No. 20450 NATIONAL STEEL BARREL COMPANY v. LOUISVILLE & NASHVILLE RAILROAD COMPANY ET AL. Submitted September 24, 1928. Decided August 15, 1929 1. Rates on iron or steel barrels or drums, in carloads, from New Orleans, La., to all destinations in southern territory, and certain destinations in Missouri and Illinois, and to Helena, Ark., found not unreasonable. 2. Rates from New Orleans, La., to certain destinations in Mississippi Valley territory found unduly prejudicial. Nonprejudicial basis prescribed. Reparation denied. L. F. Daspit for complainant. John T. Quisenberry and W. N. McGehee 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 and defendants replied thereto. Our conclusions differ somewhat from those recommended by him. Complainant, a corporation manufacturing iron or steel barrels or drums, hereinafter termed barrels, at New Orleans, La., alleges by complaint filed December 17, 1927, as amended, that the rates on barrels, in carloads, from New Orleans to all destinations in southern territory, and certain destinations in Missouri and Illinois, and to Helena, Ark., were and are unreasonable, unduly prejudicial, and unduly preferential of its competitors at St. Louis, Mo., East St. Louis, Chicago, and Granite City, Ill., Buffalo, N. Y., Pittsburgh, Erie, and Sharon, Pa., Detroit, Mich., Memphis, Tenn., Warren, Defiance, Toledo, Portsmouth, Niles, Cleveland, New Boston, and Youngstown, Ohio, and Milwaukee, Wis. Reasonable and nonprejudicial rates for the future are sought. At the hearing the allegation of undue preference and prejudice was confined to the rates applicable to points in Mississippi Valley territory, hereinafter called the valley. The American Solvents & Chemical Corporation filed an intervening petition but was not represented at the hearing. Rates will be stated in amounts per 100 pounds. Barrels constructed from steel, gauge 20 or thinner, are rated second class, minimum 10,000 pounds, in official and southern classification, and gauge 19 or thicker, fourth class in southern classification, and rule 26 in official classification, minimum in each 13,000 pounds, subject to rule 34. The type of barrels manufactured by complainant consists principally of 18 gauge and thicker, with a gallonage capacity ranging from 15 gallons upward. In a 40-foot car, 9 feet high, the type of car usually ordered for loading, from 220 16-gauge 55-gallon barrels to 1,000 19-gauge 15-gallon barrels are loaded. The weights of cars thus loaded exceed the minima and no complaint is made with respect to the minima or the class rates as such. From New Orleans to southern territory generally, barrels move on the class rates prescribed in the southern class-rate revision. From the alleged preferred points above named they also move on the class basis except to certain points in the valley, where commodity rates lower than the class basis are in effect. These commodity rates apply on barrels, any gauge, minimum 16,000 pounds, subject to rule 34. Class rates formerly applied on barrels from all origins to points in the valley. On April 1, 1922, rates from the alleged preferred points to the valley were revised in line with rates from St. Louis to destinations in the valley over routes east or west of the Mississippi River, whichever were lower, and to conform to the provisions of the fourth section. Since that date the lines serving that territory have endeavored to maintain on barrels the class basis as far as possible in conformity with the fourth section, not only as to points in the valley, but also as to adjacent points west of the Mississippi River. Following this revision the lines serving points west of the Mississippi River established rates thereto from St. Louis on the southwestern class D basis. This basis applied on traffic routed through the valley, and class rates to intermediate valley points were higher in some instances than those applicable to points on and west of the Mississippi River. To meet this situation the valley lines published commodity rates from St. Louis the same as the class D rates applicable over the southwestern lines from and to the same. points. Rates from the other alleged preferred points were related to those from St. Louis. Effective April 30, 1923, the southwestern lines revised their rates to the class C basis. A corresponding increase by the east-side lines in their commodity rates to valley points followed on June 15, 1923. On March 5, 1926, commodity rates were established by the southwestern lines to points on and west of the Mississippi River in line with the Memphis-Southwestern revision. The east-side lines serving the valley, by schedules filed to become effective July 25, 1927, proposed to increase their commodity rates from the river crossings and points in official territory so that they would not be less than rates from the same points of origin to the contiguous southwestern points. The schedules were suspended and subsequently found not justified, without prejudice to the filing of new schedules naming the proposed rates shown in the suspended schedules as applying on new iron or steel barrels, gauge 19 or thicker, for application on iron or steel barrels of any gauge, minimum 13,000 pounds, subject to rule 34. Barrels or Drums to Mississippi Valley, 139 I. C. C. 65. The establishment of rates in accordance with our suggestions therein would increase materially the commodity rates from the alleged preferred points. Complainant seeks rates to the valley on the basis of 37.5 per cent of the first-class rates. The commodity rate from St. Louis to New Orleans is 37.37 per cent, from St. Louis to Mobile 39.9 per cent, and from St. Louis to Memphis 46 per cent of the contemporaneous firstclass rates. The commodity rates from Chicago and Milwaukee to New Orleans are 38.1 and 36.6 per cent, respectively, of the first-class rates and from the other alleged preferred points are approximately the same percentage of first class as those from St. Louis and Chicago. To destinations other than those in the valley complainant seeks rates the same percentage of first class as the rates prescribed in the recent southwestern revision. Therein rates equivalent to 50 per cent of first class on drums, any gauge, minimum 14,000 pounds, subject to rule 34, and rates equivalent to 65 per cent of first class subject to minimum weights ranging from 9,000 to 16,000 pounds, according to the size of the car used, were prescribed. The fourthclass rates from New Orleans, prescribed in the southern class-rate revision are 55 per cent of first class. In an appendix hereto the fourth-class rates from New Orleans and the rates from the alleged preferred points to representative valley destinations are listed. It appears that where class rates are in effect from the alleged preferred points, other than St. Louis and Memphis, New Orleans has an advantage, when distance is disregarded, at every point. New Orleans has a similar advantage over St. Louis at 8 of 12 points shown where class rates are applicable from both points, St. Louis at 3 points and at the remaining point the rates are the same. Class rates apply from Memphis to 16 points; Memphis has an advantage in 9 instances and New Orleans in the remaining 7. The advantages referred to are due to the differences in distances from the respective points. The only point shown at which a commodity rate from an alleged preferred point is lower than the rate from New Orleans is at Memphis, where a commodity rate of 57 cents applies from St. Louis and a fourth-class rate of 78 cents from New Orleans. Defendants contend that the present class rates are reasonable for application on barrels from New Orleans; that commodity rates to points in the valley are now maintained because of competition with routes west of the Mississippi River, and will be increased to the level of the rates prescribed in the southwestern revision from St. Louis to points west of the river. Defendants refer to Cancellation of Commodity Rates, 140 I. C. C. 227, 239, wherein we found that respondents had justified their proposal to apply the fourth-class basis in lieu of two commodity rates in central territory. They compare the class rates applicable in southern territory on barrels with distance-scale rates or fixed percentages of class rates on other commodities in the same territory which were prescribed or approved by us in various proceedings. The comparison for distances of 100 and 200 miles follows: The earnings per car and per car-mile on barrels and drums are lower than on a number of other commodities such as rice, salt, lard, lumber, molasses, and coffee, moving in volume from New Orleans to the same destinations. Considering all of the facts, we are not convinced that the class rates assailed on this traffic produce excessive earnings. Some of the defendants participate in rates from both New Orleans and the alleged preferred points to nearly all destinations in the valley. The volume of movement from the alleged preferred points or from complainant's plant to these destinations is not shown. The division manager of complainant's plant at New Orleans testified that the demand for barrels is such that shipments are made from all the producing points, regardless of the transportation expense and it does not appear that complainant has lost sales or been forced to shrink its selling price to any point in the valley because of the alleged freight-rate advantage of its competitors. Since the class rates from all the points considered to the valley are on the distance scale basis prescribed in the southern class-rate revision, those rates on barrels from the alleged preferred points to the valley, which are less than the class basis, are relatively lower than from New Orleans, and to that extent unduly preferential of the former but no damage is shown to have resulted from such preference and prejudice. We find that the rates assailed were not and are not unreasonable; but that the rates from New Orleans to destinations in the Mississippi Valley are and for the future will be unduly prejudicial to New Orleans to the extent that they are a greater percentage of the firstclass rates between the same points than the percentage that the rates contemporaneously maintained or participated in by the same defendants on like traffic to those destinations from St. Louis, East St. Louis, Chicago, Granite City, Buffalo, Pittsburgh, Erie, Sharon, Detroit, Memphis, Warren, Defiance, Toledo, Portsmouth, Niles, Cleveland, New Boston, Youngstown, and Milwaukee contemporaneously are of the corresponding first-class rates. We further find that no damage has resulted to complainant from such undue prejudice. Reparation is denied. An appropriate order will be entered. APPENDIX Second and fourth class rates except where commodity rates indicated by an asterisk are in effect from New Orleans and alleged preferred points to representative Mississippi Valley destinations 1 Distances from St. Louis, Mo. Commodity rate applicable on barrels or drums, iron or steel, any gauge, minimum weight 16,000 pounds, subject to sliding scale for graduated minima. |