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New York, Chicago and St. Louis Railroad Company on petroleum coke from Toledo 17.8 percent, and from Lima 16.9 percent; rates of the Baltimore and Ohio Railroad Company on petroleum coke from Lima 16.9 percent, and from Cincinnati 19.6 percent; and rates of the Alton Railroad Company on petroleum coke from Lockport 16.4 percent. The majority of these rates were made to meet water competition and were published with expiration dates, but some of them are restored annually upon the opening of lake navigation.

The following rates applicable to Massena are compared by defendants with the assailed rate of $6.40, equivalent to 32 cents per 100 pounds:

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We find that the assailed rate was, is, and for the future will be, unreasonable to the extent that it exceeded, exceeds, or may exceed $5. To the rate herein prescribed may be added the general increases authorized by the Commission on October 19, 1937, as modified by those authorized on March 8, 1938. We further find that complainant made shipments as described and bore the transportation charges thereon; that it has been damaged thereby in the amount of the difference between the charges borne, exclusive of emergency charges, and those which would have accrued at the rate herein found reasonable; and that it is entitled to reparation, with interest. Complainant should comply with rule V of the Rules of Practice, and may include in the statement shipments which have moved during the pendency of this proceeding, accompanied by proof in affidavit form that it made such shipments and bore the charges thereon.

An order for the future will be entered.

227 I. C. C.

HALLET & CAREY CO. v. CHICAGO, ST. P., M. & O. RY. CO. 457

No. 27864

HALLET & CAREY COMPANY ET AL. v. CHICAGO, ST.
PAUL, MINNEAPOLIS & OMAHA RAILWAY COMPANY
ET AL.

Submitted March 30, 1938. Decided May 19, 1938

Rate on wheat, in carloads, from Sloan, Iowa, to Minneapolis, Minn., found
not to have been unreasonable or in violation of the aggregate-of-inter-
mediates provision of section 4 of the Interstate Commerce Act. Complaint
dismissed.

Frank B. Townsend and W. J. Vosika for complainants.
P. F. Gault for defendants.

REPORT OF THE COMMISSION

DIVISION 4, COMMISSIONERS MEYER, PORTER, AND MAHAFFIE BY DIVISION 4:

No exceptions were filed to the report proposed by the examiner. Complainant, Hallet & Carey Company, is a corporation in the grain business for itself, and as a commission merchant, at Minneapolis, Minn. Complainants, Bertel M. Stoddard and Farmers Cereal Company, are respectively an individual and a corporation buying and selling grain at Sloan, Iowa.

By complaint filed September 22, 1937, it is alleged that the rate of 18 cents per 100 pounds on 24 carloads of wheat shipped from Sloan to complainant, Hallet & Carey Company at Minneapolis, between July 15, 1935, and September 9, 1935, inclusive, was unreasonable and in violation of the aggregate-of-intermediates provision of section 4 of the Interstate Commerce Act. An informal complaint covering the same shipments, and containing the same allegations as the formal complaint, was filed on December 21, 1936, and closed April 26, 1937.

Complainants ask us to award reparation to the basis of a rate of 17 cents, which was the local rate from Sioux City, Iowa, to Minneapolis at the time the shipments moved. Rates are stated in cents per 100 pounds.

Sloan is on the line of the Chicago and North Western Railway Company, hereinafter called the North Western, 20 miles south of Sioux City. The shipments moved over the North Western to Sioux

A

City, thence over the line of the Chicago, St. Paul, Minneapolis and Omaha Railway Company to Minneapolis, 279 miles.

In Grain and Grain Products, 164 I. C. C. 619, 173 I. C. C. 511, the Commission prescribed a basis of rates for application on grain in the so-called western district, but the order was set aside by the Supreme Court in Atchison, T. & S. F. Ry. Co. v. United States, 284 U. S. 248. Thereafter, a further hearing was held and the Commission in its report, 205 I. C. C. 301, among other things, prescribed a local rate of 17 cents on wheat from Sioux City to Minneapolis, which was 1 cent lower than the rate of 18 cents prescribed in the first decision. The 17-cent rate became effective July 1, 1935. As Sloan is 20 miles more distant from Minneapolis than Sioux City, the carriers voluntarily established a rate of 18 cents from Sloan, and on September 23, 1935, they further reduced the rate to 17 cents. That rate was also made to apply from Sargent Bluff, Salix, Whiting, and Onawa, Iowa, points on the North Western south of Sioux City. The subsequent reduction of a rate does not in and of itself warrant a finding that the prior rate was unreasonable. Complainants allege that the assailed rate of 18 cents was in violation of the aggregate-of-intermediates provision of section 4 in that it exceeded the local rate of 7 cents to Sioux City plus a proportional rate of 8.5 cents beyond. The tariff containing the proportional rate expressly provided, however, that on shipments from Sloan, the rate would be subject as minimum to the local rate of 18 cents. Therefore, there was no violation of section 4.

Complainants contend that the assailed rate was prima facie unreasonable, because it was higher than the sum of the local and proportional rates above mentioned, and that the burden is upon defendants to prove that it was reasonable. However, the tariff provision above mentioned renders complainants' contention untenable. Complainants refer to the order in special-docket application No. 180988, wherein a rate of 18.5 cents charged on one carload of bulk wheat moving on July 16, 1935, from Onawa, Iowa, to Minneapolis, over the lines of the Illinois Central Railroad Company and the Minneapolis & St. Louis Railroad Company, was found unreasonable to the extent that it exceeded 17 cents, and reparation was awarded. Special-docket orders are based on agreed statements of facts and cannot be considered as precedents in formal proceedings. Atmospheric Nitrogen Corp. v. Norfolk & W. Ry. Co., 195 I. C. C. 747.

Complainants instance a rate of 16.5 cents from Sloan and Sioux City to Kansas City for approximately the same distances as from those points to Minneapolis. However, the circumstances under which that rate was established are not shown.

We find that the rate assailed is not shown to have been unreasonable or in violation of the aggregate-of-intermediates provision of section 4 of the act. The complaint will be dismissed.

FOURTH SECTION APPLICATION No. 16949

RAILS AND TRACK MATERIAL TO SOUTHWEST

Submitted April 18, 1938. Decided May 21, 1938

Authority granted, on conditions, to establish and maintain rates on railwaytrack rails and track material, in carloads, from Kansas City, Mo., Birmingham, Ala., Chattanooga, Tenn., Louisville, Ky., Pittsburgh, Pa., Cleveland and Cincinnati, Ohio, and points taking the same rates, to destinations in Arkansas, Louisiana, Oklahoma, and Texas, without observing the long-andshort-haul provision of section 4 of the Interstate Commerce Act. F. A. Leland for applicants.

REPORT OF THE COMMISSION

DIVISION 2, COMMISSIONERS AITCHISON, SPLAWN, AND CASKIE BY DIVISION 2:

Carriers parties to Agent J. R. Peel's tariff I. C. C. No. 2827 apply for authority to establish and maintain rates on railway-track rails and railway-track material, as described in sections A and B of item 10 in the above tariff, in carloads, from Kansas City, Mo., Birmingham, Ala., Chattanooga, Tenn., Louisville, Ky., Pittsburgh, Pa., Cleveland and Cincinnati, Ohio, and points taking the same rates, to destinations in Arkansas, Louisiana, Oklahoma, and Texas, as described in the application, without observing the long-and-short-haul provision of section 4 of the Interstate Commerce Act. Relief was authorized temporarily by order No. 12870. Rates are in amounts per net ton.

By fourth-section order No. 9500, as supplemented, entered in the southwestern rate revision, the carriers were denied relief to continue existing departures in class and commodity rates from, to, and between points in southwestern territory. This denial as to rates on rails and track material became effective September 3, 1936. The proposed rates are the same as those established on that date over the direct routes. Over the latter routes the rates conform to section 4. The purpose of the relief is to enable applicants to meet the competition of the direct routes without disrupting the existing destina

tion groups and at the same time to maintain the present higher rates at intermediate points on their lines. The proposed rates will be applied as maxima from intermediate origins to these destinations.

The following examples are typical of departures under the proposed adjustment. From Kansas City to Shreveport, La., the distance over the direct route is 560 miles and the rate on track material $6.50. This rate will be applied over a route composed of the lines of the Missouri Pacific Railroad Company to Hope, Ark., and the Louisiana & Arkansas Railway Company beyond, 725 miles, or 29 percent circuitous. Over the latter route to Cypress Junction and Boughton, Ark., 513 and 597 miles respectively, a rate of $6.70 will apply. The proposed rate to Shreveport over the above-described route will yield earnings of 9 mills per ton-mile and 40 cents per car-mile.1 Similarly, from Chattanooga to Hope, Ark., the distance over the direct route is 576 miles and the rate $6.90. This rate will be applied over the route of the Southern Railway Company to Memphis, Tenn., the Chicago, Rock Island and Pacific Railway Company to Wister, Okla., and the St. Louis-San Francisco Railway Company beyond, 844 miles, or 46 percent circuitous. Over the latter route to Pulaski, Ark., and Wister, 456 and 618 miles respectively, a rate of $7.10 will apply. The proposed rate to Hope will yield earnings of 8.2 mills per tonmile and 36.4 cents per car-mile.

It is requested that any relief granted be not subject to the equidistant provision, in order that existing groups may be maintained. When relief is based on the necessity of preserving proper grouping, the equidistant provision need not be imposed, but there is no adequate showing here that the present grouping is proper. On this record the relief sought is justified only on the ground of circuity, and therefore, imposition of the equidistant provision is mandatory.

Subject to the conditions and limitations hereinafter prescribed, we find that the proposed rates will be reasonably compensatory and that the relief prayed is justified.

Applicants having circuitous lines or routes will be authorized to establish and maintain on railway-track rails and railway-track material, in carloads, from Kansas City, Birmingham, Chattanooga, Louisville, Pittsburgh, Cleveland, and Cincinnati, and points taking the same rates, and also from intermediate points from which rates from the named points will be applied as maxima, to destinations in Arkansas, Louisiana, Oklahoma, and Texas, hereinbefore referred to, rates the same as those concurrently in effect on like traffic over direct lines or routes from and to the same points, but not lower than the present rates over the latter lines or routes, and to maintain higher

1 Car-mile revenues are based on average loading of 89,140 pounds.

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