water bottled and sold by complainant is known as "Waukesha Imperial" and is produced from a spring on the brewery premises. Complainant manufactures yearly from 30,000 to 40,000 barrels of beer, four-fifths of which is shipped from Waukesha, and it bottles and ships approximately 50 carloads of water a year. Most of the water shipped by complainant is handled and bottled as it comes from the spring, and in markets like Chicago and Milwaukee is delivered to families in 10-gallon cans and half-gallon bottles. Some of the water is carbonated before it is shipped, but to what extent does not appear. Six or more large springs of mineral water, considered valuable for medicinal purposes, are located in Waukesha, and several companies are engaged exclusively in the business of preparing this water for sale. Extensive shipments of these Waukesha waters are made in tank cars, barrels, carboys, cases and bottles to all parts of the United States. About one-third of the total amount of mineral water shipped by all dealers from Waukesha yearly is shipped in cases and bottles in less than carload lots, and this is about the proportion of less than carload shipments by complainant.

There are located in Waukesha and in Milwaukee, Wis., which is about 20 miles distant, a number of breweries which manufacture and sell beer and beer products only, and which compete with complainant in supplying the trade.

Shipments of beer and beer products and mineral water from Waukesha, Milwaukee and from other points in Wisconsin to points west of the Mississippi River are governed as to rates and conditions of shipment by the Western Classification. Under this classification beer and beer products and mineral water in cases and bottles each take the fifth-class rate in shipments of carload lots and the third-class rate in shipments of less than carload lots. The classification allows the mixing of beer, beer tonic, hop tonic, hop-tea tonic and weiss beer in cases and bottles to make a carload taking the fifth-class rate, but does not allow the mixing of mineral water in cases and bottles with beer and beer products in cases and bottles to secure the carload rate on the combined shipment.

Mixed shipments of mineral water and beer originating in territory east of the Indiana-Illinois State line and destined to points on the Mississippi River, but not west thereof, are transported at the carload rate under the classification which obtains in Official Classification territory. In that territory which includes that part of the country north of the Potomac and Ohio rivers, east of the Great Lakes, and east of an imaginary line drawn from St. Louis, Mo., to Chicago, Ill., a general rule is in force which allows the mixing of all commodities taking the same less than carload rates to secure the carload rate on the entire shipment. This rule does not generally

prevail in Western Classification territory, which comprises that part of the country west of the Mississippi River and west of Official Classification territory. Through an exception to the Western Classification, made to conform with the Illinois State classification, and with a desire, as stated by witnesses for the defendants, to place the Milwaukee gateway on a parity with Chicago, complainant, located at an intermediate point, can ship its product to all points in Illinois, with the exception of Chicago, which takes a commodity rate, in mixed carloads under the Official Classification, which also obtains with respect of shipments to all points in Official Classification territory. Whilst shipments of beer and mineral water in cases and bottles in mixed carloads at the carload rate may be made from Ohio and Indiana points to the Mississippi River and intermediate points, the evidence does not show that any such shipments have been made, or that complainant has ever met competition of this character from any point east of the Indiana-Illinois State line.

Upon the facts disclosed in this record, and principles announced in the recent case of Paper Mills Company v. Pennsylvania Railroad Company et al., 12 I. C. C. Rep., 438, we are of opinion that the re-. fusal of defendants to apply their carload rates to the transportation of mineral water and beer and beer products in mixed carloads, where the transportation is controlled by the Western Classification, has not been shown to be unlawful. The complaint will, therefore, be dismissed, and an order will be entered accordingly.

CLEMENTS and LANE, Commissioners, dissenting:

The prevailing opinion is based on the assumption that a rule is legal and reasonable which denies to a shipper the right to mix in one carload bottled mineral water and bottled beer-two articles of approximately equal value, packed in the same manner, and bearing the same class rate. No transportation reason can be given for the application of such rule under such circumstances, and no competitive condition has, in our opinion, been shown to justify such a rule in this instance.

13 I. C. C. Rep.

No. 1197.

BANNER MILLING COMPANY

v.

NEW YORK CENTRAL & HUDSON RIVER RAILROAD

COMPANY.

Submitted December 3, 1907. Decided December 16, 1907.

1. Complainant insisted that the differential of 2 cents per 100 pounds upon grain and grain products to New England points in favor of New York was excessive; Held, following Boston Chamber of Commerce v. Lake Shore & Michigan Southern Ry. Co., 1 I. C. C. Rep., 436; Toledo Produce Exchange v. Lake Shore & Michigan Southern Ry. Co., 5 I. C. C. Rep., 166, that upon the record the Commission would not disturb this differential.

2. Complainant is engaged in grinding spring wheat flour at Buffalo in competition with mills located at Minneapolis. On May 1, 1907, rate from Buffalo to New York on flour was advanced from 10 cents to 11 cents per 100 pounds, while no similar advance was made from Minneapolis; Held, that this 11 cent rate and one of 13 cents to New England points were unjust and unreasonable and should not exceed 10 cents to New York and 12 cents to New England points.

2. No order will be made in this case pending leave granted the defendant to put in a proportional rate on ex-lake grain, which would correct the discrimination.

Shire & Jellinek for complainant.

A. H. Harris and Clyde Brown for defendant.

REPORT OF THE COMMISSION.

PROUTY, Commissioner:

At the present time three general grades of flour are produced in the eastern portion of the United States. The best, or that which commands the highest price, is ground from spring wheat, the next from Kansas wheat, and the poorest from winter wheat. Kansas wheat is a winter wheat, but harder and so far superior to other winter wheats as to be in a class by itself.

It was claimed by the complainant that these different kinds of flour were not competitive. They are all flour and can all be used for the same general purposes, and to this extent they are competitive. It would appear, however, that spring wheat flour sells for some 50

cents a barrel more than winter wheat flour in the New York market, so that in a more restricted sense it may be said that spring wheat flour and winter wheat flour do not compete. A small advantage in favor of the mill grinding winter wheat would not be felt by the spring wheat mill to the same extent that a similar advantage enjoyed by a competing miller of spring wheat would be.

The spring wheat of the United States is mainly grown in Minnesota and the two Dakotas, and is largely converted into flour at Chicago and points west. Generally speaking, this wheat can be and is milled in transit upon the through rate from the point of origin of the wheat to destination of the flour. The largest milling center is Minneapolis. No milling-in-transit privileges are enjoyed there, but proportional rates upon both wheat and flour are established from that market, which are the equivalent of a milling-in-transit privilege. Duluth is a considerable milling center and wheat coming into this market pays the local rate, while the product again goes out upon the local rate.

Our second largest milling center to-day is what is known as the Buffalo-Rochester district, including the Niagara frontier. The wheat milled in this district is almost entirely spring wheat. This case was tried, together with four others involving the same general questions. Of the five complainants in this case and in the four next succeeding cases, four were engaged almost exclusively in the milling of spring wheat, while the fifth used about 40 per cent of winter wheat. It appears from the testimony that probably 90 per cent of all the wheat milled in this section is spring wheat.

This wheat reaches the mill entirely by the rail and lake route; that is, it is brought to some lake port, ordinarily Duluth, by rail, and from there shipped by water to Buffalo, where it usually reaches the mill by some kind of rail transfer. This wheat pays the regular rail rate up to the lake port, moving from the lake port to Buffalo in tramp vessels at rates varying considerably from season to season and during different portions of the same season.

This complainant is the owner of one of the mills operating at Buffalo and grinding spring wheat exclusively. Its product is mainly disposed of in New England and points east of Buffalo, which take the New York rate or some rate basing upon that. Its complaint is that the rate of 13 cents per 100 pounds on flour from Buffalo to Boston, which was made effective May 1, 1907, is excessive and discriminatory.

Most New England points take the Boston rate, and this rate from Buffalo and points west upon grain and grain products is always 2 cents higher than the New York rate. The complainants

insist that this differential of 2 cents per 100 pounds above New York is excessive.

Rates to New England are higher than those to New York from all western points of origin, and this relation of rates has been approved by the Commission in previous cases: Boston Chamber of Commerce v. Lake Shore & Michigan Southern Ry. Co., 1 I. C. C. Rep., 436; Toledo Produce Exchange v. Lake Shore & Michigan Southern Ry. Co., 5 I. C. C. Rep., 166. The arbitrary of 2 cents per 100 pounds on grain. and grain products, which is added to the New York rate in determining the New England rate, has been for a long time in effect, was established in consequence of, although not exactly in accordance with, the decision of this Commission in the last case above cited, and we are not inclined to disturb it, certainly upon this record. As already said, this Boston rate applies to nearly the whole of New England, often carrying the shipment to out of the way places and by more or less devious routes. On the whole, it does not seem unreasonable that flour going to various points of consumption in New England territory should pay a rate 2 cents above that paid from Buffalo to New York; the average distance would be considerably greater and the average cost of transportation considerably more. This contention of the complainant is not, therefore, sustained.

The real question which we have therefore to consider is whether the rate of 11 cents from Buffalo to New York, that being the base rate upon which these others are established, which went into effect May 1, 1907, is unlawful.

Rates from Buffalo to New York vary with rates in what is known as Central Freight Association territory, the rate from Chicago being the base. On May 1, 1907, the local grain rate from Chicago to New York was advanced 2 cents-from 17 cents to 19 cents-and this occasioned the advance of 1 cent from Buffalo. The complainant insists that this rate of 11 cents is unjust and unreasonable mainly for the reason that it imposes a higher transportation charge upon its product, while the transportation charge which these defendants assess against its competitor remains the same. The exact point of complaint appears, by a comparison of the rate from Minneapolis, which, as already said, is the largest producing center for spring wheat flour, with that from Buffalo.

The all-rail rate from Minneapolis to New York during the summer of 1905 was 22 cents; from Buffalo, 9 cents; during the summer of 1906 the rate from Minneapolis was increased to 25 cents, that from Buffalo to 10 cents; during the summer of 1907 the Minneapolis rate remained at 25 cents, but the rate from Buffalo, beginning May 1, 1907, was advanced to 11 cents.