per car-mile, is 68.2 percent of the rate of $17.60 on dead-burned magnesite from the western producing points to transcontinental group C which embraces Narlo. Allowing for the waste that results from processing the crude brucite the rate on this commodity does not appear unfavorably related to the magnesite rate.

The intercoastal water carriers take the position that the present transcontinental rates on dead-burned magnesite are unreasonably low, that the 6-cent maximum or hold-down last prescribed, should be rescinded, that the adjustment of November 1, 1948, should be found unlawful, and that the full percentage increase should be restored. They are not interested in the brucite rate.

The water carriers have transported some dead-burned magnesite from the west coast in each year, beginning with 1924 through 1948, except the years 1941 through 1945. The tonnage ranged from 4.264 gross tons (2,240 pounds) in 1938 to 65,022 gross tons in 1947. For the first 6 months of 1948 they transported 28,790 gross tons. Prior to establishment of the maximum increase prescribed on July 27, 1948, the water carriers participated in the movement of this commodity from Chewelah, Newark, and Salinas to Atlantic seaboard destinations and from Newark and Salinas to inland points as far as Pittsburgh. The present rates make all-rail transportation more desirable from Chewelah to Baltimore, Philadelphia, or Pittsburgh. There is a narrow difference in favor of water transportation from Newark or Salinas to either Baltimore or Philadelphia, but not to Pittsburgh. There has been no movement since August 21, 1948, from Chewelah to the Atlantic seaboard, or from Newark or Salinas to the Pittsburgh district. If the November 1, 1948, adjustment were extended to the Atlantic seaboard without adjustment of the rates of the carriers by water, the movement by water from Newark and Salinas also would be affected. The water carriers cannot participate in the transportation to points embraced in the adjustment of November 1, 1948.

The water carriers contend that the ton-mile revenue under present rates on dead-burned magnesite from Chewelah and Newark to 17 eastern steel producing points, is low and justifies increases. From Chewelah the revenue ranges from 7.63 to 8.59 mills and from Newark the range is from 6.29 to 7.12 mills. These revenues are compared with the average revenue per ton-mile necessary for expenses, passenger deficit, and fixed charges of five transcontinental carriers, which range from 9.42 to 12.29 mills. No comparison is made of car-mile yields which are of importance because of the heavy loading and are of greater significance than comparisons with average ton-mile revAs hereinbefore noted, car-mile yields from Chewelah to eastern points are from 35 to 43.3 cents.

It is clear from the evidence of record that lawfulness in the adjustment of the rates does not require the subjection of magnesite to the full percentage increase of April 13, 1948. The present rates from the far western origins may be as much as 67 percent of the price of the product. The elimination of the hold-down and the resultant increase in transportation cost to the consumer could cause some substitution of other refractory materials and tend to encourage the resumption of magnesite imports.

We find that the increases in rates on magnesite, calcined or deadburned, and brucite, crude, not dehydrated, in carloads, from, to, and between points in the United States under consideration in No. 30044, and the rates and charges, and the rules, regulations, and practices affecting such rates and charges applicable on magnesite, crude, calcined or dead-burned and brucite (magnesium ore), in carloads, under consideration in No. 30090, are not unreasonable or otherwise unlawful. The proceedings will be discontinued.

ALLDREDGE, Commissioner, concurring in part:

I concur in the report except with respect to the disposition of brucite. In my opinion, the facts developed clearly demonstrate that this low-grade raw material is entitled to a maximum increase not exceeding 3 cents per 100 pounds under Ex Parte No. 166.

COMMISSIONER PATTERSON, being necessarily absent, did not participate in the disposition of this proceeding.

COMMISSIONERS JOHNSON and CROSS did not participate in the disposition of this proceeding.

274 I. C. C.

APPENDIX 1

Chronological history of authorized changes in rates on magnesite, dead burned, from representation producing points to typical consuming points since March 28, 1938, and reductions on November 1, 1948

No. 30072

S. H. KRESS & COMPANY v. CENTRAL OF GEORGIA RAILWAY COMPANY (M. P. CALLAWAY, TRUSTEE) ET AL.

Submitted April 11, 1949. Decided June 16, 1949

Rate on paper bags and wrapping paper, in carloads, from Savannah, Ga., to Salt Lake City and Ogden, Utah, found not shown to have been unreasonable. Complaint dismissed.

A. H. Nelson for complainant.

H. M. Croghan for defendants.

REPORT OF THE COMMISSION

DIVISION 3, COMMISSIONERS MILLER, JOHNSON, AND CROSS

BY DIVISION 3:

The shortened procedure was followed. No exceptions were filed to the examiner's proposed report.

The complainant, a corporation, by complaint filed September 22, 1948, alleges that the rate1 charged on two carloads of paper bags and wrapping paper, shipped from Savannah, Ga., to Salt Lake City and Ogden, Utah, September 1 and November 28, 1945, was unreasonable and in violation of sections 1 and 3 of the Interstate Commerce Act. We are requested to award reparation based on a rate established December 29, 1945, by the defendants for the future. An informal complaint alleging the same violations as the formal complaint, was filed with the Commission by the complainant on March 18, 1947, and closed on August 3, 1948, as not being susceptible of informal adjustment. No evidence was adduced with respect to the alleged violation of section 3 of the act, and that phase of the matter will be given no further consideration.

One of these shipments weighed 56,778 pounds, and the other, 57,532 pounds. They were transported over the lines of the defendants 2,377 and 2,480 miles, respectively. Charges were collected based on a commodity rate of $1.43, applying on paper and paper articles, including paper bags and wrapping paper, minimum 40,000 pounds, in effect from transcontinental groups A and K, including Savannah, to

1 Rates and difference therein will be stated in this report in amounts per 100 pounds.