Complainants further assert that wrought-iron pipe is desirable traffic, loads heavily, does not require first-class equipment or expedited service, and that loss and damage claims are negligible. Wrought-iron pipe, although not manufactured in this territory to any great extent, is shipped between oil fields in Texas and Oklahoma in considerable volume. Defendants, on the other hand, contend that these shipments are an emergency movement, that such movements are never regular, and rarely, if ever, are repeated between the same origins and destinations.

Defendants show that in Jones & Laughlin Steel Corp. v. B. & O. R. R. Co., 96 I. C. C. 682, we prescribed in central territory a scale of rates on iron and steel articles which is 91.8 per cent of the contemporaneous fifth-class rate for a distance of 350 miles. In the 9702 case a commodity rate of 46 cents was prescribed on pipe for 350 miles. Defendants show that rate to be 56.4 per cent of a fifthclass rate of 81.5 cents for 350 miles prescribed in Memphis-Southwestern Investigation, 55 I. C. C. 515. Using the central territory percentage and applying it to the fifth-class rate prescribed in Memphis-Southwestern Investigation, supra, would produce a rate of 75 cents for hauls of 350 miles. Defendants further show a commodity rate of 61 cents on iron and steel pipe from St. Louis to Texas common points as compared to the fifth-class rate of 114.5 cents, the ratio of commodity rate to class rate being 53.5 per cent. Numerous other comparisons are shown from Chicago, Pittsburgh, and Kansas City territories.

Defendants lay particular stress upon the net railway operating income of Class I railways in the Southwest as compared to that of Class I railways in other territories. They show, for example, that the per cent of increase for six months of 1926 over 1925 for the southwestern region is only 1.44 as compared with 5.61 for the southern region and 12.97 for the central eastern region. They also show that the traffic density of Class I roads for the States of Illinois, Iowa, Missouri, Arkansas, and Louisiana is greatly in excess of that of Oklahoma and Texas.

Since the hearing, however, Prairie Pipe Line Co. v. A. W. Ry. Co., 132 I. C. C. 56, 146 I. C. C. 149, hereinafter called the Prairie case, has been decided. The reports therein embraced numerous complaints which collectively assailed rates and sought reparation on shipments of various articles, including pipe, between points in the general territory here considered; and in the report on reconsideration therein we found, among other things, that the rates assailed on pipe in those complaints were and are unreasonable, and awarded reparation to the extent that the rates charged exceeded, or may exceed, 35 and 38 per cent, for single and joint line hauls,

respectively, of the southwestern distance scale of first-class rates and differentials, wherever applicable, set forth in the Consolidated Southwestern Cases, 123 I. C. C. 203, 139 I. C. C. 535, 144 I. C. C. 630, hereinafter called the southwestern revision, subject to the methods of computation therein set forth and to the commodity descriptions, minimum weights, and ratings contemporaneously in effect in the western classification, distances to be computed over the shortest existing route (of which the originating carrier was the initial line) over which carload traffic could be moved without transfer of lading if the shipment was unrouted or if the route designated by the shipper did not exceed by 15 per cent or more the shortest existing route, as before stated, but if the designated route exceeded by 15 per cent or more the shortest existing route, use the distance over the route designated by the shipper unless the distance over the route of movement is less, in which case use the latter. In Magnolia Petroleum Co. v. Chicago, R. I. & G. Ry. Co., 151 I. C. C. 795, the circuity tolerance rule of the Prairie case just stated was modified to the extent that where the choice of routing was limited to that published in the governing tariff, and, regardless of the routing designated by the shipper, the shipment would nevertheless move over the same tariff route, the distance should be computed over the shortest existing route (of which the originating carrier was the initial line).

The rates assailed in the instant case, and the earnings thereunder, are clearly excessive, and as stated in the Prairie case would have been excessive under any just and reasonable adjustment. No convincing reasons are apparent which would warrant conclusions different from those reached in that case.

Upon consideration of the record in this case, and in the light of our decisions in the southwestern revision and in the Prairie case, we find that the rates assailed during the period November 2, 1924, to September 18, 1926, were and are unreasonable to the extent that they exceeded or exceed 35 and 38 per cent, for single and joint line hauls, respectively, of the southwestern distance scale of first-class rates set forth in Appendix 18 to the report in the southwestern revision, subject to the method of computation therein set forth and to the commodity descriptions, minimum weights, and ratings contemporaneously in effect in the western classification, distances to be computed as follows: In the case of unrouted shipments, and of shipments routed by the shipper over routes less than 15 per cent longer than the shortest existing route over which carload traffic could be moved without transfer of lading, as well as in instances in which the choice of routing was limited to that published in the governing tariff, use the shortest route (of which the originating

carrier was the initial line) over which carload traffic could be moved without transfer of lading; and in the case of shipments routed by the shipper over routes which exceed by 15 per cent or more the shortest existing routes over which carload traffic could be moved without transfer of lading, use the distance over the route designated by the shipper, unless the distance over the route of movement is less, in which case use the latter.

We further find that complainants made the shipments as described and paid and bore the charges thereon; that they have been damaged thereby in the amount of the difference between the charges paid and those which would have accrued at the rates herein found reasonable; and that they are entitled to reparation, with interest. Complainants should comply with Rule V of the Rules of Practice.

As the question of rates for the future on the commodity here considered is before the commission in the portions of the southwestern revision reopened for further hearing, no finding for the future is warranted here.

CAMPBELL, Commissioner, concurring:

My vote for this report is constrained by the latest decision in the Prairie case.

BRAINERD, Commissioner, concurring in part:

I concur in the finding by the majority that the rates charged on the shipments herein involved were unreasonable, but I can not agree with their finding as to the extent of such unreasonableness, and from that finding I respectfully dissent. The record, in my opinion, shows that said rates were unreasonable to the extent that they exceed the rates prescribed by us in the Memphis-Southwestern Investigation, which said rates were contemporaneously in effect in a territory wherein the transportation conditions have been adjudged on a record submitted during the period these shipments moved to be substantially similar.

157 I. C. C.

No. 20578

GLOBE SUPERIOR CORPORATION v. SOUTHERN RAILWAY COMPANY

Submitted February 18, 1929. Decided September 21, 1929

Rate on cotton piece goods, any quantity, from Pell City, Ala., to Commerce, Ga., prior to January 30, 1927, found unreasonable, but not unreasonable thereafter. Reparation awarded. Fourth-section relief denied.

J. D. Patterson, jr., and Joseph C. Colquitt for complainant.
W. N. McGehee and Charles Clark for defendant.

REPORT OF THE COMMISSION

DIVISION 4, COMMISSIONERS MEYER, EASTMAN, AND WOODLOCK

BY DIVISION 4:

Exceptions were filed by defendant to the report proposed by the examiner, and oral argument was had. Our conclusions differ somewhat from those proposed by the examiner.

Complainant, a corporation dealing in cotton piece goods, alleges by complaint filed January 23, 1928, that the rates charged on shipments of cotton piece goods, any quantity, from Pell City, Ala., to Commerce, Ga., were and are unreasonable, unjustly discriminatory, and in violation of the long-and-short-haul provision of section 4 of the interstate commerce act. A lawful rate for the future and reparation on shipments made since January 25, 1926, are sought. Rates will be stated in cents per 100 pounds.

The shipments moved over the Southern, 213 miles. Charges were collected prior to January 30, 1927, at the applicable fourth-class rate of 79 cents. On that date a commodity rate of 65 cents became applicable.

Pell City is on the main line of the Southern, 35 miles east of Birmingham, Ala. Commerce is on the branch of the Southern which extends from Lula, Ga., a main-line point, to Athens, Ga. It is 21 miles south of Lula and 18 miles north of Athens.

Complainant compares the rates assailed with a rate of 55.5 cents from Pell City, Alexander City, Birmingham, Huntsville, Montgomery, Selma, and Sylacauga, Ala., to Athens, the distances ranging from 231 to 309 miles. From Tallassee and Cottondale, Ala., to Athens, 228 and 303 miles, rates of 49.5 and 58 cents, respectively, are applicable. A rate of 61 cents is applicable from various

producing points in North Carolina to Commerce, for distances ranging from 276 to 419 miles. Complainant also instances a rate of 45.5 cents from Rock Hill, S. C., to Commerce, 207 miles.

The fourth-section violation alleged is based upon the fact that, as above noted, a rate of 55.5 cents is applicable from Pell City to Athens, to which latter point Commerce is intermediate. The rates to other intermediate points are also higher than the rate to Athens. These fourth-section departures are protected by an appropriate fourth-section application which was set for hearing in connection with this case. The rates on cotton piece goods throughout southern territory have never been revised in accordance with the provisions of the fourth section. The rates between competitive points such as Birmingham and Athens have their origin in depressed rates reflecting the so-called basing-point system, under which rates between competitive points were relatively lower than rates to, from, and between other points where such competition did not exist. Fourthsection departures also exist in the rates over the short line of the Seaboard Air Line from Pell City to Commerce, 205 miles.

In Patterson v. L. & N. Railroad, 269 U. S. 1, the Supreme Court of the United States expressed the view that it is prima facie unreasonable to charge more for a shorter than for a longer haul. However, the evidence submitted by defendant is sufficient to rebut this presumption.

Defendant compares the rates assailed with rates in effect prior to January 15, 1928, from Pell City and other Alabama points and Chattanooga, Tenn., as well as from Commerce and Athens to numerous points in Alabama, Georgia, Mississippi, North Carolina, and Tennessee. The compared rates are for hauls comparable with the haul from Pell City to Commerce and are on a substantial parity with the rates assailed. From Alexander City to Commerce, 241 miles, the rate was 80.5 cents; from Talladega, Ala., 208 miles, 78 cents; from Tuscaloosa, Ala., 303 miles, 84 cents; from Sylacauga, 237 miles, 80.5 cents; from Gadsden, Ala., 205 miles, 79 cents; from Anniston, Ala., 185 miles, 69.5 cents; and from Opelika, Ala., 198 miles, 86 cents. The class rates referred to by defendant were changed on January 15, 1928, in accordance with the recent southern class-rate revision. The present fourth-class rate from Pell City to Commerce is 58 cents.

In the southwestern revision and in Butler Bros. v. Aberdeen & R. R. Co., 151 I. C. C. 579, we found the third-class any-quantity rating reasonable on cotton piece goods in the Southwest and between the Southeast and the Southwest. The present third-class rate from Pell City to Commerce is 74 cents. The record does not support a finding that the rates assailed were unjustly discriminatory.