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 transporting 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."7 $549. Discrimination between commodities forbidden. In determining whether there is a discrimination between 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 production, extent and nature of the competition in the business itself and by other transportation lines, and the interests of the public 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. 10 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 7 See also Harvard Co. v. Pennsylvania Co., 3 Int. Com. Rep. 257, 4 I. C. C. Rep. 212. There should be a definite relation between live hogs and products thereof based upon transportation conditions. Sinclair & Co. v. C., M. & St. P. Ry., 21 I. C. C. 490. 8 Imperial Coal Co. v. Pittsburgh & L. E. R. R., 2 Int. Com. Rep. 436, 2 I. C. C. 618; F. Schumacher 'Chicago L. S. Exch. v. Chicago G. W. Ry., 10 I. C. C. Rep. 428. 10 Miner v. New York, N. H. & H. R. R., 11 I. C. C. Rep. 422. 11 Re Export and Domestic Rates on Grain, 8 I. C. C. Rep. 214. apply to both class and commodity rates. 12 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. And the principle to be deduced from all the cases which have just been discussed is plainly that the differences in rates between the classes in a classification should not be disproportionate, and of this the rate maker should never lose sight. § 550. Difference between values justifies different classification. 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 exceeding 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 therefore the same rate, as flour, values alone being considered? 13 It is a conceded rule of classification that value, on account of enhanced risk and ability to pay a greater proportion 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." upon the same principle, when it was claimed that a different 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 12 Chamber of Commerce of New York v. N. Y. C. & H. R. R. Co., 24 I. C. C. 674, 677. And 13 McDill, Com., in Schumacher Milling Co. v. Chicago, R. I. & P. R. R., 6 I. C. C. Rep. 61. forms a proper consideration to be taken into the account in the establishment of a rate, and justified the difference because of the great difference in value between milk and cream.14 § 551. Relative differences between ratings. 17 The Commission has feared that to apply the same percentage relation in class rates in every part of the country would create confusion and discrimination, instead of securing uniformity and equal treatment.15 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.16 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. 18 Although a very considerable spread is allowed, the difference in rate between carload L. C. L. should not be too wide. 19 And the less-than-carload rate should bear a reasonable and proper relation to the carload rate. 20 Very often the facts do not warrant fixing of carload rates solely on the basis of given percentages of L. C. L. rate. 21 Indeed, because of the long-continued practice of the carriers to which the commerce of the country had adjusted itself, the Commission 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.22 In establishing a proper relation between the carload and 14 Howell v. New York, L. E. & W. R. R., 2 Int. Com. Rep. 162, 2 I. C. C. Rep. 272. 15 Iowa State Board of R. R. Com'rs v. A. E. R. R., 28 I. C. C. 563. 16 Mutual Rice Trade & Development Ass'n v. I. & G. N. R. R., 23 I. C. C. 219. 17 Wheeling Corrugating Co. V. B. & O. R. R., 18 I. C. C. 125. 18 Iowa State Board of R. R. Com'rs v. A. E. R. R., 28 I. C. C. 193. 19 Virginia-Carolina Chemical Co. v. St. Louis, I. M. & So., 18 I. C. C. 1. 20 Hood & Sons v. Del. & Hud. Co., 17 I. C. C. 15. 21 In re Advances on Milk, 23 I. C. C. R. 500. 22 Carstens Packing Co. v. O. S. L. R. R., 17 I. C. C. 324. less-than-carload ratings consideration should be given the demands upon the terminal properties. 23 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 pounds.24 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. 25 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. 26 23 Western Classification Case, 25 I. C. C. 442. 24 Kleibacker v. L. & N. R. R. Co., 22 I. C. C. 420. 25 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 classified respectively considered in determining reasonableness of rates. Meridian Fertilizer Factory v. T. & P. Ry., 26 I. C. C. 351. 26 The Commission, subject to review by the courts only if it has acted with outrageous disregard for the conditions with which it is dealing, 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 disturbed. Schmidt & Sons v. M. C. R. R., 23 I. C. C. 684. CHAPTER XII 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 Special Service § 570. General principles as to additional charges. 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 § 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. |