CHAPTER XXXVI CHARACTERISTICS OF THE RATE § 1230. Fixing the particular rate. Topic A. Classification in Rate Schedules 1231. Prevelance of classification. 1232. History of railroad classification. 1233. Usual division into classes. 1234. Distribution of the burden by classification. 1235. Reasonableness of classification requisite. 1236. Influences determining proper classification. 1237. Like classification for similar goods. 1238. Different classification for dissimilar goods. 1239. Business expensive to handle. 1240. Service performed at lower cost. Topic B. Method of Fixing Rates 1241. Basis upon which charges may be made. 1242. Establishment of the unit of charge. 1243. Methods of computing freights. 1244. Different basis in supply services. 1245. Requiring metering not discrimination. 1246. Query as to the flat rate. 1247. Justification of the minimum charge. 1248. Principle applicable in all public service. 1249. Unit must be reasonable. 1250. Reasonableness of the period fixed. 1251. Minimum rate distinguished from equipment charge. 1252. Initial unit distinguished from repeat unit. Topic C. The Journey the Unit § 1253. The journey is a single entire unit. 1254. Ticket good only for through transportation. 1255. Passenger cannot take two journeys for a single fare. 1256. Two partial fares for a single journey. 1257. Part of journey completed before fare collection. 1258. Resumption of journey by ejected passenger. §1259. Passenger expelled at a regular station. 1260. Change of destination during the journey. 1261. Second journey on same train. 1262. No separate charge for a part of the transit. Topic D. The Shipment the Unit 1263. Maritime freight. 1264. Right to freight on land. 1265. Effect of carriage over a portion of the journey. 1266. No freight without delivery. 1267. Effect of partial delivery. 1268. Freight indivisible as a rule. 1269. Entire freight when goods arrive damaged. 1270. General principles as to additional charges. § 1230. Fixing the particular rate. There are certain details relating to the fixing of a rate which must be considered. Rate making has become enough of a science to have its own technique. The separate rate is the definite charge fixed by the person conducting a public employment as the price regularly demanded for performing the service asked. So many kinds of service are asked by so many people of most public service corporations, that it would be inconvenient to conduct the business without some established schedule of rates. It would indeed usually be a practical impossibility to fix a separate rate for each service by itself. Thus a classified schedule of regular rates is the usual characteristic of a public business. Indeed by modern legislation such rate schedules are made obligatory to make sure that all may know the rate in advance, and to make certain that all shall be charged the same rate. Various methods of charging, it will be seen, may be adopted in framing such schedules, so long as the rate imposed may be known with certainty. And this end is furthered by basing rates upon some unit of service. This is indeed the most salient characteristic of a rate, considered abstractly, that it is an entirety-the single charge for the whole service which is performed. Topic A. Classification in Rate Schedules § 1231. Prevalence of classification. It is obvious that classification is in many businesses necessary for convenience in rate fixing if for no other reason. And indeed some form of classification has been used from time immemorial. The first formal classification appears to have been made for toll roads, a system which was taken up naturally enough for canal tolls. For as soon as public service became a diversified business of large proportions fairness to the patrons as well as the convenience of the proprietors required a classification as the basis of fixing rates. In modern times classification has become the very foundation of railroad rates, and the question of charge is primarily a question of into which class the goods shipped fall. In other businesses than railroad operation elaborate classification of the services offered prevails, the various kinds of service which a telephone company offers its subscribers is one example. It may be admitted that as a classification gains in convenience, it loses in accuracy. No classification can be so minute as to conform to the differing varieties and conditions of traffic; and to separate differing grades or varieties of the same service into different classes with varying rates, even if it could be accomplished, would go far to defeat the real purpose of classification. § 1232. History of railroad classification. From the very nature of the case classification goes far back into the law of public service. Carriers and shipmasters were driven to it when their business became of general scope, and canal proprietors and highway owners published rough schedules from the outset. As the situation has developed in recent years the methods of classification of freight in the United States furnish the best illustration of the system. All goods that may by any possibility be offered for shipment are classified in such a way as to bring together into a few large classes such articles as can fairly be subjected to the same charge for carriage. A rate is then fixed for each class; not a difficult matter, since it has been found quite practicable to make the number of classes small. Unfortunately this classification is not uniform throughout the United States, the country being divided into three parts where different classifications prevail-the Official, the Southern and the Western, the boundaries being respectively the Potomac, the Ohio, and the Mississippi. As the existing classification goes far back and it has changed very slowly in details so that business has adjusted itself to the established classification, it requires considerable evidence of injustice to induce the commission to displace the existing classification. § 1233. Usual division into classes. The standard classification, which in each system contains five or six classes, while sufficient for ordinary commodities, does not and in the nature of things cannot cover exceptional cases, and especially cases of especially difficult carriage. In order to cover such exceptional cases, it is the custom to give certain commodities a rating above the first class, such as "double first class rates," or even higher. Furthermore, there is a continual tendency to differentiate commodities, and to seek a means of giving to some article a rate which falls outside, (usually below) these class rates. But sometimes there are intraclass ratings; such as a rate "forty per cent less than third class." This tendency is of course, opposed in its fundamental principle to the whole theory of classification, and if given play enough would soon put an end to the system on which present rates are based; and it is therefore not to be commended as a general expedient. If it seems necessary in any particular case, it is probably because the difference in rates of the two classes concerned is unduly great. § 1234. Distribution of the burden by classification. Not only would it be altogether inexpedient to fix the same rate for all service but it would be highly unjust. This is especially obvious in railroad transportation. Different articles require such different care in carriage that it would be unjust to fix a single rate that should apply to all articles carried.1 If a uniform rate were fixed for each pound carried, lead would be more expensive to ship than live stock; and if the rate were proportioned to bulk, a diamond would be carried more cheaply than fence posts. It is necessary in order to distribute fairly among the shippers the burden of the entire schedule of rates to graduate the charge according to the nature of the article carried. Classification is recognized as a necessary method of adjusting the burdens of transportation equitably upon the various articles of traffic, in view of differing circumstances and conditions, and but for the necessity of such adjustment, considerations based alone on weight and distance of haul would probably determine rates, except as modified by competition. This method, while securing practical uniformity, would probably deprive many articles which are now important factors in commerce of the benefit of transportation to distant points.2 § 1235. Reasonableness of classification requisite. As a practical matter, therefore, the reasonableness of a particular rate depends upon the reasonableness of classification. Manifestly in determining respective classi 1 Rules for the intervention of classification sheets. See Smith v. Gt. Northern Ry. Co., 15 N. D. 195, 107 N. W. 56 (1906). 2 Results of making false classification. See Illinois Central R. R. Co. v. Seitz, 214 Ill. 350, 73 N. E. 585 (1905). |