to be in the vicinity of $3.00 per car, although this depends upon a variety of conditions and is governed by no rule of uniform. application.

Until recently the Illinois Northern Railroad and the Chicago, West Pullman & Southern Railroad have both performed the service rendered by them upon this same basis. The maximum distance over which cars are handled by the latter Company is, as already seen, not in excess of four miles, and the charge of that Company was, until recently, $3.00 per car. The road has handled from ten to twelve thousand carloads per year, in addition to some less than carload business, and upon a $3.00 basis has been able to pay its operating expenses and show a net profit of about $4,000 per year. It was said in testimony that since its organization it had declared three dividends of ten per cent each upon its capital stock. We think and find that $3.00 per car for the service rendered by this Company is enough, and that anything above that is clearly exorbitant.

The charges imposed by the Illinois Northern Company have varied from $1.00 per car, the price named in its contract with the Santa Fe, to a maximum of $3.50 per car. The operations of this Company have uniformly shown a deficit. A statement filed upon the hearing covering the period between July 1, 1903, and February 29, 1904, showed a deficit of $12,000. It must be remembered, however, that this Company was organized for the purpose of acquiring and operating the seventeen miles of track within the private grounds of the McCormick Company, that these tracks form much the larger part of its total mileage, and that the expense of their maintenance and operation must be very considerable. There is nothing to show what the financial result from its operations would be if the McCormick Company paid the same sum for this service which it had previously expended when the tracks were owned and operated by it. Judging from the experience of the Chicago, West Pullman & Southern and from the charges which are ordinarily imposed for the performance of similar service under similar conditions in the vicinity, we think and find that $3.50 per car is a reasonable charge for the performance of these switching services, and that anything above that is unreasonable.

At the present time both of these railroads receive in many instances, not a switching charge, but a division of the through rate. Over nearly all lines reaching the Missouri River, these divisions apply, and are twenty per cent of the rate, with the Missouri River as a maximum. The rate on the farm machinery manufactured by the International Harvester Company to the Missouri River is 30 cents per hundred pounds, with a minimum of 20,000 pounds or at least $60 per car. The proportion of the Illinois Northern upon this traffic when intended for the Missouri River or beyond would, therefore, be $12.00 per car, as against a former maximum charge of $3.50 per car. When the destination is such that the rate is less than 30 cents per hundred pounds, the division would be correspondingly less, and, upon the other hand, if more than the minimum weight is loaded, the division might be greater. These divisions are allowed upon all traffic, both in and out, over the Illinois Northern and from other industries located upon its line, as well as the McCormick Company, although it appears that in some cases the movement is still on a switching basis, and it might well follow that with other commodities where the loading is heavy the division received by the Illinois Northern would be greater than $12.00 per car. Whatever has been said with respect to the Illinois Northern applies equally to the Chicago, West Pullman & South

ern.

The International Harvester Company owns these two railroads. Its officials are the officials of those roads in most instances. It absolutely controls the operations of the roads, as well as the routing of its own traffic. A large portion of its traffic is shipped to competitive points; that is to say, to points which may be reached from Chicago over more than one line of railway, and usually by several. While there was some little attempt at evasion, the testimony plainly shows that under ordinary circumstances the competitive traffic of the International Harvester Company and of these two railroads would not be given to a line which did not allow these divisions so long as any line was available which did allow them. In other words, if one line granted the division other lines must follow or they could not obtain the business.

It appeared that these divisions were first granted to the Chicago, West Pullman & Southern by the Wisconsin Central Railway in September, 1903. The Freight Traffic Manager of that Company testified that they were granted by him as a matter of justice; that it was a universal rule observed between connecting railroads to allow the originating line a division of the through rate, which was never less than twenty-five per cent; and that since he knew of no reason why this originating line should not have the benefit of that rule he had granted the twenty per cent division in question.

We are unable to accept this statement as representing the exact situation. There is in our opinion no analogy whatever between the Illinois Northern Railroad and the Chicago, West Pullman & Southern Railroad, and the connecting line which originates traffic under ordinary conditions. While these railroads may be railroads within the technical meaning of that term, while they may even fall within the definition of the Act to regulate commerce, they have none of the incidents of a railroad proper. They were constructed for the sole purpose of moving cars from various industries to railroads which may be termed railroads proper. That service is essentially a switching service. It has been performed for years by these railroads upen that basis. It is performed by most other railroads in this vicinity under similar conditions upon that basis. If the Chicago, West Pullman & Southern delivers a car to the Rock Island for delivery to the Burlington System, the Rock Island receives for that service a switching charge of $3.00 per car, although it transports the car some ten miles, as against a haul of three or four miles by the West Pullman road. Why should that road be allowed a division of $12.00 per car, leaving $9.00 for its service after payment to the Rock Island? The only difference which exists between the case of these two railroads and the case of other switching roads in Chicago arises from the circumstance that the International Harvester Company is the owner of these roads. When the Wisconsin Central substituted the division for the switching charge, it increased the compensation paid by it to the Chicago, West Pullman & Southern from two to three times. We find nothing in the location of the West Pullman

which calls for this; we find nothing in the financial condition of that road which required, nor in the financial condition of the Wisconsin Central which justified, any such gratuity. We do not for a moment believe that it was a gratuity. We think and find that this act sprang, not from motives of generosity or the dictates of justice, but from the desire and expectation to thereby obtain from the International Harvester Company traffic not otherwise obtainable. Corresponding divisions were subsequently granted by other competitive lines, because otherwise competitive business could not be obtained. We think and find that these divisions are not regarded by the carriers which grant them as a legitimate charge for the performance of this service, and that they do, in fact, in so far as they exceed a reasonable compensation for the performance of the service, amount to a direct preference in favor of the International Harvester Company.

The Elgin, Joliet & Eastern Railway and the Chicago, Lake Shore & Eastern Railway were considered together for the reason that the management of these two properties is identical. In fact, as related to this investigation, there seems to be no analogy between the railroads themselves. The Elgin, Joliet & Eastern is properly a belt road extending entirely around the City of Chicago from Waukegan upon the north to Porter, Indiana, upon the east. It has 205 miles of main track, owns 58 locomotives and nearly 3,000 cars. Its capital stock is $6,000,000, and its bonds $8,500,000. It is not owned by, so far as it appears, nor does it especially serve, any particular industry. It is not apparently involved in this proceeding, unless it may be by reason of its relation to the Chicago, Lake Shore & Eastern and its owners. Whatever the fact may be, nothing of that sort appears upon this record, and it is unnecessary to state the facts with reference to that property.

The Chicago, Lake Shore & Eastern Railway is a creature of the Illinois Steel Company. Its stock was entirely owned by that Company previous to the absorption of the Illinois Steel Company by the United States Steel Corporation, and it is now exclusively owned by the latter Company. The present Chicago, Lake Shore & Eastern Company seems to be the result of a con

solidation of previous companies, and the properties operated by it are partly owned and partly leased. Neither its previous history nor its present status in this respect very clearly appears, nor do they seem material. Its connection with the Illinois Steel Company is best understood by considering the extent and location of its various tracks, which are as follows: At South Chicago, 62 miles; at Joliet, 18 miles; at the Union Works of the Illinois Steel Company, 10 miles; at the North Works of that Company, 4 miles, and at Bay View, a suburb of Milwaukee, 18 miles. All the foregoing tracks are within the private limits of the plants of the Illinois Steel Company at these various points. In addition to these private switch tracks it has a main track extending from South Chicago to Indiana Harbor, a distance of six or seven miles, which connects with various railroad systems. It also has short lines extending from its various plants to a connection with the Elgin, Joliet & Eastern at various points. It leases certain trackage rights from the latter Company, by which it obtains a connection with substantially all the railroads entering Chicago, and between all its various plants, except the one at Bay View, between which and its other tracks there is, apparently, no connection over its own iron. It has 1,213 employes, 4,539 cars, and 70 locomotives. It will be seen, therefore, that a very large part, probably the largest part of the operations of this Company, consists in maintaining and operating the tracks within the various plants of the Illinois Steel Company.

The testimony indicates that the Chicago, Lake Shore & Eastern Railway has trackage rights over other railroads besides the Elgin, Joliet & Eastern. In the exercise of these trackage rights it handles large quantities of traffic between the several plants of the Illinois Steel Company, and also from the points of origin to those plants; as, for example, coal from the mine to the furnace. It was said that the quantity of traffic handled by this Company from point of origin to destination was very large. In so far as this traffic is interstate, the Railway Company publishes a tariff, and the Illinois Steel Company pays to the Railway Company the tariff rate so filed. For switching cars to and from the various plants of the Illinois Steel Company which