$1.02. The contemporaneous fifth-class rate was $1.245. On that date as a result of the southwestern revision the fifth-class rate became 98 cents. On December 20, 1928, the commodity rate of $1.02 was canceled and the fifth-class rate of 98 cents thereupon became applicable. A commodity rate of 47.5 cents is sought.

The present rates on red oil from Ivorydale and Chicago, Ill., to Pacific coast points, are 98 and 90 cents. These rates are 18.6 and 17.6 per cent of first class, respectively. The commodity rate charged and the rate sought from Ivorydale to Dallas, are 41.4 and 19.3 per cent, respectively, of the present first-class rate. The volume of movement under the rates to the Pacific coast is not shown.

The present carload rates on refined petroleum and petroleum products from points of origin in southwestern territory to destinations in official territory range from 39 cents, from Shreveport, La., to Terre Haute, Ind., 703 miles, to 47.5 cents, from Ranger, Tex., to Fort Wayne, Ind., 1,116 miles. Defendants contend that these rates have long been recognized as depressed rates due to pipe-line competition.

In Procter & Gamble Co. v. A., T. & S. F. Ry. Co., 122 I. C. C. 473. rates of 46.5 and 49 cents were prescribed on naphtha to Cincinnati from Tulsa, Okla., and Wichita Falls, Tex., 763 and 1,035 miles, respectively. Rates on naphtha from points in Oklahoma, Texas, and Louisiana, to destinations in Kentucky and Ohio, are on about the same level as the rate sought. To Blue Creek, W. Va., rates on gasoline and naphtha, ranging from 49 cents from Meraux, La., 964 miles, to 60 cents from Hodge, Tex., 1,203 miles, were prescribed in Transcontinental Oil Co. v. B. & O. R. R. Co., 140 I. C. C. 561, and other cases cited by complainant. From Gulf ports to northern destinations rates ranging from 49 cents to 59.5 cents apply on petroleum naphtha for distances ranging from 901 to 1,509 miles, to Two Mile, W. Va., and Boston, Mass., respectively. The 49-cent rate in effect to Two Mile and other West Virginia destinations was also prescribed in the Transcontinental Oil Co. case, supra.

Rates on cottonseed foots, soap stock, and inedible tallow, from Texas and Oklahoma points, to Ivorydale, range from 40.5 cents from Muskogee, Okla., 764 miles, to 47 cents from San Antonio, Tex., 1,203 miles. The rate on these commodities from Dallas to Ivorydale is 47 cents. This rate compares favorably with the rate of 47.5 cents sought on red oil between those points in the reverse direction. In Oklahoma Corporation Commission v. A. & S. Ry. Co., 98 I. C. C. 183, rates were prescribed on cottonseed foots and sediments, frequently termed soap stock, and inedible tallow from southwestern points to Chicago. Cottonseed foots is a low-grade commodity

which is produced in large quantities wherever cottonseed oil is refined. Cincinnati was not within the scope of the complaints, but it was observed that the rates on vegetable oils, etc., should not be higher to Cincinnati than to Chicago. Complainant asserts that if based on the mileage scale there prescribed the soap-stock rate from Dallas to Ivorydale would be 40 cents instead of 47 cents, the present rate. The soap-stock scale prescribed therein was 75 per cent of the cottonseed-oil scale. Based upon the latter scale the rate from Dallas to Ivorydale would be 53 cents.

Throughout central territory the various soap stocks, vegetableoil foots, etc., are grouped and are accorded a rating of 83.5 per cent of sixth class or 23.2 per cent of first class. In Gross & Co. v. Baltimore & O. R. Co., 147 I. C. C. 337, it was found that red oil was not soap stock within the meaning of that term as used in the classification exceptions, and that the fifth-class rates assailed were applicable. The reasonableness of the applicable rates was not brought in issue in that case.

Cottonseed-oil rates of 34 and 38.5 cents apply to Ivorydale from Mississippi Valley points, 682 to 858 miles distant. These rates move an enormous production of cottonseed oil in the South and Southwest. The movement of red oil from Ivorydale to Dallas is light as compared with the movement of cottonseed oil to points like Ivorydale and St. Louis, Mo. The rates on vegetable oils from New York to various points in official territory range from 33 cents to Detroit, Mich., 630 miles, to 45.5 cents to Cairo, Ill., 1,098 miles. In numerous cases cited by complainant linseed oil was accorded the same rates as cottonseed or vegetable oils.

Complainant does not contend that there is competition between naphtha or petroleum products generally and red oil but asserts that the transportation characteristics of red oil and the other oils hereinbefore mentioned are similar, linseed oil, for example, and red oil loading about the same; and that red oil is entitled to the same level of rates.

The animal fats from which red oil is derived originally come from two sources, packing houses and reduction plants. Consequently, when in 1923 a rate was desired on red oil it was accorded the packing-house products basis. At that time the value of red oil was given as approximately the same as that of certain packinghouse products, such as oleo oil, stearine, lard oil, and grease. These rates continued to be the same until the rate on packing-house products was suspended in Meats and Packing-House Products, 136 I. C. C. 651, 147 I. C. C. 330. The basis for reparation in that case on packing-house products from St. Louis to Dallas was 87 cents. Adding to that rate the Cincinnati differential of 12 cents,

which is the same as from Chicago, makes a rate of 99 cents. Defendants are willing to grant reparation on that basis. The rate prescribed in the above case, on packing-house products from Chicago to Dallas was 88 cents, Cincinnati taking the Chicago basis. Defendants are willing to establish this rate on red oil for the future. Complainant contends that red oil is not a packing-house product; that while it is obtained in some measure from packing-house sources, its preponderate tonnage is obtained from garbage reduction plants; and that it is not shown that it is shipped as a packinghouse product.

Defendants establish that only 13 carloads of red oil originated at Ivorydale, on the Baltimore & Ohio, during the period from February 8 to August 7, 1928, six carloads moving to Dallas, one to Ponca City, Okla., one to Houston, Tex., and five to Port Arthur, Tex., the Port Arthur shipments moving in tank cars. The average weight of these shipments was 43,122 pounds, which was somewhat in excess of the average of complainant's shipments, due to the aforesaid tank-car shipments. The average distance was 1,127 miles and the average car-mile earnings 38.6 cents. An exhibit was also introduced showing that for the year 1927 the total movement of red oil from Ivorydale to Dallas, originating on the Cleveland, Cincinnati, Chicago & St. Louis, was seven carloads, the average weight of which was 32,628 pounds, the average distance 1.142 miles, and the average car-mile earnings 29.1 cents. All of these shipments moved on the $1.02 rate except the shipment to Ponca City, on which a rate of 83 cents applied. During the period from February 8 to August 7, 1928, a total of 95 box cars and 40 tank cars of red oil moved from Ivorydale over the Baltimore & Ohio to points in eastern trunk-line territory on the basis of the fifthclass rates. The average weight of these shipments was 43,077 pounds, the average distance 804 miles, and the average car-mile earnings 26.2 cents. During the same period, the total movement of red oil over the Baltimore & Ohio from Ivorydale to St. Louis consisted of seven carloads, the average weight of which was 34,017 pounds, the average distance 339 miles, and the average earnings 30.1 cents per car-mile, the applicable rate being the fifth-class rate of 30 cents. It is pointed out that there is quite a movement of linseed oil and corn oil from points in central territory to destinations in central and eastern territory, all of which is on the basis of the fifth-class rates.

On denatured alcohol, which moves on the basis of the fifth-class rates, the rates from points in central territory to destinations in eastern trunk-line territory range from 36.5 cents from Carthage, Ohio, to Rochester, N. Y., 513 miles, yielding earnings of 21.3 cents

per car-mile, to 33 cents from South Bend, Ind., to Hoboken, N. J., 875 miles, yielding earnings of 33.3 cents per car-mile. From New Orleans, La., to various destinations in Oklahoma, the rate is 86 cents for an average distance of 740 miles, the average car-mile earnings being 42.9 cents.

The fifth-class rates from central territory to eastern trunk-line territory and the fifth-class rates prescribed in the southwestern revision are in each instance 40 per cent of the first-class rate. Dfendants urge that there is very little difference in the values of red oil, corn oil, and linseed oil, and that the value of denatured alcohol is only slightly lower. The market price of red oil is 10 to 10.5 cents per pound.

We find that the rate assailed was, is, and for the future will be unreasonable to the extent it exceeded, exceeds, or may exceed 88 cents; that complainant made the shipments as described and paid and bore the charges thereon; that it has been damaged thereby 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. An order for the future will be entered.

TAYLOR, Commissioner, dissenting:

In Gross & Co. v. Baltimore & O. R. Co., 147 I. C. C. 337, a recent case, the commission found that fifth-class rating was proper for red oil in official territory. As defendants are willing to establish lower rates than fifth-class, the commission should entertain no objection, but I think the report should not prescribe lower rates or award reparation to a lower basis than those agreed to by defendants, which are lower than rates found reasonable by the commission in official territory.

157 I. C. C.

No. 21018

EDMUND D. CODMAN v. BOSTON & MAINE RAILROAD

ET AL.

Submitted July 3, 1929. Decided October 7, 1929

Transaction between the Boston & Maine Railroad and Dwight P. Robinson & Company for the designing and construction of the New North Station and other terminal facilities at Boston, Mass., found not in violation of the provisions of section 10 of the Clayton Antitrust Act. Complaint dismissed. C. W. Crooker for complainant.

W. N. Cole for Boston & Maine Railroad and Homer Loring, and Joseph Schreiber for Dwight P. Robinson & Company, defendants. REPORT OF THE COMMISSION

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

By complaint filed March 2, 1928, complainant alleges that defendant, Boston & Maine, hereinafter called the railroad, entered into a general agreement, in the execution of which an expenditure was made by the railroad of more than $50,000 in the aggregate in one year, with defendant, Dwight P. Robinson & Company, a construction concern, hereinafter called the construction company, while the railroad had as a member of its board of directors and chairman of its executive committee, defendant Homer Loring, who at the same time was substantially interested as a stockholder of record, in his own name and otherwise, in the construction company in violation of section 10 of the Clayton Antitrust Act, the pertinent provisions of which are set forth in the margin.1

1 Section 10

commerce

"That after two years from the approval of this Act no common carrier engaged in *, shall make or have any contracts for construction or maintenance of any kind, to the amount of more than $50,000, in the aggregate, in any one year, with another corporation, firm, partnership or association when the said common carrier shall have upon its board of directors or as its president, manager or as its purchasing or selling officer, or agent in the particular transaction, any person who is at the same time a director. manager, or purchasing or selling officer of, or who has any substantial interest in. such other corporation, firm, partnership or association, unless and except such purchases shall be made from, or such dealing shall be with, the bidder whose bid is the most favorable to such common carrier, to be ascertained by competitive bidding under regulation to be prescribed by rule or otherwise by the Interstate Commerce Commission ⚫; and when

ever the said commission shall, after investigation or hearing, have reason to believe that the law has been violated in and about the said purchases or transactions it shall transmit all papers and documents and its own views or findings in the transaction to the Attorney General."