destination points, or by establishing to such points the basis of rates herein proposed from Corpus Christi to St. Louis. Departures will occur at intermediate destinations on both direct and indirect routes. The following examples are illustrative: From Corpus Christi to St. Louis over the direct route, composed of the Texas and New Orleans Railroad Company to Shreveport, La., Kansas City Southern Railway Company to Texarkana, Ark., Missouri Pacific Railroad Company beyond, the distance is 1,034 miles, and the proposed rate 45 cents. Over this route to Logansport, La., Knobel, Ark., and Kimmswick, Mo., intermediate destinations, 431, 836, and 1,013 miles, respectively, from Corpus Christi, respective rates of 53,3 80, and 61 * cents would be continued. Similarly, the proposed rate would be applied over a route composed of the lines of the InternationalGreat Northern Railroad Company to Fort Worth, Tex., and the Chicago, Rock Island and Pacific Railroad Company beyond, 1,374 miles, which is 33 percent circuitous. Over this route to Terral, Okla., Leeton, and Vigus, Mo., 580, 1,146, and 1,355 miles, respectively, from Corpus Christi, respective rates of 59,3 86,3 and 63 cents would be continued. Over the direct route from Corpus Christi to St. Louis the proposed 45-cent rate would earn 8.7 mills per ton-mile and, based on average loading of 110,000 pounds, 47.8 cents a car-mile. Corresponding earnings over the circuitous route described, which is the longest shown of record, would be 6.6 mills per ton-mile and 36 cents per car-mile. The representative of the Southern Alkali Corporation, which operates a plant at Corpus Christi, testified that because of the limited consumption of this commodity in the Southwest, and in order to utilize the full capacity of its plant, additional outlets are needed for its product. The present rates from Corpus Christi to St. Louis have almost entirely prevented this shipper from competing in the St. Louis market, a large consuming area, and it is anticipated that the proposed rate will enable it to compete successfully for business at St. Louis. As previously indicated, the proposed rate from Corpus Christi to St. Louis is to be constructed on the same basis, exclusive of the general increases authorized by us in 1947 and 1948, as the rates from competing origins in official territory to the same destination, and is higher in all instances than the rates from such competing points because of the greater distance from Corpus Christi. However, ap * Class 25. St. Louis combination, composed of proposed rate to St. Louis, plus fifth-class rate of 16 cents beyond. St. Louis combination, composed of proposed rate to St. Louis, plus fifth-class rate of 18 cents beyond. plicants propose to subject the rate of 45 cents to the general increase of 20 percent authorized in 1947 and 1948 for application in southwestern territory, whereas on like traffic in official territory, the authorized increase is 30 percent, thus resulting in a lower basis, mile for mile, Corpus Christi to St. Louis, than from the competing official territory origins. Under circumstances and conditions similar to those herein discussed, we have heretofore granted relief based upon market competition. Building and Sheathing Paper from Dallas, Tex., 264 I. C. C. 474 and Refrigerators From El Paso and San Antonio, 270 I. C. C. 53. Upon the facts of record, we find that relief, subject to the conditions hereinafter prescribed, to establish rates constructed upon the same basis as applied within official territory, including the same general increases, is justified, and that under such relief the proposed rates will be reasonably compensatory. Applicants will be authorized to establish and maintain over routes proposed in the application for the transportation of caustic potash, in solution, in tank-car loads, minimum weight subject to rule 35 of the western classification, from Corpus Christi, and from intermediate points from which the rates from Corpus Christi will be observed as maximum, to St. Louis, a rate not lower than 45 cents, plus the general increases authorized by this Commission in 1947 and 1948, for application on like rates in official territory, and to maintain higher rates to intermediate points; provided that the rates to such higher-rated intermediate points shall not be increased except as authorized by this Commission, and shall in no instance exceed the lowest combination of rates subject to the act; and provided further, that the relief granted herein shall not apply to circuitous lines or routes (1) where the distances over the short tariff line or route is 1,000 miles or less, and the longer line or route is more than 50 percent circuitous, and (2) where the distance over the short tariff line or route exceeds 1,000 miles and the longer line or route is more than 33% percent circuitous, except that, where the distance over the short tariff line or route exceeds 1,000 miles and the distance over the longer line or route does not exceed 1,500 miles, relief will apply to such longer line or route even though it is more than 333 percent circuitous. All other and further relief will be denied. An appropriate order will be entered. 274 L. a. C. FOURTH SECTION APPLICATION No. 231061 Submitted May 11, 1948. Decided May 2, 1949 Authority granted, on conditions, to establish and maintain export rates on manufactured iron and steel articles, pig iron and billets, and new iron or steel rails and cross ties, in carloads, from points in official territory to north Atlantic ports, without observing the long-and-short-haul provision of section 4 of the Interstate Commerce Act. A. S. Knowlton, Porter V. Green, M. C. Smith, Jr., and Leo P. Day for applicants. REPORT OF THE COMMISSION DIVISION 2, COMMISSIONERS AITCHISON, SPLAWN, AND ALLDREDGE BY DIVISION 2: 2 By these applications, as amended, filed by Agents W. S. Curlett, I. N. Doe, B. T. Jones, and C. W. Boin, carriers parties thereto operating in official territory, apply for authority to establish and maintain increased carload rates on manufactured iron and steel articles, pig iron and related articles, iron or steel billets and related articles, and new iron or steel rails and cross ties from points in official territory to New York, N. Y., and other north Atlantic and related ports, when for export, without observing the long-and-short-haul provision of section 4 of the Interstate Commerce Act. Fourth-section order No. 15926, as amended, temporarily granted the relief sought until further order after hearing. Continuing relief is sought. Authority is also sought to have the relief granted apply to other articles of a similar nature which from time to time may be added to the list of iron and steel articles and accorded the same rates, as was done in connection with domestic rates on these articles from and to the same points by fourth-section orders Nos. 11946, 11955, and 12761. A hearing was 1 This report also embraces fourth-section application No. 23270. Rates are stated in amount per 100 pounds, unless otherwise indicated, and do not include general increases authorized since December 5, 1946. 'Minimum weights on manufactured iron and steel articles, 45,000 pounds; on pig iron and billets, and related articles, and new iron or steel rails and cross ties, 56,000 pounds. held and no opposition to the relief sought was presented. The rates proposed were established effective February 1, 1948, and subsequent thereto. In Increased Railway Rates, Fares, and Charges, 1946, 266 I. C. C. 537, 623, the carriers were authorized to increase their rates on these articles 20 percent, subject to a maximum of 10 cents per 100 pounds, but not in excess of $2 per net or gross ton as rated. In finding 7, page 616, it was provided that in the initial publication of increased rates on export traffic the rates might be increased to the same extent and in the same manner as provided for domestic rates, and that after the increases became effective such rates should be promptly revised by specific publication to restore recognized port relations. The proposed rates from central territory reflect a uniform increase of 8 cents per 100 pounds on manufactured iron and steel articles, and $1.60 per ton, net or gross, as rated, on pig iron, billets, new rails, and related articles, subject to Ex Parte No. 162 increases, observing export sixth-class rates as maxima on pig iron, billets and related articles; from Buffalo-Pittsburgh-Johnstown territory, same as from central territory, observing domestic commodity or export sixth-class rates, whichever are lower, as maxima, on pig iron, billets, new rails, and related articles; and from origins east of Buffalo-PittsburghJohnstown territory, same as from central territory, observing domestic commodity rates as maxima on manufactured iron and steel articles, and on other articles domestic commodity rates or export sixthclass rates, whichever are lower, as maxima. The proposed revision in rates will also have the effect of restoring port relations. In determining port relations at the north Atlantic ports, New York is normally used as the key port, Philadelphia, Pa., is made 2 cents per 100 pounds, or 40 cents per ton, and Baltimore, Md., 3 cents per 100 pounds, or 60 cents per ton, under the New York rate. Where the observance of the domestic commodity rates or export sixth-class rates to either Philadelphia or Baltimore makes a lower rate than that constructed differentially under the New York rate, such lower-rated port is used as the key port and rates to other ports are made with relation thereto. Rates to Norfolk, Va., and other Hampton Roads ports are made the same as to Baltimore where such basis existed on June 30, 1946. Albany, N. Y., is accorded the same rates as Philadelphia, except where domestic rates to Albany are applied as maxima, and Boston, Mass., the same rates as to New York. Rates to other ports are related to the rates to those ports. This port relationship is of long standing, and is not to be disturbed here. Finding 7, makes it mandatory that the carriers adjust their rates to reflect proper port relations where rates increased as authorized in that proceeding would disrupt the normal relations. The rates in effect prior to February 1, 1948, reflected a subnormal basis. Although they bear no direct relation to the class rates, they reflect the so-called McGraham formula used in connection with the establishment of class rates from points in that territory, as explained in detail in the Michigan Percentage Cases, 47 I. C. C. 409, 416 to 422 under which the Chicago-New York rate was taken as a key rate and rates from other points were made certain percentages of the ChicagoNew York rate. Export commodity rates on these iron and steel articles were originally established in 1903. Those rates were canceled in 1917, because of conditions growing out of World War I, and the domestic rates were applied thereon until 1921, when export rates were again established. The rates then established were based on 75 percent of the domestic rates applicable on those articles from Chicago to New York, and were graded under the McGraham formula from other origins, with observance of established port differentials at the seaboard. Those rates were reduced 10 percent in 1922, following a like reduction in the domestic rates and again reduced in 1927 when the export rates on manufactured iron and steel articles were made to reflect 60 percent of the domestic Chicago-New York rate of 57 cents and graded at other points, with the observance of established port differentials at the seaboard. The reduction was made on the insistence of shippers that increasing foreign competition in these articles made necessary the establishment of lower export rates. The same basis was not established on pig iron, billets, and rails and cross ties, but the manufactured iron and steel articles rates were converted to cents per ton of 2,000 pounds and applied per ton of 2,240 pounds as maxima on those commodities. The export rates as established December 31, 1927, were first limited to expire on December 31, 1928, but this date was extended from time to time and eliminated in 1930. The export rates on manufactured iron and steel articles bear no fixed relation to the domestic rates, as the latter were revised in 1930 to reflect the mileage scale prescribed in docket 17000, part 6, Iron and Steel Articles, 155 I. C. C. 517, under which adjustment the port relations at the seaboard cities were abolished. Nor do the export rates on billets, pig iron and new iron and steel rails bear any fixed relation to the domestic rates since they observed the export rates on manufactured iron and steel articles, converted to cents per ton, as maxima. |