St. Joseph was not a compensatory rate on hay, and by the complete failure of the complainant to show that the rate to Kansas City was in itself excessive. That issue although raised in the complaint was abandoned on the hearing.

The petition must be dismissed and it will be so ordered.

No. 1031.

MORSE PRODUCE COMPANY

v.

CHICAGO, MILWAUKEE & ST. PAUL RAILWAY COMPANY; GREAT NORTHERN RAILWAY COMPANY; CHICAGO & NORTHWESTERN RAILWAY COMPANY; AND CHICAGO, BURLINGTON & QUINCY RAILWAY COMPANY.

Submitted October 19, 1907. Decided November 4, 1907.

Defendant Chicago, Milwaukee and St. Paul Railway Company's rate on butter and eggs from Granite Falls, Minn., to Chicago, Ill., is 59 cents per 100 pounds in carload lots. Defendant's rate from Pipestone, Minn., to Chicago, Ill., is 47 cents per 100 pounds in carload lots, although Granite Falls is 41 miles nearer Chicago, but on a different branch of the road. The same rates are in force by defendant Great Northern Railway Company, although Granite Falls is an intermediate point between Pipestone and Chicago on the line made by the Great Northern Railway and its connections. Held, defendant Chicago, Milwaukee and St. Paul Railway Company's rate of 59 cents per 100 pounds on butter and eggs in carload lots from Granite Falls to Chicago is unreasonable and unjust, and should not exceed 47 cents per 100 pounds.

Bert O. Loe and A. E. Morse for complainant.

William Ellis, J. T. Conley, and E. C. Nettels for Chicago, Milwaukee & St. Paul Railway Company.

J. D. Armstrong for Great Northern Railway Company, Chicago & Northwestern Railway Company and Chicago, Burlington & Quincy Railway Company.

REPORT OF THE COMMISSION.

LANE, Commissioner:

The complainant is a corporation having its principal place of business at Granite Falls, Minn. It is engaged in buying and selling eggs and butter and shipping the same to wholesale markets in vari

ous States. Its method of business is to send bids to various towns in the State of Minnesota and South Dakota, which bids name prices offered for butter and eggs f. o. b. at such towns of purchase. On butter and eggs so purchased it pays the local rate to Granite Falls. Shipments are there consolidated into carload lots, which are shipped from Granite Falls to the wholesale markets.

The defendants are carriers subject to the act to regulate commerce, operating between Chicago, Ill., and both Granite Falls, Minn., and Pipestone, Minn., as through routes or as portions of through routes.

The complaint is directed against the rate of 56 cents per 100 pounds charged by the defendants for carrying butter and eggs in carload lots from Granite Falls to Chicago. This is the rate upon third-class products, no commodity rate on butter and eggs being published in the territory where Granite Falls is situated. Complainant contrasts the Granite Falls third-class rate with the rate of 43 cents per 100 on third-class products in carloads, including butter and eggs, from Pipestone to Chicago, and charges that this relation in rates is a discrimination against him and in favor of his competitors at Pipestone.

Granite Falls is as to certain territory in Minnesota a competitive point with Pipestone in the business of purchasing and shipping butter and eggs. Both Granite Falls and Pipestone are on the same line of the Great Northern Railway, Granite Falls being an intermediate point between Pipestone and Chicago on the line between the two latter cities made by the Great Northern and its connections. By this line Granite Falls is 70 miles nearer Chicago than is Pipestone.

Granite Falls is also situated upon the Chicago, Milwaukee & St. Paul Railway, the distance from Chicago to Granite Falls via this road being 535 miles. Pipestone is also reached by the Chicago, Milwaukee & St. Paul Railway, by a different line, however, than the line of that road reaching Granite Falls. The distance from Chicago to Pipestone via the Chicago, Milwaukee & St. Paul Railway is 576 miles.

It thus appears that Granite Falls is nearer Chicago than is Pipestone by every possible route; that the rate on butter and eggs in carloads from Granite Falls to Chicago is 13 cents per hundred pounds higher than the rate from Pipestone to Chicago; and that by the Great Northern Railway and its connections Granite Falls is an intermediate point between Chicago and Pipestone.

The defendant railroads admit all the above facts and seek to justify them as follows: The Great Northern Railway disclaims responsibility for the lower rate from Pipestone. It shows that its

rate from Granite Falls is somewhat less than its rates from certain other towns equally distant from Chicago, and also that the low Pipestone rate is out of proper relation to its rates from other points on the same branch. As to the Pipestone rate, it shows that it is a rate forced upon it by the competition of the branch of the Chicago, Milwaukee & St. Paul Railway extending from Milwaukee, Wis., to Sioux Falls, S. Dak. This, of course, is such competition as would justify a departure from the provisions of the fourth section of the act to regulate commerce. The burden of the defense is thus shifted to the Chicago, Milwaukee & St. Paul Railway.

The defense of the latter is briefly this: Pipestone has a low rate because Sioux Falls, S. Dak., a point with which it competes for certain jobbing business, has a low rate. No transportation competition at Pipestone is shown to justify the existence of an exceptionally low rate at that point. Neither is there any claim that the rate from Pipestone is not voluntarily made by the Chicago, Milwaukee & St. Paul Railway and remunerative and reasonable to all the carriers involved. Regarding this Pipestone rate, testimony was given by Mr. E. C. Nettels, assistant general freight agent of the St. Paul road, as follows:

Mr. ELLIS. Why is the adjustment of class rates at Pipestone lower than the adjustment at Granite Falls?

Mr. NETTELS. That requires a little explanation. The class rates in effect from Chicago to the Missouri River—that is, Kansas City, Omaha, Sioux City, and Sioux Falls-are all the same. The distances between those points are different. The distance between Chicago and Kansas City is about 490 miles. I don't know the exact distance to Omaha, but it is something over 500 miles; Sioux City is a little farther, and to Sioux Falls still a little farther. Those class rates are all the same-the basis of rates arrived at by all the lines in competition for business between these points. Sioux Falls and Pipestone have been considered competitive points as far as the jobbing houses are concerned. When the adjustment of rates was made, Pipestone, being in directly intermediate territory, was in competition with Sioux Falls, and the class rates were made to give the jobber handling shipments under the classification an opportunity to do business. The distances, as I say, were not materially considered in the application of these rates or the making of them, and there is no such thing, as I understand, as a jobbing house at Granite Falls. There are distributing points, but there is no competition between the points so far as that is concerned, while the rate at Sioux Falls fixed the rate at Pipestone.

Mr. ELLIS. Pipestone being, at least technically, intermediate to Sioux Falls from Milwaukee, and practically so as to certain routings, carried the Missouri River rate back to Pipestone, didn't it?

Mr. NETTELS. Yes.

Mr. ELLIS. That is the fact?

Mr. NETTELS. Yes, except now it does not. The rate to Pipestone is higher than it is at Sioux Falls, for the reason we have been enjoined from putting in the basis of rates at Sioux Falls that formerly applied there.

Mr. ELLIS. On the basis of adjustment by the railroads, it would carry it back there?

Mr. NETTELS. Yes, that is the basis carried in there.

Mr. ELLIS. That is due to commercial conditions, is it not, Mr. Nettles?
Mr. NETTELS. Yes, sir.

In its brief, the Chicago, Milwaukee & St. Paul Railway explains this matter as follows:

The rates between Chicago and Pipestone are not normal rates, and were not fixed with reference to their reasonableness per se. They were adjusted to meet a commercial necessity which does not exist at Granite Falls, and are of distinct benefit and advantage to a large section of growing country. They are so adjusted as to afford a considerable area west and north of Pipestone competition in the distribution of merchandise, which could not exist without the abnormal adjustment of interstate rates which obtains. Substantially the same basis of class rates applies to Pipestone as that which applies to Sioux Falls, and the same bases of distributing tariffs apply out from those places, so that in common territory to the north and west of both places, jobbers in each place compete on terms of fair equality with those of the other. The evidence shows that jobbing is done at Pipestone and that none is done at Granite Falls.

After issue joined the third-class rate from Pipestone to Chicago was increased to 47 cents, and the third-class rate from Granite Falls to Chicago was increased to 59 cents.

It is evident that the rates on butter and eggs in carloads via the Chicago, Milwaukee & St. Paul Railway from Granite Falls to Chicago are too high by at least the difference between that rate and the rate on the same commodities in carloads from the more distant point, Pipestone, to Chicago by another branch of the same railroad. The just, fair, and reasonable rate for that carrier to observe in the future on this traffic between Granite Falls and Chicago, therefore, is 47 cents per hundred pounds, and an order will be entered accordingly. As to the other carriers named as respondents, it is evident that no further findings or order need be made and as to them the complaint may be dismissed.

12 I. C. C. Rep.

No. 1067.

MCLAUGHLIN BROTHERS

v.

ADAMS EXPRESS COMPANY.

Submitted September 12, 1907. Decided November 4, 1907.

Defendant's rate per car for the transportation of horses from New York to Columbus is $200; from Columbus to Kansas City, $350; from Columbus to St. Paul, $350. The rate per car from New York to St. Louis is $300; from St. Louis to Kansas City, $150; from New York to Chicago, $250; from Chicago to St. Paul, $200. Thus the total charge from New York to Kansas City when the shipment is stopped at St. Louis is $450; when stopped at Columbus, the total charge is $550. Similarly, the charge from New York to St. Paul is $450 when the shipment is stopped at Chicago, and $550 when the shipment is stopped at Columbus. Held, defendant's rate of $350 per car from Columbus to Kansas City and Columbus to St. Paul is unjust and unreasonable, and should not exceed $250 per car.

Louis G. Addison for complainant.

Maxwell & Ramsey and Joseph S. Graydon for defendant.

REPORT OF THE COMMISSION.

LANE, Commissioner:

The petition in this case deals with express rates on horses from New York to western points. McLaughlin Brothers are dealers in horses, having their principal place of business at Columbus, Ohio, and branch places of business at Kansas City, Mo., and St. Paul, Minn. They import large numbers of horses from Europe, and these they ship by express from New York to Columbus, and later send them to their western branches.

The superintendent of traffic of the Adams Express Company, Mr. J. Zimmerman, filed in this case the following table showing the express rate and the cost to the defendant of transporting a carload