(2) To fix the proper divisions of the through rates established by the Commission, certain of which rates were published by defendants without agreement as to the divisions thereof.

Rates to points in the east were included in the rehearing, but they are not material to the questions now before us. A large number of additional carriers were made parties defendant. At the rehearing it was agreed by all parties that the rates to central freight association points and the divisions thereof might be settled by the Commission in advance of a decision as to rates to the east. The conditions appearing to make such course proper, we deal in this report only with the western situation.

Petitions of intervention were filed by the American Rolling Mill Company, the United States Radiator Corporation, the Milwaukee Metal Trade & Founders' Association, and the Quincy Freight Bureau. These petitions allege that the rates which were not reduced under the Commission's order of June 1, 1914, are unreasonable, and reparation is asked on shipments since October 1, 1914, the effective date of such order. The complainants filed an amended supplemental petition asking reparation on like shipments.

As to the reasonableness of the rates to points where no reductions were made, further evidence was submitted by complainants and this was supplemented by evidence on behalf of the interveners. The defendants made no effort to justify the relation of rates brought about by reductions to certain points and not to others similarly situated. It was said that like reductions to such other points would have been made but for the failure of the carriers to agree upon divisions. The defendants offered no evidence other than on the question of divisions. The southern carriers stated that their purpose is to reduce the rates to all omitted points, according to the spirit of the Commission's order, as soon as the question of divisions shall be settled.

Upon the facts of record, we are of opinion and find that the rates on pig iron in carloads from the southern producing districts to all points reached by defendants in central freight association territory, to which the through rates were not reduced on October 1, 1914, are and for the future will be unreasonable. Defendants will be required to establish rates from and to the points indicated the maximum of which shall be 35 cents per gross ton less than the rates in effect immediately prior to October 1, 1914. The differentials or relation of rates as between the Alabama and Tennessee furnaces, which existed prior to October 1, 1914, shall be maintained.

We are further of opinion and find that complainants and interveners who made their shipments since October 1, 1914, to points in central freight association territory to which the rates were not

reduced on that date, and who bore the transportation charges thereon, have been damaged to the extent of the difference between the charges paid and charges that would have accrued if the rates herein found reasonable had been applicable, and reparation on that basis will be awarded.

The parties claiming reparation should present statements showing as to each shipment upon which such claim is made the date and route of movement, point of origin and point of destination, weight, car number and initials, rate applied, charges collected, and the amount of reparation due under our findings, which statements should be submitted to defendants for verification. Upon receipt of statements so prepared and verified, the matter will be further considered by the Commission with the view to issuing an order for reparation.

The question of divisions of the rates as between the carriers operating south and those operating north of the Ohio River remains to be considered. It was in effect agreed by both sides that our decision of this question shall govern the divisions of the joint rates to all points reached by defendants in central freight association territory.

The southern carriers publish proportional rates from the producing points to the various Ohio River gateways, and the northern carriers publish proportional rates from the gateways to points beyond. The joint through rates are made up of the proportional rates to and from the direct gateways, though they apply through all gateways.

The rate from Birmingham to Chicago may be taken as illustrative of the general situation. Prior to October 1, 1914, the Chicago rate was $4.35. The rate established on that date is $4. The haul by the southern carriers usually extends to the northern bank of the Ohio River. On pig iron from Birmingham to Chicago via Evansville, the divisions prior to October 1, 1914, were $2.75 for the haul to the north bank of the river, a distance of 366 miles, and $1.60 for the haul thence to Chicago, a distance of 287 miles. Pending the negotiations above referred to the southern carriers offered to bear 15 cents of the reduction of 35 cents in the through rates, and they now contend that an adjustment on that basis would be just and reasonable. This would be equivalent to $2.60 of the Chicago rate for the haul to the north bank of the river, and $1.40 for the haul north of the river.

The northern carriers take the position that no part of the reduction should be borne by them. Their contention is based chiefly on the theory that pig iron from the south displaces pig iron produced at furnaces in their own territory, and therefore does not furnish 9479°-VOL 35-15

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them any additional traffic over and above what they would otherwise haul. In view thereof, and of the fact of their strategic position, with respect to traffic that originates in their own territory, they claim to be possessed of equities and of trade advantages which entitle them to larger divisions than they might otherwise reasonably demand.

The contention in part implies an assumption that there is practically no demand for pig iron in the northern markets which could not be supplied from furnaces in central freight association territory. The evidence shows, however, that for many uses, especially in the manufacture of stoves, small castings, and certain kinds of machinery, southern iron is preferred, and that there is considerable demand for it in the northern markets. It commands a ready sale as a mixture for many kinds of iron products. This is true to such an extent that some foundries are quite largely dependent upon it because of its peculiar qualities as distinguished from pig iron from the northern furnaces. It is therefore a matter of general public interest that southern iron should move freely into the northern territories.

The northern lines further contend that, based on the recent decision of the Commission in The Five Per Cent case, 31 I. C. C.. 351, they are entitled to an increase of 5 per cent in their former divisions. This would make their proportion of the Chicago rate $1.68 instead of $1.60.

For many years prior to 1907 the through rates on pig iron from the southern furnaces varied with the price of the commodity. When the price advanced the rates were advanced; when the price fell the rates were reduced. These fluctuations were chiefly reflected in the varying divisions to the lines south of the Ohio River. There were some fluctuations north of the river, but it is claimed they were due to varying rate adjustments throughout central freight association territory.

In support of the divisional basis proposed by the southern lines it was shown that the last advance in their proportion of the Chicago rate, for example, in April, 1907, was from $2.50 to $2.75, and that the last advance by the northern lines, in February, 1907, was from $1.40 to $1.60. These advances resulted in an increase of 45 cents in the through rate. As 35 cents of this increase was wiped out by our decision of June 1, 1914, the southern lines say it would be but just and reasonable that the division to the northern lines be restored to $1.40, as it formerly existed. But we are not convinced that an apportionment on such basis would be fair to the northern lines.

Nor can we accept the proposition of the northern lines that no part of the reduction in the through rates should be borne by them. In our decision of June 1, 1914, we found that the proportionals both north and south of the Ohio River, which made up the through rates, should be revised so as to make reasonable through rates. The record of the original hearing fully justified such finding, and no effort was made by any of the carriers at the rehearing to show that it was wrong. It follows that in a readjustment of the through rates to meet the requirements of our former order, some shrinkages in the proportionals both north and south of the river should be made.

In dealing with the question of divisions we have no doubt that it is our duty to take into consideration all circumstances, conditions, and equities affecting either group of the contending carriers in so far as necessary to enable us to arrive at a fair and reasonable adjustment. It can not be reasonably questioned that because of their strategic position the northern lines possess advantages with respect to this pig-iron traffic which should be recognized.

The divisions which obtained for a number of years prior to October 1, 1914, are shown of record, and we think furnish very persuasive evidence as to what the divisions of the new rates should be. The following table shows the through rates and the divisions from Birmingham to Chicago via Evansville, together with the changes in the rates and divisions from September 15, 1902, to October 1, 1914, the effective date of our original order:

It is observed that the through rates have ranged from $3.50 to $4.35. The divisions have also fluctuated in amounts. To the southern lines they have ranged from $1.90 to $2.75, and to the northern lines from $1.40 to $1.60. As already stated the frequent changes in the through rates were due to varying prices of pig iron in the markets. This in part explains the changes in the divisions.

In exhibits showing divisions of the through rates in the past via the several gateways, the southern lines deduct a bridge charge of 10 cents per gross ton. The bridges at Louisville are practically controlled by the northern lines, and those at Cincinnati and Evansville are owned by the southern lines. To effect delivery at the north

bank of the river through the Louisville gateway the southern lines are required to absorb a bridge charge of 10 cents per gross ton. They likewise bear the expense incident to crossing the river at the other gateways. We gather from the record that this expense is substantially the same at all the gateways. It would seem but just and reasonable, therefore, that in determining a basis for the apportionment of the through rates between the carriers north and south of the river account should be taken of this bridge charge. An analysis of the above table, with the bridge charge deducted, will show that the average division to the southern lines on Chicago shipments was $2.31, or 60.1 per cent of the through rates, and that the average division to the northern lines was $1.53, or 39.9 per cent of the through rates.

The southern lines' exhibits show the through rates and divisions prior to October 1, 1914, from the several producing districts to Chicago, Ill., Cleveland, Ohio, Columbus, Ohio, Indianapolis, Ind., Decatur, Ill., Hamilton, Ohio, Terre Haute, Ind., Logansport, Ind., and Sandusky, Ohio. To these destinations, except Cleveland, Hamilton, and Sandusky, the exhibits include divisions via all gateways. To the three excepted points the divisions are shown only via Evansville, Louisville, and Cincinnati. This method of arriving at percentages is hardly fair to the northern lines for the reason that in most instances shipments of pig iron move through the direct gateways, whereas the exhibits include all gateways. For instance, the through rate from La Follette, Tenn., to Columbus, Ohio, was $2.95. The distance from La Follette to Cincinnati is 239 miles, and from Cincinnati to Columbus 116 miles. After deducting the bridge charge, the divisions of the through rate were $1.80 to the southern lines and $1.05 to the northern lines. The distance from La Follette to Cairo, Ill., is 492 miles and from Cairo to Columbus 457 miles. On a movement via that gateway the divisions of the $2.95 rate would be 70 cents to the southern lines and $2.15 to the northern lines.

We think the estimates of divisional percentages should have been based upon hauls via the direct gateways. Such method would have shown the proportion to the southern lines as 64.7 per cent of the through rates to the 11 destination points above named, and the proportion to the northern lines as 35.3 per cent. The average haul to such points via the direct gateways is 319 miles by the southern lines and 167 miles by the northern lines. The average division of the through rates via the direct gateways prior to October 1, 1914, was $2.29 to the southern lines and $1.25 to the northern lines.

The northern lines submitted exhibits showing the through rates and divisions from Birmingham and Chattanooga to 43 points in central freight association territory via the direct gateways. After deducting the bridge charge these exhibits show that of the through