No. 25655

JOSEPH B. MARCUS & COMPANY v. CHICAGO, MILWAUKEE, ST. PAUL & PACIFIC RAILROAD COMPANY ET AL.

Submitted November 18, 1933. Decided January 16, 1934.

Rate on scrap steel rails, in carloads, from Braun & Bennett's Spur (Rockland), Mich., to Kenosha, Wis., found not unreasonable. Complaint dismissed. R. W. Schapanski for complainant.

J. N. Davis and P. F. Gault for defendants.

REPORT OF THE COMMISSION

DIVISION 3, COMMISSIONERS MCMANAMY, LEE, AND MILLER

BY DIVISION 3:

Exceptions were filed by complainant to the report proposed by the examiner, and defendants replied.

Complainant, Joseph B. Marcus, an individual doing business at Hancock, Mich., as Joseph B. Marcus & Company, alleges by complaint filed October 28, 1932, that the rate charged on six carloads of scrap steel rails from Braun & Bennett's Spur, Mich., to Kenosha, Wis., which moved as routed between October 26 and November 1, 1929, over the line of the Chicago, Milwaukee, St. Paul & Pacific Railroad Company, hereinafter referred to as the Milwaukee, to Milwaukee, Wis., thence over the line of the Chicago & North Western Railway Company, hereinafter referred to as the North Western, beyond, a total distance of 350 miles, was unreasonable. An informal complaint covering these shipments was filed January 15, 1930, and closed September 22, 1932. Reparation only is sought. Rates will be stated in amounts per ton of 2,240 pounds, except as otherwise noted, and will not include the formerly authorized emergency charges.

Braun & Bennett's Spur is situated in the northern peninsula of Michigan on the Milwaukee, 7 miles south of Ontonagon and 13 miles north of McKeever, Mich. It is under the supervision of the agency at Rockland, Mich. The shipments averaged 65,050 pounds. A combination rate of $4.64 was charged, made up of $3.52, to Milwaukee and $1.12 beyond. This rate is assailed as unreasonable to the extent it exceeded $2.93.

Complainant refers to a commodity group rate of $3.52 on scrap iron or steel rails and crossties from Braun & Bennett's Spur to

Chicago, Ill., and 29 nearby points in Wisconsin, Illinois, and Indiana, including Kenosha, for an average distance of 445 miles. That rate is applicable over the Milwaukee and connecting lines. The North Western does not participate in that rate, but does maintain like rates from points on its line to the same destinations. Complainant also points out that there are commodity group rates ranging from $2.67 to $3.52 on iron and steel rails to these destinations from other points in Michigan and Wisconsin over the Milwaukee and its connections for distances varying from 160 to 408 miles, and that commodity rates are maintained from and to the same points on scrap iron or steel, including old rails in mixed, but not straight, carloads. The compared rates on iron and steel rails are from 2 to 7 cents less than the corresponding scrap iron rates. The rate of $2.93 sought is the same as the commodity rate on second-hand rails from Minneapolis, Minn., rate-group points to Kenosha and Racine, Wis., for distances ranging from 357 to 584 miles. The Minneapolis group rate is applicable over all available routes from those points, including those over the North Western. The rate assailed and the rate sought are compared by complainant with the group rate of $3.47 on scrap iron from Sault Ste. Marie, Mich., and six other nearby points in Michigan grouped therewith to destinations in Illinois and Indiana in the Chicago rate group, applicable over various joint routes, not including lines of the North Western, for distances varying from 355 to 614 miles; and with rates varying from $2.69 to $3.71 per ton of 2,000 pounds on scrap iron from other points in Michigan, Minnesota, Missouri, Nebraska, and Wisconsin to Kenosha, points in the Chicago, Minneapolis, and Duluth, Minn., rate groups for distances ranging from 308 to 573 miles, the ton-mile earnings yielded by the latter rates ranging from 6.06 to 9.8 mills. The rate assailed yields 13.26 mills, and that sought 8.37 mills, per ton-mile. In J. Rosenbaum & Son v. Chicago, B. & Q. R. Co., 194 I.C.C. 141, the applicable rate on second-hand steel re-lay rails from Centerville, Iowa, to Nashville, Ill., which yielded 17.3 mills per ton-mile, was found not unreasonable.

It was necessary to route the shipments considered partly over the North Western because the Simmons Company, which received the shipments, is located on the North Western at Kenosha, and there is no physical connection at that point between the North Western and any other rail carrier. Defendants point out that the joint rate of $3.52 on iron and steel rails, in carloads, from Braun & Bennett's Spur to Kenosha is maintained by the Milwaukee in connection with the Chicago, North Shore & Milwaukee Railroad Company, an electric line, and not in connection with the North Western, because the North Western and Milwaukee are strong competitors in this

territory and their lines parallel each other for some distance from Lake Superior along the west-bank territory of Lake Michigan. Hence, there are no joint rates to points in this destination territory from local points of origin on the Milwaukee when destined to points on the North Western, and the same is true where the situation is reversed. To destinations south of Kenosha beyond its rails the North Western maintains joint rates on this traffic the same as those in connection with the Milwaukee, all of which are on a lower basis than the combination rate assailed.

Defendants refer to the class rates from Braun & Bennett's Spur to Kenosha, Milwaukee, and Chicago in effect when the shipments moved and those established December 3, 1931, in conformity with the western trunk-line class-rate revision. They show that prior to the establishment of the latter rates the first-class rate from Braun & Bennett's Spur to Milwaukee, Kenosha, and Chicago was $1.155 per 100 pounds, while the present first-class rates in amounts per 100 pounds are $1.19 to Kenosha, $1.16 to Milwaukee, and $1.27 to Chicago. The rate assailed, as reduced to a 100-pound basis of 20.7 cents, is compared by defendants with rates for an equal distance on iron and steel articles of 29 cents per 100 pounds prescribed in Iron and Steel Articles, 155 I.C.C. 517; and a rate on scrap iron and steel of 20.3 cents per 100 pounds, equal to 70 percent of rates for a like distance on new iron and steel, prescribed in Newport News Shipbldg. & D. D. Co. v. Baltimore & O. R. Co., 160 I.C.C. 620. The latter basis was prescribed on scrap iron and steel for application between points in central and western trunk-line territories in Continental Steel Corp. v. Akron, C. & Y. Ry. Co., 168 I.C.C. 371. Defendants also refer to a rate on light iron and steel rails of 26.1 cents per 100 pounds, made 90 percent of rates prescribed for 350 miles on new iron and steel articles in the iron and steel articles investigation, which relation was approved in Rails and Crossties from C. F. A. Territory, 167 I.C.C. 719, and Buckeye Rolling Mill Co. v. Baltimore & O. R. Co., 172 I.C.C. 573, 188 I.C.C. 302. The 32.5-percent basis prescribed on iron and steel articles in Western Trunk-Line Class Rates, 164 I.C.C. 1, would result in a rate of 37.5 cents per 100 pounds for 350 miles.

Other rates on scrap iron and steel, including scrap rails, in western trunk-line territory, are shown by defendants to be 70 and 90 percent of the rates on iron and steel articles. Rates so made for a distance of 350 miles are the equivalent of 22.75 and 29 percent, respectively, of the corresponding first-class rates. Defendants contend also that the commodity rate of $2.93 on steel rails from Milwaukee to Kenosha sought as a basis for reparation is unduly low

as compared with the basis prescribed on like articles in this same general territory of 32.5 percent of first class. They point out that the same class rates applied from St. Paul and Minneapolis to Chicago, Milwaukee, and Kenosha prior to December 3, 1931. For example, the first-class rate southbound from and to those points was 98 cents, and the corresponding northbound rate was 91.5 cents. Subsequent thereto the class rates have been the same in either direction. In amounts per 100 pounds, the present first-class rate between St. Paul and Minneapolis on the one hand and Chicago on the other is $1.26 and between the Twin Cities on the one hand and Milwaukee and Kenosha on the other, the first-class rates are $1.16 and $1.18 respectively. The rate sought is materially less than rates on new iron and steel and scrap iron for like distances in the same general territory, although a substantial portion of the transportation from St. Paul to Kenosha is in zone 1 territory as described in Western Trunk-Line Class Rates, supra. When the described shipments moved, 22.75 percent, 29 percent, and 32.5 percent of the contemporaneous northbound first-class rates to St. Paul and Minneapolis from Kenosha amounted to $4.65, $5.93, and $6.65 respectively, while like percentages of the corresponding first-class rates would result in rates of $6.05, $7.84, and $8.51.

We find that the rate assailed was not unreasonable. The complaint will be dismissed.

198 I.C.C.

No. 25951

J. R. CLUTTS ET AL. v. MISSOURI PACIFIC RAILROAD COMPANY ET AL.

Submitted October 21, 1933. Decided January 16, 1934

Rates on fresh peaches, in carloads, from points in Illinois to points in Kansas and to Joplin, Mo., found unreasonable. Reparation awarded.

R. W. Schapanski for complainants.

E. A. Smith, H. H. Larimore, C. M. Spence, and Geo. W. Holmes for defendants.

REPORT OF THE COMMISSION

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

The shortened procedure was followed herein. Defendants filed exceptions to the examiner's recommendations and our conclusions differ somewhat therefrom.

Complainants, J. R. Cutts, an individual, and American Fruit Growers, Incorporated, of Illinois, a corporation, allege by complaint filed April 24, 1933, that the rates charged on nine carloads of peaches shipped during August 1929 from points in Illinois to Joplin, Mo., and points in Kansas were unreasonable. Informal complaints alleging unreasonableness were filed by complainants during April 1931. These were either closed on November 3, 1932, or were pending when the formal complaint was filed. Rates are in cents per 100 pounds.

The shipments moved over defendants' lines, 486 to 588 miles and were charged the applicable third-class rates which were 70 percent of the first-class rates. The claimed basis is 50 percent of the contemporaneous first-class rates. The rates now applicable are approximately 45 percent of the present first-class rates. The rates charged and sought on a representative shipment from Cobden to Wichita, 588 miles, are 133 and 95 cents respectively. The latter rate is 50 percent of the contemporaneous first-class rate of 190 cents. The first-class rate established December 3, 1931, pursuant to the western trunk-line revision, is 172 cents. The present rate is 77 cents.

1 One shipment from Cobden to Wichita, one from Cobden to Clay Center, two from Cobden to Joplin, one from Alto Pass to Coffeyville, two from Alto Pass to Topeka, one from Jonesboro to Iola, and one from Bosky Dell to Topeka.