INVESTIGATION AND SUSPENSION DOCKET No. 4658 Submitted September 29, 1939. Decided January 10, 1940 Proposed reduced rate on jute yarn, in carloads, from Edge Moor, Del., to Thompsonville, Conn., and from and to intermediate points, found justified. Order of suspension vacated, and proceeding discontinued. John B. Prizer for respondents. T. C. Crouch for protestant. REPORT OF THE COMMISSION DIVISION 2, COMMISSIONERS AITCHISON, SPLAWN, AND CASKIE BY DIVISION 2: By schedules filed to become effective June 26, 1939, respondents, The Pennsylvania Railroad Company and The New York, New Haven and Hartford Railroad Company, hereinafter called the Pennsylvania and the New Haven, respectively, proposed to establish a reduced rate on jute yarn, in carloads, from Edge Moor, Del., a point on the Pennsylvania, to Thompsonville, Conn., a point on the New Haven, and from and to intermediate points. Upon protest of the Middle Atlantic States Motor Carrier Conference, Incorporated, operation of the schedules was suspended until January 26, 1940. Subsequently respondents voluntarily deferred their effective date until the termination of this proceeding. Rates will be stated in cents per 100 pounds. Jute yarn is made from jute fiber imported from India and is used primarily in the manufacture of carpets. When shipped it is wound on tubes and packed in burlapped bales. Its present market value ranges from 13 to 15 cents per pound, but the bulk of the sales are made at 13 cents. In official-classification territory jute yarn, in carloads, is rated fourth class, minimum 30,000 pounds. That rating is 50 percent of first class. The present rate on jute yarn from Edge Moor to Thompsonville, short-line distance 268 miles, is the fourth-class rate of 46 cents, minimum 30,000 pounds. That rate does not apply from and to intermediate points. The proposed rate is a commodity rate of 32 cents, minimum 38,000 pounds, and is subject to intermediate application at points of origin and destination. That rate is 34.8 percent of first class and is the equivalent of the fifth-class rate. The motor-carrier rate for the short-line highway distance of 251 miles from Edge Moor to Thompsonville also is a fourth-class rate of 46 cents, but the minimum is 20,000 pounds. The proposed rate was requested by the Ludlow Manufacturing & Sales Company, hereinafter called the shipper, with jute-yarn manufacturing plants at Ludlow, Mass., Allentown, Pa., and Edge Moor, in anticipation that it would be able to increase its production at Edge Moor and ship to Thompsonville about 2 carloads of 40,000 pounds each per week, or approximately 100 carloads per annum, in competition with other producers in eastern territory. The plant at Edge Moor, built in 1936, recently has not been operated beyond 25 percent of its capacity. The shipper desires to increase the output of its Edge Moor plant, as it finds that production at 25 percent of capacity is not profitable. Although the proposed rate is considerably higher than the rate from Ludlow, the shipper considers it to be reasonable. While the request for the proposed rate was under consideration by respondents, the Vollmer Trucking Company, of Amsterdam, N. Y., by letter of July 3, 1939, addressed to the shipper, offered to establish a rate of 32 cents on jute yarn from Wilmington, Del., to Thompsonville, which would apply from Edge Moor as an intermediate point, so that return loads for its trucks operating from Amsterdam to Philadelphia, Pa., and Wilmington might be obtained. Notwithstanding that the shipper's warehouse where it stores its yarn is located 500 feet from the Pennsylvania's siding which serves the plant, and the transfer of the yarn from the warehouse to the cars costs the shipper about 1.5 cents per 100 pounds, it prefers to ship by railroad for distances of 150 miles or more because jute yarn is susceptible to chafing and damage when moving long distances in trucks. However, in the event that the proposed rate is found not justified, the shipper either will purchase trucks and perform its own transportation, will request the Vollmer Trucking Company to proceed with the establishment of the 32-cent rate, or will continue to ship by truck as at present from Ludlow. As soon as the proposed rate was published the shipper commenced making shipments to Thompsonville from Edge Moor, but when the rate was suspended shipments ceased. The plant of this shipper nearest to Thompsonville is located at Ludlow, 141 miles north of Thompsonville. It now ships its jute yarn by truck from Ludlow to Thompsonville at a rate of 10 cents. The rail rate from Ludlow to Thompsonville is 12 cents. Competition for the Thompsonville business comes from mills at Kearny and Paterson, N. J., from which points the rail rate is 22 cents. That rate is 28.6 percent of first class. Jute fiber for the Ludlow mill is imported through Boston, Mass., from which point the rate to Ludlow is 14 cents. Imported jute fiber for the Edge Moor mill comes through Wilmington, from which point the rate to Edge Moor is 3.5 cents. Therefore, in connection with the proposed rate, the total transportation cost by rail for the Edge Moor shipments would be 35.5 cents as compared with 24 cents for the Ludlow shipments. The rate of 45 cents from Allentown is said to be too high to make it profitable to ship from that point to Thompsonville. Philadelphia, Pa., Trenton, Newark, and Jersey City, N. J., and Bridgeport, Waterbury, New Britain, Hartford, New Haven, and Middletown, Conn., are intermediate points on the route of the Pennsylvania and New Haven over which the proposed rate would apply. There is a shipper of jute yarn at Philadelphia, and the proposed rate would, under the intermediate rule, apply on carloads from that point to Thompsonville. There are no shippers at Trenton, Newark, Jersey City, or New York. There are no receivers of jute yarn in carloads at any of the above points, except Thompsonville, but there are less-than-carload receivers at Bridgeport and Waterbury. Respondents and other carriers maintain a number of motorcompetitive commodity rates on jute yarn from and to competitive points of production and consumption. For example, a rate of 22 cents, minimum 38,000 pounds, averaging about 27 percent of first class, applies from Paterson, Kearny, Perth Amboy, Hoboken, Weehawken, and Edgewater, N. J., to Thompsonville, for distances ranging from 153 to 177 miles. That rate yields earnings of $83.60 per car, from 47.2 to 54.6 cents per car-mile, and from 24.9 to 28.8 mills per ton-mile. For the short-line distance from Edge Moor to Thompsonville based on 30,000 pounds, the present rate yields earnings of $138 per car, 51.5 cents per car-mile, and 34.3 mills per ton-mile. The proposed rate, minimum 38,000 pounds, would yield $121.60 per car, 45.4 cents per car-mile, and 23.9 mills per ton-mile. To support their position that the proposed rate would be reasonably compensatory, respondents compare the above earnings with the per-car and car-mile revenues yielded by the fifth-class rates of 29 cents for 260 miles, and 30 cents for 300 miles, minimum 36,000 pounds, prescribed by the Commission on certain commodities, as follows: $104.40 per car and 40.15 cents per car-mile under the 29-cent rate, and $108 per car and 36 cents per car-mile under the 30-cent rate. The average freight revenue for all class I railways of the eastern district for 1937 was 26.3 cents per car-mile and 9.28 mills per ton-mile. Protestant contends that the proposed rate will place an undue burden upon other interstate traffic, but it offered no evidence in support thereof. It also contends that the proposed rate of 32 cents will unduly prefer Edge Moor and prejudice Allentown, which would continue to pay a rate of 45 cents. A mere showing of a difference in rates is not sufficient to warrant a finding of undue prejudice and preference. Moreover, there is no evidence that shippers at these points compete with each other for business at Thompsonville. The proposed rate is sufficiently high to be reasonably compensatory and will not be burdensome on other interstate traffic. It does not appear that it will violate any provision of the Interstate Commerce Act. We find that the proposed schedules have been justified. An order will be entered vacating our order of suspension and discontinuing this proceeding. 235 L. C. C. No. 28260 POWELL RIVER COMPANY, LIMITED, v. GREAT Submitted October 3, 1939. Decided January 15, 1940 Emergency charges collected on newsprint paper, in carloads, from Vancouver, British Columbia, Canada, to Seattle, Everett, Tacoma, and Centralia, Wash., found unreasonable. Reparation awarded. Harold S. Foley and E. I. Ronan for complainant. T. J. Slattery for defendant. REPORT OF THE COMMISSION 1 PATTERSON, Commissioner: The shortened procedure was followed. No exceptions were filed to the examiner's report. Complainant corporation alleges, by complaint filed April 26, 1939, that the emergency charges collected on numerous carloads of newsprint paper shipped between November 8 and December 24, 1936, both inclusive, from Vancouver, British Columbia, Canada, to Seattle, Everett, Tacoma, and Centralia, Wash., were unreasonable, unjustly discriminatory, and unduly prejudicial. Reparation in the sum of $1,006.67 is sought. The parties agreed to waive collection of interest. A special-docket application seeking authority to pay reparation in the above amount on these shipments was filed by defendant on October 21, 1938, and was denied October 27, 1938. The shipments, aggregating 4,105,842 pounds, moved over defendant's lines. Total line-haul charges of $14,380.75 were collected, based on rates of 35, 30, 35, and 43 cents per 100 pounds from origin to Seattle, Everett, Tacoma, and Centralia, respectively. In addition to the foregoing charges, emergency charges of $1,006.67, predicated on 7 percent of the line-haul charges, were collected on these shipments. Elimination of the emergency charges is sought. Defendant admits that, because of an oversight, the emergency charges assailed were not canceled from this origin to certain destinations at the same time as they were canceled from all other origins of 1 Under the authority of section 17 (6) of the Interstate Commerce Act, the aboveentitled proceeding was referred by the Commission to Commissioner Patterson for consideration and disposition. |