Interstate Commerce Commission Reports

and other items of service. These prices may not be unilaterally changed. The charges paid by the railroad for the protective services must be based on cost of such services to the protective service company and may include profit not in excess of 6 percent. Western Pacific Railroad Company contracts with National Ice and Cold Storage Company, Union Ice Company, and Valley Ice Company. The railroad has entered into contracts with these three ice companies whereby ice and salt are furnished in cars at specific prices set forth in each agreement. The agreements provide that request for change in such prices is to be subjected to mutually satisfactory negotiations; the Valley Ice Company contract provides that the parties shall mutually agree upon what shall constitute a price to yield a reasonable profit for the services rendered or to be rendered for the ensuing year. The charges paid by the railroad to the contractors must be based on cost to the ice company and may include profit not in excess of 6 percent. Approved contracts listed in appendix hereto.- In accordance with our regulations hereinbefore referred to, contracts which we can approve unconditionally should require that charges for protective services shall be the cost to the carlines or other companies performing such services and may include a reasonable profit not in excess of 6 percent of book cost of property, less depreciation, and allowance for working capital, and also provision for adjustments of the interim charges as soon as practicable after the end of each year. As we already indicated, the contracts entered into between the railroad controlled carline companies do include such requirements and provision for adjustments of interim charges, except that in two cases specific reference to allowance for working capital is not made in the contracts. On the other hand, the contracts entered into between the railroads and the independent protective service companies, namely, the Canadian Pacific Railway, the Bangor and Aroostook Railroad, the Boston and Maine Railroad, and the Maine Central Railroad with Maine Potato Shippers' Heater Service, Inc.; the Illinois Central Railroad with M. J. Schiffer Company and Lucille Venditti; the Erie-Lackawanna Railroad with Thermo King Corp.; and the Western Pacific Railroad with the three ice companies, include such provisions in part only or not at all. Therefore, we are unable to approve these contracts unconditionally in the same way as we approve the contracts between the railroads and the carline companies. We will approve the contracts with these independent companies which furnish protective service, subject to the condition that new or supplemental contracts are

to be submitted for approval from time to time, as may be necessary, to revise the specific unit charges and prices specified in the contracts to the basis of current cost of performing the protective services and which may include 6 percent profit, as provided for in our regulations.

The contracts which we can approve unconditionally, and which are hereby approved, are listed in appendix 1 hereto as approved protective service contracts Nos. PS-1 to PS-80, inclusive. The contracts entered into between the railroads and the independent companies which furnish protective services to the railroads and which we hereby approve, subject to the condition referred to above, are listed in appendix 2 hereto as approved protective service contracts, and designated as Nos. PS-81 to PS-90, inclusive. The specific charges and unit prices and the other provisions of these contracts may be reconsidered by us from time to time and such revisions required as the facts may appear to demand.

Carlines and other companies furnishing protective services to railroads and express companies should maintain accounts, procedures, and supporting records adequate to insure that cost of performing such services for each year can be determined accurately and to enable proper adjustments of the charges as soon as practicable after the end of each year, or for use in new or revised contracts, as may be appropriate. Railroads which control the carline companies should cooperate and participate with the carline companies in the performance of the provisions of contracts which we approve.

An appropriate order will be entered.

321 I.C.C.