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open, with all the attending circumstances and relations. While upon the facts as they now appear there seems to be considerable foundation for the claim that the rate in question is too high, at least upon some of the defendant roads, nevertheless it would be unreasonable and unjust for the Commission to pass upon a question involving such important rights without full information upon the entire subject involved. See Annual Report of the Interstate Commerce Commission, 1 I. C. C. Rep., 313; Evans v. Oregon Railway & Navigation Co., ib., 336.

2. The other question, in respect to the practice of making a uniform milk rate from all stations upon all the defendant roads, is very thoroughly presented in the proofs and the arguments. The petitioners evidently feel that it constitutes a substantial grievance. In fact this proceeding, as the case has been presented, is principally an attempt by them to secure what they denominate "a different method of charging freight," meaning a system of rates which shall be either framed upon a progressive mileage basis, or much less widely grouped. Their claim is based upon the third section of the Act to regulate commerce, which forbids the giving of any undue or unreasonable preference or advantage to any particular person, locality, etc., and the subjection of any particular person, locality, etc., to any undue or unreasonable prejudice or disadvantage in any respect whatever. Their argument is tersely stated as follows: "Undue advantage to the one and undue prejudice to the other is just as great when the difference is made in the increased amount of the service rendered for the same price as it is when the difference is made in the increased price charged for the same amount of service." And the particular discrimination complained of is summarized in the statement that the Erie road, irrespective of the length of the haul, charges residents of a locality 183 miles from Jersey City the same price for the transportation of milk that it charges those of another locality only 21 miles from the common terminal.

This method of arranging freight rates, technically known as the grouping of rates, has been long practiced by carriers; various grounds of justification have been assigned, accord

ing to the different conditions which in each case have called it into operation.

Under ordinary circumstances it is apparently against the carrier's interest so to group its charges. Upon a wholly independent line of road disconnected from any competitive surroundings, and able to fix its tariff upon rigid principles, it is probable that a mileage basis would be quite strictly adhered to, for the purpose of obtaining a fair remuneration upon short-distance traffic and an increasingly larger sum at more distant points, thus producing the greatest possible revenue in each instance. Yet upon lines like this most simple example, occasions have arisen when the competition of business interests, as urgent in its stress and as imperative in its demands as competition between carriers, has been relied upon by shippers as sufficient to constrain the grouping of rates from different points. A considerable extent of territory containing a large number of mines, quarries, or manufacturing establishments, has frequently been given identical freight rates, upon the ground that otherwise the more distant points would be driven from the market and thus important industries might be ruined, resuiting indirectly in serious loss of revenue to the road. This argument has even been pressed to the extent that manufacturers, for example, 150 miles from a common terminus have claimed that they should receive the same rates given to others only 50 miles from the same point. They have insisted that their expenses in other respects were substantially the same, and they have demanded the same rates of transportation as an alleged business necessity. This theory, in certain localities and upon certain commodities, has at times been followed to some extent, and it is not unusual to hear it said that it may eventually be found to be both expedient and just to place all freight rates for like commodities at the same sum per hundred pounds, regardless of distance, upon the principle which now controls the transportation of mail matter by the Post Office Department-the "postage-stamp system," so-called. This is undoubtedly an extravagant way of looking at the subject, for while it is true that the fixed expenses of a railroad or steamboat line are constant, and its maintenance is a

steady and uniform outlay, and that the cost of receiving and delivering any given article of freight, including the use of the terminals and other facilities, bears no relation to the distance traversed but is substantially alike in all cases, so that the service in many respects could be measured as fairly by the quantity transported as by the length of the haul, nevertheless the fact remains that upon many and perhaps most articles of traffic the haul is the leading element of expense, and the distance fairly controls the rate of compensation. This is particularly true in respect to passenger traffic; in respect to freight the rate customarily varies per hundred pounds at each distance point established in the rate sheet, the ratio of the increase of the rate diminishing with the increase of the distance, thus combining the two elements in an approximately just result. No'opinion is now expressed or intimated in respect to how far the grouping of rates can be properly carried upon considerations founded solely upon the competition of business, or as to whether such considerations are, to any extent, admissible.

Another occasion of a somewhat wide grouping of rates has arisen under the operation of the fourth section of the Act to regulate commerce. Prior to April 5, 1887, examples were very common in which a larger sum was charged for a shorter than for a longer distance over the same line in the same direction. The long and short haul provision of the law involved new methods, and upon many roads and systems the rate established to the more distant point was taken as the basis to which the tariff at intermediate points was reduced. This, it was alleged, was the only alternative; for to raise the rates at more distant points, where the competition of other carriers controlled the traffic, involved retiring from such business altogether. The tariffs on file with the Commission show that at a vast number of interior points the rates are now grouped so as to be the same as at some more distant terminal, and the explanation given is that heretofore they were higher than at the point beyond, but were reduced to bring them into conformity with the law.

This, of course, cannot be regarded as directly authorized

by the law, for the fourth section of the Act provides that "this shall not be construed as authorizing any common carrier within the terms of this Act to charge and receive as great compensation for a shorter as for a longer distance." And it is a fact to which the Commission has already called attention, that one effect of this system of rate-making is to interfere with the business of jobbing centers located between the original shipping point and the various points of destination. When rates are made, for example, from Chicago to La Crosse at a given sum, and at the same rate from Chicago to all points between La Crosse and Mankato or St. Paul, it is obvious that the Chicago jobbers have a great advantage over the La Crosse jobbers, who cannot buy, re-ship and sell without an addition to the given rates equal to the local charges from La Crosse to the points of consumption. To what extent this practice may be legitimately pursued has not as yet been considered by the Commission. La Crosse Man. & Jobbers' Union v. C., M. & St. P. et al., 1 I. C. C. Rep., 629. But the legislative purpose as manifested in the 4th section of the Act to regulate commerce is distinctly in the direction of relieving the smaller points-in other words, the ultimate consumers-from the burden of rates higher than those paid by more distant or competitive points, and when the application of the rule in reducing intermediate or local rates to a common level, or in increasing rates on long-distance traffic, has surprised the merchants at distributing towns, an investigation has usually shown that their former prosperity was based upon two elements, both working in their favor and both denounced by the Act to regulate commerce, to wit, the granting of rebates and special rates in their behalf, and the making of higher rates to local points than to more distant terminals or competitive centers. Creurs v. Richmond & Danville R. R. Co., 1 I. C. C. R., 401; Martin v. Chicago, Burlington & Quincy R. R. Co. et al., 2 I. C. C. R., 25.

This explanation is given in view of the claim which is made in complainants' brief that milk and cream are the only articles the tariff upon which "takes no account of the length of the haul, but charges as much for a long haul as for a short

one." This belief is wholly incorrect. There are few lines which do not show a considerable grouping of rates upon one consideration or another. The principle of grouping is not novel. The propriety of its application is properly open to challenge in every case, and every case must be justified upon its own facts and peculiar circumstances. The above examples of its use have been given for the purpose of distinguishing them from the question here presented.

The transportation of milk is in some respects a very peculiar description of traffic. The expenses are wholly out of proportion to the expenses involved in respect to any other article of freight. It must be handled upon passenger trains or by a special train service. Time is of the first importance. The period which can be permitted to elapse between its production and its delivery to the consumer is necessarily very short. This fact involves the organization of methods adapted solely to this traffic. Cars must be specially equipped. The route covered by the train must be rapidly passed over, and the empty cans returned with like promptitude. Accuracy is required in every detail. Protection against frost must be afforded. A large addition to the number of train hands is required. A long section of the terminal station is appropriated to this use, where a special staff of clerks and laborers are on duty throughout the night. It is an exceptional traffic in the system of handling made necessary by the unusual risk and expense.

It is also easy to perceive that these additional arrangements and expenditures apply to the whole quantity of milk handled on the line, without any reference whatever to the length of the haul. The special equipment and trains, the extra labor and care, the terminal service and supervision, are all employed upon the milk business as a unit. This fact is recognized by the complainants, for their brief well says: "It will be observed that the character of the service rendered is the same, and every element which goes to make up the expense account to the railroad performing this service is identically the same, whether the milk is taken to its cars 183 miles from New York or 21 miles from New York, except in the length of the haul." And it may well be

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