A rate of 8 cents applies on manufactured iron and steel articles from Coatesville, Pa., to Philadelphia, 42 miles over the short tariff route of the Pennsylvania. It is proposed to increase this rate to 11 cents, which is the domestic rate held as a maximum. The proposed rate will earn a minimum of $49.50 per car, $1.18 per car-mile, and 52.4 mills per ton-mile over the direct route. It is proposed to apply this rate over the indirect single-line route of the Reading Company, 81 miles, which is 93 percent circuitous, over which route the car-mile return would be 61.1 cents and the ton-mile yield 27.2 mills. A rate of 8 cents now applies from Birdsboro, Pa., an intermediate point on the Reading Company, 49 miles from Philadelphia, which conforms to section 4. Under the proposed adjustment this rate will become 12 cents, which reflects the domestic rate from that point held as a maximum and creates a new departure.

In Iron and Steel in Central and Trunk Line Territories, 209 I. C. C. 699, applicants therein sought authority to establish and maintain for interstate application on iron and steel articles, in carloads, except cast-iron pipe and fittings, listed in appendix C to Iron and Steel Articles, supra, and iron and steel articles taking the same rates, to destinations within a radius of 100 miles from producing points in central and trunk-line territories, the so-called short-haul scale fixed by the Pennsylvania Public Service Commission for like distances within Pennsylvania, in lieu of the so-called standard scale shown in appendix F to Iron and Steel Articles, supra. The authority sought was granted subject to conditions including the proviso that the relief shall not apply to establish or maintain over any routes rates less than 75 percent of rates between the more distant points computed on the short-haul scale for distances of 100 miles or less, or the standard scale for distances over 100 miles, on the basis of the distance over such routes.

The so-called "short-haul scale" is in effect throughout trunk-line territory, and there may be many other similar situations from origins located, intrastate or interstate, less than 100 miles from the many ports involved in this adjustment. The record is not convincing that in so general a revision as proposed, an exception should be made for short-haul traffic from Pennsylvania origins to the Pennsylvania ports only, and there is nothing in the record on which to base a general exception in connection with all short-haul traffic.

Under the limitations hereinafter prescribed instances may exist in which additional relief would be justified. Should such instances arise the matter may be directed to our attention.

Generally speaking, the ground for the relief sought here is to enable applicants to maintain the established grouping and differential system of rates on these commodities. From the evidence of record it plainly appears that applicants having circuitous routes such as the Pittsburgh and Lake Erie and the New York Central, could not participate in the traffic from the farther distant points on these routes without breaking down the group adjustment at intermediate points unless relief as sought herein is granted. In some instances where rates proposed for application from or to higher-rated intermediate points were not shown to be on a reasonable basis, the system of grouping under the McGraham formula, similar to that employed here, has not been recognized as a ground for relief free of the equidistant provision formerly a part of section 4. Scrap Iron and Steel from Virginia, 229 I. C. C. 67, and case therein cited. In others, where rates were either on bases prescribed or approved by this Commission, or proposed rates from or to higher-rated intermediate points were shown to be not unreasonable, such groups have been approved as ground for relief over short tariff routes. Fresh Meats, Central and Adjacent Territory to East, 258 I. C .C. 299.

Applicants have made a convincing showing on this record that the rates proposed, as applied over certain routes, are reasonably compensatory for the service performed; that the rates to be maintained at higher-rated intermediate points, which are on the same basis as those proposed from more distant points, are not unreasonable, and have presented a "special case" within the meaning of section 4 of the act which warrants granting the relief sought, subject to the conditions hereinafter imposed.

Applicants will be authorized to establish and maintain over their routes, for the transportation of manufactured iron and steel articles, pig iron and billets and related articles, and new iron and steel rails and cross ties, also other articles of iron and steel which may be added to the list of iron and steel articles on which the same basis of rates may be established, in carloads, from points in official territory named in supplements to tariffs listed in the applications, and intermediate points from which rates will be determined by use of an intermediate rule as authorized by rule 27 of the Commission's Tariff Circular 20, to north Atlantic ports named in the applications, for export, rates constructed on the bases and in the manner described herein, and to maintain higher rates from intermediate points; provided, that, (1) rates from higher-rated intermediate points included in the adjustment shall not exceed rates constructed on the bases and in the manner described in the applications, and (2) rates from other higher-rated

intermediate points shall not exceed rates determined by the use of an intermediate rule as authorized by rule 27 of the Commission's Tariff Circular 20, and (3) rates from any higher-rated intermediate points shall not exceed the lowest combination of rates subject to the Interstate Commerce Act; provided further, that the relief herein authorized shall not apply to rates over circuitous routes which exceed in length the longest route over which relief is concurrently authorized by fourth-section order No. 11946 as amended, entered in Iron and Steel Rates, supra, and fourth-section order No. 11955, entered in Iron and Steel in Central and Trunk Line Territories, supra, with respect to domestic commodity rates on iron and steel articles from and to the same points.

All other and further relief prayed by these applications as amended, will be denied.

An appropriate order will be entered.

274 I. C. O.

EX PARTE No. 162

INCREASED RAILWAY RATES, FARES, AND CHARGES, 1946

Ex PARTE No. 148

INCREASED RAILWAY RATES, FARES, AND CHARGES,

1942

Submitted November 10, 1947. Decided May 2, 1949

Findings in the report on further hearing, 266 I. C. C. 537, with respect to increases authorized in the rates on sulphur, in carloads, from Texas mines to Galveston, Tex., for movement beyond by water, further modified. Prior reports, 264 I. C. C. 695, 266 I. C. C. 537, 268 I. C. C. 169, 269 I. C. C. 418, and 273 I. C. C. 445.

James A. Gillen, Earle J. Zoll, Jr., and C. L. Butler for the rail carriers.

Robert N. Burchmore, Nuel D. Belnap, Stuart B. Bradley, and John H. Eisenhart, Jr., for barge lines.

FOURTH SUPPLEMENTAL REPORT OF THE COMMISSION

BY THE COMMISSION:

In our first supplemental report in these proceedings, 268 I. C. C. 169, we modified our findings and order so as to authorize an increase of 15 cents in lieu of 21 cents in the rates on sulphur, in carloads, from Texas mines to Galveston, Tex., for movement beyond by water. On May 5, 1947, upon further consideration of the record and upon consideration of the petition of the railroads filed April 1, 1947, requesting us to vacate our order of March 3, 1947, entered pursuant to our first supplemental report, we suspended the order of March 3, 1947, until our further order. We also assigned the petition of the railroads of April 1 for hearing. A hearing has been held on such petition.

In our report of December 5, 1946, 266 I. C. C. 537, in these proceedings, we authorized an increase in the rates on sulphur, in carloads, of 20 percent, subject to a maximum of 2 cents per 100 pounds, or 40 cents per net ton (equivalent to 45 cents per gross ton) "subject to the proviso that differentials of water-carrier rates, under rail rates as of June 30, 1946, shall be restored without reduction of the water-carrier rates, actual or as herein authorized."

Under this authority the all-rail as well as the all-water rates on sulphur from Port Sulphur, La., to northern destinations, such as Chicago, Ill., and Detroit, Mich., and Cleveland, Ohio, were increased 45 cents per gross ton.

The carload rate from Texas mines to Galveston for movement beyond by water, on June 30, 1946, was $1.07 per gross ton.

At Galveston the sulphur is unloaded by the shipper in stock piles. From these stock piles it is loaded into barges or vessels for export or coastwise movement. There is no through billing or arrangement for continuous carriage or shipment of sulphur beyond Galveston by water. In 1946, 51.9 percent of the total movement of sulphur from Galveston was for export; 21.1 percent of the total was by barge; and the balance moved by vessel to coastwise destinations. The Texas mines which are actually producing at the present time are Newgulf, Long Point, Orchard, Hoskins, and Clemens, Tex. The average short-line distance to Galveston is 69.8 miles.

Under the authority of our report of December 5, 1946, the rate of $1.07 from Texas mines to Galveston was increased 20 percent, and became $1.28, an increase of 21 cents. This rate from the five Texas producing points averages 6.2 percent of the contemporaneous firstclass rates. The rates on crude phosphate rock from these same points to Galveston averaged 11.8 percent, and the rates on fertilizer averaged 16 percent of the contemporaneous first-class rates.

The all-rail rates from the Texas mines on June 30, 1946, were $6.72 to Chicago and $7.84 to Detroit and Cleveland. The barge rates on the same date, from Galveston, were $5.43 to Chicago and $5.60 to Detroit and Cleveland. Thus the rail-barge rate to Chicago was $5.43 plus $1.07 or $6.50, which was 22 cents less than the all-rail rate, and $5.60 plus $1.07, or $6.67 to Detroit and Cleveland, which was $1.17 less than the all-rail rate. There are also certain switching charges in addition to the line-haul rates at Chicago, Detroit, and Cleveland in cases where a rail switch movement is necessary.

Following our report of December 5, 1946, in these proceedings, the all-rail rates from the Texas mines to the northern consuming points were increased 45 cents, the rail rate from the Texas mines to Galveston was increased 21 cents, the barge rates from Galveston to Chicago, Detroit, and Cleveland were increased 24 cents, and the switching charges, if any, at destination of the rail-barge shipments were increased 25 percent.

Following our first supplemental report in these proceedings, 268 I. C. C. 169, the rate from Texas mines to Galveston of $1.07 was in

1 Except as noted, rates are stated in amounts per gross ton.