1 ways have been forbidden to charge a higher wharfage rate on goods to be conveyed by another railway 1or to grant a reduced rate in consideration of a contract to carry all of certain goods and to prevent their being carried by water or other means. It seems plain that in all of these cases no other decisions would have been justifiable than those which were given, because the policies pursued by the railways in all of these cases seem opposed to the public duty which the common carrier owes the shipping public. 2 Topic D. Concessions for Special Kinds of Business § 1332. Different rates for service differently employed. Notwithstanding the obvious analogy to the policies already generally condemned, it is still strongly urged at the present time by the managers of the public service companies that they should be allowed to make different rates for service which is to be differently employed. Railroad managers, for example, here point out again that in order to get more traffic, which by reason of the law of increasing returns is for the benefit of all concerned, it will often be necessary for them to make lower rates for goods which are going to be used for one purpose than for goods which are going to be used for another purpose. Moreover, the railroad managers take a higher plane of argument when they urge that to make different rates for different users they may further the development of the industries of the communities which they serve. But neither of these arguments can be pushed too far in a legal discussion because in so far as any railroad policy involves discrimination it is illegal; and to charge one of Twellis v. Pa. R. R. Co., 3 Am. L. 1 Toomer v. London R. Co., 3 Nev. & Mac. 79 (1865). 2 Garton v. Bristol & E. R. R. Co., 1 Nev. & Mac. 218 (1856). two shippers who want exactly the same transportation of the same goods one rate while another shipper is charged another rate is personal discrimination by definition. Not only is this argument urged by the railroads, but in other services such as gas supply for different purposes it is claimed that economical operation is greatly hampered. § 1333. Such rates allowed by some cases. And indeed, the argument for allowing the making of different rates for the same commodities which are destined to be used for different purposes is a strong one. How strong it is from an economic point of view may be seen by an examination of the leading case supporting this argument, Hoover v. Pennsylvania Railroad Company.1 In that case the court held that an agreement made in 1881 to charge a uniform rate on shipment of coal to the Bellefonte Nail Works for consumption in operating its machinery could not be complained of as unjust discrimination against a mere dealer, who received his coal over the same road and was charged a higher rate. This was held not to be unjust discrimination, the court relying upon the broadest grounds of public policy to justify this result, Mr. Justice Green saying: "Such discrimination, as has thus far transpired, has not been felt to be undue or unreasonable, or contrary to legal warrant. In point of fact, it is perfectly well known and appreciated that the output of freights from the great manufacturing centers upon our lines of transportation constitutes one of the chief sources of the revenues which sustain them financially. Yet no part of this income is derived from those who are mere 1156 Pa. St. 220, 27 Atl. 282, 22 L. R. A. 263, 36 Am. St. Rep. 43 (1893). See also Louisville & W. R. R. Co. v. Fulgam, 91 Ala. 555, 8 So. 803 (1890); holding that under a statute permitting reductions designed to promote industries, provided that these concessions are duly published, a miller is entitled to rank with other manufacturers without discrimination. buyers and sellers of coal. When the freight is paid upon the coal they buy, the revenue to be derived from that coal is at an end. Not so, however, with the revenue from the coal that is carried to the manufacturers. That coal is consumed on the premises in the creation of an endless variety of products, which must be put back upon the transporting lines, enhanced in bulk and weight by the other commodities which enter into the manufactured product, and is then distributed to the various markets where they are sold." 1 § 1334. Repudiation of this doctrine. However, this doctrine is plainly inconsistent with the modern law against discrimination which in its latest development insistently forbids all discrimination. This is well brought out in the Railroad Discrimination Case 2 where it was held that a carrier may not give one customer a lower rate for the shipment of logs, than another, merely because the former ships the manufactured product over the carrier's line, Clark, C. J., saying: "The proposition is that a common carrier has a right to charge one person a lower rate of freight than another for shipping the same quantity the same distance, under the same conditions, provided the shipper give the company a consideration (shipping the manufactured lumber subsequently over its line), which its managers think will make good to it the 1 In Missouri, K. & T. R. R. Co. v. Trinity C. L. Co., 1 Tex. Civ. App. 553, 21 S. W. 290 (1892), the court left the question open whether a lower rate might be given a connecting carrier on railway cars than to a logging railway. See also, Fry v. Louisville & N. R., 103 Ind. 265, 2 N. E. 744 (1885), where a lower rate was quoted for commodities for "farm purposes," notwithstanding which the court enforced the bargain of the parties. 2 Hilton Lumber Co. v. Atlantic Coast Line, 136 N. C. 479, 48 S. E. 813 (1904). See the further discussion of this case in an eloquent opinion against all discrimination in Hilton Lumber Co. v. Atlantic C. L. Ry. Co., 141 N. C. 171, 53 S. E. 823 (1906). abatement of rate given to such parties. But if this is equality as to the treasury of the company, it is none the less a discrimination against the plaintiff.” 1 § 1335. Supply put to different uses. 2 There is also some authority on this point in regard to supplying services. Thus it has been held in Missouri that lower rates for water supply could be made to the manufacturer than to all other takers notwithstanding that the city charter forbade exceptional discriminations in water rates, on the ground that as all manufacturers were included in the class the discrimination was not illegal. And in Michigan,3 it was held that a consumer is not entitled to enjoin the enforcement against him by a gas company of a rate which the company is authorized to charge, because it grants a lower rate to persons consuming gas for other purposes in larger amounts, as it does not appear that any injury is inflicted upon the complainant by such rates. § 1336. Discrimination in such supply. If other discrimination is involved in the arrangement it will all be declared illegal without question in all courts. Another Pennsylvanian case, Bailey v. Fayette Gas & Fuel Company, decided since Hoover v. Pennsylvania Railroad Company 5 brings this out. In that case a higher price per cubic foot was charged to customers who used 1 The railroad commissions are now generally set against such discriminations. See Capital City Gas Co. v. Central Vt. Ry. Co., 11 Int. Comm. Comm. Rep. 103 (1906), and Manufacturers' Coal Rates Case, 3 Can. Ry. Cas. 427 (1904). 2 St. Louis Brewing Assn. v. St. Louis, 140 Mo. 419, 37 S. W. 525, 41 S. W. 911 (1897). 3 Boerth v. Detroit City Gas Co., 152 Mich. 654, 116 N. W. 628, 18 L. R. A. (N. S.) 1197 (1907). 4 193 Pa. St. 175, 44 Atl. 451 (1899). 5 156 Pa. St. 220, 27 Atl. 282, 36 Am. St. Rep. 43, 22 L. R. A. 263 (1893). gas simply for illuminating than was charged to such customers as used gas also for fuel. This was properly held to constitute discrimination; but the language of Mr. Justice Mitchell apparently goes much further than the immediate facts: "The gas is brought by the company through the same pipes for both purposes and delivered to the customers at the same point, the curb. Thence it goes into pipes put in by the consumer, and, after passing through a meter, is distributed by the customer through his premises according to his own convenience. The regulation in question seeks to differentiate the price according to the use for heating or for light. It is not claimed that there is any difference in the cost of the product to the company, the expense of supplying it at the point of delivery or its value to the company in the increase of business or other ways.' § 1337. Commodities carried of different character. Of course different rates may be given when the commodities are not of exactly the same sort. This is probably the explanation of a series of cases in Kentucky justifying a difference in rate between steam coal to manufacturers and domestic coal for dealers. Thus in Commonwealth v. Louisville & Nashville Railroad Company 1 the facts shown at the trial were that the electric light company which was getting the lower rate was bringing in a very low grade of coal, commonly known as "slack," used by it for steam purposes, while Wade, a coal dealer, was being charged a higher rate for the transportation of the highest grade of coal, known as "lump." Both kinds of coal were hauled in the same sort of cars, and unloaded in the same manner, but defendant's regular freight tariff on coal from Bevier to Franklin, was $1.50 per ton, while on the coal used for steam purposes by 168 S. W. 1103 (1902). |