or without a formal complaint and invests in the Commission a discretion as to when and under what conditions through routes and joint rates may be established; the limitation quoted above, of course, controlling this discretionary power. Other than the quoted limitation, the Commission now has like power over through routes and joint rates as over any other kind of a rate.674 In exercising this discretion, the Commission may permit one carrier to demand "financial security before entering into either joint rate arrangements or accepting freight under proportional rates. "'675 The Commission has construed the words, "or otherwise," quoted from the Panama Canal Act, infra, and has held that it could thereunder establish through routes with a water carrier.676 The Commission, in the case where such holding was first made, said: "If the above amendment applies to the traffic in question, the right of the Commission to establish this through route is clear. The defendants contend that it does not apply, for the reason that this amendment relates only to the traffic which passes through the Panama Canal. They argue that the words 'or otherwise' modify the phrase 'by rail and water' and not the phrase 'through the Panama Canal.' But the plain everyday reading of the act is 'through the Panama Canal or otherwise,' and the defendants have referred us to no canon of construction nor to any reason for disregarding the obvious meaning of those words. Indeed, a consideration of the situation to which the amendment applies would seem to conclusively demonstrate that the position of the defendants is not correct, since the words 'or otherwise' are pure surplusage if read as the defendants say they should be. Traffic through the Panama Canal can only move by rail and water, unless 674 Truckers Transfer Co. V. Charleston & W. C. Ry. Co., 27 I. C. C. 275, 277; Crane Iron Works v. United States, Opinion Commerce Court No. 55, pp. 453, 464, 209 Fed. 238. 675 Truckers Transfer Co. V. Charleston & W. C. Ry. Co., 27 I. C. C. 275, 279. 676 Augusta & Savannah Steam boat Co. v. Ocean Steamship Co., 26 I. C. C. 380, 384, 385; Decatur Navigation Co. v. L. & N. R. Co., 31 I. C. C. 281; Pacific Nav. Co. v. S. P. Co., 31 I. C. C. 472; Federal Sugar Refining Co. v. C. of N. J. R. Co., 35 1. C. C. 488; Ocean Rail Rates to Charlotte, N. C., 38 I. C. C. 405, 410; Baltimore & Carolina S. S. Co. v. A. C. L. R. Co., 49 I. C. C. 176. it moves from port to port, and in that case we have no jurisdiction. We hold, therefore, that the Commission has jurisdiction to establish the through routes and the joint rates prayed for." § 128. Rates on Commodities Requiring Refrigeration.The charge made by a carrier for refrigeration must, like all of its other charges, be reasonable. To determine what is reasonable, the general principle applied to other rates must be considered, as well as the special circumstances peculiar to the shipment. On this subject, the Commission has held:677 "In determining what is a reasonable charge for furnishing refrigeration for the movement of citrus fruits from California to eastern markets, nothing should be added by reason of the fact that a refrigerator car is used, since that has been taken into account in establishing the rate of transportation, nor for the service of inspection, which is substantially the same for all shipments; but the expense of transporting the additional weight of the ice and for repairs to the ice bunkers should be considered." In the same case, it was held that when the shipper precooled his fruit, such fact must be considered in determining the rate.678 § 129. Rates on Returned Shipments.-What the privilege of returning shipments at less than usual rates means and the origin and growth thereof are stated by the Commission: "The returned-shipment privilege seems to have originated for the purpose of assisting the agricultural interests. Farm implements and machinery often prove defective or break down while in use, and if full tariff rates must be paid for 677 Arlington Heights Freight Exchange v. Southern Pac. Co., 20 I. C. C. 106; same styled case, 22 I. C. C. 149; at p. 156 see discussion of "postage stamp rates." See also Refrigeration Charges on Fruits, etc., from the South, 151 I. C. C. 649. 678 The order of the Commission was sustained by the Commerce Court, Atchison, T. & S. F. Ry. Co. v. United States, 204 Fed. 647, Opinion Commerce Court No. 41, p. 627. For other applications of the rule see Ozark Fruit Growers Assn. v. St. Louis & S. F. Ry. Co., 16 I. C. C. 106; Asparagus Growers' Assn. v. A. C. L. R. Co., 17 I. C. C. 423; Georgia Fruit Exchange v. Southern Ry. Co., 20 I. C. C. 623; Albree v. Boston & M. R. Co., 22 I. C. C. 303. their transportation to a point where repairs can be effected the farmer is subjected to a serious handicap. Rules were therefore adopted permitting the return of agricultural implements, vehicles, and similar articles at one-half the regular rates. * "Through the operation of competitive forces the returnshipment rules became increasingly liberal and were gradually enlarged to cover the return of freight of every character and for every purpose. ** The record shows that while returned shipments form but a small proportion of the carriers' entire traffic the privilege is of importance to several branches of industry.' After thus describing the rule, and after discussing the question involved therein, the Commission condemned the privilege as having no legal or logical basis.679 In the same opinion, at page 418, it was shown that when the returned shipment was on "freight in an obviously deteriorated condition," the axiom "that rates depend largely upon value" should be considered, not because it was a returned shipment, but because of the value. The difficulty of always considering value in this connection is manifest and was pointed out by Mr. Commissioner Clements as follows: "We are not prepared to lay down the principle that old or secondhand articles must be treated differently from new or that value is the controlling element in making rates. Such of these articles or parts as are in fact scrap are entitled to the scrap rate, but if they have any value as the articles which they originally purported to be, we do not feel that we can require the carriers to transport them at other than the regular tariff rates applicable to the new or originally transported article."680 § 130. The Public Interest Must Be Considered in Making Rates. A rate made by a carrier, a legislative or an administrative body must not disregard the interests of the public, 679 Re Reduced Rates on Returned Shipments, 19 I. C. C. 409, 414, and discussion and cases cited at pp. 416, 417. The rule formerly carried in some of the freight classifications granting reduced rates on "returned shipments" has been eliminated. 680 Minneapolis Traffic Assn. V. Chicago & N. W. Ry. Co., 23 I. C. C. 432, 437. and the fact that a particular rate is necessary to enable the carrier to pay interest and dividends will not justify a rate which is unduly burdensome on the public. The legislature of Kentucky having prescribed the maximum rate to be charged by turnpike roads in that state, the Supreme Court, in determining whether or not such act was illegal, said:681 "It is proper to say that if the answer had not alleged, in substance, that the tolls prescribed by the act of 1890 were wholly inadequate for keeping the road in proper repair and for earning dividends, we could not say that the act was unconstitutional merely because the company (as was alleged and as the demurrer admitted) could not earn more than 4 per cent. on its capital stock. It cannot be said that a corporation operating a public highway is entitled, as of right, and without reference to the interests of the public, to realize a given per cent. upon its capital stock. When the question arises whether the legislature has exceeded its constitutional power in prescribing rates to be charged by a corporation controlling a public highway, stockholders are not the only persons whose rights or interests are to be considered. The rights of the public are not to be ignored. It is alleged here that the rates prescribed are unreasonable and unjust to the company and its stockholders. But that involves an inquiry as to what is reasonable and just for the public. If the establishing of new lines of transportation should cause a diminution in the number of those who need to use a turnpike road, and, consequently, a diminution in the tolls collected, that is not, in itself, a sufficient reason why the corporation, operating the road, should be allowed to maintain rates that would be unjust to those who must or do use its property. The public cannot properly be subjected to unreasonable rates in order 681 Covington & L. Turnpike Road Co. v. Sandford, 164 U. S. 578, 596, 597, 41 L. Ed. 560, 566, 567, 17 Sup. Ct. 198. Quoted and followed, Smyth v. Ames, 169 U. S. 466, 545, 42 L. Ed. 819, 848, 18 Sup. Ct. 418. See also Minneapolis & St. L. R. Co. v. Minnesota, 186 U. S. 257, 268, 46 L. Ed. 1151, 1158, 22 Sup. Ct. 900; Loftus v. Pullman Co., 18 I. C. C. 135, 140: "Having in mind the public interest;" R. R. Com. of Texas v. Atchisen, T. & S. F. Ry. Co., 20 I. C. C. 463, 484; R. R. Com. of Kansas v. Atchison, T. & S. F. Ry. Co., 22 I. C. C. 407. simply that stockholders may earn dividends. The legislature has the authority in every case, where its power has not been restrained by contract, to proceed upon the ground that the public may not rightfully be required to submit to unreasonable exactions for the use of a public highway established and maintained under legislative authority. If a corporation cannot maintain such a highway and earn dividends for stockholders, it is a misfortune for it and them which the constitution does not require to be remedied by imposing unjust burdens upon the public." A particular service falling within the absolute duties of a public carrier may be required, when it is necessary to the public convenience, where the whole service performed yields a fair compensation, even though such particular service must be furnished at a loss to the carrier.682 § 131. General Principles Applicable to the Question, What Is a Reasonable Rate? It was a maxim of traffic managers that "all the traffic could bear" was the only definite principle applicable to rate-making. Kirkman, in the Science of Railways, vol. 8, at p. 11, says: "In the practical operation of railroads such rates are made as the traffic will bear." If this rule were adopted there would be little difficulty in fixing rates. But it is apparent that such a rule, in view of the fact that the business of transportation companies is affected with a public use, would be unfair. Mr. Commissioner Clements, in Tift v. So. Ry. Co., 10 I. C. C. 548, 582, says: "This claim on the part of the carriers is based upon the erroneous assumption, so prevalent among traffic managers, that a rate may be as high as 'the traffic will bear.'" What "the traffic will bear" is, by force of economic law, the maximum. It has been seen that a particular service may, under some circumstances, be required of a common carrier at less than cost, but ordinarily cost of service fixes the minimum rate. It is interesting and instructive to group what has been said by the courts and the Commission with reference to this prob * 682 Atlantic Coast Line R. Co. v. North Carolina Corporation Commission, 206 U. S. 1, 51 L. Ed. 933, 27 Sup. Ct. 585. See in this connection Sec. 106, ante; National Implement & |