be for the switching services which it performs, or how much more, or how much less, it would be reasonable to charge for one kind of switching service than for another. SUSPENDED TARIFFS OF LINE-HAUL CARRIERS In the tariffs of the line-haul carriers under suspension in this proceeding, it was proposed to restrict the amount of their absorptions of the Belt's switching charges on export, import, and coast wise traffic to $6.30 (now $6.93) per car on commodities generally, and $4.50 (now $4.95) per car on brick, thus bringing their absorption tariffs on import traffic into uniformity with their tariffs restricting absorptions on domestic traffic interchanged with the Belt, the reasonableness and lawfulness of which practice are assailed in No. 27789. If a line-haul carrier publishes a rate which includes delivery, it must either make that delivery itself or pay someone else to make it. This idea underlies the theory of terminal absorptions. In the performance of a terminal service, if a line-haul rate is published to the point of delivery, it is immaterial whether the line-haul carrier includes in its rate a factor representing the cost of performing the terminal service and performs that service itself, or employs someone else to do it, provided that the charge made for the terminal service is a reasonable one. It was shown by numerous exhibits, covering very many commodities, that export and import rates to and from New Orleans are on a low basis. Out of these low rates the line-haul carriers absorb the Belt's charges. The addition to these low rates of such portions of the proposed increased switching charges, which would amount to small fractions of a cent per 100 pounds, as the shipper would be called upon to pay or the Belt to absorb under the line-haul carriers' suspended tariffs will not result in aggregate transportation charges which are unreasonable. The proposed restrictions in the suspended tariffs have not been shown to be unreasonable. The question of undue prejudice is, however, not so clear. The Belt claims that the line-haul carriers quite generally absorb the switching charges of one another in full, and that their failure to absorb the Belt's charges in full, should the proposed increases be permitted, would be unduly prejudicial to shippers on the Belt who would have to pay the unabsorbed portion of the switching charge if the proposed restrictions became effective, and unduly preferential of shippers located on the tracks of the line-haul carriers at New Orleans. The carriers answer that where two of their lines serve the same destination point they must absorb each others' switching charges in their entirety, or lose the traffic to the carrier on whose line the shipment originates. This explanation may satisfy some cases, but not all. The Louisville & Nashville, for instance, under its present tariffs absorbs in full the switching charges of the Texas Pacific-Missouri Pacific system, on traffic to or from Atlanta, Ga., although that system publishes no rates from New Orleans to that point. But at the same time the Louisville & Nashville proposes in its suspended tariff to limit the amount of its absorption of the Belt's switching charge on traffic destined to or from the same point. There is no adequate explanation of record of such an inconsistency. There may be merit in some of these proposed limitations, if and when they can be published without creating situations of undue prejudice, but for the reason just indicated they cannot receive our unrestricted approval. Our findings, however, are based upon other grounds. In view of the finding in the main case the Belt's present charges will necessarily continue in effect, and, since these are now absorbed in their entirety, no situation will arise which would call into operation the proposed absorption limitations. There is therefore no ground for determining whether the absorption limitations are unduly prejudicial. NO. 27789 The principal issues raised by the complaint in No. 27789 are involved in the suspension proceeding. An additional issue involving the lawfulness of existing charges and absorptions was raised incidentally, but the real interest of the traffic bureau, the complainant in this case, is, first, to resist any attempt on the part of the Belt to increase its switching charges and, second, in case the Belt should obtain its proposed increases, to resist any attempt to pass the increase on to the shipper, which would be the result if the suspended tariffs restricting absorptions became effective. The traffic bureau's position as to this issue is that, unless we required the trunk-line carriers to include in their line-haul rates such increases in the Belt's switching charges as we might allow, undue prejudice and discrimination would be created against the city and port of New Orleans and its commerce and against persons located on the Belt's rails, and it would give undue and unreasonable preference and advantage to other ports and to persons doing business at those points. The traffic bureau's voluminous evidence and its discussion on brief is directed toward support of these contentions. There is nothing to show that this party, or any other party, objects to the existing limitations of switching absorptions on domestic traffic if the Belt's switching charges are not to be increased, for the obvious reason that the carriers' present restrictions have the effect of providing for switching absorptions on such traffic the same in amount as the present charge of the Belt, so that, until the latter's charges are increased, the absorptions continue to be unlimited. For the same reasons as stated in connection with the finding as to the line-haul carriers' suspended absorption limitations, the issues in No. 27789 likewise become moot. FINDINGS 1. We find that the rates proposed by the Belt are unreasonable and discriminatory. An order will be entered requiring their cancelation and discontinuing the suspension proceeding. 2. We further find that the suspended tariffs of the line-haul carriers have not been shown to be unreasonable or otherwise unlawful. In view of the circumstances under which these schedules were filed and of the findings with respect to the rates proposed by the Belt upon which such schedules were based, the line-haul carriers should reexamine their proposed schedules to determine whether they should not be withdrawn. An order will be entered discontinuing this suspension proceeding. 3. We further find that the charges and practices assailed in No. 27789 have not been shown to be unreasonable or otherwise unlawful. An order will be entered dismissing the complaint. 235 I. C. C. FOURTH SECTION APPLICATION No. 17909 SCRAP IRON AND STEEL TO PORTSMOUTH, OHIO Submitted July 24, 1939. Decided January 2, 1940 Authority granted, on conditions, to establish and maintain a rate of $2 per long ton for the transportation of scrap iron and steel, in carloads, from points in Kentucky in the Cincinnati switching district to Portsmouth, Ohio, without observing the long-and-short-haul provision of section 4 of the Interstate Commerce Act. F. H. Cole, Jr., for applicants. Hyman Moskowitz for intervener. REPORT OF THE COMMISSION DIVISION 2, COMMISSIONERS AITCHISON, SPLAWN, AND CASKIE BY DIVISION 2: By this application Agent B. T. Jones on behalf of certain carriers1 applies for authority to establish and maintain a rate of $2 per ton of 2,240 pounds on scraps or pieces of iron or steel, not copper clad, having value for remelting purposes only, minimum 44,800 pounds, from Cincinnati, Ohio, and points in the Cincinnati switching district in Kentucky to Portsmouth, Ohio,2 without observing the longand-short-haul provision of section 4 of the Interstate Commerce Act. A hearing was held, at which a Cincinnati shipper intervened in support of the application. All charges herein will be stated in amounts per long ton. The present rate to Portsmouth on scrap iron and steel from Cin cinnati and points in Kentucky taking the same rate is $2.50. In order to meet the competition by barge on the Ohio River applicants desire to establish a rate of $2, without observing such rate as maximum at intermediate destinations on their lines. At the present time shipments of scrap iron and steel originating in Cincinnati and destined to Portsmouth, Pittsburgh, Pa., and other points on the Ohio River move for the most part by barge and are switched to the barge dock at a charge of 42 cents, which with the 1 The Baltimore and Ohio Railroad Company, The Chesapeake and Ohio Railway Company, The Cincinnati, New Orleans and Texas Pacific Railway Company, Louisville and Nashville Railroad Company, Norfolk and Western Railway Company, and The Pennsylvania Railroad Company. 2 Over the following lines or routes from Cincinnati: Baltimore & Ohio direct; Norfolk & Western direct; Pennsylvania, Claire, Ohio, and Norfolk & Western. charge of 50 cents, made by the owner of the loading facilities, and the barge rate of $1, Cincinnati to Portsmouth, makes a total cost of $1.92 per long ton to that destination. However, the sorting and concentration yards of the shipper at Cincinnati are practically on the river bank, and it is planned to construct facilities at a cost of approximately $2,500 which will permit the direct loading of the scrap from the pile to the barge at a cost of around 50 cents. This, it is claimed, will result in the delivery of scrap at Portsmouth at a total cost of not to exceed $1.75, made up of the barge rate of $1, the loading cost at point of origin of 50 cents, and an unloading cost of from 20 to 25 cents at destination. This latter charge, the Cincinnati shipper states, is not ordinarily involved, the unloading at Portsmouth usually being done by the consignee. The competitive situation, just described, exists only at Cincinnati, but applicants feel that it would be unfair to exclude shippers located across the river in Kentucky, which points are embraced in the Cincinnati switching district, from the adjustment enjoyed by their Cincinnati competitors. It is with respect to the interstate rates from these Kentucky points that applicants here seek relief. The rate situation from Cincinnati to Portsmouth over intrastate routes is pending before the Public Utilities Commission of the State of Ohio. The Cincinnati shipper states that, with the establishment of the rate of $2 proposed by applicants, he will use the rail lines regularly and that he expects to move a substantial tonnage, estimated at from 1,500 to 2,000 long tons monthly. The distance from Cincinnati to Portsmouth over the route of greatest circuity, which embraces the Baltimore & Ohio as the linehaul carrier, is 181 miles, or 68 percent circuitous, as compared with 108 miles over the direct routes of the Norfolk & Western, and of the Pennsylvania in connection with the Norfolk & Western. It is not proposed to maintain any higher rates from intermediate origin points. The higher-rated intermediate destination points on the Baltimore & Ohio, shown as representative, extend from Greenfield, Ohio, 74 miles from Newport, to Sciotoville, Ohio, 174 miles from Newport, at which points the rates are and will continue to be $2.50. The rates to most of these intermediate points are on the level generally in effect in central territory, namely, 70 percent of the manufactured iron and steel rates. The proposed rate of $2 would yield 11 mills per long-ton mile over the circuitous route, or 22 cents per car-mile, based on the proposed minimum of 44,800 pounds, which may be compared with the average earnings of the Baltimore & Ohio for the year 1937 of 8.9 mills per net-ton mile (10 mills per long-ton mile), or 26 cents per car-mile. The average earnings of the class I carriers in central territory for that year |