No. 1103. COMMERCIAL CLUB OF DULUTH v. NORTHERN PACIFIC RAILWAY COMPANY; GREAT NORTHERN RAILWAY COMPANY, AND CHICAGO, ST. PAUL, MINNEAPOLIS & OMAHA RAILWAY COMPANY. Submitted February 12, 1908. Decided April 6, 1908. 1. By their tariffs defendants offer free storage in transit at Duluth, Minn., or Superior, Wis., on both east and west bound lake freight during the closed season of navigation. The practice is for inland shippers to bring their traffic to the warehouses at such ports before the close of navigation, where they are held in free storage by defendants until ordered forward by rail at the balance of the through rate from eastern points of origin. The Duluth merchants, having their business houses at the point where the storage is given, are compelled to pay storage and also dockage and switching charges. Complainant alleges that this business deprives Duluth of its advantage of location at the head of the lakes and operates to transfer such advantage to inland points. It appears that the privilege is open to all shippers alike and that the practice is not confined to defendants, but is forced by competition of other lines operating through other lake ports. Held, That the record in this case does not at this time justify condemnation of a practice in which so many carriers and shippers not parties to the record are interested. 2. The fact that the privilege of free storage is more valuable to inland merchants than to merchants at lake ports does not necessarily make the privilege unlawful. The position of complainant is that the privilege takes away from the lake ports an advantage of its location; but the better position seems to be that the inland jobbing centers, by reason of their location at points where the competition of several lake ports operates, also have advantage of location, one result of which is seen in the effect of this privilege of free storage. S. F. Harrison for complainant. Emerson Hadley for Northern Pacific Railway Company. J. D. Armstrong for Great Northern Railway Company. H. M. Pearce for Chicago, St. Paul, Minneapolis & Omaha Railway Company. REPORT OF THE COMMISSION. LANE, Commissioner: The complainant is a voluntary association composed of firms and individuals doing business at Duluth, Minn., and organized for the purpose of advancing the commercial and jobbing interests of that city. Defendants are carriers subject to the act to regulate com merce. The prayer is that defendants be ordered to cease giving free storage to shipments of merchandise moving from Buffalo and other eastern shipping points by boat line to Duluth or Superior, Wis., and thence by rail to destination beyond Duluth. By their tariffs defendants offer storage in transit at Duluth on both east and west bound shipments of merchandise. The tariff of the Great Northern Railway, which is typical of the tariffs of all the defendant carriers, provides: This company is provided with dock warehouse at port of Superior, Wis., in which a limited amount of storage in transit can be given on shipments of east and west bound lake freight. Such freight is to be consigned free to point of destination via this line or connections with which we interchange at points other than Superior. No charge will be made for such storage privilege. The railway does not assume fire risks on shipments stored under this arrangement. Change of destination at Duluth or Superior is allowed without charge, it being provided that if the merchandise is delivered from the warehouse locally to Duluth or Superior the regular dockage and switching charge of the railway company shall be assessed. It appears that jobbers of cement, nails, and certain other heavy commodities, doing business at St. Paul, also jobbers doing business at Duluth, have availed themselves of the privilege here offered. The practice is to bring a supply of a given commodity to the warehouse before the close of navigation. Shipments are ordered forward by rail from time to time during the winter, as business requirements may dictate. At the opening of navigation, which is the end of the period of free storage, the remaining portion of the stored commodity is forwarded by rail to the consignee. The consideration moving complainant to ask the Commission to forbid the carriers to give this privilege is as follows: At the end of the free storage time, merchants doing business at St. Paul or Minneapolis may order goods remaining in the warehouse to be sent forward, and the same are transported by the railroad company at the balance of the through rate from eastern point of origin. Duluth merchants, however, at the end of the free storage time, receive the unsold remnant of their goods at the lake port, and are compelled to pay storage on goods so received for the time they have been in the warehouse, and also dockage and switching charges. That is to say, so far as the Duluth merchant ships goods out of the warehouse to interior customers during the winter he is on the same basis as the St. Paul or Minneapolis merchant; in receiving the unsold remnant of his stored goods, however, he finds himself not able to use this privilege to as great advantage as his competitors who are at inland points. Complainant therefore takes the position that this privilege, as given, deprives Duluth of its advantage of location at the head of the lakes and operates to transfer such advantage to inland points. It was urged in the complaint that less than carload shipments had been forwarded by defendants at carload rates. This contention was abandoned at the hearing, however, and no objection of discrimination in the enforcement of the rule remains, the claim being that the rule itself is discriminatory and unfair to merchants doing business at Duluth. It was also shown that the through rate from Buffalo to St. Paul is but 2 cents per 100 pounds higher than the rate from Buffalo to Duluth, and the claim was made that the value of the storage given is greater than the freight money received by the railway for forwarding the goods at the end of the free-storage period. It appears, however, that the boat lines take less than their charge to Duluth as their proportion of the joint rate to St. Paul. How much less was not shown, but no basis exists for holding that the rate to St. Paul is not compensatory to the railroads even on shipments receiving free storage. The defendants showed that the storage facilities had been used extensively by Duluth jobbers for freight destined beyond Duluth. One of the witnesses placed on the stand on behalf of the complainant testified, for instance, that his firm had on storage at the Northern Pacific warehouse at the close of navigation in the fall of 1907 about 5,000 tons of cement. It further appeared that this cement comprised about one-third of the total tonnage stored in the warehouse of the Northern Pacific Railway Company at that time. The defense of the defendant carriers is that the privilege here in question is forced by the competition of other lines through other lake ports. The Chicago & Northwestern Railway, for instance, by its tariff, I. C. C. No. 6627, provides that "carload, lake, rail-andlake, or canal-and-lake traffic in transit to points on this line and connections may be held at the dock houses at Milwaukee, Manitowoc, or Green Bay for reconsignment." Similar privileges are given by the Chicago & Northwestern, the Chicago, Rock Island & Pacific, and other lines at Chicago. The Chicago, Milwaukee & St. Paul Railway by its tariff, I. C. C. No. A 9779, advertises that it has dock warehouses at the port of Milwaukee, Wis., at which through shipments may be stored free of charge, reconsignment being allowed. This company's tariff provides that if property is delivered locally at Milwaukee regular "dockage and switching charges will be assessed," the rule being almost identical in form and identical in effect with the rules of the defendant carriers at Duluth. The Wisconsin Central Railway, by amendment 16 to I. C. C. No. 1715, offers free storage with privilege of reconsignment to carload freight at Waukesha, Neenah, Menasha, Manitowoc, and Stevens Point. Similar privileges are offered by the Canadian Pacific Railway at Port Arthur and Fort William, Ontario; by the Canadian Northern Railway at Port Arthur, Ontario, and by the Minneapolis, St. Paul & Sault Ste. Marie Railway at Gladstone, Mich. The roads reaching Duluth, as to much if not all of the territory served by them from that port, are in direct competition with one or another of the carriers above named on ex-lake business. Complainant challenges the storage principle as in itself unlawful, and therefore not to be justified by competition. This position the Commission, on the record as made, is not prepared to take. The privilege is not given by the defendant carriers only, nor is it confined to the section of the country in which they operate. No justification exists at this time for condemning a practice in which so many carriers and shippers not parties to the record are interested. Since the submission of this case the following administrative ruling has been made by the Commission: Tariffs providing arrangements for storage or transit privileges at ports of transshipment on the Great Lakes in connection with traffic moved under rail-and-water tariffs must be published, posted, and filed by the carrier granting the privilege or performing the service, and must stipulate clearly the extent of such privilege and the charges connected therewith. Such tariffs shall also state whether or not the established joint rates published by the initial carrier, from the point of origin to ultimate destination as of the date of shipment from point of origin, will apply. If such privilege is granted or charge is made in connection with the joint rate under which the shipment moves from point of origin the initial carrier's tariff which contains such rate must also contain the privilege or the charge or give specific reference by I. C. C. number to the tariff of the carrier granting the privilege or performing the service which contains such regulations and charges connected therewith. The above ruling is intended to secure such publishing and filing of the offer of storage or transit privileges as shall preclude the possibility of secrecy or discrimination. Portions of the rule will call for changes in the tariffs of the carriers operating through Duluth and involved in this controversy. These changes, however, will not be greater than those required at other lake ports. It appears from the record that during the time covered by the testimony herein the offer of storage privileges at Duluth has been open to all shippers alike, and has been fully described in the tariffs of the defendant carriers according to the forms then recognized by the Commission and used by carriers generally. There can be no doubt that the storage privilege at Duluth is forced upon the carriers defendant here by the competition of railways reaching other lake ports, which railways offer free storage at other ports on precisely the same conditions as those here in controversy. The St. Paul jobber is not confined to Duluth as a lake port nor to the defendant however, he finds himself not able to use this privilege to as great advantage as his competitors who are at inland points. Complainant therefore takes the position that this privilege, as given, deprives Duluth of its advantage of location at the head of the lakes and operates to transfer such advantage to inland points. It was urged in the complaint that less than carload shipments had been forwarded by defendants at carload rates. This contention was abandoned at the hearing, however, and no objection of discrimination in the enforcement of the rule remains, the claim being that the rule itself is discriminatory and unfair to merchants doing business at Duluth. It was also shown that the through rate from Buffalo to St. Paul is but 2 cents per 100 pounds higher than the rate from Buffalo to Duluth, and the claim was made that the value of the storage given is greater than the freight money received by the railway for forwarding the goods at the end of the free-storage period. It appears, however, that the boat lines take less than their charge to Duluth as their proportion of the joint rate to St. Paul. How much less was not shown, but no basis exists for holding that the rate to St. Paul is not compensatory to the railroads even on shipments receiving free storage. The defendants showed that the storage facilities had been used extensively by Duluth jobbers for freight destined beyond Duluth. One of the witnesses placed on the stand on behalf of the complainant testified, for instance, that his firm had on storage at the Northern Pacific warehouse at the close of navigation in the fall of 1907 about 5,000 tons of cement. It further appeared that this cement comprised about one-third of the total tonnage stored in the warehouse of the Northern Pacific Railway Company at that time. The defense of the defendant carriers is that the privilege here in question is forced by the competition of other lines through other lake ports. The Chicago & Northwestern Railway, for instance, by its tariff, I. C. C. No. 6627, provides that "carload, lake, rail-andlake, or canal-and-lake traffic in transit to points on this line and connections may be held at the dock houses at Milwaukee, Manitowoc, or Green Bay for reconsignment." Similar privileges are given by the Chicago & Northwestern, the Chicago, Rock Island & Pacific, and other lines at Chicago. The Chicago, Milwaukee & St. Paul Railway by its tariff, I. C. C. No. A 9779, advertises that it has dock warehouses at the port of Milwaukee, Wis., at which through shipments may be stored free of charge, reconsignment being allowed. This company's tariff provides that if property is delivered locally at Milwaukee regular "dockage and switching charges will be assessed," the rule being almost identical in form and identical in effect with the rules of the defendant carriers at Duluth. The Wisconsin Central Railway, by amendment 16 to I. C. C. No. 1715, offers free storage |