entitled to the reasonable rate which its location and other advantages dictate without taking into account conditions which bring about lower rates to other points.54 While carriers are justified within proper limitations in making somewhat higher rates to branch-line points than to mainline points, where the same rate is applied to all points both on the main and branch lines, it is to be tested as a whole. 55

§ 590. Carriage in opposite directions.

There is no reason for requiring the same charge for carriage between the same points in opposite directions. 56 Various factors which properly enter into the rate may be different in the two cases. In a case 57 where a higher rate was charged for the eastward than for the westward carriage, the Commission said: "The claim is, in substance, that the rate of $350 eastward is unreasonable in view of the fact that the rate over the same line and between the same points westward is only $263. This fact alone is relied upon to support the charge. The two rates have no necessary connection or relation, and the fact that a rate over a road or line in one direction is materially higher than the rate on the same class of traffic over the same road or line and between the same points in the opposite direction does not, as in case of hauls over the same line in the same direction, establish prima facie the unreasonableness of the higher rate." On the other hand, where in the direction of lighter traffic a railroad is carrying many empty cars, it will be justified in lowering the rate in order to fill the cars. "When the preponderance of freight is so largely in one direction that the supply of empty cars exceeds the demand for return loads at full

54 Board of Trade of WinstonSalem v. N. & W. Ry., 16 I. C. C. 12.

55 Idaho Commercial Clubs V. O. S. L. R. R., 18 I. C. C. 562.

56 Macloon v. Boston & M. R. R., 9 I. C. C. Rep. 642.

57 Duncan v. Atchison, T. & S. F. R. R., 6 Int. Com. Rep. 85, 102, 4 I. C. C. 385.

rates, it is not unlawful to encourage business by affording transportation on less profitable terms." 58 The fact that a rate in one direction is lower than the rate in the opposite direction is not of itself a justification for advancing the former rate. 59

§ 591. Passenger fares generally on mileage basis.

No such principles generally prevail in establishing passenger fares. These are usually made upon a mileage basis, and do not decrease inversely with the distance as in freight rates. This was brought out in a remarkable case before the Interstate Commerce Commission,60 where the through interstate rate was found to be more than the combined local intrastate rates. The Commission expressed no great disapprobation of this, saying simply: "From the local passenger tariff and distance table in effect on the Charleston & Savannah Railway on and after September 1, 1896, it appears that interstate passenger fares between Savannah and South Carolina points commence with 3 cents per mile to or from Sand Island, S. C., 20 miles from Savannah, and with slight variations increase with distance up to a mileage rate of 3.86 cents to Fetteressa, 105 miles from Savannah and 10 miles from Charleston. The mileage rate between Savannah and Charleston, as stated above, is 3.826 cents. While in freight service the general rule is that the rate per ton per mile should decrease as distance increases, in passenger service a single mileage rate for all distances is often found to prevail. It is unusual to find either freight or passenger rates per mile increase with distance." 61

58 James v. East Tennessee V. & G. R. R., 2 Int Com. Rep. 609, 3 I. C. C. Rep. 225.

59 In re Advances on Potatoes, 25 I. C. C. 247.

60 Savannah Bureau v. Charleston

& Savannah Ry., 7 I. C. C. Rep. 601.

61 Through passenger business can be carried at lower rates than strictly local business. Commercial Club of Salt Lake City v. A., T. & S. F. Ry., 19 I. C. C. R. 218.

Topic D. Grouping Stations and Basing Points

592. The system of grouping.

The railroad might make a separate rate for each station on its line, so that a charge must be established for each possible combination of two termini. This is the natural rule, and not an unreasonable one. But for various reasons it has become usual to group together for the purpose of fixing rates a number of neighboring stations, and make a uniform charge for any station in the group. The most extensive blanketing of rates known applies in the transcontinental tariffs, the rates, for instance, being found in one proceeding to be the same to the Pacific Coast from all points east of Colorado Common Point territory."2 And the Commission has said that it is by no means certain that postage-stamp rates, as applied to the distribution of the products of the Pacific Coast States, are not upon the whole for the general public good."3 It should be noted also that distance is largely disregarded in so far as the North Atlantic port differential adjustments are concerned.64 So common has this practice become, that it is often looked upon as natural; and one city has sometimes demanded as a right that it should be grouped with a neighboring city. For instance, Omaha applied to the Commission to be grouped with Council Bluffs (which is situated at the other end of a long and expensive bridge over the Missouri River), and to be given identical rates from Iowa points; but the Commission held that there was no legal right to have stations grouped, and that a difference in rate was justified.65

§ 593. Distances considered in grouping.

All points must be considered in determining reasonable64 Chamber of Commerce of New York v. N. Y. C. & H. R. R. R., 24 I. C. C. 55.

62 Arlington Heights Fruit Exchange v. S. P. Co., 22 I. C. C. R. 149.

63 Indianapolis Freight Bureau v. C., C., C. & St. L. Ry., 23 I. C. C. R. 195.

65 Commercial Club of Omaha v. Chicago & N. W. Ry., 7 I. C. C. Rep. 386.

ness of group rates.66 The propriety of a grouping must in any case depend on the peculiar facts and conditions upon which it is predicated.67 Any grouping, whether of rates, localities, or commodities must not be unreasonable or result in unjust discrimination.68 In every zone rate, the near-by point pays a proportionally higher rate than a more distant point.69 Distance is an important, but not necessarily a controlling factor, in rate questions; whether or not it is conclusive depends upon the facts in the case.70 It does not necessarily follow, that a carrier not competing for traffic in this way thereby subjects itself to an order compelling it to do so.71 If strictly distance rates were applied to grain moving from points of origin, it is apparent that at a certain distance the rate would be prohibitive.72 Length of haul and other transportation factors have a more or less definite relation to the rate that a carrier may reasonably demand for a transportation service.73 But it has been held that the voluntary extension of reasonable rates to points much more distant is not of itself unlawful.74 And, although it is often said that distance is always a factor in determining reasonableness of rate, this is always qualified by saying that distance is not necessarily controlling.75 It seems to be agreed that larger blankets are justified for longer distances than would be permited where shorter distances are involved.76 When carriers are given permission to change from the mileage

66 Beall v. W. A. & M. V. Ry., 20 I. C. C. 406.

67 26 I. C. C. 515.

68 Sun. Co. v. I. S. R. R. Co., 22 I. C. C. 194.

69 Schmidt & Sons v. M. C. R. R., 19 I. C. C. 535.

70 Muskogee Traffic Bureau v. A., T. & S. F. Ry., 17 I. C. C. 169.

71 Hydraulic Press Brick Co. v. St. L. & S. F. R. R., 13 I. C. C. 342.

72 Kansas City Transportation Bu

reau v. A., T. & S. F. Ry., 16 I. C. C. 195.

73 Memphis Cotton Oil Co. v. I. C. R. R., 17 I. C. C. 313.

74 Northwest Leather Co. v. O. I. R., 21 I. C. C. 66.

75 Corporation Commission of N. C. v. N. & W. Ry., 19 I. C. C. R. 303.

76 Mutual Rice Trade & Development Ass'n v. I. & G. N. R. R., 23 I. C. C. 219.

basis to the group basis it is usually insisted that the short hauls shall be properly provided for."

§ 594. Grouping must be reasonable.

While grouping is permissible in a proper case, it must nevertheless be reasonable; the Commission cannot approve a blanket rate which imposes upon any point an unreasonable burden.78 Carriers have followed the principle that whenever distance between certain points constitutes a relatively small percentage of distance between any of those points and ultimate market, such originating points should be grouped for rate-making purposes.79 Where grouping is reasonably done, the shorter distances to the markets may be determined by the average distances from the points reached by two or more systems; and where there is no such point in a group the distance should be computed from a point centrally located.80 In stating rates between remote sections, territorial groups of considerable extent must be employed; and differences in distance of several hundred miles are frequently disregarded under the blanket plan of rate making. The boundary line to mark the limits of application of blankets rates may not be so artificially drawn as to subject shippers immediately outside the favored zone to unjust discrimination.82 Even when grouping is resorted to in order to preserve competition in commodities, as where railroads entering New York grouped the stations which supplied the city with milk, it was held that it would be unreasonable to make a uniform rate for all milk stations to New York, but reasonable to establish zones at proper intervals by which all milk from stations up to a certain distance, say 40 miles, should pay the same rate, then all

77 In re Advances on Cottonseed Products, 25 I. C. C. 237.

78 Switzer Lumber Co. v. K. C. S. Ry., 25 I. C. C. 611.

79 Rates on News Print Paper from Sault Ste. Marie, Ont., 26 I. C. C. 13.

80 Superior Commercial Club v. G. N. Ry., 25 I. C. C. 342.

81 In re Advances on Barley, 24

I. C. C. 664.

82 Southern Furniture Mf'rs Ass'n v. S. Ry., 25 I. C. C. 379.