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 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. 6 8. 158. 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 facturer's description of an article designed to induce its purchase by the public also describes it for transportation, and carriers may accept his description for purposes of classification and rates.1 In another case 2 the Commission held that two kinds of soap advertised as alike, and substantially equal in value, should be classified alike for transportation purposes. Products classified alike are presumptively entitled to equal rates;3 in classifying them, cost, bulk, weight, value, and their general characteristics should be chief considerations;5 clearness and simplicity should be aimed at and irregularities and inconsistencies eliminated; and a classification must have the same construction in favor of all persons. Unjust discrimination against a commodity is not shown by evidence of a lower classification for articles widely dissimilar in the elements of risk, weight, bulk, value, or general character. The proper method of comparison is the classification accorded by the carriers to similar articles. Railway officials who have made a classification cannot testify to their understanding of its construction. A classifica tion sheet is put before the public for general information; it is supposed to be expressed in plain terms, so that the ordinary business man can understand it, and in connection with the rate sheets can determine for himself what he can be The persons lawfully charged for transportation. who prepared the classification have no more authority to construe it than anybody else, and they must leave it to speak for itself.1 Through Rates. — Through rates and through billing are matters of agreement among carriers engaged in interstate commerce. The Commission has no power to compel them against their consent to enter into arrangements for through rates and for through bills of lading, although the statute encourages such connections,3 because they furnish cheapened rates and greater facilities to the public, while at the same time they give increased employment and earnings to a larger number of carriers.1 Railway companies may make whatever rates, form whatever lines, and establish whatever differentials they deem best for the purpose of securing and conducting transportation, provided the just interests of the public are not sacrificed thereby; and whether in so doing they deal with each other wisely or unwisely, fairly or unfairly, is not a matter for the Commission to decide. A through bill of lading is evidence of a through rate. It is not necessary that it should be formally "quoted" by one of the carriers to another who is engaged in the making of it to constitute it a through rate. Names are nothing in such a transaction; the law looks at the elements and substance of the transaction itself. The fact that the initial or an inter 3 mediate carrier charges the full local rate does not destroy the through nature of the shipment,1 nor is a through rate illegal which, when divided between carriers, gives them less than their local rate, provided that the through rate itself is not less than some one of the local rates, or unjustly discriminating against individuals or localities, or so low as to burden other business with part of the cost of the business upon which it is imposed.2 Reasons may exist for making through rates less than the sum of the local rates, and traffic conditions may warrant carriers in exacting a share in through rates which gives them more per mile than that which results to a connecting carrier from the division accepted by it; but in such cases carriers must give proof of the circumstances which justify the disproportionate division of a through rate. Although a shipper or consignee has no direct interest in the way a joint rate is divided between carriers, nor in the amount of the division received by each carrier, he is entitled, nevertheless, to inquire into such division. when he complains that the joint rate is unlawful; for the amount received by the different carriers may be significant upon the reasonableness of the aggregate charge; and when an unlawful rate results from some arbitrary division exacted by one of the carriers, the Commission will find the facts and state its conclusions with respect to such share 3. 450. 48.277. 12. 131; 6. I. 8 5 6. I. |