tions on the Clifton branch only. Rates are stated in cents per 100 pounds.

The Clifton branch extends in a northwesterly direction, from Lordsburg, N. Mex., on the main line of the Southern Pacific, to Clifton, Ariz., a distance of approximately 70 miles. The first 27 miles of the branch are within New Mexico. The remainder in Arizona. To Lordsburg and other New Mexico points as above indicated we prescribed a rate of 80 cents whereas to the Arizona destinations the rate prescribed was 70 cents. The rate assailed was 85 cents to all destinations on the branch including Lordsburg. Traffic originating at the origins here concerned destined to Arizona destinations on the Clifton branch must move through Lordsburg and the other New Mexico points located on that branch. The distance from Los Angeles to Clifton, which is the principal destination on the branch, is 734 miles. The average distances to Arizona and New Mexico destinations are shown in the original report as 507 and 802 miles, respectively.

Upon further consideration of the record we find that the rates from southern California to Arizona destinations on the Clifton branch of the Southern Pacific Company for the future will be unreasonable to the extent they exceed or may exceed 80 cents on refined oils, and on distillate to the extent they exceed or may exceed 80 per cent of the rates prescribed on refined oils. Our previous conclusions are modified accordingly and an appropriate order will be entered.

EASTMAN, Commissioner, dissenting:

The modification of our previous findings which the majority make in this report on reconsideration will result, in my opinion, in wholly unjustifiable discrimination against the Clifton coppermining district. This district in Arizona is reached by a branch line of the Southern Pacific, and Clifton is 734 miles from Los Angeles. Globe and Miami, which are centers of competing coppermining districts in Arizona, are reached by another branch line of the Southern Pacific, and are 739 and 750 miles, respectively, from Los Angeles. The rate on petroleum products from Los Angeles to Globe and Miami is to remain at 70 cents, but under the modified finding and order the rate for the shorter distance from Los Angeles to the competing point, Clifton, is to be raised to 80 cents. The only reason offered for this discrimination is that the branch to Clifton extends from a point, Lordsburg, on the main line in New Mexico, and in our prior report we made the State line the boundary between the 70-cent and the 80-cent groups. If Clifton were to have a 70-cent rate, therefore, like Globe and Miami, the result would be a fourth-section departure at Lordsburg, which is in the 80-cent group.

In my judgment our arbitrary boundary line between the two groups and the fact that the Clifton branch happens to begin at a point just over this line in New Mexico are quite insufficient reasons for unjust treatment of Clifton. That mining district is plainly entitled to the same rate as the competing districts at Globe and Miami. All three districts ought to have either the 70-cent rate or the 80-cent rate. I choose the first alternative because of a conviction that the 70-cent rate is plenty high enough to include these branch-line points. Perhaps graded rates would be better than rates blanketed over such large groups, but that issue is not here. The fourth-section difficulty can easily be cured by changing the boundary line between the groups so that it will pass to the east of Lordsburg, and that is what I think should now be done.

I am authorized to say that CHAIRMAN LEWIS and COMMISSIONER CAMPBELL join me in this dissent.

157 I. C. C.

No. 21056

BEACON MILLING COMPANY, INCORPORATED, v. NEW YORK CENTRAL RAILROAD COMPANY ET AL.

Submitted June 19, 1929. Decided October 10, 1929

Transit rules, regulations, and practices of defendants New York Central and Lehigh Valley, applied to carload shipments of grain, grain products, and grain by-products, originating in central, western, and southern territories, milled in transit at Cayuga, N. Y., and shipped as mixed feed to destinations in eastern territory and New England found to result in unreasonable charges. Reasonable transit rules and regulations prescribed. Reparation awarded.

August G. Gutheim for complainant.

E. H. Burgess and Earle C. Calhoun for defendants.

R. V. Craig and W. E. Maloney for Buffalo, N. Y., Corn Exchange; C. R. Hillyer and John D. Mummert for John W. Eshelman & Sons; L. B. Greer for Tioga Empire Feed Mills, Incorporated; and R. M. Field for American Feed Manufacturers Association, interveners.

REPORT OF THE COMMISSION

DIVISION 4, COMMISSIONERS MEeyer, Eastman, AND WOODLOCK BY DIVISION 4:

Exceptions to the proposed report were filed by defendants and John W. Eshelman & Sons, intervener, and complainant replied thereto. The case was orally argued.

Complainant, a corporation manufacturing animal and poultry feeds at Cayuga, N. Y., alleges by complaint filed May 19, 1928, that the transit arrangements, rates, rules, regulations, and practices, applicable to shipments of grain and the products and by-products thereof from points of origin in central, western, and southern territories, milled in transit at Cayuga and reshipped to destinations in trunk-line and New England territories, result in aggregate transportation charges which are unjust and unreasonable, unjustly discriminatory, unduly prejudicial to complainant, and unduly preferential of its competitors at Lancaster and York, Pa., Buffalo, N. Y., Toledo, Ohio, Chicago and Peoria, Ill. We are asked to prescribe reasonable and nonprejudicial transit rules and regulations for the future and to award reparation. An informal complaint covering this subject was filed by complainant July 26, 1927.

Complainant's mill is on the New York Central and is also served by the Lehigh Valley under a switching arrangement. The transit rules and regulations complained of are published by these two carriers, which are the principal defendants. The term defendants as hereinafter used is to be understood as referring only to these two lines.

Defendants' transit tariffs in force at Cayuga provide in substance that on shipments of grain products and by-products, stopped or milled in transit there, the published rate on such products or byproducts, as the case may be, from original point of origin to final destination, minus the inbound transportation charges, shall apply. If there is no published through rate from the original point of origin, the rate on the outbound commodity is that applicable "from intermediate basing point," plus the rate from original point of origin to the basing point on the inbound commodity actually transported between such points. If the outbound commodity consists of differently rated commodities, then the outbound charges are assessed on the basis of the rates on the highest-rated commodity in the car. Under the transit rules generally prevailing in central territory, the rate on the outbound commodity is that applicable to the inbound commodity from original point of origin to ultimate destination, less the inbound charges already paid, except that when the inbound commodity is grain or grain screenings the through rate to be applied on the outbound shipment is that applicable on grain products in effect when the grain or grain screenings originated.

Complainant's inbound shipments consist mainly of corn, oats, barley, and wheat originating in the West and at Chicago or Toledo, but include also numerous other commodities, such as cottonseed products, commonly listed as grain products, its inbound shipments averaging about 65,000 pounds per car. The mixed feed which it manufactures consists of grain by-products for the most part but may include also grain and grain products and sometimes cottonseed meal. This feed is shipped mainly to eastern and New England destinations in carloads averaging about 44,000 pounds. In official territory the rates on grain by-products are commonly somewhat lower than those on grain and grain products, but from gateway points, such as Milwaukee, Wis., and Chicago, where complainant secures much of its raw materials, the latter rates are lower than the by-products rates. Consequently complainant pays charges on its transited shipments which are generally higher than those which would be assessed if the stopping or milling in transit took place in central territory, where the charges are based on the rate on the inbound commodity, in the majority of instances on the grain prod

ucts rate. Complainant seeks to have the central-territory rule made applicable at Cayuga.

For example, the rate on corn, in carloads, from Milwaukee to Aquebogue, N. Y., is 37.5 cents1 and on grain products, 38 cents, but the rate on grain by-products from and to the same points is 40 cents. When the corn is converted into mixed feed consisting in whole or in part of by-products at Cayuga under the transit arrangement assailed, the charges on the outbound shipment are based on the 40-cent rate. Under the central-territory rule they would be based on the grain products rate of 38 cents. Complainant testifies that under the latter rule its charges would average about 1.54 cents per 100 pounds less than they now are. Since the margin of profit from the manufacture of mixed feeds is said to be only about 5 cents per 100 pounds, complainant states that the absorption of 1.54 cents is of serious consequence to it.

From interior points in central territory, the by-products rates are lower than those on grain and grain products as before stated. When its inbound raw materials originate at such points, the charges on complainant's outbound shipments are based on the rates on grain products, as in such instances these are commonly the highest-rated ingredients of its mixed feed, although the proportion of grain products in the feed appears usually to be much less than that of grain by-products.

Complainant sells its feed in competition with manufacturers at the points alleged in its complaint to be unduly preferred and particularly stresses its competition from Buffalo, where there are five or six manufacturers. All of these points have a more favorable basis of transportation charges under the central territory rule. Complainant points out that the hauls of its principal inbound raw materials are much longer than those of its product, mixed feed, which, so far as gateway points are concerned, is a higher-rated article, and contends that therefore it is unjust to base the aggregate transportation charge on the by-products rate rather than the grainproducts rate. Complainant argues that the difference between the trunk-line rule, which governs its shipments, and the central-territory rule, applied to its competitors, causes unjust discrimination and undue prejudice and preference.

Defendants state their theory of milling in transit to be that a miller at an intermediate point is entitled to the same basis of rates on the milled product as a competitor situated at the point of origin of the raw material, and this theory has been applied by the carriers generally in trunk-line territory, except at York and Lan

1 Rates are stated in cents per 100 pounds.