APPENDIX. 691 



be considered in estimating the dissiiuihirity created by water competition are 

 the character of the roads, the character of the traffic, the preponderance of 

 empty cars moving in a direction in which the traffic must be taken, and the 

 legitimacy of the competition by the rail earner. 



569. The transportation of traffic under circumstances and conditions that 

 force a low rate for its carriage, or an abandonment of the business, but which 

 affords some revenue above the cjst of its movement, and works no material 

 injustice to other patrons of a carrier, is to be deemed legitimate competiti(ni. 

 When, however, its carriage is at a loss, and imposes a burden on like traffic at 

 other points, and on other traffic, it is to be deemed destructive and illegitimate 

 competition. 



470. Kates can not bo arbitrarily charged in the mere discretion of a 

 carrier. They are to be equitably adjusted with regard to the public interests 

 as well as the carriers, lleduced rates at points where competitive influences 

 are controlling must not fall below some revenue from the traffic in excess of 

 cost, and higher rates at other points, required for the necessary revenue of a 

 carrier, must be reasonable in themselves, and also relatively reasonable in 

 comparison with the competiti\^e rate. 



472. Where a reduced rate is made at the terminus of a through route, 

 under the compulsion of competition, a town not located on the line of the 

 through route, but reached over a lateral connecting road, has a disadvantage 

 of situation entailing some additional expense, and a reasonably higher rate to 

 such town than the forced competitive rate to the more distant terminus of 

 the through route is not unjust discrimination. 



474. A manufacturer's description of an article to induce its purchase by 

 the public also describes it for transportation, and carriers may accept his 

 description for purposes of classification and rates. Carriers are not required to 

 analyze freight to ascertain whether it is in fact inferior to the description or 

 public representations under which it is sold, in order to give it a lower rate 

 corresponding to its actual value. 



476. The rate of compensation which railroad companies may lawfully 

 receive for transportation services can not be so limited that the shipper may in 

 all cases realize actual cost of production. 



477. Ciiarges for transportation service should have reasonable relation to 

 cost of production and to the value of the service to the producer and shipper, 

 but should not be so low on any as to impose a burden on other traffic. 



478. In the carriage of great staples, which supply an enormous business 

 and which in market value and actual cost of transportation are among the 

 cheapest articles of commerce, rates yielding only moderate profit to the carrier 

 are both necessary and justifiable, and where the carriers frequently put in force 

 and continue for considerable periods of time tariifs of rates and charges, it is a 

 fair inference that such rates and charges are profitable. 



484. In fixing reasonable rates, the requirements of operating expenses, 

 bonded debt, fixed charges, and dividend on capital stock from the total traffic 

 are all to be considered, but the claim that any particular rate is to be measured 

 by these as a fixed standard, below which the rate may not lawfully be reduced, 

 is one rightly subject to some qualifications, one of which is the obligations 

 must be actual and in good faith. 



514. The mere fact that one article is of more general use and therefore 

 shipped in greater quantities than another, when each as a rule is shipped in less 

 than car-load quantities, and of no considerable difference in bulk, weight, and 

 value, and of no appreciable difference in expense of handling and of haul, 

 constitutes in itself no reason why the first should receive a lower rate than the 

 last. In such a case mere quantity, not measured by any recognized unit of 

 quantity adapted to carriage, and lessoning the expense of handling and 

 carriage, cannot be allowed to affect rates in the transportation of property. 



522. A line of steamships plying between New York and Boston every 

 other day makes the distance in twenty-four hours, does the largest part of the 

 carrying trade of the grocers of Boston on shipments from New York, carries 



