Rates charged for the transportation of straw from points on the Missouri, Kansas & Texas Railway to Alton, Ill., not found unreasonable or unjustly discriminatory. Complaint dismissed.

Isaac Born and A. B. Cronk for complainant.

C. S. Burg and R. D. Williams for Missouri, Kansas & Texas Railway Company.

REPORT OF THE COMMISSION.

BY THE COMMISSION:

Complainant is a corporation engaged in the manufacture and sale of strawboard, with its place of business at Federal, Ill., within the switching limits of Alton, Ill. By complaint, filed September 25, 1914, it attacks as unreasonable, unjustly discriminatory, and unduly prejudicial the carload rates on straw from points on the Missouri, Kansas & Texas Railway between Black Walnut and North Jefferson, Mo., inclusive, to Alton. Reparation and reasonable rates for the future are asked.

The rates assailed represent increases ranging from three-fourths of a cent from West Alton and Black Walnut to 3 cents from North Jefferson, allowed to take effect in Straw Rates from Stations in Missouri to Alton, Ill., 29 I. C. C., 562. The rate from North Jefferson was increased further from 94 cents to 10 cents, on July 12, 1914, subsequent to that report. Reconsideration of our conclusions is asked, however, on the ground that defendants have decreased certain interstate rates from points involved to Peoria, Ill., since the rates assailed were increased, and that our finding in the Straw Rates case, supra, "that a large part of the straw shipments originate between West Alton and St. Charles, Mo., near-by points, from which the increase is from three-fourths to 1 cent" was erroneous.

The rates alleged to have been reduced were 8 cents from Black Walnut to Peoria, 181.8 miles; 8 cents from Marais Croche to Peoria, 183.8 miles; 8 cents from St. Charles to Peoria, 190.8 miles; effective April, 1910, nearly three years before the rates assailed took effect. These rates have not been reduced but canceled. Defendants assert that apparently there was no movement under them. To prove the error alleged in our report in the Straw Rates case cited, complainant states that during 1913, 40 per cent of the straw moved over defendants' line to Alton moved from St. Charles and that the rate from St. Charles was increased 2 cents, from 5 cents to 7 cents. The contention is without merit. Our decision was not based exclusively on the passage quoted from our report but upon all of the facts disclosed. The evidence in this record is largely cumulative and discloses nothing to affect our former conclusion. The increase since affected in the rate from North Jefferson is not attacked specifically, .and no shipments are shown to have moved under it. A tariff filed by defendants proposing to increase this and the other rates assailed is under suspension and consideration in Investigation and Suspension Docket No. 555.

Upon the facts disclosed we can not find the rates assailed either unreasonable or unjustly discriminatory, and the complaint will be dismissed.

35 I. C. C.

5

No. 4198.

IN THE MATTER OF EXPRESS RATES, PRACTICES, ACCOUNTS, AND REVENUES.

Submitted June 9, 1915. Decided July 14, 1915.

Upon petition for a modification of our order in this case, Held, That the present revenues of the express companies are inadequate. Order modified to provide for additional revenues.

C. W. Stockton for Wells Fargo & Company.

T. B. Harrison for Adams Express Company and American Express Company.

G. L. Shearer for Southern Express Company.

W. H. Chandler for Boston Chamber of Commerce.

N. B. Kelly for Philadelphia Chamber of Commerce.

Herbert Jackson for National Association of Mail Order Liquor Dealers.

J. C. Lincoln for Merchants Association of New York.

J. H. Tench for Florida Railroad Commission.

A. Leftwich Sinclair for Society of American Florists and Horticulturists.

REPORT OF THE COMMISSION ON REHEARING. CLARK, Commissioner:

In our original reports in this case, 24 I. C. C., 380, and 28 I. C. C., 131, which followed a very exhaustive investigation, we prescribed a uniform schedule of rates, classification, rules, and regulations, effective February 1, 1914, for all of the principal express companies doing business on the railroads of the United States. While in some instances the rates prescribed were increases over the old rates, our order, as a whole, effected very substantial reductions in rates.

On March 16, 1915, the Adams Express Company, the American Express Company, the Southern Express Company, and Wells Fargo & Company, hereinafter referred to as petitioners, filed a petition for rehearing and modification of our order, in which it is asserted that they complied in good faith with our order and endeavored to make the new plan a success by developing new and additional business and effecting all possible economies in order to offset the reduction in revenue resulting from the rates prescribed; that by

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reason of such efforts and the reduction in rates their express business has substantially increased in volume, but the revenues therefrom have not been sufficient to enable them to continue to furnish a satisfactory and adequate service, and that petitioners as a whole are operating at a net loss. In order that they may secure additional revenues petitioners request that we modify our order so as to permit them to transpose two of the three factors composing the express rate basis; that is, the collection and delivery service allowance of 20 cents per shipment and the rail terminal allowance of 25 cents per 100 pounds. They estimate that such a transposition would afford them approximately 3.86 per cent increase in gross revenue. We shall revert a little later to the effect of this proposed change.

The rehearing has been had, and the questions presented are: Are petitioners entitled to additional revenue? If so, should the proposed plan be approved?

Petitioners transact approximately 95 per cent of the express business and operate over approximately 92 per cent of the railroad mileage of the country. They say that the system of stating rates and the rules and regulations prescribed by us are satisfactory, but assert that, notwithstanding the economies effected, a year's operation under the new rates has demonstrated that they do not provide sufficient revenues.

As a result of the efforts of petitioners and of state commissionsto make the system uniform, aided in some instances by modifications of our order, the rates, rules, and regulations prescribed by us have been adopted for intrastate express business in 40 states, and more than 90 per cent of the express business of the country is now being handled thereunder.

Petitioners introduced numerous exhibits showing for the last year under the old rates and the first year under the new rates the operations and financial condition of the different companies in detail and as a whole. These exhibits are confined to domestic transportation.

On June 30, 1914, the United States Express Company, operating approximately 31,000 miles of express routes, retired from the express business. This mileage is now operated by petitioners, and for this reason the exhibits introduced, and those used herein, unless otherwise noted, include the operations of the United States Express Company for the year ended January 31, 1914, and the five months' period from that date to June 30, 1914.

The years ended January 31, 1914, and January 31, 1915, respectively, are referred to herein as the years 1914 and 1915.

The following table shows petitioners' revenues, expenses, and income, as a whole, for the years 1914 and 1915:

It will be noted that petitioners' revenues from transportation after payment of express privileges decreased from $71,264,973.67 in 1914 to $64,703,118.58 in 1915, a decrease of 9.21 per cent. Operating expenses during the same period decreased from $70,011,535.53 to $65,835,930.42, a decrease of 5.96 per cent. The net operating revenue decreased from $1,253,438.14 in 1914 to a deficit of $1,132,811.84 in 1915. Operating income decreased from $68,969.04 in 1914 to a deficit of $2,380,894.29 in 1915, a decrease of $2,449,863.33.

The item express privileges, which will be considered more in detail later, is the amount paid by the express companies to the railroads for providing transportation and furnishing certain terminal facilities. In other words, it is the proportion of the gross revenue that is paid to the railroad companies, as per contracts, for the services described.

35 I. C. C.