always been that this would be illegal discrimination.1 For the feeling has been universal that even the varying cost of shippers in delivering to the carrier for shipment can have no bearing on the case. Mr. Justice Brewer said: "Whatever the Baltimore & Ohio Company might lawfully do to draw business from a competing line, whatever inducements it might offer to the customers of that competing line to induce them to change their carrier, is not a question in this case. The wrong prohibited by the section is discrimination between shippers. It was designed to compel every carrier to give equal rights to all shippers over its own road and to forbid it by any device to enforce higher charges against one than another." 2 § 1317. Customers induced to make expensive preparations. There are certain cases where a customer has been induced to make expensive preparations for giving his business by the promise of concessions. In Bundred v. Rice,3 a shipper of oil set forth in his complaint a most extraordinary state of affairs-a contract whereby a railroad company bound itself to carry for one shipper crude petroleum at half the rate it agreed to charge all others, and to pay such favored shipper one half the amount collected 1 Wight v. United States, 167 U. S. 512, 42 L. ed. 258, 17 Sup. Ct. 822 (1897). But it has been held that a railroad may give cartage without additional charge to all customers at a competitive station without making the same concession to its patrons at another station. Interstate Comm. Comm. v. Detroit, G. H. & M. Ry. Co., 167 U. S. 633, 42 L. ed. 306, 17 Sup. Ct. 986 (1897). 2 Evershed v. London & N. W. Ry. Co., L. R. 3 App. Cas. 1029 (1878). Conversely if a railroad switches cars free for certain consignees at a given station it would be discrimination not to do this switching for all. Galesburg & G. E. R. R. Co. v. West, 108 Ill. App. 504 (1903). 349 Ohio St. 640, 32 N. E. 169, 34 Am. St. Rep. 589 (1892). But see Willcox v. Durham & C. R. R. Co. (N. C.), 67 S. E. 758 (1910). from others, in consideration of his agreeing to establish and maintain a system of pipe lines to its road. This was held wholly void and money so paid by a shipper in ignorance of the agreement, and received by the favored shipper was recovered back in an action for money had and received by the former against the latter. An extract from the per curiam opinion follows: "Whatever may have been the financial condition of the railroad company, it was not warranted in making a contract by which it bound itself to carry for one shipper at half the rate it agreed to charge all others for the same service, in consideration of his agreeing to establish a system of pipe lines to its road; at the same time and for the same consideration binding itself to charge all others double the amount as a fixed, open rate, and to pay to such favored shipper one half of it when collected." 1 Topic B. Concessions to Large Customers § 1318. Whether concessions may be made to large customers. It has not been uncommon for the managers of public service corporations to make lower proportionate rates to larger than to smaller customers. In the older times this was practiced openly as there was then no recognized rule against discrimination as such. But even in these later days it is often attempted to defend this practice on principle. For this policy is of great importance to the managers of public services who may often see the opportunity to get large amounts of valuable business, highly profitable in the aggregate even at lower proportionate rates, if 1 In Gallagher v. Equitable Gaslight Co., 141 Cal. 699, 75 Pac. 329 (1904), no objection was raised to a contract by which a gas company gave unusually low rates to a hotel proprietor who had formerly lighted his premises by electricity on the ground that he had spent large sums in changing his fixtures from electricity to gas. they can still maintain higher proportionate rates upon the regular business which they get from smaller customers who are not in a position to dictate their terms. That this policy may often be advantageous in public business, as it is in private business, may be admitted, but it has already been seen that public duty may conflict with business policies. If, therefore, these concessions to larger shippers are in conflict with the public duty which the common carrier owes to smaller shippers, they must be held illegal as unjust discriminations. And this will be the clearer when it is shown that the favoring of such large shippers will give them such commercial advantages that they may crush out their smaller competitors in the common markets. The prevalent rule forbidding the granting of special reductions to larger shippers, as such, on the ground that they furnish a greater aggregate of business to the common carrier, seems, therefore, a necessary part of the law forbidding all personal discrimination. § 1319. Unreasonable differences universally forbidden. All courts now agree that if there is an unreasonable difference made between the rates given to the large patron and the rates charged a small patron, the schedule is illegal in that respect. The most recent case which brings out this test is Western Union Telegraph Company v. Call Publishing Company,' where the plaintiff complained of a $5 rate per 100 words daily per month charged it for news despatches while its contemporary was charged only $1.50. Mr. Justice Brewer pointed out that it could not be said even in this case that the apparent discrimination could not be justified; for the general principle as he pointed out has two sides. Of course, such equality of right does not prevent differences in the modes and kinds of serv 1 Western Union Telegraph Co. v. Call Publishing Co., 181 U. S. 92, 45 L. ed. 765, 21 Sup. Ct. 561 (1901). ice and different charges based thereon. There is no cast iron line of uniformity which prevents a charge from being above or below a particular sum, or requires that the service shall be exactly along the same lines. But that principle of equality does forbid any difference in charge which is not based upon difference in service, and even when based upon difference of service, must have some reasonable relation to the amount of difference, and cannot be so great as to produce an unjust discrimination.1 § 1320. Reasonable differences sometimes permitted. In some jurisdictions it is still held that there is no legal objection to making a reasonable difference in the rates given to large shippers in comparison with the rates charged small shippers. The argument is that this is a business policy universally practiced; but the answer seems to be that this may nevertheless be opposed to the peculiar duties which the common carrier owes to the public as a whole. However, an extract is given from the opinion of Mr. Justice Allen in Concord and Portsmouth Railroad Company v. Forsaithe,2 so that the weight of this argument may be felt. In holding that the complainant, a small shipper, had no case, even under a statute which forbade discriminations, he said: "The terms of the statute must receive the interpretation which long-established usage and the custom of the commercial world have given them. That custom in all branches of business always has been, and is, to move, care for, and sell a large 1 It was against unreasonable differences of this sort that Mr. Justice Brewer, then upon circuit, declared himself in Burlington, C. R. & N. Ry. v. Northwestern Fuel Co., 31 Fed. 652 (1887), where there was a rate of $2.40 per ton to all persons shipping less than 100,000 tons of coal per annum over its road while This case was approved in State v. Central Vt. Ry. Co., 81 Vt. 463, 71 Atl. 194, 130 Am. St. Rep. 1065 (1908). amount of a given commodity, in one parcel or in a given time, at a less price per pound, yard or ton, than a smaller quantity of the same commodity, distributed in many and smaller parcels at different times. The expense of handling, carrying, and storing the smaller amount is much greater, pro rata, than that of the same operations upon the larger amount in one body, and a discrimination in favor of the larger dealers is not inequality, but reasonable equality. By any other construction the statute would defeat itself; for taking into account the lessened expense pro rata for transporting the greater amount of property in a single body or in a given time, the carrier would, by absolute equality of rates for all cases, receive a greater price for carrying the larger quantity than the smaller, and thereby make an unjust discrimination against the person transporting the largest quantity of goods. Unreasonable equality is inequality." § 1321. Authority for such differentials. 1 2 From the point of view of the company, thus it is an obvious business right to make lower proportionate rates to larger customers. And where the rule against discrimination is not recognized to its full extent, such concessions are freely admitted. Thus in a New York case it was held that lower water rates might be given to large consumers than to small consumers, the court saying: "The objection made here is that the persons who consumed the large quantities of water were not charged 1 See also: Iowa.-Cook v. Chicago, R. I. & P. R. R. Co., 81 Iowa, 551, 46 N. W. 1080, 25 Am. St. Rep. 512, 9 L. R. A. 764 (1890). Missouri.-Rothschild V. Wabash, St. L. & P. C. R. R. Co., 92 Mo. 91, 4 S. W. 418 (1887). 2 New York.-Silkman v. Yonkers Water Commissioners, 152 N. Y. 327, 46 N. E. 612 (1897). See also Metropolitan Electric Supply Co. v. Ginder (1901), 2 Ch. 799, holding lower rates for large users of electricity justifiable. |