in the service of cars, 9 I. C. C. R. 207; in the manufacturer's rate on coal, 5 I. C. C. R. 466, 4 Int. Com. Rep. 157; in rebates for the use of live stock or private cars, 4 I. C. C. R. 630, 3 Int. Com. Rep. 502; or in the exaction of unreasonable rent for private cars, 4 I. C. C. R. 131, 3 Int. Com. Rep. 162. All forms of secret rates and drawbacks are prohibited, 1 I. C. C. R. 480, 1 Int. Com. Rep. 764. Discrimination may be effected by unjust classification, 4 I. C. C. R. 535, 3 Int. Com. Rep. 460; or by commissions paid to soliciting agents, 2 I. C. C. R. 513, 2 Int. Com. Rep. 340; also combination rates less than tariff rates are illegal, 2 I. C. C. R. 1, 2 Int. Com. Rep. 1. Any form of discriminating preference is in violation of the statute, 2 I. C. C. R. 90, 2 Int. Com. Rep. 67.

Discrimination violative of this section may be effected through underbilling the weight of freight, or giving it a false classification, whereby less compensation is paid by one person than by another for a like and contemporaneous service. In the report of the Commission upon this subject, supra, in 1888, it was said that this method of discrimination had been extensively employed, and it reviews the evidence taken by the Commission in their investigation. Under the recommendation of the Commission, section 10 of the act was amended,imposing penalties upon the shipper who by false classification, false weighing, or false report of weight, or by other devices, knowingly or wilfully obtain transportation of their property at less than the regular rate. See infra, section 10. As to discrimination in billing at net weight, see 4 I. C. C. R. 87, 3 Int. Com. Rep. 131; 9 I. C. C. R. 440.

Another form of discrimination is in the use of private cars as where freight cars are either owned by the shipper or a private car line. See supra, section 118. The Commission says in its annual report for 1904 that the private car may be of advantage to the carrier by enabling it to provide equipment for special service during limited periods and the equipment is likely to be more adequate for the public, than for the carrier to undertake to own the cars itself or to secure them from its own connections. Concessions however were made in the use of such charges to particular shippers which amounted to the payment of a rebate, and that when the owner of the car became a dealer in the commodity transported, the fact of ownership gave him an important advantage over his competitor.

§ 160. Discrimination through interest in connecting company. Another device for effecting discrimination is through the making of a joint rate with a connecting railroad controlled by the shipper out of proportion to the value of the service and constituting in effect a rebate to the shipper. This was illustrated in the Hutchinson Salt case, 10 I. C. C. R. 1, where the Commission found that the connecting railroad did not own any equipment or rolling stock and was not in any way engaged as a common carrier, and that the granting of the division of the through rate to this connecting company was a mere subterfuge to give a concession in the rate and was an unlawful discrimination. In another salt case involving the transportation of salt westward from points in Michigan, where a similar charge was made as to the alleged interest of the salt producer in a boat line on Lake Michigan, 10 I. C. C. R. 148, the Commission found on investigation of the facts that the share of the through rate allowed to the boat line was not so disproportionate as to amount to a rebate, and therefore that the discrimination was not established. Discrimination through the devices of a connecting railroad in the division of joint rates was further discussed by the Commission in 10 I. C. C. R. 385, in an opinion filed Nov. 3, 1904, wherein the Commission reported the results of investigation of the divisions allowed the terminal lines in and about the city of Chicago. It was found that certain connecting railroads were practically controlled by certain large shippers and that the amounts allowed as divisions of the through rate were so excessive as to constitute in effect rebates to such shippers. As this was a general investigation in which no specific charges had been formulated, no order was made. The Commission ruled that to the extent that these divisions. exceeded the reasonable charge for the performance of the service, they were an unlawful preference and discrimination in favor of the shipper owning the railroad. On this subject see also the report of the Commission for 1904, pages 19 to 23.

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§ 161. Discrimination by carrier in favor of itself as a shipper.- A carrier can no more discriminate in favor of itself as producer and shipper than in favor of any other shipper, said Judge Cooley in 4 I. C. C. R. 296, and 3 Int. Com. Rep. 302. There is however no federal statute which forbids interstate

carriers from becoming dealers in articles of transport. Interstate Commerce Commission v. Chesapeake & Ohio Railroad Co., 128 Fed. Rep. 59.

There is a difficulty in determining the fact of discrimination by a railroad in its own favor as a carrier. Thus in a proceeding against the Delaware, Lackawanna & Western Railroad Company, 3 Int. Com. Rep. 302, and 4 I. C. C. R. 296, supra, it appeared that the railroad company kept no separate account between itself as a carrier and itself as a shipper of coal, so that there was no means of determining whether it carried for reduced rates as a carrier, or sustained a loss as a dealer. The Commission in that case held that it had no power to order such an account to be kept. It could however determine whether the rate charged to the complainant was a reasonable one, and in determining that issue it could determine the price, at which the railroad company sold its coal, and the extent of its own profits upon coal marketed compared with the rates charged other dealers for transportation, or whether it made any profit at all, could be inquired into by any tribunal authorized to pass upon the reasonableness of rates. The Commission said in the former case, that even if the carrier kept a separate account showing what it charged itself for transportation, and even were such a separate account required, it would not be a safe guide in determining whether the carrier did or did not use its power as a carrier oppressively. See also case in 8 I. C. C. R. 630, another coal case involving the rates from Myrick, Missouri, and from Rich Hill, the latter being owned by the Missouri Pacific Railway Company. The court held that the only remedy available to the independent operator was to secure a reasonable rate, as the carrier could so adjust its rates that the moving of the coal could be conducted at a loss, the profit being derived from the carriage, and in that event every mine operating must operate at a loss.

In 7 I. C. C. R. 33, the railroad company owned the entire stock of a development company, which had been organized for the purpose of holding certain lands of the railroad company, and caused grain to be purchased in the name of the development company and transported over the lines of the railroad company and sold upon the market. The Commission said that even assuming that the development company was an

independent entity and that the nominal freight charges were actually paid by it, still it was merely a tool in the hands of the railroad company and the act accomplished was the act of that company. There was no fixed rate and the rate actually received was less than was, or would have been, charged any other person for the same service under the same conditions. Here it was said that this was a clear violation of section 2. The Commission in this case distinguished the coal cases above cited, saying that in those cases there was a permanent condition which must be met, while this was an unlawful practice which must be stopped.

In the Chesapeake & Ohio Railroad Company case, supra, there was a contract between the railroad company and another railroad for the sale of coal to be transferred over its line at a price less than the aggregate cost of the expense items and its own published freight rates. The court held that this transaction was not a violation of section 2 unless the transaction was a mere device to cover an intentional giving of a lessrate for carriage to some than to others, there being no legal ground for assuming that the loss was sustained by it as a carrier rather than as a dealer, and also that if the carrier did not credit on its books its freight accounts with its published rate and did not charge the loss to an account kept with the article dealt in, there would seem to be an apparent violation of the 2nd and 6th sections of the Act; but at most only a technical violation, as it had a right to suffer a loss as a dealer. The Court could not find any authority for saying that the loss under such a contract must necessarily be treated as a loss on carriage, there being no evidence in the case affecting the good faith of the contract, and therefore nothing whereon to base an inference that the transaction was a device to evade the law.

$162. Discrimination in storage of goods, etc.-Another form of discrimination condemned by the Commission was presented in the complaint of the American Warehousemen's Association, 7 I. C. C. R. 556, which set forth that a large number of railroads unjustly discriminated in offering free storage of freight in various ways to some shippers and not to others, in failing to collect demurrage charges on cars detained by favored shippers, by storing for some concerns large quan

tities of freight and making delivery thereof in small lots to purchasers, and by assuming expenses of unloading, loading and cartage for some shippers and not for others. A large volume of testimony was taken in different parts of the country. The Commission held that the system prevailing was open to grave abuses and that the allowance of such privileges as storage and the like was clearly forbidden by section 2 of the statute. The effect of allowing special facilities for storage was to provide a favored shipper with branch business houses in large cities. The investigation resulted in a general order requiring carriers to state in their tariffs what free storage was granted and the terms and conditions under which it would be granted. The Commission said that as this procedure had been recommended by the Supreme Court in the Grand Haven Free Cartage case, it was all the more applicable in the case of storage, which was expressly mentioned in the act. As to right of carrier to contract for storage of through grain in elevators at terminals in transit, see 10 I. C. C. R. 309.

§ 163. Stoppage in transit privileges. The privilege of milling in transit, that is of stopping in transit, for the purpose of grinding grain into flour or compressing cotton, or sawing logs into lumber, at some point in transit, and then shipping the manufactured or compressed product forward at the through rate, has been discussed in several cases by the Commission. See infra, § 194. In 8 I. C. C. R. 121, the Commission commended the practice in a case of cotton shipment, saying that it benefited both the railroad company and the producer and tended to place non-competitive points upon equality with more distant competitive localities from which lower rates were in force. Such privileges may be granted or withheld by the carrier.

The receiving of cotton from a shipper and having it compressed at a station en route and reshipping to eastern points. at the rate equal to the published through rate is not an unlawful discrimination under section 2 when all parties are entitled to the same privilege. Cowen v. Bond, 39 Fed. Rep. 54 (So. Dis. of Miss.). It is immaterial in such case, that the arrangements are made to induce buyers to believe that the cotton was actually raised in different localities than where it was in