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now 118 and 92 miles. Prior to November 28, 1930, a combination rate of 23.5 cents composed of 17 cents to Norton and 6.5 cents beyond applied. On that date a commodity rate of 15 cents, minimum 34,000 pounds, was established. By special-docket order reparation was awarded on all shipments which moved before November 18, 1930, to the basis of 15 cents and defendants were required to maintain that rate for one year from November 28, 1930. The rates sought are 10 cents on and after December 1, 1930, and 11.5 cents prior thereto.

In American Cigar Box Lbr. Co. v. Norfolk & W. Ry. Co., 182 I.C.C. 619, rates were prescribed on poplar logs, in carloads, from certain points in Virginia, Kentucky, and North Carolina to Johnson City, Tenn., and reparation was awarded. Under the joint-line scale therein the rates for 156 and 92 miles are 11.5 and 10 cents respectively, minimum 40,000 pounds. These rates are the same as those resulting from the application of the scales prescribed in Farris Hardwood Lbr. Co. v. Louisville & N. R. Co., 178 I.C.C. 671, 194 I.C.C. 369, on hardwood and softwood logs from various points in southern territory to various points in Tennessee. The present rate of 15 cents for the short-line distance of 92 miles, yields 96.4 cents per car-mile, based on the average loading of 59,142 pounds, and 32.6 mills per ton-mile. The rate of 10 cents applied in the same manner would yield 64.2 cents per car-mile, and 21.7 mills per tonmile. Complainant compares these rates with a number of rates on logs between points in this same general territory, ranging from 9.5 to 11 cents for 76 to 123 miles, which yield 51.7 to 78 cents per car-mile and 17.8 to 26.3 mills per ton-mile. Defendants refer to rates on clay, ground iron ore, amiesite, asphaltic limestone, and cement. Complainant's comparisons are, as indicated, based on rates prescribed on logs in this same territory.

Defendants rely upon Arizona Grocery Co. v. Atchison, T. & S. F. Ry. Co., 284 U.S. 370. Our orders in special-docket cases must be regarded as formal orders as fully in all respects as our orders in formal cases. Such orders are based on provisions of law and of necessity must meet all legal requirements the same as orders in formal proceedings. Swift & Co. v. C. & A. R. Co., 16 I.C.C. 426, 428-429. The record does not indicate that any shipments moved from and to the considered points since August 1, 1931. We are now estopped from finding the 15-cent rate unreasonable and requiring defendants to retroactively reduce it and award reparation. We find that the rates assailed were not unreasonable, but that they are, and for the future will be, unreasonable to the extent that they exceed or may exceed 10 cents, minimum 40,000 pounds.

An order for the future will be entered.

FARRELL, Commissioner, concurring in part:

I concur in the conclusions of the majority to the extent that relief is accorded to the complainant, but cannot concur in the denial of reparation, because I think the rates complained of exceeded the maximum of reasonableness in the past to the extent that they were greater than those prescribed by the Commission in the American Cigar Box Lbr. Co. case referred to in the majority report.

According to my understanding, the majority base their denial of reparation upon an order in a special-docket case, the pertinent portion of which is:

It is further ordered, That the above-named defendants shall maintain for a period of not less than one year from November 28, 1930, a rate for the transportation of logs, in carloads, from Grays Knob, Ky., to Kingsport, Tenn., that shall not exceed 15 cents per 100 pounds.

This order and the decision of the Supreme Court in the Arizona Grocery Co. case, 284 U.S. 370, are made the basis of the denial of reparation, but, since the order has as its foundation only the admission of the defendant carriers that the rate was unreasonable in the past to the extent that it exceeded 15 cents per 100 pounds, and for the reason that the order simply required the carriers to maintain for one year a rate not exceeding 15 cents, I am unable to understand how such an admission in a special-docket case properly can be construed, in a formal proceeding, as depriving the complainant of the right it would otherwise have to prove that the rate was unreasonable in the past to a greater extent. In my opinion, the decision of the Supreme Court in the Arizona Grocery Co. case has no application in the premises.

198 I.C.C.

No. 24706

PILLSBURY-ASTORIA FLOUR MILLS COMPANY v. GREAT NORTHERN RAILWAY COMPANY ET AL.

Submitted October 18, 1932. Decided February 2, 1934

Rates and charges on grain from points in Idaho, Montana, Oregon, and Washington, milled in transit at Astoria, Oreg., and on the products thereof forwarded to destination points in California, Oregon, and Washington, found not unreasonable or otherwise unlawful. Complaint dismissed.

W. H. Perry for complainant.

J. P. Plunkett, M. L. Countryman, Jr., Charles A. Hart, and Fletcher Rockwood for defendants.

W. H. Nelson and R. D. Lytle for interveners.

REPORT OF THE COMMISSION

DIVISION 5, COMMISSIONERS PORTER, FARRELL, AND TATE

TATE, Commissioner:

Exceptions were filed by defendants Northern Pacific Railway Company and Spokane, Portland & Seattle Railway Company to the report proposed by the examiner. Our conclusions differ in part from those recommended by him.

Complainant, a corporation, is engaged in the milling of grain at Astoria, Oreg. By complaint filed on September 10, 1931, it is alleged that the rates and charges applicable on grain originating at points in Idaho, Montana, Oregon, and Washington, milled at Astoria, and on the products thereof forwarded to destination points in California, Oregon, and Washington are unreasonable, unjustly discriminatory, and unduly prejudicial to complainant and unduly preferential of certain competing mills in Idaho, Oregon, and Washington. The allegation of unjust discrimination was withdrawn at the hearing. Reasonable and nonprejudicial rates, rules, and regulations for the future are sought. The Port of Astoria and the North Pacific Coast Millers' Association intervened in support of the complaint. Rates and charges will be stated in cents per 100 pounds.

Astoria is on the south side of the Columbia River, about 10 miles from the Pacific Ocean on the Portland-Seaside line of the Spokane, Portland & Seattle Railway Company, hereinafter referred to as the S., P. & S. The S., P. & S., the only rail line serv

ing Astoria, is owned jointly by the Great Northern Railway Company and the Northern Pacific Railway Company and we have held that it should be considered a part of their systems for rate-making purposes, rather than as an independent line. Portland Chamber of Commerce v. O. R. & N. Co., 19 I.C.C. 265. These three carriers are the only defendants herein. The port facilities of Astoria, including piers, warehouse, mill, elevator, and other property, are owned by intervener Port of Astoria, a municipal corporation. Complainant leases the mill from intervener.

The origin territory, as defined at the hearing, is that territory east of Spokane, Wash., on the lines of the Great Northern and the Northern Pacific principally in Montana. Shelby, Mont., on the Great Northern and Logan, Mont., on the Northern Pacific are representative. Grain consigned from these points to Astoria moves beyond Spokane or Pasco, Wash., over the S., P. & S. through Vancouver, Wash., and Portland, Oreg. Outbound shipments of grain products from Astoria having destination south of Portland must be back hauled to Willbridge, a point within the city limits of Portland, a distance of 95.2 miles, and those having destination north of Portland must be back hauled from Astoria to Vancouver, a distance of 100.7 miles.

The original investment in the Port of Astoria was largely for export purposes, but exports have steadily declined in recent years. Shortly after leasing its mill, complainant requested defendants to establish rates via Astoria which would enable it to reach domestic territory on a basis comparable with that enjoyed by other mills in the Pacific Northwest. Effective January 25, 1930, the S., P. & S. established a transit arrangement under which Great Northern grain could be milled at Astoria and the products thereof be forwarded to destinations as far north as Everett, Wash., on basis of the joint rates from the origin points of the grain to the destination points of the milled product plus a transit charge of 5 cents. This basis was uniformly 2.5 cents higher than the rates via other milling points such as Portland and Tacoma, Seattle, and Everett, Wash., which points enjoyed a transit charge of 2.5 cents. On shipments moving to points north of Everett, such as Bellingham, Wash., the rates via Astoria, as well as Portland, were based on the combinations on Seattle. No similar arrangement was established on grain originating on the Northern Pacific. The rates applicable on Northern Pacific grain were and still are the combinations of the local grain rates to Astoria and the local rates on the products beyond.

The rates on the considered traffic were readjusted on August 1, 1931, when the carriers revised the rates on grain in the western district in compliance with our orders in Grain and Grain Products,

164 I.C.C. 619, 173 I.C.C. 511. Under this readjustment the Great Northern, with the S., P. & S., permitted milling in transit of grain at Astoria for forwarding to Pacific coast destinations at the joint rates plus a back-haul charge of 7 cents. The transit charge at other milling points was canceled. This resulted in increasing the spread between the rates via Astoria and the other coast mills. During July, August, September, and October 1931, complainant's mill operated at 38.8, 18.5, 35.5, and 79.3 percent of capacity, respectively. Competing Oregon and Washington mills during the same months operated at much higher percentages of capacity. After the hearing herein we reopened Grain and Grain Products, supra, and canceled the orders entered therein, permitting the carriers to reestablish the rates in effect on July 31, 1931. The republished rates became effective on February 20, 1932. Insofar as the Great Northern points are concerned the complaint was directed to the increases made on August 1, 1931, and not to the rates in effect prior thereto. As the rates complained of were canceled after the hearing and the rates in effect prior thereto were reestablished we shall confine our consideration to the refusal of the Northern Pacific, with the S., P. & S., to permit milling in transit at Astoria on basis of the joint rates to Pacific coast destinations plus a transit or back-haul charge.

The milling points served by the Northern Pacific which are alleged to be preferred are the coast points of Everett, Seattle, Tacoma, and Portland, and the interior points of Hartline, Wilbur, Davenport, Reardon, Dayton, Huntsville, Waitsburg, and Walla Walla, Wash., Athena, Milton, and Pendleton, Oreg., and Moscow and Lewiston, Idaho. Under the present basis of rates milling of grain is permitted at these points for forwarding to Pacific coast destinations at the joint rates plus a transit charge of 2.5 cents. The rate, including the transit charge, from Logan to representative destinations north of Portland in most instances is 41 cents although in certain instances a rate of 42 cents is applicable. A rate of 71.5 cents, including the transit charge, applies via the alleged preferred points to San Francisco, Calif. The combination rates in effect via Astoria to representative points north of Portland range from 61.5 cents to 72 cents and those to Portland and San Francisco are 49.5 cents and 78.5 cents respectively.

The policy of the Northern Pacific is to decline to permit milling in transit at points on its line which require back hauls unless that is necessary to meet carrier competition. Northern Pacific grain from the considered origin territory can be milled at Everett and Seattle and shipped to destinations north thereof without back haul. Where the product moves south of those points, however, back hauls to Auburn, Wash., approximately 57 and 21 miles respectively, are

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