say positively whether or not these particular cars of coal had been sold by it prior to the time they reached Kansas City, but it is a fact that no orders were given to the defendant to carry the coal to any other points until after it had actually reached Kansas City. It is also true that this method of doing business is very customary. A dealer in coal, as in this case, locates at some central point of distribution, and to that point he consigns in the first instance most of his coal. Some of it is actually consumed at such point, as in the case of Kansas City, and some of it is sold at other points, and it is generally difficult for the dealer to determine definitely which particular car of coal is sold prior to its receipt at the central point of distribution. Under such circumstances and conditions, when the coal is actually shipped into such central point of distribution and delivery is there made, it must be regarded as a local shipment.

The Commission is therefore of the opinion that the rate of $3.72 charged on these 2 cars of coal is not in accordance with the published tariffs and that the lawful rates applicable on said shipments. were $1.80 per ton from Springfield, Ill., to Kansas City, Mo., and $1.70 per ton from Kansas City to Salina and Kipp, Kans., and that the complainant is entitled to reparation in the sum of $19.66, that being the difference between the amount actually charged and collected from complainant and the lawful charge for the services rendered.

This ruling is made on the facts herein involved, which differ but slightly from those presented in the Texarkana case, Gulf, Colorado & Santa Fe Railway Co. v. Texas, 204 U. S., 403. The billing of both shipments here concerned was to Kansas City, and no order to send them forward to other points was received until they had reached Kansas City. They might have been held there, the cars unloaded, and the coal sold at Kansas City. The shipment out of Kansas City must be regarded as a separate movement, on which the local rate is to apply, unless we can find evidence which warrants the holding that the destination of these shipments when they moved out of Springfield was other than Kansas City, but this we can not find. All the evidence is to the contrary, and the absence of reconsignment privileges at Kansas City as to this traffic makes it the clearer that the railroad itself could not properly have regarded the movement as through from Springfield to Salina, for to ship to Kansas City and then to allow a reconsignment on a through rate to Salina would be to extend a privilege which the tariffs did not grant. This case would never have been presented to the Commission had the joint through rate between Springfield and Salina been no higher than the sum of the two locals, and it is difficult to conceive of those circumstances which justify the disparity in these rates. In general

joint through rates are lower than the sum of the locals between two points, and obviously there can very seldom be any transportation reason why such should not be the case. Why then are these locals so adjusted that the dealer in Kansas City may ship coal to that city and distribute it to Salina at a lower transportation charge than is imposed on the Salina merchant who buys in Springfield and ships directly to himself at Salina? The reason which superficially appears is that it is the policy of the carriers to make Kansas City the coal distributing center for points farther west-a policy which does not appear to have any transportation justification.

The Commission has held that there can be but one legal rate between two points-a very simple enunciation of a fundamental principle. This rate must be either (a) the local rate if over one road, or (b) the joint rate if over a through route composed of two or more roads which have agreed as to a joint rate, or (c) a combination of separately established rates applicable on through business over a through route which does not enjoy a joint rate. (Section 6.)

A shipment billed from Springfield to Salina may therefore be taxed none other than the joint rate between these points. It is unlawful to apply the sum of the locals to such shipment, even though they make lower than the joint rate. And this principle would be applied in this case were it not that in fact it appears the shipment was billed originally from Springfield to Kansas City, from which point it was again billed to Salina (or to Kidd as the case may be)— thus moving as two local shipments instead of one through shipment.

If complaint had been made that the joint rate from Springfield to Salina was excessive, at least to the amount of the excess over the sum of the locals, it would be within our power to order such reduction; but no such allegation has been made, and so long as the present adjustment of the relation between locals and joint rates as is herein presented continues it is quite manifest that the Kansas City dealer will not complain.

It is a conservative statement that thousands of letters have been received by the Commission complaining that carriers insist upon applying a higher through joint rate than could be made by application of the locals, and that it is unjust to compel the shipper to pay the higher rate. This body of criticism the Commission has felt was incident to the present transitional stage in which the carriers were adapting themselves to a more rigid application of the principles of the act to regulate commerce than had hitherto obtained. It is not the purpose of the Commission, however, to permit carriers to evade the intent of the Commission's rulings-as to there being but one legal rate between two points by maintaining through rates which are

greater than the combined locals, excepting under exceptional circumstances, of which the present case is not an illustration.

In December, 1906, the Commission adopted and issued to all railroads the following ruling:

43. Reduction of joint rate to equal sum of locals (effective December 21, 1906). Where a joint rate is in effect by a given route, which is higher between any points than the sum of the locals between the same points, by the same or another route, and such joint rate has been in effect thirty days or longer, such higher joint rate may, until further notice from the Commission, be changed by reducing the same to the sum of such locals, but not otherwise, upon posting one day in advance a tariff of such reduced rate and mailing a copy thereof to the Commission.

*

Many informal complaints are received in connection with regularly estab lished through rates which are in excess of the sum of the locals between the same points. The Commission has no authority to change or fix a rate except after full hearing upon formal complaint. It is believed to be proper for the Commission to say that, if called upon to formally pass upon a case of this nature, it would be its policy to consider the through rate, which is higher than the sum of the locals between the same, points as prima facie unreasonable, and that the burden of proof would be upon the carrier to defend such higher through rate.

It was the expectation of the Commission in making this ruling that the railroads would of their own motion, and to save charges of discrimination, install new tariffs reducing the through rates in question. In many instances the railroads have in good faith proceeded to "line up "their rates with this end in view. But this has not been so universal as the necessity there for required. Instead of making such reductions the railroads in far too many instances have availed themselves of this Commission's ruling-that there could be but one legal rate between two points-to charge the higher joint through rate, and thus increase their revenues without openly, by traffic provisions, increasing such rates. They have, in short, used the Commission's proper and necessary ruling to the disadvantage of shippers and contrary to the intent and purpose of the rule itself.

An order will be entered in accordance with these views. 13 I. C. C. Rep.

No. 1034.

WAGNER, ZAGELMEYER & COMPANY

v.

DETROIT & MACKINAC RAILWAY COMPANY AND MICHIGAN CENTRAL RAILROAD COMPANY.

Submitted January 17, 1908. Decided March 10, 1908.

Complaint alleges that since July 13, 1906, the Detroit & Mackinac Railway Company has discriminated against complainants in furnishing cars for interstate shipments of ice from Tobico, Mich., and that rates charged by defendants on ice from Tobico to points in Ohio are unreasonable; Held, under the circumstances disclosed by the record, that complainants were not unduly prejudiced in their car supply, and that the joint rates on ice from Tobico to points in Ohio are not shown to be unreasonable per se or relatively. Complaint dismissed.

Claude E. Devitt and Gillette & Clark for complainants.

James McNamara and Frank C. Cook for Detroit & Mackinac Railway Company.

O. E. Butterfield for Michigan Central Railroad Company.

KNAPP, Chairman:

REPORT OF THE COMMISSION.

Complainants allege that since July 13, 1906, the Detroit & Mackinac Railway Company has discriminated against them in furnishing cars for interstate shipments of ice from Tobico, a billing point on said railway in the state of Michigan, in violation of section 3 of the act to regulate commerce; they also allege that the rates charged by defendants for the transportation of ice from Tobico to points in the state of Ohio are unreasonable and unjust, in violation of section 1 of said act, and ask reparation for the injury they claim to have suffered in the premises. The facts necessary to be considered are found as follows:

March 3, 1906, complainants, The Wagner Lake Ice & Coal Company, Alexander Zagelmeyer and John G. Frank, formed a partnership and began the business of harvesting, storing, and selling ice

under the firm name of Wagner, Zagelmeyer & Company, with headquarters at Sandusky, Ohio, where the office of the Wagner Lake Ice & Coal Company is located. During that month the firm erected an ice house on the shore of a little bay of Lake Huron, called Tobico, about 7 miles north of Bay City, Mich., along the line of the Detroit & Mackinac Railway. The ice house was given the name of the bay on which it is situated, as a billing point, and is the only industry in that vicinity.

Defendants are common carriers of interstate traffic, and the Detroit & Mackinac Railway Company furnishes the only transportation facilities available to complainants as shippers of ice from Tobico. The railway line of this company extends from Bay City on the south, where it connects with the Michigan Central, Pere Marquette and Grand Trunk Railroads, to Cheboygan, Mich., on the north, a distance of 195 miles. The road was originally much shorter, without connections at either end, and was constructed by a lumber company for the purpose of marketing lumber and forest products. After a large part of the timber growing along its line had been cut and sold, and on November 1, 1893, the road passed into the hands of a receiver. February 1, 1895, it was purchased by the Detroit & Mackinac Railway Company, and extensions were made to Bay City and Cheboygan. A large part of the road runs through a thinly settled and not very fertile section of the state of Michigan.

Complainants stored about 10,000 tons of ice at Tobico, which was to be sold by The Wagner Lake Ice & Coal Company at Sandusky, under an arrangement for a division of profits amongst the members of the firm. The selling company is a large concern, owning six ice houses at Sandusky and owning or controlling a number of others located at various points in Ohio and Michigan. It was the custom of the company when orders for ice were received at its office in Sandusky to parcel them out to various ice houses owned or controlled by it, as might be most convenient for shipment. The complaining firm employed one of its members who resided in North Bay City to manage the business at Tobico, receive orders for shipments of ice, superintend the loading into cars, and bill shipments to their respective destinations. Orders were usually telephoned from Sandusky either in the morning for that day's shipments or in the evening for shipment the next day. The manager at Tobico had no authority to make sales or shipments of ice except upon receipt of orders from Sandusky.

Prior to the organization of the complaining firm officials of the Detroit & Mackinac Company were consulted, and they agreed to construct a switch track from the main line of the road to the ice house in question, and to care for the traffic offered by complainants.