little coal oil or gasoline is shipped from the East to north Pacific coast points, they being supplied from California. The rate on drugs and medicines from Chicago and Missouri River common points to Portland and other north Pacific coast terminals is $1.40 per 100 pounds in carloads and $1.90 in less than carloads. Whisky is carried between the same points at $1.25 per 100 pounds in carloads and $1.50 in less than carloads. Paint in carloads is 90 cents per 100 pounds and $1.25 in less than carloads. Under the commodity rate on alcohol of all kinds, including denatured, the carrier's risk is limited to 50 cents per gallon, which is the same limit of risk fixed on whisky under the rates above mentioned. The class rate does not limit the carrier's risk.

There are no proof-alcohol distilleries in the Northwest using either grain or sugar-beet products in the manufacture of the proof spirits. There are no denatured-alcohol plants in the Northwest. A plant at Linton, Oreg., is turning out wood alcohol as a by-product in the manufacture of turpentine and other products from wood. Alcohol is manufactured in California. Denatured alcohol is also manufactured at Agnew, California, but in what quantities does not appear. Nearly all of the grain or proof alcohol in the East is manufactured at or near Peoria, Ill., and nearly all eastern denatured alcohol is manufactured there. It appears that the California alcohol is of the same quality as the Peoria or Eastern alcohol and that it can be produced as cheap, if not cheaper, than the Peoria product.

At the time of the hearing in this case the market price of proof spirits in Chicago was $1.35 for a proof gallon and $2.55 for a wine gallon. The price for a wine gallon at Portland at that time was $2.54 for the California product. Denatured alcohol in Chicago was worth from 33 cents per gallon in carloads to 38 cents per gallon in less than carloads. Wood alcohol at the same place at that time was quoted at 35 cents per gallon. Denatured alcohol at the time of the hearing sold in Portland at 85 cents a gallon at retail and 58 cents per gallon in barrels. The price to the dealer was 43 cents per gallon laid down. The wholesale price in San Francisco at that time was 40 cents per gallon. Under the rates in question it costs from 10 cents to 11 cents per gallon to carry denatured alcohol from Chicago to north Pacific coast terminals. The rate from San Francisco to said north Pacific coast terminals is 35 cents per 100 pounds by water and 42 cents per 100 pounds by rail in carloads.

All lines carried into Portland from Chicago and Missouri River common points 35 carloads of alcohol in 1905, 13 cars in 1906, and 9 cars for the first six months of 1907. This was all pure spirits. The commodity rate on alcohol from Chicago to the Pacific coast was made to meet the competitive conditions resulting from the

manufacture of alcohol in California. Whisky carries a higher rate between the same points because, save as alcohol is used as a base, no whisky is manufactured in California. The lower rate on alcohol has not met the competitive conditions arising in California, and there has been a decrease in the shipments of alcohol from the East each year since 1905.

There is but one point of conflict in the testimony in this case. Mr. Braden, a buyer for the Clark-Woodward Drug Company, of Portland, states that he has purchased 50 barrels of denatured alcohol since January 1, 1907, and that all of it was manufactured at Peoria and shipped from Peoria to San Francisco, and that the San Francisco dealers laid it down in Portland for 43 cents per gallon. Mr. Miller, general freight agent of the Oregon Railroad & Navigation Company, states that since January 1, 1907, only 6,000 pounds of denatured alcohol were shipped from California to Portland by water, and none by rail, and that one barrel was shipped by rail from the East. Mr. Miller further states that during the same time about 200 tons of denatured alcohol were shipped from the East to California.

There is practically no difference in the price of grain alcohol and denatured alcohol or wood alcohol, except the Government revenue tax of $2.20 per wine gallon upon the first named. The other two grades are subject to no such tax. There is no difference in volume between the proof gallon and the wine gallon. The difference is in the percentage of alcohol contained in each. To get the value of a wine gallon you multiply the price of the proof gallon by 190. There is no difference between alcohol and denatured alcohol, except that the latter has denaturing elements in it which prevents its use as a beverage.

It appears that there is not much demand for denatured alcohol at this time. It also appears that in price it can not yet compete with gasoline, naphtha, or benzine, and that a gallon of denatured alcohol will not produce the same amount of power that can be derived from a gallon of gasoline. The principal use of denatured alcohol at this time is in manufacturing ether and articles in that class, and also as a solvent for shellacs and varnishes, the latter use being the largest. It does not appear that a lower freight rate from Chicago and Missouri River common points to north Pacific coast terminals would affect the price of denatured alcohol in Portland or the other cities mentioned in the complaint unless such rate would make it cost less than the California product, and the record shows that in order to compete with the price of California alcohol the rate from Chicago would practically have to be nothing.

An effort to put denatured alcohol on a parity with proof spirits would result either in a large increase in the charges on the proof

spirits or a practical wiping out of the charges upon the denatured article. An increase in the charges on the proof spirits would probably render futile all effort to compete with the California product. It further appears that no extensive shipments of alcohol have been made from the East to Portland for the past three years, and that the California producers amply supply the demand at north Pacific terminal points. Nothing is presented which shows that the rates complained of are unreasonable per se, and no satisfactory showing of discrimination or of unjust prejudice is made. The complaint should be dismissed.

No. 1024.

MCRAE TERMINAL RAILWAY

v.

SOUTHERN RAILWAY COMPANY AND SEABOARD AIR LINE RAILWAY.

Submitted October 17, 1907. Decided November 11, 1907.

Upon the facts disclosed by the record; Held, that complainant's application for physical connections between its line and lines of the defendants should be allowed so far as it relates to the Seaboard Air Line Railway, but denied without prejudice as to the Southern Railway Company, and order issued accordingly.

George H. Harris for complainant.

C. B. Northrop and R. C. Alston for Southern Railway Company. J. R. Anderson for Seaboard Air Line Railway.

R. W. Moore for Southern Railway Company and Seaboard Air Line Railway.

SUPPLEMENTAL REPORT OF THE COMMISSION.

PROUTY, Commissioner:

This is an application by the complainant railway for a physical connection with the railway lines of the defendants. By its report of June 24, 1907, 12 I. C. C. Rep., 270, this Commission expressed the opinion that such a connection should be ordered with both the defendants, but inasmuch as the proper method of making these connections and the expense were left indefinite by the testimony we declined to make an order, expressing the hope that the parties would

be able to agree among themselves. Some weeks ago the complainant notified the Commission that it was unable to secure the desired relief, and asked that the Commission proceed with the matter. Thereupon a further hearing was had, upon notice to all parties, and the case now stands for final disposition.

The testimony upon this second hearing was much more voluminous and much more to the point than upon the first hearing, and in view of it we are constrained to change some of our findings and conclusions.

The nature of the land along the line of the Southern Railway through the city of McRae is such that industrial enterprises can not be located along that railway. Upon the other hand, the line of the McRae Terminal Railway is well adapted to this purpose. Several witnesses were introduced who testified to their desire to locate various industries along the line of this railway. Among these industries were an excelsior mill, a stone yard, a coal yard, a sash factory, and a warehouse company. Some of the witnesses were still anxious to locate there provided a railway connection could be obtained; others have already located elsewhere and not in the city of McRae. This confirms the suggestion in our former report that such industries would probably spring up if fair opportunity were presented. In view of the present testimony it can hardly be doubted that with proper connections numerous industrial enterprises would be located along the line of this railway and that there is no other point in the city of McRae at which they can be advantageously located.

It was said in the former report that the freight service from the city of McRae to points upon the Seaboard Air Line via Helena was satisfactory. The present record tends to show otherwise. Very considerable quantities of freight destined to points upon the Seaboard are carted from McRae to Helena and there delivered directly to the Seaboard Company. This appears to be for the purpose of avoiding the vexatious delays which occur when shipment is made via the Southern. It is easy to understand how such delays might occur, especially if the point to which the shipment was destined was competitive between the Southern and the Seaboard. We are of the opinion that if the complainant railway was in shape to deliver traffic to the Seaboard Air Line, it would obtain a considerable amount of such traffic from the city of McRae from the outset.

Upon the other hand, it appears that the oil and fertilizer mill referred to in the former report is under contract with the Seaboard Air Line to handle its traffic over that line. If this contract is obligatory, and no question seems to have been raised against its legality, the Terminal Railway would not have, until some additional industry was located in fact upon its line, any traffic which it could offer to the Southern Railway.

In the former report mention was made of a switch track from the main line of the Seaboard to the above oil and fertilizer mill for the accommodation of that mill. It now appears that this switch track is owned and maintained by the Seaboard Air Line Company, and it is conceded by all that the proper method of making a connection with the Seaboard Air Line would be through this side track. The superintendent of this division of the Seaboard stated that the switch, for the purpose of making this connection, should be located in the switch track, the point of the switch being distant 180 feet from the point of the switch by which the side track leaves the main line. He also testified that the cost of installing this switch at that point and laying a sufficient amount of track so that a car would clear would be $135. The engineer upon the part of the Terminal Railway gave his estimate of this, with some additional track, at $127.

The oil mill switch track extends for a certain distance upon the right of way of the Seaboard Air Line. The testimony leaves it somewhat uncertain whether at a point 180 feet from the main line of the Seaboard this track is still upon the Seaboard right of way, but rather indicates that it is, and that the Terminal Railway in building up to a connection with this switch when installed must run for a short distance upon this right of way. If so, the damage is insignificant. We are of the opinion that $150 would be ample compensation for installing the switch and sufficient track so that a car might clear as indicated by the superintendent, of maintaining the same for two years, and of paying whatever slight damage may be done to the Seaboard right of way. We are further of the opinion that this connection is entirely practicable; that it does not add much to the hazard of operating the Seaboard Air Line Railway, and that the business in sight is sufficient to justify the connection. We shall therefore order this connection upon the payment by the complainant to the Seaboard Air Line, or the tender, of $150. By "track enough to clear" we mean that the Seaboard should lay sufficient track so that if the Terminal Railway lays its rails to a connection with this track a car standing upon the end of the terminal iron will clear a car upon the switch track.

In the former case we found that a connection with the Southern was feasible and that the expense would not exceed $200. This fact was found upon a general statement of the complainant to that effect, which was not denied by the Southern Railway. The testimony before us in this record is much more in detail and conclusively shows that our former finding was erroneous.

The engineer of the complainant estimated the cost of a connection with the Southern at $371.26. He admitted that the point of the connection as planned by him would be in the highway, to which 12 I. C. C. Rep.