paper and accorded a lower basis of rates. The two kinds of paper have, in the past, generally speaking, taken substantially the same rates when moving between the same points. There are exceptions as to commodity rates on paper boards from and to certain points. For example, rates are on a low basis from points in Indiana to Chicago. It is not necessary here to consider them in detail.

The need for a readjustment of rates on building and roofing paper and paper boards throughout official classification territory is apparent. The present rate structure is indefensible. Producing plants are scattered generally throughout the country and competition for business is incessant and keen. A few cents difference in freight charges may determine a sale. Under such circumstances uniformity of rates is as of vital importance as the amount of them. Throughout the proceeding the discriminations in the present adjustment were emphasized by complainants and conceded by defendants. It is true there was considerable evidence introduced with respect to the reasonableness per se of the rates involved, but with practical unanimity manufacturers agree that rates with some ascertained relation to sixth class will produce an adjustment which, as a whole, will substantially meet their requirements as to relationships between producing plants and consuming territories. On brief it is stated in behalf of numerous complainants that

It is not claimed that a commodity rate structure based initially on the class-rate structure will do away with all discriminations in the entire territory; but the classrate structure has stood for many years and probably represents the best adjustment that could be adopted at present in a general proceeding to establish a uniform rate structure. Particular circumstances may exist showing that the application of a percentage of the sixth-class rate may not be an equitable rate to apply on building and roofing papers from a particular point to certain points of destination; but an equitable and reasonable basis having been established, any discriminations which may thereafter be found to exist can be separately considered.

The territory here involved covers the most important producing and consuming sections of the country; the adjustment is an important one alike to carriers and shippers; and in considering such a matter many transportation elements are brought into play which are not considered with respect to a rate from a particular point to a particular point. Long and short hauls are involved, as well as established and long-continued relationships between territories and localities. The burden of proof is on the defendants to show that the adjustment they propose is just and reasonable. The proposal has the merit of uniformity, but it is conceded by defendants that some fixed percentage relationship to the sixth-class adjustment, but lower than the class rates throughout the territory, would accomplish the same result.

The description of the articles included in this proceeding was submitted with the carriers' application under the amended fifteenth section, and no objection to it was made by anyone.

On December 26, 1917, the President issued a proclamation under which control generally of transportation systems of the country was assumed by the federal government on December 28. He appointed a Director General of Railroads to operate the railroads to effectuate the purpose for which control was assumed. The facts with respect to federal control of the carriers of the country are stated in Willamette Valley Lumbermen's Asso. v. S. P. Co., 51 I. C. C., 250, and need not be repeated. Suffice it to say that complainants in Nos. 9359 and 9743 have filed supplemental complaints making the Director General of Railroads a party defendant. No such amendment has been filed in the other cases consolidated with this proceeding.

The only effect of this is that technically we may not have power to issue an order for the future in the cases in which amendment has not been made. This is not important for the reason that all the leading carriers operating in official classification territory are defendants in the complaints as amended and the Director General operates all the leading carriers in that territory.

On June 25, 1918, on order of the Director General, rates on all kinds of paper were increased 25 per cent. The effect of the increased rates is that in some instances the prejudices complained of have been increased. These cases were submitted before the increased rates became effective. In his answers to the supplemental complaints the Director General states that:

He does not demand further hearing of evidence in this case, and consents that, in so far as it is relevant, the evidence heretofore submitted may be considered by the Commission in determining the questions now at issue.

No request for taking additional evidence was made by complainants. Nothing that has resulted from the control of the defendants by the federal government is warrant for a continuance of an unduly preferential adjustment of rates such as this record discloses.

We therefore find:

CONCLUSIONS.

1. That defendants have failed to show that the application of sixth-class rates on building and roofing paper and paper boards, in carloads, throughout official classification territory would be just and reasonable.

2. That the evidence shows that reasonable maximum rates on building and roofing paper and paper boards between points within C. F. A. territory and within trunk line territory and between the two territories and between either of them and points in New

England territory should not exceed 90 per cent of the sixth-class rates contemporaneously in effect.

3. That maintenance of different arbitraries over Maine junctions to points in New England territory from trunk line territory than from C. F. A. territory is unduly prejudicial and preferential and should be adjusted by defendants so that the same arbitraries should be added to make through rates on shipments from points in both territories. We assume that the defendants will promptly make this adjustment.

4. That from northern New York rates may be made by adding existing arbitraries to the Buffalo, N. Y., rates herein found reasonable.

5. That where specific commodity rates are published by water lines between Atlantic ports and adjacent territories the defendants may make rates with reference to water competition.

6. That rates from the Tyrone-Piedmont group of paper mills should be on the Williamsport-Cumberland basis. The Paper Case, pages 134 to 138.

7. That the description of the articles involved as submitted by the carriers for publication in their tariffs has been justified. An appropriate order will be issued.

52 I. C. O.

APPENDIX.

DESCRIPTION.

Binders board, box board, chip board, paper stock board, strawboard, wood-pulp board, in straight or mixed carloads.

Board, ceiling or wall, carloads, made of fiber board or pulpboard.

Paper, building and roofing; paper, building and roofing, asbestos, in straight or mixed carloads.

Roofing, composition, carloads.

Roofing, carloads, paper or prepared, in rolls, with which are shipped liquid cement, roof coating, pitch, coal tar, tin-roofing caps and nails, in mixed carloads. Shingles, asphalt, carloads, all kinds, in bundles, boxes, or crates.

No. 8845.1

NATCHEZ CHAMBER OF COMMERCE

v.

LOUISIANA & ARKANSAS RAILWAY COMPANY ET AL.

Submitted October 1, 1918. Decided January 16, 1919.

1. Natchez found to be subjected to undue prejudice with respect to intrastate rates between western Louisiana points and interstate rates between western Louisiana points and southern Arkansas points.

2. Failure of carriers to accord Natchez joint rates and specific through rates to and from western Louisiana and southern Arkansas points in such manner and to the same extent as (1) between western Louisiana points and (2) between western Louisiana and southern Arkansas points found to subject Natchez to undue prejudice.

3. Application of higher minimum charges on traffic from Natchez than are applied between points in Louisiana on and west of the Mississippi River found to be unduly prejudicial.

4. Defendants required to establish a distance scale of class rates for the transportation of property between Mississippi River crossings, Memphis to New Orleans, inclusive, and western Louisiana and southern Arkansas points as defined in the report, which shall not exceed the rates contemporaneously applied on like traffic for like distances (1) between western Louisiana points and (2) between western Louisiana points and southern Arkansas points. 5. Commercial conditions and carrier competition not being accepted in justification, water competition having practically disappeared and the distances from lower Mississippi River crossings to the border of the Shreveport triangle being relatively short as compared with distances within the Shreveport triangle, further maintenance of blanket rates between lower Mississippi River crossings and points in Louisiana west of the Mississippi River on the one hand and the triangle on the other hand disapproved.

6. Louisiana & Arkansas Railway and Louisiana & North West Railroad permitted to charge higher interstate rates than standard lines.

1 This report also embraces No. 8920, Natchez Chamber of Commerce v. Arkansas, Louisiana & Gulf Railway Company et al.; No. 9036, Natchez Chamber of Commerce v. Arkansas & Louisiana Midland Railway Company et al.; No. 6390, Memphis Freight Bureau v. St. Louis, Iron Mountain & Southern Railway Company et al. (reopened); No. 7250, Shreveport Chamber of Commerce et al. v. Alabama & Vicksburg Railway Company et al. (reopened); Investigation and Suspension Docket No. 1000, Louisiana Case; and those portions of the following fourth section applications by which authority is sought to continue to charge for the transportation of classes and commodities between Kansas City and St. Louis, Mo., and Memphis, Tenn., and points related thereto on the one hand, and New Orleans, Baton Rouge, and Angola, La., Natchez and Vicksburg, Miss., and points related thereto on the other hand, rates which are lower than the rates contemporaneously maintained on like traffic from or to Shreveport, La., and other intermediate points; Nos. 488, Morgan's Louisiana & Texas Railroad & Steamship Company and others; C01, New Orleans & Northeastern Railroad Company and others; 792, New Orleans, Texas & Mexico Railroad Company; 799, St. Louis & San Francisco Railroad Company; 1048, Louisiana Southern Railway Company; 1613, A. D. Hall, agent; 1951, Kansas City Southern Railway Company; 1952, Louisville & Nashville Railroad Company; 2043, Yazoo & Mississippi Valley Railroad Company; 2045, Illinois Central Railroad Company; 2138, Mobile & Ohio Railroad Company; 2174 and 2193, W. P. Emerson, agent; 4218, 4219 and 4220, Missouri Pacific Railway Company and St. Louis, Iron Mountain & Southern Railway Company; 4297, New Orleans Great Northern Railroad Company; 4944, St. Louis Southwestern Railway Company; and 4964, St. Louis Southwestern Railway Company of Texas.