never, in a single month, showed a return, which, calculated on a yearly basis, represented more than 5.4 per cent on the value of the property as fixed in the Increased Rate Case. In January and February, 1921, there was an actual deficit and the total return for the year was 3.31 per cent. The law fixed 52 per cent as a fair rate of return until March, 1922, and permitted an allowance of an additional 12 per cent for additions and betterments. Under the circumstances, this extra 12 per cent meant nothing.

The rule of rate making, however, meets the problem only in general terms. It is concerned with the level of rates, not with the small group of individual charges which create the business problems for the average user of railroad service. Nor does it supersede the general requirement of the law that individual rates must be reasonable. The amendment of 1920 frankly recognized the dual problems involved in fixing railroad rates. The rule of rate making alone is inadequate. The Commission was therefore granted "reasonable latitude to modify or adjust any particular rate" found unjust or unreasonable. This grant of power, a reiteration of a basic principle of the Act, completes the control of rates by the Commission. Its responsibility includes the securing of an adequate return to the owners of a railroad; and it may direct how individual rates shall be modified, fixing either maximum, minimum or absolute rates, to be established in place. of those condemned as unreasonable or unjustly discriminatory.

The Commission has not sought to revamp the entire rate structure in accordance with a prearranged scheme. Instead it has accepted the fundamentals of the existing adjustment built up by competition, modifying only such details as necessary to create a "reasonable" and "non-discriminatory" adjustment. This, after all, constitutes its important responsibility. The prophecy of those who opposed the granting of the rate making power was that the former policy would prevail; that there would follow an overturning of long established relationships with resultant uncertainty in business. Happily, the prophets of calamity were wrong. Whoever has a responsibility is much more conservative than is he who has no responsibility. The Commission, since 1906, has recognized that changes in the existing

Ex Parte 74, Increased Rates, 1920, 58 I. C. C. 220; Reduced Rates, 1922, 68 I. C. C. 676, 687.

rate structure must be made only after survey of the situation as a whole. The general character of the rate structure has been maintained. Changes have been made only to correct unreasonableness, or unjust discrimination, and only to the extent necessary to secure the end sought.

CHAPTER VI

THE PUBLISHED RATE

Section 1. The Publication Principle, 70-Sec. 2. Publication Rules, 71-Sec. 3. The Pass Problem, 73-Sec. 4. False Billing, 75-Sec. 5. "Beating the Rate," 76-Sec. 6. Legal Allowances, 78-Sec. 7. Industrial Railroads and Tap Lines, 80.

§ 1. A contract for railroad transportation differs from other contracts for the purchase and sale of service in that the terms of the contract must be generally known. There can be no convenient cloak of "business secrets" behind which to hide price discriminations, rebates, "free deals" or long extended credits.' With the passage of the Interstate Commerce Act in 1887, it became unlawful to charge either a greater or less compensation for the transportation of passengers or freight, or for services in connection therewith, than the rate contained in the published tariff filed with the Commission. The purpose of this requirement is to provide a standard of charge binding alike on carrier

1 Following exposure of discrimination arising from the extension of credit to favored shippers for unduly long periods, the amendment of 1920 provided that no railroad should deliver or relinquish possession at destination of any freight transported by it until all tariff rates and charges thereon had been paid, except under such rules and regulations as the Commission might from time to time prescribe to assure prompt payment of all such rates and charges and to prevent unjust discrimination. Regulations for Payments of Rates and Charges, 57 I. C. C. 591, 63 I. C. C. 375.

In 1914 it was disclosed that the O'Gara Coal Co. had owed approximately $25,000 to the Chicago, Indiana & Southern for freight charges acIcruing in 1907, the amount having been paid off in installments, together with some $17,000 owed the Lake Shore, the debt being finally paid off in the latter part of 1911. No interest was charged and no security had been required. Coal and Oil Investigation, 31 I. C. C. 193, 235; see also Hocking Valley R. R. Co. v. U. S., 210 Fed. 735.

In P. C. C. & St. L. Ry. Co. v. Fink, 250 U. S. 577, it was even held that the consignee of an interstate shipment is liable to the carrier, under the equal rates requirement of the Interstate Commerce Act, for the difference between the freight charges erroneously specified in the way bill and paid by the consignee upon receipt of the goods, and the larger amount due under the applicable published rates, although the consignee, by virtue of his agreement with the consignor, did not become the owner of the goods until after delivery.

and shipper, and open to the inspection of all concerned. To the extent that the transportation charge enters into the analysis of business competitors, its importance can, therefore, be calculated in advance, and can be generally appraised. "Any shipper can, with his head and pencil, figure out from the tariff sheets just what the rate is both for himself and for his competitors." 1 Without requirement that rates be made public, and provision that they be subject to alteration only on proper notice, it would be practically impossible to prevent discrimination. The publication clauses of the Act are the business man's protection against favoritism to his competitors, just as the reasonableness clause, and the rule of rate making, are his protection against extortion. They recognize his interest in his competitor's freight rates.

Adherence to the published rate, and the obligation to collect and pay that rate, sometimes place a real hardship on the user of the railroad service. If he depends upon the railroad employee for a rate quotation as the basis of a bid, including price at point of delivery, and is quoted an incorrect rate, the error cannot be "protected." The loss, if loss ensues, must be absorbed. The recourse which the law provides is attack upon the reasonableness of the rate charged and a plea for reparation. It is a situation analogous to that in which ignorance of the law is no excuse. To admit error as ground for permitting departure from the legal rate would throw down the bars. The published rate must be paid and collected.3

§ 2. For rates to be legal, then, they must be published and filed with the Commission. And they must be published in tariffs which conform to the regulations prescribed by the Com

1 Chicago & Alton R. R. Co. v. U. S., 156 Fed. 558, 563.

Taylor . Director General, 61 I. C. C. 109. The Supreme Court has held that posting is not essential to make rates legally operative. It is required only as a means of affording special facilities to the public for ascertaining the rates actually in effect. T. & P. Ry. Co. v. Cisco Oil Mill, 204 U. S. 449; Kansas City Southern Ry. Co. v. Albers, 223 U. S. 573; I. C. R. R. Co. v. Henderson Elevator Co., 226 U. S. 441.

'An interesting case was carried to the Commission because of the refusal to accept certain shipments tendered for transportation after the close of business on the day before increased rates went into effect. The contention of the carrier that higher freight charges should be assessed was upheld by the Commission, Transcontinental Freight Co. v. Director General, 62 I. C. C. 127.

Occasionally it develops that rates not on file with the Commission are being used in error as a basis of charging for portions of interstate journeys. See reference to the testimony of the Traffic Manager of the Alabama, Ten

mission. The tariff publications are standardized in size and arrangement, and ample in their statements of service and charges. The amending act of 1889 first empowered the Commission to fix the form of tariffs, but uniform or general instructions were not enforced until 1894. These have, from time to time, been modified. Until these rules were adopted, the multiplicity of tariffs, the possible ambiguity of their language, and their faulty construction often combined to defeat the purpose of the act. It was seldom easy-especially for the man not technically trained to determine just what constituted the rate lawfully in effect. It is sometimes difficult enough even now. And, furthermore, in the event of contradiction or ambiguity, it was not always possible to establish responsibility for the publication of rates involving participation by more than one carrier. The originating carrier might have published the tariff, without indicating the participating carriers, and without proof of their concurrence. The latter, therefore, avoided liability, if charged with violating the Act, by denial of the existence of the rate, or consent to its publication. It was necessary to establish rules of general application in order to fix the responsibility on the carriers.

The tariff publication rules of the Commission, which, to the layman, might, at first, seem to go into needless detail, therefore have a dual purpose. They fix the basis of responsibility for publication and concurrence, an essential element in control over rates and charges; and they aim to create rate schedules which are clear, brief, and complete-free from ambiguity. If the rules go into infinite detail, it is because the railroad business is a business of infinite detail, and it is better for the untrained user of the railroad tariff to consult uniform schedules rather than a confusing variety of miscellaneous issues. The preparation and enforcement of detailed rules has furthermore served another and allied purpose. Whenever rules are worth making in the first place, every reasonable step must be taken to insure compliance with the rules. Economy in checking demands uniformity in compilation. It is required in every well managed private business; it is an essential part of the machinery of regulation. Prompt nessee & Northern, and the Commission's comment: "Such a practice was, and if persisted in, is illegal, because contrary to the applicable tariff on file with us." Meridian Traffic Bureau v. Southern Ry. Co., 60 I. C. C. 5, 8.