20 



HARDWOOD RECORD 



January 25. 1922 



existed prior to August 26, 1920. A revision of rates on tiardwooU lumber 

 from southern points may stimulate the movement from those points to the 

 destination territory described, and thereby increase rather than diminish 

 the net revenue of the southern carriers. 



We find that the rates on hardwood lumber here assailed will be for the 

 future unreasonable to the extent that they exceed the rates in effect Au- 

 gust 25, 1920. by more than the amounts in cents per 100 pounds shown 

 In the table below. The following table is representative only, and rates 

 frora and to other points involved should be revised in harmony with t"be 

 amounts prescribed below. It should also be understood that in revising 

 the rates, no new fourth section departures or increases in existing fourth 

 section departures are authorized, nor should such findings be construed 

 as Justifying or authorizing increases in any rates which are lower than 

 If made on the maximum bases outlined : 



To trunk 

 line ter- 

 To C. ritory. 

 From— Tollli- F. A. New 



Dois terri- England 

 tory and Vir- 

 ginia 

 cities 

 Cents Cents Cents 



Missouri 6 7 9 



Arkansas .... 7 8 10 



Texas 8 9 11 



Louisiana .... 8 9 11 



Mississippi ... 7 8 10 



Alabama 8 8 10 



Georgia 9 9 9 



To Illi- 

 nois 



Cents 



Florida 9 



South Carolina 9 



North Carolina 9 



Virginia 9 



West Virginia. 9 



Tennessee .... 8 



Kentucky .... 7 



Totrunk 

 line ter- 

 To C. ritory, 

 F. A. New 

 terri- England 

 tory and Vir- 

 ginia 



Cents 

 9 

 9 

 9 



S 



cities 

 Cents 



No order will be issued at this time, but carriers will be expected to file 

 and make effective rates in accordance with the findings herein made not 

 later than March 6, 1922, by publication upon not less than 10 days' notice. 



Full Justice Not Granted Shippers 

 McChoed, Chairman: 



I concur in the conclusions reached by the majority as far as they go, 

 but think they fall short of substantial Justice to the shippers. With the 

 light afforded by the record, I can only attribute to an unreasonable rate 

 level the continued prostration of the hardwood Industry In the face of a 

 reversion to practically pre-war production costs, pre-war selling prices of 

 the lower grades, and not greatly higher prices of the higher grades. Con- 

 ceding that there may still be some play of other economic factors in the 

 situation, the fact remains that transportation revenues are derived from 

 traffic movements, not from mere rates ; and it is manifestly antagonistic 

 to the interests of both carriers and producers to maintain rates at levels 

 that tend to curb, rather than to stimulate, a flow of traffic. To my mind, 

 the record calls for more substanti:il reductions, and we should enter an 

 order prescribing them. 



I am authorized by Conuuissioner <';unpbell to say that he shares in 



these views. 



». 

 Potter, Commisaioner, concurring : .-' 



I concur in the report with respect to reductions of rates to points where 

 such reductions make for a restoration of relationships as they existed 

 prior to August 2G, 1920. It Is my opinion that the complainants are en- 

 titled to such reductions on this ground and without regard to the other 

 considerations mentioned in the repoi-t, my thought being that the dispro- 

 portionate Increases, by percentages, of the long-haul rates have, under 

 existing conditions, become unjust and unreasonable and therefore the 

 resulting rates are not just and reasonable. I do not assent to the suffi- 

 ciency of any other reasons assigned for a reduction, nor do I concur in 

 the reductions to points where such reductions do not m.Tke for a restora- 

 tion of the former relationships. 



Commissioner Daniels Dissents 

 Daniels, Commissioner, dissenting: 



The complaint, as amended, assails as unreasonable and as unduly preju- 

 dicial the rates on hardwood lumber from points of origin, generally south 

 of the Ohio and Potomac rivers and from Missouri, Arkansas, Texas and 

 Louisiana to destinations in western trunk line territory, central freight 

 association territory. Including Illinois-Wisconsin territory, Buffalo-Pitts- 

 burgh territory, eastern trunk li!ie territory, Virginia cities territory, Caro- 

 lina territory and Canada. 



The report In terms makes no finding on the allegation of undui' 

 prejudice, but says : 



We find that the rates on hardwood luml)er here assailed will be for the 

 future unreasonable to the extent that they exceed the rates in effect August 

 25, 1920, by more than the amounts in cents per 100 pounds shown In the 

 table below. 



This sweeping finding of unreasonableness is not supported in the report 

 by any citation of ton-mile earnings. From Memphis, for a haul of 1,238 

 miles to New York, the yield under the current rates of 8 mills per ton- 

 mile is reduce<l to 7.4 mills ; to Chicago, for 532 miles, the ton-mile yield 

 Is reduced from 12 mills to ll.S mills; to Cleveland, for 720 miles, from 

 11 mills to 10 mills; to Detroit, for a haul of 730 miles, from 10.4 mills to 

 9.7 mills. The yield per ton-mile found unreasonable In these instances 

 is not compared with any ton mile yield which is cited as a standard of 



reasonableness. If the rates prescribed were to be applied universally on 

 lumber and forest products, the effect on carrier revenue might well prove 

 revolutionary. No evidence of record is cited In the report that shows or 

 tends to show that rates reduced are unreasonable from the standpoint of 

 earnings thereunder. 



Despite the absence of any findings upon the allegation of undue preju- 

 dice, the report says : 



Camplainants emphasize the fact tliat because of the relatively long haul 

 of hardwood lumber from southern points to consuming points in central 

 and eastern trunk line territorj- the percentage increase has had a pecu- 

 liarly disturbing effect upon their business. We are convinced that there is 

 merit in this point. 



Whatever the merit in this point, it is to be observed, per contra, that 

 under Ex Parte 74, hardwood rates from the southeast to Ohio River cross- 

 ings, Cairo, Louisville, Evansvllle, Henderson and Cincinnati were increased 

 but 25 per cent, while from competing points, such as Wausau, Wis., and 

 Cadillac, Mich., the corresponding increases to the same destinations were 

 33% and 40 per cent, respectively. 



Expects Other Complaints 

 Moreover, if we take Wausau, representing a typical northwestern pro- 

 ducing point of hardwood lumber, the respective Increases since June 24, 

 1918, including those under general order No. 28, as well as those under 

 Ex Parte 74, as against Memphis are shown in the following table : 



Amount 



of 

 ncreases 

 as result 

 of this 

 report 

 Cents 

 7 

 13.5 

 13.9 

 14.S 

 17 

 17 

 17 



7 

 12 

 12.5 

 11.8 

 12.1 

 14 

 14 

 14 



■ Rates In cents per 100 pounds — I 



Haul 

 Watisau. Wis., to- 



Chicago, III. . . . 



Detroit, Mich... 



Cleveland, Ohio. 



Buffalo, N. V. . . 



Baltimore. Md. . 



Philadelphia, Pa 



New York, N. Y. 

 Memphis, Tenn., to — 



Louisville. Kv. . . 



Chicago, III. " 



Clevelanil, Ohio. . 



Detroit, .Mich 



Buffalo, N. Y 



Baltimore. Md . . 



Philadelphia. Pa. 



New York, N. Y. . 



June 24, 

 Distance 1918 



.Miles 



317 



589 



674 



838 



1.114 



1.134 



1,225 



377 



532 



7211 



730 



913 



1 ,055 



1,146 



1,238 



Cents 

 10 

 20.5 

 21.6 

 24.7 

 27.5 

 28.5 

 .30.5 



12 



19.5 



24.8 



23.7 



24.4 



29 



30 



32 



June 25, 

 1918 

 Cents 

 12.5 

 25.5 

 26.5 

 29.5 

 .32.5 

 33.5 

 35.5 



15 



24.5 



30 



28.5 



29.5 



34 



35 



37 



Present 

 Cents 

 17 

 34 

 35.5 

 .39.5 

 44.5 

 45.5 

 47.5 



19 



32.5 



40 



38 



39.5 



45.5 



46.5 



49.5 



Amounts 



of 



increases 



Cents 



7 



13.5 



13.9 



14.8 



17 



17 



17 



7 

 13 

 15.2 

 14.3 

 15.1 

 165 

 16.5 

 17.5 



From an Inspection of the last column it appears that, distance consid- 

 ered, the aggregate increases from Wausau will be greater than from 

 Memphis. 



Under such a showing we must expect to be confronte<l with complaints 

 from hardwood producers in the northwest and central freight association 

 territory for corresponding reductions In their rates. 



This prospect but Illustrates the extensive dislocation we must antici- 

 pate in the rates on lumber. We have frequently required an equalization 

 of rates on hard and soft woods. What reason can be cited why yellow- 

 pine producers should not demand the same rates as apply on hard woods 

 for the same haul? It Is true that more southern pine moved tor the year 

 ended September 1, 1921, under the present level of rates than moved in 

 the preceding year. But this is also largely true of 60 per cent of the hard 

 woods, grades Nos. 1 and 2 moving In practically undiminished volume 

 under the present rates. If the curtailed movement of 40 per cent of the 

 lower grade hard woods is to lower the general plane of hardwood rates, 

 why should not the same considerations lower the entire plane of yellow- 

 pine rates, because the plane of hardwood rates is reduced? If the yellow- 

 pine rates are reduced, the rates on fir from the Pacific northwest will 

 consistently come In for another reduction. 



The record may warrant such findings and conclusions as were made In 

 Nationiil Live Stock Shippers League v. A., T. & S. F. Ry. Co., 63 I. C. C, 

 107. where we developed, on pages 116, 117, the fundamental principles 

 which must guide us In rate situations analogous to this. It does not. In 

 my opinion, warrant the broad finding here made of unlawfulness to the 

 extent that rates In effect August 25, 1920, will be exceeded by more than 

 determined amounts to some destinations and undetermined amounts to 

 other destinations. This Indeflniteness in Itself demonstrates inability to 

 prescribe the nmrgln of reasonableness on movements to Canada, for exam- 

 ple, or western trunk line territory, or the Ohio River crossings, from the 

 widely differing points of origin which are indicated only by the names of 

 states. 



Northern Rates Not Standards 



If the real basis for the finding Is relationship of rates from the South 

 to rates from Wisconsin and Michigan to cnninion destinations, those north- 

 ern rates are assumed as standards of reasonableness. They certainly are 

 not so proveil. The indeterminate standards of reasonableness on rates 

 from the South set up liy this report necessarily e.xti'iid In their Influence 

 to all forest products from the snuth. and thus In turn affect all from the 

 Pacific coast and inland empire, which will bring Into direct Issue the rate8 

 from Wisconsin and Michigan. Reducluni there will start the wheel revolv- 

 ing again. But that is not all. Percentage increases such as were author- 

 H''iittiiiinil tni [Kifjt- 33) 



