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"But it is not unjust discrimination-it is not contrary to the common law, and it is not contrary to our statute—to make a difference in rates where the expense or difficulty of performing the services renders such discrimination fair and reasonable." 12

§ 736. Differences may be made proportionate to the cost of service.

It follows from what has been said that differences may be made proportionate to the cost of service without the making of any illegal discrimination; indeed, in such cases it would be unreasonable not to make such differences upon that basis. In the leading case upon this point, 13 the general principle is thus stated: "In determining the duty of a common carrier, we must be reasonable and just. The carrier should be permitted to charge reasonable compensation for the goods transported. He should not, however, be permitted to unreasonably or unjustly discriminate against other individuals, to the injury of their business, where the conditions are equal. So far as is reasonable, all should be treated alike; but we are aware that absolute equality cannot in all cases be required, for circumstances and conditions may make it impossible or unjust to the carrier. The carrier may be able to carry freight over a long distance at a less sum than he could for a short distance. He may be able to carry

(1885); Chicago & A. R. Co. v. People, 67 Ill. 11, 16 Am. Rep. 599 (1873); Railroad Co. v. Ervin, 118 Ill. 250, 8 N. E. 862 (1886); Messenger v. Railroad Co., 36 N. J. Law, 407, 13 Am. Rep. 457 (1874); Atwater v. Railroad Co., 48 N. J. Law, 55, 2 Atl. 803 (1886); McDuffee v. Railroad Co., 52 N. H. 430, 13 Am. Rep. 72, B. & W. 149 (1873); Railroad Co. v. Rust, 58 Tex. 98; Ragan v. Aiken, 9 Lea (77 Tenn.), 609 (1882).

12 Citing Interstate Commerce Commission v. Baltimore & O. R. Co., 43 Fed. 37, affirmed s. c. 145 U. S. 263, 36 L. Ed. 699, 12 Sup. Ct. 844 (1892); Bayles v. Railway Co., 13 Colo. 181, 22 Pac. 341, 5 L. R. A. 480 (1889); Root v. Railroad Co., 114 N. Y. 300, 21 N. E. 403, 4 L. R. A. 33, B. & W. 377 (1889); Savitz v. Railway Co., 49 Ill. App. 315, affirmed s. c. 150 Ill. 208, 37 N. E. 235, 27 L. R. A. 626 (1894).

13 Root v. Long I. R. R., 114 N. Y. 300, 21 N. E. 403, 4 L. R. A. 33, B. & W. 377 (1889).

a large quantity at a less rate than he could a smaller quantity. The facilities for loading and unloading may be different in different places, and the expenses may be greater in some places than in others. Numerous circumstances may intervene which bear upon the cost and expenses of transportation, and it is but just to the carrier that he be permitted to take these circumstances into consideration in determining the rate or amount of his compensation. His charges must therefore be reasonable, and he must not unjustly discriminate against others, and in determining what would amount to unjust discrimination all the facts and circumstances must be taken into consideration. This raises a question of fact, which must ordinarily be determined by the trial court." 14

14 It is universally admitted that real differences in the cost of serving justify differences in rates. This matter is discussed elaborately in Chapter XXIII infra. Leading cases to this effect are:

United States-Interstate Com. Com. v. B. & Q. R. R., 145 U. S. 263, 36 L. Ed. 699 (1892); Western U. T. Co. v. Call Pub. Co., 181 U. S. 92, 45 L. Ed. 765, 21 Sup. Ct. 561 (1901), overruling s. c. 44 Neb. 326, 62 N. W. 506 (1895); 3181⁄2 Tons of Coal, 14 Blatch. 453, Fed. Cas. 14,010, B. & W. 364 (1878); Hays v. Pennsylvania Co., 12 Fed. 309, B. & W. 368 (1882); Burlington, C. R. & N. Ry. v. N. W. Fuel Co., 31 Fed. 652 (1897).

Alabama-Lotspeich v. Central Ry. & B. Co., 73 Ala. 306 (1882).
Illinois-People v. Chicago & A. R. R., 67 Ill. 118 (1873).

Ohio State v. Cincinnati, N. O. & T. B. Ry., 47 Ohio St. 130, 23 N. E. 928, B. & W. 400 (1890).

TITLE I.

DISCRIMINATION BETWEEN PERSONS.

CHAPTER XXII.

ILLEGAL DISCRIMINATION.

§ 741. The same rate for substantially similar services.

TOPIC A-CONCESSIONS TO GET COMPETITIVE BUSINESS.

§ 742. Whether concessions may be made in competition.

743. Competitive conditions do not justify making discriminations.

744. Reductions to get competitive business illegal.

745. Concessions allowed by some cases to get shipments from outlying territory.

746. Such concessions forbidden by later cases.

747. Shippers making expensive preparations cannot be favored. 748. Additional services performed for certain shippers.

TOPIC B-CONCESSIONS TO LARGE SHIPPERS.

§ 749. Whether concessions may be made to large shippers.
750. Unreasonable differences forbidden by all courts.
751. Reasonable differences permitted by some courts.
752. Prevalent doctrine that no reduction should be allowed.

753. Reductions to large shippers unjust to small shippers.

754. Services to large shippers and to small shippers practically identical. 755. Reductions to passengers in parties.

TOPIC C-REBATES TO EXCLUSIVE SHIPPERS.

§ 756. Whether lower rates may be made to exclusive shippers.

757. Shippers who use rival lines must not be charged more than usual rates.

758. Whether lower rates may be given those who ship exclusively.

759. Shippers who agree to give all their business.

760. Shippers who agree to furnish large quantities of freight.

761. Charging other shippers more than contract rates.

TOPIC D-CONCESSIONS FOR SPECIAL KINDS OF BUSINESS.

§ 762. Different rates for goods used for different purposes.

763. Such rates allowed by some cases.

764. Such differences held illegal discrimination by other cases. 765. Rates to certain classes of shippers.

766. When commodities are of different character.

767. Special classes of passengers.

8741. The same rate for substantially similar services.

In the preceding chapter the general principles as to discrimination were set forth, and the conclusion was reached that if two shippers asked the same service under the same conditions they ought to be given the same rate. In this chapter it is proposed to describe what substantially identical services are, and various cases are discussed where the contention has been made that the conditions were different. In most of the cases in this list it will be seen upon examination that the services are not dissimilar. Whenever a railroad initiates a policy which will get it more business or enable it to hold the business that it has, it is prone to claim that the differing conditions in the particular case justify making a lower rate to one shipper or class of shippers, while maintaining higher rates for other shippers. But in many such cases it will be found that what the railroad is doing is in the face of the principal rule forbidding personal discrimination.

TOPIC A-CONCESSIONS TO GET COMPETITIVE BUSINESS.

8742. Whether concessions may be made in competition.

The idea runs through certain cases that it is justifiable to make reductions to certain shippers where business cannot be obtained without it. This principle, as has been seen, has some scope in permitting the rates to stations where there is competition to be made lower relatively than the rates to stations which have no competitive rates. But it may well be doubted whether it has any operation in justifying a difference in rates between two persons shipping from the same station; for this would seem to

be personal discrimination since these two shippers are asking the same service. But to some courts it has seemed otherwise, these courts holding that if concessions are necessary to get more business by inducing a shipper who is now employing a rival route to give up his present connections, this necessity justifies the reductions. This argument apparently disregards the law of public service which, of course, governs this whole question.1

743. Competitive conditions do not justify making discriminations.

It must be insisted upon at the outset that competitive conditions in themselves do not justify the making of personal discriminations between shippers, giving a lower rate to those to whom it is necessary to make concessions. This is forbidden both by the English courts and by the United States courts under their respective acts forbidding discrimination, but permitting reasonable concessions when the conditions are dissimilar. Thus in the leading case of London and Northwestern Railroad v. Evershed,2 it was said: "We think that a railway company cannot, merely for the sake of increasing their traffic, reduce their rates in favor of individual customers, unless, at all events,

1 Concessions to get competitive business have been justified in some cases even if they involve discrimination. Johnson v. Pensacola & P. R. R., 16 Fla. 623, 26 Am. Rep. 731 (1878); Chicago & A. R. R. v. Coal Co., 79 Ill. 121 (1875); Lough v. Outerbridge, 143 N. Y. 271, 38 N. E. 292, 42 Am. St. Rep. 712, 25 L. R. A. 674, B. & W. 380 (1894); Avinger v. So. Car. R. R., 29 S. C. 265, 7 S. E. 493, 13 Am. St. Rep. 716 (1888); Ragan & Buffet v. Aiken, 9 Lea (77 Tenn.), 609 (1882).

But by the better view such concessions are held unjustifiable when they involve discrimination: Wight v. United States, 167 U. S. 512, 42 L. Ed. 258, 17 Sup. Ct. 822; Menacho v. Ward, 27 Fed. 529, B. & W. 372 (1886); Messenger v. Pennsylvania R. R., 7 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); Brundred v. Rice, 49 Ohio St. 640, 32 N. E. 169, 34 Am. St. Rep. 589 (1892); Fitzgerald v. Grand Trunk Ry., 63 Vt. 169, 22 Atl. 76, 13 L. R. A. 70 (1891).

2 L. R. 3 App. Cas. 1029 (1878).

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