are, therefore, unlawful under the rule laid down in the above decision.

The facts, that the roads west of the Mississippi make tap line allowances to mill-owners in their territory and the defendants (with the exception of the Mobile & Ohio road) do not make such allowances to the mill owners in their territory east of the Mississippi and that this results in placing the latter at a disadvantage in the common markets, does not constitute an undue preference for which the defendants in this case are liable under the Act to regulate commerce. The third section of that Act, which prohibits undue preferences between individuals and localities, is not violated by the failure or refusal of the defendants to make tap line allowances to the mill owners in their territory while such allowances are granted the mill owners by other carriers in a different territory or section of the country. (Central Yellow Pine Association v. Vicksburg, Shreveport & Pacific R. Co., supra). While, however, this is true, there does not appear to be any reason for making these allowances west of the Mississippi River which does not equally apply east of the river and, if the rate west of the river is reasonable minus the allowances, this is persuasive, or gives color to the proposition, that after a similar reduction the rates east of the river would still be reasonably high. The Mobile & Ohio road by voluntarily making the allowance east of the river practically concedes this proposition as to itself.

10. The general rule is, the greater the tonnage of an arti cle of traffic, the lower is the rate. No rule is more firmly grounded in reason or more universally recognized by carriers. It is because of the greater density of traffic north of the Ohio River in Central Freight Association Territory and in Eastern Territory that rates in general are materially lower in those territories than in Southern Territory. The defendants have made yellow pine lumber an exception to this rule; while the tonnage in general of the defendants and lumber tonnage in particular have grown greatly, the lumber rate has not been lowered but has been materially advanced. Moreover, the testimony is that "a decrease in the rates on traffic in general has been going on throughout the United States since the improve

ments in transportation have been put in operation;" here, again, lumber has been taken from under, and deprived of the benefit of, the general rule.

11. As said in Marten v. L. & N. R. R. Co. (9 I. C. C. R. 589) and shown by the proof in this case, "lumber is an inexpensive freight and only a few other commodities furnish to carriers so large a tonnage." The lumber business is constant, yielding the carriers revenue all the year; no special equipment is constructed or furnished for its carriage; it is loaded by the shipper and unloaded by the consignee, and where open cars are furnished, the shipper is required at considerable expense to equip them so as to protect the load and the train; there is small risk incident to its transportation and, in case of accident, the damage is insignificant. For these reasons lumber should be given rates which are relatively low.

Our conclusion on the whole is that the advance, April 15, 1903, of 2 cents in the Cairo rate (with a corresponding increase in the rates to the other Ohio River crossings) was not warranted under all the facts in evidence and that the resultant increased rate is unreasonable and unjust. An order will be issued in accordance with these views.

KNAPP, Chairman, and FIFER, Commissioner, dissenting: In the view we take of this case the conclusions of our associates are not justified by the facts and circumstances appearing in the record or otherwise entitled to consideration. Holding that the rates complained of have not been shown to be in violation of law we respectfully dissent from the foregoing report and opinion.

10 L C. C. REP.

548

INTERSTATE COMMERCE REPORTS.

No. 698.

H. H. TIFT, W. S. WEST, J. LEE ENSIGN, J. S. BETTS & COMPANY, GARBUTT LUMBER COMPANY, ALAPAHA LUMBER COMPANY AND SOUTHERN PINE COMPANY

SOUTHERN

v.

RAILWAY COMPANY; ATLANTIC COAST LINE RAILROAD COMPANY; LOUISVILLE & NASHVILLE RAILROAD COMPANY; NASHVILLE, CHATTANOOGA & ST. LOUIS RAILWAY COMPANY; SEABOARD AIR LINE RAILWAY; CENTRAL OF GEORGIA RAILWAY COMPANY; GEORGIA SOUTHERN & FLORIDA RAILWAY COMPANY; MACON & BIRMINGHAM RAILWAY COMPANY; AND THE SOUTHEASTERN FREIGHT ASSOCIATION AND S. F. PARROTT, CHAIRMAN OF SAID SOUTHEASTERN FREIGHT ASSOCIATION.

Decided February 7, 1905.

Defendants made effective on June 22, 1903, an advance of 2 cents per 100 pounds over rates previously in effect from Georgia points to Ohio River destinations on lumber in carloads, whether shipped locally to said Ohio River points or shipped beyond. The rates prior to that date were in effect from September 8, 1899, on which date an advance was made of 1 cent from Group 2 points on the Southern Railway, and of 2 cents from most other grouped shipping points in Georgia, over rates in force May 17, 1894. From the various groups the present advanced rates to Cincinnati, Louisville and Evansville are, as to some, 4 cents higher than in 1892, and as to others, 3 cents higher than in 1891. The rates prior to the advance complained of were remunerative to the carriers. Held:

1. That complainants, constituting only a small portion of the 10 I. C. C. Rep.

TIFT et al. v. SOUTHERN R. CO. et al.

549

membership of the Georgia Saw Mill Association, which is alleged by defendants to be an unlawful association, were entitled to bring and maintain this proceeding in their own behalf and in the interest of all shippers of the traffic involved and others constituting the public at large.

2. That the advance of rates complained of in this case was the result of concerted action by defendants and other carriers; and while the question whether such concert of action is in violation of the "Anti-Trust Act" is for determination only by the courts, it is the province and duty of this Commission, when the reasonableness of rates is in issue before it, to consider whether the advanced rates resulted from untrammeled competition, or were fixed by concert of action or combination of the carriers.

3. That where an advance is made in rates which have been long maintained, and the evidence shows that the traffic affected is large, important, and constantly increasing, the advance will be held unjust, unless it is satisfactorily explained.

4. That the test of the reasonableness of a rate is not the amount of profit in the business of the shipper or manufacturer, but whether the rate yields a reasonable compensation for the services performed. Carriers necessarily and justly participate in the prosperity of their patrons in the resultant enlargement of their own business, and no rule is more firmly grounded in reason, or more universally recognized by carriers, than that the greater the tonnage of the article transported, the lower should be the rate.

3. That if permanent improvements are not included in the operating expenses of defendants, and if only such expenditures for equipment as are properly chargeable to a single year are included, the percentages of operating expenses to gross earnings will be materially reduced.

6. That carriers have no right to advance a rate which is already reasonably high and which yields an adequate return for the service rendered, solely because additional revenue is needed. The mere fact of the need of additional revenue to meet increased expenses does not justify the advance in rates on these lumber shipments from Georgia to and beyond the Ohio River, which are, for the most part, of low grade and comparatively small value.

7. That the hauling of flat cars empty to the mills, or the practice of shippers to load cars below their capacity, are conditions which, to the extent they exist, are properly taken into account by carriers in fixing rates; and it must be assumed that they were considered by defendants in making and maintaining the rates so long in force prior to the advance herein charged.

8. That the rates on lumber, prior to the advance complained of, were reasonably high when compared with the rates on other commodities which are at all analogous to lumber in respect to value, vol10 I. C. C. REP.

ume, risk, cost of handling, and other circumstances and conditions affecting the transportation of the traffic.

9. That lumber rates should be relatively low, in view of the limited life of the lumber business in Georgia, at the end of which large investments of manufacturers in plants, including buildings, machinery and tram roads, will become practically valueless, the increase in the net revenue of the roads caused by the lumber traffic, the fact that lumber is inexpensive freight and few other commodities furnish greater tonnage, the constancy of the traffic throughout the year, the fact that no special equipment is required for its movement, that it is loaded by shippers and unloaded by consignees, that when flat or open cars are furnished the shipper is at considerable expense to equip them so as to protect the lumber and the train, that it is not a perishable freight and does not require rapidity of movement, that there is small risk and in case of accident the damage is insignificant, and that lumber is an article of general utility.

10. That the advance of 2 cents per 100 pounds in defendants' rates on lumber from Georgia shipping points to Ohio River points, which was made effective June 22, 1903, was not warranted by the facts, circumstances and conditions disclosed in this case, and that the increased rates then put in force are unreasonable and unjust.

Ellis, Wimbish & Ellis and F. G. Boatright for complain

ants.

Ed. Baxter for Southern Railway Company, Atlantic Coast Line Railroad Company, Louisville & Nashville Railroad Company, Nashville, Chattanooga & St. Louis Railway Company, Seaboard Air Line Railway, Central of Georgia Railway Company, Georgia Southern & Florida Railway Company, Macon & Birmingham Railway Company.

C. B. Northrop for Southern Railway Company.

Mason, Hill & McGill for Southeastern Freight Association. Kaye, Bennett & Conyers for Atlantic Coast Line Railroad Company.

Brown & Randolph and Erwin & Erwin for Seaboard Air Line Railway.

REPORT AND OPINION OF THE COMMISSION.

CLEMENTS, Commissioner:

The complainants, H. H. Tift, et al., are manufacturers of