Shippers using the Suez route are allowed at the end of six months or a year 10 per cent bonus on their payment in order to hold their trade. This was done before and since the rate of 62 cents was established, and is intended to prevent their employment of tramp steamers.

The complainant mills offered no testimony concerning any shipments to Asiatic ports, the ordinary course being to effect sale at the mill to the factor or purchasing agent at a price free on board New York. The actual shipment either to the ship or overland via Pacific ports is made later on advices of the factor. If the shipment moves overland via Pacific ports the rate to New York is deducted from the price agreed upon, irrespective of whether shipments originate at eastern or southern mills. In the former case there is a deduction of from 15 to 19 cents, or about 162 cents per 100 pounds, and in the latter a deduction of from 39 to 54 cents, an average of 49 cents per 100 pounds.

The three great classes of competitors for the traffic are the various ocean carriers by way of Suez, the transcontinental lines reaching the eastern mills and the transcontinental lines reaching the southern mills. The freight is a very desirable one, and while self-interest carries no absolute protection to either market of production, it may reasonably be expected that none of the routes will sacrifice such interest by the establishment of rates which would result in the loss of an appreciable part of the traffic.

One of the witnesses most familiar with every phase of this business admitted that the present rates applying via the Suez and the overland routes were nearly the same.

Complainants contend that the present rate of $1.25 is excessive and discriminatory and should be reduced to $1.10. In support of this contention it is claimed that the rate has heretofore been as low as 90 cents per 100 pounds as a result of legitimate competition. It is also alleged that the last advance followed sundry meetings of the steamship companies in New York, wherein the ocean rates via Suez were raised from 22s. 6d. per ton to 62 cents per 100 pounds, the equivalent of which is variously estimated at from 32s. to 37s. 6d. Complainants contend that this agreement was a restraint of trade in violation of the Anti-trust Act and that these advanced rates resulted in a depression of business.

The meetings of representatives of the steamship companies interested in the Suez and the Pacific lines, which preceded the last advance in rates of July 1, 1906, were attended by half a dozen or more members who acted in dual capacities, they being also officials of transcontinental lines or links.

Although the agreements entered into between the representatives of the various steamship and railroad companies competing for this

traffic looking to the fixing of transportation rates may not have been entirely free of features forbidden by the Anti-trust Act, the Commission in fixing rates upon complaint can only give due weight to this fact as it does to all others bearing upon the question of the reasonableness of the rates involved. The existence of the agreement alone is not conclusive of the unreasonableness of the advanced rates. Any proceeding on account of violations of the Anti-trust Law must be instituted in the Courts.

The proximity of the Southern mills to the cotton field is one of the compensations for the less skilled, cheaper labor which has in part enabled them to enter the markets of the world.

The cotton mills of the East enjoy, in like manner, an advantage in being hundreds of miles nearer the consumers by reason of the course of trade, notwithstanding the fact that by an air line they are nearly as many miles more distant. Competition of water lines and density of traffic have largely fixed the course of this trade in the past. If we look at the adjustment of the rates in question from the standpoint of competitive conditions, we do not find the lines serving Southern mills under the same degree of necessity or pressure from that source as are the rail carriers serving the Eastern mills. In other words, the rail carriers serving Southern territory are not under the necessity of meeting the low rates established by direct water lines. If we look at these rates from the respective sections from the standpoint of the necessities of the carriers, we find that those directly serving the Southern mills are operated in a territory in which the population and traffic is much less dense than in the North, and this condition has generally been regarded as sufficient reason to justify the somewhat higher charges in the South than in the North for similar distances.

However, the natural advantage accruing to complainants by reason of their nearness to the producing fields can not of itself deprive them of the right to reasonable rates on their products, independent of all other considerations. It is not the province of the Commission to equalize, by rate adjustments, natural conditions or to destroy legitimate commercial advantages enjoyed by one section or locality.

In Enterprise Manufacturing Company v. Georgia Railroad Company et al., 12 I. C. C. Rep., 130, the Commission sustained the rate of $1.15 to Pacific coast terminals from these mills, and in China & Japan Trading Company et al. v. Georgia Railroad Company et al., 12 I. C. C. Rep., 236, held this identical rate of $1.25 per 100 pounds to be reasonable. No additional facts have been adduced in this proceeding to warrant a different conclusion. The complaint will therefore be dismissed.

No. 965.

FARMERS WAREHOUSE COMPANY

v.

LOUISVILLE & NASHVILLE RAILROAD COMPANY.

Submitted September 17, 1907. Decided October 8, 1907.

1. Upon full hearing of this complaint and consideration of the matter submitted, is is the opinion of the Commission that the rate of 22 cents per 100 pounds applying on shipments of salt in carloads from New Orleans, La., to Cullman, Ala., is unduly excessive, unreasonable and unjust, and that a rate of 20 cents per 100 pounds for such transportation would be reasonable and just.

2. It does not follow, as a matter of course, where the Commission finds that the ends of justice require the reduction of a rate complained of that reparation must be ordered on shipemnts previously made. Complainant's claim for reparation on shipments made prior to filing of the complaint denied, but he will be allowed reparation on any shipments he may have made since the filing of complaint in so far as the charges thereon exceed the rate of 20 cents per 100 pounds, and this proceeding will be held open to allow complainant opportunity to present such claim and proofs.

Emil Ahlrichs for complainant.
T. B. Harrison, Jr., for defendant.

REPORT OF THE COMMISSION.

CLEMENTS, Commissioner:

This case involves the reasonableness of the rate of 22 cents per 100 pounds applying on salt in carloads, New Orleans, La., to Cullman, Ala.; also reparation of alleged excess charge of 5 cents per 100 pounds on 13 carloads of salt shipped between June 19, 1905, and July 30, 1906, aggregating $215.75. The petition was filed January 8, 1907.

The complainant is an individual doing business at Cullman, Ala., under the name of "The Farmers Warehouse Company," buying and selling salt, cotton-seed meal, hulls, bran, hay, corn, oats and other feedstuffs, wholesale and retail.

Cullman, Ala., is located 54 miles north of Birmingham and 33 miles south of Decatur, on the North & South Alabama Railway, which is controlled by the Louisville & Nashville Railroad Company.

According to testimony introduced on behalf of complainant, Cullman is a town of about 2,500 inhabitants; but it is shown in Rand & McNally's Atlas for 1906 as having a population of only 1,250. Cullman is perhaps the largest consuming point between Decatur and Birmingham, the consumption of salt being about 50 carloads per year, most of which is used by the farmers for their live stock. The salt consumed in this section of Alabama comes from Avery Island, Louisiana, West Virginia, and points in Ohio and Michigan. There is therefore competition of markets in this territory. Salt from Avery Island comes to New Orleans by boat and rail, thence to Cullman all rail; from West Virginia and Ohio points by boat and rail, and from Michigan all rail. The value of salt at Avery Island is $1 per ton, and when sacked and loaded on the car $2.20 per ton. When delivered at Cullman it is $8.20 per ton. It retails in small quantities at $10 per ton, but when taken from the car by purchaser the price is $9 per ton. The salt is handled in sacks weighing 100 pounds and is usually hauled in low-grade box cars, there being comparatively little or no risk attached to its handling.

The 22-cent rate applying via the Louisville & Nashville from New Orleans to Cullman has been in effect since April 27, 1901, and was made up of the 12-cent rate to Birmingham, plus 10 cents Birmingham to Cullman. The rate to Birmingham was raised to 14 cents in 1905, but this did not result in advancing the Cullman rate. Prior to 1905 the rate from New Orleans to Decatur was 16 cents. In that year, however, it was raised to 18 cents. No explanation was offered by defendant as to the reason for these advances.

Salt hauled by the Louisville & Nashville Railroad from New Orleans to Decatur passes through Cullman, Cullman being 471 and Decatur 504 miles from New Orleans via this line.

The following table shows the rates on salt, carloads, from New Orleans, La., to various points between and including Birmingham and Decatur:

There is no competition at Cullman, either by rail or water lines. At Decatur, however, there is water competition, the Tennessee River being navigable to Muscle Shoals, located north of that point. Decatur is situated on the lines of two railroads, the Memphis & Charleston division of the Southern Railway, and the Louisville & Nashville Railroad. The traffic manager of the Louisville & Nashville Railroad Company testified that the following carriers actively compete in the transportation of salt from New Orleans to Decatur, viz: The Louisville & Nashville direct; the New Orleans & Northeastern to Meridian, thence via the Alabama Great Southern to Birmingham, and thence via the Louisville & Nashville to Decatur; the New Orleans & Northwestern to Meridian, thence via the Mobile & Ohio to Corinth, and thence via the Southern Railway to Decatur; the Illinois Central to Grand Junction, Tenn., and thence via the Southern Railway to Decatur; the Yazoo & Mississippi Valley to Memphis, and thence via the Southern Railway to Decatur.

The rates from New Orleans and from Ohio and Mississippi River crossings to Decatur are adjusted with reference to the rates applying to Memphis and Nashville. The 18-cent rate to Decatur apparently yields a profit to the Louisville & Nashville, but in all instances the rates from New Orleans or Ohio River crossings to Cullman are from 4 to 6 cents higher than the rates applying to Birmingham and Decatur through Cullman. The Cullman rate of 22 cents per 100 pounds amounts to $4.40 per ton, and, the distance being 471 miles, this makes a per ton per mile rate of 0.93 of a cent. The Decatur rate of 18 cents per 100 pounds amounts to $3.60 per ton, and, the distance being 504 miles, this makes a per ton per mile rate of 0.71 of a cent. The Birmingham rate of 14 cents amounts to $2.80 per ton, and for the haul of 417 miles the per ton per mile rate is 0.67 of a cent.

Upon full hearing of this complaint and consideration of the matters submitted, it is the opinion of the Commission that the rate of 22 cents per 100 pounds applying on shipments of salt in carloads from New Orleans, La., to Cullman, Ala., is unduly excessive, unreasonable and unjust, and that a rate of 20 cents per 100 pounds for such transportation would be reasonable and just. We have reached this conclusion not unmindful of the fact that such a reduction of this rate would probably result in the necessity for the reduction of other rates on shipments from the same point of origin to stations between Cullman and Decatur on the line of the defendant carrier. These latter rates, however, are not covered by the petition and, therefore, can not be included in the disposition of this case.

It does not follow, as a matter of course, where the Commission finds that the ends of justice require the reduction of a rate complained of that reparation must in all cases be ordered on shipments