Carriers leading from southern mills to the Ohio River had advanced their rates on yellow pine lumber 2 cents per 100 pounds, and this advance had been condemned by the Commission, which had ordered carriers to cease and desist from charging the advanced rates. Suit having been brought by the Commission to enforce this order, the court below decreed in favor of the complainant, and this decree was affirmed by the circuit court of appeals. In the Supreme Court, counsel for the railways asked the court to lay down certain rules of transportation law by which the reasonableness of rates might be determined. This the court declined to do, stating that while the determination of a reasonable rate might frequently involve the application of legal principles and that, in such event, the court would pass upon the correctness of the principle, still, as a general proposition, the reasonableness of rates was largely a question of fact, which must be passed upon, in the first instance, by the Commission, whose findings of fact would not be lightly disturbed. The court, at page 454, used this language:

** * * And the findings of the Commission are made by law prima facie true. This court has ascribed to them the strength due to the judgments of a tribunal appointed by law and informed by experience. (Louisville & Nashville Railroad Co. v. Behlmer, 175 U. S., 648; East Tenn., etc., Railroad Co. v. Interstate Commerce Commission, 181 U. S., 1, 27.) And in any special case of conflicting evidence a probative force must be attributed to the findings of the Commission, which, in addition to "knowledge of conditions, of environment, and of transportation relations," has had the witnesses before it and has been able to judge of them and their manner of testifying.

It also cited with approval the following words from its opinion in Cincinnati, Hamilton & Dayton Railway Company v. Interstate Commerce Commission, 206 U. S., 142:

** * * The statute gives prima facie effect to the findings of the Commission, and when those findings are concurred in by the Circuit Court we think that they should not be interfered with, unless the record establishes that clear and unmistakable error has been committed.

Upon this same point, as applied to the actual work of the Commission, the case Atlantic Coast Line Railroad Company v. North Carolina Corporation Commission, 206 U. S., 1, is instructive.

The North Carolina commission had ordered the Atlantic Coast Line Railroad to put on an additional passenger train for the purpose of making with the Southern Railway a connection which the public interest required. The railroad declined to obey, and appealed to the State court, as it might under the statute of North Carolina, for a review of that order.

Upon a trial by jury, in accordance with the law of that State, a special verdict was rendered to the effect that the public interest required the putting on of the additional train; that the expense of operating it would be $40 per day and that the receipts would be $25

per day. The trial court upon this verdict gave judgment for the railway, but this was reversed by the supreme court of North Carolina, which decreed an enforcement of the order of the commission.

Upon error to the Supreme Court of the United States, the decree of the supreme court of the State was affirmed. It was confidently insisted that inasmuch as the cost of operating the train was more than the receipts to be derived from this source, here was a clear taking of property without due process of law, and that, therefore, the order of the commission in question was in violation of the fourteenth amendment.

The court distinguished between a single rate and a schedule of rates; between a single train and an entire passenger service. It held that while the State must allow to this railroad company a reasonable return for the entire service rendered by it, it did not, as a matter of law, follow that the State might not in the public interest require that railroad to render a particular service for less than the actual cost. It decided, in substance, that an order of this kind, made with respect to a single rate or a single practice, would not be obnoxious to the due process clause or the equal protection clause of the fourteenth amendment, unless it was so arbitrary and unreasonable as not to be within the fair limit of legitimate regulation.

This, when considered in connection with the language of the court in the Illinois Central case above referred to, indicates that a decision of the Commission upon a question of fact which involves no misconception or misapplication of law, and which is regularly made, will seldom be disturbed unless it is manifestly wrong.

Another point of considerable general interest was passed upon by the court in Illinois Central Railroad Company v. Interstate Commerce Commission, supra. The Commission had frequently held that rail ilways might not tax the public through the medium of their rates both for the betterment of their properties and for dividends to their stockholders, and this holding was repeated in the above case. The defendants confidently insisted that this was error upon the part of the Commission, relying upon Union Pacific Railroad Company v. United States, 99 U. S., 402, in which the Supreme Court had declared that in determining net revenues for the purposes under discussion in that case, improvements to the property might properly be charged against gross revenues. The court in the Illinois Central case discussed the Union Pacific case, showing that it had no application to the question as presented, and expressly decided that improvements which added to the permanent value of the property, which had presumably increased the earning power of the property, which were not to be used for a single year, but for many years, should, as between the public and the railway, in estimating a reasonable transportation charge, be made out of net income and not out of earnings.

In other words, that a railroad company has no right to put its earnings into betterments and at the same time pay its stockholders a dividend, provided the dividend and the amount invested in improvements would together exceed a reasonable return upon the value of the property.

RATE SCHEDULES AND APPLICATION OF RATES.

Definiteness, clearness, and simplicity in stating transportation charges, uniformity in applying the rates so stated, and stable conditions are ends aimed at in the law and sought by the Commission in administering it.

Prior to the enactment of the amended law the time of notice of changes in rates required by the act was too short to give stability to conditions of transportation, even if the terms of the law had been carefully observed. Tariffs were issued upon statutory notice and upon no notice at all. Opportunities to get business were met by issuing a tariff "expiring with this shipment;" by quotation of rates found in some other carrier's tariffs and applicable via another route; by quotation of rates not found in any tariff; by forwarding under regular tariff rates and refunding an agreed-upon portion thereof and by forwarding under regular tariff rates and agreeing to "protect" any rate of any competing carrier. Some carriers openly published declarations of which the following is a sample:

"Tariffs published by connecting lines to competitive points on this road, or to points beyond, which do not read in connection with this road, will be protected by this road, if the rates in such tariff are less than those published by originating line in connection with this road."

As a necessary outcome of such practices the official files of tariffs were very voluminous and contained an endless number of contradictions and conflicts. To bring order out of this condition and at the same time have all the carriers conducting transportation to the utmost extent of their overtaxed facilities was an important, a delicate, and a large undertaking.

This work was approached by the formation, after exhaustive conferences with traffic officials of carriers, of a code of regulations governing the construction of tariffs, which was promulgated to become effective May 1, 1907, and June 1, 1907, as to freight and passenger tariffs, respectively.

This code has been supplemented from time to time, as occasion demanded, by administrative rulings of the Commission, by which many misunderstandings and differences of opinion have been harmonized. It is pleasing to note that such rulings have, very generally, been cheerfully accepted by carriers and shippers.

As an aid to elimination of the objectionable, contradictory, and conflicting features which were contained in the tariffs that were on

file and in use when the amended act became effective, and for the purpose of permitting carriers to promptly adjust interstate rates in harmony with intrastate rates that were changed by State authorities, the Commission has exercised its discretion to permit changes in rates and schedules on less than statutory notice more freely than it would under different conditions.

Many of the features that have been eliminated affected the interests of so many shippers and localities that considerable time was necessarily consumed in arranging for and providing superseding rates and regulations which would not work severe or irreparable injury to innocent parties. Much has been done along this line, much is now being done, and much remains to be done. The task is by no means hopeless and, now that a good foundation is laid for it, more progress will be apparent on the surface in the future. In this work the Commission has insisted upon all of the progress that was possible within the limits of the ability of the carriers' tariff and rate forces and the capacity of the available printing facilities. In the twelve months ended November 30, 1907, there were filed with the Commission 220,982 tariff publications, all containing changes in rates and rules governing transportation, and about 400,000 notices of concurrence in tariffs.

Under former practices, adopted and followed by the carriers, no provision was made for definite concurrence by a carrier in tariffs issued by another carrier. The general, if not universal, understanding was that a carrier accepted any rates published by another carrier if it did not file specific notice of nonconcurrence therein. This liability was not, however, always accepted, and numerous complications and controversies arose from a carrier denying responsibility under a tariff on the ground that it had not specifically concurred therein. The tariff regulations adopted by the Commission require affirmative, definite concurrence from a carrier before it may be named as a party to a joint tariff.

Much traffic is moved under joint tariffs, participated in by many carriers, and issued by joint agent, who acts under powers of attorney given by his several principals. This plan commends itself strongly. It operates to reduce the number of tariff publications and assists greatly in avoiding conflict between tariffs of a given carrier in two or more of which conflicting rates upon the same commodity, between the same points and at the same time are, under old practices, not infrequently found.

The unrestrained and run-mad competition which has been resorted to in the past has resulted in the establishment of some conditions, privileges, contracts, and allowances in connection with the furnishing of transportation by carriers, which created, or which contain the elements of, the discriminations which the law condemns.

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Many of these are of long standing, are far-reaching in their effects, and involve some fine questions of law. The requirement that every privilege or charge in connection with the transportation offered by a carrier shall be plainly stated in a duly published, filed, and posted tariff will, no doubt, eliminate the discriminatory practices, except such as may be the subject of litigation before this Commission or in the courts.

POSTING TARIFFS AT STATIONS.

The comprehensive terms of the act with regard to the posting of rate schedules at stations of carriers were apparently intended to serve the double purpose of thus affording shippers and patrons opportunity to ascertain for themselves the lawful charges for the service sought by or rendered to them, and of also guarding against the adoption or use of tariff rates or rules without giving full public notice thereof. The clear purpose of the law is that every person may have reasonable opportunity to gain through proper effort on his part full knowledge as to the rates published and charged by carriers.

In order that practicable and useful regulations and practices might be established authority was vested in the Commission to modify the terms of the act in this particular. One of the more important carriers has at this time as many as 15,700 tariffs in force, including those in which it has concurred. Less important carriers have correspondingly large numbers of tariffs. Manifestly a double file, or even a single file, of all of a carrier's tariffs (including those issued by others and in which it concurs) at each station and office would be utterly useless and confusing to the average seeker for information therefrom. Such a requirement would involve great expense for printing and extra employees with no corresponding good or benefit to either public or carriers; would have a tendency to reduce the number of joint tariffs and thus deprive shippers and travelers of many advantages of through routes now enjoyed and would necessitate the employment of men to stand constant guard over the tariffs if they were to be kept complete and in perfect order. The Commission has pursued investigation of this subject and has held public hearing thereon. The testimony of thousands of station agents is that it is but rarely (once or twice a year) that any person requests permission to see a tariff. This is no doubt largely accounted for by the fact that carriers generally furnish tariffs liberally to interested and regular shippers. Thousands of shippers have joined in requests upon the Commission to modify the provisions of the act and to not require the posting of a mass of tariffs that would be less useful than the old practices.

It is customary for patrons to ask the station or ticket agent for information as to rates and privileges in connection therewith, and