FOURTH SECTION APPLICATION No. 17035 PACKAGE SALT BETWEEN KANSAS POINTS Submitted August 16, 1937. Decided July 5, 1938 Authority granted, on conditions, to establish and maintain over interstate routes rates on package or bulk salt, in straight or mixed carloads, from certain producing points in Kansas to Kansas City, Leavenworth, Fort Leavenworth, Atchison, and Hiawatha, Kans., without observing the longand-short-haul provision of section 4 of the Interstate Commerce Act. L. E. Kipp for applicants. REPORT OF THE COMMISSION DIVISION 2, COMMISSIONERS AITCHISON, SPLAWN, AND CASKIE BY DIVISION 2: By this application, carriers parties thereto apply, among other things, for authority to establish and maintain, over interstate routes on salt, in packages or in bulk, in straight or mixed carloads, minimum weight 45,000 pounds, from Anthony, Hutchinson, Kanopolis, and Lyons, Kans., to Kansas City, Leavenworth, Fort Leavenworth, Atchison, and Hiawatha, Kans., rates the same as apply over intrastate routes from and to the same points, without observing the long-and-short-haul provision of section 4 of the Interstate Commerce Act. Relief was temporarily authorized by order No. 12936. Rates and differences in rates are in amounts per 100 pounds. In Salt Rates, 222 I. C. C. 375, division 2, among other things, authorized carriers parties to Agent L. E. Kipp's tariff I. C. C. No. A-2482 to establish and maintain over interstate routes, over which they have relief in class rates from and to the same points, on salt and salt compounds as described in that report, from and to the Kansas points named above, a rate the same as contemporaneously in effect from and to the same points over intrastate routes, but not lower than the existing rate of 15.5 cents. The relief granted was subject to the provisions, among others, that rates at higher-rated intermediate points shall not exceed rates constructed on the bases described in the report or 2.5 cents higher than the rates on bulk salt, in carloads, minimum 80,000 pounds, from and to the same points. and that it shall apply for a period of one year only from May 12, 1937, the date of the decision therein. The latter limitation was to enable applicants to conclude negotiations with the Public Service Commission of Kansas with a view to placing the intrastate and interstate rates on the same level. Additional temporary relief was granted later, as will hereinafter appear. In American Salt Corp. v. Aberdeen & R. R. Co., 220 I. C. C. 369, the Commission found that the rates on package salt, in carloads, from certain producing points in Michigan, Ohio, and New York to certain destinations in zones I and II in western trunk-line territory were unduly prejudicial to the extent that they exceeded rates on bulk salt from and to the same points by amounts greater than those by which package salt from Kansas producing points to the same destinations exceeded the rates on bulk salt from and to such points. To remove the undue prejudice, the carriers operating from Ohio and Michigan points proposed to reduce rates on package salt, in straight carloads, or in mixed carloads with bulk salt, minimum 45,000 pounds, to 5 cents higher than rates on bulk salt. For the same reason the carriers operating from Kansas and southwestern producing points, also proposed to increase rates to the same basis and to maintain rates to intermediate points in Kansas and southern Missouri made 2.5 cents higher than on bulk salt. Relief to establish rates on the revised basis, except to points in Kansas over interstate routes, was authorized by seventh supplemental order No. 12794, and carriers were authorized by fourth-section order No. 12936, until the effective date of the further order to be entered herein, to maintain a rate from and to the Kansas points the same as the rate contemporaneously in effect over intrastate routes, but not lower than 15.5 cents, and to maintain higher rates to intermediate points in zone I constructed on the basis described above. Under the proposed adjustment departures would occur at intermediate destinations on direct and indirect routes, of which the following examples are representative. (1) From Hutchinson to Kansas City, Kans., the distance over the direct route is 217 miles and the proposed rate is 15.5 cents, the same as over the slightly longer intrastate route of the Chicago, Rock Island and Pacific Railway Company (Frank O. Lowden, James E. Gorman, and Joseph B. Fleming, trustees). To Neva, Kans., and Kansas City, Mo., intermediate points on the direct route, 82 and 217 miles, respectively, from Hutchinson, rates of 18 and 22 cents will apply. (2) From Anthony to Hiawatha the distance over the direct route is 334 miles, and the proposed rate is 15.5 cents. The same rate would also apply over the line of the Missouri Pacific Railroad Company (L. W. Baldwin and Guy A. Thompson, trustees), 371 miles, or 11 percent circuitous. To Towanda, Baker, and Atchison, Kans., and Kansas City, Mo., intermediate points on the latter line, 78, 363, 331, and 284 miles, respectively, from Anthony, rates of 18, 19.5, 15.5, and 22 cents would apply. The lowest earnings shown are 8.4 mills per ton-mile, 18.8 cents per car-mile, and $69.75 per car from Anthony to Hiawatha over a route 371 miles in length and 11 percent circuitous. These rates are reasonably compensatory. The matter of intrastate rates on salt between Kansas points was before the Commission in American Salt Corp. v. Aberdeen & R. R. Co., supra, and at page 379 thereof it was said: The alleged preferred rates from Kansas producing points to Kansas destinations are maintained by order of the Kansas commission, and the record would not support an order under section 13 of the act respecting such rates. It is applicants' position that if complainants in that proceeding could not support an order under section 13, applicants could not do so in another proceeding and therefore relief should be granted free from the equidistant provision of section 4. We have found in the past that unless carriers show that they have exhausted their legal remedies to have disparities between interstate and intrastate rates removed, the fact that the intrastate rates are lower than the interstate rates pursuant to an order of the State commission, will not be recognized as a ground for fourth-section relief. See Live Poultry to Jacksonville, Fla., 196 I. C. C. 288. In these circumstances no basis appears for relief except upon the ground of circuity and it is mandatory that such relief be made subject to the equidistant provision. Applicants having circuitous interstate lines or routes will be authorized to establish and maintain over such interstate lines or routes from and to the points named, on salt as described in the application, in straight or mixed carloads, rates the same as those contemporaneously in effect from and to the same points over more direct intrastate routes, but not lower than 15.5 cents, and to maintain higher rates to intermediate points; provided that (1) rates to higher-rated intermediate points in zone I of western trunk-line territory shall not exceed rates constructed on the basis prescribed or approved in American Salt Corp. v. Aberdeen & R. R. Co., supra; (2) rates to other higher-rated intermediate points shall not be increased except as authorized by this Commission; (3) rates to any higher-rated intermediate point shall not exceed the lowest combination of rates subject to the act; (4) the relief herein authorized shall not apply over any line or route that is more than 50 percent longer than the direct intrastate line or route between the same points; and (5) the relief authorized shall be subject to the equidistant provision or section 4. All other and further relief prayed with respect to traffic herein considered will be denied. An appropriate order will be entered. No. 26052 BELLEFONTE CENTRAL RAILROAD COMPANY v. Submitted April 8, 1937. Decided July 5, 1938 1. Prescription of interstate through routes and joint rates over the Bellefonte Central Railroad from Chemical, Pa., via Tyrone, Pa., to destinations in official territory, found not to be necessary or desirable in the public interest. 2. By reason of the long-haul provision of section 15 (4) of the Interstate Commerce Act, the Commission may not prescribe through routes and joint rates on traffic originating at Chemical, Pa., over the Bellefonte Central Railroad via Tyrone, Pa., to points west of Tyrone. 3. Findings in the prior report, 216 I. C. C. 39, affirmed. Appearances as in prior report. REPORT OF THE COMMISSION ON RECONSIDERATION MILLER, Commissioner: On petition of complainant, this proceeding was reopened for reconsideration and reargument of all issues raised by the complaint which are set forth in the prior report, 216 I. C. C. 39. On argument, complainant elected to deal principally with the question of whether we are prohibited by the provisions of section 15 (4) of the Interstate Commerce Act from prescribing joint rates from origins in Pennsylvania in the vicinity of Chemical on the line of the Bellefonte Central Railroad Company, hereinafter referred to as the Bellefonte Central, over the line of that carrier to Tyrone and the lines of the Pennsylvania Railroad Company, hereinafter referred to as the Pennsylvania, to points beyond. Other issues were mentioned by it only incidentally. The Pennsylvania took the position that the application of section 15 (4) was well settled by the Supreme Court's decision in United States v. Missouri Pac. R. Co., 278 U. S. 269, colloquially known and hereinafter referred to as the Subiaco case. Its argument dealt principally with whether routes via Tyrone were or are necessary in the public interest and the reasonableness of divisions. The Bellefonte Central says "it is not the question here particularly whether these divisions are or are not adequate via Bellefonte." It is here principally, if not solely, interested in obtaining through routes and joint rates on lime and broken, ground, and crushed stone pro duced at plants 2, 3, and 4 miles from Bellefonte, Pa., hereinafter referred to collectively as being located at Chemical, over the Bellefonte Central to Tyrone and the Pennsylvania beyond, and divisions out of those rates sufficiently high to make it profitable for the Bellefonte Central to operate that portion of its line from State College to Tyrone. All facts of record are sufficiently set forth in the prior report and only those necessary to a clear understanding of this report will be repeated here. For many years the Bellefonte Central operated from Bellefonte 18 miles to State College, Pa. The Pennsylvania operated a branch line from Tyrone to Fairbrook, Pa. February 26, 1927, the Pennsylvania filed an application, under paragraph 18 of section 1 of the act, for a certificate of public convenience and necessity permitting abandonment of 18.26 miles of that branch from a point near Stover, about 2 miles from Tyrone, to Fairbrook. The Bellefonte Central intervened, representing that it was interested in acquiring the entire branch from Tyrone to Fairbrook. In Pennsylvania R. Co. Abandonment, 131 I. C. C. 547, division 4 permitted the abandonment sought, subject to the condition that the Pennsylvania sell the portion of the line authorized to be abandoned to any person or persons desiring to purchase it for continued operation and offering to pay therefor not less than its net salvage value, estimated to be $52,129. In Bellefonte Central R. Co. Construction, 145 I. C. C. 253, division 4 found that public convenience and necessity required the acquisition and operation by the Bellefonte Central of that portion of the branch abandoned by the Pennsylvania, the joint use by it of the Pennsylvania's terminal at Tyrone, and the construction of a line between Struble and Fairbrook to connect the Bellefonte Central's old line with the one to be acquired. Operation of this portion of the Bellefonte Central, hereinafter referred to as the Fairbrook branch, was commenced October 1, 1930. As now constructed, the Bellefonte Central is a single-track line 43 miles long extending from Bellefonte to Tyrone and connecting with the Pennsylvania at both termini. The Fairbrook branch has not been operated since February 1, 1933, when the Pennsylvania, at the request of the Bellefonte Central, placed an embargo on all shipments of freight to all stations thereon. Counsel for complainant on argument seeks to shift to the Pennsylvania the blame for the abandonment of operations on that branch. He says that the Pennsylvania is responsible, because it refused and refuses to establish through routes and joint rates on the lime and stone traffic from Chemical via Tyrone, and that unless such rates and routes are established "there is no purpose in opening that route." |