forth in the applications, to Mobile and Panama City, rates not lower than 30 cents, and to maintain higher rates to intermediate points on the direct routes, and from and to intermediate points on indirect routes; provided, that rates from and to such higher-rated intermediate points shall not be increased, except as may be authorized by this Commission and shall not exceed the lowest combination of rates subject to the act; provided further, that the relief authorized herein over indirect routes shall not include intermediate points of origin as to which the haul of the petitioning line or route from any such intermediate origin to Mobile or Panama City is not longer than that of the direct line or route from the more distant lowest-rated point to Mobile or Panama City, as the case may be; and provided further, that this relief shall not apply to lines or routes that are more than 50 percent longer than the short line or route between the same points. All other and further relief prayed will be denied.

An appropriate order will be entered.

234 I. C. C.

No. 28047

SWIFT & COMPANY ET AL. v. ALTON & SOUTHERN RAILROAD ET AL.

Submitted April 6, 1939. Decided July 19, 1939

Rates charged on carload shipments of earth (soil) from Manito, Ill., to Harvey, La., found to have been unreasonable. Reparation awarded.

Ross Dean Rynder for complainants.

Erle J. Zoll, Jr., E. A. Smith, Lawrence Chaffee, and G. Wehnert for defendants.

REPORT OF THE COMMISSION

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

Exceptions were filed by complainants and defendants to the report proposed by the examiner, and defendants replied to complainants' exceptions. We have heard the parties in oral argument. Our conclusions differ somewhat from those recommended by the examiner.

This complaint, filed June 20, 1938, as amended, asks for reparation on 62 carloads of material billed as earth (soil), shipped between June 23, 1936, and May 24, 1937, inclusive, from Manito, Ill., to Harvey, La., on which it alleges unreasonable charges were collected in violation of section 1 of the Interstate Commerce Act. By amendment permitted by order of August 30, 1938, an additional railroad, which had participated in certain of the movements, was named as a party defendant. None of the shipments handled by that road moved until December 1936, which is within 2 years. prior to the date of the amendment. Complainant, Swift & Company Fertilizer Works, the consignee of these shipments, ceased operations and was liquidated on December 31, 1937, and its corporate assets, including choses in action, were transferred to the parent corporation, complainant Swift & Company. Manito is 21.2 miles southwest of Peoria, Ill. Harvey is within the switching limits of New Orleans, La. The twelfth-class rate of 36 cents per 100 pounds or $7.20 a ton 1 was charged. On the 46 shipments which moved prior to January 1, 1937, an emergency

1

1 Rates herein will be stated in amounts per net ton unless otherwise indicated.

charge of 7 percent was added, bringing the total rate to about $7.70 during that period. Complainants seek reparation to the basis of a rate of $6.40 which had applied on fertilizer and fertilizer materials between the same points and had been collected on previous shipments of this same commodity billed as "peat humus."

The commodity comprising these shipments is a type of soil which, when dried and ground, is used by fertilizer manufacturers as a filler or conditioner and is added to the fertilizer mixture to aid in the free and uniform flow of the various fertilizing elements through the mechanical drills and other attachments used in applying the mixture to the soil. It contains approximately 3 percent of nitrogen and therefore has some fertilizing properties. It had long been sold and shipped as peat humus. As humus is included in the fertilizer list, the rate on fertilizer had been assessed. The consignor of this commodity had been endeavoring to secure a lower rate but encountered the opposition of the fertilizer interests to any disturbance of the adjustment on the articles in the fertilizer list. Late in 1935 the classification committee of the carriers approved a reclassification of this commodity as "earth (soil)", and the shipper began to invoice and bill its shipments under that description.

Earth (soil), in carloads, is rated twelfth class in the southern classification. The carload rating on humus, dry fertilizer compounds, and most of the materials in the fertilizer list is eleventh class. During the period of movement the eleventh-class rate between Manito and Harvey was equivalent to $8.20, and the twelfth-class rate $7.20, subject to the addition of the emergency charge of 7 percent prior to January 1, 1937. Effective March 30, 1938, these class rates became $9 and $8, respectively, as a result of the general increase authorized by us.

The fertilizer rate of $6.40 was that approved in 1929 in Fertilizer and Fertilizer Materials, 151 I. C. C. 613, wherein division 5 found not justified the proposal to increase to the full southern level the interterritorial fertilizer rates from central-territory points to the Gulf ports and points in the Mississippi Valley. The order merely required the cancelation of the proposed schedules without prejudice to the establishment of rates on the somewhat lower differential basis there found reasonable. Effective July 13, 1936, after these shipments had begun to move, billed as earth, defendants canceled the fertilizer commodity rates between these points. On January 20, 1938, following our approval of certain general increases on heavy basic commodities in the fall of 1937, the carriers were permitted to establish the southern level of fertilizer rates on traffic from northern producing points to the South. Had the $6.40 rate

not been canceled it would have become $6.65. A subsequent proposal to further increase these interterritorial fertilizer rates by 10 percent was found not justified, without prejudice to the establishment of rates not in excess of 10 percent over the former interterritorial basis. Fertilizer Between Official and Southern Territories, 232 I. C. C. 301. The suspended schedules were canceled June 8, 1939, and no further attempt has been made to revise these rates. The emergency charges in effect in 1936 were not authorized on fertilizers. The increased fertilizer rates permitted in January 1938 did not become effective until about eight months after the last of these shipments moved.

On June 21, 1937, after these shipments had moved, a commodity rate of $5.20, 12.5 percent of the first-class rate, was established on earth (soil), not otherwise indexed by name, in bulk, between these points. As increased to $5.72 by the general advance in the spring of 1938, it is still in effect.

Complainants do not ask for the $5.20 rate subsequently established on this traffic. They opposed the reduction of the rate below the fertilizer basis, but they contend that the $6.40 rate on fertilizer on the basis approved in 1929 is the maximum reasonable rate on these shipments.

The value of humus or earth (soil) is about $5 a ton, considerably lower than most of the fertilizer materials generally accorded the fertilizer basis of rates. At about the time of these movements the prices of the different fertilizer materials included in the list ranged from $3 to $130 a ton, mostly between $10 and $30 a ton. These shipments weighed from 80,300 to 102,120 pounds and averaged 95,608 pounds, as compared with the average loading of fertilizer and materials handled by the Illinois Central Railroad in 1936, 65,089 pounds. Over the route over which most of these shipments moved the charges produced car-mile revenue of 42.9 cents during the emergency-charge period and 39.7 cents thereafter. Under the fertilizer basis the earnings would have been 35.6 cents a car-mile on this traffic, and 24.2 cents on fertilizers, at the 1936 average loading. While the interterritorial fertilizer basis approved in 1929 was canceled between these points in July 1936, the rates on certain articles from and to the same general territories were continued on the fertilizer basis because of the requirements of outstanding orders. Thus, during the period of movement, rates on that basis applied to New Orleans on ammoniacal liquor, sulphate of ammonia, and tankage from Chicago, Ill., Milwaukee, Wis., and St. Louis, Mo., and other points in Illinois, Indiana, and Wisconsin and on dried blood from Chicago.

In a number of proceedings, determined prior to the movements here considered, the basis of rates approved in Fertilizer and Fertilizer Materials, supra, was prescribed on various fertilizer materials from Illinois and central territories to points in southern territory. In numerous instances reparation was awarded to that basis. The most recent of these is Wilson & Toomer Fertilizer Co. v. Chesapeake & O. Ry. Co., 210 I. C. C. 409, 215 I. C. C. 222. In three of these proceedings, International Agricultural Corp. v. Illinois C. R. Co., 153 I. C. C. 637; International Agr. Corp. v. Chicago & I. M. Ry. Co., 174 I. C. C. 507, 179 I. C. C. 359, 200 I. C. C. 513; and Farmers Fertilizer Co., Inc., v. Baltimore & O. R. Co., 190 I. C. C. 573, 200 I. C. C. 601, the fertilizer basis of rates approved in 1929 was prescribed on this very commodity, described as "peat humus," from Manito to points in Alabama, Georgia, and Florida, and reparation was awarded to that basis on shipments which moved since the 1929 revision of interterritorial rates.

Defendants contend that because of the change in the billing of this commodity from peat humus to earth (soil) in the latter part of 1935, they were virtually confronted with the movement from Manito of a new commodity, which was not entitled to a commodity rate and was properly charged the twelfth-class rate, the lowest rating in the southern classification. We cannot accept this reasoning. This commodity had moved from Manito for many years. The statute casts on defendants the continuing duty to establish just and reasonable rates, and they are not relieved from this responsibility by the action of their committee in reclassifying this commodity. Furthermore, about 6 months elapsed between the action of the committee and the movement of the first of the shipments on which reparation is sought.

We are unable upon this limited record to determine the propriety of the action of the carriers' committee in holding that this commodity was not humus as described in the fertilizer list but was properly embraced in the exceedingly broad description earth (soil). However, if that action is to be accorded any weight, it argues for a lower rate than on fertilizer, not a higher one. Such lower rate was subsequently established. We find no warrant in the facts for the increase of the rate during the period of movement to a basis higher than a proper rate on fertilizer, including humus, between the same points, as provided in Fertilizer and Fertilizer Materials, supra, and the rate as increased and charged was unreasonable.

We further find that the rates assailed were unreasonable to the extent that they exceeded $6.40 a net ton; that complainant, Swift & Company Fertilizer Works, received the shipments as described and