There was also heard with these proceedings fourth-section application No. 15550 for authority to continue rates for the transportation of plaster, gypsum lath, gypsum wallboard, and other gypsum products within and between trunk-line and New England territories without observing the long-and-short-haul provision of section 4 of the act.

Certain-teed Products Corporation, a manufacturer of gypsum products at Akron, N. Y., Ebsary Gypsum Company, Inc., a manufacturer of like products at Wheatland, N. Y., and Celotex Corporation, a manufacturer of gypsum products, which has no plant in trunkline and New England territories, intervened in opposition to the complaints.

Pursuant to a request of complainants, a prehearing conference was held at our office in Washington, which all interested persons were invited to attend for the purpose of simplifying the issues. Representatives of the regulatory commissions of Massachusetts, Pennsylvania, and Virginia, and of the parties were present at the conference. Certain stipulations were made at the conference by the interested parties. In their original answers to the complaints, filed October 15, 1945, defendants expressed their willingness to revise the assailed rates in certain respects. They agreed: (1) To cancel all of their existing interstate and intrastate tariffs of commodity rates, classification exceptions, rules, and regulations governing the transportation of gypsum products within and between trunk-line and New England territories, except (a) they proposed to continue their present commodity rates from a group of origins in western New York, namely, Akron, Clarence Center, Oakfield, and Wheatland to New York, N. Y., including points in the New York lighterage area and Newark, N. J., provided requisite fourth-section relief is granted; and (b) to continue the present commodity rate from Wheatland to Canal Docks, Rochester, N. Y.; (2) to publish, establish, and maintain, in lieu of the present rates, except as hereafter noted, maximum rates on plaster and plaster articles, including gypsum lath, reflecting 20 percent of the first-class rates, and maximum rates on wallboard made of gypsum (not laminated) reflecting 22.5 percent of the first-class rates, such rates to apply uniformly within trunk-line and New England territories and between those territories, provided requisite fourth-section relief is granted; (3) to establish, except as provided in (1) rates on the 20 and 22.5 bases from the western New York group of origins, using Oakfield as the base point, to destinations more than 100 miles from Oakfield; to establish to destinations within a radius of 100 miles from Oakfield from each western New York origin to each respective destination rates on the bases of 20 and 22.5 percent of the

first-class rates; (4) to establish uniform descriptions of the articles upon which the proposed rates will apply, and to include gypsum lath in the group of articles on which the proposed rates on plaster will apply; (5) to substitute the term "wallboard made of gypsum not laminated" for the term "plasterboard" as descriptive of the group of articles upon which the 22.5-percent basis is to apply; but they refused to include gypsum sheathing and laminated gypsum wallboard in that description; and (6) to adopt for uniform application the mixing rules described in portions of section XV of the complaint in No. 29380, except those relating to the use of the so-called joint system in computing the required minimum weight of the carload mixture.

They refused the request in the complaint in No. 29380 to establish rates from Harlem River, South Kearny and Newark, N. J., and New Brighton, on a group basis, using Sixtieth Street Station on Manhattan Island as the base point for the group. In lieu thereof, they propose to observe the grouping customarily used in connection with class rates from those points.

They also declined to limit the number of tariff publications so as not to exceed two commodity tariffs as requested in the complaint in No. 29380, but will endeavor to limit the number of tariff publications so far as possible.

The foregoing offers in defendants' answers were made without prejudice to the right of defendants to initiate rates lower than the maximum bases in order to meet competition, if occasion for such action should arise.

In a supplemental answer filed March 11, 1946, defendants modified their original answer by agreeing to cancel all of their existing interstate and intrastate tariffs of commodity rates, classification exceptions, rules, and regulations governing the transportation of gypsum products, except the commodity rate from Wheatland to Canal Docks, Rochester.

At the hearing, defendants stated that they are willing to include laminated board in the wallboard list, thus modifying the position taken previously with respect to laminated board. They also are willing to publish a minimum weight of 40,000 pounds in connection with the rates they propose.

During the hearing, both complainants agreed to limit their complaints as to the Virginia interstate rates to that portion of the State within official territory, namely on and north of the line of the Norfolk and Western Railway Company from Norfolk, Va., to Suffolk, Va., thence the line of The Virginian Railway Company from Suffolk to Roanoke, Va., thence the line of the Norfolk & Western to Bristol, Va.-Tenn., including branches of the latter west of Roanoke.

A joint hearing was held with the Pennsylvania Public Utility Commission and the Public Service Commission of New York, whose representatives sat with our examiner. There were also present, as observers, representatives of the Department of Utilities of Massachusetts and State Corporation Commission of Virginia. Intrastate rates on gypsum products within those four States are in issue in complaints filed with the regulatory commissions of those States. Separate hearings of the intrastate complaints in Massachusetts and Virginia have been held in those States. The hearing of the intrastate complaints before the Pennsylvania and New York commissions was on the same record as the interstate complaints. Copies of this report were sent to the regulatory commissions of the above States. We have been informed that they have no suggestions or criticisms to offer.

In April 1947 a further hearing of the interstate cases was held for the purpose of ascertaining the level of rates in effect at that time, because of substantial and varying changes made in the rates on various commodities in the gypsum products lists as a result of our decision in Increased Railway Rates, Fares, and Charges, 1946, 266 I. C. C. 537.

The rates on gypsum products within trunk-line and New England territories are generally commodity rates, and have not been made on any definite basis. Some of the rates range from slightly to considerably lower than 20 and 22.5 percent of the first-class rates, others range from slightly to considerably higher than those bases, and still others are approximately on those bases. In some instances, there are no commodity rates, the basis being sixth class. In other instances, the commodity rates alternate with sixth-class rates, and the latter are applicable because they are lower. Because of the highly competitive nature of gypsum products, the location of the plants at various points in the territories, and the competition with other building materials, the present adjustment of rates has resulted principally from commercial competition. The largest consuming area in the affected territories is along the Atlantic seaboard, and all plants seek to sell in that area. Some plants, for example those located in western New York from which the hauls to the seaboard are long, enjoy a relatively low level of rates as compared with those of their competitors at the seaboard. On the other hand, the seaboard mills which are close to the large consuming area are able, by reason of shorter hauls and the extensive use of motortrucks, to dominate the business in that area by lower delivered prices to the dealers. The present rates contain many departures from the long-and-short-haul provision of section 4 of the act.

Following the denial in 1931 of general fourth-section applications, the carriers found it necessary to revise many commodity rates, including those on gypsum products, to reflect a percentage of the class rates, or to obtain permanent fourth-section relief to continue the existing temporary relief. Many meetings of the carriers and shippers were held, but it was not possible to reach agreement upon a basis satisfactory to both groups. The conditions brought about by the war led to further delay, and the industry and the carriers agreed that they would continue the status quo during the war. During the course of the meetings, it appeared that a majority of the shippers favored the proposition of relating the rates to first class. Accordingly the carriers made a traffic study to determine the percentages that would be necessary to substantially preserve their revenues on the traffic. The study covered shipments in March, June, August, and November, 1939, and indicated that class 20 on plaster and plaster articles, and class 22.5 on plasterboard and related articles would substantially preserve their revenues. Since 1940, the carriers have been of the opinion that the above bases, subject to a carload minimum of 40,000 pounds, would be a reasonable maximum. The only exceptions to these proposed bases are those previously referred to in the description of defendants' answers to the complaints.

Complainants and defendants are in agreement with respect to the general bases of rates to be applied, the uniform description 3 and mixing rule, the minimum weight, and the grouping of western New York origins to points more distant from Oakfield than 100 miles. Complainant in No. 29380 asks that both maximum and minimum rate bases be prescribed and strongly urges that producing points in the New York area, namely Harlem River, South Kearny and Newark, and New Brighton, should be grouped to destinations more than 50 miles from Sixtieth Street Station, Manhattan, which they propose be used as the base point for the group. Defendants oppose the prescription of minimum rates and the establishment of a New York origin group with Sixtieth Street Station as the base point. Complainant in No. 29405 also opposes the establishment of a New York origin group and does not advocate the prescription of minimum rates. Opposing the general bases of rates proposed by defendants were the Ebsary Gypsum Company, whose only plant in the affected territory is at Wheatland in western New York, and Certain-teed Products Corporation, whose only plant in the affected territory is at Akron in western New York. Generally, their position is that the present rates have not been proved to be unlawful, and that the complaints should

See appendix 1.

be dismissed. Their principal objection to the proposed bases is that the resulting rates would exclude them from the markets along the seaboard, which is the largest and most important consuming area in the affected territories.

The commodities comprising the gypsum products list are gypsum, calcined plaster, Keene's cement, plaster of paris, stucco, gypsum blocks, gypsum plank, gypsum filler, ground gypsum, land plaster, gypsum lath, plaster retarder, gypsum wallboard, gypsum sheathing, and gypsum wallboard joint system. The last-mentioned commodity consists of a reenforcing fabric of paper or metal plus a compound that is used to bind together two pieces of wallboard, thereby producing a wall without visible joints. The reenforcing fabric and the compound are packed in a box as a unit, and together they become the gypsum wallboard joint system. The joint system is shipped in cars with the gypsum wallboard.

The weighted average value of the products included in the plaster list, excluding gypsum filler and lime, in mixed carloads, was $11.24 per 2,000 pounds in 1944. For the gypsum wallboard list, the weighted average value, excluding the joint system, was $26.31 per ton. In 1944, the wholesale prices of plaster and plasterboard were $12.39 per ton and $15.02 per 1,000 square feet, respectively, delivered to customers; and in 1946, $13.93 per ton and $18.46 per 1,000 square feet, respectively. Plaster is usually shipped in heavy paper bags containing 100 pounds, in boxcars. Gypsum block and tile are loaded in boxcars without any packaging, somewhat like brick and certain types of clay tile. They are shipped loose, but may have a bed of straw or chipboard in order to bind the piles to the car. Gypsum lath is bundled and has a gum strip down the side of six pieces, which forms a shipping package. Gypsum wallboard is shipped so that the two finished faces are face to face, with a gum strip over the edges. The car is lined and the floor of the car is covered either with paper or scrap plasterboard, and the two-sheet bundles of wallboard are piled in the end of the car. Wire is tied to the car sides for bracing in the car. For all of these products, except plaster and blocks, the car sides must be lined with either paper or scrap plasterboard and the products must be wired tight to the car floor.

The weights of the major gypsum products range from 43 pounds a cubic foot on plaster to 53 pounds a cubic foot on gypsum wallboard, and the mathematical average density of the major gypsum products is 49.88 pounds a cubic foot. The average weight in the plaster list is approximately 3 pounds less than the average in the wallboard list, but there are items in the two lists which overlap in density. The