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Prior to 1925 the rates from the Crescents to the Northwest were generally combinations of the local rates to and from Chicago. The local rates to Chicago were generally applied as proportional rates over the car-ferry routes to Milwaukee and other west-bank Lake Michigan ports, and the combinations via such ports were generally substantially the same as those applicable via Chicago. Joint rates applied, however, from Inner Crescent mines in eastern Kentucky to approximately 6 percent of the destinations in the Northwest, including the Twin Cities. In Cancellation of Coal Rates to Minnesota, 89 I. C. C. 573, the carriers proposed to cancel the joint rate of $4.86 then applicable from Inner Crescent mines in eastern Kentucky to the Twin Cities, leaving in effect the Chicago combination of $5.70. The Commission found this proposal not justified, but permitted an increase in the joint rate to $5.40. Following this decision, joint rates were established from the Crescent mines to the Northwest. These joint rates were not made applicable over the car-ferry routes, but in Ann Arbor R. Co. v. Baltimore & O. R. Co., 136 I. C. C. 578, division 3 required that the rates via west-bank Lake Michigan ports in connection with the car-ferry routes be on the same basis as via Chicago. Following the latter decision the rates via Milwaukee and Chicago have been equalized, except in a few instances in which, to points adjacent to Milwaukee, the Milwaukee combination is less than the joint rate applicable via Chicago, and a few other instances in which the joint rates to points in southern Wisconsin apply only via Chicago and are less than the combination rates applicable via Milwaukee.

As heretofore stated, the rate from the Inner Crescent to Chicago is $3.09, which rate also applies as a proportional rate over car-ferry routes to Milwaukee, 118 miles more distant, and the rate to the Twin Cities is $5.40. The rates to the destinations here involved are graded up from the Chicago and Milwaukee rates and down from the Twin Cities rate. To most of the destinations involved, the joint rates are equivalent to the combinations of the $3.09 proportional rate to Milwaukee and the local rates beyond, the latter originally prescribed by the Public Service Commission of Wisconsin for intrastate application on coal from west-bank Lake Michigan docks. The latter rates were constructed under a plan that permitted equalization of rates from the docks at Milwaukee, Sheboygan, Manitowoc, and Green Bay, except to points within a short distance of any one dock, and embodied a consideration of distances from all four ports to each destination. See Lake Dock Coal Cases, 89 I. C. C. 170, 197. The joint rates range from 29 cents to $1.13 less than the Chicago combinations. The differential of the Outer Crescent over the Inner Crescent is 20 cents to Chicago, Milwaukee, and most of

the destinations here involved, although to a few of the destinations the differential is but 15 cents.

To Zenda, the least distant destination, which is on the Milwaukee just north of the Illinois-Wisconsin State line and 67 miles north of Chicago, the rate from the Inner Crescent is $4.20, or $1.11 higher than the Chicago rate. To La Crosse, the most distant main-line point, an average of 272 miles from Chicago and 200 miles from Milwaukee, the rate from the Inner Crescent is $5.20, or $2.11 higher than the rate to Chicago and the proportional rate to Milwaukee. The $5.20 rate to La Crosse also applies to a rather extensive group in Wisconsin and Minnesota west and northwest of La Crosse. The following table shows the rates from the Inner Crescent to representative destinations on the Milwaukee, the distances, and the tonmile earnings, and indicates in a general way how the rates are graded:

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1 Average distance to Chicago 522 miles.

Average distance to Milwaukee 640 miles over car-ferry routes.
Combination on Milwaukee.

Between Chicago and southern Wisconsin border points, the rates grade up rather uniformly from $3.465 to points just beyond the Chicago switching limits, to $4.20 to Zenda, and to $4.27 to Beloit and Clinton Junction.

The underlying basis of the complaint is that the rate from this origin territory to Chicago is the yardstick for determining that the assailed rates are unreasonable. Complainants show that the assailed rates produce higher earnings for longer hauls than do the rates to Chicago; that the rate from the Outer Crescent to Chicago is 14 percent of the first-class rate to Chicago from Minden, W. Va., selected by them as a representative point in the Outer Crescent; and that 14 percent of the first-class rates to the destinations here involved would result in rates ranging from $3.64 to $4.84, in lieu of the present rates,

which range from $4.29 to $5.48. Chicago is the largest coal-consuming point in the country, consuming approximately 30,000,000 tons a year. This coal moves from the eastern fields over rail-lake routes as well as all-rail routes, and also from Indiana, Illinois, and western Kentucky fields. The rates to Chicago are highly competitive and cannot be considered as standards of reasonableness of rates maintained under other conditions. Eastern Bituminous Coal Investigation, 140 I. C. C. 3.

With respect to the through rates via Milwaukee, complainants assert that the components applicable from Milwaukee are made by an inflated distance scale. By this is meant that the scale originally prescribed by the Wisconsin commission for intrastate application from the west-bank Lake Michigan docks, and which also applies interstate, makes an inflated rate from Milwaukee, which appears to be the nearest port to most, if not all, of the destinations here considered. Complainants instance rates ranging from $1.20 to $2.19 from the Wisconsin ports to 12 of the destinations, to which the average distances from the ports range from 88 to 234 miles, whereas the distances from Milwaukee range from 42 to 196 miles. The rates to the 12 destinations average 113 percent of the Holmes & Hallowell scale" for the distances from Milwaukee and 81 percent of that scale for the average distances from the ports as a whole. Complainants contend that, in establishing through rates via Milwaukee, the components beyond that port should be based on the distances from Milwaukee, the nearest port, although that would ignore the fact that the rates to Milwaukee are the depressed Chicago rates extended to Milwaukee as proportional rates for hauls over 100 miles longer than to Chicago. As they desire no disturbance in the present equalization of rates through the Milwaukee and Chicago gateways, they also ignore the longer distances through the Milwaukee gateway.

The assailed Inner Crescent rates yield ton-mile earnings ranging from 6.31 to 7.62 mills for distances via Chicago ranging from 589 to 820 miles, and from 5.94 to 6.64 mills for distances via Milwaukee ranging from 678 to 853 miles. Those from the Outer Crescent, from which most of the coal moves, yield from 5.99 to 7.13 mills for distances via Chicago ranging from 659 to 890 miles, and from 5.54 to 6.32 mills for distances via Milwaukee ranging from 743 to 920 miles. The dock operators at the Wisconsin ports point out that they are the immediate and direct competitors of the all-rail shippers of coal at the assailed rates, and that they ship identically the same kind of coal as the all-rail shippers. They show that the average distance from

Prescribed in Holmes & Hallowell Co. v. Great Northern R. Co., 69 I. C. C. 11, on coal from Duluth, Minn., and related Lake Superior ports to Minnesota, South Dakota, and North Dakota.

the Pocahontas district, where most of complainants' coal originates, to 37 admittedly representative destinations, is 900 miles via Milwaukee; that the average of the rates to those destinations is $5.02, or 85 percent of the Holmes and Hallowell scale; and that the average of the rates from Milwaukee to the same destinations, $1.73, for an average distance of 112 miles, is 108 percent of the Holmes & Hallowell scale. If the rates sought by complainant be established, it is probable that like reductions would have to be made in the rates from Milwaukee and other west-bank Lake Michigan ports in order to preserve the existing relation of the dock operators with the shippers over the carferry routes. The dock operators assert that if corresponding reductions were not made in their rates they would be unduly prejudiced, and that the relatively small proportion of the southern Wisconsin business which they now enjoy would doubtless be lost to them.

As heretofore stated, the Milwaukee and the North Western are the principal destination lines. Of the 79 destinations specifically named in the complaint, 47 are local points on the Milwaukee, 14 local points on the North Western, 4 local points on the Illinois Central, and 14 common points. Of the latter, 13 are served by the Milwaukee, 10 by the North Western, 4 by the Illinois Central, and 2 by the Burlington. Of the 60 points served by the Milwaukee, only 11 are on the main line extending from Milwaukee to the Twin Cities, the remainder being on branch or secondary lines on which the traffic density is light, as compared with the main line referred to and with the line of that carrier through Iowa to the Twin Cities, over which most of the coal to the Twin Cities moves. All of the 24 points served by the North Western are on secondary or branch lines, on which the traffic density is very light as compared with the main line from Chicago and Milwaukee to the Twin Cities. Both the Milwaukee and the North Western are now being operated by trustees under section 77 of the Uniform Bankruptcy Act.

That the assailed rates have not occasioned any curtailment in the movement of coal from this origin territory is shown by the following:

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It will be noted that the movement from the Outer Crescent has materially increased since 1931, the movement therefrom in 1936

having been approximately 128 percent of that in 1931, and 122 percent of that in 1935. During 1935, the last year for which data are shown of record, but 131,819 tons of all kinds of bituminous coal were shipped from the Lake Michigan docks to southeastern and southwestern Wisconsin, while during the same year 476,026 tons moved all rail to the same territory from the southern West Virginia low-volatile districts alone. In addition to coal from the Crescents, practically all the complainants also sell coal from mines in Illinois, Indiana, and western Kentucky, but such coal is not of as high a grade as the low-volatile coal which comprises most of the shipments here considered, and must ordinarily be sold at a considerably lower price. The movement of domestic sizes of coal from the Illinois mines to this territory has declined substantially in recent years.

We find that the rates assailed were not and are not unreasonable. The complaint will be dismissed.

227 I. C. C.

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