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volume of traffic implies only the extent to which a particular article has become a subject of transportation, and does not imply that a large shipper of the same or like traffic can have any advantage over a shipper of smaller quantities. Like traffic of large shippers and of small shippers must have the same classification for carloads and the same for less than carloads." It is, therefore, fundamental with the Commission to-day that value and volume of tonnage is important in determining the necessity of establishing a commodity rate.23

§ 526. Value of the goods as an element.

The element of value in the commodity transported forms a proper consideration to be taken into account in the establishment of rate, since the greater the value the greater the carrier's liability as an insurer of freight, and the greater, therefore, the risk to the carrier in the transportation. Since the risk is greater, the cost of carriage increases by the amount of compensation for the greater risk; and it is, therefore, proper to give more valuable goods a higher classification than less valuable goods.24 But the increased rating given to articles because of greater value must be not much more than is proper for the increased risk; when value is brought in as an element in classification, the classification cannot, nevertheless, be determined arbitrarily. "Value is undoubtedly an element which should be considered in the fixing of rates. It is often a most important element, but plainly cannot be made an arbitrary standard independent of all other considerations." 25

23 Tone Bros. v. I. C. R. R., 26 I. C. C. 279.

24 Howell v. New York, L. E. & W. R. R., 2 Int. Com. Rep. 162, 2 1. C. C. 272.

Value must be taken into consideration in framing classifications and rates. Ford Co. v. M. C. R.. R., 19 I. C. C. 507.

Market value of commodity considered in determining classification. Nucoa Butter Co. v. E. R. R., 20 I. C. C. 174.

25 Prouty, Com., in Grain Shippers' Ass'n v. Illinois Cent. R. R., 8 I. C. C. Rep. 158.

Value as element in determining

$ 527. Different classification of coals.

Upon the ground of difference in value a different classification of bituminous and anthracite coal has often been justified. 26 "Carriers in making separate classifications, or rates for different coals, take into consideration, not only the expense of transportation, but the value of the freight and worth of the transportation to the shipper; the exceptional qualities which fit the more valuable anthracite for domestic and special uses and cause its large consumption in less distant markets; the shorter distance from the mines to the principal markets rendering the transportation proportionately more expensive, and the necessity for so apportioning the transportation charges between the anthracite of different sizes and values that the more valuable may bear the greater charge." 27 Therefore, in a recent proceeding it was remarked that rates on bituminous coal, being generally lower than on anthracite coal, a rate on anthracite coal, which was higher than the rate on bituminous coal on another road was not to be held unreasonable. 28

§ 528. Bases of comparing values of goods.

The bases of comparing commodities may be seen more clearly by still other illustrations. In the past the same rate was applied on grain and the products manufactured from grain; of late the rate upon the product has been somewhat higher, and a separate rate provided for articles known as by-products.29 In the South manufactured products and crude products are still often rated alike.30

rating. Barr Chemical Works v. P. & R. Ry., 20 I. C. C. 77.

The Commission commends the idea to the consideration of the carriers. Union Pacific Tea Co. v. Pa. R. R., 14 I. C. C. 545.

26 Cox Bros. & Co. v. L. V. Ry. Co., 3 Int. Com. Rep. 460, 4 I. C. C. Rep. 535.

Smithing coal, being of greater

value, may properly be charged higher rate than ordinary bituminous coal. Sligo Iron Store Co. v. U. P. R. R. Co., 19 I. C. C. R. 527.

28 Meeker & Co. v. L. V. R. R. Co., 21 I. C. C. 129.

29 Grain Rates in C. F. A. Territory, 28 I. C. C. 549.

30 German Kali Works v. A., T. & S. F. Ry. Co., 28 I. C. C. 223.

A classification could not be based on the value of a particular shipment, since the number of classes would be too large, and the refinement too subtle, for practical operation, and on the evidence presented the Commission was not justified in withdrawing a particular commodity varying in value, density and dimensions with each other, from the general class to which it belonged.31 It is the class to which the shipment belongs which determines the matter of rating; thus brooms, as a manufactured article, should, in accordance with accepted principles, pay a rate higher than broom corn, which is raw material. 32 Faced brick are relatively so much more expensive than the ordinary sorts, and the damage to them in transit would run into so much higher figures, that a higher classification is plainly justified. 33 And generally speaking due weight must be given to differences in value of commodities, and that difference is not limited by measure of difference in risk.34 Thus a very low rate can be given on scrap tin plate, a refuse of little intrinsic value, invoice value being about $5 per ton, as it can move only under a rate relatively low compared with other articles usually classed as junk.3 The fact that sand is a low-grade commodity and gives rise to practically no claims for loss and damage, makes it a case where low earnings per ton per mile would be regarded as reasonably remunerative in other parts of the country.36

§ 529. Differing value of some kind of freight.

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As has been seen, classification is not to be made too minute; and in general a difference of value between articles of the same kind does not lead to a different classification based on value. Thus, flour or cotton or silver ore

31 Forest City Freight Bureau v. Ann Arbor R. R. Co., 18 I. C. C. 205. 32 Broom Rates to Colorado Points, 28 I. C. C. 310.

33 James & A. Co. v. B. & M. R. R., 17 I. C. C. 273.

34 Union Tanning Co. v. S. Ry., 26 I. C. C. 159.

35 Vulcan Detinning Co. v. U. P. R. R. Co., 21 I. C. C. R. 93.

36 Rates on Sand to Houston, Tex., 26 I. C. C. 677.

would have the same classification, without regard to the quality and value of the particular shipments.37 To this there are some exceptions; thus in the official classification a difference is, or was, made in the classification of electrotype plates, engravings, paintings and pictures, statuary, bronze or metal, and stereotype plates, where the limitation of value is based upon the net invoice and required to be so expressed in the shipping receipts by shippers. The classification also contained rules restricting to fixed sums the valuation of livestock, marble, granite, ores, antimony, calamine, copper, lead, silver, tin, or mica,such valuation to be stated by the shipper in the shipping order or receipt; and the class rate is given only where the value is so restricted. But in general it would not be permissible to make a difference between articles of the same kind merely because of value. Where carriers have applied one rate to all automobiles, it is not possible for them to differentiate between machines of different values, and whether old or new, as there would be no place where a definite line could be drawn; and, under the circumstances, the Commission would not say that the placing of old and new automobiles in the same class is unreasonable. 38

Topic E. Carload and L. C. L.

§ 530. Different classification and rating.

A fundamental principle in all classification is that one rate shall be given when the goods are carried in carload lots, and a much higher rate when they are carried in less than carloads. This difference is legally proper; and the rate per 100 lbs. can be much less in C. L. lots than in L. C.

37 Page v. Delaware, L. & W. R. R., 6 I. C. C. Rep. 548.

See, however, Interstate Com. Comm. v. Delaware, L. & W. R. R., 64 Fed. 723.

38 Whitcomb v. C. & N. W. Ry., 15 I. C. C. 27.

In accordance with established

law, classification properly may not be predicated upon the use to be made of an article; use may, however, be considered as evidence of value; value has a bearing upon rating in the classification. Western Classification Case, 25 I. C. C. 442.

L.39 If a carload can be handled as a unit, in loading, transporting, and delivering, the cost to the carrier is obviously much less; and furthermore there is no waste through hauling a partly empty car, as must necessarily happen in many cases where less than carload lots are shipped. One idea in making the C. L. rates less than L. C. L. shipments is that the consignee will unload the former, while the railroad handles the latter.40 The difference between carload and less-than-carload rates must be a reasonable one. It must not be so wide as to be destructive to competition between large and small dealers, especially upon articles of general and necessary use, and which, under existing conditions of trade, furnish a large volume of business to carriers.41 An excessive difference between the carload and less-than-carload rates on the same commodity results in an undue preference to the carload shipper.

§ 531. When difference in classification is required.

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Generally speaking, carload ratings should be established whenever carload quantities are offered for shipment, and public interest requires this course.4 But, unless their rate is otherwise shown to be unreasonable, a shipper on C. L. rates cannot complain that there is not a higher L. C. L. rate. 43 Thus the Commission has recently held that there is no necessity for the establishment of a carload rate on champagne, if the present any-quantity rate is a reasonable rate for the transportation of that commodity in carloads.44 Carloading rating asked on cotton piece goods was refused, 45 on ground that business

39 Harvard Co. v. Pennsylvania Ry., 3 Int. Com. Rep. 257, 4 I. C. C. Rep. 212. 40 Re Advances in Demurrage Charges, 25 I. C. C. 314.

41 Thurber v. New York C. & H. R. R. R., 2 Int. Com. Rep. 742, 3 I. C. C. Rep. 473.

42 Western Classification Case, 25 I. C. C. 442.

43 Woodward- B. Co. v. S. P., L. A., & S. L. Ry., 29 I. C. C. 664.

44 Schmidt & Peters, Inc., v. A., T. & S. F. Ry., 28 I. C. C. 376.

45 Taylor Dry Goods Co. v. M. P. Ry., 28 I. C. C. 205.

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