case, where a business has been built up
and maintained under a certain rate, that
rate should not be disturbed. Corpora-
ion Commission of N. C. v. N. & W. Ry.

Co., 19 I. C. C. 303, 308.

(c) Where plant has been established
and money invested on faith of certain

ates and conditions, the carrier may



340



EVIDENCE, 28 (a) 29 (bb)



not increase those rates to the serious
disadvantage of such investment without
good cause or reason. Douglas & Co.
v. C. R. I. & P. Ry. Co., 16 I. C. C.
232, 237.

28. Local Rates and Combinations.

See Through Routes and Joint
Rates, 15.

(a) Where the spread between the
local rates and the divisions of through
rates between the same points is large
the local rates should be carefully scru-
tinized. R. R. Com. of Nev. v. N. C. O.
Ry. Co., 22 I. C. C. 205, 210.

(b) The combination and through rate
should not be equal. El Dorado, etc., Co.
v. C. R. I. & P. Ry. Co., 22 I. C. C.
286, 287.

(c) A joint through rate is unreason-
able so far as it exceeds the combination
of locals. St. Louis Blast Furnace Co.
v. V. Ry. Co., 21 I. C. C. 215; Webster
Grocer Co. v. C. & N. W. Ry. Co., 21
I. C. C. 20.

(d) The charges collected on ship-
ments of coke under joint rate of $?.90
per net ton and $2.80 per net ton from
Deepwater, W. Va., to St. Louis or Car-
ondelet, Mo., were unreasonable in and
to the extent that they exceeded the
charges that would have been imposed
had such joint rates not exceeded the
aggregate of the intermediate rates be-
tween the same points, or $2.60 per net
ton. Reparation awarded. St. Louis
Blast Furnace Co. v. V. Ry. Co., 21 I. C.
C. 215, 220.

(e) Existence of lower combination
over another route does not present a
combination lower than the through rate
on which the presumption obtains such
through rate is unreasonable. Lull Car-
riage Co. v. C. K. & S. Ry. Co., 19 I. C.
C. 15, 17.

(f) Complainant shipped, all -rail, a
carload of cutters, Kalamazoo, Mich., to
Fond du Lac, Wis., under the through
joint class rate of 55c per 100 Ibs. via
Chicago. Contemporaneously there was
via Milwaukee a rate of 24% c via the
"across lake route" (Lake Michigan).
HELD, this case does not present a com-
bination of locals lower than the through
rate on which the presumption obtains
that the through rate was unreasonable.
Reparation denied. Lull Carriage Co. v.
C. K. & S. Ry. Co., 19 I. C. C. 15, 17.

(g) Complainant shipped fruit bas-
kets, carload, Traverse City, Mich,, to



Balcom, 111., under a joint rate of 26c per
100 Ibs., which was greater than the sum
of the locals. HELD, that a joint rate
between two points that exceeds the sum
of the separately established rates be-
tween the same points is prima facie un-
reasonable, and there being no evidence to
rebut this presumption, the rate charged
was unreasonable and excessive to the
extent that it exceeded the combination
in effect at the time the shipments
moved. Wells-Higman Co. v. G. R. & I.
Ry. Co., 19 I. C. C. 487, 488.

(h) A joint rate in excess of the sums
of the locals is unreasonable. Webster
Grocery Co. v. C. & N. W. Ry. Co., 19
I. C. C. 493, 495.

(i) On shipments in each direction
between Albuquerque, N. M., and El
Paso, Tex., in less-than-carloads, com-
plainants were assessed first, second,
third and fourth through class rates,
which exceeded the combination local
class rates via Las Cruces by 39c, 34c,
33c and 30c, respectively. On agreement
of defendant to file new tariffs of through
rates from Albuquerque to El Paso equal
to the local combination rates and
through rates from El Paso to Albu-
querque, making material reduction in
New Mexico and to make reparation on
the basis of the new schedules, it was
HELD, that the complaint be dismissed
and that authority be given defendant to
settle the overcharges on the informal
docket. Crombie & Co. v. A. T. & S. F.
Ry. Co., 18 I. C. C. 57, 59.

(j) Where the combination of local
rates is less than the through rates the
adjustment is prima facie unreasonable.
Greater Des Moines Committee v. C. M.
& St. P. Ry. Co., 18 I. C. C. 73, 80.

29. Long Continuance of Voluntary
Rate.

See Infra, 43; Advanced Rates, 3
(f), 5 (4) (a), 8 (1) (j); Express
Companies, 22; Reasonableness of
Rates, 16, 25, 84 (I), 145 (c).

(a) A voluntary rate, established to
meet competition, is not to be taken as
the measure of what is reasonable. L. &
N. R. R. Co. v. I. C. C., 195 Fed. 541, 558.

(b) The maintenance of a rate for
eight years is a strong admission against
the carriers that a higher rate would be
unreasonable, unless explained. Arling-
ton Heights Fruit Exchange v. S. P. Co.,
22 I. C. C. 149, 151.

(bb) A carrier having voluntarily
put in a rate relatively low is not



EVIDENCE, 29 (c) (k)



341



bound to maintain that rate indefinitely,
but may withdraw a rate found by the
Commission to be unreasonably low.
Fairmont Creamery Co. v. C. B. & Q.
R. R. Co., 22-1. C. C. 252, 254.

(c) The fact that rates have been in
effect without material change for many
years is of weight in favor of the view
that they are reasonable. Chattanooga
Feed Co. v. A. G. S. R. R. Co., 22 I. C. C.
480, 484.

(d) The presumption, from long main-
tenance, that a -rate was sufficiently high
may be weakened by showing that the
past rate was induced by competition.
Audley Hill & Co. v. S. Ry. Co., 20 I. 0.
C. 225, 226; Commercial Club of Omaha
v. S. P. Co., 20 I. C. C. 631, 636.

(e) The fact that a lower rate has
been in effect immediately prior and sub-
sequent to a certain period is valuable
as evidence only in case it appears that
the lower rate affords reasonable revenue
to the carrier. Winterbotham & Sons v.
M. P. Ry. Co., 21 I. C. C. 266, 269.

(f) Complainants shipped bananas in
carloads, Charleston, S. C., to Augusta,
Ga., under a rate of 20c per 100 Ibs.
These shipments moved between May 4,
1909, and Jan. 9, 1910. To May 3, 1909,
and since Feb. 18, 1910, bananas moved
under a rate of 15c per 100 Ibs., which,
with the above exception, had been con-
tinuously in effect for more than nine
years. The 15c rate was established to
meet competitive conditions on the haul
from Augusta to Savannah, Ga., and
territory intermediate to Augusta,
Ga., and Columbia, S. C. HELD, that
although the long existence and use of
a -rate is an. important fact tending to
show that it is sufiiciently high and
properly requires the carriers to explain
or justify an increase thereof, the evi-
dential force of such a showing is weak-
ened when the rate has been established
on account of competitive conditions
which the carrier in the exercise of its
discretion might lawfully meet, but
which it might not be required to meet.
Complaint dismissed. Audley Hill & Co.
v. S. Ry. Co., 20 I. C. C. 225.

(g) Long maintenance of a subse-
quently restored rate is in the nature of
an admission of its fairness. Millar v.
N. Y. C. & H. R. R. Co., 19 I. C. C. 78.

(h) Complainant shipped apples, C.
L., from Seymour and Cedar Gap, Mo., to
Minneapolis and St. Paul, Minn., a dis-



tance of about 840 miles. Prior to Sept.
6, 1906, the rate from Seymour was 34c
and from Cedar Gap 34 1 /c. On that date
and to Aug. 6, 1909, the rates were 41c
and 42c, respectively, and on Aug. 6, 1909,
reduced to 31c. HELD, the presumption
that 34c and 34Mjc were reasonable arises
from the voluntary act of the carriers in
keeping them in effect for a long period
of time, rendered stronge-r by the fact
that these rates were voluntarily re-
duced to 31c. Reparation awarded for
charges exacted in excess of 34c and
34 y 2 c. Gamble-Robinson Commission Co.
v. St. L. & S. F. R. R. Co., 19 I. C. C. 114.

(i) The maintenance of a voluntary
rate imposes the duty on the carrier to
give good reason for an advance. Mor-
gan Grain Co. v. A. C. L. R. R. Co., 19
I. C. C. 460, 468.

(j) Complainants attacked the rate on
beer from Milwaukee, Wis., to certain Pa-
cific coast and far western points. Com-
plainants rested their case solely upon
the fact that the rates on beer from Mil-
waukee to the various points of destina-
tion set forth in the petition were ad-
vanced by from 5c to lOc per 100 Ibs.
prior to the movement of these ship-
ments, and subsequently restored to the
pre-existing basis. HELD, these facts
are entitled to their proper weight, but
do not demonstrate the illegality of the
higher charges. The complainant's rep-
resentatives testified at the hearing that
they are subjected to severe competition
in the marketing of their products, and
that the carriers have found it necessary
to place rates on a low basis in order to
enable the complainant to meet this local
market competition with success. This
circumstance tends to rebut any pre-
sumption of unreasonableness which may
arise from the history of a rate. It argues
strongly in favor of the carrier's conten-
tion that the lower standard was re-
established because of competitive condi-
tions, and not because of a conviction
that the increased rates were excessive.
Pabst Brewing Co. v. C. M. & St. P. Ry.
Co., 19 I. C. C. 584, 586, 587.

(k) In attacking the carload rate of
$2 per net ton on soft coal originating in
Illinois from East St. Louis, 111., to
Omaha, Neb., complainants relied on the
long maintenance of a rate of $1.80 per
net ton as proof that the newly estab-
lished rate of $2 was excessive. HELD,
that the -rate from East St. Louis to
Omaha on Illinois coal has at all times
had reference to competitive conditions,



342



EVIDENCE, 29 (1) 30 (a)



including those affecting rates to East
St. Louis, and since it has often been
held that a carrier may establish rates
of this kind for competitive reasons lower
than it could justly be compelled to es-
tablish, it does not seem that the long
existence of a rate established and
maintained under former and different
conditions (not altered by an^' illegal
act of its own) than those now existing
should have the same weight and force
as proof in the nature of an admission
of reasonableness of the former rate, and
such as would ordinarily attach to the
long continuance of a rate voluntarily
established and maintained under other
conditions. Breese-Trenton Mining Co. v.
Wabash R. R. Co., 19 I. C. C. 598, 600.

(1) The long maintenance of a compet-
itive rate was not, upon advance of the
rate, an admission that the former rate
was reasonable. Breese-Trenton Mining
Co. v. W. R. R. Co., 19 I. C. C. 598, 600.

(m) Though a lower rate is estab-
lished through an error in the carrier's
tariff, the fact that it is voluntarily main-
tained for a period of two years is evi-
dence of its 'reasonableness in a claim
for reparation for charges exacted under
the rate which it succeeded. Clark Co.
v. Buffalo & Susquehanna Ry. Co., 18
I. C. C. 380, 381.

(mm) Where two rates are in effect,
the shipper is justified in demanding
the lower, and the carrier may not
lawfully collect more. The Commission
is likewise justified in holding that the
lower rate is reasonable, or at least not
unreasonably low, because it is the vol-
untary rate of the carrier. Boise Com-
mercial Club v. Adams Express Co., 17
I. C. C. 115, 121.

(n) The extensive application volun-
tarily by other carriers than defendant of
fourth-class rates on oils is evidence of
the unreasonableness of higner rates in
the same general territory. Bartles Oil
Co. v. C. M. & St. P. Ry. Co. 17 I. C C.
146, 148.

(o) The long-continued maintenance
of a lower rate raises no presumption of
law that a newly established higher rate
is unreasonable. Memphis Cotton Oil Co.
v. I. C. R. R. Co., 17 I. C. C. 313, 318.

(p) The long maintenance of a par-
ticular rating cannot negative the -right
of shippers to such a lower adjustment as
circumstances and conditions may de-



mand. Riser Co. v. C. of G. Ry. Co., 17
I. C. C. 430, 440.

(q) Where carriers voluntarily main-
tain a rate between certain points for a
long period of time the presumption is
that such rate is reasonable. Sunderland
Bros. Co. v. P. M. R. R. Co., 16 I. C. C.
450, 451.

(r) The Commission has often held
that the long maintenance of a given rate
is an admission of the reasonableness of
that rate. Green Bay Business Men's
Ass'n v B. & O. R. R. Co., 15 I. C. C. 59,
63.

(s) The mere fact that a rate is found
in effect or even that it has continued in
effect for a considerable length of time,
is not conclusive of its reasonableness.
Darling & Co. v. B. & O R. R. Co., 15 I.
C. C. 79, 83.

(t) It has often been said by the Com-
mission that the voluntary maintenance
of a rate for a considerable period was
in the nature of an admission that the
rate was reasonable, which must be given
great weight in determining that ques-
tion unless explained. Darling & Co. v.
B. & O. R. R. Co., 15 I. C. C. 79, 80.

(u) Where a rate is voluntarily es-
tablished and maintained for a consid-
erable period, this fact, although not con-
clusive, is strong evidence of the
reasonableness of the rate. The force
of this presumption is greatly weakened
and may be altogether destroyed by the
circumstances under which the rate was
established and maintained, but if no
particular reason is shown for the put-
ting in of the rate, if no commercial or
competitive condition prevents the main-
tenance of a higher rate, if the main-
tenance of this rate has been voluntary
upon the part of the carrier, the force
of the admission becomes exceedingly
strong. Burgess v. Transcontinental
Freight Bureau, 13 I. C. C. 668, 677.

(v) Where carriers voluntarily main-
tain a rate for a long period of time
the presumption is that such rate is
reasonable. Chaffin Coal Co. v. B. &
O. R. R. Co., Unrep. Op. 585.

30. Low Rate in Opposite Direction.

See Comparative Rates; Discrimina-
tion, 4 (g) ; Reasonableness of
Rates, 116 (d).

(a) The mere fact that a rate is
higher one way between the same points
than it is the other does not prove that
the higher rate is unreasonable, and this



EVIDENCE, 30 (aa) 33 (a)



343



is particularly true where there is a
preponderance of empty cars moving in
the one direction. L. & N. R. R. Co. v.
I. C. C., 195 Fed. 541, 559.

(aa) Rates on bottles of wine in
cases from Galveston to New Orleans
found unreasonable to the extent that it
exceeds the rate in the opposite direc-
tion. Galveston Commercial Ass'n v.
G. H. & S. A. Ry. Co., 23 I. C. C.
512.

(b) The fact that the eastbound rate
is lower than the westbound rate on the
same route does no A , prove that the latter
is unreasonable. Wilburine Oil Works v.
P. R. R. Co., 18 I. C. C. 548.

(c) Comparisons of rates in opposite
directions are never conclusive. Patten
v. Wis. Cent. Ry. Co., 14 I. C. C. 189.

(d) Rate higher in the reverse di-
rection. HELD, unreasonable and repa-
ration awarded. La Crosse Implement
Co. v. C. M. & St. P. Ry. Co., Unrep.
Op. 220.

(e) Rate higher from Columbia, S.
C., to Jacksonville, Fla., than in oppo-
site direction. Reparation awarded and
maintenance of lower rate ordered.
Pons v. S. A. L. Ry., Unrep. Op. 330.

(f) Rates higher on corn in the
shuck from Louisiana points to points
in Texas than from Texas to points
in Louisiana. Reparation awarded. Hill
& Webb v. I. & V. R. R. Co., Unrep. Op.
333.

(g) Rates higher west bound than
east bound. Not found unreasonable
and complaint dismissed. Hill & Webb
v. T. & P. Ry. Co., Unrep. Op. 451.

31. Manufactured Product.

See Advanced Rates, 13 (e) ; Dif-
ferentials, 5 (b); Evidence, 12
(1) (a), 12 (12) (a). 12 (16) (a),
12 (24) (a), 12 (26) (a). 17 (a),
31, 44; Reasonableness of Rates,
17, 54 (a), 106 (a). 138 (a).

(a) If rates. on manufactured articles
are to be constructed with reference to
the assembling cost at the point of
manufacture, all of the raw materials
must be considered. Massee & Felton
Lumber Co. v. &. Ry. Co., 23 I. C. C.
110, 112.

(b) A carrier may make a reasonable
differential between rates on raw ma-
terial and articles manufactured there-
from. Electric Malting Co. v. A. T. &
S. F. Ry. Co., 23 I. C. C. 378, 380.



(c) The general rule is that manufac-
tured products bear higher rates of trans-
portation than does raw material, and is
founded in reason, because ordinarily
there is a substantial difference between
the value of the one and that of the
other, and frequently there is a greater
degree of risk incident to the transporta-
tion and care of the manufactured prod-
uct than of the raw material. The prac-
tice, however, is not universal, and if
departed from in some instances because
the reasons for the distinction are lack-
ing and in other cases because of counter-
vailing commercial and market condi-
tions and considerations. Within the
last main class of exceptions would
fall the case of grain and grain products,
which are generally carried at the same
rate. The rule, however, more nearly
universally applies with respect to the
primary or principal p-roduct or products
than to the secondary products or by-
products from the same raw material.
East St Louis Cotton Oil Co. v. St. L. &
S. F. R. R. Co., 20 I. C. C. 37, 40, 41.

(d) Rates on manufactured products
ought generally to be higher than the
rates on the raw materials from which
they are made. Bulte Milling Co. v.
C. & A. R. R. Co., 15 I. C. C. 351, 364.

32. Market Competition.

See Discrimination, 10 (a); Equali-
zation of Rates, 6 (a); Long and
Short Hauls, 8.

(a) The fact that complainant at Mil-
waukee cannot compete for certain trade
to the Pacific coast under existing rates
does not prove that such rates are un-
reasonable. Goerres Cooperage Co. v.
C. M. & St. P. Ry. Co., 21 I. C. C. 5, 6.

(b) Garments of cotton and wool
come into competition with one another,
and since the freight rate affects in a
degree the price at which the garment
can be sold, it follows that the rate must
in a measure determine the ability of the
complainant to sell its product. Associa-
tion of Union-Made Garment Manufac-
f urers v. C. & N. W. Ry. Co., 16 I. C. C.
405, 408.

33. Merger of Terminals.

(a) The cities of San Pedro and Wil-
mington, situated on the harbor of San
Pedro, are about twenty-two miles dis-
tant from Los Angeles, which is inland.
These communities were merged into the
city of Los Angeles and connected there-
with by a narrow strip of land half a



344



EVIDENCE, 34 (a) 37 (e)



mile in width, locallv known as "the
shoestring." HELD, while these com-
munities have been merged into one mu-
nicipality for the purposes of civil gov-
ernment and administration this does not
necessarily merge the two into one com-
munity from a transportation point of
view. Harbor City Wholesale Co. v. S.
P. Co., 19 I. C. C. 323, 331.

34. Mineral Lands Owned by Carrier.
See Reasonableness of Rates, 18.

(a) Where the coal lands owned by a
carrier are leased to an independent
company, which makes a profit out of
their operation, the carrier should not
be permitted to use the value of such
property for the purpose of swelling the
amount upon which it may demand an
income from rates to be paid by the
public. City of Spokane v. N. P. Ry Co.
15 I. C. C. 376, 407.

(b) Ore properties belonging to de-
fendant carrier were transferred to an
independent company in exchange for
certificates entitling the holders thereof
to participate in the profits of said com-
pany. These certificates were turned
over gratis to the shareholders of defend-
ant. HELD, upon a question of reason-
ableness of rates said fact could not be
urged to deny the right of said share-
holders to receive a reasonable income
on their stock. City of Spokane v. N. P.
Ry. Co., 15 I. C. C. 376, 408.

35. Municipal Charter.

(a) A municipal charter is not deter-
minative of the relations which a com-
munity bears to a railroad which gives
it service. Enterprise Fuel Co. v. Pa.
R. R. Co., 16 I. C. C. 219, 223.

36. Need for Revenue.

See Infra, 50, 51, 58; Reasonable-
ness of Rates, 20, 30, 36.

(a) In considering the reasonableness
of a whole schedule of rates the Com-
mission may well at the outset make in-
quiry as to the general financial con-
dition of the defendant railroad. R. R.
Com. of Nev. v. N. C O. Ry. Co. 22 I.
C. C. 205, 210.

(b) The necessitous circumstances in
which defendant finds itself as a result
of events not connected with the Pitts-
burgh lake-coal traffic cannot be ac-
cepted as the measure of reasonableness
of a rate to be imposed upon that traffic.
Boileau v. P. & L. E. R. R. Co., 22 I. C. C.
640, 655.



(c) The fact that a road may be op-
erated at a loss aces not justiiy rate*
unreasonably high for the service pe&
formed. Railroad Commissioners of IOWL
v. I. C. R. R. Co.", 20 I. C. C. 18i, 186.

(d) The Commission is bound to
consider whether any contemplated
readjustment will result in serious im-
pairment of business interests or un-
due depreciation in the revenue of the
carrier. Black Mountain Coal Land Co.
v. S. Ry. Co., 15 I. C. C. 286, 295.

37. New Lines.

See Advanced Rates, 12 (2); Branch
Lines, 2; Cars and Car Supply.

(a) There is but little danger of com-
petition to be apprehended from the con-
struction of new lines. In Re Advances
in Rates Eastern Case, 20 I. C. C. 243,
264.

(b) Complainant attacked rates from
Billings, Mont, to points in Wyoming on
branch lines of defendant. HELD, that
these branch lines traverse a new coun-
try, where transportation conditions are
difficult and the volume of business com-
paratively small. These lines, however,
are operated as part of a great and pros-
perous system; they are feeders to the
main line and help to swell the revenue
of that line. A part of any great railroad
system might be selected and counting
cost of operation and fixed charges such
part be shown to be unprofitable. This,
however, would not truly indicate its
value and profitableness as an integral
part of the whole property. The fact
that these branch lines considered by
themselves fail to show large earnings
does not justify the charging of unrea-
sonable rates. Billings Chamber of
Commerce v. C. B. & Q. R. R. Co., 19
I. C. C. 71, 75.

(c) Rates on a branch line may law-
fully be higher than on main lines
through well-developed territory where
the density of traffic is much greater.
Commercial Club of Omaha v. C. & N.
W. Ry. Co., 19 I. C. C. 156, 159.

(d) A new line ought to be worth
what it cost and ought to earn a return
upon that amount. City of Spokane v.
N. P. Ry. Co., 19 I. C. C. 162, 171.

(e) If the branch lines of a railroad
are judiciously planned and constructed
they should certainly be taken into ac-
count in determining the value of the
railroad, for although they may not earn
a large return upon the cost considered



EVIDENCE, 38 (a) 41 (a)



345



as an independent proposition, they do
add to the traffic and the earning power
of the entire system; but it must be as-
sumed that the new branches which
have been constructed are good invest-
ments, otherwise they would not have
been built, and that they will add to the
earnings of the property in proportion
as they have added to its cost. No in-
crease in rate should be called for on
this account. City of Spokane v. N. P.
Ry. Co., 19 I. C. C. 162, 171.

38. New Rates.

(a) Complainants shipped a carload
of house blocking from Burkburnett, Tex.,
to Devol, Okla., a distance of 7.4 miles,
under a rate of G^c per 100 Ibs., ap-
plied under the "analogous article" rule
in the classification in the absence of
a specific rate. This commodity con-
sists of posts of short lengths used as
pillars to support small frame houses. A
specific commodity rate of 3^c was
shortly after established. HELD, it is
fair to assume that a new rate estab-
lished and maintained affords just com-
pensation to the carrier. Rate collected
found unreasonable so far as it ex-
ceeded 3^c. Reparation awarded. Max-
well v. W. P. & N. W. Ry. Co., 20 I. C.
C. 197.

(b) Where a new short line meets a
rate voluntarily established and long
maintained by a long line, it must be as-
sumed that if the rate is compensatory
for the long line it is compensatory for
a materially shorter line. Railroad Com-
missioners of Florida v. S. A. L. Ry., 16
I. C. C. 1, 5.

39. Notice.

See Cars and Car Supply, 9; Notice,
(a) While a long course of dealing
between the shipper and the carrier in-
volving daily or frequent shipments of
automobiles from a definite station might