don & Northwestern Railway Company, 2 Q. B. D. (1882) 229. [This case construes Section 2 of the English act of 1854, which is almost like Section 3 of our Interstate Commerce Act]; Interstate Commerce Commission v. B. & O. Ry. Co., supra.; Cincinnati, New Orleans & Texas Pacific Railway Company v. Interstate Commerce Commission, 162 U. S. 184, 16 Sup. Ct. 700, 40 L. Ed. 935; Interstate Commerce Commission v. Alabama Midland Railway Company, 168 U. S. 144, 18 Sup. Ct. 45, 42 L. Ed. 414; Louisville & Nashville Railroad Co. v. Behlmer, 175 U. S. 648, 20 Sup. Ct. 209, 44 L. Ed. 309; East Tennessee, Virginia & Georgia Railway Company v. Interstate Commerce Commission, 181 U. S. 1, 21 Sup. Ct. 516, 45 L. Ed. 719; Texas & Pacific Railway Co. v. Interstate Commerce Commission, 162 U. S. 197, 16 Sup. Ct. 666, 40 L. Ed. 940; Interstate Commerce Commission v. Louisville & Nashville Railroad Co., 190 U. S. 273, 23 Sup. Ct. 687, 47 L. Ed. 1047. The Supreme Court has also held that it may be presumed that Congress, in adopting the language of the English act, had in mind the construction given to the words "undue preference" by the courts of England.-Interstate Commerce Commission v. B. & O. Ry. Co., 145 U. S. 284, 12 Sup. Ct. 844, 36 L. Ed. 699. "None of the above factors alone are considered necessarily controlling by the authorities. Neither are they all controlling as a matter of law. It is a question of fact to be decided by the proper tribunal in each case as to what is controlling." § 134. Same Subject-Rate Considered in and of Itself.— With reference to a rate "in and of itself," the Commission has said:692 "It is said that the rate from St. Cloud is reasonable in and of itself. A rate can seldom be considered 'in and of itself.' It must be taken almost invariably in relation to and in connection with other rates. The freight rates of this country, both upon different commodities and between different localities, are largely inter-dependent, and it is the fact that they do not bear a proper relation to one another, rather than the fact that they are absolutely either too low or too high, which most often gives occasion for complaint." 692 Tileston Mill Co. v. Northern P. R. Co., 8 I. C. C. 346, 361. In the Cattle Raisers' Asso. case," 693 the Commission discusses the cost to the carrier at originating and delivering points, cost and maintenance of equipment, expense of loading and reloading in transit incident to feeding, watering and resting the stock, character of the movement, number of cars in trains, average loading, volume and desirability of the traffic, return of empty cars, liability to damage, cost of carriage, increased cost of producing live-stock, decreased selling price, method of making the advanced rates, disappearance of competition, cost of railroad labor and supplies, improved methods of operation and increased general traffic, mileage revenue per ton, per car and per train, and other pertinent circumstances and conditions. § 135. Same Subject-Commission Not Bound by Technical Rules. In the investigation of these questions, the Commission is not hampered by technical rules. The Supreme Court said:694 "The inquiry of a board of the character of the Interstate Commerce Commission should not be too narrowly constrained by technical rules as to the admissibility of proof. Its function is largely one of investigation, and it should not be hampered in making inquiry pertaining to interstate commerce by those narrow rules which prevail in trials at common law, where a strict correspondence is required between allegation and proof." The Commission's right to consider the problem in all its phases was clearly stated by the Supreme Court, as follows: "The Commission is the tribunal that is intrusted with the execution of the interstate commerce laws, and has been given very comprehensive powers in the investigation and determination of the proportion which the rates charged shall bear to the service rendered, and this power exists, whether the system of rates be old or new. If old, interests will have probably become attached to them and, it may be, will be disturbed or disordered if they are changed. Such circumstance is, of 693 Cattle Raisers' Assn. v. Missouri, K. & T. R. Co., 11 I. C. C. 296. 694 Int. Com. Com. v. Baird, 194 U. S. 25, 44, 48 L. Ed. 860, 869; 24 course, proper to be considered and constitutes an element in the problem of regulation, but it does not take jurisdiction away to entertain and attempt to resolve the problem. And it may be that there cannot be an accommodation of all interests. in one proceeding. ''695 The Commission, in discussing its own power, said: "It must be borne in mind that this Commission is not a court of law; its function is to apply the mandatory and restrictive provisions of the Act to Regulate Commerce to stated conditions of fact. We must regard the problems presented to us from as many standpoints as there are public interests involved. ''696 § 136. General Summary. The statement so frequently made and reiterated that the problem of rate-making is a difficult one, means no more than that there is no definite scientific rule by which it can, with certainty, be determined just what is a reasonable rate. The "tribunal appointed by law and informed by experience" has evolved and is evolving principles which will furnish sufficient data to justify generalizations broad enough to authorize the deduction of scientific principles. In making these deductions, the first consideration is the agency which performs the service. This agency performs a public service, devotes its property to a public use and must, therefore, submit to public regulation; but the capital of this agency is private capital entitled to protection as such. To these facts the law applies the principle that those who furnish such private capital so devoted to a public use are entitled to receive a fair return from such investment. What is a "fair return" involves economic considerations such as the risks involved in 695 Int. Com. Com. v. Chicago R. I. & P. R. Co., 218 U. S. 88, 108, 54 L. Ed. 946, 30 Sup. Ct. 669. See also Atlantic C. L. R. Co. v. Florida, 203 U S. 256, 51 L. Ed. 174, 27 Sup. Ct. 108. See also Seaboard A. L. Ry. Co. v. Florida, 203 U. S. 261, 51 L. Ed. 175, 27 Sup. Ct. 109; and, post, Section 235. 696 Advances in Rates,--Western Case, 20 I. C. C. 307, 315; theory on which case tried followed regardless of variance between allegation and proof, Heckle v. C. B. & Q. R. Co., 46 I. C. C. 513, 514; New York Harbor Case, 47 I. C. C. 643, 647; but "essential rules of evidence" must be preserved, A. T. & S. F. Ry. Co. v. Spiller, 246 Fed. 1, 158 C. C. A. 227. the investment, the security of the investment, because it is a practical monopoly, returns which capital may secure from other investments, as well as the public necessity that capital shall be devoted to this special use. "Fair return" necessarily involves the question of the value of the property so devoted to the public use. In determining this value, there must be considered the investment-that made originally and that added in permanent improvements, the present market value of the stocks and bonds, which are but symbols of the investment, the question of the cost of the property, its reproduction cost and the methods of making the investment, that is, whether the investment was made wisely and honestly or otherwise. The character of the territory served by the carrier is not infrequently a fact which must not be lost sight of. The extent and regularity of the whole movement is determined by the character of the inhabitants and the kinds of business conducted by them. The physical situation of the transportation agency as to grades, curves, etc., may materially affect the cost of the service and thereby determine the amount of the return which should be received. The attitude of the transportation agency to the question is not without value; the way the problem has been solved by such agency in a long course of dealing would indicate that it has found a solution not unfair to itself. The thing transported must be considered. Is it heavy as compared with the space it occupies? Does it require any special equipment? Is it subject to loss or injury in transporting? Is there much or little of it? The answers to these questions furnish facts which must be considered in classifying commodities so as to fix rates or charges for their transportation. The places from and to which the commodities move are factors in the problem. The distance a thing is hauled must be considered, as the greater the distance the less, ordinarily, is the cost for each mile of the haul, and the service of loading and unloading, and other terminal services, apply the same to a short as to a long haul. The situation of the man who owns the thing moved and the purpose of the movement frequently affect the question of the rate. This does not mean that rates must be determined by the use to which the commodity is put; it means rather, that a producer of a commodity which is also produced by others in the same general territory-the market for all the producers being the same cannot ship otherwise than upon rates not greatly higher than his competitors enjoy. This principle is similar to the one that justifies a rate basis made to meet market competition. A thing may grow or be mined in widely different localities, and the sale thereof may be in the same market. Obviously, that this market may have the benefit of competition and that producing localities may have the benefit of a market, distance cannot be made an absolute measure for the rates. So, the public interest must not be disregarded in determining what this public agency shall receive for performing the duties which society has farmed out to it. Rates must not be so adjusted as to deprive the public of the service, for commodities must be moved and they cannot be moved if the charge therefor exceeds the value to be derived from the movement. One producer must not be permitted to have and enjoy a monopoly in serving the public. That charges may not exceed the value of the service is an economic law depending upon neither court nor commission for its enforcement. Carriers may, with propriety, and for the good of the general public, make rates barely more than the cost of the particular movement, in order to develop industries, create and maintain competition and serve those who, because of their location, sometimes distant from the point of production, cannot be otherwise served; provided that, in so doing, they do not contravene the provisions of law against discriminations and preferences. Rate-making tribunals may not make rates so low as to deprive private capital of a substantial return on the fair value of the property devoted to the public use. While long-existing wrongs do not become rights and no one can have a vested interest in a wrong, the fact that, in the slow evolution toward a science of rate-making, there have grown up rate situations inconsistent with the prin |