found, that they have been obliged to pay more for corn since said change than they had to pay before. The complainants have been engaged in the milling business in Indianapolis as alleged in their complaint for the last five years, and marketed the product of their mills largely at seaboard points in the east. There are many similar mills at different places in the east, some constructed more or less recently and others which have been in operation for a great many years. The market for their product and also for that of complainants' mills was mainly in the east.

It having appeared on the trial that the Baltimore & Ohio Railroad Company might be directly or indirectly interested in the determination of the cause, an order was made that said company be notified of the pendency of the same and be given an opportunity to be heard therein and to signify its purpose in that behalf. In reply thereto said company signified its desire to be heard and submit an argument, whereupon an order to that effect was issued, and said company appeared and submitted a printed brief.

Other facts will be alluded to.

Counsel for complainants insisted in argument that the evidence had well established the facts averred in the petition, and denied that it was water competition that forced the alleged discrimination. Therefore they asked, not to have the old rates on corn restored, or the rate on corn products reduced to the rates on corn, but to have the discrimination undone and a classification re-established that would include as formerly both corn and the direct products of corn in the same class.

The counsel for the respondent companies first protested against a decision regulating only their respective rates on corn and corn products, but leaving their six competitors between Indianapolis and the seaboard free to continue the present classification and rate.

They made the further point in argument as in their respective answers: First, that it was necessary to reduce the rate on raw corn from twenty-three cents per hundred pounds to eighteen and one-half cents from Indianapolis to New York

by reason of the water competition by lake and canal from Chicago and other lake points in order to get the traffic; that in short, the reduction was forced by water competition. We take up this point before referring to other matters of defense.

Indianapolis is situated at distances from different lake shipping points of from 154 to 327 miles. The shortest rail route to Chicago is 183 miles, and to Toledo 213 miles. Its situation is to the south of these and the other lake shipping points. The amount of corn going east from or through Indianapolis is comparatively small. Whatever traffic of this kind there was, came from the territory mainly east of the line of the Chicago & Eastern Illinois railroad, and as to such corn the testimony was undisputed that the Chicago lake routes do not interfere very largely with the traffic coming by rail east of that line. We think it a fair deduction from the evidence that the corn reached by the Indianapolis millers or that found a market at or through that city was not produced in a section where it naturally or advantageously, to much extent, became the subject of water transportation east. Undoubtedly the cheap water transportation from actual lake points east, although so distant from Indianapolis and the region where the corn was mainly raised that had before the reduction found a market at Indianapolis, would naturally influence to some extent railroad companies. in making rates east from said city. It would perhaps be difficult to locate a railroad of any considerable length and having a large traffic anywhere in our country outside of all influence of water competition in respect of rates for transportation, at some points along its line. But we are fully satisfied that in view of the distance of Indianapolis from water transportation and of its location as a market for corn brought there for manufacture into its direct products or for sale to the eastern trade, the northern water routes to eastern points were not so potent as to necessitate a reduction of the rate to the point reached in this case in order to enable the railroads running east from Indianapolis to retain their usual corn traffic from that point.

It is quite apparent from intimations of some witnesses in

the cause, and from statements in the brief of the Baltimore & Ohio Company, that the purpose of that company in making the new commodity tariff and rate on corn was to obtain the traffic from Chicago for export at Philadelphia and Baltimore. It may be true as claimed, that in order to obtain corn for European shipment at those points it was necessary for the railroads reaching them from Chicago to measurably meet the rates by lake and canal or lake and rail between Chicago and New York. On a twenty cents basis per hundred from Chicago to New York the rate to Philadelphia and Baltimore under the established rule of differentials to those cities would be eighteen and seventeen cents respectively. The lines from Chicago having adopted this basis and rate from Chicago, undoubtedly influenced by the action of the Baltimore & Ohio Company, made it apply also to Indianapolis and vicinity. The result was to greatly disturb and injure the milling industry in and about Indianapolis, which used corn produced in a section so situated as to the lakes that it did not get the benefit of water transportation, and was not the corn that the Baltimore & Ohio and other railroad companies competed for against water transportation. They desired the corn that naturally sought market at and through Chicago, not corn usually collected for the mills at Indianapolis. There was therefore no occasion for reducing the rate on corn below the rate on the direct products of corn, at Indianapolis, for any purpose that the railroads had in view at Chicago. The question is not whether the reduction in rate on corn from Chicago without like reduction on the products of corn was justifiable on the score of water competition. The question is limited to the propriety of the discrimination between the two kinds of traffic from Indianapolis on that ground. On this question we think that water competition was not shown to make it necessary.

The question remains, whether the action of the respondent companies in making a reduction of rate on corn from Indianapolis to seaboard points by taking it out of the classification with the products of corn and making a commodity tariff violated the third section of the Act to regulate commerce. One provision of the section is: "That it shall be

unlawful for any common carrier subject to the provisions of this Act to make or give undue or unreasonable preference or advantage to any particular person, company, firm, corporation, or locality, or any particular description of traffic, in any respect whatsoever, or to subject any particular person, company, firm, corporation, or locality, or any particular description of traffic, to any undue or unreasonable prejudice or disadvantage in any respect whatsoever."

The facts on this point are as follows: The respondent companies and others operating railroads as common carriers from Indianapolis to the seaboard had previous to the said reduction of last July always included corn and the direct products of corn in the sixth class and thereby given them the same rate. About five years ago the complainants entered upon the business at Indianapolis of buying and grinding corn and selling its direct products in the east or near seaboard points where the principal market for such products. exists. Others there and in that vicinity had engaged in the same industry, making investment in plant for the purpose, and all relying upon a continuation of the same classification that the railroads had made and maintained from the first. Suddenly a discrimination was made between corn and its direct products amounting to four and one-half cents per hundred pounds in the rate from Indianapolis to the seaboard. The market for the product being in the east, it is plain that it would be folly to grind the corn in the west and transport the product when four and one-half cents per hundred pounds could be saved by transporting the corn to the eastern market and grinding it there, when presumably it could be done at about the same cost at both points. It did not need the testimony of witnesses, although it was produced, to prove that the discrimination in rates between corn and its products brought serious injury to the milling industry at the point where the discrimination took effect; it is plain that the result could not be otherwise. The complainants' investment, made in reliance upon a condition which the railroads had established, became practically valueless. The railroads had and would continue to have the whole transportation of the corn traffic either as raw corn or in the

product from that point. It was equally valuable to them whether in the one form or in the other. As before stated, water competition was not operative at Indianapolis to the extent required under previous rulings of this Commission, in order to amount to full defense in this case. Harwell et al. v. C. & W. R. R. Co. et al. (1 I. C. C. Rep., 236). The said change in classification and rate was, so far as shown in this case, without necessity from the railroad standpoint, and arbitrary. It is said in the brief in behalf of the Baltimore & Ohio Company, that the old classification was wrong and always had been, and violated some of the conceded principles that should control classification, and that railroads should not be held to existing classifications that were false and wrong in principle. It may be conceded that this last claim, as a general proposition, is sound, and it is true that the manufactured product of corn is commercially a little more valuable than the corn before manufacture; but, notwithstanding that fact and that value is one of the elements that enter into classification, yet the proof is abundant in this case that the increased value of the product over the corn was counterbalanced by other advantages in the transportation of the product, and on the whole the transportation of each at the same rate was equally valuable to the carrier. Of course this Commission would not hold that a classification that was wrong should be adhered to, although its change might work injury to individuals whom the wrong classification had unduly favored. But such is not this case. The point here is, whether where an existing classification and rate are not shown to operate injuriously to the carrier from a given point, or to give undue advantage to shippers, a change is justifiable that materially injures an important industry and a class of shippers at that point who have there built up the industry in reliance upon the continuation of a previous classification and rate first established and long maintained by the carriers themselves without complaint from any quarter. We think not. We think it subjects the persons engaged in the industry and the locality and the particular traffic to unreasonable disadvantage.

It is to be kept in mind that the petitioners do not com