cent less than the straight rate from Cannon Falls to Chicago, and this is without justification. Second: The favorable location of Cannon Falls with reference to Minneapolis and Duluth and the competitive advantage to which the Cannon Falls dealer is entitled by reason of the route via Duluth, are neutralized to an extent by manipulation of billing at Minneapolis whereby Cannon Falls grain sold in Minneapolis can be reconsigned to Duluth under a substituted billing and the balance of a through rate, resulting in a less total charge from Cannon Falls to Duluth than the charge on a through shipment from Cannon Falls to Duluth. Third: The rate on rye, barley and other coarse grain from Cannon Falls to Louisville or East St. Louis is wrongfully higher than the rate on wheat between the same pcints. W. J. Donahower for complainant. REPORT AND OPINION OF THE COMMISSION. KNAPP, Chairman: This complaint, brought in the name of the Cannon Falls Farmers' Elevator Company, was submitted by the Railroad and Warehouse Commission of Minnesota, which has also undertaken the conduct of the proceeding on behalf of complainant and has been represented upon the hearing and in argument by the Attorney-General of that State. In the complaint unlawful prejudice and disadvantage are alleged to result from the defendants' adjustment of rates on grain from Cannon Falls and Minneapolis, Minn., to Chicago, Ill., and on rye from the same points to Louisville, Ky.; and this is denied by defendants. The complainant, a corporation, is engaged in the purchase and sale of grain at Cannon Falls, Minn., and the shipment of such grain therefrom to Minneapolis, Chicago, Louisville and other points. Cannon Falls is on a branch line of each defendant. On the Chicago, Milwaukee & St. Paul the Cannon Falls branch leads from Cannon Junction, near Red Wing, on the River Division, to Northfield, on the Iowa & Minnesota Division. The Iowa & Minnesota Division and the River Division both lead to Minne apolis. The distance from Cannon Falls east to Cannon Junetion is 17 miles, and from Cannon Junction northwest to Minneapolis 47 miles, making a total distance of 64 miles from Cannon Falls to Minneapolis via the River Division. The distance from Cannon Falls west to Northfield is 15 miles, and from Northfield north to Minneapolis 43 miles, or a total of 58 miles. Traffic from Cannon Falls to Chicago may go via either of the divisions above named, but it is understood that grain shipments usually take the shorter route via the River Division. The distance to Chicago (River Division) is 420 miles from Minneapolis and 390 miles from Cannon Falls. On the Chicago Great Western, Cannon Falls is intermediate between Red Wing and Randolph. It is 6 miles east of Randolph and 21 miles west of Red Wing. From Randolph the main line runs northerly to Minneapolis 42 miles. This gives a total distance of 48 miles by this line from Cannon Falls to Minneapolis. The distance from Minneapolis to Chicago is 430 miles, and from Cannon Falls to Chicago 394 miles. The mileage from Cannon Falls to Chicago is therefore 4 miles greater, and from Minneapolis 10 miles greater, by the Great Western, while from Cannon Falls to Minneapolis it is 10 miles less. It should also be observed that Cannon Falls is not on any direct or main line between Minneapolis and Chicago, or between Minneapolis and St. Louis, Louisville and other large markets. The rates per 100 pounds directly involved are: a rate of 15 cents on grain from Cannon Falls to Chicago; a rate of 711⁄2 cents on grain, other than wheat, from Minneapolis to Chicago; a rate of 7 cents on rye, barley and other coarse grain, and a rate of 8 cents on wheat, from Cannon Falls to Minneapolis; a rate of 21 cents on rye from Cannon Falls to Louisville; and a rate of 14 cents on rye from Minneapolis to Louisville. The rate on wheat from Minneapolis to Chicago is 10 cents. The rates mentioned are all per hundred pounds in carload lots. Besides the 712 cent rate on grain other than wheat, and the 10 cent rate on wheat from Minneapolis to Chicago, there is a local rate of 121⁄2 cents on all grain between these points, but in practice only the 712 cent and the 10 cent rates, which are called proportional rates, are used. On the River Division of the Chicago, Milwaukee & St. Paul the local rate is 1212 cents, the same as from Minneapolis, but from points on its line to Chicago via the Iowa & Minnesota Division, and from points on the direct line of the Chicago Great Western to Chicago, a higher rate of 15 cents to Chicago is charged. Still higher rates are in force to Chicago from points on the lateral lines of each company. This adjustment of rates from Minneapolis and intermediate points on the various lines to Chicago is based principally upon the following conditions: Competition via Duluth and other northern lake ports; that no grain originates at Minneapolis; that grain does originate at Cannon Falls and other shipping points in that section, and that practically none is shipped in to such points for reshipment in the form of grain. The rate into Minneapolis added to the proportional rate out to Chicago is in no case less than the rate to Chicago from any point intermediate between Minneapolis and Chicago. Some exceptions exist as to points near Minneapolis, where the rate to Minneapolis plus the rate of 712 cents from that point to Chicago gives a total rate from 12 cent to 212 cents less than the direct rate from the point of origin to Chicago. An instance of this kind is the rate on rye and other grain, except wheat, from Cannon Falls, which by combination on Minneapolis is 1/2 cent less than the direct rate to Chicago. The 15 cent rate from Cannon Falls to Chicago is claimed by defendants to be a reasonable charge for the transportation, and no direct testimony to the contrary has been submitted. The proportional rate of 72 cents from Minneapolis to Chicago is forced by the competition of lines leading to Duluth and other lake ports and the competition of lake lines to Chicago, Buffalo and other eastern points; and even with that low rate in effect on the all-rail lines the bulk of the grain goes via rail to northern lake ports and the lakes to destination. While not distinctly shown in this record, the Commission understands from frequent investigation that the rate to and via Chicago and the lakes to the east, say Buffalo, must meet the rate via Duluth and the lakes; and of course the all-rail lines via Chicago, as well as to Chicago, must adjust their rates with reference to those in effect by rail and lake. It also results that rates from all points of shipment, including Cannon Falls, to Chicago are affected by the rates to and via Duluth. The Railroad and Warehouse Commission of Minnesota has exercised its authority over the rates from Minnesota points to Minneapolis and Duluth. The result of that action and of the rates fixed by the carriers, by voluntary action or otherwise, on interstate hauls to Chicago, is such that in numerous instances the combined rates from Minnesota points to Minneapolis and from Minneapolis to Chicago are as low as the direct rate to Chicago. The defendant and other railway companies are also interested in maintaining the competition of the Minneapolis market, and it is not intended to find that the result above stated is due entirely to the action of the Minnesota Commission. In some cases, of which the above-cited rate from Cannon Falls is an example, the combination on Minneapolis is less than the direct rate to Chicago. Much grain is bought at Minneapolis in the winter months and stored for shipment during the season of navigation, and it appears that in all seasons grain is bought and sold in Minneapolis upon the basis of rail and lake transportation charges. North of a line drawn northwesterly from Minneapolis to or near Breckenridge, Minn., the rates on grain from all producing points to Minneapolis and Duluth are the same. From points south of that line and from points on lines in South Dakota they are lower to Minneapolis than to Duluth. Grain from that region may be shipped to Minneapolis at the local rate and then the same or other grain reshipped from Minneapolis to Duluth at the balance of the through rate. Such balances of through rates appear to range from 2 to 5 cents.. In the testimony they are said to average from 3 to 4 cents. The local rate between Minneapolis and Duluth is 72 cents, but this rate is never used. A proportional rate of 5 cents is applied instead on all grain not shipped on the balance of a through rate. The balance of the through rate from many points equals the 5 cent proportional. From points on the line of the Chicago Great Western in Minnesota it appears from tariffs on file that the through rate in all cases equals the local The to Minneapolis and the 5 cent proportional to Duluth. defendants are not the only carriers of grain to Minneapolis, and the Chicago Great Western has no line from Minneapolis to Duluth. The Chicago, Milwaukee & St. Paul does, however, participate in this reconsigned grain traffic between Minneapolis and Duluth. Minneapolis, as the largest milling center in the United States, consumes large quantities of grain. This tends greatly to the accumulation of expense bills, and therefore it is entirely practicable, by substitution of billing, to secure lower through rates on grain reconsigned from that point to Duluth than the established tariff rate on a through shipment from the actual point of origin. In other words, grain from Cannon Falls sold in Minneapolis may, by the use of billing from a more distant point of shipment, be carried from Minneapolis on a 3 cent balance of a through rate instead of the 5 cent proportional applying on Cannon Falls grain from Minneapolis to Duluth, thereby reducing the established charge 2 cents per 100 pounds. For example, a through shipment of rye from Cannon Falls to Duluth takes a rate of 12 cents, based upon 7 cents to Minneapolis and 5 cents from Minneapolis, whereas if Cannon Falls rye is reconsigned at Minneapolis under the balance of a through rate, as above indicated, the total charge from Cannon Falls to Duluth is only 10 cents. To that extent the Cannon Falls shipper is prejudiced and the Minneapolis dealer is favored in reaching eastern markets via Duluth. The Cannon Falls shipper is also deprived of whatever effect a 10 cent rate to Duluth would have, if in force, upon his direct rate from Cannon Falls to Chicago. The same situation results at all points from which grain can be carried to Minneapolis and there reconsigned under substituted billing at a balance of a through rate less than the actual charge on a through shipment from such point to Duluth. There is no provision in the tariffs of roads to Minneapolis and from that city to Duluth which authorizes the practice of applying the balance of a through rate, and if there were it would apparently be impracticable to prevent the substitution of billing and the resulting application of a low balance of a through rate to grain which would otherwise take the 5 cent |