§ 267 (201). Preferences against traffic-must involve injury.-Undue preference against traffic must ordinarily be such that injury is caused thereby to some party or locality. The commission said in 10 I. C. C. R. 173, one of the Louisville Stockyards cases, with reference to a claim that a refusal to receive carloads of live stock from a connecting carrier, when carloads of dead freight were received, that this involved an undue preference of the dead freight, that this refusal to receive live stock did not in any respect benefit dead freight. If an undue discrimination was found, the carrier might comply with the order by ceasing to deliver dead freight, and if this latter alternative was adopted, complainant would not be benefited and other shippers would be greatly injured. See also Butchers & Drovers Stockyards Co. v. L. & N. R. Co., 14 C. C. A. 290, 67 Fed. 35 (1895).

When manufacturing industries are established in localities it often happens that a slight change in the adjustment of transportation charges as to the raw material and manufactured product or article may be sufficient to close manufacturing plants at some points and increase the output at others located elsewhere.

This was the contention in the Chicago Live Stock case, but the supreme court, supra, sec. 266, held that there was no presumption of wrong arising from a change of rate by a carrier, nor was there any universal rule that the rate of the raw material should not be higher than on the manufactured product. It was admitted, however, that as a general rule, the manufactured product carried a higher rate than the raw material.

268 (202). A reasonable regulation of carload weights not preferential. It was ruled in 7 I. C. C. R. 255, that a rule made by a carrier which had not provided track scales at stations, forbidding shippers to load cars above a specified weight of marked capacity of the car under the so-called penalty of an increased rate on the excess weight, was not unlawful, provided the increase in charges for the excess weight was not unreasonable, and the margin between such maximum and the carriers' minimum of carloads of grain was so wide that shippers could readily comply with both rules. Such rules however must be shown upon the carriers' posted schedule. See

infra, section 6. In this case it was also ruled that rules for minimum carload weights for corn or other grain which varies with the size of cars furnished by the carrier are unreasonable, in that they would inevitably confuse and puzzle shippers and consignees, and subject them to excessive charges resulting from arbitrary weights, and increase the number of overcharge claims and afford many opportunities for discrimination in rates between competing shippers. The commission said therefore that the carrier should enforce a fixed and reasonable minimum carload rate for corn and other grain irrespective of the capacity of the cars furnished by it to shippers.

In another case, 3 I. C. C. R. 241 and 2 Int. Com. Rep. 599, the commission held that a rule was reasonable, which prescribed the minimum weight of a carload of cattle at a certain rate, and then charged by the hundred pounds for any excess of weight over the minimum. The commission said that such a rule was more just and reasonable than the practice of making a carload rate irrespective of weight leaving the shipper to load into the car as many cattle as he pleased and was able to put into it, and the fact that some difficulties were found to exist in the prompt and accurate weighing of the cattle was not a reason for abolishing the new rule, but rather for improving and perfecting it.

§ 269 (203). Differentials between grain and grain products. -This question has been extensively discussed before the commission. The millers located in wheat producing territory strongly insisted, that flour being more easily handled, was entitled to at least an equal rate with wheat. On the other hand, the millers located in Texas out of the wheat producing territory were directly interested in a high differential between wheat and flour, so as to at once secure an adequate supply of wheat and exclude competing flour. It appeared from the testimony in the proceeding instituted before the commission by the millers of Missouri and Kansas that the Texas railroads were in the habit of increasing this differential during harvest time for the benefit of the Texas flour mills. The commission ruled, 4 I. C. C. R. 417, and 3 Int. Com. Rep. 400, that a differential of five cents per hundred pounds, that is, five cents per hundred pounds higher on flour, was warranted by the peculiar conditions, but that a larger differential, such as had been maintained for con

siderable periods, worked an unjust discrimination and was unlawful.

In 8 I. C. C. R. 304, decided some nine years later, the commission reaffirmed this ruling saying that the advantages were not sufficient to warrant interference with the established differential; and in the same opinion, the differential between corn and corn meal in the same territory was made not to exceed three cents per hundred pounds. This ruling was again reaffirmed in January, 1904. 10 I. C. C. R. 35.

In 11 I. C. C. Rep. 220, a differential on corn meal shipped from Missouri river points to Texas was fixed at a maximum of three cents above the rate on corn in force at the same time. In 16 I. C. C. Rep. 73, the differential on flour was fixed at not more than twelve per cent. of the rate on wheat from Kansas points to Phoenix, Arizona. See also 12 I. C. C. Rep. 258.

In cases from other sections of the country it was held that grain and grain products were presumptively entitled to equal rates. See 8 I. C. C. R. 214, where the commission ruled that an equal rate on wheat and flour in the export trade was presumptively proper, but that in view of all the conditions shown in the investigation, the differential rate for export should not exceed two cents per hundred pounds.

§ 270 (204). The commission not concluded by ruling of state commission. In the case last cited it was shown that by the state law or by the rulings of state commissions a shipper in Kansas or Missouri of cattle consigned to a point in the state was entitled to load the car at discretion without the charge being increased thereby. But the commission said that while such action of the state authorities had always been treated with respect, it was in no wise conclusive upon the Interstate Commerce Commission in the regulation of interstate commerce, as the commission thought that the action of the carriers in prescribing rates for the transportation of cattle by weight instead of by carload was not in itself illegal and was in accord with the general practice as to the regulation of carrier's charges. The state action therefore could not be allowed to control the matter which was within the federal jurisdiction.

§ 271 (205). Discrimination in mode of shipment.-Undue preference may consist not only in a differential rate, that is,

a difference in rate not warranted by the character of the commodity or any consideration relating to the cost of service, but also in any discrimination in the performance of any of the duties of the carrier, or any accessorial services rendered. This is illustrated in the rulings of the commission upon the subject of the alleged discriminations in the shipment of oil in tanks. as against the shipment in barrels. Thus it was ruled in 1 I. C. C. R. 503 and 1 Int. Com. Rep. 722, that when oil is transported in tanks permanently affixed to car bodies, the tank is to be considered as part of the car, and for oil transported therein the charge for transportation should be the same by the hundred pounds, that the carrier charges for transportation between the same points, of barrels filled with like oil and taken in carload lots, and that the carrier was guilty of unjust discrimination if the shipper in barrels was charged a higher rate. See also 2 I. C. C. R. 90, 2 Int. Com. Rep. 67.

In the case last cited, on account of the difference in expense of service a higher rate for the oil in barrels in less than carload lots as compared with oil in carload lots was sustained.

The allowance by a carrier to a shipper of oil in tanks of forty-two gallons or any number of gallons for alleged leakage and waste in the transportation, in the absence of a corresponding allowance to shippers in barrels, was an unjust discrimination and unlawful. 4 I. C. C. R. 131, 3 Int. Com. Rep. 162. There was no objection however to the use of estimated or constructive weights, provided the method of estimating works no inequality in its practical application to competing modes of conveyance.

It is the duty of the carrier to equip its road with the means of transportation, and in the absence of exceptional conditions, those means must be open impartially to all shippers of like traffic. If the carrier transports freight in cars owned by the shipper, it must be upon such terms as shall not constitute an unjust discrimination against shippers of like traffic, who are excluded from the use of such private cars. Where the use of a class of private cars, such as tank cars, is not opened to shippers impartially, but is practically limited to one class of shippers, and the charge for a barrel package in barrel shipments in the absence of a corresponding charge on the tank shipments results in a greater cost for the transportation, it is undue

preference and discrimination. 5 I. C. C. R. 415, 4 Int. Com. Rep. 162. For decision of supreme court as to alleged discrimination between tank and barrel shipments, supra, sec. 155.

§ 272 (206). Classification.-The subject of undue preference against kinds of traffic necessarily involved the question of classification. The strict apportionment of a cost of service on all classes of commodities equally would be impracticable, for the reason that articles which are bulky and cheap would be unable to bear the burden of transportation, as their value would be confiscated by the cost of transportation for any considerable distance. It is universally recognized therefore that in order that such articles as grain and its products, fuel, lumber and ore can be transported at low rates which they can stand, it is necessary for the carrier to charge upon the other classes of goods, which comprise greater value in smaller compass, a greater proportionate rate. Upon this necessity are based the principle and practice of classification of freight traffic, which have been exhaustively discussed in the reports of the Interstate Commerce Commission. See report of 1888, page 34.

Commodities not classified, are given what is known as commodity rates. Thus salt requires and receives a commodity rate lower than class rates. The commission said in 5 I. C. C. R. 299, 4 Int. Com. Rep. 33, that the carriers should only be limited as to such low rating by the rule that a commodity should not be carried at such unremunerative rates, as will impose burdens upon other articles transported to recoup losses in carrying that commodity.

Under the amendment of 1910, to section one, it is made the duty of all common carriers to establish, observe, and enforce just and reasonable classifications of property with reference to which rates, tariffs, regulations, or practices are or may be made or prescribed and just and reasonable regulations and practices affecting classifications, etc., and every unjust and unreasonable classification is prohibited and declared to be unlawful.

§ 273. Uniform classification recommended.-The commission in its several annual reports, has uniformly and earnestly recommended a uniform classification. Thus, in the eleventh