Intervener believes that the increase in the rate spreads has been harmful to the business of its members, and seeks the restoration of the former rate differences. This would be accomplished by the rates under suspension in the Illinois Commerce Commission proceeding, although attainment of the same end by a reduction in its rate would, of course, be acceptable. Its members sell their coal where it can be sold to their best advantage; the delivery price is the controlling factor in making sales; therefore, if they can sell it in territory where the rate difference is more favorable than in the St. Louis-East St. Louis area, they will do so.

The Coal Exchange of St. Louis is an association of 31 coal dealers of that city and of St. Louis County. They distribute 70 to 75 percent of the coal distributed at retail in that area. These dealers believe that they are subjected to unjust competition by reason of the 40-cent spread between the rates to St. Louis and East St. Louis, and they ask us to make such readjustment of the rates as may be necessary to bring about an equitable spread in the rates and remove prejudice and preference. They take no position as to whether the readjustment should be brought about by raising the rates to East St. Louis or lowering the rates to St. Louis. Although they pointed out the possibility of unloading coal from cars in East St. Louis, trucking it across to St. Louis, entailing a bridge toll of 25 cents per truck per trip in each direction, equivalent to $2 a carload, plus a weighing charge of about 3 cents per truckload, as contrasted with a difference of $16 a carload in the freight charges, the witness had no knowledge that this has been done. He knew of no instances of loss of business by a west-side dealer because of this difference in rates, because for

some years the coal supply in the area has been no greater than enough to enable dealers to supply the needs of their customers. It is feared that when the coal supply becomes more plentiful, the east-side dealers might be able to encroach on the territory of the west-side dealers. The unusually expensive switching service performed in the St. Louis-East St. Louis district has been commented upon in several reports, and was considered in Intrastate Coal Rates to East St. Louis, 161 I. C. C. 371, 376-377, where it was said that "the great proportion of the operating expense on this coal is not in the line-haul movement, but consists of the heavy assembling cost at the mines and the still heavier terminal cost at destination." Much evidence was introduced in this record by respondents as to operating conditions, in which they described in detail the handling of coal from mines in the three principal groups here under consideration to this destination area and within the area, by the Chicago, Burlington & Quincy, Illinois Central, Missouri Pacific Railroad Company (Guy A. Thompson, trustee), Wabash, Alton & Southern, Illinois Terminal, and Terminal Railroad Association of St. Louis. It is unnecessary to repeat that detail here. It is sufficient to say that the evidence proves that transportation conditions affecting the movement of intrastate shipments to the East St. Louis-Wood River-Alton district and interstate shipments to St. Louis are the same, except for the additional handling required to move shipments across the river into St. Louis, which additional service must be reflected in higher rates to the latter point.

EVIDENCE OF PROTESTANTS AND INTERVENERS

The Western Cartridge Company, a division of Olin Industries, manufactures ammunition and explosives. Its plant at East Alton, Ill., occupies about 2,000 acres. Its annual consumption of coal is 68,500 tons, all of which is received by rail. It also uses natural gas for fuel, and during 1947 this fuel supplanted 14,500 tons of coal. When more natural gas is available, this company plans to increase the use thereof until it constitutes about two-thirds of the fuel used. It has no competitors in St. Louis. Its primary interest is in the level of its rates rather than rate relations.

The Alton Boxboard Company manufactures pulpboard at Federal, which adjoins Alton on the south. In the operation of its plant it uses for fuel both coal and natural gas. During the period 1938-46, inclusive, it consumed 219,260 tons of coal, which it received by rail. During the same period it consumed natural gas to the equivalent of 843,125 tons of coal. While it would like to continue the use of coal, the rising cost thereof causes it to take the position that any further

increase in freight rates thereon will cause it to use all the natural gas that will be made available to it. It is at present using all the gas available, which fuel has certain natural advantages over coal. This company has no competitors located in St. Louis, but in the South meets with competition from manufacturers located in the South who have lower operating costs than this company.

The Hunter Packing Company is engaged in meat packing at East St. Louis, and in its operations consumes about 36,000 tons of coal a year for fuel, which coal is received by rail. It has on order conveying machinery for the handling of coal, and when that is installed it plans to receive all its coal by truck. Other packers in the East St. Louis area have been receiving their coal by truck for some time. There are also packing plants in St. Louis.

The Granite City Steel Company has a plant embracing about 100 acres at Granite City, Ill., where it produces flat steel articles. There are no plants in St. Louis producing like products. Its coal consumption is 72,500 tons a year, of which 60,000 tons in 1947 were received by rail, the remainder by truck. It plans to increase its truck receipts because of quicker delivery and cheaper delivery costs. It also uses fuel oil and natural gas as fuels, and at present the gas used annually is the equivalent of 60,000 tons of coal. Recent increases in rail rates on coal have influenced the shift to truck transportation.

The American Zinc, Lead & Smelting Company has two plants in the East St. Louis district, one at Monsanto, Ill., where the sole product is slab zinc made by the electrolytic process, in which process fuel is not required; the other, a smelting plant at Fairmont City, Ill., at which the major product is slab zinc, and incidental products are sulphuric acid (150,000 tons a year), zinc oxide, limestone, and cadmium. At this plant coal, coke, and natural gas are used for fuel. Its yearly consumption of coal at this plant is 40,000 tons, of which 25,000 tons are received by rail and the remainder by truck. Trucking has been accentuated by the recent increases in rail rates. There is no production of slab zinc, zinc oxide, or cadmium in St. Louis; a small amount of sulphuric acid is produced there which is marketed in competition with this company; some limestone, and some partial substitutes for zinc oxide are produced there.

The Midwest Rubber Reclaiming Company, manufacturer of reclaimed rubber, has a plant at Monsanto where it uses 14,000 tons of coal annually for heating. Prior to 1946 this was all received by rail; now 60 percent is received by truck from mines less than 50 miles distant, and at rates about 50 percent of the rail rates. There are no industries in St. Louis which produce a like product.

The Hindman Ice & Fuel Company is one of the largest dealers in coal at Alton. All of its coal is received by rail from the Belleville and southern Illinois groups, and its sales are predominantly for household consumption. About one-third of the homes in Alton are heated by gas or oil. This company plans to abandon rail shipping, and, influenced by increases in its rail rates, has worked out a program for doing its own trucking of coal from the mines. The Alton Retail Coal Dealers Organization has 17 members, all of whom receive their coal by rail only. The president of this association knew of 39 coal dealers in Alton who regularly truck coal from the mines to householders, and there are an increasing number of itinerant merchants who truck coal from the mines to the Wood River-Alton district.

The Truax-Traer Coal Company, protestant and intervener in these proceedings, operates coal mines in various States, including one in the DuQuoin group, the only one affected by these proceedings, which produces about 1,100,000 tons annually. The St. Louis-East St. Louis area is its most important market. In 1946, exclusive of coal sold to railroads, it shipped 191,180 tons, and in the first 11 months of 1947, 161,663 tons, to the East St. Louis-Alton district. Coal from this mine competes principally with coal produced at other Illinois mines and in western Kentucky. To the destination territory herein considered coal from this mine moves only by rail, as does that from the southern Illinois and western Kentucky groups with which it competes; but competing coal from the Belleville group moves by both rail and truck. Its coal also meets competition from oil and natural gas, which competition was increasing prior to the war; since then, because of scarcity of oil compared with the demand, and limited pipe-line capacity for gas, this competition has shown no great change. As increased pipe-line capacity becomes available protestant anticipates that this competition will take on increased importance.

The June 30, 1946, rates from the DuQuoin group to Alton were $1 interstate and 95 cents intrastate. The suspended rates of $1.25 would result in increases since the date mentioned of 25 and 31.5 percent, and the addition of the 30-cent increase then sought by respondents in Ex Parte No. 166 would result in increases since the date mentioned of 55 and 63.1 percent. It is reasoned that on a free market such increases would make it increasingly difficult to meet the competition of coal trucked from the nearer Belleville mines and the competition of oil and natural gas as they become available. From a study of its accounts, protestant asserts that there is no competition between its customers on the east side of the river and its customers on the west side of the river.

The Central Barge Company," protestant and intervener, was at the time of the hearing a wholly owned subsidiary of the TruaxTraer Coal Company. It is a certificated common carrier under part III of the Interstate Commerce Act, operating on several rivers including the Mississippi. In the 1947 season it transported 293,271 tons of coal on the upper Mississippi. It receives this coal at Alton. Central's interest in these proceedings is twofold, as it is both a user and carrier of coal. Fuel is one of the most important items of cost in barge transportation. It requires 1 ton of fuel coal for each 17 tons of revenue freight handled upriver by barge from Alton. Central purchases from the Truax-Traer Coal Company about 12,000 tons of fuel coal yearly for this service, which coal moves under the intrastate rate. The proposed increase of 15 cents in that rate would amount to $1,800 annually. Its ton-mile revenues on barge coal, Alton to Twin Cities, have been somewhat less than 2.5 mills. There is a 100 percent empty return haul of the barges. Its operating costs have sharply increased during the past 2 years, and it opposes this proposed further increase in its operating costs.

Central also opposes the proposed increases in interstate rates because of the tendency they would have to cause diversion of coal from rail-barge to all-rail routes.12 The fact that rail coal can be purchased in a unit of 50 tons while barge coal must be purchased in a unit of not less than 1,250 tons, the bargeload minimum, makes the movement of coal by rail more attractive.

The Inland Waterways Corporation, operating the Federal Barge Lines, is a protestant in I. and S. No. 5469. As indicating the importance of coal traffic to the Federal it shows that it transported on the upper Mississippi River in 1944, 762,930 tons of revenue freight, of which 351,261 tons, or 46 percent, consisted of coal; in 1945, 50.6 percent, in 1946, 77 percent, and in the first 9 months of 1947, 63.1 percent of the revenue freight it transported on the upper Mississippi was coal. For these four periods such coal constituted 16.9, 17.9, 25,7, and 12.8 percent of the revenue freight transported on its entire system. Of the 183,239 tons of coal it transported on the upper Mississippi during the first 9 months of 1947, 164,429 tons moved from Alton, 6,624 tons from East St. Louis, and 12,186 tons from Cairo, Ill.

Practically all of the coal transported upriver by Federal Barge Lines moves to Minneapolis and St. Paul, Minn. Following is stated the tonnage of coal moved by it to those destinations in 1946 from the various origin groups: From the Belleville group, 159,628 tons

11 Hereinafter called Central.

13 Its showing of changes in the spreads between rail-barge and all-rail rates is similar to data previously shown on page 651 of this report.