shipment is in a form more convenient for handling, as in casks rather than in cases, or if the freight is tendered in a form permitting a greater car load, the difference between cotton in bulk and in tightly compressed bales for example, lower rates may be given proportionate to the difference in the cost of service. "We are not unmindful of the rule" said the Indiana court in a leading case, "which permits a common carrier to discriminate in favor of a shipper who transports large quantities of a given commodity in one parcel at a time, as against a shipper who transports the broken packages. Such discrimination is rendered necessary by the increased expense of handling, storing, and caring for the smaller quantities, and is not unreasonable." 1

§ 1345. Different charges for different service.

Where a customer requires less service than usual a lower rate is justified in his case. On the other hand where a customer requires more service than usual, it is not unreasonable to charge him more than others. In neither case is it discrimination to recognize the differences in the cost of service in making the rates; indeed in extreme cases it would be unreasonable not to do so. Thus a telephone subscriber outside of usual limits may without discrimination be charged a higher rate than his fellow citizens generally.2 A telegraph company may make an extra charge for the delivery of messages outside its usual limits. Again a gas company can require a large taker to make a proportionally larger deposit. And an electric

1 Quoted from Louisville, E. & St. L. C. R. Co. v. Wilson, 132 Ind. 517, 32 N. E. 311 (1892).

Legislation compelling railroads to sell mileage tickets at a loss is unconstitutional. Lake Shore & M. S. Ry. Co. v. Smith, 173 U. S. 684, 43 L. ed. 858, 19 Sup. Ct. 565 (1899).

4

See further Philadelphia v. Philadelphia R. T. Co. (Pa. St.), 73 Atl. 923 (1909).

2 Central Dist. & P. Telegraph Co. v. Com., 114 Pa. St. 592 (1886).

Evans v. Western Union Telegraph Co., 56 S. W. 609 (1900). 4 Williams v. Mutual Gas Co.,

company may make higher charges when asked to install a service wire for a taker whose premises are far from the established main.1 These examples taken almost at random from various public services all illustrate the accepted principle, that when the cost of service plainly is different a different rate can be made.

§ 1346. Difference in the nature of the service.

Various other illustrations of this rule may be found in the public services other than transportation. Throughout public service a difference in charge based upon a difference in the service asked is justifiable. Thus a telephone company may make a lower rate to those who have a simple instrument of the ordinary type than those who have an elaborate installation involving special equipment. So a telegraph company may make a lower rate for a night message which need not be handled with such dispatch as the day message for which the higher rate is paid.3 A water company may sell unfiltered water for manufacturing purposes cheaper than filtered water for domestic uses. And an electric company may sell high tension electricity for power purposes cheaper than it sells transformed electricity for household use." Examples of difference of this sort in rates proportioned to the cost of service have already been seen in dealing with particular rates.

§ 1347. Both rates must be open to all.

But the modern fear of discrimination is such that it is

52 Mich. 449, 18 N. W. 236, 50 Am. Rep. 266 (1884).

1 Gould v. Edison Electric Co., 29 N. Y. Misc. 241, 60 N. Y. Supp. 559 (1899).

2 Gardner v. Providence Telephone Co., 23 R. I. 312, 50 Atl. 1014, 55 L. R. A. 113 (1901).

3 Bartlett Western Union Telegraph Co., 62 Me. 209, 16 Am. Rep. 471 (1873).

• Wilkes-Barre v. Spring Brook Water Co., 4 Lack. Leg. News (Pa.), 367 (1899).

5 See Moore v. Champlain Electric Co., 88 N. Y. App. Div. 289, 85 N. Y. Supp. 37 (1903).

not open to a company to make concessions to one customer who is asking a cheaper service without at the same time giving other customers the right to get the lower rate by conforming with the conditions under which it is offered. Thus in one recent successful prosecution by the government for giving or taking a rebate the gravamen of the charge was not that the allowance of $1.00 per car for the terminal facilities furnished by the guilty shipper was improper in itself, but that the railroad had not properly announced such allowances in its published schedules.1 And if it be granted that a lower rate may be made for fuel gas than for illuminating gas, any householder who wants only fuel gas can insist that he gets the same rate as those who also use gas for illumination.2

Topic B. Service in More Convenient Units

§ 1348. Shipment in carloads.

The most obvious application of the principles under discussion is the relatively lower rate almost universally quoted for car load lots as compared with less than car load. Substantial reasons exist for making the rate lower per barrel in car load lots than in less than car load quantities. The cost of service is very considerably less in the case of shipments in car load lots than in less than car load quantities. The shipment by the car load 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 dif

3

1 United States v. Chicago & A. Ry. Co., 148 Fed. 646 (1906).

2 State v. New Orleans Gas Co., 108 La. 67, 32 So. 179 (1902).

3 However, this concession to shippers of goods in car load lots

need not be made by a railroad company; apparently if it chooses not to schedule a reduced car load rate shippers cannot complain. Railroad Commrs. v. Weld, 96 Tex. 394, 73 S. W. 529 (1902).

ferent 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 car load quantities. There is but one collection of charges for freight. Where the shipment is made in less than car load 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 way bill. 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 car load shipment-according to distance. It occupies a whole car, and for the vacant space in that car the company is receiving no compensation. Altogether the economies of handling freight in car load lots are apparent. A rate per 100 pounds in less than car load lots may well be 100 per cent greater than the rate upon car load lots and is not unreasonable.1

§ 1349. Shipments made 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. 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

1

1 If, however, car load rates are granted all shippers may insist upon having them upon the same

terms. New York, T. & M. R. R. Co. v. Gallaher, 79 Tex. 685, 15 S. W. 694 (1891).

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 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 risk. Such differences in the cost of the service should, it would seem, justify a carrier in making reasonable differences in its rates.

§ 1350. Comparison of bulk and package rates.

So different are the conditions under which freight is carried in packages and in bulk that it is not proper to institute comparisons as to particular factors connected with each. As the United States Supreme Court said in a recent case: "Because circumstances existed which prevented the economical use of the tank car by plaintiffs (no demand being made for the use of a tank car) is no ground for finding discrimination in the charge for the weight of the barrel package (such charge being in itself

1 Pennsylvania Refining Co. v. Western N. Y. & P. R. R. Co., 208

U. S. 208, 52 L. ed. 456, 28 Sup. Ct. 268 (1908).