In all other respects the regulations for the transportation of dangerous articles herein referred to are and shall remain in full force and effect.

Owners or operators of cars, where construction is authorized herein, shall make semiannual inspection of the tanks and report their condition to the same parties as receive reports required by I. C. C. specification 103.

227 I. C. C.

No. 27765

BORDEN COMPANY ET AL. v. BALTIMORE & OHIO RAILROAD COMPANY ET AL.

Submitted April 8, 1938. Decided June 23, 1938

Interline rates on cream, in 10-gallon cans, in carloads, in passenger-train service from Browntown, Clintonville, Columbus, and Fond du Lac, Wis., to certain eastern destinations, found not unreasonable in the past, but unreasonable for the future. Reasonable rates prescribed for the future.

C. S. Decker and Harry C. Ames for complainants.

L. P. Day, K. A. Dobbins, G. F. Dyche, J. J. Fitzpatrick, J. E. Flansburg, P. F. Gault, A. H. Lossow, C. L. Taylor, and W. P. Tuller for defendants.

REPORT OF THE COMMISSION

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

Exceptions were filed by complainants to the report proposed by the examiner, defendants replied to the exceptions, and the proceeding was orally argued. We have reached conclusions differing from those recommended by the examiner.

Complainants are the Borden Company and its subsidiaries, producing cream and other milk products at Browntown, Clintonville, Columbus, and Fond du Lac, Wis. By complaint filed June 11, 1937, they allege that the rates on cream, in 10-gallon cans, in carloads, in passenger-train service from the above-named origins to certain eastern destinations were and are unreasonable. Complainants ask us to prescribe reasonable rates for the future and to award reparation on shipments moving since October 29, 1936. Rates and arbitraries will be stated in amounts per 10-gallon can, unless otherwise indicated. The origins are located in western trunk-line territory, 141 to 212 miles northwest of Chicago, Ill. The traffic moves over the lines of the western carriers defendant to Chicago, thence over the eastern lines, for total distances of from 609 to 1,228 miles. The cars containing the empty cans are returned over the same routes in the reverse direction under the assailed rates without additional charge.

1 Pittsburgh, Meyersdale, Harrisburg, Scranton, Pottsville, and Philadelphia, Pa., Buffalo, Elmira, Binghamton, South Edmeston, Antwerp, Albany, and Troy, N. Y., Cumberland, Baltimore, and Greensboro, Md., Wilmington, Del., Trenton and Newark, N. J., Springfield, Worcester, and Boston, Mass., and Providence, R. I.

Both the loaded and return movements are made in passengertrain service.

The cream is shipped sweet, is known as double or 40-percent cream, that is, with a 40-percent butterfat content, and is used at the eastern destinations chiefly for manufacturing into ice cream. It is shipped in 40-quart or 10-gallon cans. The cans weigh about 28 pounds each when empty and about 111 pounds when filled. The loading is usually the same as the minimum, namely, 200 cans per car. In loading the shipments the cans are not tiered. Over the top of the cans the shipper places a blanket of ice weighing from 5 to 6 tons per car, which, allowing for meltage, adds an average of about 2.5 tons to the weight of the shipment. The express refrigerator cars used in this service are capable of being moved with all other kinds of passenger-train equipment. They have a tare weight of from 65,400 to 67,900 pounds, as compared with 44,000 and 56,900 for box and refrigerator cars respectively, used in freight service, and represent a greater initial investment and entail greater maintenance costs than do the latter cars. On this traffic the elapsed time in transit for the loaded movement is about one-half of, and for the empty movement about the same as, that on perishable traffic moving in freight service. Telephonic and telegraphic advice is sent ahead to insure expeditious handling. Loss and damage claims on cream are negligible as compared with those on perishable traffic in freight service, due in part to the more careful loading and icing service performed by the shipper and in part to the more expeditious service performed by the carriers in connection with the former traffic.

The wholesale prices per can of this cream at the principal destinations ranged from $8 to $16 in 1934, $11 to $17 in 1935, $14.50 to $18.50 in 1936, and from $14 to $17 during the first seven months of 1937.

The rates assailed are combinations ranging from $1.215 to $1.725, composed of any-quantity commodity rates to Chicago of 43 cents from Clintonville and 39 cents from the other origins, which rates range from 75 to 78 percent of the so-called Beatrice scale, prescribed in Beatrice Creamery Co. v. Illinois Central R. Co., 15 I. C. C. 109, and carload commodity rates from Chicago, made on basis of the so-called C. F. A. scale, prescribed in C. F. A. Territory Milk and Cream Rates, 46 I. C. C. 601. A full discussion of the various milk and cream scales is set forth in Pet Milk Co. v. Boston & A. R., 206 I. C. C. 461, and need not be repeated here.

Complainants seek reparation and rates for the future ranging from $1.115 to $1.605, based on the C. F. A. scale for the through rate-making distances, plus 15 cents per can, which was the basis

prescribed by the Commission on like traffic from certain origins in the South and Southwest to eastern destinations in Pet Milk Co. v. Boston & A. R., supra, and by division 4 from Bruce and Cameron, Wis., to Philadelphia, Pa., in Abbotts Dairies, Inc., v. Minneapolis St. P. & S. S. M. Ry. Co., 216 I. C. C. 661. In the latter case, division 4 prescribed, effective October 29, 1936, for a distance of 1,178 miles, a rate per 46-quart, or 11.5-gallon, can of 178 cents, equivalent to a rate per 40-quart, or 10-gallon, can of 155 cents, representing the C. F. A. scale rate of 140 cents plus 15 cents per can. The 46-quart can is peculiar to the Philadelphia market. The carriers have voluntarily established rates made on the C. F. A. scale, plus 15 cents per can, from numerous other origins in the South and Southwest, but not from complainants' plants or other origins in Wisconsin. Complainants' shipping points here concerned are located in the same general origin territory as Bruce and Cameron, and are from 150 to 250 miles nearer Chicago than are the two points just named. The movement of this cream has fluctuated considerably in recent years. For example, to Boston, New York, and Philadelphia, the total movement from origins west of Pennsylvania, expressed in carloads of 200 10-gallon cans each, was 2,206 in 1931, 2,282 in 1932, 2,221 in 1933, 1,687 in 1934, 1,735 in 1935, and 1,666 in 1936. The total movement of this cream over the principal eastern line, in carloads, was 4,032 in 1929, 3,206 in 1930, 1,468 in 1936, and 1,261 during the period January 1 to October 15, 1937. During the period January 1, 1936 to July 31, 1937, the total movement, in carloads, from Wisconsin to eastern destinations was 1,178, of which only 69, or about 6 percent, moved from complainants' plants, 368 from Bruce and Cameron, and 741 from all other origins. Of the 69 carloads shipped by complainants, 13 moved to Antwerp, N. Y., 31 to Boston, Mass., 13 to Baltimore, Md., 8 to Newark, N. J., 1 to Philadelphia, Pa., and 3 to Springfield, Mass., yielding average earnings of $317.68 per car and 30.1 cents per loaded-car mile. The average earnings under the rates sought by complainants would be $293 per car, and 27.9 cents per loaded-car mile. The traffic from Bruce and Cameron all moved to Philadelphia, and consisted of mixed-carload shipments of milk and cream, with an average loading of 226 46-quart or 11.5-gallon cans, yielding at the prescribed rate of $1.78 on cream and the applicable rate of $1.70 on milk, average earnings of $400.65 per car and 33.7 cents per loaded-car mile. About half of the cars from Bruce and Cameron contained express shipments of butter yielding an additional revenue of about $73.90 per car.

The western factors of the assailed rates were established to meet truck competition, are the substantial equivalent of the fourth-class

rates to Chicago, and compare favorably with the all-commodity freight rates likewise established to meet truck competition. The through rates assailed approximate the first-class rates, compare favorably, transportation conditions considered, with the rates on numerous commodities moving by express, but are relatively higher than the rates on frozen cream in freight service and on fresh cream in passenger-train service prescribed by the Commission and voluntarily established by the carriers.

A considerably greater switching service is required on the freshcream traffic in the transfer between the passenger trains of the western and eastern lines at Chicago than is required in the transfer of cars in freight service or in the transfer of cars between passenger trains at other gateways. For the interchange service on the cream traffic at Chicago, the estimated average costs of the three westernlines range from $6.41 to $15 per engine-hour and from $29.67 to $46.80 per car, and of four of the eastern lines from $12.57 to $16.41 per engine-hour and from $16.19 to $29.72 per car, resulting in a total estimated average cost of interchanging the loaded and empty car of $67.70. These figures are based on the so-called SaurCoverston formula and are necessarily approximations, but they warrant the conclusion that the cost of this interchange service at Chicago is relatively high. However, this more expensive interchange service in connection with the Wisconsin traffic is offset at least in part by the fact that Wisconsin is more productive of shipments of cream than the South or Southwest. The cost of interchange at Chicago in connection with complainants' traffic is no greater than similar costs in connection with shipments from Bruce and Cameron. Shipments from both origin groups are handled through the same gateway and in the same manner.

Defendants contend that the C. F. A. scale is too low for distances beyond 600 miles, due to its diminishing rate of progression, and they propose a revised scale grading up much more rapidly and resulting in increases in the scale rates ranging from 0.5 cent for 609 miles to 14.5 cents for 1,228 miles. On January 24, 1938, they filed a petition asking that the orders in the prior proceedings, hereinabove cited, be modified accordingly, which petition was denied by the Commission.

Rates from complainants' plants based on the C. F. A. carload scale, plus 15 cents per can, will in our opinion promote the movement of the traffic here considered and be in line with other long-haul rates on cream which have been prescribed by the Commission and voluntarily established by the carriers.

We find that the rates assailed were not unreasonable in the past but that they are, and for the future will be, unreasonable to the ex