The following table shows the number of shipments handled by petitioners as a whole during the years 1914 and 1915, the average charge per shipment, and the reduction in expenses per shipment:

The number of shipments handled increased from 191,644,891 in 1914 to 193,870,819 in 1915, an increase of 2,225,928, or 1.16 per cent. The average charge per shipment in 1914 was 75.59 cents, while in 1915 it was 67.66 cents, a decrease of 7.93 cents, or 10.49 per cent. Operating expenses decreased in 1915 $4,111,991.76, or 5.78 per cent. It will be noted that this amount is not the same as the item of $4,175,605.11 decrease in operating expenses shown in the first table. This is due to the fact that the items of increased taxes and uncollectible revenue are not included in the item operating expenses in the first table, but are shown separately. Operating expenses and taxes per shipment in 1914 were 37.15 cents as compared with 34.60 cents in 1915, a decrease of 2.55 cents, or 6.86 per cent.

In 1915 petitioners handled 2,225,928 more shipments than in 1914, with a decrease in revenue of $13,680,810.66 and a decrease in operating expenses of $4,111,991.76.

The following tables show separately the results from the operations of the Adams Express Company, the American Express Company, the Southern Express Company, and Wells Fargo & Company, for the years 1914 and 1915:

The transportation revenues of this company in 1915 decreased $1,502,472.98, or 4.4 per cent. The number of shipments increased 6,204,845, or 13.5 per cent. The average revenue per shipment decreased 11.8 cents, or 15.8 per cent. Operating expenses and taxes increased $768,800.11, or 4.58 per cent. Operating expenses and taxes per shipment decreased 2.9 cents, or 7.91 per cent. Express privileges decreased $1,885,469.23, or 10.43 per cent. This company's operating expenses, taxes, and express privileges for 1915 totaled $33,730,790.79, which is $1,105,968.92 in excess of its transportation revenue for the same period.

The transportation revenues of this company in 1915 increased $410,720.33, or 0.97 per cent. The number of shipments increased 6,789,961, or 12.17 per cent. The average revenue per shipment decreased 7.57 cents, or 9.98 per cent. Operating expenses and taxes increased $902,032.19, or 4.16 per cent. Operating expenses and taxes per shipment decreased 2.78 cents, or 7.15 per cent. Express privileges increased $458,480.18, or 2.15 per cent. This company's operating expenses, taxes, and express privileges for 1915 total $44,343,455.38, which is $1,614,900.98 in excess of its transportation revenue for the same period.

The transportation revenues of this company in 1915 decreased $1,542,845.86, or 9.73 per cent. The number of shipments increased 419,664, or 2.05 per cent. The average revenue per shipment decreased 8.96 cents, or 11.55 per cent. Operating expenses and taxes decreased $420,002.01, or 6.06 per cent. Operating expenses and

taxes per shipment decreased 2.69 cents, or 7.93 per cent. Express privileges decreased $751,545.94, or 9.26 per cent. Transportation revenues were $14,312,546.34, and express privileges, operating expenses, and taxes total $13,878,973.28, so that in 1915 this company had a net operating revenue of $433,573.06, as compared with $804,870.97 in 1914.

The transportation revenues of this company in 1915 increased $2,152,269.42, or 6.67 per cent. The number of shipments increased 6,259,464, or 15.25 per cent. The average revenue per shipment decreased 5.86 cents, or 7.45 per cent. Operating expenses and taxes increased $1,189,555.34, or 7.83 per cent. Operating expenses and taxes per shipment decreased 2.38 cents, or 6.43 per cent. Express privileges increased $1,528,883.42, or 9.53 per cent. Transportation revenues were $34,431,941.28, while the express privileges, operating expenses, and taxes total $33,953,543.78, so that in 1915 this company had a net operating revenue of $478,397.50, as compared with $1,044,566.84 in 1914.

From the foregoing statements it appears that each of petitioners' operating expenses for 1915 have increased, except those of the Southern Express Company. Petitioners explain that this has been caused by the increase in the number of shipments, due, in part, to the retirement of the United States Express Company.

The following table shows for petitioners, as well as for the United States Express Company, the number of shipments and expenses, not including taxes, for the first five months of 1914 under the new rates as compared with the same period in the preceding year:

February 1 to June 30.

The Adams Express Company handled 9.74 per cent more shipments with 0.86 per cent increase in expenses; the American Express Company, 1.39 per cent more shipments with 2.89 per cent decrease in expenses; the Southern Express Company, 8.88 per cent more shipments with 1.25 per cent decrease in expenses; Wells Fargo & Company experienced 3.69 per cent decrease in shipments and 9.30 per cent decrease in expenses.

The following table shows the mileage operated by each of petitioners and their payments for express privileges for the years 1914 and 1915, with the percentage of increase or decrease:

The Adams Express Company increased its mileage 11.84 per cent, while its payments for express privileges decreased 10.43 per cent. The American Express Company's mileage was increased 12.95 per cent, and its payments for express privileges 2.15 per cent. The Southern Express Company's mileage increased 2.33 per cent, while its express privilege payments decreased 9.26 per cent. Wells Fargo & Company increased its mileage 12.75 per cent, and its express privilege payments 9.53 per cent. The increase in the express privilege item of this company is partly due, as evidenced by contracts on file with us, to increase in its payments to the Southern Pacific Company, the basis of which was changed as of May 1, 1914, from 40 per cent to 50 per cent of the gross, and similar increase under its contract with the Erie Railroad from 40 per cent to 45 per cent. The decrease of $1,885,469.23 in the payments for express privileges by the Adams Express Company was apparently caused in part by a downward revision of its contracts with railroads. It reports having recovered from railroads $980,583.04 as a result of readjustment of contracts. The American Express Company has made certain increases and decreases in its express privilege contracts during this period. It is stated that petitioners are still endeavoring to reduce the payments for express privileges by further modifications of their contracts with railroad companies.

While the financial condition of certain of petitioners is more favorable than that of others, it clearly appears that as a whole they are operating at a loss. In our original order they were treated

largely as a whole or substantially as though they had been merged into one express company. We are therefore of the opinion and find that petitioners' present revenues are not adequate, and that additional revenues are necessary in order that they may maintain the required standard of service.

Coming now to the question of whether or not the plan proposed by petitioners as a means of increasing their revenues should be made effective. The present express rates are composed of three factors: First, an allowance of 20 cents per shipment for collection and delivery service which does not vary with the weight or distance. Second, a rail terminal allowance of 25 cents per 100 pounds which varies with the weight but not with the distance. Third, the rail transportation per 100 pounds, which varies with both the weight and the distance and also varies in the different As stated, petitioners ask that we modify our order so as to permit of the transposition of the first and second factors. The effect of this would be to increase the collection and delivery service allowance 5 cents per shipment and reduce the present rail terminal allowance at the rate of substantially one-twentieth of a cent per pound. The proposed reduction increases with the weight of the shipment, whereas the increase of 5 cents remains stationary. As the shipment increases in weight the increase of 5 cents is gradually reduced, and when 100 pounds is reached the increase is balanced, so that on shipments of 100 pounds or over the proposed adjustment will not effect any change.

The following table shows the proposed increases on first-class shipments. Certain weights will, however, differ slightly from the figures given due to the disposition of fractions, and not all shipments over 85 pounds will be increased:

While the above is representative of the increases on first-class traffic, second-class shipments will be increased 75 per cent of these amounts, as the second-class rates are 75 per cent of the first-class rates. Substantially no commodity rates will be affected by the proposed increases.

Under the plan proposed, the distance a shipment is hauled has no bearing upon the proposed increase in rates except in so far as they may be affected by the casting off of fractions of one-half cent or the addition of 1 cent when the fraction exceeds one-half.