Defendants compare ton-mile earnings of 15.1 mills yielded by the assailed rate over the short-line route with ton-mile earnings ranging from 15 to 16.5 mills under rates from Elysian to six other Missouri points, 578 to 698 miles. Rates from Moorhead, St. Paul, and Elk River, Minn., to nine Kansas points, 514 to 750 miles, yield from 15 to 19.8 mills per ton-mile. In the Southwestern revision, 27.5 per cent of first class was prescribed on potatoes, and in Leonard, Crosset & Riley v. Akron, C. & Y. Ry. Co., 176 I. C. C. 309, rates thereon based on 27.5 per cent of first class were prescribed from points in western Minnesota and eastern North Dakota to points in western trunk-line, official, and southern territories. The short-line haul from Elysian to Rolla is largely in Zone I of western trunk-line territory, and 27.5 per cent of the first-class rate prescribed in the western trunk-line class-rate revision for a distance of 614 miles in Zone I is 44 cents. Rates from Minnesota to southern Missouri points in southwestern territory are based on the southwestern scale, and that scale is somewhat higher than the Zone I scale.

We find that the assailed rate was not unreasonable or otherwise unlawful. The complaint will be dismissed.

190 I. C. C.

FOURTH SECTION APPLICATION No. 14500

CLASS AND COMMODITY RATES IN TEXAS

Submitted August 10, 1932. Decided January 12, 1933

Authority granted, on conditions, to establish and maintain certain interstate class and commodity rates between points in Texas, and between points in Texas and Shreveport, La., group without observing the long-and-shorthaul provision of section 4.

B. F. Batts, G. C. Bowen, G. H. Braun, L. J. Deasy, J. R. Peel, C. H. Pistor, J. L. Richardson, S. R. Shields, and George F. Thompson for applicants.

REPORT OF THE COMMISSION

DIVISION 2, COMMISSIONERS AITCHISON, PORTER, AND TATE BY DIVISION 2:

Exceptions were filed by applicants to the report proposed by the examiner. Our conclusions differ slightly from those recommended by him.

Carriers parties to Agent A. C. Fonda's tariff I. C. C. No. 296, apply for authority to establish and maintain certain interstate class and commodity rates between points in Texas, and between points in Texas, on the one hand, and Shreveport, La., and points grouped therewith, on the other, including rates on export, import, and coastwise traffic between Texas Gulf ports and Rio Grande crossings, on the one hand, and the territory embraced in the abovementioned tariff, on the other, without observing the long-and-shorthaul provision of section 4 of the interstate commerce act. Rates are stated in cents per 100 pounds and do not include the emergency increases authorized in 1931.

Class rates as well as numerous commodity rates within the considered territory have been prescribed or approved in the southwestern revision, and other proceedings dealing with individual commodities, and departures therein are said to be protected by outstanding fourth-section orders. Generally speaking, relief is sought in all untreated commodity rates, except rates now under consideration in Docket No. 17000. These untreated rates consist of (a) distance commodity scales, (b) distance class scales, and (c) maximum specific commodity rates, the last two types published for alternative use only. The distance scales, both class and commodity, consist of single-line rates determined by the use of the shortest single-line

distance between origin and destination, and generally higher jointline rates based on the absolute short-line distance by routes over which traffic can be moved without transfer of lading. The applicable rate is the single or joint line rates, whichever is lower.

The considered rates were established, and are maintained, as a result of Railroad Commission of Louisiana v. A. H. T. Ry. Co., 48 I. C. C. 312, hereinafter called the Shreveport case, wherein rates between Shreveport and points in Texas were found unduly prejudicial to Shreveport to the extent they were higher than contemporaneous rates for like distances between points in Texas. That decision had the effect of according Shreveport the same rates as applied within Texas. Since points in Texas are intermediate on traffic to and from Shreveport, the Texas lines, applicants assert, found it necessary to publish the Texas intrastate basis on interstate traffic throughout Texas. The orders in the Shreveport case were vacated in May, 1922, but the principle is still observed by the Texas lines. Temporary orders Nos. 5808 and 6696 authorized departures resulting from compliance with the Shreveport case, pending disposition of applications filed pursuant to the June, 1910, amendment to section 4. These applications relating to the considered adjustment have been denied by order No. 10767, effective 90 days after the date of issuance of the order entered herein, but not later than June 3, 1933.

Applicants seek authority to establish and maintain on interstate traffic (a) between all points in Texas, over routes wholly within Texas, and between points in Texas, on the one hand, and Shreveport, on the other, the lowest interstate rate between the same points, and (b) between points in Texas over routes through adjoining States, the lowest intrastate rate between the same points, without observing the long-and-short-haul provision, the equidistant provision, or any circuity limitations.

Routes within Texas.-The relief sought over routes within Texas is similar to that usually required in distance-rate adjustments. The interstate rates, which are on the intrastate basis, are determined by the shortest possible mileage between origin and destination, except in those instances where lower rates are made by the use of longer single-line distances than shorter joint-line distances, and except where differentials are added to standard rates. Due to operating conditions, it frequently occurs that the rates so determined are not applicable over the rate-making routes. The alternative use of the single-line and joint-line scales often results in different rate levels at intermediate points, depending upon whether or not more than one route is available. Considered as a whole, however, the adjustment is uniform, in that rates from and to all points are determined in exactly the same manner.

Departures generally occur by reason of longer routes meeting the rates of shorter routes at competitive points, and maintaining at intermediate points on such longer routes, higher rates based on the joint-line or single-line scale. Where, however, the rate over a joint route between competitive points is determined by a slightly longer single-line route between the same points, higher scale rates may result at intermediate points on the shorter joint route. For example, the rate on coconut oil, in carloads, from Houston, Tex., to Dallas, Tex., over the joint route of the Burlington-Rock Island Railroad Company and Fort Worth and Denver City Railway Company to Corsicana, Tex., and the Texas & New Orleans Railroad Company beyond, 242 miles, is 28 cents, based on the single-line distance of 250 miles over the Burlington-Rock Island, and Fort Worth & Denver City, which lines are subject to single-line rates. To Trumbull, Tex., an intermediate point on the Texas & New Orleans, the rate is 29 cents based on the joint-line distance to that point, 221 miles.

The Texas intrastate rates, which are determined in the same manner as the interstate rates, are applicable over all available routes within Texas. Applicants contend, with apparent reason, that the adjustment approved in the Shreveport case can not be continued unless relief is granted. They show, for example, that between competitive points, the circuitous routes, and in some instances the direct routes, must have relief to maintain the scale rates at intermediate points; otherwise, the adjustment at such intermediate points will be relatively lower than for like distances between points on noncompetitive routes, thus recreating, in some instances, the conditions which brought about the complaint in the Shreveport case.

The rates at higher rated intermediate points are based upon the scales which apply uniformly throughout the considered territory, on interstate as well as Texas intrastate traffic. There was no opposition against the continuance of this basis. The record justifies relief from the long-and-short-haul provision over routes within Texas, also over routes from and to Shreveport and points grouped therewith where the scale rates are observed at all intermediate points, subject to the limitations hereinafter specified.

Routes through adjoining States. Here, the departures are said to result from the Texas intrastate scales being lower than the rate level between points in Texas, on the one hand and points in adjoining States, on the other. What is said under the above heading applies also to Shreveport and points grouped therewith, as those points. are included in the Texas adjustment resulting from the Shreveport case. Due to the peculiar geographical shape of Texas, particularly the so-called Texas Panhandle, the short routes between points in

Texas are sometimes made over lines operating through adjoining States, or interstate routes embracing one or two lines may represent more practical routes than shorter intrastate routes composed of three or more lines. For many years applicants have handled traffic between points in Texas over interstate routes on basis of the intrastate rates without observing such rates at intermediate points. Following the amendment of June, 1910, to section 4, and prior to 1916, this practice was continued under authority of appropriate applications, and after 1916, by virtue of specific fourth-section orders. The Texas intrastate scales have been prescribed or approved by the Railroad Commission of Texas, and changes therein must have its approval. Emphasizing that the intrastate rates are beyond their control, applicants urge that relief is necessary if they are to continue handling Texas traffic without disrupting the present adjustment at intermediate points.

The general situation is where interstate routes desire to handle. Texas traffic between competitive points served by intrastate routes between the same points. For example, between Amarillo, in the Texas Panhandle, and Fort Worth, in north-central Texas, the Chicago, Rock Island and Pacific Railway Company, hereinafter called the Rock Island, operating through southwestern Oklahoma, desires to meet the rates applicable over the direct intrastate route of the Fort Worth & Denver City. In some instances, however, the interstate lines request relief in rates between their local Texas points. For example, rates from local points on the Rock Island east of Amarillo to local points on that line north of Fort Worth, are determined by the intrastate distances through Amarillo. Applicants assert that unless relief is granted, the Rock Island will be forced either to observe the Texas scales at intermediate points in Oklahoma or surrender the traffic to its connections at Amarillo.

For the most part, routes through adjoining States on which departures occur are within the circuity limitations set out in the margin.1 Seventeen routes shown of record, ranging from 204 to 915 miles, average 140 per cent of the direct intrastate routes. Four of these exceed the circuity limitations. Over the remaining 13, the lowest earnings shown are, on asphalt and asphaltum, average load

1 Limitations that relief shall not apply to circuitous lines or routes where the distance over the short line or route (1) is 150 miles or less and the longer line or route is more than 70 per cent circuitous; (2) exceeds 150 miles and the longer line or route is more than 50 per cent circuitous, except that where the distance over the short line or route exceeds 150 miles and the distance over the longer line or route does not exceed 255 miles, relief will apply to such longer line or route even though it is more than 50 per cent circuitous; and (3) exceeds 1,000 miles and the longer line or route is more than 33% per cent circuitous, except that where the distance over the short line or route exceeds 1,000 miles and the distance over the longer line or route does not exceed 1,500 miles, relief will apply to such longer line or route even though more than 33% per cent circuitous.