THOMAS J. REYNOLDS,

vs.

WESTERN NEW YORK AND PENNSYLVANIA RAILWAY CO. AND G. CLINTON GARDNER, RECEIVER OF THE BUFFALO, NEW YORK AND PHILADELPHIA RAIROAD Co.

Tried December 7, 1887; decided January 13, 1888.

Classification of railroad ties should correspond with that of other rough lumber. Raising of same from sixth to fifth class unjustifiable. Rates established by a common carrier in order to keep upon its line material for which the road has use, or to keep the price low for its own advantage, cannot be justified.

Producer of railroad material is entitled to sell it when he wishes, in the best available market. Common carriers are forbidden to attempt to prevent this by applying disproportionate or unreasonable rates. Special classification of lumber should be extended to railroad ties at the points in question.

E. A. Nash, for complainant.

Geo. Zabriskie, for defendant.

REPORT AND OPINION OF THE COMMISSION.

WALKER, Commissioner:

Complaint of alleged unreasonable and unjust charges for the transportation of railroad ties. The answer asserts that the charges complained of are reasonable and just.

The following facts are found from the proofs :

The railroad in question extends from Rochester, N. Y., Bouthwesterly through Olean and Salamanca into the State of Pennsylvania. It connects at Rochester with the New York Central and the West Shore railroads, at Olean with the Delaware, Lackawanna and Western, and at Salamanca with the New York, Lake Erie and Western. It was formerly owned and operated by the Buffalo, New York and Philadelphia Railroad Company. In actions brought in the United States courts of New York and Pennsylvania to foreclose a mortgage upon the property of that company, G. Clinton Gardner was appointed receiver May 20, 1885, ard has since operated the property of said company as such re

ceiver. A new company has recently been organized under the foreclosure, entitled the Western New York and Pennsylvania Railway Company. It is expected that said receiver will surrender possession to the latter company about January 1, 1888. The last-named company and said receiver are the parties defendant in this proceeding.

Complainant is a manufacturer of lumber in the State of Pennsylvania, having an office at Rochester, N. Y. He owns several thousand acres of timber land near the line of said railroad, in the vicinity of Corydon, Pa.

Corydon is distant 20 miles from Salamanca, 39 miles from Olean, and 147 miles from Rochester.

For several years complainant has been engaged in manufacturing lumber in Northern Pennsylvania upon the line of said railroad and of the Buffalo, Rochester and Pittsburgh railroad, most of which has found a market in the State of New York. Much of his timber is oak, of which the trunks are sawn into squared lumber and boards, and the smaller trees, pieces, and large branches manufactured into railroad ties, both sawn and hewn. He also manufactures ties to some extent from chestnut and hemlock. The purchasers of his ties have been the railroad companies above named, and other roads reached over said intersecting lines through Salamanca, Olean, and Rochester.

Prior to June 15, 1887, the classification in use upon this road, as well as upon other roads in the vicinity, nominally placed lumber in the sixth class, in which railroad ties were included, though not specially named. Lumber, however, being an article of merchandise of considerable bulk in proportion to its value and in respect to which keen competition is met among producers, has for a long time been specially treated, forming practically a class by itself, and receiving very low and special rates; and this practice continues to the present time.

Upon this road lumber and ties were formerly shipped for complainant at identical rates. About February, 1886, the price charged for transportation of ties was greatly increased, so that complainant ceased their shipment for a time. Upon the taking effect of the Act to regulate commerce the charges

upon ties and the method of collecting the same were so adjusted that his manufacture and shipment thereof were resumed. On July 15, 1887, what is known as the "official classification No. 2" became operative, and was adopted by the defendant in common with the other roads north of the Ohio and east of the Mississippi. In this classification lumber in car-load lots is in class 6; in less than car-load lots, class four. Railroad ties in car-load lots are in class five; in less than car-load lots, class four. It was the only form of rough lumber which was raised to class five in car-loads.

Defendant has continuously maintained its low special rate upon lumber without regard to its being classified in the sixth class, but insists upon the regular fifth-class tariff rate for railroad ties. There have existed some other apparent irregularities which have presented themselves to complainant's mind as matters of grievance, arising in part from the fact that special rates were given him prior to the enactment of the Act to regulate commerce, in part from a misunderstanding about pre-payment of freight, and in part from the fact that after the act became operative the agents of the railroad company at points of shipment failed to conform to the instructions furnished them in respect to ascertaining actual weights, but at times allowed complainant to load cars very heavily, paying only the price of twelve tons, in respect both to lumber and ties. This irregularity was first corrected as to ties, while allowed to continue for a time in regard to lumber. The defendant's rule in this respect has not been consistently enforced, but the reasonableness of the rule, involving the propriety of charging for actual weight in all cases, is not seriously contested.

The results of the tariffs now enforced by defendant from Corydon are as follows:

Oak

A switching charge of $1.13 per car is made at Salamanca upon all cars delivered to the Erie road by defendant. ties weigh about 200 pounds each.

The special rates made by defendant on lumber, as shown by its tariffs on file in the office of the Commission, include rough timber, boards, staves, headings, hoop poles, hoops, shooks, hemlock bark, lath, shingles, cordwood, and piling.

Prior to the adoption of the official classification No. 2, July 15, 1887, the special rate upon lumber was treated by railroad companies as including ties. So far as the proof before us shows, this was general, except in the case of this defendant; which, as above stated, about February, 1886, refused to treat ties as included in the special lumber class, and exacted regular sixth class rates, afterwards raised to fifth class; the reason given by the general superintendent therefor being that he "didn't want the ties to go off from the the road."

Upon these facts the case presents two questions:

First. Is the distinction in the "official classification No. 2" just and reasonable, by which railroad ties are placed in class five and other lumber in class six?

Second. Is it just and reasonable that defendant should exclude ties from the low special rate charged upon coarse lumber in other forms.

No suggestion was made upon the hearing of any sound reason by which the raising of ties to the fifth class in the new classification can be justified. Defendant's general freight agent endeavored to make out a case of greater cost by saying that "tie shipments are less in quantity and require switching for single cars, whereas in the case of lumber we switch a large number of cars together." This statement is not at all convincing, in view of the fact that defendant has from six to seven thousand ties now awaiting shipment, and in August last had from forty to fifty men engaged in their manufacture. Lumber shipments from a mountain siding are not often made by the train-load, and no special reason appears in the evidence why tie shipments are not likely to be as large per day as lumber shipments. Ties are

purchased by railroad companies who use them in large quantities. They are shipped by manufacturers, who in that way use up material not adapted to the manufacture of lumber; the product must quite nearly approximate the lumber product from oak timber, taking the growth, small and large. Complainant testifies that his tie product considerably exceeds his lumber product on the same acreage.

Defendant's general freight agent further said that he "could think of nothing else that would make any difference in the cost of hauling a given number of cars of ties as compared with an equal number of cars of lumber." The distinction cannot be sustained on the ground of greater cost of movement, for no such greater cost is established.'

An examination of said official classification No. 2 shows that other coarse products of the forest are placed in class six, viz., boards, timber, box-stuff, hoop poles, lath, logs, piles, shingles, staves, telegraph poles, wood pulp, and empty boxes. Railroad ties from oak timber, which cost for sawing or hewing about 25 cents each, or $2.50 per ton, are no more expensive to manufacture than the above articles; there is no special risk attending their transportation; their value is less per ton than that of most of the articles above enumerated; they naturally arrange themselves with the articles placed in class six.

On the contrary, class five, as now constituted in the official classification, contains a line of articles which do not at all correspond with railroad ties in the characteristics which influence classification. The following list enumerates the various articles manufactured from wood, found in class five, in car-loads: Axles, balusters, stair rails and other turned work, barrel covers, patent fruit barrels, base-ball bats, brush blocks, butchers' blocks, ironing boards, ox bows, telegraph brackets in bags or boxed, bread boards in boxes or crates, bridge material, broom handles, buckets nested, bungs or plugs, butter ladles, molds and plates, churns, cigar-box lumber, curtain rollers and slats, dye-woods in boxes or barrels, excelsior in bales, wooden fence in sections, blind frames, chair-stuff, table leaves, legs, etc., boxed or racked, wooden gates, horse-pokes, step-ladders, last-blocks, meas