No. MC-C-282 is an investigation, instituted on our own motion, into and concerning the lawfulness of the rates, the charges, and the rules, regulations, and practices relating thereto, applicable to the transportation of boots and shoes to points in California, Oregon, and Washington, maintained (a) from Philadelphia, Pa., and Baltimore, Md., by the bureau carriers, and (b) from Boston, Hartford, New York, Philadelphia, and Baltimore by Consolidated Freightways, Inc., and motor common carriers parties to its tariff MF-I. C. C. No. 13 (Consolidated Freight Line series), hereinafter referred to as Consolidated carriers unless otherwise stated. The rail carriers operating in western trunk-line territory appeared in opposition to the proposed rates in the title proceeding and as interested parties in No. MC-C-282.

The two proceedings present related issues, were heard together, were made the subject of a single recommended report and order by the examiner, and will be considered together herein. Rates will be stated in amounts per 100 pounds. Except as otherwise noted, the rates in effect at the time of the hearing will be referred to as the present rates. They do not include the general increases which became effective subsequently in March 1942.

Boots and shoes of the description embraced in these proceedings are rated first class, in less than carloads or less than truckloads, in the rail and motor classifications, respectively. From all these origins the rail and motor first-class rates are $5.78 to Spokane, $5.96 to Yakima, and $6.11 to destinations such as Portland, Seattle, and San Francisco. Neither the rail nor the motor carriers, however, apply class rates on this traffic. The rail carriers maintain a commodity rate of $4.95, hereinafter called the group A rate, blanketed to apply, in general, on less than carloads, from transcontinental group A territory, embracing points in a wide area on the north Atlantic seaboard, to an extensive area on the Pacific coast. The specific points of origin and destination under consideration are included in these respective areas. Freightforwarding companies maintain less-than-carload rates, made by deducting 15 cents from the rail less-than-carload rates.

The respondents maintain, as a general basis, group A commodity rates the same as the rail rates, but, in addition, they maintain and apply, from and to certain specified points in the above-mentioned areas, an alternating commodity rate of $4.80 to meet the forwarders' competition. When these proceedings were instituted, and at the time the hearing was held, the Consolidated carriers were applying the $4.80 rate from Boston, Hartford, New York, Philadelphia, and Baltimore to Portland, Seattle, Spokane, Tacoma, Yakima, San Francisco, Alameda, Berkeley, Oakland, and Richmond, and the bureau carriers were applying it from Philadelphia and Baltimore to Portland, Seattle,

Spokane, and Tacoma. By the schedules which were suspended in the title proceeding, the bureau carriers proposed to extend the territorial application of their $4.80 rate to coincide with the territorial application of that rate observed by the Consolidated carriers. Just prior to the hearing, the Consolidated carriers canceled their forwardercompetitive rate, and now apply the higher group A rate, except to San Francisco, Alameda, Berkeley, Oakland, and Richmond, and they are without commodity rates to these points.

Although the order instituting the investigation in No. MC-C-282 brings in issue all the rates of these respondents on boots and shoes from these origins to all points in California, Oregon, and Washington, the only evidence submitted dealt with the rate of $4.80 from and to the specific points heretofore mentioned. That rate is from 78.5 to 83 percent of the first-class rates hereinbefore mentioned. The group A rate of $4.95 is about 2.5 percentage points higher.

The respondents maintain less-than-truckload, and the rail carriers maintain less-than-carload, commodity rates between the Atlantic and Pacific coasts on numerous articles. The respondents compare their rates under investigation herein on boots and shoes, with their lessthan-truckload commodity rates from and to these points on such commodities as brooms, decorations or ornaments, acetic acid, sanitary pads, embalming fluid, hair curlers, cotton netting and tape, cotton tapestries, cotton yarn, cotton binding, alcohol, cigar lighters, airplanepropeller hubs, golf balls and bags, and snowshoes. The rates on the compared commodities, which, with few exceptions also are rated first class in less than truckloads, are the same as, or lower than, those under investigation.

Consolidated Freightways, Inc., participates in both tariffs containing the rates in issue in these proceedings. Less-than-truckload shipments of boots and shoes, originating at these origins, are transported by eastern motor carriers to Minneapolis, Minn., where they are transferred, in quantities approximating a full truckload, to Consolidated for completion of the transportation to the Pacific coast. Consolidated utilizes truck-trailer combinations in this transportation, which have a combined capacity of 2,184 cubic feet and can haul 26,208 pounds of boots and shoes. Its portion of the through rate of $4.80 yields earnings ranging from 34 to 36.8 cents a truck-mile on loads of 20,000 pounds, which may be compared with Consolidated's average costs of 32.8 cents a truck-mile for transporting all traffic in 1940. On exceptions, the rail carriers, protestants, question whether State laws would permit operations of the combination units by Consolidated. There is no evidence of record respecting the load restrictions of the States through which Consolidated operates. Such

restrictions recently have been quite generally liberalized. No evidence was submitted as to the weight of individual shipments of boots and shoes, the quantities loaded in each vehicle, and the costs and revenues of the eastern carriers which transport this traffic to Minneapolis.

The rail carriers contend that the rates under investigation are unreasonably low. Their evidence consists chiefly of comparisons of their class and commodity rates on this traffic with those of respondents. They concede that their less-than-carload commodity rates are only slightly higher than the rates under investigation, but argue that the rail rates are subnormal, and were established originally because of competitive rates over intercoastal water routes. Their exceptions are principally to the effect that the respondents, in failing to adduce evidence of costs and methods of handling this less-than-truckload traffic over the complete route, have not established that the rates under investigation are just and reasonable.

The maintenance of rates by one transportation agency lower than those of a competing agency is not, standing alone, violative of any provision of the Interstate Commerce Act. Nor does the fact that the motor rates under investigation are lower than the classification basis establish that they are unreasonable, particularly where, as here, an extensive departure from the classification basis is indicated by the maintenance, by both motor and rail carriers, of less-than-truckload and less-than-carload commodity rates on a large number of articles. The classification ratings are designed to reflect the transportation characteristics of the articles so rated. Where commodity rates are maintained on many articles, it is proper to compare the less-thantruckload commodity rates on one of those articles with the lessthan-truckload commodity rates maintained on other articles accorded similar classification ratings. The respondents' showing in this respect is persuasive that the rates under investigation are not unreasonable compared with their general commodity rate structures.

In proceedings in which the lawfulness of motor-carrier rates is under attack on the ground that they are lower than minimum reasonable rates, the predominant element to be considered is whether they are reasonably compensatory. Freight, All Kinds, Lincoln, Omaha, and Nebraska Points, 32 M. C. C. 339, 344. The rate of $4.80 here under investigation applies for highway distances ranging from 3,248 miles, Boston to Portland, to 2,565 miles, Baltimore to Spokane, and averaging 3,006 miles. The earnings thereunder range from 2.95 to 3.74 cents a ton-mile, respectively, and average 3.19 cents. Considering the distances, these earnings appear to be reasonably compensatory. As noted, the $4.80 rate has been increased since the hearing.

42 M. C C.

In Investigation and Suspension Docket No. M-1669, we find that the rates which were under suspension are just and reasonable.

In No. MC-C-282, we find that the less-than-truckload commodity rates on boots and shoes, not otherwise specified, from Boston, Hartford, New York, Philadelphia, and Baltimore, to Portland, Seattle, Spokane, Tacoma, Yakima, San Francisco, Alameda, Berkeley, Oakland, and Richmond are not unreasonable or otherwise unlawful. An order will be entered discontinuing the proceedings.

INVESTIGATION AND SUSPENSION DOCKET No. M-1915 BARBOUR TRANSPORTATION COMPANY, INCORPORATED, FOUNDRY CORE COMPOUND AND ENGINES

Submitted October 26, 1942. Decided March 18, 1943

Proposed reduced motor common carrier truckload rates on foundry core liquid compounds from Milwaukee, Wis., to certain Oklahoma points, and on steam or internal-combustion engines and tractors and parts thereof, from Chicago, Ill., and Milwaukee to Wichita Falls, Tex., and points taking the same rates, found not shown to be just and reasonable, except as applied to tractors. Proposed schedules ordered canceled, and proceeding discontinued without prejudice to the filing of new schedules in conformity with the views expressed H. E. Ringle for respondent.

W. H. Fitzpatrick, V. W. McLeod, Roy F. Reed, and John P. Ganly for protestants.

REPORT OF THE COMMISSION

DIVISION 3, COMMISSIONERS MILLER, PATTERSON, AND JOHNSON BY DIVISION 3:

Exceptions were filed by respondent to the recommended order of the examiner respecting only the rates on compounds. Our conclusions differ somewhat from those recommended.

By schedules filed to become effective January 8, 1942, Barbour Transportation Company, Incorporated, of Oklahoma City, Okla., a motor common carrier, hereinafter called Barbour, and certain motor common carriers parties to such schedules on traffic moved in connection with Barbour, proposed to establish reduced commodity rates on foundry core liquid compounds from Milwaukee, Wis., to certain points in Oklahoma, and on steam or internal-combustion engines and parts thereof from Chicago, Ill., and Milwaukee to Wichita Falls, Tex., and certain points grouped with the points named. Upon protests of the Middlewest Motor Freight Bureau, hereinafter

called the bureau, an incorporated association of motor common carriers, and of the southwestern rail carriers, the latter only with respect to the proposed rates on the compounds, operation of the schedules was suspended until August 8, 1942, and the effective date thereof has been postponed indefinitely. Barbour was the only respondent to appear in defense of the proposed rates. The protestants offered evidence in support of their respective protests. Rates are stated in amounts per 100 pounds, and those referred to as present rates do not include the general increase of 6 percent which became effective in 1942 in the rates on these commodities.

The following table sets forth the present and proposed commodity rates of Barbour on the compounds, the present bureau and rail class rates applicable on this traffic from and to the principal points of origin and destination, and the highway distances: 1

The compounds, minimum 30,000 pounds, are rated fifth class (37.5 percent of first class) and class C (30 percent of first class), motor and rail, respectively, in the governing classifications. These are the bases for the bureau and rail rates, except that, by classification exception, the bureau carriers maintain an 18,000-pound minimum. It will be observed that Barbour's present commodity rates on the compounds are higher than the bureau's rates and that the proposed rates are the same as the corresponding rail carload rates, except to Enid, and except for the difference in the minima. The motor rates would include pick-up, delivery, loading, and unloading services which are not accorded under the rail carload rates, and would apply for distances ranging from 49 to 127 miles greater than the short-line rail distances. The lower truckload minimum is of advantage to the shipper, as will hereinafter appear, but there is no evidence of movements in carloads from and to these points.

1 Exhibits of record contain conflicting highway distances between the points in issue. The distances referred to in this report are taken from the bureau's exhibit.