already made by respondent would bring about no increase in the volume of the gasoline movement to points in that State, and the same can almost certainly be said of a reduction in the rates to Idaho and Montana. The revenue loss which would thus result to the rail carriers affected cannot even be estimated with any degree of certainty, but it would be very much greater than the loss to respondent were its worst fears with respect to traffic here immediately affected to be realized. It seems certain also that this revenue loss could not be replaced by increases in rates on other commodities. The respondent takes the position that it has the right to retain the Salt Lake City traffic of the Associated at all hazards and regardless of the revenue effect upon the Mountain-Pacific carriers as a whole; that since in its view the establishment of the reduced rate was necessary in order to retain that traffic, its action in that respect may not and should not be condemned by reason of any harmful effect upon other carriers in the same territory; that if the consequences to the rate structure as a whole, which protestants claim, should occur, they would have to be attributed to the voluntary action of the protesting carriers, since by law they could not be compelled to make any such reductions; and that because a party should not be heard to complain of an injury resulting from its own voluntary act, we should not, even if we disagree with it in respect of our powers under the law, take any action which will require the challenged rate to be increased.

It is evident that the reductions in other rates which the continued maintenance of the reduced rate would bring about would not be voluntary in the true sense of that term. They would be voluntary only in the sense that they would not be compelled by law, but they would be not voluntary in the sense that they would be compelled by competition. The fact that the other rates, such as that from the Los Angeles Basin to Utah common points, have not been reduced pending the outcome of this proceeding, despite the passing of 6 months since the respondent reduced its rate, is not evidence that the reduction in such other rates, if later made, would be voluntary; and it is, of course, apparent that, the competitive forces being as already recited, such reductions would be forced just as truly as, in the estimation of respondent, was the reduced rate here under investigation. This being so, we cannot agree that respondent has the right to reduce its rate to any level it sees fit, regardless of the effect of such a reduction upon the general rate structure.

In Ex-Ohio-River Coal to Ohio Points, 185 I.C.C. 211, proposed reduced rates on ex-river coal between points in Ohio were found not justified, chiefly because of the effects which those rates would have had on the all-rail movement of coal to Ohio destinations. There,

as here, the rates were not challenged as less than reasonable minima or as casting an undue burden on other traffic. Division 4 said, page 219:

To upset or seriously to menace a general rate structure lawfully established suffices to make proposed rates calculated to effect such a disruption unreasonable and unlawful. Trunk-Line and Ex-Lake Iron Ore Rates, 69 I.C.C. 589. That principle was followed in Grain and Grain Products, 115 I.C.C. 153, with the statement that approval of the schedules there considered would inevitably lead to a disruption of the grain-rate structure, would have marked effects upon distribution and marketing, the extent of which could not be adequately foreseen, and of necessity would impair the carriers' revenues and their ability to render satisfactory service.

To the same effect is Container Service, 173 I.C.C. 377, 430. Very recently we exercised this same power in Bituminous Coal to Youngstown, 197 I.C.C. 617, decided December 5, 1933. That a rate may be unreasonable because too low as well as because too high was recognized by the Supreme Court as long ago as Interstate Commerce Commission v. C., N. O. & T. P. Ry. Co., 167 U.S. 479, 511.

The unreasonableness under section 1 of the act which we have thus the power and the duty to find in the rate here challenged is strongly supported by the provisions of section 15a. In Ex-Lake Iron Ore from Chicago to Granite City, 123 I.C.C. 503, we said, in respect of that section as it then stood:

We are justified in condemning a proposed rate as too low if the evidence warrants the conclusion that it will, because of its lowness, tend to precipitate changes in rate structure or in traffic which will be harmful to the public interest, having in mind our responsibility for railroad earnings in general under section 15a. The primary question here, therefore, is whether the rate of $1.20 has been shown to be profitable to respondents. If that question be answered in the affirmative, there remains the secondary question whether the rate will in its general effect upon the rate structure and traffic be harmful to the public interest.

But respondent is of the view that under the recent amendment of section 15a (2) we may no longer use our minimum-rate power in order to maintain the stability of a reasonable and interrelated rate structure such as we have here and thus avoid substantial revenue losses to the carriers affected. Section 15a (2) as in effect prior to the amendment of June 16, 1933, provided:

In the exercise of its power to prescribe just and reasonable rates the Commission shall initiate, modify, establish or adjust such rates so that carriers as a whole (or as a whole in each of such rate groups or territories as the Commission may from time to time designate) will, under honest, efficient and economical management and reasonable expenditures for maintenance of way,

structures and equipment, earn an aggregate annual net railway operating income equal, as nearly as may be, to a fair return upon the aggregate value of the railway property of such carriers held for and used in the service of transportation: Provided, That the Commission shall have reasonable latitude to modify or adjust any particular rate which it may find to be unjust or unreasonable, and to prescribe different rates for different sections of the country.

As now amended that paragraph reads:

In the exercise of its power to prescribe just and reasonable rates the Commission shall give due consideration, among other factors, to the effect of iates on the movement of traffic; to the need, in the public interest, of adequate and efficient railway transportation service at the lowest cost consistent with the furnishing of such service; and to the need of revenues sufficient to enable the carriers, under honest, economical, and efficient management, to provide such service.

* *

The broad purpose of and the ultimate responsibilities imposed upon us by both the old and the new section 15a (2) are the same, namely, in prescribing rates to give "due consideration. to the need of revenues sufficient to enable the carriers, under honest, economical, and efficient management, to provide * * adequate and efficient railway transportation service." See United States v. Louisiana, 290 U.S. 70.

In Jefferson Island Salt Mining Co. v. United States, 6 Fed. (2d) 315, referring to the enlarged powers conferred upon us by amended sections 13, 15, and 15a, the Court said:

By these sections the Commission is empowered to raise the rates, not merely because noncompensatory to the carrier receiving them, but because they are unjust or unreasonable from the point of view of other carriers and localities.

In Anchor Coal Co. v. United States, 25 Fed. (2d) 462, 471, the following appears:

Of course, since the passage of the Transportation Act of 1920 the Commission has the right to prescribe minimum rates, and we agree with the Commission that a construction of the law is too narrow which limits its right to prescribe such rates to cases where the rates proposed are unreasonable per se, or are so low as to cast a burden on other traffic. It has the right to prescribe minimum rates also to prevent ruinous rate wars and to guarantee reasonable earnings, not only to the carrier affected but also to competing carriers, who may labor under a higher cost of doing business. New England Divisions case, 261 U.S. 184; Dayton-Goose Creek R. Co. v. United States, 263 U.S. 456. And where the Commission fixes a rate or prescribes a minimum in the exercise of the powers conferred upon it, the courts will not interfere with its action, however much they may disagree with its reasoning.

See also Wisconsin Railroad Comm. v. Chicago, B. & Q. R. Co., 257 U.S. 563; United States v. Illinois Central R. Co., 263 U.S. 515.

There is merit in respondent's position that ordinarily a rail carrier should not be required to defer revision of its rates which it deems necessary to enable it to meet truck competition until it can show that it has lost a substantial amount of its traffic to the trucks. As indicated in the Mountain-Pacific cases, page 638, we shall expect the rail carriers to take the initiative in that respect. But where, as here, a particular rate is so important that a substantial reduction therein, if permitted to stand, would be reasonably certain to provoke widespread reductions in other reasonable rates and revenue losses to carriers generally far greater than the revenue gains which could possibly result from the challenged rate, we feel impelled, by reason of the public interest in the integrity of the rate structure involved, to find such a rate to be unreasonable.

Moreover, we have also said several times that when a particular carrier or carriers propose reduced rates in order to meet motortruck competition, and such rates are seriously challenged before us, the record made must satisfy us that the competing transportation agencies are available and that respondents were justified in taking the steps which they did in order to retain the traffic. Iron and Steel from Illinois Territory, 188 I.C.C. 359; Apples and Pears from Oregon and Washington, 181 I.C.C. 579; Fertilizers and Fertilizer Materials in Mississippi, 191 I.C.C. 413. The instant record is not convincing in these respects. The preponderance of the evidence indicates that transportation by motor truck from Sacramento or Avon to Ogden or Salt Lake City at the rate of 58 cents offered would not be profitable to the truck operator. The fact that the Associated is today paying 66 cents to move its gasoline to Salt Lake City, although its witness stated that he had several reliable 58-cent trucking offers for one and one-half years prior to the time of the hearing, leads us to doubt the efficacy of the threat here made. This doubt is strengthened by the further facts that at the time the Associated commenced negotiations with the rail carriers for a reduction in the rate its net back, under the contract with the Utah distributor, after paying the 73-cent rate and the State tax, had fallen to 2.44 cents, and in the course of the negotiations it declined to 0.44 cent. At the time of the hearing, however, on the basis of the former 73-cent rate, it had risen to 6 cents, or higher, so far as appears, than at the time the contract was made or than it had been at any time since the negotiations for the reduced rate began. There is no indication upon this record that the refinery cost is greater now than it was at the time the contract was made or at

198 I.C.C.

any time since. There appears much less reason, therefore, for the Associated to resort to the trucks now than there was at any time during the progress of its negotiations with the rail carriers. Moreover, it appears that a reduction in the 73-cent rate from both northern and southern California, which is what would result if the rate here complained of were approved, would bring about a corresponding reduction in the tank-wagon price at Salt Lake City, and thus the Associated would very likely find itself in the same position in respect of its contract in which it was at the time its negotiations. with the carriers were in progress. And there is some indication that this might also be the result if the Associated should divert all of its Utah business to the trucks at a rate below 73 cents.

It is important to bear in mind that the rate of 73 cents here sought by protestants to be restored is still 2 cents below the maximum reasonable rate as found by us in the Mountain-Pacific cases.

We find, upon all the facts of record, that:

1. The reduced rate is lower than necessary to retain to the rails the gasoline traffic from San Francisco Bay and intermediate points to Utah common points, and that a rate of 73 cents would not be so high as to divert such traffic from the rails.

2. If permitted to remain in effect the reduced rate would be reasonably certain to lead to a disruption of the reasonable gasoline rate structure throughout Mountain-Pacific territory prescribed by us, and thus impair to a material extent the revenues of the carriers in that territory and their ability to provide the adequate and efficient transportation service contemplated by section 15a (2) of the act.

3. The rate of 60 cents to Ogden here in issue is and for the future will be unjust and unreasonable, in violation of sections 1(5) and 15a (2) of the Interstate Commerce Act, in and to the extent that it is less than 73 cents per 100 pounds. An order will issue requiring the latter rate to be maintained as a minimum for the future.

FARRELL, Commissioner, dissenting:

I am unable to concur in the conclusions set forth in this report, for the reason that I cannot find in the report statements of fact which appear to me to establish that the 60-cent rate involved is in violation of any provision of the Interstate Commerce Act, and, in the absence of such a violation, it is my understanding that we have no power which enables us to dictate concerning the transportation rates to be established and put in force by a carrier's officials. No one is contending that the 60-cent rate exceeds the maximum of