Car-mile and train-mile earnings are also frequently used in comparing rates and, as with the ton-mile comparisons, may constitute probative evidence.564

What is sometimes called the rate per ton-mile-more properly the revenue per ton-mile which the rate for the distance yields reflects the rate and the length of the haul only, and is obtained by dividing the rate per ton for the total haul by the length of the haul. Students of the principles applied to rate-judging have extended the comparisons by using revenues per gross ton-mile both with and without a consideration of the empty haul incident to a particular traffic. The revenue per net ton-mile gives no consideration to the ratio of revenuepaying load to the total load hauled, while the revenue per gross ton-mile reflects both the weight of the commodity hauled and the weight of the car in which it is hauled. Some commodities, such as oil, coal, live-stock and meat products, are transported in special equipment which, from necessity, is hauled nearly as great distances empty as loaded. Comparisons which include these additional considerations are obviously more valuable than comparisons of revenue per net ton-mile and revenue per car-mile. In the Western Advance Rate case of 1915, those more comprehensive comparisons were presented and relied on as tending to show the propriety of selecting for rate advances the commodities affected by the tariffs there under suspension and investigation.565 There are cases where the car-mile comparison is the better,566 and light density of traffic at the end must be considered.567

son, T. & S. F. R. Co., 23 I. C. C. 519, 524.

564 Winconsin Steel Co. v. Pittsburgh & L. E. R. Co., 27 I. C. C. 152, 162; Lake Cargo Coal Rate Case, 22 I C. C. 604, 620; construed, Rock Springs Distilling Co. v. Illinois C. R. Co., 27 I. C. C. 54, 57; Milburn Wagon Co. v. Toledo, St. L. & W. R. Co., 27 I. C. C. 63, 66; Re Export Rates of Flax Seed Products, 27 I. C. C. 246, 248; Little Rock Chamber of Com

merce v. St. Louis, I. M. & S. R. Co., 26 I. C. C. 341, 343.

565 Western Rate Advance Case, 1915, 35 I. C. C. 497.

566 Rice from Texas & Louisiana, 40 I. C. C. 285, 289; Chamber of Commerce of Johnson City v. S. Ry. Co., 46 I. C. C. 527, 531; Western Cement Rates, 48 I. C. C. 301.

567 Commercial Club of Mitchell, S. Dak., v. A. & W. Ry. Co., 46 I. C. C. 1, 7.

§ 105. Multiple-Line Hauls. Prior to the date of the passage of the Transportation Act, 1920, the Interstate Commerce Commission, practically without exception, save when the haul exceeded five hundred miles, applied the principle that for a two or more line haul the charges might be greater by the cost of switching than for a one-line haul for a similar distance.568 The principle merely raises a presumption of fact and is not a rule of law.500 "Single line" comprehends all lines under the same controlling interests.570

The presumptive force of the principle lost all, or substantially all, of its support when Congress, by the 1920 Act, practically terminated whatever competition had theretofore existed among the railroads.571

§ 106. General Business Conditions.-How far rates may be affected by the business situation of the country and the economic condition of the shippers has been the subject of consideration in several cases. It will be admitted that the fact-when such fact exists-that a shipper has a ready market for his goods at a good price affects the value of the service to the shipper and may be considered in determining

568 Sheridan Chamber of Commerce Case, 26 I. C. C. 638, 649 and cases cited; Hayden Bros. Coal Corp. v. D. & S. L. R. R. Co., 39 I. C. C. 94, 106; Northwestern Cooperage & Lumber Co. v. M. St. P. & St. M. Ry. Co., 43 I. C. C. 629, 632.

569 Stonega Coke & Coal Co. v. L. & N. R. R. Co., 39 I. C. C. 523, 551; The Mississippi River Case, 28 I. C. C. 47, 59. The modern tendency, particularly as to rates on the higher grades of traffic, is to make no difference in rates as between single-line and multiple-line hauls. See Southern Class Rate Investigation, 100 I. C. C. 513, Consolidated Southwestern Cases, 123 I. C. C. 203; Western Trunk Line Class Rates, 164 I. C. C. 1; Eastern Class Rate Investigation, 164 I. C. C.

314.

570 Capital City Oil Co. v. Y. & M. V. R. Co., 39 I. C. C. 141, 146; Wellington Mines Co. v. C. & S. Ry. Co., 39 I. C. C. 203, 205; Royster Guano Co. v. A. C. L. R. Co., 50 I. C. C. 34, 43.

571 Car Service Provision paragraphs (10) to (17), Sec. 1 of Act, sections 412 to 419, post; joint use of terminal facilities, paragraph (4) of Section 3 of Act, Section 431, post; consolidation of carriers, paragraph (4), section 5 of Act, section 438, post; anti-trust laws made inapplicable, paragraph (8), section 5 of Act, section 443, post; routing further regulated, paragraphs (9) and (10), Section 15 of Act, Sections 497 and 498, post, providing a "fair return" on "aggregate value" paragraphs (2), (3), (5), (6), Section 15a of Act, Seetions 503 and 504, post.

what, in a particular case, is a reasonable rate. It is also true that prosperous times may and generally do increase the price of both labor and equipment necessary for the carrier to operate, thus affecting "the cost of service," and, consequently, furnishing a fact that is an element among the many considerations entering into a determination of what is the proper rate to be charged for transportation. But the mere fact of general prosperity, or of general depression, will not justify a carrier in absorbing the one or shifting the other to the shipper. "Transportation by rail is a service of a quasi-public nature, not to be sold to the highest bidder, nor subject to the law of supply and demand. ''572 "The claim that the carriers may absorb all or part of the prosperity of the shipper," says Mr. Commissioner Clements "is based upon the erroneous assumption, so prevalent among traffic managers, that a rate may be made as high as 'the traffic will bear.' ''573 When rates have been reduced because it was necessary to meet conditions caused by depressed financial conditions, such rates may be advanced in prosperous times to the point where they are reasonable. Mr. Commissioner Prouty, in the able discussion of the principles of rate-making already quoted from, says:574

"No reduction in these rates has been made in the past for the purpose of stimulating the movement of this traffic. The amount of these advances is so slight as compared with the selling price of the article transported that they produce no effect whatever upon the volume of the traffic. Now, with respect to a rate of this kind, we do not think an increase in the price of the article transported justifies of itself an increase in the freight rate. These rates were not reduced when the prices fell; why should they be advanced when prices rise? An incident which occurred in this very case strongly emphasizes the absurdity of the claim.

"Cotton is an important item of traffic upon the International & Great Northern Railroad, one of these respondents.

572 Re Proposed Advances in Freight Rates, 9 I. C. C. 382, 405. See also Freight Bureau of Cincinnati v. Cincinnati, N. O. & T. P. Ry. Co., 6 I. C. C. 195, 4 I. C. R. 592, 617.

573 Tift v. So. Ry. Co., 10 I. C. C.

548, 582; Central Yellow Pine Asso. v. Ill. Cent. R. Co., 10 I. C. C. 505.

574 Re Class and Commodity Rates from St. Louis to Texas Common Points, 11 I. C. C. 238, 272, 273.

It is well known that the ravages of the boll weevil have seriously affected the cotton crop in certain parts of Texas. The attorney for the International & Great Northern, himself a former railroad commissioner of Texas and a thoughtful student of this subject, gave as a reason for the advances in question in which his line participates that owing to the boll weevil the cotton crop upon a large part of his road was a failure, and that this reduced the amount of cotton for transportation; that in consequence of the failure of this important crop the whole country was impoverished and was able to purchase less, which also contributed to reduce the income of his railroad. For these reasons, it had become necessary to advance rates in order to obtain sufficient revenue with which to operate the road and pay a fair return upon the investment. Here, therefore, we have in the same case and by parties of the same general system a claim upon the one hand that these advances are justified by general conditions of prosperity and upon the other hand that they are justified by general conditions of adversity.

"Railroads should share in the general prosperity. They should do this partly by being able to advance those rates which have declined under commercial conditions. They should do it still more by the increased traffic which they obtain. In times of prosperity when money is plentiful and business good people ride more, buy more, new industries are being established and old industries are active, traffic increases and out of such increased traffic the railway obtains, by automatic action so to speak, without any advance in its rate a large share in the general prosperity.”

66

The opinions of Commissioners Clements and Prouty, supra, are in accord. The carrier may not absorb the prosperity of the shipper, but when prosperity exists the carriers may restore rates that have declined under commercial conditions." If the prosperity of the country adds to the density of the traffic, it might, in some cases, furnish a reason for reductions in rates.

In the Western Rate Advance case of 1910, p. 315,575 the broad view which the Commission may take was discussed.

575 Advance in Rates,-Western Case, 20 I. C. C. 307, 315, 317.

It was there said: "It must be borne in mind that the Commission is not a court of law; its function is to apply the mandatory and restrictive provisions of the Act to Regulate Commerce to stated conditions of fact. We must regard the problems presented to us from as many standpoints as there are public interests involved. The reasonableness of a rate is to be determined by no mere mathematical calculation."

* *

*

And, in the further course of the opinion in that case, p. 317: "It is doubtless true that in its control over the charges which our railroads may make this Commission exercises a power so extensive as to justify the broadest consideration of the economic and financial effects of its orders."

Notwithstanding the fact that business conditions should be considered in making and judging rates, it is not permissible to fix rates lower than are just and reasonable, because of the inability of a particular commodity to bear such rates. Mr. Commissioner Daniels, citing prior decisions of the Commission in deciding the claim for lesser rates based upon the statement that the prices received were less than the actual cost of production, said:576 "It should be observed, however, that the reasonableness or unreasonableness of freight rates cannot be gauged solely by the ability or inability of shippers under depressed prices to market their products at the existing rates with a reasonable margin of profit. Such a doctrine would lead to the conclusion that the differential burdens of production arising from natural disadvantages, distance from market, and other economical difficulties of all communities and industries should be neutralized and absorbed by the carriers which serve them."

§ 107. The Hoch-Smith Resolution and Its Effect on RateMaking. The Hoch-Smith Resolution (43 Stat. 801; 49 U. S. C. A., Sec. 55) purported to declare the "true policy of rate making" for the country and it was at first thought by the

576 Railroad Com. of Montana v. B. A. & P. Ry. Co., 31 I. C. C. 641, 644; and see N. P. R. Co. v. North Dakota, 236 U. S. 585, 59 L. Ed. 735, 35 Sup. Ct. 429; see also Lumber Rates

from Helena, Ark., 41 I. C. C. 565, 577; Southeastern Lumber, 42 I. C. C. 548, 558; McLean Lumber Co. V. United States, 237 Fed. 460, 470.