance will not be allowed.'^ And in general 
 it may be said that the Commission has no power to equal- 
 ize natural advantages or adopt policies directed to that 
 end.'' No order can be issued to overcome natural ad- 
 
 » Pacific Coast Lumber Co. v. 2' Florida Fruit & Vegetables Ship- 
 
 N. P. Ry., 14 I. C. C. 51; Chamber pers v. A. C. L. R. R., 14 I. C. C. 
 
 of Commerce of Milwaukee v. C, 476. 
 
 R. I. & P. Ry., 15 I. C. C. 460. ™ Joint Coal Rates to Clinton, 
 
 ■" Douglas & Co. V. C, R. I. & P. Iowa, 25 I. C. C. 179. 
 
 Ry., 16 I. C. C. 232. " Rates on Linseed Oil, 26 I. C. C. 
 
 ^ Commercial Club of Superior v. 265. 
 
 G. N. Ry., 241. C.C. 96;InreTrans- ' ^^ Meridan Fertilizer Co. v. V. 
 
 portation of Wool, Hides and Pelts, S. & P. Ry., 26 I. C. C. 224. 
 
 25 I. C. C. 185; Mountain Ice Co. v. '' Sioux City T. E. Co. v. C, M. 
 
 D., L. & W. R. R., 15 I. C. C. 305. & St. P. Ry., 27 I. C. C. 457. 
 
 [ 408 ] 
 
Value of Service Received [ §§ 469, 470 
 
 vantages, by making differential rates designed to equalize 
 advantages and disadvantages of location or manufac- 
 ture.^" 
 
 § 469. No equalization of patrons. 
 
 The profits of shippers are not a test of reasonableness 
 of rates.'^ A railway may not impose unreasonable rates 
 because the business of a shipper is so profitable he can 
 pay it.'^ To base rates upon shipper's ability to pay is 
 to base rates upon cost of production not cost of carriage; 
 this is regulation of industries and commerce by railroads." 
 Investment made in an industrial enterprise in reliance 
 upon an existing rate cannot act as a bar to the readjust- 
 ment of rate structure.'' The Commission cannot limit 
 its view to operations of a single plant in passing upon a 
 transportation charge.'' Carriers cannot increase their 
 revenues and foster industries reached by them, without 
 regard to interests of patrons."" The contention sometimes 
 is made, to be sure, that carriers should adjust their rates 
 in a way to produce equality between the competitors in all 
 markets. It must be apparent that it would be a useless task 
 for the Commission, even if it had the power, to attempt 
 to accomplish such a result. It would involve a careful 
 research into all the circumstances surrounding the busi- 
 ness of each locality, as questions of rent, rates of taxation, 
 cost of labor, and many other things which suggest them- 
 selves. The evident result would be that there would have 
 to be as many differently constructed rates as there are 
 different localities. 
 
 § 470. Equalization of advantage as a factor. 
 A theory of fixing rates which appeals to many econ- 
 
 » W. Va. R. Co. V. B. & O. R. R., Western Case, 20 I. C. C. R. 307. 
 
 26 I. C. C. 622. " Michigan Upper Peninsula Pig- 
 's Truck Growers Aas'n v. A. C. iron Rates, 26 I. C. C. 284. 
 
 L. R. R., 20 I. C. C. R. 190. ™ Robinson Land & Lumber Co. 
 
 » R. R. Com. of Kans. v. A., T. & v. M. & O. R. R., 26 I. C. C. 427. 
 
 S. F. Ry., 22 I. C. C. R. 407. ■"> Wichita Falls System Joint Coal 
 
 " In re Advances in Rates, Rate Cases, 26 I. C. C. 215. 
 
 [409] 
 
§ 471 ] Railroad Rate Regulation 
 
 omists, which is in fact a modification or special applica- 
 tion of the rule for charging what the traffic will bear, is 
 the theory that rates should be so fixed as to equahze the 
 advantage of shippers and thus estabhsh the conditions 
 of business for the good of the whole country." It is in 
 substance a sort of legal protection to struggUng industries. 
 Thus if wheat cannot be raised in Wyoming as cheaply 
 as in Iowa, the rates from Wyoming to the seaboard should 
 be correspondingly reduced; imless indeed it does not 
 seem to the rate-fixers to be for the country's good that 
 wheat should be raised in Wyoming. A practical objec- 
 tion to this doctrine will at once appear. It calls on the 
 private individuals who happen to have power over rates 
 to act in such a way as to subserve the public good, rather 
 than their own advantage; and thus without election as 
 legislators and without the responsibihty of office, to per- 
 form one of the most difficult of legislative functions. 
 Nor is it practically possible to fix rates entirely or princi- 
 pally on this theory.*^ Rates for the transportation of 
 property should be arrived at and based so far as practi- 
 cable upon permanently continuing, fixed facts and condi- 
 tions. The fluctuations of the markets of the country 
 are so frequent, especially as to competitive articles, and 
 oftentimes unexpected, that commercial considerations 
 alone would not furnish a sufficiently stable and fixed rule 
 for guidance in making a rate which ought to remain sub- 
 stantially permanent through all fluctuations. 
 
 § 471. Passenger fares slightly affected by this principle. 
 
 Passenger schedules are usually made upon a mileage 
 basis; there is little attempt in making them up to minimize 
 the disadvantages of distances. But the principle is applied 
 
 *i The Act is not designed to give growers to market their product at 
 
 the Commission power to equalize a reasonable profit are not the test 
 
 opportunity. Fort Arthurs B. of of the justness of a transportation 
 
 T. V. A. & S. Ry., 27 I. C. C. charge. Florida Fruit & Vegetables 
 
 403 Ass'n v. A. C. L. R. R., 17 I. C. C. 
 
 *^ The rates necessary to permit 552. 
 
 [410] 
 
Value of Service Received [ § 471 
 
 to a very limited extent by the railroads; for example, 
 suburban stations are sometimes grouped in zones. The 
 principal illustration of this policy, if it be such, of equaliz- 
 ing passenger fares is the five cent fare customary in Amer- 
 ican municipaUties for transportation in street cars whether 
 the passenger rides for one block or ten miles. By this 
 policy most land within a metropolitan district is brought 
 within the benefit of this uniform fare, whatever may be 
 its distance from the commercial centers. In justifying a 
 consolidation of street railways, one Judge said: *' "As a 
 result, at the time the ordinance was adopted, the mile- 
 age of tracks increased from the previous aggregate of 110 
 miles to 142 miles, reaching every section of the city, with 
 shorter and better routes, and furnishing 38 transfer points, 
 with a imiversal transfer system, — a feature of especial 
 value to the public, as a single fare of five cents gives a 
 maximum length of ride more than double the old arrange- 
 ment." 
 
 ■" Milwaukee Electric Ry. v. Mil- See the Commutation Rate Cases, 
 
 waukee, 87 Fed. 577. See also Wash- 21 I. C. C. 428, 27 I. C. C. 
 
 ington Suburban Rates, 26 I. C. C. 549. 
 398, and cases cited. 
 
 [411] 
 
CHAPTER XI 
 
 CLASSIFICATION OF COMMODITIES 
 
 § 480. Provisions of the Act. 
 481. Prevalence of classification. 
 
 Topic A . Methods of Classification 
 
 § 482. The meaning of classification. 
 
 483. Classification the method of establishing the rate. 
 
 484. The necessity of a proper classification. 
 
 485. Classification a convenience in rate fixing. 
 
 486. History of classification in the United States. 
 
 487. Uniformity of classification attempted. 
 
 488. Classification necessarily imperfect. 
 
 489. Classification not imduly minute. 
 
 490. Extra class divisions. 
 
 491. Commodity rates. 
 
 492. Method of classification. 
 
 493. Interpretation of the classification sheet. 
 
 Topic B. General Principles of Classifying 
 
 § 494. Influences determining classification. 
 
 495. Adjustment of business to established classification. 
 
 496. Classification according to representations. 
 
 497. Bases of classifying goods. 
 
 498. Justification for making classification on railroads. 
 
 499. Reasonableness of classification requisite. 
 
 500. A proper rate involves reasonableness of classification. 
 
 501. Classification not determined by a particular commodity. 
 
 502. Jurisdiction of the Commission. 
 
 503. Relief from improper classifications. 
 
 504. Low-grade commodities. 
 
 505. High-grade manufactures. 
 
 Topic C. Comparison of Commodities 
 
 § 506. Elements in comparison of commodities. 
 
 507. Like classification for similar goods. 
 
 508. Different classification for dissimilar goods. 
 
 509. Certain commodities compared. 
 
 510. Provisions. 
 
 511. Groceries. 
 
 [412] 
 
Classification of Commodities 
 
 ^512. Vegetables. 
 
 513. Lumber. 
 
 514. Bottled goods. 
 
 515. Dry goods. 
 
 516. Difference between commodities. 
 
 517. Raw material and manufactured products. 
 
 Topic D. Differences Between Commodilies Carried 
 
 ') 518. Classification based on the package. 
 
 519. Business expensive to handle. 
 
 520. Shipment in form more convenient for handling. 
 
 521. Perishable freight. 
 
 522. Less than usual care required. 
 
 523. Unusual care in handling required. 
 
 524. Classification based on volume of business. 
 
 525. Large volume of traffic in a certain commodity. 
 
 526. Value of the goods as an element. 
 
 527. Different classification of coals. 
 
 528. Bases of comparing values of goods. 
 
 529. Differing value of same kind of freight. 
 
 Topic E. Carload and L. C. L. 
 
 I 530. Different classification and rating. 
 
 531. When difference in classification is required. 
 
 532. Minimum carloads. 
 
 533. Minimum carload regulations. 
 
 534. Mixed car loads. 
 
 535. Shipment in form permitting greater carload. 
 
 536. Trainloads. 
 
 537. Traffic handled in special trains. 
 
 538. Car loaded by several shippers. 
 
 539. Commission rulings upon special ratings. 
 
 540. Car sizes. 
 
 541. Special equipment not necessary. 
 
 Topic F. Difference in Rate Between Classes 
 
 ! 542. Principles governing differences between classes. 
 
 543. Low-grade commodities may be carried at low rates. 
 
 544. High-grade commodities should not be overcharged. 
 
 545. Proportionate difference between the classes. 
 
 546. Principles in making commodity rates. 
 
 547. Reasonableness tested by comparison. 
 
 548. Slight differences between similar commodities. 
 
 549. Discrimination between commodities forbidden. 
 
 550. Difference between values justifies different classification. 
 
 551. Relative differences between ratings. 
 
 [413: 
 
§§ 480, 481 ] Railroad Rate Regulation 
 
 § 480. Provisions of the Act. 
 
 The powers of the Commission specifically over clas- 
 sification are as recent as the Amendments of 1910. Pre- 
 vious to that time, classification could only be reached 
 indirectly by attacking particular rates, either as unreason- 
 able in themselves, or unjustly disproportionate. Only 
 since 1906 has the Commission had power to fix rates 
 absolutely, as a maximum; and, before that time, not 
 having such power, it could not order changes in classifica- 
 tion. As section 15 now runs, all rates, classifications, 
 regulations and practices must be reasonable, the clause 
 providing, as to classification, that it is thereby made the 
 duty of all common carriers, subject to the provisions of 
 the Act, to establish, observe, and enforce just and reason- 
 able classifications of property for transportation, and 
 reasonable and proper regulations affecting classifications, 
 upon just and reasonable terms. Every unjust and unrea- 
 sonable classification is prohibited and declared to be unlaw- 
 ful and the Commission has the same juiisdiction over these 
 matters pertaining to rates as it has over the rates them- 
 selves. How differences in rating are saved from being con- 
 sidered discriminatory is discussed at large in Chapter XV. 
 
 § 481. Prevalence of classification. 
 
 It is obvious that classification is in many businesses 
 necessary for convenience in rate fixing, if for no other 
 reason. And, indeed, some form of classification has been 
 used from time immemorial. The first formal classifica- 
 tion appears to have been made for toll roads, a system 
 which was taken up naturally enough for canal tolls. For 
 as soon as public service became a diversified business 
 of large proportions, fairness to the patrons, as well as the 
 convenience of the proprietors, required a classification as 
 the basis of fixing rates. In modern times classification 
 has become the very foundation of railroad rates, and the 
 question of charge is primarily a question of into which 
 class the goods shipped fall. It may be admitted that as 
 [414] 
 
Classification of Commodities [ §§ 482, 483 
 
 a classification gains in convenience, it loses in accuracy. 
 No classification can be so minute as to conform to the 
 differing varieties and conditions of traffic; and to separate 
 differing grades or varieties of the same service into different 
 classes with varying rates, even if it could be accomplished, 
 would go far to defeat the real purpose of classification. 
 
 Topic A. Methods of Classification 
 
 § 482. The meaning of classification. 
 
 Articles offered for transportation are classified in such 
 a way as to bring together into one class such articles as 
 can fairly be subjected to the same charge for carriage. 
 A rate is then fixed for each class; not a difficult matter 
 to schedule, since it has been found quite practicable to 
 make the number of classes small. *^ This division of all 
 possible articles of transportation into a few large classes 
 as a basis for fixing the rates of carriage is what is known 
 as classification of freights. It has been seen that it is 
 probable that the necessity of the case forced a more or 
 less crude classification upon carriers, as soon as carriage 
 became a business. At all events, to-day the classification 
 sheet is the basis upon which rate making is accomplished.'*^ 
 It is impossible even to enumerate all the articles that may 
 be offered for transportation; still more so to frame a sched- 
 ule showing an independent rate for every such article, 
 and convey information of the schedule to every freight 
 agent in such a form that he can quickly and accurately 
 state a rate to the shipper. No modern carrier doing a 
 large business, and especially no modern railroad, has 
 undertaken to make rates without classification. 
 
 § 483. Classification the method of establishing the rate. 
 
 The division of rates is accomplished by the classifica- 
 tion of all articles into certain groups, and then fixing the 
 
 " Classification of articles should " How the goods should be loaded 
 
 be plainly and clearly stated. Pa- considered in determining the proper 
 cific Coast Biscuit Co. v. S. P. & S. classification. Western Classifica- 
 Ry., 20 I. C. C. 546. tion Case, 25 I. C. C. 442. 
 
 [415] 
 
§ 484 ] Railroad Rate Regulation 
 
 rate for each group.** In classification, as will be seen, 
 all the factors which have been discussed are considered; 
 and it is by affecting the classification that such factors 
 usually influence the particular rate.*^ The classes having 
 been established, it is necessary next to determine the 
 difference of rate between the classes, which may be 
 effected by establishing a certain proportion between 
 the various class rates. Finally, it remains to fix the 
 charge according to the length of journey; and this may 
 be done by fixing the rate between individual stations, or 
 by grouping the stations, and fixing the rate with refer- 
 ence to an entire group. The character of the freight in 
 question, the space it occupies in proportion to its weight, 
 its intrinsic value to the shipper, and the risk to the 
 carrier attending its transportation all have to be consid- 
 ered in determining whether a rate and classification are 
 just and reasonable. 
 
 § 484. The necessity of a proper classification. 
 
 Different articles require such different care in carriage 
 that it would be unjust to fix a single rate that should 
 apply to all articles carried. If a uniform rate were fixed 
 for each pound carried, lead would be more expensive to 
 ship than live stock; and if the rate were proportioned to 
 bulk, a diamond would be carried more cheaply than fence- 
 posts. It is necessary in order to distribute fairly among 
 the shippers the burden of the entire schedule of rates 
 to graduate the charge according to the nature of the 
 article carried.** "Classification is recognized as a neces- 
 sary method of adjusting the burdens of transportation 
 
 •"> When differentials are not dis- corrugated paper or pulp cartons 
 
 proportionate to differences in trans- of certain sizes, when uncrated, 
 
 portation conditions, higher rates instead of assessing on actual weights, 
 
 on salt in packages than on salt is unreasonable. Millinery Jobbers 
 
 in bulk are not unreasonable. Got- Ass'n v. American Express Co., 
 
 tron Bros. Co. v. G. & W. R. R., 28 20 I. C. C. 498. 
 I. C. C. 38. « McDill, Com., in F. Schumacher 
 
 " A classification rule applying Milling Co. v. Chicago, R. I. & P. 
 
 minimum weights on shipments in Ry., 6 I. C. C. Rep. 61. 
 
 [416] 
 
Classification of Commodities [ § 485 
 
 equitably upon the various articles of traffic, in view of 
 differing circumstances and conditions, and but for the 
 necessity of such adjustment, considerations based alone 
 on weight and distance of haul would probably determine 
 rates, except as modified by competition. This method, 
 while securing practical uniformity, would probably de- 
 prive many articles which are iiow important factors 
 in commerce of the benefit of transportation to distant 
 points." "" 
 
 § 485. Classification a convenience in rate fixing. 
 
 So many varieties of articles are carried by a modern 
 carrier that it is a practical impossibility to consider 
 each article by itself and fix a separate rate for its carriage. 
 The attempt to frame separate rates, the Commission 
 early said, has proved to be so cumbersome and incon- 
 venient that the arrangement of freight into classes is 
 deemed by the roads an essential part of rate-making, 
 and is so treated by the Act to Regulate Commerce, which 
 requires that the schedule of charges which every carrier 
 must keep open to the public "shall contain the classifi- 
 cation in force." '''' Recently the Commission ordered 
 that there should be a new classification of express rates, 
 in which the standard or first-class rate shall be that on 
 merchandise and to which there shall be but one great 
 class of exceptions, or second class, consisting of articles 
 of food and drink now carried under the term of "general 
 specials." The r^te on the latter class should be a cer- 
 tain percentage of the merchandise rate, and 75 per cent 
 of the merchandise rate would yield a fair rate. While 
 other rates were permitted to meet traffic needs and de- 
 velop industries, it was said that all such rates should be 
 based on conditions of service and should likewise be 
 stated in percentages of the merchandise rate." 
 
 " Differences in loading justify 3 Int. Com. Rep. 460, 4 I. C. C. Rep. 
 
 differences in rate. Re Advances in 559. 
 
 Lemons, 23 I. C. C. 27. " In re Express Rates, 24 I. C. C. 
 
 «»Coxe V. Lehigh VaUey R. R., 380. 
 
 27 [ 417 ] 
 
§ 486 ] Railroad Rate Regulation 
 
 § 486. History of classification in the United States. 
 
 .Before the passage of the Interstate Commerce Act 
 each railroad company had its own classification of com- 
 modities, and fixed its own rates; subject to occasional 
 modification by pools and traffic agreements with con- 
 necting or competing roads. Upon the passage of the Act 
 the inconvenience of this system became so obvious that 
 partially successful efforts were made to bring about a 
 uniform classification.^^ The railroads operating in the 
 northeastern part of the United States agreed upon a classi- 
 fication known as the Official Classification; those operat- 
 ing in the southeastern part of the United States agreed 
 on a separate classification known as the Southern; and 
 those in the west agreed on the Western Classification. 
 The boundaries between the territory covered by these 
 classifications respectively are formed by the Potomac, the 
 Ohio, and the Mississippi Rivers. These classifications 
 still prevail throughout the country, although subject 
 to various modifications applying only in particular in- 
 stances. This general statement requires some modifica- 
 tion in detail. Thus goods shipped west from Chicago 
 take the Western Classification at once and on the Pacific 
 slope the Western Classification is modified. And every 
 railroad, as will be seen, may make "commodity" rates 
 for certain articles outside the classification, and thus 
 each road may to a certain extent make an independent 
 rating. For example, class rates to and from the Mis- 
 sissippi River crossings are published under special classi- 
 fications.^^ 
 
 " Thurber v. N. Y. C, & H. R. R., St. L., I. M. & S. Ry. Co., 28 I. C. C. 
 
 2 Int. Com. Rep. 742, 3 I. C. C. 473. 569. 
 
 For a discussion of circumstances There are other groupings to be 
 
 justifying advanced rating in the noted; for example, lying north of 
 
 classification of articles in Western the Ohio and extending west from 
 
 Classification territory, see the West- Pittsburgh to the Mississippi River, 
 
 ern Classification Case, 25 I. C. C. but excluding the upper crossings 
 
 442. and the northern corner of the State 
 
 *^ Texarkana Freight Bureau v. of Illinois, is the so-called Central 
 
 [418] 
 
Classification of Commodities [ § 487 
 
 § 487. Uniformity of classification attempted. 
 
 Various attempts have been made to secure one uni- 
 form classification throughout the country; and to this 
 effort the Interstate Commerce Commission has lent its 
 aid. The Commission has sought as far as practicable 
 to secure the establishment throughout the country of a 
 uniform classification of freight, believing it to be to the 
 interest and advantage of both carriers and shippers.** 
 But although at one time the effort seemed on the point 
 of success, nothing came of it. It is doubtful whether 
 it will ever become possible to frame one uniform classi- 
 fication. The differences of classification are in fact due 
 to fundamentally different conditions in the three great 
 divisions of the country; differences in density of popula- 
 tion, in nature and purpose of traffic, in cost of con- 
 struction and maintenance, which necessarily influence to 
 some extent the classification of articles carried. Until 
 there is greater uniformity of conditions, identity of classi- 
 fication is unlikely, and if secured would probably oper- 
 ate unjustly. While the nearest approximation to uni- 
 formity of classification is desirable, all agree that great 
 caution should govern attempts to bring it about. The 
 Commission has said to force it at once was undesirable, 
 and while one dealer might be greatly benefited another 
 might be ruined, and that the final adjustment of a 
 uniform classification must necessarily be the arrange- 
 ment of a number of compromises. And it was said in 
 Pyle v. East Tennessee, Virginia & Georgia Railroad Co.*° 
 that occasional inequalities of rate, and slight and occa- 
 sional differences in the rates charged would not prove 
 that the whole system is wrong and that when compari- 
 son is attempted to be made of classification and rates, 
 different conditions of transportation cannot be ig- 
 
 Freight Association territory. Com- gle Co. v. Duluth, S. S. & A. Ry., 
 
 mercial Club of Duluth v. B. & O. 10 I. C. C. Rep. 489. 
 
 R. R. Co., 27 1. C. C. 639. « 1 Int. Com. Rep. 770, 1 I C. C. 
 
 " Yeomans, Com., in Duluth Shin- Rep. 473. 
 
 [419] 
 
§ 488 ] Railroad . Rate Regulation 
 
 nored.^* Very recently the Commission has spoken more 
 hopefully of the possibility of a uniform classification, 
 noting that the carriers are working upon it and Congress 
 has it under advisement." 
 
 § 488. Classification necessarily imperfect. 
 
 It is obvious, of course, that the fewer the classes cre- 
 ated the more imperfect the classification will necessarily 
 be. Since the very nature of classification is the grouping 
 together of different things, it is not possible to secure 
 exact accuracy of treatment for all the varieties included 
 in the class; and the fixing of rates in this method there- 
 fore involves compromise, and can at best only approxi- 
 mate correctness. ''^ As the Commission said, in one of 
 the most exhaustive cases on this subject — National Hay 
 Association v. Lake Shore & Michigan Southern Railway — 
 "The making of railroad tariffs is simplified by classifying 
 the great number of articles commonly offered for trans- 
 portation and fixing rates for the different classes instead 
 of making a separate rate for each commodity. In a 
 classification such as the Official, which contains but six 
 general classes, it is manifestly impossible to bring to- 
 gether in each class only such articles as resemble each 
 other in the elements of character, use, value, volume, 
 bulk, weight, risk and expense of handling, which have so 
 often been referred to as governing conditions in freight 
 classification. Besides these general considerations affect- 
 ing classification, competition is often an important factor. 
 Such competition includes not only that between carriers, 
 but also that of a commodity produced in one section 
 with the same commodity produced in another section, 
 and sometimes the competition of one kind of traffic 
 with another. Necessarily many articles must appear 
 
 »5 McDill, Com., in F. Schumacher ^' Proctor & Gamble Co. v. Cleve- 
 
 Milling Co. v. Chicago, R. I. & P. R. land, Cin., Chicago & St. L. Ry., 
 
 R., 6 I. C. C. Rep. 61. 3 Int. Com. Rep. 131, 4 I. C. C. Rep. 
 
 '' Boston Chamber of Commerce 87, per Veazie, Com. 
 V. A., T. & S. F. R. R., 28 1. C. C. 230. 
 
 [420] 
 
Classification of Commodities [ § 489 
 
 together in a class which bear httle relation to each 
 other in all these respects, though some may be of like 
 character while differing in bulk or in value, others have 
 similar bulk while varying largely as to weight or volume, 
 and still others present similarity in one or more of the 
 elements mentioned, but have no common relation as to 
 others. The best that can be done under such a scheme 
 of classification is to place two or more articles possessing 
 general similarity in the same class, and where an article 
 is not analogous to any other to put that article in the 
 class containing commodities which are most nearly 
 related to it in general character and other essential 
 respects." ^* 
 
 § 489. Classification not unduly minute. 
 
 No classification can be so minute as to conform to the 
 differing varieties and conditions of traffic; and to separate 
 different grades or densities of the same article into differ- 
 ent classes with varying rates, even if it could be accom- 
 plished, would go far to defeat the real purpose of classifi- 
 cation. If the rate on an article is reasonable to those 
 who ship the great bulk of that article in the form in which 
 it is commonly prepared for transportation, that rate does 
 not become unreasonable to the shipper of a small quantity 
 of the same article, merely because the shipment is pre- 
 pared in an uncommon form, and one which affords the 
 carrier a greater profit per hundred pounds. This is 
 particularly true when the preparation of that article in 
 the more profitable form would impose some degree of 
 hardship upon a large majority of shippers because of its 
 greater expense; and for this among other reasons it was 
 held that cotton compressed in a round bale, in which 
 form it could be handled much more easily and occupied 
 much less space than in the ordinary bale, was not neces- 
 sarily for that reason entitled to a lower classification.'" 
 
 <*» 9 I. C. C. Rep. 264, 306. C, C. & St. L. Ry., 11 I. C. C. Rep. 
 
 ™ Planter's Compress Co. v. C, 382. 
 
 [4211 
 
§ 490 ] Railroad Rate Regulation 
 
 And the Commission commended the raikoads for placing 
 in the same class all window shades, whether mounted or 
 unmounted." It would seem that the classification should 
 be no more minute than could be described in a reasonable 
 general rule. A matter so extensive and difficult as 
 classification of freights must evidently be mainly gov- 
 erned by general rules; this is indispensable to any system 
 of classification at all.^^ The alternative is a rate for 
 every commodity separately, instead of a class rate for 
 articles of enough similarity in some controlling features 
 to be classed together."^ 
 
 § 490. Extra class divisions. 
 
 The standard classification, which contains five or six 
 classes, while sufficient for ordinary commodities, does not 
 and in the nature of things cannot cover exceptional cases, 
 and especially cases of especially difficult carriage. In 
 order to cover such exceptional cases, it is the custom to 
 give certain commodities a rating above the first class, 
 such as "double first class rates," or even higher.*^ Fur- 
 thermore, there is a continual tendency to differentiate 
 commodities, and to seek a means of giving to some 
 article a rate which falls between two successive class 
 rates. This tendency has resulted in the creation of intra- 
 class ratings; such as a rate "forty per cent less than 
 third class." This tendency is of course opposed in its 
 
 «' Veazie, Com., in Page v. Dela- on variations in value, since the 
 
 ware, L. & W. R. R., 6 I. C. C. Rep. number of classes would be too large, 
 
 148, 168. But see Interstate Com. and the refinement too subtle for 
 
 Comm. V. Delaware, L. & W. R, R., prajctical operation, and on the evi- 
 
 64 Fed. 723. dence presented the Commission 
 
 62 Andrews Soap Co. v. P. C. & was not justified in withdrawing a 
 
 St. L. R. R., 3 Int. Com. Rep. 77, particular commodity varying in 
 
 4 I. C. C. Rep. 41. value, density and dimensions with 
 
 " Classification cannot reflect mi- each bale, from the general class to 
 
 nute variations in value. W. E. which it belonged. Forest City 
 
 CaldweU Co. v. C. I. & L. Ry., 20 Freight Bureau v. Ann Arbor R. 
 
 I. C. C. R. 412. R., 18 I. C. C. 205. 
 
 "* A classification will not be based 
 
 [4221 
 
Classification of Commodities [ § 491 
 
 fundamental principle to the whole theory of classification, 
 and if given play enough would soon put an end to the 
 system on which present rates are based; and it is there- 
 fore not to be commended as a general expedient. If it 
 seems necessary in any particular case, it is probably 
 because the difference in rates of the two classes con- 
 cerned is unduly great.*^ 
 
 § 491. Commodity rates. 
 
 But besides the extra class rates proper, every road has 
 specially low rates for some staple commodities, below the 
 lowest class rates, which are known as commodity rates. 
 Commodity rates are special rates, which ought to be 
 made with reference to all conditions surrounding trans- 
 portation of the particular articles between the particular 
 points.^^ The principle on which such rates are estab- 
 lished is doubtless a sound one. The articles which are 
 granted commodity rates are staples of comparatively low 
 value, like grain, lumber, and salt, moving in great quanti- 
 ties over roads of which they form a large part of their 
 traffic. A granger road, carrying great quantities of 
 grain in bulk, is in an entirely different position as to 
 traffic in grain from a road in another part of the country 
 carrying small quantities from time to time to the small 
 consumer; and while the traffic of the latter road can be 
 classified, that of the former requires special treatment. 
 Each road, therefore, may establish commodity rates in 
 such cases; subject to the limitation that the rate must 
 not be unduly low, so as to cause a loss. A commodity 
 
 ^* As the Commission astutely While a commodity rate may be a 
 said recently, it is difficult to see why, different rate from a class rate, it 
 in a scientific schedule, Class A and does not necessarily follow that it 
 Class 5 should be the same; the ob- must be a lower rate, nor is it ob- 
 ject of creating different classes is ligatory upon the carrier to thereby 
 to apply different rates. Iowa R. R. establish a lower rate. Wheeling 
 Comm's V. Ariz. E. Ry., 28 I. C. C. Corrugating Co. v. B. & O. R. R., 
 563. 18 I. C. C. 125. 
 
 »« Mississippi River Case, 28 I. C. 
 C.47. 
 
 [423] 
 
§§ 492, 493 ] Railkoad Rate Regulation 
 
 must not be carried at such unremunerative rates as will 
 impose burdens upon other articles transported to recoup 
 loss incurred in carrying that commodity." 
 
 § 492. Method of classification. 
 
 Classification in the United States, as matters are 
 ordered to-day, is made by a committee appointed by the 
 railroads operating within the territory for which the 
 classification is to be prepared, who meet from time to 
 time to prepare or revise the classification sheet. Classifi- 
 cations are adopted by this committee by majority vote, 
 and are then published, and when published are binding on 
 all the roads concerned. The printed schedule containing 
 the classification of all articles for carriage is called the 
 classification sheet. It has been insisted that ratings 
 should be broad enough to meet general commercial 
 demands and should not be indefinite.*^ And where both 
 class and commodity rates on any commodity are in 
 effect it is always held that the commodity rate, being 
 specific, takes the article out of the classification and be- 
 comes the only lawful rate.*' 
 
 § 493. Interpretation of the classification sheet. 
 
 The classification sheet becomes a document of interest 
 to the public, and shippers are at once entitled to the 
 benefit of its terms. It is therefore a document to which 
 
 " Anthony Salt Co. v. Missouri re-establishing a higher class rate in 
 
 Pac. Ry., 4 Int. Com. Rep. 1, 5 I. C. order to remove a discrimination and 
 
 C. Rep. 299. bring rates into proper relationship, 
 
 Class rates on heavy commodities held to be justified. In re Advances 
 
 are made to move the more or less on Apples, 24 I. C. C. 38. 
 
 hmited shipments from place to «" Central Cahfornia Traction Co. 
 
 place, and commodity rates to move v. Chicago, M. & St. P. Ry., 24 I. C. 
 
 large steady shipments. James & C. 550. 
 
 Abbot Co. V. B. & M. R. R., 17 I. C. Sufficient reason not advanced 
 
 C. 273. for abolition of class rate and estab- 
 
 *' Sea Gull Specialty Co. v. Balti- lishment of low commodity rate, 
 
 more Steam Packet Co., 27 I. C. C. Volco Mfg. Co. v. A., T. & S. F. Ry., 
 
 267. 28 I. C. C. 289. 
 
 Canceling a commodity rate and 
 
 [424] 
 
Classification of Commodities [ § 494 
 
 the carrier cannot give such an interpretation as it desires. 
 The interpretation is subject to the rules governing writ- 
 ings in general, and the carrier is bound by the classifica- 
 tion sheet according to its ordinary legal interpretation. 
 For example, it is a well-established rule that the publica- 
 tion of a commodity rate takes the commodity out of 
 the class rate, within the description of which it would 
 otherwise fall.^" The classification is supposed to inform 
 the persons engaged in that business in what classes the 
 articles they handle are placed for transportation pur- 
 poses, and it would fail to do this if instead of employing 
 terms of designation in the sense familiar to themselves it 
 made use of them in a sense fixed upon by persons engaged 
 in an occupation altogether different, and which might to 
 an expert in their own business be strange and mislead- 
 ing.^* 
 
 Topic B. General Principles of Classifying 
 
 § 494. Influences determining classification. 
 
 In ideal traffic conditions certain elements would be 
 taken into account in establishing a freight rate. These, 
 among others, would be the value of the commodity, the 
 bulk of the commodity, the cost of service, the volume of 
 traffic, etc. Under these conditions the witnesses rather 
 thought that value might be a pretty important factor 
 in determining the freight rate. Under actual conditions, 
 while an attempt was made to regard these various con- 
 siderations, as a rule the controlling influence was com- 
 petition. Whatever traffic managers would be glad to do, 
 at the present time they do not, and perhaps cannot, 
 consider in the making of rates much beyond actual 
 
 ™ Indianapolis Freight Bureau v. " Hurlburt v. Lake Shore & M. S. 
 
 C, C, C. & St. L. Ry., 16 I. C. C. R. R., 2 Int. Com. Rep. 81, 2 I. C. 
 
 341. C. Rep. 122. 
 
 Rules for the intervention of Results of making false classifica- 
 
 classification sheets. See Smith v. tion. See Illinois Central R. R. 
 
 Gt. Northern Ry. Co., 15 N. D. 195, Co. v. Seitz, 214 111. 350, 73 N. E. 
 
 107 N. W. 56. 585. 
 
 [425] 
 
§ 495 ] Railroad Rate Regulation 
 
 competitive conditions. In Grain Shippers' Association v. 
 Illinois Central Railroad," Mr. Commissioner Prouty said: 
 "Originally these various factors entered to an extent into 
 the freight rate, and under their operation schemes of 
 rates and classifications were built up. Those classifica- 
 tions and class rates serve in a measure as the basis of 
 rates at the present time, having been gradually modified 
 by the action of competitive forces." Following the same 
 line of thought, Mr. Commissioner Veazie, in Proctor & 
 Gamble Company v. Cincinnati, Hamilton & Dayton 
 Railway," pointed out, in speaking of the classification 
 committee, that, "It should not be overlooked that their 
 training has been largely from the railroad standpoint and 
 on this account their error, if either way, is more liable to 
 be in favor of high rates. That they should always be 
 exactly right is more than any earthly tribunal ever 
 attained." 
 
 § 495. Adjustment of business to established classification. 
 
 Since the classification of freights is the result of long 
 experience, and business has become adjusted to it, the 
 classification and rates will not be disturbed unless it is 
 made clear that there is some tangible inequality involved 
 and a fairer adjustment of rates is shown. Due weight 
 must also be given to the fact that the free movement of 
 the commodity is an auxiliary to the production of a larger 
 volume of traffic to the carriers.'* The classification of 
 many, if not most articles has been substantially the same 
 since the Act took effect.'* During all this time, and 
 
 " 8 I. C. C. Rep. 158. for the exercise of "the flexible limit 
 
 Elements of classification are con- of judgment which belongs to the 
 
 sidered in full in I. & S. Docket No. power to fix rates." Louisville & 
 
 76, 25 I. C. C. 472. Kellogg Food Nashville Raih-oad Coal and Coke 
 
 Co. V. G. T. Ry. of Canada, 26 I. Rates, 26 I. C. C. 20. 
 
 C. C. 611. "Meridian Fertilizer Factory v. 
 
 " Int. Com. Rep. 131, 4 I. C. C. Texas & P. Ry., 26 I. C. C. 351. 
 
 Rep. 87. '^ Grain Shippers Ass'n v. I. C. 
 
 Preservation of classification calls Ry., 8 I. C. C. Rep. 158. 
 
 [426] 
 
Cl,ASSIFICATION OF COMMODITIES [ § 496 
 
 probably during a much longer time, traffic conditions and 
 commercial conditions have been adjusting themselves to 
 this relation of rates. Certainly this relation should not be 
 disturbed until some intelligent opinion can be formed as 
 to what should take the place of it. It is not enough to 
 know that the present conditions are not ideal. It must 
 further appear that something better is attainable. While 
 it may be true that the tendency should be to eliminate 
 commodity rates and work more nearly to a class basis, 
 still the rates of this country have been built upon a 
 different theory, and to apply that theory would be 
 revolutionary and destructive of many legitimate busi- 
 ness enterprises.'^^ While every effort conducive to uni- 
 formity of classification is to be commended, it does not 
 follow that that result should be attained by accepting as a 
 standard a classification prescribing a rate which, when 
 applied to a given commodity or territory, becomes un- 
 reasonable." 
 
 § 496. Classification according to representations. 
 
 In determining the true classification of goods offered for 
 carriage the carrier may act upon the shippers' representa- 
 tions as to the nature of the goods. This was neatly 
 brought out in a case where a manufacturer claimed that 
 his soap, which was advertised extensively as toilet soap, 
 should be classed not as toilet soap but as laundry soap.^* 
 He claimed that his soap was a cheap soap, and com- 
 peted in the market with laundry soap; but as it had been 
 extensively advertised as toilet soap it was necessary to 
 call it toilet soap in order to have the benefit of the ad- 
 vertising. The Commission held that the railroads were 
 right in classifying the soap according to the representa- 
 tion of its manufacturer. Mr. Commissioner Schoomacher 
 
 '» United States Leather Co. v. '' Andrews Soap Co. v. Pittsburgh, 
 
 S. Ry., 21 I. C. C. 323. C. & St. L., 3 Int. Com. Rep. 77, 
 
 " In re Advances on Locomotives, 4 I. C. C. Rep. 41, per Schoomacher, 
 
 21 I. C. C. 103. Commissioner. 
 
 [427] 
 
§ 497 ] Railroad Rate Regulation 
 
 said: "The Commission is unable to see how it can prop- 
 erly or justly require carriers to analyze the freight 
 offered to them, to ascertain its quality and its actual 
 value, when those are claimed to differ from its trade 
 designation and the price paid by the consumer. A rule 
 of that kind would be altogether impracticable. The 
 public is entitled to truthful representations respecting 
 goods offered for sale. If an erroneous representation is 
 essential to the sale of a commodity it is not inequitable 
 that some burden should be a necessary consequence. 
 When a manufacturer describes his article to the public 
 for the purpose of making a market for it, he also so 
 describes it for purposes of carriage, and it seems as 
 reasonable that the carrier should have a right to accept 
 the manufacturer's representation concerning his product 
 as that the public should be influenced by it in the pur- 
 chase of the article." ^^ 
 
 § 497. Bases of classifying goods. 
 
 In Myer v. Cleveland, Cincinnati, Chicago & St. Louis 
 Railway ^° the complainant, a manufacturer of hats, 
 objected to the classification of hatters' furs as double 
 first class. The Commission, comparing hatters' furs with 
 the other articles classed in the same way, found that 
 none of them "affords as desirable traffic as the one under 
 consideration, and in only three or four instances is there 
 any approach to this." Comparing with articles in the 
 first class, they concluded that "but very few of them 
 are as desirable freight as hatters' furs and fur scraps and 
 cuttings, and that none of them are more so. No special 
 reasons were shown why these two commodities should 
 pay a higher rate than other similar commodities." In 
 reply to this, the carrier contended that "one commodity 
 
 " If a certain brand of cleanser is s» 9 I. C. C. 78. 
 to be transported as soda ash, it See also Warner v. N. Y. C. & 
 
 should be so designated. Ford Co. v. H. R. R. R., 4 I. C. C. 32, 3 Int. 
 
 M. C. R. R., 19 I. C. C. R. 507. Com. Rep. 257. 
 
 [428] 
 
Classification of Commodities [ § 498 
 
 should not be compared with another unless the two are 
 competitive; hatters' furs cannot therefore be tested by 
 dry-goods or boots and shoes," and counsel argued that 
 the main element in the determination of a classification is 
 "value of the service," or "what the traffic will bear." 
 Mr. Commissioner Prouty, however, refused to follow this 
 argument, saying: "Mr. Gill, Chairman of the Official 
 Classification Committee, speaking both as a witness and 
 as counsel for the defendants, asserts that the main ele- 
 ment in the determination of a classification is 'value of 
 service,' or 'what the traffic will bear.' There is un- 
 doubtedly much, we do not find it necessary to now inquire 
 how much, truth in this contention of Mr. Gill; but it 
 cannot be admitted that those are the only considerations 
 to be observed. It has been repeatedly claimed by carriers 
 and repeatedly held by the Commission that in the form- 
 ing of a classification bulk, value, liability to damage, and 
 similar elements affecting the desirability of the traffic 
 should be considered, and that analogous articles should 
 ordinarily be placed in the same class.*^ Manifestly in 
 determining what freight rates shall be borne by different 
 commodities an attempt should be made to obtain a fair 
 relation between those commodities, and a classification 
 which utterly ignores all considerations of this kind or 
 which utterly fails to give due weight to such considera- 
 tions is unjust and unreasonable." 
 
 § 498. Justification for making classification on railroads. 
 
 In the discussion of classification it is to be noticed that 
 the question is not what classification the judges would 
 make if they were acting as a committee to frame a sched- 
 ule; the question is rather whether the classification adop- 
 ted by the carrier can be justified. In the cases in which 
 
 " Bulk, value, risk, weight, and Ford Co. v. M. C. R. R., 19 I. C. 
 form in which tendered, must be C. 507. 
 
 considered in framing classification. See also Page v. D., L. & W. Ry., 
 
 6 I. C. C. 548. 
 
 [429] 
 
§ 499 ] Railroad Rate Regulation 
 
 classification is discussed, therefore, the court has to 
 determine not whether it could imagine a better classifica- 
 tion, but whether it should overthrow the adopted classifi- 
 cation as clearly unreasonable.'^ Classification is not an 
 exact science, nor may the rating accorded a particular 
 article be determined alone by the yardstick, the scales and 
 the dollar. The volume and desirability of the traffic, the 
 hazard of carriage, and the possibility or probability of 
 misrepresentation of the article are considerations of 
 prime importance in classification. At best it is but a 
 grouping, and when the approximation resulting from it is 
 not found to cause the exaction of an unreasonable or a 
 discriminatory charge it will not be disturbed.^' It has 
 been pointed out by the Commission that there are a great 
 variety of factors which influence classification; and it is 
 only necessary that there should be enough of them similar to 
 make the kinship suflicient. Weight per cubic foot, intrin- 
 sic value per unit, form in which tendered, risk to the 
 carrier, volume of the traffic, and regularity of the busi- 
 ness — these and similar matters affecting transportation 
 should all be considered.*'' Carriers, within proper limita- 
 tions, may take competition into consideration in classify- 
 ing freight. Competition that may be considered in 
 proper cases not only includes that between carriers, but 
 also that of the commodity produced in one section of the 
 country with the same commodity produced in another 
 section, and sometimes competition of one kind of traffic 
 with another kind.^^ 
 
 § 499. Reasonableness of classification requisite. 
 
 As a practical matter, therefore, the reasonableness of 
 a particular rate depends upon the reasonableness of 
 
 »2 Planters Compress Co. v. Cleve- " Yawman & E. Mfg. Co. v. A., 
 
 land, C, C. & St. L. Ry., 11 I. C. T. & S. F. Ry., 15 I. C. C. 260. 
 
 C. Rep. 382. »' Metropolitan Paving Brick Co. 
 
 " Forest City Freight Bureau v. v. Ann Arbor R. R., 17 I. C. C. 
 
 Ann Arbor R. R., 18 I. C. C. 205. 197. 
 
 [430] 
 
Classification of Commodities [ § 499 
 
 classification. Manifestly in determining respective classi- 
 fication an attempt should be made to obtain a fair rela- 
 tion between the services rendered, and a classification 
 which fails to do this is unreasonable. When the rate for a 
 particular service is in question the decision primarily 
 involves a comparison with other services as now classified. 
 Classification by its very nature involves the relation of 
 one service to all others, and such comparison is therefore 
 essential in testing any scheme of classification. Classifi- 
 cation furnishes the best index of reasonable rate for 
 particular service.*' If the schedule of rates as a whole is 
 producing too much or too little this as has been seen can 
 be determined with reasonable certainty upon well estab- 
 lished principles; but whether the particular rates are 
 proper ones it was conceded could not be determined 
 by mere computation with any such degree of accuracy. 
 If the returns on the whole schedule are too high there 
 should be a general reduction of rates or if too low there 
 should be a general advance; in neither case should a 
 particular class be selected for benefit of reduction or the 
 burden of advance. But granting that the whole returns 
 from the schedule are reasonable, then the question as to 
 the reasonableness of a particular rate is whether it is 
 properly placed in a reasonable classification. A classifi- 
 cation to be reasonable must not only put similar services 
 in the same classes, but must make proportionate differ- 
 ences between the rates charged against the' respective 
 classes. Thus the law as to particular rating reverts to its 
 original test of proportionate share of the proper burden. 
 But granting that the existing classification constitutes a 
 reasonable system, the question remains as to a particu- 
 lar service whether it is properly placed in that sys- 
 tem.*'' 
 
 * The character of an article is " In all classifications, public pol- 
 
 to be considered in determining its icy must be considered. In re Ad- 
 classification rating. Western Classi- vances on Coal to Lake Ports, 22 
 fication Case, 25 I. C. C. 442. I. C. C. R. 604. 
 
 [4311 
 
§§ 500, 501 ] Railroad Rate Regulation 
 
 § 500. A proper rate involves reasonableness of classi- 
 fication. 
 
 It is the recognized legal duty of the carrier so to classify 
 traffic and fix charges thereon that the burdens of trans- 
 portation shall be reasonably and justly distributed among 
 the articles they carry.^* That is the governing principle 
 of a freight classification, and it arises under the obliga- 
 tion imposed upon carriers by the statute not to charge 
 unreasonable or unjust rates or to impose any unjust 
 discrimination or undue prejudice in any respect whatso- 
 ever. It is evident therefore that even in cases where 
 the need of additional revenue is apparent the carrier 
 cannot arbitrarily select some one or more articles upon 
 which to apply higher rates regardless of the relation which 
 such article or articles bear to other commodities com- 
 monly offered for transportation.*' A general advance or 
 diminution of all freight rates involves a question only 
 of the reasonableness of the return from the whole tariff 
 schedule; and even an advance of rates for a whole class of 
 commodities involves principally only a question of the 
 reasonableness of the rate as a whole. But if the rate 
 charged upon a particular commodity is in question, the 
 decision involves a comparison with other commodities. 
 It must be determined whether the commodity is properly 
 classified in comparison with other commodities. 
 
 § 601. Classification not determined by a particular com- 
 modity. 
 
 While as a general principle it is clear that each shipper 
 in the case of any particular shipment is entitled to a rate 
 no greater than is reasonable for that shipment, it is equally 
 true that if a shipper complains of the classification of the 
 goods he offers for shipment the justice of his complaint 
 cannot be determined by considering merely the effect of 
 
 " Page V. Delaware, L. & W. R. '^ National Hay Ass'n v. Lake 
 
 R., 4 Int. Com. Rep. 525, 6 I. C. C. Shore & M. S. Ry., 9 I. C. C. Rep. 
 Rep. 148. 264. 
 
 [432] 
 
Classification of Commodities [ § 502 
 
 such classification on the rate charged for the particular 
 shipment in question. Classification by its very nature 
 involves the relation of one commodity to all others; and 
 comparison with other commodities is therefore essential 
 to any scheme of classification.'" An attempt to reform 
 a classification by a selection of isolated cases and single 
 classes, and changing them without a study of the entire 
 scheme, would be dangerous. The entire effect of a pro- 
 posed change can only be known by comprehending the 
 relation of each particular article or class to the combined 
 scheme. Therefore, a complainant asking a change in 
 classification, as in this case, with reference to a single 
 group of articles, should be required to show a case of 
 unjust discrimination or wrong done to procure a change.*^ 
 
 § 502. Jurisdiction of the Commission. 
 
 Until the Commission got power to fix rates, the Supreme 
 Court held that it had no power to order changes in clas- 
 sification.^- But now it is recognized that, if the Commis- 
 sion finds a classification of rates improper, it has power 
 to take such action as the situation requires.'^ It was 
 clear enough, after the changes in section 15 in 1906, that 
 where classification controls rates, the Commission is 
 empowered to pass upon all such practices affecting rates.'^ 
 Indeed, under the amendment to section 1 of 1910, giving 
 it control of freight classification, it has power to deter- 
 mine the reasonableness of differences that are made be- 
 
 ™ F. Schumacher Milling Co. v. of Trade Union v. Chicago, M. & 
 
 Chicago, R. I. & P. R. R., 6 I. C. C. St. P. R., 1 Int. Com. Rep. 608, 1 
 
 Rep. 61. I. C. C. Rep. 215. 
 
 " See also Page v. Delaware, L. '^ Interstate Commerce Commis- 
 
 & W. R. R., 6 I. C. C. Rep. 548, sion v. L. S. & M. S. Ry., 203 U. S. 
 
 citing Eau Claire Board of Trade v. 613, 50 L. ed. 1171, 26 Sup. Ct. 766. 
 
 Chicago, M. & St. P. R., 4 Int. Com. "^ Cincinnati, H. & D. R. R. v. In- 
 
 Rep. 65, 5 I. C. C. Rep. 264; James terstate Commerce Commission, 206 
 
 V. Canadian P. R., 4 Int. Com. Rep. TJ. S. 142, 51 L. ed. 995, 27 Sup. Ct. 
 
 274, 5 I. C. C. Rep. 612; Raymond v. 648. 
 
 Chicago, M. & St. P. R., 1 Int. Com. " National Hay Ass'n v. M. C. 
 
 Rep. 627, 1 I. C. C. Rep. 230; Boards R. R., 19 I. C. C. R. 34. 
 
 28 [ 433 ] 
 
§ 503 ] Railkoad Rate Regulation 
 
 tween the rates on various kinds of commodities.'^ With 
 its new powers, the Commission now has a large measure 
 of supervision in all its details over the classification of 
 freights.'^ There can be no question to-day, therefore, 
 that the Commission has power to compel carriers to 
 adopt classifications.'^ Classification will not be changed 
 by Commission in absence of evidence that rate is unlaw- 
 ful, unless it fairly appears that a particular article is not 
 rated with other articles, similar in value, weight, and other 
 essential transportation qualities.'* In fixing rates on 
 competitive articles, the relation should be determined 
 on the basis of difference in cost of service; and many of 
 the other considerations entering into estabUshment of 
 rates upon independent or isolated articles should be in 
 large part eliminated." A carrier was recently held jus- 
 tified in canceling a low commodity rate, and establishing 
 a higher class rate at a non-competitive point, where no 
 good reason existed for extending the commodity rate 
 effective at competitive points.^ Where a complainant 
 contends that the ratings in one classification system are 
 unjust and unreasonable, a comparison of the ratings in a 
 different classification is by no means a guide to the relative 
 transportation charges, unless the class rates under the 
 several classifications are also considered.^ 
 
 § 603. Relief from improper classifications. 
 
 Changes in classification affect revenues as much as 
 changes in rates.' In determining the proper classifica- 
 tion of articles the following elements are considered by 
 
 »6 In re Advances on Coal to Lake » W. E. Caldwell Co. v. C. I. & 
 
 PortB, 22 I. C. C. R. 604. L. Ry., 20 I. C. C. R. 412. 
 
 " Western Classification Case, 25 ' Carstens Packing Co. v. O. & 
 
 I. C. C. 442. W. R. R., 22 I. C. C. R. 77. 
 
 »' Carnegie Board of Trade v. P. " Milburn Wagon Co. v. L. S. & 
 
 Co., 28 I. C. C. 123. M. S. Ry., 22 I. C. C. R. 93. 
 
 '* In re Advances in Class and ' Ass'n of Union Made Garments 
 
 Commodity Rates, 25 I. C. C. M'frs v. Chicago & N. W. R. R., 
 
 401. 16 I. C. C. 405. 
 
 [434] 
 
Classification of Commodities [ § 504 
 
 the Commission, according to what is now the leading 
 case on the subject: Bulk, character of article, cost of 
 service, desirabiUty of the traffic, distinction in transporta- 
 tion conditions, ease of handling, expense of carriage, 
 hazardousness, liability to waste or injury, loading, manner 
 of packing, possibiUty or probabihty of false biUing, risk, 
 space occupied, tonnage, use, utUization of equipment, 
 value of article, value of service, volume of traffic and 
 weight/ Classification, from its very nature and use, 
 cannot be so minute as to do mathematically exact justice 
 to every variety of commerce that may move.^ But, 
 generally speaking, shippers are entitled to rates both 
 relatively and inherently reasonable.'^ The work of clas- 
 sification should be confined to classification as such, 
 entirely separate from the question of rates or revenues 
 of carriers.^ The character of the commodity is to be con- 
 sidered in determining the proper classification of articles.* 
 A total disregard of weight in transportation of locomotives 
 under mileage basis is unfair to carriers and discriminatory 
 as between shippers.' A carrier may not properly look be- 
 yond the transportation to the ownership of the shipment 
 as a basis for determining the appUcability of its rates, i" 
 And it is still more clear that the personahty of consignee 
 can afford no basis for a difference in rates. ^^ 
 
 § 504. Low-grade commodities. 
 
 Various ruhngs on what are low-grade commodities, as 
 these matters are generally considered, are collected here 
 for the purpose of emphasis. Unfinished stone or granite 
 
 ■• Western Classification Case, 25 ^ Taylor Dry Goods Co. v. M. P. 
 
 I. C. C. 442. Ry., 28 I. C. C. 205. 
 
 ' Klauer Mfg. Co. v. A., T. & S. F. ' In re Advances in Rates on Lo- 
 
 Ry., 28 I. C. C. 508. comotives and Tenders, 21 I. C. C. 
 
 « Coke Producers Ass'n v. B. & O. R. 103. 
 
 Ry., 27 I. C. C. 125. ^'' Export Shipping Co. v. Wabash 
 
 ' In re Advances on Flaxseed, 25 R. R., 14 I. C. C. 437. 
 
 I. C. C. 337. " Sligo Iron Store Co. v. A., T. & 
 
 ,S. F. Ry., 17 I. C. C. 139. 
 
 [435] 
 
§ 505 ] Railroad Rate Regulation 
 
 is a low-grade heavy commodity, and an advance in its 
 rates was therefore held excessive.'^ Fertilizer is a low- 
 grade commodity, requiring no special service, and should 
 receive a low rate.^' Fuel wood is a low-grade commodity, 
 and freight is a large item in its final cost." Brick is a 
 very desirable traffic, possessing elements which seem to call 
 for the making of low rates. ^' Sand and gravel rates should 
 be very low, as compared with other commodities." Salt 
 is to be compared with cement, clay, brimstone, pig lead, 
 and other low-grade commodities.^^ Rates on cement 
 should bear a relation to the scale of rates on lime and 
 brick. ^* Scrap-iron rates should not necessarily be fixed 
 with a definite relation to the rates on pig iron or new rails. ^^ 
 Cottonseed was held entitled to same rate as cottonseed 
 oil; whether it is entitled to same rate as cottonseed meal 
 and cake, was not decided.-" Ordinarily the rate on malt 
 is the same as that upon grain products, and this is some- 
 times the same as the grain rate and sometimes slightly 
 higher.^^ The Commission realizes that as American 
 practice has become, the commodity rate plays a large 
 part in the development of our commerce, and that this is 
 a condition with which it must reckon. ^^ 
 
 § 505, High-grade manufactures. 
 
 At the other extreme are high-grade manufactures, which 
 may properly be charged proportionately more, as the 
 following examples will show. For instance, rates on such 
 difficult freights to handle safely as furniture are nec- 
 
 12 Sims V. M. & W. R. R. R., 26 '« Iowa-Minnesota Cement Rates, 
 
 I. C. C. 275. 28 I. C. C. 477. 
 
 1' Meridan Fertilizer Co. v. V. S. '" Scrap-iron Rates Between Du- 
 
 & P. Ry., 26 I. C. C. 224. luth and Chicago, 28 I. C. C. 
 
 "Rates on Fuel Wood, Sawdust, 467. 
 
 and Shavings, 26 I. C. C. 254. «" East St. Louis Cotton Oil Co. 
 
 15 Metropolitan Paving Brick Co. v. St. L. & S. F. R. R., 24 I. C. C. 
 
 V. A. A. R. R., 17 I. C. C. 197. 688. 
 
 « Rates on Sand to Houston, Tex., 21 Grain Rates in C. F. A. Territory, 
 
 26 I. C. C. 677. 28 I. C. C. 549. 
 
 " Gottron Bros. Co. v. G. & W. ^^ Western Classification Case, 25 
 
 R. R., 28 I. C. C. 38. I. C. C. 442. 
 
 [436] 
 
Classification of Commodities [ § 506 
 
 essarily high.^' So is the classification of such deUcate 
 machinery as motor cycles. 2'' A contention that a rate 
 on sash, doors, and blinds should be higher than on lumber 
 was held not to justify an advance, as it presupposes the 
 reasonableness of lumber rate, which is not^hown.^^ While 
 it was admitted that rates on wool may properly be higher 
 than upon the live animal, it was said that it was difficult 
 to justify present differences.^^ Paper and labels, being 
 sufficiently like paper wrappers or printed wrapping paper, 
 should be rated second class under provisions of the West- 
 ern Classification.^'' The rate on window glass from Pitts- 
 burg to Atlanta was held not unreasonable as compared 
 with the rate on glazed sash.^' As the cost of transporta- 
 tion in case of live stock and products of live stock is ap- 
 proximately the same, there should not be differences in 
 classification materially affecting the rate.^' The impres- 
 sion of the Commission is that rates on box shooks, laths, 
 shingles, ties, and certain other rough products of lumber 
 ordinarily do not exceed those on the lumber from which 
 they are manufactured.^" .\nd the Commission will hesi- 
 tate to revise by order the relationship of rates on kindred 
 commodities.'^ 
 
 Topic C. Comparison of Commodities 
 
 § 506. Elements in comparison of commodities. 
 
 As will have been noted in dealing with the cases through- 
 out this chapter, classification is predicated upon bringing 
 into the same rating articles which are sufficiently similar 
 for transportation purposes to justify their carriage at 
 
 -' Furniture Rates in the North- ^* Masee & Felton Lumber Co. v. 
 
 west, 26 I. C. C. 655. S. Ry., 23 I. C. C. R. 110. 
 
 ^^GrifBng v. C. & N. W. Ry., ^d Qarstens Packing Co. v. O. & 
 
 25 1. C. C. 134. W. R. R., 22 I. C. C. R. 77. 
 
 ^', Rates on Sash, Doors, and '" Sawyer & Austin Lumber Co. v. 
 
 Blinds into Texas, 26 I. C. C. 116. St. L., 1. M. & S. Ry., 19 I. C. C. R. 
 
 ■^ In re Transportation of Wool, 141. 
 
 Hides, and Pelts, 23 I. C. C. R. 151. " Board of T. of Chicago v. C. & 
 
 " Pacific Creamery Co. v. S. P., A. Ry., 27 I. C. C. 5.30. 
 
 26 I. C. C. 578. 
 
 [437] 
 
§ 507 ] Railroad Rate Regulation 
 
 the same price. Freight classification is based upon the 
 relations which commodities bear to each other in such 
 respects as character, use, bulk, weight, value, tonnage 
 or volume, risk, cost of carriage, ease of handling and con- 
 trolling conditions caused by competition.'^ It will be 
 noticed that all these considerations, except the last, are 
 concerned with the nature of the commodity itself; either 
 its material qualities or its use. They affect either the cost 
 or risk of carriage to the carrier, or the value of carriage to 
 the shipper. It is plain, therefore, classification is a method 
 of rate making based upon all the principles governing the 
 estabhshment of particular rates '^ which are discussed in 
 subsequent chapters. 
 
 § 607. Like classification for similar goods. 
 
 The comparison commonly instituted is that between 
 similar things, for the purpose of placing them in the same 
 class. Thus the following articles have upon comparison 
 been ordered by the Commission in the same class: en- 
 velopes for correspondence and merchandise envelopes,'* 
 celery with egg plant,'^ eggs with berries,'^ soap with 
 groceries,'' box shooks with laths,'* bitters with ink '^ and 
 cowpeas with grain,*" to select a few examples from the 
 great mass of rulings on these points. Counters and shelv- 
 ing,*' bagging and ties,*^ spokes and lumber,*' roofing paper 
 
 '2 Proctor & Gamble Co. v. Cin- '* Michigan Box Co. v. Flint & 
 
 cinnati, H. & D. Ry., 9 I. C. C. Rep. P. M. R. R., 6 I. C. C. Rep. 
 
 440. 335. 
 
 " See Grain Shippers' Ass'n v. " Myers v. Pennsylvania Co., 2 
 
 IlUnois Central R. R., 8 I. C. C. Rep. Int. Com. Rep. 403, 2 I. C. C. Rep. 
 
 158. 573. 
 
 '* Wolf Brothers v. Allegheny ■"> Swaffield v. Atlantic Coast Line, 
 
 Valley R. R., 7 I. C. C. Rep. 40. 10 I. C. C. Rep. 281. 
 
 '^Tecumseh Celery Co. v. Cin- "Ireland & Rollings v. St. L. & 
 
 cinnati, J. & M. Ry., 4 Int. Com. Rep. S. F. R. R., 22 I. C. C. R. 590. 
 
 318, 5 I. C. C. Rep. 663. " Corporation Commission ' of 
 
 86 Brownell v. Columbus & C. M. ' Oklahoma v. A. O. & W. R. R., 27 
 
 R. R., 5 I. C. C. (0. S.) 638. I. C. C. 210. 
 
 " Pyle V. East Tenn., Va. & Ga. « Eastern Wheel M'frs Ass'n v. 
 
 Rv., 1 I. C. C. 465. A. & V. Ry., 27 I. C. C. 370. 
 
 [438] 
 
Classification of Commodities [ §§ 508, 509 
 
 and roofing felt,*'' percolators and coflfee pots,** addressing 
 machines and multigraphs,** speedometers and cash regis- 
 ters,*^ motor cycles and bicycles.** 
 
 § 508. Different classification for dissimilar goods. 
 
 Unlike things may be compared to determine the correct- 
 ness of the classification of one of them. With so few classes 
 into which aU commodities must be placed, it is obvious 
 that not all articles in a single class will be similar in their 
 nature; and unlike things may after comparison be held to 
 belong in the same class. More comimonly, because of the 
 unlikeness, they will be held properly to be placed in differ- 
 ent classes. Thus, upon a comparison, it was held by the 
 Commission that there was such dissimilarity as to justify 
 a different classification of lumber and oranges,*' of soap 
 and hay,^° of cowpeas and fertilizers," of low-grade steam 
 coal and more costly domestic grades,*^ of salt and grain,*^ 
 of patent medicines and lager beer,** of flour in barrels and 
 breakfast foods in packages," of agricultural implements and 
 incubators,*^ of wools and fruits,*^ of copper and lumber.** 
 
 § 609. Certain commodities compared. 
 
 All this will be made plainer by the examination of cer- 
 tain cases where various commodities have been compared. 
 
 ** Barrett Mfg. Co. v. C, M. & ^^ Com. v. Louisville & N. R. R. 
 
 St. P. Ry., 20 I. C. C. 79. (Ky.), 68 S. W. 1103. 
 
 ••* Landers, Frary & Clark v. A., '' Anthony Salt Co. v. Missouri 
 
 T. & S. F. Ry., 17 I. C. C. 511. Pacific Ry., 4 Int. Com. Rep. 1. 
 
 « Pacific Stationery & Printing " Myers v. Pennsylvania R. R., 
 
 Co. V. O. W. R. R. & N., 24 I. C. C. 2 Int. Com. Rep. 403, 2 I. C. C. Rep. 
 
 299. 573. 
 
 " Stewart & Clark Mfg. Co. v. " Schumacher Milling Co. v. Chi- 
 
 A., T. & S. F. Ry., 26 I. C. C. 361. cago, R. I. & P., 6 I. C. C. Rep. 
 
 ■■* Motorcycle M'frs Ass'n v. B. & 61. 
 
 O. R. R., 26 I. C. C. 127. ^ Lee Co. v. I. C. R. R. Co., 28 
 
 " Tift v. So. Ry., 10 I. C. C. 548. I. C. C. 515. 
 
 ™ Proctor & Gamble Co. v. Cin- " In re Transportation of Wool, 
 
 cinnati H. & D. Ry., 9 I. C. C. Rep. Hides, and Pelts, 23 I. C. C. R. 
 
 440. 151. 
 
 " SwafBeld v. Atlantic Coast Line, =' Oregon & Washington Lumber 
 
 10 I. C. C. Rep. 281. v. U. P. R. R. Co., 14 I. C. C. 1. 
 
 [439] 
 
§ 510 ] Railroad Rate Regulation 
 
 Rates on milk should be lower than on cream.** Cake 
 rate may be higher than bread rate but ought not to ex- 
 ceed regular merchandise rate.^" As to steel and iron rate, 
 the rates should be lower on nonfabricated than on fabri- 
 cated.^' When wool and cotton compared, it will be seen 
 that the greater value of wool justifies much higher rate."' 
 A higher rate on marble is not unreasonable as compared 
 with rate on rough stone.*' And a higher rate on high- 
 pressure boilers than on low-pressure boilers was not con- 
 demned.^* There may be different rates on winter and 
 summer vegetables.** And it is improper to have the 
 same rating on refined sugar, which is the most valuable 
 product obtained from the cane, as on blackstrap, which 
 is the residue of least value from the manufacture of 
 sugar.** Cotton waste is entitled to transportation at less 
 rates than cotton goods, being less in value and involving 
 less risk and expense in transportation.*^ And among 
 high-grade articles such valuable metals as copper are 
 clearly included.** Rough lumber may properly be given 
 a lower rate than dressed lumber.*' And refrigerated 
 fruit may properly be charged more than fruit transported 
 under ordinary conditions.^" 
 
 § 510. Provisions. 
 
 Eggs were held properly classed with fruit and other 
 perishable articles of food in the case of Brownell v. 
 
 " Bridgeman-Russel Co. v. G. N. s* cjty of Crawford v. C. & N. W. 
 
 Exp. Co., 22 I. C. C. R. 573. Ry., 25 I. C. C. 259. 
 
 «° Oak Grove Creamery v. Adams ^ Molasses Rates from Mobile, 
 
 Express Co., 10 I. C. C. R. 454. 28 I. C. C. 666. 
 
 " Vulcan Iron Works Co. v. A., " Riverside Mills v. Southern Rail- 
 
 T. & S. F. Ry., 27 I. C. C. 468. way, 12 I. C. C. 388. 
 
 «' In re Transportation of Wool, '* Michigan Copper & Brass Co. 
 
 ffides, and Pelts, 23 I. C. C. R. 151. v. D. S. S. & A. Ry., 25 I. C. C. 357^ 
 
 " Cohen & Co. V. Mallory S. S. Co., «'Farrar Lumber Co. v. N. C. & 
 
 23 I. C. C. R. 374. St. L. Ry., 25 I. C. C. 22. 
 
 ** Smith-Booth-Ushier Co. v. L. '» Ozark Fruit Growers Ass'n v. St. 
 
 S. & M. S. Ry., 23 I. C. C. R. Louis & S. F. R. R., 16 I. C. C. 
 
 242. 106. 
 
 [440] 
 
Classification of Commodities [ § 511 
 
 Columbus, Cincinnati & Midland Railway." What Mr. 
 Commissioner McDill said as to the egg has its significance 
 in general: "The egg is a deUcate and perishable com- 
 modity. Though methods adopted for its preservation 
 retard the decomposition to which it is subject, they do 
 not prevent the article from taking on that musty and 
 strong flavor so often noticed in 'stored eggs.' While not 
 as perishable as the small fruits mentioned, yet, consider- 
 ing the delay which is necessary in the accumulation of 
 sufficient lots for sale or sending to market, its inherent 
 liability to early decay, and the fact that 'fresh eggs' are 
 commonly held to be an indispensable food article in 
 every household, it must be deemed sufficiently perish- 
 able to be classed with articles of that character. In the 
 official classification eggs, any quantity, are classed as low 
 as berries in carloads, fruit in carloads, not otherwise 
 specified, and butter and cheese in any quantity; and they 
 are given a lower class than poultry, game, peaches, or 
 oysters, not in the shell. These commodities, though 
 diverse in character, are all perishable food products and 
 particularly subject to deterioration after short lapses 
 of time and under climatic influences. Considered as a 
 perishable article eggs cannot be deemed to have an 
 unfavorable classification; they are classed lower than 
 some, and no higher than any, of the articles above 
 mentioned." '''^ 
 
 § 511. Groceries. 
 
 A comparison of soap with other articles commonly sold 
 by grocers was thus made by the Commission: ^' "The fifth 
 
 " 4 Int. Com. Rep. 285, 5 I. C. C. " Proctor & Gamble Co. v. Cin- 
 
 Rep. 638. cinnati H. & D. Ry., 9 I. C. C. Rep. 
 
 " Import rates on blackstrap mo- 440, per Knapp, chairman, 
 
 lasses from New Orleans compared See Thurber v. N. Y. C. & H. R. R. 
 
 with salt, petroleum and its prod- R., 2 Int. Com. Rep. 742, 3 I. C. C. 
 
 ucts, clay, pig lead, magnesite. Rep. 473. 
 
 chrome ore, hemp or jute waste. Evaporated milk, canned, com- 
 
 brewer's rice, and sisal. Molasses pared with other canned goods and 
 
 Rates from Mobile, 28 I. C. C. 666. found, in view of the circumstances, 
 
 [441] 
 
§ 512 ] Railroad Rate Regulation 
 
 class of the OfRcial Classification contains over 2,000 ar- 
 ticles, and includes soap and many other grocery articles, 
 such as canned fruits and vegetables, candles, cabbage, 
 pickles, potatoes, pumpkins, parsnips, squash and turnips, 
 chicory, citron, lemon and orange peel, desiccated cocoanut, 
 coffee, fruit butters, jelly, sauce, soap and washing pow- 
 ders, macaroni, vermicelli, flour paste, mustard, olives, 
 pickle or brine, soups and broths, sugar, syrup and tapioca. 
 Numerous other articles sold by grocers or in general 
 stores are also in the fifth or higher classes. Without 
 some showing of discrimination against soap in its classi- 
 fication as compared with other articles of the same general 
 character, or any special distinction appearing in favor of 
 soap in either volume, value or controlling commercial 
 considerations, we are unable to find simply because it is 
 a desirable article of traffic for the railroads in the matter 
 of earnings and ease of handling that it is unjust to retain 
 it in Class 5 with other articles of like character, some of 
 which are equally as attractive as soap from the standpoint 
 of car revenue." '''^ 
 
 § 512. Vegetables. 
 
 Celery was compared with other vegetables for table 
 use, and it was concluded that it should be classified 
 with such vegetables rather than with perishable fruits.^^ 
 "It is a matter of general knowledge that during recent 
 years, and especially since the change in classification 
 mentioned in the complaint, celery has come into much 
 more common use. Its production has greatly increased 
 
 to be entitled to the same rates. reasonable. Tone Bros. v. I. C. R. R., 
 
 Whiteland Canning Co. v. P. C. C. & 26 I. C. C. 279. 
 
 St. L. Ry., 22 I. C. C. R. 261. Canned peas should take same rate 
 
 " Sugar and coffee are not like as canned goods of general mixture, 
 
 kinds of traffic within the meaning Empson Packing Co. v. C. N. Ry., 
 
 of section 2. Traffic Ass'n of St. 22 I. C. C. R. 268. 
 Louis Coffee Importers v. I. C. R. R. " Veazie, Commissioner, in Te- 
 
 Co., 28 I. C. C. 484. cumseh Celery Co. v. Cincinnati, 
 
 Classification of pepper in Western J. & M. Ry., 4 Int. Com. Rep. 318, 5 
 
 Classification territory not found un- I. C. C. Rep. 663. 
 
 [442] 
 
Classification of Commodities [ § 513 
 
 and its market value has declined. It certainly is no more 
 a table luxury than some of the vegetables which have a 
 lower class in the Western Classification. As varied or 
 qualified by the foregoing, the facts stated in the petition 
 are found to be true, and we hold that the complainant 
 is entitled to the relief claimed. For that portion of its 
 line over which the Western Classification is in force the 
 Wabash road should class celery with cauliflower, as- 
 paragus, lettuce, green peas, string beans, oyster plant, 
 egg plant, and other vegetables enumerated in Class C of 
 that classification, rather than with berries, peaches, grapes, 
 and other fruits specified in Class III. thereof, and the de- 
 fendants should transport celery from Tecumseh to Kansas 
 City at no higher rate per carload than they charge for 
 carrying a carload quantity of any of said vegetables 
 named in Class C aforesaid." ^* 
 
 § 513. Lumber. 
 
 Forest products not entirely manufactured have been 
 compared and placed in the same class. Thus lumber 
 and railroad ties should have the same classifications." 
 Box shooks should be classified with lumber, laths and 
 shingles and hub blocks should be classed with lumber 
 instead of with wagon materials.''* The Commission has 
 recently held it unjust, unreasonable, and discriminatory 
 to force club-turned spokes to bear higher rates than are 
 imposed for like service upon analogous wood articles 
 
 ™ Cantaloupes compared with lumber rate being competitive, the 
 
 peaches, vegetables, and water-mel- rate on wood pulp prescribed on the 
 
 ons. Bahrenburg, Bro. & Co. v. A. lumber-rate basis. Wisconsin Pulp 
 
 C. L. R. R., 24 I. C. C. 560. Wood Co. v. G. N. Ry., 22 1. C. C. R. 
 
 "Reynolds v. Western N. Y. & 594. 
 
 P. Ry., 1 Int. Com. Rep. 688, 1 I. C. Hardwood lumber was not found 
 
 C. Rep. 393. by the Commission to be entitled 
 
 " Michigan Box Co. v. Flint & to a lower rate than pine lumber. 
 
 P. M. R. R., 6 I. C. C. Rep. 335. Adjustment under which both pine 
 
 Such a low-grade traffic as pulp and hardwood take same rate, not 
 
 wood ordinarily takes a lower rate disturbed. In re Advances on Lum- 
 
 than lumber; but in this case, the ber, 24 I. C. C. 686. 
 
 [443] 
 
§ 514 ] Railroad Rate Regulation 
 
 which move at lumber rates.'^^ And when formerly shin- 
 gles ^ were compared with other lumber products, it was 
 held that they should be in the same class. "Generally 
 speaking the demand for and use of shingles as building 
 material are quite as important and general as for any other 
 lumber product, and the necessity is equally as great that 
 such product shall be charged only a reasonable and equi- 
 table rate for its transportation. Shingles being put up in 
 bundles for shipment, the work of handling is facilitated 
 so that no more, and perhaps even less, labor is required 
 than for the handling of many other lumber products 
 classed with and charged the same transportation rate 
 as lumber, such as laths, shocks, sawdust, box and mould- 
 ing material and other stuff of the regular dimensions. 
 The weight of shingles that can be loaded in a car will 
 also compare favorably with the above named and many 
 other lumber products taking the lumber rate. No testi- 
 mony has been submitted as to the relative values of 
 these various products, but it may be assumed safely, 
 that shingles are worth as much per carload as the average 
 of articles taking the lumber rate. No claim has been 
 made that there is any greater risk in shipping shingles 
 than any other article included in the lumber classifica- 
 tion." 
 
 § 514. Bottled goods. 
 
 A comparison of articles shipped in glass was made, 
 upon complaint of the proprietor of a patent medicine 
 
 "Eastern Wheel M'frs Ass'n v. Sligo Iron Store Co. v. St. L. & S. 
 
 A. & V. Ry., 27 I. C. C. 370. F. R. R., 28 I. C. C. 616. 
 
 '" Yeomans, Com., in Duluth Shin- It is the Commission's impression 
 
 gle Co. V. Duluth, South Shore & that rates on box shooks, laths, 
 
 Atlantic Ry., 10 I. C. C. Rep. 489. shingles, ties and certain other 
 
 The Commission has held it dis- rough products of lumber ordinarily 
 criminatory to force wagon wood do not exceed rate on the lumber from 
 and plow beams, in the rough, to which they are manufactured. Saw- 
 bear higher rates than are imposed yer & Austin Lumber Co. v. St. L., 
 for like service upon many analogous I. M. & S. Ry., 19 I. C. C. R. 
 articles which move at lumber rates. 141. 
 
 [444] 
 
Classification of Commodities [ § 515 
 
 who desired a lower classification. The Commission said:" 
 "By this classification it takes the rates of the other kinds 
 of property in the class. These consist largely of articles 
 in glass packed like the bitters in boxes for transportation. 
 .Among them are: acids, apple or fruit butter, bromine, 
 cider, coffee condensed, drugs and medicines, honey, ink, 
 liquors, or liquids, milk food, oils, paints, pickles, prunes, 
 sjTup, and a variety of others. There is no apparent in- 
 justice in classifying the bitters with such articles. And a 
 rate that is reasonable for the class is reasonable for an 
 article properly included in the class. The petitioners suffer 
 no injustice, therefore, peculiar to themselves, from the 
 classification of their goods. If the classification of their 
 bitters should be changed the same reasons would compel 
 a like change of a large number of similar articles." *^ 
 
 § 515. Dry goods. 
 
 Window shades and various articles of dry goods were 
 thus compared.**^ "In the elements of bulk, weight and 
 value, several of the dry-goods articles described in the 
 table set out in the sixth finding as taking third class 
 rates have greater similarity to a 23-dozen case of finished 
 shades than exist between such a case of shades and the 
 first-class articles mentioned in that table. There is, 
 however, little analogy in uses or character between 
 window shades and the dry-goods articles referred to. 
 With the exception of lace curtains, these articles are dry 
 goods in the piece; and lace curtains are in the category 
 of ornamental house furnishings, while the window shade 
 is regarded as a household necessity. But the fact that 
 both shades and lace curtains are in the first class, the 
 latter many times more valuable, is an element to be 
 
 *' Myers v. Pennsylvania Co., ing on articles in bulk. Western 
 
 2 Int. Com. Rep. 403, 2 I. C. C. Rep. Classification Case, 25 I. C. C. 442. 
 573. *' Veazey, Cora., in Page v. Dela- 
 
 ^^ The rating on articles in glass ware, L. & W. R. R., 4 Int. Com. 
 
 may properly be higher than the rat- Rep. 525, 6 I. C. C. Rep. 148. 
 
 [4451 
 
§ 516 ] Railroad Rate Regulation 
 
 noted, though against this it must be considered that many 
 incongruities are unavoidable when the carriers undertake, 
 as they do by the Official Classification, to divide the great 
 mass of freight articles into practically six classes; and 
 the desirability of simplicity in the classification is a fea- 
 ture which should not be overlooked. The items of sim- 
 ilar bulk and weight, less value and risk of carriage, and 
 important volume of traffic, are all in the direction of 
 giving to window shades a classification as low as that 
 which is provided for window hoUands."^^ 
 
 § 516. Difference between commodities. 
 
 When articles are plainly different in character, they 
 are rightly put in different classes. In a case where it was 
 attempted to compare salt and grain *^ the Commission 
 said that there was no sufficient similarity between salt 
 and grain to make a comparison in any degree instructive. 
 In a recent proceeding the complainant attacked the classi- 
 fication first class on wire brooms and brushes as unreason- 
 able, compared with toilet brushes taking the same rates. 
 Wire brushes are not intended for toilet use, and are a 
 rough, heavy, low-priced product, made for the most 
 part of unfinished hardwood blocks, brush wire and com- 
 mon wire nails and used for scrubbing and cleaning rough 
 surfaces. These brushes and brooms are immune from 
 damage in transit, and packed for shipment, weigh 38 
 lbs. per cubic foot; average value per cubic foot, $6.15, 
 while toilet brushes have an average value of about $27.00 
 per cubic foot. Upon this showing the Commission held 
 that wire brooms and brushes should take a lower rate 
 than the finer class of brushes and brooms, and should 
 be rated as third class.*^ 
 
 ** Mohair should not pay a higher dry goods. Taylor Dry Goods Co. 
 rate than wool. National Mohair v. M. P. Ry., 28 I. C. C. 205. 
 Growers' Ass'n v. A., T. & S. F. Ry., '» Anthony Salt Co. v. Missouri 
 
 23 I. C. C. R. 180. Pac. Ry., 4 Int. Com. Rep. 1, 43. 
 
 Cotton piece goods compared with *" Forest City Freight Bureau v. 
 
 Ann Arbor R. R., 13 I. C. C. 109. 
 
 [4461 
 
Classification or Commodities [ § 517 
 
 § 517. Raw material and manufactured products. 
 
 It was early held that a court would not uphold an 
 order of the Commission to the effect that the same rate 
 should be charged for the cheaper grade of window shades 
 as for the most expensive." But it has recently been de- 
 cided that it is not undue and unreasonable discrimination 
 against the Chicago packing house industries, on the part 
 of the railroads, in making lower rate for manufactured 
 packing house products than for live stock, on account of 
 competition.^ The general rule is that manufactured prod- 
 ucts bear higher rates than raw material; but there are 
 some exceptions to this rule. As a traffic matter, the 
 Commission realizes that the value of raw material and 
 manufactured products substantially differs, and fre- 
 quently the risk incident to transportation of latter 
 is greater.^^ Maintaining a rate on cottonseed in excess of 
 the rate concurrently charged on cottonseed oil, subjects 
 the former commodity, and the shippers thereof, to undue 
 prejudice and disadvantage.'" Staves are a manufactured 
 product, and should not take a lower rating than lumber." 
 The rate on malt may properly be higher than the rate 
 on the barley from which it is manufactured.'^ The rate 
 on plain wire entering into manufacture of spring beds 
 should be lower than the rate on spring beds.'' Sulphuric 
 acid is strictly a raw material in the manufacture of 
 fertilizer, and distinctly lower rates should be applied to its 
 transportation than upon the manufactured fertiUzer.'^ 
 While the manufactured product commonly takes a higher 
 rate than the raw material it has been held that the 
 
 " Interstate Commerce Comm. v. '' Holland Blow Stave Co. v. A. 
 
 D., L. & W. Ry., 64 Fed. 723. C. L. R. R., 27 I. C. C. 488. 
 
 " Interstate Commerce Comm. v. '^ Texas Brewing Co. v. A., T. & 
 
 Chicago Gt. W. Ry., 209 U. S. 108, S. F. Ry., 21 I. C. C. R. 171. 
 
 52 L. ed. 705, 28 Sup. Ct. 493. '» Leggett & Piatt Spring Bed & 
 
 ''East St. Louis Cotton Oil Co. v. Mfg. Co. v. M. P. Ry., 22 I. C. C. 
 
 St. L. & S. F. R. R., 20 I. C. C. R. 37. R. 513. 
 
 ™ Louisville Cotton Seed Products " International Agricultural Cor- 
 
 Co. V. L. & N. R. R., 26 I. C. C. poration v. L. & N. R. R., 22 I. C. 
 
 607. C. R. 488. 
 
 [447] 
 
§ 518 ] Railroad Rate Regulation 
 
 maintenance of a parity of rates on wheat and flour 
 tends to equalize conditions at all points at which flour- 
 milling industries exist, and seems to be a sound rate 
 policy.'^ There is no justification, however, for higher 
 rates on wheat than on flour; and an arrangement similar 
 to that proposed at Chicago should be made effective 
 on wheat milled at Lockport.^* Likewise it has been held 
 that the same rate on petroleum and its products, is not 
 improper.*' The general principle is, however, usually 
 respected to the effect that the carrier may make reason- 
 able differentials between rates on raw material and ar- 
 ticles manufactured therefrom.'* Nothing is better es- 
 tablished than that a manufactured article usually should 
 take higher rating than the raw materials from which 
 they are made.** 
 
 Topic D. Differences between Commodities Carried 
 
 § 518. Classification based on the package. 
 
 It seems to be true as a general principle that a shipper 
 should be left free to ship in such package as suits his 
 convenience, and therefore that a classification based on 
 kind or size of package is improper. So where the carriers 
 attempted to classify eggs carried in "returnable cases," ^ 
 that is, cases substantially built and comparatively ex- 
 pensive, lower than eggs carried in cheaper cases, though 
 as a matter of fact the cheaper cases served their purpose 
 equally well and caused no additional trouble or expense 
 to the carrier, the Commission held the proposed classifi- 
 cation invalid. A shipper, the Commission said, should 
 not be subjected to unnecessary restrictions as to the 
 kind of case he should use. And the Commission is equally 
 
 »«Bulte Milling Co. v. C. & A. '« Eastern Wheel M'frs Ass'n v. 
 
 R. R., 15 I. C. C. 351. A. & V. Ry., 27 I. C. C. 370. 
 
 96 National Refining Co. v. C, C, '» Bulte Milling Co. v. C. & A. 
 
 C. & St. L. Ry., 20 I. C. C. R. R. R. R., 15 I. C. C. 351. 
 
 649. 'Rhode Island E. & B. Co. v. 
 
 " Electric Malting Co. v. A., T. & Lake Shore & M. S. Ry., 4 Int. Com. 
 
 S. F. Ry., 23 I. C. C. R. 378. Rep. 512, 6 I. C. C. Rep. 176. 
 [448] 
 
Classification of Commodities [ § 519 
 
 clear that a railroad should not make excessive charges 
 against bulky and lengthy articles.- But of course a 
 carrier can make higher rates for such freights than for 
 goods of the average character in these respects.^ 
 
 § 519. Business expensive to handle. 
 
 Where the service is usually expensive to handle a 
 relatively larger rate is plainly justifiable. So when perish- 
 able meats are forwarded a special equipment is required 
 resulting in a higher rate. Where, however, no special 
 equipment is necessary, as for lumber which may go by 
 any kind of car without special equipment, the rate must 
 be much lower. And although not perishable a much 
 higher rate could be charged upon valuable ores than upon 
 coal by reason of the additional risk of loss in transit. 
 So if an article is bulky, out of usual proportion to its 
 weight, as straw hats, a much higher rate per hundred 
 pounds can be charged than for pig lead.^ So if goods 
 are packed in convenient packages for handling, as hard- 
 ware in casks, a lower rate can be made than for un- 
 crated furniture.^ And, to reserve the most important 
 illustration of this principle to the last, a much lower 
 rate can be made for goods shipped in carload lots than 
 for package freight by reason of the obvious economy of 
 
 2 A barrel is a package, and brim- ing classifications and rates. Ford 
 
 stone in barrels would ordinarily be Co. v. M. C. R. R.; 19 I. C. C. 507. 
 termed package shipments, as dis- See also in relation to bulk as an 
 
 tinguished from loose brimstone in element in classification. Michigan 
 
 bulk, and be rated as such. Mc- Seating Co. v. 0. I. W. Ry., 29 I. C. 
 
 Laughlin G. K. Co. v. Maine S. S. C. 123. 
 Co., 22 I. C. C. 108. * Charges may properly be made 
 
 ' Brunswick B. C. Co. v. Atchison, somewhat higher for transportation 
 
 T. & S. F. R. R., 23 I. C. C. 395. of show cases in crates than in boxes. 
 
 Classification is sometimes made Wadell Show Case & Cabinet Co. v. 
 
 with respect to the manner of pack- M. C. R. R., 22 I. C. C. 106. 
 ing of articles. Metropolitan Paving Weight per cubic foot enters into 
 
 Brick Co. v. A. A. R. R., 17 I. C. C. determination of proper classificar 
 
 197. tion. Yawman & E. Mfg. Co. v. 
 
 * Weight in relation to bulk must A., T. & S. F. Ry., 15 I. C. C 
 
 be taken into consideration in fram- 260. 
 
 29 [ 449 ] 
 
§ 520 ] Railroad Rate Regulation 
 
 carrying through unbroken carloads. These matters would 
 receive further discussion at present were it not that these 
 differences are fully treated under the head of discrimina- 
 tion later on. 
 
 § 520. Shipment in form more convenient for handling. 
 
 Where the form of package results in a saving of ex- 
 pense to the carrier by reason of greater convenience of 
 handling, a higher classification for the less convenient 
 form of shipment will be justified. In one case ^ it ap- 
 peared that iron pipe fittings shipped in cases from north- 
 ern points to southern territory took second-class rates, 
 but if shipped in casks, barrels or kegs a special iron rate, 
 lower than the sixth-class rate, was appUed on any quan- 
 tity. The Commission pointed out that "the barrel 
 package is preferably used in the ordinary course of 
 business because of its comparative cheapness. Even 
 at the same or approximately equal rates boxes would 
 not ordinarily be used, except when the quantity to be 
 separately packed is insufficient to fill a barrel. In such 
 a case the goods can be placed in a keg without much 
 inconvenience or additional expense, and it can hardly 
 be considered burdensome to require that kind of pack- 
 age if shippers desire to forward small lots at the special 
 iron rate. The carrier offers that rate to all persons and 
 on all quantities, provided the articles are sent in pack- 
 ages of barrel form; otherwise a higher rate is charged. 
 The lower rate is not allowed for some exceptional or 
 expensive mode of shipment, but on the package long in 
 general use and apparently favored by shippers irrespective 
 of rates, because of its suitability for the purpose and the 
 low cost for which it can be procured. As the choice is 
 wholly with the shipper it cannot be a hardship for him, 
 
 " Trades League of Phila. v. P. severed into all its component parts 
 
 W. & B. R. R., 8 I. C. C. Rep. and these parts shipped as separate 
 
 368. pieces. United Refrigerator Ice 
 
 The term knocked down in pieces, Machine Co. v. C. & N. W. Ry., 
 
 means that a machine must be 28 I. C. C. 439. 
 
 [ 450 ] 
 
Classification of Commodities [ § 521 
 
 under the circumstances disclosed, to pay the higher rate 
 when he elects to pack his goods in cases." Upon the 
 same ground the Commission has held that milk shipped 
 in cans, by which method it could be carried more cheaply, 
 ought, other things being equal, to have a lower rating 
 than milk carried in bottles.''' 
 
 § 621. Perishable freight. 
 
 It is obvious that perishable freight may be placed in a 
 higher class than non-perishable goods of the same general 
 nature. It requires special care in the carriage, greater 
 speed, and special equipment, and the risk of loss to the 
 carrier is greater. The transportation of fruit is of this 
 nature, and a high special classification is permissible.* 
 In a case which involved the classification of bananas, 
 the Commission said: "The kind of service required in the 
 transportation of bananas is a somewhat exacting one. 
 While not usually carried under refrigeration, a special 
 ventilated car is needed. They must be handled with 
 great expedition and in point of fact the Southern does 
 transport them from Charleston to Richmond and Lynch- 
 burg and intermediate points by an express freight service 
 which approximates a passenger schedule. The liability 
 to damage is considerable, and it appears that claims for 
 damage are frequently made." So in the case of melons, 
 the Commissioner said: "Melons being perishable, rapid 
 transit and prompt delivery are of the first importance 
 and where the carrier renders a special service a higher 
 rate than for the carriage of ordinary freight is warranted. 
 The defendants furnish special trains for the melon traffic 
 
 ' Milk Producers' Protective Ass'n ^ Gardner v. Southern Ry., 10 I. 
 
 V. Delaware, L. & W. R. R., 7 I. C. C. Rep. 342. 
 C. C. Rep. 92. That transportation of grapes 
 
 From a classification standpoint, entails special service may be a 
 
 the security of a package may with justification of advance. Western 
 
 propriety be considered in fixing Fruit Jobbers' Ass'n v. C, R. 
 
 the rating. Western Classification I. & P. Ry. Co., 27 I. C. C. 
 
 Case, 25 I. C. C. 442. 417. 
 
 [451] 
 
§§ 522, 523 ] Railroad Rate Regulation 
 
 and undertake to make quick movement and speedy de- 
 livery." ^ 
 
 § 522. Less than usual care required. 
 
 Conversely, where the commodity requires less than 
 ordinary care that fact is to be considered in lowering its 
 classification.^" "Coal is among the most desirable kinds 
 of traffic. The reasons for this have been several times 
 stated by the Commission and need not be repeated here 
 in detail. The cost of receiving, transporting and deliver- 
 ing that commodity is less than in case of almost any 
 other article of freight. Its value is not great, the hazard 
 of loss in transit is insignificant, it is an article of universal 
 necessity in daily life, and as a steam fuel it furnishes 
 the basis of many other industries. Coal rates in this 
 country are usually highly competitive, and this fact, 
 together with its desirability as traffic, and the large 
 quantities which are moved have produced on the average 
 a very low rate." " 
 
 § 523. Unusual care in handling required. 
 
 In regard to explosives the argument has been made 
 that one-half of the rate on dynamite is for the transpor- 
 tation service, and the other half for risk or insurance. ^^ 
 And clearly a much higher rate on explosives is justified 
 on account of risk of accident.^' Rates on explosives 
 should vary according to the risk attending the transporta- 
 tion of each particular kind." Thus masurite, which is a 
 
 ' Loud V. South Carolina Ry., C. Ry., 10 I. C. C. Rep. 505, applies 
 
 4 Int. Com. Rep. 205, 5 I. C. C. Rep. the same principles to lumber trans- 
 
 629. portation. 
 
 These observations do not apply "* Dupont de Nemours Powder 
 
 exclusively to food stuffs; lime is a Co. v. C. R. R. of N. J., 25 I. C. C. 
 
 commodity requiring perishable- 19. 
 
 freight service. Iowa-Minnesota Ce- '* U. S. v. W. & N. R. R., 26 I. 
 
 ment Rates, 28 I. C. C. 477. C. C. 309. 
 
 '" Denison L. & P. Co. v. M., K. " Blumenstein v. P. & R. Ry., 
 
 & T. Ry., 10 I. C. C. Rep. 337. 21 I. C. C. R. 90. 
 
 "Central Y. P. Ass'ii v. Illinois 
 
 [452] 
 
Classification of Commodities [ § 524 
 
 high explosive, but not dangerous to handle, should be 
 accorded a lower rate than dynamite, the handling of which 
 is attended with great danger. ^^ Oil in less than carload 
 shipments is not a desirable traffic; there is more or less 
 leakage, giving rise to damage claims on account of other 
 commodities shipped in the same car which may be injured 
 both by direct contact with the oil and by the odor there- 
 from; and it is, therefore, necessary to handle small, less 
 than carload lots, in separate cars and on account of its 
 inflammable nature extreme care must be exercised in its 
 movement." Likewise a charge of third-class rates on raw 
 tallow in barrels or other packages with cloth covers is not 
 shown to be unreasonable, although the charge for such 
 commodity in barrels or casks with wooden covers is fourth 
 class, in view of the fact that the barrels when covered 
 with cloth can be placed by the carriers in one position 
 only diu-ing transit, and also because of the fact that on 
 account of its disgusting character it endangers other traffic 
 when reshipped."' 
 
 § 524. Classification based on volume of business. 
 
 A difference in classification based on the amount of a 
 shipment, or the number of shipments, where the amount 
 does not lead to any economy of management on the part 
 of the carrier, is not justifiable. Thus a difference of clas- 
 sification of surgical chairs and sewing machines, based 
 on the fact that few surgical chairs and many sewing ma- 
 chines are offered for carriage, is improper. ^^ "The mere 
 fact that one article, for example, sewing machines, is 
 shipped 'in greater quantities' than surgical chairs, when 
 each as a rule is shipped in less than carload quantities, 
 and of no large difference in bulk, weight and value, and 
 of no appreciable difference in expense of handling and of 
 
 " Masurite Explosive Co. v. Pitts- " Green Bay Soap Co. v. C, M. 
 
 burg & L. E. R. Co., 11 I. C. C. & St. P. Ry., 14 I. C. C. 609. 
 405. '* Harvard Co. v. Pennsylvania 
 
 " MarshaU Oil Co. v. C. & N. W. Ry., 3 Int. Cora. Rep. 257, 4 I. C. C. 
 Ry., 14 I. C. C. 210. Rep. 212. 
 
 [453] 
 
§ 525 ] Railroad Rate Regulation 
 
 haul, that this alone should constitute in itself any reason 
 why the former should enjoy lower rates or classification 
 than the latter, merely for the reason that they are shipped 
 'in greater quantities,' is a doctrine to which we cannot 
 give our assent. In such a case mere quantity, not measured 
 by a recognized unit of quantity adapted to carriage and 
 lessening the expense of handling and carriage, cannot be 
 allowed to affect rates in the transportation of property. 
 The small dealer is entitled to just and reasonable rates 
 on his product, as much so as many and large dealers, and 
 any discrimination between them in rates based upon the 
 idea that the one class of persons makes many shipments 
 while the other makes but few is unjust and unreasonable 
 under the Act to Regulate Commerce. It is a discrimina- 
 tion in favor of one kind of traffic as against another in the 
 vital matter of rates, and is unlawful." ^* 
 
 § 626. Large volume of traffic in a certain commodity. 
 
 But though such a difference as that just examined will 
 not justify a difference in classification, the case is entirely 
 different where the volume of traffic in a certain commodity 
 is so great as to justify a certain special method of handling 
 it. Thus the enormous traffic in grain in the west justifies 
 a special classification for it; and so the vast traffic in lumber 
 in Georgia should be considered in the classification of that 
 commodity.^" So the great volume of shipments of flour 
 as compared with other cereal products justifies a lower 
 classification of flour. ^^ The volume of traffic which may 
 be considered, as has been seen, is the entire traffic in the 
 commodity in question. It is not permissible to consider 
 the amount of traffic furnished by a single shipper. ^^ "The 
 
 " The only discrimination which ^o xift v. Southern Ry., 138 Fed. 
 
 can legally be made between a large 753. 
 
 shipment and a small one must be " Schumacher Milling Co. v. Chi- 
 
 based upon the difference in the cost cago, R. I. & P. R. R., 6 I. C. C. Rep. 
 
 of service. California Commercial 61. 
 
 Ass'n V. Wells, Fargo & Co., 14 I. C. " Warner v. N. Y. C. & H. R. R. 
 
 C. 422. R., 3 Int. Com. Rep. 74, 4 I. C, C. 
 
 Rep. 32. 
 
 [454] 
 
Classification or Commodities [ § 526 
 
 volume of traflfic implies only the extent to which a particu- 
 lar article has become a subject of transportation, and does 
 not imply that a large shipper of the same or like traffic 
 can have any advantage over a shipper of smaller quantities. 
 Like traffic of large shippers and of small shippers must 
 have the same classification for carloads and the same for 
 less than carloads." It is, therefore, fundamental with 
 the Commission to-day that value and volume of tonnage 
 is important in determining the necessity of establishing 
 a commodity rate.^' 
 
 § 626. Value of the goods as an element. 
 
 The element of value in the commodity transported 
 forms a proper consideration to be taken into account in 
 the establishment of rate, since the greater the value the 
 greater the carrier's liability as an insurer of freight, and 
 the greater, therefore, the risk to the carrier in the trans- 
 portation. Since the risk is greater, the cost of carriage 
 increases by the amount of compensation for the greater 
 risk; and it is, therefore, proper to give more valuable goods 
 a higher classification than less valuable goods. ^* But the 
 increased rating given to articles because of greater value 
 must be not much more than is proper for the increased 
 risk; when value is brought in as an element in classifica- 
 tion, the classification cannot, nevertheless, be determined 
 arbitrarily. "Value is undoubtedly an element which 
 should be considered in the fixing of rates. It is often a 
 most important element, but plainly cannot be made an 
 arbitrary standard independent of all other considera- 
 tions." 2^ 
 
 " Tone Bros. v. I. C. R. R., 26 I. Market value of commodity con- 
 
 C. C. 279. sidered in determining classification. 
 
 "Howell V. New York, L. E. & Nucoa Butter Co. v. E. R. R., 20 
 
 W. R. R., 2 Int. Com. Rep. 162, 2 I. C. C. 174. 
 
 I. C. C. 272. " Prouty, Com., in Grain Shippers' 
 
 Value must be taken into consid- Ass'n v. Illinois Cent. R. R., 8 I. C. 
 
 eration in framing classifications C. Rep. 158. 
 
 and rates. Ford Co. v. M. C. R. Value as element in determining 
 R., 19 I. C. C. 507. 
 
 [455] 
 
§§ 527, 528 ] Railroad Rate Regulation 
 
 § 527. Different classification of coals. 
 
 Upon the ground of difference in value a different clas- 
 sification of bituminous and anthracite coal has often been 
 justified. ^^ "Carriers in making separate classifications, 
 or rates for different coals, take iato consideration, not only 
 the expense of transportation, but the value of the freight 
 and worth of the transportation to the shipper; the ex- 
 ceptional qualities which fit the more valuable anthracite 
 for domestic and special uses and cause its large consump- 
 tion in less distant markets; the shorter distance from the 
 mines to the principal markets rendering the transporta- 
 tion proportionately more expensive, and the necessity for 
 so apportioning the transportation charges between the 
 anthracite of different sizes and values that the more valu- 
 able may bear the greater charge." ^'' Therefore, in a re- 
 cent proceeding it was remarked that rates on bituminous 
 coal, being generally lower than on anthracite coal, a rate 
 on anthracite coal, which was higher than the rate on 
 bituminous coal on another road was not to be held un- 
 reasonable.^* 
 
 § 528. Bases of comparing values of goods. 
 
 The bases of comparing commodities may be seen more 
 clearly by still other illustrations. In the past the same 
 rate was apphed on grain and the products manufactured 
 from grain; of late the rate upon the product has been 
 somewhat higher, and a separate rate provided for articles 
 known as by-products.^' In the South manufactured 
 products and crude products are still often rated alike.'" 
 
 rating. Barr Chemical Works v. value, may properly be charged higher 
 
 P. & R. Ry., 20 1. C. C. 77. rate than ordinary bituminous coal. 
 
 The Commission commends the Shgo Iron Store Co. v. TJ. P. R. R. 
 
 idea to the consideration of the car- Co., 19 I. C. C. R. 527. 
 riers. Union Pacific Tea Co. v. Pa. ^ Meeker & Co. v. L. V. R. R. Co., 
 
 R. R., 14 I. C. C. 545. 21 I. C. C. 129. 
 
 » Cox Bros. & Co. V. L. V. Ry. Co., -' Grain Rates in C. F. A. Terri- 
 
 3 Int. Com. Rep. 460, 4 I. C. C. Rep. tory, 28 I. C. C. 549. 
 535. '" German Kali Works v. A., T. & 
 
 ■" Smithing coal, being of greater S. F. Ry. Co., 28 I. C. C. 223. 
 
 [456] 
 
Classification of Commodities [ § 529 
 
 A classification could not be based on the value of a particu- 
 lar shipment, since the number of classes would be too 
 large, and the refinement too subtle, for practical opera- 
 tion, and on the evidence presented the Commission was 
 not justified in withdrawing a particular commodity vary- 
 ing in value, density and dimensions with each other, from 
 the general class to which it belonged." It is the class to 
 which the shipment belongs which determines the matter 
 of rating; thus brooms, as a manufactured article, should, 
 in accordance with accepted principles, pay a rate higher 
 than broom corn, which is raw material.'^ Faced brick 
 are relatively so much more expensive than the ordinary 
 sorts, and the damage to them in transit would run into so 
 much higher figures, that a higher classification is plainly 
 justified.'' And generally speaking due weight must be 
 given to differences in value of commodities, and that 
 difference is not limited by measure of difference in risk.'^ 
 Thus a very low rate can be given on scrap tin plate, a 
 refuse of little intrinsic value, invoice value being about 
 $5 per ton, as it can move only under a rate relatively low 
 compared with other articles usually classed as junk.'"' 
 The fact that sand is a low-grade commodity and gives 
 rise to practically no claims for loss and damage, makes 
 it a case where low earnings per ton per mile would be 
 regarded as reasonably remunerative in other parts of the 
 country.'" 
 
 § 529. Differing value of some kind of freight. 
 
 As has been seen, classification is not to be made too 
 minute; and in general a difference of value between ar- 
 ticles of the same kind does not lead to a different classifica- 
 tion based on value. Thus, flour or cotton or silver ore 
 
 " Forest City Freight Bureau v. '^ Union Tanning Co. v. S. Ry., 
 
 Ann Arbor R. R. Co., 18 1. C. C. 205. 26 I. C. C. 159. 
 
 '^ Broom Rates to Colorado Points, '» Vulcan Detinning Co. v. U. P. 
 
 28 I. C. C. 310. R. R. Co., 21 I. C. C. R. 93. 
 
 " James & A. Co. v. B. & M. R. "> Rates on Sand to Houston, Tex., 
 
 R., 17 I. C. C. 273. 26 I. C. C. 677. 
 
 [457] 
 
§ 530 ] Railroad Rate Regulation 
 
 would have the same classification, without regard to the 
 quality and value of the particular shipments." To this 
 there are some exceptions; thus in the official classification 
 a difference is, or was, made in the classification of electro- 
 type plates, engravings, paintings and pictures, statuary, 
 bronze or metal, and stereotype plates, where the limita- 
 tion of value is based upon the net invoice and required 
 to be so expressed in the shipping receipts by shippers. 
 The classification also contained rules restricting to fixed 
 sums the valuation of livestock, marble, granite, ores, 
 antimony, calamine, copper, lead, silver, tin, or mica, — 
 such valuation to be stated by the shipper in the shipping 
 order or receipt; and the class rate is given only where the 
 value is so restricted. But in general it would not be per- 
 missible to make a difference between articles of the same 
 kind merely because of value. Where carriers have ap- 
 plied one rate to all automobiles, it is not possible for them 
 to differentiate between machines of different values, and 
 whether old or new, as there would be no place where a 
 definite line could be drawn; and, under the circumstances, 
 the Commission would not say that the placing of old and 
 new automobiles in the same class is unreasonable.^ 
 
 Topic E. Carload and L. C. L. 
 
 § 630. Different classification and rating. 
 
 A fundamental principle in all classification is that one 
 rate shall be given when the goods are carried in carload 
 lots, and a much higher rate when they are carried in less 
 than carloads. This difference is legally proper; and the 
 rate per 100 lbs. can be much less in C. L. lots than in L. C. 
 
 " Page V. Delaware, L. & W. R. law, classification properly may not 
 
 R., 6 I. C. C. Rep. 548. be predicated upon the use to be 
 
 See, however, Interstate Com. made of an article; use may, however, 
 
 Comm. V. Delaware, L. & W. R. R., be considered as evidence of value; 
 
 64 Fed. 723. value has a bearing upon rating in 
 
 *' Whitcomb v. C. & N. W. Ry., the classification. Western Classifi- 
 
 15 I. C. C. 27. cation Case, 25 I. C. C. 442. 
 
 In accordance with established 
 
 [458] 
 
Classification of Commodities [ § 531 
 
 L.'** If a carload can be handled as a unit, in loading, 
 transporting, and delivering, the cost to the carrier is 
 obviously much less; and furthermore there is no waste 
 through hauling a partly empty car, as must necessarily 
 happen in many cases where less than carload lots are 
 shipped. One idea in making the C. L. rates less than L. 
 C. L. shipments is that the consignee will unload the former, 
 while the railroad handles the latter.^" The difference 
 between carload and less-than-carload rates must be a 
 reasonable one. It must not be so wide as to be destructive 
 to competition between large and small dealers, especially 
 upon articles of general and necessary use, and which, 
 under existing conditions of trade, furnish a large volume 
 of business to carriers.''^ An excessive difference between 
 the carload and less-than-carload rates on the same com- 
 modity results in an undue preference to the carload 
 shipper. 
 
 § 531. When difference in classification is required. 
 
 Generally speaking, carload ratings should be estab- 
 lished whenever carload quantities are offered for ship- 
 ment, and public interest requires this course. ^^ But, 
 unless their rate is otherwise shown to be unreasonable, a 
 shipper on C. L. rates cannot complain that there is not a 
 higher L. C. L. rate." Thus the Commission has recently 
 held that there is no necessity for the establishment of a 
 carload rate on champagne, if the present any-quantity 
 rate is a reasonable rate for the transportation of that 
 commodity in carloads.^* Carloading rating asked on 
 cotton piece goods was refused,*^ on ground that business 
 
 " Harvard Co. v. Pennsylvania *^ Western Classification Case, 25 
 
 Ry., 3 Int. Com. Rep. 257, 4 I. C. C. I. C. C. 442. 
 
 Rep. 212. " Woodward- B. Co. v. S. P., L. 
 
 *o Re Advances in Demurrage A., & S. L. Ry., 29 I. C. C. 664. 
 
 Charges, 25 I. C. C. 314. " Schmidt & Peters, Inc., v. A., T. 
 
 *i Thurber v. New York C. & H. & S. F. Ry., 28 I. C. C. 376. 
 
 R. R. R., 2 Int. Com. Rep. 742, 3 I. "Xaylor Dry Goods Co. v. M. P. 
 
 C. C. Rep. 473. Ry., 28 I. C. C. 205. 
 
 [459] 
 
§ 532 ] Railroad Rate Regulation 
 
 conditions in the territory had adapted themselves to 
 existing any-quantity rates/* On the other hand, a tariff 
 was lately held to be unreasonable because of failure to 
 establish carload rating on automobile parts. ^'' And, still 
 later, a carload rating, with a minimum of 24,000 was 
 ordered to be estabUshed by the Commission on smoking 
 tobaccos.^* Where carriers have in effect a uniform rate 
 per 100 pounds for any quantity, which rate applies uni- 
 formly to all shippers, a different rate applied to carloads 
 than that applied to less-than-carloads will not be ordered 
 when such differential will have a tendency to increase 
 the rate on less-than-carloads, and permit the large dealer 
 to drive the smaller dealers out of the market, and cut off 
 the consumers and small dealer from purchasing at dis- 
 tant markets in less-than-carload lots/' Generally speak- 
 ing, therefore, if the carrier chooses to carry goods in less 
 than carload lots at the same rate as carload lots, the 
 shippers cannot complain unless their rates are unrea- 
 sonable. And, indeed, under certain circumstances any 
 quantity rates are clearly much better for all concerned.^" 
 
 § 532. Minimum carloads. 
 
 The carload rate necessarily involves some standard 
 for determining what shall constitute a carload; and this 
 is usually estabUshed by fixing a minimum weight of the 
 commodity as a carload. This must of course be fixed 
 reasonably, and must not exceed the weight that can prop- 
 erly be loaded in the car provided. It is in the interest 
 of economical transportation that cars containing light 
 and bulky articles should be loaded as heavily as possible; 
 and it is equally plain that a carrier can afford, to an ex- 
 tent, to decrease its rates in proportion as the loading 
 
 « See also Duncan & Co. v. N. C. « Brownell v. Columbus & C. M. 
 
 & St. L. Ry., 16 I. C. C. 590. R., 4 Int. Com. Rep. 285, 5 I. C. C. 
 
 "Auto Vehicle Co. v. C, M. & 638. 
 
 St. P. Ry., 21 I. C. C. R. 286. ^ German Kali Works v. A., T. & 
 
 "Bagley & Co. v. P. M. R. R., S. F. Ry., 28 I. C. C. 223. 
 25 I. C. C. 698. 
 [460] 
 
Classification of Commodities [ § 533 
 
 increases. ^^ A carrier in defining a carload and fixing the 
 rate should furnish a car adapted to carry properly the 
 quantity designated, and not put the shipper to any ex- 
 pense to fit up the car; this expense would seem to be 
 in excess of the tariff rate and unlawful. ^^ It would mani- 
 festly be unjust, under any rule as to minimum loads or 
 otherwise, to charge for weight not carried in a car which 
 the carrier has furnished and in which on account of its 
 size and the nature and bulk of the freight the required 
 minimum cannot be loaded.^' There may, of course, be 
 some exceptions to such a rule in cases where the freight 
 is extremely light in weight in comparison with its bulk, 
 and of such character as to forbid close packing; but it has 
 proper application to general freight which is usually 
 capable of being shipped in bulk or in bales or boxes. ^'' 
 
 § 633. Minimum carload regulations. 
 
 Like other regulations minimum arrangements should 
 be as uniform as possible; if they are unduly numerous, the 
 chief advantages are lost. Rules for minimum weights 
 which cannot be invariably enforced, or which, if so en- 
 forced, are plainly prejudicial to any class of shippers, 
 are not to be regarded as lawful.^" In a recent proceeding, 
 however, minimum rates for furniture were graduated 
 according to the length of the car based upon 16,000 pounds 
 for 36-foot equipment. ^^ In the case of a tank car, it is to 
 be noted, there is a natural minimum in the capacity of 
 
 *' Montague & Co. v. A., T. & S. ^* There is no justification for a 
 
 F. Ry., 17 I. C. C. 72. carload minimum of twice the weight 
 
 " National Hay Ass'n v. Lake the commodity will ordinarily load. 
 
 Shore & M. S. Ry., 9 I. C. C. Rep. Barnard Co. v. C, M. & St. P. Ry., 
 
 264. 26 I. C. C. 91. 
 
 " No commodity is loaded always ** Suffern, Hunt & Co. v. Indiana, 
 
 to its exact minimum; the actual D. & W. Ry., 7 I. C. C. Rep. 
 
 loading usually very considerably 255. 
 
 exceeds the minimum prescribed; ^ Commodity Rates Between Mis- 
 
 the same thing is to a degree true souri River Points, 28 1. C. C. 
 
 of baled wool. In re Wool, Hides, 265. 
 and Pelts, 25 I. C. C. 185. 
 
 [461] 
 
§ 534 ] Railroad Rate Regulation 
 
 the tank itself." A minimum as high as the product can 
 be carried under most advantageous circumstances, with 
 a comparatively low rate, is, it seems, best for shipper. ^^ 
 It is not a sufficient reason for denial of a reasonable mini- 
 mum weight for single-deck cars to estabUsh the fact that 
 the shipper might be able to obtain a reasonable minimum 
 by ordering double-deck cars, when there are no facihties 
 for loading double-deck cars.^' It is perhaps needless to 
 state that the carload rate is always charged in one con- 
 tingency, in observance of a rule that the amount charged 
 for less than a carload of freight shall not exceed charges 
 on a minimum carload weight of the article."" 
 
 § 634. Mixed carloads. 
 
 Mixed carloads of articles of the same class and the same 
 general nature may receive carload rates. The hberaliza- 
 tion of mixtures is in the interest of the whole pubhc; they 
 result in a better utilization of car space, lessen demands 
 upon terminal properties, decrease expense of operation, 
 and facilitate movement of freight."^ Thus a mixed car- 
 load of celery and cauliflower, vegetables entitled to the 
 same classification, should receive carload rates; any clas- 
 sification which interferes with the reasonable freedom of 
 the shipper in this respect is improper."^ "Examination 
 of the tariff providing for mixed carloads of green fruit 
 shows that bananas and pineapples may go as a mixed 
 carload, and that lemons and bananas mixed take the 
 carload rate; and that pineapples may be mixed in a car- 
 load with almost any other kind of fruit therein specified 
 except lemons and oranges. As bananas and pineapples 
 may be mixed and lemons and bananas may be mixed, 
 
 5' Rates on Asphalt & Asphaltum, Co. v. A. G. S. R. R., 26 I. C. C. 
 
 26 i. C. C. 614. 446. 
 
 58 Ponchatoula Farmers' Ass'n v. " Marshall Oil Co. v. C. & N. W. 
 
 I. C. R. R., 19 I. C. C. 513. Ry., 26 I. C. C. 575. 
 
 s'Kibbe v. St, L., B. & M. Ry., "^Tecumseh Celery Co. v. Cin- 
 
 25 I. C. C. 661. cinnati, J. & M. Ry., 4 Int. Com. Rep. 
 
 «» American Brake Shoo & Foundry 318, 5 I. C. C. Rep. 663. 
 
 [462] 
 
Classification of Commodities [ § 535 
 
 it is difficult to see why the complaint is not correct in 
 contending that lemons, bananas and pineapples may be 
 mixed in one carload and carried at the carload rate, 
 and yet technically lemons and pineapples cannot be for- 
 warded together in a carload and receive the benefit of 
 the carload charge under the present classification." '^ 
 It might be added that it is an almost universal rule that 
 where a package contains articles taking different rate the 
 entire package goes at the rate appficable to the highest 
 rated article.^'' 
 
 § 535. Shipment in form permitting greater carload. 
 
 On the same principle it would seem that if goods are so 
 compactly shipped that more can be carried ia a single 
 car, a lower classification should be given them. This was 
 claimed by the complainant in the case of the Planters' 
 Compress Company v. Cleveland, Cincinnati, Chicago & 
 St. Louis Railway.^^ The complainant offered for carriage 
 round bales of cotton so closely compressed and in such 
 a form that twice as much cotton could be loaded and carried 
 in a single car as could be loaded and carried in the ordinary 
 form. While, as was pointed out, this did not increase 
 the total amount of cotton carried, it certainly decreased 
 the expense of carrying such total amount. Notwithstand- 
 ing this fact, the majority of the Commission held that the 
 complainant was not entitled to a lower classification. 
 The most important argument in favor of the decision 
 is that the method of compression was expensive and was 
 not open to everyone, and that it was therefore improper 
 to give an advantage to the comparatively few shippers 
 who could use it. This argument is sound, and is probably 
 sufficient to justify the decision; and it has its bearing on 
 the point next under discussion.^^ 
 
 "Clements, Com., in Roth v. ss n I. C. C. Rep. 382. 
 
 Texas & P. Ry., 9 I. C. C. Rep. 602, ^ The Commission disapproves a 
 
 605. rule permitting the application of 
 
 '* Oak Grove Rami Creamery v. the balance of a through carload rate 
 
 Adams Exp. Co., 19 I. C. C. 454. on a less-than-carload quantity mov- 
 
 [463 1 
 
§§ 536, 537 ] Railroad Rate Regulation 
 
 § 536. Trainloads. 
 
 While lower carload rates are based on a real saving in 
 cost of transportation, the same thing cannot be said, at 
 least to the same extent, of train-load rates; and such rates 
 are not generally permissible." As the Commission has had 
 occasion to point out, giving greater consideration to train- 
 load than to carload traffic would be to the prejudice of small 
 shippers and the public.** But in England it is held that un- 
 der certain circumstances lower rates may be given for ship- 
 ments in trainloads.*' And, indeed, were it not for the policy 
 involved, it would be held very probably in America that 
 there is a sufficient difference in traffic costs between car 
 loads and train loads to justify rates slightly lower for the 
 train service as against the car service.™ 
 
 § 637. Traffic handled in special trains. 
 
 This general subject was considered at length in con- 
 nection with the classification of peaches carried to market 
 on special trains.^^ The complaint was made by shippers 
 of peaches from Delaware to New York. The traffic was 
 moved in separate trains from other freight, and at a high 
 rate of speed. The freight moved, according to the evi- 
 dence, at about 28 to 30 miles an hour, which did not 
 include the time at stations. Notwithstanding the speed 
 at which the trains were moved, the time required to 
 reach Jersey City from the Peninsula was 12 hours and 
 upwards. Respondents estimated the cost of movement of 
 this traffic at about double that of ordinary freight. 
 Empty cars in this trade were returned at the same rate 
 of speed. They carried no return loads. Cars used for 
 general freight ordinarily carry return loads and make 
 
 ing from a transit point. South- "Nicholson v. Gt. Western Ry., 
 
 western Millers' League v. A., T. & 4 C. B. (N. S). 366. 
 
 S. F. Ry., 24 I. C. C. 552. ™ Carsteens Packing Co. v. O. S. 
 
 " Paine v. Lehigh Valley R. R., L. Ry., 17 I. C. C. 324. 
 
 7 I. C. C. 218. " Delaware State Grange v. New 
 
 «» Anaconda Copper Mining Co. v. York, P. & N. R. R., 3 Int. Com. Rep. 
 
 C. & E. R. R., 19 I. C. C. 592. 554, 2 I. C. C. Rep. 309. 
 
 [464] 
 
Classification of Commodities [ § 538 
 
 slow time, and the usual earnings of such a car are five 
 dollars a day. The Commission held that the peculiar 
 needs of this service, requiring the withdrawal of cars 
 for a period of two months or more from other service, 
 the special fitting up of the cars for the carriage of the 
 freight, the high rate of speed at which the trains are run 
 in order to make early delivery at the markets, the greater 
 wear and deterioration to the cars, tracks and bridges by 
 the increased rate of speed and the return of the cars 
 empty, also at high speed, justifies a considerably higher 
 rate than for ordinary freight. The Commission also said 
 that a material feature in fixing the rating was the speed, 
 which was not confined to the loaded cars, but also in- 
 cluded the return of the empty cars, and was therefore a 
 service in both directions." 
 
 § 538. Car loaded by several shippers. 
 
 It has been said that a difference in rate for a solid 
 carload of one kind of freight, from one consignor to one 
 consignee, and a carload quantity from the same point of 
 shipment to the same destination, consisting of like freight 
 or freight of like character from more than one consignor 
 to one consignee, or from one consignor to more than one 
 consignee, is not justified by the difference in cost of han- 
 dling.'^' And, indeed, the saving effected by carload trans- 
 portation, for a single shipper to a single consignee, would 
 equally be effected when a car is loaded by several shippers 
 acting together, or by a forwarder collecting goods from 
 several consignors and packing them together. Although 
 the Commission has never had any hesitation about this 
 matter, the courts had for a time doubts as to whether 
 this practice was not unfair to the business of the rail- 
 roads; but it has finally been decided quite recently by 
 
 " See also Gardner v. So. Ry., 10 See Buckeye Buggy Co. v. Cleve- 
 
 I. C. C. 342. land, C, C. & St. L. Ry., 9 I. C. C. 
 
 " Thurber v. New York C. & H. Rep. 620. 
 R. R. R., 2 Int. Com. Rep. 742, 3 I. 
 C. C. 473. 
 
 30 [ 465 ] 
 
§ 539 ] Railroad Rate Regulation 
 
 the Supreme Court, that a forwarder offering a carload 
 of goods for shipment is entitled to the same rate as any 
 other shipper of goods in carload lots.'* 
 
 § 539. Commission rulings upon special ratings. 
 
 Since the later decisions of the Supreme Court there 
 can no longer be any doubt as to the powers which the 
 Commission now possesses under the Act as amended. 
 It may determine what shall be the difference in rate 
 between carload and less-than-carload lots; it may decide 
 whether the difference in revenue, due to a difference in 
 method of loading, warrants a difference in the rate on 
 carload shipments of the same article.'^^ Indeed, the Com- 
 mission since the recent amendments has had no ques- 
 tion that it could order special rates for carload quan- 
 tities to be established wherever carload quantities are so 
 generally offered in the shipment of the commodity in 
 question as to make such rates clearly enough in the 
 public interest.'^* It is generally provided under tariffs 
 that in order to obtain the benefit of a carload rate on 
 actual weight of overflow beyond the capacity of the car, 
 the shipment must have moved under one bill of lading." 
 Charging a higher rate on coal loaded in open cars than 
 on coal in box or stock cars was not found unreasonable 
 by the Commission, and a difference in rates may be 
 made when lumber is loaded in flat cars instead of being 
 loaded in box cars.'* Less-than-carload rates are applicable 
 to a different class of traffic from that embraced in car- 
 load and peddler-car shipments.'^' Under an any-quantity 
 rate the carrier has freedom in the use of its equipment; 
 
 '* Interstate Commerce Commis- ™ Western Classification Case, 25 
 
 sion V. D., L. & W. Ry., 220 U. S. I. C. C. 442. 
 
 235, 31 Sup. Ct. 392. " Scudder v. T. & P. Ry., 22 I. C. 
 
 It was formerly held otherwise by C 60. 
 
 the federal courts. Lundgrust v. " In re Advance on Lumber, 24 
 
 Grand Trunk W. Ry., 121 Fed. 915. I. C. C. 686. 
 
 " Atchison, T. & S. F. Ry. v. U. S., " Rates on Packing-House Prod- 
 
 232 U. S. 199, 34 Sup. Ct. 291. ucts, 28 I. C. C. 599. 
 
 [466] 
 
Classification of Commodities [ §§ 540, 541 
 
 and such a tariff gives the shipper no right to demand a 
 car of a given size.*" 
 
 § 640. Car sizes. > 
 
 Where a car was loaded according to carrier's loading 
 restrictions, the weight then being less than minimum, it 
 was held that the actual weight should govern.*^ But 
 where a car was loaded to full visible capacity, and trans- 
 portation charges were assessed on higher minimum weight, 
 it was held that the charges were unreasonable to the ex- 
 tent assessed.*^ When a shipment requires a car of greater 
 capacity than can be furnished by the carrier, two or more 
 smaller cars should be furnished, and charges assessed 
 upon the basis of actual weight of shipment, but not less 
 than the minimum weight prescribed in the tariff for a 
 carload.*' A tariff rule providing minimum weight of 
 50,000 pounds, subject to rule "except when marked ca- 
 pacity of car is less, in which event marked capacity of 
 car will govern," was construed by a carrier to vary mini- 
 mum, only when carrier was unable to furnish cars of 
 prescribed capacity; but it was held by the Conxmission 
 that this rule so construed was unfair, and should have 
 provided that when shipper ordered car of certain capacity, 
 and carrier for its own convenience furnished car of greater 
 capacity, the capacity of car ordered should be applied, 
 subject to actual weight, if in excess.*^ 
 
 § 541. Special equipment not necessary. 
 
 If, however, the carrier provides a special equipment 
 not because it is required by the nature of the traffic, 
 but for its own convenience, or to attract patronage in 
 competition with a rival, the fact that the article is thus 
 
 *> Falls & Co. V. C, R. I. & P. Ry., *^ Riverside Mills v. St. L. & S. 
 
 15 I. C. C. 269. F. R. R., 24 I. C. C. 264. 
 
 " Oregon Lumber Co. v. O. R. R. »' HuU Co. v. M. P. Ry., 21 I. C. 
 
 & N. Co., 19 I. C. C. R. 582. C. R. 486. 
 
 »2 Barnard v. C, M. & St. P. Ry., 
 26 I. C. C. 91. 
 
 [467] 
 
§ 542 ] Railroad Rate Regulation 
 
 carried does not justify high classification. This was held 
 in one case relating to oranges.'^ It appeared that the 
 transportation of oranges received special care and atten- 
 tion from the defendants. Cars and steamers were ven- 
 tilated; trains were run on fast schedules which limited 
 the number of cars and increased the consumption of coal, 
 and extra accommodations and employees were provided 
 at shipping, junction and terminal points. Moreover, 
 most of the cars engaged in this traffic by the all rail 
 lines returned empty, and the cars carrying oranges north 
 were not loaded to their full capacity, the average load 
 not exceeding nineteen thousand pounds. The semce, 
 therefore, was more expensive than that rendered in con- 
 nection with ordinary freight. Nevertheless, the Com- 
 mission found that oranges were not perishable, and that 
 this special care was unnecessary to their preservation; 
 and thereupon held that it would not justify a high classi- 
 fication.** 
 
 Topic F. Difference in Rate Between Classes 
 
 § 542. Principles governing differences between classes. 
 
 It remains to point out formally, what has been assumed 
 throughout this chapter, that there are great differences 
 between the rates payable for transportation for the same 
 distances upon goods in different classes. As the Commis- 
 sion has pointed out, striking differences in distinct com- 
 modities ordinarily result in substantial differences in rates.'^ 
 There is no fixed percentage for differentiation even of the 
 six classes usually established; still less is there any definite 
 rule for the differences to be made between commodities 
 
 "^ Railroad Com. of Florida v. In fixing rates it is to be borne in 
 
 Savannah, F. & W. R. R., 3 Int. mind that the carrier and the shipper 
 
 Com. Rep. 688, 700, 5 I. C. C. Rep. may both insist upon a rate that is 
 
 13. just and reasonable to them respec- 
 
 * See also Gardner v. So. Ry., 10 tively and relatively. Rates on 
 
 I. C. C. 342. Crushed Stone, 30 I. C. C. 22. 
 
 ^ Anthony v. P. & R. Ry., 14 I. 
 C. C. 581. 
 
 [468] 
 
Classification of Commodities [ § 543 
 
 with extra class rating. But it is matter of common knowl- 
 edge that there are great differences between rates pay- 
 able by the different classes, the highest class usually 
 paying for the same transportation many times what is 
 paid by the lowest class. Thus commodities of distinctively 
 high grade should be so rated as to bear their proportion- 
 ate share of general transportation expense.^* All that can 
 be said in general is that the principles as to rate making 
 apply here as elsewhere, and that the burden must be 
 thrown upon the various classes without outrageous dis- 
 proportion. 
 
 § 543. Low-grade commodities may be carried at low rates. 
 To go to one extreme, low-grade commodities may be 
 carried at rates relatively very low indeed. Provided that 
 the rate is remunerative, the other classes cannot complain 
 that the rate is disproportionately low, since unless such a 
 rate were made the traffic would not be got and the 
 higher classes would lose the benefit. To quote the 
 Commission again:'' "While some of the relatively low 
 rates on low-class commodities, including iron and steel, 
 are lower because of competition by water than they 
 would otherwise be, the general comparatively low rating 
 applied to them is largely due to the character of such 
 commodities, the use to which they are put, the demand 
 for them in large quantities throughout the country, their 
 susceptibility of movement at less cost and risk to the 
 carrier than high class and more valuable freight, and 
 other like conditions. It is to the interest of the carriers as 
 well as the public, that their rates be low enough, if not 
 below a remunerative point, to permit the general move- 
 ment and distribution of these commodities in general 
 
 "Kiser Co. v. C. of G. Ry., 17 I. other shippers. RaUroad Commis- 
 
 C. C. 430. sion of Fla. v. So. Exp. Co., 28 I. C. 
 
 The Commission cannot order low C. 634. 
 rates to be put on certain traffic, on *' Colorado Fuel & Iron Co. v. 
 
 the basis that the carrier may recoup So. Pacific Ry., 6 I. C. C. Rep. 
 
 itself by the charges it is making 489. 
 
 [469] 
 
§ 544 ] Railroad Rate Regulation 
 
 demand in large quantities for construction, building, 
 manufacturing, and other purposes. Reasonable freedom 
 of such movement and distribution stimulates the growth 
 and development of the country and thereby promotes all 
 interests. The general prevalence of such lower rates on 
 this character of freight is due to the carriers' usual policy 
 of making rates that will fairly permit the trafl&c to move, 
 if of such value that it will bear reasonable charges. Rates 
 on steel rails and other low-grade freights of the character 
 stated, yielding per ton per mile the average received on 
 all freight, would be unjust. The value of the goods, the 
 cost of the service, the degree of risk to the carrier, among 
 other considerations, have important bearing upon the 
 relation of rates on different kinds of traffic as well as the 
 reasonableness of the rate on a specific article." ^ 
 
 § 544. High-grade commodities should not be overcharged. 
 
 On the other hand, just because high-grade commodities 
 will stand a rate relatively very much higher, it is not 
 justifiable to charge them outrageously disproportionate 
 rates. This was set forth in a most striking manner in 
 one report of the Commission, where it said: '^ "Fur hats, 
 for example, move at first-class rates, and six dozen 
 of these ready for shipment weigh, approximately, 100 
 pounds. The cost of transporting that 100 pounds from 
 New York, where these hats are manufactured, to Chicago, 
 is 75 cents, or about 1 cent per hat. Evidently the num- 
 ber of hats worn in the city of Chicago would not be 
 appreciably diminished if this freight rate were to be 
 
 * The Commission finding that dust on the lines of other carriers in 
 
 on sawdust, in carloads, a commodity the territory in question. William 
 
 rate of 20 cents was exacted, held Plummer Co. v. N. P. Ry., 18 I. C. 
 
 that sawdust, being a low-grade com- C. 530. 
 
 modity and valued at about $1.50 " Re Advances in Freight Rates, 
 
 per ton, the rate should not exceed 9 I. C. C. Rep. 382. 
 
 8 cents per 100 lbs., minimum 24,000 Nitro-cellulose-wet should be clas- 
 
 Ibs., so as to correspond with the sified first-class, L. C. L. U. S. v. W. 
 
 rate on fuel wood and that on saw- & N. R. R., 26 I. C. C. 309. 
 
 [470] 
 
Classification of Commodities [ § 545 
 
 doubled. If such hats were manufactured both at New 
 York and at Baltunore, and the rate from New York were 
 to be increased, while that from Baltimore remained the 
 same, this might shut up the New York factory; or, if the 
 rate were too high, the establishment of a factory in 
 Chicago might be induced; although this would not be 
 true in case of hats, since the raw material, which moves 
 at the same rate, originates on the Atlantic Seaboard. 
 Probably the first-class rate throughout all Official Classi- 
 fication territory could be advanced 50 per cent without 
 appreciably reducing the volume of traffic." '^ 
 
 § 545. Proportionate difference between the classes. 
 
 The principle to be deduced, from the cases which have 
 just been discussed, is that the differences in rates between 
 the classes in a classification should not be disproportion- 
 ate. It has often been remarked that a relation of rates, 
 when once established on sound grounds, has a more 
 permanent basis than a rate.^' The classification being 
 made, a rate must be fixed for each class; and the differ- 
 ence in rates between the different classes must be reason- 
 able, in addition to the requirement that the rates in 
 themselves should be reasonable.®* In one recent case, 
 where the complainant contended that the Official Classifi- 
 cation ratings were unjust and unreasonable, in comparison 
 with those in the Southern and Western classifications, it 
 was held that a comparison of the ratings in the different 
 classifications is by no means a guide to the relative trans- 
 portation charges, unless the class rates under the several 
 classifications are also considered.®^ In an earUer case it 
 
 '^ Advance in bicycle rating from unreasonable. Western Traffic Ass'n 
 
 second to first class found unreason- v. B. & M. R. R., 24 1. C. C. 592. 
 
 able. Davis Sewing Machine Co. v. "' Rates from the Walsenburg 
 
 P. C. C. & St. L. Ry., 26 I. C. C. 282. Coal Field, 26 I. C. C. 85. 
 
 The application of one and one- '* Business Men's Legaue v. Atchi- 
 
 half first-class rating on bottle-wash- son, T. & S. F. R. R., 9 1. C. C. 318. 
 
 ing machines shipped from Lynn, '* Milburn Wagou Co. v. L. S. & 
 
 Mass., to San Francisco, Cal., found M. S. Ry., 22 I. C. C. 93. 
 
 [471] 
 
§ 546 ] Railroad Rate Regulation 
 
 was said that while an aUgnment on a universal percentage 
 basis between the classes might bring about more logical 
 and consistent adjustment, the ' adjustment attacked in 
 these proceedings, being the outgrowth of actual conditions 
 and the result of a gradual development, was not unjustly 
 discriminatory, nor was it shown to yield unreasonable 
 eamings.^^ An increased rate on raw material argues for 
 higher rate on finished product to keep the relative pro- 
 portions in effect.''' The general principle is now well 
 estabhshed that shippers are entitled to rates both rela- 
 tively and inherently reasonable.^' 
 
 § 646. Principles in making commodity rates. 
 
 In one investigation the Commission went into the 
 relative rates upon different commodities to determine 
 whether they were justifiable. Comparing these they 
 said:''* "Dressed beef loads about 22,000 pounds to the 
 car. Refrigeration is necessary, and this requires a car of 
 pecuMar construction and of unusual weight — ^about 
 36,000 pounds. The ice and salt weigh, approximately, 
 5,000 pounds, making in the aggregate for the entire load, 
 63,000 pounds, of which but 22,000 pounds are paying 
 freight. At 45 cents a hundred this would amount to 
 $99 per car. Packing-house products, or provisions, load 
 somewhat heavier than dressed beef, on the average 
 about 30,000 pounds. This, upon a basis of 30 cents, 
 would yield a revenue of 190 per car. The average loading 
 of grain cars upon standard lines at the present time is 
 probably 65,000 pounds. It was said by all witnesses 
 inquired of that grain is now loaded to the full capacity of 
 the car. Within the last three years railroads have added 
 
 * Indianapolis Freight Bureau v. '' See Re Advances in Freight 
 
 C, C, C. & St. L. Ry., 15 I. C. C. Rates, 9 I. C. C. Rep. 382. 
 504. Other conditions being equal, the 
 
 " Rates on Linseed Oil, 26 I. C. C. rate per ton-mile from ice traffic 
 
 205. ought not to equal the average from 
 
 '* Coke Producers' Ass'n v. B. &. O. all sources. Mountain Ice Co. v. 
 
 Ry., 27 I. C. C. 125. D., L. & W. R. R., 15 I. C. C. 305. 
 
 [472] 
 
Classification of Commodities [ § 547 
 
 largely to their equipment of freight cars, and the addition 
 has been almost entirely in cars of large capacity. The 
 traffic manager of the Michigan Central testified that the 
 cars upon his system are from 60,000 to 80,000 poimds 
 capacity. A grain load of 65,000 pounds would yield 
 $113.75, as against $99 for dressed meats and $90 for 
 provisions. The total weight of the grain and car would 
 be greater than either the dressed beef or provisions, but 
 testimony in previous cases showed that in the operation 
 of these railways the tendency is to regard the loaded car 
 as the unit; a train-load, consisting of a certain number of 
 cars without much reference to the loading of those cars." ^ 
 
 § 647. Reasonableness tested by comparison. 
 
 Where the same rate was given to the class containing 
 finished cheap bedroom sets of furniture and to another 
 class containing unfinished sets of the same sort, which 
 were of less value and could be packed in smaller bulk, it 
 was held that the failure to make a distinction in rates 
 was unfair; and upon consideration the rate on the un- 
 finished class was fixed at eighty-five per cent of that on 
 the finished furniture.^ Upon similar principles a classifi- 
 cation which puts into different groups "steam coal," 
 which is coal that can be used only for manufacturing 
 purposes, and soft or lump coal, which is of higher value 
 and is used for domestic purposes, is proper.' Where 
 rates on a particular commodity bear a uniform relation to 
 rates of a certain class, any inequalities in those rates, as 
 between different places, are those peculiar to that class. 
 A finding, therefore, that rates on such commodities made 
 to conform to a class are relatively imjust would inferen- 
 
 ' Potter Mf g Co. v. Chicago & higher rates in the same general 
 
 G. T. R. R., 4 Int. Com. Com. 223, territory. Bartles Oil Co. v. C, M. 
 
 5 I. C. C. Rep. 514. & St. P. Ry., 17 I. C. C. 146. 
 
 The extensive application volun- ' Potter M'fg Co. v. C. & G. T. 
 
 tarily by other carriers than defend- Ry., 5 I. C. C. 514. 
 ant of fourth-class rates on oils is ' McGrew v. Missouri Pac. Ry., 
 
 evidence of the unreasonableness of 8 I. C. C. Rep. 630. 
 
 [473] 
 
§ 548 ] Railroad Rate Regulation 
 
 tially condemn the adjustment with respect of the entire 
 class, and this is also true of the reasonableness of the 
 rates/ Owing to differences in bulk and weight, there 
 must of necessity be marked variations in revenue per car 
 produced by articles in the same and other classes, and a 
 disparity either way is not conclusive of the propriety of 
 an adjustment.*^ 
 
 § 648. Slight difierences between similar commodities. 
 
 In one proceeding'' before the Commission the complainant 
 claimed that beans and tomatoes should go in the same class, 
 and that the defendant railway, by putting beans in the sec- 
 ond class at a rate of 70 cents per hxmdred, while tomatoes 
 went third class at a rate of 44 cents per hundred, had 
 discriminated against the complainant as a shipper of 
 beans. The Commission, however, said: "An exact 
 classification is impossible. Unless the number of classes 
 is infinitely increased there must always be articles in 
 respect to which it will be very difficult to determine into 
 which of two classes they should fall. If the elements 
 which fix the class are substantially the same in case of 
 two articles, then those articles should, as a matter of law, 
 be classified alike, and to put one in one class and another 
 in another class would be a discrimination and a violation 
 of the Act, no matter what the purpose of doing it might 
 be. It appears here that beans and tomatoes are both 
 shipped in peck boxes and that the defendant's agent at 
 Verona was accustomed to receive and bUl the same 
 number of boxes for one hundred pounds whether of beans 
 or of tomatoes, so that the complainant, as a shipper of 
 
 ' Acme Cement Plaster Co. v. L. the burlaps, but there is no theory 
 
 S. & M. S. Ry., 17 I. C. C. 30. upon which the carriers could justly 
 
 ' Kiser Co. v. C. of G. Ry., 17 establish this and Commission ap- 
 
 I. C. C. 430. proved a rate upon burlap bags 
 
 " Rea V. Mobile & O. Ry., 7 1. C. C. twice as great as that upon the raw 
 
 Rep. 43. product. Kent Co. v. N. Y. C. & 
 
 The rate on burlap bags ought H. R. R. R., 15 I. C. C. 349. 
 to be somewhat higher than upon 
 
 [474] 
 
Classification of Commodities [ § 549 
 
 beans, was obliged to pay 70 cents for transporting eight 
 boxes of his commodity to East St. Louis while the shipper 
 of tomatoes was only obliged to pay 44 cents for trans- 
 porting eight boxes of his commodity, the nominal weight 
 being the same and the value about the same. If this were 
 all there was of the testimony we might hold that beans 
 ought to be rated third class with tomatoes, but the 
 defendant's testimony tends to show that beans are more 
 perishable, and it appears, in part from the complainant's 
 testimony as well as that of the defendant, that tomatoes 
 are in fact heavier than beans." '' 
 
 § 549. Discrimination between conamodities forbidden. 
 
 In determining whether there is a discrimination be- 
 tween differing but similar articles, all the factors which 
 go to effect a reasonable rate are to be considered, such as 
 character and quality of the commodity, cost of produc- 
 tion, extent and nature of the competition in the business 
 itself and by other transportation lines, and the interests 
 of the pubhc in the use of the commodity, and its market 
 cost.* The commodities must be similar in order to claim 
 equality of treatment; live stock and their products are 
 entitled to such treatment.' But not fresh meat and fresh 
 fruit.^" A lower export rate may sometimes be justified, 
 but the difference must be a reasonable one; and it would 
 not be proper to make a permanent difference." In one 
 important proceeding it was remarked that the relation 
 of import rates as between New York and Boston should 
 
 ' See also Harvard Co. v. Penn- 436, 2 I. C. C. 618; F. Schumacher 
 
 sylvania Co., 3 Int. Com. Rep. 257, Milling Co. v. Chicago, R. I. & P. R. 
 
 4 I. C. C. Rep. 212. R., 4 Int. Com. Rep. 373, 6 I. C. C. 
 
 There should be a definite rela- Rep. 61. 
 
 tion between live hogs and products " Chicago L. S. Exch. v. Chicago 
 
 thereof based upon transportation G. W. Ry., 10 I. C. C. Rep. 428. 
 
 conditions, Sinclair & Co. v. C, M. "> Miner v. New York, N. H. & 
 
 & St. P. Ry., 21 I. C. C. 490. H. R. R., 11 1. C. C. Rep. 422. 
 
 ' Imperial Coal Co. v. Pittsburgh " Re Export and Domestic Rates 
 
 & L. E. R. R., 2 Int. Com. Rep. on Grain, 8 I. C. C. Rep. 214. 
 
 [4751 
 
§ 550 ] Railroad Rate Regulation 
 
 apply to both class and commodity rates. ^^ As in the mak- 
 ing of distance rates so in the making of commodity rates 
 it is often urged that commercial equalization should be 
 in the mind of the rate maker. But although such a policy 
 may be employed to a certain extent here as elsewhere, it 
 is also true that the rate maker may ignore it. And the 
 principle to be deduced from all the cases which have just 
 been discussed is plainly that the differences in rates be- 
 tween the classes in a classification should not be dispropor- 
 tionate, and of this the rate maker should never lose sight. 
 
 § 550. Difference between values justifies different classi- 
 fication. 
 
 Where two similar articles are compared, a difference in 
 classification may be justified merely because of a difference 
 in value. Thus where a complaint was made because other 
 cereal products were given a higher classification than 
 flour, the Commission said: "The question presented by 
 complainant is, whether the other cereal products exceed- 
 ing flour in value, the highest 68.2 per cent, the lowest 
 9.1 per cent, and giving an average excess in value of 33.4 
 per cent, should take the same classification, and there- 
 fore the same rate, as flour, values alone being considered? " 
 It is a conceded rule of classification that value, on ac- 
 count of enhanced risk and ability to pay a greater propor- 
 tion of the aggregate return upon investment, may justify 
 a higher classification, and in view of this rule the difference 
 in values here shown is sufficiently great to justify the 
 conclusion that the comparison as to value alone furnishes 
 no sufficient reason for a classification with flour." And 
 upon the same principle, when it was claimed that a dif- 
 ferent classification on milk and cream, carried in the same 
 sized can, could not be reasonable, the Commission pointed 
 out that the element of value in the commodity transported 
 
 '2 Chamber of Commerce of New " McDill, Com., in Schumacher 
 
 York V. N. Y. C. & H. R. R. Co., Milling Co. v. Chicago, R. I. & P. 
 24 I. C. C. 674, 677. R. R., 6 I. C. C. Rep. 61. 
 
 [476] 
 
Classification of Commodities [ § 551 
 
 forms a proper consideration to be taken into the account 
 in the estabhshment of a rate, and justified the difference 
 because of the great difference in value between milk and 
 cream.'* 
 
 § 561. Relative differences between ratings. 
 
 The Commission has feared that to apply the same 
 percentage relation in class rates in every part of the coun- 
 try would create confusion and discrimination, instead of 
 securing uniformity and equal treatment.'^ It will be 
 obvious, however, that there are certain principles to be 
 observed, such as that in framing any schedules of rates 
 normally any-quantity rates should be higher than carload 
 and lower than L. C. L. rates would be.'" A commodity 
 rate higher than the class rate is not of itself unlawful; " 
 but ordinarily whatever relation is established for class 
 rates would apply in case of commodity rates. '^ Although 
 a very considerable spread is allowed, the difference in 
 rate between carload L. C. L. should not be too wide.'' 
 And the less-than-carload rate should bear a reasonable 
 and proper relation to the carload rate.^" Very often the 
 facts do not warrant fixing of carload rates solely on the basis 
 of given percentages of L. C. L. rate.^' Indeed, because 
 of the long-continued practice of the carriers to which the 
 commerce of the country had adjusted itself, the Commis- 
 sion early in its history accepted as valid and justified a 
 carload rate that was less proportionately than a rate on 
 a less-than-carload shipment of the same commodity.-" 
 In establishing a proper relation between the carload and 
 
 "Howell V. New York, L. E. & '« Iowa State Board of R. R. 
 
 W. R. R., 2 Int. Com. Rep. 162, Com'rs v. A. E. R. R., 28 1. C. C. 193. 
 
 2 I. C. C. Rep. 272. '' VirginiarCarolina Chemical Co. 
 
 " Iowa State Board of R. R. v. St. Louis, I. M. & So., 18 I. C. C. 1. 
 
 Com'rs V. A. E. R. R., 28 I. C. C. 563. » good & Sons v. Del. & Hud. 
 
 '^ Mutual Rice Trade & Develop- Co., 17 I. C. C. 15. 
 
 ment Ass'n v. I. & G. N. R. R., 23 " In re Advances on Milk, 23 
 
 I. C. C. 219. I. C. C. R. 500. 
 
 " Wheeling Corrugating Co. v. ^^ Carstens Packing Co. v. O. S. 
 
 B. & O. R. R., 18 1. C. C. 125. L. R. R., 17 I. C. C. 324. 
 
 [4771 
 
§551] 
 
 Railroad Rate Regulation 
 
 less-than-carload ratings consideration should be given 
 the demands upon the terminal properties.^' Apparently 
 it may be provided that no single shipment or small lot 
 of freight of one class will be taken at less than a minimum 
 of one hundred poimds.^^ Different articles require such 
 different care in carriage that it would be unjust to fix a 
 single rate that should apply to all articles carried.^' It is 
 necessary in order to distribute fairly among the shippers 
 the burden of the entire schedule of rates to graduate the 
 charge according to the nature of the article carried.^* 
 
 23 Western Classification Case, 25 
 I. C. C. 442. 
 
 2< Kleibacker v. L. & N. R. R. Co., 
 22 I. C. C. 420. 
 
 ^^ The Commission may not order 
 in a system of rates which is unjustly 
 apportioned. Lehigh Valley Ry. v. 
 United States, 204 Fed. 986. 
 
 Nature of the commodities classi- 
 fied respectively considered in de- 
 termining reasonableness of rates. 
 Meridian Fertilizer Factory v. T. & 
 P. Ry., 26 I. C. C. 351. 
 
 ^ The Commission, subject to re- 
 view by the courts only if it has 
 acted with outrageous disregard for 
 the conditions with which it is deal- 
 ing, may order the differential to 
 be observed between C. L. and L. 
 C. L. Atchison, T. & S. F. Ry. v. 
 United States, 204 Fed. 647. 
 
 Percentage adjustment between 
 C. F. A. and East ought not to be dis- 
 turbed. Schmidt & Sons v. M. C. 
 R. R., 23 I. C. C. 684. 
 
 [478] 
 
CHAPTER Xn 
 
 METHODS OF FIXING RATES 
 
 ! 560. Provisions of the Act. 
 561. Fixing the particular rate. 
 
 Topic A. The Unit of Charge 
 
 ! 562. Characteristics of a rate. 
 
 563. Established unit prima facie reasonable. 
 
 564. Classification sheet not varied by representation. 
 
 565. Methods of charging in rate making. 
 
 566. A minimum rate is justifiable. 
 
 567. Basis of minimum weights refund. 
 
 568. Charge for excess over minimum. 
 
 569. All factors enter into a particular rate. 
 
 Topic B. Additional Charges for SpeSial Service 
 
 ! 570. General principles as to additional charges. 
 
 571. Propriety of making extra charges. 
 
 572. Freight should cover the entire transportation. 
 
 573. No separate charge for a part of the transit. 
 
 574. Charges for services during transportation. 
 
 575. Services after carriage is ended. 
 
 576. Storage charges. 
 
 577. Demurrage costs. 
 
 578. Terminal facilities usually included. 
 
 579. Terminals regarded as connections. 
 
 Topic C. Basis of Distance Rates 
 
 I 580. Mileage rate tends to decrease inversely. 
 
 581. General standard of comparison the ton-mile. 
 
 582. Equal mileage rates impractical. 
 
 583. Rates in rough proportion to distance normally. 
 
 584. Construction of distance rates. 
 
 585. Bases of rate structure. 
 
 586. Different cost of haulage. 
 
 587. Divisions built through a difficult territory. 
 
 588. Factors modifying distance rates. 
 
 589. Comparison of through rates and local rates. 
 
 590. Carriage in opposite directions. 
 
 591. Passenger fares generally on mileage basis. 
 
 479 
 
§ 560 ] Railroad Rate Regulation 
 
 Topic D. Grouping Stations and Basing PoirUs 
 
 § 592. The system of grouping. 
 
 593. Distances considered in grouping. 
 
 594. Grouping must be reasonable. 
 
 595. Testing reasonableness ot grouping. 
 
 596. Uniform rate to a group of stations. 
 
 597. Commutation rates for suburban passengers. 
 
 598. How basing points are established. 
 
 599. Whether basing points justified. 
 
 600. Determination of base rate. 
 
 601. Extent of power' over grouping. 
 
 602. Creation of a market by preferential rates. 
 
 603. Equalizing manufactures in different localities. 
 
 § 560. Provisions of the Act. 
 
 The Commission had originally little power over the 
 details of rate making, but by the 1910 Amendment the 
 bases upon which tariffs are made seem to be pretty much 
 in its hands. The provisions of section 6, requiring the 
 pubhshing of schedules, and insisting upon adherence 
 thereto as the only proper rate to be charged, are old; but to 
 the requirement that on request the officials must themselves 
 decipher their schedules, and quote a correct rate under 
 penalty for failure, is new.' And section 15 now provided 
 in detail that the Commission shall have the power to 
 make orders, with reference to rates, tariffs, regulations, 
 or practices which are or may be made or prescribed, and 
 just and reasonable regulations and practices affecting 
 rates, or tariffs, the issuance, form, and substance of tickets, 
 receipts, and bills of lading, the manner and method of 
 presenting, marking, packing, and delivering property for 
 transportation, the facilities for transportation, the carry- 
 ing of personal, sample, and excess baggage, and all other 
 matters relating to or connected with the receiving, han- 
 dling, transporting, storing, and delivery of property sub- 
 ject to the provisions of the Act, which may be necessary 
 or proper to secure the safe and prompt receipt, handling, 
 transportation, and delivery of property subject to its pro- 
 visions. The extent to which in making rates the relations 
 [4801 
 
Methods of Fixing Rates [ §§ 561, 562 
 
 of distances must be observed is more fully discussed in 
 Chapter XVI than here. 
 
 § 561. Fixing the particular rate. 
 
 There are certain details relating to the fixing of a rate 
 which must be considered. Rate making has become 
 enough of a science to have its own technique. The sepa- 
 rate rate is the definite charge fixed by the person con- 
 ducting a public employment as the price regularly de- 
 manded for performing the service asked. So many kinds 
 of service are asked by so many people, that it would be 
 inconvenient to conduct the business without some estab- 
 lished schedule of rates. It would, indeed, be a practical 
 impossibility to fix a separate rate for each service by itself. 
 Thus a classified schedule of regular charges is the usual 
 characteristic of a pubHc business. Indeed by modern 
 legislation such rate schedules are made obligatory, to 
 make sure that all may know the rate in advance, and to 
 make certain that all shall be charged the same rate. Va- 
 rious methods of charging, it will be seen, may be adopted 
 in framing such schedules, so long as the rate imposed 
 may be known with certainty. And this end is furthered 
 by basing rates upon some unit of service. This is indeed 
 the most salient characteristic of a rate, considered ab- 
 stractly, that it is an entirety — the single charge for the 
 whole service which is performed. 
 
 Topic A. The Unit of Charge 
 
 § 562. Characteristics of a rate. 
 
 It is natural in pubUc calling in the generality of cases 
 that things are done by rule. The very character of the 
 business usually dictates this policy. Public businesses 
 are commonly carried on upon a large scale; and action 
 according to rules fixed in advance is always found necessary 
 for the proper conduct of any great business. This applies 
 to charging compensation as much as it appUes to any other 
 thing done in carrying on the business. It is therefore 
 31 [ 481 ] 
 
§ 563 ] Railboad Rate Regulation 
 
 plainly consistent with public duty for those who manage 
 a public service to establish a schedule of rates as the basis 
 of charges. '^ A rate thus fixed is a regulation, and has the 
 legal characteristics pertaining to a regulation made by a 
 public service company to govern the dealings between 
 itself and the public. Thus a schedule of rates once duly 
 estabhshed will be presumed to be reasonable unless the 
 contrary is shown. It will be recognized that some minor 
 inequalities are unavoidable in the apphcation of all sched- 
 ules. It will be considered proper to pubUsh these rates 
 so that a person dealing with the public company may 
 know with some certainty how much he will be charged.^* 
 And it will be held bad practice to change estabhshed rates 
 without giving notice. All these are generally true of other 
 regulations, and it is submitted that they ought to be 
 held as to rates. 
 
 § 563. Established unit prima facie reasonable. 
 
 Where the carriers establish a classification and con- 
 tinue it in operation for a considerable time, it may fairly 
 be inferred that the classification is a reasonable one, and 
 it will be so presumed; and the burden of showing the charge 
 unreasonable is on the party, whether carrier or shipper, 
 who proposes a change. "The continuance of a given rate 
 is not conclusive evidence of the reasonableness of that 
 rate; but when a railway company advances a rate which 
 has been for some time in force, the fact of its continuance 
 is in the nature of an admission against that company which 
 tends to show the unreasonableness of the advance." ^' 
 Where, however, a classification is adopted and maintained 
 under an order of the Commission no such presumption 
 can be made, even though the Commission has no power 
 to enforce its order, since the carrier does in fact obey the 
 
 "See Alan Wood I. & S. Co. v. '-^Re Charges on Food Products, 4 
 
 Pa. R. R., 24 I. C. C. 27. I. C. C. 48. 
 
 ''See Western Classification Case, 
 25 I. C. C. 442. 
 [482] 
 
Methods of Fixing Rates [ § 564 
 
 order, and does not act voluntarily and upon its own judg- 
 ment. "The carriers classified soap in carloads as fifth- 
 class freight originally, and only changed it to sixth class 
 in compliance with our order in 1891. However limited 
 the compulsory effect of an order by the Commission may 
 be in the present state of the law, compliance with its re- 
 quirements cannot be regarded as voluntary action by the 
 earners. There is nothing to show that the carriers would 
 have changed soap in carloads to sixth class in 1891 or later 
 if no order requiring that to be done had been issued." ^^ 
 
 § 564. Classification sheet not varied by representation. 
 
 The classification sheet, as has been seen, becomes bind- 
 ing from the moment of publication; and it cannot be 
 varied by any private bargain or by any representation 
 made to a particular shipper. ^^ "It will be convenient, 
 before taking up the official classifications for examination, 
 to consider the complainant's claim that he was induced 
 to locate at Ashtabula by the assurances of defendant's 
 agents that his goods would be taken as sixth class. Some 
 importance is attached to these assurances as establishing 
 equities in his favor. On the other hand, it is contended 
 by the defense that complainant was understood in the 
 correspondence to be asking for rates upon blocks as they 
 are when first cut from the log and with the bark on, and 
 that it was with reference to such blocks that rates were 
 given him. We do not however consider this very material. 
 The official classification must have the same construction 
 in favor of all other persons as is given in favor of complain- 
 ant ; no assurances to him, however honestly made or honestly 
 relied upon, can entitle him to special rates. He could not 
 have special rates under an express promise, and quite as 
 plainly he cannot have them because of any conduct of 
 defendant's agents such as was shown in proof. The law 
 
 »° Holmes v. Southern Ry., 8 I. v. Lake Shore & M. S. R. R., 2 Int. 
 C. C. Rep. 561. Com. Rep. 81, 2 I. C. C. Rep. 
 
 " Cooley, Chairman, in Hurlbut 122. 
 
 [483] 
 
§ 565 ] Railroad Rate Regulation 
 
 requires uniformity and impartiality in the dealings of a 
 carrier with all its customers." '^ 
 
 § 565. Methods of charging in rate making. 
 
 It is for the management of the railroad to decide the 
 basis upon which the rate shall be made up. More than 
 this, it will commonly be not unreasonable to employ differ- 
 ent methods in arriving at the proper rate in different 
 cases; and if these differing methods are respectively used 
 in appropriate treatment of varying subject-matter, it is 
 plain that this is not only consistent with pubhc duty, 
 but cases can even be imagined where not to do so would 
 be inconsistent with pubhc duty. It is, for example, 
 plainly justifiable for a railroad in making its freight rates 
 to charge for coal by the ton, but for paper boxes by the 
 cubic yard. "The space required is rightly taken into 
 account in the adjustment of freight charges, when the 
 bulk is so considerable in comparison with weight as to 
 occupy space which if taken up by heavier freight would 
 yield larger receipts." ^' What has just been said is of 
 course subject to the limitation that there must be no 
 illegal discrimination of any sort by charging some by 
 one measure and others by another. But where the rail- 
 way company fixed rates for packages containing a cer- 
 tain number of pounds, it was held that baskets of fish, 
 of a size required by the business, should be rated by the 
 pound and not by the size of packages as contained in the 
 published rates of the railway company.^* 
 
 ^^ See Proctor & Gamble Co. v. weight is taken into consideration 
 
 C, H. & D. Ry., 9 I. C. C. 440. in the making of the rate itself, and 
 
 '^ Commissioner Morrison in James of such estimated weights shippers 
 
 V. East Tenn. V. & G. R. R., 2 Int. have the right to complain before 
 
 Com. Rep. 609, 3 I. C. C. Rep. 225. this Commission and secure relief. 
 
 The Commission has recognized White & Co. v. B. & O. S. W. R. R., 
 
 the right of carriers, in order to 12 I. C. C. 306. 
 facilitate the movement of business, " Woodger v. Great Western R. 
 
 to fix an estimate weight upon cer- Co., 2 Nev. & Mac. 102, s. c, L. R. 
 
 tain standard packages upon which 2 C. P. 318. 
 a rate is based. This estimated Certain conditions govern claasi- 
 
 [484] 
 
Methods of Fixing Rates [ § 566 
 
 § 566. A minimum rate is justifiable. 
 
 A minimum rate is an excellent illustration of another 
 characteristic of the rate considered as a regulation es- 
 tablishing a unit. Such a rate may be supported, although 
 it operates in some cases somewhat differently than it does 
 in others; for this is the normal operation of a regulation. 
 It may therefore be true that some applicants are paying 
 for a little more than others upon a pro rata basis, and the 
 objection of discrimination cannot be taken. This matter 
 of the minimum charge was thoroughly canvassed in 
 one of the earlier cases before the Commission,'^ where 
 plaintiff, a shipper of chewing gum, objected to the de- 
 fendants' rule providing that the minimum charge upon 
 any single shipment of freight should be for one hundred 
 pounds at the rate applying to the article. The Commis- 
 sion said squarely: "It is reasonable and proper that car- 
 riers should fix a minimum weight and charge for the 
 transportation of less than carload shipments. This is 
 justified by the necessary expense and trouble attending 
 the carriage of such shipments, large or small, which, 
 aside from the actual manual labor involved, are prac- 
 tically the same irrespective of the weight or bulk of the 
 package. Therefore, the only question presented for de- 
 termination is whether or not the rule in force is reason- 
 able, and not unjustly discriminative in its application. 
 The amoimt of clerical work required in the shipment, 
 transfer to connecting carriers and delivery of a ship- 
 ment, the records of the same necessary to be kept, the 
 division of the freight charges among the carriers partici- 
 pating in the transportation of this traffic, is shown to be 
 
 fication of freight including weight Rule that the minimum charge 
 
 per cubic foot, value per cubic foot, for a single shipment of less-than- 
 
 risk of breakage and volume of trafBc. carload freight will be 100 pounds of 
 
 Yawman & Erbe Mfg. Co. v. A., T. & the class or commodity to which 
 
 S. F. Ry., 15 I. C. C. 260. the article belongs has several times 
 
 35 Wrigley v. Cleveland, C, C. & been approved. Western Classifica- 
 
 St. L. Ry. et. al., 10 I. C. C. Rep. tion Case, 25 I. C. C. 442. 
 412. 
 
 [485] 
 
§ 567 ] Railroad Rate Regulation 
 
 considerable, and justifies a higher charge proportionally 
 than for large shipments. Such higher charge is also justi- 
 fied by the limited car capacity of package freight as 
 compared with carloads of other freight. Illustrative 
 of the minimum revenue per carload, one witness testified 
 to an instance of the carriage of a car of package freight 
 aggregating 1520 pounds, for which the revenue on the 
 50 pounds minimum basis was only $4.36." '* 
 
 § 567. Basis of minimtun weights refund. 
 
 There may be cases, plainly enough, where the pro- 
 tection of the carrier may require that the shipper shall 
 pay in the first instance upon a fixed minimum weight. 
 In one complaint before the Interstate Commerce Com- 
 mission " it was shown that the defendant railway had 
 established minimum weights on cotton of 535 pounds 
 per bale on shipments without certified weight, and that 
 the defendant insisted upon payment of the freight charges 
 specified in its expense bills when represented to the con- 
 signee, leaving the amount of any excess collected to be 
 afterwards determined and refimded upon the filing by the 
 consignee of the claim for overcharge. On that point the 
 Commission said: "We do not think that a plan of billing 
 cotton at a proper estimated weight per bale should be 
 deemed unlawful when actual weights cannot be ascer- 
 tained without great inconvenience to the shipper or car- 
 rier, and when charges are promptly adjusted by the carrier 
 upon the basis of actual weights furnished by the consignee.'* 
 
 '" See Kibler v. Southern Ry., 64 some close relation to the actual 
 
 S. C. 242, 40 S. E. 556. weight. Where the estimate is about 
 
 For the transportation of locomo- one-third more than the actual 
 
 tives and tenders, charges should weight, it is manifest that there is 
 
 be assessed on a basis of a minimum something radically wrong with the 
 
 total haul of 75 mUes. In re Advance estimated weight. Crutchfield & W. 
 
 in Rates on Locomotives and Ten- v. F. E. C. Ry., 28 I. C. C. 274. 
 
 ders, 21 I. C. C. 252. »» See Suffern, Hunt & Co. v. 
 
 " Phelps & Co. v. Texas & P. Ry., Indiana, D. & W. Ry., 7 I. C. C. 
 
 I. C. C. Rep. 36. Rep. 255. 
 
 An estimated weight should bear Inaccuracies in weighing result 
 
 [4^6] 
 
Methods of Fixing Rates [ § 568 
 
 § 568. Charge for excess over minimtim. 
 
 It would seem obvious that where a minimum is fixed 
 it is not also a maximum; for it seems plain the company 
 may make a minimum charge and at the same time require 
 payment for any excess. Prima facie the system of charg- 
 ing by weight is more just than any other. It is the only 
 system whereby the charge is made proportionate to the 
 service rendered. StiU the point was raised in one pro- 
 ceeding before the Commission/' the facts being that a 
 practice had existed on the part of certain carriers of live 
 cattle to make a carload rate irrespective of weight, 
 leaving the shipper to load into the car as many cattle 
 as he pleased and was able to put into it. The carriers 
 substituted for this practice the rule that while naming 
 a carlot rate they prescribed a minimum weight for a 
 carload and then charged by the hundred pounds in pro- 
 portion to the carlot rate for any excess over the mini- 
 mum. This change was objected to by certain shippers, 
 but the Commission held that the new rule was more just 
 and reasonable than the practice it supplanted. The 
 course of its reasoning may be seen in the following ex- 
 tracts: "We are pointed to no such reasons in this case. 
 The charge by the 100 pounds is not only ■prima fade 
 most just, but it is in accord with the general practice of 
 the carriers in making rate sheets for other commodities. 
 The general rule is to charge by weight where weight can 
 be a proper measure, and when a carlot rate is prescribed, 
 to fix a minimum for the load to be taken as the carlot 
 and to charge by the 100 pounds for any excess, just 
 as is now done in respect to cattle by this carrier. The 
 cases must be very few in which it would be deemed 
 
 in the imposition of unreasonable 2 Int. Com. Rep. 599, 3 I. C. C. Rep. 
 
 charges and in discrimination be- 241. 
 
 tween shippers just as really as do Increase in minimum weight held 
 
 differences in the freight rate itself. not to be an advance in the rate. 
 
 In re Weighing of Freight by Carriers, In re Transportation of Wool, Hides, 
 
 28 I. C. C. 7. and Pelts, 23 I. C. C. R. 151. 
 
 '' Leonard v. Chicago & A. R. R., 
 
 [487] 
 
§ 569 ] Railroad Rate Regulation 
 
 reasonable or admissible to allow the shipper of general 
 merchandise to load up a car at discretion, without the 
 quantity being taken into account in determining the 
 carrier's charges." *" 
 
 § 669. All factors enter into a particular rate. 
 
 A particular rate thus is a resultant of many factors. 
 While there are certain economic forces which must be 
 recognized as playing a legitimate part in the establish- 
 ment of a particular rate, it is the office of the law to 
 interfere to prevent the working out of these forces in an 
 oppressive way. For experience has shown that the 
 regulation of rates cannot be safely left to natural proc- 
 esses, but the law must often be called upon to prevent 
 the distribution of the burden of rates in a disproportion- 
 ate manner. But in a conservative handling of the rate 
 problem, these economic conditions are taken into ac- 
 count and allowed some scope. Thus in one proceeding 
 in passing upon rates upon corn, the Commission said ^^ 
 that while rates on a particular commodity should not be 
 so low as to put a burden on other traffic it felt that there 
 was no better rule applicable to the matter iinder investi- 
 gation than that apphed by railroads themselves, Ln ac- 
 cordance with which rates are so adjusted as to seeing 
 the largest interchange of commodities. This rule is 
 approved by its frequent application in the movement of 
 western grain through the voluntary action of the roads, 
 on putting in force such a rate as to warrant its move- 
 ment if such a rate is fairly remunerative. As the Com- 
 mission has pointed out, classification is not an exact 
 science, nor may the rating accorded a particular article 
 be determined alone by the yardstick, the scales and the 
 
 *» Per Cooley, Commissioner, in of 4,000, held, in this case, to be un- 
 
 Leonard v. Chicago & A. R. R., supra, reasonable. Wright & Co. v. V. R. 
 
 The application of higher aggre- R., 25 I. C. C. 214. 
 gate charges upon a shipment of *^ Re Rates upon Food Products, 
 
 3,200 pounds than upon a shipment 3 Int. Com. Rep. 93. 
 
 [488] 
 
Methods of Fixing Rates [ § 570 
 
 dollar. The volume and desirability of the traffic, the 
 hazard of carriage, and the possibiUty or probability of 
 misrepresentation of the article are considerations of prime 
 importance in classification. At best it is but a grouping, 
 and when the approximation resulting from it is not found 
 to cause the exaction of an unreasonable or a discrimina- 
 tory charge it will not be disturbed.*^ 
 
 Topic B. Additional Charges for Special Service 
 
 § 670. General principles as to additional charges. 
 
 The entire service of the carrier in connection with a 
 single shipment being conceived of as a imit, it should 
 follow that only one charge may be made, covering the 
 entire unit of service. Ordinarily this is true.^' The rail- 
 road company cannot make a variety of different charges 
 for the facilities it uses and the servants it employs; for 
 instance, it would be absurd for it to make a block signal 
 charge or an engineer charge. It would seem to be the 
 duty of the railroad to equip itself fully for the service 
 it undertakes, and then to make a single rate to the ship- 
 per who wishes the transportation of certain goods to a 
 certain place. This ought to hold true of all usual services 
 which the carrier must render the shipper in the line of 
 its duty; but as to services outside its obhgation to the 
 shipper it may render a separate bill if it pleases. More 
 than this, there are, it must be admitted, certain extraor- 
 dinary services in special kinds of shipments which are 
 not required by shippers generally, and for which, it seems, 
 it is more convenient, if indeed not more just, to make a 
 separate charge. ^^ 
 
 ■"^ Forest City Freight Bureau v. off its own line, or outside of the mere 
 
 A. A. R. R., 18 I. C. C. 205. transportation. 
 
 " In Interstate Commerce Comm. " It was held in the 319}^ Tons 
 
 V. Stickney, 215 U. S. 98, 54 L. ed. of Coal, 14 Blatch. 453, that a raU- 
 
 501, 30 Sup. Ct. 66, it was held a road could not justify charging a 
 
 carrier may charge and receive com- shipper for shoveling at a coal tipple 
 
 pensation for service that it may more than the current rate for such 
 
 render, or procure to be rendered, service. 
 
 [489] 
 
§§571, 572 ] Railroad Rate Regulation 
 
 § 671. Propriety of making extra charges. 
 
 While in the United States ordinarily the single rate 
 includes all charges, upon the European continent freight 
 rates do not appear to be made in this way. There is, 
 first of all, a terminal charge, which applies to all traflfic, 
 to which a charge for movement is added. ^^ In England 
 at the present time a shipper may require the railroad 
 company to segregate the rate, determining what part of 
 it is fairly a terminal charge, and if he does not take ad- 
 vantage of the terminal facilities, he may demand under 
 some circumstances a reduction in the rate to that amount; 
 but, with us, the rate ordinarily includes the cost of de- 
 livery. It would seem to follow that extra charges should 
 not generally be made by the carrier for the use of its 
 facilities in delivering his property to the consignee; but 
 this is not altogether agreed.^* 
 
 § 572. Freight should cover the entire transportation. 
 
 By the general principle governing this matter also, the 
 freight rate should cover the entire carriage, taking the 
 goods up, transporting them to their destination and set- 
 ting them down. The general considerations which seem 
 to dictate this fundamental rule are well set forth in the 
 following quotation: ^^ "The freight demanded covers the 
 entire service of the carrier from depot to depot. It is in 
 law the compensation, not only for the actual carriage, 
 but also for the facilities furnished for loading and un- 
 loading. The service is a single one, and the compensation 
 is likewise single. The law will not permit the charge for 
 such single service to be divided. A carrier cannot make 
 up its bill of charges in items, — one for loading, one for 
 carriage, one for personal service of attendants, one for 
 delivery, etc. The freight is not an aggregate of separate 
 
 « See North Staffordshire Ry. Co. Counties R. Co., 2 C. B. (N. S.) 509. 
 
 V. Salt Union, Ltd., 10 R. & C. T. « Grosscup, J., in Union Trust 
 
 Cas. 161. Co. V. Atchison, T. & S. F. R. R., 
 
 « See also Beadell v. Eastern 64 Fed. 992. 
 
 [490] 
 
Methods of Fixing Rates [ § 573 
 
 charges, but a single charge. This policy of the law is not 
 because a particular shipper might not deal with the car- 
 rier as intelligently in the case of one method as in the 
 other, but because the pubUc is not so likely to deal in- 
 telligently with a series of items as with a single freight 
 rate. The shipper may be intelligent or unintelligent, 
 ignorant or educated, accustomed to business, or inexperi- 
 enced in such affairs, deliberate and careful, or hasty and 
 uninquiring. The service of the carrier is for one as well 
 as the other. A single charge presents to him at once the 
 whole problem. A series of charges might confuse him, 
 and leave uncertain what, in the end, the aggregate would 
 be." "« 
 
 § 573. No separate charge for a part of the transit. 
 
 In a recent proceeding Commissioner Lane *^ had occa- 
 sion in his opinion to discuss the extent to which the 
 obligation of transportation under the through rate goes 
 under American practice. The American railroad rate, he 
 said in substance, has always been recognized as covering 
 the full service which the carrier gives in furnishing the 
 car, a proper place at which to load it, the conveyance of 
 that loaded car, and its terminal delivery. The charge for 
 these various services is not in America broken up into its 
 component parts, and a charge imposed for each, as in 
 England. The rate, which it requires shall be published, 
 is a complete rate which includes not only the charge for 
 haul, but the charge for the use of the terminals at both 
 ends of the line. As matters now stand, determination of 
 these questions is left very much to the instructions of the 
 Commission. As Mr. Justice Lamar said comprehensively 
 in a recent case ^^ where the charges to be made for fruit 
 
 ■" See Southern Pacific Co. v. ■" Associated Jobbers of Los Ange- 
 
 Patterson, 7 Tex. Civ. App. 451, 27 les v. A., T. & S. F. Ry., 18 I. C. C. 
 
 S. W. 194, holding that an inter- 310; affirmed as Interstate Commerce 
 
 mediate bridge charge could not be Commission v. A., T. & S. F. Ry., 
 
 added to a through rate making it 234 U. S. 294, 34 Sup. Ct. 814. 
 
 in excess of rate fixed by law. '" Atchison, T. & S. F. Ry. Co. v. 
 
 [491] 
 
§ 574 ] Railroad Rate Regulation 
 
 moving under refrigeration were in question, what is a 
 proper rate on fruit in precooling shipments, or a fair 
 charge for hauling necessary ice or rendering other trans- 
 portation services, are all rate making matters committed 
 to the Commission. It may prescribe the form in which 
 schedules shall be prepared and arranged; and may ap- 
 prove tariffs stating that the single rate includes both the 
 line haul and accessorial services absorbed in the rate. 
 Conversely, it may prescribe a tariff fixing a through rate 
 which includes not only the haul of the fruit, but the haul 
 of the ice necessary to keep the fruit in condition. All 
 these are matters committed to the decision of the ad- 
 ministrative body, which, in each instance, is required to 
 fix reasonable rates and establish reasonable practices. 
 
 § 574. Charges for services during transportation. 
 
 It has been seen that in general the protection which the 
 railroad gives to goods in transit is an integral part of an 
 indivisible service, and it should therefore be all included 
 in the single rate made for the carriage. But there are 
 some extraordinary services required in the case of par- 
 ticular shipments which may so vary in each case that it 
 will be plainly justifiable, if not requisite, to make separate 
 charges for them." An illustration of this possibility 
 seems to be the charge commonly made separately for 
 icing at the initial point and re-icing during transit of a 
 refrigerator car containing a shipment of perishable freight. 
 For this is a service specially required for this class of 
 commodities, varying for different things which require 
 different degrees of refrigeration, definitely ascertainable so 
 that it can be charged against the particular shipment and 
 
 United States, 232 U. S. 199, 34 Northeastern Ry., 6 I. C. C. Rep. 
 
 Sup. Ct. 291, affirming Arlington 295; Cattle Raisers' Assoc, v. Fort 
 
 Heights Fruit Exch. v. A., T. & S. Worth & D. C. Ry., 7 I. C. C. Rep. 
 
 F. Ry., 23 I. C. C. 267. 295; Re Transportation of Fruit, 10 
 
 " See some of the original rul- I. C. C. Rep. 360, 10 I. C. C. Rep. 
 
 ings on such services as Terminal 83. Elevator Charges. — In re Allow- 
 
 charges. — Truck Farmers' Assoc, v. ances to Elevators, 10 I. C. C. Rep. 
 
 [492] 
 
Methods of Fixing Rates [ § 575 
 
 altogether separate therefore. ^^ At one time the status 
 of this charge was not clearly determined, although it 
 has always seemed plain that it is so necessary a part of 
 modern transportation that a railroad ought to see to it 
 that refrigeration is provided at a reasonable price. At all 
 events, in recent years there has been no doubt, with the 
 increase of the power of the Commission over services 
 intimately connected with transportation, of its jurisdic- 
 tion over such an auxiliary service as refrigeration.'^^ 
 The conditions under which a railroad may be compelled 
 to furnish facilities for transportation under refrigeration 
 are now well established as, for example, icing in transit; 
 and it seems clear that unless the railroad has established 
 a system of its own for such a preliminary service as 
 precooling the shippers should have allowed to them the 
 advantage resulting from such a service.^* It should be 
 added, as to all such charges, that where a carrier has a 
 right to include in the rate items for special charges, 
 whether for services furnished by the carrier himself or by 
 another under an arrangement with the carrier, the 
 compensation for such incidental services must be reason- 
 able. 
 
 § 575. Services after carriage is ended. 
 
 Common carriers by railroad in the United States have 
 never followed a general custom of permitting their freight 
 depots to be used for storage or general warehouse pur- 
 poses, or of allowing their cars to be retained in the posses- 
 sion of shippers or consignees beyond a reasonable time for 
 
 309. Demurrage charges. — Pennsyl- " See, also, Georgia Peach Growers' 
 
 vania Millers' State Assoc, v. Phila- Ass'n v. Atlantic Coast Line, 10 I. 
 
 delphia & R. R. R., 8 I. C. C. Rep. C. C. Rep. 255; Consolidated F. Co. 
 
 531. Storage charges. — Blackman v. v. So. Pac. Ry., 10 I. C. C. Rep. 
 
 Southern Ry., 10 I. C. C. Rep. 590. 
 
 352. 64 Note the course of the California 
 
 " Re Transportation of Fruit, 10 Refrigeration Cases, 19 I. C. C. 148, 
 
 I. C. C. Rep. 360. Accord Truck F. s. c, 20 I. C. C. 106, s. c, 23 I. C. C. 
 
 Asso. V. Northeastern Ry., 6 I. C. C. 267, s. c, 204 Fed. 647, s. c, 232 U. S. 
 
 Rep. 295. 199, 34 Sup. Ct. 291. 
 
 [493] 
 
§ 575 ] Railroad Rate Regulation 
 
 loading or unloading freight. ^^ It has been the common 
 understanding, based upon specific rules and regulations 
 issued by the carriers from time to time, that freight 
 depots, cars, and sidings of carriers can only be kept in 
 condition for the necessary reception and handling of 
 goods in the daily course of transportation business by 
 prompt forwarding of freights and quickly completing 
 delivery of transported goods to the consignees. Among 
 the rules or regulations commonly in force upon railways 
 and intended to effectuate the prompt shipment, carriage 
 and delivery of freights, are the following: (a) The loading 
 of cars furnished for shipments within a day or other 
 short specified time, under penalty of a demurrage charge 
 for detaining the cars, which is a substantial sum for 
 each additional day or fraction thereof; and a similar 
 regulation is applied to the unloading of cars by consignees 
 on team tracks or private sidings, (b) The removal of 
 goods from freight houses within a specified time, usually 
 24 or 48 hours, after notice of arrival to consignee, under 
 penalty of storage at the freight house or at pubUc ware- 
 house and collection of additional charges therefor.^* 
 In various ways these generally described regulations are 
 specifically stated in published freight classifications, car 
 service rules, rate schedules, special circulars, so-called 
 billing instructions, or bills of lading forms. They amount 
 to conditions imposed by the carriers upon the shipment, 
 
 '* The Commission has said that ^ History of the uniform demur- 
 
 a federal authority over demurrage rage code now generally in force, 
 
 and track storage charges in con- See AUan Wood S. & I. Co. v. Pa. 
 
 nection with interstate commerce Ry., 24 1. C. C. 27. 
 
 cannot be challenged, and is exclu- The placing of a car containing 
 
 sive. Wilson Produce Co. v. Penn. an order, notify shipment on a team 
 
 R. R., 14 I. C. C. 170. track and the giving of notice to 
 
 In the absence of discrimination, the consignee amounts for the time 
 
 Commission is as yet hesitating to being to a discharge of the carrier's 
 
 order that a trunk line shall absorb obligation in the matter of delivery, 
 
 the switching charge of a terminal Roden B. Grocery Co. v. A. G. S. 
 
 line. Mf'rs Ry. v. St. L., I. M. R. R., 21 I. C. C. 469. 
 & So. Ry., 28 I. C. C. 93. 
 
 [494] 
 
Methods of Fixing Rates [ § 576 
 
 transportation, and delivery of freight, which are not to be 
 disregarded by shippers or consignees without incurring 
 hability to additional expense. 
 
 § 576. Storage charges. 
 
 After transportation is at an end and the goods ready for 
 deUvery to the consignee the obhgation of the common 
 carrier ceases to a certain extent, and if the goods are left 
 upon its hands for a time by the owners it would seem 
 plain that having performed the services for which freight 
 was paid it, it can make additional charges for storage of 
 the goods with it. More than this, since to provide such 
 storage is no part of the carrier's duty as such, it is not 
 confined as it is in services during carriage to charge no 
 more than the usual price for warehousing. This was 
 pointed out to a complainant by the Interstate Commerce 
 Commission in the quotation which follows: " "We can- 
 not agree with the contention of the complainant in this 
 case that the defendants had no right to charge for the 
 storage of the freight in question more than the usual 
 public warehouse charge in force at Macon, Georgia, and 
 Columbia, South Carolina. A railroad freight depot and a 
 public storage warehouse are buildings whose business and 
 uses are wholly dissimilar. The former is planned and 
 built to accommodate the current business of the railroad 
 when expeditiously handled, and affords no facilities for 
 storage during long periods of time. The storage ware- 
 house is especially designed for storage purposes. The rail- 
 way company imposes storage charges, not for gain espe- 
 cially, but in order that it may be enabled to clear its depots 
 to the end that current business may not be blockaded." ** 
 
 " Blackman v. Southern Ry., 10 I. C. R. R., 22 I. C. C. 178; Fed- 
 
 I. C. C. Rep. 350. eral Sugar Refining Co. v. B. & O. 
 
 '' The Commission now has power R. R., 20 I. C. C. 200; Anderson, 
 
 to pass upon such incidental charges Clayton & Co. v. C, R. I. & P. Ry., 
 
 and to require that whatever allow- 18 I. C. C. 340; Brook-Rauch Mill 
 
 ances are made shall be just and & Elevator Co. v. M. P. Ry., 17 I. 
 
 reasonable. Suffern Grain Co. v. C. C. 158. 
 
 [495] 
 
§ 577 ] Railroad Rate Regulation 
 
 § 577. Demurrage costs. 
 
 Again, since the use of the cars at the end of the route 
 is no part of the carrier's public undertaking, a charge for 
 demurrage of cars is a charge distinct from the charge for 
 carriage, and it may therefore be made as a separate 
 charge. Indeed, so entirely distinct is it from the charge 
 for carriage that by the weight of authority no lien exists 
 to enforce it,^' unless of course there is an express contract 
 permitting such a lien. The extent of the limitations under 
 which raihoads by public announcements may make 
 charges for demurrage of cars is well discussed by the 
 Court of Appeals of Kentucky in the extract which fol- 
 lows: "Whether a charge of one dollar per day or fraction 
 thereof, made for detention of cars and use of track on 
 cars not imloaded within 48 hours after arrival, not in- 
 cluding Sundays and legal holidays, and on empty cars not 
 loaded within 48 hours after being placed, is a reasonable 
 charge, and the time fixed for the loading and unloading, 
 as required in the rule, is a reasonable time, are questions 
 of fact, and on these issues the preponderance of the proof 
 is clearly with the carriers. The rule must allow time 
 enough to meet all cases likely to arise, and that such is 
 the case here is abundantly shown by the testimony. That 
 the rate of one dollar per day is also reasonable is con- 
 clusively shown. It may be somewhat more than the 
 usual per cent on the first cost of a car, but this is not the 
 
 '° Chicago & N. W. Ry. v. Jenkins, Brown v. Grand Trunk By., 54 N. 
 
 103 111. 588; Cleveland, C, C. & S. H. 535. 
 
 L. Ry. V. Holden, 73 111. App. 582; Where a carrier provides in its 
 
 Burlington & M. R. R. R. v. Chicago tariff for reconsignment, without 
 
 Lumber Co., 15 Neb. 390, 19 N. W. any requirement for repayment of 
 
 451; Crommelin v. New York & H. freight or guaranty of the same, it 
 
 R. R., 10 Bosw. (N. Y.) 77; East may not lawfully charge demurrage 
 
 Tennessee V. & G. R. R. v. Hunt, for time during which it holds the 
 
 15 Lea (Tenn.), 261. Contra, Kan- shipment while parleying with its 
 
 sas Pac. Ry. v. McCann, 2 Wyo. 3; connections as to advancement of 
 
 Kentucky Wagon Manufacturing its freight charges. Beekman Lum- 
 
 Co. V. Ohio & M. Ry., 32 S. W. 595, ber Co. v. St. L. S. W. Ry., 14 I. C. 
 
 17 Ky. Law Rep. 726. See also C. 532. 
 
 [496] 
 
Methods of Fixing Rates [ § 578 
 
 proper criterion. A railroad company does not construct 
 cars for the purpose of storing property in them, and their 
 use for transportation involves the use of costly railway 
 tracks, and other expenditures. It may be true, as con- 
 tended, that the shipper was not consulted in framing 
 these rules. We think, however, if the rules are reason- 
 able, this fact does not vitiate them." 
 
 § 578. Terminal facilities usually included. 
 
 The usual thing, therefore, is to assume that all use of 
 terminal facilities in delivery of the property transported 
 is included in the rate made for the carriage. This was 
 squarely said by the Supreme Court of the United States 
 in a case *" where a railroad had entered into an arrange- 
 ment by which consignees of cattle could not get them 
 except at an established stockyard, the proprietors of 
 which charged yardage for the service. Mr. Justice 
 Harlan in delivering the opinion of the court used the 
 following language: "The carrier must at all times be in 
 proper condition both to receive from the shipper and to 
 deliver to the consignee, according to the nature of the 
 propertv to be transported, as well as to the necessities of 
 the respective localities in which it is received and de- 
 livered. A carrier of live stock has no more right to make 
 a special charge for merely receiving or merely delivering 
 such stock, in and through stockyards provided by itself, 
 in order that it may properly receive and load, or unload 
 and deliver, such stock, than a carrier of passengers may 
 make a special charge for the use of its passenger depot by 
 passengers when proceeding to or coming from its trains, 
 or than a carrier may charge the shipper for the use of its 
 general freight depot in merely delivering his goods for 
 shipment, or the consignee of such goods for its use in 
 merely receiving them there within a reasonable time after 
 they are unloaded from the cars. If the carrier may not 
 make such special charges in respect to stockyards which 
 
 6" Covington Stockyards Co. v. Keith, 139 U. S. 128, 11 Sup. Ct. 461. 
 32 [ 497 ] 
 
§ 579 ] Railroad Rate Regulation 
 
 itself owns, maintains, or controls, it cannot invest another 
 corporation or company with authority to impose burdens 
 of that kind upon shippers and consignees. The transpor- 
 tation of live stock begins with their delivery to the carrier 
 to be loaded upon its cars, and ends only after the stock is 
 unloaded and delivered, or offered to be delivered, to the 
 consignee, if to be found, at such place as admits of their 
 being safely taken into possession." *' 
 
 § 579. Terminals regarded as connections. 
 
 But despite these general principles, a scheme has been 
 worked out which has received the sanction of the Supreme 
 Court of the United States whereby the railroad may treat 
 stockyards which have their own railways as connecting 
 carriers and add their rates for their services to the rail- 
 road's rate for its service. In deciding the validity of this, 
 Mr. Justice White for the court said:^^ "As the right of 
 the defendant carriers to divide their rates and thus to 
 make a distinct charge from the point of shipment to 
 Chicago and a separate terminal charge for delivery to 
 the stockyards, a point beyond the lines of the respective 
 carriers, was conceded by the Commission and was upheld 
 by the Circuit Court of Appeals, no contention on this 
 subject arises. If, despite this concurrence of opinion, 
 controversy was presented on the subject, we see no reason 
 to doubt, under the facts of this case, the correctness of 
 the rule as to the right to divide the rate, admitted by the 
 Commission and announced by the court below. This is 
 especially the case in view of the sixth section of the act 
 to regulate commerce, wherein it is provided that the 
 schedules of rates to be filed by carriers shall 'state sepa- 
 
 «i See accord Union Trust Co. v. 192 U. S. 568, 48 L. ed. 565, 24 Sup. 
 
 Atchison, T. & S. F. R. R., 64 Fed. Ct. 339. 
 
 992; and Butchers' & D. S. Y. Co. «2 interstate Com. Comm. v. Chi- 
 
 V. LouisviUe & N. R. R., 67 Fed. 35. cago, B. & Q. R. R., 186 U. S. 320, 
 
 But see Walker v. Keenan, 73 Fed. 46 L. ed. 1182, 22 Sup. Ct. 824, af- 
 
 758, 19 C. C. A. 668; and Central firming 103 Fed. 249, 43 C. C. A. 
 
 S. Y. Co. V. Louisville & N. R. R., 209, and 98 Fed. 173. 
 
 [498] 
 
Methods of Fixing Rates [ § 580 
 
 rately the terminal charges and any rules or regulations 
 which could in anywise change, affect or determine any 
 part of the aggregate of the aforesaid rates and fares and 
 charges.' Whether the rule which we approve as applied 
 to the facts in this case would be applicable to terminal 
 services by a carrier on his own line which he was obliged 
 to perform as a necessary incident of his contract to carry, 
 and the performance of which was demanded of him by the 
 shipper, is a question which does not arise on this record, 
 and as to which we are, therefore, called upon to express no 
 opinion." ^' 
 
 Topic C. Bases of Distance Rates 
 
 § 580. Mileage rate tends to decrease inversely. 
 
 It is a familiar rule in the transportation of freight by 
 railroads and has become axioniatic that while the aggre- 
 gate charge is continually increasing the further the freight 
 is carried, yet the rate per ton per mile is constantly 
 growing less all the time. In consequence of the existence 
 of this rule the increase of the aggregate charge continues 
 to be less in proportion every hundred miles after the 
 first, arising out of the character and nature of the service 
 performed and the cost of service; and thus it is that staple 
 commodities and merchandise are enabled to bear the 
 charges of transportation from and to the most distant 
 portions of the coimtry.** The reason for this rule is that 
 the cost of railway transportation is made up of the expense 
 of the two terminals and the intermediate haul, and the 
 terminal expenses are the same whether the haul be long 
 or short. A few miles, or even a considerable number of 
 miles, of additional haul may in some instances of long dis- 
 
 '^ The issues in this case had been Cincinnati, N. O. & T. P. R. R., 2 
 
 repeatedly before the Interstate Com- Int. Com. Rep. 289, 2 I. C. C. Rep. 
 
 raerce Commission. See, especially, 375; Farrar v. East Tenn. V. & G. 
 
 Cattle R. A. of Texas v. Chicago, B. R. R., 1 Int. Com. Rep. 76, 1 1. C. C. 
 
 A Q. R. R., 10 1. C. C. Rep. 83; Same 480; Board of Trade of Troy v. 
 
 V. Same, 11 I. C. C. Rep. 277. Alabama Midland Ry., 6 I. C. C. 
 
 " New Orleans Cotton Exch. v. Rep. 1. 
 
 [4991 
 
§ 581 ] Raileoad Rate Regulation 
 
 tance transportation be practically of very little impor- 
 tance, and the aggregate rate therefore may be very little 
 affected by the additional mileage.*" As a result of this 
 rule of diminishing mileage, local rates on one road can- 
 not reasonably be compared with through rates on other 
 roads in the same region.** Generally speaking, the Com- 
 mission regards it as too well settled to need discussion 
 that as distance increases the rate per ton-mile decreases, 
 and merely because a greater distance point has a lower 
 rate per ton per mile than a shorter distance point dis- 
 crimination does not necessarily result.*'^ But while it is a 
 fundamental maxim that rate per ton-nule shall decrease 
 as distance increases, to disregard rule is not of necessity 
 a discrimination in the view of the Conamission.** And 
 it is a rule of well-nigh universal application that, as dis- 
 tance increases, the difference in distance becomes relatively 
 les& important.*^ 
 
 § 581. General standard of comparison the ton-mile. 
 
 If all conditions were equal, the rate of carriage would 
 naturally vary according to the distance carried, and would 
 be measured by a charge of so much per ton for each mile; 
 or, as it is generally expressed, by a ton-mile rate. This is 
 obviously a fair method of determining a rate where the 
 conditions are identical; and as a theoretical doctrine it is 
 well accepted that in the absence of other influences dis- 
 tance is a controlling element in determining a rate.™ 
 As a practical matter, however, other influences are never 
 
 ^^ McMorran v. Grand Trunk Ry., «« Boston Chamber of C. v. A., T. 
 
 2 Int. Com. Rep. 604, 607, 3 I. C. C. & S. F. Ry., 28 I. C. C. 230. 
 
 Rep. 252; Hilton Lumber Co. v. «' Black Mountain Coal Land Co. 
 
 Wilmington & M. R. R., 9 I. C. C. v. S. Ry., 15 I. C. C. 286. 
 
 Rep. 17. ™ Eau Claire Board of Trade v. 
 
 ^ Imperial Coal Co. v. Pittsburgh Chicago, M. & S. P. R. R., 4 Int. 
 
 & L. E. R. R., 2 Int. Cora. Rep. 436, Com. Rep. 65, 5 I. C. C. Rep. 265; 
 
 2 I. C. C. Rep. 618. Hill v. Nashville, C. & S. L. R. R., 
 
 " Elk C. & L. Co. V. B. & 0. R. R., 6 I. C. C. Rep. 343; Freight Bureau 
 
 22 I. C. C. 84. V. Cincinnati, N. O. & T. P. Ry., 
 
 7 I. C. C. Rep. 180. 
 
 [500] 
 
Methods of Fixing Rates [ § 582 
 
 absent; some factor exists in every case to modify the com- 
 parison and to prevent the apphcation of the ton-mile 
 rate. The establishment of a ton-mile rate as a standard 
 does indeed bring rates down to the narrowest point of 
 scrutiny, and for that purpose is valuable; but it excludes 
 consideration of other circumstances and conditions which 
 enter into the making of rates, no matter how compulsory 
 or imperious they may be, and it cannot, therefore, be 
 accepted as controlling in determining the reasonableness 
 of ratesJ^ It is, therefore, fundamental with the Com- 
 mission that relative unreasonableness is not proven merely 
 by comparisons of distances.^^ But why rates over for 
 the most part an identical route, and for almost exactly 
 the same distance, should differ materially requires some 
 explanation." Distance is an element in rate adjustments, 
 and, all other things being equal, it perhaps is a con- 
 trolling element; but it can hardly control where other 
 substantial considerations are materially different, as in 
 grain movements.'* Thus the average haul of lemons from 
 California produces one of the most important transportation 
 considerations entering into reasonableness of rate when 
 compared with average haul of oranges.'"* 
 
 § 582. Equal mileage rates impractical. 
 
 The effects of an absolutely equal mileage rate, which 
 must prevent its adoption as a practical system of charges, 
 were thus stated by a committee of the British Parlia- 
 ment:'* "(a) It would prevent railway companies from 
 
 " Gustin V. Atchison, T. & S. F. " Boney & Harper MilUng Co. v. 
 
 R. R., 8 I. C: C. Rep. 277; Board A. C. L. R. R., 28 I. C. C. 383. 
 
 of Railroad Com'rB v. Atchison, T. '' Bluefield Shippers Ass'n v. N. 
 
 & S. F. R. R., 8 I. C. C. Rep. 304; & W. Ry., 22 I. C. C. 519. 
 
 Business Men's Ass'n v. Chicago, ''* Omaha Grain Exchange v. C. & 
 
 S. P., M. & I. R. R., 2 Int. Com. N. W. Ry., 19 I. C. C. 424. 
 
 Rep. 41, 2 1. C. C. Rep. 52, 67; Manu- "Arlington Heights Fruit Ex- 
 
 facturers & J. Union v. Minneapolis change v. S. P. Co., 22 I. C. C. 
 
 & S. L. R. R., 3 Int. Com. Rep. 115, 149. 
 
 4 I. C. C. Rep. 79; Hilton Lumber ™ Stated in a note to Ransome v. 
 
 Co. V. Wilmington & W. R. R., 9 I. Eastern Counties Ry., 1 Eng. Ry. & 
 
 C. C. Rep. 17. Can. Traf. Cas. 63. 
 
 [501] 
 
§ 583 ] Railroad Rate Regulation 
 
 lowering their fares and rates so as to compete with traflSc 
 by sea, by canal, or by a shorter or otherwise cheaper 
 railway, and would thus deprive the pubhc of the benefit 
 of competition and the company of a legitimate source of 
 profit, (b) It would prevent railway companies from mak- 
 ing perfectly fair arrangements for carrying at a lower 
 rate than usual goods brought in large and constant 
 quantities, or for carrying for long distances at a lower 
 rate than for short distances, (c) It would compel a 
 company to carry for the same rate over a line which has 
 been very expensive in construction, or which, from 
 gradients or otherwise, is very expensive in working, at 
 the same rate at which it carries over less expensive lines." 
 In short, as our Commission equally well appreciates,"' 
 to impose equal mileage on the companies would be to 
 deprive the public of the benefit of much of the com- 
 petition which now exists or has existed, to raise the 
 charges on the pubhc in many cases where the companies 
 now find it to their interest to lower them, and to per- 
 petuate monopolies in carriage, trade, and manufacture 
 in favor of those routes and places which are nearest and 
 least expensive, where the varying charges of the company 
 now create competition. Therefore, to consider the yield 
 per ton per mile as wholly controlling in a particular case 
 is equivalent to the fixing of rates on the basis of distance 
 alone;^* And comparisons of distance are of but little 
 value in view of the well-known fact that the transporta- 
 tion conditions are very often wholly dissimilar.'' 
 
 § 583. Rates in rough proportion to distance normally. 
 
 Generally speaking, it is perhaps fair to assume that 
 distance should be controlling, where transportation con- 
 ditions are substantially similar.^" At all events, consider- 
 
 " Receivers & Shippers Ass'n of ™ Goldfield Consolidated Milling 
 
 Cincinnati v. C, N. O. & T. P. Ry., & Transportation Co. v. A., T. & S. 
 
 18 I. C. C. 440. F. Ry., 26 I. C. C. 567. 
 
 " District No. 1, Fort Smith, Ark., «» Commercial Club of Superior v. 
 
 V. St. L. & S. F. R. R., 26 1. C. C. 541. G. N. Ry., 24 I. C. C. 96. 
 
 [502] 
 
Methods of Fixing Rates [ § 583 
 
 able differences in distance must always be taken into 
 account; ^^ and if the difference in rates is out of proportion 
 to the distances involved the Commission will be influenced 
 by that fact.*^ It has, for instance, been noted with 
 approval by the Commission that local rates in C. F. A. 
 territory are based on distance.*^ But any approval of 
 distance rates depends upon the observance of the prin- 
 ciple that, when distance increases, the per ton-mile 
 revenue decreases.^^ And it follows that a mileage scale 
 ordinarily yields a much higher rate in proportion for a 
 short haul than for the long one.^^ Carriers, therefore, are 
 entitled to charge higher per mile rates for shorter hauls 
 than are proper to be charged for longer distances.^" 
 It is realized that a nearby point in a blanketed zone 
 pays more per ton per mile than a more distant point.*^ 
 And certainly a difference of 32 miles on hauls ranging 
 from 600 to 1,000 miles is negligible.** In one proceeding 
 recently the defendants contended that, so long as rates 
 from farther distant points were greater in the aggregate 
 than those from shorter distant points, no claim of dis- 
 crimination could arise; but with this the Commission did 
 not agree. Followed to its logical conclusion, it said, 
 carriers would have the right to completely nullify dis- 
 tance, and give shippers far removed from consuming 
 markets absolute control of prices in such markets, as 
 against shippers located nearer thereto.** But in another 
 case, decided about the same time, the Commission said 
 that, under the conditions involved, rate construction on 
 the per ton-mile basis would give to distance an exagger- 
 
 »> Union Tanning Co. v. S. Ry., v. C, B. & Q. R. R., 26 I. C. C. 
 
 26 1. C. C. 159. 638. 
 
 8« Sims V. M. & W. R. R. R., 26 ^ Metropolitan Paving Brick Co. 
 
 I. C. C. 275. V. A. A. R. R., 17 I. C. C. 197. 
 
 '5 Indianapolis Freight Bureau v. *' Schmidt & Sons v. M. C. R. R., 
 
 Chicago C, C, & St. L., 23 I. C. C. 19 I. C. C. 535. 
 
 195. «« Montezuma v. C. of G. Ry., 28 
 
 " Victor Mf g Co. v. S. Ry., 21 I. C. C. 280. 
 
 I. C. C. 222. " Elk Cement & Lime Co. v. B. 
 
 '' Sheridan Chamber of Commerce & O. R. R., 22 I. C. C. 84. 
 
 [5031 
 
§ 584 ] Railroad Rate Regulation 
 
 ated influence, resulting in relatively prohibitive rates 
 beyond certain distances, and the elimination of competi- 
 tion.* As the situation now stands, therefore, it is cer- 
 tainly true that carriers are not required to disregard differ- 
 ences in distance.*' And, indeed, in cases where such action 
 is clearly indicated, the Commission, in the absence of 
 compelling circumstances, will prescribe distance rates.'^ 
 
 § 584. Construction of distance rates. 
 
 As has just been pointed out, distance rates are now 
 not uncommonly recommended by Commission.'^ But it 
 will sometimes be found that the establishment of rates 
 on a mileage basis, instead of group adjustment, is not 
 warranted by commercial conditions.'^ And it is clear 
 enough that carriers are not required to disregard differ- 
 ence in distance.'* Certainly if by doing so they cause 
 unjust discrimination, they may not properly be required 
 to do so."' Percentage rates, so called, are based upon 
 distance; and the rates to the various percentage groups 
 are determined by short-lin^ mileage to the more important 
 points located within those groups.'^ In giving explicit 
 directions in a recent case, it was ordered that proportional 
 class rates should be graded back across the State on the 
 basis of a proportional scale of 55 cents between the 
 rivers.'* In another late case, it was pointed out that the 
 rates to a certain point were properly in projection on 
 the basis and method of computing the C. F. A. territory 
 percentage scale." Where the conditions are abnormal, 
 
 ™ Alabama Coal Operators Ass'n sion v. A., T. & S. F. Ry., 28 I. C. C. 
 
 V. S. Ry., 21 1. C. C. 230. 428. 
 »' R. R. Com. of Oregon v. S. P., '^ Railroad Commission of Oreg. 
 
 24 I. C. C. 273. V. S. P. Co., 24 I. C. C. 273. 
 
 '^ Pulp & Paper Mf'rs Traffic Ass'n " Commercial Club of Superior 
 
 V. C, M. & St. P. Ry., 27 I. C. C. 83. v. G. N. Ry., 24 I. C. C. 96. 
 
 93 Wharton Steel Co. v. D., L. & '* Springfield Commercial Ass'n 
 
 W. R. R., 25 I. C. C. 303. v. P. R. R., 28 I. C. C. 511. 
 
 " In re Advances on Live Stock, " Interior Iowa Cities Case, 28 
 
 25 I. C. C. 63. I. C. C. 64. 
 " Arizona Corporation Commis- 
 
 [504] 
 
Methods of Fixing Rates [ § 584 
 
 it is urged that the direct hne should not be used in 
 figuring comparative mileages, as for instance where trains 
 must be operated over heavy grades.' But the Commission 
 cannot properly allow an unreasonable rate by the direct 
 line, for the purpose of permitting the circuitous line to 
 engage in the business at a reasonable profit.^ Construc- 
 tive mileage is often allowed in computing distance, as two 
 miles for one in the case of water carriage.^ Dividing the 
 valuation placed upon the bridge by the assessed valua- 
 tion of defendant's Une in Iowa and Illinois, it appeared 
 in one case that such valuation represented the assessed 
 value of 663^ miles of line.* Flat differentials are some- 
 times established for one city over another or one route 
 in comparison with another.* And similarly arbitraries 
 for additional hauls are established without regard to 
 exact distances.^ Differentials are sometimes established 
 for different distances, but this system is falling into dis- 
 favor.' It will be noted that when rates conform to length 
 of haul they naturally increase as distance increases.* 
 For long-distance movement the rate should not, and or- 
 dinarily does not, increase for the last miles of that move- 
 ment by the amount of the local rate for that distance.' 
 The structure upon which rates are established tends to 
 shrink them with increasing distance, and they vanish 
 when the mileage on which the differential is based be- 
 comes inconsiderable in proportion to total mileage from 
 basing point to destination.'" 
 
 ' Elgin Commercial Club v. B. & « Omaha Grain Exchange v. C, 
 
 M. R. R., 28 I. C. C. 380. R. I. & P. Ry., 28 I. C. C. 
 
 ' Texarkana Freight Bureau v. 680. 
 
 St. L., I. M. & S. Ry., 28 I. C. C. ' Schmidt & Sons v. M. C. R. R., 
 
 569. 19 I. C. C. 535. 
 
 ' Grain Rates in C. F. A. Territory, » Topeka Traffic Ass'n v. A. & V. 
 
 28 I. C. C. 549. Ry., 27 I. C. C. 428. 
 
 * Southwestern Shippers' Traffic ' Appalachia Lumber Co. v. L. & 
 
 Ass'n V. A., T. & S. F. Ry., 24 1. C. C. N. R. R., 25 I. C. G. 193. 
 
 570. 10 Sheridan C. of C. v. C, B. & Q. 
 ' East Dubuque Supply Co. v. R. R., 28 I. C. C. 638. 
 
 1. C. R. R., 28 I. C. C. 425. 
 
 [505] 
 
§ 585 ] Railroad Rate Regulation 
 
 § 585. Bases of rate structure. 
 
 To consider yield per ton per mile as wholly controlling 
 is equivalent to fixing of rates on basis of distance alone, 
 which the Commission is not' ready to do." Moreover, 
 as traffic is moved, the ton per mile revenue usually de- 
 creases as distance increases. ^^ Differences in distance 
 are relatively inconsiderable when rates are constructed 
 and maintained upon the group system, and the subject- 
 matter is a heavy commodity like coal.^^ That rates are 
 below the continuous-mileage scale is not conclusive of 
 their unreasonableness." But rates are not infrequently 
 prescribed by the Commission on a mileage basis. ^^ And 
 graded rates recently have several times been substi- 
 tuted for blanket rates. ^* According to the rate policies 
 of the country now current the west bank of the Mis- 
 sissippi River is the west boundary of percentage zone 
 based upon the rate between Chicago and New York 
 as the 100 per cent territory; and all crossings, both upper 
 and lower, are imder percentage basis of rates with re- 
 spect to traffic to and from points east of Buffalo and 
 Pittsburgh. 1' In the exercise of its power to see that traffic 
 similarly circumstanced is handled without undue prefer- 
 ence, the Commission has gone so far as to hold that in 
 view of the well-established method of making rates in 
 C. F. A. territory, Detroit was entitled to 78 per cent of 
 the Chicago rate.^* The Mississippi River, as has been 
 seen, is the axis of rate adjustment. ^^ And to restore the 
 relation as between the gateways, ton-mile earnings on 
 
 " Board of Improvement v. St. v. O. R. R. & N. Co., 21 I. C. C. R. 
 
 L. & S. F. R. R., 26 I. C. C. 640. 
 
 541. 16 Re Wool Transportation, 23 I. 
 
 " Truck Growers Ass'n v. A. C. L. C. C. 151. 
 
 R. R., 20 I. C. C. R. 190. " Mississippi River Case, 28 I. C. 
 
 " Victor Mf'g Co. v. So. Ry., 27 C. 47. 
 
 I. C. C. 661. '8 Delray Salt Co. v. Penn. R. R., 
 
 " Middlesboro Board of Trade v. 18 I. C. C. 259. 
 
 L. & N. R. R., 27 I. C. C. 14. " Topeka Traffic Ass'n v. A. & V. 
 
 " Portland Chamber of Commerce Ry., 27 I. C. C. 428. 
 
 [506] 
 
Methods of Fixing Rates [ § 586 
 
 certain business may be in comparison with others low.^" 
 The construction of rates is pertinent in an inquiry only 
 in the opportunity afforded to the Commission more 
 minutely to examine the rate by consideration of its parts. ^^ 
 Where the spread between the local rates and the division 
 of through rates between the same points is large, the local 
 rates should be carefully scrutinized.^^ But further exami- 
 nation of the local rate fabric between certain points may 
 indicate that the local rates are reasonably aligned.^' 
 However, the fact that the rates were advanced to pre- 
 serve the relationship of rates, and not with the purpose 
 of securing more revenue, has been held not to justify 
 an advance.^* For further examples of rate structure see 
 the case holding that in banana rates in territory served 
 through that port, the axis is New Orleans.^* And note 
 also the recent case on the concentration of cotton by a 
 rate system designed to bring about that result. ^^ 
 
 § 586. Different cost of haulage. 
 
 A difference in the ton-mile may be justified by varying 
 cost of service on different parts of the line. Thus a higher 
 ton-mile rate is justified on a haul which includes heavy 
 grades. ^^ In one recent proceeding it was pointed out that 
 the general grade on Santa Fe from Gallup to Arizona 
 points is downward, Gallup being 6,498 feet above sea 
 level, and Phoenix, the southern terminus of the Prescott 
 & Phoenix branch, 1,200 above sea level and this would 
 justify differences in the rates in and out.^ The uniform 
 mileage rate may also be modified by the proximity of 
 
 ^ Ohio River Hay Rates, 27 I. C. ^6 Rates on Bananas from Gulf 
 
 C. 465. Ports, 30 I. C. C. 510. 
 
 21 Kansas v. A., T. & S. F. Ry., ^ Re Concentration of Cotton, 26 
 
 27 I. C. C. 673. I. C. C. 585. 
 
 " Railroad Commission of Nev. " Rice v. Western N. Y. & P. R. 
 
 V. N. C. O. Ry., 22 I. C. C. R. 205. R., 2 Int. Com. Rep. 319; Brock- 
 
 " Omaha Grain Exchange v. C, way v. Ulster & D. R. R., 8 I. C. C. 
 
 R. I. & P. Ry., 28 I. C. C. 680. Rep. 21. 
 
 -' Rates on Coal from Iowa to '^ Arizona Corp. Com. v. A., T. & 
 
 the Dakotas, 26 I. C. C. 144. S. F. Ry., 28 I. C. C. 428. 
 
 [507] 
 
§ 587 ] Railroad Rate Regulation 
 
 fuel to one portion of the road.^' In a peculiar case '" 
 decided some time ago, a rate on cattle in carload lots was 
 attacked as too high. The defendant's road had a heavy 
 grade on the western portion, but a very easy grade on the 
 eastern portion; only 30 cars could be handled on the 
 western portion, while on the eastern portion 60 cars could 
 be handled. The defendant claimed therefore that the 
 most economical method of carrying would be to ran 
 only half as many freight trains over the eastern portion; 
 but as cattle trains must go directly through, this could 
 not be done in the case of cattle. The Conamission said, 
 however, that the defendant seemed to claim that it ought 
 to be allowed to charge a higher rate because if it sends 
 this live stock through in proper time it cannot consolidate 
 its trains at Boyce; but it was a novel idea that the rate 
 should be advanced because the cost of .operation over a 
 part of the line is decreased.'^ 
 
 § 587. Divisions built through a difficult territory. 
 
 When a road or part of a road is built through a moun- 
 tainous country or other country which requires expensive 
 construction, the charge may be greater than on other 
 portions of the road or other roads where the cost of con- 
 struction per mile is less. So where different rates were 
 prescribed for railroads on the lower and on the upper 
 peninsula of Michigan, this difference was held proper.'^ 
 The distinction between the roads of the upper and lower 
 peninsulas was considered, in the absence of any showing 
 to the contrary, to be a reasonable one. The court took 
 judicial knowledge, for it is a matter of general knowledge, 
 that the cost of building and running railroads in the 
 upper peninsula is much greater than that in the lower, 
 
 2" New Orleans Cotton Exch. v. " Compare Bellsdyke Coal Co. v. 
 
 Illinois Cent. R. R., 2 Int. Com. North British Ry., 2 Ry. & Can. 
 
 Rep. 777, 3 I. C. C. Rep. 534. Tr. Cas. 105. 
 
 '" New Orleans Live Stock Ex- '^ Morse, J., in Wellman v. Chi- 
 
 change v. T. & P. R. R., 10 I. C. C. cago & G. T. Ry., 83 Mich. 592, 47 
 
 Rep. .327. N. W. 489. 
 
 [508] 
 
Methods of Fixing Rates [ § 588 
 
 owing to the marked physical difference between them 
 in the character and face of the country. And in many 
 cases the Commission has had occasion to point out that 
 it is not possible to compare the ton-mile charge in the 
 territory complained of with the charge in other territory, 
 where traffic is more dense and the cost of operation is 
 less.'' The real question in any such complaint is the 
 reasonableness of a particular rate on the particular line 
 between the particular points in question. In testing such 
 a rate the rates on the same or adjacent lines in the 
 immediate territory where the same conditions exist are 
 of much greater significance and afford a much more 
 accurate basis for the Commission's action.'* The fact 
 that tonnage out of the Twin Cities southward is heavier 
 than that of Sioux City northward was strongly urged in 
 justification of a lower rate, but under the circumstances 
 it was held that this fact would not suffice to overcome the 
 firmly established principle of applying equal rates for equal 
 distances under similar operating conditions, no substan- 
 tial dissimilarity in this respect having been shown. ''^ 
 
 § 588. Factors modifying distance rates. 
 
 It is well settled that, under the Act, competition may 
 be considered in fixing the particular rate; and, if it may 
 be considered under the Act, a fortiori it may influence the 
 rate at common law.'* This general problem is discussed 
 elsewhere; it is enough, therefore, to give at this place one 
 of the important limitations upon making a through rate 
 less than a local rate. An intermediate local rate should 
 never exceed the through rate to the terminus of the line 
 plus the local rate back to the intermediate point. '^ A 
 carrier may not properly or lawfully engage in transporta- 
 tion at a rate less than the cost of the service, since to do 
 
 »' Acme Cement Plaster Co. v. C. & N. W. Ry., 22 I. C. C. 112. 
 C. G. Ry., 18 I. C. C. 19. "^ See Texas & P. Ry. v. I. C. C, 
 
 " Dallas Freight Bureau v. G. C. 162 U. S. 197, 40 L. ed. 940, 16 Sup. 
 
 & S. F. Ry., 12 I. C. C. 223. Ct. 666. 
 
 « Sioux City Commercial Club v. " Martin v. So. P., 2 I. C. C. 1. 
 
 [509] 
 
§ 588 ] Railroad Rate Regulation 
 
 so would place an improper and unlawful burden upon 
 other traffic.^* The future may compel greater recognition 
 of distance in the making of rates, but the present business 
 structure was not developed on that principle; and if a 
 change is to be made, such change perforce must be a 
 gradual one.^^ Competitive conditions, when shown to 
 exist, may justify the fixing of rates, which are not in line 
 with the rates to points where such competition does not 
 obtain.*" Taking the country as a whole, it is still true 
 that rates are not made primarily upon considerations of 
 mileage, but chiefly in view of competitive forces focused 
 at certain points where the paths of commerce and the 
 routes of transportation meet.*^ Competition in commodi- 
 ties alone is not a circumstance that will entitle a selling 
 point to have an already low rate made stUl lower to 
 equal one at a more distant point, which was made to 
 meet competition of carriers and of rates as well as of 
 markets and products.*^ The Commission should not, 
 however, be understood as holding that a raih-oad must 
 under all circumstances meet the rate of its competitor.*^ 
 Carriers cannot be compelled, as a matter of law, to meet 
 water competition; they do it of their own volition, or 
 whenever the same is potent enough to compel them to do 
 so in order to secure the traffic; in each instance the 
 carrier determines for itself whether such water competi- 
 tion has sufficient influence on the traffic to make it reduce 
 its rates.** But, while it is proper to consider the effect of 
 a decision upon the general rate adjustment applying over 
 a wide scope of territory, rates which discriminate against 
 one locality on a particular road cannot be justified on the 
 
 '* Burnham, Hanna, Munger Co. *' Columbia Chamber of Commerce 
 
 V. C, R. I. & P. Ry., 14 I. C. C. v. S. Ry., 28 I. C. C. 339. 
 
 299. ■ " Bovaird Supply Co. v. A., T. & 
 
 » Boileau v. P. & L. E. R. R., 24 S. F. Ry., 13 I. C. C. 56. 
 
 I. C. C. 129. ■" North Bros. v. C, M. & St. P. 
 
 ™ Rainey & Rogers v. St. L. & Ry., 15 I. C. C. 70. 
 
 S. F. R. R., 18 I. C. C. 88. " Bainbridge Board of Trade v. 
 
 L. H. & St. L. Ry., 15 I. C. C. 586. 
 
 [510] 
 
Methods of Fixing Rates [ § 589 
 
 ground that they are part of a general scheme, adopted by 
 several roads entering the same territory and hauling from 
 different and unassociated districts/^ 
 
 § 589. Comparison of through rates and local rates. 
 
 A through rate may properly be less than the sum of 
 the locals, although the cost of the service is the same, if 
 the lower through rate is forced by competition which does 
 not affect the local rates. ^^ This is the reason that a 
 continuous haul cannot ordinarily be as expensive as com- 
 bined local hauls with their additional terminal services.*^ 
 A carrier may even accept less for through service than a 
 reasonable local rate.*' In general, joint through rates are 
 lower than the sum of the locals between two points; and 
 obviously there can very seldom be any transportation 
 reason why such should not be the case.*' A joint through 
 rate in excess of combination is, therefore, presumed un- 
 reasonable.^" And a carrier cannot attempt to recoup 
 itself by putting high locals on goods having low through 
 in-boimd rates." Higher rates may be made to points on a 
 branch line, with proper limitations, than to main-line 
 points. ^^ There is a material difference between a reason- 
 able amount to be added for additional mileage on a 
 straight-away long haul, and a reasonable allowance to be 
 added for an out-of-line haul which involves two and 
 probably three terminal services.^' The fact that rates on 
 other parts of the carrier's system are forced down by 
 competition to a very low point, does not justify a higher 
 rate to a point located on a branch line, since such point is 
 
 « Black Mountain Coal Land Co. *" Lull Carriage Co v. C. K. & S. 
 
 V. S. Ry, 15 L C. C. 286. Ry., 19 I. C. C. 15, 16. 
 
 « R. R. Com. of Nev. v. N. C. O. " R. R. Comm. of Louisiana v. 
 
 Ry., 22 I. C. C. 205. St. Louis S. W., 23 I. C. C. 31. 
 
 " Kansas-Iowa Brick Rates, 28 *^ Idaho Commercial Clubs v. O. 
 
 I. C. C. 285. S. L. R. R., 18 I. C. C. 562. 
 
 *' Boston Chamber of Commerce ^' Kansas City Transportation Bu- 
 
 V. A., T. & S. F. Ry., 28 I. C. C. 230. reau v. A,, T. & S. F. Ry., 15 I. C. C. 
 
 *' Laning-Harris Coal & Grain 491. 
 Co. V. Missouri P. R., 11 I. C. C. 154. 
 
 [511] 
 
§ 590 ] Railroad Rate Regulation 
 
 entitled to the reasonable rate which its location and other 
 advantages dictate without taking into account conditions 
 which bring about lower rates to other points." While 
 carriers are justified within proper limitations in making 
 somewhat higher rates to branch-line points than to main- 
 line points, where the same rate is applied to all points 
 both on the main and branch lines, it is to be tested as a 
 whole. ^^ 
 
 § 690. Carriage in opposite directions. 
 
 There is no reason for requiring the same charge for 
 carriage between the same points in opposite directions.'^' 
 Various factors which properly enter into the rate may be 
 different in the two cases. In a case ^' where a higher 
 rate was charged for the eastward than for the westward 
 carriage, the Commission said: "The claim is, in substance, 
 that the rate of $350 eastward is unreasonable in view of 
 the fact that the rate over the same line and between the 
 same points westward is only $263. This fact alone is 
 relied upon to support the charge. The two rates have no 
 necessary connection or relation, and the fact that a rate 
 over a road or line in one direction is materially higher 
 than the rate on the same class of traffic over the same 
 road or line and between the same points in the opposite 
 direction does not, as in case of hauls over the same line 
 in the same direction, establish prima facie the unreason- 
 ableness of the higher rate." On the other hand, where 
 in the direction of lighter traffic a railroad is carrying 
 many empty cars, it will be justified in lowering the 
 rate in order to fill the cars. "When the preponderance of 
 freight is so largely in one direction that the supply of 
 empty cars exceeds the demand for return loads at full 
 
 '* Board of Trade of Winston- " Macloon v. Boston & M. R. 
 
 Salem v. N. & W. Ry., 16 I. C. C. R., 9 I. C. C. Rep. 642. 
 12. " Duncan v. Atchison, T. & S. F. 
 
 " Idaho Commercial Clubs v. R. R., 6 Int. Com. Rep. 85, 102, 4 I. 
 
 O. S. L. R. R., 18 I. C. C. 562. C. C. 385. 
 
 [512] 
 
Methods of Fixing Rates [ § 591 
 
 rates, it is not unlawful to encourage business by affording 
 transportation on less profitable terms." ^* The fact that 
 a rate in one direction is lower than the rate in the oppo- 
 site direction is not of itself a justification for advancing 
 the former rate.^' 
 
 § 591. Passenger fares generally on mileage basis. 
 
 No such principles generally prevail in establishing 
 passenger fares. These are usually made upon a mileage 
 basis, and do not decrease inversely with the distance as in 
 freight rates. This was brought out in a remarkable case 
 before the Interstate Commerce Commission,^" where the 
 through interstate rate was found to be more than the 
 combined local intrastate rates. The Commission ex- 
 pressed no great disapprobation of this, saying simply: 
 "From the local passenger tariff and distance table in 
 effect on the Charleston & Savannah Railway on and 
 after September 1, 1896, it appears that interstate passen- 
 ger fares between Savannah and South Carolina points 
 commence with 3 cents per mile to or from Sand Island, 
 S. C, 20 miles from Savannah, and with slight variations 
 increase with distance up to a mileage rate of 3.86 cents 
 to Fetteressa, 105 miles from Savannah and 10 miles from 
 Charleston. The mileage rate between Savannah and 
 Charleston, as stated above, is 3.826 cents. While in 
 freight service the general rule is that the rate per ton 
 per mile should decrease as distance increases, in pas- 
 senger service a single mileage rate for all distances is 
 often found to prevail. It is unusual to find either 
 freight or passenger rates per mile increase with dis- 
 tance." «' 
 
 =■* James v. East Tennessee V. & & Savannah Ry., 7 I. C. C. Rep. 601. 
 
 G. R. R., 2 Int Com. Rep. 609, 3 " Through passenger business can 
 
 I. C. C. Rep. 225. be carried at lower rates than strictly 
 
 '' In re Advances on Potatoes, 25 local business. Commercial Club 
 
 I. C. C. 247. . of Salt Lake City v. A., T. & S. F. 
 
 «> Savannah Bureau v. Charleston Ry., 19 I. C. C. R. 218. 
 
 33 [ 513 ] 
 
§§ 592, 593 ] Railroad Rate Regulation 
 
 Topic D. Grouping Stations and Basing Points 
 
 § 592. The system of grouping. 
 
 The railroad might make a separate rate for each station 
 on its line, so that a charge must be established for each 
 possible combination of two termiai. This is the natm-al 
 rule, and not an unreasonable one. But for various rea- 
 sons it has become usual to group together for the purpose 
 of fixing rates a number of neighboring stations, and make 
 a uniform charge for any station in the group. The most 
 extensive blanketing of rates known applies in the trans- 
 continental tariffs, the rates, for instance, being found in 
 one proceeding to be the same to the Pacific Coast from 
 all points east of Colorado Common Point territory.*^ 
 And the Commission has said that it is by no means 
 certain that postage-stamp rates, as applied to the dis- 
 tribution of the products of the Pacific Coast States, are 
 not upon the whole for the general public good.^' It 
 should be noted also that distance is largely disregarded in 
 so far as the North Atlantic port differential adjustments 
 are concerned.^* So common has this practice become, 
 that it is often looked upon as natural; and one city has 
 sometimes demanded as a right that it should be grouped 
 with a neighboring city. For iastance, Omaha applied to 
 the Commission to be grouped with Council Bluffs (which 
 is situated at the other end of a long and expensive bridge 
 over the Missouri River), and to be given identical rates 
 from Iowa points; but the Commission held that there was 
 no legal right to have stations grouped, and that a differ- 
 ence in rate was justified.*^ 
 
 § 693. Distances considered in grouping. 
 
 All points must be considered in determining reasonable- 
 
 "2 Arlington Heights Fruit Ex- "Chamber of Commerce of New 
 
 change v. S. P. Co., 22 I. C. C. R. York v. N. Y. C. & H. R. R. R., 24 I. 
 
 149. C. C. 55. 
 
 *' Indianapolis Freight Bureau v. "' Commercial Club of Omaha v. 
 
 C, C, C. & St. L. Ry., 23 I. C. C. R. Chicago & N. W. Ry., 7 I. C. C. Rep. 
 
 195. 386. 
 
 [514] 
 
Methods of Fixing Rates [ § 593 
 
 ness of group rates.*" The propriety of a grouping must in 
 any case depend on the pecuUar facts and conditions upon 
 which it is predicated.*^ Any grouping, whether of rates, 
 locaUties, or commodities must not be xmreasonable or 
 result in unjust discrimination."* In every zone rate, the 
 near-by point pays a proportionally higher rate than a 
 more distant point."' Distance is an important, but not 
 necessarily a controlling factor, in rate questions; whether 
 or not it is conclusive depends upon the facts in the case.'" 
 It does not necessarily follow, that a carrier not competing 
 for traffic in this way thereby subjects itself to an order 
 compelling it to do so.^' If strictly distance rates were 
 applied to grain moving from points of origin, it is ap- 
 parent that at a certain distance the rate would be pro- 
 hibitive.^^ Length of haul and other transportation factors 
 have a more or less definite relation to the rate that a 
 carrier may reasonably demand for a transportation serv- 
 ice.''' But it has been held that the voluntary extension 
 of reasonable rates to points much more distant is not of 
 itself unlawful.'''' And, although it is often said that dis- 
 tance is always a factor in determining reasonableness of 
 rate, this is always qualified by saying that distance is not 
 necessarily controlling.''' It seems to be agreed that larger 
 blankets are justified for longer distances than would 
 be permited where shorter distances are involved.''" When 
 carriers are given permission to change from the mileage 
 
 «« BeaU V. W. A. & M. V. Ry., 20 reau v. A., T. & S. F. Ry., 16 I. C. C. 
 
 I. C. C. 406. 195. 
 
 " 26 I. C. C. 515. " Memphis Cotton Oil Co. v. I. 
 
 «» Sun. Co. V. I. S. R. R. Co., 22 C. R. R., 17 I. C. C. 313. 
 
 I. C. C. 194. -* Northwest Leather Co. v. O. I. 
 
 «» Schmidt & Sons v. M. C. R. R., R., 21 I. C. C. 66. 
 
 19 I. C. C. 535. 's Corporation Commission of N. 
 
 '» Muskogee Traffic Bureau v. A., C. v. N. & W. Ry., 19 I. C. C. R. 
 
 T. & S. F. Ry., 17 I. C. C. 169. 303. 
 
 " Hydraulic Press Brick Co. v. ™ Mutual Rice Trade & Develop- 
 
 St. L. & S. F. R. R., 13 I. C. C. ment Ass'n v. I. & G. N. R. R., 23 
 
 342. I. C. C. 219. 
 
 " Kansas City Transportation Bu- 
 
 [515] 
 
§ 694 ] Railroad Rate Regulation 
 
 basis to the group basis it is usually insisted that the short 
 hauls shall be properly provided for." 
 
 § 594. Grouping must be reasonable. 
 
 While grouping is permissible in a proper case, it must 
 nevertheless be reasonable; the Commission cannot ap- 
 prove a blanket rate which imposes upon any point an 
 unreasonable burden.'* Carriers have followed the principle 
 that whenever distance between certain points constitutes 
 a relatively small percentage of distance between any of 
 those points and ultimate market, such originating points 
 should be grouped for rate-making purposes.^' Where 
 grouping is reasonably done, the shorter distances to the 
 markets may be determined by the average distances 
 from the points reached by two or more systems; and where 
 there is no such point in a group the distance should be 
 computed from a point centrally located.*" In stating 
 rates between remote sections, territorial groups of con- 
 siderable extent must be employed; and differences in 
 distance of several hundred miles are frequently disre- 
 garded under the blanket plan of rate making.*^ The 
 boundary line to mark the limits of application of blankets 
 rates may not be so artificially drawn as to subject ship- 
 pers immediately outside the favored zone to unjust 
 discrimination.*^ Even when grouping is resorted to in 
 order to preserve competition in commodities, as where 
 railroads entering New York grouped the stations which 
 supplied the city with milk, it was held that it would be 
 unreasonable to make a uniform rate for all milk stations 
 to New York, but reasonable to establish zones at proper 
 intervals by which all milk from stations up to a certain 
 distance, say 40 miles, should pay the same rate, then all 
 
 " In re Advances on Cottonseed ^ Superior Commercial Club v. 
 
 Products, 25 I. C. C. 237. G. N. Ry., 25 I. C. C. 342. 
 
 '* Switzer Lumber Co. v. K. C. S. " In re Advances on Barley, 24 
 
 Ry., 25 I. C. C. 611. I. C. C. 664. 
 
 " Rates on News Print Paper from ''' Southern Furniture Mf rs Ass'n 
 
 Sault Ste. Marie, Ont., 26 I. C. C. 13. v. S. Ry., 25 I. C. C. 379. 
 
 [516] 
 
Methods of Fixing Rates [ § 595 
 
 milk originating in the zone from 40 miles to 60 miles a 
 slightly higher rate, and so on.*' The Commission has 
 often approved blanket rates covering wide areas, but 
 always with the reservation either that no one was ob- 
 jecting, or that a substantial reason for that adjustment 
 had been shown.*^ And in a recent proceeding the blanket 
 system of making rates on wool from the west to eastern 
 points was ordered broken up and graded rates established.*^ 
 
 § 595. Testing reasonableness of grouping. 
 
 Whether or not the grouping of points of origin or points 
 of destination constitutes undue or unjust discrimination, 
 must be determined from the facts in each case.*^ In all 
 cases of blanket or group rates, there is of necessity more 
 or less disregard of distance, and varying degrees of in- 
 equality, but such inequalities are not of necessity un- 
 reasonable or unjust, when the situation is viewed from 
 every standpoint, taking into account all interests.*^ Be- 
 cause the revenue per ton per mile yielded by rates from 
 farther distant points is less than that yielded by rates from 
 a shorter distant point, it does not necessarily follow that 
 the latter is subjected to unjust discrimination.** The 
 unreasonableness of a rate cannot be established by com- 
 paring it with the rate to a point situated at the farther 
 edge of territory taking a blanket rate, when the purpose 
 of the comparison is to show the rates charged with re- 
 spect to distances involved are unfair.*' It is inevitable 
 that in every blanket or zone rate, the near-by point pays 
 a proportionally higher rate than the more distant point.'" 
 In comparison with, or in passing upon the reasonable- 
 
 " Mills Producers Ass'n v. D., L. ^ Chicago Lumber & Coal Co. v. 
 
 & W. R. R., 7 I. C. C. 92. T, S. Ry., 16 I. C. C. 323. 
 
 " Transportation Bureau of Wi- ** Indianapolis Freight Bureau v. 
 
 Chita V. St. L. & S. F. R. R., 23 I. C. C, C, C. & St. L. Ry., 15 I. C. C. 
 
 C. 679. 504. 
 
 "' In re Transportation of Wool, *' Bash Fertilizer Co. v. Wabash 
 
 Hides and Pelts, 23 I. C. C. R. 151. R. R., 18 I. C. C. 522. 
 
 «« Muskogee Traffic Bureau v. ™ Schmidt & Sons v. M. C. R. R., 
 
 A., T. & S. F. Rv., 17 I. C. C. 169. 19 I. C. C. R. 535. 
 
 [517] 
 
§ 596 ] Raileoad Rate Regulation 
 
 ness of, a blanket rate neither extreme of the group should 
 be considered, but rather a fair average." As long as 
 rates are made under the group system, the distance 
 theory must be modijSed.^^ In passing upon reasonableness 
 of a blanket rate, the rate to the nearest point must be offset 
 against that to the more distant point.^' Extravagant 
 rates ought not to be imposed upon 90 per cent of traffic 
 in group upon pretext that more favorable rate is granted 
 to other 10 per cent."* Under its enlarged powers the 
 Commission has held a blanket adjustment under which 
 rates from the east are higher to Spokane than to Pacific 
 Coast terminals held to be violation of the Act, so far as 
 they exceed certain zone rates prescribed by the Com- 
 mission."^ But no reason was apparent to the Commission 
 in a recent proceeding for disturbing blanket arrangement 
 under which rates on hides from California to Michigan 
 are as high as rates from California to the Atlantic sea- 
 board."" 
 
 § 696. Uniform rate to a group of stations. 
 
 Although it may be conceded that a sUghtly greater 
 profit will be made on a traffic passing to the nearest 
 grouped point than to the furthest point, the difference, 
 if the stations are properly grouped, will not be sufficient 
 to make the arrangement illegal. It is clear that the group- 
 ing must be so managed that the rate to the nearest point 
 will not be unreasonable in itself, and the rate to the 
 furthest point will be remunerative. Grouping is often 
 justified in order to preserve competition in commodities 
 carried to market, where a strict mileage rate would give 
 
 " Oregon & Washington Lumber '< Southwestern Missouri Millers' 
 
 M'frs Co. V. S. P. Co., 21 L C. C. R. Club v. M., K. & T. Ry., 22 I. C. C. 
 
 389. R. 422. 
 
 '- McCloud River Lumber Co. v. " City of Spokane v. N P Ry 
 
 S. P. Co., 24 I. C. C. 89. 21 1. C. C. R. 400. 
 
 " Commercial Club of Salt Lake " Northwestern Leather Co v 
 
 City V. A., T. & S. F. Ry., 19 I. C. C. R. R. & N. Co., 21 I. C. C. R. 
 
 R. 218. 66. 
 
 [518] 
 
Methods of Fixing Rates [ § 597 
 
 too great an advantage to the commodities produced at 
 the nearest point to the market. Upon broad grounds of 
 public poUcy, this is permitted in order to best develop 
 the resources of the country. Upon these principles it 
 was held reasonable to group all the mines in a certain 
 locality, such as the Lehigh anthracite coal region.^^ 
 These general principles are well set forth in the quotation 
 which follows.'* "It is said by way of argument that 
 there is an inherent injustice in carrying the product 
 of one locality at a less rate than that of another which 
 lies nearer to the common market, because in that case 
 the nearer shipper pays a part of the expense of trans- 
 porting the freight of his rival a longer distance upon the 
 same train. This result does not necessarily follow, how- 
 ever. In cases where the rate is sufficiently high to afford 
 a reasonable profit upon each portion of the traffic by 
 itself, there are no losses upon the longer portion of the 
 route to be made up by overcharges upon the remainder." 
 
 § 697. Commutation rates for suburban passengers. 
 
 In the case of fares for passengers the system of grouping 
 finds its scope in the rates given commuters, and the prin- 
 ciples under discussion apply well to passenger fares as to 
 freight rates. The Act itself, by express proviso, permits 
 the issuance of commutation tickets. It cannot be said, 
 therefore, that such rates are discriminatory in themselves, 
 either against persons paying regular fares, or places out- 
 side the territory covered by such a system of rates.'* 
 Ordinarily the price of commutation tickets, and the con- 
 ditions upon which they are sold, as well as the distance 
 to which they shall extend, are matters within the dis- 
 cretion of the carrier. But here, as elsewhere, the final 
 word is with the Commission, as to all matters connected 
 
 " Coxe V. Lehigh Valley R. R., 3 York, L. E. & W. R. R., 2 Int. Com. 
 Int. Com. Rep. 460, 4 I. C. C. Rep. Rep. 162, 2 I. C. C. Rep. 272. 
 535. » Sprigg v. Baltimore & Ohio R. 
 
 « Walker, Com., in HoweU v. New R., 8 I. C. C. 443; see also Beall v. 
 
 W. A. & M. V. Ry., 20 I. C. C. 406. 
 
 [519] 
 
§ 598 ] Railroad Rate Regulation 
 
 with these charges, as in the case of other fares. Thus, 
 the Commission has been deciding all along that the system 
 of commutation fares is not in itself unduly prejudicial.^ 
 The most important action of the Commission in regard 
 to this matter has been its recent course in relation to the 
 interstate commutation rates in the region surrounding the 
 city of New York. In the earlier case the fares for New 
 Jersey commuters were very fully treated.^ And in the 
 later case it was held by that comparison with other fares 
 the commutation fares of the New York, New Haven & 
 Hartford from points in Connecticut into New York 
 City were unreasonable, except as to certain stations.^ 
 
 § 598. How basing points are established. 
 
 Instead of grouping stations about a competitive point 
 and charging a uniform rate, it is more customary now to 
 fix a certain rate to the competitive point (called the bas- 
 ing point), and to fix rates to other points in the group 
 by adding in each case to the basing rate the local rate 
 from that point to the station in question. Such a com- 
 bination rate is on the face of it unreasonable, and it will 
 be closely scrutinized. The competitive rate to the basing 
 point plus the local is at any rate the extreme limit of 
 charge.* A basing point was in a recent proceeding before 
 the Commission described by defendants' witness as "where 
 there is considerable freight." '' The fact that a city is a 
 Mississippi River gateway considered in determining the 
 reasonableness of its rates.* Where the establishment of a 
 
 1 Boyle V. G. F. & O. D. R. R., 20 < TrammeU v. Clyde S. S. Co., 4 
 
 1. C. C. 232; see also Byzer v. W. Va. Int. Com. Rep. 120, 5 I. C. C. 324; 
 
 Ry., 20 I. C. C. 406. Cordele Machine Shop v. Louisville 
 
 ^ Commutation Rate Case, 21 L & N. R. R., 6 1. C. C. 361; Gustin v. 
 
 C. C. 428; see also Suburban Rate Atchison, T. & S. F. R. R., 8 L C. C. 
 
 Cases, 26 1. C. C. 398. 277; Board of Trade v. Central of 
 
 3 Commutation Rate Case, 27 L Ga. Ry., 8 L C. C. Rep. 142. 
 
 C. C. 549; this proceeding has no * Arkansas Fertilizer Co. v. St. L., 
 
 relation to similar proceedings in 1. M. & S. Ry., 25 I. C. C. 266. 
 
 the interstate rates. ^ City of Montezuma v. C. of G. 
 
 Ry., 28 I. C. C. 280. 
 
 [520] 
 
Methods of Fixing Rates [ § "jOS 
 
 basing point system is justified by the circumstances 
 affecting the rating of traffic at the point in question, 
 an additional charge may properly be made for a back 
 haulJ According to the present doctrines of the Commis- 
 sion it does not follow that joint through rates over long 
 distance to local or non-competitive points shall now be 
 made by adding to basing point rates either the full locals 
 or high differentials; on the contrary in making joint 
 through rates on such traflac it is insisted that differentials 
 or arbitraries above rates to basing points should bear 
 some reasonable relation to total distances involved.^ It 
 will be noted, therefore, that, under the basing point 
 system, the key to the making of the rate is "the rate 
 breaking point," which will necessarily command the 
 jobbing business of the tributary territory.' As the law 
 stands, therefore, a rate to and from an intermediate 
 point, higher by the local than the in-bound rate to a 
 trade center, will not necessarily be condemned."* An 
 illustration of the working of the basing point system 
 may be seen in a recent proceeding when it appeared that 
 the rate to Douglas from the west is made up of the rate 
 to Brunswick plus the rate from Brunswick back to Doug- 
 las, these rates being determined by competition of water 
 lines from the eastern ports and rail lines through the 
 Virginia gateways. '^ Likewise it transpired in another 
 proceeding that class and commodity rates to Texarkana 
 from certain territory are made by adding differentials to 
 the rates from St. Louis or Kansas City, which are taken 
 as basing rates. ^^ The Ohio River crossings are basing 
 points for rates to points north, and reduction in rates 
 at crossings will cause change in joint rates to beyond.'" 
 
 ' Speigle V. S. Ry., 25 I. C. C. 71. " Mayor & Council of Douglas v. 
 
 « Board of Trade of Carrollton v. A. B. & A. R. R., 28 I. C. C. 445. 
 
 C. of G. Ry. Co., 28 I. C. C. 154. i- Texarkana Freight Bureau v. 
 
 ' Wichita B. of T. v. A., T. & S. F. St. L., I. M. & S. Ry., 28 I. C. C. 569. 
 
 Ry., 30 I. C. C. 35. " Davis Bros. Lumber Co., Ltd., 
 
 '» Durham v. L C. Ry., 12 I. C. C. v. C, R. L & P. Ry., 26 I. C. C. 
 
 37. 257. 
 
 [521 
 
§ 599 ] Railroad Rate Regulation 
 
 And similarly the Missouri River is taken as the basing 
 point in establishing proportional rates to interior cities of 
 Iowa." 
 
 § 599. Whether basing points justified. 
 
 It was not untU several years after the passage of the 
 Act that the Supreme Court of the United States held that 
 this system of making rates upon basing points was legal. 
 It should be noted that at first after the passing of the 
 Interstate Commerce Act, it was beheved that section 4 
 would automatically prevent the reducing of a rate for a 
 long haul below that for a shorter haul included in it; and, 
 therefore, competitive points were grouped with a number 
 of intermediate points, so that the carrier might compete 
 without reducing his charge below intermediate charges. 
 But as soon as it was decided that a carrier might in case 
 of competition reduce the charges for a long haul below 
 those for a short haul, this has become unnecessary, and 
 the competitive points are now made basing points.'" In 
 the leading case justifying the basing point systems it 
 appeared in the record that rates to non-competitive 
 Georgia towns were arrived at by taking the Atlanta rate 
 and adding to it the local rate back. The result of this was 
 to make a higher rate in each case for the shorter haul; but 
 all the rates were lower than they would be if the nearest 
 competitive point to the west, Montgomery, had been 
 taken as the basing point. The court upheld the rates, 
 Mr. Justice White saying: '^ "It having been established 
 
 '■* Interior Iowa Cities Case, 28 See fui-ther as to rate structure 
 
 I. C. C. 64. under a basing system, La Grange C. 
 
 "^ East Tenn., Va. & Ga. Ry. v. of C. v. A. & W. R. R., 28 1. C. C. 178. 
 
 Interstate Commerce Commission, '* Interstate Commerce Commis- 
 
 181 U. S. 1, 45 L. ed. 719, 21 Sup. Ct. sion v. Louisville & N. R. R., 190 
 
 516. U. S. 273, 47 L. ed. 1047, 23 Sup. Ct. 
 
 From basing points, through rates 687. 
 
 to ports are made by adding to rate It is under the theory of the pro- 
 
 to basing point, an "arbitrary." priety of reducing rates to meet 
 
 Aransas Pass Channel & Dock Co. competition at certain points that 
 
 V. G. H. & S. A. Ry., 27 I. C. C. 403. the basing point system of rate mak- 
 
 [522] 
 
Methods of Fixing Rates [ § 600 
 
 that competition affecting rates existing at a particular 
 point (Atlanta) produced the dissimilarity of circumstances 
 and conditions contemplated by the 4th section of the 
 Act, we think it inevitably followed that the railway 
 companies had a right to take the lower rate prevailing at 
 Atlanta as a basis for the charge made to places in territory 
 contiguous to Atlanta, and to ask, in addition to the low 
 competitive rate, the local rate from Atlanta to such 
 places, provided thereby no increased charges resulted 
 over those which would have been occasioned if the low 
 rate to Atlanta had been left out of view." 
 
 § 600. Determination of base rate. 
 
 The Commission may examine into the elements from 
 which a rate is constructed, and, if, as in one of the earlier 
 cases, it finds that the base rates of $4 per 100 pounds from 
 Omaha to Denver and of $4.25 per 100 pounds from Den- 
 ver to Ogden are excessive it may take action thereon. ^^ 
 Thereafter such a rate becomes adjudicated for other 
 purposes; and it will be urged, for example, that the 38- 
 cent rate from Chattanooga to New York is "an ad- 
 judicated basic rate" and as high as it reasonably might 
 be.'^ The Commission has recently held that a rate 
 adjustment under which cement rates are blanketed over 
 a minimum distance of 213 miles and over a maximum 
 distance of 475 miles, is not necessarily to be condemned.'^ 
 And, indeed, differences in distance of much more than 
 264 miles are frequently disregarded under the blanket 
 plan of making transcontinental rates. ^^ The Commission 
 recognizes the difference in the rate adjustment east and 
 
 ing may be defended against the alle- " Kindel v. Adams Exp. Co., U 
 
 gation of undue preference as between I. C. C. 475. 
 
 localities. Board of Trade of Carroll- " Union Tanning Co. v. S. Ry., 
 
 ton V. C. of G. Ry., 28 I. C. C. 154. 26 I. C. C. 159. 
 
 The fact that a city is a Mississippi " In re Advances on Cement, 24 
 
 River gateway is considered in bas- I. C. C. 209. 
 
 ing the rate. Montezuma v. C. of ™ In re Advances on Barley, 24 
 
 Ga. Ry., 28 I. C. C. 280. I. C. C. 664. 
 
 [523] 
 
§ 601 ] Railroad Rate Regulation 
 
 west of the Mississippi River, and has held that the basis 
 obtaining west may properly be on a higher scale than 
 that obtaining east." And Chicago, because of traffic 
 conditions imperatively demanding recognition, has been 
 recognized as a natural point for breaking rates. ^^ In all 
 rate groups there must necessarily be a more or less 
 abrupt "rate hump" as between the most distant point in 
 one group and the nearest point in the adjoining group. ^^ 
 Group rates being based on distance, the difference should 
 decrease as the distance to points of destination increase; 
 and as between points embraced within the same group 
 the percentage of distance over or imder the average 
 distance of the group to point of destination should not be 
 excessive.^* On the other hand, when the basing point 
 is established at certain common points, with differential 
 rates added for other points, there is a possibility of dis- 
 crimination.^^ If the complaining places are all in active 
 competition with the near-by basing points, and are ad- 
 versely affected by the advantages which the latter enjoy 
 in the matter of freight rates, the matter deserves scru- 
 tiny.^* It may be noted as an illustration of the distinc- 
 tion between these opposed systems of rate making that 
 rates east of the Missouri River are blanketed with respect 
 to non-water competitive freight, but not as to rates affected 
 by water competition.^'^ 
 
 § 601. Extent of power over grouping. 
 
 As the carriers have evidently considered at all times in 
 their rate making that certain economic conditions exist 
 which require grouping, the Commission cannot ignore 
 these conditions in determining the reasonableness of rates 
 
 2' In re Advances on Apples, 24 I. sion Docket 38 and 38 A, 21 I. C. C. 
 C. C. 38. R. 59L 
 
 22 Globe Milling Co. v. C, M. & St. ^s Texas Common Points Case. 
 
 P. Ry., 24 I. C. C. 594. ^e Pelham v. A. C. L. R. R., 28 
 
 23 Taylor v. N. W. Ry., 25 I. C. C. I. C. C. 433. 
 
 613. 27 Transcontinental Commodity 
 
 " In re Investigation and Suspen- Rates, West Bound, 26 I. C. C 456 
 
 [524] 
 
Methods of Fixing Rates [ § 601 
 
 prevailing for various points within the group. ^* Indeed, 
 it has been said repeatedly that group rates not infre- 
 quently are the most just, and promote the highest degree 
 of healthy competition.^' As a matter of policy the system 
 of grouping should be encouraged, and growers should 
 have as free and unrestricted a field as possible in which 
 to establish their credit and purchase the supplies neces- 
 sary to conduct their business.'" It is plainly undesirable 
 to disturb a method of rate making, long established and 
 generally satisfactory, without convincing proof of its 
 injustice.'' The rate structure as worked out in practice 
 will ordinarily make rates break at ports and on the 
 banks of rivers; but to have rates break at a particular 
 point, even if conditions are much the same, is not an 
 inherent rate right.'^ The Commission has conceded that 
 a governmental authority has not the same latitude in 
 fixing blanket rates as the carriers themselves.'' But it 
 has said shrewdly that if the courts should rule that the 
 Commission had no authority to establish blanket rates 
 in territory, it would seem to follow that the carriers 
 are without authority.'^ However, the Commission went 
 ahead prescribing rates which would presumably result in 
 blanketing the points of origin between localities men- 
 tioned.'^ And while the Commission often approved 
 blanket rates, blanket rates have been condemned where 
 they result in unreasonable charges.'* Until very recently 
 the Commission felt it would be inopportune to proceed 
 upon the theory that it had power to establish a blanket 
 rate generally apphcable."' But after the decision in the 
 
 2' Victor Mf'g Co. v. S. Ry., 27 " R. R. Commission of Nev. v. 
 
 I. C. C. 661. S. P. Co., 19 I. C. C. R. 238. 
 
 ^' Waukesha Lime & Stone Co. v. '■* Lawrence-Wardenburg Co. v. 
 
 C, M. & St. P. Ry., 26 I. C. C. 515. S. P. Co., 20 I. C. C. R. 638. 
 
 »» Concentration of Cotton, 26 I. '' Stacy & Sons v. O. S. L. R. R., 
 
 C. C. 585. 20 I. C. C. R. 136. 
 
 ^'^ Acme Cement Plaster Co. v. ™ Commercial Club of S. L. v. 
 
 L. S. & M. S. Ry., 17 I. C. C. 30. A., T. & S. F. Ry., 19 I. C. C. 218. 
 
 '^ Commercial Club of Duluth v. '" Arlington Heights Fruit E.x- 
 
 B. & O. R. R., 27 I. C. C. 639. change v. S. P., 22 I. C. C. 149. 
 
 [525] 
 
§ 602 ] Railroad Rate Regulation 
 
 Lemon Rates Case/* it was obvious that if it acted with 
 due caution, it would be safe to follow out the zone policy 
 when the conditions were favorable. And in the Inter- 
 mountain Rates Case,'' it would seem to have been made 
 sufficiently clear that the Commission can give relief by 
 establishing zones, if that is appropriate. 
 
 § 602. Creation of a market by preferential rates. 
 
 Only to a certain extent the carrier may be allowed to 
 favor a new town, and thereby create a new market and 
 stimulate competition.^" "The Louisville & Nashville 
 insists that the near-by market of Pensacola is entitled to 
 all of this great advantage. It claims that the lower rates 
 to Pensacola were necessary to create a market there for 
 these stores, and, further, that the carriage to Pensacola is 
 only part of its haul on the great majority of the ship- 
 ments, while on shipments to Savannah it can only have 
 the short haul to River Junction, where it must turn the 
 traffic over to one of its connecting roads. Whatever 
 difference in rates may have seemed necessary at the 
 outset to create a demand in the Pensacola market, it is 
 apparent now, after several years' trial, that the rates to 
 Savannah as compared with the Pensacola rates give an 
 unwarranted advantage to Pensacola. In endeavoring to 
 build up a near-by market at Pensacola, and so furnish 
 these products with a market in addition to the one 
 existing at Savannah, the Louisville & Nashville was 
 acting in the interest of producers of and dealers in naval 
 stores on its Pensacola & Atlantic division. It went be- 
 yond this, however, and so controlled the adjustment of 
 
 '* Interstate Commerce Commis- R., 8 I. C. C. Rep. 377, affirmed in 
 
 sion V. A., T. & S. F. Ry., 231 U. S. 118 Fed. 613. 
 
 736, 34 Sup. Ct. 316. No jobbing point is entitled, 
 
 ™ United States v. A., T. & S. F. through unfair rate adjustment, to 
 
 Ry., 234 U. S. 476, 34 Sup. Ct. supremacy in a particular consuming 
 
 986. territory. Billings Chamber of Com- 
 
 " Savannah Bureau of Freight & merce v, C, B. & Q. R. R., 19 I. C. 
 
 Transportation v. Louisville & N. R. C. 71. 
 
 [526] 
 
Methods of Fixing Rates [ § 603 
 
 rates to the two markets as to give Pensacola a practical 
 monopoly of the trade. A carrier cannot lawfully estab- 
 lish and maintain an adjustment of rates which in practice 
 prevents shippers on its line from availing themselves of a 
 principal market which they have long been using, and 
 confers a substantial monopoly upon a new market in 
 which, for reasons of its own, it has greater interest. That 
 is what has been done in this case." " 
 
 § 603. Equalizing manufactures in different localities. 
 
 To a certain extent subject to many limitations dis- 
 cussed elsewhere, a railroad management may equalize 
 the access of manufacturers in different near-by localities to 
 their sources of supply so that all may compete upon 
 equal terms in common markets. That this tends to pro- 
 mote distribution of manufacturing industries, which has 
 its advantages, may be admitted, but the extent to which 
 the common carrier may be permitted to play the part of a 
 beneficent despot is a question. The Commission has 
 never approved a group system which imposed upon any 
 part of group an unjust and unreasonable or unduly dis- 
 criminating transportation charge. ""^ It has held, for ex- 
 ample, in regard to any basing system that the intermediate 
 rate should not exceed the long-distance rate, plus a rea- 
 sonable local charge from the more remote point back to 
 intermediate point, and should, perhaps, in some cases be 
 even less.^^ In a territory under the basing point system, 
 rates to a complaining point, made by a combination of the 
 
 " The Commission has repeatedly points in surrounding territory, which 
 
 recognized and approved the group- latter points are not similarly situ- 
 
 ing of points, within reasonable ated. Corporation Commission of 
 
 limits. Stiritz v. N. O. M. & C. R. North Carolina v. N. & W. Ry., 
 
 R., 22 I. C. C. 578. 19 I. C. C. 303; decision of Commis- 
 
 Every city is entitled to the ad- sion sustained, N. & W. Ry. v. U. S., 
 
 vantage of its location, and may not 195 Fed. 953. 
 
 lawfully be subjected to high freight *' Southwestern M. Millers' Club 
 
 charges merely because carriers for v. M., K. & T. Ry., 22 I. C. C. 422. 
 reasons of convenience or otherwise ■" Bluefield Shippers' Ass'n v. N. 
 
 include it with a number of other & W. Ry., 22 I. C. C. 519. 
 
 [527] 
 
§ 603 ] Railroad Rate Regulation 
 
 through rate to the nearest trade center and the local 
 beyond need not, under the construction of the fourth 
 section of the act by the Supreme Court, be reduced to the 
 basis of every neighboring point of like distance, when the 
 other points have the advantage of water or other com- 
 petition/^ And, indeed, the authorities are now quick- to 
 appreciate that the rapid increase of rates as the point of 
 production is removed from base points presents an 
 anomaly in rate making which calls for explanation.^* 
 And the Commission has laid it down that, if the basing 
 point system is adopted, it must be applied alike to all 
 places where real dissimilarity of circumstances or con- 
 trolhng competition do not exist. ^* Thus where three 
 towns are strong competitors, it is important to have a 
 common rate, if the conditions justify it.*'' And it is 
 improper to place a particular commodity in a given zone 
 without due regard to geographical boundaries of produc- 
 tion.** It is realized, however, that blanket or group rates 
 in many cases are of great advantage to the public without 
 serious injustice to any interest, though there is of neces- 
 sity more or less disregard of distance and varying degrees 
 of inequality.*' A basing point is established that all 
 roads might share in the business and all shippers be 
 given opportunity to compete in conamon markets.''" 
 Indeed, the chief justification for a blanket rate is that it 
 places all producers on the same footing at a market." 
 
 ■'■' Commercial & I. Ass'n of Union ■" Ferguson Saw Mill Co. v. St. 
 
 Springs v. L. & N. R. R. Co., 12 I. L., I. M. & S. Ry., 18 I. C. C. 391. 
 
 C. C. 372. « Chicago Lumber & Coal Co. v. 
 
 « Florida F. & V. S. P. Ass'n v. Tioga Southeastern Ry., 16 I. C. C. 
 
 A. C. L. R. R., 22 I. C. C. 11. 323. 
 
 ■" Columbia Grocery Co. v. L. & ^ Avery Manufacturing Co. v. 
 
 N. R. R., 18 I. C. C. 502. A., T. & S. F. Ry., 16 I. C. C. 20. 
 
 " Railroad Commissioners of Fla. *' Ferguson Saw Mill Co. v. St. 
 
 V. S. A. L. Ry., 16 I. C. C. 1. L., I. M. & S. Ry., 18 I. C. C. 396. 
 
 [528] 
 
BOOK III 
 
 PREVENTION OF DISCRIMINATION 
 
 PART I— WHAT CONSTITUTES DISCRIMINATION 
 
 CHAPTER XIII 
 
 GENEBAL PRINCIPLES RELATING TO DISCRIMINATION 
 
 § 610. Provisions of the Act. 
 611. Development of the rule against discrimination. 
 
 Topic A. Successive Theories as to Discrimination 
 
 § 612. Nothing but reasonableness once required. 
 
 613. No rule against discrimination as such. 
 
 614. Later rule against unreasonable differences. 
 
 615. Outright discrimination next condemned. 
 
 616. Exclusiveness of the privilege creates discrimination. 
 
 617. Special concessions from established rates. 
 
 618. Complainant charged more than regular rates. 
 
 619. All discrimination forbidden by the better view. 
 
 620. Necessity for the rule against discrimination. 
 
 621. Rule forbidding personal discrimination. 
 
 622. Public injury by discriminations in freight rates. 
 
 623. PoUcy of the Act. 
 
 Topic B. What Constitutes Statutory Discrimination 
 
 § 624. What amounts to a rebate. 
 
 625. Prohibition of special rates. 
 
 626. Explanation of this policy. 
 
 027. What discrimination is forbidden. 
 
 628. Departure from published rate. 
 
 629. Sanctity of the scheduled rate. 
 
 630. Devices for concealing preference unavailing. 
 
 631. Certain unlawful devices considered. 
 
 632. Schemes to cover discrimination. 
 
 633. Criminal provisions for discrimination. 
 
 634. What intent is necessary. 
 
 635. Civil liability for discrimination. 
 
 34 [ 529 ] 
 
§ 610 ] Railroad Rate Regulation 
 
 Topic C. Established Exceptions to Rule 
 
 § 636. Public wrong in giving free passes. 
 
 637. Passes prima facie discrimination. 
 
 638. Reductions for general classes. 
 
 639. Whether statutory exceptions are exclusive. 
 
 640. Special forms of passenger tickets. 
 
 641. Concession for government business. 
 
 642. Reduction for charitable purpose. 
 
 643. Transportation for the carrier itself. 
 
 644. Sale and deUvery of commodities. 
 
 645. PoUcy of the commodities clause. 
 
 646. Carriage for other companies. 
 
 647. No obligation to grant such concessions. 
 
 648. Collateral results of illegal discrimination. 
 
 Topic D. Other Considerations for Reductions 
 
 § 649. Other consideration formerly considered dissimilar circumstance. 
 
 650. Whether indefinite considerations can be a basis. 
 
 651. Concessions to those who deal with the carrier. 
 
 652. Fostering the interests of the carrier. 
 
 653. Barter of transportation forbidden. 
 
 654. Inconsistent contracts held unavailing. 
 
 655. Continuing contracts no justification. 
 
 656. Whether executed contracts are different. 
 
 657. Preference in certain services permissible. 
 
 658. What favors constitute discrimination. 
 
 659. Where service of different character. 
 
 660. Where no pubUc service involved. 
 
 § 610. Provisions of the Act. 
 
 One of the chief objects of the passing the original Act 
 was to make it clear that discrimination between persons 
 shipping goods under like conditions was illegal. At that 
 time the decisions in the courts of the States were in 
 conflict; and it was even doubtful whether there was any 
 rule generally applicable against rebating in the case of 
 interstate shipments. Every addition since that time to 
 the law has been in the line of additional remedies to 
 prevent rebating; but the rule against it was made plain 
 enough in the original Act, section 2, which, together 
 with certain clauses in section 3 hereafter discussed, relate 
 particularly to discrimination between shippers. This 
 section provided in sweeping terms that if any common 
 [530 1 
 
General Principles [§611 
 
 carrier subject to the provisions of this Act shall, directly 
 or indirectly, by any special rate, rebate, drawback, or 
 other device, charge, demand, collect, or receive from any 
 person or persons a greater or less compensation for any 
 service rendered, or to be rendered, in the transportation 
 of passengers or property, subject to the provisions of 
 this Act, than it charges, demands, collects, or receives 
 from any other person or persons for doing for him or 
 them a like and contemporaneous service in the trans- 
 portation of a like kind of traffic under substantially 
 similar circumstances and conditions, such common carriers 
 shall be deemed guilty of unjust discrimination, which is 
 hereby prohibited and declared to be unlawful. There are 
 specific provisions of the older section 22, and the newer 
 paragraph added to section 1, relating to free transporta- 
 tion or carriage at reduced rates for certain classes or 
 purposes in the case of persons and goods. Generally 
 speaking, such concessions may still be made for govern- 
 mental purposes and other community interests. And 
 free passes may, furthermore, still be given by carriers to 
 its employees and their families, its officers, agents, sur- 
 geons, physicians, and attorneys at law; and free trans- 
 portation may also be interchanged between officials of 
 companies subject to the Act. What in general is held to 
 constitute illegal discrimination under the Act, and the 
 machinery put at the disposal of the Commission to stamp 
 it out, is discussed at large throughout the four chapters 
 immediately following. 
 
 § 611. Development of the rule against discrimination. 
 
 The fundamental limitation upon the charges of a com- 
 mon carrier, that they shall be in no respect unreasonable, 
 has just been discussed with much detail. But a further 
 requirement of the public service law governing the rates 
 of the common carrier remains to be considered, and that 
 is the more modern requisite that rates shall be in no 
 respect unjustly discriminatory. It must be plain to all 
 
 [531] 
 
§ 612 ] Railroad Rate Regulation 
 
 who have followed the course of events with the least 
 attention that there has been distinct evolution in the 
 law governing public employment during the last twenty- 
 five years. The rule against discrimination is the most 
 recent development in the definition of public duty. A 
 comparatively few years ago it was held that if a public 
 service company served at reasonable rates it performed 
 its obligation; but modern industrial conditions require the 
 further law that it shall serve with equality. The state- 
 ment that one is a common carrier, ex vi termini, imports 
 a duty to the public, and a corresponding legal right in the 
 public, a right common to all. One of the duties imposed 
 upon the common carrier is, that he is bound to carry 
 for a reasonable remuneration, and is not allowed to make 
 unreasonable and excessive charges. He cannot, like a 
 merchant, consult his pleasure or caprice in the conduct 
 of his business, and cannot even by special agreement 
 receive an excessive and extortionate price for his services. 
 Another duty imposed upon him is to make no unjust, 
 injurious or arbitrary discriminations between individuals 
 in his dealings with the public. The right to the trans- 
 portation services of the carrier is a common right be- 
 longing to every one alike. 
 
 Topic A. Successive Theories as to Discrimination 
 
 § 612. Nothing but reasonableness once required. 
 
 The state of the law as to this matter at the middle of 
 the nineteenth century is well set forth in the important 
 case of Fitchburg Railroad v. Gage.*"- The principal issue 
 in this case was whether the railroad could charge one 
 shipper a fifty cent rate on ice from one point on its 
 route to another while it was charging another shipper a 
 twenty cent rate on brick for the same transportation. 
 It will be seen that this case really involves no question 
 of personal discrimination, since these are obviously very 
 different goods which are being shipped over the route. 
 s2 12 Gray (Mass.), 393. 
 
 [532] 
 
General Principles [ § 613 
 
 Still the language of the court in stating what was at that 
 time conceived to be the common law is often cited. "The 
 principle derived from that source is very plain and simple. 
 It requires equal justice to all. But the equality which is 
 to be observed in relation to the public and to every in- 
 dividual consists in the restricted right to charge, in each 
 particular case of service, a reasonable compensation, and 
 no more. If the carrier confines himself to this, no wrong 
 can be done, and no cause afforded for complaint. If, 
 for special reasons, in isolated cases, the carrier sees fit 
 to stipulate for the carriage of goods or merchandise of 
 any class for individuals for a certain time or in certain 
 quantities for less compensation than what is the usual, 
 necessary, and reasonable rate, he may undoubtedly do 
 so without thereby entitling all other persons and parties 
 to the same advantage and relief." " 
 
 § 613. No rule against discrimination as such. 
 
 It has already been pointed out that up to twenty-five 
 years ago the prevalent doctrine was that there was no 
 rule against discrimination as such, unless it was shown 
 that the higher charge was unreasonable. One of the 
 frankest cases in making that distinction was Ex parte 
 Benson & Co.,^^ where the court permitted the recovery 
 of a rebate promised to certain shippers to induce them 
 to ship by rail rather than by river. The language of 
 Chief Justice Simpson leaves no doubt as to his belief: 
 "The extent of the common law rule seems to be, not that 
 carriers shall transport for all parties at the same rate of 
 compensation, otherwise their contracts are illegal and 
 void, but that they shall transport at reasonable rates to 
 all. A difference in the charge does not per se invalidate 
 the contracts as inequitable and against public policy, but 
 to have this effect, there must be an element of unreason- 
 ableness in the charge itself, as applied to the services 
 
 =3 See also Ragan & Buffet v. ^4 19 g. C. 38, 44 Am. Rep. 564. 
 
 Aiken, 9 Lea (77 Tenn.), 609. 
 
 [ 533 1 
 
§ 614 ] Railroad Rate Regulation 
 
 rendered, between the parties to the contract and without 
 comparison to the charges against others. Independent 
 of statutes and provisions in their charters restricting 
 corporations within certain limits, they stand in the com- 
 munity as other individuals invested with the power to 
 contract and be contracted with, and the validity of their 
 contracts depends upon the same principles which govern 
 contracts between natural persons. It is too vague to 
 say, in general terms, that the contract is inequitable and 
 against public policy, and, therefore, not enforceable. 
 To be void on such grounds, it must run contra to some 
 known principle of equity or contravene some well-estab- 
 lished doctrine of public forbidding it." ^^ 
 
 § 614. Later rule against unreasonable differences. 
 
 For a considerable time thereafter this remained the 
 prevailing statement of the extent of the limitations which 
 the law placed upon the charges of the carrier. Indeed, 
 as new cases arose the courts committed themselves to 
 still more definite statements. Thus in the case of John- 
 son V. Pensacola and Perdido Railroad Company ^* the 
 court refused to grant reparation to a complainant who 
 showed that while they were charging him one rate for 
 transportation of lumber they were charging another 
 shipper one-third less for the same transportation under 
 circumstances and conditions in all respects that were 
 essential entirely similar. Mr. Justice Westcott in deliver- 
 ing the opinion of the court held this declaration demur- 
 rable by the weight of authority. "Our conclusions," he 
 said, "are that, as against a common or public carrier, 
 every person has the same right; that in all cases, where 
 his common duty controls, he cannot refuse A and ac- 
 commodate B; that all, the entire public, have the right 
 to the same carriage at a reasonable price, and at a reason- 
 able charge for the service performed; that the commonness 
 
 •55 Of the cases cited in the preced- & T. C. Ry. v. Rust & D., 58 Tex. 98. 
 ing section see, especially, Houston «= 16 Fla. 623, 26 Am. Rep. 731. 
 
 [ 534 ] 
 
General Principles [ § 615 
 
 of the duty to carry for all does not involve a common- 
 ness or equality of compensation or charge; that all the 
 shipper can ask of a common carrier is, that for the service 
 performed he shall charge no more than a reasonable sum to 
 him; that whether the carrier charges another more or less 
 than the price charged a particular individual, may be a 
 matter of evidence in determining whether a charge is too 
 much or too little for the service performed, and that the 
 difference between the charges cannot be the measure of 
 damages in any case, unless it is established by proof that 
 the smaller charge is the true reasonable charge in view 
 of the transportation furnished, and that the higher charge 
 is excessive to that degree." " 
 
 § 615. Outright discrimination next condemned. 
 
 Even in so extreme a case as the one last cited some 
 qualifications were made; the power to discriminate as 
 much as it pleased between shippers was not left to the 
 railroads. For even then it was vaguely felt that equal 
 service to all dealers upon fair terms was necessary for 
 the maintenance of free industrial conditions. vVnd the 
 courts never went so far that they could not be continually 
 more insistent that they had meant that reasonable rates 
 to all must be equal rates to all unless the conditions were 
 shown to be dissimilar. This is the position still taken in 
 some States where there has been no declaration or policy 
 by statute against discrimination as such; but it will be 
 seen that to a large extent it prevents discriminatory rates 
 as well as unreasonable charges. An elaborate case de- 
 cided under this view of the law is Cook v. Chicago, 
 Rock Island and Pacific Railway Company.** In that 
 case it appeared that the plaintiffs, who were shippers of 
 cattle, were charged by the defendant from three to ten 
 dollars per carload of cattle shipped more than the charges 
 made to certain favored shippers who were given a secret 
 
 " See Concord & P. R. R. v. For- "' 81 la. 551, 46 N. W. 749, 25 
 
 saith, 59 N. H. 122, 47 Am. Rep. 181. Am. St. Rep. 512, 9 L. R. A. 764. 
 
 [535] 
 
§ 615 ] Railroad Rate Regulation 
 
 rebate. The court held that the railroad must make 
 reparation for this wrong by refunding these overpayments 
 thus extorted. The course of opinion in the two of the 
 most prominent text writers of the last generation may be 
 seen in the following extract from the opinion of Chief 
 Justice Rothrock: "In volume 2, p. 95, Redfield on Rail- 
 roads, the following language is used: 'It has been held in 
 this country, where there is no statutory regulation af- 
 fecting the question, that common carriers are not abso- 
 lutely bound to charge all customers the same price for 
 the same service. But as the rule is clearly established 
 at common law that a carrier is bound by law to carry 
 everything which is brought to him, for a reasonable sum 
 to be paid to him for the same carriage, and not to extort 
 what he will, it would seem to follow that he is boimd to 
 carry for all at the same price, unless there is some special 
 reason for the distinction. For, unless this were so, the 
 duty to carry for all would not be of much value to the 
 public, since it would be easy for the carrier to select his 
 own customers at will by the arbitrary discrimination in 
 his favor. Hence, it was held at an early day that all 
 that could be required on the part of the owner of the 
 goods, by way of compensation, was that he should be 
 ready and willing to pay a reasonable compensation, and 
 to deposit the money in advance, if required. Carrying 
 for reasonable compensation must imply that the same 
 compensation is accepted always for the same service, 
 else it could not be reasonable, either absolutely or rela- 
 tively.' In Hutchinson on Carriers, 243, after a review of 
 the cases, it is said: 'Hence we may conclude that in this 
 country, independently of statutory provisions, all common 
 carriers will be held to the strictest impartiality in the 
 conduct of their business, and that all privileges or prefer- 
 ences given to one customer, which are not extended to 
 all, are in violation of public duty.' An examination of 
 the authorities cited by these learned authors leaves no 
 doubt that a common carrier has no right to make un- 
 [536] 
 
General Principles [§§616,617 
 
 reasonable charges for his services, and that he cannot 
 lawfully make unjust discrimination between his cus- 
 tomers." ^' 
 
 § 616. Exclusiveness of the privilege creates discrimination. 
 
 In a similarly inconclusive case, Christie v. Missouri 
 Pacific Railroad Company,"" where a petition alleged that 
 a contract was made with the agent of a railroad com- 
 pany regarding the shipment of grain at a reduced price, 
 stating its terms, it was held that nothing appeared to 
 show that the arrangement was against public policy, 
 Chief Justice Norton saying: "A common carrier has the 
 right to contract to ship freight at a lower rate than the 
 published tariff rate, if he choose to do so; and such a 
 contract is not against public policy unless the privilege 
 to ship at such rate is granted exclusively to the shipper 
 with whom it is made, or is denied to other shippers. It 
 is the exclusiveness of the privilege granted to one and 
 denied to another which makes the discrimination, and 
 renders the contract void as against public policy. No 
 such exclusiveness or discrimination appears in the con- 
 tract sued upon, and the objection of defendant to the re- 
 ception of any evidence was properly overruled." *^ 
 
 § 617. Special concessions from established rates. 
 
 Even in some comparatively recent cases, these general 
 doctrines are stated in much the same language as for- 
 merly. Thus in Lough v. Outerbridge,"^ in holding that 
 a common carrier might grant special reductions in pur- 
 suance of a policy to maintain its business in the face of 
 competition, the court held that those who would not con- 
 form to the conditions had no complaint if they were not 
 given the reduced rates. "There can be no doubt that 
 
 6» See Cowden v. Pacific S. S. Co., Co. v. Elliott, 76 111. 67, was reUed 
 
 94 Pac. 470, 29 Pac. 873, 28 Am. St. upon by the court. 
 Rep. 142, 18 L. R. A. 221. '^ 143 N. Y. 271, 38 N. E. 292, 42 
 
 9" 94 Mo. 453, 7 S. W. 567. Am. St. Rep. 712, 25 L. R. A. 674, B. 
 
 " The case of Toledo, W. & W. R. & W. 380. 
 
 [537] 
 
§ 618 ] Railroad Rate Regulation 
 
 the carrier could at common law make a discoamt from its 
 reasonable general rates in favor of a particular customer 
 or class of customers in isolated cases, for special reasons, 
 and upon special conditions, without violating any of the 
 duties or obligations to the public inherent in the employ- 
 ment. If the general rates are reasonable, a deviation 
 from the standard by the carrier in favor of particular cus- 
 tomers, for special reasons not apphcable to the whole 
 public, does not furnish to parties not similarly situated 
 any just ground for complaint. When the conditions and 
 circumstances are identical, the charges to all shippers for 
 the same service must be equal. These principles are well 
 settled, and whatever may be found to the contrary in the 
 cases cited by the learned counsel for the plaintiff origi- 
 nated in the application of statutory regulations in other 
 States and countries. Special favors in the form of re- 
 duced rates to particular customers may form an element 
 in the inquiry whether, as matter of fact, the standard 
 rates are reasonable or otherwise. If they are extended to 
 such persons at the expense of the general pubUc, the fact 
 must be taken into account in ascertaining whether a 
 given tariff of general prices is or is not reasonable." *' 
 
 § 618. Complainant charged more than regular rates. 
 
 However, it is now generally agreed that in outrageous 
 cases relief will be given by some one or other of these 
 principles. In one of the most extreme cases in the books, 
 Menacho v. Ward,*^ it was set forth by the shippers in 
 their application for relief that the carrier in question had 
 arbitrarily refused them equal terms, facilities and ac- 
 commodations to those granted and allowed to other 
 shippers, and had arbitrarily exacted from them a much 
 greater rate of freight than he was at the same time charg- 
 
 " Citing Railroad Co. v. Gage, H. L. 17 App. Cas. 25; Evershed v. 
 
 12 Gray, 393; Sargent v. Railroad Railway Co., 3 Q. B. Div. 135, 
 
 Co., 115 Mass. 422; Steamship Co. affirmed, L. R. 3 App. Cas. 1029. 
 
 V. McGregor, 21 Q. B. Div. 544, " 27 Fed. 529. 
 affirmed, 23 Q. B. Div. 598, and by 
 [538] 
 
General Princjples [ § 619 
 
 ing to shippers of merchandise generally. It appeared that 
 these shippers had thus been "blacklisted" because they 
 maintained business relations with a rival carrier. But 
 the court found this no excuse for charging the complain- 
 ants more than the regular rates, Judge Baxter, although 
 still beheving as the majority of people then beheved that 
 the law did not require any greater equahty than that no 
 shipper should be charged an unreasonable rate, neverthe- 
 less finding upon the evidence that the complainants had 
 been treated outrageously. "The fact that the carrier 
 charges some less than others for the same service is 
 merely evidence for the latter, tending to show that he 
 charges them too much; but when it appears that the 
 charges are greater than those ordinarily and uniformly 
 made to others for similar services, the fact is not only 
 competent evidence against the carrier, but cogent evi- 
 dence, and shifts upon him the burden of justifying the 
 exceptional charge." ^'^ 
 
 § 619. All discrimination forbidden by the better view. 
 
 By the better view, it is submitted, the common law 
 to-day forbids all discrimination between two appUcants 
 who ask the same service of a common carrier. This is the 
 modern view reached after some bitter experiences with 
 the results of discriminations by the railroads in disturb- 
 ing the normal industrial order, in suppressing competition 
 and fostering monopoly. But over thirty years ago this 
 doctrine, that there is a necessary common-law rule against 
 discrimination involved in the law defining the pubhc duty 
 of the common carrier, was stated in a way which has 
 never been improved upon. In the leading case of Mes- 
 senger V. Pennsylvania Railroad Company "^ Mr. Justice 
 Beasley said in part: "Recognizing this as the settled doc- 
 
 65 This distinctive rule against «" 7 Vroom (36 N. J. L.), 407, 13 
 
 unjustifiable discrimination was rec- Am. Rep. 437, S. C. 8 Vroom (37 
 ognized in Rothschild v. Wabash, N. J. L.) 531, 18 Am. Rep. 
 St. L. & P. R. R., 92 Mo. 91, 4 S. W. 754. 
 418. 
 
 [539] 
 
§ 620 ] Railroad Rate Regulation 
 
 trine, I am not able to see how it can be admissible for a 
 common carrier to demand a different hire from various 
 persons for an identical kind of service, under identical 
 conditions. Such partiality is legitimate in private busi- 
 ness, but how can it square with the obligations of a 
 public employment? A person having a public duty to 
 discharge, is undoubtedly bound to exercise such office 
 for the equal benefit of all, and therefore to permit the 
 common carrier to charge various prices, according to the 
 person with whom he deals, for the same services, is to 
 forget that he owes a duty to the community. If he exacts 
 different rates for the carriage of goods of the same kind, 
 between the same points, he violates, as plainly, though 
 it may be not in the same degree, the principle of public 
 policy which, in his own despite, converts his business 
 into a public employment. The law that forbids him to 
 make any discrimination in favor of the goods of A over 
 the goods of B, when the goods of both are tendered for 
 carriage, must, it seems to me, necessarily forbid any dis- 
 crimination with respect to the rate of pay for the car- 
 riage." *^ 
 
 § 620. Necessity for the rule against discrimination. 
 
 By the modern way of looking at this matter, therefore, 
 discrimination is illegal. In last analysis it is pubhc 
 opinion which has dictated this rule, although it is not too 
 much to claim that this rule is a logical development in 
 the law of public duty. So involved are the services of 
 the common carrier, directly or indirectly, in all modem 
 businesses that it is already felt to be unbearable if trans- 
 portation is not open to all upon equal terms. And the 
 rule must be exact. It is not enough to say that all must 
 be given rates which are not unreasonable, for by that 
 principle in many cases unequal rates might be justified.^* 
 
 " See also Sandford v. Catawissa, «' Chicago & A. R. R. v. People, 
 
 W. & E. R. R., 24 Pa. St. 378, 64 Am. 67 111. 16, 16 Am. Rep. 599. 
 Dec. 667. 
 
 [540] 
 
General Principles [ § 621 
 
 Wliat public opinion requires to-day is that the rates shall 
 be equal; if they are different by a few cents upon a 
 hundredweight it may mean the fortune of the shipper 
 who gets the lower rate, and the ruin of his competitor 
 who pays the higher rate. The cases requiring the same 
 rate to shippers who ask for the same transportation of 
 the same goods at the same time and under the same con- 
 ditions may seem fewer in number than those which are 
 more conservative. But this principle was made law in 
 many States by an impatient public who demanded stat- 
 utes so that there could be in the future no equivocations, 
 before many courts had time to express their opinion and 
 before other courts had time to recant. And upon the 
 whole it is claimed with confidence that outright personal 
 discrimination is opposed to modern common-law prin- 
 ciples.^' 
 
 § 621. Rule forbidding personal discrimination. 
 
 It is submitted that for the reasons advanced in these 
 last paragraphs, if for no other reasons, it is a necessary 
 part of the common law governing common carriers that 
 they must not discriminate between shippers; and it must 
 be plain that this involves the recognition of a rule for- 
 bidding discrimination which goes beyond the prior rule 
 requiring reasonable charges. It was not easy to work 
 this out logically, since it did involve a development in the 
 law governing public service. How cautious many courts 
 were in working the new rule out may be seen by an ex- 
 tract from the opinion of Judge Bruce in Samuels v. 
 Louisville and Nashville Railroad Company,™ where the 
 court sustained on demurrer a complaint which stated 
 discrimination, but did not allege um-easonable charge: 
 "But the question in this case is to be determined upon 
 the common law, and in the light of those principles as 
 applied to railroad companies. In a case like the one at 
 
 «»See the language in Griffin v. 206, 30 S. E. 319, -11 L. R. A. 240. 
 Goldaboro Water Co., 122 N. C. ™ 31 Fed. 57. 
 
 [541] 
 
§ 622 ] Railroad Rate Regulation 
 
 bar, can there be a reasonable charge which is not at the 
 same time a substantially equal charge? And is not a 
 charge unreasonable when it is unequal, and in breach of 
 the obligation and duty of the common carrier to the 
 public?"^! 
 
 § 622. Public injury by discriminations in freight rates. 
 
 The argument from policy against discrimination is so 
 plain to anyone who has not been out of touch with the 
 recent developments in the industrial situation that it is 
 hardly necessary to elaborate it. But a succinct statement 
 from a recent decision by Judge Grosscup,^^ where he held 
 that under its general chancery jurisdiction, a court of 
 equity has power to remedy wrongs consisting of the viola- 
 tion by a carrier of the provisions of the interstate com- 
 merce law prohibiting discrimination between shippers, 
 brings out well the necessity for the protection of the 
 whole public in having the benefits of an open market. 
 "The bill avers — and this hearing is upon demurrer and 
 motion for an injunction — that such discrimination was 
 practiced in the transportation of grains and of packing 
 house goods; and that in the transportation of grain it 
 had gone so far that each railroad reaching into the grain 
 districts had eliminated all competitive dealers, leaving 
 only a single favored dealer who purchased all the grain 
 at all the stations along the lines of the roads. Of course 
 under such conditions, the grain grower was deprived of 
 the benefit of competition among dealers. The practical 
 effect was the same as if the railroads had estabhshed 
 agencies of their own to purchase the grain, and by giving 
 these discriminatory advantages, had excluded all other 
 grain purchasers from the field. Such a policy necessarily 
 destroys the competition to which the grain growers in a 
 given district are entitled. Discrimination of this charac- 
 
 " See also Burlington C. R. & W. " United States v. Michigan Cen- 
 
 Ry. V. N. W. Fuel Co., 31 Fed. tral R. R., 122 Fed. 544. 
 
 652. 
 
 [5421 
 
General Principles [ § t)23 
 
 ter is, of course, contrary to the plain provisions of the 
 interstate commerce act." " 
 
 § 623. Policy of the Act. 
 
 The Commission has had occasion to remark that in the 
 passing of the Act one important purpose was to stop 
 discrimination against the weak in favor of the strong.^' 
 It has spoken also with emphasis of the boon of free com- 
 petition, which the Act is designed to secure to all, large 
 and small.'^ The fundamental principle of the Act is 
 clearly that there should be equal treatment to all alike 
 under the substantially similar conditions and circum- 
 stances.'* While one object of the Act was to preserve 
 competitive conditions between common carriers for the 
 pubhc benefit, another purpose was to prevent undue dis- 
 crimination for private protection.''^ Carriers are common 
 servants of all shippers, and are bound to serve them all 
 reasonably and without undue prejudice.'* It is the duty 
 of a common carrier to receive and carry, upon reasonable 
 and equal terms, all goods tendered, under suitable cir- 
 cumstances and conditions, and it cannot lawfully dis- 
 criminate in favor of any person, product, traffic or local- 
 ity.'' Whether or not a discrimination shall be removed is 
 not measured by its amount, whether large or small, but 
 it is unjust or undue.*" Again and again it has been laid 
 down that it is the duty of the carrier to transport for all 
 without tmdue preference or property.*^ Equal treatment 
 is nowhere more clearly laid down in the Act than in sec- 
 
 '' See Re Charge to Grand Jury, " Railroad Commission of Tennes- 
 
 66 Fed. 146, in regard to the demoral- see v. A. A. R. R., 17 I. C. C. 418. 
 
 ization caused by distributing free ™ Avery Mfg. Co. v. A., T. & S. F. 
 
 passes. Ry., 16 I. C. C. 20. 
 
 '< In re Rates on Salt, 24 I. C. C. " Standard Lime & Stone Co. v. 
 
 192. Cumberland VaUey R. R., 15 I. C. C. 
 
 '' Chamber of Commerce of New 620. 
 
 York V. N. Y. C. & H. R. R. R., 24 ^ Fort Dodge Commercial Club v. 
 
 I. C. C. 55. I. C. R. R., 16 I. C. C. 572. 
 
 ™ Cambria Steel Co. v. B. & O. " National Petroleum Ass'n v. 
 
 R. R,, 15 I. C. C. 484. L. & N. R. Co., 15 I. C. C. 473. 
 
 [ 543 1 
 
§ 624 ] Raileoad Rate Regulation 
 
 tions 2 and 3, to the test of which all questions of prefer- 
 ence or priority should be referred first of all.*^ The 
 word contemporaneous in these sections means at the 
 same time with the offending rates; and as long as these 
 rates remain in force the services rendered to a complain- 
 ing and to a favored shipper are contemporaneous within 
 the meaning of the Act.*'' Altogether the fundamental 
 principle of the Act in the view of the Commission is one 
 of fair play; a railroad cannot nowadays put in force pref- 
 erences or priorities, even though by following such course 
 of procedure it can develop the greatest amount of traffic 
 for itself.** Such business policies, it is at last realized 
 after bitter experience, are inconsistent with the funda- 
 mental duties of common carriers. 
 
 Topic B. What Constitutes Statutory Discrimination 
 
 § 624. What amounts to a rebate. 
 
 Not only are the outright discounts and the obvious 
 rebates of the earlier time illegal, but any device by which 
 the charge to a shipper is made less than the schedule rate 
 is now held to be discrimination. Thus free cartage for 
 the collection and delivery of freight for certain shippers 
 only has been held by the Supreme Court to be an illegal 
 rebate.*^ And an unpublished allowance to certain shippers 
 of a certain sum for the use of their private sidings, has 
 long been considered by the federal courts as a case of 
 illegality.*® As such obvious devices have thus become 
 too dangerous, more elaborate schemes have developed 
 for getting an advantage in rates. Thus many large con- 
 cerns have organized, often as a separate concern, an in- 
 dustrial railway from their premises to the trunk line. 
 They may thus attempt to pose as a connecting carrier, 
 
 «2 Rail & River Coal Co. v. B. & «' Wight v. United States, 167 
 
 O. R. R., 14 I. C. C. 86. U. S. 512, 42 L. ed. 258, 17 Sup. Ct. 
 
 s'Re Underfilling, 1 Int. Com. 822. 
 
 Rep. 813, 1 1. C. C. 633. «« Chicago & A. Ry. v. United 
 
 " Mobile Chamber of Commerce States, 156 Fed. 558. 
 V. M. &0.R. R.,23I.C. C. 417. 
 
 [544] 
 
General Principles [ § 625 
 
 and not only obtain from the trunk line a division of the 
 rate to market but that disproportionately large share 
 which the originating carrier gets.*' Another late scheme 
 is the organization of a dimmiy transportation company by 
 a manufacturing company to carry its products to market, 
 getting as payment not only the rental of their special 
 cars at extraordinarily high rates but a virtual commission 
 for furnishing the business.^ It is needless to say that 
 the courts have now become too sophisticated to be thus 
 imposed upon. Indeed rebating in all its forms has now 
 become a very smoky sin indeed, and anyone who is con- 
 cerned in it will be smutted. The cases cited in this sec- 
 tion are noted only by way of illustration without any 
 attempt to make in this place anything hke a compre- 
 hensive statement of principles involved. Indeed, it will 
 take nothing less than a study of the eight chapters con- 
 stituting this Book to gain any idea of the scope of these 
 rules at the present day. 
 
 § 625. Prohibition of special rates. 
 
 Since its work of administering the Act began, the Com- 
 mission has never had any question that any device by 
 which the charge to a patron is made less than the sched- 
 uled rate is a rebate, and is forbidden by the Act.*' Even 
 if it is a practice of which others may avail themselves, 
 a discount allowed to shippers of a certain amount of 
 goods within a year is objectionable.*" So free cartage for 
 the collection and delivery of freight, not mentioned in 
 the published schedule, is an illegal rebate.®^ And even 
 if published, if open only to certain customers, it is illegal 
 in itself.'^ So the practice of allowing a tank shipper of 
 
 " See United States v. Atchison, dence & W. R. R., 1 Int. Com. Rep. 
 
 T. & S. F. R. R., 142 Fed. 176. 363. 
 
 88 See United States v. Milwaukee " Stone v. Detroit, G. H. & M. Ry., 
 
 Refrig. Transit Co., 145 Fed. 1007. 3 Int. Com. Rep. 60, 3 I. C. C. 613. 
 
 "Re Boston & M. R. R., 3 Int. "^^ Hezel Milling Co. v. St. Louia, 
 
 Com. Rep. 793. A. & T. H. Ry., 3 Int. Com. Rep. 701, 
 
 " Providence Coal Co. v. Provi- 5 I. C. C. 57. 
 
 35 [ 545 ] 
 
§ 626 ] Railroad Rate Regulation 
 
 oil an arbitrary deduction of a certain number of gallons 
 per tank car is wholly indefensible, when no correspond- 
 ing allowance is' made for leakage and evaporation from 
 shipments in barrels.*' So the employment of brokers or 
 scalpers as a device to give low rates is illegal; and sales 
 by such brokers at less than tariff rates are forbidden.'^ 
 And a device by which a rebate running to the benefit 
 of those whom the carrier is seeking to favor will not 
 defeat the Act.*^ Section 2 of the Act prohibits charging 
 to one a greater or less compensation than is charged to 
 another for a like and contemporaneous service under sub- 
 stantially similar circumstances and conditions.*^ It was 
 the purpose of section 2 to enforce equality between 
 shippers, and it prohibits any rebate or other device by 
 which two shippers shipping over the same line, the same 
 distance, under the same circumstances of carriage, are 
 compelled to pay different prices therefor.*' 
 
 § 626. Explanation of this policy. 
 
 Thus the statute provides a complete system. It pre- 
 vents rebating by making the published rate obligatory 
 on all concerned, and it gives reUef from unfair published 
 rates by complaint to the Commission. This policy is 
 thus emphasized in a recent opinion: ** "The object of the 
 statutes relating to interstate commerce is to secure the 
 transportation of person and property by common car- 
 riers for reasonable compensation. No rate can possibly 
 be reasonable that is higher than anybody else has to pay. 
 Recognizing this obvious truth, the law requires the car- 
 rier to adhere to the published rate as an absolute stand- 
 ard of uniformity. The requirement of publication is 
 
 "' Rice V. Western N. Y. & P. R. ^ In re Advances in Demurrage 
 
 R., 3 Int. Com. Rep. 162, 4 I. C. C. Charges, 25 I. C. C. 314. 
 
 131. " In re Advances on Manganese 
 
 9«Re Passenger Tariffs, 2 Int. Ore, 25 1. C. C. 663. 
 
 Com. Rep. 445, 2 I. C. C. 649. "" State v. Chicago & A. Ry., 148 
 
 »«Re TJnderbilling, 1 Int. Com. Fed. 648. 
 Rep. 813, 1 I. C. C. 633. 
 
 [546] 
 
General Principles [ § 627 
 
 imposed in order that the man having freight to ship may 
 ascertain by an iaspection of the schedules exactly what 
 will be the cost to him of the transportation of his prop- 
 erty; and not only so, but the law gives him another and 
 a very valuable right, namely, the right to know, by an 
 inspection of the same schedule, exactly what wUl be the 
 cost to his competitor of the transportation of his com- 
 petitor's property." Still more emphatic is the language 
 in a later case:'' "Effective railroad rate regulation 
 must begin with publicity of rates. To be pubUc the 
 rates must be laid before the Interstate Commerce Com- 
 mission, must be kept in the stations of the carriers for the 
 information of the pubHc, and must also be printed in 
 such form that they shall be intelligible to the average 
 shipper upon examination. All of this was perceived by 
 the lawmakers 20 years ago, and the rules, based upon 
 these considerations, then written into the law, have con- 
 tinued unchanged, except as they have been from time to 
 time strengthened and amplified." 
 
 § 627. What discrimination is forbidden. 
 
 The discrimination forbidden by the Act is not con- 
 fined to any one form of unfair dealing. It need not be 
 accompUshed by any particular device; and, on the other 
 hand, no device will prevent an unreasonable preference 
 from being unlawful.^ It includes preference in rates: ^ 
 in classification:^ and in the furnishing of facilities.^ The 
 discrimination must be actual, not merely contemplated, 
 as by offering a discriminative rate which is not accepted '" 
 or by giving a concession to a shipper which is not shown 
 
 » United States V. Illinois Terminal 2 Int. Com. Rep. 15, 3 I. C. C. 
 
 Co., 168 Fed. 546. 435. 
 
 > Scofield V. Lake Shore & M. S. ■■ Re Morris, 2 Int. Com. Rep. 617. 
 
 R. R., 2 Int. Com. Rep. 67, 2 I. C. C. * Lehigh Valley R. R. v. Ramey, 
 
 90. 112 Fed. 487. See also Griffee v. 
 
 2 United States v. Tozer, 37 Fed. Burlington & M. R. Ry., 2 Int. Com. 
 
 635, 2 Int. Com. Rep. 597, on appeal, Rep. 194; Richmond Elevator Co. v. 
 
 39 Fed. 904. Pere Marquette R. R., 10 I. C. C. 
 
 ' Bates V. Pennsylvania R. R., Rep. 629. 
 
 [547] 
 
§ 628 ] Railroad Rate Regulation 
 
 to have been refused to any other shipper." The Act ap- 
 phed only to the future; it did not embrace cases which 
 occurred before it was passed.^ Section 2 embodies the 
 phrase, "under substantially similar circumstances and 
 conditions," but this might be included in the words "in 
 any respect whatsoever" contained in section 3.* Every 
 efifort of the carriers to compel acciiracy and honesty in 
 description of freight deserves support; conscious mis- 
 representations are misdemeanors and criminal, and should 
 be rigorously suppressed.^ Any regulation or practice 
 that withdraws from a shipper the equal opportunity of 
 using and taking advantage of the rates offered by a car- 
 rier to the public, is clearly a regulation or practice af- 
 fecting rates in the sense in which that phrase is used in 
 the Act as amended in 1906.^° Where a shipper is lo- 
 cated ia a district to which a uniform rate has been ap- 
 plied, he is entitled to the same rates as any other shipper 
 in the district, although his shipments may be originated 
 by a different railroad than that serving the other ship- 
 pers. ^^ 
 
 § 628. Departure from published rate. 
 
 The Act requires carriers to publish their tariffs and to 
 adhere to those tariffs; in no other way could discrimina- 
 tions which had existed be prevented; and, therefore, in 
 enforcement of these provisions the Commission has no 
 discretion. 1^ Failure on the part of the shipper to pay, 
 or of the carrier to collect, the full freight charged based 
 upon the lawfully published rate for the particular move- 
 ment between two given points, constitutes a breach of 
 
 ^ United States v. Ganley, 71 Fed. ' Western Classification Cafie, 25 
 
 672. I. C. C. 442. 
 
 ' Ottinger v. Southern Pac. R. R., "> Rail and River Coal Co. v. B. & 
 
 1 Int. Com. Rep. 607, 1 I. C. C. O. R. R. Co., 14 I. C. C. 86. 
 
 144. " Pennsylvania R. R. v. Inter- 
 
 « Board of Trade of CarroUton national Coal M. Co., 173 Fed. 1. 
 
 v. C. of G. Ry. Co., 28 I. C. C. '« Ames Bros. Co. v. Rutland R. R., 
 
 154. 16 I. C. C. 479. 
 
 [648] 
 
Geneeal Principles [ § 629 
 
 the law, regardless of the rate inserted in a bill of lading. ^^ 
 The word "discrimination" as used in the Elkins Act is 
 employed in its common sense, as well as with whatever 
 enlarged or more definite meaning the context of the 
 amendment of 1906 gives to it; thus a shipper who is 
 permitted to settle his charges by paying a "less or dif- 
 ferent compensation" to the carrier is accepting or re- 
 ceiving a "discrimination."" In a prosecution under this 
 Act against a shipper for the acceptance of a concession, 
 it is for the court, and not for the jury, to determine 
 whether documents filed with the Commission are suffi- 
 ciently definite to estabUsh the rate in question between 
 the points in question." If inequality results from the 
 exaction of a special rate to one shipper, and a different 
 rate to another upon like traffic contemporaneously trans- 
 ported under substantially similar circumstances and con- 
 ditions, section 2 is violated." The paramount duty under 
 the Act is to avoid discrimination or the suspicion of any 
 device to work a discrimination." 
 
 § 629. Sanctity of the scheduled rate. 
 
 The strict provisions against rebating contained in the 
 Act are based upon an ingenious, and apparently effect- 
 ive plan. A schedule of rates, prepared by the carrier, 
 must be filed with the Commission, and duly published, 
 as it required.^* When this has been done, the rate so 
 scheduled cannot be changed by the railroad, without the 
 filing and sufficient publication of a new rate. The doc- 
 trine is carried to such an extent that, even if a shipper 
 is at first charged a lower rate quoted him by a freight 
 agent, he can be compelled to pay the difference between 
 
 " Poor Grain Co. v. C, B. & Q. 1° Moran & Son v. Mo. Pac. Ry., 
 
 Ry., 12 I. C. C. 118. 11 I. C. C. 598. 
 
 » U. S. V. Sunday Creek Co., 194 " R. R. Com. of La. v. St. L. S. W. 
 
 Fed. 252. Ry., 23 I. C. C. 31. 
 
 " Standard Oil Co. of New York v. '* Due publication of rates may be 
 
 U. S., 179 Fed. 614. required by legislation. Stone et al. 
 
 V. Yazoo & M. V. R. R., 62 Miss. 607. 
 
 [549] 
 
§630] Railroad Bate Regulation, 
 
 this and the scheduled rate." If the rate so published is 
 unreasonable in itself, or otherwise disproportionate, 
 nevertheless the shipper cannot accept, nor the railroad 
 grant, a departure from it.^" The shipper's remedy is a 
 complaint to the Commission, which will result, if success- 
 ful, in a reduction for the future, and in damages for past 
 unfair exactions. It follows that not only are rebates to 
 favored individuals without any basis of justification made 
 criminal, but even special rates for granting concessions 
 for good reasons, if they have not been publicly offered. 
 And it is also criminal for railroads or shippers to receive 
 or give less than the published rates, even though both 
 parties agree that the published rates are unreasonable 
 and discriminatory. Indeed, it is easy to see that any 
 power to the parties concerned to alter the published rates 
 on the ground that they are illegal, would put an end to 
 the effectiveness of the whole Act. The scheduled and 
 published rate is a public record, back of which no party 
 can go until it is altered in the ways provided by the 
 Act.''! 
 
 § 630. Devices for concealing preference unavailing. 
 
 As has been seen, no device to conceal the preference 
 can operate to evade the statute. Thus imderbilling, a 
 device by which a shipper pays for the transportation of 
 a less quantity of freight than is actually carried, and 
 thereby obtains a reduced rate upon the gross shipment, 
 is plainly with the ban of the Act.^^ So the failure to 
 furnish cars ratably in time of shortage, is regarded by 
 the Commission as an unreasonable preference under its 
 
 " The leading case is Texas & 2' How far shippers are affected 
 
 P. R. R. Co. V. Mugg, 202 U. S. 242, with familiarity with schedules which 
 
 50 L. ed. 1011, 26 Sup. Ct. 828, they are invited to inspect may be 
 
 discussed in Chapter XXII, infra. seen in Mannheim Ins. Co. v. Erie 
 
 ™ The leading case is Texas & P. & W. Tr. Co., 72 Minn. 357, 75 N. W. 
 
 Ry. V. Abilene Cotton Oil Co., 204 602. 
 
 U. S. 426, 51 L. ed. 553, 27 Sup. 22 1^ ^^ Underbilling, 1 Int. Com. 
 
 Ct. 350, discussed in Chapter XXII, Rep. 813, 1 I. C. C. 633. 
 infra. 
 
 [550] 
 
General Principles [ § 631 
 
 provisions.^' A complainant was unjustly discriminated 
 against by defendant's refusal to provide cars for the ship- 
 ment of cross ties, while it did furnish cars to other 
 persons for the interstate shipment of lumber, stone, and 
 many other freight articles, and also supplied cars for the 
 shipment of cross ties destined almost entirely for its own 
 use.^* And, for obvious reasons, the payment of an im- 
 reasonable rent for the use of cars furnished by shippers 
 creates an unreasonable preference. ^^ The Commission 
 cannot sanction any theory of rate making on which a 
 rate is published with the intention of having it used only 
 by one shipper, or only for articles to be employed in a 
 special undertaking, and cancelling it when it is discovered 
 that the rate is to be shipped under by others. ^^ Where 
 a carrier agrees to make a lower rate, lowers the rate after 
 the movement begins, and then cancels it after the move- 
 ment discontinues, the lower rate estabhshed is on its 
 face in the form of a rebate, giving special privileges to a 
 certain shipper, who has special knowledge of the lowering 
 of the rate." 
 
 § 631. Certain unlawful devices considered. 
 
 Under the Elkins Act making it criminal for a shipper, 
 by any device whatever, to secure the transportation of 
 property at a less rate than that named in the tariffs 
 pubhshed and filed by the carrier, it is not necessary to 
 support a conviction that the preference be obtained by 
 fraudulent schemes or devices, or by dishonest or under- 
 handed methods, since the term "device" includes any- 
 thing which works a plan or contrivance.^^ In such 
 
 2' Richmond Elevator Co. v. Pere ^ American Creosote Works v. 
 
 Marquette R. R., 10 I. C. C. Rep. I. C. R. R., 18 I. C. C. 212. 
 
 629. " Alphons Custodis Chimney Con- 
 
 " Paxton Tie Co. v. Detroit S. Ry., struction Co. v. S. Ry., 16 I. C. C. 
 
 10 I. C. C. 422. 684. 
 
 =' Rice V. Cincinnati, W. & B. R. ^ Armour Packing Co. v. U. S., 
 
 R., 3 Int. Com. Rep. 841, 5 1. C. C. 209 U. S. 56, 28 Sup. Ct. 428, 52 
 
 193. L. ed. 681. 
 
 [551] 
 
§ 632 ] Railroad Rate Regulation 
 
 prosecutions against a railroad company for granting con- 
 cessions, it is for the jury to determine, upon the evidence, 
 whether a cancellation of demurrage charges by the de- 
 fendant carrier was a vahd settlement of a disputed claim, 
 or was a cancellation made for the purpose of extending 
 a concession to a favored shipper.^' In one proceeding it 
 was found that a carrier took ten millions in non-interest 
 bearing certijficates of indebtedness of a coal company; as 
 at five per cent per annum, the interest on these certifi- 
 cates would be five hundred thousand dollars, it was held 
 that this sum was in all substantial respects a rebate to 
 the coal company, giving it to the extent that it could 
 settle its coal bills in this way an unlawful advantage 
 over independent dealers.'" In an earher proceeding the 
 Commission had been lenient enough to say that, while 
 settlements for advancement made by shippers for the 
 construction of switch tracks may be based on shipments, 
 repayments must not be made out of the rate, but out of 
 available funds at the end of definite intervals.^' 
 
 § 632. Schemes to cover discrimination. 
 
 Discrimination would apparently result from a lease by 
 an interstate carrier of trackage rights over a connecting 
 line to a quarry, for the purpose of hauling with its own 
 crew ballast for use on its line.^^ The discriminatory 
 practice of leasing elevators at unduly low rental or 
 operating the same through subsidiary corporations has 
 often been condemned. '^ Certainly, it is an unlawful 
 preference to lease an elevator at nominal rental to one 
 
 ^ United States v. Philadelphia v. Ft. S. & W. R. R., 12 I. C. C. 503. 
 
 & R. Ry., 184 Fed. 543. But see Chesapeake & O. Ry. v. 
 
 8" Meeker & Co. v. Lehigh Valley Standard Lumber Co., 174 Fed. 107, 
 
 R. R., 21 I. C. C. 129. In United where an allowance of 10% off his 
 
 States V. Hocking Valley R. R., 210 freight bills was made a shipper who 
 
 Fed. 735, it was held that taking the had built a tie hoist to load his ties, 
 
 securities of a shipper in payment '^ In re Restricted Rates, 20 I. C. 
 
 of freight bills was in itself contrary C. 426. 
 
 to the provisions of the Act. " Omaha Grain Exchange v. A., T. 
 
 " Weleetak Light & Water Co. & S. F. Ry., 28 I. C. C. 664. 
 
 [552] 
 
General Principles [ § G33 
 
 competitor, by reason of the advantage in his business 
 which he thereby acquires from the favor of the carrier.''' 
 But query whether there is anything objectionable in 
 having land for purpose of building a tank leased by 
 railroad to a shipper at rental said to be equal to six per 
 cent of the value of land so leased.''^ Making delivery of 
 carloads free at a certain wharf, while charging where 
 delivery is made at other wharves, constitutes an illegal 
 discrimination.'* But it is not necessarily an unduly 
 preferring if certain receivers of produce in carload lots are 
 allowed to rent its facilities at terminals.'^ The Conamis- 
 sion cannot permit a refund applicable to a particular 
 shipment for the sole purpose of enabling carriers to make 
 good a rate not in effect when the shipment moved, but 
 which they had agreed to protect; such a practice would 
 do away with the published tariff altogether if generally 
 applied. '* Charging lower rates to one of two manufac- 
 turers at the same point cannot be justified on the ground 
 that there is no competition between them in the sale of 
 their products.'^ 
 
 § 633. Criminal proceedings for discrimination. 
 
 A criminal charge under the Elkins Act for receiving a re- 
 bate whereby property is transported at less than the 
 pubUshed rates involves a single continuous offense, not a 
 series of offenses.^" Where a shipper makes a number of 
 shipments, and pays the full legal rate on each, and the 
 carrier remits by various checks a portion of this rate, 
 each remittance constitutes a separate offense.*^ An in- 
 
 " Brook-Ranch M. & E. Co. v. v. T. & P. Ry., 17 I. C. C. 333. 
 
 M. Pac. Ry., 17 I. C. C. 158. "Union Tanning Co. v. So. Ry., 
 
 '' Molasses Rates from MobUe, 25 I. C. C. 112. 
 
 28 I. C. C. 666. '"'Armour Packing Co. v. U. S., 
 
 '6 Re Wharfage FaciUties at Pen- 209 U. S. 56, 52 L. ed. 681, 28 Sup. 
 
 aacola, 27 I. C. C. 252. Ct. 428. 
 
 " Wholesale Produce Dealers' Ass'n " New York C. & H. R. R. R. v. 
 
 V. L. I. R. R. Co., 26 I. C. C. 413. United States, 212 U. S. 481, 53 
 
 M Crowell & Spencer Lumber Co. L. ed. 613, 29 Sup. Ct. 304. 
 
 [ 553 ] 
 
§ 634 ] Railroad Rate Regulation 
 
 dictment is not bad on demurrer for alleging for greater 
 ease of proof as many payments as there were separate 
 shipments, although the evidence may show that all the 
 shipments were rebated for one payment by the carrier, 
 and that, therefore, only one offense was committed. ^^ 
 An indictment against a shipper for accepting a concession 
 below the pubHshed rate is not bad on demurrer for 
 failure to allege the payment by the defendant to the 
 carrier of the alleged unlawful rate/^ In an indictment for 
 accepting and receiving a concession, proof that a shipper 
 has agreed to accept a concession, stopping there, will 
 not support an indictment for accepting a concession, 
 until the intended wrong becomes an accepted fact by the 
 actual payment of the lower rate, or by some book trans- 
 action resulting in the offsetting of mutual accounts/^ 
 For the rule seems to be that where an indictment charges 
 the acceptance and receipt of money paid as a rebate, and 
 not the acceptance of a concession, there can be no viola- 
 tion of the Act until it is shown that the money intended 
 as a rebate was actually paid/^ But an indictment which 
 alleged the lawful rate to be so much per car, and that 
 defendant carrier charged and received only a certain 
 lower amount per car, sufficiently charges the giving and 
 receiving of a "concession." ** Likewise an indictment is 
 sufficient which alleges the payment of the scheduled rate 
 by the shipper to the carrier, the subsequent payment of the 
 rebate; and it is not necessary that the indictment par- 
 ticularly describe the device resorted to by the carrier to 
 accept the unlawful transportation.*^ 
 
 § 634. What intent is necessary. 
 
 Where a shipper knowingly transports goods at less 
 
 "United States v. Central Vt. "United States v. Bunch, 165 
 
 Ry., 157 Fed. 291. Fed. 736. 
 
 "United States v. Vacuum Oil « Atchison, T. & S. F. Ry. v. 
 
 Co., 158 Fed. 536. United States, 170 Fed. 250. 
 
 " Standard Oil Co. of Indiana v. " Chicago, St. P., M. & O. Ry. v. 
 
 United States, 164 Fed. 376, 386. United States, 162 Fed. 835. 
 
 [554] 
 
General Principles [ § 634 
 
 than the published rate, he is liable to conviction under 
 the Elkins Act, despite the fact that his conduct does not 
 involve turpitude or moral wrong. ^* The corporation 
 which profits by the transaction of rebating may be held 
 punishable by fine, because of the knowledge and intent of 
 its agents to whom it has intrusted authority to act in the 
 subject-matter of making and fixing rates of transporta- 
 tion/' Rebating must be willful in order to constitute a 
 criminal offense; and it is not sufficient to support a 
 contention against a carrier that it knowingly granted a 
 rate by means of an elevation allowance lower than the 
 published rate without proof that the defendant acted in 
 bad faith.^" It is error to exclude evidence offered on the 
 part of defendant to show that it had no knowledge of 
 the lawfully published rate, especially where the tariffs 
 setting out such rate were involved and somewhat am- 
 biguous.^^ Since to make defendant guilty, the concession 
 granted must have been made willfully, it is error to ex- 
 clude evidence offered bearing upon the intention of the 
 defendant.^* To make a carrier criminally liable under the 
 Act the omission or act complained of must be willful, so 
 an accidental mistake is not the basis of prosecution; 
 but willful does not mean with malice or bad purpose, but 
 simply with knowledge." A carrier in a criminal prosecu- 
 tion cannot be heard to deny that it did not know of a 
 rate which it itself had established in accordance with the 
 law, or urge as a. justification for its departure therefrom, 
 that it charged the lower rate at the insistent demand of 
 the shipper.^* 
 
 ^ Armour Packing Co. v. United *' Standard Oil Co. of Indiana 
 
 States, 209 U. S. 56, 52 L. ed. 681, v. United States, 164 Fed. 376. 
 
 28 Sup. Ct. 428; see also Chicago, B. ^^ Atchison, T. & S. F. Ry. Co. v. 
 
 & Q. R. R. V. United States, 209 U. United States, 170 Fed. 250. 
 
 S. 90, 52 L. ed. 698, 28 Sup. Ct. 439. " United States v. T. & P. R., 
 
 " N. Y. Central v. United States, 185 Fed. 820. 
 
 212 U. S. 481, 53 L. ed. 613, 29 Sup. " United States v. Merchants' 
 
 Ct. 304. & Miners' Transp. Co., 187 Fed. 363; 
 
 "• Chicago, St. P., M. & O. Ry. v. see also Wisconsin C. Ry. v. United 
 
 United States, 162 Fed. 835. States, 169 Fed. 76. 
 
 [555] 
 
§§ 635, 636 ] Railroad Rate Regulation 
 
 § 636. Civil liability for discrimination. 
 
 Discrimination can only injure a complaining shipper, if 
 his rival has been given an unfair advantage in the same 
 market, although different points of destination may be- 
 long to the same market.^'' The Uability under section 9 
 of the Act for unjust discrimination, in making secret 
 allowances to favored shippers, is not held strictly as a 
 penalty in suits in the court for damages, but as a cause of 
 action which survives and may be prosecuted by execu- 
 tors.^* In any case where the published rate is unjustly 
 discriminatory, the Commission has jurisdiction to order 
 reparation to shippers injured thereby, if they can be 
 discovered." But in proceedings on behalf of the govern- 
 ment, it would be a vain attempt in many cases to under- 
 take to ascertain with reasonable certainty just what has 
 resulted, and who has been injured by transactions of the 
 kind; the lawmakers, assuming that such practice would 
 naturally result in many instances in favoritism and 
 irreparable wrong, have enacted the law which adjudges 
 the practice itself to be wrong and forbids it.** The 
 questions relating to commission and court proceedings, 
 both civil and criminal, based upon the allegation and 
 proof of discrimination or preference, are so multifarious 
 that two chapters later on — Chapter XXIII and Chap- 
 ter XXIV — 'are wholly devoted to the detail of these pro- 
 ceedings and the relief granted therein. 
 
 Topic C. Established Exceptions to Rule 
 
 § 636. Public wrong in giving free passes. 
 
 These general principles against personal discrimination 
 should, of course, apply to transportation of passengers as 
 well as to transportation of goods. Dissimilarity of cir- 
 
 " MitcheU Coal & Coke Co. v. Co. v. C, R. I. & P. Ry. Co., 13 I. C. 
 
 Penna. R. R. Co., 181 Fed. 403. C. 128. 
 
 "> Langdon v. Penn. R. R. Co., 194 =8 Armour Car Lines v. S. P. Co., 
 
 Fed. 486. 17 I. C. C. 461. 
 
 " Minneapolis Threshing Machine 
 
 [556] 
 
General Principles [ § 637 
 
 cumstances will justify differences in passenger rates as 
 well as differences in freight rates, but outright discrimina- 
 tion between passengers asking the same service under the 
 same conditions is as odious as personal discrimination 
 between shippers who ask the same service. To quote the 
 language of Commissioner Knapp in Harvey v. Louisville 
 and Nashville Railroad Company: ^' "The fundamental 
 and pervading purpose of the law is equality of treatment. 
 It assumes that the railroads are engaged in a public 
 service, and requires that service to be impartially ren- 
 dered. It asserts the right of every citizen to use the 
 agencies which the carrier provides on equal terms with 
 all his fellows, and finds an invasion of that right in every 
 unauthorized exemption from charges commonly imposed. 
 No form of favoritism and no species of partiality seems 
 more odious or indefensible than that which accords to 
 personal influence or pubhc station privileges not enjoyed 
 by the community at large. The free carriage of certain 
 persons merely' because they occupy official positions, or 
 have acquired some measure of distinction, offends the 
 rudest conception of equafity, and contravenes alike the 
 policy and the provisions of the statute. The practices 
 complained of in this proceeding are illegal, and must 
 receive our condemnation." ^^ 
 
 § 637. Passes prima facie discrimination. 
 
 It was formerly customary to give free passes very 
 freely to the famihes and acquaintances of those connected 
 with the railroad management, and also to various gentle- 
 men whose claim for the privilege of free transportation 
 was based upon the fact that they were long eminent in 
 the public service, higher officers of the States, prominent 
 officials of the United States, members of legislative rail- 
 s' 5 I. C. C. Rep. 153. purpose of the Act to place all ship- 
 6» The object of the Act is to pre- pers upon equal terms. Colorado 
 vent favoritism by any means or Free Pass Investigation, 26 I. C. C. 
 device whatsoever and to prohibit 491. 
 practices which run counter to the 
 
 [557] 
 
§ 638 ] Railroad Rate Regulation 
 
 road committees, and persons whose good will was claimed 
 to be important to the railroad.®' Within the last few 
 years the statute law and the interpretation of it based 
 upon common-law principles has become increasingly 
 opposed to the issue of such passes. The temper of the 
 courts under the new regime may be judged from the 
 following language, often cited, used in a charge to the 
 Grand Jury®^ by Morrow, District Judge, when he said 
 squarely: "In other words, one of the objects of Congress 
 in this character of legislation was to do away with the 
 pernicious practice of unjust discriminations in rates, and 
 to break up the odious system of favoritism and special 
 privileges, so contrary to the principles of our govern- 
 ment, of which one of the fimdamental ideas is that all 
 men are equal id the eyes of the law, and should be so 
 treated. It was designed by the Act referred to, to compel 
 common carriers of interstate commerce to discharge their 
 public function impartially in charging for transportation; 
 treating everybody aUke, so far as that* is practicable, 
 whether in high or low station, whether public functionary 
 or private citizen, whether rich or poor." 
 
 § 638. Reductions for general classes. 
 
 The suggestion is made in several cases that general 
 reductions may be made to further certain policies, pro- 
 vided that the public interests are thereby promoted. It is 
 urged that such concessions, if permitted, will turn out 
 for the best interests of all concerned in the end. The 
 weight of this line of argument may be judged by the 
 following abstract of part of the opinion of Judge Baxter 
 in Hays v. Pennsylvania Company.®' He said in effect 
 
 " This list is largely made up from v. Southern Ry. Co., 125 N. C. 666, 
 
 a description of the former situation 34 S. E. 527. 
 
 in St. Louis & S. F. Ry. Co. v. Had- «' 12 Fed. 309. 
 
 ley, 168 Fed. 317. See also State v. This principle was aJso urged in 
 
 Martyn, 82 Neb. 225, 117 N. W. 719, Lough v. Outerbridge, 143 N. Y. 
 
 23 L. R. A. (N. S.) 217. 271, 38 N. E. 292, 42 Am. St. Rep. 
 
 «=i 66 Fed. 146. See further State 712, 25 L. R. A. 674. 
 
 [558] 
 
General Pbinciples [ § 639 
 
 that it is only when the discrimination inures to the undue 
 advantage of one man, in consequence of some injustice 
 inflicted on another, that the law intervenes for the protec- 
 tion of the latter. Harmless discrimination such as a 
 concession to a general class might be indulged in. For 
 instance, he said that the carrying of supplies at nominal 
 rates to communities scourged by disease or rendered 
 destitute by floods or other casualty would not entitle 
 other communities to have their supplies carried at the 
 same rate. Furthermore, it is the custom as he pointed 
 out for railroad companies to carry fertilizers and ma- 
 chinery for mining and manufacturing purposes to be 
 employed along the hnes of their respective roads to 
 develop the country and stimulate productions, as a means 
 of insuring a permanent increase of their business at lower 
 rates than are charged on other classes of freight; and such 
 discrimination while it tends to advance the interest of 
 all, worked no injustice, he thought, to anyone.** 
 
 § 639. Whether statutory exceptions are exclusive. 
 
 Under the old regime many classes of people got free 
 transportation or reduced rates. So far did this go, that 
 many decisions spoke of exceptional classes for which con- 
 cessions were legally justifiable. In the original Act, there 
 were express provisions as to certain classes of reduced 
 rates, but the statutory hst omitted many usual conces- 
 sions. When this was brought to the attention of the 
 Supreme Com-t, it was held *^ that the list was not ex- 
 
 •* In Hoover v. Penna. R. R. Co., could not be made to a manufacturer 
 
 156 Pa. St. 220, 27 Atl. 282, 36 Am. of furniture than for lumber for local 
 
 St. Rep. 43, 22 L. R. A. 263, it was consumption. 
 
 held in accordance with these prin- « The quotation is from the opinion 
 
 ciples that a lower rate might be of Mr. Justice Brown in Interstate 
 
 made for coal brought in by factories Com. Comm. v. Baltimore & O. 
 
 than for coal consigned to coal yards. R. R., 145 U. S. 163, 36 L. ed. 699, 
 
 But see Hilton Lumber Co. v. 12 Sup. Ct. 844. 
 Atlantic C. L. Ry., 136 N. C. 479, See Schuyler v. Southern Pacific 
 
 48 S. E. 813, in which it was held that Co., 37 Utah 612, 109 Pac. 458, 
 
 a lower in-bound rate on lumber passes for care takers held permissible. 
 
 [559] 
 
§ 640 ] Railroad Rate Regulation 
 
 elusive, but indicated the sort of exceptions that could be 
 made. In other words, this section is rather illustrative 
 than exclusive. "Indeed," said the court, "many if not 
 all, the excepted classes named are those which, in the 
 absence of this section, would not necessarily be held the 
 subjects of an unjust discrimination, if more favorable 
 terms were extended to them than to ordinary passengers. 
 Such, for instance, are property of the United States, 
 State or municipal governments; destitute and homeless 
 persons transported free of charge by charitable societies; 
 indigent persons transported at the expense of municipal 
 governments; inmates of soldiers' homes, and ministers of 
 rehgion." To remedy this indefinite condition, one of the 
 amendments of 1906 contains a most elaborate list of the 
 instances where free transportation or reduced rates may 
 be given different patrons asking substantially the same 
 service. It is now properly held that this list is exclusive; 
 and no other outright discriminations to excepted classes 
 can be made. In a recent case in the Supreme Court ^ 
 the opinion was clear now to the effect that as the 
 legislation was specific it could not be construed away: 
 "We think it was the intention of Congress to prevent a 
 departure from the published rates and schedules in any 
 manner whatsoever. If this be not so, a wide door is 
 opened to favoritism in the carriage of property, in the 
 instances mentioned, free of charge." 
 
 § 640. Special forms of passenger tickets. 
 
 The provision of the Act allowing the issuance of mile- 
 age, excursion and commutation tickets, authorizes special 
 rates to commuters, which are less per mile than the 
 charges to other passengers for long distances; but these 
 differences are not vmjust in the eye of the law, nor are 
 
 " The quotation is from the opinion See State v. Union Pacific Co., 
 of Mr. Justice Day in American 87 Neb. 29, 126 N. W. 859, ex- 
 Express Co. V. United States, 212 change of transportation for publicity 
 U. S. 522, 53 L. ed. 635, 29 Sup. Ct. forbidden. 
 315. 
 
 [560] 
 
General Principles [ § 641 
 
 places outside the commutation territory thereby sub- 
 jected to undue prejudice within the purview of the Act.*' 
 A party-rate ticket, it was said in the Baltimore & Ohio 
 case discussed in the previous section, is not a "mileage" 
 or "excursion" ticket, within the provisions of this sec- 
 tion; nor does it seem to be included in the phrase "com- 
 mutation ticket;" but it was held that special party-rate 
 tickets, being of this general class, might be sold at a 
 lower rate of fare, though not enumerated in section 22.^* 
 It would seem that, under the amendments of 1906, this 
 interpretation must remain unchanged, so far as the car- 
 riage of goods under dissunilar circumstances or the issu- 
 ance of special forms of tickets are concerned; but the 
 enumeration of persons to whom free passes may be issued 
 is so exhaustive and so carefully made that it is to be held 
 exclusive, as the second case discussed in the previous 
 section held. All forms of tickets, issued under the saving 
 of this clause, must, however, be sold for a reasonable rate 
 for the particular service and without discrimination to 
 all applicants.*^ Carrying baggage free for such passengers 
 as present it for transportation along with them, it may 
 be noted, is held no discrimination against passengers 
 traveling without baggage.™ But no opinion was expressed 
 upon the lawfulness of a carrier's practice of transporting 
 packages of a certain kind free for commuters or pas- 
 sengers.'' ' 
 
 § 641. Concessions for government business. 
 
 It is generally said that special reductions or even free 
 service may be given a government, of whatever grade it 
 may be, without its being considered undue preference or 
 
 " Sprigg V. B. & O. R. R., 8 Int. «' Freight Bureau v. Cincinnati, 
 
 Com. Rep. 443. N. O. & T. P. Ry., 6 I. C. C. Rep. 
 
 '* See notes 63 and 64, supra; see 195. 
 
 also Larrison v. Cliicago & G. T. ™ Herbeck Demer Co. v. B. & O. 
 
 Ry., 1 Int. Com. Rep. 369, 1 I. C. C. R. R., 17 I. C. C. 85. 
 
 147; Troy Board of Trade v. Alabama " Walker v. B. & O. R. R. Co., 12 
 
 M. Ry., 6 1. C. C. Rep. 1. I. C. C. 196. 
 
 36 [ 561 ] 
 
§ 642 ] Railroad Rate Regulation 
 
 illegal discrimination. Thus the Supreme Court of the 
 United States has squarely said '^ that as a common-law 
 matter, regardless of whether the exception was specific- 
 ally made in the legislation, the property of United States, 
 State, county or mimicipal governments might be trans- 
 ported on more favorable terms than for other parties 
 without its beuig illegal discrimination. In view of the 
 special provisions of the Act appUcable thereto, there can 
 be no doubt that troops and property of the government 
 may be carried at special rates, which need not even be 
 posted or filed.'' The transportation of fish and eggs, 
 distributed by the United States Commission of Fish and 
 Fisheries, has been held within the exception of section 22 
 of the Act.'^* Under this exception the Commission has 
 ruled that a carrier may make special rates with individuals 
 to enable the latter to make proposals to the Interior 
 Department for transportation of Indian supplies, such 
 transportation being for the United States.'* It is, how- 
 ever, improper to permit the benefit of the government 
 rate to accrue to anyone other than government; thus con- 
 tractors on public work are not governments, and cannot 
 be given special rates.'* 
 
 § 642. Reduction for charitable purposes. 
 
 The argument has been made in several cases, most of 
 them early cases, that it could not be contrary to law for 
 the carrier to make occasional concessions in particular 
 cases, as no harm of any considerable sort would be done 
 to others by the granting of such special favors. The ex- 
 ample usually given of such occasional favors is that the 
 railroad might carry for charity in particular instances. 
 If this be so, it must according to modern ideas be subject 
 
 " Interstate Commerce Commis- " Re Indian Supplies, I Int. Com. 
 
 sion V. Baltimore & O. R. R. Co., 145 Rep. 22, 1 1. C. C. 15. 
 
 U. S. 163, 36 L. ed. 699, 12 Sup. Ct. " Havens & Co. v. C. & N. W. 
 
 844. Ry. Co., 20 I. C. C. 156. 
 
 " United States v. So. P. Co., 25 '« Metropolitan Paving Brick Co. 
 
 I C. C. 255. V. Ann Arbor R. R., 17 I. C. C. 197. 
 
 [562] 
 
Genekal Principles [ § 643 
 
 to the most strict limitations; and if this exception re- 
 mains in modem common law it can only be with the 
 qualification expressed by Chief Justice Doe in one of his 
 great cases/'' "This question may be made unnecessarily 
 difficult by an indefiniteness, confusion, and obscurity of 
 ideas that may arise when the public duty of a common 
 carrier, and the correlative common right to his reason- 
 able service for a reasonable price, are not clearly and 
 broadly distinguished from a matter of private charity. 
 If A receives, as charity, transportation service without 
 price, or for less than a reasonable price, from B, who is a 
 common carrier, A does not receive it as a performance of 
 his pubUc duty; C, who is required to pay a reasonable 
 price for a reasonable service, is not injured; and the 
 public, supplied with reasonable facilities and accommoda- 
 tions on reasonable terms, cannot complain that B is 
 violating his public duty. There is, in such a case, no 
 discrimination, reasonable or unreasonable, in that reason- 
 able service for a reasonable price which is the common 
 right. A person who is a common carrier may devote to 
 the needy, in any necessary form of relief, all the reason- 
 able profits of his business. He has the same right that 
 anyone else has to give money or goods or transportation 
 to the poor. But it is neither his legal duty to be charit- 
 able at his own expense, nor his legal right to be charitable 
 at the expense of those whose servant he is." '^ 
 
 § 643. Transportation for the carrier itself. 
 
 A carrier can, of course, lawfully transport, without 
 making charges to itself therefor, materials and supplies 
 
 "McDuffee v. Portland & R. R. must be made for a pass to the proper 
 
 R., 52 N. H. 430, 13 Am. Rep. authority, or the minister will not be 
 
 72. entitled to the reduction. Emerson 
 
 " Rates may be reduced for re- v. Chicago, R. I. & P. Ry., 6 I. C. C. 
 
 ligious teachers as an act of charity, Rep. 289. Charitable institutions 
 
 and missionaries are included in the and clergymen defined: Re Passes 
 
 exception. Re Religious Teachers, for Charitable Institutions, 15 I. C. 
 
 1 Int. Com. Rep. 21. Application C. 45. 
 
 [5631 
 
§ 644 ] Railroad Rate Regulation 
 
 for its own use in its proper business.^' But a carrier may 
 not lawfully transport free, or at a reduced rate, materials 
 for building or repairs on a refrigeration plant built under 
 contract with carrier, but which also engages in coimner- 
 cial ice business.*" Contractors engaged in working upon 
 railroad property may properly be supplied with the trans- 
 portation necessary for carrying on the job at reduced 
 rates or without charges.'^ So it may be provided in con- 
 tracts with other companies, where the railroad partici- 
 pates in the use, that men and materials may be trans- 
 ported without charges for construction and repairs.*^ 
 It has always been permitted that a company may prop- 
 erly pass its own employees and oflBcers, its agents, sur- 
 geons, physicians, and attorneys at law, imless their 
 employment is nominal.*' But it can now pass their 
 families only in so far as the Act provides; although it 
 should be said that as the phrasing relating to this matter 
 now reads there are some ambiguities.*^ 
 
 § 644. Sale and delivery of commodities. 
 
 Where a railroad buys or produces commodities and 
 then sells them and deUvers them to the buyer at a price 
 which really nets the road for its transportation charges 
 less than the scheduled rates the Supreme Court has held 
 that the transaction involves an illegal rebate.*^ The pur- 
 pose of the statute, said the court in that case, was to 
 make the prohibition appUcable to every method of deal- 
 ing by a carrier by which the forbidden result could be 
 brought about.' If the pubUc purpose which the statute 
 was intended to accomplish be borne in mind, its meaning 
 
 ™ In re Transportation of Company ^ Colorado Free Pass Investiga- 
 
 Material, 22 1. C. C. 439. tion, 26 1. C. C. 491. 
 
 «> In re Restricted Rates, 20 I. C. «* Ex parte Koehler, 31 Fed. 315, 
 
 C. R. 426. 1 Int. Com. Rep. 317. 
 
 " Grant Bros. Co. v. Atchison, ^ New York, N. H. & H. R. R. v. 
 
 T. & S. F. Ry., 13 Ariz. 186, 108 Interstate Commerce Commission, 
 
 Pac. 467. 200 U. S. 361, 26 Sup. Ct. 
 
 «2Re Railroad-Telegraph Con- 272. 
 tracts, 12 I. C. C. 10. 
 [564] 
 
General Principles [ § 645 
 
 becomes, if possible, clearer. What was that purpose? 
 It was to compel the carrier, as a pubhc agent, to give 
 equal treatment to all. Now if, by the mere fact of pur- 
 chasing and selling merchandise to be transported, a 
 carrier is endowed with the power of disregarding the 
 pubUshed rate, it becomes apparent that the carrier pos- 
 sesses the right to treat the owners of like commodities 
 by entirely different rules. Consequently it was held in 
 the early days of the Commission that a railroad company 
 violated the Act by developing a system for buying and 
 transporting grain .^* It was held by the Commission, to 
 be sure, in another case *^ that the two railroads in the 
 question might legally mine and sell coal, because they 
 had possessed for a long time before the passage of the 
 Act the legal power to do so; and the Commission could 
 only enforce the requirement that their rates for carriage 
 should be reasonable. Since the policy against transport- 
 ing its own commodities in commerce has been denounced, 
 the Commission has been very sweeping in its generaliza- 
 tions against such arrangements, saying that so long as 
 there is identity of ownership in the agency of transpor- 
 tation and the thing transported it is difficult, if not impos- 
 sible, to prevent discrimination.^ 
 
 § 645. Policy of the commodities clause. 
 
 By the Hepburn Act of 1906, it was provided that, 
 after May 1, 1908, it should be illegal for a carrier to 
 transport property owned by it. In litigation brought to 
 test validity of this commodities clause, as it is called, 
 the Supreme Court *' held that, although the legislation 
 
 *> Re Alleged Unlawful Rates, 7 »» United States v. Delaware & H. 
 
 I. C. C. Rep. 33; see also Re Trans- R. R., 213 U. S. 366, 53 L. ed. 836, 
 
 portation of Coal, 10 1. C. C. 473. 29 Sup. Ct. 527. In D., L. & W. Ry. 
 
 *' Haddock v. D., L. & W. Ry., 3 v. United States, 231 U. S. 363, 34 
 
 Int. Com. Rep. 302, 4 I. C. C. 296; Sup. Ct. 55, the commodities clause 
 
 see also Cox. v. L. V. R. R., 3 Int. was held applicable to the transporta- 
 
 Com. Rep. 460, 4 I. C. C. 435. tion of hay brought by a railroad for 
 
 ** Cedar Hill C. & C. Co. v. A., T. use in mines which it owned. 
 & S. F. Rv., 15 I. C. C. 73. 
 
 [565] 
 
§ 646 ] Railroad Rate Regulation 
 
 was constitutional, it did not apply to the facts of the case 
 before it, which are in fact more often found, where the 
 railroad company did not own the coal itself, but owned 
 the controlling interest in the stock of large coal companies 
 shipping over it. However, the Supieme Court'" has 
 very recently held that, while under the conunodities clause 
 of the Hepburn Act the right of a railroad company as 
 a stockholder in a coal company to use its stock owner- 
 ship for the purpose of a bona fide separate administra- 
 tion of the affairs of the coal corporation may not be 
 denied, the use of such stock ownership for the purpose of 
 destroying the entity of the producing corporation, and of 
 commingling its affairs in administration with the affairs 
 of the railroad company, so as to make the two corpora- 
 tions virtually one, brings the railroad company within the 
 prohibition of the commodities clause. While the Com- 
 mission has not been charged with the enforcement of the 
 clause, it must necessarily take cognizance of any viola- 
 tion thereof whereby a wrong is done by a railroad carry- 
 ing its own coal to other shippers over its lines who are 
 under the protection of the Act.'^ In the latest case before 
 the Commission involving the clause it was held the owner- 
 ship of a railroad by the principal shipper over it was not 
 forbidden by the Act; and at all events such a railroad 
 should not be subjected to discrimination by other carriers 
 even if it were violating the clause.^^ 
 
 § 646. Carriage for other companies. 
 
 Where the stock in one railway company is owned by 
 another railway company, but both maintain separate 
 
 ™ United States v. Lehigh V. E. R., not work a violation of the clause by 
 
 220 U. S. 257, 55 L. ed. 458, 31 Sup. reason of the subsequent transporta- 
 
 Ct. 387. In United States v. Dela- tion of such coal, 
 
 ware, L. & W. Ry., 213 Fed. 240, it »' Consolidated Fuel Co. v. A., T. 
 
 was held that a contract between a & S. F. Ry., 27 I. C. C. 554. 
 
 railroad company and a coal company '^ Campbell's Creek Coal Co. v. 
 
 by which the latter agreed to pur- A. A. R. R., 29 1. C. C. 682. 
 chase coal mined by the former did 
 
 [566] 
 
General Principles [ § 647 
 
 organizations and report separately to Commission, they 
 may not carry freight free for each other.'' The local rate 
 to a junction point should be same for all shippers to that 
 point, and the through charge on shipments going beyond 
 junction should be alike for all shippers to same destina- 
 tion; therefore, where coal is consigned to a point on 
 railroad B from a point on railroad A, the regular rate 
 from point to point should be paid, although this is coal 
 to be used as fuel by the road.'* A railroad company or 
 system cannot lawfully contract, in consideration of free 
 telegraph service or service at reduced rates over wires 
 beyond its own right of way, to furnish free or reduced- 
 rate transportation in coimection with the construction, 
 maintenance, or operation of a telegraph line and service 
 off the line of such company or system and upon the line 
 or lines of another carrier or system.'^ A carrier as a 
 shipper may not have any preference in the application of 
 transportation conditions or in the matter of tariff charges; 
 and conversely a carrier shipping over the lines of another 
 is entitled to the same treatment as any other shipper.'* 
 
 § 647. No obligation to grant such concessions. 
 
 It should be noted, however, here as throughout this 
 whole discussion, that there is no common-law obligation 
 resting upon the company to give concessions of any kind 
 from the rates others pay for the same service. This 
 makes one doubtful of the legal character of these excep- 
 tions as an abstract matter of common law; for were there 
 imperative reasons dictating such exceptions, a company 
 could not refuse to make them in any case. And, indeed, 
 
 " In re Restricted Rates, 20 1. C. C. Right of Railroad Companies to 
 
 426. Exchange Transportation, 12 I. C. C. 
 
 '* Interstate Commerce Commis- 39. 
 
 sion V. Baltimore & O. R. R., 225 '^Re Transportation of Company 
 
 U. S. 326, 56 L. ed. 1107, 32 Sup. Ct. Material, 22 I. C. C. 439; see also 
 
 742. Hutchison C. & C. Co. v. B. & O. 
 
 '6 Re Raikoad Telegraph Con- R. R., 16 I. C. C. 512. 
 tracts, 12 I. C. C. 10. See also Re 
 
 [567] 
 
§ 648 ] Railroad Rate Regulation 
 
 it is significant that it is well agreed that the company 
 need not make any such concessions. It may even refuse 
 to the United States government a party-rate ticket for 
 soldiers which it usually sells to other managers of travelers 
 in groups, as one extreme case holds."" Moreover, it may 
 discriminate in granting its favors, which is proof positive 
 that this is no part of its legal obligation. Thus a par- 
 ticular minister of the gospel .whom a carrier refused to 
 carry for the customary reduced fare charged such persons 
 has no right of action against the carrier because of the 
 discrimination.'* The most that these exceptions amount 
 to, therefore, is that there is a sufficient public policy in 
 them to justify the legislation extending these special favors. 
 
 § 648. Collateral restUts of illegal discrimination. 
 
 Any contract entered into for the performance of any- 
 thing to be done in violation of the Act is, of course, 
 unenforceable in the courts. Thus where a special service 
 was contracted for, which was not covered by the rate as 
 scheduled, it was recently held by the Supreme Court that 
 no action could be brought for breach of the contract to 
 forward in the way promised. '' So where a contract with 
 the carrier provides for refund to the shipper of a portion 
 of a published interstate rate, it was held by a state court 
 that such a contract cannot be enforced, even though the 
 shipper may not have known that he was violating the 
 law.^ The extent to which such illegality taints collateral 
 
 " United States v. Chicago & N. Refusal to return free property 
 
 W. R. R. Co., 127 Fed. 785. exhibited at National Dairy Show 
 
 In so far as the laws adminis- Asso. in Chicago, while returning 
 
 tered by this Commission are con- free property exhibited at State 
 
 cemed, the right of carriers to trans- fairs and expositions at Syracuse 
 
 port government property free or at and Trenton not found unduly dis- 
 
 reduced rates is elective and not criminatory. Dairymen's Supply Co. 
 
 mandatory. United States v. U. P. v. P. R. R. Co., 28 I. C. C. 406. 
 
 R. R. Co., 28 I. C. C. 518. ^ Chicago & A. R. R. v. Kirby, 
 
 » Illinois C. R. Co. v. Dunnigan 225 U. S. 155, 56 L. ed. 1033, 32 Sup. 
 
 (Miss.), 50 So. 443, 24 L. R. A. (N. Ct. 648. 
 
 S.) 503. 'Louisville & N. R. R. Co. v. 
 
 [568] 
 
Genekal Principles [ § 648 
 
 transactions so as to bar the plaintiff from recovery is a 
 question on the authorities. Where a shipper has himself 
 enjoyed an unlawful rate, he caimot naturally recover for 
 unjust discrimination against a carrier for giving a com- 
 petitor on Uke shipment a lower rate stUl.^ And it would 
 be agreed that a shipper declaring false value to secure a 
 reduced rate is estopped, in case of loss or damage, from 
 denying correctness of value given. ^ It has been held the 
 fact that a rate given to a shipper violates the provi- 
 sions of the Act in regard to adherence to schedules 
 filed with the Commission does not preclude the shippers 
 from recovering for goods destroyed by carrier.* And one 
 who travels on a free pass, given in violation of this sec- 
 tion, according to some authorities, may recover damages 
 for injuries due to negligence of the railroad company; 
 thus ^ a railway clerk riding on a pass while off duty has 
 been allowed to recover for injuries.* On the other hand, 
 in at least one case a man riding on a pass given and taken 
 in violation of law has been refused recovery.' And it has 
 been held that where a railroad carries for a customer at 
 less than the scheduled rates, wrongfully intending to give 
 him a rebate therefrom, being in pari delicto it cannot 
 recover the unpaid part of the scheduled rate.' The effect 
 of a violation of the Interstate Commerce Act is to make 
 the contract of carriage including the rate named therein, 
 invalid; the carrier therefore cannot be sued for breach of 
 an executory term of the contract.^ No suit, therefore, 
 can be brought by a shipper against a railroad for breach 
 
 Coquillard Wagon Wks., 147 Ky. Insua-ance Co. of N. A., 151 U. S. 
 
 .530, 144 S. W. 1080. 368, 38 L. ed. 195, 14 Sup. Ct. 367. 
 
 ' Pennsylvania R. R. Co. v. Inter- '^ Schuyler v. Southern Pacific Co., 
 
 national Coal Mining Co., 173 Fed. 37 Utah, 581, 109 Pac. 458. 
 
 1. ' McNeill V. Durham & C. R. R. 
 
 * In re Express Rates, 28 I. C. C. Co., 132 N. C. 510, 44 S. E. 34. 
 
 132. * Interstate Commerce Commis- 
 
 * Central of Ga. Ry. v. Butler M. sion v. Chesapeake & O. Ry. Co., 128 
 & G. Co., 8 Ga. App. 1, 68 S. E. Fed. 59. 
 
 775. 'Illinois Central R. R. Co. v. 
 
 * Merchants' C. P. & S. Co. v. Seitz, 214 111. ,350, 73 N. E. 585. 
 
 [569] 
 
§ 649 ] Railroad Rate Regulation 
 
 of contract to^ furnish transportation at less than scheduled 
 rates in return for building a siding and providing exclu- 
 sive shipments.^" 
 
 Topic D. Other Considerations for Reductions 
 
 § 649. Other consideration formerly considered dissimilar 
 circumstance. 
 
 Abstractly it is not discrimination if one shipper pays 
 his freight rate in money and another pays the same rate, 
 partly in money and partly in services. This has been 
 permitted in several cases, for example in Rothschild v. 
 Wabash Railroad " where a certain reduction was allowed 
 to certain shippers who acted as "eveners" in distributing 
 the traffic to several railways. In permitting these facts 
 to be shown in justification to a suit based upon this 
 alleged discrimination. Judge Lewis said: "Suppose a 
 railway company, instead of paying its conductor a salary, 
 should choose to compensate his services by a percentage 
 of the receipts from passengers traveling on his train. 
 Suppose the conductor to purchase tickets at regular rates, 
 for the use of members of his family, as passengers, on his 
 train. He claims and receives his percentage on such 
 tickets, as upon all others. Would it not be strangely 
 absurd to allege that, by reason of this percentage, there 
 is an unjust discrimination in the conductor's favor, reduc- 
 ing the cost of transportation to him, below what others 
 are compelled to pay for the same facilities? The principle 
 involved would be exactly the same that appears in the 
 present case. Neither reason nor precedent find any 
 injustice or unfairness in either application of it. It is 
 sometimes a matter of judicial inquiry, whether the con- 
 sideration rendered by the shipper is fairly adequate and 
 not comparatively valueless, except as a mere device to 
 cover up the intended favoritism of the company. But 
 no such question is raised in the present case. For aught 
 
 »" Taezer v. Chicago, R. I. & P., " 15 Mo. App. 242, affirmed in 92 
 
 191 Fed. 543. Mo. 91, 4 S. W. 418. 
 
 [ 570 ] 
 
General Principles 
 
 §650 
 
 that appears, the undertaking and services of the 'eveners' 
 were a fair equivalent for the percentage paid them." " 
 
 § 650. Whether indefinite considerations can be a basis. 
 
 It may be conceded that it does not make any difference 
 in what way the freight rate is paid, so that it appears 
 plainly that the full rate is paid; but if some indefinite 
 consideration on which no estimate can accurately be 
 made to ascertain the amount of the charge is alleged, it 
 will be dangerous to permit that to pass. Thus in the 
 important case of Goodridge v. Union Pacific Railway 
 Company," the complainant demanded a refund of over- 
 charges by reason of discrimination against him by giving 
 a lower rate to the Marshall Coal Mining Company. The 
 defendant railroad as part of its defense brought out that 
 it was formerly liable to the Marshall Company to a suit 
 for damages for an alleged trespass and to settle this suit it 
 
 '^ Considerations inuring to the 
 benefit of the carrier before the stat- 
 utes of the type now prevailing were 
 permitted to be shown by most 
 courts. Union Pac. Ry. Co. v. Good- 
 ridge, 149 U. S. 680, 37 L. ed. 986, 
 13 Sup. Ct. 970; Louisville & N. R 
 R. V. Fulgnam, 91 Ala. 555, 8 So 
 803; Johnson v. Pensacola & P. R. R. 
 16 Fla. 623, 26 Am. Rep. 731; Chicago 
 & A. R. R. V. Coal Co., 79 111. 121 
 Rothschild v. Wabash, St. L. & 
 P. R. R., 92 Mo. 91, 4 S. W. 418 
 Hoover v. Pennsylvania R. R., 156 
 Pa. St. 220, 27 Atl. 282, 36 Am. St. 
 Rep. 43, 22 L. R. A. 263. 
 
 But some courts even at common 
 law regarded it as dangerous to 
 allow this to be done. Louisville, 
 E. & St. L. Con. R. Co. v. Wilson, 
 132 Ind. 517, 32 N. E. 311, 18 L. R. 
 A. 105 and note; Griffin v. Goldsboro 
 Water Co., 122 N. C. 206, 30 S. E. 
 319, 41 L. R. A. 240; Brundred v. 
 Rice, 49 Ohio St. 640, 32 N. E. 169, 
 34 Am. St. Rep. 589; Fitzgerald v. 
 
 Grand Trunk Ry., 63 Vt. 169, 22 
 Atl. 76, 13 L. R. A. 70. 
 
 "37 Fed. 182, affirmed in 149 
 U. S. 680, 37 L. ed. 986, 13 Sup. Ct. 
 970. 
 
 The distinction made in the prin- 
 cipal case above will reconcile two 
 federal cases of recent instance. 
 In one it was held that when a 
 liquidated sum is owed a shipper by 
 a carrier, the carrier can pay it off 
 at regular rates. Interstate Comm. 
 Coram. V. Chesapeake & O. R., 128 
 Fed. 59. 
 
 In the other it was held to be no 
 defense in a prosecution of a railroad 
 company for granting concessions to 
 a shipper from its published rates, 
 in violation of the Elkins Act, that 
 such concessions were granted in 
 compromise of unfiquidated claims 
 against the company for loss of 
 property in transit. United States 
 V. Atchison, T. & S. F. Ry., 163 Fed. 
 11. 
 
 [571] 
 
§ 651 ] Railroad Rate Regulation 
 
 entered into this contract for giving this company these 
 lower rates. But Judge Hallet said that to allow this 
 would endanger the law forbidding discrimination. "This 
 law cannot be controlled or defeated by any agreement 
 between the railroad company and the favored shipper. 
 It is true that when the consideration paid for reduced 
 rates by the favored shipper is obviously equal to the 
 discount allowed him, the law does not apply. Whenever 
 that fact appears, since it matters not in what form the 
 shipper pays the usual rates, the alleged discrimination 
 disappears, and the contract is no longer obnoxious to the 
 law. If, to illustrate, the damages due from the Denver 
 & Western Company had been liquidated, and the agree- 
 ment was to carry a certain quantity of coal for the 
 amount so fixed, the question would be different. As it 
 stands, the agreement is to give to the Marshall Company 
 a reduced rate for certain considerations which defendant 
 says are sufficient to make up the discount from the 
 schedule rate; and as to that matter, the fact cannot be 
 ascertained from the contract or otherwise." '* 
 
 § 651. Concessions to those who deal with the carrier. 
 
 The dangers inherent in any permission to the common 
 carrier to make different rates to different classes of cus- 
 tomers requiring the same service is most apparent in a 
 case like Louisville, Evansville & St. Louis Consohdated 
 Railroad Company v. Wilson.'^ In that case it appeared 
 
 " Free transportation issued in A release of liability by commer- 
 the form of an annual pass to a cial travelers to the railroad corn- 
 person not in the regular and stated pany does not constitute a good and 
 service of the carrier now receiving sufficient consideration for discrimi- 
 any wages or salary under a con- nation in fare; nor does the fact that 
 tract of employment, but requested they may influence business in favor 
 by him as compensation for throwing of the road. Lamson v. Grand Trunk 
 in its way what business he eon- Ry., 1 Int. Com. Rep. 369, 1 I. C. C. 
 veniently could, held to be illegal Rep. 147. 
 
 in Slater v. Northern P. R. R., 2 « 132 Ind. 517, 32 N. E. 311; 
 
 Int. Com. Rep. 243, 2 I. C. C. Rep. American T. & T. Co. v. K. C. So. 
 
 359. Ry., 175 Fed. 28, accord. 
 
 [572] 
 
General Principles [ § 652 
 
 that the railroad made high rates on cross-ties to all ex- 
 cept one Dickason, with whom it entered into a contract 
 giving him low rates in return for his agreement to sell it 
 such ties as it should wish at a specified price. When this 
 scheme was brought before the com-t for examination in a 
 suit by a shipper who had suffered by this discrimination, 
 it appeared that while he was paying $24 per car from 
 one point to another, this Dickason was paying only $14 
 per car for the same transportation. The highest court 
 sustained the instructions given in behalf of the plaintiff. 
 A part of its opinion follows: "Instruction No. 3, asked 
 by the appellant, and refused by the court, was vicious, 
 in that it was calculated to create the impression upon 
 the minds of the jury that the contract between the ap- 
 pellant and Dickason did not amount to an unjust dis- 
 crimination, if it was based upon an adequate considera- 
 tion. If the contract was of such a character as to destroy 
 the business of the appellees by reason of the discrimination 
 in favor of Dickason, and thus enable Dickason to acquire 
 a monopoly of the business of purchasing and shipping 
 cross-ties on appellant's road, the discrimination was un- 
 just, without regard to the consideration upon which it 
 was based." ^^ 
 
 § 652. Fostering the interests of the carrier. 
 
 Despite any policy which the carrier may have in mind, 
 it must be evident that all patrons of the road have a 
 right to adequate service at fair rates. Every producer 
 has a right to sell his product as he pleases in the best 
 market available, and rates must not be adopted with the 
 idea of compelling the product to be disposed of in a way 
 desired by the carrier. In one extreme case of this 
 sort the railroad company refused to furnish cars for a 
 coal miner who would not sell his coal to a coal company 
 
 " On similai- facts, see Reynolds 393. See, also, The Cedar Lumber 
 V. Western N. Y. & Pa. R. R., 1 Products Case, 3 Can. Ry. Cas. 412, 
 Int. Com. Rep. 685, 1 I. C. C. Rep. to the same effect. 
 
 [573 1 
 
§ 653 } Railroad Rate Regulation 
 
 which was allied with the railroad." In one of the earU- 
 est cases before it, the Commission left the question open 
 whether free passes could be given proprietors of hotels, 
 agents of ice companies, imlk contractors, trustees of rail- 
 road mortgages and newspaper pubUshers for advertising. 
 But in a case a few years later, the Commission held that 
 the free transportation of shippers or dealers between 
 State or interstate points on account of interstate freight 
 traffic furnished to the carrier is unlawful.^* 
 
 § 653. Barter of transportation now forbidden. 
 
 Recent decisions of the courts make it clear that, as the 
 Act is now interpreted, the barter of transportation is for- 
 bidden. In a recent case in the Supreme Court it was 
 held that a carrier which had agreed to furnish trans- 
 portation to a publisher and his employees in exchange for 
 advertising space, at the regular advertising rate of the 
 publisher, violated the provisions of the Act forbidding the 
 furnishiag of transportation at rates less than and differ- 
 ent from those exacted from the general public, i* Nor can 
 a railroad balance off passenger transportation against 
 general pubhcity, according to the ideas now prevalent; 
 as was said recently La a State court, the purchase of a 
 ticket by a passenger and its sale by the company shall 
 be consummated only by the former paying cash and by 
 the latter receiving cash of the amount specified in the 
 
 " The citations for these two are Re Boston & M. R. R., 3 Int. 
 
 eases are Paxton Tie Co. v. Detroit Com. Rep. 717, and Milk Producers' 
 
 S. R. R., 10 I. C. C. Rep. 422, and Ass'n v. D., L. & W. Ry., 7 I. C. C. 
 
 Lorraine v. Pittsburg, J. E. & E. R. Rep. 92. 
 
 R., 205 Pa. St. 132, 54 Atl. 580, 61 L. Other cases of the older time per- 
 
 R. A. 502. mitting the barter of transportation 
 
 A pass issued for valuable con- are Grimes v. MinneapoUs, L. & M. 
 
 siderations held was formerly not Ry., 37 Minn. 66, 33 N. W. 34, and 
 
 discrimination. See Curry v. Kansas Erie & P. Ry, v. Douthet, 88 Pa. 
 
 & C. P. Ry., 58 Kans. 6, 48 Pao. 579, St. 245, 32 Am. Rep. 45. 
 
 and cases cited; State v. Southern '» Chi., Ind. & L. Ry. Co. v. United 
 
 Ry., 125 N. C. 666, 34 S. E. 527, and States, 219 U. S. 486, 31 Sup. Ct. 272, 
 
 cases cited. 55 L. ed. 305. 
 
 '* The citations for these two cases 
 
 [574] 
 
General Principles [ § 654 
 
 published tariffs.^" In one of the federal cases it was de- 
 cided that under section 2 of the Act, forbidding a carrier 
 to discriminate between shippers in compensation for 
 transportation under substantially similar circumstances 
 and conditions, a carrier may not grant to one shipper a 
 lower rate by reason of the fact that he contracted to sell 
 coal, while lower rates were in effect, while the complain- 
 ing shipper in the same district is not so obligated, since 
 the circumstances and conditions intended do not include 
 individual elements affecting individual shippers.^^ And 
 in one of the very latest cases on this point it was held 
 where the defendant railroad in a certain coal district was 
 accustomed to collect at the end of the month for ship- 
 ments of coal made during the month, but in pursuance 
 of a previous arrangement accepted promissory notes 
 from one shipper in part pajrment of the freight charges 
 for the month on shipments sent as prepaid, while at the 
 same time exacting cash payment from other competing 
 shippers in the same district, and the notes given by the 
 favored coal company were later merged into bonds of 
 that company, that all this being shown the defendant was 
 criminally Hable under the Act, for a willful failure to ob- 
 serve its tariffs, on the ground of both accepting a less or 
 different compensation and of extending privileges or facil- 
 ities not specified in its tariffs. ^^ 
 
 § 664. Inconsistent contracts held unavailing. 
 
 The provisions of the Act, making it illegal for shippers 
 to receive rebates, are to be read into contracts for rates, 
 made between shippers and carriers, and become a part of 
 such contracts; and, therefore, by the doctrine of the courts, 
 a shipper who has a special contract runs the risk of a 
 change in rate, and if the new rate is higher he must pay 
 
 ™ State V. Union Pac. Ry., 87 ternational Coal Mining Co., 173 
 Mo. 29, 126 N. W. 859. Fed. 1. 
 
 >" Pennsylvania R. R. Co. v. In- '^ United States v. Hocking Valley 
 
 Ky., 104 Fed. 234, s. c, 210 Fed. 735. 
 
 [575] 
 
§ 655 ] Raileoad Rate Regulation 
 
 it.^' A railroad, which has duly published an advance in 
 rates, may charge a shipper the advanced rate, despite a 
 private agreement with him to carry goods at the rate in 
 existence prior to the advance. ^^ The Commission has 
 frequently held that contracts of parties, even if vaUd at 
 the time, cannot justify an unjust discrimination, when 
 conditions change. ^^ Rate making cannot be governed by 
 private agreements respecting rates or schedules of rates, 
 or by estoppel.^* A contract based on a lower rate ex- 
 isting before an advance is no groimd alone for condemn- 
 ing such advance.*' Though the defendant had by its 
 contract with another road reserved the right to cancel 
 joint through rates, the carrier was ordered to naaintain 
 such rates where their cancellation would result in unrea- 
 sonable charges.^^ The terms of any contract to "con- 
 tinue a fair basis" of rates must always give way to the 
 lawful, reasonable and non-discriminatory rate.^' And 
 generally speaking any change in the law invalidates con- 
 tracts for special transportation.'" 
 
 § 666. Continuing contracts no justification. 
 
 A troublesome problem arises, it will have been seen, 
 when the continuing to render service at certain rates 
 fixed by a contract, which was legal when it was made, 
 comes into conflict with new rates later scheduled, by 
 which the public generally are called upon to pay higher 
 rates.'' It once seems to have been thought that a con- 
 tinuing contract to take shipments must be respected 
 
 ^' In re Advances on Vehicles, 22 ^' In re Investigation & Suspension 
 
 I. C. C. 124. Docket 28, 21 I. C. C. 455. 
 
 " Rhinelander Paper Co. v. Mo. '» Sinclair & Co. v. C, M. & St. 
 
 Pac. Ry., 13 I. C. C. 633. P. Ry., 21 1. C. C. R. 490. 
 
 ^* Baltimore Butchers Livestock '" Re Contracts of Express Corn- 
 Co. V. P. B. & W. R. R., 20 I. C. C. panics, 16 I. C. C. 246. 
 124. "Chicago & A. R. R. Co. v. 
 
 ^ Michigan Upper Peninsula Pig- Chicago V. & W. Coal Co., 79 111. 
 
 iron Rates, 26 I. C. C. 284. 121; and compare Southern Wire Co. 
 
 "American Creosote Works v. v. St. Louis, B. & T. R. R. 38 Mo. 
 
 I. C. R. R., 18 I. C. C. 212. App. 191. 
 
 [576] 
 
General Principles [ § 656 
 
 when rates generally are raised; but of late with the 
 stringent law against all discrimination and the insistent 
 enforcement of it, even a definite contract, still continuing 
 by its terms, is held no justification for giving to the par- 
 ticular customer lower rates than those called for from 
 all by the present schedule.'^ Once the policy against dis- 
 crimination is well established, there is no difficulty in 
 saying that, for reasons of public poUcy, no fm-ther obliga- 
 tion attaches to such a contract. To the argument that 
 the contract may have been valid when made if it fixed 
 the rate then charged to all, and that, therefore, the sub- 
 sequent action of the railroad in advancing rates generally 
 could not invalidate it, the United States Supreme Court ^'^ 
 replied recently: "This contention loses sight of the central 
 and controlling purpose of the law, which is to require 
 all shippers to be treated alike, and that the filed and 
 pubhshed rate, shall be equally known by and available 
 to every shipper." Under its new powers the Commis- 
 sion has recently held that discrimination resulted from 
 demanding higher charges from new than from old sub- 
 scribers for same telephone service and facilities. ^^ 
 
 § 666. Whether executed contracts are different. 
 
 Where the full consideration for subsequent trans- 
 portation has been paid in advance, the continued execu- 
 tion of this contract might not have seemed to be dis- 
 crimination against those who are paying as they go the 
 rates scheduled later. But it was held in Louisville & 
 Nashville Railroad v. Mottley,^^ that a contract by a 
 railroad, upon consideration of a past release, that the 
 
 '2 Fitzgerald v. Grand Trunk Ry., »5 219 U. S. 467, 35 L. ed. 297, 31 
 
 63 Vt. 169, 22 Atl. 76, 13 L. R. A. Sup. Ct. 265. 
 
 70; but Bee Laurel Mills v. Railroad But see Curry v. Kansas & Col. 
 
 Co., 84 Miss. 339, 37 So. 134. Pacific R. R. Co., 58 Kans. 6, 48 Pac. 
 
 ^' Armour Packing Co. v. United 583. 
 
 States, 209 U. S. 56, 52 L. ed. 681, And see Hurley v. Big Sandy 
 
 28 Sup. Ct. 428. & C. Ry. Co. (Ky.), 125 S. W. 
 
 " Shoemaker v. C. & P. Tel. Co., 302. 
 20 I. C. C. 614. 
 
 37 [ 577 ] 
 
§ 657 ] Railroad Rate Regulation 
 
 releasors should travel without charge for the remainder 
 of their hves was not to be supported, after the stringent 
 provisions of the Act against transportation at varying 
 rates had been enacted. The Supreme Court held that 
 the Act is not unconstitutional as infringing the right of 
 contract, or as taking property for pubhc use without just 
 compensation, or due process of law, by reason of the fact 
 that it invalidates a contract entered into prior to its 
 passage, between a person and a railroad, by which the 
 latter, in consideration of the release of a cause of action 
 for personal injuries, granted to such person and his family 
 free transportation for life. In a more recent case, Fourche 
 River Lumber Company v. Bryant Lumber Company,'* 
 a differential allowed in arrangement for the purchase of a 
 right of way was held to taint the whole transaction, 
 although the consideration was apparently much less than 
 the value of the land conveyed. And the Supreme Court 
 insisted once more that the Act so forbade the making 
 of any concessions that any departure by one from the 
 payment of the rates scheduled for all would be held to be 
 altogether illegal. 
 
 § 657. Preference in certain services permissible. 
 
 In matters outside the scope of its pubhc business the 
 carrier is at liberty to discriminate at pleasure; for such 
 cases are not covered by the Act. In providing cars for its 
 traffic it may lease as well as buy them, and if it leases 
 them, it may deal exclusively with one car company, and 
 refuse to deal with other companies." So a railway com- 
 pany practices ho discrimination within the Act by selling 
 
 56 235 U. S. 316, 57 L. ed. 1498, 33 of holding that the former owner of 
 Sup. Ct. 887. the land in such a case cannot re- 
 It follows, pf course, that the rail- cover back land givien for fret passes 
 road is not justified in issuing passes or demand passes. Cowley v. North- 
 on any contract old or new upon em Pacific Ry. (Wash.), 123 Pac. 
 such consideration past or present. 998. 
 
 Gill V. Erie Ry., 135 N. Y. Supp. "Re Burton Stock-Car Co', v. 
 
 355. Chicago, B. & Q. R. R., 1 Int. 
 
 And a recent case goes the length Com. Rep. 329, 1 1. C. C. 132. 
 
 [678] 
 
General Principles [ § 658 
 
 passenger tickets at full fare to a land company which 
 sells them at half rates to guests of its hotel, persons re- 
 siding upon land sold or transferred by it, and others, but 
 refusing to sell them at half rates to a person hving in the 
 same locality upon ground not acquired from itJ^ So a 
 railroad may make and carry out an exclusive contract 
 with a stockyards company for the exclusive deUvery to 
 that company of live stock in, a city, and no other stock- 
 yards company or carrier can complain so long as all 
 shippers and consignees have equal faciUties there. ^' And 
 this is true although in carrying out such contract it re- 
 fuses to deliver to another railroad company, for delivery 
 to a competing stockyards, Uve stock consigned to such 
 competing stockyards.^" In a recent proceeding the Com- 
 mission decUned to require a carrier to furnish petitioner 
 the same facihties for conducting an auction business at its 
 terminals as it accorded exclusively to a rival concern." 
 And it has held that section 15 in regard to allowances 
 is not applicable where an allowance is made to a com- 
 press company, not the owner of the cotton. ^^ 
 
 § 658. What favors constitute discrimination. 
 
 It has frequently been held that it is not undue preju- 
 dice to demand prepayment of freight of a consignee, 
 although others do not need to prepay; for it was said 
 that even a bad motive for lawful act does not render 
 carrier liable.*^ But this has recently been considerably 
 modified by holding forbidden by the Act a device of 
 extending credit to such a shipper for the freight charges 
 on his shipments by acceptance of corporate securities in 
 
 "s Willson V. Rock Creek R. R., utors v. W. R. R., 20 I. C. C. 458. 
 
 7 I. C. C. Rep. 83. *" Merchants Cotton Press & Stor- 
 
 '• Central Stockyards Co. v. Louis- age Co. v. I. C. R. R., 17 I. C. C. 98. 
 
 ville & N. R. R., 118 Fed. 113, 55 C. « Compare Gamble-Robinson Com- 
 
 C. A. 63. mission Co. v. Chicago & N. W. Ry., 
 
 *" Raiboad Commission of Ken- 168 Fed. 161, the first case stated, 
 
 tucky V. Louisville & N. R. R., 10 with United States v. Hocking Valley 
 
 I. C. C. Rep. 173. Ry., 210 Fed. 738, the second case 
 
 *' Southwestern Produce Distrib- discussed. 
 
 [579] 
 
§ 659 ] Railroad Rate Regulation 
 
 settlement of freight bills, while exacting and collecting 
 cash for substantially similar shipments from the other 
 shippers." It has been held that, as it is a carrier's right 
 to demand prepayment on all shipments, it may not dis- 
 tinguish between persons who pay in advance and those 
 who do not. And it follows that where a new tariff re- 
 quiring prepayment of charges has become effective prior 
 to a shipment, the carrier is not bound to reconsign with- 
 out prepayment of charges a car belonging to a shipper to 
 whom it has been accustomed to extend credit. So the 
 exercise by a railway company of the right to prepajonent, 
 or to retain a lien upon the goods imtil payment is made, 
 or to hold the consignee responsible in case of delivery 
 before payment, or the waiver of some of such rights at 
 different times, cannot be construed to be a discrimination.^^ 
 
 § 659. Where service of different character. 
 
 The duty of a carrier under the Act, to refrain from giv- 
 ing preference or advantages to one shipper over another, 
 is applicable only where the same or similar conditions are 
 prevalent.^* The use in Section 1 of the EMns Act of the 
 word "discrimination," with the qualifying and adjective 
 "unjust" was not intended to broaden the prohibitions 
 of the original Act to Regulate Commerce in that re- 
 spect.*'^ The findirig of the jury determines whether the 
 transportation service was under "substantially similar 
 circumstances and conditions," so as to make the defend- 
 ant liable in a suit in the courts for damages for granting 
 secret allowances to plaintiffs' competitors.^* The funda- 
 mental distinction should be insisted upon that the Act 
 
 " See Boise Commercial Club v. « United States v. C. R. & Nav. 
 
 Adams Express Co., 17 I. C. C. 115, Co., 159 Fed. 975. 
 the third case mentioned in this "United States v. Wells, Fargo 
 
 section, and Sage & Co. v. 111. C. Ey., Exp. Co., 161 Fed. 606. 
 18 I. C. C. 195, the fourth. « Langden v. Penna. R. R., 194 
 
 "Little Rock & M. R. Co. v. Fed. 486. 
 St. Louis & S. W. Ry., 63 Fed. 775, 
 11 C. C. A. 417. 
 
 [580] 
 
General Principles [ § 660 
 
 does not prohibit all discrimination, but only that which is 
 undue. ^* But any concession which is made in the schedule 
 must not exceed that which is warranted by the differences 
 in circumstances and conditions.^" Not all discriminations 
 are unlawful, but only such as are undue or unreasonable; 
 if based on reason and good cause, differentials cannot be 
 condemned as unreasonable.^^ Discriminations in the view 
 of the Act, in so far as they result from the bona fide 
 action of a carrier in meeting circumstances and conditions 
 not of its own creation and affecting the movement of 
 traflfic, do not of necessity fall under the condemnation of 
 the law. 
 
 § 660. Where no public service involved. 
 
 No violation of the Act can be predicated solely upon the 
 fact that a carrier makes with one independent company 
 a contract more favorable than with another for a service 
 which that carrier is bound to perform as part of its duty 
 in connection with transportation or undertakes to per- 
 form as a convenience to those whom it is serving. The 
 Act deals only with the obUgation of carriers as carriers, 
 and in no way attempts to regulate or interfere with mat- 
 ters not involving their duties as such. Thus compression 
 of cotton is a service which the carrier procures for its own 
 convenience, and when that service is performed, in such 
 a manner as not to prejudice or prefer a particular shipper 
 or community, the Act does not limit the freedom of the 
 carrier in making contracts in respect thereto. ^^ Upon 
 similar principles it has been held by the courts that the 
 Commission has no power to forbid carriers from pay- 
 ing or allowing for the elevation and transfer of grain 
 to elevator men who were also shippers of grain reasonable 
 compensation for transit elevation, because they were also 
 
 " Loch Lynn Construction Co. P., C, C. & St. L. Ry., 13 I. C. C. 
 
 V. B. & O. R. R., 17 I. C. C. 396. 87. 
 
 " Sondheimer Co. v. I. C. R. R., ^^ Merchants' Cotton Press & 
 
 17 I. C. C. 60. Storage Co. v. I. V. R. R., 17 I. C. C. 
 
 "Pittsburgh Plate Glass Co. v. 
 
 [581] 
 
§ 660 ] Railroad Rate Regulation 
 
 performing at prices fixed by them other services not 
 necessarily connected with transportation/' It is, of 
 com-se, obvious that station restaurants, news stands, 
 barber shops, and similar private enterprises at raib-oad 
 terminals are no part of transportation service. ^^ And, 
 in general, when there is nothing of the duty which the 
 carrier owes its pubhc involved, it may make such arrange- 
 ments as may advance its interests. 
 
 *' Peavey & Co. v. Union Pac. R. '* Southwestern Produce Distrib- 
 
 R., 176 Fed. 409. utors v. W. R. R., 20 I. C. C. R. 458. 
 
 [582] 
 
CHAPTER XIV 
 
 FORMS OF ILLEGAL DISCRIMINATION 
 
 § 670. Provisions of the Act. 
 671. The same rate for substantially similar services. 
 
 Topic A. Concessions to get Competitive Business 
 
 § 672. Whether concessions may be made in competition. 
 
 673. Competitive conditions do not justify discriminations. 
 
 674. Reductions to get competitive business illegal. 
 
 675. Concessions to get shipments from outlying territory. 
 
 676. Such concessions forbidden by later cases. 
 
 677. Shippers making expensive preparations. 
 
 678. Additional services performed for certain shippers. 
 
 679. Concessions to certain localities. 
 
 Topic B. Concessions to Large Shippers 
 
 I 680. Whether concessions may be made to large shippers. 
 
 681. Unreasonable differences universally forbidden. 
 
 682. Unreasonable differences forbidden by all courts. 
 
 683. Reasonable difference permitted by some courts. 
 
 684. Prevalent doctrine against reduction. 
 
 685. Reductions to large shippers unjust to small shippers. 
 
 686. Services to large and small practically identical. 
 
 687. Differences in amount of shipment. 
 
 688. Reductions to groups of passengers. 
 
 689. Special kinds of passenger transportation. 
 
 Topic C. Rebates to Exclitsive Shippers 
 
 ) 690. Lower rates formerly made to exclusive shippers. 
 
 691. Such discriminations foster monopolies. 
 
 692. Shippers who agree to give all their business. 
 
 693. Consideration of the cost of serving. 
 
 694. Shippers requiring less service. 
 
 695. Shippers who agree to furnish large quantities. 
 
 696. Charging other shippers more than contract rates. 
 
 697. Competitive rates for through business. 
 
 698. Previous or subsequent haul. 
 
 699. Other methods of holding business. 
 
 [583 
 
§§ 670, 671 ] Railroad Rate Regulation 
 
 Topic D. Concessions for Special Kinds of Business 
 
 § 700. Different rates for goods used for different purposes. 
 
 701. Such rates formerly allowed. 
 
 702. Repudiation of tliis doctrine. 
 
 703. Such differences now held illegal discrimination. 
 
 704. Classification based upon use. 
 
 705. Personahty of shipper. 
 
 706. Restricting rates to certain purposes. 
 
 707. When commodities are of different character. 
 
 708. Rates to certain classes of shippers. 
 
 709. Special classes of passengers. 
 
 § 670. Provisions of the Act. 
 
 Not only did the original Act forbid outright rebating, 
 but also preferential treatment. Section 3 of the original 
 Act provided that it shall be unlawful for any common 
 carrier subject to the provisions of this Act to make or give 
 any undue or unreasonable preference or advantage to any 
 particular person, company, firm, corporation, or locaUty, 
 or any particular description of traffic, in any respect 
 whatsoever, or to subject any particular person, company, 
 firm, corporation, or locality, or any particular description 
 of trafl&c, to any imdue or unreasonable prejudice or dis- 
 advantage in any respect whatsoever. However, section 1, 
 as amended, permitted the issuance of mileage, joint 
 mileage, excursion or commutation tickets, and when 
 telegraph companies were put imder the jurisdiction of 
 the Commission reduced rates for night messages and 
 press despatches were excepted. The discussion in pre- 
 vious chapters, such as Chapters IX and X as to what 
 will make rates unjust or unreasonable, or preferential or 
 prejudicial has also a direct bearing upon these sections. 
 
 § 671. The same rate for substantially similar services. 
 In the preceding chapter the general principles as to 
 discrimination were set forth, and the conclusion was 
 reached that if two shippers asked the same service under 
 the same conditions they ought to be given the same 
 rate. In this chapter it is proposed to describe what sub- 
 [584] 
 
Forms of Illegal Discrimination [ § 672 
 
 stantially identical services are, and various cases are 
 discussed, where the contention has been made that the 
 conditions were different. In most of the cases in this Hst, 
 it will be seen upon examination that the services are not 
 dissimilar. Whenever a railroad initiates a poUcy which 
 will get it more business, or enable it to hold the business 
 that it has, it is prone to claim that the differing conditions 
 in the particular case justify making a lower rate to one 
 shipper or class of shippers, while maintaining higher 
 rates for other shippers. But, in many such cases, it will 
 be found that what the railroad is doing is in the face of 
 the principal rule forbidding personal discrimination. 
 
 Topic A. Concessions to get Competitive Business 
 
 § 672. Whether concessions may be made in competition. 
 
 The idea runs through certain cases that it is justifiable 
 to make reductions to certain shippers where business 
 cannot be obtained without it. This principle, as has 
 been seen, has some scope in permitting the rates to sta- 
 tions where there is competition to be made lower relatively 
 than the rates to stations which have no competitive rates. *^ 
 But it may well be doubted whether it has any opera- 
 tion in justifying a difference in rates between two per- 
 sons shipping from the same station; for this would seem 
 to be personal discrimination since these two shippers are 
 asking the same service. To some courts it has seemed 
 otherwise, these courts holding that if concessions are 
 necessary to get more business by inducing a shipper 
 who is now employing a rival route to give up his present 
 connections, this necessity justifies the reductions. This 
 
 '6 Concessions to get competitive N. Y. 271, 38 N. E. 292, 42 Am. St. 
 
 business have been justified in some Rep. 712, 25 L. R. A. 674, Avinger 
 
 cases, even if they involve discrimi- v. So. Car. R. R., 29 S. C. 265, 7 S. 
 
 nation. Johnson v. Pensacola & E. 493, 13 Am. St. Rep. 716; Ragan & 
 
 P. R. R., 16 Fla. 623, 26 Am. Rep. Buffet v. Aiken, 9 Lea (77 Tenn.), 
 
 731; Chicago & A. R. R. v. Coal Co., 609. 
 79 111. 121; Lough v. Outerbridge, 143 
 
 f5851 
 
§ 673 ] Railroad Rate Regulation 
 
 argument apparently disregards the law of public service 
 which, of course, governs this whole question/^ 
 
 § 673. Competitive conditions do not justify discrimina- 
 tions. 
 
 It must be insisted upon at the outset that competitive 
 conditions in themselves do not justify the making of 
 personal discriminations between shippers, giving a lower 
 rate to those to whom it is necessary to make conces- 
 sions. This is forbidden both by the English courts and 
 by the United States courts under their respective Acts 
 forbidding discrimination, but permitting reasonable con- 
 cessions when the conditions are dissimilar. Thus in the 
 leading case of London and Northwestern Railroad v. 
 Evershed," it was said: "We think that a railway com- 
 pany cannot, merely for the sake of increasing their traffic, 
 reduce their rates in favor of individual customers, unless, 
 at all events, there is a sufficient consideration for the 
 reduction which shall lessen the cost to the company of 
 the conveyance of their traffic, or some other or equivalent 
 or other services are rendered to them by such individuals 
 in relation to such traffic." And in the important case 
 of Interstate Conunerce Commission v. Texas and Pacific 
 Railroad Company** it was said: "The Interstate Com- 
 merce Act would be emasculated in its remedial efficacy, 
 if not practically nullified, if a carrier can justify a dis- 
 crimination in rates merely upon the ground that imless 
 it is given, the traffic obtained by giving it would go to 
 a competing carrier. A shipper having a choice between 
 competing carriers would only have to refuse to send his 
 
 66 But by the better view such N. J. L.), 531, 18 Am. Rep. 754, 
 
 concessions are held unjustifiable, B. & W. 357; Brundred v. Rice, 49 
 
 when they involve discrimination. Ohio St. 640, 32 N. E. 169, 34 Am. 
 
 Wight V. United States, 167 U. S. St. Rep. 589; Fitzgerald v. Grand 
 
 512, 42 L. ed. 258, 17 Sup. Ct. 822; Trunk Ry., 63 Vt. 169, 22 Atl. 76, 
 
 Menacho v. Ward, 27 Fed. 529, B. & 13 L. R. A. 70. 
 
 W. 372; Messenger v. Pennsylvania " L. R. 3 App. Cas. 1029. 
 
 R. R., 7 Vroom (36 N. J. L.), 407, ^ 52 Fed. 187. 
 13 Am. Rep. 457, 8 Vroom (37 
 
 [586] 
 
Forms of Illegal Discrimination [ §§ 674, 675 
 
 goods by one of them unless given exceptional rates to 
 justify that one in making a discrimination in his favor 
 on the ground of the necessity of the situation." 
 
 § 674. Reductions to get competitive business illegal. 
 
 Such reductions to get business from a rival line are 
 regarded as personal discrimination in most cases, however 
 complicated the facts. This is a matter upon which the 
 English cases have been particularly strong in holding 
 that it is not sufficient that the railway company merely 
 desires to attract the traffic from another line to itself, 
 especially where the favor thus shown to a few is prejudi- 
 cial to many others in the same trade as the favored per- 
 sons.'* Thus the fact that one shipper can go by another 
 route and will probably do so if charged as much as the 
 charge made to the complaining party, is not a circum- 
 stance justifying an imequal charge; nor will the fact that 
 those charged a less rate are seeking to develop a new 
 trade.*" For the lowering of rates for the purpose of develop- 
 ing business is an undue preference;" and so is making a 
 lower rate in consequence of a threat from the owner of a 
 colliery to construct another railway, by which traffic 
 would be diverted.*^ 
 
 § 676. Concessions to get shipments from outlying terri- 
 tory. 
 
 It has been seen that some courts permit any difference 
 in the situation to be seized upon as a reason for making 
 a discrimination. Thus in Ragan & Buffet v. Aiken,*' 
 where a bill in equity was ffied by merchants at a station 
 on the defendant's railway who were charged a twenty- 
 five-cent rate, who alleged that other shippers who brought 
 
 '» Thompson v. London, etc., R. 1 C. B. (N. S.) 454, s. c, 26 L. J. C. 
 
 Co., 2 Nev. & Mao. 115. P. 129, 1 Nev. & Mac. 72. 
 
 "" Denaby Main Colliery Co. v. *" Harris v. Cockermouth & W. R. 
 
 Manchester, S. & L. R. Co., L. R. 11 Co., 3 C. B. (N. S.) 693, s. c, 27 L. J. 
 
 App. Cas. 97. C. P. 162, 1 Nev. & Mac. 97. 
 
 " Oxlade v. North Eastern R. Co., " 9 Lea (77 Tenn.), 609. 
 
 [587] 
 
§ 676 ] Railboad Rate Regulation 
 
 their goods from an outlying district were charged only a 
 fifteen-cent rate, the court sustained a demurrer to the 
 bill, taking the ground that there was a difference shown 
 in the circumstances. The argument of Mr. Justice 
 Cooper in writing the opinion of the court was: "In 
 determining whether or not a company has given undue 
 preference to a particular person, the court may look to the 
 interests of the company. In other words, if the charge 
 on the goods of the party complaining is reasonable, and 
 such as the company would be required to adhere to as 
 to all persons in like condition, it may, nevertheless, lower 
 the charge to another person if it be to the advantage 
 of the company, not inconsistent with the public interest, 
 and based on a sufficient reason. It is obvious that the 
 intention of the defendant, in this instance, was not to 
 discriminate against the complainants in favor of any 
 person of the same place, and in the same condition. His 
 object was to get business for his road from persons at a 
 distance from its terminus, which otherwise nrould reach 
 their destination by a different route. Under these cir- 
 cumstances we cannot see that the contracts complained 
 of are against public policy, or that the complainants 
 have been damaged, if the charges on their goods were 
 reasonable." ^^ 
 
 § 676. Such concessions forbidden by later cases. 
 
 But such concessions have always been forbidden in 
 the cases under the Act as illegal discrimination. Thus in 
 one proceeding before the Commission,*^ the facts shown 
 were that a higher rate was charged to goods brought to 
 one terminus for consumption there, than for goods which 
 were to be carted beyond to another district, and in de- 
 
 '* In the important case of John- Competition is not to be considered 
 
 son V. Pensacola & P. R. R., 16 Fla. in determining a question of dis- 
 
 623, 26 Am. Rep. 731, the facts crimination under section 2. In 
 
 and the decision were the same. re Advances on Manganese Ore, 
 
 " Gary v. Eureka Springs Ry., 25 I. C. C. 663. 
 7 1. C. C. Rep. 286. 
 
 [588] 
 
PoBMs OF Illegal Discrimination [ § 677 
 
 daring this illegal, it was said: "In collecting more from 
 complainants and others for carrying goods to Eureka 
 Springs, not to be forwarded, than they accept for carry- 
 ing goods of the same classes from the same places to 
 Eureka Springs to be forwarded to points in said Harrison 
 transportation district, the defendants receive greater com- 
 pensation from complainants than from other persons for ' a 
 like and contemporaneous service in the transportation of a 
 like kind of traffic imder substantially similar circumstances 
 and conditions,' and are guilty of unjust discrimination; 
 and in thus denying to complainants and other shippers 
 of articles to Eureka Springs, for use there or for dis- 
 tribution from that place, the same transportation charges 
 which they accord to shippers and receivers of like articles 
 there to be forwarded to Harrison and other places for 
 distribution, the defendants subject the complainants, the 
 business in which they are engaged, and the city of Eureka 
 Springs to unreasonable disadvantage and give to Harrison 
 and such other places, and to shippers and receivers of 
 articles of freight at such other localities, undue prefer- 
 ence." ^* 
 
 § 677. Shippers making expensive preparations. 
 
 In Brundred v. Rice,*^ a shipper of oil set forth in his 
 complaint a most extraordinary state of affairs — a con- 
 tract whereby a railroad company bound itself to carry 
 for one shipper crude petroleum at half the rate it agreed 
 to charge all others, and to pay such favored shipper 
 one-half the amount collected from others, in consideration 
 
 ™ Compare Bigbee & W. R. Packet Threat of compress company to 
 Co. V. Mobile & Ohio R. R., 60 divert its cotton traffic to another 
 Fed. 545, where the court laid it railroad is not competition that re- 
 down as a fundamental principle lieves from the operation of the 
 that all goods offered for shipment statute. Muskogee Commercial Club 
 at a certain point must be carried at v. M., K. & T. R. Co., 12 I. C. C. 
 the established rate for such goods 312. 
 
 from such point, regardless of the "49 Ohio St. 640, 12 N. E. 169, 
 
 place where they originated. 34 Am. St. Rep. 589. 
 
 [589] 
 
§ 678 ] Railroad Rate Regulation 
 
 of his agreeing to establish and maintain a system of 
 pipe lines to its road. An extract from the per curiam 
 opinion follows: "That the contract between Brundred 
 and his associates was against pubhc policy, and void, 
 will hardly admit of a question. As said by Baxter, J., 
 in Handy v. Railroad Co.:** 'Railroads are constrjicted 
 for the common and equal benefit of all persons wishing 
 to avail themselves of the facilities which they afford. 
 While the legal title thereof is in the corporation or in- 
 dividuals owning them, and to that extent private prop- 
 erty, they are, by the law and consent of their owners, 
 dedicated to the pubhc use. Except in the mode of using 
 them, every citizen has the same right to demand the 
 services of raihoads, on equal terms, that they have to 
 the use of a pubhc highway, or the government mails.' 
 Whatever may have been the financial condition of the 
 railroad company, it was not warranted in making a con- 
 tract by which it bound itself to carry for one shipper at 
 half the rate it agreed to charge all others for the same 
 service, in consideration of his agreeing to establish a 
 system of pipe fines to its road; at the same time and for 
 the same consideration binding itself to charge all others 
 double the amount as a fixed, open rate, and to pay to 
 such favored shipper one-half of it when collected." 
 
 § 678. Additional services performed for certain shippers. 
 
 Upon the general principles now under discussion, it will 
 constitute discrimination to perform additional services for 
 certain shippers in order to get their business. The issue 
 has several times been raised whether it would be per- 
 missible for a railroad to make allowance for cartage to 
 certain shippers distant from the station, while making no 
 such allowance to other shippers, and the decision has 
 always been that this would be illegal discrimination. 
 For the feeling has been universal that the varying cost 
 of shippers in delivering to the carrier for shipment can 
 
 68 31 Fed. 689. 
 [590] 
 
Forms of Illegal Discrimination [ § 679 
 
 have no bearing on the case. In the most important case 
 on this point,^^ Mr. Justice Brewer said: "It is contended 
 by the defendant that it was necessary for the Baltimore 
 & Ohio Company to offer this inducement to Mr. Bruening 
 in order to get his business, and not necessary to make 
 the like offer to Mr. Wolf, because he would have to go 
 to the exp'ense of carting, by whichever road he trans- 
 ported; that therefore the traffic was not 'imder sub- 
 stantially similar circumstances and conditions,' within 
 the terms of section 2. We are unable to concur in this 
 view. Whatever the Baltimore & Ohio Company might 
 lawfully do to draw business from a competing Une, what- 
 ever inducements it might offer to the customers of that 
 competing line to induce them to change their carrier, is 
 not a question involved in this case. The wrong pro- 
 hibited by the section is a discrimination between shippers. 
 It was designed to compel every carrier to give equal 
 rights to all shippers over its own road, and to forbid it by 
 any device to enforce higher charges against one than 
 another." ^o 
 
 § 679. Concessions to certain localities. 
 
 Whether a concession made in certain localities consti- 
 tutes discrimination seems not to be altogether settled, al- 
 though on the authorities it would seem to be clear enough 
 that differences in the basis upon which service is rendered 
 in various localities do not in themselves constitute dis- 
 crimination. The Supreme Court has held that giving 
 cartage to the patrons in one city while making no such 
 provision in others named, did not constitute a violation 
 of the Act." In a recent proceeding before the Commission, 
 
 6' Wight V. United States, 167 ing Co.'s Case, 4 Can. Ry. Cas. 259. 
 
 U. S. 612, 42 L. ed. 258, 17 Sup. Ct. '^ Interstate Commerce Commis- 
 
 822. sion v. Detroit, G. H. &. M. Ry., 
 
 ™ See to the same effect, Hezel 167 U. S. 633, 42 L. ed. 306, 17 Sup. 
 
 Milling Co. V. St. Louis, A. & T. Ct. 986. 
 
 H. R. R., 5 I. C. C. Rep. 57; Chicago See also Re Wharfage Charges 
 
 F. P. C. Co. V. Chicago & N. W.Ry., 8 at Texas City, 26 I. C. C. 695, dis- 
 
 I. C. C. Rep. 316; The Brandt Mill- cussed in the next sentence. 
 
 [591] 
 
§ 680 ] Railroad Rate Regulation 
 
 it appeared that, to overcome natural disadvantages as 
 respects other neighboring ports, Texas City interests 
 offered generally free wharfage, and to large shippers 
 warehousing services, at less than cost, but no opinion 
 was expressed as to the legality of such deals, for generally 
 speaking, in order to violate the Act the prejudice must 
 result from something done by the carrier. Likewise it is 
 not held to be an undue preference of one locality over 
 another under the Act to perform a switching service at 
 one point which is refused at anotherJ^ The same prin- 
 ciple applies to various matters relating to transit privileges 
 granted by the carrier for traffic movements at one point, 
 while not doing so at another. 
 
 Topic B. Concessions to Large Shippers 
 
 § 680. Whether concessions may be made to large shippers. 
 Common carriers have often given special discounts to 
 large shippers in order to get their trade or to retain it, and 
 sometimes they have attempted to defend this practice 
 upon general principles. That this policy may often be 
 advantageous in public business, as it is in private business, 
 may be admitted, but it has already been seen that public 
 duty may conflict with business policies. If, therefore, 
 these concessions to larger shippers are in conflict with the 
 public duty which the common carrier owes to smaller 
 shippers, they must be held illegal as unjust discrimina- 
 tions. And this will be the clearer when it is shown that 
 the favoring of such large shippers will give them such 
 commercial advantages that they may crush out their 
 smaller competitors in the common markets. The rule 
 forbidding the granting of special reductions to larger 
 shippers as such on the ground that they furnish a greater 
 aggregate of business to the common carrier is, therefore, a 
 necessary part of the law forbidding all personal dis- 
 
 " Alan Wood I. & S. Co. v. Pa. See also Bascom Co. v. A., T. & S. 
 
 Ry., 22 I. C. C. 540. -^ F. Ry., 17 I. C. C. 354, discussed in 
 
 ' the next sentence. 
 
 [592] 
 
Forms of Illegal Discrimination [ § 681 
 
 crimination." "The fact that one man is a large shipper 
 and another a small shipper does not entitle the carrier to 
 make a difference in the rate, if the property carried in 
 each case is of the same class, and the distance and route 
 is the same." ''* 
 
 § 681. Unreasonable differences universally forbidden. 
 
 All courts now agree that if there is an unreasonable 
 difference made between the rates given to the large 
 patron and the rates charged a small patron, the schedule 
 is illegal in that respect. The most recent case which 
 brings out this test is Western Union Telegraph Company 
 V. Call Publishing Company ,^^ where the plaintiff com- 
 plaiaed of a $5 rate per 100 words daily per month charged 
 it for news despatches while its contemporary was charged 
 only $1.50. Mr. Justice Brewer pointed out that it could 
 not be said, even in this case, that the apparent discrimi- 
 nation could not be justified; for the general principle as he 
 pointed out has two sides. Of course, such equality of 
 right does not prevent differences in the modes and kinds 
 of service and different charges based thereon. There is no 
 cast iron line of uniformity which prevents a charge from 
 being above or below a particular sum, or requires that 
 
 "The quotation which follows is Grand Trunk Ry., 63 Vt. 169, 22 Atl. 
 
 from United States v. Tozer, 39 Fed. 76, 13 L. R. A. 70. 
 369. But see Savitz v. Ohio & M. Ry., 
 
 '* By the weight of authority it is 150 lU. 208, 37 N. E. 235, 27 L. R. A. 
 
 illegal to make reductions to large 626, affirming 49 111. App. 315; Cook 
 
 shippers as such. The principal v. Chicago, R. I. & Pac. Ry. Co., 81 
 
 cases are listed below: Western U. T. Iowa, 551, 46 N. W. 749, 25 Am. St. 
 
 Co. V. Call Pub. Co., 181 U. S. 92, 512, 9 L. R. A. 764; Rothschild v. 
 
 45 L. ed. 765, 21 Sup. Ct. 561, over- Wabash, St. L. & P. C. R., 92 Mo. 
 
 ruling s. c, 44 Neb. 326, 62 N. W. 91, 4 S. W. 418; Concord & P. R. R. 
 
 506; Hays v. Pennsylvania Co., 12 v. Forsaith, 59 N. H. 122, 47 Am. 
 
 Fed. 309, B. & W. 368; Burlington, Rep. 181; Silkman v. Yonkers Water 
 
 C. R. & N. Ry. V. N. W. Fuel Co., Commissioners, 152 N. Y. 327, 46 
 
 31 Fed. 652; Kinsley v. Buffalo, N. Y. N. E. 612, 37 L. R. A. 827. 
 & P. Ry., 37 Fed. 181; United States "Western Union Telegraph Co. 
 
 V. Tozer, 39 Fed. 369; Fitzgerald v. v. Call Publishing Co., 181 U. S. 
 
 92, 45 L. ed. 765, 21 Sup. Ct. 561. 
 
 38 [ 593 ] 
 
§ 682 ] Railroad Rate Regulation 
 
 the service shall be exactly along the same lines. But that 
 principle of equality does forbid any difference in charge 
 which is not based upon difference in service, must have 
 some reasonable relation to the amount of difference, and 
 cannot be so great as to produce an unjust discrimina- 
 tion/^" 
 
 § 682. Unreasonable differences forbidden by all courts. 
 Indeed, long before this in the case of Burlington, 
 Cedar Rapids and Northern Railway Company,™ which is 
 often cited in this connection, Mr. Justice Brewer said in 
 part: "If it be true, as held by Judge Wallace, that the rule 
 forbidding an unjust discrimination does not necessarily pre- 
 vent a railroad company from charging a less rate to one who 
 ships a large quantity than to one who ships a small quan- 
 tity (and I am not prepared to deny that under some cir- 
 cumstances, there is force in that proposition, on the same 
 principle that a wholesale dealer sells a large bill of goods 
 at a less rate than a small bill of goods), yet, even with 
 that limitation, a discrimination so vast as this is, and so 
 purely arbitrary, and which is so obviously solely in the 
 interest of capital, and not based upon reasonable distinc- 
 tion in favor of a large as against a small shipper, cannot 
 be sustained. For here the contract provides a special 
 rate for shipment of 100,000 tons or over; that is, for one 
 who ships 99,500 tons it makes a rate of $2.40; while to 
 the man who ships 100,000 tons, or 500 tons more than 
 the other, it makes a rate of $1.60, — a difference of 50 per 
 cent in favor of the latter. Such a discrimination, even 
 if any discrimination based upon the amounts of ship- 
 ments is tolerable, is one so gross that it cannot be sus- 
 tained." " 
 
 "" See also Rothschild v. Wabash, ™ Burlington, C. R. & N. Ry. v. 
 
 St. L. & P. C. Ry., 92 Mo. 91, 4 S. W. Northwestern Fuel Co., 31 Fed. 652. 
 
 418; and Cook v. Chicago, R. I. & " But see State v. Central St. Ry., 
 
 P. Ry., 81 Iowa, 551, 46 N. W. 1080, 81 Vt. 463, 71 Atl. 194, 130 Am. St. 
 
 25 Am. St. Rep. 512, 9 L. R. A. 764. Rep. 1065. 
 
 [594] 
 
Forms of Illegal Discrimination [ § 683 
 
 § 683. Reasonable differences permitted by some courts. 
 
 In a very few jurisdictions it has been held that there is 
 no legal objection to making a reasonable difference in the 
 rates given to large shippers in comparison with the rates 
 charged small shippers. The argument is that this is a 
 business policy universally practiced; but the answer 
 seems to be that this may nevertheless be opposed to the 
 peculiar duties which the common carrier owes to the 
 public as a whole. However, an extract is given from the 
 opinion of Mr. Justice Allen in Concord and Portsmouth 
 Railroad Company v. Forsaithe/^ so that the weight of this 
 argument may be felt. In holding that the complainant, a 
 small shipper, had no case, even under a statute which 
 forbade discriminations, he said: "The terms of the statute 
 must receive the interpretation which long-established 
 usage and the custom of the commercial world have given 
 them. That custom in all branches of business always 
 has been, and is, to move, care for, and sell a large amount 
 of a given commodity, in one parcel or in a given time, at a 
 less price per pound, yard, or ton, than a smaller quantity 
 of the same commodity, distributed in many and smaller 
 parcels at different times. The expense of handling, 
 carrying, and storing the smaller amount is much greater, 
 pro rata, than that of the same operations upon the larger 
 amount in one body, and a discrimination in favor of the 
 larger dealers is not inequality, but reasonable equality. 
 By any other construction the statute would defeat itself; 
 for taking into account the lessened expense pro rata for 
 transporting the greater amount of property in a single 
 body or in a given time, the carrier would, by absolute 
 equality of rates for all cases, receive a greater price rate 
 for carrying the larger quantity than the smaller, and 
 thereby make an unjust discrimination against the person 
 transporting the largest quantity of goods. Unreasonable 
 equality is inequality." " 
 
 ■» 59 N. H. 122. Water Commissioners, 152 N. Y. 327, 
 
 " To the same effect is Silkman v. 46 N. E. 612, 37 L. R. A. 827. 
 
 [595] 
 
§ 684 ] Railroad Rate Regulation 
 
 § 684. Prevalent doctrine against reduction. 
 
 It may be asserted with confidence, however, that it is 
 opposed to fundamental principles to permit the giving of 
 special concessions to the large shipper as such. In the 
 leading case of Hays v. Pennsylvania Company,*" this 
 doctrine is well worked out. It appeared in evidence that 
 defendant's regular price for carrying coal between the 
 points mentioned, in 1876, was $1.60 per ton, with a rebate 
 of from 30 to 70 cents per ton to all persons or com- 
 panies shipping 5,000 tons or more during the year, — the 
 amount of rebate being graduated by the quantity of 
 freight furnished by each shipper. In an excellent opinion 
 by Baxter, the United States Circuit Judge, the various 
 grounds upon which differences in rates have been justified 
 by reason of differences in the cost of service by reason of 
 economies of handling the business were reviewed, but 
 he held very properly that none of these applied to the 
 exclusive shipper as such: "In all particulars the plaintiffs 
 occupied common ground with the parties who obtained 
 lower rates. Each tendered coal for transportation in the 
 same condition and at such times as suited his or their 
 convenience. The discrimination complained rested ex- 
 clusively on the amount of freight supplied by the respec- 
 tive shippers during the year. Ought a discrimination 
 resting exclusively on such a basis be sustained? If so, 
 then the business of the country is, in some degree, subject 
 to the will of railroad officials; for, if one man engaged in 
 mining coal, and dependent on the same railroad for 
 transportation to the same market, can obtain transporta- 
 tion thereof at from 25 to 50 cents per ton less than an- 
 other competing with him in business, solely on the ground 
 that he is able to furnish and does furnish the larger 
 quantity for shipment, the small operator will sooner 
 or later be forced to abandon the unequal contest and 
 surrender to his more opulent rival. If the principle is 
 sound in its application to rival parties engaged in. mining 
 
 '» 12 Fed. 309. 
 
 [596] 
 
Forms of Illegal Discrimination [ ^ 685 
 
 coal, it is equally applicable to merchants, manufacturers, 
 millers, dealers in lumber and grain, and to everybody 
 else interested in any business requiring any- considerable 
 amoimt of transportation by rail; and it follows that the 
 success of all such enterprises would depend as much on the 
 favor of railroad officials as upon the energies and capaci- 
 ties of the parties prosecuting the same." '^ 
 
 § 685. Reductions to large shippers unjust to small 
 shippers. 
 
 Naturally the practice of some railroads under some 
 circumstances of making lower rates to large customers was 
 one of the first complaints brought to the Interstate 
 Commerce Commission. One of those cases was Provi- 
 dence Coal Company v. Providence & Worcester Rail- 
 road Company,^^ in which case it appeared that the tariff 
 of the railroad on coal contained a provision for a discount 
 of 10 per cent to any person, firm or company, who shall 
 receive consignments of coal, in any one year, amounting 
 to 30,000 tons or upwards, at any one station on the line 
 of this road. But the Commission was very plainly set 
 against any such differential, Mr. Commissioner Cooley 
 saying: "The discrimination is therefore necessarily unjust 
 within the meaning of the law. It cannot be supported by 
 the circmnstance that the offer is open to all; for although 
 made to all, it is not possible that all should accept. 
 Moreover, in testing such a discrimination we must con- 
 sider the principle by which it must be supported; and the 
 principle which would support a 30,000 ton limitation 
 would support one of 50,000 or 100,000 equally well; the 
 quantity named would be arbitrary in any case. It might 
 easily be so high as practically to be open to the largest 
 dealer only. A railroad company, if allowed to do so, 
 might in this way hand over the whole trade on its road 
 
 " Discussing particularly Nicholson '- 1 Int. Com. Rep. 363, 1 I. C. C. 
 
 V. Gt. Western Ry., 5 C. B. (N. S.) Rep. 107. 
 366. 
 
 [597] 
 
§ 686 ] Railroad Rate Regulation 
 
 in some necessary article of commerce to a single dealer; 
 for it might at will make the discount equal to or greater 
 than the ordinary profit in the trade; and competition by 
 those who could not get the discount would obviously be 
 then out of the question. So extreme a case would not, 
 however, be needful to show the inadmissibiUty of such a 
 discount as is here offered; the injustice would be equally 
 manifest if several dealers instead of one were able to 
 accept the offer. A railroad company has no right, by any 
 discrimination not grounded in reason, to put any single 
 dealer, whether a large dealer or a small dealer, to any 
 such destructive disadvantage." *' 
 
 § 686. Services to large and small practically identical. 
 
 Moreover, the services to large shippers and to small 
 shippers are practically identical. The large shipper, to 
 be sure, sends more carloads in the aggregate than the 
 small shipper, it was truly said in a court proceeding, but 
 it makes no real difference whether a railroad takes two 
 cars from A or one car each from A and B. And it is 
 plain that to carry two barrels of sugar for one person on 
 a given date, and to carry one barrel of sugar for another 
 person, between the same points, over the same route, 
 two days later, are contemporaneous, and like services.*"* 
 The argument was pressed further in another case of the 
 same period; it is not in the least certain that the shipper 
 who furnished the largest aggregate tonnage during the 
 year may not have shipped in the most irregular way in 
 the most inconvenient quantities. "This charge is justified 
 by the master upon the ground that the quantity of oil 
 shipped by another shipper was much larger than that 
 shipped by the petitioner, and hence that the larger pro- 
 portionate expense attending the handling and transporta- 
 
 " The Commission has lately said such facilities. In re Restricted 
 
 that a lower rate is not permitted to Rates, 20 I. C. C. 426. 
 
 large shippers providing unloading '* United States v. Tozer, 39 Fed. 
 
 facilities, than would be accorded to 369. 
 smaller shippers, unable to provide 
 
 [598] 
 
Forms of Illegal Discrimination [ § 687 
 
 tion of the smaller shipment warranted a higher rate than 
 was charged for the larger shipment. In this conclusion 
 we do not agree with the learned master. It does not 
 differentiate the service performed for the several shippers, 
 nor the conditions or circumstances under which it was 
 performed. The only difference is that in one case the 
 quantity shipped was larger, and in the other case it was 
 smaller. This has been repeatedly held to be an insuJBficient 
 and unwarrantable reason for discriminating rates of 
 charge." ^^ 
 
 § 687. Differences in amount of shipment. 
 
 No dissimilarity of conditions which can justify a differ- 
 ence in rate is, therefore, created by the total amount of 
 shipments during a certain time, as so much in a year.** 
 A shipment of a large amount at one time may, however, 
 justify a lower rate if it results in economy of operation, 
 as for instance a carload shipment, provided the differ- 
 ence is reasonable in view of the saving effected.*^ So a 
 rule making a minimum charge of one hundred pounds 
 on shipments of less weight is justifiable.** If the amount 
 of the shipment will not lead to a considerable saving in 
 expense to the carrier, no difference can be made on ac- 
 count of it; so, where the shipment is in cargo or train- 
 load quantities, it cannot get less than carload rates.*' A 
 railroad should not be permitted to adopt a system of 
 rate making which will enable a large dealer to drive a 
 small dealer out of the market, and the Commission can- 
 not act on the theory that the trade of a particular com- 
 munity is a vested right belonging to any particular class 
 
 86 Kinsley v. Buffalo, N. Y. & P. R. R. R., 2 Int. Com. Rep. 742, 3 I. C. C. 
 
 R., 37 Fed. 181. 473; Buckeye Buggy Co. v. Cleve- 
 
 ^ Providence Coal Co. v. Provi- land, C, C. & S. L. R. R., 9 I. C. C. 
 
 dence & W. R. R., 1 Int. Com. Rep. Rep. 620. 
 
 363, 1 I. C. C. 107; United States v. »* Wrigley v. Cleveland, C, C. 
 
 Tozer, 39 Fed. 369, 2 Int. Com. Rep. & St. L. R. R., 10 I. C. C. Rep. 
 
 597; Kingsley v. Buffalo, N. Y. & P. 412. 
 
 Ry., 3 Int. Com. Rep. 318. ^ Paine v. Lehigh Valley R. R., 
 
 8' Thurber v. New York C. & H. R. 7 I. C. C. Rep. 218. 
 
 [599] 
 
§ 688 ] Railroad Rate Regulation 
 
 in the community; and since the effect of an order pre- 
 scribing differentials on less-than-carload quantities would 
 be to place a tax on retailers in order that jobbers in 
 southeastern territory might realize a profit in compe- 
 tition with Nashville jobbers and at the expense of that 
 community, such an order should be refused.®" 
 
 § 688. Reductions to groups of passengers. 
 
 Reductions to passengers in parties can only be justified 
 if there is a difference in the cost of service. Thus such 
 reductions were held by the Commission ®^ to forbid grant- 
 ing a special reduced rate to all persons traveling in parties 
 of ten or more. The Commission ruled that the selling 
 of "party rate" tickets was not within any of the dis- 
 criminations specifically excepted and allowed by section 
 22 of the Act. The Supreme Court,*^ however, rightly 
 held that conveying one person singly and conveying him 
 as one of a party of ten did not constitute like services, 
 "under substantially similar circumstances and condi- 
 tions," that the making of a lower rate per capita for party 
 rate tickets was a due and reasonable preference and not 
 imlawful discrimination. "In order to constitute an un- 
 just discrimination under section 2 the carrier must charge 
 or receive directly from one person a greater or less com- 
 pensation than from another, or must accomplish the 
 same thing indirectly by means of a special rate, rebate, 
 or other device; but, in either case, it must be for a 'like 
 and contemporaneous service in the transportation of 
 a like kind of traffic, under substantially similar circum- 
 stances and conditions.' To bring the present case within 
 the words of this section, we must assume that the trans- 
 portation of ten persons on a single ticket is substantially 
 identical with the transportation of one, and, in view of 
 
 » Duncan & Co. v. N. C. & St. B. & O. R. Co., 2 Int. Com. Rep. 729, 
 L. Ry., 16 I. C. C. 590. 3 I. C. C. Rep. 465. 
 
 " Pittsburg, C. & St. L. R. Co. v. '^ Interstate Com. Com. v. B. & O. 
 
 R. R., 145 U. S. 263, 12 Sup. Ct. 844. 
 
 [600] 
 
FoEMs OF Illegal Disckimination [ § 689 
 
 the universally accepted fact that a man may buy, con- 
 tract, or manufacture on a large scale cheaper proportion- 
 ately than upon a small scale, this is impossible." 
 
 § 689. Special kinds of passenger transportation. 
 
 The Commission has no authority under the Act to 
 require carriers to estabUsh special fares, based upon less 
 than the normal passenger-mile revenue, for the use of 
 passengers on particular occasions or for special purposes.'^ 
 But where a carrier has undertaken a definite and regular 
 commutation service, the power as well as the duty of 
 the Commission, under section 1, to examine into the 
 reasonableness of the charges exacted, when complaint 
 has been made, seems to be beyond question.'^ Upon 
 duly established tariff authority therefor, the initial carrier 
 may issue to a passenger a through ticket for the sum of 
 two or more duly established fares applicable over the 
 several connecting roads, composing the through Une from 
 the starting point to destination, which will cover the 
 entire journey that the passenger desires to take.®^ It 
 would seem to follow from what has been said that the 
 issuance of mileage tickets is, therefore, optional.'^ And 
 a special rate may be conditioned upon a certain number 
 attending a convention under certain conditions.'' It has 
 long been established that party rates cannot be limited 
 to particular classes, but must be opened to general pub- 
 lic.*^ Apparently then no discrimination is shown from 
 maintaining an excursion rate to and from one town, and 
 refusing it at another.'^ But the Commission has recently 
 held that a railroad ought to sell a 50-trip family ticket 
 
 "» Field V. Southern R., 11 I. C. C. " National Ass'n of Letter Car- 
 
 298. riers v. A., T. & S. F. Ry., 20 I. C. 
 
 0* Commutation Rate Case, 21 C. 6. 
 
 I. C. C. 428; see also Edelsten v. ™ Re Party Rate Tickets, 12 I. C. 
 
 Pa. R. R., 26 I. C. C. 359. C. 95; see also Koch Secret Service 
 
 "In re Mileage, Excursion and v. Louisville & N. Ry., 11 I. C. C. 
 
 Commutation Tickets, 23 L C. C. 95. 523. 
 
 M Eschner v. Pennsylvania R. R., >» Ballin v. S. P. Co., 19 I. C. C. R. 
 
 18 I. C. C. 60. 503. 
 
 [601] 
 
§ 690 ] Railroad Rate Regulation 
 
 from Connecticut so long as they are sold from points in 
 New York State. ^ Reduced rates restricted to school chil- 
 dren have been said to be discriminatory; ^ but a carrier 
 may sell children's tickets, open to all purchasers.' 
 
 Topic C. Rebates to Exclusive Shippers 
 
 § 690. Lower rates formerly made to exclusive shippers. 
 
 The advantages which may accrue to the railroad com- 
 pany if it may make lower rates to those who will ship 
 by it exclusively are plain; and this policy would largely 
 prevail in making rates between competitive points doubt- 
 less if it were not for the recognition of its essential il- 
 legality. That such a poUcy may be advantageous to the 
 company which employs it may be granted, but it has 
 already been seen that those who conduct a pubUc em- 
 ployment must forego many methods of getting business 
 and holding it which are permissible in private affairs.^ 
 The chief argument made in favor of such specially lower 
 rates to those who will ship exclusively is to say that 
 there is in reality no personal discrimination in such an 
 arrangement when it is open to all who choose to conform 
 to the condition. But this is as inconclusive here as it is 
 when used in support of other kinds of discrimination 
 between different shippers, for if the condition is one which 
 it is inconsistent with public duty to impose, there is no 
 legal justification for any departure from equality of rates 
 to all who ask the same transportation for like goods. ^ 
 
 1 Commutation Rate Case, 27 N. E. 311, 18 L. R. A. 105 and note; 
 I. C. C. 549. McNeer v. Mo. Pac. Ry., 22 Mo. App. 
 
 2 In re Restricted Rates, 20 I. C. 224; Messenger v. Pennsylvania R. 
 C. 426. R., 7 Vroom (36 N. J. L.), 407, 13 
 
 » Re Commutation, 17 I. C. C. 144. Am. Rep. 457, 8 Vroom (37 N. J. L.), 
 
 ' See Chapter X, supra. By the 531, 18 Am. Rep. 754, Hilton Lumber 
 
 general rule it would seem to con- Co. v. Atlantic Coast Line, 136 N. 
 
 stitute illegal discrimination to give C. 479, 48 S. E. 813; Scofield v. L. 
 
 rebates to exclusive shippers. Men- S. & M. S. R. R., 43 Ohio St. 571, 3 
 
 acho V. Ward, 27 Fed, 529, B. & N. E. 907, 54 Am. Rep. 846. 
 W. 372; Louisville, E. & St. L. Con. ' But see Lough v. Outerbridge, 
 
 R. Co. v. Wilson, 132 Ind. 517, 32 143 N. Y. 271, 38 N. E. 293, 42 Am. 
 
 [6021 
 
Forms op Illegal Discrimination [§§691, 692 
 
 § 691. Such discriminations foster monopolies. 
 
 One of the leading cases against personal discrimination 
 is Schofield v. Lake Shore & Michigan Southern Railway 
 Company.* In that case it appeared that the railway 
 company, having tariff rates for the public generally, con- 
 tracted with the Standard Oil Company that, in considera- 
 tion of said -company giving to the railway its entire freight 
 business in the products of petroleum, they would trans- 
 port such freight for the company at certain rates, about 
 ten cents per barrel cheaper than for any other customers 
 whatsoever. The prayer of the bill brought by shippers 
 for reUef from this situation was granted in an elaborate 
 opinion, the tenor of which may be judged from the follow- 
 ing paragraph: "The principle is opposed to a sound 
 public policy. It would build and foster monopolies, add 
 largely to the accumulated power of capital and money, 
 and drive out all enterprise not backed by overshadowing 
 wealth. With the doctrine as contended for by the de- 
 fendant, recognized and enforced by the courts, what will 
 prevent the great grain interests of the northwest, or the 
 coal and iron interest of Pennsylvania or any of the great 
 commercial interests of the country, bound together by the 
 power and influence of aggregate wealth, and in league 
 with the railroads of the land, driving to the wall all 
 private enterprises struggling for existence, and with an 
 iron hand thrusting back all but themselves?'" 
 
 § 692. Shippers who agree to give all their business. 
 
 The mere fact that a shipper agrees to give all his busi- 
 ness to the carrier does not justify a concession from regular 
 rates. Such inducements seem once to have been held out 
 to shippers commonly in England; but the decisions of 
 the courts have been against them.* They have uniformly 
 
 St. Rep. 712, 25 L. R. A. 674, and ' See further, LouisviUe, E. & St. 
 
 Fitchburg R. R. v. Gage, 12 Gray L. C. R. R. v. Wilson, 132 Ind. 617, 
 
 (Mass.), 393. 32 N. E. 311. 
 
 • 43 Ohio St. 571, 3 N. E. 907, 54 » Baxendale v. Great Western R. 
 
 Am. Rep. 846. Co., 5 C. B. (N. S.) 309; Diphwys 
 
 [603] 
 
§ 693 ] Railroad Rate Regulation 
 
 held it unlawful preference to give reduced rates in con- 
 sideration of an agreement to employ other lines of the 
 company for the carriage of other traffic or to employ 
 the company in other distinct business; which is obviously 
 good law, as the carriage of goods to other points does not 
 affect the cost of carriage between the particular points.' 
 Upon the same principles the railways have been forbidden 
 to charge a higher wharfage rate on goods to be conveyed 
 by another railway^" or to grant a reduced rate in consider- 
 ation of a contract to carry aU of certain goods and to 
 prevent their being carried by water or other means." 
 It seems plain that in all of these cases no other decisions 
 would have been justifiable than those which were given, 
 because the pohcies pursued by the railways in all of these 
 cases seem opposed to the public duty which the common 
 carrier owes the shipping public. 
 
 § 693. Consideration of the cost of serving. 
 
 Upon the principles set forth in the preceding para- 
 graph it will be plain why it is permissible to make differ- 
 ences in the rating of the same goods based on the nature 
 and size of the package, large packages being given rela- 
 tively lower rates than small packages. And likewise if 
 the shipment is in a form more convenient for handling, as 
 in casks rather than in cases, or if the freight is tendered 
 in a form permitting a greater carload, the difference 
 between cotton in bulk and in tightly compressed bales for 
 example, lower rates may be given proportionate to the 
 difference in the cost of service." "We are not unmind- 
 
 Casson Slate Co. v. Festining R. Co., '" Toomer v. London R. Co., 3 
 
 2 Nev. & Mac. 73; Bellsdyke Coal Nev. & Mac. 79. 
 
 Co. V. N. B. R. Co., 2 Nev. & Mac. " Garten v. Bristol & E. R. R. Co., 
 
 105. 1 Nev. & Mac. 218. 
 
 ' Baxendale v. Great Western R. " These general considerations 
 
 Co., 5 C. B. (N. S.) 309; Twellis v. have already been discussed in 
 
 Pa. R. R. Co., 3 Am. L. Reg. (N. S.) Chapter XI. See The Western 
 
 728; Bellsdyke Coal Co. v. North Classification Case, 25 I. C. C. 244, 
 British R. Co., 2 Nev. & Mac. 105. 
 [604] 
 
Forms of Illegal Discrimination [ § 694 
 
 ful of the rule which permits a common carrier to dis- 
 criminate in favor of a shipper who transports large 
 quantities of a given commodity in one parcel at a time, 
 as against a shipper who transports the broken packages. 
 Such discrimination is rendered necessary by the increased 
 expense of handling, storing, and caring for the smaller 
 quantities, and is not unreasonable." ^^ 
 
 § 694. Shippers requiring less service. 
 
 At common law formerly it could be shown in any case 
 that the conditions under which particular shipments are 
 made produce such economies in handling the traffic as to 
 justify the reductions made in the rates. An excellent case 
 to illustrate this general doctrine is American Central 
 Insurance Company v. Chicago & Alton Railway Com- 
 pany," where the issue was raised whether a stipulation in 
 a contract between a raihoad company and its elevator 
 lessee by which the former was to carry the latter's grain 
 from the elevator in carload lots at less rate than its 
 regular tariff, was justifiable. In holding that this did 
 not constitute Ulegal discrimination Judge Smith said: 
 "From the face of the lease it very clearly appears that 
 the service for which the rebate was to be allowed the 
 lessee, and those claiming imder it, was not the same nor as 
 great as the ordinary shipper. The transient shipper 
 furnishes no warehouse for the storage nor any supervision 
 of his grain nor the labor necessary to handle the same, 
 but these are supplied wholly by the carrier. Not so of 
 the lessee of the carrier who constructs his own storehouse 
 and also supplies at his own expense the supervision and 
 labor necessary for the care, storage and loading of his 
 grain, the carrier thereby escaping much expense that it 
 mu^t incur in case of the transient shipper." " 
 
 12" LouisviUe, E. & St. L. C. Ry. 114 N. Y. 330, 21 N. E. 403, 11 Am. 
 V. Wilson, 132 Ind. 517, 32 N. E. 211. St. Rep. 643, 4 L. R. A. 33, laying 
 " 74 Mo. App. 89. down the same principles in sweeping 
 
 '< See Root v. Long Island R. R., generalizations. 
 
 [6051 
 
§§ 695, 696 ] Railroad Rate Regulation 
 
 § 695. Shippers who agree to furnish large quantities. 
 
 It would seem to follow, although this has appeared to 
 some courts more doubtful, that shippers who agree to 
 furnish large quantities of freight should have no better 
 standing. It is true that the advantage to the railroad 
 company may be proved, but the injustice to the small 
 shipper who can make no such undertaking remains the 
 controlling factor in the situation. This was well shown 
 in an Indiana case" where the court said: "It is con- 
 tended by the appellant that, ia view of the fact it secured 
 by its contract with Dickason a certain income of $7,000 
 per month, it could as well afford to carry ties for him 
 at $14 per car as to carry them for the appellees at $24 
 per car. We find it unnecessary to inquire whether the 
 appellant is correct or otherwise in this contention, for, as 
 we understand the law, a railroad company engaged in the 
 business of a common carrier is not permitted by the law 
 to discriminate in favor of a shipper who is able to furnish 
 a large amount of freight over one engaged in the same 
 business who is unable to furnish the same quantity as 
 that shipped by his more opulent rival. The reasons for 
 prohibiting such discrimination are well stated in the case 
 of Hays v. Pennsylvania Co. In our opinion, the fact 
 that Dickason was able to furnish a larger number of car- 
 loads of ties for shipment than the appellees could con- 
 stituted no sufficient reason for a discrimination in his 
 favor over the rates charged to the appellees." '* 
 
 § 696. Charging other shippers more than contract rates. 
 
 In the interesting case of Houston and Texas Central 
 Railroad Company v. Rust,"" the railroad and certain 
 shippers entered into an agreement by which the shippers 
 promised to ship all their goods and the railroad under- 
 
 15 Louisville, E. & St. L. C. R. R. v. tion to give all its traffic to a R. R. 
 
 Wilson, 132 Ind. 517, 32 N. E. 311. Co. in consideration that R. R. Co. 
 
 «= R. R. Co. et als., Appellants, v. will subscribe to corporation bonds, is 
 
 R. R. et al. 284. based upon sufficient consideration. 
 
 An agreement between a corpora- " 53 Tex. 98. 
 
 [606] 
 
Forms of Illegal Discrimination [ § 697 
 
 took to give a certain rate. Later they raised other 
 rates; but this in itself this court held not to be discrimina- 
 tion against other shippers. "It ought to have been sub- 
 mitted to the jury to determine whether imder all the 
 facts of the case, the defendant charged the plaintiffs a 
 rate beyond what was reasonable, and beyond the price 
 which was exacted of the public generally at the times 
 when the plaintiffs shipped their cotton on the defendant's 
 railroad. And, if, although the plaintiffs were not re- 
 quired to pay a higher rate than the public generally, yet 
 if the defendant had allowed to certain particular persons 
 or merchants in a certain particular locahty, more ad- 
 vantageous terms than had been given to the public 
 generally, or to the plaintiffs, it ought to have been sub- 
 mitted as an issue of fact for the jury to determine, 
 whether (under appropriate instructions applicable to 
 the subject), imder all the evidence applicable to the 
 question, such preference so given was a fair and legitimate 
 one; one justified by the common-law rule forbidding the 
 carrier to give one special privileges which it denies an- 
 other, but which at the same time does not exclude as 
 forbidden contracts for transportation at a less rate in 
 special cases, where, imder the circumstances, the dis- 
 crimination appears reasonable." ^* 
 
 § 697. Competitive rates for through business. 
 
 But against preferential devices to hold business the 
 recent American cases are clearly opposed. Thus in one 
 Federal case, it was held that a lower rate could not be 
 made for the transportation of goods from B to C which 
 came from A, whence a competitive line to C ran.^' And 
 in a recent State case it was held that a lower rate could 
 not be made for transportation from A to B of goods 
 
 '8 See also Aviager v. So. Car. Ry., & O. R., 60 Fed. 545. See also Brandt 
 29 S. C. 265, 7 S. E. 493, 13 Am. St. Milling Co. Case, 4 Can. Ry. Cas. 
 Rep. 716. 259. 
 
 " Bigbee & W. R. P. Co. v. Mobile 
 
 [6071 
 
§ 698 ] Railroad Rate Regulation 
 
 destined to be forwarded from B to C.^" Although the 
 law thus no longer permits such concessions to get busi- 
 ness, because it is seen that these would constitute per- 
 sonal discrimination between two customers asking exactly 
 the same service, yet these considerations are still held to 
 justify making a lower rate from a more distant point as 
 will be seen in the last chapter of this part of the treatise. 
 Where a competitive line exists at this point, it will even 
 justify this even if the long haul includes the short haul 
 within it. This means, of course, that the general law 
 against all discrimination has not as yet become as recog- 
 nized as the particular law against personal discrimination, 
 but in regard to this relative discrimination the law is 
 where it was as to all personal discrimination some time 
 ago. 
 
 § 698. Previous or subsequent haul. 
 
 The mere fact that the carrier will have later from the 
 same patron a subsequent haul out-bound on manufac- 
 tured articles does not justify the making to the shipper 
 who is doing this a lower rate on the in-bound shipments of 
 his raw materials ; and it would seem to follow that the 
 carrier cannot make a lower rate on the out-boimd trans- 
 portation to shippers who have previously given the 
 in-bound traffic. ^^ And in a later case where a transit 
 privilege had been established, the Commission condenmed 
 as unreasonable increases in local rates to transit points, 
 which were to be refunded upon the shipment out-bound 
 upon the products. ^^ In accordance with these principles the 
 Commission has held, where the defendant's tariff provided 
 a local rate on cottonseed into Fort Smith, Ark., with a 
 provision that in case the shipper employed defendant's 
 road in hauling the manufactured product out, he should 
 
 2» Alabama & V. R. R. Co. v. "In re Substitution of Tonnage 
 
 Railroad Comm., 86 Miss. 667, 38 at Transit Points, 18 I. C. C. 
 
 So. 356. See also Hope Cotton Oil 280. 
 
 Co. V. Texas & P. R. R., 10 I. C. C. '^ Red River Oil Co. v. T. & P. Ry., 
 
 Rep. 696. 23 I. C. C. 438. 
 
 [608] 
 
Forms of Illegal Discrimination [ § 699 
 
 be entitled to a refund of a part of the rate into Fort 
 Smith, that such a provision was unlawfully discrimina- 
 tory.'" But the Commission in a recent case, apparently 
 modified this by saying that carriers may in connection 
 with transit privileges reduce their reasonable rates in 
 consideration of getting out-bound shipments, but cannot 
 add thereto any sum as penalty to be forfeited if the out- 
 bound shipment does not move over same line which 
 handled in-bound raw material.^* It is probably true that 
 in fixing rates in general weight may be given by the 
 carrier to the fact that the free movement of the com- 
 modity is an auxiliary to the production of larger volume 
 of traffic to the carriers.^' But the Commission has 
 declined to lower rates merely because the carrier had a 
 previous haul on raw material.^* 
 
 § 699. Other methods of holding business. 
 
 The general principle is that all goods offered for ship- 
 ment at a certain point must be carried at the estab- 
 lished rate for such goods from such point, regardless of the 
 place where they originated.^'' And the Commission has 
 recently ruled that local rates to a junction point should 
 be same for all shippers to that point, and the through 
 rate on shipments going beyond the junction should be 
 alike for all shippers to the destination. '* And an arrange- 
 ment has been squarely condemned where a lower local rate 
 was given, provided only the goods were originally shipped 
 into a trading center over the defendant's lines, on the 
 ground that such a rate was not in any sense a propor- 
 tional rate, nor could it be sanctioned as a transit, recon- 
 signment or diversion privilege, but was simply an unlaw- 
 ful device to compel shippers to send their goods over 
 
 2' Memphis Freight Bureau v. ™ Paragon Plaster Co. v. N. Y. C. 
 
 Ft. S. & W. R. R., 13 I. C. C. 1, 4. & H. R. R. R., 19 I. C. C. R. 480. 
 
 " May Bros. v. Y. & M. V. R. R., " See Bascom Co. v. A., T. & S. F. 
 
 26 I. C. C. 323. Ry., 17 I. C. C. 354. 
 
 25 Meridan Fertilizer Factory v. '* In re Restricted Rates, 20 I. C. 
 
 T. & P. Ry., 26 I. C. C. 351. C. 426. 
 
 39 [ 609 ] 
 
§ 700 ] Railroad Rate Regulation 
 
 defendant's road.^' And the general principle was again 
 laid down in a still later case that a common carrier cannot 
 impose an unreasonable rate because of the origin of the 
 traffic.'" 
 
 Topic D. Concessions for Special Kinds of Business 
 
 § 700. Different rates for goods used for different purposes. 
 
 It is strongly urged by the railroads that they should be 
 allowed to make different rates for goods which are going 
 to be used for different purposes. It is pointed out -that in 
 order to get more traffic, which by reason of the law of 
 increasing returns is for the benefit of all concerned, it will 
 often be necessary for them to make lower rates for goods 
 which are going to be used for one purpose than for goods 
 which are going to be used for another purpose.'^ More- 
 over, the railroad managers take a higher plane of argu- 
 ment when they urge that to make different rates for 
 different users they may further the development of the 
 industries of the communities which they serve. But 
 neither of these arguments can be pushed too far in a 
 legal discussion because in so far as any railroad poUcy 
 involves discrimination it is illegal; and to charge one of 
 two shippers who wants exactly the same transportation 
 of the same goods one rate while another shipper is 
 charged another rate is personal discrimination prima 
 fade.^^ 
 
 ^^ Bascom Co. v. A., T. & S. F. Ry., the use to which a commodity is put. 
 
 17 I. C. C. 354. Metropolitan Paving Brick Co. v. 
 
 »« Acme Cement Plaster Co. v. A. A. R. R., 17 I. C. C. 197. 
 
 C. G. W. Ry., 18 I. C. C. 19. ^'^ But in the following case such 
 
 " Whether concessions may be reductions are forbidden: Fitzgerald 
 
 made for special kinds of business is a v. Grand Trunk Ry., 63 Vt. 169, 22 
 
 debated question. Such reductions Atl. 76, 13 L. R. A. 70. 
 
 were allowed in Hoover v. Pennsyl- The use to which a commodity is 
 
 vania R. R., 156 Pa. St. 220, 27 Atl. put affords no basis for a difference 
 
 282, 36 Am. St. Rep. 43, 22 L. R. A. in rates under the Act. Sligo Iron 
 
 263. Store Co. v. A., T. & S. F. Ry., 17 
 
 The Commission will refuse to I. C. C. 139. 
 sanction a clEissification resting upon 
 
 [610] 
 
Forms op Illegal Discrimination [ § 701 
 
 § 701. Such rates formerly allowed. 
 
 The argument for allowing the making of different rates 
 for the same commodities which are destined to be used for 
 different purposes is a strong one. How strong it is from 
 an economic point of view may be seen by an examination 
 of the leading case supporting this argument, Hoover v. 
 Pennsylvania Railroad." In that case the court held that 
 an agreement to charge a uniform rate on shipment of 
 coal to the Bellefonte Nail Works for consumption in 
 operating its machinery could not be complained of as 
 unjust discrimination against a mere dealer, who re- 
 ceived his coal over the same road and was charged a 
 higher rate, the court relying upon the broadest grounds 
 of public policy to justify this result, Mr. Justice Green 
 saying: "In point of fact, it is perfectly well known and 
 appreciated that the output of freights from the great 
 manufacturing centers upon our lines of transportation 
 constitutes one of the chief sources of the revenues which 
 sustain them financially. Yet no part of this income is 
 derived from those who are mere buyers and sellers of 
 coal. When the freight is paid upon the coal they buy, 
 the revenue to be derived from that coal is at an end. Not 
 so, however, with the revenue from the coal that is carried 
 to the manufacturers. That coal is consximed on the 
 premises in the creation of an endless variety of products, 
 which must be put back upon the transporting lines, 
 enhanced in bulk and weight by the other commodities 
 which enter into the manufactured product, and is then 
 distributed to the various markets where they are sold." '* 
 
 " 156 Pa. St. 220, 27 Atl. 282, 22 L. a lower freight rate for narrow gauge 
 
 R. A. 263, 36 Am. St. Rep. 43. cars for use of railroads engaged in 
 
 See also Louisville & W. R. R. v. the carrying business than for those 
 
 Fulgam, 91 Ala. 555, 8 So. 803. intended to be used for logging pur- 
 
 '* In Missouri, K. & T. R. R. v. poses. 
 
 Trinity C. L. Co., 1 Tex. Civ. App. In Fry v. Louisville & W. Ry., 103 
 
 553, 21 S. W. 290, the court left the Ind. 265, 2 N. E. 744, a lower rate 
 
 question open, whether it was illegal quoted for farm purposes passed 
 
 discrimination for a raib-oad to fix scrutiny without objection. 
 
 [611] 
 
§§ 702, 703 ] Railroad Rate Regulation 
 
 § 702. Repudiation of this doctrine. 
 
 However, this doctrine is plainly inconsistent with the 
 modem law against discrimination which in its develop- 
 ment to-day insistently forbids all discrimination. This is 
 well brought out in the Railroad Discrimination Case " 
 where it was held that a carrier may not give one customer 
 a lower rate of freight than another merely because the 
 former ships the manufactured product over the carrier's 
 line, Chief Justice Clark saying: "The proposition that a 
 common carrier has a right to charge one person a lower 
 rate of freight than another for shipping the same quantity 
 the same distance, under the same conditions, provided 
 the shipper give the company a consideration (shipping 
 the manufactured lumber subsequently over its line), 
 which its managers think will make good to it the abate- 
 ment of rate given to such parties." "But if this is equality 
 as to the treasury of the company," said Chief Justice 
 Clark, "it is none the less a discrimination against the 
 plaintiff." '" 
 
 § 703. Such differences now held illegal discrimination. 
 
 When all has been said of special rates for manufacturers 
 the fact of personal discrimination remains; and it is 
 submitted that the law against personal discrimination has 
 developed so far as to have become a positive rule for the 
 benefit of all shippers.^' An excellent illustration of this 
 within a few years was the disposition made of this prob- 
 lem by the Canadian Railway Commission when this 
 problem first came before them.^* "The law is clear that 
 the allowance of a reduction in the freight rate on any 
 article of merchandise to one class of shippers and refusal 
 
 " Hilton Lumber Co. v. Atlantic " See Duncan v. A., T. & S. F. Ry., 
 
 Coast Line, 136 N. C. 479, 48 S. E. 6 I. C. C. 85. 
 
 813. '' Manufacturers' Coal Rates Case, 
 
 '* See the further discussion of this 3 Can. Ry. Cas. 438. In Manufac- 
 
 case in an eloquent opinion against turers' Construction Material Case, 
 
 all discrimination in Hilton Lumber 3 Can. Ry. Cas. 427, the Commission 
 
 Co. V. Atlantic C. L. Ry. Co., 141 foreshadowed this opinion. 
 N. C. 171, 53 S. E. 823. 
 [612] 
 
Forms of Illegal Discrimination [ § 704 
 
 of the same rate to another is unjust discrimination, and 
 unjust discrimination is prohibited by the Railway Act. 
 Common carriers are bound by every principle of justice 
 and law to accord equal rights to all shippers who are 
 entitled to like treatment both in the receiving of supplies 
 and the shipment of their products, and a carrier who, 
 under any pretext whatsoever, grants to one shipper an 
 advantage which he denies to another violates the spirit 
 and thwarts the purpose of the law. This is a statement 
 of a conclusion arrived at by the Interstate Commerce 
 Commission in a question very similar to the present and 
 will be found in a case of Castle v. Baltimore & 0. Ry. Co.,'" 
 and to this judgment and opinion this Board subscribes." *° 
 
 § 704. Classification based upon use. 
 
 A carrier has no right to attempt to dictate as to the 
 uses to which commodities transported by it shall be put; 
 as its duty is to transport all goods offered at its tariff 
 rates, and on equal conditions for all. Therefore, tariffs 
 naming different rates on nitrate of soda when destined 
 for the manufacture of fertilizer and that for the making 
 of powder were held unlawful.^^ The Commission has 
 been set against the maintenance of different rates upon 
 the same commodity dependent upon the use to which the 
 article is put.*^ Latterly a difference in the rate according 
 to the use to which a commodity is put has received 
 general condemnation in various opinions of the Com- 
 mission.*^ In a recent proceeding it appeared that the 
 
 » 8 I. C. C. Rep. 333. St. L. & S. R. R., 13 I. C. C. 
 
 « In Capital City Gas Co. v. Cen- 651. 
 
 tral Vt. Ry., 11 I. C. C. Rep. 103, « Hardie Mfg. Co. v. O. R. R. & 
 
 the Interstate Commerce Commie- N. Co., 24 I. C. C. 545; see also 
 
 sion held that it constituted illegal Memphis Freight Bureau v. St. L. 
 
 discrimination to make a rate of SO & S. F. R. R., 24 I. C. C. 602. 
 
 cents per ton for bituminous coal for " Paper rates from Manitowoc 
 
 railroad supply while charging $1.85 and Milwauiiee to Kaukauna, Wis., 
 
 per ton to complainant and other 28 I. C. C. 305; see also Metropolitan 
 
 consignees. Brick Co. v. A. A. R. R., 17 I. C. C. 
 
 "Fort Smith Traffic Bureau v. 197. 
 
 [613] 
 
§ 705 ] Railroad Rate Regulation 
 
 carrier had dual rates: first, an open rate on coke, and 
 second a lower rate when the coke was for use in blast 
 furnaces, but this was held improper, although it was 
 publicly scheduled and open to all who qualified them- 
 selves for the lower rate.*^ It will be remembered that 
 this principle against basing rating upon the use to which 
 the article is put has already been discussed in the pre- 
 vious Chapter on Classification of Freights. 
 
 § 705. Personality of shipper. 
 
 It would seem, therefore, to be fundamental that a rate 
 cannot be confined in its terms or application to an in- 
 dividual or a class.^' It is now well estabUshed that it is 
 no defense to a charge of undue discrimination between 
 manufacturers to urge that they are not engaged in the 
 manufacture of the same or similar articles, and do not 
 compete in the same markets.^* The practice of naming 
 specific consignors and consignees as entitled to special 
 service has often been condemned.^' Undue preference 
 results from a demand for higher charges for new than 
 demanded from old subscribers for same telephone service 
 and facilities.** Rates on coal appUcable only to ship- 
 ments of certain consignors or consignees have been un- 
 hesitatingly condemned.*' Even a railroad stands like 
 every other shipper; and it is unlawful to apply one rule 
 when a shipment is for a carrier, and a different rule when 
 it is for a private individual.*" The Supreme Court has 
 finally settled this question by holding that a difference in 
 rates to railroad consignees for fuel coal amounts to un- 
 
 ** St. Louis Blast Furnace Co. v. ^ Union Tanning Co. v. S. Ry., 25 
 
 v. Ry., 25 I. C. C. 183. I. C. C. 112. 
 
 If^proper to base rate upon use to " Pierce Co. v. N. Y. C. & H. R. 
 
 which commodity may be put. R. R., 19 I. C. C. 597. 
 
 Anaconda Copper Mining Co. v. *' Shoemaker v. C. & P. Tel. Co., 
 
 C. !& E. R. R., 19 I. C. C. R. 201. C. C.614. 
 
 592. •" In re Restricted Rates, 20 I. C. 
 
 45 Virginia-Carolina Chemical Co. C. 741. 
 
 V. A. C. L. R. R., 22 I. C. C. ™ Crescent Coal & Mining Co. v. 
 
 .394. B. & O. R. R., 23 I. C. C. 81. 
 
 [ 614 ] 
 
Forms of Illegal Discrimination [ §§ 706, 707 
 
 just discrimination under these sections of the Act." 
 And the Commission has recently ruled that discrimination 
 cannot be avoided if a competing electric line is not given 
 same coal rates as are accorded steam railroad/^ 
 
 § 706. Restricting rates to certain purposes. 
 
 It has been seen that it is now considered fundamental 
 that a classification should not rest upon the use to which 
 article is to be devoted.*' It is, therefore, unlawful to main- 
 tain different rates of freight dependent upon use of the 
 goods. *^ The principle is repeated in many opinions that 
 a rate cannot be based upon the use to which the com- 
 modity is to be devoted.** Upon complaint of undue prej- 
 udice, in that competitors were granted a lower rate on coke 
 intended for blast-furnace use, damages were awarded by 
 the Commission for an unreasonable rate.*° It is difficult 
 to determine that one theory is reasonable and right for 
 one manufacturer or shipper, and another theory is reason- 
 able and right for another manufactm-er or shipper under 
 substantially similar circumstances and conditions.*' The 
 Conunission has, therefore, condemned the maintenance of 
 dual rates on a commodity, dependent upon the use to 
 which the article is put.*^ And an advance due to dis- 
 continuance of dual rates based upon use is, therefore, 
 justified.*' 
 
 § 707. When commodities are of different character. 
 
 Of course different rates may be given when the com- 
 modities are not quite of the same character. This is 
 
 " Interstate Commerce Commis- ** Virginia-Carolina Chemical Co. 
 
 sion V. Baltimore & O. R. R., 225 v. A. C. L. R. R., 22 I. C. C. 394. 
 
 U. S. 326, 56 L. ed. 1107, 32 Sup. «« Stowe-FuUer Co. v. Pennsyl- 
 
 Ct. 742. vania Co., 12 I. C. C. 215. 
 
 " In re Restricted Rates, 20 I. C. " Douglas & Co. v. C, R. I. & 
 
 C. 426. P. Ry-, 16 I. C. C. 232. 
 
 " Jones Bros. Co. v. M. & W. ** Arkansas Fertilizer Co. v. St. 
 
 R. R. R., 21 I. C. C. 577. L., I. M. & S. Ry., 25 I. C. C. 645. 
 
 " Carter White Lead Co. v. N. & '' Wisconsin Steel Co. v. ' P. & 
 
 W. Ry., 21 I. C. C. 41. L. E. R. R., 27 I. C. C. 152. 
 
 [615] 
 
§ 708 ] Railroad Rate Regulation 
 
 probably the explanation of a series of cases in Kentucky 
 justifying a difference in rate between steam coal to man- 
 ufacturers and domestic coal for dealers. Thus in Common- 
 wealth V. Louisville & Nashville Railroad Company*" the 
 facts shown at the trial were that the electric light com- 
 pany was engaged in the business of manufacturing and 
 selling electricity; that the coal transported to it was a 
 very low grade of coal, commonly known as "slack," 
 and was used by the company for steam purposes; that 
 Wade was a coal dealer in Franklin, and that the particular 
 carload of coal on which this proceeding was based was 
 the highest grade of coal, known' as "lump;"*^ Upon 
 a review of the authorities cited in the note** the court 
 held that "it was allowable and proper for a railroad com- 
 pany to classify freight according to its quaUty or char- 
 acter and marketable value; and discrimination in charges 
 for carrying different classes or kinds is not only univer- 
 sally recognized, but plainly authorized by section 215. 
 And that this settled the question since it was admitted 
 in the pleadings and shown by proof that the respective 
 carloads of coal upon which this action was founded were 
 wholly different both as to quality and marketable value." 
 The Commission has frequently had occasion to apply 
 these principles, holding for instance in one important 
 case not long ago that smithing coal, being of greater 
 value than the ordinary bituminous coal, might properly 
 under the Act be charged a higher rate per ton for the 
 transportation.*' 
 
 § 708. Rates to certain classes of shippers. 
 
 From what has been said it will be plain that it will 
 usually constitute personal discrimination to give special 
 
 6» 112 Ky. 783, 68 S. W. 1103. & N. R. R. v. Com., 108 Ky. 628, 57 
 
 " Much the same facts appeared in S. W. 508; Louisville & N. R. R. 
 
 LouisviUe, E. & St. L. C. R. R. v. v. Com., 108 Ky. 628, 57 S. W. 
 
 Crown Coal Co., 43 111. App. 228. 511. 
 
 <" Louisville & N. R. R. v. Com., " Sligo Iron Store Co. v. Union P. 
 
 105 Ky. 179, 48 S. W. 416; Louisville R. R., 19 I. C. C. 527. 
 
 [616] 
 
Forms of Illegal Discrimination [ § 709 
 
 rates to certain classes of persons upon designated sorts of 
 goods. This complication appeared in one case before 
 the Commission,** where it was shown that imder the 
 Western Classification and tariff there were two west- 
 boimd carload rates from Mississippi river points to 
 Pacific coast terminals on goods termed "Emigrants' 
 Movables" (including "household goods"), one a general 
 class rate and the other designated a "commodity" rate 
 and less than the general rate ; the latter rate was pubhshed 
 as being open to "intending settlers only." But the 
 Commission said: "Unless within the authorized excep- 
 tions to the general rule of the statute, discriminations in 
 charges upon Uke shipments of the same commodities 
 based solely upon the purpose or 'business motive' of the 
 shipper, are imlawful whether effected directly or indirectly 
 by methods of classification." In a recent case in the 
 Supreme Court it has held that differences with respect 
 to competition between coal intended for railway con- 
 sumption and other coal, and with respect to the manner 
 of delivery, depending upon a difference in the facilities 
 possessed by the railroads and other consignees, do not 
 make the interstate traffic therein dissimilar in circum- 
 stances and conditions, within the meaning of the Act, so 
 as to justify the giving of a lower rate for the transporta- 
 tion of railway fuel coal than is given to shipper of other 
 coal between the same points.*' 
 
 § 709. Special classes of passengers. 
 
 Granting lower rates with the customary accommoda- 
 tions to persons representing that they were traveling for 
 the purpose of buying land or settling near the railroad 
 
 «< Duncan v. A., T. & S. F. Ry., sion v. B. & O., 225 U. S. 326, 56 
 
 6 I. C. C. Rep. 85. L. ed. 1107, 32 Sup. Ct. 742. 
 
 Denial of free transportation to a Carriers make low rates on em- 
 caretaker of chickens, not found un- igrant movables to induce settlement 
 reasonable or unduly discriminatory, along their lines. R. R. Com'rs of 
 Ream v. S. P. Co., 25 I. C. C. 107. Montana v. N. P. Ry. Co., 26 I. C. 
 
 " Interstate Commerce Commis- C. 482. 
 
 [617] 
 
§ 709 ] Railroad Rate Regulation 
 
 line has been held unlawful discrimination;*^ but special 
 rates to emigrants, riding exclusively upon "emigrant 
 trains" with poor accommodations have been permitted.*'' 
 This distinction is well grounded upon the difference in the 
 cost of service to the two classes. Classifications based 
 upon the form of contract under which passengers are 
 carried have been sustained, as in the case of allowing 
 to a person riding upon a commutation ticket a lower 
 rate than that allowed to one riding upon a mileage ticket; 
 but it is not justifiable to sell such tickets to commercial 
 travelers at a lower rate.** It has been held in England 
 that a railroad may give an especially low rate for passen- 
 ger service to shippers of freight in large quantities.*' 
 But in the United States this would undoubtedly be 
 considered illegal discrimination, and quite within the 
 principle as the giving of reduced rates to large shippers, 
 which has been above considered illegal.™ "In the trans- 
 portation of passengers carriers are performing a public 
 duty under franchises granted by the State, and are 
 subject to the rules of law which require absolute im- 
 partiality to all, when the circumstances and conditions are 
 substantially similar. The fact that their own interests 
 may be promoted to some extent by swerving from this 
 rule cannot be regarded as sufficient to warrant a depart- 
 ure from the obvious language of the Statute." ^^ 
 
 «' Smith V. Northern P. R. R., 1 *' Inverness Chamber of Commerce 
 
 Int. Com. Rep. 611. v. Highland Ry., 11 R. & T. Cas. 218. 
 
 " Savery & Co. v. N. Y. C. & " Colorado Free Pass Investiga- 
 
 H. R. R., 2 Int. Com. Rep. 210. tion, 26 I. C. C. 391. 
 
 " Associated Wholesale Grocers v. " Smith v. No. Pacific R. R., 1 
 
 Mo. Pac. Ry., 1 1. C. C. Rep. 393. Int. Com. Rep. 611. 
 
 [618] 
 
CHAPTER XV 
 
 INSTANCES OP JUSTIFIABLE DIFFERENCES 
 
 § 710. Provisions of the Act. 
 711. Modification of the rule forbidding different rates. 
 
 Topic A. Reasonable Differences 
 
 § 712. What preference is undue and unreasonable, 
 
 713. Differences in transportation cost. 
 
 714. Certain economies in operation. 
 
 715. Like circumstances and conditions. 
 
 716. What circumstances can be considered. 
 
 717. Differences in the conditions of service. 
 
 718. Proportionate differences may be made. 
 
 719. Rates should not be disproportionate. 
 
 Topic B. Shipment in more Convenient Units 
 
 § 720. Differences in the character of the service. 
 
 721. Shipment in carloads. 
 
 722. Advantages of carload traffic. 
 
 723. Permission to mix carloads. 
 
 724. Lower rates for shipments in bulk. 
 
 725. Shipments in trainloads problematical. 
 
 726. Contracts for regular shipments. 
 
 727. Units in passenger service. 
 
 728. The basis of the differential. 
 
 729. Comparison of bulk and package rates. 
 
 Topic C. Facilities Furnished by Shippers 
 
 § 730. Terminal facilities furnished by shippers. 
 
 731. Undue prejudice in granting allowances. 
 
 732. Unjustifiable differences in rates. 
 
 733. Concessions to shippers in bulk considered. 
 
 734. Railroad without tank cars. 
 
 735. Transportation expenses paid by shipper. 
 
 736. Rental paid on shipper's cars. 
 
 737. Allowance for cars or facilities furnished. 
 
 Topic D. Restriction to Scheduled Allowance 
 
 [619] 
 
 5 738. Extent of statutory restrictions. 
 739. Both rates must be open to all. 
 
§§ 710, 711 ] Railroad Rate Regulation 
 
 § 740. Lighterage allowance. 
 
 741. Elevation charges. 
 
 742. Transit privileges. 
 
 743. Terminal allowances. 
 
 744. Allowances for facilities closely scrutinized. 
 
 745. Allowances for facilities still permissible. 
 
 § 710. Provisions of the Act. 
 
 The provisions of the Act just considered, such as 
 sections 2 and 3, forbidding disproportionate treatment 
 where the circumstances are similar, by inference permit 
 proportionate differences where the conditions are differ- 
 ent. It should be noted, moreover, that since 1906 only 
 such allowances as are published are permitted, section 6 
 providing that the requirements as to scheduling with 
 the Commission shall apply to all traffic and transporta- 
 tion, facilities and arrangements in relation to any traffic 
 affected by the provisions of the Act. As the Act now 
 reads, if the owner of property transported in interstate 
 commerce directly or indirectly renders any service con- 
 nected with such transportation, or furnishes any instru- 
 mentality used therein, the charge and allowance therefor 
 shall be no more than is just and reasonable, and the 
 Commission may, after hearing on a complaint or on its 
 own initiative, determine what is a reasonable charge as 
 the maximum to be paid by the carrier or earners for the 
 services so rendered or for the use of the instrumentality 
 so furnished, and fix the same by appropriate order. 
 What differences are approved in passing upon rates has 
 already been discussed in Chapters XI and XII. 
 
 § 711. Modification of the rule forbidding different rates. 
 
 When the services asked of the carrier are essentially 
 dissimilar the rule against discrimination is apparently 
 much modified. It is rightly held that different rates may 
 be made when the cost of service is different; for to enforce 
 equal rates under those circumstances, as has been said, 
 would in reality be discriminatory under ordinary condi- 
 [ 620 ] 
 
Instances op Justifiable Differences [ § 712 
 
 tions.'^ "It must not be inferred that a common carrier, 
 in adjusting his price, cannot regard the peculiar circum- 
 stances of the particular transportation. Many con- 
 siderations may properly enter into the agreement for 
 carriage or the estabUshment of rates, such as the quantity 
 carried, its nature, risks, the expense of carriage at differ- 
 ent periods of time, and the Uke; but he has no right to 
 give an exclusive advantage or preference, in that re- 
 spect, to some over others, for carriage, in the course of his 
 business. For a like service, the public are entitled to a 
 like price. There may be isolated exceptions to this rule, 
 where the interest of the immediate parties is alone in- 
 volved, and not the rest of the public, but the rule must 
 be applied whenever the service of the carrier is sought or 
 agreed for in the range of business or trade." '^ 
 
 Topic A. Reasonable Differences 
 
 § 712. What preference is undue and unreasonable. 
 
 The words of the Act necessarily involve the idea or 
 element of comparison of one service or traffic with an- 
 other similarly situated and circumstanced, and require 
 that, to be undue and unreasonable, the preference or 
 prejudice must relate and have reference to competing 
 parties, producing between them unfairness and an unjust 
 inequality in the rates charged them, respectively, for 
 contemporaneous service under substantially the same 
 circumstances and conditions.''^ In determining the ques- 
 tion whether rates give an undue preference or impose an 
 undue prejudice or disadvantage, consideration must be 
 had to the relation which the persons or traffic affected 
 bear to each other and to the carrier. When and so long 
 
 " The quotation is from Messenger U. S. 263, 36 L. ed. 699, 12 Sup. Ct. 
 
 V. Pennsylvania R. R., 7 Vroom (36 844. 
 
 N. J. L.), 407, 13 Am. Rep. 457, 8 "This is virtually a quotation 
 
 Vroom (37 N. J. L.), 531, 18 Am. Rep. from Interstate Commerce Commis- 
 
 754. sion v. Baltimore & O. R. R., 43 
 
 " See Interstate Commerce Com- Fed. 37. 
 mission v. Baltimore & O. R. R., 145 
 
 [621] 
 
§ 713 ] Railroad Rate Regulation 
 
 as their relations are similar or "substantially" so, the 
 carrier is prohibited from dealing differently with them in 
 the matter of charges for a like and contemporaneous 
 service/* Undue preference involves comparison between 
 the treatment given to shippers, and upon comparison a 
 finding that one is unfairly treated. In short, any unrea- 
 sonable inequality of treatment of passengers or shippers 
 is a violation of the law.'' So it is an unjust discrimina- 
 tion to remove a colored passenger holding a first class 
 ticket from a first class car, to a second class car, less 
 clean and comfortable; but separation of white and colored 
 passengers paying the same fare is not unlawful, if cars 
 and accommodations equal in all respects are furnished to 
 both and the same care and protection of passengers 
 observed." So where a carrier refused to permit a side- 
 track connection with its road to one coal mine, while 
 permitting it to another under similar circumstances, it 
 was held to be a violation of the Act. There must be such 
 similarity of situation and feasibiUty of connection as will 
 permit practical adherence to reasonable operating condi- 
 tions by the carrier; but where physical conditions per- 
 taining to the proposed connection are at least as favorable 
 to the carrier as those pertaining to the other connections 
 the applicant is entitled to his connection.'* 
 
 § 713. Differences in transportation cost. 
 
 There is no illegal discrimination unless the services 
 compared are substantially the same. Thus a reason- 
 able classification of commodities or passengers accord- 
 ing to the nature of the goods or the accommodations 
 
 " See Interstate Commerce Com- " Heard v, Georgia R. R., 1 Int. 
 
 mission v. Chicago G. W. Ry., 141 Com. Rep. 719, 1 I. C. C. 428; Coun- 
 
 Fed. 1003. c'll v. Western & A. R. R., 1 Int. 
 
 " Daniels v. Chicago, R. I. & Com. Rep. 638, 1 I. C. C. 339; Heard 
 
 P. Ry., 6 I. C. C. Rep. 458; Page v. v. Georgia R. R., 2 Int. Com. Rep. 
 
 Delaware, L. & W. R. R., 6 I. C. C. 508, 3 I. C. C. 111. 
 
 Rep. 548; Cafitle v. Baltimore & " Red Rock Fuel Co. v. Baltimore 
 
 O. R. R., 8 I. C. C. Rep. 333. & O. R. R., 11 1. C. C. Rep. 438. 
 [622] 
 
Instances of Justifiable Differences [ § 714 
 
 furnished does not result in discrimination." "And for a 
 like reason an inferior class of freight may be carried at 
 a less rate than first-class merchandise of greater value 
 and requiring more labor, care, and responsibility in the 
 handling. It has been held that 20 separate parcels done 
 up in one package, and consigned to the same person 
 may be carried at a less rate per parcel than 20 parcels 
 of the same character consigned to as many different 
 persons at the same destination, because it is supposed 
 that it costs less to receive and deliver one package con- 
 taining 20 parcels to one man, than it does to receive 
 and deliver 20 different parcels to as many different con- 
 signees. Such are some of the numerous illustrations of 
 the rule that might be given." *" 
 
 § 714. Certain economies in operation. 
 
 It has seemed an unjust discrimination, contrary to the 
 spirit of the Act, to make allowances for services rendered 
 by the locomotives of the competitors in hauling cars over 
 private • tracks." Likewise a lower rate to large shipper, 
 providing elaborate facilities for prompt unloading, than ac- 
 corded a small competitor, unable to provide such facilities, 
 would constitute unjust discrimination.*^ There is no illegal 
 discrimination unless the services compared are substan- 
 tially the same. Thus a reasonable classification of com- 
 modities or passengers according to the nature of the 
 goods or the accommodations furnished does not result in 
 discrimination.'^ Nor from a transportation view point 
 can the carriage of products, of entirely different kinds 
 
 "For this general principle see '^ jure Restricted Rates, 201. C.C. 
 
 among other cases: Brewer v. Central R. 426. 
 
 of Ga. Ry. Co., 84 Fed. 258; Wagner ^^ Lavery v. New York C. & 
 
 V. City of Rocli Island, 146 111. 139; H. R. R. R., 2 Int. Com. Rep. 210, 
 
 Louisville & N. Ry. Co. v. Com., 108 2 I. C. C. 338; New York Board of 
 
 Ky. 628, 57 S. W. 508; Paine v. Penn- Trade and Transp. v. Pennsylvania 
 
 sylvania Ry., 7 Kulp, 187. R. R., 3 Int. Com. Rep. 417, 4 I. C. C. 
 
 ""The quotation is from Hays v. 447; Brownell v. Columbus & C. M. 
 
 Pennsylvania R. R. Co., 12 Fed. 309. R. R., 4 Int. Com. Rep. 285, 5 I. C. 
 
 »' Tap Line Cases, 23 I. C. C. 277. C. 638. 
 
 [623] 
 
§ 716 ] Railroad Rate Regulation 
 
 be compared.*'' Charges for terminal or other incidental 
 services of entirely different kinds can not be compared, 
 such as storage charges at warehouses and in stations,** 
 delivery of goods on spur tracks and by drays,^ and car- 
 riage through cities where bus transfer is and is not fur- 
 nished.*'' But a difference in charge for carrying oil in 
 tank cars and in barrels, where carriage in tank cars is 
 not open to shippers impartially is questionable.^ 
 
 § 715. Like circumstances and conditions. 
 
 The courts have frequently had occasion to define the 
 phrase "like circumstances and conditions." Under sec- 
 tion 2 of the Act forbidding a discrimiaation in rates 
 between shippers for a haul under like circumstances and 
 conditions, it has been held that the circmnstances and 
 conditions meant are those which arise within the field of 
 haulage, and not those which exist outside. *' In regard to 
 State statute of like tenor, it has been said that, so far as 
 it forbids unjust discriminations, such language is merely 
 declaratory of the common law; and different rates may 
 be made where the circumstances are different.'" And in 
 another State a statute penalizing discriminations in 
 freight rates was construed to be applicable only to 
 charges made against shippers for an equal quantity of 
 same kind of freight going in same direction." In still 
 another jurisdiction language similar to that in the Act was 
 said to be merely declaratory of the common law not 
 
 '* Rice V. Cincinnati, W. & B. " Independent Refiners' Ass'n v. 
 
 R. R., 3 Int. Com. Rep. 841, 5 I. C. Western N. Y. & P. R. R., 4 Int. 
 
 C. 193; Pennsylvania Millers' State Com. Rep. 162, 5 I. C. C. 415. 
 
 Ass'n V. Philadelphia & R. R. R., 8 ** Penn. R. R. Co. v. International 
 
 I. C. C. Rep. 531. Coal Mining Co., 173 Fed. 1. 
 
 8' Blackman v. Southern Ry., 10 «> Western U. T. Co. v. Call Pub. 
 
 I. C. C. Rep. 352. Co., 44 Neb. 326, 62 N. W. 506, 48 
 
 «« Hezel Milling Co. v. St. Louis, Am. St. R. 729. 
 
 A. & T. H. R. R., 3 Int. Com. Rep. »' Hines & Battle v. Wilmington & 
 
 701, 5 I. C. C. 57. C. Ry., 95 N, C. 434. 
 
 "Behrend v. Washington S. Ry., 
 9 I. C. C. Rep. 637. 
 [624] 
 
Instances of Justifiable Differences [ § 716 
 
 prohibiting all discrimioation but only such as are un- 
 reasonably unequal.'^ It would seem to be clear, therefore, 
 on authority that in order to be obnoxious to the Act on 
 the ground of discrimination, the services of the carrier 
 with respect to which discrimination is alleged must be 
 performed at practically the same time and place. If the 
 two services are performed at substantially different times 
 they cannot be compared. Thus a carrier is not compelled 
 to give special excursion rates to one political convention 
 because it has given them to a similar convention of 
 another political party on another date.'* The same 
 thing is true if the services compared are performed in 
 different parts of the country; '* or in different directions.'^ 
 
 § 716. What circumstances can be considered. 
 
 A discrimination against a shipper is not justified be- 
 cause he has refused in the past to pay excessive charges.*' 
 Or because the goods are eventually destined to a point 
 beyond the original destiaation," or because they came 
 from a certain place.'* So the magnitude of a shipper's 
 enterprise, the number of persons for whom it produces 
 employment and support, the developing results of its 
 business upon the natural resources of the State, the im- 
 practicability of moving its plant to other localities, and 
 the fact that it produces material largely used on rail- 
 roads for construction or repair, do not entitle it to differ- 
 ent consideration in respect to rates than individuals and 
 small concerns should receive." Nor will the private in- 
 
 " State V. Central Vt. Ry., 81 Vt. York, N. H. & H. R. R., 10 I. C. C. 
 
 463, 71 Atl. 494. Rep. 221. 
 
 " Cator V. Southern P. Co., 4 Int. * Phelps v. Texas & P. Ry., 4 Int. 
 
 Com. Rep. 397, 6 I. C. C. 113. Com. Rep. 363, 6 I. C. C. 36. 
 
 »« Allen V. Oregon Ry. & Nav. Co., *' Northwestern I. G. & S. S. 
 
 98 Fed. 16; Central Yellow Pine Ass'n v. Chicago & N. W. Ry., 2 
 
 Assoc. V. Illinois Cent. R. R., 10 I. Int. Com. Rep. 431, 2 I. C. C. 604. 
 
 C. C. Rep. 505; Parks v. Cincinnati ^ Hope Cotton Oil Co. v. Texas & 
 
 & M. V. R. R., 10 I. C. C. Rep. 47. P. Ry., 10 I. C. C. Rep. 696. 
 
 « McLoon V. Boston & M. R. R., " Colorado Fuel & I. Co. v. 
 
 9 I. C. C. Rep. 642; Hewins v. New Southern P. Co., 6 I. C. C. Rep.-488. 
 
 40 [625] 
 
§ 717 ] Railroad Rate Regulation 
 
 terest of the carrier justify discrimination; thus the high 
 relative classification of railroad ties, under the desire to 
 keep them upon its own line and keep the price low for 
 its own use, is unreasonable discrimination.^ So an as- 
 surance by a carrier, that if one will locate in business on 
 its line his property shall be taken for transportation as 
 belonging to a specified class, caimot bind the carrier so as 
 to compel a classification accordingly; a right to special 
 rates cannot be made out in this way.^ A higher charge 
 when coal is loaded from wagon instead of from tipple, 
 when the difference is not justified by any difference in 
 cost to the carrier, is unlawful.^ On the other hand, cir- 
 cumstances, such as the accounting system of the United 
 States, which really cause trouble or expense to the carrier 
 may be considered.* Other differences will render the 
 services unUke; so where a passenger fails to buy a ticket, 
 compeUing him to pay excess fare is not an imlawful dis- 
 crimination against him.^ 
 
 § 717. Differences in the conditions of service. 
 
 Although there will be foimd to be some difference of 
 opinion as to the matters discussed in the sections im- 
 mediately preceding, where the services performed are 
 substantially identical, there is no difference of opinion as 
 to the propriety of differences in rates where the services 
 performed are essentially dissimilar.* "We believe the 
 true rule to be that rates must not only be reasonable in 
 themselves, but must be relatively reasonable; that is, 
 that a person or corporation engaged in pubUc business, 
 
 ' Resmolds v. Western N. Y. & ' United States v. Chicago & 
 
 P. R. R., 1 Int. Com. Rep. 685, 1 N. W. Ry., 127 Fed. 785, 62 C. C. A. 
 
 I. C. C. 393. 465. 
 
 2 Hui-lburt v. Lake Shore & M. S. ' Sidman v. Richmond & D. R. R., 
 
 R. R., 2 Int. Com. Rep. 81, 2 1. C. C. 2 Int. Com. Rep. 766, 3 I. C. C. 
 
 122. 512. 
 
 ' Glade Coal Co. v. Baltimore & * The quotation which follows is 
 
 0. R. R., 10 I. C. C. Rep. 226; from Irvine, C, in Western U. T. 
 Thompson v. Pennsylvania R. R., 10 Co. v. Call Pub. Co., 44 Neb. 326, 62 
 
 1. C. C. Rep. 640. N. W. 506. 
 
 [626] 
 
Instances of Justifiable Diffeebnces [ § 718 
 
 and obligated to render its services to all persons having 
 occasion to avail themselves thereof, is bound in fixing 
 its rates to observe two rules: First, its rates must be 
 reasonable; and, second, it must not, without a just and 
 reasonable ground for discrimination, render to one patron 
 services at a less rate than it renders to another, where 
 such discrimination operates to the disadvantage of that 
 other J But it is not unjust discrimination — it is not 
 contrary to the common law, and it is not contrary to our 
 statute — to make a difference in rates where the expense 
 or difficulty of performing the services renders such dis- 
 crimination fair and reasonable." * 
 
 § 718. Proportionate differences may be made. 
 
 It follows from what has been said that differences may 
 be made proportionate to the cost of service without the 
 making of any illegal discrimination; indeed, in such cases 
 it would be unreasonable not to make such difi'erences 
 upon that basis. In the leading case upon this point ' the 
 general principle is thus stated: "In determining the duty 
 of a common carrier, we must be reasonable and just. 
 The carrier should be permitted to charge reasonable com- 
 pensation for the goods transported. He should not, how- 
 ever, be permitted to unreasonably or unjustly discriminate 
 iagainst other individuals, to the injury of their business, 
 where the conditions are equal. So far as is reasonable, 
 all should be treated alike; but we are aware that absolute 
 equaUty cannot in all cases be required, for circumstances 
 and conditions may make it impossible or imjust to the 
 carrier. The carrier may be able to carry freight over a 
 
 ' Citing Hays v. Pennsylvania Co., Ct. 844; Root v. Railroad Co., 114 
 
 12 Fed. 309; Messenger v. Railroad N. Y. 300, 21 N. E. 403, 4 L. R. A. 
 
 Co., 36 N. J. Law, 407, 13 Am. Rep. 33; Savitz v. Railway Co., 49 111. 
 
 457; McDuffee v. Railroad Co., 52 App. 315. 
 
 N. H. 430, 13 Am. Rep. 72. » Root v. Long I. R. R., 114 N. Y. 
 
 'Citing Interstate Commerce Com- 300, 21 N. E. 403, 4 L. R. A. 33, 
 
 mission v. Baltimore & 0. R. Co., B. & W. 377. 
 145 U. S. 263, 36 L. ed. 699, 12 Sup. 
 
 [627] 
 
§ 719 ] Railroad Rate Regulation 
 
 long distance at a less sum than he could for a short dis- 
 tance. He may be able to carry a large quantity at a less 
 rate than he could a smaller quantity. The facilities for 
 loading and unloading may be different in different places, 
 and the expenses may be greater in some places than in 
 others. Numerous circimistances may intervene which 
 bear upon the cost and expenses of transportation, and it 
 is but just to the carrier that he be permitted to take these 
 circumstances into consideration in determining the rate 
 or amount of his compensation." " 
 
 § 719. Rates should not be disproportionate. 
 
 It has already been explained at much length " that the 
 railway company may classify freights and passengers and 
 charge different rates for the different classes, if there are 
 reasonable groimds for such discrimination in the differ- 
 ence of the cost of service, risk of carriage or in the ac- 
 commodations furnished, or the like; but the rates must be 
 the same for all persons and goods of the same class or 
 else there will be personal discrimination, plainly enough.^* 
 But it will also constitute personal discrimination if differ- 
 ent classification is given to like goods without justifica- 
 tion. As a general rule a railway company is justified in 
 carrying goods for one person at a less rate than that at 
 which it carries goods for another, only where there are 
 circumstances which naake the cost of carrying the former 
 less than the cost of carrying the latter. And, moreover, 
 to be exact the difference in the rates between the different 
 
 i» It is universally admitted that C. R. & N. Ry. v. N. W. Fuel Co., 31 
 
 real differences in the cost of serving Fed. 652. 
 
 justify differences in rates; leading " See Cincinnati, H. & D. R. R. 
 
 cases to this effect are: Interstate v.InterstatetJoBCmerce GoB^ipHssion, 
 
 Com. Com. v. B. & O. R. R., 145 306,.U..S. 142, 51X.,ed. 995„27;Sup. 
 
 U. S. 263, 36 L. ed. 699; Western Ct. 648. 
 
 U. T. Co. V. Call Pub. Co., 181 U. S. '^ See Interstate Commerce Com- 
 
 92, 45 L. ed. 765, 21 Sup. Ct. 561; mission v. Chicago Gt. Western Ry., 
 
 318H Tons of Coal, 14 Blatch. 453, 209 U. S. 108, 52 L. ed. 705, 28 Sup. 
 
 Fed. Cas. 14,010, Hays v. Pennsyl- Ct. 815. 
 vania Co., 12 Fed. 309; Burlington, 
 
 [028] 
 
Instances of Justifiable Differences [ §§ 720, 721 
 
 classifications of like articles must be proportionate to this 
 difference in cost to the carrier of performing the service. 
 
 Topic B. Shipment in more Convenient Units 
 
 § 720. Differences in the character of the service. 
 
 That there are differences in the cost of service by reason 
 of ways in which traffic is handled must be recognized; 
 and in so far as these economies in conducting the trans- 
 portation are real a proportionate reduction may be made 
 to the shipper in question. The various phases of this 
 problem are well set forth in the opinion of Judge Baxter, 
 elsewhere discussed more fully. ^' "For the same reason 
 passengers may be divided into different classes, and the 
 price regulated in accordance with the accommodations 
 furnished to each, because it costs less to carry an emi- 
 grant, with the acconmiodations furnished to that class, 
 than it does to carry an occupant of a palace car. And for 
 a Uke reason an inferior class of freight may be carried at a 
 less rate than first-class merchandise of greater value and 
 requiring more labor, care, and responsibility in the han- 
 dlmg." " 
 
 § 721. Shipment in carloads. 
 
 The most obvious application of this rule is the relatively 
 lower rates almost universally quoted for carload lots as 
 compared with less than carload. Substantial reasons 
 exist for making the rate lower per barrel in carload lots 
 than in less than carload quantities. The cost of service 
 is very considerably less in the case of shipments in car- 
 
 "Hays V. Pennsylvania Co., 12 27 L. R. A. 626; Cook v. Chicago, 
 
 Fed. 309, B. & W. 368. R. I. & Pac. Ry. Co., 81 Iowa, 551, 
 
 " More convenient units are rec- 46 N. W. 749, 25 Am. St. Rep. 512, 
 
 ognized reasons for making lower 9 L. R. A. 764; Root v. Long Island 
 
 rates; see the language in Interstate R. R., 114 N. Y. 300, 21 N. E. 403, 11 
 
 Commerce Commission v. Baltimore Am. St. Rep. 643, 4 L. R. A. 331, 
 
 & Ohio R. R., 145 U. S. 263, 36 L. ed. B. & W. 377; Scofield v. L. S. & M. S. 
 
 699, 12 Sup. Ct. 844; Savitz v. Ohio R. R., 43 Ohio St. 571, 3 N. E. 907, 
 
 & M. Ry., 150 lU. 208, 37 N. E. 235, 54 Am. Rep. 846. 
 
 [629] 
 
§ 722 ] Raileoad Rate Regulation 
 
 load lots than in less than carload quantities. The ship- 
 ment by the carload goes direct to destination. It is 
 loaded by the shipper and is iinloaded by the consignee. 
 The freight in it does not stop at the way stations to be 
 handled in parcels to different consignees along the line. 
 Only one bill of lading is made. It requires but one entry 
 upon the waybill. The time occupied in transporting it to 
 destination is far less than in the case of a shipment in 
 less than carload quantities. There is but one collection 
 of charges for freight. ^^ Where the shipment is made in 
 less than carload quantities a separate receipt or bill of 
 lading has to be given to every shipper for his parcel. A 
 separate entry of every item has to be made on the way- 
 bill. The shipment is by a local freight train which stops 
 at every station for which there is a package of freight. 
 The freight has to be taken out in parcels and delivered 
 at each of these stations. The freight is loaded and un- 
 loaded by the railroad company. There are as many col- 
 lections of charges for freight as there are different parcels. 
 The time occupied in transporting it is usually from two to 
 three times as long as in the case of a carload shipment — 
 according to distance. It occupies a whole car, and for 
 the vacant space in that car the company is receiving no 
 compensation." 
 
 § 722. Advantages of carload trafSc. 
 The economies of handUng freight in carload lots can 
 
 '* It has been doubted whether at determining the property of ratings 
 
 common law the carrier need make established by the carrier. Cin- 
 
 carload rates unless it chooses. Rail- cinnati H. & D. R. R. v. Interstate 
 
 road Commissioners v. Weld, 96 Commerce Commission, 206 U. S. 
 
 Tex. 394, 73 S. W. 529. 142, 51 L. ed. 995, 27 Sup. Ct. 648. 
 
 If, however, carload rates are The Commission may now, since 
 
 granted, all shippers may demand the recent amendments to the Act, 
 
 the same terms. New York T. & M. estabhsh carload rates when it 
 
 R. R. V. Gallagher, 79 Tex. 685, 15 thinks traffic conditions require them 
 
 S. W. 694. and fix the differential between such 
 
 '^ The Commission has power to C. L. rates and L. C. L. Atchison, 
 
 pass upon the relation between car- T. & S. F. Ry. v. United States, 232 
 
 load and less-than-carload rates in U. S. 199, 34 Sup. Ct. 291. 
 [630] 
 
Instances of Justifiable Differences [ § 723 
 
 hardly be overestimated. ^^ It has been held not unreason- 
 able to make the rate per 100 pounds upon refined oil in 
 less than carload lots 100 per cent greater than the rate 
 upon carload lots. This situation was discussed in a 
 broad way by the Commission in an early case.^^ "The 
 greater part of the supplies consumed upon the Pacific 
 Coast originate twenty-five hundred miles from the point 
 of consumption, and these supplies should be transported 
 that twenty-five hundred miles in the cheapest manner. 
 Waste is always expensive; if the railways are required to 
 carry this merchandise in an extravagant maimer that 
 extravagance is finally borne by the pubUc. We have seen 
 that the actual cost of handling this trafiic in less than 
 carloads is 50 per cent greater than the cost of handling 
 carloads. It seems probable, therefore, that the cheapest 
 way in which these supphes can be taken across the con- 
 tinent and distributed to the consumer is by transporting 
 them in soUd carloads from the factory to the warehouse 
 upon the Pacific Coast, and thence distributing to the 
 retailer in less than carloads, although the effect of this 
 may be somewhat diminished by the back haul from the 
 wholesaler to the interior point which is not performed to 
 the same extent where goods are sent across the continent 
 in less than carload shipments directly to the store of the 
 retailer. It would in our opinion be imfortimate from an 
 economic standpoint to estabUsh a condition which would 
 require distribution entirely or mainly in less than car- 
 load lots from the middle west." 
 
 § 723. Permission to mix carloads. 
 
 Upon the principles just discussed it would seem to be 
 permissible for the carrier to allow the shipper to send for- 
 ward a mixed carload of various products since the cost 
 of handhng a mixed carload from one consignor to one 
 consignee is not materially different from the cost of 
 
 " Scofield V. Lake Shore & M. '* Business Men's L. v. Atchison, 
 
 S. Ry., 2 Int. Com. Rep. 67. T. & S. F. Ry., 9 1. C. C. 318. 
 
 [631] 
 
§ 724 ] Railroad Rate Regulation 
 
 handling a carload of one commodity. But the subject 
 has its difficulties, and the carrier is not obliged to grant 
 this privilege. In pointing this out the Commission said; '* 
 "With regard to the question of allowing the same rate 
 on mixed carloads which is given to carloads of a single 
 product, it may be remarked that it is almost inextric- 
 ably involved in the question of the rate. A rule which 
 might work well when the load was composed of articles 
 bearing the same rate would be very difficult to formulate 
 where the different articles took differing rates. The ques- 
 tions, which rates should govern, whether the highest or 
 lowest, whether the proportion of different articles should 
 influence the carload rate, whether the mixed rate should 
 follow the highest or lowest class rate, — would all be in- 
 volved, and it would probably be foimd difficult to formu- 
 late an equitable rule which should fix the rate upon such 
 a load." 2» 
 
 § 724. Lower rates for shipments in bulk. 
 
 That there are often certain advantages to the carrier 
 in shipments in bulk in car lots over shipments in pack- 
 ages in car lots cannot be denied.^* It is upon this basis 
 that it is cheaper to handle the traffic that the railroads 
 have felt justified in giving a lower rate per ton-mile to 
 those who ship oil in bulk in tank cars in comparison 
 with those who ship oil in barrels in car lots. It is urged 
 in behalf of the right of the railroads to make such dif- 
 ferences in the rates that the different circumstances and 
 conditions about these two modes of carrying oil fully 
 justify these differences in the rates, viz.: the carrier 
 furnishes the car for transporting the barrel oil, while the 
 shipper usually supplies car and tank for carriage of tank 
 oil, and that at a less charge for mileage than actual cost 
 
 " Schumacher Milling Co. v. ^^ See Pennsylvania Refining Co. 
 
 Chicago, R. I. & P. R. R., 6 I. C. C. v. Western N. Y. & P. R. R., 208 
 
 Rep. 61. U. S. 208, 52 L. ed. 456, 28 Sup. Ct. 
 
 ^»See Roth v. T. & P. Ry., 9 268. 
 I. C. C. 602. 
 
 [632] 
 
Instances of Justifiable Differences [ § 725 
 
 of maintenance of the car; injury to the cars used for 
 barrel oil unfitting them for general use; larger return- 
 empty haul on box cars used for barrel oil than on tank 
 cars; greater risk of such goods in transit and in depot, 
 as well as greater danger to other freights in same train 
 and in same depot in the case of barrel oil over that of 
 tank oil, greater cost of , service in loading and imloading 
 barrel oil to and from the cars by the carrier, when tank 
 oil is invariably loaded and unloaded by the shipper; in- 
 ability of carrier to secure insurance on cars used for trans- 
 porting barreled oil, while shipper of tank oil furnishes the 
 car and assumes all risks. ^^ Such differences in the cost 
 of the service should, it would seem, justify a carrier in 
 making reasonable differences in its rates. 
 
 § 726. Shipments in trainloads problematical. 
 
 It is urged with considerable force that a railroad is 
 justified under the rules that are now under discussion in 
 giving a lower rate for a trainload consigned from one 
 shipping point to one point of deUvery, since it cannot 
 be denied that there is at least a slight difference in the 
 cost of handling the traffic in trainloads. But such con- 
 cessions are dangerous, as it would tend to concentrate 
 the business of the country into very few hands if a lower 
 rate could be given to the great operator who could ship in 
 train lots. At all events the Interstate Commerce Com- 
 mission set itself against such special rates for train loads 
 in Paine Bros. & Co. v. Lehigh Valley Railroad.^' "We 
 perceive no sufiicient reason for different rates on carload 
 than on cargo or trainload shipments, whether the grain 
 is carried for export or for domestic use. The principle 
 involved in such a distinction violates the rule of equaUty 
 and tends to defeat its just and wholesome purpose. That 
 purpose is not fully accomplished if one scale of charges is 
 
 " See Scofield v. Lake S. & M. S. ^' 7 I. C. C. Rep. 218. 
 
 Ry., 2 Int. Com. Rep. 67, 2 I. C, C. 
 Rep. 90. 
 
 [633] 
 
§ 726 ] Railroad Rate Regulation 
 
 applied to cargo shipments and a higher rate is imposed 
 for single carloads, even though all cargo shippers pay 
 the same and all carload shippers are charged ahke." "^ 
 However, in several cases the bearing upon rates of train- 
 load movements is discussed. ^^ In estabUshing ratings 
 it is considered whether the hauUng of certain goods in 
 trainloads is the exception or the rule.^^ It has distinct 
 weight in the rating of the commodity if the traffic moves 
 in trainloads. ^^ That traffic moves in trainload lots from 
 one point, and in smaller lots from another point, was con- 
 sidered by the Commission in determining the relative 
 reasonableness of rates. ^* But in certain other cases where 
 the point was urged, the trainloading was not considered.^' 
 And as to the matter of special rates to shippers of car- 
 load quantities, the Commission is as clear to-day as ever 
 that whatever may be cost of service, giving greater con- 
 sideration to trainload than to carload traffic would be to 
 prejudice of small shipper and the public.'" 
 
 § 726. Contracts for regular shipments. 
 
 In some English cases concessions are permitted to 
 shippers who agree to make regular shipments. The 
 leading case for this is Nicholson v. Great Western Rail- 
 way Company," where the court refused to restrain the 
 company from giving lower rates to the Ruabon Coal 
 Company than were given to the complainant in the ship- 
 ment of coal, it appearing that there was a contract be- 
 tween the railroad company and the Ruabon Coal Com- 
 pany, whereby the coal company undertook to ship, for a 
 period of 10 years, as much coal for a distance of at least 
 
 " Carstens Packing Co. v. O. S. ^ Wharton Steel Co. v. D., L. & 
 
 L. R. R., 17 I. C. C. 324, accwd. W. R. R., 25 I. C. C. 303. 
 
 " Taylor v. N. & W. Ry., 25 I. C. " Richards v. Atlantic C. L. Ry., 
 
 e. 613. 23 I. C. C. 239. 
 
 " Traffic Bureau of Nashville v. '" Anaconda Copper Mining Co. 
 
 L. & N. R. R., 28 I. C. C. 533. v. C. & E, R. R., 19 I. C. C. 
 
 " R. R. Com'rs of Fla. v. S. Exp. 592. 
 
 Co., 28 I. C. C. 634. " 5 C. B. (N. S.) 366. 
 
 [634] 
 
Instances of Justifiable Dipfebbncbs [ § 727 
 
 100 miles over defendant's road as would produce an 
 annual gross revenue of £40,000 to the railroad company, 
 in fully loaded trains, at the rate of seven trains per week. 
 But this case is much limited in later cases. Thus an 
 agreement with certain quarry owners to carry slate for a 
 fixed number of years at a less rate than charged for the 
 same service to complainant quarry owners, who refused 
 to bind themselves by such an agreement, held an imdue 
 preference.'- And a difference in rates on an agreement for 
 a period of thirty years and another agreement for four- 
 teen years for a similar service is an undue preference.'* 
 
 § 727. Units in passenger service. 
 
 It has already been indicated that the unit principle is 
 applicable to passenger service. Thus a lower rate for a 
 limited ticket than for an unlimited ticket may be justi- 
 fied, since there will be more bother if the transportation 
 is broken into several separate services by stop-overs in- 
 stead of being taken as a whole. '^ A lower rate may be 
 made to those who buy their tickets in lots instead of 
 for the single trip, such as strip tickets and mileage tickets. 
 And it has been held that a railroad may make a lower 
 rate than twenty fares to twenty people traveling to- 
 gether under one transportation contract. But another 
 case probably states a general principle in its pertinent 
 dictum that a railroad is not obliged to sell commutation 
 tickets if it chooses not to; but if it does, any traveler may 
 demand it. Here again the necessity for estabhshing sepa- 
 rate units is not sufficiently plain to imperatively demand 
 recognition; if not, indeed, distinctly considerable, a com- 
 
 " Diphwys Casson Slate Co. v. U. S. 263, 36 L. ed. 699, 12 Sup. Ct. 
 
 Festiniog R., 2 Nev. & Mao. 73. 844. 
 
 " Holland v. Festiniog R. Co., 2 If it were not for the provisions 
 
 Nev. & Mac. 278. of section 22, it is debatable whether 
 
 "* Edson V. So. Pacific Ry. Co., the concession from the regular 
 
 144 Cal. 182, 77 Pac. 894. See also fare would be lawful. In re Mileage 
 
 Interstate Commerce Commission Books, 28 I. C. C. 318. 
 V. Baltimore & O. R. R. Co., 145 
 
 [635] 
 
§ 728 ] Railroad Rate Regulation 
 
 pany is not irrational which ignores it. Moreover, it seems 
 to be well established that if the regulating authority at- 
 tempts to order the issuance of mileages, for example, its 
 interference will be held to be outrageously vexatious.^' 
 
 § 728. The basis of the differential. 
 
 In a recent case in the United States Supreme Coiu-t ^* 
 not only the question of the relation of the carload rates 
 to less than carload rates, but also the relation of less 
 than carload rates to each other was thus elaborately 
 dealt with. "The question presented is not one involving 
 only the proper relation of soap in less than carload lots, 
 to soap in carload lots, but also its proper relation to other 
 articles in less than carload lots. Freight is carried either 
 in carload lots, or in less than carload lots. This division 
 of freight necessarily attends transportation by rail. 
 Classification, within the meaning of the Act to Regulate 
 Commerce, relates to these divisions separately. The classi- 
 fication of soap in less than carload lots, is not controlled 
 by the classification of soap in carload lots, nor is the 
 reclassification of soap in less than carload lots controlled 
 by the relation it bears to other articles in less than car- 
 load lots, — that relation is to be determined by the degree 
 in which, in comparison with such other articles, its han- 
 dling and carrying is, or may be, affected by the cost of the 
 service, competitive and commercial conditions, volume, 
 density, distance, value, and risk of loss or damage. It 
 is true that these elements must also be considered in 
 determining the classification of articles in carload lots, 
 but from a different standpoint. A given article of traffic 
 
 '* State ex rel. v. Delaware, L. & privileges, may be provided by car- 
 
 W. Ry. Co., 48 N. J. L. 55, 2 Atl. riers under section 22, but in absence 
 
 803. See also Lake Shore & M. S. of discrimination Commission no 
 
 Ry. Co. V. Smith, 173 U. S. 684, 43 power to prescribe. Carnegie Board 
 
 L. ed. 858, 19 Sup. Ct. 565. of Trade v. P. Co., 28 I. C. C. 123. 
 
 Special fares for movement of " Cincinnati, H. & D. R. R. v. 
 
 passengers in guaranteed numbers in Interstate Com. Comm., 206 U. S. 
 
 one day, without baggage-checkmg 142, 51 L. ed. 995, 27 Sup. Ct. 648. 
 [ 636 ] 
 
Instances of Justifiable Differences [ §§ 729, 730 
 
 may be more or less desirable when shipped in less than 
 carload lots, than when shipped in carload lots. Bulk^ 
 weight, form, manner of packing, etc., may materially affect 
 the classification of different articles to be carried in the same 
 car, when they might have little or no weight in the classifi- 
 cation of a single article to be carried in carload lots." ^^ 
 
 § 729. Comparison of bulk and package rates. 
 
 So different are the conditions under which freight is 
 carried in packages and in bulk that it is not proper to 
 institute comparisons as to particular factors connected 
 with each. As the United States Supreme Court '* said 
 in a recent case: "Because circumstances existed which 
 prevented the economical use of the tank car by plaintiffs 
 (no demand being made for the use of a tank car) is no 
 ground for finding discrimination in the charge for the 
 weight of the barrel package (such charge being in itself 
 not an unreasonable one), while none is made for the tank 
 containing the oil." If, however, the railroad fails to pro- 
 vide tank cars for the use of its shippers it would be un- 
 fair discrimination to charge shippers of oil in packages 
 for the additional weight. As the Supreme Court of Ohio '* 
 said in the leading case on this point: "It must either pro- 
 vide tank cars for all of its customers aUke, or give such 
 rates of freight in barrel packages by the carload, as 
 will place its customers using that method on an equal 
 footing with its customers adopting the other method." 
 
 Topic C. Facilities Furnished by Shippers 
 
 § 730. Terminal facilities furnished by shippers. 
 
 It is a principal rule in this matter that it is permissible 
 
 " Until recently the . Interstate '« Pennsylvania Refining Co. v. 
 
 Commerce Commission had no power Western N. Y. & P..R. R., 208 U..S. 
 
 to fix a rate by insisting upon a car- 208, 52 L. ed. 456, 28 Sup. Ct. 
 
 tain classification. Interstate Com. 268. 
 
 Comm. V. Lake Shore & M. S. Ry., " State v. Cincinnati, N. O. & T. 
 
 134 Fed. 942; sustained in 202 U. S. P. R. R. Co., 47 Oh. St. 130, 23 
 
 613, 50 L. ed. 1171, 26 Sup. Ct. 776. N. E. 928. 
 
 [6371 
 
§ 731 ] Railroad Rate Regulation 
 
 for a railroad to make a lower rate to a shipper who 
 furnishes a part of the facilities which the carrier must 
 otherwise provide in order to serve him. One of the lead- 
 ing cases in estabUshing this rule is undoubtedly Root v. 
 Long Island Railroad; *" the essential facts appear in this 
 extract from the opinion. "The facilities which Quintard 
 was to provide for the loading of the coal, his services in 
 loading the cars, the large quantities which he was to ship, 
 in connection with the large sums of money that he had 
 expended in the erection of the dock, in part for the use 
 and accommodation of the defendant, are facts which tend 
 to explain the provisions of the contract complained of, 
 and render it a question of fact for the determination of 
 the trial court as to whether or not the rebate, under the 
 circumstances of this case, amounted to an unjust discrimi- 
 nation, to the injury and prejudice of others. Therefore, 
 in this case, the question is one of fact, and not of law; 
 and, inasmuch as the discrimination has not been found 
 to be unjust or unreasonable, the judgment caimot be 
 disturbed." " 
 
 § 731. Undue prejudice in granting allowances. 
 
 Under the Act as amended the Commission has been 
 given charge of this situation. In one proceeding ** it has 
 held the provisions in the tariffs requiring a return to de- 
 fendant of the car within forty-eight hours as a condition 
 precedent to the payment of an allowance to be unreason- 
 able and unduly discriminatory.^' Recently the Commis- 
 sion has said that allowances by a carrier to a salt com- 
 
 " 114 N. Y. 330, 21 N. E. 403, 11 Ohio St. 571, 3 N. E. 907, 54 Am. 
 
 An), S.t.. Rep. 643, 4 L. R. A. 33. Rep. 846; State v. Cincinnati, N. O. 
 
 "It is generally agreed that a & T. P. Ry., 47 Ohio St. 130, 23 
 
 jreduction may bie made to such N. E. 928; Brundred v.. Rice, 49 
 
 shippers as furnish a part of the Ohi6 St. 640, 32 N. E. 169, 34 Am. 
 
 facilities necessary to serve them. St. Rep. 589. 
 
 See Savitz v. Ohio & M. Ry., 150 « In re Restricted Rates, 20 I. C. 
 
 111. 208, 27 N. E. 235, 27 L. R. A. 626, C. R. 426.' 
 
 affirming 49 111. App. 315; Scofield *^ Nebraskarlowa Grain Co. v. 
 
 V. Lake Shore & M. S. R. R., 43 U. P. R. R., 15 I. C. C. 90. 
 
 [638] 
 
Instances of Justifiable Differences [ § 732 
 
 pany for use of latter's docks and facilities in handling 
 its shipments must be scrutinized.^^ And terminal arrange- 
 ments involving privileges to special concerns have been 
 repeatedly condemned by the courts.** As the authorities 
 now have jurisdiction over allowances, they will not 
 permit any unreasonable compensation for any service 
 connected with transportation performed by the shipper 
 or consignee.*' Nor will the Commission permit any 
 allowance to be made for services not owed by the carrier 
 to the shipper or consignee, such as the loading or unload- 
 ing of carload freight by special mechanisms or plant facil- 
 ities.*' 
 
 § 732. Unjustifiable differences in rates. 
 
 The difficulty in applying these priaciples to particular 
 cases is, however, considerable. Unless the railroad offers 
 both services to all shippers alike, so that any shipper is 
 free to choose his method of shipment, discrimination will 
 necessarily result in favor of those who ship at the lower 
 rates in comparison with those who are compelled to pay 
 the higher rates. In the oil business particularly, the 
 complaints against the differences between tank rates and 
 barrel rates have been both loud and long, and the problem 
 has been brought before the Commission several times. 
 In the earliest of these cases, *^ Commissioner Cooley 
 pointed out that the argument justifying differentials 
 although sound enough doubtless, abstractly, did not meet 
 the actual conditions. "It is obvious, we think, from the 
 facts stated, that instead of the defendants offering two 
 modes of transportation which are open to the acceptance 
 of all, they offer only one which is open. The other 
 is offered on such terms that it can by possibility be 
 
 ** Intematmal Salt Co. v. G. & E., 2?0 U, S. 248, 33 Sup,.Ct,,9J6. 
 
 W. R. R., 20 I. ,C; C. 530. " Tap Line Cases, 234 U.. S. .1,. 34 
 
 *^ Southern Pacific Terminal Co. v. Sup. Ct. 741. 
 
 Interstate Commerce Commission, «Rice v. Louisville & Nashville 
 
 219 U. S. 498, 31 Sup. Ct. 279. Ry., 1 Int. Com. Rep. 722, 1 I. C. C. 
 
 « Mitchell Coal Co. v. Pa. R. Rep. 503. 
 
 [639] 
 
§ 733 ] Kailboad Rate Regulation 
 
 accepted only by parties who can control a considerable 
 capital, and who will supply for themselves an important 
 part of the means of transportation, and also supply 
 terminal facilities. The man of small means who adopts 
 the method of transportation in barrels cannot be said to 
 do so of choice when the failure of the carrier to supply 
 for the other the customary means of transportation com- 
 pels him to do so." *^ 
 
 § 733. Concessions to shippers in bulk considered. 
 
 This complaint has been made to the Gontimission many 
 times since this first case; and the shippers have in the 
 successive decisions received increasing protection against 
 discrimination of the railroads of the sort here described.*" 
 The Conomission has insisted upon its policy that unless 
 the railroads provide an adequate equipment of tank cars 
 oil must be taken in barrels at the same rate as it would be 
 taken in tank cars. And for the weight of the tank it is 
 held that in assuming for transportation purposes that a 
 barrel of refined petroleum oil weighs 400 pounds and that 
 a gallon of that commodity weighs 6.3 pounds when 
 shipped in tanks, the railroads were using constructive or 
 hypothetical weights so much out of proportion to actual 
 weights that positive and measurable preference was 
 granted to the shipper by the tank method; and so far as 
 that practice enabled the tank shipper to secure the car- 
 riage of more pounds of freight for the same money than 
 the shipper in barrels it was an unlawful prejudice. As to 
 another scheme of giving a reduction it was held that the 
 practice of allowing the tank shipper an arbitrary deduc- 
 tion of 42 gallons per tank car is wholly indefensible, as 
 losses from leakage and evaporation were not less pro- 
 portionally when the shipment is made in barrels, and no 
 ch'cumstance was discovered or reason advanced which 
 
 "See Indepettdent Refiners Ass'n '"Rice v. Louisville & N. R. R., 
 
 V. W. N. Y. & P. R. R., 4 Int. Com. 1 Int. Com. Rep. 722, 1 1. C. C. Rep. 
 Rep. 63, 5 I. C. C. 415. 503. 
 
 [640] 
 
Instances of Justifiable Differences [ § 734 
 
 justified a concession of that nature to the shipper who 
 furnishes his own conveyance, when no corresponding 
 allowance was made to a rival shipper using the means of 
 transportation provided by the carrier." 
 
 § 734. Railroad without tank cars. 
 
 This abuse came before the judicial courts for decision 
 not long afterward, in the case of State v. Cinciimati, New 
 Orleans & Texas Pacific Railway Company," where 
 Mr. Justice Bradbury wrote a strong opinion against such 
 discrimination, concluding with this sweeping language: 
 "The duty of providing suitable facilities for its customers 
 rests upon the railroad company; and if, instead of pro- 
 viding sufficient and suitable ■ cars itself, this is done by 
 certain of its customers, even for their own convenience, 
 yet the cars thus provided are to be regarded as part of 
 the equipment of the road. It being the duty of a railroad 
 company to transport freight for all persons, indifferently, 
 and in the order in which its transportation is applied for, 
 it cannot be permitted to suffer freight cars to be placed 
 upon its track by any customer for his private use, except 
 upon the condition that, if it does not provide other cars 
 sufficient to transport the freight of other customers in the 
 order that application is made, they may be used for that 
 purpose. Were this not so, a mode of discrimination fatal 
 to all successful competition by small establishments and 
 operators with larger and more opulent ones could be 
 successfully adopted and practised at the will of the rail- 
 road company, and the favored shipper." *' 
 
 " Scofield V. Lake Shore & Mich- C. Rep. 389, s. c, 3 I. C. C. Rep. 87, 
 
 igan Southern R. R., 2 Int. Com. Rep. s. c, 4 I. C. C. Rep. 131, s. c, 6 I. C. 
 
 67, 2 I. C. C. Rep. 90; Re Rebate C. Rep. 455; Rice v. Cincinnati, 
 
 Tank & Barrel Rates, 2 Int. Com. W. & B. R. R., 3 Int. Com. Rep. 841, 
 
 Rep. 245, 2 I. C. C. Rep. 365; Rice 5 I. C. C. Rep. 193. 
 V. Western N. Y. & Pa. Ry., 3 Int. " 47 Ohio St. 130, 23 N. E. 928. 
 
 Com. Rep. 162, 4 I. C. C. Rep. 131; " gge also Brundred v. Rice, 49 
 
 Rice, Robinson & Winthrop v. Oh. St. 640, 32 N. E. 169, 34 Am. 
 
 Western N. Y. & Pa. R. R., 2 I. C. St. Rep. 589. 
 
 41 [ 641 ] 
 
§§ 735, 736 ] Railroad Rate Regulation 
 
 § 736. Transportation expenses paid by shipper. 
 
 Whatever is done by the shipper which directly reduces 
 to the raihoad company the cost of serving him may be 
 allowed for in the rate made to him without causing dis- 
 crimination. One of the plainest cases of this sort before 
 the Commission is Castle v. Baltimore & Ohio Railroad 
 Company," where complainant alleged that defendant had 
 unjustly discriminated in rates and facilities for the 
 transportation of sand against him and in favor of his 
 competitors. Discussing the essential facts, the Commission 
 said: "The only remaining point, and by far the most 
 important one raised by this issue, is that involved in the 
 alleged discriminations in favor of Brown, the complain- 
 ant's competitor at Dock- Siding. Brown, it appears, 
 owned and at times leased other cars and equipment, paid 
 the trainmen, conductors, and necessary telegraph opera- 
 tors, and relieved the defendant from all liability from 
 either loss or damage to rolling stock or injury to em- 
 ployees; in consideration of which the defendant charged 
 him for track service only. The complainant owned 
 neither cars nor equipment, and when shipping in the 
 defendant's cars was charged the published rate." ^^ 
 
 § 736. Rental paid on shipper's cars. 
 
 If the shipper provides his own cars the railroad, it 
 would seem clear, may allow him a reduction in his freight 
 rate, equal to the rental value of his cars at all events. 
 It is properly the business of the railway companies, to be 
 sure, to supply cars for their customers; but if they stand 
 ready to do this, they may, nevertheless, at their option 
 make an allowance to the shipper who furnishes his own 
 cars, which is not disproportionate to the reduced cost of 
 serving him. Even in the extreme case of State v. Cin- 
 cinnati, New Orleans & Texas Pacific Railroad Company, ^^ 
 
 '* 8 Int. Com. Rep. 333. rolling stock was given an unusual 
 
 '* See Chicago & A. R. R. Co. v. concession from regular rates. 
 
 Chicago V. & W. Coal Co., 79 111. ^6 47 Ohio St. 130, 23 N. E. 928. 
 
 121, where a shipper furnishing the 
 
 [642] 
 
Instances op Justifiable Differences [ § 737 
 
 which is most opposed to special arrangements of this 
 sort, this is grudgingly admitted. "No doubt, a shipper 
 who owns cars may be paid a reasonable compensation for 
 their use, so that the compensation is not made a cover 
 for discriminating rates, or other advantages to such owner 
 as a shipper. Nor is there any valid objection to such 
 owner using them exclusively, as long as the carrier pro- 
 vides equal accommodations to its other customers. It 
 may be claimed that if a railroad company permit all 
 shippers, indififerently and upon equal terms, to provide 
 cars suitable for their business, and to use them exclu- 
 sively, no discrimination is made. This may be theoret- 
 ically true, but is not so in its application to the actual 
 state of the business of the country; for a very large 
 proportion of the customers of a railroad have not a 
 volume of business large enough to warrant equipping 
 themselves with cars, and might be put at a ruinous 
 disadvantage in the attempt to compete with more exten- 
 sive establishments. Aside from this, however, a shipper 
 is not bound to provide a car." " 
 
 § 737. Allowance for cars or facilities furnished. 
 
 When the shipper furnishes cars or other facilities the 
 carrier may lawfully make an allowance on that account, 
 provided the allowance is reasonable in amount; an un- 
 reasonable allowance under color of compensation for 
 facilities so furnished would constitute an illegal rebate. 
 So a reasonable allowance to an elevator company for 
 elevator service is not an illegal rebate, though the elevator 
 company as a shipper of grain is thereby incidentally aided 
 in its business.^* So the allowance of mileage for tank cars 
 furnished by shippers, and low return rates on oil returned 
 in the cars, is not illegal unless the mileage is excessive.^' 
 
 "See also Brundred v. Rice, 49 s'Rice v. Cincinnati, W. & B. 
 
 Ohio St. 640, 32 N. E. 169, 34 Am. R. R., 3 Int. Com. Rep. 841, 5 1. C. C. 
 St. Rep. 589. 193. 
 
 '* Matter of Allowance to Eleva- 
 tors, 10 I. C. C. Rep. 309. 
 
 [643] 
 
§ 738 ] Railroad Rate Regulation 
 
 But when the allowance is unreasonable it constitutes an 
 illegal rebate.^ Each case involving an allowance must be 
 determined upon the special facts and circumstances 
 presented.*^ This matter of allowances is one which has 
 received much attention from the Commission of late 
 years; for by section 15 of the Act as amended it is au- 
 thorized to limit the amount that the carrier may pay 
 to the shipper for transportation services rendered by 
 latter.*^ But the provision clearly recognizes that a just 
 and reasonable allowance may be made to the owner of 
 property transported when such owner renders a service 
 connected with or furnishes an instrumentality used in the 
 transportation.*' A memorandum of two recent cases of 
 the Supreme Court among others lately there decided, will 
 serve to make this matter clear. In one of them it was 
 held that elevation is made such a part of transportation 
 as to bring it within the jurisdiction of the Interstate 
 Commerce Commission, which is authorized to determine 
 what is a reasonable allowance to a shipper who is also an 
 elevator man for elevation services rendered in connection 
 with transportation.*^ In the other it was decided that 
 when, under the through rate to New York, delivery is 
 undertaken within lighterage limits published in the sched- 
 ule, an allowance to the extent that is deemed proper may 
 be made to receivers furnishing their own lighterage and 
 terminals therefor.'^ 
 
 T(ypic D. Restriction to Scheduled Allowance 
 
 § 738. Extent of statutory restrictions. 
 
 Section 1 imposes on the carrier the duty to provide and 
 
 «» Shamberg v. Delaware, L. & W. «» Sterling & Son Co. v. M. C. R. R. 
 
 Ry., 3 Int. Com. Rep. 502, 4 I. C. C. Co., 21 1. C. C. 451. 
 
 630. «« U. P. R. R. Co. V. Updike Grain 
 
 " Merchants Dispatch Storage Co. Co., 222 U. S. 215, 56 L. ed. 171, 
 
 V. I. C. R. R. Co., 17 I. C. C. 98. 32 Sup. Ct. 39. 
 
 « Industrial Lumber Co. v. St. «' United States v. B. & O. R. R., 
 
 L. W. & G. Ry. Co., 19 1. C. C. 231 U. S. 274, 34 Sup. Ct. 75. 
 50. 
 
 [644] 
 
Instances of Justifiable Differences [ § 738 
 
 furnish certain services in relation to the transportation 
 of property at reasonable charges."" Allowances, therefore, 
 when these services are furnished by patrons under sec- 
 tion 15 must not be above the reasonable cost of service, 
 and thereby become indirectly a rebate."^ The refusal of a 
 carrier to pay an allowance in a matter for which it had no 
 tariff authority is, therefore, not in violation of the Act."' 
 An allowance in the form of additional free time may be 
 just as unlawful as one in the form of money."" At the 
 present time carriers very generally pay three-fourths of a 
 cent a car mile on both loaded and empty movements.™ 
 It will always be a question nowadays whether the net 
 earning on cars as a result of such payments constitute 
 more than a just return upon the value of those cars." 
 But the principle is that whatever allowances are made 
 must be just, reasonable and non-discriminatory." What- 
 ever charges are made, whatever services are performed, 
 and whatever privileges are allowed by carriers, must be 
 stated separately in the schedules filed with the Commis- 
 sion." A common carrier by contract may not impose 
 upon itself any burden or grant any privilege, or perform 
 any service, or make any allowance with respect to the 
 traffic of a particular shipper, except under the authority of 
 its published tariffs.'^ And even so, this can be done only 
 when the burden is assumed, or the privilege granted, or 
 allowance made to all shippers under like circumstances 
 and similar conditions.'^ There being no obligation to 
 make such allowances, a complaint asking establishment of 
 
 " Transit Case, 24 I. C. C. 340. " Suffern Grain Co. v. B. & O. 
 
 «' Mfrs. Ry. Co. v. St. L., I. M. & R. R., 20 I. C. C. 200. 
 
 S. Ry., 28 I. C. C. 93. " Brook-Rauch Mill & Elevator 
 
 •» Rylet V. W. R. R., 25 I. C. C. Co. v. M. P. Ry., 17 I. C. C. 
 
 210. 158. 
 
 •' Alan Wood, Iron & Steel Co. v. " Anderson, Clayton & Co. v. 
 
 P. R. R., 24 I. C. C. 27. C, R. I. & P. Ry., 18 I. C. C. 
 
 '» Rates on Linseed Oil, 26 I. C. C. 340. 
 
 265. "General Electric Co. v. N. Y. 
 
 " In re Advances on Potatoes, 25 C. & H. R. R. R., 14 I. C. C. 
 
 1. C. C. 159. 237. 
 
 [645] 
 
§ 739 ] Railroad Rate Regulation 
 
 tariff provisions for reimbursement of shippers for repair 
 made on cars was dismissed.''® 
 
 § 739. Both rates must be open to all. 
 
 The modern fear of discrimination is such that it is not 
 open to a company to make concessions to one customer 
 who is asking a cheaper service without at the same time 
 giving other customers the right to get the lower rate by 
 conforming with the conditions under which it is offered. 
 Thus in one recent successful prosecution by the govern- 
 ment for giving or taking a rebate the gravamen of the 
 charge was not that the allowance of $1.00 per car for the 
 terminal facilities furnished by the guilty shipper was 
 improper in itself, but that the railroad had not properly 
 announced such allowances in its published schedules." 
 Still more open to ■ condemnation is a contract between a 
 particular shipper and a railroad company, whereby the 
 railroad was to allow ten per cent off all freight biUs 
 rendered, to recoup a shipper who had built a hoist to 
 load his ties upon a siding, for such an arrangement is 
 necessarily exclusive.^* It has been said by the Commis- 
 sion that equality of opportunity in the use of transporta- 
 tion facilities is one of the purposes of the Act.'* It 
 should be remembered that allowances are subject to 
 abuses in shape of rebates, and they must therefore be 
 strictly scrutinized.'" Discrimination would result from 
 granting lower rate to large shipper providing facilities for 
 prompt unloading than accorded smaller competitor unable 
 to provide such facilities.*^ A proposed rate was recently op- 
 posed, because it would discriminate in favor of one shipper 
 who built tank facilities in which to receive his shipments.'^ 
 
 " Balfour, Guthrie & Co. v. O. W. *° Southwestern Missouri Millers' 
 
 R. R. & N. Co., 21 1. C. C. 539. Club v. St. L. & S. F. R. R., 26 I. 
 
 " United States v. C. & A; Ry., C. C. 245. 
 
 148 Fed. 646. " In re Restricted Rates, 20 
 
 " Chesapeake & O. Ry. v. Stand- I. C. C. R. 426. 
 
 ard Lumber Co., 174 Fed. 107. '^ Molasses Rates from Mobile, 28 
 
 " In re Wharfage Charges at I. C. C. 666. 
 Galveston, 23 I. C. C. R. 535. 
 
 [646] 
 
Instances of Justifiable Differences [ §§ 740, 741 
 
 § 740. Lighterage allowance. 
 
 Discrimination would result from the payment of a 
 lighterage allowance to one shipper while refusing such 
 allowance to another shipper performing that service.'' 
 The Commission has jimsdiction under section 15 of the 
 Act to inquire into the lawfulness of allowances made by 
 carriers to shippers for the alleged transfer by the latter 
 from their refineries or warehouses to the cars of defend- 
 ants.*^ Loose allowances paid to shippers "in lieu of 
 lighterage and floatage" may be questioned.** But there 
 is no ground for criticising the withholding of lighterage 
 privilege and allowance from the complainant where its 
 sugar crosses lighterage limits, while according such a 
 privilege and allowance to another shipper within hghterage 
 limits.** It should be noted that by this doctrine which 
 has finally prevailed, lighterage within a zone of delivery 
 covered by the rate scheduled is treated as part of the 
 transportation service imdertaken by the carrier, for 
 aiding in the performance of which shippers with whom 
 agreement is made may be given an allowance subject to 
 its being found unreasonable by the Commission under 
 section 15. Under these conditions such services are not 
 regarded as merely accessorial to transportation, payment 
 for which would be considered as forbidden by the Act 
 unless accorded to all under the same conditions. 
 
 § 741. Elevation charges. 
 
 While the Commission believes that the payment of all 
 elevation allowances and the giving of all free elevation 
 should be prohibited, it fully accepts the United States 
 Supreme Court decision holding that elevation allowances 
 may be made.*^ Considering the Elevator Allowances 
 
 *» Federal Sugar Refining Co. v. ** United States v. Baltimore & 
 
 B. & O. R. R. Co., 20 I. C. C. 200. O. R. R., 231 U. S. 274, 34 Sup. 
 
 " In re Allowances for Transfer of Ct. 75. 
 
 Sugar, 14 I. C. C. 619. '" The current doctrines of the 
 
 ''Chamber of Commerce of New Commission may be seen in: In re 
 
 York V. N. Y. C. & H. R. R. R. Co., Elevation Allowances, 24 I. C. C. 
 
 24 I C C. 55. 197, and Traffic Bureau of St. Louis 
 
 [647] 
 
§ 742 ] Railroad Rate Regulation 
 
 cases of Supreme Court together, the Commission has 
 concluded that it was intention of Supreme Court to hold 
 that whatever might be the case, if railroad saw fit to 
 confine its payment to elevation actually required in 
 transportation of grain, it must, when it makes this 
 allowance to one elevator under such circumstances as to 
 give that elevator payment for commercial elevation, 
 extend the same privilege to all other elevators similarly 
 situated.** The Commission holds that a railroad should 
 cease from paying any allowance for terminal services to 
 elevator, unless tariffs shall at the same time offer such 
 allowance to all other shippers using the elevators in the 
 city.*' But an allowance made to a shipper of grain 
 furnishing elevation service under an arrangement with a 
 carrier, is regarded by it a rebate and an unlawful dis- 
 crimination only when it involves a profit over and above 
 the actual cost of service.'" 
 
 § 742. Transit privileges. 
 
 The Commission has held that carriers may grant the 
 privilege of concentration and protect through rates re- 
 lating thereto;" for concentrating rates by increasing the 
 size and regularity of shipments seem to be of advantage 
 to carriers as well as shippers.'^ Lack of proper policing at 
 a transit point is a matter that ought to be investigated 
 and corrected.'' Compression is a service which the 
 
 V. C, B. & Q. R. R., 22 I. C. C. »Re Allowances to Elevators by 
 
 496. U. P. R. R., 12 I. C. C. 85; see also 
 
 «» See Peavey & Co. v. Union Ryley v. Wabash R. R., 25 I. C. C. 
 
 Pacific Ry., 222 U. S. 42, 56 L. ed. 210. 
 
 83, 32 Sup. Ct. 1, and Union Pacific '' Anderson, Clayton & Co. v. 
 
 Ry. V. Updike Grain Co., 222 U. S. C, R. I. & P. Ry., 18 I. C. C. 
 
 215, 56 L. ed. 171, 32 Sup. Ct. 39, 340. 
 
 which have made the long course of ^'- Railroad Commission of Wis- 
 
 opinion in the Commission previous consin v. C. & N, W. Ry., 16 I. C. C. 
 
 to that time more or less obsolete. 85. 
 
 " In re Keystone Elevator Co., '* Indianapolis Freight Bureau v. 
 
 25 I. C. C. 618; see also Gund & Co. C, C, C. & St. L. Ry., 26 I. C. C. 
 
 v. C, B. & Q. R. R., 25 1. C. C. 326. 53. 
 
 [648] 
 
Instances of Justifiable Differences [ § 748 
 
 carrier procures for its own convenience, and when that 
 service is performed in such manner as not to prejudice or 
 prefer a particular shipper or community, the Act does 
 not limit the freedom of the carrier to make contracts in 
 respect thereto.®^ In other words, what is forbidden by 
 the Act are payments which inure to the benefit of a 
 shipper whereby his transportation costs him less net than 
 what other shippers, his competitors, are paying. In deal- 
 ing with a shipper if payments are made for anything 
 pertaining to the transportation the transaction is subject 
 to the closest scrutiny to determine whether more than a 
 fair price is passing hands. 
 
 § 743. Terminal allowances. 
 
 It has been seen that the ownership by a shipper of a 
 rail line which serves that shipper calls for the closest 
 scrutiny to ascertain whether, through divisions or allow- 
 ances, rebates are made to the shipping owner.'* If it be 
 shown that under the practice prevailing the line carrier 
 owed no duty to move cars about complainant's yard it 
 follows that the complainant was not entitled to recover 
 for the services performed and the instrumentalities 
 furnished by it in coimection with the movement of cars 
 in its yard.'^ And if a switching service is included within 
 the transportation undertaken at the rate scheduled, an 
 undue disadvantage for which damage will be awarded will 
 be held to result from the carrier's failure to accord 
 terminal switching allowance to complainant, while grant- 
 ing such allowances to competing industries performing 
 similar services.'' And if the relation between the tap 
 line and the main carrier is that of connecting railroads, 
 whenever an abnormal division is allowed to an industrial 
 railroad there results an indirect rebate to the shipping 
 
 '* Merchants Cotton Press & Stor- * Solvay Process Co. v. D., L. & 
 age Co. V. I. C. R. R., 17 I. C. C. 98. W. R. R., 14 I. C. C. 246. 
 
 9' Crane R. R. Co. v. P. & R. Ry., " Buffalo Union Furnace Co. v. 
 
 15 I. C. C. 248. L. S. & M. Ry., 21 I. C. C. 620. 
 
 [649] 
 
§ 744 ] Railroad Rate Regulation 
 
 industry of its ownership of the tap line.'^ In the latter 
 part of Chapter IV these possibilities of the relation of 
 industrial trackage to the Une carrier were discussed,** and 
 it was found that it might be that of a plant facihty, a 
 tap line, a connecting carrier and what was still more 
 difficult to deal with, a combination of these complica- 
 tions.^ 
 
 § 744. Allowances for facilities closely scrutinized. 
 
 With the rigorous enforcement of the law against all 
 discrimination in late years, such arrangements as have 
 been just described are beiug questioned, if not as amount- 
 ing to discrimination in themselves, at least as a cover for 
 discrimination. At all events, the whole facts will be gone 
 into to discover whether too advantageous terms are being 
 obtained. Thus in a recent case it was discovered that a 
 car company wa? getting so much for the use of its cars 
 that the reduction was being made the basis for reduced 
 rates to those who shipped in those cars.^ And in another 
 case not charging certain shippers demurrage for cars, 
 upon an apparently private siding found to be public, 
 while others paid demurrage in regular yards, was held 
 plain discrimination.' However, the railroads are still 
 allowed to make arrangements with customers furnishing 
 
 " In re Divisions of Joint Rates on hibition of the Act. Southwestern 
 
 Coal, 22 I. C. C. 51. Mo. M. C. v. St. L. & S. F., 26 I. C. 
 
 » See Tap Lme Cases, 234 U. S. C. 245. 
 29, 34 Sup. Ct. 41. ' Ohio Coal Co. v. Whitcomb, 123 
 
 ' See Interstate Commerce Com- Fed. 359. 
 mission v. Atchison, T. & S. F. The Commission has consistently 
 
 Ry., 234 U. S. 294, 34 Sup. Ct. held to the doctrine that whatever 
 
 291. allowances are made to shippers in 
 
 ' Interstate Commerce Commission return for services performed in 
 
 V. Reichman, 145 Fed. 235. connection with transportation must 
 
 To pay an allowance to one shipper be just and reasonable in view of the 
 
 while refusing to permit all shippers cost of the service tendered, held free 
 
 to take advantage of the privilege, from discrimination and preference, 
 
 unless justifying circumstances and in regard to others similarly situated, 
 
 conditions are shown, creates un- Sufferin Grain Co. v. I. C. R. R., 22 
 
 justifiable preference within the pro- I. C. C. 178. 
 
 [650] 
 
Instances of Justifiable Differences [ § 745 
 
 their own facilities. Some diflBculty is inseparable from 
 this situation, but probably not enough to justify the 
 radical remedy of forbidding such arrangements altogether. 
 Those who get allowances which are not scheduled will, 
 however, fall foul of the modem statutes against dis- 
 criminations, even if the allowance made is proper enough 
 in itself. Moreover, when the arrangement is in its nature 
 an exclusive one, of which other patrons cannot take ad- 
 vantage, it would generally be condemned. 
 
 § 746. Allowances for facilities still permissible. 
 
 It is not, however, considered by the courts to be desir- 
 able that there should be no way to give a proper allow- 
 ance to shippers who employ their own property and de- 
 vote their own labor to some of the work that the carrier 
 must otherwise do for them. In one of the important 
 Federal cases, ^ this is insisted upon in setting aside a 
 ruling of the Commission that no allowance should be 
 made elevator men who deal with their own grain in their 
 own elevators. "Pecuniary advantages derived by shippers 
 from the ownership or use of such facihties of trade are 
 attributable to that ownership, and not to the transporta- 
 tion of the articles shipped, and the consideration and 
 regulation of these advantages are without the scope of the 
 CoDomission's power. The truth is that trade advantages 
 of this nature do not condition the question of reasonable- 
 ness of rates, or rebates, or of discrimination. The shipper 
 who owns warehouses, tipples, spur tracks, cars, mills, 
 and by their use derives greater profit from the dealing in 
 the articles which he ships over a railroad, is entitled to 
 the same rate of charge for transportation and the same 
 reasonable compensation for transportation services which 
 
 * Peavey & Co. v. Union Pac. R. priwa/acie that $10 per car allowance 
 
 Co., 176 Fed. 409. for loading at Galveston was too 
 
 If $6 is a reasonable allowance to high. Rates on Bananas from Gulf 
 
 consignors at New Orleans for loading Ports, 30 I. C. C. 510. 
 cars with bananas, it would seem 
 
 [ 651] 
 
§ 745 ] Railroad Rate Regulation 
 
 he renders that the shipper who owns less or no such trade 
 facilities and derived less profit is entitled to." ^ 
 
 ' Citing Harp v. Choctaw, O. & withdrawal of the allowance is jus- 
 
 G. Ry. Co., 125 Fed. 445, 61 C. C. A. tified, although still given at certain 
 
 405. other points. Elevation Allowances 
 
 If elevation is not a transportation at St. Louis, 30 I. C. C. 696. 
 necessity at East St. Louis, the 
 
 [652] 
 
CHAPTER XVI 
 
 DISCRIMINATION BETWEEN LOCALITIES 
 
 § 750, Provisions of the Act. 
 751. Scope of its principles. 
 
 Topic A. Discriminalion at Common Law and under Statute 
 
 § 752. Locality has no right at common law to complain of rates. 
 
 753. Statutory regulation of discrimination between localities. 
 
 754. Lower rate as evidence of unreasonableness of higher. 
 
 755. Weight to be given to such evidence. 
 
 756. Higher rate not necessarily unreasonable. 
 
 757. Reasonableness of rate per se immaterial under statute. 
 
 Topic B. General Principles of Statutory Regulation 
 
 I 758. What discrimination is not unlawful. 
 
 759. Discrimination which is not undue. 
 
 760. Interdependence of rates to various localities. 
 
 761. No vested right in preferential rates. 
 
 762. Discrimination explained by local circumstances. 
 
 763. Distance as a factor in rate making. 
 
 764. Difference between through and local rates. 
 
 765. Railroad rates tend toward a cost basis. 
 
 766. Various systems of making distance rates. 
 
 767. Burden upon the railroad to defend discriminatory rates. 
 
 Topic C. What Constitutes Undue Prejudice 
 
 \ 768. Provisions against undue prejudice. 
 
 769. Discrimination resulting from intrastate rates — the Shreveport case 
 
 770. Discrimination by means of rate adjustments. 
 
 771. Conditions which are not dissimilar. 
 
 772. Dissimilarity of condition is a question of fact. 
 
 773. Discrimination against points off the line. 
 
 774. What constitutes a through line. 
 
 775. Equalization of economic advantages — Economic theory. 
 
 776. Equalization of economic advantages — Legal practice. 
 
 777. Discrimination against the staple industry of a locality. 
 
 778. Equalization of values. 
 
 779. Disproportionate charges inconsistent with pubUc duty. 
 
 [653] 
 
§ 750 ] Railroad Rate Regulation 
 
 Topic D. Long and Short Haul 
 
 I 780. Long and short haul at common law. 
 
 781. Legal justification of lower long-haul rate. 
 
 782. Statutory regulation of long and short-haul rates. 
 
 783. The Fourth Section Amendment of 1910. 
 
 784. General principles governing the Fourth Section. 
 
 785. Relation between long-haul and short-haul rates. 
 
 786. Interpretation of the Fourth Section. 
 
 787. Apphcation of the Fourth Section. 
 
 788. Principles governing deviation from the Fourth Section. 
 
 789. Recognition of carrier's right to relief. 
 
 790. Conditions justifying relief from the Fourth Section. 
 
 791. Competition as ground for reUef from the Fourth Section. 
 
 Topic E. Competition as a Factor in Rate Making 
 
 § 792. Competition as a justification for discrimination. 
 
 793. Competition as a factor in rate making. 
 
 794. Incidents of competition. 
 
 795. Commodity and market competition. 
 
 796. How the Commission determines justifiable discrimination. 
 
 797. Competitive rates must be compensatory. 
 
 798. Non-competitive rates must be reasonable. 
 
 799. Potential competition. 
 
 800. Suppression of competition by agreement. 
 
 801. Suppression of competition by consolidation. 
 
 802. Carrier may refuse to make competitive rates. 
 
 Topic F. What Circumstances Justify Preferential Rates 
 
 § 803. Substantial differences of condition which justify discrimination. 
 
 804. Cost of service as a difference of condition. 
 
 805. Reconsignment arrangements and transit privileges. 
 
 806. Back freights may be lower than outward freights. 
 
 807. What differentials may be allowed. 
 
 808. Systems of rate-making based on differentials. 
 
 809. No obligation to make preferential rates. 
 
 § 750. Provisions of the Act. 
 
 There are two clauses in the Act dealing with dis- 
 crunination between localities, one general and the other 
 specific. By the first paragraph of section 3 it is declared 
 unlawful for any common carrier subject to the provisions 
 of the Act to make or give any undue or unreasonable 
 preference or advantage to any particular person, company, 
 firm, corporation, or locality, or any particular description 
 [654] 
 
Discrimination Between Localities [ § 751 
 
 of traffic, in any respect whatsoever, or to subject any 
 particular person, company, firm, corporation, or locality, 
 or any particular description of traffic to any undue or 
 unreasonable prejudice or disadvantage in any respect 
 whatsoever. By the general clauses of section 4 as re- 
 cently amended, it is made unlawful for any common car- 
 rier subject to the provisions of this Act to charge or re- 
 ceive any greater compensation in the aggregate for the 
 transportation of passengers, or of Uke kind of property, for 
 a shorter than for a longer distance over the same line or 
 route in the same direction, the shorter being included 
 within the longer distance, or to charge any greater 
 compensation as a through route than the aggregate of the 
 intermediate rates subject to the provisions of this Act; 
 but this shall not be construed as authorizing any common 
 carrier within the terms of this Act to charge or receive as 
 great compensation for a shorter as for a longer distance: 
 Provided, however, That upon application to the Interstate 
 Commerce Commission such common carrier may in 
 special cases, after investigation, be authorized by the 
 Commission to charge less for longer than for shorter 
 distances for the transportation of passengers or property; 
 and the Conamission may from time to time prescribe the 
 extent to which such designated common carrier may be 
 reheved from the operation of this section. 
 
 § 751. Scope of its principles. 
 
 The object of the provisions of the Act, in so far as it 
 relates to discrimination between localities, is to insure so 
 far as possible that localities which are similarly situated 
 shall receive equal treatment at the hands of the carrier. 
 The Act recognizes, however that absolute equality is 
 unattainable, and that some discrimination may be al- 
 lowed, provided it is not undue. Whether any discrimina- 
 tion exists and whether it is undue are questions of fact, 
 and the burden is on the carrier to justify itself. Under 
 the third section considerable freedom of action is left to 
 
 [ 655 ] 
 
§ 761 ] Railroad Rate Regulation 
 
 the carrier so long as it keeps within reasonable limits, 
 but the fourth section sets up a rigid rule that the rate 
 for a long haul shall never be less than for a short haul 
 included therein, unless the question has first been pre- 
 sented to the Commission and its approval of a depar- 
 ture from the rule obtained. In the original form of the 
 Act, the carrier was forbidden to discriminate in favor of 
 the long haul when made "under substantially similar 
 circumstance and conditions." This quahfication made it 
 possible for the carrier to determine for itself as a primary 
 question of fact whether or not dissimilar circumstances 
 justifying a difference in rates existed, thus making it 
 impossible for the Commission to pass upon it imtil an 
 apphcation to set aside the rate had been made to it by a 
 carrier. This virtually nullified the section, and accord- 
 ingly it was amended in 1910 by the omission of the words 
 "under substantially similar circumstances and condi- 
 tions." Under the Act as it now stands, it is for the Com- 
 mission and not the carrier to make the primary decision 
 as to whether a difference in conditions justifying a 
 difference in rate exists. Applications for relief are nu- 
 merous, and in general whatever is recognized as a dis- 
 similarity of circumstances and conditions justifying 
 discritaination under section 3 will be accepted by the 
 Commission as a sufficient excuse for relief from section 4. 
 Such appeals are most frequently based on the alleged 
 existence of competition which the carrier must meet in 
 order to participate in the traffic of a given point. This 
 allegation is so easily made and the competition may so 
 easily be either nominal or factitious that the Commission 
 careiully scrutinizes the facts for the purpose of ascertain- 
 ing whether the competition is real, whether it is substan- 
 tial, and whether the carrier must make a preferential 
 rate if it desires to meet it. The fourth section also 
 contains two other rigid rules. The long haul rate is 
 never to be greater than the sum total of the locals in- 
 cluded therein, and whenever a carrier lowers a rate in 
 [656] 
 
Discrimination Between Localities [ § 752 
 
 order to meet water competition it may not afterwards 
 increase its rate merely because the water competition has 
 been removed. 
 
 Topic A. Discrimination at Common Law and under Statute 
 
 § 752. Locality has no right at common law to complain of 
 rates. 
 
 At common law the carrier deals with individuals, not 
 with cities or towns, and only a person, natural or arti- 
 ficial, has a right to complain that rates are too high. 
 Except under a statute, a locality or the citizens in general 
 caimot complain of the rates charged by a carrier. 
 At common law the wrong, if any, is against the individual 
 shippers at the various stations. They may complain if 
 the rates charged them are unreasonable. While dis- 
 crimination in rates between individuals is illegal, even if 
 the higher rate is reasonable in itself, this is not true as to 
 discrimination between localities. If a general rate charged 
 to all shippers in a certain place is reasonable in itself, it 
 is not rendered illegal merely because shippers in another 
 place are charged a lower rate; but the lower rate may be 
 used as evidence that the higher rate is unreasonable.* 
 Though discrimination between localities is not in itself 
 illegal at common law, it is as offensive to sound public 
 policy and to the principles of the law of public service 
 as is discrimination between individuals. While it is true 
 that a carrier possessed of such power may exert it for 
 the benefit of the territory which it serves, it is also true 
 that it is a power which cannot consistently with public 
 safety be lodged in the hands of any individual or group 
 of individuals who are not subject to public control. While 
 it may be used to convert a wilderness into a city, it may 
 also be used to convert a city into a wilderness. The 
 public interest in the equal treatment of localities by car- 
 riers is so obvious that in time the courts might have 
 placed discrimination between localities on the same 
 
 ' Interstate Commerce Commission v. L. & N. Ry., 73 Fed. 409. 
 
 42 [ 657 ] 
 
§ 753 ] Railroad Rate Regulation 
 
 plane as discrimination between individuals. Not having 
 done so, that step has been taken by legislation. 
 
 § 753. Statutory regixlation of discrimination between 
 localities. 
 
 Under these provisions of the Act, quoted in the first 
 section of this chapter, a community is entitled to some- 
 thing more than a reasonable rate; it is entitled to a non- 
 discriminatory rate. A carrier may not say: "We will 
 give to this community a reasonable rate," and meet the 
 full requirement of the law. It must view its rates as a 
 whole, and see to it that they effect no advantage or pref- 
 erence to one conmnmity over another, which does not 
 arise necessarily out of transportation advantages which 
 the one has over the other.' A community may be less 
 concerned with the absolute reasonableness of the rate 
 to which it is subject than it is with the rates charged to 
 its competitors. Minneapolis and Duluth, for instance, 
 are less concerned with the amoimt of the rate than they 
 are with the maiatenance of the present adjustment to 
 those points and to Chicago. A change in the relative 
 situation, even though slight, may give to one pre-eminent 
 advantage and destroy the other.* Any discrimination is 
 prima facie unlawful. It always calls for explanation. The 
 general principle has been well expressed in these words: 
 "It is insisted that these differentials give an undue prefer- 
 ence for the reason that they are without excuse or justifi- 
 cation. If the assimiption of fact iu this statement is true, 
 the conclusion probably follows. A preference without 
 legitimate excuse would be in and of itself an undue and 
 unreasonable one."® It follows, therefore, that "a dis- 
 turbance of a settled equality between localities by making 
 for the first time a difference between them is prima facie 
 
 ' Railroad Commission of Nevada in Rates on Grain, 21 I. C. C. 
 
 V. Sou. Pac. Ry., 21 I. C. C. 22. 
 
 329; In re Advances in Demurrage ' Prouty, Com., in New York 
 
 Charges, 25 I. C. C. 314. Produce Exchange v. Baltimore & 
 
 ' In re Investigation of Advances O. R. R., 7 I. C. C. Rep. 613. 
 
 [658] 
 
Discrimination Between Localities [ § 753 
 
 unreasonable, and should be looked upon with suspicion." "> 
 A carrier may not serve one community at the expense of 
 another, or build a rate wall around one point to advance 
 the interests of a competing point.'' Neither may it by 
 arbitrary rate adjustments determine that one market shall 
 have a certain territory and another market a certain other 
 territory. Every market and every shipper has a right 
 to go as far as reasonable and non-discriminatory rates 
 will carry." Under such rates, producers, dealers and 
 consumers have a right to select the markets to which 
 they will ship their commodities and the routes by which 
 they shall move.'^ Where the same carrier serves two 
 districts which are in substantially similar circumstances 
 and conditions, the serving carrier cannot lawfully prefer 
 one in any manner whatsoever." Equality between great 
 and small is one of the underlying principles of the Act.'^ 
 Even if the removal of an unjust discrimination between 
 two markets somewhat injuriously affects a third market, 
 that fact would be no excuse for permitting the unjust 
 discrimination to continue." If a rate is unlawful, the 
 effect of its removal upon either the railway or the shipper 
 is inmiaterial. Hence if an application of rates to actual 
 conditions works a discrimination against a local creamery 
 in favor of a centralizer, the rates are for that reason un- 
 lawful and should not be maintained, no matter what the 
 effect upon the business or the property rights of the 
 centralizer may be." 
 
 '° Knapp, Com., in Board of Trade " Com Belt Meat Producers' 
 
 of Lynchburg v. Old Dominion S. S. Ass'n v. C, B. & Q. Ry., 14 I. C. C. 
 
 Co., 6 I. C. C. Rep. 632. 376; Black Mountain Coal Land 
 
 '1 Indianapolis Freight Bureau v. Co. v. Southern Ry., 15 I. C. C. 
 
 C, C, C. & St. L. Ry. Co., 26 1. C. C. 286. 
 53. "Harbor City Wholesale Co. v. 
 
 '2 In re Advances on Barley, 24 So. Pac. Ry., 19 I. C. C. 323. 
 I. C. C. 664. ^0 Superior Commercial Club v. 
 
 >' Commercial Club of Superior v. G. N. Ry., 25 I. C. C. 342. 
 G. N. Ry., 24 I. C. C. 96; Aransas " Beatrice Creamery Co. v. I. C. 
 
 Pass Channel & Dock Co. v. G. H. & Ry., 15 I. C. C. 109. 
 S. A. Ry., 27 I. C. C. 403. 
 
 [659] 
 
§ 754 ] Railkoad Rate Regulation 
 
 § 754. Lower rate as evidence of unreasonableness of 
 higher. 
 
 When a rate between two points is attacked by an in- 
 dividual shipper as unreasonable in itself, he may offer, as 
 evidence in support of his complaint, to show that rates 
 are lower for a similar haul between other points.^* This 
 view is well .^stated by Judge Severens, who said: "It 
 is assumed in airgument by counsel in making defense that 
 the rates to Chattanooga are just and reasonable in them- 
 selves. This, it is said, is conceded, and upon the premises 
 it is urged, in substance, that the public at Chattanooga 
 has no right to complain if the respondents lower their 
 rates to Nashville. In one sense, this is true. But the 
 suggestion is fruitful of other considerations. The ques- 
 tion whether the rates are just and reasonable in them- 
 selves is in some measure a relative one; that is to say, 
 it may be tested by a comparison of the particular rates 
 with those accepted elsewhere for a similar service, and 
 whether the instances thus employed are or are not such 
 as by their relation to the case in hand are subject to 
 the operation of some other provision of the Commerce 
 Act, is immaterial. Besides, I think the question of the 
 justness and reasonableness of rates under the first section 
 is colored by the other provisions of the law, and by the 
 general poUcy of the whole enactment, which is to effect 
 the equality of charges. And, at all events, it seems to 
 me clear that the charges accepted for a longer haul may 
 be referred to for the purpose of considering the reason- 
 ableness of the charges made for the shorter haul." ^' In 
 that case, on appeal, the Supreme Court did not pass upon 
 the reasonableness of the lower rate in itself on the ground 
 that the Commission had not done so.^" 
 
 ^ State V. M. & S. L. Ry., 80 " Interstate Commerce Commis- 
 
 Minn. 191, 83 N. W. 60; Cordele sion v. E. T., V. & G. Ry., 85 Fed. 
 
 Machine Shops v. L. & N. Ry., 6 107. 
 
 I. C. C. Rep. 361; Johnson v. C, ^'East Tennessee, V. & G. Ry. v. 
 
 M. & St. P. Ry., 9 I. C. C. Rep. Int. Com. Comm., 181 U. S. 1, 45 
 
 221. L. ed. 719, 21 Sup. Ct. 516. 
 
 [660] 
 
Discrimination Between Localities [ §§ 755, 756 
 
 § 755. Weight to be given to such evidence. 
 
 How much weight shall be given to such evidence must, 
 of course, depend on the facts of each case. When rates 
 to Danville were in question the court gave considerable 
 weight to rates charged for similar hauls. "Whether or 
 not the Danville rates are reasonable -per se is a question 
 that has given me no small amount of trouble. That the 
 cost of transporting freight by wagons is not a proper 
 test is very clear. The rates at Lynchburg cannot be 
 alone used as a basis of comparison. The criteria to which 
 I think the greatest weight should be given are as follows: 
 The opinions of expert witnesses; the effect of the present 
 rates on the growth and prosperity of Danville; the cost of 
 transportation as compared with the rates charged; and 
 the rates in force at numerous other cities, where the cir- 
 cumstances are as nearly similar as may be to those pre- 
 vailing at Danville. The inconclusive and unsatisfactory 
 results, and the inherent difficulties in applying the above- 
 mentioned tests, have led me to the conclusion that the 
 most satisfactory test to be applied in this case is to com- 
 pare the Danville rates with those in force at numerous 
 other cities and towns in the South, where the circum- 
 stances are as nearly as may be similar to those at Dan- 
 ville. This has been done by numerous witnesses for the 
 defense. The result of comparisons between these rates 
 and the Danville rates is the conclusion that the latter 
 compare favorably with the former." ^^ The courts, how- 
 ever, recognize that the relation of rates is the incongruous 
 outcome of previous adjustments and changes made with 
 reference to places other than complainant, rather than 
 the result of any consistent plan having care for the just 
 and equal rights of all.-- 
 
 § 766. Higher rate not necessarily unreasonable. 
 On the other hand, it has been held that a comparison 
 
 -' Quoted from McDowell, Dist. -^ Mayor & Council of Douglas 
 
 J., in Int. Com. Commission v. v. A. B. & A. Ry., 28 I. C. C. 
 Southern Ry., 117 Fed. 741. 445. 
 
 [661] 
 
§ 756 ] Railroad Rate Regulation 
 
 of rates between two places is not of itself enough to justify 
 the conclusion that the higher rate is unreasonable, even 
 if the difference is not explained by the carrier. "The bill 
 in this case charges that the rates charged by the appellees 
 on goods shipped from St. Louis and Tennessee points to 
 Hampton, Fla., are unreasonably high in themselves, in 
 violation of section 1 of the Act to Regulate Commerce. As 
 we read the opinion of the Commission, filed as an exhibit 
 to the bill, the Commission did not find that the Hampton 
 rates were in and of themselves unreasonable, but found 
 argumentatively that they were too high, not as based 
 upon the matters to be considered in determining such 
 questions, as pointed out in United States v. Freight 
 Association,^' and Smyth v. Ames,^* but largely upon a 
 consideration of rates and charges between St. Louis, 
 Nashville and Chattanooga, and Jacksonville and Palatka, 
 Fla. The evidence submitted to the Commission, supple- 
 mented by evidence taken in the Circuit Court, is not 
 sufficient for us to find affirmatively that the Hampton 
 rates were in and of themselves unreasonable. The Com- 
 mission furnishes the authority for the proposition that 
 with regard to the exaction of unreasonable rates the bur- 
 den of proof is on the complainant.^' Certainly, the com- 
 plainant has failed in this instance to prove that the Hamp- 
 ton rates were in violation of the first section of the 
 Interstate Commerce Act." ^^ Hence it follows that if the 
 higher of two rates is not unreasonable -per se, the carrier 
 may remove a discrimination between two localities by 
 charging the higher rates to both.^' 
 
 2' 166 U. S. 331, 17 Sup. Ct. 540, in Interstate Com. Comm. v. Nash- 
 
 41 L. ed. 1007. viUe, C. & St. L. Ry., 120 Fed. 934. 
 " 169 U. S. 546, 18 Sup. Ct. 418, " In order to remove discrimina- 
 
 42 L. ed. 819. tion in rates on wool in favor of 
 ^'See Harding v. C, St. P., M. Lewiston, Me., against Skowhegan, 
 
 & 0. R. Co., 1 I. C. C. Rep. 104; Me., carriers advanced rates from 
 
 Brewer v. L. & N. R. R. Co., 71 1. C. Lawrence to Lewiston. Massachu- 
 
 C. Rep. 234. setts-Maine Wool Rates, 28 I. C. C. 
 
 '« The quotation is from Pardee, J., 396. 
 
 [662] 
 
DiSCKIMINATION BETWEEN LOCALITIES [ §§ 757, 758 
 
 § 767. Reasonableness of rate per se immaterial under 
 statute. 
 
 Under the provisions of such a statute as the Inter- 
 state Commerce Act, the fact that a rate is per se rea- 
 sonable does not disprove the charge that it is unlawful. 
 A rate may be relatively unreasonable and yet contain 
 none of the elements of absolute unreasonableness.^* If 
 rates are relatively unjust, so that undue preference is 
 afforded to one locality or imdue prejudice results to an- 
 other, the law is violated and its penalties incurred, al- 
 though the higher rate is not in itself excessive.^' The 
 right of one locality in that regard is not increased, nor is 
 the equal right of a competing locality diminished, by 
 municipal subscriptions which were advanced for the build- 
 ing of the road.^" 
 
 Topic B. General Principles of Statutory Regulation 
 
 § 758. What discrimination is not unlawful. 
 
 It is impossible to have a rate adjustment which places 
 all towns and cities upon an exact equality." The Act 
 clearly recognizes that some discrimination, either slight 
 in extent or the result of dissimilar conditions or circum- 
 stances beyond the carrier's control, may be permitted. 
 Only such as is undue or unreasonable is forbidden and 
 declared unlawful. ^^ Discriminations covered by sections 
 
 2SNew Pittsburgh Coal Co. v. B. & O. Ry., 7 I. C. C. Rep. 612; 
 
 H. V. Ry., 26 I. C. C. 121. Commercial & Industrial Ass'n of 
 
 ^ Knapp, Com., in Board of Trade Union Springs v. L. & N. Ry., 12 
 
 of Lynchburg v. Old Dominion S. S. I. C. C. 372; Indianapolis Freight 
 
 Co., 6 I. C. C. Rep. 632; Stacy Mer- Bureau v. C, C, C. & St. L. Ry., 15 
 
 cantile Co. v. M., St. P. & S. St. I. C. C. 504; Herbeck-Demer Co. 
 
 M. Ry., 18 I. C. C. 650; Morgan v. B. & O. Ry., 17 I. C. C. 88; 
 
 Grain Co. v. A. C. L. R. R. Co., 19 Loch Lynn Construction Co. v. 
 
 I. C. C. 460. B. & O. Ry., 17 I. C. C. 396; Railroad 
 
 '" Lincoln Board of Trade v. Commission of Nevada v. So. Pac. 
 
 Burlington & M. R. R. R., 2 Int. Ry., 21 I. C. C. 329; In re Advances 
 
 Com. Rep. 95, 2 I. C. C. Rep. 147. in Demurrage Charges, 25 I. C. C. 
 
 " Kindel v. N. Y., N. H. & H. Ry., 314; Louisiana Sugar Planters' Ass'n 
 
 15 I. C. C. 555. V. I. C. Ry., 31 I. C. C. 311; Eagle 
 
 " New York Produce Exchange v. Distillery v. L. H. & St. L. Ry., 32 
 
 [663] 
 
§ 758 ] Railroad Rate Regulation 
 
 3 and 4 of the Act, in so far as they result from the bona 
 fide action of the carrier in meeting circumstances and con- 
 ditions not of its own creation and which are reasonably 
 necessary, do not of necessity fall under the condemnation 
 of the law.'' It is recognized that within certain limits 
 a carrier is bound to protect its territory and make rates 
 which will foster enterprises upon its system, even though 
 the result is to discriminate against other enterprises of 
 a similar natiu-e elsewhere. But such discrimination must 
 not be undue.'* For instance, a carrier may not go so far 
 as to refuse to carry the products of competing industries 
 on connecting lines. '^ Whether it is undue is a question 
 of fact, not of law,'^ in the determination of which the 
 Commission is not clothed with arbitrary power. '^ Each 
 case must be judged upon its own merits,'' but the Com- 
 mission has held that in general any preference which is 
 conferred upon a city by the mere pohcy of the carrier 
 and not because of actual difference in conditions is un- 
 due." But if the prejudice arising out of it against one 
 person is not a cause of advantage to another it is not 
 undue. ^^ In passing upon the question, it is not only 
 
 I. C. C. 195. "Under the Interstate ceivers and Shippers' Ass'n of Cin- 
 
 Commerce Act, differential and dis- cinnati v. C, N. O. & T. P. Ry., 18 
 
 criminativerates are allowable so long I. C. C. 440. 
 
 as they are not unjust and do not op- '* Standard Lime & Stone Co. v. 
 
 erate unfairly, and the essence of the Cumberland Valley Ry., 15 I. C. C. 
 
 Act is that, whatever the rate, it shall 620. 
 
 be the same to aU persons similarly ™ United States v. Tozer, 37 Fed. 
 
 situated." Pittsburgh, etc., Ry. v. 369, 2 Int. Com. Rep. 597; State v. 
 
 Mitchell, 175 Ind. 196, 91 N. E. 735. Adams Express Co., 171 Ind. 138, 
 
 See also Cincinnati, N. O. & T. P. 85 N. E. 337; Merchants' Cotton 
 
 Ry. V. Interstate Commerce Commis- Press & Storage Co. v. I. C. Ry., 17 
 
 sion, 162 U. S. 184, 40 L. ed. 935, 16 I. C. C. 98. 
 
 Sup. Ct. 700, and Interstate Com- " Railroad Commission of Nevada 
 
 merce Commission v. Alabama Mid- v. So. Pac. Ry., 21 I. C. C. 329. 
 
 land Ry., 168 U. S. 144, 42 L. ed. ^ Chamber of Commerce of New- 
 
 414, 18 Sup. Ct. 45. port News v. So. Ry., 23 I. C. C. 345. 
 
 ''Pittsburg Plate Glass Co. v. "In re Application of Southern 
 
 P., C, C. & St. L. Ry., 13 I. C. C. 87. Pacific, 22 I. C. C. 366. 
 
 " Reliance Textile & Dye Works " Chicago Board of Trade v. A., T. 
 
 V. Southern Ry., 13 I. C. C. 48; Re- & S. F. Ry., 29 I. C. C. 438. 
 
 [664] 
 
Discrimination Between Localities [ § 759 
 
 legitimate, but necessary, to take into consideration, be- 
 sides the mere differences in charges, various elements, 
 such as the convenience of the public, the fair interest of 
 the carrier, the relative quantities or volume of the traffic 
 involved, the relative cost of the services and profit to the 
 company, and the situation and circumstances of the re- 
 spective customers with reference to each other." Dis- 
 crimination which might be unlawful under section 3 may 
 in some cases be justified because made in order to avoid 
 a violation of section 4.** 
 
 § 769. Discrimination which is not undue. 
 
 Discrimination cannot be considered undue within the 
 meaning of the Act unless it has some appreciable effect. 
 There may be some disproportion in rates for which the 
 carrier is responsible, and which possibly results in some 
 benefits to a given community as against its commercial 
 rival; but to be obnoxious to the law it must appear that 
 the preference and advantage in the one case, and the cor- 
 responding prejudice and disadvantage in the other, are 
 so appreciable and established with such a degree of cer- 
 tainty as to be justly declared unreasonable.*' In decid- 
 ing whether the discrimination complained of is imdue, 
 the Commission cannot indulge in speculation as to the 
 motives which actuated the carrier in fixing an adjustment 
 of freight rates as between various points of origin, but 
 can only determine upon the facts and conditions whether 
 or not the rates in question are unreasonable or unjustly 
 discriminatory.''* The fact that the complainant has been 
 prosperous, although a matter to be considered, does not 
 
 " Interstate Commerce Commis- Tifton v. Louisville & N. R. R., 9 
 
 sion V. Baltimore & O. R. R., 145 I. C. C. Rep. 160. 
 U. S. 263, 36 L. ed. 699, 12 Sup. Ct. « Atlanta Journal Co. v. S. A. L. 
 
 844, 4 Int. Com. Rep. 92; Interstate Ry., 28 I. C. C . 186. 
 Commerce Commission v. Chicago " Knapp, Com., in Commercial 
 
 G. W. Ry., 141 Fed. 1003; Lincoln Club of Omaha v. Chicago & N. R. 
 
 Board of Trade v. Missouri Pac. Ry., R., 7 I. C. C. Rep. 386. 
 2 Int. Com. Rep. 98, 2 I. C. C. 155; " Grand Junction Mining & Fuel 
 
 Co. V. C. M. Ry., 16 I. C. C. 452. 
 
 [665] 
 
§ 760 ] Railroad Rate Regulation 
 
 conclusively show that defendant's rates are not discrimi- 
 natory,*^ Nor can discrimination be predicated upon the 
 fact that complainant's competitors are able to under- 
 sell complainant.** A discrimination between localities 
 may be harmful and at the same time not constitute an 
 undue discrimination because of other factors, such as 
 railroad competition.*^ The Commission has held that the 
 most satisfactory test for ascertaining whether relative 
 injustice is being done one section as compared with an- 
 other is the relative earnings per car.** Another way of 
 showing undue prejudice and disadvantage under the 
 third section is by showing unreasonableness ia rate 
 under the first section and then comparing it with rates 
 to similarly located places.*' Comparisons between rail- 
 roads are of httle or no value as evidence of undue pref- 
 erence,^" but the value of the commodity concerned may be 
 an important factor. ^^ 
 
 § 760. Interdependence of rates to various localities. 
 
 The theory upon which the Act is administered is that 
 there is a certain interdependence in a schedule of rates, 
 and that rates to various related localities should not be 
 outrageously disproportionate. By this test it is not 
 enough that the rate charged a particular locality is not 
 unreasonable in itself; the requirement of the Act is that 
 there shall be no imdue preference or priority between locali- 
 
 *' Hitchman Coal & Coke Co. v. do not constitute undue prejudice. 
 
 B. & O. Ry., 16 I. C. C. 512. Nortii Fork Cannel Coal Co. v. 
 ■" Western Fruit Jobbers' Ass'n v. A. A. Ry., 25 I. C. C. 241. 
 
 C, R. I. & P. Ry., 27 I. C. C. 417. " Gund & Co. v. C, B. & Q. Ry., 
 Where rival mine operators have the 25 I. C. C. 326. 
 
 same freight rates to an equally *' Ozark Fruit Growers' Ass'n v. 
 accessible territory, the failure of one St. L. & S. F. Ry., 16 I. C. C. 106. 
 of them to sell in the near-by markets " Board of Trade of Carrollton v. 
 must be due either to a difference C. of G. Ry., 28 I. C. C. 154. 
 in the quality of the coal, the cost '"Sttinega Coal & Coke Co. v. 
 of operating, or the aggressiveness L. & N. Ry., 23 I. C. C. 17. 
 of the respective selling forces. These " Coke Producers' Ass'n of Con- 
 are disadvantages which can be re- nellsville v. B. & O. Ry., 27 I. C. C. 
 moved only by the complainant and 125. 
 
 [666] 
 
Discrimination Between Localities [ § 761 
 
 ties unless the circumstances and conditions are dissimilar. 
 These elementary principles were well set forth by the In- 
 terstate Commerce Commission in applying the Act in a 
 Minnesota case." "It is said that the rate from St. Cloud 
 is reasonable in and of itself. A rate can seldom be con- 
 sidered 'in and of itself.' It must be taken almost invari- 
 ably in relation to and in coimection with other rates. The 
 freight rates of this country, both upon different commodi- 
 ties and between different localities, are largely interde- 
 pendent, and it is the fact that they do not bear a proper 
 relation to one another, rather than the fact that they are 
 absolutely either too low or too high, which most often 
 gives occasion for complaint, and which is the ground of 
 complaint here. A rate of 12 cents per hundred pounds on 
 flour from St. Cloud to Duluth may be reasonable when 
 compared with a similar rate from Minneapolis. When 
 compared with a rate of 53^ cents from the latter place, 
 it is certainly prima facie grossly unreasonable. Minneapo- 
 lis and St. Cloud are competitors in the milling business, 
 and when this defendant charges the St. Cloud miller 12 
 cents per hundred pounds for transporting his flour from 
 St. Cloud to Duluth, while it charges the Minneapolis 
 miller but 5J^ cents for identically the same service plus 
 an additional haul of 60 miles, it is guilty of a discrimina- 
 tion against the St. Cloud shipper, which is not justified 
 by the circumstances of this case." But in order to show 
 undue preference, comparison is to be made between the 
 different rates of the same carrier. No undue discrimina- 
 tion is proved by the fact that a carrier maintains lower 
 rates from points on its line than other carriers maintain 
 on the same traffic from near-by points on their lines." 
 
 § 761. No vested right in preferential rates. 
 
 A rate which is unduly discriminatory should when dis- 
 covered be removed. A community can never acquire a 
 
 «» George Tileston Mill Co. v. " Stonega Coal & Coke Co. v. 
 
 No. Pac. Ry., 8 I. C. C. 354. L. & N. Ry., 23 I. C. C. 17. 
 
 [667] 
 
§ 761 ] Railroad Rate Regulation 
 
 vested right in an undue preference. Mere lapse of time 
 cannot be permitted to rob a locality of its right to relief 
 from a schedule which in view of changed conditions 
 would be a manifest discrimination if continued.^* To 
 remove an unjust preference an advance in rates may be 
 permitted ^^ or a reduction may be ordered.** A reduction 
 may also be suspended when the effect of such suspension 
 will be to prevent an unjust discrimination." In case of 
 any such changes the burden is then on the carrier to 
 adjust its rates in such a way as to meet the conditions 
 that will arise in consequence thereof,** and the Com- 
 mission in ordering the change does not thereby give its 
 approval to the necessary readjustment.*' When an un- 
 due discrimination is made to appear, the Commission 
 will not be deterred from ordering a change by fear of 
 disrupting commercial conditions,*" or by the fact that it 
 will lead to a disturbance of long-standing adjustments," 
 or interfere with a general scheme adopted by several 
 roads entering the same territory.*^ But a long-estabUshed 
 rate has a certain presumption in its favor, and the Com- 
 mission will give much weight to rates to which com- 
 mercial conditions have adjusted themselves,*^ and will pro- 
 
 " Mississippi River Case, 28 I. C. 491; Columbia Grocery Co. v. L. & 
 
 C. 47. N. Ry., 18 I. C. C. 502; Milburn 
 
 '5 Tantz Bros. & Co. v. L. V. Ry., Wagon Co. v. L. S. & M. S. Ry., 22 
 
 17 I. C. C. 167. I. C. C. 93; IndianapoUs Freight 
 
 s« Kindel v. N. Y., N. H. & H. Ry., Bureau v. C, C, C. & St. L. Ry., 26 
 
 15 I. C. C. 555; Scott Paper Co. I. C. C. 53; Wickwire Steel Co. v. 
 
 V. Penn. Ry., 26 I. C. C. 601. N. Y. C. & H. R. Ry., 27 I. C. C. 168. 
 
 " Board of Trade of Chicago v. '' Black Mountain Coal Land Co. 
 
 I. C. Ry., 26 I. C. C. 545. v. Southern Ry., 15 I. C. C. 286. 
 
 '» Baer Brothers' Mercantile Co. v. " Ohio Allied Milk Product Ship- 
 
 M. P. Ry., 17 I. C. C. 225; Chat- pers v. E. Ry., 21 I. C. C. 522; 
 
 tanooga Feed Co. v. A. G. S. Ry., Chattanooga Feed Co. v. A. G. S. 
 
 22 I. C. C. 480. Ry., 22 I. C. C. 480; Chamber of 
 
 " In re Advances on Manganese Commerce of New York v. N. Y. C. 
 
 Ore, 25 I. C. C. 663. & H. R. Ry., 24 I. C. C. 55; Winsor 
 
 "» Middlesboro Board of Trade v. Coal Co. v. C. & A. Ry., 52 Fed. 
 
 L. & N. Ry., 27 I. C. C. 14. 716. But compare Matthews v. 
 
 "' Kansas City Transportation Bu- Board of Corp. Commissioners, 106 
 
 reau v. A., T. & S. P. Ry., 15 L C. C. Fed. 7. 
 
 [668] 
 
Discrimination Between Localities [ § 762 
 
 ceed with caution when a change of one rate will neces- 
 sitate a widespread readjustment." The carrier also must 
 pay respect to existing conditions; and where an indus- 
 try has been required to pay for a long period of time 
 rates of freight on raw material which bear certain relations 
 to rates charged to competitors at other points, a marked 
 change in such rate relations in favor of competing indus- 
 tries cannot be made without an attendant presumption of 
 undue discrimination.*^ 
 
 § 762. Discrimination explained by local circumstances. 
 
 Circumstances may, however, so explain the difference 
 between the rates compared as to deprive the lower of any 
 bearing on the higher. "It is earnestly contended by coun- 
 sel for the appellant that the rates at the longer-distance 
 points being shown to be reasonably remunerative, and the 
 rates at the shorter-distance points being admitted to be 
 higher, the latter must, of logical necessity, be found to be 
 unreasonably high, and therefore unreasonable and unjust, 
 and such as give an undue preference to the longer-distance 
 points, and subject the shorter-distance points to an undue 
 and unreasonable prejudice and disadvantage. It will be 
 perceived that this argument excludes all consideration of 
 the force of competition, and ignores its presence at the 
 longer-distance points and its comparative absence from 
 the shorter-distance points. What is a reasonable action, 
 or a reasonably remunerative rate for carriage, at a given 
 time and place, necessarily has relation to the circum- 
 stances and conditions bearing upon the actor or upon the 
 carrier at the time and place." ** As will be seen in the 
 subsequent discussion, competition is the circumstance 
 which is most commonly relied on to justify discrimina- 
 tion; but any of the circumstances which were discussed 
 
 " Southwestern Shippers' Traffic ical Works v. M. C. Ry., 13 I. C. C. 
 Ass'n V. A., T. & S. F. Ry., 24 I. C. C. 357. 
 570. ^ McCormick, J., in Interstate 
 
 »' Howard Mills Co. v. Mo. Pac. Com. Comm, v. Western & A. R. R., 
 Ry., 12 I. C. C. 258; Detroit Chem- 93 Fed. 83. 
 
 [6691 
 
§ 763 ] Railroad Rate Regulation 
 
 in former chapters as affecting the distance-charge would 
 be of equal pertinence. An apparent discrimination may 
 therefore upon an examination of all the circumstances 
 prove to be a reasonable and equitable adjustment. 
 
 § 763. Distance as a factor in rate making. 
 
 In comparing rates from two points to a common des- 
 tination, distance is the first factor to consider, though it 
 is not controlling nor always the most important. As has 
 often been stated, rates are not made on a ton-mile basis, 
 and they cannot be expected to bear an exact proportion 
 to the distance.*^ Rates may sometime be made on an 
 arbitrary mileage basis; but the commerce of the country 
 is now established on a different basis, and the Commission 
 at this time declines to imdertake such a revolution as a 
 change to a mileage basis would involve.** The Commis- 
 sion has held that in the case of long hauls, ranging from 
 650 to 1245 miles, a considerable addition in mileage could 
 well be overlooked, especially where the necessity exists of 
 maintaining points of production and consumption on an 
 equality with their competitors.^' If, however, the locaU- 
 ties are neighboring ones and the conditions substantially 
 the same, distance should govern.™ Spokane was right in 
 
 "■ LaCroase M. & J. Union v. C, M. Des Moines Committee v. C, M. & 
 
 & St. P. Ry., 2 Int. Com. Rep. 9, 1 1. St. P. Ry., 18 I. C. C. 73; Omaha 
 
 C. C. 629; Business Men's Association Grain Exchange v. C. & N. W. Ry., 
 
 V. C, S. P. N. & O. Ry., 2 Int. Com. 19 I. C. C. 424; Interstate Commerce 
 
 Rep. 41, 2 I. C. C. 52; Business Commission v. Union Pac. Ry., 222 
 
 Men's Association v. C. & N. W. Ry., U. S. 541, 32 Sup. Ct. 108, 56 L. ed. 
 
 2 Int. Com. Rep. 48, 2 I. C. C. 73; 308. 
 
 Lincoln Board ot Trade v. B. & N. «' Wichita Board of Trade v. A. & 
 
 Ry., 2 Int. Com. Rep. 95, 2 I. C. C. S. Ry., 29 I. C. C. 376. 
 
 147; Poughkeepsie Iron Co. v. N. Y. *' Lumber Rates Texas, etc., to 
 
 C. & H. R. Ry., 3 Int. Com. Rep. Oklahoma and Missouri, 28 I. C. C. 
 
 248, 4 I. C. C. 195; James & M. B. 471. See also William Co. v. U. S. & 
 
 Co. V. C, N. O. & T. P. Ry., 3 Int. P. Ry., 16 I. C. C. 482. 
 
 Com. Rep. 682; Board of Railway " James v. E. T., V. & G. Ry., 2 
 
 Commissioners v. A., T. & S. F. Ry., Int. Com. Rep. 609, 3 I. C. C. 225; 
 
 8 I. C. C. Rep. 304; Kansas City Eau Claire Board of Trade v. C, M. 
 
 Transportation Bureau v. A., T. & & St. P. Ry., 4 Int. Com. Rep. 65, 
 
 S. F. Ry., 16 I. C. C. 195; Greater 6 I. C. C. 264; Hill v. N. C. & St. L. 
 
 [670] 
 
Discrimination Between Localities [ § 764 
 
 its contention that a schedule which permits merchandise 
 to be hauled from the east over the Cascade mountains to 
 Seattle and back again to the consumer on the east side of 
 that range must be wrong.'^ In any case the relative 
 difference should not be arbitrary or unreasonable." 
 The comparative distance should be tested by the distance 
 over the shortest available route from the place of ship- 
 ment to the point in question." 
 
 § 764. Difference between through and local rates. 
 
 As a general rule the through rate should be less than 
 the sum of the intermediates on accoimt of the fewer 
 terminal services involved.'* Hence it follows that a 
 through rate over several roads may be proportionally 
 smaller than the local rate over one of the roads; and in 
 the division of a through rate one road may, therefore, 
 properly accept a smaller amount than it would charge for 
 a carriage to or from its own terminus. Such a propor- 
 
 Ry., 6 I. C. C. Rep. 343; Brewer v. 
 L. & N. Ry., 7 I. C. C. Rep. 224; 
 In re Alleged Violation of Act, 8 I. C. 
 C. Rep. 290; Union Tanning Co. v. 
 Southern Ry., 26 I. C. C. 159; Edgar 
 & Sons V. L. & N. Ry., 26 I. C. C. 
 181; Cherokee Lumber Co. v. A. C. 
 L. Ry., 27 I. C. C. 438; Traffic Bu- 
 reau of Nashville v. L. & N. Ry., 28 
 I. C. C. 533; Kansas Wholesale 
 Grocery Co. v. A. & W. Ry., 32 I. C. 
 C. 139. 
 
 " City of Spokane v. No. Pac. Ry., 
 19 I. C. C. 162. 
 
 " Toledo Produce Exchange v. L. 
 S. & M. S. Ry., 3 Int. Com. Rep. 830, 
 
 5 I. C. C. 166; Gerke Brewing Co. 
 V. L. & N. Ry., 4 Int. Com. Rep. 267, 
 
 6 I. C. C. 596; Rea v. M. & O. Ry., 
 
 7 I. C. C. Rep. 43. 
 
 " Milwaukee Chamber of Com- 
 merce V. C, M. & St. P. Ry., 7 I. C. 
 C. Rep. 481. 
 
 '* Montgomery Freight Bureau v. 
 W. Ry. of A., 14 I. C. C. 150; Wil- 
 Uams Co. v. V., S. & P. Ry., 16 1. C. C. 
 482; Winona Carriage Co. v. Penn. 
 Ry., 18 I. C. C. 334; Bott Bros. Mfg. 
 Co. V. C, B. & Q. Ry., 19 I. C. C. 
 136; Railroad Commission of Nevada 
 V. N. C. O. Ry. & S. V. Ry., 22 I. C. 
 C. 205; Bluefield Shippers' Ass'n v. N. 
 & W. Ry., 22 I. C. C. 519; Lumber- 
 men's Exchange of St. Louis v. A. & 
 S. R. Ry., 24 I. C. C. 220; Raih-oad 
 Commission of Oregon v. So. Pac. 
 Ry., 24 I. C. C. 273; Appalachia 
 Lumber Co. v. L. & N. Ry., 25 1. C. C. 
 193; In re Advances on Potatoes, 25 
 I. C. C. 247; Jubitz v. So. Pac. Ry., 
 27 I. C. C. 44; Washington Milling 
 Co. v. N. & W. Ry., 27 I. C. C. 546; 
 Iowa State Board v. A. E. Ry., 28 
 I. C. C. 193; Boston Chamber of 
 Commerce v. A., T. & S. F. Ry., 28 
 I. C. C. 230. 
 
 [671] 
 
§764] 
 
 Railboad Rate Regulation 
 
 tional rate cannot be used as a conclusive standard by 
 which to measure the reasonableness of the intermediate 
 rate/° nor is it an undue preference against its own 
 terminus.'* Therefore, the inland portion of export rates 
 may, without undue discrimination, be less than the 
 domestic rate," and conversely, a carrier may lawfully 
 make an import rate from a port in the United States to 
 an interior destination less than its domestic rate over the 
 same route.''* But in order to justify such a practice, it 
 must appear when the commodity was delivered to the 
 domestic carrier that it was intended for export. Otherwise 
 the domestic rate must be charged.'' A shipper's "state of 
 mind in relation to the goods — that is, his intention to ex- 
 port them and his partial preparation to do so" — -does not 
 make them export traffic.^" But the rates to a given port 
 may not vary because the ultimate destination of the 
 goods is different.*^ As between two points on a con- 
 necting line, it would seem that the carrier should not 
 
 '* Southern Illinois Millers' Ass'n 
 V. L. & N. Ry., 23 I. C. C. 672; 
 Southwestern Shippers' Traffic Ass'n 
 V. A., T. & S. F. Ry., 24 I. C. C. 570; 
 Wichita Board of Trade v. A., T. & 
 S. F. Ry., 25 I. C. C. 625; New Pitts- 
 burgh Coal Co. V. H. V. Ry., 26 I. C. 
 C. 121; Board of Trade of Winston- 
 Salem V. N. & W. Ry., 26 I. C. C. 
 146; Pulp and Paper Manufacturers' 
 Ass'n V. C, M. & St. P. Ry., 27 I. C. 
 C. 83; Sandstone, Minn.-Missouri 
 River Building Stone Rates, 28 I. C. 
 C. 269. 
 
 '* Parsons v. Chicago & N. W. Ry., 
 63 Fed. 903, 11 C. C. A. 489, affirmed, 
 167 U. S. 447, 42 L. ed. 231, 17 Sup. 
 Ct. 887; Tozer v. United States, 52 
 Fed. 917, 4 Int. Com. Rep. 245; 
 Crews V. Richmond & D. R. R., 1 Int. 
 Com. Rep. 703, 1 I. C. C. 401; Mc- 
 Morran v. Grand Trunk Ry., 2 
 Int. Com. Rep. 604, 3 I. C. C. 
 i52. 
 
 " Texas & Pac. Ry. v. Interstate 
 Commerce Commission, 162 U. S. 
 197, 40 L. ed. 940, 16 Sup. Ct. 666; 
 Kemble v. Boston & A. R. R., 8 
 I. C. C. Rep. 110; Re Export and 
 Domestic Rates, 8 I. C. C. Rep. 214, 
 modifying the view earlier expressed 
 in Detroit Board of Trade v. Grand 
 Trunk Ry., 2 Int. Com. Rep. 199, 
 2 I. C. C. 315; New York Produce 
 Exch. V. New York C. & H. R. R., 
 2 Int. Com. Rep. 553, 3 I. C. C. 137; 
 Erickson Co. v. C, M. & St. P. Ry., 
 29 I. C. C. 414. 
 
 ™ Joseph UUman v. Adams Express 
 Co., 14 I. C. C. 340; New Orleans 
 Board of Trade v. I. C. Ry., 23 I. 
 C. C. 465. 
 
 " Port Arthur MilUng Co. v. T. & 
 S. F. Ry., 28 I. C. C. 696. 
 
 «> Coe V. Erroll, 116 U. S. 517, 29 
 L. ed. 715, 6 Sup. Ct. 475. 
 
 " New Orleans Board of Trade v. 
 I. C. Ry., 23 I. C. C. 465. 
 
 [672] 
 
Discrimination Between Localities [ § 765 
 
 discriminate, but accept the same amomit as its share of 
 the through charge on each.*^ And similarly if a lower 
 through or export rate is allowed to one station on a 
 railroad, a similar rate should be allowed to other sta- 
 tions.*' 
 
 § 766. Railroad rates tend toward a cost basis. 
 
 Rate regulation upon legal principles, basing the rate 
 charged ultimately upon the cost of the service, will not 
 in the case of railroads, as many fear, mean an immediate 
 recourse to a mileage basis. The chief reason that it can 
 never come to that basis altogether is that mere mileage, 
 as all authorities recognize, never measures the cost of the 
 service. It is fimdamental that a long haul is relatively 
 cheaper per ton than a short haul.*^ This is all the clearer 
 if the shorter haul has imusual physical obstacles making 
 it actually more expensive; it will then justify a lower 
 rate for a longer haul.*^ Moreover, the less expensive ter- 
 minals may make the longer route the cheaper, so that 
 sometimes business may be better handled if great volumes 
 of low-grade freights are diverted from congested points 
 by differential rates. It is also often justifiable to group 
 together various stations for convenience in making rates. 
 
 '2 Calloway v. L. & N. Ry., 7 I. C. Northern Pacific Ry. Co. v. Keyes, 
 
 C. Rep. 431. 91 Fed. 47; Southern Ry. Co. v. St. 
 
 "' Re Export and Domestic Rates, Louis, H. & G. Co., 156 Fed. 728; 
 
 8 L C. C. Rep. 214; Chicago F. P. C. St. Louis & S. F. Ry. v. Hadley, 168 
 
 Co. V. Chicago & N. W. Ry., 8 1. C. C. Fed. 317; Missouri, K. & T. Ry. Co. 
 
 Rep. 316. V. Love, 177 Fed. 493. 
 
 ^* In the Federal courts particularly '* The possibility that the actual 
 there have never been any doubts cost of the shorter transportation be- 
 that this rule justified the making of tween certain points may be greater 
 a lower rate per ton-mile for a longer than that of a longer transportation 
 haul. See among many others: Union between other points is made much of 
 Pacific Ry. Co. v. United States, 117 in the EngUsh cases. See among 
 U. S. 355, 29 L. ed. 920, 6 Sup. Ct. many others: Bellsdyke Coal Co. v. 
 772; East Tennessee, V. & G. Ry. North British Ry. Co., 2 Ry. & C. Tr. 
 Co. V. Interstate Com. Comm., 181 Cas. 105; Coal Co. v. Caledonia 
 U.S. 1,45L. ed. 719, 21Sup.Ct. 516; Ry. Co., 2 Ry. & C. Tr. Cas. 
 Tozer v. United States, 52 Fed. 917; 39. 
 
 43 [ 673 ] 
 
§ 766 ] Raileoad Rate Regulation 
 
 These and many other considerations may be set beside the 
 mere mileage involved. The most satisfactory comparison 
 to ascertain whether relative injustice is being done to one 
 section as against another is through the earnings per car.^^ 
 But undoubtedly rate regulation in the future will pay more 
 attention to operating cost and mileage tables than in the past. 
 
 § 766. Various systems of making distance rates. 
 
 These statutory provisions affect rate making only to a 
 certain extent. "There are four principal methods of 
 making rates to locahties: that prevaihng in the Tnmk 
 Line Territory, in practical comphance with the fourth 
 section; that in the Southeastern Territory, where basing 
 points or trade centers are recognized to which through 
 rates are made and the local rates are added for rates to 
 tributary territory. To the Pacific coast, water competi- 
 tion has brought about low rates, and a combination of 
 these with the local rate back fixes the rates for the inte- 
 rior moimtain territory points. In the case under con- 
 sideration rates are made to Colorado common points with 
 Denver, Colorado Springs, Pueblo and Trinidad named as 
 such points in the schedules, but there are several hundred 
 smaller intermediate points to which the rates apply, so 
 that the system is nearly the equivalent of a blanket rate, 
 or a like rate for a large territory. The coast system of 
 rate making by adding the local back to the low through 
 rate arouses complaints, for the reason that the shortest 
 haul where the system prevails has the highest rate; that 
 is, rates are lower the nearer to the coast terminal — an 
 apparent violation of the fom-th section. The basing point 
 system arouses friction, in that rival centers and shorter- 
 distance points demand like privileges, and the blanket 
 rate finds objectors where an important point is ambitious 
 to supply the surroimding territory. Each has its ad- 
 vantages and each is open to some objections." *^ The 
 
 ** Ozark Fruit Growers' Ass'n v. ^ Quoted from Kindel v. Boston & 
 
 St. L. & S. F. Ry., 16 I. C. C. 106. A. R. R., 11 1. C. C. Rep. 495. 
 
 [ 674 ] 
 
Discrimination Between Localities [ § 767 
 
 system of basing points was held illegal by the Commis- 
 sion,^ but in this it was not sustained by the Supreme 
 Court.** Somewhat inconsistently the Commission has 
 always favored group rates/" whereby competition in 
 commodities carried is preserved.'^ 
 
 § 767. Btirden upon the railroad to defend discriminatory 
 rates. 
 Whenever a carrier estabUshes a discriminatory rate, it 
 assumes the burden of justifying it. Every discriminatory 
 rate is prima facie unlawful, and it can be sustained only 
 by showing that it is authorized by some provision of the 
 Act. The burden of showing this rests upon the carrier. 
 In a case involving the rates to Boston from Fredericton 
 and Fairfield, two iDlaces situated upon different branches 
 of the same road, Commissioner Veazey said: "A depar- 
 ture from equal mileage rates on different branches or 
 divisions of a road is not conclusive that such rates are 
 unlawful, but the burden is on the company making such 
 departure to show its rates to be reasonable when disputed. 
 The essential question here is one of relatively reasonable 
 rates; not whether either rate is reasonable in itself. It is 
 the effect of the carriers' action at one point upon the 
 legitimate business prosperity of another point, which is 
 the vital point in this controversy. If the present Frederic- 
 ton rate does not actually result in profit, the carriers 
 should not seek to control or stimulate trafiic from that 
 point by making the rate so low; and if they carry for 
 unusually small compensation from that place they do so 
 
 ** Hamilton v. Chattanooga, R. & *" Interstate Commerce Commis- 
 
 C. R. R., 3 Int. Com. Rep. 482, 4 sion v. Louisville & N. R. R., 190 
 
 I. C. C. 686; Perry v. Florida, C. & U. S. 273, 47 L. ed. 1047, 23 Sup. Ct. 
 
 P. R. R., 3 Int. Com. Rep. 740, 5 1. C. 687. 
 
 C. 97; HiU v. NashviUe, C. & S. L. » HoweU v. New York, L. E. & W. 
 
 Ry., 6 I. C. C. Rep. 343; Gustin v. R. R., 2 Int. Com. Rep. 162, 2 I. C. 
 
 Atchison, T. & S. F. R. R., 8 I. C. C. C. Rep. 272. 
 
 Rep. 277; Hampton Board of Trade " Milk Dealers' Ass'n v. Dela- 
 
 V. Nashville, C. & S. L. Ry., 8 I. C. ware, L. & W. Ry., 7 I. C. C. Rep. 
 
 C. Rep. 503. 92. 
 
 [675] 
 
§768: 
 
 Raileoad Rate Regulation 
 
 under the plain injunction of the law that their action 
 must not inflict undue prejudice or disadvantage upon 
 other communities or persons. When a carrier engages in 
 transportation for which, by reason of competitive condi- 
 tions or for purposes of its own, it receives less rates from 
 some patrons and at some localities, it accepts the legal 
 obligation to give impartial service to other patrons and 
 at other localities that sustain similar relations to the 
 traffic." ^2 
 
 Topic C. What Constitutes Undue Prejudice 
 
 § 768. Provisions against undue prejudice. 
 
 It is not enough under the Act that transportation 
 charges to a certain place should be reasonable in them- 
 selves. Rates must also be relatively reasonable as com- 
 pared with those to other places on the same line in order 
 to prevent unlawful discrimination.*' Every community is 
 entitled to a non-discriminatory rate.®* The fundamental 
 
 32 Logan V. Chicago & N. W. R. 
 Co., 2 Int. Com. Rep. 431, 2 I. C. C. 
 Rep. 604. See also Manufacturers & 
 Jobbers' Union v. Minneapolis & St. 
 L. R. Co., 3 Int. Com. Rep. 115, 4 
 I. C. C. Rep. 79; Alpha Portland 
 Cement Co. v. B. & O. Ry., 22 1. C. C. 
 446. 
 
 3* Boards of Trade Union v. Chi- 
 cago, M. & S. P. Ry., 1 Int. Com. 
 Rep. 608; Detroit Board of Trade v. 
 Grand Trunk Ry., 2 Int. Com. Rep. 
 199, 2 I. C. C. 315; Re Tariffs of 
 Transcontinental Lines, 2 Int. Com. 
 Rep. 203, 2 I. C. C. 324; Milwaukee 
 Chamber of Commerce v. Flint & P. 
 M. R. R., 2 Int. Com. Rep. 393, 2 I. 
 C. C. 553; Manufacturers' & J. 
 Union v. Minneapolis & S. L. Ry., 3 
 Int. Com. Rep. 115, 4 I. C. C. 79; 
 Lynchburg Board of Trade v. Old 
 Dominion S. S. Co., 6 I. C. C. Rep. 
 632; Phillips v. Louisville & N. R. R., 
 8 I. C. C. Rep. 93; Black Mountain 
 
 [676] 
 
 Coal Land Co. v. S. Ry. Co., 15 I. 
 C. C. 286; Board of Trade of Winston- 
 Salem V. N. & W. Ry. Co., 16 I. C. C. 
 12; In re Investigation of Rates on 
 Meats, 22 I. C. C. 160; Lumbermen's 
 Exchange of St. Louis v. A. & S. R. 
 Ry., 24 I. C. C. 220; Baker v. Cum- 
 berland Valley Ry., 14 I. C. C. 568. 
 When from a geographical stand- 
 point two rate groups are correspond- 
 ing timber-producing sections, they 
 should take the same rates. Big 
 Blackfoot Milling Co. v. N. P. Ry. 
 Co., 16 I. C. C. 173. 
 
 "* R. R. Commission of Kansas v. 
 A., T. & S. F. Ry., 22 I. C. C. 
 407; Topeka Traffic Ass'n v. A. & 
 V. Ry., 27 I. C. C. 428: "Justice 
 cannot be done to Nevada unless 
 Nevada points are put on a practical 
 parity with points in eastern Wash- 
 ington and eastern Oregon." R. R. 
 Commission of Nev. v. S. P. Co., 19 
 I. C. C. 238. 
 
Discrimination Between Localities [ § 768 
 
 principle of the Act is one of fair play.'^ Hence a carrier 
 may not give preferential rates to shippers or commodities 
 or localities, even though by so doing it would develop 
 the greatest amount of traffic for itself. A carrier which 
 has built up a seaport of its own may not discriminate in 
 favor of that port,'" nor may it build a rate wall around 
 one point in order to advance the interests of a competing 
 point,"^ nor by arbitrary adjustment of rates determine 
 where wheat shall be milled or flour shall be marketed,'* 
 nor may it foster the industries upon its own system by 
 undue discrimination against industries at points on other 
 systems,'' nor make rates whereby the jobbers in a given 
 city are enabled to extend their trade, ^ nor favor one city 
 at the expense of another as a mere matter of railroad 
 poUcy,^ or because it is an assembling point for freight,' 
 nor retain to itself the lumber market at points on its 
 own line for the benefit of producing points thereon to the 
 exclusion of producing points on other lines, ^ nor dis- 
 criminate in favor of a point where it maintains a mar- 
 ket.^ Undue discrimination is not confined to transporta- 
 tion charges, but may be found in demurrage charges," 
 
 '^ Mobile Chamber of Commerce Commissioners v. A. E. Ry., 28 
 
 V. M. & O. Ry. Co., 23 I. C. C. I. C. C. 193. 
 
 417. ■■ Lumber Rates Texas, etc., to 
 
 " Interstate Commerce Commis- Oklahoma & Missouri, 28 I. C. C. 
 
 sion V. L. & N. Ry., 118 Fed. 613. 471; Aransas Pass Channel & Dock 
 
 " Alabama Coal Operators' Ass'n Co. v. G. H. & S. A. Ry., 27 I. C. 
 
 V. So. Ry., 21 1. C. C. 230; Indianap- C. 403; but see also Avery Mfg. Co. 
 
 olis Freight Bureau v. C, C, C. & St. v. A., T. & S. F. Ry., 16 I. C. C. 
 
 L. Ry. Co., 26 I. C. C. 53; Aran- 20. Western traffic may not be ex- 
 
 sas Pass Channel & Dock Co. v. G. terminated in a desire to serve the 
 
 H. & S. A. Ry., 27 I. C. C. 403. Oklahoma coal industry. Wichita 
 
 " Valley Flour Mills v. A., T; & Falls System Joint Coal Rate Cases, 
 
 S. F. Ry. Co., 16 I. C. C. 73. 26 I. C. C. 215. 
 
 •' Reliance Textile & Dye Works v. ^ Wilson Produce Co. v. Pennsyl- 
 
 S. Ry. Co., 13 I. C. C. 48. vania Ry. Co., 16 I. C. C. 116. 
 
 ' In re Advances on Knitting Fac- ' Pennsylvania Miller's State Ass'n 
 
 tory Products, 25 I. C. C. 634. v. Philadelphia & Reading Ry. Co., 
 
 2 In re Application of Southern 81. C. C. 531; Galveston Commercial 
 
 Pacific Co., 22 I. C. C. 366. Ass'n v. A., T. & S. P. Ry., 25 I. C. 
 
 » Iowa State Board of Raih-oad C. 216. 
 
 [677] 
 
§ 768 ] Railroad Rate Regulation 
 
 or milling-in-transit charges/ or in the granting of transit 
 privileges at one point which are denied at another,* 
 or in the allowance of elevator charges at one point and 
 not at another,' or in the granting of round-trip and 
 week-end fares to one. point which are refused to others,^" 
 or in making joint or through rates at one point and not at 
 another," or in performing a switching service at one 
 point which is refused at another, ^^ or in attempting to 
 make the rate depend on whether the goods were brought 
 to the place of shipment by the defendant carrier. ^^ Where 
 the rate to an intermediate point is not shown to be 
 unreasonable in itself and there is no competition between 
 such point and a farther distance point enjoying a lower 
 rate from the same point of origin, section 3 is not vi- 
 olated." Nor can a complaint alleging undue prejudice 
 against a city in that it is deprived of joint rates be sus- 
 tained when the joint rates have been canceled at the 
 points alleged to have been -unduly preferred." No dis- 
 crimination can be found in favor of a point to which the 
 commodity involved never moved, ^^ nor can discrimination 
 against a distributing point be predicated merely upon 
 the fact that the combination of in-bound and out-bound 
 rates on such distributing point exceeds the combination on 
 a competitive distributing point. ^'' An undue discrimina- 
 
 ' Spiegle & Co. v. So. Ry., 19 « Beach v. A. A. R. R. Co., 26 
 
 I. C. C. 522. I. C. C. 410. 
 
 * Sondheimer Co. v. I. C. Ry. Co., '• Coal Rates on the Stony Fork 
 
 20 1. C. C. 606. Granting Los Angeles Branch, 26 I. C. C. 168. 
 
 terminal rates because of water com- '^ Alan Wood, Iron & Steel Co. v. 
 
 petition at San Pedro and refusing P. Ry., 22 I. C. C. 540. 
 
 such rates at San Pedro constituted '' Bascom Co. v. A., T. & S. F. Ry., 
 
 unlawful discrimination. Harbor 17-1. C. C. 354. 
 
 City Wholesale Co. of San Pedro v. " Kellogg Toasted Corn Flake Co. 
 
 So. Pac. Ry., 19 I. C. C. 323. v. M. C. Ry., 24 I. C. C. 604. 
 
 ° City Council of Atchison v. Mo. '* Baker Commercial Club v. O. W. 
 
 Pac. Ry., 12 I. C. C. Ill; Duncan & R. R. & N. Co., 25 I. C. C. 281. 
 
 Co. V. N. C. & St. L. Ry., 16 I. C. C. « Consumers' Ice Co. v. A., T. & 
 
 590; Suffern Grain Co. v. I. C. Ry., S. P. Ry., 18 I. C. C. 277. 
 
 22 I. C. C. 178. " In re Advances on Knitting Fac- 
 tory Products, 25 I. C. C. 634. 
 [ 678 ] 
 
DiSCEIMINATION BETWEEN LOCALITIES [ § 769 
 
 tion against a given point may be effected as well by 
 a joint rate as by a one-line rate; and the carrier that is a 
 party to a joint rate is no less responsible when the dis- 
 crimination under such rate can be controlled by it, than it 
 would be in similar circumstances under its own one-line 
 rate,^* but it is not responsible for rates made by a con- 
 necting road." If a joint rate is made with a carrier in a 
 foreign country, and the portions of the combination rate 
 made by the American carrier are just and reasonable, any 
 discrimination that exists must be due to the foreign carrier, 
 over whom the Commission has no jurisdiction.^ Where 
 one railroad is owned by another, although operated 
 entirely separately, the Commission is supposed to regard 
 the two railroads as one in determining whether the rates 
 established by them unduly discriminate between different 
 sections.^' In other words, the test of discrimination is the 
 ability of one of the carriers participating in a through 
 route to put an end to the discrimination by its own 
 act.^^ 
 
 § 769. Discritnination resulting from intrastate rates — the 
 Shreveport case. 
 The discrimination with which the Commission has had 
 most frequent occasion to deal was that resulting from 
 the act of the carrier. In fact it had become almost 
 axiomatic that if the carrier was not a free agent, — ^if 
 its action was forced by conditions which it could not 
 control, or was compelled by pubMc authority, — then the 
 resulting discrimination was not one for which the carrier 
 could be held responsible. Hence in a proceeding attack- 
 ing a rate adjustment between various competitive coal 
 fields to a large number of consuming centers, the Com- 
 
 " Rates from Walsenburg Coal ^' Receivers' & Shippers' Ass'n of 
 
 Field, 26 I. C. C. 85. Cincinnati v. C, N. O. & T. P. Ry., 
 
 '» Crews V. R. & D. Ry., 1 1. C. C. 18 I. C. C. 440. 
 
 R. 703, 1 1. C. C. 401. " Elevator Allowances at St. Louis 
 
 ™ Fullerton Lumber & Shingle Co. and East St. Louis, 30 I. C. C. 696. 
 V. B. B. & B. C. Ry., 25 I. C. C. 376. 
 
 [679] 
 
§ 769 ] Railroad Rate Regulation 
 
 mission held that if a purely State rate to those centers 
 was involved, it was powerless to make an affirmative 
 order, although it might properly note the existence of 
 discrimination.^' This was bound to give rise to an awk- 
 ward situation, for where jobbing centers are situated near 
 State lines, an advance of the interstate charge and the 
 retention of the existing charge on State shipments must 
 necessarily result in discrimination against the former.^* 
 The whole matter has now been settled in a most satis- 
 factory manner by the recent decision of the Supreme 
 Court in the Shreveport case.^* Complaint was made that 
 a carrier operating between DaUas, Texas, and Shreveport, 
 Louisiana, made rates eastward from Dallas to other 
 Texas poiots much lower than the rates from Shreveport 
 to those points, although the distance from Shreveport 
 might be considerably less. For instance, the rat« on 
 wagons from Dallas to Marshall, Texas, a distance of 
 147.7 nules, was 36.8 cents, while from Shreveport to 
 Marshall, a distance of 42 miles, it was 56 cents. The 
 defense of the carrier was that its rates between Texas 
 points were fixed by the Texas RaUroad Commission, and 
 that such rates were outside the jurisdiction of the Inter- 
 state Commerce Commission. The latter held that while 
 intrastate rates might be beyond its control, the resulting 
 discrimioation against points in other States was not; 
 and it ordered that all rates between Dallas and Shreve- 
 port be put upon a distance basis and so adjusted as to 
 avoid discrimination. The carrier appealed on the groimd 
 that since the discrimination found by the Commission 
 to be unjust arose out of the relation of intrastate rates 
 maintained imder State authority to interstate rates that 
 have been upheld as reasonable, its correction was beyond 
 
 » Wilmington Tariff Ass'n v. C. P. -* In re Rates for Single Packages, 
 
 & V. A. Ry., 9 I. C. C. 48; Andy's 22 L C. C. 328. 
 Ridge Coal Co. v. Southern Ry., -' Houston & Texas Ry. v. United 
 
 18 I. C. C. i05; Saunders & Co. v. States, 2.34 U. S. 342, .58 L. ed. 1341, 
 
 Southern E.xpress Co., 18 I. C. C. 34 Sup. Ct. 8.33. 
 415. 
 
 [680] 
 
Discrimination Between Localities [ § 770 
 
 the Commission's power. This contention was not sus- 
 tained. The Supreme Court, speaking through Mr. Jus- 
 tice Hughes, said, "Wherever the iaterstate and intrastate 
 transactions of carriers are so related that the government 
 of the one involves the control of the other, it is Congress, 
 and not the State, that is entitled to prescribe the final 
 and dominant rule." Congress has "the power to foster 
 and protect interstate commerce, and to take all measures 
 necessary and appropriate to that end, although intrastate 
 transactions of interstate carriers may thereby be con- 
 trolled." The court also found that section 3 of the Act 
 vested the Commission with power to make the order in 
 question. This decision is directly in line with the previous 
 decisions of the court holding that interstate commerce 
 is a unit subject in all its parts to Federal control. 
 
 § 770. Discrimination by means of rate adjustments. 
 
 The rules against discrimination apply not only to rate 
 schedules imposed for the first time, but also to all ad- 
 vances or reductions in rates. It is obvious that rates may 
 be so related to each other that to change one without 
 changing the others would necessarily result in an unjust 
 discrimination.^^ Hence where rates are too low and an 
 increase is justified, the advance should be made in such a 
 manner as not to discriminate.^' It is also recognized that 
 rates may be advanced for the express purpose of equalizing 
 rates in effect over other roads. ^* This interdependence 
 of rates makes it necessary when passing upon the pro- 
 priety of an increase in rates to inquire whether such 
 
 ^ Davenport Commercial Club v. Detroit rate or a cut in the rate from 
 
 Y. & M. Ry. Co., 20 I. C. C. 19; New York. Gottron Bros. Co. v. 
 
 Lumbermen's Exchange of St. Louis G. & W. R. R. Co., 28 I. C. C. 
 
 V. A. & S. R. Ry., 24 L C. C. 220. 38. 
 
 If rate from New York to C. F. A. " In re Advances on Ice, 24 I. C. C. 
 
 points is discriminatory as compared 660; In re Advances on Oil, 25 I. C. 
 
 with the rate to same points from C. 349. 
 
 Detroit, the adjustment may be ^* Omaha- Wisconsin Grain Rates, 
 
 rectified only by an increase in the 28 I. C. C. 602. 
 
 [681] 
 
§ 770 ] Railroad Rate Regulation 
 
 increase would result in an undue discrimination,^' and a 
 carrier may properly ask whether an enforced reduction 
 to one point will not entail reductions to other points 
 which it cannot afford to make.'" But if the rates of an 
 existing schedule do not bear a just or equitable relation 
 to each other, the fact that advances or reductions would 
 disturb the existing relation is not a conclusive argument 
 against the change.'^ On the other hand, the effect which 
 a given rate, if ordered, will have upon the whole schedule 
 of rates cannot be ignored by the Commission, and the 
 consequences which it foresees may well cause it to hesitate 
 to require a change. To a petition for the estabhshment of 
 carload rating on cotton-piece goods between the Missis- 
 sippi and Missouri rivers and not elsewhere, the Commis- 
 sion answered that to make such an order would throw 
 out of balance the relation of rates on cotton-piece goods 
 throughout the covmtry — a consequence which it might 
 well hesitate to incur. ^^ In such cases, therefore, the 
 necessity for relief must be clear and imperative. In 
 dealing with certain commodities, especially those of low 
 grades, it has long been the custom of carriers to group a 
 number of stations in a wide expanse of territory and 
 place the whole under one rate.'' This involves, of course, 
 a considerable disregard of distance and varying degrees 
 of inequality, but this is not of necessity unreasonable 
 when the situation is viewed from every standpoint.'^ 
 The chief justification of the practice lies in the fact that 
 it places all producers in the group on the same footing at 
 a market.'^ A group rate, however, must not be so ar- 
 ranged as to produce an undue discrimination. To place 
 
 "^ Grain Rates in C. F. A. Territory, '' Kansas City Transportation 
 
 28 I. C. C. 549. • Bureau v. A., T. & S. P. Ry., 16 
 
 ^ Columbia Chamber of Commerce I. C. C. 195; Moise Bros. Co. v. 
 
 V. So. Ry., 28 I. C. C. 339. C, R. I. & P. Ry., 16 I. C. C. 550. 
 
 '' Fairmont Creamery Co. v. A., T. '* Qiieago Lumber & Coal Co. v. 
 
 & S. F. Ry., 28 I. C. C. 661. T. S. Ry., 16 I. C. C. 323. 
 
 '2 Taylor Dry Goods Co. v. Mo. "Ferguson Saw Mill Co. v. St. 
 
 Pac. Ry., 28 I. C. C. 205. L., I. M. & S. Ry., 18 I. C. C. 396. 
 
 [682] 
 
Discrimination Between Localities [ § 771 
 
 a point in a group to which it does not belong may preju- 
 dice it quite as substantially as a discrimination in the 
 amount of the rate would do.^^ If this system is adopted 
 it must be appUed without discrimination to all places 
 similarly situated.'^ Each case must, therefore, stand on 
 its own merits,^* and if it appears that the rate adjust- 
 ment which was intended to do substantial justice be- 
 tween all shippers generally has resulted in individual 
 instances in disproportionate inequality, it has failed of 
 its purpose to that extent, and the arbitrary theory upon 
 which it was built should yield sufficiently to prevent 
 gross injustice.'' 
 
 § 771. Conditions which are not dissimilar. 
 
 On the other hand, circumstances and conditions are not 
 so dissimilar as to justify a preference because the city 
 preferred has subscribed toward the building of the road,*" 
 or because it is much larger and has more important and 
 extensive business interests than another,*^ or because it 
 is an assembling point, *^ or because it possesses an option 
 market,*' or because it is a trade center.** The Commis- 
 sion has even held that the fact that a city is an important 
 market should be a reason against rather than for dis- 
 crimination in its favor. *^ Lack of proper poUcing at a 
 transit point is not ground for the maintenance of rate 
 
 '« Corporation Commission of Ry., 4 I. C. C. 348, 6 I. C. C. 1; Com- 
 
 North CaroUna v. N. & W. Ry., 19 mercial Club of Duluth v. B. & O. 
 
 I. C. C. 303, affirmed in N. & W. Ry., 27 I. C. C. 639. 
 
 Ry. V. United States, 195 Fed. " Iowa State Board of Railroad 
 
 953. Commissioners v. A. E. Ry., 28 
 
 " Columbia Grocery Co. v. L. & I. C. C. 193. 
 
 N. Ry., 18 I. C. C. 502. " Chamber of Commerce of New 
 
 »» Mushozee Traffic Bureau v. A., York v. N. Y. C. & H. R. Ry., 24 
 
 T. & S. F. Ry., 17 I. C. C. 169. I. C. C. 55; Payne-Gardner Co. v. 
 
 " Alpha Portland Cement Co, v. L. & N. Ry., 19 I. C. C. 638. 
 
 B. & O. Ry., 22 I. C. C. 446. " Bowling Green Business Men 
 
 « Lincohi Board of Trade v. B. & v. L. & N. Ry., 24 I. C. C. 228. 
 
 M. Ry., 2 I. C. C. 95. « In re Rates on Salt, 24 I. C. C. 
 
 " Troy Board of Trade v. Ala. M. 192. 
 
 [683] 
 
§ 771 ] Raileoad Rate Regulation 
 
 discrimination against that point. ^* The financial inability 
 of the defendant is no answer to a charge of undue pref- 
 erence,^' nor the fact that its line is so long and circuit- 
 ous that it is obliged to make rate concessions in order 
 to share in the traffic.** It must be remembered that it 
 is only dissimilarity in transportation conditions which 
 justify preferential rates. Commercial and transporta- 
 tion conditions must not be confused. The condition of 
 the market as to any specific commodity is not the con- 
 trolling element.** So long as a rate is fair and just from 
 the standpoint of service performed, the Commission may 
 not take into account either the relative cost of production 
 at competing points,^" nor the price at which the shipper 
 markets his product. ^^ Neither the amount of traffic in- 
 volved,^^ nor the size of a community,^' nor the absence 
 of competition between manufacturers can justify prefer- 
 ences and prejudices.^* The fact that the complaining 
 locality has advantages in other territory naturally tribu- 
 tary to it does not constitute a difference of condition 
 which subjects it to discrimination in favor of localities 
 not having those advantages. ^'^ In determining rates on 
 imported goods, the Commission may not refuse to reduce 
 them on the ground that to do so would give an advantage 
 
 *^ Indianapolis Freight Bureau v. I. C. C. 158; Sheridan Chamber of 
 
 C, C, C. & St. L. Ry., 26 I. C. C. Commerce v. C, B. & Q. Ry., 28 
 
 53. I. C. C. 250. 
 
 " Brewer v. L. & N. Ry., 7 I. C. C. " Oklahoma-Colorado Potato 
 
 224; Mayor & Council of Boston v. Rates, 28 I. C. C. 298. 
 
 A. C. L. Ry., 24 I. C. C. 50. ^a Beach v. A. A. Ry., 26 I. C. C. 
 
 *« B. & A. Ry. V. B. & L. Ry., 1 410. 
 
 Int. Com. Rep. 500, 1 I. C. C. 158. =» Harbor City Wholesale Co. of 
 
 « Bovau-d Supply Co. v. A., T. & San Pedro v. So. Pac. Ry., 19 I. C. C. 
 
 S. F. Ry., 13 I. C. C. 56. 323; Suffern Grain Co. v. I. C. Ry., 
 
 » Colorado Coal Traffic Ass'n v. 22 I. C. C. 178; In re Rates on Salt, 
 
 C. & S. Ry., 18 I. C. C. 572; Inves- 24 I. C. C. 192. 
 
 tigation of Alleged Unreasonable " Chamber of Commerce of Mason 
 
 Rates on Meats, 22 I. C. C. 160; v. C, N. O. & T. P. Ry., 27 I. C. C. 
 
 Empson Packing Co. v. C. M. Ry., 263. 
 
 22 I. C. C. 268; Oklahoma Portland "' Sioux City Commercial Club v. 
 
 Cement Co. v. M., K. & T. Ry., 24 C. & N. W. Ry., 22 I. C. C. 110. 
 
 [684] 
 
Discrimination Between Localities [ § 771 
 
 to foreign manufacturers on account of inadequate import 
 duties.*® The Act which it is the duty of the Commission 
 to administer was not passed for the purpose of re-enforc- 
 ing the tariff law in the matter of protection from foreign 
 competitors/' Whatever it may be permissible for car- 
 riers to do for the favoring of industries or for granting 
 them a larger measure of protection against foreign com- 
 petition than Congress has given them, no such power may 
 lawfully be exercised by the Commission.''* Likewise the 
 Commission has no authority to order the same rates on 
 flour for export as on wheat for export for the purpose of 
 placing American millers on a competitive equality with 
 foreign millers, in the absence of legislation by Congress 
 adopting such a national policy.*" But on the other hand, 
 if a town is recognized as an important trading center, 
 and has gained and retained such recognition through un- 
 due discrimination, the position thus attained is not such 
 a difference of circumstance as justifies preferential rates.^" 
 Carriers should keep in close touch with commercial con- 
 ditions pertaining to sales of commodities and the needs of 
 communities, and adjust their charges, as far as practi- 
 cable, within reasonable limits, to meet those conditions 
 and encourage trade and the movement of freight. But it 
 cannot be held to be the duty of the carrier so to adjust 
 its charges as to insure to a market the continuance of 
 trade which it once enjoyed," nor to equalize the value of 
 commodities in their final distribution,*^ nor vary its own 
 charges to accord with the differing values of the same 
 commodity produced by different shippers.*^ 
 
 s« Union Pacific Tea Co. v. Penn- ^9 g^jte Milling Co. v. C. & A. Ry., 
 
 sylvania Ry., 14 I. C. C. 545. 15 1. C. C. 351. 
 
 " In re Advances on Manganese "" Payne-Gardner Co. v. L. & N. 
 
 Ore, 25 I. C. C. 663. Ry., 13 I. C. C. 638. 
 
 58 A., T. & S. F. Ry. v. Interstate " Baltimore Chamber of Corn- 
 Commerce Commission, 190 Fed. merce v. B. & O. Ry., 22 I. C. C. 696. 
 591; Southern Pac. Ry. v. Interstate «' Chicago Lumber & Coal Co. v. 
 Commerce Commission, 219 U. S. T. S. Ry., 16 I. C. C. 323. 
 433, 55 L. ed. 283, 31 Sup. Ct. " Hafey v. St. L. & S. F. Ry., 15 
 288. ' I. C. C. 245. 
 
 [ 685 ] 
 
§§ 772, 773 ] Railroad Rate Regulation 
 
 § 772. Dissimilarity of condition is a question of fact. 
 
 The question as to what in any particular case justifies 
 a difference of rate is one of fact.*^ "As the third section 
 of the Act, which forbids the making or giving any undue 
 or unreasonable preference or advantage to any particular 
 person or locality, does not define what, under that section, 
 shall constitute a preference or advantage to be undue 
 or unreasonable, and as the fourth section, which forbids 
 the charging or receiving greater compensation in the ag- 
 gregate for the transportation of like kinds of property 
 for a shorter than for a longer haul over the same line, 
 under substantially similar circumstances and conditions, 
 does not define or describe in what the similarity or dis- 
 similarity of circumstances and conditions shall consist, 
 it cannot be doubted that whether, in particular instances, 
 there has been an undue or unreasonable prejudice or 
 preference, or whether the circumstances and conditions 
 of the carriage have been substantially similar or otherwise, 
 are questions of fact, depending on the matters proved 
 in each case." *'' The amendment of the fourth section 
 adopted in 1910 and the construction put upon it in the 
 Intermouhtain Rate Cases (see post, sec. 783) make it 
 even more clear that deviation from the rigid long-and- 
 short-haul rule depends upon questions of fact to be 
 determined by the Commission. 
 
 § 773. Discrimination against points off the line. 
 
 When the question was first presented to the Commission 
 as to whether a carrier could be held for discrimination 
 against points not on its line, the Commission held with 
 
 "Shiras, J., in Interstate Com- 2 Q. B. 229; Cincinnati, N. O. & 
 
 merce Com. v. Alabama Midland Tex. Pac. Ry. v. Interstate Commerce 
 
 Ry., 168 U. S. 144, 42 L. ed. 414, 18 Commission, 162 U. S. 184, 40 L. ed. 
 
 Sup. Ct. 45, B. & W. 433. 935, 16 Sup. Ct. 700; Texas & Pacific 
 
 "' Citing Denaby Main Colliery Railway v. Interstate Commerce 
 
 Co. V. Manchester, &o., Ry. Co., 3 Commission, 162 U. S. 197, 40 L. ed. 
 
 Ry. & Can. Cas. 426; Phipps v. 940, 16 Sup. Ct. 666. 
 London & Northwestern Railway, 
 
 [686] 
 
Discrimination Between Localities [ § 773 
 
 great positiveness: "It would be quite absurd to charge 
 a railroad with giving a preference or advantage to a 
 community which it does not serve, and it is equally illogi- 
 cal to say that it can prejudice or discriminate against 
 such a community." "^ Some years later the Commission 
 said: "A carrier cannot discriminate within the meaning 
 of the statute except as between those whom it serves or 
 whom it may lawfully be required to serve. It is not 
 guilty of discrimination merely because it does not afford 
 as favorable rates as others served in different territory, 
 though the products carried by each are brought to the 
 same market. The law does not deal in these matters 
 with all carriers collectively as a single unit or system, 
 but its commands are directed to each, with respect to the 
 service which it is required to perform." *^ The unqualified 
 stand here taken has long since been abandoned. A more 
 guarded statement is that a carrier cannot be said to dis- 
 criminate against a town which it does not reach and in 
 whose carrying trade it does not participate.** The most 
 frequently recognized exception to the rule with which the 
 Commission started is found in the case of joint rates. An 
 undue discrimination against a given point may be effected 
 by a joint rate as easily as by a one-line rate; and if a 
 carrier enters into a joint rate which results in discrimi- 
 nation which it could control, it is no less responsible 
 than it would be if the discrimination were the result of 
 a one-line rate.*" Each carrier that participates in joint 
 
 °* Eau Claire Board of Trade v. usually show that while the Commis- 
 
 C, M. & St. P. Ry., 4 Int. Com. Rep. sion still clung to the language of the 
 
 65. Even though the unqualified Eau Claire case it had certain qual- 
 
 rule of this case has long since been ifications in mind, 
 
 abandoned, its language is frequently " Chicago Lumber & Coal Co. v. 
 
 found in later decisions. See Friend T. S. Ry., 16 I. C. C. 323. 
 
 Paper Co. v. C, C, C. & St. L. Ry., ** Chamber of Commerce of Ash- 
 
 18 I. C. C. 178; Utica Traffic Bureau burn v. G. S. & F. Ry., 23 I. C. C. 
 
 V. N. Y. C. & H. R. Ry., 18 I. C. C. 140; Blodgett Milling Co. v. C, M. & 
 
 271; Schmidt & Sons v. Mich. Cent. St. P. Ry., 23 I. C. C. 448. 
 
 Ry., 19 I. C. C. 535. But an exam- =» Ashland Fire Brick Co. v. So. 
 
 ination of Jthe facts in each case will Ry., 22 I. C. C. 115; Rates from the 
 
 [687] 
 
§ 773 ] Railboad Rate Regulation 
 
 rates is responsible for the discrimination notwithstanding 
 the fact that its rails do not extend to the point preferred.™ 
 That a carrier does not directly serve a city is no defense 
 to a charge of undue discrimination where such carrier 
 participates in the carrying trade of that city.^^ On the 
 other hand, the fact that the rails of a carrier extend both 
 to the point alleged to be unduly preferred and to its 
 rival is not conclusive evidence of a preference, since it is 
 still open to the carrier to show that it does not in fact 
 serve the point which it is claimed is favoredJ^ In short, 
 the Commission looks at the facts of the traffic in question. 
 If it appears that it is controlled by a carrier which is 
 using its power to effect undue discriminations, then such 
 carrier will be held responsible whether it has actual 
 physical connection with the point in question or not. A 
 carrier whose rails do not extend to a given city will be 
 considered as having its rails extended thereto if it has 
 trackage rights into it over the rails of another carrier or 
 if it owns or controls a road that enters it.'^' If it is 
 sought to fix responsibility upon a carrier for a preference 
 resulting from a joint rate in which it participates, it 
 must appear that the carrier entered into such joint rate 
 voluntarily.^^ If the joint rate was forced upon it, as for 
 instance by the order of a State commission, the Com- 
 mission formerly held that the carrier was not responsible 
 even though it profited by such rates, ''^ but this has been 
 
 Walsenburg Coal Field, 26 I. C. C. Chamber of Commerce of New York 
 
 85. V. N. Y. C, & H. R. Ry., 24 I. C. C. 
 
 '" Manufacturers & Merchants' 55; La Grange Chamber of Com- 
 
 Ass'n V. A. & A. Ry., 25 I. C. C. merce v. A. & W. P. Ry., 28 I. C. C. 
 
 116; Galveston Commercial Ass'n v. 178. 
 
 A., T. & S. F. Ry., 25 I. C. C. 216; " Holland Blow Stave Co. v. 
 
 Greenbaum Co. v. C. & O. Ry., 26 A. C. L. Ry., 24 I. C. C. 81. 
 
 I. C. C. 352; Southern Furniture '' Commercial Club of Superior v. 
 
 Manufacturers' Ass'n v. So. Ry., 25 Gt. Nor. Ry., 24 I. C. C. 93. 
 
 I. C. C. 379. ^* Partridge & Sons Co. v. Penn. 
 
 " Raihoad Commission of Ten- Ry., 26 I. C. C. 484. 
 
 nessee v. A. A. Ry., 17 I. C. C. 418; " Raihoad Commission of Kansas 
 
 Chamber of Commerce of Newport v. A., T. & S. F. Ry., 22 I. C. C. 
 
 News V. So. Ry., 23 I. C. C. 345; 407. 
 
 [688] 
 
Discrimination Between Localities [ § 774 
 
 reversed by the decision in the Shreveport case (sec. 769). 
 On the other hand, a carrier which refuses to participate in 
 rates to points not reached by its Unas while participating 
 in rates to other points similarly situated may be held for 
 undue prejudice.'* A carrier which enters into joint rates 
 with other carriers by that act greatly curtails its own 
 freedom of action. Thus it is undue prejudice for a 
 carrier to deny to points on its lines a transit privilege at 
 Chicago while participating in through rates under which 
 other carriers grant such a privilege to complainants' 
 competitors on their lines." 
 
 § 774. What constitutes a through line. 
 
 To determine what constitutes a through line is not 
 always an easy matter. A case which is much cited but 
 which it is difficult to support is that of Indiana -Steel 
 & Wire Co. v. C, R. I. & P. Ry.'^ The facts were these: 
 For a number of years, several carriers, forming an associa- 
 tion known as the Arkansas Freight Committee, by tariffs 
 duly pubUshed, maintained identical rates on steel and 
 wire products from what was known as Chicago-Cincinnati 
 territory. In 1907, without dissolving their association, they 
 divided this territory at the Indiana-Illinois line, and estab- 
 lished higher rates to the east of that line. Complaint 
 having been made that this was discriminatory, the Com- 
 mission held that by making their original grouping of 
 territories, the carriers became bound to maintain reason- 
 able and non-discriminatory rates throughout the group 
 "without any regard to the line or lines of the carriers 
 on which the shipment originates or over which it must 
 pass from origin to destination. The identical through 
 rates and joint rates from Chicago-Cincinnati territory 
 to Arkansas common points were voluntarily established 
 
 ™ Allentown Portland Cement Co. '« 16 I. C. C. 155. Followed in 
 
 V. P. & R. Ry., 27 I. C. C. 448. Railroad Commission of Tennessee v. 
 
 " Van Natta Bros. v. C, C, C. & A. A. Ry., 17 I. C. C. 418. 
 8t. L. Ry., 23 I. C. C. 1. 
 
 44 [ 689 ] 
 
§ 775 ] Railroad Rate Regulation 
 
 by the defendants and formally maintained for many years 
 prior to 1907 without complaint or question by shippers 
 or carriers as to their reasonableness and justness. The 
 carriers failed to show sufficient grounds for such advance 
 in 1907, and they have wholly failed to show any sufficient 
 or reasonable grounds for such advanced rates and changed 
 regulations." Commissioner Knapp, who wrote the opin- 
 ion in the Eau Claire case, dissented. The effect of this 
 decision is that when traffic from two points of origin 
 on different lines is carried to a point on a common con- 
 necting line under joint rates in a single tariff to which 
 all three lines are parties, a through line or group of lines 
 is formed which serves the whole territory covered by the 
 rate schedule, and makes it possible for a carrier to dis- 
 criminate against a point which is only constructively on 
 its line. The Commission has frequently said that it 
 cannot treat the railways of the country as a imit, but it 
 takes a long step in that direction when it treats so large 
 a group of them as a unit. The Commission has also added 
 new terrors to joint traffic arrangements, by holding that 
 all the lines participating in such agreements constitute 
 for rate purposes one line. 
 
 § 775. Equalization of economic advantages — ^Economic 
 theory. 
 A theory of fixing rates which appeals to many econo- 
 mists and which is but a modification or special application 
 of the rule for charging what the traffic will bear is the 
 theory that rate making should be used to equalize the 
 advantages which one locality may possess over another, 
 in much the same way that advocates of a protective 
 tariff argue that import duties should be used to equalize the 
 cost of production. If a sea port is near the great grain- 
 producing centers, other ports argue that this advantage 
 of location should be overcome by such differentials as 
 will enable them to obtain "their share" of the traffic. 
 This theory, dangerous as it is from a legal standpoint, 
 [690] 
 
Discrimination Between Localities [ § 775 
 
 has been accepted in some of the State courts. Thus in a 
 Minnesota case, Judge Collins justified the railroad com- 
 mission in prescribing an abnormally low rate for a long 
 haul of coal as compared with other commodities and 
 other distances upon commercial considerations of the 
 sort above described, "namely, the application of prin- 
 ciples when fixing rates which are forced upon common 
 carriers by various conditions and circumstances and are 
 in common practice among them, — a business policy 
 which actuates and influences the carriers themselves 
 to disregard a rule of strict comparison and strict equality 
 as between bulk, or weight, or value as well as distance 
 of carriage." ^^ And in a Georgia case where the issue also 
 was whether the railroad commission had acted irrationally 
 in taking economic considerations into account in fixing 
 the rate upon particular commodities between stations, 
 Judge Evans said, "We do contend that the Commission, 
 in the discharge of its duty to fix reasonable rates, is not 
 precluded from the consideration of economic conditions 
 recognized by the carriers in the conduct of their business. 
 The full purpose of the creation of the Commission would 
 be thwarted if it could not consider and act on every 
 economic or industrial factor potentially influencing the 
 operation of a railroad and the transportation of freight. 
 It cannot act arbitrarily nor by edict produce abnormal 
 conditions of trade; it cannot display favoritism by capri- 
 ciously giving preferential rates to one locality which are 
 denied to another. It may, however, recognize the traffic 
 conditions between given points, and adjust its schedule 
 to meet these conditions." *" Even the Supreme Court 
 of the United States has used language which seems to 
 indicate a friendly feeling for this principle. In a case in 
 which this was involved, it plainly appeared that the In- 
 terstate Commerce Commission had employed various 
 
 "State V. Minneapolis & St. Louis Stove Wks., 128 Ga. 207, 57 S. E. 
 Ry. Co., 80 Minn. 191, 83 N. W. 60. 429. 
 *" Southern Ry. Co. v. Atlanta 
 
 [691] 
 
§ 776 ] Raileoad Rate Regulation 
 
 economic policies in fixing the relative rates in question, 
 The lower Federal court held that the Commission had no 
 power to lower through rates as between certain points 
 and Mississippi river points and Denver, so as to give, for 
 example, the Missouri river cities an artificial advantage 
 over other points in shipments east of Denver, and Denver 
 an advantage over Missouri river cities to poiats west of 
 Denver.*^ But the Federal Supreme Court reversed this 
 decision and set forth this general principle: "The out- 
 look of the Commission and its powers must be greater 
 than the interest of the railroads or of that which may 
 affect their interest. It must be as comprehensive as the 
 interest of the whole coimtry. If the problems which are 
 presented to it therefore are complex and difficult, the 
 means of solving them are as great and adequate as can 
 be provided." *^ 
 
 § 776. Equalization of economic advantages — Legal prac- 
 tice. 
 However attractive this theory may be to the econ- 
 omists, it has httle weight with lawyers who have been 
 concerned with the making of rates. Both the Federal 
 courts and the Commission recognize that it is as impossi- 
 ble for any tribunal to equalize the commercial advan- 
 tages of locaUties as it is to equaUze the intellectual 
 powers of individuals.^' The Interstate Commerce Act 
 does not attempt to equalize fortunes, opportunities, or 
 abilities.** In an early case, the Commission set forth the 
 principles which, with some exceptions to be noted here- 
 after, it has ever since followed: "It is not the duty of 
 carriers, nor is it proper that they undertake by adjust- 
 ment of rates or otherwise to impair or neutraUze the 
 
 " C, R. I. & P. Ry. V. Interstate '^ Brewer v. C. & G. Ry., 84 Fed. 
 
 Commerce Commission, 171 Fed. 268; Interstate Commerce Commis- 
 
 680. sion v. L. & N. Ry., 118 Fed. 613. 
 
 '^ Interstate Commerce Commis- *^ Interstate Commerce Commis- 
 sion V. C, R. I. & Pac. Ry., 218 U. S. sion v. Diffenbaugh, 222 U. S. 42; 
 88, 54 L. ed. 946, 30 Sup. Ct. 65. 32 Sup. Ct. 22, 56 L. ed. 83. 
 
 [692] 
 
Discrimination Between Localities 
 
 §776 
 
 natural commercial advantages resulting from location or 
 other favorable condition of one territory in order to put 
 another territory on an equal footing with it in a common 
 market. Each locality competing with others in a com- 
 mon market is entitled to reasonable and just rates at the 
 hands of the carriers serving it and to the benefit of all 
 its natural advantages. If this result in prejudice to one 
 and advantage to another, it is not the undue prejudice 
 or advantage forbidden by the Statute, but flows nat- 
 urally from conditions beyond the legitimate sphere of legal 
 or other regulation." ^■' The Commission clearly recognizes 
 not only the impossibility of equalizing natural advantages 
 and commercial conditions and of placing all shipping 
 points upon the same plane, but also that such a result 
 would be unjust. Every locality is entitled to whatever 
 advantages it possesses, whether they are due to nature or 
 to the enterprise of its citizens.*" Carriers, it is true, have 
 
 *' Freight Bureau of the Cincinnati 
 Chamber of Commerce v. C, N. O. & 
 T. P. Ry., 6 I. C. C. Rep. 195, 4 Int. 
 Com. Rep. .592. See to the same 
 effect, Crews v. R. & D. Ry., 1 Int. 
 Com. Rep. 703, 1 I. C. C. 401; James 
 & M. Buggy Co. V. C, N. O. & T. P. 
 Ry., 3 Int. Com. Rep. 682, 4 I. C. C. 
 Rep. 744; Raworth v. Northern Pac. 
 Ry., 3 Int. Com. Rep. 857, 5 I. C. C. 
 Rep. 234; Eau Claire Board of Trade 
 V. C, M. & St. P. Ry., 4 Int. Com. 
 Rep. 65, 5 I. C. C. Rep. 264; Com- 
 mercial Club V. C, R. I. & P. Ry., 
 6 I. C. C. Rep. 647; Commercial Club 
 of Omaha v. C, R. I. & P. Ry., 6 
 I. C. C. Rep. 675; Freight Bureau v. 
 C, N. O. & T. P. Ry., 7 I. C. C. Rep. 
 180; Danville v. So. Ry., 8 I. C. C. 
 Rep. 409; Wichita v. Mo. Pac. Ry., 
 
 10 I. C. C. Rep. 35; C. Y. P. Ass'n v. 
 V. S. & P. Ry., 10 I. C. C. Rep. 193; 
 Washburn-Crosby Co. v. Penn. Ry., 
 
 11 I. C. C. 40; VaUey Flour Mills v. 
 A., T. & S. F. Ry., 16 I. C. C. 73; 
 
 Acme Cement Plaster Co. v. L. S. & 
 M. S. Ry., 17 I. C. C. 30; Corpora- 
 tion Commission of N. C. v. N. & W. 
 Ry., 19 1. C. C. 303; Wichita Falls 
 System Joint Coal Rate Cases, 26 I. 
 C. C. 215; Rates on Lmseed Oil, 26 I. 
 C. C. 265; West Virginia Rail Co. v. 
 B. & O. Ry., 26 I. C. C. 622; Missouri 
 River-Illinois Wheat and Flour Rates, 
 27 I. C. C. 286; Aransas Pass Chan- 
 nel & Dock Co. V. G. H. & S. A. Ry., 
 27 I. C. C. 403; Board of Trade of 
 Chicago V. C. & A. Ry., 27 I. C. C. 
 530; Lebanon Commercial Club v. 
 L. & N. Ry., 28 I. C. C. 301; Traffic 
 .^ss'n of St. Louis Coffee Importers 
 v. I. C. Ry., 28 I. C. C. 484; Bryant 
 Co. V. Ft. W. & D. C. Ry., 28 I. C. C. 
 594. 
 
 ^ In the following cases the Com- 
 mission emphasizes the impropriety 
 of any attempt on its part to deprive 
 a place of its natural advantages. 
 Saginaw Board of Trade v. G. T. Ry., 
 17 I. C. C. 128; Carstens Packing Co. 
 
 [693] 
 
§ 776 ] Railroad Rate Regulation 
 
 often given great weight to commercial considerations in 
 the fixing of rates,*'' and the Commission might require 
 such rates, when voluntarily established, to be maintained, 
 but it will not initiate rates upon that theory.** Nor will 
 it require a carrier which has by rate adjustment as to 
 one commodity enabled a manufacturer or producer to 
 overcome a natural disadvantage of location to establish a 
 like adjustment as to another commodity.*' On the other 
 hand, the fact that a locality possesses advantages not 
 enjoyed by its rivals does not deprive it of its right to a 
 reasonable rate, nor justify any discrimination against it.^" 
 But in the view of the Commission, whatever advantages 
 are possessed by a city which tend to give it lower rates or 
 superior service cannot be ignored." What constitutes a 
 reasonable rate depends in part upon the natural situation 
 of a city,'^ and it is the purpose of the Act to secure to it a 
 rate which in view of all the circumstances and conditions 
 is reasonable and non-discriminatory. Every locality is 
 entitled to such a rate as of right, and also to whatever 
 business it can obtain under it.'" A shipper in choosing a 
 
 V. O. & W. Ry., 22 1. C. C. 77; Cham- Agricultural Corporation v. L. & N. 
 
 ber of Commerce of New York v. Ry., 22 I. C. C. 488. 
 
 N. Y. C. & H. R. Ry., 24 I. C. C. 55; » Globe Milling Co. v. C, M. & St. 
 
 Commercial Club of Superior v. P. Ry., 24 I. C. C. 594. 
 
 G. N. Ry., 24 I. C. C. 96; In re " Hecker-Jones-JeweU Milling Co. 
 
 Advances on Cooperage, 24 I. C. C. v. B. & O. Ry., 14 I. C. C. 356; Sioux 
 
 656; In re Wool, Hides, and Pelts, 25 City Commercial Club v. C. & N. W. 
 
 I. C. C. 185; In re Mine Rating, 25 Ry., 22 I. C. C. 110; Massee & F. 
 
 I. C. C. 286; Wichita Board of Trade Lumber Co. v. So. Pac. Ry., 23 
 
 V. A., T. & S. F. Ry., 25 L C. C. 625; L C. C. 110; Indianapolis Freight 
 
 Chamber of Commerce of Beaumont Bureau v. C, C, C. & St. L. Ry., 26 
 
 V. T. & N. O. Ry., 25 I. C. C. 695; I. C. C. 53. 
 
 Furniture Rates in the Northwest, 26 " Kindel v. N. Y., N. H. & H. Ry., 
 
 I. C. C. 655; Transcontinental Rates 15 I. C. C. 555; Saginaw Board of 
 
 from Group F., 28 I. C. C. 1. See Trade v. G. T. Ry., 17 I. C. C. 128. 
 
 also State v. Adams Express Co., 171 '^ Chamber of Commerce of New- 
 
 Ind. 138, 85 N. E. 337. port News v. So. Ry., 23 I. C. C. 
 
 " City of Spokane v. No. Pac. Ry., 345. 
 
 19 I. C. C. 162. " Receivers' & Shippers' Ass'n of 
 
 »« Douglas & Co. V. C, R. I. & P. Cincinnati v. C, N. O. & T. P. Ry., 
 
 Ry., 21 I. C. C. 541; International 18 I. C. C. 440. 
 
 [694] 
 
Discrimination Between Localities [ § 777 
 
 locality takes it with all its advantages and disadvan- 
 tages,'^ and these in turn determine to some extent the 
 commercial and transportation faciUties which the carrier 
 may confer upon it.'^ But the natural disadvantages of a 
 place should not be magnified imduly nor allowed to 
 obscure its right to reasonable rates.'* On the other hand, 
 the carrier must not for its own purposes disregard the 
 natural advantages of a locality and bar it from competing 
 with other places. Thus, when a carrier makes rates to 
 two competing markets, which give the one monopoly 
 over the other, because it can secure reshipments from 
 the favored locaUty and none from the other, it goes 
 beyond serving its fair interest, and disregards the statu- 
 tory requirement of relative equality as between persons, 
 locaUties, and particular descriptions of traffic." And so 
 inequaUty in treatment of shippers and localities is in- 
 defensible where it has no other justification than the 
 diversion by the carrier of through traffic from a shorter 
 route over which it participates in carriage, so as to secure 
 for itself greater aggregate revenue through a long haul by 
 a different route, over which it is also engaged in trans- 
 portation.'* Nor may railways create artificial differences 
 in market conditions by an arbitrary differential in rates, 
 whereby the product of one section of the country is 
 assigned to one market, and the product of another section 
 of the country to another market." 
 
 § 777. Discrimiaation against the staple industry of a 
 locality. 
 Prejudice against the locality may arise from rates 
 
 '* In re Advances in Rates, Western " Savannah Bureau of Freight & 
 
 Case, 20 I. C. C. 307; In re Investiga- Transportation v. L. & N. Ry., 8 
 
 tion of Rates on Meats, 22 I. C. C. I. C. C. Rep. 377. 
 
 160; Globe MilUng Co. v. C, M. & "« C. F. & I. Co. v. So. Pac. Ry., 
 
 St. P. Ry., 24 I. C. C. 594. 6 I. C. C. Rep. 488. 
 
 '' City of Spokane v. No. Pac. Ry., " In re Export Rates from Points 
 
 21 I. C. C. 400. East and West of Mississippi River, 
 
 « Board of Trade of Carrollton v. 8 I. C. C. Rep. 185. 
 C. & G. Ry., 28 I. C. C. 154. 
 
 [695] 
 
§ 778 ] Railroad Rate Regulation 
 
 which while not directed against any particular place 
 have the result of injuring a staple industry of a place. 
 Thus section 3 is violated and Chicago is prejudiced 
 by an unduly high relative rate on live hogs as against 
 packing house products; ^ but where the rate is caused 
 by genuine competition between carriers and where the 
 result of the rate complained of has not been to change the 
 volume of traffic or materially affect the business of the 
 complainant, it is not unduly discriminatory.^ Duluth is 
 prejudiced by higher rates on shingles than on lumber.' 
 Kansas and Missouri river points are prejudiced by a 
 differential against com products in favor of com.* So 
 the localities in Official Classification Territory wherein 
 hay and straw are produced were discriminated against 
 by the act of several carriers in advancing those commodi- 
 ties from the sixth to the fifth class and thereafter charg- 
 ing fifth-class rates for transportation.^ 
 
 § 778. Equalization of values. 
 
 While a difference in rates may be made by reason of 
 difference in value, it should not be so great as to equaUze 
 the difference in value in the ultimate market of the 
 commodities carried. In a recent case the Federal court 
 set aside the order of the Commission on the ground that 
 the similarity of circumstances and conditions under which 
 a service of carriage is rendered, which under the Act, re- 
 quires an equality of rate, relates only to the circumstances 
 and conditions which affect the service. And it was con- 
 sequently held that where different coal mining locafities 
 are grouped into a district for rate-making purposes, a 
 
 ' Chicago Board of Trade v. Chi- ' Duluth Shingle Co. v. D. S. S. & 
 
 cago & A. R. R., 3 Int. Com. Rep. A. Ry., 10 I. C. C. Rep. 489. 
 
 233, 4 I. C. C. 158; Chicago L. S. * Board of Railway Commissioners 
 
 Exch. V. Chicago G. W. Ry., 10 v. A., T. & S. F. Ry., 8 I. C. C. Rep. 
 
 I. C. C. Rep. 428. 304; In re Rates on Com & Corn 
 
 ^ Interstate Commerce Commis- Products, 11 I. C. C. Rep. 212. 
 
 sion V. C. G. W. Ry., 209 U. S. 108, ' National Hay Ass'n v. L. S. & M. 
 
 28 Sup. Ct. 493, 62 L. ed. 705, affirm- S. Ry., 9 I. C. C. Rep. 264. 
 ing 141 Fed. 1003. 
 
 [696] 
 
Discrimination Between Localities [ § 779 
 
 carrier is not justified in making a different rate for the 
 same or substantially similar service from a particular 
 locality in such district or on the product of a particular 
 mine or vein, from that charged others.^ That the differ- 
 ence in the product from such locality, mine, or vein and 
 that from other mines in the district is such that it can 
 pay a higher rate and still compete in the market is not 
 material in this regard. The Commission will not attempt 
 to equalize differences in the cost of production, whether 
 natural or artificial.^ And when market quotations on 
 grain were offered to show the advantages enjoyed by 
 Omaha over Kansas City it said, "There is no difference 
 in the intrinsic value of like grain in the two markets, 
 and it is not within om- province to adjust rates merely to 
 equalize market conditions." * 
 
 § 779. Disproportionate charges inconsistent with public 
 duty. 
 
 It is the belief of the writer that the public service law 
 will not be satisfied in the end unless with some reasonable 
 degree of certainty each applicant who requires a service 
 is charged his proportion of the total cost, including in that 
 cost, over and above all current and fixed charges, a fair 
 return upon proper capitalization. It must be admitted 
 that the law relating to disproportion is still in the making; 
 it is as indefinite as the law relating to discrimination was 
 twenty-five years ago. By the weight of authority a 
 generation ago, there was no law whatever against dis- 
 crimination as such. As has been seen in a previous 
 chapter at the beginning of this book, if in those days each 
 appHcant for the same service was quoted a rate reason- 
 able in itself, all was then well; although outrageous 
 differences even at that time might be evidence that the 
 higher rate was unreasonable. In the same way to-day, 
 
 « Philadelphia & R. Ry. Co. v. ' Andy's Ridge CoaJ Co. v. So. Ry., 
 Interstate Commerce Commission, 18 I. C. C. 405. 
 174 Fed. 687. * Omaha Gram Exchange v. C, R. 
 
 I. & P. Ry., 28 I. C. C. 680. 
 
 [697] 
 
§ 780 ] Railroad Rate Regulation 
 
 very probably by the weight of authority, there is no law 
 against disproportion as such. Provided each appHcant 
 for different service is quoted a rate which is reasonable in 
 itself, it may be that there is no redress by established law, 
 however outrageous the disproportion may be; although it 
 seems to be agreed that outrageous differences may be 
 evidence that the higher rate is unreasonable in itself. 
 And yet it is quite in the line of the evolution of the pubhc 
 service law that a rule against disproportion as such may 
 eventually be recognized, despite the fact that it might in- 
 terfere with the business policies of the public service com- 
 panies even more than the present rule against outright 
 discrimination has done. For the same principles which 
 forbid any differences when the conditions are the same, 
 should prohibit disproportionate differences when the 
 conditions are different. 
 
 Toyic D. Long and Short Haul 
 
 § 780. Long and short haul at common law. 
 
 The question as to whether a carrier may charge less for 
 a long haul than for a short one included therein is but one 
 phase of the general problem as to whether there is any 
 legal requirement that rates shall be relatively reasonable. 
 Whether a lower charge for a longer haul be justifiable or 
 not, there are many cases in which it would be hard ia the 
 absence of legislation to prevent it. In the case of car- 
 riage of goods, it appears to be clear abstractly that the 
 owner may demand that his goods shall be dehvered up to 
 him at any point on the journey, provided it is reasonably 
 easy for the carrier to comply with the demand. It is of 
 course possible for a raUroad to run freight trains through 
 without stopping from one end to the other of the long 
 haul, and thus defeat the demand of the owner to have his 
 goods at the intermediate point; and it is also in its power 
 so to make up the train that it will be difficult to drop 
 goods directed to the end of the route at a way station. 
 This being the case, it is not difficult in the case of goods 
 [698] 
 
Discrimination Between Localities [ § 7^1 
 
 to defeat the demand of an owner for the deUvery of his 
 goods short of their destination; and as a practical matter, 
 therefore, a lower charge for a longer haul may be en- 
 forced. On the other hand, it should be said that the 
 common law has thus far been concerned only with the 
 absolute reasonableness of rates. If the charge to the in- 
 termediate point is not inherently unreasonable the shipper 
 cannot complain because a more remote point has a more 
 favorable rate. While it is possible that any discrim- 
 ination by a carrier against either a person or a locality 
 may in time come under the ban of the common law, it 
 cannot be said that discrimination against localities is at 
 present so regarded. 
 
 § 781. Legal justification of lower long-haul rate. 
 
 As a matter of reasonableness the charge has still to be 
 justified at common law; but this may be done in some 
 cases. If competition is met at one point and not at 
 another, a competitive rate is established at the former 
 point. A railroad whose Une runs through the non- 
 competitive to the competitive point must at the latter 
 point either meet the competitive rate or lose all business. 
 It must of course give up the business rather than carry 
 at a loss, and throw upon the remaining traffic the burden 
 of supporting the road and also of making up the loss. 
 But the competitive rate is ordinarily slightly remunera- 
 tive; it yields a net income, though less than is necessary 
 to pay its proportion of the fixed charges. If the business 
 is given up, all the fixed charges must be paid by the 
 traffic at the non-competitive points; if the competitive 
 rate is met and business obtained, the profit from the 
 business will go to reduce the amount of fixed charges to 
 be paid by the non-competitive traffic. As the competitive 
 traffic will not pay its share of the fixed charges, the non- 
 competitive traffic, having more than its share of the 
 fixed charges to bear, will necessarily pay a rate higher 
 than the competitive rate in proportion to the distance; 
 
 [699] 
 
§ 782 ] Railroad Rate Regulation 
 
 and it may well be obliged to pay absolutely a higher rate 
 than the competitive rate for a longer haul. Nevertheless, 
 the rate will be lower than it would be if the railroad did 
 not meet the competitive rate and obtain its share of the 
 business; and therefore, being the lowest rate which the 
 carrier can charge and obtain fair compensation, it is 
 reasonable at common law. 
 
 § 782. Statutory regulations of long and short-hatil rates. 
 The charge by a carrier of a less rate between two points 
 than is charged for carriage from the same initial point to 
 an intermediate point on the same route seems at first 
 sight indefensible upon any legal basis. Nevertheless such 
 rates have always been common in every railroad schedule" 
 and are still vigorously defended. Such discrimination 
 flom-ished practically without any real check during the 
 period when no rule against any discrimination was 
 recognized, but its seeming unfairness has led to the 
 passing of statutes in many jurisdictions forbidding the 
 charging of less for a long haul than for a short haul one 
 included therein. The chief of these is the Interstate 
 Commerce Act of 1887, which not only forbade all dis- 
 criminatory charges, but in a separate section (section 4) 
 expressly forbade charging less for a long haul than for a 
 short one included in it when "under substantially similar 
 circumstances and conditions." This section also provided, 
 however, that upon application by the carrier the Commis- 
 sion might authorize a less charge for the longer haul. 
 But the carriers set up the contention that such an appU- 
 cation need be made to the Commission only when the 
 two hauls were made "imder substantially similar cir- 
 cumstances and conditions," and that any circumstances 
 which seemed to them to constitute a dissimilarity of 
 condition which would justify a discriminatory charge 
 operated ipso facto to exempt them from the restraints of 
 this section and authorized them to give preferential rates. 
 Thus the carrier decided primarily whether the two hauls 
 [700] 
 
Discrimination Between Localities [ § 782 
 
 were under similar conditions, leaving to the Conunission 
 only such authority over the rates established as was 
 conferred upon it by the second and third sections of the 
 Act.' This construction of the Fourth Section was adopted 
 both by the Commission i" and by the Supreme Court." 
 In so holding they were no doubt influenced by the fact 
 that the English Act, on which this clause was based, had 
 been so construed by the English courts. ^^ Thereafter the 
 power of the Commission to grant exemption from the 
 rule of equality set up in the Act became practically use- 
 less,^' and application was made to it only in extraordi- 
 nary cases, such as the failure of crops ''' and the sudden 
 rush to the Klondike." Of course, the decision of the 
 carrier as to the existence of a dissimilarity of circum- 
 stance and condition was subject to review by both the 
 Commission and the courts, but if the carrier had estab- 
 lished a rate which, even though discriminatory, was one 
 
 " The philosophy of the Act as 
 expressed by Judge Shiras in Van 
 Patten v. Chicago, M. & St. P. Ry., 
 was that competition would reduce 
 the rates to a fair amount at all com- 
 petitive points, and that the Fourth 
 Section would then keep the rates at 
 non-competitive points down to the 
 level of the competitive rates. The 
 courts, however, finally decided, in 
 view of the limitation of the section 
 to cases where the conditions were 
 substantially similar, that competi- 
 tion with other railroads would 
 justify a lower rate for the longer 
 haul, and as practically all cases of 
 the sort before the passage of the 
 Act had been due to the competition 
 of other railways, this decision in 
 effect qualified the whole section. 
 
 '» In re L. & N. Ry., 1 I. C. C. 31, 
 1 Int. Com. Rep. 278. But the Com- 
 mission abandoned this view in 
 Georgia Railroad Commission v. 
 Clyde S. S. Co., 5 I. C. C. Rep. 324. 
 
 " Interstate Commerce Commis- 
 sion v. A., T. & S. F. Ry., 50 Fed. 
 295; Interstate Commerce Commis- 
 sion & C, N. O. V. T. P. Ry., 56 
 Fed. 925; Behhner v. L. & N. Ry., 
 71 Fed. 835; Interstate Commerce 
 Commission v. Ala. Mid. Ry., 168 
 U. S. 144, 42 L. ed. 414, 18 Sup. Ct. 
 45; L. & N. Ry. v. Behhner, 175 
 U. S. 648, 44 L. ed. 309, 20 Sup. Ct. 
 209; E. T., V. & G. Ry. v. Interstate 
 Commerce Commission, 181 U. S. 1, 
 45 L. ed. 719, 21 Sup. Ct. 516. 
 
 " A good account of the working 
 of the Fourth Section before the 
 amendment of 1910 may be found in 
 City of Spokane v. No. Pac. Ry., 21 
 I. C. C. 400. 
 
 " Phipps V. London & N. W. Ry., 
 1892, 2 Q. B. 299. 
 
 " Re F. E. & M. V. Ry., 6 I. C. C. 
 Rep. 293; World's Fan-, Re R. W. 
 & O. Ry., 6 I. C. C. Rep. 328. 
 
 15 Re A., T. & S. F. Ry., 7 I. C. C. 
 Rep. 593. 
 
 [701] 
 
§ 783 ] Railroad Rate Regulation 
 
 which the fourth section authorized, it could not be con- 
 demned as illegal, for what the law authorizes cannot be 
 unlawful. It was evident, however, that this construction 
 of the Act vested in the carrier the power to make a 
 primary decision on a question which was essentially 
 public in its nature.*" From the standpoint of public 
 policy, this. was not a desirable situation. 
 
 § 783, The Fourth Section Amendment of 1910. 
 
 The result reached by the construction placed upon the 
 fourth section in its original form was so far from the 
 legislative intent that in 1910 the section was amended by 
 the omission of the phrase as to similarity of circum- 
 stances and conditions, and at the same time the maximum 
 through rate was fixed at an amount not to exceed the 
 sum total of the intermediate rates. This is an unyielding 
 rule from which there can be no relief even though the 
 existence of water competition be proved." Neither may 
 it be evaded through the establishment of blanket rates, 
 for these are subject to the limitation that from no part 
 of the group covered by them may a lower rate be con- 
 structed on a combination of locals.^* It was also pro- 
 vided that if rates were reduced in order to meet water 
 competition, the carrier might not increase the rates unless 
 the Commission should find that such proposed increase 
 rests upon some change of condition other than the elimi- 
 nation of water competition, but it has been held that the 
 suspension of lake navigation during four months of the 
 year is not an "elimination of water competition" within 
 the meaning of the Act.*^ The Commission has also held 
 
 " T. & P. Ry. V. Interstate Com- '"American Insulated Wire & 
 
 nieroe Commission, 162 U. S. 197, Cable Co. v. C. & N. Ry., 26 I. C. C. 
 
 40 L. ed. 940, 16 Sup. Ct. 666. 415. This clause does not apply to 
 
 " National League of Commission rate reductions made before June 
 
 Merchants of U. S. v. A. C. L. Ry., 18, 1910. Westbound Lake-and- 
 
 20 I. C. C. 132. Rail, Knit Goods Commodity Rates, 
 
 '8 Hydraulic Press Brick Co. v. 32 I. C. C. 54. 
 A'andaUa Ry., 15 I. C. C. 175. 
 [702] 
 
Discrimination Between Localities [ § 783 
 
 that the fact that because of the likelihood of water 
 competition, a carrier makes a rate which may not be 
 compensatory, does not of itself render unreasonable and 
 unjust an increase to a remunerative basis. ^^ The effect 
 of this amendment is to shift from the carrier to the Com- 
 mission the power to decide as a primary question whether 
 circumstances justifying a discriminatory long-haul rate 
 exist. This construction of the section was attacked by 
 the carriers, who also set up that if it was correct then 
 this section as amended was unconstitutional. But in 
 June, 1914, the Supreme Court decided against the car- 
 riers on both points, ^^ and it may now be taken as estab- 
 lished that a less charge for a long haul than for a short 
 one included therein is absolutely prohibited unless first 
 authorized by the Commission.^^ Notwithstanding this 
 change in the provisions of the fourth section it would 
 seem that decisions of the Commission and of the courts 
 previous to 1910 as to when the carrier would be justified 
 in departing from the provisions of the Act would still be 
 of value in ascertaining the rules of law by which the 
 Commission must be governed in giving effect to this 
 clause. Dissimilarities alleged by the carriers and sus- 
 tained by the Commission or the courts prior to the 
 amendment of 1910 will presumably be sufficient to 
 convince the Commission that a less charge for a longer 
 haul should be allowed. This is all the more true since 
 the Commission in making an order under the fourth 
 section is not exercising a new and additional authority 
 over undue discrimination, but is only using a power 
 which it already had under section 3.^' The significance 
 of the fourth section lies not in any increase in the author- 
 
 ^^ Scrap-iron Rates between Commission of Nevada v. So. Pac. 
 
 Duluth and Chicago, 28 I. C. C. 467. Ry., 21 I. C. C. 329; City of Spo- 
 
 " Intermountain Rate Cases, 234 kane v. No. Pac. Ry., 21 I. C. C. 
 
 U. S. 476, 58 L. ed. 1408, 34 Sup. Ct. 400. 
 
 986. =' City of Spokane v. No. Pac. Ry., 
 
 " Colorado Coal Traffic Ass'n v. 21 I. C. C. 400. 
 C. & S. Ry., 19 I. C. C. 478; Railroad 
 
 [703] 
 
§ 784 ] Railroad Rate Regulation 
 
 ity of the Commission, but in the rigid limitation placed 
 upon the carriers in the making of rates. 
 
 § 784. General principles governing the Fourth Section. 
 
 It was the intent of Congress to put a stop to this form 
 of discrimination prohibited in section 4 in so far as that 
 could properly be done.^- An absolute prohibition of that 
 kind of preference is within the power of Congress, ^^ and 
 could not be complained of unless the carrier's property 
 was being confiscated.^* But the Commission itself, al- 
 though the opportunity has frequently been presented to 
 it, has never indorsed a rigid long-and-short-haul section. 
 Indeed, the present provision is drawn along lines which 
 received its tentative approval.^'' As the Act now stands, 
 discrimination in rates in favor of a more distant point 
 and against a less distant intermediate one is absolutely 
 forbidden until it has been authorized by the Commission. 
 But the power of the Commission is confined to authori- 
 zation. Such discriminations, even though in the public 
 interest, cannot be required. They can be made only on 
 the initiative of the carrier.^* But the fourth section of 
 the Act, unlike the second and third sections, applies 
 only to discriminatory charges for transportation. Demur- 
 rage and similar charges are not included in it.^' No ques- 
 tion can arise under section 4 unless the rate to the farther 
 distant point is less than the rate to an intermediate 
 point. ^^ Inasmuch as section 4 deals only with the one 
 form of discrnnination, which is governed by rules peculiar 
 to it, it may be violated under a state of facts not con- 
 
 " In re Lumber Rates, 25 I. C. C. » Pennsylvania Millers' State 
 
 50. Ass'n V. P. & R, Ry., 8 I. C. C. Rep. 
 
 ^* In re Application of Southern 531. 
 
 Pacific Ry., 22 I. C. C. 336. ™ Milk Producers' Ass'n v. D., L. 
 
 ™ Raih-oad Commission of Nevada & W. Ry., 7 I. C. C. Rep. 92; Wheel- 
 
 V. South. Pac. Ry., 21 I. C. C. 329. ing Corrugating Co. v. B. & O. Ry., 
 
 " lb. 335. 18 I. C. C. 125; League &c. v. Oregon 
 
 28 Thatcher v. Fitchburg Ry., 1 Int. Short Line, 18 I. C. C. 562. 
 Com. Rep. 356. 
 [704] 
 
Discrimination Between Localities [ § 785 
 
 stituting a violation of section 3.^^ The Act permits but 
 does not authorize the carrier to make the same charge 
 for a long haul as for a short one included in it.'^ But 
 it expressly provides that the aggregate charge for the 
 long haul shall never be greater than the sum total of the 
 intermediate rates.'' In determiaing whether this pro- 
 vision of the Act has been observed, the Commission does 
 not look at the lowest possible combination of intermediate 
 fares, but at the lowest combination of fares that are 
 pubUshed and filed as available for interstate travel or in 
 making up interstate fares. If a carrier wishes to exclude 
 from this consideration any of its purely intrastate fares, 
 it must refrain from publishing and filing them as avail- 
 able for use in making up interstate fares.'* The charge 
 for the long haul must not be unreasonably low,'^ nor 
 must that for the short haul be unreasonably high.'^ 
 
 § 785. Relation between long-haul and short-haul rates. 
 
 As rates to the long-distance point are frequently deter- 
 mined by factors beyond the carrier's control, it is difficult 
 to fix any exact relation between such rates and those to an 
 intermediate point. This element in the situation is, 
 however, not to be altogether disregarded, and the Com- 
 mission has tried to meet it by holding that the intermedi- 
 ate rate should not exceed the long-distance rates plus 
 a reasonable local charge from the more remote point 
 back to the intermediate point,'' and should perhaps, in 
 
 " In re Suspension of Rates on a higher rate for a shorter distance 
 
 Packing-House Products, 31 1. C. C. involving a violation of the P'ourth 
 
 68. Section. Adjustment should be 
 
 '- Kellogg Toasted Corn Flake Co. made with respect to the latter rate. 
 
 V. M. C. Ry., 24 I. C. C. 604. Iowa-Minnesota Cement Rates, 28 
 
 " Arabol Mfg. Co. v. S. B. Ry., 26 I. C. C. 477. 
 I. C. C. 429. '^ Southern Timber & Land Co. v. 
 
 " Conference Ruling, 298. So. Pac. Ry., 18 I. C. C. 232. 
 
 '^ Kimberly v. C. & O. Ry., 17 " Monroe Progressive League v. 
 
 I. C. C. 335. A rate othei-wise reason- St. L., I. M. & S. Ry., 15 I. C. C. 534; 
 
 able is not shown to be unduly low by Valley Flour Mills v. A., T. & S. F. 
 
 the presence in the carrier's tai-iff of Ry., 16 I. C. C. 73. 
 
 45 [ 705 ] 
 
§ 785 ] Railroad Rate Regulation 
 
 some cases, be even less.^ This may be determined 
 largely by the amount of the traffic involved. Differen- 
 tials above rates to basing points may be higher where 
 long-haul traffic to local stations is meager.^' Especially 
 is the carrier estopped from complaining when the Com- 
 mission, in establishing a new schedule of rates, merely 
 maintains the same ratio of difference which the carrier 
 itself had made.^ Under the fourth section as amended 
 in 1910 the Commission may prescribe the maximum differ- 
 ence in rates which may be made against the interme- 
 diate point, or may fix a rate at the more distant point 
 below which the carrier must not go, or may define the 
 territory from which a higher intermediate charge may be 
 made.*^ When the Conunission has established an in- 
 herently reasonable rate to a given point, a carrier may 
 not charge a higher rate to an intermediate point. *^ Like- 
 wise if a carrier publishes for interstate use a combina- 
 tion of local State rates which in the aggregate is lower 
 than the through charge authorized by the Commission, 
 the rule of section four must be observed unless permission 
 to the contrary has been obtained from the Commission.^' 
 The carrier must make changes in its schedule with due 
 regard to the provisions of the fourth section. Hence an 
 increase of rates to intermediate points may necessitate 
 advances in rates to more distant points in order to avoid 
 a violation of the fourth section.** But a carrier may not 
 bring its schedules into conformity with the fourth section 
 by changes in classification, nor by cancellation of a com- 
 modity rate leaving a class rate or a combination rate 
 
 38 Bluefield Shippers' Ass'n v. N. & « City of Spokane v. N. P. Ry., 
 
 W. Ry., 22 I. C. C. 619. 19 I. C. C. 162. 
 
 '9 Board of Trade of Carroliton « Iowa State Board of R. R. Com- 
 
 V. C. of G. Ry., 28 I. C. C. 154. missioners v. A. E. Ry., 28 I. C. C. 
 
 *" Interstate Commerce Commis- 563. 
 
 sion V. Un. Pao. Ry., 222 U. S. 541, ** Transcontinental Rates from 
 
 56 L. ed. 308, 32 Sup. Ct. 108. Group F., 28 I. C. C. 1; Kansas- 
 
 " City of Spokane v. N. P. Ry., 21 Iowa Brick Rates, 28 I. C. C. 285; 
 
 I. C. C, 400. Nassau Advancement Ass'n v. C. & 
 
 N. W. Ry., 28 I. C. C, 459, 
 
 [706] 
 
Discrimination Between Localities [ § 786 
 
 to apply, nor by cancellation of a rate with provision that 
 in lieu thereof a rate in some other tariff shall apply, nor by 
 correction of error in the tariff, nor by addition or elimination 
 of routes without change in the list of participating carriers, 
 nor by any other change which does not leave the rate, fare, 
 or charge in substantial compliance with the law.^^ 
 
 § 786. Interpretation of the Fourth Section. 
 
 In applying the fourth section to the cases that come 
 before it for adjudication, the Commission is obliged to 
 determine many questions of fact. The primary purpose 
 of the fourth section is to protect intermediate points 
 against discrimination growing out of the giving of rel- 
 atively more favorable rates to points farther distant. The 
 interests of the more remote point were thought to be 
 sufficiently protected by the competitive conditions which 
 it enjoyed, and the prohibition of a higher rate to the 
 intermediate point it was hoped would automatically 
 give that point a share in the competitive advantages of 
 its more distant rival. Such being the object of this pro- 
 vision, it is obvious that if a point is not an intermediate 
 one, it cannot avail itself of the protection of the fourth 
 section. It is also clear that the Commission cannot 
 exercise jurisdiction unless all the points involved lie in 
 the United States. If either the intermediate or the more 
 remote point is in a foreign country, the fourth section 
 cannot apply. *^ The usual case presents no difficulty, 
 but it has been held that a point on a branch line is not 
 an intermediate one,^'' while a point on a lateral line ^* or 
 on a subsidiary line of the same system but without phys- 
 ical connection with the main line may be."*^ But a com- 
 
 *» Conference Ruling, 293. *' American Coal Co. v. B. & O. 
 
 « Conference RuUng, 318. Ry., 17 I. C. C. 149. 
 
 " Baer Brothers Mercantile Co. v. "" Nebraska State Railway Com- 
 
 Mo. Pac. Ry., 13 I. C. C. 329; Mil- mission v. C, B. & Q. Ry., 23 I. C. C. 
 
 waukee Electric Co. v. C, M. & St. 121; Lewis v. C, B. & Q. Ry., 25 
 
 P. Ry., 15 I. C. C. 468. See also I. C. C. 97. 
 
 Conference Ruling, 304, e. /. 
 
 [707: 
 
§ 787 ] Railroad Rate Regulation 
 
 plaining point is not necessarily an intermediate one within 
 the meaning of the fourth section when the traffic to 
 the more remote point moves by a route not usually 
 taken by traffic to the complaining point.'" Neither does 
 a carrier violate the Act when it maintains a joint rail- 
 lake-and-rail rate higher than the rail-and-lake rate to 
 the more distant point if the lake boats do not stop at 
 the complaining point/^ On the same principle it was 
 held that there was no violation of section 4 when a lesser 
 rate was charged on bananas from New Orleans to Burling- 
 ton, Iowa, than to Kansas City, Mo., and intermediate 
 points, since the joint rate quoted by way of Kansas City 
 was merely a "paper" rate on which traffic did not move, 
 the bananas destined for Burlington being shipped by way 
 of St. Louis.'^ So also a merely theoretical or paper rate, 
 not used and unknown to the defendant until casually 
 discovered, will not be accepted as affording a just basis 
 for an order for reparation on shipments made to an in- 
 termediate point at a slightly higher rate.*' The actual 
 facts of traffic rather than the relative physical position 
 of two points is the test as to whether one is intermediate 
 as regards the other. But on the other hand it has been 
 held in a State court interpreting a similar statute that 
 where a railroad company charges higher rates for carry- 
 ing freight a less distance than its pubhshed rates for 
 carrying it a greater distance in the same direction over 
 the same road, it violates the law, even though it does not 
 actually carry any freight the greater distance." 
 
 § 787. Application of the Fourth Section. 
 
 It should be noted that the long-and-short haul rule of 
 
 ™ Merchants' Freight Bureau of *' Missouri & Kansas Shippers' 
 
 Little Rock v. Mo. Pac. Ry., 21 Ass'n v. M., K. & T. Ry., 12 I. C. C. 
 
 I. C. C. 573. 483. 
 
 " City of Ashland v, N. Y. C. & " Seawell v. Kansas City, F. S. & 
 
 H. R. Ry., 20 I. C. C. 2. M. Ry., 119 Mo. 222, 24 S. W. 1002. 
 
 " Topeka Banana Dealers' Ass'n Compare McGrew v. Missouri P. 
 
 V. St. L. & S. F. Ry., 11 I. C. C. 620. Ry., 177 Mo. 533, 76 S. W. 995. 
 
 [708] 
 
Discrimination Between Localities [ § 787 
 
 the fourth section applies only to traffic over the same 
 line or route in the same direction. If there are two lines 
 between two points, — one direct and the other circuitous, — 
 can an intermediate point on the direct line complain of a 
 lower rate by the circuitous line? The Commission finds 
 little merit in the contention that lower rates should be 
 made over circuitous lines.'" Traffic should be allowed to 
 seek its natural avenues and should not be forced into 
 roundabout and indirect routes,''* but nevertheless, discrim- 
 ination based on this factor has teen sustained."' What 
 is a circuitous line is a question of fact to be determined in 
 each case, but the Commission has held that a line 103 miles 
 or 15 per cent longer than the direct line is a circuitous 
 line.^^ Whether a haul is longer or shorter should be de- 
 termined by the length of the shortest route in each case.^^ 
 When a point has shown that it is intermediate within 
 the meaning of the fourth section, it must then show 
 that it is subject to a higher rate than a more distant 
 point. This is a simple question of mathematics, but in 
 the process comparison may be made only between rates 
 of the same kind, — that is, import rates are to be com- 
 pared only with import rates, export rates with export 
 rates, transshipment rates with transshipment rates, pro- 
 portional rates with proportional rates, and excursion, com- 
 mutation, mileage, party rate and half fares are to be 
 compared only with fares of the same character."" And 
 where two connecting carriers have united in a joint tariff, 
 
 56 Transcontinental Rates from ^9 xjh-ic v. L. S. & M. S. Ry., 9 
 
 Group F., 28 I. C. C. 1. I. C. C. Rep. 495. See also Hill v. 
 
 5» Rates on Cotton Seed and Its N. C. & St. L. Ry., 6 I. C. C. Rep. 
 
 Products, 28 I. C. C. 219. 343; Milwaukee Chamber of Com- 
 
 " McCuUough V. L. & N. Ry., 25 merce v. C, M. & St. P. Ry., 7 I. C. 
 
 I. C. C. 48; In re Lumber Rates, 25 C. Rep. 481. 
 
 I. C. C. 50; Edwards & Bradford «» Baltimore Chamber of Com- 
 
 Lumber Co. v. C, B. & Q. Ry., 25 merce v. B. & O. Ry., 22 I. C. C. 
 
 I. C. C. 93. 596; Southern Illinois Millers' Ass'n 
 
 68 In re Rates on Salt, 24 I. C. C. v. L. & N. Ry., 23 I. C. C. 672; In re 
 192; Edwards & Bradford Lumber Lumber Rates, 25 I. C. C. 50; Con- 
 Co. V. C, B. & Q. Ry., 25 I. C. C. 93. ference Rulings, 2996, 304o, 310. 
 
 [709] 
 
§ 788 ] Railroad Rate Regulation 
 
 they form for the connected roads a new and mdependent 
 line, and the through tariff on the joint line is not the 
 standard by which the separate tariff of either company 
 is to be measured in determining whether such separate 
 tariff violates the long-and-short-haul clause.*^ But in case 
 of suit brought all participating carriers should be joined."^ 
 
 § 788. Principles governing deviation from the Fourth 
 Section. 
 
 The Act, both in its original form and in the amend- 
 ment of 1910, recognized the necessity of making excep- 
 tions to a rigid long-and-short-haul rule, and accordingly 
 the Commission was empowered to authorize a less charge 
 for a. long haul than for a shorter one included in it. The 
 obvious intent of Congress was defeated, however, by the 
 unfortunate phrasing of the original Act. The clause "imder 
 substantially similar circumstances and conditions" was 
 so construed as to deprive the Commission of the most 
 important part of its power in the matter. By the amend- 
 ment of 1910 this clause was removed from the Act,, and 
 there can now be no rate discrimination in favor of a more 
 distant or against an intermediate point unless it is a.u- 
 thorized by the Commission. The Act itself gives no 
 hint as to what considerations will justify such exceptions. 
 The whole matter is left to the discretion of the Commis- 
 sion subject of course to review by the courts.*^ But even 
 in its original form the exceptions made by the carriers 
 were subject to review by the Commission and by the 
 courts, and this body of decisions, which is quite consider- 
 able in amount, affords much light as to the principles 
 by which the Commission is guided. Each case, however, 
 
 «i Chicago & N. W. Ry. v. Osborne, Co. v. P. & L. E. Ry., 2 Int. Com. 
 
 62 Fed. 912, 3 C. C. A. 347, reversing Rep. 436. 
 
 Osborne v. Chicago & N. W. Ry., 48 '^ Moise Brothers' Co. v. C, R. I. 
 
 Fed. 49, and Junod v. Chicago & N. & P. Ry., 16 I. C. C. 550. 
 
 W. Ry., 47 Fed. 290; United States v. «» Intermountain Rate Caaes, 234 
 
 Mellen, 53 Fed. 229; Imperial Coal U. S. 476, 58 L. ed. 1408, 34 Sup. Ct. 
 
 986. 
 
 [710] 
 
Discrimination Between Localities [ § 789 
 
 is in a sense a law unto itself, and must stand upon its 
 own facts. No situation can furnish an exact precedent for 
 another.** In passing upon applications for relief from 
 the operation of the fourth section, the Commission must 
 take into consideration the whole situation from the stand- 
 point of both carrier and shipper,"'' and while the existence 
 of a wrong cannot of itself justify its continuance, the 
 Commission must nevertheless be guided to some extent 
 by conditions as it finds them.^" While the clause as to 
 dissimilarity of circumstances and conditions was omitted 
 from the Act by the amendment of 1910, it is on the 
 ground of such dissimilarity that the Commission usually 
 grants exemption from the rule of section 4, but in so doing 
 the Commission considers not only whether the circum- 
 stances and conditions at the two points are unUke, but 
 also whether the dissimilarity justifies a deviation from the 
 long-and-short-haul clause.*^ The burden of showing this 
 is on the carrier,*^ and if it presents no defense for its 
 violation of the fourth section, it must remove the dis- 
 criminations complained of."° 
 
 § 789. Recognition of carrier's right to relief. 
 
 The Commission now views discrimination between in- 
 termediate and long-distance points more leniently than 
 it did before the adoption of the amendment of 1910. 
 Formerly it regarded with disfavor the maintenance of a 
 lower rate for a longer haul than for a shorter one included 
 within the longer, and the circmnstances and conditions 
 obtaining at the more distant point which were reUed upon 
 to justify it must not only be clearly shown to exist, but 
 
 «* Bluefield Shippers' Ass'n v. N. & Spokane v. No. Pac. Ry., 21 I. C. C. 
 
 W. Ry., 22 I. C. C. 519. 400. 
 
 "' City of Spokane v. No. Pac. Ry., '* Carstens Packing Co. v. Oregon 
 
 21 I. C. C. 400. Short Line Ry., 17 I. C. C. 324; 
 
 " Bluefield Shippers' Ass'n v. N. & Transcontinental Commodity Rates, 
 
 W. Ry., 22 I. C. C. 519. West Bound, 26 I. C. C. 456. 
 
 " Heileman Brewing Co. v. C, M. "' Commercial Club of Duluth v. 
 
 & St. P. Ry., 16 I. C. C. 396; City of B. & O. Ry., 27 I. C. C. 639. 
 
 [711] 
 
§ 790 ] Railroad Rate Regulation 
 
 also to exercise a potent or controlling influence in compel- 
 ling the lower rate.'" But it now holds that its power is 
 not to be exercised arbitrarily, and that it is under a duty 
 to permit a higher intermediate charge whenever the result- 
 ing rates will not contravene the Act because of injustice, 
 unreasonableness, or undue discrimination. '^ It is the 
 function of the Commission to ascertain whether the 
 facts set up by the carrier in justification of its discrimina- 
 tory rates really exist. If they do, the Commission recog- 
 nizes that the carrier may claim relief from the fourth 
 section as of right. Even the fact that adherence to the 
 fourth section would entail only a slight loss of revenue 
 to the carrier is held to be no reason for denying it relief.^" 
 In determining this question it takes into account both 
 the prejudice against the intermediate point and the 
 rate which it is required to pay.''' It must also appear 
 that the long-distance rate was not voluntarily reduced 
 by the carrier, but was forced down.'^* If the applicant 
 for relief controls the long-distance rate and can deter- 
 mine what effect shall be given to conditions which are 
 supposed to justify the reduction at the farther point, 
 then the Commission may also decide whether the car- 
 rier is justified in giving to those conditions the effect 
 which it does, and may fix the extent to which those con- 
 ditions may influence the carrier's rates." 
 
 § 790. Conditions justifying relief from the Fourth Section. 
 
 Whenever a carrier discriminates in favor of a point in 
 
 '« Bovaird Supply Co. v. A., T. & S. F. Ry. v. United States, 191 Fed. 
 
 S. F. Ry., 11 I. C. C. 56. 856. 
 
 " Railroad Commission of Nevada '^ In re Lumber Rates, 25 L C. C. 
 
 V. So. Pac. Ry., 21 I. C. C. 329; 50. 
 
 Bluefield Shippers' Ass'n v. N. & '' In re Application of Southern 
 
 W. Ry., 22 I. C. C. 519. That it is Pacific Co., 22 I. C. C. 366. 
 
 the duty of the Commission to allow '* Grand Junction Chamber of 
 
 higher intermediate rates when it Commerce v. D. & R. G. Ry., 23 
 
 would not result in a violation of I. C. C. 115. 
 
 any other section of the Act is also " Bluefield Shippers' Ass'n v. N. 
 
 the view of the courts. A., T. & & W. Ry., 22 I. C. C. 519; Bowling 
 
 [712] 
 
Discrimination Between Localities [ § 790 
 
 order to meet circumstances and conditions not of its 
 own creation, and whenever such discrimination seems 
 reasonable and necessary, it may be justified in claiming 
 relief from the fourth section.'* But it must clearly 
 appear that it is differences in transportation conditions 
 and not the vicissitudes of shippers which produced the 
 difference in rates.''' Rate schedules may not be con- 
 structed for the purpose of alleviating individual misfor- 
 tune growing out of bad business judgment or unfavorable 
 commercial conditions.'* But in appljang the Act the 
 Commission should take into account whatever would 
 properly be regarded by the carrier apart from the provi- 
 sions of the Act as matters which warranted differences in 
 charges.'" But the fact that there is a greater market 
 for a commodity at the longer than at the shorter distance 
 point does not create a substantial dissimilarity of cir- 
 cumstances and conditions,*" nor do joint tariffs nor an 
 arrangement by the carriers with a wagon transportation 
 company extending through lines to points not reached by 
 railway.*' One of the most important factors is the cost of 
 the service rendered. From this standpoint the long haul 
 possesses some inherent advantages over the short haul. 
 There are certain fixed charges which are the same regard- 
 less of the length of the haul, and the greater its length the 
 less the charge per ton-mile will be.*^ The same is true of 
 passenger service.*' It is also obvious that traffic can be 
 more cheaply handled per ton-mile in a densely populated 
 
 Green Business Men v. L. & N. Ry., P., C, C. & St. L. Ry., 13 I. C. C. 
 
 24 I. C. C. 228. 87. 
 
 '» Pittsburgh Plate Glass Co. v. »» Fewell v. R. & D. Ry., 7 I. C. C. 
 
 P., C, C. & St. L. Ry., 13 I. C. C. 87. Rep. 354. 
 
 " Ponchatoula Farmers' Ass'n v. " Gary v. Eureka Springs Ry., 7 
 
 I. C. Ry., 19 I. C. C. 513. I. C. C. Rep. 286. 
 
 ™ Florida Fruit & Vegetable Ass'n '^ Indianapolis Freight Bureau v. 
 
 V. A. C. L. Ry., 17 I. C. C. 552, 22 C., C., C. & St. L. Ry., 15 I. C. C. 
 
 I. C. C. 11; Railroad Commission of 504. 
 
 Kansas v. A., T. & S. F. Ry., 22 «» Commercial Club of Salt Lake 
 
 I. C. C. 407. City V. A., T. & S. F. Ry., 19 I. C. C. 
 
 "Pittsburgh Plate Glass Co. v. 218. 
 
 [713] 
 
§ 791 ] Railroad Rate Regulation 
 
 region where the volume of traffic is large than in a thinly 
 settled region where the fixed charges must be borne by a 
 smaller amount of business.** Differences in the physical 
 configuration of the country may also render the operation 
 of one part of a line so expensive as to justify a higher 
 charge. The elimination of grades, larger trainloads, and 
 increased car capacity may affect rates.*" All these factors 
 may favor or even justify a deviation from the fourth 
 section. But something more than difference in cost of 
 service must usually be found. The Commission has 
 held that that alone is not a sufficient justification,** 
 although it has also held that whenever a schedule is 
 estabUshed for a one-line haul, certain arbitraries should 
 be allowed for a two-line haul, since the cost of service is 
 greater and the carrier should be allowed to charge more.*' 
 
 § 791. Competition as ground for relief from the Fourth 
 Section. 
 
 The chief argument offered by the carriers as justifying 
 a departure from the long-and-short-haul rule is the 
 existence of competition at the farther distant point.** 
 Where this is clearly shown,** and where the competition 
 is real and substantial,*" and where no relief seems avail- 
 able to the carrier except a reduction in rates,'^ this 
 argument is persuasive.*^ The competition may be in the 
 
 '* Memphis Freight Bureau v. F. ^ Interstate Commerce Commis- 
 
 S. & W. Ry., 11 I. C. C. 1. sion v. Ala. Mid. Ry., 168 U. S. 144, 
 
 ^ Meeker & Co. v. L. V. Ry., 21 42 L. ed. 414, 18 Sup. Ct. 45. 
 
 I. C. C. 129. ^E. T., V. & G. Ry. v. Interstate 
 
 ^ Grand Junction Chamber of Commerce Commission, 181 U. S. 1, 
 
 Commerce v. D. & R. G. Ry., 23 45 L. ed. 719, 21 Sup. Ct. 516. 
 
 I. C. C. 115. " Iowa Grain Rates, 28 I. C. C. 
 
 " Ontario Iron Ore Co. v. N. Y. C. 354. 
 
 & H. R. Ry., 21 I. C. C. 204; Iowa '2 Decisions holding that competi- 
 
 State Board of Raiboad Commis- tion justifies a departure from the 
 
 sioneis V. A. E. Ry., 28 1. C. C. 563. rule of the Fourth Section are too 
 
 " A more detailed consideration of numerous for citation. Among them 
 competition as a factor justifying are the following: Interstate Corn- 
 relief from the Fourth Section will merce Commission v. Alabama Mid- 
 be found in sees. 792-802. land Ry., 168 U. S. 144, 42 L. ed. 
 
 [714] 
 
Discrimination Between Localities [ § 791 
 
 transportation of one commodity only, e. g., coffee, and 
 such competition does not require a competitive rate on 
 other commodities, and in some circumstances would not 
 justify such a rate."^ But while the facts of each case may 
 present peculiarities which have an important bearing on 
 the result, it is now well settled that a circuitous line may 
 deviate from the rule of the fourth section where it does 
 so to meet the competition of a direct line, provided that 
 the higher intermediate rate is still a reasonable rate.^^ 
 It is equally well settled that land carriers may reduce 
 
 414, 18 Sup. Ct. 45, B. & W. 433; 
 East Tenn., V. & G. Ry. v. Interstate 
 Commerce Commission, 181 U. S. 1, 
 45 L. ed. 719, 21 Sup. Ct. 516; Inter- 
 state Commerce Commission v. Clyde 
 S. S. Co., 181 U. S. 29, 45 L. ed. 729, 
 21 Sup. Ct. 512; Interstate Com- 
 merce Commission v. Louisville & 
 N. R. R., 190 U. S. 273, 47 L. ed. 
 1047, 23 Sup. Ct. 687; Ex parte 
 Koehler, 31 Fed. 315; Interstate 
 Commerce Commission v. A., T. & 
 S. F. Ry., 50 Fed. 295; Interstate 
 Commerce Commission v. W. & A. 
 Ry., 88 Fed. 186; Interstate Com- 
 merce Commission v. Southern Ry., 
 105 Fed. 703; Interstate Commerce 
 Commission v. Southern Ry., 122 
 Fed. 800; Bovaird Supply Co. v. 
 A., T. & S. F. Ry., 11 I. C. C. 56; 
 Rocky HiU Buggy Co. v. Southern 
 Ry., 11 I. C. C. Rep. 229; PhilUps- 
 Trawick-James Co. v. So. Pac. Ry., 
 11 I. C. C. 644; Pecos Mercantile 
 Co. V. A., T. & S. F. Ry., 13 I. C. C. 
 173; Johnston & Son Dry Goods Co. 
 V. A., T. & S. F. Ry., 13 I. C. C. 388; 
 City of Spokane v. No. Pac. Ry., 15 
 I. C. C. 376; Foster Lumber Co. v. 
 G. C. & S. F. Ry., 17 I. C. C. 385; 
 Paragon Plaster Co. v. N. Y. C. & 
 H. R. Ry., 19 I. C. C. 480; Nebraska 
 Material Co. v. C, B. & Q. Ry., 20 
 I. C. C. 89; In re Investigation of 
 
 Advances in Rates on Grain, 21 
 I. C. C. 22; City of Spokane v. No. 
 Pac. Ry., 21 I. C. C. 400; In re 
 Transportation of Wool, Hides and 
 Pelts, 23 I. C. C. 151; Bowling Green 
 Business Men v. L. & N. Ry., 24 
 I. C. C. 228; Lebanon Commercial 
 Club V. L. & N. Ry., 25 I. C. C. 277. 
 But in interpreting similar language 
 in the Constitution of Kentucky, 
 sec. 218, the court held that competi- 
 tion at the terminus of the long haul 
 does not prevent the carriage from 
 being under substantially similar cir- 
 cumstances and conditions. L. & N. 
 Ry. V. Commonwealth, 106 Ky. 633. 
 
 '' Traffic Association of St. Louis 
 Coffee Importers v. I. C. Ry., 28 
 I. C. C. 484. 
 
 ^* Among the numerous decisions 
 are the following: Wright Wire Co. 
 v. P. & L. E. Ry., 21 I. C. C. 64; 
 Gile & Co. V. So. Pac. Ry., 22 I. C. C. 
 298; In re Rates on Salt, 24 I. C. C. 
 192; McCuUough v. L. & N. Ry., 25 
 I. C. C. 48; In re Lumber Rates, 25 
 I. C. C. 50; Edwards & Bradford 
 Lumber Co. v. C, B. & Q. Ry., 25 
 I. C. C. 93; In re Southern Ry., 25 
 I. C. C. 407; National Refrigerator 
 & Butchers' Supply Co. v. St. L., I. 
 M. & M. Ry., 26 1. C. C. 524; Thomas 
 Iron Co. V. Penn. Ry., 28 I. C. C. 
 608. 
 
 [7151 
 
§ 792 ] Railroad Rate Regulation 
 
 their rates at long distance points in order to meet water 
 competition,^^ but this does not authorize them to reduce 
 their rates so far as to suppress water competition,'" nor 
 are they free to meet water competition in whatever way 
 and at whatever point and to whatever extent they see 
 fit." Market competition, growing out of the efforts of 
 rival carriers to transport to a given center from various 
 points of origin on their respective lines commodities which 
 compete for the market of that center, must always be 
 considered when it exists, and may indeed be the deter- 
 mining factor in an application for a deviation from the 
 rule of the fourth section.^^ Competition however is so 
 easily alleged, and so easily made to appear, and assumes 
 so many elusive forms that applications based upon it 
 must be carefully scrutinized in order to prevent fraud. 
 
 Topic E. Competition as a Factor in Rate Making 
 
 § 792. Competition as a justification for discrimination. 
 
 Few questions come before the Commission with greater 
 
 '5 Water competition is the jus- pers' Traffic Ass'n v. A., T. & S. F. 
 
 tification relied upon in innumerable Ry., 24 I. C. C. 570; In re Lumber 
 
 cases. Among them are the following: Rates, 25 I. C. C. 50; GUhs & Son v. 
 
 Darling & Co. v. B. & O. Ry., 15 P. B. & W. Ry., 26 I. C. C. 61; 
 
 I. C. C. 79; City of Spokane v. No. Gottron Bros. Co. v. G. & W. Ry., 
 
 Pac. Ry., 15 I. C. C. 376; Rogers v. 28 I. C. C. 38; Meridian Board of 
 
 Oregon Ry. & Nav. Co., 16 I. C. C. Trade v. A. G. S. Ry., 28 1. C. C. 360; 
 
 424; Bayou City Rice Mills v. T. & New England Investigation, 28 I. C. 
 
 N. O. Ry., 18 I. C. C. 490; Steinfeld C. 560. 
 
 & Co. V. I. C. Ry., 20 I. C. C. 12; «« Texarkana Freight Bureau v. 
 
 American Cigar Co. v. P. & R. Ry., St. L., I. M. & S. Ry., 28 1. C. C. 569. 
 
 20 I. C. C. 81; Fruit Growers' Ass'n «' City of Spokane v. No. Pac. Ry., 
 
 V. A. C. L. Ry., 20 I. C. C. 190; In- 19 I. C. C. 162. 
 
 ternational Salt Co. v. G. & W. Ry., '* IndianapoUs Freight Bureau v, 
 
 20 I. C. C. 530; In re Transportation C, C, C. & St. L. Ry., 16 I. C. C 
 
 of Wool, Hides & Pelts, 23 I. C. C. 276; Railroad Commission of Kansas 
 
 151; Escanaba Business Men's Ass'n v. A., T. & S. F. Ry., 22 I. C. C. 407: 
 
 V. A. A. Ry., 24 I. C. C. 11; Bowling In re Rates on Salt, 24 I. C. C. 192: 
 
 Green Business Men v. L. & N. Ry., Kellogg Toasted Corn Flake Co. v 
 
 24 I. C. C. 228; Raih-oad Commis- M. C. Ry., 24 I. C. C. 604; In re 
 
 sioners of Oregon v. So. Pac. Ry., Lumber Rates, 25 I. C. C. 50. 
 24 I. C. C. 273; Southwestern Ship- 
 
 [716] 
 
Discrimination Between Localities [ § 792 
 
 frequency than the effect which competition may be al- 
 lowed to have in justification of discriminating rates. This 
 is not considered in determining questions of discrim- 
 ination under section 2,^ but it is involved in both the 
 third and fourth sections of the Act. The third section 
 forbids "any undue or unreasonable preference or advan- 
 tage" to any person or place or description of traffic, 
 while the fourth section absolutely prohibits a lower 
 charge for a long haul than for a shorter one included 
 therein unless it has first been authorized by the Com- 
 mission. In suits under both sections the carriers have 
 availed themselves of the existence of competition at a 
 given point as an argument for sustaining their rates to 
 that point: — under the third section as a defense against 
 a charge of imdue discrimination, and under the fourth 
 section as justifying relief from the operation of this 
 rigid long-and-short-haul rule. The question therefore as 
 to what competition will justify a discriminatory rate is 
 almost constantly before the Commission, and while cer- 
 tain general principles have been developed in deaUng 
 with it, the question is still primarily one of fact which 
 must be settled anew in each case as it arises. In the 
 application of the third and fourth sections to a specific 
 state of facts, one important distinction between the two 
 sections presents itself at the outset. When a complaint 
 alleging undue discrimination under the third section 
 comes to the Commission for adjudication, the Commission 
 finds the alleged discrimination in existence as an accom- 
 phshed fact, and the burden of proving its unlawfulness 
 rests on him who complains of it. But under the fourth 
 section as amended in 1910, no discrimination of the 
 kind there prohibited can be put into operation until the 
 consent of the Commission has first been obtained. And 
 the burden of justifying the discrimination lies with the 
 carrier who seeks that consent. In a close case this 
 shifting in the burden of proof may be the determining 
 
 "° In re Advances on Manganese Ore, 25 I. C. C. 063. 
 
 [717] 
 
§ 793 ] Railroad Rate Regulation 
 
 factor. On the other hand, it must be recognized that the 
 third section is much more elastic than the fourth, and 
 there might be a violation of the rigid rule of the fourth 
 section under a state of facts which would not constitute a 
 violation of the third section,^ but a discrimination which 
 can be justified under section 4 is never a violation of 
 section 3.^ 
 
 § 793. Competition as a factor in rate making. 
 
 It is now well settled that competition at a given point 
 is a dissimilarity of conditions which may justify a lower 
 rate than to other points which are in all other respects 
 similarly situated. The Commission has always allowed 
 this to be shown, but it was with much reluctance that it 
 followed the precedents of the EngUsh courts and accepted 
 it as a complete justification. Now, however, both the 
 Commission and the courts regard competition with favor 
 as a circumstance to be encouraged, and allow it to have 
 whatever effect it can be shown to have in the making of 
 rates.' It has even been asserted that the carrier has a 
 "natural right" to make his rates low enough to meet 
 
 1 Kellogg Toasted Corn Flake Co. 45, B. & W. 433; Louisville & N. Ry. 
 V. M. C. Ry., 24 I. C. C. 604. v. Behlmer, 175 U. S. 648, 44 L. ed. 
 
 2 Bovaird Supply Co. v. A., T. & 309, 20 Sup. Ct. 209; East Tenn., V. 
 S. F. Ry., 11 I. C. C. 56. & G. Ry. v. Interstate Com. Comm., 
 
 2 This doctrine is now so well 181 U. S. 1, 45 L. ed. 719, 21 Sup. 
 
 established by a multitude of deci- Ct. 516; Interstate Com. Comm. v. 
 
 sions that specific citations are un- Clyde S. S. Co., 181 U. S. 291, 45 
 
 necessary. In the following cases, L. ed. 866, 21 Sup. Ct. 512. In 
 
 competition was sustained as a dis- addition to the above cases, while in 
 
 similarity of condition which justi- various stages below, see: Missouri 
 
 fied a less charge for a long haul before Pac. Ry. v. Texas & P. Ry., 31 Fed. 
 
 the adoption of the Amendment of 862; Ex parte Koehler, 31 Fed. 315; 
 
 1910. Cincinnati, N. O. & T. P. Ry. Interstate Com. Comm. v. Atchison, 
 
 V. Interstate Com. Comm., 162 U. S. T. & S. F. Ry., 50 Fed. 295; Inter- 
 
 184, 40 L. ed. 935, 16 Sup. Ct. 700; state Com. Comm. v. Southern Ry., 
 
 Texas & P. Ry. v. Interstate Com. 105 Fed. 703. It should be noted also 
 
 Comm., 162 U. S. 197, 40 L. ed. 940, that all parts of a joint rate may be 
 
 16 Sup. Ct. 666; Interstate Com. affected by competition. Interstate 
 
 Comm. V. Alabama Mid. Ry., 168 Commerce Commission v. C, P. & V. 
 
 U. S, 144, 42 L. ed. 414, 18 Sup. Ct. Ry., 124 Fed. 624. 
 
 , [ 718 ] 
 
Discrimination Between Localities [ § 793 
 
 those of his competitor/ and it is well recognized that a 
 carrier may for competitive reasons establish a rate lower 
 than it could justly be compelled by the Commission to 
 estabUsh.* In thus accepting on a comparatively small 
 volume of traffic moving to a given point exceptionally 
 low comparative rates, which it must establish in order 
 to secure any part of the traffic, a carrier does not thereby 
 estop itself from charging reasonably remimerative rates 
 to other points to which it haiils the volume of the traffic 
 from which it must derive the principal part of its rev- 
 enues.* Nor do carriers which accord competing localities 
 the same rates to a particular point obligate themselves to 
 grant to them the same rates to other points where they 
 do not compete.' So far indeed have the courts and the 
 Commission gone as to treat it almost as a matter of 
 judicial knowledge that in fixing certain rates the carrier 
 had practically no choice, but must make rates which 
 would meet those of its competitors, or else withdraw from 
 that traffic altogether. Thus the Commission recognizes 
 that the rates from the Atlantic ports to Asia are the 
 result of the rivalry of the transcontinental roads and the 
 Suez and Panama canals,* while the rates fixed by the 
 railways on traffic between the Atlantic and Pacific coasts 
 are controlled by the steamship Unes operating by way of 
 Panama.' Rates from the North Atlantic ports to the 
 
 * Indianapolis Freight Bureau v. ' Colorado Coal Traffic AsB'n v. 
 C, C, C. & St. L. Ry., 26 I. C. C. C. & S. Ry., 18 I. C. C. 572. 
 
 53. ' China and Japan Trading Co. v. 
 ' Indianapolis Freight Bureau v. Georgia Ry., 12 I. C. C. 236; Enter- 
 Pa. Ry., 15 I. C. C. 567; Breeze- prise Manufacturing Co. v. Georgia 
 Trenton Mining Co. v. W. Ry., 19 Ry., 12 I. C. C. 451. 
 I. C. C. 598; Evens & Howard Fire " City of Spokane v. No. Pac. Ry., 
 Brick Co. v. St. L., I. M. & S. Ry., 25 15 I. C. C. 376; Kentucky Wagon 
 I. C. C. 141; Sioux City Terminal Mfg. Co. v. I. C. Ry., 18 I. C. C. 360; 
 Elevated Railroad Co. v. C., M. & St. Taylor Dry Goods Co. v. Missouri 
 P. Ry., 27 I. C. C. 457. Pac. Ry., 28 I. C. C. 205; Keats 
 
 • Raitoad Commission of Ken- Auto Co. v. O. R. R. & N. Co., 28 
 tucky V. L. & N. Ry., 13 I. C. C. I. C. C. 412. See re-opened Inter- 
 300. mountain Rate Cases, I. C. C, 
 
 Feb. 11, 1915. 
 
 [719] 
 
§ 793 ] Raileoad Rate Regulation 
 
 south are fixed by water routes, i" while those to the middle 
 west are determined by the existence of the competition of 
 the Great Lakes." Cleveland, Toledo, Detroit and Duluth 
 possess competitive conditions which cannot be ignored in 
 the making of rates, ^^ while St. Louis, Memphis and 
 Vicksburg are equally indebted to the Mississippi.^^ 
 The Commission has repeatedly indicated that rates to 
 Minneapolis, St. Louis and Memphis are the result of 
 acute competitive conditions," while it was held that 
 competition at Louisville justified a variance in rate accord- 
 ing to the grade of coal, while at a neighboring non- 
 competitive point one rate was applied to all grades.'^ 
 But while the Commission and the courts are ready to 
 allow to competition whatever weight it can be shown to 
 have in the making of rates, the question always remains 
 what weight does competition actually have in this par- 
 ticular case. This is a question of fact, in the determina- 
 tion of which decisions in other cases are of httle help. 
 The Commission, however, has held that it is not enough 
 to show merely the existence of actual or potential com- 
 petition.^^ Its character must be examined and its bearing 
 upon the making of rates must be determined. If carriers 
 rely upon competition as a justification for a discrimina- 
 tory adjustment of rates, they must show not only the 
 
 1° Receivers' & Shippers' Ass'n of Lea v. B. & O. Ry., 24 I. C. C. 125; 
 
 Cincinnati v. C, N. O. & T. P. Ry., 18 Lumbermen's Exchange of St. Louis 
 
 I. C. C. 440; Atlanta Journal Co. v. v. A. & S. R. Ry., 24 I. C. C. 220; 
 
 S. A. L. Ry., 28 I. C. C. 186. HoUand Blow Stave Co. v. A. C. L. 
 
 " Board of Trade of Chicago V. A. Ry., 24 I. C. C. 81; Merchants' 
 
 C. Ry., 20 I. C. C. 504; International Freight Bureau of Little Rock v. 
 
 Salt Co. v. G. & W. Ry., 20 I. C. C. A., T. & S. F. Ry., 26 I. C. C. 543; 
 
 530; Wisconsin State Millers' Ass'n v. Boston Chamber of Commerce v. 
 
 C. N. & St. P. Ry., 23 I. C. C. 494; A., T. & S. F. Ry., 28 I. C. C. 230; 
 
 Gottron Bros. Co. v. G. & W. Ry., Traffic Bureau of Nashville v. L. & N. 
 
 28 I. C. C. 38. Ry., 28 I. C. C. 533. 
 
 '^ Saginaw Board of Trade v. *' Lebanon Commercial Club v. 
 
 G. T. Ry., 17 I. C. C. 128. L. & N. Ry., 28 I. C. C. 301. 
 
 " Anadarko Cotton Oil Co. v. '^ Chamber of Commerce of New- 
 
 A., T. & S. F. Ry., 20 I. C. C. 43. port News v. Southern Ry., 23 I. C. 
 
 " Business Men's League of Albert C. 345. 
 
 [ 720 ] 
 
Discrimination Between Localities [ § 793 
 
 fact but the reason for it. If there is no reason outside 
 the mere whim of their traffic managers, then the roads 
 must bear the burden of the poor company in which they 
 find themselves at competitive points.'^ It must also be 
 shown that the competition was sufficient to justify a 
 difference in rates, ^* and that the rate differential estab- 
 lished is not greater than the competition warranted." 
 It must furthermore appear that the competition is 
 genuine,^" and was not created nor is it controlled by the 
 carrier. ^^ The existence of competition at a favored point 
 is no defense to a charge of undue prejudice when similar 
 competitive conditions exist at the place prejudiced.^^ 
 The agency or instrument used by the competing carrier is 
 immaterial. The competition may be by rail,^' or by 
 
 " E. T., V. & G. Ry. v. the Inter- 
 state Com. Comm., 99 Fed. 52; 
 Suffern Grain Co. v. I. C. Ry., 22 
 I. C. C. 178. 
 
 '* City of Spokane v. No. Pac. Ry., 
 21 I. C. C. 400. 
 
 " Grain Shippers' Ass'n v. I. C. 
 Ry., 8 I. C. C. Rep. 158; Holdzkom 
 V. M. C. Ry., 9 I. C. C. Rep. 42; 
 Marten v. L. & N. Ry., 9 I. C. C. 
 Rep. 581; Gardner v. So. Ry., 10 
 I. C. C. Rep. 342; Merschom, S. P. & 
 Co. V. Central Ry., 10 I. C. C. Rep. 
 456; Lehmann-Higginson Grocery 
 Co. V. A., T. & S. F. Ry., 10 I. C. C. 
 Rep. 460; Planters' Gin & Compress 
 Co. V. Y. & M. V. Ry., 16 I. C. C. 
 131; Sondheimer v. I. C. Ry., 17 
 I. C. C. 60. 
 
 »Int. Com. Comm. v. C. G. ■\^■. 
 Ry., 209 U. S. 108. 
 
 " Chamber of Commerce of Ash- 
 burn V. G. S. & F. Ry., 23 I. C. C. 
 140; Bowling Green Business Men's 
 Ass'n V. L. & N. Ry., 24 I. C. C. 228. 
 A higher rate on lumber shipped from 
 southern territory to Des Moines over 
 that shipped to Omaha and Council 
 Bluff cannot be justified on the 
 
 46 
 
 ground that Omaha is "an important 
 dumping ground" for lumber, where 
 it appears that such dumping ground 
 results from the very difference in 
 rates complained of. Greater Des 
 Moines Committee v. C. G. W. Ry., 
 14 I. C. C. 294. 
 
 2- Mayor and Council of Boston v. 
 A. C. L. Ry., 24 I. C. C. 50; Mfrs. & 
 Merchants' Ass'n v. A. & A. Ry., 24 
 I. C. C. 331; Board of Trade of 
 Morristown v. A. C. L. Ry., 24 I. C. 
 C. 372; In re Advances on Barley, 
 24 I. C. C. 664; Mfrs. & Merchants 
 Ass'n V. A. A. Ry., 25 I. C. C. 116; 
 North Fork Cannel Coal Co. v. 
 Ann Arbor Ry., 25 I. C. C. 241; 
 Southern Furniture Mfrs. Ass'n v. 
 So. Ry., 25 I. C. C. 379. 
 
 -'Randolph Lumber Co. v. S. .\. 
 L. Ry., 11 I. C. C. 601; Wright Wire 
 Co. v. P. & h. E. Ry., 21 I. C. C. 64; 
 Indianapolis Freight Bureau v. C, C, 
 C. & St. L. Ry., 23 I. C. C. 195; 
 Chamber of Commerce of New York 
 V. N. Y. C. & H. R. R., 24 L C. C. 55; 
 Bahrenburg Bros. & Co. v. A. C. L. 
 Rv., 24 I. C. C. 560; City of Craw- 
 ford V. C. & X. W. Rv., 25 I. C. C. 
 
 [721] 
 
§794] 
 
 Railroad Rate Regulation 
 
 boat,^'' or by wagon, ^^ or by a trolley car.^^ It has even 
 been held that water competition is created by floating 
 ties down a river, ^^ and that circumstances are dissimilar 
 at a city served by break-bulk boats and by car ferry as 
 compared with a city not so served. ^^ Within certain 
 limits express rates and freight rates compete, and to that 
 extent express rates should be estabUshed with reference to 
 freight rates. ^^ Express rates in turn are affected by the 
 competition of the post office, which shows itself in the 
 disproportionate charges for large and small packages.'" 
 Whether the competing carrier is subject to the Act is 
 immaterial." 
 
 § 794. Incidents of competition. 
 
 When it is once established that substantial competition 
 
 259; Philadelphia Veneer -Lumber Co. 
 V. C. Ry. of N. J., 25 I. C. C. 653; 
 Coke Producers Ass'n of Connells- 
 ville V. B. & O. Ry., 27 I. C. C. 125; 
 
 Indianapolis Freight Bureau v. C, C, 
 C. & St. L. Ry., 28 I. C. C. 53; Omaha 
 Grain Exchange v. C, R. I. & P. Ry., 
 28 I. C. C. 680. 
 
 ^^ Enterprise Mfg. Co. v. Georgia 
 Ry., 12 I. C. C. 130; Montgomery 
 Freight Bureau v. L. & N. Ry., 17 
 I. C. C. 521; Receivers' & Shippers' 
 Ass'n of Cincinnati v. C, N. O. & T. 
 P. Ry., 18 I. C. C. 440; Industrial 
 Lumber Co. v. St. L., W. & G. Ry., 
 19 I. C. C. 50; Truck Growers' Ass'n 
 V. A. C. L. Ry., 20 I. C. C. 190; 
 Georgetown Ry. & Light Co. v. 
 N. & W. Ry., 22 I. C. C. 144; South 
 Atlantic Waste Co. v. So. Ry., 22 
 I. C. C. 293; Escanaba Business 
 Men's Ass'n v. A. A. Ry., 24 I. C. C. 
 11; In re Advances on Flaxseed, 25 
 I. C. C. 337; Rates on Knitting- 
 factory Products, 25 I. C. C. 634; 
 Arkansas FertiUzer Co. v. St. L., 
 I. M. & S. Ry., 25 I. C. C. 645; 
 Merchants Freight Bureau of Little 
 Rock v. A., T. & R. F, Ry., 26 I. C. C. 
 [7221 
 
 543; Texarkana Freight Bureau v. 
 St. L., I. M. & S. Ry., 28 1. C. C. 569; 
 LaGrange Chamber of Commerce v. 
 A. & W. P. Ry., 28 I. C. C. 178; 
 Meridian Board of Trade v. A. G. S. 
 Ry., 28 I. C. C. 360; Wausau Ad- 
 vancement Ass'n v. C. & N. W. Ry., 
 28 I. C. C. 459. 
 
 ^* Santa Rosa Traffic Ass'n v. So. 
 Pac. Ry., 24 I. C. C. 46; Baker Com- 
 mercial Club V. O. W. R. R. & N. Co., 
 25 I. C. C. 281. 
 
 ^ Elgin Commercial Club v. B. & 
 M. Ry., 28 I. C. C. 380. 
 
 " Preston v. C. & 0. Ry., 19 I. C. 
 C. 406. 
 
 ^Escanaba Business Men's Ass'n 
 V. Ann Arbor Ry., 24 I. C. C. 11. 
 
 ^' Kindel v. Adams Express Co., 
 11 I. C. C. 475. 
 
 '" Sandford v. Western Express 
 Co., 16 I. C. C. 32; In re Express 
 Rates, 24 I. C. C. 380. 
 
 "Pittsburg Plate Glass Co. v. 
 P., C, C. & St. L. Ry., 13 I. C. C. 87; 
 In re Investigation of Advances in 
 Rates on Grain, 21 I. C. C. 22; Com- 
 mercial Club of Superior v. G. N. Ry., 
 24 I. C. C. 96. 
 
Discrimination Between Localities [ § 794 
 
 really exists, it may affect transportation in ways which 
 do not always show in the rate schedules. Competition 
 may properly be considered in determiniiig the correct 
 classification of an article/^ but its effect is not to be 
 extended to articles to which it does not apply by merely 
 classing them with articles to which it does apply.'^ 
 Railways may be forced to estabUsh any-quantity rates on 
 commodities because of competition with any-quantity 
 water rates on those commodities.*^ Water competition 
 may also justify a difference in the right of combining 
 different commodities at the carload rate/'' or of loading 
 C. L. freight at one station and not at another.'^ Even 
 the minimum weight of the carload may vary at different 
 points because of competition. The fixing of the minimum 
 weight at 20,000 poimds on shipments of bananas from 
 New Orleans and Mobile to points west of the Mississippi 
 River, while assessing a minimum weight of 18,000 poimds 
 to Chicago and points east of the river, did not result in 
 undue discrimination, as it appeared that such difference in 
 minima was made to meet competition through Baltimore, 
 and that cars of bananas from New Orleans and Mobile 
 were usually loaded from 2,000 to 4,000 pounds in excess 
 of the 20,000 pound minimum." The privileges enjoyed 
 by shippers will depend at many points on whether those 
 points are competitive. The granting of a longer free 
 time for unloading at New York than at Baltimore ; '* 
 the granting of a milling-in-transit privilege to Minneapolis 
 and St. Paul which is denied to Janesville; *' the absorp- 
 tion of a terminal charge in favor of one locality or com- 
 
 '^ Metropolitan Paving Brick Co. '= City of Spokane v. No. Pac. Ry., 
 
 V. Ann Arbor Ry., 17 I. C. C. 197; 15 I. C. C. 376. 
 Western Classification Case, 25 I. C. « Utica Traffic Bureau v. N. Y. C. 
 
 C. 442. & H. R. Ry., 18 I. C. C. 271. 
 
 " In re Advances in Rates on " Topeka Banana Dealers' Ass'n 
 
 Locomotives and Tenders, 21 1. C. C. v. St. L. & S. F. Ry., U I. C. C. 620. 
 103. ^ Brey v. Pennsylvania Ry., 16 
 
 » Schmidt & Peters, Inc., v. A., T. I. C. C. 497. 
 & S. F. Ry., 28 I. C. C. 376. " Blodgett Milling Co. v. C, M. & 
 
 St. P. Ry., 23 I. C. C. 448. 
 [723] 
 
§ 795 ] Railroad Rate Regulation 
 
 modity to the prejudice of another; ^^ the giving of free 
 store-door pick-up and delivery to one section of a city 
 while denying it to others; *'■ the giving of an icing privilege 
 at one point which is refused at others; ■*- the granting of 
 an elevator allowance at one point and not at another; ^' 
 the maintenance of proportional rates on grain at Omaha 
 while denying them at Sioux City; ''* — all these have been 
 upheld because of the existence of competition at the 
 favored point. But on the other hand the fact that the 
 market for a commodity is better at the long-distance 
 point than at the intermediate point does not justify a 
 lower rate to the former; *'' nor does water competition 
 justify charging different export rates merely by reason of 
 the fact that beyond the port of transshipment the traffic 
 is to be carried to different destinations.""* It should be 
 noted that even though a carrier be entitled to reduce its 
 rates to a low margin at competitive points, it does not 
 thereby free itself from the obligation to grant reasonable 
 rates to intermediate or non-competitive points. To 
 determine what is a reasonable rate is difficult, but ob- 
 viously a rate which has been forced upon the carrier by 
 competition cannot be taken as the standard of measure- 
 ment. 
 
 § 796. Commodity and market competition. 
 
 The competition which may be considered in proper 
 cases includes not only that between carriers with its 
 usual incidents, but also that of a commodity produced 
 
 "Cattle Raisers' Ass'n v. F. W. & is lawful. Interstate Commerce Com- 
 
 D. C. Ry., 7 I. C. C. 513. mission v. Diffenbaugh, 222 U. S. 43, 
 
 *' Anacostia Citizens' Ass'n v. B. & 56 L. ed. 83, 32 Sup. Ct. 22. 
 
 0. Ry., 25 I. C. C. 411. "Sioux City Terminal Elevator 
 " Kenner Truck Farmers' Ass'n Co. v. C. N. & St. P. Ry., 23 I. C. C. 
 
 V. lU. Cent. Ry., 32 I. C. C. 1. 98. 
 
 " Ryley v. W. Ry., 25 I. C. C. 210; « Fewell v. R. & D. Ry., 7 I. C. C. 
 
 Gund & Co. V. C, B. & Q. Ry., 25 Rep. 354. 
 
 1. C. C. 326. The payment of an « New Orleans Board of Trade v. 
 elevator charge by a railroad com- I. C. Ry., 23 I. C. C. 465. 
 
 pany when compelled by competition 
 
 [724] 
 
Discrimination Between Localities [ § 795 
 
 in one section of the country with the same commodity 
 produced in another section, and sometimes even the 
 competition of one kind of traffic with another.^'' But 
 competition in commodities alone is not a circumstance or 
 condition that will entitle a selling point to have an al- 
 ready low rate made still lower in order to equal one at a 
 more distant point, the latter having been made to meet 
 the competition of carriers and of rates as well as of 
 markets and of products/* The competition between 
 carriers each serving a district in which a given commodity 
 is produced to place that commodity on the market at 
 great centers — what is known as market competition — has 
 been viewed by the Commission in different ways at 
 different times, and it is impossible to reconcile its deci- 
 sions on the subject. In one line of cases it has held that 
 market competition is to be encouraged,^* even when it 
 necessitates a rate unreasonably low and which does not 
 yield a fair return for the service rendered.*" The con- 
 sumer should be given an opportunity to buy in all 
 competing fields in so far as that can be fairly accom- 
 plished.*' Market competition is held to be so important 
 a factor in rate making that it may justify discrimina- 
 tion.*^ No case of market competition, however, may 
 safely be made a precedent for any other.*' On the other 
 hand, the Commission has held that the ability of compet- 
 ing points of production to sell in a common market, in so 
 far as it goes beyond the question of cost of transportation, 
 is purely a commercial question and cannot enter into 
 
 " Metropolitan Paving Brick Co. '' Andy's Ridge Coal Co. v. So. 
 
 V. Ann Arbor Ry., 17 I. C. C. Ry., 18 I. C. C. 405. 
 
 197. " Southern Bitulithic Co. v. I. C. 
 
 « Bovaird Supply Co. v. A., T. & Ry., 17 I. C. C. 300. The differential 
 
 S. F. Ry., 13 I. C. C. 56. between Omaha and Kansas City to 
 
 ■" Andy's Ridge Coal Co. v. So. Arkansas is fixed as a result of com» 
 
 Ry., 18 I. C. C. 405; Massee & Felton petition with Illinois and Iowa grain. 
 
 Lumber Co. v. So. Ry., 23 I. C. C. Omaha Grain Exchange v. C, R. I. & 
 
 110. P. Ry., 28 I. C. C. 680. 
 
 M Edgar & Son v. L. & N. Ry., 26 =■= Andy's Ridge Coal Co. v. So. 
 
 I. C. C. 181. Ry., 18 I. C. C. 405. 
 
 [725] 
 
§ 796 ] Railroad Rate Regulation 
 
 the determination of rates.^^ Again it has said that there 
 is no such thing as market competition which is distinct 
 from competition between Unes of transportation serving 
 the markets. ^^ It has described market competition as 
 "a euphemism for railroad poUcy," and has held that the 
 desire of a number of shippers to reach a market is a force 
 to which the carrier may not yield unless it can clearly 
 establish that the adoption of such a policy will not un- 
 fairly discriminate against one community in favor of 
 another, and will not produce those results which the Act 
 was intended to prevent.^* Market competition, moreover, 
 should be carefully distinguished from competing markets. 
 The fact that there is competition for the purchase of 
 certain coal between Nebraska communities and com- 
 munities in Wyoming and Utah affords no justification to 
 the carrier for charging more than a reasonable rate for 
 the transportation of such coal as the Nebraska people 
 succeed in buying. ^^ 
 
 § 796. How the Commission determines justifiable dis- 
 crunination. 
 
 Since the Act in both the third and fourth sections 
 recognizes that discrimination of certain kinds or to a cer- 
 tain extent may in certain circumstances and conditions 
 be justifiable, it is the business of the Commission to as- 
 certain whether such justification exists and whether the 
 discrimination exceeds the justification. In passing upon 
 an application for relief from the fourth section because 
 of the existence of water competition, the Commission 
 imposed the following tests: 1. Is it true that the long- 
 distance rate is forced by water competition? 2. Is the 
 long-distance rate which has been established in \aew of 
 
 '* Jennison Co. v. Gt. No. Ry., 18 ™ Railroad Commission of Nevada 
 
 I. C. C. 113. V. So. Pac. Ry., 21 I. C. C. 329. 
 
 ^^ City of Spokane v. No. Pac. Ry., " Nebraska State Railway Com- 
 
 21 I. C. C. 400. mission v. Un. Pac. Ry., 11 I. C. C. 
 
 349. 
 
 [726] 
 
Discrimination Between Localities [ § 796 
 
 water competition less than would otherwise be reason- 
 able? 3. Are the rates at the intermediate points reason- 
 able? 4. Do the rates unduly prefer one locality to. an- 
 other? ^^ These tests, it would seem, apply equally well 
 to land competition, and when competition is the defense 
 they might also be employed in determining whether there 
 was undue discrimination within the meaning of section 3. 
 Having found that competitive conditions exist which make 
 it imperative that some one should suffer, it is pertin- 
 ent for the Commission to inquire how the least injury 
 may be inflicted.^* Everything depends upon the circum- 
 stances under which a rate is made and the transporta- 
 tion conducted,*" and a change of conditions may lead to 
 different conclusions." The Commission takes the whole 
 situation into consideration, and even though it was 
 competitive conditions among the shippers which were the 
 chief inducement to the complaint, yet it will show due 
 regard for transportation conditions and the rights of the 
 carriers.*^ It will also take into account the interests of 
 all competing lines and not merely of that line which 
 could handle the business at the lowest rate.*^ If com- 
 petition exists at a certain point, the Commission is dis- 
 posed to give shippers the benefit of it.'^* If the competi- 
 tion is between a railroad and a waterway, such as the 
 Mississippi, the Commission will endeavor to measure the 
 force of the competition at different distances from the 
 river and thus determine what degree of discrimination 
 is allowable at various points."'' 
 
 '^ In re Transportation of Wool, *^ Chicago Lumber & Coal Co. v. 
 
 Hides and Pelts, 23 I. C. C. 151. T. S. E. Ry., 16 I. C. C. 323. 
 
 '' Bluefield Shippers' Ass'n v. N. & " Receivers & Shippers' Ass'n of 
 
 W. Ry., 22 I. C. C. 519. Cincinnati v. C, N. O. & T. P. Ry., 
 
 i» Oregon & Washington Lumber 18 I. C. C. 440. 
 Manufacturers' Ass'n v. So. Pac. " Steinfeld & Co. v. I. C. Ry., 20 
 
 Ry., 21 I. C. C. 389. I. C. C. 12. 
 
 " Sinclair & Co. v. C, M. & St. P. "^ Raiboad Commission of Ten- 
 
 Ry., 21 I. C. C. 490. nessee v. Ann Arbor Ry., 17 I. C. C. 
 
 418. 
 
 [727] 
 
§ 797 ] Railroad Rate Regulation 
 
 § 797. Competitive rates must be compensatory. 
 
 The fact that a carrier is compelled to make a low rate 
 at a competitive point in order to obtain any part of the 
 traffic at that point does not authorize it to lower its rate 
 to any extent which may be necessary in order to attain 
 this result. A carrier owes a duty to every point on its 
 line to see that its traffic at one place, even though not 
 very profitable, is at least not a burden on the traffic at 
 other points. If railway carriers engage in a competitive 
 struggle for business at a place where they meet, and under- 
 bid each other or other carriers to a point which is not in 
 itself remunerative, can they turn back on the line, and 
 taking advantage of the conditions existing at other lo- 
 calities, arising either from the fact that there is no op- 
 portunity for competition, or from the fact that by con- 
 cert of the carriers there is none, charge such rates for the 
 shorter haul as shall make good their lack of profits in 
 competitive business, and even up the profits on then- 
 whole business to the point they set before themselves 
 as reasonable? ^^ Against' this Mr. Justice White clearly 
 expressed the dissent of his court: "That, as indicated 
 in the previous opinions of this court, there may be cases 
 where the carrier cannot be allowed to avail of the com- 
 petitive condition because of the public interests and the 
 other provisions of the statute, is of course clear. What 
 particular environment may in every case produce this 
 result cannot be in advance indicated. But the suggestion 
 of an obvious case is not inappropriate. Take a case 
 where the carrier cannot meet the competitive rate to a 
 given point without transporting the merchandise at less 
 than the cost of transportation, and therefore without 
 bringing about a deficiency, which would have to be met 
 by increased charges upon other business. Clearly, in 
 such a case, the engaging in such competitive traffic 
 would both bring about an unjust discrimination and a 
 disregard of the public interest, since a tendency towards 
 
 «> Interstate Commerce Com. v. East Tennessee, V. & G. Ry., 85 Fed. 107. 
 [728] 
 
DiSOKIMINATION BETWEEN LOCALITIES [ § 798 
 
 unreasonable rates on other business would arise from the 
 carriage of traffic at less than the cost of transportation 
 to particular places." "^ Thus it is evident that there are 
 limits beyond which a carrier may not go in its attempt 
 to meet competition.''* It is well settled that a carrier 
 may not lawfully engage in transportation at a rate less 
 than the cost of service, since this would result in an im- 
 proper and unlawful burden on other traffic.^' 
 
 § 798. Non-competitive rates must be reasonable. 
 
 While the Act favors the competitive point in that it 
 allows it to reap whatever advantage its competitive con- 
 ditions may afford, it nowhere contemplates that the in- 
 terests of the intermediate points are to be sacrificed. As 
 has just been indicated, the carrier is obliged to make a 
 rate to the competitive point which is at least high enough 
 to meet the cost of service, and thus save non-competitive 
 points from the burden of any loss on competitive traffic. 
 Furthermore, no matter what rate is charged to competi- 
 tive points, every non-competitive point is entitled to a 
 rate which is reasonable. The mere fact of competition, 
 regardless of its character or extent, does not relieve the 
 carrier of the restraints of the third and fourth sections.™ 
 While competition may justify the carrier in charging to 
 competitive points a rate that is less than reasonable, 
 it does not deprive other points of their right to a rate 
 that is not unreasonably high,'^^ and a carrier applying 
 for relief under the fourth section must show that its in- 
 
 " East Tennessee, V. & G. Ry. v. «» City of Spokane v. No. Pac. Ry., 
 
 Interstate Commerce Com., 181 19 I. C. C. 162; Commercial Club of 
 
 U. S. 1, 45 L. ed. 719, 21 Sup. Ct. ' Superior v. G. N. Ry., 24 I. C. C. 96. 
 
 516. See also Interstate Commerce ™ Interstate Commerce Com. v. 
 
 Commission v. Alabama Midland Alabama Midland Ry., 168 U. S. 
 
 Ry., 168 U. S. 144, 42 L. ed. 414, 18 144, 42 L. ed. 414, 18 Sup. Ct. 
 
 Sup. Ct. 45; Chamber of Commerce 45. 
 
 of NewYorkv. N. Y. C.&H. R. Ry., "Southern Timber & Land Co. 
 
 24 I. C. C. 55. V. So. Pac. Ry., 18 I. C. C. 232; 
 
 «* Burnham, Hanna, Munger Co. Grain Rates in C. F. A. Territory, 
 
 V. C, R. I. & P. Ry., 14 I. C. C. 299. 28 I. C. C. 549. 
 
 [729] 
 
§ 799 ] Railroad Rate Regulation 
 
 termediate rates do not violate this right." In determin- 
 ing what is reasonable, the Commission will examine the 
 situation at the intermediate point. If it is a jimction 
 served by another carrier it is entitled to a lower rate.'' 
 Obviously the reasonableness of , the non-competitive rate 
 cannot be determined by comparison with the competitive 
 rate,'^ but if it can be shown that the latter is reasonable, 
 it should not be exceeded at a point with a shorter haul." 
 In the absence of any differentiating circumstance, the 
 reasonableness of the intermediate rate may be determined 
 by a comparison with other rates for the same distance."® 
 
 § 799. Potential competition. 
 
 Both the Commission and the courts recognize that 
 rates may be affected by potential as well as actual com- 
 petition. While the courts were somewhat reluctant to 
 take this view, their hesitation may be largely explained 
 by the facts of the cases before them. Chief Justice 
 White said, "What the 4th section of the Act to Regulate 
 Commerce has reference to is an actual dissimilarity of 
 circumstances and conditions, not a conjectural one." '^ 
 But this was only a dictum and was said with reference 
 to a possible competition by a route so circuitous as to be 
 altogether impracticable. Before any legal restraint was 
 placed on the carriers in the making of rates, they were 
 obliged to take into account not only existing competition 
 but also that which could easily be developed. There 
 is nothing in the Act which prevents the carrier from 
 applying the same sound business principle. When it is 
 once admitted that existing competition is a dissimilarity 
 
 " Bluefield Shippers' Ass'n v. N. & 18 I. C. C. 88; GiUis & Son v. P. B. 
 
 W. Ry., 22 I. C. C. 519. & W. Ry., 26 I. C. C. 61. 
 
 '^ Gamble-Robinson Commission " Bluefield Shippers' Ass'n v. N. & 
 
 Co. V. St. L. & S. F. Ry., 19 I. C. C. W. Ry., 22 I. C. C. 619. 
 
 114. ™ Fourth Section Violations in the 
 
 " FUnt & Walling M'fg Co. v. Southeast, 30 1. C. C. 153. 
 
 G. R. & I. Ry., 14 I. C. C. 520; "Interstate Commerce Commis- 
 
 Rainey & Rogers v. St. L. & S. F. Ry., sion v. L. & N. Ry., 190 U. S. 273, 
 
 47 L. ed. 1047, 23 Sup. Ct. 687. 
 
 [7301 
 
Discrimination Between Localities [ § 799 
 
 of circumstances which excuses a discrimination in rates, 
 it logically follows that potential competition must be 
 allowed to have the same influence. And this is the view 
 now taken by the Commission and the courts/* But 
 care must be taken to distinguish potential competition 
 from merely possible or conjectural or imaginary com- 
 petition. It must be a competition that is reasonably 
 apprehended.^' A river which is not navigable is in no 
 sense a competitor, but when an appropriation has been 
 made for dredging it, it at once becomes a potential com- 
 petitor.*" A river continues to be a potential competitor 
 of a railroad even though the boats on it have ceased run- 
 ning for lack of cargoes.*' The ocean without a ship upon 
 it is nevertheless a powerful factor in restraining rates 
 of land carriers.*^ Potential competition by the Tehuan- 
 tepec route justifies low rates from the Mississippi to the 
 Pacific coast.*^ The Erie canal, as an active competitor, 
 has to a considerable extent disappeared, but it still pro- 
 duces a profound effect upon grain rates.*^ The Great 
 Lakes not only compete with land carriers through the 
 vessels now in service on them, but also through the vessels 
 potentially in service on them.*" It is not the actual 
 amoimt of competition but the ever-present possibility 
 of its increasing which is significant.*" Such a potentiahty 
 
 '» E. T., V. & G. Ry. v. Interstate " Transcontinental Commodity 
 
 Commerce Commission, 99 Fed. 52, Rates, West Bound, 26 I. C. C. 456. ■ 
 
 39 C. C. A. 413; Lead Commercial ™Texarkana Freight Bureau v. 
 
 Club V. C. & N. W. Ry., 12 I. C. C. St. L., I. M. & S. Ry., 28 I. C. C. 569. 
 
 460; Planters' Gin & Compress Co. s' Arkansas Fertilizer Co. v. St. 
 
 V. Y. & M. V. Ry., 16 I. C. C. 131; L., I. M. & S. Ry., 25 I. C. C. 645. 
 
 Memphis Cotton Oil Co. v. I. C. '^ Railroad Commission of Nevada 
 
 Ry., 17 I. C. C. 313; Kentucky v. So. Pao. Ry., 21 I. C. C. .329. 
 
 Wagon M'fg Co. v. I. C. Ry., 18 I. '^ Kentucky Wagon M'fg Co. v. 
 
 C. C. 360; Audley Hill & Co. v. So. I. C. Ry., 18 I. C. C. .360. 
 
 Ry., 20 I. C. C. 225; BowUng Green " Board of Trade of Chicago v. 
 
 Business Men's Ass'n v. L. & N. Ry., A. C. Ry., 20 I. C. C. 504. 
 
 24 I. C. C. 228; Memphis Freight *'^ Commercial Club of Duluth v. 
 
 Bureau v. B. & O. Ry., 28 I. C. C. B. & O. Ry., 27 I. C. C. 639. 
 
 543; Texarkana Freight Bureau v. *" City of Spokane v. No. Pac. Ry., 
 
 St. L., I. M. & S. Ry., 28 I. C. C. 569. 21 I. C. C. 400. 
 
 [731] 
 
§ 800 ] Railroad Rate Regulation 
 
 not only influences rates but insiu:es better service and 
 fairer treatment." The extent to which a carrier shall 
 lower its rate to meet anticipated competition is a matter 
 primarily for its decision, and should it later raise the 
 rate, the sole question for the Commission's determination 
 is whether that increased rate is just and reasonable for 
 the service performed.** 
 
 § 800. Suppression of competition by agreement. 
 
 In East Tennessee, Virginia and Georgia Railway v. 
 Interstate Commerce Commission,*' Judge Taft in the 
 Circuit Court of Appeals dealt with an apparent compe- 
 tition which was not real because of a secret arrangement 
 between the carriers. The lower rates for the longer haul 
 from Nashville to the seaboard were justified by the com- 
 petition at Nashville between two railroads, the Louisville 
 & Nashville and the Nashville, Chattanooga and St. Louis. 
 There was an apparent competition between these roads, 
 and they named independent rates; but the latter road 
 was controlled by the former through ownership of a 
 majority of the stock. The Circuit Court of Appeals held 
 that this was not a real competition, and could not be 
 considered as a dissimilar circumstance which would justify 
 a difference in rates. The Supreme Court reversed the 
 decision on the ground that the facts on which it was based 
 were at variance with those foimd by the Commission; 
 and the court refrained from expressing its opinion upon 
 the proposition of law.'" It is difficult to see how any doubt 
 can exist on the poiat. If the Circuit Court of Appeals 
 was right in finding that the competition which appeared 
 to exist at Nashville was in reality stifled by a control 
 of all carriers by one of them, there was surely no such 
 competition as would create a dissimilar condition fore- 
 s' New England Investigation, 27 «" 99 Fed. 52, 39 C. C. A. 413. 
 I. C. C. 560. » East Tennessee, V. & G. Ry. v. 
 ** Scrap-iron Rates between Du- Int. Com. Comm., 181 U. S. 1, 45 L. 
 luth and Chicago, 28 I. C. C. 467. ed. 719, 31 Sup. Ct. 512. 
 
 [732] 
 
DiSCBIMINATION BETWEEN LOCALITIES [ § 801 
 
 ing upon one road a low competitive rate. In a later 
 case in the Supreme Court, Mr. Justice White said: "Of 
 course, if, by agreements or combinations among carriers, 
 it were found that at a particular point rates were unduly 
 influenced by a suppression of competition, that fact would 
 be proper to consider in determining the question of 
 undue discrimination and the reasonableness per se of 
 the rates at such possible competitive points." ^^ This 
 view was adopted by the Commission when a railroad 
 attempted to justify a competitive rate at a point where 
 it had obtained control of the competitive water carrier.®^ 
 
 § 801. Suppression of competition by consolidation. 
 
 Where competition at the intermediate point is stifled, 
 not by an agreement among the competing roads, but by a 
 consolidation of all the roads into one, it has been urged 
 that for the purpose of determining the reasonableness of 
 discrimination the point should continue to be regarded 
 as a competitive point. This was urged in the Danville 
 case.'' The rates between southern and western points 
 and Danville were very much higher than those between 
 the same points and Lynchburg, the business rival of 
 Danville. There was an active competition between rail- 
 roads at Lynchburg. Such competition had existed at 
 Danville, but all the other roads were absorbed by the 
 Southern Railway. The courts held the discrimination 
 justified. The case went off on the ground that before 
 the consolidation of the last competing road with the 
 Southern the rates were as high as at the time proceedings 
 were begun. When carriers which are nominally com- 
 petitive are controlled by the same persons, it is difficult 
 to make out a competitive condition which will justify 
 discrimination.'* Common ownership puts it in the power 
 
 " Interstate Commerce Com. v. " Interstate Commerce Commis- 
 
 Louisville & N. R. R., 190 U. S. 273, sion v. Southern Ry., 117 Fed. 741, 
 47 L. ed. 1047, 23 Sup. Ct. 687. 122 Fed. 800, 60 C. C. A. 540. 
 
 '2 Bowling Green Business Men's " Bowling Green Business Men's 
 
 Aas'n V. L. & N. Ry., 24 I. C. C. 228. Ass'n v. L. & N. Ry., 24 I. C. C. 228. 
 
 [733] 
 
§ 802 ] Railboad Rate Regulation 
 
 of the controlling interest to stifle aU real competition, and 
 the history of such relationship shows that the power is 
 likely to be used.^" Where two roads are under a sub- 
 stantially common ownership and control, they are con- 
 sidered as one system, notwithstanding the fact that they 
 may be operated separately, and each is considered as 
 having its rails extended to points directly served by the 
 other."" 
 
 § 802. Carriers may refuse to make competitive rates. 
 
 Since the Act authorizes carriers to make lower rates to 
 points where competitive conditions obtain, many shippers 
 concluded that the Act gave them the right to demand 
 lower rates at such points. But such a construction of 
 the Act is unwarranted. While the law permits carriers 
 to maintain low rates under stress of competition, it does 
 not require them to do so.'^ Hence where two carriers 
 serve the same destination from two different points of 
 origin, neither can be held to discriminate against mills at 
 that destination because it sees fit to make or refuse a rate 
 lower than is inherently reasonable.'^ Whether they will re- 
 duce their rates to competitive points or not is a question 
 of business policy which each carrier is free to determine for 
 itself. Not infrequently it happens that a carrier would in- 
 crease its rates in order to retire from traffic to competitive 
 points rather than sacrifice much needed additional revenue 
 on traffic to its intermediate stations."" Shippers, therefore, 
 must trust to economic pressure to secure for them low rates 
 at competitive points.' The Commission has no power to 
 
 "■^ Flour City S. S. Co. v. L. V. Ry., Co. v. A., T. & S. F. Ry., 19 I. C. C. 
 
 24 I. C. C. 179. 119. 
 
 " Commercial Club of Superior v. ™ Kansas-Iowa Birch Rates, 28 
 
 G. N. Ry., 24 I. C. C. 96. I. C. C. 285. 
 
 ^ Crews V. R. &, D. Ry., 2 Int. ' North Brothers v. C, M. & St. 
 
 Com. Rep. 703, 1 I. C. C. Rep. 401; P. Ry., 15 I. C. C. 70; Darling & 
 
 Oregon & Washington Lumber Manu- Co. v. B. & 0. Ry., 15 I. C. C. 79; 
 
 facturers' Ass'n v. Un. Pac. Ry., Bainbridge Board of Trade v. L. 
 
 14 I. C. C. 1. H. & St. L. Ry., 15 I. C. C. 586; 
 
 '^ Saginaw & Manistee Lumber Lindsay Brothers v. B. & O. S. W. 
 
 [734] 
 
Discrimination Between Localities [ § 802 
 
 order a reduction in rates in order to meet competition.^ 
 If two carriers serve a common point at the same rate, 
 and the carrier with the shorter line reduces its rate, the 
 carrier with the longer line is not obUged to do the same.' 
 But if a carrier elects to make a competitive rate, it there- 
 by subjects itself to certain restraints. It cannot compete 
 at one point and decline to compete at another where 
 all the conditions are the same.^ Nor ordinarily should it 
 be allowed to compete one day and decline to do so the 
 next. This would violate the public's right to equal and 
 uniform treatment. Hence, if a carrier once estabUshes 
 a competitive rate there may be circumstances under 
 which the Commission will require its continuance.-^ In 
 deciding to what extent it will meet competition the carrier 
 must avoid any undue discrimination between localities.* 
 While a railway may refuse to meet the competitive rates 
 of a water carrier, it may not charge a high and imreason- 
 able rate and justify it on the ground that there was 
 water carriage available to shippers at a low and reasonable 
 rate.^ It is permissible for a carrier to establish competitive 
 rates on certain commodities between two points and refuse 
 to do so on other commodities even though the same de- 
 gree of competition is involved.* In the case of connecting 
 
 Ry., 161. C.C. 6; Frederick &Kempe cause of water competition at San 
 
 Co. V. N. Y., N. H. & H. Ry., 18 Pedro and refusing such rates at 
 
 I. C. C. 481; Georgia-Carolina Brick San Pedro constituted unlawful dis- 
 
 Co. V. So. Ry., 20 I. C. C. 148; Cohen crimination. Harbor City Whole- 
 
 & Co. V. MaUory Steamship Co., sale Co. of San Pedro v. So. Pac. 
 
 23 I. C. C. 374; Omaha Grain Ex- Ry., 19 I. C. C. 323. 
 
 change v. C, M. & St. P. Ry., 24 I. = Darling & Co. v. B. & O. Ry., 
 
 C. C. 122. 15 I. C. C. 79; City of Spokane v. 
 
 "- LaSalle Paper Co. v. M. C. Ry., No. Pac. Ry., 21 1. C. C. 400. 
 
 16 I. C. C. 149; Chicago Lumber & « SUder v. So. Ry., 24 I. C. C. 
 
 Coal Co. V. T. S. Ry., 16 I. C. C. 323. 312. 
 
 3 Commercial Coal Co. v. B. & O. ' So. Pac. Co. v. Interstate Com- 
 
 Ry., 15 I. C. C. 11. merce Commission, 219 U. S. 433, 
 
 » Darling & Co. v. B. & O. Ry., 55 L. ed. 283, 31 Sup. Ct. 288. 
 
 15 I. C. C. 79; City of Spokane v. « Traffic Ass'n of St. Louis Coffee 
 
 No. Pac. Ry., 21 1. C. C. 400. Grant- Importers v. I. C. Ry., 28 I. C. C. 
 
 ing Los Angeles terminal rates be- 484. 
 
 [735] 
 
§ 803 ] Railroad Rate Regulation 
 
 roads it is not necessary that they should all adopt the 
 same policy. One of them may extend a low rate for a 
 special service without in any way involving its connec- 
 tions.' But whenever a shipper seeks lower rates because 
 of competitive conditions, he must address his appeal to 
 the carrier. If it refuses to make any concessions to the 
 conditions which prevail, the shipper has no groimd of 
 complaint. The Act excuses the carrier in making certain 
 discriminations, but it does not clothe the shipper with any 
 new rights whereby he may compel discrimination. 
 
 Topic F. What Circumstances Justify Preferential Rates 
 
 § 803. Substantial difference of conditions which justify 
 discrimination. 
 The circumstances or conditions prevailing at two 
 points may be so different as to necessitate a difference in 
 rates. The Act recognizes this as a good defense to the 
 carrier which allows such dissimilarity to be reflected in 
 its rates. While it is true that the carrier's motive in 
 fixing a rate will not in itself prevent the rate from being 
 unduly discriminatory, yet if the carrier can prove a sub- 
 stantial dissimilarity of condition, such as competition, 
 that will go far toward relieving it from the charge that 
 the rate was intended to work mjustice.^" The duty of a 
 carrier to refrain from giving preference or advantages to 
 one shipper or locality over another exists only where 
 substantially the same or similar conditions are prevalent." 
 
 "Topeka Banana Dealers' Ass'n Ry., 15 I. C. C. 286; Fort Dodge 
 
 V. St. L. & S. r. Ry., 13 I. C. C. Commercial Club v. I. C. Ry., 16 
 
 620. I. C. C. 572; Sondheimer Co. v. 
 
 1" Interstate Commerce Commis- I. C. Ry., 17 I. C. C. 60; In re Ad- 
 
 sion V. C. G. W. Ry., 209 U. S. 108, vances in Demurrage Charges, 25 
 
 52 L. ed. 705, 28 Sup. Ct. 493. I. C. C. 314; Janesville Clothing Co. 
 
 " U. S. V. O. R. & Nav. Co., 159 v. C. & N. W. Ry., 26 I. C. C. 628; 
 
 Fed. 975; Railroad Commission v. Merchants' Freight Bureau of Little 
 
 L. & N. Ry., 11 I. C. C. 300; Pitts- Rock v. A., T. & S. F. Ry., 26 1. C. C. 
 
 burgh Plate Glass Co. v. P., C, C. & 543; Port Arthur Board of Trade v. 
 
 St. L. Ry., U I, C. C. 87; Black A. & S. Ry., 27 I. C. C. 388; Vulcan 
 
 Mountain Coal Land Co. v. Southern Iron Works Co. v. A. F. & S. F. Ry., 
 
 [ 736 1 
 
Discrimination Between Localities [ § 803 
 
 Although the third section of the Interstate Commerce 
 Act does not carry the phrase embodied in section 2, 
 "under substantially similar circumstances and condi- 
 tions," it contains the words, "in any respect whatsoever"; 
 and therefore the thought contained in section 2 must be 
 present to the mind in considering imder section 3 what 
 preferences or advantages are undue or unreasonable.^^ 
 Hence when unjust discrimination against one point and 
 undue preference in favor of another are alleged, because of 
 lower rates to the latter, and equality of rates is demanded 
 as a cure for such unjust discrimination against the former, 
 it must be shown that the circumstances and conditions 
 at the two points are substantially similar, and that the 
 lower rates at the one point were the result of the volun- 
 tary action of the carriers at that point. ^' But the "cir- 
 cumstances and conditions" referred to in section 2 of the 
 Act are those which arise within the field of haulage and 
 not those which exist outside." Furthermore, unlike 
 circumstances which will justify discrimination must be 
 connected with the traffic over the line on which the 
 discrimination is made. "If the respondent is acting, or 
 claims to act, under the compulsion of circumstances and 
 conditions of its own creation or connivance in the making 
 of an exceptional rate, then these will not avail it." '^ 
 Therefore where goods were offered to a carrier at Mobile 
 it could not charge more than the Mobile rate, on the 
 ground that the carriage of the goods really originated at 
 another place and had been brought from there by a cheap 
 conveyance instead of by a carrier with whom the present 
 carrier had a traffic arrangement;"^ and the same thing is 
 
 27 I. C. C. 468; Mississippi River tional Coal Mining Co., 173 Fed. 
 
 Case, 28 I. C. C. 47. 1. 
 
 '2 Board of Trade of Carrollton v. " Business Men's Ass'n v. C, S. P., 
 
 C. of G. Ry., 28 I. C. C. 154. M. & O. Ry., 2 Int. Com. Rep. 41, 2 
 
 " Bainbridge Board of Trade v. I. C. C. Rep. 52. 
 
 L. H. & St. L. Ry., 15 I. C. C. '« Bigbee & W. R. Packet Co. v. 
 
 586. M. & O. Ry., 60 Fed. 545. 
 
 '^ Pennsylvania Ry. v. Interna,- 
 
 47 [ 737 ] 
 
§ 804 ] Railroad Rate Regulation 
 
 true in the case of carriage of passengers.'^ In determining 
 whether the conditions at two points are sufficiently unlike 
 to warrant different rates, the carrier is not obliged to give 
 to every difference the same weight which the Commission 
 must give when it is asked to determine whether an undue 
 discrimination exists; '^ but the difference in transportation 
 conditions must be substantial in order to justify a differ- 
 ence in rates," and must be clearly shown. ^'' The rates 
 applicable to each kind of traffic must necessarily be made 
 with reference to the circumstances governing the produc- 
 tion, transportation and marketing of the various prod- 
 ucts.^^ The dissimilarity of condition which is most widely 
 found, or which at any rate is most frequently alleged 
 by the carrier as justification for a difference in rates, 
 is the existence of competition at the preferred point 
 which does not obtain at the complaining point. ^^ 
 
 § 804. Cost of service as a difference of condition. 
 
 Another primary consideration for the carrier is the cost 
 of the service rendered. If conditions at a given point 
 render service at that point more expensive than at an- 
 other, it must pay the penalty in the form of higher rates. 
 It cannot be relieved of its disadvantages by an equaliza- 
 tion of rates. ^' Among such conditions are steep grades 
 making difficult operation,^* the necessity of crossing a 
 river on a toll bridge,^* and heavy terminal expenses, which 
 
 "Bennett v. Button, 10 N. H. ^a gellsdyke Coal Co. v. North 
 
 481, B. & W. 105. British Ry., 2 Ry. & Can. Tr. Cas. 
 
 ^ Hitchman Coal & Coke Co. v. 105; Nitshill Coal Co. v. Caledonian 
 
 V. & O. Ry., 16 I. C. C. 512. Ry., 2 Ry. & Can. Tr. Cas. 39. 
 
 "In re Restricted Rates, 20 1. C.C. '^B\ickwa.y v. U. & D. Ry., 8 I. 
 
 426. C. C. 21; BiUings Chamber of Com- 
 
 20 Bovaird Supply Co. v. A., T. & merce v. C, B. & Q. Ry., 19 I. C. C. 
 S. F. Ry., 13 I. C. C. 56. 71; Board of Trade of Winston- 
 
 21 East St. Louis Cotton OU Co. v. Salem v. N. & W. Ry., 26 1. C. C. 146. 
 St. L. & S. F. Ry., 20 I. C. C. 37. «* Freight Bureau v. Cincinnati, 
 
 22 Competition as a dissimilarity N. O. & T. P. Ry., 7 I. C. C. 180; 
 of circumstances and conditions is Commercial Club v. C. & N. W. Ry., 
 treated in sees. 792-802. 7 I. C. C. 386. 
 
 [738] 
 
Discrimination Between Localities [ § 804 
 
 are inevitably larger in a great center like Kansas City 
 than in a smaller place where terminal work can be done 
 more expeditiously and economically.^" The location of 
 a point on a branch line, involving as it usually does two or 
 three terminal charges, presents a dissimilarity of condition 
 as compared with points on the main line.'^ The volume 
 of traffic and the possibility of back freights are also con- 
 ditions which may justify a difference in rates, especially 
 when light traffic is joined with difficult operation. ^^ 
 A difference in population and tonnage may constitute a 
 dissimilarity which will make it lawful for a carrier to 
 collect and deliver at its own expense in a city of 70,000, 
 while not doing so in a city of 6,000.^^ Ports, even more 
 than inland centers, differ from one another in the circum- 
 stances and conditions surrounding transportation, and the 
 promptness with which a shipper releases equipment at one 
 yard, where the facilities are ample, cannot reasonably be 
 taken as conclusive in determining what would constitute 
 promptness at another port.^" Other circumstances than 
 cost to the carrier may be considered. The fact that deal- 
 ers at a particular point must pay for a team haul of from 
 20 to 40 miles justifies a difference in rates. '^ Whether 
 the Great Lakes are open or closed to navigation may 
 
 » Rice V. Western N. G. & P. Ry., W. Ry., 16 I. C. C. 326; Billings 
 
 2 I. C. C. 298, 2 I. C. C. Rep. 389; Chamber of Commerce v. C, B. & Q. 
 
 Kansas City Transportation Bureau Ry., 19 I. C. C. 71; Board of Trade 
 
 V. A., T. & S. P. Ry., 15 I. C. C. 491. of Winston-Salem v. N. & W. Ry., 
 
 "Lehman v. Texas & P. Ry., 3 26 I. C. C. 146; Cherokee Lumber 
 
 1. C. C. 706, .5 I. C. C. 44; Kansas Co. v. A. C. L. Ry., 27 I. C. C. 438. 
 City Transportation Bureau v. A., T. «« D., G. H. & M. Ry. v. Int. Com. 
 
 & S. F. Ry ., 15 I. C. C. 491 ; Board Comm., 74 Fed. 803. See also on pop- 
 
 of Trade of Winston-Salem v. N. & ulatioii a.s a difference of condition, 
 
 W. Ry., 16 I. C. C. 12. But see Anacostia Citizens' Ass'n v. B. & O. 
 
 Santa Rosa Traffic Ass'n v. So. Pac. Ry., 25 I. C. C. 411; Philadelphia 
 
 Ry., 24 I. C. C. 46. Veneer & Lumber Co. v. C. Ry. of 
 
 28 New Orleans Cotton Exchange v. N. J., 25 I. C. C. 653. 
 I. C. Ry., 2 Int. Com. Rep. 777, 3 '» Lynah & Read v. B. & O. Ry., 
 
 I. C. C. Rep. 534; Railroad Commis- 18 I. C. C. 38. 
 
 sion V. L. & N. Ry., 11 I. C. C. 300; " Laner & Son v. So. Pac. Ry., 18 
 
 Chicago Lumber & Coal Co. v. T. S. I. C. C. 109. 
 
 [739] 
 
§ 805 ] Railroad Rate Regulation 
 
 influence the rates on copper and copper wire.^^ When a 
 station is situated more than a mile from the business 
 center of the city free cartage is justified, though it is not 
 given in a neighboring city where the station is near the 
 business center.'^ It has even been held that long estab- 
 lished custom may be a "circumstance" justifying a 
 difference in rates. '^ But even where dissimilarities of 
 circumstance justify a preference, the carrier is not relieved 
 altogether from the restraint of section 3 of the Act, and 
 the amount of discrimination must not be greater than 
 the dissimilarity of circumstances demands, ^^ or than is 
 warranted by the greater service which the carrier per- 
 forms.'^ 
 
 § 805. Reconsignment arrangements and other transit priv- 
 ileges. 
 
 A very important feature in modern railroading is the 
 permission given to the owners of goods in transit to have 
 the advantages of the through rate upon paying a very 
 small additional premium, although the transit is inter- 
 rupted in order to do something to the commodities in 
 question at some intermediate point, to prepare them for 
 market, or even entirely to change their form by manu- 
 facture of some sort. A carrier may grant to a shipper the 
 right to stop in transit to mill or clean or bag his grain, 
 compress his cotton, or even to search for a local market, 
 and then pursue the journey again, and charge a through 
 rate for the whole transit; and this practice does not 
 
 " Michigan Copper & Brass Co. v. " Brady v. Penn. Ry., 2 Int. Com. 
 
 D. S. S. & A. Ry., 25 I. C. C. 357; Rep. 78, 2 I. C. C. 131; Planters' 
 
 American Insulated Wire and Cable Gin & Compress Co. v. G. & M. V. 
 
 Co. V. C. & N. W. Ry., 26 I. C. C. Ry., 16 I. C. C. 131; Sondheimer v. 
 
 415. I. C. Ry., 17 I. C. C. 60; Galveston 
 
 '^ Interstate Commerce Commis- Commercial Ass'n v. A., T. & S. F. 
 
 sion V. D., G. H. & N. Ry., 167 Ry., 25 I. C. C. 216. But see Hitch- 
 
 U. S. 633, 42 L. ed. 306, 17 Sup. Ct. man Coal & Coke Co. v. V. & O. Ry., 
 
 !)86. 16 I. C. C. 512. 
 
 »' D,, G. H. & N. Ry. v. Int. Com. =» In re Wharfage Charges at 
 
 Coram., 74 Fed. 803. Galveston, 26 I. C. C. 695. 
 [740] 
 
Discrimination Between Localities [ § 805 
 
 unduly prejudice other points." Under such circumstances 
 a through rate may be established, not by uniting on a 
 single rate for one entire haul over two roads, but by 
 charging the separate rate on the goods to the junction 
 point, and then, upon the goods being there reconsigned 
 and reshipped over a second road, paying a rebate on the 
 charges of the first or of the second road.'* This is some- 
 times allowed when the goods are taken by the consignee 
 at the junction point and there held for a considerable 
 time, for the purpose of awaiting a favorable turn of the 
 market. These privileges are only applicable to ship- 
 ments intended from the outset to be through shipments, '^ 
 and in order that this privilege may be legal, the agree- 
 ment for through carriage must be made at the time of 
 the original shipment.'"' And the privilege must be ex- 
 tended by the carrier to all shippers on its line under 
 similar circumstances and conditions, or else that place to 
 which the privilege is not given will be unduly preju- 
 diced.^' Permitting corn to be unloaded into elevators at 
 Cairo, 111., to be treated and shipped at balance of through 
 rate, carrier paying to the elevator company an allowance 
 of % cent per 100 pounds, but refusing to allow such 
 
 " Cowan V. Bond, 39 Fed. 55, 2 permissible where the same goods 
 
 Int. Com. Rep. 542; Listman Mill are reconsigned at some point in 
 
 Co. V. Chicago, M. & S. P. Ry., 8 transit, the granting of a special 
 
 I. C. C. Rep. 47; Re Alleged Unlaw- rate for the transportation of other 
 
 ful Rates, 8 I. C. C. Rep. 121; Re goods from u, certain point to those 
 
 Rates and Practices of Mobile & who show "expense bills'' for an 
 
 0. Ry., 9 I. C. C. Rep. 373; St. Louis equal amount received over an asso- 
 H. & G. Co. V. Illinois Cent. R. R., 11 elated line constitutes illegal dis- 
 
 1. C. C. Rep. 486. crimination, .'\labama & V. Ry. Co. 
 ^ Railroads which have formerly v. Railroad Commission, 86 Miss. 
 
 allowed reconsignment without ad- 667, 38 So. 356, affirmed in 203 
 
 ditional charge may make an extra U. S. 496, 51 L. ed. 289, 27 Sup. Ct. 
 
 charge for cars standing on a "hold 163. 
 
 track" awaiting reconsignment di- " Re Alleged Unlawful Rates, 7 
 
 rections. State v. Atchison, T. & S. F. I. C. C. Rep. 240. 
 
 Ry. Co., 176 Mo. 687, 75 S. W. 776. " Commercial Club v. C, R. I. & 
 
 See also State v. Atlantic C. L. Ry. P. Ry., 6 I. C. C. 647; Koch v. 
 
 (Fla.), 52 So. 4. Pennsylvania Ry., 10 I. C. C. Rep. 
 
 " Although a true rebilling rate is 675. 
 
 [741] 
 
§ 806 ] Railroad Rate Regulation 
 
 privilege or make such allowance at Decatur, 111., was 
 held unduly preferential; *^ and the granting of transit 
 privileges on lumber at Memphis and denying it at Cairo 
 was held to constitute an undue discrimination.^' All 
 reconsignment arrangements must be carefully scrutinized, 
 for they readily lend themselves to abuse, and result in 
 unlawful discrimination. An ingenious attempt to conceal 
 such a preference under the guise of a reconsignment agree- 
 ment was made by the Santa Fe Railway, which allowed a 
 rate of 10 cents on barbed wire, wire nails, wire staples and 
 wire fencing, in carloads, from El Paso, Tex., to Las 
 Cruces, N. M., when brought into El Paso over its lines, 
 but charged a rate of 30 cents when brought into El Paso 
 over the lines of other carriers. To take advantage of the 
 10 cent rate, the shipper might keep the goods at El Paso 
 as long as he desired, and the rate would be accorded to 
 him upon shipment of the same to Las Cruces, provided 
 only the goods were originally shipped into El Paso over 
 defendant's lines. The Commission held that such a rate 
 was not in any sense a proportional rate, could not be 
 sanctioned as a transit, reconsignment, or diversion 
 privilege, and was merely an unlawful device to compel 
 shippers to send their goods into El Paso over the defend- 
 ant's road.^"* A transit privilege may be withdrawn. Even 
 though complainant alleged that its business had been 
 built up on the strength of a transit privilege which had 
 been taken away, the Commission refused to order its 
 restoration.^^ 
 
 § 806. Back freight may be lower than outward freight. 
 
 There is no reason for requiring the same charge for 
 carriage between the same points in opposite directions. 
 Various factors which properly enter into the rate may 
 be different in the two cases. One reason often given for 
 
 " Suffem Grain Co. v. I. C. Ry., " Bascora Co. v. A., T. & S. F. Ry., 
 
 22 I. C. C. 178. 17 I. C. C. 354. 
 
 "■■' Sondheimer Co. v. I. C. Ry., 20 " Schmidt & Sons v. M. C. Ry., 
 
 I. C. C, 606. 19 I. C. C. 535. 
 
 I 7421 
 
Discrimination Between Localities [ § 807 
 
 justifying a higher rate in one direction is the fact that the 
 volume of traflBc may be less. It is characteristic of the 
 inexact character of the law of rate making that this 
 fact might also justify a lower rate, if the railroad chose 
 to make it. At all events where in the direction of lighter 
 traffic a railroad is carrying many empty cars, it will be 
 justified in lowering the rate in order to fill the cars.**^ 
 So the Commission has sustained the railways in charging 
 a lower rate upon soft-wood lumber from Pacific coast 
 producing points to eastern destinations than it charges 
 upon hard-wood lumber from such eastern destinations to 
 Pacific coast points.'"' When the preponderance of freight 
 is so largely in one direction that the supply of empty cars 
 exceeds the demand for return loads at full rates, it is 
 held to be not unlawful to encourage business by affording 
 transportation on less profitable terms. Of course this 
 making of low "back freights" is subject to the limitation 
 that the rate must not be so low as not to recoup the 
 railroad for the additional expenses in hauling back loaded 
 cars, which must receive due protection during transit.^* 
 
 § 807. What differentials may be allowed. 
 
 In principle differentials do not differ from any other 
 form of discrimination, but certain differentials have been 
 practised for so long that a kind of legitimacy has come to 
 be implied in that term which is not associated with the 
 balder word discrimination. This perhaps is largely due 
 to the fact that the term differential is never appHed 
 to discriminations between persons — a form of preference 
 
 *" Special circumstances, such as in one direction the fact that the 
 the flow of traffic, may show that a freight rate is lower in the opposite 
 higher freight rate in one direction direction tends to show that the 
 than in the opposite is not an over- higher rate is unreasonable where 
 charge. Scull v. Atlantic C. L. R. R. the grades on the road and the ex- 
 Co., 144 N. C. 180, 56 S. E. 876. pense of moving trains is substan- 
 
 " Burgess v. Transcontinental tially the same in both directions. 
 
 Freight Bureau, 11 I. C. C. 668. Southern Ry. Co. v. Railroad Com- 
 
 ■isBut in testing the reasonable- mission, 42 Ind. App. 88, 83 N. E. 
 
 ness of a freight charge for carriage 721. 
 
 [743] 
 
§ 807 ] Railroad Rate Regulation 
 
 which has been regarded as peculiarly offensive — but only 
 to discriminations between commodities or between places, 
 for which it is often possible to find some justification in 
 public policy. The Commission itself has said that it may 
 "be lawful and be supported by just public considera- 
 tions, for carriers to give equal access to markets to locali- 
 ties of dissimilar distances; and it ma,y involve no material 
 difference in expense to the carrier. No producer or ship- 
 per has an exclusive right to supply a market, and the 
 interests of consumers and of the general public may 
 justify carriers in enlarging the field from which the de- 
 mand for a commodity may be supplied on terms of 
 equality for transportation. That is only a recognition of 
 the principle that the general interests are paramount to 
 individual or local interests." ^' In dealing with complaints 
 as to differentials between places, the Commission is con- 
 fronted at the outset by the fact that many important 
 commercial centers owe their very existence to differentials. 
 In the argument before the Commission in the case of the 
 Chamber of Commerce of New York v. N. Y. C. & H. R. 
 Ry.,*" counsel for Boston stated that. Boston could not 
 live unless it was given a differential under New York. 
 The whole of industrial New England is equally dependent 
 upon this form of discrimination. This to be sure is not a 
 legal argument, but the Commission is always reluctant 
 to disturb any rate adjustment of long standing, and when 
 such disturbance would obviously be followed by disas- 
 trous consequences to an important community this 
 reluctance is increased. In such cases therefore the Com- 
 
 ■" Quoted from Schoonmaker, Com., along the same lines, the most 
 
 in Imperial Coal Co. v. Pittsburgh southerly being B., 112 miles beyond 
 
 & L. E. Ry., 2 Int. Com. Rep. 436, N., the rate was the same. The 
 
 2 I. C. C. Rep. 618. In State ex rel. court inclined to support this schedule 
 
 V. Minneapolis & St. L. R. R., 80 upon the commercial necessities of 
 
 Minn. 191, 83 N. W. 60, 89 Am. St. the situation, citing Steenerson v. 
 
 Rep. 514, it was shown that the tariff Gt. Northern Ry., 69 Minn. 353, 72 
 
 rate on coal from D. to N. was $2.50 N. W. 713. 
 
 and from D. to twenty-one stations ™ 24 I. C. C. 55. 
 
 [744] 
 
Discrimination Between Localities [ § 808 
 
 mission will ask whether the differential is undue, and if it 
 is not, no change will be ordered." In this negative way 
 the Commission gives its sanction to rate systems which it 
 could not compel the carrier to make. Hence points which 
 have long enjoyed differentials and which are content with 
 differentials which are not undue or unreasonable are not 
 likely to be disturbed by the Commission. At the same 
 time the Commission holds that it is not the function of 
 either the railroads or the Commission so to adjust rates 
 that business will or will not be done at a particular 
 place, ''^ or to apportion, traffic between rival ports or 
 cities.*' 
 
 § 808. Systems of rate making based on differentials. 
 
 There are several systems of rate making, long in use 
 and covering much of the country, which are at bottom 
 only a kind of glorified differential. Such is the basing- 
 point system which prevails at the South. Under this sys- 
 tem certain places of more or less importance are selected 
 as basing points, and through rates are then constructed 
 by granting a comparatively low rate to the basing point, 
 to which is then added the local rate to the point of desti- 
 nation.'^* The basing-line system involves the same princi- 
 ple, except that a line is used instead of a point. Both sys- 
 tems, it is alleged, are the outgrowth of competition, and 
 are established in order that all roads concerned may 
 share in the business and all shippers be given opportunity 
 to compete in common markets. =* It is obvious that both 
 necessarily involve discrimination. Both the Commission 
 and the courts, however, have upheld the system,*^ but the 
 
 " Andy's Ridge Coal Co. v. So. point system is given in Board of 
 
 Ry., 18 I. C. C. 405. Trade of CarroUton, Ga., v. C. of G. 
 
 " Duncan & Co. v. N. C. & St. L. Ry., 28 I. C. C. 154. 
 
 Ry., 16 I. C. C. 590; Suffern Grain ^^ Avery Manufacturing Co. v. 
 
 Co. V. I. C. Ry., 22 I. C. C. 178. A., T. & S. P. Ry., 16 I. C. C. 20. 
 
 '' Chamber of Commerce of New ^ Interstate Commerce Commis- 
 
 York V. N. Y. C. & H. R. Ry., 24 sion v. A. M. Ry., 168 U. S. 144, 42 
 
 I. C. C. 55. L. ed. 414, 18 Sup. Ct. 45; Interstate 
 
 " A good description of the basing- Commerce Commission v. W. & A. 
 
 [745] 
 
§ 808 ] Railroad Rate Regulation 
 
 Commission has held that there may be undue discrimina- 
 tion in the local rate *' and in the selection of the basing 
 points. The latter particularly has been a fruitful source 
 of litigation, and the Commission has said that "the car- 
 rier is not at liberty in the selection of their basing points 
 to determine that this town shall have the benefits of the 
 low rate and that town shall not, when the means of 
 competition and the conditions surrounding that competi- 
 tion do not materially differ." ^^ Still a third system of 
 rate making which involves differentials is that of blanket 
 or group rates. In all group systems there is an inequality 
 of rates, when distance alone is considered, as between 
 points on one side of a group and those on the other 
 side.^^ The rate to the nearer edge of the group as com- 
 pared with the more distant edge is of necessity discrimina- 
 tory. This discrimination grows relatively greater in 
 proportion as the distance from the group decreases, and 
 there must come a point when the place of origin is so 
 near the group that the discrimination will become un- 
 due.*" Nevertheless the Commission looks upon this 
 method of rate making with favor, and finds it advanta- 
 geous alike to the producers, the public, and the carriers.** 
 
 Ry., 181 U. S. 39, 45 L. ed. 729, 21 =» Mayor & Council of Tifton v. 
 
 Sup. Ct. 512; Interstate Commerce L. & N. Ry., 9 I. C. C. 160. 
 
 Commission v. L. & N. Ry., 190 U. S. » Saginaw Board of Trade v. G. T. 
 
 273, 47 L. ed. 1047, 23 Sup. Ct. 687. Ry., 17 I. C. C. 128. AU points in 
 
 " The local differentials may vary Texas common point territory, 500 
 
 in accordance with local conditions. miles in extent from north to south 
 
 "In the making of joint through and 450 miles from east to west, take 
 
 rates on long-distance traffic, to the same commodity rates from any 
 
 local or non-competitive points, the point in the United States on or east 
 
 differentials above the rates to the of the Missouri and Mississippi rivers, 
 
 basing points should bear some Texas Common Point Case, 261. C. 
 
 reasonable relation to the total dis- C. 628. 
 
 tances involved; and where the long- "^ Kaufmann Commercial Club v. 
 
 haul traffic to local stations is meager T. & N. D. Ry., 31 I. C. C. 162. 
 
 these differentials may perhaps be "' Chicago Lumber & Coal Co. v. 
 
 higher than otherwise they would T. S. Ry., 16 I. C. C. 323; American 
 
 be." Board of Trade of CarroUton, Coal Co. v. B. & O. Ry., 17 I. C. C. 
 
 Ga., V. C. of G. Ry., 28 I. C. C. 149; Waukesha Lime & Stone Co. v. 
 
 154. C, M. & St. P. Ry., 26 I. C. C. 515; 
 
 [746] 
 
Discrimination Between Localities [ § 809 
 
 In the making of blanket rates, commercial rather than 
 transportation conditions govern, and this leads to a 
 subordination of distance as a factor in the rate.^- If the 
 adjustment of the group of rates as a whole is just and 
 reasonable, inequaUties in individual rates may be over- 
 looked.''' When blanket rates are compared with rates 
 outside the group, neither extreme of the group should 
 be taken, but rather a fair average.^^ The system by 
 which rates are made is however of little interest to the 
 Commission except as a means of enabling it to ascertain 
 whether the rates are reasonable and non-discriminatory."" 
 Rates upon whatever theory constructed must conform to 
 those requirements. 
 
 § 809. No obligation to make preferential rates. 
 
 How weak the argument is in favor of preferential rates 
 of any kind is disclosed by one feature not perhaps as 
 yet sufficiently emphasized. The utmost that these cases 
 permitting preferential treatment have decided is that the 
 company which adopts one of these policies to get busi- 
 ness may perhaps be justified for making disproportionate 
 rates. But it should be noted that no company receives 
 any condemnation which ignores these policies altogether 
 in fixing its rates. Even the most enthusiastic economists 
 would not go so far as to argue that the railroads must 
 make it their policy to equalize natural advantages, to 
 the end that all regions shall have equal access to cen- 
 tral markets.''" Certainly legislation designed to enforce 
 relative equality between rates is not outrageous; and 
 
 Where these towns are strong com- "'' Oregon Washington Lumber 
 
 petitors it is important to have n Manufacturers' Ass'n v. So. Pac. 
 
 common rate, if conditions justify Ry., 21 I. C. C. 389. 
 
 it. Railroad Commissioners of Flor- ""^ State of Kansas v. A., T. & S. F. 
 
 ida V. S. A. L. Ry., 16 I. C. C. 1. Ry., 27 I. C. C. 672. 
 
 ^2 Avery Manufacturing Co. v. °* A State may insist upon an 
 
 A., T. & S. F. Ry., 16 I. C. C. 20. equahty of rates under equivalent 
 
 " Monroe Progressive League v. conditions. Seaboard Air Line Co. 
 
 St. L. & L M. & S. Ry., 15 I. C. C. v. Florida, 203 U. S. 261, 51 L. ed. 
 
 534. 175, 27 Sup. Ct. 109. 
 
 [7471 
 
§ 809 ] Railroad Rate Regulation 
 
 surely no rate making body would compel the establish- 
 ing of preferential rates.*^ The Commission in fact has 
 said that a carrier is under no obligation to counteract 
 the results of natural conditions by rate reductions/' 
 nor may any place claim a preference as a matter of 
 right.*'' Certain economic necessities of the carrier are 
 recognized as justifying it in making certain discrimina- 
 tions. Further than that the law does not go. 
 
 " A State may enforce equality "' National Refining Co. v. C, C, 
 
 of local rates even if loss results. C. & St. L. Ry., 20 I. C. C. 649. 
 
 Alabama & V. Ry. Co. v. Missis- "' Billings Chamber of Commerce 
 
 sippi R. R. Comm., 203 U. S. 496, v. C, B. & Q. Ry., 19 I. C. C. 
 
 51 L. ed. 289, 27 Sup. Ct. 163. 71. 
 
 [748] 
 
PART II— PREVENTION OF DISCRIMINATION 
 CHAPTER XVII 
 
 SCHEDULES OF RATES 
 
 § 810. Provisions of the Act. 
 811. Scope of its policy. 
 
 Topic A. Necessity of Filing Schedules 
 
 § 812. What rates must be published. 
 
 813. Effect of scheduling rates. 
 
 814. Terminal and transit charges. 
 
 815. Rules and regulations. 
 
 816. What constitutes sufficient publication. 
 
 817. Where rates must be posted. 
 
 818. Posting distinguished from filing. 
 
 819. Consequences of failing to file. 
 
 820. No practice legal without tariff provision. 
 
 821. Devices to avoid the section. 
 
 822. Only scheduled rates legal. 
 
 823. Rate wars no excuse. 
 
 Topic B. Departure from Published Rates 
 
 § 824. Reparation for improper charges. 
 
 825. Certain technical points discussed. 
 
 826. Criminal liability for violation. 
 
 827. Essentials of the crime. 
 
 828. Requirements relating to fiUng. 
 
 829. Conclusive presumption of legality. 
 
 830. Of whom filing required. 
 
 831. Provisions cannot have retroactive effect. 
 
 832. Schedules working changes in rates. 
 
 833. Invalidity of varied rate. 
 
 834. Stipulations in bills of lading. 
 
 835. Limitations of legal obUgations. 
 
 Topic C. Joint Tariffs and Schedules 
 
 S 836. Meaning of joint tariff: 
 
 837. Making and filing jointly. 
 
 838. What particulars must be published. 
 
 [749] 
 
§ 810 ] Railroad Rate Regulation 
 
 § 839. Rates based upon combinations. 
 
 840. What combinations are justified. 
 
 841. Whether export rates must be filed. 
 
 842. Divisions and proportional rates. 
 
 843. Parties liable to prosecution. 
 
 To-pic D. Form of Schedules Required 
 
 § 844. Clearness of statement. 
 
 845. Necessary fullness of statement. 
 
 846. Methods of stating rates. 
 
 847. Requirement of the Commission. 
 
 848. Consequences of indefinite tariflfs. 
 
 849. All pertinent conditions requisite. 
 
 850. Rules for construing schedules. 
 
 851. Specific ratings overrule general. 
 
 § 810. Provisions of the Act. 
 
 The original section for the fihng of schedules, added 
 to the machinery of regulation in 1889, was recast in 
 1906, and again amended in 1910. Every common car- 
 rier subject to the provisions of section 6 must file with 
 the Commission, and print and keep open to public in- 
 spection, schedules showing all the rates, fares, and charges 
 for transportation between different points on its own 
 route, and between points on its own route and points on 
 the route of any other carrier by railroad, by pipe line, 
 or by water when a through route and joint rate have 
 been estabUshed. If no joint rate over the through route 
 has been established, the several carriers in such through 
 route shall file, print and keep open to public inspection 
 as aforesaid, the separately established rates, fares and 
 charges applied to the through transportation. The sched- 
 ules printed as aforesaid by any such common carrier 
 shall plainly state the places between which property 
 and passengers will be carried, and shall contain the classi- 
 fication of freight in force. Such schedules shall be plainly 
 printed in large type, and copies for the use of the public 
 shall be kept posted in two pubhc and conspicuous places 
 in every depot, station, or office of such carrier where 
 passengers or freight, respectively, are received for trans- 
 [750] 
 
Schedules of Rates [ § 811 
 
 portation, in such form that they shall be accessible to 
 the public and can be conveniently inspected. The pro- 
 visions of this section shall apply to all traffic, trans- 
 portation, and facilities defined in this Act. No change 
 in rate shall be made without thirty days' notice to the 
 Coirmiission and the pubhc; however, the Commission 
 may permit the period to be shortened, or modify any of 
 the provisions for publishing, posting and filing. The 
 Commission may reject and refuse to file any schedule 
 not conforming to the requirements of the Act. 
 
 § 811. Scope of its policy. 
 
 One of the chief points of the pohcy requiring scheduling 
 is to make it clear that any departure from the published 
 rate is ipso facto discriminatory. It is to be noted that 
 the Act definitely provides that no carrier shall charge 
 or demand or collect or receive a greater or less or different 
 compensation for such transportation of passengers or 
 property, or for any service in connection therewith, be- 
 tween the points named in such tariffs than the rates, 
 fares, and charges which are specified in the tariff filed 
 and in effect at the time; nor shall any carrier refund or 
 remit in any manner or by any device, any portion of the 
 rates, fares, and charges so specified, nor extend to any 
 shipper or person any privileges or faciUties in the trans- 
 portation of passengers or property, except such as are 
 specified in such tariffs. And, to prevent, so far as may be, 
 the covering of rebates by allowances to shippers inciden- 
 tally, the Act as amended requires that the schedules filed 
 shall also state separately all terminal charges, storage 
 charges, icing charges, and all other charges which the 
 Commission may require, all privileges or facilities granted 
 or allowed and any rules or regulations which in any wise 
 change, affect, or determine any part or the aggregate 
 of such aforesaid rates, fares, and charges, or the value 
 of the service rendered to the passenger, shipper, or con- 
 signee. It is proper to add, however, that the require- 
 
 [751] 
 
§ 812 ] Raileoad Rate Regulation 
 
 ment of publication found in the law is based upon many 
 other considerations besides that of affording protection 
 to shippers. 
 
 Topic A. Necessity of Filing Schedules 
 
 § 812. What rates must be published. 
 
 The Commission will insist under all circumstances that 
 all rates must be published, both for passengers and freight, 
 together with all terms and conditions relating thereto."" 
 If, for instance, first class and second class rates are given 
 for passengers, both must be published.'^' And where pas- 
 senger excursion rates applicable only for the time being 
 are offered, they must be published.'^ In order to make 
 any distinction in rating of freight for export, the rates 
 must be given as well on freight which is, as on that 
 which is not, for export.''^ It is fundamental that all 
 services and privileges must be scheduled to be available, 
 and adherence to these principles has been demanded by 
 repeated decisions of the Commission.^* Thus the privi- 
 lege of reconsignment is service requiring publication to 
 make its granting legal.'^ There should be a tariff pro- 
 vision to justify a charge for re-icing when fruit is moving 
 under refrigeration.'^^ Terminal charges must be sched- 
 uled, in order to be made the basis for constructing rates 
 based upon billing for services performed." And there 
 should be no transit rights granted except such as are 
 scheduled.'* And in general it may be said that under 
 the sweeping provisions of the Act as amended no charge 
 
 ■"> Re Tickets, 23 I. C. C. 95. " Folmer & Co. v. Great W., 15 
 
 " Folmer & Co. v. G. W. Ry., 15 I. C. C. 33. 
 
 I. C. C. 33. " Bannon v. Southern Express Co., 
 
 " Pittsburgh, C. & S. L. Ry. v. 13 I. C. C. 516. 
 
 Baltimore & O. R. R., 2 Int. Com. ™ Atchison, T. & S. F. Ry., 18 
 
 Rep. 729, 3 I. C. C. 465. I. C. C. 310. 
 
 " New Orleans Cotton Exch. v. " Neosho Milling Co. v. Kansas 
 
 Louisville, N. O. & T. Ry., 3 Int. City So. Ry., Unrep. op. 433. 
 
 Com, Rep. 523. ™ New England C. & C. Co. v. 
 
 N. & W. Ry., 22 I, C, C. 398. 
 
 [752] 
 
Schedules of Rates [ § 813 
 
 can be made of the shipper by the carrier for anything 
 connected with the transportation of his goods, so far as 
 they are ia course of carriage subject to the jurisdiction 
 of the Commission, unless the rates therefor are to be 
 found plainly enough set down in the schedules on file. 
 
 § 813. Effect of scheduling rates. 
 
 A rate may be unlawful in view of section 1, and at 
 the same time be the legally established rate under sec- 
 tion 6. The sole test of the legality of a charge is the 
 publication of the rate in the manner and form prescribed 
 by the statute^' Thus, although a scheduled rate may be 
 proved unreasonable by proper proceedings before the 
 Commission to have the same reduced, once it is put in 
 effect, not having been suspended by action of the Com- 
 mission, it remains the legal rate which all must pay so 
 long as it remains unaltered. And conversely no charge 
 can be rightfully collected where there is no tariff provi- 
 sion therefor, as the only basis for making a charge which 
 has the sanction of the law is the schedule itself, open to 
 all aUke.*" The jurisdiction of the Commission and the 
 purposes of the law cannot be defeated by the omission 
 or failure of carriers to include in their schedules, and to 
 keep posted and open to public inspection the rates, fares 
 and charges for the entire service, both transportation 
 proper and refrigeration, which under the law they are 
 bound to provide.^^ Terminal charges being part of 
 transportation and demurrage charges being included in 
 the term "terminal charges," the failure by a carrier to 
 observe demurrage tariffs filed and published by it and the 
 soliciting and receiving of concessions with respect to 
 demurrage charges are misdemeanors for which a prose- 
 cution will lie under the Act.*^ 
 
 " Crescent Coal & Mining Co. v. »' Waxelbaum v. A. C. L. R. R., 
 
 C. & E. I. R. R., 24 I. C. C. 149. 12 I. C. C. 178. 
 
 «" Beekman Lumber Co. v. L. Ky. "- Lehigh V. R. R. v. United States, 
 
 & N. Co., 19 L C. C. R. 343. 188 Fed. 179. 
 
 48 [ 753 ] 
 
§ 814,] Railroad Rate Regulation 
 
 § 814. Terminal and transit charges. 
 
 The rates which carriers are required by the Act to pub- 
 Ush, file, and adhere to without deviation, cover not 
 merely the carriage, but services rendered in receiving 
 and delivering property as well.^^ The schedule should 
 state, among other terminal charges, the rules and regula- 
 tions, if any, of the carrier in relation to storage.*^ If 
 free storage facilities are allowed, the schedule should so 
 state.^^ So when charges for refrigeration are applied 
 in the transportation of perishable freight, such charges 
 should be published and followed as all other charges 
 for transportation are published and observed.*^ Inci- 
 dental service performed by carriers at transshipment 
 ports, such as dumping and trimming or leveling, should 
 be covered by tariff provisions and filed with the Com- 
 mission.*^ And any charges by carriers for readjusting 
 loads of piling or poles, made necessary by shifting, 
 improper loading, or heavy grades, must be provided for 
 by proper tariff rules.** The terminal service given at 
 local stations must be pubhshed, and it must be plainly 
 indicated which are free-delivery stations.** Demurrage 
 is not required to be paid unless the tariff so pro- 
 vides."" According to these fundamental principles, penal- 
 ties for delay cannot be imposed without tariff authority.' ' 
 And, generally speaking, when rates are filed and published, 
 carriers must abide thereby, and no allowances of any 
 kind not specified in tariffs can lawfully be paid.'^ 
 
 ss Phelps V. Texas & P. Ry., 4 Int. & Refrigeration, 11 I. C. C. Rep. 
 
 Com. Rep. 363, 6 I. C. C. Rep. 36. 129. 
 
 '< Pennsylvania Millers' State «' New England C. & C. Co. v. 
 
 Ass'n V. Philadelphia & R. R. R., 8 N. & W. Ry. Co., 22 I. C. C. R. 398. 
 
 1. C. C. Rep. 531; Blackman v. »» California Pole & Piling Co. v. 
 
 Southern Ry., 10 I. C. C. Rep. 352. S. P. Co., 22 I. C. C. 507. 
 
 '' American Warehousemen's Ass'n *' In re Express Rates, 24 I. C. C. 
 
 V. Illinois Central R. R., 7 Int. Com. 380. 
 
 Rep. 556. " Crescent Coal & Mining Co. v. 
 
 » Re Transportation of Fruit, 10 B. & O. R. R., 20 I. C. C. 559. 
 
 I. C. C. Rep. 360; Blackman v. »i Crutchfield & Woolfolk v. S. P., 
 
 Southern Ry., 10 I. C. C. Rep. 352; 24 I. C. C. 651. 
 
 In re Charges for Transportation "^ -j^.^ Salle & B. County R. Co. v. 
 
 [754] 
 
Schedules of Rates [ § 815 
 
 § 816. Rules and regulations. 
 
 Rules or regulations in any wise changing, affecting, or 
 determining any part of the aggregate of a carrier's rates, 
 fares, or charges must be shown separately upon the 
 posted schedules. Any such rules or regulations pro- 
 mulgated in circulars issued independently of such sched- 
 ules are not lawfully in force.'*^ The rates charged for 
 the diversion of cars must be pubhshed."'' If stop-over 
 privileges are granted for any purpose, all the facts and 
 circumstances connected therewith should be clearly stated 
 in the published tariff, so that the public generally may 
 enjoy their benefits.'"' So where cotton is allowed a stop- 
 off privilege for the purpose of grading and compressing, 
 this forms part of the service covered by the rate, and 
 should be specified in the published tariffs."^ Where there 
 is tariff authority, it is no violation of Act to require valida- 
 tion of limited excursion tickets, and to charge validation 
 fee therefor.'^ The Commission requires that the carrier 
 should publish, or post for convenient inspection, at fre- 
 quent and regular intervals, the ratings of the various 
 mines and the car tonnage."^ Whatever rules prescribing 
 maximum and minimum carload weights there may be 
 foimd necessary to impose, must be posted."' In one pro- 
 ceeding it appeared that defendant instructed its agents 
 to disregard the regular published tariff rates, and to 
 charge a lower combination rate when less than tariff rates 
 were in force at other stations on its line. It was held 
 that this practice was unlawful, as any rule would be 
 which was not in compliance with the requirements of the 
 
 Chicago & N. W. R. Co., 11 I. C. C. »« Re Alleged Unlawful Rates, 8 
 
 610. I. C. C, Rep. 121. 
 
 »' Suffern v. Indiana, D. & W. Ry., " Riter v. O. IS. L. R. R., 19 I. C. C. 
 
 7 I. C. C. Rep. 2.5.5. R. 443. 
 
 '■• American Warehousemen's Ass'n "' Royal Coal & Coke Co. v. South- 
 
 V. Illinois Central R. R., 7 I. C. C. em Ry., 13 I. C. C. 440. 
 
 Rep. 556. ™ Suffern v. Indiana, D. & W. Ry., 
 
 »5 In re Rates and Practices, Mobile 7 I. C. C. Rep. 255. 
 & O. Ry., 9 I. C. C. Rop. 373. 
 
 [755] 
 
§ 816 J Railroad Rate Regulation 
 
 Act.' In a later case it was said that no objection exists 
 to providing in a tariff that, when a consignee has neg- 
 lected to unload shipment within the free time provided 
 in the carrier's demurrage rule, the carrier may unload it. 
 And it was said that when this is done a charge will be 
 assessed therefor.^ 
 
 § 816. What constitutes sufficient publication. 
 
 The provisions of the law are not complied with by- 
 posting a notice stating that tariffs may be inspected 
 upon application to the carrier's agent.^ Whatever the 
 practical difficulties in arranging matters so that a shipper 
 may at all times have access to schedules, the law must be 
 observed.^ The Act requires publication and maintenance 
 of definite transportation charges;^ and it lays upon carriers 
 the duty to publish and file rates applicable to interstate 
 traffic in which they participate." Publication consists 
 in promulgating and distributing the tariff in printed form 
 preparatory to putting it into effect;^ and it is a step in 
 establishing rates which cannot be dispensed with.* And 
 this general publication is constructive notice, in that 
 all concerned are affected thereby in regard to all matters 
 pertaining to the transportation.* The fact that a shipper 
 is not given personal notice of the promulgation of a car- 
 rier's demurrage regulations neither vitiates the latter's 
 right nor lessens its duty to impose demurrage charges 
 incurred under the rules contained in its lawful tariff.'" 
 A carrier cannot excuse the collection of an unpublished 
 charge for transferring goods by proof that it had a rule 
 
 ' Spillers V. Louisville & N. R. R., « Arkansas Pass Channel & D. Co. 
 
 8 Int. Com. Rep. 364. v. G. H. & S. A. Ry., 27 I. C. C. 403. 
 
 2 Schulz-Hansen Co. v. S. P. Co., " Franke Grain Co. v. I. C. R. R. 
 
 18 I. C. C. 234. Co., 27 I. C. C. 625. 
 
 » Paxton Tie Co. v. Detroit S. R. » Paine Lumber Co. v. C, C, C. & 
 
 R., 10 Int. Com. Rep. 422. St. L. Ry., 27 I. C. C. 625. 
 
 " Rea V. Mobile & O. Ry., 7 Int. » Gough & Co. v. I. C. R. R., 15 
 
 Com. Rep. 43. I. C. C. 280. 
 
 <• In re Restricted Rates, 20 I. C. C. '» Peale, P. & K. v. Central R. R. 
 
 R. 426. Co. of N. J., 18 I. C. C. 25. 
 
 [756] 
 
Schedules of Rates [ § 817 
 
 which forbade the sending of its own cars beyond its own 
 line during a period of congestion of business, where no 
 notice of the rule by reference in a iariff , had been brought 
 to the shipper." It was held under the original provision 
 of the Act that the privilege of free cartage at a certain 
 station, which had been openly and notoriously granted for 
 many years and was well known to all who would have oc- 
 casion to rely on it, need not be posted, though it might be 
 within the power of the Commission to order such posting. ^^ 
 But to a criminal prosecution under the Act as amended 
 against a railroad for accepting from a shipper less than 
 the pubhshed rate filed with the Commission, it has been 
 held no defense that the carriers had spread broadcast 
 among the shippers of the country an announcement that 
 a lower rate would be accepted than the one scheduled, 
 when in fact such rate had not been filed and published as 
 required by the Act." 
 
 § 817. Where rates must be posted. 
 
 Posting a notice in a station or depot that the tariff 
 sheets of the railroad company may be found in some 
 other place is not a compliance with the Act." But it 
 should be noted that section 6 gives the Commission a 
 certain discretion to modify the provision as to posting." 
 In an indictment imder the Elkins Act against a shipper 
 for accepting concessions, it is sufficient for the govern- 
 ment to prove posting and publishing of the tariff at the 
 station where the freight is received for transportation, 
 and it is not required to prove that the carrier had posted 
 and published the same at every station on its line.^* 
 The publication of inland joint tariffs for the transporta- 
 
 " Schwager & Nettleton v. Great •* Johnson v. C, S. P., M. & O. Ry., 
 
 Northern Ry., 12 I. C. C. 521. 9 Int. Com. Rep. 221. 
 
 '2 Interstate Commerce Commis- '^ Franke Grain Co. v. I. C. Ry., 
 
 sion V. Detroit, G. H. & M. Ry., 167 27 I. C. C. 625. 
 U. S. 033, 17 Sup. Ct. 986. '" United States v. Standard Oil 
 
 " U. S. V. Merchants' & Miners' Co., 170 Fed. 988. 
 Transp. Co., 187 Fed. 363. 
 
 [757] 
 
§ 818 ] Railroad Rate Regulation 
 
 tion of foreign merchandise, and of advances and reductions, 
 should be made by posting in a public place at the depot 
 of the carrier where the freight is received in the port of 
 entry, and also where it is delivered at the place of des- 
 tination in the United States.^' A rate, filed with the 
 Commission, but not posted at station, was in one pro- 
 ceeding held unreasonable to extent that it exceeded the 
 combination of the locals.'* But a failure to post a tariff 
 which did not contain a change of the rate in question was 
 held not to be the basis for reparation." 
 
 § 818. Posting distinguished from filing. 
 
 Posting in itself is not a condition to making a tariff 
 legally operative, and is not a condition to the continued 
 existence of a tariff once legally established by filing. The 
 consequences of failing to file have been distinguished by 
 the courts from the penalties for failing to post, A rate 
 may be an established one, so that an offense would be 
 committed by charging less than the rate, even though the 
 rate has not been posted as required by this section.^" 
 Where an indictment against a shipper for obtaining rates 
 lower than the lawfully published rate fails to allege that 
 the published rates were posted for public inspection, as re- 
 quired by the Act, a demurrer to such an indictment will 
 not be sustained.^' In accordance with this view of the 
 matter it has been held that damages cannot be recovered 
 on account of the failure to have a proper tariff posted 
 at its stations. ^^ Even when posted, a rate was not con- 
 sidered by one of the earlier cases to be such a matter of 
 public knowledge that ordinary shippers can be charged 
 with knowledge of it.^^ But it is now well established that 
 
 " New York Bd. of Tr. & Transp. " United States v. Miller, 223 U. S. 
 
 V. P. R. R., 3 Int. Com. Rop. 417. 599, 32 Sup. Ct. 323. 
 
 '* Alpha Portland Cement Co. v. '-- Illinois C. Ry. v. Henderson E. 
 
 P. R. R., 20 I. C. C. R. 640. Co., 226 U. S. 441, 33 Sup. Ct. 
 
 1' Fairbault Furniture Co. v. C. Gt. 176. 
 
 W, Ry., 2,5 I. C. C. 40. ^a Mobile & O. Ry. v. Dismukes, 
 
 ™ United States v. Howell, 56 Fed. 94 Ala. 131, 10 So. 289. 
 21. 
 
 [758] 
 
Schedules of Rates [ § 819 
 
 if the rate is duly published and on file, shippers and con- 
 signees cannot depend for the lawful rate or charge upon 
 what may be quoted by the carrier's agent, but must be 
 guided by the published rate sheets themselves.^* Failure 
 to post may subject carriers to penalties, but it does not in- 
 validate the tariff when it has been properly filed with 
 Commission; for the posting of rates is not a condition to 
 making a tariff legally operative. ^^ If the rate charged was 
 not a tariff rate, jurisdiction exists in the Commission to 
 determine what would have been reasonable and award 
 reparation.^* And if there is no joint tariff, the law requires 
 carriers subject to the Act to file such separately established 
 rates and charges. ^'^ 
 
 § 819. Consequences of failing to file. 
 
 Whatever charges are made, whatever services are per- 
 formed, and whatever privileges are allowed by carriers, 
 must be stated separately in the schedules filed with the 
 Commission. ^^ A common carrier by contract may not 
 impose upon itself any burden or grant any privilege, or 
 perform any service, or make any allowance with respect 
 to the traffic of a particular shipper except under the au- 
 thority of its published tariffs, and then only when the 
 burden is assumed or the privilege granted or allowance 
 made to all shippers under like circumstances and similar 
 conditions. ^^ It follows that unless there is a tariff pro- 
 vision for the charges for services specially performed, 
 the railroad cannot collect anything for rendering these 
 services.'" In one case it appeared that shippers custom- 
 arily performed the service of loading, but the published 
 tariffs made no provision for charges where the carrier 
 
 2< Suffern v. Indiana, D. & W. Ry., ^^ Anderson, Clayton & Co. v. 
 
 7 Int. Com. Rep. 255. C, R. I. & P. Ry. Co., 18 I. C. C. 
 
 25 Buren v. S. P. Co., 26 I. C. C. 340. 
 
 332. 2' General Electric Co. v. N. Y. C. 
 
 » Goldenberg v. Clyde S. S. Co.,' & H. R. R. R. Co., 14 I. C. C. 
 
 20 I. C. C. R. 527. 237. 
 
 " Eagle Pass Lumber Co. v. Nat'l ^° Beekman Lumber Co. v. L. & 
 
 Rys. of Mexico, 25 I. C. C. 5. N. R. R. Co., 19 I. C. C. 343. 
 
 [759] 
 
§ 820 ] Railroad Rate Regulation 
 
 did the loading; the carriers loaded the cars in question 
 and collected the less-than-carload rate, biit it was held 
 that such charge was unlawful, and complainant was 
 entitled to reparation on the basis of the carload rate.^^ 
 In another case where it appeared that the defendant 
 railroad charged the legal rate on grain and refunded to 
 the shipper a certain amount per bushel for elevation 
 service, performed by the shipper at the beginning of 
 transportation; as the carrier's published tariff contained 
 no such allowance, it was held that the railroad was crimi- 
 nally liable under the Elkins Law.'^ The doctrine of the 
 courts is that the provisions of section 15 of the Act, to 
 the effect that shippers may be made an allowance by 
 carriers for services rendered by them in connection with 
 the transportation, relates only to services which the 
 carrier has scheduled in its tariff rates, and published in 
 accordance with section 6 of the Act.'' 
 
 § 820. No practice legal without tariff provision. 
 
 It is altogether unlawful for a carrier to disregard the 
 regular published tariff rates in making up any of its 
 rates, and rely upon unpublished practices.'* Likewise, 
 all rules or regulations which, if enforced, would result in 
 changing or affecting rates or charges shown on the pub- 
 lished schedules must be notified to the public for the time 
 required by law for other rate changes.'" So a practice 
 that grain may be shipped to an intermediate station, and 
 there forwarded as a new shipment at a proportional rate 
 lower than the local rate from that point, is a variation 
 from the local published rate, and therefore illegal.'* In 
 consequence of these general principles, it follows that 
 all transit privileges must be pubUshed in accordance 
 
 " Voorhees v. A. C. L. R. R. Co., '* SpiUers & Co. v. L. & N. R. R., 
 
 16 I. C. C. 42. 8 I. C. C. Rep. 364. 
 
 '2 Wisconsin Central Ry. Co. v. '« Suffern v. Indiana, D. & W. 
 
 United States, 169 Fed. 76. Ry., 7 I. C. C. Rep. 255. 
 
 ^^ Langdon v. Penna. R. R. Co., ™ Re Rates and Practices of Mo- 
 
 194 Fed. 486. bile & O. Ry., 9 I. C. C. Rep. 373. 
 
 [760] 
 
Schedules of Rates [ § 821 
 
 with section 6." And it has often been pointed out by 
 the Commission that demurrage is wrongfully collected 
 where there is no tariff provision therefor.'* Tariffs of 
 the Santa Fe system not found to have provided for the 
 absorption of switching charges at Hutchinson, on traffic 
 milled in transit at that point, it was held improper to make 
 such absorption.'" Rates provided in tariffs on file with 
 the Commission are the only legal rates, and rates pro- 
 vided in tariffs not on file are not valid."" The duly 
 published rate is the legal rate for the shipping public 
 until it is withdrawn under condemnation by the Com- 
 mission or by the voluntary act of the carriers.*^ 
 
 § 821. Devices to avoid the section. 
 
 A scheme to avoid the operation of this section will be 
 futile. Thus, the device by which a published rate for 
 carriage of coal from the mines of the carrier, which in 
 the case of a favored consignee was made to include the 
 price of the coal thus sold to the consignee by the carrier 
 and delivered to him, is of course a violation of the Act."- 
 And deliveries of coal by an interstate carrier, under a 
 contract to sell and transport such coal at a stipulated 
 price, come within the requirement of the Act respecting 
 the maintenance of published rates, whenever, from any 
 cause, the gross sum realized is insufficient to yield the 
 carrier its published freight rates after deducting the pur- 
 chase price of the coal and the cost of delivery." So where 
 a railroad company (through a development company 
 which it owned) bought grain in Kansas City, trans- 
 ported it to Chicago, and there sold it, the purpose being 
 merely to transport it, and the varying profit on the 
 
 " Transit Case, 24 I. C. C. 340. ■" Crescent Coal & Mining Co. v. 
 
 » Beekman Lumber Co. v, L. Ry. C. & E. I. R. R., 34 I. C. C. 149. 
 
 & N. Co., 19 I. C. C. R. 343. "= Re Transportation of Coal and 
 
 '9 Hutchinson Mill Co. v. A., T. & Mine Supplies, 10 I. C. C. Rep. 473. 
 
 S. F. Ry., 25 I. C. C. 180. " New York, N. H. & H. R. R. v. 
 
 <» St. Louis Blast Furnace Co. v. Int. Com. Comm., 200 U. S. 361, 26 
 
 V. Ry., 24 I. C. C. 360. Sup. Ct. 272. 
 
 [761] 
 
§ 822 ] Railroad Rate Regulation 
 
 transactions being the only real compensation for the car- 
 riage, this was held to be a departure from the. published 
 schedule and therefore illegal. ^^ Where demurrage charges 
 have been duly filed and published with the Commission, 
 the carrier and the shipper cannot by agreement between 
 themselves cancel such charges on the ground that the 
 carrier's tracks were torn up and the shipper's tracks were 
 in bad condition, thereby causing delays, or on the groimd 
 that such charges were discriminatory between competing 
 shippers; and where the carrier and shipper knowing the 
 published demurrage charges cancel the same, they are 
 criminally liable under the Act/^ 
 
 § 822. Only scheduled rates legal. 
 
 The requirements of the Act with respect to the publi- 
 cation, posting, and filing of all terminal charges, storage 
 charges, icing charges and all other charges which the 
 Commission may require, remove from the carrier and 
 from the shipper the right which existed under the com- 
 mon law to contract in reference to any such charges, 
 on any basis other than that specifically set forth in the 
 carrier's published tariffs."''' A carrier may not grant a 
 trackage privilege to a shipper, unless it is authorized 
 by its tariff and open to all shippers on equal tenns.''^ A 
 rate limited to shipments to be delivered within the New 
 York lighterage limits is not applicable to a shipment not 
 ordered to be delivered within the lighterage limits."^ 
 Whether carriers could be compelled to establish reciprocal 
 switching arrangements has not been decided; but having 
 entered into such an agreement under tariff authority, the 
 carrier must accept shipments for delivery on the terms 
 
 " In re Rates and Practices in the tral R. R. Co. of N. J., 18 I. C. C. 
 
 Transportation of Grain, 7 I. C. C. 25. 
 
 Rep. 33. ■" Beaumont & G. N. R. R. v. 
 
 « Lehigh VaUey R. R. Co. v. A., T. & S. F. Ry., 24 I. C. C. 161. 
 
 United States, 188 Fed. 879. « See Federal Sugar Refg. Co. v. 
 
 « Peale, Peacock & Kerr v. Cen- B. & O. R. R., 17 I. C. C. 40. 
 
 [762] 
 
Schedules of Rates [ § 823 
 
 of the schedule to extent of its capacity.'" Indeed, accord- 
 ing to the express terms of the Act one is unlawfully en- 
 gaged in interstate commerce by carriage of traffic in 
 respect of which no rate had been published and filed."" 
 It follows that a shipper is entitled to insist upon no 
 rate except that shown in carrier's schedule for the 
 transportation of the commodity tendered for ship- 
 ment.''^ 
 
 § 823. Rate wars no excuse. 
 
 Reduction of passenger rates without consent of con- 
 necting lines over which tickets are sold, and without 
 filing schedules thereof with the Commission is a violation 
 of this section; and no necessity or compulsion is created 
 by a war of rates which justifies disobedience of the Act.-'- 
 Contracts to the effect i 'mt rates shall be as low as those 
 of competitors cannot be accepted as a basis for making 
 rates.''' Whatever may have been the practice in the past 
 of "meeting the rate," tariffs must now be adhered to.'"'' 
 The carrier whose lawful tariff rate is higher than that of a 
 competing line has no right to sohcit or accept shipments, 
 with the understanding or expectation that an order of 
 reparation will be sought at the hands of the Commission, 
 for the purpose of equalizing to the shipper a rate which 
 he could have secured by giving his shipment to another 
 carrier. ^^ The Commission has appreciated the evils re- 
 sulting from rate wars; and it has often pointed out 
 that until it is given power to fix minimum rates it 
 wiU not be able to handle the situation as it would 
 like to. 
 
 « Crescent Coal & Mining Co. v. Wars, 2 Int. Com. Rep. 340, 2 I. C. C. 
 
 B. & O. R. R., 20 I. C. C. 559. 513. 
 
 ^ Maxwell v. W. F. & N. W. Ry., " Menefee Lumber Co. v. T. & P. 
 
 20 I. C. C. 197. Ry., 15 I. C. C. 49. 
 
 5> Ford & Co. V. M. E. R. R., 19 " In re Express Rates, 28 I. C. C. 
 
 I. C. C. 507. 132. 
 
 '2 In re Passenger Tariffs and Rate " Swift & Co. v. C. & A. Ry., 16 
 
 I. C. C. 426. 
 
 [763 ] 
 
§§ 824, 825 ] Railroad Rate Rbgtulation 
 
 Topic B. Departure from Published Rates 
 
 § 824. Reparation for improper charges. 
 
 Where a shipper has paid charges for transportation 
 service, alleged to have been improper, it is a case for the 
 Commission to decide the reasonableness of the charges, 
 and to award reparation. ^^ But where shipments have 
 been made with the agreement that rate published should 
 be reduced and reparation thereafter given, the Com- 
 mission will refuse to sanction any such deal." If the 
 situation whereby the shipper was forced to pay the 
 tariff rate of the carrier is one which bears unjustly upon 
 the shipper by reason of the fault of the carrier, a- showing 
 to this effect makes a typical case for resort to the Com- 
 mission subsequently for reparation. Thus if a larger car 
 is furnished to a shipper than the size he ordered the 
 minimum should only be based on the car ordered."* 
 And so if one large car is ordered, and two smaller ones 
 are sent, the basis of the minimum is the car ordered.*^ 
 If, on the other hand, complainant's error in making out 
 the shipping ticket caused the shipment to go wrong, 
 the carrier is not responsible, and the case will be dis- 
 missed.^" The principle running through all the cases 
 plainly is that in first instance a shipper must pay the 
 carrier what the tariff fairly requires of him by proper 
 interpretation, even if the carrier is willing to waive the 
 provisions of his tariff.*^ If then he can show that what 
 he was compelled to do by the operation of this rule was 
 prejudicial to him, he should have reparation for the 
 wrong done him by the carrier. 
 
 § 826. Certain technical points discussed. 
 
 A carrier should not be penalized for a purely technical 
 
 =« Maxwell v. W. F. & N. W. Ry., =» Jobbing v. C. & N. W. 17 1. C. C. 
 
 20 I. C. C. 197. 297. 
 
 "Armour Car Lines v. So. Pac. ™Eygng ^ jj pjj.g ^^.j^jj. q^ ^ 
 
 Co., 17 I. C. C. 461. W. R. R., 26 I. C. C. 152. 
 
 ^^ Hanna Coal Co. v. Nor. Pac. " Blum Lumber Co. v So Pac 
 
 Co., 16 I. C. C. 289. Co., 18 I. C. C. 430 
 
 [764] 
 
Schedules op Rates [ § 826 
 
 omission or error made in an effort to bring its tariff into 
 conformity with the regulations.*^ The carrier should be 
 considered blameless, if it has relied upon the terms of 
 a schedule which could not reasonably be misunderstood.*^ 
 On the other hand, if the carrier is to blame for the way 
 in which the schedule is framed, and the error in the tar- 
 iff has resulted in loss to the shipper, damages will be 
 awarded.*^ Where a class rate tariff contained no reference 
 to a commodity rate tariff, it was held that a mere tech- 
 nical omission did not invaUdate the commodity issue.®'' 
 But it is matter of substance not of form which requires 
 that local rates when applied to interstate business must 
 be filed with the Commission.*^'' However it has been de- 
 cided that the factor of intermediate rates not on file with 
 Commission, and used in absence of through rate may be 
 held unreasonable.** Nothing is better established than 
 that a rate once scheduled is put beyond any arguing 
 between the carrier and the shipper as to its propriety or 
 impropriety; if the carrier should concede its unreasonable- 
 ness it would be illegal for the shipper to accept this con- 
 cession.*' Indeed, under the system now prevailing noth- 
 ing but fidelity to the schedule can save the carrier from 
 prosecution for violation of the Act for charging less than 
 the rates filed with the Commission.*^ 
 
 § 826. Criminal liability for violation. 
 
 The Act requires publication and maintenance of definite 
 transportation charges; it is the law that carriers shall 
 publish their tariffs and adhere to these tariffs.*' It was 
 believed that in no other way could the discriminations 
 
 "- Highland Pk. M'fg Co. v. So. of Miss. River, 8 Int. Com. Rep. 185. 
 
 Ry., 26 I. C. C. 67. «» Mercantile Lumber & Supply Co. 
 
 «' Sanders v. C. M. & St. P. Ry., v. St. L. S. W. Ry., 28 I. C. C. 701. 
 
 Unrep. op. 672. - " Old Dominion C. & S. Co. v. 
 
 " Bowles & McCandless v. L. & P. R. R., 17 I. C. C. 309. 
 
 N. R. R., 19 I. C. C. R. 563. ^ Voorheds v. O. C. L. Ry., 16 
 
 « Highland Park M'fg Co. v. S. I. C. C. 42. 
 
 Ry., 26 I. C. C. 67. «' In re Restricted Rates, 20 1. C. C. 
 
 "" Re Export Rates East & West R. 426. 
 
 [765] 
 
§ 827 ] Raileoad Rate Regulation 
 
 which had formerly existed be prevented ; and in the 
 enforcement of these provisions the Commission has no 
 discretion.™ The intention of Congress is, in the absence 
 of express exceptions, to prevent a departure from the 
 pubhshed schedules in all manner of carriages, whether 
 gratuitous or otherwise." A carrier cannot depart to any 
 extent from its published schedules of rates for interstate 
 transportation on file without incurring the penalties of 
 the statutes.'^^ The law places the same obligation upon 
 the shipper as upon the carrier to observe lawful tariff 
 provisions; and so it would seem that a false representation 
 of the contents of a package on the part of the shipper is 
 prohibited by the law.'^^ Where a carrier willfully and 
 knowingly demands and receives storage charges against 
 a shipper for car detained at a point other than the cus- 
 tomary and usual place of delivery or point of destination, 
 it is criminally liable under the Act.^* In view of the ex- 
 press provision that no transportation shall be performed 
 save in pursuance of schedules on file, the Conomission 
 will be vigilant to see that criminal prosecution is the 
 result of any flagrant violation.^^ 
 
 § 827. Essentials of the crime. 
 
 Under the Elkins Act, the acceptance by a carrier of a 
 less sum of money than that named in its tariff for the 
 transportation of property is a departure from the legal 
 rate; and it is no defense against a criminal prosecution 
 that the carrier does so in compromise of claims for loss of 
 property in transit.^" The language of the Act being no 
 carrier shall charge, or demand or collect, or receive a 
 
 '» Ames Bros. Co. v. Rutland R. " Bannon v. Southern Express Co., 
 
 R., 16 I. C. C. 479. 13 I. C. C. .516. 
 
 '1 American Express Co. v. U. S., '■• United States v. Texas & P. R. 
 
 212 U. S. 622, 29 Sup. Ct. 315, 53 L. R., 185 Fed. 820. 
 
 ed. 635. " I. C. C. Conference Ruling, 
 
 " L. & N. R. R. V. Mottley, 219 No. 184. 
 
 U. S. 467, 31 Sup. Ct. Rep. 265, 55 ™ United States v. Atchison, T. & 
 
 L. ed. 297. S. F. Ry., 163 Fed. 111. 
 
 [ 766 1 
 
Schedules of Rates [ § 828 
 
 greater or less or different compensation, it has been 
 held that a railroad is criminally liable for merely demand- 
 ing storage charges in excess of those lawfully applicable." 
 Where in prosecution under the Elkins Act the indictment 
 averred that the defendant carrier over whose line the ship- 
 ment was made had established and published rate over 
 its line of 19}4 cents and the proof showed that the tariffs 
 and schedules filed specify 18 cents over the defendant's 
 route, it appearing that the 1914 cent rate was made up 
 by adding to the 18 cent rate the 13^ cent rate of another 
 independent carrier, there was held to be a fatal variance 
 between the allegations and the proof/* And where an 
 indictment alleged that the published rate on lime was 
 $70 a carload, the allegation was held not to be sustained 
 by a showing from the published tariff that the rate was 
 13.50 per ton in carloads of at least 40,000 lbs., the charges 
 to be assessed at $3.50 per ton on actual weight on ship- 
 ments exceeding 40,000 lbs., as these variant conditions 
 might be material in determining whether or not there 
 had been a violation of the Act.'* 
 
 § 828. Requirements relating to filing. 
 
 One of the chief purposes of the filing is to call the atten- 
 tion of the Commission to a proposed change in rates.'" 
 As the Commission has pointed out, it is necessary that all 
 rates should be on file with it for study and comparison, 
 if its regulation is to be intelligent and comprehensive.*' 
 It follows that rates provided in a tariff which is not on 
 file with Commission are not legal rates.*^ And, as the 
 protection of the shipper is a matter which the Act has 
 also in mind, damages will be awarded for loss sustained 
 
 " United States v. Texas & P. R. varices in Freight Rates, 9 Int. Com. 
 
 R., 185 Fed. 820. Rep. 382. 
 
 ™ United States v. Standard Oil " Re Atlanta & W. P. R. Co., 2 
 
 Co., 170 Fed. 977. Int. Com. Rep. 480, 3 I. C. C. Rep. 
 
 " Atchison, T. & S. F. Ry. v. United 75. 
 
 States, 170 Fed. 2,50. «' St. Louis Blast Furnace Co. v. 
 
 » In the Matter of Proposrd Ad- V. Rv. 0>., 2-t I. C. C. 360. 
 
 [767] 
 
§ 829 ] Railroad Rate Regulation 
 
 through failure to post a tariff changing rates.*' A tariff 
 filed by the authorized agent of a carrier has the same 
 legal status as though separately published and filed by the 
 carrier.** If a tariff making reductions is in due form and 
 legally filed, whether it was filed without proper author- 
 ity is immaterial,*'* if the proof shows that it has been 
 regularly used by the defendant carrier. The necessity of 
 establishing and maintaining a steady, uniform, open tariff 
 rate is of paramount importance, in view of the evils which 
 the Act to Regulate Commerce attempts to correct, and 
 obviously the most efficient method of regulation is the 
 requirement of constant publicity. 
 
 § 829. Conclusive presumption of legality. 
 
 The filing of schedules of rates with the Commission, as 
 required by the Act, raises no presumption as to the 
 legality of such rates in any proceedings before the Com- 
 mission.*^ But, as has been seen, the result of the provi- 
 sions of this section is that in all dealings between shipper 
 and carrier, whether out of court or in court, except in a 
 proceeding before the Commission to have the rates 
 altered, the rate so filed with the Commission must be 
 taken as the reasonable rate.*' Whether or not the shipper 
 knows or does not know what the rates in force are, he is 
 bound thereby and answerable therefor; and as will be 
 seen later the doctrine that the scheduled rate is the only 
 legal rate is pressed to the extent of holding that the shipper 
 must pay that rate, even if he was given to understand 
 that the rate was lower.** Thus the fact that a shipper is 
 
 *' Canadian Valley Grain Co. V. ciate this was Van Patten v. Chicago, 
 
 C, R. I. & P. Ry., 19 I. C. C. 108. M. & S. P. Ry., 81 Fed. 545. See 
 
 8" Johnson & Co. v. A., T. & S. F. Texas & P. Ry. v. Mugg, 202 U. S. 
 
 Ry., 21 I. C. C. 637. 242, 50 L. ed. 1101, 26 Sup. Ct. 268, 
 
 *' Bd. of Tr. of Chicago v. I. C. for this doctrine in its latest develop- 
 
 R. R., 26 I. C. C. 545. ment. 
 
 ^ San Bernardino Bd. of Trade v. ** The first intimation of this was 
 
 Atchison, T. & S. F. R. R., 3 Int. in Kinnavey v. Terminal R. R., 81 
 
 Com. Rep. 138. Fed. 802. See Texas & P. Ry. v. 
 
 " One of the first cases to appre- Abilene Cotton Oil Co., 204 U. S. 
 
 [768] 
 
Schedules of Rates [ § 830 
 
 not given personal notice of the promulgation of a carrier's 
 regulations neither vitiates the latter' s right nor lessens its 
 duty to impose charge incurred under the rules contained 
 in its lawful tariff.*'' The full scope of this doctrine of the 
 finality of the scheduled rate until it is altered by the 
 Commission is fully discussed in a later chapter dealing 
 with its quasi-judicial powers. 
 
 § 830. Of whom filing required. 
 
 The law lays upon carriers the duty to publish and file 
 rates applicable to the interstate traffic in which they 
 participate.^" But special rates or fares for property or 
 troops for the federal government need not be filed, as 
 such transportation is expressly excepted from the provi- 
 sions of the Act.'i Where a terminal railroad lying wholly 
 within a State, but engaged in the transportation of prop- 
 erty moving wholly by railroad from one State to another, 
 joined in the transportation of an interstate shipment 
 without first filing a schedule of rates applicable to the 
 shipment with the Commission, it was held that under the 
 Act as amended it was criminally liable.'^ But a railroad 
 doing only local businesses and entering into no through 
 arrangements, either by billing through or dividing rates, 
 need not file its schedules.^^ The Commission will not 
 recognize as common carriers lines that do not publish 
 tariffs in lawful form or concur properly in lawful tariffs 
 of other lines or that do not in all other respects comply 
 with the law.'* Such carriers cannot demand the estab- 
 lishment of through rates unless they are ready to submit 
 themselves to the jurisdiction of the Commission in this 
 
 426, 51 L. ed. 553, 27 Sup. Ct. 709, " United States v. So. Pac. Ry., 
 
 for this doctrine in its latest develop- 25 I. C. C. 255. 
 
 ment. "'' United States v. Illinois Ter- 
 
 «> Peale, P. & K. v. Central R. R. minal R. R., 168 Fed. 546. 
 
 Co. of N. J., 18 I. C. C. 25. "' Interstate Commerce Commis- 
 
 "> Aransas Pass Channel & Dock sion v. Bellaire Z. & C. Ry., 77 Fed. 
 
 Co. V. G. H. & S. A. Ry., 27 I. C. C. 942. 
 
 403. "Star Grain & Lumber Co. v. 
 
 A., T. & S. F. Ry., 17 I. C. C. 338. 
 
 49 [ 769 ] 
 
§ 831 y Railroad Rate Regulation 
 
 respect.'^ A railroad lying wholly within a State which 
 stands off from its connections at its terminals and deals 
 with them as it would with consignors or consignees is not 
 obliged to report to the Commission.'^ But a junction 
 railway which is by intercorporate relationships involved 
 with the terminal movement of interstate commerce must 
 conform to the requirements of the Act as to fidelity to 
 tariffs."^ 
 
 § 831. Provisions cannot have retroactive effect. 
 
 It has been sometimes attempted, but always in vain to 
 give a retroactive application to tariff provisions, ior some 
 reason or other, good or bad.^'* The Commission is positive 
 in holding that no such retroactive application can be 
 sanctioned.^' Tariffs cannot be made to apply to condi- 
 tions, other than those existing upon the date when such 
 tariffs became effective.^ It follows that a tariff canceling 
 a privilege does not affect shipments that began to move 
 prior to such cancellation.^ For the rate in effect at the 
 time a shipment begins to move is the rate lawfully ap- 
 phcable.' If subsequent to the shipments in question a 
 tariff is filed making such allowance, and if the carrier 
 admits the unreasonableness of the rates charged to the 
 extent of such allowance, it may be held that repara- 
 tion should be awarded on the basis of the allowance 
 made in the subsequently published tariff.^ In other 
 words, although any change must be prospective, and 
 cannot be retroactive, still what is being done in the future, 
 may have its bearing upon what ought to have been done 
 in the past. But the Commission will scrutinize any 
 
 ^^ Enterprise Transp. Co. v. Penna. "' Rosenbaum Bros. v. B. & O. R. 
 
 Ry., 12 I. C. C. 326. R., 24 I. C. C. 287. 
 
 ™ United States v. Cliicago, K. & ' Cady Lumber Co. v. M. P. Ry., 
 
 S. Ry., 81 Fed. 783. 19 I. C. C. 12. 
 
 " United States v. Union S. Y. Co., ^ In the Matter of Through Routes, 
 
 226 U. S. 286, 33 Sup. Ct. 83. 12 I. C. C. 163. 
 
 »8 Victor Fuel Co. v. A,, T. & S. F. ' Transit Case, 25 I. C. C. 130. 
 
 Ry., 14 I. C. C. 119. 'Kaye & Carter Lumber Co. v. 
 
 [770], 
 
 C, M, & St. P. Ry., 14 I, C. C 604. 
 
Schedules of Rates [ § 832 
 
 matter of this sort to see whether, perhaps, what is being 
 worked out is some understanding with some shippers it is 
 desired to favor. 
 
 § 832. Schedules working changes in rates. 
 
 Shippers are charged with knowledge of the law as to 
 the manner in which transportation rates may be changed; 
 and a change in rates on short notice, under authority of 
 Commission affords no basis for reparation for damage to 
 the complainant in a business way/ The lawfully estab- 
 lished rate remains in force until specifically canceled ac- 
 cording to an obvious rule in dealing with this matter. 
 Where the initial carrier's advanced rate tariff did not can- 
 cel lower rate named in tariff of another carrier to which 
 initial carrier was a party, the lower rate was held to be 
 the legal rate." Canceling a rate whereby a previously 
 scheduled higher rate is left in effect is an advance in 
 rates, and will be treated as such under the Amendment of 
 1910.' If a rate is advanced while oil is at refining-in- 
 transit point the legal rate is the rate in effect at the time 
 of the original movement.^ And it has been held that a 
 failure to post a supplement to a tariff which contained no 
 change as to rates affords no basis for an award of repara- 
 tion.* As for the occasion for the exercise of the power of 
 the Commission to shorten the normal period of notice of 
 change of rates, it may be noted that permission may be 
 granted to correct an error in tariff on less than statutory 
 notice.'" In one case the circumstances were so unusual 
 that the Commission granted permission to change the tariffs, 
 which may be made effective upon one day's notice. '^ 
 
 * Wisconsin Lime & Cement Co. * Southern Cotton Oil Co. v. A. 
 
 V. C, C, C. & St. L. Ry., 25 I. C. C. C. L. R. R., 19 I. C. C. R. 434. 
 
 366. ° Faribault Furnitiu'e Co. v. C. G. 
 
 8 Stilwell V. L. & H. R. Ry., 19 W. R. R., 25 I. C. C. 40. 
 
 I. C. C. 404. '» Buren v. So. Pac. Co., 26 I. C. C. 
 
 ' Re Advances on Cotton Seed .332. 
 
 Products, 25 I. C. C. 237. " Transcontinental Commodity 
 
 Rates, 26 I. C. C. 456. 
 
 [771] 
 
§ 833 ] Railroad Rate Regulation 
 
 § 833. Invalidity of varied rate. 
 
 A shipper who is compelled to pay charges in excess of 
 those set forth on the pubhshed rate schedules, because of 
 rules prescribed by the railroad company in circulars as to 
 maximum and minimum carload weights, is entitled to 
 recover the same back from the company. ^^ Recently the 
 Commission has been very clear that the published rate 
 must be paid and collected regardless of rate quoted. ^^ 
 On the other hand, if collected by the carrier, unpublished 
 charges, and those in excess of published charges, must be 
 refunded. ^^ An unpublished agreement between shipper 
 and carrier cannot be basis of award of damages by Com- 
 mission; the Commission can award damages only where 
 there has been a violation of the Act.^' The fact that 
 there may have been contractual obligations resting upon 
 the vendor and vendee cannot excuse the defendants from 
 the collection and retention of the lawful tariff charges.^" 
 And the fact that there have been past violations of 
 tariffs constitutes no right to demand anything else in the 
 future than the schedule itself." The effect of a violation 
 of the Act is to make the contract of carriage, including 
 the rate named therein, invalid. The carrier therefore can- 
 not be sued for breach of an executory term of the con- 
 tract.'* This principle, however, applies only to a claim 
 which must be based on the illegal contract. The granting 
 of a rebate contrary to the provision of the interstate com- 
 merce law does not render the bill of lading void, so that 
 no action can be maintained against the carrier for loss 
 of the goods by negligence.'^ 
 
 " Suffern v. Indiana, D. & W. Ry., Co. v. A. G. S. R. R., 36 I. C. C. 446. 
 
 7 Int. Com. Rep. 25.5. " Indianapolis Freight Bureau v. 
 
 " Scott V. T. & N. O. R. R., 20 C, C, C. & St. L. Ry., 15 I. C. C. 
 
 I. C. C. 167. 370. 
 
 " Northern Lumber M'fg Co. v. '* Interstate Commerce Commis- 
 
 T. & P. Ry., 19 I. C. C. R. 54. sion v. Chesapeake & O. Ry., 128 
 
 " Wood-Mosaic Flooring & Lum- Fed. 59; Red Cloud Mining Co. v. 
 
 ber Co. v. L. & N. R. R., 22 I. C. C. Southern Pac. Co., 9 I. C. C. Rep. 
 
 458. 216. 
 
 i» America Brake Shoe & Foundry " Merchants' C. P. & S. Co, v. 
 
 [772] 
 
Schedules of Rates [ §§ 834, 835 
 
 § 834. Stipulations in bills of lading. 
 
 It should be noted that as the section reads the carrier 
 receiving property for interstate transportation shall 
 issue a bill therefor, and be liable to the lawful holder 
 thereof for any loss, damage, or injury to such property.'^" 
 Rates are governed by published tariffs and not by no- 
 tations made on bills of lading.-^ Carriers cannot deliver, 
 until bills of lading are properly surrendered.^^ The pro- 
 vision in a bill of lading limiting the responsibility of 
 the carrier to the "shipper's load and count" involved 
 too wide a question of law for the Commission to as- 
 sume authority to pass upon it.-^ A carrier may in- 
 sist upon issuing a separate bill of lading for each car; 
 but if it issues one bill of lading for a shipment con- 
 sisting of several cars it cannot collect demurrage until 
 the whole shipment is tendered for delivery. ^^ The actual 
 point of origin, and not point from which shipment is 
 billed, determines the rate.^° The binding effect upon 
 carriers of instructions contained in bills of lading has 
 recently been a matter of discussion before the Commis- 
 sion.^" 
 
 § 836. Limitations of legal obligations. 
 
 It may be premised that a carrier cannot by tariff pro- 
 vision exempt itself altogether from all liability whatso- 
 ever to shippers for loss of property in transit.^*" If a rate 
 is conditioned upon a shipper's agreeing that the carrier 
 shall be under no liability to answer for losses, formerly 
 the stipulation was valid when the loss occurred through 
 
 Insurance Co. of North America, ^^ Western Classification Case, 25 
 
 151 U. S. 368, 38 L. ed. 195, 14 I. C. C. 442. 
 
 Sup. Ct. 367. " Scudder v. T. & P. Ry., 22 
 
 2» Coal Rates on the Stony Fork I. C. C. 60. 
 Branch, 26 I. C. C. 168. == Preston v. C. & O. Ry., 19 I. C. 
 
 " Pole Stock Lumber Co. v. G. & C. 406. 
 S. L R. R., 26 L C. C. 451. » Jackson & Perkins v. S. P. Co., 
 
 22 Leo P. Harlow, Trustee, v. W. 24 I. C. C. 323. 
 S. Ry., 26 I. C. C. 511. '-sa in ^e Express Rates, 28 I. C. C. 
 
 132. 
 
 [773] 
 
§ 836 J Railroad Rate Regulation 
 
 eauses beyond the carrier's control; but the stipulation 
 was void as against loss due to the carrier's negligence or 
 other misconduct. ^^* There is no lawful authority for a 
 tariff provision establishing two rates for same transporta- 
 tion service and same liability in connection therewith. ^^' 
 The initial carrier should not only advise shipper of lower 
 rates applying in case of release of valuation, but, when 
 informed of the shipper's desire to avail himself of such 
 lower rates, should obtain the shipper's signature in ac- 
 cordance with the tariffs.^*'' Even since the sweeping pro- 
 visions of the Carmack Amendment against all limitation 
 of Uability for loss, a stipulation in a shipping contract 
 limiting the carrier's liability in case of the loss of an in- 
 terstate shipment of cattle to the agreed value of $20 for 
 each cow, made to secure the lower of two rates on file 
 with the Commission, has been held not forbidden by the 
 provisions of this amendment prohibiting exemptions from 
 the liability.-*' The latest case on this point goes so far 
 as to hold that if the property is apparently of greater 
 value than the limitation, and no notice of the requirement 
 in the tariff that a higher value must be declared has come 
 to the owner, still the scheduled provisions govern the 
 situation and no more than the amounts stated therein 
 on the conditions named can be recovered.^*' 
 
 Topic C. Joint Tariffs and Schedules 
 
 § 836. Meaning of joint tariff. 
 
 Two kinds or classes of routes are recognized and pro- 
 vided for, namely, the line of a single carrier, and a con- 
 tinuous line or route operated by more than one carrier 
 where the participating carriers establish joint rates or 
 
 26* In re Released Rates, 11 I. C. 2" Missouri, K. & T. R. R. v. 
 
 C. 550. Hamman Bros., 227 U. S. 637, 33 
 
 26" C. H. Algert Co. v. D. & R. G. Sup. Ct. 397. 
 R. R., 20 I. C. C. 93. =6/ Boston & M. R. R. v. Hooker, 
 
 ^-^ Western Classification Case, 26 233 U. S. 97, 34 Sup. Ct. 526. 
 I. C. C. 442. 
 
 [774] 
 
Schedules of Rates [ § 837 
 
 charges for such continuous hne or route. Joint through 
 routes and rates are ordinarily the subject of agreement 
 between the participating carriers; but when this is es- 
 tabUshed, and until finally abrogated or changed, they are 
 required by the statute to be kept open to public use.^' 
 The publication by a carrier subject to the Act of the 
 aggregate local rates between points on its own line and 
 those on the line of a connecting carrier with which it has 
 no joint tariff, is not illegal; but it cannot lawfully add 
 to the duly established rates of another carrier any amount 
 it pleases less than its own rate, and publish and use that 
 sum as a through rate, without the consent of the other 
 company. Such a through rate is not a joint rate, for 
 joint rates can be made only by concurrence or assent; 
 nor is it a combination rate, for one of its component 
 parts has no legal existence or sanction as a separate or 
 local charge, and there must be lawful rates upon both the 
 roads before there can be a lawful combination of rates. ^^ 
 There is a decision in a State court to the effect that a 
 combination rate, not being a joint rate, need not be 
 posted, and is not subject to the Act.^' But when rates 
 estabhshed to apply between points within a single State 
 are applied as part of combination rates on transportation 
 between different States, such State rates, as well as the 
 interstate rates with which they are combined, must be 
 pubUshed at stations and filed with the Commission.^" 
 
 § 837, Making and filing jointly. 
 
 Any one member of a joint combination may file copies 
 of joint tariff for all the members." And where one 
 carrier files and properly publishes a joint tariff, he is not 
 
 " Consolidated Forwarding Co. v. ™ Re Export Rates from Points 
 
 Southern Pacific Co., 9 Int. Com. East and West of Miss. River, 8 
 
 Rep. 182. I. C. C. Rep. 185. 
 
 28 New York, N. H. & H. R. R. v. " Re Filing Copies of Joint Tariff, 
 Piatt, 7 Int. Com. Rep. 323. 1 Int. Com. Rep. 76, I. C. C. 
 
 29 Gulf, C. & S. F. Ry. v. Nelson 225. 
 (Tex. Civ. App.), 23 S. W. 732. 
 
 [775] 
 
§ 838 ] Railroad Rate Regulation 
 
 affected by the failure of other carriers properly to pub- 
 Ush it.'^ The tariffs need not be filed at a non-competing 
 point.'^ A railway stage route and hotel association are 
 not connecting carriers who can make and file a joint 
 tariff.'^ The schedule having failed to limit rates pub- 
 lished in tariff to certain routes the rate appUes via the 
 lines of all carriers parties to the tariff.'^ Where an 
 initial line publishes and maintains one joint tariff which 
 is not properly concurred in by its connections, and at the 
 same time another joint tariff naming higher rates and 
 properly concurred in, the latter tariff names the legal 
 rate and must be applied.'^ There is not what can be 
 considered a through route and joint rate where one 
 of connecting roads has not filed a tariff with Commis- 
 sion." The initial carrier is liable in reparation, where it 
 published a joint through rate in which connecting lines 
 had not concurred, the combination rate legally applied 
 being found unreasonable.'* An attempt to connect 
 outbound interstate movements with inbound move- 
 ments to a concentrating point under rates not on file 
 with Commission is unlawful.'^ Any lawful charge or 
 any factors making up by combination a lawful charge 
 must be duly scheduled.'"' By a rule of construction of 
 schedules, where there are two rates — one a joint rate 
 and the other a combination rate — the joint rate is the 
 legal rate.^^ 
 
 § 838. What particulars must be published. 
 
 It was at first held that the published tariff should 
 
 "Virginia C. & I. Co. v. Louis- "Fish & Co. v. N. Y. C. & St. 
 
 ville & N. R. R. (Va.), 37 S. E. 310. L. R. R., 19 I. C. C. 452. 
 
 33 Chicago & N. W. Ry. v. Osborne, ^s Texico Transfer Co. v. L. & N. 
 
 52 Fed. 912. R. R., 20 I. C. C. R. 17. 
 
 3* WyUe V. Northern Pac. R. R., =» St. Paul Board of Trade v. M., 
 
 11 I. C. C. Rep. 145. St. P. & S. Ste. M. Ry., 19 I. C. C. 
 
 '' Kennedy & Co. v. St. L. S. W. 285. 
 
 Ry., 22 I. C. C. R. 277. « Kile&M.v.D.Ry.,15LC.C.235. 
 
 ™St. Paul Board of Trade v. M., ■" Arabol M'fg Co. v. S. B. Ry., 
 
 St. P. & S. Ste. M. Ry., 285. 25 I. C. C. 429. 
 
 [776] 
 
Schedules of Rates [ § 839 
 
 definitely name all the participating roads and indicate 
 the various routes by which they undertake to afford 
 transportation at designated rates. Theoretically, at 
 least, it said, such a disclosure is necessary to a complete 
 statutory joint tariff. And it was ordered that all carriers 
 concerned should file an acceptance of the tariff.*^ But 
 the Supreme Court of the United States finally held that 
 the carrier publishing a through tariff might reserve the 
 right to route the goods as it pleased beyond its own 
 terminal.^' However, by a subsequent amendment to the 
 Act it is provided that the tariff naming joint through rates 
 should show the number of the routes and give the shipper 
 his choice. ^^ A carrier published a joint tariff, showing it 
 could make delivery on track of carrier from whom it 
 had not obtained concurrences; the consignee paid the 
 drayage charges on the shipment, which the connecting 
 line refused to deliver without payment of switching 
 charges, and it was held that these drayage charges con- 
 stituted the measure of damage. ^^ All this is consequent 
 upon the rule that carriers cannot engage in through trans- 
 portation without publication of definite and specific rates, 
 including all services incident to through movement. ^^ 
 
 § 839. Rates based upon combinations. 
 
 It is fundamental that there can be but one legal rate 
 between two points. This rate must be the local rate 
 if over one road, or the joint rate if over a through 
 route composed of two or more roads which have agreed 
 to a joint rate, or a combination of separately estab- 
 lished rates applicable on through business over a through 
 route which does not enjoy a joint rate.''^ Where a through 
 
 ■*- In re Form and Contents of ''» Edison Portland Cement Co. v. 
 
 Rate Schedulps, (i I. C. C. Rep. 267. 
 
 ^ ' Southern Pacific Co. v. Int. Com. 
 Comm., 200 V. S. ry.H\, L>(; Sup. Ct. 
 3.30. 
 
 '< See Express Rate Cases, 24 I. 
 C. C. 380. 
 
 D., L. & W. R. R., 22 I. C. C. 
 
 382. 
 
 ^5 Hampton M'fg Co. v. Q. 
 
 D. S. 
 
 S. Co., 27 I. C. C. 606. 
 
 
 " Laning-Harris Coal & 
 
 Grain 
 
 Co. V. Missouri P. R., 11 I. 
 
 C. C. 
 
 154 
 
 
 [777 1 
 
 
§ 840 ] Railroad Rate Regulation 
 
 rate is published it governs the situation, even making 
 unavailable a proportional rate, which could otherwise be 
 used in getting a favorable combination.^* Where no 
 joint rate is lawfully fixed the duty of the carriers is to 
 apply the lowest combination of intermediate rates. ^' 
 There is no other rule possible than that in absence of a 
 joint through rate, the combination of locals constitutes 
 the through rate.^" A carrier failing to route goods so as 
 to give the shipper the advantage of the lowest combina- 
 tion by any natural route will be held responsible in repa- 
 ration proceedings. 
 
 § 840. What combinations are justified. 
 
 It is not asked to post at stations all factors in local 
 combinations with others, only the joint rates in force 
 from that point." A factor in a combination not on file 
 with Commission, and used in absence of through rate 
 may be set aside.^^ It is the carrier's own tariff, in the 
 theory here applied, not that of its connections which 
 governs.^' Rates not filed with the Commission are 
 not lawful factors in combinations.^* A rate between two 
 points in a State to be applicable to a shipment beyond 
 out of the State must be filed with this Commission.*^ 
 Where an initial carrier publishes a joint tans', which is 
 not properly concurred in by its connections, it is ineffective 
 as such.''^ Where a carrier filed and posted tariff stating 
 a through rate to points on a line, which was not named 
 as a party and had not concurred, it was held that charges 
 would be collected on the basis of the combination of these 
 
 « Lindsay Bros. v. B. & O. S. W., Co. v. St. L. S. W. Ry., 28 I. C. C. 
 
 16 L C. C. 6. 701. 
 
 « Alpha Portland Cement Co. v. " Falls & Co. v. Chicago, R. I. & 
 
 P. R. R., 20 I. C. C. 640. P. Ry., 15 I. C. C. 269. 
 
 ''" Fish & Co. V. N. Y. C. & St. L. " Hagan Iron Co. v. Pennsylvania 
 
 R. R., 19 I. C. C. 452. R. R., 18 I. C. C. 529. 
 
 51 Canadian Valley Grain Co. v. « Johnson v. M., St. P. & S. S. M. 
 Chicago & R. I. P., 18 I. C. C. Ry., 22 I. C. C. 255. 
 
 509. ^ Kennedy & Co. v. St. & S. W. 
 
 52 Mercantile Lumber & Supply Ry., 22 I. C. C. 277. 
 
 [778] 
 
Schedules of Rates [ §§ 841, 842 
 
 intermediates/^ To attempt to avoid through rates by 
 paying ticket rate to an intermediate point and the 
 mileage rate beyond, must be accompanied with the con- 
 ditions of the tariffs under which mileage is sold.** Natu- 
 rally enough damages were denied on the basis of an un- 
 lawful contract, whereby a shipper was to receive the 
 benefits of an unpubhshed division of a through rate.''" 
 
 § 841. Whether export rates must be filed. 
 
 Rates on export traffic must be published and filed in 
 accordance with the provisions of this section.*" So-called 
 through export rates, made by adding the ocean rate to 
 the inland rail rates, are not analogous to railroad rates 
 made by joint arrangement by railway carriers subject 
 to the statute, in the sense that the total rate must be 
 published and filed, and it is enough if the railroad car- 
 rier publishes and maintains its own rate to the seaboard.*' 
 But if there is in fact such a joint arrangement that the 
 rate is a joint rate under this section, then the entire 
 through rate should be published, and not the inland 
 division, which in that case might vary while the entire 
 rate remained the same.*^ It is now generally understood 
 that if the carrier names export rates they must be filed, 
 subject to the operation of the distinctions just stated, but 
 otherwise as has been seen in a former chapter the Com- 
 mission can have no concern with a rate applying outside 
 of the United States.*^ 
 
 § 842. Divisions and proportional rates. 
 
 Divisions of the joint rates between the carriers con- 
 curring therein are matters of private agreement, and for 
 
 " Morton Salt Co. v. M. L. & T. s" Re Export & Domestic Rates 
 
 R. R. & S. S. Co., 28 I. C. C. 422. on Grain, 8 Int. Com. Rep. 214. 
 
 58 In re Mileage Books, 28 I. C. " Kemble v. Boston & \. R. R., 
 
 C. 318. 8 Int. Com. Rep. 110. 
 
 " Beekman Lumber Co. v. St. °- Re Publication & Filing of 
 
 L. & S. F. R. R., 21 I. C. C. R. Tariffs, 10 Int. Com. Rep. 55. 
 
 270. " New Orleans B. of T. v. Illinois 
 
 Central Ry., 23 I. C. C. 465. 
 
 [ 779 ] 
 
§ 843 ] Railroad Rate Regulation 
 
 that reason, generally speaking, are of no special concern 
 to shippers, nor are they essential to legalize a published 
 through rate.^^ So far as charges on its - own road are 
 concerned, a carrier cannot be bound by tariffs of its 
 connections in which it has not concurred; neither can it 
 ignore the provisions of the tariffs of its connections with 
 reference to charges for services performed by those con- 
 nections.*^ In one proceeding the factor of the combina- 
 tion through rate from Memphis to Little Rock was not 
 found unduly prejudicial as compared with the proportional 
 rate on through shipments between the same points on 
 traffic originating in different localities/'^ It was noted in 
 another case that a special proportional rate applied to 
 shipments to Milwaukee, when destined to points east of 
 Illinois-Indiana State line.'"' A tariff provision for free 
 reconsignment at a junction point to connecting lines 
 where no through rates were in effect was not found ap- 
 plicable where a proportional rate was in effect.'* 
 
 § 843. Parties liable to prosecution. 
 
 The concluding part of section 1 of the Elkins Act 
 brings all the carriers who have participated in any rate 
 filed or published within the terms of the Act, as much so 
 as if the tariff had been actually published and filed by 
 such participating carrier, so that a connecting carrier 
 may be convicted of rebating for accepting a lower rate 
 than the one filed with the Commission by the initial 
 carrier.''' In interpreting a schedule from which it was 
 alleged there had been a departure, the court held that 
 the route to which the tariff applied was the natural and 
 direct route from Olean to Norwood by way of Rochester, 
 
 " Germain Co. v. N. O. & N. E. " Webster Grocer Co. v. C. & N. 
 
 ■I. 11., 17 I. C. C. 22. W. Ry., 19 I. C. C. 493. 
 
 '■■' Hull Co. V. S. Ry., 24 I. C. C. «« Becker v. P. M. R. R., 28 I. C. 
 
 :m. C. 645. 
 
 "» Scott-Mayer Commission Co. ™ United States v. N. Y. C. & H. 
 
 V. C, R. I. & P. Ry., 28 I. C. C. R. R. R., 212 U. S. 609, 53 L. ed. 629, 
 
 529. 29 Sup. Ct. 313. 
 
 [780] 
 
Schedules of Rates [ § 844 
 
 and not the roundabout route by Buffalo, and that the 
 tariff was therefore suflBciently definite to estabhsh the 
 rate specified over the former route, in a criminal prose- 
 cution under the Elkins Act for accepting a concession.^" 
 An indictment which alleges that the transportation was 
 pursuant to a common arrangement for a continuous ship- 
 ment and that the concession was for a part and not from 
 the aggregate rate for the interstate transportation, is 
 not defective, since it is not necessary to the offense 
 that all connecting carriers should join in giving the con- 
 cession.'^ In the most famous of these cases against the 
 companies allied with the Standard Oil combination it 
 was held that the defendant Indiana Company was not 
 guilty imder the Elkins Act of securing transportation at 
 less than the published rates, since the charges paid by it 
 for the portions of the haul between Evansville and Grand 
 Junction and Grand Junction to destination were the 
 lawfully published divisions of the legal rate from Whiting 
 to Birmingham.'^ 
 
 Topic D. Form of Schedules Required 
 
 § 844. Clearness of statement. 
 
 The publication of tariffs in convenient form, adequate 
 in statement and properly authenticated, is essential to the 
 enforcement of reasonable rates and impartial treatment. 
 So far as possible the schedules should be simple in ar- 
 rangement, ample in their disclosures, and free from am- 
 biguity. Otherwise the opportunity is afforded for evading 
 the law by discriminating practices and unjust exactions.'^ 
 The rate sheets must be readily intelligible to shippers and 
 consignees.'^ They must be so simplified that persons of 
 ordinary comprehension can understand them; and a 
 
 ™ Standard Oil Co. of N. Y. v. " Re Rate Schedules, 6 Int. Com. 
 
 United States, 179 Fed. 614. Rep. 267. 
 
 " United States v. Vacuum Oil '* Johnston-Larimer D. G. Co. v. 
 
 Co., 158 Fed. 536. Atchison, T. & F. R. R., 6 Int. Com. 
 
 " United States v. Standard Oil Rep. 568. 
 Co. of Ind., 183 Fed. 223. 
 
 [ 781 ] 
 
§ 845 ] Railroad Rate Regulation 
 
 notation in the tariff of one carrier, making reference to 
 the tariff of some competing carrier, does not meet the 
 requirement of the law that the rate charged shall be pub- 
 lished and filed.^'' The mere designation, in a paper or 
 circular, of the means of arriving at rates by calculation 
 or reference to other papers, does not constitute the rate 
 sheet required; and the reissuing by a carrier of a tariff 
 of another line, and, by a supplement concurrently issued, 
 limiting its use of the rates therein prescribed to such as 
 are over a specified minimum, is reprehensible.^" The 
 Commission has had occasion to condemn a tariff such as 
 to lead to confusion and discrimination in application of 
 different rates to similar mixed carloads." In the revision 
 of the tariffs of the express companies, a simple method of 
 stating express rates was required by the Commission.'* 
 And in general careless tariffs have been condemned again 
 and again.'* 
 
 § 845. Necessary fullness of statement. 
 
 The schedules should be sufficiently full to show all that 
 a shipper needs to know. Thus published tariffs specifying 
 rates per standard crate on vegetables shipped from Florida 
 to northern or northeastern points should state plainly 
 the dimensions of the crate to which the rates apply.'" 
 On the other hand, where the rate sheet states that the 
 rates are subject to an official classification filed with the 
 Commission, this was held enough to inform shippers that 
 the rates given were for carriage with limited liability.*' 
 The law requires that tariffs shall state plainly the rates 
 applicable to any transportation which the railroads per- 
 
 " H. B. Pitts & Son v. St. Louis " Payne V. M. O. L. & T. R. R. 
 
 & S. F. Ry., 10 Int. Com. Rep. 684. v. S. C. Co., 15 I. C. C. 185. 
 
 ™ Colorado Fuel & I. Co. v. South- ™ Re Alleged Unlawful Charges 
 
 ern P. Co., 6 Int. Com. Rep. 488. for Transportation of Vegetables, 
 
 " Barrett M'fg Co. v. C, M. & 8 Int. Com. Rep. 585. 
 
 St. P. Ry., 20 I. C. C. R. 79. «' Mannheim Ins. Co. v. Erie & 
 
 '8 In re Express Rates, 24 I. C. C. W. T. Co. (Minn.), 75 N. W. 
 
 380. 602. 
 
 [782] 
 
Schedules of Rates [ § 846 
 
 form. Published tariffs are of little value if a shipper can- 
 not depend upon the statements therein contained.*^ A 
 rule in a circular that agents shall decline to receive ship- 
 ments of freight "to order," with directions to notify 
 parties elsewhere than at destination point should be filed 
 with Conomission.*^ A class-rate tariff containing no refer- 
 ence to the commodity rate tariff, it was held that this 
 mere technical omission did not invalidate the commodity 
 issue.^* 
 
 § 846. Methods of stating rates. 
 
 The Commission has often said that tariffs must be so 
 framed as to be intelligible to those who are not neces- 
 sarily experts in reading them.*^ The practice is con- 
 demned of inserting obscure and general clauses in vol- 
 uminous tariff pubhcations, to the effect that where a 
 combination of locals, either general or in specific instances, 
 will make a lower aggregate through rate than the specific 
 joint through rate therein stated, the former will be used.** 
 It is a mischievous practice for carriers to publish to their 
 tariffs and on their bills of lading rules and regulations 
 which are misleading, unreasonable, or incapable of literal 
 enforcement in a court of law.*^ Carriers should not pub- 
 lish rates in one tariff and discounts or allowances from 
 such rates in another tariff, but instead, should file a new 
 rate as such.** Various light and bulky articles which can- 
 not be loaded heavily were given the lowest minimum 
 contained in the particular carriers' tariffs; this practice 
 was said to be known as "the principle of the least mini- 
 mum," and to apply universally.*'* In the absence of a 
 
 '^ Crescent Coal & Mining Co. v. ** Hydraulic Press Brick Co. v. 
 
 C. & E. I. R. R., 24 I. C. C. 149. St. Louis & S. F. Ry., 11 I. C. C. 342. 
 
 «' Ludowici-Celadon Co. v. A. C. ''Re Released Rates, 11 I. C. C. 
 
 L. R. R., 28 I. C. C. 693. 550. 
 
 '* Highla,nd Park M'fg Co. v. S. ** In re Allowances for the Transfer 
 
 Ry., 26 I. C. C. 67. of Sugar, 14 I. C. C. 619. 
 
 '5 Porter v. St. Louis & S. F. Ry., » Lindsay Bros. v. P. M. R. R., 
 
 15 I. C. C. 4. 25 L C.'C. 368. 
 
 f7831 
 
§ 847 ] Railboad Rate Regulation 
 
 reconsignment privilege applicable to a given shipment 
 it was held that the sum of the locals to and from the point 
 of reshipping is the legal rate.'" 
 
 § 847. Requirements of the Commission. 
 
 The Commission has full jurisdiction over regulations 
 affecting transportation expressed in tariffs.'^ Tariffs 
 should not be used until Commission's rules are com- 
 plied with.'^ Note should be made of the Commission's 
 rules concerning supplements to tariffs.*' An index sufficient 
 to comply with Commission's rules should be included.'** All 
 the rules come to this, that the classifications should be 
 clearly stated. Tariffs which apply rates upon commod- 
 ities according to their use are unproper; the carrier has 
 no right to attempt to dictate the uses to which com- 
 modities transported by it shall be put.'" And for the 
 same reason the practice of naming specific consignors 
 and consignees as entitled to special service is condemned.'^ 
 Short-term commodity rates are suggestive of the "mid- 
 night tariff " of the older times before the requirement of 
 a month's notice.*' The ruling of the Commission directing 
 that if a supplement to a tariff is issued which conflicts 
 with a part of a previous supplement, which is not thereby 
 canceled in full, that such newly issued supplement should 
 specifically state the portion of the previous supplement 
 intended thereby to be canceled, is held to apply to suc- 
 cessive supplements to the same tariff, as well as to other 
 and different tariffs.** 
 
 " Deeves Lumber Co. v. A. & V. "* Crescent Coal & Mining Co. 
 
 Ry., 25 I. C. C. 42. v. C. & E. L R. R., 11 I. C. C. 
 
 »iHood & Son V. Delaware & 149. 
 
 Hudson, 17 I. C. C. 15. « Pierce Co. v. N. Y. C. & H. R. 
 
 »« Noble V. G. T. W. Ry. Co., 20 R. R. Co., 19 I. C. C. 579. 
 
 I. C. C. 70. »' Du Pont de Nemours Powder 
 
 »' In re Proposed Schedules of Co. v. D. & N. R. R. Co., 20 I. C. C. 
 
 Rates on Lumber, 20 I. C. C. 575. R. 83. 
 
 "^ Western Mantle Co. v. S. P. & " Veiteh v. S. A. L. Ry., 22 1. C. C. 
 
 S. Ry. Co., 20 I. C. C. 643. 4. 
 
 [784] 
 
Schedules op Rates [ §§ 848, 849 
 
 § 848. Consequences of indefinite tariffs. 
 
 A tariff so ambiguous as to be impossible of determina- 
 tion is of no effect."^ A complainant is not to be deprived 
 of his right to a reasonable rate by the fact that the de- 
 fendants, through neglect of the rules of this Commission 
 as to publication of their tariffs, had failed to establish 
 that rate in legal form.^ Recently where a tariff provision 
 relating to crating of articles was found to be ambiguous, 
 reparation was awarded for unreasonable charges resulting 
 therefrom.^ But still more lately it has been held that 
 reparation will not be awarded where" claim is not based 
 upon reasonableness of rate charged, but involved simply a 
 question of tariff construction.^ A tariff stating that the 
 rate is governed by what a State commission fixes is im- 
 proper.* In an indictment against a shipper under the 
 Elkins Act for accepting and receiving a concession, it is 
 error to exclude evidence offered on the part of defendant 
 to show that it had no knowledge of the lawfully published 
 rate, especially where the tariffs setting out such rate were 
 involved and somewhat ambiguous.^ Minimums must 
 be duly scheduled, else the carload is the car full at its 
 actual weight.^ Damages were awarded for violation of 
 section 6, where shipper routed his goods via a route 
 taking a higher rate, because tariff was defective in failing 
 to state that there were two stations in the same State by 
 the same name.' 
 
 § 849. All pertinent conditions requisite. 
 
 It is the duty of a carrier to set forth in connection with 
 the published rate any exceptions thereto or references to 
 
 »i See Stone O. Co. v. P. B. & W. ■• United States v. Standard Oil 
 
 R. R., 18 I. C. C. 160. ' Co., 170 Fed. 988. 
 
 ' Black Horse Tobacco Co. v. * Standard Oil Co. of Indiana v. 
 
 I. C. R. R., 17 I. C. C. 588. United States, 164 Fed. 376. 
 
 ' Alexander v. S. P. Co., 24 I. C. * Sunderland Bros. v. Missouri 
 
 C. 306. R. & F. Ry., 18 I. C. C. 425. 
 
 ' Taylor Dry Goods Co. v. M. P. ' Larson Lumber Co. v. G. N. Ry., 
 
 Ry., 28 I. C. C. 205. 21 I. C. C. 474. 
 
 50 [ 785 ] 
 
§ 850 ] Railroad Rate Regulation 
 
 any rules, regulations, or conditions affecting the applica- 
 tion of the rate; and, if this is not done, the rate is abso- 
 lute and unlimited as to all points within its purported 
 application.* Carriers should not publish rates in one tariff 
 and rules and regulations affecting such rates in another 
 tariff, or even in another passage of the same tariff.' Al- 
 though a rule may appear to be unlimited in its applica- 
 tion when taken by itself, the general character of the 
 tariff in which it is found must be taken into considera- 
 tion.^" If all the parts constituting a completed article are 
 offered as one shipment, under one bill of lading, the freight 
 charge should be calculated upon a rating for the completed 
 article." A clause in a tariff providing that weight as- 
 certained upon a particular scale should govern was held 
 unreasonable by the Commission. ^^ An initial carrier's 
 tariff providing for a deduction in weight on account of 
 moisture, a connecting carrier, which participated in the 
 movement, having not concurred in such tariff, it was 
 held that the complainant was entitled to the deduction 
 only on that part of the haul performed by the initial 
 
 § 850. Rules for construing schedules. 
 
 Tariff rules must have a reasonable interpretation. And 
 the Commission has been very insistent that tariffs should 
 be definite.^* Tariffs are but forms of words, and the 
 Commission in the exercise of its power to administer the 
 Act, can look beyond the forms to what caused them and 
 what they are intended to cause and do cause. ^^ Tariffs 
 are to be construed according to what they express not 
 
 « Crescent C. & M. Co. v. C. & E. i^ i^ j-e Weighing of Freight by 
 
 I. R. R., 24 I. C. C. 149. Carrier, 28 I. C. C. 7. 
 
 9 See I. C. C. Conference Ruling, " Hull v. So. Pac. Co., 24 I. C. C. 
 
 No. 281. 302. 
 
 '"Hutchinson Mill Co. v. A., T. "Western Classification Case, 25 
 
 & S. F. Ry., 25 I. C. C. 180. I. C. C. 442. 
 
 11 Western Classification Case, 25 ''^ In re Advances on Manganese 
 
 I. C. C. 442. Ore, 25 I. C. C. 663. 
 
 [786] 
 
Schedules of Rates [ § 851 
 
 according to what is thought to be their intent." In 
 other words, tariffs are to be interpreted according to the 
 reasonable construction of their language; the intention of 
 the framers and the practice of the carriers do not con- 
 trol.'^ A tariff rate or rule cannot be divorced from any 
 of its governing conditions or hmitations, except by clear 
 and specific tariff provision therefor.^* It was held, there- 
 fore, that unless shipments were in fact soda ash and des- 
 ignated as it, they are not entitled to soda-ash rating.'" 
 And for another example of this, a tariff was held ambig- 
 uous in not defining what was meant by "knocked down," 
 "knocked down flat" and "completely knocked down." ^^ 
 The term "live stock" used in a tariff providing for the 
 free transportation of caretaker does not include a care- 
 taker of chickens.^' In another case this Southern clas- 
 sification was construed; and it was held that farm wagons 
 were properly rated as sixth-class freight and did not 
 come within the exception in favor of "agricultural imple- 
 ments," in which were included farm wagons and other 
 articles taking a mixed carload rate.^^ Commodity rates 
 should be strictly applied; and a special rating on "pepper" 
 does not take "chile pepper" out of classification.^' While 
 cannel coal may properly be given a higher rate than bitu- 
 minous, in the absence of a cannel-coal rate, the bitumin- 
 ous rate would apply to cannel coal.-^ 
 
 § 851. Specific ratings overrule general. 
 
 In every instance where a commodity rate is named in a 
 tariff upon a commodity and between specified points, the 
 
 '"Newton Gum Co. v. C, B. & 20 pg^giflg Coast Biscuit Co. v. S. 
 
 Co., 16 I. C. C. 341. P. & S. Ry., 20 I. C. C. 546. 
 
 " Bon Marche v. C. R. R. Co. of -' Ream v. S. P. Co., 25 I. C. C. 107. 
 
 N. J., 21 I. C. C. 195. " Crombie & Co. v. S. P. Co., 
 
 "Newman Lumber Co. v. M. C. 19 I. C. C. R. 561. 
 
 R., 11 I. C. C. 97. " Milburn Wagon Co. v. L. S. & 
 
 >» Ponchatoula Farmers' Ass'n v. M. S. Ry., 22 I. C. C. R. 460. 
 
 L C. R. R., 19 I. C. C. 513. -^ North Fork Cannel Coal Co. v. 
 
 A. A. R. R., 25 I. C. C. 241. 
 
 [787] 
 
§ 851 ] Railboad Rate Regulation 
 
 commodity rate is the lawful rate, and the only rate that 
 can be used with relation to that traffic between those 
 points, even though a class rate or some combination may 
 be lower. ^'' The naming of a commodity rate on any ar- 
 ticle or character of traffic takes such articles or traffic 
 entirely out of the classification and out of the class rates 
 between the points to which such commodity rate ap- 
 plies.^" Where both class and commodity rates on any 
 article are in effect from and to the same points, the 
 commodity rate, being specific, takes the article out of 
 the classification and becomes the only lawful rate.^' 
 And, therefore, a rule providing that the publication of a 
 commodity rate removes the application of the classifica- 
 tion rate, was not found unreasonable.^^ Sometimes a 
 tariff provides for an alternate application by which 
 either class or commodity rate may be applied dependent 
 upon which is the lower. ^^ Where two rates are in effect, 
 the shipper is justified in demanding the lower, and the 
 carrier may not lawfully collect more.'" Although naming 
 of commodity rate takes article out of class rates, this 
 rule does not prevent alternative use of class and com- 
 modity rates in same tariff.'^ Where conflicting rules 
 which affect the rate are published effective on the same 
 date in separate tariffs by the same carrier, the rule which 
 will result in application of lower rate is taken. '^ But it 
 is generally so that where a commodity rate is named, such 
 commodity rate is the only rate that may be used.'' 
 The so-called alternative rule provides that, if class rates 
 make lower charge than commodity rates, class rates 
 
 2^ Western Classification Case, 25 ™ Boise Commercial Club v. Adams 
 
 I. C. C. 442. Express Co., 17 I. C. C. 115. 
 
 » Porter v. St. L. & S. F. R. R., " Wheeler & Hotter Mercantile 
 
 15 I. C. C. 1. Co. V. C, B. & Q. R. R., 20 I. C. C. 
 
 " Central California Traction Co. v. 141 . 
 
 C, M. «Sc St. P. Ry., 24 I. C. C. 550. '^ Badenoch Co. v. C. & N. W. 
 
 28 In re Express Rates, 24 I. C. C. Ry., 22 I. C. C. 36. 
 
 380. " Goerres Cooperage Co. v. C, 
 
 ^ Rates on Sash, Doors, and Blinds M. & St. P. Ry., 21 I. C. C. 5. 
 into Te.\as, 26 I. C. C. 116. 
 
 [788] 
 
Schedules of Rates [ § 851 
 
 should apply.''' The fact that an article is specifically 
 described in another part of the classification renders 
 improper the application of a rate limited to such articles 
 "not otherwise specified." '" If it comes to a simple issue 
 where there are two tariff rates on the same articles, the 
 higher rate should not be charged.'" 
 
 "Western Fruit Jobbers' Ass'n "Auto Vehicle Co. v. C, M. & 
 
 V. C, R. I. & P. Ry., 27 I. C. C. St. P. Ry., 21 I. C. C. 286. 
 417. » Ohio Foundry Co. v. P., C, C. & 
 
 St. L. Ry., 19 I. C. C. 65. 
 
 [789] 
 
CHAPTER XVIII 
 
 INTERCHANGE OF TRAFFIC 
 
 j 860. Provisions of the Act. 
 861. Duties as to connecting services. 
 
 To'pic A. Basis of Through Service 
 
 j 862. Through service may be undertaken. 
 
 863. Presumptions as to through carriage. 
 
 864. Effect of the Carmack Amendment. 
 
 865. What constitutes connecting service. 
 
 866. Obligation of initial carrier to take to connection. 
 
 867. Obligation of second carrier to accept. 
 
 868. Obligations as to routing. 
 
 869. Fixing the blame for misrouting. 
 
 870. Carriers not compelled to bill through. 
 
 871. Discrimination forbidden where public duty involved. 
 
 Topic B. Requisites as to Through Rates 
 
 \ 872. Joint rates must be reasonable. 
 
 873. Limitations upon joint rates. 
 
 874. Nature of a joint rate. 
 
 875. Joint rate lower than combination. 
 
 876. Concurrence of carriers concerned. 
 
 877. Share of separate carrier as evidence. 
 
 878. Through rate although transit is broken. 
 
 879. Policing of transit privileges. 
 
 880. Proportional rates. 
 
 881. Export rates. 
 
 Topic C. Facilities for Interchange of Business 
 
 \ 882. Physical connections at common law. 
 
 883. Discrimination between connecting lines. 
 
 884. Extent of these requirements. 
 
 885. Demand for connecting service. 
 
 886. Compulsory interchange of business. 
 
 887. Through arrangements not obligatory. 
 
 888. Carrier might formerly select route. 
 
 889. Present scope of the Act. 
 
 [790] 
 
Interchange of Traffic [ § 860 
 
 § 890. Duty to deliver to connections. 
 891. Policy of recent legislation. 
 
 Toipic D. Compulsory Joint Through Baling 
 
 § 892. Jurisdiction of the Commission. 
 
 893. Discretion in its exercise. 
 
 894. Limitations upon the Commission. 
 
 895. The policies involved therein. 
 
 896. Protection from short hauUng. 
 
 897. What routes considered circuitous. 
 
 898. Power of the Commission to fix divisions. 
 
 899. How divisions are determined. 
 
 900. Theories of basing divisions. 
 
 901. Constructive mileage. 
 
 § 860. Provisions of the Act. 
 
 By section 15 as now revised compulsory joint carriage 
 is provided for by this machinery: The Commission may, 
 after heariag, on a complaint or upon its own initiative 
 without complaint, establish through routes and joint 
 classifications, and may establish joint rates as the max- 
 imum to be charged and may prescribe the division of such 
 rates as hereinbefore provided and the terms and condi- 
 tions under which such through routes shall be operated, 
 whenever the carriers themselves shall have refused or 
 neglected to establish voluntarily such through routes or 
 joint classifications or joint rates; and this provision shall 
 apply when one of the connecting carriers is a water line. 
 The Commission shall not, howe\'er, establish any through 
 route, classification, or rate between street electric pas- 
 senger railways not engaged in the general business of 
 transporting freight in addition to their passenger and 
 express business and railroads of a different character, 
 nor shall the Commission have the right to establish any 
 route, classification, rate, fare, or charge when the trans- 
 portation is wholly by water. If the carriers cannot come 
 to an agreement as to the divisions of the through rate, the 
 Commission may then fix the divisions itself in a subse- 
 quent proceeding. But in establishing such through route, 
 the Commission shall not require any company, without its 
 
 [791] 
 
§861] Railroad Rate Regulation 
 
 consent, to embrace in such route substantially less than 
 the entire length of its railroad and of any intermediate 
 railroad operated in conjunction and under a common 
 management or control therewith which lies between the 
 termini of such proposed through route, unless to do so 
 would noake such through route unreasonably long as 
 compared with another practicable through route which 
 could otherwise be established. 
 
 § 861. Duties as to connecting services. 
 
 There can be no doubt at common law of the funda- 
 mental proposition that no carrier has any standing in 
 law to demand, as a matter of right, that another carrier 
 shall make any joint arrangements for through service. 
 All that the law of the land requires of a carrier is that it 
 shall perform for anyone the service it is offering to the 
 public. The law does not compel a carrier to associate 
 itself in performing service with another carrier but it 
 does require a carrier to accept goods from another car- 
 rier for further transportation. In other words, a carrier 
 is bound to do for goods coming through by a preceding 
 carrier what it would be bound to do for goods if offered at 
 its terminus by the shipper in person. The original Act 
 provided simply for connecting carriage, but it did not go 
 much further than the common law; section 3, which is 
 still in force yet reads as follows: Every common carrier 
 subject to the provisions of this Act shall, according to 
 their respective powers, afford all reasonable, proper, and 
 equal facilities for the interchange of traffic between their 
 respective lines, and for the receiving, forwarding, and 
 delivering of passengers and property to and from their 
 several lines and those connecting therewith, and shall not 
 discriminate in their rates and charges between such con- 
 necting lines; but this shall not be construed as requiring 
 any such common carrier to give the use of its tracks or 
 terminal facilities to another carrier engaged in like busi- 
 ness. 
 
 [792] 
 
Interchange or Traffic [ §§ 862, 863 
 
 Topic A. Basis of Through Service 
 
 § 862. Through service may be undertaken. 
 
 The rule is generally recognized that the obligation of 
 a carrier to transport goods is limited to the route over 
 which it professes service. But although a carrier, there- 
 fore, cannot be called upon to undertake the transporta- 
 tion of goods beyond its own route, it may voluntarily 
 assume through transportation, relying upon its connec- 
 tions as agencies to fulfill its undertaking.*^ For while a 
 railroad cannot be compelled to accept and to agree to 
 carry goods to points beyond its own line, yet it may do 
 so. And if the carrier expressly or impliedly contracts 
 to carry from the consignor to the consignee it will be 
 liable as a conunon carrier for the whole distance. Another 
 example is the acceptance of a telegram by the initial 
 company upon the basis that it will be responsible for 
 its delivery at its destination, although that is a point 
 upon the lines of another company.*^ These are but two 
 instances, although by far the most prominent of the 
 possibility that although a public service company may not 
 be compelled to go outside its profession it may voluntarily 
 undertake to do so. 
 
 § 863. Presumptions as to through carriage. 
 
 In England and in some of the United States, the pre- 
 siunption is that when goods are taken marked for a point 
 beyond the route of the initial carrier, through service is 
 assumed. In the leadmg EngUsh case, Muschamp v. 
 Lancaster and Preston Junction Railway Company ^^ it 
 was held that such acceptance of goods so marked in it- 
 self made out a prima facie case from which the jury were 
 justified in finding the accepting carrier liable as such 
 even for a loss occurring beyond its own line. By the 
 weight of American authority, however, the natural pre- 
 
 «» Missouri, K. & T. Ry. v. Mc- «' Stevenson v. Montreal Tele- 
 
 Cann, 174 U. S. 680, 43 L. ed. 1093, graph Co., 16 Upp. Can. 2 B. 530. 
 19 Sup. Ct. 755. » 8 M. & W. 421. 
 
 [793] 
 
§ 864 ] Railroad Rate Regulation 
 
 sumption prevails that each carrier is liable only for car- 
 riage over his own route unless he has committed himself 
 clearly to through transportation. The mere fact that the 
 original carrier has accepted goods marked for a point ofif 
 his own route is not sufficient to overcome this presump- 
 tion. In one of the leading American cases, Nutting v. 
 Connecticut River Railroad Co.,'^ it was said that in the 
 absence of any special contract the obligation is nothing 
 more than to transport the goods safely to the end of 
 their road, and there deliver them to the proper carrier, 
 to be forwarded towards their ultimate destination. 
 
 § 864. Effect of the Carmack Amendment. 
 
 For interstate commerce the question has now become 
 settled beyond further questioning by the so-called Car- 
 mack Amendment. This provides positively that any 
 common carrier, receiving property for transportation from 
 a point in one State to a point in another State shall 
 issue a bill of lading therefor and shall be liable to the 
 lawful holder thereof for any damage to such property 
 caused by it or by any carrier over whose lines such prop- 
 erty may pass. Furthermore, it is enacted that no con- 
 tract shall exempt such carrier from the liability hereby 
 imposed, thus making it simply a matter of academic 
 interest as to whether a carrier may or may not at common 
 law stipulate against liability where it is not to blame.'^ 
 However, the subrogation of the initial carrier, if it pays 
 the loss, to recover from the carrier on whose line the loss 
 happened, for the amount it has to pay to the owners, if 
 duly established, is secured by the Amendment. And it 
 also provides that no right of the owners to pursue such 
 other remedies they may have shall be done away with. 
 The courts have held, however, that any State doctrines 
 in relation to the extent of liability in connecting carriage 
 and the limitation of responsibility therein are thereby 
 
 <" 1 Gray, 502. ■ 226 U. S. 491, 33 Sup. Ct. 148, and 
 
 '^ Adams Exp. Co. v. Crovinger, cases cited. 
 
 [794] 
 
Interchange of Traffic [ §§ 80."), 866 
 
 automatically made altogether inapplicable to losses 
 occurring in interstate transportation.'^ 
 
 § 865. What constitutes connecting service. 
 
 It would not seem that it would be a difficult question 
 to determine whether a particular case really involves 
 connecting service with its accompanying obligations; and 
 yet certain decisions will show that this problem may be 
 very difficult. Thus a transfer company employed by 
 one carrier to transfer the goods to the next carrier,'^ or 
 a cartage company employed by the last carrier to deliver 
 the goods to the consignee,'^ or a stockyard to which a 
 railroad delivers cattle,"* or a telephone used to deliver a 
 telegram,'"' or a hackman employed by a passenger at a 
 railroad station,''^ or a teamster employed by the con- 
 signee to remove goods from the carrier's station/** are 
 none of them connecting services. These are not all of 
 the same class although they come to the same result. 
 In the transfer, cartage, stockyards, and telegraph cases, 
 there is no cormecting service because the patron is deal- 
 ing with but one service, which uses the others as a sub- 
 ordinate instrumentality to perform its service. In the 
 hackman and teamster cases the patron employs the ad- 
 ditional service upon a separate basis altogether. 
 
 § 866. Obligation of initial carrier to take to connection. 
 
 In connecting carriage each party involved is not really 
 asked to do more than his full duty within the limits of 
 his own profession, except that the special circumstances 
 may seem to call for unusual action to some extent. Of 
 
 "'See Boston & M. R. R. v. ville ife N. Ry., 192 U. S. .568, 24 Sup. 
 
 Hooker, 233 U. S. 97, 34 Sup. Ct. 526, Ct. 339, 48 L. ed. 565. 
 
 and cases cited. " People v. Western Union Tele- 
 
 " Hooper v. Chicago & N. W. graph Co., 166 lU. 15, 46 N. E. 731, 
 
 R. R., 27 Wis. 81, 9 Am. Rep. 36 L. R. A. 637. 
 
 439. 58 Brown v. New York C. & H. 
 
 « St. Louis Drayage Co. v. Louis- R. R., 151 N. Y. 674, 46 N. E. 1145. 
 
 ville & N. R. R., 65 Fed. 39. "Parmelee v. Lowitz, 74 111. 110, 
 
 « Central Stockyards Co. v. Louis- 24 Am. Rep. 276. 
 
 [795] 
 
§ 867 ] Railroad Rate Regulatiok 
 
 the duty of the initial carrier to undertake service to 
 the point of connection on its line with the succeeding 
 carrier there can be no doubt. ^ This elementary point 
 has been most litigated in recent times in regard to tele- 
 graph companies, the initial company sometimes disliking to 
 accept a message to a connecting point, there to be de- 
 livered to another company, very often a competitor; but 
 it is well established that each must receive and forward 
 with diligence to the connecting line, and each will be 
 held liable for its failure or refusal to perform that duty.^ 
 In case of carriage there are usually marks on the package 
 designating its course; moreover, its bills accompany it; in 
 case of the telegraphing, however, it is a reasonable re- 
 quirement by the first company that words designating 
 the connection desired shall be sent with the message.' 
 This duty resting upon the initial party to act is positive; 
 it is no excuse that the initial carrier believes that the 
 succeeding carrier will refuse to accept the goods.* 
 
 § 867. Obligation of second carrier to accept. 
 
 Of the duty in each succeeding service to receive what 
 is properly tendered to it by its predecessor in service 
 there can also be no doubt. It is established law, made 
 necessary from the character of the business, that it is the 
 duty of common carriers to accept freight tendered by 
 another common carrier, and that a consignor of goods to 
 be carried over successive routes makes the first and each 
 successive carrier his forwarding agent. Each carrier who 
 takes charge of the goods becomes an agent of the con- 
 signor to tender the goods. ^ And a telegraph company 
 
 1 Seasongood v. Tennessee & O. N. W. Ry. Co., 150 N. C. 608, 64 
 R. Transp. Co., 21 Ky. Law Rep. S. E. 588. 
 
 1142, 54 S. W. 193. ■> Telephone Co. v. Brown, 104 
 
 2 See Western Union Telegraph Tenn. 56, 55 S. W. 155, 50 L. R. A. 
 Co. V. Simmons (Tex. Civ. App.), 277, 78 Am. St. Rep. 906. 
 
 93 S. W. 686. ' See particularly the case of 
 
 ' United States v. Northern Pac. Andrus v. Columbia & O. Steamboat 
 
 Ry. Co., 120 Fed. Rep. 546; Wam- Co., 47 Wash. 333, 92 Pac. 128, 
 
 pum Cotton Mills v. Carolina & 130. 
 
 [796] 
 
Interchange of Traffic [ § 868 
 
 chosen as the connection is in default when it refuses to 
 accept a message tendered by the initial company.* It 
 follows that the connecting company can make no un- 
 reasonable requirement which would seriously interfere 
 with the course of through service. A connecting railroad 
 cannot require as to freight tendered by a connection that 
 the shippers must themselves appear at the point of con- 
 nection, and rebill their goods.'' Nor can a telegraph com- 
 pany make the vexatious requirement that it will not 
 recognize the tendering company as the agent of the 
 sender unless he files a written power of attorney.* 
 
 § 868. Obligations as to routing. 
 
 The Act now provides that not only may shippers route 
 their own goods when connecting carriage is in question, 
 but where there is a choice of through routes the shipper 
 may not be prevented from taking which he chooses; and 
 jurisdiction exists in the Commission to award damages 
 resulting • from misrouting.' It has often been held that 
 reparation may be awarded for failing to route via the 
 lower combination.'" Section 15 of the Act now estab- 
 lishes duty of carrier to forward according to instructions 
 in bill of lading." The shippers' right to choose, thus 
 given, cannot be overbalanced by so-called "natural 
 routes." '^ A shipper may insist on a railroad short 
 hauling itself.'^ But if goods are left to a carrier it is 
 under no duty to turn over to competitors with a lower 
 rate." Where instructions call for delivery by a certain 
 road, the shipment, it seems, should be delivered to such 
 
 "Conyers v. Postal Telegraph i» C. H. Algert Co. v. D. & R. G. 
 
 Cable Co., 92 Ga. 619, 19 S. E. 253, R. R., 20 I. C. C. 93. 
 
 44 Am. St. Rep. 100. " Weyl-Zuckerman & Co. v. C. 
 
 7 Dunham v. Boston & Maine R. M. Ry., 27 I. C. C. 493. 
 
 R. Co., 70 Me. 164, 35 Am. Rep. 314. "^ Refuge Cotton Oil Co. v. St. 
 
 8 Atlantic & Pac. Tel. Co. v. West- L., I. M. & S. Ry., 27 I. C. C. 117. 
 em Union Telegraph Co., 4 Daly " Ch. of C. of Milwaukee v. Chi- 
 (N. Y.), 527. cago, R. I. & P. Ry., 15 I. C. C. 460. 
 
 ' Noblo \-. J. L. C. & E. R. R., 20 " Paragould Lumber Co. v. M. 
 
 I. C. C. 520. P., Unrep. 485. 
 
 [797] 
 
§ 869 ] Railroad Rate Regulation 
 
 road at a junction over which the lowest rate is apph- 
 cable." And where there are no instructions the carrier 
 must choose the cheapest connections." Where the rate 
 is the same the carrier may route as it pleases, in absence 
 of instructions." The mistake of the shipper as to what 
 rate is applicable to his shipment, is no basis for repara- 
 tion.^^ Instructions "all rail" govern, even if "rail and 
 water" are cheaper. ^^ Where a rate does not apply via the 
 route named, the carrier should ascertain from the shipper 
 whether the rate or the route is to be followed.^" The 
 fact that shipper gave routing instructions over route 
 taking higher rate, does not relieve carrier of liability, if 
 that rate is unreasonable." Where instructions were to 
 use the most direct route with a through rate, and no rate 
 was applicable from origin to destination, a shipment was 
 forwarded via a circuitous route; but reparation was 
 awarded on the basis of a subsequently established rate 
 via more direct route. ^^ 
 
 § 869. Fixing the blame for misrouting. 
 
 Both initial and connecting lines may be liable in dam- 
 ages for misrouting; the carrier at fault is liable for for- 
 warding cars by more expensive route contrary to or in 
 absence of instructions.^' A carrier is liable in damages 
 where a shipper is injured as a result of a carrier's failure 
 to route by the cheapest available route in the absence of 
 routing instructions.^^ Where a consignor specified a 
 route in bill of lading, and also designated a rate therein 
 not applicable to the route named, it was held that the 
 
 '» Ryland & Brooks Lumber Co. » Gibson Fruit Co. v. C. & N. W. 
 
 V. G. & O. Ry., 21 I. C. C. 520. Ry., 21 I. C. C. 644. 
 
 1° Marshall & M. G. Co. v. St. " Shoupe & Co. v. T. & B. V. Ry., 
 
 Louis & S. F. R. R., 16 L C. C. 385. 26 I. C. C. 570. 
 
 " Shipper P. Ass'n v. Atlantic C. L. " Samuels & Co. v. St. L. S. W. 
 
 R. R., 14 I. C. C. 476. Ry., 20 I. C. C. 151. 
 
 '» Running v. C, St. P. M. & O. '' Beekman Lumber Co. v. L. 
 
 Ry., 19 I. C. C. 565. Ry. & N. Co., 19 I. C. C. R. 343. 
 
 » HoUingshead & B. v. P. & L. E., '-* Poor Grain Co. v. C, B. & Q. 
 
 18 I, C. C. 193. Ry. Co., 12 I. C. C. 418. 
 
 [798] 
 
Interchange of Traffic [ § 870 
 
 initial carrier, having failed to obtain further and definite 
 instructions before forwarding, is liable for damages re- 
 sulting from misrouting.^'' The initial carrier will be held 
 liable for misrouting upon a shipment forwarded via a route 
 taking a combination rate higher than that applicable 
 through another recognized gateway.^* Delivering lines 
 owe to shippers under joint rates the obligation to do what 
 they reasonably can to avoid delays in the delivery of 
 their traffic. ^'^ But no obligation rests upon carrier to 
 hunt up unnatural connections or practically unknown 
 gateways in order to determine lowest possible combina- 
 tion.^^ It is not unreasonable to require of the carrier to 
 ascertain before receiving export cotton for transporta- 
 tion to Galveston whether it can be cared for at Galveston 
 upon its receipt. ^^ A carrier which without authority 
 diverted traffic from the route specified in the bill of lading 
 is liable for increased charges resulting from such unau- 
 thorized diversion.'" A carrier is liable in damages who 
 fails to route shipments via cheapest available route, and 
 thereby deprives complainant of reconsigning privileges." 
 Where a consignor specified a route in bill of lading, and 
 also designated a rate therein not applicable to the route 
 named, it was held that the initial carrier, having failed to 
 obtain further and definite instructions before forwarding, 
 is liable for damages resulting from misrouting.'^ 
 
 § 870. Carriers not compelled to bill through. 
 
 Under the original Act no power was given to the Com- 
 mission to compel through billing, routing or rating by 
 connecting lines. This can be done only by contract or 
 arrangement between the carriers, and the Act did not 
 
 " Whaley-Warren Lumber Co. v. -' Galveston Commercial Ass'n v. 
 
 C. C. & O. Ry., 21 I. C. C. R. 530. A., T. & F. Ry. Co., 25 I. C. C. 216. 
 
 =6 Goodman M'fg Co. v. P. R. R. "> Weyl Zuckerman & Co. v. C. 
 
 Co., 26 I. C. C. 423. M. Ry., 27 I. C. C. 493. 
 
 ^ Detroit Reconsigning Case, 25 '' Newman Lumber Co. v. M. C. 
 
 I. C. C. 392. R. R., 26 I. C. C. 97. 
 
 2«Hettler Lumber Co. v. G. & ^= Ludowici-Celadon Co. v. M. 
 
 S. L R, R. Co., 30 I. C. C. R. 14. P. Ry., 22 I. C. C. 588. 
 
 [7991 
 
§ 871 ] Railroad Rate Regulation 
 
 compel connecting carriers to make mutual contracts.'^ 
 With nothing more than section 3 in the Act in the earlier 
 days, there were sweeping decisions in the courts, holding 
 that an interstate carrier did not violate that section by 
 exacting the prepayment of freight on all property re- 
 ceived from it at a given station from one connection, 
 although it did not require its charges to be paid in ad- 
 vance on freight received from a competing carrier at 
 such station. The courts went so far as to say that an 
 interstate carrier which enters into an arrangement with a 
 connecting carrier for through billing, rating, and loading, 
 and for the use of its tracks and terminals, is not obliged 
 to make the same arrangement with other connecting 
 carriers, though the physical facilities for an interchange 
 of traffic are the same.^'' It should be noted that these 
 decisions are still good law when the issue is whether the 
 carrier by refusing to act in conjimction with another 
 carrier has discriminated in such a way as to violate these 
 provisions of the Act. 
 
 § 871. Discrimination forbidden where public duty involved. 
 
 Where there are two rival lines of steamboats on a river 
 
 »3 Central Stockyards Co. v. Louis- 27 U. S. App. 280, 63 Fed. 775; St. 
 
 viUe & N. R. R., 192 U. S. 568, Louis Drayage Co. v. Louisville & 
 
 48 L. ed. 565, 24 Sup. Ct. 339; Ken- N. R. Co., 5 Int. Com. Rep. 137, 
 
 tucky & I. Bridge Co. v. Louisville 65 Fed. 39; Allen v. Oregon R. & 
 
 & N. R. R., 2 L. R. A. 289, 2 Int. . Nav. Co., 98 Fed. 16. 
 
 Com. Rep. 351, 37 Fed. 567, 629; " Mattingly v. Pennsylvania Co., 
 
 Little Rock & M. R. R. Co. v. St. 2 Int. Com. Rep. 806, 3 I. C. C. 592; 
 
 Louis, I. M. & S. Ry., 2 Int. Com. Re Clark, 2 Int. Com. Rep. 797, 3 
 
 Rep. 763, 41 Fed. 559; Chicago & I. C. C. 649; Re Joint Water & Rail 
 
 N. W. Ry. V. Osborne, 3 C. C. A. Lines, 2 Int. Com. Rep. 486, 2 I. C. 
 
 347, 4 Int. Com, Rep. 257, 52 Fed. C. 645; Capehart v. Louisville & N. 
 
 915; Oregon Short Line & U. N. Ry. R. R., 3 Int. Com. Rep. 278, 4 I. C. 
 
 v. Northern P. R. R., 4 Int. Com. C. 265; Commercial Club v. Chicago, 
 
 Rep. 718, 9 C. C. A. 409, 15 U. S. R. I. & P. Ry., 6 I. C. C. Rep. 647; 
 
 App. 479, 61 Fed. 158, affirming 4 New York, N. H. & H. R. R. v. 
 
 Int. Com. Rep. 249, 51 Fed. 465; Piatt, 7 I. C. C. Rep. 323; Savannah 
 
 Little Rock & M. R. Co. v. St. Louis Bureau of Freight & Transp. v. Louis- 
 
 S. W. R. Co., 26 L. R. A. 192, 4 Int. ville & N. R. R., 8 I. C. C. Rep. 
 
 Com. Rep. 854, 11 C. C. A. 417, 377. 
 
 [800] 
 
Interchange of Traffic [ § 872 
 
 plying between the same points, and carrying freight for 
 hire, both bearing the same relation to a railroad company 
 and both seeking its services to forward their freight to 
 the same points of destination, and the company system- 
 atically discriminates against one by charging on goods 
 coming to or from it fifty cents a hundred more for freight 
 than in the case of the other, a suit for such discrimination 
 can be brought. ^'^ And where a tariff of a railroad com- 
 pany fixes a rate on shipments originating on its own line, 
 or on certain enumerated connecting lines, it assimies the 
 obligation to carry at that rate for shippers whose ship- 
 ments originate on other lines as well; and, if such shipper 
 is required to pay for such services at a higher rate than 
 that named in the tariff, he is entitled to recover the 
 amount of the overcharge.'* And in general it may be 
 said that no policies can be adopted inconsistent with 
 public duty whereby prejudice is done to connecting busi- 
 ness. An arrangement by which a stage line refused to take 
 through on the same day passengers coming by a rival 
 line was held illegal long ago in a leading case." And 
 more recently a contract by a steamboat owner not to 
 receive goods consigned to points beyond its line was held 
 illegal.'* 
 
 Topic B. Requisites as to Through Rates 
 
 § 872. Joint rates must be reasonable. 
 
 The shipper or consignee has no direct interest in the 
 way a joint rate is divided between the carriers, nor in 
 the amount of the division received by each carrier. The 
 entire through rate is what interests the public, and in so 
 far as a carrier gives up a part of its fair division for the 
 sake of obtaining business the public is not concerned.'^ It 
 it clear, of course, that the entire rate must not be so low 
 
 '5 Samuels v. L. & N. Ry., 31 Fed. '« Seasongood v. Tenn. & O. 
 
 57. Transp. Co., 34 Ry. L. Rep. 1142, 
 
 M Missouri, K. & T. Ry. v. New 54 S. W. 193. 
 
 Era Milling Co., 100 Pac. 273. '» Re Proposed Advances in Freight 
 
 " Bennet v. Button, 10 N. H. 481. Rates, 9 I. C. C. Rep. 382, 433. 
 
 51 [ 801 ] 
 
§ 873 ] Railroad Rate Regulation 
 
 as to be unremunerative, and thus burden the local traffic.^ 
 As the rates for long distances cannot be exactly compared 
 with those for short distances, the proportion received by 
 one carrier out of a long distance through rate is not 
 necessarily the measure of its share of a joint rate over a 
 materially shorter distance; though it may be considered 
 in determining the rightful relation of the two rates. ^^ 
 When a joint rate is unreasonable the liability of defendants 
 is joint and several, and Commission may award repara- 
 tion against one, though other roads which performed part 
 of service are not parties/^ When a through route has 
 been established by agreement of the carriers, every shipper 
 must be allowed the benefit of it.^' The obligation to 
 establish through routes and joint rates is imposed by 
 section 1 as it now reads. ^^ 
 
 § 873. Limitations upon joint rates. 
 
 It is entirely proper that two carriers should combine 
 to form a single route and name a single rate for that haul. 
 This will usually result in a lower rate than the sum of the 
 two individual rates by reason of the relative economy 
 of the long haul. For plainly a railroad may charge more 
 for transporting its local passenger between two termini 
 than it receives for transporting a through passenger over 
 the same distance in the division of the through rate with 
 other railroads.^" When such a through rate has been 
 established by the agreement of the carriers, every shipper 
 is entitled to it; if some shippers are given an advantage 
 
 '"' Lippman v. Illinois Cent. R. R., ** Union Pacific Ry. Co. v. United 
 
 2 Int. Com. Rep. 414, 2 I. C. C. Rep. States, 117 U. S. 355, 6 Sup. Ct. 772, 
 
 584. 29 L. ed. 920; Texas & P. Ry. Co. 
 
 " Colorado F. & I. Co. v. Southern v. Interstate Com. Comm., 162 
 
 Pac. Co., 6 I. C. C. Rep. 488. U. S. 197, 16 Sup. Ct. 666, 40 L. ed. 
 
 " Webster Grocer Co. v. C. & N. 940; Parsons v. Chicago & N. W. 
 
 W. Ry., 21 I. C. C. 20. Ry. Co., 167 U. S. 447, 17 Sup. Ct. 
 
 " Rea V. Mobile & O. Ry., 7 I. C. 887, 42 L. ed. 231; Tozer v. United 
 
 C. Rep. 43. States, 52 Fed. 917. 
 
 " Florida Cotton Oil Co. v. C. of 
 G. Ry., 19 I. C. C. 336. 
 
 [802] 
 
iNTERCHANGJi; OF TRAFFIC [ § 874 
 
 over others in such shipment it will be a case of illegal 
 discrimination.^* It should be noted throughout this 
 discussion that under section 1 the carriers must make 
 reasonable rates applicable to through routes/'' And the 
 Commission is expressly empowered to determine the reason- 
 ableness of any part of the aggregate of charges for inter- 
 state transportation and to establish joint rates. ^* The 
 carriers establishing it must be prepared to furnish suit- 
 able instrumentalities of shipment and carriage; if any 
 mistake is made by the first carrier in forwarding over 
 the route that carrier is responsible.^^ 
 
 § 874. Nature of a joint rate. 
 
 A joint rate is a unit even though divided between 
 several carriers arranging themselves into through route. ^^ 
 Where a joint through route has been formed, the rate 
 charged is a through rate, and a shipment will move upon 
 the rate existing at the time it is billed by the initial 
 carrier; the adoption of a joint through rate will not affect 
 a shipment moving upon a combination through rate." 
 It follows that where between the same points via the 
 same route, there are two rates — one a joint rate and the 
 other a combination rate — the joint rate is the legal one.*^^ 
 The Commission has never held that a through rate which 
 is equal to the sum of the intermediate local rates is in 
 itself sufficient to call for a reduction.''^ But very often a 
 joint through rate will be held unreasonable to the extent 
 that it exceeds the combination of local rates.''* The test 
 of reasonableness is applied, not to the separate factors, 
 
 « Blair v. Sioux City & P. R3-. ™ Re Through Rates & Through 
 
 Co., 109 la. 369, 80 N. W. 673; Bras Rates, 12 I. C. C. 163. 
 
 V. McConnell, 114 la. 401, 87 N. W. =■! Re Through Rates & Through 
 
 290. Rates, 12 I. C. C. 163. 
 
 " Flour City S. S. Co. v. L. V. R. " Arabol M'fg Co. v. S. B. Ry., 
 
 R., 24 I. C. C. 179. 25 I. C. C. 429. 
 
 " Sunderland Bros. Co. v. St. L. " Appalachia Lumber Co. v. L. 
 
 & S. F. R. R. Co., 23 I. C. C. 259. & N. R. R., 25 I. C. C. 193. 
 
 " Pond-Decker Lumber Co. v. ^* Kessler & Co. v. L. & N. R. R., 
 
 Spencer, 86 Fed. 846. 25 L C. C. 397. 
 
 [803] 
 
§ 875 ] Railroad Rate Regulation 
 
 but to the rate as a whole.'" Where an unreasonable joint 
 through rate has been collected, and the only question 
 involved is damages upon past shipments, the liability 
 of the parties to such rate is joint and several. "° And 
 indeed a through rate for transportation over a line com- 
 posed of two or more separate roads greater than would 
 be reasonable and sufficient if the same transportation 
 were over a single road is not in all cases unjust.''^ For 
 the Commission has often recognized that rates over a 
 two-line haul may properly exceed what would be reason- 
 able rates for same distance and under same conditions 
 over a one-line haul.^* As between two joint tariffs, 
 naming different rates between the same points, the one 
 properly concurred in is the legal rate, though it names 
 higher charges than the other. ^^ As a matter of rate struc- 
 ture a through rate is often made by adding rate to basing 
 point, with an "abitrary." ^ 
 
 § 875. Joint rate lower than combination. 
 
 It is permissible for two carriers to combine upon a 
 joint through rate over both lines, which shall be less than 
 the sum of their separate rates." ^ In other words, it is 
 entirely proper that two carriers should combine to form 
 a single route, join in one haul, and name a single rate for 
 the haul. It is not only permissible, but extremely de- 
 sirable, that this should be done; and the lower through 
 rate thereby secured is quite justifiable. The through 
 rate is ahnost universally less in proportion to distance 
 than the local rate; the carriers can afford to make it 
 lower; if they were compelled to measure the one by the 
 other, there would be no inducement to form through 
 
 "5 People's Fuel Supply Co. v. s" Kennedy & Co. v. St. L. S. W. 
 
 Grand Trunk W. Ry., 27 I. C. C. 24. Ry., 22 I. C. C. R. 277. 
 
 ^ Webster Grocer Co. v. C. & N. ™ Aransas Pass Channel & Dock 
 
 W. Ry., 21 I. C. C. R. 20. Co. v. G. H. & S. A. Ry., 27 1. C. C. 
 
 ''Loup Creek Colliery Co. v. 403. 
 
 Virginian Ry., 12 I. C. C. 471. "■ St. Louis Hay & Grain Co. v. 
 
 '* Maricopa County Commercial Illinois Cent. R. R., 11 C. C. Rep. 
 
 Club V. S. P. Co., 22 L C. C. R. 429. 486. 
 
 [804] 
 
Interchange of Traffic [ § 876 
 
 lines, and shippers would be annoyed by having to deal 
 with a succession of local roads instead of with one road 
 acting for all. But if the through rate is less m proportion 
 than the local, some of the carriers, if not all of them, 
 must accept for their division of the through rate a sum 
 less than the local rate. This is very manifest. It is well 
 known, also, that many influences, such as competition 
 on the through haul, afifect the making of a through rate 
 that may not bear at all, or if at all in less degree, upon 
 the local rates.*^ 
 
 § 876. Concurrence of carriers concerned. 
 
 In order to be considered as properly in force, through 
 routes and joint rates must be voluntarily estabhshed.^^ 
 It would be improper for one road to establish a joint 
 rate from a point on another road without the concurrence 
 of the latter.*^ A joint rate over several lines not con- 
 curred in by such connecting lines is in direct contraven- 
 tion of the rules of the Commission made under section 6.*'' 
 Where no joint through rate is thus in effect, the combina- 
 tion of separately established rates via route of move- 
 ment constitutes the through rate.** An initial line pub- 
 lishing what purports to be a joint tariff, but which is not 
 a legal tariff because not concurred in by its connections, 
 is liable in damages for whatever amount shippers suffer.*' 
 For an initial line, publishing joint rates lower than combi- 
 nation without securing concurrence of connections, must 
 protect such rate to a shipper who made a contract based 
 on the lower rate.** While the fact that a through route 
 extends over two railroads may lead to a lower rate than 
 
 «- Lippman v. Illinois Cent. R. R., "« Fish & Co. v. N. Y. C. & St. L. 
 
 2 Int. Com. Rep. 414, 2 I. C. C. 384. R. R., 19 I. C. C. R. 452. 
 
 "^ Craig Lumber Co. v. \. Ry., " Edison Portland Cement Co. v. 
 
 19 I. C. C. R. 114. D., L. & W. R. R., 22 I. C. C. R. 
 
 ""Coal Rates on the Stony Fork 382. 
 
 Branch, 26 I. C. C. 168. ™ De Camp Bros. & Yule Iron 
 
 «s De Camp Bros. & Yule Iron, Coal & Coke Co. v. V. & S. W. Ry., 
 
 Coal & Coke Co. v. V. & S. F. Ry., 22 I. C. C. R. 274. 
 22 I. C. C. 274. 
 
 [8051 
 
§ 877 J Railroad Rate Regulation 
 
 if it were over a single line, it may justifiably have the 
 opposite effect; the rate may be justifiably lower between 
 two termini when the route is over a single road than when 
 it is over two roads.^" Though not increased because of 
 the joint carriage, the rate may well be maintained at the 
 sum of the local charges of the carriers; and no objection 
 can be raised to such a rate. No one has a right to de- 
 mand that the through rate be a reduced rate.™ 
 
 § 877. Share of separate carrier as evidence. 
 
 Although in the case of a joint rate it is the entire rate, 
 and not the proportionate part which each carrier receives 
 on the division, which directly interests the shipper, yet 
 that division is not without significance in determining 
 what are reasonable rates for the whole distance on the 
 lines in question; and he is entitled to inquire into such 
 division when he complains that the joint rate is unlawful, 
 for the amount so received by the different carriers may 
 throw light upon the reasonableness or justice of the 
 aggregate charge.''^ But plainly a railroad may charge 
 more for transporting a local passenger between the two 
 termini than it receives from transporting a through 
 passenger over the same distance, in the division of the 
 through rate with other railroads.^^ While a division of a 
 through rate long accepted by a carrier may often be 
 pertinent evidence, it is not a sound final test of the rea- 
 sonableness of the through rate itself. Nor is the rate per 
 ton-mile the generally accepted basis in this country for 
 making up interstate rates.'^ A carrier may deem it good 
 
 ™ Corporation of Birmingham v. Rep. 13, 3 Int. Com. Rep. 688; Tram- 
 Manchester S. & L. Ry., 10 Ry. & meU v. Clyde S. S. Co., 5 I. C. C. 
 Can. Tr. Cas. 62. Rep. 524, 4 Int. Com. Rep. 120; 
 
 ™ King V. New York, N. H. & H. Warren-Ehret Co. v. Central R. R., 
 
 R. R., 3 Int. Com. Rep. 272, 4 I. C. 8 I. C. C. Rep. 598. 
 
 C. 251. '2 Union Pacific Ry. v. United 
 
 " Parkhurst v. Pennsylvania R. States, 117 U. S. 355, 29 L, ed. 920, 
 
 Co., 2 I. C. C. Rep. 131, 2 Int. Com. 6 Sup. Ct. 772. 
 
 Rep. 78; Railroad Commission v. " Bulte MUhng Co. v. C, A. R. R., 
 
 Savannah, F. & W. R., 5 I. C. C. 15 I. C. C. 351. 
 [806] 
 
Interchange of Traffic [ §§ 878, 879 
 
 business policy to secure a part of a through haul on a 
 large volume of traffic, and to accept a division which is 
 much lower than local rates, and if no violations of law 
 are created, no valid objection can be made against such 
 divisionJ^ 
 
 § 878. Through rate given although transit is broken. 
 
 A very important feature in modern railroading is the 
 permission given to the owners of goods in transit to have 
 the advantages of the through rate upon paying a very 
 small additional premium, although the transit is inter- 
 rupted for a time to do something to the commodities in 
 question at some intermediate point, to prepare them for 
 market, or even to entirely change their form by manu- 
 facture of some sort/^ Thus the railroads not uncommonly 
 grant the privilege of cleaning in transit, of bagging in 
 transit, of compressing in transit, and of milling in transit.''* 
 Shippers are not entitled as a matter of right to mill 
 grain in transit and forward the milled product under the 
 through rate in force on the grain from the point of origin 
 to the place of ultimate destination." But the allowance 
 of the privilege by a carrier to shippers in one section must 
 be without wrongful prejudice to the rights of shippers in 
 another section served by its line.'* 
 
 § 879. Policing of transit privileges. 
 
 The most thorough discussion of this problem of privi- 
 leges in transit is in an early opinion of the Commission,'* 
 
 "New Albany Furniture Co. v. "Diamond Mills v. B. & M. R. 
 
 M. J. & K. C. R. R., 13 I. C. C. 594. R., 9 I. C. C. Rep. 311. 
 
 " Koch V. Pennsylvania Ry., 10 " A fair price may be charged by 
 
 I. C. C. Rep. 675. the carrier for transit privileges, 
 
 ™ For the service of the carrier in sufficient not merely to recoup its 
 
 handUng reconsignments where tran- bare cost but a fair profit as well, 
 
 sit is broken, the total cost may be Spregle v. S. Ry., 25 I. C. C. 
 
 higher than the through rate where 71. 
 
 the transportation is not interrupted. " Re Alleged Unlawful Rates for 
 
 St. Louis H. & G. Co. v. I. C. R. R., Cotton, 9 I. C. C. Rep. 121. 
 11 I. C. C. 486. 
 
 [807] 
 
§ 880 ] Railroad Rate Regulation 
 
 in regard to the practice of "floating cotton," the essential 
 transportation feature of which was carrying the cotton to 
 a compress, receiving it again in the compressed state, and 
 transporting it to destination at the through rate in force 
 from the point of origin.*" It was held that the carrier, 
 may, as part of a contract for through shipment, allow the 
 cotton to be stopped off for the purpose of grading and com- 
 pression; but the privilege enters into and becomes part 
 of the service covered by the rate, and should be specified 
 in the published tariffs.*^ The Commission said in sub- 
 stance that this cotton is in no possible construction at 
 the compress point for any other purpose than a temporary 
 one in transit; and that although an indispensable ele- 
 ment in every through shipment would seem to be a con- 
 tract for such through service, an agreement between the 
 parties at the inception of the carriage that the freight was 
 to go to some destination beyond to be designated later 
 was enough.*^ 
 
 § 880. Proportional rates. 
 
 A proportional rate is a part or remainder of a through 
 rate, and as such must be taken in its relation to the whole 
 rate.*' Recently the Commission has held the withdrawal 
 of proportional rates from upper Mississippi River crossings 
 while leaving them in effect from lower crossing not to be 
 justified.** To a certain extent the Commission recognizes 
 the propriety of proportional rates, which differ from corre- 
 sponding local rates, and has acted upon those rates when 
 established by the carrier.*'' It has said that a proportional 
 rate, applying on through traffic might well be less than 
 
 " See Re Rates & Practices of *' Boney & Harper Milling Co. v. 
 
 Mobile & O. R. R., 9 I. C. C. 373. A. C. L. R. R., 28 I. C. C. 383. 
 
 *' See the general discussion of *' Grain Rates in C. F. A. Terri- 
 
 all these matters in the Transit Case, tory, 28 I. C. C. 549. 
 25 I. C. C. 130. *= Southwestern Shippers Traffic 
 
 '^ The same matters were dis- Ass'n v. A., T. & S. F. Ry., 24 I. C. 
 
 cussed in the Transit Case, 26 I. C. C. 570. 
 C. 204. 
 
 [808] 
 
Interchange of Traffic [ § 881 
 
 the corresponding local rate, but it has not said that such 
 proportional rate must be, or in every case should be, less.*' 
 On through traffic to a given interior point, the proportional 
 rate from the river crossing is usually higher than local 
 rate from the river to that point.*^ Proportional rate 
 applying to through traffic may well be lower than the 
 corresponding local rate.** There is no substantial differ- 
 ence between a "reshipping" rate and what is known as a 
 "proportional" rate.*^ The Coimnission is insistent that 
 proportionals must be open to all under the same con- 
 ditions. And proportionals should apply through all break- 
 ing points similarly situated.^" Low proportionals do not 
 justify unreasonable locals;'^ there is no recognized rela- 
 tion between proportionals and corresponding locals. It all 
 depends upon the traffic conditions through the territory;'^ 
 but proportional rate should not be limited to traffic from 
 particular places.'^ 
 
 § 881. Export rates. 
 
 Export rates should be apphed only to actual through 
 movement, not to the case where the shipper takes pos- 
 session and rebills.^^ Export or import rates must be 
 open to all to combine with the rates of all ocean car- 
 riers.''^ There is no discrimination, because defendant 
 maintains a low inland proportional rate on imported 
 sugar .'^ In one proceeding a lower rate upon export grain 
 during period of navigation was suggested but not re- 
 
 86 Interior Iowa Cities, 28 I. C. C. Salem v. Norfolk & W., 16 I. C. C. 12. 
 
 64. '* Indianapolis Freight Bureau v. 
 
 " Star Grain & Lumber Co. v. A., C, C, C. & St. L. Ry., 15 1. C. C. 504. 
 
 T. & S. F. Ry., 14 I. C. C. 364. " Bayou City Rico Mills v. T. & 
 
 » Baltimore Chamber of Com- W. O. R. R., 18 I. C. C. 490. 
 
 merce v. B. & O. R. R., 22 I. C. C. " Re Transportation of Wools, 23 
 
 R. 596. . I. C. C. 151. 
 
 "" Bascom Co. v. Atchison, T. & '* Altaian v. Adams Express Co., 
 
 S. F. Ry., 17 I. C. C. 354. 14 I. C. C. 340. 
 
 ™ Henderson Elevator Co. v. Illi- " In re Rates, etc., of the Louisi- 
 
 nois Central R. R., 17 I. C. C. 573. ana Ry. & Nav. Co., 22 I. C. C. R. 
 
 91 Board of Trade of \Vinston- 558. 
 
 [809] 
 
§ 882 ] Railboad Rate Regulation ^ 
 
 quired, the present rate being apparently low." An inland 
 proportional higher than an export rate will generally 
 be condemned.'* It is unlawful to make differing export 
 rates, depending upon differing destinations.'^ Carriers 
 should quote open port proportional; then they may make 
 through rates for foreign carriage on such basis as they 
 please without coming within Act.^ It is improper to 
 exact more for export traffic than for domestic consump- 
 tion.^ Thus where cereal goes to ship as grain it pays 
 grain export rate, if as flour it pays flour.' 
 
 Topic C. Facilities for Interchange of Business 
 
 § 882. Physical connections at common law. 
 
 Those who have provided certain facilities in order to 
 serve were at common law under no obligation to go 
 beyond the service they have professed and substantially 
 extend their existing facilities so as to make physical 
 connection with another service.'' To require this under 
 the Act as it originally provided was thought to be outside 
 the theory of the restriction of obligation to the profession 
 made. In a leading Federal case ^ in refusing to order a 
 railroad company to make connections with a switching 
 company, the court said: "Neither this nor any other pro- 
 vision of law requires of the common carrier of interstate 
 commerce the duty of either forming new connections or 
 of establishing new stations for the reception and delivery 
 of freight.^ The Act to Regulate Commerce deals with 
 
 9' Board of Trade of Chicago v. v. Baltimore & O. R. R., 14 I. C. C. 
 
 A. C. R. R., 20 I. C. C. 504. 356. 
 
 '» St. Regis Paper Co. v. N. Y. C. " Kentucky & I. Bridge Co. v. 
 
 & H. R. R. R., Unrep. op. Louisville & N. Ry. Co., 37 Fed. 
 
 ^ New Orleans Board of Trade v. 567, 2 L. R. A. 289. 
 I. C. R. R., 23 I. C. C. 465. = See particularly Wisconsin, M. 
 
 ' Cosmopolitan Shipping Co. v. & P. R. R. Co. v. Jacobson, 179 V. 
 
 Hamburg-American Packet Co., 13 S. 287, 45 L. ed. 194, 21 Sup. Ct. 
 
 I. C. C. 266. 115. 
 
 ^ Newark Machine Co. v. P. C. " International & G. N. Ry. Co. v. 
 
 C. & St. L., 16 I. C. C. 29. Raiboad Commission of Texas, 99 
 
 = Hecker-Jones-Jewell Milling Co. Tex. 332, 89 S. W. 961. 
 
 [810] 
 
Interchange of Traffic [ § 883 
 
 such common carriers as it finds them, and leaves to 
 them full discretion as to what extensions they will 
 make of their lines, the connections they may form, 
 and the yards and depots they may choose to estab- 
 lish." ' 
 
 § 883. Discrimination between connecting lines. 
 
 Though not expressly contained in this clause of the Act 
 it is nevertheless to be understood that discrimination is 
 not forbidden unless it is undue or unreasonable. Thus in 
 making contracts for through transportation of passengers, 
 the initial carrier may lawfully prefer a road going through 
 to the point of destination to one going only part of the 
 way, an arrangement with which would necessitate further 
 arrangements to reach the desired point.* A combination 
 of independent carriers by which one is to prefer the other 
 to another connecting line outside of the combination 
 does not justify discrimination between the connecting 
 lines.' But a railroad company operating steamers in 
 connection with its railroad as a single line was not held 
 guilty of a discrimination against another carrier, within 
 the prohibition of this section of the Act, by refusing to 
 allow a rival steamboat company to land its boats at a 
 wharf used by it solely for connecting its railroad and 
 boats, where there is no regular public station at such 
 wharf, but the general station is at a little distance and 
 ample facilities there exist.'" The Act contemplates in- 
 dependent carriers, capable of mutual relations; there 
 must, therefore, be at least two other carriers besides the 
 offending one. Both companies must be independent of 
 the railroad charged with discrimination, and both must 
 
 ' Rutland R. R. Co, v. Bellows & N. E. R. R., 50 Fed. 867, 4 Int. 
 
 Falls & S. R. St. Ry. Co., 7.3 Vt. 20, Com. Rep. 116. 
 
 50 Atl. 636. '» Ilwaco R. & Nav. Co. v. Oregon 
 
 ' Little Rock & M. R. R. v. East S. L. & U. N. Ry., 57 Fed. 673, 6 
 
 Tennessee, V. & G. R. R., 47 Fed. C. C. A. 495, 5 Int. Com. Rep. 
 
 771, 4 Int. Conj, Rep. 201. 627. 
 
 » New York * .\. Ry. v. New York 
 
 [811 
 
§ 884 ] Railroad Rate Regulation 
 
 be lines connecting with it, in order to have the situation 
 in which the section applies.'^ 
 
 § 884. Extent of these requirements. 
 
 Contracts by a railroad company with other companies 
 for the estabhshment of through routes and through rates 
 for the continuous carriage of interstate traffic do not vio- 
 late section 7 of the Act prohibiting a combination to 
 prevent the carriage of freight from being continuous. ^^ 
 Nor is it violated by a refusal of the connecting carrier 
 to take the goods at the valuation agreed on by the first 
 carrier." What is an undue or unreasonable preference or 
 advantage under section 3 of the Act is a question of fact, 
 but, subject to militating circumstances, rates ought to be 
 relatively equal and reasonable; ^* and the carrier has no 
 right to make rates so as to overcome the natural ad- 
 vantages of one place over another, or so as to build up one 
 place or section at the expense of another. ^^ The point 
 where traffic is interchanged in through routing is a matter 
 for the carriers to determine in first instance unless they 
 disagree.'" So far as undue preference in serving localities 
 is concerned facilities may be denied in any manner, as by 
 an unreasonable arrangement of time schedules.'^ The 
 provisions of the section apply not merely to the carriers 
 themselves, but with equal force to their officers and em- 
 ployees; therefore the Act is violated by employees who by 
 concerted action strike in order to avoid receiving cars 
 from a connecting carrier.'* 
 
 " In Freight Bureau v. Cincin- '* Morris Iron Co. v. B. & O. R. 
 
 nati, N. O. & T. P. Ry., 4 Int. Com. R. Co., 26 I. C. C. 240. 
 
 Rep. 592, 6 I. C. C. 195. '" Ch. of C. of Newport News v. 
 
 '2 Kentucky & I. Bridge Co. v. Southern Ry., 23 I, C. C. 345. 
 
 Louisville & N. R. R., 37 Fed. 571, " New York & N. Ry. v. New 
 
 2 Int. Com. Rep. 351, 2 L. R. A. 289, York & N. E. R. R., 50 Fed. 867, 
 
 " Pennsylvania R. R. v. Hughes, 4 Int. Com. Rep. 116. 
 
 191 U. S. 477, 48 L. ed. 368, 24 Sup. '« Toledo, A. A. & N. M. Ry. v. 
 
 Ct. 132. Pennsylvania Co., 54 Fed. 746, 5 
 
 " State V. Adams Express Co., Int. Com. Rep. 545. 
 171 Ind. 138, 85 N. E. 337. 
 [812] 
 
Interchange of Traffic [ § 885 
 
 § 885. Demand for connecting service. 
 
 A carrier cannot be compelled to receive or deliver 
 traffic at a point where another company has made a new 
 connection with its roads, but has not provided proper 
 facilities.^' The provision is merely negative; it does not 
 affect either a contract or a State statute giving another 
 carrier the right to use tracks and terminal facilities.^" 
 "Terminal facilities" as used in the Act refers to facilities 
 for interchanging traffic between connecting lines. ^' At 
 the time of the passage of sections railroads were going 
 so far as to refuse to accept or deliver traffic on any terms 
 if it came by a connecting line which for some reason they 
 desired to freeze out. This the Act was intended to cor- 
 rect and did correct, whether the common law would 
 require so much or not. But the courts will not assume 
 that the independence of railroads in making such ar- 
 rangements as they pleased, short of palpable disregard 
 of their legal duties, should be destroyed by any forced 
 construction of the Act.^^ It should be noted, however, 
 that a connecting carrier without discrimination may al- 
 ways refuse to render service unless its charges are tendered 
 it or secured to it, although it does not generally insist 
 upon prepajTnent; ^' and, of course, it may refuse in taking 
 over from one connection to advance the previous charges, 
 although it does this in its dealings with other connec- 
 tions. ^^ 
 
 '» Kentucky & I. B. Co. v. Louis- ^' Little Rock & M. Ry. Co. v. 
 
 ville & N. R. R., 37 Fed. 571, 2 Int. St. Louis, I. M. & S. Ry. Co., 59 
 
 Com. Rep. 102, 2 L. R. A. 289. Fed. 400; Little Rock & M. Ry. 
 
 » Iowa V. Chicago, M. & S. P. Co. v. St. Louis S. W. Ry. Co., 63 
 
 Ry., 33 Fed. 391, appeal dismissed; Fed. 775, 27 U. S. App. 380, 26 L. 
 
 Chicago, B. & Q. R. R. v. Iowa, 145 R. A. 192, 11 C. C. A. 417, affirming 
 
 U. S. 631, 36 L. ed. 857, 12 Sup. Ct. 59 Fed. 400. 
 978. "Southern Indiana Exp. Co. v. 
 
 " Chicago F. P. C. Co. v. Chicago United States Exp. Co., 92 Fed. 
 
 & N. W. Ry., 8 I. C. C. Rep. 316. 1022, 35 C. C. A. 172; Gulf, C. & S. 
 
 " Oregon Short Line & U. N. Ry. F. Ry. Co. v. Miami S. S. Co., 86 
 
 Co. V. Northern Pacific Ry. Co., 61 Fed. 407, 52 U. S. App. 732, 30 C. 
 
 Fed. 158. C. A. 142. 
 
 [8131 
 
§ 886 ] Railroad Rate Regulation 
 
 § 886. Compulsory interchange of business. 
 
 In a recent terminal case ^'^ the Commission found that 
 the respondent company was so far committed by its 
 course of business to the furnishing of terminal facilities 
 to other railways entering the city, that it should be re- 
 garded as a pubUc terminal, open to other lines upon the 
 same conditions. The only ground, it would seem, upon 
 which this decision could be rested was that, as this com- 
 pany had taken it upon itself to furnish a terminal, its 
 facilities were at the disposal of other carriers, otherwise 
 the action of the Commission would have been in the face 
 of the explicit limitation of section 3 protecting a com- 
 mon carrier from invasion of its own facilities by another 
 carrier.^* It should be noted, however, that the Commis- 
 sion apparently felt in this case, as it has said squarely 
 since, that the provisions of section 3 of the original Act 
 have been made of less force by the Amendment^ begiiming 
 in 1906. The Commission now has power to order through 
 routes and establish through connections from any point 
 on any line under its jurisdiction to any point on any 
 other trackage subject to the Act. Its doctrine now goes 
 to the extent of holding that the public interest requires 
 that any shipper from any one system should be able to 
 get his goods properly transported at reasonable rates to 
 any point on any other system. But it should be noted 
 that even in these provisions for through service there 
 is the limitation that the originating carrier should 
 not in the route established be required to short haul 
 itself. 
 
 ^5 St. L., S. & P. R. R. V. Peoria & ^6 Morris Iron Co. v. B. & O. R. 
 P. W. Ry., 26 I. C. C. 226. Compare R. Co., 26 I. C. C. 240. Carriers 
 with these a later opinion in which should establish through routes and 
 it was said that a connecting carrier joint rates so that there may be the 
 could not demand at a switching freest movement of traffic without 
 charge merely the utilization of the the necessity of reshipment. Enter- 
 terminal trackage of a rival system, prise Fuel Co. v. Penna. Ry., 16 I. 
 Waverly Oil Wks. v. Pa. Ry., 28 C. C. 219. 
 I. C C. 621. See § 176, supra. 
 
 [814] 
 
Interchange of Traffic [ §§ 887, 888 
 
 § 887. Through arrangements once not obligatory. 
 
 At common law one public service could not be com- 
 pelled to enter into arrangements with another for con- 
 tinuous service- as a single unit for a single rate. Through 
 arrangements were left altogether to such private agree- 
 ments as the parties should negotiate. This is well ex- 
 plained in the leading case of the Atchison, Topeka & 
 Santa Fe Railroad Co. v. Denver & New Orleans Railroad " 
 where the Supreme Court squarely held that a railroad 
 might enter into through traflSc agreements with one rail- 
 road, prorating its through rate, and at the same time 
 refuse to enter into a similar agreement with another rail- 
 road traversing the same territory as the first and having 
 the same terminus. "He puts himself in no worse position, 
 by extending his route with the help of others, than he 
 would occupy if the means of transportation employed 
 were all his own. He certainly may select his own agencies 
 and his own associates for doing his own work." ^^ 
 
 § 888. Carrier might formerly select route. 
 
 It follows that, as far as legal obligation goes, the 
 carrier itself has entire control over the situation until by 
 legislation some commission has been given jurisdiction 
 to take such action as may be required, and has there- 
 upon issued orders in the exercise of the powers conferred 
 upon it. In the case of Southern Pacific Ry. v. Inter- 
 state Commerce Commission,^' the United States Supreme 
 Court held legal the policies then pursued by the Pacific 
 railroads for picking out their through connections beyond 
 their terminals as might best suit their own interests. 
 As the court clearly said in its decision: "The important 
 facts that control the situation are that the carrier need 
 not agree to carry beyond its own road, and may agree 
 upon joint through tariff rates or not, as seems best for its 
 
 ^110 U. S. 667, 28 L. ed. 291, 4 that it does with another. Samuels v. 
 
 Sup. Ct. 185. LouisviUe & N. Ry. Co., 31 Fed. 57. 
 
 ™ A carrier need not prorate with ^^ 200 U. S. 536, 50 L. ed. 585, 26 
 
 one connection upon the same terms Sup. Ct. 330. 
 
 [815] 
 
§ 889 ] Railroad Rate Regulation 
 
 own interests. Having these rights of contract the car- 
 rier may make such terms as it pleases, at least so long as 
 they are reasonable and do not otherwise violate the law."^" 
 This is, however, changed by the provisions of the recent 
 Amendments which require the through routes to be 
 named by the carrier and the shippers given their choice 
 thereof. 
 
 § 889. Present scope of the Act. 
 
 Central Stockyards v. Louisville & Nashville Railroad 
 is one of the latest cases in the United States Supreme 
 Court involving the scope of section 3. Mr. Justice Holmes 
 there cites with approval the former cases," holding that 
 the making of special arrangements for through service with 
 one connecting carrier did not of itself constitute a violation 
 of the Act. This seems to be a fundamental principle, 
 that, where there is no duty to do something for customers 
 generally, there is none to do it for a carrier applying. And 
 it should be added that, where there is no legal duty, there 
 can be no illegal discrimination. It may be noted that long 
 ago one court ^^ did apparently hold that if a railroad made 
 joint rates at proportional division with one connecting car- 
 rier, it violated the Act by insisting that another connect- 
 ing carrier must hand the goods over to be taken at the 
 local rate. But this early case was concerned largely with 
 other issues; and it may be that it goes no further than to 
 show that the local rate was too high; at all events, it has 
 been practically ignored in subsequent decisions, and it has, 
 therefore, generally been agreed by text-writers that it 
 has been for all practical purposes overruled on the point 
 for which the complainant apparently cites it. 
 
 '° The Act left the raihoads free party while refusing to do so with 
 
 as before to make such arrangements another. Gulf, C. & S. F. Ry. Co. v. 
 
 for through routing, billing, or rating Miami S. S. Co., 86 Fed. 507. 
 as they pleased without its being a ^^ 192 U. S. 568, 48 L. ed. 565, 24 
 
 refusal of equal facilities for the in- Sup. Ct. 339. 
 
 terchange of traffic to make such '^ Augusta S. Ry. v, W. & T. R. R., 
 
 through arrangements with one com- 74 Fed. 522. 
 
 [816] 
 
Intekchange of Traffic [ §§ 890, 891 
 
 § 890. Duty to deliver to connections. 
 
 In several kinds of connecting service the duty of each 
 successive party to deUver over to the next in turn is the 
 normal one. Thus a telegraph company undertakes de- 
 livery in the place of address, which in this case should be 
 at the oflGice of the telegraph company designated as the 
 connection. So, in certain kinds of carriage, as express 
 service, the carrier is bound to deliver to the addressee. 
 But the railroads and steamboats are not normally bound 
 to do more than deposit the goods carried on their own 
 wharves or at their own terminals. It is universally 
 established, however, that when connecting carriage is 
 involved the law necessarily throws upon each carrier in 
 turn the duty of tendering the goods for further transporta- 
 tion to the succeeding carrier; and normally, until he 
 effectuates such delivery, the original carrier remains 
 liable as a common carrier. ^^ This liability would usually 
 continue, as the cases just cited hold, until the first carrier 
 has deposited the goods where the second carrier actually 
 receives them, and given notice, as would generally be req- 
 uisite, to the succeeding carrier that the goods are there 
 awaiting his transportation.'* 
 
 § 891. Policy of recent legislation. 
 
 In view of the tendency to extend the power of the Com- 
 mission to force not merely through billing and joint rates 
 but through service and physical connections as shown in 
 the recent amendments to the Act, it is well worthy of 
 particular remark that the powers granted commissions 
 in this respect now go so far as to authorize the making 
 of orders as to convenient connections. It is character- 
 istic of the new appreciation of the extent of public duty 
 that the United States Supreme Court finds no difficulty 
 with these statutes. Speaking of the objection raised to the 
 
 " Lewis V. Chesapeake & Ohio " Mountain Fruit Co. v. Southern 
 
 Ry. Co., 47 W. Va. 656, 35 S. E. Pac. Ry. Co., 118 Cal. 648, 46 Pac. 
 908 068, 50 Pac. 775, 40 L. R. A. 78. 
 
 52 [ 817 ] 
 
§ 892 ] Raileoad Rate Regulation 
 
 regulation of the conduct of one public service in its re- 
 lations with another for the benefit of all concerned, that 
 court said in what seems certainly destined to be a lead- 
 ing case:'^ "This reduces itself to the contention that, 
 although the governmental power to regulate exists in the 
 interest of the public, yet it does not extend to securing to 
 the public reasonable facilities for making connection be- 
 tween different carriers. But the proposition destroys itself, 
 since at one and the same time it admits the plenary power 
 to regulate and yet virtually denies the efficiency of that 
 authority." ^^ With these policies in mind Congress has by 
 the Hepburn Act of 1906 given the Commission power to 
 compel switch connections with a lateral branch where all 
 the cpnditions were appropriate; and by the Panama Act 
 of 1912, even larger powers were given to compel the 
 physical connection of railroad trackage and water ter- 
 minals. 
 
 Topic D. Compulsory Joint Through Rating 
 
 § 892. Jurisdiction of the Commission. 
 
 By the Hepbxirn Act of 1906 the power then for the 
 first time granted to the Commission to establish through 
 routes was limited to instances in which no satisfactory 
 through route existed." Under the law since the Mann 
 Act of 1910 the existence of through routes capable of 
 adequately and expeditiously handling all traffic is entitled 
 to consideration, but no longer constitutes a bar to the 
 establishment by the Commission. The Commission has 
 power to order the establishment of a through route and 
 joint rate although there are in existence other through 
 routes capable of adequately and expeditiously handling 
 all traffic.'* The Commission will exercise its power to 
 
 '* Atlantic C. L. Ry. v. No. Car. " See Interstate Commerce Com- 
 
 Corp. Comm., 206 U. S. 1, 51 L. ed. mission v. No. Pac. Ry., 216 U. S. 
 
 933, 27 Sup. Ct. 585. 538, 30 Sup. Ct. 155. 
 
 ™ See United States v. Baltinioie '» Flour City S. S. Co. v. L. V. R. 
 
 & O. S. W., 226 U. S. 14, 33 Sup. Ct. 5. R., 24 I. C. C. 179. 
 
 [818] 
 
Intkkchange of Tkaffic [ § 893 
 
 fix joint rates whenever and only where the circumstances 
 and conditions of the case clearly warrant it. Even though 
 it be shown that a railroad is a common carrier, it may be 
 that the purposes of the Act will not be served but will 
 be defeated by the establishment of joint rates with it.'' 
 Distance is an important element in determining whether 
 routings are or would be satisfactory, and in these pro- 
 ceedings this element weighs against the establishment of 
 proposed routes.^" The provision of section 1 imposing 
 the duty of establishing through routes should not be 
 subjected to a narrow construction, but should be read in 
 connection with the latter part of section 3, in connection 
 with section 15, and with regard to the intendment of the 
 Act as a whole and the correction of the evils it has sought 
 to remedy/^ The first section gives the shipper a right 
 to a through route and a reasonable rate; but the rate 
 open to him need not be a joint rate, and the mere fact 
 that no joint rate already exists does not lay upon the 
 Commission any absolute requirement to establish one.''^ 
 
 § 893. Discretion in its exercise. 
 
 The Commission has plainly enough acted upon the 
 policy of refusing to force the establishment of new routes 
 against the desire of a carrier affected, where other routes 
 properly designed to serve the public are in existence. 
 Unless a public necessity for an additional service appears, 
 the Commission will not compel a railroad against its 
 will to enter into arrangements which the management 
 do not consider as advantageous. It has been often pointed 
 out that the Act as amended established no right which 
 it was bound to recognize in any way, but only empowered 
 the Commission to estabhsh such through rates as it felt 
 in its own discretion the necessities of the situation re- 
 
 »9 McCloud River Lumber Co. v. " Flour City S. S. Co. v. L. V. R. 
 
 S. P. Co., 24 I. C. C. 89. R., 24 I. C. C. 179. 
 
 *> United States v. U. P. R. R., 28 " Chamber of Commerce of Mil- 
 
 I. C. C. 518. waukee v. C, R. I. & P. Ry., 15 I. C. 
 
 C. 460. 
 
 [819] 
 
§ 894 ] Railroad Rate Regulation 
 
 quired.*' The law does not go to the extent of requiring 
 the Commission in all cases where no through route and 
 joint rate exists, to establish a route and fix a rate appU- 
 cable thereto, but only empowers it to do so in a proper 
 case for the purpose of giving effect to the Act.*"* The Com- 
 mission has little sympathy with, and will not ordinarily 
 lend its aid to, an effort by one road to secure traffic that 
 is reasonably tributary to another road by compelling the 
 latter to join with it in through routes and rates.*^ The 
 Commission has often declaired that the purpose of sections 
 of the Act relating to the establishment of through routes 
 and joint rates is to afford relief to a shipping community; 
 and the Commission will not aid carriers simply to acquire 
 strategic advantages in their contests with one another.*^ 
 
 § 894. Limitations upon the Commission. 
 
 Carriers should freely interchange freight between their 
 respective lines to the end that interstate commerce may 
 move without interruption or delay /^ The Commission's 
 power to require institution of through routes and joint 
 rates is predicated upon there being no reasonable or satis- 
 factory through route in existence.** There is a distinction 
 to be taken at the outset between two situations, which, 
 as the history of the jurisdiction confided to the Commis- 
 sion shows have been generally considered as very dif- 
 ferent.*' When it is simply a question of compelling a 
 carrier to enter into through arrangements for the han- 
 dling of traffic to and from points beyond the gateways 
 of its lines. Congress has now made the jurisdiction of the 
 Commission sweeping. In the case of the establishment of 
 
 " Loup Creek Colliery Co. v. V. " Flour City S. S, Co. v. L. V. R. 
 
 Ry., 12 I. C. C. 47L R., 24 I. C. C. 179. 
 
 " Barr Bros. M. Co. v. M. P. Ry., « Southern California Sugar Co. 
 
 17 I. C. C. 225. V. S. P. L. A. & S. L. R. R., 19 I. C. 
 
 « Cincinnati & C. T. Co. v. B. & C. 6. 
 
 O. S. W. R. R., 20 I. C. C. 486. ■"» Iowa State Board of R. R. Com'rs 
 
 « Chicago & M. EI. Ry. v. I. C. v. A. E. R. R., 28 I. C. C. 563. 
 R. R., 13 I. C. C. 20. 
 [820] 
 
Interchange of Traffic [ § 895 
 
 extensions of existing lines by this process of establishing 
 through routes, it is left to the discretion of the Commis- 
 sion to determine whether there is sufficient pubhc neces- 
 sity to call for action.^" But where it is a question of 
 establishing new routes reaching within the territory 
 naturally served by a transportation system, Congress has 
 had the sound theory that the existing business which the 
 system is competent to handle should not be diverted from 
 its own lines by compelling it to enter into new connections 
 at points within its territory, if the routes which it has 
 established are practicable ones." Thus a trunk line car- 
 rier which purchases a branch line road is justified in 
 canceling through joint rates with another carrier when 
 such cancellation will tend to move traffic entirely over its 
 own line under reasonable and non-discriminatory rates 
 to the exclusion of the former two-line haul.^^ 
 
 § 896. The policies involved therein. 
 
 The statute provides that, in establishing joint rates 
 and through routes, each carrier against which the order 
 is made shall be given the benefit of the long haul by its 
 own line. The Commission has said repeatedly that it 
 cannot, therefore, establish in every case, where it might 
 otherwise be inclined to act, a through route and a joint 
 rate, but must work under the limitation imposed by the 
 Act of Congress as above set forth. ^' The Commission 
 cannot order a railroad to embrace substantially less than 
 entire length of its railroad in a through route.''' Defend- 
 ants have right to hold traffic to their own lines so long, 
 but only so long, as in so doing they do not encroach upon 
 the rights of the pubUc.^^ The Commission, with the 
 
 ^ McCullough V. L. & N. R. R., Unreasonable Rates on .Meats, 23 
 
 25 I. C. C. 48. I. C. C. 658. 
 
 " Re Advance in Class & Com- " Davis Bros. Lumber Co., Ltd., 
 
 modity Rates, 23 I. C. C. 263. v. C, R. I. & P. Ry., 26 L C. C. 257. 
 
 " In re Proposed Rate on Lumber, ^'^ Aransas Pass Channel & Dock 
 
 20 L C. C. 575. Co. v. G. H. & S. A. Ry., 27 L C. C. 
 
 " See Investigation of Alleged 403. 
 
 [821] 
 
§ 896 ] Railroad Rate Regulation 
 
 qualifications which are being discussed, recognizes the 
 right of a carrier to retain tonnage to its line; '''' and the 
 long haul is generally conceded to the originating line/^ 
 Thus lumber is held to rails of carriers transporting logs 
 from forests by transit arrangements. =* And generally 
 speaking, if a sufficient and fairly satisfactory through 
 route between points does not exist, another route will 
 not be compelled/* - But in order to build up enterprises 
 of the same character on its own line and to prevent the 
 trade of its local industries from being displaced by the 
 competition of manufacturers of the same commodities 
 on connecting lines, a carrier cannot deny to industries on 
 the lines of such connections the benefit of through routes 
 and joint rates.^" 
 
 § 896. Protection from short hauling. 
 
 Under the Act as amended in 1910 the Commission can- 
 not require any company without its consent to embrace in 
 a through route substantially less than the entire length of 
 its railroad, unless to do so would make such through route 
 unreasonably long as compared with another practicable 
 through route, which could otherwise be established." In 
 the formation of through routes a carrier has a right to 
 protect its own long haul and a carrier may not be required 
 against its will to participate in a through route between 
 any two points which does not include all or substantially 
 all of its line or lines between those points, except when 
 an unreasonably long or circuitous route would otherwise 
 be created."^ Joint rate and through route was recently 
 
 ^ Suffern Grain Co. v. I. C. R. R., ™ Cardiff Coal Co. v. Chicago, 
 
 27 I. C. C. 192. M. & St. P. R. R., 11 I. C. C. 
 
 " Salt Rates from Wisconsin to 460. 
 
 Iowa, 27 I. C. C. 526. "' Commercial Club of Superior 
 
 iis Lumber Rates from Memphis v. B. N. Ry., 24 I. C. C. 96. 
 
 and other Points to New Orleans, *^ Chamber of Commerce of New 
 
 27 I. C. C. 471. York v. N. Y. C. & H. R. R., 24 I. 
 
 '' Blakely So. R. R. v. A. C. C. C. C. 55. 
 Ry., 26 I. C. C. 344. 
 [822] 
 
Interchange of Traffic [ § 897 
 
 denied because the carrier would have to participate in 
 traffic embracing substantially less than the entire length 
 of its line.^^ Under the provisions of the Act requiring 
 the Commission in establishing joint rates to give the 
 carriers the benefit of the long haul, it was held in another 
 late case to be doubtful whether the Commission could 
 establish a joint through rate, thereby depriving the New 
 York Central of the longer haul on this business, either 
 rail-and-lake or all rail.^^ And a carrier was permitted to 
 give up a through route voluntarily maintained for four 
 years which embraced substantially less than the entire 
 length of its railroad.^^ In establishing any through route 
 no railroad should be required to haul traffic over less than 
 the entire length of its line unless such route is unduly cir- 
 cuitous.*^ Distance is an important element in determining 
 whether a routing is satisfactory, since a circuitous route 
 involving a longer haul and therefore greater delay would 
 not be, ordinarily, as desirable as a direct one.*' But a 
 route satisfactory to one kind of freight might not be 
 satisfactory with respect to another.*^ 
 
 § 897. What routes considered circuitous. 
 
 Section 15 merely ordains that between two given points 
 a carrier shall not be deprived of a haul which it is ca- 
 pable of providing by a reasonably direct route.*' A line 
 153 miles longer is circuitous where it exceeds the short 
 line by 15 per cent or more.™ A petition to estabUsh a 
 through route 100 per cent longer was recently dismissed.'^' 
 A route only 4 per cent longer than the short line is 
 
 "United States v. U. P. R. R., " In Re Through Passenger Routes, 
 
 28 I. C. C. 518. 16 I. C. C. 300. 
 
 0' Southwestern Shippers' Traffic «» Waverly Oil Works v. P. R. R., 
 
 Ass'n V. A., T. & S. F. Ry., 24 I. 28 I. C. C. 621. 
 C. C. 570. *' Meridian Fertilizer Factory v. 
 
 " Rates on Cottonseed and its T. & P. Ry., 26 I. C. C. 351. 
 Products, 28 I. C. C. 219. ™ Edwards & Bradford Lumber Co. 
 
 «« Pacific Coast Lumber M'frs v. C, B. & Q. R. R., 25 I. C. C. 93. 
 Ass'n V. N. P. Ry., 14 I. C. C. "Haverhill Box Board Co. v. 
 
 51. B. & A. R. R., 28 I. C. C. 336. 
 
 [ 823 ] 
 
§ 898 ] Railroad Rate Regulation 
 
 not markedly circuitous." In one case '^ it was said con- 
 clusively that not only was the route via Memphis to the 
 Ohio River practicable, but it includes an average haul 
 of 319 miles over the hnes of the Rock Island, as against 
 an average haul over the Rock Island of only 18.5 miles 
 via the Ruston route. It is scarcely to be expected, said 
 the Commission, in a late case involving a New Eng- 
 land system,'^ that a carrier that may have a haul of 120 
 miles would be satisfied with a haul of but 6 miles with 
 the meager earnings accruing under its estabhshed divisions. 
 Nor is it reasonable even for a shipper to demand that a 
 carrier should be so short hauled, except upon a clear 
 showing that the service over ■ the other route was not 
 satisfactorily maintained and reasonably prompt. 
 
 § 898. Power of the Commission to fix divisions. 
 
 In fixing a division between carriers of joint rates ordered 
 to be established, section 15 of the Act implies that it is 
 the duty of the Commission to take into consideration all 
 the circumstances and equities fairly affecting their several 
 interests, and precludes the idea that the divisions must be 
 adjusted on a mileage or any other fixed basis.'^ The fact 
 that carriers, by whom a rate has been lawfully published 
 and advertised to the shipping world as the cost between 
 two given points over all reasonably available routes, have 
 neglected or failed to agree upon divisions of the rate 
 over one of the routes, cannot be accepted by the Com- 
 mission as equivalent to a nullification of the published 
 through rate over that route.''^ And, generally speaking, 
 mere failure to agree upon divisions of joint rates, which 
 rates are admitted to be reasonable, will not be accepted 
 as justification for an increase." Shippers should not suffer 
 
 " Bowling Green Business Men v. '^ Star Grain & Lumber Co. v. 
 
 L. & N. R. R., 24 I. C. C. 228. A., T. & S. P. Ry., 14 I. C. C. 364. 
 
 " Davis Bros. Lumber Co. v. C, R. ™ Germain Co. v. N. O. & N. E. 
 
 I. & P. Ry., 26 I. C. C. 258. R. R., 17 I. C. C. 22. 
 
 '* Advances in Rates from Chico- " New Mexico Coal Rates, 28 I. 
 
 pee, 23 I. C. C. 263. C. C. 328; Chicago Lighterage 
 [824] 
 
Intebchange of Traffic [ § 899 
 
 because of delay on the part of defendants in agreeing on 
 proper divisions, and in publishing the lower rate.'* If 
 defendants are unable to agree upon the manner of con- 
 structing the rates herein ordered, or upon the divisions of 
 such rates, the Commission will enter such supplementary 
 order as may be necessary J' But, in first instance, how a 
 joint through rate shall be divided is a matter of agree- 
 ment and bargain between the carriers.*" The doctrine of 
 the Commission is that shippers have no interest in the 
 division of a rate.*^ The shipper pays for complete service, 
 and has no concern as to how through charges are divided 
 among carriers.*^ 
 
 § 899. How divisions are determined. 
 
 The Commission has many times expressed the view that 
 the division received by a carrier as its share of a joint 
 rate is not conclusive evidence of the unreasonableness 
 of the joint rate involved.*' Where divisions are determined 
 by highly competitive conditions, they throw no light on 
 the reasonableness of joint rates.** If local or individual 
 rates were to be measured by divisions of through rates it 
 would lead to a continuous process of hammering down 
 local rates or withdrawal by carriers from such through 
 routes as yield only a small profit.*" Divisions of through 
 rate furnish no just or fair criterion by which to measure 
 intermediate local rates on the same line of transportation.*^ 
 Divisions of joint rates are ordinarily not published and 
 
 Charges, 28 I. C. C. 390; Oklahoma C. C. 43; M'frs & Merchants' Ass'n 
 
 Grain Rates, 28 I. C. C. 462; Kansas v. A. & A. R. R., 24 I. C. C. 331. 
 
 City & M. Ry. Co. Rate Cancella- *^ Interior Iowa Cities Case, 28 
 
 tion, 28 I. C. C. 640.' I. C. C. 64. 
 
 ™Williamette Pulp & Paper Co. ''Wichita Board of Trade v. A., 
 
 V. N. P. Ry., 18 I. C. C. 388. T. & S. F. Ry., 25 I. C. C. 625. 
 
 ™ Farmers' Co-operative and Edu- " Wichita Board of Trade v. A., 
 
 cational Union v. G. N. Ry., 17 T. & S. F. Ry., 25 I. C. C. 625. 
 
 I. C. C. 406. '' Id., 26 I. C. C. 146. 
 
 *° In re Advances on Barley, 24 ^ Board of Trade of Winston- 
 
 I. C. C. 664. Salem v. N, & W. Ry., 16 I. C. C. 
 
 *' In TP Advances on Coal, 24 I. 12. 
 
 [825] 
 
§ 900 ] Railroad Rate Regulation 
 
 are subject to change by mutual agreement of carriers.*' 
 A proportional rate is not to be compared with a local 
 rate to show a violation of section 4.** The divisions of a 
 joint through rate accepted by a carrier cannot be taken 
 as the measure of the reasonableness of its separately 
 established rates.'^ The Commission can always require 
 filing of divisions, and a joint rate under agreed divisions 
 definitely fixes lawful earnings of parties to that rate.'" 
 The Commission may look at the several factors in an 
 effort to locate unreasonableness in total charge.*^ 
 
 § 900. Theories of basing divisions. 
 
 It is generally true that a carrier may reasonably accept 
 less than its local rate as its division of a joint rate.'^ In 
 arranging the divisions among the connecting carriers due 
 consideration should be given by the connecting carrier 
 to the surrender by the originating carrier of its right 
 to retain possession of the shipment for the longest possible 
 haul over its own lines, and the division should be agreed 
 upon which will compensate the originating carrier for its 
 sacrifice.'^ The fact that the system in question reaches 
 other primary grain markets may fairly be said to give it 
 certain equities in the adjustment of the divisions of any 
 through rates that it may establish under an order of the 
 Commission.'* The line performing the terminal service 
 is entitled to a greater division than the line relieved of 
 such service.'^ Divisions accruing to more distant common 
 or basing points may be accepted as rates to noncompeti- 
 
 *' In re Restricted Rates, 20 I. C. "^ Sandstone, Minn.-Missouri River 
 
 C. R. 426. Building Stone Rates, 28 I. C. C. 
 
 «8 In re Lumber Rates, 25 I. C. C. 269. 
 
 50. »' In re Express Rates, 24 I. C. C. 
 
 8» Acme Cement Plaster Co. v. L. 380. 
 
 S. & M. S. Ry., 17 I. C. C. 30; Mana- »* Chamber of Commerce of Mil- 
 
 han V. N. P. Ry., 17 I. C. C. 95. waukee v. C, R. I. & P. Ry., 15 I. 
 
 » In re Restricted Rates, 20 1. C. C. C. C. 460. 
 
 R. 426. '' Waverly Oil Works v. P. R. R., 
 
 " People's Fuel & S. Co. v. G. T. 28 I. C. C. 621. 
 W. Ry., 27 I. C. C. 24. 
 
 [826] 
 
Interchange of Traffic [ § 901 
 
 tive points."" Divisions in the interior are based on sum 
 of intermediates, but earnings on traffic are not divided 
 east and west of rivers on any such basis, the proportional 
 rate from river crossing to interior point being usually 
 higher than local rate from river to that point." The 
 rail carrier's division of joint through rail-and-water rate 
 may well be lower than its just local charges; but if 
 steamships are content to take materially less than at 
 present for their division, that is a substantial reason for 
 reducing the total through charge.'* For example, on rail- 
 and-water haul from New York via Galveston to Wichita, 
 the rail carrier with a rail mileage of 700 miles was given 
 to two-thirds of the net amount for division, while the 
 water carrier with a water mileage of slightly less than 
 2,200 miles would be entitled to one-third.'' 
 
 § 901. Constructive mileage. 
 
 In the adjustment of interline accounts between car- 
 riers an expensive bridge is ordinarily considered as having 
 constructive mileage, and the division of joint rates made 
 upon that basis. ^ In the division of rates between rail and 
 water carriers, one land mile is constructively reckoned as 
 equivalent to two nautical miles north of Cape Hatteras, 
 while to the south of the Cape one land mile is equal to 
 three nautical miles. ^ An arbitrary basis of divisions 
 ignores differences in length of haul; mileage prorate basis 
 of divisions divides earnings according to service per- 
 formed.' But certain carriers may be situated so as to 
 command a liberal allowance from its connections in 
 divisions of through rates. ^ Comparisons of divisions re- 
 's Id., 28 I. C. C. 178. ' Norman Lumber Co. v. L. & 
 " Interior Iowa Cities Case, 28 N. R. R., 22 I. C. C. R. 239. 
 I. C. C. 64. ^ South Atlantic Waste Co. v. 
 
 « Southwestern Shippers' Traffic S. Ry., 22 I. C. C. R. 293. 
 Ass'n V. A., T. & S. F. Ry., 24 I. C. = Stacy & Sons v. O. S. L. R. R., 
 
 C. 570. 20 I. C. C. R. 136. 
 
 " Southwestern Shippers' Traffic ' Board of Trade of Winston- 
 
 Ass'n V. A., T. & S. F. Ry., 24 I. C. Salem v. N. & \V. Ry., 20 I. C. C. 
 C. 570. 146. 
 
 [827] 
 
§ 901 ] Railroad Rate Regulation 
 
 ceived by carriers may be considered in connection with 
 other evidence in determining the reasonableness of a 
 particular rate.^ But it must be realized that a carrier 
 may deem it good business policy to secure a part of a 
 through haul on a large volume of traflnic and to accept 
 a division of the through rate which is much lower than 
 local rates.* And also some rates may be under necessity 
 of accepting abnormally low divisions in order to partici- 
 pate in traffic.^ On the other hand, a carrier may be 
 situated with reference to points of supply and demand, 
 or otherwise, so that it is in a position to command a 
 liberal allowance from its connections in divisions of through 
 rates. 
 
 ' Lindsay Bros. v.L.S.&M.Ry., ' Board of Trade of Winston- 
 
 22 I. C. C. R. 516. Salem v. N. & W. Ry., 26 I. C. C. 
 
 «New Pittsburs Coal Co. v. H. 146. 
 V. Co., 26 I. C. C. 121. 
 
 [828] 
 
CHAPTER XIX 
 
 EQUALITY OF SERVICE 
 
 i 910. Provisions of the Act. 
 911. Extension of service facilities. 
 
 Topic A. Duty lo Render Service 
 
 J 912. General obligation to serve all. 
 
 913. Extent of federal supervision. 
 
 914. Rulings of the Commission. 
 
 915. Different treatment constitutes discrimination. 
 916 Scope of present jurisdiction. 
 
 917. Freight embargo as an excuse. 
 
 918. Carrier discriminating against its rivals. 
 
 919. Railroad cutting its own rates for itself. 
 
 Topic B. Provision oj Reasonable FacilUies 
 
 ! 920. Not required by original Act. 
 
 921. Orders concerning freight delivery. 
 
 922. Contracts with grain elevators. 
 
 923. Arrangements with stockyards. 
 
 924. Service at private sidings. 
 
 925. InstaUing switches now under the Act. 
 926 Basis for ordering switch connection. 
 
 927. Any discriminatory treatment forbidden. 
 
 928. Establishment of stations. 
 
 929. Protection of its terminals. 
 
 Topic C. Supply of Equipment ■ 
 
 ( 930. Basis of the duty to supply equipment. 
 
 931. Commission jurisdiction over facilities. 
 
 932. TRe obligation treated reasonably. 
 
 933. Provision of special equipment. 
 
 934. Demand foreseen although unusual. 
 
 935. Reasonable time to increase facilities. 
 
 936. Carriage through in same car. 
 
 937. Provision of cars in through service. 
 
 Topic D. Distribution of Equipment 
 
 I 938. Discrimination in use of cars. 
 
 939. Jurisdiction of the Commission. 
 
 940. Order of preference between shippers. 
 
 [829] 
 
§ 910 ] Railroad Rate Regulation 
 
 § 941. Where no preference justifiable. 
 
 942. Basis of prorating cars. 
 
 943. Respective requirements compared. 
 
 944. Cars needed by railroads. 
 
 945. Private facilities considered in the apportionment. 
 
 § 910. Provisions of the Act. 
 
 No provisions giving the Commission jurisdiction to 
 order the rendering of service as such were in the original 
 Act ; the beginning of these powers was in the 1906 amend- 
 ments. According to a fundamental clause now inserted 
 in section 1 it is provided that the jurisdiction of the 
 Commission over railroads shall include all bridges and 
 ferries, and shall also include switches and spurs, tracks 
 and terminal facilities and freight depots, and train yards 
 and station grounds and railway trackage, whether owned 
 outright or operated under agreement. The Act defines 
 transportation as including cars and other vehicles and all 
 instrumentalities and facilities of shipment or carriage, 
 irrespective of ownership or of any contract, and all services 
 in connection with the receipt, delivery, elevation, and 
 transfer in transit, ventilation, refrigeration or icing, stor- 
 age, and handling of property transported. By express 
 provision of the Act as amended it is made the duty of 
 every carrier subject to the jurisdiction of the Commission 
 to provide and furnish such transportation upon reasonable 
 request therefor, and to establish through routes and just 
 and reasonable rates applicable thereto; and to provide 
 reasonable facilities for operating such through routes and 
 to make reasonable rules and regulations with respect 
 to the exchange, interchange, and return of cars used 
 therein, and for the operation of such through routes, and 
 providing for reasonable compensation to those entitled 
 thereto. Furthermore, by section 15, as has been said, the 
 Commission has full power over the provision of such 
 facilities and the charges for such services by the carrier 
 and over the scheduling thereof and allowances therefor 
 when not performed by the carrier itself; and in the case of 
 [830] 
 
Equality of Service [§§911, 912 
 
 through service the determining of the route which shall 
 be offered, and the divisions between the carriers of the 
 joint rate. 
 
 § 911. Extension of service facilities. 
 
 Later in section 1 it is provided that the Commission 
 shall have jurisdiction to compel any common carrier 
 subject to the provisions of the Act, upon appUcation of 
 any lateral, branch line of railroad, or of any shipper 
 tendering interstate traffic for transportation, to construct, 
 maintain, and operate upon reasonable terms a switch 
 connection with any such lateral, branch line of railroad, or 
 private side track which may be constructed to connect 
 with its railroad, where such connection is reasonably 
 practicable and can be put in with safety and will furnish 
 sufficient business to justify the construction and mainte- 
 nance of the same; and shall furnish cars for the move- 
 ment of such traffic to the best of its ability without 
 discrimination in favor of or against any such shipper, pro- 
 vided that this shall not apply to passenger railways not 
 committed to carrying freight. It should be added that by 
 section 8 as recently amended by the Panama Act the 
 Commission has special powers to compel the construction 
 and maintenance of physical connections between rail fines 
 and steamship docks on substantially the same terms as to 
 practicability of construction and probability of profit, the 
 Commission having power to order the extension of rail- 
 road trackage to serve water terminals, or to order the 
 connection of railway trackage of water terminals with the 
 railroad systems serving the port, on such terms as to 
 respective payments by the parties involved in the con- 
 necting service as to it may seem proper. 
 
 Topic A. Duty to Render Service 
 
 § 912. General obligation to serve all. 
 
 One who is engaged in pubfic caUing must by virtue of 
 his pubfic duty serve many whom he is very unwilling to 
 
 [831] 
 
§ 913 ] Railroad Rate Regulation 
 
 serve, for one reason or another. A company cannot 
 capriciously discriminate between passengers on account 
 of their nativity, color, race, social position, or their 
 political or religious beliefs. Whatever discriminations are 
 made must be on some principle, or for some reason, that 
 the law recognizes as just and equitable, and founded in 
 good public policy. What are reasonable rules is a ques- 
 tion of law, and is for the court to determine, under all the 
 circumstances in each particular case. It is fundamental 
 with the Commission that every carrier owes a duty to the 
 entire public, and each owes a particular duty to persons 
 and communities which it directly serves and which are 
 dependent upon it.^^ As the Commission has said com- 
 prehensively, equality between great and small is one of 
 the underlying principles of the Act.^^ 
 
 § 913. Extent of federal supervision. 
 
 A common carrier in interstate commerce is free to 
 exercise all its rights under the common law to the full 
 extent, unless such exercise has been made unlawful by 
 the Act.^^ Many of the older court decisions, it should be 
 noted, were rendered prior to the amendments to the Act, 
 making it the duty of the carrier to provide transportation 
 and to furnish facilities therefor under the supervision and 
 direction of the Commission. Any regulation or practice 
 that withdraws from a shipper the equal opportunity of 
 taking advantage of the rates offered by a carrier, is held to 
 be a regulation or practice, "affecting rates," within the 
 meaning of that phrase as used in section 15.^'' But it is 
 well settled that carriers have the right to transport certain 
 commodities under reasonable rules and regulations respect- 
 ing their receipt, carriage and delivery. ^^ And in general it 
 
 " See Advance in Rates Cases of ^^ McElvain v. Railroad, 151 Mo. 
 
 1910, 20 I. C. C. 243. App. 126, 151, 131 S. W. 736. 
 
 " Harbor City Wholesale Co. of " gt. l., S. & P. R. R. v. P. & P. 
 
 San Pedro v. S. P. Co., 19 I. C. C. U. Ry., 26 I. C. C. 226. 
 323. '' Rail & River Coal Co. v. B. & 
 
 O. R. R., 14 I. C. C. 86. 
 
 [ 832 ] 
 
Equality of Service [ §§ 914, 915 
 
 may be said that the control of service is by degrees 
 coming under the jurisdiction of the Commission by a 
 course of extension by amendments to the Act quite 
 parallel to the history of the development of the powers of 
 the Commission over rates. ^"^ 
 
 § 914. Rulings of the Commission. 
 
 It is the right of a carrier to decline to receive for trans- 
 portation any merchandise not plainly marked. ^^ Inferior, in- 
 secure tags may be prohibited ; but no justification was found 
 for a rule which required metal eyelets at an additional ex- 
 pense of 15 cents per 100. That certain perishable freight 
 should at times be refused for sufficient reason — as be- 
 cause of risk — has seemed reasonable; but the Coimnission 
 is not convinced of the reasonableness of refusing to 
 receive green hides when carriers have the right, under 
 tariff provisions, to delay shipment for suitable equip- 
 ment.^^ Packages containing fragile articles consisting 
 wholly or in part of, or contained in glass, must be plainly 
 marked to indicate contents. And in the revision of the 
 practices of the express companies, it was recognized that 
 the rules might be positive on the requirement of safe 
 packing.^' But a rule has been condemned which provided 
 for higher rate on packages not properly marked. ^° The law 
 requires carriers to observe and enforce reasonable regular 
 tions and practices affecting the receipt, handling, transport- 
 ing, and dehvery of property. 
 
 § 915. Different treatment constitutes discrimination. 
 
 It is apparently established beyond question as to com- 
 mon carriers that as no one has a right to have service 
 without prepayment there could be no complaint made if 
 some are given service without requiring prepayment of 
 
 'is National Petroleum Ass'n v. ^s Western Classification Case, 25 
 
 L. & N. R. R., 15 I. C. C. 473. I. C. C. 442. 
 
 "Ellsworth Produce Co. v. U. s' In re Express Rates, 241. C.C. 380. 
 
 P. R. R., 17 I. C. C. 182. '" C. H. Algert Co. v. D. & R., 18 I. 
 
 C. C. 21. 
 
 53 [ 833 ] 
 
§ 916 ] Railroad Rate Regulation 
 
 them, while others are obliged to pay in advance." The 
 cases go far in holding a carrier not liable for demand- 
 ing prepayment of freight for goods addressed to certain 
 consignees while accepting goods addressed to other con- 
 signees without prepayment.'^ It is a carrier's right to 
 demand prepayment on all shipments; but it may not 
 distinguish in the rates charged between persons who pay 
 in advance and those who do not.'' It may be provided 
 by a rule that a shipper who refuses to furnish a return 
 address should be required to prepay express charges.'^ 
 And a rule of the carrier that no cars would be received 
 from connecting lines for switching unless all freight 
 charges were prepaid was not condemned."' While car- 
 riers may provide by definite tariff provisions free from 
 undue discrimination, for the advancement of storage or 
 transfer charge, the Conmiission is without authority to 
 compel them to do so.'* 
 
 § 916. Scope of present jurisdiction. 
 
 The power over service is often of even greater impor- 
 tance than the rate itself. But the Conunission has said 
 very recently that, generally speaking, it has no power 
 whatever to order a railroad to operate its trains in ways 
 
 '1 Randall v. Railroad, 108 N. C. which the carrier delivers freight to 
 
 612, 13 S. E. 137; Brown & B. Coal the consignee directly, and without 
 
 Co. V. Grand Trunk Ry. Co., 159 the intervention of a local agent, 
 
 Mich. 565, 124 N. W. 528. and to which consequently consign- 
 Consequently a carrier may take ments are accepted only upon the 
 
 goods from one connecting carrier condition of charges for transporta- 
 
 with which it is closely allied, not tion being prepaid by the shipper. 
 
 only not demanding its charges in Bird v. Railroads, 99 Tenn. 719, 63 
 
 advance, but also advancing to the Am. St. Rep. 856. 
 
 preceding carrier the accrued charges '' Boise Commercial Club v. 
 
 while refusing both favors to a rival Adams Express Co., 17 I. C. C.^ 
 
 connection. Southern Indiana Exp. 115. 
 
 Co. V. United States Exp. Co., 92 " In re Express Rates, 24 I. C. C. 
 
 Fed. 1022, 35 C. C. A. 172. 380. 
 
 '^ Gamble-Robinson Commission '* HoDingshead & Co. v. P. Co., 
 
 Co. V. Chicago & N. W. Ry., 168 25 I. C. C. 38. 
 
 Fed. 161, 94 C. C. A. 217. »= Western Classification Case, 25 
 
 There may be prepay stations at I. C. C. 442. 
 
 [834] 
 
Equality of See vice I § 917 
 
 it might feel to be in the interest of the public or to 
 maintain its property as it might feel would be conducive 
 to the safety of its patrons." And in another late case, it 
 disclaimed any power of a general character to compel the 
 performance of service to the extent of ordering an express 
 concern which had sold out to resume business.'^ On the 
 other hand, whatever service is established by the carrier 
 must be duly performed in accordance with the undertak- 
 ing. A carrier under the Act as amended may not lawfully 
 refuse transportation as therein defined, but must, upon 
 reasonable request, afford the same upon established rates 
 filed and kept posted as required by law.^" When the rules 
 put upon the shipper the risk of damage from freezing, the 
 Commission has said ^° that there is no occasion for a further 
 rule permitting the carrier to refuse a shipment altogether. ^^ 
 
 § 917. Freight embargo as an excuse. 
 
 An embargo may be justifiable because of the physical 
 inability of the carrier for some reason to deal with traffic 
 which is overwhelming it; but an embargo placed against 
 connecting carriers because of their failure to promptly 
 return cars is not consonant with the service which carriers 
 constituting through routes are required by law to give.*^ 
 It may be laid down as a general rule, admitting of no 
 qualification, that a manufacturer or merchant, who has 
 traffic to move and is ready to pay a reasonable rate for 
 the service, has the right to have it moved, and to have 
 reasonable rates established for the movement, regardless 
 of the fact that the revenues of the carrier may be reduced 
 
 " New England Investigation, 27 the discontinuance of a train. I. C. 
 
 I. C. C. 560. C. Conference Ruling No. 296. 
 
 The Commission has no power to '' Waxelbaum & Co. v. A. C. L. 
 
 take action upon a complaint that R. R., 12 I. C. C. 178. 
 
 an insufficient number of trains are " Protection of Potato Shipments 
 
 run. I. C. C. Conference Ruling in Winter, 28 I. C. C. 681. 
 
 No. 296. " Dubuque Shippers' Ass'n v. 
 
 »» Douglass Shoe Co. v. Adams C. & N. W. Ry., 26 I. C. C. 565. 
 
 Express Co., 19 I. C. C. 539. " Missouri & Illinois Coal Co. v. 
 
 The Commission cannot prevent I. C. R. R., 22 I. C. C. 39. 
 
 [835] 
 
§ 918 ] Railroad Rate Regulation 
 
 by reason of his competition with other shippers in the 
 distant markets; and he has the right also to have the 
 benefit of through routes and reasonable joint rates to 
 such distant markets if no "reasonable or satisfactory" 
 through routes already exist/^ If, when the line is blocked 
 by freight, the carrier forwards first those goods which are 
 most necessary to the public, it can hardly be said that 
 the carrier is not performing its public duty; thus it is not 
 improper that livestock, perishable freights, and material 
 or supplies for the railroad should be excepted from any 
 embargo imposed. ^^ If during a famine period in supply- 
 ing the necessities of life a railroad is not able to supply 
 cars for its other traffic, it will be considered that no un- 
 just discrimination is shown. ^'^ 
 
 § 918. Carriers discriminating against its rivals. 
 
 Although there was formerly much doubt it is now held 
 that jobbers are shippers; and that every shipper is en- 
 titled to reasonable rates, but the right of a middleman as 
 such to complain of a blanket rate has been questioned by 
 the Commission in a recent proceeding. ^^ It is all a 
 question of getting at the true intent of the legislative 
 provisions by proper interpretation; and the courts have 
 recently held " that forwarders collecting goods of others 
 were as much within the Act as other shippers, and could 
 not be refused carload rates enjoyed by others.^ An 
 analogous case would be if one railroad should make ap- 
 plication to another railroad inimical to it to forward some 
 materials to an intersecting point. It is submitted that 
 it is the clear duty of the railroad to which this apphcation 
 is made to accept the shipment, although it might benefit 
 
 " Cardiff Coal Co. v. Chicago W. v. C, B. & Q. R. R., 19 I. C. C. 
 
 & S. P. R., 11 I. C. C. 460. 71. 
 
 ^^ U. S. Daish & Sons v. C. A. & " Interstate Commerce Commis- 
 
 C. Ry., 9 I. C. C. 513. sion v. D. L. & W. Ry., 220 U. S. 235, 
 " Wagner, Zagelmeyer & Co. v. 31 Sup. Ct. 392. 
 
 D. & M. Co., 13 I. C. C. 160. «» See Lunquist v. Grand Trunk 
 *" Billings Chamber of Commerce Ry., 121 Fed. 115. 
 
 [836] 
 
Equality of Service [ § 919 
 
 much this road to which the apphcation is made to cripple 
 its rival by refusing to transport the supplies. ""^ A carrier 
 must accede to every proper application for service, al- 
 though it might be more profitable to promote its owai 
 interests by imposing conditions, or even by refusing alto- 
 gether."" 
 
 § 919. Railroad cutting its own rates for itself. 
 
 This development which is going on in the law was 
 brought to the attention of all some years ago by a striking 
 decision handed down by the United States Supreme Court 
 in regard to the coal roads — New York, New Haven & 
 Hartford Railroad v. Interstate Commerce Commission.'*^ 
 The complaint in that case was filed by the attorney- 
 general under the provisions of the Interstate Commerce 
 Act, which forbid personal discrimination, charging that 
 traffic was being moved at less than the published rates. 
 It was shown that the Chesapeake and Ohio Railroad had 
 sold to the New York, New Haven and Hartford Railroad 
 sixty thousand tons of coal to be dehvered to the buyer at 
 $2.75 per ton; and it was averred that the price of the coal 
 at the mines where the Chesapeake and Ohio bought it and 
 the cost of transportation from Newport News to Con- 
 necticut would aggregate $2.47 per ton, thus leaving to the 
 Chesapeake and Ohio only about twenty-eight cents a ton 
 for carrying the coal from the Kanawha district to New- 
 port News, whilst the pubUshed tariff for like carriage from 
 the same district was $1.45 per ton. Upon these facts the 
 United States Supreme Court decided that there was 
 in effect the evil of personal discrmiination against other 
 shippers in this arrangement; and the final decree, there- 
 fore, was that the Chesapeake and Ohio was perpetually en- 
 joined from taking less than its published tariff of freight 
 rates, by means of dealing in the purchase and sale of coal.'*^ 
 
 "Rogers Locomotive & Machine si 200 U. S. 361, 26 Sup. Ct. 273. 
 
 W. V. Erie R. R., 20 N. J. Eq. 379. ^^ Whether express companies are 
 
 ™ See Johnson v. Dominion Exp. discriminating in favor of themselves 
 
 Co., 28 Ontario Rep. 203. in transporting money. American 
 
 [837] 
 
§§ 920, 921 ] Railroad Rate Regulation 
 
 Topic B. Provision of Reasonable Facilities 
 
 § 920. Not required by original Act. 
 
 The original Interstate Commerce Act did not require or 
 give the Commission power to require that carriers should 
 furnish reasonable facilities; though it did forbid any dis- 
 crimination in furnishing facilities. The common law re- 
 quired the furnishing of such facilities; but since the Act 
 was silent, the Commission could not require a carrier to 
 furnish cars.''' Nor could it require a railroad to furnish 
 refrigerator cars for the carriage of fruit. "^ So it would not 
 order a railroad to deliver carload freight in bulk to a 
 connecting road.^'^ Nor was a railroad under the Act 
 obliged to allow a steamboat access to its wharf. ^^ In the 
 same way under the original Act a railroad was not bound 
 to provide and maintain a spur track to the premises of a 
 shipper." And carriers were allowed to make their time- 
 tables and train service without dictation.^* 
 
 § 921. Orders concerning freight delivery. 
 
 Although railroad service does not commonly con- 
 template delivery to the premises of the consignee by 
 wagon, if the custom has prevailed the Commission will 
 now order store delivery under its present powers.^' But 
 carriers were not required to resume delivery of melons at 
 a certain pier in New York, conditions justifying a 
 change of the place of delivery from New York to Jersey 
 
 Bankers' Ass'n v. American Express gon S. L. & U. N. Ry., 57 Fed. 673, 
 
 Co., 15 1. C. C. 15. 6 C. C. A. 495, 5 Int. Com. Rep. 
 
 « Scofield V. Lake Shore & M. S. 627. 
 
 Ry., 2 Int. Com. Rep. 67, 2 I. C. C. " Mt. Vernon MiUing Co. v. 
 
 90; Rice v. Cincinnati, W. & B. R. Chicago, M. & S. P. Ry., 7 I. C. C. 
 
 R., 3 Int. Com. Rep. 841, 5 I. C. C. Rep. 194; Red Rock Fuel Co. v. 
 
 193. Baltimore & O. R. R., 11 I. C. C. 
 
 " Re Transportation & Refrigera- Rep. 438. 
 
 tion of Fruit, 10 I. C. C. Rep. *' Loch Lynn Construction Co. 
 
 360. V. Baltimore & O. R. R., 17 I. C. C. 
 
 '' Railroad Comrs. v. Louisville 396. 
 
 &N. R.R., lOI.C.C.Rep. 173. '» Wholesale Fruit & P. Ass'n v. 
 
 ''" Ilwaco Ry. & Nav. Co. v. Ore- Atchison, T. & S. F. Ry., 14 1. C. C. 4. 
 
 [8381 
 
Equality of Service [ § 922 
 
 City.^ Merchants of Washington, D. C, located on 
 Fourteenth street, northwest, between Florida avenue and 
 Park road, are subjected to undue prejudice by being 
 compelled to pay a drayage charge on less-than-carload 
 freight shipments, while merchants located in Georgetown 
 are given free pick-up and delivery service.*' In the 
 express business on the other hand, personal delivery to 
 the consignee is the normal service. The Commission has 
 laid it down that there should be definite rules concerning 
 delivery of express traffic; and when free delivery is made, 
 the free delivery limits must be plainly indicated, this 
 information being made pubUc in the express tariffs and 
 in the express directory.*- 
 
 § 922. Contracts with grain elevators. 
 
 As to grain elevators the rule is practically estabhshed 
 that the railroad must deliver at their private siding to 
 all of them that are along its route. Grain in bulk is a 
 peculiar kind of freight, which as a commercial matter 
 requires special delivery. And as this is a duty owed by 
 the railroad to its patrons, it would not be legal for it to 
 make a discrimination in favor of one grain elevator re- 
 quiring its patrons to receive grain consigned to them 
 through it and pay to its proprietor his fixed charge.*^ 
 Against such a possibility more than one court has ur- 
 gently protested. "May such railroad companies, in like 
 manner, discriminate between grain elevators in the same 
 place, — constitute one elevator its depot for the delivery 
 of grain, and force competing interests to receive from and 
 transfer the grain consigned to them through such selected 
 and favored channel? If railroad corporations possess 
 such right, they can destroy a refractory manufacturer, 
 exterminate, or very materially cripple competition." *^" 
 
 ™ Bahrenburg Bros. & Co. v. A. '* Chicago & Northwestern Ry. 
 
 C. L. R. R., 24 I. C. C. 561. Co. v. People of Illkois, 56 111. 
 
 «' Casassa V. P. R. R., 24 1. C. C.629. 365. 
 
 " In re Express Rates, 24 I. C. C. ^^^ See also Roby v. State ex rel., 
 
 380. 76 Neb. 450, 107 N. W. 766. 
 
 [839] 
 
§§ 923, 924 ] Railroad Rate Regulation 
 
 § 923. Arrangements with stockyards. 
 
 The relative positions of the raihoads and the stock- 
 yards will be discussed later at greater length. It will 
 then be seen that although the decision at first was other- 
 wise it now seems to be held that there is no duty owed 
 to the owner of cattle to make special delivery of them at 
 any place along the line that he wishes. Consequently 
 it is held that the railroad may designate certain points of 
 deUvery reasonably convenient, as it may of other freight 
 which it has undertaken to carry. Upon this basis the 
 courts have been willing to permit the railroad to designate 
 one of several stockyards as its cattle station in effect, 
 where it will deliver cattle consigned to that point and 
 have accordingly justified it in refusing to deliver at other 
 stockyards. This was well enough so long as the courts 
 held strictly as they once did "^ that no charge could be 
 made under such circumstances against the shipments for 
 yardage if the consignee was ready to take the cattle away. 
 But under the latest decisions the courts have permitted 
 the stockyards company to make an additional charge, 
 considering it to be a connecting service.^" It would seem, 
 therefore, that there is danger in the present situation 
 that the railroad will not fulfill its duty. 
 
 § 924. Service at private sidings. 
 
 Generally speaking at common law one who has freight 
 to ship must bring it to the established freight stations. 
 No matter how large the business of a particular shipper 
 may be, the doctrine of the courts was that he could not 
 
 "Covington S. Y. Co. v. Keith, Chicago, B. & Q. R. R. Co., 186 
 
 139 U. S. 128, 35 L. ed. 73, 11 Sup. U. S. 320, 46 L. ed. 1182, 22 Sup. 
 
 Ct. 461. See also Butchers' & D. Ct. 824. See also Central S. Y. Co. 
 
 S. Y. Co. V. Louisville & N. R. R. v. Louisville & N. R. R. Co., 192 
 
 Co., 67 Fed. 36, 14 C. C. A. 290. U. S. 568, 48 L. ed. 565, 24 Sup. Ct. 
 
 Coe V. Louisville & N. R. R. Co., 339. See further Louisville & N. 
 
 3 Fed. 775, is practically overruled R. R. Co. v. Central S. Y. Co., 212 
 
 on this point. U. S. 132, 53 L. ed. 441, 29 Sup. Ct. 
 
 "' Interstate Com. Comm. v. 246. 
 
 [840] 
 
Equality of Seevice [ § 925 
 
 insist upon having cars handled from his private switch.*^ 
 And certainly in any particular case the rights of the 
 raUroad are so far paramount that a showing that the 
 operation of a switch connection might be dangerous will 
 be fatal to the appUcation. There were extreme cases, 
 where even at common law it would be unreasonable to 
 enforce this usual regulation that all must bring their 
 freight to the stations. For peculiar shipments, such as 
 coal and ore, grain and oil — to give four examples ^' — 
 special acceptance along the tracks at private sidings has 
 always been regarded as so necessary in the case of such 
 bulky freight as to distinguish the case from that of package 
 freight. 
 
 § 925. Installing switches now under the Act. 
 
 The duty of providing switching privileges was placed 
 upon railroads in England in 1904 and almost directly 
 thereafter was imposed in the United States by the pro- 
 visions of the Act of 1906. Under these provisions as they 
 originally read authorizing the Commission to order a 
 main line to estabUsh in proper cases a switch connection 
 with a branch line, the Supreme Court*^ held that the ap- 
 plication could only be made by a shipper and not by a 
 carrier, it not being the intention of the legislature to give 
 a roving commission to every road that might see fit to 
 make a descent upon a main line. This wording of the 
 Act was changed in 1910 so as to give the lateral road -a 
 chance to apply for a connecting switch; but the Supreme 
 Court •'^ has thereupon held that the line must be truly a 
 
 « See Jones v. Newport N. & M. Creek R. R., 144 Fed. 150, and 
 
 V. R. R., 65 Fed. 736, 31 U. S. App. Chicago & N. W. Ry. v. People, 56 
 
 92, 13 C. C. A. 95; also Mercantile 111. 365. 
 
 Trust Co. V. Columbus S. & H. R. ™ Interstate Commerce Commis- 
 
 R., 90 Fed. 148, and Industrial Sid- sion v. Delaware, L. & W. R. R. Co., 
 
 ing Case, 140 N. C. 239, 52 S. E. 216 U. S. 531, 54 L. cd. 605, 30 Sup. 
 
 941. Ct. 415. 
 
 "See Harp v. Choctaw, O. & G. "'United States v. Baltimore & 
 
 R. R., 125 Fed. 445, 61 C. C. C. 405; O. S. W. Ry., 226 U. S. 14, 33 Sup. 
 
 also Olanta Coal M. Co. v. Beech Ct. 5. 
 
 [841] 
 
§ 926 ] Railboad Rate Regulation 
 
 lateral one, not a competing line in part parallel. It has 
 been held in a State court that a railroad company may 
 still enter into an agreement as to the terms and condi- 
 tions upon which a spur track for a private customer shall 
 be installed, unless they do in fact involve or contem- 
 plate some discrimination against other persons seeking or 
 enjoying like privileges.^" The power of the Commission to 
 require switch connection is not founded upon any con- 
 tractual relationship existing between carriers and those 
 entitled to invoke the benefit of the statute; and the 
 Commission is without jurisdiction to compel defendants to 
 specifically perform a contract in respect thereto or to 
 award damages for the breach thereof.'^ 
 
 § 926. Basis for ordering switch connection. 
 
 Under the Act the safety of main-line traffic must be 
 considered in locating switches.^^ And the Commission 
 realizes that the carrier should be left a range of discretion 
 in locating a side track.''' It should be noted that the 
 Commission has no authority to order construction of 
 side tracks, only switch connection.^* Therefore, the car- 
 rier can demand an advancement by the shipper before it 
 will undertake to build a switch." In various cases the 
 Commission has found that the record presents no state of 
 facts upon which Commission may order connection with 
 complainant's plant.'^" And unless there is reason enough 
 for switch connection in the traffic offered, no order will be 
 made.^'' But a shipper has a right to ask for a switch 
 even if he has another outlet for his traffic by another 
 
 "> Cedar Rapids G. & E. Light "Winters Paint Co. v. Chicago, 
 
 Co. V. Chicago, R. I. & P. Ry. Co., M. & St. P., 16 I. C. C. 587. 
 
 145 la. 528, 124 N. W. 323. " McRae Terminal R. Co. v. 
 
 " Ralston Townsite Co. v. M. P. Southern Ry., 12 I. C. C. 545. 
 
 Ry. Co., 22 I. C. C. 354. " Consolidated Pump Co. v. L. 
 
 '2 Reiter, Curtis & Hill v. N. Y. S. & M. S. Ry., 27 I. C. C. 519. 
 
 S. & W. R. R., 19 I. C. C. 290. " Cormick v. Chicago, B. & Q. 
 
 " Weleetka L. & W. Co. v. Ft. S. R. R., 14 I. C. C. 611. 
 & W. R., 12 I. C. C. 503. 
 
 [842] 
 
Equality of Service [ § 927 
 
 railroad.''* Switch connections may be ordered between 
 rail lines and the docks of a steamship company; and the 
 powers of the Commission in this respect have been made 
 more ample by recent legislation.^^ And generally speaking 
 the Commission is not unmindful of the importance of 
 enabling shippers to have goods loaded at any point with- 
 out necessity of hauling them to a station.*" 
 
 § 927. Any discriminatory treatment forbidden. 
 
 It may or may not be undue prejudice to refuse spur 
 service to particular mine.*^ Because a spur track is in- 
 cluded in service of one carrier it does not follow that 
 service of another carrier without a spur track is inade- 
 qua,te.*^ But where a switch is in, discrimination results 
 from a refusal to deliver livestock shipments to com- 
 plainant's side track.*^ It is not clearly a discrimination, 
 but more in nature of a tort, for a carrier to close shipper's 
 switch and refuse to place cars thereon.*^ This is well 
 explained in the case,*^ where the Supreme Court squarely 
 held that a railroad might enter into a traffic agreement 
 with one railroad connecting with it, involving through 
 billing at a joint rate, and at the same time refuse to enter 
 into a similar agreement with another railroad, travers- 
 ing the same territory as the first and having the same ter- 
 minus. The court went so far in another case as to say 
 that an interstate carrier which enters into an arrange- 
 ment with a connecting carrier for through billing, rating, 
 and loading and for the use of its tracks and terminals, 
 is not obliged to make the same arrangements with other 
 
 '8 Railway & D., L. & W. Ry., 14 v. S. P. L. A. & S. L. R. R., 19 I. 
 
 I. C. C. 191. C. C. 11. 
 
 " In re Wharfage Facilities at *' Baltimore Butchers' Live Stock 
 
 Pensacola, 27 I. C. C. 252. Co. v. O. B. & W. R. R., 20 I. C. C. 
 
 «« May Bros. v. Y. & M. V. R. R., 124. 
 
 26 I. C. C. 323. " Hillsdale Coal & Coke Co. v. 
 
 " Chicago W. & V. Coal Co. v. P. R. R., 19 I. C. C. 356. 
 
 C, B. & Q. R. R., 23 I. C. C. s* Atchison, T. & S. F. Ry. v. 
 
 13. Denver & N. O. R. R., 110 U. S. 
 
 82 Southern California Sugar Co. 667, 28 L. ed. 291, 4 Sup. Ct. 185. 
 
 [843] 
 
§ 928 ] Railroad Rate Regulation 
 
 connecting carriers, though the physical facilities for an 
 interchange of traffic are the same.*^ 
 
 § 928. Establishment of stations. 
 
 It is everywhere agreed that the State may by statute 
 establish stations at places where the public need requires 
 them. Where a station was ordered in a place where it 
 was obvious there was practically no business whatsoever 
 nor any prospect of any being developed the court set 
 the statute aside.'^ By the progressive view of this ques- 
 tion the courts are held to have general jurisdiction to 
 compel a railroad to establish stations in reasonable 
 places.** In the leading case in Illinois, the court without 
 aid of special legislation itself ordered the opening of a 
 station for a community of 1800 inhabitants, through 
 which a railroad was running without stopping.*' In a 
 more extreme case still in New Hampshire the court 
 ordered two railroads to join in the construction of a 
 union station.'" Speaking generally wherever there is a 
 community which has business enough to make the es- 
 tablishment of the station plainly profitable, there can be 
 no doubt that the railroad is acting unreasonably in not 
 establishing a station there at once. Assuming the Com- 
 mission to have power to require a common carrier to locate 
 or relocate and maintain a station at a given point, such 
 power should not be exercised unless all the facts and con- 
 ditions clearly indicate that the interests of the general 
 public in the locality involved are materially impaired by 
 the lack of such facilities.^' It has been said by the Com- 
 mission that aside from the question of its authority to order 
 restoration of stations, that none was needed in the cases as 
 
 »= Little Rock & M. R. Co. v. St. «» People v. Chicago & A. R. R., 
 
 Louis S. W., 63 Fed. 775. 130 111. 175, 22 N. E. 857. 
 
 8' Louisville & N. Ry. Co. v. State, »» Concord & M. R. R. Co. v. 
 
 91 Ark. 358, 121 S. W. 284. Boston & M. R. R., 67 N. H. 
 
 ™ Florida, C. & P. R. R. Co. v. 464. 
 
 State ex rel., 31 Fla. 482, 13 So. " Jones v. St. L. & S. F. R., 12 
 
 103. I. C. C. 14. 
 
 [844] 
 
Equality of Service [ § 929 
 
 yet brought before it."- The exact location of express ofiices 
 is not within the jurisdiction of Commission if the pubhc is 
 being served adequately.^' But an order was recently made 
 that respondents should provide a receiving depot for oysters 
 in the section of city where complainants were located."^ 
 
 § 929. Protection of its terminals. 
 
 Pursuant to the proviso of the Act the Commission has 
 several times had occasion to say that it had no authority 
 to require one railroad to give the use of its terminal facilities 
 to another. The language is explicit to the effect that 
 railroads cannot be required to open their terminals to 
 traffic brought to or carried from that locality by their 
 competitors."'' On the other hand, if carriers offer each 
 to the other the use of their respective tracks or terminals, 
 as is shown by the fact that freight is actually inter- 
 changed after its arrival at the terminal, and for this 
 service charges are provided in tariffs published and filed, 
 it follows that, having elected to perform this service, 
 the charges therefor must be reasonable."^ And, as a 
 shipper has a right to have carload property transported 
 from and to interstate points at through rates, transport- 
 ing cars to or from complainant's terminal is not giving 
 use of its tracks and terminal facilities within meaning 
 of third section."^ The mere fact that the plaintiff is at 
 great disadvantage in its business, because it could not 
 get similar treatment, is not enough to move the court 
 to feel that there had been any illegal discrimination; 
 the question is whether the company is giving proper 
 service over its own lines for business offered."^ 
 
 »2 Snook V. Central R. R. of N. "^ Morris Iron Co. v. B. & O. R. 
 
 C, 17 I. C. C. 375. R., 26 I. C. C. R. 240. 
 
 "' American Bankers' Ass'n v. " Merchants' & M'fg Ass'n v. 
 
 American Express Co., 15 I. C. C. Penn. R. R., 23 1. C. C. 474. 
 
 15. "Peoria Terminal Case, 26 I. C. 
 
 »< Atlantic Packing Co. v. Am. Exp. C. 226. 
 
 Co., 28 I. C. C. 244. »« Pittsburg Switching Case, 28 
 
 I. C. C. 621. 
 
 [845] 
 
§§ 930, 931 ] Railroad Rate Regulation 
 
 To-pic C. Supply of Equipment 
 
 § 930. Basis of the duty to supply equipment. 
 
 It must be obvious that the provision of adequate facili- 
 ties in the conduct of the business which has been under- 
 taken is one of the fundamental obligations resting upon 
 those who undertake a public service; for without the 
 recognition of this duty to take reasonable steps to provide 
 proper facilities the general requirement of service would 
 be idle.^* To apply this rule to the transportation of 
 freight, the carrier performs his public duty only by pro- 
 viding reasonably for the normal fluctuations in offerings 
 of freight. "The sufficiency of such accommodations must 
 be determined by the amount of freight and the number of 
 passengers ordinarily transported on any given line of 
 road. The duty of a company to the public, in this 
 respect, is not peculiar to any season of the year, or to 
 any particular emergency that may possibly arise in the 
 coiu-se of its business. The amount of business ordinarily 
 done by the road is the only proper measure of its obliga- 
 tion to furnish transportation. If by reason of a sudden 
 and unusual demand for stock or produce in the market, 
 or from any other cause, there should be an unexpected 
 influx of business to the road, this obligation will be fully 
 met by shipping such stock or produce in the order and 
 priority of time in which it is offered." ' 
 
 § 931. Commission jurisdiction over facilities. 
 
 Car furnishing is part of transportation under the Act 
 
 "" Southern Ily. Co. v. Atlanta ' Fagg, J., in Ballentine v. North 
 
 Sand & S. Co. (Ga.), 68 S. E. Mo. R. R. Co., 40 Mo. 491, 93 Am. 
 
 807. Dec. 315. 
 
 A carrier is liable in an action at The provision of cars and the 
 
 law for refusing to furnish cars for distribution thereof is dependent 
 
 the shipment of cross-ties while at upon what seemed to be and now 
 
 the same time furnishing cars to is reasonable and proper under all 
 
 others for the interstate shipment the circumstances and conditions, 
 
 of other freight. American Tie & People ex rel v. St. L. A. & T. H. 
 
 Timber Co. v. K. C. S. Ry. Co., 175 R. R., 176 111. 512, 52 N. E. 292, 35 
 
 Fed. 28. L. R. A. 656. 
 
 [846] 
 
Equality of Service [ § 932 
 
 as amended; and the Commission has full jurisdiction to 
 see that a railroad provides transportation as therein de- 
 fined upon reasonable terms and without discrimination.^ 
 But where there is no discrimination shown the Commis- 
 sion formerly declined to require a carrier to furnish a 
 car shed under which perishable freight might be loaded 
 without damage from the weather, or to furnish cars in 
 proper repair, clean, dry, and in suitable condition for 
 carrying produce.^ The Act now lays upon the carriers 
 the duty to provide transportation facilities.'' In a late 
 proceeding the complainant's prayer for the restoration 
 of the sleeping-car service formerly maintained by defend- 
 ants between certain points was dismissed, but the question 
 of jurisdiction was not decided. ° Under the present ex- 
 tension of its powers, however, there is no doubt of the 
 duty of carriers under the Act to furnish cars suitable 
 for transportation.^ And the Commission has recently 
 held that it is the obligation of carriers engaged in that 
 traffic to furnish adequate number of cars for the handling 
 at Galveston of export cotton.'^ 
 
 § 932. The obligation treated reasonably. 
 
 When adequate provision is made for usual business, 
 it can hardly be said that the carrier has not fulfilled his 
 duty. The general principle is well stated in its apphca- 
 tion to a particular case in an early proceeding before 
 the Commission, under section 3: "The vast fluctuations 
 and unforeseen developments of commerce, or the fault 
 or misfortune of some one or more connecting lines, may 
 occasionally bring about a condition of affairs in which 
 the best managed railroad, and with the most ample 
 
 2 Arlington Heights Fruit Ex- homa v. A., T. & S. F. Ry., 25 I. 
 
 change v. S. P. Co., 20 I. C. C. 106. C. C. 120. 
 
 ' Ponchatoula Farmers' Ass'n v. ^ Southwestern Missouri Millers' 
 
 I. C. R. R., 19 I. C. C. 513. Club v. St. L. & S. F. R. R., 26 I. 
 
 * Coal Rates on Stony Fork Branch, C. C. 245. 
 
 26 I. C. C. 186. ' Galveston Commercial Ass'n v. 
 
 ' Corporation Commission of Okla- A., T. & S. F. Ry., 25 I. C. C. 216. 
 
 [847] 
 
§ 933 ] Railroad Rate Regulation 
 
 freight equipment, is unable to move at once as promptly 
 as tendered all the freight upon its line, and this without 
 any fault of its own. It certainly is the duty of every 
 railroad company to provide itself with a sufficient freight 
 equipment and to keep this well in hand for the prompt 
 movement of freight over its line, based upon known and 
 probable estimates of the business of a season." * 
 
 § 933. Provision of special equipment. 
 
 In a diversified business, such as common carriage, a 
 special equipment of various sorts must often be provided. 
 In the case of the railroads very different cars of course 
 are requisite for the transfer of passengers and of freight. 
 And although many kinds of freight may be transported 
 in open cars with safety, more kinds require box cars. 
 But in the conduct of a modern railroad far more facilities 
 than these simpler forms have been found to be necessary. 
 Thus for the transportation of many perishable food stuffs, 
 such as butter and fruit, refrigerator cars have been 
 found to be indispensable ; and it is generally held in modern 
 cases that these improved cars are imperatively 'demanded 
 for the proper transportation of perishable articles.* The 
 same law, by reason of the same necessity, applies to the 
 provision of ventilator cars for those commodities which 
 would be injured by transportation in closed cars.^" As 
 soon as the railways begin the transportation of livestock 
 upon a large scale, as part of their regular business, the 
 provision of special stock cars becomes necessary. ^^ And 
 
 8 Riddle, Dean & Co. v. Pittsbui-gh " Forrester v. Southern Ry. Co., 
 
 & L. E. Ry., 1 Int. Com. Rep. 689. 147 N. C. 553, 18 L. R. A. (N. S.) 
 
 Generally speaking, freight cars 508, 61 S. E. 524. 
 
 should be made to fit the business; It is the duty of the carrier to 
 
 but within reasonable limits business furnish necessary equipment for the 
 
 may be required to adapt itself to movement of the potato traffic from 
 
 the car. Western Classification Case, Maine to New England. In re 
 
 25 I. C. C. 442. Advances on Potatoes, 25 I. C. C. 
 
 " St. Louis, I. M. & S. Ry. v. Ren- 159. 
 
 froe, 82 Ark. 143, 100 S.'W. 889, 10 ^i Di Giorgio I. & S. S. Co. v. 
 
 L. R. A. (N. S.) 317. Pennsylvania II. R. Co., 104 Md. 
 
 [848] 
 
Equality of Service [ § 934 
 
 so where a railroad runs through a district shipping large 
 quantities of oil it should, it seems, equip itself with tank 
 cars to meet the commercial necessity of shipment in 
 bulk. 12 These cases would seem to justify the generahza- 
 tion that wherever the territory served by the railroad 
 produces in sufficient quantities commodities which re- 
 quire special equipment for their proper shipment such 
 equipment should be provided. 
 
 § 934. Demand foreseen although unusual. 
 
 If, then, the abnormal demand should have been fore- 
 seen by a reasonable management, it is in default unless' 
 it has made every effort to meet the emergency. Thus in 
 the conduct of passenger business, when it is known that 
 some exhibition or other event will bring together a large 
 number of people, the transportation lines should make 
 seasonable allotment of facilities to meet the extraordinary 
 demand at this point. ^^ But if the number of passengers 
 applying is unprecedentedly large the railroad is of course 
 excused, if it has provided as much additional service as 
 would seem to be necessary at such a time.'^ A recent 
 case goes so far as to hold that if a railroad had not pro- 
 vided sufficient equipment to move the cotton crop each 
 recurring season, a plea in its defense that in the par- 
 ticular season the crop was above average will not save it.^^ 
 And in a still later case it was held that a railroad com- 
 
 693, 65 Atl. 425, 8 L. R. A. (N. S.) ''Gordon v. Manchester & L. R. 
 
 108. R. Co., 52 N. H. 596, 13 Am. Rep. 97. 
 
 '- Western N. Y. & P. Ry. Co. v. In one important investigation, 
 
 Penna. Ry., 137 Fed. 343, 70 C. C. proposed remedies for car shortage 
 
 A. 23. were considered, such as curtailment 
 
 Where special preparation is re- of reconsignment privileges; restrict- 
 quired to fit the car for shipment of ing warehousing in cars; car clearing- 
 particular commodity, t-ask devolves house; increasing car rental; recipro- 
 upon shipper. Southwestern Mis- cal car demurrage. In the Matter 
 souri Millers' Club v. St. L. & S. of Car Shortage, 12 I. C. C. 561. 
 F. R. R. Co., 26 I. C. C. 245. '* Yazoo & M. V. R. R. Co. v. 
 
 1' Chicago & A. Ry. Co. v. Dum- Blum Co., 88 Miss. 180, 40 So. 748, 
 
 ser, 161 111. 190, 43 N. E. 69S. 10 L. R. \. (X. S.) 432. 
 
 54 [ 849 ] 
 
§ 935 ] Railkoad Rate Regulation 
 
 pany which had obhgated itself to furnish refrigprator 
 cars to transport garden truck to market cannot escape 
 liabihty for breach of that duty upon the ground that the 
 crop was unusually large, if it was no larger than might 
 reasonably have been expected from the acreage planted, 
 knowledge of which the railroad company either had, or 
 had the means of obtaining.^* 
 
 § 935. Reasonable time to increase facilities. 
 
 When it is said that the company is responsible for not 
 meeting an increase in demand which has been foreseen, 
 this is subject to the qualification that the company shall 
 be given a reasonable time after it should have anticipated 
 the future demands to equip itself for them. And it must 
 be recognized that this is often a matter of considerable 
 time. It is a long time after orders for railroad equip- 
 ment have been placed before rolling stock, particularly 
 locomotives, is delivered." Sheer physical impossibiUty 
 need not be shown; commercial impracticabiUty is enough. 
 Doubtless a granger railroad has at every harvest time 
 more demand for grain cars than it can instantly supply. 
 But to buy sufficient cars to meet every demand the very 
 day it is made, would leave perhaps idle during the year 
 ten times the number of cars that the average business, 
 demands. This would inevitably react upon the freight 
 rate, increasing it to a unbearable extent. If the manage- 
 
 •" Atlantic C. L. Ry. v. Geraty, Seaboard Air Line Ry. Co., 73 S. C. 
 
 166 Fed. 10, 91 C. C. A. 602, 20 L. 9, 52 S. E. 677. 
 R. A. (N. S.) 310. It is not reasonable that carriers 
 
 Carriers who hold themselves out unable to supply shippers with suffi- 
 
 as prepared to furnish cars of various cient cars of large or average capacity 
 
 sizes and apply charges based upon should make such minimum loading 
 
 the size of the car, confer upon the requirements as cannot be practically 
 
 shipper a legal right to demand a complied with as to the smaller ears 
 
 car of certain size. Riverside Mills in order that they may obtain as 
 
 v. G. R. R., 25 I. C. C. 434. much earnings from shipments 
 
 "See to this effect: St. Louis S. therein as from those in the larger 
 
 W. Ry. Co. V. Clay Ginn. Co., 77 and superior cars. Wiemer & Rich 
 
 Ark. 357, 92 S. W. 531; Mauldin v. v. C. N. W. Ry. Co., 12 I. C. C. 462. 
 
 [8501 
 
Equality of Service [ § 936 
 
 ment of such a railway provides sufficient cars to move 
 the crop within reasonable time to meet the market, 
 it would seem that it is doing all that should be re- 
 quired. ^^ 
 
 § 936. Carriage through in same cars. 
 
 Whether a railroad is compelled by its duty to afford 
 reasonable facilities for interchange of traffic to receive 
 a carload of freight from a connecting road and carry it 
 through without breaking bulk was once not clear. ^'' It was 
 early held, however, that a boycotted road could compel a 
 connecting road to do so, in spite of a threatened strike of 
 its employees.^" In another case at about the same time ^^ 
 it was held that through car service could not be asked. 
 In Little Rock Railroad v. St. Louis Southwestern Rail- 
 way -^ it was broadly said, "The third section of the Inter- 
 state Commerce Act does not require an interstate carrier 
 to receive freight in the cars in which it is tendered by a 
 connecting carrier, and to transport it in such cars, paying 
 a mileage rate thereon, when it has cars of its own that 
 are available for the service, and the freight will not be 
 injured by transfer." But a railroad may well profess to 
 furnish cars for service beyond its route, as. was said in 
 St. Louis S. W. Ry. v. State.^' "For one railroad company 
 to be an Ishmaelite among its associates would operate dis- 
 astrously to its shippers. The shippers of Arkansas expect 
 the public carriers to put their cotton to the spinners in New 
 England and their fruits to the North, and their lumber and 
 
 's See to this effect: State ex rel. >» See Michigan C. R. R. v. Smith- 
 
 V. Chicago, B. & Q. R. R. Co., 71 son, 45 Mich. 212, 7 N. W. 791. 
 Xcb. .593, 99 N. W. 309, and State " jn Chicago, B. & Q. R. R. v. 
 
 e.\ rel. v, Chicago, B. & Q. R. R. Co., Burlington, C. R. & N. Ry., 34 Fed. 
 
 72 Neb. 542, 101 N. W. 323. 481. 
 
 Carrier should not be required to -'Oregon S. L. v. N. P. Ry., rA 
 
 accept a carload of miscellaneous Fed. 465. 
 
 freight from another without check- "53 ped. 775, 11 C. C. A. 
 
 ing contents. Dubuque Shippers' 417. 
 
 Ass'n V. C. & N. W. Ry. Co., 26 I. " So Ark. 311, 107 S. W. 1180. 
 
 C. C. 565. 
 
 [851] 
 
§§ 937, 938 ] Raileoad Rate Regulation 
 
 coal to the four quarters of the Union, without change from 
 consignor to consignee." 
 
 § 937. Provision of cars in through service. 
 
 A railroad by the common law certainly is not bound 
 to send its cars beyond its own rails; ^* and no legislation 
 has as yet been devised which can constitutionally compel 
 it to do so.^^ On the other hand, a railroad may legally 
 enter into a through route, or contract for through ship- 
 ments; and then in either case it will be obliged to let all 
 patrons who may desire ship through in the original cars.^^ 
 It is plainly the duty of a connecting carrier on a jorat 
 through rate to take the goods through in the cars de- 
 livered to it by the initial carrier if this is required. ^^ 
 Each carrier subject to Act is charged with the duty of 
 furnishings cars to industries located upon its lines; in 
 case of through routes the obligation to furnish cars for 
 shipments to points upon the lines of its connections is 
 joint with such connections.^* It follows in the opinion 
 of the Commission that it is the initial carrier which must 
 in first instance assume the burden of furnishing the equip- 
 ment necessary for taking the goods through to destination 
 if moving in carload lots.^' 
 
 Tojyic D. Distribution of Equipment 
 
 § 938. Discrimination in use of cars. 
 
 If there is a shortage of cars due to unusual press of 
 business, the carrier must supply his cars ratably as far 
 as they go; and if he makes a reasonable distribution no 
 
 2' St. Louis South- Western Ry. -' Pennsylvania Refining Co. v. 
 
 Co. V. State, 85 Ark. 311, 107 S. W. Western N. Y. & P. R. R. Co., 208 
 
 1180, 122 Am. St. Rep. 33. U. S. 208, 52 L. ed. 456, 28 Sup. Ct. 
 
 26 Louisville & N. R. R. Co. v. 268. 
 
 Central S. Y. Co., 212 U. S. 132, 143, ^s Huerfano Coal Co. v. C. & S. 
 
 53 L. ed. 441, 29 Sup. Ct. 246. E. R. R., 28 I. C. C. 502. 
 
 ^ St. Louis S. W. Ry. Co. v. ^^ Proportional Rates on Excelsior 
 
 Phoenix Cotton Oil Co., 88 Ark. 594, and Excelsior Wrappers, 26 I. C. C. 
 
 115 S. W. 393. 44. 
 [852] 
 
Equality op Service [ § 938 
 
 one can complain of discrimination.'" Regular customers 
 are not entitled to preference over occasional ones under 
 such circumstances; '^ and it may be a carrier can refuse to 
 allow cars to be sent off its line to distant points. ^^ Undue 
 preference may result from coal-car distribution rules; the 
 shipper is entitled not only to receive fair proportion and 
 use of carrier's equipment, but may protest against a 
 competitor's being given a supply of cars in excess of 
 his just proportion.'^ A carrier should arrange for car dis- 
 tribution on a basis which will not result in unlawful 
 discrimination between the various operators in the field.'* 
 The rights and duties of these various carriers in the appor- 
 tionment of available car supply must be determined from 
 the Act and not from any contract which they may choose 
 to make.'"' Operators may not be able to secure a per- 
 centage of the available cars from both roads during 
 periods of car shortage, but will be given the highest 
 percentage of cars that either of the carriers can supply 
 at that time.'" A carrier cannot give a shipper a preference 
 in car distribution in order that it may profit thereby; 
 neither can it give the shipper a preference in order that 
 the shipper may profit thereby, and, when called upon 
 by any individual shipper for full service, the only defense 
 which the carrier can interpose is that the supply which 
 it has furnished is sufficient for normal demands, and that 
 in times of stress it has fairly and impartially prorated 
 all of its car equipment.'^ 
 
 '» United States v. West Virginia •" BuUah Coal Co. v. P. R. R., 20 
 
 N. R. R., 125 Fed. 252; S. S. Daish & I. C. C. R. 52. 
 
 Sons V. Cleveland, A. & C. Ry., 9 ^^ Powhatan Coal & Coke Co. v. 
 
 I. C. C. Rep. 513; Riddle v. Balti- N. & W. Ry., 13 I. C. C. 69. 
 more & O. R. R., 1 Int. Com. Rep. "> Huerfano Coal Co. v. C. & S. 
 
 778, 1 I. C. C. 372. E. R. R., 26 I. C. C. 502. 
 
 "Riddle v. New York, L. E. & ™ Coal Rates on Stony Fork 
 
 \V. Ry., 1 Int. Com. Rep. 787, 1 I. Branch, 26 I. C. C. 168. 
 C. C. 594. " United States v. B. & O. R. Co., 
 
 '- Riddle v. Pittsburg & L. E. R. 165 Fed. 113. 
 R., I Int. Com. Rep. 688, 1 I. C. C. 
 374. 
 
 [853] 
 
§ 939 ] Railroad Rate Regulation 
 
 § 939. Jmisdiction of the Commission. 
 
 It is the duty of railroad companies to provide suitable 
 vehicles of transportation and to offer their use impartially 
 to all shippers, and unjust discrimination through car 
 distribution is prohibited by the Act.'^ Section 15 of the 
 Act is to be read in the widest possible sense; it brings 
 within the jurisdiction of the Commission all the regula- 
 tions and practices of carriers under which they offer 
 their services to the shipping pubUc, and conduct their 
 transportation.^* Rules or regulations prescribing who shaU 
 load and unload cars of freight are rules or regulations 
 affecting rates, and are therefore subject to the control 
 of the Commission under this section.^* Where the shipper 
 has shown in a mandamus suit to compel equitable car 
 distribution, that the carrier has not supplied the facilities 
 demanded, the burden is upon the carrier, in order to 
 exonerate itself from the charge of undue preference, to 
 show that it is prorating its cars fairly and equally among 
 aU the operators who are similarly situated and engaged 
 in transporting freight over its lines.*' AATiere a shipper 
 seeks damages arising from an alleged improper and dis- 
 criminatory system of car distribution applying to a 
 certain coal mining region, and affecting the interests of 
 many shippers, he cannot institute an original suit for the 
 same in a United States court under section 9 of the Act, 
 but must first file complaint with the Commission.*- The 
 Commission under section 15 of the Act has authority 
 to prohibit unjust discrimination in the distribution of 
 cars by making orders which must be obeyed for a period 
 of two years.** The Commission thus has jurisdiction to 
 consider the question of car distribution, and to determine 
 
 ^s Powhatan Coal & Coke Co. v. " United States v. B. & O. R. R. 
 
 N. & W. Ry. Co., 13 I. C. C. 69. Co., 165 Fed. 113. 
 
 =9 Rail & River Coal Co. v. B. & " Morrisdale Coal Co. v. * Penn- 
 
 O. R. R. Co., 14 I. C. C. 86. sylvania R. Co., 176 Fed. 748. 
 
 *" Wholesale Fruit & Product .\sso- " Interstate Commerce Commis- 
 
 ciation v. A., T. & S. F. Ry. Co., sion v. 111. Cent. R. R., 215 U. S. 
 
 14 I. C. C. 410. 452, 54 L. ed. 280, 30 Sup. Ct. 155. 
 
 [854] 
 
Equality of Service [ § 940 
 
 how many each of respondents must furnish. ^^ And the 
 basis of car distribution is regarded as a regulation affect- 
 ing rates within meaning of section 15/'' So mine rating 
 is a practice in connection with the movement of inter- 
 state traffic which is within the jurisdiction of the Commis- 
 sion.''* 
 
 § 940. Order of preference between shippers. 
 
 It is the duty of the carrier to accommodate the needs 
 and necessities of shippers in regard to supplying cars; as 
 a practical matter it is not possible for carriers to furnish 
 all shippers with just such cars as they would like and in 
 such numbers at such days and hours as would best serve 
 their interests.*^ If all shippers cannot be served where 
 there are a certain number of cars apportioned to a given 
 station, the inclination perhaps is to call it discrimination 
 unless they are served in the order of application. But 
 this is not necessarily the rule; indeed it would be more 
 in the interests of all concerned if the available supply 
 at a given time are distributed ratably according to some 
 fair basis of prorating. The rule of apportioning cars in 
 times of great scarcity by giving the first car to the first 
 shipper ordering and the second to the next shipper order- 
 ing, may seem just. On the other hand, with a consider- 
 able, but still scarce, car supply, and a shipper, like com- 
 plainant, having a large quantity to ship, while others 
 may have but an occasional carload, rigid adherence to 
 such a rule might prove decidedly unjust.''^ It is funda- 
 mental to-day that shippers are entitled not only to fair use 
 of facilities but to assurance that no one fares ratably 
 better.''' And as the Commission has pointed out, as it 
 is the plain duty of carrriers to distribute cars equitably, 
 
 " Coal Rates on the Stony Fork " American Creosoting Works v. 
 
 Braneh, 26 I. C. C. 168. 111. Cent. R. R. Co., 15 I. C. C. 160. 
 
 « Hillsdale Coal & Coke Co. v. « Richmond E. Co. v. P. M. Ry., 
 
 P. R. R., 19 1. C. C. 356. 10 I. C. C. 629. 
 
 « In re Mine Ratings, 25 I. C. C. '^ Hillsdale Coal & Coke Co. v. 
 
 286. P- R- R-. 19 I- C. C. 358. 
 
 [ 855 ] 
 
§§ 941, 942 ] Railroad Rate Regulation 
 
 they should hire a sufficient number of men to faciUtate 
 the distribution.^" 
 
 § 941. Where no preference justifiable. 
 
 It would be a safe generalization, however, that no pref- 
 erence is justifiable between goods of the same nature 
 if the conditions surrounding the movement of the traffic 
 are the same. The common carrier has no right to select 
 either goods or customers. However it has been held that 
 a carrier may make arbitrary allotment of cars for the 
 purpose of enabling the owner of a mine reasonably to 
 develop it, so as to put it in a condition to operate and 
 make shipment.''' And there is no discrimination against 
 localities by an arrangement among carriers dividing the 
 traffic of transporting immigrants from Atlantic ports 
 westward in agreed proportions, where the immigrants 
 are transported at domestic published rates. '^^ In the past 
 there have been great injustices in the apportionment of coal 
 cars in times of car shortage by reason of such apportion- 
 ment without regard to any general rule.^' Carriers 
 should apportion cars upon bases ascertained in advance, 
 and take into account not only physical capacity of each 
 mine to make shipments, but also the commercial capacity 
 of each mine to find a market for its coal. No discrimi- 
 nation is shown against a shipper whose commercial mis- 
 fortunes have operated to reduce their ratings. ^^ Where 
 unjust discrimination is found to have existed in the past, 
 the carriers will be given time within which to formulate 
 proper rules and regulations governing mine rating and car 
 distribution.^'' 
 
 § 942. Basis of prorating cars. 
 
 It seems now well established, therefore, that it is the 
 
 ^ Colorado Coal Traffic Ass'n v. "^ National Coal Co. v. B. & 0. R. 
 
 D. & R. G. R. Co., 23 I. C. C. R. 458. R., 28 I. C. C. 442. 
 
 " Rail & River Coal Co. v. B. & " Id., 28 I. C. C. 442. 
 
 0. R. R., 14 I. C, C. 86. " Colorado Coal Traffic Ass'n v. 
 
 "Re Transportation of Immigrants D. & R. G. R. R., 23 I. C. C. R. 
 
 fromNewYork, lOI.C.C.Rep. 13. 458. 
 
 [856] 
 
Equality of Seevice [ § 942 
 
 duty of the management when the supply is short to pro- 
 rate cars apportioned to the station among the applicants. 
 The law has become quite elaborate in late years as to 
 the various elements that may enter into the consideration 
 as to what is a fair apportionment. Thus in a recent case"° 
 it was said in apportioning cars that in reaching a proper 
 basis for the distribution of railroad cars it is necessary 
 that an impartial and intelligent study of the capacity of 
 the different mines be made by competent and disinter- 
 ested experts, whose duty it should be to carefully ex- 
 amine into the different elements that are essentially 
 factors in the finding of the daily output of the respective 
 mines which are to share in the allotment." Among the 
 matters to be investigated are the following: the working 
 places, the number of mine cars and their capacity, the 
 switch and tipple efficiency, the number and character of 
 the mining machines in use, the hauling system and the 
 power used, the number of miners' houses. No one of 
 these various and essential elements can safely be said 
 to be absolutely controlling, though it is'hkely that the 
 most important of them all are the real working places, 
 the available points at which coal can be profitably mined.''* 
 In one of the earlier cases upon this point the Commission 
 held not unreasonable this system of distribution: the 
 physical capacity, the commercial capacity for the first 
 year, and the commercial capacity for the second year 
 were added together and divided by three, the result ob- 
 tained was the capacity basis for determining the per- 
 centage to which a particular mine was entitled to.'"' In 
 
 ^ United States v. West Virginia ex rel. v. Oregon Ry. & Nav. Co., 159 
 
 Northern Ry. Co., 125 Fed. 352. Fed. 975. 
 
 "An arrangement, entered into '« But such distributing arrange- 
 between a railroad and warehouse- ments are not necessarily conclusive 
 men along its route that cars shall even when agreed upon between the 
 be distributed to warehousemen, no railroad and the principal shippers, 
 notice being taken of storers as such. United States v. Norfolk & W. Ry. 
 afl it leaves possibilities of abuses Co., 143 Fed. 266, 74 C. C. A. 404. 
 in the dealings of the warehouseman, ^9 Rail & River Coal Co. v. B. & 
 is not to be supported. United States O. R. R., 14 I. C. C. 86. 
 
 [857] 
 
§ 943 ] Railroad Rate Regulation 
 
 a later case a federal court held where in determining the 
 number of cars to which various competing coal com- 
 panies upon its line were entitled, defendant based the 
 percentage on the capacity of the mine and on previous 
 shipments, the capacity being allowed to count as 1, and 
 the shipments as 2, in ascertaining the percentages, that 
 such a system was improper and unfair to the shipper 
 opening up new mines, and that percentages should be 
 based solely on physical capacity of the mine.'"' In a 
 case before the Commission subsequently it was held 
 that the method of car distribution known as the "coke- 
 oven basis," unduly discriminates against complainant, 
 and that the so-called "capacity basis" of car distribution 
 should be adopted, as the coke-oven basis does not fairly 
 measure the relative rights of the various operators in the coal 
 district, but unduly discriminates against business rights." 
 
 § 943. Respective requirements compared. 
 
 The occupation, the use, and the consequent reduction 
 of the available equipment of the carrier are the vital 
 matters in all plans of car distribution in times of short- 
 age.*^ While the mine capacity of a given shipper may be 
 greater than his allotment of cars, yet where this is also 
 the case as to other shippers similarly situated in the 
 same coal field, it is the duty of the carrier, when the 
 supply of cars is inadequate, to fairly distribute the avail- 
 able number among all operators.*' The carrier owes a 
 special duty to shippers who are entirely dependent upon 
 it for transportation facilities.** The Act delegates to the 
 Commission authority to regulate the distribution of coal 
 fuel cars in times of car shortage as a means of prohibit- 
 ing unjust preferences or undue discrimination.*^ While 
 
 «» United States v. B. & O. R. R., " Powhatan Coal & Coke Co. v. 
 
 165 Fed. 113. ' Norfolk & W. R. Co., 11 I. C. C. 69. 
 
 "Powhatan Coal & Coke Co. v. "National Coal Co. v. B. & O. 
 
 Norfolk & W. R. Co., 19 I. C. C. 69. R. R., 38 I. C. C. 442. 
 
 " Royal Coal & Coke Co. v. So. <>' Traer v. C. & A. R. R., 13 I. 
 
 Ry., 11 I. C. C. 440. C. C. 451. 
 
 [ 858 ] 
 
Equality op Service [ § 944 
 
 the mine capacity of a given shipper of coal may be 
 greater than his allotment of cars, yet where this is also 
 the case as to other shippers similarly situated in the same 
 coal field it is the duty of the carrier when the car supply 
 is inadequate to fairly distribute the available number 
 among all operators.** Where a coal company owns and 
 operates several openings, and is entitled in the daily dis- 
 tribution to a certain number of cars for each mine, it 
 will not be prohibited from grouping or pooling all these 
 cars, or any portion of them, at one mine, instead of using 
 them at each mine in accordance with their respective 
 percentages, in the absence of definite evidence to show 
 that such practice results in fact in undue and unlawful 
 discrimination.*^ 
 
 § 944. Cars needed by railroads. 
 
 A carrier may send its equipment from its line for the 
 things that are necessary and essential for its own opera- 
 tion, such right arising from considerations of public policy, 
 which recognizes the duty of a carrier to operate its line, 
 and being predicated on necessity and not on the carrier's 
 right of private contract.** But the Commission may 
 compel a railroad to count against the shipper the com- 
 pany's fuel cars, in the daily distribution in times of car 
 shortage, under section 3 of the Act prohibiting preferences 
 and discriminations.*^ And the coal sold to a carrier by 
 a mine and shipped to it in the carrier's fuel cars is not to 
 be counted in arriving at the mine's producing capacity, 
 for the purpose of determining the percentage of cars to 
 which it is entitled.™ It is now well established, therefore, 
 that a carrier in times of coal car shortage in making car 
 distribution must charge against the percentage of a par- 
 
 «n Powhatan Coal & Coke Co. v. ^^ Interstate Commerce Commis- 
 
 N. & W. Ry., 13 I. C. C. 69. sion v. Illinois C. R. R., 215 U. S. 
 
 " Rail and River Coal Co. v. B. & 452, 30 Sup. Ct. 155. 
 O. R. R. 14 I- C. C. 86. '" See Interstate Commerce Cora- 
 ls L. & N. R. R. V. Queen City mission v. Chicago & A. Ry., 215 
 Coal Co., 13 Ky. L. Rep. 832. U. S. 479, 30 Sup. Ct. 153. 
 
 [859] 
 
§ 945 ] Railroad Rate Regulation 
 
 ticular shipper its fuel cars, and the foreign fuel cars as- 
 signed to such shipper, and a failure so to do constitutes 
 undue discrimination under the Act.'^^ It seems that 
 under the Act a carrier engaged in intei-state commerce, 
 in determining the distributive share of cars due to a 
 particular shipper, must count against the shipper the 
 private and foreign fuel cars supplied to him, although 
 such cars are used only in intrastate commerce.^^ If a 
 mine, in filling its contract to supply fuel coal to the rail- 
 road, does not exhaust its equitable pro rata of cars, then 
 cars should be given it for commercial shipments sufficient 
 to complete its full pro rata share of all available cars." 
 It is, therefore, plainly established that fuel cars must be 
 counted against the distributive share of the mine receiv- 
 ing them subject to the conditions and limitations herein 
 stated.'* 
 
 § 945. Private facilities considered in the apportionment. 
 
 By the most recent development in this law of car dis- 
 tribution the private cars utilized by a particular shipper 
 are counted as part of his allotment.'^'' In the distribution 
 of cars by an interstate railroad company among coal 
 mines on a percentage basis in times of shortage of cars, 
 private cars owned by shippers or consignees, which have 
 no right upon the company's tracks except by virtue of its 
 charter, must be considered as leased to it and as forming 
 a part of its commercial equipment; and while the owner 
 is entitled to the exclusive use of such cars, they are to 
 be counted against the mine as a part of its percentage 
 in the distribution.'^ This whole matter as to the regula- 
 tion of the distribution of cars was threshed out in a series 
 
 " United States v. Baltimore & O. ■"■ But such distributing arrange- 
 
 R. R., 165 Fed. 113. ments are not necessarily conclusive 
 
 '2 Majestic Coal & Coke Co. v. even when agreed upon between the 
 
 lUinois C. R. R., 162 Fed. 810. railroad and the principal shippers. 
 
 " Royal Coal & Coke Co. v. So. United States v. Norfolk & W. Ry. 
 
 Ry., 13 I. C. C. 440. Co., 143 Fed. 266, 74 C. C. A. 404. 
 
 " Hillsdale Coal & Coke Co. v. ™ See Logan Coal Co. v. Pennsyl- 
 
 R R. R., 19 I. C. C. 356. vania Ry. Co., 154 Fed. 497, holding 
 
 [860] 
 
Equality of Service [ § 945 
 
 of cases in the United States Supreme Court recently." It 
 was noted that the regulations established by the rail- 
 roads had dealt with the car situation as though there 
 were four classes of cars: (1) System cars, that is, cars 
 owned by the carrier and in use for the transportation of 
 coal; (2) company fuel cars, that is, cars belonging to the 
 company, and used by it when necessary for the move- 
 ment of coal from the mines on its own line, solely for its 
 own fuel purposes; (3) private cars, that is, cars either 
 owned by coal mining companies or shippers or consumers 
 and used for the benefit of their owners in conveying coal 
 from the mines to designated points of delivery ; (4) foreign, 
 railway fuel cars, that is, cars owned by other railroad 
 companies and sent to mines upon other lines, the coal 
 being intended for use as fuel by such foreign railroad 
 companies. As Mr. Justice White pointed out in making 
 this analysis of the problem in the leading case, some 
 systems of car distribution had excluded some of these 
 classes from consideration in the allotment, and other 
 systems had excluded others. Such class distinctions, 
 he admitted, might perhaps be made by the railroads 
 without its being personal discrimination. But, as he said 
 in writing the opinion of the court, it was within the power 
 of the Commission to insist that all shippers should be 
 treated alike, regardless of what classes of cars they were 
 utilizing in their shipments. It is now currently held that 
 a carrier should give to owners or lessees of private cars the 
 use of such cars; and should also give to a coal company 
 the foreign railway fuel cars consigned to it; but such 
 ''private" and "foreign" railway fuel cars should, in the 
 distribution of cars, be counted against the company, which 
 should not be given, in addition to such delivery, a share 
 
 a division of cars based upon sub- " See Interstate Commerce Com- 
 
 tracting such special or private cars mission v. Chicago & Alton R. R. 
 
 as were coming to a shipper from his Co., 215 U. S. 479, 30 Sup. Ct. 163; 
 
 capacity figures and allowing him his Baltimore & Ohio R. R. Co. v. United 
 
 pro rata aiiiount upon the balance States e.\ rel., 21.5 U. S. 481, 30 Sup. 
 
 not outrageous. Ct. 155. 
 
 [8611 
 
§945] 
 
 Railroad Rate Regulation 
 
 of the system cars except when the number of "private" 
 and "foreign" railway fuel cars so delivered is less than its 
 distributive share of the available cars, including system 
 cars, foreign railway fuel cars, and so-called private carsJ* 
 However, it is still true that owners of private cars are 
 entitled to their use, even though their number exceeds 
 ratable proportion; but they must be counted against the 
 distributive share of mine receiving them." 
 
 '* Railroad Commission of Ohio v. 
 Hocking Valley Ry., 2 I. C. C. 398. 
 
 Compare the doctrines of the Com- 
 mission as to the necessity of charging 
 demurrage upon private cars when 
 in use, even while being unloaded by 
 the owner, in order to make no dis- 
 crimination against those using sys- 
 tem cars. See Proctor Gamble & Co. 
 V. United States, 225 U. S. 282, 32 
 Sup. Ct. 761. 
 
 "HiUsdale Coal & Coke Co. v. 
 P. R. R., 19 I. C. C. 356. 
 
 Suppose, for example, there are as 
 between two mines A and B of equal 
 capacity on a given day 100 of these 
 specially classified cars specifically 
 directed to the A mine for bilhng and 
 80 of the general system cars avail- 
 able for distribution; under these 
 rules the B mine will get all of the 80 
 system cars. If there were 80 special 
 cars for the A mine and 100 system 
 cars, the B mine would get 90 of the 
 system cars, giving the B mine 10 of 
 them. 
 
 [862] 
 
CHAPTER XX 
 
 REGULATION OF FINANCIAL OPERATIONS 
 
 § 950. Provisions of the Act. 
 951. Prohibition of intercorporate relationships. 
 
 Topic A . Supervision of Current Accounting 
 
 § 952. Who must file reports. 
 
 953. Extent of powers over accounts. 
 
 954. Methods of amortization accounting. 
 
 955. Depreciation cannot be capitalized. 
 
 956. Writing off superseded property. 
 
 957. Supervision of fixed charges. 
 
 958. Permanent improvements out of capital. 
 
 959. Absorbing earnings in improvements. 
 
 Topic B. Separation of Interstate Accounts 
 
 § 960. Apportionment of interstate business. 
 
 961. Methods of the division. 
 
 962. Bases of the proportion. 
 
 963. Apportionment of total expense. 
 
 964. Inherent difficulties of the problem. 
 
 965. Comparisons with interstate rates. 
 
 966. Supremacy of the federal system. 
 
 967. Discrimination produced by State action. 
 
 Topic C. Valuation of Carrier's Properties 
 
 \ 968. The tests of the Supreme Court. 
 
 969. The inquiries of the Congress. 
 
 970. The investigations of the Commission. 
 
 971. Necessity for official valuations. 
 
 972. Valuation based upon investment. 
 
 973. Present value the basis of valuation. 
 
 974. Whether market values should be considered. 
 
 975. Consideration given to the entrepreneur. 
 
 976. Details of the present valuation. 
 
 977. Finality of this valuation. 
 
 Topic D. Prohibition of Intercorporate Relationships 
 
 ( 978. Restraint of trade at common law. 
 
 979. Certain decisions support pooling. 
 
 980. Pooling forbidden by the Commerce Act. 
 
 [ 863 ] 
 
§ 950 ] Railroad Rate Regulation 
 
 § 981. Meaning of the Sherman Act. 
 
 982. Extent of the Clayton Amendments. 
 
 983. Provisions of the Panama Act. 
 
 984. Examples of pooling arrangements. 
 
 985. Certain agreements held valid. 
 
 § 950. Provisions of the Act. 
 
 The scope of the powers of the Commission vmder sec- 
 tion 20 has akeady been indicated. As to reports from the 
 carriers subject to its jurisdiction, the Commission requires 
 annual reports in such form as it prescribes to elicit such 
 information as it may desire. Such annual reports shall 
 show in detail the capital accounts of the corporation and 
 the dividends paid, including the funded and floating debt 
 and the interest and cost therefor and also the operating 
 expenses and receipts therefrom iacluding the amounts 
 expended in betterments and improvements, together 
 with the balances of profit and loss, and a complete ex- 
 hibit of the financial operations for the year, including 
 an annual balance sheet. The Commission has authority 
 by general or special orders to require the carriers to 
 file monthly reports of earnings and expenses, and to file 
 periodical or special, or both periodical and special, re- 
 ports concerning any matters about which the Commission 
 is authorized or required to inquire or to keep itself in- 
 formed or which it is required to enforce. As to accounts 
 the Commission may by further provisions of section 20 
 prescribe the forms of any and all acccounts to be kept 
 by carriers including all memoranda relating thereto, and 
 it may impose upon the carriers a uniform system of ac- 
 counting. The Conmiission has access to all accounts^ 
 records, and memoranda kept by carriers subject to this 
 Act, and it shall be unlawful for such carriers to keep any 
 other accounts, records, or memoranda than those pre- 
 scribed or approved by the Commission. Reference should 
 also be made to the Valuation Act of 1903, providing that 
 the Commission shall investigate, ascertain, and report 
 the value of all the property owned or used by every 
 [864] 
 
Regulation of Financial Opekations [ § 951 
 
 cominon carrier subject to the provisions of this Act. 
 As a result of its investigations, the Commission shall 
 make an inventory which shall list the property and that 
 of every common carrier subject to the provisions of this 
 Act in detail, and show the value thereof as hereinafter 
 provided, and shall classify the physical property, as 
 nearly as practicable, in conformity with the classification 
 of expenditures for road and equipment, as prescribed by 
 the Commission so that once made the figures can be 
 kept current. 
 
 § 951. Prohibition of intercorporate relationships. 
 
 As to pooling the original Act provided that it should 
 be unlawful for any common carrier subject to its provi- 
 sions to enter into any contract, agreement, or combination 
 with any other common carrier or carriers for the pooling 
 of freights of different and competing railroads, or to 
 divide between them the aggregate or net proceeds of the 
 earnings of such railroads, or any portion thereof; and in 
 any case of an agreement for the pooling of freight as 
 aforesaid, each day of its continuance shall be deemed a 
 separate offense. Reference should also be made to the 
 Sherman Anti-Trust Law declaring against all combina- 
 tions in restraint of trade and conspiracies against com- 
 merce between the States. Of course, any such action 
 if proved against carriers very obviously would constitute 
 restraint of interstate commerce, a thing which it is diSicult 
 to prove in the case of merchants in manufacturing busi- 
 nesses of the times. Furthermore, as to intercorporate 
 relations it has recently been provided in the Panama Act 
 of 1912 that unless it appears to be in the interest of the 
 public railroads cannot own competing water lines, the de- 
 termination of that question being left to the Commis- 
 sion. And by the Clayton Act of 1914 it is provided that 
 there shall be no substantial ownership by stock control 
 in a competing railroad, that question being again left 
 to the Commission. There are also provisions against 
 55 [ 865 ] 
 
§ 952 ] Railroad Rate Regulation 
 
 interlocking directorates, and especially against common 
 control of carrier corporations and supply companies. 
 These various provisions are too elaborate for inclusion 
 in this preliminary section; and so a section is devoted to 
 each later in this chapter. 
 
 Topic A. Supervision of Current Accounting 
 
 § 952. Who must file reports. 
 
 Generally speaking only those concerned with such 
 carriage as the Act has constitutionally subjected to the 
 jurisdiction of the Commission can be called upon to keep 
 their accounts as prescribed by the Commission and report 
 as required by the Act.*" Thus a railroad located alto- 
 gether within a State which keeps itself without any en- 
 tangling arrangements with other carriers is held not to 
 be required by the Act to make any reports to the Com- 
 mission.^i This is so because such companies are not con- 
 sidered as participating in the carriage of goods between 
 the States. On the other hand, where a railroad takes 
 part in the carriage of the traffic between states on any 
 basis which may evidence its participation therein, it 
 thereby becomes a carrier subject to the Act in this re- 
 spect as in all others. This would plainly be in the case 
 where a carrier issues through bills, or accepts a division 
 of the through rate.*^ But in many cases where the 
 concern of the company is less obviously direct, it may 
 still be found to be so far participating in the carriage as 
 
 *° United States ex rel. v. Kansas sion v. Bellaire C. & Z. R. R., 77 
 
 City & So. Ry., 81 Fed. 783. Fed. 942. 
 
 A car ferry company connecting A bridge company which performs 
 
 two interstate rail lines by which no transportation but simply rents 
 
 it is owned is a carrier subject to .its bridge to an interstate carrier, 
 
 the Act although it has no direct need not report to the Commission as 
 
 dealings with the public, and must it is not a carrier subject to the Act. 
 
 report to the Commission keeping its I. C. C. Conference Ruling No. SSL 
 
 accounts as it prescribes. I. C. C. ^^ Interstate Commerce Commis- 
 
 Conference Ruling No. 374. sion v. Seaboard A. L. Ry., 82 Fed. 
 
 " Interstate Commerce Commis- 563. 
 
 [866] 
 
Regulation of Financial Operations [ § 953 
 
 to be subject to the jurisdiction of the Commission. Thus 
 a railroad which ostensibly is only the lessor in an involved 
 arrangement may be obliged to report as provided in the 
 
 Act.^'' 
 
 § 953. Extent of powers over accounts. 
 
 It has lately been decided by the Supreme Court of the 
 United States that the federal government can compel 
 the keeping of the books of a company doing both an 
 interstate and an intrastate business, so as to show the 
 whole operations of the company in such way as the Com- 
 mission may prescribe under the Act.*"' The idea under- 
 lying this is that the knowledge as to all the doings of 
 the company may be necessary to deal intelligently with 
 its interstate business. Following this line of reasoning 
 a Texas court has still more recently held that a State 
 government may compel such carriers to keep its figures 
 as to its interstate business in such ways as may be pre- 
 scribed.^° This result may well be questioned as the 
 analogy drawn ignores the paramount power of the Federal 
 government to brush aside conflicting State rules, to which 
 there is no corresponding power in the States. The extent 
 to which the Commission can go in the exercise of this 
 power over accounts has only very recently been estab- 
 lished. But it is now well settled that leaving to the 
 Commission the carrying out of details in the exercise of 
 its discretion under section 20 to prescribe a uniform 
 system of accounting and bookkeeping for the carriers 
 subject to the Act, does not render this section invalid as 
 a delegation of legislative authority.*" That the enforcing 
 of such a course upon carriers subject to the Act with 
 the disclosures it imposes, even when penalties may be 
 imposed upon the corporation, largely as a result of the 
 
 *' United States v. Union S. Y. & *^ Railroad Commission of Texas 
 
 T. Co., 226 U. S. 286, 33 Sup. Ct. 83. v.^exas & P. Ry. (Tex.), 40 S. W. 
 
 ** Interstate Commerce Commis- 829. 
 sion V. Goodrich Tr. Co., 224 U. S. «« Kansas City So. Ry. v. United 
 
 194, 56 L. ed. 729, 32 Sup. Ct. 436. States, 231 U. S. 423, 34 Sup. Ct. 125. 
 
 [867] 
 
§ 954 ] Railroad Rate Regulation 
 
 information thereby imparted, is not an imreasonable 
 search or seizure such as is defined in the Constitution, 
 is also now clearly established.*^ 
 
 § 964. Methods of amortization accounting. 
 
 As a matter of accounting, depreciation can be taken 
 care of in different ways. There is the method of taking 
 obsolescence from year to year to the amount of the wear 
 for that year, considering that at the first the depreciation 
 is slight; so this line of the depreciation sharply curves 
 off as the effects of the wear accumulate. Then there is 
 the method of equating the depreciation for the whole 
 period of the life of the property, so that the setting aside 
 of that sum each year would produce an amount at the 
 end of the period equal to the amount of the original 
 investment, which is known as the straight line method.^* 
 How these sums in either case shall be handled constitutes 
 another difference. They might actually be set aside in 
 banks as accruing funds, or an equivalent amount in new 
 equipment might be purchased for each year. There are 
 arguments for each of these policies; but it will be noted 
 that the latter is a saving to the public. The company 
 should get its profit each year upon the investment which 
 it is taking this method of keeping good; there should be 
 no business profit upon the sums set aside, however. It 
 follows that by the second method the public really gets 
 additional equipment at its disposal without paying a 
 profit upon it.^^ Whether depreciation should invariably 
 be charged against the operating expenses of the year, or 
 whether if the company has a surplus at any time it may 
 be taken out of that, is not a matter about which one can 
 be dogmatic. But it would seem that it would be prefer- 
 
 *' Baltimore & O. Ry. v. Interstate *' If the requirements for depreciar 
 
 Commerce Commission, 221 U. S. tion are at any time abnormal, they 
 
 612, 55 L. ed. 678, 31 Sup. Ct. 621. may be projected over the operating 
 
 ™ See the general discussion in expenses of several years. Kansas 
 
 the Minnesota Rate Cases, 230 U. City So. Ry. v. United States, 231 
 
 S. 352, 33 Sup. Ct. 729. U. S. 423, 34 Sup. Ct. 125. 
 
 [868] 
 
Regulation of Financial Operations [ §§ 955, 956 
 
 able to charge it annually against the traffic which gets the 
 benefit of the use instead of against shippers at some 
 other period. 
 
 § 966. Depreciation cannot be capitalized. 
 
 It is now well established that not only is it the right 
 of the company to make such a provision, but it is its 
 duty to its bond and stockholders, and, in the case of a 
 public service corporation at least, its plain duty to the 
 public. If a different course were pursued the only method 
 of providing for replacement of property which has ceased 
 to be useful would be the investment of new capital and 
 the issue of new bonds or stocks. This course would lead 
 to a constantly increasing variance between present value 
 and bond and stock capitalization — a tendency which would 
 inevitably lead to disaster, either to the stockholders or to 
 the public, or both.'" If, however, a company fails to 
 perform this plain duty and to exact sufficient returns to 
 keep the investment unimpaired, whether this is the 
 result of unwarranted dividends upon over-issues of se- 
 curities, or of omission to exact proper prices for the out- 
 put, the fault is its own; when, therefore, a public regula- 
 tion of its prices comes under question the true value of 
 the property then employed for the purpose of earning a 
 return cannot be enhanced by a consideration of the errors 
 in management which have been committed in the past. 
 It is entirely consistent with this theory that where a 
 public service corporation raises more money in a particular 
 year than is required for actual depreciation it cannot 
 carry the excess to capital for the purpose of estimating 
 the amount on which it is entitled to pay dividends."^ 
 
 § 966. Writing off superseded property. 
 
 The theory upon which the Commission has acted in 
 formulating its regulations is fully stated in its brief in 
 
 " Knoxville v. Knoxville Water " Louisiana Railroad Comm. v. 
 
 Co., 212 U. S. 1, 53 L. ed. 371, 29 Cumberland Telephone Co., 212 U. 
 Sup. Ct. 148. S. 414, 53 L. ed. 577, 29 Sup. Ct. 357. 
 
 [869] 
 
§ 956 ] Railroad Rate Regulation 
 
 the recent case of the Kansas City Southern Railway,'^ as 
 follows: Depreciation is of two kinds, — (1) that which is 
 not replaced in kind, and (2) that_ which is replaced by 
 improved material. In the first case the property has 
 served its purpose, and only past operations have bene- 
 fited from it. So far as the profits of past operations 
 have not been distributed to the stockholders, they are 
 represented in the Profit and Loss Account, and therefore 
 such an abandonment or depreciation is properly charge- 
 able to that account unless a special depreciation account 
 has been established in anticipation of such abandonments. 
 The other kind of depreciation is the result of changes 
 attributable to the inadequacy of the existing property 
 to meet the demands of the future. Abandonments oc- 
 casioned by changes of this character are therefore charge- 
 able to future earnings, for the reason that the improved 
 condition of the road is not only designed to meet the 
 demands of the future, but presumably will result in econ- 
 omies of operation. The railroad company may, if it 
 sees fit, anticipate general depreciations, and make pro- 
 vision for them by establishing a reserve for the purpose; 
 but if no such provision has been made, the abandonment 
 should be taken care of by charging them to present or 
 future operating expense. After a careful study of this 
 whole situation the Supreme Court committed itself to 
 the extent of holding that although something was to be 
 said for other methods which might have been established, 
 still the question being whether the Commission had ex- 
 ceeded its powers, a statement of its theory was sufficient 
 to show that the regulation was not arbitrary, in the sense 
 of being without reasonable basis, and there was evidence 
 to show that the Commission was warranted in adopting 
 it, as sustained by expert opinion and approved by ex- 
 perience.^' 
 
 ^^ Kansas City So. Ry. v. United current in the courts in Brymer v. 
 States, 231 U. S. 423, 34 Sup. Ct. 125. Butler Water Co., 179 Pa. St. 231, 
 "' See the vague doctrines formerly 36 Atl. 249. 
 
 [870] 
 
Regulation of Financial Opeeations [ § 957 
 
 § 957. Supervision of fixed charges. 
 
 Since it seems to be established that a railroad is only- 
 entitled to earn annually a sum sufficient to pay its oper- 
 ating expenses and a fair return on the present value of the 
 property used for the pubhc, the depreciation regulations 
 of this sort will not tend to decrease the sum on which 
 the company may earn a fair return but will affect the 
 payment of current dividends. It is true that on the 
 question of exactly how that value is to be determined, 
 the law is in a stage of development, but clearly the value 
 as shown by the books, of the property being used for the 
 public, must play an important part in the determination, 
 both when the company itself fixes the rates and when 
 the Commission adjusts them.^^ Valuations for rate 
 purposes which omit the element of depreciation would 
 therefore seem to be erroneous; depreciation is lessened 
 value due to deterioration physically or lack of adaptation 
 to its function. Abandoned property is obviously no longer 
 adaptable to function, and therefore such regulations as 
 are being discussed seem both justifiable and necessary. 
 The railroads argue that the cost of abandoned property is 
 part of the cost of progress, and should therefore be re- 
 tained in the property accounts, runs counter to the whole 
 "present value" theory enounced by the Supreme Court. 
 It would make the actual cost of the plant regardless of 
 depreciation, and not its present value, the test for valua- 
 tion purposes. If property is discarded, it is no longer 
 used for the pubhc, and therefore no return can be earned 
 on it, even though the disallowance of such return results 
 in a decrease or loss of dividends. It may be said that 
 when improvement is made of an existing line, the company 
 has withdrawn no property from public use, since the 
 former construction still serves as a base for the new fine, 
 and hence as a matter of accounting the value of the old 
 line need not be subtracted from the property accounts. 
 
 '<See the elaborate discussion Smytli v. Ames, 169 U. S. 466, 42 
 from the earlier point of view in L. ed. 819, 18 Sup. Ct. 419. 
 
 [871] 
 
§ 958 ] Railboad Rate Regulation 
 
 The reply to that contention would be that, in ascertain- 
 ing present value for rate purposes, a deduction for de- 
 preciation would have to be made to cover the decreased 
 value of the old line when used simply as a base or foimda- 
 tion for the new line with its changed grades. That is, 
 it would not be correct to say that the present value of the 
 line equals the cost of the old line plus the cost of the im- 
 provements.^^ 
 
 § 958. Permanent improvements out of capital. 
 
 Of course, it should be clear that outright new con- 
 struction should not be charged to annual expenditures 
 in any accounting, but that such investments belong in the 
 capital account along with the original outlays in con- 
 struction. Thus no advance in rates should result from 
 construction of branch lines.^* And no permanent im- 
 provements of any sort should be charged to operating 
 expenses for a year."' And as cost of betterments should 
 not be charged to operating expenses, they constitute no 
 justification in themselves for increase in rates.'* The 
 Commission has held consistently to the doctrine that 
 permanent improvements are no part of operating ex- 
 pense.^' Finally when the railroads began to get restive 
 as this ruling based upon this pohcy began to limit their 
 course of finance, suit was brought to enforce the order 
 of the Commission that the carriers desist from this prac- 
 tice. The court fully sustained the Commission,^ dis- 
 tinguishing a former ^ case from the one at bar, as that 
 case was not deaUng with rates of transportation or the 
 rule which should determine them against shippers. But 
 such is not the relation or concern of a shipper of 
 
 "'See Minnesota Rate Cases, 230 ''New York Butter and Cheese 
 
 U. S. 352,-33 Sup. Ct. 729. Rates, 28 I. C. C. 330. 
 
 » City of Spokane v. N. P. Ry., ™ In re Advances in Rates, East- 
 
 19 I. C. C. 162. ern Case, 20 I. C. C. 243. 
 
 ^ Louisville & Nashville Railroad i Illinois C. Ry. v. I. C. C, 206 
 
 Coal and Coke Rates, 26 I. C. C. U. S. 441, 51 L. ed. 1128. 
 
 20. ' Union P. Ry. v. U. S., 99 U. S. 
 
 402, 25 L. ed. 274. 
 
 [872] 
 
Regulation of Financial Operations [ § 959 
 
 lumber. His right is immediate, said the court. He 
 may demand a service. He must pay a toll, but a toll 
 measured by the reasonable value of the service. The 
 elements of that value may be many and complex, not 
 always determinable, as we have seen, with mathematical 
 accuracy, but, we think, it is clear that instrumentaUties 
 which are to be used for years should not be paid for by 
 the revenues of a day or year; and this is the principle 
 of returns upon capital which exists in durable shape. 
 
 § 969. Absorbing earnings in improvements. 
 
 The Commission has from the first been consistently 
 working toward the goal it has now reached. In Central 
 Yellow Pine Ass'n v. Illinois Central Railroad,' the Commis- 
 sion had before it an advance in the rate on yellow pine 
 lumber from points of production in the South to the Ohio 
 River. This advance was justified by the carriers upon the 
 plea that owing to increased cost of operation their net 
 returns were insufficient. In examining this matter the 
 Commission found that the carriers had charged as a part 
 of their operating expenses large sums, which had, in fact, 
 been devoted to the purchase of new equipment and to 
 the making of permanent improvements to their, roadway 
 and structures, and held that these items were not prop- 
 erly chargeable as operating expenses, for the reason that 
 the shipper of to-day, could not be properly required to 
 pay. the entire cost of an improvement or addition which 
 was to be of permanent use. The opinion was expressed 
 that sufficient net returns would appear if these items of 
 permanent use had not been included in the cost of opera- 
 tion. In Tift V. Southern Railway * at about the same time 
 the same contention of inadequacy of earnings was made, 
 and it was found upon examination of the items going to 
 make up the operating expense account, many expenditures 
 which result in the permanent improvement or better- 
 ment of the property of the roads, such as expenditures 
 
 3 10 I. C. C. Rep. 505. ■" 10 I. C. C. Rep. 543. 
 
 [ 873 ] 
 
§ 960 ] Railroad Rate Regulation 
 
 for right of way and station grounds, real estate, grading, 
 tunnels, bridges, trestles and culverts, rails, ties, crossings 
 and cattle guards, telegraph lines, station buildings and 
 fixtures, shops, round houses, turntables, water stations, 
 fuel stations, grain elevators, storage warehouses, docks 
 and wharves, electric hght plants and electric motive 
 power plants, gas making plants, and miscellaneous 
 structures. There were also included expenditures for 
 equipment in the way of locomotives and cars of all kinds. 
 And the Commission thereupon said that they should not, 
 therefore, be taxed as part of the current or operating 
 expenses of a single year, but should be so far as prac- 
 ticable and so far as rates exacted from the pubhc are 
 concerned, "projected proportionately over the future." 
 
 Topic B. Separation of Interstate Accounts 
 
 § 960. Apportionment of interstate business. 
 
 Where a road runs through several States the Constitu- 
 tion as interpreted by the Supreme Court of the United 
 States requires that the value of the plant utilized in the 
 intrastate business and the net earnings from such busi- 
 ness must both be ascertained in order to determine 
 whether the rates fixed by the State or its Commission 
 are reasonable or confiscatory, tn the leading case in the 
 United States Supreme Court on , this point Smyth v. 
 Ames,^ Mr. Justice Harlan said: "In our judgment, it 
 must be held that the reasonableness or unreasonableness 
 of rates prescribed by a State for the transportation of per- 
 sons and property wholly within its limits must be de- 
 termined without reference to the interstate business done 
 by the carrier, or to the profits derived from it. The State 
 cannot justify imreasonably low rates for domestic trans- 
 portation, considered alone, upon the ground that the car- 
 rier is earning large profits on its interstate business, over 
 which, so far as rates are concerned, the State has no con- 
 
 6 169 U. S. 466, 42 L. ed. 89, 18 Sup. Ct. 418. 
 
 [874] 
 
Regulation of Financial Opeeations [ § 961 
 
 trol. Nor can the carrier justify unreasonably high rates 
 on domestic business upon the ground that it will be able 
 only in that way to meet losses on its interstate business. 
 So far as rates of transportation are concerned, domestic 
 business should not be made to bear the losses on inter- 
 state business, nor the latter the losses on domestic busi- 
 ness." " 
 
 § 961. Methods of the division. 
 
 The method of procedure in such a case is to find what 
 part of the gross receipts is derived from business within 
 the State, and then find the actual cost of doing the 
 business. This cannot be found by taking a proportionate 
 part of the cost for the entire line, since the cost of moving 
 local freight is greater than that of moving through freight. 
 "Additional fuel is consumed at each station where there 
 is a stop. The wear and tear of the locomotive and cars 
 from the increased stops and in shifting cars from main 
 to side tracks is greater; there are the wages of the em- 
 ployees at the intermediate stations, the cost of insurance, 
 and these elements are so varying and uncertain that it 
 would seem quite out of reach to make any accurate com- 
 parison of the relative cost. And if this is true when there 
 are two separate trains, it is more so when the same train 
 carries both local and through freight. It is impossible 
 to distribute between the two the relative cost of carriage. 
 Yet that there is a difference is manifest, and upon such 
 difference the opinions of experts familiar with railroad 
 business is competent testimony, and cannot be disre- 
 garded. The fact that an exact mathematical computa- 
 tion of the cost is impossible is immaterial; the cost 
 must be found, as best it may, before the reasonableness 
 
 ^ In Minnesota the State court there was not any good reason why 
 
 had taken the other alternative pos- a railway system should be divided 
 
 sible by assuming that a similar rate on State lines at all. Steenerson v. 
 
 would be adopted throughout the Gt. Northern Ry. Co., 69 Minn, 
 
 whole system, the court feeling that 353, 72 N. W. 713. 
 
 [875] 
 
§ 962 ] Railroad Rate Regulation' 
 
 of the local rate can be determined. There are many 
 things that have to be determined by court and jury in 
 respect to which mathematical accuracy is not possible." ' 
 
 § 962. Bases of the proportion. 
 
 In one of the State cases * the problem was discussed in 
 this manner: "The other issue the respondent has like- 
 wise failed to meet. Taking the figures from the brief 
 filed by the respondent, we find that the local business 
 alone produces a net earning of at least 3 per cent, on the 
 total value of the road in Florida, charging against such 
 income the whole of the taxes. While a State is not per- 
 mitted to offset local business against interstate business, 
 and to justify low local rates by reason of the profitable- 
 ness of the latter, yet the interstate and foreign business 
 may and should be considered in determining the pro- 
 portion of the value of the property of the company 
 assignable to local business. There is no proper showing 
 of the interstate and foreign business, so that we may de- 
 termine on what fraction of the whole value of the prop- 
 erty in Florida the company might be entitled to earn an 
 income from local business. There is, however, a showing 
 that the interstate and foreign business is large, and on 
 a proper showing and a proper proportioning of the serv- 
 ice between domestic and foreign business this percentage 
 of net income would be largely increased. Under the 
 scheme of distribution of the earning of the whole road 
 between the several States through which it runs, a ton 
 of Florida oranges or early vegetables is allowed the same 
 credit as a ton of coal in Virginia, and no more. We 
 have examined with care all the rate cases decided by the 
 Supreme Court of the United States, and see nothing 
 therein to conflict with the views expressed above." 
 
 ' Chicago, M. & St. P. Ry. v. « State v. Atlantic C. L., 48 Fla, 
 
 Tompkins, 176 U. S. 167, 44 L. ed. 114, 37 S.o. 657. 
 418, 20 Sup. Ct. 336, reversing S. C. 
 90 Fed. 363. 
 
 [876] 
 
Regulation of Financial Operations [ §§ 963, 964 
 
 § 963. Apportionment of total expense. 
 
 The recent State legislation reducing passenger fares 
 could only apply to intrastate business. To determine 
 whether this reduction was unjustifiable the Federal courts 
 saw that they were required not only to allocate the re- 
 spective costs of passenger and freight business but also 
 to apportion these to the intrastate and interstate business. 
 In one of the latest cases" on this subject Judge McPherson 
 narrowed the discussion to two theories — the mileage 
 proportion and the revenue proportion. He admitted that 
 neither of these would result in mathematical accuracy; 
 but he insisted that as a practical matter the one which 
 promised to be most satisfactory should be taken as the 
 basis of action. "The theory to now recognize must be 
 either the proportion of earnings, State or interstate, or 
 ton and passenger mUe." After reviewing what few cases 
 there are bearing upon the point, all of which agree upon 
 the greater proportionate cost of local business as com- 
 pared with through business, he said that, although other 
 standards are suggested, the more satisfactory and accu- 
 rate was "the difference in cost in relation to the revenue." ^° 
 
 § 964. Inherent difficulties of the problem. 
 
 The interblending of operations in the conduct of inter- 
 state and local business by interstate carriers is apparent. 
 The same right of way, terminals, rails, bridges, and sta- 
 tions are provided for both classes of traffic; the propor- 
 tion of each sort of business varies from year to year, and 
 indeed, from day to day. It may be urged, therefore, no 
 
 » In St. Louis & S. F. R. R. Co. v. i» In Washington So. Ry. v. Com. 
 
 Hadley, 168 Fed. 317. (Va.), 71 S. E. 539, the court refused 
 
 Citing Northern Pacific R. R. Co. in the absence of proof by the carrier 
 
 V. Keyes, 91 Fed. 47; Chicago, M. of the proportions of its interstate 
 
 & St. P. Ry. Co. V. Smith, IIO Fed. and intrastate accounts to protect 
 
 473; In re Arkansas R. R. Rates, it from the operation of a 2}^ cent 
 
 163 Fed. 141; Chicago, M. & St. P. per mile passenger rate order of the 
 
 Ry, Co. V. Tompkins, 176 U. S. 167, State Commission. 
 44 L. ed. 417, 20 Sup. Ct. 336. 
 
 [877] 
 
§ 965 ] Railroad Rate Regulation 
 
 regulation of rates can be just which does not take into 
 consideration the whole field of the carrier's operations, 
 irrespective of State lines. And attention is drawn to 
 the extreme difficulty and intricacy of the calculations 
 which must be made in the effort to establish a segrega- 
 tion of intrastate business for the purpose of determining 
 the return to which the carrier is properly entitled there- 
 from. Yet realizing all this the Supreme Court said in 
 the Minnesota Rate Cases:" "But these considerations 
 are for the practical judgments of Congress in determining 
 the extent of the regulation necessary under existing con- 
 ditions of transportation to conserve and promote the 
 interests of interstate commerce. If the situation has 
 become such, by reason of the interblending of the inter- 
 state and intrastate operations of interstate carrier, that 
 adequate regulation of their interstate rates cannot be 
 maintained without imposing requirements with respect 
 to their intrastate rates which substantially affect the 
 former, it is for Congress to determine, within the limits 
 of its constitutional authority over interstate commerce 
 and its instruments the measure of the regulation it should 
 supply." "" 
 
 § 965. Comparisons with interstate rates. 
 
 The fact that a rate does not cross a State line is no 
 reason why it may not be considered when an interstate 
 rate over the same line and for substantially the same 
 distance is imder examination. '^ The rates established by 
 a State Commission cannot be taken as conclusive of the 
 unreasonableness of higher interstate rates between the 
 
 " 230 U. S. 352, 33 Sup. Ct. 729. a state will apparently be allowed to 
 ''" It should be noted that, with justify its requirement, if the busi- 
 what seems an inconsistency, the ness of the system as a whole is prof- 
 regulation of service is not dealt itable. Atlantic C. L. Ry. v. No. 
 with as precisely in this matter as Car. Corp. Comm., 206 U. S. 1, 51 
 the regulation of rates; at all events, L. ed. 993, 27 Sup. Ct. 585. 
 in ordering a service to be performed " Board of Mayor and Aldermen 
 within its borders the commission of v. V. & S. W. Ry., 15 I. C. C. 453. 
 
 [878] 
 
Reguiation of Financial Operations [ § 966 
 
 same points, since the rates voluntarily established by a 
 carrier are entitled to the same presumption of unreason- 
 ableness as that attaching to rates prescribed by a State 
 Conunission." In determining the reasonableness of an 
 interstate rate, the decisions of the several State Commis- 
 sions are worthy of consideration; but the Commission 
 is not justified in accepting a comparison of lower in- 
 trastate rates prescribed by the State authorities, with 
 those applying on interstate traffic as conclusive of the 
 unreasonableness of the interstate rates. ^'' While in de- 
 termining interstate rates similar rates established by 
 State authority must have great influence, especially 
 where they have been long acquiesced in by the carriers; 
 still such rates have no binding force upon the Commis- 
 sion, and where the Commission finds the State rates un- 
 reasonable, a through interstate rate may be established 
 by it higher than the sum of the State locals. '° The Com- 
 mission is not controlled by the rates established by State 
 Commission, unless they seem to be reasonable when ap- 
 plied to interstate movement." Certainly a low State rate 
 is no reason for exacting unreasonable interstate rates. '^ 
 
 § 966. Supremacy of the federal system. 
 
 The Shreveport case'* recently decided by the Supreme 
 Court has resolved most of the doubts in relation to the 
 situation in question. This appeal to the courts was the 
 result of an order of the Commission directing the carriers 
 concerned "to duly and justly equalize the terms and 
 conditions" upon which they will extend "transportation 
 to traffic of a similar character, moving into Texas from 
 Shreveport, with that moving wholly within Texas." In 
 
 1' Paola Refining Co. v. M., K. & " Bartles Oil Co. v. C, M. & St. 
 
 T. Ry., 15 I. C. C. 29. P. Ry., 17 I. C. C. 146. 
 
 » Marshall Oil Co. v. C. & N. W. " Fort Dodge Commercial Club v. 
 
 Ry., 14 I. C. C. 210. I. C. R. R., 16 I. C. C. 572. 
 
 15 Corn Belt Meat Producers Ass'n i* Houston, E. & W. T. Ry. v. 
 
 V. C, B. & Q. Ry., 14 I. C. C. United States, 234 U. S. 833, 34 Sup. 
 
 376. Ct. 833. 
 
 [879] 
 
§ 967 ] Railroad Rate Regulation 
 
 affirming this order in principle the Supreme Court said: 
 "It is also clear that, in restraining the injurious discrimina- 
 tions against interstate traffic arising from the relation of 
 intrastate to interstate rates, Congress is not bound to 
 reduce the latter below what it may deem to be a proper 
 standard, fair to the carrier and to the public. Otherwise, 
 it could prevent the injury to interstate commerce only 
 by the sacrifice of its judgment as to interstate rates. Con- 
 gress is entitled to maintain its own standard as to these 
 rates, and to forbid any discriminatory action by inter- 
 state carriers which will obstruct the freedom of move- 
 ment of interstate traffic over their lines in accordance 
 with the terms it establishes. Having this power. Congress 
 could provide for its execution through the aid of a sub- 
 ordinate body; and we conclude that the order of the 
 Commission now in question cannot be held invalid upon 
 the ground that it exceeded the authority which Con- 
 gress could lawfully confer." 
 
 § 967. Discrimination produced by State action. 
 
 The orders of a State commission do not justify in- 
 terstate discriminations.^^ But the Commission cannot 
 remove such discrimination by reducing State rates.-" 
 However for a carrier to apply higher rates to interstate 
 than to State traffic under like conditions is a violation 
 of the law.^^ An order of a State railroad commission 
 enforcing discriminations against interstate commerce is 
 not acceptable under the Act.-- Where jobbing centers are 
 situated near State lines, an advance of the interstate 
 charge and the retention of the present charge on State 
 shipments inevitably results in a discrimination against 
 the former.-^ There are many reasons why State and inter- 
 
 " R. R. Commission of La. v. ^^ Cement Rates from Pennsyl- 
 
 St. L. S. W. Ry., 23 I. C. C. 31. vania to New Jersey, 26 1. C. C. 
 
 2» Andy's Ridge Coal Co. v. S. 687. 
 Ry., 18 I. C. C. 405. "" In re Rates for Single Packages, 
 
 2' Keogh V. M., St. P. & S. Ste. M. 22 I. C. C. 328. 
 Ky., 13<i 1. C. C. 73. 
 
 [880] 
 
Regulation of Financial Operations [ § 968 
 
 state rates should be established in harmony with one 
 another; and when the Commission is asked to examine 
 the reasonableness of an interstate rate, similar rates 
 established by State authority in that territory must 
 have great influence, especially where they have been long 
 acquiesced in by the carriers." Still these State rates 
 have no binding force upon the Commission; they are 
 standards of comparison of greater or less value, accord- 
 ing as they appear to be just and reasonable. Low State 
 rates cannot be neutralized by increases in interstate 
 rates; ^'^ for a carrier cannot lawfully discriminate against 
 interstate in favor of intrastate traffic. ^^ 
 
 Topic C. Valuation of Carrier's Property 
 
 § 968. The tests of the Supreme Court. 
 
 Any discussion as to what principles are to be con- 
 sidered as weighing with the courts in the determination 
 of capital always recurs to this significant paragraph in 
 Smyth V. Ames." "We hold that the basis of all cal- 
 culations as to the reasonableness of rates to be charged 
 by a corporation maintaining a highway under legislative 
 sanction must be the fair value of the property being 
 used by it for the convenience of the public. And in 
 order to ascertain that value, the original cost of con- 
 struction, the amount expended in permanent improve- 
 ments, the amount and market value of its bonds and 
 stock, the present as compared with the original cost of 
 construction, the probable earning capacity of the property 
 under particular rates prescribed by statute, and the sum 
 required to meet operating expenses, are all matters for 
 consideration, and were to be given such weight as may 
 be just and right in each case. We do not say that there 
 may not be other matters to be regarded in estimating 
 
 '* Corn Belt Meat Producers' Ass'n ^* In re Advances on Hay, 25 I. C. 
 
 V. C, B. & Q. Ry., 14 I. C. C. 376. C. 680. 
 
 =s Commercial Club of Omaha v. " igg u. S. 466, 42 L. ed. 819, 18 
 
 Anderson & Saline River Ry., 18 I. Sup. Ct. 419. 
 C. C. 532. 
 
 56 [ 881 ] 
 
§§ 969, 970 ] Raileoad Rate Regulation 
 
 the value of the property. What the company is entitled 
 to ask is a fair return upon the value of that which it 
 employs for the public convenience." ^* 
 
 § 969. The inquiries of the Congress. 
 
 It has been seen that many theories as to the basis 
 to be taken in valuing the property of public utilities 
 have been advanced at different times; and that indeed 
 each of them has its advocates at the present day. The 
 actual securities at present outstanding are by a few still 
 regarded as sacred, while at the other extreme are those 
 who would protect nothing but the estimated cost of 
 theoretically reproducing the physical properties less the 
 demonstrated depreciation of the actual properties. The 
 serious issue is between two remaining theories, one taking 
 the actual cost from first to last of the properties in ques- 
 tion as the base, the other seeking to determine the pres- 
 ent value of these properties as going concerns.^' A close 
 reading of the recent Act of Congress ordering the valuation 
 of the railways will show that all of these theories at 
 least must have been in the minds of the lawmakers. The 
 Commission is expressly directed to determine individually 
 and report separately the amount of securities outstanding 
 and the circumstances surrounding their issue, the cost of 
 reproduction, and what deduction should be made for 
 actual depreciation, the original cost to date of each 
 piece of property owned by the carrier, and all the elements 
 of value discoverable in the properties under examination. 
 Congress is making no decisions as yet; it is asking that 
 all the facts may be brought out.^° 
 
 § 970. The investigations of the Commission. 
 
 Since its organization the Commission had occasion 
 several times to inquire into the justification for more 
 
 ^* The inconsistency of these tests -' See the Advances in Rates Cases 
 
 has often been pointed out by the of 1910, 20 I. C. C. 243. 
 
 Commission, see Re Advances in ™ See the Five Per Cent Cases of 
 
 Freight Rates, 9 I. C. C. 391, passim. 1914, Aug. 2 and Deo. 18, 1914. 
 
 [882] 
 
Regulation or Financial Operations [ § 971 
 
 or less general advances in freight rates, which have been 
 scheduled from time to time by the trunk lines. It has 
 always been urged by counsel at such times that the rail- 
 roads should have the right to advance rates until it was 
 shown that they were earning more than a fair return upon 
 their outstanding capitaUzation. The Commissioners have, 
 therefore, felt called upon to indicate in elaborate opinions 
 their views upon this troublesome question of the proper 
 basis of capital charges. They have thus discussed and 
 criticised all of the existing theories ;' and quotations from 
 their opinions on various points will therefore be made in 
 the following paragraphs. '^ Before 1910 the railroads 
 could put in force schedules advancing their rates, leaving 
 it to subsequent proceedings before the Commission to 
 show that the rates were unreasonable. But to prevent 
 this in 1910 legislation was passed giving the Commission 
 power to suspend advances in rates pending an investiga- 
 tion to their reasonableness.^^ From time to time very 
 frequently of late years the Commission has conducted 
 special investigations of the financial conditions of certain 
 systems. These have been held either by express direction 
 of Congress or one of the houses thereof, or as part of some 
 proceeding before it or as an independent investigation on 
 its own initiative.^' In these investigations it has had 
 occasion to inquire into the issue of securities, the bases 
 of capitalization, the allocation of charges, and the provision 
 of depreciation. A great amount of material for study 
 has thus been accumulated.'^ 
 
 § 971. Necessity for official valuations. 
 
 Previous to the recent legislation directing the Com- 
 mission to undertake a valuation of the railroads of the 
 
 " See particularly Re Advance in N. H. & H. Finances, and the St. 
 
 Freight Rates, 9 I. C. C. Rep. 391, Louis & S. F. Investigation. 
 passim. " See also the Chicago, M. T. P. 
 
 '2 See also Re Advances in Rates, S. Accounts, and the New York C. & 
 
 20 I. C. C. Rep. 243, passim. H. R. R. R. Consohdation. 
 
 " See particularly the New York, 
 
 [883] 
 
§ 972 ] Railroad Rate Regulation 
 
 country the Commission has often remarked that it has 
 no authority to put a value upon railroad property or to 
 prescribe elements, to be considered in determining that 
 \'alue.^^ And it has had occasion to remark that if any 
 importance whatever is to be attached to the cost of 
 reproduction in the establishment of railway rates, the 
 valuation must be undertaken by the Government itself.'^ 
 It is plain that until there be fixed, either by legislative 
 enactment or judicial interpretation, some definite basis 
 for the valuation of railroad property and some limit up 
 to which that property shall be allowed to earn upon that 
 valuation, there can be no exact determination of these 
 questions.'^ In the absence of such a standard the tribu- 
 nal, whether court or commission, which is called upon to 
 consider this matter, can only rely upon the exercise of its 
 best judgment.'* How the Commission is likely to be in- 
 clined in dealing with the valuation of the properties of the 
 carriers may only be judged from what it has said already 
 in former investigations, so far as these have a general 
 character; and therefore, some quotations from the most 
 important of them will be made at this point. 
 
 § 972. Valuation based upon investment. 
 
 It is often urged that the money actually invested in a 
 railway ought to furnish a basis upon which returns should 
 be made, and this is at first thought a plausible suggestion 
 and might in many cases be a reasonably just one. In 
 many cases it would not, as the Commission has pointed 
 out. "It was said in argument before the Commission re- 
 cently that the capitalization of the Mobile & Ohio Rail- 
 way represented the actual money which had been in- 
 vested in that property, and no more. This road was 
 largely obliterated by the civil war, and was operated at 
 
 *^ In re Advances in Rates, East- '' Re Advances in Freight Rates, 9 
 
 em Case, 20 I. C. C. 243. I. C. C. Rep. 382. 
 
 ™ City of Spokane v. N. P. Ry., '« Morgan Grain Co. v. A. C. L. R., 
 
 15 I. C. C. 376. 19 I. C. C. 460. 
 
 [884] 
 
Regulation of Financial Operations [ § 973 
 
 great loss during that war. All this is now represented in 
 its capital stock. Should the stockholders of that railway 
 company be indemnified for the loss of their property 
 when almost every species of property in that section was 
 destroyed? Where there is no question of war, or its 
 devastations, the money actually paid into a railway prop- 
 erty may represent all manner of waste and extravagance. 
 Clearly the public ought not to pay this.'^ It is fre- 
 quently claimed that a railroad should be allowed to earn 
 upon the basis of its capitalization. Such a test as this 
 is even worse than the last preceding, for while money 
 actually invested in a railway property may represent 
 disaster or extravagance, or even positive dishonesty, 
 there are numerous cases where the capital stock of such 
 company represents absolutely nothing whatever. The 
 Erie Railway is capitalized at the present time for nearly 
 $300,000 per mile. The Lake Shore & Michigan Southern 
 Railway, which is in a way a parallel and competing line, 
 and in every sense better in point of construction and 
 equipment, is capitalized for about $100,000 per mile. 
 These two roads both carry grain from Chicago to New 
 York; the Lake Shore much more economically than the 
 Erie; and the rate must be the same by both. Which 
 capitalization shall govern?" 
 
 § 973. Present value the basis of valuation. 
 
 The railways have succeeded in their contention that 
 they should be allowed to earn interest on their funded 
 debts and a dividend upon their capital stock so far as 
 this is a fair return upon the value of that which it em- 
 ploys for the public convenience. "But," said the Commis- 
 sion in one investigation, "what is the value of a railway? 
 Does not that value depend almost wholly upon the rate 
 which it is permitted to charge? If the rates upon a rail- 
 way system are reduced without thereby stimulating the 
 movement of traflBc the value of the property is diminished. 
 
 =9 Re Advances in Freight Rates, 9 I. C. C. 391. 
 
 [885] 
 
§ 974 ] Railroad Rate Regulation 
 
 If its rates are advanced without loss of traffic the value of 
 its property is increased. Stated in another way: the 
 value of a railway depends upon what it can earn on the 
 basis of a reasonable rate, and the reasonableness of a 
 rate depends upon the return which it will yield upon the 
 value of the property." *° The cost of reproducing rail- 
 way property has been suggested as a basis upon which 
 return should be allowed. "But this, while of great 
 assistance in arriving at a just result, could not be taken 
 as an exclusive guide. Many of our railways were built 
 years ago, when the cost of construction was much greater 
 than now. In the development of that industry they 
 have been reconstructed and improved. The first outlay 
 has perhaps been rendered practically worthless, and a 
 railway honestly managed, never having paid excessive 
 dividends, may actually represent to-day much more 
 money than the present cost of building. Those who 
 originally invested their money in this enterprise and have 
 kept pace with the public necessities ought not to be re- 
 quired to bear the entire burden of this shrinkage." 
 
 § 974. Whether market values should be considered. 
 
 There is another aspect in which this stock and bond 
 factor is important.*^ "The Government has invited private 
 capital to invest in the construction and operation of these 
 public utilities. While it might have established the rate, 
 it has left that to competitive forces. The public has for 
 many years known the results of the operations of these 
 defendants, and their securities have thereby acquired 
 certain values upon the market. At these values enormous 
 private investments have been made. Now, this Govern- 
 ment having permitted this to be done cannot close its 
 eyes to the fact that it has been done. We cannot be ob- 
 livious to the effect of our action upon the value of these • 
 investments, which have been made in good faith. In 
 
 " Re Advances in Freight Rates, Co. v. Pub. U. Comm'rs, N. J. Ct. E. 
 supra. & App., filed Dec. 9, 1914. 
 
 *' See the opinion in Public Serv. 
 
 [886] 
 
Regulation of Financial Operations [ § 975 
 
 this view the market value of these stocks and bonds 
 for the last 10 years certainly, and the effect which our 
 action may have upon their market value for the future, 
 must be considered. We cannot, of course, allow such 
 rates as will in all cases guarantee or perpetuate the prices 
 at which these stocks have been bought, but in viewing 
 the entire situation we should have it in mind." ^^ 
 
 § 975. Consideration given to the entrepreneur. 
 
 The suggestion was thrown out in one opinion of the 
 Commission ^^ that a certain return upon the ability to 
 conceive and execute the project might be taken into 
 consideration. But in the light of the context, this ap- 
 pears to be no more than a fair return upon the invest- 
 ment. The quotation follows: "As already remarked, 
 the Southern Railway is the consolidation of numerous 
 independent railroad properties. It has become through 
 this process of growth a great railroad system embracing 
 to-day a mileage of more than 6,000 miles. In this opera- 
 tion properties which were worthless have been put to- 
 gether to form a valuable whole. The physical condition 
 of those properties has been enormously improved. The 
 facilities afforded to their patrons have been increased. 
 The whole territory involved must be benefited by this 
 amalgamation, so far as its physical service is concerned. 
 This enterprise is a perfectly legitimate one. The men who 
 have conceived and executed it are entitled to a fair re- 
 turn upon the money which has been actually invested 
 in it. They are entitled, in addition, to a reasonable 
 profit on the ability to conceive and execute a project of this 
 sort. They have no right to exact a return upon an ex- 
 travagant capitalization, but whatever has honestly and 
 in good faith and reasonably gone into this enterprise 
 • should be protected. On the other hand, the people in 
 this territory are entitled to protection." 
 
 " Re Advances in Rates, Eastern " Danville v. Southern Ry., 8 I. 
 
 Case, 20 I. C. C. 243. C. C. Rep. 409. 
 
 [887] 
 
§§ 976, 977 ] Railroad Rate Regulation 
 
 § 976. Details of the present valuation. 
 
 In ascertaining the original cost to date of the proper- 
 ties of the railroads the Commission is instructed in the 
 Act of 1913 in addition to such other elements as it may 
 deem necessary to report upon the history and organiza- 
 tion of the present and any previous corporation operating 
 the roads. There must be ascertainment and report upon 
 increases or decreases of stocks and bonds and the moneys 
 or properties received therefor, and specifically the syn- 
 dicating, banking and other financial arrangements under 
 which such issues were made and the expense thereof. 
 And furthermore, there must be investigation of the ex- 
 penditure of all moneys by all these corporations and the 
 purposes for which these expenditures were made in detail. 
 Every railroad must furnish to the Commission maps, 
 profiles, contracts relating to its construction and give 
 the Commission free access to its accounts, records and 
 memoranda. And unless otherwise ordered by the Com- 
 mission with statement of the special reasons therefor, 
 the records and data so collected by the Commission shall 
 be open to the inspection and examination of the public. 
 To what extent the original cost can be worked out from 
 what papers there have been preserved of the many cor- 
 porations which went out of existence so long ago, is prob- 
 lematical. In most of those cases the original investors 
 were losers; and reorganization proceedings have covered 
 over their losses. Indeed, there seems to be little doubt 
 that if all the capital actually put into the construction 
 of our railroads taken as a whole could be discovered it 
 will be found that the present net earnings of the rail- 
 roads, taken together, would make so moderate a per cent 
 that the cry could never again be raised that our railroads 
 are taking exorbitant profits. 
 
 § 977, Finality of this valuation. 
 
 The Commission is instructed generally to give an an- 
 alysis of the methods of valuation employed, and to ex- 
 [8881 
 
Regulation of Financial Opeeations [ § 978 
 
 plain the reasons for differences resulting from employing 
 the differing bases indicated. As the Commission will 
 have large sums at its disposal to employ experts in the 
 field of valuation their report ought to go far toward 
 clearing up the difficulties which have just been discussed. 
 One may hope that out of this investigation may come at 
 least an agreement as to the basis of valuation, and an 
 understanding of the application of the principles deter- 
 mined. The Commission is to move with some caution, 
 the first appraisals of a given property being regarded as 
 tentative. It is open to any company reported to apply 
 for special hearing in its own case. Should, however, 
 the company let thirty days pass without protest after 
 the appraisal has been served upon it the valuation is 
 said to be final. And yet it is open apparently to the 
 company to introduce in court proceedings, where this 
 final valuation is brought in evidence, additional evidence 
 as to the real valuation. Thereupon the new evidence is 
 transmitted to the Commission for further examination; 
 and their report thereon is to be final. And yet one 
 wonders whether this is an ultimate finality. Can the 
 power be taken from the courts to determine by what 
 fScts and under what theories one shall be deprived of his 
 all by governmental bodies? Perhaps by the time this 
 question comes to the courts of last resort people will 
 feel that we should not expect to hold any rights, however 
 fundamental, save at the disposal of the commissions 
 set over us to take us in charge. 
 
 To-pic D. Prohihitiok of Intercorporate Relationships 
 
 § 978. Restraint of trade at common law. 
 
 In accordance with the doctrines in the common law 
 from time immemorial against restraint of trade, any ar- 
 rangements between carriers for pooling their business in 
 any way must inevitably be held invalid as in restraint 
 of trade, unless some distinction is taken by reason of 
 the peculiarity of their situation. The most lucid state- 
 
 [ 889 ] 
 
§ G79 ] Railroad Rate Regulation 
 
 ment of the actual law is that of Mr. Justice Calwell, 
 in one of the more recent Federal cases ^* where all relief 
 was refused one party to an elaborate pooling contract 
 against another for refusal to account according to its 
 terms, upon these general principles thus succinctly stated: 
 "A railroad company is a quasi-pubUc corporation, and 
 owes certain duties to the public, among which are the 
 duties to afford reasonable facilities for the transportation 
 of persons and property, and to charge only reasonable 
 rates for such service. Any contract by which it disables 
 itself from performing these duties or which makes it to 
 its interest not to perform them, or removes all incentive 
 to their performance, is contrary to public policy and 
 void." ^' 
 
 § 979. Certain decisions support pooling. 
 
 However, there are a few cases which hold that pooling 
 in public services instead of being peculiarly illegal, should 
 really be regarded as truly in accordance with public in- 
 terests, and therefore not against public policy. To this 
 view many economists and some legists incline. Indeed, 
 this seems to be the English law,"*" which is followed in a 
 few American jurisdictions.''^ In the leading English ca4Be 
 just cited. Vice Chancellor Wood dismissed the argument 
 that the pooling agreement which was being questioned 
 was against public policy by saying: "It is a mistaken 
 notion that the public is benefited by pitting two railway 
 companies against each other till one is ruined, the result 
 being, at last, to raise the fares to the highest possible 
 standard." Strong though this argument may be, it must 
 address itself now to the legislative branch; the weight of 
 authority against it at common law is overwhelming. 
 
 "Chicago, M. & St. P. Ry. v. water, 4 Denio, 349, 47 Am. Dec. 258. 
 
 Wabash, St. L. & P. Ry., 61 Fed. «« Hare v. London & Northwestern 
 
 993, 9 C. C. A. 659. Ry., 2 Johns. & H. 80. 
 
 « Citing Gibbs v. Consohdated " Manchester & L. R. R. Co. v. 
 
 Gas Co., 130 U. S. 396, 9 Sup. Ct. Concord R. R., 66 N. H. 100, 20 Atl. 
 
 553, 32 L. ed. 979; Hooker v. Vande- 383, 9 L. R. A. 689. 
 
 [8901 
 
Regulation of Financial Operations [ §§ 980, 981 
 
 § 980. Pooling forbidden by the Commerce Act. 
 
 Any arrangement, oral or otherwise, or combination, 
 which has for its purpose and eventuates in the pooling 
 of freights of different and competing railroads, comes 
 within the inhibition of the Act. The statute contem- 
 plates two methods of pooling, both of which are pro- 
 hibited: First, a physical pool, which means a distribution 
 by the carriers of property offered for transportation 
 among different and competing railroads in proportions 
 and on percentages previously agreed upon; and, secondly, 
 a money pool, which is described best in the language 
 of the statute, "to divide between them [different and 
 competing railroads] the aggregate or net proceeds of the 
 earnings of such railroads, or any portion thereof." The 
 statute provides for the indictment not only of the carrier 
 itself, but also of the officers individually where the car- 
 rier is a corporation, so that in such case both are in- 
 dictable.^* But apparently an agreement between rail- 
 roads for a divisioA of territory into which each may 
 extend branch lines is not covered by the Act.^* 
 
 § 981. Meaning of the Sherman Act. 
 
 The railroad pools were the first commercial combina- 
 tions to feel the force of the Anti-trust Act of 1900; 
 railroads, indeed, were indisputably engaged in inter- 
 state commerce. The Trans-Missouri Freight Associa- 
 tion ^^ was the first to be attacked. This was a railroad 
 pool of the typical sort, providing for a distribution of 
 traffic and a division of its freights upon a pro rata basis. 
 Any arrangement of this kind plainly does away with real 
 competition; and as such combinations have always been 
 regarded as illegal at common law, it was plainly right to 
 hold this pool a combination in restraint of trade within 
 the words of the statute. Still the railway bar, arrayed 
 
 18 In ro Pooling Freights, 115 Fed. N. O. & T. P. Ry., 4 Int. Com. Rep. 
 588. 593, 6 I. C. C. 195. 
 
 « Freight Bureau v. Cincinnati, ™ 166 U. S. 290. 
 
 [891] 
 
§ 982 ] Railroad Rate Regulation 
 
 now in behalf of its own patrons, made a desperate at- 
 tack upon the application of the statute. But the Su- 
 preme Court, now become more sophisticated, held that, 
 as the direct effect of this combination was to control 
 competition in transportation between the States, its con- 
 tinuance constituted a plain restraint of interstate " com- 
 merce. A little later the case of the Joint Passenger Traffic 
 Association ^^ came on for disposition. The draftsmen of 
 that agreement had seen to it that the pooling did not go 
 so far as formerly, and indeed, out of abundant caution, 
 had put in a clause that nothing therein should be con- 
 strued as in violation of the anti-trust law. But, as the 
 substance of competition was really touched by the agree- 
 ment, the Supreme Court said that this pool, too, should 
 be dissolved for its direct restraint of interstate conmierce. 
 
 § 982. Extent of the Clayton Amendments. 
 
 By the Clayton Act of 1914, jurisdiction to enforce 
 compliance with certain sections so far as carriers subject 
 to the Act are concerned is vested in the Commission. 
 For instance, there is the section providing that no cor- 
 poration engaged in commerce shall acquire, directly or 
 indirectly, the whole or any part of the stock or other share 
 capital of another corporation engaged also in commerce, 
 where the effect of such acquisition may be to substantially 
 lessen competition between the corporation whose stock 
 is so acquired and the corporation making the acquisition; 
 and that no corporation shall acquire, directly or indirectly, 
 the whole or any part of the stock or other share capital 
 of two or more corporations engaged in commerce where 
 the effect of such acquisition, or the use of such stock by 
 the voting or granting of proxies or otherwise, may be 
 to substantially lessen competition between such cor- 
 porations. But by expUcit proviso nothing therein con- 
 tained shall be construed to prohibit any common carrier 
 subject to the laws to regulate commerce from aiding in 
 
 " 171 U. S. 505. 
 [892] 
 
Regulation of Financial Operations [ § 983 
 
 the construction of branches or short hnes so located as 
 to become feeders to the main Une of the company so 
 aiding in such construction or from acquiring or owning 
 all or any part of the stock of such branch lines, nor to 
 prevent any such common carrier from acquiring and 
 owning all or any part of the stock of a branch or short 
 line constructed by an independent company where there 
 is no substantial competition between the company own- 
 ing the branch line so constructed and the company own- 
 ing the main hne acquiring the property or an interest 
 therein, nor to prevent such common carrier from ex- 
 tending any of its lines through the medium of the ac- 
 quisition of stock or otherwise of any other such common 
 carrier where there is no substantial competition between 
 the company extending its lines and the company whose 
 stock, property, or an interest therein is so acquired. 
 
 § 983. Provisions of the Panama Act. 
 
 In the Panama Act of 1912 there was included an amend- 
 ment to section 5 of the Act to Regulate Commerce to 
 the effect that after July 1, 1914, it shall be unlawful 
 for any railroad company or other common carrier subject 
 to the Act to Regulate Commerce to own, lease, operate, 
 control, or have any interest whatsoever (by stock owner- 
 ship or otherwise, either directly, indirectly, through any 
 holding company, or by stockholders or directors in com- 
 mon, or in any other manner) in any common carrier by 
 water with which said railroad or other carrier aforesaid 
 does or may compete for traffic or any vessel carrying 
 freight or passengers upon said water route or elsewhere 
 with which said railroad or other carrier aforesaid does 
 or may compete for traffic. Jurisdiction was conferred on 
 the Commission to determine questions of fact as to the 
 competition or possibility of competition, after full hearing, 
 on the application of any railroad company or other car- 
 rier. If the Commission shall be of the opinion that any 
 such existing specified service by water other than through 
 
 [ 893 ] 
 
§ 984 ] Raileoad Rate Regulation 
 
 the Panama Canal is being operated in the interest of the 
 public and is of advantage to the convenience and com- 
 merce of the people, and that such extension will neither 
 exclude, prevent, nor reduce competition on the route 
 by water under consideration, it may, by order, extend 
 the time during which such service by water may continue 
 to be operated beyond July first, nineteen hundred and 
 fourteen. In every case of such extension the rates, 
 schedules, and practices of such water carrier shall be filed 
 with the Interstate Commerce Commission and shall be 
 subject to the Act to Regulate Commerce and all amend- 
 ments thereto in the same manner and to the same extent 
 as is the railroad or other common carrier controlling such 
 water carrier or interested in any manner in its operation. 
 
 § 984. Examples of pooling arrangements. 
 
 Railway companies which enter into an association to 
 control traffic to a common market, and maintain rates 
 higher than are reasonable, unjustly prejudicial, and pref- 
 erential, if not jointly liable, are at least severally liable 
 under this provision; and the "fines" or "penalties" im- 
 posed by the provisions of the agreement of the Southern 
 Railway & Steamship Association on members for viola- 
 tion of association rules appear on the face of that agree- 
 ment to be available as substitutes for payment which 
 would be exacted under a regular pooling system, and the 
 arrangement under which they are imposed is tantamount 
 to a combination, contract, or agreement "for the pooling 
 of freights of different and competing railroads, or to 
 divide between them the aggregate or net proceeds of the 
 earnings of such railroads or any portion thereof," which 
 are forbidden by the statute.^- In one recent investigation 
 an agreement between the New Haven and the New York 
 Central was discussed, and the conclusion was reached 
 that, as this guaranty of earnings did away with any 
 
 « Freight Bureau v. Cincinnati, N. O. & T. P. Ry., 4 Int. Com. Rep. 
 
 592, 6 I. C. C. 195. 
 
 [894] 
 
Regulation of Financial Operations [ § 985 
 
 incentive to competition, it was within the prohibition of 
 the Act of Congress.^^ The mere fact that an advance 
 in rates is the product of an unlawful combination by 
 interstate carriers will not justify the Commission in 
 setting aside such rate if not unreasonably high.''* At 
 all events, power to deal with pooling by proceedings 
 directed against it was not given to the Commission when 
 pooling was made illegal by the Act originally.^'' 
 
 § 985. Certain agreements held valid. 
 
 The Commission has held that it is at least doubtful 
 whether section 5 of the Act applies to a practice whereby 
 the transportation of immigrants from Atlantic ports 
 westward is divided between the carriers in agreed pro- 
 portions based upon the proportion of the domestic pas- 
 senger traffic done by each line, where such a practice 
 cannot be made effective in respect to any other class of 
 passenger business, and the immigrants are carried at 
 domestic pubHshed rates, and the arrangements adopted 
 by the carriers in connection with the immigration au- 
 thorities of the United States have efficiently promoted 
 the protection and greatly improved the treatment and 
 comfort of inunigrants.'^^ Certain transcontinental carriers 
 adopted as part of an agreement for a through rate from 
 California to the East, for oranges and other citrus fruits, 
 a rule under which the right of routing beyond its own 
 terminal is reserved to the initial carrier as the condition 
 of guaranteeing the through rates to the shipper. The 
 initial carrier promised fair treatment to the connecting 
 lines, and carried out such promise, but there was no agree- 
 ment to give any specific amount of tonnage to any par- 
 ticular connecting line. The rule was intended to break 
 up rebating by the connecting lines, and, in its practical 
 
 5' New England Investigation, 27 " China & Japan Trading Co. v. 
 
 I. C. C. 660. Georgia R. Co., 12 I. C. C. 236. 
 
 "Tifft V. Southern Ry. Co., 10 =" Re Transportation of Immi- 
 
 I. C. C. Rep. 548. grants from New York, 10 I. C. C. 
 
 Rep. 13. 
 
 [895] 
 
§ 985 ] Railroad Rate Regulation 
 
 operation, the actual routing was generally conceded to 
 the shipper, and his requests to divert shipments en route 
 were usually allowed. It was held by the Supreme Court 
 that this was not a pooling of freights such as is forbidden 
 by the Act." In a later proceeding as to passenger ar- 
 rangements for handling certain matters of administration 
 jointly, it was held that the manner of dividing validation 
 fees did not constitute violation of section 5."^* 
 
 " Southern Pacific Co. v. Inter- ^^ Riter v. O. S. L. R. R., 19 I. 
 
 state Commerce Commission, 200 C. C. R. 443. 
 U. S. 536, 26 Sup. Ct. 330. 
 
 [896] 
 
BOOK IV 
 POWERS OF THE COMMISSION 
 
 CHAPTER XXI 
 
 SUPERVISORY POWERS OE THE COMMISSION 
 
 I 990. Provisions of the Act. 
 991. Power to investigate rates. 
 
 Topic A . Bases of Commission Regulation 
 
 j 992. Regulation of rates by the State. 
 
 993. Ways in which power is exercised. 
 
 994. Power to pass on reasonableness of rates. 
 
 995. Duty of the courts to pass on reasonableness of rates. 
 
 996. Fixing rates by administrative commissions. 
 
 997. Nature of their powers. 
 
 998. Delegation of rate-making power. 
 
 999. Limitations of the principle. 
 
 Topic B. Administrative Functions of the Commission 
 
 \ 1000. Nature of the Commission. 
 
 1001. Functions of the Commission. 
 
 1002. Basis of its powers. 
 
 1003. Limitations upon its jurisdiction. 
 
 1004. Extent of its supervision. 
 
 1005. Visitorial powers in general. 
 
 1006. What supervision implies. 
 
 1007. Status of the Commission. 
 
 Topic C. Authority to Investigate Conditions 
 
 1008. Investigation by the Commission. 
 
 1009. Limitation of its scope. 
 
 1010. Jurisdiction of the federal Commission. 
 
 1011. Extent of its powers. 
 
 1012. Powers of State commissions. 
 
 1013. Proceedings belonging in the courts. 
 
 1014. Testimony compelled in quasi-judicial proceedings. 
 
 1015. Summoning witnesses in general investigations. 
 
 57 [ 897 ] 
 
§ 990 ] Railroad Rate Regulation 
 
 Tojnc D. Proceedings on Its Own Motion 
 
 § 1016. Investigation by the Commission on its own motion. 
 
 1017. Investigation as a result of filing new tariff. 
 
 1018. Investigation by order of Congress. 
 
 1019. Procedure upon such investigation. 
 
 1020. Due process of administration. 
 
 1021. Jealous protection of substantial rights. 
 
 1022. Constitutional limitations upon the federal government. 
 
 1023. Recognition of these by the Commission. 
 
 § 990. I*rovisions of the Act. 
 
 The Interstate Commerce Commission provided for in 
 section 24 in 1906, is composed of seven commissioners, 
 who are appointed by the President for seven-year terms, 
 by and with the advice and consent of the Senate. Any 
 commissioner may be removed by .the President for in- 
 efficiency, neglect of duty, or malfeasance in office. Not 
 more than four of the commissioners shall be appointed 
 from the same political party according to section 11. 
 No person in the employ of or holding any official relation 
 to any common carrier subject to the provisions of this 
 Act, or owning stock or bonds thereof, or who is in any 
 manner pecuniarily interested therein, shall enter upon 
 the duties of or hold such office. The Commissioners 
 shall not engage in any other business, vocation, or em- 
 ployment. No vacancy in the Commission shall impair 
 the right of the remaining commissioners to exercise all 
 the powers of the Commission. The principal office of 
 the Commission is at Washington, where its general ses- 
 sions are held; but whenever the convenience of the public 
 or the parties may be promoted or delay or expense pre- 
 vented thereby, the Commission may hold special ses- 
 sions in any part of the United States. And it may, by 
 section 19, by one or more of the commissioners, prosecute 
 any inquiry necessary to its duties, in any part of the 
 United States, into any matter or question of fact per- 
 taining to the business of any common carrier subject to 
 the provisions of this Act. By section 12 the Commission 
 shall have authority to inquire into the management of 
 [ 898 ] 
 
Supervisory Powers of the Commission [ § 991 
 
 the business of all common carriers subject to the provi- 
 sions of this Act, and shall keep itself informed as to the 
 maimer and method in which the same is conducted, and 
 shall have the right to obtain from such common carriers 
 full and complete information necessary to enable the 
 Commission to perform the duties and carry out the ob- 
 jects for which it was created. Furthermore, the Com- 
 mission is authorized and required to execute and en- 
 force the provisions of this Act; and, upon the request of 
 the Commission, it shall be the duty of any district at- 
 torney of the United States to whom the Commission may 
 apply to institute in the proper court and to prosecute 
 under the direction of the Attorney General of the United 
 States all necessary proceedings for the enforcement of 
 the provisions of this Act and for the punishment of all 
 violations thereof. 
 
 § 991. Power to investigate rates. 
 
 Whenever there shall be filed with the Commission any 
 schedule stating a new individual or joint rate, fare, 
 charge, or classification, or regulation or practice affect- 
 ing any rate or charge, the Commission shall have au- 
 thority, either upon complaint or upon its own initiative 
 without complaint, at once, and if it so orders, without 
 answer or other formal pleading by the interested carrier 
 or carriers, but upon reasonable notice, to enter upon a 
 hearing concerning the propriety of such rate, fare, charge, 
 classification, regulation, or practice. Pending such hear- 
 ing and the decision thereon, the Commission, upon filing 
 with such schedule and delivering to the carrier or carriers 
 affected thereby a statement in writing of its reasons for 
 such suspension, may suspend the operation of such schedule 
 and defer the use of such rate, fare, charge, classification, 
 regulation, or practice, but not for a longer period than 
 one hundred and twenty days. After full hearing, whether 
 completed before or after such changes go into effect, the 
 Commission may make such order in reference thereto 
 
 [899] 
 
§ 992 ] Railroad Rate Regulation 
 
 as would be proper in a proceeding initiated thereafter. 
 If any such hearing cannot be concluded within the period 
 of suspension, as above stated, the Commission may, in 
 its discretion, extend the time of suspension for a further 
 period not exceeding six months. At any such hearing 
 involving a rate increase, the burden of proof to show that 
 the increased rate is just and reasonable shall be upon the 
 common carrier; and the Commission shall give to the 
 hearing and decision of such questions preference over all 
 other questions pending before it. And for the purposes of 
 the Act the Commission is given power to require, by sub- 
 poena, the attendance and testimony of witnesses and the 
 production of all books, papers, tariffs, contracts, agree- 
 ments, and documents relating to any matter under investi- 
 gation. Such attendance of witnesses, and the production 
 of such documentary evidence, may be required from any 
 place in the United States, at any designated place of 
 hearing; and in case of disobedience to a subpoena the 
 Commission, or any party to a proceeding before the Com- 
 mission, may invoke the aid , of any court of the United 
 States. 
 
 Topic A. Basis of Commission Regulation 
 
 § 992. Regulation of rates by the State. 
 
 The basis of the right of the State to regulate the rates 
 of public-service companies is the principle first clearly 
 apprehended and expressed by Lord Hale in his treatise 
 De Portibus Maris, ^^ that when property is affected with 
 a pubhc interest it ceases to be juris privati only. Prop- 
 erty, as Chief Justice Waite *" said in relying upon this 
 ancient rule so often cited, does become clothed with 
 a public interest when used in a manner to make it of 
 public consequence and affect the community at large. 
 When, therefore, one devotes his property to a use in 
 which the pubhc has an interest he, in effect, grants to the 
 
 *' Cited in Munn v. Illinois, 94 ™ Quoted from Munn v. lUinois, 
 
 U. S. 113, 24 L. ed. 77. supra. 
 
 [900] 
 
Supervisory Powers of the Commission [ § 993 
 
 public an interest in that use, and must submit to be con- 
 trolled by the public for the common good, to the extent 
 of the interest he has thus created. The power of the 
 State over public service employments is not limited to 
 its power to pass on the reasonableness of rates after they 
 have been established; the power to initiate action, to 
 fix rates in the first instance by way of regulating action, 
 is fully recognized at common law and by the general 
 practice of all common-law countries. 
 
 § 993. Ways in which power is exercised. 
 
 The right of the State to regulate those businesses in 
 which the public has an interest has come down to us from 
 time immemorial. Legislation laying down rules in first 
 instance for the course which those who assume these call- 
 ings must follow has always been regarded as due process 
 of law, if it kept within the bounds of what is rational. 
 All this was fully recognized in the Granger cases *' in dis- 
 posing of the contention strongly urged that the power 
 over rates was essentially judicial, and could not be ex- 
 ercised by the legislature. But the court in its line of 
 argument in these cases fully justified regulation in every 
 way that the State may employ to impose obligations. 
 Litigation determines rights and wrongs in the past upon 
 the basis of an existing law; legislation prescribes rules for 
 the future as to what shall henceforth be the right and 
 wrong in a given situation. Declaring past charges un- 
 reasonable is an act judicial in its character; fixing rates 
 for the future on the other hand partakes of legislation. 
 The function of the government is that of regulation of 
 the conduct of the business; the Commission should not 
 go into the management of the business by unnecessarily 
 dictating as to the exact course which should be pur- 
 sued."- 
 
 «> 94 U. S. 113. V. Smith, 173 U. S. 684, 19 Sup. Ct. 
 
 "2 Note the limitations upon this 565. 
 doctrine in Lake Shore & M. S. Ry. 
 
 [901] 
 
§§ 994, 995 ] Railroad Rate Regulation 
 
 § 994. Power to pass on reasonableness of rates. 
 
 The simplest form in which the power to regulate rates 
 can be exercised is that adopted by the common law, that 
 is, the action of the courts, declaring a rate exacted by a 
 carrier unreasonable upon suit of the party who has been 
 called upon to pay it. Such power has been exercised by 
 the courts of comm.on law from the beginning of their 
 history.*^ It has always been recognized that if a carrier 
 attempted to charge a shipper an unreasonable sum, the 
 courts had jurisdiction to inquire into that matter, and 
 to award to the shipper any amount exacted from him in 
 excess of a reasonable rate.®^ This power, which has 
 aptly been called a visitorial power of the State,^'' is only 
 one example of the general power of the State to oversee 
 the acts of those who are engaged in its pubhc service, 
 and to make sure that they really serve the public interest. 
 However, in some States where the division of powers is 
 not strictly insisted upon in the Constitution, it has been 
 held that the power to fix rates may be conferred upon 
 inferior courts, with appeal to the superior courts in regu- 
 lar series.** 
 
 § 995. Duty of the courts to pass on reasonableness of rates. 
 
 To whatever body the power of fixing rates may be con- 
 fided, it is the function of the regular courts to pass upon 
 the reasonableness of the rates thus established; and the 
 courts cannot be deprived of this power. The question of 
 reasonableness cannot be so conclusively determined by 
 the legislature of the State, or by regulations adopted 
 under its authority, that the matter may not become the 
 subject of judicial inquiry."^ Under our constitutions, the 
 
 «' Railroad Commission Cases, 116 179 Pa. 231, 36 Atl. 249, 36 L. R. A. 
 
 U. S. 307, 29 L. ed. 636, 6 Sup. Ct. 260. 
 
 334. «« Troutman v. Smith, 105 Ky. 231, 
 
 «^ Reegan v. Farmers' L. & T. Co., 48 S. W. 1084. 
 
 154 U. S. 362, 38 L. ed. 1014, 14 Sup. " Reagan v. Farmers' L. & T. Co., 
 
 Ct. 1047. 154 U. S. 362, 38 L. ed. 1014, 14 Sup. 
 
 «s Brymer v. Butler Water Co., Ct. 1047. 
 
 [9021 
 
Supervisory Powers of the Commission [ § 996 
 
 legislature cannot delegate its power, and a Commission 
 authorized by statute to determine and declare what are 
 reasonable rates, and to fix schedules of rates which shall 
 be the lawful rates, acts as an administrative and not as 
 a legislative body. A court may, therefore, enjoin the 
 promulgation by it of any particular schedule whenever es- 
 sential to the ends of justice.^* The fact, however, that the 
 Commission is given not merely the power to fix rates, but 
 also (as is the case with the Interstate Commerce Commis- 
 sion) the power to hear controversies between parties, does 
 not make its organization unconstitutional, provided the 
 power of passing on the validity of its rates is not with- 
 drawn from the ordinary courts. 
 
 § 996. Fixing rates by administrative commissions. 
 
 The commonest way at present of fixing rates is to 
 commit it to an administrative commission; and this may 
 be legally done.*^ Notwithstanding any theoretical divi- 
 sion of the powers of government, our books have at all 
 times been full of statutes, unquestionably vahd, in which 
 the legislature, after laying down rules and principles, has 
 been content to leave the execution and detail to other 
 officers. The requirement that the rate shall be reason- 
 able is to be found in the law of the land which can only 
 be modified by the process we call legislative.'" But the 
 function of regulating commissions in determining and fix- 
 ing reasonable rates and practices, within the principles 
 and limitations of the substantive law governing the sit- 
 uation, is what we call administrative. As a matter of 
 government it has been found, particularly of late years, 
 that the only practicable way of enforcing the elaborated 
 law of pubhc service is by the creation of administrative 
 bodies specially empowered for this particular work." In- 
 
 •* Central of Ga. Ry. Co. v. RaU- ™ See in Reagan v. Farmers' 
 
 road Commission of Ala., 161 Fed. 925. Loan & Trust Co., 154 U. S. 362, 
 
 «9 See the Railroad Commission 38 L. ed. 1014, 14 Sup. Ct. 1047. 
 
 Cases, 116 U. S. 307, 29 L. ed. 636, " Louisville & N. R. R. v. Brown, 
 
 6 Sup. Ct. 334. 123 Fed. 946. 
 
 [903] 
 
§ 997 ] Railroad Rate Regulation 
 
 deed with the increasing complexity of our relations the 
 power of the legislature to act through bodies skilled to 
 meet the exigencies of the situation as they arise has been 
 universally recognized.'^ 
 
 § 997. Nature of their powers. 
 
 When the legislative power is concerned with adminis- 
 trative affairs, the power may be as fully exercised by the 
 Commission which is raised for that purpose as the legis- 
 lature might have exercised it, subject to any limitations 
 imposed by the legislature itself. Under this rule the 
 power vested in the Interstate Commerce CoEomission to 
 fix rates for the future was held constitutional.'^ And 
 nothing in the federal Constitution or statutes prevents 
 a State from creating a board of railroad commissioners 
 and in fixing their powers over railroad corporations, 
 providing that competing lines shall so remain.'* A State 
 statute which authorized a railroad commission to hear 
 complaints and fix just rates is invariably held not un- 
 constitutional on the ground that it confers judicial powers 
 upon the Commission. As the court said in one case the 
 Constitution was not intended to prevent either the legis- 
 lature or the railroad commission from investigating and 
 finding out the facts.'^ The State has the right, as a 
 general proposition, to prescribe the compensation a rail- 
 road shall receive for carrying passengers and freight 
 within its borders; and the State may supervise railroads, 
 and regulate their charges through a Commission. So, too, 
 the State may give the Commission power to rectify 
 abuses in rates, and grant reparation.'^ Of course, an act 
 creating a board of railroad commissioners with power to 
 
 " See, for instance, Attorney- State, 210 U. S. 187, 52 L. ed. 1016, 
 
 General v. Chicago & N. W. Ry., 35 28 Sup. Ct. 650. 
 
 Wis. 425. " Louisville & N. R. R. v. Siler, 
 
 " Louisville & N. R. R. Co. v. 186 Fed. 176. 
 
 Interstate Commerce Commission, ™ Stone v. Natchez R. R., 62 Miss. 
 
 184 Fed. 118. 646. 
 
 "MobUe, J. & K. C. R. Co. v. 
 
 [904] 
 
Supervisory Powers of the Commission [ § 998 
 
 regulate and control the operation of common carriers is 
 not invalid because the constitution does not specifically 
 provide for the creation of railroad commissioners.^'^ It 
 is well recognized to-day that the legislature has the right 
 to supervise, regulate and control rates and conduct of 
 common carriers, either directly or through commissions.'^ 
 
 § 998. Delegation of rate-making power. 
 
 It has already been seen that the rate-making power 
 may be delegated to a subordinate body, whether munici- 
 pal corporation or commission; and this is not unconsti- 
 tutional as a delegation of legislative power. The legis- 
 lative act of requiring the rates to be reasonable is either 
 the act of the common law or is part of the act by which 
 the delegation of authority is conferred. The functions 
 of such bodies in determining and fixing reasonable rates 
 are administrative rather than legislative. The authority 
 conferred on them relates merely to the administration in 
 practice of the general rules laid down by the common 
 law and by the legislature. As was said in Chicago & 
 Northwestern Railway v. Dey,'' there is no inherent vice 
 in such a delegation of power; nothing in the nature of 
 things which would prevent the State by constitutional 
 enactment, at least, from intrusting these powers to such 
 a board; and nothing in such constitutional action which 
 would invade any rights guaranteed by the federal Con- 
 stitution. As another illustration of the extensive opera- 
 tion of the fundamental principles under discussion, the case 
 of State V. Great Northern Railway,*" may be taken; it was 
 held in that case that for the legislature to leave to a com- 
 mission the power to pass upon the issuance of securities 
 without giving it any rules to guide it in its action was an 
 unconstitutional delegation of power. 
 
 " State V. Mo. Pac. R. R., 76 Kans. " 35 Fed. 866. 
 
 467, 92 Pac. 606. «» 100 Minn. 445, 111 N. W. 
 
 '* Corporation Commission v. Rail- 389. 
 road, 127 N. C. 288. 
 
 [905] 
 
§§ 999, 1000 ] Railroad Rate Regulation 
 
 § 999. Limitations of the principle. 
 
 The fundamental rule against delegation of legislative 
 power remains; but it is Realized that the application of 
 the principle laid down by the legislature is simply ad- 
 ministration.*' Very recently this distinction was clearly 
 made in the Supreme Court in the case of Interstate Com- 
 merce Commission v. Goodrich Transit Company,*^ where 
 the objection was raised in vain that certain orders of the 
 Commission relating to accounting created in effect new 
 obligations not imposed by the statute. The Congress 
 may not delegate its purely legislative power to a commis- 
 sion, said the Supreme Court, but having laid down the 
 general rules of action under which a commission shall 
 proceed it may require of that commission the applica- 
 tion of such rules to particular situations, and the in- 
 vestigation of facts with a view to making orders in a 
 particular matter within the rules laid down by Congress. 
 In section 20 Congress has authorized this Commission 
 to require annual reports, and the Act itself prescribes in 
 detail what these reports shall contain. In other words. 
 Congress has laid down general rules for the guidance of 
 the Commission, leaving to it merely the carrying out of 
 details in the exercise of the power so conferred. This, 
 as the court concluded in the still more recent case of 
 Kansas City Southern Railway v. United States,*' is not 
 a delegation of legislative power; it is proper administra- 
 tion of a general statute, proceeding upon the principles 
 therein laid down.** 
 
 Topic B. Administrative Functions of the Commission 
 
 § 1000. Nature of the Commission. 
 Under the commerce clause of the Constitution, Con- 
 s' In the recent case of Louisiana powers, its true function being ad- 
 & P. R. R. V. United States, 209 Fed. ministrative, not legislative. 
 244, it was pointed out that for a "' 224 U. S. 194, 32 Sup. Ct. 436. 
 
 commission to draw up what would «' 231 U. S. 433, 34 Sup. Ct. 125. 
 
 amount to a code applicable to a ** See also State v. Yazoo R. R., 
 
 situation would be to transcend its 62 Miss. 607. 
 
 [906] 
 
Supervisory Powers of the Commission [ § 1001 
 
 gress has the power to create a Commission for the pur- 
 pose of supervising, investigating, and reporting upon 
 matters or complaints connected with or growing out of 
 interstate commerce.^'' By the acts of Congress creating 
 the Commission, providing that it shall have an official 
 seal and making it lawful for it to apply by petition for 
 the enforcement of its orders, this Commission is made a 
 body corporate with legal capacity to be a party plaintiff 
 or defendant in the federal courts.*" The Commission is 
 a special tribunal whose duties, though largely adminis- 
 trative, are sometimes semi- judicial; but it is not a court 
 empowered to render judgments and enter decrees.*^ And 
 in general it may be said that the Commission created to 
 enforce the Act to Regulate Commerce is so clearly within 
 the scope of the principles which have just been discussed 
 that the legality of the functions intrusted to it cannot 
 be questioned in point of constitutionality if properly 
 exercised. 
 
 § 1001. Functions of the Cominission. 
 
 The Commission itself in speaking of the basis of its 
 powers has often said that it is an administrative body.** 
 It has pointed out that it is not a court, although its 
 proceedings partake somewhat of a judicial or semi- 
 judicial character.*^ As the Commission is an adminis- 
 trative body, although it need not at first determine that 
 the subject-matter is within its jurisdiction, it will not 
 assume to grant affirmative relief unless its jurisdiction 
 is definitely ascertained.'" Since the Commission is not 
 a court, it may consider it its function to so apply the 
 
 «5 Kentucky & I. Bridge Co. v. Lake Shore & M. S. R. R., 3 Int. 
 
 Louisville & N. R. R., 37 Fed. 567, Com. Rep. 830. 
 
 2 L. R. A. 289, 2 Int. Com. Rep. ^ Mattison v. P. Co., 23 I. C. C. 
 
 351. 233. 
 
 «« Texas & P. Ry. v. Interstate ^9 pfgeman Lumber Co. v. St. L., 
 
 Commerce Commission, 162 U. 8. I. M. & S. Ry., 20 I. C. C. 612. 
 
 197, 40 L. ed. 940, 16 Sup. Ct. 666, " Corporation Commission of Ok- 
 
 5 Int. Com. Rep. 405. lahoma v. A., T. & S. F. Ry., 25 I. C. 
 
 «> Toledo Produce Exchange v. C. 120. 
 
 [ 907 ] 
 
§ 1002 ] Railroad Rate Regulation 
 
 Act as to protect public interests." The theory upon 
 which the Conunission proceeds is that the Act makes it 
 a special administrative tribunal clothed with power to 
 hear and determine causes of action involving rights 
 which have long existed at common law.'^ The Commis- 
 sion derives all its powers from statute; and it can exer- 
 cise no powers not granted by the Act.^^ And it could not 
 investigate any action of a carrier committed prior to the 
 time when the Act went into effect.^^ 
 
 § 1002. Basis of its powers. 
 
 It will be seen, therefore, that the Commission has no 
 general power to manage the business of carriers.'^ So it 
 has no authority to control commissioners of immigra- 
 tion, and cannot do so indirectly by inhibiting railroad 
 companies from carrying out arrangements made by them 
 with the commissioners.'* It formerly had no power to 
 grant redress for the failure of a carrier to comply with 
 its common-law duty to furnish cars." Indeed at that 
 time it had no power over service as such at all.'* So the 
 Act did not originally confer upon the Commission au- 
 thority to make an order aflfirmatively requiring a rail- 
 way carrier to deliver carloads of interstate freight to a 
 connecting carrier.^ Nor could it determine the right of 
 milling in transit.^ The Commission imtil granted juris- 
 diction could not inquire whether railroad companies act 
 
 "1 In re Advances in Rates, West- " Re Transportation of Fruit, 10 
 
 em Case, 20 I. C. C. 307. Int. Com. Rep. 360. 
 
 92 Hussey v. C, R. I. & P. Ry., 13 "» Scofield v. Lake Shore & M. S. 
 
 I. C. C. 366. R. R., 2 Int. Com. Rep. 67; Rice v. 
 
 «3 Holbrook v. St. Paul, M. & M. Cincinnati, W. & B. R. R., 3 Int. 
 
 Ry., 1 Int. Com. Rep. 323. Com. Rep. 841. 
 
 '* White V. Michigan Cent. R. R., ' Railroad Commission of Ken- 
 
 2 Int. Com. Rep. 641. tucky v. Louisville & N. R. R., 10 
 
 "* Traders & Travelers Union v. Int. Com. Rep. 173. 
 
 Phila. & R. R. R., 1 Int. Com. Rep. ^ Diamond Mills v. Boston & M. R. 
 
 371. R., 9 Int. Com. Rep. 311. 
 
 « Savery v. New York C. & H. R. 
 R., 2 Int. Com. Rep. 210. 
 
 [908] 
 
Supervisory Powers of the Commission [ § 1003 
 
 wisely or unwisely, fairly or unfairly, between themselves 
 in forming lines, and establishing differentials; but its 
 inquiry was limited to the question whether the situation 
 created by the companies violated the Act.^ 
 
 § 1003. Limitations upon its jurisdiction. 
 
 Some specific illustrations of the limitations upon the 
 jxirisdiction of the Commission will make these principles 
 plainer. In re Transportation of Fruit,* the Commission 
 pointed out that it had no such extensive power over 
 carriage in general as to justify it in going to the length 
 of or making orders concerning the grade of service which 
 should be rendered. In Spokane v. Northern Pacific 
 Railway,^ the Commission held that what was the capital- 
 ization of the carrier or how it was created, whether it 
 was fully paid in or in large part water, were matters with 
 which the Commission had no concern; and in a later 
 proceeding between the same parties the Commission 
 added that it had no jurisdiction over what dividends a 
 railroad corporation might properly pay. In Joynes v. 
 Pennsylvania Railroad,* the Commission said squarely 
 that section 15 relating to the process for giving relief of 
 violation of the Act was the dominating and controlling 
 expression of the real object and meaning of the Act; it 
 makes the Commission a special expert body to deal with 
 rates and practices affecting rates, not a body to take the 
 place of courts in giving relief for wrong doing by carriers 
 in general. In the Advances in Rates Cases,' it was again 
 observed that the Commission had no jurisdiction to deal 
 with the questions of capitalization and profits as such; 
 it was said that the Commission had no authority to say 
 what a railroad ought to earn, or upon what capitaliza- 
 tion it might pay returns, either as a matter of right or 
 
 3 New York Produce Exch. v. « 15 I. C. C. 326 
 
 Baltimore & 0. R. R., 7 Int. Com. ' 17 I. C. C. 361. 
 
 Rep. 612. ' 20 I. C. C. 243. 
 
 * 10 I. C. C. 360. 
 
 [909] 
 
§§ 1004, 1005 ] Railroad Rate Regulation 
 
 as a matter of public policy; except in so far as these 
 figures related to the power of the Commission over rates, 
 it had no power otherwise over financial operations good 
 or bad, or over profit or loss. 
 
 § 1004. Extent of its supervision. 
 
 In view of these rulings it is obvious that the Com- 
 mission will not go out of its way to assert jurisdiction 
 over matters clearly not confided to it. Thus in Sprigg v. 
 Baltimore & Ohio Railroad,* it was said that the Com- 
 mission will not attempt to administer generally all Fed- 
 eral statutes to the conduct of railroads, such as, for in- 
 stance, the anti-trust law. In Consolidation Fuel Co. v. 
 Atchison, Topeka & Santa Fe Railway,' it was pointed out 
 that the Commission has not been charged with the en- 
 forcement of the commodities clause in section 1 of the 
 Act itself, beyond the general duty of calling attention to 
 any infraction of the provisions of the Act. In Railroad 
 Commission v. Louisville & Nashville Railroad,'" it was 
 held that the Commission could not without usurpation 
 of authority enforce State laws or the provisions of State 
 constitutions. And in Southwestern Produce Distributers 
 V. Railroad," it was added that the Commission's juris- 
 diction, in a general sense, extends only to relations be- 
 tween the carriers and passenger and carrier and shipper. 
 
 § 1005. Visitorial powers in general. 
 
 There have been important cases of late years in the 
 courts relating to the principles under discussion. It has, 
 of course, long been well established that the State may 
 supervise railroads, and regulate their affairs through a 
 Commission. '2 Such a Commission in its general super- 
 visory powers may require reports of the whole businesses 
 of the carrier so far as the information desired has a bear- 
 
 8 8 I. C. C. 443. " 20 I. C. C. 458. 
 
 "27 I. C. C. 554. '2 Railroad Commission Cases, 116 
 
 1° 10 I. C. C. 173. U. S. 307, 6 Sup. Ct. 344. 
 
 [910] 
 
Supervisory Powers of the Commission [ § 1006 
 
 ing upon matters put within its jurisdiction. '^ It has 
 been pointed out, however, by the Supreme Court in 
 speaking of the federal Commission that railroads are the 
 private property of their owners; and while from the 
 public character of the work in which they are engaged 
 the public has the power to prescribe rules for securing 
 faithful and efficient service and equality between shippers 
 and communities, yet in no sense proper is the public a 
 general manager. ^^ Thus it would seem to be funda- 
 mental, as a State court has recently said in refusing to 
 permit its own commission to go too far into detail in its 
 orders, that, while a commission has power to require 
 every railroad company to discharge all its public duties, 
 whether imposed by charter, general law, or the nature of 
 its business, its powers are only those of supervision and 
 regulation — not of management and control.'^ By observ- 
 ing this distinction a commission would not go so far as to 
 take away from the owners the operation of their properties. 
 
 § 1006. What supervision implies. 
 
 The Commission has at times taken the point of view 
 that its powers are inherently limited to those of super- 
 vision. The Act leaves carriers free to initiate their own 
 policies and regulations; the jurisdiction of the Commis- 
 sion is to revise what the carriers are doing. ^* Thus the 
 Commission cannot place limitations on railroad expen- 
 ditures, nor direct improvements, nor enforce economies, 
 no matter what revenue may be received." The Commis- 
 sion does not sit as a supreme traffic manager for the 
 railroads of the country; power to direct the pohcy which 
 they may pursue is not a matter delegated to it, so long 
 as such policy does not infringe upon the prohibitions of 
 
 " People V. Chicago I. & L. Ry., i= Bacon v. Boston & M. R. R., 83 
 
 223 lU. 581, 79 N. E. 144. Vt. 421, 76 Atl. 128. 
 
 " Interstate Commerce Commis- '" Traer v. C, B. & Q. R. R., 14 
 
 sion V. Chicago Gt. W. Ry., 209 U. S. I. C. C. 165. 
 
 108, 28 Sup. Ct. 493. " In re Advances in Rates, West- 
 
 ern Case, 20 I. C. C. 307. 
 
 [911] 
 
§ 1007 ] Railroad Rate Regulation 
 
 the law.'* Nor has the Commission power to say what 
 shall be done, as a matter of public policy, except in so 
 far as the public will must always be considered in exer- 
 cising its authority under the Act. Its duty with respect 
 to rates is, therefore, simply to inquire whether they are 
 in accordance with the requirements of the Act.'' 
 
 § 1007. Status of the Commission. 
 
 To invest an administrative body like this Commission 
 with unrestricted and unguided authority would be to 
 give it legislative power, which cannot be done under our 
 federal Constitution. Congress, instead of making rates 
 itself, laid down certain rules which its administrative 
 representatives must follow; and the Commission may 
 take into consideration those various circumstances which 
 properly would have acted upon the mind of the legisla- 
 ture in determining upon proper rates. ^ It is one thing 
 to authorize such a body to administer the law in accord- 
 ance with certain rules and standards prescribed by the 
 legislature, and an entirely different thing to turn over to 
 it the exercise of the legislative discretion itself." Since 
 the Commission is an administrative body, it may not by 
 interpretation annul an act of Congress. ^^ And no hold- 
 ing of the Commission can render lawful that which is of 
 itself unlawful.-' On the other hand, the courts have no 
 power to fix railroad rates, that power being vested in the 
 Commission; and where the Commission acting in its 
 administrative capacity establishes certain rates, the courts 
 will not interfere unless some constitutional or natural 
 right has been violated.-* Congress did not in the Act 
 
 " In re Advances on Coal to Lake '' In re Pipe Lines, 24 I. C. 
 
 Ports, 22 I. C. C. 604. C. 1. 
 
 i»Albree v. B. & M. R. R., 22 ^^ Nebraska/-Iowa Grain Co. v. 
 
 I. C. C. 303. U. P. R. R., 15 I. C. C. 90. 
 
 ^ Railroad Commission of Nevada " Philadelphia & R. Ry. v. Inter- 
 
 V. S. P. Co., 21 1. C. C. 329. state Commerce Commission, 174 
 
 " City of Spokane v. N. P. Ry. Co., Fed. 687, 
 21 I. C. C. 400. 
 
 [912] 
 
Supervisory Powers of the Commission [ § 1008 
 
 and its amendments ^ntend to vest administrative au- 
 thority in the courts in the matter of fixing rates, but on 
 the contrary committed the power to ascertain facts, and 
 determine what is reasonable in regard to rates in view of 
 such facts, to the Commission. ^^ 
 
 Topic C. Authority to Investigate Conditions 
 
 § 1008. Investigation by the Commission. 
 
 There has been no doubt in the mind of the Commis- 
 sion from the very beginning, that it may investigate any 
 supposed violation of the Act, even on its own motion. ^^ 
 Thus long before it had any powers in relation thereto it 
 inquired as to division of alleged unlawful joint rates. 2' 
 And it held that its jm-isdiction in this respect extends to 
 a case of alleged unlawful prejudice and disadvantage to 
 shippers of freight through the enforcement by carriers 
 of regulations.^* As the Act applies to the transporta- 
 tion of export and import traffic, the jurisdiction of the 
 Commission over the course of all such traffic has always 
 been clear. ^^ That the Commission may investigate any 
 matters coimected with the performance of transporta- 
 tion by carriers is seldom denied; and so long as the in- 
 quiry is confined to the officers of the company and the 
 records of the company, it may well be that this is within 
 the power of regulation of carriage subject to the Act. 
 In Re Rates on Food Products,^" the Commission claimed 
 that it might enforce production of books of the carriers 
 investigated. Although in Re Grand Trunk Railway," 
 the Commission said that it might on its own motion in- 
 vestigate supposed violations of Act, it did not go to the 
 
 2* Louisville & N. R. R. v. Inter- ™ Cincinnati Chamber of Corn- 
 state Commerce Commission, 184 merce and Merchant's Exchange 
 Fed. 118. V. Baltimore & 0. S. W. Ry., 10 
 
 26 Re Atlanta & W. P. R. R., 2 Int. Int. Com. Rep. 378. 
 
 Com. Rep. 461. ^' Re Export and Domestic Rates 
 
 " Warren-Ehret Co. v. Central on Grain, 8 Int. Com. Rep. 214. 
 
 Ry. of New Jersey, 8 Int. Com. Rep. ™ 3 Int. Com. Rep. 151. 
 
 598. "2 Int. Com. Rep. 496. 
 
 58 [ 913 ] 
 
§§ 1009, 1010 ] Railroad Rate Regulation 
 
 extent of claiming that it could compel testimony in such 
 investigations from anyone in the United States who might 
 have knowledge of the facts. 
 
 § 1009. Limitation of its scope. 
 
 The Commission has declared frequently that its powers 
 are confined to the enforcement of the Act, and do not 
 extend to investigation of corporations generally. In 
 China & Japan Trading Co. v. Georgia Railroad '^ is the 
 significant statement that the Commission has no power 
 to enforce the law generally as to the duties of carriers 
 broadly speaking. In the Commutation Rate Case,'^ it 
 was pointed out that in sections 1, 2, 3, 4, and 15 are 
 contained all the substantive law and machinery for 
 public regulation of interstate carriers which the Commis- 
 sion possesses. In the opinion in the case entitled the 
 New England Investigation '^ the Coromission urged that 
 the time had come when the national government should 
 assume jurisdiction over railroads in so far as may be 
 necessary to secure to the public proper service, saying 
 that the Commission has fairly complete control over rates 
 and over all practices which relate to the rate, but as 
 yet no control whatever over the operation of the railroad 
 or its physical maintenance. And as to the matter of 
 expenditure and capitalization it has lately made several 
 recommendations at the end as to powers which it felt 
 ought to be added to its jurisdiction, as for instance in 
 the St. Paul and Puget Sound Accounts.^" 
 
 § 1010. Jurisdiction of the federal Commission. 
 
 The extent to which a concern which has business sub- 
 ject to the Act is subject to being investigated as to other 
 business carried on by it was brought out sharply in the 
 recent case of the Interstate Commerce Conmaission v. 
 Goodrich Transportation Company. ^^ The defendant had 
 
 '2 12 I. C. C. 24L »« 30 I. C. C. 280. 
 
 '» 21 I. C. C. 428. » 224 U. S. 194, 32 Sup. Ct. 
 
 "27 1. C. C. 560. 436. 
 
 [914] 
 
SoPERvisoRY Powers of the Commission [ § 1011 
 
 a line of steamers carrying freight and passengers on 
 the Great Lakes and was a party to joint rail and water 
 rates. Its business was of various sorts: (1) intrastate 
 water transportation; (2) interstate water transporta- 
 tion; (3) intrastate joint water and rail transportation; 
 and (4) interstate joint water and rail transportation. 
 The Commission ordered this line (1) to keep accounts 
 in same form as railways did; (2) to report all its business, 
 both interstate and intrastate; (3) to make same reports 
 as a railway; (4) to include receipts from certain amuse- 
 ment park the business of which was entirely intrastate. 
 The Supreme Court sustained the order of the Commis- 
 sion in toto, saying that in order to regulate the interstate 
 part of the business it must know it as a whole. And it is 
 obvious that otherwise it would be impossible to tell whether 
 reports as to interstate business were correct, as the ac- 
 counts could be juggled between different books. In order 
 to have effective regulation of interstate business there must 
 be power to examine everything involved therewith, so 
 reports may be required to both interstate and intrastate, 
 public and private. This was brought out very clearly in 
 another case. United States ex rel. v. Union Stockyards and 
 Transit Company,'^ recently decided by the Supreme Court 
 in which the jurisdiction of the Commission over each and 
 all of a congeries of corporations only one of which could be 
 said to be directly engaged in interstate commerce. 
 
 § 1011. Extent of its powers. 
 
 The Commission should not, however, attempt to ex- 
 tend its supervision over matters with which it can have 
 no concern. Thus the Commission has no jurisdiction to 
 determine whether the rights of a minority stockholder 
 in one railroad absorbed by another have been infringed, 
 where the purpose of the proceeding before the Commis- 
 sion is to obtain information for the complainant to de- 
 termine whether, as a stockholder, it would be advisable 
 
 " 226 U. S. 286, 33 Sup. Ct. 83. 
 
 [915] 
 
§ 1012 ] Railroad Rate Regulation 
 
 to bring a suit in equity for an accounting against the 
 railroads involved. '* Breaches of duty by a carrier other- 
 wise than in relation to matters covered by the Act are 
 wholly within the jurisdiction of the courts.'' The Com- 
 mission has often said that it has no common-law or 
 equity jurisdiction to adjust matters between parties, but 
 only such authority over matters relating to service of 
 the public as are prescribed in the Act.** It follows that 
 under no head of jurisdiction can this Commission take 
 action in regard to the private rights and wrongs whether 
 falling under the head of tort or contract." Any juris- 
 diction which the Commission has had heretofore in re- 
 spect to the subject-matter covered by the anti-trust law 
 has been altogether confined to the effect of the combina- 
 tion alleged, if any, in raising rates to an unreasonable 
 level.^^ The Commission is a body of limited powers de- 
 rived exclusively from the Act; it is a purely adminis- 
 trative body charged with specific administrative duties 
 and invested with specific powers."' Although the Act 
 may be described as a general code for the regulation and 
 government of railroads upon the subjects treated of therein, 
 it cannot be contended that it covers all cases concerning 
 transportation by railroad ; and it does not purpose to cover 
 any such extensive field."* 
 
 § 1012. Powers of State Commissions. 
 
 Some cases in the State courts of late years which have 
 been liberal in support of the right of their commissions 
 to supervise carriers in all their ways should be noted, 
 however. It is natural to permit an administrative board, 
 created to supervise quasi-public corporations to inquire 
 
 '* Manning v. C. & A. R. R., 13 I. '*^ Warren Manufacturing Co. v. 
 
 C. C. 125. So. Ry., 12 I. C. C. 381. 
 
 ="> Blume & Co. v. Wells, Fargo & " Kentucky Bridge Co. v. L. & S. 
 
 Co., 15 I. C. C. 53. R. R., 37 Fed. R. 567. 
 
 " Hillsdale Coal & Coke Co. v. " United States v. Transmission 
 
 D. & T. Ry., 19 I. C. C. 356. Freight Ass'n, 166 U. S. 290, 43 
 " Ralston Townsitc Co. v. Mo. L. ed. 259, 19 Sup. Ct. 85. 
 
 Pac. Ry., 22 I. C. C. 354. 
 
 [916] 
 
SuPERvisoEY Powers of the Commission [ § 1013 
 
 in a purely administrative way into the affairs and papers 
 of such corporations subject to its jurisdiction; but it 
 would be going to an extreme to permit such administra- 
 tive inquiries to be extended into the affairs and papers 
 of those private institutions with which the railroad com- 
 pany may do business. The right of the commission to 
 inquire into the affairs of the carriers is strongly stated 
 in some of these cases, but there is no suggestion that 
 people can generally be compelled to testify as to their 
 dealings of every sort with any carriers."^ In regard to 
 the scope of supervision the cases in the States have been 
 very strong; thus it has been said that the action of a 
 railroad commission in requiring reports was so within 
 its administrative power that no appeal lay to the courts, 
 as it would in a matter quasi-judicial.''^ In another case ^^ 
 the power of a State commission to require that all the 
 accounts of the carrier relating to every phase of its busi- 
 ness, interstate as well as intrastate, should be kept in 
 such ways as should be prescribed was asserted. In still 
 another case ^* the distinction between a general investiga- 
 tion and a quasi- judicial proceeding was clearly set forth; 
 and the impropriety of enforcing duties as the result of a 
 mere investigation was pointed out. 
 
 § 1013. Proceedings belonging in the courts. 
 
 The Commission is not vested with jurisdiction over 
 suits to recover damages for delay in the delivery of 
 interstate shipments, so as to prevent the State courts 
 from entertaining such actions; common-law actions of this 
 sort even between carrier and shipper where the com- 
 merce is interstate still belong in the courts of law of the 
 States or what otherwise would be normally the venue. *^ 
 
 « People V. Chicago, I. & L. Ry., & P. Ry. (Tex. Civ. App.), 140 
 223 111. 581, 79 N. E. 144. S. W. 829. 
 
 ^^ St. Louis & "S. F. Ry. v. State, ■** In re Railroad Commissioners, 
 
 24 Okla. 805, 105 Pac. 351. 79 Vt. 53, 64 Atl. 233. 
 
 " Railroad Commission v. Texas « Pittsburg, C, C. & St. L. Ry. Co. 
 
 V. Knox, 177 Ind. 344, 98 N. E. 295. 
 
 [917] 
 
§ 1014 ] Railroad Rate Regulation 
 
 The Commission is given jurisdiction only to hear com- 
 plaints in regard to impropriety in rates; and the language 
 of the Act in reference to complaints to the Commission 
 must be construed as relating to those subjects which are 
 within the jurisdiction of the Commission.^" A suit 
 brought against an initial carrier to recover for loss or 
 damage to an interstate shipment caused by a connecting 
 carrier, under the provision of the Carmack Amendment, 
 is not a suit for the violation of the Act, but is a suit for 
 the value of property which may be brought in the courts 
 of a State." Where an interstate carrier refused to ac- 
 cept shipments of liquor in Indiana consigned to destina- 
 tions in prohibition counties in Kentucky, it was held 
 that a bill in equity was properly filed in the courts to 
 enjoin the carriers from refusing to accept such shipments 
 without first resorting to the Commission, since the ques- 
 tion involved was the validity of the prohibition law, 
 over which the Commission has no jurisdiction, and did 
 not present an administrative question within the scope 
 of its power. ^^ 
 
 § 1014. Testimony compelled in quasi-judicial proceedings. 
 
 The powers of the Coromission to compel testimony in 
 proceedings under the Act first came before the Supreme 
 Court in Interstate Commerce Commission v. Brimson.^' 
 The court recognized in this leading case that Congress 
 had constitutionally prescribed rules to prevent unreason- 
 able charges and unjust discriminations in interstate 
 transportation, and, for the purpose of enforcing those 
 rules, had conferred upon the Commission its power of 
 investigation. Consequently it was said that it was a 
 judicial function for the courts to compel answers to the 
 Commission's inquiries within the scope of its power, be- 
 
 ™ LouisviUe & Nashville R. R. ^^ Louisville & N. R. R. v. Cook 
 
 V. Scott, 133 Ky. 724, 118 S. W. 990. Brewing Co., 223 U. S. 70, 32 Sup. 
 
 " Galveston, H. & S. A. Ry. v. Ct. 189. 
 
 Piper Co., 52 Tex. Civ. App. 568, " 154 U. S. 447, 38 L. ed. 104, 14 
 
 115 S. W. 107. Sup. Ct. 1125. 
 [918] 
 
Supervisory Powers of the Commission [ § 1015 
 
 cause the statute created a duty upon the part of the wit- 
 ness to answer the questions, and as the duty to answer 
 questions specified was capable of judicial enforcement, 
 its enforcement would present' a case within the meaning 
 of the Constitution to determine whether what was asked 
 was within the scope of the Commission's power, and 
 whether the questions asked were pertinent to the inves- 
 tigation. The next time the powers of the Commission 
 to summon witnesses came before the Supreme Court was 
 in the case of Interstate Commerce Commission v. Baird.^* 
 It was held in this case that the Commission had the 
 right to investigate the issues formed, even if complain- 
 ant had no interest, and that, as the information sought 
 was relevant to the subject-matter of the complaint, it 
 is not a valid objection to the admission of testimony, 
 otherwise relevant and competent, that a third person is 
 interested in it when the proceeding was being prosecuted 
 under the complaint filed, and the testimony was offered 
 with a view to its competency under the allegations made 
 by the complainant. In both of these cases it will be 
 noted the Supreme Court considered exclusively the right 
 of the Commission to have the court's aid in compelling 
 answers in quasi-judicial proceedings to questions which 
 related to violations of the Act to Regulate Commerce; 
 the Court did not have before it, and did not consider in 
 either of these cases any contention that the Commission 
 had any further power to summon witnesses to answer to 
 miscellaneous questions in a general investigation under 
 the Act. 
 
 § 1015. Sxunmoning witnesses in general investigations. 
 
 There must not be in this matter any ignoring of con- 
 stitutional limitations which, for the protection of per- 
 sonal rights, must necessarily be respected in all processes 
 of law. In view of the Bill of Rights in the first ten 
 Amendments to the Constitution it would seem to be be- 
 
 " 194 U. S. 25, 48 L. ed. 860, 24 Sup. Ct. 563. 
 
 [919] 
 
§ 1015 ] Railroad Rate Regulation 
 
 yond the power of Congress, even if any general language 
 of the Act would bear so sweeping an interpretation, to 
 grant unlimited power of making inquiry into affairs of 
 the citizen. The right of personal security under the 
 Constitution involves not merely protection of his person 
 from assault, but exemption of his private affairs, books, 
 and papers from the inspection and scrutiny of others. 
 In the leading case of Harrhnan v. Interstate Commerce 
 Commission,^^ the Supreme Court held not long ago that 
 the witnesses could not be required to answer questions 
 put by the Commission except in connection with com- 
 plaints for violation of the Act or with the investigation 
 by the Commission of subjects that might have been made 
 the object of complaint, these being the only matters con- 
 templated by those sections of the Act which gave the 
 Commission power to require testimony for the purposes 
 of the Act. Nor could such sweeping powers be exercised 
 by the Commission under the section requiring it to 
 keep itself informed as to the manner and method in 
 which the business of common carriers was conducted, or 
 in connection with the enforcement of the requirement of 
 section 20 concerning reports by carriers themselves. 
 In the Louisville & Nashville case decided late in February 
 of this current year the Supreme Court held that the Com- 
 mission had under the Act no power to demand the access to 
 the correspondence files of the railroads even in a general 
 investigation of its affairs. The primary purpose of the 
 Interstate Commerce Act is to regulate interstate business 
 of carriers, and the secondary purpose, that for which the 
 Commission was established, to enforce the regulations 
 enacted by it; but the power to require testimony seems 
 necessarily to be limited, as is usual in English-speaking 
 countries, to investigations concerning a specific breach of 
 the existing law.'* 
 
 " 211 U. S. 407, 53 L. ed. 252, 29 " See Interstate Commerce Com- 
 
 Sup. Ct. 115. mission V. Reichman, 145 Fed. 225. 
 
 [920] 
 
Supervisory Powers of the Commission [ §§ 1016, 1017 
 
 Topic D. Proceedings on Its Own Motion 
 
 § 1016. Investigation by the Commission on its own motion. 
 
 The Commission, without complaint or petition of an 
 individual may investigate on its own motion the charges 
 or other practices of any carrier subject to its jurisdic- 
 tion. In such a case, before entering upon the investiga- 
 tion, it will give notice of the time and place of taking 
 testimony, and afford opportunity for calling and cross- 
 examination of witnesses." Upon investigation if it there- 
 upon appears that the conduct of the carrier is illegal, 
 the Commission should use whatever power it has to 
 correct the injustice shown. ''^ Neither the requirement 
 that complainants must prove the issues raised by com- 
 petent testimony, nor the requirement that they must 
 make out a 'prima facie case sufficiently clear and strong 
 to require the Commission in the public interest to enter 
 upon an investigation of its own, is satisfied by a com- 
 parison, without any other showing, of the rates com- 
 plained of, with rates between points in other and distant 
 localities where different physical, competitive and traffic 
 conditions exist. *'' But it should be noted that the Com- 
 mission has claimed that in the public interest it has dis- 
 cretion at least to investigate matters cognizable in the 
 courts,*" even if it can take no action thereon. 
 
 § 1017. Investigation as a result of filing new tariff. 
 
 Investigations have from the beginning been ordered by 
 the Commission upon the filing of tariffs. Any general 
 advance in transportation charges it has always held to 
 be a matter of great pubfic concern, and it seemed espe- 
 cially appropriate that the Commission, in the discharge 
 
 " Re Rates and Charges on Food ^^ Dallas Freight Bureau v. M. R. 
 
 Products, 3 Int. Com. Rep. 151, & T. R., 12 I. C. C. 427. 
 
 4 I. C. C. 116. ™ Joynes v. Pennsylvania R. R., 
 
 »In the Matter of Proposed Ad- 17 I. C. C. 361. 
 vanees in Freight Rates, 9 I. C. C. 
 Rep. 382. 
 
 [921] 
 
§ 1018 ] Railroad Rate Regulation 
 
 of its duty to keep informed touching the methods and 
 practices of railway carriers subject to the Act to Regulate 
 Commerce should ascertain the reason for advances. 
 After a full investigation the Commission would state its 
 conclusion; but since such general investigation of pro- 
 posed advances in freight charges was in a manner ex 
 parte, although the respondent carriers were fully heard 
 through their traffic representatives, and in some instances 
 through their attorneys, and since facts not brought out 
 in the inquiry, with further discussion of the subject, 
 might lead to a different conclusion, no order would be 
 made. It was, however, threatened that, unless the rates 
 be readjusted in accordance with the views expressed by 
 the Commission, proceedings would be begun agaiast the 
 several lines, which would put directly in issue the rates 
 involved." It should be noted that the Act as amended 
 in 1910 gives the Commission power to inquire into the 
 propriety of an advance, and it is the duty of the Commis- 
 sion to determine the reasonableness of the advances and 
 their propriety as well.*^ 
 
 § 1018. Investigation by order of Congress. 
 
 Investigations instituted as a result of a resolution of 
 either house of Congress have been not infrequent. The 
 Commission has been inclined to hold that its authority in 
 these cases was derived from the permission given ia the' 
 Act to proceed on its own motion. "Neither the Senate 
 nor the Department of Agriculture is authorized to make 
 any complaint, which under the statute the Commission 
 is required to investigate. The complaint^ so made and 
 repeated through the Senate and Agricultural Department 
 was not a form of legal process, but an expression of dis- 
 content and dissatisfaction with existing rates. It im- 
 posed no duty, conferred no power. It was an admoni- 
 tion suggesting too much forbearance if not an omission 
 
 »' In re Advances in Freight Rates, "* In re Advances on Barley, 24 
 
 9 Int. Com. Rep. 382. I. C. C. 664. 
 
 [922] 
 
Supervisory Powers of the Commission [ § 1019 
 
 of duty in respect to rates. As such it showed that the 
 Commission did not of its own motion without probable 
 good cause institute this inquiry and begin the investiga- 
 tion under the statute." ^^ On the other hand, it is to be 
 noted that, in instituting investigations based upon re- 
 quests emanating from Congress, the Commission in 
 framing its order will as a matter of fortifying its position 
 recite the resolutions upon which it was based, as for 
 example, it did most recently in reopening the inquiry 
 into the financial operations of the New Haven Railroad 
 System."* 
 
 § 1019. Procedure upon such investigation. 
 
 Such investigation cannot be instituted by petition, 
 since there is no petitioner; but it must be begun by some 
 notice to the carrier investigated of the subject of in- 
 quiry. An investigation of this sort having been under- 
 taken, counsel for the carriers attacked the jurisdiction 
 of the Commission on the ground that the proceeding 
 was not commenced and conducted in accordance with 
 the Rules of Practice established by the Commission, and 
 was therefore without authority of law. The Commis- 
 sion, however, held the procedure regular. The Act pro- 
 vides that the Commission may conduct its proceedings 
 in such manner as will best conduce to the proper dis- 
 patch of business and to the ends of justice, and may 
 from time to time make or amend such general rules or 
 orders as may be requisite for the order and regulation 
 of business before it. The Rules of Practice or orders 
 which have been made in accordance with those provi- 
 sions of the Act refer to proceedings coromenced by parties 
 authorized to complain and apply to the Commission by 
 petition. Such rules or orders have no appUcation to 
 proceedings instituted by the Commission on its own mo- 
 
 "3 Re Rates and Charges on Food "'' Financial Operations of the 
 
 Products, 3 Int. Com. Rep. 151,' 4 N. Y., N. H. & H. R. R., 31 I. C. 
 I. C. C. 116. C. 32. 
 
 [923] 
 
§ 1020 ] Raileoad Rate Regulation 
 
 tion. These are commenced and conducted under the 
 statute. The law requires the party complaining of any- 
 thing done or omitted to be done by any common carrier 
 to apply to the Commission by petition which shall 
 briefly state the facts, and the rules made by the Commis- 
 sion for the regulation of its proceedings require the peti- 
 tion to be verified. If the statute requires the two proceed- 
 ings, or the method of commencing the two proceedings 
 provided for in section 13 of the Act, to be commenced in 
 the same way, then there would be the absurdity that 
 the Commission to institute inquiry on its own motion 
 must present a petition to itself.*" It must be obvious 
 in this, as in other matters, that as the Commission is an 
 administrative body it must stand for the entire public and 
 it must have in mind those who do not appear before it.** 
 
 § 1020. Due process of administration. 
 
 Unless there is evidence before the Commission to show 
 that the rates attacked were uiu-easonable, there is no 
 jurisdiction to proceed fxu-ther. The legal effect of evi- 
 dence is a question of law; and a finding without evidence 
 is beyond the power of the Commission. The value of 
 evidence varies, and the weight to be given to it is pecu- 
 liarly for the Commission. Notwithstanding this a find- 
 ing without evidence of any sufficient character is a 
 nulhty. Such authority cannot be granted to any body, 
 even if Congress could be conceived of as so designing. 
 To confide such power to a Commission would be incon- 
 sistent with the fundamental principles of justice and an 
 exercise of arbitrary power condemned by the Constitu- 
 tion.*' This means that in order to have what may pass 
 as due process of law there cannot be substantial disre- 
 
 ^^ Re Rates and Charges on Food Commerce Commission, 194 Fed. 
 
 Products, 3 Int. Com. Rep. 151, 449. 
 
 4 I. C. C. 116. See, generally, Interstate Com- 
 
 '^ In re Advance Rates, Eastern merce Commission v. Louisville & 
 
 Case, 20 I. C. C. 243. N.'Ry., 227 U. S. 88, 33 Sup. Ct. 
 
 8' Atlantic C. L. Ry. v. Interstate 186. 
 
 [924] 
 
Supervisory Powers of the Commission [ § 1021 
 
 gard of our ancient traditions. The Commission is an 
 administrative body essentially, not bound necessarily 
 to the technique of judicial tribunals. But the more 
 liberal the practice in admitting testimony, the more im- 
 perative the obligation to preserve those essentials of 
 action in accordance with evidence adduced by which 
 rights have immemorially been assisted or defended. The 
 Conamission is not justified in condemning rates and mak- 
 ing revisions upon mere impressions and comparisons, 
 but may act only upon facts and conditions duly estab- 
 lished. In this light the right to hearing which the Act 
 provides must be fully protected. Manifestly there is no 
 hearing in any true sense unless the party knows what evi- 
 dence is offered or considered and is given opportunity to 
 explain and refute it. This is not merely a matter of 
 proper construction of the Act, it is a right which comes 
 from the Constitution itself."* 
 
 § 1021. Jealous protection of substantial rights. 
 
 These are substantial rights that are thus jealously pro- 
 tected. In making an investigation on complaint of a 
 shipper it has in the public interest the power disembar- 
 rassed by any supposed admissions contained in the state- 
 ment of the complaint to consider the whole subject opened 
 up by the complaint. The Commission in other words has 
 combined in its constitution two functions; as an adminis- 
 trative body it may institute proceedings but it passes upon 
 the matters thus brought before it quasi-judicially."* As a 
 practical matter the difficulties of conforming to these re- 
 quirements are not great. If the Commission takes care to 
 have read into the record the documents it wishes, if it puts 
 forward for examination the investigators it has used, the 
 
 "* Chicago, B. & Q. R. R. Co. v. Interstate Commerce Commission, 
 
 Feintuch, 191 Fed. 482. 206 U. S. 142, 27 Sup. Ct. 648. 
 
 See particularly, United States v. See also Louisville & N. R. R. v. 
 
 Baltimore & O. S. W. R. R., 226 U. S. Interstate Commerce Commission, 
 
 14, 33 Sup. Ct. 5. 195 Fed. 541. 
 
 6" Cincinnati, H. & D. R. R. v. 
 
 [925] 
 
§ 1022 ] Railroad Rate Regulation 
 
 conveniences are observed. Nobody objects to the Conunis- 
 sion using its expertness in dealing with the facts in the rec- 
 ord; the objection would be to the Commission giving judg- 
 ment on evidence locked within themselves. All this is 
 inconsistent with our notions of justice; by discretion we 
 mean a judgment controlled by principles of law. We are not 
 content in modern times with the sort of equity which the 
 Chancellor originally evolved from his inner consciousness to 
 deal v/ith each case as it came before him. Still less will any 
 people with the traditions of our race rest under proceed- 
 ings of the order of the Star Chamber without being con- 
 fronted with testimony against them.''" 
 
 § 1022. Constitutional limitations upon the Federal Govern- 
 ment. 
 
 Neither Congress, nor any legislative or administrative 
 board acting by its authorization, can competently estab- 
 lish rates for the transportation of property in interstate 
 commerce that will not admit of the carrier earning such 
 compensation for the services rendered as under all the 
 circumstances is just and reasonable to it and to the pub- 
 lic; for that would be depriving the carrier of its prop- 
 erty without due process of law, and would be taking its 
 property for public use without just compensation in vio- 
 lation of the Fifth Amendment to the Constitution.^^ 
 But any attack by carriers upon an order of the Commis- 
 sion reducing rates, on the ground that the lower rates 
 prescribed are confiscatory will be unsuccessful, where it 
 fails to show the amount of revenue necessary and suffi- 
 cient for the maintenance of the petitioners as common 
 carriers in the discharge of their duties to the public, 
 and to what extent such revenue would be affected by 
 the rates prescribed in the order complained of. If the 
 
 ™ Interstate Commerce Commis- change v. United States, 191 Fed. 
 
 sion V. Baird, 194 U. S. 25, 24 Sup. 37. 
 
 Ct. 563. " Missouri, K. & T. R. R. v. In- 
 Sec also Nashville Grain Ex- terstate Commerce Commission, 164 
 
 Fed. 645. 
 
 926] 
 
Supervisory Powers of the Commission [ § 1023 
 
 cost of transporting a single commodity cannot be shown 
 and it seems to be conceded that it is rarely possible to 
 so do, then such other facts in lieu thereof as may make 
 out a violation of the Fifth Amendment of the Constitu- 
 tion should be stated/^ These are generalizations as they 
 are stated here; but the detail of these rules has already 
 been given in such fundamental chapters as XVII, and 
 the basis of asserting these rights receives full attention 
 in Chapter XXIV. 
 
 § 1023. Recognition of these by the Commission. 
 
 If the present system of private ownership of railways 
 is to be continued, sufficient inducement must be ex- 
 tended to private investors.'^ The Commission recognizes 
 that there is a limit below which revenue of railways can- 
 not be reduced by public authority.^^ And whether the 
 result of an order will deprive carriers of fair return on 
 their property must be considered before making any 
 reduction in rates.^* The Constitution itself guarantees 
 the carrier against confiscation of their property.^^ But 
 the unfavorable financial condition of defendant cannot 
 lawfully be remedied by imposing unreasonable rates." 
 The fact that the rate on a particular commodity could 
 be reduced without impairing seriously the revenues of 
 the carrier, standing alone, has little value and forms no 
 basis upon which to determine reasonableness of rates.'^^ 
 An advance may not be unreasonable, even though for 
 ten years the carrier in question has regularly paid inter- 
 est on total bonded debt, and recently paid dividends on 
 its stock.^^ Neither carrier nor Commission should disturb 
 
 '■i Atlantic C. L. Ry. v. Interstate " City of Spokane v. N. P. Ry. Co., 
 
 Commerce Commission, 194 Fed. 21 I. C. C. 400. 
 
 449. " Railroad Commissioners of Flor- 
 
 " City of Spokane v. N. P. Ry., ida v. S. A. L. Ry., 16 I. C. C. 1. 
 
 15 I. C. C. 376. ™ Minneapolis Threshing Machine 
 
 " In re Advances in Rates, East- Co. v. C, St. P., M. & O. Ry., 17 I. C. 
 
 em Case, 20 I. C. C. 243. C. 189. 
 
 " In re Advances in Rates, West- " Morgan Grain Co. v. A. C. L. Ry., 
 
 ern Case, 20 I. C. C. 307. 19 I. C. C. 460. 
 
 [927] 
 
§ 1023 ] Railroad Rate Regulation 
 
 a long-standing system of rates without considering the 
 effect on property interests; but when a rate is unlawful 
 it should be corrected though it destroys existing prop- 
 erty rights.** 
 
 «>Albree v. B. & M. R. R., 22 I. C. C. 303. 
 
 [928; 
 
CHAPTER XXn 
 
 QUASI-JUDICIAL FUNCTIONS OF THE COMMISSION 
 
 i 1030. Provisions of the Act. 
 1031. Orders of the Commission. 
 
 Topic A. Power to Order Changes 
 
 \ 1032. Power to fix rates originally denied. 
 
 1033. Decision of the Supreme Court. 
 
 1034. Powers established by later Amendments. 
 
 1035. No disturbance of reasonable rates. 
 
 1036. Basis of reasonable rates. 
 
 1037. Jurisdictional limitations upon rate revision. 
 
 1038. Working within legal bounds. 
 
 1039. How the Commission now views its function. 
 
 Topic B. Reparation for Past Misconduct 
 
 • 1040. Reasonableness of the established rate. 
 
 1041. Reparation in connection with relief. 
 
 1042. Concurrent jurisdiction over relief. 
 
 1043. Attitude of the courts. 
 
 1044. Wrongs outside Commission jurisdiction. 
 1046. Limitations upon its powers. 
 
 1046. Basis of Commission jurisdiction. 
 
 1047. Extent of its powers. 
 
 Topic C. Jurisdiction of the Commission 
 
 1048. Recovery based upon published rate. 
 
 1049. Effect of misquoted rate. 
 
 1050. Recovery of scheduled rate through legal proceedings. 
 
 1051. State courts deprived of jurisdiction. 
 
 1052. Scheduled rates conclusive in the courts. 
 
 1053. No reparation for misquoted rate. 
 
 1054. Liability for negligence in quoting rates. 
 
 1055. Limitations of this policy. 
 
 Topic D. Findings of the Commission 
 
 i 1056. Reparation. 
 
 1057. Bases of award by reparation. 
 
 1058. Extent of the jurisdiction. 
 
 59 [929] 
 
§ 1030 ] Railkoad Rate Regulation 
 
 § 1059. Damages to business generally. 
 
 1060. Nature of the order. 
 
 1061. How far party may reopen case. 
 
 1062. Finding of Commission does not work am estoppel. 
 
 1063. The two-year rule. 
 
 1064. New petition may be filed. 
 
 1065. Reopening a case for rehearing. 
 
 § 1030. Provisions of the Act. 
 
 The jurisdiction of the Commission to determine rates 
 is to be seen in the advanced stage of its present develop- 
 ment in section 15 of the Act which as successively 
 amended now provides that whenever, after full hearing 
 upon a complaint made as provided in section 13, or after 
 full hearing under an order for investigation and hearing 
 made by the Commission on its own initiative (either in 
 extension of any pending complaint or without any com- 
 plaint whatever), the Commission shall be of opinion that 
 any individual or joint rates or charges whatsoever charged 
 or collected by any common carrier or carriers subject to 
 the provisions of the Act, or that any individual or joint 
 classifications, regulations, conduct or practices whatso- 
 ever of such carrier or carriers are unjust or unreasonable 
 or imjustly discriminatory, or unduly preferential or prej- 
 udicial or otherwise in violation of any of the provisions 
 of this Act, the Commission is authorized and empowered 
 to determine and prescribe what will be the just and rea- 
 sonable individual or joint rate or rates, charge or charges, 
 to be thereafter observed in such case as the maximum 
 to be charged, and what individual or joint classification, 
 regulation, or practice is just, fair, and reasonable, to be 
 thereafter followed. Thereupon an order may be made that 
 the carrier or carriers shall cease and desist from such viola- 
 tion to the extent to which the Commission finds the same 
 to exist, and shall not thereafter publish, demand, or col- 
 lect any rate or charge for such transportation or trans- 
 mission in excess of the maximum rate or charge so pre- 
 scribed, and shall adopt the classification and shall conform 
 to and observe the regulation or practice so prescribed. 
 [930] 
 
Quasi-Judicial Functions of the Commission [ § 1031 
 
 All orders of the Commission, except orders for the pay- 
 ment of money, shall take effect within such reasonable 
 time, not less than thirty days, and shall continue in force 
 for such period of time, not exceeding two years, as shall 
 be prescribed in the order of the Commission, unless the 
 same shall be suspended or modified or set aside by the 
 Commission, or be suspended or set aside by a court of 
 competent jurisdiction. 
 
 § 1031. Orders of the Commission. 
 
 By section 14 it is provided that whenever an investiga- 
 tion shall be made by the Commission, it shall be its duty 
 to make a report in writing in respect thereto, which shall 
 state its conclusions, together with its decision, order, or 
 requirement in the premises; and in case damages are 
 awarded such report shall include the findings of fact on 
 which the award is made. All reports of investigations 
 made by the Commission shall be entered of record, and 
 a copy thereof shall be furnished to the party who may 
 have complained, and to any common carrier that may 
 have been complained of; and the Commission may pro- 
 vide for the publication of its reports and decisions in 
 such form and manner as may be best adapted for in- 
 formation and use. By section 16 as now amended it is 
 provided that if, after hearing on a complaint made as 
 provided in section 13 of this Act, it shall be determined 
 that any party complainant is entitled to an award of 
 damages under the provisions of this Act for a violation 
 thereof, the Commission shall make an order directing the 
 carrier to pay to the complainant the sum to which he is 
 entitled on or before a day named. Every order of the 
 Commission shall then be served upon the designated 
 agent of the carrier in the city of Washington or in such 
 other manner as may be provided by law. It shall be the 
 duty of every common carrier, its agents and employees, 
 to observe and comply with such orders so long as the 
 same shall remain in effect. The Commission shall be 
 
 [931] 
 
§ 1032 ] Railroad Rate Regulation 
 
 authorized to suspend or modify its orders upon such 
 notice and in such manner as it shall deem proper. And 
 after a decision, order, or requirement has been made by 
 the Commission in any proceeding any party thereto may 
 at any time make application for rehearing of the same, 
 or any matter determined therein, and it shall be lawful 
 for the Commission in its discretion to grant such a re- 
 hearing if sufficient reason therefor be made to appear. 
 Applications for rehearing shall be governed by such 
 general rules as the Commission may establish. No such 
 application shall excuse any carrier from complying with 
 or obeying any decision, order, or requirement of the Com- 
 mission, or operate in any manner to stay or postpone 
 the enforcement thereof, without the special order of the 
 Commission. Any decision, order, or requirement made 
 after such rehearing, reversing, changing, or modifying 
 the original determination shall be subject to the same 
 provisions as an original order. 
 
 Topic A. Power to Order Changes 
 
 § 1032. Power to fix rates originally denied. 
 
 It was from the outset a hotly debated question whether 
 the CoBomission had power under the Act as it originally 
 read to make orders fixing rates to be charged in the 
 future. The right to give such relief, if it found that the 
 rates which were being charged were unreasonable, was 
 vigorously asserted by the Commission at the beginning, 
 as a power essential to its protection of the pubhc from 
 unjust exactions.*^ But the opinion of the courts was 
 practically unanimous against the contention that such 
 a power was conferred upon the Commission by the Act.*^ 
 
 " See Interstate Commerce Com- 656 Interstate Commerce Commis- 
 
 mission v. Lehigh Valley R. R., 5 sion v. Alabama Midland Ry., 6 Int. 
 
 Int. Com. Rep. 643; Interstate Com- Com. Rep. 685. 
 
 merce Commission v. Northwestern '* See Interstate Commerce Com- 
 
 Ry., 5 Int. Com. Rep. 650; Inter- mission v. Baltimore & O. R. R., 
 
 •state Commerce Commission V. Louis- 43 Fed. 37; Cincinnati, N. O. & T. 
 
 villc & N. R. R., 5 Int. Com. Rep. P. Ry. v. Interstate Commerce 
 
 [9321 
 
Quasi-Judicial Functions of the Commission [ § 1033 
 
 It was pointed out as against- the argument for the Com- 
 mission, based largely upon public policy of a vague sort, 
 that Congress by incorporating into a statute the common- 
 law duty resting upon the carrier to make its charges 
 reasonable and just, and directing the Commission to ex- 
 ecute and enforce the provisions of the Act, did not by 
 implication invest the Commission with the power to ex- 
 ercise the legislative function of prescribing rates which 
 shall control in the future. Beyond the inference which 
 irresistibly followed from the omission to grant in express 
 terms to the Commission this power of fixing rates was the 
 clear language of section 6, recognizing the right of the 
 carrier to establish rates, to increase or reduce them, and 
 prescribing the conditions upon which such increase or 
 reduction might be made, and requiring, as the only condi- 
 tions of its action, the publication and the filing of the 
 tariff with the Commission. The grant to the Commis- 
 sion of the power to prescribe the form of the schedules, 
 and to direct the place and manner of publication of 
 joint rates, thus specifying the scope and limit of its 
 functions in this respect, strengthened the conclusion that 
 the power to prescribe rates or fix any tariff for the future 
 was not among the powers granted to the Commission. 
 
 § 1033. Decision of the Supreme Court. 
 
 It was not finally decided by the Supreme Court of the 
 United States until the case of Interstate Commerce 
 Commission v. Cincinnati, New Orleans & Texas Pacific 
 Railway^' that, although the Commission had power to 
 declare rates unreasonable, it had no power under the 
 Act as it originally provided to fix the rate which the 
 carrier should charge in the future. The masterly argu- 
 ment of Mr. Justice Brewer is still not without its signifi- 
 
 Commission, 162 U. S. 184, 40 L. ed. Ry., 167 U. S. 479, 42 L. ed. 243, 17 
 
 935, 16 Sup. Ct. 700, 5 Int. Com. Sup. Ct. 896. 
 
 Rep. 391; Interstate Commerce Com- »^ 167 U. S. 479, 42 L. ed. 243, 17 
 
 mission v. Cincinnati, N. O. & T. P. Sup. Ct. 896. 
 
 [933] 
 
§1034] Railkoad Rate Regulation 
 
 cance as to the course to be followed in statutory inter- 
 pretation, as the beginning of his summing up of his 
 conclusions will show: "We have therefore these considera- 
 tions presented: First. The power to prescribe a tariff of 
 rates for carriage by a conunon carrier is a legislative, 
 and not an administrative or judicial, function, and, 
 having respect to the large amount of property invested 
 in railroads, the various companies engaged therein, the 
 thousands of miles of road, and the millions of tons of 
 freight carried, the varying and diverse conditions at- 
 taching to such carriage, is a power of supreme dehcacy 
 and importance. Second. That Congress has transferred 
 such a power to any administrative body is not to be pre- 
 sumed or imphed from any doubtful and uncertain lan- 
 guage. The words and phrases efficacious to make such 
 a delegation of power are well understood, and have been 
 frequently used, and, if Congress had intended to grant 
 such a power to the Interstate Commerce Commission, 
 it cannot be doubted that it would have used language 
 open to no misconstruction, but clear and direct." ^* 
 
 § 1034. Powers established by later Amendments. 
 
 Thus from the beginning of federal regulation of inter- 
 state carriers to the present time the sound theory upon 
 which that supervision has proceeded has been that the 
 primary right to conduct its business remains with the 
 carrier, the Commission having secondary power to take 
 action when revision is called for. As has just been seen, 
 vmder the original Act the power of the Commission to 
 give relief from unreasonable charges was held to go no 
 further than to declare the existing rate unreasonable. 
 But by the amendments of 1906 the Commission was 
 given the further power, after finding the rate which was 
 being charged unreasonable, to fix a reasonable rate for 
 the future. It should be noted that, important as that 
 
 8< See also Interstate Commerce Ry., 168 U. S. 144, 42 L. ed. 414, 18 
 Commission v. Alabama Midland Sup. Ct. 145. 
 
 [934] 
 
Quasi-Judicial Functions of the Commission [ § 1035 
 
 amendment was, it did not change the fundamentals of 
 the situation. The carrier still retains the right to make 
 its rates, the Commission having power only to set them 
 aside under the conditions named in the Act.*^ As to the 
 constitutionality of the Act as amended, there would 
 seem to be no doubt, as it has repeatedly held that such 
 power — even in the more extreme form of establishing 
 rates and making schedules — ^may be given over to a 
 commission by the legislature. At all events the only 
 question which has been seriously litigated under the Act 
 is the extent to which limitations are imposed upon the 
 Commission. The process provided by the Act in accord- 
 ance with the principles under discussion is the measure 
 of the authority of the Commission. The Commission 
 cannot take action affecting the charges of a carrier ex- 
 cept upon the basis of a hearing and a finding upon the 
 evidence that the rate being charged is unreasonable.^^ 
 
 § 1035. No disturbance of reasonable rates. 
 
 The power of the Commission to alter rates depends 
 altogether upon the fact of their unreasonableness, and 
 in the absence of evidence to that effect the Commission 
 has no authority. All this may not have been so plain 
 in regard to this amendment at the outset as it has be- 
 come subsequently in the light of the decisions interpret- 
 ing it. But by the time that the case of Interstate Com- 
 merce Commission v. Stickney *' was decided it had 
 become clear enough that a carrier under section 15 as 
 amended was entitled to a finding by the Commission 
 that the particular charge complained of was unreason- 
 
 *' Likewise the Commission has ^ It should be noted that the Com- 
 authority to order a raih-oad to so mission has no power under the Act 
 adjust its rates as to prevent dis- to fix minimum rates for the pro- 
 crimination against a shipper with- tection of a competitor; its juris- 
 out prescribing the new rates to be diction is confined to fixing maxi- 
 apphed, or specifying how the charges mum rates for the carriers involved 
 should be equahzed. See New York in the proceedings before it. See 
 Central & H. R. R. Co. v. Interstate Norfolk & W. R. R., 195 Fed. 953. 
 Commerce Commission, 168 Fed. 131. ^ 215 U. S. 98, 30 Sup. Ct. 66. 
 
 [9351 
 
§ 1036 ] Railroad Rate Regulation 
 
 able before a change could be required. Moreover, as 
 that case held, a charge for a service which did not give 
 the carrier more than a fair profit for performing it, was 
 not unreasonable. For the Commission to attempt to fix 
 a new rate at the out of pocket cost in place of the exist- 
 ing rate, which included a profit upon the service per- 
 formed, was therefore altogether beyond the statutory- 
 limitations upon the power of the Commission. Probably, 
 however, this would not be an invasion of constitutional 
 rights, since the profits of the company taken as a whole 
 apparently remained sufficient.^^ Not until such a finding 
 has been made has the Commission, as the Act reads, any 
 jurisdiction to take any further action. 
 
 § 1036. Basis of reasonable rates. 
 
 The duty of the Commission is not that of a lawmaker 
 laying down such rules of public policy as it may think 
 will promote the common weal. Its function is to see 
 whether the rates which the carrier is charging are in 
 accordance with the requirements of law laid down in the 
 Act, and if they are not to make them so. As was in- 
 sisted in Interstate Commerce Commission v. Chicago, 
 Rock Island and Pacific Railway,*' this determination is 
 for the Commission in first instance, the power of the 
 courts being confined to discovering whether the action 
 of the Commission is within the scope of the delegated 
 authority under which it purports to have been made. 
 The question in that particular case was a close one, as 
 the Commission had obviously certain policies of rate- 
 making in mind in dealing with basing points which in- 
 evitably involve the respective position of trade centers. 
 The carriers complained to the courts that, by the artifi- 
 cial apportionments made, the Conunission was laying an 
 arbitrary hand upon the traffic of the country. But the 
 
 8«See Minneapolis & St. L. Ry. «''218 U. S. 88, 30 Sup. Ct. 
 
 V. Minnesota, 186 U. S. 257, 22 Sup. 651. 
 Ct. 901. 
 
 [936] 
 
Quasi-Judicial Functions of the Commission [ § 1037 
 
 Supreme Court decided that there was enough in the 
 record to satisfy it that the rates set aside were unreason- 
 able, and that the rates put in their place were proper. 
 The court was divided, however; and it was obvious that 
 further discussion of the whole matter would soon be 
 required. It is all very well to say, as the majority did, 
 that commissions must have a broad outlook; but the 
 question is by what rules are they to act if we are to have 
 a government of laws, not of men.'" 
 
 § 1037. Jurisdictional limitations upon rate revision. 
 
 It was not until the case of the Southern Pacific Com- 
 pany V. Interstate Conomerce Commission," that the 
 significance of these provisos in the Act became apparent, 
 whereby the foundations of the jurisdiction of the Com- 
 mission were specified. The Commission, as it appeared 
 in that case, had come to the rescue of the lumber indus- 
 try of the Willamette valley, which was threatened by 
 advances in rates which had been put into effect shortly 
 before. At all events, it had after due proceedings fixed 
 lower rates for the future in place of the old rates, ap- 
 parently upon the ground that it would be a wise policy 
 to keep open the markets which had thus been closed. 
 The earlier rates undoubtedly had thus created markets 
 upon which the shippers had come to rely; but, as the 
 Supreme Court pointed out, all these arguments ignored 
 the provisions of the Act. In the absence of a finding 
 that the advanced rates which carriers had put in effect 
 were unreasonable, it was clearly laid down that the Com- 
 mission had no jurisdiction to go further; and this was not 
 made out by showing that public interests would be pro- 
 moted by lower rates. Such arguments might sometimes 
 
 ™ It should be said that the basing Commission in relation to rates, 
 of rates upon what is economically Philadelphia & R. Ry. v. Interstate 
 desirable has never been the test of Commerce Commission, 174 Fed. 
 the federal courts in reviewing the 687. 
 
 orders of the Interstate Commerce " 219 U. S. 433, 31 Sup. Ct. 288. 
 
 [937] 
 
§§ 1038, 1039 ] Railroad Rate Regulation 
 
 avail carriers in explaining differentials; but they could not 
 justify comniissions in ordering changes.'^ 
 
 § 1038. Working within legal bounds. 
 
 With the famous case of Interstate Commerce Commis- 
 sion V. Atchison, Topelta & Santa Fe Railway ^^ at last 
 brought to a termination by the late affirmation of the 
 Supreme Court we are now in a position to see just what 
 the scope of the power of the Commission is under the 
 Act. This matter of the Lemon rates from the Pacific 
 coast has been going back and forth between the Commis- 
 sion and the courts for some time. First, the Commis- 
 sion reduced the rates for reasons in last analysis more 
 economic than legal; and this order the Commerce Court 
 set aside, as the existing rate had not been sufficiently 
 shown to be unreasonable in the sense of the law. Then 
 the Commission took further testimony, making at least 
 a showing sufficient to justify it in declaring the existing 
 rates unreasonable, and substituted new rates; and the 
 federal court then held in effect that whatever motive 
 might be behind this action there was reason enough ap- 
 parent in the record for the course it had pursued. All 
 this means that the Commission must work within legal 
 bounds when it sets out to revise rates; and that any car- 
 rier which is charging no more than reasonable rates profita- 
 ble in themselves need not fear disturbance by the Commis- 
 sion upon some theory or other of adjustment of rates.^* 
 
 § 1039. How the Commission now views its function. 
 
 The Commission had never felt altogether free from the 
 
 ^^ The general principle which the " The federal courts have always 
 majority of courts are now laying insisted that the Commission shall 
 down as the guide for all concerned keep itself to the basis of the condi- 
 seems to be that what is a reasonable tions affecting the movement of 
 rate depends upon the significance of traffic as the standard established 
 that phrase at common law. South- by the laws for the reasonableness 
 em Indiana R. R. v. Railroad Com- of rates. Interstate Commerce Com- 
 mission, 172 Ind. 113, 87 N. E. 966. mission v. Delaware, L. & W. Ry., 
 
 S8 231 U. S. 736, 34 Sup. Ct. 316. 64 Fed. 723. 
 
 [938] 
 
Quasi-Judicial Functions of the Commission [ § 1040 
 
 limitations of the Act. It had said before these decisions 
 of the courts were handed down that its function as an 
 administrative body was to regulate interstate rates only 
 to the extent that jurisdiction had been confided to it by 
 the Congress in accordance with the Constitution.' And 
 in another opinion of this period it had said that the duty 
 of the Commission as an administrative body was to es- 
 tablish reasonable rates without attempting to foster one 
 interest at the expense of another.^ The Commission has 
 been insistent that it does not sit to give opinions on ab- 
 stract questions.' So as a matter of policy it will not 
 construe the Act before any violation thereof is charged; 
 nor will it express an opinion upon facts not brought be- 
 fore it by a petition within its jurisdiction.* And for 
 these reasons it has held that it will not make orders until 
 a violation of Act is charged.^ The Commission also ap- 
 preciates that it does not lie within the scope of its func- 
 tions to dictate as to the policies upon which carriers 
 shall act in framing a system of rates.* And it will not 
 consider that it has any concern with the intent lying 
 behind an advance in rates, so long as the rates estab- 
 lished are reasonable in themselves.^ 
 
 Topic B. Reparation for Past Misconduct 
 
 § 1040. Reasonableness of the established rate. 
 
 Rates duly estabUshed in accordance with the require- 
 ments of the Act to Regulate Commerce are binding upon 
 
 'Schemn v. L. & N. R. R., 20 Steel Wire Co., 1 Int. Com. Rep. 
 
 I. C. C. 550. 605; Re United States Commission 
 
 2 Cobb V. N. P. Ry., 20 1. C. C. 100. of Fish and Fisheries, 1 Int. Com. 
 
 ' Pennsylvania Co. v. LouisvUle, N. Rep. 606. 
 
 A. & C. R. R., 2 Int. Com. Rep. 603. ^ Re Order of Railway Conductors, 
 
 * Re Order of Railway Conductors, Traders & Travelers Union v. Phila. 
 
 1 Int. Com. Rep. 18, 1 I. C. C. 8; & Reading R. R., 1 Int. Com. Rep. 
 
 Re Theatrical Rates, 1 Int. Com. 18. 
 
 Rep. 18; Re Inmates of Nat. Homes, « Port Arthur B. of J. v. A. & S. 
 
 1 Int. Com, Rep. 73; Boston & A. Ry., 27 I. C. C. 388. 
 
 R. R. V. Boston & L. R. R., 1 Int. ' Re Advances in Barley, 24 I. C. C. 
 
 Com. Rep. 571; Re Iowa Barb 664. 
 
 [939] 
 
§ 1041 ] Railroad Rate Regulation 
 
 carriers and shippers a,like so long as they remain in ef- 
 fect. The law requires that such rates shall be reasonable 
 and just and authorizes the Commission to award repara- 
 tion on account of the exaction of unreasonable trans- 
 portation charges. It follows that although a rate is by 
 the terms of the law binding upon all so long as it remains 
 in effect, such rate may be found and declared to be unlaw- 
 ful and reparation given on account of its unreasonableness. 
 To hold otherwise would be to make the mere estabUsh- 
 ment of rates by a carrier conclusive of their reasonable- 
 ness and justness, and leave shippers without recourse for 
 the recovery of excessive charges. It is the duty of car- 
 riers and shippers to observe the established rates, and 
 there can be no waiver of charges which accrue pending a 
 contest or dispute as to the reasonableness of the estab- 
 lished rates.* It follows that the Commission has jurisdic- 
 tion without regard to the amount in controversy, to award 
 damages whenever they arise under the Act, excepting in 
 those cases where the Act itself names another forum.^ 
 
 § 1041. Reparation in connection with relief. 
 
 In any case where the published rate is unjustly dis- 
 criminatory, the Commission has jurisdiction to order 
 reparation to shippers injiu-ed thereby."* The power of 
 the Commission is ample to declare rates and rules set 
 forth in a tariff schedule imjust or unreasonable; and when 
 a rate has been found unreasonable, and a reasonable rate 
 has been established, to order that reparation shall be 
 made." Whether the Commission is authorized to deny 
 damages where it has found that a rate charged was un- 
 reasonable or unjustly discriminatory has not as yet been 
 decided.^^ The constitutionality of the provision author- 
 
 « Moore Produce Co. v. C. M. & Co. v. C, R. I. & P. Ry., 13 I. C. C. 
 St. P. Ry., 15 I. C. C. 334. 128. 
 
 5 Washer Grain Co. v. M. P. Ry., " Moore Produce Co. v. C, M, & 
 
 15 I. C. C. 147. St. P. Ry., 15 I, C. C. 334. 
 
 '" Minneapolis Threshing Machine '^ Mfrs. & Merchant's Ass'n v. 
 
 A. & A. R. R., 25 I. C. C. 116. 
 
 [940] 
 
Quasi-Judicial Functions of the Commission [ § 1043 
 
 izing awards of reparation has been questioned by the car- 
 riers on the ground that it deprives the court of jurisdiction 
 over the recovery of damages; but the Commission at all 
 events, has no doubts that the granting of reparation is an 
 integral part of the system of regulation whereby the rates 
 scheduled must be paid until revised by the Conamission." 
 
 § 1042. Concurrent jurisdiction over relief. 
 
 The bringing of a suit in the United States Circuit 
 Court for the recovery of excessive railway charges is not 
 a bar to a subsequent proceeding before this Commission, 
 where that suit was dismissed without prejudice, and for 
 the reason that the Commission had never passed upon 
 the reasonableness of the rate involved." Notwithstand- 
 ing the powers conferred on the Commission by section 15 
 of the Act, the federal courts have jurisdiction imder 
 section 9 over the subject-matters in a suit for damages 
 for unjust discrimination; and it was not necessary first 
 to resort to the Commission.^^ The jurisdiction of Com- 
 mission to award damages has been said to be dependent 
 upon the establishing of a maximum rate, as its power to 
 grant reparation is dependent upon its finding reason to 
 alter the schedule complained of on the basis that it is un- 
 reasonable as it stands.'* The Commission is, therefore, as 
 has been held in another opinion recently, without authority 
 to award damages in any case unless the rate assailed was 
 in violation of the Act at the time shipments moved. '^ 
 
 § 1043. Attitude of the courts. 
 
 Rehef from excessive freight charges upon interstate 
 shipments, where the charges are made according to es- 
 tabhshed rates fixed and promulgated as required by the 
 
 13 Commercial Club of Omaha v. ■* Langdon v. Penn. R. R., 194 
 
 A. & S. R. Ry., 27 I. C. C. 302. Fed. 486. 
 
 " Baer Bros. Mercantile Co. v. " Commercial Club of Omaha v. 
 
 Missouri P. R. Co., 11 I. C. C. A. & S. R. Ry., 27 I. C. C. 302. 
 329. " New Pittsburg Coal Co. v. H. V. 
 
 Ry., 26 I. C. C. 121. 
 
 [941] 
 
§ 1044 ] Railroad Rate Regulation 
 
 Act, must, therefore, be sought through the Commission.'^ 
 Generally speaking the enforcement of the Interstate 
 Commerce Act is naturally enough regarded as a federal 
 matter; the United States courts and the Interstate Com- 
 merce Commission have exclusive jurisdiction of actions 
 fDased upon the Act, or brought to enforce a right created 
 by the Act." The Commission alone has original jurisdic- 
 tion to determine whether an existing rate schedule, or an 
 existing regulation or practice affecting rates or an existing 
 regulation or practice of any other kind affecting matters 
 sought to be regulated by the Act, is unjust or unreasonable, 
 or imjustly discriminatory, or unduly preferential, or preju- 
 dicial.^" And the courts cannot by mandamus, injunction or 
 otherwise control or modify any order of the Commission 
 made by it in the due performance of its merely adminis- 
 trative functions.-' 
 
 § 1044. Wrongs outside Commission jurisdiction. 
 
 The authority of the Commission to award damages ex- 
 tends only to such damages as accrue from violations of 
 the Act.^^ And the Act restricts the Commission's author- 
 ity to award damages to cases in which the carrier may 
 only be liable under the Act.^^ As the Commission can 
 award damages only for violation of the Act, it has no 
 authority to administer a remedy in applications for re- 
 lief based solely upon a contractual relation.^* No duties 
 are delegated to the Commission to determine the purpose 
 or scope of statutes under which rights and privileges may 
 be reserved to the United States in return for subsidies in 
 lands or loans or credit. ^'^ And likewise wrongs defined 
 
 '8 A., T. & S. F. Ry. v. The Su- " Hampton Mfg. Co. v. O. D. S. 
 
 perior Refining Co., 83 Kan. 732, 112 S. Co., 27 I. C. C. 666. 
 Pac. 604. 23 Blume & Co. v. Wells, Fargo & 
 
 "Hardaway v. Southern Ry., 90 Co., 15 I. C. C. 53. 
 S. C. 475, 73 S. E. 1020. ^4 Wood-Mosaic Flooring & Lumber 
 
 2» Saunders & Co. v. S. P. Co., Co. v. L. & N. R. R., 22 I. C. C. R. 
 
 18 I. C. C. 415. 458. 
 
 " Morrisdale Coal Co. v. Penn. "o United States v. U. P. R. R., 28 
 
 R. R., 183 Fed. 929. I. C. C. 518. 
 [942] 
 
QiiAsi-JuDiciAL Functions of the Commission [ § 1045 
 
 by the anti-trust acts, such as unfair competition, have 
 been held to be beyond the Commission's jurisdiction.-" 
 On the other hand, if there be a combination in restraint 
 of trade among shippers which controls price of commodity 
 without regard to ordinary laws of production and dis- 
 tribution, that is no excuse for unreasonable rate.^'^ But 
 if a combination among carriers to raise rates unduly is 
 discovered the advanced rates may be suspended under 
 the powers which the Commission now possesses.^* But the 
 mere fact in itself that advances were the results of con- 
 certed action does not furnish a foundation for declaring 
 rates unlawful.^' It should be noted, however, in qualifi- 
 cation, of the authority of these decisions to-day that by 
 the sweeping clauses of the Clayton Act a load supervi- 
 sion over restraint of trade and monopolization of com- 
 merce by carriers subject to the Act has been conferred 
 upon the Commission.^" 
 
 § 1045. Limitations upon its powers. 
 
 The Commission is the creature of statute; and its 
 authority is solely derived from the Act of Congress 
 creating the Commission and the various amendments; 
 its function is to administer the Act to Regulate Commerce 
 and not to enforce conditions found in Federal or other 
 charters. While, therefore, a violation of the conditions 
 of the acts of Congress granting the rights of way may 
 be grounds for forfeiture, the remedy is in the courts, as it 
 is not the province of the Commission to enforce com- 
 pliance with conditions subsequent found in railroad 
 charters." The Commission has had to point out again 
 and again that the jurisdiction which it posseses to award 
 compensation in suit for reparation for past offenses against 
 
 ^ Iowa V. A. C. L. R. R., 24 1. C. C. ^' Railroad Commission of Tex. 
 
 134. V. A., T. & S. F. Ry., 20 I. C. C. 463. 
 
 " Maritime Exchange v. P. R. R., ™ These clauses are reprinted in 
 
 21 I. C. C. 81. the Appendix. 
 
 2» In re Advances in Rates, Bast- " Haines v. Chicago, R. I. & P. R., 
 
 ern Case, 20 I. C. C. 343. 11 I. C. C. 214. 
 
 [943] 
 
§ 1046 ] Railroad Rate Regulation 
 
 the Act does not cover suits for damages generally for in- 
 juries done to shippers by carriers. So the Commission will 
 dismiss a suit which comes down upon analysis to an action 
 of conversion for withholding dehvery of goods. '^ And, gen- 
 erally speaking, there is no jurisdiction to award damages in 
 tort for negligent injuries or consequential damages resulting 
 therefrom.^' Where a complainant asked the establishment 
 of routing for certain interstate electric passenger cars over a 
 viaduct owned by a bridge company which is not subject to 
 the Act, it was dismissed for want of jurisdiction, the relief 
 sought being a plan of physical operation not within the 
 Commission's power.^* And on the same grounds a peti- 
 tion asking that carriers be required to transport goods 
 without delay was dismissed.'* Likewise the Commission 
 has no power to compel lake lines to run their boats to a 
 given city, as it pointed out in a recent decision.'' 
 
 § 1046. Basis of Commission jurisdiction. 
 
 As has already been pointed out several times in the 
 course of this discussion, the Commission has no jurisdic- 
 tion to enforce contracts in any proceeding.'^ And con- 
 sequently it is not within the province of the Commission 
 to determine the validity or legality of a contract.'* Thus 
 it was said in one proceeding that if the complainants had 
 a contract with defendant to locate and maintain its 
 station, they may perhaps maintain a suit at law for 
 breach of that contract; but the Commission has no power 
 to award damages for failiir^ to perform such a contract. '^ 
 And in another proceeding it was said later that the 
 power of the Commission to require switch coimection 
 
 32 MacBride C. & C. Co. v. St. P., '« Esoanaba Business Men's Ass'n 
 
 M. & O. Ry., 13 I. C. C. 571. v. A. A. R. R., 24 I. C. C. 11. 
 
 '' Folmer & Co. v. Gt. No. Ry., " L. & N. R. R. Co. v. M., St. P. & 
 
 15 I. C. C. 33. S. S. M. Ry., 24 I. C. C. 639. 
 
 '* Kansas City v. K. C. V. & T. ^ Greenbaum Co. v. C. & O. Ry. 
 
 Ry., 24 I. C. C. 22. Co., 25 I. C. C. 352. 
 
 ^^ Ponchatoula Farmers' Ass'n v. ^' Eddlemann v. Midland Valley 
 
 I. C. R, R., 19 I. C. C. R. 513. R. Co., 11 I. C. C. 103. 
 
 [944] 
 
Quasi-Judicial Functions op the Commission [ § 1047 
 
 was not founded upon any contractual relationship exist- 
 ing between carriers and those entitled to invoke the 
 benefit of the statute; and therefore the Commission is 
 without jurisdiction to compel defendant to specifically 
 perform a contract in respect thereto or to award damages 
 for the breach thereof. ^° The Commission's jurisdiction, 
 in a general sense, extends only to the duties which the 
 carrier owes to its patrons as a common carrier to the 
 shipping public. *i It does not purport to have been given 
 jurisdiction generally to adjudicate claims between carriers 
 and shippers, even those arising out of matters happening 
 in connection with the transportation itself.*^ 
 
 § 1047. Extent of its powers. 
 
 The Commission, therefore, is not made a court to 
 settle differences to which carriers are parties; indeed 
 under our constitutional system judicial power of this 
 extensive character could not be intrusted to an adminis- 
 trative body. Thus the Commission does not imdertake 
 to determine questions of respective liability, such as 
 whether the vendor or the vendee is liable for demurrage 
 charges.^' And the Commission is even without authority 
 to enter an order requiring a shipper to make good to the 
 carrier an undercharge, where less than the published 
 rate has been collected by error. ""^ And the Commission 
 cannot allow set-off of unpaid freight bills against a rep- 
 aration suit for improper exaction of unreasonable rates 
 as that would involve jurisdiction over collecting bills.*^ 
 It is equally clear, as has been seen, that the Commission 
 has no power as between carrier and shipper to direct 
 payment of damage claims, since a failure to answer for 
 
 ■"> Ralston Townsite Co. v. M. P. ■" Crescent Coal & Mining Co. v. 
 
 Ry. Co., 22 I. C. C. 354. B. & O. R. R. Co., 23 I. C. C. 81. 
 
 " Southwestern Produce Distribu- " Falls & Co. v. C, R. I. & P. Ry. 
 
 ters V. W. R. R. Co., 20 I. C. C. Co., 15 I. C. C. 269. 
 
 458. '' Lanning Harris Coal & G. Co. v. 
 
 « Lanning H. C. <t G. Co. v. St. L. St. Louis & St. F. R. R., 15 I. C. C. 
 
 & S. F. R. R., lo I. C. C. 37. 37. 
 
 60 [ 945 ] 
 
§ 1048 ] Railroad Rate Regulation 
 
 torts is not a violation of the Act.^* Nor has the Commis- 
 sion jurisdiction over prompt settlement of damage claims, 
 since this would involve the judicial power of delivering 
 private rights/^ Injm-ies caused by negligence are not a 
 ground for granting reparation by the Commission as this 
 would involve the redress for private wrongs.** And it is 
 not the tribunal to resort to for an award of damages for 
 shrinking of cattle in transit.*^ Likewise, the Commission 
 has no jurisdiction over suits to recover damages to ship- 
 pers caused by delays in handling shipments.^" It is 
 equally true that the Commission has no jurisdiction over 
 contracts between carriers and shippers so long as these 
 do not affect rates for service subject to the Act.^^ Cer- 
 tainly there has been no attempt to make it a court of 
 equity to enforce performance of contracts. ^^ Nor can 
 it assume jurisdiction to determine habilities for breach 
 of contract.*^ Generally speaking, only those matters 
 which affect rating in transportation are within its juris- 
 diction.^* 
 
 Topic C. Jurisdiction of the Commission 
 
 § 1048. Recovery based upon published rate. 
 
 A carrier is prohibited from accepting either more or 
 less or different compensation than that stated in tariff. ^^ 
 The Act charges every shipper with knowledge of the law- 
 ful rate, or rather makes it immaterial whether or not he 
 knows it.^^ Shippers, being charged by law with knowl- 
 
 « Larkin Co. v. E. & W. T. Co., " ConsoUdated Pump Co. v. L. S. 
 
 24 I. C. C. 645. & M. S. Ry., 27 I. C. C. 519. 
 
 " Ponchatoula Farmers' Ass'n v. '^ Ralston Townsite Co. v. M. P. 
 
 I. C. R. R., 19 I. C. C. 513. Ry., 22 I. C. C. 354. 
 
 « Polmer Co. v. Gt. No. R. R., 15 " General Electric Co. v. N. Y. C. 
 
 I. C. C. 33. & H. R. R. R., 14 I. C. C. 237. 
 
 ^' Carstein's Packing Co. v. Ore- '^ In re Weighing of Freight by 
 
 gon R. R. & N. Co., 17 I. C. C. Carriers, 28 I, C. C. 7. 
 
 125. '6 Ford Co. v. M. C. R. R. Co., 
 
 » Pittsburgh, C, C. & St. L. Ry. 19 I. C. C. 507. 
 
 V. Knox, 177 Ind. 344, 98 N. E. =« Pranke Grain Co. v. I. C. R. R., 
 
 295. 27 I. C. C. 625. 
 
 [ 946 ] 
 
Quasi-Judicial Functions op the Commission [ § 1048 
 
 edge of the lawful rates, cannot claim the benefit of a lower 
 than the lawful rate, on the ground that some railroad 
 clerk has made a mistake in quoting a lower rate for a 
 particular shipment. ^^ Rates are governed by published 
 tariffs and not by notations made on bills of lading, or 
 other extrinsic representations.^* The terms of the tariffs 
 filed and published are the sole guide in assessing trans- 
 portation charges for better or worse. ■^'' The general 
 principle underlying these rules is that a carrier is bound 
 to charge neither more nor less nor different compensation 
 to any shipper than the scheduled rate.^" The lawfully 
 published rate is, therefore, the only rate that can be 
 applied, regardless of rate quoted." And mistake of a 
 shipper as to what rate is applicable to his shipment is 
 no basis for reparation.'^ In cases of the exaction of a 
 rate higher than that in the published tariff, the shipper 
 may go into court in the first instance; but the Act also 
 appears to give the Commission and courts concurrent 
 jurisdiction in this respect."^ Indeed, if higher rates than 
 schedule have been collected, it is a case where the carrier 
 should voluntarily make a refund to the shipper, subject 
 to the scrutiny of the transaction by the Commission."^ 
 It is to be noted, however, that straight overcharges can 
 and should be refunded without going to the Commission.**' 
 And generally speaking unpublished charges and those in 
 excess of jjublished charges should be so refunded."" If 
 there is no scheme to cover a rebate on foot, it will be 
 safe for the carrier to refund such overcharge on own ac- 
 
 " Poor Grain Co. v. Chicago, B. "^ Running v. St. P., M. & O. Ry., 
 
 & Q. R., 12 I. C. C. 418. 19 I. C. C. 565. 
 
 ^* Pole Stock Lumber Co. v. G. & " Laning-Harris Coal & Grain Co. 
 
 S. L R. R., 26 I. C. C. 451. v. St. L., & S. S. F. R. R., 15 
 
 ii9 Johnson v. A., T. & S. F. Ry., I. C. C. 37. 
 
 25 I. C. C. 207. " Forster Bros. Co. v. D. S. S. & 
 
 6» Humbolt S. S. Co. V. W. P. & A. Ry., 14 I. C. C. 2.32. 
 
 Y. Route, 25 I. C. C. 136. =* Isabell Brown Co. v. M. C. R. R., 
 
 6' Cater Bros. v. M. L. & T. R. R. 15 I. C. C. 616. 
 
 & S. S. Co., 21 I. C. C. 511. » Northern Lumber Mfg. Co. v. 
 
 T. & P. Ry., 19 I. C. C. 54. 
 
 [947] 
 
§ 1049 ] Railroad Rate Regulation 
 
 count." If it turns out that there was no tariff authority 
 for the alternative rates upon the basis of which a refund 
 had previously been made, the refund originally made to 
 the shipper should thereupon be returned to the carrier.*^ 
 
 § 1049. Effect of misquoted rate. 
 
 The Commission has always maintained that the mis- 
 quotation of a rate is no basis for an award of reparation 
 against a carrier.** It has been felt that it could not prop- 
 erly permit the complainant to obtain by means of refund 
 an advantage to which it is not entitled under regulations 
 formerly in effect.™ The question as to what rates should 
 be applied is not to be determined by reference to in- 
 formation given out by clerks.^^ It follows that where 
 one ships from a certain point on the assurance of the 
 carrier that a certain rate applied, a higher rate being in 
 fact in force, it is immaterial, on the question of repara- 
 tion, whether the shipper would have made the shipment.'^^ 
 Had he not been misinformed, it is possible he might have 
 protected himself." Yet the rule is positive that the 
 schedule governs even in case of misquotation by a rate 
 clerk.^^ It is fundamental that the lawfully established 
 rate is the rate that must be applied, notwithstanding 
 the erroneous information given.''" The policy' of this is 
 to make it clear that even when there has been a mis- 
 quotation of a tariff rate, there is no ground for departure 
 from the rates which others are paying.™ In other words, 
 the published rate must be paid and collected, regardless 
 of what rate is quoted. 
 
 " Mounsen & Co. v. Gila V. G. & " Williamette Pulp & Paper Co. 
 
 N. Ry., 14 I. C. C. 614. v. N. P. Ry., 18 I. C. C. 388. 
 
 «« Birge-Forbes Co. v. M. R. & " Snyder M. D. v. Chicago, B. & 
 
 T. Ry., 28 I. C. C. 409. O., 18 I. C. C. 498. 
 
 »' Fairbault Furniture Co. v. Chi- " McLean Lumber Co. v. L. & N. 
 
 cago Gt. W. R. R., 25 I. C. C. 40. R. R., 22 I. C. C. 349. 
 
 '" Clinton Sugar Refining Co. v. '^ Alabama Lumber & Export Co. 
 
 C. & N. W. Ry., 28 I. C. C. 364. v. P. B. & W. R. R., 19 I. C. C. 295. 
 
 " Crescent Coal & Mining Co. v. '» Scott v. T. & N. 0. R. R., 20 
 
 C. & E. I. R. R., 24 I. C. C. 149. I. C. C. 167. 
 
 [948] 
 
QxjAsi-JuDiciAL Functions of the Commission [ § 1050 
 
 § 1050. Recovery of scheduled rate through legal proceed- 
 ings. 
 
 The strict provisions against rebating in the Act are 
 based upon an ingenious plan. It has been seen that the 
 system of regulation now prevaihng is predicated upon 
 having a schedule of rates prepared by the railroad and 
 filed with the Commission, and duly pubhshed and posted 
 as required. When this has been done, the rate so sched- 
 uled and filed cannot be changed by the railroad without 
 the filing and sufficient publication of a new rate. It is 
 to safeguard this situation that the doctrine is carried to 
 such an extent that even if a shipper is at first charged a 
 lower rate quoted him by a freight agent, he can later be 
 compelled to pay the difference between this and the 
 scheduled rate; and the courts have gone along with this 
 doctrine to the extent that the logic of the situation re- 
 quires.^'^ If the rate so pubhshed is unreasonable in itself 
 or otherwise disproportionate, nevertheless the shipper can- 
 not now go to the courts to get redress. The shipper's only 
 remedy is by a complaint to the Commission, which will re- 
 sult, if successful, in a reduction in the future and in dam- 
 ages for past unfair exactions. By the system established 
 under the Act, the Commission has power to inquire into 
 the reasonableness of the scheduled rate, and to make it 
 
 " United Stales— Texas & P. Ry. v, 
 Mugg, 202 U. S. 242, 26 Sup. Ct 
 242; Gulf C. & S. F. Ry. v. Hefley, 
 158 U. S. 98, 15 Sup. Ct. 802 
 Henderson Elevator Case, 226 U. S 
 
 103, 23 Atl. 755, 29 Am. St. Rep. 175. 
 
 Georgia — Savannah F. & W. Ry. 
 Co. V. Bundick, 94 Ga. 775, 21 S. E. 
 995. 
 
 Louisiana — Foster G. Co. v. Kan- 
 
 441, 33 Sup. Ct. 176; Gt. Northern sas City So. Ry., 121 La. 1053, 40 So. 
 
 Ry. V. Kalispell L. Co., 165 Fed. 25; 1014. 
 
 Columbus I. & S. Co. v. Kanawha Montana — BuUard v. Northern 
 
 & M. Ry., 171 Fed. 713. Pacific Ry. Co., 10 Mont. 168, 25 
 
 Alabama — -Southern Ry. Co. v. Pac. 120. 
 
 Harrison, 119 Ala. 539, 24 So. 55. Nebraska — Haurigan v. Chicago & 
 
 Arkansas— St Louis & S. F. R. R. N. W. Ry. Co., 80 Neb. 132, 117 
 
 v. Ogtrander, 66 Ark. 567, 52 S. W. N. W. 100. 
 
 435. Texas — See Southern Pac. Ry. 
 
 Connecticut — Rowland v. New Co. v. Redding (Tex. Civ. App.), 43 
 
 York, N. H. & H. R. R. Co., 61 Conn. S. W. 1061. 
 
 [949] 
 
§ 1051 ] Railroad Rate Regulation 
 
 lower for the future if it finds it unreasonable. And the 
 power given to the Commission by the other process of the 
 Act to award damages in reparation for past exactions is 
 complementary. It is essential to the comprehensiveness of 
 this system that the jurisdiction of the Commission on both 
 lines should be exclusive, and that in the courts the reason- 
 ableness of the rate duly scheduled should be held to be 
 conclusive.'^* 
 
 § 1051. State courts deprived of jurisdiction. 
 
 If, therefore, a shipper is ready to prove that the rate 
 charged him was outrageously high he can no longer, as 
 formerly, litigate the matter in the courts, and show that 
 the established rate is unreasonable. He must go to the 
 Commission to get the scheduled rate set aside, and repara- 
 tion awarded him for the extortion. It follows from all 
 this that in an action in a State court by a carrier to 
 recover demurrage, based on a schedule of demurrage 
 charges duly published and filed with the Commission 
 the court has no jurisdiction to determine the reasonable- 
 ness of the charges, as original jurisdiction with respect 
 thereto is vested in the Commission.^'' Under the provi- 
 
 '8 United States— Te^iaa & P. Ry, 
 V. Abilene Cotton Oil Co., 204 U. S. 
 426, 27 Sup. Ct. 350; Southern Ry. 
 V. Tift, 206 U. S. 428, 27 Sup. Ct 
 709; Robinson v. Baltimore & O 
 R. R., 222 U. S. 506, 32 Sup. Ct. 113; 
 
 & M. R. R., 77 N. H. 77, 90 Atl. 
 863. 
 
 New Jersey — Erie R. R. v. Wan- 
 aque L. Co., 75 N. J. L. 878, 69 Atl. 
 168. 
 
 Oklahoma — Atchison, T. & S. F. 
 
 Am. V. Coal Co. v. Pennsylvania Ry. v. Holmes, 18 Okla. 92, 90 Pac. 
 
 R. R., 159 Fed. 278; Van Patten 22. 
 
 V. Chicago, M. & St. P. Ry., 81 Fed. South Dafcoto— Great No. Ry. v. 
 
 545. Loonan L. Co., 25 S. D. 155, 125 
 
 Georgia — Georgia R. R. v. Creety, N. W. 645. 
 
 5 Ga. App. 424, 63 S. E. 528. Washington— UHy v. Mo. Pac. 
 
 Missouri— Milea v. St. Louis & Ry., 64 Wash. 589, 117 Pac. 401. 
 
 S. F. Ry., 134 Mo. App. 379, 114 West Firj/imo— Robinson v. Balti- 
 
 S. W. 1052. more & R., 64 W. Va. 406, 63 S. E. 
 
 Nebraska — Wentz-Bates Mercan- 323. 
 
 tile Co. V. Union Pacific Ry., 85 Neb. " Erie R. R. Co. v. Wanaque 
 
 584, 123 N. W. 1085. Lumber Co., 75 N. J. L. 878, 69 Atl. 
 
 New Hampshire — Clough v. Boston 168. 
 
 [950] 
 
Quasi-Judicial Functions of the Commission [ § 1052 
 
 sions of the Act no court has any power, in the first in- 
 stance, to inquire into the reasonableness of any rate that 
 has been regularly estabhshed by a railway company and 
 filed with the Commission; for the question of whether or 
 not a rate is reasonable and just is one to be determined, 
 in the first instance, in a proper proceeding before the 
 Commission.*" And consequently the courts have no 
 jurisdiction to enjoin the enforcement of rates after the 
 schedule has been filed and put into effect, since the au- 
 thority to determine the reasonableness of rates is vested 
 by the Act exclusively in the Commission." And the 
 general principle will be insisted upon, whatever may be 
 the way in which the point comes up, that the Commis- 
 sion has exclusive jm-isdiction of all questions concerning 
 the reasonableness of increased rates.*^ 
 
 § 1052. Scheduled rates conclusive in the courts. 
 
 This doctrine in all its scope can only be appreciated 
 by a study of some of the cases recently decided, such as 
 those which have been selected for statement in this con- 
 nection. Since the Commission now has power to suspend 
 the taking effect of rates filed with it, it would seem that 
 even the federal courts have no power to enjoin the filing 
 of a schedule of rates under a bill brought prior to the 
 date of filing of the tariffs, as the Commission has exclu- 
 sive jurisdiction of determining all questions of reasonable- 
 ness with respect to rates.*' Where the pubUshed interstate 
 rate is collected and an action is brought in a State court 
 to recover for the excess exacted above a sum alleged to 
 be a reasonable charge, the only evidence that will justify 
 the action is a prior judgment of the Commission holding 
 the rate complained of to be unreasonable.*'" In an action 
 
 s" Great Northern Ry. v. Loonan ^' Wickwire Steel Co. v. N. Y. C. 
 
 Lumber Co., 25 S. D. 155, 125 N. W. & H. R. R. R., 181 Fed. 316. 
 
 645. 83 Columbus I. & S. Co. v. Kail- 
 
 s' Great Northern Ry. v. Kalispell awha & M. Ry., 171 Fed. 713. 
 
 Lumber Co., 165 Fed. 25. «'" Robinson v. B. & O. R. R. Co., 
 
 64 W. Va. 406. 62 S. E. 323. 
 
 [951] 
 
§ 1053 ] Railroad Rate Regulation 
 
 for unjust discrimination the complaint does not state a 
 cause of action where it neither alleges that the carrier 
 has not complied with the requirements of the Interstate 
 Commerce Act with reference to filing of rates nor alleges 
 that by the rates charged it exceeded the rate shown in 
 the schedule.** In a suit by a carrier to recover the pub- 
 lished interstate rate the defendant cannot set up as a 
 valid plea the unreasonableness of such rate, since original 
 jurisdiction over the question of reasonableness in estab- 
 lishing interstate rates is vested with the Commission.**" 
 
 § 1053. No reparation for misquoted rate. 
 
 The requirements of the Act with respect to the filing 
 of all charges which the Commission may require, remove 
 from the carrier and from the shipper the right which 
 existed under the common law to contract on any basis 
 other than that specifically set forth in the carrier's pub- 
 lished tariffs.**^ In publishing a rate or a schedule of rate 
 the carrier must act under section 1 of the Act, requiring 
 rates to be reasonable and just. If it estabhshes a rate 
 which is excessive, such rate is not regarded in the forum 
 of the Commission as lawful when its reasonableness is 
 subsequently questioned upon complaint filed.*" While it 
 is the legal rate, the rate that must be paid by the shipper 
 and collected by the carrier because it is the published 
 rate, the mere publication by the carrier cannot make a 
 rate lawful that is unreasonable before the body which has 
 power to pass upon it.*^ No rate can be lawful in the 
 sense of being immune from attack with respect to past^ 
 and future shipments if it be excessive or unreasonable in 
 amount.** As will be seen, it is held that the failure to 
 
 *< Lilly V. Northern Pacific Ry., *^ Arkansas Fuel Co. v. C, M. & 
 
 64 Wash. 589, 117 Pac. 401. St. P. Ry., 16 I. C. C. 95. 
 
 '*" Baltimore & O. R. R. v. La " Reno Wholesale Liquor Store 
 
 Due, 128 App. Div. 594, 112 N. Y. v. Southern Pacific Co., 23 I. C. C. 
 
 Supp. 964. 516. 
 
 «» Peale, Peacock & Kerr V. Central «« Newding v. M. K. & T. Ry., 
 
 R. R. Co. of New Jersey, 18 1. C.C. 25. 19 I. C. C. 29. 
 
 [952] 
 
Quasi-Judicial Functions of the Commission [ § 1054 
 
 post a tariff which contains no change in rates, and a mis- 
 leading quotation by the agent of the carrier, afford no 
 basis for reparation.*' It should be noted, however, that the 
 Act provides a penalty against a railroad which deliber- 
 ately misquotes a rate which the shipper formally asks in 
 writing.^" 
 
 § 1054. Liability for negligence in quoting rates. 
 
 Although in general the application of these principles is 
 well settled, there are still some difficult situations to deal 
 with. In one recent case a carrier quoted a rate to a ship- 
 per which by error was less than that published; and the 
 shipper in reliance thereon later made a contract for sales 
 on that basis. Later the carrier notified the shipper that 
 a mistake had been made and quoted a new rate, which 
 by a second mistake was higher than the published rate. 
 The shipper called off his negotiations and refused to 
 ship, although as he testified he would have shipped at 
 the correct rate; and in his suit subsequently for lost 
 profits it was held by the State court recently that he 
 might recover."^ It is, as has been seen, clear that if 
 negUgence results in the quotation of a rate lower than 
 that published, it is impossible to save to the shipper his 
 usual remedy, since it would enable him to get service at 
 a discriminatory rate, thus militating against the integ- 
 rity of the Act.'^ But in a case like this if no liabihty 
 was incurred a higher rate might be continually quoted 
 to shippers in disfavor, thereby putting them at a dis- 
 advantage. A question might arise as to the jurisdiction 
 of the State coiirt, particularly if it be held that the 
 remedy of a prospective shipper did not exist at conxmon 
 law, but arises by virtue of the Act.^' And it has been 
 
 *» Faribault Furniture Co. v. C. G. '^ Poor Grain & P. Co. v. C, B. & 
 
 W. R. R., 25 I. C. C. 40. Q. Ry., 12 I. C. C. 418. 
 
 » O'Brien & Co. v. N. P., Unrep. " Galveston H. & T. C. Ry. v. 
 
 No. 227. Wallace, 223 U. S. 481, .32 Sup. Ct. 
 
 aiAldrich v. So. Ry. (So. Car.), 205. 
 79 S. E. 316. 
 
 [953] 
 
§ 1055 ] Railroad Rate Regulation 
 
 held recently ®* that a shipper may sue for the carrier's 
 failure to post and keep open for inspection its established 
 rates, whereby the shipper is compelled to pay a higher 
 rate than that in effect over a competing line, and in such 
 a suit recover the difference between the rate paid and 
 competitive rate. But this is in the face of the fact that 
 the shipper would thereby be charged less than the charge 
 pubhshed for all, which it is the poHcy of the ruhng cases 
 to make impossible in general at whatever cost to in- 
 dividuals. It is submitted, therefore, that it will be the 
 safe course to make no such concessions as these two 
 cases discussed in this paragraph were tempted to permit 
 but. to hold to the doctrine of the inevitable incidence of the 
 scheduled rate, subject to the special penalty of the statute 
 for failing to quote correctly a rate formally asked in writing. 
 
 § 1055. Limitations of this policy. 
 
 The principal line of distinction is, therefore, clear enough. 
 If the basis of the suit is in any way an attack upon the 
 propriety of anything in the schedule the jurisdiction of 
 the Commission is exclusive. Thus, as has been seen, that 
 such rates so scheduled are reasonable cannot be ques- 
 tioned in any proceeding before the courts, as jurisdiction 
 to reduce or realign them for the future, and to give 
 damages and reparation for past exactions, has been ex- 
 clusively vested in the Commission. But the courts are 
 not otherwise ousted from the jurisdiction they formerly 
 possessed for overcharge and undercharge as to suits be- 
 tween shippers and carriers. Thus if a shipper has been 
 compelled to pay more than the scheduled rate he may 
 sue in the courts for recovery of the overcharge.^^ And 
 likewise the carrier, if by mistake the shipper has paid 
 less than the schedule calls for, not only may but should 
 resort to the courts to recover the balance.'* It is, there- 
 
 '^ St. Louis S. W. Ry. v. Lewallan « Oregon Ry. & N. Co. v. Cool- 
 
 Bros., 192 Fed. 540. ridge, 58 Oreg. 95, 116 Pac. 93; but 
 
 »5 Hardaway v. Southern Ry., see Baldwin Land Co. v. Columbia 
 
 (S. C), 73 S. E. 1020. R. Ry., 58 Oreg. 285, 114 Pac. 469. 
 
 [954] 
 
Quasi-Judicial Functions of the Commission [ § 1056 
 
 fore, well established that, while in transportation under 
 the Act the reasonableness of rates is to be determined 
 only by the Commission, one who has been made to pay 
 more than the published rates may bring suit in State 
 courts for its recovery, on the basis of the immemorial ac- 
 tion at common law against a carrier for the recovery of 
 the excess when more than a proper charge has been ex- 
 acted.'' Whatever courts would as between shipper and 
 carrier normally entertain such suits may proceed to the 
 extent indicated in this paragraph; and it should be noted 
 that apparently the two-year limitation in the Act for 
 reparation suits would not apply ii; the forum of the 
 courts of the State.^' 
 
 Topic D. Finding of the Commission 
 
 § 1056. Power to grant reparation. 
 
 The Act now confers authority upon the Commission 
 to award damages in cases brought before it.^" Under 
 this provision, reparation will be ordered equal to the 
 amount of any overcharge which the Commission finds 
 to have been made.^ Under the Act as first passed the 
 Commission had held that it had no power to consider a 
 claim for damages.' While the Commission found as a 
 fact that the charges of defendant were in some instances 
 unreasonable, it at first made no attempt to formulate 
 
 " Brantly Co. v. Ocean S. S. Co., Roth v. Texas & P. Ry., 9 I. C. C. 
 
 5 Ga. App. 844, 63 S. E. 1129. Rep. 602; Gardner v. Southern R. R., 
 
 »» Chicago, R. I. & P. Ry. v. Lena 10 1. C. C. Rep. 342; Pitts v. Atchison, 
 
 Lumber Co., 99 Ark. 105, 137 S. W. T. & S. F. R. R., 10 1. C. C. Rep. 
 
 562; see also Kansas City So. Ry. v. 691; Pitts v. St. Louis & S. F. R. R., 
 
 Tonn, 102 Ark. 20, 143 S. W. 577. 10 I. C. C. Rep. 684; Hope Cotton 
 
 =' Cattle Raisers' Ass'n v. Chicago, Oil Co. v. Texas & P. Ry., 10 I. C. C. 
 
 B. & Q. R. R., 10 I. C. C. Rep. 83. Rep. 696. 
 
 1 Macloon v. Chicago & N. W. ^ Heck v. East Tennessee, V. & 
 
 Ry., 3 Int. Com. Rep. 711, 5 I. C. C. G. R. R., 1 Int. Com. Rep. 775, 
 
 4; Rea v. Mobile & O. Ry., 7 I. C. C. 1 I. C. C. 495; Council v. Western 
 
 Rep. 55; Grain Shippers' Ass'n v. & A. R. R., 1 Int. Com. Rep. 638, 
 
 lUinois C. R. R., 8 I. C. C. Rep. 158; 1 I. C. C. 339; Riddle v. New York, 
 
 Chicago P. P. C. Co. v. Chicago & L. E. & W. R. R., 1 Int. Com. Rep. 
 
 N. W. Ry., 8 I. C. C. Rep. 316; 787, 1 I. C. C. 594. 
 
 [955] 
 
§ 1057 ] Railroad Rate Regulation 
 
 orders.* Reparation will now also be awarded for damages 
 caused by other violations of the Act besides overcharge: 
 for instance, for failure to furnish cars.* The effect of an 
 advance in through rates cannot be determined in a pro- 
 ceeding in the same suit for reparation, as regards terri- 
 tory to which the reduction in the through rate did not 
 apply, but is a matter for independent inquiry in a new 
 proceeding.^ 
 
 § 1067. Bases of award by reparation. 
 
 The Commission has jurisdiction without regard to the 
 amount in controversy, to award damages whenever they 
 arise under the Act', excepting in those cases where the 
 Act itself names another forum.* Overcharge beyond the 
 scheduled rate may be refunded by the carrier without 
 going to Commission; but reparation for scheduling too 
 high a rate can only be worked out by going to the Com- 
 mission.^ And it is to be noted that reparation is awarded 
 only on the basis of finding that the rate is excessive.^ 
 The Commission cannot award reparation merely on the 
 admission of defendant that complainant is party entitled 
 to it; it must be affirmatively shown that complainant is 
 proper party to obtain reparation.' The Commission it 
 seems is not authorized by the law to deny reparation in 
 a case where it has found that the rates charged com- 
 plainant were unreasonable or unjustly discriminatory, i" 
 Because a rate is found unreasonable it cannot be as- 
 sumed the Commission will, as a matter of course, award 
 reparation upon the basis of the rate found to be reason- 
 
 ^ Barrow v. Yazoo & M. V. R. R., ' Tyson & I. Buggy Co. v. A. & A. 
 
 10 I. C. C. Rep. 333. Ry., 17 I. C. C. 330. 
 
 ■■ Gkde Coal Co. v. Baltimore & ' Pabst Brewing Co. v. Chicago, 
 
 O. R. R., 10 I. C. C. Rep. 226; M. & St. P. Ry., 17 I. C. C. 
 
 Paxton Tie Co. v. Detroit S. R. R., 359. 
 
 10 I. C. C. Rep. 422. ' BakerMfg.Co.v.C.&N.W. Ry., 
 
 5 Cattle Raisers' Ass'n v. Chicago, 21 1. C. C. R. 605. 
 
 B. & Q. R. R., 10 I. C. C. Rep. 83. »» Mfrs. & Merchants' Ass'n v. 
 
 « Washer Grain Co. v. M. P. Ry., A. & A. R. R. Co., 28 I. C. C. 
 
 15 I. C. C. 147. 116. 
 
 [956] 
 
Quasi-Judicial Functions of the Commission [ § 1058 
 
 able." However this may be, at all events no order will 
 be entered for reparation because a refund erroneously 
 made was in excess of amount of reparation upon basis of 
 a rate found to be reasonable." As against the carriers 
 found in fault, reparation is divided in proportion of the 
 divisions of the rate." 
 
 § 1058. Extent of the jurisdiction. 
 
 The Comcmission is authorized to award damages only 
 when there has been a violation of the Act." The Com- 
 mission has no power to direct the payment of a damage 
 claim, since a failure to pay is not a violation of the Act.^'' 
 Still less has the Commission power to order prompt pay- 
 ment.'^ The Commission has no authority to assess costs 
 or to allow attorney's fees." And the Commission has no 
 jurisdiction to award damages for icing charges resulting 
 from carrier's delay. ^* The Commission has no authority 
 to award damages for negligence not constituting a breach 
 of the Act." And, as has been seen, loss sustained through 
 misquotation of rate is no proper ground for damages.^" 
 A change in rates on short notice, under authority of 
 Commission, affords no basis for reparation." A failure 
 of defendants to provide in their tariffs for the payment 
 of redemption money on account of lost commutation 
 tickets was held not unreasonable or otherwise in viola- 
 tion of the Act.^^ That a shipper in some instances in the 
 
 " National Wool Grower's Ass'n " Washer Grain Co. v. M. P. Ry., 
 
 V. O. S. L. R. R., 25 I. C. C. 675. 15 I. C. C. 147. 
 
 12 W. E. CaldweU Co. v. C. I. & '' Flatten Produce Co. v. K. L. S. 
 
 L. Ry., 20 I. C. C. R. 412. & C. Ry., 20 I. C. C. 543. 
 
 " National Mfg. Co. v. Chicago '» Buffalo Hardwood Lumber Co. 
 
 G. W. Ry., 18 I. C. C. 370. v. B. & O. S. W. R. R. Co., 21 1. C. C. 
 
 1^ Wisconsin Lime & Cement Co. 536. 
 
 V. C, C, C. & St. L. Ry., 25 I. C. C. '" Alabama Lumber & Export Co. 
 
 366. V. P. B. & W. R. R., 19 I. C. C. 295. 
 
 1' Larkin Co. v. E. & W. T. Co., ^^ Wisconsin Lime & Cement Co. 
 
 24 L C. C. 645. v. C, C, C. & St. L. Ry., 25 L C. C. 
 
 " Ponchatoula Farmers' Ass'n v. 366. 
 
 L C. R. R., 19 L C. C. 513. " Hill v. P. R. R., 25 I. C. C. 650. 
 
 [957] 
 
§ 1059 ] Railroad Rate Regxilation 
 
 past has paid less than a reasonable charge is no reason 
 why he should not be awarded reparation in instances 
 where unreasonable charges have been exacted from hun.^^ 
 In awarding reparation on the ground that an unreason- 
 able rate was charged for the transportation of property 
 for the Federal Government no account can be taken by 
 the Conunission of proper land-grant deductions, which 
 may be determined between the parties as provided by 
 ■ law. 2* 
 
 § 1059. Damages to business generally. 
 
 It is not sufficient to sustain a claim for reparation to 
 allege a general injury to business.^'' A finding of general 
 damages by the Commission would be mere opinion, not 
 conclusive upon courts, to which, in any event, resort must 
 be had for decision of such a question. ^^ The Commission 
 feels that it has no jurisdiction to award damages for 
 decline in market price of a commodity or for commis- 
 sions for its sale.^' No damages will, therefore, be allowed 
 for loss of tenants and depreciation.^' Damages due to 
 inability to compete in common markets cannot become 
 subject of reparation.^' Loss of contracts and sales, result- 
 ing from car-distribution discrimination, are not, it seems, 
 for the Conunission to assess.^" And the Commission is 
 clear that exemplary damages are not within its province 
 to grant.^^ Damages will be denied a carrier not found 
 to have unduly discriminated against complainant in 
 distribution of cars.^^ And likewise, damages will be 
 
 ^ Crutchfield & Woolfolk v. S. P. ^ Mattison v. Pennsylvania R. R., 
 
 Co., 24 I. C. C. 651. 23 I. C. C. 233. 
 
 " United States v. S. P. Co., 25 ™ Sondheimer Co. v. I. C. R. R., 
 
 1. C. C. 255. 20 I. C. C. 606. 
 
 2'Rogers&Co. V. P.&R. Ry., 112 »Jacoby & Co. v. P. R. R., 19 
 
 I. C. C. 308. I. C. C. 392. 
 
 'is Hillsdale Coal & Coke Co. v. " Eichenberg v. S. P. Co., 28 
 
 P. R. R., 19 I. C. C. 53. I. C. C. 584. 
 
 2' Hanley Milling Co. v. P. Co., ^- National Coal Co. v. B. & O. R. 
 
 19 I. C. C. 475. R., 28 I. C. C. 442. 
 
 [958] 
 
Quasi-Judicial Functions of the Commission [ § 1061 
 
 denied on a complaint where there is no measure of 
 damage.'' 
 
 § 1060. Nature of the order. 
 
 An order of the Commission for payment is not judg- 
 ment, nor does any lien result therefrom.'^ Indeed, an 
 award of reparation is not enforceable as such; it is only 
 enforceable as the basis for court decree.'^ No order will 
 be entered pending the compliance of the carrier with 
 views of Commission oftentimes.'" And sometimes rates 
 will be exposed to analysis and criticism of the respondents 
 before the issuance of a final order." A practice which is 
 bad only because discriminatory can always be remedied 
 by withdrawing the benefit from the favored party or by 
 extending it to the injured parties.'^ An order to cease 
 and desist from an unjust discrimination operates in the 
 alternative; therefore the relation of rates may be pre- 
 scribed but no definite rate fixed. '^ Where the rates to 
 one point are unduly low no valid objection can be found 
 to the removal of the discrimination by an increase of such 
 rates. ^^ But it is within power of Commission to end a 
 discrimination as between points of origin by a reduction 
 in the rate from a certain point that is discriminated 
 against.*^ 
 
 § 1061. How far party may reopen case. 
 
 It is generally true that the findings of the Commission 
 will not conclude the unsuccessful party for all time. 
 Conditions of transportation vary from time to time, and 
 
 " Becker v. P. M. R. R., 28 1. C. C. »' New York C. & H. R. R. R. v. 
 
 645. Interstate Commerce Commission, 
 
 " Washer Grain Co. v. Missouri 168 Fed. 131. 
 
 Pacific, 15 I. C. C. 147. " Freeman Lumber Co. v. St. 
 
 'sAnadarko Cotton Oil Co. v. L., I. M. & S. Ry., 19 I. C. C. 
 
 A., T. & S. F. Ry., 20 I. C. C. 43. 348. 
 
 '= In re Investigation of Advances *" In re Advances of Lumber, 28 
 
 in Rates on Grain, 21 I. C. C. 22. I. C. C. 686. 
 
 " In ic Express Rates, 28 I. C. C. " Scott Paper Co. v. P. R. R., 26 
 
 132. I. C. C. 601. 
 
 [959 I 
 
§ 1061 ] Railroad Rate Regulation 
 
 rates should ordinarily be adjusted to such changed con- 
 ditions, and it is possible, therefore, that the petitioners 
 may be able to show that a change has taken place so 
 that the contention which was formerly unsuccessful may 
 now be reasonable and just.^^ It is not to be understood, 
 however, that the findings have no binding effect what- 
 ever. If a matter has once been investigated by the Com- 
 mission and a finding made, the same question will not 
 afterwards be differently decided unless new evidence is 
 presented, even though it arises upon the complaint of 
 other parties. ^^ Questions coming before this body are 
 not of a character that the decision in one case is neces- 
 sarily controlling in all similar cases. Its decisions can 
 hardly be said to have the effect of an estoppel, nor is 
 there the same reason for applying the maxim stare decisis 
 which exists in courts of law. In the absence of some 
 showing that new conditions have intervened, or that the 
 effects of the original holding have been other than were 
 anticipated, we think that that case must control the dis- 
 position of this.^* And upon the precise point litigated 
 and decided the finding may be a complete bar to further 
 proceedings before the Commission. The defendant, if 
 the finding is against him, may disregard it, and the ques- 
 tion must then be taken to the courts, where the finding 
 is not binding. If the finding is against the complainant 
 it is final; and in any case if the complainant has his op- 
 tion of suit or complaint to the Commission, his appeal 
 to the Commission bars him from suit. So the final judg- 
 ment in a suit or proceeding before the Interstate Com- 
 merce Commission, unreversed and remaining of record 
 in full force and effect, is a bar to an action in the United 
 States Circuit Court brought to recover damages from 
 
 ■"2 Rice V. Western N. Y. & P. R. R., *' Railroad Commissioners v. A., 
 
 2 Int. Com. Rep. 496, 3 I. C. C. 87; T. & S. F. Ry., 8 I. C. C. Rep. 304. 
 
 Interstate Commerce Com. v. Louis- " Kauffman Milling Co. v. Mo. 
 
 ville & N. R. R., 73 Fed. 410, 5 Int. Pac. Ry., 4 I. C. C. 417, 3 Int. Com. 
 
 Com. Rep. 656. Rep. 400. 
 
 [960] 
 
Quasi-Judicial Functions of the Commission [ § 1062 
 
 the same violation of the Act to Regulate Com- 
 merce. ^^ 
 
 § 1062. Finding of Commission does not work an es- 
 toppel. 
 
 The proceedings before the Commission not being 
 strictly judicial, the doctrine of estoppel by judgment can- 
 not properly be applied to the findings of the Commis- 
 sion.'"* The doctrine of estoppel of record does not seem 
 applicable to the case under ^consideration. It is applied 
 to the record and judgment of both general and inferior 
 courts. The Commission is not a court. It is a special 
 tribunal whose duties though largely administrative are 
 sometimes semi or quasi-judicial. It is required to inves- 
 tigate and report. The law creating the Commission does 
 not mention its final act as a judgment. It renders no 
 judgment, enters no decree. From these considerations it 
 is not believed that the rule of estoppel by record, at all 
 times technical in character, can be invoked by the de- 
 fendants.*^ The whole scope and spirit of the Act seems 
 to stamp order of the Commission as in no sense final in 
 the sense that the judgment of a coxirt is final, except 
 where the parties impressed by the wisdom and justice of 
 the order acquiesce therein in cases like those here under 
 consideration.*^ Even if the doctrine of estoppel by rec- 
 ord can ever be applied to the findings of the Commission, 
 it can only be done when the parties are the same. One 
 who appeared before the Commission in a representative 
 capacity as a member of a committee of a complaining 
 mercantile society, in proceedings which were dismissed, is 
 not thereby estopped in a similar case brought by him 
 as an individual.*' 
 
 « Riddle v. New York, L. E. & year, 76 U. S. 9 WaU. 788, 19 L. ed. 
 W. R. R., 3 Int. Com. Rep. 230. 566. 
 
 « 3 Int. Com. Rep. 830, 5 I. C. C. ■« 94 U. S. 673, 24 L. ed. 168. 
 
 166. ''' Toledo Produce Exoh. v. Lake 
 
 " Providence Rubber Co. v. Good- Shore & M. S. R. R., 3 Int. Com. 
 
 Rep. 830, 5 I. C. C. 166. 
 
 61 [ 961 ] 
 
§§ 1063, 1064 ] Railroad Rate Regulation 
 
 § 1063. The two-year rule. 
 
 Orders of the Commission, by a provision in the Act, 
 may continue in force for a period not exceeding two 
 years. ^^ But conversely orders with respect to rates are 
 not conclusive beyond the period of two years.^^ More- 
 over, Congress left the door open to the Commission to 
 suspend or modify or set aside any of its orders at any 
 time within the two years. ^^ But under the Act an order 
 of the Commission shall remain in force for two years 
 unless a different time is designated.^' A contention that 
 if the Commission concludes a rate to be unreasonable 
 it thereby automatically awards reparation covering the 
 statutory period of two years prior to date of complaint, 
 not sustained.^* Two years from date the carrier may 
 voluntarily put the old rate in force. ^' As a practical 
 matter the advantage of submitting to a settlement in in- 
 formal proceedings may be noted, as according to what is 
 understood to be the current practice of the Commission, 
 the order is made for one year, whereas in formal pro- 
 ceedings it will almost invariably run for two years. 
 
 § 1064. New petition may be filed. 
 
 When new conditions have arisen since the original in- 
 vestigation and report of the Commission neither the par- 
 ties, as has been seen, nor others, are bound by the former 
 finding. It follows that the new conditions need not be 
 presented in a petition for a rehearing; a new petition may 
 be filed, and this would seem to be the better course. This 
 is clearly true where the parties to the new application 
 were not parties to the former complaint; the new parties 
 should file a new complaint, and if upon this new complaint 
 it should appear that any conclusion in the former case 
 
 '0 Douglas & Co. V. C, R. I. & P. '' N. Y. C. & H. R. R. v. Int. Com. 
 
 Ry., 21 I. C. C. 97. Com., 168 Fed. 131. 
 
 "National Hay Ass'n v. M. C. "New Pittsburg Coal Co. v. 
 
 R. R., 19 I. C. C. 34. H. V. Ry., 26 I. C. C. 121. 
 
 '2 National Hay Ass'n v. M. C. '^ Thely Grain Co. v. F. S. & W. R. 
 
 R. R., 19 I. C. C. 34. R., 16 I. C. C. 28. 
 
 [962] 
 
Quasi-Judicial Functions of the Commission [ § 1065 
 
 so decided has been erroneous, the Commission would feel 
 it to be a duty to correct such conclusion. ^^ When a ques- 
 tion of general pubhc interest is involved, the Conunission, 
 in its own discretion and in furtherance of justice, may- 
 open a case to give parties the benefit of a more extended 
 investigation of the same subject-matter; and this was 
 done in a case where other parties in the same business 
 had filed similar petitions, and the question was to be 
 thoroughly reconsidered in connection with these other 
 petitions. ^'^ A petition or motion for rehearing cannot be 
 granted on mere allegation of error in the findings of fact; 
 and such a petition or motion must be supported by proof 
 of new facts or by specifically pointing out facts already 
 in evidence showing -prima facie at least that there was 
 such error.''* It is clear that any order the Commission 
 may make must be at all times subject to modification by 
 it.^^ The Commission has now complete power to suspend 
 or modify its orders.'" It should be noted that, so far as 
 the question of power is concerned, that has been given 
 to the Commission in the clearest possible manner in the 
 Act as amended. 
 
 § 1065. Reopening a case for rehearing. 
 
 An application to the Commission to reopen a case for 
 rehearing is addressed to its discretion, like a similar ap- 
 plication to a court; and will be decided upon the same 
 considerations. A petition to reopen a case that has been 
 decided, and for a rehearing, should show -prima fade that 
 some material testimony has been overlooked or misap- 
 prehended, or some error in the findings of fact or conclu- 
 sions of law." So a case before the Commission will not 
 
 56 Re Petition of Toledo Produce D. R. Ry., 3 Int. Com. Rep. 374, 
 
 Exchange, 2 Int. Com. Rep. 412, 4 I. C. C. 87. 
 
 2 I. C. C. 588. *' City of Spokane v. N. P. Ry., 
 
 " Rice V. Western N. Y. & P. R. R., 21 I. C. C. R. 400. 
 
 2 Int. Com. Rep. 496, 3 I. C. C. «» Loftus v. PullmanCo., 19i: C.C. 
 
 87. . 102. 
 
 *« Proctor V. Cincinnati, H. & " Myers v. Pennsylvania Co., 2 
 
 Int. Com. Rep. 544. 
 
 [963] 
 
§ 1065 ] Railroad Rate Regulation 
 
 be reopened in a supplementary proceeding brought simply 
 to secure reparation, for the purpose of ruling on questions 
 not decided in the original case, where the petition for 
 reparation was not filed until long after the original deci- 
 sion had been rendered and the offending carrier had com- 
 plied therewith.^^ And after a complaint upon elaborate 
 pleadings and proofs has been heard and determined by 
 the Commission, an application for a rehearing, made only 
 by those who were not parties to the proceeding, will not 
 be granted.*^ The Commission, however, will grant a re- 
 hearing if it is in the interests of justice. This may be 
 the case, even though the finding of the Comimission has 
 been reviewed by the courts. In the one case ^* it ap- 
 peared that the Circuit Court had refused to enforce the 
 original order of the Commission, the Commission re- 
 opened the case, granted a rehearing, and modified its 
 order, and renewed the order with this modification. If 
 upon a rehearing of a case before the Commission, addi- 
 tional evidence warrants a finding contrary to what ap- 
 peared and was found in the original hearing, the former 
 order may be vacated."' The general principle upon 
 which petitions for rehearing would be dealt with was 
 stated by the Commission in the first case of the sort,^" 
 to be that when it had patiently and laboriously sifted out 
 all the material facts necessary to fairly and justly present 
 the merits of the controversy, with its conclusions thereon, 
 the Commission had done all that the statute authorizes 
 or requires it to do. 
 
 82 Rice V. Western N. Y. & P. R. R., «* Page v. Delaware, L. & W. Ry., 
 
 6 I. C. C. Rep. 455. 6 I. C. C. Rep. 548. 
 
 8' Re Petition of Toledo Produce *' Bates v. Pennsylvania R. R., 
 
 Exchange, 2 Int. Com. Rep. 412, 3 Int. Com. Rep. 296, 4 I. C. C. 281. 
 2 I. C. C. 588. «« Riddle v. Pittsburg & L. E. R. R., 
 
 1 Int. Com. Rep. 773, 1 I. C. C. 490. 
 
 [964] 
 
CHAPTER XXIII 
 
 PROCEDURE BEFORE THE COMMISSION 
 
 § 1070. Provisions of the Act. 
 1071. Conduct of the proceedings. 
 
 Topic A. Proceedings before the Commission 
 
 § 1072. Procedure in regular course. 
 
 1073. Scope of the proceedings enlarged. 
 
 1074. Course of the pleadings. 
 
 1075. Raising the question of jurisdiction. 
 
 1076. Individual rate during general inquiiy. 
 
 1077. Statement of the wrong. 
 
 1078. Sufficiency of the complaint. 
 
 1079. Answers in defense. 
 
 1080. Amendment to complaint. 
 
 1081. Responsiveness to pleadings. 
 
 1082. Application for rehef . 
 
 1083. Informal complaint. 
 
 1084. Complainant not coming with clean hands. 
 
 1085. Scope of the doctrine. 
 
 Topic B. Parties to the Proceedings 
 
 ') 1086. Person interested as complainant. 
 
 1087. Requisites in this regard. 
 
 1088. Complaint by an association. 
 
 1089. Board of Trade. 
 
 1090. State Railroad Commission. 
 
 1091. Intervening parties. 
 
 1092. Proper parties defendant. 
 
 1093. Necessary parties defendant. 
 
 1094. Who are parties in interest. 
 
 1095. Defendants must have an interest. 
 
 1096. One of several joint parties. 
 
 1097. Liabihties in through can-iage. 
 
 1098. Who entitled to reparation. 
 
 1099. As between consignor and consignee. 
 
 Topic C. Order of Procedure 
 
 1100. Default for failure to proceed. 
 
 1101. Dismissal of the complaint. 
 
 [965] 
 
§ 1070 ] Railroad Rate Regulation 
 
 § 1102. Stay of proceedings. 
 
 1103. Satisfaction of complaint. 
 
 1104. Conditions of granting reparation. 
 
 1105. Scrutiny of reparation agreements. 
 
 1106. Parties given opportunity to be heard. 
 
 1107. Hearing duly notified indispensable. 
 
 1108. Requisites as to hearings. 
 
 1109. Course of the proceedings. 
 
 1110. Limitation of actions. 
 
 1111. Dismissal when order unnecessary. 
 
 Tojnc D. Evidence and Burden of Proof 
 
 § 1112. Rules of evidence. 
 
 1113. Res adjudicata. 
 
 1114. Insufficient grounds for findings. 
 
 1115. Proof of damage required. 
 
 1116. Presumptions from voluntary continuance. 
 
 1117. Admissions by making changes. 
 
 1118. Privilege against self-crimination. 
 
 1119. Adverse interest of witnesses not to be considered. 
 
 1120. Testimony on both sides should be introduced. 
 
 1121. Production of books and papers. 
 
 1122. Burden of establishing case. 
 
 1123. Burden of justifying advances. 
 
 § 1070. Provisions of the Act. 
 
 By section 13 which names the parties who may have 
 recourse to the Commission it is provided that any person, 
 firm, corporation, company, or association, or any mer- 
 cantile, agricultural, or manufacturing society or other 
 organization, or any body politic or municipal organiza- 
 tion, or any common carrier, complaining of anything done 
 or omitted to be done by any common carrier subject to 
 the provisions of this Act, in contravention of the provi- 
 sions thereof, may apply to said Commission by petition, 
 which shall briefly state the facts. Thereupon a statement 
 of the complaint thus made shall be forwarded by the 
 Commission to such common carrier, who shall be called 
 upon to satisfy the complaint, or to answer the same in 
 writing, within a reasonable time, to be specified by the 
 Commission. If such common carrier within the time 
 specified shall make reparation for the injury alleged to 
 [966] 
 
Procedure Before the Commission [ § 1071 
 
 have been done, the common carrier shall be relieved of 
 liability to the complainant only for the particular viola- 
 tion of law thus complained of. If such carrier or carriers 
 shall not satisfy the complaint within the time specified, 
 or there shall appear to be any reasonable ground for in- 
 vestigating said complaint, it shall be the duty of the 
 Commission to investigate the matters complained of in 
 such manner and by such means as it shall deem proper. 
 The Commission shall, in like manner and with the same 
 authority and powers, investigate any complaint forwarded 
 by the railroad commissioner or railroad commission of 
 any State or Territory at the request of such commissioner 
 or commission, and the Commission shall have full au- 
 thority and power at any time to institute an inquiry, on 
 its own motion, in any case and as to any matter or thing 
 concerning which a complaint is authorized to be made, 
 to or before said Commission by any provision of the 
 Act, or concerning which any question may arise under 
 any of the provisions of the Act, or relating to the enforce- 
 ment of any of the provisions of this Act. The Commis- 
 sion shall have the same powers and authority to proceed 
 with any inquiry instituted on its own motion as though 
 it had been appealed to by complaint or petition under 
 any of the provisions of this Act, including the power to 
 make and enforce any order or orders in the case, or relat- 
 ing to the matter or thing concerning which the inquiry is 
 had excepting orders for the payment of money. And by 
 explicit provision no complaint shall at any time be dis- 
 missed because of the absence of direct damage to the com- 
 plainant. 
 
 § 1071. Conduct of the proceedings. 
 
 In regard to procedure before the Commission it is pro- 
 vided that the Commission may conduct its proceedings 
 in such manner as will best conduce to the proper dis- 
 patch of business and to the ends of justice. The Commis- 
 sion may, from time to time, make or amend such general 
 
 [967] 
 
§ 1072 ] Railroad Rate Regulation 
 
 rules or orders as may be requisite for the order and regu- 
 lation of proceedings before it, including forms of notices 
 and the service thereof, which shall conform, as nearly as 
 may be, to those in use in the courts of the United States. 
 Any party may appear before said Commission and be 
 heard, in person or by attorney, and the Commission lAay 
 employ such attorneys as it finds necessary for proper legal 
 aid and service of the Commission or its members in the 
 conduct of their work or for proper representation of the 
 public interests in investigations made by it or cases or 
 proceedings pending before it, whether at the Commission's 
 own instance or upon complaint. Every vote and official 
 act of the Commission shall be entered of record, and its 
 proceedings shall be public upon the request of either party 
 interested. A majority of the Commission shall constitute 
 a quorum and either of the members of the Commission 
 may administer oaths and affirmations and sign subpoenas. 
 The copies of schedules and classifications and tariffs of 
 rates, fares, and charges, and of all contracts, agreements, 
 and arrangements between common carriers filed with the 
 Commission as herein provided, and the statistics, tables, 
 and figiu-es contained in the annual or other reports of 
 carriers made to the Commission as required under the 
 provisions of this Act shall be preserved as public records 
 in the custody of the secretary of the Commission, and 
 shall be received as prima Jade evidence of what they 
 purport to be for the purpose of investigations by the 
 Commission and in all judicial proceedings. In this con- 
 nection it should be noted, that the current Rules of Prac- 
 tice governing proceedings before the Commission are 
 printed in the Appendix to this volume. 
 
 Topic A. Proceedings Before the Commission 
 
 § 1072. Procedure in regular course. 
 
 The practice and procedure of the Commission has from 
 the first been made as simple as possible, consistent with 
 justice. It desires that without dilatory motions, pleas in 
 [968] 
 
Procedure Before the Commission [ § 1078 
 
 abatement or other interlocutory proceedings, the matter in 
 question may be brought to an issue at the earhest practicable 
 day when a final hearing may be had forthwith, and all proper 
 questions will then be entertained, whether jurisdictional or 
 going to the merits of the controversy. The Commission will 
 decline to take up any motion, the object of which is to reach 
 the merits of the case and have them discussed and passed 
 upon summarily, instead of at the customary hearing.^'^ In 
 accordance with this view, the Commission desires counsel 
 to simplify the issues so far as possible by agreeing upon 
 facts involved. The first chairman. Judge Cooley, wrote 
 in a letter in connection with a petition of the Boards of 
 Trade Union of Minnesota,** that "the major portion of the 
 facts are not in dispute at all, and as to all such facts we 
 are compelled to insist that counsel shall stipulate them 
 in advance. In such a case as this, the facts must be 
 largely matters of public notoriety, and it would be alto- 
 gether wrong to calculate upon taking up time to prove 
 theni by oral evidence. An agreement upon them should 
 be all ready before we take up the case. Of course it 
 would not be expected parties should agree upon the con- 
 sequences flowing from the facts, but even as to these it is 
 not generally necessary to go into proof as in a suit at law, 
 for the Commission will apply its own judgment where 
 all that is requisite is an application of ordinary common 
 sense, and will not require or expect that evidence be ad- 
 duced to show that usual results have followed." 
 
 § 1073. Scope of the proceedings enlarged. 
 
 It is recognized also by the courts that, unless the re- 
 quirement of the Constitution that there shall be in. any 
 action of any department of the government due process 
 of law is substantially denied, an administrative body is 
 not to be held to the rigorous limitations of a judicial 
 
 " Associated Wholesale Grocers v. ^^ 1 Int. Com. Rep. 446. 
 
 Missouri Pac. R. R., 1 Int. Com. Rep. 
 321, 1 I. C. C. 156. 
 
 [969] 
 
§ 1074 ] , Railroad Rate Regulation 
 
 tribunal. The case of Cinciimati, Hamilton & Dayton 
 Railroad v. Interstate Commerce Commission *^ is the 
 leading case to the effect that the Commission is not con- 
 fined to taking action responsive to the pleadings with 
 which the proceedings were originally begun. It was held 
 in that case that the Commission, in making an investiga- 
 tion on complaint of a shipper, has in the public interest 
 the power, disembarrassed by any supposed admissions 
 contained in the statement of the complaint, to consider 
 the whole subject and the operation of the new classifica- 
 tion complained of in the entire territory. If the Commis- 
 sion finds a new classification of rates engenders discrim- 
 ination it has power on its own motion to prohibit the 
 further enforcement of the same. The explanation of all 
 this, as has been seen in another coimection, is that the 
 Commission has combined in its constitution two func- 
 tions; as administrative body it may institute proceedings, 
 but it passes upon the matters thus brought before it 
 quasi-judicially.^" It should be noted, however, that 
 within the range of its discretion in determining the rea- 
 sonableness of rates it is entitled to select the testimony 
 which it will rely upon according as it addresses itself to 
 the discriminating judgment of the Cormnission, as was 
 pointed out in Louisville & Nashville Railroad v. Inter- 
 state Conaimerce Commission.''^ 
 
 § 1074. Coxxrse of the pleadings. 
 
 The Commission should exhaust its activities in develop- 
 ing pertinent facts necessary to full investigation and hear- 
 ing of complaints. Even if complainant asks only repara- 
 tion the Commission in deference to rights of pubHc may 
 take up the existing rate." Where full hearing has been 
 had the Commission in its discretion may if it feels nec- 
 
 8= 206 U. S. 142, 27 Sup. Ct. 648. " 195 Fed. 541. 
 
 ™ Quammen & Austad Lumber '* Acme Cement Plaster Co. v. 
 
 Co. V. C, M. & St. P. Ry., 19 I. C. C. Union Pacific R. R., Unrep. Op. 
 
 110. 41. 
 
 [970] 
 
Procedure Before the Commission [ § 1075 
 
 essary establish rates to points not in the original com- 
 plaint." The filing by defendant carriers of an application 
 for relief from the operation of section 4 does not preclude 
 a determination by the Commission of a complaint under 
 section 3/^ However, the normal course under the ad- 
 vance in rates suspension clause would be that, while the 
 rates protested against might be condemned, the rates 
 against which there was no protest would be allowed to go 
 into effectJ'^ In regular course of business the complaint 
 must be presented in a verified petition; and the com- 
 plainant will be bound by the form of his complaint.^" A 
 carrier who avers in defense substantial dissimilarity in cir- 
 cumstances and conditions as justification, is concluded 
 by its pleading, and must aflormatively show that the cir- 
 cumstances and conditions are in fact substantially dis- 
 similar; but upon an application for relief under section 4 
 the carrier is not limited by such a rule of evidence, and 
 may present to the Commission every material reason for 
 an order in its favor." The theory of the Commission is 
 that a complaint is not to be regarded strictly as an action 
 at law, but rather as an appeal against illegal action.''^ 
 
 § 1076. Raising the question of jurisdiction. 
 
 The Commission being an administrative body, need 
 not first determine whether the subject-matter of a com- 
 plaint is within its jurisdiction before it considers the 
 merits of a controversy; but affirmative relief may not 
 be granted in any case unless jurisdiction over the subject- 
 matter is definitely ascertained. Without determining the 
 question of jurisdiction, therefore, it may analyze the facts 
 presented, and if sufficient to grant relief, dismiss the 
 
 " Florida Fruit & Vegetable Ass'n " Re Southern Pae. R. R., 1 Int. 
 
 V. Atlantic C. L. R. R., 17 I. C. C. Com. Rep. 16, 1 I. C. C. 6. 
 
 552. "Trammell v. Clyde Steamship 
 
 " Mayor & Council of Boston v. Co., 4 Int. Com. Rep. 120, 5 I. C. C. 
 
 A. C. L. R. R., 24 I. C. C. 50. 324. 
 
 "i In re Advances on Fruits and ™ New Pittsburg Coal Co. v. 
 
 Vegetables, 24 I. C. C. 164. H. V. Ry., 26 I. C. C. 121. 
 
 [971] 
 
§ 1076 ] Railroad Rate Regulation 
 
 complaint." And where a broad question is intended to 
 be raised, the Conunission has ruled that it should be in 
 some comprehensive proceeding to which the railroads 
 responsible for the situation can be made parties.^" And 
 in general the Commission will as a matter of practice 
 decline to give a preliminary hearing upon a motion to 
 dismiss for lack of jurisdiction.^^ Jurisdiction is a funda- 
 mental fact which can be raised at any stage of the pro- 
 ceedings before determination of the issues; and it follows 
 from the character of this defense that jurisdiction cannot 
 be conferred by stipulation of parties.*^ 
 
 § 1076. Individual rate during general inquiry. 
 
 In accordance with these general principles, the Com- 
 mission will not think it desirable to undertake to pass 
 upon an individual rate during general inquiry.*' In such 
 a general inquiry the Commission may deal with rates 
 notwithstanding all parties affected are not in; but no 
 order can be addressed to a carrier omitted as a defend- 
 ant.^^ At the conclusion of such a general inquiry very 
 often only a general readjustment will be outlined and the 
 particular complaints by which it was occasioned dis- 
 missed without prejudice.**^ While the law casts upon the 
 respondents the burden of showing that the increased 
 rates are reasonable, the parties at whose instance sus- 
 pensions are ordered should present to the Commission 
 all facts which, in their opinion, tend to show that the 
 increases should be allowed.*^ Where a broad question is 
 intended to be raised, it should be in some comprehensive 
 
 "Mattison v. Penn. Co., 23 I. ''HydrauHc Press Brick Co. v. 
 
 C. C. 233. Vandalia R. R., 15 I. C. C. 175. 
 
 8" In re Advances in Class Rates, " Cedar Hill Coal & Coke Co. v. 
 
 25 I. C. C. 268. Atchison, T. & S. F. R. R., 15 I. C. C. 
 
 *' Associated Wholesale Grocers 73. 
 
 V. Mo. P. R. R., 1 Int. Com. Rep. '^ Oklahoma v. Atchison, T. & S. F. 
 
 321, 1 I. C. C. 156. R. R., 14 I. C. C. 147. 
 
 82 La Salle B. C. R. R. v. C. & ^ Commodity Rates between Mis- 
 
 N. W. Ry., 13 I. C. C. 610. souri River Points, 28 I. C. C. 265. 
 
 [972] 
 
Procedure Before the Commission [ § 1077 
 
 proceeding to which the railroads responsible for the 
 situation can be made parties. 
 
 § 1077. Statement of the wrong. 
 
 It is fundamental that the complaint shall state the 
 facts with such clearness that the Commission may appre- 
 hend the point in issue, and defendant may be adequately 
 advised of the thing which it is called upon to answer and 
 defend.*^ Although no form for drafting the complaint is 
 particularly described, the thing found fault with must 
 definitely appear.'* And to make out a case for relief 
 under the Act, all the circumstances bearing on the ques- 
 tions involved should be presented.*" Thus a mere allega- 
 tion that the rates charged violate certain sections of the 
 Act, unaccompanied by any description of the character 
 of the discrimination, nor any prayer for their correction, 
 is not sufficient to try the question of discrimination.'"' 
 A complainant should seasonably state his claim for 
 damages with sufficient definiteness to advise the Commis- 
 sion and the carrier of the nature of the claim.'^ But 
 whether a discrimination shall be removed is not measured 
 by its amount, whether large or small, but by whether it 
 is undue.*^ As a matter of practice different complaints 
 all on the same basis should be combined in one com- 
 plaint."' And, while a general description would be suffi- 
 cient in a complaint involving rates to numerous destina- 
 tions which have been attacked, such general language would 
 be held insufiicient in a case where damages are claimed 
 on accoimt of some specific transactions in the past."^ 
 
 " Augusta & Savannai Steamboat '" United States Leather Co. v. 
 
 Co. V. O. S. S. Co. of Savannah, 26 S. Ry., 21 I. C. C. 323. 
 
 I. C. C. 380. '1 Mountain Ice Co. v. D., L. & W. 
 
 88 Florida Fruit & Vegetable Ass'n R. R., 21 I. C. C. 45. 
 
 V. Atlantic C. L. R. R., 17 I. C. C. "' Fort Dodge Commercial Club 
 
 552. V. I. C. C, 16 I. C. C. 572. 
 
 8' Quammen & Austad Lumber '' Hayden & W. Lumber Co. v. 
 
 Co. V. C, M. & St. P. Ry., 19 1. C. C. Gulf & S. I. R. R., 14 I. C. C. 540. 
 
 110, '* Mountain Ice Co. v. D., L. & 
 
 W. R. R., 21 I. C. C. 45. 
 
 [973] 
 
§ 1078 ] Railroad Rate Regulation 
 
 § 1078. Sufficiency of the complaint. 
 
 While the Commission is extremely liberal in construing 
 pleadings, the Act necessarily implies that carriers shall 
 be notified of the complaint which they are required to 
 answer; and although no particular form is insisted upon, 
 there must be a statement of the thing which is claimed to 
 be wrong sufficiently plain to put the carrier upon its 
 defense.'^ It is not a matter of form, but of substance; 
 even a letter setting forth sufficiently the nature of claim 
 is enough to take rank as a complaint.''* And any general 
 allegations in regard to a shipment showing the point of 
 origin and destination, the consignor and consignee and 
 the commodity and the billing are sufficient to constitute 
 a filing of a complaint.^'^ There are no technicalities in- 
 sisted upon in drawing complaints ; '* it is simply necessary 
 to tell a straight-forward story; for the Commission never 
 looks to the niceties of pleading. The mere fact that the 
 word "overcharge" is used instead of "unreasonable ex- 
 action" will not be permitted to interfere with a trial of 
 the substantial issue presented.'' As was said in one case, 
 it was sufficient if the complaint states enough to put in 
 issue a charge of undue prejudice.^ But a complaint 
 against all rates between two points is not sufficient; 
 there must be specific attack upon specific rates. ^ How- 
 ever, although a complaint is apparently indefinite, if it 
 can be made definite at the hearing that will be enough.' 
 And in one proceeding an inference was drawn that the 
 intention was to attack rates in both directions, though 
 the complaint did not so specify.^ A complaint showing 
 
 "5 United States Leather Co. v. »» Clinton Refining Co. v. C. & 
 
 S. Ry., 21 I. C. C. 323. N. W. Ry., 28 I. C. C. 364. 
 
 »« Gamble-Robinson Commission ' Union Tanning Co. v. S. P. Co., 
 
 Co. V. St. L. & S. F. R. R., 19 I. C. C. 25 I. C. C. 112. 
 
 114. ^ City of Spokane v. N. P. Ry., 19 
 
 9' See Mountain Ice Co. v. D., L. & I. C. C. 162. 
 
 W. R. R., 21 I. C. C. 45. ' Oskosh Logging Tool Co. v. Chi- 
 
 '» Memphis Freight Bureau v. cago & N. W. Ry., 14 I. C. C. 109. 
 
 St. Louis S. W. Ry., 18 I. C. C. ■* Beall v. W. A. & M. V. Ry., 
 
 67. 20 I. C. C. 406. 
 
 [974] 
 
Procedure Before the Commission [ §§ 1079, 1080 
 
 date and weight of shipment, with allegation of unreason- 
 ableness of rate charged the complainant, is sufficient.'' 
 But a complaint against a rate "to Boston, New York 
 and Eastern points" will only cover Boston and New 
 York — "Eastern points" is too indefinite." 
 
 § 1079. Answers in defense. 
 
 An answer which sets up a justification must clearly 
 advise complainants of the facts and circumstances relied 
 on as constituting such justification.'^ Under the rules of 
 practice issued by the Commission, a replication to an 
 answer is not required or allowed.^ Matter which is not 
 expressly in issue by the pleadings or necessarily involved 
 in issues presented in a strictly inter partes case instituted 
 by complaint before the Commission cannot be authorita- 
 tively determined by it.'* But technical defenses have no 
 place before the Commission, and will not be permitted 
 to defeat the broad principles of the Act.'" It should be 
 noted that section 13 requires that every carrier com- 
 plained of shall be supplied with a copy of complaint, and 
 given an opportunity to answer." Oftentimes upon an 
 examination of complaints, the Commission w;ill request 
 a conference between carriers and shippers to see if under 
 its guidance arrangements satisfactory to all concerned 
 may not be worked out.^^ 
 
 § 1080. Amendment to complaint. 
 
 The Interstate Commerce Commission is Uberal in 
 allowing amendments to complaints, but will not allow 
 
 5 Riverside Mills v. G. R. R., 20 » Commercial Club v. Chicago, R. 
 
 I. C. C. 423. I. & P. R. R., 6 Int. Com. Rep. 
 
 « Kiser Co. v. Central of Ga. Ry., 647. 
 
 17 I. C. C. 430. '» Flour City S. S. Co. v. L. V. 
 
 ' Raworth v. Northern P. R. R., R. R., 24 I. C. C. 179. 
 
 3 Int. Com. Rep. 867, 5 I. C. C. 234. " Fels & Co. v. Pennsylvania R. R., 
 
 » Oregon S. L. Ry. v. Northern P. 23 I. C. C. 483. 
 
 R. R., 2 Int. Com. Rep. 639, 3 I. C. C. '^ Potato Shipments in Winter, 26 
 
 264. I. C. C. 681. 
 
 [975] 
 
§ 1081 ] Railroad Rate Regulation 
 
 one that would be in effect making a new case.^^ A com- 
 plaint against a railroad company stating that it had been 
 previously in the hands of a receiver, was allowed to be 
 amended so as to show existence of receivership which it 
 appeared on hearing was still in existence, i* But the 
 Commission does not favor a practice of ingrafting an ap- 
 plication for through routes and joint rates upon a claim 
 for reparation. ^^ Where a complaint as filed did not ask 
 reparation, but at the hearing a request for leave to 
 amend in that respect was noted in the record, and there 
 being no evidence touching specific shipments, that fea- 
 ture of case not considered by the Conmaission in dispos- 
 ing of the case." Improper complaints cannot be cured 
 by amendment so as to come within its scope. "^ Thus if 
 not, asked in the complaint through rates cannot be asked 
 in an amendment.^* It is not unheard of for an amend- 
 ment of a complaint to be permitted after the hearing.'' 
 But when the two-year period has elapsed, the jurisdiction 
 of Commission cannot be restored by amendment.^" 
 
 § 1081. Responsiveness to pleadings. 
 
 In accordance with the general principles under dis- 
 cussion, no order will be made where there is no com- 
 plaint covering the issue." Thus where there was no 
 complaint in regard to any violation of the long and short 
 haul clause, it was held that this possibility cannot be 
 
 1' Delaware State Grange v. New " Michigan H. M. Ass'n v. Trans- 
 York, P. & N. R. R., 2 Int. Com. continental Freight Bureau, 27 I. C. 
 Rep. 187, 2 I. C. C. 309; Riddle v. C. 32. 
 
 Baltimore & O. R. R., 1 Int. Com. '» La Salle & B. C. R. R. v. C. & 
 
 Rep. 701, I. C. C. 372. N. W. R. R., 13 I. C. C. 610. 
 
 " Reynolds v. Western New York " People's Fuel & S. Co. v. Gt. 
 
 & P. Ry., 1 Int. Com. Rep. 685, 1 W. Ry., 27 I. C. C. 24. 
 
 I. C. C. 347. 20 Werner S. M. Co. v. lU. C. Ry., 
 
 " La Salle & B. County R. Co. v. 17 I. C. C. 380. 
 
 Chicago & N. W. R. Co., 11 I. C. C. ^i Refuge Cotton Oil Co. v. St. 
 
 610. L., I. M. & S. Ry., 27 I. C. C. 
 
 « Atchison v. St. L., I. M. & S. Ry., 117. 
 22 I. C. C. 131. 
 
 [976] 
 
Procedure Before the Commission [ § 1081 
 
 considered in a petition attacking the reasonableness, 
 relatively and per se, of the rates in question. ^^ Upon a 
 complaint alleging undue preference, where the new tariffs 
 are suspended, the question of the reasonableness per se of 
 the rates is automatically imported into the case.^' But 
 in a complaint not attacking the reasonableness of a rate 
 per se, no conclusion on that point can be reached by 
 Commission. ^^ And where at a hearing for the first time 
 a claim was made that wool rates in different parts of 
 New England were not properly adjusted, it was held that 
 this should have been duly called to the attention of the 
 Commission by a proper complaint. ^^ On the other hand, 
 it is the duty of the Commission as an administrative 
 body to pass upon all rates presented in a complaint.^* 
 And conversely where specific rates are attacked the Com- 
 mission generally speaking will confine the inquiry to 
 them.^^ While stations named in complaint may furnish 
 a guide to the proper adjustment of the remaining sta- 
 tions, the Commission must necessarily confine itself to 
 the pleadings, and make no finding concerning rates to 
 the remaining stations.^* As has already been pointed 
 out, unless reasonableness of rates is raised by the com- 
 plaint, no finding thereon will be made.^' In view of the 
 policy of the Act, reasonableness and reparation should 
 be combined in one complaint.^" If a reduction of rates is 
 asked and favorably acted upon by the Commission, the 
 complainant cannot later file a complaint in another case, 
 asking for reparation for past exactions.'^ Where the 
 statements as filed showed overcharges, but bills of lad- 
 
 " Chamber of Commerce of Au- ^' Sanford v. Western Express Co., 
 
 gusta V. S. Ry., 22 I. C. C. R. 16 I. C. C. 32. 
 
 233. ^ Omaha Grain Exchange v. C, R. 
 
 2' Douglas & Co. V. C, R. I. & P. I. & P. Ry., 28 I. C. C. 680. 
 
 Ry., 21 I. C. C. R. 97. =' Davies v. Louisville & W. R. R., 
 
 '* Holland Blow Stave Co. v. 18 I. C. C. 540. 
 
 A. C. L. R. R., 24 1. C. C. 81. '" Delray Salt Co. v. M. C. R. R., 
 
 "Massachusetts-Maine Wool 18 I. C. C. 247. 
 
 Rates, 2S I. C. C. 396. " West Texas Fuel Co. v. Texas 
 
 » Eastern Case, 30 I. C. C. 243. & P. Ry., 17 I. C. C. 491. 
 
 62 [ 977 1 
 
§ 1082 ] Raileoad Rate Regulation 
 
 ing produced in evidence covering shipments showed no 
 overcharge, there is no basis for an order by the Commis- 
 sion presented by the pleadings. ^^ The fact that the issue 
 raised by the petition is not as broad as it might have 
 been if other carriers had been made parties, can furnish 
 no warrant for a refusal to pass upon matters clearly 
 embraced within it.'' But with only one carrier as party 
 defendant, issue cannot be broadened to embrace matters 
 which were brought into existence by other carriers, and 
 for which defendant alone is in no sense responsible.'* 
 
 § 1082. Application for relief. 
 
 A general or blanket application for relief from sec- 
 tion 4 will be held sufficient by the Commission, there 
 being nothing in the clause prescribing the form, contents, 
 or breadth of the application to be filed thereunder.'^ 
 But the filing by a carrier of an application for relief 
 from section 4 does not preclude a determination of a 
 complaint under section 3 involving the same general 
 territory.'^ A holding by the Commission that rates in 
 general are reasonable, does not preclude complaint of 
 the consideration of particular rates. '^ A complainant 
 should not attack one rate with idea of later complaining 
 thereafter if successful that through rates are greater than 
 sum of locals. '* But a fourth section application will be 
 considered with complaint attacking rates covered by 
 application.'^ If only reparation is asked there will be 
 no action directed against the maintenance of the present 
 rate.*" Awards of reparation by the Commission are 
 based upon violations of the Act in the past, not for pres- 
 
 '^Esson Granite Co. v. S. Ry., "Ferguson Saw Mill Co. v. St. 
 
 26 I. C. C. 449. Louis, I. M. & S., 18 I. C. C. 391. 
 
 " Chattanooga Feed Co. v. A. G. " National Petroleum Ass'n v. 
 
 S. R. R., 22 I. C. C. 480. Chicago, M. & St. P. Ry., 14 I. C. C. 
 
 " Ibid. 284. 
 
 '' Southern Furniture Mfrs. Ass'n ™ Board of Trade of Morristown 
 
 V. S. Ry., 25 I. C. C. 379. v. A. C. L. R. R., 24 I. C. C. 372. 
 
 ™ Mayor & Council of Boston v. " Gamble Robinson Co. v. No. 
 
 A. C. L. R. R., 24 1. C. C. 50. Pac. Ry., 14 I. C. C. 523. 
 
 [978] 
 
Procedure Before the Commission [ §§ 1083, 1084 
 
 ent violations thereof. ^^ And the Commission will gen- 
 erally dismiss a complaint where the carrier has volim- 
 tarily done all that the Commission would order it to do/^ 
 
 § 1083. Informal complaint. 
 
 An informal complaint showing date and weight of 
 shipment, with allegation of unreasonableness of rate 
 collected, is sufficient. ^^ And for this purpose an informal 
 letter containing all the elements of a claim is enough.^* 
 Commission holds that as it is an administrative body, it 
 is not limited strictly by rules generally prevailing in the 
 courts as to pleadings.''^ Thus any memorandum filed, 
 setting forth the nature of the claim and expense bills, 
 showing shipments and amount paid, is sufficient.^* 
 Neither the Act nor the rules of the Commission prescribe 
 what act or acts shall constitute filing of claim for repara- 
 tion.*^ The initiation of informal proceedings puts the 
 matters in the hands of the Conomission.*^ For example, 
 after the institution of informal proceedings the matter 
 cannot be adjusted merely by stipulation of the parties.*' 
 Protest at the time is not necessary for the maintenance 
 of a proceeding for subsequent reparation, as the Com- 
 mission has power to make things right for past exactions 
 as an ancillary power to its general jurisdiction to revise 
 rates.''" 
 
 § 1084. Complainant not coming with clean hands. 
 
 The defendant has sometimes objected to the main- 
 
 " St. Louis Blast Furnace Co. v. Co. v. St. L. & S. F. R. R., 19 I. C. C. 
 
 V. Ry., 24 I. C. C. 360. 114. 
 
 « Alan Wood Iron & Steel Co. v. " Marian Coal Co. v. D., L. & W. 
 
 P. R. R., 24 I. C. C. 27. R. R., 27 I. C. C. 441. 
 
 "Riverside Mills v. G. R. R., «Ocheltree Grain Co. v. Chicago 
 
 20 I. C. C. 423. R. R. & P., 13 I. C. C. 238. 
 
 " Fiske & Sons v. B. & M. R. R., « Swift & Co. v. Chicago & A. 
 
 19 I. C. C. 299. R. R., 16 I. C. C. 426. 
 
 '5 Nollenberger v. Missouri Pacific *" National Refining Co. v. Atchi- 
 
 Ry., 15 I. C. C. 595. son, T. & S. F. R. R., 18 I. C. C. 
 
 *6 Gamble-Robinson Commission 389. 
 
 [979] 
 
§ 1084 ] Railroad Rate Regulation 
 
 tenance of the complaint on the ground that the complam- 
 ant did not come before the Commission with clean hands. 
 Thus in one case before the courts of law," there was 
 involved an order of the Commission forbidding the en- 
 forcement by defendants therein of a rule whereby they 
 reserved to themselves, as initial carriers, the right of 
 routing citrus traffic beyond their own lines and denied 
 this privilege to shippers. The defendants contended 
 that, even if the rule was unlawful, the complainants 
 (shippers) were not entitled to relief, because they had 
 used the privilege of routing for the purpose of securing 
 rebates and desired to retain it for that purpose. , In 
 overruling this contention the court said: "With reference 
 to defendants' contention, that the complainants before 
 the Interstate Commerce Commission were there with 
 unclean hands, it is only necessary to say, that, in this 
 court, the Commission represents the public at large and 
 therefore no participation by said complainants in the 
 unlawful practice of rebates could bar relief.""^ The public 
 interested includes consignees, consximers and others, as 
 well as shippers and producers or manufacturers.*' A 
 fortiori the fact that others associated with the complain- 
 ants are acting illegally will not affect the validity of the 
 complaint. Thus the fact that the members of a corpora- 
 tion organized to promote the marketing of livestock at 
 a given city are violating the anti-trust law will not pre- 
 vent the corporation from maintaining a proceeding to 
 correct an unreasonable freight rate on livestock shipped 
 to such city.*^ So the fact that a certain association 
 constitutes an illegal monopoly will not affect the right 
 of certain members of the association, constituting but a 
 portion of its membership, to complain." 
 
 *' Interstate Commerce Commis- '' Chicago Livestock Exch. v. Ch. 
 
 sion V. Southern Pacific Co., 132 Gt. W. Ry., 10 I. C. C. Rep. 428. 
 Fed. 829. " Cattle Raisers' Ass'n v. F. W. 
 
 "Compare Mitchell Coal & Coke .& D. C. R. R., 7 I. C. C. Rep. 
 
 Co. V. Penna. R. R., 181 Fed. 403, 513. 
 discussed in the next section. " Tift v. So. Ry., 10 1. C. C. 548. 
 
 [980] 
 
Procedure Before the Commission [ §§ 1085, 1086 
 
 § 1086. Scope of the doctrine. 
 
 On the other hand, the illegaUty of the demand of the 
 complainant may be so directly involved in the recovery- 
 he asks as to bar him. Thus no reparation will be ordered 
 for ceasing to give unpublished privileges.'''' And for a 
 complainant to have a standing to demand reparation the 
 lawful charges must have been paid by him." There are 
 cases which unquestionably compel a peremptory dis- 
 missal, although the Commission does not inquire into 
 equities not connected with the issue before it.^^ And 
 if the complainant has fraudulently acted in other trans- 
 actions, the complaint will be dismissed.^' Of course, a 
 demand should be denied, when to grant it would result 
 in discrimination against the complainant's competitors.^" 
 If it be shown that a rival is getting rebates,^' suit may 
 be brought although the complainant was cognizant 
 thereof. But where a shipper has himself enjoyed an un- 
 lawful rate, he cannot recover for unjust discrimination 
 against a carrier for giving a competitor on like shipment 
 a lower rate."- 
 
 Topic B. Parties to the Proceedings 
 
 § 1086. Person interested as complainant. 
 
 Only a person interested in his own right can file a com- 
 plaint. Thus a coal operator not being damaged by the 
 failure of a railroad company to establish a rate upon a 
 class of coal not produced at his mine, cannot complain 
 of such a rate.^' The person aggrieved should complain 
 in his own name; a complaint by a ticket broker having 
 
 '" National Lumber Co. v. S. P. "" Minneapolis Threshing Machine 
 
 L. A. & St. R. R., 15 I. C. C. 434. Co. v. St. P., M. & O. Ry., 17 I. C. C. 
 
 " Peale, P. & R. v. Central R. R. 189. 
 
 of N. J., 18 I. C. C. 25. " Mitchell Coal & Coke Co. v. 
 
 '8 Lum V. G. N. Ry. Co., 21 1. C. C. Pennsylvania R. R., 181 Fed. 403. 
 
 558. °^ Penn. R. R. Co. v. International 
 
 '=> Sligo Iron Store Co. v. Atchison, Coal Mining Co., 173 Fed. 1. 
 
 T. & S. F. R. R., 17 I. C. C. " McGrew v. Missouri Pac. R. R., 
 
 139. 8 I. C. C. Rep. 630. 
 
 [981] 
 
§ 1087 ] Railroad Rate Regulation 
 
 no interest in the transaction will not be entertained.®* 
 But as interest of the petitioner, by the provision of the 
 Act, need not be direct, cases cannot be dismissed because 
 complainant shows no damage.'*'^ Therefore, the defend- 
 ants are not entitled to a dismissal of a complaint of 
 unlawful rates, on the ground that the petitioners, being 
 merely commission merchants, can sustain no direct or 
 material damage under the rates in question.*^ If a com- 
 plainant dies after his complaint is filed, his representa- 
 tives may be substituted as complainants." And a com- 
 plaint may be brought by successor to corporation which 
 was the original shipper.*^ Whether an assignee can main- 
 tain proceedings in his own name to recover reparation 
 was formerly not clear.*' But more recently an assignee 
 has been allowed to recover damages.™ 
 
 § 1087. Requisites in this regard. 
 
 The fact that the complainant has not made a ship- 
 ment and possibly may not be able to make a shipment 
 for two years, is no ground for dismissing a complaint.^' 
 That a complaining steamship corporation has no vessels, 
 and that its stock is not paid in, is no objection to its 
 rights to obtain from the Commission a ruling as to 
 whether such company will be made a party to through 
 routes when it is able to transport.'^^ The Commission is 
 not deprived of jurisdiction to consider the merits of the 
 controversy, merely because delegation to the officers 
 presenting the complaint of the right to do so in the name 
 
 " Otlinger v. So. Pac. R. R., 1 «' Bulah Coal Co. v. P. R. R., 20 
 
 I. C. C. Rep. 604. I. C. C. 52. 
 
 ^5 Indianapolis Freight Bureau v. "' Wood-Mosaic Flooring & Lumber 
 
 Pa., 15 I. C. C. 567. Co. v. L. & N. R. R., 22 I. C. C. 458. 
 
 «" James v. Canadian P. R. R., ^^ O'Brien Commercial Co. v. C. & 
 
 4 Int. Com. Rep. 274, 5 I. C. C. 612; N. W. Ry., 20 I. C. C. 1080. 
 
 Milk Producers' Protective Ass'n v. " Jubitz v. S. P. Co., 27 I. C. C. 44. 
 
 Delaware, L. & W. Ry., 7 I. C. C. " Lum v. G. N. Ry., 21 I. C. C. 
 
 Rep. 92; Central Y. P. Ass'n v. Vicks- 588. 
 
 burg, S. & P. R. R., 10 I. C. C. Rep. " Flour City S. S. Co. v. L. V. R. 
 
 193. R., 24 I. C. C. 179. 
 
 [982] 
 
Procedure Before the Commission [ § 1088 
 
 of the United States is not affirmatively shown.''^ And 
 clearly relief cannot be denied merely because of the sug- 
 gestion advanced that other persons or places might be in- 
 duced to seek like reliefJ^ Regardless of the standing of 
 the original complainant, if subsequently letters are re- 
 ceived from shippers asking to be made co-complainants, 
 before submission of the case, it has been held that imder 
 all the circumstances proper parties were before Commis- 
 sion." In a recent proceeding a complaint against Rule 15 
 of Official Classification, as to a matter strictly inter 
 partes, was dismissed because the issues presented were 
 too broad and important to interests not parties.'^" No 
 other manufacturers having joined in the complaint, or 
 made independent complaint, it is nevertheless possible 
 that they may be materially affected by a disturbance of 
 adjustment that has continued for so many years J^ The 
 party at whose instance a proceeding is brought should be 
 represented by some one able to give full and specific 
 information as to the nature and extent of its business 
 and specific commodity it handles.^* 
 
 § 1088. Complaint by an association. 
 
 A corporation whose object is to promote the market- 
 ing of livestock at Chicago in the interest of its mem- 
 bers may, under section 13, maintain a proceeding to cor- 
 rect an unreasonable freight rate on livestock shipped to 
 Chicago, as its members, for whose general benefit and 
 protection it was formed, have a vital interest in such a 
 proceeding.''' So a Milk Producers' Association, whether 
 
 " United States v. U. P. R. R., 28 " National Syrup Co. v. C. & 
 
 I. C. C. 518. N. W. Ry., 28 I. C. C. 673. 
 
 " Casassa v. P. R. R., 24 I. C. C. " R. R. Com. of IVIontana v. N. P. 
 
 629. Ry., 26 I. C. C. 407. 
 
 " Cincinnati & Columbus Traction " Cattle Raisers' Ass'n v. Fort 
 
 Co. V. B. & 0. S. W. R. R., 20 Worth & D. C. R. R., 7 I. C. C. Rep. 
 
 I. C. C. 486. 613; Chicago Livestock Exchange v. 
 
 "Kleibacker v. L. & N. R. R., Chicago G. W. R. R., 10 I. C. C. 
 
 22 I. C. C. 420. Rep. 428. 
 
 [983] 
 
§ 1088 ] Railroad Rate Regulation 
 
 representing its own members, or specially authorized to 
 represent other shippers, or assuming in addition to rep- 
 resent shippers engaged in the same industry on some of 
 the defendant lines, was entitled to bring and maintain 
 this proceeding, affecting rates on milk supplied for a 
 common, market, against all the defendants engaged in 
 carrying for that market.*" And while an association of 
 shippers has no direct interest in the determination of the 
 question as to whether divisions or allowances from pub- 
 lished tariff rates, made by defendants to tap lines owned 
 or controlled by other shippers, constitute departures from 
 the published rates, it has such an indirect interest as 
 entitles it, under the Act, to maintain a proceeding to 
 have such division declared unlawful.*^ When such a 
 petition is filed, it is considered the beginning of the ac- 
 tion in all its subsequent stages; consequently the suit 
 of the members of a cattle raisers' association for the re- 
 covery of damages should be treated as having been be- 
 gun by the filing on their behalf of the original petition 
 by the association itself, although they subsequently in- 
 tervened.*^ A freight bureau, a concern which admits 
 members upon written contract to perform certain serv- 
 ices in return for an annual fee, is an association compe- 
 tent to bring a complaint before the Commission under the 
 Act to Regulate Commerce; the fact that it may not be 
 able to answer in costs in case such should be awarded 
 against it on an appeal from the Commission to the courts 
 does not take away its right to bring complaint under the 
 Act.*' A voluntary improvement association consisting 
 of business men of Council Bluffs, is a competent party 
 complainant to assail as unreasonable and discriminatory 
 passenger fares apphcable to the territory from which it 
 
 '» Milk Producers' Protective Ass'n ^^ Cattle Raisers' Ass'n v. Chicago, 
 V. Delaware, L. & W. R. R., 7 I. C. B. & Q. R. R., 10 I. C. C. Rep. 
 C. Rep. 92. 83. 
 
 " Central Yellow Pine Ass'n v. " Forest City Freight Bureau v. 
 
 Vicksburg, S. & P. R. R., 10 I. C. C. Ann Arbor R., 11 I. C. C. 109. 
 Rep. 193. 
 
 [984] 
 
Procedure Before the Commission [ § 1089 
 
 draws its membership.*^ An unincorporated association 
 has a sufficient legal status to.be entitled to demand serv- 
 ice of an express company, and under section 13 of the 
 Act to file a complaint for the latter's failure to furnish 
 the same.*^ 
 
 § 1089. Board of Trade. 
 
 A valid complaint may be njade before the Commission, 
 by trade organizations, without disclosing or containing 
 charges of specific acts of discrimination or undue prefer- 
 ence, resulting in loss or damage to the individuals of 
 which their membership is composed; but this is not to be 
 understood as implying that it would be competent for 
 the Commission, without a complaint made before it, and 
 without a hearing, to subject common carriers to penal- 
 ties.*^ The Act authorizes boards of trade of cities and 
 associations of like character to apply to the Interstate 
 Commerce Commission for relief; and such corporations 
 and members representing such associations may likewise 
 apply to the court for relief from injuries unlawfully in- 
 flicted by the Interstate Commerce Commission.*' Thus 
 the leading commercial organizations of a city, are com- 
 petent parties to intervene by petition to the Commerce 
 Court to enjoin the enforcement of an order entered by 
 the Commission requiring carriers from granting to that 
 city reshipping privileges so long as they deny that priv- 
 ilege to other cities named.** A commercial association 
 is a proper party to maintain a petition for relief from the 
 exaction of an illegal or unreasonable charge or for any vio- 
 lation of the law's requirements.*' If that is essential, a 
 complaint filed by an association in behalf of certain of 
 
 " West End Improvement Club 197, 40 L. ed. 940, 16 Sup. Ct. 666. 
 
 V. O. & C. B. Ry. Bridge Co., 17 «' Peavey & Co. v. Union Pacific 
 
 I. C. C. 239. R. R., 176 Fed. 409. 
 
 '" California Commercial Ass'n ^ Nashville Grain Exch. v. United 
 
 V. Wells, Fargo & Co., 14 I. C. C. 422. States, 191 Fed. 37. 
 
 ^ Texas & P. Ry. v. Interstate . *' California Commercial Ass'n v. 
 
 Commerce Commission, 162 U. S. Wells, Fargo & Co., 16 I. C. C. 458. 
 
 [ 985 I 
 
§§ 1090, 1091 ] Railroad Rate Regulation 
 
 its members specifically named, and other individuals who 
 are named is held to be a petition by firms and individuals 
 whose names are given.^" And a finding thereon that 
 members of the complainant's association are entitled to 
 damages does not include members other than those men- 
 tioned in complaint.,'^ 
 
 § 1090. State Railroad Comjnission. 
 
 It is provided in the Act specifically that the Commis- 
 sion shall in like manner as upon a complaint filed by 
 others investigate any complainant forwarded by a railroad 
 commission or other body with similar powers of any 
 State or Territory; and in the modern legislation by which 
 State bodies of this character are constituted, it is usual 
 to provide that such bodies shall have authority so far as 
 may be deemed advisable to bring matters to the federal 
 Commission for decision which are beyond their own juris- 
 diction. The repeal of the law creating the railroad com- 
 mission of Florida does not operate as a withdrawal or 
 dismissal of a complaint brought in its name before the 
 Commission for the real parties in interest.^^ A complaint 
 may be brought by a state commission on behalf of a citi- 
 zen.^^ But a State railroad commission is not entitled to 
 damages.^* 
 
 § 1091. Intervening parties. 
 
 All persons whether shippers or carriers having an in- 
 terest in a question pending before the Commission may 
 appear when the case is submitted without being made 
 formal parties.'^ It may often turn out that the parties 
 
 ™ Michigan Hardwood Mfrs. Ass'n '' R. R. Com'ra of Montana v. 
 
 V. Transcontinental Freight Bureau, N. P. Ry., 26 I. C. C. 482. 
 
 27 I. C. C. 32. " R. R. Com. of Oregon v. S. P. 
 
 " Commercial Club of Omaha v. Co., 24 I. C. C. 273. 
 
 A. & S. R. Ry., 27 I. C. C. 302. »' Hurlburt v. Lake Shore & M. S. 
 
 »2 Raih-oad Commission of Florida R. R., 2 Int. Com. Rep. 81, 2 I. C. C. 
 
 V. Savannah, F. & W. R. R., 3 Int. 122. 
 Com. Rep. 688, 5 I. C. C. 136. 
 
 [986] 
 
Procedure Before the Commission [ § 1092 
 
 who later intervene are the real parties in interest."^ It is, 
 of course, fundamental that no intervention will be allowed 
 which is not germane to the complaint.^'' And, conse- 
 quently, interveners' will be denied reparation where rep- 
 aration was not asked in the original complaint.'^ A 
 cross-complaint might perhaps be the solution of some of 
 these difficulties.^' And reparation may be granted where 
 petitions for intervention are allowed.^ On the other 
 hand, interveners wiU sometimes be heard to insist that 
 to make the order prayed for would make a discrimina- 
 tion against them.^ The Commission has been known to 
 order as a result of intervention that carriers shall submit 
 some plan by which the undue discrimination against in- 
 tervening communities may be removed.' Interveners in 
 many cases will be held entitled to affirmative relief, not- 
 withstanding the objections of defendants.* The Commis- 
 sion has had occasion to remark that the very publicity 
 of its proceedings invites intervention."^ 
 
 § 1092. Proper parties defendant. 
 
 It is fundamental with the Commission that where 
 proper parties not made defendants, damages will be de- 
 nied.^ The authority of the Commission to issue orders 
 in a proceeding is limited to those defendants that are 
 then before it.' Where a through rate is in question, all 
 the carriers participating in the rate are proper parties, 
 and should be joined as defendants.* Each carrier that 
 
 '= Mountain Ice Co. v. D., L. & ' Commercial Club of Duluth v. 
 
 W. R. R., 21 I. C. C. 45; modified, B. & O. R. R., 27 I. C. C. 639. 
 
 596. * Evens & Howland Fire Brick Co. 
 
 " Jennison Co. v. Gt. Northern v. St. L., I. M. & S. Ry., 25 I. C. C. 
 
 Ry., 18 I. C. C. 247. 141. 
 
 1' R. R. Com. of Oregon v. S. P. * Bennett v. M., St. P. & S. S. M. 
 
 Co., 24 I. C. C. 273. Ry., 15 I. C. C. 301. 
 
 "'Traffic Bureau of Nashville v. 'Rock Spring Distilling Co. v. 
 
 L. & N. R. R., 28 I. C. C. 533. I. C. R., 27 I. C. C. 54. 
 
 > Davis Sewing Machine Co. v. ' Pels & Co. v. P. R. R., 25 I. C. C. 
 
 P. C. C. & St. L. Ry., 26 I. C. C. 282. 154. 
 
 2 Baer Bros. Mercantile Co. v. * Warren-Ehret Co. v. Central R. 
 
 M. P. Ry., 17 I. C. C. 225. R., 8 I. C. C. Rep. 598; Cattle 
 
 [987] 
 
§ 1093 ] Railroad Rate Regulation 
 
 participates in joint rates both to a point discriminated 
 against and to a point preferred is responsible for the dis- 
 crimination, notwithstanding the fact that its rails do not 
 extend to the latter point.' But a railroad does not dis- 
 criminate against a locality it does not reach, and in 
 whose carrying trade it does not participate.^" The carrier 
 over whose line the shipment moved not being a party, 
 damages will be denied. '' But a carrier which partici- 
 pated in the movements although it had not been made a 
 party will, of course, be given permission to participate 
 in the payment of damages. ^^ Where a point not on 
 the defendant's line is involved, the complaint unless 
 amended must be dismissed.^' And no order can be en- 
 tered as to rates on coal from a point on the line of a rail- 
 road company not made a party defendant.^* Upon com- 
 plaint attacking a separately established part of a through 
 charge it is not necessary to make parties any lines where 
 the rate is not attacked. ^'^ 
 
 § 1093. Necessary parties defendant. 
 
 All carriers whose appearance is necessary to settle the 
 controversy must of course be present.^" And no carrier 
 can be affected by the order of the Commission unless he 
 was a party to the proceeding. ^^ The reason for securing 
 
 Raisers' Ass'n v. Chicago, B. & Webster Grocer Co. v. C. & N. W. 
 
 Q. R. R., 10 I. C. C. Rep. 83; Texas Ry., 21 I. C. C. 21. 
 
 & P. R. R. V. Interstate Commerce " Thompson Lumber Co. v. Illi- 
 
 Com., 162 U. S. 197, 40 L. ed. 940, nois Central R. R., 14 I. C. C. 566. 
 
 16 Sup. Ct. 666, 6 Int. Com. Rep. "A. H. Schowalter & Company 
 
 405. V. Chicago, R. I. & P. R. Co., 11 1. C. 
 
 9 Mfrs. & Merchants' Ass'n v. C. 222. 
 
 A. & A. R. R., 25 I. C. C. 116; Gal- " Vulcan Iron Works Co. v. A., 
 
 veston Commercial Ass'n v. A., T. & T. & S. F. Ry., 22 I. C. C. 477. 
 
 S. F. Ry., 25 I. C. C. 216. i" Riddle v. Pittsburgh & L. E. R. 
 
 " Ch. of C. of Ashburn v. G. S. & R., 1 Int. Com. Rep. 773, 1 I. C. C. 
 
 F. Ry., 23 I. C. C. 140. 490; Michigan Congress Water Co. v. 
 
 " Winterbotham & Sons v. M. P. Chicago & G. T. R. R., 2 Int. Com. 
 
 Ry., 21 I. C. C. 266. Rep. 428, 2 I. C. C. 594. 
 
 " Jones Bros. Co. V. M.&W. R. R., " Poughkeepsie Iron Co. v. New 
 
 21 I. C. C. 577; Larson Lumber Co. York C. & H. R. R. R., 3 Int. Com. 
 
 V. G. N. Ry. Co., 21 I. C. C. 474; Rep. 248, 4 1. C. C. 195. 
 
 [988] 
 
Procedure Before the Commission [ § 1093 
 
 the appearance of all interested carriers is clear. The rea- 
 sonableness of rates cannot be fairly determined in a pro- 
 ceeding to which some of the parties responsible for such 
 rates are not parties.'* When complainants desire to test 
 the justice or legality of the through rates, the necessity 
 of bringing in the parties who make the rates, not for 
 a part of the distance merely but for the whole distance, 
 is obvious; they must be brought in, first, because they 
 have a right to be heard, and second, because an order 
 made and purporting to control their action when they 
 were not parties would be improper on its face, and in a 
 legal sense ineffectual." But where an objection as to the 
 sufficiency of parties defendant was raised, for the first 
 time at final argument, it was held that where the neces- 
 sary parties were omitted in the original petition, and 
 leave was granted to bring them in by amendment and 
 such carriers understood that they had been made parties 
 and filed answers and the case proceeded as though they 
 were parties, the Commission would regard the carriers as 
 properly before it; but if not, then the necessary amend- 
 ment should be treated as filed nunc pro tunc^^ Carriers 
 which participate in a transportation are necessary parties 
 to any proceeding involving rates over their lines.^' The 
 result would normally be a dismissal without prejudice on 
 account of nonjoinder of certain carriers. ^^ In extraor- 
 dinary cases the Commission of its own motion will bring 
 in additional defendants, if they are unwilling to act upon 
 conclusions reached.^' But generally speaking the rates 
 
 18 New Orleans Cotton Exch. v. R., 1 Int. Com. Rep. 621, 1 I. C. C. 
 Cincinnati, N. O. & T. P. R. R., 2 199. 
 
 Int. Com. Rep. 289, 2 I. C. C. 375; ^ Mountain Ice Co. v. D., L. & 
 
 Michigan Congress Water Co. v. W. R.R.,21 1. C. C. R. 45. 
 Chicago & G. T. R. R., 2 Int. Com. " Grenada Oil Mill v. I. C. R. R., 
 
 Rep. 428, 2 I. C. C. 594; Kentucky & 24 I. C. C. 318. 
 
 I. Bridge Co. v. Louisville & N. R. " g^rr Chemical Works v. P. & 
 
 R., 2 Int. Com. Rep. 102, 2 I. C. C. R. Ry., 20 1. C. C. R. 77. 
 162. 23 Harbor City Wholesale Co. of 
 
 >9 Allen vt Louisville N. A. & C. R. San Pedro v. S. P. Co., 19 I. C. C. 
 
 323. 
 
 [989] 
 
§§ 1094, 1095 ] Railroad Rate Regulation 
 
 of a carrier not made a party defendant will be held not 
 to be in issue. ^* 
 
 § 1094. Who are parties in interest. 
 
 Any carrier subject to the Act is liable to the person 
 injured for whatever damages accrue by reason of the 
 doing of any act prohibited or declared to be unreason- 
 able by the statute.^^ A shipper has standing before 
 Commission though at the time he has no interest in the 
 traffic named, since the Act distinctly provides that no pro- 
 ceeding shall be dismissed by reason of failure of the com- 
 plainant to show damage to him.^® A caretaker of chickens, 
 negligently permitted by carrier to start on journey free 
 of charge, has been held to be entitled to reparation." 
 Generally speaking a party not originally complaining is 
 not entitled to damage.^* If complainant could have got a 
 lower rate elsewhere he is entitled to reparation.^' But 
 where complainants, as shippers of lumber, enjoy in com- 
 mon with all other shippers a lower rate to a more dis- 
 tant point, and no special damage to them nor to the in- 
 termediate point is shown, ho violation of section 3 is 
 established.'" 
 
 § 1095. Defendants must have an interest. 
 
 Only persons having some legal interest in the contro- 
 versy can be joined as parties defendant. For this reason 
 the receiver of a railroad company is not, after his dis- 
 charge, either a proper or necessary party defendant to 
 an action for a rebate of freight under a contract made by 
 him.'' The fact of a receivership for a defendant carrier 
 
 2« Memphis Freight Bureau v. St. ^s Byrnes v. Atlantic C. L. R. R., 
 
 L. S. W. Ry., 20 1. C. C. R. 33. 23 I. C. C. 251. 
 
 26 National Wool Growers' Ass'n » WilUam v. Can. No. 2, 17 I. C. C. 
 
 V. O. S. L. R. R., 25 I. C. C. 675. 304. 
 
 ^ In re Advances in Rates, West- '" Appalachia Lumber Co. v. L. & 
 
 ern Case, 20 I. C. C..R. 307. R. R. R., 25 1. C. C. 193. 
 
 ^ Ream v. S. P. Co., 25 I. C. C. " Bayles v. Kansas Pi^cific R. R., 
 
 107. 13 Colo. 181, 2 Int. Com. Rep. 643. 
 
 [990] 
 
Procedure Before the Commission [ § 1096 
 
 subsequent to complaint should not interfere with the 
 progress of a proceeding brought merely for the purpose 
 of railway regulation.'^ And where a leased road is made 
 the party defendant, the operating road should be added 
 as a party.'' A group of carriers cannot cast the responsi- 
 bility of maintaining the burden of establishing the reason- 
 ableness of certain advances upon a single carrier, and 
 claim the benefit of whatever the case made by that 
 carrier may establish.'* In a recent proceeding the Com- 
 mission said that insufficient carriers had been named for 
 it to undertake to settle so broad a question as that of the 
 differential relation of Omaha and Kansas City."' A 
 complaint failing to name certain carriers is barred as to 
 those carriers.'* There is no judicial estoppel which can 
 be set up later if the parties subsequently involved are 
 different.'^ 
 
 § 1096. One of several joint parties. 
 
 It is not necessary that aU carriers should be joined as 
 defendants who would be proper parties to the proceedings. 
 Thus where a complaint is made of rates fixed by an as- 
 sociation of carriers, it is not necessary to join all the 
 carriers in the association; '^ the one carrier against which 
 the particular complaint is directed may be the only de- 
 fendant. '^ So a railroad company which participated in 
 through rates is not a necessary, even if it is a proper, 
 party to a proceeding by the Commission against another 
 
 '- Trammell v. Clyde Steamship '° Liberty Mills v. Louisville & 
 
 Co., 4 Int. Com. Rep. 120, 5 I. C. C. M. R. R., 23 I. C. C. 182. 
 
 324. Or for violations of the Act in " Receivers & S. Assn. of Cincin- 
 
 general. Troy Board of Trade v. nati v. Cincinnati, N. 0.& T. P. Ry., 
 
 Alabama Midland Ry., 4 Int. Com. 18 I. C. C. 440. 
 
 Rep. 348, 6 I. C. C. 1. 'sPage v. Delaware, L. & W. R. 
 
 " Boyer v. Chesapeake, 0. & S. W. R., 6 I. C. C. 548. 
 
 Ry., 7 1. C. C. Rep. 55. '' But see Minneapolis Chamber 
 
 '* In re Advances on Coal to Lake of Commerce v. Great Northern 
 
 Ports, 22 I. C. C. R. 604. Ry., 4 I. C. C. 230, 5 L C. C. 
 
 '' Omaha Grain Exchange \-. C, R. 570. 
 I. & P. Ry., 28 1. C. C. 680. 
 
 [991] 
 
§ 1096 ] Railroad Rate Regulation 
 
 company for disobedience of an order of the Commission 
 in the matter of such rates/" And one or more of several 
 connecting carriers need not be made parties to a proceed- 
 ing before the Commission against another connecting carrier 
 for unlawful discrimination in rates between places wholly on 
 its own line ^^ as compared with the through rate over the 
 connecting lines, even having the same effect. ^^ So where 
 one railroad company owns a controlling interest in a sub- 
 sidiary company, while service of complaint on the control- 
 ling company may not be legal service upon a subsidiary 
 company, it does in fact, for all practical purposes, inform 
 the other company of the proceedings.^' But it is sometimes 
 inconvenient to get all the carriers before the Commission 
 at the same time; and a hearing of a complaint against one 
 of a number of connecting carriers may be the only practical 
 thing. ^* Then an order may issue against the respondents, 
 and the cause be held for the purpose of bringing such 
 other carriers into it to be proceeded against unless they 
 comply with the order. ^^ Thus while a raihoad company, 
 operating its road as part of a through line in connection 
 with other carriers, defendants in a case brought to test 
 the legality of a through charge over such line, is a proper 
 party, it is not a necessary party to the proceeding.^* 
 And in proceedings to determine the reasonableness of a 
 through rate as augmented by an alleged unlawful ter- 
 minal charge, all the carriers participating in the through 
 rate are not necessary parties; the only necessary parties 
 defendant, are the carriers who retain the terminal charge 
 for their own use.^'^ In one proceeding a complaint for 
 
 " Texas & P. R. Co. v. Interstate Wichita v. Atchison, T. & S. F. R. R., 
 
 Commerce Commission, 162 U. S. 9 I. C. C. 534. 
 
 197, 40 L. ed. 940, 16 Sup. Ct. 666, " Hurlburt v. Lake Shore & M. S. 
 
 5 Int. Com. Rep. 405. R. R., 2 Int. Com. Rep. 81, 2 I. C. C. 
 
 " Daniels v. Chicago, R. I. & P. 122. 
 
 R. R., 6 1. C. C. Rep. 458. " Bates v. Pennsylvania R. R., 2 
 
 «2 Independent Relief Ass'n v. Int. Com. Rep. 715, 3 I. C. C. 435. 
 
 Western N. Y. & P. R. R., 6 I. C. C. « Warren-Ehret Co. v. Central 
 
 378. R. R., 8 1. C. C. Rep. 598. 
 
 ■" Mayor and City Council of " Cattle Raisers' Ass'n v. Chicago, 
 
 [992] 
 
Procedure Before the Commission [ § 1097 
 
 damages named one road as defendant but it was held 
 that the two connecting lines were necessary parties, such 
 roads being operated as independent properties, though 
 controlled, through stock ownership, by the road named as 
 defendant. ■*' And in a general inquiry the Commission 
 will not undertake to establish differentials where all the 
 carriers interested are not before it.^^ 
 
 § 1097. Liabilities in through carriage. 
 
 The liability of the carriers, in case of an unreasonable 
 or discriminatory joint or through rate, is joint and several, 
 and damages may be awarded against one of such roads 
 which participated in the movement, though other roads 
 performing part of the service are not made parties.''" It 
 is for this reason fundamentally that all participating 
 carriers must be joined in attack on joint rates.^' How- 
 ever, reparation will be awarded against an initial carrier 
 which has published a joint through rate in which con- 
 necting lines named had not concurred, the combination 
 rate legally applicable being found unreasonable.^^ Where 
 only a portion of a combination through rate is attacked, 
 it is not necessary to join as defendants all the carriers 
 that are parties to such rate.'^ But where the interests of 
 many carriers are involved in the determination the Com- 
 mission will insist upon having all before it.^^ Generally 
 speaking, all carriers participating in a through movement 
 should share in refunding if the rate charged is found un- 
 reasonable.^^ But where an overcharge is due to the fault 
 of one carrier misrouting, the carrier to blame should make 
 
 B. & Q. R. R., 10 I. C. C. Rep. " Texico Transfer Co. v. L. & N. 
 
 83. R. R., 20 1. C. C. 17. 
 
 « Mountain Ice Co. v. D., L. & " Globe Milling Co. v. C, M. & 
 
 W. R. R., 21 1. C. C. 45. St. P. Ry., 24 1. C. C. 594. 
 
 « Boileau v. P. & L. E. R. R., 24 " Boileau v. P. & L. E. R. R., 24 
 
 I. C. C. 129. I. C. C. 129. 
 
 5» Webster Grocery Co. v. C. & " Platten Produce Co. v. K. L. S. 
 
 N. W. Ry., 21 1. C. C. 20. & C. Ry., 18 I. C. C. 249. 
 
 " Reno Grocery Co. v. So. Pac, 23 
 I. C. C. 401. 
 
 63 [993] 
 
§ 1098] Railroad Rate Regulation 
 
 the whole refund/* And both the initial and connecting 
 carrier will be required to pay reparation where they were 
 both at fault for misrouting the shipment.*' Where a con- 
 necting line failed to observe a reconsignment order, it 
 was held to be the one liable in reparation for misrouting.''* 
 Whereas if the initial carrier is in fault, it is the one to 
 stand for the recovery in reparation.'^ Reparation against 
 carriers jointly may usually be divided according to agree- 
 ment between lines.*" But to require or permit any other 
 carrier than the one responsible for misrouting to participate 
 in making reparation would be to permit or require departure 
 from established rates, which is expressly forbidden by law." 
 
 § 1098. Who entitled to reparation. 
 
 The law contemplates that an award of damages shall 
 be made to the person actually damaged; and so where 
 the complainant does not appear to have suffered any in- 
 jury, having no legal interest in an overcharge, the Com- 
 mission can make no award of reparation.*^ Moreover, it 
 must be shown affirmatively that the complainant is the 
 proper party entitled to damages; the admission of the 
 defendant is not sufficient.*^ Generally speaking the per- 
 son entitled to an award of damages on the ground of the 
 unreasonableness of a rate is the one who has actually 
 paid the rate.** A shipper who had not paid the freight 
 rate nor sustained any loss held not to be entitled to 
 damages, although the rate charged on his shipments was 
 found unduly discriminatory.**" It is the view of the Com- 
 
 6' Flaccus Glass Co. v. C, C, C. & " Hennepin Paper Co. v. N. P. 
 
 St. Louis Ry., 14 1. C. C. 333. R. R., 12 I. C. C. 535. 
 
 " Beekman Lumber Co. v. O. «2 Lamb, McGregor & Co. v. C. & 
 
 Ry. & N. Co., 19 1. C. C. 343. N. W. Ry., 22 1. C. C. 346. 
 
 ^ Noble V. J. L. C. & E. R. R., 20 «' Baker Mfg. Co. v. C. & M. W. 
 
 I. C. C. 520. Ry., 21 1. C. C. 605. 
 
 «» Noble V. St. L. & S. F. R. R., 16 " National Wool Growers' Ass'n v. 
 
 I. C. C. 186. 0. S. L. R. R., 26 I. C. C. 675. 
 
 ™ Davenport Pearl Button Co. v. ^^ Evens & Howard Fire Brick Co. 
 
 Chicago, B. & St. L. R. R., 17 1. C. C. v. St. L., I. M. & S. Ry., 25 I. C, C. 
 
 193. 141. 
 
 [994] 
 
Procedure Before the Commission [ § 1099 
 
 mission that an award of reparation is due only from a 
 carrier to a shipper, and not to one carrier, as a carrier, 
 from another."" But section 20 provides that the initial 
 carrier has a right of action against a connecting carrier 
 for any loss or damage to property occurring on the latter's 
 line." If the complaining party is the one who sustained 
 the burden of the excess, he is the one entitled to repara- 
 tion."^ Thus reparation is due the owner of property pay- 
 ing excessive charge or on whose behalf it was paid."^ 
 
 § 1099. As between consignor and consignee. 
 
 Where freight charges are paid by the consignee to 
 whom the goods had been sold, it is plain that the con- 
 signor is not the party who is entitled to damages.™ And 
 a purchaser of goods in transit, the vendor having paid 
 the freight charges up to point of purchase, is the one en- 
 titled to damages for misrouting.'^^ A consignee, who paid 
 the freight charges on a shipment place of destination, but 
 deducted that amount from the invoice price of goods, 
 retxirning the expense bills to the consignor, is not en- 
 titled to damages.^^ And, likewise, the consignor is en- 
 titled to damages for an unreasonable rate, where a con- 
 signee commission merchant actually paid the freight 
 charges, but billed them back on the consignor, who ulti- 
 mately paid them." Although the complainant is a 
 broker, nevertheless if the shipments were purchased out- 
 right by him, he is entitled to an award of reparation.^^ 
 But unless the goods are sold, the vendee to pay the 
 
 «s Mfrs. Ry. Co. v. St. L., I. M. & ™ Fond du Lac Church Furnishing 
 
 S. Ry., 28 1. C. C. 93. Co. v. C, M. & St. P. Ry., 21 1. C. C. 
 
 s'Coal Rates on the Stony Fork 481. 
 
 Branch, 26 1. C. C. 168. " Gibson Fruit Co. v. C. & N. W. 
 
 «8 Lindsay Bros. v. C. R. & I. R. R., Ry., 21 1. C. C. 644. 
 
 15 I. C. C. 192. " Baker Mfg. Co. v. C. & N. W. 
 
 5» Gamble-Robinson Commission Ry., 21 1. C. C. 605. 
 
 Co. V. St. L. & S. F. R. R., 19 I. C. C. " Youngblood v. T. & P. Ry., 21 
 
 114; Sunnyside Coal Mining Co. v. I. C. C. 569. 
 
 D. & R. G. R. R., 19 I. C. C. " Central Commercial Co. v. A., T. 
 
 20. & S. F. Ry., 26 I. C. C. 373. 
 
 [9951 
 
§ 1100 ] Railroad Rate Regulation 
 
 freight, the consignor is the substantial party in interest, 
 and entitled to the damages for improper exactions. ^^ 
 Where the complainant is a commission merchant, neither 
 consignor nor consignee, it will be difficult to show that 
 he is the real party in interest.™ But commission mer- 
 chants who were under obligation to pay freight charges 
 are upon the face of the transaction the only proper 
 parties who can maintain suit for an overcharge or 
 an excessive rate.^^ Per contra the consignor, who sold 
 goods at a delivered price under contract that consignor 
 should pay the freight, is entitled to the damages, though 
 the consignee actually paid freight charges.''* And a con- 
 signee who has paid charges based on an unreasonable 
 rate is not entitled to reparation where such charges have 
 been deducted from the shippers' invoice.^' 
 
 Topic C. Order of Procedure 
 
 § 1100. Default for failure to proceed. 
 
 The petition will be dismissed if the complainant fails 
 to appear at the hearing.*" The same result naturally 
 follows if he admits the legality of the defendant's acts.*' 
 And a complainant can expect nothing but dismissal if he 
 totally fails to produce any evidence to prove the issue.*^ 
 The Commission has had occasion to say sharply that it 
 is not enough to file a complaint, the party complaining 
 must pursue it.*^ And generally speaking if the complain- 
 ant fails to appear, the complaint will be dismissed.*^ 
 
 '* Commercial Club of Omaha v. " Re Export Trade of Boston, 1 
 
 A. & S. Ry., 27 1. C. C. 302. Int. Com. Rep. 25, I. C. C. 24. 
 
 ™ Jones V. K. C. S. Ry., 17 I. C. C. '^ Holbrook v. St. Paul, M. & M. 
 
 468. R. R., 1 Int. Com. Rep. 323, 1 1. C. C. 
 
 " Crutchfield & Woolfolk v. S. P. 102; Leonard v. Union Pacific Ry., 
 
 Co., 24 1. C. C. 679. 1 Int. Com. Rep. 627; Rice v. Louis- 
 
 ™ Mountain Ice Co. v. D., L. & W. ville & N. R. R., 1 Int. Com. Rep. 
 
 R. R., 21 1. C. C. 596. 722. 
 
 " Deming Lumber Co. v. S. P. Co., *' Advance Thresher Co. v. Orange 
 
 24 I. C. C. 598. & N. W. R. R., 15 I. C. C. 599. 
 
 «» Jackson v. St. Louis, A. & T. «< Guthril v. Chicago, R. I. & P. 
 
 Ry., 1 1. C. R. 599. Ry., 16 1. C. C. 425. 
 [996] 
 
Procedure Before the Commission [ § 1101 
 
 The Commission without having m-ged the plaintiffs to go 
 forward may dismiss the complaint for lack of diligent 
 prosecution.^^ But where it appears that the failure to 
 appear was in not getting notice in time, the case may be 
 continued.*" According to the practice usually, however, 
 appearance on day of hearing is insisted on." Complaint 
 was dismissed in one case where the position as taken by 
 complainant obviously constituted an abandonment of his 
 complaint.** Clearly where there is no appearance in a 
 reparation proceeding, the case will be dismissed.*^ But 
 also where there is a failure to appear and show unreason- 
 ableness, the complaint will usually be summarily dis- 
 posed of in the same way.'" 
 
 § 1101. Dismissal of the complaint. 
 
 In formal proceedings before the Commission complaints 
 must be prosecuted with reasonable diligence, and when a 
 case has been formally assigned for hearing on a day cer- 
 tain, the parties must appear and present such evidence 
 as they may wish to offer in support of their contentions, 
 or, in advance of the date set, request postponement on 
 stated groimds, shoAving good and sufficient cause for de- 
 lay.'^ It would be the usual practice to order dismissal 
 on motion of both the complainant's and defendant's at- 
 torneys.'^ But a complaint may not be dismissed without 
 the consent of the Commission, as the public character of 
 these proceedings prevents them from being dismissed 
 simply on stipulation of the parties.'^ A dismissal will be 
 ordered where no complaint is made against reasonableness 
 
 '^ Ocheltree Grain Co. v. Texas & " Wakita Coal & S. Co. v. Atchison 
 
 P. R. R., 18 1. C. C. 412. & St. P. Ry., 15 1. C. C. 533. 
 
 8« Patten v. Wisconsin Central «» Isbell-Brown Co. v. M. C. R. R., 
 
 Ry., 14I.C.C.189. 15 I. C. C. 616. 
 
 " Producers' Pipe Line Co. v. St. " Producers' Pipe Line Co. v. St. 
 
 L., I. M. & S. Ry. Co., 12 I. C. C. L., I. M. & 8. Ry., 12 I. C. C. 186. 
 
 186. '2 Wilhoit V. Missouri P. R. Co., 12 
 
 *8 Ringfiaher MiU & Elevator Co. I. C. C. 137. 
 
 V. Chicago, R. I. & P. R., 11 1. C. C. " In re Advance in Rates, Western 
 
 220. Case, 20 1. C. C. 307. 
 
 [ 997 ] 
 
§ 1102] Raileoad Rate Regulation 
 
 of the specified through rate." Where facts, circumstances 
 and conditions bearing upon reasonableness of rates in issue 
 are not sufficiently developed to afford a proper basis for 
 satisfactory determination, the case will be dismissed.^* Dis- 
 missal without prejudice may be ordered where the record 
 shows no clear basis for an order changing rates.^" Likewise 
 the case would properly stand for dismissal upon a readjust- 
 ment of the tariffs being made to the satisfaction of the 
 complainants.^^ Dismissal as to a defendant shown not to 
 be involved in the issues is very common.'* If complainant 
 by formal pleading admits reasonableness, the complaint 
 will usually be dismissed.'^ But it is considered improper 
 practice to decline at an earlier stage informal adjustment, 
 and then admit complaint in answer in formal proceedings 
 subsequently.^ 
 
 § 1102. Stay of proceedings. 
 
 The Commission may in a proper case stay the proceed- 
 ings and hold the case open until a future time. Where a 
 similar case had been heard by the Commission and an 
 order made and a petition to enforce the order was pend- 
 ing in the courts, the present case was stayed until final 
 determination of the petition in the courts.^ And so 
 where it seemed best the Commission having indicated its 
 view of the question, recommended the carriers concerned 
 to amend their tariffs in accordance with the opinion so 
 expressed, and meanwhile held the case open for future 
 application of the parties.^ It may often seem to the 
 
 " Morgan v. M., K. & T. R. Co., » Zellerbach Paper Co. v. Atchiaon, 
 
 12 1. C. C. 525. T. & S. P. Ry., 16 I. C. C. 128. 
 
 '5 Shiel & Co. V. Illinois C. R. Co., i Davenport Pearl Button Co. v. 
 
 12 I. C. C. 210. Chicago, B. & Q. R. R., 17 I. C. C. 
 
 =« Dallas Freight Bureau v. M., K. 193. 
 
 & T. R. Co., 12 1. C. C. 427. = Southern Paint & G. Co. v. Lake 
 
 »' McRae Grocery Co. v. Southern Erie & W. R. R., 6 I. C. C. Rep. 284. 
 
 R. Co., 12 I. C. C. 83. ^ Paine Bros. & Co. v. Lehigh 
 
 9» Dallas Freight Bureau v. G., C. Valley R. R., 7 I. C. C. Rep. 218; and 
 
 & S. F. R., 12 1. C. C. 223. see Rea v. Mobile & O. R. R., 7 I. C. 
 
 C. Rep. 43. 
 
 [998] 
 
Procedube Before the Commission [ § 1103 
 
 Commission the best course of proceeding to delay further 
 action for an adjustment by the parties.^ And if the 
 question of jurisdiction is raised it must always be con- 
 sidered before the merits of the controversy are deter- 
 mined.* But an order may be entered where no objection 
 is made by the defendants of defect in parties.' Where a 
 carrier at the hearing agrees to conform to the desires of 
 the Commission, the usual practice is that no order will 
 be made at the time; but the case will be continued to 
 give the carrier an opportunity to remove the cause of 
 complaint.' Thus in the express cases no order was en- 
 tered pending opportunity for express companies to file 
 tariffs in accordance with suggestions made.* But no case 
 under any such circumstances can be said to have been 
 discontinued until final disposition." 
 
 § 1103. Satisfaction of complaint. 
 
 Where a complaint has been satisfied, an order requiring 
 a continuance of present nondiscriminatory practices will 
 not be considered necessary.'" A complaint alleging undue 
 discrimination against a city in that it was deprived of 
 the benefit of joint rates cannot be sustained where the 
 joint rates to the cities alleged to have been unduly pre- 
 ferred have been canceled." The Commission will usually 
 permit a case to be settled through the readjustment of 
 tariffs, showing considerable reductions in the rates com- 
 plained of to the satisfaction of complaints.'^ Mere agree- 
 ment of parties with respect to a rate, or mere subse- 
 
 * Weleetata Light & Water Co. v. Unlawful Transportation Charges, 
 
 Ft. S. & W. R. R. Co., 12 1. C. C. 503. 6 I. C. C. Rep. 624. 
 
 ' Mattison v. Pennsylvania Co., * Douglas Shoe Co. v. Adams Ex- 
 
 23 I. C. C. 233. press Co., 19 I. C. C. 539. 
 
 6 Cattle Raisers' Ass'n of Texas v. ' Spokane v. N. P., 23 I. C. C. 454. 
 
 G. H. & S. A. Ry., 12 I. C. C. "Humboldt S. S. Co. v. White 
 
 20. Pass & Yukon Route, 25 I. C. C. 136. 
 
 ' Hot Springs v. Western N. C. R. " Baker Commercial Club v. O. 
 
 R., 1 Int. Com. Rep. 316; Holbrook W. R. R. & No. Co., 25 I. C. C. 281. 
 
 V. St. Paul, M.&M.Ry., lint. Com. " MgRae Grocery Co. et al. v. 
 
 Rep. 323, 1 I. C. C. 102; Re Alleged Southern Ry., 12 1. C. C. 83. 
 
 [999] 
 
§ 1104 ] Railroad Rate Regulation 
 
 quent reduction of a rate is not a sufficient ground for a 
 finding of unreasonableness or undue prejudice; for dam- 
 ages will not be awarded merely upon a showing that the 
 carrier is willing to honor a claim. ^^ Where a carrier is 
 willing to award reparation on the basis of an out-of-line 
 rate, which rate defendant is unwilling to maintain in the 
 future, damages will be denied.^* And generally speaking 
 when an adjustment is satisfactorily made to all parties in 
 interest the case usually will be dismissed by the Commis- 
 sion.^^ And especially where an agreement is reached by 
 the parties as to future rates, it will not be difficult to get 
 the complaint dismissed.^* The complaint having been 
 satisfied by the restoration of the rate previously in force 
 and the withdrawal of the rate complained of by tariff 
 duly filed, will usually be on appHcation of complainants, 
 dismissed.^' 
 
 § 1104. Conditions of granting reparation. 
 
 The awarding of damages does not necessarily follow 
 the reduction of a rate.^^ Nor is fixing a rate for the 
 future a prerequisite to the award of reparation." No 
 reparation will be granted, though the Commission finds 
 that the rates are unreasonable, unless it be found that 
 the rates were unreasonable at the time they were paid.^" 
 Nor where the injury for which reparation is asked oc- 
 curred through the fault of the complainant.^^ And where 
 the claim for reparation has already been settled between 
 the parties, the Commission will not generally take further 
 action. 2^ Where a complaint as filed did not ask repara- 
 
 " Esson Granite Co. v. S. Ry., 26 >« Minneapolis Steel & Machinery 
 
 I. C. C. 449. Co. V. C, M. & St. P. Ry., 26 I. C. C. 
 
 » Chaffin Coal Co. v. C, M. & St. 193. 
 
 P. Ry., 24 1. C. C. 321. " Steinfeld & Co. v. I. C. R. R., 
 
 " Watson Co. v. Lake Shore & 20 I. C. C. 12. 
 
 M. S. Ry., 16 1. C. C. 124. '" Grain Shippers' Ass'n v. IlUnois 
 
 '» Montgomery Freight Bureau v. Cent. R. R., 8 I. C. C. Rep. 158. 
 
 Western Ry. of Ala., 15 I. C. C. 199. " Gardner v. Southern R. R,, 10 
 
 " T. H. Bunch Co. v. Chicago, I. C. Rep. 342. 
 
 R. I. & P. R., 11 1. C. C. 377. " Stahl v. Oregon Ry. & Nav. Co., 
 
 [ 1000 ] 
 
Procedure Before the Commission [§1105 
 
 tion, and there being no evidence touching specific ship- 
 ments, that feature of the case will not be considered, al- 
 though a motion to that effect is noted in the record of the 
 hearing. 2' Reparation may be awarded in supplemental 
 petition, although there is a general rule against awarding 
 reparation piecemeal.^* It is to be emphasized that 
 reparation on shipments previously made will not be or- 
 dered as a matter of course, even where the Commission 
 finds that the ends of justice require the reduction of rate 
 complained of for the future. ^^ 
 
 § 1105. Scnxtiny of reparation agreements. 
 
 So great is the fear that adjustments through the process 
 of submitting to reparation may be used as a cover for 
 discrimination that generally speaking a willingness to pay 
 by the carrier is no grOund for awarding reparation to the 
 shipper.^* The Commission cannot base its findings or 
 apply to the past a privilege merely because the carrier is 
 willing.^'' The rule is, therefore, that no reparation will 
 be awarded in the absence of specific proof as to each car 
 involved. 2* It is fundamental with the Commission that 
 it will not award reparation in absence of proof suflScient 
 to carry conviction of the wrong. ^^ Certainly if it appears 
 that the award to which the carrier assents is to carry out 
 a deal to give a rate lower than schedule, the Commission 
 will not confirm it.^" For to sanction such a prior under- 
 standing would plainly be to create a cover for discrimina- 
 tion. '' And, therefore, as an evidence of good faith, if the 
 
 1 Int. Com. Rep. 314; Sayles v. " Qady Lumber Co. v. M. P. Ry., 
 
 New York, N. H. & H. R. R., 9 1. C. C. 19 I. C. C. 12. 
 
 Rep. 492. 28 Murphy Bros. v. New York C. 
 
 2» Atchison v. St. L., I. M. & S. Ry., & H. R. R. R., 17 I. C. C. 457. 
 
 22 I. C. C. 131. =' Taylor v. Missouri Pacific Ry., 
 
 " Partridge Co. v. B. & M. R. R., 15 I. C. C. 165. 
 
 19 I. C. C. 551. '"Crowell & S. Lumber Co. v. 
 
 "Farmers' Warehouse Co. v. L. Texas & P. R. R., 17 I. C. C. 
 
 & N. R. R., 12 I. C. C. 457. 333. 
 
 ^ Pabst Brewing Co. v. Chicago, " Amour Car Line v. Southern 
 
 M. & St. P., 17 I. C. C. 359. Pacific, 17 I. C. C. 461. 
 
 [ 1001 ] 
 
§ 1106] Railroad Rate Regulation 
 
 carrier admits unreasonableness, it must file new rates as 
 prerequisite to reparation.'^ And if these are only to be 
 in effect temporarily to work through the agreed repara- 
 tion, the whole scheme will be investigated further. '^ 
 However, if the Commission is satisfied as to the bona fides 
 of the agreement, the stipulation of parties will be ap- 
 proved.^* 
 
 § 1106. Parties given opportunity to be heard. 
 
 Proceedings on complaint of a party take the form of 
 judicial proceedings. Thus a reasonable opportunity will 
 be given for the parties to be heard. ^'^ So where a railroad 
 submits a shipper's claim for carload rating on a mixed 
 carload to the Commission, it will be treated as a com- 
 plaint and answer, and the cause will proceed judicially.'* 
 If parties have had their day in court, they caimot resist 
 reparation. '^ But if no other manufacturers have joined 
 in this complaint, or made independent complaint, it is 
 possible that they may be materially affected by a dis- 
 turbance of adjustment that has continued for so many 
 years.'* And generally speaking if insufficient carriers are 
 named for the Commission to undertake to settle broad 
 questions the case will not be prosecuted further, for the 
 time being at all events.'*" The Supreme Court is nowplainly 
 insistent that all parties before the Commission must be 
 fully apprised of the evidence submitted or to be considered 
 and must be given opportunity to cross-examine witnesses 
 and to inspect documents and to offer evidence in explana- 
 tion and rebuttal. '^ In no other way consistently with 
 
 ^^Vemis v. St. Louis, I. M. & S. =« Roth v. Texas & P. Ry., 9 1. C. C. 
 
 Ry., 15 I. C. C. 136. Rep. 602. 
 
 ^' Holcomb, Hayes & Co. v. lUi- " Kindelon & Co. v. Southern 
 
 nois C. R. R., 13 I. C. C. 16. Pacific, 17 I. C. C. 251. 
 
 " Joice & Co. V. Illinois Central " National Syrup Co. v. C. & N. 
 
 Ry., 15 I. C. C. 239. W. Ry., 28 I. C. C. 673. 
 
 "* Business Men's Ass'n v. Chicago '"^ Omaha Grain Exchange v. C, 
 
 & N. W. Ry., 2 Int. Com. Rep. 48, R. I. & P. Ry., 28 I. C, C. 680. 
 
 2 I. C. C. 52. '' United, States v. B. & O. S. W. 
 
 Ry., 226 U. S. 14, 27 Sup. Ct. 648. 
 
 [ 1002 ] 
 
Procedure Before the Commission [ § 1107 
 
 what we consider the course of the administration of 
 justice can a party maintain its rights or make out its 
 defense.^^" 
 
 § 1107. Hearing duly notified indispensable. 
 
 As has been seen in a former chapter, the Commission 
 is not invested with authority to find any rate unreason- 
 able except after fuU hearing/" The pohcy underlying 
 the section giving the Commission power to revise rates 
 is that rates established by carrier cannot be condemned 
 unless upon full hearing they shall be found unreasonable/' 
 The Commission, therefore, has jurisdiction to deal only 
 with those carriers which are parties to the proceedings/^ 
 And no order entered against a carrier that has not been 
 cited to appear at the hearing/^ The Commission will not 
 determine an important question of differentials in a gen- 
 eral adjustment of rates in a case where only one carrier, 
 operating over but a part of the through route to Atlantic 
 ports, is defendant/* Discussions of substitution of ton- 
 nage at transit points, and of transit rules, reports there- 
 imder, and policing thereof would be pertinent only in a 
 general investigation/' And reasonableness of extra 
 charges will not be considered where petition contains no 
 allegations in respect thereto/* It follows that the Com- 
 mission cannot determine what rates are reasonable for 
 the transportation of other commodities or rates on the 
 same commodities from other points, upon a complaint 
 dealing with specific kinds of commodities from a particu- 
 lar locality/^ 
 
 ""^ Interstate Commerce Commis- ■" Baker Commercial Club v. O. W. 
 
 sion V. L. & N. Ry., 227 U. S. 88, R. R. & N. Co., 25 I. C. C. 281. 
 
 33 Sup. Ct. 185. " Board of Trade of Chicago v. 
 
 « Douglas & Co. V. C, R. I. & P. I. C. C, 26 I. C. C. 545. 
 
 Ry., 21 I. C. C. 541. " In re Advances on Logs, 24 
 
 " Anadarko Cotton Oil Co. v. ' I. C. C. 683. 
 
 A., T. & S. F. Ry., 20 I. C. C. « Lesinsky v. A., T. & S. F. Ry., 
 
 43. 24 I. C. C. 620. 
 
 « GriflSng V. C. & N. W. Ry., " Milburn Wagon Co. v. L. S. & 
 
 25 I. C. C. 134. M. S. Ry., 22 I. C. C. 93. 
 
 [ 1003 ] 
 
§ 1108 ] Railroad Rate Regulation 
 
 § 1108. Requisites as to hearings. 
 
 As the Act reads, it is, therefore, a ILtnitation upon its 
 jurisdiction that the Commission cannot prescribe a rate 
 without investigation and hearing.^* And the Commission 
 has often pointed out that no order can be made until 
 after a full hearing as provided in section 15.^' The 
 reasonableness of rates cannot be considered except upon 
 a proceeding which properly puts them in issue. ^^ And 
 damages are awarded upon the facts established upon the 
 hearing, and not upon the allegations of the complaint." 
 The Commission can make findings only upon such issues 
 as are clearly raised by the complaint, while weighing all 
 pertinent facts and testimony adduced.*^ Where the 
 Commission has suspended rates in one territory upon 
 hearing, it cannot pass upon the reasonableness of rates 
 in other territory, none of the carriers in the latter terri- 
 tory having been made parties.^' If there are neither 
 sufficient parties nor sufficient information before the 
 Commission to enable it to pass upon the question of 
 issues involved it will not pass upon the through rates 
 which would be directly affected." Where a complaint 
 failed to point out any discrimination and did not ask 
 that any discrimination be corrected, the Commission will 
 decline to consider the question of discrimination, although 
 the petition generally alleged a violation of the Act.^" 
 The determination of broad questions should be in some 
 comprehensive proceeding to which the parties in interest 
 can be made parties. ^^ A case involving local rates will, 
 therefore, usually be ordered to be heard before at a cen- 
 
 « In re Express Rates, 28 I. C. C. ^' Sinclair & Co. v. C, M. & St. 
 
 132. P. Ry., 21 I. C. C. 490. 
 
 « Augusta & Savannah Steam- '^ In re Advances in Rates on Loco- 
 boat Co. V. O. S. S. Co. of Savannah, motives and Tenders, 21 I. C. C. 103. 
 26 I. C. C. 380. " In re Advances of Rates on 
 
 ™ Douglas & Co. V. C, R. I. & Livestock, 21 I. C. C. 119. 
 
 P. Ry., 21 I. C. C. R. 541. ''United States Leather Co. v. 
 
 " Beekman Lumber Co. v. M. C. S. Ry., 21 I. C. C. 323. 
 
 R. R., 21 I. C. C. R. 276. '" In re Advances in Class Rates, 
 
 27 I. C. C. 268. 
 
 [ 1004 ] 
 
Procedure Before the Commission [ § 1109 
 
 tral point in the territory immediately affected by the 
 rates. ^^ 
 
 § 1109. Course of the proceedings. 
 
 It is, of course, elemental that the Commission must 
 observe the requirements of the Act for notice and hear- 
 ing; and keep to the provisions of the statute as to process 
 and procedure.^^ If the petition is not specific, though 
 plainly sufficient to constitute the basis for an award of 
 damages, the defendants are entitled, before the hearing, 
 to a specification showing in detail the amounts for which 
 recovery is sought. ^^ Upon a complaint alleging undue 
 preference, it was held that the question of the reasonable- 
 ness per se of rates is automatically imported into a case 
 through the suspension of the tariffs.®" As each case must 
 be determined on its own merits, the Commission cannot, 
 on the record in this case, determine what rule or practice 
 should obtain at milling-in-transit points generally through- 
 out the country.*^ Notice of complaint need only be 
 given to those directly concerned, not to those remotely 
 interested.*^ The Commission has tried to simplify its 
 practice and procedure, without permitting technical 
 matters to interfere with substantial results.*^ Though it 
 appeared at the hearing that the joint through rate was 
 in excess of the sum of the locals, the Commission held 
 that the amount of the through rate was not in issue upon 
 a complaint seeking damages on ,the basis of an unpub- 
 lished division of the through rate."* Upon complaint of 
 an overcharge, the Conmiission, on its own motion, may 
 
 " Delaware State Grange v. New v. St. L., I. M. & S. Ry., 21 I. C. C. 
 
 York, P. & N. R. R., 2 Int. Com. 651. 
 
 Rep. 187, 2 I. C. C. 309. " LouisvUle & N. R. R. v. Inter- 
 
 '* Stone & Meyers Co. v. Louis- state Commerce Commission, 184 
 
 ville & W., 14 I. C. C. 199. Fed. 118. 
 
 '» Cattle Raisers' Ass'n v. Chicago, *' Cincinnati & Columbus Traction 
 
 B. & Q. R. R., 10 I. C. C. Rep. 83. Co. v. B. & O. S. W. R. R., 20 1. C. C. 
 
 «» Douglas & Co. V. C, R. I. & 486. 
 
 P. Ry., 21 I. C. C. 97. «< Beekman Lumber Co. v. St. L. 
 
 »' Brook Rauch Mill & Elevator Co. & S. F. R. R., 21 1. C. C. 270. 
 
 [ 1005 ] 
 
§1110] Railroad Rate Regulation 
 
 set the case down for further hearing, and found the rate 
 unreasonable, though there was no overcharge."^ Oral 
 argument is allowed in cases affecting rates and practices 
 if requested when testimony closed."" And if briefs are 
 submitted it is to be noted that the parties cannot them- 
 selves extend the time for filing briefs by stipulation be- 
 tween themselves, as cases before the Commission are not 
 analogous to private htigation."^ 
 
 § 1110. Limitations of actions. 
 
 The statute of limitations contained in the Act bars a 
 reparation claim on shipments which have been delivered 
 to the complainant more than two years prior to the filing 
 of the complaint."* And conversely the right to reparation 
 being secured to shippers for two years by the Act, the 
 Commission cannot qualify that right by barring a com- 
 plainant for laches within that time, or by demanding that 
 the proof shall be conclusive."' The Act provides that no 
 order for reparation shall be made unless the claim is filed 
 with the Commission within two years from the time the 
 cause accrues.™ Without regard to the date of payment 
 of charges, the cause of action of a shipper accrues when 
 a shipment is delivered.'^ To be exact, claims presented 
 
 «= Oster Bros. v. M. L. & T. R. R. ™ National Wool Growers' Ass'n 
 
 & S. S. Co., 21 I. C. C. 511. V. O. S. L. R. R., 25 I. C. C. 675. 
 
 ^^ UUman v. Adams Express Co., " Arkansas Fertilizer Co. v. St. 
 
 14 I. C. C. 585. L., I. M. & S. Ry., 25 I. C. C. 
 
 ^' Ullman v. Adams Express Co., 266. 
 
 14 I. C. C. 585. Claims for damages held to be bar- 
 
 Quare, whether the two year limita- red because two years had elapsed 
 
 tion on reparation suits applies to since the delivery of the goods to 
 
 enforcement suits. Lynde v. D. L. the consignee, although within two 
 
 & W. Hy., 170 Fed. 847. years- of the filing of the complaint 
 
 "' St. Louis Blast Furnace Co. v. some of the charges were paid. 
 
 V. Ry., 24 I. C. C. 360; see also Ana- Standard Oil Co. v. C, T. T. R. R. 
 
 conda Copper IVIining Co. v. C. & Co., 21 I. C. C. 460. Each item is 
 
 E. R. R., 19 I. C. C. 592. subject to being barred upon the 
 
 *' Thomspon Lumber Co. v. Inter- running of the two years against it. 
 
 state Commerce Commission, 193 National Refining Co. v. A., T. & 
 
 Fed. 682, S. F. Ry., 8 I. C. C. 389. 
 [ 1006 ] 
 
Procedure Before the Commission [ § 1111 
 
 to the Commission more than two years subsequent to 
 the deUvery of the shipment to the consignee are barred 
 by the statute of limitations by the terms of the ActJ^ 
 The filing of each claim is, in essence, an independent pro- 
 ceeding on the part of that complainant, and the statute 
 of limitations must run from the date of the filing in each 
 individual case.'' Despite promises by carriers not to 
 take advantage of the period of limitation in the Act, the 
 Commission will not take action after that period has 
 passed/* When reparation is for the first time asked by 
 amendment, the time of the amendment determines the 
 limitation.^'^ The filing of an informal complaint by a 
 consignee stops the running of the statute for the benefit 
 of the consignor, though the latter did not file his formal 
 complaint within two years from the time the cause of 
 action accrued.'" 
 
 § 1111. Dismissal when order unnecessary. 
 
 When upon investigation of a complaint the carrier finds 
 that the grievance once existed, but has been removed by 
 the carrier, the petition will be dismissed." This is true 
 
 ''' Coffers Box Lumber Co. v. will not be awarded unless complaint 
 
 C. & N. W. Ry., 25 I. C. C. 249. is filed or rate complained of is re- 
 
 '^ In re Advances on Livestock, duced within six months after traffic 
 
 28 I. C. C. 332; see also Beekman moves is confined to informal matters. 
 
 Lumber Co. v. St. L. & S. F. R. R., Riverside Mills v. G. R. R., 20 I. C. 
 
 21 I. C. C. 270. C. 423. But the running of the 
 
 '■■ Werner Saw Mill Co. v. lUinois statute is not barred by presentation 
 
 Central R. R., 17 I. C. C. 388; see of an informal complaint, where 
 
 also Meeker v. Lehigh V. R. R., complainant failed to present formal 
 
 23 I. C. C. 480. complaint until five years later. 
 
 " East St. Louis Walnut Co. v. Dillon Coal & Transfer Co. v. O. S. 
 
 St. Louis S. W. Ry., 17 I. C. C. 582. L. R. R. Co., 28 I. C. C. 91. 
 But see also Montana Ice. Co. v. D., " Fulton v. Chicago, S. P., M. & 
 
 L. & W. Ry., 21 I. C. C. 45. D. R. R., 1 Int. Com. Rep. 375, 1 
 
 ™ Youngblood v. T. & P. Ry., 21 I. C. C. 104; Lincoln Board of 
 
 I. C. C. 569; see also Gamble-Robin- Trade v. Union P. R. R., 2 Int. 
 
 son Commission Co. v. St. L. & S. Com. Rep. 101, 2 I. C. C. 229; 
 
 F. Ry., 119 I. C. C. 114. Harris v. Duval, 2 Int. Com. Rep. 
 
 The rule followed by the Com- 514; Pennsylvania Co. v. Louisville, 
 
 mission that ordinarily reparation N. A. & C. R. R., 2 Int. Com. Rep. 
 
 [ 1007 ] 
 
§ 1112 ] Railroad Rate Regulation 
 
 though the grievance was removed after the beginning of 
 the litigation; and this rule applies even after the hearing 
 has been hadJ^ Similarly a complaint will be dismissed 
 as to one carrier out of several defendants where it appears 
 that such carrier did not participate in the rates in ques- 
 tionJ' Under section 13 of the Act a carrier has a definite 
 locus penitenticB in order to determine whether it will yield 
 to the demand made or contest it; and the carrier has the 
 right to have the complaint so stated as to afford it the 
 necessary information to enable it to determine whether 
 to request the authority of the Commission to satisfy the 
 demand or to make a formal answer.*" 
 
 Topic D. Evidence and Burden of Proof 
 
 § 1112. Rules of evidence. 
 
 Generally speaking the ordinary rules of evidence are 
 enforced in proceedings before the Commission; thus the 
 rule as to parol evidence appears to be enforced. So terms 
 of art, or terms peculiar to any occupation or business, 
 used in a classification sheet to designate the product of a 
 particular employment, are supposed to be understood in 
 that employment; and it is not competent for railroad 
 experts, when the meaning of the classification is ques- 
 tioned, to testify in what sense they are imderstood in 
 classification circles.*^ On the same general principle, un- 
 authorized declarations of a depot agent, implying that a 
 tank car which has returned from one long journey is in 
 
 603; Rawson v. Newport News & v. Minneapolis & S. L. Ry., I Int. 
 
 M. V. R. R., 2 Int. Com. Rep. 626; Com. Rep. 630; Boyer v. Chesapeake, 
 
 Re Tariffs & Classifications of Pa. O. & S. W. Ry., 7 I. C. C. Rep. 55. 
 
 R. R., 7 I. C. C. Rep. 177; Paine "Chicago Livestock Exchange v. 
 
 V. Lehigh Valley R. R., 7 I. C. C. Chicago G. W. Ry., 10 I. C. C. 
 
 Rep. 218; Montell v. Baltimore & Rep. 428. 
 
 O. R. R., 7 I. C. C. Rep. 412; Wichita ™ Missouri T. K. Shippers' Ass'n 
 
 V. Atchison, T. & S. F. R. R., 9 I. v. A., T. & S. F. R. R., 11 I. C. C. 
 
 C. C. Rep. 507. 411. 
 
 ™ Michigan Box Co. v. Flint & P. " Hurlburt v. Lake Shore & M. S. 
 
 M. R. R., 6 I. C. C. Rep. 335; see R. R., 2 Int. Com, Rep. 81, 2 L C. C 
 
 also Manufacturers & Jobbers' Union '122, 
 
 [ 1008 ] 
 
Procedure Before the Commission [ § 1113 
 
 a safe condition to be loaded and started on another long 
 run, are not binding upon the railway company .^^ -phe 
 usual procedure is for witnesses who are officers and agents 
 of the carriers to come prepared with sworn statements 
 taken from the books as to what they actually show and 
 examination and cross-examination verifies these state- 
 ments and shows what supplements, if any, they need.*^ 
 There can be no findings upon evidence so vague and un- 
 satisfactory that no definite finding could safely be pred- 
 icated thereon.*^ But the Commission is more free than 
 a court would be to consider "best knowledge and behef" 
 evidence.*^ 
 
 § 1113. Res adjudicata. 
 
 While Commission is not bound by the doctrine of stare 
 decisis or res adjudicata, a decision recently announced 
 will be given full weight in the determination of the rea- 
 sonableness per se of rates later in controversy.** Stare 
 decisis and res adjudicata do not govern the Commission, 
 but the policy behind all these principles is one which can- 
 not be ignored.*^ The Commission as a practical matter 
 will be concluded by a decision in prior case, unless it was 
 founded on error or on conditions that have since under- 
 gone change.** Oftentimes a plea of estoppel will be held 
 not to be good, but usually it will be found in such cases 
 that the circumstances are dissimilar.*' But where the 
 circumstances are appropriate the contention will generally 
 be successful that the issues involved in a particular pro- 
 ceeding were decided in a previous case, and are, there- 
 
 82 Michigan Congress Water Co. v. C, B. & Q. R. R., 20 I. C. C. 416. 
 
 V. Chicago & G. T. R. R., 2 Int. *= Commercial Club of Superior v. 
 
 Com. Rep. 428, 2 I. C. C. 594. G. N. Ry., 24 1. C. C. 96. 
 
 " Rice V. Cincinnati, W. & B. R. " Schmidt & Sons v. M. C. R. R., 
 
 R., 2 Int. Com. Rep. 584, 595, 3 23 I. C. C. 684. 
 
 1. C. C. 186. ^ Flour City S. S. Co. v. L. V. R. 
 
 "lola Portland Cement Co. v. R., 24 I. C. C. 179. 
 
 M., K. & T. Ry., 20 I. C. C. 91. *' National Hay Ass'n v. M. C. 
 
 «5 Clinton Bridge & Iron Works R. R., 19 I. C. C. 34. 
 
 64 [ 1009 1 
 
§ 1114] Railroad Rate Regulation 
 
 fore, res adjudicata.^ It should be noted that contracts 
 and tariffs filed with the Commission under the Act are 
 likely to be considered, although not specifically intro- 
 duced in evidence at the hearing.*' And the findings of 
 the Commission in a former case are conclusive without 
 requiring further evidence.'^ If put in evidence the Com- 
 mission will always give due and respectful consideration 
 to decision of State Commission.*' 
 
 § 1114. Insufficient grounds for findings. 
 
 The Commission is clear that the reasonableness of 
 railroad rates cannot be proven by categorical answers 
 by a witness stating simply his opinion as to whether the 
 rates now charged are unreasonable.*^ Thus a general 
 statement that cost of conducting terminals has increased 
 and more revenue is needed is insufficient.*^ It is not 
 enough to have the president and traffic manager testify 
 that, based upon their best judgment and experience, they 
 considered present rates too low and that proposed rates 
 would be reasonable.** A statement filed showing the 
 cost of operation can have little weight when no witness 
 is qualified to explain it.*'' In one proceeding an exhibit 
 was introduced containing cumulative financial, operating, 
 and traffic data for roads which were not parties to the 
 case and did not participate in the movement involved; 
 and the Commission naturally enough said that the bear- 
 ing of these data upon the controversy before it was not 
 
 ™ Kates on Fresh Meats and consin v. C. & N. W. Ry., 16 I. C. C. 
 
 Packing-House Products, 26 I. C. C. 85. 
 
 154. 9* People's Fuel & Supply Co. v. 
 
 " Boston Fruit & P. Exch. v. New G. T. W. Ry., 27 1. C. C. 24. 
 
 York & N. E. R. R., 3 Int. Com. "^ Detroit Switching Charges, 28 
 
 Rep. 493, 4 I. C. C. 664; and see Re I. C. C. 494. 
 
 Rates and Charges on Food Prod- ^ Louisville & Nashville Railroad 
 
 ucts, 3 Int. Com. Rep. 151, 155, 4 Coal and Coke Rates, 26 I. C. C. 
 
 I. C. C. 116. 20. 
 
 '^ Fels & Co. V. Penna. Ry., 23 '' Lumber from Louisiana to 
 
 I. C. C. 483. North Atlantic Points, 20 I. C. C. 
 
 " Railroad Commission of Wis- 186. 
 
 [ 1010 ] 
 
Procedure Before the Commission [ § 1115 
 
 apparent.'^ Certainly it is not to be expected that an 
 order condemning existing rates, awarding reparation, and 
 establishing a rate for the futiu-e can be got from the 
 Commission on a mere complaint, without appearance or 
 evidence.'" Where there is available definite proof, as the 
 expense bills relating to the shipments, the case will be 
 dismissed if the complainant fails to bring them in to prove 
 his contentions.^ A case will, therefore, be dismissed if 
 the evidence is held insufficient to base a finding thereon.^ 
 
 § 1115. Proof of damage required. 
 
 Both the duty to make reparation and the amount of 
 reparation to be made must be established by evidence. 
 If the proof fails to establish either point satisfactorily the 
 suit will be dismissed without prejudice.' Or the case 
 may, in the discretion of the Commission, be continued for 
 further testimony.^ So proceedings before the Commission 
 against carriers for discriminations and preferences will 
 be stayed until final determination by the courts in suits 
 pending therein for the enforcement of an order of the 
 Commission, compliance with which by carriers operating 
 in the territory will remove the discriminations and pref- 
 erences complained of.^ It is obvious, however, that a 
 shipper declaring false value to secure reduced rate is 
 estopped, in case of loss or damage, from denying correct- 
 ness of value given." It should be remembered, however, 
 
 " Lumber Rates from Texas, etc., Castle v. Baltimore & O. R. R., 8 
 
 to Oklahoma and Missouri, 28 1. C. C. I. C. C. Rep. 333. 
 
 471. * Business Men's League of St. 
 
 '» Quammen & Austad Lumber Louis v. Atchison, T. & S. F. R. R., 
 
 Co. V. C, M. & St. P. Ry., 19 I. C. C. 9 I. C. C. Rep. 318; Richmond 
 
 110. Elevator Co. v. Pere Marquette 
 
 'Roper Lumber Cedar Co. v. R. R., 101. C. C. Rep. 629; Dennison 
 
 Chicago & N. W. Ry., 16 1. C. C. 397. L. & P. Co. v. Missouri, K. & T. Ry., 
 
 2 Moore v. D. & R. G. R. R. Co., 10 I. C. C. Rep. 337. 
 
 25 I. C. C. 1. * Southern Paint & G. Co. v. Lake 
 
 » Freeman v. Atchison, T. & S. F. Erie & W. Ry., 6 I. C. C. Rep. 
 
 R. R., 7 I. C. C. Rep. 202; Com- 284. 
 
 mercial Club of Omaha v. Chicago & « In re Express Rates, 28 I. C. C. 
 
 N. W. Ry., 7 I. C. C. Rep. 386; 132. 
 
 [ 1011 ] 
 
§1116] Railroad Rate Regulation 
 
 that the Act expressly provides that in case of proceed- 
 ings brought to reform rates for the failure, there shall be 
 no dismissal of the complaint by reason of a showing of 
 no damage to the complainant by present conditions. 
 
 § 1116. Presiimptions from voluntary continuance. 
 
 Voluntary continuance of a given rate for a long time 
 by a carrier, while not conclusive, creates a presumption 
 that the rate is reasonable.'' The presumption is in the 
 nature of an admission by the carrier, and therefore exists 
 only in a case where the carrier alters a long-existing rate 
 by raising it. If, on the other hand, the carrier volun- 
 tarily reduces a rate, in the absence of evidence of another 
 reason for the reduction, it will be presumed that the 
 former rate was unreasonably high.* This presumption, 
 however, being based on an admission of the carrier, is 
 confined to cases where the prior rate was estabhshed and 
 continued by the voluntary act of the carrier; it does not 
 attach in a case where such rates have been established 
 by carriers in compliance with the decision and order of 
 the Commission.^ A presumption of fact may be raised 
 by the disproportion of two rates upon comparison. So 
 where there is a great disproportion between two rates 
 on the sarhe road, or on different parts of the same line, 
 there is a presumption against the reasonableness of the 
 higher rate."* So where certain rates were artificially en- 
 hanced by a traffic association for the purpose of carrying 
 out an agreed division of territory between railroads, the 
 rates were presumably unreasonable. '^ In the same way 
 
 ' Re Export & Domestic Rates, 7 " Samuels v. Louisville & N. R. R., 
 
 I. C. C. Rep. 214; Holmes v. South- 4 Int. Com. Rep. 420; Troy Board of 
 
 ern R. R., 8 I. C. C. Rep. 561; Trade v. Alabama Midland Ry., 6 
 
 National Hav. Ass'n v. Lake Shore L C. C. Rep. 1; James v. Canadian 
 
 & M. S. R. R., 9 I. C. C. Rep. 264. Pac. R. R., 4 Int. Com. Rep. 274, 
 
 ' Holmes v. Southern R. R., 8 5 I. C. C. 612; Rea v. Mobile & O. 
 
 I. C. C. Rep. 561. R. R., 7 1. C. C. Rep. 43. 
 
 ' Proctor & Gamble Co. v. Cincin- " Freight Bureau v. Cincinnati, 
 
 nati, H. & D. R. R., 9 I. C. C. Rep. N. O. & T. P. R. R., 6 I. C. C. Rep. 
 
 440. 195. 
 
 [1012] 
 
Procedure Before the Commission [§1117 
 
 disproportion between rates on similar commodities will 
 lead to a presumption against the higher rate. So where 
 grain and grain products are classified alike, they are pre- 
 sumptively entitled to equal rates; and if a difference is 
 made by a carrier, it assumes the burden of sustaining it 
 by satisfactory evidence.'- Any presumption, from long 
 maintenance, that rate was sufficiently high may be 
 weakened by showing that past rate was induced by com- 
 petition. '' There is no presumption of law that rate con- 
 denmed as unreasonable or reduced by carrier, was un- 
 reasonable for any particular period in past." 
 
 § 1117. Admissions by making changes. 
 
 In the case of a competitive rate, however, long main- 
 tenance is not conclusive evidence that it was sufficiently 
 high." But, even so, there is a certain presumption that 
 rates largely the product of competition are reasonable 
 rates.'* Reduction to meet competitive rate via short 
 line, is not an admission of unreasonableness of former 
 rate." And as has been seen, voluntary reduction is not 
 of itself evidence of unreasonableness of former rates.'* 
 And the maintenance of rate for eight years is a strong 
 admission against carrier that higher rate would be un- 
 reasonable, unless explained.'" The existence of a lower 
 rate in the somewhat remote past does not necessarily 
 prove anything of value in ascertaining the reasonableness 
 of a rate existing to-day. ^° The long maintenance of an 
 
 '2 McMorran v. Grand Trunk Ry., " In re Advances in Rates, Eastern 
 
 2 Int. Com. Rep. 604, 3 I. C. C. 252. Case, 20 I. C. C. 243. 
 
 " Audley Hill & Co. v. S. Ry., 20 " American Cigar Co. v. P. & R. 
 
 I. C. C. R. 225; Commercial Club Ry., 20 I. C. C. 81; Georgia-Carolina 
 
 of Omaha v. S. P. Co., 20 I. C. C. Brick Co. v. S. Ry., 20 I. C. C. 148. 
 
 631. i*Carstens Packing Co. v. S. P. 
 
 " Anadarko Cotton Oil Co. v. Co., 20 I. C. C. 165; Maxwell v. W. 
 
 A., T. & S. F. Ry., 20 I. C. C. R. 43; F. & N. W. Ry., 20 I. C. C. 197. 
 
 Riverside Mills v. G. R. R., 20 I. C. " Arlington Heights Fruit Ex- 
 
 C. 423. change v. S. P. Co., 22 I. C. C. 149. 
 
 " Audley Hill & Co. v. S. Ry., 20 ^^ Enterprise Manufacturing Co. v. 
 
 I. C. C. 225. Ga. R. R., 12 1. C. C. 130. 
 
 [1013] 
 
§ 1118 ] Railroad Rate Regulation 
 
 adjustment of rates on different branches of a road will 
 be held to be practically an admissipn by the carrier that 
 the relation is a fair one." Where a reduction is made to 
 comply with an order of the Commission, such reduction 
 cannot be regarded as an admission that the former rate 
 was unreasonable.^^ The fact that a certain sum for a 
 transit service is fixed upon as the charge throughout 
 the country raises the presumption that this rate cov- 
 ers not only the cost of reconsignment service, but a 
 reasonable profit as well.^' Thus the fact that through- 
 out substantially the entire country malt is carried at 
 the same rate as barley creates a strong impression that 
 such rate is compensatory.^* An admission by parties 
 in interest may relieve a carrier of burden of going for- 
 ward with evidence. ^^ While a stipulation of the parties 
 may be accepted by the Commission, inasmuch as the 
 Commission is charged with the enforcement of lawful 
 rates, it cannot at all times accept the views of the parties 
 as to what in fact is the lawful rate between given points 
 on a specified commodity.^" 
 
 § 1118. Privilege against self-crimination. 
 
 A witness is protected by the constitutional provision 
 from being compelled to disclose the circumstances of his 
 offense, or the sources from which or the means by which 
 evidence of its commission, or of his connection with it, 
 may be obtained or made effectual for his conviction. 
 A statutory enactment must afford absolute immunity 
 against future prosecution for the offense to which a crim- 
 inating question relates, in order to supplant the constitu- 
 tional privilege of a person to refuse to be a witness 
 
 " Clearfield Lumber Co. v. C. & O. " Texas Brewing Co. v. A., T. & S. 
 
 Ry., 21 1. C. C. 211. F. Ry., 21 1. C. C. 171. 
 
 22 Victor Mfg. Co. V. S. Ry., 21 ^^ Wisconsin State MiUers' Ass'n 
 
 I. C. C. 222. V. C, M. & St. P. Ry., 23 I. C. C. 
 
 2' Detroit Traffic Ass'n v. L. S. & 494. 
 
 M. S. Ry., 21 I. C. C. 257. ^6 Germain Co. v. N. O. & N. E. 
 
 R. R., 171. C. C.22. 
 
 [1014] 
 
Procedure Before the Commission [ § 1119 
 
 against himself.^' The constitutional guaranty of protec- 
 tion against being compelled in any criminal case to be a 
 witness against one's self is sufficiently satisfied by the 
 provision of the Act as it now reads. In what is now the 
 leading case,^^ the Supreme Court said: "If, as was justly 
 observed in the opinion of the court below, witnesses 
 standing in Brown's position were at liberty to set up an 
 immunity from testifying, the enforcement of the inter- 
 state commerce law or other analogous Acts, wherein it is 
 for the interest of both parties to conceal their misdoings, 
 would become impossible, since it is only from the mouths 
 of those having knowledge of the inhibited contracts that 
 the facts can be ascertained. While the constitutional 
 provision in question is justly regarded as one of the 
 most valuable prerogatives of the citizen, its object is 
 fully accomplished by the statutory immunity, and we 
 are therefore of opinion that the witness was compellable 
 to answer." 
 
 § 1119. Adverse interest of witnesses not to be considered. 
 
 In proceedings like those before the Commission, which 
 are judicial in their nature, and fairly governed by the 
 rules and principles of law we have stated, it will not be 
 said to be a sufficient excuse for making a preliminary 
 order for a general production of books, papers, and docu- 
 ments, that petitioner is apprehensive that witnesses might 
 be unfriendly, and refuse to answer proper questions, or 
 to give proper information. It is not to be assumed in 
 advance that any railroad officer or agent, any more than 
 any other witness, will refuse to respond to any question 
 put to him, unless upon the advice of the counsel of the 
 company that the question is improper. The probabiUty 
 would seem to be that the testimony of witnesses (taken 
 at the railroad ofiices) would be as fully brought out by 
 
 " Counselman v. Hitchcock, 142 ^ Brown v. Walker, 161 U. S. 591, 
 
 U. S. 547, 35L. ed. 1110, 12Sup. Ct. 40 L. ed. 819, 16 Sup. Ct. 644, 5 
 195, 3 Int. Com. Kep. 816. Int. Com. Rep. 369. 
 
 [ 1015 ] 
 
§§ 1120, 1121 ] Railroad Rate Regulation 
 
 deposition, as at the open sessions of the Commission. ^^ 
 But it may well be doubted whether a railroad company 
 can safely rely, as evidence in its own behalf, upon a report 
 made and filed by it elsewhere.^" 
 
 § 1120. Testimony on both sides should be introduced. 
 
 It is not proper for railroad companies to withhold the 
 larger part of their evidence from the Commission, and 
 first adduce it in the Circuit Court in proceedings by the 
 Commission to enforce its order. The purposes of the 
 Act of Congress call for a full inquiry by the Commission 
 in the first instance. The Commission is an administra- 
 tive board, and the courts are only to be resorted to when 
 the Commission prefers to enforce the provisions of the 
 statute by a direct proceeding in the court, or when the 
 orders of the Commission have been disregarded.'^ If a 
 production of the books is necessary in any case, the 
 Commission would be disposed to hold the hearing, or at 
 least order the testimony to be taken, at such place as 
 would reduce the trouble and inconvenience, for it must 
 be apparent that the mere labor of searching out the en- 
 tries in these books and getting them together from the 
 vast accumulations of a railroad office, running through 
 long periods of time, would be enormous, and that their 
 production at a far distant point, for the purposes of a 
 hearing, in indefinite number and quantity, might be im- 
 justly oppressive; as well as very seriously inconvenient.'^ 
 
 § 1121. Production of books and papers. 
 
 An application fox the compulsory production of books 
 and papers '' to the Commission for subpoena duces tecum 
 
 ^ Bragg, Commissioner, in Rice v. v. Richmond & D. R. R., 2 Int. Com. 
 
 Cincinnati, W. & B. R. R., 2 Int. Rep. 193, 2 I. C. C. 304. 
 
 Com. Rep. 584, 3 I. C. C. 186. '^ Rice v. Cincinnati, W. & B. R. 
 
 «" Seaboard Air L. R. Co. v. R., 2 Int. Com. Rep. 584, 3 I. C. C. 
 
 Florida, 203 U. S. 261, 27 Sup. Ct. R. 186. 
 
 (U. S.) 109, aff'g s. c. 48 Pla. 129, 37 =' Rice v. Cincinnati, W. & B. R. 
 
 So. 314, and 48 Fla. 150, 37 So. 658. R., 2 Int. Com. Rep. 584, 3 I. C. C. 
 
 '' See Spartanburg Board of Trade 186. 
 
 [ 1016 ] 
 
Procedure Before the Commission [ § 1122 
 
 may be denied, as applicable to contracts and papers of 
 third persons not before the Commission, on the ground of 
 injustice that might be done such persons.^* The parties 
 may take depositions, by consent, in advance of the hear- 
 ing; or witnesses may be subpoenaed from the different 
 companies proceeded against, and a notice served with the 
 subpoena requiring the witness to furnish the published 
 rates and tariffs of such company, for a specified period, 
 and also requiring them to furnish statements of the 
 actual charges made and car facilities furnished, dm-ing 
 such period, to the persons named in the application, if 
 different from the published tariffs and schedules. The 
 Commission, having suggested these modes of procedure, 
 has added that if a railroad company, or its officers, should 
 refuse to furnish the proper evidence from its books in 
 some such reasonable manner as is here indicated, it 
 might then become necessary to resort to harsher proceed- 
 ings, either by an examination of its books by a repre- 
 sentative of the Commission, or by requiring the produc- 
 tion of the books by compulsory process, and if need be, 
 through the exercise of the authority of the courts, as 
 provided in the statute.'^ 
 
 § 1122. Burden of establishing case. 
 
 The complainant has the burden of establishing his 
 case. Where a claim for reparation is made in a complaint 
 of unreasonable railroad rates, the burden of proof is on 
 complainant to prove the rates unreasonable.^'' He has 
 also the burden of showing what a reasonable rate would 
 be, so as to show the excess." And so a railroad company 
 which seeks to release itself from its agreement to deUver 
 
 " Haddock v. Delaware, L. & W. 1 Int. Com. Rep. 375; Perry v. 
 
 R. R., 3 Int. Com. Rep. 302, 4 I. C. Florida, C. & P. R. R., 3 Int. Com. 
 
 C. 296. Rep. 740, 5 I. C. C. 97; BrowneU v. 
 
 "' Commissioner, in Rice v. Cin- Columbus & C. M. R. R., 4 Int. Com. 
 
 cinnati, W. & B. R. R., 2 Int. Com. Rep. 285, 5 I. C. C. 638. 
 Rep. 584, 3 I. C. C. 186. " Holmes v. Southern R. R., 8 
 
 '« Harding v. Chicago & A. R. R., I. C. C. Rep. 561. 
 
 [ 1017 ] 
 
§ 1123 ] Railroad Rate Regulation 
 
 goods for a specified freight rate, on the ground that the 
 contract is illegal because the rate specified is less than 
 that fixed by the Interstate Commerce Commission, has 
 the burden of proving that the contract was necessarily 
 unlawful, and not merely that it might have been so.^* 
 The burden of proof of the unreasonableness of a rate may, 
 therefore, be said to be clearly on the complainant.^^ 
 Where a complainant seeks to disturb a rate adjustment 
 of long standing he should take upon himself the burden 
 of establishing clearly the necessity for an investigation 
 and the reasonableness of its demand.^" In awards of 
 reparation there must be that degree of certainty and 
 satisfactory conviction in the mind and judgment of Com- 
 mission as would be necessary under well-established 
 principles of law as the basis for judgment in a court. *^ 
 The Commission cannot demand conclusive proof of mi- 
 reasonableness; the preponderance of evidence is, of course, 
 sufficient. ^^ Where rates were reduced at one point while 
 no reduction was made at a related point, the burden 
 would be upon the carrier to explain such adjustment.** 
 And the burden of proof is on the carrier to justify any 
 departure from the general rule prescribed by the Act by 
 showing that the circumstances and conditions attending 
 the long and short hauls respectively are substantially 
 dissimilar.** 
 
 § 1123. Burden of justifying advances. 
 Under the Act as amended in 1910 the burden is on the 
 
 '* Southern Pacific Co. v. Redding ** Re Louisville & Nashville R. Co., 
 
 (Tex. Civ. App.), 43 S. W. 1061. 1 Int. Com. Rep. 278, 1 I. C. C. 31; 
 
 '' Loftus V. Pullman Co., 19 I. C. Spartanburg Board of Trade v. 
 
 C. 102. Richmond & D. R. R., 2 Int. Com. 
 
 « Taylor v. M. P. Ry., 15 I. C. C. Rep. 193, 2 I. C. C. 304; Re Chicago, 
 
 165. S. P. & K. C. R. R., 2 Int. Com. Rep. 
 
 "Anadarko Cotton Oil Co. v. 137, 2 I. C. C. 231; Raworth v. 
 
 A., T. & S. Ry., 20 1. C. C. 43. Northern Pacific R. R., 3 Int. Com. 
 
 « Thompson Lumber Co. v. I. C. Rep. 857, 5 I. C. C. 234; PhilUps v. 
 
 C, 193 Fed. 682. LouisviUe & N. R. R., 8 I. C. C. Rep. 
 
 " In re Advances on Cement, 24 93. 
 I. C. C. 290. 
 
 [1018] 
 
Procedure Before the Commission [ § 1123 
 
 carrier to prove the reasonableness of advanced rates.'''' 
 Carriers must satisfy minds of Commission that advanced 
 rates are just and reasonable; under English Act burden 
 is on carrier to justify "the increase of the rate," but 
 under our Act of 1910 the burden is on the carrier to show 
 that the "increased rate" is reasonable/" The burden is 
 also on the carrier, under the fourth section as amended 
 in 1910, to justify a deviation from the long-short-haul 
 clause/^ To justify a departure from the fourth section 
 as amended the carrier must prove that by such deviation 
 no provision of the Act will be violated and that no in- 
 justice will be done to the intermediate point. ^* The 
 burden of proof being on the defendant, sufficient reason 
 must be shown why articles should be advanced in 
 official classification from second to first class. ^^ And the 
 withdrawal of through rates, leaving a higher conibina- 
 tion in effect, casts the burden of justifying this advance 
 upon the carriers.''" Likewise the withdrawal of propor- 
 tional rates, leaving higher local rates in effect, casts the 
 burden upon the carriers.**^ And the burden of justifying 
 increased minimum weight falls upon the carriers. ^^ A 
 carrier must prove that the advanced rate is reasonable 
 and that it does not result in unjust discrimination or 
 undue prejudice.''' The burden of proof to justify a sus- 
 pended advance being upon the carriers, if they fail to 
 sustain such burden the advance will not be permitted.^* 
 
 ■"^ In re Investigation of Advances ^' Davis Sewing Machine Co. v. 
 
 in Rates on Grain, 21 I. C. C. R. 22; P. C. C. & St. L. Ry., 22 I. C. C. 291. 
 
 In re Advances in Rates on Locomo- ™ In re Advances on Coal, 23 
 
 tives and Tenders, 21 I. C. C. R. 103. I. C. C. R. 518. 
 
 ■"I" In re Advances in Rates, Eastern '^^ Wisconsin State Millers' Ass'n v. 
 
 Case, 20 I. C. C. 243; In re Advances C, M. & St. P. Ry., 23 I. C. C. 
 
 in Rates, Western Case, 20 1. C. R. 494. 
 
 307. '^ In re Advances on Potatoes, 23 
 
 " City of Spokane v. N. P. Ry., 21 I. C. C. 69. 
 
 I. C. C. 400; Railroad Commission of " In re Advances on Barley, 20 I. 
 
 Nevada v. S. P. Co., 21 I. C. C. 329. C. C. 664. 
 
 " Railroad Commission of Nevada ^* In re Advances on Iron and Steel 
 
 v. S. P. Co., 21 I. C. C. 329. Articles, 22 I. C. C. 486. 
 
 [1019] 
 
§ 1123 ] Railroad Rate Regulation 
 
 It might be noted in this connection that on February 11, 
 1915, the Commission gave notice of a ruling to the effect 
 that where schedules containing advances in rates are filed, 
 the carrier should fully state the extent of the advances 
 and the reasons relied upon by it to justify them, and that 
 it was also highly desirable that protestants against any 
 such advances should file their objections with the Commis- 
 sion before the date set in the schedule for their going into 
 effect unless suspended. 
 
 1 1020 ] 
 
CHAPTER XXIV 
 
 JUDICIAL REVIEW OF COMMISSION ACTION 
 
 ] 1130. Provisions of the Act. 
 1131. Further provisions. 
 
 Topic A. Basis of Judicial Determination 
 
 j 1132. Jurisdictional limitations upon Commission action. 
 
 1133. The nature of the Commission. 
 
 1134. The functions of the Commission. 
 
 1135. Preliminary action by the Commission necessary. 
 
 1136. Certain consequences of this doctrine. 
 
 1137. Appeal from the Commission to the courts. 
 
 1138. Jurisdiction of the Federal courts. 
 
 1139. Constitutional and statutory limitations distinguished. 
 
 Topic B. Grounds of Invalidity of Commission Action 
 
 i 1140. Action under an unconstitutional statute. 
 
 1141. Action not within the statute. 
 
 1142. Action in violation of constitutional guarantees. 
 
 1143. Action after an inadequate hearing. 
 
 1144. Action upon mistaken conclusions of law. 
 
 1145. Action contrary to evidence. 
 
 1146. Limitation to evidence in the record. 
 
 1147. Conclusiveness of Commission findings. 
 
 Topic C. Procedure for Determining Validity of Commission Action 
 
 • 1148. Temporary restraining order. 
 
 1149. Injunction against enforcement. 
 
 1150. Balance of equities. 
 
 1151. Appeal from the district court on petitions for injunctions. 
 
 1152. Sufficiency of averments. 
 
 1153. Necessary and proper parties. 
 
 1154. Venue of enforcement suits. 
 
 1155. Introduction of new evidence. 
 
 Topic D. Enforcement Proceedings in the Courts 
 
 1156. Functions of the Commission in the enforcement of the Act. 
 
 1157. Judicial process in aid of proceedings before the Commission. 
 
 [ 1021 ] 
 
§ 1130 ] Railroad Rate Regulation 
 
 § 1158. Judicial action necessary to the enforcement of orders. 
 
 1159. Parties to enforcement suits. 
 
 1160. Orders unenforceable because of defects. 
 
 1161. Power of the courts to modify orders of the Commission. 
 
 1162. Sufficiency of averments. 
 
 1163. Recovery on a reparation order of the Commission. 
 
 1164. Findings of the Commission as evidence. 
 
 § 1130. Provisions of the Act. 
 
 The Act for the creation of the Commerce Court pro- 
 vided that it should have the jurisdiction then possessed 
 by the United States circuit courts over (1) all cases for the 
 enforcement, otherwise than by adjudication and collec- 
 tion of a forfeiture or penalty or by infliction of criminal 
 punishment, of any order of the Commission other than 
 for the payment of money; (2) all cases brought to enjoin, 
 set aside, annul, or suspend in whole or in part any order of 
 the Commission ; (3) certain cases under the Elkins Act, and 
 (4) certain mandamus proceedings. The District Court Ju- 
 risdiction Act of October 22, 1913 abolished the Commerce 
 Court, and provided that its jurisdiction "should be trans- 
 ferred to and vested in the several district courts of the 
 United States." If after a hearing on a complaint, the 
 Commission shall determine that any party complainant 
 is entitled to an award of damages under the provisions 
 of the Act for a violation thereof, the Commission shall 
 make an order directing the carrier to pay to the com- 
 plainant the sum to which he is entitled on or before a 
 day named. If a carrier does not comply with an order 
 for the payment of money within the time limit in such 
 order, the Act formerly provided that the complainant, or 
 any person for whose benefit such order was made, may 
 file in the district court of the United States for the dis- 
 trict in which he resides or in which is located the principal 
 operating office of the carrier, or through which the road 
 of the carrier runs, or in any State court of general ju- 
 risdiction having jurisdiction of the parties, a petition 
 setting forth briefly the causes for which he claims dam- 
 [ 1022 ] 
 
Judicial Review of Commission Action [ § 1130 
 
 ages, and the order of the Commission in the premises. 
 But it is somewhat doubtful as to how much this has been 
 modified by the venue clause of the District Court Juris- 
 diction Act of 1913, which provides that the venue of all 
 suits for the enforcement of the Act shall be in the judi- 
 cial district wherein is the residence of any of the parties 
 upon whose petition the order was made. Such suit in the 
 district court of the United States shall proceed in all re- 
 spects like other civil suits for damages, except that on the 
 trial of such suit the findings and order of the Commission 
 shall be prima facie evidence of the facts therein stated, 
 and except that the petitioner shall not be liable for costs 
 in the district court nor for costs at any subsequent stage 
 of the proceedings unless they accrue upon his appeal. If 
 the petitioner shall finally prevail he shall be allowed a 
 reasonable attorney's fee, to be taxed and collected as a 
 part of the costs of the suit. All complaints for the recov- 
 ery of damages shall be filed with the Commission within 
 two years from the time the cause of action accrues, and 
 not after, and a petition for the enforcement of an order for 
 the payment of money shall be filed in the district court 
 within one year from the date of the order, and not after. 
 In such suits all parties in whose favor the Commission 
 may have made an award for damages by a single order 
 may be joined as plaintiffs, and all of the carriers parties to 
 such order awarding such damages may be joined as de- 
 fendants, and such suit may be maintained by such joint 
 plaintiffs and against such joint defendants in any district 
 where any one of such joint plaintiffs could maintain such 
 suit against any one of such joint defendants; and service 
 of process against any one of such defendants as may not 
 be found in the district where the suit is brought may be 
 made in any district where such defendant carrier has its 
 principal operating office. In case of such joint suit the 
 recovery, if any, may be by judgment in favor of any 
 one of such plaintiffs against the defendant found to be 
 liable to such plaintiff. 
 
 [ 1023 ] 
 
§ 1131 ] Railroad Rate Regulation 
 
 § 1131. Further provisions/ 
 
 Any carrier, any officer, representative, or agent of a 
 carrier, or any receiver, trustee, lessee, or agent of either 
 of them, who knowingly fails or neglects to obey any 
 order made under the provisions of section fifteen of this 
 Act shall forfeit to the United States the sum of five 
 thousand dollars for each offense. Every distinct viola- 
 tion shall be a separate offense, and in case of a continuing 
 violation each day shall be deemed a separate offense. 
 The forfeitures provided for in this Act shall be payable 
 into the Treasury of the United States, and shall be re- 
 coverable in a civil suit in the name of the United States, 
 brought in the district where the carrier has its principal 
 operating office, or in any district through which the road 
 of the carrier runs. It shall be the duty of the various 
 district attorneys, under the direction of the Attorney 
 General of the United States, to prosecute for the recovery 
 of forfeitures. The costs and expenses of such prosecution 
 shall be paid out of the appropriation for the expenses of 
 the courts of the United States. If any carrier fails or 
 neglects to obey any order of the Commission other than 
 for the payment of money, while the same is in effect, the 
 Interstate Commerce Commission or any party injured 
 thereby, or the United States, by its Attorney General, 
 may apply to the district court for the enforcement of such 
 order. If, after hearing, that court determines that the 
 order was regularly made and duly served, and that the 
 carrier is in disobedience of the same, the court shall en- 
 force obedience to such order by a writ of injunction or 
 other proper process, mandatory or otherwise, to restrain 
 such carrier, its officers, agents, or representatives, from 
 further disobedience of such order, or to enjoin upon it or 
 them obedience to the same. The venue of any suit 
 brought to enforce, suspend, or set aside, in whole or in 
 part, any order of the Commission is in the judicial district 
 wherein is the residence of the party or any of the parties 
 upon whose petition the order was made, except that where 
 [ 1024 ] 
 
Judicial Review of Commission Action [ § 1131 
 
 the order does not relate to transportation or is not made 
 upon the petition of any party the venue shall be in the 
 district where the matter complained of in the petition 
 before the Commission arises, and except that when the 
 order does not relate to transportation or to a matter so 
 complained of before the Commission, the matter covered 
 by the order shall be deemed to arise in the district where 
 one of the petitioners in court has either its principal office, 
 or its principal operating office. The procedure in the 
 district courts in respect to cases on which jurisdiction is 
 conferred upon them by the District Court Jurisdiction 
 Act is the same as that which prevailed in the Commerce 
 Court. Any application for an interlocutory injunction 
 suspending or restraining any order of the Commission 
 must be presented to three judges, at least one of whom 
 must be a circuit judge, and may be granted only with the 
 concurrence of a majority of such judges. In a case where 
 irreparable damage is threatened, by the same procedure 
 and after three days' notice to the Commission and to the 
 Attorney General, a temporary restraining order may be 
 granted. An appeal may be taken direct to the Supreme 
 Court from an order granting or denying an interlocutory 
 injunction if taken within 30 days, or from a final judgment 
 or decree, if taken within 60 days. The hearing upon an 
 application for an interlocutory injunction shall be in every 
 way expedited and be assigned for a hearing at the earliest 
 practicable day. In order to discharge the duties imposed 
 upon it by the Act, the Commission is empowered to re- 
 quire by subpoena the attendance and testimony of wit- 
 nesses and the production of papers. Should the Commission 
 require the assistance of the courts to obtain necessary 
 evidence, the Act authorizes the district courts to compel 
 the attendance of witnesses and the production of papers. 
 Testimony thus given may not be used against the witness 
 in any subsequent criminal proceeding. In passing upon 
 the Commission's application, the courts will determine 
 whether the testimony or papers are required for a purpose 
 65 [ 1025 ] 
 
§ 1132 ] Railkoad Rate Regulation 
 
 within the Commission's jurisdiction. On application of 
 the Attorney General at the request of the Commission, 
 alleging a violation of any provision of the Act by a carrier, 
 the district courts may enforce the same by a writ of man- 
 damus. Nothing in the Act shall in any way abridge or 
 alter any of the remedies already existing at common law 
 or by statute, but the remedies provided by the Act are 
 in addition thereto. 
 
 § 1132. Jurisdictional limitations upon Commission action. 
 
 The Supreme Court of the United States has several times 
 within the past few years enumerated the various classes of 
 cases in which it has concluded that it is its duty to set aside 
 the action of the Interstate Commerce Commission. In 
 one case the following were set forth as the grounds for 
 taking such action. In determining whether an order of 
 the Commission shall be suspended or set aside, the Supreme 
 Court must consider (a) all relevant questions of constitu- 
 tional power or right; (b) all pertinent questions as to 
 whether the administrative order is within the scope of the 
 delegated authority under which it purports to have been 
 made; and (c) whether, even although the order be in form 
 within the delegated power, nevertheless, it must be treated 
 as not embraced therein, because its authority has been 
 manifested in such an unreasonable manner as to cause it to 
 be within the elementary rule that the substance, and not* 
 the shadow, determines the validity of the exercise of the 
 power; but (d) the Supreme Court may not, under the guise 
 of exerting judicial power, usurp merely administrative 
 functions by setting aside a lawful order upon its conception 
 as to whether the administrative power has been wisely 
 exercised." It will be noted that by putting (a) and (b) 
 first in order the court emphasizes the fimdamental distinc- 
 tion; and it then not improperly adds such working rules as 
 (c) and (d), which might upon analysis be resolved into the 
 
 ^^ Interstate Commerce Commis- 452, 54 L. ed. 280, 30 Sup. Ct. 
 sion V. Illinois Central Ry., 215 U. S. 155. 
 
 [ 1026 ] 
 
Judicial Review of Commission Action [ § 1133 
 
 elementary principles. In a recent case is given a still more 
 elaborate list of instances in which the courts will set aside the 
 orders of the Commission. "There has been no attempt to 
 make an exhaustive statement of the principle involved, but in 
 cases thus far decided, it has been settled that the orders of 
 the Commission are final unless (1) beyond the power which 
 it could constitutionally exercise ; or (2) beyond its statutory 
 power; or (3) based upon mistake of law. But questions of 
 fact may be involved in the determination of questions of 
 law, so that an order, regular on its face, may be set aside if it 
 appears that (4) the rate is so low as to be confiscatory and 
 in violation of the constitutional prohibition against taking 
 property without due process of law ; or (5) if the Commission 
 acted so arbitrarily and unjustly as to fix rates contrary to 
 evidence, or without evidence to support it; or (6) if the 
 authority therein involved has been exercised in such an un- 
 reasonable manner as to cause it to be within the elementary 
 rule that the substance, and not the shadow, determines the 
 validity of the exercise of the power." ^^ While it has long 
 been the tendency of the courts in the interest of justice to 
 enlarge their jurisdiction by construction in cases of reason- 
 able doubt, a similar course on the part of an administra- 
 tive and quasi-legislative body, such as the Commission, 
 would be of questionable propriety. Being a special tri- 
 bunal, it ought not in any event to enlarge its territorial 
 jurisdiction by intendment, but should exercise its pow- 
 ers only under the clearly expressed authority of the 
 Act." 
 
 § 1133, The nature of the Commission. 
 
 The somewhat mixed functions of the Commission and 
 its peculiar status are indicated by the various descriptive 
 terms which have been applied to it by both the Commis- 
 sion and the courts. It has been held to be a body corporate 
 
 ^ Interstate Commerce Commis- " In re Jurisdiction in Alaska, 19 
 
 sion V. Union Pacific Ry., 222 U. S. I. C. C. 81, 93. 
 541, 56 L. ed. 308, 32 Sup. Ct. 108. 
 
 [ 1027 ] 
 
§ 1133 ] Railroad Rate Regulation 
 
 with legal capacity to appear as party plaintiff or defendant 
 in the Federal courts. ^^ It has also been described as an 
 administrative board ^* or an administrative tribunal.^" 
 It has frequently been held to have quasi-judicial power," 
 and in one case it was said that its functions were those of 
 referees or special commissioners.*^ Before the rate law of 
 1906 the Supreme Court held that it was vested with powers 
 partly judicial and partly executive, but not legislative.*' 
 But in a recent case the Supreme Court, in distinguishing 
 the Commission's power to award reparation and its au- 
 thority to fix rates, uses these words: "One is made by the 
 Comnnission in its quasi-judicial capacity to measure past 
 injuries sustained by a private shipper; the other in its 
 quasi-legislative capacity, to prevent future injury to the 
 public." *^ The Conunission has characterized itself as an 
 administrative body,*^ and as an administrative and quasi- 
 legislative body,** but with a jurisdiction analogous to that 
 of a court of equity.*'' It has further said that it is "a select 
 jury to pass upon the reasonableness and justice of railroad 
 rates, rules and practices." ** The authority of the Commis- 
 sion to control the charges of carriers was for a long time 
 
 '* Texas & Pacific Ry. v. Inter- Interstate Commerce Commission v. 
 
 state Commerce Commission, 162 C, N. O. & T. P. Ry., 167 U. S. 479, 
 
 U. S. 197, 40 L. ed. 940, 16 Sup. Ct. 42 L. ed. 243, 17 Sup. Ct. 896. 
 
 666. «2 K. & I. B. Co. V. L. & N. Ry., 37 
 
 59 Cincinnati, N. O. & T. P. Ry. v. Fed. 567. 
 
 Interstate Commerce Commission, »' Interstate Commerce Conomis- 
 
 162 U. S. 184, 40 L. ed. 935, 27 Sup. sion v. C, N. O. & T. P. Ry., 167 
 
 Ct. 948. U. S. 479, 42 L. ed. 243, 17 Sup. Ct. 
 
 <» Texas & Pacific Ry. v. Abilene 896. 
 
 Cotton Oil Co., 204 U. S. 420, 51 »" Baer Brothers v. D. & R. G. Ry., 
 
 L. ed. .553, 27 Sup. Ct. 350. 233 U. S. 479, 58 L. ed. 1055, 34 Sup. 
 
 "' Interstate Commerce Commis- Ct. 641. 
 
 sion V. C, N. O. & T. P. Ry., 64 Fed. "^ m. & K. Shippers' Ass'n v. 
 
 981; Interstate Commerce Commis- M., K. & T. Ry., 12 I. C. C. 483. 
 
 sion V. L. & N. Ry., 73 Fed. 409; «» In re Jurisdiction in Alaska, 19 
 
 Interstate Commerce Commission v. I. C. C. 81. 
 
 C, N. O. & T. P. Ry., 76 Fed. 183; " Railway Commission of Ohio v. 
 
 Texas & Pacific Ry. v. Interstate H. V. Ry., 12 I. C. C. 398. 
 
 Commerce Commission, 162 U. S. »' In re Advances in Rates — West- 
 
 197, 40 L. cd. 940, 16 Sup. Ct. 666; crn Case, 20 I. C. C. 307. 
 
 [ 1028 ] 
 
Judicial Review of Commission Action [ § 1134 
 
 a subject of controversy, because the vesting of such author- 
 ity in the Commission seemed to be a delegation by Congress 
 of its legislative power. This doubt was due to the fact that 
 in common-law jurisdictions the distinction between legis- 
 lation and administration has not been extensively applied, 
 and even yet, com-ts which do not question the constitu- 
 tionality of the powers vested in administrative commis- 
 sions continue to describe them as legislative bodies."^ In 
 the case of the Commission, however, it is now well recognized 
 that its authority over the charges of carriers is adminis- 
 trative rather than legislative. Congress has laid down 
 general rules with regard to rates and has created the Com- 
 mission as an administrative agent for the purpose of en- 
 forcing them.™ 
 
 § 1134. The functions of the Commission. 
 
 A fundamental function of the Commission is to make 
 findings of fact in the cases which come before it. Whether 
 a rate is reasonable,'^ or discriminatory,'^ whether a carrier's 
 
 " The courts may not substitute Interstate Commerce Commission, 
 
 their judgment as to rates "for that 162 U. S. 197, 40 L. ed. 940, 16 Sup. 
 
 of the legislature or of the railroad Ct. 666; Illinois Central Ry. v. 
 
 commission exercising its delegated Interstate Commerce Commission, 
 
 power." LouisviUe & Nashville Ry. 206 U. S. 441, 51 L. ed. 1128, 27 Sup. 
 
 V. Garrett, 231 U. S. 298, 58 L. ed. Ct. 700; Interstate Commerce Com- 
 
 229, 34 Sup. Ct. 48. mission v. C, R. I. & P. Ry., 218 
 
 '» Buttfield V. Stranahan, 192 U. S. U. S. 88, 54 L. ed. 946, 30 Sup. Ct. 
 
 470, 48 L. ed. 525, 24 Sup. Ct. 349; 651; So. Pac. Ry. v. Interstate Com- 
 
 Union Bridge Co. v. United States, merce Commission, 219 U. S. 433, 
 
 204 U. S. 364, 51 L. ed. 523, 27 Sup. 55 L. ed. 283, 31 Sup. Ct. 288; Inter- 
 
 Ct. 367; United States v. Grimaud, state Commerce Commission v. Nor. 
 
 220 U. S. 506, 55 L. ed. 563, 31 Sup. Pac. Ry., 222 U. S. 541, 56 L. ed. 308, 
 
 Ct. 480; Interstate Commerce Com- 32 Sup. Ct. 108; Louisville & Nash- 
 
 mission v. Goodrich Transit Co., 224 ville Ry. v. Garrett, 231 U. S. 298, 
 
 U. S. 194, 56 L. ed. 729, 32 Sup. Ct. 58 L. ed. 229, 34 Sup. Ct. 48; Atchi- 
 
 436; Kansas City Southern Ry. v. son, T. & S. F. Ry. v. United States, 
 
 United States, 231 U. S. 423, 58 L. ed. 232 U. S. 199; Boston & Maine Ry. 
 
 296, 34 Sup. Ct. 125. v. Hooker, 233 U. S. 97, 58 L. ed. 868, 
 
 " Cincinnati, N. O. & T. P. Ry. v. 34 Sup. Ct. 526. 
 
 Interstate Commerce Commission, " Hiinois Cent. Ry. v. Interstate 
 
 162 U. S. 184, 40 L. ed. 935, 16 Sup. Commerce Commission, 206 U. S. 
 
 Ct. 700; Texas & Pacific Ry. v. 441, 51 L. ed. 1128, 27 Sup. Ct. 700; 
 
 [ 1029 ] 
 
§ 1134] Railroad Rate Regulation 
 
 practice operates as a preference/' whether a spur-track is 
 part of a carrier's terminal facihties/'' whether there is com- 
 petition between carriers/'' — all these are questions of fact, 
 which are peculiarly within the province of the Commission. 
 The latter is an expert body/* and its findings are treated with 
 the respect "due to the judgments of a tribunal appointed by 
 law and informed by experience." When based upon evi- 
 dence, the Commission's determinations of fact are conclusive, 
 and will not be re-examined in the courts." "This court," 
 said Justice Hughes, "cannot substitute its judgment for that 
 of the Interstate Commerce Commission upon matters of fact 
 within the province of the Commission." '* Even when the 
 facts are undisputed, it is the judgment of the Commission 
 and not of the courts which is to govern. And if the Com- 
 mission, through an erroneous construction of the Act, has 
 failed to find the facts, the courts will not themselves pro- 
 ceed to an original investigation, but will correct the error of 
 law and remand the case to the Commission for the due dis- 
 charge of its functions.''^ Even if the language of the Act 
 
 Baltimore & Ohio Ry. v. United 441, 51 L. ed. 1128, 27 Sup. Ct. 700; 
 
 States, 215 U. S. 481, 54 L. ed. 292, Baltimore & O. R. Co. v. United 
 
 30 Sup. Ct. 164; Interstate Com- States, 215 U. S. 481, 54 L. ed. 292, 
 merce Commission v. D., L. & W. SOSup.Ct. Rep. 164; Interstate Com- 
 Ry., 220 U. S. 235, 55 L. ed. 448, 31 merce Commission v. Delaware, L. & 
 Sup. Ct. 392. W. R. Co., 220 U. S. 235, 55 L. ed. 
 
 " Baltimore & Ohio Ry. v. Pitcairn 448, 31 Sup. Ct. Rep. 392; Interstate 
 
 Coal Co., 215 U. S. 481, 54 L. ed. Commerce Commission v. Union P. 
 
 292, 30 Sup. Ct. 164; Interstate R. Co., 222 U. S. 541, 56 L. ed. 308, 
 
 Commerce Commission v. D., L. & 32 Sup. Ct. Rep. 108; Interstate 
 
 W. Ry., 220 U. S. 235, 55 L. ed. 448, Commerce Commission v. Louisville 
 
 31 Sup. Ct. 392. & N. R. Co., 227 U. S. 88, 57 L. ed. 
 '" Los Angeles Switching Case, 234 431, 33 Sup. Ct. Rep. 185; Atchison, 
 
 U. S. 294, 58 L. ed. 1319, 34 Sup. Ct. T. & S. F. R. Co. v. United States, 
 
 814. 232 U. S. 199, 58 L. ed. 568, 34 Sup. 
 
 " Ilhnois Central Ry. v. Interstate Ct. Rep. 291; Los Angeles Switching 
 
 Commerce Commission, 206 U. S. Case, 234 U. S. 294, 58 L. ed. 1319, 
 
 441, 51 L. ed. 1128, 27 Sup. Ct. 700. 34 Sup. Ct. 814. 
 
 " Smyth V. Ames, 169 U. S. 466, " United States v. L. & N. Ry., 
 
 42 L. ed. 819, 18 Sup. Ct. 418; Joynes 235 U. S. 314, 35 Sup. Ct. 113. 
 
 V. Penn. Ry., 17 I. C. C. 361. "Interstate Commerce Commis- 
 
 " Illinois Central Ry. v. Intefetate sion v. Clyde Steamship Co., 181 U. 
 
 Commerce Commission, 206 U. S. S. 29, 45 L. ed. 729, 21 Sup. Ct. 512. 
 
 [ 1030 ] 
 
Judicial Review of Commission Action [ § 1134 
 
 were not clear, it is obvious that the ends which Congress 
 had in view in the enactment of the Act and its amendments 
 could not be attained by any other construction. This body 
 of legislation imposes upon both carriers and shippers many 
 obligations to which they had not before been subject, and 
 these require, in the words of Chief Justice White, "official 
 unity of action which could only be brought about by a 
 single administrative initiative and primary control. To 
 that end the Act (sec. 11) created an administrative body 
 endowed with what may be in some respects qualified as 
 quasi-judicial attributes, to whom was confided the enforce- 
 ment of those provisions of the Act which essentially exacted 
 unity in order that they might beneficially operate." ^° 
 Such being the function of the Commission, it must be al- 
 lowed a large degree of discretion as to the evidence upon 
 which it will base its judgments,*^ and its findings must be 
 given a presumption of truth.^^ Hence in proceedings 
 brought to enforce an order of the Commission, a carrier 
 which disputes the finding of facts upon which it was based 
 must assume the burden of proof.*' But on the other hand, 
 should the Coinmission abuse its discretion and under the 
 guise of an administrative order should draw up what would 
 amount to a code, such action would transcend its admin- 
 istrative functions and would be invalid.** 
 
 «" Proctor and Gamble v. United Coast Line Ry. v. Florida, 203 U. S. 
 States, 225 U. S. 282, 56 L. ed. 1091, 256, 51 L. ed. 174, 27 Sup. Ct. 108; 
 32 Sup. Ct. 761; Texas & Pacific Ry. Illinois Cent. Ry. v. Interstate Com- 
 V. Abilene Cotton Oil Co., 204 U. S. merce Commission, 206 U. S. 441, 
 426, 51 L. ed. 553, 27 Sup. Ct. 350; 51 L. ed. 1128, 27 Sup. Ct. 700; Inter- 
 Mitchell Coal Co. V. Penn. Ry., 230 state Commerce Commission v. C, R. 
 U. S. 247, 57 L. ed. 1472, 33 Sup. Ct. I. & P. Ry., 218 U. S. 88, 54 L. ed. 
 916. 946, 30 Sup. Ct. 651. 
 
 *i Louisville & Nashville Ry. v. *' Interstate Commerce Commis- 
 
 Interstate Commerce Commission, sion v. L. & N. Rd. Co., 118 Fed. 
 
 184 Fed. 118, 195 Fed. 541; Atchison, 613; Interstate Commerce Commis- 
 
 Topeka & Santa Fe Ry. v. United sion v. C. H. & D. Ry., 146 Fed. 
 
 States, 203 Fed. 56. 559. 
 
 »2 Interstate Commerce Commis- '^ La. & Pac. Ry. v. United States, 
 
 sion V. Louisville & Nashville Ry., 209 Fed. 24. 
 102 Fed. 709, 118 Fed. 616; Atlantic 
 
 r 1031 1 
 
§ 1135 ] Railroad Rate Regulation 
 
 § 1135. Preliminary action by the Commission neces- 
 sary. 
 
 Section 9 of the Act provides that any persons claiming 
 to be damaged by any common carrier subject to the 
 Act may either make complaint to the Commission in the 
 prescribed mode or may bring suit in their own behalf in 
 any district court of the United States of competent 
 jurisdiction, for the recovery of the damages for which 
 the carrier may be liable under the Act. But no one may 
 pursue both of these remedies, and election must be made 
 between them. Section 22 provides that nothing in this 
 Act shall in any way abridge or alter the remedies already 
 existing at common law or by statutes, but the provi- 
 sions of this Act are in addition to such remedies. The 
 language of these sections led to the assertion of the claim 
 that a shipper who had been subjected to an unreason- 
 able or discriminatory charge might exercise a choice as 
 to whether he would appeal to the courts for redress or 
 would complain to the Commission. It is obvious, how- 
 ever, that such a construction would defeat one of the 
 chief purposes of the Act, which was to insure that 
 rates should be imiform and non-discriminatory. To this 
 end carriers are required to file their rate schedules with 
 the Commission, and these then become the only legal 
 charges until they are altered as provided by law. But 
 if it were possible for shippers, without a prior hearing 
 by the Conunission, to appeal to the courts for an award 
 of damages on the ground that the rates so established 
 are unreasonable, the result would inevitably be such a 
 variety of decisions by the various courts that no uniform 
 standard of rates would be possible, and the Commis- 
 sion would be powerless to maintain that equality and 
 uniformity of rates which the Act makes it its duty to 
 maintain. Hence the courts hold that under sections 9 
 and 22 an individual will be heard by the courts only in 
 those cases in which they can grant redress consistently 
 with the context of the Act without previous action by 
 [ 1032 ] 
 
Judicial Review of Commission Action [ § 1135 
 
 the Commission.*^ Plainly complaints as to unreasonable 
 rates are not included in this category. Hence in cases 
 in which the court was asked to enforce orders which it 
 found that the Commission was not authorized to issue, 
 it did not itself undertake an investigation of the question 
 of the reasonableness of the rate involved, but remanded 
 that question for action by the Commission.*" "Primary 
 interference of the courts with the administrative functions 
 of the Commission is wholly incompatible with the Act." **" 
 The Commission is the tribunal instituted by the gov- 
 ernment to inquire primarily into the fact as to whether 
 a discrimination exists. Until an inquiry is there noade, 
 and a finding and order had, the jurisdiction of a court of 
 equity may not be invoked to restrain an alleged discrim- 
 ination.*"'' No court can enjoin the filing by a railway of 
 an interstate rate on the ground that it is discriminatory 
 in advance of action by the Commission.*' Since the rate 
 filed with the Commission is the only legal rate, it is the 
 standard of what is reasonable so far as courts and juries 
 are concerned,** and a shipper cannot maintain an action 
 
 85 Texas & Pac. Ry. v. Abilene U. S., 225 U. S. 282, 56 L. ed. 1091, 
 Cotton Oil Co., 204 U. S. 426, 51 32 Sup. Ct. 761. 
 L. ed. 553, 27 Sup. Ct. 350; So. Ry. v. ™ Cincinnati, N. O. & T. P. Ry. v. 
 Tift, 206 U. S. 428, 51 L. ed. 1124, 27 I. C. C, 162 U. S. 184, 40 L. ed. 935, 
 Sup. Ct. 709; Louisville & N. Ry. v. 27 Sup. Ct. 948; Louisville & Nash- 
 Cook Brewing Co., 223 U. 8. 70, 56 ville Ry. v. Behlmer, 175 U. S. 648, 
 L. ed. 355, 32 Sup. Ct. 189; Gt. No. 40 L. ed. 309, 20 Sup. Ct. 208; Inter- 
 Ry. V. O'Connor, 232 U. S. 508, 58 state Commerce Commission v. L. & 
 L. ed. 703, 34 Sup. Ct. 380; Texas & N. Ry., 190 U. S. 273, 47 L. ed. 1047, 
 Pac. Ry. V. American Tie & Timber 23 Sup. Ct. 687; United States v. 
 Co., 234 U. S. 138, 58 L. ed. 1255, 34 M. C. Ry., 122 Fed. 544. 
 Sup. Ct. 885; American Sugar Re- »«'' Baltimore & Ohio Ry. v. United 
 fining Co. V. D., L. & W. Ry., 200 States, 215 U. S. 481, 54 L. ed. 292, 
 P"ed. 652; Jacoby v. Penn. Ry., 200 30 Sup. Ct. 164. 
 Fed. 989. *" United States v. Mich. Cent. 
 
 Even where the question involved Ry., 122 Fed. 544. 
 
 is a constitutional question, if it is "Columbus Iron & Steel Co. v. 
 
 dependent upon provisions of the K. & M. Ry., 178 Fed. 261. 
 
 Interstate Commerce Act, it is sub- ** Van Patten v. C, M. & St. P. 
 
 ject to the precedent action of the Ry., 81 Fed. 545. 
 Commission. Proctor and Gamble v. 
 
 [ 1033 ] 
 
§ 1136 ] Railroad Rate Hegtjlation 
 
 at common law in a State or Federal court to recover for 
 an excess of freights exacted on an interstate shipment if 
 the rates charged were those filed with the Commissionj^' 
 nor can such an action be maintained in the Federal courts 
 until application is first made to the Commission for the 
 correction of the charge.^" 
 
 § 1136. Certain consequences of this doctrine. 
 
 Whatever may be the legislation of a State a carrier 
 cannot be prosecuted for charging more than the rate 
 fixed in its bill of lading, but must comply with the Fed- 
 eral law and charge the rate filed with the Commission.^^ 
 The same result was reached when a carrier attempted 
 by a special contract with a shipper to vary the rate filed 
 with the Commission."^ Other cases in which it has been 
 held that action by the Commission is a condition prec- 
 edent to recourse to the courts involved suits for dam- 
 ages growing out of the granting of rebates to a shipper's 
 competitors,"^ the refusal of a carrier to establish satis- 
 factory through routes,"* discrimination in the distribution 
 of cars among shippers,"'' the exaction of discriminatory 
 charges on coal when loaded from wagons and not from 
 tipples,"" a carrier's payment of discriminatory allowances 
 to a shipper for transportation services rendered by him,"' 
 
 ™ Robinson v. B. & O. Ry., 222 »* United States v. Pacific & Arctic 
 
 U. S. 506, 56 L. ed. 288, 32 Sup. Co., 228 U. S. 87, 57 L. ed. 742, 33 
 
 Ct. 113; Clement v. L. & N. Ry., Sup. Ct. 443. 
 
 153 Fed. 979; American Union '* Interstate Commerce Commis- 
 
 Coal Co. V. Railway Co., 159 Fed. sion v. 111. Cent. Ry., 215 U. S. 452, 
 
 278. 54 L. ed. 280, 30 Sup. Ct. 155; Mor- 
 
 ™ Clement v. L. & N. Ry., 153 r^sdale Coal Co. v. Penn. Ry., 230 
 
 Fed. 979. U. S. 304, 57 L. ed. 1494, 33 Sup. Ct. 
 
 "Gulf, Colorado & C. Ry. v. 938. 
 
 Hefley, 158 U. S. 98, 39 L. ed. 910, » Robinson v. B. &'0. Ry., 222 
 
 15 Sup. Ct. 802. U. S. 506, 56 L. ed. 288, 32 Sup. Ct. 
 
 92 Texas & Pacific Ry. V. Mugg, 202 114. 
 
 U. S. 242, 50 L. od. 1011, 26 Sup. Ct. " Mitchell Coal & Coke Co. v. 
 
 242. Penn. Ry., 230 U. S. 247, 57 L. ed. 
 
 "' Mitchell Coal & Coke Co. v. 1494, 33 Sup. Ct. 916. 
 Penn. Ry., 183 Fed. 908. 
 [ 1034 ] 
 
Judicial Review of Commission Action [ § 1136 
 
 discrimination growing out of the classification of com- 
 modities,'* and suits in equity to prevent the filing or en- 
 forcement of schedules alleged to be unreasonable.'^ If, 
 however, such a case be commenced without the necessary 
 precedent application to the Commission, the court in 
 remanding it for dismissal may stay the dismissal until 
 the complainant has an opportunity to make such ap- 
 plication, reserving meanwhile to the defendant the right 
 to be heard on the defense of limitations as well as other 
 defenses.^ If primary jurisdiction is vested in the Com- 
 mission, the parties cannot by stipulation vest it in the 
 courts.^ Although the Commission may have passed upon 
 the question in other cases between other shippers and 
 defendant carrier, nevertheless a shipper seeking repara- 
 tion for violation of this ruling by a carrier must first 
 apply to the Commission, as the case is not one of those 
 which under section 9 may be brought originally either 
 before the Commission or the courts.' Nor does the fact 
 that the allowance or discrimination was a past one relieve 
 the shipper from primary recourse to the Commission for 
 judgment as to its reasonableness.^ In all such cases the 
 primary jurisdiction of the Commission will be respected 
 by the courts. While in many cases they will review the 
 action of the Commission, they will never anticipate it 
 nor supplant it. 
 
 98 Texas & Pacific Ry. v. Ameri- Steel Co. v. N. Y. C. & H. R. Ry., 
 
 can Tie & Timber Co., 234 U. S. 181 Fed. 316. 
 
 138, 58 L. ed. 1255, 34 Sup. Ct. ' MitcheU Coal & Coke Co. v. 
 
 884. Penn. Ry., 230 U. S. 247, 57 L. ed. 
 
 » Great No. Ry. v. Kalispell 1494, 30 Sup. Ct. 916. 
 
 Lumber Co., 165 Fed. 25; Atlantic = Mitchell Coal & Coke Co. v. 
 
 Coast Line v. Macon Grocery Co., Penn. Ry., 183 Fed. 908. 
 
 166 Fed. 206; Columbus Iron & ' Howard Supply Co. v. C. & O. 
 
 Steel Co. V. Kanawha & M. Ry., 171 Ry., 162 Fed. 188; National Pole 
 
 Fed. 713; Houston Coal & Coke Co. Co. v. C. & N. W. Ry., 200 Fed. 
 
 V. N. & W. Ry., 171 Fed. 723; 185. 
 
 Columbus Iron & Steel Co. v. K. & * Mitchell Coal & Coke Co. v. 
 
 M. Ry., 178 Fed. 261; Wickwire Penn. Ry., 230 U. S. 247, 57 L. ed. 
 
 1494, 30 Sup. Ct. 916. 
 
 [ 1035 ] 
 
§ 1137 ] Railroad Rate Regulation 
 
 § 1137. The right of appeal to the courts. 
 
 While the courts will not usurp the functions of the 
 Commission as the tribunal designated by law to make 
 the primary determination of facts, and while the findings 
 of the Commission in the discharge of this function are 
 made prima fade evidence of the facts in subsequent 
 judicial proceedings and are received by the courts with 
 a presumption of truth, yet since the Commission acts as 
 a legislative or administrative board and not judicially 
 in reaching its findings, its action as to questions of law 
 involved is not final, but is subject to judicial review.^ 
 When an issue of fact only is concerned, the right of ap- 
 peal depends altogether upon the will of the legislature; 
 but when the issue is as to questions of law, the parties 
 concerned cannot be deprived of their right to a judicial 
 determination. This was expressly provided for by Con- 
 gress in the Act creating the Commerce Court to which 
 was given jurisdiction over cases brought to enjoin, set 
 aside, annul, or suspend, in whole or in part, any order 
 of the Commission. Upon the abolition of the Commerce 
 Court this jurisdiction was vested in the district courts. 
 Quite apart, however, from these statutory provisions, the 
 constitutional requirement of due process of law can only 
 be satisfied by granting to any person deprived of prop- 
 erty by an order of the Commission an opportunity to 
 have his day in court. This is particularly true of rate 
 regulations, which so directly affect property rights, and 
 which therefore raise a judicial question the final deter- 
 mination of which remains with the courts.* A statute 
 which made the decision of a legislature or commission 
 conclusive as to rates, or which forbade recourse to the 
 courts would be clearly invalid,' and a statute which 
 
 ' Mo., Kan. & Texas Ry. v. Inter- 134, 58 L. ed. 538, 34 Sup. Ct. 283; 
 state Commerce Commission, 164 Detroit & M. Ry. v. Michigan Rail- 
 Fed. 645; Mitchell Coal & Coke Co. road Commission, 235 U. S. 402, 35 
 V. Penn. Ry., 230 U. S. 247, 57 L. ed. Sup. Cf. 136. 
 1494, 30 Sup. Ct. 916. ' Ex parte Young, 209 U. S. 123, 
 
 » Bacon v. Rutland Ry., 232 U. S. 52 L. ed. 714, 28 Sup. Ct. 441; Mo. 
 
 [ 1036 ] 
 
Judicial Review of Commission Action [ § 1137 
 
 sought to accomplish the same result indirectly, as by 
 the infliction of outrageous penalties for disobedience to 
 a commission's order pending appeal, would likewise be 
 void.* It is the substantial right of a judicial hearing that 
 is protected, however the attack upon it may be veiled. 
 But the mere failure to make explicit provision for an 
 appeal from a commission to the courts is not construed 
 as a denial of the right.'' Presumably it was intended that 
 such a right should be enjoyed, and this presumption 
 yields only to the plain provisions of the statute, which in 
 turn must yield to the superior authority of the Federal 
 Constitution. But the right to a judicial hearing as to 
 the validity of orders of the Interstate Commerce Commis- 
 sion appUes only to its affirmative orders. If the Commis- 
 sion denies the redress which the petitioner seeks at its 
 hands, he has no remedy.^" This situation has led the 
 Commission to say, "In doubtful cases the Commission 
 will not overlook the fact that if it errs in construing the 
 law against the complainant he has no reUef, since no 
 appeal will lie from the Commission's decision." ^' "As to 
 the shipper, this tribunal is his one and only resort against 
 injustice." ^^ But cases in which the Commission denies 
 relief, because not convinced that it should be given, should 
 be distinguished from cases in which it denies relief be- 
 cause it holds that the reUef asked for is not within its 
 jurisdiction. In the former class of cases the decision of 
 the Commission is final, but in the latter, if the Commis- 
 
 Pac. Ry. V. Tucker, 230 U. S. 340, '» Proctor and Gamble v. United 
 
 57 L. ed. 1507, 33 Sup. Ct. 961. States, 225 U. S. 282, 56 L. ed. 1091, 
 
 «Mo. Pac. Ry. v. Nebraska, 217 32 Sup. Ct. 761; Hooker v. Knapp, 
 
 U. S. 196, 54 L. ed. 727, 30 Sup. Ct. 225 U. S. ,302, 56 L. ed. 1069, 32 Sup. 
 
 461; Chesapeake & Ohio Ry. V. Con- Ct. 769; Western N. Y. & P. Ry. 
 
 ley, 230 U. S. 513, 57 L. ed. 1597, v. Penn Refining Co., 137 Fed. 
 
 33 Sup. Ct. 985; Wadley Southern 343. 
 
 Ry. V. Georgia, 235 U. S. 651, 35 " Miner v. N. Y., N. H. & H. Ry., 
 
 Sup. Ct. 214. 11 I. C. C. 422. 
 
 » Louisville & Nashville Ry. v. '^ In re Advances in Rates, West- 
 
 Garrett, 231 U. S. 298, 68 L. ed. 229, em Case, 20 I. C. C. 307. 
 
 34 Sup. Ct. 48. 
 
 [ 1037 ] 
 
§ 1138] Raileoad Rate Regulation 
 
 • 
 
 sion is mistaken as to its jurisdiction, tiie courts will cor- 
 rect the error of law, and mandamus will lie to compel 
 the Commission to exercise the jurisdiction with which it 
 has been vested.^' 
 
 § 1138. Jurisdiction of the Federal courts. 
 
 The right of the Federal courts to review the orders and 
 decisions of the Interstate Commerce Commission is de- 
 rived from two sources. First, they have such jurisdic- 
 tion as is expressly conferred by the Act to Regulate In- 
 terstate Commerce and its amendments. Second, they have 
 such jurisdiction as is conferred upon them by the general 
 judiciary acts of Congress. It was not intended by the 
 Interstate Commerce Act to abbreviate the plenary juris- 
 diction of the Federal courts to entertain all controversies 
 arising under an Act of Congress, either at law or equity, 
 but the special remedies afforded by that Act were in- 
 tended as merely supplementary to the ordinary remedies 
 already existing under the Judicial Code. Although equi- 
 table jurisdiction over a particular controversy arising 
 under the Interstate Commerce Act may not have been 
 conferred upon the courts of the United States by the 
 provisions of that Act, such courts may nevertheless en- 
 tertain jurisdiction by virtue of the Judicial Code, which 
 confers the powers of an equity court as to all cases and 
 controversies arising under any act of Congress."" The 
 Supreme Court had this distinction in mind when it said, 
 "We are not required to say, however, that because an 
 action at law for damages to recover unreasonable rates 
 which have been exacted in accordance with the schedule 
 of rates as filed, is forbidden by the Interstate Commerce 
 Act, [see the Abilene Case, 204 U. S. 406] a suit in equity 
 is also forbidden to prevent a filing or enforcement of a 
 
 " Interstate Commerce Commis- "" Little Rock & M. Rd. Co. v. 
 
 sion V. Humboldt Steamship Co., E. T., V. & G. Ry., 47 Fed. 771; 
 
 224 U. S. 474, 56 L. ed. 849, 32 Sup. Tift v. Southern Ry., 123 Fed. 
 
 Ct. 556. 789. 
 
 [ 1038 ] 
 
Judicial Review of Commission Action [ § 1139 
 
 schedule of unreasonable rates or a change to unjust or 
 unreasonable rates." i'* Hence if the remedies provided 
 in the Act are inadequate, or are inapplicable, complain- 
 ant may resort to the Federal courts under the provisions 
 of the Judicial Code. And if the right which he seeks to 
 enforce arises under the commerce clause, it is immaterial 
 that it also exists at common law.^'^ Since suits under the 
 commerce clause of the Constitution necessarily involve 
 a Federal question, diversity of citizenship is not material 
 to the maintenance of Federal jurisdiction. ^^ A suit to 
 recover damages for acts which constitute a violation of 
 the Interstate Commerce Act, the construction of which 
 is in dispute between the parties, presents a Federal ques- 
 tion for which it may, even if begun in a State court, be 
 removed to a Federal court. ^^ The Judicial Code (sec. 24, 
 par. 8) and the District Court Jurisdiction Act of Oct. 22, 
 1913, vest in the district courts of the United States 
 original jurisdiction of all suits and proceedings arising 
 under any law regulating commerce. If therefore a right 
 conferred by a Federal statute is violated, recourse may 
 be had to the district courts. Or if the Commission in 
 the exercise of the power with which it is vested violates 
 any right existing under the Federal Constitution, recourse 
 may be had to the Federal courts for the amendment of its 
 action. In this review of the orders of the Commission, the 
 courts are concerned not with the expediency of the order 
 but only with the power of the Commission to make it. 
 
 § 1139. Constitutional and statutory limitations distin- 
 guished. 
 
 The problem which arises in all cases where the ques- 
 
 "• Southern Ry. v. Tift, 206 U. S. " Kentucky & Indiana Bridge Co. 
 
 428, 51 L. ed. 1124, 27 Sup. Ct. 709. v. L. & N. Ry., 37 Fed. 567, 2 L. R. A. 
 
 See the same case in the lower court, 289, 2 Int. Com. Rep. 351. 
 
 123 Fed. 789. " Lowry v. C, B. & Q. Ry., 46 
 
 's Toledo, A. A. & N. M. Ry. v. Fed. 83, 4 Int. Com. Rep. 435. 
 Pennsylvania Co., 54 Fed. 730, 5 
 Int. Com. Rep. 522. 
 
 [ 1039 ] 
 
§ 1139] Railroad Rate Regulation 
 
 tion of the limits upon the jurisdiction of a commission 
 is raised', is whether there is warrant of law for what is 
 being done. To determine this is seldom as simple a 
 matter as the reading of the statute under which the 
 commission is purporting to act to see whether by proper 
 interpretation sufficient authorization appears. If there 
 is any doubt as to whether the power in question may 
 constitutionally be conferred upon the coimnission, that 
 question must be carefully considered. The action of a 
 commission is fundamentally limited by these two pos- 
 sibiUties — either that the legislature has not gone as far 
 as it might in empowering the commission, or that the 
 legislature has gone further than it constitutionally may 
 in attempting to give the commission authority. This 
 distinction between the constitutional limitations upon all 
 administrative powers and the statutory limitations upon 
 the particular commission is often obscured, but must 
 necessarily be made in analyzing authorities. In dealing 
 with the decisions of the Supreme Court of the United 
 States on commission control of public utilities, it is par- 
 ticularly necessary to insist upon this distinction, so often 
 is it ignored with such danger of confusing the principles 
 of law involved. Fortunately the cases with which the 
 United States Supreme Court has had to deal relating to 
 the general matter under discussion may be divided with 
 unusual facility into these two classes. The cases which 
 come to the Supreme Court wherever complaint is made 
 of illegal action by State commissions arise under the 
 Fourteenth Amendment, and are therefore devoted to the 
 constitutional limitations upon commission action; for the 
 proper interpretation of a State statute is not a Federal 
 question.^* On the other hand, the questions which come 
 
 " See Minneapolis & St. L. Ry. v. Court on March 8, 1915 in the North 
 
 Minnesota, 186 U. S. 257, 46 L. ed. Dakota and West Virginia rate cases 
 
 1161, 22 Sup. Ct. 901, and other aim- to the effect that disproportionate 
 
 ilar cases elsewhere discussed, as for rates arbitrarily fixed under a statute 
 
 instance in § 238; but see the deci- ai-e in effect a denial of constitutional 
 
 sions handed down by the Supreme right. 
 
 [ 1040 ] 
 
Judicial Review of Commission Action [ § 1140 
 
 to the Supreme Court where the power of the Interstate 
 Commerce Commission to act has been attacked have 
 usually been questions involving the statutory limitations 
 of the Interstate Commerce Act, although occasionally the 
 constitutional limits upon congressional authorization have 
 been brought in question. Recourse to the courts to settle 
 these questions is itself governed by these principles. The 
 vindication of the constitutional securities of those whose 
 rights have been invaded cannot be withdrawn from the 
 courts, nor can the power to say whether the coercion in 
 question is without warrant of law. In the case of the 
 Interstate Commerce Commission, Congress has left to the 
 judgment of that body upon the facts before it about as 
 much finality as is constitutionally possible." But ex- 
 amination of the facts which are material to the contro- 
 versy is so indispensable in any justiciable question that 
 the Federal courts often seem to be reviewing the discre- 
 tion of the Commission as to facts, when they are in reality 
 only keeping it within the laws. 
 
 B. Grounds of Invalidity of Commission Action 
 
 § 1140. Action under an unconstitutional statute. 
 
 It is assumed in the Act that the Commission may make 
 orders which should not be enforced, for it is expressly 
 provided that "all orders of the Commission, except for 
 the payment of money, shall take effect within such rea- 
 sonable time, not less than thirty days, and shall continue 
 in force for such period of time, not exceeding two years, 
 as shall be prescribed by the Commission, unless the same 
 shall be suspended or set aside by a court of competent 
 jurisdiction." The grounds upon which the courts will ex- 
 ercise this right of review are determined in each case as it 
 arises by the courts themselves.^" The validity of the Act 
 
 " See Atchison, T. & S. F. Ry. v. setting aside rates reasonable in 
 
 U. S., 232 U. S. 199, 68 L. ed. 568, 34 themselves is not authorized by the 
 
 Sup. Ct. 291, and other similar cases Act properly interpreted, 
 elsewhere discussed, for example in ™ Reagan v. Farmers' Loan & 
 
 .§ 1036-1038 passim to the effect that Trust Co., 154 U. S. 362, 38 L. ed. 
 
 66 [ 1041 ] 
 
§ 1140 ] Railboad Rate Regulation 
 
 as a whole is now too well settled to be questioned, but 
 many of its provisions and several of the amendments have 
 been attacked as an invasion of constitutional right. The 
 Commission's interpretation of the Act and of its own 
 powers under it have not infrequently been set aside by 
 the courts, but in no case have they declared any part of 
 the Act invalid because of conflict with the Constitution. 
 The Acts under which the State commissions have been 
 organized have not had an equally untroubled career. 
 The legislatures of the several States are restrained not 
 only by the provisions of their own constitutions, but their 
 acts must also conform to the Federal Constitution and 
 to the authority of Congress over commerce. The author- 
 ity of Congress over interstate rates is exclusive, and any 
 attempt by the States to regulate rates for interstate 
 transportation is void. Hence a rate prescribed on car- 
 riage from a point within a State to a port in the same 
 State from which the goods are to be sent to a point with- 
 out the State is an interference with taterstate commerce 
 and is invalid. ^^ In many of the States a sentiment more 
 hostile to carriers than has ever controlled Congress seemed 
 to dominate the legislature, and this was manifested in 
 some cases by fixing confiscatory rates and in others by 
 attempting to exempt the orders of the commission from 
 review by the courts. These provisions have always been 
 set aside as being in violation of the Fourteenth Amend- 
 ment. The jurisdiction of the State commissions is further 
 limited by the existence of the Federal Act. The fact 
 that Congress has exerted its power over interstate com- 
 merce deprives the States and their commissions of power 
 to make many regulations which would otherwise be valid. 
 A recent decision indicates that the control of the whole 
 system of rates, both interstate and intrastate, may be 
 
 1014, 14 Sup. Ct. 1047. It is of until declared void by the courts, 
 
 course possible to provide by statute "^ Railroad Commission of Ohio v. 
 
 that a rate fixed by a commission Worthington, 225 U. S. 101, 56 L. ed. 
 
 shall be binding between the parties 1104, 32 Sup. Ct. 653. 
 
 [ 1042 ] 
 
Judicial Review of Commission Action [ § 1141 
 
 assumed by the Federal Government if in its judgment 
 this is necessary to the efficient regulation of interstate 
 commerce. 22 Even though- Congress has not yet acted 
 upon this principle, it has been held that a State commis- 
 sion may not so exert its authority as to interfere in any 
 way with the authority confided to the Interstate Com- 
 merce Commission, and an interstate rate fixed by a 
 State commission which operates to create a discrimination 
 against a locality in interstate traffic may be set aside by 
 the Interstate Commerce Commission. ^^ 
 
 § 1141. Action not within the statute. 
 
 Granted that the Act in all its parts is constitutional, 
 the Commission must find in it authority for whatever it 
 does; and whether such authority exists is a question for 
 the courts to determine. In an important case it was said 
 by eminent counsel, "The Act is primarily an enumeration 
 of particular duties imposed upon common carriers; of 
 particular acts on their part which are prohibited; and of 
 particular duties and powers relating thereto conferred 
 upon the Commission." ^^ In many cases acts of the 
 Commission have been set aside because the requisite au- 
 thority could not be found. In the main the courts com- 
 pare the action of the Commission with the Act in the 
 same way that they compare the action of Congress with 
 the Constitution. Since the Act authorized it to declare 
 rates unreasonable and prevent their enforcement, the 
 Commission assumed that it was authorized to fix a rea- 
 sonable rate, but prior to the amendment of 1906, its 
 orders fixing rates were always declared invalid by the 
 courts." Likewise when the Commission ordered a 
 
 " Minnesota Rate Cases, 230 U. S. Interstate Commerce Commission, 
 
 362, 57 L. ed. 1511, 33 Sup. Ct. 749. 211 U. S. 407, 53 L. ed. 253, 29 Sup. 
 
 " Houston & Texas Ry. v. United Ct. 115. 
 
 States, 234 U. S. 342, 34 Sup. Ct. 833, " Interstate Commerce Commis- 
 
 58 L. ed. 1341. sion v. C, N. O. & T. P. Ry., 162 
 
 " Brief of John C. Spooner and U. S. 184, 40 L. ed. 935, 16 Sup. Ct. 
 
 John G. Milburn in Harriman v. 700, 13 U. S. Apps. 730, 56 Fed. 925, 
 
 [ 1043 ] 
 
§ 1141 ] Railroad Rate Regulation 
 
 through route estabUshed under authority of section 4 of 
 the act of June 29, 1906, which, as it then stood, author- 
 ized it to require the estabUshment of such a route when 
 no satisfactory through route existed, the court held that 
 the Commission's decision as to the existence of a satis- 
 factory through route was subject to review, and in this 
 case it was reversed.^* So also when the Commission, on 
 petition of a carrier, ordered the establishment of switch- 
 ing connections, the courts pointed out that such an order 
 could be made only on petition of a shipper, and held the 
 Commission strictly to the letter of the Act.^' Further- 
 more in determining whether an order of the Commission 
 is within its power, the courts will look to the substance 
 and not merely to the form. And so when the Commis- 
 sion prohibited an advance in rates, not, as shown by the 
 record, because it was unjust and unreasonable, but be- 
 cause it would be beneficial to the business of the region 
 affected to retain the lower rate, the court found that the 
 Commission had no power to regulate and control the 
 general policy of railroads as to fixing rates, but only the 
 
 4 I. C. C. Rep. 582, 4 I. C. C. 744; Fed. 1002, 74 Fed. 784, 49 Fed. 177, 
 
 Interstate Commerce Commission 4 I. C. C. 535; Interstate Commerce 
 
 V. C, N. O. & T. P. Ry., 167 U. S. Commission v. N. E. Ry. of S. C, 
 
 479, 42 L. ed. 243, 17 Sup. Ct. 896, 83 Fed. 611, 74 Fed. 70, 6 I. C. C. 
 
 76 Fed. 1007, 76 Fed. 183, 64 Fed. 295; Farmers' Loan & Trust Co. v. 
 
 981, 62 Fed. 690, 6 I. C. C. 195; S. F. No. Pac. Ry., 83 Fed. 249, 5 I. C. C. 
 
 & W. Ry. V. Florida Fruit Exchange, 478; Colorado Fuel & Iron Co. v. 
 
 167 U. S. 512, 42 L. ed. 257, 17 Sup. So. Pac. Ry., 101 Fed. 779, 74 Fed. 
 
 Ct. 998, 4 I. C. Rep. 589, 4 I. C. Rep. 42, 6 I. C. C. 488; Interstate Com- 
 
 400, 5 I. C. C. 136, 5 I. C. C. 13; merce Commission v. N. Y., R. & N. 
 
 Interstate Commerce Commission Ry., not reported, see 7th Annual 
 
 V. L. S. & M. S. Ry., 202 U. S. 613, Report of Interstate Commerce Com- 
 
 50 L. ed. 1171, 26 Sup. Ct. 766, 134 mission, 29, 5 I. C. C. 161, 4 I. C. C. 
 
 Fed. 942, 9 I. C. C. 264; Interstate 488. 
 
 Commerce Commission v. Ala. Mid. ^ Interstate Commerce Commis- 
 
 Ry., 168 U. S. 144, 42 L. ed. 414, 18 sion v. No. Pac. Ry., 216 U. S. 538, 54 
 
 Sup. Ct. 45, 74 Fed. 715, 69 Fed. 227, L. ed. 608, 30 Sup. Ct. 155. 
 
 6 I. C. C. 1; Interstate Commerce ^'Interstate Commerce Commis- 
 
 Commission v. L. & N. Ry., 73 Fed. sion v. D., L. & W. Ry., 216 U. S. 
 
 409, 5 I. C. C. 466; Interstate Com- 531, 54 L. ed. 605, 30 Sup. Ct. 
 
 merce Commission v. L. V. Ry., 82 415. 
 
 [1044] 
 
Judicial Review of Commission Action [ § 1142 
 
 power to prevent unreasonable and discriminatory rates, 
 and hence the order was set aside. ^* Likewise if the Com- 
 mission attempts to exercise jurisdiction which it does not 
 possess, as in the case of street car hnes ^' or an intrastate 
 road which issued no bills of lading beyond its own line,'" 
 or if through a mistaken construction of the Act it declines 
 jurisdiction which it does possess, ^^ its error will be cor- 
 rected by the courts. But in determining the meaning of 
 a statute, the courts should look not only to its terms but 
 to the history of its application. Hence, when the Com- 
 mission has placed a construction upon some feature of 
 the Act, which construction has long obtained in practical 
 execution, and has been impliedly sanctioned by the re- 
 enactment of the Act without alteration in the particulars 
 construed, such construction should be treated as read 
 into the Act and should be followed in all strictly identical 
 cases.'^ Since all the authority of a commission is de- 
 rived from the statute by which it was created, it follows 
 that the repeal of the statute ipso facto terminates all pro- 
 ceedings pending before it, whatever may be the stage 
 which they have reached.'' 
 
 § 1142. Action in violation of constitutional guarantees. 
 
 It is recognized that the rate-making power necessarily 
 implies a considerable range of legislative discretion, and as 
 long as the legislative action is within its proper sphere, 
 the courts are not entitled to interpose and upon their own 
 investigation into traffic conditions and transportation 
 problems to substitute their judgment with respect to the 
 
 2* Southern Pacific Ry. v. Inter- '' Interstate Commerce Commis- 
 
 state Commerce Commission, 219 sion v. Humboldt Steamship Co., 224 
 
 U. S. 433, 55 L. ed. 283, 31 Sup. Cfc. U. S. 474, 56 L. ed. 849, 32 Sup. Ct. 
 
 288. 656. 
 
 2» Omaha & Council Bluffs Street '^ New York, N. H. & H. Ry. v. 
 
 Ry. V. Interstate Commerce Commis- Int. Com. Comm., 200 IT. S. 361, 50 
 
 sion, 230 U. S. 324, 57 L. ed. 1501, 33 L. ed. 515, 26 Sup. Ct. 272. 
 
 Sup. Ct. 890. •■'' Grand Trunk Ry. v. County 
 
 ™ Interstate Commerce Commis- Commissioners, 88 Me. 225, 33 Atl. 
 
 sion V. B. Z. & C. Ry., 77 Fed. 942. 988. 
 
 [ 1045 ] 
 
§ 1142 ] Railroad Rate Regulation 
 
 reasonableness of rates for that of the legislature or of a 
 Federal or State commission acting within the range of its 
 delegated power. '^ Granted that the statute under which 
 a commission is acting is constitutional, and that the 
 commission is vested with the power which it has exer- 
 cised, the question still remains as to whether it has so 
 used its powers as to violate any constitutional right. 
 This question is particularly important in connection with 
 the fixing of rates. It is now well estabhshed that this is 
 a function which may be delegated to a commission, but 
 if this is done the power must be so used as not to con- 
 flict with the Fifth and Fourteenth Amendments. While 
 the commissions, both Federal and State, are expected to 
 exercise their rate-making powers to protect the interests 
 of the public, they must also have regard to the property 
 rights of the carrier. They are not at liberty to prescribe 
 rates that will not allow the carrier to earn such compen- 
 sation for the services rendered as, under all the circum- 
 stances, is just and reasonable both to it and to the pubUc, 
 for that would deprive the carrier of its property without 
 due process of law, and would be taking its property for 
 public use without just compensation. Every rate sched- 
 ule fixed by a commission is therefore open to review in 
 the courts for the purpose of ascertaining whether the 
 rates fixed are confiscatory and whether the carrier's con- 
 stitutional rights have been violated,'^ and any statute 
 which attempted to prevent such judicial action would be 
 void.^* It should be noted, however, that the carrier can 
 complain of the order of the commission only in so far 
 as it affects its own revenues. Its effect on shippers or 
 on localities is immaterial to the carrier, since a court will 
 hear a party only with reference to his own grievances." 
 
 '^ Louisville & Nashville Ry. v. state Commerce Commission, 164 
 
 Garrett, 231 U. S. 298, 58 L. ed, 229, Fed. 645. 
 34 Sup. Ct. 48. " Atlantic Coast Line Ry. v. Inter- 
 
 ^' Lehigh Valley Ry. v. United state Commerce Commission, 194 
 
 States, 204 Fed. 986. Fed. 449. 
 
 '" Missouri, K. & T. Ry. v. Inter- 
 
 [ 1046 ] 
 
Judicial Review of Commission Action [ § 1143 
 
 Neither will the courts interfere with a rate fixed by the 
 Conumssion when its effect is to entail a loss of traffic by- 
 other roads/* nor will they interfere with such a rate un- 
 less convinced that its enforcement will result in a loss of 
 revenue. '' A State may do more than authorize its courts 
 to review judicially the rate-making orders of its commis- 
 mission. It may go farther and in connection with such 
 review it may empower its judicial tribunals to act as a 
 rate-making body and themselves fix a schedule of rates. ^^ 
 But the Fourteenth Amendment does not entitle the car- 
 rier to the exercise by the courts of such extra-judicial 
 authority," and the Federal courts have not been given any 
 such authority.*^ 
 
 § 1143. Action after an inadequate hearing. 
 
 The Commission as a quasi- judicial body is vested with 
 many of the powers of a coiu-t. It may summon parties 
 before it, may compel the production of papers and the 
 giving of testimony, and may make orders which have the 
 force of law. It is likewise subject to many of the obliga- 
 tions and restraints which rest upon a court. If it may 
 summon parties before it and issue orders which may de- 
 prive them of property and in certain respects control their 
 conduct, the parties so affected must have an opportu- 
 nity to be heard. There are few cases in which this ques- 
 tion has directly arisen, but in all of them it is distinctly 
 recognized that administrative orders, quasi-judicial in 
 character, are void if a hearing was denied, or if that 
 which was granted was inadequate or unfair. But if the 
 
 '* Norfolk & Western Ry. v. " Prentis v. Atlantic Coast Line 
 
 United States, 195 Fed. 953. Ry., 211 U. S. 210, 53 L. ed. 150, 29 
 
 '9 Central of Georgia Ry. v. Mc- Sup. Ct. 67. 
 
 Lendon, 157 Fed. 961. That the "Louisville & Nashville Ry. v. 
 
 rate violates the constitutional rights Garrett, 231 U. S. 298, 58 L. ed. 229, 
 
 of the carrier must be clear in order 34 Sup. Ct. 48. 
 
 to justify the interference of the *^ Mitchell Coal Co. v. Penn. Ry., 
 
 courts. Eagle White Lead Co. v. 230 U. S. 247, 57 L. ed. 1472, 30 Sup. 
 
 Interstate Commerce Commission, Ct. 916. 
 188 Fed. 256. 
 
 [ 1047 ] 
 
§ 1144 ] Railroad Rate Regulation 
 
 defendant has notice of the character of the order asked 
 for and an opportunity to show that it would be unreason- 
 able to grant it, it has not been deprived of its right to a 
 hearing.*' All this is involved in our notion of due process 
 of law. Whether the circumstances of the exercise of the 
 power to give orders are such as conduce to justice may 
 therefore be the subject of inquiry by the courts. This 
 can always be done, as the questions raised are in a true 
 sense justiciable. Whether the order deprives the carrier 
 of a constitutional or statutory right, and whether the 
 hearing was adequate and fair, are all matters within the 
 scope of the judicial power. In the comparatively few 
 cases in which such questions have arisen it has been 
 pointed out that it has invariably been recognized that 
 administrative orders quasi- judicial in character are void — 
 (1) if a hearing was denied; (2) if although granted it was 
 inadequate or manifestly unfair; (3) if the finding was 
 contrary to the indisputable character of the evidence; 
 (4) or if the facts found do not as a matter of law support 
 the order made.** 
 
 § 1144. Action upon mistaken conclusions of law. 
 
 Congress has made the Commission's findings prima 
 facie true, which is as far as it can constitutionally go 
 towards making them conclusive. The Commission's find- 
 ings of fact are often so intermixed with questions of law 
 that an examination and even a construction of the facts 
 may be necessary in order to keep the Commission within 
 its powers. This necessitates an examination of the evi- 
 dence, not for the purpose of reconciling conflicts of testi- 
 mony or of deciding upon pure questions of fact, but only 
 
 " Oregon Ry. & N. Co. v. Fair- " Atlantic C. L. Ry. v. Interstate 
 
 child, 224 U. S. 510, 56 L. ed. 863, Commerce Commission, 194 Fed. 
 
 32 Sup. Ct. 535. 449. 
 
 See also United States v. Balti- See also Interstate Commerce 
 
 more & O. S. W. Ry., 226 U. S. 14, Commission v. Louisville & N. Ry., 
 
 57 L. ed. 104, 33 Sup. Ct. 5, discussed 227 U. S. 88, 57 L. ed. 431, 33 Sup. 
 
 in the next section. Ct. 185, discussed in the next section. 
 
 [ 1048 ] 
 
Judicial Review of Commission Action [ § 1144 
 
 to determine whether what purports to be a finding of fact 
 is so involved with questions of law as to be in substance 
 and effect a decision of the latter/* The conclusions of 
 the Commission are also subject to review if it has ex- 
 cluded facts and circumstances that ought to have been 
 considered/^ Even when the facts are not disputed, the 
 Commission's power to make the order in question is open 
 to review, and if not warranted by law its order may be 
 enjoined/^ In the exercise of this function of review the 
 courts have reversed many orders of the Commission be- 
 cause of erroneous conclusions of law. Before the long- 
 and-short haul clause was amended in 1910, the Commis- 
 sion at first did not recognize the existence of competition 
 as a difference in circumstance and condition which justi- 
 fied a difference in rates, and on this point it was fre- 
 quently reversed by the courts.^ On the following ques- 
 
 *^ Kansas City Ry. v. Albers 
 
 Commission Co., 223 U. S. 573, 56 
 L. ed. 556, 32 Sup. Ct. 316. 
 
 « Cincinnati, N. O. & T. P. Ry. v. 
 Interstate Commerce Commission, 
 162 U. S. 184, 40 L. ed. 935, 16 Sup. 
 Ct. 700; Texas & Pacific Ry. v. 
 Interstate Commerce Commission, 
 162 U. S. 197, 40 L. ed. 940, 16 Sup. 
 Ct. 666; Interstate Commerce Com- 
 mission V. Alabama Mid. Ry., 168 
 U. S. 144, 42 L. ed. 414, 18 Sup. Ct. 
 45; Louisville & N. Ry. v. Behlmer, 
 175 U. S. 648, 44 L. ed. 309, 20 Sup. 
 Ct. 209; Illinois Cent. Ry. v. Inter- 
 state Commerce Commission, 206 
 U. S. 441, 51 L. ed. 1127, 27 Sup. 
 Ct. 700. 
 
 " Interstate Commerce Commis- 
 sion V. B. & O. Ry., 225 U. S. 326, 
 56 L. ed. 1107, 32 Sup. Ct. 742; 
 Stickney v. Interstate Commerce 
 Commission, 164 Fed. 638. 
 
 ** Interstate Commerce Commis- 
 sion V. A., T. & S. F. Ry., 149 U. S. 
 264, 37 L. ed. 727, 13 Sup. Ct. 837, 
 50 Fed. 295, 4 I. C. C. 104; Texas 
 
 & Pacific Ry. v. Interstate Commerce 
 Commission, 162 U. S. 197, 40 L. ed. 
 940, 16 Sup. Ct. 666, 57 Fed. 948, 52 
 Fed. 187, 4 I. C. C. Rep. 62, 4 I. C. C. 
 447; Interstate Commerce Commis- 
 sion V. Clyde Steamship Co., 181 
 U. S. 29, 45 L. ed. 729, 21 Sup. Ct. 
 512, 93 Fed. 83, 88 Fed. 186, 5 1. C. C. 
 324; East Tennessee, V. & G. Ry. v. 
 Interstate Commerce Commission, 
 181 U. S. 1, 45 L. ed. 719, 21 Sup. Ct. 
 512, 99 Fed. 52, 85 Fed. 107, 5 I. C. C. 
 546; Interstate Commerce Commis- 
 sion V. Ala. Mid. Ry., 168 U. S. 144, 
 42 L. ed. 414, 18 Sup. Ct. 45, 74 Fed. 
 715, 69 Fed. 227, 6 I. C. C. 1; Louis- 
 ville & N. Ry. V. Behlmer, 175 U. S. 
 648, 44 L. ed. 309, 20 Sup. Ct. 209, 83 
 Fed. 898, 71 Fed. 835, 6 I. C. C. 257; 
 Interstate Commerce Commission v. 
 So. Ry., 105 Fed. 703, 6 I. C. C. 588; 
 Brewer & Hanleiter v. C. of Ga. Ry., 
 84 Fed. 258, 7 I. C. C. 224; Inter- 
 state Commerce Commission v. L. & 
 N. Ry., 190 U. S. 273, 47 L. ed. 1047, 
 23 Sup. Ct. 687, 108 Fed. 988, 101 
 Fed. 146, 102 Fed. 709, 7 I. C. C. 
 [ 1049 ] 
 
§1144 
 
 Railroad Rate Regulation 
 
 tions of law and fact the decisions of the Commission were 
 overruled, the courts holding that a bridge is not a com- 
 mon carrier; ^' that competition is to be considered in fix- 
 ing rates under section 3; ^ that party rates are not 
 discriminatory; ^^ that the granting of free cartage at a 
 terminal is not a rebate; ^^ nor a violation of the long-and- 
 short-haul clause; ^^ that there is no discrimination against 
 shippers if they are not offered a facility for which they 
 have never asked; " that the value of an article should be 
 considered in determining the rate to be paid; ^* that a 
 switching charge which is reasonable in itself cannot be 
 condemned because when added to the through charge the 
 whole is unreasonable; '^ that an elevator allowance paid 
 to a shipper for treatment of his own grain at his own 
 elevator is not a rebate; *^ that a carrier may charge dif- 
 ferent rates on a commodity at different seasons of the year; ^* 
 
 431; Interstate Commerce Commis- 
 sion V. So. Ry., 122 Fed. 800, 117 Fed. 
 741, 8 I. C. C. 571, 8 I. C. C. 409; 
 Interstate Commerce Commission v. 
 So. Pac. Ry., Circuit Com't, Califor- 
 nia (not reported), 8 I. C. C. 481; 
 Interstate Commerce Commission v. 
 N. C. & St. L. Ry., 120 Fed. 934, 8 
 I. C. C. 503; Interstate Commerce 
 Commission v. C. P. & V. Ry., 124 
 Fed. 624, 9 I. C. C. 118. 
 
 *' Kentucky & Indiana Bridge Co. 
 V. L. & N. Ry., 37 Fed. 567, 2 1. C. C. 
 193, 2 I. C. C. 162. 
 
 ™ Interstate Commerce Commis- 
 sion V. C. G. W. Ry., 209 U. S. 108, 
 52 L. ed. 705, 28 Sup. Ct. 493. 
 
 " Interstate Commerce Commis- 
 sion V. B. & O. Ry., 145 U. S. 263, 40 
 L. ed. 699, 12 Sup. Ct. 844, 43 Fed. 
 37, 3 I. C. C. 465. 
 
 ^^ Interstate Commerce Commis- 
 .sion V. D., G. H. & M. Ry., 167 U. S. 
 633, 42 L. ed. 306, 17 Sup. Ct. 986, 57 
 Fed. 1005, 3 I. C. C. 613. 
 
 *' Interstate Commerce Commis- 
 
 [ 1050 ] 
 
 sion V. A., T. & S. F. Ry., 149 U. S. 
 264, 37 L. ed. 727, 13 Sup. Ct. 837, 
 50 Fed. 295, 4 I. C. C. 104. 
 
 " Penn Refining Co. v. W. N. Y. 
 & P. Ry., 208 U. S. 208, 52 L. ed. 456, 
 28 Sup. Ct. 268, 137 Fed. 343, 82 
 Fed. 192, 6 I. C. C. 449, 6 I. C. C. 
 378, 6 I. C. C. 52, 5 I. C. C. 415. 
 
 ** Interstate Commerce Commis- 
 sion V. D., L. & W. Ry., 64 Fed. 723, 
 6 I. C. C. 148. 
 
 ^ Interstate Commerce Commis- 
 sion V. Stickney, 215 U. S. 98, 54 
 L. ed. 112, 30 Sup. Ct. 66, 164 Fed. 
 638, 12 I. C. C. 507, 12 I. C. C. 6, 11 
 I. C. C. 277, 10 I. C. C. 83. 
 
 " Interstate Commerce Commis- 
 sion V. Diffenbaugh, Union Pac. Ry. 
 V. Peavey, 222 U. S. 42, 56 L. ed. 83, 
 32 Sup. Ct. 22, 176 Fed. 409, 14 
 I. C. C. 551, 14 I. C. C. 510, 14 
 I. C. C. 317, 14 I. C. C. 315, 13 I. C. 
 C. 498, 12 I. C. C. 85, 10 I. C. C. 309. 
 
 ** Interstate Commerce Commis- 
 sion V. L. & N. Ry., 73 Fed. 409, 5 
 I. C. C. 466. 
 
Judicial Review of Commission Action [ § 1145 
 
 that a carrier is entitled to a reasonable profit on any extra 
 service which it performs; *' that the reservation of the right 
 of routing to the initial carrier is not prohibited by the Act; ''" 
 that a shipper is not legally entitled to ship on a local rate 
 to one point and thence reship on a local rate to another 
 point when the through rate is greater than the combination 
 of the locals; ^' that the Commission cannot compel by in- 
 junction the filing of reports that it has not asked for; ^^ that 
 payment of a lighterage allowance on a shipper's own goods 
 for the use of shipper's terminal was not discriminatory; ^^ 
 that a traction company is not a lateral branch line of a rail- 
 way within the meaning of section 15; ^* that tap lines are 
 common carriers; ^^ and that an existing through route is 
 not unsatisfactory simply because many travellers prefer 
 another one.^* 
 
 § 1145. Action contrary to evidence. 
 
 The Commission's conclusions of fact are accepted as 
 final provided there is substantial evidence to support 
 them. Evidence is as necessary to the discharge of the 
 Commission's quasi-judicial functions as is a hearing, and 
 a finding without evidence to support it is arbitrary and 
 
 5» Southern Ry. v. St. Louis Hay & 75, 200 Fed. 779, Commerce Court, 
 
 Grain Co., 214 U. S. 297, 53 L. ed. No. 38, 20 I. C. C. 200, 17 1. C. C. 40. 
 
 1004, 27 Sup. Ct. 678, 153 Fed. 728, «* United States v. B. & O. S. W. 
 
 149 Fed. 609, 11 I. C. C. 90. Ry., 226 U. S. 14, 57 L. ed. 104, 33 
 
 "' Southern Pacific Ry. v. Inter- Sup. Ct. 5, Commerce Court, No. 
 
 state Commerce Commission, 200 60, 195 Fed. 962, 20 I. C. C. 
 
 U. S. 536, 50 L. ed. 585, 26 Sup. Ct. 486. 
 
 330, 137 Fed. 606, 132 Fed. 829, 123 »' Tap Line Cases, 234 U. S. 1, 58 
 
 Fed. 597, 9 L C. C. 182. L. ed. 1185, 34 Sup. Ct. 741, 209 Fed. 
 
 «i Hope Cotton Oil Co. v. T. & P. 224, 23 L C. C. 549, 23 I. C. C. 277, 
 
 Ry., not reported, see 20th Ann. Rep. 234 U. S. 29, 34 Sup. Ct. 741, 58 
 
 of I. C. C. 46, 10 I. C. C. 696. L. ed. 1185, 34 Sup. Ct. 741, 209 Fed. 
 
 «2 United States v. Union Stock- 260, 23 I. C. C. 549, 23 I. C. C. 277. 
 
 yards, 226 U. S. 286, 67 L. ed. 226, «' Interstate Commerce Commis- 
 
 33 Sup. Ct. 83, 192 Fed. 348, 192 sion v. No. Pac. Ry., 216 U. S. 538, 
 
 Fed. 330, 1 Com. Ct. 189, 225; Ex 54 L. ed. 608, 30 Sup. Ct. 155, Circuit 
 
 parte Docket No. 25. Court not reported, see 23d Annual 
 
 " United States v. B. & O. Ry., 231 Report of Interstate Commerce Com- 
 
 U. S. 274, 56 L. ed. 1107, 34 Sup. Ct. mission, 37, 16 I. C. C. 300. 
 
 [ 1051 ] 
 
§1145] Railroad Rate Regulation 
 
 void.'^ Hence when it is contended that an order the en- 
 forcement of which is resisted was rendered without any 
 evidence whatever to support it, the consideration of such 
 a question involves not an issue of fact, but one of law 
 which it is the duty of the courts" to examine and decide.** 
 This may be done in a suit for damages on an order of the 
 Commission awarding reparation.*' It is not enough for 
 the Commission to say that its order is based on its own 
 investigation independent of the testimony of witnesses. '''' 
 "Such an investigation is quite different from a view by 
 a jury taken with notice and- subject to the order of a 
 court, and different again from the question of the right 
 of the Commission to take notice of results reached by it 
 in other cases, when its doing so is made to appear in the 
 record and the facts thus noticed are specified so that 
 matters of law are saved." ^* In reviewing an order of a 
 State commission directing a carrier to make track con- 
 nections with another carrier, the court said, "Here there 
 is no evidence of inadequate service, no proof of public 
 complaint or of a public demand, and no testimony that 
 any freight had been offered in the past for shipment be- 
 tween the points named, or that any such freight would be 
 offered in the future; nor was there any evidence whatever 
 as to the volume of freight that would use these tracks or 
 that the saving in freight and time to the shipper would 
 justify the admitted expense to the carrier, whether that 
 expense be $7,500, as found by the Commission, or $21,000, 
 as claimed by the carrier." " Under the Act to Regulate 
 Commerce, however, a suit in the Federal courts to enjoin 
 
 " Interstate Commerce Commis- ™ Oregon R. R. & N. Co. v. Fair- 
 
 sion V. L. & N. Ry., 227 U. S. 88, 57 child, 224 U. S. 510, 56 L. ed. 863, 
 
 L. ed. 431, 33 Sup. Ct. 185. 32 Sup. Ct. 535. 
 
 "' Florida East Coast Line v. " Justice Holmes in United States 
 
 United States, 234 U. S. 167, 58 L. ed. v. B. & O. Southwestern Ry., 226 
 
 1267, 34 Sup. Ct. 867; Louisville & U. S. 14, 20, 57 L. ed. 104, 33 Sup. 
 
 NashviUe Ry. v. Finn, 235 U. S. 601, Ct. 5. 
 
 35 Sup. Ct. 146. " Oregon R. R. & N. Co. v. Fair- 
 
 «» Atlantic Coast Line v. Interstate child, 224 U. S. 510, 531, 56 L. ed. 
 
 Commerce Commission, 194 Fed. 449. 863, 32 Sup. Ct. 535. 
 
 [ 1052 ] 
 
Judicial Review of Commission Action [ § 1146 
 
 an order of the Interstate Commerce Commission fixing 
 charges is not confined to an ascertainment of what was 
 determined by the Commission and to a consideration of 
 the sufficiency of the facts as determined by it to sustain 
 the order; but on the contrary the hearing may be de novo, 
 and may include the taking and consideration of evidence 
 other than that before the Commission." 
 
 § 1146. Limitation to evidence in the record. 
 
 This means that in order to have what may pass as 
 due process of law there .cannot be substantial disregard 
 of our ancient traditions. The Commission is not justi- 
 fied in condemning rates and making revisions upon mere 
 impressions and comparisons, but may act only upon facts 
 and conditions duly established. In this light the right 
 to a hearing which the Act provides must be fully pro- 
 tected. Manifestly there is no hearing in any true sense 
 unless the party knows what evidence is offered or con- 
 sidered, and is given opportunity to explain and refute it. 
 This is not merely a matter of proper construction of the 
 Act, it is a right which comes from the Constitution itself. 
 Even though it be recognized that the Commission is a 
 body of experts, it may not condemn a rate as unreason- 
 able merely upon the knowledge and accumulated experi- 
 ence of its members, but may do so only upon a full hear- 
 ing giving opportunity to the carrier to be heard. This 
 argument was brought out fully in the Supreme Court re- 
 cently where the contention was made that the findings 
 and orders of the Commission under section 15 might be 
 originally supported and subsequently defended by in- 
 formation which the Commission had gathered under sec- 
 tion 12 for general purposes. But the Supreme Court 
 would have none of this where the rights of parties were 
 involved. When the point was raised apparently for the 
 first time m United States v. Baltimore & Ohio South- 
 
 " Missouri, K. & T. Ry. Co. v. Interstate Commerce Commission, 
 
 164 Fed. 645. 
 
 [ 1053 ] 
 
§1147] Railroad Rate Regulation 
 
 western Railroad/* there was no question about the atti- 
 tude of the Supreme Court. The Supreme Court is now 
 plainly insistent that all parties before the Commission 
 in any proceedings directed against them must be fully 
 apprised of the evidence submitted or to be considered 
 and must be given opportunity to cross-examine witnesses 
 and to inspect documents and to offer evidence in explana- 
 tion and rebuttal. In no other way consistently with what 
 we consider due course of the administration of justice can 
 a party maintain its fights or make out its defense. More- 
 over, as the Supreme Court has keenly appreciated, in no 
 other way can the courts inquire as to the existence of 
 evidence upon which the finding might be based ; for other- 
 wise, even though it appeared that the order was without 
 evidence, the manifest deficiency could always be explained 
 on the theory that the Commission had before it extrane- 
 ous, unknown, but presumptively sufficient, information 
 to support the finding. 
 
 § 1147. Conclusiveness of Commission findings. 
 
 If, however, the Commission's conclusion is supported by 
 evidence it is final. The evidence must be substantial; 
 the public interests involved are so many and so vast that 
 a mere scintilla of proof is not enough.'^° Where there is a 
 very considerable mass of testimony, which, if believed 
 
 '< 226 U. S. 14, 57 L. ed. 104, 33 The court held the admission of 
 
 Sup. Ct. 5. said report was not prejudicial on 
 
 In a petition to the Circuit Court the ground that it included the ex- 
 
 to enforce an order of the Commission traneous opinions and conclusions 
 
 before the judge sitting without a of the Commission. Chicago, B. & 
 
 jury, the full report of the Commis- Q. R. R. Co. v. Feintuch, 191 Fed. 
 
 sion, containing a commingled state- 482. 
 
 ment of opinion drawn from the '^ Interstate Commerce Commis- 
 facts and of conclusions of law, as sion v. Un. Pac. Ry., 222 U. S. 541, 
 well as of the facts themselves, was 56 L. ed. 308, 32 Sup. Ct. 108; Louis- 
 admitted in evidence, complainant ville & N. Ry. v. Interstate Com- 
 stating to the court the nature of merce Commissions, 195 Fed. 541; 
 said report and ofTering it in evidence L. & P. Ry. v. United States, 209 
 in so far as the facts therein con- Fed. 242. 
 tained were material or competent. 
 
 [ 1054 ] 
 
Judicial Review of Commission Action [ § 1147 
 
 by the Commission, would justify it in finding a rate un- 
 reasonable and it appears that it has based its decision on 
 such testimony, the condition precedent to the exercise of 
 its power to fix reasonable rates has been met.^^ In a coal 
 rate case there was evidence before the Commission as to 
 cost of transportation, operating expenses, interest, depre- 
 ciation, other rates for transporting coal, markets, allow- 
 ances, terminal expenses and the life of the carrier and other 
 conditions. On appeal the court held that the order reduc- 
 ing rates could not be declared invalid on the ground of 
 lack of evidence." It is not for the courts to say whether 
 the Conmiission has properly attached great or little weight 
 to evidence adduced upon a given point or whether the 
 conclusion reached by the Commission upon testimony as 
 to facts alone shows a mistake as to some particular fact 
 not essential or vital to the proceeding, or an inadvertency, 
 or is not such a conclusion as the courts might have 
 reached. If the particular matter in issue and inquired 
 into was one of fact and a full hearing was afforded and 
 the conclusion reached is supported by substantial evi- 
 dence, it will not be nuUified by the courts.'^* Whether the 
 Commission gives much or little weight to a particular 
 piece of evidence or regards it as controlling in arriving at 
 a result is immaterial," since this is a question of fact and 
 not of law.'" But the legal effect of evidence is a question 
 of law. The Commission, even when acting in its quasi- 
 judicial capacity, is not limited by the strict rules as to 
 the admissibility of evidence which prevail in suits be- 
 tween private parties.^' But the more liberal the practice 
 
 ™ Atchison, T. & S. F. Ry. v. Ry. v. United States, 204 Fed. 
 
 United States, 203 Fed. 56.' 986. 
 
 " Lehigh Valley Ry. v. United '" Illinois Central Ry. v. Interstate 
 
 States, 204 Fed. 986. Commerce Commission, 206 U. S. 
 
 ™ Norfolk & Western Ry. v. United 441, 466, 51 L. ed. 1128, 27 Sup. Ct. 
 
 States, 195 Fed. 953. 700. 
 
 '» Louisville & N. Ry. v. Interstate " Interstate Commerce Commis- 
 
 Commerce Commission, 184 Fed. sion v. Btiird, 194 U. S. 25, 48 L. ed. 
 
 118, 195 Fed. 541; Lehigh Valley 860, 24 Sup. Ct. 563. 
 
 [ 1055 ] 
 
§ 1148 ] Railroad Rate Regulation 
 
 as to the introduction of testimony, the more imperative 
 it is that the essential rules of evidence by which these 
 rights are asserted or defended should be preserved.*^ 
 
 Topic C. Procedure for Determining Validity of Commission 
 
 Action 
 
 § 1148. Temporary restraining orders. 
 
 Should any person affected by an order of the Commis- 
 sion be convinced that such order should be set aside, 
 annulled or suspended, in whole or in part, he may invoke 
 the jurisdiction of the district court by filing in the office 
 of the clerk of that court a written petition setting forth 
 briefly and succinctly the facts constituting the petitioner's 
 cause of action, and specifying the relief sought. The 
 pendency of such suit shall not of itself stay or suspend 
 the operation of the order of the Commission, but the 
 court may, in its discretion, restrain or suspend, in whole or 
 in part, the operation of the Commission's order pending 
 the final hearing and determination of the suit. It is 
 clear that injunction orders may be issued upon applica- 
 tion to the district courts in three forms: First, a tem- 
 porary restraining order staying in whole or in part the 
 operation of the order of the Commission for not more 
 than sixty days, to be allowed by a majority of three 
 judges; second, a preliminary injunction to restrain or sus- 
 pend in whole or in part the operation of the Commission's 
 order, pendente lite, to be allowed by a majority of three 
 judges; third, in the nature of things, a perpetual injimc- 
 tion upon the entry of the final decree.*^ As to the first 
 of these forms of equitable relief, the Act provides that 
 where irreparable damage would otherwise ensue to the 
 petitioner, application may be made to the district court 
 and shall be heard by three judges, at least, one of whom 
 shall be a circuit judge. If a majority of the three judges 
 
 ^' Interstate Commerce Commis- *' United States v. B. & O. Ry., 225 
 
 sion V. L. & N. Ry., 227 U. S. 88, 57 U. S. 306, 56 L. ed. 1107, 32 Sup. Ct. 
 L. od. 431, 33 Sup. Ct. 185. 742. 
 
 [ 1056 ] 
 
Judicial Review of Commission Action [ § 1149 
 
 concur, they may, on hearing, after not less than three 
 days' . notice to the Interstate Commerce Commission and 
 the Attorney General, allow a temporary stay or suspen- 
 sion, in whole or in part, of the operation of the order of 
 the Interstate Commerce Commission for not more than 
 sixty days. 
 
 § 1149. Injunction against enforcement. 
 
 No interlocutory injunction suspending or restraining 
 the enforcement, operation, or execution of, or setting 
 aside, in whole or in part, any order made or entered by 
 the Interstate Commerce Commission shall be issued or 
 granted by any district court of the United States, or 
 by any judge thereof, or by any circuit judge acting as 
 district judge, unless the application for the same shall 
 be presented to a circuit or district judge, and shall be 
 heard and determined by three judges, of whom at least 
 one shall be a circuit judge, and unless a majority of said 
 three judges shall concur in granting such application. 
 When such application is presented to a judge, he shall 
 immediately call two other judges to his assistance to 
 hear and determine the application. This application shall 
 not be heard or determined before at least five days' notice 
 of the hearing has been given to the Interstate Commerce 
 Commission, to the Attorney General of the United States, 
 and to such other persons as may be defendants in the 
 suit. The judges may, at the time of hearing an applica- 
 tion for a temporary restraining order, upon a like finding, 
 continue the temporary stay or suspension in whole or in 
 part until decision upon the application.*^ The hearing 
 upon such appUcation for an interlocutory injunction shall 
 be given precedence and shall be in every way expedited 
 
 ^* In interpreting almost identical the temporary restraining order and 
 
 language in the Act creating the not to a preliminary injunction 
 
 Commerce Court, the Supreme Court pendente lite. United States v. B. & 
 
 hold that the requirement as to a O. Ry., 225 U. S. 306, 56 L. ed. 1100, 
 
 finding based upon evidence identified 32 Sup. Ct. 817. 
 by reference thereto applied only to 
 
 07 [ 1057 ] 
 
§ 1150 ] Railroad Rate Regulation 
 
 and be assigned for a hearing at the earUest practicable 
 day after the expiration of the notice hereinbefore provided 
 for. Upon the final hearing of any suit brought to sus- 
 pend or set aside, in whole or in part, any order of the 
 Commission, the same requirements as to judges and as 
 to the expedition of the suit shall apply. In passing upon 
 such petitions which include the report or opinion of the 
 Commission, the court is limited to examining the report 
 or opinion of the majority of the Commission, and the 
 views of the minority are not open to consideration.*^ 
 
 § 1150. Balance of equities. 
 
 In a suit in equity to enjoin the action of the Connnis- 
 sion, the court starts with the presumption that the order 
 is valid, and the burden of showing that the facts are such 
 as to render the order invalid rests upon the carrier assail- 
 ing it, and unless the case made on behalf of the carrier 
 is a clear one the order ought to be upheld.*^ In determin- 
 ing whether it should temporarily enjoin a proposed in- 
 crease of interstate rates the court must take into ac- 
 count the balance of equities between the shippers and the 
 carriers. If the balance of detriment or inconvenience in 
 the event the temporary injunction is refused is against 
 the shippers, then the injunction will be granted. But if, 
 on the other hand, the balance of detriment or incon- 
 venience is against the carrier, in the event the temporary 
 injunction should be issued, then it should be refused.*' 
 The Supreme Court of the United States will not on appeal 
 reverse an order of preliminary injunction of an inferior 
 Federal court to restrain an order of the Commission for- 
 bidding carriers to make certain allowances, except where 
 there has been an abuse of discretion by the inferior court, 
 
 *» Atchison, T. & S. F. Ry. v. Inter- Commerce Commission, 164 Fed. 
 
 state Commerce Commission, 188 645. 
 
 Fed. 229; Southern Pacific Ry. v. «' Arlington Heights Fruit Co. v. 
 
 Interstate Commerce Commission, So. Pac. Ry., 175 Fed. 141; Nashville 
 
 188 Fed. 241. Grain Exchange v. United States, 
 
 ™ Mo., K. & T. Ry. v. Interstate 191 Fed. 37. 
 
 [ 1058 ] 
 
Judicial Review of Commission Action [ § 1151 
 
 or where it plainly appears that the preUminary order was 
 in effect a decision by the inferior court of the whole 
 controversy on its merits, or when it is demonstrable that 
 grave detriment to the public interest will result from a 
 failure of the Supreme Court finally to dispose of the con- 
 troversy without remanding the case.*^ On appeal from 
 the order of an inferior court enjoining an order of the 
 Commission, the Supreme Court reviews the findings of 
 the Commission.*' 
 
 § 1151. Appeal from the district court on petitions for in- 
 junctions. 
 
 An appeal may be taken direct to the Supreme Court 
 of the United States from the order of the district court 
 granting or denying, after notice and hearing, an inter- 
 locutory injunction in such case, if such appeal be taken 
 within thirty days after the order in respect to which the 
 complaint is made is granted or refused, and upon the final 
 hearing of any suit brought to suspend or set aside, in 
 whole or in part, any order of the Commission, the same 
 requirements as to appeals shall apply. A final judgment 
 or decree of the district court may be reviewed by the 
 Supreme Court if appeal thereto be taken by an aggrieved 
 party within sixty days after the entry of such final judg- 
 ment or decree, and such appeals may be taken in like 
 manner as appeals are taken under existing law in equity 
 cases. And in such case the notice required shall be served 
 upon the defendants in the case. It was formerly within 
 the power of the Circuit Court to suspend its decree re- 
 quiring a carrier to desist from violating the Act, pending 
 an appeal from such decree, until a decision should be made 
 by the appellate court. It was said that this power should 
 
 8« United States v. B. & 0. Ry., 225 Commission v. No. Pac. Ry., 216 
 
 U. S. 306, 56 L. ed. 1100, 32 Sup. Ct. U. S. 638, 30 Sup. Ct. 415; Kentucky 
 
 817. Bridge Co. v. L. & N. Ry., 37 Fed. 
 
 *' Interstate Commerce Commis- 567; Mo., K. & T. Ry. v. Interstate 
 
 sion V. D., L. & W. Ry., 216 U. S. 531, Commerce Commission, 164 Fed. 
 
 30 Sup. Ct. 417; Interstate Commerce 645. 
 
 [ 1059 ] 
 
§ 11.52] Railroad Rate Regulation 
 
 always be exercised whenever irreparable injuiy may result 
 by continuing the decree in effect as rendered.'" And this 
 provision was said not to be inconsistent with the policy 
 expressed in the Expediting Act.^^ 
 
 § 1162. Sufficiency of averments. 
 
 If a petition is brought for the restraining or annulment 
 of an order of the Commission, it must set forth facts 
 which if true would sustain the petitioner's contention. 
 This is particularly necessary in cases where it is claimed 
 that the Commission's order is confiscatory. In such a 
 case, a demurrer will be sustained where the biU merely 
 charges in general terms that the rates prescribed are not 
 reasonably compensatory and do not yield a reasonable 
 profit, as it is the duty of the carriers, having, as they do, 
 largely in their possession the means of information, to 
 set out the revenue derived, the cost of service, the amount 
 of revenue necessary for the maintenance of the petitioners 
 as common carriers, to what extent such revenue would 
 be affected by the rates prescribed in the order complained 
 of, and other facts showing confiscation.*^ So also general 
 allegations in a bill attacking an order fixing maximum 
 freight rates which state in substance the judgment of the 
 pleader as to what the evidence before the Commission 
 did not "tend to establish," are insufficient to justify a 
 court in enjoining the enforcement of the order upon the 
 ground that the Conmaission had either denied the hearing 
 contemplated by the Act, or, by its arbitrary action, had 
 been guilty of an abuse of power, nor is the allegation that 
 losses in revenue will result sufficient to establish confisca- 
 tion without any showing as to the value of the property 
 employed, the expense of operation, or the return which will 
 be permitted under the rates prescribed.^^ 
 
 '" Interstate Commerce Commis- '^ Atlantic Coast Line y. Inter- 
 
 sion V. Louisville & N. R. R., 101 state Commerce Commission, 194 
 
 Fed. 146. Fed. 449. 
 
 "' Interstate CommereeCommission "' Louisville & Nashville Ry. v. 
 
 V. Southern Pac. Co., 137 Fed. 606. Garrett, 231 U. S. 298, 58 L. ed. 229, 
 [ 1060 ] 
 
Judicial Review of Commission xVction [ § 1153 
 
 § 1153. Necessary and proper parties. 
 
 Under the Interstate Commerce Act suits in the courts 
 to enjoin, set aside, annul or suspend an order of the 
 Commission may be maintained not only by those who 
 were parties to the complaint before the Commission but 
 by anyone who is affected by the Commission's order. 
 Nor is it necessary that all the parties to the complaint 
 should be joined. This arises from the fact that the peti- 
 tion in the courts is not an appeal or writ of error, but it 
 is a plenary suit in equity and may be brought by one 
 party without joining the other parties to the order.'"* The 
 determination of the question as to what parties may main- 
 tain such suits is left by the Act to the general rules and 
 practices in equity, and under them any party whose 
 rights or property are in danger of irreparable injury from 
 an unauthorized order of the Commission may appeal to a 
 Federal court of equity for relief."-^ Hence when carriers 
 are not made party defendants to a complaint before the 
 Commission, but the order of the Commission reducing 
 rates will inevitably require reductions by such carriers in 
 large amounts from the fact that they are largely engaged 
 in the transportation affected by such order, they have 
 a sufficient interest to entitle them to join in a petition 
 to the Federal court to enjoin said order. Likewise the 
 courts may at their discretion permit the parties to any 
 complaint before the Commission to intervene as defend- 
 ants in a suit to enjoin an order of the Commission, 
 where such intervention does not delay the progress of 
 the suit.*" 
 
 34Sup. Ct. 48. So a rate on a pavtic- 1511, 33 Sup. Ct. 729; Missouri 
 
 ular product will not be set aside Rate Cases, 230 U. S. 474, 57 L. ed. 
 
 when the carrier offers no evidence 1571, 30 Sup. Ct. 975. 
 
 as to its receipts or the value of "'' Atlantic Coast Line v. Interstate 
 
 its property affected by the order. Commerce Commission, 194 Fed. 449. 
 
 Wood V. Vandalia Ry., 231 U. S. 1, "« Peavey & Co. v. Union Pacific 
 
 58 L. ed. 97, 32 Sup. Ct. 7, nor when Ry., 176 Fed. 409. 
 
 the lower court ascertained the value " Delaware, L. & W. Ry. v. Intei- 
 
 by an unreliable method. Minnesota state Commerce Commission, 169 
 
 Rate Cases, 230 U. S. 352, 57 L. ed. Fed. 894. 
 
 [ 1061 ] 
 
§§ 1154, 1155 ] Railroad Rath Regulation 
 
 § 1154. Venue of enforcement suits. 
 
 The District Court Jurisdiction Act of 1913 provides 
 that the venue of any suit brought to enforce, suspend, 
 or set aside, in whole or in part, any order of the Com- 
 mission shall be in the judicial district wherein is the 
 residence of the party or any of the parties upon whose 
 petition the order was made, except that when the order 
 does not relate to transportation or is not made upon the 
 petition of any party the venue shall be in the district 
 where the matter complained of in the petition before the 
 Commission arises, and except that where the order does 
 not relate either to transportation or to a matter so com- 
 plained of before the Commission, the matter covered by 
 the order shall be deemed to arise in the district where 
 one of the petitioners in court has either its principal office 
 or its principal operating office. Where one of two carriers 
 which have established a joint rate is within the jurisdic- 
 tion of the court, an order of the Commission affecting 
 such rate may be enforced as against that carrier, although 
 the other carrier is without the jurisdiction of the court, 
 and cannot, on that account, be made a party.^' 
 
 § 1155. Introduction of new evidence. 
 
 Since the proceedings in equity either for restraining, 
 annulling, or enforcing an order of the Commission are de 
 novo, the parties are not restricted to the evidence upon 
 which the Commission based its finding, but may introduce 
 new evidence.^* The Supreme Com-t, however, has severely 
 condemned the practice of willfully withholding essential 
 evidence from the Commission and first introducing it in 
 proceedings in court. "The Conunission is an adminis- 
 trative board. . . . The theory of the Act evidently is, as 
 shown by the provision that the findings of the Com- 
 mission shall be regarded as prima fade evidence, that 
 
 " Interstate Commerce Commis- ^ Mo., K. & T. Ry. v. Interstate 
 
 sion V. T. & P. Ry., 52 Fed. 187; Commerce Commission, 164 Fed. 
 affirmed, 57 Fed. 948, 6 C. C. A. 653. 645. 
 
 [1062] 
 
Judicial Review of Commission Action [ § 1156 
 
 the facts of the case are to be disclosed before the Commis- 
 sion. We do not mean, of course, that either party, in a 
 trial in the com-t, is to be restricted to the evidence that 
 was before the Commission, but that the purposes of the 
 Act call for a full inquiry by the Commission into all the 
 circumstances and conditions pertinent to the questions 
 involved." ^^ But it is competent for the legislature to 
 provide that if the party affected had a right to introduce 
 all material evidence at the hearing before the Commission 
 no new evidence shall be introduced on review in the 
 courts. In such case the Commission acts like a master in 
 chancery. It takes testimony and makes findings, and 
 the court tests their correctness by reviewing the evidence 
 upon which they were based. ^ Even without such legis- 
 lation the court in a recent case held that if the carrier 
 wished to introduce additional evidence as to whether a 
 rate was confiscatory it should apply to the Commission 
 for a rehearing, and unless it appeared that the Commis- 
 sion had excluded evidence that was material, the court 
 would review the order only on the testimony that was 
 before the Commission.^ 
 
 Topic D. Enforcement Proceedings in the Courts 
 
 § 1156. Functions of the Commission in the enforcement 
 of the Act. 
 
 The Act imposes upon the Commission many duties and 
 authorizes it to exercise many powers without however 
 providing the Commission itself with the necessary ma- 
 chinery. In such cases the Act provides that the Commis- 
 sion may resort to the courts for assistance. The Act ex- 
 pressly states, "The Commission is hereby authorized and 
 required to execute and enforce the provisions of this 
 
 S9 Cincinnati, N. O. & T. P. Ry. v. child, 224 U. S. 510, 56 L. ed. 863, 
 
 Interstate Commerce Commission, 32 Sup. Ct. 535. 
 162 U. S. 184, 196, 40 L. ed. 935, 27 ' Louisville & Nashville Ry. v. 
 
 Sup. Ct. 948. United States, 218 Fed. 89. 
 
 1 Oregon R. R. & N. Co. v. Fair- 
 
 [ 1063 ] 
 
§ 1156 ] Railroad Rate Regulation 
 
 Act." This can be done only by judicial process. Should 
 a carrier violate or fail to comply with any of the provi- 
 sions of the Act, the district courts, upon application of the 
 Attorney General at the request of the Commission al- 
 leging such failure or noncompliance, may issue a writ of 
 mandamus commanding obedience to the Act. Upon the 
 request of the Commission, it is the duty of any district 
 attorney of the United States to whom the Commission 
 may apply to institute and prosecute under the direction 
 of the Attorney General all necessary proceedings for the 
 enforcement of the Act and for the punishment of viola- 
 tions thereof. In so far as they applied to discriminations 
 and departiu-es from the rates on file, these provisions 
 were re-enacted and strengthened by the Elkins Act of 
 Feb. 19, 1903. Besides its duties under the Interstate 
 Commerce Act the Commission is charged with the en- 
 forcement of the Safety Appliance Acts of April 14, 1910, 
 and the Ash-Pan Act of May 30, 1908, and for that 
 purpose is authorized to use all the powers with which 
 it is vested under any enactment of Congress. It is also 
 required to lodge with the proper district attorney any 
 information which it may acquire as to violations of the 
 Hours of Service Act of March 4, 1907, and is authorized 
 to enforce any orders which it may make in consequence 
 of the powers vested in it by the Government-aided Rail- 
 road and Telegraph Act of August 7, 1888. The Commis- 
 sion is also charged with the enforcement of the Clayton 
 Anti-trust Act of October 15, 1914, in so far as that Act 
 relates to carriers. For the purpose of aiding it in the 
 accomphshment of the objects for which it was estabhshed, 
 the Commission may require carriers subject to the Act to 
 file annual reports of their operations, and monthly reports 
 of their earnings and expenses, together with such special 
 reports as may be desired on specific matters as to which 
 the Commission is required to keep itself informed. The 
 Commission may also prescribe a uniform system of ac- 
 counts for all carriers, and shall have access at all times 
 [ 1064 ] 
 
Judicial Review of Commission Action [ § 1157 
 
 to all accounts, records, and memoranda kept by carriers 
 subject to the Act. And no other accounts, records, or 
 memoranda than those prescribed or approved by the 
 Commission may be kept by any such carrier. 
 
 § 1157. Judicial process in aid of proceedings before the 
 Commission. 
 
 Section 12 of the Act provides that the Commission 
 shall have authority to inquire into the management of 
 the business of all common carriers subject to the provi- 
 sions of the Act, and shall keep itself informed as to the 
 maimer and method in which the same is conducted. For 
 this purpose it is empowered to obtain from the carriers 
 whatever information may be necessary to enable it to 
 carry out the objects for which it was created. To this 
 end it is provided that "for the purposes of this Act the 
 Commission may require, by subpoena, the attendance and 
 testimony of witnesses and the production of all books, 
 papers, tariffs, contracts, agreements, and documents re- 
 lating to any matter under investigation." In case of 
 contumacy or refusal to obey a subpoena issued by the 
 Commission, a district court of the United States may 
 issue an order requiring such common carrier or other 
 person to appear before the Commission and produce books 
 and papers if so ordered and give evidence touching the 
 matter in question. Any failure to obey such order may 
 be punished by the court as contempt thereof. No wit- 
 ness may be excused from testifying on the ground that 
 his evidence might tend to incriminate him, but such evi- 
 dence may not be used against him on the trial of any 
 criminal proceeding except for perjury committed while so 
 testifying. Soon after these provisions authorizing the 
 Commission to resort to the courts for assistance in ob- 
 taining testimony were enacted, the contention was set up 
 that such a proceeding before the courts was not a case 
 or controversy within the meaning of the Constitution 
 and was not a judicial function and hence could not be 
 
 [ 1065 ] 
 
§ 1157 ] Railroad Rate Regulation 
 
 required of the courts. But the court held that the func- 
 tions entrusted to the Commission were within the power 
 of Congress to regulate commerce and that they could not 
 be discharged without the taking of testimony. The Com- 
 mission, however, not being a judicial body, could not 
 compel testimony and it must therefore receive the as- 
 sistance of the courts. An application to the courts for 
 an order compelling a witness to appear and testify pre- 
 sents all the elements of a judicial controversy, for in de- 
 termining whether or not the order should issue the court 
 is obliged to determine whether the Commission is entitled 
 to the evidence which it seeks and whether the refusal of 
 the witness to testify or to produce papers is in derogation 
 of the rights of the United States.' These questions were 
 presented in a case in which the Commission, in the course 
 of an investigation initiated on its own motion, sought an 
 order compelling testimony from a witness who refused to 
 testify on the ground that the questions did not relate to 
 any affirmative provision of the Act which it was the duty 
 of the Commission to enforce, and another witness who 
 refused to answer on the ground that the questions related 
 to the business of a private banking house and not to that 
 of a carrier. The Commission contended that it was au- 
 thorized to make investigations not only for the purpose 
 of ascertaining whether the Act had been violated but also 
 as a basis for recommending additional legislation to Con- 
 gress, and that its power to compel testimony was the 
 same in the two cases. But the court held that no such 
 general inquisitorial power had been vested in the Com- 
 mission, and that its power to compel testimony was con- 
 fined to the investigation of specific breaches of existing 
 law.* The power of the Commission has been further 
 
 ' Interstate Commerce Commis- Baird, 194 U. S. 25, 48 L. ed. 860, 24 
 
 sion V. Brimson, 154 U. S. 447, 38 Sup. Ct. 563. 
 
 L. ed. 104, 14 Sup. Ct. 1125; In- *Harriman v. Interstate Com- 
 
 terstate Commerce Commission v. merce Commission, 211 U. S. 407, 53 
 
 L. ed. 253, 29 Sup. Ct. 115. 
 
 [ 1066 ] 
 
Judicial Review of Commission Action [ § 1158 
 
 limited by the decision of the Supreme Court on Feb- 
 ruary 23, 1915, to the effect that the correspondence of a 
 carrier is not included among those papers which a witness 
 may be required to produce.'^ 
 
 § 1158. Judicial action necessary to the enforcement of 
 orders. 
 
 No order of the Conunission is self-executing. Should 
 the carrier against whom it is directed not choose to obey 
 it, it can be enforced only through judicial proceedings 
 as provided for in section 16 of the Act." This section 
 clearly distinguishes suits to enforce administrative orders 
 of the Commission, which are in equity, where the only 
 issue is as to the legality of the order, and an action to 
 recover reparation awarded. The latter is not a suit to 
 enforce the order, but an action at law triable by jury and 
 the proceedings are as in other civil actions, save that the 
 findings and order of the Commission are received as 'prima 
 facie evidence of the facts stated.^ Section 16 provides 
 that if a carrier does not comply with an order for the 
 payment of money within the time limit set in the order, 
 the complainant or any person for whose ben'efit the order 
 was made may file in the district court of the United States 
 a petition setting forth briefly the causes for which he 
 claims damages and the order of the Commission. Such 
 suit shall then proceed in all respects like other civil suits 
 for damages except that on the trial of such suit the find- 
 ings and order of the Commission shall be prima facie 
 evidence of the facts therein stated, and except that the 
 petitioner shall not be hable for costs in the district court 
 nor for costs at any subsequent stage of the proceedings 
 unless they accrue upon his appeal. If the petitioner shall 
 finally prevail, he shall be allowed a reasonable attorney's 
 fee, to be taxed and collected as a part of the costs of his 
 
 ' Louisville & Nashville Ry. case, Penn Refining Co., 137 Fed. 343. 
 decision announced Feb. 23, 1915. ' Lehigh Valley Ry. v. Meeker, 211 
 
 « Western N. Y. & P. Ry. v. Fed. 785. 
 
 [ 1067 ] 
 
§ 1159 ] Railroad Rate Regulation 
 
 suit.' A petition for the enforcement of an order for the 
 payment of money shall be filed in the district court or 
 State court within one year from the date of the order. 
 In this connection attention may be called to fines and 
 forfeitures provided in the Act for disobedience of the 
 orders of the Commission which have already been set 
 forth in section 1131. 
 
 § 1159. Parties to enforcement suits. 
 
 If a carrier does not comply with an order for the pay- 
 ment of money within the time limit in such order, sec- 
 tion 16 provides that an action for its enforcement may 
 be brought by the complainant or any person for whose 
 benefit such order was made. In such suits all parties in 
 whose favor the Commission may have made an award for 
 damages by a single order may be joined as plaintiffs, 
 and all of the carriers parties to such order awarding such 
 damages may be joined as defendants. If any carrier fails 
 or neglects to obey any order of the Commission other 
 than for the payment of money, while the same is in ef- 
 fect, the Interstate Commerce Commission or any party 
 injiu-ed thereby, or the United States by its Attorney- 
 General, may apply to a district court of the United States 
 for the enforcement of such order. When a case of this 
 kind reaches the court on petition of the Conxmission, the 
 complaint will be regarded as that of the Conamission 
 rather than as that of the parties who in the first instance 
 induced the Commission to take action.* If, after hearing, 
 
 * This provision regarding attor- by the Circuit Court. Louisville & 
 
 ney's fees has been declared oonsti- Nashville R. R. Co. v. Dickerson, 
 
 tutional. Riverside Mills v. A. C. L. 191 Fed. 705. 
 
 Ry., 168 Fed. 990; Chicago, B. & Q. In a suit against the initial carrier 
 
 Ry. V. Feintuch, 191 Fed. 482. to recover for loss of goods, no 
 
 In a suit to enforce an order of the authority is given to tax attorneys' 
 
 Commission awarding reparation for fees by section 8 of the Act. Atlantic 
 
 diverting a shipment from the spec- Coast Line v. Riverside Mills, 219 U. 
 
 ified route, plaintiflf is entitled to an S. 186, 55 L. ed. 167, 31 Sup. Ct. 164. 
 
 allowance for an attorney's fee on ' Interstate Commerce Commis- 
 
 account of the appellate proceedings, sion v. D., G. H. & M. Ry., 57 Fed. 
 
 in addition to the allowance made 1005. 
 
 [ 1068 ] 
 
Judicial Review of Commission Action [ § llbO 
 
 the court determines that the order was regularly made 
 and duly served, and that the carrier is in disobedience of 
 the same, the court shall enforce obedience by a writ of 
 injunction or other proper process, mandatory or other- 
 wise, to restrain such carrier, its officers, agents, or repre- 
 sentatives, from further disobedience of such order, or to 
 enjoin upon it or them obedience to the same. In the case 
 of a carrier which goes into the hands of a receiver after an 
 order has been issued to it by the Conamission, the court 
 follows the same procedure in a suit for enforcement of the 
 order as it would have followed if the railway had con- 
 tinued to be operated by its own officers.'" 
 
 § 1160. Orders tinenforceable because of defects. 
 
 It sometimes happens that the Commission fails to give 
 expression to its will in such a form that the courts will 
 undertake to enforce it. It is perhaps not correct in such 
 case to say that the order is invalid. It is nearer the 
 truth to say that the Commission's pronouncement is not 
 an order either in substance or in form, and hence there is 
 nothing for the courts to act upon. Where an order of 
 the Commission grants permission to the carriers against 
 whom it is directed to charge lower rates on competitive 
 traffic to longer distance points than are charged to inter- 
 mediate points on non-competitive traffic, but directs that 
 the rates to the longer distance points shall not be lower 
 than the necessities of competition require, such order is a 
 mere general statement of the duty of the carriers as de- 
 fined by the Act, and is too indefinite to be enforced. ''^ 
 A mere finding without an order is not enforceable. The 
 Commission found certain lighterage allowances to con- 
 stitute an imlawful rebate and prohibited them, but en- 
 tered no order. In a suit to recover the allowances yet 
 unpaid, the Circuit Court denied recovery on the ground 
 
 "> Farmers' Loan & Trust Co. v. 249, refusing to enforce order of the 
 No. Pac. Ry., 83 Fed. 249. Commission, Merchants' Union of 
 
 " Farmers' Loan & Trust Co. v. Spokane Falls v. Northern Pac. Ry., 
 Northern Pac. Ry. Co., 83 Fed. Rep. 5 I. C. C. R. 478, 4 L C. R. 183. 
 
 [ 1069 ] 
 
§ 1161 ] Railroad Rate Regulation 
 
 that the finding of the Commission without an order 
 operated to remove the allowances from the carrier's tariff, 
 and hence the carrier was no longer liable. But the Cir- 
 cuit Court of Appeals reversed this decision and held that 
 the mere finding of the Commission without an order had 
 no effect on a published tariff, and hence the carrier con- 
 tinued to be liable. ^^ Since the orders of the Commission 
 are not self -executing, they can be made effective only by the 
 help of the courts. In proceedings for the enforcement of the 
 Commission's orders, or for the collection of damages based 
 upon the Commission's award of reparation, the carrier 
 has opportunity to raise the question as to the validity of 
 the Commission's action. If its order or award was invalid 
 on any of the grounds discussed in the preceding sections, 
 its order cannot be enforced nor can its award be reduced 
 to judgment. 
 
 § 1161. Power of courts to modify Commission's orders. 
 
 In judicial proceedings for the enforcement of the orders 
 of the Commission, the courts are not at liberty to mould 
 them into a form in which they can receive approval. If 
 the order is not lawful, the courts are without power to 
 enforce it.^' The courts must take the order as it was 
 made, and if it is not vahd in that form, no relief can be 
 granted." Their power is limited to an approval or dis- 
 approval of the order before them, and to the enforcement 
 or refusal to enforce it as a whole or in part, as made by 
 the Commission. ^^ The court has no power, under the 
 guise of enforcing an order of the Commission, to make 
 a general adjustment of differences between litigants, or 
 
 '^ American Sugar Refining Co. v. Interstate Commerce Commission, 74 
 
 D., L. & W. Ry., 207 Fed. 733, 200 Fed. 803; Farmers' Loan & Trust 
 
 Fed. 652, 14 I. C. C. 619. Co. v. No. Pac. Ry., 83 Fed. 249. 
 
 '' Southern Pacific Ry. v. Inter- ''^ Interstate Commerce Commis- 
 
 state Commerce Commission, 200 sion v. L. & N. Ry., 73 Fed. 409; 
 
 U. S. 536, 50 L. ed. 585, 26 Sup. Ct. Interstate Commerce Commission 
 
 330. V. L. S. & M. S. Ry., 134 Fed. 
 
 i< Detroit, G. H. & M. Ry. v. 942. 
 
 [ 1070 ] 
 
Judicial Review of Commission Action [ § 1162 
 
 to correct abuses by a carrier in the conduct of its busi- 
 ness. ^^ It can make no order or decree of its own, nor 
 modify the order for the purpose of making it conform to 
 the opinion of the court, in case that opinion should differ 
 from the view taken by the Commission." While it is 
 true that in enforcement proceedings, the cause of action 
 is examined de novo, and in a qualified sense is independent 
 of the investigation by the Commission, the relief to be 
 obtained must be confined to that included in the Com- 
 mission's order. ^^ Even though, upon the court's refusal 
 to enforce an order, the Commission moved for a rehearing 
 on the ground that its order was not intended to be as 
 broad as indicated by its terms, yet the court held that 
 it was confined to the order which was actually made and 
 could not substitute for it another which the Commission 
 might or should have made, or one which it intended, but 
 failed to make." But in passing upon an order issued by 
 the Commission, the court is not confined to the grounds 
 or reasons assigned by the Commission as the basis of its 
 conclusion, but may, without going beyond the issue, 
 reach a like or different conclusion upon the same or other 
 grounds or reasons.-" Hence though the order may not 
 be warranted by that section of the Act which the Com- 
 mission relied upon, it may nevertheless be enforced be- 
 cause sustained by some other section of the Act.^^ 
 
 § 1162. Sufficiency of averments. 
 
 In a suit in a Federal court for the enforcement of an 
 order of the Commission or for damages growing out of a 
 violation of the Act, the complainant, whether it be the 
 
 '» Farmers' Loan & Trust Co. v. ^o interstate Commerce Commis- 
 
 No. Pac. Ry., 83 Fed. 249. sion v. Southern Pacific Ry., 132 Fed. 
 
 " Interstate Commerce Commis- 829. 
 
 sion V. L. & N. Ry., 73 Fed. 409. " Southern Pacific Ry. v. Inter- 
 im Western New York & Pennsyl- state Commerce Commission, 200 
 
 vania Ry. v. Penn Refining Co., 137 U. S. 536, 50 L. ed. 585, 26 Sup. Ct. 
 
 Fed. 343, 70 C. C. A. 23. 330; Interstate Commerce Commis- 
 
 »» Interstate Commerce Commis- sion v. E. T., V. & G. Ry., 85 Fed. 
 
 sion V. D., L. & W. Ry., 64 Fed. 723. 107, 
 
 [ 1071 ] 
 
§ 1162 ] Railroad Rate Regulation 
 
 Commission or any other party in interest, must show 
 either a case of individual grievance or of public incon- 
 venience resulting from the acts of the carrier in violation 
 of the Act.^^ In a suit to enforce an order of reparation, 
 if the petition and the record show that the cause of action 
 before the court is the same as that before the Commis- 
 sion, it is not necessary that the order of the Commission, 
 when offered in evidence, should also state the cause of ac- 
 tion.^' If the petition is based upon some breach of duty 
 by the carrier, the breach must be specified, for the court 
 will otherwise presume that the carrier has complied with 
 the law. Hence in a suit for damages because of an al- 
 leged unjust or discriminatory charge, where there was 
 no averment that the carrier had failed to file or post its 
 tariff, the court is bound to presume that the tariff has 
 been filed and that the charge complained of was made 
 thereunder, and hence can grant no rehef without prior 
 action by the Commission. ^^ Furthermore if the relief 
 sought depends upon prior action by the Commission, such 
 action must appear in the petition. Hence in a suit to 
 recover damages for the exaction of excessive and unrea- 
 sonable rates, the declaration must allege specifically that 
 the rates complained of have been declared excessive or 
 unreasonable by the Interstate Commerce Commission, 
 since under the Act as amended June 29, 1906, recovery 
 cannot be had in the courts until the Commission has 
 passed upon the rates, and an allegation merely that 
 "plaintiffs have been obliged to pay excessive and unrea- 
 sonable rates" is not sufficient.^'' It has even been held 
 that, the Commission's order must be produced. ^^ The 
 requirement of the Act that the petitioner shall set forth 
 briefly the causes for which he claims damages is not 
 
 ^^ Interstate Commerce Commis- ^^ Meeker v. Lehigh Valley Ry., 
 
 sion V. B. & O. Ry., 43 Fed. 37. 162 Fed. 354. 
 
 23 Chicago, B. & Q. Ry. v. Fein- =>» Geraty v. A. C. L. Ry., 211 Fed. 
 
 tuch, 191 Fed. 482. 227. 
 
 2< Clement v. L. & N. Ry., 153 
 Fed. 979. 
 
 [ 1072 ] 
 
Judicial Review of Commission Action [ § 1163 
 
 satisfied by setting forth the proceedings of the Commis- 
 sion in which the causes of the complaint appear." But 
 even if the petition avers that the Commission has de- 
 clared the rate unreasonable, suit will fail if it does not 
 also aver that the complainant has paid the rate so con- 
 demned.^* These questions as to the contents of the bill 
 will arise whether suit is brought in a State or a Federal 
 court. ^' In brief the requirement is that the bill shall state 
 a cause of action. This requirement is satisfied in the 
 case of joint carriers by alleging the disobedience of any 
 one of the parties to the joint arrangement within the 
 jurisdiction of the court, since the disobedience of one 
 showed the disobedience of all.'" The averment of service 
 of the Commission's order must also be unequivocal, since 
 the defendant is entitled to an allegation of service and the 
 manner thereof in terms so clear as to permit an issue of 
 fact. Hence it is not enough to aver that "thereafter said 
 Commission, agreeable to the provisions of law in that 
 regard, duly caused an authenticated copy of its said 
 report, together with order aforesaid, to be delivered to the 
 said defendant." " 
 
 § 1163. Recovery on a reparation order of the Commission. 
 
 The Act authorizes the Commission, when it finds the 
 complainant entitled to an award of damages, to make an 
 order directing the carrier to pay to the complainant on 
 or before a day named the sum to which the Commission 
 finds him entitled. But in case the order is not obeyed, 
 the Commission is without power to enforce it. Recourse 
 must be had to the courts. The Act, trusting to the self- 
 interest of the parties concerned, does not authorize the 
 
 2'Baer Bros. Mercantile Co. v. Ct. 760; Lilly Co. v. No. Pac. Ry., 117 
 
 D. & R. G. Ry., 200 Fed. 614. Pac. (Wash. 1911) 401. 
 
 ^ Darnell-Taenzer Lumber Co. v. ™ Interstate Commerce Commis- 
 
 So. Pac. Ry., 190 Fed. 659. sion v. W. N. Y. & P. Ry., 82 Fed. 
 
 2» Darnell v. Illinois Central Ry., 192. 
 
 225 U. S. 243, 56 L. ed. 1072, 32 Sup. " Baer Bros. Mercantile Co. v. 
 
 D. & R. G. Ry., 200 Fed. 614. 
 
 68 [ 1073 ] 
 
§ 1163 ] Railroad Rate Regulation 
 
 Commission to appear in . such proceedings, but provides 
 that they may be brought by the complainant or any per- 
 son for whose benefit the order was made. While enforce- 
 ment suits may be brought by persons who did not ap- 
 pear before the Commission/^ the better practice is for 
 all interested shippers to file intervening petitions and ob- 
 tain individual orders for reparation, upon which they 
 may proceed in court. ^' A suit in the district court under 
 section 16 of the Act to enforce an award of reparation is 
 one the issues of which require a trial by jury and can 
 only be entertained by the court when sitting as a com-t 
 of law.^"* Such an action Avill lie only where the carrier 
 has failed to comply with the Commission's order for the 
 payment of money within the time therein specified. ^^ 
 Since the award of the Commission, if lawfully made and 
 supported by sufficient evidence, gives rise to a vested right 
 analogous to a judgment, it may be sued upon in either 
 State or Federal courts and this is expressly authorized 
 by § 16 of the Act.'^ But while an award of the Com- 
 mission is analogous to a judgment, it is not a judgment 
 in the sense that it concludes the enforcement of the claim 
 upon which it rests in a court otherwise having jurisdiction 
 of the cause of action. The award is merely prima facie 
 evidence of the facts contained therein in an action brought 
 on it in a State or Federal court; and when so introduced 
 in evidence it is open to attack and may be entirely dis- 
 credited. '^ While the finding of the Commission may 
 establish the fact that there has been a violation of the 
 Act, it is not decisive of the question of liability for dam- 
 ages either 'prima facie or otherwise.'* In a suit to recover 
 
 " Independent Ref. Ass'n v. W. N. v. Penn Refining Co., 137 Fed. Rep. 
 
 Y. & P. Ry., 6 I. C. C. Rep. 378. 343, 354, 70 C. C. A. 23. 
 
 «' Cattle Raisers' Ass'n v. C, B. & '" Darnell v. 111. Cent. Ry., 225 
 
 Q. Ry., 10 I. C. C. Rep. 83. U. S. 243, 56 L. ed. 1072, 32 Sup. 
 
 " Interstate Commerce Commis- Ct. 760. 
 
 sion V. Western New York & P. Ry., " Clark Bros. Coal Mining Co. v. 
 
 82 Fed. 192. Penn. Ry., 88 Atl. (Pa.) 754. 
 
 »» Western New York & P. R. Co. '« Lehigh Valley Ry. v. Meeker, 
 
 211 Fed. 785. 
 
 [ 1074 ] 
 
Judicial Review of Commission Action [ § 1164 
 
 on an award of reparation by the Commission, recovery 
 was denied on the ground that the report of the Commis- 
 sion did not contain findings of fact sufficient to constitute 
 a -prima facie case of damage to the plaintiff. ^'* The order 
 must not only be a lawful order — one within the authority 
 of the Commission — but the facts found must warrant the 
 reparation which was awarded.^" The suit for the recovery 
 of the money awarded offers an opportunity for a judicial 
 determination of these questions, for it is the function of 
 the court not simply to execute the order of the Commis- 
 sion, but to afford a judicial inquiry surrounded by all the 
 proper judicial safeguards as to whether the order of the 
 Commission should have been made." While the action 
 of the court is in a sense independent of the investigation 
 by the Commission, the relief to be obtained, aside from 
 interest and costs, must be confined to such reparation as 
 was considered by the Commission and included in its 
 order. ^^ 
 
 § 1164. Findings of the Commission as evidence. 
 
 Section 16 of the Act provides that in all suits on an 
 award of damages by the Commission, "the findings and 
 order of the Commission shall be prima facie evidence of 
 the facts therein stated." When the order of the Com- 
 mission is not for the payment of money, the Act is silent 
 as to the weight to be given to its findings. But doubtless 
 the courts will follow the same rule. The respect with 
 which the courts have been in the habit of showing to the 
 findings of the Conamission as to matters which are pecu- 
 liarly within its province is thus made a legal obligation. 
 It should be noted that this provision does not make the 
 
 '» Lehigh Valley Ry. v. Clark, 207 295; Interstate Commerce Commis- 
 
 Fed. 717 (C. C. A.). sion v. C, P. & V. Ry., 124 Fed. 630; 
 
 *" Western N. Y. & P. Ry. v. Penn Baer Brothers' Mercantile Co. v. D. 
 
 Refining Co., 137 Fed. 343, 70 C. C. & R. G. Ry., 200 Fed. 614. 
 
 A. 23. "Western N. Y. & P. Ry. v. 
 
 *' Interstate Commerce Comrais- Penn Refining Co., 137 Fed. 343, 
 
 sion. V. A., T. & S. F. Ry., 50 Fed. 70 C. C. A. 23. 
 
 [ 1075 ] 
 
§ 1164] Railroad Rate Regulation 
 
 findings of the Commission conclusive. Because the Act 
 makes certain findings of fact by the Commission prima 
 fade evidence of such facts it does not at all follow that it 
 also determines their probative force/' Since the findings 
 and order of the Commission are made only prima facie 
 evidence, the carrier which controverts them may claim 
 either that the findings are not supported by the evidence, 
 or that there is other evidence tending to disprove them, or 
 that the Commission has reached an erroneous conclusion 
 of law. But in any case of conflicting evidence, the fact 
 that the findings of the Commission are made by law 
 prima facie true may make them the determining factor, 
 and to this must be added the weight due to the Com- 
 mission's special knowledge of transportation conditions 
 and the fact that it had the witnesses before it and saw 
 their manner of testifying.*^ In every case, therefore, the 
 burden of proof is on the carrier seeking to overthrow the 
 Commission's findings,*^ which can only be done by pre- 
 ponderant and controlling evidence which rebuts and dis- 
 proves the result arrived at by the Commission.** Whether 
 the suit for the enforcement of the Commission's order was 
 instituted by the Commission or by the original com- 
 plainant before that body does not affect the weight to be 
 given to the Commission's findings.*' As the findings of 
 fact are not conclusive against the carrier, so they are 
 not conclusive in its favor. Therefore a demurrer will not 
 lie to a petition by the Interstate Commerce Commission 
 to compel a railroad company to desist from exacting 
 unreasonable rates on the ground that the Commission's 
 findings of fact do not support its order if the findings 
 
 *•' Lehigh Valley Ry. v. Clark, 207 Interstate Commerce Commission v. 
 
 Fed. 717. C, H. & D. Ry., 146 Fed. 559. 
 
 " Illinois Central Ry. v. Inter- « Tift v. Southern Ry., 138 Fed. 
 
 state Commerce Commission, 206 753. 
 
 U. S. 441, 51 L. ed. 1128, 27 Sup. Ct. " Interstate Commerce Commis- 
 
 700. sion V. Lehigh Valley Ry., 49 Fed. 
 
 ■** Interstate Commerce Commis- 177. 
 sion V. L. & N. Ry., 118 Fed. 613, 
 
 [ 1076 ] 
 
Judicial Review of Commission Action [ § 1164 
 
 expressly state that the charge made is unreasonable, al- 
 though the findings may not appeal to the judgment of the 
 court upon the merits.''* The findings of the Commission 
 should be so set forth in its report as to exclude extra- 
 neous, embarrassing or incompetent matter calculated to 
 confuse or mislead.'"' The report should not be made up 
 of mere conclusions, but should give the parties affected, 
 as well as the court before which enforcement proceedings 
 are brought, definite and distinct information as to what 
 was found as facts, and the Commission's opinion thereon, 
 such as would be necessary to make a judicial opinion suffi- 
 cient and satisfactory for ordinary litigation.''" 
 
 <8 Interstate Commerce Commis- Refining Co., 137 Fed. 343, 70 C. C. 
 
 sion V. C, B. & Q. Ry., 94 Fed. A. 23. 
 272. *° Interstate Commerce Commis- 
 
 " Western N. Y. & P. Ry. v. Penn sion v. L. & N. Ry., 73 Fed. 409. 
 
 [ 1077 ] 
 
APPENDIX A 
 
 THE ACT TO REGULATE COMMERCE AS AMENDED 
 
 § 1. Carriers and transportation subject. 
 
 [See generally Chapters III, IV, V, and XIX, supra.] 
 
 Sec. 1. {As amended June S9, 1906, April 13, 1908, and June 18, 1910.) That 
 the provisions of this Act shall apply to any corporation or any person or per- 
 sons engaged in the transportation of oil or other commodity, except water and 
 except natural or artificial gas, by means of pipe lines, or partly by pipe lines 
 and partly by raiboad, or partly by pipe lines and partly by water, and to tele- 
 graph, telephone, and cable companies (whether wire or wireless) engaged in 
 sending messages from one State, Territory, or District of the United States, 
 to any other State, Territory, or District of the United States, or to any for- 
 eign country, who shall be considered and held to be common carriers within 
 the meaning and purpose of this Act, and to any common carrier or carriers 
 engaged in the transportation of passengers or property whoUy by railroad (or 
 partly by railroad and partly by water when both are used under a common 
 control, management, or arrangement for a continuous carriage or shipment), 
 from one State or Territory of the United States or the District of Columbia, 
 to any other State or Territory of the United States or the District of Colum- 
 bia, or from one place in a Territory to another place in the same Territory, or 
 from any place in the United States to an adjacent foreign country, or from any 
 place in the United States through a foreign country to any other place in the 
 United States, and also to the transportation in like manner of property shipped 
 from any place in the United States to a foreign country and carried from such 
 place to a port of transshipment, or shipped from a foreign country to any place 
 in the United States and carried to such place from a port of entry either in the 
 United States or an adjacent foreign country: Provided, however, That the pro- 
 visions of this Act shall not apply to the transportation of passengers or prop- 
 erty, or to the receiving, delivering, storage, or handling of property wholly 
 within one State and not shipped to or from a foreign country from or to any 
 State or Territory as aforesaid, nor shall they apply to the transmission of mes- 
 sages by telephone, telegraph, or cable wholly within one State and not trans- 
 mitted to or from a foreign country from or to any State or Territory as afore- 
 said. 
 
 The term "common carrier" as used in this Act shall include express com- 
 panies and sleeping car companies. The term "railroad" as used in this Act 
 shall include all bridges and ferries used or operated in connection with any 
 railroad, and also all the road in use by any corporation operating a railroad, 
 whether owned or operated under a contract, agreement, or lease, and s^all also 
 include all switches, spurs, tracks, and terminal facilities of every kind used or 
 necessary in the transportation of the persons or property designated herein, 
 and also all freight depots, yards, and grounds used or necessary in the trans- 
 
 [ 1079 ] 
 
Appendix A 
 
 portation or delivery of any of said property; and the term "transportation" 
 shall include cars and other vehicles and all instrumentalities and facilities of 
 shipment or carriage, irrespective of ownership or of any contract, express or 
 implied, for the use thereof and all services in connection with the receipt, 
 delivery, elevation, and transfer in transit, ventilation, refrigeration or icing, 
 storage, and handling of property transported; and it shall be the duty of 
 every carrier subject to the provisions of this Act to provide and furnish such 
 transportation upon reasonable request therefor, and to establish through 
 routes and just and reasonable rates appUcable thereto; and to provide rea- 
 sonable facilities for operating such through routes and to make reasonable 
 rules and regulations with respect to the exchange, interchange, and return 
 of ears used therein, and for the operation of such through routes, and provid- 
 ing for reasonable compensation to those entitled thereto. 
 
 All charges made for any service rendered or to be rendered in the transpor- 
 tation of passengers or property and for the transmission of messages by tele- 
 graph, telephone, or cable, as aforesaid, or in connection therewith, shall be 
 just and reasonable; and every unjust and unreasonable charge for such service 
 or any part thereof is prohibited and declared to be unlawful: Provided, That 
 messages by telegraph, telephone, or cable, subject to the provisions of this Act, 
 may be classified into day, night, repeated, unrepeated, letter, commercial, 
 press. Government, and such other classes as are just and reasonable, and dif- 
 ferent rates may be charged for the different classes of messages: And -provided 
 further, That nothing in this Act shall be construed to prevent telephone, tele- 
 graph, and cable companies from entering into contracts with Qommon carriers, 
 for the exchange of services. 
 
 And it is hereby made the duty of all common carriers subject to the pro- 
 visions of this Act to establish, observe, and enforce just and reasonable classi- 
 fications of property for transportation, with reference to which rates, tariffs, 
 regulations, or practices are or may be made or prescribed, and just and reason- 
 able regulations and practices affecting classifications, rates, or tariffs, the issu- 
 ance, form, and substance of tickets, receipts, and bills of lading, the manner 
 and method of presenting, marking, packing, and dehvering property for trans- 
 portation, the facilities for transportation, the carrying of personal, sample, 
 and excess baggage, and all other matters relating to or connected with the 
 receiving, handling, transporting, storing, and delivery of property subject to 
 the provisions of this Act which may be necessary or proper to secure the safe 
 and prompt receipt, handling, transportation, and deUvery of property subject 
 to the provisions of this Act upon just and reasonable terms, and every such 
 unjust and unreasonable classification, regulation, and practice with reference 
 to commerce between the States and with foreign countries is prohibited and 
 declared to be unlawful. 
 
 No common carrier subject to the provisions of this Act shall, after January 
 first, nineteen hundred and seven, directly or indirectly, issue or give any inter- 
 state free ticket, free pass, or free transportation for passengers, except to its 
 employees and their families, its officers, agents, surgeons, physicians, and at- 
 torneys at law; to ministers of religion, traveling secretaries of railroad Young 
 Men's Christian Associations, inmates of hospitals and charitable and eleemosy- 
 nary institutions, and persons exclusively engaged in charitable and eleemosy- 
 
 [ 1080 ] 
 
Appendix A 
 
 nary work; to indigent, destitute, and homeless persons, and to such persons 
 when transported by charitable societies or hospitals, and the necessary agents 
 employed in such transportation; to inmates of the National Homes or State 
 Homes for Disabled Volunteer Soldiers, and of Soldiers' and Sailors' Homes, 
 including those about to enter and those returning home after discharge; to 
 necessary care takers of live stock, poultry, milk, and fruit; to employees on 
 sleeping cars, express cars, and to linemen of telegraph and telephone companies; 
 to Railway Mail Service employees, post-office inspectors, customs inspectors, 
 and immigration inspectors; to newsboys on trains, baggage agents, witnesses 
 attending any legal investigation in which the common carrier is interested, 
 persons injured in wrecks and physicians and nurses attending such persons; 
 Provided, That this provision shall not be construed to prohibit the inter- 
 change of passes for the officers, agents, and employees of common carriers, 
 and their families; nor to prohibit any common carrier from carrying passen- 
 gers free with the object of providing rehef in cases of general epidemic, pesti- 
 lence, or other calamitous visitation: And provided further, That this provision 
 shall not be construed to prohibit the privilege of passes or franks, or the ex- 
 change thereof with each other, for the officers, agents, employees, and their 
 famiUes of such telegraph, telephone, and cable Unes, and the oflScers, agents, 
 employees and their famihes of other common carriers subject to the provi- 
 sions of this Act: Provided further, That the term "employees" as used in this 
 paragraph shall include furloughed, pensioned, and superannuated employees, 
 persons who have become disabled or infirm in the service of any such common 
 carrier, and the remains of a person killed in the employment of a carrier and 
 ex-employees traveling for the purpose of entering the service of any such com- 
 mon carrier; and the term "families" as used in this paragraph shall include 
 the families of those persons named in this proviso, also the families of persons 
 killed, and the widows during widowhood and minor children during minority 
 of persons who died, while in the service of any such common carrier. Any 
 common carrier violating this provision shall be deemed guilty of a misde- 
 meanor, and for each offense, on conviction, shall pay to the United States a 
 penalty of not less than one hundred dollars nor more than two thousand dol- 
 lars, and any person, other than the persons excepted in this provision, who 
 uses any such interstate free ticket, free pass, or free transportation shall be 
 subject to a like penalty. Jurisdiction of offenses under this provision shall be 
 the same as that provided for offenses in an Act entitled "An Act to further 
 regulate commerce with foreign nations and among the States," approved Feb- 
 ruary nineteenth, nineteen hundred and three, and any amendment thereof. 
 (See section 22.) 
 
 From and after May first, nineteen hundred and eight, it shall be unlawful 
 for any railroad company to transport from any State, Territory, or the Dis- 
 trict of Columbia, to any other State, Territory, or the District of Columbia, 
 or to any foreign country, any article or commodity, other than timber and 
 the manufactured products thereof, manufactured, mined, or produced by it, 
 or under its authority, or which it may own in whole or in part, or in which it 
 may have any interest, direct or indirect, except such articles or commodities 
 as may be necessary and intended for its use in the conduct of its business as 
 a common carrier. 
 
 [ 1081 ] 
 
Appendix A 
 
 Any common carrier subject to the provisions of this Act, upon application 
 of any lateral, branch line of railroad, or of any shipper tendering interstate 
 traffic for transportation, shall construct, maintain, and operate upon reason- 
 able terms a switch connection with any such lateral, branch line of railroad, 
 or private side track which may be constructed to connect with its railroad, 
 where such connection is reasonably practicable and can be put in with safety 
 and will furnish sufficient business to justify the construction and mainte- 
 nance of the same; and shall furnish cars for the movement of such traffic to 
 the best of its ability without discrimination in favor of or against any such 
 shipper. If any common carrier shall fail to install and operate any such 
 switch or connection as aforesaid, on application therefor in writing by any 
 shipper or owner of such lateral, branch line of railroad, such shipper or owner 
 of such lateral, branch line of railroad, may make complaint to the Commis- 
 sion, as provided in section thirteen of this Act, and the Commission shall 
 hear and investigate the same and shall determine as to the safety and practi- 
 cability thereof and justification and reasonable compensation therefor, and 
 the Commission may make an order, as provided in section fifteen of this 
 Act, directing the common carrier to comply with the provisions of this sec- 
 tion in accordance with such order, and such order shall be enforced as here- 
 inafter provided for the enforcement of all other orders by the Commission, 
 other than orders for the payment of money. 
 
 § 2. All unjust discriminations forbidden. 
 
 [See generally Chapters XIII and XVII, supra.] 
 
 Sec. 2. That if any common carrier subject to the provisions of this Act 
 shall, directly or indirectly, by any special rate, rebate, drawback, or other 
 device, charge, demand, collect, or receive from any person or persons a 
 greater or less compensation for any service rendered, or to be rendered, in 
 the transportation of passengers or property, subject to the provisions of this 
 Act, than it charges, demands, collects, or receives from any other person or 
 persons for doing for him or them a like and contemporaneous service in the 
 transportation of a like kind of traffic vmder substantially similar circumstances 
 and conditions, such common carrier shall be deemed guilty of unjust dis- 
 crimination, which is hereby prohibited and declared to be unlawful. 
 
 § 3. Undue or unreasonable preference or advantage. 
 
 [See generaUy Chapters XIV, XV, XVII and XIX, supra.] 
 Sec. 3. That it shall be unlawful for any common carrier subject to the 
 provisions of this Act to make or give any undue or unreasonable preference 
 or advantage to any particular person, company, firm, corporation, or locality, 
 or any particular description of traffic, in any respect whatsoever, or to subject 
 any particular person, company, firm, corporation, or locality, or any particu- 
 lar description of traffic, to any undue or unreasonable prejudice or disadvan- 
 tage in any respect whatsoever. 
 
 Every common carrier subject to the provisions of this Act shall, according 
 to their respective powers, afford all reasonable, proper, and equal facilities 
 for the interchange of traffic between their respective fines, and for the re- 
 ceiving, forwarding, and delivering of passengers and property to and from 
 
 [ 1082 ] 
 
Appendix A 
 
 their several lines and those connecting therewith, and shall not discriminate 
 in their rates and charges between such connecting lines; but this shall not be 
 construed as requiring any such common carrier to give the use of its tracks or 
 terminal facilities to another carrier engaged in hke business. 
 
 § 4. Long and short haul applications. 
 
 [See generally Chapters XII and XVI, supra.] 
 
 Sec. 4. (As amended June 18, 1910.) That it shall be unlawful for any 
 common carrier subject to the provisions of this Act to charge or receive any 
 greater compensation in the aggregate for the transportation of passengers, 
 or of like kind of property, for a shorter than for a longer distance over the 
 same line or route in the same direction, the shorter being included within the 
 longer distance, or to charge any greater compensation as a through route than 
 the aggregate of the intermediate rates subject to the provisions of this Act; 
 but this shall not be construed as authorizing any common carrier within the 
 terms of this Act to charge or receive as great compensation for a shorter as 
 for a longer distance: Provided, however. That upon application to the Inter- 
 state Commerce Commission such common carrier may in special cases, after 
 investigation, be authorized by the Commission to charge less for longer than 
 for shorter distances for the transportation of passengers or property; and the 
 Commission may from time to time prescribe the extent to which such desig- 
 nated common carrier may be reheved from the operation of this section: 
 Provided further, That no rates or charges lawfully existing at the time of the 
 passage of this amendatory Act shall be required to be changed by reason of 
 the provisions of this section prior to the expiration of six months after the 
 passage of this Act, nor in any case where application shall have been filed 
 before the Commission, in accordance with the provisions of this section, 
 until a determination of such appUcation by the Commission. 
 
 Whenever u, carrier by railroad shall in competition with a water route or 
 routes reduce the rates on the carriage of any species of freight to or from com- 
 petitive points, it shall not be permitted to increase such rates unless after 
 hearing by the Interstate Commerce Commission it shall be found that such 
 proposed increase rests upon changed conditions other than the elimination of 
 water competition. 
 
 § 5. Pooling and other incorporate relations. 
 
 [Sec generally Chapters VIII and XX, supra.) 
 
 Sec. 5. (As amended August 24, 1912.) That it shall be unlawful for any 
 common carrier subject to the provisions of this Act to enter into any con- 
 tract, agreement, or combination with any other common carrier or carriers 
 for the pooling of freights of different and competing railroads, or to divide 
 between them the aggregate or net proceeds of the earnings of such railroads, 
 or any portion thereof; and in any case of an agreement for the pooling of 
 freights as aforesaid, each day of its continuance shall be deemed a separate 
 offense. 
 
 From and after the first day of July, nineteen himdred and fourteen, it 
 shall be unlawful for any railroad company or other common carrier subject 
 to the Act to regulate commerce to own, lease, operate, control, or have any 
 
 [ 1083 ] 
 
Appendix A 
 
 interest whatsoever (by stock ownership or otherwise, either directly, indirectly, 
 through any holding company, or by stockholders or directors in common, or 
 in any other manner) in any common carrier by water operated through the 
 Panama Canal or elsewhere with which said railroad or other carrier aforesaid 
 does or may compete for traffic or any vessel carrying freight or passengers 
 upon said water route or elsewhere with which said railroad or other carrier 
 aforesaid does or may compete for traffic; and in case of the violation of this 
 provision each day in which such violation continues shall be deemed a sep- 
 arate offense. 
 
 Jurisdiction is hereby conferred on the Interstate Commerce Commission 
 to determine questions of fact as to the competition or possibility of competi- 
 tion, after full hearing, on the appUcation of any railroad company or other 
 carrier. Such application may be filed for the purpose of determining whether 
 any existing service is in violation of this section and pray for an order per- 
 mitting the continuance of any vessel or vessels already in operation, or for 
 the purpose of asking an order to install new service not in conflict with the 
 provisions of this paragraph. The Commission may on its own motion or the 
 application of any shipper institute proceedings to inquire into the operation 
 of any vessel in use by any railroad or other carrier which has not applied to 
 the Commission and had the question of competition or the possibiUty of com- 
 petition determined as herein provided. In all such cases the order of said 
 Commission shall be final. 
 
 If the Interstate Commerce Commission shall be of the opinion that any 
 such existing specified service by water other than through the Panama Canal 
 is being operated in the interest of the public and is of advantage to the con- 
 venience and commerce of the people, and that such extension will neither 
 exclude, prevent, nor reduce competition on the route by water under con- 
 sideration, the Interstate Commerce Commission may, by order, extend the 
 time during which such service by water may continue to be operated beyond 
 July first, nineteen hundred and fourteen. In every case of such extension 
 the rates, schedules, and practices of such water carrier shall be filed with the 
 Interstate Commerce Commission and shall be subject to the Act to regulate 
 commerce and all amendments thereto in the same manner and to the same 
 extent as is the railroad or other common carrier controlling such water carrier 
 or interested in any manner in its operation: Provided, Any application for 
 extension under the terms of this provision filed with the Interstate Com- 
 merce Commission prior to July first, nineteen hundred and fourteen, but for 
 any reason not heard and disposed of before said date, may be considered and 
 granted thereafter. 
 
 No vessel permitted to engage in the coastwise or foreign trade of the 
 United States shall be permitted to enter or pass through said canal if such 
 ship is owned, chartered, operated, or controlled by any person or company 
 which is doing business in violation of the provisions of the Act of Congress 
 approved July second, eighteen hundred and ninety, entitled "An Act to 
 protect trade and commerce against unlawful restraints and monopolies," 
 or the provisions of sections seventy-three to seventy-seven, both inclusive, 
 of an Act approved August twenty-seventh, eighteen hundred and ninety-four, 
 entitled "An Act to reduce taxation, to provide revenue for the Govern- 
 
 [ 1084 ] 
 
Appendix A 
 
 ment, and for other purposes," or the provisions of any other Act of Congress 
 amending or supplementing the said Act of July second, eighteen hun- 
 dred and ninety, commonly known as the Sherman Antitrust Act and amend- 
 ments thereto, or said sections of the Act of August twenty-seventh, eighteen 
 hundred and ninety-four. The question of fact may be determined by the 
 judgment of any court of the United States of competent jurisdiction in any 
 cause pending before it to which the owners or operators of such ship are 
 parties. Suit may be brought by any shipper or by the Attorney General 
 of the United States. 
 
 § 6. Publication and posting of schedules. 
 
 [See generally Chapters XVII and XXII, supra.] 
 
 Sec. 6. (Amended March 2, 1889. Following section svhsliluted June 29, 
 1906. Amended June 18, 1910, and August 24, 1912.) That every common 
 carrier subject to the provisions of this Act shall file with the Commission 
 created by this Act and print and keep open to public inspection schedules 
 showing all the rates, fares, and charges for transportation between different 
 points on its own route and between points on its own route and points on the 
 route of any other carrier by railroad, by pipe line, or by water when a through 
 route and joint rate have been established. If no joint rate over the through 
 route has been established, the several carriers in such through route shall 
 file, print and keep open to public inspection as aforesaid, the separately 
 estabUshed rates, fares and charges applied to the through transportation. 
 The schedules printed as aforesaid by any such common carrier shall plainly 
 state the places between which property and passengers will be carried, and 
 shall contain the classification of freight in force, and shall also state separately 
 all terminal charges, storage charges, icing charges, and all other charges which 
 the Commission may require, all privileges or facilities granted or allowed 
 and any rules or regulations which in any wise change, affect, or determine 
 any part or the aggregate of such aforesaid rates, fares, and charges, or the 
 value of the service rendered to the passenger, shipper, or consignee. Such 
 schedules shall be plainly printed in large type, and copies for the use of the 
 Iiublic shall be kept posted in two public and conspicuous places in every 
 depot, station, or office of such carrier where passengers or freight, respec- 
 tively, are received for transportation, in such form that they shall be acces- 
 sible to the public and can be conveniently inspected. The provisions of 
 this section shall apply to all traffic, transportation, and facilities defined in 
 this Act. 
 
 Any common carrier subject to the provisions of this Act receiving freight 
 in the United States to be carried through a foreign country to any place in 
 the United States shall also in like manner print and keep open to public 
 inspection, at every depot or office where such freight is received for shipment, 
 schedules showing the through rates established and charged by such com- 
 mon carrier to all points in the United States beyond the foreign country to 
 which it accepts freight for shipment; and any freight shipped from the 
 United States through a foreign country into the United States the through 
 rate on which shall not have been made public, as re(iuired by this Act, 
 shall, before it is admitted into the United States from said foreign 
 
 [ 1085 1 
 
Appendix A 
 
 country, be subject to customs duties as if said freight were of foreign 
 production. 
 
 No change shall be made in the rates, fares, and charges or joint rates, 
 fares, and charges which have been filed and published by any common carrier 
 in compliance with the requirements of this section, except after thirty days' 
 notice to the Commission and to the public published as aforesaid, which 
 shall plainly state the changes proposed to be made in the schedule then in 
 force and the time when the changed rates, fares, or charges will go into effect; 
 and the proposed changes shall be shown by printing new schedules, or shall 
 be plainly indicated upon the schedules in force at the time and kept open to 
 public inspection: Provided, That the Commission may, in its discretion and 
 for good cause shown, allow changes upon less than the notice herein specified, 
 or modify the requirements of this section in respect to publishing, posting, 
 and filing of tariifs, either in particular instances or by a general order ap- 
 plicable to special or peculiar circumstances or conditions. 
 
 The names of the several carriers which are parties to any joint tariff shall 
 be specified therein, and each of the parties thereto, other than the one filing 
 the same, shall file with the Commission such evidence of concurrence therein 
 or acceptance thereof as may be required or approved by the Commission, 
 and where such evidence of concurrence or acceptance is filed it shall not be 
 necessary for the carriers filing the same to also file copies of the tariffs in which 
 they are named as parties. 
 
 Every common carrier subject to this Act shall also file with said Commission 
 copies of all contracts, agreements, or arrangements with other common 
 carriers in relation to any traffic affected by the provisions of this Act to which 
 it may be a party. 
 
 The Commission may determine and prescribe the form in which the sched- 
 ules required by this section to be kept open to public inspection shall be pre- 
 pared and arranged and may change the form from time to time as shall be 
 found expedient. 
 
 No carrier, unless otherwise provided by this Act, shall engage or participate 
 in the transportation of passengers or property, as defined in this Act, unless 
 the rates, fares, and charges upon which the same are transported by said 
 carrier have been filed and published in accordance with the provisions of this 
 Act; nor shall any carrier charge or demand or collect or receive a greater or 
 less or different compensation for such transportation of passengers or property, 
 or for any service in connection therewith, between the points named in such 
 tariffs than the rates, fares, and charges which are specified in the tariff filed 
 and in effect at the time; nor shall any carrier refund or remit in any manner 
 or by any device any portion of the rates, fares, and charges so specified, nor 
 extend to any shipper or person any privileges or facilities in the transportation 
 of passengers or property, except such as are specified in such tariffs: Provided, 
 That wherever the word '"carrier" occurs in this Act it shall be held to mean 
 "common carrier." 
 
 That in time of war or threatened war preference and precedence shall, upon 
 the demand of the President of the United States, be given, over all other traf- 
 fic, to the transportation of troops and material of war, and carriers shall adopt 
 every means within their control to facilitate and expedite the military traffic. 
 
 [ 1086 ] 
 
Appendix A 
 
 The Commission may reject and refuse to file any schedule that is tendered 
 for filing which does not provide and give lawful notice of its effective date, 
 and any schedule so rejected by the Commission shall be void and its use shall 
 be unlawful. 
 
 In case of failure or refusal on the part of any carrier, receiver, or trustee to 
 comply with the terms of any regulation adopted and promulgated or any order 
 made by the Commission under the provisions of this section, such carrier, 
 receiver, or trustee shall be Kable to a penalty of five hundred doUars for each 
 such offense, and twenty-five dollars for each and every day of the continu- 
 ance of such offense, which shall accrue to the United States and may be re- 
 covered in a civil action brought by the United States. 
 
 If any common carrier subject to the provisions of this Act, after written 
 request made upon the agent of such carrier hereinafter in this section referred 
 to, by any person or company for a written statement of the rate or charge 
 appUcable to a described shipment between stated places under the schedules 
 or tariffs to which such carrier is a party, shall refuse or omit to give such 
 written statement within a reasonable time, or shall misstate in writing the 
 applicable rate, and if the person or company making such request suffers 
 damage in consequence of such refusal or omission or in consequence of the 
 misstatement of the rate, either through making the shipment over a line or 
 route for which the proper rate is higher than the rate over another available 
 line or route, or through entering into any sale or other contract whereunder 
 such person or company obligates himself or itself to make such shipment of 
 freight at his or its cost, then the said carrier shall be liable to a penalty of two 
 hundred and fifty doUars, which shall accrue to the United States and may be 
 recovered in a civil action brought by the United States. 
 
 It shall be the duty of every carrier by railroad to keep at all times con- 
 spicuously posted in every station where freight is received for transportation 
 the name of an agent resident in the city, village, or town where such station is 
 located, to whom application may be made for the information by this section 
 required to be furnished on written request; and in case any carrier shall fail 
 at any time to have such name so posted in any station, it shall be sufficient 
 to address such request in substantially the following form : ' ' The Station Agent 
 
 of the Company at Station," together with the name of the 
 
 proper post office, inserting the name of the carrier company and of the station 
 in the blanks, and to serve the same by depositing the request so addressed, 
 with postage thereon prepaid, in any post office. 
 
 When property may be or is transported from point to point in the United 
 States by rail and water through the Panama Canal or otherwise, the trans- 
 portation being by a common carrier or carriers, and not entirely within the 
 Umits of a single State, the Interstate Commerce Commission shall have juris- 
 diction of such transportation and of the carriers, both by rail and by water, 
 which may or do engage in the same, in the following particulars, in addition 
 to the jurisdiction given by the Act to regiilate conmierce, as amended June 
 eighteenth, nineteen hundred and ten: 
 
 (a) To estabhsh physical connection between the fines of the rail carrier 
 and the dock of the water carrier by directing the rail carrier to make suitable 
 connection between its lines and a track or tracks which have been constructed 
 
 [ 1087 ] 
 
Appendix A 
 
 from the dock to the Umits of its right of way, or by directing either or both 
 the rail and water carrier, individually or in connection with one another, to 
 construct and connect with the lines of the rail carrier a spur track or tracks 
 to the dock. This provision shaU only apply where such connection is reason- 
 ably practicable, can be made with safety to the pubhc, and where the amount 
 of business to be handled is sufficient to justify the outlay. 
 
 The Commission shall have full authority to determine the terms and con- 
 ditions upon which these connecting tracks, when constructed, shall be op- 
 erated, and it may, either in the construction or the operation of such tracks, 
 determine what sum shall be paid to or by either carrier. The provisions of 
 this paragraph shall extend to cases where the dock is owned by other parties 
 than the carrier involved. 
 
 (b) To establish through routes and maximum joint rates between and over 
 such rail and water lines, and to determine all the terms and conditions under 
 which such lines shall be operated in the handling of the traffic embraced. 
 
 (c) To establish maximum proportional rates by rail to and from the ports to 
 which the traffic is brought, or from which it is taken by the water carrier, and 
 to determine to what traffic and in connection with what vessels and upon 
 what terms and conditions such rates shall apply. By proportional rates are 
 meant those which differ from the corresponding local rates to and from the 
 port and which apply only to traflBc which has been brought to the port or is 
 carried from the port by a common carrier by water. 
 
 (d) If any rail carrier subject to the Act to regulate commerce enters into 
 arrangements with any water carrier operating from a port in the United 
 States to a foreign coimtry, through the Panama Canal or otherwise, for the 
 handling of through business between interior points of the United States 
 and such foreign country, the Interstate Commerce Commission may require 
 such railway to enter into similar arrangements with any or all other lines of 
 steamships operating from said port to the same foreign country. 
 
 The orders of the Interstate Commerce Commission relating to this section 
 shall only be made upon formal complaint or in proceedings instituted by the 
 Commission of its own motion and after full hearing. The orders provided 
 for in the two amendments to the Act to regulate commerce enacted in this 
 section shall be served in the same manner and enforced by the same penalties 
 and proceedings as are the orders of the Commission made under the provi- 
 sions of section fifteen of the Act to regulate commerce, as amended June 
 eighteenth, nineteen hundred and ten, and they may be conditioned for the 
 payment of any sum or the giving of security for the payment of any sum or 
 the discharge of any obligation which may be required by the terms of said 
 order. 
 
 § 7. Continuous carriage of freights. 
 
 [See generally Chapters III and XVIII, supra.] 
 
 Sec. 7. That it shall be unlawful for any common carrier subject to the 
 provisions of this Act to enter into any combination, contract, or agreement, 
 expressed or implied, to prevent, by change of time schedule, carriage in dif- 
 ferent cars, or by other means or devices, the carriage of freights from being 
 continuous from the place of shipment to the place of destination; and no 
 
 [ 1088 ] 
 
Appendix A 
 
 break of bulk, stoppage, or interruption made by such common carrier shall 
 prevent the carriage of freights from being and being treated as one continuous 
 carriage from the place of shipment to the place of destination, unless such 
 break, stoppage, or interruption was made in good faith for some necessary 
 purpose, and without any intent to avoid or unnecessarily interrupt such 
 continuous carriage or to evade any of the provisions of this Act. 
 
 § 8. Liability of carriers for damages. 
 
 [See generally Chapters XXII and XXIV, supra.] 
 
 Sec. 8. That in case any common caiTier subject to the provisions of this 
 Act shall do, cause to be done, or permit to be done any act, matter, or thing 
 in this Act prohibited or declared to be unlawful, or shall omit to do any act, 
 matter, or thing in this Act required to be done, such common carrier shall be 
 hable to the person or persons injured thereby for the full amount of damages 
 sustained in consequence of any such violation of the provisions of this Act, 
 together with a reasonable counsel or attorney's fee, to be fixed by the court in 
 every case of recovery, which attorney's fee shall be taxed and collected as 
 part of the costs in the case. 
 
 § 9. Jurisdiction of such suits. 
 
 [See generally Chapters XXI and XXIII, supra.] 
 
 Sec. 9. That any person or persons claiming to be damaged by any common 
 carrier subject to the provisions of this Act may either make complaint to the 
 Commission as hereinafter provided for, or may bring suit in his or their own 
 behalf for the recovery of the damages for which such common carrier may be 
 liable under the provisions of this Act, in any district or circuit court of the 
 United States of competent jurisdiction; but such person or persons shall not 
 have the right to pursue both of said remedies, and must in each case elect 
 which one of the two methods of procedure herein provided for he or they 
 will adopt. In any such action brought for the recovery of damages the court 
 before which the same shall be pending may compel any director, officer, re- 
 ceiver, trustee, or agent of the corporation or company defendant in such suit 
 to attend, appear, and testify in such case, and may compel the production 
 of the books and papers of such corporation or company party to any such 
 suit; the claim that any such testimony or evidence may tend to criminate the 
 person giving such evidence shall not excuse such witness from testifying, but 
 such evidence or testimony shall not be used against such person on the trial 
 of any criminal proceeding. 
 
 § 10. Penalties for violation of the act. 
 [See generally Chapters XIV, XVII, XXIII, and XXIV, supra.] 
 Sec. 10. (As amended March 2, 1889, and June 18, 1910.) That any com- 
 mon carrier subject to the provisions of this Act, or, whenever such common 
 carrier is a corporation, any director or officer thereof, or any receiver, trustee, 
 lessee, agent, or person acting for or employed by such corporation, who, 
 alone or with any other corporation, company, person, or party, shall will- 
 fully do or cause to be done, or shall willingly suffer or permit to be done, 
 any act, matter, or thing in this Act prohibited or declared to be unlawful, 
 
 69 [ 1089 ] 
 
Appendix A 
 
 or who shall aid or abet therein, or shall willfully omit or fail to do any act, 
 matter, or thing in this Act required to be done, or shall cause or willingly 
 suffer or permit any act, matter, or thing so directed or required by this Act 
 to be done not to be so done, or shall aid or abet any such omission or failure, 
 or shall be guilty of any infraction of this Act for which no penalty is other- 
 wise provided, or who shall aid or abet therein, shall be deemed guilty of a 
 misdemeanor, and shall, upon conviction thereof in any district court of the 
 United States within the jurisdiction of which such offense was committed, 
 be subject to a fine of not to exceed five thousand dollars for each offense: 
 Provided, That if the offense for which any person shall be convicted as 
 aforesaid shall be an unlawful discrimination in rates, fares, or charges for 
 the transportation of passengers or property, such person shall, in addition 
 to the fine hereinbefore provided for, be liable to imprisonment in the peni- 
 tentiary for a term of not exceeding two years, or both such fine and imprison- 
 ment, in the discretion of the court. 
 
 Any common carrier subject to the provisions of this Act, or, whenever 
 such common carrier is a corporation, any officer or agent thereof, or any 
 person acting for or employed by such corporation, who, by means of false 
 billing, false classification, false weighing, or false report of weight, or by any 
 other device or means, shall knowingly and willfully assist, or shall wilMngly 
 suffer or permit, any person or persons to obtain transportation for property 
 at less than the regular rates then established and in force on the line of trans- 
 portation of such common carrier, shall be deemed guilty of a misdemeanor, 
 and shall, upon conviction thereof in any court of the United States of com- 
 petent jurisdiction within the district in which such offense was committed, 
 be subject to a fine of not exceeding five thousand dollars, or imprisonment in 
 the penitentiary for a term of not exceeding two years, or both, in the dis- 
 cretion of the court, for each offense. 
 
 Any person, corporation, or company, or any agent or officer thereof, who 
 shall deliver property for transportation to any common carrier subject to 
 the provisions of this Act, or for whom, as consignor or consignee, any such 
 carrier shall transport property, who shall knowingly and willfully, directly 
 or indirectly, himself or by employee, agent, officer, or otherwise, by false 
 billing, false classification, false weighing, false representation of the contents 
 of the package or the substance of the property, false report of weight, false 
 statement, or by any other device or means, whether with or without the con- 
 sent or connivance of the carrier, its agent, or ofiicer, obtain or attempt to 
 obtain transportation for such property at less than the regular rates then es- 
 tablished and in force on the line of transportation; or who shall knowingly 
 and willfully, directly or indirectly, himself or by employee, agent, officer, 
 or otherwise, by false statement or representation as to cost, value, nature, 
 or extent of injury, or by the use of any false bill, bill of lading, receipt, voucher, 
 roll, account, claim, certificate, aflSdavit, or deposition, knowing the same to 
 be false, fictitious, or fraudulent, or to contain any false, fictitious, or fraudu- 
 lent statement or entry, obtain or attempt to obtain any allowance, refund, 
 or payment for damage or otherwise in connection with or growing out of the 
 transportation of or agreement to transport such property, whether with or 
 without the consent or connivance of the carrier, whereby the compensation 
 
 [ 1090 ] 
 
Appendix A 
 
 of such carrier for such transportation, either before or after payment, shall 
 in fact be made less than the regular rates then established and in force on 
 the line of transportation, shall be deemed guilty of fraud, which is hereby 
 declared to be a misdemeanor, and shall, upon conviction thereof in any 
 court of the United States of competent jurisdiction within the district in 
 which such offense was wholly or in part committed, be subject for each 
 offense to a fine of not exceeding five thousand dollars or imprisonment in 
 the penitentiary for a term of not exceeding two years, or both, in the dis- 
 cretion of the court: Provided, That the penalty of imprisonment shall not 
 apply to artificial persons. 
 
 If any such person, or any officer or agent of any such corporation or com- 
 pany, shall, by payment of money or other thing- of value, solicitation, or 
 otherwise, induce or attempt to induce any common carrier subject to the 
 provisions of this Act, or any of its officers or agents, to discriminate unjustly 
 in his, its, or their favor as against any other consignor or consignee in the 
 transportation of property, or shall aid or abet any common carrier in any 
 such unjust discrimination, such person or such officer or agent of such cor- 
 poration or company shall be deemed guilty of a misdemeanor, and shall, 
 upon conviction thereof in any court of the United States of competent juris- 
 diction within the district in which such offense was committed, be subject 
 to a fine of not exceeding five thousand dollars, or imprisonment in the pen- 
 itentiary fbr a term of not exceeding two years, or both, in the discretion of 
 the court, for each offense; and such person, corporation, or company shall 
 also, together with said common carrier, be liable, jointly or severally, in an 
 action to be brought by any consignor or consignee discriminated against 
 in any court of the United States of competent jurisdiction for all damages 
 caused by or resulting therefrom. 
 
 § 11. Organization of the commission. 
 
 [See generally Chapters II and XXI, supra.] 
 
 Sec. 11. That a Commission is hereby created and established to be known 
 as the Interstate Commerce Commission, which shall be composed of five 
 Commissioners, who shall be appointed by the President, by and with the 
 advice and consent of the Senate. The Commissioners first appointed under 
 this Act shall continue in office for the term of two, three, four, five, and six 
 years, respectively, from the first day of January, Anno Domini eighteen 
 hundred and eighty-seven, the term of each to be designated by the President; 
 but their successors shall be appointed for terms of six years, except that any 
 person chosen to fill a vacancy shall be appointed only for the unexpired 
 time of the Commissioner whom he shall succeed. Any Commissioner may 
 be removed by the President for inefficiency, neglect of duty, or malfeasance 
 in office. Not more than three of the Commissioners shall be appointed from 
 the same political party. No person in the employ of or holding any official 
 relation to any common carrier subject to the provisions of this Act, or owning 
 stock or bonds thereof, or who is in any manner pecuniarily interested therein, 
 shall enter upon the duties of or hold such office. Said Commissioners shall 
 not engage in any other business, vocation, or employment. No vacancy in 
 the Commission shall impair the right of the remaining Commissioners to 
 
 [ 1091 ] 
 
Appendix A 
 
 exercise all the powers of the Commission. (See section 34, enlarging Commis- 
 sion and increasing salaries.) 
 
 § 12. Its powers and duties. 
 
 [See generally Chapters XXII and XXIII, supra.] 
 
 Sec. 12. (As amended March S, 1889, and February 10, 1891.) That the 
 Commission hereby created shall have authority to inquire into the manage- 
 ment of the business of all common carriers subject to the provisions of this 
 Act, and shall keep itself informed as to the manner and method in which 
 the same is conducted, and shall have the right to obtain from such common 
 carriers full and complete information necessary to enable the Commission 
 to perform the duties and carry out the objects for which it was created; and 
 the Commission is hereby authorized and required to execute and enforce the 
 provisions of this Act; and, upon the request of the Commission, it shall be 
 the duty of any district attorney of the United States to whom the Com- 
 mission may apply to institute in the proper court and to prosecute under the 
 direction of the Attorney General of the United States all necessary proceed- 
 ings for the enforcement of the provisions of this Act and for the punishment 
 of all violations thereof, and the costs and expenses of such prosecution shall 
 be paid out of the appropriation for the expenses of the courts of the United 
 States; and for the purposes of this Act the Commission shall have power to 
 require, by subpoena, the attendance and testimony of witnesses and the pro- 
 duction of all books, papers, tariffs, contracts, agreements, and documents 
 relating to any matter under investigation. 
 
 Such attendance of witnesses, and the production of such documentary 
 evidence, may be required from any place in the United States, at any desig- 
 ated place of hearing. And in case of disobedience to a subpoena the Com- 
 mission, or any party to a proceeding before the Commission, may invoke the 
 aid of any court of the United States in requiring the attendance and testi- 
 mony of witnesses and the production of books, papers, and documents under 
 the provisions of this section. 
 
 And any of the circuit courts of the United States within the jurisdiction 
 of which such inquiry is carried on may, in case of contumacy or refusal to 
 obey a subpoena issued to any common carrier subject to the provisions of 
 this Act, or other person, issue an order requiring such common carrier or 
 other person to appear before said Commission (and produce books and papers 
 if so ordered) and give evidence touching the matter in question; and any 
 failure to obey such order of the court may be punished by such court as a 
 contempt thereof. The claim that any such testimony or evidence may tend 
 to criminate the person giving such evidence shall not excuse such witness 
 from testifying; but such evidence or testimony shall not be used against such 
 person on the trial of any criminal proceeding. 
 
 The testimony of any witness may be taken, at the instance of a party, in 
 any proceeding or investigation pending before the Commission, by deposition, 
 at any time after a cause or proceeding is at issue on petition and answer. 
 The Commission may also order testimony to be taken by deposition in any 
 proceeding or investigation pending before it, at any stage of such proceeding 
 or investigation. Such depositions may be taken before any judge of any 
 
 [ 1092 ] 
 
Appendix A 
 
 court of the United States, or any commissioner of a circuit, or any clerk of a 
 district or circuit court, or any chancellor, justice, or judge of a supreme or 
 superior court, mayor or chief magistrate of a city, judge of a county court, 
 or court of common pleas of any of the United States, or any notary public, 
 not being of counsel or attorney to either of the parties, nor interested in 
 the event of the proceeding or investigation. Reasonable notice must first 
 be given in writing by the party or his attorney proposing to take such dep- 
 osition to the opposite party or his attorney of record, as either may be 
 nearest, which notice shall state the name of the witness and the time and place 
 of the taking of his deposition. Any person may be compelled to appear and 
 depose, and to produce documentary evidence, in the same manner as wit- 
 nesses may be compelled to appear and testify and produce documentary 
 evidence before the Commission as hereinbefore provided. 
 
 Every person deposing as herein provided shall be cautioned and sworn 
 (or affirm, if he so request) to testify the whole truth, and shall be carefully 
 examined. His testimony shall be reduced to writing by the magistrate 
 taking the deposition, or under his direction, and shall, after it has been re- 
 duced to writing, be subscribed by the deponent. 
 
 If a witness whose testimony may be desired to be taken by deposition be 
 in a foreign country, the deposition may be taken before an officer or person 
 designated by the Commission, or agreed upon by the parties by stipulation 
 in writing to be filed with the Commission. All depositions must be promptly 
 filed with the Commission. 
 
 Witnesses whose depositions are taken pursuant to this Act, and the magis- 
 trate or other officer taking the same, shall severally be entitled to the same 
 fees as are paid for like services in the courts of the United States. 
 
 § 13. Remedies provided for wrongs. 
 
 [See generally Chapters XXI and XXIII, supra.] 
 
 Sec. 13. {As amended June 18, 1910.) That any person, firm, corporation, 
 company, or association, or any mercantile, agricultural, or manufacturing 
 society or other organization, or any body politic or municipal organization, 
 or any common carrier, complaining of anything done or omitted to be done 
 by any common carrier subject to the provisions of this Act, in contravention 
 of the provisions thereof, may apply to said Commission by petition, which 
 shall briefly state the facts; whereupon a statement of the complaint thus 
 made shall be forwarded by the Commission to such common carrier, who 
 shall be called upon to satisfy the complaint, or to answer the same in writing, 
 within a reasonable time, to be specified by the Commission. If such common 
 carrier within the time specified shall make reparation for the injtiry alleged 
 to have been done, the common carrier shall be relieved of liabiUty to the 
 complainant only for the particular violation of law thus complained of. If 
 such carrier or carriers shall not satisfy the complaint within the time specified, 
 or there shall appear to be any reasonable ground for investigating said com- 
 plaint, it shall be the duty of the Commission to investigate the matters com- 
 plained of in such manner and by such means as it shall deem proper. 
 
 Said Commission shall, in like manner and with the same authority and 
 powers, investigate any complaint forwarded by the railroad commissioner 
 
 [ 1093 ] 
 
Appendix A 
 
 or railroad commission of any State or Territory at the request of such com- 
 missioner or commission, and the Interstate Commerce Commission shall have 
 full authority and power at any time to institute an inquiry, on its own mo- 
 tion, in any case and as to any matter or thing concerning which a complaint 
 is authorized to be made, to or before said Commission by any provision of 
 this Act, or concerning which any question may arise under any of the provi- 
 sions of this Act, or relating to the enforcement of any of the provisions of 
 this Act. And the said Commission shall have the same powers and authority 
 to proceed with any inquiry instituted on its own motion as though it had 
 been appealed to by complaint or petition under any of the provisions of this 
 Act, including the power to make and enforce any order or orders in the case, 
 or relating to the matter or thing concerning which the inquiry is had ex- 
 cepting orders for the payment of money. No complaint shall at any time be 
 dismissed because of the absence of direct damage to the complainant. 
 
 § 14. Commission must make reports. 
 
 [See generally Chapters XX and XXIII, supra.] 
 
 Sec. 14. (Amended March 2, 1889, and June 29, 1906.) That whenever an 
 investigation shall be made by said Commission, it shall be its duty to make 
 a report in writing in respect thereto, which shall state the conclusions of 
 the Commission, together with its decision, order, or requirement in the 
 premises; and in case damages are awarded such report shall include the find- 
 ings of fact on which the award is made. 
 
 All reports of investigations made by the Commission shall be entered of 
 record, and a copy thereof shall be furnished to the party who may have com- 
 plained, and to any common carrier that may have been complained of. 
 
 The Commission may provide for the publication of its reports and deci- 
 sions in such form and manner as may be best adapted for public informa- 
 tion and use, and such authorized publications shall be competent evidence 
 of the reports and decisions of the Commission therein contained in all courts 
 of the United States and of the several States without any further proof or 
 authentication thereof. The Commission may also cause to be printed for 
 early distribution its annual reports. 
 
 § 16. Fixing rates and classifications. 
 
 [See generally Chapters II, V, XI, XV, XVIII and XXII, supra.] 
 Sec. 15. {As amended June 29, 1906, and June 18, 1910.) That when- 
 ever, after full hearing upon a complaint made as provided in section thirteen 
 of this Act, or after full hearing under an order for investigation and hearing 
 made by the Commission on its own initiative (either in extension of any pend- 
 ing complaint or without any complaint whatever), the Commission shall be 
 of opinion that any individual or joint rates or charges whatsoever demanded, 
 charged, or collected by any common carrier or carriers subject to the provi- 
 sions of this Act for the transportation of persons or property or for the trans- 
 mission of messages by telegraph or telephone as defined in the first section 
 of this Act, or that any individual or joint classifications, regulations, or prac- 
 tices whatsoever of such carrier or carriers subject to the provisions of this 
 Act arc unjust or unreasonable or unjustly discriminatory, or unduly prefer- 
 
 [ 1094 ] 
 
Appendix A 
 
 ential or prejudicial or otherwise in violation of any of the provisions of this 
 Act, the Commission is hereby authorized and empowered to determine and 
 prescribe what will be the just and reasonable individual or joint rate or rates, 
 charge or charges, to be thereafter observed in such case as the maximum to 
 be charged, and what individual or joint classification, regulation, or practice 
 is just, fair, and reasonable, to be thereafter followed, and to make an order 
 that the carrier or carriers shall cease and desist from such violation to the 
 extent to which the Commission finds the same to exist, and shall not there- 
 after publish, demand, or collect any rate or charge for such transportation 
 or transmission in excess of the maximum rate or charge so prescribed, and 
 shall adopt the classification and shall conform to and observe the regulation 
 or practice so prescribed. All orders of the Commission, except orders for the 
 payment of money, shall take effect within such reasonable time, not less 
 than thirty days, and shall continue in force for such period of time, not ex- 
 ceeding two years, as shall be prescribed in the order of the Commission, unless 
 the same shall be suspended or modified or set aside by the Commission, 
 or be suspended or set aside by a court of competent jurisdiction. When- 
 ever the carrier or carriers, in obedience to such order of the Commission or 
 otherwise, in respect to joint rates, fares, or charges, shall fail to agree among 
 themselves upon the apportionment or division thereof the Commission may, 
 after hearing, make a supplemental order prescribing the just and reasonable 
 proportion of such joint rate to be received by each carrier party thereto, 
 which order shall take effect as a part of the original order. 
 
 Whenever there shall be filed with the Commission any schedule stating a 
 new individual or joint rate, fare, or charge, or any new individual or joint 
 classification, or any new individual or joint regulation or practice affecting any 
 rate, fare, or charge, the Commission shall have, and it is hereby given, author- 
 ity, either upon complaint or upon its own initiative without complaint, at 
 once, and if it so orders, without answer or other formal pleading by the inter- 
 ested carrier or carriers, but upon reasonable notice, to enter upon a hearing 
 concerning the propriety of such rate, fare, charge, classification, regulation, or 
 practice; and pending such hearing and the decision thereon the Commission 
 upon fiUng with such schedule and delivering to the carrier or carriers af- 
 fected thereby a statement in writing of its reasons for such suspension may 
 suspend the operation of such schedule and defer the use of such rate, fare, 
 charge, classification, regulation, or practice, but not for a longer period than 
 one hundred and twenty days beyond the time when such rate, fare, charge, 
 classification, regulation, or practice would otherwise go into effect; and after 
 full hearing, whether completed before or after the rate, fare, charge, classifica- 
 tion, regulation, or practice goes into effect, the Commission may make such 
 order in reference to such rate, fare, charge, classification, regulation, or prac- 
 tice as would be proper in a proceeding initiated after the rate, fare, charge, 
 classification, regulation, or practice had become effective: Provided, That 
 if any such hearing cannot be concluded within the period of suspension, 
 as above stated, the Interstate Commerce Commission may, in its discretion, 
 extend the time of suspension for a further period not exceeding six months. 
 At any hearing involving a rate increased after January first, nineteen hun- 
 dred and ten, or of a rate sought to be increased after the passage of this Act, 
 
 [ 1095 ] 
 
Appendix A 
 
 the biirden of proof to show that the increased rate or proposed increased 
 rate is just and reasonable shall be upon the common carrier, and the Com- 
 mission shall give to the hearing and decision of such questions preference 
 over all other questions pending before it and decide the same as speedily as 
 possible. 
 
 The Commission may also, after hearing, on a complaint or upon its own 
 initiative without complaint, establish through routes and joint classifications, 
 and may estabhsh joint rates as the maximum to be charged and may pre- 
 scribe the division of such rates as hereinbefore provided and the terms and 
 conditions under which such through routes shall be operated, whenever the 
 carriers themselves shall have refused or neglected to establish voluntarily 
 such through routes or joint classifications or joint rates; and this provision 
 shall apply when one of the connecting carriers is a water Une. The Commis- 
 sion shall not, however, establish any through route; classification, or rate 
 between street electric passenger railways not engaged in the general business 
 of transporting freight in addition to their passenger and express business 
 and railroads of a different character, nor shall the Commission have the right 
 to establish any route, classification, rate, fare, or charge when the trans- 
 portation is wholly by water, and any transportation by water affected by 
 this Act shall be subject to the laws and regulations applicable to transporta- 
 tion by water. 
 
 And in establishing such through route, the Commission shall not require 
 any company, without its consent, to embrace in such route substantially 
 less than the entire length of its railroad and of any intermediate railroad 
 operated in conjunction and under a common management or control there- 
 with which Ues between the termini of such proposed through route, unless 
 to do so would make such through route unreasonably long as compared 
 with another practicable through route which could otherwise be estab- 
 lished. 
 
 In all cases where at the time of deUvery of property to any railroad cor- 
 poration being a common carrier, for transportation subject to the provisions 
 of this Act to any point of destination, between which and the point of such 
 deUvery for shipment two or more through routes and through rates shall 
 have been established as in this Act provided to which through routes and 
 through rates such carrier is a party, the person, firm, or corporation making 
 such shipment, subject to such reasonable exceptions and regulations as the 
 Interstate Commerce Commission shall from time to time prescribe, shall 
 have the right to designate in writing by which of such through routes such 
 property shall be transported to destination, and it shall thereupon be the 
 duty of the initial carrier to route said property and issue a through bill of 
 lading therefor as so directed, and to transport said property over its own line 
 or lines and deliver the same to a connecting line or fines according to such 
 through route, and it shall be the duty of each of said connecting carriers to 
 receive said property and transport it over the said line or fines and defiver 
 the same to the next succeeding carrier or consignee according to the routing 
 instructions in said bill of lading: Provided, however, That the shipper shall 
 in all instances have the right to determine, where competing fines of railroad 
 constitute portions of a through fine or route, over which of said competing 
 
 [ 1096 ] 
 
Appendix A 
 
 lines so constituting a portion of said through line or route his freight shall be 
 transported. 
 
 It shall be unlawful for any conunon carrier subject to the provisions of this 
 Act, or any officer, agent, or employee of such common carrier, or for any 
 other person or corporation lawfully authorized by such common carrier to 
 receive information therefrom, knowingly to disclose to or permit to be ac- 
 quired by any person or corporation other than the shipper or consignee, with- 
 out the consent of such shipper or consignee, any information concerning the 
 nature, kind, quantity, destination, consignee, or routing of any property 
 tendered or delivered to such common carrier for interstate transportation, 
 which information may be used to the detriment or prejudice of such shipper 
 or consignee, or which may improperly disclose his business transactions to a 
 competitor; and it shall also be unlawful for any person or corporation to solicit 
 or knowingly receive any such information which may be so used: Provided, 
 That nothing in this Act shall be construed to prevent the giving of such in- 
 formation in response to any legal process issued under the authority of any 
 state or federal court, or to any officer or agent of the Government of the 
 United States, or of any State or Territory, in the exercise of his powers, or 
 to any. officer or other duly authorized person seeking such information for 
 the prosecution of persons charged with or suspected of crime; or information 
 given by a common carrier to another carrier or its duly authorized agent, for 
 the purpose of adjusting mutual traffic accounts in the ordinary course of 
 business of such carriers. 
 
 Any person, corporation, or association violating any of the provisions of 
 the next preceding paragraph of this section shall be deemed guilty of a mis- 
 demeanor, and for each offense, on conviction, shall pay to the United States 
 a penalty of not more than one thousand dollars. 
 
 If the owner of property transported under this Act directly or indirectly 
 renders any service connected with such transportation, or furnishes any in- 
 strumentality used therein, the charge and allowance therefor shall be no 
 more than is just and reasonable, and the Commission may, after hearing on 
 a complaint or on its own initiative, determine what is a reasonable charge 
 as the maximmn to be paid by the carrier or carriers for the services so ren- 
 dered or for the use of the instrumentality so furnished, and fix the same by 
 appropriate order, which order shall have the same force and effect and be 
 enforced in like manner as the orders above provided for under this section. 
 
 The foregoing enumeration of powers shall not exclude any power which 
 the Commission would otherwise have in the making of an order under the 
 provisions of this Act. 
 
 § 16. Award of damages in reparation. 
 
 [See Chapters XIV, XXI, XXII and XXIV, supra.] 
 
 Sec. 16. (Amended March 2, 1889, June 29, 1906, and June 18, 1910.) That 
 if, after hearing on a complaint made as provided in section thirteen of this 
 Act, the Commission shall determine that any party complainant is entitled 
 to an award of damages under the provisions of this Act for a violation thereof, 
 the Commission shall make an order directing the carrier to pay to the com- 
 plainant the sum to which he is entitled on or before a day named. 
 
 [ 1097 ] 
 
Appendix A 
 
 If a carrier does not comply with an order for the payment of money within 
 the time limit in such order, the complainant, or any person for whose benefit 
 such order was made, may file in the circuit court of the United States for the 
 district in which he resides or in which is located the principal operating office 
 of the carrier, or through which the road of the carrier runs, or in any state 
 court of general jurisdiction having jurisdiction of the parties, a petition setting 
 forth briefly the causes for which he claims damages, and the order of the 
 Commission in the premises. Such suit in the circuit court of the United 
 States shall proceed in all respects hke other civil suits for damages, except 
 that on the trial of such suit the findings and order of the Commission shall be 
 prima facie evidence of the facts therein stated, and except that the petitioner 
 shall not be liable for costs in the circuit court nor for costs at any subse- 
 quent stage of the proceedings unless they accrue upon his appeal. If the 
 petitioner shall finally prevail he shall be allowed a reasonable attorney's fee, 
 to be taxed and collected as a part of the costs of the suit. All complaints for 
 the recovery of damages shall be filed with the Commission within two years 
 from the time the cause of action accrues, and not after, and a petition for the 
 enforcement of an order for the payment of money shall be filed in the circuit 
 court or state court within one year from the date of the order, and not after. 
 
 In such suits aU parties in whose favor the Commission may have made an 
 award for damages by a single order may be joined as plaintiffs, and all of the 
 carriers parties to such order awarding such damages may be joined as de- 
 fendants, and such suit may be maintained by such joint plaintiffs and against 
 such joint defendants in any district where any one of such joint plaintiffs could 
 maintain such suit against any one of such joint defendants; and service of 
 process against any one of such defendants as may not be found in the district 
 where the suit is brought may be made in any district where such defendant 
 carrier has its principal operating office. In case of such joint suit the recovery, 
 if any, may be by judgment in favor of any one of such plaintiffs, against the 
 defendant found to be liable to such plaintiff. 
 
 Every order of the Commission shall be forthwith served upon the designated 
 agent of the carrier in the city of Washington or in such other manner as may 
 be provided by law. 
 
 The Commission shall be authorized to suspend or modify its orders upon 
 such notice and in such manner as it shall deem proper. 
 
 It shall be the duty of every common carrier, its agents and employees, to 
 observe and comply with such orders so long as the same shall remain in effect. 
 
 Any carrier, any officer, representative, or agent of a carrier, or any receiver, 
 trustee, lessee, or agent of either of them, who knowingly fails or neglects to 
 obey any order made under the provisions of section fifteen of this Act shall 
 forfeit to the United States the sum of five thousand dollars for each offense. 
 Every distinct violation shall be a separate offense, and in case of a continuing 
 violation each day shall be deemed a separate offense. 
 
 The forfeiture provided for in this Act shall be payable into the Treasury of 
 the United States, and shaU be recoverable in a civil suit in the name of the 
 United States, brought in the district where the carrier has its principal 
 operating office, or in any district through which the road of the carrier 
 runs. 
 
 [ 1098 ] 
 
Appendix A 
 
 It shall be the duty of the various district attorneys, under the direction of 
 the Attorney General of the United States, to prosecute for the recovery of 
 forfeitures. The costs and expenses of such prosecution shall be paid out of 
 the appropriation for the expenses of the courts of the United States. 
 
 The Commission may employ such attorneys as it finds necessary for proper 
 legal aid and service of the Commission or its members in the conduct of their 
 work or for proper representation of the public interests in investigations 
 made by it or cases or proceedings pending before it, whether at the Commis- 
 sion's own instance or upon complaint, or to appear for and represent the 
 Commission in any case pending in the Commerce Court; and the expenses 
 of such employment shall be paid out of the appropriation for the Com- 
 mission. 
 
 If any carrier fails or neglects to obey any order of the Commission other 
 than for the payment of money, while the same is in effect, the Interstate 
 Commerce Commission or any party injured thereby, or the United States, 
 by its Attorney General, may apply to the Commerce Court for the enforce- 
 ment of such order. If, after hearing, that Court determines that the order 
 was regularly made and duly served, and that the carrier is in disobedience of 
 the same, the Court shall enforce obedience to such order by a writ of in unc- 
 tion or other proper process, mandatory or otherwise, to restrain such carrier, 
 its officers, agents, or representatives, from further disobedience of such order, 
 or to enjoin upon it or them obedience to the same. 
 
 The copies of schedules and classifications and tariffs of rates, fares, and 
 charges, and of all contracts, agreements, and arrangements between common 
 carriers filed with the Commission as herein provided, and the statistics, tables, 
 and figures contained in the annual or other reports of carriers made to the 
 Commission as required under the provisions of this Act shall be preserved as 
 pubUc records in the custody of the secretary of the Commission, and shall be 
 received as prima facie evidence of what they purport to be for the purpose 
 of investigations by the Commission and in all judicial proceedings; and 
 copies of and extracts from any of said schedules, classifications, tariffs, con- 
 tracts, agreements, arrangements, or reports, made pubUc records as afore- 
 said, certified by the secretary, under the Commission's seal, shall be received 
 in evidence with like effect as the originals. 
 
 § 16a. Commission may grant rehearings. 
 
 [See Chapters XXII and XXIII, supra.] 
 
 Sec. 16a. {Added June 29, 1906.) That after a decision, order, or require- 
 ment has been made by the Commission in any proceeding any party thereto 
 may at any time make application for rehearing of the same, or any matter 
 determined therein, and it shall be lawful for the Commission in its discretion 
 to grant such a rehearing if sufficient reason therefor be made to appear. 
 Applications for rehearing shall be governed by such general rules as the Com- 
 mission may establish. No such appUcation shall excuse any carrier from com- 
 plying with or obeying any decision, order, or requirement of the Commission, 
 or operate in any manner to stay or postpone the enforcement thereof, without 
 the special order of the Commission. In case a rehearing is granted the pro- 
 ceedings thereupon shall conform as nearly as may be to the proceedings in 
 
 [ 1099 ] 
 
Appendix A 
 
 an original hearing, except as the Commission may otherwise direct; and if, in 
 its judgment, after such rehearing and the consideration of all facts, including 
 those arising since the former hearing, it shall appear that the original decision, 
 order, or requirement is in any respect unjust or unwarranted, the Commis- 
 sion may reverse, change, or modify, the same accordingly. Any decision, 
 order, or requirement made after such rehearing, reversing, changing, or 
 modifying the original determination shall be subject to the same provisions as 
 an original order. 
 
 § 17. Form of procedure provided. 
 
 [See generally Chapters XXI and XXIII, supra.] 
 
 Sec. 17. {As amended March 2, 1889.) That the Commission may conduct 
 its proceedings in such manner as will best conduce to the proper dispatch of 
 business and to the ends of justice. A majority of the Commission shall con- 
 stitute a quorum for the transaction of business, but no Commissioner shall 
 participate in any hearing or proceeding in which he has any pecuniary interest. 
 Said Commission may, from time to time, make or amend such general rules 
 or orders as may be requisite for the order and regulation of proceedings be- 
 fore it, including forms of notices and the service thereof, which shall conform, 
 as nearly as may be, to those in use in the courts of the United States. Any 
 party may appear before said Commission and be heard, in person or by 
 attorney. Every vote and official act of the Commission shall be entered of 
 record, and its proceedings shall be public upon the request of either party 
 interested. Said Commission shall have an official seal, which shall be judi- 
 cially noticed. Either of the members of the Commission may administer 
 oaths and affirmations and sign subpasnas. 
 
 § 18. Constitution of the commission. 
 
 [See generally Chapters XXI and XXII, supra.] 
 
 Sec. 18. {As amended March 2, 1889.) [See section S4, increasing salaries 
 of Commissioners.] That each Commissioner shall receive an annual salary 
 of seven thousand five hundred dollars, payable in the same manner as the 
 judges of the courts of the United States. The Commission shall appoint a 
 secretary, who shall receive an annual salary of three thousand five hundred 
 dollars, increased to $5,000 by sundry civil act of March 4, 1907, 34 Stat. 
 L., 1311, payable in hke manner. The Commission shall have authority to 
 employ and fix the compensation of such other employees as it may find nec- 
 essary to the proper performance of its duties. Until otherwise provided by 
 law, the Commission may hire suitable ofiices for its use, and shall have author- 
 ity to procure all necessary office supplies. Witnesses summoned before the 
 Commission shall be paid the same fees and mileage that are paid witnesses 
 in the courts of the United States. 
 
 All of the expenses of the Commission, including all necessary expenses for 
 transportation incurred by the Commissioners, or by their employees under 
 their orders, in making any investigation, or upon official business in any other 
 places than in the city of Washington, shall be allowed and paid on the pres- 
 entation of itemized vouchers therefor approved by the chairman of the 
 Commission. 
 
 [1100] 
 
Appendix A 
 
 § 19. OflScers of the commission. 
 
 [See generally Chapters II and XXI, supra.] 
 
 Sec. 19. That the principal office of the Commission shall be in the city of 
 Washington, where its general sessions shall be held; but whenever the con- 
 venience of the public or the parties may be promoted, or delay or expense 
 prevented thereby, the Commission may hold special sessions in any part 
 of the United States. It may, by one or more of the Commissioners, prosecute 
 any inquiry necessary to its duties, in any part of the United States, into any 
 matter or question of fact pertaining to the business of any common carrier 
 subject to the provisions of this Act. 
 
 § 19a. Valuation of carrier's property. 
 
 [See generally Chapters VI and XX, supra.] 
 
 Sec. 19a. That the Commission shall, as hereinafter provided, investigate, 
 ascertain, and report the value of all the property owned or used by every 
 common carrier subject to the provisions of this Act. To enable the Commis- 
 sion to make such investigation and report, it is authorized to employ such 
 experts and other assistants as may be necessary. The Commission may 
 appoint examiners who shall have power to administer oaths, examine wit- 
 nesses, and take testimony. The Commission shall make an inventory which 
 shall list the property of every common carrier subject to the provisions of 
 this Act in detail, and show the value thereof as hereinafter provided, and shall 
 classify the physical property, as nearly as practicable, in conformity with the 
 classification of expenditures for road and equipment, as prescribed by the 
 Interstate Commerce Commission. 
 
 First. In such investigation said Commission shall ascertain and report in 
 detail as to each piece of property owned or used by said common carrier for 
 its purposes as a common carrier, the original cost to date, the cost of reproduc- 
 tion new, the cost of reproduction less depreciation, and an analysis of the 
 methods by which these several costs are obtained, and the reason for their 
 differences, if any. The Commission shall in like manner ascertain and report 
 separately other values, and elements of value, if any, of the property of such 
 common carrier, and an analysis of the methods of valuation employed, and 
 of the reasons for any differences between any such value, and each of the 
 foregoing cost values. 
 
 Second. Such investigation and report shall state in detail and separately 
 from improvements the original cost of all lands, rights of way, and terminals 
 owned or used for the purposes of a common carrier, and ascertained as of the 
 time of dedication to public use, and the present value of the same, and sepa- 
 rately the original and present cost of condemnation and damages or of pur- 
 chase in excess of such original cost or present value. 
 
 Third. Such investigation and report shall show separately the property 
 held for purposes other than those of a common carrier, and the original cost 
 and present value of the same, together with an analysis of the methods of 
 valuation employed. 
 
 Fourth. In ascertaining the original cost to date of the property of such 
 common carrier the Commission, in addition to such other elements as it may 
 deem necessary, shall investigate and report upon the history and organiza- 
 
 [1101] 
 
Appendix A 
 
 tion of the present and of any previotis corporation operating such property; 
 upon any increases or decreases of stocks, bonds, or other securities, in any 
 reorganization; upon moneys received by any such corporation by reason 
 of any issues of stocks, bonds, or other securities; upon the syndicating, bank- 
 ing, and other financial arrangements under which such issues were made and 
 the expense thereof; and upon the net and gross earnings of such corporations; 
 and shall also ascertain and report in such detail as may be determined by 
 the Commission upon the expenditure of all moneys and the purposes for 
 which the same were expended. 
 
 Fifth. The Conamission shall ascertain and report the amount and value 
 of any aid, gift, grant of right of way, or donation, made to any such com- 
 mon carrier, or to any previous corporation operating such property, by the 
 Government of the United States or by any State, county, or municipal gov- 
 ernment, or by individuals, associations, or corporations; and it shall also 
 ascertain and report the grants of land to any such common carrier, or any 
 previous corporation operating such property, by the Government of the 
 United States, or by any State, county, or municipal government, and the 
 amount of money derived from the sale of any portion of such grants and 
 the value of the unsold portion thereof at the time acquired and at the present 
 time, also, the amount and value of any concession and allowance made by 
 such common carrier to the Government of the United States, or to any State, 
 county, or municipal government in consideration of such aid, gift, grant, or 
 donation. 
 
 Except as herein otherwise provided, the Commission shall have power to 
 prescribe the method of procedure to be followed in the conduct of the inves- 
 tigation, the form in which the results of the valuation shall be submitted, and 
 the classification of the elements that constitute the ascertained value, and 
 such investigation shall show the value of the property of every common 
 carrier as a whole and separately the value of its property in each of the several 
 States and Territories and the District of Columbia, classified and in detail 
 as herein required. 
 
 Such investigation shall be commenced within sixty days after the ap- 
 proval of this Act and shall be prosecuted with diligence and thoroughness, 
 and the result thereof reported to Congress at the beginning of each regular 
 session thereafter until completed. 
 
 Every common carrier subject to the provisions of this Act shall furnish 
 to the Commission or its agents from time to time and as the Commission 
 may require maps, profiles, contracts, reports of engineers, and any other 
 documents, records, and papers, or copies of any or all of the same, in aid of 
 such investigation and determination of the value of the property of said 
 common carrier, and shall grant to all agents of the Commission free access 
 to its right of way, its property, and its accounts, records, and memoranda 
 whenever and wherever requested by any such duly authorized agent, and 
 every common carrier is hereby directed and required to co-operate with and 
 aid the Commission in the work of the valuation of its property in such further 
 particulars and to such extent as the Commission may require and direct, 
 and all rules and regulations made by the Commission for the purpose of 
 administering the provisions of this section and section twenty of this Act 
 
 [1102] 
 
Appendix A 
 
 shall have the full force and effect of law. Unless otherwise ordered by the 
 Commission, with the resaons therefor, the records and data of the Commis- 
 sion shall be open to the inspection and examination of the public. 
 
 Upon the completion of the valuation herein provided for the Commission 
 shall thereafter in like manner keep itself informed of all extensions and im- 
 provements or other changes in the condition and value of the property of 
 all common carriers, and shall ascertain the value thereof, and shall from 
 time to time, revise and correct its valuations, showing such revision and cor- 
 rection classified and as a whole and separately in each of the several States 
 and Territories and the District of Columbia, which valuations, both original 
 and corrected, shall be tentative valuations and shall be reported to Con- 
 gress at the beginning of each regular session. 
 
 To enable the Commission to make such changes and corrections in its 
 valuations of each class of property, every common carrier subject to the pro- 
 visions of this Act shall make such reports and furnish such information as 
 the Commission may require. 
 
 Whenever the Commission shall have completed the tentative valuation 
 of the property of any common carrier, as herein directed, and before such 
 valuation shall become final, the Commission shall give notice by registered 
 letter to the said carrier, the Attorney General of the United States, the 
 governor of any State in which the property so valued is located, and to such 
 additional parties as the Commission may prescribe, stating the valuation 
 placed upon the several classes of property of said carrier, and shall allow 
 thirty days in which to file a protest of the same with the Commission. If 
 no protest is filed within thirty days, said valuation shall become final as of 
 the date thereof. 
 
 If notice of protest is filed the Commission shall fix a time for hearing the 
 same, and shall proceed as promptly as may be to hear and consider any 
 matter relative and material thereto which may be presented in support of 
 any such protest so filed as aforesaid. If after hearing any protest of such 
 tentative valuation under the provisions of this Act the Commission shall be 
 of the opinion that its valuation should not become final, it shall make such 
 changes as may be necessary, and shall issue an order making such corrected 
 tentative valuation final as of the date thereof. All final valuations by the 
 Commission and the classification thereof shall be published and shall be 
 prima facie evidence of the value of the property in all proceedings under • 
 the Act to regulate commerce as of the date of the fixing thereof, and in all 
 judicial proceedings for the enforcement of the Act approved February fourth, 
 eighteen hundred and eighty-seven, commonly known as "the Act to regulate 
 commerce," and the various Acts amendatory thereof, and in all judicial 
 proceedings brought to enjoin, set aside, annul, or suspend, in whole or in 
 part, any order of the Interstate Commerce Commission. 
 
 If upon the trial of any action involving a final value fixed by the Com- 
 mission, evidence shall be introduced regarding such value which is found 
 by the court to be different from that offered upon the hearing before the 
 Commission, or additional thereto and substantially affecting said value, 
 the court, before proceeding to render judgment shall transmit a copy of such 
 evidence to the Commission, and shall stay further proceedings in said action 
 
 [1103] 
 
Appendix A 
 
 for such time as the court shall determine from the date of such transmis- 
 sion. Upon the receipt of such evidence the Commission shall consider the 
 same and may fix a final value different from the one fixed in the first in- 
 stance, and may alter, modify, amend or rescind any order which it has made 
 involving said final value, and shall report its action thereon to said court 
 within the time fixed by the court. If the Commission shall alter, modify, 
 or amend its order, such altered, modified, or amended order shall take the 
 place of the original order complained of and judgment shall be rendered 
 thereon as though made by the Commission in the first instance. If the 
 original order shall not be rescinded or changed by the Commission, judg- 
 ment shall be rendered upon such original order. 
 
 The provisions of this section shall apply to receivers of carriers and operat- 
 ing trustees. In case of failure or refusal on the part of any carrier, receiver, 
 or trustee to comply with all the requirements of this section and in the man- 
 ner prescribed by the Commission such carrier, receiver, or trustee shall for- 
 feit to the United States the sum of five hundred dollars for each such of- 
 fense and for each and every day of the continuance of such offense, such 
 forfeitures to be recoverable in the same manner as other forfeitures provided 
 for in section sixteen of the Act to regulate commerce. 
 
 That the district covirts of the United States shall have jurisdiction, upon 
 the appHcation of the Attorney General of the United States at the request 
 of the Commission, alleging a failure to comply with or a violation of any 
 of the provisions of this section by any common carrier, to issue a writ or 
 writs of mandamus commanding such common carrier to comply with the 
 provisions of this section. 
 
 It shall be the duty of every common carrier by railroad whose propei-ty 
 is being valued under the Act of March first, nineteen hundred and thirteen, 
 to transport the engineers, field parties, and other employees of the United 
 States who are actually engaged in making surveys and other examination 
 of the physical property of said carrier necessary to execute said Act from 
 point to point on said railroad as may be reasonably required by them in the 
 actual discharge of their duties; and, also, to move from point to point and 
 store at such points as may be reasonably required the cars of the United 
 States which are being used to house and maintain said employees; and, also, 
 to carry the supplies necessary to maintain said employees and the other 
 property of the United States actually used on said railroad in said work 
 of valuation. The service above required shall be regarded as a special service 
 and shall be rendered under such forms and regulations and for such reason- 
 able compensation as may be prescribed by the Interstate Commerce Com- 
 mission and as will insure an accurate record and account of the service ren- 
 dered by the railroad, and such evidence of transportation, bills of lading, 
 and so forth, "shall be furnished to the Commission as may from time to time 
 be required by the Commission. 
 
 § 20. Reports and accounts of carriers. 
 
 [See generally Chapters VIII and XX, supra.] 
 
 Sec. 20. (As amended June S9, 1906, February 25, 1909, and June 18, 1910.) 
 That the Commission is hereby authorized to require annual reports from all 
 [1104] 
 
Appendix A 
 
 common carriers subject to the provisions of this Act, and from the owners of 
 all railroads engaged in interstate commerce as defined in this Act, to pre- 
 scribe the manner in which such reports shall be made, and to require from 
 such carriers specific answers to all questions upon which the Commission 
 may need information. Such annual reports shall show in detail the amount 
 of capital stock issued, the amounts paid therefor, and the manner of pay- 
 ment for the same; the dividends paid, the surplus fund, it any, and the num- 
 ber of stockholders; the funded and floating debts and the interest paid thereon; 
 the cost and value of the carrier's property, franchises, and equipments; the 
 number of employees and the salaries paid each class; the amounts expended 
 for improvements each year, how expended, and the character of such im- 
 provements; the earnings and receipts from each branch of business and 
 from all sources; the operating and other expenses; the balances of profit and 
 loss; and a complete exhibit of the financial operations of the carrier each 
 year, including an annual balance sheet. Such reports shall also contain 
 such information in relation to rates or regulations concerning fares or freights, 
 or agreements, arrangements, or contracts affecting the same as the Com- 
 mission may require; and the Commission may, in its discretion, for the pur- 
 pose of enabling it the better to carry out the purposes of this Act, prescribe 
 a period of time within which all common carriers subject to the provisions 
 of this Act shall have, as near as may be, a uniform system of accounts, and 
 the manner in which such accounts shall be kept. 
 
 Said detailed reports shall contain all the required statistics for the period 
 of twelve months ending on the thirtieth day of June in each year, or on the 
 thirty-first day of December in each year if the Commission by order substitute 
 that period for the year ending June thirtieth, and shall be made out under 
 oath and filed with the Commission at its office in Washington within three 
 months after the close of the year for which the report is made, unless addi- 
 tional time be granted in any case by the Commission; and if any carrier, 
 person, or corporation subject to the provisions of this Act shall fail to make 
 and file said annual reports within the time above specified, or within the time 
 extended by the Commission, for making and filing the same, or shall fail 
 to make specific answer to any question authorized by the provisions of this 
 section within thirty days from the time it is lawfully required so to do, such 
 party shall forfeit to the United States the sum of one hundred dollars for each 
 and every day it shall continue to be in default with respect thereto. The 
 Commission shall also have authority by general or special orders to require 
 said carriers, or any of them, to file monthly reports of earnings and expenses, 
 and to file periodical or special, or both periodical and special, reports con- 
 cerning any matters about which the Commission is authorized or required 
 by this or any other law to inquire or to keep itself informed or which it is 
 required to enforce; and such periodical or special reports'shall be under oath 
 whenever the Commission so requires; and if any such carrier shall fail to 
 make and file any such periodical or special report within the time fixed 
 by the Commission, it shall be subject to the forfeitures last above pro- 
 vided. 
 
 Said forfeitures shall be recovered in the manner provided for the recovery 
 of forfeitures under the provisions of this Act. 
 
 70 [ 1105 ] 
 
Appendix A 
 
 The oath required by this section may be taken before any person author- 
 ized to administer an oath by the laws of the State in which the same is 
 taken. 
 
 The Commission may, in its discretion, prescribe the forms of any and all 
 accounts, records, and memoranda to be kept by carriers subject to the pro- 
 visions of this Act, including the accounts, records, and memoranda of the 
 movement of traffic as well as the receipts and expenditures of moneys. The 
 Commission shall at all times have access to all accounts, records, and mem- 
 oranda kept by carriers subject to this Act, and it shall be unlawful for such 
 carriers to keep any other accounts, records, or memoranda than those pre- 
 scribed or approved by the Commission, and it may employ special agents 
 or examiners, who shall have authority under the order of the Commission 
 to inspect and examine any and all accounts, records, and memoranda kept 
 by such carriers. This provision shall apply to receivers of carriers and op- 
 erating trustees. 
 
 In case of failure or refusal on the part of any such carrier, receiver, or 
 trustee to keep such accounts, records, and memoranda on the books and in 
 the manner prescribed by the Commission, or to submit such accounts, rec- 
 ords, and memoranda as are kept to the inspection of the Commission or 
 any of its authorized agents or examiners, such carrier, receiver, or trustee 
 shall forfeit to the United States the sum of five hundred dollars for each 
 such offense and for each and every day of the continuance of such offense, 
 such forfeitures to be recoverable la the same manner as other forfeitures 
 provided for in this Act. 
 
 Any person who shall willfully make any false entry in the accounts of any 
 book of accounts or in any record or memoranda kept by a carrier, or who 
 shall willfully destroy, mutilate, alter, or by any other means or device falsify 
 the record of any such account, record, or memoranda, or who shall wiUfully 
 neglect or fail to make full, true, and correct entries in such accounts, records, 
 or memoranda of all facts and transactions appertaining to the carrier's busi- 
 ness, or shall keep any other accounts; records, or memoranda than those 
 prescribed or approved by the Commission, shall be deemed guilty of a mis- 
 demeanor, and shall be subject, upon conviction in any court of the United 
 States of 'competent jurisdiction, to a fine of not less than one thousand dollars 
 nor more than five thousand dollars or imprisonment for a term not less than 
 one year nor more than three years, or both such fine and imprisonment: 
 Provided, That the Commission may in its discretion issue orders specifying 
 such operating, accounting, or financial papers, records, books, blanks, tickets, 
 stubs, or documents of carriers which may, after a reasonable time, be de- 
 stroyed, and prescribing the length of time such books, papers, or documents 
 shall be preserved. 
 
 Any examiner wto divulges any fact or information which may come to 
 his knowledge during the course of such examination, except in so far as he 
 may be directed by the Commission or by a court or judge thereof, shall 
 be subject, upon conviction in any court of the United States of competent 
 jurisdiction, to a fine of not more than five thousand dollars or imprisonment 
 for a term not exceeding two years, or both. 
 
 That the circuit and district courts of the United States shall have juris- 
 
 [ 1106 ] 
 
Appendix A 
 
 diction, upon the application of the Attorney General of the United States 
 at the request of the Commission, alleging a failure to comply with or 
 a violation of any of the provisions of said Act to regulate commerce 
 or of any Act supplementary thereto or amendatory thereof by any 
 common carrier, to issue a writ or writs of mandamus commanding 
 such common carrier, to comply with the provisions of said Acts, or any of 
 them. 
 
 And to carry out and give effect to the provisions of said Acts, or any of 
 them, the Commission is hereby authorized to employ special agents or ex- 
 aminers who shall have power to administer oaths, examine witnesses, and 
 receive evidence. 
 
 That any common carrier, railroad, or transportation company receiving 
 property for transportation from a point in one State to a point in another 
 State shall issue a receipt or bill of lading therefor and shall be liable to the 
 lawful holder thereof for any loss, damage, or injury to such property caused 
 by it or by any common carrier, railroad, or transportation company to which 
 such property may be delivered or over whose line or lines such property may 
 pass, and no contract, receipt, rule, or regulation shall exempt such common 
 carrier, railroad, or transportation company from theliability hereby imposed: 
 Provided, That nothing in this section shall deprive any holder of such receipt 
 or bill of lading of any remedy or right of action which he has under existing 
 law. 
 
 That the common carrier, railroad, or transportation company issuing such 
 receipt or bill of lading shall be entitled to recover from the common -carrier, 
 rJiilroad, or transportation company on whose line the loss, damage, or injury 
 shall have been sustained the amount of such loss, damage, or injury as it may 
 be required to pay to the owners of such property, as may be evidenced by 
 any receipt, judgment, or transcript thereof. 
 
 No suit brought in any State court of competent jurisdiction against a 
 railroad company, or other corporation, or person, engaged in and carrying 
 on the business of a common carrier, to recover damages for delay, loss of, 
 or injury to property received for transportation by such common carrier 
 under section twenty of the Act to regulate commerce, approved February 
 fourth, eighteen hundred and eighty-seven, as amended June twenty-ninth, 
 nineteen hundred and six, April thirteenth, nineteen himdred ^nd eight, 
 February twenty-fifth, nineteen hundred and nine, and June eighteenth, 
 nineteen hundred and ten, shall be removed to any court of the United States 
 where the matter in controversy does not exceed, exclusive of interest and 
 costs, the sum or value of $3,000. 
 
 § 21. Annual reports of the commission. 
 
 [See generally Chapters II and XXI, supra.] 
 
 Sec. 21. (As amended March 2, 1889.) That the Commission shall, on or 
 before the first day of December in each year, make a report, which shall be 
 transmitted to Congress, and copies of which shall be distributed as are the 
 other reports transmitted to Congress. This report shall contain such in- 
 formation and data collected by the Commission as may be considered of 
 value in the determination of questions connected with the regulation of com- 
 
 , [1107] 
 
Appendix A 
 
 merce, together with such recommendations as to additional legislation re- 
 lating thereto as the Commission may deem necessary; and the names and 
 compensation of the persons employed by said Commission. 
 
 § 22. Carriage free or at reduced rates, 
 
 [See generally Chapters XIII and XIV, supra.] 
 
 Sec. 22. (As amended March 2, 1889, and February 8, 1896.) [See section 1, 
 5lh par.] That nothing in this Act shall prevent the carriage, storage, or 
 handling of property free or at reduced rates for the United States, State, 
 or municipal governments, or for charitable purposes, or to or from fairs and 
 expositions for exhibition thereat, or the free carriage of destitute and home- 
 less persons transported by charitable societies, and the necessary agents 
 employed in such transportation, or the issuance of mileage, excursion, or 
 commutation passenger tickets; nothing in this Act shall be construed to 
 prohibit any common carrier from giving reduced rates to ministers of reli- 
 gion, or to municipal governments for the transportation of indigent persons, 
 or to inmates of the National Homes or State Homes for Disabled Volunteer 
 Soldiers, and of Soldiers' and Sailors' Orphan Homes, including those about 
 to enter and those returning home after discharge, under arrangements with 
 the boards of managers of said homes; nothing in this Act shall be construed 
 to prevent railroads from giving free carriage to their own officers and em- 
 ployees, or to prevent the principal officers of any railroad company or com- 
 panies from exchanging passes or tickets with other railroad companies for 
 their officers and employees; and nothing in this Act contained shall in any 
 way abridge or alter the remedies now existing at common law or by statute, 
 but the provisions of this Act are in addition to such remedies: Provided, 
 That no pending litigation shall in any way be affected by this Act: Provided 
 further. That nothing in this Act shall prevent the issuance of joint inter- 
 changeable five-thousand-mile tickets, with special privileges as to the amount 
 of free baggage that may be carried under mileage tickets of one thousand or 
 more miles. But before any common carrier, subject to the provisions of 
 this Act, shall issue any such joint interchangeable mileage tickets with spe- 
 cial privileges, as aforesaid, it shall file with the Interstate Commerce Com- 
 mission copies of the joint tariffs of rates, fares, or charges on which such 
 joint interchangeable mileage tickets are to be based, together with specifica- 
 tions of the amount of free baggage permitted to be carried under such tickets, 
 in the same manner as common carriers are required to do with regard to 
 other joint rates by section six of this Act; and all the provisions of said sec- 
 tion six relating to joint rates, fares, and charges shall be observed by said 
 common carriers and enforced by the Interstate Commerce Commission a-s 
 fully with regard to such joint interchangeable mileage tickets as with regard 
 to other joint rates, fares, and charges referred to in said section six. It shall 
 be unlawful for any common carrier that has issued or authorized to be issued 
 any such joint interchangeable mileage tickets to demand, collect, or re- 
 ceive from any person or persons a greater or less compensation for transporta- 
 tion of persons or baggage under such joint interchangeable mileage tickets 
 than that required by the rate, fare, or charge specified in the copies of the 
 joint tariff of rates, fares, or charges filed with the Commission in force at the 
 
 [1108] . 
 
Appendix A 
 
 time. The provisions of section ten of this Act shall apply to any violation of 
 the requirements of this proviso. 
 
 § 23. Jurisdiction of the courts. 
 
 [See generally Chapters XXIII and XXIV, supra.] 
 
 Sec. 23. {Added March 2, 1889.) That the circuit and district courts of 
 the United States shall have jurisdiction upon the relation of any person or 
 persons, firm, or corporation, alleging such violation by a common carrier, 
 of any of the provisions of the Act to which this is a supplement and all Acts 
 amendatory thereof, as prevents the relator from having interstate traffic 
 moved by said common carrier at the same rates as are charged, or upon 
 terms or conditions as favorable as those given by said common carrier for 
 like traffic under similar conditions to any other shipper, to issue a writ or 
 writs of mandamus against said common carrier, commanding such common 
 carrier to move and transport the traffic, or to furnish cars or other facilities 
 for transportation for the party applying for the writ; Provided, That if any 
 question of fact as to the proper compensation to the common carrier for 
 the service to be enforced by the writ is raised by the pleadings, the writ of 
 peremptory mandamus may issue, notwithstanding such question of fact is 
 undetermined, upon such terms as to security, payment of money into the 
 court, or otherwise, as the court may think proper, pending the determina- 
 tion of the question of fact: Provided, That the remedy hereby given by writ 
 of mandamus shall be cumulative, and shall not be held to exclude or inter- 
 fere with other remedies provided by this Act or the Act to which it is a sup- 
 plement. 
 
 § 24. General powers of the conuoission. 
 
 [See generally Chapters II and XXI, swpra.] 
 
 Sec. 24. {Added June 29, 1906.) That the Interstate Commerce Commis- 
 sion is hereby enlarged so as to consist of seven members with terms of seven 
 years, and each shall receive ten thousand dollars compensation annually. 
 The qualifications of the Commissioners and the manner of the payment of 
 their salaries shall be as already provided by law. Such enlargement of the 
 Commission shall be accomplished through appointment by the President, 
 by and with the advice and consent of the Senate, of two additional Interstate 
 Commerce Commissioners, one for a term expiring December thirty-first, 
 nineteen hundred and eleven, one for a term expiring December thirty-first, 
 nineteen hundred and twelve. The terms of the present Commissioners, or 
 of any successor appointed to fill a vacancy caused by the death or resigna- 
 tion of any of the present Commissioners, shall expire as heretofore provided 
 by law. Their successors and the successors of the additional Commissioners 
 herein provided for shall be appointed for the full terms of seven years, except 
 that any person appointed to fill a vacancy shall be appointed only for the 
 unexpired term of the Commissioner whom he shall succeed. Not more than 
 four Commissioners shall be appointed from the same political party. 
 
 {Addilional provisions in Act of June 29, 1906.) (Sec. 9.) That all existing 
 laws rein ting to the attendance of witnesses and the production of evidence 
 and the compeUing of testimony under the Act to regulate commerce and all 
 
 [11091 
 
Appendix A 
 
 Acts amendatory thereof shall apply to any and all proceedings and hearings 
 under this Act. 
 
 (Sec. 10.) That all laws and parts of laws in conflict with the provisions 
 of this Act are hereby repealed; but the amendments herein provided for shall 
 not affect causes now pending in courts of the United States, but such causes 
 shall be prosecuted to a conclusion in the manner heretofore provided by 
 law. 
 
 (Sec. 11.) That this Act shall take effect and be in force from and after 
 its passage. 
 
 Joint resolution of June 30, 1906, provides: "That the Act entitled 'An 
 Act to amend an Act entitled "An Act to regulate Commerce," approved 
 February 4, 1887, and all Acts amendatory thereof, and to enlarge the powers 
 of the Interstate Commerce Commission,' shall take effect and be in force 
 sixty days after its approval by the President of the United States." 
 
 § 24a. Service of process in Washington. 
 
 {Additional provisions in Act o/ June 18, 1910.) (Sec. 6, par. 2.) It shall 
 be the duty of every common carrier subject to the provisions of this Act, 
 within sixty days after the taking effect of this Act, to designate in writing 
 an agent in the city of Washington, District of Columbia, upon whom service 
 of all notices and processes may be made for and on behalf of said common 
 carrier in any proceeding or suit pending before the Interstate Commerce Com- 
 mission or before said Commerce Court, and to file such designation in the 
 office of the secretary of the Interstate Commerce Commission, which designa- 
 tion may from time to time be changed by like writing similarly filed; and 
 thereupon service of all notices and processes may be made upon such com- 
 mon carrier by leaving a copy thereof with such designated agent at his office 
 or usual place of residence in the city of Washington, with like effect as if 
 made personally upon such common carrier, and in default of such designation 
 of such agent, service of any notice or other process in any proceeding before 
 said Interstate Commerce Commission or Commerce Court may be made 
 by posting such notice or process in the office of the secretary of the Interstate 
 Commerce Commission. 
 
 (Sec. 16.) That nothing in this Act contained shall undo or impair any 
 proceedings heretofore taken by or before the Interstate Commerce Cora- 
 mission or any of the acts of said Commission; and in any cases, proceedings, 
 or matters now pending before it, the Commission may exercise any of the 
 powers hereby conferred upon it, as would be proper in cases, proceedings, or 
 matters hereafter initiated and nothing in this Act contained shall operate to 
 release or affect any obligation, liability, penalty, or forfeiture heretofore 
 existing against or incurred by any person, corporation, or association. 
 
 (Sec. 18.) That this Act shall take effect and be in force from and after 
 the expiration of sixty days after its passage, except as to sections twelve and 
 sixteen, which sections shall take effect and be in force immediately. 
 
 [1110] 
 
APPENDIX B 
 
 DISTRICT COURT JURISDICTION ACT 
 [See generally Chapters II and XXIV, supra] 
 
 § 1. Repeal of Commerce Court Act. 
 
 The Commerce Court, created and established by the Act entitled "An 
 Act to create a Commerce Court and to amend the Act entitled 'An Act to 
 regulate commerce,' approved February fourth, eighteen hundred and eighty- 
 seven, as heretofore amended, and for other purposes," approved June eight- 
 eenth, nineteen hundred and ten, is abolished from and after December 
 thirty-first, nineteen hundred and thirteen, and the jurisdiction vested in 
 said Commerce Court by said Act is transferred to and vested in the several 
 district courts of the United States, and all Acts or parts of Acts in so far as 
 they relate to the establishment of the Commerce Court are repealed. Noth- 
 ing herein contained shall be deemed to affect the tenure of any of the judges 
 now acting as circuit judges by appointment under the terms of said Act, 
 but such judges shall continue to act under assignment, as in the said Act 
 provided, as judges of the district courts and circuit courts of appeals; and 
 in the event of and on the death, resignation, or removal from office of any of 
 such judges, his office is hereby abolished and no successor to him shall be 
 appointed. 
 
 The venue of any suit hereafter brought to enforce, suspend, or set aside, 
 in whole or in part, any order of the Interstate Commerce Commission shall 
 be in the judicial district wherein is the residence of the party or any of the 
 parties upon whose petition the order was made, except that where the order 
 does not relate to transportation or is not made upon the petition of any party 
 the venue shall be in the district where the matter complained of in the petition 
 before the Commission arises, and except that where the order does not relate 
 either to transportation or to a matter so complained of before the Commis- 
 sion the matter covered by the order shall be deemed to arise in the district 
 where one of the petitioners in court has either its principal office or its prin- 
 cipal operating office. In case such transportation relates to a through ship- 
 ment the term "destination" shall be construed as meaning final destination 
 of such shipment. 
 
 § 2. Procedure in district courts. 
 
 The procedure in the district courts in respect to cases of which jurisdic- 
 tion is conferred upon them by this Act shall be the same as that heretofore 
 prevailing in the Commerce Court. The orders, writs, and processes of the 
 district courts may in these cases run, be served, and be returnable anywhere 
 in the United States; and the right of appeal from the district courts in such 
 cases shall be the same as the right of appeal heretofore prevailing under 
 
 [1111] 
 
Appendix B 
 
 existing law from the Commerce Court. No interlocutory injunction suspend- 
 ing or restraining the enforcement, operation, or execution of, or setting aside, 
 in whole or in part, any order made or entered by the Interstate Commerce 
 Commission shall be issued or granted by any district court of the United 
 States, or by any judge thereof, or by any circuit judge acting as district 
 judge, unless the application for the same shall be presented to a circuit or 
 district judge, and shall be heard and determined by three judges, of whom at 
 least one shall be a circuit judge, and unless a majority of said three judges 
 shall concur in granting such application. When such application as afore- 
 said is presented to a judge, he shall immediately call to his assistance to hear 
 and determine the application two other judges. Said application shall not 
 be heard or determined before at least five days' notice of the hearing has been 
 given to the Interstate Commerce Commission, to the Attorney General of 
 the United States, and to such other persons as may be defendants in the suit: 
 Provided, That in cases where irreparable damage would otherwise ensue to 
 the petitioner, a majority of said three judges concurring, may, on hearing, 
 after not less than three days' notice to the Interstate Commerce Commission 
 and the Attorney General, allow a temporary stay or suspension, in whole 
 or in part, of the operation of the order of the Interstate Commerce Com- 
 mission for not more than sixty days from the date of the order of said judges 
 pending the application for the order or injunction, in which case the said 
 order shall contain a specific finding, based upon evidence submitted to the 
 judges making the order and identified by reference thereto, that such irrep- 
 arable damage would result to the petitioner and specifying the nature of 
 the damage. The said judges may, at the time of hearing such application, 
 upon a like finding, continue the temporary stay or suspension in whole or 
 in part until decision upon the application. The hearing upon such applica- 
 tion for an interlocutory injunction shall be given precedence and shall be in 
 .every way expedited and be assigned for a hearing at the earliest practicable 
 day after the expiration of the notice hereinbefore provided for. An appeal 
 may be taken direct to the Supreme Court of the United States from the order 
 granting or denying, after notice and hearing, an interlocutory injunction, in 
 such case if such appeal be taken within thirty days after the order, in respect 
 to which complaint is made, is granted or refused; and upon the final hearing 
 of any suit brought to suspend or set aside, in whole or in part, any order of 
 said Commission the same requirement as to judges and the same procedure 
 as to expedition and appeal shall apply. A final judgment or decree of the 
 district court may be reviewed by the Supreme Court of the United States 
 if appeal to the Supreme Court be taken by an aggrieved party within sixty 
 days after the entry of such final judgment or decree, and such appeals may 
 be taken in like manner as appeals are taken under existing law in equity 
 cases. And in such case the notice required shall be served upon the defend- 
 ants in the case and upon the Attorney General of the State. All cases pending 
 in the Commerce Court at the date of the passage of this Act shall be deemed 
 pending in and be transferred forthwith to said district courts except cases 
 which may previously have been submitted to that court for final decree and 
 the latter to be transferred to the district courts if not decided by the Com- 
 merce Court before December first, nineteen hundred and thirteen, and all 
 [1112] 
 
Appendix B 
 
 cases wherein injunctions or other orders or decrees, mandatory or otherwise, 
 have been directed or entered prior to the aboUtion of the said court shall be 
 transferred forthwith to said district courts, which shall have jurisdiction 
 to proceed therewith and to enforce said injunctions, orders, or decrees. Each 
 of said cases and all the records, papers, and proceedings shall be transferred 
 to the district court wherein it might have been filed at the time it was filed 
 in the Commerce Court if this Act had then been in effect; and if it might 
 have been filed in any one of two or more district courts it shall be transferred 
 to that one of said district courts which may be designated by the petitioner 
 or petitioners in said case, or, upon failure of said petitioners to act in the 
 premises within thirty days after the passage of this Act, to such one of said 
 district courts as may be designated by the judges of the Commerce Com-t. 
 The judges of the Commerce Court shall have authority, and are hereby di- 
 rected, to make any and all orders and to take any other action necessary to 
 transfer as aforesaid the cases and all the records, papers, and proceedings 
 then pending in the Commerce Court to said district courts. All administra- 
 tive books, dockets, files, and all papers of the Commerce Court not transferred 
 as part of the record of any particular case shall be lodged in the Department 
 of Justice. All furniture, carpets, and other property of the Commerce Court 
 is turned over to the Department of Justice and the Attorney General is au- 
 thorized to supply such portion thereof as in his judgment may be proper and 
 necessary to the United States Board of Mediation and Conciliation. 
 
 Any case hereafter remanded from the Supreme Court which, but for the 
 passage of this Act, would have been remanded to the Commerce Court, 
 shall be remanded to a district court, designated by the Supreme Court, 
 wherein it might have been instituted at the time it was instituted in the 
 Commerce Court if this Act had then been in effect, and thereafter such dis- 
 trict court shall take all necessary and proper proceedings in such case in ac- 
 cordance with law and such mandate, order, or decree therein as may be made 
 by said Supreme Court. 
 
 All laws or parts of laws inconsistent with the foregoing provisions relating 
 to the Commerce Court, are repealed. 
 
 PubUc, No. 32 approved October 22, 1913. 
 
 [1113] 
 
APPENDIX C 
 
 COMPULSORY TESTIMONY AND IMMUNITY ACTS 
 [See generally Chapters XXI and XXIII, supra] 
 
 § 1. Giving of testimony compulsory. 
 
 Be it enacted by the Senate and House of Representatives of the United States 
 of America in Congress assembled, That no person shall be excused from at- 
 tending and testifying or from producing books, papers, tariffs, contracts, 
 agreements and documents before the Interstate Commerce Commission, 
 or in obedience to the subpoena of the Commission, whether such subpoena 
 be signed or issued by one or more Commissioners, or in any cause or proceed- 
 ing, criminal or otherwise, based upon or growing out of any alleged violation 
 of the Act of Congress, entitled "An Act to regulate commerce," approved 
 February fourth, eighteen hundred and eighty-seven, or of any amendment 
 thereof on the ground or for the reason that the testimony or evidence, docu- 
 mentary or otherwise, required of him, may tend to criminate him or subject 
 him to a penalty or forfeiture. But no person shall be prosecuted or sub- 
 jected to any penalty or forfeiture for or on account of any transaction, matter 
 or thing, concerning which he may testify, or produce evidence, documentary 
 or otherwise, before said Conamission, or in obedience to its subpoena, or the 
 subpoena of either of them, or in any such case or proceeding: Provided, That 
 no person so testifying shall be exempt from prosecution and punishment for 
 perjury committed in so testifying. 
 
 Any person who shall neglect or refuse to attend and testify, or to answer 
 any lawful inquiry, or to produce books, papers, tariffs, contracts, agreements 
 and documents, if in his power to do so, in obedience to the subpoena or law- 
 ful requirement of the Commission shall be guilty of an offense and upon 
 conviction thereof by a court of competent jurisdiction shall be punished 
 by fine not less than one hundred dollars nor more than five thousand dollars, 
 or by imprisonment for not more than one year or by both such fine and im- 
 prisonment. 
 
 Public, No. 54, approved February 11, 1893. 
 
 § 2. Immunity of witnesses provided. 
 
 Be it enacted by the Senate and House of Representatives of the United States 
 of America in Congress assembled. That under the immunity provisions in the 
 Act entitled "An Act in relation to testimony before the Interstate Commerce 
 Commission," and so forth, approved February eleventh, eighteen hundred 
 and ninety-three, in section six of the Act entitled "An Act to establish the 
 Department of Commerce and Labor," approved February fourteenth, 
 nineteen hundred and three, and in the Act entitled "An Act to further regu- 
 late commerce with foreign nations and among the States," approved Pebru- 
 
 [1114] 
 
Appendix C 
 
 ary nineteenth, nineteen hundred and three, and in the Act entitled "An 
 Act making appropriations for the legislative, executive, and judicial expenses 
 of the Government for the fiscal year ending June thirtieth, nineteen hundred 
 and four, and for other purposes," approved February twenty-fifth, nineteen 
 hundred and three, immunity shall extend only to a. natural person who, in 
 obedience to a subpoena, gives testimony under oath or produces evidence, 
 documentary or otherwise, under oath. 
 Public, No. 389, approved June 30, 1906. 
 
 1115 
 
APPENDIX D 
 
 ELKINS ACT 
 [See generally Chapters II, XIII, XIV and XXIV, supra] 
 
 § 1. Liabilities of carriers and their officers. 
 
 Sec. 1. {As amended June 29, 1906.) That any thing done or omitted to 
 be done by a corporation common carrier, subject to the Act to regulate com- 
 merce and the Acts amendatory thereof, which, if done or omitted to be done 
 by any director or officer thereof, or any receiver, trustee, lessee, agent, or 
 person acting for or employed by such corporation, would constitute a mis- 
 demeanor under said Acts or under this Act, shall also be held to be a misde- 
 meanor committed by such corporation, and upon conviction thereof it shall 
 be subject to like penalties as are prescribed in said Acts or by this Act with 
 reference to such persons, except as such penalties are herein changed. The 
 willful failure upon the part of any carrier subject to said Acts to file and 
 publish the tariffs or rates and charges as required by said Acts, or strictly 
 to observe such tariffs until changed according to law, shall be a misdemeanor, 
 and upon conviction thereof the corporation offending shall be subject to a 
 fine of not less than one thousand dollars nor more than twenty thousand 
 dollars for each offense; and it shall be unlawful for any person, persons, or 
 corporation to offer, grant, or give, or to solicit, accept, or receive any rebate, 
 concession, or discrimination in respect to the transportation of any property 
 in interstate or foreign commerce by any common carrier subject to said Act 
 to regulate commerce and the Acts amendatory thereof whereby any such 
 property shall by any device whatever be transported at a less rate than that 
 named in the tariffs published and filed by such carrier, as is required by said 
 Act to regulate commerce and the Acts amendatory thereof, or whereby any 
 other advantage is given or discrimination is practiced. Every person or 
 corporation, whether carrier or shipper, who shall, knowingly, offer, grant, 
 or give, or solicit, accept, or receive any such rebates, concession, or discrimina^ 
 tion shall be deemed guilty of a misdemeanor, and on conviction thereof shall 
 be punished by a fine of not less than one thousand dollars nor more than 
 twenty thousand dollars: Provided, That any person, or any officer or di- 
 rector of any corporation subject to the provisions of this Act, or the Act 
 to regulate commerce and the Acts amendatory thereof, or any receiver, 
 trustee, lessee, agent, or person acting for or employed by any such corpora- 
 tion, who shall be convicted as aforesaid, shall, in addition to the fine herein 
 provided for, be liable to imprisonment in the penitentiary for a term of not 
 exceeding two years, or both such fine and imprisonment, in the discretion 
 of the court. Every violation of this section shall be prosecuted in any court 
 of the United States having jurisdiction of crimes within the district in which 
 such violation was committed, or through which the transportation may have 
 
 [1116] 
 
Appendix D 
 
 been conducted; and whenever the offense is begun in one jurisdiction and 
 completed in another it may be dealt with, inquired of, tried, determined, 
 and punished in either jurisdiction in the same manner as if the offense had 
 been actually and wholly committed therein. 
 
 In construing and enforcing the provisions of this section, the act, omission, 
 or failure of any officer, agent, or other person acting for or employed by any 
 common carrier, or shipper, acting within the scope of his employment, shall 
 in every case be also deemed to be the act, omission, or failure of such carrier 
 or shipper as well as that of the person. Whenever any carrier files with the 
 Interstate Commerce Commission or pubUshes a particular rate under the 
 provisions of the Act to regulate commerce or Acts amendatory thereof, or 
 participates in any rates so filed or published, that rate as against such carrier, 
 its officers or agents, in any prosecution begun under this Act shall be con- 
 clusively deemed to be the legal rate, and any departure from such rate, or 
 any offer to depart therefrom, shall be deemed to be an offense under this 
 section of this Act. 
 
 Any person, corporation, or company who shall deliver property for inter- 
 state transportation to any common carrier, subject to the provisions of this 
 Act, or for whom as consignor or consignee, any such carrier shall transport 
 property from one State, Territory, or the Distfict of Columbia to any other 
 State, Territory, or the District of Columbia, or foreign country, who shall 
 knowingly by employee, agent, officer, or otherwise, directly or indirectly, by 
 or through any means or device whatsoever, receive or accept from such 
 common carrier any sum of money or any other valuable consideration as a 
 rebate or offset against the regular charges for transportation of such prop- 
 erty, as fixed by the schedules of rates provided for in this Act, shall in addi- 
 tion to any penalty provided by this Act forfeit to the United States a sum of 
 money three times the amount of money so received or accepted and three 
 times the value of any other consideration so received or accepted, to be as- 
 certained by the trial court; and the Attorney General of the United States 
 is authorized and directed, whenever he has reasonable grounds to believe 
 that any such person, corporation, or company has knowingly received or 
 accepted from any such common carrier any sum of money or other valuable 
 consideration as a rebate or offset as aforesaid, to institute in any court of 
 the United States of competent jurisdiction a civil action to collect the said 
 sum or sums so forfeited as aforesaid; and in the trial of said action all such 
 rebates or other considerations so received or accepted for a period of six years 
 prior to the commencement of the action, may be included therein, and the 
 amount recovered shall be three times the total amount of money, or three 
 times the total value of such consideration, so received or accepted, or both, 
 as the case may be. 
 
 § 2. Who are parties in interest. 
 
 Sec. 2. That in any proceeding for the enforcement of the provisions of the 
 statutes relating to interstate commerce, whether such proceedings be in- 
 stituted before the Interstate Commerce Commission or be begun originally 
 in any circuit court of the United States, it shall be lawful to include as parties, 
 in addition to the carrier, all persons interested in or affected by the rate, regu- 
 
 [1117] 
 
Appendix D 
 
 lation, or practice under consideration, and inquiries, investigations, orders, 
 and decrees may be made with reference to and against such additional parties 
 in the same manner, to the same extent, and subject to the sarne provisions as 
 are or shall be authorized by law with respect to carriers. 
 
 § 3. Injunctive relief against discrimination. 
 
 Sec. 3. That whenever the Interstate Commerce Commission shall have 
 reasonable ground for belief that any common carrier is engaged in the car- 
 riage of passengers or freight traffic between given points at less than the 
 published rates on file, or is committing any discriminations forbidden by 
 law, a petition may be presented alleging such facts to the circuit court of the 
 United States sitting in equity having jurisdiction; and when the act com- 
 plained of is alleged to have been committed or as being committed in part 
 in more than one judicial district or State, it may be dealt with, inquired of, 
 tried, and determined in either such judicial district or State, whereupon it 
 shall be the duty of the court summarily to inquire into the circumstances, 
 upon such notice and in such manner as the court shall direct and without the 
 formal pleadings and proceedings applicable to ordinary suits in equity, and 
 to make such other persons or corporations parties thereto as the court may 
 deem necessary, and upon being satisfied of the truth of the allegations of 
 said petition said court shall enforce an observance of the published tariffs or 
 direct and require a discontinuance of such discrimination by proper orders, 
 writs, and process, which said orders, writs, and process may be enforceable 
 as well against the parties interested in the traffic as against the carrier, sub- 
 ject to the right of appeal as now provided by law. It shall be the duty of the 
 several district attorneys of the United States, whenever the Attorney Gen- 
 eral shall direct, either of his own motion or upon the request of the Interstate 
 Commerce Commission, to institute and prosecute such proceedings, and the 
 proceedings provided for by this Act shall not preclude the bringing of suit 
 for the recovery of damages by any party injured, or any other action provided 
 by said Act approved February fourth, eighteen hundred and eighty-seven, 
 entitled "An Act to regulate commerce" and the Acts amendatory thereof. 
 And in proceedings under this Act and the Acts to regulate commerce the said 
 courts shall have the power to compel the attendance of witnesses, both upon 
 the part of the carrier and the shipper, who shall be required to answer on 
 all subjects relating directly or indirectly to the matter in controversy, and 
 to compel the production of all books and papers, both of the carrier and the 
 shipper, which relate directly or indirectly to such transaction; the claim that 
 such testimony or evidence may tend to criminate the person giving such 
 evidence shall not excuse such person from testifying or such corporation 
 producing its books and papers, but no person shall be prosecuted or subjected 
 to any penalty or forfeiture for or on accoimt of any transaction, matter, or 
 thing concerning which he may testify or produce evidence documentary or 
 otherwise in such proceeding: Provided, That the provisions of an Act entitled 
 "An Act to expedite the hearing and determination of suits in equity pending 
 or hereafter brought under the Act of July second, eighteen hundred and 
 ninety, entitled 'An Act to protect trade and commerce against unlawful 
 restraints and monopolies,' 'An Act to regulate commerce,' approved Febru- 
 
 [1118] 
 
Appendix D 
 
 ary fourth, eighteen hundred and eighty-seven, or any other acts having a 
 hke purpose that may be hereafter enacted, approved February eleventh, 
 nineteen hundred and three," shall apply to any case prosecuted under the 
 direction of the Attorney General in the name of the Interstate Commerce 
 Commission. 
 
 § 4. Conflicting laws thereby repealed. 
 
 Sec. 4. That all Acts and parts of Acts in conflict with the provisions of 
 this Act are hereby repealed, but such repeal shall not affect causes now- 
 pending nor rights which have already accrued, but such causes shall be pros- 
 ecuted to a conclusion and such rights enforced in a manner heretofore pro- 
 vided by law and as modified by the provisions of this Act. 
 
 PubUc, No. 103, approved February 19, 1903. 
 
 [1119 
 
APPENDIX E 
 
 EXPEDITING ACT 
 [See generally Chapters XXI and XXIV, supra] 
 
 § 1. Expedition of commerce cases. 
 
 Sec. 1. {As amended June S5, 1910.) That in any suit in equity pending 
 or hereafter brought in any circuit court of the United States under the Act 
 entitled "An Act to protect trade and commerce against unlawful restraints 
 and monopolies," approved July second, eighteen hundred and ninety, "An 
 Act to regulate commerce," approved February fourth, eighteen hundred 
 and eighty-seven, or any other Acts having a like purpose that hereafter 
 may be enacted, wherein the United States is complainant, the Attorney Gen- 
 eral may file with the clerk of such court a certificate that, in his opinion, 
 the case is of general public importance, a copy of which shall be immediately 
 furnished by such clerk to each of the circuit judges of the circuit in which the 
 case is pending. Thereupon such case shall be given precedence over others 
 and in every way expedited, and be assigned for hearing at the earliest prac- 
 ticable day, before not less than three of the circuit judges of said court, if 
 there be three or more; and if there be not more than two circuit judges, 
 then before them and such district judge as they may select; or, in case the 
 full court shall not at any time be made up by reason of the necessary absence 
 or disqualification of one or more of the said circuit judges, the justice of 
 the Supreme Court assigned to that circuit or the other circuit judge or judges 
 may designate a district judge or judges within the circuit who shall be com- 
 petent to sit in said court at the hearing of said suit. In the event the judges 
 sitting in such case shall be equally divided in opinion as to the decision or 
 disposition of said cause, or in the event that a majority of said judges shall 
 be unable to agree upon the judgment, order, or decree finally disposing of 
 said case in said court which should be entered in said cause, then they shall 
 immediately certify that fact to the Chief Justice of the United States, who 
 shall at once designate and appoint some circuit judge to sit with said judges 
 and to assist in determining said cause. Such order of the Chief Justice shall 
 be immediately transmitted to the clerk of the circuit court in which said 
 cause is pending, and shall be entered upon the minutes of said court. 
 Thereupon said cause shall at once be set down for reargument and the parties 
 thereto notified in writing by the clerk of said court of the action of the court 
 and the date fixed for the reargument thereof. The provisions of this section 
 shall apply to all causes and proceedings in all courts now pending, or which 
 may hereafter be brought. 
 
 § 2. Appeal to supreme court. 
 
 Sec. 2. That in every suit in equity pending or hereafter brought in any 
 circuit court of the United States under any of said Acts, wherein the United 
 
 [1120] 
 
Appendix E 
 
 States is complainant, including cases submitted but not yet decided, an 
 appeal from the final decree of the circuit court will lie only to the Supreme 
 Court and must be taken within sixty days from the entry thereof: Provided, 
 That in any case where an appeal may have been taken from the final decree 
 of a circuit court to the circuit court of appeals before this Act takes effect, 
 the case shall proceed to a final decree therein, and an appeal may be taken 
 from such decree to the Supreme Court in the manner now provided by law. 
 Public, No. 82, approved February 11, 1903; Public, No. 310, approved 
 June 25, 1910. 
 
 71 
 
 [1121 
 
APPENDIX F 
 
 CLAYTON ANTITRUST ACT 
 [See generally Chapters VIII and XX, supra] 
 
 § 1. Unlawful to work monopoly by discrimination. 
 
 Sec. 2. That it shall be unlawful for any person engaged in commerce, 
 in the course of such commerce, either directly or indirectly to discriminate 
 in price between different purchasers of commodities, which commodities 
 are sold for use, consumption, or resale within the United States or any Ter- 
 ritory thereof or the District of Columbia or any insular possession or other 
 place under the jurisdiction of the United States, where the effect of such dis- 
 crimination may be to substantially lessen competition or tend to create a 
 monopoly in any line of commerce: Provided, That nothing herein contained 
 shall prevent discrimination in price between purchasers of commodities on 
 account of differences in the grade, quaUty, or quantity of the commodity sold, 
 or that makes only due allowance for difference in the cost of selling or trans- 
 portation, or discrimination in price in the same or different communities 
 made in good faith to meet competition: And provided further, That nothing 
 herein contained shall prevent persons engaged in selling goods, wares, or 
 merchandise in commerce from selecting their own customers in bona fide 
 transactions and not in restraint of trade. 
 
 § 2. All preferential treatment forbidden. 
 
 Sec. 3. That it shall be unlawful for any person engaged in commerce, in 
 the course of such commerce, to lease or make a sale or contract for sale of 
 goods, wares, merchandise, machinery, supplies or other commodities, whether 
 patented or unpatented, for use, consumption or resale within the United 
 States or any Territory thereof or the District of Columbia or any insular 
 possession or other place under the jurisdiction of the United States, or fix 
 a price charged therefor, or discount from, or rebate upon, such price, on the 
 condition, agreement or understanding that the lessee or purchaser thereof 
 shall not use or deal in the goods, wares, merchandise, machinery, supplies 
 or other commodities of a competitor or competitors of the lessor or seller, 
 where the effect of such lease, sale, or contract for sale or such condition, 
 agreement or understanding may be to substantially lessen competition or 
 tend to create a monopoly in any line of commerce. 
 
 § 3. Acquisition of stock of competitor forbidden. 
 
 Sec. 7. That no corporation engaged in commerce shall acquire, directly 
 or indirectly, the whole or any part of the stock or other share capital of an- 
 other corporation engaged also in commerce, where the effect of such acquisi- 
 tion may be to substantially lessen competition between the corporation 
 [1122] 
 
Appendix F 
 
 whose stock is so acquired and the corporation making the acquisition, or to 
 restrain such commerce in any section or community, or tend to create a 
 monopoly of any line of commerce. 
 
 No corporation shall acquire, du-ectly or indirectly, the whole or any part 
 of the stock or other share capital of two or more corporations engaged in 
 commerce where the effect of such acquisition, or the use of such stock by the 
 voting or granting of proxies or otherwise, may be to substantially lessen com- 
 petition between such corporations, or any of them, whose stock or other 
 share capital is so acquired, or to restrain such commerce in any section or 
 community, or tend to create a monopoly of any line of commerce. 
 
 This section shall not apply to corporations purchasing such stock solely 
 for investment and not using the same by voting or otherwise to bring about, 
 or in attempting to bring about, the substantial lessening of competition. 
 Nor shall anything contained in this section prevent a corporation engaged 
 in commerce from cavising the formation of subsidiary corporations for the 
 actual carrying on of their immediate lawful business, or the natural and legiti- 
 mate branches or extensions thereof, or from owning and holding all or a part 
 of the stock of such subsidiary corporations, when the effect of such formation 
 is not to substantially lessen competitidn. 
 
 Nor shall anything herein contained be construed to prohibit any common 
 carrier subject to the laws to regulate commerce from aiding in the construc- 
 tion of branches or short lines so located as to become feeders to the main 
 line of the company so aiding in such construction or from acquiring or owning 
 all or any part of the stock of such branch lines, nor to prevent any such com- 
 mon carrier from acquiring and owning all or any part of the stock of a branch 
 or short line constructed by an independent company where there is no sub- 
 stantial competition between the company owning the branch line so con- 
 structed and the company owning the main line acquiring the property or an 
 interest therein, nor to prevent such common carrier from extending any of 
 its lines through the medium of the acquisition of stock or otherwise of any 
 other such common carrier where there is no substantial competition between 
 the company extending its Unes and the company whose stock, property, or 
 an interest therein is so acquired. 
 
 Nothing contained in this section shall be held to affect or impair any right 
 heretofore legally acquired: Provided, That nothing in this section shall be 
 held or construed to authorize or make lawful anything heretofore prohibited 
 or made illegal by the antitrust laws, nor to exempt any person from the 
 penal provisions thereof or the civil remedies therein provided. 
 
 § 4. All interlocking directorates forbidden. 
 
 Sec. 8. That from and after two yeai-s from the date of the approval of this 
 Act no person shall at the same time be a director or other officer or employee 
 of more than one bank, banking association or trust company, organized or 
 operating under the laws of the United States, either of which has deposits, 
 capital, surplus, and undivided profits aggregating more than $5,000,000; and 
 no private banker or person who is a director in any bank or trust company, 
 organized and operating under the laws of a State, having deposits, capital, 
 surplus, and undivided profits aggregating more than $5,000,000, shall be 
 
 [ 1123 ] 
 
Appendix F 
 
 eligible to be a director in any bank or banking association organized or operat- 
 ing under the laws of the United States. The eligibility of a director, officer, 
 or employee under the foregoing provisions shall be determined by the aver- 
 age amount of deposits, capital, surplus, and undivided profits as shown in 
 the official statements of such bank, banking association, or trust company 
 filed as provided by law during the fiscal year next preceding the date set 
 for the annual election of directors, and when a director, officer, or employee 
 has been elected or selected in accordance with the provisions of this Act it 
 shall be lawful for him to continue as such for one year thereafter under said 
 election or employment. 
 
 No bank, banking association or trust company, organized or operating 
 under the laws of the United States, in any city or incorporated town or vil- 
 lage of more than two hundred thousand inhabitants, as shown by the last 
 preceding decennial census of the United States, shall have as a director or 
 other officer or employee any private banker or any director or other officer 
 or employee of any other bank, banking association or trust company located 
 in the same place: Provided, That nothing in this section shall apply to mutual 
 savings banks not having a capital stock represented by shares: Provided 
 further, That a director or other officer or employee of such bank, banking 
 association, or trust company may be a director or other officer or employee 
 of not more than one other bank or trust company organized under the laws 
 of the United States or any State where the entire capital stock of one is 
 owned by stockholders in the other: And provided further. That nothing con- 
 tained in this section shall forbid a director of class A of a Federal reserve 
 bank, as defined in the Federal Reserve Act from being an officer or director 
 or both an officer and director in one member bank. 
 
 That from and after two years from the date of the approval of this Act 
 no person at the same time shall be a director in any two or more corpora- 
 tions, any one of which has capital, surplus, and undivided profits aggregating 
 more than $1,000,000, engaged in whole or in part in commerce, other than 
 banks, banking associations, trust companies and common carriers subject 
 to the Act to regulate commerce, approved February fourth, eighteen hun- 
 dred and eighty-seven, if such corporations are or shall have been theretofore, 
 by virtue of their business and location of operation, competitors, so that 
 the elimination of competition by agreement between them would constitute 
 a violation of any of the provisions of any of the antitrust laws. The eligibility 
 of a director under the foregoing provision shall be determined by the aggre- 
 gate amount of the capital, siu'plus, and undivided profits, exclusive of divi- 
 dends declared but not paid to stockholders, at the end of the fiscal year of 
 said corporation next preceding the election of directors, and when a director 
 has been elected in accordance with the provisions of this Act it shall be lawful 
 for him to continue as such for one year thereafter. 
 
 When any person elected or chosen as a director or officer or selected as an 
 employee of any bank or other corporation subject to the provisions of this 
 Act is eligible at the time of his election or selection to act for such bank or 
 other corporation in such capacity his eligibility to act in such capacity shall 
 not be affected and he shall not become or be deemed amenable to any of 
 the provisions hereof by reason of any change in the affairs of such bank or 
 
 [ 1124 ] 
 
ApPEJSfDIX F 
 
 other corporation from whatsoever cause, whether specifically excepted by 
 any of the provisions hereof or not, until the expiration of one year from the 
 date of his election or employment. 
 
 § 5. Mishandling of corporate funds. 
 
 Sec. 9. Every president, director, officer or manager of any firm, associa- 
 tion or corporation engaged in commerce as a common carrier, who embezzles, 
 steals, abstracts or willfully misapplies, or willfully permits to be misapplied, 
 any of the moneys, funds, credits, securities, property or assets of such firm, 
 association or corporation, arising or accruing from, or used in, such com- 
 merce, in whole or in part, or willfully or knowingly converts the same to his 
 own use or to the use of another, shall be deemed guilty of a felony and upon 
 conviction shall be fined not less than $500 or confined in the penitentiary not 
 less than one year nor more than ten years, or both, in the discretion of the 
 court. 
 
 Prosecutions hereunder may be in the district court of the United States 
 for the district wherein the offense may have been committed. 
 
 That nothing in this section shall be held to take away or impair the juris- 
 diction of the courts of the several States under the laws thereof; and a judg- 
 ment of conviction or acquittal on the merits under the laws of any State 
 shall be a bar to any prosecution hereunder for the same act or acts. 
 
 § 6. Carrier forbidden purchasing from allied corporations. 
 
 Sec. 10. That after two years from the approval of this Act no common 
 carrier engaged in commerce shall have any dealings in secm-ities, supplies 
 or other articles of commerce, or shall make or have any contracts for con- 
 struction or maintenance of any kind, to the amount of more than $50,000, 
 in the aggregate, in any one year, with another corporation, firm, partnership, 
 or association when the said common carrier shall have upon its board of 
 directors or as its president, manager or as its purchasing or selling officer, or 
 agent in the particular transaction, any person who is at the same time a 
 director, manager, or purchasing or selUng officer of, or who has any substan- 
 tial interest in, such other corporation, firm, partnership or association, unless 
 and except such purchases shall be made from, or such dealings shall be with, 
 the bidder whose bid is the most favorable to such common carrier, to be 
 ascertained by competitive bidding under regulations to be prescribed by rule 
 or otherwise by the Interstate Commerce Commission. No bid shall be re- 
 ceived unless the name and address of the bidder or the names and addresses 
 of the officers, directors and general managers thereof, if the bidder be a cor- 
 poration, or of the members, if it be a partnership or firm, be given with the 
 bid. 
 
 Any person who shall, directly or indirectly, do or attempt to do anything 
 to prevent anyone from bidding or shall do any act to prevent free and fair 
 competition among the bidders or those desiring to bid shall be punished as 
 prescribed in this section in the case of an officer or director. 
 
 Every such common carrier having any such transactions or making any 
 such purchases shall within thirty days after making the same file with the 
 Interstate Commerce Commission a full and detailed statement of the transac- 
 
 [ 1125 ] 
 
Appendix F 
 
 tion showing the manner of the competitive bidding, who were the bidders, 
 and the names and addresses of the directors and oflScers of the corporations 
 and the members of the firm or partnership bidding; and whenever the said 
 Commission shall, after investigation or hearing, have reason to believe that 
 the law has been violated in and about the said purchases or transactions 
 it shall transmit all papers and documents and its own views or findings re- 
 garding the transaction to the Attorney General. 
 
 If any common carrier shall violate this section it shall be fined not ex- 
 ceeding $25,000; and every such director, agent, manager or officer thereof 
 who shall have knowingly voted for or directed the act constituting such vio- 
 lation or who shall have aided or abetted in such violation shall be deemed 
 guilty of a misdemeanor and shall be fined not exceeding $5,000, or confined 
 in jail not exceeding one year, or both, in the discretion of the court. 
 
 § 7. Jurisdiction of the commission. 
 
 Sec. 11. That authority to enforce comphance with sections two, three, 
 seven and eight of this Act by the persons respectively subject thereto is 
 hereby vested: in the Interstate Commerce Commission where applicable 
 to common carriers, in the Federal Reserve Board where applicable to banks, 
 banking associations and trust companies, and in the Federal Trade Com- 
 mission where applicable to all other character of commerce, to be exercised 
 as follows: 
 
 Whenever the Commission or board vested with jurisdiction thereof shall 
 have reason to believe that any person is violating or has violated any of the 
 provisions of sections two, three, seven and eight of this Act, it shall issue 
 and serve upon such person a complaint stating its charges in that respect, 
 and containing a notice of a hearing upon a day and at a place therein fixed 
 at least thirty days after the service of said complaint. The first so com- 
 plained of shall have the right to appear at the place and time so fixed and 
 show cause why an order should not be entered by the Commission or board 
 requiring such person to cease and desist from the violation of the law so 
 charged in said complaint. Any person may make application, and upon 
 good cause shown may be allowed by the Commission or board, to intervene 
 and appear in said proceeding by counsel or in person. The testimony in 
 any such proceeding shall be reduced to writing and filed in the office of the 
 Commission or board. If upon such hearing the Commission or board, as the 
 case may be, shall be of the opinion that any of the provisions of said sections 
 have been or are being violated, it shall make a report in writing in which it 
 shall state its findings as to the facts, and shall issue and cause to be served on 
 such person an order requiring such person to cease and desist from such vio- 
 lations, and divest itself of the stock held or rid itself of the directors chosen 
 contrary to the provisions of sections seven and eight of this Act, if any there 
 be, in the manner and within the time fixed by said order. Until a transcript 
 of the record in such hearing shall have been filed in a circuit court of appeals 
 of the United States, as hereinafter provided, the Commission or board may 
 at any time, upon such notice and in such manner as it shall deem proper, 
 modify or set aside, in whole or in part, any report or any order made or issued 
 by it under this section. 
 
 [1126] 
 
Appendix F 
 
 If such pereon fails or neglects to obey such order of the Commission or 
 board while the same is in effect, the Commission or board may apply to the 
 circuit court of appeals of the United States, within any circuit where the 
 violation complained of was or is being committed or where such person re- 
 sides or carries on business, for the enforcement of its order, and shall certify 
 and file with its application a transcript of the entire record in the proceeding, 
 including all the testimony taken and the report and order of the Commission 
 or board. Upon such filing of the application and transcript the court shall 
 cause notice thereof to be served upon such person and thereupon shall have 
 jurisdiction of the proceeding and of the question determined therein, and 
 shall have power to make and enter upon the pleadings, testimony, and pro- 
 ceedings set forth in such transcript a decree affirming, modifying, or setting 
 aside the order of the Conunission or board. The findings of the Commission 
 or board as to the facts, if supported by testimony, shall be conclusive. If 
 either party shall apply to the court for leave to adduce additional evidence, 
 and shall show to the satisfaction of the court that such additional evidence is 
 material and that there were reasonable grounds for the failure to adduce 
 such evidence in the proceeding before the Commission or board, the court 
 may order such additional evidence to be taken before the Commission or 
 board and to be adduced upon the hearing in such manner and upon such 
 terms and conditions as to the court may seem proper. The Commission or 
 board may modify its findings as to the facts, or make new findings, by reason 
 of the additional evidence so taken, and it shall file such modified or new find- 
 ings, which, if supported by testimony, shall be conclusive, and its recom- 
 mendation, if any, for the modification or setting aside of its original order, 
 with the return of such additional evidence. The judgment and decree of the 
 court shall be final, except that the same shall be subject to review by the 
 Supreme Court upon certiorari as provided in section two hundred and forty 
 of the Judicial Code. 
 
 Any party required by such order of the Commission or board to cease and 
 desist from a violation charged may obtain a review of such order in said cir- 
 cuit court of appeals by filing in the court a written petition praying that the 
 order of the Commission or board be set aside. A copy of such petition shall 
 be forthwith served upon the Commission or board, and thereupon the Com- 
 mission or board forthwith shall certify and file in the court a transcript of 
 the record as hereinbefore provided. Upon the filing of the transcript the 
 court shall have the same jurisdiction to affirm, set aside, or modify the order 
 of the Commission or board as in the case of an appUcation by the Commis- 
 sion or board for the enforcement of its order, and the findings of the Com- 
 mission or board as to the facts, if supported by testimony, shall in Uke manner 
 be conclusive. 
 
 The jurisdiction of the circuit court of appeals of the United States to en- 
 force, set aside, or modify orders of the Commission or board shall be exclusive. 
 
 Such proceedings in the circuit court of appeals shall be given precedence 
 over other cases pending therein, and shall be in every way expedited. No 
 order of the Commission or board or the judgment of the court to enforce the 
 same shall in any wise relieve or absolve any person from any liability under 
 the antitrust Acts. 
 
 [ 1127 ] 
 
Appendix F 
 
 Complaints, orders, and other processes of the Commission or board under 
 this section may be served by anyone duly authorized by the Commission or 
 board, either (a) by delivering a copy thereof to the person to be served, or 
 to a member of the partnership to be served, or to the pifesident, secretary, or 
 other executive officer or a director of the corporation to be served; or (b) by 
 leaving a copy thereof at the principal office or place of business of such per- 
 son; or (c) by registering and mailing a copy thereof addressed to such person 
 at his principal office or place of business. The verified return by the person 
 so serving said complaint, order, or other process setting forth the manner of 
 said service shall be proof of the same, and the return post-office receipt for 
 said complaint, order, or other process registered and mailed as aforesaid 
 shall be proof of the service of the same. 
 
 § 8. Jurisdiction of the courts. 
 
 Sec. 15. That the several district courts of the United States are hereby 
 invested with jurisdiction to prevent and restrain violations of this Act, and 
 it shall be the duty of the several district attorneys of the United States, in 
 their respective districts, under the direction of the Attorney General, to 
 institute proceedings in equity to prevent and restrain such violations. Such 
 proceedings may be by way of petition setting forth the case and praying that 
 such violation shall be enjoined or otherwise prohibited. When the parties 
 complained of shall have been duly notified of such petition, the court shall 
 proceed, as soon as may be, to the hearing and determination of the case; and 
 pending such petition, and before final decree, the court may at any time 
 make such temporary restraining order or prohibition as shall be deemed 
 just in the premises. Whenever it shall appear to the court before which any 
 such proceeding may be pending that the ends of justice require that other 
 parties should be brought before the court, the court may cause them to be 
 summoned whether they reside in the district in which the court is held or not, 
 and subpoenas to that end may be served in any district by the marshal 
 thereof. 
 
 § 9. Civil suits for relief. 
 
 Sec. 16. That any person, firm, corporation, or association shall be entitled 
 to sue for and have injunctive relief, in any court of the United States having 
 jurisdiction over the parties, against threatened loss or damage by a violation 
 of the antitrust laws, including sections two, three, seven and eight of this 
 Act, when and under the same conditions and principles as injunctive relief 
 against threatened conduct that will cause loss or damage is granted by courts 
 of equity, under the rules governing such proceedings, and upon the execution 
 of proper bond against damages for an injunction improvidently granted 
 and a showing that the danger of irreparable loss or damage is immediate, a 
 preliminary injunction may issue: Provided, That nothing herein contained 
 shall be construed to entitle any person, firm, corporation, or association, ex- 
 cept the United States, to bring suit in equity for injunctive relief against any 
 common carrier subject to the provisions of the Act to regulate commerce, 
 approved February fourth, eighteen hundred and eighty-seven, in respect 
 
 [ 1128 ] 
 
Appendix F 
 
 of any matter subject to the regulation, supervision, or other jurisdiction of 
 the Interstate Commerce Commission. 
 
 § 10. Procedure in the courts. 
 
 Sec. 17. That no preliminary injunction shall be issued without notice to 
 the opposite party. 
 
 No temporary restraining order shall be granted without notice to the op- 
 posite party unless it shall clearly appear from specific facts shown by affidavit 
 or by the verified bill that immediate and irreparable injury, loss, or damage 
 wiU result to the applicant before notice can be sei'ved and a hearing had 
 thereon. Every such temporary restraining order shall be indorsed with the 
 date and hour of issuance, shall be forthwith filed in the clerk's office and 
 entered of record, shall define the injury and state why it is irreparable and 
 why the order was granted without notice, and shall by its terms expire within 
 such time after entry, not to exceed ten days, as the court or judge may fix, 
 unless within the time so fixed the order is extended for a like period for good 
 cause shown, and the reasons for such extension shall be entered of record. In 
 case a temporary restraining order shall be granted without notice in the con- 
 tingency specified, the matter of the issuance of a preliminary injunction shall 
 be set down for a hearing at the earliest possible time and shall take precedence 
 of all matters except older matters of the same character; and when the same 
 comes up for hearing the party obtaining the temporary restraining order 
 shall proceed with the application for a preliminary injunction, and if he does 
 not do so the court shall dissolve the temporary restraining order. Upon two 
 days' notice to the party obtaining such temporary restraining order the op- 
 posite party may appear and move the dissolution or modification of the order, 
 and in that event the court or judge shall proceed to hear and determine the 
 motion as expeditiously as the ends of justice may require. 
 
 § 11. Issuance of restraining orders. 
 
 Sec. 18. That, except as otherwise provided in section 16 of this Act, no 
 restraining order or interlocutory order of injunction shall issue, except upon 
 the giving of security by the applicant in such sum as the court or judge may 
 deem proper, conditioned upon the payment of such costs and damages as 
 may be incurred or suffered by any party who may be found to have been 
 wrongfully enjoined or restrained thereby. 
 
 Sec. 19. That every order of injunction or restraining order shall set forth 
 the reasons for the issuance of the same, shall be specific in terms, and shall 
 describe in reasonable detail, and not by reference to the bill of complaint or 
 other document, the act or acts sought to be restrained, and shall be binding 
 only upon the parties to the suit, their officers, agents, servants, employees, 
 and attorneys, or those in active concert or participating with them, and who 
 shall, by personal service or otherwise, have received actual notice of the same. 
 
 Public, No. 212, approved October 15, 1914. 
 
 [1129; 
 
APPENDIX G 
 
 RULES OF PRACTICE 
 [See generally Chapters XXII and XXIII, supra] 
 
 I 
 Public Sessions 
 
 Sessions of the Commission for hearing contested cases, including oral argu- 
 ments, will be held as ordered by the Commission. 
 
 The office of the Commission at Washington, D. C, is open each business 
 day from 9 a. m. to 4.30 p. m. 
 
 II 
 
 Parties to Cases 
 
 Any person, firm, company, corporation, or association, mercantile, agri- 
 cultural, or manufacturing society, body politic or municipal organization, 
 or any common carrier, or the railroad commissioner or commission of any 
 State or Territory, may complain to the Commission of anything done, or 
 omitted to be done, in violation of the provisions of the act to regulate com- 
 merce by any common carrier subject to the provisions of said act. If a com- 
 plaint relates to matters in which two or more carriers, engaged in transpor- 
 tation by continuous carriage or shipment, are interested, the several carriers 
 participating in such carriage or shipment are necessary parties defendant. 
 
 If a complaint relates to rates, regulations, or practices of carriers operating 
 different lines, and the object of the proceeding is to secure correction of such 
 rates, regulations, or practices on each of said hues, all the carriers operating 
 such lines should be made defendants. 
 
 If a complaint relates to provisions of a classification it will ordinarily be 
 sufficient to name as defendants the principal carriers named as parties to the 
 classification. 
 
 If the line of a carrier is operated by a receiver or trustee, both the carrier 
 and its receiver or trustee must be made defendants in cases involving trans- 
 portation over such line. 
 
 Any person may petition in any proceeding for leave to intervene prior to 
 or at the time of the hearing and not after. Such petition shall set forth the 
 petitioner's interest in the proceedings, but intervention will not be permitted, 
 except upon allegations that are reasonably pertinent to the issues of the 
 original complaint. Leave granted on such petition will entitle such inter- 
 veners to have notice of hearings, to produce and cross-examine witnesses, and 
 to be heard in person or by counsel upon brief and at the oral argument. 
 
 [1130] 
 
Appendix G 
 III 
 
 Complaints 
 
 Complaints must be in typewriting on one side of the paper only, on paper 
 not more than 8Ji inches wide and not more than 12 inches long, and weighing 
 not less than 16 pounds to the ream, folio base, 17 by 23 inches, with left- 
 hand margin not less than 1^ inches wide, setting forth briefly the facts 
 claimed to constitute a violation of the law. Complaints may also be 
 printed in the size designated in Rule XIV regarding briefs. The corporate 
 name of the carrier or carriers complained agamst must be stated in full with- 
 out abbreviations, and the address of the complainant, with the name and 
 address of his attorney or counsel, if any, must appear upon each copy of 
 the complaint. The complaint need not be verified, but must be signed in 
 ink by the complainant or his duly authorized attorney. The complainant 
 must furnish as many complete copies of the complaint as there may be 
 parties complained against to be served, including receiver or receivers, and 
 three additional copies for the use of the Commission. 
 
 The Commission will serve the complaint upon each defendant by leaving a 
 copy with its agent in the District of Columbia, or, if no such agent has been 
 designated, by posting a copy in the office of the Secretary of the Commis- 
 sion. 
 
 Two or more complaints involving the same principle, subject, or state of 
 facts may be included in one complaint. The several rates, regulations, dis- 
 criminations, and shipments involved should be separately set out. One or 
 more persons may join in one complaint against one or more carriers if the 
 subject-matter of the complaint involves substantially the same principle, 
 subject, or state of facts. 
 
 Except under unusual circumstances and for good cause shown, reparation 
 will not be awarded unless specifically prayed for in the complaint or in an 
 amendment thereto filed before the submission of the case. 
 
 After a final order has been entered upon a complaint in which reparation 
 is not sought or, if prayed, has been denied, the Commission will not ordinarily 
 award reparation upon a complaint subsequently filed and based upon any 
 finding upon the first complaint. 
 
 Where reparation is demanded under a general rate adjustment challenged 
 in the complaint, or upon many shipments under a particular rate, or where 
 many points of origin or destination are involved, it is the practice of the Com- 
 mission first to determine and make a formal announcement respecting the 
 reasonableness of the rate or rates in issue, and whether the facts justify an 
 award of reparation, giving to the parties thereafter an opportunity to make 
 proof respecting the shipments upon which reparation is claimed. Freight 
 bills and other exhibits must therefore be reserved until such further hearing 
 and must not be filed with the complaint. In such cases the complaint, with- 
 out unnecessary details, should disclose in general terms the basis and extent 
 of the damages demanded in such manner as reasonably to advise the defend- 
 ants thereof. 
 
 When a claim for reparation has been before the Commission informally 
 and the parties have been notified by the Commission that the claim is of such 
 
 [1131] 
 
Appendix G 
 
 a nature that it can not be determined informally, formal complaint must be 
 filed within six months after such notification, or the parties will be deemed to 
 have abandoned their claim: Provided, however, That this rule does not apply 
 to formal complaints for reparation filed within two years from the date of 
 the delivery of the shipments. 
 
 IV 
 
 Answers 
 
 One copy of each answer must, unless the Commission orders otherwise, 
 be filed with the secretary of the Commission at his office in Washington, D. C, 
 within 30 days after the day of service of the complaint by defendants whose 
 general offices are at or west of El Paso, Tex., Salt Lake City, Utah, or Spokane, 
 Wash., and within 20 days by all other defendants, and a copy of each such 
 answer must be at the same time served personally or by mail upon the com- 
 plainant or his attorney. The Commission will, when advisable, shorten or 
 extend the time for answer. If a defendant satisfies a complaint before an- 
 swering, a written acknowledgment thereof, showing the character and extent 
 of the satisfaction given, must be filed by the complainant. In such case a 
 statement of the fact and manner of satisfaction without other matter may 
 be filed as answer. If the complaint is satisfied after the fifing and service of 
 answer, a written acknowledgment thereof must be filed by the complainant 
 and a supplemental answer setting forth the fact and manner of satisfaction 
 must be filed by the defendant. Answers in typewriting must be on one side 
 of the paper only, on paper not more than SJ^ inches wide and not more than 
 12 inches long and weighing not less than 16 pounds to the ream, foUo base, 
 17 by 22 inches, with left-hand margin not less than IJ^ inches wide, or may 
 be printed in the size designated in Rule XIV regarding briefs. 
 
 V 
 
 Motion to Dismiss 
 
 A defendant who deems the complaint insufficient to show a breach of legal 
 duty may, instead of answering or formally demurring, serve on the complain- 
 ant notice of hearing on the complaint: and in such case the facts stated in the 
 complaint will be deemed admitted. A copy of the notice must at the same 
 time be filed with the secretary of the Commission. The filing of an answer, 
 however, will not be deemed an admission of the sufficiency of the complaint, 
 but a motion to dismiss for insufficiency may be made at the hearing. 
 
 VI 
 
 Service op Papers 
 
 Copies of notices or papers, other than complaints, presented by a party 
 must be served upon the adverse party or parties personally or by mail. When 
 any party has appeared by attorney, service upon such attorney will be deemed 
 proper service upon the party. 
 
 [1132] 
 
Appendix G 
 
 VII 
 
 Amendments 
 
 Amendments to any complaint or answer in any proceeding or investigation 
 will be allowed by the Commission at its discretion. 
 
 VIII 
 
 Continuances and Extensions of Time 
 
 Continuances and extensions of time will be granted at the discretion of the 
 Commission. 
 
 IX 
 
 Stipulations 
 
 Parties to any proceeding may, by stipulation in writing filed with the 
 secretary, agree upon the facts, or any portion thereof, involved therein. 
 It is desired that the facts be thus agreed upon whenever practicable. 
 
 X 
 
 Hearings 
 
 Upon issue being joined by service of answer or by notice of hearing on the 
 complaint, or by failure of defendant to answer, the Commission will assign 
 a time and place for hearing. Witnesses will be examined orally before the 
 Commission or one of its examiners, unless their testimony be taken by de- 
 position or the facts be agreed upon as provided for in these rules. 
 
 XI 
 
 Depositions 
 
 The deposition of a witness for use in a case pending before the Commis- 
 sion may, after such case is at issue, be taken upon compliance with the fol- 
 lowing rules of procedure, which are prescribed by the Commission under 
 authority conferred upon it by section 17 of the act, but not otherwise. 
 
 Such depositions may be taken before a special agent or examiner of the 
 Commission, or any judge or commissioner of any court of the United States, 
 or any clerk of a district court, or any chancellor, justice, or judge of a supreme 
 or superior court, mayor or chief magistrate of a city, judge of a county court 
 or court of common pleas of any of the United States, or any notary public, 
 not being of counsel or attorney to either of the parties, nor interested in the 
 event of the proceeding or investigation, according to such designation as 
 the Commission may make in any order made by it in the premises, except 
 that where such deposition is taken in a foreign country it may be taken before 
 an officer or person designated by the Commission or agreed upon by the par- 
 ties by stipulation in writing to be filed with the Commission. 
 
 Any party desiring to take the deposition of a witness in such a case shall 
 notify the Commission to that effect, and in such notice shall state the time 
 when, the place where, and the name and post-office address of the party be- 
 
 [ 1133 ] 
 
Appendix G 
 
 fore whom it is desired the deposition be taken, the name and post-office ad- 
 dress of the witness, and the subject-matter or matters concerning which the 
 witness is expected to testify, whereupon the Commission will make and serve 
 upon the parties or their attorneys an order wherein the Commission shall 
 name the witness whose deposition is to be taken and specify the time when, 
 the place where, and the party before whom the witness is to testify, but such 
 time and place, and the party before whom the deposition is to be taken, so 
 specified in the Commission's order, may or may not be the same as those 
 named in said notice to the Commission. 
 
 Every person whose deposition is so taken shall be cautioned and take oath 
 (or affirm) to testify the whole truth and nothing but the truth concerning the 
 matter about which he shall testify, and shall be carefully examined. His 
 testimony shall be reduced to typewriting by the officer before whom the 
 deposition is taken, or under his direction, after which the deposition shall be 
 subscribed by the witness and certified in usual form by the officer. After 
 the deposition has been so subscribed and certified it shall, together with two 
 copies thereof made by such officer or under his direction, be forwarded by 
 such officer under seal in an envelope addressed to the Commission at its office 
 in Washington, D. C. Upon receipt of the deposition and copies the Com- 
 mission will file in the record in said case such deposition and forward one 
 copy to the complainant or his attorney, and the other copy to the defendant 
 or its attorney, except that where there is more than one complainant or 
 defendant the copies will be forwarded by the Commission to the parties 
 designated by such complainants or defendants as the case may be. 
 
 Such depositions shall be typewritten on one side only of the paper, which 
 shall be not more than SJi inches wide and not more than 12 inches long 
 and weighing not less than 16 pounds to the ream, folio base 17 by 22 inches, 
 with left-hand margin not less than IJ^ inches wide. 
 
 No deposition shall be taken except after 6 days' notice to the parties, and 
 where the deposition is taken in a foreign country such notice shall be at least 
 15 days. t 
 
 No such deposition shall be taken either before the case is at issue, or unless 
 under special circumstance and for good cause shown, within 10 days prior 
 to the date of the hearing thereof assigned by the Commission, and where the 
 deposition is taken in a foreign country it shall not be taken after 30 days 
 prior to such date of hearing. 
 
 Witnesses whose depositions are taken pursuant to these rules and the 
 magistrate or the officer taking the same, unless he be an examiner of the 
 Commission, shall severally be entitled to the same fees as are paid for like 
 service in the courts of the United States, which fees shall be paid by the party 
 or parties at whose instance the depositions are taken. 
 
 XII 
 
 Witnesses and Subpoenas 
 
 Subpoenas requiring the attendance of witnesses from any place in the 
 United States to any designated place of hearing may be issued by any mem- 
 ber of the Commission. 
 
 [1134] 
 
Appendix G 
 
 Subpoenas for the production of books, papers, or documents (unless di- 
 rected to issue by the Commission upon its own motion) will issue only upon 
 application in writing. Applications to compel witnesses not parties to the 
 proceeding to produce documentary evidence must be verified and must 
 specify, as near as may be, the books, papers, or documents desired and the 
 facts to be proven by them. Applications to compel a party to the proceed- 
 ing to produce books, papers, or documents need only set forth in a general 
 way the books, papers, or documents sought, with a, statement that the ap- 
 plicant believes they will be of service in the determination of the case. 
 
 Witnesses whose testimony is taken orally are severally entitled to the same 
 fees as are paid for like services in the courts of the United States, such fees 
 to be paid by the party at whose instance the testimony is taken. 
 
 XIII 
 
 DOCUMBNTABT EVIDENCE 
 
 Where relevant and material matter offered in evidence is embraced in a 
 document containing other matter not material or relevant and not intended 
 to be put in evidence, such document will not be filed, but the party offering 
 the same shall also present to opposing counsel and to the Commission in 
 proper form for filing copies of such material and relevant matter, and that 
 only shall be filed. 
 
 In case any portion of a tariff, report, circular, or other document on file 
 with the Commission is offered in evidence, the party offering the same must 
 give specific reference to the items or pages and lines thereof to be considered. 
 In case any testimony in other proceedings than the one on hearing is intro- 
 duced in evidence, a copy of such testimony must be presented as an exhibit. 
 When exhibits of a documentary character are offered in evidence, two copies 
 should be furnished at the hearing for the use of the Commission and a copy 
 for each of the principal parties represented. 
 
 XIV 
 
 Briefs 
 
 Unless otherwise specifically ordered, briefs may be filed upon application 
 made at hearings or upon order of the Commission. Briefs shall be printed 
 and contain an abstract of the evidence relied upon by the parties filing the 
 same; and in such abstract reference shall be made to the pages of the record 
 wherein the evidence appears. The abstract of evidence should follow the 
 statement of the case and precede the argument. Briefs must be printed m 
 10 or 12 point type, on good unglazed paper, 5 7-8 inches wide by 9 mches long, 
 with inside margins not less than 1 inch wide, and with double-leaded text 
 and single-leaded citations. 
 
 At the close of the testimony in each case the presiding commissioner or 
 examiner wUl fix the time for filing and service of the respective briefs, as fol- 
 lows, unless good cause for variation therefrom is shown: To the complainant, 
 30 days from date of conclusion of the testimony; to the defendants and in- 
 terveners, 15 days after the date fixed for the complainant; and to complainant 
 
 [ 1135 ] 
 
Appendix G 
 
 for reply brief, 10 days after the date fixed for defendants or interveners. 
 Briefs not filed and served on or before the dates fixed therefor will not be 
 received unless a special order therefor is made by the Commission. All briefs 
 must be filed with the secretary and be accompanied by notice, showing service 
 upon the adverse parties, and 15 copies of each brief shall be furnished for the 
 use of the Commission, unless otherwise ordered. Applications for extension 
 of time in which to file briefs shall be by petition, in writing, stating the facts 
 on which the application rests, which must be filed with the Commission at 
 least five days before the time for filing such brief. 
 
 Oral argument will be had only as ordered by the Commission. Applica- 
 tions therefor must be made at the hearing or in writing within 10 days after 
 the completion of proof. 
 
 XV 
 
 Reheakings 
 
 Applications for reopening a case after final submission, or for rehearing 
 after decision, must be by petition stating specifically the grounds relied upon; 
 such petition must be served by the party filing same upon the opposing coun- 
 sel who appeared at the hearing or on brief. 
 
 If such application be to reopen the case for further evidence, the nature 
 and purpose of such evidence must be briefly stated, and the same must not 
 be merely cumulative. If the application be for a rehearing, the petition must 
 specify the matters claimed to be erroneously decided, with a brief statement 
 of the alleged errors. If any order of the Commission is sought to be reversed, 
 changed, or modified on account of facts and circumstances arising subsequent 
 to the hearing, or of consequences resulting from compliance therewith, the 
 matters relied upon by the applicant must be fully set forth. At least 10 copies 
 of all such applications must be filed. 
 
 XVI 
 
 Tbansceipts op Testimont 
 
 One copy of the testimony wiU be furnished by the Commission for the use 
 of the complainant and one copy for the use of the defendant, without charge. 
 If two or more complainants or defendants have appeared at the hearing, such 
 complainants or defendants must designate to whom the copy for their use 
 shall be delivered. 
 
 In proceedings instituted by the Commission on its own motion, including 
 proceedings involving the suspension of tariffs, no free copies of testimony 
 will be furnished. 
 
 XVII 
 Compliance with Orders 
 
 An order having been issued, the defendant or defendants named therein 
 must promptly notify the secretary of the Commission on or before the date 
 upon which such order becomes effective, whether or not compliance has been 
 made therewith. If a change in rates is required, the notification to the secre- 
 tary must be given in addition to the filing of proper tariffs. 
 
 [1136] 
 
Appendix G 
 
 XVIII 
 
 Application by Carribes Under Proviso Clause of Fourth Section 
 
 Any common carrier may apply to the Commission, under the proviso clause 
 of the fourth section, for authority to charge for the transportation of like 
 kind of property less for a longer than for a shorter distance over the same 
 line, in the same direction, the shorter being included within the longer dis- 
 tance or for authority to charge more as a through rate than the aggregate 
 of the intermediate rates subject to the act. Such application shall be by 
 verified petition, which shall specify the places and traffic involved, the rates 
 charged on such traffic for the shorter and longer distances, the carriers other 
 than the petitioner which may be interested in the traffic, the character of the 
 hardship claimed to exist, and the extent of the relief sought by the petitioner. 
 Upon the filing of such a petition, the Commission will take such action as the 
 circumstances of the case seem to require. 
 
 XIX 
 
 Suspensions 
 
 Suspensions of rates under section 15 of the act to regulate commerce will 
 not ordinarily be made unless request in writing therefor is made at least 10 
 days before the time fixed in the tariif for such rates to take effect. Requests 
 for suspension must indicate the schedule affected by its I. C. C. number and 
 give specific reference to the parts thereof complained against, together with a 
 statement of the grounds thereof. 
 
 XX 
 
 Information to Parties 
 
 The Secretary of the Commission will, upon request, advise any party as 
 to the form of complaint, answer, or other paper necessary to be filed in the 
 
 case. 
 
 XXI 
 
 Address of the Commission 
 All communications to the Commission must be addressed to Washington, 
 D. C, unless otherwise specifically directed. 
 
 fZ 
 
 [1137] 
 
APPENDIX H 
 
 FORMS OF PROCEDURE 
 
 [See generally Chapters XXIII and XXIV, supra] 
 
 These forms may be used in cases to which they are applicable, with such altera- 
 tions as the circumstances may render necessary 
 
 No. 1. Complaint [Official Form] 
 
 BEFORE THE INTERSTATE COMMERCE COMMISSION 
 
 The- 
 
 • Railroad Company, 
 — Railway Company. 
 
 (Insert corporate title, without abhreoior 
 tion, of carrier or carriers) necessary 
 defendants. 
 
 The complaint of the above-named complainant respectfully shows: 
 
 I. That (complainant should here state occupation and place of business, also 
 whether it is a corporation, firm, or partnership, and if a firm or partnership, the 
 individual names of the parties composing the same should be given). 
 
 II. That the defendant (defendants) above named is a common carrier (are 
 common carriers) engaged in the transportation of passengers and property, 
 wholly by railroad (partly by railroad and partly by water), between points 
 
 in the State of — — ■ — and points in the State of , and as such common 
 
 carrier (carriers) is (are) subject to the provisions of the act to regulate com- 
 merce approved February 4, 1887, and acts amendatory thereof or supple- 
 mentary thereto. 
 
 III. That (state in this and subsequent paragraphs, to be numbered numerically, 
 the matter or matters intended to be complained of, naming every rate, rule, regula- 
 tion, or practice whose lawfulness is challenged, and also each point of origin and 
 point of destination between which the rates complained of are applied). 
 
 [Follounng this a paragraph or paragraphs should be inserted alleging that by 
 reason of the facts stated in the foregoing paragraphs complainant (complainants) 
 has (have) been subjected to the payment of rates of transportation which were 
 when exacted, and still are, unjust and unreasonable in violation of section 1 of 
 the act to regulate commerce, or unduly discriminatory in violation of sections 2, 
 3, or 4 thereof.] 
 
 Wherefore complainant prays that defendants may be severally required to 
 answer the charges herein; that after due hearing and investigation an order 
 be made commanding said defendants and each of them to cease and desist 
 from the aforesaid violation of said act to regulate commerce, and establish 
 
 and put in force and apply as maxima in future to the transportation of 
 
 between the shipping and destination points named in paragraph hereof, 
 
 in lieu of the rates named in said paragraph, such other rates as the Commis- 
 
 [1138] 
 
Appendix H 
 
 sion may deem reasonable and just (and also pay to complainants by way of 
 
 reparation for the unlawful charges hereinbefore described the sum of , 
 
 or such other sum as, in view of the evidence to be adduced herem, the Com- 
 mission may consider complainant entitled to), and that such other and further 
 order or orders be made as the Commission may consider proper in the premises 
 and complainant's cause may appear to require. 
 
 Dated at , 19 — .. 
 
 [Complainant's signature.] 
 No. 2, Answeu [Official Form] 
 
 BEFORE THE INTERSTATE COMMERCE COMMISSION 
 
 VS. 
 
 The Railroad Company 
 
 The above-named defendant, for answer to the complaint in this proceed- 
 ing, respectfully states: 
 
 1. (Here follow the usual admissions, denials, and averments, answering the 
 complaint paragraph by paragraph.) 
 
 Wherefore the defendant prays that the complaint in this proceeding be 
 dismissed. 
 
 The Railroad Company, 
 
 By , 
 
 [Title of officer.] 
 
 No. 3. Complaint of Unreasonable Charges 
 interstate commerce commission 
 
 To the Honorable Interstate Commerce Commissioners: 
 
 (I.) Your petitioners complain of the Oregon Railway & Navigation Com- 
 pany and respectfully represent: That on the 13th day of June, A. D. 1887, 
 your petitioners shipped from the City of Colfax, in the Territory of Washing- 
 ton, to the City of Portland, in the State of Oregon, two car loads of wheat, 
 to wit: 122 sacks of wheat of the weight of 20,000 pounds on one car, and 230 
 sacks of wheat of the weight of 30,000 pounds on the other car. That the 
 said two car loads of wheat were loaded on said cars at your petitioners' sole 
 expense, and were delivered to said Oregon Railway & Navigation Company 
 for transportation to Portland, Oregon, as aforesaid, on said 30th day of June, 
 A. D. 1887. That the distance from the said City of Colfax, in Washington 
 Territory, to Portland, Oregon, does not exceed 320 miles. That the said 
 Oregon Railway & Navigation Company, against the protests of your peti- 
 tioners, have charged your petitioners for transporting the said two car loads 
 of wheat the said 320 miles, the full sum of $175, or at the rate of $7 for each 
 ton of 2000 poimds. 
 
 (11.) Your petitioners further aver that it is stated in the annual report of 
 the said Oregon Railway & Navigation Company for 1886, that the total cost 
 of all property of every description owned by said Company, including ocean 
 
 [ 1139 ] 
 
Appendix H 
 
 steamers, river and sound boats, barges and wharves, is $32,924,433.72; while 
 its net income from raikoad earnings alone was, as appears by the same re- 
 port, $2,256,589.78, or 6 8-10 per cent, on the whole nominal investment of that 
 Company, without counting its earnings from other sources. That during the 
 same year that Company transported over its railroad lines 123,413,669 tons 
 of freight and merchandise, and that the average price it received for trans- 
 porting merchandise from Portland, Oregon, to Colfax, Washington Ter- 
 ritory, was in excess of $30 per ton. 
 
 (III.) Your petitioners further allege that the rates recommended by the 
 railroad commissioners of the State of Oregon, for the transportation of wheat 
 from points in the State of Oregon, equi-distant from said Portland, Oregon, 
 with the City of Colfax, in Washington Territory, and reached by the line 
 of the Oregon Railway & Navigation Company, is $4 per ton, or $3 per ton 
 less than the said Company has charged your petitioners. 
 
 (IV.) Your petitioners further allege that the said Oregon Railway & Navi- 
 gation Company has agreed to make a rate from points in Columbia county, 
 Washington Territory, as far from Portland, Oregon, as is the City of Colfax, 
 for the transportation of wheat and other grains over the line of said railroad 
 to said Portland, Oregon, of $5 per ton, while stiU continuing the rate from 
 said Colfax at $7 per ton, thus charging your petitioners, and all other handlers 
 of grain in Colfax, $2 per ton more for transporting their wheat the same 
 distance than is charged the wheat raisers and buyers shipping from said 
 points in Columbia county. 
 
 (V.) And your petitioners further allege that the sum of $7 per ton for 
 the transportation of wheat as aforesaid from Colfax, Washington Territory, 
 to Portland, Oregon, is unjust and unreasonable; and that a just and reason- 
 able charge for such transportation is $3.50 per ton, which is approximately 
 the rate fixed for a haul of the same distance by the Illinois State law. 
 
 (VI.) Wherefore, your petitioners pray that you may direct the said Oregon 
 Railway & Navigation Company to reimburse to your petitioners the sum of 
 $87.50, the sum paid by your petitioners to the said Oregon Railway & Navi- 
 gation Company for the transportation of said two car loads of wheat to Port- 
 land, Oregon, in excess of a just and reasonable freight charge. And your 
 petitioners further pray that the said Oregon Railway & Navigation Com- 
 pany may be required to establish a rate for the transportation of grain from 
 Colfax, Washington Territory, to Portland, Oregon, not in excess of $3.60 
 per ton. 
 
 McClainb, Wade & Co. 
 
 No. 4. Complaint op Wrong Classification 
 
 INTERSTATE COMMERCE COMMISSION 
 
 National Machinery and Wrecking Co. 
 
 V. 
 
 Pittsburg, Cincinnati, Chicago & St. Louis Ry. et al. 
 
 The petition of the above-named complainant respectfully shows: 
 (I.) That complainant is a partnership composed of Jacob W. and Milton 
 S. Kohn, in the State of Ohio, having its principal office and place of business 
 
 [1140] 
 
Appendix H 
 
 in the city of Cleveland, in said State, and is a dealer in boilers, generators, 
 motors and other machines, shipping the same, new and second-hand, between 
 points lying in different States of the United States, particularly in those States 
 lying in Official Classification territory, which is generally described as that 
 territory lying north of the Potomac and Ohio and east of the Mississippi 
 rivers. 
 
 (II.) That the above-named defendants are common carriers engaged in 
 the transportation of property by railroad between points in different States 
 of the United States, and largely in said Official Classification territory, and 
 as sLich common carriers are subject to the provisions of the Act to Regulate 
 Commerce, approved February 4, 1SS7, and acts amendatory thereof or sup- 
 plementary thereto. 
 
 (III.) That complainant, in the course of its business, ships over defend- 
 ants' fines of railroad old and second-hand dynamos from points in other 
 States to Cleveland, where they are converted into junk. That in Official 
 Classification No. 26, dated January 2, 1905, adopted by defendants and now 
 enforced upon their lines, dynamos, new or second-hand, boxed or on skids, 
 crated, are classified at first class and take first-class rates over defendants' 
 lines. That by such classification and rating defendants compel complainant 
 to pay on its shipments of old and second-hand dynamos, which are practically 
 worthless, the first-class rate, which is the same as is charged on new and valu- 
 able dynamos. That said rating of second-hand dynamos in the same class 
 as new dynamos is unreasonable, unduly discriminatory, and should be 
 changed. That the classification of second-hand or defective dynamos should 
 be the same as that appUed to junk in Official Classification, to wit, sixth 
 class, which affords sufficient compensation for the transportation service 
 performed, because such second-hand dynamos have no more value than the 
 metal contained in them. 
 
 (IV.) That the wrongful classification and rating above set forth results 
 in unreasonable and unjust transportation charges on complainant's ship- 
 ments of second-hand dynamos in Official Classification territory, in violation 
 of section one of said Act to Regulate Commerce, and subjects complainant 
 and other shippers of second-hand dynamos, and their traffic, within the Official 
 Classification territory, to unjust discrimination and undue and unreasonable 
 prejudice and disadvantage, in violation of sections two and three of said Act 
 to Regulate Commerce. 
 
 (V.) That on or about the 5th day of October, 1905, complainant had 
 shipped to it from Marietta, Georgia, one second-hand dynamo, weighing 
 6,300 pounds, and costing complainant $85.00, which was delivered by con- 
 nections to the defendant, the Pittsburg, Cincinnati, Chicago & St. Louis 
 Railway Company, at Cincinnati, Ohio, and transported thence by said de- 
 fendant to Columbus, Ohio, thence via the Cleveland, Akron & Columbus 
 Railway Company to Hudson, Ohio, and thence via the Pennsylvania Com- 
 pany to complainant at Cleveland, Ohio. That said shipment was billed out 
 as "one box of scrap iron" and complainant expected it to take the scrap-iron 
 rate of 65 cents per 100 pounds; but before delivery the rate was advanced 
 to the rate on new dynamos of $1.33 per 100 pounds. That complainant was 
 compelled to pay the unjust and unreasonable rate of $1.33 per 100 pounds for 
 
 [1141] 
 
Appendix H 
 
 the transportation of such shipment, aggregating the sura of $83.79, instead 
 of the just and reasonable rate of 65 cents per 100 pounds, aggregating the 
 sum of $40.95. That by reason of said unjust classification complainant was 
 compelled to pay an excess charge of $42.84, for which reparation is claimed. 
 
 Wherefore, complainant prays that defendants may be required to answer 
 the charges herein; that after due hearing and investigation an order be made 
 requiring the defendants, the Pittsburg, Cincinnati, Chicago & St. Louis 
 Railway Company, the Cleveland, Akron & Columbus Railway Company, 
 and the Pennsylvania Company, to pay to complainant the sum of $42.84, 
 or such other sum as, upon the proof to be adduced, the Commission may find 
 complainant entitled to; and requiring all the defendants herein mentioned 
 to wholly cease and desist from the aforesaid violation of said Act to Regulate 
 Commerce; and that such other and further order or orders may be entered as 
 the Commission may deem necessary in the premises and complainant's cause 
 may appear to require. 
 
 Dated at Cleveland, Ohio, , 1905. 
 
 National Machinery and Wrecking Company. 
 
 No. 5. Notice by Cakrier under Rule V 
 
 INTERSTATE COMMERCE COMMISSION 
 
 VS. 
 
 The Railroad Company. 
 
 Notice is hereby given under Rule V of the Rules of Practice in proceedings 
 before the Commission that a hearing is desired in this proceeding upon the 
 facts as stated in the complaint. 
 
 The — ■ — ■ — ■ Railroad Company, 
 By , 
 
 [Title of officer] 
 
 No. 6. Suspension of Rate Advance 
 
 At a General Session of the Interstate Commerce Commission, held at its 
 office in Washington, D. C, on the 25th day of March, A. D., 1913 
 
 Investigation and Suspension Docket No. 229 
 
 Bangor & Aroostock Railroad Joint Rate Cancellation 
 
 It Appearing, That there has been filed with the Interstate Commerce 
 Commission by C. J. Pierce, as agent for the carriers named in his tariff I. C. C. 
 No. 15, as amended, tariffs containing schedules stating new individual and 
 joint rates and charges, and new individual and joint regulations and prac- 
 tices affecting such rates and charges, to become effective the 1st day of 
 April, 1913, designated as follows: 
 
 [1142] 
 
Appendix H 
 
 C. J. Pierce, Agent, 
 
 Supplement No. 11 to I. C. C. No. 15. 
 Supplement No. 12 to 1. C. C. No. 15. 
 
 It is Ordered, That the Commission upon complaint without formal 
 pleading, enter upon a hearing concerning the propriety of the advances and 
 the lawfulness of the rates, charges, regulations and practices stated in the 
 schedules contained in said tariffs. 
 
 It Further Appearing, That said schedules make certain advances in 
 rates for the interstate transportation of news printing paper, and the rights 
 and interests of the public appearing to be injuriously affected thereby, and it 
 being the opinion of the Commission that the effective date of the schedules 
 contained in said tariffs, should be postponed pending said hearing and deci- 
 sion thereon: 
 
 It is Further Ordered, That the operation of the schedules contained in 
 said tariffs, be suspended, and that the use of the rates, charges, regulations 
 and practices therein stated be deferred upon interstate traffic untU the 17th 
 day of July, 1913. 
 
 And it is Further Ordered, That a copy of this order be filed with said 
 schedules in the office of the Interstate Commerce Commission, and that 
 copies thereof be forthwith served upon the carriers parties to said schedules, 
 and upon C. J. Pierce, Agent, and that said carriers parties to said schedules 
 be and they are thereby made respondents to this proceeding, and that they 
 be duly notified of the time and place of the hearing above ordered. 
 
 By the Commission: 
 
 George B. McGinty, 
 
 Secretary. 
 
 No. 7. Complaint of Refusing Through Service 
 
 BEFORE the INTERSTATE COMMERCE COMMISSION 
 
 Docket No. 5733 
 
 Colonial Navigation Company, 
 Petitioner, 
 against 
 The New York, New Haven and 
 Hartford Railroad Company, 
 Respondent. 
 
 The petition of the Colonial Navigation Company, the petitioner, respect- 
 fully shows and alleges as follows: 
 
 (I.) That the petitioner above named is a corporation duly organized and 
 existing under the Laws of the State of New York, and is a common carrier 
 engaged in the transportation of passengers and property by continuous car- 
 riage or shipment, wholly by water, between the City of Providence in the 
 State of Rhode Island and the City of New York in the State of New York, 
 and having its principal office at Pier 39 North River, New York City, in the 
 State of New York. 
 
 (II ) That the respondent, The New York, New Haven & Hartford Rail- 
 
 [ 1143 ] 
 
Appendix H 
 
 road Company, is a common carrier engaged in the transportation of passengers 
 and property by continuous carriage or shipment between the City of Provi- 
 dence in the State of Rhode Island and various cities and towns in the New 
 England States, including the City of Boston, Massachusetts, wholly by rail- 
 road, and as such common carrier is subject to the provisions of the Act to 
 Regulate Commerce, approved February 4th, 1887, and Acts amendatory 
 thereof and supplemental thereto, and that the said respondent has its prin- 
 cipal office at New Haven, State of Connecticut. 
 
 (III.) That The New England Steamship Company is a common carrier 
 engaged in transportation of passengers and property by continuous carriage 
 or shipment whoUy by water, between the City of New York in the State of 
 New York, and the City of Providence, Rhode Island, and other New England 
 ports. 
 
 IV. That the City of Providence is situated on Narragansett Bay in the 
 State of Rhode Island, and that the said City of Providence is a transfer point 
 at which The NeW York, New Haven & Hartford Railroad Company transfers 
 passengers and property carried or shipped from the City of Boston, Massa- 
 chusetts, and other New England cities, to The New England Steamship 
 Company, for carriage or shipment to New York City and other points be- 
 yond, and where the said The New York, New Haven & Hartford Railroad 
 Company receives passengers" and property from the boats of The New Eng- 
 land Steamship Company travelling and proceeding from New York City 
 and other points for carriage and shipment to the City of Boston, Massachu- 
 setts, and other New England cities, upon its railroad, and that such transfer 
 is made under through routing agreements or arrangements between the said 
 Railroad Company and the said Steamship Company under through rates 
 and divisions in force between said Railroad Company and Steamship Com- 
 pany. 
 
 (V.) That the said Colonial Navigation Company has requested The New 
 York, New Haven & Hartford Railroad Company, in writing, to give to it 
 the same facilities as to through ticketing and routing as granted to The New 
 England Steamship Company, and to join with it in an arrangement for 
 through ticketing of passengers and checking of baggage between the City of 
 New York and the City of Boston and other New England cities located on 
 the hne of said Railroad Company via the City of Providence and for the 
 through ticketing of passengers and through checking of baggage between 
 the City of Boston, Massachusetts, and other cities and towns located on the 
 lines of the said Raihoad Company in various New England States and via 
 the City of Providence to New York City, and that The New York, New 
 Haven & Hartford Raihoad Company has declined and refused to enter into 
 such an agreement with the Colonial Navigation Company and to permit the 
 through routing of passengers and baggage as aforesaid, although the said 
 Colonial Navigation Company is willing to allow to the said New York, New 
 Haven & Hartford Railroad Company as its share of the receipts for such 
 transportation, the full rate published by the said New York, New Haven & 
 Hartford Railroad Company and in force between the City of Providence, 
 R. I., and the City of Boston, Massachusetts, and other New England cities, 
 and although the said Colonial Navigation Company is willing in addition to 
 
 [1144] 
 
Appendix H 
 
 assume all expenses for the transportation of passengers and baggage between 
 its boats and the station of the said New York, New Haven & Hartford Rail- 
 road Company, and despite the fact that the said New York, New Haven & 
 Hartford Railroad Company is offering such facihties to through routing and 
 ticketing to the New England Steamship Company as aforesaid, by way of the 
 ports of the City of Providence, R. I., Fall River, Massachusetts, and New 
 London, Connecticut. 
 
 (VI.) By reason of the failure and refusal of the New York, New Haven & 
 Hartford Railroad Company to grant such equal facilities and to enter into 
 such agreement for through routing and ticketing, it is and has been subject- 
 ing your petitioner to unjust discrimination in violation of sections 1, 2 and 3 
 of the Act to Regulate Commerce, approved February 4th, 1887, and the 
 acts amendatory thereof and supplemental thereto. 
 
 (VII.) That this petitioner has made no previous application to this Com- 
 mission for relief in the matter, nor is there any action in law or in equity by 
 the petitioner against the respondent now pending, in reference to the same. 
 
 Wherefore, the petitioner prays that the respondent be required to answer 
 the charge herein, and that after due hearing and investigation, an order be 
 made commanding and directing the said New York, New Haven & Hart- 
 ford Railroad Company to cease and desist from said violations of the Act to 
 Regulate Commerce as aforesaid, and directing the said respondent to estab- 
 lish a through routing and ticketing in connection with your petitioner's line 
 between the City of New York and the City of Boston and other cities in the 
 New England States, upon the respondent's line or lines of railroad by way of 
 Providence, R. I., for the through ticketing of passengers, through checking 
 of baggage, and providing the terms and conditions upon which such through 
 route shall be operated, and for such other and further order as the Commis- 
 sion may deem just and proper in the premises and petitioner's cause may 
 appear to require. 
 
 Dated, New York, April 15th, 1913. 
 
 Colonial Navigation Company. 
 
 State op New York, | 
 County of New York. J 
 
 James A. Joy, being duly sworn deposes and says that he is Vice-President 
 of Colonial Navigation Company, the petitioner herein ; that he has read the 
 foregoing petition subscribed by him and knows the contents thereof; that the 
 same is true of his own knowledge except as to those matters which are herein 
 stated to be alleged on information and belief, and that as to those matters he 
 beUeves it to be true. That the reason this verification is made by deponent 
 and not by the complainant is that the petitioner is a corporation, and de- 
 ponent has personal knowledge of the facts stated in said petition. 
 
 James A. Joy. 
 
 Sworn before me this 
 16th day of April, 1913. 
 
 C. S. BOSTWICK, 
 
 Notary Public No. 410. 
 New York Co. 
 
 [1145] 
 
Appendix H 
 No. 8. Answer of Respondents in that Proceeding 
 
 THE interstate COMMERCE COMMISSION 
 
 Docket No. 5733 
 
 Colonial Navigation Company 
 
 m. 
 
 The New York, New Haven & 
 
 Habtpord Railroad Company. 
 
 Answer of the Respondent 
 
 The New York, New Haven & Hartford Railroad Company 
 
 The New York, New Haven & Hartford Railroad Company, the respondent 
 in the above entitled cause, without admitting any of the allegations contained 
 in the said complaint while reserving to itself the right hereafter to deny both 
 generally and specifically any and all of said allegations, respectfully alleges 
 that this Honorable Commission has no jurisdiction to take any action in 
 this case in respect to the estabUshment, through routing and ticketing as 
 prayed by the complainant herein. 
 
 In proof of lack of jurisdiction of this Honorable Commission to make any 
 order upon this complaint under the circumstances of this case, The New York, 
 New Haven & Hartford Railroad Company would refer to various schedules 
 filed with this Honorable Commission showing that it is now and for a long 
 time has been furnishing through transportation for passengers and their bag- 
 gage by the system of transportation controlled by it between all the termini 
 between which this complainant asks for the establishment of through arrange- 
 ments. Some of these routes are shorter than the routes sought to be estab- 
 lished by this complainant, and none of them are unreasonably long as com- 
 pared with that for which the petitioner prays. In the case of certain of these 
 routes between the termini in question respondent itseK performs all of the 
 transportation over its own railroad lines, and in the case of others part of 
 the transportation is performed by water lines operated by corporations which 
 it controls. 
 
 Therefore to order the establishment of through routes embracing the lines 
 of the complainant between the points prayed would be to require in the face 
 of the explicit limitation upon the jurisdiction of this Honorable Commission 
 the respondent without its consent to take less than the entire transportation 
 which it is now performing between the termini named by the aforesaid routes. 
 Whatever hardship if any, the complainant may feel it is sufi^ering by not being 
 able to take away from the respondent the business which it is doing by divert- 
 ing that business tc the lines of the complainant constitutes no inquiry cog- 
 nizable by the law. 
 
 Wherefore The New York, New Haven & Hartford Railroad Company re- 
 spectfully asks that the above entitled complaint be dismissed for want of 
 jurisdiction in this Honorable Commission to compel this respondent under 
 the circumstances set forth to do any of the things for which this complainant 
 prays. 
 
 [11461 
 
Appendix H 
 
 Without waiving any of its rights under the above answer or without prej- 
 udice to its rights to urge other grounds of lack of jurisdiction at other times, 
 The New York, New Haven & Hartford Railroad Company, the respondent 
 herein, for answer in this proceeding respectfully states: 
 
 1. That as to Paragraph I said respondent has no information, and there- 
 fore leaves proof of the same to the complainant. 
 
 2. That Paragraph II is admitted, but for further answer the respondent 
 says that not only is it a common carrier engaged in the transportation of 
 passengers and property between the city of Providence therein mentioned and 
 the various cities and towns in the New England states by the railroads owned 
 and operated by it but that between all the said cities and towns in the New 
 England states and the city of New York it is engaged in the transportation 
 of passengers and property by continuous carriage wholly by the railroad lines 
 owned and operated by it. 
 
 3. That Paragraph III is admitted, but for further answer the respondent 
 says that the New England Steamship Company is controlled by The New 
 York, New Haven & Hartford Railroad Company and that the said New 
 England Steamship Company is operated in conjunction with The New York, 
 New Haven & Hartford Railroad Company. 
 
 4. That Paragraph IV is admitted subject to the further answer that dur- 
 ing all times when the New England Steamship Company maintains service 
 between the said city of Providence and the said city of New York The New 
 York, New Haven & Hartford Railroad Company discharges for and receives 
 from the New England Steamship Company at a wharf used by the said com- 
 panies where the rail lines of the railroad company and the water lines of the 
 steamship company connect passengers and property pursuant to routes es- 
 tablished between the railroad company and the steamship company between 
 all points as to which the petitioner asks for the making of additional through 
 routes. 
 
 5. That Paragraph V is admitted subject to the further answer that the 
 respondent by various routes by its own railroad lines exclusively as well as 
 by various routes estabUshed by agreement between the respondent company 
 and the steamship companies controlled by it is furnishing through service or 
 participating in through routes between the termini in question which when 
 not actually shorter are reasonably short as compared with the through route 
 which the complainant asks to have established. 
 
 6. That Paragraph VI is denied, the respondent maintaining that neither 
 by any matters alleged in this complaint nor by any act of this respondent 
 otherwise has this complainant been subjected to unjust discrimination of any 
 sort in violation of sections 1, 2, or 3 of the Act to regulate commerce approved 
 February 4th, 1887 and the Acts amendatory thereof and supplemental 
 thereto, and in particular this respondent denies that this complainant can 
 claim whatever rights if any, a connecting carrier may have to complain of 
 discriminatory treatment since this complainant cannot be regarded fairly 
 as a connecting carrier as it does not by its water lines approach within a 
 mile of that point where this respondent forwards and receives passengers 
 and goods not by virtue of the ordinary obligations existing between connect- 
 ing carriers but in conjunction with a water line controlled by it. 
 
 [1147] 
 
Appendjx H 
 
 7. That as to Paragraph VII the respondent has no information, and there- 
 fore leaves proof of the same to the complainant. 
 
 8. And the respondent further in answering says that by section 15 of the 
 Act to regulate commerce, approved Feb. 4th, 1887 and the acts amendatory 
 thereof and supplemental thereto no company should be required without its 
 consent to enter into any through route which would compel it to embrace 
 in such route substantially less than the entire length of its transportation lines 
 lying between the termini of such proposed through route, and that if required, 
 to enter into the through route asked by the complainant this respondent or 
 companies controlled by it, would be compelled to give up to this complainant 
 the transportation for 180 miles or thereabouts which is now being rendered 
 in the case of certain single line routes exclusively by the railroads operated 
 by it and in other cases by long established through routes by the water lines 
 of steamboat companies controlled by this respondent and operated in con- 
 nection therewith. 
 
 9. And the respondent further submits to the Commission that as the re- 
 spondent is furnishing between all the termini in question by its railroad lines 
 and by the water lines controlled by it an excellent and diversified service by 
 all practicable routes and at all convenient times at reasonable and appropriate 
 rates, the Commission should not order the establishment of the route as 
 asked for by the complaint, the addition to the existing services of the service 
 which the complainant desires to furnish not being in the public interest. The 
 respondent would further raise the question before the Commission whether 
 it should be compelled to allow the complainant to collect large sums of money 
 by the sale of tickets calling for transportation over its route without the 
 financial responsibility of the complainant being established to the satisfaction 
 of the Commission. 
 
 10. And the respondent further says that this system of services which it 
 has established between the termini in question is in all respects adequate to 
 handle all of the business moving between these points and that the rates 
 therefore are reasonable for the service rendered in every instance. By reason 
 of the fact that all of the capital stock of the steamship companies with which 
 the through arrangements are made is so held as to be virtually owned by the 
 respondent it is immaterial to the revenues of the system of the respondent 
 whether the business moves by its own railroad Unes or by the water lines 
 thus controlled by it. Whereas if compelled to divide its revenues with the 
 complainant the loss of revenue of the system of the respondent might prevent 
 it from giving the present high grade of service it now renders between those 
 termini at the present low standard of rates. 
 
 Whebeof said respondent prays that the complaint in this proceeding 
 may be dismissed: 
 
 The New York, New Haven & Hartford Railroad Company. 
 
 [ 1148 ] 
 
Appendix H 
 
 No. 9. Bill to Enforce Order of the Commission 
 
 BILL OF complaint 
 
 Interstate Commerce Commission 
 against 
 Illinois Central Railroad Company, 
 et al. 
 
 Ill the Circuit Court of the United 
 
 Stales. 
 In Equity. 
 
 To the Circuit Court of the United States sitting in equity, etc. (hereafter 
 these bills wiU be brought in the Commerce Court sitting). 
 
 Your petitioner the Interstate Commerce Commission, which was created 
 and established and now exists under and by virtue of an act of the Congress 
 of the United States, entitled an Act to Regulate Commerce, approved Feb- 
 ruary 4, 1887, as amended, etc. (here follows dates of amendatory acts), 
 humbly complaining showeth: 
 
 (I.) That the Illinois Central Railroad Company is, etc. (here follow the 
 names of the various railroad corporations made defendants with the usual 
 descriptions). 
 
 (II.) That the defendants above named were on the 24th day of July, 1903, 
 and ever since have been and still are common carriers engaged in the trans- 
 portation of persons and property by railroad under joint through rates and 
 as members of continuous through lines between points in different states of 
 the United States, and particularly in the transportation of lumber from 
 lumber-shipping points on their respective lines (etc.), to "Ohio River points" 
 (etc.), and to points north of the Ohio River and on and east of the Mississippi 
 River, and as such common carriers and in respect to such transportation 
 were and are subject to the provisions of the said act to regulate commerce 
 and the amendments thereto. 
 
 (III.) That on the said 24th day of July, 1903, the Central Yellow Pine 
 Association, composed of persons, firms and corporations engaged in the 
 business of handling yellow pine lumber in the States of (etc.), filed, under 
 section 13 of said Act to Regulate Commerce, a petition or complaint alleging 
 violations on the part of the defendants of certain provisions of said act, as at 
 large and more fully appears in and by the said complaint or petition on file 
 in the office of the complainant herein, a copy whereof is hereunto annexed 
 and made a part of this bill of complaint as Exhibit A; and that a copy of 
 said Exhibit A, attested by the secretary of the complainant under the seal of 
 the complainant was duly forwarded by the complainant to each of said de- 
 fendants, as required by section 13 of said act. 
 
 (IV.) That on August 15, 1903, the defendants filed answers to said com- 
 plaint. Exhibit A hereto, as at large and more fully appears in and by said 
 answers on file in the office of the complainant herein, copies of which are 
 hereto annexed and made parts of this petition as Exhibits from B to F, both 
 inclusive. 
 
 (V.) That thereafterwards the said cause being at issue upon the pleadings 
 aforesaid, duly came on for investigation and hearing before the complainant 
 herein, the said Interstate Commerce Commission at (etc.) on (etc.) at which 
 times and places the parties complainant and defendant appeared by their 
 
 [11491 
 
Appendix H 
 
 attorneys, or had due notice to appear, and testimony was taken on behalf 
 of said parties. 
 
 (VI.) That on February 7, 1905, the complainant herein duly determined 
 the matter in controversy between the said parties before it and made a re- 
 port in writing in respect thereof setting forth its findings of fact and its con- 
 clusions based on said findings, namely, that an advance made April 15, 1903, 
 by all the defendants from, etc. (the shipping points named), to, etc. (the 
 Ohio River points named) of 2 cents in the rate on lumber in car loads was 
 not warranted and that the resultant increased rates were unreasonable and 
 unjust, in violation of the Act to Regulate Commerce, as at large and more 
 fully appears in and by the said report of the complainant, a copy whereof 
 is hereunto annexed and made part of this petition or bill of complaint as 
 Exhibit G. 
 
 (VII.) That forthwith upon the determination of said cause as aforesaid on, 
 to wit: said 7th day of February, 1905, the complainant duly formulated an 
 order and notice in the premises based upon its findings and conclusions, re- 
 quiring the defendants to cease and desist on or before April 1, 1905, from 
 further maintaining or enforcing the said unlawful advance of 2 cents per 100 
 pounds, or the said unlawful rates resulting therefrom as aforesaid, which 
 said order now remains in full force and effect, and a copy whereof is hereunto 
 annexed and made part of this bill of complaint as Exhibit H, etc. 
 
 (VIII.) That the complainant agreeably to the provisions of the law in 
 this regard duly caused a properly authenticated copy of its said report. 
 Exhibit G hereunto, together with its said order Exhibit H hereunto, to be 
 delivered to said defendants herein, and complainant shows that the said de- 
 fendants, unmindful of their duty in that regard, have, through their officers, 
 servants and attorneys, wholly disregarded and set at naught said order of 
 the complainant. Exhibit H hereto, and have willfully and knowingly violated 
 and disobeyed the same, and still do neglect and refuse to comply with the 
 same or any part thereof. 
 
 (IX.) And the complainant charges that the said advance of 2 cents in the 
 said lumber rates was and is unwarranted and has resulted in rates excessive, 
 unreasonable and unjust in violation of the act to regulate commerce. 
 
 (X.) Wherefore the complainant prays: 
 
 1. That a subpoena or other suitable process may issue according to the 
 course of equity (etc.). 
 
 2. That an order be made by this honorable court directing the method of 
 service of notice (etc.). 
 
 3. That proper orders may be passed pending the cause as will secure a 
 speedy hearing (etc.). 
 
 4. That proper orders to facilitate inquiries be made (etc.). 
 
 5. That upon the final hearing hereof a decree may be entered granting to 
 complainant a writ of injunction or other proper process, mandatory or other- 
 wise, to restrain the said defendants, and each of them, and their respective 
 officers, servants and agents, from further continuing in their violation of and 
 disobedience to the said order of the Commission. 
 
 6. That a decree may be entered fixing a sum not exceeding 1500 per day, 
 for every day of disobedience to the injunction (etc.). 
 
 [1150] 
 
Appendix H 
 
 7. That a decree may be entered requiring the said defendants to pay the 
 costs of this proceeding and reasonable counsel fees. 
 
 8. For such other and further relief in the premises as to the court may 
 seem meet and just and the equities of the case may require. 
 
 The Interstate Commerce Commission 
 by Edw. A. Moseley, 
 
 The Secretary thereof, thereto duly authorized. 
 
 No. 10. Bill to Enjoin Order op the Commission 
 
 bill op complaint 
 
 The Chicago & Alton Railroad 
 Company, Complainant, 
 
 against ). In Equity. 
 
 The Interstate Commerce Commis- 
 sion, Defendant. 
 
 To the Honorable the Judges of the Circuit Court of the United Stales within and 
 
 for the Northern District of Illinois: 
 
 The Chicago & Alton Railroad Company, a corporation organized and ex- 
 isting under and by virtue of the laws of the State of lUinois, brings this its 
 bill against the Interstate Commerce Commission, established and existing 
 under and by virtue of an act of the Congress of the United States, and there- 
 upon your orator complains and says: 
 
 That the Chicago & Alton Railroad Company is a corporation duly organ- 
 ized under the laws of the State of Illinois; that the defendant, the Interstate 
 Commerce Commission, had been created and exists, and during all the time 
 herein mentioned, has existed, under and by virtue of an act of the Congress 
 of the United States, entitled, "An Act to Regulate Commerce," approved 
 February 4, 1887, and the acts amendatory thereof. 
 
 Your orator further avers that it has its principal operating office in the 
 city of Chicago, Northern District of Illinois, Eastern Division. 
 
 Your orator further avers that the Chicago & Alton Railroad Company, is 
 a common carrier, engaged in the transportation of property by railroad from 
 and to points in various States and Territories of these United States to and 
 from points within the States of Illinois and Missouri; that your orator is 
 engaged and has been so engaged since the 29th day of April, 1908, in the 
 transportation of commercial coal from the points within the States of Illinois 
 and Missouri to points to the same States and beyond; that numerous coal 
 mines are located on and along your orator's line, within the States of Illinois 
 and Missouri, and principally within the State of Illinois; that these mines 
 ship large quantities of commercial coal by your orator's line to consignees at 
 different points upon the lines of other common carriers; that your orator for 
 the accommodation of this commercial coal traffic, owns and operates 3,037 
 gondola coal cars; that when requested by the consignor or consignee, it fur- 
 nishes in addition box cars for the transportation of coal; that its said 3,037 
 gondola cars and such box car equipment as may be desired by the shippers 
 are sufficient at all ordinary times to transport all commercial coal tendered 
 
 [11511 
 
Appendix H 
 
 to your orator for shipment from the mines to consignees at various points 
 upon your orator's line and beyond. 
 
 Your orator further avers (here it is stated that the railroad has 360 special 
 fuel cars of its own which it utihzes exclusively to get its necessary fuel from 
 the mines on its line). 
 
 Your orator further avers (here it is stated that the coal thus taken in fuel 
 cars is not put into the course of commerce at all). 
 
 Your orator further avers (that at certain periods of the year, to wit, in the 
 early winter months, there is a shortage of equipment for hauling commercial 
 shipments of coal from mines along your orator's railroad; that at times of such 
 car shortage your orator furnishes various mines along its line with commer- 
 cial equipment pro rata in accordance with a certain circular bearing date 
 October 17, 1906, effective November 1, 1906, and now in full force upon 
 your orator's line, said circular being in words and figures as follows — here 
 the rules governing the distribution of cars to coal mines contained in said 
 circular are set forth in full, providing among other things that fuel cars will 
 not be computed in assigning the quota of system cars). 
 
 Your orator further avers (that on, to wit, the 27th day of April, 1908, the 
 Interstate Commerce Commission entered an order requiring your orator to 
 cease and exist on or before the first day of July, 1908, and during a period of 
 at least two years thereafter from maintaining and enforcing the present prac- 
 tice of coal car distribution along its line of railroad, said order being in words 
 and figures as follows: — to wit, — here follows the order of the Interstate Com- 
 merce Commission directing that fuel cars shall be taken into consideration in 
 making the allotment). 
 
 Your orator further avers (that a copy of said order was duly served upon 
 *a principal officer of your orator at his usual place of business). 
 
 Your orator further avers (that the said order of the said defendant the 
 Interstate Commerce Commission was made upon a complaint filed with 
 said body by the Illinois Collieries Company; that subsequent to the filing of 
 said complaint, an answer was filed by your orator and testimony adduced 
 by the said parties) . 
 
 Your orator further avers (that, in requiring your orator to take into con- 
 sideration its own fuel cars in determining the distribution of coal cars among 
 the various mines along its line and to count as a part of the proportion of 
 the mine, such cars as are consigned for your orator's own fuel, is unreasonable, 
 unjust, oppressive and unlawful in that, etc.). 
 
 Your orator further avers (here it is claimed that the practice of car dis- 
 tribution is not subject to regulation by the Interstate Commerce Com- 
 mission). 
 
 Your orator further avers (here it is claimed that the practice sought to be 
 established by the Interstate Commerce Commission is not within its juris- 
 diction). 
 
 Your orator further avers (here it is claimed that there is no unreasonable 
 discrimination by the non-counting of the orator's fuel cars). 
 
 Your orator further avers (here it is claimed that the fuel cars are not part 
 of its commercial equipment). 
 
 Your orator further avers (here it is claimed that the order of the Interstate 
 
 [ 1152 ] 
 
Appendix H 
 
 Commerce Commission is an unreasonable discrimination against mine sup- 
 plying it with coal). 
 
 Your orator further avers (that the order limits the amount of coal to be 
 mined, a matter outside the jurisdiction of the Commission). 
 
 Your orator further avers (here it is pointed out that the orator's own fuel 
 supply does not enter into commerce). 
 
 Your orator further avers (that if the said order of the said defendant, the 
 Interstate Commerce Commission, is allowed to become effective a multi- 
 plicity of suits against it will be caused). 
 
 Your orator further avers (that the acts of the Interstate Commerce Com- 
 mission in which it intends to persist are contrary to equity and tend to the 
 manifest injury of the orator). 
 
 Your orator therefore prays that upon the filing of this biU a temporary or 
 interlocutory order may be entered herein suspending the said order of the 
 said Interstate Commerce Commission, and restraining the said Commission 
 from taking any steps or instituting any proceedings to enforce said order, 
 and that upon a final hearing of this cause a, decree may be entered herein 
 enjoining, setting aside, annulling or suspending, the said order of the said 
 Interstate Commerce Commission, and perpetually enjoining the enforcement 
 of said order, and perpetually enjoining to the said defendants and its mem- 
 bers or their agents, servants, and representatives from the enforcing of the 
 said order, and from taking any steps or taking any proceedings towards the 
 enforcement of the said order. Your orator further prays that such other 
 and further relief may be granted in the premises as justice and equity may 
 require. 
 
 Your orator prays that your honors may grant under your orator the writ 
 of subpoena of the United States of America directed to the said Interstate 
 Commerce Commission, commanding it on a certain day and under a certain 
 penalty herein to be specified, personally to be and appear before your honors 
 in this honorable court, and then and there full, true and complete answer to 
 make to all and singular the premises, but not under oath, the answer under 
 oath, hereby being expressly waived, and to stand to and abide by such order 
 or decree herein as to your honors shall seem meet, and agreeable to equity and 
 good conscience. 
 
 And your orator will ever pray, etc. 
 
 The Chicago & Alton Railroad Company, 
 
 By , its Solicitors. 
 
 73 [1153] 
 
INDEX 
 
 [References are to sections] 
 
 A 
 ABSORPTION, 
 
 of lighterage, 740. 
 of terminal charges, 743. 
 of switching charges, 575n. 
 of demurrage, 575n. 
 
 See Allowances. 
 ACCOUNTS, 
 
 provisions of the Act, 950. 
 
 1. Supervision of current accounting. 
 
 who must keep accounts, 952. 
 extent of powers over accounts, 953. 
 methods of amortization accounting, 954. 
 depreciation cannot be capitalized, 955. 
 writing off superseded property, 956. 
 supervision of fixed charges, 957. 
 permanent improvements out of capital, 958. 
 absorbing earnings in improvements, 959. 
 
 2. Separation of interstate accounts. 
 
 apportionment of interstate business, 960. 
 methods of the division, 961. 
 bases of the proportion, 962. 
 apportionment of total expense, 963. 
 inherent diflBculties of the problem, 964. 
 comparisons with interstate rates, 965. 
 supremacy of the federal system, 966. 
 discrimination produced by State action, 967. 
 See Reports. 
 
 ACT TO REGULATE COMMERCE, 
 
 See Interstate Commerce Act. 
 
 ADMINISTRATIVE POWER, 
 
 See Interstate Commerce Commission. 
 
 ADMISSIONS, 
 
 See Evidence. 
 ADVANCES IN RATES, 
 
 See Suspension of Rate Advances. 
 
 ALLOCATION OF COSTS, 
 
 See Costs. 
 
 [1155 ] 
 
Index 
 
 ISeferences are to sectionsl 
 
 ALLOWANCES, 
 
 provisions of the Act, 160, 710. 
 
 1. Allowances must he reasonable. 
 
 undue prejudice in granting allowances, 731. 
 payment of transportation allowances, 731. 
 extent of statutory restrictions, 738. 
 commission jurisdiction over allowances, 731. 
 unjustifiable differences in rates, 732. 
 differences between tank rates, 732. 
 rental paid on shipper's cars, 736. 
 allowance for facilities furnished, 737. 
 allowance under color of compensation, 737. 
 allowance to an elevator company, 737. 
 allowance of mileage for tank cars, 737. 
 not above the reasonable cost, 738. 
 covering of rebates by allowances, 811. 
 
 2. Allowances must be scheduled. 
 
 both rates must be open to all, 739. 
 such allowances as are published, 739. 
 lighterage allowance to one shipper, 740. 
 allowance to one elevator, 741. 
 transportation costing less net, 742. 
 if a switching service is included, 743. 
 allowances for facilities closely scrutinized, 744. 
 allowances to competing industries, 743. 
 whether too advantageous terms, 744. 
 allowances for facilities still permissible, 745. 
 reasonable allowance may be made, 737. 
 all privileges must be scheduled, 812. 
 carriers must abide thereby, 814. 
 no allowances of anything not in tariff, 814. 
 giving unpublished allowance forbidden, 624. 
 See Discriminations. 
 AMENDMENT, 
 
 AMORTIZATION, 
 
 See Complaint. 
 See Depreciation. 
 
 ANNUAL CHARGES, 
 
 See Operating Expenses, Accounts. 
 ASSOCIATIONS, 
 
 See Parties. 
 AWARD, 
 
 See Reparation. 
 
 B 
 BAGGING IN TRANSIT, 
 
 See Transit Privileges. 
 
 [1156] 
 
Index 
 
 (References are to sections] 
 BASING POINTS, 
 
 how basing points are established, 598. 
 
 how basing points are justified, 599. 
 
 determination of base rate, 600. 
 
 adding locals to the basing rate, 598. 
 
 how rate is constructed, 600. 
 
 near-by basing points, 600. 
 
 the local rate back, 599. 
 
 natural point for breaking rates, 600. 
 
 all crossings basing points, 585. 
 
 no discrimination between the gateways, 585. 
 
 Creation of a market by preferential rates, 602. 
 
 equalizing manufactures in different localities, 603. 
 
 if basing point is established, 603. 
 
 the basing point system, 808. 
 
 sanction to rate systems, 808. 
 
 See Discriminations; Local Rate Structure. 
 
 BELT LINES, 
 
 See Switching. 
 BETTERMENTS, 
 
 expense of equipment and maintenance, 352. 
 
 cost of rolling stock, 353. 
 
 improvement of existing plant, 356. 
 
 betterments considered as maintenance, 355. 
 
 replacement considered as repair, 357. 
 
 permanent improvements should not be annual charge, 358. 
 
 new construction should be charged to capital, 359. 
 
 new construction not an operating expense, 360. 
 
 betterment out of income, 361. 
 
 permanent improvements out of capital, 958. 
 
 absorbing earnings in improvements, 959. 
 
 allowance for unremunerative betterments, 260. 
 See Accounts, Depreciation. 
 
 BILL OF LADING, 
 
 stipulations in bills of lading, 834. 
 limitation of liability thereon, 835. 
 See Connecting Carriage, Joint Rates, Schedules op Rates, Interstate 
 
 Commerce. 
 
 BONDS, 
 
 bonded indebtedness beyond present values, 265. 
 market value of securities, 266. 
 existing capitalization hardly excessive, 272. 
 how property is bonded, 262. 
 
 See Capitalization, Percentage of Return. 
 
 BRANCHES, 
 
 See Rate Structure. 
 
 [1157] 
 
Index 
 
 [References are to sections] 
 
 BRIDGES, 
 
 what companies obliged to report, 952. 
 when bridges under the Act, 160. 
 bridge company not common carrier, 174. 
 absorbing a bridge charge, 174. 
 viaduct approaches, 174. 
 
 BULK, 
 
 See Classification. 
 BURDEN OF PROOF, 
 
 burden of establishing case, 1122. 
 complainant has the burden, 1122. 
 burden of justifying advances, 1123. 
 suspended advance upon carriers, 1123. 
 
 See Evidence, Procedure. 
 
 CAPITALIZATION, 
 
 1. Original cost. 
 
 various theories as to proper capitalization, 251. 
 actual investment entitled to return, 252. 
 cost of proper facilities, 253. 
 what is the actual cost, 254. 
 cost enhanced by fraudulent contract, 255. 
 construction now thought unwise, 256. 
 equipment long since superseded, 257. 
 portion of plant not now utilized, 558. 
 treatment of outside investments, 259. 
 allowance for unremunerative betterments, 260. 
 contributions made by the State, 261. 
 
 2. Outstanding capitalization. 
 
 capitalization outstanding, 262. 
 
 nominal capitalization, 263. 
 
 stock issues often deceptive, 264. 
 
 bonded indebtedness beyond present values, 265. 
 
 market value of securities, 266. 
 
 securities issued upon reorganization, 267. 
 
 capitalization authorized by public authorities, 268. 
 
 the problem of watered stock, 269. 
 
 property acquired from surplus earnings, 270. 
 
 inquiry into foregone profits, 271. 
 
 existing capitalization hardly excessive, 272. 
 
 3. Present value. 
 
 power to set aside a statutory rate, 273. 
 constitutional requirements, 274. 
 original cost as affecting present value, 276. 
 going value, 276. 
 
 [ 1158 ] 
 
Index 
 
 [References are to sections] 
 
 CAPITALIZATION— Corafinwed 
 franchise values, 277. 
 purchase value, 278. 
 tax appraisals, 279. 
 development cost, 280. 
 capitalized rights, 281. 
 4. Cost of reproduction. 
 
 rule of some State courts, 285. 
 methods of certain commissions, 286. 
 the Federal courts opposed, 287. 
 explanation of these decisions, 288. 
 condition of the plant itself, 289. 
 what physical reproduction means, 290. 
 identical reproduction, 291. 
 intervening conditions, 292. 
 piece-meal construction, 293. 
 cost of building up the business, 296. 
 See Constitutional Law, Bonds, Stocks, Valuation. 
 
 CAR RENTALS, 
 
 See Discriminations. 
 
 CARLOADS AND L. C. L., 
 
 1. Different classification of C. L. and L. C. L. 
 
 different classification and rating, 530. 
 
 when difference in classification is required, 531. 
 
 minimum carloads, 532. 
 
 minimum carload regulations, 533. 
 
 mixed carloads, 534. 
 
 shipment permitting greater carload, 535. 
 
 trainloads problematical, 536. 
 
 traffic handled in special trains, 537. 
 
 car loaded by several shippers, 538. 
 
 commission rulings upon special ratings, 539. 
 
 car sizes, 540. 
 
 special cars not necessary, 541. 
 
 2. Whether difference between C. L. and L. C. L. discriminatory. 
 
 powers of the Commission, 721n. 
 shipment in carloads, 721. 
 advantages of carload traffic, 722. 
 permission to mix carloads, 723. 
 lower rates for shipments in bulk, 724. 
 barrel oil compared with tank, 724. 
 shipments in trainloads problematical, 725. 
 differential between C. L. and L. C. L., 728. 
 economical use of the tank car, 729. 
 concessions to shippers in bulk considered, 733. 
 railroad without tank cars, 734. 
 
 See Classification, Discrimination. 
 
 [1159; 
 
Index 
 
 [References are to sections] 
 CARRIERS OF GOODS, 
 
 See Common Carriage. 
 
 CARRIERS OF PASSENGERS, 
 
 See Passenger Carriage. 
 
 CARS, 
 
 See Facilities. 
 CARTAGE, 
 
 See Transfer. 
 CIASSIFICATION, 
 
 1. Methods of classification. 
 
 provisions of the Act, 480. 
 prevalence of classification, 481. 
 the meaning of classification, 482. 
 classification establishing the rate, 483. 
 the necessity of a proper classification, 484. 
 classification a convenience in rate fixing, 485. 
 history of classification in the United States, 486. 
 uniformity of classification attempted, 487. 
 classification necessarily imperfect, 488. 
 classification not unduly minute, 489. 
 extra class divisions, 490. 
 commodity rates, 491. 
 
 2. General principles of classifying. 
 
 method of classification, 492. 
 
 interpretation of the classification sheet, 493. , 
 
 influences determining classification, 494. 
 
 adjustment of business to classification, 495. 
 
 classification according to representations, 496. 
 
 bases of classifying goods, 497. 
 
 justification for malcing classification, 498. 
 
 reasonableness of classification requisite, 499. 
 
 classification not determined by particular commodity, 501. 
 
 jurisdiction of the Commission, 502. 
 
 relief from improper classifications, 503. 
 
 low-grade commodities, 504. 
 
 high-grade manufactures, 505. 
 
 3. Comparison of commodities. 
 
 elements in comparison of commodities, 506. 
 
 like classification for similar goods, 507. 
 
 a proper rate involves classification, 500. 
 
 different classification for dissimilar goods, 508. 
 
 certain commodities compared, 509. 
 
 difference between commodities, 516. 
 
 raw material and manufactured products, 517. 
 
 4. Difference between commodities carried. 
 
 classification based on the package, 518. 
 business expensive to handle, 519. 
 
 [11601 
 
Index 
 
 [References are to sections] 
 CLASSIFICATION— CoreiiriMed 
 
 shipment in more convenient form, 520. 
 perishable freight, 521. 
 less than usual care required, 522. 
 unusual care in handling required, 523. 
 classification based on volume, 524. 
 large volume of traffic, 525. 
 value of the goods, 526. 
 bases of comparing values of goods, 528. 
 differing value of same kind of freight, 529. 
 See Rates, Discriminations. 
 CLAYTON ACT, 
 
 See HiSTOBT of Statutory Regui^tions. 
 
 CLEANING IN TRANSIT, 
 
 See Transit Privileges. 
 
 COMBINATIONS OF CARRIERS, 
 provisions of the Act, 950. 
 compUoations in case of systems, 370. 
 
 (1) long term lease, 370. 
 
 (2) consolidating company, 370. 
 
 (3) traffic agreement, 370. 
 
 (4) complete consolidation, 370. 
 
 divisions as integral parts of the whole system, 371. 
 
 unprofitable portions of the line not considered, 372. 
 
 systems considered as wholes, 373. 
 
 treatment of branch lines, 374. 
 
 constituent roads operated under separate charters, 376. 
 
 rent of leased portions, 376. 
 
 if rental becomes unjustifiable, 377. 
 
 See Pooling. 
 
 COMBINATION OF RATES, 
 
 See Joint Rates. 
 COMMISSION, 
 
 See Interstate Commerce Commission. 
 
 COMMODITIES CLAUSE, 
 
 sale and delivery of commodities, 644. 
 where a raihoad buys supplies, 644. 
 policy of the commodities clause, 645. 
 validity of the commodities clause, 645. 
 looking behind the entity, 645. 
 controlling interest in the stock, 645. 
 
 COMMODITY RATES, 
 
 See Classification. 
 
 COMMON CARRIERS, 
 
 provisions of the Act, 160. 
 
 [1161] 
 
Index 
 
 [References are to sectionEl 
 
 COMMON CARRIERS— ConiinMed 
 
 1. Common carriage. 
 
 the history of the carrier, 5. 
 
 common carrier of goods, 5. 
 
 raikoad companies are common carriers, 162. 
 
 common carriers as such, 85. 
 
 carriers subject to the Act, 184. 
 
 term "common carrier" defined, 160. 
 
 definitions of common carriers, 186. 
 
 who is a common carrier, 188. 
 
 public profession of common carrier, 187. 
 
 how private carrier distinguished, 188. 
 
 commitment to public service, 187. 
 
 what lines are common carriers, 190. 
 
 duty to provide transportation, 931. 
 
 2. Public profession. 
 
 public railroads, 191. 
 
 private railroads, 191. 
 
 industrial railways, 192. 
 
 joint rates, 193. 
 
 tap lines, 194. 
 
 plant facilities, 195. 
 
 line haul, 196. 
 
 intermingled service, 197. 
 
 See Interstate Caeriees, Public Dutt. 
 
 COMMUTATION FARES, 
 
 „„,-„„™,™^ ^ See Passenger Carriage. 
 
 COMPETITION, 
 
 1. Competition no excuse for personal discrimination. 
 
 whether concessions may be made in competition, 672. 
 competitive conditions do not justify discriminations, 673. 
 reductions to get competitive business illegal, 674. 
 concessions to get shipments, 675. 
 additional services performed for certain shippers, 678. 
 whether concessioris may be made to large shippers, 680. 
 unreasonable differences forbidden by all courts, 682. 
 reasonable differences permitted by some courts, 683. 
 prevalent doctrine against reduction, 684. 
 
 2. Competition justifies relative discrimination. 
 
 rates may be made to meet competition, 452. 
 competition as a factor in rate making, 453. 
 policy for permitting competitive rates, 454. 
 rates low enough to hold business, 455. 
 reduction below a remunerative basis, 466. 
 standard rate among competing lines, 457. 
 competition not a ground for raising rates, 458. 
 absence of competition does not justify increase, 459. 
 no obligation to meet competition, 460. 
 
 [ U62 ] 
 
Index 
 
 [References are to sectionsl 
 COMPETITION— Conttreued 
 
 3. Competition affecting rate structure. 
 
 incidents of competition, 794. 
 actual or potential competition, 793. 
 competition at a given point, 793. 
 competitive forces focused at points, 588. 
 competition may change relations, 588. 
 competitive conditions when shown, 588. 
 preserving competition in commodities, 596. 
 rate to the competitive point, 598. 
 competitive points sometimes grouped, 599. 
 rates affected by water competition, 600. 
 competition may be by rail, 793. 
 
 4. Competition as a justification. 
 
 competition as a factor in rate making, 793. 
 
 allow to competition due weight, 793. 
 
 competition sufficient to justify, 793. 
 
 competition at a favored point, 793. 
 
 acute competitive conditions, 793. 
 
 between a railroad and a waterway, 796. 
 
 rate forced by water competition, 796. 
 
 non-competitive rates must be reasonable, 798. 
 
 potential competition, 799. 
 
 suppression of competition by agreement, 800. 
 
 suppression of competition by consolidation, 801. 
 
 carriers may refuse to make competitive rates, 802. 
 See Rates, Discriminations. 
 COMPLAINTS, 
 
 provisions of the Act, 1070. 
 
 must investigate any complaint forwarded, 1070. 
 
 informal complaint, 1083. 
 
 commission should exhaust its activities, 1074. 
 
 individual rate during general inquiry, 1076. 
 
 statement of the wrong, 1077. 
 
 different complaints should not be combined, 1077. 
 
 damages with sufficient definiteness, 1077. 
 
 sufficiency of the complaint, 1078. 
 
 there are no technicalities, 1078. 
 
 sufficient if the complaint states issue, 1078. 
 
 amendment to complaint, 1080. 
 
 improper complaints cannot be cured, 1080. 
 
 amendment in effect making a new case, 1080. 
 
 complainant not coming with clean hands, 1084. 
 
 scope of the doctrine, 1085. 
 
 See Proceduhe, Interstate Commerce Commission. 
 
 COMPRESSING IN TRANSIT, 
 
 See Transit Privileges. 
 
 [1163] 
 
CONCESSIONS, 
 CONCUERENCES, 
 
 Index 
 
 [References are to sections] 
 
 See Discriminations. 
 See Joint Rates. 
 
 CONNECTING CARRIAGE, 
 provisions of the Act, 910. 
 
 1. Basis of through service. 
 
 through service may be undertaken, 862. 
 
 presumptions as to through carriage, 863. 
 
 effect of the Carmack Amendment, 864. 
 
 what constitutes connecting service, 865. 
 
 obligation of initial carrier, 866. 
 
 obligation of the second carrier, 867. 
 
 duties as to routing, 868. 
 
 fixing the blame for misrouting, 869. 
 
 carriers not compelled to bill through, 870. 
 
 discrimination forbidden where public duty involved, 871. 
 
 2. Facilities far interchanging business. 
 
 physical connections at common law, 882. 
 discrimination between connecting lines, 883. 
 extent of these requirements, 884. 
 demand for connecting service, 885. 
 compulsory interchange of business, 886. 
 contracts with grain elevators, 922. 
 arrangements with stockyards, 923. 
 present scope of the Act, 889. 
 duty to deliver to connections, 890. 
 policy of recent legislation, 891. 
 carriage through in same car, 936. 
 provision of cars in through service, 937. 
 See Joint Rates. 
 
 CONSOLIDATION OF CORPORATIONS, 
 
 See Combinations, Pooling. 
 
 CONSTITUTIONAL LAW, 
 
 1. Protection from confiscation. 
 
 establishment of the power to restrict charges, 302. 
 rates fixed must not produce a deficit, 303. 
 reasonable return must be left, 305. 
 general policy for allowing a fair return, 320. 
 reductions ruinous only to certain companies, 327. 
 power to set aside a statutory rate, 273. 
 what statutory rate takes property, 273. 
 jurisdiction of the Commission, 308. 
 reasonable profit upon each transaction, 307. 
 constitutional limitations upon commission regulation, 236. 
 virtually confiscation of property, 236. 
 
 [ 1164 ] 
 
Index 
 
 [References aie to sections) 
 CONSTITUTIONAL LAW— Continued 
 
 reasonable rates not necessarily profitable, 237. 
 when fair net earnings left, 238. 
 less than the average rate, 238. 
 the out of pocket cost in, 238. 
 possibility of increase of business, 239. 
 amount of the capital invested, 226. 
 fair profit on his capital, 220. 
 tests of the reasonableness of a schedule, 221. 
 used by the public without just compensation, 221. 
 reasonable charge or system of charges, 222. 
 reasonableness of the schedule as a whole, 220. 
 2. Right to reasonable charges. 
 
 general principles governing reasonableness, 211. 
 
 limitations within which rates must be made, 213. 
 
 unreasonable regulation universally forbidden, 214. 
 
 interests of the companies to be considered, 216. 
 
 rights of the company not ignored, 216. 
 
 interests of the public to be considered, 217. 
 
 more or less conflicting interests, 218. 
 
 schedule as a whole may throw hght, 229. 
 
 bearing of tariff as a whole, 230. 
 
 the entire schedule of rates, 230. 
 
 rule of proportionality in sharing costs, 231. 
 
 relation of a particular rate to a whole schedule, 223. 
 
 reasonable share of the burden, 224. 
 
 company cannot make unreasonable rates, 225. 
 
 company cannot justify exorbitant profits, 226. 
 
 special circumstances affecting the particular rate, 227. 
 
 reasonableness of the separate rates, 228. 
 
 fair share of the whole amount, 228. 
 
 gross income from the schedule, 229. 
 
 average cost always modified, 232. 
 
 See Rate Regulation Interstate Commerce. 
 
 COST AS BASIS OF RATES, 
 
 cost of service the basic test, 385. 
 
 respect paid to the cost basis, 384. 
 
 costs considered in determining comparative reasonableness, 386. 
 
 the law of increasing returns, 387. 
 
 length of haul as a factor, 388. 
 
 volume of traffic as a factor, 390. 
 
 distribution of the burden, 383. 
 
 proper proportion of total costs, 392. 
 
 allocation of joint costs, 394. 
 
 basis of the proportion, 396. 
 
 average rate per unit of service, 397. 
 
 special conditions affecting cost, 404. 
 
 [1165] 
 
Index 
 
 ISeferences are to sectionsi 
 
 COST AS BASIS OF RATES— Cmtinued 
 coats do not determine rates, 409. 
 cost of service for different systems, 413. 
 cost of service for different parts of the same system, 414. 
 
 COST OF REPRODUCTION, 
 
 See Capitalization. 
 
 CRIMINAL PROSECUTION, 
 
 1. Elements of the crime. 
 
 what amounts to a rebate, 624. 
 
 dummy transportation company, 624. 
 
 discount allowed to shippers, 625. 
 
 like and contemporaneous service, 625. 
 
 similar circumstances and conditions, 625. 
 
 less than the schedule, 625. 
 
 published rate as an absolute standard, 626. 
 
 statute provides a complete system, 626. 
 
 "discrimination" as used in the Elkins Act, 628. 
 
 exaction of a special rate, 628. 
 
 devices for concealing preference imavaiUng, 630. 
 
 2. Whether intent is necessary. 
 
 what intent is necessary, 634. 
 
 turpitude or moral wrong, 634. 
 
 rebating must be willful, 634. 
 
 certain unlawful devices considered, 631. 
 
 under the Elkins Act, 631. 
 
 fraudulent schemes or devices, 631. 
 
 schemes to cover discrimination, 632. 
 
 criminal proceedings for discrimination, 633. 
 
 charge under the Elkins Act, 633. 
 
 failure to allege the payment, 633. 
 
 acceptance of a concession, 633. 
 
 See Discrimination. 
 
 D 
 DAMAGES, 
 
 See Reparation. 
 DEFAULT, 
 
 See Procedure. 
 DEFENSES, 
 
 answers in defense, 1079. 
 
 technical defenses not favored, 1079. 
 
 answer which sets up a justification, 1079. 
 
 responsiveness to pleadings, 1081. 
 
 unless reasonableness of rates is raised, 1081. 
 
 reparation for past exactions, 1081. 
 
 limitations of actions under Act, 1110. 
 
 [1166] 
 
Index 
 
 [References are to sections] 
 DEFENSES— Coniinued 
 
 running of the statute is not barred, 1110. 
 dismissal when order unnecessary, 1111. 
 locus penitentim in order to determine, 1111. 
 a complaint will be dismissed, 1111. 
 default for failure to proceed, 1100. 
 if the complainant fails to appear, 1100. 
 dismissal of the complaint, 1101. 
 prosecuted with reasonable diligence, 1101. 
 stay of proceedings, 1102. 
 satisfaction of complaint, 1103. 
 
 See Peocedube before the Commission. 
 
 DELEGATION OF POWER, 
 
 See Interstate Commerce Commission. 
 
 DEMURRAGE, 
 
 scheduling of demurrage charges, 577. 
 
 contract in reference to demurrage, 822. 
 See Schedules. 
 DEPRECIATION, 
 
 allowance for depreciation, 362. 
 
 types of depreciation, 363. 
 
 authorities refusing to allow depreciation, 364. 
 
 renewal of equipment to offset depreciation, 365. 
 
 fund to repair depreciation, 366. 
 
 capitalization of past depreciation, 367. 
 
 payments into sinking fund, 368. 
 
 amortization of franchise rights, 369. 
 
 depreciation cannot be capitalized, 955. 
 
 writing off superseded property, 956. 
 
 depreciation is of two kinds, 956. 
 
 methods of amortization accounting, 954. 
 
 the straight Une method, 954. 
 
 DIFFERENTIALS, 
 
 See Discrimination, Local. 
 
 DISCRIMINATION, ILLEGAL, 
 provisions of the Act, 670. 
 barter of transportation forbidden, 649, 650. 
 1. Concessions to get business. 
 
 the same rate for substantially similar services, 671. 
 
 concessions made in competition, 672. 
 
 competitive conditions do not justify discriminations, 673. 
 
 reductions to get competitive business illegal, 674. 
 
 concessions to get shipments from outlying territory, 675. 
 
 shippers making expensive preparations, 677. 
 
 prevalent doctrine against reduction, 684. 
 
 f 1167 
 
(References are to sections) 
 
 DISCRIMINATION, ILLEGAL—Continucd 
 
 reasonable difference sometimes permitted, 683. 
 unreasonable differences now forbidden, 682. 
 unreasonable differences universally forbidden, 681. 
 concessions made to large shippers, 680. 
 
 2. Concessions to large shippers. 
 
 additional services performed for certain shippers, 678. 
 
 reductions to large shippers unjust, 685. 
 
 services to large and small practically identical, 686. 
 
 differences in amount of shipment, 687. 
 
 reductions to groups of passengers, 688. 
 
 special kinds of passenger transportation, 689. 
 
 3. Rebates to exclusive shippers. 
 
 lower rates formerly made to exclusive shippers, 690. 
 such discriminations foster monopolies, 691. 
 shippers who agree to give all their business, 692. 
 consideration of the cost of serving, 693. 
 shippers requiring less service, 694. 
 shippers who agree to furnish large quantities, 69.5. 
 charging other shippers more than contract rates, 696. 
 competitive rates for through business, 697. 
 previous or subsequent haul, 698. 
 other methods of holding business, 699. 
 
 4. Concessions for special kinds of btisiness. 
 
 different rates for goods, 700. 
 such rates formerly allowed, 701. 
 repudiation of this doctrine, 702. 
 such differences now held illegal, 703. 
 classification based upon use, 704. 
 personaUty of shipper, 705. 
 restricting rates to certain pui-poses, 706. 
 when commodities are of different character, 707. 
 rates to certain classes of shippers, 708. 
 what concessions constitute discrimination, 658. 
 rule forbidding personal discrimination, 621. 
 See Schedules of Rates. 
 
 DISCRIMINATION, JUSTIFIABLE, 
 provisions of the Act, 670. 
 1. Reasonable differences. 
 
 provisions of the Act, 710. 
 
 modification of the rule, 711. 
 
 what preference is undue, 712. 
 
 differences in transportation cost, 713. 
 
 certain economies in operation, 714. 
 
 like circumstances and conditions, 715. 
 
 what circumstances can be considered, 716. 
 
 differences in the conditions of service, 717. 
 
 [ 1168 ] 
 
Index 
 
 IKeferences are to sections] 
 DISCRIMINATION, JVSTlFIABLEr-Confinued 
 proportionate differences may be made, 718. 
 rates should not be disproportionate, 719. 
 
 2. Shipment in more convenient units. 
 
 differences in the character of the service, 720. 
 shipment in carloads, 721. 
 advantages of carload traffic, 722. 
 permission to mix carloads, 723. 
 lower rates for shipments in bulk, 724. 
 shipments in trainloads problematical, 725. 
 contracts for regular shipments, 726. 
 the basis of the differential, 728. 
 comparison of bulk rates, 729. 
 
 3. Facilities furnished by shippers. 
 
 terminal faciUties furnished by shippers, 730. 
 undue prejudice in granting allowance, 731. 
 unjustifiable differences in rates, 732. 
 concessions to shippers in bulk, 733. 
 railroad without tank cars, 734. 
 transportation expenses paid by shipper, 735. 
 rental paid on shipper's cars, 736. 
 allowance for cars or facilities furnished, 737. 
 
 4. Restriction to scheduled allowance. 
 
 extent of statutory restrictions, 629, 738. 
 
 both rates must be open to all, 739. 
 
 lighterage allowance, 740. 
 
 elevation charges, 741. 
 
 transit privileges, 742. 
 
 terminal allowances, 743. 
 
 allowances for faciUties, 744. 
 
 where service of different character, 659. 
 
 where no public service involved, 760. 
 
 See Carload & L. C. L. 
 
 DISCRIMINATION, LOCALITIES, 
 
 1. Discrimination at common law and under statute, 
 
 provisions of the Act, 750. 
 
 scope of its principles, 751. 
 
 locality had no right at common law, 752. 
 
 statutory regulation of discrimination between localities, 753. 
 
 lower rate as evidence of unreasonableness of higher, 754. 
 
 weight to be given to such evidence, 755. 
 
 higher rate not necessarily unreasonable, 756. 
 
 reasonableness of rate per se immaterial under statute, 757. 
 
 2. General principles of statutory regulation. 
 
 what discrimination is not unlawful, 758. 
 interdependence of rates to various localities, 760. 
 no vested right in preferential rates, 761. 
 
 74 [1169] 
 
Index 
 
 [References are to sections] 
 
 DISCRIMINATION, LOCALITIES— Coniirewed 
 
 discrimination explained by local circumstances, 762. 
 
 distance as a factor in rate making, 763. 
 
 difference between through and local rates, 764. 
 
 railroad rates tend towards a cost basis, 765. 
 
 various systems of making distance rates, 766. 
 
 burden upon the railroad to defend discriminatory rates, 767. 
 
 3. What constitutes undue prejudice. 
 
 provisions against undue prejudice, 768. 
 
 discrimination by means of rate adjustments, 770. 
 
 conditions which are not dissimilar, 771. 
 
 dissimilarity of condition is a question of fact, 772. 
 
 discrimination against points off the line, 773. 
 
 equalization of value, 777. 
 
 discrimination against the staple industry, 776. 
 
 relative discrimination inconsistent with public duty, 778. 
 
 equalization of economic advantages — economic theory, 775. 
 
 equalization of economic advantages — legal practice, 776. 
 
 4. Long and short haul. 
 
 long and short haul at common law, 780. 
 statutory regulations of long and short haul, 781. 
 legal justification of lower long-haul rate, 782. 
 The Fourth Section Amendment of 1910, 783. 
 general principles governing the Fourth Section, 785. 
 interpretation of the section, 786. 
 relief from this section, 787. 
 commodity and market competition, 788. 
 conditions justifying relief from the Fourth Section, 790. 
 interpretation and application of the Fourth Section, 786. 
 principles governing deviation from the Fourth Section, 788. 
 See Rate Structure. 
 
 DISCRIMINATION, PERSONS, 
 provisions of the Act, 610. 
 
 1. Successive theories as to discrimination. 
 
 provisions of the Act, 610. 
 
 development of the rule, 611. 
 
 nothing but reasonableness once required, 612. 
 
 no rule formerly against discrimination as such, 613. 
 
 later rule against unreasonable differences, 614. 
 
 outright discrimination next condemned, 615. 
 
 exclusiveness of the privilege, 616. 
 
 special concessions from established rates, 617. 
 
 complainant charged more than regular rates, 618. 
 
 all discrimination forbidden by the better view, 619. 
 
 public injury by discriminations, 622. 
 
 2. What constitutes statutory discrimination. 
 
 policy of the Act, 623. 
 
 [1170] 
 
Index 
 
 [References are to sections] 
 
 DISCRIMINATION, PERSONS— Coratrnwed 
 what amounts to a rebate, 624. 
 prohibition of special rates, 625. 
 explanation of this policy, 626. 
 what discrimination is forbidden, 627. 
 departure from published rate, 628. 
 sanctity of the scheduled rate, 629. 
 devices for concealing preference unavailing, 630. 
 settling freights in debenture bonds, 915. 
 certain unlawful devices considered, 631. 
 schemes to cover discrimination, 632. 
 necessity for the rule against discrimination, 620. 
 
 3. Established exceptions to ruk. 
 
 pubUc wrong in siving free passes, 636. 
 passes prima fade discrimination, 637. 
 reductions for general classes, 638. 
 statutory exceptions are exclusive, 639. 
 concession for government business, 641. 
 reduction for charitable purposes, 642. 
 transportation for the carrier itself, 643. 
 policy of the commodities clause, 645. 
 carriage for other companies, 646. 
 no obUgation to grant such concessions, 647. 
 collateral results of illegal discrimination, 648. 
 
 4. Other considerations for reductions. 
 
 other consideration formerly considered, 649. 
 indefinite considerations cannot be a basis, 650. 
 concessions to those who deal with the carrier, 651. 
 fostering the interests of the carrier, 652. 
 barter of transportation forbidden, 653. 
 inconsistent contracts held unavailing, 654. 
 continuing contracts no justification, 655. 
 preference in certain services permissible, 657. 
 whether executed contracts are different, 656. 
 
 See Interstate Commmerce Commission. 
 DISMISSAL, 
 
 See Procedure. 
 DISPATCH COMPANIES, 
 
 dispatch Unes under the Act, 169. 
 
 dispatch companies as common carriers, 169. 
 
 DISTRIBUTION OF CARS, 
 
 See Facilities. 
 DIVIDENDS, 
 
 what are reasonable dividends, 313. 
 
 current rate of return, 314. 
 
 fair rate of return, 315. 
 
 reasonable profits sufficiently safe, 317. 
 
 [1171 
 
Index 
 
 IReferences are to sections] 
 DIVIDENDS— Coreiirewed 
 
 profits divided not operating expense, 325. 
 consolidation of interest and dividends, 326. 
 fund for payment of uniform dividends, 328. 
 larger retm'ns in risky enterprises, 330. 
 hazards of the business considered, 331. 
 rate of return dependent upon locality, 335. 
 present tendencies in regulation, 337. 
 
 See Capitalization, Percentage op Return. 
 
 DIVISIONS, 
 
 power of the Commission to fix divisions, 898. 
 need not pro rate on same bases, 878. 
 how divisions are determined, 899. 
 theories of basing divisions, 900. 
 constructive mileage, 901. 
 
 See Joint Rates. 
 DOCKS, 
 
 See Wharves. 
 
 E 
 
 ECONOMIC CONSIDERATIONS, 
 
 See Rate Policies. 
 ELEVATORS, 
 
 grain in transit, 182. 
 
 elevation services, 182. 
 
 transit elevation, 183. 
 
 commercial elevation, 183. 
 
 contracts with grain elevators, 922. 
 
 conduct of own elevator, 189. 
 
 elevator men dealing in grain, 745. 
 
 ELKINS ACT, 
 
 See History op Statutory Regulation. 
 
 EQUALIZATION, 
 
 1. The theory of equalization. 
 
 operation of the principle of equalization, 462. 
 
 no duty of a carrier to regulate markets, 462. 
 
 limitations upon the Commission, 463. 
 
 not its function to equalize, 463. 
 
 rates made from a commercial standpoint, 464. 
 
 carriers not obliged to equalize disadvantages, 466. 
 
 protection of natural advantage, 467. 
 
 no right to build artificial markets, 468. 
 
 no equalization of patrons, 469. 
 
 equalization of advantage as a factor, 470. 
 
 rates should not equalize differences in value, 470. 
 
 [1172] 
 
Index 
 
 [References are to sections] 
 
 EQUALIZATION— Co»(ift«erf 
 2. Scope of Us operalion. 
 
 beyond the legitimate sphere of law, 776. 
 overcoming a natural disadvantage, 776. 
 Commission does, not attempt to equalize, 776. 
 equalization of values, 778. 
 relative discrimination thought inconsistent, 799. 
 unduly prejudicing, 805. 
 what differentials may be allowed, 807. 
 no obligation to make preferential rates, 809. 
 See Rate Policies. 
 
 EMPLOYEES, 
 
 See Opeuating Expenses, Accounts. 
 
 EVIDENCE, 
 
 provisions of the Act, 990, 991, 1030, 1031, 1070, 1071. 
 
 1. Production of evidence. 
 
 summoning witnesses in general investigations, 1015. 
 
 testimony compelled in quasi-judicial proceedings, 1014. 
 
 ordinary rules of evidence applicable, 1112. 
 
 Commission is not bound, 1113. 
 
 res adjudicata before Commission, 1113. 
 
 insufficient grounds for findings, 1114. 
 
 proof of damage required, 1115. 
 
 privilege against self-crimination, 1118. 
 
 a witness is protected, 1118. 
 
 adverse interest of witnesses, 1119. 
 
 testimony on both sides introduced, 1120. 
 
 production of books and papers, 1121. 
 
 presumptions from voluntary continuance, 1116. 
 
 admissions by making changes, 1117. 
 
 2. Weight of evidence. 
 
 customary rate presumably reasonable, 444. 
 
 where a long-established rate, 444. 
 
 services not justly compared, 444. 
 
 existence of a rate prejudices advance, 444. 
 
 rates unreasonable in themselves, 445. 
 
 what makes rates unreasonable, 446. 
 
 current rates for other transportation, 447. 
 
 comparison with other rates, 448. 
 
 lines of other and distinct carriers, 448. 
 
 comparison of one isolated inconclusive, 448. 
 
 evidence inadmissible unless conditions are similar, 449. 
 
 comparison of rates between different localities, 450. 
 
 adequate for one not reasonable for another, 450. 
 
 rates in one section furnish no criterion, 450. 
 
 introduction of new evidence in the courts, 1155. 
 
 findings of the Commission as evidence, 1164. 
 
 [ 1173 ] 
 
Index 
 
 (References are to sections! 
 
 EVIDENCE— CoraimMed 
 
 judicial process to enforce testimony, 1 157. 
 other lines operating in different territory, 450. 
 See Procedure. 
 EXCLUSIVE SHIPPERS, 
 
 See Discrimination, Personal. 
 
 EXPENDITURES, 
 
 See Operating Expenses. 
 EXPORT RATES, 
 
 See Foreign Commerce. 
 
 EXPRESS COMPANIES, 
 
 express companies as common carriers, 166. 
 
 not merely as forwarders, 166. 
 
 express business conducted by railroad itself, 166. 
 
 why express service is desired, 166. 
 
 practices of the express companies, 914. 
 
 EXTRA CHARGES, 
 
 general principles as to additional charges, 570. 
 propriety of making extra charges, 571. 
 freight should cover the entire transportation, 572. 
 no separate charge for a part of the transit, 573. 
 charges for services during transportation, 574. 
 See Rate Structure. 
 
 FACILITIES, 
 
 provisions of the Act, 160, 910. 
 
 1. Provision of reasonabh facilities. 
 
 present jurisdiction over service facilities, 911. 
 
 not required by original Act, 920. 
 
 orders concerning freight delivery, 921. 
 
 service at private sidings, 924. 
 
 installing switches now under the Act, 925. 
 
 basis for ordering switch connection, 926. 
 
 protection of its terminals, 929. 
 
 basis of the duty to supply equipment, 930. 
 
 Commission jurisdiction over equipment, 931. 
 
 provision of special equipment, 933. 
 
 the obUgation treated reasonably, 932. 
 
 any discriminatory treatment forbidden, 927. 
 
 2. Distribution of available equipment. 
 
 demand foreseen although unusual, 934. 
 reasonable time to increase facilities, 935. 
 discrimination in use of cars, 938. 
 order of preference between shippers, 940. 
 where no preference justifiable, 941. 
 [ 1174 ] 
 
Index 
 
 (References are to sections] 
 FACILITIES— Cowimi/ed 
 
 basis of prorating cars, 942. 
 respective requirements compared, 943. 
 cars needed by railroads, 944. 
 private facilities in the apportionment, 945. 
 jurisdiction of the Commission, 939. 
 plan of physical operation, 1045. 
 division of cars must be published, 815. 
 ratings of the various mines, 815. 
 
 See Interstate Commerce Commission. 
 FARES, 
 
 See Passengers. 
 
 FEDERAL AND STATE JURISDICTION, 
 
 1. Conflict between federal and State jurisdiction. 
 
 provisions of the Act, 110. 
 
 power to fix rates under the constitution, 130. 
 
 extent of the federal jurisdiction, 131. 
 
 power of Congress to regulate, 142. 
 
 effect of action by Congress, 143. 
 
 jurisdiction of State and nation, 144. 
 
 division of jurisdiction normally, 145. 
 
 application of regulating statutes, 146. 
 
 respective powers over service, 147. 
 
 legislation relating to facilities, 148. 
 
 State legislation burdening interstate commerce, 149. 
 
 exercise of the federal supervision, 150. 
 
 scope for State police power, 151. 
 
 2. Extent of the federal jurisdiction. 
 
 apportionment of interstate business, 960. 
 methods of the division, 961. 
 bases of the proportion, 862. 
 apportionment of total expense, 963. 
 inherent difficulties of the problem, 964. 
 comparisons with interstate rates, 965. 
 decisions in the several States, 965. 
 supremacy of the federal system, 966. 
 discrimination produced by State action, 967. 
 
 3. Whether commerce is interstate. 
 
 carriage performed wholly within a State, 126. 
 
 on local bills of lading, 126. 
 
 course of dealing between the carriers, 123. 
 
 what the real transit, 123. 
 
 traffic in movement between States, 124. 
 
 whether a shipment is local or foreign, 124. 
 
 essential character of the commerce, 124. 
 
 through movement of traffic, 124. 
 
 termini within a single other State, 125. 
 
 [1175] 
 
Index 
 
 [References are to sections] 
 
 FEDEEAL AND STATE JURISDICTION— Coreimwd 
 passing through another State, 125. 
 carriage wholly within a State, 126. 
 
 local carriage when through transportation contemplated, 127. 
 subsequently rebiUed beyond State, 127. 
 an entirely independent course, 127. 
 intervening possession of an independent sort, 127. 
 subsequent movement out of the State, 128. 
 4. How long it continues. 
 
 precedent and subsequent transportation, 129. 
 
 ultimate destination not appearing, 128. 
 
 nothing to connect the two shipments, 128. 
 
 fixing rates for interstate commerce, 130. 
 
 existence of common arrangement, 132. 
 
 local carrier taking part, 132. 
 
 technical through rate imnecessary, 132. 
 
 shipped under a through bill, 132. 
 
 rating need not be joint, 132. 
 
 continuity of interstate shipment, 133. 
 
 no permitted device to break up, 133. 
 
 transit from beginning to end interstate, 133. 
 
 through export bill of lading, 134. 
 
 local carrier participating in through carriage, 136. 
 
 carriage continues to be interstate, 136. 
 
 intrastate part of interstate movement, 137. 
 
 line of the distinction, 138. 
 
 cars on an interchange track, 138. 
 
 essential character of the commerce, 138. 
 
 FERRIES, 
 
 ferries were common carriers, 160. 
 case of car ferries, 174. 
 when ferries owned by railroads, 174. 
 position of car ferries, 952. 
 
 FINDINGS, 
 
 See Procedure. 
 FOREIGN COMMERCE, 
 provisions of the Act, 110. 
 1. Export and import rate. 
 
 inland portion of foreign commerce, 115. 
 
 export and import rates, 117. 
 
 export rate is ordinarily lower, 117. 
 
 export and import rate differential, 114. 
 
 continuous carriage or shipment, 114. 
 
 whether on through or local bills, 115. 
 
 point in a State to a port, 115. 
 
 moving under through billing, 115. 
 
 no notation on the bill, 116. 
 
 [ 1176 ] 
 
Index 
 
 [References are to sections] 
 
 FOREIGN COMMERCE—CorUinued 
 
 foreign carriers and discriminations, 114. 
 
 due to competitive conditions, 117. 
 
 import rates regulated by competition, 118. 
 
 less than his local charge for the same haul, 118. 
 
 export rates regulated by competition, 119. 
 
 export rate may reasonably be less, 119. 
 
 foreign competition justifies necessary difTerences, 120. 
 2. Siteh proportionah must be scheduled. 
 
 export and import rates scheduled, 117. 
 
 requisites of port proportionals, 116. 
 
 must be an open rate, 116. 
 
 must include other foreign countries, 116. 
 
 rate must be filed, 115. 
 
 not applicable to goods billed locally, 115. 
 
 basis of export rates, 881. 
 
 low inland proportional rate, 881. 
 
 scheduling of export rates, 841. 
 
 applied only to actual, 881. 
 
 position of ocean carriers, 113. 
 
 limitations upon export and import rates, 121. 
 
 foreign carriers, 112. 
 
 adjacent countries, 112. 
 
 See Interstate Commerce. 
 FORWARDERS, 
 
 See Express. 
 FREIGHTS, 
 
 See Rates. 
 
 G 
 
 GROUP RATES, 
 
 the group system described, 585. 
 
 how blanket rates justified, 585. 
 
 no legal right to have groups, 592. 
 
 the system of grouping, 592. 
 
 what usual to group together, 592. 
 
 distances considered in grouping, 593. 
 
 propriety of a group rate, 593. 
 
 grouping must be reasonable, 594. 
 
 outside the favored zone, 594. 
 
 blanket rates often approved, 594. 
 
 reasonable to establish zone, 594. 
 
 testing reasonableness of grouping, 595. 
 
 tmiform rate to a group of stations, 596. 
 
 commutation rates for suburban passengers, 597. 
 
 group rates based on distance, 600. 
 
 extent of power over grouping, 601. 
 
 [1177] 
 
Index 
 
 (References are to sections] 
 GROUP RATES— Continued 
 
 following out the zone policy, 602. 
 all producers in the group, 770. 
 when blanket rates are compared, 808. 
 
 See Discrimination, Local, Rate Stkuctuke. 
 
 H 
 HACKMEN, 
 
 hackmen as common carriers, 10. 
 hackmen as connecting carriers, 865. 
 
 HEARINGS, 
 
 parties given opportunities to be heard, 1106. 
 
 cause will proceed judicially, 1106. 
 
 hearing duly notified indispensable, 1107. 
 
 without investigation and hearing, 1107. 
 
 requisites as to hearings, 1108. 
 
 determined on its own merits, 1109. 
 
 hearing under an order for investigation, 1030. 
 
 recognition of these by the Commission, 1023. 
 
 jealous protection of substantial rights, 1021. 
 
 action in accordance with evidence, 1020. 
 
 due process of administration, 1020. 
 
 See Phocedure. 
 HEPBURN ACT, 
 
 See History of Statutoet Regulation. 
 
 HISTORY OF COMMON-LAW REGULATION, 
 
 1 . The early policy of regulation. 
 
 public callings and private business, 1. 
 
 the mediaeval theory of State control, 2. 
 
 the regulation of business in the middle ages, 3. 
 
 early differentiation of the public service law, 4. 
 
 the history of the carrier, 5. 
 
 the position of the wharfinger, 6. 
 
 continuance of State regulation, 7. 
 
 survival of the common law, 11. 
 
 2. Persistence of State regulation. 
 
 the building of turnpikes, 13. 
 the era of canal construction, 14. 
 the coming of the railways, 15. 
 transportation facilities as a class, 16. 
 alteration in economic conditions, 17. 
 development in the common law, 18. 
 conservative and radical views of regulation, 21. 
 
 3. State control of public utilities. 
 
 the public services of the present day, 22. 
 the effect of natural monopoly, 23. 
 
 [1178] 
 
Index 
 
 (References are to sections] 
 
 HISTORY OF COMMON-LAW REGULATION— Coiimued 
 difficulty of distribution as a factor, 24. 
 scarcity of advantageous sites, 25. 
 Umitation of available time, 26. 
 the public services a necessity, 27. 
 _ economic limitations create public employment, 28. 
 cost of the plant, 29. 
 4. Modem regulation of public services. 
 
 necessary regulation of virtual monopoly, .32. 
 economic conditions at the present time, 3.3. 
 control of the public services, 34. 
 differentiation of the public service law, 35. 
 unity of the public service law, 36. 
 the modern programme of State control, 37. 
 
 HISTORY OP STATUTORY REGULATION, 
 
 1. Course of legislation in England. 
 
 parliamentary regulation of rates, 8. 
 
 persistence of the legislative power, 10. 
 
 carrier's liability before 1830, 52. 
 
 the carrier's Act of 1830, 53. 
 
 the railway and canal traffic Act of 1854, 54. 
 
 the railway and canal commission, 55. 
 
 scope of its powers, 56. 
 
 increase by later amendments, 57. 
 
 influence of English legislation, 58. 
 
 authority of English decisions, 59. 
 
 2. Legislation in the States. 
 
 restriction of prices in the colonies, 9. 
 
 special restrictions in early charters, 19. 
 
 the granger rate legislation, 60. 
 
 railroad commissions of former times, 61. 
 
 additions to their powers, 62. 
 
 the modem public service commissions, 63. 
 
 the spread of the movement, 64. 
 
 extent of their supervision, 65. 
 
 regulation of rates, 66. 
 
 adequacy of service, 67. 
 
 keeping of accounts, 68. 
 
 issue of securities, 69. 
 
 inherent limitations upon commission action, 103. 
 
 HOLDING COMPANY, 
 
 See Consolidation. 
 
 I 
 IMPORT RATES, 
 
 See Foreign Commerce. 
 
 [1179] 
 
Index 
 
 [References are to sections] 
 
 IMPROVEMENTS, 
 
 See Betterments, CoNSTBtrcTioN. 
 INDICTMENT, 
 
 See Crime. 
 INDUSTRIAL RAILWAY, 
 
 problem of the industrial railways, 85. 
 
 industrial lines controlled financially, 193. 
 
 industrial railway may be true common carrier, 197. 
 
 joint rates then permitted, 193. 
 
 divisions, if too large, forbidden, 197. 
 
 would virtually be a rebate, 85. 
 
 exclusively that of a plant facility, 197. 
 
 allowance for such plant facilities, 195. 
 
 See Common Carriers. 
 INTEREST, 
 
 interest upon bonds protected, 310. 
 
 rates at which governments can borrow, 311. 
 
 prevailing rate of interest allowed, 312. 
 
 fair rate of return, 314. 
 
 current rate the standard, 316. 
 
 return upon investments prevailing, 318. 
 
 more than current rates not secured, 323. 
 
 how interest payable is considered, 324. 
 
 whethe!r uniform return upon all property, 332. 
 
 rate of interest dependent upon safety, 333. 
 
 risk by reason of depreciated security, 334. 
 
 investment in public service, 336. 
 
 See Bonds. 
 INTERSTATE CARRIERS, 
 
 1. Transportation sendees. 
 
 provisions of the Act, 160. 
 railroads, 162. 
 water lines, 163. 
 passenger transportation, 164. 
 street railways, 165. 
 express companies, 166. 
 dispatch lines, 169. 
 
 2. Other callings. 
 
 sleeping car companies, 167. 
 parlor car service, 168. 
 pipe lines, 170. 
 telegraph lines, 171. 
 telephone systems, 172. 
 government services, 173. 
 wharfage, 175, 
 terminals, 176. 
 car ferries, 952. 
 railway bridges, 952. 
 
 [ U80 ] 
 
Index 
 
 [References are to sectionsl 
 INTERSTATE CARRIERS— Coniinued 
 
 3. Incidental services. 
 
 transfer, 174. 
 
 switching, 177. 
 
 lighterage, 178. 
 
 drayage, 179. 
 
 loading, 180. 
 
 refrigeration, 181. 
 
 elevation, 182. 
 
 storage, 183. 
 
 transit privileges, 184. 
 
 transportation services, 185, 735. 
 
 term "transportation" in the Act, 160. 
 
 facilities in the course of transit, 174, 910. 
 
 4. Whether an interstate carrier. 
 
 provisions of the Act, 166. 
 
 carrier acting wholly within one State, 124. 
 
 railroad participating in through movement, 124. 
 
 carrier keeping itseK from concurrences, 126. 
 
 receiving no freight on through bills, 126. 
 
 irrespective of common control, 136. 
 
 operating wholly within a State, 136. 
 
 if through billing and rating, 136. 
 
 who must file reports, 952. 
 
 who must keep accounts, 953. 
 
 INTERSTATE COMMERCE, 
 provisions of the Act, 110. 
 
 1. Foreign commerce. 
 
 provisions of the Act, 110. 
 
 scope of power conferred. 111. 
 
 foreign carriers, 112. 
 
 ocean carriers, 113. 
 
 foreign carriers and discriminations, 114. 
 
 inland portion of foreign commerce, 115. 
 
 2. Interstate commerce. 
 
 what are considered States, 122. 
 
 what constitutes commerce between the States, 123. 
 
 traffic in movement between States, 124. 
 
 termini within a single State, 125. 
 
 carriage wholly within a State, 126. 
 
 local carriage when through transportation contemplated, 127. 
 
 beginning and ending of interstate transit, 128. 
 
 precedent and subsequent transportation, 129. 
 
 3. ContiniuMS carriage under common control. 
 
 existence of common arrangement, 132. 
 continuity of interstate shipment, 133. 
 relations with water lines, 134. 
 
 [ 1181 1 
 
Index 
 
 (References aie to sections] 
 INTERSTATE COMMERCE— Coreimwed 
 
 what constitutes continuous carriage, 135. 
 local carrier participating in through carriage, 136. 
 intrastate part of interstate movement, 137. 
 line of the distinction, 138. 
 device to break through shipment, 139. 
 4. Traffic rated moving through. 
 
 publishing of proportional rates, 140. 
 
 transit privileges under through arrangements, 141. 
 
 requisites of port proportionals, 116. 
 
 export and import rates, 117. 
 
 import rates may be regulated by competition, 118. 
 
 export rates regulated by competition, 119. 
 
 foreign competition justifies only necessary differences, 120. 
 
 limitations upon export and import rates, 121. 
 
 See Federal and State Jurisdiction. 
 
 INTERSTATE COMMERCE ACTS, 
 
 1. The establishment of the federal commission. 
 
 provisions of the Acts, 50. 
 
 development of legislative control, 51. 
 
 the Interstate Commerce Act of 1887, 70. 
 
 scope of the original provisions, 71. 
 
 the immediate amendments found necessary, 72. 
 
 The Elkins Act of 1903, 73. 
 
 the long and short haul clause, 74. 
 
 limited jurisdiction over rates, 75. 
 
 lack of power over through rates, 76. 
 
 the occasion for radical changes, 77. 
 
 2. The strengthening of the Commission. 
 
 The Hepburn Act of 1906, 78. 
 effect of these amendments, 79. 
 occasion for the Act, 80. 
 installation of private switches, 81. 
 regulation of private facilities, 82. 
 power to fix maximum rates, 83. 
 ordering through routes and rates, 84. 
 the problem of the industrial railways, 85. 
 
 3. The elaboration of its powers. 
 
 The Mann Act of 1910, 86. 
 
 the new long and short haul clause, 87. 
 
 establishment of through routes, 88. 
 
 suspension of rate advances, 89. 
 
 the Hadley Commission, 90. 
 
 the Commerce Court, 91. 
 
 The Panama Act, 92. 
 
 The Valuation Act, 93. 
 
 The Clayton Act, 982. 
 
 [1182] 
 
Index 
 
 [References are to sections] 
 
 INTERSTATE COMMERCE ACTS~C onlinaed 
 4. Recent decisions defining jurisdiction. 
 the Abilene Oil case, 94. 
 the Proctor Gamble case, 95. 
 the Williamette Valley case, 96. 
 the Lemon Rates case, 97. 
 the Baltimore & Ohio Southwestern case, 98. 
 the Minnesota Rate case, 99. 
 the Shreveport case, 100. 
 the Intermountain case, 101. 
 the Pipe Line case, 102. 
 
 INTERSTATE COMMERCE COMMISSION, 
 
 1. Bases of Commission regulation. 
 
 regulation of rates by the State, 992. 
 ways in which power is exercised, 993. 
 power to pass on reasonableness, 994. 
 fixing rates by Commission, 996. 
 nature of their powers, 997. 
 delegation of rate-making power, 998. 
 nature of the Commission, 1000. 
 functions of the Commission, 1001. 
 
 2. Administrative functions of the Commission. 
 
 provisions of the Act, 1030. 
 
 basis of its powers, 1002. 
 
 limitations upon its jurisdiction, 1003. 
 
 extent of its supervision, 1004. 
 
 visitorial powers in general, 1105. 
 
 what supervision implies, 1006. 
 
 status of the Commission, 1007. 
 
 due process of administration, 1020. 
 
 jealous protection of substantial rights, 1021. 
 
 3. Authority to investigate conditions. 
 
 investigation by the Commission, 1008. 
 limitation of its scope, 1009. 
 investigation by federal Commission, 1010. 
 extent of its powers, 1010. 
 investigation by the Commission, 1016. 
 investigation of new tariff, 1017. 
 investigation by order of Congress, 1018. 
 procedure upon such investigation, 1019. 
 
 4. Power to order changes. 
 
 provisions of the Act, 1070. 
 
 power to fix rates originally denied, 1032. 
 
 powers established by later amendments, 1034. 
 
 orders of the Commission, 1031. 
 
 no disturbance of reasonable rates, 1035. 
 
 basis of fixing reasonable rates, 1036. 
 
 [1183 
 
Index 
 
 [References are to sections] 
 
 INTERSTATE COMMERCE COMMISSION— Coreiireuerf 
 jurisdictional limitations upon rate revision, 1037. 
 how the Commission views its function, 1039. 
 working within legal bounds, 1038. 
 
 5. Reparation for past exactions. 
 
 reparation in connection with relief, 1041. 
 
 conditions of granting reparation, 1104. 
 
 concurrent jurisdiction over relief, 1042. 
 
 attitude of the courts, 1043. 
 
 no reparation for misquoted rate, 1053. 
 
 liability in quoting rates, 1054. 
 
 effect of misquoted rate, 1049. 
 
 recovery based upon published rate, 1048. 
 
 6. Extent of its jurisdiction. 
 
 things outside Commission jurisdiction, 1044. 
 
 limitations upon its powers, 1045. 
 
 basis of Commission jurisdiction, 1046. 
 
 extent of its powers, 1047. 
 
 recovery of scheduled rate, 1050. 
 
 State courts deprived of jurisdiction, 1051. 
 
 scheduled rates conclusive in the courts, 1052. 
 
 nature of the rate, 1040. 
 
 limitations of this policy, 1055. 
 
 INTERVENTION, 
 
 See Pbocedube bepokb the Commission. 
 
 INVESTIGATIONS, 
 
 power to investigate rates, 991. 
 
 all reports of investigations, 1031. 
 
 investigating, and reporting thereon, 1000. 
 
 visitorial powers in general, 1005. 
 
 may require reports of the whole, 1005. 
 
 power to prescribe rules, 1005. 
 
 not of management and control, 1005. 
 
 what supervision implies, 1006. 
 
 investigation by the Commission, 1008. 
 
 may enforce production of books, 1008. 
 
 investigating supposed violations of Act, 1008. 
 
 limitation of its scope, 1009. 
 
 investigation by the Commission, 1010. 
 
 right to investigate the issues, 1014. 
 
 inquiries within the scope, 1014. 
 
 summoning witnesses in general investigations, 1015. 
 
 witnesses should not be required to answer, 1015. 
 
 general investigations and quasi-judicial distinguished, 1015. 
 
 investigation by the Commission on its own motion, 1016. 
 
 investigation as a result of filing new tariff, 1017. 
 
 [ 1184 1 
 
Index 
 
 [References are to sections] 
 INVESTIGATIONS— Condnmd 
 
 investigation by order of Congress, 1018. 
 procedure upon such investigation, 1019. 
 
 J 
 
 JOINT RATES, 
 
 provisions of the Act, 860. 
 
 1. Requisites as to through rates. 
 
 joint rates must be reasonable, 872. 
 
 limitations upon joint rates, 873. 
 
 nature of a joint rate, 874. 
 
 joint rate lower than combination, 87.5. 
 
 concurrence of carriers concerned, 876. 
 
 share of separate carrier as evidence, 877. 
 
 through rate although transit is broken, 878. 
 
 policing of transit privileges, 879. 
 
 proportional rates, 880. 
 
 export rates, 881. 
 
 liability of all carriers participating, 1096. 
 
 2. Filing of joint tariffs. 
 
 meaning of joint tariff, 836. 
 
 through rate, without the consent, 836. 
 
 not matters of private agreement, 842. 
 
 carrier cannot be bound by other's tariffs, 842. 
 
 making and filing jointly, 837. 
 
 joint tariff for all, 837. 
 
 what particulars must be published, 838. 
 
 tariff naming rates through, 838. 
 
 naming all the participating roads, 838. 
 
 roads have not filed a tariff, 837. ' 
 
 can be but one legal rate, 839. 
 
 parties liable to prosecution, 843. 
 
 3. Computation of combination rate. 
 
 lawful combination of rates, 836. 
 aggregate local rates between points, 836. 
 if there is no joint tariff, 818. 
 where there are two rates, 837. 
 rates based upon combinations, 839. 
 a combination of separate rates, 839. 
 what combinations are justified, 840. 
 factor in a combination not on file, 840. 
 whether export rates must be filed, 841. 
 what export rates must be filed, 841. 
 divisions and proportional rates, 842. 
 where there is a proportional rate, 842. 
 
 4. Compulsory joint through rating. 
 
 through arrangements not obligatory, 887. 
 
 75 [1185] 
 
Index 
 
 [References are to sections] 
 
 JOINT RkT^S— Continued 
 
 carrier might formerly select route, 888. 
 jurisdiction of the Commission, 892. 
 discretion in its exercise, 893. 
 Hmitations upon the Commission, 894. 
 the policies involved therein, 895. 
 protection from short hauling, 896. 
 what routes considered circuitous, 897. 
 power of the Commission to fix divisions, 898. 
 how divisions are determined, 899. 
 theories of basing divisions, 900. 
 constructive mileage, 901. 
 
 See Connecting Carriage, Schedules op Rates. 
 
 JUDICIAL POWER, 
 
 See Constitutional Law. 
 
 JURISDICTION OF THE COMMISSION, 
 provisions of the Act, 1070. 
 
 1. Dismissal for lack of jurisdiction. 
 
 raising the question of jurisdiction, 1075. 
 
 dismissal for lack of jurisdiction, 1076. 
 
 not conferred by stipulation, 1075. 
 
 unless jurisdiction over the subject, 1075. 
 
 no power to manage the business, 1002. 
 
 limitations upon its jurisdiction, 1003. 
 
 no orders concerning the grade of service, 1003. 
 
 extent of its supervision, 1004. 
 
 no authority to enforce State laws, 1004. 
 
 no enforcement of the commodities clause, 1004. 
 
 extends only to public relations, 1004. 
 
 not all transportation by railroad, 1011. 
 
 not private rights and wrongs, 1011. 
 
 actions in tort or contract, 1011. 
 
 wholly within the jurisdiction of the courts, 1011. 
 
 no suits to recover damages for delay, 1013. 
 
 only with regard to impropriety in rates, 1013. 
 
 2. Extent of Commission jurisdiction. 
 
 things outside Commission jurisdiction, 1044. 
 
 only liabilities under the Act, 1044. 
 
 duties carrier owes to its patrons, 1046. 
 
 not solely upon a contractual relation, 1044. 
 
 not negligent injuries or consequential damages, 1045. 
 
 limitations upon its powers, 1045. 
 
 not of conversion for withholding delivery, 1045. 
 
 basis of Commission jurisdiction, 1046. 
 
 no jurisdiction generally to adjudicate, 1046. 
 
 cannot determine the validity or legaUty generally, 1046. 
 
 [1186] 
 
Index 
 
 IHeferences are to sections] 
 
 JURISDICTION OF THE COMiMISSIOX— Co««mued 
 extent of its powers, 1047. 
 equity to enforce performance, 1047. 
 payment of damage claims, 1047. 
 cannot allow set-off, 1047. 
 no authority to assess costs, 1058. 
 negligence not constituting a breach, 1058. 
 concurrent jurisdiction over relief, 1042. 
 attitude of the courts, 1043. 
 
 See Interstate Commerce Commission. 
 
 JURISDICTION OF THE COURTS, 
 
 1. The right to a jvdicial determination. 
 
 provisions of the Act, 1130. 
 
 course of procedure, 1131. 
 
 functions of the Commission, 1134. 
 
 when preliminary action by the Commission is necessary, 1135. 
 
 the right of appeal from the Commission to the courts, 1137. 
 
 jurisdiction of the federal courts, 1138. 
 
 2. Grounds of invalidity of Commission action. 
 
 action made an unconstitutional statute, 1140. 
 
 action not within the statute, 1141. 
 
 action in violation of constitutional guaranties, 1142. 
 
 action after an inadequate hearing, 1143. 
 
 action upon mistaken conclusions of law, 1145. 
 
 action contrary to evidence, 1146. 
 
 action of an arbitrary or unreasonable nature, 1147. 
 
 3. Procedure far determining the validity of Commission ax:tion. 
 
 necessary and proper parties in enforcement suits, 1154. 
 findings of the Commission as evidence, 1155. 
 temporary restraining order, 1148. 
 preliminary injunction, 1149. 
 perpetual injunction, 1150. 
 sufficiency of averments, 1152. 
 
 4. Reparation proceedings and other enforcement suits. 
 
 judicial process in aid of proceedings before the Commission, 1157. 
 recovery on a reparation order, 1163. 
 venue of enforcement suits, 1154. 
 Commission's award as evidence, 1104. 
 judicial process as aid, 1157. 
 
 See CoNSTiTOTioNAL Law. 
 
 LATERAL BRANCHES, 
 main track, 190. 
 unlawful advantages, 194. 
 line haul, 196. 
 
 [1187] 
 
Index 
 
 [References are to sections] 
 
 LATERAL BRANCHES— Co»<m«ed 
 shipper owning a tap line, 197. 
 out of line haul, 589. 
 
 See Facilities. 
 LEGISLATIVE POWER, 
 
 See Constitutional Law. 
 
 LENGTH OF CARRIAGE, 
 
 See Rate Structure. 
 LIEN, 
 
 See Demurrage. 
 LIGHTERAGE, 
 
 lighterage zone for free lightering, 178. 
 lighterage by independent companies, 178. 
 See Allowances. 
 
 LIMITATION OF LIABILITY, 
 
 See Bill of Lading. 
 LOANS, 
 
 See Operating Expenses, Accounts. 
 
 LOCAL DISCRIMINATION, 
 
 See Discrimination, Local. 
 LOCAL RATES, 
 
 See Rate Structure, Discriminations, Local. 
 
 LONG AND SHORT HAUL, 
 provisions of the Act, 750. 
 long and short haul at common law, 780. 
 legal justification of lower long-haul rate, 781. 
 if competition is met, 781. 
 proportion of the fixed charges, 781. 
 statutory rules for long and short-haul rates, 782. 
 the original Fourth Section, 74. 
 the Fourth Section Amendment of 1910, 783. 
 rigid long-and-short-haul section, 784. 
 long haul must not be unreasonably low, 784. 
 principles governing deviation from the section, 788. 
 discretion of the Commission, 789. 
 
 M 
 MAINTENANCE OF WAY, 
 
 See Construction. 
 MANN ACT, 
 
 See History or Statutory Regulation. 
 
 MANUFACTURERS, 
 
 See Discrimination, Personal. 
 
 MEDIEVAL SYSTEM, 
 
 See History of Common Law. 
 [ 1188 ] 
 
Index 
 
 [References are to sections) 
 MILEAGE, 
 
 See Rate Stbucttjbe. 
 MILEAGE TICKETS, 
 
 See Passengehs. 
 MILLING IN TRANSIT, 
 
 See Transit Privileges. 
 MINIMUM CARLOAD, 
 
 See Carload. 
 MINIMUM RATE, 
 
 See Rate Structure. 
 MIXED CARLOADS, 
 
 See Carloads. 
 
 N 
 NET EARNINGS, 
 
 See Operating Expenses. 
 NIGHT MESSAGES, 
 
 See Telegraph. 
 
 O 
 OFFICIALS, 
 
 See Operating Expenses. 
 
 OPERATING EXPENSES, 
 
 provisions of the Act, 340, 950. 
 1. Cost of performing service. 
 real cost of operation, 341. 
 cost of rendering service, 342. 
 net earnings in general, 343. 
 salaries paid to officials, 344. 
 cost of supplies, 345. 
 unreasonable expenditures, 346. 
 improvident arrangements, 347. 
 estimating labor cost, 348. 
 scientific management, 349. 
 loans, 350. 
 taxes, 351. 
 2. Expenditures on the plant. 
 
 expense of equipment and maintenance, 352. 
 
 coat of rolling stock, 353. 
 
 losses by accident, 354. 
 
 betterments considered maintenance, 355. 
 
 improvement of existing plant, 356. 
 
 replacement considered as repair, 357. 
 
 permanent improvements should not be annual charge, 358. 
 
 new construction should be charged to capital, 359. 
 
 [ 1189 ] 
 
Index 
 
 [References are to sections] 
 OPERATING EXPENSES— CoraimMerf 
 
 new construction not an operating expense, 360 
 betterment out of income, 361. 
 
 See Accounts. 
 ORDER, 
 
 See Procedure. 
 ORIGINAL COST, 
 
 See Capitalization. 
 
 P 
 PANAMA ACT, 
 
 See History of Statutory Regulation, Pooling. 
 
 PARI DELICTI, 
 
 See Procedure 
 PARLOR CARS, 
 
 parlor-car service, 168. 
 
 drawing-room cars, 168. 
 
 PARTIES, 
 
 provisions of the Act, 1070, 1071. 
 
 1. Proper complainants. 
 
 person aggrieved should complain, 1086. 
 
 interest in his own right, 1086. 
 
 requisites in this regard, 1087. 
 
 party at whose instance, 1087. 
 
 regardless of his standing, 1087. 
 
 complaint by an association, 1088. 
 
 voluntary improvement association, 1088. 
 
 unincorporated association, 1088. 
 
 freight bureau, 1088. 
 
 producers' association, 1088. 
 
 board of trade, 1089. 
 
 members representing such associations, 1089. 
 
 State Railroad Commission, 1090. 
 
 intervening parties, 1091. 
 
 cross-complaint, 1091. 
 
 when interveners denied reparation, 1091. 
 
 2. Proper respondents. 
 
 proper parties not made defendants, 1092. 
 
 company not made a party, 1092. 
 
 necessary parties defendant, 1093. 
 
 all carriers whose appearance is necessary, 1093. 
 
 who are parties in interest, 1094. 
 
 defendants must have an interest, 1095. 
 
 one of several joint parties, 1096. 
 
 liabilities in through carriage, 1097. 
 
 liability is joint and several, 1097. 
 
 See Procedure. 
 
 [1190] 
 
Index 
 
 [References are to sections] 
 
 PASSES, 
 
 public wrong in giving free passes, 636. 
 free carriage of certain persons, 636. 
 passes prima facie discrimination, 637. 
 reductions for certain classes, 638. 
 Act contains an elaborate list, 639. 
 passes under the old regime, 639. 
 persons destitute and homeless, 639. 
 charitable and religious purposes, 642 
 its officers and its agents, 643. 
 their families only in so far, 642. 
 passes for valuable consideration, 6.52. 
 denial of free transportation, 70S. 
 
 See DiscEiMiNATioN, Personal. 
 
 PASSENGER CARRIAGE, 
 
 passenger transportation under the Act, 164. 
 
 passenger fares generally on mileage basis, 591. 
 
 normal passenger mile-revenue, 689. 
 
 special kinds of passenger transportation, 689. 
 
 reductions to groups of passengers, 688. 
 
 what is "party rate," 688. 
 
 issue of mileage tickets, 727. 
 
 granting of excursion rates, 715. 
 
 rates for strip tickets, 727. 
 
 special rates for limited tickets, 727. 
 
 establishing of commutation fares, 697. 
 
 not discriminatory in themselves, 597. 
 
 PERCENTAGE OF RETURN, 
 
 1. Establishment of the doctrine. 
 
 elements in determining a fair return, 301. 
 rates fixed must not produce a deficit, 303. 
 adequate return must be left, 304. 
 reasonable return must be left, 305. 
 reasonableness of return a judicial question, 306. 
 reasonable profit upon each transaction, 307. 
 jurisdiction of the Commission, 308. 
 status of the companies affected, 309. 
 
 2. Fair rate of return. 
 
 interest upon bonds protected, 310. 
 
 rates at which governments can borrow no criterion, 311. 
 
 prevailing rate of interest allowed, 312. 
 
 what are reasonable dividends, 313. 
 
 current rate of return, 314. 
 
 fair rate of return, 315. 
 
 current rate the standard, 316. 
 
 reasonable profits sufficiently safe, 317. 
 
 [1191] 
 
Index 
 
 [References are to sections] 
 
 PERCENTAGE OF RETVRN— Continued 
 
 rate of return upon investments in general, 318. 
 public service has its peculiar risks, 319. 
 
 3. Policies respecting return allowed. 
 
 general policy for allowing a fair return, 320. 
 no right to raise rates in prosperous times, 321. 
 commercial conditions affecting dividends, 322. 
 how interest payable is considered, 324. 
 more than current rates of interest, 323. 
 profits divided not operating expense, 325. 
 consolidation of interest and dividend, 326. 
 reductions ruinous only to certain companies, 327. 
 creating a fund for payment of uniform dividends, 328. 
 greater profit for better service, 329. 
 
 4. Character of the enterprise. 
 
 larger returns in risky enterprises, 330. 
 hazards of the business considered, 331. 
 whether uniform return upon all property, 332. 
 rate of interest dependent upon safety, 333. 
 risk by reason of depreciated security, 334. 
 rate of return dependent upon locality, 335. 
 investment in public service, 335. 
 present tendencies in regulation, 337. 
 
 PERMANENT IMPROVEMENTS, 
 
 See Bettehments, Construction. 
 PIPE LINES, 
 
 pipe lines under the Act, 78. 
 
 pipe lines subject to the Commission, 170. 
 
 the Pipe Line case, 102. 
 
 discussion thereof, 189. 
 
 PLANT FACILITIES, 
 
 plant facility cannot have allowance, 195. 
 railways nothing more than facilities, 194. 
 
 PLEADINGS, 
 POLICE POWER, 
 
 See Procedure. 
 See Constitutional Law. 
 
 POOLING, 
 
 restraint of trade at common law, 978. 
 certain decisions support pooling, 979. 
 pooling forbidden by the Commerce Act, 980. 
 meaning of the Sherman Act, 981. 
 extent of the Clayton Act, 982. 
 provisions of the Panama Act, 983. 
 examples of pooling arrangements, 984. 
 certain agreements held valid, 985. 
 
 [U92] 
 
Index 
 
 [References are to sections] 
 PREFERENCE, 
 
 See Discrimination. 
 PREFERENTIAL RATES, 
 
 See Discrimination, Local. 
 PRESENT VALUE, 
 
 See Capitalization; Valuation. 
 PRESS OF BUSINESS, 
 
 PRESUMPTIONS, 
 PRIORITIES, 
 PRIORITY, 
 PRIVATE CARS, 
 
 See Facilities. 
 See Evidence. 
 See Facilities. 
 See Discrimination 
 See Facilities 
 
 PROCEDURE, 
 
 provisions of the Act, 1070, 1071. 
 
 1. Proceedings before the Commission. 
 
 conduct of the proceedings, 1011. 
 procedure in regular course, 1072. 
 scope of the proceedings enlarged, 1073. 
 course of the pleadings, 1074. 
 raising the question of jurisdiction, 1075. 
 individual rate during general inquiry, 1076. 
 statement of the wrong, 1077. 
 sufficiency of the complaint, 1078. 
 answers in defense, 1079. 
 amendment to complaint, 1080. 
 responsiveness to pleadings, 1081. 
 application for relief, 1082. 
 informal complaint, 1083. 
 
 2. Parties to the proceedings. 
 
 person interested as complainant, 1086. 
 
 complaint by an association, 1088. 
 
 intervening parties, 1091. 
 
 proper parties defendant, 1092. 
 
 necessary parties defendant, 1093. 
 
 who are parties in interest, 1094. 
 
 defendants must have an interest, 1095. 
 
 one of several joint parties, 1096. 
 
 who entitled to reparation, 1098. 
 
 as between consignor and consignee, 1099. 
 
 complainant not coming with clean hands, 1084. 
 
 3. Order of procedure. 
 
 default for failure to proceed, 1100. 
 dismissal of the complainant, 1101. 
 
 [ 1193 ] 
 
Index 
 
 [References are to sections] 
 
 PROCEDVBE— Continued 
 
 stay of proceedings, 1102. 
 satisfaction of complaint, 1103. 
 scrutiny of reparation agreements, 1105. 
 parties given opportunity to be heard, 1106. 
 hearing duly notified indispensable, 1107. 
 requisites as to hearings, 1108. 
 course of the proceedings, 1109. 
 limitation of actions, 1110. 
 dismissal when order unnecessary, 1111. 
 4. Findings of the Commission. 
 award of reparation, 1056. 
 bases of reparation, 1057. 
 extent of the jurisdiction, 1058. 
 damages to business generally, 1059. 
 how far party may reopen case, 1061. 
 finding does not work an estoppel, 1062. 
 the two-year rule, 1063. 
 reopening a case for rehearing, 1065. 
 
 PROCEDURE BEFORE THE COURTS, 
 
 1. Basis of recourse to the courts. 
 
 provisions of the Act, 1130. 
 
 course of procedure, 1131. 
 
 functions of the Commission, 1132. 
 
 when preliminary action by the Commission is necessary, 1135. 
 
 the right of appeal from the Commission to the courts, 1137. 
 
 jurisdiction of the federal courts, 1138. 
 
 2. Grounds for invalidating Commission action. 
 
 action under an unconstitutional statute, 1140. 
 
 action not within the statute, 1141. 
 
 action in violation of constitutional guarantees, 1142. 
 
 action after an inadequate hearing, 1143. 
 
 action upon mistaken conclusions of law, 1145. 
 
 action contrary to evidence, 1146. 
 
 action of an arbitrary or unreasonable nature, 1147. 
 
 3. Procedure for determining its validity. 
 
 necessary and proper parties in enforcement suits, 115^^ 
 findings of the Commission as evidence, 1146. 
 temporary restraining order, 1148. 
 preliminary injunction, 1150. 
 perpetual injunction, 1151. 
 sufficiency of averments, 1153. 
 
 4. Reparation proceedings and enforcement suits. 
 
 recovery on a reparation order, 1163. 
 
 judicial process in aid of proceedings before the Commission, 1156. 
 
 necessary parties, 1153. 
 
 necessary averments, 1152. 
 
 [1.194] 
 
Index 
 
 [References are to sections) 
 PROCEDURE BEFORE THE COVRTS—Conluiued 
 venue of enforcement suits, 1154. 
 conunissions award aa evidence, 1155. 
 
 PRODUCTION OF BOOKS, 
 
 See Phocedube. 
 PROPORTIONAL RATES, 
 
 See Foreign Commerce. 
 PRO RATING, 
 
 See Divisions. 
 PUBLIC DUTY, 
 
 1. Public obligation. 
 
 provisions of the Act, 910. 
 
 public obligation the fundamental principle, 198. 
 
 nature of the pubUc duty, 199. 
 
 limitations upon the profession, 200. 
 
 public duty the basis, 201. 
 
 extent of the carrier's route, 202. 
 
 scope of the service, 203. 
 
 profession limited to car service, 206. 
 
 carriage of rolling stock, 205. 
 
 forwarders of shipments, 208. 
 
 special trains, 207. 
 
 dependent service, 209. 
 
 nature of public profession, 188. 
 
 extent of the power of regulation, 189. 
 
 2. Public service. 
 
 provisions of the Act, 160. 
 who are common carriers, 186. 
 commitment to public service, 187. 
 provisions of the Act, 910. 
 general obligation to serve all, 912. 
 extent of federal supervision, 913. 
 rulings of the Commission, 914. 
 equality of service insisted upon, 915. 
 scope of present jurisdiction, 916. 
 freight embargo as an excuse, 917. 
 carriers discriminating against its rivals, 918. 
 railroad cutting its own rates for itself, 919. 
 
 PUBLIC EMPLOYMENT, 
 1. Nature of public duty. 
 
 public service voluntarily assumed, 199. 
 public duty which results, 199. 
 aflBrmative duty to serve, 199. 
 status which one is under, 199. 
 what the profession covers, 200. 
 extent of the pubhc duty, 200. 
 public duty the basis, 201. 
 
 [1195] 
 
Index 
 
 [References are to sections] 
 
 'UBLIC EMPLOYMENT— Continued 
 
 fundamental duty in public employment, 201. 
 carrier to serve the public properly, 201. 
 carrier to serve all who apply, 201 . 
 2. Extent of public profession. 
 
 extent of the carrier's route, 202. 
 
 points oS his line, 202. 
 
 transportation over its own route, 202. 
 
 need not send cars to fetch freight, 202. 
 
 scope of the service, 203. 
 
 all freight similar in character, 203. 
 
 profession limited to car service, 206. 
 
 forwarders offering consolidated shipments, 208. 
 
 the problem of dependent service, 209. 
 
 present state of the public service law, 39. 
 
 public has an interest, 189. 
 
 UBLIC POLICY, 
 
 See Rate Policies. 
 UBLIC PROFESSION, 
 
 See Common Carriers. 
 UBLIC UTILITIES, 
 
 public callings and private business, 1. 
 
 duty to serve all, 1. 
 
 nature of public utilities, 34. 
 
 the public services of the present day, 22. 
 
 the effect of natural monopoly, 23. 
 
 difficulty of distribution as a factor, 24. 
 
 scarcity of advantageous sites, 25. 
 
 limitation of available time, 26. 
 
 the public services a necessity, 27. 
 
 service on a large scale, 30. 
 
 character of the product, 24. 
 
 1. What ore public services. 
 
 URCHASE, 
 
 See Valuation. 
 
 Q 
 UASI-JUDICIAL POWER, 
 
 See Interstate Commerce Commission. 
 
 R 
 AILROADS, 
 
 the coming of the railways, 15. 
 beginnings of railroads, 51. 
 first railway charters, 19. 
 
 [ 1196 ]' 
 
Index 
 
 [References are to sections] 
 RAILROADS— Continued 
 
 carriers by railroad under the Act, 71. 
 
 railroads subject to the Commission, 162. 
 
 public railroads, 190. 
 
 private railroads, 191. 
 
 conduct of a modern railroad, 933. 
 
 RATE COMPARISONS, 
 
 1. Rates reasonable in themselves. 
 
 carrier entitled to reasonable compensation, 442. 
 
 general principles as to reasonableness, 443. 
 
 customai-y rate presumably rea!5onable, 444. 
 
 rates unreasonable in themselves, 445. 
 
 what makes rates unreasonable, 446. 
 
 current rates for other transportation, 447. 
 
 comparison with other rates, 448. 
 
 evidence inadmissible unless conditions are similar, 449. 
 
 comparison of rates between different localities, 450. 
 
 usual rates govern passenger fares, 451. 
 
 2. Factors modifying respective cost. 
 
 cost of service insufficient in itself, 402. 
 
 special conditions affecting cost, 403. 
 
 amount of service asked as a factor, 404. 
 
 effect of low average haul, 405. 
 
 local business peculiarly expensive, 406. 
 
 circumstances of particular service, 407. 
 
 divisions in sparsely populated territory, 408. 
 
 cost of handling business, 409. 
 
 cost of service for different systems, 413. 
 
 difference in transportation conditions, 414n. 
 
 3. Proper distribution of costs. 
 
 cost of service estimated, 415. 
 
 conditions affecting transportation costs, 419. 
 
 costs of special service, 418. 
 
 law of decreasing costs, 412. 
 
 distance as a factor, 416. 
 
 amount of traffic as a factor, 417. 
 
 cost of service for different parts, 414. 
 
 conclusion as to proportionate rate, 421. 
 
 current theories as to relative rates, 420. 
 
 4. Difference in rate between classes. 
 
 principles governing differences between classes, 542. 
 low-grade commodities at low rates, 543. 
 high-grade commodities not overcharged, 544. 
 proportionate difference between the classes, 545. 
 principles in making commodity rates, 546. 
 reasonableness tested by comparison, 547. 
 slight differences between similar commodities, 548. 
 
 [ 1197 ] 
 
Index 
 
 IReferences are to sections] 
 UTE COMPARISONS— CoreZiratted 
 
 discrimination between commodities forbidden, 549. 
 difference between values justifies classification, 650. 
 relative differences between ratings, 551. 
 distribution of the burden by classification, 552. 
 
 lATE POLICIES, 
 
 1. Competition as a factor in rate making. 
 
 suppression of competition by agreement, 789. 
 
 potential competition, 790. 
 
 competition as a factor in rate making, 792. 
 
 competition as a justification for discrimination, 793. 
 
 incidents of competition, 794. 
 
 competitive rates must be compensatory, 796. 
 
 non-competitive rates must be reasonable, 795. 
 
 suppression of competition by consolidation, 802. 
 
 carrier may refuse to make competitive rates, 803. 
 
 2. Rates dictated by competition. 
 
 rates may be made to meet competition, 452. 
 competition as a factor in rate making, 453. 
 policy for permitting competitive rates, 454. 
 rates low enough to hold business, 465. 
 reduction below a remunerative basis, 456. 
 standard rate among competing lines, 467. 
 competition not a ground for raising rates, 458. 
 absence of competition does not justify increase, 459. 
 no obligation to meet competition, 460. 
 competition in passenger fares, 461. 
 
 3. Bates designed to equalize advantages. 
 
 operation of the principle of equalization, 462. 
 
 limitations upon the Commission, 463. 
 
 rates made from a commercial standpoint, 464. 
 
 rates should not equalize differences in value, 465. 
 
 carriers not obliged to equalize disadvantages, 466. 
 
 protection of natural advantage, 467. 
 
 no right to build artificial markets, 468. 
 
 no equalization of patrons, 469. 
 
 equalization of advantage as a factor, 470. 
 
 passenger fares slightly affected by this principle, 471. 
 
 4. What circumstances justify preferential rales. 
 
 creation of a market by preferential rates, 602. 
 
 equalizing manufactures in different localities, 603. 
 
 how the Commission determines justifiable discrimination, 799. 
 
 back freights may be lower than outward freights, 800. 
 
 public policy against all discrimination, 801. 
 
 substantial differences of condition, 803. 
 
 what differentials may be allowed, 804. 
 
 reconsignment arrangements and transit privileges, 805. 
 
 [1198 J 
 
Index 
 
 [References are to sections! 
 RATE POLICIES— Conttnued 
 
 no obligation to make preferential rates, 806. 
 such concessions forbidden by later cases, 676. 
 concessions to certain localities, 679. 
 
 RATE REASONABLENESS, 
 
 1. The schedule taken as a whole. 
 
 provisions of the Act, 210. 
 reasonableness of the schedule as a whole, 220. 
 tests of the reasonableness of a schedule, 221. 
 many elements to be taken into account, 222. 
 relation of a particular rate to a whole schedule, 223. 
 conclusions as to proportionate rate, 224. 
 company cannot make unreasonable rates, 225. 
 company cannot justify exorbitant profits, 226. 
 special circumstances affecting the particular rate, 227. 
 
 2. Particular rates considered separately. 
 
 provisions of the Act, 340. 
 reasonableness of the separate rates, 228. 
 schedule as a whole may throw light, 229. 
 bearing of tariff as a whole, 230. 
 rule of proportionality in sharing costs, 231. 
 average cost always modified, 232. 
 application of both tests necessary, 233. 
 service not worth usual amount, 234. 
 service of unusual value, 235. 
 
 3. Theories of rate making. 
 
 theories as to rate making, 381. 
 estimating cost of service, 382. 
 bases of commission action, 1038. 
 how rates are determined, 1036. 
 relative rates, 420. 
 the value of the service, 420. 
 the cost of service, 420. 
 weight, bulk, and convenience, 420. 
 the amount of the product, 420. 
 general public good, 420. 
 competition in traffic, 420. 
 proportionate rates, 421. 
 
 4. Testing rates by companion. 
 
 basis of reasonable rates, 1036. 
 
 what is economically desirable not the test, 1036. 
 
 general principles as to reasonableness, 443. 
 
 carrier entitled to reasonable compensation, 442. 
 
 significance of that phase at common law, 1037. 
 
 nature of the rate, 1040. 
 
 rates unreasonable in themselves, 445. 
 
 revenue per ton per mile, 595. 
 
 [ 1199 : 
 
Index 
 
 [References are to sections] 
 
 RATE REASONABLENESS— Co7i<mi/ed 
 how rate system is justified, 598. 
 establishing of proportional rates, 598. 
 
 RATE REGULATION, 
 
 1. Certmn limitations fundamental. 
 
 general principles governing reasonableness, 211. 
 rates must be fair to the company and to the public, 212. 
 limitations within which rates must be made, 213. 
 unreasonable regulation universally forbidden, 214. 
 value of the services constitutes minimum, 215. 
 interests of the companies to be considered, 216. 
 interests of the public to be considered, 217. 
 accommodation of the interests of both sought, 218. 
 the complexities of the general problem, 219. 
 
 2. Bases of regulation. 
 
 constitutional limitations upon Commission regulation, 236. 
 reasonable rates not necessarily profitable, 237. 
 when fair net earnings left, 238. 
 possibility of increase of business, 239. 
 making rates compared with levying taxes, 240. 
 governmental regulation best for all concerned, 241. 
 inherent diflSculties of accommodating all tests, 242. 
 conflicting authorities still persist, 243. 
 
 3. Powers of the Commission. 
 
 power to pass upon rates, 991. 
 
 Commission to determine rates, 1030. 
 
 orders of the Commission, 1031. 
 
 power to fix rates originally denied, 1032. 
 
 decision of the Supreme Court, 1033. 
 
 powers established by later amendments, 1034. 
 
 power under the Act to fix maximum rates, 1034. 
 
 adjustments to prevent discrimination, 1034. 
 
 no disturbance of reasonable rates, 1035. 
 
 4. Limitations upon the Commission. 
 
 jurisdictional limitations upon rate revision, 1037. 
 
 extent that jurisdiction has been confided, 1039. 
 
 working within legal bounds, 1038. 
 
 conditions affecting the movement of traffic, 1038. 
 
 how the Commission now views its function, 1039. 
 
 will not dictate as to the policies, 999, 1039. 
 
 rates which are reasonable in themselves, 1039. 
 
 its function is to administer, 1045. 
 
 only those matters which affect rating, 1047. 
 
 cannot fix minimum rates, 1034. 
 
 lATE STRUCTURE, 
 1. The unit of charge. 
 
 fixing the particular rate, 561, 
 
 [ 1200 ] 
 
Index 
 
 [References are to sectioiul 
 
 RATE STRUCTURE— Continued 
 
 characteristics of a rate, 562. 
 
 established unit prima facie reasonable, 563. 
 
 classification sheet not varied by representation, 564. 
 
 methods of charging in rate making, 565. 
 
 a minimum rate is justifiable, 566. 
 
 basis of minimum weights refund, 567. 
 
 charge for excess over minimum, 568. 
 
 2. Addilianal charges for special service. 
 
 general principles as to additional charges, 570. 
 
 propriety of making extra charges, 571. 
 
 freight should cover the entire transportation, 572. 
 
 no separate charge for a part of the transit, 573. 
 
 charges for services during transportation, 574. 
 
 services after carriage is ended, 575. 
 
 storage charges, 576. 
 
 demurrage costs, 577. 
 
 terminal charges usually absorbed, 578. 
 
 terminals regarded as connections, 579. 
 
 3. Distance rates and the lorv-mile. 
 
 mileage rate tends to decrease inversely, 580. 
 
 general standard of comparison the ton-mile, 581. 
 
 equal mileage rates impractical, 582. 
 
 rates in rough proportion to distance, 583. 
 
 construction of distance rates, 584. 
 
 bases of rate structure, 585. 
 
 different cost of haulage, 586. 
 
 divisions built through a difficult territory, 587. 
 
 factors modifying distance rates, 588. 
 
 comparison of through rates and local rates, 589. 
 
 carriage in opposite directions, 590. 
 
 4. Grouping stations and basing points. 
 
 distances considered in grouping, 593. 
 grouping must be reasonable, 594. 
 testing reasonableness of grouping, 595. 
 uniform rate to a group of stations, 596. 
 how basing points are established, 598. 
 whether basing points justified, 599. 
 determination of base rate, 600. 
 extent of power over grouping, 601. 
 
 RATE THEORIES, 
 
 1. Cost of service as the basis. 
 
 method of estimating cost of service, 382. 
 
 respect paid to the cost, 384. 
 
 cost of service the basic test, 385. 
 
 costs considered in determining reasonableness, 386. 
 
 limitation upon the law of increasing returns, 387. 
 
 76 [ 1201 ] 
 
Index 
 
 [References are to sections] 
 
 TE TEEOUIES—Continued 
 
 length of haul as a factor, 388. 
 volume of traffic as a factor, 390. 
 increased volume of traffic, 391. 
 
 2. Method of determining particular costs. 
 
 proper proportions of total costs, 392. 
 apportionment of separable costs, 393. 
 basis of the distribution, 395. 
 allocation of joint costs, 394. 
 basis of the proportion, 396. 
 average rate per unit of service, 397. 
 recognition of the ton-mile cost basis, 398. 
 ton-mUe cost basis not oppressive, 399. 
 
 3. Vahie as the basis. 
 
 rates based upon value, 431. 
 
 what the traffic wiU bear, 432. 
 
 essential defects in the principle, 433. 
 
 legal limitations peculiarly necessary, 434. 
 
 value of service to shipper, 435. 
 
 value of the goods, 436. 
 
 limit of value of service, 437. 
 
 traffic wiU continue to move at unfair rates, 438. 
 
 worth of the service to the owners, 439. 
 
 4. Comparison of these theories. 
 
 various theories as to rate making, 381. 
 
 all factors enter into a particular rate, 569. 
 
 distribution of the burden, 383. 
 
 modification of the principle, 389. 
 
 argument for permitting disproportionate rate, 400. 
 
 authorities opposed to disproportion, 401. 
 
 fuU extent of the doctrine, 411. 
 
 proportionate rates always legal, 410. 
 
 'RIGERATION, 
 refrigeration under the Act, 181. 
 precooling if found necessary, 181. 
 scheduling of refrigeration charge, 181. 
 private lines of refrigeration cars, 181. 
 icing as transportation, 82. 
 auxiliary service as refrigeration, 574. 
 refrigerator cars, 169. 
 refrigerator equipment, 933. 
 
 See Allowances. 
 iULATIONS, 
 rules and regulations, 815. 
 cannot rely upon unpublished practices, 820. 
 
 TEARING, 
 
 See Procedure. 
 [ 1202 ] 
 
RENEWALS, 
 
 RE-OPENING, 
 REORGANIZATION, 
 
 Index 
 
 [References are to sections] 
 
 See Operating Expenses. 
 See Procedure. 
 See Consolidation. 
 
 REPARATION, 
 
 provisions of the Act, 1030. 
 
 1. Right to reparation. 
 
 who entitled to reparation, 1098. 
 complainant asking only reparation, 1071. 
 made to the person actually daniagcil, 1{)!)8. 
 one who has actually paid, 1098. 
 as between consignor and consignee, 109'.), 
 a consignee who paid, 1099. 
 consignor usually the substantial party, 1099. 
 consignee who has paid charges, 1099. 
 conditions of granting reparation, 1101. 
 awarding of damages not necessary, 1104. 
 scrutiny of reparation agreements, IIO.'J. 
 when reparation will not be awarded, 1110. 
 when cause of action accrues, 1110. 
 
 2. Award of reparation. 
 
 reparation in connection with relief, 1041. 
 
 reparation awarded on account, 1040. 
 
 integral part of the system, 1041. 
 
 scrutiny of the transaction, 1048. 
 
 relief by awarding reparation, 105G. 
 
 bases of award by reparation, 1057. 
 
 reparation is divided in proportion, 10.'i7, 
 
 extent of the jurisdiction, 1058. 
 
 does not cover suits for damages generally, 1045. 
 
 damages from inability to compete, 1059. 
 
 damages from loss of contracts, 1059. 
 
 order of the Commission for payment, 1060. 
 
 reparation for improper charges, 824. 
 
 in first instance a shipper must pay, 824. 
 
 REPLACEMENTS, 
 
 See Betterments. 
 REPORTS, 
 
 what must be reported, 950. 
 
 who must make reports, 952. 
 
 REPRODUCTION OF PLANT, 
 
 See Capitalization. 
 
 RES ADJUDICATA, 
 
 See Procedure. 
 
 [ 1203 ] 
 
Index 
 
 [References are to sections] 
 
 RESTRAINT OF TRADE, 
 
 See Pooling. 
 RESTRICTED RATES, 
 
 See DiscniMiNATioN. 
 RULES, 
 
 See Regulations. 
 
 S 
 SALARIES, 
 
 See OpEEATiNG Expenses. 
 
 SCHEDULES OP RATES, 
 provisions of the Act, 810. 
 
 1. Requirement o/ published schedules. 
 
 provisions of the Act, 810. 
 
 scope of its policy, 811. 
 
 of whom filing required, 830. 
 
 what rates must be published, 812. 
 
 requirements relating to filing, 828. 
 
 schedules working changes in rates, 832. 
 
 effect of scheduling rates, 813. 
 
 published rates are the sole guide, 1048. 
 
 no less or different compensation, 1048. 
 
 terminal and transit charges, 814. 
 
 rules and regulations, 815. 
 
 publication of schedules, 810. 
 
 posting in station, 817. 
 
 posting distinguished from filing, 818. 
 
 2. Departure from published rates. 
 
 consequences of failing to file, 819. 
 any variation herefrom forbidden, 820. 
 devices to avoid the section, 821. 
 only scheduled rates legal, 822. 
 rate wars no excuse, 823. 
 reparation for improper charges, 824. 
 conclusive presumption of legality, 829. 
 provisions cannot have retroactive effect, 831. 
 invalidity of varied rate, 833. 
 effect of invalidity on contract, 834. 
 stipulations in bills of lading, 835. 
 certain technical points discussed, 825. 
 
 3. Joint tariffs and schedules. 
 
 meaning of joint tariff, 836. 
 
 making and filing jointly, 837. 
 
 what particulars must be published, 838. 
 
 rates based upon combinations, 839. 
 
 what combinations are justified, 840. 
 
 whether export rates must be filed, 841. 
 
 [ 1204 ] 
 
Index 
 
 [References are to sections] 
 SCHEDULES OF RATES— Cmtinued 
 
 divisions and proportional rates, 842. 
 parties liable to prosecution, 843. 
 criminal liability for violation, 826. 
 essentials of the crime, 827. 
 4. Form of schedules required. 
 clearness of statement, 844. 
 necessary fullness of statement, 845. 
 methods of stating rates, 846. 
 requirement of the Commission, 847. 
 consequences of indefinite tariffs, 848. 
 all pertinent conditions requisite, 849. 
 rules for construing schedules, 850. 
 specific ratings overrule general, 851. 
 effect of misquoted rate, 1049. 
 recovery of scheduled rates, 1050. 
 State courts deprived of jurisdiction, 1051. 
 scheduled i-ates conclusive in all courts, 1052. 
 departure from publishing rate, 628. 
 sanctity of the scheduled rate, 629. 
 
 SCIENTIFIC MANAGEMENT, 
 
 See Operating Expenses. 
 SHERMAN ACT, 
 
 See Pooling. 
 SHIPPER, 
 
 See Parties. 
 SIDINGS, 
 
 See Spurs. 
 SINKING FUND, 
 
 payment into, 368, 
 
 See Depreciation. 
 SLEEPING CARS, 
 
 sleeping cars under the Act, 167. 
 sleeping car not common carrier, 78. 
 provision of sleeping cars, 167. 
 arrangements for sleeping car, 167. 
 
 SPUR TRACKS, 
 
 provisions of the Act, 910. 
 
 spur track, 196. 
 
 private spurs, 190. 
 
 industrial spur, 196. 
 
 private siding, 190. 
 
 spurs within the Act, 160. 
 
 connection by spur tracks, 92. 
 
 service at private sidings, 924. 
 
 installing switches now under the Act, 925. 
 
 according a terminal switch, 177. 
 
 [ 1205 ] 
 
Index 
 
 [References are to sections] 
 
 SPUR TRACKS— Continusd 
 
 basis for ordering switch connection, 926. 
 spur track for a private customer, 925. 
 
 STATE COMMISSIONS, 
 
 See HiSTOHY of Statutory Regulation. 
 STATIONS, 
 
 See Facilities. 
 STATUTES, 
 
 See History of Statutory Regulation. 
 
 STAY OF PROCEEDINGS, 
 
 See Procedure. 
 STEAMBOATS, 
 
 See Water Carriers. 
 STOCKS, 
 
 provisions of the Act, 250. 
 
 stock issued in lieu of cash, 270. 
 
 market value of stock, 266. 
 
 stock issues often deceptive, 264. 
 
 nominal capitalization, 263. 
 
 capitalization outstanding, 262. 
 
 basis of issuing stocks, 250. 
 
 STOCKYARDS, 
 
 delivery at a private stockyard, 192. 
 charged yardage for the service, 578. 
 arrangements with stockyards, 923. 
 carriers may divide their rates, 579. 
 
 STORAGE, 
 
 storage under the Act, 183. 
 independent storage of commodities, 183. 
 charges must be scheduled, 811. 
 storage charges, 576. 
 usual price for warehousing, 576. 
 
 STREET RAILWAYS, 
 
 street railways not under Act, 165. 
 
 interurban lines under the Act, 165. 
 
 electric railway that does not transport freiKht, 165. 
 
 those that use steam, 165. 
 
 SUSPENSION OF RATE ADVANCES, 
 history of the power, 89. 
 burden to justify advances, 1123. 
 
 SWITCHING, 
 
 switching under the Act, 160. 
 include delivery only on a carrier's own rails, 177. 
 undertaking delivery within switching limits, 177. 
 foreign line switching, 177. 
 
 [ 1206 ] 
 
Index 
 
 [References are to sectionsi 
 SWITCHING— Continued 
 
 switching arrangements with another, 177. 
 
 switching movements over industrial tracks, 196. 
 
 limits of the line carrier, 196. 
 
 connecting lines, 915. 
 
 switching allowances, 85. 
 
 reciprocal switching, 822. 
 
 switching charge however fair, 176. 
 
 See Facilities, Allowances. 
 
 TANK CARS, 
 
 tank car line, 169. 
 tank cars, 933. 
 
 TAP LINES, 
 
 branch line, 190. 
 
 public branch, 190. 
 
 tap line, 194. 
 
 arrangements with trunk lines, 193. 
 
 tap line or a plant facility, 195. 
 
 TARIFFS, 
 
 See Schedules. 
 TAXES, 
 
 See Operating Expenses, Accounts. 
 TELEGRAPH, 
 
 telegraph a public service, 22. 
 
 telegraphing a public calling, 86. 
 
 cable companies, 161. 
 
 telegraph, 161. 
 
 whether wire or wireless, 171. 
 
 telegraph lines, under the Act, 171. 
 
 special rates for day, night, repeated, unrepeated, 210. 
 
 message to a connecting point, 866. 
 
 telegraph company receiving message, 867. 
 
 TELEPHONE, 
 
 telephone a public service, 86. 
 the telephone a public necessity, 172. 
 telephone service subject to the Act, 172. 
 telephone used to deliver, 865. 
 
 TERMINALS, 
 
 terminals under the Act, 176. 
 
 the terminals of a railroad, 176. 
 
 purpose of furnishing terminal facilities, 175. 
 
 terminal part of the system, 175. 
 
 may voluntarily open their terminals, 176. 
 
 [ 1207 ] 
 
Index 
 
 [References are to sections] 
 
 TEKMlNAhS-— Continued 
 
 offering a terminal service, 176. 
 
 cannot close any of its trackage, 116. 
 
 protection of its terminals, 929. 
 
 cannot be required to open, 929. 
 
 distinctions between terminal situations, 886. 
 
 terminal charge, 811. 
 
 terminal services, 589. 
 
 terminal allowances, 743. 
 
 terminal usually included, 578. 
 
 terminals as connections, 579. 
 
 "terminal facilities" as defined, 885. 
 
 TESTIMONY, 
 
 See Evidence. 
 THROUGH ROUTING, 
 
 See Connecting Carriage, Joint Rates. 
 TICKETS, 
 
 See Passenger Carriage. 
 TON-MILE. 
 
 the ton-mile cost basis, 398. 
 ton-mile basis is not oppressive, 399. 
 high average ton-mile revenue, 405. 
 ton-mile cost basis, 397. 
 ton-mile diminishes with haul, 389. 
 ton-mile statistics, 409. 
 establishment of a ton-mile rate, 232. 
 See Cost. 
 TRAINLOADS, 
 
 whether different classification for, 536. 
 whether lower rate for, 725. 
 
 TRANSFER, 
 
 transfer in transit, 82. 
 
 common-carrier transfer, 179. 
 
 granting free transfer service, 177. 
 
 undertaking delivery by wagon, 179. 
 
 allowance for cartage to one, 179. 
 
 exclusive arrangements with one concern, 179. 
 
 transfer company as connecting carrier, 865. 
 
 TRANSIT PRIVILEGES, 
 
 extent of transit privileges, 742. 
 policing of transit privileges, 879. 
 certain transit privileges described, 184. 
 privilege of concentration, 742. 
 rates to those who ship, 744. 
 reshipping at the legal rate, 846. 
 reconsignment in transit, 805. 
 
 [ 1208 ] 
 
Index 
 
 [References are to sectionfi] 
 
 TRANSIT PRIVILEGES— ConWnMed 
 reshipping rate, 880. 
 where a transit privilege, 698. 
 bagging in transit, 184. 
 mining in transit, 184. 
 compression service, 742. 
 "floating cotton," 879. 
 
 TRANSPORTATION SERVICES, 
 
 See Interstate Carriers. 
 
 U 
 UNDUE PREFERENCE, 
 
 See Discriminations. 
 UNION STATIONS, 
 
 See Terminals. 
 UNJUST RATES, 
 
 See Rates. 
 
 UNREASONABLENESS OF RATES, 
 
 See Rates. 
 
 V 
 VALUATION, 
 
 provisions of the Act, 250. 
 tests of the Supreme Court, 968. 
 inquiries of the Congress, 969. 
 investigations of the Commission, 970. 
 necessity for official valuations, 971. 
 valuation based upon investment, 972. 
 present value as the basis, 973. 
 market values should be considered, 974. 
 consideration given to the entrepreneur, 975. 
 details of the present valuation, 976. 
 finality of this valuation, 977. 
 unit prices, 295. 
 overhead charges, 294. 
 valuation of utilized realty, 284. 
 treatment of unearned increment, 283. 
 governmental valuations, 282. 
 
 See Capitalization. 
 
 VALUE AS BASIS OF RATES, 
 rates based upon value, 431. 
 "what the traffic will bear," 431. 
 concessions to the low grade, 432. 
 legal limitations peculiarly necessary, 434. 
 value of service to shipper, 435. 
 
 [ 1209 ] 
 
Index 
 
 [References are to sections] 
 
 VALUE AS BASIS OF RATES—Continued 
 value of the goods carried, 436. 
 graduation of rates scheduled, 436. 
 reasonable relation to the cost, 437. 
 worth of the service to the owners, 439. 
 
 See Rate Bases. 
 
 W 
 
 WAGES, 
 
 See Operating Expenses, Accounts. 
 
 WATER CARRIERS, 
 
 steamboats as common carriers, 16. 
 
 combined rail-and-water routes, 113. 
 
 rail and water line under the Act, 92. 
 
 water carriers not within the Act unless so operated, 71. 
 
 regulation of water Mnes as yet, 163. 
 
 water business not subject to the jurisdiction, 163. 
 
 when steamship companies under the Act, 163. 
 
 WHARF, 
 
 public character of wharves, 6. 
 
 public or private dock, 178. 
 
 docks of a water carrier, 92. 
 
 dock facilities for receiving, 175. 
 
 wharves as landings, 189. 
 
 wharves used in interstate commerce, 175. 
 
 rates apply via own docks, 175. 
 
 WHAT TRAFFIC WILL BEAR, 
 what the traffic will bear, 432. 
 essential defects in the principle, 433. 
 traffic will continue to move at unfair rates, 438. 
 argument for permitting disproportionate rates, 400. 
 making rates compared with levying taxes, 240. 
 charging what the traffic will bear, 243. 
 
 WITNESSES, 
 
 See Evidence. 
 
 [1210] 
 
KF 2^k B36 1915 
 
 Author Vol. 
 
 Be ale, Joseph Henry 
 
 Title - Copy 
 
 R.R. Rate Regulation. 
 
 T