the controversy with any hope of success. The history of the basis for determining the separate rates of the whole schedule must follow the same course.

136. Proper proportion of total costs.-The total amount of gross receipts which a public service company is justified in taking from its whole business has been briefly discussed. These are in brief all annual expenditures, including an allowance for upkeep, and in addition the fair capital charges for the year, arrived at by determining what would be in the particular case a reasonable return upon proper capitalization. The fairest way to all concerned to determine the price for any particular service would seem to be to apportion ratably the total disbursements of every sort to the various items of business, and so arrive at proportionate rates.59 Theoretically, certainly, any other method is less just to all concerned. In determining thus what is a reasonable rate for a service to be rendered, it is not proper to take the plant as existing and as maintained, and to regard as the whole cost of any subsequent service merely the increased expense necessary to add to its business the service in question.60 The cost of each service ought to include its fair share of the interest on investment and of the general expense; and it is necessary, therefore, to consider what rules there may be devised for proper apportionment.

137. The unit of service.-The computations described in this chapter may be carried with advan

59 Pennsylvania R. R. v. Philadelphia County, 220 Pa. St. 100, 68 Atl. 676, LEADING ILLUSTRATIVE CASES.

60 See Atchison, T. & S. F. Ry. Co. v. United States, 203 Fed. 56.

tage one step farther, to the determination of the average cost per unit of service. Thus of any given gas company it may be said that it is entitled to take as gross receipts from its whole business a certain sum, determined by adding together its operating expenses, including therewith all proper maintenance charges, and its fixed charges. Then if the probable sales, judged by its actual sales, amount to approximately certain thousands of cubic feet, its proper average price per cubic foot may be found. In testing freight rates, the most difficult problem of all, this standard is the ton-mile cost. If the sum of the whole amount of freight carried is one hundred thousand ton miles, and the gross revenue required from freight be two thousand dollars, the average rate of freight will be two cents per ton mile. If there were no other factors in the problem, therefore, a fair proportionate rate would be the tonmile average charge. Owing, however, to other factors which cause a difference between commodities with respect to the fair charge for carrying them, a uniform ton-mile rate applied to all cases would not result in reasonable rates.62

138. The rate as an entirety.-The idea of the law has always been that the rate was an entire thing. For instance, as the whole freight is an indivisible unit, it is obvious that without some new arrangement between the parties the carrier will not be entitled to any freight whatever for goods not de

61 Atlantic C. L. Ry. Co. v. Florida, 203 U. S. 256, 27 Sup. Ct. 108, LEADING ILLUSTRATIVE CASES.

62 Tift v. Southern Ry., 138 Fed. 753,

livered at the destination.63 Where, therefore, the carriage is interrupted when partly completed, since there is no delivery at the destination, the freight is not due; and since freight is an entirety there is nothing which can properly be recovered, in the absence of a new agreement. Where delivery is made

of part of the goods only, it is not possible to divide the shipment into separate units, and recover freight for as many such units as are delivered.65 On the other hand, if the goods arrive in specie, but have been damaged without fault of the carrier, entire freight is due. Even if they arrive damaged by fault of the carrier, so long as they are still in specie, the owner must receive them and rely upon a cross action for damages.

63 Cargo ex Argos, L. R. 5 P. C. 134 (Eng.).

64 Braithwaite v. Power, 1 N. D. 455, 48 N. W. 354. 65 Western Transp. Co. v. Hoyt, 69 N. Y. 230.

CHAPTER XIV.

PREVENTION OF DISCRIMINATION.

139. The development of the rule.-The rule against discrimination is the latest development of prime importance in the law governing public service. It must be plain to all that there has been distinct evolution in the law governing public employment during the last twenty-five years. A comparatively few years ago it was held that if a public service company served all at reasonable rates it performed its obligation. So long as one received service at a rate which was reasonable in itself, it used to be maintained that he had no ground for complaint even if another similarly circumstanced was getting service at a lower rate. But it was said that if others were paying a lower rate than the complaining party this would be persuasive evidence to show that he was being charged an unreasonable rate. It is only within this last generation, however, that it has been appreciated that any discrimination is truly inconsistent with public duty. Indeed, it was bitter experience that forced the establishment of this law rather than any process of logical deduction. But nowadays it is stated as a matter of course that the duty owed to all alike involves the obligation to treat all alike."

66 Messenger v. Penn. R. Co., 8 Vroom 531 (N. J. L.), LEADING ILLUSTRATIVE CASES.

140. What constitutes illegal discrimination.Not only are the outright discounts and the bold rebates of the earlier time illegal today, but any device by which the charge to a shipper is made less than the schedule rate is now held discrimination. Thus free cartage for the collection and delivery of freight for certain shippers only, is an illegal rebate.67 And the allowance to certain shippers of a certain sum for the use of their private sidings, is another case of illegal reduction.68 As such obvious devices have thus become too dangerous, more elaborate schemes have developed for getting an advantage in rates. Many large concerns have organized, often, as a separate concern, an industrial railway from their premises to the trunk line. And posing as a connecting carrier they attempt to obtain from the trunk line a division of the rate to market.69 Another late scheme is the organization of a dummy transportation company by a manufacturing company to carry its products to market, getting as payment not only the rental of their special cars at extraordinary high rate, but a virtual commission for furnishing the business.70

141. Adherence to the scheduled rate. The strict provisions against rebating in the recent legislation are based upon an ingenious and apparently effective plan. A schedule of rates prepared by the railroad must be filed with the commission, and duly published as required. When this has been done,

67 American Sugar Rfg. Co. v. Delaware L. & W. R. R., 200 Fed. 652. 68 Chicago & A. Ry. Co. v. United States, 156 Fed. 558.

69 United States v. Atchison, T. & S. F. R. R. Co., 142 Fed. 176. 70 United States v. Milwaukee Refrig. Transit Co., 145 Fed. 1007.