FOURTH SECTION APPLICATION No. 17874

SAND AND GRAVEL TO MEDFORD, MASS.

Submitted July 11, 1939. Decided November 27, 1939

Authority granted, on conditions, to establish and maintain rates on sand and gravel, in carloads, from Pinewald and Williamstown Junction, N. J., to Medford, Mass., without observing the long-and-short-haul provision of section 4 of the Interstate Commerce Act.

H. B. Thomas for applicants.

George F. Pettinos, Jr., and Arthur B. Schlesinger for interveners. REPORT OF THE COMMISSION

DIVISION 2, COMMISSIONERS AITCHISON, SPLAWN, AND CASKIE BY DIVISION 2:

1

By this application the Boston and Maine Railroad and other carriers apply for authority to establish and maintain rates on sand and gravel, in carloads, from Pinewald and Williamstown Junction, N. J., to Medford, Mass., without observing the long-and-short-haul provision of section 4 of the Interstate Commerce Act. A hearing was held and representatives of the Bridgeton Sand Company and the New Jersey Pulverizing Company offered testimony in support of the application. Prior to the hearing the Sheridan Transportation Company indicated by letter that it was opposed to the relief prayed, but it was not represented at the hearing. Rates will be stated in amounts per net ton.

Applicants propose to establish and maintain on sand and gravel, other than ground or pulverized, in closed cars or in open-top cars with tarpaulin or other protective covering, minimum 100,000 pounds, from Pinewald and Williamstown Junction to Medford, a rate not less than $2.68, and to maintain higher rates from and to intermediate points. They ask that the relief granted be broad enough to permit establishment of the proposed rate over the lines of other carriers whose routes conform to the conditions that may be imposed in the order, but such relief is too indefinite to warrant approval. The

1 The Central Railroad Company of New Jersey, The Delaware and Hudson Railroad Corporation, Lehigh Valley Railroad Company, The New York Connecting Rail Road Company, The New York, New Haven and Hartford Railroad Company (Howard S. Palmer, James Lee Loomis, and Henry B. Sawyer, trustees), The Pennsylvania Railroad Company, Pennsylvania-Reading Seashore Lines, Reading Company, and West Shore Railroad (The New York Central Railroad Company, lessee).

present rates over applicants' routes are $3.52 from Pinewald and $3.63 from Williamstown Junction.

The purpose of the relief is to enable applicants to meet competition over rail-water-rail routes from and to these points without reducing the rates at intermediate points. For several years approximately 10,000 tons of sand and gravel have moved each year over the rail-water-rail route from Williamstown Junction, and it is understood by applicants that approximately the same amount will move during the year 1939. While there has been no movement in the past over the rail-water-rail route from Pinewald, five carloads were shipped by rail from that point during the latter part of 1938 for experimental purposes, and part or all of the tonnage could originate at Pinewald.

The charges for the movement of the traffic by rail-water-and-rail are 99 cents for the movement by rail from Pinewald and Williamstown Junction to Jersey City, N. J., 22 cents for handling and loading on barges, 85 cents for the movement by water from Jersey City to Boston, Mass., 10 cents wharfage at the Boston & Maine docks, 25 cents for stevedoring at Boston, and 27 cents for switching to the receivers' plants at Medford, or a total cost of $2.68. The traffic moves by water from Jersey City to Boston during the entire year on barges ranging in capacity from 1,600 to 2,000 tons, and the receivers have facilities for the storage of 3,000 or 3,500 tons. The barges are furnished by Sheridan and Company and are towed by T. F. Martin and the Eastern Transportation Company of Philadelphia, Pa. The traffic is in transit by rail-water-rail 7 or 8 days, as compared with 3 days for the all-rail movement.

Departures will occur at origins and destinations and on both direct and indirect routes. The following examples are illustrative. The distance from Pinewald to Medford over the shortest working route, which is composed of the lines of the Central Railroad of New Jersey to Communipaw, N. J., float to Harlem River, N. Y., the New York, New Haven & Hartford to Worcester, Mass., and the Boston & Maine beyond, is 320 miles. From Toms River and Barber, N. J., intermediate points on this route, to Medford, 315 and 261 miles respectively, the present commodity rates of $3.52 and $3.19 respectively will apply. The distance from Williamstown Junction to Medford over the shortest working route, composed of the PennsylvaniaReading Seashore Lines to Pavonia, N. J., the Pennsylvania to Greenville Piers, N. J., float bridges and the New York, New Haven & Hartford to Worcester, and the Boston & Maine beyond, is 344 miles. From Williamstown Junction to Baychester, N. Y., and Boston, higher-rated intermediate destinations on this route. 122 and

339 miles respectively, the present commodity rates of $2.86 and $3.63 respectively will be maintained. The proposed rate of $2.68 will also apply from Williamstown Junction to Medford over an indirect route, composed of the Pennsylvania-Reading Seashore Line to Winslow Junction, N. J., the Central Railroad of New Jersey to Communipaw, the New York, New Haven & Hartford to Worcester, and the Boston & Maine beyond, 354 miles. From Winslow Junction and Barber, the highest and lowest rated intermediate points. on this route, to Medford, 346 and 261 miles respectively, the present rates of $3.63 and $3.19, respectively, will be maintained. The proposed rate will also apply from Pinewald to Medford over an indirect route, composed of the lines of the Central Railroad of New Jersey and float to Bay Ridge, N. Y., the New York Connecting Rail Road to Port Morris, N. Y., and the New York, New Haven & Hartford and Boston & Maine beyond, 327 miles, while from Pinewald to Stamford, Conn., and Boston, 128 and 322 miles respectively, the present rates of $2.75 and $3.52 will apply.

The proposed rate of $2.68 will yield 21 cents per car-mile, based on 100,000 pounds, and 4.2 mills per ton-mile, over a route 100 percent circuitous from Pinewald to Medford for a distance of 639 miles. While circuity limitations are generally imposed to require compensatory rates, they are also imposed to prevent wasteful transportation. We are not convinced upon this record that routes exceeding the usual limitation of 50 percent are necessary for the movement of this traffic.

While transportation by rail and water from and to some of the higher-rated intermediate points, such as Boston, is available, the actual competition relied upon as justifying the lower rates from and to the more distant points is not encountered at such intermediate points. The movement of sand and gravel to Boston was 337 tons in 1937, 88 tons in 1938, and 60 tons during the first 4 months of 1939. If, however, similar competition should develop in the future at any of the intermediate points, it would be incumbent upon applicants to take appropriate steps to avoid any undue preference and prejudice that might result from the maintenance of the lower rates from and to the more distant points.

Although it is urged that the shippers are unwilling to pay higher charges for the all-rail service than the cost for transportation by rail-water-rail, the maintenance of rates over all-rail routes no higher than the cost for the service over the competitive routes would, in all probability, result in a loss of the entire tonnage by the water carriers. Applicants are entitled to compete for the traffic, but competitive rates should not be so low as to destroy existing competition

over the rail-water-and-rail routes. Considering the advantages of the all-rail service, we are of the opinion that a rate approximately 10 cents higher than the cost for the service over the competitive route should enable applicants to compete for this traffic.

We conclude that such a rate will be reasonably compensatory over routes not exceeding 50 percent in circuity; that it is not lower than necessary to meet the rail-water-rail competition described herein; and that relief, subject to the conditions hereinafter prescribed, is justified.

Applicants will be authorized to establish and maintain on sand and gravel, as described herein, from Pinewald and Williamstown Junction to Medford rates not less than $2.78, and to maintain higher rates from and to intermediate points; provided, that the rates from and to such higher-rated intermediate points shall not be increased except as may be authorized by the Commission and shall in no instance exceed the lowest combination of rates subject to the act; and provided further, that the relief authorized herein shall not apply to any line or route which is more than 50 percent longer than the short tariff route from and to the same points.

The relief authorized herein is predicated upon the existence of a rail-water-rail rate of $2.68 from Pinewald and Williamstown Junction to Medford. It should be understood that in the event that any increase should be made in the latter rate, the all-rail rate authorized herein should be correspondingly increased. All other and further relief prayed will be denied.

An appropriate order will be entered.

235 I. C. C.

FOURTH SECTION APPLICATION NO. 17108

COAL TO ALABAMA POINTS

Submitted May 9, 1938. Decided November 28, 1939

Authority granted, on conditions, to establish and maintain rates on coal, in carloads, from stations on lines of the Louisville & Nashville Railroad Company in eastern Tennessee, eastern Kentucky, and southwestern Virginia to Decatur, Florence, Sheffield, and Tuscumbia, Ala., without observing the long-andshort-haul provision of section 4 of the Interstate Commerce Act.

J. C. Kuebert for applicant.

REPORT OF THE COMMISSION

DIVISION 2, COMMISSIONERS AITCHISON, SPLAWN, AND CASKIE BY DIVISION 2:

By this application, as amended, the Louisville and Nashville Railroad Company applies for authority to establish and maintain rates on coal, in carloads, from stations on its lines in eastern Tennessee, eastern Kentucky, and southwestern Virginia to Decatur, Florence, Sheffield, and Tuscumbia, Ala., without observing the long-and-shorthaul provision of section 4 of the Interstate Commerce Act. A hearing was held, and no opposition to the relief sought was presented. Rates and differences in rates will be stated in amounts per net ton.

Applicant originally sought relief only at intermediate points of origin in connection with the rates from the Wind Rock and La Follette, Tenn., groups 1 and 2 respectively, to the destinations named, and relief to this extent was temporarily authorized by fourth-section order No. 13070. By amendments to the application relief is also requested in connection with the rates from the Jellico, Tenn.-Middlesboro,1 Ky., group 3, the Harlan, Ky., group 1 or 4,2 the McRoberts, Ky., group 5, the Hazard, Ky., group 6, and the Virginia group 9, to the destinations named, and in the rates from all the groups to all intermediate destinations on applicant's lines, Overtons, Tenn., and south. The individual points in the respective origin groups are listed in appendix A to the application. The distances hereinafter stated are, unless otherwise indicated, averages from all points in the origin groups.

1 Called Middlesborough on the Louisville & Nashville.

Group 4 to Decatur, Florence, Sheffield, and Tuscumbia; group 1 to intermediate points.