No. 21276

ARTESIA ALFALFA GROWERS ASSOCIATION v. ATCHISON, TOPEKA & SANTA FE RAILWAY COMPANY ET AL.

Submitted April 25, 1929. Decided August 14, 1929

Rate on cotton-gin machinery, in carloads, from Dallas, Tex., to Artesia, N. Mex., found not unreasonable. Complaint dismissed.

E. C. Wallace for complainant.

R. S. Outlaw, E. A. Boyd, H. C. Barron, and C. E. Duffy for defendants.

REPORT OF THE COMMISSION

DIVISION 3. COMMISSIONERS AITCHISON, TAYLOR, AND PORTER BY DIVISION 3:

This case was presented under the shortened procedure. Exceptions were filed by complainant and defendants to the report proposed by the examiner. Our conclusions differ from those recommended by him.

Complainant, a corporation operating a cotton gin at Artesia, N. Mex., alleges by complaint filed July 23, 1928, that the rate charged on two carload shipments of cotton-ginning machinery forwarded July 22, 1926, from Dallas, Tex., to Artesia, were and are unreasonable. We are asked to prescribe a reasonable rate for the future and to award reparation. Rates will be stated in amounts per 100 pounds.

Artesia is 151 miles south of Clovis, N. Mex., on the Pecos branch of the Atchison, Topeka & Santa Fe, which extends from Clovis to Pecos, Tex., 272 miles. One of the shipments weighed 27,060 pounds and the other 27,600 pounds; and $340.96 and $347.76, respectively, were collected on the basis of the applicable class A rate of $1.26. They moved as routed over the Gulf, Colorado & Santa Fe to Sweetwater, Tex., thence over the Panhandle & Santa Fe to Texico, N. Mex., and the Atchison, Topeka & Santa Fe via Clovis, to destination, 767 miles. Hereinafter these carriers will be referred to collectively as the Santa Fe. The $1.26 rate from Dallas to Artesia applied over the Santa Fe only. The short-line distance is 555 miles, made over the Texas & Pacific to Pecos, thence over the Santa Fe to destination. Over the latter route a rate of $1.40 applied. Differential territory extends beyond Big Springs, Tex., over the Pecos route and beyond Lubbock, Tex., over the other route.

Complainant seeks a rate of 86 cents, which was established on agricultural implements under the recent southwestern revision, on the ground that cotton-gin machinery is being used to develop the agricultural industry. In requiring that revision, however, we did not rate this commodity as an agricultural implement but listed it under the heading of machinery, as in the classification. On this record, therefore, complainant's contention is not convincing. Complainant instances commodity rates established by defendants August 31, 1926, from Dallas to destinations in New Mexico on the Santa Fe extending from Belen, N. Mex., to El Paso, Tex. To Mesilla Park, Las Cruces, and Rincon the rate is $1.21; to Hatch, $1.30; and to Mirage, $1.34. These rates are less than 90 per cent of the class A rates from and to the same points. Under the southwestern revision the class A rate for 555 miles is 83 cents, but considering that part of the haul from Dallas to Artesia is in differential territory the class A rate under that revision for a movement from and to those points for that distance would be 95 cents. Complainant urges this as indicative of the unreasonableness of the rate assailed. Over the route traversed, 767 miles, the rate under the southwestern revision would be $1.12. Upon a basis of 27,330 pounds, the average of the two shipments here considered, the rate of $1.26 for 767 miles yielded 32.86 mills per ton-mile and 44.89 cents per car-mile. Upon the same basis the rate of $1.12 would yield 29.2 mills per ton-mile and 39.91 cents per car-mile. The rate of 95 cents for 555 miles yields 34.23 mills per ton-mile and 46.78 cents per car-mile. Complainant contends that there is no justification for a higher basis of rates to destinations on defendants' lines in New Mexico than in the Southwest generally. We have, however, heretofore recognized the unusual transportation conditions existing in New Mexico and Texas differential territory, and have prescribed arbitrary amounts to be added to the rates for hauls within those sections in consideration of such conditions. Flory & Albers v. A., T. & S. F. Ry. Co., 142 I. C. C. 710. Machinery, in carloads, is generally rated class A in western territory, and defendants state that the bulk of machinery shipments throughout the Southwest and to New Mexico moves on class rates. They contend that the commodity rates established on August 31, 1926, were the result of competitive conditions which do not exist at Artesia. The rate of $1.21 was based on a rate of 93.5 cents from Dallas to El Paso applicable over the Texas & Pacific and Southern Pacific and defendants' local rate of 29.5 cents from El Paso to Mesilla Park, less 2 cents. The establishment of this rate thus insured to defendants the long haul from Dallas, a point reached by the Santa Fe, to its local territory. Las Cruces and Rincon were grouped with Mesilla Park, and the rates to Hatch and Mirage were

graded over Rincon. There is in effect also a commodity rate of $1.41 from Dallas to Deming, N. Mex., based on the El Paso combination. Aside from these competitive rates, defendants assert that there is no deviation from the class basis on machinery in this territory.

Traffic density on defendants' Pecos branch is light, the adjoining country being sparsely settled. Of the carload traffic in New Mexico on the Santa Fe, the through or bridge traffic, which includes perishables from California, amounts to 27 per cent, and yields 25 per cent of the total revenue; 50 per cent is intrastate, yielding 13 per cent of the revenue; and 5 per cent is inbound and 18 per cent outbound, yielding 26 and 36 per cent, respectively, of the revenue. Over 75 per cent of the intrastate traffic consists of ore handled 8 miles at 10 cents per ton. In Prairie Pipe Line Co. v. A. W. Ry. Co., 146 I. C. C. 149, rates were prescribed on oil-well supplies, which are rated class A in western territory, between points in Kansas, Oklahoma, Texas common-point territory, Arkansas, and western Louisiana. For a single-line haul of 767 miles, 250 of which is in differential territory, the rate under the findings in that case with respect to such supplies would be $1.19, minimum 36,000 pounds, which would produce ton-mile and car-mile earnings of 31.03 mills and 55.85 cents, respectively.

The earnings derived from the rate assailed are not excessive, and it does not appear that the class basis for the traffic here considered exceeded or exceeds the maximum of reasonableness. We find that the rate assailed was not and is not unreasonable.

The complaint will be dismissed.

157 I. C. C.

No. 21221

PERRINE-ARMSTRONG COMPANY ET AL. v. BALTIMORE & OHIO RAILROAD COMPANY ET AL.

Submitted April 29, 1929. Decided August 15, 1929

Rates on saw logs, in carloads, from numerous points in Ohio to Fort Wayne and Columbia City, Ind., found not unreasonable or otherwise unlawful. Complaint dismissed.

Earl W. Cox for complainants.

J. L. Aber for defendants.

REPORT OF THE COMMISSION

DIVISION 3, COMMISSIONERS AITCHISON, TAYLOR, AND PORTER BY DIVISION 3:

Exceptions were filed to the report proposed by the examiner. Complainants are corporations manufacturing and selling lumber. They allege by complaint filed June 30, 1928, that the rates charged on numerous carload shipments of saw logs shipped from numerous points in Ohio to Fort Wayne and Columbia City, Ind., between December 15, 1924, and March 23, 1927, were and are unreasonable, and in violation of the long-and-short-haul provision of section 4 of the interstate commerce act. Reasonable rates for the future and reparation are sought. Rates will be stated in amounts per 100 pounds.

Informal complaint was filed April 27, 1927, covering shipments from Crestline, Camp Division, Jeromeville, Melco, Lucas, and Perrysville, Ohio, to Fort Wayne. All of these points are on the Pennsylvania except Jeromeville, which is on the Loraine, Ashland & Southern. Claims for reparation on any of these chipments which were delivered more than two years prior to that date are barred. Informal complaint was filed on December 2, 1927, covering shipments from Alta, Armstrong, Cedar Valley, Butler, Fredericktown, Lexington, St. Louisville, Sullivan, Utica, and Wooster, Ohio, to Fort Wayne. Claims for reparation on shipments from and to these points which were delivered more than two years prior to that date are barred. All of these origin points are on the Baltimore & Ohio. The shipments of saw logs to Columbia City originated at Alta and Utica. The applicable rate of 13 cents from Alta and 13.5 cents

from Utica was charged. No evidence was presented to establish that the rates charged on these shipments were or are unreasonable, and such rates will not be further considered herein.

The shipments to Fort Wayne moved from the points named in note 1.1 These points are northeast of Columbus, Ohio, except Camp Dennison, which is in the vicinity of Cincinnati. In each instance the applicable rate was charged, which was made 65 per cent of sixth class. The rates charged, except from Jeromeville and Camp Dennison to Fort Wayne, were 0.5 cent higher than the rates to Decatur, Ind., a farther distant point. Fort Wayne is intermediate to Decatur over the routes of movement. Jeromeville is intermediate between Ashland, Ohio, and Fort Wayne. The rate in effect from Ashland to Fort Wayne was and is 11.5 cents; the rate charged from Jeromeville to Fort Wayne was 12.5 cents. Camp Dennison is between Cincinnati and Fort Wayne, and the rate charged exceeded the rate from and to the latter points by 0.5 cent. Complainant relies solely on the presumption of unreasonableness arising from the foregoing departures from the long-and-short-haul provision of the fourth section to prove that the rates charged were and are unreasonable. Defendants admit the existence of those departures but contend that the rates from and to the farther distant points were an:1 are depressed to meet competition, and that those departures are authorized by an appropriate fourth-section order. The distances from the origin points here considered over the lines which handled complainants' shipments to Decatur and from Ashland and Cincinnati to Fort Wayne are considerably greater than the distances over the direct routes between the same points. For example, from Crestline to Decatur over the Pennsylvania, the defendant which handled complainants' shipments from Crestline to Fort Wayne, the distance is 152 miles. Over the direct route composed of the Pennsylvania and the Erie the distance between those points is 116 miles. The rate over the latter route from Crestline to Decatur is made 65 per cent of the contemporaneous sixth-class rate. To be able to participate in the traffic between the above points defendants are compelled to meet the rates of the direct routes between those points. As a consequence these competitive rates are lower than the normal basis of rates on saw logs in this territory. The normal basis of rates on saw logs in central territory since March 20, 1924, has been 65 per cent of sixth class, as prescribed in Indiana Public Service Commission v. A. A. R. R. Co., 85 I. C. C. 533. The present sixthclass rates in central territory were prescribed by us in the C. F. A.

1 NOTE 1.-Crestline, Camp Dennison, Jeromeville, Melco, Lucas, Alta, Perrysville, Armstrong, Cedar Valley, Butler, Fredericktown, Lexington, St. Louisville, Sullivan, Utica, and Wooster, Ohio.