shipper, are unlawful whether affected directly or indirectly by methods of classification." 8

766. When commodities are of different character.

Of course different rates may be given when the commodities. are not quite of the same character. This is probably the explanation of a series of cases in Kentucky justifying a difference in rate between steam coal to manufacturers and domestic coal for dealers. Thus in Commonwealth v. Louisville & Nashville Railroad Company the facts shown at the trial were that the electric light company was engaged in the business of manufacturing and selling electricity; that the coal transported to it was a very low grade of coal, commonly known as "slack," and was used by the company for steam purposes; that Wade was a coal dealer in Franklin, and that the particular car load of coal on which this proceeding was based was the highest grade of coal, known as "lump"; that both were hauled in the same sort of cars, and unloaded in the same manner; that defendant's regular freight tariff on coal from Bevier to Franklin in March, 1899, was $1.50 per ton, except that on coal used for steam purposes by manufacturers, which term included gas, electric light, power, and ice companies, the rate was 30 per cent. less than $1.50 per ton.9

9 a

Upon a review of the authorities cited in the note 10 the court.

8 In Smith v. Findley, 34 Kans. 316 (1885), it appeared that a low rate was given to an immigrant for a car of "household goods," but that he packed a part of the car with provisions, bacon, flour, and the like for sale. It was held that he could not do this under the circumstances. See, also, Fry v. Louisville & N. R. R., 103 Ind. 265, 2 N. E. 744 (1885), where a lower rate was quoted for commodities for "farm purposes," notwithstanding which the court enforced the bargain of the parties. 9112 Ky. 783, 68 S. W. 1103 (1902).

9a Much the same facts appeared in Louisville, E. & St. L. C. R. R. v. Crown Coal Co., 43 Ill. App. 228 (1891).

10 Louisville & N. R. R. v. Com., 105 Ky. 179, 48 S. W. 416 (1898); Louisville & N. R. R. v. Com., 108 Ky. 628, 57 S. W. 508 (1900); Louisville & N. R. R. v. Com., 108 Ky. 628, 57 S. W. 511 (1900).

held that "it was allowable and proper for a railroad company to classify freight according to its quality or character and marketable value; and discrimination in charges for carrying different classes or kinds is not only universally recognized, but plainly authorized by section 215. And that this settled the question since it was admitted in the pleadings and shown by proof that the respective car loads of coal upon which this action was founded were wholly different both as to quality and marketable value." 11

767. Special classes of passengers.

Granting lower rates with the customary accommodations to persons representing that they were traveling for the purpose of buying land or settling near the railroad line has been held unlawful discrimination; 12 but special rates to emigrants, riding exclusively upon " emigrant trains" with poor accommodations have been permitted. 13 This distinction is well grounded upon the difference in the cost of service to the two classes. Classifications based upon the form of contract under which passengers are carried have been sustained, as in the case of allowing to a person riding upon a commutation ticket a lower rate than that allowed to one riding upon a mileage ticket; but it is not justifiable to sell such tickets to commercial travellers at a lower rate. 14

It has also been held that a railroad may give an especially low rate for passenger service to shippers of freight in large

11 See Louisville & W. R. R. v. Fulgham, 91 Ala. 555, 8 So. 803 (1890), applying a statutory provision permitting reduction to be made to manufacturers to build up a community by requiring that any such reductions must be open to all manufacturers.

12 11 Smith v. Northern P. R. R. Co., 1 Int. Com. Rep. 611 (1887). 13 Savery & Co. v. N. Y. C. & H. R. R. Co., 2 Int. Com. Rep. 210 (1888). 14 Associated Wholesale Grocers v. Mo. Pac. Ry., 1 I. C. C. Rep. 393.

quantities, 15 but this discrimination seems to be the same in principle as the giving of reduced rates to large shippers, which has been above considered illegal. 16

"In the transportation of passengers carriers are performing a public duty under franchises granted by the State, and are subject to the rules of law which require absolute impartiality to all, when the circumstances and conditions are substantially similar. The fact that their own interests may be promoted to some extent by swerving from this rule cannot be regarded as sufficient to warrant a departure from the obvious language of the Statute." 17

15 Inverness Chamber of Commerce v. Highland Ry., 11 R. & T. Cas. 218 (1890).

16 § 749, supra.

17 Smith v. No. Pacific R. R., 1 Int. Com. Rep. 611 (1887).

CHAPTER XXIII.

JUSTIFIABLE DIFFERENCES.

TOPIC AREASONABLE DIFFERENCES IN RATES.

§ 771. Modification of the rule forbidding different rates. 772. Rates should not be disproportionate.

773. Consideration of the cost of serving.

774. Shippers requiring less service.

TOPIC B-SHIPMENT IN MORE CONVENIENT UNITS.

§ 775. Differences in the character of the service recognized. 776. Shipment in car loads.

777. Advantages of car load traffic.

778. Permission to mix carloads.

779. Lower rates for shipments in bulk.

780. Shipments in train loads problematical.

781. Contracts for regular shipments.

TOPIC C-FACILITIES FURNISHED BY SHIPPER.

§ 782. Terminal facilities furnished by shippers. 783. Transportation expenses paid by shipper.

784. Rental paid on shippers cars.

785. Difference in rates unjustifiable unless both services are offered. 786. Various devices for giving concessions to shippers in bulk considered.

787. Railroads must provide adequate equipment for handling shipments in bulk.

TOPIC D-OTHER CONSIDERATIONS FOR REDUCTIONS.

§ 788. When consideration is given for reduction.

789. Whether indefinite considerations can be a basis. 790. Concessions to those who deal with the carrier.

791. Rates adopted to foster the interests of the carrier.

TOPIC A- REASONABLE DIFFERENCES IN RATES.

§ 771. Modification of the rule forbidding different rates. When the services asked of the carrier are essentially dissimilar the rule against discrimination is apparantly much modified. It is rightly held that different rates may be made when the cost of service is different; for to enforce equal rates under those circumstances, as has been said, would in reality be discriminatory under ordinary conditions. This is admitted even in the most extreme case against personal discrimination, Messenger v. Pennsylvania Railroad Company.

1

"It must not be inferred that a common carrier, in adjusting his price, cannot regard the peculiar circumstances of the particular transportation. Many considerations may properly enter into the agreement for carriage or the establishment of rates, such as the quantity carried, its nature, risks, the expense of carriage at different periods of time, and the like; but he has no right to give an exclusive advantage or preference, in that respect, to some over others, for carriage, in the course of his business. For a like service, the public are entitled to a like price. There may be isolated exceptions to this rule, where the interest of the immediate parties is alone involved, and not the rest of the public, but the rule must be applied whenever the service of the carrier is sought or agreed for in the range of business or trade."

§ 772. Rates should not be disproportionate.

It has already been explained at much length 2 that the railway company may classify freights and passengers and charge different rates for the different classes, if there are reasonable grounds for such discrimination in the difference of the cost of

17 Vroom (36 N. J. L.), 407, 13 Am. Rep. 457, 8 Vroom (37 N. J. L.), 531, 18 Am. Rep. 754, B. & W. 357 (1874).

2 See Chapter XVIII passim.