[37] How great a return should be allowed.

See also ante, notes [32], [33]; post, note [51].

A railway ought to be allowed to accumulate, in some form, a surplus during prosperous years which may tide over subsequent years not so prosperous.—Matter of Proposed Advances in Freight Rates, 9 Inters. Com. R. 382.

Transportation charges should be liberal until the earnings are fully sufficient for a fair return on actual investment, but this does not justify maintenance of grossly discriminative rates, no matter how long they have been maintained.- Cary v. Eureka Springs R. Co., 7 Inters. Com. R. 286.

The rates on the great staples should be so low as to allow only a very moderate profit to the carrier.-In re Excessive Rates on Food Products, 3 Inters. Com. R. 93, 4 I. C. C. R. 48.

If a railroad was built and operated wisely and economically, if it is located where public need requires it, where there is business to justify its existence, and constructed so as to be fit and well adapted for the business which it aims to accommodate, it should be entitled to return as good interest on the cost of the reproduction of the road as capital invested in the average of other lines of enterprise, with due regard to the general prosperity or business depressions.- Steenerson v. Gt. Northern R. Co., 69 Minn. 353, 72 N. W. 713.

[38] Matters considered in determining as to reasonableness of rates In general.

Matters to be considered in determining whether switch connections will be ordered,- see ante, § 27, note [5].

Determination of proper classifications,- see ante, § 28, notes [32]

[34].

Construction of classifications sheets,- see ante, § 28, note [37]. Determination of comparative reasonableness of rates,—see also ante, § 31, notes [25]-[31].

Contracts between carriers and shippers relevant in determining as to comparative reasonableness of rates,- see ante, § 31, note [30]. Relations between carrier and shipper relevant in determining as to comparative reasonableness of rates,- see ante, § 31, note [30]. Dissimilarity of circumstances and conditions as justifying disparities in rates,- see ante, § 31, notes [32]-[56].

Exclusive patronage of shipper as justifying giving of discriminatory rate, see ante, § 31, note [46].

Orders of military authorities as justification for discriminations,- see ante, § 31, note [53].

Direction of movement of traffic as excusing discriminatory rates,— see

ante, § 31, note [55].

Consideration of extent of patronage in determining whether there is unjust discrimination in furnishing facilities,- see ante, § 32, note [17].

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, and also practical, being based in a principle similar to that underlying taxation. -Interst. Com. Commission v. B. & O. R. Co., 43 Fed. 37; affd. 145 U. S. 263, 12 Sup. Ct. R. (U. S.) 844. (2) The cost of service to the carrier. This is an ideal theory, but not practical. Such cost cannot be ascertained accurately enough to make is controlling.- Western U. Tel Co. v. Call Co., 181 U. S. 92, 21 Sup. Ct. R. (U. S.) 561; Interst. Com. Commission v. Detroit, G. H. & M. R. Co., 167 U. S. 633, 17 Sup. Ct. R. (U. S.) 986, affg. s. c. 74 Fed. 803, revg. s. c. 57 Fed. 1005; Interst. Com. Commission v. B. & O. R. Co., supra; Ransome v. Eastern R. Co., (1857) 1 C. B., N. S. (Eng.) 437. (3) Weight, bulk and convenience of the transportation. (4) The amount of the product or commodity in the hands of a few persons to ship or compete for, recognizing the principle of selling cheaper at wholesale than at retail.-Interst. Com. Commission v. B. & O. R. Co., 145 U. S. 263, 12 Sup. Ct. R. (U. S.) 844, affg. s. c. 43 Fed. 37. (5) General public good, including good to the shipper, the railroad company, and the different localities.- Interst. Com. Commission v. B. & O. R. Co., supra. (6) Competition.-Interst. Com. Commission v. L. & N. R. Co., 190 U. S. 273, 23 Sup. Ct. R. (U. S.) 687; East Tenn. V. & G. R. Co. v. Interst. Com. Commission, 181 U. S. 1, 21 Sup. Ct. R. (U. S.) 516; Louisville & N. R. Co. v. Behlmer, 175 U. S. 648, 20 Sup. Ct. R. (U. S.) 209, revg. s. c. 83 Fed. 898, 71 Fed. 835; Interst. Com. Commission v. Ala. Mid. R. Co., 168 U. S. 144, 18 Sup. Ct. R. (U. S.) 45, affg. s. c. 74 Fed. 715, 69 Fed. 227; Texas & P. R. Co. v. Interst. Com. Commission, 162 U. S. 197, 16 Sup. Ct. R. (U. S.) 666, revg. s. c. 57 Fed. 948, affg. s. c. 52 Fed. 187; Interst. Com. Commission v. B. & O. R. Co., supra; Pickering Phipps v. L. & N. W. R. Co., (1892) 2 Q. B. D. (Eng.) 229, construing § 2 of the English Act of 1854, which is very like Interst. Com. Act, § 3. None of the above factors alone are to be considered necessarily controlling. Neither are they all controlling as a matter of law. It is a question of fact to be decided in each case by the proper tribunal.-Interst Com. Commission v. Ch. G. W. R. Co., 141 Fed. 1003.

In determining whether rates fixed by a state yield a reasonable return, a comparison of the actual gross receipts of the railroad from its state business with those which it would have received if the rates prescribed had been in force does not sufficiently determine as to the reasonableness of the rates in question, as the expenses incurred in

producing those receipts must always be taken into account and only by striking a balance between the two can it be determined that the business is profitable.- Chicago, M & St. P. R. Co. v. Tompkins, 176 U. S. 167, 20 Sup. Ct. R. (U. S.) 336.

In passing upon questions arising under the Interstate Commerce Act, the tribunal appointed to enforce its provisions is empowered to fully consider all the circumstances and conditions which reasonably apply to the situation, and the tribunal may and should consider the legitimate interests as well of the traders and shippers; the competition. that affects rates and the strife between routes for traffic; and the welfare of the community which is to receive and consume the commodities, as well as that which produces and ships them.- Texas & P. R. Co. v. Interst. Com. Commission, 162 U. S. 197, 16 Sup. Ct. R. (U. S.) 666, revg. s. c. 57 Fed. 948, affg. s. c. 52 Fed. 187.

Railroad companies contended that if a regulative statute had been. in force during any one of the three years preceding its passage, they would have been compelled to use their property for the public substantially without reward or without the just compensation to which they were entitled.— Held, that this mode of calculation for ascertaining the probable effect of the statute upon the railroad companies was one that might properly be used.- Smyth v. Ames, 169 U. S. 466, 18 Sup. Ct. R. (U. S.) 418, affg. 64 Fed. 165.

Where two or more statutes regulating rates are passed at various times, they must be considered separately in determining whether they afford adequate compensation to the railroads. The first act must be considered alone, while the subsequent acts must be considered with reference to the reductions made in the earlier act.- Perkins v. No. Pac. R. Co., 155 Fed. 445.

Every pertinent fact or circumstance which would have a tendency to enable the court to arrive at the fair value of the plaintiff's property should be considered in determining the reasonableness of the rates prescribed by a railroad commission.- Houston & T. C. R. Co. v. Storey, 149 Fed. 499.

Three factors, chiefly, make the cost of doing local traffic greater: (1) the shortness of the haul; (2) the lightness of the train loads; (3) the expense of billing and handling.-Northern Pac. R. Co. v. Keyes, 91 Fed. 47.

In determining whether a rate fixed by statute is insufficient, the compensation to the carrier implies payment of the cost of service, interest on bonds and dividends.- Southern Pac. Co. v. R. R. Commrs., 78 Fed. 236.

It will not be assumed that a reduction in rates will mean a reduction in net or gross revenues.- Quimby v. Clyde Ss. Co., 12 Inters. Com. R.,

In determining whether certain advances in rates on livestock from the Southwest in 1903 were reasonable, the Interstate Commerce Commission considered the cost to the carriers at the points of origin and delivery, cost and maintenance of special equipment, expense of unloading and reloading in transit incident to feeding, watering and resting the stock, character of the movement, number of cars in trains and their average loads, volume and desirability of the traffic, return of empty cars, liability to damage, cost of hauling, increased cost of raising livestock, decreased selling price, method of making the advances in rates, disappearance of competition, cost of railroad labor and supplies, improved methods of operation and increasing general traffic, revenue per ton per car per mile and per ton per train per mile, and other relevant circumstances and conditions.- Cattle Raisers' Assn. v. Mo., K. & T. R. Co., 11 Inters. Com. R. 296.

Among the controlling factors in fixing rates is the risk incurred.— Tift v. So. R. Co., 10 Inters. Com. R. 548.

Rates on highly competitive kinds of traffic should not be adjusted. with reference to the interests of any particular market, but reasonable and just rates should be established, regardless of the results which may ensue, and the traffic be allowed to go wherever it will under such circumstances.- Chicago Live Stock Exch. v. Ch. G. W. R. Co., 10 Inters Com. R. 428.

The taxes imposed on railroad property and securities should be taken into account in determining which return is reasonable.— Matter of Proposed Advances in Freight Rates, 9 Inters. Com. R. 382.

In determining whether rates are unjust or unreasonable, or whether any locality, person or commodity is subject to undue prejudice, it is entirely appropriate to take into consideration all facts and circumstances which bear upon the relation of rates to different communities.- Daniels v. Chicago, R. I. & P. R. Co., 6 Inters. Com. R. 458.

The increasing or diminishing volume of business, the market price of the articles to be transported, the relation of local to through freights, the articles of freight on which the railroad must depend as compared with other roads transporting similar commodities through more populous communities, the development of competition, the opening of new lines of communication, the course of business which may soncentrate empty cars at either terminus of the line, all have a bearing on the making of reasonable rates.- Buchannan v. No. Pac. R. Co., 3 Inters. Com. R. 655, 5 I. C. C. R. 7.

The Interstate Commerce Commission will not order the raising of rates in order to equalize a difference in the cost of production now operating against a complainant.- Poughkeepsie Iron Co. v. N. Y. C. & H. R. R. Co., 3 Inters. Com. R. 248, 4 I. C. C. R. 195.

In determining what is a reasonable rate, the demands of operating expenses, fixed charges, bonded debt, and dividends, are to be considered, but the claim that these fix a standard below which a rate may not be reduced, is subject to qualifications, one of which is that such obligations must have been incurred bona fide.- In re Excessive Rates on Food Products, 3 Inters. Com. R. 93, 4 I. C. C. R. 48.

The generally recognized rule of transportation that the cost of carriage is usually in inverse ratio to distance, and that, therefore, the rate per ton per mile to be justly charged decreases with distance, is subject to qualifications, such as volume of business, character of route, necessary revenue from the business done.- Manufacturers' Union v. M. & St. L. R. Co., 1 Inters. Com. R. 483, 630, 2 Inters. Com. R. 228, 302, 3 Inters. Com. R. 115, 4 I. C. C. R. 79.

To be taken into consideration in determining what is a reasonable rate for a particular commodity, are the relative amount of through and local business, the proportion borne by the particular commodity to the rest of the local traffic, the market value of the commodity, etc. -Evans v. Oregon R. & N. Co., 1 Inters. Com. R. 314, 326, 641, 1 I. C. C. R. 325.

In determining, under N. Y. R. R. L., § 100, whether a railroad corporation should be permitted to abandon one of its stations, the state Board of Railroad Commissioners may receive in evidence a contract between such corporation and the citizens of the locality as to the erection and maintenance of such station, although they have not been vested by the legislature with the function of granting or withholding relief based upon contractual obligations.- People ex rel. Loughran v. Board of R. R. Commissioners, 158 N. Y. 421, 53 N. E. 163, affg. s. c. 32 App. Div. (N. Y.) 158, 52 N. Y. Supp. 901.

The questions of time, place, distance, facilities, quality and quantity of goods, and many other matters, must be considered in determining what is a just and reasonable charge in given circumstances.- Lough v. Outerbridge, 143 N. Y. 271, 38 N. E. 292, 25 L. R. A. 674, affg. s. c. 68 Hun (N. Y.), 486, 22 N. Y. Supp. 976.

In a suit by a carrier to restrain the enforcement of rates fixed by the legislature, an allegation that the rates are confiscatory, etc., because (1) "the traffic and business over the same is so small and unremunerative that it cannot and has not been able to operate its railway under said statute without an actual loss," and because (2) "of its inability to pay the interest upon its just debts and the cost of maintaining and operating its railroad in a safe and proper condition," is insufficient on demurrer, since the road's business might be so small or its operating expenses so extravagant that no reasonable rate could make its passenger business profitable, and its debts might, by reason of