carrier had dual rates: first, an open rate on coke, and second a lower rate when the coke was for use in blast furnaces, but this was held improper, although it was publicly scheduled and open to all who qualified themselves for the lower rate.44 It will be remembered that this principle against basing rating upon the use to which the article is put has already been discussed in the previous Chapter on Classification of Freights.

§ 705. Personality of shipper.

It would seem, therefore, to be fundamental that a rate cannot be confined in its terms or application to an individual or a class.45 It is now well established that it is no defense to a charge of undue discrimination between manufacturers to urge that they are not engaged in the manufacture of the same or similar articles, and do not compete in the same markets. 46 The practice of naming specific consignors and consignees as entitled to special service has often been condemned. 47 Undue preference results from a demand for higher charges for new than demanded from old subscribers for same telephone service and facilities.48 Rates on coal applicable only to shipments of certain consignors or consignees have been unhesitatingly condemned.49 Even a railroad stands like every other shipper; and it is unlawful to apply one rule when a shipment is for a carrier, and a different rule when it is for a private individual.50 The Supreme Court has finally settled this question by holding that a difference in rates to railroad consignees for fuel coal amounts to un

44 St. Louis Blast Furnace Co. v. V. Ry., 25 I. C. C. 183.

Improper to base rate upon use to which commodity may be put. Anaconda Copper Mining Co. v. C. & E. R. R., 19 I. C. C. R. 592.

45 Virginia-Carolina Chemical Co. v. A. C. L. R. R., 22 I. C. C. 394.

46 Union Tanning Co. v. S. Ry., 25 I. C. C. 112.

47 Pierce Co. v. N. Y. C. & H. R. R. R., 19 I. C. C. 597.

48 Shoemaker v. C. & P. Tel. Co., 20 I. C. C. 614.

49 In re Restricted Rates, 20 I. C. C. 741.

50 Crescent Coal & Mining Co. v. B. & O. R. R., 23 I. C. C. 81.

just discrimination under these sections of the Act.51 And the Commission has recently ruled that discrimination cannot be avoided if a competing electric line is not given same coal rates as are accorded steam railroad.52

§ 706. Restricting rates to certain purposes.

It has been seen that it is now considered fundamental that a classification should not rest upon the use to which article is to be devoted. 53 It is, therefore, unlawful to maintain different rates of freight dependent upon use of the goods. 54 The principle is repeated in many opinions that a rate cannot be based upon the use to which the commodity is to be devoted.55 Upon complaint of undue prejudice, in that competitors were granted a lower rate on coke intended for blast-furnace use, damages were awarded by the Commission for an unreasonable rate. 56 It is difficult to determine that one theory is reasonable and right for one manufacturer or shipper, and another theory is reasonable and right for another manufacturer or shipper under substantially similar circumstances and conditions.57 The Commission has, therefore, condemned the maintenance of dual rates on a commodity, dependent upon the use to which the article is put.58 And an advance due to discontinuance of dual rates based upon use is, therefore, justified. 59

§ 707. When commodities are of different character. Of course different rates may be given when the commodities are not quite of the same character. This is

51 Interstate Commerce Commission v. Baltimore & O. R. R., 225 U. S. 326, 56 L. ed. 1107, 32 Sup. Ct. 742.

52 In re Restricted Rates, 20 I. C. C. 426.

53 Jones Bros. Co. v. M. & W. R. R. R., 21 I. C. C. 577.

54 Carter White Lead Co. v. N. & W. Ry., 21 I. C. C. 41.

55 Virginia-Carolina Chemical Co. v. A. C. L. R. R., 22 I. C. C. 394.

56 Stowe-Fuller Co. v. Pennsylvania Co., 12 I. C. C. 215.

57 Douglas & Co. v. C., R. I. & P. Ry., 16 I. C. C. 232.

58 Arkansas Fertilizer Co. v. St. L., I. M. & S. Ry., 25 I. C. C. 645.

59 Wisconsin Steel Co. v. P. & L. E. R. R., 27 I. C. C. 152.

99 61

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 " the facts shown at the trial were that the electric light company was engaged in the business of manufacturing and selling electricity; that the coal transported to it was a very low grade of coal, commonly known as "slack," and was used by the company for steam purposes; that Wade was a coal dealer in Franklin, and that the particular carload of coal on which this proceeding was based was the highest grade of coal, known as "lump; Upon a review of the authorities cited in the note 62 the court held that "it was allowable and proper for a railroad company to classify freight according to its quality or character and marketable value; and discrimination in charges for carrying different classes or kinds is not only universally recognized, but plainly authorized by section 215. And that this settled the question since it was admitted in the pleadings and shown by proof that the respective carloads of coal upon which this action was founded were wholly different both as to quality and marketable value." The Commission has frequently had occasion to apply these principles, holding for instance in one important case not long ago that smithing coal, being of greater value than the ordinary bituminous coal, might properly under the Act be charged a higher rate per ton for the transportation.6

63

§ 708. Rates to certain classes of shippers.

From what has been said it will be plain that it will usually constitute personal discrimination to give special

60 112 Ky. 783, 68 S. W. 1103. 61 Much the same facts appeared in Louisville, E. & St. L. C. R. R. v. Crown Coal Co., 43 Ill. App. 228.

62 Louisville & N. R. R. v. Com., 105 Ky. 179, 48 S. W. 416; Louisville

& N. R. R. v. Com., 108 Ky. 628, 57 S. W. 508; Louisville & N. R. R. v. Com., 108 Ky. 628, 57 S. W. 511.

63 Sligo Iron Store Co. v. Union P. R. R., 19 I. C. C. 527.

rates to certain classes of persons upon designated sorts of goods. This complication appeared in one case before the Commission, where it was shown that under the Western Classification and tariff there were two westbound carload rates from Mississippi river points to Pacific coast terminals on goods termed "Emigrants' Movables" (including "household goods"), one a general class rate and the other designated a "commodity" rate and less than the general rate; the latter rate was published as being open to "intending settlers only." But the Commission said: "Unless within the authorized exceptions to the general rule of the statute, discriminations in charges upon like shipments of the same commodities based solely upon the purpose or 'business motive' of the shipper, are unlawful whether effected directly or indirectly by methods of classification." In a recent case in the Supreme Court it has held that differences with respect to competition between coal intended for railway consumption and other coal, and with respect to the manner of delivery, depending upon a difference in the facilities possessed by the railroads and other consignees, do not make the interstate traffic therein dissimilar in circumstances and conditions, within the meaning of the Act, so as to justify the giving of a lower rate for the transportation of railway fuel coal than is given to shipper of other coal between the same points.65

§ 709. Special classes of passengers.

Granting lower rates with the customary accommodations to persons representing that they were traveling for the purpose of buying land or settling near the railroad

Duncan v. A., T. & S. F. Ry., 6 I. C. C. Rep. 85.

Denial of free transportation to a caretaker of chickens, not found unreasonable or unduly discriminatory. Ream v. S. P. Co., 25 I. C. C. 107. 65 Interstate Commerce Commis

sion v. B. & O., 225 U. S. 326, 56 L. ed. 1107, 32 Sup. Ct. 742.

Carriers make low rates on emigrant movables to induce settlement along their lines. R. R. Com'rs of Montana v. N. P. Ry. Co., 26 I. C. C. 482.

66

line has been held unlawful discrimination; 6 but special rates to emigrants, riding exclusively upon "emigrant trains" with poor accommodations have been permitted."7 This distinction is well grounded upon the difference in the cost of service to the two classes. Classifications based upon the form of contract under which passengers are carried have been sustained, as in the case of allowing to a person riding upon a commutation ticket a lower rate than that allowed to one riding upon a mileage ticket; but it is not justifiable to sell such tickets to commercial travelers at a lower rate.68 It has been held in England that a railroad may give an especially low rate for passenger service to shippers of freight in large quantities.69 But in the United States this would undoubtedly be considered illegal discrimination, and quite within the principle as the giving of reduced rates to large shippers, which has been above considered illegal.70 "In the transportation of passengers carriers are performing a public duty under franchises granted by the State, and are subject to the rules of law which require absolute impartiality to all, when the circumstances and conditions are substantially similar. The fact that their own interests may be promoted to some extent by swerving from this rule cannot be regarded as sufficient to warrant a departure from the obvious language of the Statute." "1

66 Smith v. Northern P. R. R., 1 Int. Com. Rep. 611.

67 Savery & Co. v. N. Y. C. & H. R. R., 2 Int. Com. Rep. 210.

68 Associated Wholesale Grocers v. Mo. Pac. Ry., 1 I. C. C. Rep. 393.

69 Inverness Chamber of Commerce v. Highland Ry., 11 R. & T. Cas. 218. 70 Colorado Free Pass Investigation, 26 I. C. C. 391.

71 Smith v. No. Pacific R. R., 1 Int. Com. Rep. 611.