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The 46-cent rate to Chicago and the 63-cent rate to Kansas City have been continuously in effect certainly since 1893 and probably longer. The rate to Burlington was also 46 cents until January 16, 1907, when it was raised to 52 cents. The rate from Baltimore to Chicago is 47 cents; and it is claimed that the Chicago rate from New Orleans is made to meet the competition from Baltimore, but it is admitted that there is no such competition at the Mississippi River points and west thereof. The rate from Baltimore to Louisville is 47 cents, as compared with the 39-cent rate from New Orleans to Louisville, and from Baltimore to St. Louis 63 cents, as compared with 43 cents from New Orleans to St. Louis. It is evident, therefore, that the latter rates are not made to meet the competition from Baltimore, and hence may be termed "voluntary" rates.

The banana traffic of the Illinois Central has increased from about 8,000 cars in 1893 to 14,600 cars in 1907, and yielded a gross revenue of $1,153,647.30 for the fiscal year ending June 30, 1907.

Both the Illinois Central and Mobile & Ohio submit statements of what they term the "special cost" of handling the banana business. This cost on the Illinois Central-Frisco route was figured to be $39.35 per car, and covered the following items: Interest on the terminal investment at New Orleans, maintenance and improvement, car mileage (including the entire mileage from New Orleans to Kansas City at 1 cent per mile), loading expenses, wharfage, floors and racks, cleaning of docks, slatting cars, clerical hire, and weighing cars. The Mobile & Ohio figures the same expenses to be $29.52. These so-called extra services given to bananas manifestly include all cost and expense to the railroad of every character excepting the actual cost of hauling the car. But the greater part of these services is such as must necessarily be given to any freight of a perishable nature handled in large quantity; and most of them are services required as to all freight. The manner in which the Illinois Central estimates the extra cost of handling bananas at New Orleans is given in the following table: Interest on land improvements and fixtures..

Depreciation and repairs.
Loss and damage claims..

Killing of one messenger.

Total expense per annum..

$20, 434.05 20, 686. 15

20,000.00 4,500.00

65, 620. 20

As the Illinois Central handled during the last three years an average of 13,000 cars per year, the extra expenses are appraised per car as follows:

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From one of the exhibits of defendants it appears that on a car of bananas weighing 20,000 pounds the earnings are $126 between New Orleans and Kansas City. After paying the bridge charge of $4 at Memphis, the earnings are divided as follows:

Illinois Central.

St. Louis & San Francisco...

$54.90

67.10

The only charges in which the Frisco participates, excepting, of course, the mileage for the use of the car owned by the Illinois Central, is the loading charge of $6 per car at New Orleans and the wharfage of $3.60, of which charges the Frisco pays 55 per cent, that being the proportion which it gets of the through rate from New Orleans to Kansas City, the Illinois Central taking only 45 per cent, although it originates the traffic.

In addition to the terminal cost at the point of origin the carriers as to this traffic are subject to extraordinary expense arising primarily out of the fact that these bananas are carried in ventilator cars and without ice in order to save this expense to the shipper; and to increase the volume of the traffic greatly the carriers fifteen or more years ago instituted special train service, which is maintained sometimes at an embarrassment to other traffic. It is estimated also that nearly 80 per cent of the cars return from Kansas City empty. Owing to the fact that bananas must be moved immediately upon arrival, a large supply of cars must be held at New Orleans against the time when ships will arrive.

Two lines of argument are taken by the complainants, upon which they hinge their contention that these rates are unreasonable: (1) That the Illinois Central and other railroads give to Chicago and Burlington lower rates than are extended to Kansas City; (2) that other commodities, such as peaches and tomatoes, are carried an equal distance by railroads moving west of the Mississippi River at a lower rate than that applied to bananas. As to the latter contention we are unwilling to concede that a traffic which demands a special service in point of train speed should justly be compared with a traffic which is not given such consideration. Other perishable fruits and vegetables are carried in refrigerator cars under ice, for which the shipper pays. And it would appear unfair to compare these two classes of service. At least we can not hold that a carrier which gives an expedited service to a perishable commodity carried without refrigeration may

be required to extend the same rate to such commodity as is given to perishable freight carried on a slower schedule in cars supplied with ice, for it is to be remembered that these trains which move out of Memphis to the west are given more rapid movement than any other freight trains in that territory, and the Frisco Line is under agreement to make this special time whenever the Illinois Central turns over to it at Memphis as many as six cars.

A comparison of the Kansas City rate with those obtaining as to Burlington and Chicago would superficially justify a charge of discrimination as against the Kansas City carrier. The Burlington rate, however, is one which does not include expedited service from St. Louis to Burlington. The Chicago rate is one which the Illinois Central has established for the purpose of developing a great banana traffic. It must be presumed to be compensatory, having been maintained for fifteen years; but it does not follow that because a trunk line running from New Orleans to Chicago can carry a great volume of traffic in a competitive territory at a certain rate that the same rate must be extended to all points at an equal distance from New Orleans. Nor does it follow that because one railroad, as a matter of policy, extends a low rate for a special service all its connections must be held to an extension of the same policy and rate. The Illinois Central has a strategic position of great value. At its southernmost point it has the chief port of entry for this fruit, and dependent upon its northern terminus it has a great consuming territory. The traffic to the west from Memphis to Kansas City does not equal one-third of the total which the Illinois Central carries. It is urged by defendants that rates generally west of the Mississippi River exceed those obtaining on lines east thereof. This is not in itself a justification for the higher rate complained of. In so far as traffic is less dense, or the haul more difficult, or expenses of operation greater, there is justification for a high rate. But with the growth of population and the development of the country it is to be expected that this differential will grow less and less. The Commission has heretofore expressed its opinion that the western cities, such as Kansas City and Denver, shall be given the advantage arising from their proximity to the Gulf ports; but we have not yet held, nor have we had reason for holding, that it would be fair to the railroads west of the river to be placed upon a rate basis no higher than that in more thickly populated sections of the country. The Illinois Central may for its own purposes choose to charge a 46cent rate upon bananas from New Orleans to Chicago; but in this we find no reason which compels us to the conclusion that a higher rate may not be charged to Kansas City over another road. Without doubt the rate to Chicago and the rate to Kansas City are both remunerative; but, considering the volume of the traffic to the two points 13 I. C. C. Rep.

and the traffic conditions upon the two lines, it is not possible to say which one is the more remunerative, notwithstanding the difference between the two rates.

There is a demand throughout the country for a more rapid movement of freight and for some sort of guaranty as to time on the part of carriers. Statutes exist in some of the states requiring carriers to move state business a minimum distance per day. Measures of a similar character have been proposed in the national legislature. It has been suggested, and not without reason, that carriers might with propriety fix their rates upon the movement of certain commodities with reference to a guaranteed time provided for in their tariffs. Many associations of shippers have urged the enactment of laws under which carriers will be penalized for failing to make a fixed limit of speed in the transporting of commodities. It is in line with the policy of these statutes and suggestions that when carriers make a special effort to meet the requirements of a special commodity that they shall be permitted to maintain a schedule of charges higher than those obtaining on general traffic.

For the reasons here given an order will be made dismissing these complaints.

13 I. C. C. Rep.

No. 1364.

RHINELANDER PAPER COMPANY

v.

NORTHERN PACIFIC RAILWAY COMPANY AND CHICAGO & NORTHWESTERN RAILWAY COMPANY.

Submitted May 4, 1908. Decided June 8, 1908.

Complaint challenged reasonableness of 8-cent rate on pulp wood, Duluth, Minn., to Rhinelander, Wis., and rate adjustment on paper from Rhinelander to points east of Mississippi River, whereby Rhinelander is charged rates 2 cents in excess of those applying from the Fox River district in Wisconsin. During the proceeding the 8-cent rate on pulp wood was reduced to 6.95 cents. Held:

1. That the reduced rate on pulp wood is not shown to be excessive.

2. That, upon all the facts disclosed, the rate adjustment on paper is not shown to be unlawful. Weight to be given by Commission to a contract for establishment of certain rates discussed and ruling in Commercial Club of Omaha v. C. & N. W. Ry. Co., 7 I. C. C. Rep., 386, reaffirmed.

John Barnes for complainant.

C. W. Bunn for Northern Pacific Railway Company.

S. A. Lynde for Chicago & Northwestern Railway Company.

KNAPP, Chairman:

REPORT OF THE COMMISSION.

This complaint challenges the reasonableness of the rate in force when it was filed (December 10, 1907), upon pulp wood in carloads from Duluth, Minn., to Rhinelander, Wis., and the rates then and now in force upon paper in carloads from Rhinelander to points east of the Mississippi River.

Complainant owns and operates a paper mill at Rhinelander, Wis., a point on the Ashland division of the Chicago & Northwestern Railway 113 miles southeast of Ashland. Competitors in the manufacture and sale of paper are, among other places, located in what is known as the Fox River district in Wisconsin, including such points as Appleton, Nekoosa, Menasha, Kaukauna, Green Bay, and Neenah on the Chicago & Northwestern Railway, which points are 100 to

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