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INTERSTATE COMMERCE COMMISSION

REPORTS

No. 19606

LEMMON GROCERY & PRODUCE COMPANY v. CHICAGO, MILWAUKEE & ST. PAUL RAILWAY COMPANY

Submitted October 19, 1928. Decided August 10, 1929

Rates on eggs in carloads, from Lemmon, S. Dak., to Chicago, Ill., Milwaukee and Waterloo, Wis., found unreasonable. Reasonable rates prescribed for the future, and reparation awarded.

D. L. Kelley, B. A. Oestreich, R. L. Dillman, and John E. Benton for complainant.

T. M. Hanrahan and J. N. Davis for defendant.

REPORT OF THE COMMISSION

DIVISION 4, COMMISSIONERS MEYER, EASTMAN, AND WOODLOCK BY DIVISION 4:

Exceptions were filed by complainant to the report proposed by the examiner and oral argument was had. Our conclusions differ from those proposed by the examiner.

Complainant is B. A. Oestreich, an individual trading under the name of Lemmon Grocery & Produce Company. By complaint filed April 25, 1927, it is alleged that the rate on eggs and other dairy products, in carloads, from Lemmon, S. Dak., to Chicago, Ill., Milwaukee and Waterloo, Wis., were and are unreasonable. Reparation and a reasonable rate for the future are sought. Rates will be stated in amounts per 100 pounds.

At the hearing complainant withdrew the allegations of unreasonableness as to all articles except eggs. On brief he points out that small amounts of butter are sometimes included in carload shipments of eggs, and requests that butter be included in the findings. In view of the withdrawal of all except the egg rates from the complaint, thereby making it unnecessary for defendant to defend the

rates on the other articles or on mixed shipments of eggs and such other articles, the findings necessarily must be confined to the rates on straight carload shipments of eggs.

Complainant's 1927 shipments of eggs up to the date of the hearing amounted to 55 carloads to all destinations, and it expected to ship 60 carloads during the entire year, but the number of carload shipments moving to the destinations covered by the complaint is not shown. The average weight of 160 carloads shipped over defendant's line in 1924 was 23,200 pounds. The average carload value is $2,400, and the value at the time of the hearing was $3,000 to $3,200. Claims for loss and damage averaged $4.13 per car on the 5,024 carloads shipped over the Chicago, Milwaukee & St. Paul in 1926. The average claim paid on shipments of butter and cheese during the same period was 79 cents, on canned goods 77 cents, and on fresh fruits and vegetables $2.55 per car. Complainant obtains eggs in comparatively small quantities from dealers in near-by towns. They formerly were shipped to Lemmon by rail in less than carloads but are now hauled into Lemmon largely if not altogether by complainant's trucks, and after being candled are shipped out in carloads.

Prior to August 11, 1923, the carload rate on eggs from Lemmon to Chicago, Milwaukee, and Waterloo was the third-class rate of $1.81. On that date a commodity rate of $1.695 became effective, equal to a third-class rate of 81 cents to Aberdeen, S. Dak., plus a commodity rate of 88.5 cents beyond. On April 17, 1925, the present commodity rate of $1.63 became effective, which is 6.5 cents less than the combination of factors to and beyond Aberdeen. The minimum weight on eggs, in common with other dairy products, is 20,000 pounds.

As an illustration of the alleged unreasonableness of the rate from Lemmon complainant points out that eggs may be shipped in small quantities from Petrel, White Butte, and Keldron, S. Dak., Haynes, Bowman, and Scranton, N. Dak., 5.9 to 63.6 miles west and east of Lemmon, to Aberdeen and reshipped in carloads to Chicago, Milwaukee, and Waterloo at through rates 5.5 to 32.5 cents under the through rates on shipments similarly handled at Lemmon. Complainant's strongest competition is at Aberdeen, but the complaint does not allege undue preference of that point.

In Duluth Chamber of Commerce v. Chicago & N. W. Ry. Co., decided July 1, 1929, on further argument, 156 I. C. C. 156, we found a distance scale of rates as therein set forth to be reasonable on dairy products, including eggs, from points in South Dakota and

1 Previous decisions, 120 I. C. C. 683, 144 I. C. C. 179.

other States to Duluth, Minn., together with certain arbitraries to be added to such rates when from points west of the Missouri River. In the same decision we found that rates to Duluth would be unduly prejudicial to that point and unduly preferential of Chicago to the extent that the rates to Duluth are more than 110 per cent of the rates for like distances contemporaneously in effect to Chicago. This, in effect, fixed a maximum basis to the latter point. The rate under the scale to Duluth for 895.3 miles, the distance from Lemmon to Chicago, is $1.31, with an arbitrary of 4 cents for 97 miles, the approximate distance from the Missouri River to Lemmon, making the rate found reasonable for the above distance on traffic to Duluth $1.35. Under the finding of undue prejudice above referred to, the maximum rate to Chicago for the same distance would be $1.23, as compared with the present rate from Lemmon to Chicago of $1.63. The maximum rate from Aberdeen to Chicago, 698.3 miles, is $1.03 under the same scale, as compared with the present rate of 88.5 cents.

At the argument it was stated for complainant that for the future the rate from Lemmon resulting from the findings in the Duluth Chamber of Commerce case would be satisfactory, and that reparation is sought on past shipments based on the maximum rate under the scale therein prescribed. Milwaukee is about 85 miles north of Chicago, and Waterloo about 59 miles west of Milwaukee. The present rate of $1.63 from Lemmon to Chicago applies also to the other two destination points.

The conclusions reached in the Duluth Chamber of Commerce case, supra, will bring about a general adjustment resulting in increases as well as decreases in rates. Under such circumstances it has not been our practice to find the rates assailed unreasonable for the past except in instances where the rates charged were clearly excessive. Dairy products are rated third class in the three major classifications and the record in the Duluth Chamber of Commerce case indicates that it was the general basis from North Dakota and South Dakota to Chicago and Duluth, although there were exceptions. The rates prescribed for the future in the Duluth Chamber of Commerce case approximate 85 per cent of the third-class rates in the Fargo scale extended. In view of the general adjustment resulting from the findings in the Duluth Chamber of Commerce case, we think that reparation should not be awarded below the third-class rate based on the Fargo scale. The $1.23 rate herein prescribed for the future is 85 per cent of a third-class rate of $1.45.

Upon consideration of the facts of record and our findings in the Duluth Chamber of Commerce case, we find that the rate assailed was unreasonable to the extent that it exceeded $1.45; we further find that the rate assailed is and for the future will be unreasonable to the

extent that it exceeds $1.23; that complainant made shipments of eggs as hereinbefore described, and paid and bore the charges thereon at the rate herein found unreasonable; that he has been damaged thereby and that he is entitled to reparation in the amount of the difference between the charges paid and those which would have accrued at the rate of $1.45 herein found reasonable, with interest. Complainant should submit a statement in accordance with Rule V of our Rules of Practice.

An appropriate order for the future will be entered.

WOODLOCK, Commissioner, concurring:

I concur in the award of reparation to the basis of a rate of $1.45. I dissented in the Duluth Chamber of Commerce case and concur in the prescription for the future of a rate of $1.23 based on the decision in that case only because constrained thereto by the decision of the majority therein.

157 I. C. C.

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