No. 1323. GEORGE R. REYNOLDS บ. SOUTHERN EXPRESS COMPANY. Submitted April 15, 1908. Decided May 4, 1908. 1. The law requires that the several classes of common carriers subject to its provisions shall fix just and reasonable charges for transportation services, and the authority of the Commission to prescribe a reasonable rate when invoked in a proper case is not restricted by the terms of any agreement between an express company and a railroad company. 2. It is not sufficient for a carrier when called upon to justify a rate, the reasonableness of which is questioned, to assert that its rates generally are fair and just and that no change may properly be made in any particular rate because it would disturb the integrity of the system as a whole and produce inconsistencies. In dealing with a particular rate the Commission may consider such other rates as affording a basis for comparison, but where a given rate is found to be unreasonable the Commission will not hesitate to order such rate reduced, although the reduction might disarrange the relative adjustment existing between this and other rates. 3. Defendant's rate on cream of $3.90 per 10 gallons from Columbia, Tenn., to Jacksonville, Fla., held to be unreasonable, and a reasonable and just rate therefor not exceeding $2.75 for the movement of the cream and the return movement of the empties prescribed. Harwick & Jennings for complainant. W. E. Kay and R. C. Alston for defendant. REPORT OF THE COMMISSION. CLEMENTS, Commissioner: This complaint involves the reasonableness of defendant's rate on cream from Columbia, Tenn., to Jacksonville, Fla. Complainant is a retail dealer in cream at Jacksonville and commenced shipping from Columbia in 1900, when the rate was 15 cents per gallon, or $1.50 per 10-gallon can, with an added charge of 25 cents for the return of the empty can. This rate remained in effect until April 1, 1907, on which date an advance was made to $3, which was applied until May 13, 1907, when the rate was advanced to $3.90, with an added charge of 15 cents for the return of the empty can and tub used for packing the cream in ice. This charge of $3.90 per 10 gallons of cream is constructed under Southern Express Company Commodity Tariff No. 3377, which names a rate of $2.50 per 100 pounds to apply on the gross weight, "except that an allowance of 25 per cent from gross weight may be made when it is necessary to use ice for preservation." The gross weight of a 10-gallon can of cream incased in a tub and packed with ice is 208 pounds, and making an allowance of 25 per cent of this for the ice the rate of $2.50 per 100 pounds applied to the remaining 156 pounds produces the charge of $3.90. The tub in which the cream is packed weighs 50 pounds and is 26 inches in height, 20 inches across the top, and 17 inches across the bottom. The cream is estimated to weigh 10 pounds to the gallon and the can weighs 22 pounds. It is claimed that when the rate of $1.50 per 10-gallon can was made effective it was intended to apply on the weight of the cream and the can only, and not on that of the ice and tub. This rate, however, was applied for several years to the movement of the cream packed in tubs containing ice, and this practice was not discontinued until after the enactment of the amended act of June 29, 1906. It was stated by Mr. Loop, vice-president of the Southern Express Company, that when the present rate was established no advance in the rate on the cream itself was contemplated. It was simply intended to readjust the rate so as to afford compensation to the express company for the carriage of the tare weight of the ice and tub. Another object of this readjustment was to make this rate consistent with the uniform basis which the adoption of the new classification was intended to accomplish, and upon this point Mr. Loop stated: I do not think the express company could afford to make a lower rate on cream from Columbia to Jacksonville than the one now existing, because that would affect rates on other commodities and the same commodity between other points, and generally disarrange the logic of this tariff system, and the express company had better lose this business, whether it made any money or not, than to make the rate. The object of abrogating that special rate, and putting cream into the commodity tariffs and charging what our rate now is from Columbia to Jacksonville, is not to get any more money out of the consumer or the dealer, but it is to make a consistent tariff and we may be losing money in making that, but it is better that we should lose that money than to have an illogical and inconsistent tariff. The contract between the Louisville & Nashville Railroad Company and the Southern Express Company provides that the express company shall pay to the railroad company amounts equal to 45 per cent of the gross earnings derived from the express business transacted on its lines. This contract also provides that the express company shall not, except with the consent of the railroad company, carry express matter at less rates than one and one-half times the freight tariff rates of the railroad company, except money, bullion, securities, jewelry and valuables, packages of papers and perishable matter, and matter that may be transported in the United States mails, as to all of which exceptions the express company shall be at liberty to regulate and fix its own rates, subject to the approval of the railroad company; such rates to be withdrawn if disapproved. The contract between the Atlantic Coast Line Railroad Company and the Southern Express Company provides that the rates per 100 pounds of the express company shall not be less than the class freight rates of the railroad for any freight which originates at initial and is destined for intermediate points, or vice versa, on the lines of said railroad It being understood, however, that on all business, regardless of its origin or destination, which is competitive or can be reached by other routes, and upon money or other valuables, and matter which can be transported by United States mail, the express company may regulate and fix its own rates, it being agreed that all rates of the express company must be approved by the railroad, and the express company further agrees to immediately withdraw any rate upon notice of its disapproval by the railroad. This contract further provides that— Of the gross revenue earned and collected from the transportation of perishable freight, the express company shall pay to the railroad 50 per centum; of the gross revenue earned and collected from the transportation of other freight and money packages, except those of the railroad, the express company shall pay to the railroad 40 per centum, it being understood that the charges for transportation of perishable freight shall be so regulated by the express company that the 50 per centum paid to the railroad shall not be less upon any article transported than the railroad would receive on the same if shipped as ordinary freight. There are no through railway rates in effect from Columbia to Jacksonville via the Louisville & Nashville and the Atlantic Coast Line. The first class rate from Columbia to Montgomery is 87 cents per 100 pounds, as published in Louisville & Nashville Tariff I. C. C. No. A-5456, and the first class rate from Montgomery to Jacksonville is 66 cents, as shown in Louisville & Nashville Tariff I. C. C. No. A-8053. Cream shipped in less than carload quantities with fresh meat and other packing-house products, etc., takes the first class rate under the Southern Classification. The empty wooden tubs returning take the third class rate, which is 56 cents per 100 pounds from Jacksonville to Montgomery, as per Atlantic Coast Line Tariff I. C. C. No. 4744, and 61 cents per 100 pounds from Montgomery to Columbia, as shown in Louisville & Nashville Tariff I. C. C. A-5456. The Southern Classification provides that the minimum charge shall be for 100 pounds at the class or commodity rate to which shipment belongs, but not higher than first class. It will thus be seen that the aggregate freight charges under these tariffs for the transportation of 10 gallons of cream shipped in the manner described, including the return movement of the empty receptacles, would be approximately $4.35. Since the hearing was had in this case the defendant has reissued its commodity tariff No. 3377, effective May 20, 1908, transferring cream from second to fourth class, reducing the rate from $2.50 to $2 per 100 pounds. Under this tariff, therefore, the total charges on the gross weight of the shipment, including the return of the empty receptacles, would be $3.27, as against $4.05 under the tariff now in effect. The volume of the cream traffic moving between Columbia and Jacksonville is small and would not be attractive to the railroads even if it could be safely handled by freight for this distance, which is 646 miles via the Louisville & Nashville to Montgomery, Ala., and thence via the Atlantic Coast Line to Jacksonville, the route over which this traffic is carried. Ordinarily the railroads only engage in the transportation of milk and cream for comparatively short distances and then, for the most part, where the volume of the traffic warrants the operation of special milk trains. The cream traffic alone is seldom, if ever, sufficient in volume to make it attractive to the railroads, and it is doubtful whether as a practical matter cream could be satisfactorily transported by freight train a distance of 646 miles in this territory. Prior to 1900 complainant shipped cream via the Clyde Line from New York, but discontinued doing so for the reason that the daily express service was preferable, since it obviated the necessity of buying several days' supply at one time and keeping the same in stock, in consequence of which and the longer time in transit it was subject to deterioration. All cream shipped from New York is previously shipped there from other points. As a practical matter only wholesale dealers can profitably handle cream shipped in this way from New York, and so far as the small dealers at Jacksonville are concerned the New York market affords no competition with Columbia. A contract between the express company and the railroad companies over whose lines it operates providing that the former shall not charge less than a certain percentage over the railroad rate applying on the same commodity between the same points can not be considered as a controlling factor in passing upon the reasonableness of the express rate. Ordinarily the railroads engage in the transportation of commodities which move in large volume and do not attempt. to provide facilities or to name rates which would encourage the shipment by freight of smaller articles infrequently the subject of transportation. This is especially true of perishable commodities requiring quick movement, so that the express company is left free to take care of this class of traffic. It is therefore not improbable that occasional shipments of this character could not be handled as cheaply by the railroad, which has not been warranted by past experience in providing necessary facilities therefor. The Commission will of course notice the railroad rate as affording a basis of comparison, but the law requires that the several classes of common carriers subject to its provisions shall fix just and reasonable charges for transportation services, and the authority of the Commission to prescribe a reasonable rate when invoked in a proper case is not restricted by the terms of any agreement between the express company and the railroad company. The main reasons alleged in justification of the increased rate are, first, that it was necessary in order to make the rates applying over the entire system on a logical and consistent basis, and, second, in order to compensate the express company for handling the extra weight of the ice and tub. In our view, it is not sufficient for a carrier when called upon to justify a rate, the reasonableness of which is questioned, to assert that its rates generally are fair and just and that no change may properly be made in any particular rate because it would disturb the integrity of the system as a whole and produce inconsistencies. This proposition is too general and theoretical for acceptance by us in the application of the requirements of the law to a practical situation. The Commission has authority under the law to make an order only concerning the rates involved in a proceeding before it. It is not practicable in such a proceeding to investigate and pass upon the reasonableness of the entire system of rates maintained by a carrier. In dealing with a particular rate it is of course the purpose of the Commission to consider such other rates as afford a basis for comparison, but where a given rate is found to be unreasonable the Commission will not hesitate to order such rate reduced, although the reduction might disarrange the relative adjustment existing between this and other rates. It is conceded by the express companies that a rate of 15 cents per gallon would afford reasonable remuneration for the service performed in transporting the net weight of the can and cream from Columbia to Jacksonville. That rate was voluntarily fixed by the defendant and remained in effect for such length of time as to create a presumption that it was reasonably remunerative. We will assume that this rate was established without anticipation of the necessity for handling the cream in a tub packed with ice, although it is doubtful if a single shipment ever went through uniced. The rate of $1.50 applied to the 10-gallon can of cream weighing 122 pounds yields a |