per cent of the average of Scales II and III. These new rates were known as revised Scale III and revised Scale IV.

In Lehigh Portland Cement Co. v. B. F. & I. F. Ry. Co., 132 I. C. C. 3, hereinafter called the second Mason City case, complainant there sought to have these revised scales apply from Mason City to extended scale Territories III and IV in North Dakota, northern Minnesota, and points on branch lines of the Minneapolis, St. Paul and Sault Ste. Marie Railway Company in South Dakota. The rates assailed were found unreasonable but not unduly prejudicial, and revised Scales III and IV were prescribed. With respect to the relationship of the rates from other producing points division 1 there stated that although its findings and order were limited, in accordance with the issues presented by the complaint to the rates from Mason City, it thought it appropriate to express the view that, in harmony with the conclusions reached in the first Mason City case with respect to the relationship of rates, the then present rates from Steelton and Duluth should be revised to reflect the same scale basis, calculated upon the distances from Duluth, as that prescribed by it as reasonable from Mason City, and that the then present rates from the other related producing points should be revised so as to continue to reflect substantially the same differences over the corresponding rates from Mason City as were reflected in the then present relationships of the key-point rates to St. Paul from Mason City, on the one hand, and from such related producing points, on the other hand.

In Three Forks Portland Cement Co. v. C., B. & Q. R. R. Co., 129 I. C. C. 107, we found the cement rates from Hanover and Trident, Mont., to western and central portions of North Dakota and South Dakota coterminous with original and extended cement Scale IV territories unreasonable and unduly prejudicial to that complainant and unduly preferential of its competitors at Mason City, Steelton, and Duluth to the extent that they exceeded the revised Scale IV rates.

Louisville, about 22 miles southwest of Omaha, Nebr., is served by the Chicago, Burlington & Quincy, the Missouri Pacific Railroad Company, and the Chicago, Rock Island and Pacific Railway Company. It is in Scale III territory about 10 miles beyond the western border of Scale II territory. Complainant started operations in 1929 after the establishment of a general basis of cement rates in western trunk-line territory. Scale II rates apply generally from Louisville to Scale II territory and to Omaha and intermediate points, and were approved in Dewey Portland Cement Co. v. Atchison, T. & S. F. Ry. Co., 174 I. C. C. 87. A key-point rate of 16 cents, which is 1 cent less than the Scale II rate, was prescribed from

Louisville to St. Paul in Ash Grove Lime & P. C. Co. v. Chicago & N. W. Ry. Co., 168 I. C. C. 443.

In establishing rates from Louisville to the considered destinations defendants followed the suggestion in the first Mason City case and repeated in the second Mason City case. Thus the rates from Louisville and Mason City to St. Paul being 16 and 11 cents, respectively, the rates from Louisville to the considered destination territory were made 5 cents over the Mason City rates. Constructing the rates over Mason City from mills south thereof gave them generally lower rates than revised Scales III or IV, whereas from Louisville it had exactly the opposite effect, the short-line distances being calculated through Sioux City, Iowa, north of Louisville, while the rates are made through St. Paul, northeast of Louisville, resulting in the rates being based so to speak on two sides of the triangle instead of by use of the short-line distance over the other side of the triangle. This created rates from Louisville higher than the scales, using the short 3-line distances and a fourth line when it would reduce the distance 30 miles, this being the method provided in Oklahoma Portland Cement Co. v. D. & R. G. W. R. R. Co., 128 I. C. C. 63. Complainant seeks rates based on revised Scales III and IV and the short distances. It compares the present rates from the alleged preferred points and from Louisville to 46 representative points in the destination territory with rates from and to the same points based on revised Scales III and IV, using the above-mentioned principle for obtaining distances. The rates from Louisville, with two exceptions, are higher than the revised scales, the average being 2 cents and the maximum, 4.5 cents. To a few destinations the rates from cement mills south of Mason City are higher than these revised scales. The average from Chanute is 1 cent under, St. Louis 3 cents under, Hannibal 2.4 cents under, Sugar Creek 0.6 cent under, Buffington 1.8 cents under, and La Salle 1.6 cents under the scales. A barrel of cement weighs 380 pounds and a rate disadvantage of 2 cents amounts to 7.6 cents per barrel. Cement is a standard commodity governed by established specifications, and a few cents per barrel difference in the price frequently controls the sale. While revised Scale III now applies from Louisville to the extreme northern boundary of Scale III territory in South Dakota, immediately over the line the rates are based on the excess of the Louisville-St. Paul rate over the Mason City-St. Paul rate, which increases the rate as much as 8 cents for additional distances of 5 to 10 miles.

Summarizing, the record discloses that the rates from Duluth and Steelton, including the intrastate rates, and from Mason City are the same as revised Scales III and IV; that the rates from Hanover and Trident to extended Scale IV territory are the same as revised

Scale IV; that the rates from cement mills south of Mason City in approximately 80 per cent of the cases are less than these revised scales; and that a few of the rates from Rapid City, S. Dak., another of the alleged preferred points, are approximately on the revised Scale IV basis, although to many points in the territory involved no joint rates are in effect from this origin, it also being true that the rates from Rapid City are on the Scale IV basis not only to Scale IV territory but also to points in Scale III territory. The rates assailed are in practically all instances higher than the revised scales.

Some of the defendants favor the complaint, others, while admitting that complainant's evidence demonstrates inequalities resulting from the present adjustment, maintain that they should not be forced to establish whichever of the two bases happens to give a particular mill the lower rate, and that either all the producing mills should be on the full scale basis as Mason City and Duluth are now, or that all the mills south of Mason City, including Louisville, should take rates made differentially over Mason City. Practically the same position is taken by the Lehigh Portland Cement Company. It does not favor the view expressed by division 2 in the first Mason City case and repeated by division 1 in the second Mason City case. It argues that the fact that the rates assailed are higher than the established distance scales whereas rates from other producing points south of Mason City are substantially below the level of those scales demonstrates the fallacy of this so-called formula of rate making, and that the recommendation should be rescinded, thus allowing the scales to apply from all producing points. However, if the rates from other mills south of Mason City are to remain on the differential basis, it urges that no exception be made of Louisville. There is at present no order outstanding requiring the maintenance of the differential basis of rates from producing points south of Mason City. If defendants deem that a readjustment of the rates from producing points other than Louisville is necessary to harmonize with the findings hereinafter made, the propriety of such adjustment will be determined, if necessary, upon petitions for suspension or in a suspension proceeding.

Defendants call attention to the situation in connection with the long-and-short-haul provision of section 4 of the act which would arise under the application of a strict mileage adjustment. Their main lines in the considered destination territory run east and west, resulting, for operating reasons, in the use of circuitous routes from points such as Louisville. For example, the present rate from Louisville to Wahpeton, N. Dak., on a branch line of the Northern

Pacific Railway Company is 23.5 cents and the rate sought is 21.5 cents. Application of the latter rate at intermediate points would reduce the rates on this branch from Wahpeton back to Wadena, Minn., thence along the main line to Little Falls, Minn. Similar examples are given for other defendants. Fourth-section relief is sought because to maintain a parity of rates at competitive points defendants would be forced to make substantial reductions in prescribed rates over a wide stretch of territory involving an area extending from the central part of North Dakota to approximately 100 miles north of St. Paul. Complainant offers no objection to the granting of this relief as long as the prescribed scales are maintained at the competitive junction points. No fourth-section application was set for hearing in this case, and if defendants deem it necessary to have this relief as the result of our order entered herein they should file application in the regular manner.

We find that the rates assailed are, and for the future will be, unreasonable and unduly prejudicial to complainant to the extent that they exceed or may exceed revised Scale III rates to extended cement Scale III territory in Minnesota, North Dakota, and South Dakota, and revised Scale IV rates to extended cement Scale IV territory in North Dakota, for distances computed according to the method prescribed in Oklahoma Portland Cement Co. v. D. & R. G. W. R. R. Co., supra.

An appropriate order will be entered.

190 I. C. C.

INVESTIGATION AND SUSPENSION DOCKET No. 3775

TRANSIT WEIGHTS ON HAY IN CENTRAL FREIGHT ASSOCIATION TERRITORY

Submitted September 12, 1932. Decided November 29, 1932

Proposed changes in rules governing weights on hay and straw, in carloads, from and between points in central territory found not justified. Suspended schedules ordered canceled and proceeding discontinued.

J. L. Aber for respondents.

J. C. Suttie and J. A. A. Geidel for protestants.

REPORT OF THE COMMISSION

DIVISION 3, COMMISSIONERS MCMANAMY, BRAINERD, AND LEE BY DIVISION 3:

By schedules filed to become effective July 1, 1932, respondents proposed certain changes in their rules governing weights on hay and straw, in carloads, between points in central territory and from points in central territory to points in eastern trunk-line and Canadian territories, as set forth in supplement 3 to Agent B. T. Jones's tariff I. C. C. No. 2499 and supplement 14 to the Baltimore and Ohio Railroad Company tariff I. C. C. No. 22230. Upon protest of the National Hay Association of Omaha, Nebr., and the Grain and Hay Exchange of Pittsburgh, Pa., the said schedules were suspended until February 1, 1933.

The present rules governing weights on hay and straw in central territory are as follows:

1. The freight charges on shipments of Hay or Straw, in carloads, will be computed on basis of weights as certified to originating carrier by shippers at the time of shipment, subject to minimum carload weight as provided by the current classification or commodity tariff governing.

2. When it is impossible for the originating carrier to obtain certificate of weight for any shipment, such shipment shall be weighed on track scales at point of origin, or en route, and such scale weight used, subject to minimum weight as provided by current classification or commodity tariff governing; if not weighed on track scales, or if certificate of weight is not furnished, shipment shall be billed at the following estimated weights:

Cars 36 feet 6 inches or less in length_-_.

Over 36 feet 6 inches in length_.

27,000 lbs. --30,000 lbs.

3. Regular and card waybills for Hay or Straw, billed at above mentioned estimated weights, should bear notation, viz: “Weigh and Correct."