A vigoroug pro' 

 and in favor of I 

 In<! 'J ui!h : 



W:. . br J. V. 



" ^t 1 1 till i I ii;^i Ml r ^ 



iiiul Tfll City, 

 Hin nt 

 nvifnc- 





turcr nt lluntingburi;, Ind. Tho coni|ilaint ik nKiimnt tlif SutithorD 

 Koilroad foinpany. tlio C. r. 0. & SI. I,. Knilwny Conipiiiiy nml 

 wrcDtccn other milrondii. Mr. Stiniwii auortB tlint on ninny Hliip- 

 moots of lumber and other formt |irodurt8 to pointH in Illinois, Wis- 

 eoDsin and Michigan ho has boon charged Uie Roiiio rates as obtain 

 from tJie other t"- • ;Mne<l, ulthounh traflle from these points 



pass through Iliin' lie him ii>ke<l the comiiiii'gion to stop the 



diseriminntion anil uwurd him reparation in tho sum of $1,482.42. 



With the return of the members of Uie luterstute Commerce Commis- 

 sion opinions are beginning to come down ugnin. l)uring the past two 

 weeks, however, there wore only two opinions in lumber cases, but ono 

 of these is of importance to Uic hardwood industry. It is tho case of 

 E. P. Ladd & Co. versus the Gould & Southwestern Railway Co. et al. 

 Tho commission found that tlie rates on lumber from Furth, Ark., arc 

 unreasonable and unjustly prejudicial to the extent that they exceed 

 the rates on lunil>cr eontcmpnrnneously in effect from Oould, Ark. 

 Reparation was awarded. 



Commissioner Daniels, who h role tin- opinion, Fays in part: 

 The complnlnnnts horoin nro E. P. LndJ and C S. Bncon, co-pnrtncrs, 

 ensaged in inunufncturlng cyprcKs, oak, an<l kuhi lumber, under the Arm 

 name of E. P. Ladil & Co.. at Furtli. .\rlc. Tlicy allege that the defendants' 

 rates on lumber from Furth to Interstate dostlnallons are unroa.sonable and 

 unduly prejudicial lo the extent of 2 cents per 100 pounds. Furth Is on 

 the line of the Gould Southwestern Hallway, 1.1 miles west of Gould, .\rk.. 

 the Junction between that road and the line of the f-t. Louis, Iron Mountain 

 & Southern Railway Company. The Gould Southwestern extends from 

 Gould through Furth to Star City, a distance of IS miles. From Furth the 

 rates on all kinds of lumber to all Interstate points are 2 cents per 100 

 pounds higher than from Gould, and it Is the complainants' contention that 

 the rates from Furth should not exceed the rates contemporaneously appli- 

 cable from Gould. Reparation of 2 cents per 100 pounds Is asked on ship- 

 ments made since January 1, 1913. 



The construction of the Gould Southwestern began in 1907, and the road 

 was completed in that year to Champion, about 6 miles from Gould. Later 

 it was extended through Furth to Star City, its present terminus. In 1909 

 the rate on lumber from Furth to C.ilro. 111., which may be taken as a 

 typical destination, was 4 cents per 100 pounds higher than from Gould. 

 In June, 1911, by an agreement between the complainants and the Gould 

 Southwestern, the rates from Furth on pine, cypress, and hardwood lumber 

 were made 2 cents per 100 pounds higher than from Gould, and out of the 

 rates so made the Gould Southwestern received a division from the Iron 

 Mountain of 5 cents on hardwood and G cents on pine and cypress. The 

 Gould Southwestern was a party to the original proceedings in the Tap Line 

 case, but was dismissed as a part.v to that proceeding as of August 28, 1012. 

 under order of the Commission i-ntercd October 13, 191.3. In May, 1912, 

 after the decision in the Tap Line case, the Joint through rates from Furth 

 were canceled, leaving to apply the combination of the local rates to and 

 from Gould, which had the ciTi'ct of increasing the rates from Furth .3 cents 

 on hardwood and 4 cents on pine and cypress. On September 27, 1912, the 

 defendants, being under the mistaken opinion, as they state, that they were 

 required so to do by the proceedings and orders in the Tap Line case, 

 published rates from all points on the Gould Southwestern on the same 

 basis as from Gould. Effective January 1. 1913, they published the rates 

 here complained of, which arc 2 cents per 100 pounds higher than the 

 Gould rate. These, they claim, are merely a restoration of rates reduced 

 under a misapprehension as to the requirements of the commission. Thi- 

 rates from Gould to Cairo during this period have been 13 cents per 100 

 pounds on hardwood and 16 cents on pine and cypress. The present rates 

 from Furth to Cairo are therefore 10 cents on hardwood and 18 cents on 

 pine and cypress. 



This 13-cent rate on hardwood was blanketed in .\rkansas from Just north 

 of Little Rock south to the Arkansas-Louisiana state line, and the lOcent 

 rate on pine and cypress was similarly applied as a blanket rate from the 

 Arkansas river south to the Gulf of Mexico and east to the Mississippi river. 

 Gould and Furth are near the northern boundary of these blanketed terri- 

 tories, and consequently nearer Cairo and other northern consuming and 

 jobbing markets than most of the other stations within the groups. It Is 

 the contention of the complainants that the rates from Furth should not be 

 higher than from points on many other short-line connections of the Iron 

 Mountain like the Gould Southwestern in the same general territory as 

 Furth, or higher than from main and branch line points in these groups on 

 the Iron Mountain much farther distant from points of destination than 

 Furth. 



.-24— 



I I. ti. .1. '. ,..! ...I tr..,i M..<ir,ti,iii iiiii t),i i.hiiikrt rule 



ipN iiicn- 

 'MlN nmiie 



' •'(iiin> In till' •uulliMrst •liiiiiiir lu the (SoulJ 



II which riili-K on lumber arc lilishrr liy from 1 



t N than from till' Junction polntn. The coinplaluantu 



from polntn uii which the Junrllonpulnt rale* are 



i,l.|.li, 1 I r Ihi' ndJUHtmenl In caneii where the 



Junctliiii p<'i on llii-iie connrctlona U the allritrd 



t-OllllK'tlt|l'll t■l.^^■.rl ..iii|..- .■■. > » IllC. 



The di'fenncN of the ri-npondents of the Incrcaied rates effective alocc 

 January 1, 1913, from Furth are : 



(1) The haul Involv.-d Is a two-lln'- haul. 



(21 T!i. 2 '"■nT .-irV'ltmrv .-.v; r ttip Infi'-tl-m or blanket rutr wai* nureiHl l»» 

 li. ■ ■■ lb. 



■'cratc succcHnfiilly iindrr 

 •I 111 cannot afford to Hbrink 



Ita I, \ • Unu at in ■ nl to puy lb'- < ^"ijid SouthweHtcrn a dlvlalon 



out of r rati- from I'urth. 



(4) I iirliltnirv Is no exception to the general rule In vogue OB 



the Iron .M.niUiatii. which contends that xlmllar arbltrarles exist unlcM com- 

 petition with another trunk line prevents. 



(.'>) The rate Is not unreasonable pir nr nor unjustly discriminatory. 



As regards the argument that a twollne haul la Involved, eihlblti of the 

 complainants show that the total shipments of yellow pine from the blank- 

 eted territory for alternative months of 1912 amounted to .30.299 cars; that 

 of these, 10,880 Involved a two-line haul, 3,808 a three-line haul. 1,075 a 

 four-line haul, and 31 a five-line haul ; that the situation with regard to 

 cypress Is similar, as the cypress blanket Ij coincident with the yellow pine 

 blanket; that out of 11,418 cars of hardwoods, l..''i37 Involved a twollne 

 haul and 349 a three-line haul, not counting tap. line movements. From thin 

 it would Fcem that the excuse for tbr. arbitrary over the Junction rate \i> 

 Gould, that In this case a two-line haul was Involved, and that the carrierx 

 therefore should have a higher rate, is not valid. 



The second defense falls because not determinative of the Justice, reason- 

 ableness, and nondiscriminatory character of the rate. The Willamette 

 Valley case. S. P. Co. v. I. C. C, 219 U. S.. 433. 



The third defense falls because it is not shown what the fair value of the 

 Gould Southwestern is beyond the fact that It represents an Investment of 

 about $200,000. It Is true that financially it has not been successful. 



The fourth defense falls because it does not appear that a uniform prac- 

 tice has been In vogue whereby the Iron Mountain Invariably exacts, or han 

 exacted, an arbitrary over the Junction rate where the competition of an- 

 other trunk line Is absent, and invariably accords the Junction rate to points 

 on a short connecting line where competition with another trunk line carrier 

 Is present. Instances have been found in the record of this case and In the 

 tariffs on file with this commission, first, where the tap line connects with 

 the Iron Mountain, Its single maln-IInc connection, and the Junction-point 

 rate on hardwoods applies from all points on the tap line; second, where the 

 tap line connects with the Iron Mountain, its single main-line connection.. 

 :ind an arbitrary is added to the Junction-point rate; third, where the Iron 

 Mountain competes with one or more trunk lines for the business of the tap 

 line and the Junction-point rate applies from all points on the short line ; 

 .ind. fourth, where the Iron Mountain competes with one or more trunk lines 

 for the business of the tap line and an arbitrary Is nevertheless added to the 

 Junction-point rate. In the first category the Grlffln, Magnolia & Western 

 railway, whose sole outlet Is via the Iron Mountain at Grlffln, carried the 

 Junction-point blanket rates on hardwoods from all points on its line during 

 the period from September 27, 1912, until February 23, 191!>, excepting the 

 Interval when combination rates applied on account of the commission's rul- 

 ing In the Tap Line case, nupra ; as an instance of the second category, the 

 Gould Southwestern is Itself typical ; to the third category belongs the 

 Warren & Ouachita Valley Railway, for whose business the Iron Mountain, 

 and Rock Island compete, and from all points on the tap line the Junction- 

 point rate of 13 cents on hardwoods was applicable from September 27, 1912, 

 until February 23, 191.'i, excepting the Interval when combination rates 

 applied on account of the commission's ruling In the Tap Line case, tupra; 

 of the fourth category, the Warren. Johnsvllle & Saline River Railway Is an 

 Instance, for whose business the Iron Mountain competes with the Rock 

 Island. From points on this tap line, both before and after the decisions 

 in the Tap Line cases, an arbitrary was charged in addition to the Junction- 

 point rate. 



The fifth defense falls for the reason that the territory in which the Gould 

 Southwestern Is located Is one in which blanket rates as a rule prevail. 

 The carriers making effective such a blanket rate cannot be heard to say 

 that It is applicable In general hut not applicable from points on a short- 

 line common carrier, such as the Gould Southwestern. If this territory is 

 t<>l>e blanketed, and the blanket rate Is to be applied without discrimination, 

 the Iron Mountain must expect to apply thi- blanket rate from points oi» 

 short-line common carriers connecting with the Iron Mountain. The Iron 

 Mountain has chosen to adopt a blanket system of making rates In this 

 region, and under such a system distance and hauls over more than one line 

 are of course in a great measure disregarded. We arc of the opinion and 

 find that the defendants' rates on lumber from Furth to interstate destina- 

 tions reached by the Iron Mountain are, and since January 1, 1913, have 

 been unreasonable and unduly prejudicial to Forth to the extent that they- 



