criminating against them in favor of the Standard Company. The prayer of the bill was granted in an elaborate opinion, the tenor of which may be judged from the following paragraph: "The principle is opposed to a sound public policy. It would build and foster monopolies, add largely to the accumulated power of capital and money, and drive out all enterprise not backed by overshadowing wealth. With the doctrine as contended for by the defendant, recognized and enforced by the courts, what will prevent the great grain interests of the northwest, or the coal and iron interests of Pennsylvania, or any of the great commercial interests of the country, bound together by the power and influence of aggregate wealth, and in league with the railroads of the land, driving to the wall all private enterprises struggling for existence, and with an iron hand thrusting back all but themselves?" 1

1327. Those who use rival line charged more than usual.

2

It would seem to be plainly contrary to public duty for a public service company to charge customers who at times employ a rival concern more than the usual rates which others are charged. Yet this sort of discrimination. has been defended before the courts more than once even in its most extreme forms. The leading case on this point is undoubtedly Menacho v. Ward. The complainants in that case were notified by the defendant steamship owners that they would be "placed upon the black-list" if they shipped goods by the steamers which had gone on the route in opposition to them and that their rates of freight would thereafter be advanced on all goods which they might have occasion to send by the defendants. 227 Fed. 529 (1886).

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

Since that time the defendants have habitually charged the complainants greater rates of freight than those merchants who shipped exclusively by the defendants. In disposing of this case Mr. Justice Wallace pointed out that there were various situations justifying different rates between shippers asking for the same transportation, and in enumerating them he was undoubtedly unduly liberal; but this particular case before him he rightly decided to go beyond all justification as the conclusion of his opinion which follows will show: "The vice of the discrimination here is that it is calculated to coerce all those who have occasion to employ common carriers between New York and Cuba from employing such agencies as may offer. Its tendency is to deprive the public of their legitimate opportunities to obtain carriage on the best terms they can. If it is tolerated it will result practically in giving the defendants a monopoly of the carrying trade between these places. Manifestly it is enforced by the defendants in order to discourage all others from attempting to serve the public as carriers between these places. Such discrimination is not only unreasonable, but is odious." 1

§ 1328. Lower rates to exclusive customers sometimes permitted.

On the other hand it is maintained by some few courts that while higher than usual rates cannot be charged those who will not ship exclusively, yet lower rates may be given to exclusive shippers. That this is the view of the highest court in New York may be seen by an examination of the leading case of Lough v. Outerbridge.2 In that case a

A fortiori it is illegal to refuse altogether to accept goods from a shipper who persists in using a rival line. Chicago & A. R. R. Co. v.

Suffern, 129 Ill. 274, 21 N. E. 824 (1889).

2 143 N. Y. 271, 38 N. E. 292, 42 Am. St. Rep. 712, 25 L. R. A. 416 (1894).

lower rate was given those who would agree to ship their freight exclusively by the established line when the rival boat ran. The Court of Appeals of New York, one justice dissenting, held for the defendant company. In writing the opinion of the court Mr. Justice O'Brien said: "The authorities cited seem to me to remove all doubt as to the right of a carrier, by special agreement, to give reduced rates to customers who stipulate to give them all their business, and to refuse these rates to others who are not able or willing to so stipulate, providing, always, that the charge exacted from such parties for the service is not excessive or unreasonable. The principle of equality to all, so earnestly contended for by the learned counsel for the plaintiffs, was not, therefore, violated by the defendants, since they were willing and offered to carry the plaintiffs' goods at the reduced rate, upon the same terms and conditions that these rates were granted to others; and, if the plaintiffs were unable to get the benefit of such rate, it was because, for some reason, they were unable or unwilling to comply with the conditions upon which it was given to their neighbors, and not because the carrier disregarded his duties or obligations to the public. The case of Menacho v. Ward does not apply, because the facts were radically different. That action was to restrain the carrier from exacting unreasonable charges habitually for services, the charges having been advanced as to the parties complaining, for the reason that they had at times employed another line. It decides nothing contrary to the general views here stated." 1

1 The cases principally relied

upon by the court in reaching this opinion were: Fitchburg R. R. Co. v. Gage, 12 Gray, 393 (1859); Sargent v. R. R. Co., 115 Mass. 416 (1874); Mogul Steamship Co. v. McGregor, 21 Q. B. Div. 544, af

firmed, 23 Q. B. Div. 598, and by H. L. 17 App. Cas. 25 (1892); Evershed v. Railway Co., 3 Q. B. Div. 135.

It seems that the important case of Mogul Steamship Co. v. McGregor, supra, cannot be cited, for

§ 1329. Comparison of these decisions.

Notwithstanding the weight to be given to this decision it is submitted that it is opposed to what are conceived to be fundamental principles. As between two shippers who offer the same goods for the same transportation it seems to be personal discrimination with all its accompanying evils to make one rate to one and another rate to another by reason of the fact that one ships exclusively and the other does not. And it ought to be plain that whether this is done as in Menacho v. Ward,' by charging the one who does not ship exclusively more than the usual rate or as in this case of Lough v. Outerbridge,2 by giving exclusive shippers concessions from regular rates, the fact remains that in either case there is a personal discrimination against the shipper who will not enter into an exclusive arrangement.

§ 1330. Customers contracting for large amounts.

3

It would seem to follow, although this has appeared to some courts more doubtful that shippers who agree to furnish large quantities of freight should have no better standing. It is true that the advantage to the railroad company may be proved, but the injustice to the small shipper who can make no such undertaking remains the controlling factor in the situation. This was well shown in an Indiana case, where the court said: "It is contended by the appellant that, in view of the fact it secured by its contract with Dickason a certain income of $7,000

4

per month, it could as well afford to carry ties for him at $14 per car as to carry them for the appellees at $24 per car. We find it unnecessary to inquire whether the appellant is correct or otherwise in this contention, for, as we understand the law, a railroad company engaged in the business of a common carrier is not permitted by the law to discriminate in favor of a shipper who is able to furnish a large amount of freight over one engaged in the same business who is unable to furnish the same quantity as that shipped by his more opulent rival. The reasons for prohibiting such discrimination are well stated in the case of Hays v. Pennsylvania Co. In our opinion, the fact that Dickason was able to furnish a larger number of car loads of ties for shipment than the appellees could constituted no sufficient reason for a discrimination in his favor over the rates charged to the appellees."

§ 1331. Customers under exclusive contract to give business.

The mere fact, therefore, that a shipper agrees to give all his business to the carrier does not justify a concession from regular rates. Such inducements seem once to have been held out to shippers commonly in England; but the decisions of the courts have been against them.' They have uniformly held it unlawful preference to give reduced rates in consideration of an agreement to employ other lines of the company for the carriage of other traffic or to employ the company in other distinct business. This is obviously good law, as the carriage of goods to other points does not affect the cost of carriage between the particular points. Upon the same principles the rail

1 Baxendale v. Great Western R. Co., 5 C. B. (N. S.) 309 (1858); Diphwys Casson Slate Co. v. Festining R. Co., 2 Nev. & Mac. 73 (1860);

Bellsdyke Coal Co. v. N. B. R. Co.,

2 Nev. & Mac. 105 (1860).

2 Baxendale v. Great Western R. Co., 5 C. B. (N. S.) 309 (1858);