No. 21702

CHAMBER OF COMMERCE, HASTINGS, NEBR., ET AL. v. CHICAGO & NORTH WESTERN RAILWAY COMPANY ET AL.

Submitted July 10, 1929. Decided October 9, 1929

Rate on green or green salted hides, pelts, skins, grease, and tallow, in straight or mixed carloads, from Hastings and Grand Island, Nebr., to Chicago, Ill., and Milwaukee, Wis., found unreasonable. Reasonable rate prescribed for the future and reparation awarded.

J. A. Little for complainant.

P. F. Gault, J. M. Souby, Kenneth F. Burgess, and Walter McFarland for defendants.

J. A. Little and E. P. Ryan for interveners.

REPORT OF THE COMMISSION

DIVISION 5, COMMISSIONERS LEWIS, BRAINERD, AND FARRELL BY DIVISION 5:

Exceptions were filed by complainants and interveners to the report proposed by the examiner, which was served upon the parties by stating it on the record at the close of the hearing. Defendants filed a reply brief. Our conclusions differ slightly from those recommended by him.

Complainants are the Chamber of Commerce of Hastings, Nebr., a corporation organized to promote the development of Hastings; L. Kully and G. Rosenberg, copartners, trading as the Hastings Hide & Fur Company; and Bolles & Rogers Company, a corporation, dealers in green and green-salted hides, tallow, and related articles, at Hastings. By complaint filed October 27, 1928, they allege that the rate charged on green or green-salted hides, pelts, skins, grease, and tallow, in straight or mixed carloads, since October 27, 1926, from Hastings to Chicago, Ill., and Milwaukee, Wis., was and is unreasonable. We are asked to prescribe a reasonable rate for the future and to award reparation. Rates will be stated in cents per 100 pounds. The Traffic Bureau of the Chamber of Commerce of Grand Island, Nebr., and John W. Lindsay, doing business as the Chicago Hide & Fur Company, at Grand Island, intervened on April 8, 1929, alleging that the rates on like commodities from Grand Island to Chicago and Milwaukee were and are unreasonable. The K. & R. Incorporated, a

corporation producing hides and tallow as by-products incident to its packing-house business at Hastings, intervened at the hearing, which was had on April 29, 1929. The interveners seek relief similar to that sought by complainants. Complainants and interveners will be hereinafter referred to collectively as complainants. Defendants were not represented at the hearing.

Hastings is on the Chicago, Burlington & Quincy, Chicago & North Western, Missouri Pacific, St. Joseph & Grand Island, and Union Pacific, 97 miles west of Lincoln, Nebr. Grand Island is located on the Chicago, Burlington & Quincy, St. Joseph & Grand Island, and Union Pacific. Grand Island is intermediate to Hastings over the Union Pacific, whereas over the St. Joseph & Grand Island, the converse is true.

Complainants purchase hides and the other commodities named in the complaint, hereinafter collectively referred to as hides, in lessthan-carload quantities in the surrounding territory in competition with buyers out of Lincoln, Omaha, and Norfolk, Nebr., Council Bluffs, and Sioux City, Iowa, and St. Joseph, Mo., concentrate them at Hastings and Grand Island and reship them to Chicago and Milwaukee in carload lots. Their principal competition, however, is with dealers at Lincoln and Norfolk, who are able to ship into the hide markets at lower rates. Hides are sold at a price based on delivery at Chicago. The rate on the outbound movement determines in a large measure the price which complainants can pay to the producer. The movement from Hastings is about 15 carloads a year, which average about 60,000 pounds per car. The record does not indicate the extent of the movement from Grand Island. The primary issue is one of relationship, the gravamen of the complaint being that the rates on hides from Grand Island and Hastings were and are unreasonable as compared with the corresponding rates from Lincoln and Norfolk.

Green-salted hides are rated fifth class in the western classification. The rates on hides and fifth-class commodities from Hastings and Grand Island to the destination points under consideration are generally the same. The complaining parties desire that they remain the same, and there is nothing in this record which justifies a disruption of that parity. The fifth-class rate from the complaining points to Chicago and Milwaukee is 66 cents, minimum 36,000 pounds. There is also in effect a commodity rate of 69 cents, but by virtue of an alternative provision in the tariff the fifth-class rate is applicable. Complainants contend that the applicable rate is unreaonable to the extent that it exceeds 47.5 cents.

In the following table the rates and earnings on hides from Hastings and Grand Island to Chicago and Milwaukee are com

pared with the rates and earnings on the same commodity from Lincoln, Omaha, and Norfolk to the same destinations. The shortline distances are also shown.

1 Minimum 36,000 pounds.

'Prescribed in Robinson v. A., T. & S. F. Ry. Co., 113 I. C. C. 280, 120 I. C. C. 452.

It is observed that, although the distances from the complaining points are greater than from the compared points, the earnings under the rates from the former points are substantially higher.

Complainants refer to Bismarck Asso. of Commerce v. C. & N. W. Ry. Co., 140 I. C. C. 289, in which we found, in effect, among other things, that the rate on green-salted hides and tallow from Bismarck, N. Dak., to Chicago was unreasonable to the extent that it exceeded 70.5 cents. This rate was arrived at by adding to the 47.5 cent rate from Fargo, N. Dak., to Chicago the difference between the fifth-class rates under the so-called Fargo scale1 from Bismarck and Fargo to Chicago, which was 23 cents. They contend that the finding in that case is tantamount to finding that the rate from Fargo is a maximum reasonable rate. The distance from that point to Chicago is 639 miles. Complainants introduced various exhibits tending to show that the transportation conditions incident to the movement from Fargo are not more favorable than from the complaining points to Chicago. That being true, they argue that the rate from the complaining points should not exceed the rate from Fargo. They point out that if the spread in the fifth-class rates under the Fargo scale for the distances from Lincoln and Hastings to Chicago were added to the commodity rate from Lincoln to the same destination the rate from Hastings would be 46 cents, and that if the spread resulting from the use of the Missouri River-Nebraska class rate scale were applied in the same manner as above the rate from Hastings would be 51 cents.

Complainants also refer to other fifth-class articles moving from and to the points under consideration at rates only slightly higher

1 Prescribed in Fargo Commercial Club v. A. & W. Ry. Co., 98 I. C. C. 691.

* Prescribed in The Missouri River-Nebraska Cases, 40 I. C. C. 201.

than those proposed, such as roofing and roofing materials, 48.5 cents, minimum 40,000 pounds, and buttermilk, 48 cents, minimum 36,000 pounds. These rates yield earnings of 27.8 and 27.5 cents per car-mile, and 15.4 and 15.3 mills per ton-mile, respectively.

In Robinson v. A., T. & S. F. Ry. Co., 113 I. C. C. 280, 120 I. C. C. 452, we found that the rates on green or green-salted hides, pelts, skins, greases, and tallow in straight or mixed carloads from Norfolk, Nebr., to Chicago and points taking the same rates were unreasonable to the extent they exceeded 48.5 cents, minimum 36,000 pounds. The short-line distance from Norfolk to Chicago is 578 miles. The average short-line distance from the complaining points to Chicago is 616 miles, or 38 miles greater. The record is persuasive that the rate assailed, measured by the usual standards of reasonableness, is upon an unduly high level. We are not convinced, however, that the prescription of a rate as low as that suggested by complainants is warranted.

We find that the rates assailed from Hastings and Grand Island, Nebr., to Chicago and Milwaukee were, are, and for the future will be, unreasonable to the extent they exceeded, exceed, or may exceed, 50.5 cents. We further find that complainants L. Kully and G. Rosenberg, and interveners K. & R., Incorporated, and John W. Lindsay, made shipments as described and paid and bore the charges thereon; and that they have been damaged thereby and are entitled to reparation, with interest, in the amounts of the differences between the charges paid and those which would have accrued at the rate herein found reasonable. Complainants and interveners should comply with Rule V of the Rules of Practice, and furnish proof by affidavit that they paid and bore the charges on any shipments which may have moved since the date of hearing. If defendants object to proof of that character, complainants and interveners may apply for further hearing.

An order for the future will be entered.

157 L. C. C.

No. 21545

BUCKEYE COTTON OIL COMPANY v. ALTON & SOUTHERN RAILROAD ET AL.

Submitted June 6, 1929. Decided October 9, 1929

Commodity rate charged on carloads of cottonseed-hull shavings shipped from Little Rock, Ark., to Melrose Park, Ill., between March 5 and December 18, 1926, found not to have been applicable, and applicable rate not determinable from the record. Complaint dismissed.

H. Ignatius for complainant.

A. B. Enoch, Geo. W. Holmes, and H. H. Larimore for defendants. REPORT OF THE COMMISSION

DIVISION 5, COMMISSIONERS LEWIS, BRAINERD, AND FARRELL BY DIVISION 5:

This case was presented under the shortened procedure. Exceptions were filed by complainant to the report proposed by the examiner.

Complainant, a corporation manufacturing cottonseed products, alleges, by complaint filed September 24, 1928, that the rate charged on 37 carloads of cottonseed-hull fiber or shavings shipped between March 5 and December 18, 1926, from Little Rock, Ark, to Melrose Park, Ill., was inapplicable. Refund of the alleged overcharges is sought. Rates will be stated in amounts per 100 pounds.

Melrose Park is within the corporate and switching limits of Chicago, Ill., and takes Chicago rates. The shipments moved over various routes, and charges were collected at a commodity rate of 39.5 cents. Complainant contends that the applicable rate was 35 cents. The question presented is wholly one of tariff interpretation. Prior to March 5, 1926, the rate on cottonseed-hull fiber or shavings from Litle Rock to Chicago was 39.5 cents. This rate was based upon the contemporaneous rate on cottonseed hulls, item 47-D of Agent Leland's tariff I. C. C. No. 1645 providing that:

"where the rate on Cotton Seed Hulls is the same as shown below in Column ▲, the rate on Cotton Seed Hull Fibre or Shavings will be that shown opposite, in Column B."

Item 22 of Agent Leland's tariff I. C. C. No. 1795, which contained the same provision as item 47-D, remained in effect throughout the