No. 300441

MAGNESITE, GENERAL INCREASES

Submitted February 8, 1949. Decided June 6, 1949

Increases in the rates on magnesite, calcined or dead-burned, and brucite, crude, not dehydrated, in carloads, from, to, and between points in the United States, under consideration in No. 30044, and transcontinental rates and charges on these commodities under consideration in No. 30090, found not unreasonable or otherwise unlawful. Proceedings discontinued.

R. J. Hagman, Hallan Huffman, and George H. Muckley for respondent transcontinental lines.

Paul V. Miller, A. P. Donadio, Leo P. Day, and Richard T. Wilson, Jr., for lines in official territory.

R. Granville Curry, Frederick M. Dolan, and R. A. Ellison for shippers supporting respondents.

John A. Kirk, Jr., and William W. Collin, Jr., for protestant.

Harry S. Brown, W. M. Carney, and M. G. de Quevedo for intercoastal water carriers in opposition to respondents.

Ralph R. Schultz and T. H. Burgess for a shipper opposing respondents.

BY THE COMMISSION:

REPORT OF THE COMMISSION

These proceedings were heard on a consolidated record. We have heard the parties in oral argument.

The title proceeding is an investigation instituted by order dated August 20, 1948, as amended on September 17, and October 29, 1948, of division 2 on its own motion, to determine whether increases 2 in applicable line-haul rates for the transportation of magnesite, calcined or dead-burned, and brucite, crude, not dehydrated, in carloads, from, to, and between points in the United States, are reasonable and otherwise lawful. It was instituted pursuant to a request of the Standard Lime and Stone Company, a producer of magnesite at Manistee, Mich., and Millville, W. Va., for suspension and investigation of the

1 This report embraces also No. 30090, Magnesite and Brucite, Pacific Coast to Midwest. 2 As published in master Tariff of Increased Rates and Charges No. X-162 Agent Bohon's I. C. C. No. 773, and master Tariff of Increased Rates and Charges No. X-166 Agent Bohon's I. C. C. No. 787, as amended.

Rates stated herein are in amounts per ton of 2,000 pounds unless otherwise indicated. Costs, values, or prices per ton shown herein also are in amounts per ton of 2,000 pounds.

maximum increase of 6 cents per 100 pounds on magnesite, calcined or dead-burned, in carloads proposed by the carriers for the purpose of establishing the general increases as authorized by us on July 27, 1948. The request for suspension was denied. Dead-burned magnesite is magnesite that has been heated to a high degree of temperature. The difference between dead-burned magnesite and calcined magnesite results from the degree of burning in the kiln, the latter not being burned so hard at such a high temperature as the former. The proceeding in No. 30090 is an investigation instituted by order, dated October 29, 1948, of division 2, on its own motion, to determine whether the rates and charges and the rules, regulations, and practices affecting such rates and charges applicable to the transportation of magnesite, crude, calcined or dead-burned and brucite (magnesium ore), in carloads, from north and south Pacific coast origins to points in transcontinental rate groups C-1, D to J inclusive and N, are reasonable and otherwise lawful.“

Effective November 1, 1948, respondent transcontinental railroads, established reduced rates on magnesite, crude, calcined or dead-burned, in carloads, from north and south Pacific coast origins to points taking transcontinental rate groups C-1, D to J inclusive and N. When these rates were proposed protest was filed by Standard Lime and Stone Company, hereinafter referred to as protestant. Upon representations of western shippers, Northwest Magnesite Company, HarbisonWalker Refractories Company, Westvaco Chemical Division of Food Machinery and Chemical Corporation, and E. J. Lavino and Company, supporting respondent transcontinental lines, that the adjustment was necessary to restore the differential relations between the rates from the western producing points and those from eastern producing points to the various consuming points existing prior to June 30, 1946, division 2 declined to suspend operation of the schedules and instituted the investigation in No. 30090.

The Armco Steel Corporation entered an appearance in support of the rates in effect when the hearing was held, but submitted no evidence.

The only movement of brucite shown of record is that by the Basic Refractories, Inc., hereinafter referred to as Basic Refractories, from its mine near Luning, Nev., to its plant at Narlo, Ohio.

Members of the Intercoastal Steamship Freight Association, are interested in the transcontinental rates on magnesite. They oppose in

Published in item Nos. 5456-B of supplement Nos. 131 and 83 to Agent Kipp's I. C. C. Nos. 1519 and 1527, respectively.

Chewelah is on a branch line of the Great Northern Railway Company approximately 64 miles north of Spokane, Wash., and 400 miles inland from Seattle, Wash. Newark and Salinas are approximately 31 and 114 miles, respectively, south of San Francisco, Calif., on the lines of the Southern Pacific Company.

As noted above, production of dead-burned magnesite at Chewelah began in 1916. Soon after the end of World War I, importation of this commodity was resumed from such countries as Austria, Hungary, Czechoslovakia, and Manchuria. In 1921 shipments from Chewelah dropped to 3,140 tons from 94,396 tons shipped the year before. In 1922 the plant was completely closed down, because of its inability to compete with the duty-free and superior imported product. Two or three years later a duty of $11.50 per ton was established, after which operations were resumed. This tariff, however, did not prevent the importation of magnesite from Europe as the Chewelah product is not as suitable for the manufacture of magnesite brick as the Austrian product. With the advent of World War II and the consequent pressure for increased steel production together with cessation of imports, Northwestern was urged to and did increase the Chewelah capacity and quality. It also built, at the request of the United States Government, the Cape May plant.

Refractory materials are used principally in the construction of open hearth and metallurgical furnaces. The hearth, comprising the bottom and banks of a furnace, is built up from the steel pan with a course or two of insulating brick or a pad of insulating concrete containing calcined diatomaceous earth as an aggregate. Next may be one or more courses of fire clay brick to afford further resistance to the loss of heat. Above is the subhearth built with burned basic brick selected according to the preference of the furnace operator. Because of their durability hard-burned magnesite bricks are generally preferred. The bricks are then, ordinarily, covered to a depth of from 12 to 22 inches with dead-burned grain magnesite in successive layers and subjected to intense heat treatment to form a smooth monolithic saucer, prepared to receive the heat of molten steel. This so-called saucer or bottom is subjected to extremely rough, corrosive and deteriorating treatment, and must be maintained by additions of deadburned magnesite or other refractory materials.

Dead-burned magnesite is a basic refractory material which is used in brick form largely to line the bottoms and sides of basic open hearth steel and other metallurgical furnaces, and in grain form to maintain these furnaces by providing a protective covering for the refractory brick, principally on the furnace bottom. The product

Production at Painesville did not begin until the year 1948. The volume of production at Narlo is not shown of record. At the ratio of 2 carloads of dead-burned magnesite to 3 carloads of the in-bound movement of brucite rock in 1947 it would have been equivalent to approximately 257 carloads. Production at Chewelah, Millville, Cape May, Manistee, and Painesville began in the years 1916, 1939, 1942, 1945, and 1948, respectively. There is no definite showing as to when production began at the other points.

Chewelah's production, as indicated by the above tabulation, is larger than the combined production at the rest of the points named. It is the only point producing dead-burned magnesite from crude magnesite ore (magnesium carbonate), the only known natural deposit in this country. Production at the other points is by use of substitute materials. The product from those points is generally referred to as synthetic dead-burned magnesite. The United States Bureau of Mines Mineral Year Book 1947 shows total domestic production of dead-burned magnesite, the production at Chewelah and the production at all other points in that year as approximately 315,000, 151,000, and 164,000 tons, respectively.

Only Newark, of the points named, produces both dead-burned and calcined magnesite, the production at the other points being confined to the former product. The production at that point is divided approximately 60 percent of dead-burned and 40 percent of calcined. The producer at Chewelah and Cape May, hereinafter referred to as Northwest, is owned, 60 percent, by Harbison-Walker Refractories Company and, 40 percent, by General Refractories Company. About 40 percent of Northwest's production is purchased by the owners and the rest is shipped direct to the steel industry. They operate manufacturing plants accessible to the several steel-producing centers, in the East and South, at which basic refractory brick and other refractory materials are manufactured. E. J. Lavino and Company, supporting respondents, has a plant at Plymouth Meeting, Pa., where it also manufactures basic brick and refractory materials.

Chewelah is on a branch line of the Great Northern Railway Company approximately 64 miles north of Spokane, Wash., and 400 miles inland from Seattle, Wash. Newark and Salinas are approximately 31 and 114 miles, respectively, south of San Francisco, Calif., on the lines of the Southern Pacific Company.

As noted above, production of dead-burned magnesite at Chewelah began in 1916. Soon after the end of World War I, importation of this commodity was resumed from such countries as Austria, Hungary, Czechoslovakia, and Manchuria. In 1921 shipments from Chewelah dropped to 3,140 tons from 94,396 tons shipped the year before. In 1922 the plant was completely closed down, because of its inability to compete with the duty-free and superior imported product. Two or three years later a duty of $11.50 per ton was established, after which operations were resumed. This tariff, however, did not prevent the importation of magnesite from Europe as the Chewelah product is not as suitable for the manufacture of magnesite brick as the Austrian product. With the advent of World War II and the consequent pressure for increased steel production together with cessation of imports, Northwestern was urged to and did increase the Chewelah capacity and quality. It also built, at the request of the United States Government, the Cape May plant.

Refractory materials are used principally in the construction of open hearth and metallurgical furnaces. The hearth, comprising the bottom and banks of a furnace, is built up from the steel pan with a course or two of insulating brick or a pad of insulating concrete containing calcined diatomaceous earth as an aggregate. Next may be one or more courses of fire clay brick to afford further resistance to the loss of heat. Above is the subhearth built with burned basic brick selected according to the preference of the furnace operator. Because of their durability hard-burned magnesite bricks are generally preferred. The bricks are then, ordinarily, covered to a depth of from 12 to 22 inches with dead-burned grain magnesite in successive layers and subjected to intense heat treatment to form a smooth monolithic saucer, prepared to receive the heat of molten steel. This so-called saucer or bottom is subjected to extremely rough, corrosive and deteriorating treatment, and must be maintained by additions of deadburned magnesite or other refractory materials.

Dead-burned magnesite is a basic refractory material which is used in brick form largely to line the bottoms and sides of basic open hearth steel and other metallurgical furnaces, and in grain form to maintain these furnaces by providing a protective covering for the refractory brick, principally on the furnace bottom. The product