Rates on lumber from Cairo, Ill., to central-territory points, on basis 25 percent of first class prescribed as maximum reasonable level for official territory in 214 I. C. C. 493 and 219 I. C. C. 427, found not unreasonable. That basis was designed to apply from and to points where lumber moved, and points shipping in great volume, such as Cairo, were not entitled by that fact alone to a lower level than from points shipping in lesser quantities to the same destinations. Cairo Assn. of Commerce v. Akron, C. & Y. Ry. Co., 683 (687).

Competition: See COMPETITION.

Cost of Service: See CoST OF SERVICE.

Damages: See DAMAGES.

Demurrage: See DEMURRAGE.

Density as Factor: See DENSITY (TRAFFIC).
Distance: See DISTANCE.

Disturbance of Adjustment: Condemnation in 211 I. C. C. 379 of watercompetitive reductions on grain, on ground that they would disrupt the rail grain-rate structure throughout an extensive territory, was not controlling on lawfulness of similar reductions on ex-lake grain from Buffalo, N. Y., to north Atlantic ports, when there was no suggestion that the latter reductions would disrupt any rate structure subject to regulation by Commission, and preference and prejudice was not an issue. Ex-Lake Grain to North Atlantic Ports, 415 (428). Somewhat higher percentage relations of the lower classes to first class were prescribed for rates from western trunk-line and official territories to Montana sections B and C than to section A and in western trunk-line territory, to avoid jeopardizing rates prescribed from the same territories to Spokane, Wash., in 15 I. C. C. 376 and 19 I. C. C. 162. The latter rates were part of the transcontinental structure, and their continuance for many years, without formal complaint against them, strongly indicated their reasonableness. If they were undermined, the entire structure would be endangered. Great Falls Traffic Assn. v. Chicago, B. & Q. R. Co., 459 (464).

Proposed reduction of export rates on grain from central-territory points to north Atlantic ports, to meet water competition via Great Lakes, was not justified when it threatened to disrupt the grain-rate structure and provoke a rate war disastrous to the revenues of all rail and water carriers of export grain from the Midwest. Not only might the lake lines feel compelled to meet the reduction on their enormous traffic at heavy loss, but because of rate relation of Atlantic ports to Gulf ports, through which a far greater volume moved, any reduction to the former would spread to carriers serving the latter, as evidenced by their recent applications to the regional carrier committee, as well as to competing river barges. Export Grain, C. F. A. Territory to North Atlantic Ports, 655 (672, 673). Establishment of reduced 1. c. 1. commodity rate on boots and shoes from a single point to a single destination for a single shipper would give undue preference to one shipper and break down established class-rate structure by extending reduced basis to intermediate points and later to other points unduly prejudiced by proposed rate. Boots and Shoes from Boston to New York, 688 (690). Divisions as Factor: See DIVISIONS OF RATES.

Earnings: See EARNINGS (FACTOR IN REASONABLENESS).

Establishment: That the establishment of north-bound interterritorial rates on approximately the same level, distance considered, as the rates on like articles within the North would, in the absence of fourth-section relief, result in extensive blanketing of the rates on certain articles was a matter deserving careful consideration by the carriers in the revision of rates found unreasonable or unduly

prejudicial, but it was not a justification for maintenance of unreasonable or unduly prejudicial interterritorial rates. State of Alabama v. New York Central R. Co., 255 (330).

Healthy competition between different angencies of transportation is undoubtedly in the public interest. Ordinarily either may initiate rates that will, in the opinion of its management, enable it to obtain or retain desired traffic provided that such rates are compensatory and do not cast a burden upon other traffic. Naval Stores from Mississippi to Gulf Ports, 723 (733–734).

Grade and State of Commodity: Rate on logs from Alabama, Mississippi, and Tennessee points to St. Louis, Mo., 80 percent of lumber distance scale, found reasonable. St. Louis Basket & Box Co. v. Illinois Central R. Co., 9.

Group Rates: See GROUPS AND GROUP RATES.

Loading: See LOADING.

Long and Short Haul: See LONG AND SHORT HAUL (PRESUMPTIONS).

Long Continuance: See DIVISIONS OF RATES (RETROACTIVE ADJUSTMENT). Maximum Rates: See Maximum RATES (IN GENERal).

Minimum Rates: See MINIMUM RATES and Unreasonably Low Rates under this heading.

Minimum Weights: See MINIMUM WEIGHTS.

Opposite-Direction Rates: See DIRECTION.

Passenger Fares: See PASSENGERS (REDUCED-RATE TRANSPORTATION).
Profit: See EARINGS (FACTOR IN REASONABLENESS).

Prohibitive Rates: The policy of Congress, as declared in sec. 500 of Transportation Act, 1920, to promote, encourage, and develop water transportation and foster both rail and water transportation in full vigor, does not mean that rail carriers shall be required to maintain prohibitive rates so as not to cut into profits of water carriers: Ex-Lake Grain to North Atlantic Ports, 415 (427–428); Molasses from New Orleans, La., to Peoria and Pekin, Ill., 485 (501).

Proportional Rates: See PROPORTIONAL RATES.

Rate Comparisons, Test of Reasonableness, Generally: See RATE COM

PARISONS.

Reductions: See REDUCTIONS.

Relationship Between Rates: See RELATION OF RATES.

Sporadic Movement: See SPORADIC SHIPMENTS.
Switching: See SWITCHING.

Test of Reasonableness, Generally: In considering reasonableness of rates on processed or manufactured commodities from the South to the North, the manner in which carriers' revenue needs are met or the distribution of transportation burden and the reasons therefor must be considered. Changes in rateswhich, in effect amount to changes in the distribution of the transportation burden-invariably affect the carriers' revenues. Often reductions, through increased patronage, increase revenues. Revenue needs of the carriers is one of the factors specified in sec. 15a (2). The weight to be given the particular factors depends upon the facts in evidence. This view applies equally to the distribution of transportation burden. State of Alabama v. New York Central R. Co., 255 (327).

Transit: See TRANSIT.

Unreasonably Low Rates: Proposed reduced rate on blackstrap molasses, minimum weight 1,800 tons, equivalent to 381⁄2 tank-car loads, from New Orleans and Harvey, La., to Peoria and Pekin, Ill., to meet competition of cargo-lot movement by private barge, found unreasonably low and lower than necessary to

meet the competition when it would yield only 3.26 mills per ton-mile and 15.27 cents per car-mile for short-line distances, and minimum cost of service, without any return on value of carrier property, was only 1.28 cents less than net revenue after deduction of switching absorptions. Reasonable minimum rate determined. Molasses from New Orleans, La., to Peoria and Pekin, Ill., 485 (492-493, 502). Proposed water-competitive reduction in export reshipping rates on grain from central-territory points to north Atlantic ports, to approximately 54.5 percent of normal rates, found to be unreasonably low and less than reasonable minima. Export Grain, C. F. A. Territory to North Atlantic Ports, 655 (673).

Value of Service: See VALUE OF SERVICE.

Volume of Traffic: See VOLUME OF TRAFFICE (FACTOR IN REASONABLENESS). Voluntary Reductions: See REDUCTIONS.

Weights and Weighing: See WEIGHTS AND WEIGHING.

REASONABLENESS (RULES, REGULATIONS, AND PRACTICES). See REASONABLENESS (RATES, Fares, and CHARGES) and various topics.

RECONSIGNMENT AND DIVERSION. See also DIVISIONS OF RATES (FACTORS IN DETERMINATION).

Oral request to reconsign carload of horses from Billings, Mont., en route to Potsdam, N. Y., billed destination, was insufficient to effect reconsignment under tariff requiring written request, but written instructions after arrival of shipment at Potsdam to unload, feed, water, and forward horses to Vernon, N. Y., was a reconsigning order when it was not shown that car was unloaded or accepted by shipper at Potsdam. Under reconsigning carrier's tariff, when car was diverted after arrival at billed destination, the through rate over route of movement via reconsigning point was applicable. Applicable rate beyond Chicago, Ill., was the combination on Potsdam. Sheldon v. Chicago, B. & Q. R. Co., 32 (33).

A rule providing for charges for out-of-line hauls where rates apply from origin to final destination through the reconsigning point is unreasonable. National Tank Co. v. Sand Springs Ry. Co., 105 (106).

REDUCED-RATE TRANSPORTATION. See also PASSENGERS (REDUCEDRATE TRANSPORTATION).

Section 22 (1), authorizing free or reduced-rate transportation of government property, etc., must be read in connection with other sections of the act and does not nullify their application, but merely sets aside such portions of the act as would prevent special rates in the specified instances. It does not impair Commission's power to prohibit special reduced rates when they result in unjust discrimination or undue prejudice to interstate commerce. 262 U. S. 318. Handling of Exhibits for Expositions and Fairs, 603 (604).

Carriers' right to transport Federal, State, or municipal government property free or at reduced rates is elective and not mandatory, and while they may exercise that right with or without tariff authority, Commission has no power under the law to compel them to transport such traffic free or at reduced rates. Id. (604).

Unless tariffs are filed to cover special rates on exhibits for fairs or expositions, Commission cannot effectively enforce the prohibition against unjust discrimination and undue prejudice. Such special rates may cause real injury to persons not benefited thereby, because real advantages may accrue to competitors. Rate concessions on exhibits for one fair, and not for another, place the favored enterprise in a better position to attract patronage; likewise, greater concessions to one exhibitor than to another exhibitor of the same or a competing product confer real and undue advantage. Id. (604–605).

A special rate on exhibits for expositions or fairs is a "reduced rate" under sec. · 22 (1) and the "regular" rate to be applied on that traffic for all shippers desiring to send that commodity to that fair for exhibition, whether it is published in a tariff or not; and its application to all such traffic is a reason for, not against, the filing of tariffs to cover it. Id. (605). Finding in 232 I. C. C. 658, that there was no basis for requiring carriers to accord rates lower than commercial rates to exhibits for expositions and fairs, affirmed. Id. (605).

REDUCTIONS.

In General: In considering reasonableness of rates on processed or manufactured commodities from the South to the North, the manner in which carriers' revenue needs are met or the distribution of transportation burden and the reasons therefor must be considered. Changes in rates-which, in effect amount to changes in the distribution of transportation burden—invariably affect the carriers' revenues. Often reductions, through increased patronage, increase revenues. Revenue needs of the carriers is one of the factors specified in sec. 15a (2). State of Alabama v. New York Central R. Co., 255 (327).

Agreement to Make: Agreements between carriers or their agents to voluntarily establish reduced rates are of no legal effect in determining lawfulness of assailed rates, and the Commission has no power to enforce performance of such agreements. Columbus Freight Bureau v. Atlanta, B. & C. R. Co., 744 (746). Competition, Reductions to Meet: See COMPETITION.

Delay in Establishment: When rate established on crushed stone from Security, Md., to Gettysburg and Guldens, Pa., to meet motortruck competition from nearby quarries, was inadvertently permitted to expire before completion of highway for which stone was used, and was subsequently reestablished on 1 day's notice, applicable rates charged in interim were unreasonable to the extent that they exceeded reduced rate prior to April 15, 1938, and that rate plus general rate increase thereafter. While reduced rate was lower than maximum reasorable rate prescribed or approved by Commission in that territory, considering the volume of traffic and other special circumstances, the applicable rate charged was unreasonable. North American Cement Corp. v. Western Maryland Ry. Co., 27.

Applicable any-quantity rates on sheets and pillowcases from Lewiston, Maine, and New York Mills, N. Y., to St. Louis, Mo., on shipments moving prior to establishment of reduced rate under findings in 211 I. C. C. 692, found not unreasonable when it was not shown that carriers delayed publication of prescribed basis for an unreasonable period. Rice-Stix Dry Goods Co. v. Canadian Pac. Ry. Co., 89.

Emergency charges collected on newsprint paper from Vancouver, British Columbia, to certain Washington points, found unreasonable when through an oversight such charges were not canceled at time emergency charges from all other newsprint-paper origins were canceled. Powell River Co. v. Great Northern Ry. Co., 751.

Justification: Proposed reduced rate and increased minimum for alternative application on paper from Holyoke, Mass., to Harlem River, N. Y., was justified when it would reduce the excess in total cost to shippers for rail movement plus pick-up and delivery over cost of direct motor service and would yield some profit. Paper from Holyoke, Mass., to Harlem River, N. Y., 99.

Proposed reduced rates on gypsum lath between points in southern territory, to meet intrastate rates and competition with wooden lath and to forestall diversion of traffic to motor carriers, found justified. While proposed rates would be lower than interterritorial rates, carriers were willing to join their connections in other territories to establish rates to the South on the same level, and there was

no opposition to establishment of such rates. Suspended rates and minima compared favorably with rates and minima prescribed or approved on asphalt and other commodities. Gypsum Lath in the South, 399.

Notwithstanding severity of unregulated water competition via Canadian ports on St. Lawrence River and via New York State Barge Canal on ex-lake export grain, and the facts that such traffic represented added traffic for rail lines and that ton-mile cost of hauling added traffic is generally less than the average for all traffic, protested competitive reductions from Buffalo and Oswego, N. Y., to north Atlantic ports were found to be below reasonable minimum when they would yield no more than 3.1 mills per ton-mile and 16.86 cents per car-mile. Minimum reasonable basis yielding not greatly in excess of out-of-pocket costs, determined. Ex-Lake Grain to North Atlantic Ports, 415.

Condemnation in 211 I. C. C. 379 of water-competitive reductions on grain, on ground that ton-mile earnings thereunder were not shown to be compensatory and that they would disrupt the rail grain-rate structure throughout an extensive territory, was not controlling on lawfulness of similar reductions on ex-lake grain from Buffalo, N. Y. to north Atlantic ports. In view of the heavy loading of the latter traffic, car-mile as well as ton-mile earnings were entitled to consideration, and there was no suggestion that the reduced rates would disrupt any rate structure subject to regulation by Commission. Id. (428).

In special cases it may be proper for rail carriers, in order to share in the movement of traffic which they might not otherwise obtain, to establish rates lower than gross cost, including overhead, but yielding something more than out-of-pocket costs. Id. (429).

While less favorable economic and transportation conditions in eastern and central Montana than in the Dakotas or zone III generally precluded reduction of class rates to Montana from western trunk-line and official territories to the zone III basis, favorable comparison with conditions in Wyoming warranted prescription of zone IV level previously prescribed to Wyoming, including routes traversing the complaint area. Such a basis would reduce the general level in that area from 120 to 115 percent of zone III, and would effect greater reductions where combinations were required to be replaced by joint rates. Great Falls Traffic Assn. v. Chicago, B. & Q. R. Co., 459 (463).

Proposed reduced rate on blackstrap molasses, minimum weight, 1,800 tons, equivalent to 381⁄2 tank-car loads, from New Orleans and Harvey, La., to Peoria and Pekin, Ill., to meet competition of cargo movements by private barge, found to be unreasonably low as measured by earnings and cost of service, lower than necessary to meet the competition, and not to bear a just and reasonable relation to existing carload rate. Reasonable minimum multiple-car or quantity rate, subject to same minimum, to apply on shipments under one bill of lading from one consignor to one consignee at one time, determined. Molasses from New Orleans, La., to Peoria and Pekin, Ill., 485.

Proposed reduction in rates on printing and wrapping paper, and pulpboard, from Canton, N. C., to Atlanta, Ga., found not justified without prejudice to establishment of rates in conformity with the findings. While rail lines were at a disadvantage in that truck lines rendered a quicker service direct to warehouses and rail shipments must be drayed or trucked from team tracks to warehouses, the proposed minimum of less than 20,000 pounds would result in wasteful transportation and an unnecessary lessening of carriers' revenues and also in an unreasonably low basis. Paper from Canton, N. C., to Atlanta, Ga., 529.

Proposed reduced rates on cranberries from certain Massachusetts points to Harlem River, N. Y., during season from October to February, inclusive, found justified to meet truck competition. Proposed rates were lower than the truck