on lumber from all of these origins. Commodity rates, and particularly those applying on lumber, however, are affected by considerations different from those governing the class-rate structure.

To eastern territory lumber moves at the same rates from Long Bottom and origins in Group 2, and such lumber may move west via the same main-line junctions as those through which lumber is transported from Long Bottom to destinations in central territory at the rates here assailed. Lumber to eastern destinations also moves directly east from Long Bottom and the other C. & O. origins, however, and there is nothing of record to indicate how these rates are constructed. The fact that these origins are not similarly treated as to eastbound and westbound traffic has but little bearing on the reasonableness of the rates from Long Bottom. Similarly there is little force in complainant's evidence that shipments of lumber destined to central territory from Glade, W. Va., and Long Bottom move eastwardly in the first instance to Hinton, W. Va., distances of 17.3 and 6.7 miles, respectively, for the purpose of assembling cars into train lots. Thereby a longer haul results from Glade, taking the Group 2 basis, than from Long Bottom taking the Group 1-A basis. However, the fact that carriers may for operating reasons so arrange their train movements does not affect materially, if at all, the question of the reasonableness of the Group 1-A rates assailed for application from Long Bottom.

The record contains numerous comparisons of rates and earnings from specified points on lines other than the C. & O. in the same general territory as Long Bottom to representative destinations for comparable distances. Complainant instances rates from Richwood and Clarksburg, W. Va., on the Baltimore & Ohio, and Bemis, W. Va., on the Western Maryland to Detroit, Chicago, and Columbus. These rates show somewhat lower ton-mile earnings than rates from Long Bottom to the same destinations. However this showing is offset by the evidence of rates instanced by defendants applying from Devon and Welch, W. Va., on the N. & W., Mullens, W. Va., on the Virginian and Knoxville and Etowah, Tenn., on the Louisville & Nashville, to the same and other destinations, which, with few exceptions yield higher ton-mile earnings than rates from Long Bottom to the same destinations.

The record does not support a conclusion that the rates assailed are excessive or improperly related to the rates from other points in the same producing territory.

We find that the rates assailed, in so far as they applied and apply within the United States, were not and are not unreasonable. The complaint will be dismissed.

APPENDIX

Comparison of rates and earnings on lumber from Long Bottom, W. Va., and origin groups to representative destinations

No. 21146

WATAB PAPER COMPANY . CHICAGO & NORTH WESTERN RAILWAY COMPANY

Submitted May 11, 1929. Decided September 18, 1929

Rates on sulphite wood pulp, in carloads, from Anacortes, Wash., to Sartell, Minn., found not unreasonable or otherwise unlawful. Complaint dismissed.

J. H. Krueger for complainant.

Walter D. O'Brien, D. F. Lyons, M. L. Countryman, jr., and Frederick D. McCarthy for defendants.

REPORT OF THE COMMISSION

DIVISION 3, COMMISSIONERS AITCHISON, TAYLOR, AND PORTER BY DIVISION 3:

Exceptions were filed by complainant to the report proposed by the examiner.

Complainant, a corporation, manufactures newsprint paper at Sartell, Minn. By complaint filed June 11, 1928, it alleges that the rates charged on sulphite wood pulp, in carloads, from Anacortes, Wash., to Sartell, were and are unreasonable, unjustly discriminatory, unduly prejudicial to complainant, and unduly preferential of its competitors located at points in Wisconsin and Michigan.1 We ⚫ are asked to prescribe reasonable rates for the future and to award reparation. Rates will be stated in cents per 100 pounds.

Sulphite wood pulp, hereinafter referred to as pulp, is manufactured from wood of the coniferous type, such as spruce and fir. It is produced extensively throughout the States of Washington and Oregon and British Columbia, Canada. This origin territory will hereinafter be referred to as the north coast. Pulp is used in the manufacture of newsprint paper and is worth from $40 to $50 per ton. It is not subject to damage in transit and moves in substantial volume. Complainant's shipments averaged 84,250 pounds per car. Anacortes is on Fidalgo Island in Puget Sound, north of Everett, Wash. It is served by boat lines operating on the sound and by the Great Northern. Sartell is on the Northern Pacific, 4.5 miles north of St. Cloud, Minn. Some of the shipments moved over the Great Northern to St. Cloud, thence over the Northern Pacific,

1 Representative competing points are Stevens Point and Appleton, Wis., and Manistique, Mich.

1

1,728 miles, and the other shipments moved by water to Seattle, Wash., thence over the Northern Pacific, 1,889 miles. The applicable rates are 60 cents over the former route and 58.5 cents over the latter, minimum 70,000 pounds. These rates are assailed as unreasonable but complainant does not question the propriety of the spread in the rates over the two routes.

The rate of 60 cents applies from numerous points on the north coast to an extensive destination territory known as Groups D, E, F, and G. Sartell is in Group F. Neither the average distances from the origin group considered to Sartell nor the average distances to any of the destination groups referred to are of record.

Prior to June 25, 1918, the rates on pulp from Anacortes and other pulp-producing points on the north coast were on the fir-lumber basis, namely, 45 cents to Group F and 55 cents to Groups D and E. The subsequent general increases and reduction destroyed the then existing parity. On June 25, 1922, upon complaints from the northcoast producers, that they were unable to meet competition with foreign pulp and that produced in the territory contiguous to the consuming markets, the carriers voluntarily established a rate of 65 cents from a few of the north-coast points to Groups D, E, and F. As the result of the general reduction of July 1, 1922, the pulp rates from the north coast, with the exception of those above referred to, became 68 cents to Group F and 83 cents to Groups D and E. On May 25, 1925, the 65-cent rate was established from Anacortes and the other north-coast points to all destinations in Groups D, E, F, and G. On April 1, 1928, the present rate of 58.5 cents was established from Anacortes to points in North Dakota and Minnesota, including Sartell, restricted to apply through the western gateways.. On September 1, 1928, the 65-cent rate above referred to was reduced to 60 cents and is now in effect.

Competitive commercial conditions are largely responsible for the present rate groups. Imported pulp from Sweden, moving through the Atlantic ports, is being received at Duluth, Minn., and Milwaukee, Wis., as well as at paper mills in Ohio, Indiana, Michigan.

1 Sixty-five miles has been added to the distance over the Northern Pacific for the water movement from Anacortes to Seattle.

Roughly speaking, the eastern boundary of Group D is the western bank of Lake Michigan, the Illinois-Indiana State line to the Ohio River, and the line of the Illinois Central to New Orleans. The western boundary begins at Ashland, Wis., and extends southward to the Iowa-Wisconsin State line, and follows the western boundary of the State of Illinois to East St. Louis, thence along the line of the Missouri Pacific to Little Rock, Ark., thence southward to the Gulf. The eastern boundary of Group E is the western boundary of Group D. The western boundary of Group E extends southward from Superior, Wis., thence southward via an imaginary line running east of St. Paul, Minn., Sioux City, and Kansas City, Kans.-Mo., and includes the remainder of Arkansas and Oklahoma. Group F lies between the Missouri River and Group E and includes Sioux City, Omaha, Nebr., and Kansas City. Group G embraces generally the States of Nebraska and Kansas.

Canadian pulp is also being shipped into this consuming territory. Furthermore, there is a substantial movement by water from the north coast to the Atlantic seaboard, thence by rail to Group C. Defendants state that the present 58.5-cent rate is too low and was established merely to enable the north-coast producer to meet competition.

Complainant contends that the rates assailed, namely 65 cents prior to April 1, 1928, and 58.5 cents on and subsequent thereto, are unreasonable to the extent they exceed 52 cents. In support thereof, it compares the rates assailed with the rates on lumber, the class C rates, and with the distance rates prescribed in Jessup & Moore Paper Co. v. B. & A. R. R., 122 I. C. C. 543. These comparisons will be discussed hereinafter in more detail.

Complainant contrasts the 58.5-cent rate with the rate of 60 cents in effect on pulp from the north-coast points to Eau Claire, Wis., a Group E point, and to Ladysmith, Stevens Point, Rhinelander, and Appleton, Wis., and Chicago, Ill., Group D points, and the per car, ton-mile, and car-mile earnings yielded by those rates. The distances range from 1,921 to 2,376 miles. As already indicated, the 60-cent rate is also in effect over the Great Northern and Northern Pacific from the same points of origin to Sartell. A further comparison is made with the rate of 70 cents to Alexandria, Ind., and Chillicothe, Ohio, in Group C,1 2,381 and 2,533 miles, respectively. The rates assailed are compared with the present rates on lumber from north-coast points to nine group points in Minnesota, Wisconsin, Illinois, and Ohio. The lumber rates are accorded more groups than the pulp rates, and increase more uniformly as the distance increases. Complainant urges that inasmuch as competition in the pulp industry is similar to that in the lumber industry, the rates on pulp should be graded in the same manner as the rates on lumber. The average ton-mile earnings yielded by the lumber rates are 6.8 mills, which are compared with average ton-mile earnings of 5.7 mills yielded by the pulp rates from the north-coast points to the same destinations. The latter are approximated 17 per cent less than the former. Therefore, as complainant points out, if the rates on pulp to Sartell were made 17 per cent less than the lumber rates to that point, the pulp rates would be 52 cents. In other words, complainant endeavors to apply a relationship resulting from averaging rates to several extensive groups, to an individual situation and thereby show unreasonableness in the latter rate. Such a comparison is of little probative value. Complainant also compares the minima of the two commodities and urges that because the minimum

1 Group C embraces most of Indiana and Michigan, except the northern peninsula, and the western part of Ohio.