organized for this purpose and wholly owned by the Winchester Repeating Arms Company, a corporation manufacturing firearms at New Haven. A contract entered into by the New Haven and the Stores Company provides that the goods will be stored in warehouses located at or adjacent to the plant of the Winchester Repeating Arms Company and served by tracks of the New Haven. The New Haven agrees to pay the storage company all charges for labor and storage at the rates set forth in the suspended tariff. The Stores Company agrees to insure the goods while in storage, when expressly requested to do so, at a charge of 8 cents per annum per $100 of declared value. The Stores Company reserves the right to refuse to accept any freight that is not acceptable to it; and it is further agreed that the Stores Company shall not be liable for demurrage charges under any circumstances.

Protestant asserts that the proposed charges are less than the actual cost of performing such services. The proposed labor charges for loading and unloading are 3.5 cents per barrel of 400 pounds or less, 0.875 cent per bag of 105 pounds or less, and 1 cent per 100 pounds on other package or piece freight. Charges for this service at commercial warehouses range from 3.5 cents to 12 cents per 100 pounds. The proposed storage charges also are substantially less than those usually charged by commercial warehouses. The proposed insurance charge is much less than the cost of such insurance when obtained by the owner of the goods from a standard fire-insurance company. Commercial warehousemen customarily do not furnish insurance beyond the usual liability of the warehouseman. An officer of the Stores Company testified that his company had made an investigation and was convinced that it could perform the services profitably at the rates published. Respondents contend that as the Stores Company, a responsible concern, is able and willing to furnish the services at the charges published, shippers should not be deprived of the benefit of such services.

Protestants challenge the right of the New Haven to contract with. a large shipper, either directly or through a wholly owned subsidiary, for the performance of what they term a "nontransportation service." Storage accorded goods at a point intermediate between the point of origin and final destination of the goods is not a necessary transportation service but it is a transportation service for which a carrier may publish charges in its tariff if the privilege is accorded to all shippers without discrimination. See Wharfage Handling and Storage Charges, 59 I. C. C. 488, Amer. Warehousemen's Assn. v. Inland Waterways Corp., 188 I. C. C. 13, Cleveland & St. Louis Ry. v. Dettlebach, 239 U. S. 588, and Southern Ry. v. Prescott, 240 U. S. 632. In the latter case the United States Supreme Court held that

the retention of goods by a carrier as a warehouseman after payment of freight charges and acknowledgment of receipt at destination by the consignee was a terminal service forming a part of the transportation. The Supreme Court also has held that a carrier may contract with a large shipper to perform terminal services for it to the extent of converting a portion of the shipper's premises into a public freight station. The contract with the shipper transmutes it from shipper into carrier's agent, and there is no discrimination because a similar contract is not entered into with other shippers. United States v. Balt. & Ohio R. R. Co., 231 U. S. 274.

It is asserted that the arrangement with the Stores Company will place the latter in a position, by means of extra services and direct or indirect concessions, to accomplish virtual rebates in favor of the owners of the goods. An agent performing service for a carrier under contract does so subject to all the provisions of the interstate commerce act and related acts, including the Elkins Act. The agent may not give to any shipper of property a favor or advantage not publicly offered to all shippers by the published tariffs issued by the carrier. Interstate Commerce Commission v. Reichmann, 145 Fed. 235.

The storage arrangements and the charges published in the suspended tariff are similar to those in tariffs of several New York lines making provision for storage at specified points in the New York Harbor district. The legality of existing arrangements and charges for the storage of property by carriers at the port of New York is now the subject of investigation by this commission in Ex parte No. 104, Part. 6. A tariff of the Grand Trunk Railway system authorizes storage in Grand Trunk steamship sheds at Portland, Me., of traffic reaching Portland by vessel, and publishes storage charges similar to those in the suspended tariff. Storage in transit of crude rubber originating in New York Harbor is permitted by the Maine Central Railroad Company at Portland, and by the Central Vermont Railway, Incorporated, at New London, Conn. Crude rubber is the principal commodity which respondents expect to handle at New Haven. Protestants contend that the further extension of such arrangements to points in New England should not be permitted pending decision of Ex parte No. 104, Part 6. We concur in that view.

The Boston Port Authority asserts that the proposed charges would be noncompensatory and therefore unlawful; and contends. that the proposed arrangement would unduly prejudice the port of Boston. As the arrangement contemplates that the entire amount of the charges for labor and storage are to be turned over to the Stores Company, respondents necessarily would have to absorb the expense of collecting these charges, of remitting to the Stores Company, and

of the additional accounting incident to such transactions. The New Haven serves both New York and Boston. During the past few years considerable tonnage has been diverted from the port of Boston to the port of New York because of the low storage charges under the storage-in-transit tariffs of carriers serving New York. The New Haven is in no way responsible for any undue prejudice against Boston due to the transit arrangements at New York, as it is not a party to these transit tariffs but it should not be permitted to aggravate the situation. Any transit privilege granted at New Haven on traffic from New York should apply to the same extent on traffic from Boston.

The Boston Port Authority also assails the provision in the contract which exempts the Stores Company from liability for demurrage charges. The suspended schedules provide that cars held at the transit point on instructions from the shipper or owner will be subject to the demurrage rules in effect at that point in accordance with tariffs on file with us, and that if demurrage charges accrue they must be collected from the party making use of the transit arrangement. The Boston protestant points out that under the contract the Stores Company may fail for the entire storage period to unload a car not ordered held by the shipper or owner, and still incur no liability for demurrage charges. An arrangement which would permit of such unwarranted detention and misuse of cars clearly is not compatible with the public interest.

We find that the suspended schedules have not been justified. An order will be entered requiring their cancellation and discontinuing this proceeding, without prejudice to respondents' bringing the matter before us again after the decision in Ex parte No. 104, Part. 6.

190 I. C. C.

INVESTIGATION AND SUSPENSION DOCKET No. 3792

STORAGE AT NEW LONDON AND THAMESVILLE, CONN.

Submitted October 24, 1932. Decided December 13, 1932

Proposed storage-in-transit arrangements at New London and Thamesville, Conn., found not justified. Suspended schedules ordered canceled and proceeding discontinued.

Horace H. Powers for respondents.

Charles E. Cotterill, Johnston B. Campbell, and Walter W. McCoubrey for protestants.

REPORT OF THE COMMISSION

DIVISION 5, COMMISSIONERS LEWIS, FARRELL, AND TATE

BY DIVISION 5:

Storage-in-transit arrangements are now in effect at New London, Conn., on crude rubber and certain other commodities. By schedules filed to become effective August 22, 1932, respondents, the Central Vermont Railway, Incorporated, and Central Vermont Transportation Company, proposed to establish storage-in-transit arrangements at New London and Thamesville, Conn., on all carload freight, in packages or pieces, substantially the same as the storage-in-transit arrangements at present in effect at New York, N. Y. Upon protest of the American Warehousemen's Association (Merchandise Division) and the Boston Port Authority, of Boston, Mass., operation of the schedules was suspended until March 22, 1933. The parties have been heard in oral argument.

The proposed schedules provide that carload freight, in packages or pieces, from points within the lighterage limits of New York Harbor may be stored in transit at New London or Thamesville and reshipped within 12 months over the Central Vermont Railway to destinations on that railway and to Montreal, Province of Quebec, Canada, and destinations west thereof at the through rate from original point of shipment to final destination by way of the transit point plus certain labor and storage charges. The proposed schedules would have the effect of changing the present storage-in-transit arrangements at New London on rags and cotton and of canceling the present arrangements on certain commodities from origins and to destinations other than those set forth in the proposed schedules.

Respondents form parts of through differential routes from New York to destinations in the Middle West and Canada. They desire to obtain a larger share of westbound traffic over their differential routes and have arranged to provide storage in transit the same as is accorded at New York on traffic moving over the standard routes. Storage at New York is now under investigation in Ex parte No. 104, Part 6. Importers of crude rubber and other commodities often import raw materials in excess of their immediate requirements. Frequently the ultimate destinations are not known when imported materials arrive at the ports, and it is necessary that provision be made for their storage. The importers who testified desire to use the differential routes but are compelled to use the standard routes for freight requiring storage in transit. Storage-in-transit arrangements on crude rubber were established at New London effective November 1, 1931, and have been used extensively. At the time of the hearing about 4,500 tons of crude rubber were stored in transit at New London.

Protestants take the position that the proposed storage in transit is not a transportation service. It is well settled that storage in transit comes within the meaning of the term "transportation" as defined in section 1 of the interstate commerce act. Amer. Warehousemen's Assn. v. Inland Waterways Corp. 188 I. C. C. 13; cases cited in I. and S. No. 3764, Storage in Transit at New Haven, Conn., decided concurrently herewith.

The proposed storage charges on imported wood pulp are 15 cents per net ton for the first period of 30 days or less, after 15 days' free time, and 5 cents per net ton for each succeeding period of 10 days or fraction thereof. On other commodities the proposed storage charges are, on freight in barrels of 400 pounds or less, 4.5 cents per barrel for the first period of 30 days or less and 2.5 cents per barrel for each succeeding period of 15 days or fraction thereof; on freight in bags or sacks of 105 pounds or less, 1 cent per bag or sack for the first period of 30 days or less, and 0.5 cent per bag or sack for each succeeding period of 15 days or fraction thereof; and on freight in packages or pieces other than barrels, bags, or sacks, 1.5 cents per 100 pounds for the first period of 30 days or less, and 0.5 cent per 100 pounds for each succeeding period of 15 days or fraction thereof. The proposed labor charges, which include handling from and reloading to cars, are 3.5 cents per barrel of 400 pounds or less, 0.875 cent per bag or sack of 105 pounds or less, and 1 cent per 100 pounds on other package or piece freight. The suspended schedules provide that insurance must be placed by the shipper or owner at his own expense, except that upon specific request respond