kind of rate-for instance, a less charge for a long-haul than for a short-haul-" so far as the same may be a preference or discrimination which is undue and unreasonable, or unjust to any State."

PRIVATE RAILWAYS.--That this section applies to the Government railways of the States, whether controlled directly by the Executive Government of the State, or vested in a corporate body of Railway Commissioners, is clear. It seems that the subsequent words, referring to preferences made "by any authority constituted under a State," are wide enough to include not only Railway Commissioners, but also railway companies incorporated by an Act of the Parliament of a State. The only importance of the question seems to be that if privately-owned railways are not included in this section, they will be subject to the full operation of the trade and commerce power, without limitations which are placed by this section upon the power of the Parliament.

RAILWAYS OF THE COMMONWEALTH.-This section does not apply to railways of the Commonwealth. In the event of railways being owned by the Federal Government, the Parliament could of course impose what prohibitions it pleased; but the Constitution itself imposes an absolute prohibition against any preference whatever being given by the Commonwealth to any State. (See sec. 99, and Notes, § 414, supra.)

$430. "Preference or Discrimination."

HISTORY OF THE WORDS.-The phrases "undue preference," "unjust discrimination," and so forth, have a history in English and American legislation, and in the judicial decisions of those countries, from which it is impossible to disassociate them, and which forms a valuable aid to the interpretation of the words in this Constitution. It has been held in the Supreme Court of the United States, with respect to these same words, that so far as Congress, in the Inter-State Commerce Act, adopted the language of the English Railway and Canal Traffic Act, it is to be presumed that it had in mind the construction given by the English courts to the adopted language, and intended to incorporate it into the Act. (Inter-State C.C. v. Baltimore, &c., R. Co., 145 U.S. 263. See Texas and Pacific R. Co. v. Inter-State C.C., 162 U.S. 197.)

English Legislation.-When railways were first authorized in England, it was expected that the railways would be public highways like turnpikes or canals; that the companies would merely provide the highway, and take toll for its use; and that the public, or carriers, would employ their own locomotives, carriages, and waggons-just as on roads and canals they employed their own horses, coaches, carts, and (sometimes) barges. (Grierson, Railway Rates, pp. 71, 94; Hadley, Railroad Transportation, p. 165.) It has been said by Wills, J., that "no proper understanding of a good deal of our railway legislation, and pre-eminently of clauses relating to tolls or charges, can be arrived at, unless it (this notion) is firmly grasped and kept steadily in view." (Hall v. London Brighton, &c., R. Co., 15 Q.B.D. at p. 536.) Accordingly the early railway Acts required equal mileage rates-the same charge per ton per mile, on all parts of the line, for the same class of goods.

It soon became clear, however, that this anticipation was a mistake, and that three cases had to be provided for, on railways, as on canals :--(1) where the railway companies simply provided the highway and took tolls for its use; (2) where the railway companies, without being carriers, provided trucks and locomotives; (3) where the companies were common carriers upon their own highway. (Grierson, Railway Rates, p. 94.) Accordingly by the Railway Clauses Consolidation Act, 1845 (8 and 9 Vic. c. 20, sec. 90) the prohibition against differential rates was repealed. It was recited to be expedient that companies should have power to vary the tolls upon their lines "so as to accommodate them to the circumstances of the traffic," but that this power "should not be used for the purpose of prejudicing or favouring particular parties, or for the

purpose of collasively and unfairly creating a monopoly, either in the hands of the overpany or of particular parties." It was therefore enacted that companies might alter or vary the tells authorized by their special Acts, either upon the whole or any part of the railway: "Provided that all such tolls be at all times charged equally to all persons and after the same rate, whether per ton, per mile, or otherwise, in respect of all passengers and of all goods or carriages of the same description, and conveyed or propelled by a like carriage or engine, passing only over the same portion of the line of railway under the same circumstances; and no reduction or advance in any such tolls shall be made either directly or in directly in favour of or against any particular company or person travelling upon or using the railway."

This section -the “equality clause," as it is called-only applies where circumstances are absolutely the same; and then it requires an absolutely rind equality. It is im material that the allowance is made to meet competition. Lonion and N.W.R. Co. *. Evershed, 3 Q. K. D. 134 : 3 App. Ca. 1929; and see Phipps r. Lonin and N.W.R. Co. 2205 at p. 249. A carrier cannot be charged higher rates than other members of the public Hireat Western R. Ca. r. Sutton, L.R. 4 H L 25; see Ford r. London ari SWR C&, @+ LJ. QR 130 Bat the proviso only applies to goods carried between the same points of arrival ani departure, and does not forbid a uniform charge tron 2 ferect points, or disproportionate rates for unequal distances. Dezaby Main Colbery Ca, r. Manchester, &c. R. Co., 11 App. Ca. 97.1

The Railway ani Canal Trafi Art. 1854-17 ani 18 Via, &. 31, sec. 2. provides that ne malbay of canal ompany “shall make or give any un fue ce unreasona’le preference er achantage to or in favor of any particular person or company, or any particular deserve of traff in any respect wistever, nor shall any such spacy sofject any a person or company, or any partialar description of tra.. to any size or

a treasezate prin ise or disadvantage in any respect whatever."

This section, has been supplemented by the Railway and Canal Traže Act, 1888 51 Nea 27. subs, 1 of that Aut, provides that whenever it is s.va that a malwar acpaty mikes any crence in treatment to any trader je Class of tries, or to the traders in any striit in respect of the same or similar merchandise, seth area or lar servies, the Junken of proving that the ference in treatment is * an avia preference is a the company. Subsec. eats that in leading whether wer chang x dărce in treatment is an anlae proference, the Cant e the Cessons may, they think it ress cable, take it: testleration whether the bøer Darge, or s frena in treatment, & zrecessary for securing, in the interests of the da, the traff, in respect of which it is made, and whether the inequality D ew that anddy relating the rates changed the amplainant with the at bora (way still makt, 7.7 Rall the Count be the Commise bets sad.000, AZT the rates te, ce any diferere in the treatment of, bome and fre waterspect of the same or sizlar series Fre amparson with the Cukase of 128 Castiritila, see N.te. § 457 19

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The decisions on the Act of 1854, first by the Court of Common Pleas, and then by the Railway Commissioners and the Court of Appeal, show a considerable difficulty in fixing the principles upon which the reasonableness of a rate is to be determined. It has been clearly settled, however, that the fact that a trader has access to a competing route for his goods may be taken into consideration in deciding whether lower rates constitute an undue preference; and that the question whether a preference is undue or unreasonable is a question of fact in each particular case. (Phipps v. London and N. W.R. Co. [1892], 2 QB 229.) For the decisions of the Railway Commissioners, see Annual Reports of the Railway Commissioners (Parl. Papers); and for comments on some of them, see Grierson, Railway Rates, pp. 173-8; Hadley, Railroad Transportation, pp. 182-5. It will be convenient here to cite the decisions which bear on the interpretation of the Act of 1854, and to quote extracts from some of the judgments.

The Court may take into consideration the fair interests of the railway itself, and entertain such questions as whether the Company might not carry larger quantities, or for longer distances, at lower rates per ton per mile than smaller quantities, or for shorter distances, so as to derive equal profits to itself. A rate for one company's coal, to compete with coals of another merchant partly sea borne, held an undue preference. Ransome v. Eastern Counties R. Co. [1857], 23 L.J. C.P. 91.)

A railway company made a special rate with certain merchants "in order to introduce the northern coke into Staffordshire." Held that this was no legitimate ground for a preference, and that.lowering rates for that purpose, there being nothing to show that the pecuniary interests of the company were affected, was an undue preference. (Oxlade . Eastern Counties R. Co. [1857], 26 L.J. C P. 129.)

A railway company is justified in carrying goods for one person at a less rate than for another if there be circumstances which render the cost of carrying for the former less than for the latter. (Id.)

Excluding the omnibus of one omnibus proprietor from within the station gates, and admitting another, no justifying circumstances being shown, held an undue and unreasonable preference. Inconvenience to passengers was relied on as one element. (Marriott v. London and N. W.R. Co. [1857], 26 L.J. C.P. 154.)'

Where a company gave a cab proprietor, for a consideration, an exclusive right to stand at the station, no public inconvenience being shown, no injunction was granted, (Beadell r. Eastern Counties R. Co. [1857], 26 L.J. C. P. 250; and see cases cited Dig. Eng. Case Law, iii. 138.)

Carrying coals from one colliery at a lower rate than from another in the same locality, in consequence of a threat from the owner of the first colliery to construct another railway, is an undue preference. (Harris . Cockermouth, &c., R. Co. [1858], 27 L.J. C. P. 162.)

A scale of charges for carriage of coal from two points, the effect of which was to diminish the natural advantages of dealers at one point, by annihilating, in point of expense of carriage, a portion of the distance, held an unreasonable preference. (Ransome v. Eastern Counties R. Co. [1858], 27 L.J. C.P. 166.)

"The effect of such a scale of charges is to diminish the natural advantages which the position of the dealers at Ipswich, by reason of its greater proximity, gives them over the dealers at Peterborough, in respect of the traffic at Thurston, &c., by annihilating, in point of expense of carriage, a certain portion of the distance between Peterborough and those places; and just in proportion by which that natural advantage is diminished, an undue preference is given to the Peterborough dealers, and an undue disadvantage is brought upon the complainants and the other Ipswich dealers." (Per Williams, J, id. at p. 169.)

The words "undue" and "unreasonable" imply that there may be advantage to one person or one class of traffic, and prejudice to another, which would not be within the Act. It is not undue or unreasonable for a railway company to carry goods for A at a lower rate than for B, in consideration of A's guarantee of large quantities and full loads at regular periods (provided that the object of the company be to obtain thereby a greater profit by the diminished cost of carriage) although the effect may be to exclude B from the lower rate. (Nicholson v. Great Western R. Co., 1859, 28 L.J. C.P. 89.)

A railway company may make special agreements securing advantages to individuals, where it clearly appears that the company has in view only the interests of the proprietors and the legitimate increase of the profits of the railway, and the consideration given to the company in return for the advantages is adequate, and the company is willing to afford the same facilities to all others upon equal terms. (Id.)

A preference to a customer why engaged to employ other lines of the company, for trafo distinct from asi to vetected with the goods in question, was held unreasonable. Baxendale r. Great Western. R. Ca. 189, LJ. C.P. 69..

A company charged rates in lasive of delivery charges, in order to compel enstomers to employ them as amers, apart from their line of rat way. Held an undue preference to themselves baveniale n. Great W.R. Co., 1859, 28 LJ. CP. 81: Gaztec r. 69reat W.R. Ca. 2, 158

A facrity given to one carer by receiving goods at a later hour is an undue prejudice to others Garton r. Bristä, &2, R. Ca, 182. A LJ. C.P. 3.66.1

A belumme to certain persons, in consideration of their contracting to consign ail pods by the rallar elity water or ther meats, is an unice preference, unless lide to prevent & vmpetition with the railway, or that there is secured therely to the company such an an unt of traffic as to compensate for the rexata Bow fi scmpetition, held out to the pablo generally, mijit he good.

A reduced rate for a full trained is good, though the company, for its own conrecience, indes the traili If the rate is valid, the mole of carriage is immaterial. Fansumer. Eastern Counties R. Ca., 18650, 29 LJ C.P. 329.1

The gratuitoes cartage of the goods of one firm, though due bona fide to meet ompentic and at a proct on the whole carriage, is an unine preference. London and N.W.R. Cer. Eversted. 1877, 2 Q B.D. 254 ; 3 Q. B D. 134 ; 3 App. Ca. 1029.

We are of option that the gratuitous cartage and the allowance of rebate granted by the defendants to the three brewing firms mentioned in the case, but not granted to the plantão, although made howa tie for the simple purpose of attracting their trafe to the defendants" life of railway, in Een of its being sent by competing lines, and Although such traffic realized a profit to the defen lants notwithstan ing such an allowance or rebate, dri under the circumstances amount to an unine preference or advantage even to them by the defendants company, and is contrary to the language and meaning of the e, nality clanse, Sani 9 Vic. e. 20, s. 90, and also of 17 and 18 Vic. c. 31, & 2.7 Fer Mellor, J., 2 Q. B.D. at p. 26551

“We think that a railway company cannot, merely for the sake of increasing their trafe, reduce their rates in favour of individual enstomers, unless, at all events, there is a sufficient reason for such rediuition, which shall lessen the oust to the company of the ocveyance of their traffic, or some other equivalent or other services are rendered to them by such insiividinals in relation to such trato Id. at p. 267.1

Grosg Rates—A railway company carried coals to a point, from a group of collieries at diferent distances along the sathe line, at the same rate. In an action for overcharge, it was beli by the Court of Appeal ani by the House of Lords, overruling the Queen's Ben à Division, that this was not a breach of the equality clause, and that no action for an overcharge lay for an undue preference. Denaby Main Colliery r. Manchester, &c., R. Ca., 1883, 13 Q.B. D. 674, 14 Q. B. D. 29, 11 App. Ca. 9.

By sec. 29 of the Railway and Canal Trate Act, 1888 (see p. 906. sp. it is provided that a railway company may group together places in the same district. Situated at various distances from any point of destination or departure, and charge uniform rates to and from all places within the group, provided that the distance is not unreasonable, and the group rates charged are not such as to create an unine preference. The works of the appliant were on the line of the Furness R. Ca., 18 miles from a junction. Other similar works were situated on the same line, 38 miles from the Junction. The company grouped these works together ani charged them a uniform rate, except that the applicants were charged sixpence a ton less for coke. Held, that so far as the rate for coke was concerned, the company had male sufficient allowance : but as regards the other rates, the places grouped were so far apart that there was an nice preference. North Lonsdale Iron Co. r. Farness R. Co., 1891, 60 L.J. Q.B. 419. See also Newry r. Great Northern R. Co., 7 Ry. and Can. Traffic Cas. 154; cited Dig. Eng. Case Law, ul. 146.7

Competition-The fact that a trader has access to a competing route for the carriage of his goods may be taken into consideration in deciding whether lower rates charged to such trader are an unine preference. (Phipps r. Lonion ani N.W.R. Co, 1822 QB 229.1

The second section of the Act of 1854 does not afford to the tribunal any kind of guide as to what is unise or unreasonable. It is left entirely to the judgment of the Court on a review of the circumstances. Can we say that the local situation of one traler, as compared with another, which enables him, by having two competing routes to enforce upon the carrier by either of those routes a certain amount of compliance with

his demands, which would be impossible if he did not enjoy that advantage, is not among the circumstances which may be taken into consideration? I am looking at the question now as between trader and trader. It is said that it is unfair to the trader who is nearer the market that he should not enjoy the full benefit of the advantage to be derived from his geographical situation at a point on the railway nearer the market than his fellow trader who trades at a point more distant; but I cannot see, looking at the matter as between the two traders, why the advantageous position of the one trader in having his works so placed that he has two competing routes is not as much a circumstance to be taken into consideration as the geographical position of the other trader, who, though he has not the advantage of competition, is situated at a point on the line geographically nearer the market. Why the local situation in regard to its proximity to the market is to be the only consideration to be taken into account in dealing with the question as a matter of what is reasonable and right as between the two traders, I cannot understand. Of course, if you are to exclude this from consideration altogether, the result must inevitably be to deprive the trader who has the two competing routes of a certain amount of the advantage which he derives from that favourable position of his works. All that I have to say is that I cannot find anything in the Act which indicates that when you are left at large, for you are left at large, as to whether as between two traders the company is showing an undue and unreasonable preference to the one as compared with the other, you are to leave that circumstance out of consideration any more than any other circumstance which would affect men's minds." (Per Lord Herschell, id. p. 242.)

"It seems to me that, whether you look at the Act of 1854 by itself, or whether you look at it in connection with the provisions of sub-sec. 2 of sec. 27 of the Act of 1888, to which I have been referring, it is impossible to say that there is anything in point of law, which compels the tribunal to exclude from consideration this question of competing routes. I do not go further than that. It is not necessary to go further than that. I am not for a moment suggesting to what extent it is to weigh. I am not suggesting that there may not be such an excessive difference in charge made in cases of competition, as that it would be unreasonable and unfair when you are looking at the position of the one trader as compared with the other. That may be so, but all that is matter for the tribunal to take into account, and certainly I think that they are entitled to take it into account, and to give weight to it as far as is reasonable. If that be so, it

is of course sufficient to dispose of the present case." (Per Lord Herschell, id. pp. 245-6.)

"Now, the appeal here is put, as it must be put, upon a question of law-viz., whether there is any rule which compels us to say that the Commissioners had no right to take into their consideration the fact that Butlins and Islip had two routes of communication westward instead of one. It appears to me that there is no such rule, and I cannot help thinking it would be extremely unreasonable if there were. Upon what principle of good sense can any business man or anybody else exclude from his consideration the locality of either place? If there is a physical difference in favour of one or the other, or an artificial difference by reason of the facilities of traffic, whether by sea or by land, why is not everything which is material to be taken into account, and upon what principle can it be said that you are to exclude from consideration one of the main elements in the case?" (Per Lindley, L.J. id. pp. 250-1.)

"I think it is clear that the section implies that there may be a preference, and that it does not make every inequality of charge an undue preference Of course, if the circumstances so differ that the difference of charge is in exact conformity with the difference of circumstances, there would be no preference at all. But, as has been pointed out before, what the section provides is that there shall not be an undue or unreasonable preference or prejudice." And it cannot be doubted that whether in particular instances there has been an undue or unreasonable prejudice is a question of fact. In Palmer v. London and South Western Ry. Co., Erle, C.J., said: 'I beg to say that the argument from authority seems to me to be without conclusive force in guiding the exercise of this jurisdiction; the question whether undue prejudice has been caused, being a question of fact depending on the matters proved in each case.' In Denaby Main Colliery Co. v. Manchester, &c., R. Co., when it was before the Court of Appeal, not in the action brought by the Denaby company against the railway company, but on an appeal arising out of the proceedings before the Railway Commissioners, Lord Selborne, then Lord Chancellor, said at p. 441 : They gave a decided, distinct, and great advantage, as it appears to me, to the distant collieries. That may be due or undue, reasonable or unreasonable, but under the circumstances is not the reasonableness a question of fact? Is not it a question of fact and not of law whether such preference is due or undue ? Unless you could point to some other law which defines what shall be held to be reasonable or unreasonable, it must be and is a mere question, not of law, but of fact.' The Lord Chancellor there points out that the mere circumstance that there is an advantage does not of itself show that it is an undue preference within the