small country elevators and feed mills at points in Ohio and southern Michigan. These concerns seldom employ expert rate and routing clerks, which protestants believe may be necessary if specific routing is to be maintained. Protestants contend that this routing will restrict unduly the markets at which their members may sell grain or grain products.

The position and evidence of Urbana Mills, Lyon & Greenleaf Milling Company, Richards Milling Company, Ohio Farmers Grain Dealers Association, and Ohio Grain Mill & Feed Dealers Association, collectively, are similar in many respects to those of other protestants. Discussion of their presentations in detail therefore need not be made.

Miscellaneous matters.-Certain routes set forth in tariff 535-B, and in the schedules suspended in I. and S. No. 5358, are inoperative as to specified traffic by reason of general provisions to which the tariffs are subject. For example, rule 200 of the Baltimore & Ohio tariff provides as follows:

Non-Application of Routes To and From Junction Points with Connecting Lines

Rule 200.-Wherever a route is shown herein from an origin point or to a destination point which is a junction point, through which the route is shown, said route will not apply from such origin point or to such destination point.

Application of the rule may be illustrated by selecting Springfield, Ill., as the origin and points on the line of the Norfolk & Western, Chillicothe, Ohio, and north thereof through Circleville to a point just south of Columbus, Ohio, as destinations. Routing ostensibly provided for this traffic is B. & O., Chillicothe, N. & W. Rule 200 excludes Chillicothe as a destination in connection with this route, since it is the indicated junction between the Baltimore & Ohio and the Norfolk & Western.

Protestant John W. Eshelman & Sons, whose plant at Washington Court House is on the tracks of the Pennsylvania, believes that application of rule 200, in certain instances, would result in the assessment of combination rates on traffic from Illinois origins on the Baltimore & Ohio. For the movement of grain originating at Chrisman, Ill., for example, on the Baltimore & Ohio and destined to Washington Court House on the Pennsylvania, two routes are published in the tariff for apparent application thereto, one of which is B. & O., Cincinnati, P. R. R., and the other B. & O., Washington Court House, P. R. R. There are no pertinent restrictions affecting the first-mentioned route. If the Baltimore & Ohio handles the shipments through to Washington Court House and turns it over to the Pennsylvania at the latter point, for local delivery, rule 200 comes into operation. The

applicable rate would be that of the Baltimore & Ohio to Washington Court House plus a switching charge of the Pennsylvania if there were no provision for the absorption of this charge by the Baltimore & Ohio. The Baltimore & Ohio and other carriers generally provide for the absorption of switching charges in such situations.

Pages 153 to 169 of tariff 535-B contain rates, under the general heading "miscellaneous rates," applicable to certain grain and grain products from the gateways. These rates are not subject to specific routing as are those shown elsewhere in the tariff, as amended. Protestant John W. Eshelman & Sons questions the priority of open routing in connection with these "miscellaneous rates," while the rates on most of its traffic to and from Circleville and Washington Court House are subject to the specific routing shown in the tariff. Respondents offer no explanation.

Whether maintenance of arrangements for transit 2 is in issue is a matter of considerable speculation among the parties. The purpose of the demands for additional routes is to make them available for transit operators. The issues concern transited traffic. Granting or withholding a transit arrangement has been held to be local to the carrier serving the transit point. Central R. Co. of New Jersey v. United States, 257 U. S. 247. In a great many instances routing through transit points is controlled by the carriers serving the transit points. Undue prejudice can result from the refusal of carriers to join in additional routes through transit points on other carriers. Beacon Milling Co., Inc., v. Akron, C. & Y. Ry. Co., 263 I. C. C. 143, and Richards Milling Co. v. Erie R. Co., 268 I. C. C. 237.

The last-named protestant advances the contention that circuity of routes may be controlled in a workable manner by appropriate routing restrictions in the transit tariffs. Such provisions, it urges, would eliminate the necessity for specific routing, which the carriers claim is necessary to control, within reason, the circuity which exists under open routing. Reference is made to the Pennsylvania transit tariff, I. C. C. No. 2500, as an example of schedules which are published in this manner. Protestant's shipments have been subject to the application of this tariff for many years. It asserts that during that time it has not employed unduly circuitous routes on traffic which has moved pursuant thereto. The tariff contains various provisions gov

"Grain transit may be defined as the unloading and passing through elevators and mills of carload shipments of grain or grain products for storage and other purposes connected with marketing and manufacturing and the forwarding of the grain or its products to destinations beyond the transit point. See Northern Milling Co. v. Chicago & N. W. Ry. Co., 246 I. C. C. 499. The parties in the present proceeding define transit in essentially the same manner.

erning grain transited at Circleville, most of which provide that the Pennsylvania must receive both an in-bound and an out-bound haul. But, for the most part, it fails to specify routes over which traffic must reach or move beyond a junction with the Pennsylvania, and, consequently, does not limit the circuity of movement.

Short hauling, circuity and rates justified.-Our power to short haul carriers participating in routes through transit points is questioned by respondents. Protestants urge, among other things, that the peculiar needs of the grain industry and the inherent nature of the grain traffic require special consideration, and that the facts of record are sufficient to support the conclusion that the carriers should be required to establish reasonable routes needed by the shippers despite any short hauling of participating carriers in routes through transit points.

A comprehensive historical review dealing with the Commission's authority to prescribe through routes and joint rates, and its power to require short hauling, is included in Pennsylvania R. Co. v. United States, 54 Fed. Supp. 381. For the purposes of this proceeding it is sufficient to state that in 1940 the act was amended materially as to the power of the Commission to prescribe routes which short haul a railroad without its consent. The pertinent provisions of the act, now in effect, are found in section 15 (3) and (4), reading in part as follows:

(3) The Commission may, and it shall whenever deemed by it to be necessary or desirable in the public interest, after full hearing upon complaint or upon its own initiative without complaint, establish through routes, joint classifications, and joint rates, fares, or charges, applicable to the transportation of passengers or property by carriers subject to this part * * and the terms and conditions under which such through routes shall be operated.

*

(4) In establishing any such through route the Commission shall not (except as provided in section 3, and except where one of the carriers is a water line) require any carrier by railroad, without its consent, to embrace in such route substantially less than the entire length of its railroad and of any intermediate railroad operated in conjunction and under a common management or control therewith, which lies between the termini of such proposed through route, (a) unless such inclusion of lines would make the through route unreasonably long as compared with another practicable through route which could otherwise be established, or (b) unless the Commission finds that the through route proposed to be established is needed in order to provide adequate, and more efficient or more economic, transportation: Provided, however, That in prescribing through routes the Commission shall, so far as is consistent with the public interest, and subject to the foregoing limitations in clauses (a) and (b), give reasonable preference to the carrier by railroad which originates the traffic. No through route and joint rates applicable thereto shall be established by the Commission for the purpose of assisting any carrier that would participate therein to meet its financial needs.

Thus, we must require the establishment of through routes if we deem them necessary or desirable in the public interest, subject to the limitation which prohibits us, with exceptions, from requiring short hauling. The more important exception provides that a carrier may be short hauled if we find "that the through route proposed to be established is needed in order to provide adequate, and more efficient or more economic, transportation."

The Commission's power under section 15 (3) and (4) of the act was exercised in D. A. Stickell & Sons, Inc., v. Alton R. Co., 255 I. C. C. 333. Complainant in that proceeding sought routes which would short haul one of the carriers participating in the through movement. Based upon findings that the proposed routes are necessary in the public interest and that they are needed to provide adequate and more efficient and more economic transportation, division 2 entered an order requiring their establishment. The question of the validity of the order was taken to the courts. The railroads contended that the expression "adequate, and more effiecient or more economic, transportation" relates to carrier operations and expense and has no reference to the broader public interest which embraces service to shippers and the rates they pay. The division had taken the view that the phrase comprehends adequacy of service, its cost to the shipper, and the convenience, efficiency, and cost of the carriers' operations. Upon appeal from a decree of the District Court of the United States for the District of Maryland, sustaining the order, the Supreme Court of the United States, in affirming that decree, Pennsylvania R. Co. v. United States, 323 U. S. 588, said, at pages 592-593:

33

It is conceivable that the Commission might refuse to establish many through routes as not required in the public interest where short hauling is not involved. On the other hand, if the Commission is asked to abrogate the general rule with regard to the short-haul, the statute says it must have regard to several matters. The first of these is adequacy of transportation. The expression would seem to apply only to the interest of the shipping public. The second and third matters to be considered are efficient and economic transportation. These expressions may well embrace both shippers' and carriers' interests. Congress had a purpose in amending the provision, and we think the Commission was not in error in construing the language used as evincing an intent that both intrests should be considered and a fair balance found.

In the movement of transited grain traffic through competing transit points, routing problems arise that are not involved in transportation generally and determination of a "fair balance" upon consideration of the interests of both carriers and shippers requires careful considera

Pennsylvania R. Co. v. United States, supra.

tion of the needs of transit operators in the marketing of their products in competition with other transit operators. Shipments to transit points generally are independent shipments that are not then definitely connected with movements from the transit point. The in-bound shipments or a portion thereof may be disposed of locally at the transit point. Unless a special showing is made to the contrary under the provisions of section 15 (4) of the act, carriers are entitled to their long hauls in the maintenance of routes for shipments to the transit points, for shipments from the transit points, and also for other continous movements. The maintenance of single-factor rates only over routes giving carriers their long hauls on transited traffic through transit points, and the maintenance of combination rates over other routes through transit points, is shown to affect seriously the interests of transit operators in the latter routes by the resulting restriction of the territory in which they can market their products. Routes through transit points within a reasonable limit of circuity, that may short haul carriers but that are required to give transit operators an opportunity to compete at destinations on such routes, are desirable in the public interest and are needed in order to provide adequate and more economic transportation. We are of the opinion, however, that there is justification (1) for the use of not more than three segments of line-haul carriers 34 in the formation of routes, considering the lengths of the hauls, (2) for the prescription, as maxima, in connection with routes within the circuity limitation hereinafter prescribed, of rates not lower than those from origins to transit points or from transit points to destinations where such rates are higher than those from origins to destinations over the direct routes, and (3) for the maintenance of higher rates for services over routes of greater circuity that may be desired by transit operators.

In Allied Mills, Inc., of Virginia v. Alton R. Co., 272 I. C. C. 49, decided by division 2,35 combination rates on grain, in carloads, from certain points in Ohio, Indiana, and Illinois and on the Mississippi Rver in Iowa and Missouri to Portsmouth, Va., there manufactured into animal and poultry feed and reforwarded, in carloads, to destinations on the Del-Mar-Va peninsula in Virginia, Maryland, and Delaware, were alleged to be unreasonable and unduly prejudicial. The division said at page 60:

The facts of record establish that the present routes are not adequate to permit complainant to reach markets reasonably available to it and that the routes sought are necessary to enable it to ship feed to the peninsula area. As to

"Maintenance of rates over three-line routes was approved in Richards Milling Co. v. Erie R. Co., supra.

35 The Commission denied defendants' petition for reopening of that proceeding.