Appendix — ICC v. Baltimore & Ohio R. Co.

Supreme Court brief1957

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_ APPENDIX A. ,

_ The BALTIMORE and OHIO RAILROAD COMPANY, ,

| Canten Railroad Company, Western Marland Rail- -

way Company, Baltimore Association of Commerce,

the Baltimore Chamber of Commerce, the Steamship

Trade Association of Baltimore, Inc., Baltimore Cus-

- tom House Brokers and Forwarders Association, the

‘Mayor and City Council of Baltimore, Plaintiffs, and

Maryland Port Authority, Intervening Plaintiff, .

Meco. ;

UNITED STATES of Amcrica, Interstate Commerce Com-

mission, the New York Central Railroad Company,

| Erie Railroad Company, and the Pennsylvania. Rail- -

road Company and C. W. Boin, Agent, Defendants

“and

ditions Steel Corporation, M. A. Hanna Cui athe Ore

Company of Canada, National Steel Corporation

(Weirton Steel Company Division), Republic Steel

- Corporation, Wheeling Steel Corporation, the. Youngs-

town Sheet and Tube Company, the Port of New

York Authority, the Chamber of Commerce of Greater

Philadelphia, the Delaware River Port Authority, the

City of Philadelphia, Port of Boston Commission, the

New York, New Haven and Hartford Railroad Com-

pany, and the Boston Maine Railroad Company, Inter-

vening | Defendants.

Civil No. 9337.

UNITED — Dasdence Court -

District or MARYLAND °

"April 26, 1957

~” Before SOPER, Circuit Judge, CHESNUT and R.

DORSEY WATKINS, District Judges.

SOPER, Circuit J udge :

* Reported at 151 F. Supp. 258.

”

_. Wheeling, W: Va.

2a ;

This snit was brought by the Baltimore and Ohio Rail-

road Company, Western Maryland Railway Company, Can-

ton Railroad Company and certain civic authorities and ~

commercial organizations of Baltimore, Maryland, to. set:

aside decisions and orders of the Interstate Commerce Com- *-

mission which prescribed parity of railroad rates on im-

ported iron ore from the ports of Baltimore; Philadelphia

and New. York to seventeen destinations in the eastern por-

tion of the so-called differential or Central Freight Asso-

ciation territory: This area lies west of a line from Buffalo,

New York to Pittsburgh, Pennsylvamia ahd~ includes ~

Yeungstown, Ohio @ the north, Wheeling, West Virginia

on the south and other intervening steel préducing points: in _

- western Pennsylvania, gastern Ohio and jorthern West .

Virginia? The defendants, in addition to the United States

and the Interstate Commerce, Commission, include as ofig-

inal or intervening defendants the Pennsylvania Railroad

Company which serves the port of Baltimore as well as the

ports of Philadelphia and New York, the New York Central

Railroad Company and the Erie Railroad Company which |

serve-the port of New York, the Port of New York Author-

ity, the New York, New Haven and Hartford Railroad Com-

pany and the Boston and Maine Railroad Company which

serve the port of Boston, the Port of Boston Commission:

and divers producers and fabricators of font in the differ-

ential territory. %

The decisions of the Commission which are challenged i in

this prametns mark the departure from a une established

Sea Differential territory is defined in Baltimore Chamber of Com- |

merce v. Ann Arbor R. Lo. 159 I:C.C. 691, 692. The seventeen ©

opoints, all consuming or storage centers for iron ore, are Midland,

Farrell, Sharon and Sharpaville, Pa.; Martins’ Ferry, Mingo’ Jct.,

Steubenville, Lowellville, Niles, Struthers, Warren, and “Young-

town, Ohio; Benwood, E. Steubenville, Follansbee, Weirton and

| ere .

—

=n which has bait the rates ipplicable to both import

and export traffic to and from differential territory lower

. as to Baltimore than the viher Atlantic ports. ~ The differ-

entials were first established*in 1877 by agreement of the

carriers serving the territory in order to avoid misunder-

standings in respect to the geographical advantages of Balti-

more, Philadelphia-and New York, as affected by rail-and-

ocean transportation, so as to equalize the aggregate cost

‘of transportation between competing points in the west

and the domestic and foreign ports reached through those

cities. The differentials were,arbitrary in a measure sincc

they reflected only in part the lesser distances to Baltimore

and Philadelphia as compared with the distances to New.

York and Boston, but they were established by compromise

as the only means of advertising rate wars.? The differen-

tials applied to all traffic eastbound and westbound, domestic _

and export-import, between Central territory and the north

Atlantic ports. The differential ori eastbound @xport traffic.

from the differential territory was 60 cents per ton less

to Baltimore and 40 cents per ton less to Philadelphia than

- the corresponding rates.to. New York. On westbound im-

port traffic the same differential applied to third or fourth -

class and special cémmodity rates. Rates to Boston were

not to be less than those to New York on domestic or foreign

freight. In 1880/an attempt was made to modify the agree-

ment on the groand that changes had substantially equalized

ocean freights but after arbitration by the Thurman Ad-

visory Commission the differentials established in 1877 were

reaffirmed: od ’ |

‘While this arrangement originated in a voluntary # agree-

ment of the carriers it has been considered by the Commis- —

sion from time to time during the past 60 years when it

was brought to va tecnica s attention we comenpreint |

2 See Maritime Assn., Boston Chamber of Commerce v. A: A. R. R.

Co., veaaias 539, 567; 126 I.C.C. 199. .

interests i in Boston, New York, Philadelphia aa 1 Baltimore ;

and in each instance has been found lawful. — -

Prior to 1930 the differential was ithe’ to both

domestic and import-export traffic. In that year the Com-

missign removed all domestic class rates from ‘the scope

of the differential rate stru@ture.and preseribed new scales

of. class rates from the several ports, based primarily on

distance.* Under this new arrangement: the longer distances

from the three other ports resulted in a differential ‘on —

domestic traffic to and from Baltimore, which exceeded the

long established differential in its favor on import and ex-

‘port traffic. The domestic first-class rates to Youngstown

. from Baltimore were fixed at $2.01 per hundred pounds,

from Philadelphia-$2.16 per hundred, pourids, from New

York $2.31 per hundred poittids, and from Boston $2.70 per

hundred pounds. Since these rates did not cover import

and export traffic the railroads in 1932 published new im:

_ port and export class rates. .These were made the same —

as the new domestic rates so far as Baltimore was concerned

and the standard differentials in favor of Baltimore of 20

cents a ton wit pect to Philadelphia and 60'cents a ton

with respect York arid Boston were preserved, The

3 Fora Toke of the history of the differential, see In the Matter

of Differential Rates, 11 1.C.C. 13 (1905); Albany Port District

_ Comm. v. Ahnapee & W. ‘Ry. Co., 219 LCC. 151 (1936). It was.

. also.considered under varying circumstances in New York Produce

Exchange v. Baltimore & O. R. Co., 7 1.C.C. 612 (1898); In the

~~ Matter of Relative Rates upon Export and Domestic Traffic in

Grain and Grain Products, 8.1.C.C..214 (1899) ; Chamber of Com-

merce of N. Y.v.N.¥.C.& H.R. R.R.Co., 214 .C.C. 155 (1912) ;.

‘In the Matter of Import Rates, 24 I:C.C. 78 (1912) ; (Raltimore

Chamber of Commerce y. Ann, Arbor R. Co., 159 1.C.C. 691) (1929) ;

. Lighterage Cases, 203 1.C.C. 481 (1934); City of Philadelphia v.

Baltimore & O. R. Co., 231 1.C.C. '21 (1938) ; State of New Jersey

y. Baltimore & O. R. Co,, 24 I.C.C. 581 (1941); Port of New York.

Authority v. Baltimore & O. R. Co., 248 LCC, 165 (1941) ; Ex

Parte Grain from Buffalo to N.Y; 278 1.C.C, 31 ( 1950).

- *-Eastern Case Rates Investigation, 164 I.C.C. 314.’

‘ba

import-expert class rates, from the three _cities last men!

tioned thus became generally lower; than their domestic

rates. ,

For some reason, that is net explained, “the rates on iron .

ore from Philadelphia to Pittsburgh have been the same as

those from Baltimore to Pittsburgh since 1903. This parity,

_ however, prior to the present controversy, has been only a

paper equalization since there has been practically no move”

ment from Philadelphia to Pittsburgh and no attempt has

. been made by the Baltimore railroads to set up a differential

on this traffic.*

In .1949, in response to coniplaints from steel préducers. -

in the interior calling attentign to tlie increased volume of

movément and other changed conditions, the carriers under-

took a study of the rate structure and as a result the Balti-

-more and Ohio, the Western Maryland, the Pennsylvania

and connecting lines established, as of October 9, 1950, re-

duced rates on iron. ore from Baltimore’ to Pittsburgh and

also to steel mills in differential to the west. The

“Pennsylvania made a like reduction on iron ore from Phila-

delphia to Johnstown and Pittsburgh. The new rates ‘re-

tained the regular port differential to destinations in differ-

ential territory and parity between Baltimore and Philadel-

phia on traffic moving ‘to Johnstown and ‘Pittsburgh. . No

action was taken at this time to establish revised rates on

iron ore moving from ports other ‘than Baltimore to differ- .

ential territory, but the record of the conference ‘of rail-

roads shows that ‘‘it was’ understood the usual port differ-

-entials should be observed from the other neem Atle ntic

ports.’’ '

5 In the seven years from 1946 to 1952, inclusive, 2,160,000 gross

tons moved from Baltimore to the steel . mills in Pittsburgh; and

652,500 tons from Baltimore to Johnstown. No tonnage moved

from Philadelphia to Pittsburgh and only 8,333 tons, comprising ©

one cargo, to Johnstown. During the six years from 1946 to 1953

_ inclusive, approximately 647,000 tons moved from Baltimore to the

steel mills in the asin area and. none from Philadelphia.

, )

(

oa,

In August 1951, the Pennsylvania, anticipating an in-

crease in the vplume of imported iron ore and conscious

that it could not expect to share in the transportation of

the commodity. from Philadelphia to the interior withgnt

a’>quate unloading facilities at this port, announced that

it would erect a modern unloading ‘facility. at Greenwich

in South Philadelphia designed to cost not less than

"$10,000,000. It. proceeded ito erect such facility and had

spent the greater part of this sum before publishing reduced |

rates on iron ore, effective February 9, 1953, to which refer-

ence will now be made. Unloading facilities were installed

in Baltimore by the Canton Railroad i in 1917.

It was against this Background that the Interstate Oi :

merce Commission, in the decisions now under review, gave

its approval to parity of rates on iron ore moving from New

York, Philadelphia and Baltimore to Central territory, but.

denied parity to Boston. The case grew. out of the publica-

tion by the Pennsylvania of reduced rates on iron ore,

effective Fe ebruary 9, 1953, from Philadelphia to the seven-

teen points in differential territory, and the sinfiltaneous

publication of like rates,.by the New York Cenfral ftom the

ports of New York and Boston#and by the: Erie Railroad

from New York to destinations in the Youngstown area on

‘their lines. The effect of these publications was to reduce

-the rates on iron ore from Philadelphia, New York and Bos-

ton to Youngstown to $2.71 per gross ton, the same rate

which applied to Baltimore.® In order to meet this reduction

and to preserve at least in part the historic differential, the

Baltimore aad Ohio and the Western Maryland then pub-

lished, to be effective February 16, 1953, a reduced rate of

$2.51 per ton on iron ore from Baltimore to-those of the

seventeen points on their lines, thus restoring a -20-cent

differential in favor of Baltimore as compared with the

other three ports. No attempt was made lfy the Baltimore

® The rates are stated without the general: increase approved in

Ex-Parte No. 175. |

‘a

railroads to restore the siiichiiat differential of 60 cents . ah

over New York and Boston.

The Baltimore and Ohio. and the Western Maryland also

. published a reduction of.20 cents per ton, effective February

16, 1953, to Pittsburgh, Johnstown, Those and ‘Monessen

in order to establish a differential on shipments of ore ‘to.

Pittsburgh in accordance with the general port differential

structure and to preserve a proper rate relationship between

Pittsburgh and the other named cities. ‘The Pénnsylvania

countered with a rate reduction of 20 cents per ton, effective

February 16, 1953, from Philadelphia and Baltimore to the

four named cities, and a further reduction of 20 cents in

_ its rates from Philadelphia and Baltimore to the seventeen

points in differential territory, effective March 11, 1953.

The Baltimore and Ohio, the Gvesterti Maryland. and

‘divers Baltimore interests protested the rate reductions by

. the other railroads and all of the above-mentioned reduc-.

tions’ were suspended by the Commission pending an in-

vestigation instituted on February 6, 1953. This was fol-

lowed by a hearing and oral argument, and an order of

Division 2 of the Commission on February 5, 1954, which

approved the reduction originally published by the Penn-

' sylvania,-effective February 9, 1953, giving Philadelphia a -

parity with Baltimore, but cancelled:the tariffs of the New

York Central and the Erie equalizing rates from New York

and Boston with Baltimore. Division 2 also found tb&t the

February 16, 1953 tariffs of the Baltimore and Ohio and

the Western Maryland, and the March 11, 1953 tariffs of

the Pennsylvania were not just and reasonable and ordered

them to be cancelled. The Pennsylvania then published a

supplementary tariff making the equalization of rates ef-

fective February 19, 1954, whereupon the Baltimore inter- |

ests filed suit in-this court asking a restraining order pend-

ing reconsideration by the entire Commission. The court

refused to issue the order on the ground that the adminis: ~

trative process had not been completed, with the result that

parity rates from Philadelphia went into effect and have

since prevailed. The full Commission, on July 30, 1954,

. Stayed its order cancelling the rates from Baltimore, New

York and Boston and reopened the proceeding. Finally,

on October 1, 1956, the Commission rendered its decision,.

finding that the February 9, 1953 rates from Philadelphia

and New York were justified but that the February 16, 1950

rates from Baltimore, the March 11, 1950-rates from Phila-

delphia, and the February 9, 1953 rates from Boston were

- not justified and ordered them cancelled. In this proceeding

"we are concerned with the propriety of the Commission’s

action as to the rates from. Baltimore, Philadelphia. and

New York.’

The modification of rates on iron ore by the railroads

which serve the Atlantic ports in competition with Balti-

"more was brought about by important changes in business

conditions involving an increased demand for steel and an

increase. in the importations of iron ore which theretofore

had contributed little to the total volume of commodities

transported by the railroads from the coast to the interior.

The origins of the ore that has been and will be imported

through the Atlantic ports have an important bearing on’

the controversy. No figures are available for the years 1955, ©

1956 or 1957 since the record before the Commission was

closed on December 21, 1954, and the case is submitted to °

this court on the Commission’s record. An outline of the -

conditio .s prevailing prior to and after World War II and

until the Commission’s record was closed is set out in the

following excerpt from the report of Division 2 of the Com-

_ Inission: :

“Mines i in northern Minnesotag Wisconsin, and upper

Michigan have for many years been the sole or prin-

eipal source of supply for the iron-ore requirements of

steel mills in central and ,trunkline territories,- the

preponderance of the ore moving by rail to. Lake Su-

perior docks, thence by water to lower Lake Erie ports,

By 8 subsequent decision filed on March 19, 1957, the Com-

mission n reaffirmed its decision as to the Boston rate.

and by rail beyond. Prior td the end of: Wotld War II

in 194% importation of iron ore was comparatively light

and the preponderance of the ore imported was con-

sumed in furnaces at or near the eastern seaboard.

Some imported ore moved to steel mills in the Johns-

town and Pittsburgh, Pa. areas but little, if any, moved

- to mills west thereof. A few shipments which moved to

interior points were consigned to manufacturers: of

a, — or other commodities not produced by the steel

mills.

“Since the end of World War II, steel producers

have developed sources of supply for iron ore in Vene-

zuela, Chile, Liberia, Brazil, Sweden, and Cuba, and

this. basic raw material of the steel industry has been

imported im large volume.. Mines now being developed

in Labrador by the Iron Ore Company of Canada will ©

_ supply large quantities of iron ore for the furnaces. of

five steel mills in central territory which own stock

_ in: that. corporation, and to other consumers. During

the 6-year period from 1936 through 1941 from approx-

imately 2,000,000 to 2,500,000 tons of iron ore were im-

_ ported annually. The import movement. declined dras- ,

tieally during World War H, reaching a minimum of

402,096 tons in 1943, most of which originated in Can-

ada. - Following the war, importation of iron ore .in-

creased from 1,189,300 tons in 1945 to 10,145,415 tons

in 1951, the latter figure equivalent’ to over 4 times

the prewar tonnage. In 1952, a strike occurred in. the

steel industry and approximately 9,760,300 tons of iron

ore were imported during that year. It is estimated.

that within a few years 20,000,000 tons’ of iron ore

will be imported annually, a substantial portion of

which will move to furnaces in central territory. While

ex-lake ore will continue to move from the Lake Erie —

ports in large volume; it will be replaced by imported

ore to a greater extent than in the past.” .

The full Commission, in its report of October 1, 1956,

commented upon the increase in importations of iron ore

into the United States in the following excerpt from its

decision: ~~ ee ee aeigs

_ “Tron ore imported-into the United States in. 1948

originated in 28 foreign countries and aggregated 6,-

~ 10a

091,677 gross tons. By 1953 the ‘inl had increased

to 11 074, 035 gross tons. ‘The principal exporting coun-

tries in this period were Chile, Sweden, Venezuela,

_ Brazil, Liberia, and Peru. On and between, August 26

and October 6, 1954, a total of 1,511,875, gross tons of

ore were shipped from 13 fore ‘igh ports to north At-°

lantic ports. Of this.amount, 776,851 tons (51 percent)

entered the Port of Baltimore, 718,809 tons (48 per-

cent) entered the Port of Philadelphia, and .16,215

tons (1 percent) entered the Port of Boston. There was

no reported entry of ore at New York during this

period. Approximately one-third of this ore originated

at Seven Islands, Labrador, from which no tonnage

moved prior to 1954.”

Statistics furnished to the Commission show that during |

the years 1952, 1953 and eight months of 1954, 94% of all

the ore imported through the north Atlantic ports came

from Venezuela, Chile, Sweden, Peru, Brazil and Liberia,

amounting to 7,229,903 tons in 1952; 8,065,922 tons in 1953

and 6,746,335 tons in 1954. Bethlehem Steel*Corporation

and United States Steel Corporation consumed most of the ~

imports. .Thus, in the eight months of 1954 the aggregate

~ imports of these two corporations amounted to 77% ‘of the

total. . Imports to these corporations are not delivered to

the railroads but are consigned to their own facilities: at

Sparrows: ‘Point for the Bethlehem Steel Corporation and

Fairless (Morrisviii2, Pa.) for the United States Steel

Corporation. The facilitibe at Sparrows Point have a

capacity of 6,000,000 tons and those at Fairless have a

capacity of 2,000,000 tons annually. None of the ore de-

livered to Sparrows Point moves to differential territory.

_ We are concerned primarily with the importations of iron °

‘ore that are delivered to the railroads for transportation to

interior points subject to the published rates.

‘ Looking into the future, the most striking factor to be

considered is the assured pgospect that importations of iron

ore from Labrador will dominate the situation. From July

31, 1954, when these shipments began, to December of that

ft. lla

year, 1,375,747 tons were unloaded at Baltimore and Phila-

delphia ; and it seems certain that this was merely a begin-

. ning, for, as the Commission said in its final report; the

evidence leaves no donbt that ‘‘Labrador tonnage will in-

crease to 10,000,000 tons in 1956 and probably to a greater

extent in later years.’’ In short, importations from ‘Labra-

‘dor may be expected to constitute at least one-half of all |

the ore imported. The proportion of this business which

will come to Baltimore and Philadelphia, respectively, is

foreshadowed, although imperfectly, by what happened in

the last six months of 1954. In that: period 744,017 tons

came to Baltimore and 631,730 tons to Philadelphia. The

Philadelphia tonnage would -have-been greater -and the

Baltimore tonnage less by 113,210 tons but for a strike

which caused a diversion to. Baltimore of tonnage con-

signed to Philadelphia.

The effect of the abolition of. the differential between

Philadelphia and Baltimore, which became effective on Feb-

ruary 19, 1954, is shown to some extent by comparison of

‘deliveries of foreign ore from all sources to railroad piers

at the two ports in 1953 and 1954. In.the first year Balti-

more received 1,813,512 tons of which 808,875 were delivered

to the railroads for. shipment to the differential territory,

while Philadelphia received 1,113,917 tons of which 687,994 °

tons were delivered to the railroads to be. delivered, 20,561

tons to Pittsburgh and 667,433 tons to points east of-Pitts- .

burgh—none of it going to the differential territory. In

1954, Baltimore received 1,644,294 tons and of this 1,070,457

tons, went to destinations west of Pittsburgh; while in this

year Philadelphia received 1,564,844 tons of which ae 599

tons went to the differential territory.

The future movement of foreign ore to this country, espe-

cially ore from Labrador, is the all-important circumstance

in this case. The Labrador deposits are owned by the Iron

Ore Company of Canada, of which 27% is owned by the

M. A. Hanna Coal und Ore Company and the balance by

‘12a

- five steel producers * owning plants west of Pittsburgh in-

cluding twelve or thirteen plants in differential territory.

These corporations are entitled to share in the product in

proportion to their interests. The steel producers in differ-

ential territory will use their shares and the balance will be

sold, for the most part, to the Bethlehem Steel Corporation.

_ All of the ore is shipped from. Seven Islands, Labrador.

While some of it will move by routes not involved in this

proceeding, five or six million tons will move annually

‘through Atlantic ports to inland furnaces. The ore will be

‘carried in ships owned or chartered by the Iron Ore Com-

pany of Canada or the participating companies; and the

record shows that, in‘order to save transportation costs by

sea, the ore will be delivered,-in case of parity of railroad

rates, to the nearest port equipped with efficient unloading

facilities. The Commission found that the one-way ocean

distances from-Seven Islands ‘to the four Atlantic Coasts °

to be: Boston, 950 miles; New York, 1,187 miles ; Philadel-

phia, 1,320 miles, and Baltimore, 1,475 miles. If. the Chesa-

peake and Delaware Canal were used the excess. distance to

’ Baltimore over: Philadelphia would be 26 miles, but the

Commission found that the larger ore vessels cannot use

the canal at present. and probably would’ not use it if the

canal were deepened. The evidence shows that a 20,000 ton -

ore carrier with a speed of 14 knots requires three days

less steaming time on a round trip basis from Seven Islands —

to Boston, two days less to New York and twenty-one. hours

less to Philadelphia than to Baltimore; and that it costs

$2,000 per day to operate such a ship. Abolition of. the dif-

ferential of 20 cents per ton in favor of Baltimore and the

establishment of parity of railroad rates between Philadel-.

_ phia and Baltimore would cause shippers to route Labrador

ore destined for Coenen ee through the Port of

8 National Steel Co., Republic Steel | Corp. Armco Steel Corp.,

_ Tube Co., Wheeling Steel Corp. .

13a

‘Since the Commission’s decision of October 1, 1956, took -

no account of any shipments subsequent to. December 1954,

the effect of the parity of rates between Philadelphia and —

Baltimore in the intervening period was .ot_ascertained,

- although it might have.been done before ——

rendered. The record, however, throws soméfght, as we

have seen, on the shipments in the limited period between

‘ February 19, 1954, when the Pennsylvania put the parity

- rates into effect, and December 1954. The evidence directed

to this period, although necessarily meager, tends to con-.

firm the opinion of experienced witnesses heard by the Com-

mission, that under parity rates Labrador,pre destined for

differential territory -will move through Philadelphia and

not through Baltimore. The experience of the Canton Rail-

road emphasizes this conclusion. This is a shipping road —

with 37 miles of track in the Port of Baltimore, connecting

with the Baltimore and Ohio and the Pennsylvania by rail

and the Western Maryland by float. It construed the first

unloading facilities in Baltimore in 1917, in ‘which it has

invested $5,000,000 in reliance upon the differential. It is

- largely. dependent upon the importations of ore. In 1952,

its tonnage of imported ore comprised 55% of its total of .

~ which 39%. was iron-ore; and in 1953, the corresponding ©

- percentages were 66% and 28%, respectively, In the first

‘nine months of 1953, it received 499,000 tons of iron ore but

_in the same period in 1954 under parity this amount had |

diminished to 239,000 tons, .a decrease of 52%.

A similar situation exists with regard to the much smaller

amount of ore which is brought to this country from the Port

of Monrovia in Liberia. . This ofe* is controlled by the

Republic Steel Corporation, which has furnaces in differ-

ential territory and carries the ore in its own ships. In

1952, 420,000 tons were imported and it. was estimated that

_. in-1953 the amount would be somewhat larger. Heretofore

all or nearly. all of. this ore was delivered at the Port of

Baltimore. The ocean distances (miles) from Liberia to

the Atlantic ports are as follows: Boston, 3, 920; New York,

_ 3,973; Philadelphia, 4,074, and Baltimore, 4,194.

léa

_ The iron ore brought in from South America and Scan-

> dinavia has little bearing on the question at issue. The

_ Commission found that, in the first nine months of 1954,

94% of the ore which originated in Venezuela, Chile, Peru

and Sweden was consigned to the United States Steel Cor. .

poration and the Bethlehem Steel Corporation. Bethlehem

reeeived about 6,000,000 tons, none of which moves to dif- .

. ferential territory. It is estimated that United States Steel

will receive about 7,000,000 tons annually, of which 2,000,000 ~

. . tons will enter the United States through the Gulf ports and

‘2,000,000. tons more will*be consumed at Fairless. “There

will be a substantial movement. from the docks owned by the

" corporation at Fairless-by-rail. to -Pittsburgh. Facilities at.

Fairless permit the. blending of the iron before shipment

to Pittsburgh and this service will be improved, and when

this is done the United States Steel Corporation will aban-

don its practice of importing through Baltimore the iron

ore for use at Pittsburgh. The corporation is not interested

in the rate from Baltimore but desires a lower rate from —

Fairless to Pittsburgh. Baltimore has an advantage as -

to distances over the other ports with respect to shipments

of ore from South America, except Brazil, but a disadvan-

tage with respect to the shipments from Scandinavia.

Adequate unloading facilities are essential to the delivery

of iron ore at a point of entry. Canton Railroad, as we

have seen, was the first to establish such a facility in Balti-

more in 1917. The Western Maryland followed in 1930, and

its facility with subsequent improvements can now handle

three ships at a time. The Baltimore and Ohio pier was

built in 1950 and 1951 and cost $5,000,000. The capacity of

these three piers in Baltimore is 13,500,000 tons per year,

based on a 15% use of specially designed ore carrier type

ships, and if the use of such ships is raised to 65% the total

capacity will be increased. to 22,275,000 tons per year. These

facilities were constructed while the differential was in .

effect.

— March 1954, the Pombayteenle ane the first stage

of its unloading facility at a cost of $11,000,000. The capac- .

| | _ lb ' |

ity is from 3,000,000 to 6,000,000 tons of ore, depending on

the type of ship. An enlargement, which would have in-

creased the capacity of the facility by 50%, was ordered in

1954 and scheduled to be finished in 1955. The Pennsyl-

vania contemplates an ultimate expansion which would en-

able it to treble its original capacity. It estimated that it

needed 2,500,000 additional tons of ore per year to maintain .

‘its Philadelphia pier profitably. ‘These facilities were estab-

lished while there was parity of rates between Baltimore —

and Philadelphia on traffic moving to Pittsburgh.

Bethlehem at Sparrows Point ‘and the United States Steel

at Fairless each has its own unloading facility. The -first

has been in operation s since 1946 and the latter since January

* 1953.

New York and Boston have no modern ore unloading as

facilities and only a very small tonnage of. iron ore passes

through these ports. Without parity of rates with Phila-

delphia and Baltimore no soley. is planned at either lo-

cation.

The polation of the rates to the distances for rey iron

ore is transported from the. Atlantic ports to the differen-

‘tial territory is a factor necessary to be considered in this

case sitice 4 3 of the statute forbids a carrier to give any.

undue or unreasonable preference to any port or locality,

- or_to subject any port or locality to any undue or un-

‘reasonable prejudice. The short line distances of the rail-

roads from the several ports to Youngstown, Ohio, that is,

the shortest physical routes. over which traffic may be

moved without transfer of lading, although through rates .

and routes may not be -published, are as follows:

l6a

To Youngstown, Ohio :

. fe Difference in

Short Line Distance over

Distance Baltimore

From ‘miles - + miles

eee... Ge 112 ©

‘Baltimore 378. : —

‘Philadelphia Pa 424 46

Morrisville _.... =... S487 : 59

a 268

The short tariff route distances. between these points, -

_ that is to say, the shortest routes from each port over which

rates on iron ore are actually published, are as follows: —

- fe Youngstown, Ohio |

™

Excess over

_ the Shortest

Tariff Route.

from

Short Tariff. Baltimore

| - Route (W. Md.—.

From | " miles 381 . miles)

Philadelphia: : , et ,

es = ae 47

Morrisville: aie 2 %

EC <p o. peet

New York: © Sage

I ia tseccneancanets 569 . 188

8 fs . 612 . 231

Boston: . ey

_ oe ee 289

B&M. . 661 280

N.Y., N. H., & i. 692 311

For reasons of eonvenience, the Pennsylvania moves. -

iron ore traffie over longer and more circuitous routes from

‘6

both Philadelphia and Baltimore to Youngstown. The route

‘which if yses from Philadelphia (434 miles) is practically

. the same as its short tariff route-therefrom: (428 miles); ~

but instead of using its short tariff route of 404 miles from

Baltimore, it carires the shipments 423 miles through Perry-

ville, Maryland. If its actual operating route from Phila-

delphia is compared with its actual, operating route from

Baltimore, the difference in distance is only 11 miles; but -

if this operating route from Philadelphia is compared with

the short operating route from Baltimore —that of the

. Western Maryland: Railroad — or excess dis-

‘tane¢ is 53 miles.

- The decisions of the Commission are sal forth in the 1 re-

port of Division 2 on February 5, 1954, 291 I.C.C. 527, and

the report of the full Commission on October 1, 1956, 299

-LC.C. 195. The latter dealt principally with additional evi-

dence adduced in the interval and seems to have adopted

_ the report of Division 2 except that it approved the new

schedules from New York to the Youngstown area which

Division 2 had rejected. The reports recite in considerable

detail the history of the differential, hereinbefore set. out,

and the contentions of the opposing sides*; and the findings

° The Commission note@ the contentions of the Pennsylvania

that parity between. Baltimore and Philadelphia is necessary so as

not to stifle the importation of iron ore through Philadelphia and

so as to enable the steel producers to make proper use of the

new facilities at Philadelphia; that the differential was never in-

tended to apply to low-grade bulk material and hence parity did

not constitute a.departure from the former practice; that Baltimore

did not object to parity ‘with Philadelphia on traffic moving to the

Pittsburgh area for 50 years and that all imported iron’ ore moves

through ‘Pittsburgh; that the commercial interests of Baltimore

will not be injured since parity as far as the Pittsburgh area has

not disrupted the general port differential adjustment and the great

increase in imports of iron ore will provide ample tonnage for

Baltimore's loading facilities. On the other hand, the Commission

- takes cognizance of the contentions that jnterests serving the port

of Baltimore are entitled to reap the natural advantages flowing

from its location; that parity would deprive Baltimore of these

- 18a

of the Commission, which are.sometimes mingled with the

statement of the contentions of the parties, and the ulti-

mate conclusions of the Commission are then set forth. They °

may be summarized as follows: ©

. It is shown by a statement filed by the’ Pennsylvania in

support of its claim to parity, which the Commission seems -

to have found correct, that parity of rates on iron- ore ap-

plies both from’ Baltimore and Philadelphia to Steeltown,

Pennsylvania,. a steel producing point east of Pittsburgh;

also from Baltimore and Philadelphia to Buffalo, although

the route from Baltimore over the Baltimore and. Ohio is

190 miles and that over the Western Maryland is 165 miles

longer than the route from Philadelphia, over the Penn-/

sylvania. A similar comparison is made between rout

_ from Baltimore and routes from Norfolk to steel mills’in

Ohio and Michigan as to which parity prevails, although.

the distances from Norfolk are from 25 to 192 miles longer

than the distances from Baltimore. Likewise parity of

rates but disparity of distances exist in rates from Lake.

Erie ports to steel mills in the Youngstown and Wheeling -

areas, as to which reference is made to the decision of the

' Commission in Iron Ore Rate Cases, 41 I.C.C. 181, in which

the Commission pointed out that blast furnaces mus$ be

- operated continuously and that it is.of advantage to’the -

steel producers and also to the operators of the vessels to

. have more than one port available. It was also shown that

there is a movement of large quantities of eastbound ore

from ‘Erie and Buffalo to the ‘steel mills at Bethlehem, |

Fairless, Philadelphia and Sparrows Point under a parity

advantages and place the entire port differential rate strugture in

jeopardy by giving rise to demiands for reduced rates on other

imported bulk commodities; that the earnings on tonnage carried

. from Baltimore was substantially greater than on tonnage carried

from _ Philadelphia to the. differential | ry because the

movement from Philadelphia to = under this schedule.

| bo

19a

rate of $2.71-—notwithstanding the inequality of distances;

and it was said that the earnings under the proposed rates

from Philadelphia to steel mills im.the Youngstown area

~ compare favorably with the earnings under the $2.71 rate

from Erie and Buffalo to eastern furnaces. .

In both reports the Commission seems to have approved

the contention of the Pennsylvania that there are only.11

miles difference between the transportation ,routes from

-. Philadelphia and Baltimore to ‘the differential territory

and, therefore, the services from both ports are substan-

tially identical. In its final report the Commission said: .

“The Pennsylvania urges also that rates from Phila-

delphia the same as those from Baltimore are justified

by mileage and service factors. “The average ‘tariff-

route distances over the Pennsylvania to the 17 desti-. ~

nations in differential territory are 422 miles from

Philadelphia and 398 miles from Baltimore. Based on

these distances, the:equalized rates yield average ton-

mile revenues of 6.4 mills from Philadelphia and 6.7

mills from Baltimore. The actual operating route of

the Pennsylvania from Philadelphia is only 11 miles

greater than.its actual operating route from Baltimore.

In both instances, the movement is via Pittsburgh, and

. approximately 75 percent of either haul is oyer the

game tracks. Thus, the service over the Pennsylvania

is ¢ stantially identical from both Philadelphia and

. Baltimore.” * : :

This statement seems to say that, in considering differ-

ence of distange between Baltimore and Philadelphia, the

comparison should be made between the Pennsylvania’s

- ‘direct. route from Philadelphia and its unnecessarily long

Toute from Baltimore via Perryville, rather than between

the tariff route of the Penfisylvania from Baltimore and

the corresponding routes of the Baltimore railroads from

Baltimore. =

Division 2 of the Commission had little ‘to say about the

Movement of the Labrador deposits because they had not

_ begun to moye prior to February 5, 1954, when the report

’ 20a

was filed.. The Commission merely quoted an owner of

stock in the Iron Ore Company of Canada as saying that

five or six million tons of ore will be available for shipment

in, 1955 and that 10,000,000 tons are likel to be shipped in

1956. It is also pointed out, that vessels of eighteen to |

twenty-eight thousand tons capacity will be used in trans- —

porting the ore to the north Atlantic ports; that a large ~

number of railroad cars will be required; that economic. ©

necessity will require the movement to take the route from

Seven Islands to the mills entailing the lowest transporta- -

tion costs; and that alternate ports at equal rates .are re-

quired in ‘order to avoid. congestion and to give the: steel

mills the. opportunity to select the port to be used.

In the Commission’ s report, reference is made to its opin-

ion In the Matter of Rate Differentials, 11 I.C.C. 13, which

considered the Baltimore, differential in 1905. The Com-

mission said that at that time ocean rates favored the north- ©

erly ports but now iron ore moves in both chartered vessels

and vessels owned by steel companies, and. since 1920 ocean

rates generally have been equalized with respect to voyage

charters to the. north Atlantic ports, but in some circum-

stances there is a saving of cost in routing the ore to the

port nearest point of origin and that this might be true

on a time charter arrangement or for an integrated shipper.

The Commission then pointed out the approximate ocean

‘distances from various points of origin to the Atlantic ports ~

and also set out the figures which showed-the amounts of

Labrador ore received at Baltimore and at Philadelphia in

the period from July 31 to December 5, 1954. .The Commis-

sion, however, made no specific findings as to the ownership»

of the, vessels in which this ore was carried to the two ports

or aa to the difference in cost between a voyage to Philadel-

phia and a voyage to Baltimore. The Commission’s figures

as to the tonnage received at these two ports is limited to .

the period from July 31 to December 5, 1954, and no evi- .

dence was offered or considered as ‘to the shipments during

the year 1955 and 1956 preceding. the date of the Commis-

21a

sion’s decision. The Commission did not pass on the testi-

mony heretofore réferred to in this opinion indicating that

Labrador ore would seek the port ‘offering the lowest cost

. of transportation from the point of origin t to the destination

Bi steel producing territory... jf!

% i fThe Commission not undertake to appraise the rela-

2 vl weight of the vaijious factors entering in its decision,

but Division 2 stated the following general conclusions with

" rpespect to the propos | rates from —- New York

and Boston: ~

“The evidence in support of. the propo::d sities

ment from Philadelphia. is substantially stronger than

that offered in behalf of the proposed rates from New

York and Boston. We are convinced that, in view of

thé earnings that would be yielded by the suspended

rates from Philadelphia, such rates are not beldw a

minimum reasonable level. We are of the view further

that establishment of the proposed rates from Phila- |

delphia will not result in disrupting the existing port.

relationship on trafic generally to destinations in dif-

ferential territory. As indicated, the rates on iron

ore from Baltimore and Philadelphia to the Pittsburgh

area have been on a parity for over 50 years without

disturbing the port relationship on the other commodi-

ties, dnd no good reason appears why the extension

of this parity to ore-consuming points beyond | Pitts-

burgh should change this’ situation. The record. is

persuasive that the iron ore tonnage through Balti-

more will probably continue to increase regardless

of the movement through Philadelphia.

“Moreover, in administering the provisions of the

act the Commission is required to carry out the na-

tional transportation policy, which has for its ultimate.

objective the development, coordination, and preserva-

tion of a national transportation system adequate to

meet the needs of the commerce of the United States,

of the Postal Service, and of the national defense. The

_ evidence is certain that in the years to come a large .

proportion of the iron ‘ore used in this country will

: originate in foreign countries. This iron ore is and

will be an important factor in national defense. Es-

22a

pecially in case of national emergency, it is highly

_ desirable. that the needs of the steel industry be. not

‘jeopardized by forced réliance upon one port which

’ could be incapacitated. through congestion or other

. cause,.and that, in. the interest of national defense,

Philadelphia and Baltimore’ be placed on a rate parity

‘on imported iron ore as proposed in the schedules filed

“to bepeme~e effective .on February 19, 1953. Such a

= * not result in undue preference or prej-

udice.’ ;

| Division 2 reached the ultimate conclusion that the pro-

posed rates from Philagelphia to the differential territory

‘were just and reasonabl@ but that the rates from. New York

and Boston were not shown to be just and reasonable.

The general conclusions of the full Commission reaffirmed

Division 2 with respect to rates from Philadelphia. They

found that a substantial increase in iron ore imports would

continue in that Labrador tonnage would increase to 10,000,-

000 tons in 1956 and to a greater extent in later years, and

‘that the tonnage through Baltimore would probably con-

tinue to increase notwithstanding the maintenance of a par--

ity rate with Philadelphia and also with New York. The

Commission also reaffirmed the conclusions of Division 2

with respect to the necessity for parity in carrying out the

national transportation policy. . In this respect it said:

“As stated in the prior report, we are required to

administer the act so as to carry out the uational trans-

portation policy, which has for its ultimate ‘objective

the. development, coordination, and preservation of a

national transportation system adequate to meet the

needs of the commerce of the United States, of the.

Postal ‘Service, .and of.the national defense. Iron ore

is a commodity which not : oly is of importance to the

carriers in that it can and should reasonably. bear its

full share of the transportation burden, but it is of

vital importance to the national defense.. Thus, it is

highly desirable that the carriers be permitted, within

lawful bounds, to establish rates which will permit

the movement of this traffic through several fh teat

23a ie . 3

These matters, among others of record, have been

given consideration in reaching our conclusions here-

in.” 5 , s

New York and Boston rates :

The railroads serving New York and Boston pointed out

the importance of being allowed to share in the new traffic

based upon the importation of. iron ore so as to replace the

large revenues now received from domestic iron ore mov-

ing eastward from the Minnesota-Michigan ranges. The

railroads also stressed the fact that. business interests _

could not be expected to invest capital in constructing un-

loading facilities at New York or Boston unless parity of »

—rates was established with Baltimore and’ Philadelphia,

Sargnen the more northerly ports to share in the business;

they also emphasized the importance of having one or

more ports available to handle the new importations.

Division 2 of .the Commission, however, pointed out the

greater distances from New York and Boston to the differ-

ential territory and resulting in the smaller earnings at

these ports under parity of rates. It said:

«® © © From New York and Boston to the 7 destina-

tions in the Youngstown area, the short-line distances

average 487 and 642 miles, respectively, whereas to

the same destinations the short-line distances average

424 miles from: Philadelphia and 380 miles from Balti-

more. The average short-line distance froni Philadel-

phia exceeds that from Baltimore by only 11.6 percent

whereas the like distances from New York and Boston

are greater by 28 and 70 percent, respectively, than

_the distance from Baltimore. .

“The proposed rates from Philadephia compare

favorably with rates applicable on iron ore from and

to points in central and truckline territories: and thus

come within the ‘zone of reasonableness’ to which. ref-

erence is made in New York Central R, Co. v. United

States, supra. pick st gr rates from New York and

Boston would produce substantially lower revenues

from those from Philadelphia. Moreover, the record

24a

shows that the facilities at New York and Boston are

not adequate for the unloading of iron ore in sub-

stantial lots, and there is no positive indication that

adequate facilities would be constructed thereat or

that any substantial movement through ‘those ports

under the proposed rates could be expected. We con-

clude that, in the circumstances, the proponents of the

proposed rates from New York and Boston have not

. sustained the statutory burden placed upon them to

prove that these rates are just and reasonable.”

Subsequent to the dacialen of Division 2 additional testi-

-mony-was taken in which witnesses for the Boston and

Maine and the New York, New Haven and Hartford indi-

cated that unloading facilities would be established at

Boston if equal rates with Baltimore were permitted, and

similar representations as to the establishment of facilities

at New York were made by persons interested in the devel-

- opment of that port. It.was however made clear by all-of

the witnesses that facilities would not be established with-

out assurances of parity of rates.

The Commission then made a comparison of revenues

from the four north Atlantic ports to destinations in the

Youngstown area. In one computation, using short-line

distances, the following tabulation was made of the car-

mile and ton-mile revenues on an average load of 62 gross

tons and the rate from Baltimore of $3.035, which ineluded

the Ex-Parte No. 175 increase, i.e., a general increase ap-

= by the Commission to all. the rates:

Short- Line |

Distances. Car-Mile _ Ton-Mile

_From: miles cents mills

' Baltimore 1 . 378. 49.8 | 8.0

_ Philadelphia... 424 44.4 7.2

New York 490 38.4 6.2

Boston _..... ancien 646 291 ©. 4.7

The Commission then considered certain cost studies sub-

mitted by the Erie Railroad for the single line haul from. |

25a

New York to Youngstown and for the joint haul with other

ailroads from Boston, and stated the final conclusion:

“We have carefully considered all of the evidence

pertaining to the estimated out-of-pocket cost from

New York and Boston. After restating the costs on the

bases indicated, including the distribution of the costs

of freight-train repairs, depreciation, and rentals of

, other than mileage cars over freight-train car-miles,

loaded and empty, and the application of the unit cost

to the loaded and empty: car-miles of the imported ore

traffic, we conclude. that $2.647 and $3.42 woyld more

nearly approximate the out-of-pocket costs per gross

ton from New York and Boston, respectively. On these

bases, the rate of $3.035 would exceed fhe cost from

. New York by 38.8 cents: per gross ton, but would be

38.5 cents less than the cost from Boston.” :

On this basis the Commission found that the Baltimore

rate would be just and reasonable as applied to New York,

but would not be. just and reasonable as applied to Boston.

The Commission, also found that the $2.51 rate from

Baltimore to: Youngstown proposed by the Baltimore rail-

roads as of February 16, 1953, would not be just and rea-

sonable despite the fact that a comparison of the car-mile

and ton-mile revenues via short line d‘stances under the

$3.71-rate (without the Ex-Parte No. 175 increase) from

New York to Youngstown, with similar revenues under the

$2.51 rate from Baltimore, shows that the latter would’

exceed the former. The comparison is shown by the follow-

ing table: | ;

To Youngstown, Ohio

Car-Mile Ton-Mile

From: : Rate cents mills .

> Baltimore... $2.51 41.2 6.6

New York _......... - 2.71 34.3 5.5

In general, the ‘Commission concluded that the natural

advantages to which the Port of Baltimore would ordinarily

26a

be afi were outweighed by the need to maintain ports

of entry for iron ore at Philadelphia and New York and

that this should be accomplished by diverting traffic from

Baltimore to the other ports to such an extent that the

facilities already established at Philadelphia may be more

extensively and profitably used, and so that New York

would be encouraged to build facilities which it does not

now possess. r ee

[1] The weight to be given i‘ the administrative findings

of the Commission and the scope of the authority of the

_reyiewing court are well established.. The expert judgment

of the Commission in respect to matters in the field com-

mitted to it by Congress must be recognized and its con-

clusions, if supported by substantial evidence on the whole

record, must be accepted. The Court is not at liberty to

‘substitute its judgment for that of the Commission. As was

said in Interstate Commerce Commisstow v. Union Pacific

R. Co., 222 U.S. 541, 547, 32 S.Ct. 108, 111, 56 L. Kd. 308:

“In determining these mixed questions of law and

fact, the court confines itself to the ultimate question

as to whether the Commission acted within its power.

It will not consider the expediency or wisdom of the

order, or whether, on like testimony, it would have

are made by prima facie, true, and this court has

are made by law prima facie, true, and this court has

ascribed to them the strength due to the judgments

of a tribunal appointed by law and informed by ex-

perience.’ Illinois Central R. Co. v. 1.C.C., 206 U.S.

441, 27 S.Ct. 700, 51 L.Ed. 1128. Its conclusion, of

course, is subject to review, but, when supported by

evidence, is accepted .as final; not that its decision, in-

volving, as it does, so many and such vast public in-

terests, can, be:supported bya mere scintilla of proof,

but the courts will not examine the facts further than

to determine whether there was substantial evidence

to sustain the order.”

[2] The Commission is not required to make detailed

findings of fact but must make the basis of its decision clear

27a

so that the reviewing court may perform its function. The

matter was well stated by Judge Magrader in New York

Cont. R. Co. v. United States, D.C., 99 F. Supp. 394, 400,

affirmed Interstate Commerce Comm. v. New York Cent. R:

Co., 342 U.S. 890, 72 S.Ct. 201, 96 L.Kd. 667 : .

‘‘In Beaumont, S. L. d W. Ry. Co. v. United States,

1930, 282 U.S. 74, 86-87, 51 S. Ct. 1,75 L. Bd. 221, the

Supreme Court, while upholding a Commission order,

took occasion to criticize the Commission for the un-

necessary burden cast upon the: reviewing court by

failure of the Commission to include in its report a

complete statement showing the grounds upon which

its determinations rested. Just how far the Commission

is obliged by statute to go in this particular is not so .

clear as it might. be. The Commission does have the |

duty to set forth in its report the ‘basic’ or ‘essential’

or ‘quasi-jurisdictional’ findings necessary to support

‘ts ultimate conclusion, though it must be recognized "

that such requirement is sometimes obscured in vague *

- questions of degree. United States v. Chicago, M., St.

P. & Pac, Railroad Co., 1935, 294 U.S. 499,. 55 S.Ct.

462, 79 L.Ed. 1023; United States Vv. Baltimore & Ohjo .

Railroad Co., 1935, 293 U.S. 454, 463, 55 S.Ct. 268, 79

L.Ed. 587; Florida v. United States, 1931, 282 U.S. 194,

915, 51S. Ct. 119, 75 L. Ed. 291.”

See also United States v. Chicago, M., St. P & P. R. Co., 294

U.S. 499, 504-505, 55 S. Ct..462, 79, L. Ed. 1023; Eastern

Central Motor Carriers Association v. United States, 321

U.S.-194, 211-212, 64 S. Ct. 499, 88 L. Ed. 668 ; and Secretary

‘of Agriculture v. United States, 347 U.S. 645, 653, 74 S. Ct. -

826, 98 L. Ed. 1015, where the failure of the Commission to

explain adequately its departure from prior norms led to a

remand of the.case for more explicit findings. .

The specific question which the Commission decided was

whether the prospective increase in the importation of iron

ore, especially ore from Labrador requires or justifies the

striking. down of the long established differential in favor

of Baltimore in order to enable Philadelphia and New York

28a

to have a share of the traffic and thereby insure.their main-

tenance as ports of entry for the product.

‘The’ Commission in reaching its “conclusions must of

course give effect and adhere to the national transportation.

' policy declared by Congress, which provides for the pro-

motion of sound economic conditions among the several

carriers and the establishment of ‘reasonable charges for

transportation services -without unjust discrimination, un-

due preferences or advantages and without unfair or de-

structive competitive practices, to the end that a national

transportation system may be built up, adequate to meet

- + the needs of the commerce of the United States and of the

Postal Service and of the national defense. See Preamble

to 49 U.S.C.A. , §$§ 1, 301, 901 and 1001. However, in effecting

this policy it is made unlawful for any carrier to give any

undue or unreasonable preference to any person, locality or

port, or to subject any person, locality or. port to undue

or unreasonable prejudice or disadvantage. 49 U.S.C.A.

§3(1).. The statute also provides that when any schedules

stating a new rate are filed.the Commission is required to

have a hearing as to the. lawfulness of the rate and the

burden of proof is upon the carrier, proposing the rate tv

show that it is just and reasanable. 49 U.S.C.A. § 15.

[3]. In this case the Commission has concluded that- the

burden was met and we must determine whether the Com-

. mission has made basic findings sufficient to support ‘its

conclusions and whether there was substantial evidence to

support the findings. In upholding parity of rates for Bal-

timore, Philadelphia and New York the Commission has

disregarded the disparity of distances and thus in effect

has approved a lower rate from Philadelphia and New York

than the rate from Baltimore. This ruling, moreover, has

upset a railroad and Commission practice of many years

duration in which the factor of distance was given effect.

Such discrimination is not of itself illegal, for theté are’

-numerous instances amongst the myriad rates on file in.

‘which. disparity of distances are necessarily disregarded in

29a

the. operation of transportation systems. To condemn .a—

rate on this score it must be shown that, in violation of Sec-

tion 3 of the statute, the rate results.in undue or unreason-

able preferemtee or inflicts undue or unreasonable prejudice

upon certain territory involved. “See State of New York v.

United States, 331 U.S. 284; 305, 67 S.,Ct. 1207, 91 L. Ed.

1192; United States v. Illinois Central.R. Co., 263 U. S. 515,

524, 44 S. Ct. 189, 68 L. Ed. 417. ms |

What are the findings upon which the Commission relies

as the basis for its conclusion‘ that there should be parity

of rates between the ports notwithstanding the factor of

distance? As to Philadelphia and Baltimore they seem

to be: a

1. That there is parity in respect of rates between —

Baltimore and Philadelphia as.to other routes which

involve differences in distance;

2. That in any event the difference in distance to the

differential territory, measured from Philadelphia, and

~ Baltimore, is so insignificant that it should disre-

garded,and . pee

3 That the needs of the producers of steel and the

requirements of the Postal Service and of the national

defense make essential the maintenance of a plurality

= ports for the importation of iron ore into the United

tates.

[4,5] The propriety and sufficiency of these findings must

be appraised against the historic background in which the

differential in favor of Baltimore has been maintained. Un-'

doubtedly it originated in the natural advantages derived

from the shorter distance of the port to destinations in the

west and for this reason has been recognized for many years

as a dominant factor in the rate relationships between the

competing ports not only by practical railroad men but by

- impartial governmental authority in control. This practi-

cal solution of the difficulties arising from competi on was

_based on solid legal ground, for it is settled that the law

does not attempt to equalize opportunities among localities

30a

and that the natural advantage which belongs to a locality

does not constitute a preference. United States v. Illinois

Cent. R. Co., 263, U.S. 515, 524, 44 C.Ct, 189, 68 L.Ed. 417;

State of New York v. United States; 331 U.S. 284, 331-332;

67 S.Ct. 1207; Alabama G. S. R. Co. v. United States, 340

U.S. 216, 229, 71 S. Ct. 264, 95 L. Ed. 225. The Commission

itself is without authority to adjust rates and differentials

for the purpose of diverting traffic from ‘one locality to

another simply on the ground that too much traffic passes

through one gateway and too little through another. Texas

é Pacific R. Co. v. United States; 289 U. S. 627, 639, 53 S.Ct.

768, 77 L. Ed. 1410. ©

[6] This does nat mean, of course, that rates dre to be

rigidly proportioned to respective distances or that a car-

rier may not reduce its rates to meet competition within

the zone of reasonableness, but differences in rates based

upon differences in length of haul, density of traffic and .

other elements of the cost of service are within a long stand.

ing practice of rate making, and a rate may not be filed

for the purpose of diverting’traffic from one locality in order

_ to build up another. Texas & Pacific R. Co. v. United States,

289 U.S. 627, 636, 639, 53 S. Ct. 768. -Even if a reduced

rate is reasonable, it is unlawful if it results in undue pre}-

udice. State of New York y. United States, 331 U.S. 284,

297, 298, 67 8. Ct. 1207. The Commission in reaching its

conclusion must consider all of these factors and may not

condemn a differénce in rates “unless it is shown that it is

not justified by the cost of the respective services, by their

_ values, or by other transportation conditions.’’ United

States v. Illinois Cent. R. Co., 263 U.S. 515, 524, 44 S.Ct.

189, 193.

In passing upon the merits of the case, the Commission

gave no.consideration to the cost or value of the services

of the railroads competing for traffic at Philadelphia and

Baltimore. No evidence on these points was offered or re-

quired; but the ultimate finding of the Commission as to

Catena | from Philadelphia and Baltimore to Central terri-

3la

fory was that the difference is so insignificant that the

service from both ports is substantially identical. Evidence

to support this finding seems to us to be lacking.. Not only

does the disparity, which had been considered substantial___

for many years, still exist, but the only standard of meas-

urement proffered by the Commission for its finding was

obviously incorrect. The Cémmission declared that the

actual operating route from Philadelphia to Central terri-

tory is only 11 ‘miles greater than the operating route

from Baltimore. This seems convincing until it appears,

from a careful reading of the decision, that the Commis-

sion is comparing the distance vix the Pennsylvania from

Baltimore with the distance via the Pennsylvania from

Philadelphia and that in doing so it measures the distance

fromm Philadelphia over a direct reute, but measures the

distance from Baltimore over a. circuitous line through

Perryville, which the railroad company adopts for.its own |

convenience. Clearly this treatment was wrong. The com-

parison should be made on the same basis in each instance,

for example,. between the short line distances or between |

the short tariff distances from both ports, which shows a

difference of 47 miles in the one case and 24 miles in the®

other. It is fair to say that the. (Commission, contrary to

its former policy, either gave no weight whatever to the

factor of distance or found.that it was overborne by the

general policy of supplying the needs of national commerce

and the requirements of national defense.

“We do not overlook the existence of parity

despite disparity of distances in respect to other commodi-

ties over other routes to which the Commission referred in

its decision, seemingly as precedent for its present action.

There was nothing new in this situation. These other rates

had long existed but in spite of them the differential in

favor of Baltimore on traffic moving to the Central terri-

tory had been maintained and carriers serving the port in

reliance upon it had adjusted their rates and provided

and maintained adequate facilities. We think that these.

PS Abie 32a.

other rates furnish no reasonable basis for change. of view

on the part of the Commission.

It is obvious that the principal basis for the Connbetasl 8

decision was its finding that parity of rates on imported

iron ore moving .westerly from the Atlantic Coast to the

interior was necessary to insure’ the maintenance of New

York, Philadelphia‘and Baltimore as ports of etitry in fur-

therance of the policy of Congress to build up a national

transportation system. How far the Commission's author-

. ity extends in this direction is an interesting and important

question. The respondents stress the passage of the Act

of September 18, 1940, 54 Stat. 899, whereby the Act to regu-. '

‘late «commerce was.amended to include the introductory

declaration of the. national _transportation policy. This

amendment has been cited in a number of decisions which

hold that the Commission must follow it as a guide in the

enforcement. of all the provisions of the statute.’° No ofie —

suggests, however, that the Commission has general author-

ity to build up the transportation system of the country as —

it deenis best in disregard of the right of a locality to

enjoy its natural advantages, or in disregard of Section 3

of the. statute which prouibits unlawful preferences and

unlawful discrimination. At most the national needs con-

factors which have entered into the practice of rate mak-

ing from the beginning must still be taken into actount, /

- the Commission retaining its tates to give appropriate.

’ weight to each ef them.

(7] For our purposes it is enough to determine whether

there is substantial evidence to support the finding that a

radical change in the rates was needed to support the na-

affirmed 347 U.S. 984, 74 8. Ct. 850, 98 L. Ed. 1120: Atlanta & St.

Andrew's Bay Ry. Co. v. United States, DC., 104 F. Supp. 193;

United States v. Great Northern\R. Co., 343 US. 562, 576, 72 8. Ct.

985, 96 L. Ed. 1142: Pacific Inland Tarif Buress v. United States,

DC., 130 F. Supp. 473. , ee

33a

| tional policy. In the first place, it is to be noted that there

is no evidence of financial weakness on the part of the rail-

roads involved as has led the Commission in some cases

to fix rates in aid of the financial necessities of certain |

carriers. See New England Divisions cases [ Akron, C. € Y.

R. Co. v. United States], 261 U.S. 184, 43 S.Ct. 270, 67 L.Ed.

605. The decision of the Commission is based on the gen-

eral conclusion that the northerly ports will have no share

in the transportation of imported iron ore so long as the -

differential exists because ocean freights have been gen-

erally equalized since 1920 and the ore will inevitably be

shipped to the port which enjoys the cheapest railroad rate |

to the interior.

Definite findings are made as to the ocean distances from

major sources of iron ore to the north Atlantic ports, which

show the distances from Labrador to be 950 miles to Boston,

1,187 miles to New York, 1,320 miles to Philadelphia and

1,470 miles to Baltimore; and it is ‘said that a round trip .

‘ between Labrador and Baltimore requires about three more

days than a round trip between Labrador and Boston. The’

Commission, however, does not attempt to review the con-

- siderable body of testimony bearing on the relative costs

of ocean travel to the several destinations. A witness is

* quoted as saying that at the present time iron ore from

foreign ports moves both in vessels owned by the steel com-

panies and in chartered vessels; that charter agreements

may be voyage charters or time charters; that the ocean

rates of voyage charters are equalized to all North Ameri-

can ports; but that in some instances there is a cost saving

‘in routing ore to the nearest port ‘‘on a time charter or for

an integrated shipper.’’

These findings are vague and a for aes do not

show.to what extent differences in distance by.sea will in-

fluence the movement of the. ore. There was direct testi-

mony that water costs bear a direct: relationship to the time

spent in transit; that the investments in large ore carrying

vessels and operating costs are high, ranging from $1, 000 to

Sta.

$2,000 per day; that the near eason from Labrador i is

- short and that time consumed _ik- veer round trips is an

important element in moving the maximum tonnage to the

destination ; that vessels under a time rter and vessels

owned by the steel companies would be routed to the nearest

port, all other factors being equal ; and that.the ownership

of vessels by thé steel companies is expanding, The weight

of all this testimony tends strongly to support: the view-that

ocean costs will be an influential if not a ‘determining factor

-in selecting the ports of destinations, which basis is lacking -

for the general conclusion of: the Commission that without

parity of rates Philadelphia will have no share in the traffie..

On the contrary, shipments during a few months in 1954, the

only period considered, indicate that under parity the ore

will go to Philadelphia rather than to Baltimore, since Phila-

delphia enjoys the double advantage of smaller ocean costs _

y most modern unloading facilities. |

In the absence of specific findings, it ieee not seem reason-

_ able to destroy a long established differential on the strength

of which thé railroads serving, Baltimore have made large

investments and the commercial interest of the port have .

made their arrangements. Obviously it is no answer to

prophesy that the chances are that Baltimore will not suf-

fer a loss.of total tonnage under parity because the volume

of imports is expected to greatly increase. The port will

still be entitled to the benefits of its geographical position.

and the expected profits of the new business may not be

diverted merely to satisfy the desire of other pass to share

therein.

We think, however, that the record furnishes a: . veneeeatie |

basis for the decision of the Commission to retain parity.

of rates between Baltimore and Philadelphia in respect to

.traffic to Pittsburgh. Similar reaséns for the maintenance .

of the status quo apply as in the case of Baltimore. It is —

true that, so far as iron ore is concerned, only a paper rate

was involved until recently ; nevertheless, parity has existed —

35a

for more than 50 years with the acquiescence of Baltim@re,

and it was retairied without objection in the revision of rates

in 1950 when the rate of imported iron ore from ‘Philadel-

phia to the Pittsburgh area was reduced by the same amount

as the rate from Baltimore.. While there had been no sig-

nificant movement of iron ore from Philadelphia to the steel

mills in the Pittsburgh area during this period, there was,

as the report. of Division 2 of the Commission shows, a sub-

stantial movement from Baltimore t6 this district. The

Pennsylvania Railroad announced its intention, in August

- 1951, to erect a’ modern unloading facility in South Phila-

delphia with the obvious purpose to share in this traffic and

in its expected increase, but no objection to the existing

parity of rates came from the Baltimore. railroads until they -

‘made their tactical move in 1953 in order to preserve the

‘consistency of their position."’ In our opinion, it is of great

significance that Philadelphia interests have made a large

\eapital investment in providing unloading facilities in the

belief that the historic situation would be retained; and it

tunity to make use of the structure which they have set ‘up.

‘The lack of substantial basis for the allowance of parity

to the Port of New York is shown by what has already been

said; but it may be added that. the approval of parity be-

tween New York and the more southerly ports, notwith

standing considerable ‘differences in distances, strengthens

the impression that the Commission holds the view that the

conventional faetors of rate making must yield to consid-

‘1 The fespondent railroads contend that parity as to Pittsburgh

is inconsistent with the. differential as to the Central. territory,

pointing out that Youngstown, one of the points in that territory,

_ is 66 miles distant from Pittsburgh over the Pennsylvania Rail-

road as compared to 76 miles over the Baltimore & Ohio. This in- °

_congruity, however,does. not present a new element for it has -

- existed throughout the history of the differential and, in any event,

we are concerned not with the comparative distances from Pitts-

burgh but with comparative distancesfrom the ports of Philadel-

phia and Baltimore. ; |

36a

erations of the general welfare. Aside from these considera-

tions the New York decision rests on certain cost data

showing that on the Baltimore level a rate from New York’.

would exceed the costs by 38.8 cents per ton. For this

reason alone the rate was found to be just and reasonable;

and yet in the same opinion the Commission found that the

” rate of $2.51 from Baltimore, proposed by the Baltimoré

. railroads to take effect February 16, 1953, that is to say, |

20 cents under the current rate, would not be just and rea-

sonable, although the evidence shows that the return thereon

would exceed the. return.on the New York rate which the

Commission approved. As the jvur dissenting commission-

ers point out, the only -justification in the record for the '

proposed rates from New York ‘‘is bottomed solely on the

_ desire to meet the competition of Philadelphia and many

more.?’

We conclude (1) that the orders of the Commission should .

“be affirmed insofar'as they disapprove the schedules filed

to become effective on February 16, 1953, proposing reduced

rates from. Baltimore to the Pittsburgh and Central areas,

and the schedules filed to become effective on February 16,

1953 and March 11, 1953 from Philadelphia to the Pitts-

burgh and Central areas, respectively ; and (2) that the .

orders be vacated insofar as ‘they approved the schedules

filed to become effective on February 9, 1953, proposing re-

duced rates from New York to destinations in the Central

area, and that the continuance of such schedules should be.

enjoined; and (3) that, insofar as the orders approved the

schedules to become effective February 9; 1953, for reduced

rates from: Philadelphia to Central territory, the case

should be remanded to the Commission to make explicit

findings as to the relative costs of ocean shipping of im-

ported iron ore to the ports of Baltimore and Philadelphia

‘and as to the traffic therein to be reasonably expected -at

these ports, if parity is continued or if the differential is

restored, taking into consideration the volume of traffic

that has passed through these. -ports since February -_

ee 37a,

1954, when parity went into effect; and (4) that, pending

said findings and a decision lased thereon, parity between

.the ports of Philadelphia. and Baltimore be retained upon

the assumption that steps be taken to secure a prompt de-

termination. Pe |

The orders of the Conmission are modified and the case

js remanded to the Commission for further proceedings con-

. sistent with this opinion. :

‘ .

APPENDIX B

IN THE

DISTRICT COURT OF THE UNITED STATES |

FOR THE DISTRICT OF MARYLAND

Civil Action No. 9237

Tue Baurimore AND Ox10 RarLroap Company, Canton RatL-_

noap Company, Western Maryianp RaiLWay Company,

Baurimore- Association OF ComMERcE, THE BaLTIMORE

Cuamper.or Commerce, Toe Steamsuip Trape Associa-

. TIN: OF Baxtrwore, Ixc., Baurimore Custom Hovsr

"Brokers aNp Forwarpers Association, THE Mayor AND

Crry Councw or Baurimor:, Plaintiffs,

Unirep States or America, INTERSTATE ((OMMERCE Com-

mission AND THe Pennsytvania RarLroap Company, AND

C. W. Bors, Acent, anp Tae New York Centra, Rar-

noap Company AND Erte Rarroap Company, Defendants.

This 22nd day of May, 1957, the Court adopts the find-

ings of. fact and conclusions of law appearing in the

Opinion filed herein on April 26, 1957, and holds that the

“Interstate Commerce Commission’s Ofder of October 1,

1956 in its Investigation and Suspension Docket. No. 6074,

Iron Ore From Eastern Ports to Central Freight Associa-

38a

_« tion Points, should be (1) in part vacated and the con-

+ .tinuancé and enforcement of said part enjoined, (2) in part

| remanded to the said Commission to make more explicit

- findmgs, and (3) in part affirmed; To baa it is:

OnpERED, ADJUDGED AND DECREED |

1, ‘That the order of the Interstate Himaeiis Commis-

sion dated October 1, 1956 is vacated insofar as it approves

the tariff schedules on iron ore from New York filed to be

effective February. 9, 1953, and authorized the ‘establish.

- ment of the rates.on iron ore named in said schedules.

2. That the Temporary Restraining Order issued. by the

Court on October 26, 1956 enjoining the United States and

the Interstate Commerce Commission from taking, au-

thorizing, approving, or permitting any action, by any rail-

--road coimpany, particularly the New .York Central Rail-

_. road’ Company and the Erie Railroad Company, which

_ would have the effect, of establishing or making effective

the tariff schedules on iron ore from New York filed to

be effective February 9, 1953, is made permanent.

3. That the Interstate Commerce Commission, shall make

and enter an appropriate order requiring the New York

Central Railroad Company and the Erie Railroad: Com-

_—. pany ‘to cancel their fariff schedules on iron ore from New -

York. -published to be effective February. 9, 1953

fe 4. That the order of the Interstate Commerce Commis-

sion dated October 1, 1956 insofar as it approves the tariff

schedules of the Pennsylvania Railroad Company on iren

ore from Philadelphia filed to become effective February

_ 9, 1953 is not supported ‘by essential basic findings, and

* therefore is ‘remanded to the Interstate Cemmerce Com-

‘mission to 'make more explicit findings ‘as . structed by

the Court in the opinion filed herein.

5. That the rates named in the tariff schedules of the

Pennsylvania Rail from Philadelphia published to be-

come effective on Feb}uary 9, 1953 be-permitted to remain

39a

.’ in'effect pending said reconsideration and final decision by

' the Interstate Commerce Commission.

6. That the order of the Interstate Commerce Commis-

sion dated October 1, 1956 is affirmed insofar as it dis-

approves tariff schedules on import iron ore from. Balti-

more published to be effective February 16, 1953.

7. That the order of the Interstate Commerce Commis-

sion dated October 1, 1956 is affirmed-insofar as it, dis-

approves tariff schedules on import iron ore from Phila-

delphia’ published to be efective ey 16, 1953 and

March 11, 1953. —

Morris A. Soper:

_ United States Circuit Judge |

W. Carvin CHESNUT

_ Umted States District Judge

R. Dorsty WatTKINS

United States District Judge —

Fre Copy Test: |

> Witrrep W. Butrscuky

Clerk

By Westey L. Booze, Jr..

we ad 4 set Se SE eee

+ Se

C= 2

yr teat

SABES

yr 2

“ht¢ aa es

Kae Amn a)

At a General Session of the INTERSTATE CoMMERCE ComMiIs-

ston, held at its office in Washington, D. C., on the 1st

day of October, A. D. 1956.

_INvesticaTIon AND SusPENsion Docket No. 6074

4 Deputy Clerk

5 APPENDIX C

€

oe ORE From EasTeRN Posts TO CENTRAL FREIGHT

ASSOCIATION Points

It appearing, That on February 5, 1954, division 2 made’

and filed its report in the above-entitled proceeding, 291

40a

LC. C. 527, and found the schedules | Aled to become effec-

tive on February 9; 1953, proposing reduced rates on iron

ore, in carloads, from Philatelphia, Pa., fo destinations -in

the Wheeling, W. Va., and Steubenville and Youngstown,

Ohio, areas’ just and reasonable; but found the other sched-

ules not shown to be just and reasonable and ordered them

canceled,. and also denied fourth-section application No.

27721 filed in connection with certain of the rates; —

It further appearing, That the Commission, on July 30,

1954, reopened the proceédings for further hearing;

It further appearing, That by order dated October 11,

1954, we entered upon a hearing-concerning the lawfulness

of additional schedules as*enumerated therein filed by other

carriers proposing reduced rates on iron ore, in: carloads,

from Boston, Mass., to destinations in the Youngstown |

area, and suspended the operation of said schedules until -

May 21, 1955, and that the respondents have ee

the operation thereof indefinitely ;

And it further appearing, That @ full sipiceltatalti of

the matters and things involved has been made, and that

the’ Commission, on the date hereof, has made and filed a

‘report on further hearing; which report and the aforesaid

report of February 5, 1954, are — referred to and

made.a part hereof;

It is ordered, That the order of division 2 intend herein

on February 5, 1954, be, and it is hereby, vacated and set

aside, and that the respondents herein be, ard they are

hereby, notified and required to cancel the schedules found

not shown to be just and reasonable in the said report-on

further hearing, on or before October 29, 1956, upor not.

less than one day’s notice to this Commission and to the

general public by filing and posting in the manner pre-

scribed i in section. 6 of the Interstate Commerce Act.

Ala

Fovrta Section Orper No. 18483

Tron Ore—Ba.rtimore, Mp., To Donora anp Monessen, Pa.

By Fourth Section Application No, 27721, filed by Agent

_C. W. Boin for and on behalf of The Baltimore and Ohio

- Railroad Company and The Pittsburgh and West Virginia

Railway Company, authority is sought to establish and

maifitain rates on iron ore, in carloads, from. Baltimore,

. Md., and points taking the same rates, to Donora (Baird) —

and ‘Monsenen: ‘Pa., over routes as described therein, with-

- out observing the long-end- short-haul provision. of section

4 of the Interstate Commerce Act. A hearing having been

held and full investigation having been made, and the Com-

mission, on the date hereof, having made .and filed a re-

port on further hearing containing its findings of fact

and conclusions thereon, which report and application are .

hereby referred-to and made a part hereof ;

a 5 ordered, That the said application be, and it is

. hereby, denied. :

By the Commission.

Sy : Harotp D., McCoy, ’

Secretary.

(Szax) | ;

APPENDIX D

Statutes Involved

The National Transportation Policy, 49 US. C. preceding

§ 1.

‘‘It is hereby declared to be the national transpor-

tation policy of the Congress to provide for fair and -

impartial regulation ofall modes of transportation -

subject to the provisions of this Act; so administered

as to recognize and preserve the inherent advantages —

of each; to promote safe, adequate, economical, and

efficient service ahd foster sound economic conditions

in transportation and among the several carriers; to:

42a

encourage the establishment and ‘maintenance of rea-

sonable charges for transportation services, without

unjust discriminations, undue preferences or advan-

tages, or unfair or destructive competitive practices;

to cooperate with the severai States and the duly-au-—

thorized officials thereof; and to encourage fair wages

and equitable working conditions ;—all to the end of

developing, coordinating, and preserving a national

transportation system hy water, highway, and rail, as

well.as other means, adequate to meet the needs. of

the commerce of the United States, of the Pos al Serv-

ice, and of the rational defense. All of the provisions

‘of this Act shall -be administered and enforced with.

a view to carrying out the above declaration of policy.”’

“Interstate Commerce Act:

Section 1(5), 49 U.S.C. 1(5)

‘*All charges made for any service rendered or to -

‘be rendered in the transportation of passengers or

-property, or in connection therewith, shall be just and

reasonable, and every unjust and unreasonable charge

for such service or any part thereof is prohibited and

declared to be unlawful. 7s

Section 3(1), 49 U.S.C, 3(1) -

‘It shall be unlawful for ary common carrier sub-

ject to the provisions of this part to. make, give, or

cause any undue or unreasonable preference, or advan-

tage to any particular person, company, firm, corpora-

tion, association, locality, port, port district, gateway,

transit point, region, district, territory, or any partic-

ular description of traffic, in any respect whatsoever ;

or to subject any particular person, company, firm,

corporation, association, locality, port, port district,

gateway,. transit point, .region, district, territory, ‘or

any particular description of traffic to. any undue or

unreasonable prejudice or disavantage in any respect

whatsoever; Provided, however, That this paragraph

shall not be construed to apply to discrimination, prej-

udice, or disadvantage to the traffic of any other car-

rier of whatever description. ’’ .

43a

Section/14(1), 49 U:S.C. 14(1)

‘That whenever an investigation shall be made by

said Commission, it shall be its duty to make a report .

‘im writing in respect thereto, which shall state the

/eonclusions ef the Commission; together with its de-.

‘ eision, order, or requirement in the premises; and in

‘ease damages are awarded such report shall include

the findings of fact on which the award is made.”’

"Section 15/1), 49 U.S.C. 15(1) «

‘That whenever, after full hearing, upon a com-

plaint made as pfovided in section 13 of this part, or

after full hearing under an order for investigation -

-and hearing made by the Commission on its own initia-

tive, either in extension of any pending complaint or

without any complaint whatever, the Commission shall

be of opinion that any individual or joint-rate, fare,

or charge whatsoever demanded, charged, or collected

by any common carrier or carriers subject to this part

for -the transportation of persons or property as

defined in the first section of this part, or that any. -

individual or joint classification, regulation, or practice

-whatsoever of such carrier. or carriers subject to

the provisions of this part, is or will be unjust or

unreasonable or. unjustly discriminatory or unduly

preferential or prejadicial, or otherwise in violation of

any of the provisions of this part, the Commission is

hereby authorized and empowered to determine’ and

prescribe what will be the just and reasonable indi-

‘vidual or joint rate, fare, or charge, or rates, fares,

or charges, to be thereafter observed in such case, or

the maximum or minimum, or maximum and minimum,

to be charged, and what individyal or joint classi-

fication, regulation, or practice is or will be just, fair,

and reasonable, to be thereafter followed, and to make

an order that the carrier or carriers shall cease and

desist from such violation to the extent to which the

Commission finds that the same does or will exist, and

shall not thereafter publish, demand, or collect any

rate, fare, or chargé for such transportation other than

the rate, fare, or. charge so prescribed, or in excess of

the maximum or. less than the minimum so prescribed,

dta

as the case may be, and shall adopt the classification

and shall conform to and observe the regulation or

practice so prescribed.”’

Section 15(7), 49 U.S.C. 15(7).

‘‘Whenever there shall be filed with the Commission

any schedule stating a new individual or joint rate,

' fare, or charge, or any new individual or joint classi-

fication, or any new individual or joimt regulation or

practice affecting any rate, fare, or charge, the Com-

mission shall have, and it-is hereby given, authority,

either upon complaint or upon its own initiative with-.

- out complaint, at once, and if it so orders without

answer or other formal pleading by the interested car-

rier or carriers, but upon reasonable notice, to enter

upon a hearing concerning the lawfulness of such rate,

‘fare, charge, classification, regulation, or practice;

and pending sueh hearing and the decision thereon

the Commission, upon filing with such schedule and

_ delivering to the carrier or carriers affected thereby

a statement in writing of its reasons for such suspen-

sion, may from time to time suspend the operation

of such schedule and defer the use of such rate, fare,

charge, classification, regulation, or practice, but not

for a longer period tuan seven months beyond the time

-when it would: otherwise go ‘into effect; and after

_ .full hearing, whether completéd before or after the

' rate, fare, charge, classification, regulation, or prac-

tice goes into effect, the Commission may make such |

order with reference thereto as would be proper in a

proceeding initiated after it had become effective. If

the proceeding has not been concluded and an order

' made within the ‘period of suspension, the proposed

cuange of rate, fare, charge, classification, regulation,

or practice shall go into effect at the end of such

period; but ‘in case of a proposed increased rate or _

charge for or in respect to the transportation of prop-

erty, the Commission may by order require the in-

terested carrier or carriers to keep accurate account in

detail of all amounts received by reason of such in-

crease, specifying by whom and in whose behalf such

amounts are ia, and upon completion of the hear-

ing and@ecision may by further order require the

| © ail 7

45a

interested carrier or carriers to refund, with interest, -

to the persons in wuose behalf such amounts were .,

paid, such portion of such increased rates or charges —

as by ita decision shall be found not justified. At any

hearing involving a change in a rate, fare, charge, or

classification, or in a rule, regulation, or practice,

- after the date this amerdatory provision takes effect,

the burden of proof shall be upon the carrier to show

that the proposed change rate, fare, charge, classifica-

tion, rule, regulation, or practice is just and reasonable,

and the Commission shall give to the hearing and de-

cision of such questions preference over all other ques-

tions pending before it and decide the same as speedily -

as possible.’’ $f

Section 15a(2), 47 U.S.C. 15a(2)

‘‘In the exercise of its power to prescribe just and

reasonable rates the Commission shall give due con-

sideration, among other factors, to the effect of rates

on the movement of traffic by the carrier or carriers

for which the ratés are prescribed; to the need, in the

public interest, of adequate and effiqgnt railway trans-

portation service at the lowest cost consistent with the

furnishing of such service; and to the need of revenues

sufficjent to- enable the carriers, under honest, econo-

mical, and efficient management to provide such serv-

ice.”’ : .

| 46a

: t APPENDIX E

Rates Per Gross Ton Proposep on Inon One, PuBLISHED TO

Become Errective.on Frsrvary 9, 1953, From Puina-

DELPHIA TO THE WHEELING-STEUBENVILLE- YOUNGSTOWN

Area Wuacu, Arter Approval By THE I.C.C., BecaME

Errective on Fesruary 19, 1954.

; Rates Per

Destinations : Gross Ton

Midland, Pa. - : $2.61

Benwood, W. Va. ) 2.66.

East Steubenville, W. Va. 2.66 -

Follansbee, W. Va. aoe ia

- Martins Ferry, Ohio 2.66.

pat eh Mingo Jet.. Ohio . 2.66 .

ns Steubenville, Ohio - 2.66 :

Or “Weirton, W. Va. . 2.66 -

‘Wheeling, W. Va. 2.66

Farrell, Pa. - - 271

_ Eowellville,. Ohio | 2.71

‘ Niles, Ohio i 2.71 ~ |

Sharon, Pa. eo ties ite

Sharpsville, Pa. - | 2.71

Struthers, Ohio. ota 2.71

Warren, Qhio ° -. 2a

Youngstown, Ohio 2.71

Source: Exhibit 86, Column (3); Tr. 1165.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.