lar purposes to control in like manner the products of other coalfields. To sustain the contract even in part would practically validate it for all purposes, and lend the aid of the court to the furtherance of such an objectionable scheme."

4

§ 751. Reasonable differences permitted by some courts. In a very few jurisdictions it has been held that there is no legal objection to making a retasonable 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, 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 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

4 59 N. H. 122 (1879).

rate 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.” 5

§ 752. Prevalent doctrine that no reduction should be al

lowed.

6

It may be asserted with confidence, however, that it is opposed to fundamental principles to permit the giving of special concessions to the large shipper as such. In the leading case of Hays v. Pennsylvania Company, this doctrine is well worked out. The plaintiffs in that case were, for several years next before the commencement of this suit, engaged in mining coal at Salineville and near defendant's road, for sale in the Cleveland market. They were wholly dependent on the defendant for transportation. Their complaint was that the defendant discriminated against them and in favor of their competitors in business, in the rates charged for carrying coal from Salineville to Cleveland. It appeared in evidence that defendant's regular price for carrying coal between the points mentioned, in 1876, was $1.60 per ton, with a rebate of from 30 to 70 cents per ton to all persons

5 To the same effect is Silkman v. Water Commissioners, 152 N. Y. 327, 48 N. E. 612,37 L. R. A. 827, B. & W. 363 (1897), where 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 as much per hundred cubic feet as those who consumed a less amount. Under this statute the question of consumption was one of the elements to be considered in determining the rates. Surely, it cannot be said to be unreasonable to provide less rates where a large amount of water is used than where a small quantity is consumed. That principle is usually present in all contracts or established rents of that character. 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. We find in the rates as they were established nothing unreasonable, or that would in any way justify a court interfering with them."

612 Fed. 309, B. & W. 368 (1882).

or companies shipping 5,000 tons or more during the year,-the amount of rebate being graduated by the quantity of freight furnished by each shipper. Under this schedule the plaintiffs were required to pay higher rates on the coal shipped by them than was exacted from other and rival parties who shipped larger quantities. But the defendant contended, if the discrimination was made in good faith, and for the purpose of stimulating production and increasing its tonnage, it was both reasonable and just, and within the discretion confided by law to every common carrier. The court, however, entertained the contrary opinion.

In an excellent opinion by Baxter, the United States Circuit Judge, the various grounds upon which differences in rates have been justified by reason of differences in the cost of service by reason of economies of handling the business were reviewed, but he held very properly that none of these applied to the exclusive shipper as such, his conclusion being well worth quoting at length. "In all particulars the plaintiffs occupied common ground with the parties who obtained lower rates. Each tendered coal for transportation in the same condition and at such times as suited his or their convenience. The discrimination complained rested exclusively on the amount of freight supplied by the respective shippers during the year. Ought a discrimination resting exclusively on such a basis be sustained? If so, then the business of the country is, in some degree, subject to the will of railroad officials; for, if one man engaged in mining coal, and dependent on the same railroad for transportation to the same market, can obtain transportation thereof at from 25 to 50 cents per ton less than another competing with him in business, solely on the ground that he is able to furnish and does furnish the larger quantity for shipment, the small operator will sooner or later be forced to abandon the unequal contest and surrender

7 Discussing particularly Nicholson v. Gt. Western Ry., 5 C. B. N. S. 366 (1858).

to his more opulent rival. If the principle is sound in its application to rival parties engaged in mining coal, it is equally applicable to merchants, manufacturers, millers, dealers in lumber and grain, and to everybody else interested in any business requiring any considerable amount of transportation by rail; and it follows that the success of all such enterprises would depend as much on the favor of railroad officials as upon the energies and capacities of the parties prosecuting the same."

8 753. Reductions to large shippers unjust to small shippers.

Naturally the practice of some railroads under some circumstances of making lower rates to large customers was one of the first complaints brought to the Interstate Commerce Commission. One of those cases was Providence Coal Company v. Providence & Worcester Railroad Company, in which case it appeared that the tariff of the railroad on coal contained a provision for a discount of 10 per cent. to any person, firm or company, who shall receive consignments of coal, in any one year, amounting to 30,000 tons or upwards, at any one station on the line of this road. In argument for the railroad an effort was made to uphold the discrimination on a consideration of quantity merely; the consignee who should receive more than 30,000 tons in a year at any one station, being likened to a purchaser of goods at wholesale, and the consignee who received a lesser amount being compared to a purchaser at retail. It was said that a distinction in price is universally made as between these two classes of customers, and that distinction would be as reasonable in the case of purchasers of railroad service as in that of purchasers of cloths or lumber.

But the Commission was very plainly of a contrary opinion, Mr. Commissioner Cooley saying: "When a question of rebates or discounts is under consideration, it might be misleading to

81 Int. Com. Rep. 363, 1 I. C. C. Rep. 107 (1887).

consider them in the light of the principles which merchants act upon in the case of wholesale and retail transactions. There is very manifest difficulty in applying those principles to the conveniences which common carriers furnish to the public, a difficulty which springs from the nature of the duty which such carriers owe to the public. That duty is one of entire partiality of service. The merchant is under no corresponding duty, and may make his rules to suit his own interest, and discriminate as he pleases. There is no occasion to enlarge upon this now.

"A discrimination, such as the offer and its acceptance by one or more dealers would create, must have a necessary tendency to destroy the business of small dealers. Under the evidence in the case it appears almost certain that this destruction must result, the margin for profit on wholesale dealings in coal being very small. The discrimination is therefore necessarily unjust within the meaning of the law. It cannot be supported by the circumstance that the offer is open to all; for although made to all, it is not possible that all should accept. Moreover, in testing such a discrimination we must consider the principle by which it must be supported; and the principle which would support a 30,000 ton limitation would support one of 50,000 or 100,000 equally well; the quantity named would be arbitrary in any case. It might easily be so high as practicably to be open to the largest dealer only. A railroad company, if allowed to do so, might in this way hand over the whole trade on its road in some necessary article of commerce to a single dealer; for it might at will will make the discount equal to or greater than the ordinary profit in the trade; and competition by those who could not get the discount would obviously be then out of the question. So extreme a case would not, however, be needful to show the inadmissibility of such a discount as is here offered; the injustice would be equally manifest if several dealers instead of one were able to accept the offer. A railroad company has no right, by any discrimination not grounded in reason, to put any single dealer,