INVESTIGATION AND SUSPENSION DOCKET No. 458. ANTHRACITE COAL RATES TO CHICAGO, ILL., AND OTHER POINTS.

Submitted January 12, 1915. Decided July 30, 1915.

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Following Rates for Transportation of Anthracite Coal, 35 I. C. C., 220, the proposed increase of 25 cents per gross ton on anthracite coal, prepared sizes," from Pennsylvania mines to Chicago, Ill.; to points taking Chicago rates; to connecting points between eastern and western lines near Chicago, such as Joliet and Kankakee; and to the other connecting points, Peoria, East St. Louis, and St. Louis, justified.

C. A. Eastman for Eastman-Barber Company.

L. A. Rutter for Chicago Coal Merchants' Association.

J. H. Henderson for Iowa Board of Railroad Commissioners and coal dealers of Iowa.

A. D. Beals for Iowa Board of Railroad Commissioners.

H. A. Taylor for Delaware & Hudson Company; Delaware, Lackawanna & Western Railroad Company; Erie Railroad Company; and other carriers.

H. M. Griggs for New York Central lines.

REPORT OF THE COMMISSION.

MCCHORD, Chairman:

The tariffs under investigation in this proceeding were filed by respondents to become effective May 20 and May 29, 1914, but were suspended by the Commission until March 17, 1915, upon the protest of dealers in anthracite coal in the city of Chicago and in the states of Iowa and Nebraska. Subsequently respondents voluntarily suspended the operation of the schedules until July 17, 1915. The report in this matter was held up pending the report on the Rates for Transportation of Anthracite Coal, 35 I. C. C., 220, and the rates here involved have automatically gone into effect with the expiration of the suspension period.

This investigation involves the reasonableness of the proposed increase of 25 cents per gross ton in the rates for transporting anthracite coal, "prepared sizes," all rail in carloads from the anthracite mines in northeastern Pennsylvania to Chicago and Chicago rate points and to points of connection between eastern and western lines near Chicago, such as Joliet, Kankakee, Griffith, and others, and to the other points of connection between such lines, Peoria, East St. Louis, and St. Louis.

The effective rates and the proposed increased rates per net ton and per gross ton from the mines to the points indicated are as follows:

The all-rail movement of anthracite coal to Chicago is annually about 2,500,000 tons, and the movement by water in 1913 was 1,083,712 tons.

The proposed increases apply to all-rail shipments to points west of Chicago to which there are no through rates from Buffalo. Except to Mississippi River points, there are no through rates from Buffalo to points west of Chicago. The proposed increases do not affect the territory which extends from Chicago west to the Mississippi River, south to St. Louis and Cairo, and north to Quincy, except a few points to which there are now through rates, such as Peoria, East St. Louis, and St. Louis. To Quincy and to the Mississippi River crossings north, the increase of 25 cents applies. The rates to the lower Mississippi River crossings below St. Louis are not affected.

Through rates are effective on all of the lines from the mines to Chicago and to Chicago rate points and to Peoria, East St. Louis, and St. Louis. Of the through rates, $1.75 formerly constituted the division accruing to the trunk line carriers for the haul from the mines to Buffalo as opposed to the local rate of $2 on all lines for that haul. But to points intermediate to Chicago and to other points in Ohio, Indiana, and Michigan, to which no through joint rates apply, the rate applicable is made by the combination of the local $2 per gross ton rate from the mines to Buffalo and the local or reshipping rate from Buffalo west to destination, by which combination there is brought about a freight charge of 25 cents a gross ton more to those points which commonly take the same rate as Chicago than the former joint through rate to Chicago.

Anthracite coal is not sold f. o. b. at the mines, but at such a price per net ton in Chicago as preserves to the producer of coal the advantage of the 25 cents, so that the producer realizes more profit on the through shipments to Chicago than on the local shipments to Buffalo or on the through shipments to points between Buffalo and Chicago. The service at Buffalo is the same as to coal hauled to Buffalo consigned to Chicago at the proportional charge of $1.75 as to coal hauled to Buffalo consigned to points west in Ohio, Indiana, 9479°-VOL 35-1546

and Michigan. The Pennsylvania Railroad Company and its affiliated line, the Pennsylvania Company, hereinafter referred to as the Pennsylvania, publishes no through rate via its Buffalo route. The Erie Railroad Company and the Chicago & Erie Railroad Company, operating jointly, hereinafter together referred to as the Erie, maintain only one rate to Buffalo, which is $2, regardless of the destination of the shipment all rail. The Erie, since this proceeding was begun, established through rates of $3.50 from the mines to Chicago and $4 from the mines to East St. Louis and St. Louis via Buffalo and the Niagara frontier, not having heretofore published such a rate, but expects to file a tariff increasing these rates to $3.75 and $4.25, respectively, in line with the general policy of respondents as disclosed on this record. The mean distance from the mines to Buffalo on the Erie Railroad is about 288 miles. From Buffalo to Chicago the short-line distance on that railroad is about 550 miles.

The record deals primarily with Chicago conditions and the rates to Chicago, because the protestants who appeared at the hearing were coal dealers either at Chicago or at points to which the rate is a combination of the rate to Chicago and the rate from Chicago to the place of destination.

The entire increase of 25 cents is apportioned as compensation for that part of the through haul between the mines and Buffalo on shipments via Buffalo on the lines running to Buffalo, so that on such shipments carriers will receive no increase for that part of the through haul between Buffalo and the named points of destination, and the rate to Buffalo will be uniformly $2, regardless of the destination of the shipments. But as to shipments moving west, not via Buffalo, over the Erie or Pennsylvania railroads, which extend by their own rails from the mines to Chicago, the increase is necessarily apportioned over the entire mileage from the mines to Chicago.

Respondents assert that they have proposed the increased rates in view of a complaint that certain discriminations against dealers in and consumers of anthracite coal in Ohio, Indiana, and Michigan have been created by the effective rates. Protestants admit the existence of the alleged discrimination, but insist that the only proper way to remove it is by a reduction of the rates to points in Ohio, Indiana, and Michigan, as to which it is alleged that the Chicago rate is unjustly discriminatory, it being urged that the increased rates are unreasonably high.

This issue is determined by our finding in the Rates for Transpor tation of Anthracite Coal, supra, where a rate of $2 per gross ton was found to be reasonable for the haul from the mines to Buffalo. Nothing has been made to appear here that would warrant our requiring the trunk-line carriers to accept less revenue on the trans

portation here involved than they receive on like transportation to the intermediate points in Ohio, Indiana, and Michigan. Whether or not the rates under consideration are properly divided between the carriers east of Buffalo and those west thereof is a matter not raised on this record.

The rates here involved have been justified.

35 I. C. C.