classifications of like articles must be proportionate to this difference in cost to the carrier of performing the service.

Topic B. Shipment in more Convenient Units

§ 720. Differences in the character of the service. That there are differences in the cost of service by reason of ways in which traffic is handled must be recognized; and in so far as these economies in conducting the transportation are real a proportionate reduction may be made to the shipper in question. The various phases of this problem are well set forth in the opinion of Judge Baxter, elsewhere discussed more fully.13 "For the same reason passengers may be divided into different classes, and the price regulated in accordance with the accommodations furnished to each, because it costs less to carry an emigrant, with the accommodations furnished to that class, than it does to carry an occupant of a palace car. And for a like reason an inferior class of freight may be carried at a less rate than first-class merchandise of greater value and requiring more labor, care, and responsibility in the handling." 14

§ 721. Shipment in carloads.

The most obvious application of this rule is the relatively lower rates almost universally quoted for carload lots as compared with less than carload. Substantial reasons exist for making the rate lower per barrel in carload lots than in less than carload quantities. The cost of service is very considerably less in the case of shipments in car

13 Hays v. Pennsylvania Co., 12 Fed. 309, B. & W. 368.

14 More convenient units are recognized reasons for making lower rates; see the language in Interstate Commerce Commission v. Baltimore & Ohio R. R., 145 U. S. 263, 36 L. ed. 699, 12 Sup. Ct. 844; Savitz v. Ohio & M. Ry., 150 Ill. 208, 37 N. E. 235,

27 L. R. A. 626; Cook v. Chicago, R. I. & Pac. Ry. Co., 81 Iowa, 551, 46 N. W. 749, 25 Am. St. Rep. 512, 9 L. R. A. 764; Root v. Long Island R. R., 114 N. Y. 300, 21 N. E. 403, 11 Am. St. Rep. 643, 4 L. R. A. 331, B. & W. 377; Scofield v. L. S. & M. S. R. R., 43 Ohio St. 571, 3 N. E. 907, 54 Am. Rep. 846.

load lots than in less than carload quantities. The shipment by the carload goes direct to destination. It is loaded by the shipper and is unloaded by the consignee. The freight in it does not stop at the way stations to be handled in parcels to different consignees along the line. Only one bill of lading is made. It requires but one entry upon the waybill. The time occupied in transporting it to destination is far less than in the case of a shipment in less than carload quantities. There is but one collection of charges for freight.15 Where the shipment is made in less than carload quantities a separate receipt or bill of lading has to be given to every shipper for his parcel. A separate entry of every item has to be made on the waybill. The shipment is by a local freight train which stops at every station for which there is a package of freight. The freight has to be taken out in parcels and delivered at each of these stations. The freight is loaded and unloaded by the railroad company. There are as many collections of charges for freight as there are different parcels. The time occupied in transporting it is usually from two to three times as long as in the case of a carload shipment— according to distance. It occupies a whole car, and for the vacant space in that car the company is receiving no compensation. 16

§ 722. Advantages of carload traffic.

The economies of handling freight in carload lots can

15 It has been doubted whether at common law the carrier need make carload rates unless it chooses. Railroad Commissioners v. Weld, 96 Tex. 394, 73 S. W. 529.

If, however, carload rates are granted, all shippers may demand the same terms. New York T. & M. R. R. v. Gallagher, 79 Tex. 685, 15 S. W. 694.

16 The Commission has power to pass upon the relation between carload and less-than-carload rates in

determining the property of ratings. established by the carrier. Cincinnati H. & D. R. R. v. Interstate Commerce Commission, 206 U. S. 142, 51 L. ed. 995, 27 Sup. Ct. 648.

The Commission may now, since the recent amendments to the Act, establish carload rates when it thinks traffic conditions require them and fix the differential between such C. L. rates and L. C. L. Atchison, T. & S. F. Ry. v. United States, 232 U. S. 199, 34 Sup. Ct. 291.

hardly be overestimated." It has been held not unreasonable to make the rate per 100 pounds upon refined oil in less than carload lots 100 per cent greater than the rate upon carload lots. This situation was discussed in a broad way by the Commission in an early case. 18 "The greater part of the supplies consumed upon the Pacific Coast originate twenty-five hundred miles from the point of consumption, and these supplies should be transported that twenty-five hundred miles in the cheapest manner. Waste is always expensive; if the railways are required to carry this merchandise in an extravagant manner that extravagance is finally borne by the public. We have seen that the actual cost of handling this traffic in less than carloads is 50 per cent greater than the cost of handling carloads. It seems probable, therefore, that the cheapest way in which these supplies can be taken across the continent and distributed to the consumer is by transporting them in solid carloads from the factory to the warehouse upon the Pacific Coast, and thence distributing to the retailer in less than carloads, although the effect of this may be somewhat diminished by the back haul from the wholesaler to the interior point which is not performed to the same extent where goods are sent across the continent in less than carload shipments directly to the store of the retailer. It would in our opinion be unfortunate from an economic standpoint to establish a condition which would require distribution entirely or mainly in less than carload lots from the middle west."

$723. Permission to mix carloads.

Upon the principles just discussed it would seem to be permissible for the carrier to allow the shipper to send forward a mixed carload of various products since the cost of handling a mixed carload from one consignor to one consignee is not materially different from the cost of

17 Scofield v. Lake Shore & M. S. Ry., 2 Int. Com. Rep. 67.

18 Business Men's L. v. Atchison, T. & S. F. Ry., 9 I. C. C. 318.

handling a carload of one commodity. But the subject has its difficulties, and the carrier is not obliged to grant this privilege. In pointing this out the Commission said: "With regard to the question of allowing the same rate on mixed carloads which is given to carloads of a single product, it may be remarked that it is almost inextricably involved in the question of the rate. A rule which might work well when the load was composed of articles bearing the same rate would be very difficult to formulate where the different articles took differing rates. The questions, which rates should govern, whether the highest or lowest, whether the proportion of different articles should influence the carload rate, whether the mixed rate should follow the highest or lowest class rate,-would all be involved, and it would probably be found difficult to formulate an equitable rule which should fix the rate upon such a load."

"" 20

§ 724. Lower rates for shipments in bulk.

That there are often certain advantages to the carrier in shipments in bulk in car lots over shipments in packages in car lots cannot be denied.21 It is upon this basis that it is cheaper to handle the traffic that the railroads have felt justified in giving a lower rate per ton-mile to those who ship oil in bulk in tank cars in comparison with those who ship oil in barrels in car lots. It is urged in behalf of the right of the railroads to make such differences in the rates that the different circumstances and conditions about these two modes of carrying oil fully justify these differences in the rates, viz.: the carrier furnishes the car for transporting the barrel oil, while the shipper usually supplies car and tank for carriage of tank oil, and that at a less charge for mileage than actual cost

19 Schumacher Milling Co. V. Chicago, R. I. & P. R. R., 6 I. C. C. Rep. 61.

20 See Roth v. T. & P. Ry., 9 I. C. C. 602.

21 See Pennsylvania Refining Co. v. Western N. Y. & P. R. R., 208 U. S. 208, 52 L. ed. 456, 28 Sup. Ct. 268.

of maintenance of the car; injury to the cars used for barrel oil unfitting them for general use; larger returnempty haul on box cars used for barrel oil than on tank cars; greater risk of such goods in transit and in depot, as well as greater danger to other freights in same train and in same depot in the case of barrel oil over that of tank oil, greater cost of service in loading and unloading barrel oil to and from the cars by the carrier, when tank oil is invariably loaded and unloaded by the shipper; inability of carrier to secure insurance on cars used for transporting barreled oil, while shipper of tank oil furnishes the car and assumes all risks.22 Such differences in the cost of the service should, it would seem, justify a carrier in making reasonable differences in its rates.

§ 725. Shipments in trainloads problematical.

It is urged with considerable force that a railroad is justified under the rules that are now under discussion in giving a lower rate for a trainload consigned from one shipping point to one point of delivery, since it cannot be denied that there is at least a slight difference in the cost of handling the traffic in trainloads. But such concessions are dangerous, as it would tend to concentrate the business of the country into very few hands if a lower rate could be given to the great operator who could ship in train lots. At all events the Interstate Commerce Commission set itself against such special rates for train loads in Paine Bros. & Co. v. Lehigh Valley Railroad. 23 "We perceive no sufficient reason for different rates on carload than on cargo or trainload shipments, whether the grain is carried for export or for domestic use. The principle involved in such a distinction violates the rule of equality and tends to defeat its just and wholesome purpose. That purpose is not fully accomplished if one scale of charges is

"? See Scofield v. Lake S. & M. S. Ry., 2 Int. Com. Rep. 67, 2 I. C. C. Rep. 90.

23 7 I. C. C. Rep. 218.