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§ 436. “Shall Render Unlawful Any Rate.”

Strictly speaking, it would seem that there is nothing in the Constitution—except the provision of sec. 92 that inter-state trade shall be “absolutely free”—to render a rate, considered by itself, unlawful. Sec. 102 renders unlawful any preference or discrimination which is forbidden by the Parliament and which is adjudged by the Commission to be undue and unreasonable, or unjust to any State; but what may be forbidden by that section is not a rate, but a difference between rates. On this ground it has been held under the English preference clauses that there is no right of action for an overcharge, because the court cannot decide what the rate ought to be, but only that there is an undue difference between two rates. (Denaby Main Colliery Co. v. Manchester, &c., R. Co., 11 App. Ca. 97; Rhymney R. Co. v. Rhymney Iron Co., 25 Q.B.D. 146.) “Where there is a breach of the equality clause, no doubt you may sue to recover the difference on the basis that you can compel the railway company to pay you back anything which you have paid over what, for precisely the same service, they have charged to another. But under the Railway and Canal Traffic Act, as was pointed out in the House of Lords, the company have their option. They may put up one charge, they may put down the other.” (Per Lord Herschell, Phipps v. London and N.W.R. Co., 1892, 2 Q.B. at p. 248.)

When therefore a rate is complained of, and it is adjudged that in connection with another rate it constitutes an undue preference, the rate complained of is adjudged to be, not absolutely, but relatively, unlawful; to be unlawful on the assumption that the preference is not removed by the alteration of other rates. That is clearly the sense in which the prohibition contained in this section is intended. The debates, and the words of the section itself, show that this provision is meant as a qualification of the power to prevent preferences by a State, so far as they may be “necessary for the development of the territory of the State.”

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