Abrasive grains, in carloads, are rated fifth class in all of the classifications. The sixth-class rate is 81 cents.

Using the short-line mileage of 861 miles and the average loading of 53,477 pounds, the 99-cent rate yields 22.9 mills per tonmile and 61.5 cents per car-mile, and the 64-cent rate yields 14.9 mills per ton-mile and 39.8 cents per car-mile. These earnings are compared with earnings of 10.7 mills per ton-mile and 28.7 cents per car-mile under the 23.5-cent rate from Niagara Falls, N. Y., to Philadelphia, 438 miles. Rates on this commodity within trunkline territory and between points in New England and trunk-line territories for materially shorter distances yield lower earnings than either the 99-cent or 64-cent rates.

On the date the 64-cent rate was established to Philadelphia, a 64cent rate was established from Anniston to New York, N. Y., 953 miles, and a 70-cent rate to Boston, Mass., 1,185 miles. The New York rate yields 13.4 mills per ton-mile and 35.9 cents per car-mile and the Boston rate 11.8 mills per ton-mile and 31.6 cents per carmile. Numerous rates on tripoli between points in southern and official and New England territories, as well as between points in central and official territories, are also shown which generally yield lower earnings than the 64-cent rate from Anniston to Philadelphia. Defendants offered no evidence in support of the reasonableness of the assailed rate, but they state that the 64-cent rate was established to enable the Anniston shipper to meet competition, and that it is not a reasonable maximum rate.

In Special Docket No. 112555, the Southern and Pennsylvania, defendants herein, admitted the unreasonableness of the fifth-class rate of 99 cents collected on seven carload shipments of abrasive grains moving between August and October, 1927, from Anniston, to Passaic, N. J., and asked permission to make refund to the basis of the subsequently established rate of 64 cents. We granted the necessary permission on July 25, 1928.

Although defendants admit that the complainant, as consignee paid the freight charges, they oppose awarding reparation to complainant on the ground that most of the charges ultimately were borne by the consignor. A similar contention was considered by us in California Fruit Exch. v. American Ry. Exp. Co., 155 I. C. C. 105. At page 107, we said:

*

Contentions similar to those advanced by defendants here were advanced in Missouri Portland Cement Co. v. Director General, 88 I. C. C. 492, Therein we found that in determining who is entitled to reparation it is not necessary to go beyond the first step; that the first step is taken when the freight charges are paid; and that the fact that whoever paid in the first instance suffered no ultimate damage is not of controlling importance. In

the absence here of the consignors who finally bore the charges, the inquiry need not extend further than to determine who paid the charges in the first instance.

We find that the rate assailed was unreasonable to the extent that it exceeded 64 cents; that complainant made shipments as described and paid the charges thereon; that it has been damaged in the amount of the difference between the charges paid and those which would have accrued at the rate herein found reasonable; and that it is entitled to reparation, with interest. Complainant should comply with Rule V of the Rules of Practice.

157 I. C. C.

No. 207501

WATAB PAPER COMPANY v. NORTHERN PACIFIC RAILWAY COMPANY

Submitted April 23, 1929. Decided August 14, 1929

Rates on bituminous fine coal, in carloads, from Duluth, Minn., and other headof-the-Lakes points to Sartell, Minn., and from these origins and Ashland, Wis., to Little Falls, Minn., over an interstate route, found applicable, but not unreasonable, unjustly discriminatory, nor unduly prejudicial; and not in violation of the fourth section of the act, except to Little Falls. Defendant directed to remove fourth-section violation. Complaints dismissed.

J. H. Krueger for complainants.

B. W. Scandrett, M. L. Countryman, jr., D. F. Lyons, and F. D. McCarthy for defendant.

REPORT OF THE COMMISSION

DIVISION 2, COMMISSIONERS CAMPBELL, McMANAMY, AND BRAINERD BY DIVISION 2:

Exceptions were filed by complainants to the report proposed by the examiner, and reply thereto was made by defendant. Oral argument was had.

Complainants Watab Paper Company and Hennepin Paper Company are corporations manufacturing newsprint paper at Sartell and Little Falls, Minn., respectively. In the title case it is alleged by complaint filed March 2, 1928, that the rates charged since March 2, 1926, on shipments of bituminous fine coal, in carloads, from Duluth, West Duluth, and Rices Point, Minn., Superior, Central Avenue (Superior), Superior East End, Pokegama, and Allouez, Wis., hereinafter collectively called head of the Lakes, to Sartell were and are unreasonable, unjustly discriminatory, and unduly prejudicial to complainant and unduly preferential of bituminous fine-coal consumers engaged in the manufacture of paper at such points as Minneapolis and St. Paul, Minn., hereinafter called the Twin Cities; and in violation of the long-and-short-haul provision of section 4 of the interstate commerce act. By complaint filed April 7, 1928, in the subnumber, the same allegations are made with respect to rates on this commodity from the same origins and Ashland, Wis., to Little Falls, and in addition that the rates charged are inapplicable. Rates

'This report also embraces No. 20750 (Sub-No. 1) Hennepin Paper Company v. Same.

for the future and reparation are sought. Rates will be stated in amounts per ton of 2,000 pounds.

Sartell and Little Falls are served only by the Northern Pacific. This carrier has two possible routes from head of the Lakes, of which Duluth is taken as representative, to the Twin Cities. The direct line extends in a westerly direction to Carlton, Minn., thence in a southerly direction to St. Paul, 151.2 miles. The indirect route extends westward through Carlton to Brainerd, Minn., and thence southeasterly to St. Paul, 248.8 miles. Sartell and Little Falls are on this indirect route 170.3 and 142.9 miles, respectively, from Duluth. Little Falls is 208.2 miles from Ashland over the lines of defendant. Shipments from Duluth and Minnesota origins may move intrastate to these destinations. It is the usual practice, however, to handle these shipments via Superior, Wis. The rates assailed are $2.26 from Ashland to Little Falls and $1.82 from the head of the Lakes to Sartell and Little Falls. These rates are based on the scale prescribed in Holmes & Hallowell Co. v. G. N. Ry. Co., 69 I. C. C. 11, for shortline distances of 208.2, 146.1, and 142.9 miles, respectively.

Complainants' mills are equipped to use only fine coal, which is described in certain of defendant's tariffs as coal which "has passed through a bar screen not exceeding 11⁄2 inches between bars or its equivalent, a two-inch mesh or a two-inch round perforation." The value of fine coal averages approximately $2.50 per ton less than lump coal, which is also shipped from head of the Lakes. No distinction was made in the Holmes & Hallowell case between the rates on the different grades or sizes of coal and the same rates apply to these destinations on both lump and fine coal.

In support of the allegation of inapplicability in the subnumber, complainant refers to a rate of $1.65 on fine coal from all of these origins to the Twin Cities, subject to an intermediate clause, and points out that the routing under this rate was not restricted. It contends that the $1.65 rate was applicable under the intermediate provision. This contention is without merit. The intermediate provision by its terms applies only in the absence of a specific rate. The rates from these origins to Little Falls are published as separate items in amounts per ton and are specific rates. On June 18, 1928, the $1.65 rate to the Twin Cities was specifically restricted so as not to apply over the circuitous route of the Northern Pacific, and as no damage to complainants is shown by reason of the unrestricted tariff routing prior thereto, it is unnecessary to determine whether there existed a fourth-section departure not authorized by the order in the Holmes & Hallowell case.

In support of the allegation under section 4, complainants refer to a rate of $1.75 which applies on bituminous coal from head of the

Lakes to St. Cloud, Minn., a point 4 miles south of Sartell on defendant's line, and which is 140.6 miles over the Great Northern from Duluth. Prior to May 1, 1928, the distance was shown as 139.5 miles in the distance tariff of the latter carrier. Effective on that date the distance was changed in the tariff to 140.6 miles without change in the rate. The Holmes & Hallowell scale provides a rate of $1.75 for 140 and over 130 miles and a rate of $1.82 for 150 and over 140 miles. Defendent was granted fourth-section relief in the Holmes & Hallowell case to meet the rates of short-line carriers at competitive points. This relief, however, was subject to the limitation that the rate to the intermediate point should not exceed the rate for the same distance as that over the more direct route to the competitive point. Complainants contend that the charging by defendants of $1.82 to Sartell and Little Falls for distances within the "150 and over 140" mile block while maintaining a rate of $1.75 to St. Cloud for a distance within the same mileage block constitutes a fourth-section departure. As the distance to Sartell over defendant's line is not within that mileage block, the contention with respect to Sartell is not sustained; but with respect to Little Falls there is a fourth-section departure not authorized by the order in the Holmes & Hallowell case. No damage to complainant is shown by reason of this departure. It should be promptly removed.

Complainants do not contend that the rates assailed are unreasonable for application on lump coal but that it is unreasonable to apply these rates on fine coal. It is urged that fine coal should bear a lower rate than lump coal, on the grounds that fine coal loads much heavier and is of less value than lump and moves in gondola cars, whereas lump coal in this region moves in box-car equipment; that the movement of fine coal is steady throughout the year, complainants' mills receiving more than two carloads daily, while the lump-coal movement is more or less seasonal; that fine coal is one of the lowest grades of freight and is not subject to risk of loss and theft, and that at many points in the West and Middle West there are rates on fine coal lower than the rates contemporaneously maintained to the same points on lump coal. Defendant maintains rates on fine coal from head of the Lakes and Ashland to Minneapolis and St. Paul and participates in fine-coal rates to other points in Minnesota which are lower than the contemporaneous lump-coal rates. The following table compares the rates assailed from Duluth and Ashland with rates on fine coal from the same origins to certain destinations in Minnesota, together with the earnings under the respective rates.

157 I. C. C.