one gateway, the rate to or from the highest-rated gateway over reasonably direct routes may be used as the minimum.

The alternative application of fifth-class rates in the tariffs to extended zone C under the decision cited reduced many of the former rates on hay from the Michigan and Ohio territory. However, to numerous destinations in western trunk-line territory west of extended zone C, the restriction to the fifth-class gateway minimum rates established a level somewhat higher than the new class C rates. The class C scale rates under the findings in Western Trunk-Line Class Rates were also made effective on December 3, 1931, from the origin territory in Michigan, Indiana, and Illinois alleged to be preferred, to apply to Wisconsin, northern peninsula of Michigan, and the border destinations here considered, alternatively with the rates in effect on December 2, 1931. However, from the alleged preferential territory the rates which were in effect on December 2, and which were somewhat lower than the new class C rates, prevailed generally after that date from western Lower Michigan, Indiana, and Illinois, and from western trunk-line territory, rather than the class C basis. To Wisconsin numerous commodity rates lower than the class C basis had also been in effect prior to December 3, 1931, from some portions of the preferred territory. Rates on hay from Indiana to Wisconsin had been fixed by us in Indiana Public Service Comm. v. Atchison, T. & S. F. Ry. Co., 66 I.C.C. 512, 88 I.C.C. 709; and in Class Rates to Twin Cities, 107 I.C.C. 665, rates on hay were prescribed to the Twin Cities and Duluth, Minn., and to intermediate points in western lower Michigan and in Wisconsin. Many of those rates were lower than the class C basis fixed in Western Trunk-Line Class Rates and they prevailed as the applicable rates after December 2, 1931, under the finding prescribing alternative rates.

For distances of 280 to 620 miles, which embrace the movements here considered, the first-class rates within western territory range from $1.10 to $1.61, and within official territory 87 cents to $1.25, which indicates the higher level of the rates in western territory. The ratings on hay of class C in western territory and fifth class in official territory result in rates of 33 to 48 cents for zone I in western territory and 30 to 44 cents in official territory, for the distances mentioned above. Normally, therefore, the scale rates, if not alternated against other bases or subjected to gateways minima, would be on a consistently higher level in the West than in official territory. This record establishes, however, that the assailed rates are 20 to 40 percent higher for the same or lesser distances than the rates to the same destinations from origins in Illinois, Indiana, and typical points in western trunk-line territory.

Based on relationship to first class, the level of rates on hay from the allegedly preferred territories is shown to range from 21.9 to

25.6 percent, as compared with the level from eastern Lower Michigan and western Ohio approximating 35 percent in official and 30 percent in western territory, dependent upon the location in zone C extended or in western trunk-line territory. Typical examples are shown of record as follows: From Sycamore, Ill., to Spring Valley, Wis., 333 miles, the rate is 26.5 cents, or 24.3 percent of first class as compared with 35 cents, or 33.9 percent of the first class, from Defiance, Ohio, to Lodi, Wis., 334 miles; to Menominie, Wis., the rates are 47 cents from La Carne, Ohio, 589 miles, and 45 cents from Lima, Ohio, 543 miles, both 30 percent of first class, as compared with a commodity rate of 40 cents from Lexington, Nebr., 617 miles, and a rate of 35.5 cents from Richmond, Ind., 551 miles, equaling 23 and 25 percent of first class, respectively; to Watertown, Wis., the rate of 29.5 cents from Hillsdale, Mich., 274 miles, is 35 percent, as compared with the rate of 21.5 cents from Jacksonville, Ill., 276 miles, 25.6 percent of first class. The rate of 35 cents from Defiance to Lodi, mentioned above, results by reason of application of the minimum rule governing the gateway minimum provision previously quoted. That rate is the minimum fifth-class rate to the highest rated border-line gateway. If the class C scale for the total distance, origin to destination, were applied the rate would be 32 cents. Lodi is but 17 miles from Madison, Wis., which takes a rate of 31 cents from Defiance.

The minimum-rate provision was fixed in Western Trunk-Line Class Rates primarily to eliminate departures from the long-andshort-haul provision of section 4 of the Interstate Commerce Act, but its observance in connection with rates on hay results in holding many hay rates between central and western territories to a level higher than the class C basis, which apparently was intended under that decision to apply as maximum. In Boston Wool Trade Assn. v. Ahnapee & W. Ry. Co., 185 I.C.C. 365, under a comparable state of facts affecting rates on wool in the grease to the East, it was found that the basis therein prescribed should not be subject to the minimum-rate provision quoted herein. Reasonably the interterritorial rates on hay should not exceed the rate level of the higher rated of the territories between which the shipments moved.

The record indicates that complainant's numerous shipments of hay westbound constituted an exceptional movement due to the insufficient supply of alfalfa and clover hay in western trunk-line territory, where complainant had theretofore secured hay for shipment to Wisconsin. The users of hay in that State require alfalfa or clover hay as feed for dairy cattle, and those varieties were available in eastern Lower Michigan and northwestern Ohio when a supply could not be secured in the West, due to drought conditions.

Complainant instances a rate of 32.5 cents from Kansas City, Mo., 630 miles, and Sioux City, 530 miles, to Green Bay, Wis., and a large section of southern Wisconsin. He shows that in southeastern territory hay is rated 27.5 percent of first class, and that in the Southwest, including Texas, Arkansas, and Louisiana, commodity scale rates not related to class rates apply, as follows: 200 miles 25 cents, 300 miles 29 cents, 400 miles 34 cents, and 500 miles 37 cents, as fixed in Hay From Texas, 136 I.C.C. 693. Complainant refers also to the present rates approximately on the sixth-class basis from Indiana, Ohio, and Lower Michigan to the Chicago district. However, the tariffs indicate that those rates were established to meet motor-truck competition. Complainant seeks a scale of commodity rates based on 25 percent of first class. The record however is not of such a comprehensive scope as would warrant prescription of a scale based on 25 percent or any specific percentage of the class

rates.

Defendants refer to finding 20 of Western Trunk-Line Class Rates, page 226, where we stated:

We find that the maximum reasonable rates on hay, straw, potatoes, cabbage, apples, and wool in the grease, in carloads, where they now move under class rates over all-rail or lake-rail routes which are required to be revised by the findings in this report, are, and for the future will be, the rates now maintained, subject as maximums to the rates prescribed or required in this report on the respective class according to which the particular article is rated in the governing classifications or exceptions, without prejudice to the modification of such rates by usual methods of procedure and independently of these proceedings.

The above findings 17, 18, 19, and 20, are also subject to the provision requiring the application of the combination rates if they make lower rates.

They refer also to finding 9 on page 210 of that decision. They point out that the assailed rates on hay, both east and west of the Mississippi River, have been fixed by us and urge that class C rates between points in official territory and western trunk-line territory, and fifth-class rates within official territory and to extended zone C in Wisconsin, are reasonable. They state that hay moves freely within central territory on basis of fifth class, and are supported in that position by Robinson-Ransbottom Pottery Co. v. New York C. R. Co., 181 I.C.C. 639, decided January 30, 1932, in which the rates on packing hay, in carloads, from origins in Indiana to Roseville, Ohio, were found not unreasonable, and wherein we said:

In National Hay Asso. v. M. C. R.R. Co., 19 I.C.C. 34, the fifth-class rates were approved for hay in carloads in central territory, and it has moved very generally on those rates since. By our findings in the Eastern Class-Rate Investigation, 164 I.C.C. 314, all carload rates on hay in official territory remained unchanged except where the new fifth-class rates were lower.

Defendants instance 161 of complainant's shipments originating at points on the New York Central lines and destined to western trunk-line territory. Those shipments moved an average distance of 457 miles, and based on the average weight of 24,263 pounds on 24,807 shipments originating on the New York Central in 1931, earned $94.54 per car and 20.7 cents per car-mile. On 21 other of complainant's shipments, moving an average distance of 350 miles to extended zone C, the earnings were $84.52 per car and 24.1 cents per car-mile, based on the average weight mentioned above. They urge on that showing that the rates assailed cannot be considered excessive. Defendants cite numerous decisions wherein we have approved fifth-class rates as reasonable on various articles which for comparable distances return much higher earnings per car and per car-mile than hay. The articles listed load to average weights much greater than hay. The relative values are not given.

Defendants urge that no undue prejudice exists under the facts adduced in this record, since there was no hay available for movement from the allegedly preferred territory when the instant shipments moved from Michigan and Ohio, and that the complainant's operations as a broker relate simply to the purchase of hay where available in supply and price, and its sale where there is demand and profit. They cite Sunderland Bros. Co. v. Chicago, B. & Q. R. Co., 148 I.C.C. 484, wherein division 4 stated:

Undue prejudice ordinarily requires that competitive relationship exist between the parties, commodities, or localities concerned. A mere showing that rates are relatively higher from one point than from another does not establish undue prejudice.

The record shows that normally 80 percent of the hay produced in eastern Lower Michigan and Ohio moves eastwardly, with some movement to points south of the Ohio River. It is apparent here that the essential competitive element which would support a finding of undue prejudice and preference is absent and that the real issue is one of unreasonableness.

There is nothing in the instant record to support conclusions other than those reached upon an exhaustive record in Western TrunkLine Class Rates relative to the general levels of rates as therein fixed. However, the facts show that the restriction to rates to the gateways as a minimum basis from the central territory of origin here considered to zone I operates in numerous instances to increase these rates to a basis higher than the general level of class C rates. between these territories, resulting in a situation not heretofore brought to our attention. Properly that minimum restriction should be removed on hay following like action taken in respect of rates

on wool in the grease in sacks in Boston Wool Trade Assn. v. Ahnapee & W. Ry. Co., supra.

In view of the fact that the principle announced in Arizona Grocery Co. v. Atchison, T. & S. F. Ry. Co., 284 U.S. 370, precludes an award of reparation in this case under section 1 of the act, a finding as to the past under that section would serve no useful purpose. We find that the rates herein assailed were not and are not unduly prejudicial. We further find that for the future the rates assailed will be unreasonable to the extent that they exceed class C rates prescribed in Western Trunk-Line Class Rates, without observance of the provision in paragraph two of page 210 thereof for the application of the zone 1 gateway rates as minima between the origin territory in Michigan and Ohio on the one hand and western trunkline territory in Wisconsin, Upper Peninsula of Michigan and border points in Iowa and Minnesota.

An appropriate order will be entered.

198 I.C.C.