No. 28201

CHAS. TAYLOR SONS COMPANY v. CHESAPEAKE & OHIO RAILWAY COMPANY ET AL.

Submitted October 13, 1939. Decided November 18, 1939

Rate charged on a carload of used and broken firebrick from Middletown, Ohio, to Taylor, Ky., found applicable. Applicable rate found unreasonable. Reparation awarded.

R. A. Ellison for complainant.

George F. Dycke for defendants.

REPORT OF THE COMMISSION 1

MAHAFFIE, Commissioner:

The shortened procedure was followed. Complainant filed exceptions to the examiner's report. The conclusions differ somewhat from the examiner's recommendation.

Complainant corporation, by complaint filed February 23, 1939, alleges that the rate charged on one carload of used and broken firebrick moving on May 21, 1937, from Middletown, Ohio, to Taylor, Ky., was inapplicable and unreasonable, and that the present rate is unreasonable. Rates are per ton of 2,000 pounds unless otherwise designated.

The shipment, loaded in a 100,000-pound capacity car and weighing 67,100 pounds, moved over the lines of The Pennsylvania Railroad Company to Cincinnati, Ohio, and The Chesapeake and Ohio Railway Company, 154.3 miles. The short-line distance is 150.7 miles. The sixth-class rate of 19 cents per 100 pounds, minimum 60,000 pounds, carried in Agent Jones' tariff I. C. C. No. 2446, was charged. Reparation based on a rate of $1.60 and a rate of $1.76 for the future are sought.

This commodity, worth $1.25 per ton at origin, was removed from steel-mill furnaces when the furnaces were relined. It is used, in making new brick, as a raw material in lieu of treated clay, valued at $3.20 at destination. It is shown to have no other value. After the shipment moved, a rate of $2.55, minimum 90 percent of the marked

Under the authority of section 17 (6) of the Interstate Commerce Act, the aboveentitled proceeding was referred by the Commission to Commissioner Mahaffie for consideration and disposition.

capacity of the car, was established, which was increased under Ex Parte No. 123, Fifteen Percent Case, 1937-1938, 226 I. C. C. 41, to $2.81. The $2.55 rate contemporaneously applied on new firebrick from Toledo, Ohio, to Charles Town, W. Va., 424.8 miles.

Complainant's contentions that a combination rate of $3.24 was applicable either under an intermediate-point provision or under an alternative-application provision need not be considered in view of the conclusions reached as to the reasonableness of the assailed rate.

As a reasonable maximum rate for the service rendered, complainant seeks a rate of $1.60, which is 80 percent of the $2 rate on new firebrick in the opposite direction. Reference is made to a number of commodity rates on broken brick from points in Ohio, Indiana, West Virginia, and Pennsylvania to destinations in Ohio and Illinois. These rates, ranging from 63.3 to 81 percent of the rates on new brick, apply for 156 to 468 miles and yield 33.9 to 25.9 cents per car-mile. The rate charged yielded 82.6 cents, based on the actual weight and the distance over the route of movement. The $2.55 rate would yield 74.3 and 61.9 cents, based on the minimum of 90,000 pounds and the actual weight respectively. Reference is made to various rates, on new firebrick, crude fire clay, ard paving brick in the same general territory, which are substantially lower than the rates assailed. A rate of $2.05, minimum 60,000 pounds, applicable on new firebrick from South Dayton, Ohio, to Ashland, Ky., 199 miles, over the lines of the Cleveland, Cincinnati, Chicago and St. Louis Railway Company to Cincinnati and the Chesapeake & Ohio beyond, is stressed. Middletown and Taylor are intermediate to those points over that route, but the rate is not applicable over the lines of the Pennsylvania.

This commodity is covered by the description in the so-called brick list, and in the absence of lower commodity rates the rates on new brick from and to the same points generally apply. Defendants concede that the usual basis for substantial movements of this commodity is 80 percent of the brick rates in the opposite direction. They argue, however, that the classification basis is not unreasonable for sporadic movements, such as that here considered; that in no event should reparation be awarded to a lower basis than the $2.55 rate; and that no rate for the future should be prescribed upon such a meager showing of probability of future movement.

It is clear that both the rate charged and the present rate do not permit this commodity to move on a commercial basis. In the light of the compared rates on this and similar commodities in the same general territory, and what the traffic will bear, a rate of $2.05, minimum 60,000 pounds, appears to have been a reasonable rate for the service rendered. The revenue on the considered shipment at this rate

would be 44.5 cents per car-mile. This record does not warrant the prescription of a future rate.

It is found that the rate charged was unreasonable to the extent it exceeded $2.05; that complainant received the shipment as described and paid and bore the charges thereon; and that it was damaged thereby and is entitled to reparation in the sum of $58.71, with interest.

An order awarding reparation will be entered.

FOURTH SECTION APPLICATION No. 17867

SODA ASH FROM LAKE CHARLES, LA., TO MOBILE, ALA.

Submitted July 12, 1939. Decided November 20, 1939

Authority to establish and maintain rates on soda ash, in carloads, from Lake Charles, La., to Mobile, Ala., without observing the long-and-short-haul provision of section 4, of the Interstate Commerce Act, denied.

E. A. Rouse for applicant.

REPORT OF THE COMMISSION

DIVISION 2, COMMISSIONERS AITCHISON, SPLAWN, AND CASKIE BY DIVISON 2:

1

By this application, as amended, The Kansas City Southern Railway Company, for itself and on behalf of the Louisiana & Arkansas Railway Company, The Texas and Pacific Railway Company, and the Louisville and Nashville Railroad Company, requests authority to establish and maintain a rate of $3 for the transportation of soda ash, in bulk or in packages, in carloads, minimum 80,000 pounds, from Lake Charles, La., to Mobile, Ala., without observing the long-and-short-haul provision of section 4 of the Interstate Commerce Act. A hearing was held. Rates, charges, and costs are stated in amounts per net ton, except as otherwise indicated. Soda ash is produced at Lake Charles by the Mathieson Alkali Works, Inc., and at Baton Rouge, La., by the Solvay Process Company, Inc. The manufacturing plants of these companies are located near deep water and have access to water transportation. Large quantities of soda ash are used in the operation of a concentrate plant of the Aluminum Company of America, located at Mobile, and the above-named manufacturers are in direct competition for this business.

1 Weighing not less than 100 pounds each.

On July 3, 1939, a rate of $3 was established for the movement of this traffic, in carloads, from Baton Rouge to Mobile, and effective July 15, 1939, the same rate was made applicable from Lake Charles to Mobile over the direct routes of the Southern Pacific Company, or the Missouri Pacific Railroad Company (Guy A. Thompson, trustee), to New Orleans, La., and the Louisville & Nashville beyond. There are no departures in the rate over these direct routes. It is stated that this rate was established from Lake Charles to meet water competition. While no actual movement by water is shown, barge lines and ocean steamers operate regularly between Lake Charles and Mobile, and the record indicates that the Mathieson Company has received quotations for movements by water ranging from $2.51 to $2.76 per net ton, which included all incidental costs and charges except marine insurance, for which the charge would be 5 cents additional.

At present the Kansas City Southern performs only a switching service with respect to this traffic at the plant of the Mathieson Company. This carrier and its connections now desire to participate in the through movement by establishing the $3 rate over their indirect routes, composed of the lines of the Kansas City Southern to Shreveport, La., the Louisiana & Arkansas or the Texas & Pacific to New Orleans, and the Louisville & Nashville beyond. No departures will occur at intermediate origins on these routes, as rates therefrom will be provided by an intermediate rule similar to that authorized by rule 27 of Tariff Circular 20. The proposed rate will also be observed as maximum at New Orleans and intermediate destinations east thereof. Departures will occur only at intermediate destinations in Louisiana west of New Orleans. The following examples are illustrative. The distance from Lake Charles to Mobile over the direct route is 359 miles. The distances over applicants' routes as above described are 630 and 644 miles, or 75 and 79 percent circuitous, respectively. Over these routes to Neame, La., 56 miles, the present rate of $3.20 will be maintained, while to Shrewsbury and Gretna, La., 484 and 500 miles, respectively, the present respective rates of $5.60 and $5.80 will also be maintained. These rates are on the basis of 22.5 percent of the first-class rates prescribed or approved in the southwestern revision.

The proposed rate of $3 over applicants' routes would yield respectively 4.8 and 4.7 mills per ton-mile and, based on the minimum of 80,000 pounds, 19 and 18.6 cents per car-mile. Applicants' operating expenses per ton-mile and per car-mile, respectively, for the year 1937 were 6.15 mills and 14.72 cents for the Kansas City Southern, 6.81 mills and 18.85 cents for the Louisiana & Arkansas, and 6.73 mills and 13.67 cents for the Texas & Pacific.

Applicants assert that if the relief prayed is denied or, if granted, is made subject to the equidistant provision of section 4, the maintenance of the proposed rate as maximum at intermediate destinations in Louisiana west of New Orleans would result in an unwarranted loss of revenue. For example, the present intrastate rate on this traffic from Lake Charles to Shreveport is 17 cents, equivalent to $3.40 per net ton. This rate is also applicable on interstate traffic. Under a ruling of the Louisiana Public Service Commission which requires that the lower rate, interstate or intrastate, shall apply on intrastate movements, a rate no higher than $3 would have to be applied on shipments to Shreveport. A rate of 17 cents per 100 pounds applies from Lake Charles to Monroe and West Monroe, La., and any change in the Shreveport rate would require similar reductions in the rates to the other two points. There is a movement of soda ash to the three points named, and no complaints have been filed against the present rates.

While applicants insist that the water competition hereinbefore described creates a special case which warrants the granting of relief as prayed, the evidence establishes that the only real basis for relief is circuity. However, the distances over applicants' routes greatly exceed the limitation of 50 percent in excess of the distance over the direct route generally permitted. In these circumstances, and upon the record before us, we find that sufficient justification for the relief prayed has not been presented, and the application, as amended, will accordingly be denied.

An appropriate order will be entered.

COMMISSIONER CASKIE dissents.

235 I. C. C.