sociated Wholesale Grocers v. Missouri Pac. Ry., 1 Int. Com. Rep. 393, 1 I. C. C. Rep. 156 (1887); though the carrier's future business would be thereby stimulated. Nor can a lower rate for the carriage of goods be offered to manufacturers. Re Louisville & N. R. R., 4 Int. Com. Rep. 157, 5 I. C. C. 466 (1892); or to emigrants: Duncan v. Atchison, T. & S. F. R. R., 4 Int. Com. Rep. 385, 6 I. C. C. 85 (1894). Nor will a discrimination against a shipper of coal be justified because he was a druggist, and not in the coal business. Thompson v. Pennsylvania R. R., 10 I. C. C. Rep. 640 (1905).

952. Difference in amount of shipment.

SO

No dissimilarity of conditions which can justify a difference in rate is created by the total amount of shipments during a certain time, as much in a year. Providence Coal Co. v. Providence & W. R. R., 1 Int. Com. Rep. 363, 1 I. C. C. 107 (1887); United States v. Tozer, 39 Fed. 369, 2 Int. Com. Rep. 597 (1889); Kinsley v. Buffalo, N. Y. & P. Ry., 3 Int. Com. Rep. 318 (1890).

A shipment of a large amount at one time may, however, justify a lower rate if it results in economy of operation, as for instance a carload shipment, provided the difference is reasonable in view of the saving effected. Thurber v. New York C. & H. R. R. R., 2 Int. Com. Rep. 742, 3 I. C. C. 473 (1890); Buckeye Buggy Co. v. Cleveland, C., C. & S. L. R. R., 9 I. C. C. Rep. 620 (1903). So a rule making a minimum charge of one hundred pounds on shipments of less weight is justifiable. Wrigley v. Cleveland, C., C. & St. L. R. R., 10 I. C. C. Rep. 412 (1905). If the amount of the shipment will not lead to a saving in expense to the carrier, no difference can be made on account of it. So where the shipment is in cargo or trainload quantities it cannot get less than carload rates. Paine v. Lehigh Valley R. R., 7 I. C. C. Rep. 218 (1897).

§ 953. Discrimination in use of cars.

If there is a shortage of cars due to unusual press of business, the carrier must supply his cars rateably as far as they go; and if he makes a reasonable distribution no one can complain of discrimination. United States v. West Virginia N. R. R., 125 Fed. 252 (1903); S. S. Daish & Sons v. Cleveland, A. & C. Ry., 9 I. C. C. Rep. 513 (1903); Riddle v. Baltimore & O. R. R., 1 Int. Com. Rep. 778, 1 I. C. C. 372 (1888). Regular customers are not entitled to preference over occasional ones under such circumstances. Riddle v. New York, L. E. & W. Ry., 1 Int. Com. Rep. 787, 1 I. C. C. 594 (1887). At such times a carrier may refuse to allow cars to be sent off its line to distant points. Riddle v. Pittsburgh & L. E. R. R., 1 Int. Com. Rep. 688, 1 I. C. C. 374 (1887). And a temporary rule of the carrier limiting its coal cars to mines having track connection with its

road, thereby confining its comparatively few available cars to mines generally in operation, where quick loading could be accomplished, and declining to permit its sidings or switches to be further congested by loading coal from wagons, was calculated to hasten, rather than retard, the movement of coal for public use, and was not unreasonable or unjust. Thompson v. Pennsylvania R. R., 10 I. C. C. Rep. 640 (1905).

Carriers may, if they choose, hire cars from other persons, even from shippers. Scofield v. Lake Shore & M. S. R. R., 2 Int. Com. Rep. 67, 2 I. C. C. 90 (1888). But in that case the rate charged for carriage to other shippers must be the same, excepting the reasonable rent of the car. Ibid. If the carrier fails to furnish proper cars for transportation, as for instance tank cars for transporting oil, it will be unlawful discrimnation to charge shippers who cannot get tank cars more than it charges shippers who own and furnish tank cars. Rice v. Louisville & N. R. R., 1 Int. Com. Rep. 722 (1888); Rice v. Western N. Y. & P. R. R., 3 Int. Com. Rep. 162, 4 I. C. C. 131 (1890); Independent Refiners' Assoc. v. Pennsylvania R. R., 6 I. C. C. Rep. 52 (1894); Independent Refiners' Assoc. v. Western N. Y. & P. R. R., 6 I. C. C. Rep. 378 (1895).

Where certain cars are so arranged that they can be used on the return trip for coal, while other cars cannot be so used, a lower rate is justifiable upon goods carried in cars of the former sort, provided they are at the service of shippers. United States v. Delaware, L. & W. R. R., 40 Fed. 101 (1889). So the expense of hauling the Burton cars in one direction unloaded, since by their construction they are not suited to carry general freight, and the fact that a large percentage of ordinary cattle cars are back loaded upon long hauls of western roads, are considerations which justify difference in charge against shippers who prefer to hire improved stock cars. Burton Stock Car Co. v. Chicago, Burlington & Quincy R. R., 1 Int. Com. Rep. 329, 1 I. C. C. 132 (1887).

§ 954. Discrimination between commodities.

In determining whether there is a discrimination between different but similar articles, all the factors which go to affect a reasonable rate are to be considered, such as character and quality of the commodity, cost of production, extent and nature of the competition in the business itself and by other transportation lines, and the interests of the public in the use of the commodity, and its market cost. Imperial Coal Co. v. Pittsburgh & L. E. R. R., 2 Int. Com. Rep. 436, 2 I. C. C. 618 (1889); F. Schumacher Milling Co. v. Chicago, R. I. & P. R. R., 4 Int. Com. Rep. 373, 6 I. C. C. Rep. 61 (1894). The commodities must be similar in order to claim equality of treatment. Live stock and their products are entitled to such treatment. Chicago L. S. Exch. v. Chicago G. W. Ry., 10 I. C. C. Rep. 428 (1905). But not fresh meat and fresh fruit. Miner v. New York, N. H. & H. R. R., 11 I. C. C. Rep. 422 (1905).

A lower export rate may sometimes be justifed, but the difference must be a reasonable one: and it would not be proper to make a permanent difference. Re Export and Domestic Rates on Grain. 8 L. C. C. Rep. 214 (1898).

TOPIC D SPECIAL RATE OR REBATE.

955. What amounts to a rebate.

Any device by which the charge to a shipper is made less than the schedule rate is a rebate, and is forbidden by the act. So the giving of a free pass is forbilden as a rebate. In re Charge to Grand Jury, 66 Fed. 146 (1895); United States v. Cleveland, C. & S. Ry., 3 Int. Com. Rep. 290 (1890); Smith v. Northern Pac. R. R., 1 Int. Com. Rep. 611 (1887); Tuttle v. Northern Pac. R. R., 1 Int. Com. Rep. 558 (1887): Re Boston & M. R. R., 3 Int. Com. Rep. 717 (1891); Harvey v. Louisville & N. R. R., 3 Int. Com. Rep. 793 1891). So is a discount allowed to shippers of a certain amount of goods within a year. Providence Coal Co. v. Providence & W. R. R., 1 Int. Com. Rep. 363 (1887). So free cartage for the collection and delivery of freight, not mentioned in the published schedule, is an illegal rebate. Wight v. United States, 167 U. S. 512, 42 L. Ed. 258, 17 Sup. Ct. 822 (1897); Stone v. Detroit, G. H. & M. Ry., 3 Int. Com. Rep. 60, 3 I. C. C. 613 (1590). This point was not covered by the subsequent litigation in the courts growing out of this decision. Interstate Commerce Commission v. Detroit, G. H. & M. Ry., 167 U. S. 633, 644, 42 L. Ed., 17 Sup. Ct. 986 (1897); Hezel Milling Co. v. St. Louis, A. & T. H. Ry., 3 Int. Com. Rep. 701, 5 I. C. C. 57 (1891). So the praetice of allowing a tank shipper of oil an arbitrary deduction of 42 gallons per tank car is wholly indefensible when no corresponding allowance is made for leakage and evaporation from shipments in barrels. Rice v. Western N. Y. & P. R. R., 3 Int. Com. Rep. 162, 4 I. C. C. 131 (1890); Rice v. Cincinnati, W. & B. R. R., 3 Int. Com. Rep. 841, 5 I. C. C. 193 (1891). So the employment of brokers or scalpers as a device to give low rates is illegal, and a sale by such brokers at less than tariff rates is forbidden. Re Passenger Tariffs, 2 Int. Com. Rep. 445, 2 I. C. C. 649 (1889); Re Underbilling, 1 Int. Com. Rep. 813, 1 I. C. C. 633 (1888). And a device by which a rebate is given to a dummy corporation owned by the shipper, will not defeat the act. United States v. Milwaukee R. T. Co., 142 Fed. 247 (1905).

§ 956. Allowance for cars or facilities furnished by the shipper.

When the shipper furnishes cars or other facilities the carrier may lawfully make an allowance on that account, provided the allowance is

reasonable in amount; an unreasonable allowance under color of compensation for facilities so furnished would constitute an illegal rebate. So a reasonable allowance to an elevator company for elevator service is not an illegal rebate, though the elevator company as a shipper of grain is thereby incidentally aided in its business. Matter of Allowance to Elevators, 10 I. C. C. Rep. 309 (1904). So the allowance of mileage for tank cars furnished by shippers, and low return rates on oil returned in the cars, is not illegal unless the mileage is excessive. Rice v. Cincinnati, W. & B. R. R., 3 Int. Com. Rep. 841, 5 I. C. C. 193 (1891). allowance is unreasonable it constitutes an illegal rebate. Delaware, L. & W. Ry., 3 Int. Com. Rep. 502, 4 I. C. C. 630 (1890).

§ 957. Division of rate with industrial railway.

But when the
Shamberg v.

A favorite method of securing a rebate by a device has been the formation by a large shipper of an industrial railway from his premises to the railway which treats with the trunk line as a connecting carrier, and thus obtains a division of the rate. This practice appears to be allowable on two conditions: first, that the industrial railway is a bona fide common carrier (ante, §§ 108-114); second, that the allowance is reasonable. While there may be great objections to allowing shippers to build and operate railroads over which their traffic moves, such action is not prohibited by the act to regulate commerce. And the mere fact that the property of a common carrier is owned by the largest individual shipper over it, or that it was originally constructed for the purpose of doing the work of that shipper, furnishes no reason why it cannot make joint rates and agree upon joint divisions with other railroads. The industrial railway must, however, be a bona fide common carrier. Re Transportation of Salt from Hutchinson, 10 I. C. C. Rep. 1 (1904); Re Transportation of Salt, 10 I. C. C. Rep. 148 (1904); Re Division of Joint Rates, 10 I. C. C. Rep. 385 (1904); Central Yellow Pine Assoc. v. Illinois Cent. R. R., 10 I. C. C. Rep. 505 (1905); Re Division of Joint Rates, 10 I. C. C. Rep. 661 (1905). And where excessive divisions of rates are granted by the carrier to another carrier owned and controlled by a shipper, for the purpose of obtaining the traffic of that shipper, they benefit the shipper, and operate as a rebate or other device to cut the tariff charge, in violation of the act. Re Division of Joint Rates, 10 I. C. C. Rep. 385 (1904); Re Division of Joint Rates, 10 I. C. C. Rep. 661 (1905). See United States v. Atchison, T. & S. F. Ry., 142 Fed. 176 (1905).

§ 958. Sale and delivery of commodities by a railroad.

Where a railroad buys or produces commmodities and then sells them and delivers them to the buyer at a price which really nets the road for its transportation charges less than the schedule rates, the transaction in

volves an illegal rebate. Re Transportation of Coal, 10 I. C. C. Rep. 473 (1905). As Mr. Justice White forcibly said in New York, N. H. & H. R. R. v. Interstate Commerce Commission, 200 U. S. 361, 51 L. Ed. 26 Sup. Ct. 272 (1906): "The purpose of the statute was to make the prohibition applicable to every method of dealing by a carrier by which the forbidden result could be brought about. If the public purpose which the statute was intended to accomplish be borne in mind, its meaning becomes, if possible, clearer. What was that purpose? It was to compel the carrier, as a public agent, to give equal treatment to all. Now if, by the mere fact of purchasing and selling merchandise to be transported, a carrier is endowed with the power of disregarding the published rate, it becomes apparent that the carrier possesses the right to treat the owners of like commodities by entirely different rules. . . . It is said that when a carrier sells an article which it has purchased and transports that article for delivery, it is both a dealer and a carrier. When, therefore, the price received for the commodity is adequate to pay the published freight rate and something over, the command of the statute as to adherence to the published rates is complied with, because the price will be imputed to the freight rate, and the loss, if any, attributed to the company in its capacity as dealer, and not as a carrier. This simply asserts the proposition which we have disposed of, that a carrier posseses the power, by the form in which he deals, to render the prohibitions of the act ineffective, since it implies the right of a carrier to shut off inquiry as to the real result of a particular transaction on the published rates, and thereby to obtain the power of disregarding the prohibitions of the statute."

Consequently it has been held that a railroad company violates the act by buying, transporting and selling grain. Re Alleged Unlawful Rates, 7 I. C. C. Rep. 33 (1897); or coal. New York, N. H. & H. R. R. v. Interstate Commerce Commission, 200 U. S. 361, 51 L. Ed.

26 Sup. Ct. 272 Haddock v. Dela

(1906). It was held by the Commission, to be sure, in ware, L. & W. Ry., 3 Int. Com. Rep. 302, 4 I. C. C. 296 (1890), and Cox v. Lehigh Valley R. R., 3 Int. Com. Rep. 460, 4 I. C. C. 535 (1891), that the two railroads in question might legally mine and sell coal, because they had possessed for a long time before the passage of the act the legal power to do so; and the Commission could only enforce the requirement that their rates for carriage should be reasonable. This decision however must be confined to the precise case, and under the act no railroad can sell and deliver a commodity unless it is, entirely clear that it is receiving, in addition to the entire value of the commodity, its full published rates for carriage.