Defendants contend that the rates from Norfolk, Petersburg, Richmond, and other Virginia origins, which are governed by the official classification, are unduly low. They refer to the fact that the level of class rates in official territory are now under consideration in Docket No. 15879, Eastern Class Rate Investigation. The first-class rates from the Virginia cities governed by the official classification to the destinations considered are considerably lower than those from Hallsboro which are governed by the southern classification, but that fact is not persuasive that the level of rates on excelsior from Hallsboro to the destinations considered should be higher than from the other Virginia points.

On exceptions the Southern contends that the carriers serving the Virginia points do not control the rates on excelsior from any of the alleged preferred points. It has often been found that there can be no undue prejudice under section 3 of the interstate commerce act, unless it is within the power of the carrier charged with the prejudice to remove it by its own act. Wood Iron & Steel Co. v. P. R. R. Co., 83 I. C. C. 503, 507. The record does not sustain the allegations of unjust discrimination and undue prejudice.

We find that the rates assailed are not unjustly discriminatory or unduly prejudicial, but that such rates are, and for the future. will be, unreasonable to the extent that they exceed or may exceed 27.5 per cent of the contemporaneous first-class rates from the points of origin to the destinations here concerned. An order for the future will be entered.

157 I. C. C.

INVESTIGATION AND SUSPENSION DOCKET No. 3225

RESTRICTION IN ABSORPTION OF SWITCHING CHARGES OF ALTON & SOUTHERN RAILROAD

Submitted May 17, 1929. Decided August 31, 1929

Proposed reduction in absorption of switching charges of the Alton & Southern at East St. Louis, Ill., found not justified. Suspended schedules ordered canceled and proceeding discontinued.

William C. Burger for respondent.

William W. Collin, jr., for protestant.

William E. Rosenbaum and T. M. Bierdeman for Southern Acid & Sulphur Company, Arkansas Preservative Company, and Business Men's Association of South St. Louis, Mo.; John C. Ryan for St. Louis Shippers Conference Association; Julius T. Muench and Forrest G. Ferris, jr., for city of St. Louis, Mo.

REPORT OF THE COMMISSION

DIVISION 3, COMMISSIONERS AITCHISON, WOODLOCK, And Porter BY DIVISION 3:

By schedules filed to become effective January 17, 1929, the Louisville & Nashville, hereinafter called respondent, proposes to reduce its absorption of the Alton & Southern, hereinafter called protestant, switching charge of $4.95 per car for the transfer of traffic from the trunk-line carriers serving the East St. Louis, Ill., switching district to respondent at a point within the same switching district, from $4.95 to $3.15 per car, and to also provide that where the switching charge of protestant exceeds $3.15 per car that the interchange of this traffic will not be effected through protestant's line. Upon request of protestant the operation of the schedules was suspended until August 17, 1929. The effective date of the schedules has been voluntarily postponed by respondent until October 16, 1929.

Protestant is a freight belt line extending 22 miles around the East St. Louis switching district. It connects with all of the railroads entering East St. Louis, except the Chicago, Burlington & Quincy. Protestant serves as an intermediate carrier between these lines, which have no direct connection with each other at this point, and also as originating and delivering carrier on shipments to and from industries local on its rails. The East St. Louis switching district is also served by the Terminal Railroad Association of St. Louis

It is unnecessary to name the California destinations which complainants desire to reach, as they cover practically the entire State, particularly from Brawley, in the Imperial Valley, in the south, to Newcastle, in the Sacramento Valley, in the north. Nor is it necessary to set forth the present difference in rates on hampers over those on baskets, defendants conceding for the purposes of this case that there should be no difference.

Complainants make bushel and half-bushel baskets of the roundbottom and tub, or straight-side, types. These are machine made, of gum veneer, the round-bottom type consisting of radial staves fastened in their center and, having been forced into basket form, secured by hoops, one at the top of the basket and one in the middle. As shipped, these are nested and weigh about 44 pounds to the dozen. Complainants testify that because of the existing rate situation they have been unable to ship their products into the California markets at a profit. They estimate that with a proper basis of rates they will be able to sell 500 carloads in the destination territory concerned during the first year after their establishment.

Exhibits filed by complainants of actual shipments during 1927 and 1928 to points in adjacent southwestern States, to which their baskets move freely, show car loading as follows: (1) 16 shipments in 36-foot cars, including one car 33.5 feet long, aggregated 4,347 dozen baskets, or about 272 dozen to the car. At the weight per dozen above stated, this means an average weight per car of 11,968 pounds; (2) 36 shipments in 40-foot cars, aggregated 13,306 dozen baskets, or about 370 dozen to the car; which means an average weight of 16,280 pounds per car; (3) 12 shipments in 50-foot cars, aggregated 7,701 dozen baskets, or about 642 dozen to the car, which means an average weight per car of 28,248 pounds.

Defendants show 12 shipments from Trinity, Tex., in Group F, to Guadalupe, Calif., all in 40-foot cars, the average weight of which was 17,645 pounds, or about 1,365 pounds more than was shown by complainants for similar cars.

The present commodity rate on baskets of the kind concerned from Group F to California destinations, Brawley to Newcastle, inclusive, is $2.25, minimum, 16,000 pounds, for cars of all sizes, and from Group E points, $2.40. These rates are published under the general heading of "woodenware, fiberware," which embraces about 110 other articles made of wood or fiber, such as ironing boards, lapboards, boxes, dishes, handles, measures, pails, yardsticks, and the like.

Based on defendants' showing of the average weight per 40-foot car, and the average distance of 1,760 miles, the present rate from

The suspended provisions are substantially the same as the existing provisions, except that the amounts have been changed from $4.95 to $3.15. The note under suspension is quoted below:

Note 6.-Where the transfer charges of the Alton and Southern Railroad for the interchange of through carload traffic or through less than carload traffic in trap cars between depot and yards of the Louisville and Nashville Railroad at E. St. Louis, Ill., and yards and freight depots of connecting lines at Brooklyn, Dupo, East St. Louis, Granite City, Madison, National City, Rankin, and Venice, Ill., referred to in Section A hereof, are assumed by the Louisville and Nashville Railroad Company, as authorized in Note 1, above, such absorption of transfer charges of the Alton & Southern Railroad shall not exceed $3.15 per car. Where the transfer charges of the Alton and Southern Railroad as published and lawfully on file with the Interstate Commerce Commission or the Blinois Commerce Commission exceed $3.15 per car, interchange of such traffic will not be effected through the Alton and Southern Railroad.

As protestant's charge exceeds $3.15, the foregoing provision if permitted to become effective would mean that protestant could not handle any of the intermediate switching in question if it moved at combination rates. Under respondent's interpretation of this provision traffic moving at either combination rates or joint through rates could not be switched by complainant. The suspended provisions are clearly unlawful in so far as they prohibit the movement of traffic over protestant's line. Respondent is willing to amend the tariff, providing we first approve it, so as to provide that in those instances where the shipper or consignee wants to use the intermediate service of protestant in preference to other roads, the excess of $1.80 over the switching charge absorbed will be added to the charges under the joint through or combination rates. In so far as joint through rates are concerned, the offer is subject to a condition that we waive the provisions of rule 10 (c) of Tariff Circular 20, which reads in part as follows:

A joint through rate from a point on the line of one carrier to a point on the line of another carrier includes switching, drayage, and other transfer service at intermediate interchange points, and no part of such charges may be added to the joint rate on shipments handled through and not stopped for special services at such intermediate interchange points.

In other words, in the amendment to the suspended schedules proposed respondent seeks to increase the charges on all traffic switched by protestant from other trunk lines $1.80 per car, but insists that it does not result in increased charges to shippers because the terminal will perform the same service for $1.80 per car less than protestant.

Respondent urges that the economical operation of its line requires that it should be permitted to obtain the intermediate switching service considered at the lowest possible cost and points out that we

have repeatedly held that a carrier can not be compelled to absorb the switching charges of a connecting line in the absence of unjust discrimination or undue prejudice. Hylton Flour Mills v. Los Angeles & S. L. R. Co., 152 I. C. C. 81, 82, and cases there cited. The proposed change, as amended, would not be unjustly discriminatory or unduly prejudicial, as respondent would absorb the same amount of each switching line's charge. However, the instant case is distinguishable from the cases in which the general rule has been applied in that the switching charges considered in the latter cases were maintained by a carrier other than the one absorbing or refusing to absorb such charges. Here respondent is one of the proprietary lines that approved the reduction in the switching charge of the terminal, and it now seeks to use that reduction as a basis for refusing to absorb more than $3.15 of the charge of a carrier that competes with the terminal without offering any evidence regarding the reasonableness of the terminal's switching charge. The fact that the terminal is operated on a cost-of-service basis indicates that its switching charge is not a maximum reasonable charge.

Respondent also contends that disapproval of the proposed changes would be in violation of section 15 (4) of the act, as it would permit traffic to move over protestant's line instead of the terminal, in which respondent has a proprietary interest. The terminal is not operated in conjunction and under a common management or control with respondent, within the meaning of the provisions of section 15.

It is the view of respondent that the burden of establishing the reasonableness of its switching charge of $4.95 is upon protestant. But we have frequently found that so far as the shipping public is concerned, the effect of a switching absorption is to establish a joint rate. Southern Roads Co. v. G., H. & S. A. Ry. Co., 140 I. C. C. 413. Consequently, the burden of justifying the increase resulting from the considered changes rests upon respondent. That burden has not been sustained.

We find that the suspended schedules and the proposed amendments thereto have not been justified. An order will be entered requiring the cancellation of the suspended schedules and discontinuing this proceeding.

COMMISSIONER WOODLOCK dissents.

157 I. C. C.