plainants conclude that it is not improper to suggest the use of an arbitrary figure of 50 cents per car as representing approximately the amount of the extra clerical expense incident to a transited shipment.

Defendants' cost data. In rebuttal of complainants' partial showing as to transit costs and as evidencing the alleged approximate cost to them of performing the transit service, defendants rely upon the results of certain cost studies made by several of the carriers at a few of the creosoting-in-transit points on their respective lines. The results of some 21 of these studies, 11 of which were introduced in evidence at the prior hearing and 10 at the further hearing, are summarized in the following table wherein the cost per car as determined by defendants, both excluding and including taxes and return on investment is compared with approximate average revenue per car yielded by the 2.5 cent transit charge:

1 The total costs shown in column 4 above are based upon the operating ratio of the individual road applied to the costs shown in column 3, except at Waynesboro, Va., where the amount in column 4 includes 6 per cent return on the value of the property used in switching service.

The amounts shown in columns 3 and 4 above do not include any charge for maintenance of main tracks over which transit switching operations are conducted or for maintenance of yard offices, scales, scale houses, water stations, fuel stations, engine houses, or other structures in the yards or terminals. Also, they do not include any clerical expense for billing, checking, accounting for and policing the transit traffic. At Atlanta the Central of Georgia directly serves the creosoting plant, and the amount above shown for the transit cost at that place includes the per diem reclaim payments of $3.39 on the inbound and $3.39 on the outbound loads to and from the plant, but does not include the switching charges of that road.

The amounts in columns 3 and 4 do not include anything for the expense of one extra classification service in the railroad yard required for the transit car inbound and outbound over that for the through car. The creosoting plant at Louisville, Ky., is directly served by the Kentucky and Indiana Terminal Railroad Company, and the transit cost above shown at that place includes the switching charges of that carrier for the movement of the transit loads to and from the plant and the per diem reclaim payments. Not shown.

The record does not show the average revenue per car received from the transit charge at this place or the average loading per car. Based upon the average revenue per car at the 15 places shown in the table, the average for all was $12.54 per car. This, however, is merely an average of the figures at each place and is not a weighted average.

The creosoting plant at Savannah is served directly by the Savannah & Atlanta Ry. The transit costs of the Atlantic Coast Line and Seaboard Air Line at Savannah include per diem reclaim payments to the Savannah & Atlanta of $3.48 on the inbound and $3.48 on the outbound transit cars to and from the creosoting plant. The charge of the Savannah & Atlanta of $2.25 for the inbound and $2.25 for the outbound movement between Savannah and the creosoting plant at Fort Wentworth is paid by the creosoting plant.

The record does not show the average revenue per car received from the transit charge at this place or the average loading per car. Based upon the average revenue per car at the 15 places shown in the table, the average for all was $12.54 per car. This, however, is merely an average of the figures at each place and is not a weighted average.

7 The transit cost shown does not include anything for station agency, rate bureau, and claim bureau expenses, as the amounts claimed for these items in the cost study were excluded in response to complainants' objection to their admission on the ground of being hearsay evidence.

No single formula was used in arriving at the costs indicated in the above table. Six of the studies, namely, those of the Illinois Central at Grenada and Jackson, Miss., and of the Gulf, Mobile and Northern at Jackson, Meridian, Louisville, and Mobile were made under the so-called Coverston-Saur formula, and the study at Grenada having been introduced at the prior hearing and the remaining five at the further hearing. This formula has been quite extensively used in the ascertainment of switching and terminal costs in various proceedings. The methods employed in the formula were described in the prior report and also in reports in some of the other cases referred to in the footnote. In the application of this formula in the instant proceeding special tests and studies were made to ascertain the amount of operating expenses incident to clerical and switching services and for the use or detention of the cars, to the aggregate of which the operating ratio of the individual carrier was applied to obtain the total cost, inclusive of operating expenses, taxes, and average return upon investment. Defendants do not contend that the results of their studies are exact, but assert that they are fairly representative of the approximate cost to the carriers in rendering this transit service at the several places.

The Coverston-Saur formula has been used by carriers in switching and terminal cost ascertainment in Southern Class-Rate Investigation, 100 I. C. C. 513, and other proceedings including Western Trunk Line Class Rates, 164 I. C. C. 1, where the formula was used in the study of class-traffic terminal costs by 18 Class I railroads at 171 stations in 118 places throughout western trunk-line territory and Illinois.

The burden of proof in this proceeding rests upon complainants to show unreasonableness of the transit charge and this, of course, may be based upon a proper showing as to the cost involved. Complainants' evidence, however, is not persuasive that the 2.5-cent transit charge exceeds the limit of reasonableness. They did not complete their showing as to the extra cost incident to the transit service and on brief appeared to have omitted from their estimates of such extra costs certain items urged at the further hearing and to have made changes in others.

In several instances the creosoting plants are reached by the rails of carriers other than line-haul carriers, whose tariffs authorize the stop-off in transit and publish the charge for such stop-off. Where the plants are reached by the rails of the line-haul carriers, no extra charge is imposed for the switching movements. The tariffs of the line-haul carriers, although generally providing for absorption of connecting line switching charges on competitive traffic, do not provide for the absorption of connecting-line switching charges on noncompetitive traffic. Neither in the original complaint nor by the amendments thereto are switching charges of connecting lines brought in issue, nor is the failure of line-haul carriers to absorb connecting-line switching charges alleged to be unreasonable or otherwise unlawful. It is asserted that in the determination of a just and reasonable transit charge the carrier is not entitled to double compensation for switching incident to the practice but here there is no double compensation paid any carrier for the same service. The switching charges of connecting lines are for the service of transporting the cars to and from the plants reached by them. The transit charge, i. e., the stop-off charge, is for services performed by the line-haul carriers permitting the stop-off; and switching of inbound and outbound loaded cars by the line-haul carrier is but one of several services rendered. Collateral services include emptycar switching, detention of cars, transfer of cars from through to local trains and vice versa, additional clerical services, and policing of the transit arrangement. While defendants' estimates of costs in certain instances include the switching by connecting lines, there is no indication that the exclusion of this service would produce a figure that is lower than the charge assailed. In Federal Match Corp. v. G. N. Ry. Co., 128 I. C. C. 415, 418, we stated that charges for transit are presumably assessed to cover the extra cost of the carrier permitting the transit arrangement. In that case, which dealt with transit practices in the Northwest in respect of lumber, we approved the collection of connecting-line switching charges in addition to a uniform transit charge and found the connecting-line switching charges there assailed not unreasonable.

Our finding in the prior report is tantamount to a finding that connecting-line switching charges must be absorbed by the line-haul carriers publishing the stop-off charge. That finding was not warranted.

Upon further hearing and reconsideration the finding relating to the connecting-line switching charges is rescinded and the finding that the 2.5-cent stop-off charge assailed is not unreasonable is affirmed.

The complaint will be dismissed.

EASTMAN, Commissioner, dissenting in part:

The report of the majority contains a fairly ample statement of the contentions of complainants, a brief statement of the contentions of defendants, and a conclusion that complainants have not proved their case. No one reading the report and having no other information could know whether the conclusion is right or wrong. The evidence has, however, been studied and analyzed with considerable care, and the results were set forth in some detail in the examiner's proposed report, although they are omitted here.

I have gone over this analysis and it leaves me in doubt on a number of points. With complainants' general theory I am in accord. Transit is an auxiliary service, superimposed upon through service. The charges for it should be determined by the extra expense which it imposes upon the carriers, plus a reasonable profit. Care must be taken, therefore, to avoid any allocation of costs which ascribes to the transit service any part of expense which would be incurred in any event in connection with the through service if transit were not allowed. The cost estimates before us are unsatisfactory in this and other respects. Assuming, however, that the transit charge should be based on average costs at all transit points, and regarding the proceeding strictly as a lawsuit between the parties, I am inclined to agree that complainants have not proved their case.

But should these premises be accepted? The Supreme Court in Central R. R. Co. v. United States, 257 U. S. 247, 255, has made it clear that transit service is to be regarded "as a matter local to the railroad on which the transit point is situated." That being so, it is difficult to understand how the charge levied by a particular carrier for such local service can be justified, even in part, by the expense incurred by some other carrier in providing similar local service at some other point. It may be that for competitive reasons both the carriers and the shippers would prefer to have a uniform charge at all points, but that, as I see it, does not concern our duty under the law. If we found a relatively low charge reasonable at

a particular point, other carriers would be free to meet such charge competitively, if they cared to do so.

Nor am I satisfied that in a case like this we have done our full duty by merely receiving and considering the evidence submitted by the parties. Plainly complainants have no adequate means of ascertaining and presenting the costs which the carriers incur in a particular service. That is a matter peculiarly within the knowledge of the carriers. On the other hand, in view of their interest in sustaining the charges, it is hardly to be presumed that the carriers' presentation of the matter will be free from bias. Where such questions of cost of service are involved, I know of no way of assuring an adequate disclosure and presentation of the facts, unless the commission takes a hand in their ascertainment, at least by way of guidance and supervision; and I believe that we should take such a part in the development of the facts, for the proper protection of the public interest. That is one of the reasons why the commission, unlike a court, has been equipped with expert assistance and full powers of investigation on its own behalf.

The finding in our prior report with reference to switching service has been misunderstood, at least by some. In presenting the cost of transit service at certain points, my understanding is that the carriers included the cost of switching service for which separate switching charges were paid by the shippers. Obviously, such costs should have been eliminated or the charges paid should have been included as a credit against them. We endeavored by our finding to prevent a duplication of compensation for the same service. Possibly, the transit charges at some of these points can be justified, even if the costs estimates are properly adjusted to avoid duplication. However, the difficulty is, as I have already indicated, that the entire cost evidence is of so dubious a character.

One further matter should be mentioned. It has been shown that the charges for similar transit service at points in central, western, and southwestern territories are much less than that here in issue. The majority dismiss this evidence with the comment that "these comparisons do not afford a reliable basis for the determination of the reasonableness of the charge assailed." The presumption is that these compared charges are below a reasonable level. Under the doctrine of Central R. R. Co. v. United States, supra, complainants can not attack these other charges under section 3. Yet complainants are undoubtedly affected competitively by their existence, and probably are prejudiced. However, if the decision of the majority in this case stands, complainants can no doubt attack these other charges under section 1 and ask us to prescribe reasonable minima, or they can petition for an investigation on our own motion. In the