Rivers. Class rates now applicable particularly in trunk-line and New England territories, and between those territories would remain unchanged, but the 86-cent commodity rate applicable from New England to central territory on cotton piece goods would be increased to the full third-class basis. In fact, wherever commodity rates are now published in official territory, except to New York City and related destinations over certain lines, these would be changed to the class basis. The full fourth-class rates, 55 percent of southern first class, would displace the present commodity rates on cotton piece goods from the South. Under this proposal there would be a general increase in the all-rail rates to central territory from practically all of the northern and southern producing points. The 86-cent rate from Boston to Chicago would become $1.08, and the present 83-cent rate from Atlanta would become $1.05.

The general position of the official-territory carriers is that the class basis is reasonable for textiles, and is justified by the value of these commodities and their other transportation characteristics, by the overwhelming proportion of the all-rail movement being in less than carloads, and by our repeated approval of that basis. They place the responsibility upon the southern carriers for the departure from this class basis and for not curing the trouble by a return thereto.

Traffic study.-In support of this contention the official lines introduced a detailed traffic study covering 169,619 shipments of textiles during the first 10 working days of September 1931. The study purports to include all shipments during that period within official-classification territory and between official territory and southeastern, southwestern, and western trunk-line territories. The data for each shipment include the point of origin and destination, kind of commodity, weight, rate charged, and present corresponding class rate. Class-rate traffic is separated from commodity-rate traffic. The movements between the divisions of official territory, and from the South to these divisions are separately shown. A further division is made on the basis of the method of transportation, whether all rail, or in part by water. The study was intended to have principal significance with respect to the movement within official-classification territory and from the South to that territory. Its primary purpose was to show the volume of traffic moving, the wide distribution as to points of origin and of destination, the proportion moving under class rates as compared with commodity rates, and the average weight of shipments.

The study discloses that, within official territory, class rates were charged on 97,944 shipments aggregating 32,259,823 pounds, or an average of 329 pounds a shipment, and commodity rates were charged

on 19,004 shipments aggregating 15,398,626 pounds, an average of 810 pounds a shipment. These thousands of shipments range from single small consignments almost without number, often weighing less than 100 pounds each, to scattering shipments of carload quantities to a few destinations. The study shows convincingly that the predominant movement in official territory is in less than carloads.

Detailed shipments and summaries thereof covering the movement from the South to official territory tend to show an analogous situation, but the showing is not complete as to volume of movement. The exhibits do not include any all-rail tonnage originating in the South and moving to central-territory destinations over the so-called southern lines, for instance, the Southern Railway, the Louisville and Nashville, and the Illinois Central. A serious omission of traffic was disclosed, which does not permit correction of the figures in the traffic study, but shows the futility of efforts to arrive at conclusions upon the basis of weighted-average figures, as attempted by the southern shippers and carriers, because of the incompleteness of the data on which weighted averages must be calculated. Another objection to the southern traffic study is the incompleteness of the data and discrepancies in the facts as to the traffic from the South over routes which are partly by water. The figures from the South contained in the study cannot be accepted as accurate. These important omissions are due to the fact that the traffic study was compiled from records of delivering rail lines, which did not include the very large tonnage delivered by the water lines at the north Atlantic ports, in the movement of which the northern rail carriers did not participate. The data relating to the movement within official territory, however, were more readily accessible to the official-territory lines, and the figures covering the complete movement are not subjected to serious adverse criticism. The study included all descriptions of textiles, both in the cotton piece goods list and in the dry-goods list. Because of the universality of the movement of cotton piece goods and the fact that an equitable adjustment of the all-rail rates on the commodities falling within that description was dealt with during the hearings as the fundamental issue, we have segregated the data which relate to the all-rail movement of cotton piece goods within official territory. We have also made a further separation of class and commodity rate traffic, and have compiled all of the data into the table shown below as table 4. The averages obtained are weighted averages. The charges in column 3 are those which would have accrued on the shipments covered by column 2 if they had moved on the full present third-class basis of 70 percent of first class prescribed in the eastern class-rate revision. The comparison, column 2 with column 3, of the shipments moving on commodity rates shows the difference

between the actual charges and those which would have accrued at the corresponding present class rates. The commodity rates did not change on December 3, 1931, when the class rates were changed in consequence of the eastern class-rate revision. The shipments covered by the traffic study moved during the period September 1-12, 1931, so that the class rates paid on the shipments on which class rates applied are not the same as the present class rates. The table shows in connection with the class-rate traffic, the charges which were paid and also the totals of the charges which would apply at present, as a result of the eastern class-rate revision.

TABLE 4-Study of rate level within official territory (all rail), cotton

1 In connection with the class-rate movement, the charges shown in column 2 are based on the thirdclass rates in effect prior to Dec. 3, 1931. A comparison with column 3 shows the effect of the eastern class. rate revision. The total charges collected on the commodity-rate movement added to the charges on the class-rate movement based on the present third-class rates give a total of $61,959.73, which more closely approximates what the present charges would be on this movement. On that basis the average rate would be 57.5 cents, 87 percent of the average third-class rate. This does not allow for the instances in which the present third-class rates cannot be charged because of the lower commodity rates to or from farther distant points.

794. 22

109.5

109

100. 5

60

1,217

59.5

67.5

88.5

3, 642

637

853.76

100

96.5

103.5

245

360

362.78

108.5

109

This table shows that approximately 55 percent of the entire shipments of cotton piece goods within official territory moved on commodity rates which average 78 percent of the present third-class rates; that the balance of the shipments moved on the full thirdclass basis, which was at that time 91 percent of the present thirdclass rates; and that the weighted average, class and commodity, for the entire territory was 83.5 percent of the present third-class rates. Shipments on commodity rates from New England and trunk-line territory to central territory averaged 82.5 percent of the present third-class rates, which may be compared with lower bases of 68.5 and 73 percent, averages from New England to trunk-line and New England territories respectively. This shows a relatively lower basis of the all-rail commodity rates from New England to Boston and New York, where the water and truck movements dominate the rate adjustment, than to Chicago, where rail-carrier competition is still the dominant influence in bringing about a lowering of the rates from the class basis.

The movement from the South to official territory, shown in table 5 below, is a reproduction of certain portions of the traffic study, and does not include traffic which moved all rail entirely over the lines of the southern carriers or their affiliations, or the very heavy traffic which moved by rail and water to north Atlantic ports and did not go beyond by rail. It includes shipments sometimes described as rail-water traffic or as rail-water-rail traffic. The movements by water were in practically all cases movements beyond the port, and we therefore classify them as rail-water-rail traffic.

TABLE 5.-Cotton piece goods from South to official territory

Comparing tables 4 and 5, it appears that the movement from the South is practically always on commodity rates, and within the North is sometimes on class rates and sometimes on commodity

rates, dependent upon the section of the territory in which the movement takes place.

The all-rail movement to central territory from the North and South compares as follows:

Thus, to central territory it appears that the South moves about two thirds of the total traffic, assuming the period used in the traffic test to be representative. The proportion moving from the South is materially understated, however, on account of the incompleteness of the data furnished, as already shown. The average haul from the South is somewhat shorter than from the North, as will later appear. To New England the comparison is as follows: From trunk-line and New England:

On commodity rates---

On class rates___.

From central territory on class rates---.

Total

From the South:

All-rail--

Rail-water-rail___

Total

Pounds 1, 586, 820

832, 983 33, 313

2, 453, 116

625, 325

5, 434, 080

6,059, 405

Thus practically 70 percent of all the traffic to New England in which the official carriers perform a portion of the haul comes from the South. This takes no account of the most important movement of all, namely, the rail-water movement to the northern ports. The following comparison is made of the movement to trunkline territory: