is not all discriminations or preferences that fall within the inhibition of the statute,- only such as are unjust or unreasonable. For instance, it would be obviously unjust to charge A. a greater sum than B. for a single trip from Washington to Pittsburgh; but, if A. agrees not only to go, but to return by the same route, it is no injustice to B. to permit him to do so for a reduced fare, since the services are not alike, nor the circumstances and conditions substantially similar, as required by section 2 to make an unjust discrimination. Indeed, the possibility of just discrimina

tions and reasonable preferences is recognized by these sections, changed

in declaring what shall be deemed unjust. We agree, however, with the plaintiff in its contention that a charge may be perfectly reasonable under section 1, and yet may create an unjust discrimination or an unreasonable preference under sections 2 and 3. As was said by Mr. Justice BLACKBURN in Railway Co. v. Sutton, L. R. 4 H. L. 226, 239: "When it is sought to show that the charge is extortionate, as being contrary to the statutable obligation to charge equally, it is immaterial whether the charge is reasonable or not; it is enough to show that the company carried for some other person or class of persons at a lower charge during the period throughout which the party complaining was charged more under the like circumstances."

66

com

The question involved in this case is whether the principle above stated, as applicable to two individuals, applies to the purchase of a single ticket covering the transportation of 10 or more persons from one place to another. These are technically known as party rate tickets, and are issued principally to theatrical and operatic companies for the transportation of their troupes. Such ticket is clearly neither a "mileage" nor an excursion "ticket within the exception of section 22; and upon the testimony in this case it may be doubtful whether it falls within the definition of " mutation tickets," as those words are commonly understood among railway officials. The words "commutation ticket" seem to have no definite meaning. They are defined by Webster (edition of 1891) as "a ticket, as for transportation, which is the evidence of a contract for service at a reduced rate." If this definition be applicable here, then it is clear that it would include a party rate ticket. In the language of the railway, however, they are principally, if not wholly, used to designate tickets for transportation during a limited time between neighboring towns, or cities and suburban towns. The party rate ticket upon the defendant's road is a single ticket, issued to a party of 10 or more, at a fixed rate of 2 cents per mile, or a discount of one third from the regular passenger rate. The reduction is not made by way of a secret

stattute

rebate or drawback, but the rates are scheduled, posted, and open to the public at large.

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But, assuming the weight of evidence in this case to be that the party rate ticket is not a "commutation ticket," as that word was commonly understood at the time of the passage of the act, but is a distinct class by itself, it does not necessarily follow that such tickets are unlawful. The unlawfulness defined by sections 2 and 3 consists either in an "unjust discrimination" or an undue or unreasonable preference or advantage," and the object of section 22 was to settle beyond all doubt that the discrimination in favor of certain persons therein named should not be deemed unjust. It does not follow, however, that there may not be other classes of persons in whose favor a discrimination may be made without such discrimination being unjust. In other words, this section is rather illustrative than exclusive. Indeed, many, if not all, the excepted classes named in section 22 are those which, in the absence of this section, would not necessarily be held the subjects of an unjust discrimination, if more favorable terms were extended to them than to ordinary passengers. Such, for instance, are property of the United States, state, or municipal governments; destitute and homeless persons transported free of charge by charitable societies; indigent persons transported at the expense of municipal governments; inmates of soldiers' homes etc., and ministers of religion,-in favor of whom a reduction of rates had been made for many years before the passage of the act. It may even admit of serious doubt whether, if the mileage, excursion, or commutation tickets had not been mentioned at all in this section, they would have fallen within the prohibition of sections 2 and 3; in other words, whether the allowance of a reduced rate to persons agreeing to travel 1,000 miles, or to go and return by the same road, is a "like and contemporaneous service under substantially similar conditions and circumstances" as is rendered to a person who travels upon an ordinary single trip ticket. If it be so, then, under state laws forbidding unjust discriminations, every such ticket issued between points within the same state must be illegal. In view of the fact, however, that every railways company issues such tickets; that there is no reported case, state or federal, wherein their legality has been questioned; that there is no such case in England; and that the practice is universally acquiesced in by the public, it would seem that the issuing of such tickets should not be held an unjust discrimination or an unreasonable preference to the persons traveling upon them.

But, whether these party rate tickets are commutation tickets proper, as known to railway officials, or not, they are obviously

tic Question as to reasonableness of party no question as to commutation tickets

within the commuting principle. As stated in the opinion of Judge SAGE in the court below: "The difference between commutation and party rate tickets is that commutation tickets are issued to induce people to travel more frequently, and party rate tickets are issued to induce more people to travel. There is, however, no difference in principle between them, the object in both cases being to increase travel without unjust discrimination, and to secure patronage that would not otherwise be secured."

The testimony indicates that for many years before the passage of the act it was customary for railroads to issue tickets at reduced rates to passengers making frequent trips, trips for long distances, and trips in parties of 10 or more, lower than the regular single fare charged between the same points; and such lower rates were universally made at the date of the passage of the act. As stated in the answer to meet the needs of the commercial traveler, the 1,000-mile ticket was issued; to meet the needs of the suburban resident or frequent traveler, several forms of tickets were issued. For example, monthly or quarterly tickets, good for any number of trips within the specified time; and 10, 25 or 50 trip tickets, good for a specified number of trips by one person, or for one trip by a specified number of persons; to accommodate parties of 10 or more, a single ticket, one way or round trip, for the whole party, was made up by the agent on a skeleton form furnished for that purpose; to accommodate excursionists traveling in parties too large to use a single ticket, special individual tickets were issued to each person. Tickets good for a specified number of trips were also issued between cities where travel was frequent. In short, it was an established principle of the business that whenever the amount of travel more than made up to the carrier for the reduction of the charge per capita, then such reduction was reasonable and just in the interests both of the carrier and of the public. Although the fact that railroads had long been in the habit of issuing these tickets would be by no means conclusive evidence that they were legal, since the main purpose of the act was to put an end to certain abuses which had crept into the management of railroads, yet congress may be presumed to have had those practices in view, and not to have designed to interfere with them, except so far as they were unreasonable in themselves, or unjust to others. These tickets, then, being within the commutation principle of allowing reduced rates in consideration of increased mileage, the real question is whether this operates as an undue or unreasonable preference or advantage to this particular description of traffic, or an unjust discrimination against others. If, for example, a railway makes to the public generally a certain rate of

freight, and to a particular individual residing in the same town a reduced rate for the same class of goods, this may operate as an undue preference, since it enables the favored party to sell his goods at a lower price than his competitors, and may even enable him to obtain a complete monopoly of that business. Even if the same reduced rate be allowed to every one doing the same amount of business, such discrimination may, if carried too far, operate unjustly upon the smaller dealers engaged in the same business, and enable the larger ones to drive them out of the market.

The same result, however, does not follow from the sale of a ticket for a number of passengers at a less rate than for a single passenger; it does not operate to the prejudice of the single passenger, who cannot be said to be injured by the fact that another is able in a particular instance to travel at a less rate than he. . . . The evidence shows that the amount of business done by means of these party-rate tickets is very large; that theatrical and operatic companies base their calculations of profits to a certain extent upon the reduced rates allowed by railroads; and that the attendance upon conventions, political and religious, social and scientific, is, in a great measure, determined by the ability of the delegates to go and come at a reduced charge. If these tickets were withdrawn, the defendant road would lose a large amount of travel, and the single-trip passenger would gain absolutely nothing. If a case were presented where a railroad refused an application for a party rate ticket upon the ground that it was not intended for the use of the general public, but solely for theatrical troupes, there would be much greater reason for holding that the latter were favored with an undue preference or advantage.

In order to constitute an unjust discrimination under section 2 the carrier must charge or receive directly from one person a greater or less compensation than from another, or must accomplish the same thing indirectly by means of a special rate, rebate, or other device; but, in either case, it must be for a "like and contemporaneous service in the transportation of a like kind of traffic, under substantially similar circumstances and conditions." To bring the present case within the words of this section, we must assume that the transportation of ten persons on a single ticket is substantially identical with the transportation of one, and, in view of the universally accepted fact that a man may buy, contract, or manufacture on a large scale cheaper proportionately than upon a small scale, this is impossible.

Upon the whole, we are of the opinion that party rate tickets, as used by the defendant, are not open to the objections found by the Interstate Commerce Commission, and are not in violation of

Such tickets

are reasonable.

the act to regulate commerce, and the decree of the court below is therefore affirmed."

SCOFIELD บ. LAKE SHORE AND MICHIGAN SOUTHERN RAILWAY CO.

43 Oh. St. 571. 1885.1

THE plaintiffs, Scofield, Shurmer & Teagle, filed their petition in the court of common pleas, and therein alleged, in substance, that since 1875 they have been manufacturers of and dealers in refined and other products of petroleum at Cleveland. That during the same time the Standard Oil Company was largely engaged in the same business. That defendant, The Lake Shore and Michigan Southern Railway Company, was the owner of a line of railroad passing through Cleveland, and extending from Buffalo, New York, to Chicago, Illinois, with branches to Detroit and Grand Rapids, in Michigan. That it was amply supplied with proper equipment to receive and carry the product of plaintiffs.

2 In Lake Shore & M. S. Ry. Co. v. Smith (1889), 173 U. S. 684, it was held that a State may not compel the sale of 1000 mile books at reduced rates. This decision is followed in Beardsley v. New York L. E. & W. R. R. Co. (1900), 162 N. Y. 230; Commonwealth v. Atlantic C. L. Ry. (1906), 106 Va. 61; State ex rel. McCue v. Great Northern Ry. Co. (1908), 17 N. D. 370; State v. Bonneval (1911), 128 La. 902. In Minor v. Erie R. R. Co. (1902), 171 N. Y. 566, the mileage-book act was held constitutional as applied to a corporation reincorporated after its passage, and "subject to all the provisions, duties and liabilities imposed by law on such corporations." In State er. rel. Simpson v. Chicago, M. & St. P. Ry. Co. (1912), 118 Minn. 380, a requirement that members of the militia be carried at reduced rates was held constitutional. Contra, in re Gardner (1911), 84 Kan. 264. In Massachusetts v. Interstate Consolid. Ry. Co. (1905), 187 Mass. 436, a requirement that schoolchildren be carried at half-fare was upheld (affirmed, 207 U. S. 79, but the constitutional question not passed upon). A requirement that six tickets be sold for 25 cents was held constitutional in Duluth St. Ry. Co. v. Railroad Comm. (1915), 161 Wis. 245, 263.

Compare Willcox v. Consolidated Gas Co. (1909), 212 U. S. 19, holding that different rates can be fixed by state regulation for gas used by a municipality and gas used by private patrons.

The power of the Interstate Commerce Commission to fix carload and less than carload rates for goods is recognized in Cincinnati, H. & D. Ry. Co. v. Interstate Commerce Comm. (1907), 206 U. S. 142.

See Borden D. Whiting, "Commutation Tickets and Rate Regulation," 8 Columbia L. Rev. 636. See also Note, 11 L. R. A. (N. S.) 973, with regard to the power to require carriers to serve classes at reduced rates.

1 Only an extract from the statement of facts and an extract from the opinion are here reprinted.— Ed.