The Washington herald., 1913-09-15
The |. c. c. and Railway Rates.

The Interstate Commerce Commits
sion next month will hear the Sppli-
cation OF the Eastern railways for
permission to increase their freight
rates. Some fifty roads in the terri
tory lying north of the Ohio and
east OF the Mississippi are concerned
in this application, and the magnitude
OF the interests involved may be
gathered from the fact that the an
nual freight revenues OF these roads,
according TO compilations by The Ma
ton, aggregate a billion dollars. The
advance is sought on all classes Of
freight, and 4 uniform increase of 5
per cent i desired. It is within the
power OF the Interstate Commerce
Commission to grant or refuse the
application. The difficulty lies in the
TACT thai under the existing law it is
inCu1 bent ni the carrier desiring TO
increase i given rate to show that the
proposed new rate IS reasonable"
There !, a fundamental obstacle in
,olycd. escape from which seems i'm
possible. unless by mc4n~ Of additional
court decisions, the present twilight
zonc" 'a made more lucid than it is
now. This twilight zone was demar-
Gated some sixteen years ago by the
Supreme Court OF the United States
in the iamou, Nebraska maximum
rate case. The decision was handed
down by the late Judge Harlan 1t
laid down two opinions a. to "rca-
sonablenc~-' OF rates, one concerned
with The carrier. the other designed
to prut-s, the shipper. 1t said that
the carrier Was entitled 10 d fair re-
turn on the value Of the property used
in the public service, and that the
shipper Was entitled to DC charged
no more than the -crvice was ''rea-
sonabh" worth. In the case of the
carrier, :hc object va, to prevent con-
h,catiun. and in the case OF the shipper
to prevent exploitation The former
established Il minimum and the latter
4 maximum. and between the Two was
the twilight lonv,
1t Is no. ,oo much to LAY. argues
The Nation. that the court. when il
said tha, the carrier va, entitled to
a lair r,tuu on value OF property
in service. mean: that it was entitled
to uo more than this The language
Of the In,cr-tate Commission in many
decisions bears this construction, and
it has come to be regarded as a more
or less settled principle In other
words. where no conf>cation can be
shown by the carrier. the reasonable
ness OF the rate is considered proven !
1t can ,afc'y be said that the entire
structure Of the rates involved in the
present case has grown up under a
process OF competition governed and |
guided by factors having nothing to .
do with the carriers position and hav-
ing everything to do with that of the !
shippers. It being impossible for a
carrier to determine accurately in ad-
vance wha, prof, il can make on
given commodity carried at d given
rate, the rates were made with refer
ence to moving the tonnage; that is
by consideration OF tho shippers ca
pacity and necessities. A railway
could determine that less than Ger
tain rate would not give it the actual
cost of hauling the freight, without
taking into account the overhead
charges of all kinds. Consequently,
the rates were made somewhere be-
tween these two limits, and competi-
ton gradually stereotyped them at
level where they have remained TN
changed twenty-five years.
1t is these rates that are now to be
reviewed in the light of the carriers
necessities.
1t would be well if at some stage
of this dispute some ore would raise
the question as to what Judge Har-
Ian meant by the phrase, what the
service is reasonably WORTH" and get
it before the Interstate Commerce
Commission for discussion. This is
-asII,- the crr,V of the ,,,bOIa -,,o+.o- ,