account of burdensome rates, and the carrier is hauling a considerable number of empty cars in the direction such article would naturally move if accorded a lower rate, the carrier may be justified in carrying at a rate that will induce the movement of such traffic, provided no extra or additional charge is in consequence put upon other articles carried.1 The hobbyist who urges the adoption of some one of the dozen or more principles upon which railway rates may be based, with the confident belief that his particular scheme would forever settle the difficulties of railway charges, finds little encouragement in the decisions of the Commission. No one can go far into the problem of rates without feeling very strongly the utter futility of attempts to reduce all rates to the basis of a single principle. In this, as in so many other domains of economic life, the question is not one or the other, but one and the other or others. The circumstances and conditions under which goods and persons are transported are far too complex and too involved to admit of so simple a solution for determining rates. The Commission, in deciding concrete cases as they have arisen, has fallen back upon various principles of railway rates, giving one or the other a higher rank as the peculiar combination of facts in that case appeared to demand. Hence the decisions contain references to the principles of value, distance, cost, space, weight, etc. 1 6. 61. In one of its earliest decisions1 the Commission enumerated the following factors to be taken into consideration in the determination of just and reasonable rates: (1) the earnings and expenses of operation; (2) rates charged upon the same commodity on other roads similarly situated; (3) the diversities between the railway in question and such other roads; (4) the relative amount of through and local business; (5) the proportion borne by the commodity in question to the remainder of the local traffic; (6) the market value of the commodity; (7) the reductions made by the carrier upon other articles which are consumed and necessarily required by the producers of the article in question; (8) all other circumstances affecting the traffic of itself and as related to other considerations entering into the charges of the carrier. Rates may be established on a mileage basis 2 and the rate per ton-mile grow less in proportion to distance, but a departure from equal mileage rates on different branches or divisions of the same railway must be clearly shown to be necessary before it can be approved. Through rates are not required to be made on a mileage basis, nor local rates to correspond with divisions of a joint through rate over the same line. Mileage is usually an element of importance, and due regard to distance proportions should be observed in connection with the other considerations that are material in fixing transportation charges. The 2. 52. 4 5. 612. 5 3.252. 1 1. 325. 2 1. 629. 8 distance being in favor of one of two competing points, and neither cost, the value of the service, nor other conditions of transportation in favor of the other, the shorter distance point cannot justly be denied at least equal rates with the longer.1 The market value of a commodity, the value of the transportation service to the commodity, its cost of production, and the actual cost of carriage are elements of importance in establishing rates.2 Value is another important element, but it cannot be made an arbitrary standard independent of all other considerations.3 Rates should bear a fair and reasonable relation to the antecedent cost of the traffic as delivered to the carrier and to the commercial value of such traffic; but it is incumbent on parties invoking this rule to make satisfactory and reliable proof as to such antecedent cost and commercial value, and in case of competitive articles 5 over the same line the relation of rates should be determined by reference to the respective costs of service ascertained with reasonable 1 6. 342. 2 The writer refrains from discussing in this place the meaning of the terms "value," "cost," " expense," etc., as used in transportation matters. A variety of definitions can be constructed synthetically from the decisions. The writer is inclined to restrict the use of the term "value of service" to value of service to the commodity considered as an object of purchase and sale on a competitive market; and "cost of transportation" to material sacrifices made by a railway in carrying a particular article at a certain time (which, as is well known, cannot be accurately determined for a particular service). 8 8. 158. 45. 529. 5 4. 611. 3 accuracy. Although rates should bear a reasonable relation to cost of production and to the value of the service to the producer and shipper, they should never be so low as to impose a burden on other traffic;1 nor can small earnings,2 extraordinary or unnecessary cost of operation or management, or other financial necessities and conditions of the carrier justify excessive rates. The degree of risk to the carrier 5 and the capitalization of a railroad have a bearing upon rates. The latter, in order to have consideration, should be accompanied by a history of the capital account, the value of the stock and various securities, and the actual cost and value of the property itself. To make the capital account of railways the measure of legitimate earnings would place, as a rule, the corporation which has been honestly managed from the outset under enormous disadvantages. Classification. That rates can be changed by modifying classifications is an elementary proposition of transportation. That principles of railway rates constitute the decisive factors in classification is its corollary. A study of classifications is inseparable from a study of rates, and vice versa. The great classifications in force in the United States to-day are the result of years of effort in improving some original schedules and in consolidating and eliminating scores of others. three dominating classifications of to-day, with The 5 6. 131; 1.465. more than seven thousand specifications, are a great advance upon the schedule of 1856 with thirty-three specifications. This development has been one steady march toward uniformity, in which the Interstate Commerce Commission has always stood on the side of progress, and arguments in favor of a uniform classification have been repeated many times in its reports. "The Commission has repeatedly said that the rearrangement of rates and the simplification of classifications are matters which the carriers should undertake and should carry forward for themselves."1 While the Commission has been reluctant to enter upon active classification making, its decisions are not without direct bearing upon specific questions relating to classifications, especially in matters of principle. Classification is deemed convenient and essential to any practical system of rate-making, and is so recognized, though not enjoined, by the act to regulate commerce.2 And when a classification is used as a device to effect unjust discriminations, or as a means of violating other provisions of the statute, the act requires the Commission to so revise and correct such classification and arrangement as to correct abuse. A manufacturer of soap advertised and sold as toilet soap made complaint against a railway company for classifying his soap with other toilet soaps, and not with the lower class of laundry soaps. The Commission held that a manu |