In anticipation of the movement considered, complainant requested the outer belt to establish a proportional commodity rate of $1 on brick and articles taking the same rates from Indiana Harbor to Niles Center. This request was predicated upon the existence of a like rate in effect from and to other points in the same origin and destination territories. The outer belt promised to publish this rate in time for the movement but, due to the urgency of other matters and an error in compiling the tariff, it was not made available until August 5, 1932. Reparation is sought based on a rate of $1.40. On this basis the charges would be $632.33.

The matter was seasonably presented by special-docket application and defendants expressed willingness to make refund to the basis sought. The application was denied on November 15, 1932, because of insufficient evidence that the rate charged was unreasonable and on reconsideration this action was affirmed December 14, 1932. At the formal hearing defendants adhered to this original contention that the class basis was too high for this traffic and that the rate subsequently established is reasonable.

Hammond and Indiana Harbor, as stations on lines of carriers other than the outer belt, are within the defined Chicago switching district and take the Chicago rates. As stations on the outer belt these points, though not specifically included in that district, are usually accorded the same rates as Chicago. Rates on slabs from Chicago to points in the destination territory considered are generally on the scale prescribed in National Paving Brick Mfrs. Assn. v. A. & V. Ry. Co., 68 I.C.C. 213, hereinafter called the General Brick case, on articles in the uniform brick list for application in central territory, including all points in Illinois. The uniform brick list prescribed in that case embraced only clay and shale products but the carriers in all territories have voluntarily enlarged the list by the addition of other articles, including the commodity shipped. The rate factor here assailed is an exception and has been maintained on the classification basis due to the circuitous nature of the outer belt-North Shore route from Indiana Harbor to Niles Center. This route is 71 percent longer than the short-line route of the Indian Harbor Belt and North Western from and to the same points, 78 miles.

Complainant shows that at the time of movement the outer belt maintained a local rate of $1.20 and a proportional rate of $1 over its line from Chicago to Waukegan, Ill., 120 miles, and that these rates applied between those points over the North Western for a haul of 36 miles. The latter carrier operates the short route from Chicago to Waukegan and the local rate of $1.20 over that route is equivalent to the scale rate for that distance.

Complainant also instances contemporaneous proportional rates ranging from $1 to $1.45, applying in connection with the outer belt and North Shore from Hobart, Ind., to northern Illinois and Wisconsin points for distances ranging from 113 to 131 miles and yielding from 31.3 to 36.3 cents per car-mile and from 7.6 to 8.8 mills per ton-mile. The proportional rate of $1 subsequently established for the 133-mile haul from Indiana Harbor to Niles Center would yield earnings of 30.8 cents per car-mile and 7.5 mills per ton-mile.

In Federal Cement Tile Co. v. I. H. B. R. Co., 136 I.C.C. 689, division 3 found the rates on slabs, in carloads, from Hammond to Homewood, Ill., 10.4 miles, unreasonable to the extent that it exceeded the rate on articles in the uniform brick list prescribed in the General Brick case, for hauls in central territory equivalent to the distance from Chicago to Homewood, 23.4 miles. The short-line or rate-making distance from Chicago to Niles Center is over the North Western 12 miles, and the rate prescribed in the General Brick case for that distance is 90 cents. This rate applied during the period of movement from Hammond and Indiana Harbor over the shortline route of the Indiana Harbor Belt and the North Western. On exceptions complainant states that it did not avail itself of the lower rate over this route because the consignee required delivery on the North Shore, which carrier has no track connection with the North Western at Niles Center.

While neither the fact that a lower rate applied over another route nor the subsequent voluntary reduction of the rate over the route of movement is of itself a sufficient basis to justify an award of reparation, nevertheless, these facts taken in conjunction with the evidence of record warrant the conclusion that the rate sought would have been reasonable for the services rendered.

We find that the rate assailed was unreasonable to the extent that it exceeded $1.40; that complainant made the shipments as described and paid and bore the charges thereon at the rate herein found unreasonable; and that it has been damaged thereby and is entitled to reparation in the sum of $225.83, with interest. An order awarding reparation will be entered.

MILLER, Commissioner, dissenting:

This complaint was brought under sections 1 and 3. I am unable to find any sound grounds upon which we may condemn the rate charged as unreasonable nor do I find the slightest evidence of damage as the result of any undue prejudice which may have existed. The complaint should be dismissed.

No. 25817

MANUFACTURERS' ASSOCIATION v. AHNAPEE & WESTERN RAILWAY COMPANY ET AL.

Submitted October 5, 1933. Decided December 19, 1933

Class rates between Lancaster, Pa., and points in central and western trunkline territories found not unreasonable or unduly prejudicial. Complaint dismissed.

C. F. Witmeyer, Daniel Weinhold, and E. G. Siedle for complainant.

Joseph F. Eshelman and H. Merle Mulloy for defendants.

REPORT OF THE COMMISSION

DIVISION 3, COMMISSIONERS MCMANAMY, LEE, AND MILLER BY DIVISION 3:

Exceptions were filed by complainant to the examiner's proposed report.

Complainant, an organization composed of firms, corporations, and individuals of Lancaster County, Pa., by complaint filed February 13, 1933, alleges that the class rates between Lancaster, Pa., and points in central and western trunk-line territories are unreasonable and unduly prejudicial. Lawful rates for the future are sought. Rates and differences in rates stated herein are in amounts per 100 pounds.

In the establishment of rates on December 3, 1931, under the eastern class-rate adjustment, defendants grouped York, Pa., with Harrisburg, Pa., and Lancaster with points taking Reading, Pa., rates. This adjustment as hereinafter explained has resulted in higher class rates from and to Lancaster than are in effect from and to York. The theory of the complaint is that the bases referred to are unduly prejudicial to Lancaster and unduly preferential of York.

Lancaster and York are in adjoining counties which bear those respective names, the Susquehanna River serving as a dividing line. Reading is about 51 miles east of Harrisburg, Lancaster is 42 miles southwest of Reading and 36 miles southeast of Harrisburg. York is 28 miles southeast of Harrisburg and about 58 miles southwest of Reading.

In our report in the above-mentioned investigation, 164 I.C.C. 314, hereinafter referred to as no. 15879, we prescribed among other things, in lieu of former extensive basic groups a key-point system of class rates between points in New England and trunk-line territories and points in central territory. The key points which were selected include all of the larger centers of population and industry and certain smaller points chosen because of geographic reasons. It was not intended that the key points should be centers of groups, but rather that the rates so fixed would be blanketed back through all intermediate points to the next key point to which a rate was specifically prescribed. Allowance for such application was made in determining the key rates. We stated that the groups used in connection with the key rates should not be so delimited as to divide stations which constitute a single industrial community. Such key rates were based to a large extent, but not rigidly, on distance. In checking in the rates defendants were permitted, if they found it desirable, to use a few additional key points, provided rates therefor harmonized with those prescribed.

Among others, specific class rates were prescribed from and to points in central territory and Harrisburg, Reading, and Philadelphia, Pa., and Frederick, Md., as key points. Lancaster and York were not designated as key points, nor were class rates specifically prescribed from and to those points. Complainant contends (1) that Lancaster and contiguous points should be accorded the York rates, (2) that neither Lancaster nor York should be grouped with Reading, (3) and that if the Harrisburg group is not enlarged to embrace Lancaster points an additional key-point group between Reading and Harrisburg should be prescribed which will afford Lancaster a rate relationship consistent with its location.

No attempt is made by complainant to show rates to and from western trunk-line territory, it being of the view that obviously the same transportation conditions pertain thereto as between Lancaster and points in central territory. For many years prior to December 3, 1931, Lancaster and Reading had been embraced within the extensive Philadelphia group and Harrisburg, York, and Frederick in the extensive Baltimore, Md., group with respect to rates from and to points in central territory. On eastbound traffic the class differentials on the six classes from points in central territory were 2 cents to Philadelphia and 3 cents to Baltimore groups under New York, N.Y. On westbound traffic to points in central territory the class differentials from points in the Philadelphia group were 6 cents on first and second classes and 2 cents on the remainder of the six classes; and from points in the Baltimore group the differentials

were 8 cents on first and second classes and 3 cents on the remaining classes under the corresponding class rates from New York. On December 3, 1931, the average first, fourth, and sixth class rates to 105 key points in central territory became 132, 66, and 36 cents from Lancaster, and 126, 63, and 35 cents from York, resulting in respective spreads in those rates of 6 cents, 3 cents, and 1 cent, York under Lancaster, as compared with rates applicable on the same classes on December 2, 1931, of 132, 62, and 44 cents, respectively, from Lancaster, and 130, 61, and 43 cents from York, which latter rates reflected differentials of 2 cents, 1 cent, and 1 cent on those classes in favor of York. On December 3, 1931, the eastbound and westbound first, fourth, and sixth class rates to and from Lancaster resulted in differentials of 6, 3, and 2 cents under the Philadelphia basis and 6 cents, 3 cents, and 1 cent, York under Baltimore. As compared with the prior adjustment the rates established on December 3, 1931, are advantageous to Lancaster as well as to York.

The principal industrial activities in Lancaster County are in an area bordered by Bainbridge, Mount Joy, Lancaster, and Columbia, Pa., while those in the industrial area of York County are bordered by York, Red Lion, and Hanover Pa. Complainant states that these two areas are substantially a single industrial community and as like commodities are bought and sold in competition by concerns in both areas the same class rates should have been prescribed from and to the community as a whole. To the 105 key points in central territory above referred to, the average distances are from Harrisburg 641 miles, from Reading 692 miles, from points in the Lancaster area, 667 miles, from York 665 miles, and from points in the York area 677 miles, which indicates that the Harrisburg basis applies from points in the York area for a greater average haul of 36 miles whereas the higher Reading basis applies from points in the Lancaster area for an average haul of 25 miles less than that from Reading.

Harrisburg, Reading, Philadelphia, and Baltimore are notably near the eastern boundaries of the respective groups to which keypoint rates were provided in no. 15879. As above stated, Reading, for example, is about 51 miles easterly from Harrisburg and assuming one half of that distance, or 25.5 miles, to be the average distance to the center of the Reading group, the average distance to central points from the group would be 25.5 miles less than the average distance from Reading, or 666.5 miles. The average distance from Lancaster proper to central-territory key points is 675 miles, or 8.5 miles in excess of the average thus calculated. Columbia is 1.5 miles in excess, and Bainbridge and Mount Joy 5.5 and 1.5 miles