effectually to compete at the territorial border points. I find no reason of record why the carriers should not be permitted to compete for this traffic. Clearly the rates at the intermediate points are not unreasonable. They will not be rendered unreasonable by rates to socalled border points from southern origins made on the same basis as is now available from northern origins.

No. 12964

CONSOLIDATION OF RAILROADS

IN THE MATTER OF CONSOLIDATION OF RAILWAY PROPERTIES OF THE UNITED STATES INTO A LIMITED NUMBER OF SYSTEMS

Submitted October 16, 1936. Decided December 31, 1936

Consolidation plan, 159 I. C. C. 522, modified so as to assign the Fort Worth & Rio Grande Railway Company to system no. 17, Santa Fe, instead of to system no. 19, Rock Island-Frisco.

R. S. Outlaw, H. W. Davis, E. G. Nahler, and M. G. Roberts for petitioners.

FOURTH SUPPLEMENTAL REPORT OF THE COMMISSION

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

By report in this proceeding dated December 9, 1929, containing our plan of consolidation, 159 I. C. C. 522, we assigned the Fort Worth & Rio Grande Railway Company to system no. 19, Rock Island-Frisco.

The Atchison, Topeka and Santa Fe Railway Company, Gulf, Colorado and Santa Fe Railway Company, St. Louis, San Francisco and Texas Railway Company, and Fort Worth & Rio Grande Railway Company, hereinafter called the Santa Fe, Gulf Company, Texas Company, and Rio Grande Company, respectively, on September 16, 1936, filed a joint application under section 5 (4) of the Interstate Commerce Act, as amended, Finance Docket No. 11344, requesting authority, inter alia, for (1) the Santa Fe to acquire control of the Rio Grande Company by purchase of capital stock owned by the St. Louis-San Francisco Railway Company, hereinafter

ed the Frisco, (2) the Texas Company to purchase certain

terminal properties of the Rio Grande Company in or near Fort Worth, Tex., and (3) the Gulf Company to lease and operate all properties to be retained by the Rio Grande Company. The authority requested was granted by our report, order, and certificate decided concurrently, 217 I. C. C. 659.

The Santa Fe, the Gulf Company, and the trustees of the Frisco, on October 16, 1936, filed a petition in the above-entitled proceeding to modify our consolidation plan by transferring the Rio Grande Company from system no. 19, Rock Island-Frisco, to system no. 17, Santa Fe. The petition will be granted and the consolidation plan modified accordingly.

An appropriate supplemental order will be entered.

219 I. C. C.

No. 27210

CAST IRON PRESSURE PIPE INSTITUTE ET AL. v. ATCHISON, TOPEKA & SANTA FE RAILWAY COMPANY ET AL.

Submitted November 6, 1936. Decided December 31, 1936

Classification ratings and rates on Transite pressure pipe, in carloads, from Waukegan, Ill., to destinations in the three major classification territories, not shown to be unreasonable or to result in undue prejudice to cast-iron pressure pipe, or to the manufacturers and shippers thereof. Complaint dismissed.

E. M. Cole, J. K. Hiltner, and Harry C. Ames for complainants. W. S. Flint, R. J. Lehman, A. S. Knowlton, W. E. Prendergast, Robert W. Fyfe, E. K. Voorhees, E. A. Kearnes, and T. J. Minich for defendants.

R. J. Newberry for intervener.

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, and the issues were argued orally.

The above-named complainant is an unincorporated association of manufacturers of cast-iron pipe at points in Alabama, Tennessee, Virginia, New Jersey, Ohio, Colorado, Pennsylvania, and Massachusetts, of which complainant American Cast Iron Pipe Company of Birmingham, Ala., is a member. It is alleged that the failure and refusal of defendants properly to classify a commodity sold under the trade name of Transite pressure pipe to the ratings and rates on that commodity from Waukegan, Ill., to destinations in official, southern, and western classification territories result in undue preference of and advantage to the manufacturer of that commodity and undue prejudice and disadvantage to the manufacturers of cast-iron pressure pipe; also that the ratings and rates on Transite pressure pipe are "below a reasonable level," in violation of section 1 of the Interstate Commerce Act. We are asked to prescribe reasonable and nonprejudicial classification ratings on Transite pressure pipe.

Complainants neither manufacture nor deal in Transite pressure pipe. That product is manufactured and sold exclusively by the Johns

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Manville Corporation, Waukegan, Ill., which intervened in opposition to the complaint.

In substance the complaint is that Transite pressure pipe and castiron pipe, both of which are used for the conveyance, at high pressure, of water, other liquids, and gas, are competitive, and that the value and transportation characteristics of Transite pipe are such as to justify ratings not lower than those contemporaneously maintained on cast-iron pipe. The relief sought is opposed by defendants operating in official and southern territories, but is supported by those operating in western territory.

There was and is no rating in the three major classifications for Transite pressure pipe, as such. This commodity was and is subject to the ratings provided for underground cement or concrete conduits. The manufacturer was advised by the several classification committees in 1928 and 1929 that such ratings were applicable. The ratings on cement or concrete conduits are sixth class in official, eighth class in southern, and class E in western classifications, and are 27.5, 30, and 17.5 percent of the corresponding first-class rates. The carload minimum is 36,000 pounds. In official territory, cement or concrete conduits are rated 25 percent of first-class by exceptions to the classification. The lawfulness of those ratings was not questioned until 1935, when protests were filed with the respective classification committees by the cast-iron pipe interests here complaining. They presented the same claims, supported by substantially the same evidence, that they present upon this record. Those claims were rejected by the committees as without merit. The western-classification committee, however, acquiesced only in deference to uniformity, reserving the view, reasserted here, that Transite pressure pipe should be specifically classified at ratings not lower than those contemporaneously maintained on cast-iron pressure pipe.

Transite pipe is manufactured in two types, pressure and other than pressure, both being composed of 80 percent portland cement and 20 percent asbestos. The asbestos is used as a binder to add structural strength. The other-than-pressure, or nonpressure, pipe, concerning which the ratings or rates are not in issue here, is used chiefly as an underground conduit for the protection of wires. The only difference between the two types is that the walls of the pressure pipe are much thicker than those of the nonpressure pipe.

Based upon prices said to have been bid for delivery at 17 widely scattered destinations, complainants compute the average value of Transite pressure pipe as $113.57 per ton delivered. Deducting therefrom the average freight charges per ton, they show the average origin value at Waukegan as $107.04 per ton. From invoices of shipments actually made in the 10-month period ended October 31,