Both the western origins and the Texas destinations are grouped. Typical western refining points are Denver, Greeley, Las Animas, Pueblo, and Rocky Ford, Colo., in group 1, the base group; Delta and Grand Junction, Colo., in group 2; and Pocatello and Twin Falls, Idaho, and Ogden, Utah, in group 3. Rates from these groups are differentially related. A rate of 50 cents, minimum 60,000 pounds, is proposed from origins in the base group to numerous destinations in Texas east of and including Amarillo, Austin, Chillicothe, Corpus Christi, Fort Worth, San Antonio, Temple, Waco, and Wichita Falls. This Texas group is more than 700 miles in extent. Denver and Pueblo are important junctions where shipments from western refineries are delivered to the Santa Fe, while Fort Worth and Dallas, Tex., are important interchange points. The short tariff route from Pueblo to Fort Worth, 682 miles, is over lines of The Colorado and Southern Railway Company to Sixela, N. Mex., and the Fort Worth and Denver City Railway Company through Amarillo, Chillicothe, and Wichita Falls to destination. The 50-cent rate from Colorado group 1 to the described Texas group also applies over indirect routes through Kansas and Oklahoma, pursuant to outstanding fourth-section authority. From group 1 to Ardmore, Okla., an intermediate point on one of those routes, the applicable rate is 55 cents. The higher-rated intermediate territory here under consideration is westward from Fort Worth and comprises points on more than 600 miles of Santa Fe system railroad lines. These lines extend from Zita, near Amarillo, southward and southeastward through Plainview, Lubbock, Snyder, and Sweetwater to Brownwood, thence northeastward through Dublin to Tolar, 436 miles; from Sweetwater northeastward through Hamlin about 135 miles to Medicine Mound, a point near Chillicothe; and from Brownwood in a southeasterly direction approximately 56 miles to Lometa, a point on the shortest Santa Fe route from Colorado to Houston and Galveston, Tex. The rate from Colorado group 1 to all points in the described higher-rated intermediate territory is 54 cents. To points in Texas east and southeast of that territory the proposed rate is 50 cents, as hereinbefore indicated. Departures occur only at destination points. Rates over the short tariff routes conform to fourth-section requirements. A typical indirect route from Rocky Ford, Colo., to Corsicana, Tex., is composed of Santa Fe system lines through Springfield, Colo., Boise City, Okla., Kerrick, Tex., Zita, Sweetwater, and Tolar to Fort Worth, thence the Texas and New Orleans Railroad Company, 838 miles, and 10.7 percent circuitous. Over this route the earnings, under the 50-cent rate and carload minimum of 60,000 pounds, are 35.8 cents per car-mile and 11.9 mills per ton-mile. The most indirect route shown of record exceeds the comparable short tariff route by 39.1 percent. The distance from Rocky Ford over Santa Fe system lines through Amarillo, Sweetwater, and Lometa to Houston, 962 miles, is only 2 miles longer than the short tariff route. For that distance the 50-cent rate will earn 31.1 cents per car-mile on a minimum carload of 60,000 pounds. Some of the higher-rated intermediate points on the Santa Fe are also located on lines of other railroads. Thus, Plainview and Lubbock are served by the Fort Worth & Denver City; Sweetwater by The Texas and Pacific Railway Company; and Hamlin and Dublin by the Missouri-Kansas-Texas Railroad Company of Texas. Applicants contend that a reduction by the Santa Fe in rates to these points would cause reductions by competing lines, not only in rates to the points named, but also in rates applying at certain intermediate points on their rails. Competition is very keen between carriers transporting beet sugar from western producing points and those handling cane sugar from New Orleans and southern Texas to consuming areas here involved. The rates on sugar from Colorado origins to many destinations in Texas are made in relation to rates from New Orleans, while the latter are competitive with intrastate rates maintained from Sugar Land, Tex., a point about 20 miles southwest of Houston. For example, the rates from New Orleans and Pueblo, respectively, are 45 and 50 cents to Fort Worth, and 49 and 54 cents to Brownwood, Dublin, Lometa, Sweetwater, and Tolar, the differential at these destination points being 5 cents. A reduction in the 54-cent rate from Colorado to these points would either disrupt the relations between rates from Colorado origins and New Orleans or influence competing carriers to make reductions in rates from the latter point. The routes proposed would enable the Santa Fe to obtain its long haul on sugar traffic from western origins to important consuming areas in Texas. We are of opinion that the rates proposed will be reasonably compensatory, and that the relief prayed, subject to certain conditions hereinafter specified, is justified. Applicants will be authorized to establish and maintain over their circuitous routes through Kerrick, Tex., as described in the application, for the transportation of sugar, in carloads, minimum 60,000 pounds, from origins in Colorado, Idaho, Nebraska, Oregon, Utah, and Wyoming, as named in Agent J. R. Peel's tariff I. C. C. No. 2990, to destination points in Texas as named in said tariff, rates the same as those con temporaneously in effect on like traffic from and to the same points by way of competing lines or routes, but not lower than present rates over the latter lines or routes, and to maintain higher rates to intermediate points; provided that rates to such higher-rated intermediate points shall not be increased except as authorized by this Commission and shall not exceed the lowest combination of rates subject to the Interstate Commerce Act; and provided, further, that the relief authorized herein shall not apply (1) where the distance over the short line or route does not exceed 1,000 miles and the longer line or route is more than 50 percent circuitous, or (2) where the distance over the short line or route exceeds 1,000 miles and the longer line or route is more than 333 percent circuitous, except that where the distance over the short line or route exceeds 1,000 miles and the distance over the longer line or route does not exceed 1,500 miles, relief will apply to such longer line or route even though the longer line or route is more than 33% percent circuitous. All other and further relief will be denied. An appropriate order will be entered. 246 I. C. C. FOURTH SECTION APPLICATION No. 18424 Submitted September 18, 1940. Decided June 30, 1941 Authority granted, on conditions, to continue and to establish and maintain rates on gasoline, kerosene, naphtha, and naphtha distillate, in carloads, from Mobile, Ala., to certain points in Mississippi, without observing the long-andshort-haul provision of section 4 of the Interstate Commerce Act. Y. D. Lott, Jr., for applicants. REPORT OF THE COMMISSION DIVISION 2, COMMISSIONERS AITCHISON, SPLAWN, AND ALLDREDGE BY DIVISION 2: The Alabama Great Southern Railroad Company and other carriers1 apply for authority to establish and maintain rates on gasoline, kerosene, naphtha, and naphtha distillate, in carloads, as described in items 469-C and 478 of Agent F. D. Miller's tariff I. C. C. No. 470, from Mobile, Ala., to certain points in Mississippi, without observing the long-and-short-haul provision of section 4 of the Interstate Commerce Act. Authority was granted by fourth-section order No. 13859, until the effective date of further order to be entered after hearing, to establish and maintain temporarily the rates proposed in the application, except that a higher rate was authorized than that proposed to Jackson, Miss., and this authority was limited to routes not more than 50 percent circuitous. Rates as authorized became effective September 18, 1940. A hearing was held, and no opposition to the relief prayed was presented. Rates and differences in rates will be stated in amounts per 100 pounds. Reduced rates were proposed in the application corresponding with reductions in rates established May 5 or 13, 1940, for application from New Orleans, La., to the destinations in Mississippi. However, on 1 Alabama, Tennessee & Northern Railroad Corporation; Bonhomie and Hattiesburg Southern Railroad Company; Canton & Carthage Railroad Company; Columbus and Greenville Railway Company; Gulf, Mobile and Northern Railroad Company; Gulf and Ship Island Railroad Company; Illinois Central Railroad Company; Louisville and Nashville Railroad Company: Meridian and Bigbee River Railway Company; Mississippi Central Railroad Company; Mississippi & Skuna Valley Railroad Company; Mobile and Ohio Rail Road Company; New Orleans and Northeastern Railroad Company; St. Louis-San Francisco Railway Company: Southern Railway Company; and The Yazoo and Mississippi Valley Railroad Company. August 17, 1940, further reductions were made in the rates from New Orleans to some of the destinations, and applicants proposed at the hearing corresponding reductions in rates from Mobile. The justification for the relief sought is market competition and the necessity of maintaining a proper relation between rates from Mobile and New Orleans. It has been the policy of the Gulf, Mobile & Northern and the Mobile & Ohio (now the Gulf, Mobile and Ohio Railroad Company) to maintain an equality of rates where the short-line distances from New Orleans do not exceed those from Mobile by more than 25 percent. But where the short-line distances from New Orleans exceed those from Mobile by more than 25 percent, the carriers named have taken the position that there should be a rate differential in favor of Mobile. In Gasoline to Greenville, Miss., 215 I. C. C. 502, the Illinois Central, the Yazoo & Mississippi Valley, and the Columbus & Greenville were granted authority to establish, without observing the long-and-shorthaul provision, rates on gasoline, kerosene, and naphtha, in carloads, from the New Orleans-Baton Rouge, La., group to points in Mississippi intermediate to and beyond Greenville, Miss., constructed by the use of a basing factor of 11 cents to Greenville and the distance rates from that point to the respective destinations. And in Petroleum from Louisiana to Mississippi, 232 I. C. C. 570, authority was granted to establish on those commodities, from points in the New Orleans-Baton Rouge group to points intermediate to and beyond Vicksburg, Miss., rates constructed by the use of a basing factor of 9 cents to that point and the intrastate rail rates concurrently maintained on the same commodities from Vicksburg to the destinations, without observing the long-and-short-haul provision. The rates that were in effect from Mobile to the destinations under consideration, except to Ackerman and Hickory, Miss., were higher than those in effect from New Orleans, and the reductions in the rates from the latter point are relatively greater than those herein proposed in the rates from Mobile, except to Ackerman, Hickory, and Jackson. Prior to the reductions, the rate from New Orleans to Jackson was 19 cents, while the rate from Mobile was 30 cents. The present rate from New Orleans is 16 cents, made by the use of the 9-cent basing factor to Vicksburg and the intrastate rate of 7 cents beyond. Applicants proposed in the application to establish the same rate from Mobile but were granted authority by fourth-section order No. 13859 to establish a rate of not less than 19 cents to Jackson. In 1939, when the rate from New Orleans to Jackson was 19 cents, the carriers serving Mobile undertook to establish the same rate but deferred publication of the rate because the 16-cent rate had been proposed from New |