percentages applied to official-territory first-class rates produce rates much lower in amount than the same percentages applied to the firstclass rates in southern territory, 35 percent of the official-territory first-class rates being approximately equivalent to 25 percent of the southern first-class scale. From producing points in Missouri and Arkansas to destinations in central and western trunk-line territories, commodity rates on watermelons are maintained which are not related directly to class rates, but on the average are about 25.5 percent of the corresponding first-class rates. In connection with the rates from Missouri and Arkansas, the tariffs provide an allowance of 500 pounds per car to cover the weight of the dunnage required to protect the shipments. No similar allowance is made in connection with shipments from the Southeast. From the producing area in northern Mississippi to Chicago, a blanket rate of 42 cents is maintained, which, on the average, is 26 percent of first class. Defendants state that this rate is maintained because of competition in the Chicago market with melons from Missouri.

Complainants refer to the decision in Indiana Public Service Comm. v. Baltimore & O. R. Co., 89 I. C. C. 651, decided May 27, 1924, wherein division 2 prescribed class C, at that time 28 percent of first class, on fresh fruits and vegetables other than strawberries and peaches, from Indiana and Illinois to Chicago. Watermelons would be included in this commodity description but there is nothing in the decision to indicate that the rates on watermelons were considered separately. The principal question decided in that proceeding was the relation of Indiana interstate to Illinois intrastate rates.

It should be observed that, in most of the producing territory mentioned in complainants' comparisons, the peak of the melonshipping season is later than in the complainant States, and therefore the average price obtained is generally lower.

Complainants also compare rates on watermelons with rates on livestock from Montgomery, Ala., to eastern markets, which latter rates average 27 percent of first class, and with rates on sewer pipe within southern territory, which are 17.5 percent of first class. In Clay, Concrete, or Shale Products, 179 I. C. C. 39, division 4 found justified schedules establishing rates on sewer pipe between points in official and southern territories based on 25 percent of the corresponding first-class rates. The average loading of livestock is less than that of watermelons, and that of sewer pipe is greater. It is not shown that these rates would be an appropriate measure for reasonable rates on watermelons.

Defendants urge that the 30-percent basis approved in Watermelons from, to, and between Southern Points, supra, was not considered by

them as affording a maximum reasonable level of rates, but that its establishment was influenced by extremely low intrastate rates. In the Georgia and Florida intrastate exceptions to the southern classification, watermelons, minimum 24,000 pounds, are rated class P, which is the rating applied to lumber, building stone, and other articles, respecting which the transportation characteristics are entirely dissimilar from those of watermelons. The intrastate class P rates in Georgia and Florida are approximately 11 and 10 percent, respectively, of the southern first-class scale. The intrastate rates in South Carolina are about 18 percent of first class.

*

Defendants refer to J. H. Bahrenburg, Bro. & Co. v. Atlantic Coast Line R. Co., 24 I. C. C. 560, decided in 1912, in which the Commission stated: "It is probable that cabbages are more nearly akin to watermelons in incidents of transportation than any other fruit or vegetable; we see no reason why rates upon watermelons should be greatly less than upon cabbages." This conclusion was referred to with approval in a more recent decision, Rosenthal v. Atlanta, B. & A. Ry. Co., 172 I. C. C. 206, decided in 1931. In the Southeastern Vegetable Case, 200 I. C. C. 273, the Commission approved rates on cabbage within southern territory, excluding the Florida peninsula, and from southern territory to official territory based on 32.5 percent of first class, and from the Florida peninsula rates based on 35 percent of first class. In Virginia Corp. Comm. v. Pennsylvania R. Co., 214 I. C. C. 753, the Commission prescribed rates on cabbage from Virginia producing points to destinations in official and southern territories on the general basis of 35 percent of first class, minimum 24,000 pounds. In the two cases last cited, reasonable rates were prescribed also on a number of other vegetables. With the exception of rates on potatoes, the bases therein prescribed were higher than 30 percent of first class. For the transportation of potatoes 27.5 percent of first class was prescribed, but with a minimum of 30,000 pounds. Pursuant to the decision in the Southeastern Vegetable Case, supra, rates were established on the following vegetables, at the percentages of first class shown, minimum 24,000 pounds:

Defendants compare the car-mile earnings, on shipments of watermelons from eight producing points in the four complainant States to 12 important markets in official and southern territories, with carmile earnings on cabbage, potatoes, string beans, and cucumbers from and to the same points. The origins selected are points from which shipments of watermelons and of the other vegetables named actually moved. The earnings per car-mile on watermelons are uniformly lower than those on any of the other commodities with which they are compared, except cabbage. The rates on cabbage are higher than on watermelons, but the car-mile earnings under these rates are nearly the same as those under the watermelon rates, because of the lighter average loading of cabbage. The car-mile earnings shown on watermelons range from a high of 49 cents from Faison, N. C., to Richmond, Va., 161 miles, to a low of 16.7 cents from Thomasville, Ga., to Boston, Mass., 1,256 miles. The other vegetables shown as moving from Faison to Richmond, and the car-mile earnings, are cucumbers 60 cents, potatoes 53.1 cents, and string beans 59.5 cents, and from Thomasville to Boston, string beans 20.6 cents. The carmile earnings referred to above are based on average loadings as follows: Watermelons 27,220 pounds, cucumbers 25,404 pounds, potatoes 32,260 pounds, string beans 22,260 pounds, and cabbage 24,040 pounds.

Complainants lay much emphasis on their contention that the rates assailed are too high in relation to the value of the commodity transported and of the transportation service. They introduced considerable testimony and numerous statistical exhibits in support of this contention.

The cost of growing melons in Georgia and northern Florida is shown to be approximately $65 per carload, the cost of harvesting, hauling, treatment, and loading is $23, or a total cost of $88 per carload. The costs of production in South Carolina are approximately the same as in Georgia. Those in North Carolina are somewhat higher. Costs in the Florida peninsula are not definitely shown, but it was testified that they were approximately twice those in Georgia. Melons grown in the Florida peninsula reach the market earlier than those from other States and command higher prices.

The price at which watermelons are sold in the wholesale markets depends largely on the quantity of melons offered for sale at that market and the ability of consumers to pay for a commodity which may be considered as not a food necessity. As previously indicated, the returns to the producer in any year are generally reflected in the size of the next year's planting. Thus, it is to be expected that during the years of business depression the prices and also the produc

tion would be relatively low. That this has been the fact is illustrated by the following table:

1 Average of prices to shippers for the months of June, July, and August, weighted by carloads.

In 1936 the average price in New York was $301, or the same as the average price for the years 1925 to 1929.

During the period covered by the foregoing table, the freight rate to New York from Moultrie, Ga., a representative shipping point, was 67 cents up to March 22, 1933, and 69 cents thereafter, equivalent to $181 and $186, respectively, per carload of 27,000 pounds. The price per carload in New York, less the freight charges, averaged $120 from 1925 to 1929. From 1930 to 1935, inclusive, the average price, less freight, ranged from a low of $50 in 1932 to a high of $90 in 1934. In 1936 it was $115, or nearly equal to the average for the five years immediately preceding the business depression. A similar showing is made as to producing points in Florida and South Carolina, and also in respect of wholesale prices in Chicago. The general conclusion to be drawn from the foregoing is that the freight charges during the years 1930 to 1935, inclusive, were a larger percentage of the price received for the watermelons than was the case during the years from 1925 to 1929, but that in 1936 the relation of the freight charges to value was nearly at the predepression figure. The record also shows that the average price received at destinations in official territory, less freight charges, was less in 1932 than in 1933, the latter being the year when the rates approved in Watermelons from, to, and between Southern Points, supra, became effective, or than in any succeeding year to and including 1936, notwithstanding the fact that the effect of the freight rate changes was to raise the average rate level.

Other evidence introduced by complainants shows that the ratio of freight charges to farm value in the case of watermelons is greater than in the case of various other farm products, including cabbage, potatoes, cantaloupes, onions, tomatoes, and berries. For example, in 1928 the ratio of freight charges to farm value in the United States as a whole, expressed in percentages, was as follows: Water

melons 97, cabbage 60, potatoes 51, cantaloupes 71, onions 31, tomatoes 34, and berries 15. In 1934, the corresponding ratios were watermelons 172, cabbage 126, potatoes 63, cantaloupes 86, onions 54, tomatoes 51, and berries 22.

The prices of watermelons in the large northern markets fluctuate greatly in any shipping season. For example, in 1936 the auction price in New York for 32-pound Watson variety watermelons originating in the States of Alabama, Florida, Georgia, and South Carolina ranged from a high of $850 per carload during the first week in June to a low of $240 per car during the first week in August, a difference of $610. This range in price is more than three times the freight charge per carload from Florida, the most distant of the complaining States, to New York.

The loading rules governing watermelon shipments are those approved in Watermelons from the South, 178 I. C. C. 687. These rules provide that shippers shall, at their expense, board car doors from the floor to the top of the load, line the side walls of the car to the height of the load with kraft paper of a specified weight, and pad the floors with not less than three bales of excelsior, or with clean straw or hay spread to a thickness of not less than 6 inches, and shall pad the ends of the car with a quantity of excelsior or hay approximately 2 inches or more in thickness, securely attached to the ends of the cars.

The transportation service given to watermelons is one of the most expensive accorded to any commodity. Melons as well as other kinds of perishable traffic are given expedited service and unusual care is taken in handling the cars in switch movements at terminal and diversion points. Notwithstanding this care, loss and damage claims on watermelons are among the highest paid on any class of perishables. The following are the average claims per car paid by the railroads of the country in 1935 on shipments of the articles shown: Cucumbers $19.98, tomatoes $18.47, lettuce $16.21, watermelons $15.08, grapes $12.48, cantaloupes $10.21, apples $5.85, cabbage $5.02, oranges $4.61, onions $3.45, bananas $.92, and white potatoes $.87.

Watermelons and other perishables are allowed a maximum of four diversions or reconsignments without charge. This service is availed of to a greater extent in connection with watermelon shipments than in connection with perishable commodities generally. Eighty percent of the shipments of watermelons are diverted or reconsigned. During July 1936, 9,870 cars of perishables were handled through Potomac Yard, Va., of which 4,804 or 48.7 percent were watermelons. Of the cars of perishables, 6,031 were diverted and of these, 3,851 cars, or 63.9 percent, were watermelons. Recon