more favourable treatment. This has not been established. It is no part of the obligations of the railways, under the Railway Act, to equalize costs of production through lowered rates so that all may compete on an even keel in the same market. This phase of the complaint fails.

In the hearing the ground shifted somewhat. Comparisons were made by counsel of the rates to Marlbank, with those to such points as Belleville and Kingston. This also has been referred to in the complaint. While Mr. Pullen stated in evidence that there was a competing cement plant at Belleville, counsel for the applicant laid no stress on the point. Counsel for the applicant alleged that these comparisons afforded evidence of discrimination as well as a measure of what should constitute a reasonable through rate to Marlbank.

The following tables shew distances, rates and earnings per ton per mile:

The rate to Marlbank is made up in the following way:

Black Rock to Napanee....237.....$1.05.....

.443c.

Napanee to Marlbank..... 36..... .45..... 1.25c.

The argument as to discrimination based on the above comparisons is concerned (a) with mileage, (b) with water competition.

Mileage. It is contended that it is unjustifiable to have the rate to Marlbank, ten miles further than to Kingston, 25 cents higher. To compare these mileages as if both were Grand Trunk hauls throughout, is not a proper method of comparison. It is

recognized that differences in traffic conditions are in general more important than mere mileage comparisons. In the Almonte Knitting Company case the Board recognized that the Canadian Pacific rate on coal to Almonte, seven miles from Carleton Junction, might justifiably be built up by adding an arbitrary of 20c. per ton to the rate to Carleton Junction. Almonte Knitting Company v. Canadian Pacific and Michigan Central Ry. Cos., 3 Can. Ry. Cas. 441.

When this principle is recognized as between main line and branch line mileage of the same system it is applicable in greater degree when the rate is made up of a long haul over a heavier traffic road and a short haul over a light traffic road. The Bay of Quinte is a low-grade tonnage road, and any comparison on the basis of Grand Trunk main line mileage alone is therefore inconclusive as proving discrimination.

Water competition. The rates to Belleville and Kingston are compelled rates based on water competition. At Belleville the competition of the water-borne coal from across the lake is especially effective. So far as the Grand Trunk haul to Napanee is concerned, water competition is not directly effective. Counsel for the applicant states that coal may be moved by water to Marlbank, but not in sufficient quantity to meet the needs of the business. That is to say, there is not effective water competition in regard to traffic important in amount. The argument, then, from the comparison of the Marlbank rate with rates subjected to effective water competition, also fails. The Marlbank rate must, then, be looked at from the standpoint of its general reasonableness. The rate as between the Bay of Quinte and the Grand Trunk is divided in the proportions of 30 and 70 per cent. This is equivalent to rating the 36 miles of the haul over the Bay of Quinte as having a constructive mileage of approximately 103 miles. As has been stated, this road is a low-grade tonnage one. For the year ending June, 1908, it carried 268,549 tons of freight -62 per cent. of this is represented by the items of bituminous coal, coke, stone and sand, lumber and cement, brick and lime.

The average ton-mile earnings of the road are very low-.1570 of le. The two important revenue producers of the road are bituminous coal and cement. The net earnings of the road are low— some $800.00 per mile. It does not appear, from the record or from the Government statistics bearing on the matter, that the 30 per cent. division is an unfair one.

So far as the Grand Trunk division is concerned, it is to be noted that its division of the through rate is lower than its local rate to Napanee. It is contended by the applicants that the absence of a terminal service at Napanee in respect of the through traffic should give a still lower division. The evidence, however, shews that there is a division of terminal service at Napanee between the Grand Trunk and the Bay of Quinte.

The Grand Trunk has stated its willingness to reduce its division of the through rate to $1.00 per ton. The Bay of Quinte states it is willing to participate in whatever through rate is quoted subject to receiving 30 per cent. The division of $1.00 to Napanee will give a ton mile rate of .422 of 1c. as compared with the rate of .418 of 1c. to Belleville, where there is effective water competition.

I am of opinion that an arrangement on the basis outlined above is fair and reasonable, and that an order should go for a rate of $1.43 per ton to Marlbank.

The Chief Commissioner and the Assistant Chief Commissioner concurred.

Excessive tolls—Passenger fares—Standard passenger and special freight tariffs-Filed-Similar distances-Same commodities-Special class rate tariff-Parity in rates-Another railway company—Similar business - Express tariff to be filed - Deficient car service — Passenger facilities May renew complaints — Insufficient information for the Board-Railway Act, secs. 2 (9), 350.

Complaint that the respondent corporation charged excessive passenger. freight and express tolls, and did not furnish sufficient car service and passenger facilities.

The respondent corporation operate a railway and collieries; own large areas of irrigated lands and town lots, and is the result of amalgamation of the Alberta Railway and Coal, Canadian North West Irrigation, St. Mary's River Railway, Alberta Railway and Irrigation Companies. Counsel for the respondent contended that the tolls should not be reduced and greater facilities furnished, because the railway and irrigation works did not pay, and the land and coal areas covered the deficits. The Canadian Pacific Railway Company recently acquired a controlling interest in the respondent corporation, and will probably operate its railway.

Held 1. That there was no evidence that the railway did not pay. 2. That the respondent corporation be required to file within a specified time, (a) standard passenger tariffs charging three cents per mile and one-sixth less for round trip tickets, (b) special tariffs of freight rates between all the stations on a basis that shall not exceed those of the Canadian Pacific for the same or similar distances and on the same commodities, (c) a special tariff of class rates not higher than the same tariff of the Canadian Pacific Railway for the same or the nearest equivalent distances, and (d) express tariff of tolls as required by sec. 350 of the Railway Act.

3. That the complaints relating to the respondent's express service and charge should stand for disposition until the general express enquiry is dealt with.

4.

That the complaint as to deficient car service and passenger facilities may be renewed if necessary at the expiration of six months.

THE application was heard at Lethbridge on the 8th of March, 1909.

L. H. Jelliff, for complainants.

C. F. P. Conybeare, K.C., for the company.

The facts are fully set out in the judgment of the Chief Commissioner.

July 22, 1909. THE CHIEF COMMISSIONER:-The respondents operate a line of railway in Southern Alberta running southerly from Lethbridge; they own large areas of land that are being irrigated under an extensive system in course of construction by the company; they own and operate coal mines and have large numbers of town lots in Lethbridge and Raymond.

The present corporation is the result of an amalgamation in July, 1904, of four corporations, viz., The Alberta Railway and Coal Company, The Canadian Northwest Irrigation Company, The St. Mary's River Railway Company, and The Alberta Railway and Irrigation Company.

At the hearing, the Board was furnished with but little information as to the financial position of the company, or of the organization, financial history, capitalization of the four companies prior to the amalamagation. Since the hearing, the amalgamation agreement of July, 1904, and the directors' report for the year ending June 30th, 1908, have been filed, and we have been left to spell out the position as best we may.

It may as well be said at once that the documents that have been given us, and such information as we were furnished with at the hearing, in no way present, with any minute detail, the financial history of this organization. Counsel told us at the hearing that all the outstanding stock, both common and debenture, represented actual cash invested. This may be quite true, and we have no doubt counsel was so instructed and fully believed to be the fact, but it is something that could be so easily proved and is of so much importance that we take the liberty of thinking should not have been left open to question. There are many complicated matters in the amalgamation agreement that do not explain themselves, and while desiring to studiously avoid