INVESTIGATION AND SUSPENSION DOCKET No. 46641

HANDLING CARLOAD SHIPMENTS IN WEST

Decided October 13, 1941

Upon further consideration, former report, 246 I. C. C. 57, amended so as to permit the continuance, temporarily, of present two-car-shipment rules for application to electric stoves.

Appearances same as in original report.

REPORT OF THE COMMISSION ON RECONSIDERATION

BY THE COMMISSION:

In our original report herein we found that tariff rules of the western railroads permitting shipments loaded in two cars to be treated, for the purpose of applying the carload minimum weight, as if they were loaded in a single car, were unlawful and should be canceled, but as to sheet-iron culverts and electric water heaters an exception was made permitting the rules in question to be continued temporarily until such time as the minimum weights for those commodities were reduced to amounts which could reasonably be loaded in or on 40-foot cars. The exception as to electric water heaters was based upon the testimony of a witness for the Edison General Electric Appliance Company, who testified that the carload minimum on shipments from Chicago to Pacific coast points was 40,000 pounds, and that that weight could only be loaded in the largest 50-foot cars. The witness has since directed attention to the fact that by reason of a stenographic error, his testimony was made to appear as relating to electric water heaters only, whereas it actually related to electric stoves and water heaters. Accordingly upon further consideration of the record we find:

1. That the first full paragraph on page 61 of the former report should be, and hereby is, amended to read as follows:

A shipper of electric water heaters and electric stoves from Chicago to the Pacific coast testified that the minimum weight for these articles was 40,000 pounds; that 40,000 pounds cannot be loaded in a single car, except in a few 50-foot cars of extra-large cubical capacity; that he always ordered 50-foot cars but that he commonly received, and

1 This proceeding embraces also Investigation and Suspension Docket No. 4668, Loading of Multiple Cars in West; Investigation and Suspension Docket No. 4678, Cars Furnished at Variance with Shipper's Order; and No. 27365, Freight Forwarding Investigation, reopened in part.

preferred to receive, two 40-foot cars under item 792-A; and that when two 40-foot cars were so furnished, his practice was to load about 20,000 pounds in each car, in order to reduce his expense for tiering and dunnage. The classification minimum for electric water heaters is 24,000 pounds, subject to rule 34; and for electric stoves the classification minima, according to type of construction, are 12,000, 16,000, 20,000, and 24,000 pounds, all subject to rule 34. It is quite evident that the transcontinental minimum of 40,000 pounds for these two commodities is unreasonably high.

2. That the last paragraph on page 64 of the former report should be, and hereby is, amended to read:

With respect to carload shipments of sheet-iron culvert pipe, electric water heaters, and electric stoves moving under the rates and minimum weights heretofore referred to, the application of a tariff rule to govern two-car shipments similar to rule 24 of the classification would result in a considerable increase in the shippers' freight charges, for which there is no apparent justification. We shall accordingly except those three commodities from the prescribed rule and allow item 792-A to be continued in effect temporarily for application to them, but respondents will be expected within a reasonable time to establish reduced minimum weights for those three articles, graduated for cars of different lengths or capacities in accordance with the principle of rule 34, and subject to a provision for the assessment of charges on two-car shipments as published in that rule and in item 792-B. These proceedings will be kept open until we are advised that this has been done.

An appropriate amended order will be entered.

246 I. C. C.

No. 28562

ROSS BROS. HORSE & MULE COMPANY v. ATCHISON, TOPEKA & SANTA FE RAILWAY COMPANY ET AL.

Submitted June 17, 1941. Decided October 14, 1941

Rates on horses and mules, in carloads, from points in Arizona, California, and Nevada to Fort Worth, Tex., found unreasonable. Reasonable rates prescribed. Reparation awarded.

Eugene Bolliger, H. D. Driscoll, Ralph W. Currie, and Frank A. Leffingwell for complainants.

R. S. Outlaw, R. S. Shapard, J. R. Bell, G. H. Muckley, J. E. Lyons, and William Meinhold for defendants.

1

REPORT OF THE COMMISSION 1

JOHNSON, Commissioner:

The shortened procedure was followed. Complainants filed exceptions to the examiner's report. The conclusions herein differ from those recommended.

Complainants, W. R. Ross, John C. Hicks, Parker Jameson, and D. H. Pershall, copartners, trading as Ross Bros. Horse & Mule Company, allege by complaint filed September 20, 1940, as amended, that the rates on horses and mules, in carloads, from points in Arizona, California, and Nevada to destinations in Texas, were and are unreasonable. The Commission is asked to prescribe reasonable rates for the future and to award reparation. Unless otherwise indicated, rates will be stated herein in amounts per 100 pounds.

Complainants buy and sell horses and mules, which are procured at various points in the United States, including Arizona, California, and Nevada, and then shipped by rail or truck to Fort Worth, Tex. Because of alleged high freight charges from Arizona, California, and Nevada, complainants have bought few horses and mules in those States. While the complaint assails the rates to all destinations in Texas, the record indicates that complainants' direct interest is only with respect to the rates to Fort Worth. The findings herein will be limited accordingly.

Phoenix and Yuma, Ariz., are representative origins. The distances from those points to Fort Worth are 1,046 and 1,177 miles,

Under the authority of section 17 (2) of the Interstate Commerce Act, the aboveentitled proceeding was referred to Commissioner Johnson for consideration and disposition.

respectively. Two shipments are shown of record, each of which contained 26 animals. They moved to Fort Worth on December 26, 1938, and January 22, 1939, from Phoenix and Yuma, respectively. The weight in each car did not exceed the applicable minimum, 23,400 pounds. The rates applicable and charged were $136.40 per car from Phoenix to El Paso, Tex., and 59 cents per 100 pounds beyond; from Yuma, $168.30 per car to El Paso and 59 cents per 100 pounds beyond. Based upon the minimum of 23,400 pounds, the foregoing per-car rates equal approximately 58.5 and 72 cents per 100 pounds, respectively. The equivalent through rates per 100 pounds are 117.5 and 131 cents. The rates sought for the through movement are 82 and 90.5 cents, based upon 115 percent of the corresponding rates on fat cattle. Complainants ask for reparation on the above-mentioned shipments, as well as on those moving during the pendency of this proceeding.

In Western Horse and Mule Rates, 195 I. C. C. 417, the Commission on further hearing prescribed 115 percent of the contemporaneously applicable rates on fat cattle as maximum reasonable rates for the transportation of horses and mules from, to, and between points in southwestern and western trunk-line territories. A reasonable basis of rates on fat cattle from points in Arizona, California, and Nevada to destinations in Texas had previously been prescribed in Livestock-Western District Rates, 176 I. C. C. 1. Arizona, California, and Nevada were not specifically included in the territory covered by Western Horse and Mule Rates, supra, and defendants have declined to establish the 115-percent basis from those States. This basis is no longer in effect between other points, owing to the changes brought about by the general percentage increases. The percentage relation is now 120.5 in the territory covered by Western Horse and Mule Rates, supra, and in adjacent territory to which the 115-percent basis was voluntarily extended.

Defendants contend that rates on horses and mules should not be related to those on edible livestock, because the volume of movement of the two classes of traffic is not comparable; loss and damage claim payments on horses and mules exceed those on edible livestock; there is no commercial competition as between these different types of traffic; and horses and mules are more valuable than edible livestock.

The record shows that during the years 1934 to 1939, inclusive, receipts of horses and mules at the principal markets in western territory constituted only about one-half of 1 percent of those of edible livestock. This, plus the additional fact that the edible-livestock rates resulted from an investigation pursuant to the Hoch-Smith

resolution, is stressed by defendants as an important reason why there should be no fixed percentage relation between the rates.

The percentage relation of loss and damage claim payments to revenue received is higher on shipments of horses and mules than on certain other classes of traffic. For example, loss and damage claim payments of representative defendant rail lines for freight as a whole during 1937, 1938, and 1939 averaged less than 1 percent of the total freight revenue, whereas for horses and mules during the same period, and during 1940, the claim payments made by the Southern Pacific Company represented 4.2, 6.1, 2.2, and 5 percent, respectively, of the revenue collected thereon.

The lower value of edible livestock as compared with horses and mules is shown in the following tabulation. The figures, supplied by defendants, are compiled from the United States Agricultural Year Book for 1935 and 1936, and Crops and Markets, February 1939, published by the United States Department of Agriculture, and set forth the average farm values of horses and mules and other livestock in dollars per head:

Substantially all of the factors relied upon by defendants were considered in Oklahoma Horse & Mule Comm. Co. v. A., T. & S. F. Ry. Co., 243 I. C. C. 495, decided February 14, 1941. Among the rates there in issue were those on horses and mules, in carloads, from points in Idaho, Iowa, Montana, Nebraska, New Mexico, Oregon, Utah, Washington, and Wyoming to destinations in Texas, including Fort Worth. Division 2 found that such rates were unreasonable prior to March 28, 1938, to the extent that they exceeded 135 percent of the corresponding prescribed joint through rates on fat cattle then in effect, plus emergency charges where applicable prior to January 1, 1937, and were unreasonable on and after March 28, 1938, to the extent that they exceeded rates prescribed for application prior thereto plus 10 percent. For the future the prescribed basis was 120.5 percent of 105 percent of the corresponding rates on fat cattle prescribed in Livestock-Western District Rates, supra, subject to a minimum of 23,000 pounds. No different conclusions are warranted herein. The shipments in the proceeding now under consideration moved subsequent to March 28, 1938.

430790m-42-vol. 246- 48