Moultrie has made rapid progress in the last few years in population, property and business, and has overtaken some of the places having much lower rates.

While it is true that before railroads were built there were natural distributing centers, most of which were located on navigable waters, it is also true that the railroads, while making a system of basing points of these, have extended the system, and as points have become important from increase in population and business or by reason of better railroad facilities or natural advantages of location, etc., these have gradually been given through rates, sometimes voluntarily, sometimes as a result of struggles for the trade, and at others through the influence and authority of the Commission and the courts. The Georgia State commission has recently ruled that rates to Moultrie from any given point in Georgia shall in no case exceed those to Quitman and Thomasville. The other towns in the same group are on long-established through lines, yet the reduction to the southernmost of these points to the $1.43 rate has been made comparatively recently, and following this, Tifton and Fitzgerald have been added, these being intermediate points by some of the lines. The present rates by the Atlanta, Birmingham & Atlantic Railroad are, to Fitzgerald, $1.43; the same to Tifton, 25 miles farther; $1.64 to Moultrie, only 27 miles farther than Tifton; then there is a drop in the firstclass rate to Thomasville, 28 miles beyond, on the same line, to $1.43. A railway official, called as a witness for the defendants, describing the trend of rate making in this territory as due to natural location and to competition between the rail lines resulting from extensions, drew attention to the fact that the mere growth or unusual progress of one of these points was a factor in securing concessions, but stated that the original basing-point system is retained "until the carriers accede finally to the requests of these prosperous towns on these railroads by making the intermediate point basis." The same witness suggested that "without the act" the carriers would probably have extended this system, and in reply to a question as to the determining factors in the extension of the lower basis of rates said: "I think railroads would have been governed by two conditions. I think a prosperous community, situated, as is Moultrie, in a healthy and fertile country on one railroad, might have been picked out for treatment in that way. I think, on the other hand, when two or more railroads cross and there was competition for business in an endeavor to build it up that the same conditions might have obtained."

The circumstances and conditions pertaining to the transportation of freight by the defendants from the points of origin hereinbefore set forth to Moultrie are not substantially dissimilar from those pertaining to the transportation over the same roads from the same points of origin to Tifton, Valdosta, Quitman, Thomasville and Fitzgerald.

It is the opinion of the Commission, upon full hearing and consideration of the complaint herein, that the practice of the defendant carriers in charging and collecting for the transportation of freight from the points of origin hereinbefore set forth to Moultrie in excess of the rates on like freight transported by them to Tifton, Valdosta, Quitman, Thomasville and Fitzgerald is unjustly discriminatory and unduly prejudicial against Moultrie and the inhabitants thereof, and therefore unjust, unreasonable and unlawful. It is the conclusion, of the Commission that in lieu of this practice the just and reason-" able practice would be to charge for such transportation to Moultrie the same rates as are charged from the several points of origin to Tifton, Valdosta, Quitman, Thomasville and Fitzgerald.

An order in accordance with these conclusions will be entered.

No. 808.

RAILROAD COMMISSION OF THE STATE OF ARKANSAS

v.

ST. LOUIS & NORTH ARKANSAS RAILROAD COMPANY.

Submitted March 26, 1907. Decided June 24, 1907.

The defendant road being unfinished, without through connections, not extravagantly managed, under the necessity of making extensions required by public authority and the need of equipment and extension, and not earning sufficient to more than meet its operating expenses, and fixed charges not having been shown to be excessive, should not, in the judgment of the Commission, under all the circumstances at this time, be required to transport interstate passengers at the same rates per mile as are finished, well-equipped and prosperous roads.

J. E. Hampton for complainant.

W. B. Smith for defendant.

REPORT OF THE COMMISSION.

CLEMENTS, Commissioner:

The St. Louis & North Arkansas Railroad runs from Seligman, Mo., a point on the St. Louis & San Francisco Road, 6 or 8 miles from the State line, in a southeasterly direction, to Leslie, Ark., a distance of 120 miles. It has two spurs, each nearly 2 miles long, extending to Eureka Springs and Berryville, in the State of Arkansas.

The passenger rates in Arkansas, fixed by State authority, are 3 cents per mile on all roads above 75 miles in length. On interstate travel on

defendant's line the rate from Seligman to Beaver, the first station in Arkansas, a distance of between 12 and 13 miles, is 80 cents. This 80 cents is added as an arbitrary to the 3 cents per mile on all interstate travel from or to points in Arkansas beyond Beaver. This is at the rate of 63 cents per mile for the haul from Seligman to Beaver, or nearly 33 cents per mile on a haul over the entire length of road, and proportionally, of course, to and from points between Beaver and Leslie; and the alleged unreasonableness of these rates in so far as they exceed 3 cents per mile is the basis of this complaint. This statement as to intra-state rates is predicated upon the rates in effect at the time of the hearing of this case. We are not definitely advised as to what changes, if any, have been made therein since that time, but for the purposes of this case we regard this as immaterial.

In 1897 the Board of Railroad & Warehouse Commissioners of the State of Missouri complained before this Commission against the Eureka Springs Railway Company, the predecessor of the defendant herein, of a rate of 10 cents per mile from Seligman to Eureka Springs, a distance of 18 miles on the same line. The local charges then authorized by the statute of Arkansas were 5 cents per mile on roads of that length, while in Missouri the authorized rates were 4 cents per mile. It was then held that this rate from Seligman to Eureka Springs was unreasonable, and a reduction to $1.20, or 64 cents per mile was ordered. The order was complied with, and this rate was afterwards voluntarily reduced to $1. The road was then but a few miles long, but has since been extended to Leslie, more than 100 miles farther, and an extension for an outlet to Little Rock or Searcy was in contemplation at the time of filing of this complaint.

The road was built and moderately equipped at a cost of something over $20,000 per mile. There was turned over to the construction company which built and originally equipped the road $25,000 in bonds and $25,000 in stock per mile for that purpose. The road defaulted in its semiannual interest payment after this complaint was filed, and was sold to the Missouri & North Arkansas Railroad Company, which asked to be made party defendant, and this was done.

The St. Louis & North Arkansas Railroad, predecessor of the present operating company, had a contract with the St. Louis & San Francisco Railroad Company whereby the former was paid 10 per cent of gross revenues on all passenger business and 15 per cent of all receipts from freight, interchanged at Seligman for points beyond, in addition to its local rates from Seligman. This covered about 70 per cent of the joint traffic at that point, and these percentages to the defendant road on this passenger and freight business amounted to above $40,000 in 1904.

To illustrate this: Included in the price of a passenger ticket from St. Louis to Eureka Springs was $1 for that part of the ride from

Seligman to Eureka Springs, while in addition to this, 10 per cent of the price of the through ticket, which was $9.43, was allowed the defendant. As the distance from Seligman to Eureka Springs is less than 19 miles, the actual revenue of the road while that contract was in operation was above 10 cents per mile. It was testified that since the sale of the road to the new company this contract is no longer operative, so that the rates, as before stated, are now less than the maximum fixed by the Commission in 1897.

An official of the road testified that a reduction of the interstate rates to 3 cents per mile would reduce the revenues of the road about $12,000 per annum. The correctness of this estimate, however, must depend upon whether there would be an increase of the business by the reduction of rates as well as on other contingencies.

The original defendant paid no salary to its president, and only two officials of the road were salaried-the vice-president and manager and the auditor and these at less than $2,000 each. It was testified that the loss of the percentage allowances from the St. L. & S. F. road, above referred to, would result in a reduction of revenue to the extent of about $40,000 per annum. It is estimated that a State enactment of recent date requiring the defendant to fence its right of way in Arkansas will involve the expenditure of $20,000. The equipment of the road is not adequate, and further expenditures for that purpose will be required.

At the time of the hearing of the other case, ten years ago, the Arkansas rate was 5 cents per mile in place of 3 cents as now.

The extension of the line into a new country, but with no outlet as yet at the southern terminus, the cessation of construction, and the practical exhaustion of the lumber supplies along the line have resulted in a reduction in the comparative tonnage carried per mile from above 700 tons in 1901 to little more than 500 tons per mile in 1904.

While these rates seem high and much in excess of the average passenger rates, it is also true that the condition and situation of this road are peculiar for a road of its length. It is practically without branches, unfinished, and without southern connections, which are necessary alike to enable it largely to increase its business and to satisfactorily serve the public. Having recently defaulted in the payment of its interest charges and in consequence been reorganized, it is still a question as to whether it will be able to meet its obligations in the future. It is to be hoped that if it does it may soon reach a point when these rates can and will be reduced with reasonable certainty that its solvency will not thereby be impaired.

While we are not sure that a reduction of the rates might not result in equal or greater revenues from the passenger traffic, we hesitate for the present, under all the circumstances, to make an order which might have a contrary effect. The complaint will therefore be dismissed.

No. 994.

CHINA & JAPAN TRADING COMPANY, LIMITED; AMERICAN TRADING COMPANY; A. NORDEN & COMPANY; ARNHOLD, KARBERG & COMPANY; AND FEARON, DANIEL & COMPANY

v.

GEORGIA RAILROAD COMPANY; CENTRAL OF GEORGIA RAILWAY COMPANY; SOUTHERN RAILWAY COMPANY; ATLANTIC COAST LINE RAILROAD COMPANY; ATLANTA & WEST POINT RAILROAD COMPANY; WESTERN & ATLANTIC RAILROAD COMPANY; WESTERN RAILWAY OF ALABAMA; CHARLESTON & WESTERN CAROLINA RAILWAY COMPANY; COLUMBIA, NEWBERRY & LAURENS RAILROAD COMPANY; CHESAPEAKE & OHIO RAILWAY COMPANY; ILLINOIS CENTRAL RAILROAD COMPANY; LOUISVILLE & NASHVILLE RAILROAD COMPANY; NASHVILLE, CHATTANOOGA & ST. LOUIS RAILWAY COMPANY; SEABOARD AIR LINE RAILWAY; MOBILE & OHIO RAILROAD COMPANY; TEXAS & PACIFIC RAILWAY COMPANY; MISSOURI, KANSAS & TEXAS RAILWAY COMPANY; ATCHISON, TOPEKA & SANTA FE RAILWAY COMPANY; SOUTHERN PACIFIC COMPANY; GREAT NORTHERN RAILWAY COMPANY; NORTHERN PACIFIC RAILWAY COMPANY; UNION PACIFIC RAILROAD COMPANY; OREGON RAILROAD & NAVIGATION COMPANY; OREGON SHORT LINE RAILROAD COMPANY; CANADIAN PACIFIC RAILWAY COMPANY; GREAT NORTHERN STEAMSHIP COMPANY; AND OCCIDENTAL & ORIENTAL STEAMSHIP COMPANY.

Submitted May 31, 1907. Decided June 24, 1907..

1. Defendants' rate on cotton-piece goods from New England mills through Pacific coast points to the Orient is $11.25 for 40 cubic feet of measured space, equivalent to about 85 cents per 100 pounds; their rate on the same article from southern mills over the same route is $1.25 per 100 pounds; Held, Upon complaint that this adjustment is unreasonable in itself and also discriminates against southern mills in favor of New England mills, that the complaint is not sustained. Enterprise Manufacturing Company v. Georgia R. R. Co. et al., 12 I. C. C. Rep. 130, cited and approved.