not an unreasonable one), while none is made for the tank containing the oil." If, however, the railroad fails to provide tank cars for the use of its shippers it would be unfair discrimination to charge shippers of oil in packages for the additional weight. As the Supreme Court of Ohio 1 said in the leading case on this point: “It must either provide tank cars for all of its customers alike, or give such rates of freight in barrel packages by the car load, as will place its customers using that method on an equal footing with its customers adopting the other method.

§ 1351. Shipments in train loads.

It is urged with considerable force that a railroad is justified under the rules that are now under discussion in giving a lower rate for a train load consigned from one shipping point to one point of delivery, since it cannot be denied that there is at least a slight difference in the cost of handling the traffic in train loads. But such concessions are dangerous, as it would tend to concentrate the business of the country into very few hands if a lower rate could be given to the great operator who could ship in train lots. At all events the Interstate Commerce Commission is set against such special rates for train loads. In Paine Bros. & Co. v. Lehigh Valley Railroad,2 it expressed itself thus: "We perceive no sufficient reason for different rates on carload than on cargo or train load shipments, whether the grain is carried for export or for domestic use. The principle involved in such a distinction violates the rule of equality and tends to defeat its just and wholesome purpose. That purpose is not fully accomplished if one scale of charges is applied to cargo

1 State v. Cincinnati, N. O. & T. P. R. R. Co., 47 Oh. St. 130, 23 N. E. 928 (1890).

27 Int. Comm. Rep. 218 (1897).

shipments and a higher rate is imposed for single carloads, even though all cargo shippers pay the same and all carload shippers are charged alike." But as there is a real though a slight difference in the cost of service there is no reason why a fair concession from the car load rate should not be made if the regulating authority were not so overborne by the fear of discrimination as to ignore it.1

§ 1352. Regular shipments in large units.

2

In some English cases concessions are permitted to shippers who agree to make regular shipments in large units. The leading case for this is Nicholson v. Great Western Railway Company. There the court said that in considering the question of undue preference the fair interest of the railroad company ought to be taken into account; that the preference or prejudice, referred to by the statute, must be undue or unreasonable to be within the prohibition. Because it appeared that the cost of carrying coal in fully loaded trains, regularly furnished at the rate of seven trains per week, was less per ton to the railway company than coal delivered in the usual way, and at irregular intervals, and in unequal quantities, in connection with the coal company's undertaking to ship annually coal enough over defendant's road, for at least a distance of 100 miles, to produce a gross revenue to the railroad of £40,000, the court held that the discrimination complained of in the case was neither undue nor unreasonable, and therefore denied the application.3

§ 1353. Units in passenger service.

It has already been indicated that the unit principle is applicable to passenger service. Thus a lower rate for a limited ticket than for an unlimited ticket may be justi

1 But see Nicholson v. Great Western R. R. Co., 5 C. B. (N. S.) 366 (1858).

25 C. B. (N. S.) 366 (1858).

3 But a difference in rates between an agreement to ship for

fied, since there will be more bother if the transportation is broken into several separate services by stop-overs instead of being taken as a whole.1 A lower rate may be made to those who buy their tickets in lots instead of for the single trip, such as strip tickets and mileage tickets. And it has been held that a railroad may make a lower rate than twenty fares to twenty people traveling together under one transportation contract.2 But another case probably states a general principle in its pertinent dictum that a railroad is not obliged to sell commutation tickets if it chooses not to; but if it does, any traveler may demand it. Here again the necessity for establishing separate units is not sufficiently plain to imperatively demand recognition; if not, indeed, distinctly considerable, a company is not irrational which ignores it. Moreover, it seems to be well established that if the regulating authority attempts to order the issuance of mileages, for example, its interference will be held to be outrageously vexatious.4

§ 1354. Operating units in supplying service.

Chief attention has been given thus far in this topic to common carriage, because it is in this field that the law justifying various rates for various units has been worked out. It will have been noticed that even here the permission to make such different rates is grudgingly given by modern courts. Only if the operating cost in performing the service is plainly different can a different rate be made

thirty years and another for fourteen years was held an undue preference. Holland v. Festiniog Ry. Co., 2 Nev. & Mac. 278 (1876).

1 Edson v. So. Pacific Ry. Co., 144 Cal. 182, 77 Pac. 894 (1904).

2 Interstate Commerce Commission v. Baltimore & O. R. R. Co.,

145 U. S. 263, 36 L. ed. 699, 12 Sup. Ct. 844 (1892).

3 State ex rel. v. Delaware, L. & W. Ry. Co., 48 N. J. L. 55, 2 Atl. 803 (1887).

4 Lake Shore & M. S. Ry. Co. v. Smith, 173 U. S. 684, 43 L. ed. 858, 19 Sup. Ct. 565 (1898).

nowadays. A shipper of a carload to be sure gets a lower rate than the shipper of a package; but one who ships two car loads simultaneously to the same consignee gets no lower rate. If this attitude is maintained in other branches of public service, it is difficult to see how a progressive scale of lower rates for large consumers of water for example can be justified. A minimum rate, as has been seen, doubtless may be justified, unless some explicit legislation stands in the way—because of the excessively large cost of such service in its earliest stages.1 But the difference in cost of supplying a larger amount as compared with a smaller amount at any later stage, although it is not impossible to estimate it, perhaps, is certainly not so great as to imperatively demand recognition to prevent injustice to the larger taker. The authorities on this matter as has been seen already are somewhat conflicting, but they may be reconciled if one wishes to

1 Alabama.-In Montgomery Light & P. Co. v. Watts (Ala.), 51 So. 726 (1909), it was held that where the franchise limitation upon the gas company was clear it could not make a minimum rate.

California.-In Sheward v. Citizens' Water Co., 90 Cal. 635, 27 Pac. 4, 439 (1891), the court went so far as to justify a fixed charge on water bills for measured service as meter rent.

Kentucky. In Louisville Gas Co. v. Dulaney, 100 Ky. 405, 38 S. W. 703, 36 L. R. A. 125 (1897), the court while admitting the proprierty of minimum charges for gas supplied held the company in question was precluded by its charter from imposing them.

Missouri.-In State ex rel. v. Sedalia Gaslight Co., 34 Mo. App. 501 (1889), the court held that a

minimum charge for gas supplied was entirely justified on every ground.

2 Michigan.-In Boerth v. Detroit City Gas Co., 152 Mich. 654, 116 N. W. 628, 18 L. R. A. (N. S.) 1197 (1908), it was held that a gas company might grant a lower rate to persons consuming large quantities for different purposes.

Missouri.-In St. Louis Brewing Assn. v. St. Louis, 140 Mo. 419, 37 S. W. 525, 41 S. W. 911 (1897), it was held a water company could not only make a lower rate to manufacturers than to other consumers but also lower rates to large manufacturers than to small; but it was intimated that there was no obligation to make such concessions.

New York.-In Silkman v. Yonkers Water Commissioners, 152 N. Y. 327, 46 N. E. 612, (1897), the

do so by recognizing that this problem is so close that the adoption of a graded schedule by a supply company is not irrational, but then again neither is the fixing of a flat rate.

§ 1355. Such reductions apparently discriminatory.

Naturally the advantage to the company if it may induce larger purchases is obvious; and indeed the theoretical advantage to all concerned by a general decrease in cost resulting therefrom may be admitted. But whether the decisions permitting lower rates for large consumption shall stand depends upon whether the general law against all discrimination engulfs everything. It is not enough to say that the same law against discrimination is not required in the supply services as in the transportation services; because the evil of favoring one competitor against another is not present. In the first place that factor is by no means absent; rival laundries, one larger, the other smaller, need water supply, for example. In the second place the law against discrimination is by no means confined to discrimination between competitors, giving a pass to a friend traveling for pleasure is forbidden as much as giving a lower rate to one iron founder which is refused to another.

Topic C. Facilities Furnished by Customers

§ 1356. Terminal facilities furnished by shippers.

By an important application of these general principles it is held permissible for a railroad to make a lower rate

court permitted the granting of lower rates per hundred cubic feet of water to those who take larger amounts; the court saying of this sort of schedule: "It will be found in contracts and charges relating to electric lights, gas, private water companies and the like, and is a

business principle of general application.

Pennsylvania.-In Penn. Iron Co. v. Lancaster, 17 Lanc. L. Rev. 161 (1900), the court emphasized the point that water company need not make such gradations unless it chose.