No. 1200. WASHBURN-CROSBY COMPANY v. LEHIGH VALLEY RAILROAD COMPANY. Submitted December 3, 1907. Decided December 16, 1907. Decision in Banner Milling Co. v. N. Y. C. & H. R. R. Co., supra, cited and applied. Shire & Jellinek for complainant. Kenefick, Cooke & Mitchell for defendant. REPORT OF THE COMMISSION. PROUTY, Commissioner: This case involves the rate on flour from Buffalo, N. Y., to Irvington, N. J., which is 11 cents per 100 pounds, and which the complainant attacks as unlawful. The complaining company is engaged in the manufacture of flour at Buffalo, and made an actual shipment from there to Irvington, in May, 1907. Irvington, N. J., is a New York point, and it is not claimed that it should take a higher rate from Buffalo than is made applicable to New York. We have found in Banner Milling Company v. New York Central & Hudson River Railroad Company, supra, that the New York rate of 11 cents, established May 1, 1907, and still in effect over lines from Buffalo, was unjust and unreasonable under existing conditions. This case was heard with that and should receive the same disposition. We find that the rate of 11 cents from Buffalo to Irvington was and is unjust and unreasonable and that the rate for the future ought not to exceed 10 cents. No order will be made in this case until the principal case is finally disposed of. 13 I. C. C. Rep. No. 1201. WASHBURN-CROSBY COMPANY. v. PENNSYLVANIA RAILROAD COMPANY. Submitted December 3, 1907. Decided December 16, 1907. Rates on grain and grain products for domestic consumption from Buffalo to Philadelphia and Baltimore are one-half cent per 100 pounds lower than to New York, but from Chicago to Philadelphia and Baltimore such rates are 2 cents and 3 cents per 100 pounds, respectively, lower than to New York: Held, upon application for the same differentials from Buffalo as from Chicago to Philadelphia and Baltimore, that Buffalo is not entitled to these differentials. The failure of Buffalo to obtain these differentials is due to its location-a disadvantage which defendant has never attempted to equalize in the past and which, in the opinion of the Commission, defendant ought not to be required to equalize now. Shire & Jellinek for complainant. Frank Rumsey and G. S. Patterson for defendant. REPORT OF THE COMMISSION. PROUTY, Commissioner: This complaint puts in issue the relation of rates on flour, bran, and other wheat products from Buffalo to New York, Philadelphia, and Baltimore. The complainant operates the largest mill located at Buffalo and is engaged exclusively in the production of spring wheat flour. This case was heard with Banner Milling Company v. New York Central & Hudson River Railroad Company, supra, which may be referred to for a statement of the conditions under which spring wheat is ground by mills situated like that of the complainant. Rates on flour from Buffalo to Philadelphia and Baltimore are onehalf cent per 100 pounds lower than to New York. When the complaint was filed, the rate to New York was 11 cents per 100 pounds, to Philadelphia and Baltimore 10 cents. Rates on grain and grain products, when for domestic consumption, from Chicago and from all territory west and northwest of Chicago are 2 cents per 100 pounds less to Philadelphia than to New York and 3 cents less to Baltimore. It will appear from an examination of the Banner Milling Company case that spring wheat flour moves to the Atlantic seaboard from points west of Chicago or is ground upon a through milling-in-transit rate, so that practically all millers of spring wheat, except in the Buffalo-Rochester district, enjoy the benefit of those lower rates to Philadelphia and Baltimore points. The complainant insists that this advantage in rate enjoyed by its competitors excludes it and all Buffalo millers from the Baltimore and Philadelphia markets, and it is apparent from what is stated in the former case that this must be true, for it there appeared that the entire profit in grinding flour might not exceed, and in some cases during the previous year had not exceeded, 3 cents per barrel, or 14 cents per 100 pounds, so that an advantage in transportation of 4 cents a barrel to Philadelphia and 6 cents a barrel to Baltimore would be prohibitive against the complainant. We are asked to declare this discrimination unlawful and to establish the same relation of rates from Buffalo to these three cities as obtains from Chicago. The distance from Buffalo to New York, Philadelphia, and Baltimore is substantially the same. Lines of transportation between Buffalo and New York are more direct than to Philadelphia and Baltimore; that is, the movement of traffic is much greater by these lines. It would seem altogether probable that the cost of transportation to Philadelphia and Baltimore must be as great as to New York. Upon the basis of the cost of the service, therefore, the present rates can not be declared unjust or unreasonable. In the Banner Milling Company case we held that where railroads had maintained for a long time a general relation of rates, upon the strength of which industries had been established, that relation must not be unnecessarily disturbed. There is in the case before us no element of this kind, since the relation in rates for which the complainant contends has never, so far as this record discloses, been in effect from Buffalo, the present adjustment in rates between these three points being substantially the same as in the past. It was said in testimony that formerly the Buffalo miller found a market at Baltimore and Philadelphia, which no longer exists, but this seems to be due to the circumstance that this business is now conducted upon a narrower margin, so that a slight difference in the rate is of more importance than formerly. The real question presented to us is, therefore, whether, owing to competitive conditions, these millers at Buffalo should be given the same differentials to Baltimore and Philadelphia as compared with the rate to New York, which apply to the transportation of the products of their competitors. The lake-and-rail rate upon flour for domestic use from Minneapo lis during the summer of 1907 was 23 cents to New York, 21 cents to Philadelphia, and 20 cents to Baltimore, and traffic might move under these rates through Buffalo. When it did, the railroads leading to these respective ports received for their service a sum which was substantially 2 cents less to Philadelphia and 3 cents less to Baltimore than to New York. The complainant insists that if this defendant, which serves all three of these ports, will carry to Philadelphia and Baltimore for its competitors at this lower rate it should carry at the same rate for it. The Commission has twice examined, at great length, the matter of these port differentials. New York Produce Exchange v. Baltimore & Ohio Railroad Co. et al., 7 I. C. C. Rep., 612; in the Matter of Differential Freight Rates to and from Atlantic Ports, 11 I. C. C. Rep., 13. In both these cases we approved a differential under New York of 2 cents in case of Philadelphia and 3 cents in case of Baltimore as to domestic shipments of grain and grain products, those being the commodities most considered, from Chicago and territory basing upon Chicago or governed by the Chicago rate, and these are the differentials now in effect. The reasons which led us to that conclusion apply to territory west of Buffalo, but not to Buffalo itself. Buffalo is not entitled to these differentials by virtue of its position; if this defendant is bound to concede them to the complainant it is solely because it applies these rates through Buffalo from points west. This conclusion does not follow. The defendant names these rates to Philadelphia and Baltimore via Buffalo to meet rates made by other lines in order that it may participate in this traffic. The complainant would be in no respect benefited if lines working through Buffalo were to entirely withdraw from this business. The Supreme. Court of the United States has repeatedly decided that where a rate is forced by controlling competition, as in the present instance, it can not be made a standard by which to estimate the other rates of the carrier putting it in effect. The charging of a higher rate to some intermediate point would not work a violation of the fourth section, nor is the exaction of a higher charge for the performance of a similar service over a portion of the line, as in the case before us, an undue discrimination. The failure of Buffalo to obtain these differentials to Philadelphia and Baltimore is due to its location-a disadvantage which this defendant has never attempted to equalize in the past, and which, in our opinion, it ought not to be required to equalize now. The complaint will be dismissed. No. 1108. MILLER WALNUT COMPANY v. ATCHISON, TOPEKA & SANTA FE RAILWAY COMPANY AND GULF, COLORADO & SANTA FE RAILWAY COMPANY. Submitted November 30, 1907. Decided January 6, 1908. Defendants' rate of 261 cents per 100 pounds for the transportation of walnut lumber from Oklahoma City, Okla., to Galveston, Tex., for export, is under the circumstances unjust and unreasonable and should not exceed 21 cents per 100 pounds for the future. Samuel Miller for complainant. A. A. Hurd and J. R. Koontz for defendants. REPORT OF THE COMMISSION. PROUTY, Commissioner: The complainant was, at the time of the filing of this complaint, engaged in the manufacture of walnut lumber at Oklahoma City, and the product of its mill was sent to Galveston over the lines of the defendants for export to foreign countries. In the prosecution of its business it came into competition with similar mills located at Kansas City, Mo., the product of which was also carried, to some extent, by the lines of the defendants to Galveston for export. The rate charged from Kansas City by the defendants was 18 cents per 100 pounds, while that from Oklahoma City was 26 cents. The distance from Kansas City was 962 miles, from Oklahoma City 552 miles. The complainant insisted that the rate charged it by the defendants was unreasonable and also unduly discriminatory in favor of its competitors at Kansas City. The complainant obtained its logs to the east and northeast of Oklahoma City, to which they were brought by rail. The manufac |