to their transportation function, that such cars move as instrumentalities of transportation (rather than property for which a charge may be assessed) when switched for ordinary repairs, that no separate charge may be assessed for such movements and that privately owned cars do not lose their status as instrumentalities of transportation until they are finally scrapped. They contend that imposition of a separate charge would require them to pay twice for the same service, since line-haul rates applicable to freight carried in such cars already include compensation for all costs incurred in keeping the cars in good repair.

The protestants take exception to the Administrative Law Judge's finding that EC&H is a switching line, and assert that, even if this were true, no distinction should be drawn because switching carriers generally derive significant revenue from switching movements of privately owned cars. They claim that EC&H, as a class II short-line railroad, could remedy its disproportionately high empty nonrevenue mileage by seeking more equitable divisions of revenues with participating line-haul carriers. They note that the Mileage Allowances cases, supra, called for an industrywide solution to protect carriers with such imbalances. Such an approach is believed necessary to protect shippers and car owners. For example, in Docket No. 35537, Manufacturing Chemists Assn. v. Aberdeen & Rockfish R. R. Co., the railroads and private car interests jointly proposed to publish a 105-percent equalization rule which would allow the railroads to account among themselves for excess nonrevenue empty tank car mileage.10 It is submitted that such an approach is in full keeping with the Commission's call for a central railroad agency to collect and fairly distribute payment for unequalized tank car mileage.

Protestants contend that the fact that mileage allowances do not include an element to compensate car owners for empty movements to and from repair facilities answers the concern of Commissioner Patterson in the Passenger Car case and removes the basis for his dissent. Moreover, were separate charges to be condoned, existing mileage allowances would constitute unreasonable car service provisions in violation of section 1(11) of the act, unless adjustments to include repair costs were made.

The issues of compensation for repair movements and mileage allowance levels are seen as two aspects of the problem of the scope and extent of a common carrier's duty to provide transportation.

This rule became effective on January 1, 1977, and is published in item 120 of supplement 23 to J. F. Doyle, Agent, Mileage Tariff 7-F, ICC H-68.

Protestants argue that mileage allowances compensate private car owners for the cost of providing equipment which the railroads are obligated to provide. Similarly, the cost of moving cars to and from repair facilities is an essential part of a railroad's duty to furnish cars in good order to shippers for loaded movements. Protestants assert that the same rationale which led the Commission in Cancellation of Private Car Allowances, 322 I.C.C. 565 (1964), affirmed 279 F. Supp. 270, affirmed 389 U.S. 88, to hold that the duty to pay reasonable mileage allowances extended to all common carriers by rail should also apply here. They therefore contend that the Administrative Law Judge should not have given special weight to EC&H's erroneously assumed status as a switching carrier in attempting to carve out an exception to prior case law.

Similarly, an attack is made upon the Administrative Law Judge's analogy between the instant situation and demurrage charges for car detention beyond the free time allowed. The interveners contend that the allotted free time fixes the extent of the carrier's obligation. to provide transportation service. Detention beyond that time is viewed as an additional service to the shipper for which a separate charge may be assessed. However, ordinary repairs are part of the basic common carrier duty to furnish necessary equipment in good order. Therefore, no separate charge may be assessed in connection therewith.

Protestant attempts to distinguish several other proceedings in which the Commission found separate charges just and reasonable. In Docket No. 36044, Southern Car Service, Inc. v. Western Railway of Alabama, and Docket No. 36111, Charges for Movement of Empty Cars, Southern Territory, charges for the movement of privately owned cars to and from a car-cleaning facility were ultimately found just and reasonable. Protestants aver that since the repair shop owner did not pass along the charges to private-car owners or users, the private-car interests did not protest their publication or seek to intervene. Accordingly, the records in those proceedings did not contain any evidence pertaining to the relationship of mileage allowances to offset the cost of ownership of private cars, the cost of empty repair movements, and the line-haul rates for freight transported in such private cars. While the record in these two proceedings did not support a finding of unlawfulness, protestants contend that such a finding is warranted by the more detailed and fully developed record in this proceeding.

Finally, protestants argue that if any charge were justified, the level of that charge would have to be at "bare-bones operating costs," a cost which does not include a return on investment as does variable cost for ordinary freight shipments. This is said to follow from the status of the movements as those of instrumentalities of transportation rather than of property. They contend that the rail pricing policies indicated by the 4R Act can have no retroactive application here because EC&H's charge became effective on January 10, 1975, prior to the effective date of the 4R Act.

Respondent replies that the empty switching movements in question constitute 18 percent of their total business and that the lack of revenue therefrom is causing substantial financial hardship. Since all loaded EC&H traffic has moved in carrier-owned cars since October 1, 1974," it is claimed that the absence of a just and reasonable charge would unlawfully require EC&H to perform a transportation service without compensation of any kind. EC&H charges that this would result in a denial of due process and an unconstitutional taking of property without just compensation.

EC&H argues that all the cases on which protestants and interveners rely are distinguishable from the instant situation and that they do not set up an absolute rule. Rather, it is urged that an adequate factual foundation, as where the carrier in question obtains virtually no revenue from the movement of privately owned cars, will permit the imposition of a separate charge for empty repair movements of such cars. Southern Car Service and Charges for Movements of Empty Cars are cited as other instances where particular special conditions have led the Commission to find the imposition of such separate charges as just and reasonable.

EC&H views Union Tank Cars as limited to consideration of whether a carrier which participates substantially in revenue from loaded private car movements to and from a particular terminal could switch bad order tank cars from the same shipper's plant to a car repair facility at the same terminal without imposing a separate charge for the service. It believes that the policy underlying this and related cases was concisely stated in Compensation for Transportation Services, 332 I.C.C. 554, 565 (1968), affirmed sub nom. Southern R. Co. v. U.S., 306 F. Supp. 108 (1968), which

"The record shows that from EC&H's inception in 1971, through October 1, 1974, 47 tank cars and 158 other-than-tank cars were moved for repairs. Of these, all nontank and all but three tank cars were moved for shippers whose leases have since expired and were not renewed. The other three cars were for TT's benefit: one was misbilled when the shipper believed it empty, and the other two involved the transfer of a dangerous commodity from one to the other. No other loaded private-car movements are anticipated in the foreseeable future.

expressed the belief that divisions of revenues would compensate particular carriers for empty nonrevenue movements. Seen in this light, the Mileage Allowances case is characterized as involving a proposal by the major trunk line carriers, each of whom participated substantially in loaded private-car revenue movements and for whom their divisions of revenue would compensate for empty nonrevenue movements. Respondent implies that the interests of smaller lines with peculiar situations could not be properly developed or adequately protected in such a proceeding.

EC&H argues that if protestants would be charged twice for the same service then the fault lies not with EC&H which actually performed the service, but rather with the line-haul carriers which collect for a service which they do not perform. Although EC&H recognizes the practical problems involved in identifying specific line-haul carriers, it suggests that protestants' appropriate remedy would be to file a complaint against any such railroad which has collected for services which it has not actually performed or to use the on-going proceeding in Ex Parte No. 328, Investigation of Tank Car Allowance System, 12 to seek any appropriate adjustments in mileage allowances.

Finally, EC&H urges that its charge for empty repair movements cannot constitute an unreasonable car service rule within the meaning of section 1(11) of the act because it does not participate in loaded private-car revenue traffic.

d. Docket No. 36379.-IHB, purportedly as a response to charges in item 125, rule 3, and item 260, rule 7, of Mileage Tariff 7-F (J. F. Doyle, Agent), 13 filed exceptions to such provisions in supplement 11 to Mileage Tariff 7-F, effective July 1, 1976." These exceptions

"This proceeding is presently being held in abeyance, pending further order of the Commission, by order dated September 15, 1976.

"IHB contends that prior to April 1, 1976, provisions of these items stated that empty moves of privately owned cars to and from repair facilities would be performed free of charge, while other empty moves might be subject to a mileage charge provided conditions listed in the tariff were met. They argue that revisions effective April 1, 1976, expand the free empty-repair concept to all empty moves. The language in question, contained in paragraph B(1) of item 125-B and paragraph B-2(a) of item 260-B, reads as follows:

Except as otherwise provided in this tariff, cars covered by this section will be moved empty without charge between stations or junction points upon receipt of instructions from the car owner or lessee, confirmed in writing ***.

"These exceptions, published in items 78 and 198 to said tariff, provide as follows:

The provisions of Item 125, Rule 3 (Item 260, Rule 7), or other provisions for the movements of empty tank (freight) cars without charge to or from facilities for cleaning. (footnote continued on next page)

would have the effect of imposing a $44.85 charge per car, pursuant to IHB's local switching tariff, where the Mileage Tariff failed to provide a charge for empty private-car movements to and from repair facilities and where no revenue movement on the IHB immediately precedes or follows the repair movement.

GATCO, Union, NACC, Pullman, and U.S. Railway Equipment Co. (USREC) filed verified protests and petitions for suspension against the proposed exceptions. By order served July 7, 1976, the Commission, Suspension and Fourth Section Board, declined to suspend, but did institute an investigation into the lawfulness of the proposed exceptions and into the general issue of the propriety of any charge for the empty movement of privately owned cars on their own wheels to and from repair or cleaning facilities. The proceeding was set for modified procedure by order served July 16, 1976. IHB filed its opening statement on August 18, 1976. Statements in reply were filed October 7, 1976, by Office of the Judge Advocate General, Department of the Army (DOA), and jointly by GATCO, Union, and NACC, and on October 8, 1976, by Gulf Oil Company (Gulf), and jointly by Pullman and USREC. A telegraphed statement in opposition was received from American Cyanamid Company on October 5, 1976. IHB filed a reply to these statements on October 18, 1976. Thereafter, leave to intervene was granted to Manufacturing Chemists Association, Inc. (MCA), and its statement was accepted for filing on December 13, 1976. IHB subsequently declined to file any further statement in reply.

IHB argues that section 15(15) 15 of the act requires that compensation to private owners who furnish railroad equipment or services shall be in the form of a paid charge or allowance to be filed with the Commission. The Commission does not have the authority to order payment in any form other than money, particularly not in the form of free transportation. Moreover, it contends that the Commission has no power to order a railroad to furnish free transportation, even where the act authorizes it. IHB does not believe that the distinction between "property" and an "instrumentality of transportation" is significant. It notes that

(footnote 14 continued)

lining, relining, maintenance, modification, or repair, will not apply to such cars moving to or from facilities served by Indiana Harbor Belt Railroad Company unless the empty movement is immediately preceded by or followed by a loaded revenue movement via Indiana Harbor Belt Railroad Company. In all other circumstances, the published tariff charges for movement of empty cars on their own wheels shall apply.

"Formerly section 15(13).