ditions, 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 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 classification of a single article to be carried in carload lots." 1

§ 1392. Difference in commodity rates.

As in the making 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 altogether. In a recent case a railroad was complained of for making its rate on live cattle higher than that on dressed beef. Making the rate on the raw material proportionately lower than on the finished product, seems to some economists most necessary; but the Supreme Court of the United States said: 2 "It is insisted that the making of the livestock rate higher than the product rate is violative of the almost universal rule that the rates on raw material shall not be higher than on the manufactured product. This may be conceded, but that the rule is not universal the proposition itself

1 Until recently the Interstate Commerce Commission had no power to fix a rate by insisting upon a certain classification. Interstate Commerce Commission v. Lake Shore & M. S. Ry. Co., 134 Fed. 942 (1905). Sustained in 202 U. S.

613, 50 L. ed. 1171, 26 Sup. Ct. 776 (1906).

2 Interstate Commerce Commission v. Chicago Gt. Western Ry. Co., 209 U. S. 108, 52 L. ed. 705, 28 Sup. Ct. 000 (1909), reversing 141 Fed. 1041 (1905).

recognizes, and the findings of the court give satisfactory reasons for the exception here shown. The cost of carriage, the risk of injury, the larger amount which the companies are called upon to pay out in damages make sufficient explanation. They do away with the idea that in the relation established between the two kinds of charges any undue or unreasonable preference was intended or secured."

§ 1393. Rates vary with values.

1

That rates may differ to a considerable extent as values differ is within this general theory that rates should be proportional. This was brought out clearly some time since by a ruling of the Interstate Commerce Commission that it was not reasonable for a railroad to make a higher rate for window shades than for the holland cloth from which they were made. But the Federal court refused to accede to this, Mr. Justice Wallace saying: "The order of the interstate commerce commission which the court is now asked to enforce prohibits the railway carriers, the parties respondent, from charging any greater compensation for the transportation of window shades of any description-whether the cheap article worth $3 per dozen, or the hand-decorated article worth $10 per pair-than the third-class rate charged for the transportation of the materials used in making window shades. Such an order, in my judgment, ignores the element of the value of the service in fixing the reasonable compensation of the carrier, and denies him any remuneration for additional risk. I cannot regard it as justifiable upon principle, and must refuse to enforce it. The petition is dismissed."

§ 1394. Improper to equalize values.

To admit that a difference in rates may be made by

1 Interstate Commerce Commis

sion v. Delaware, L. & W. Ry. Co., 64 Fed. 723 (1894).

reason of difference in value is not to permit that difference to be made so great as to equalize the difference in value in the ultimate market of the commodities carried. The Interstate Commerce Commission having adopted that policy, in a recent proceeding the Federal court set aside their order saying: "The similarity of circumstances and conditions under which a service of carriage is rendered, which under the interstate commerce act, requires an equality of rate, relates to the circumstances and conditions which affect the service only, and, where different coal mining localities are grouped into a district for rate-making purposes a 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 because the difference 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."

§ 1395. Policy against all discrimination.

As has been seen, the authorities upon these questions are a seething mass. The various commissions which are near to actual conditions seem to show a tendency to condemn the fixing of the differing rates between localities solely by economic principles of demand and supply, the unequal and unjust results of which the courts are apparently too far removed from the vital facts to realize or appreciate. But even in the courts a reaction seems to be at hand. It is not enough to say that this power to make preferential rates may be used for the benefit of its territory as a whole, the fact remains that it is a power which may be abused. So long as this power is left in

1 Philadelphia & R. Ry. Co. v.

Interstate Commerce Commission, 174 Fed. 687 (1909).

the hands of the railway management without power of review by any authority upon any fundamental principle, it is in the hands of the railroad officials to build up an artificial market where the natural conditions are adverse, or to turn an industrious city into a wilderness again. It is believed that these are too great powers to intrust to private hands without governmental control based upon some recognized standards. Indeed the public law in this, as in the other cases, should put sufficient limitations upon any business policy, however profitable, which comes in conflict with the fundamental principle of equal service to all applicants. And it seems that there can be violation of this principle by disproportionate rates in different services as well as by discrimination in the same service.

§ 1396. Relative discrimination inconsistent with public duty.

It is submitted, therefore, 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. A lawyer who saw no visions then would have relied upon the fact that by the weight of authority there was no law whatever against discrimination as such. Provided each applicant for the same service was quoted a rate reasonable 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, very probably by the weight of authority, there is no law against dis

proportion as such. Provided each applicant 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 public service law that a rule against disproportion as such may eventually be recognized, despite the fact that it might interfere with the business policies of the public companies even more than the present rule against outright discrimination has done. For it seems plain to the writer that the same principles which forbid any differences when the conditions are the same, should prohibit disproportionate differences when the conditions are different.