VALUE OF THE SERVICE AS A FACTOR IN RATE MAKING 529 One case, decided in 1888 by the Interstate Commerce Com- mission,^^ may have fixed rates too low to produce a reasonable return to the carrier; but this is not clear. The earnings of the New Orleans and North Eastern, while they were "above operat- ing expenses," were not and never had been "sufficient for the pay- ment of operating expenses and interest or fixed charges"; yet the commission found, on grounds of reasonableness to the pubhc, that a rate of this road should be lowered to one less excessive as compared with other ton-mile rates in the same region. But "interest or fixed charges" do not necessarily coincide with a return on the value of the road, and a return on that value may possibly have been earned both before and after the reduction. The law, in any case, is clear enough. In Atlantic Coast Line v. North Carolina Corporation Commission j'^^ the United States Supreme Court said by way of dictum : "In a case involving the validity of an order enforcing a scheme of maximum rates of coiurse the finding that the enforcement of such scheme will not produce an adequate return for the operation of the railroad, in and of itself demonstrates the imreasonableness of the order." In other words, all the talk of courts — including the Supreme Court itself — commissions and text- writers to the effect that rates may be fixed so low that they will not produce a reasonable return to the company, if that is necessary in order that they may not exceed the value of the service to the public, is baseless. The law to-day is clearly in accordance with this dictum. The doctrine that the producer is always entitled to a reasonable return, whatever the needs of the consumer or the value of the service to him may be, has several times been applied by the Interstate Commerce Commission. Re Alleged Excessive Freight Rates and Charges on Food Products ^^ was the commission's report to the Senate on an investigation made at its direction. The commission refused to find certain rates unreasonable, although people were unable, at those rates, to market food products which they had long been accustomed to market. " New Orleans Cotton Exchange v. Cincinnati, New Orleans, & T. P. Ry,, 2 1. C. C. 375 (1888). ^ 206 U. S. I, 24, 25 (1906). " 4 I. C. C. 48, 66, 67.
