60,000 pounds, and fir-lumber carloads from 61,525 pounds to 69,080 pounds.

The midwestern mills submitted figures, compiled from statistics prepared by our Bureau of Statistics, to show that the average carload weight for the year 1935 for building woodwork (millwork) was 38,220 pounds in the United States as a whole, and 39,940 pounds in the western district. The Midwest mills, therefore, made comparisons of the aggregate charges to and from their mills on a carload of lumber weighing 57,000 pounds and a carload of doors weighing 40,000 pounds, with corresponding figures for like shipments of the same weights to and from Far West mills. The ratio of outbound products to inbound lumber in each case is 70 percent, which allows for a waste of 30 percent as provided by the tariffs in connection with the transit arrangements at the Midwest mills.

A comparison representative of the many submitted deals with lumber from Longview to Tacoma, there made into doors, and shipped to 10 representative consuming points 2 in official territory, as contrasted with like shipments to and from Oshkosh, Wis. The through rates on millwork from and to the points shown range from 91 to 110.5 cents and, with one or two exceptions, are the same via both milling points. The aggregate charges per car, lumber in and doors out, for the Tacoma mill, ranged from $373.85 to $465.85, and for the Oshkosh mill, from $478.40 to $570.40 before applying the reductions in the charges on lumber and from $458.00 to $541.50 after the reductions. The amounts per car via Tacoma were less by from $104.55 to $116.55 than those via Oshkosh before reduced charges via the latter point were applied and by from $84.15 to $96.15 after such reductions. The aggregate charges per car-mile via Tacoma ranged from 15.08 to 17.42 cents and via Oshkosh, including the reductions, from 17.5 to 21.25 cents.

To show the alleged undue prejudice to them, protestants rely principally upon computations showing revenues per car and per carmile based upon average loadings to and from their mills compared with loadings to and from the midwestern mills. The inbound loading of pine lumber averaged for four mills to Spokane, for example, shown in the exhibits is 56,872 pounds, and the average outbound loading is 48,642 pounds of millwork, consisting of sash, carpenters' moldings, or other items. These are modified to 57,000 and 48,500 pounds, respectively, and compared with loadings at Midwest milling points of 54,000 pounds of inbound lumber and 36,000 pounds of outbound millwork used in prior exhibits submitted by Midwest

Detroit, Mich., Indianapolis, Ind., Louisville, Ky., Cleveland, Ohio, Baltimore, Md., Pittsburgh and Philadelphia, Pa., Rochester and New York, N. Y., and Boston, Mass.

manufacturers. The revenues per car and per car-mile computed on these two different bases of loadings are compared. Six representative destinations are used, Evansville and Indianapolis, Ind., Detroit, Mich., Cleveland, Ohio, Pittsburgh, Pa., and New York, N. Y. The through rates on millwork range from 88.5 to 107.5 cents via both milling points. Aggregate charges per car on lumber from Klamath Falls., Oreg., milled in transit at Dubuque, Iowa, are compared with those on lumber from the same origin milled in transit at Spokane. Without the reductions in the charges on lumber to Midwest points, the aggregate charges on lumber milled at Dubuque range from $442.80 to $511.20 per car and from 16 to 18.7 cents per car-mile. With the reductions computed upon a loss or wastage of 15,430 pounds of lumber, they range from $430.46 to $487.28 per car and from 15.2 to 18.1 cents per car-mile. The aggregate charges on lumber milled at Spokane range from $465.41 to $557.56 per car and from 17.3 to 19.5 cents per car-mile. Protestants contend that this comparison shows that their shipments are unduly prejudiced and those of the midwestern competitors are unduly preferred.

It is necessary to consider a number of factors in weighing the value of this comparison. (1) The weight of the outbound carload used in the Spokane computations is 85.5 percent of the weight of the inbound carload of lumber and the corresponding percentage used for the Dubuque movement is 66.6 percent. Under the tariff involved the basic relation is 70 percent. (2) The carload is not a unit of standard weight or volume and in such a comparison as this it cannot be used without adopting approximately the same average weights for computing aggregate costs. (3) The inbound weight of lumber per carload to Far West mills is 5.5 percent greater than the corresponding figure for Midwest mills, and the outbound weight of millwork per carload is 35 percent greater. (4) The higher aggregate charges per car and per car-mile, ranging from 8 to 14 percent higher via Spokane than via Dubuque, result wholly from the heavier loading to and from Spokane used in the comparison.

The carload figures used in the exhibits, 57,000 pounds inbound lumber and 48,500 pounds of outbound millwork, at Spokane do not represent the actual or an approximated ratio of product to raw material. Those used in connection with the operations at Dubuque reflect a 663-percent ratio of the loads and a 30-percent wastage of lumber required to produce the quantity of outbound millwork. If the same load ratio and same percentage of waste were used and applied to the 57,000 pounds of inbound lumber per car at Spokane the equivalent outbound carload of millwork would be 38,000 pounds instead of 48,000 pounds and the waste would be 17,100 pounds. Charges computed on the basis of an outbound load of 38,000 pounds

of millwork from Spokane to Evansville, for example, from 57,000 pounds of lumber from Klamath Falls would be $406.60 per car and 15.1 cents per car-mile, as compared with the charges computed via Dubuque of $442.80 per car and 17.2 cents per car-mile without the reductions and, with the reductions, $430.46 per car and 16.7 cents per car-mile, upon a weight of 54,000 pounds of lumber inbound and 36,000 pounds of millwork outbound. In this comparison the weight of the outbound carload of millwork from Spokane would exceed that from Dubuque by 5.5 percent.

The miles and ton-miles of service computed from protestants' exhibits from Klamath Falls to Evansville upon the carloading there shown are, to Spokane, 570 miles and 16,245 ton-miles, from Spokane to Evansville 2,113 miles and 51,240 ton-miles, to Dubuque 2,107 miles and 56,889 ton-miles, from Dubuque to Evansville 464 miles and 8,352 ton-miles. The totals via Spokane are 2,683 miles and 67,485 ton-miles, as compared with 2,571 miles and 65,241 ton-miles via Dubuque. Using the aggregate transportation charges as shown on the exhibits, the charges per ton-mile are 6.8 mills via Spokane and 6.5 mills via Dubuque, including the reductions. If the load ratio used for Dubuque is used for Spokane the ton-miles of service become 56,392 and the aggregate charges per ton-mile become 7.2 mills.

The aggregate miles of service, similarly computed, to the five other representative destinations are also greater via Spokane than via Dubuque. The ton-miles of service are also greater via Spokane, due to the use of a 5.5-percent heavier inbound load and a 35-percent heavier outbound load. If the relation of outbound products to the inbound lumber is changed as before by taking the same ratio of outbound load to inbound load as at Dubuque, the ton-miles of service become less via Spokane than via Dubuque and the charges per ton-mile become greater.

The greater ton-miles and greater aggregate charges per car and per car-mile via Dubuque are due to the haul for 2,107 miles of 15,430 pounds of lumber which is wasted in the manufacturing process but which pays for transportation from 50.5 to 58 cents per 100 pounds with the reductions, or refunds, now permitted by the tariff. Prior to the new arrangement this waste lumber paid the lumber rate of 66 cents. The comparable figure for the Far West mill at Spokane, on the basis of the same load ratios and percentage of waste are 17,100 pounds of waste lumber hauled 570 miles at a rate of 34 cents.

On the basis of the load figures submitted by protestants, corrected to show results upon a more comparable relation, the aggregate charges per car, per car-mile, and per ton-mile, do not support the

allegation of undue preference to Midwest mills and undue prejudice to protestants' mills.

Protestants, in addition to showing the aggregate charges on lumber and millwork, testified that a few Far West manufacturers maintain warehouses at points in official territory, such as Chicago and New York, to enable them to compete more successfully with manufacturers closer to markets in that territory. When the demand for millwork is low, competition is severe, but when the demand is active, competition is less severe, regardless of the freight rates. At the time of the hearing, prices for millwork had increased so that, with the more brisk demand, Far West mills were able to compete with the Midwest mills in the Detroit, Cleveland, and other eastern areas. Upon the basis of the aggregate charges per car of millwork of approximately the same weight the Far West mills are at no disadvantage in transportation costs in such competition. On the contrary they are in a better position than the Midwest mills in respect of such costs. There was no evidence that the reduced charges on lumber accorded to the Midwest mills by the refund arrangements had adversely affected the business of any western mill.

We find that the schedules complained of have not been shown to be unreasonable, unjustly discriminatory, unduly preferential, unduly prejudicial, or otherwise unlawful, and that the proceeding should be discontinued.

An order discontinuing the proceeding will be entered.

AITCHISON, Commissioner, dissenting:

In an expression appended to the original report herein, 218 I. C. C. 47, I pointed out wherein the arrangement then proposed by the western lines was in violation of law. Four of my colleagues joined in that expression of dissent. The arrangement now before us is the same, save that the amount of the rebates is standardized. For reasons stated in that expression, I am convinced the arrangement proposed is illegal and should be condemned. Further, the arrangement is unjustly discriminatory as between the Midwest millwork manufacturers and their competitors farther west, who are obliged to move in their raw material from the same sources, but who get no such favored treatment. This discrimination is substantial, and was so intended. The new schedules should be found to be in violation of the act, and cancelation should be required.

I am authorized to state that CoMMISSIONERS EASTMAN, MCMANAMY, and MAHAFFIE concur in this expression.

COMMISSIONER LEE, being necessarily absent, did not participate in the disposition of this proceeding.

No. 27818

MERCHANTS' EXCHANGE OF ST. LOUIS, MO., ET AL., v. LOUISVILLE & NASHVILLE RAILROAD COMPANY

Submitted January 24, 1938. Decided April 12, 1938

Rates charged on wheat, in carloads, from Belleville, Ill., milled in transit at East St. Louis, Ill., thence reshipped as flour and other wheat products, to destinations in Alabama, found applicable. Complaint dismissed.

A. T. Sindel for complainants.

J. C. Kuebert for defendant.

REPORT OF THE COMMISSION

DIVISION 3, COMMISSIONERS MCMANAMY, PORTER, AND MILLER BY DIVISION 3:

Exceptions to the report proposed by the examiner were filed by complainants and defendant. Our conclusions differ from those which the examiner recommended.

Complainants, Merchants' Exchange of St. Louis, Mo., a nonprofit association, and Hall Milling Company, a corporation, alleged by complaint filed August 4, 1937, as amended at the hearing, that the rates sought to be collected on wheat, in carloads, over defendant's line from Belleville, Ill., milled in transit at East St. Louis, Ill., and the flour and other wheat products thereof shipped from East St. Louis during October and November, 1934, and August and September, 1935, over defendant's line, through Belleville to destinations in Alabama, were inapplicable. Complainants ask us to find that the rates charged were applicable on this traffic. Rates will be stated in cents per 100 pounds.

Decatur, Ala., is the only final destination specifically mentioned, and the rates thereto are the only rates to such destinations named in the record. Those rates, however, are given as typical of the rates on this traffic to the destinations as a whole. Over defendant's line Belleville is 14 miles southeast of East St. Louis, and is intermediate between East St. Louis and the final destinations here considered. The shipments from East St. Louis to Decatur consisted of six carloads of flour. Charges were collected for the movements from Belleville to East St. Louis and thence to Decatur at a rate of 32 cents, based on a local rate of 7.5 cents on wheat, in carloads, from Belleville to East St. Louis, a proportional rate of 29 cents on flour,