and weak-line carriers are also advanced as additional grounds for relief in some instances. Both applicants and interested shippers urge the necessity for broad relief in connection with the various adjustments under consideration. They particularly emphasize that this relief should be free from the equidistant rule which they contend is necessary to preserve the existing groups and the competitive nature of the adjustments involved. They assert that it will be impossible to continue existing groups and relationships of vital importance to the lumber industry if the relief is made subject to the equidistant provision and other restrictions contained in the orders above described. Applicants state that, if they are forced to abandon the present group adjustments, their only alternative would be to establish mileage rates related to the class-rate adjustments. Applicants and the producers and distributors of lumber are stongly opposed to the adoption of mileage rates. On the other hand, they urge that the grouping of rates, particularly as to origin points, is essentially in the public interest, because it places greater competitive purchasing power in the hands of the consumers of lumber.

The Southern Pine Association, representing the producers of pine lumber, offered testimony in support of the applications. It regards the present system of group rates necessary to permit the mills scattered over wide areas to compete freely in common markets and urges that the granting of the relief is essential to the maintenance of this system of rates and the routes over which lumber moves. It stresses the economic difficulties of the producers of pine lumber and states that if relief should not be granted it would result in the establishment of rates based upon a mileage scale, which would be disastrous to their industry. It asserts that the most important marketing areas of this product are in the destination territory here considered and that it meets keen competition of fir lumber from the Pacific coast, the principal competitor of pine lumber, in the consuming territory north of the Ohio River, particularly at Chicago, Ill. It takes the position that since the Commission has authorized relief, free from the equidistant provision, on lumber from the Pacific coast groups to that territory, and because of the competition referred to the character of relief in the rates on pine lumber should be similar to that which was granted on fir lumber.

The manufacturers of cypress lumber and the wood-preserving interests introduced evidence to show that they are largely dependent on the wide use of transit privileges under the present rates. They urge that such relief should be authorized as will enable applicants to continue the existing rate structure and to keep open their present

routes in order that they may have the necessary latitude as to selection of sources of origin of material and routings.

Some wood-preserving plants which treat lumber produced in the South and Southwest are located at tidewater and river ports. The majority of such plants are located at inland points in those producing areas and in Ohio, Pennsylvania, and Indiana. The continued operation of an inland plant is said to depend solely upon the latitude of transit granted it and equal competitive opportunity. It is claimed that the location of available timber supply, which is constantly changing, and the necessity of assembling stock to be treated at transit points without knowledge of its ultimate destinations clearly emphasize the need for maintaining present routes.

RATE STRUCTURE

Since the applicants rely mainly for the general relief prayed upon the alleged necessity and desirability of continuing the several rate adjustments involved, a discussion of these adjustments is proper at this point.

The principal production of soft-wood lumber in the South and Southwest is in the coastal-plain area embracing roughly the eastern half of North Carolina and South Carolina, the State of Florida, the southern half of Georgia, Alabama, and Mississippi, all of Louisiana, the southern half of Arkansas, southeastern Oklahoma, and the eastern portion of Texas. As the chief production of lumber in this area is yellow pine, it is sometimes referred to as the yellow-pine belt. Hardwood lumber is produced in some of the Southern States. It generally represents one fifth or less of the lumber production in each State. The hardwood production in Tennessee, however, is about 80 percent of the total lumber productions of that State.

For the most part the points of origin in this proceeding are included in the yellow-pine belt. That portion of this belt east of the Mississippi River will be referred to as southern territory and the portion west of the river as southwestern territory. This proceeding includes rates from southern territory to points in official territory except points in New England, eastern trunk-line territory, and the Buffalo-Pittsburgh zone. The latter rates were considered and certain fourth-section relief granted with respect thereto in North Carolina Pine Assn. v. A. C. L. R. Co., 107 I.C.C. 190. The rates from southwestern territory apply to points in that territory, all points in official territory, and points in western trunk-line territory. Certain miscellaneous rates are also included as more fully described hereafter. The rates applying to the various territories will be considered separately.

RATES TO OFFICIAL TERRITORY

The most important adjustments are those which include the rates from the yellow-pine belt to points in official territory. These include the rates from southwestern territory to all of official territory and from southern territory to that portion of official territory west of the Buffalo-Pittsburgh zone known as central territory.

Applicants reviewed at length the development of these adjustments, the grouping of origin and destination points, and the influence of the Cairo and Thebes, Ill., gateways, upon the rates from the South and Southwest to official territory. As the history of these adjustments is set forth in detail in Rates on Lumber from Southern Points, 34 I.C.C. 652; Southeastern Lumber, 42 I.C.C. 548; and Adams-Bank Lbr. Co. v. Aberdeen & R. R. Co., 157 I.C.C. 280, hereafter called the Adams-Bank case, a brief statement of the general characteristics of the present adjustments will suffice. The rates from both southern and southwestern territory to central territory are a part of the same general adjustment and will be considered together as the central-territory adjustment.

Central-territory adjustment.-Under this adjustment the territories of origin and destination are divided into a number of groups. The origin groups are few in number but each of them covers a large area. Thus in the South practically all points in the yellowpine belt are included in three large groups as follows:

Group 1 covers the southern half of Mississippi and Alabama, Louisiana east of the Mississippi River, and western Florida.

Group 2 embraces the northern half of Alabama, a portion of northeastern Mississippi, and the west-central portion of Georgia. Rates from Florida are generally related to the group 2 rates and take arbitraries over those rates. With the exception of points in northeastern Arkansas and a narrow strip of territory in western Arkansas and eastern Oklahoma adjacent to the boundary line between those States, all producing points in the southwestern yellow-pine belt are included in a single group. Central territory is divided into a large number of small groups to which the rates are graded upward from Thebes, Ill., and Cairo, Ill., and other Ohio River crossings.

This adjustment of rates and the grouping in connection therewith have been considered and approved in the previous proceedings mentioned above.

Official territory as the term is used in this report, roughly speaking, is the territory east of the Mississippi River and north of the Ohio River and the Norfolk & Western Railroad Company from Kenova, W.Va., to Norfolk, Va.

In the Adams-Bank case, page 295, division 3 stated as follows: In Southeastern Lumber we approved the present method of constructing these lumber rates (as subsequently modified by the general revisions mentioned) after a thorough review of all the facts affecting the transportation of lumber not only from the southeastern and Mississippi Valley territories, but from the important competing territory of origin west of the Mississippi River; and not only to the eastern part of central territory, here in issue, to which lower combinations may in some instances be made through Cincinnati and other gateways than through Cairo, but to all of central territory, including the larger portion to which the lowest combinations make through Cairo.

The relief sought by the applicants is such as will enable them to continue the application of these rates over existing routes which may operate through the higher rated groups in transporting property from and to lower rated groups as illustrated by tables 5 and 6 of appendix B.

There is no good reason why the public should be deprived of the use of these routes in those instances where they are not unduly circuitous, or why the carriers forming such routes should be deprived of an opportunity to participate in traffic between the lower rated groups at rates the same as those in effect over competing lines between the same points. Without fourth-section relief the applicants cannot continue to participate in these rates except by disrupting the present grouping which was approved in the above proceedings. In similar cases relief has been granted carriers whose routes are not unduly circuitous to maintain rates between lower rated groups over routes operating through higher rated groups to avoid the disruption of long standing and approved groupings. Commodity Rates on Lumber and Other Forest Products, 165 I.C.C. 561. The applicants will be granted similar relief in connection with the rates to points in central territory subject to the conditions. hereinafter provided.

Southwestern-eastern territory adjustment.-This adjustment includes rates from points in southwestern territory in the yellowpine belt, also other producing points in the Southwest to points in eastern trunk-line and New England territories. Under the adjustment all producing points in the Southwest except points in northeastern Arkansas and southwestern Missouri are included in a single large group designated in Agent J. E. Johanson's tariff I.C.C. no. 2250 as group 30. Roughly speaking, this group embraces all of the States of Oklahoma and Texas east of a north-and-south line running west of Clinton, Okla., and Ringgold, Weatherford, and Austin, Tex., to San Antonio, Tex., and thence to the Gulf of Mexico, including Cuero, Beeville, and Port O'Connor, Tex., Louisiana west of the Mississippi River, and the State of Arkansas except

the northeastern quarter thereof. That portion of Arkansas and southeastern Missouri not included in group 30 are divided into some 20 small groups from which varying rates apply. Under this adjustment the rate on lumber to New York is the same from San Antonio, Tex., Little Rock, Ark., Oklahoma City, Okla., Lake Charles, La., and all of the territory between those points.

Destination grouping.-The grouping of the destination territory is said to be the same as formerly used in connection with the class rates from Chicago and other points in central territory to trunkline and New England territories which is described in Eastern Class-Rate Investigation, 164 I.C.C. 314. This grouping has been discontinued insofar as class rates are concerned and the territory regrouped in relation to the revised rates prescribed in that case. Under the former system, rates from Chicago to the various eastern groups graded upward, generally with some relation to the distances over the more direct routes. Thus the rates from Chicago to points in western New York were lower than to points in eastern New York and central and eastern Pennsylvania and other points in eastern trunk-line and New England territories, including the socalled Baltimore and Virginia cities groups. The result was that, over routes from Chicago running in a general easterly direction to eastern trunk-line and New England territories, the rates were in conformity with the provisions of section 4. The situation was somewhat different, however, in respect to the rates from points south and southwest of Chicago from which the distances over the more or less direct routes to points in the higher rated groups in the central and southern portions of eastern trunk-line territory were less than to the lower rated groups in western and central New York. This condition is reflected in some of the rates under consideration in this proceeding with respect to which fourthsection relief is requested. For example, from Poplar Bluff, Mo., (group 8 of the origin territory) the rate on lumber to points in central New York in the Syracuse group is 43.5 cents, whereas the rates to points in Virginia included in the so-called Virginia cities group and in central Maryland and central Pennsylvania in the Baltimore group is 45.5 cents. The rate to points in the Utica group immediately east of the Syracuse group is 46.5 cents, whereas the rate to Philadelphia and other points in eastern Pennsylvania is 47 cents. From southwestern origin group 30, which includes the greater portion of that territory as described above, the destination points are arranged in the same groups as those used in connection with the rates from Poplar Bluff. The situation under the fourth section, however, is quite different as the rate from that group to