No. 25003 BARTLETT HAYWARD COMPANY, INCORPORATED, ET AL. v. PENNSYLVANIA RAILROAD COMPANY ET AL. Submitted August 26, 1932. Decided November 22, 1932 Rates charged on ground or pulverized coal, in bags, in carloads, from Chicago, REPORT OF THE COMMISSION DIVISION 5, COMMISSIONERS LEWIS, FARRELL, AND TATE BY DIVISION 5: The shortened procedure was followed herein. No exceptions were filed to the report proposed by the examiner. Our conclusions differ slightly from those proposed by the examiner. Complainants, the Bartlett Hayward Company, Incorporated, and the Western Gas Construction Company, corporations, by complaint filed January 14, 1932, as amended, allege that the rates charged on nine carloads of ground or pulverized coal, in containers, shipped over defendants' lines from Chicago, Ill., Herminie (Rillton), and Irwin, Pa., to Fort Wayne, Ind., and from Irwin to Baltimore, Md., and delivered between July 28, 1928, and December 6, 1929, were unreasonable and seek reparation. Informal complaints containing the same allegations as the formal complaint were filed by the respective complainants on July 28, 1930, and closed on July 15 and August 3, 1931. Charges were collected on two shipments weighing 56,760 and 44,280 pounds from Chicago to Fort Wayne, 152 miles, at the applicable sixth-class rate of 18 cents per 100 pounds. On one shipment, weighing 50,000 pounds, from Herminie to Fort Wayne, 349 miles, and four shipments, three weighing 50,000 pounds each and one 40,000 pounds, from Irwin to Fort Wayne, 343 miles, charges were collected at the applicable sixth-class rate of 23.5 cents. On two shipments, weighing 50,000 and 40,000 pounds, from Irwin to Baltimore, 323 miles, charges were collected at the applicable sixth-class rate of 25.5 cents. Distances shown are those over routes of movement. The applicable rates were subject to a minimum of 36,000 pounds. The 18-cent rate yielded 23.6 mills per ton-mile and 59.8 cents per car-mile. The 23.5-cent rate yielded 13.4 to 13.7 mills per ton-mile and 32.2 to 33.6 cents per car-mile. The 25.5-cent rate yielded 15.7 mills per ton-mile and 35.5 cents per car-mile. The carmile revenues shown are based on the average weights of the shipments from and to the respective points. In American Radiator Co. v. New York Central R. Co., 159 I. C. C. 139, division 4, found that the rates on ground or pulverized coal, in containers, in carloads, from Black Rock, N. Y., Chicago, Ill., Detroit, Mich., and certain points in Pennsylvania to certain destinations in official territory, including the rate from Rillton to Fort Wayne, were unreasonable to the extent that they exceeded 70 per cent of the contemporaneous sixth-class rates, minimum 50,000 pounds. Reparation was awarded. Similar findings were made by division 3 in International Motor Co. v. Pennsylvania R. Co., 174 I. C. C. 297, involving shipments from Pennsylvania points to New Brunswick, N. J., and in Smith Co. v. New York, N. H. & H. R. Co., 176 I. C. C. 532, as to shipments from Irwin and Herminie to Westfield, Mass. On December 3, 1931, pursuant to the eastern class-rate revision, the sixth-class rates from Chicago, Herminie, and Irwin to Fort Wayne became 18, 24, and 24 cents, respectively, and from Irwin to Baltimore, 24 cents. Defendants introduced no evidence. We find that the rates assailed were unreasonable to the extent that they exceeded 12.5 cents, minimum 50,000 pounds, from Chicago to Fort Wayne, and 17 cents, minimum 50,000 pounds, from Herminie and Irwin to Fort Wayne and from Irwin to Baltimore; that complainants received the shipments described and paid and bore the charges thereon; that they were damaged thereby in the amount of the difference between the charges paid and those which would have accrued at the rates and minimum herein found reasonable; and that the Western Gas Construction Company and the Bartlett Hayward Company, Incorporated, are entitled to reparation in the sum of $187.42 and $59.50, respectively, with interest. An order awarding reparation will be entered. 190 I. C. C. No. 25218 PHIPPS-REYNOLDS COMPANY v. ST. LOUIS-SAN FRANCISCO RAILWAY COMPANY Submitted October 13, 1932. Decided November 23, 1932 Carload rate charged on rough lumber from Fayetteville, Ark., to Augusta and Wichita, Kans., found not unreasonable. Complaint dismissed. V. E. Anderson for complainant. B. H. Stanage for defendant. REPORT OF THE COMMISSION DIVISION 5, COMMISSIONERS LEWIS, FARRELL, AND TATE BY DIVISION 5: The shortened procedure was followed herein. Exceptions were filed by complainant to the report proposed by the examiner. Complainant alleges by complaint filed April 11, 1932, that the rate charged on five carloads of rough lumber shipped between June 13, 1930, and March 11, 1931, inclusive, from Fayetteville, Ark., to Augusta and Wichita, Kans., was unreasonable. Reparation only is sought. The shipments moved over defendant's line from Fayetteville, a local point, to Augusta and Wichita, 272.5 and 292.9 miles, respectively. The applicable rate of 34.5 cents per 100 pounds was charged. When the shipments moved a commodity rate of 29.5 cents subject to rule 77 of Tariff Circular 20 applied on agricultural implement, sleigh, and vehicle wood in the rough, hereinafter called vehicle material, from Fayetteville to Wichita over defendant's line. Augusta is intermediate to Wichita over the used route to the latter point, and on and after October 10, 1930, this 29.5-cent rate also applied from Fayetteville to Augusta under an intermediate rule. Reparation is sought based on that rate. Complainant's evidence is limited to the rate shown above. We have said that, as a general rule, rates on manufactured products should be higher than the rates on the raw material from which they are made. To show that this 29.5-cent rate was a maximum reasonable rate for application on vehicle material, complainant cites Agricultural Implement, Sleigh, and Vehicle Wood, 83 I. C. C. 25, decided September 7, 1923, wherein proposed increases by respond 190 I. C. C. ents of this 29.5-cent rate, and one of like amount from Fort Smith, Ark., to Wichita, to the level of the lumber rates contemporaneously applicable from and to the same points were found not justified. However, that finding did not constitute an approval of these 29.5cent rates as maximum reasonable rates for application on vehicle material, as it was based upon the fact that respondents therein sought to justify the proposed increases by a mere showing that the 29.5-cent rates were less than the contemporaneous lumber rates from and to the same points without showing that the lumber rates themselves were reasonable. Defendant contends that the 29.5-cent rate is a compelled rate and subnormal. Prior to January 15, 1916, the rates on rough lumber and vehicle material from Fayetteville to Wichita were the same. On January 10, 1913, a rate of 19 cents on vehicle material was established from Fort Smith to Wichita by the Midland Valley Railroad Company, the rate-making carrier from and to those points. In order to compete, defendant on February 9, 1913, established thereon a rate of like amount from and to those points over its line, and on January 15, 1916, in order to comply with fourthsection requirements in connection with the 19-cent rate from Fort Smith, reduced the rate on vehicle material from Fayetteville to Wichita to 19 cents. The 29.5-cent rate now applicable thereon from and to the latter points is the original 19-cent rate as modified by the general rate increases and reduction. In Agricultural Implement, Sleigh, and Vehicle Wood, supra, it was stated that as a general rule rates on vehicle material from producing points in Missouri, Arkansas, and Louisiana were upon the lumber basis, but that there were a number of exceptions including the 29.5-cent rate from Fayetteville and Fort Smith. While the maintenance of a rate on rough lumber higher than that applicable from and to the same points on vehicle material presents an anomalous situation, the evidence does not show that the latter rate is a reasonable maximum one for application on vehicle material. Consequently, it may not be used as a criterion in measuring the level of the assailed lumber rate. Hammond Lumber Co. v. Southern P. Co., 156 I. C. C. 731, 737. The assailed rate is grouped both as to origins and destinations. While Wichita and Augusta are not far from the center of the destination group, Fayetteville is in the extreme northern portion of the origin group, which extends south to lower Louisiana and Texas points, and the distances from Fayetteville to Wichita and Augusta are considerably less than the average distance between the two groups. Consequently, while the group lumber rate assailed is higher than the point-to-point rate on vehicle material from Fayette ville to Wichita and Augusta, if the average distance between the groups were used in connection with the assailed rate, the assailed rate would not compare unfavorably with the rate on vehicle material. The 34.5-cent rate applies to Wichita for short-line hauls of over 700 miles. We find that the rate assailed was not unreasonable. The complaint will be dismissed. FARRELL, Commissioner, dissenting: I dissent from the conclusion of the majority because I think the assailed rate of 34.5 cents per 100 pounds exceeded the maximum of reasonableness at the time it was applied to the transportation involved to the extent, at least, that it was greater than 29.5 cents. A rate which would otherwise exceed the maximum of reasonableness for transportation over certain distances from particular shipping points can not be made reasonable by applying it also to transportation over much longer distances from other shipping points, and as shown by the record in this proceeding, although not set forth in the majority report, the ton-mile earnings on the shipments to Wichita were 23.58 mills, while those pertaining to the shipments to Augusta were 25.32 mills. Car-mile earnings in connection with the Wichita shipments were, respectively, 72.89 and 77.37 cents; and such earnings. pertaining to the Augusta shipments were, respectively, 54.06, 55.32, and 90.52 cents. 190 I. C. C. |