tributing centres; but no interference has been attempted where small towns get rates as favorable as the larger ones;1 and the equalization 2 of rates between small and large towns to do away with former special favors does not constitute a ground for complaint.3

The Question of Rates. The kernel of the railway problem is the question of rates. Few topics of importance in finance or administration or any other phase of railway transportation can be investigated without sooner or later touching upon rates as the decisive consideration. Upon no subject has the Commission rendered so many decisions as upon this. A long line of cases has arisen directly out of the general question of reasonable rates; another out of discrimination in rates; others, and some of the most important, out of questions connected with exports and imports; and about a dozen groups of decisions or parts of decisions deal with commodity rates and rates on special articles.

The terms "reasonable and just," "unreasonable or unjust," "undue or unreasonable preference or advantage," "undue or unreasonable prejudice or disadvantage in any respect whatsoever," and "unjust discrimination," as used in the act to regulate commerce, imply comparison, and rates to be law

8 The manner in which the decisions quoted on preceding pages have been modified by the courts will be discussed in the two following chapters.

ful must bear just relations to one another.1 Rates must be relatively fair and reasonable as between localities similarly situated in essential respects, not according to any rule of mathematical precision, but in substance and in fact, having regard to the geographical and relative positions of the localities, so that one will not be favored to the unjust prejudice of the other.2 Attempts to maintain trade relations, to protect competing markets, to equalize commercial conditions, and analogous considerations cannot justify unreasonable rates.3 Low charges on one line cannot be made up by high charges on others, and all charges should have a reasonable relation to cost of production and to the value of the service to the producer and shipper, but should not be so low on any as to impose a burden on other traffic. The length and character of the haul, the cost of service, the volume of business, the condition of competition, the storage capacity, and the geographical situation at the different terminal points are all elements of importance bearing upon the relative reasonableness of the respective charges for transportation.5 That rates should be fixed, says the Commission, in inverse proportion to the natural advantages of competing towns with the view of equalizing commercial conditions, is a proposition unsupported by law and quite at variance with every

consideration of justice.1 Each community is entitled to the benefits arising from its location and natural conditions. Equality of charge is required under circumstances and conditions substantially similar, and relative equality is necessary in the degree of similarity.2 The degree of similarity 3 is determined by all the circumstances entering into the case, and not solely by one standard of comparison.

It is quite impossible to separate questions relating to reasonable rates, discriminations, through rates, etc., from one another. Yet the subject of discriminations has given rise to more controversy and legislation than, perhaps, any dozen other railway topics, and at least brief separate treatment must be accorded to it. In the popular mind discrimination means unjust discrimination, and to the eyes of most legislators all discriminations are unjust. But the well-known illustration of the Delaware oyster town, showing the necessity and justice of discriminations under peculiar circumstances, could be duplicated many times. While all discriminations. against individuals, for like and contemporaneous services rendered under "similar circumstances and conditions," are unjust, discriminations against localities may be unavoidable and even just. Sixteen state constitutions and the laws of threefourths of the states prohibit all discriminations.5 8 I. 436.

11. 215; 5. 264; 7. 180.

2

4. 79.

4 Hadley, Railroad Transportation, p. 116. 5 Part II, ch. III.

The Interstate Commerce Act prohibits and declares unlawful unjust discriminations, thus reserving to the Commission discretionary administrative powers in case of discriminations which, to that body, do not appear to be unjust. While every community is entitled to the benefits arising from its location and natural conditions,1 and the Commission is not authorized to grant special privileges,2 it may nevertheless permit preferences among localities when sufficient cause exists, and these preferences are not undue.

4

Among the forms of discrimination pronounced unlawful by the Commission are the following: illegitimate use of private cars or cars not owned by the railway company; discounts based on quantity of freight received by a single shipper,5 or excessive differences in rates on car-load and less than car-load shipments; combination rates favoring the knowing shipper;7 mileage tickets not sold impartially; refusal to carry goods over the route directed by the shipper, and directing traffic arbitrarily without good reasons; employment 10 of ticket brokers to sell tickets at reduced rates on commission; party rates lower than contemporaneous rates for single passengers; 11 lower rates 12 from an important centre and not correspondingly lower

66

rates from intermediate points, giving certain shippers exclusive rights over station facilities; the expense bill" system; carrying to terminal points at commodity rates an article which, if the class. rate were imposed, would still seek rail rather than water transportation; and that large class involving rebates in their various forms, excessive charges, etc.

Certain things have been pronounced by the Commission as not constituting unjust discrimination the sale of two tickets for passage, one of which the company permits to be transferred and the other not, when the two do not appear to be similar;1 a contract by a railway company for through shipments with one of several competing steamship companies; 2 a low rate for returning oil-tank cars,3 filled with cotton-seed oil and turpentine; absorbing a terminal charge on live stock in one market and exacting such a charge for terminal service in another city which is reached by a different line; charging equal rates on milk for all points on a milk-train line; 5 separation of white and colored passengers paying the same fare, when accompanied by the same care and protection; 6 making rates for immigrants as a class;7 and finally, when an article of traffic does not move on

1 I. 144.

4

24. 265.

8

5. 193.

4

7. 513.

5 2. 272. In the important case, 7. 92, a blanket rate on milk from certain New York points was held to be unjust; also stated differences in the rates on milk in cans and in bottles.

63. 111; 1. 428.

7 2. 271.