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We find that the rates charged were applicable, but that they were unreasonable to the extent that they exceeded rates of 13 cents from Swisshome, 8 cents from Broadbent, and 11 cents from Lowell, Chitwood, Toledo, Bear Creek, and Rowland, minimum 70,000 pounds; that complainant made shipments as described, and paid and bore the freight charges thereon at the rates herein found unreasonable; that it was damaged thereby in the amount of the difference between the charges collected and those which have accrued at the rates herein found reasonable; and that it is entitled to reparation, with interest. Complainant should comply with the provisions of rule 100 of the Commission's General Rules of Practice.

274 I. C. C.

No. 29845

INCREASES IN ALABAMA FREIGHT RATES AND

CHARGES

Submitted June 1, 1949. Decided July 11, 1949

Intrastate freight rates and charges in Alabama found to cause unjust discrimination against interstate commerce, undue preference of and advantage to persons and localities in intrastate commerce, and undue prejudice and disadvantage to persons and localities in interstate commerce. Edward D. Mohr, A. J. Dixon, J. Carter Fort, Jr., Y. D. Lott, Jr., A. J. Baumann, Charles Clark, J. E. Gilliland, F. W. Gwathmey, M. T. Hastings, J. Edgar Nash, W. A. Northcutt, C. A. Pace, Oscar P. Wieland, and E. J. Zoll, Jr., for respondents.

A. E. Funk, M. B. Holifield, and J. E. Marks for Railroad Commission of Kentucky, in behalf of respondents.

B. M. Angell, Alonzo Bennett, C. L. Denk, Jr., H. J. Fagot, Edward B. McKinney, William M. Maddox, J. E. Marks, Charles A. Moultis, and Louis A. Schwartz for various shippers and other interests supporting respondents.

A. A. Carmichael, Silas C. Garrett III, MacDonald Gallion, Gordon Persons, Jimmy Hitchcock, C. C. Owen, Norwood Johnson, and John G. Bruce for the State of Alabama and Alabama Public Service Commission, protestants.

Frederick E. Brown, G. P. Cochran, G. H. Farmer, C. Eugene Fowler, Wilbur LaRoe, Jr., G. T. Mitchell, Samuel H. Moerman, A. M. Ribe, W. H. Ritchie, C. W. Thompson, V. L. Turner, Arthur L. Winn, Jr., and Vincent T. Zwinak for numerous shippers, protestants. T. M. Bierdeman, James E. Burkett, L. M. Cutcliff, and H. A. Kennedy for other parties.

BY THE COMMISSION:

REPORT OF THE COMMISSION

Exceptions to the examiner's proposed report were filed by the Alabama State authorities and by certain shippers, to which respondents and several shippers replied. The issues have been argued before us. Exceptions and requested findings not discussed in this report nor reflected in our findings or conclusions have been given consideration and found not justified.

This proceeding is an investigation under section 13 of the Interstate Commerce Act concerning the lawfulness of Alabama intrastate freight rates and charges.1 Responsive to a petition, as amended, filed by railroads serving Alabama, we entered upon this investigation for the purpose of determining whether the rates and charges of the common carriers by railroad operating in Alabama, or any of them, for the intrastate transportation of property, made or imposed by authority of the State of Alabama, cause any undue or unreasonable advantage, preference, or prejudice as between persons or localities in intrastate commerce, on the one hand, and interstate or foreign commerce, on the other, or any undue, unreasonable, or unjust discrimination against interstate or foreign commerce, and, if so, what rates and charges, or what maximum or minimum, or maximum and minimum, rates and charges shall be prescribed to remove any unlawfulness found to exist.

All carriers by railroad operating in Alabama which are subject to our jurisdiction were made respondents. Copies of the order of investigation and notice of hearing were served upon each of them and upon the State of Alabama.

In Increased Railway Rates, Fares, and Charges, 1946, 266 I. C. C. 537, decided December 5, 1946, herein referred to as Ex Parte No. 162, we authorized general increases in the interstate freight rates and charges, with few exceptions, of carriers subject to part I of the Interstate Commerce Act, of 25 percent in official territory, 20 percent in and between other territories, and 222 percent between official territory and other territories, subject to certain maximum amounts on particular commodities and to specified flat increases, later herein referred to where pertinent, on others. The resulting rates as thus increased effective January 1, 1947, were found to be just and reasonable. On class rates, this authorization was subsequently modified so as to authorize a uniform increase of 2212 percent in all class rates (not including rates based on classification exception ratings) affected by our decision in Class Rate Investigation, 1939, 262 I. C. C. 447, 264 I. C. C. 41, hereinafter called the class rate investigation. See Class Rate Investigation, 1939, 268 I. C. C. 577. The interstate rates as thus revised became effective August 22, 1947.

1 Rates and charges are stated in amounts per 100 pounds, except as otherwise indicated. They do not include general increases authorized subsequent to Ex Parte No. 162, and as such, will be referred to herein as the present rates.

The principal respondents include the Atlantic Coast Line Railroad Company, Central of Georgia Railway Company, Gulf, Mobile and Ohio Railroad Company, Illinois Central Railroad Company, Louisville and Nashville Railroad Company, Seaboard Air Line Railway Company, and Southern Railway Company. These carriers will be referred to by their short titles.

In a report of June 20, 1946, in Ex Parte No. 162 and a companion proceeding, 264 I. C. C. 695, we had authorized certain interim increases in interstate rates and charges, generally 6 percent in southern territory, which became effective July 1, 1946. Following this interim authorization, respondents sought authority from the Alabama Public Service Commission to make corresponding increases on intrastate traffic. On September 5, 1946, such authority was granted by that commission, except that no increase was granted on coal to be coked and reshipped under transit arrangements or on scrap iron; an increase of only 3 percent was approved on coal cinders, cottonseed, peanut and vegetable oils, paving or road-surfacing material, and grain and grain products in less than carloads; and an increase of only 6 percent was approved in rates on coal stated in amounts per car, as compared with graduated increases of from 15 to 30 cents per ton, as will later appear, authorized in Ex Parte No. 162.

On December 21, 1946, respondents filed with the Alabama commission a further petition seeking additional increases in the intrastate freight rates and charges corresponding in all respects to those approved in the Ex Parte No. 162 report of December 5, 1946. However, at the hearing on April 2, 1947, respondents amended that petition by limiting their request on road aggregates (sand, gravel, crushed stone, slag, and other commodities listed in the so-called road-aggregates tariff); furnace raw materials, including coal, coke, iron ore, sinter, flue dust, and fluxing stone; and coal to coke ovens for coking and reshipment under transit arrangements, to increases of 20 percent, subject to a maximum of 15 cents a ton, except that on iron ore the maximum proposed was 12 cents a ton, in lieu of flat increases of 12 cents a ton on iron ore and 15 cents a ton on the other commodities as authorized in Ex Parte No. 162. On November 13, 1947, the Alabama commission denied respondents' amended petition, on the ground that evidence had not been furnished which would enable it to enter a valid order pursuant to the provisions of title 48, section 52, of the 1940 Alabama Code. With the foregoing exceptions, respondents are here seeking increases in Alabama intrastate rates and charges corresponding to those authorized in Ex Parte No. 162.

Subsequent to the increases as approved in Ex Parte No. 162, additional increases in the interstate rates and charges were authorized. In Increased Freight Rates, 1947, 270 I. C. C. 403 (July 27, 1948), referred to as Ex Parte No. 166, we authorized increases of 30 percent in official territory, 25 percent in southern territory and in western trunk-line zone I, 20 percent in the remainder of western territory, 25 percent interterritorially between southern and western territories and be

tween those territories, on the one hand, and official territory, on the other, and 222 percent between western territory other than western trunk-line zone I, and the latter zone, subject to maximum amounts on particular commodities and to flat increases on others. These increases became effective August 21, 1948. In Ex Parte No. 168, Increased Freight Rates, 1948, 272 I. C. C. 695 (December 29, 1948), interim increases of 6 percent in and between official and southern territories, 5 percent in western trunk-line zone I, 4 percent in the remainder of western territory, and 5 percent interterritorially other than between official and southern territories, with certain exceptions, were authorized, which became effective January 11, 1949. Applications for further increases are pending before us. Respondents' petition, and the evidence of record, with few exceptions, deal solely with rates and charges prior to the Ex Parte No. 166 increases. sideration and findings, therefore, will be limited accordingly. Excepting a portion of the Ex Parte No. 162 increases as indicated, none of the foregoing general increases has been made effective on Alabama intrastate traffic. In the instant petition, speaking generally, respondents seek the remainder of the Ex Parte No. 162 increases, approximating 13.7 percent. They estimate that the annual revenue thus lost to them on Alabama intrastate traffic approximates $1,828,000. About 85 percent of the revenue received by respondents for transporting freight in Alabama is derived from interstate traffic and about 15 percent from intrastate traffic.

Our con

We now come to a discussion of the evidence relating, first, to the class-rate traffic, and second, to traffic moving at commodity rates.

CLASS RATES

Prior to Southern Class Rate Investigation, 100 I. C. C. 513, and supplemental reports, many inconsistencies were reflected in the class rates throughout southern territory. In that proceeding, transportation conditions were found to warrant the establishment of a uniform basis of maximum reasonable class rates for all so-called standard railroads throughout that territory, except between points in Virginia and points in North Carolina and except to and from points in the Florida peninsula. Through cooperation between the various State regulatory bodies and this Commission, rates on the uniform basis prescribed in that proceeding were established for both interstate

On April 11, 1949, respondents filed with us a motion seeking an interim order herein in accord with the findings recommended in the proposed report, and asking that a further hearing be held in this proceeding on broadened issues embracing the propriety of adding the Ex Parte No. 166 increases to the Alabama intrastate rates. That motion was overruled on May 2, 1949.

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