Transcript of Record — Clark's Ferry Bridge Co. v. Public Service Commission of Commonwealth of Pennsylvania

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IN DEX

Exhibits 104 to 10 Comparative statements as te

> revennes, tonpdge, ete), A. ©. Li. «cc vccsceasevews

Exhibit 108: -Frattic density iesen peau cena. Dae

exhibits. 109 and 110—Statements showing operat-

ing expeuses MUN GUI soe rece tere ccce (heer.

Exhibit 111-- ‘Tpnaphaintion of intventate i move-

ment TUCTETIY CTT eT rere rere Poewewecesoevesus

sxhibits 112 to 122—Analy ses of log mov ents to

Various POIMtS....... esse eeeeees eecceccre ewes ‘

‘Exhibit 123—Letter, Pittman to Gress Mfg. Co.,

_ a SE clstaas eaten Se el ala ea

Exhibits 124 to 126—Statements comparing per car

revenue On logs with other commodities..........

“Exhibit 127—Statement showing movement of lum-

Se i ee ee ene ere

Exhibit 128S—Statement, showing movement of logs.

wxhibit 131—Property investment sand operating

inconre phe SRREEECECRETOLETETT LL wer? Ler

Exhibit 132—Statement— showing property invest-

ment and operating revenyes.....s55 oY eae eens

Exhibit 133—Statement showing consist of log

i Pr ee Cnt a a ee

Excerpts’ from transcript of record before Sy Sy Ln

tional or net ratés under certain tariffs..........

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Origiat Pre

as ©

2345

2354

CD hd tater

at deded

2358

2360,

2Oo1

2362

2363

Woes TO, BON sc icacswnscdvstncavdsiosneesss 2365 *

Testimony of Wea Bh. Ue aciedev iene wes a sce 2366.

Testimony of G seorge i PU b ciéeacwedu wane - Sait

Additional Ynformation in connection with Exhibit

PE rT errr rT ye Te TI ere ere gresteese 2394

Report on further hearing proposed by E. J. Hoy

and P,S. Peyser, examiners..... Veuiedabes vd wee 2897

Order of: Pecember 24, 1931, ex parte ‘No. Wise cues 2434

Report and order on further hearing (copy) (omit- °

ted in printing) .....2.......6.: 7) oe ponhbunds 2435

6brder of July 28, 1932 (copy) (omitted in | poten:

TD cnn eccesesnennssses eb etedewtesenaesesetar 2406

Motior® for postponement of effective date of final’

order and order denying SamMe@........ 6c eee eee 2497

Petitions for further hearing in and reconsideration « ‘

Of proceeding... ce cceccrecceccesceceees Weeceeces 2500

' Order denying petitions for ‘reconsider: ation, ete.... ‘2550

Petition of Wilson Co. for reconsideration, ete:, on ;

ground of newly-discovered evidence.......... f. 2552

Repty to petition for reconsideration,-eke..6..... e-. 2562

Motion of State of Florida for reconsider@tion, ete... 2573

Petition of prguehiapncapin and petifion for farther

hearing Oe re i Se Cis oad apes eneessaces 2586

Reply of Sw Hat bu to petitions for further hearing,

EE EOE ETT OC OCTET TEEPE CORE OLIT ETL T ee 2601,

Order reopening proceeding for further hearing, ate. 2610

COUGH FORAIERING COUUC. 6 occ cccieec ess ces tesceces 2615

_ Exhibits 134®to 137—Stateménts showing propor- ~

3033 -

1179

1180

- 1182a

1183

118+

* W185

1186

1194

1205

1209

1239

1240

1245

1278 °

1279

1286

1293

1301

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Seg a ei eat GE tn RAN BY ASE ale Ce eR ee ene

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: INDEX vit 4

: Origipal Print ie

Exhibit 138—Statement comparing revenues per car , i

. under “@ummer Scale” with various other scales, . a

TE <a OR Oe ee aon 3038 °31321 ‘J

Ixhibit 140-A—List of certified tariffs included in .

Exhibit No. 140......< Licunsetaussdueee Mer ere - 040 1322 ¢

Exhibit 141—List of inbound cars.......... csecees SOR. hand

Ixhibits 142 and 143—Statements showing ship- ;

ments of over 70,000 pounds included in restitu- q

tion claim..... hudecepcsecicsbecsnteéene ticceeses 2 1325 i

’ Exhibits 144 and 1£45—Statements of log movements. 3069 1345 é

Exhibit 149—Memorandum of rough material rates :

agreed upon at joint conference................6. 3072 1347 q

Exhibit 150—Statement of movement of logs, ete... 3074 1350 |

oxhibit 151—Nchedule of rates, August 11, 1932 .. 3075 1351 a

Exhibit 152— Statement of revenue on logs at evanalt q

ME HEE, occcunshGaces ER ep pets i Sa 3080 1357 1

‘ Exhibits 153 to 155—Statements‘ as to rates and f

MOCO sg 6.6 o06 Os be6c vee tb et 0668 eee ees 3081 1357

Exhibits 156 to 160—Statements showing mov eutent

of logs, lumber, and shingles.;........ Ceueeneeey "3084 1360 : ;

xhibit 162-—Statement showing logs received by

WE: cha casecassdearesssacnesse: Wibewkers veee 8100. © 1872

Seeond report and order on further hearing (copy ) ei

(omitted in printing) .¢........e.ee bese. seedveus 3101 {

Order of January 19, 1933 (copy) (omitted in 4

ppintingd) .occcsvevds Vedacendwaens imiitnvekescss See.

Petition of F.C. Buffum Co. for’ postponement of

efféctive date of order and for reconsideration, :

ete. (copy) (omitted in printing) ..........cceees 3123

‘Answer of defendant to petition for reconsideration,

OO. nisaees rere Liceuebesecseesbseeurnesdense 3141, 1374

Order denying petition for reconsideration, etc..... 31444 1376 ‘

etition of Wilson. Co, for reconsideration on ground , |

of additional newly-discovered evidence (copy) $x

(omitted in printing) eee eg RNR oe Nay 3145 ¥

Motion-of State of Florida for reconsideration, ete.

(copy) (omittéd’in printing)........... ee a aa e'b * £160

Order denying. petitions for reconsideration, ete.. 3179 1377

Replies of defendant to motions for serensideeation. .

OG. b02% Cheeceeeens ere vee eebweeeeeers seeueveoe, Glee 1377

Petition for appeal...........46- ECU SR GOCE O UR OES eC «+. 3192 1385"

Assignments of error......... BE PL rere Te im: ee

Order granting appeal. ......+++++. gcduedeckeeeb esau 1393 — .|

Bond. oMsappeal. . Se hecens - (omitted in printing). 3208 4

Citation and service. a PRP (omitted in avinting).. .. 8212 q

Notice of appea dante Gass pi gukeeveteCer art rs evcee GSl8 1395

Priecipe for transcript of record...........eeeeeeeaeees 3227 1396

‘Clerk's certificate... .....c.eeee. (omitted in printing).. 3236

Order directing easiaadtbes of original e , 8238 1401

Order enlarging time...... ShREOV COKER E CHENG CKO EHEC Ss Cee 1402 !

Statement of points to be relied. upon and designation as to

FOCOPG 66000 PCS Ce OENE NS ORR MERN ON OEES Chvheecaeee 3248 1402

Stipulation as to printing record and exhibits... ciueees eeeeee 3256 1409

peaks

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[fols. 1-4]

IN UNITED STATES DISTRICT COURT -FOR THE

NORTHERN DISTRICT OF GEORGIA, ATLANTA

DIVISION

In Equity. .No. 690

a >

STATE OF FLorIpA AND EXUGENE Ss. —— ws, Mair ——s

(Greener, and Tucker Savage, as and ( onstituting Florida

Railroad Commission, Petitioners,

| Ve

Unirep Srates or AMERICA, INTERSTATE COMMERCE

Commission, Defendants

Brit or ComMpPLaAINt

To -the Honorable Judges of the District Court of the

United States in ‘and for the Northern District of

Georgia: ——

The State of Florida, by Cary D. Landis, its Attorney

General, and Eugene 8S. Matthews, Mamie Eaton-Greene

and Tucker Savage, as and constituting Florida Railroad

Commission, by T. T. Turnbull, Special Counsel for said

Florida Railroad Commission, bring this their bill of com-

plaint against the United States.of.America and Interstate

Commerce Commission, and thereupon respectfully show

as follows: | > °

* = «x 1 ny

That the petitioners, Eugene S. Matthews, Mamie Eaton-

Greene and Tucker Savage are the duly elected, qualified

and actigg Railroad Commissioners of the State of

Florida; that as and constituting such Florida Railroad

[fol.5] Commission they are, under the constitution and

laws of the State of Florida, charged with the duty and an-.

charges for transportation service performed b railroads

as common carriers in intrastate commerce in the State of

Florida, and are authorized and- empowered to bring and

maintain this proceeding.

thority of supervising, regulating and rmed if a and

1—342 a.

6 ey"

That the United States of America is made defendant

herein by virtue of those certain acts of Congress known

as the Commerce Court Act (36 Stat. L. 539), and the Dis-

trict Court Jurisdiction Act (38 Stat. L. 219). The defend-

ant Interstate Gommerce Commission is an administrative

tribunal created by Act of Congress, February 4, 1887, and

whose duties and powers are defined in such act and amend-

ments thereto and supplements thereof.

> | . 3

That the Georgia Public Service Commission is an ad-

ministrativ e tribunal created and existing’ by authority of

law under the constitution and statutes of the State of

Georgia, having its official residence in the City. of Atlanta

in the northern District of Georgia, and so within the juris-

diction of this Court.

- ) 4 | *,

That the Atlantic Coasf Line Railroad Company at all

times herein mentioned has owned .and operated various

lines of railway in the States of Georgia and Florida. That

for the transportation of logs, over six feet in length and

other than walnut, cherry and é¢edar logs, within the State

of Florida the Atlantic Coast Line Railroad Company

(fol. 6] voluntarily established in the year A. 1D. 1914, and

thereafter voluntar ily continued in effect and now charges

a certain mileage seale of rates known as the ‘*Cummer/

Seale’’, which, for varying distances up to 170 hiiles, pro-

vided varying rates ‘‘per car of 50,000 pounds, @xcess in

proportion, -to be loaded and unloaded by ow ner and not

to be unloaded on the Railroad’s right of way.’

That under the laws of Florida said Cummer. Seale be-

‘ame and was and:still is the legal and Jawful rate for the .

transportation, of such logs in intrastate commerce within —

the State of Florida, aud that no change ever coubkd-or

now can be made in said rate without a hearing duly had -

-after notice duly. given to all interested parties by said

‘Florida Railroad: Confmission and the consent. of said

Florida Railroad Commission duly given after such hear-

ing in the manner prescribed : ‘by the laws of the State of

Florida.

‘

’

‘

loads of loys.

; 3

Odie

That over such lines of railway the Atlantic Coast Line

Railroad for many years prior to February 8, 1928, trans-*

ported for shipment wholly within the State of “Florida

under said Caummer Seale of rates vast numbers of car

: 4 ss we

)

That for many years prior to February &, 19: 28, said At-

lantie Coast Line Railroad Company had also published

and filed with the Interstate Commerce Commission and

continued.in effect certain rates which would be applic ible

to any movement of such logs, viz, logs over six feet iti

length and other than walnut, cherr y and cedar logs, over |

its lines front Florida origins to Georgia destinations, which

said rates, were higher in amount for like distances than

the so-called ‘*Cummer Seale’? applicable for the like dis-

-[fol.7] tances and under the eertain conditions’ between

points in the State of Florida as above described.

That there never was any movement of ‘such logs under

said interstate rates, nor was there ever any movement of

such logs after February 8, 1928, under the new interstate

rates then established for ‘such traffic (in the event there

should be any such traffic), by the order of the Interstate

Commerce Commission as is hereinafter set forth.

On or about to-wit, May 3, 1926, said Georgia Public

- Service Commission, in its own name, filed with the Inter-

state Commerce Commission a certain complaint against

the Atlantic Coast Line Railroad Company. In such com-

“plaint it was alleged’ that the-rates of freight oy logs’ pub-

lished by the Atlantic Coast Line Railroad as applicable to

shipments of such commodity -from origins on its line in

Florida,to destinations on its line in-Georgia then were

and thereafter would be unjust and unreasonable in viola-

‘tion of the provisions of Section 1 of the Interstate Com-

merce Act. It was further alleged in sueh complaint that:

the contemporaneous publication of such interstate and

— intrastate rates above described constituted and thereafter

would constitute undue prejudice and disadvantage to

Georgia Lumber Manufacturers and Georgia communities

and. unjust discrimination a interstate ecommerce to

the undue pr eference and advant: age of shippers of logs

between points in Florida, in violation of the provisions of.

Sections 3 and 13 of the interstate commerce act.

i O7 *

) ie |

Thereupon such complaint was served by the Interstate

Commerce Commission upon the Atlantic Coast Line Rail-

road Company, which;*thereafter, and in due course, filed

aa ’

with the Interstate Com neree Commission its answer

[fol. 8] thereto and in such answer that railroad denied

that there was or had been-qny.violation on, its part of the

interstate commerce act, and demanded that ‘‘it be hence

dismissed.”’

That the Interstate Commerce Commission in éompliance

with Section 13 (3) of the Interstate Commerce Act, noti-

fied the State of Florjda and the Florida Railroad Commis-

sion of the pendency of such proceeding before it, and that

said ‘Florida Railroad Commission upon the hearing and

argument of the cause before said Interstate Commerce

Commission appeared in defense of its jurisdiction of intra-

state rates and of its power and authouity with respect

thereto. {

That certain parties filed interventions, some in support

of. and some in oppositiow fo the complaint, in said pro-

ceeding, said proceeding being‘ known as ‘‘Georgia Public

Service Commission v. Atlantic Coast Line Railroad Com-

pany, Interstate Commerce Commission Docket #18364",

_and such interventiong were received and allowed in behalf

of divers of said parties, including among other Brooks-

‘Seanlon Corporation, Cummer Cypress Company and Wil-

son Cypress Company. That said last named interveners,

with others, all of whom were shippers of logs in Florida,

filed their interventions aforesaid in opposition to so much

of said complaint -of said Georgia Public Service Commis-

sion as alleged any violation of Sections 3 and 13 of the

interstate Commerce act by the respondent Atlantic Coast

Line Railroad Company. But each and every ‘order per-

mitting such intervention expressly provided that the per-

mission to intervene therein granted should not be con-

strued to‘allow the interyener to introduce evidence which

would unduly broaden the issues raised in the complaint.

eee tae Ye ea nape SNE ATS Mp, a MN ER ke oe Ce ee ee eee Pit BP APR APNE RE AI AOL

7 /

4 .

fam.

SatretAt a:

Cr.

[fol. 9] Thereupon public hearings were had by said Tn-

terstate Commerce Commission in said proceeding, at which

hearings evidence was introduced by said Georgia Publie

Service Comniission, said Atlantic Coast Line Railroad and

divers interveners who had intervened in support of the

' ‘ complaint. * At the conclusion of suit evidence the inter-

veners, including those above named, who had intervened

o in opposition fo the complaint submitted ald. filed a motion |

to dismiss: the proceeding in entirety on the ground that.

there was a total insufficiency of evidence in any way or

remotely tending to. sustain atry- ‘allegation i in the: complaint

_or sufficient to-constitute a cause of action within the power

of the Interstate Commerce Commission. , Said motion was

taken under advisement and the hearings proceeded. There-

! upon the petitioners here, the above ‘named interveners

and the other intervening shipper defendants referred to,

without waiving their motion to dismiss, submitted a sub-

stantial amount of evidence, which was received and al-

lowed and made a part of the record in said proeeedings.

That. in the course ‘of said proceeding the complainant,

Georgin Public Service’ Commissién, averred that the end

Vee

At Benes

sion of the then effective intrastate Flerida log rates (Cum-

mer Serle) interstate .into Georgia aud took the position

of record that the proceeding was ‘‘not a revenue case.”’

In the production of its evidence the defendant Atlantic

#5 SIRS tines

then effective intrastate Florida log rates (Cummer Scale)

5 were not compensatory, and stated as its position of record

that it had not made and was-not making any proposal to

revise those intrastate rates. Vi

lfol.10] That thereafter said Interstate Commerce Com-

merce li its report and order hereinafter mentioned denied

; the aforesaid. motion to dismiss said proceeding.

v4 That thereafter on, to- wit, August 2, 1928, Division 4 of

i said Interstate Commerce Commission rendered its report

and order in said proeeeding.

That in and by such report and order it was found and —

concluded by said Division’ 4 of said Interstate’ Commerce —

Commission that the interstate rates on logs published by

the Atlantic Coast Line Railroad Company to Georgia des-

“sh

soughtpto be achieved under the complaint. was the exten- .

~ Coast Line Railroad disclaimed any contention that the’

ee ete at ee ee

Baer orn wale

{

t -

tindations on its lines from Florida origins on its lines north

of and‘including Jacksonville, Gainesville, Burnett’s Lake

and High, Springs for -distances not exceeding’ 170 miles

were, and would be, unjust and unreasonable te the extent

that they exceeded, or might exceed, a distance séale of

rates: therein prescribed, which rates said Division 4 found

were and would be reasonable; and which rates said At-

lantic Coast Lite Railroad Company was required to estab-

_ lish on or before October 10, 1928.

That in and by such report the Florida intr stata rates

(Cummer Scale) were ‘found to result ‘‘in undue prefer-

ence “ee 3 advantage of shippers of intiastate traffic within

the State of Florida, in undue prejudice to shippers of in-

terstate traffie from points in the State of Florida to points

im the State of Georgia,. dnd in unjust discrimination against

interstate commérce’’, and in and by said order said At-

lantie Coast Line Railroad Company was required to estab-

lish earload rates for logs (except walnut, cherry and

_cedar) in intrastate commerce ‘within the State of, Florida”’

which, should be the same as the rates prescribed by the In-

terstate Commerce Commission as réasonable for Sig

[fol. 11] portation in interstate commeree from points i

the northern portion of Florida to destinations in iar

12 n . ; <&

That after the rendition of said report and order the ef-

fective date thereof was by stibsequent orders of said Divi-

sion. 4 of said Interstate Conimeree Commission extended

to Fel uary 8, 1929, and said order was on February dD,

1929, amended so.as that it should not be applic able to logs

of the tariff description involved less..than sik feet in

length. , ,

‘That on, to-wit, the 27th day of November, 1928, sour

petitioners filed in this Honorable Court their bill of :eom-

plaint against the defendants, United States 6f America

and Interstate Commerce Commission, wherein and whereby

your petitioners souglit to annul, set aside and enjoin that

portion of the aforesaid order of the Interstate Commerce

(Commission wherein and whereby said Interstate Com-

merce Commission attempted to require said Atlantic

Coast Line Railroad Company to establish, put in force and

ae fs

maintain rates for the transportation of logs in intrastate

commerce within the State of ‘Florida which should be the’

same as those prescribed by said Interstate Commerce

Commission as reasonable for transportation in interstate:

commerce, for distances not exceeding 170 miles, from

points in the State of Florida, north of: and including Jack-

‘sonville, Gainesville, Burnett’s Lake and High Springs, to

destinations in the State of Georgia. That answers were

filed by the defendants to said bill of complaint, and

Georgia Public Service Commission \ was permitted to in- ~

tervene and file its answer thereto. ;

That at the same time your petitioners filed their afore-

[fol. 12] mentioned bill of complaint; two other. bills of

complaint seeking similar relief ‘were filed in this Honor-

able Court against the same defendants, one by the Wilson

- Lumber Company of Florida’ and the other by Brooks-

Scanlon Corporation, the Wilson Cypress Company and

the Cummer Cypress Company.

a 14

a ; aoe ie .

That said three suits were consolidated and heard before

} a court of three judges as required by the applicable statute.

That this Court. in its opinion, construed the order of the. .

Interstate Commerce Commission in.so far-as it was ap-

plicable to intrastate rates in Florida as being limited to

points of origin on the Atlantic Coast Line Ruitfoad i in the

northern part of Florida, as the Interstate Commerce Com-

mission had confined its order to those points of origin in

fixing interstate rates, and this {‘ourt, in‘the course of its

‘opinion, stated that a‘eonstruction that the order com-

plained of fixed intrastate rates for the whole of Florida

‘‘would probably nullify the order’’.. That thereupon this

Court sustained said order upon this narrower construction

and decrees were entered on, —— 17, 1929, in

said three suits dismissing the bills:

. ° * ° yy

i f 15 ° y

That thereafter on, to-wit, February 7th, 1929, effective

February 8th, 1929, said Interstate Commerce Commission,

without notice to your petitioners and without any ‘investi-

eation or proceeding whatsoever, amended its order with

. respect’to intrastate rates, ‘‘for the purpose of clarifica-

y tion’’ by substituting for the phrase ‘‘within the State of

BSS AG DBE DIN Rie REDE 0ST LEE ROSE T REPRE GS OME GE LAM SE ha BAST BA SEE i Fie RD EE let a SDB (8.05 esr ie

~ : .

8 :

Florida’? the words, ‘‘within and throwahout the entire ‘*

State of Florida, without exception’.

fol. 13] See ee

~ |

That petitions for rehearing and for leave to file-sup-.

plemental_ bills in said three suits were then presented to

this Court and were granted, and said supplemental bills

were filed.

That answers were filed-by-the United States of America

‘ to-said supplemental bills of complaint and‘ Atlantic Coast

Line Railroad Company was permitted to intervene and

file its answers to said supplemental bills.

That on the 17th day of April, 1929, after the rehearing,

. ordets were entered dismissing both the original and sup-

plemental bills of complaint and denying the relief prayed.

in each of said three suits.

_ That this Court upheld the amended order of the. ‘ater:

state Commerce Commission solely upon the zronnd that

the order was aimed at a discrimination ‘‘against general

interstate ecommerce’’, @pused by. iftrastate rates which

were so low as to throw an undue burden hats the anter-

state revenues of the carrier.

That the aforesaid suit brought by your petitioners as

aforesaid, including the pleadings, evidenée, orders and °

decrees therein, appears of record. in this Court and ref-

erence thereto is hereby prayed and ‘the same is in its én-@

.tirety made a part hereof by reference as though the same '

were sef forth herein in hace verbae.

17 ; -

That thereafter said three cases‘ were duly appealed to

the Supreme Court of the United States and an opinion

rendered therein by said. Supreme Court of the United

\ States on, to-wit, the 5th da January; A. D. 1931,

wherein said Supreme Court: led that the portion of

the order of the Interstate, Conimeree Commission with

(fol. 14] respect to intrastate rates (being the portion of

‘said order. under geview in said threé snits) was not sup-

ported by the findings of the Interstate Commerce Com- _

mission, and that that part of the ‘order mast be set aside. . -

That the decrees of this Court were accordingly reversed.

‘

18 Le ~

That thereafter the mandates of the Supreme Court (of.

the United States reversing the decyees of this Court hav-

ing been’ produced in each of said cases, this Honorable

. Court on, to-wit, March 7th, 1931, eatered in each of. said

three suits its erder adjudging that all parts of the said

order of the Interstate Commerce Commission whieh pre-.

scribed or attempted to prescribe rates for the transporta-

‘tion of logs in intrastate commerce in the State of Florida

on the lines of the Atlantic Céast Line Railroad Company

were invalid and unlawful, and such parts of said order of

, = the Interstate Commerec Commission were thereby en-

joined, set aside and annulled.

3 ' , : ; °

‘That at or about the time of: the last mentioned order

of this Court, said Georgia’ Public Service Commission and

: '. safd Atlantie Coast Line Railroad Company filed with said

Interstate, o£ ommerce Commission simultaneously motions' ,

to reopen said pr seceding* viz, the proceeding described

: as ‘‘Georgia Public Service Commission v. Atlantic Coast

Line Railrosd Company, Integstate Conimerce C ommission

i Docket #18364"’. . . }

“That the motion of the Georgia Public Service Commis-

sion recited the filing of its original complaint; the issu-

anee of the order of the Interstate Commerce Commission,

, the attack. upon that order in’ the cotirts, and the reversal.

of the judgment of this Court by the Supreme Court. “The

: Motion quotes that portion ef the opinion of the Supreme , .

\, . {fol. 15]- Court which declares: the dasic or espontial find

ee \ ings required fo support the order of the Interstate Com--

‘ “‘mercé Commission to he lacking and Wich declares that

‘ ‘if the facts as to intrastate transportation ONogs i in Flor-

, - ida are such as to justify an order as to intrastate rates,

the Interstate Commerce Commission is still at liberty to

‘make such determinations as the situafion may require,

“The motion then requests the Interstate Commerce Commis-

sion to-reopen the proceedings and to make the determina-

tions required by the situation and to issu* ‘sich report

' and to make such findings and orders, ‘fas will result in

& .. Yremoving the discriminations set out in the original peti-

tion’’. The motion prays that the Commission make such

Sowasnsess

oe ae

10° 9

findings and issue such orders as it: may deem requisite or

necessary “‘to fully accomplish the purposes of the original

petition and of this motion’’, and that the Interstate’ Com-

‘merce -Commission prescribe just, reasonable, non-dis-—

_criminatory and non-prejuditial interstate, rates from all

points in Florida to all déstinations in Geor gia aud that

the measure of such rates be no higher than the rates con-

currently in effect for the same kind of pyoperty moving

in. intrastate commerce in the State of Florida.

That the motion of the Atlantic Coast ‘Line Railroad

Company \ecited the! filine of the original complaint by

‘Georgia Public Service Commission before the Interstate

Commerce Commission, the order entered by: the Interstate

Commerce Commission, and the decisions of this Court and

of the, Stipreme Court. upongthe attack upon the order -of

the Interstate. Commerce Commission,’ and quoted the same

portion of the opinion.of the Supreme Court. which. had

heen quoted in the motion ‘of ‘the Georgia “Public Service

Commission to reopen the proceedings, This motion like-

‘[fol. 16] wise averred iliat the Florida Railraad Commis- ’

sion was undertaking to’enforee fhe Cummer Seale, and

that petitions ‘had been filed in this Court in the. threb: suits

pending in this 4 ‘oyrt abore mentioned asking for an order

directing restitution ,to be made by said Atlantie Coast

‘Line Railroad Company to the lumber companies and ship-

pers .in the State of Florida-6n account of shipments of

logs made after February 8, 4929, such restitution to .be >

based upon the difference between the’ Cummer Seale of

_ rates and: the sealp of; rates preseribed by the Interstate

‘ommerce Commission. : And said motion averred that the

stims Whereof restitution Was yeequested as aforesaid were

in excess of $200,000. m0. Said motion prayed the following .

relief: ; , : ae

Hig? -* 9 that this Commission proceéd to make

such further findings and issue; ‘such further reports and

order sin this cause as if may deem to be requisite or neces-

sary: A

a“

“(b) hat this Commission: préserihte? such mitrastate

rates in Florida. for the transportation of logs dter the

‘ @

. I

lines of this movant, for distances up to 170 miles and for ‘

distances Her ond said. 170 miles, as may be lawful.

nt PIT

“

. Sd ee a 11

c) That this Commission issue such other arid further

reports, findings and orders as this Commission may deem

propef.”’ : 4

That neither of said motions asserted in issuable form,

or indeed asserted at all, that the level’of the Florida intra-

staté rates were so low as to conssitute a revenue burden

either! upon interstate commerce or wpon the general reve-

nues of the carrier.

That. your petitioners filed with wid Interstate Com-

‘merce Commission a reply to said motions requesting that

said motions be denied, and averring gthe readiness and—

willingness of the Florida Railroad Commission, at any

proper time upon the application of the Atlantic Coast Line

[fol. 17] Railroad Company. or Anyoye interested to,.@nsider-

and hear and to deteymine after notice and hearing as pre-

seribed by Florida Law the level of the Florida intrastate

rate. Said reply likewise averred that the Suprente Court

had found that-the authority to determine the reasonable-

ness per se of said intrastate rate lay with the State an-

thorities and riot with the Interstate Commerce Commis-

sion’ and thrat until such State authority had been invoked

with respect to ‘the level of that ‘raté, Federal authority

‘ought. not to be exercised even if there were power: to exer-

cise it, which power was expressly denied. .

That on, to-wit, April 6, 1931, said” Interstate Commerce.

Commission made an order reopenixg said proceeding for

further hearing and Assigning said » ceeding for further

hearing at Jacksonville, Florida. ,

O41 . ™~

a A

That further hearing was had in the reopéwed proceeding

at Jacksonville,.Florida, on, to-wit, June 10th to 12th, 1931 .

and an additional further hearing was had in said proceed-

ing at Washington, ID. C. on, to-wit, July 20th and 21st,

1931, That at the very outset of these heari ings and before

any witnesses were ca}led and sworn, the State of Florida

asserted of record: that the Interstate. Commerce Commis-

sion had no jurisdiction in that proceeding to prescribe in-

trastate rates ‘on logs in Florida; that the authority to

determine the reasonableness of those rates lay. with the

Florida Railroad Commission; that these rates had been

‘£ * fe - ° <3: i :

chs ‘ ® - >

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. :

8 .

voluntarily initiated more than fifteen years theretofore

and when established had become the lawful State rates;

that the laws of Florida prohibited any change or increase

of those rates without consent and approval of the Florida

Railroad Commission after due notice to the interested par-

[fol. 18] ties and a hearing; that no complaint had ever

been made to the Florida Railroad Commission about the

-level of that rate, although its doors all that time. had been

open to anyone dissatisfied with that rate; that the result of

the proceedings before the Interstate Commerce Commis-

sion had een to injure ‘and destroy intrastate commerce

within the State of Florida, and to injure and destroy in-

dustries and whole communitiés in Florida without benefit-

ing anyone in Georgia or in Florida; and that the, Florida

Railroad Commission considered that the Interstate Com-

merece Commission was without power to invade the domain

of the State in this matter, but if it had such power it

should not exercise it until the railroad company had ap-

plied to the State of Florida for suc& relief as it might

deem itself entitled to have. That your petitioners have

ever since maintained and still maintain the position so

asserted. oe

That evidence was taken and received at said hearings

and said hearings concluded by said Interstate i ggg ee,

. OMMUSSION, acting through the Mexaminer assigned by

to conduct said hearings. °

9 9

That the complainant Georgia Public Service Commis-

sion offered no evidence whatever to prove any revenue

burden on interstate ecommerce caused by the appli ‘ation

of the Florida intrastate seale of rates (C ummer Seale),

and thereupon, the Examiner havme ruled that the issue

of undue burden upon interstate commerce was involved in

the proceeding, a motion was made by “the interveners to

dismiss that portion of the complaint: ‘which under such

ruling was construed as alleging that said Florida intra:

[fol. 19] state scale of rates unduly burdened interstate

ecommerce. That the Examiner ruled that*he had no au-

thority to dismiss the complaint and thereupon the defend-

ant was permitted to introduce evidence designed to prove

affirmatively this allegation of the complaint made against

the defendant.. That said motion to dismiss was insisted i

: ~< 4 = -<

. , i > \ =

2 ORM A RINE Me

upon before the Interstate Commerce Commission and de-

nied by it in its report and order of July 5th, 1932 herein-

after referred to. - ,

‘ 23

That on, to-wit, May 14th, 1931, and prior to the first

hearing in said reopened proceeding, your petitioners and

the intervening shipper defendants therein made written

-demand upon the Atlantic Coast Line Railroad Company

that it produee at said first hearing a statement of the num-

ber of cars, total tonnage and charges applicable thereto

. covering the transportation ‘of logs of the tariff description

involved in said proceeding, moving in intrastate commerce

in Florida -duri ‘ing the following ry periods: ~ - ~

February 1, 1926 io January 31, 1927;

February 1, 1927 to January 31, 1928;

j - | February 1, 1928 to January 31, 1929 ;

a = February 1, 1929 to January 31, 1930;

February 1, 1930 to January 31, 1931.

That a similar statement as to such logs moving in inter-

state commerce from Florida to Georgia during the same

periods was included within the same demand: That said, 5

written demand likewise requested a statement showing the

gross earnings of the Atlantic Coast Line Railroad Com-

pany for the transportation of logs of the tariff description

involved in. said’ proceeding, interstate as well as intra-

state, over all or any parts of its railroad lines wherever

[fol. 20] situate during the years ending respectively Janu- ©. *

ary 31, 1927, January 31, 1928, January 31, 1929, January

31, 1930, January 31, 1931. That likewise in said written

demand it was stated that if it was not practicable to fur-.

nish. the data last mentioned except by ‘calendar years, that

then that data be furnished for the calender years 1926,

1927, 1928, 1929, and 1930. That copy of said written de-

mand was furnished to the Interstate Commerce Commis-

° sion and. the Georgia Public Service Commission.

That the information so demanded was never furnished

nor was any part<of it ever furnished, save and except that

said Atlantic Coast Line Railroad Company furnished a

statement showing the’ number of. cars, total tonnage and ©. s

charges applicable to‘the transportation of such logs within

the State of Florida for the period beginning February 9,

— H . . e

14 | . ‘ 3 - : ‘ e ;

1929 and ending January 31, 1931, viz, the péhigd of the

effectiveness of the order of the Enter wate Commerce Coim-.-

mission, Without said statement being divided in any. way

‘into any other periods of time, and save and except that

upon said demand being insisted upon in the course of the

proceedings the Atlantic Coast Line Railroad Company,

admitted of record that there had been no interstate move-

ment.of such logs from Florida to Georgia “except possibly

an occasional car load’’. .

(fol. 21] That the Atlanfie Coast Line Railroad Company

refused to furnish the information so demanded and your

.petitioners’and said intervening shipper defendants in due

course moved said Interstate Commerce. Commission to re-

_ quire said Atlantic. Coast Line Railroad. Company to pro- ,

duce the data so demanded as aforesaid for use in said

proceeding. That said Interstate Commerce Commission

refused to require said Atlantic Coast Line Railroad Com-

pany to furnish said information or any of. it. That ‘in*

the course, of said proceeding formal motion was. made

that said Interstate Commerce Commission require said

Atlantic Coast Line Railroad Company to furnish infor-

mation showing the number of ecars.of logs transported

by it intrastate in Florida during the years 1926, 1927 and

1928, and the revenue received. by it for such {ransporta-

tion. That said Iiterstate Commerce Commission by its

order made on, to-wit, July 7th, 1931, denied said motion.

That all of said information SO demanded and sought

(fol. 22] to be required, save and except to the limited

extent hereinabove. stated, shas never been furnished or

produced in said proceeding and the data and informa-

tion so demanded and sought is not in evidence in said

proceeding.

That there is no " evidence in said proceeding anywhere

showing the amount of revenue which had been derived by

the Atlantic Coast- Line’ Railroad Company from the -

Florida intrastate traffic in logs of the tariff description

involved in said proceeding wnder the.¥Florida intrastate.

rates (Cummer Seale).. :

That after said hearings and on or about December 12th,

19M1, certain Examiners of the Interstate Commerce Com-

migsion to whom said proceeding had been assigned did

Stk Bead sii Silene hs Pieehaiae iva di

”

: .

other, were esséntial preliminary -findings of fact’’,

file, submit and serve upon all interested parties a report

in which it was proposed that. the Interstate Commerce

Commission should find: that the’ interstate rates pre-

viously prescribed and then in effect were not unreason-

able; that the Florida intrastate rates were not shown to

be unduly prejudicial to Georgia shippers and localities

engaged in interstate connie in the State of Georgia :

but that the. Florida intrastate rates (Cummer scale) were

and for the future would be unjustly discriminatory against

interstate commerce, and that such discrimination should

be remeved by the ‘establishment of a special rate from

Hines, Florida, to ‘Palatka, Florida, of not less than 5.5¢

per hundred pounds, minimum ‘50, 000 pounds, and by: the

establishment of* intrastate rates between all other points

on the Atlantic Coast Line Railroad in Florida which should

abe the same as the intrastate rates previously prescribed

“in the report and order of August 2nd, 1928, of the Inter-

state Commerce Commission.

{fol 23] That said report queted from the opinion of the

Supreme Court the following language which was used in:

striking down the former order of the Interstate Com-

merce Commission: \ :

‘‘The Commission \made no findings as to the revenue

which had been derived by the carrier from the traffie in

question, or which could ‘reasonably be expected under the

inereased rates, or that the alteration of the intrastate rates

. would produce, or was likely\to produce, additional income

necessary to prevent an undue burden upon the carrier’s

interstate revenues and to maintain an adequate Aranaper- :

tation service.’

That said Examiners being apparently unable to make

these basic and essential findings, and thereby tacitly ad-

mitting that the evidence did not support such findings,

avérred that the Supreme Court’s statement as to the ab-

sence of those findings ‘‘was made as a suggestion of what

might have been appropriate findings to support the con-

¢lusion’’, andi@yerted, “These siegested findings were

merely illustra ve; there is nothing in the opinion that

would warrant, the conclusion that such findings, and no

’

That the proposed report accordingly did not propose .

that. the Interstate Commerce Commission should make

oe * - -

those findings, the absence of which caused the Supreme

Court to condemn the former order, and the evidence is

not and was never present upon which those findings could

-be. made.

That thereafter exceptions were filed to said proposed

report by your petitioners and, certain of the interveniig

shippek, defendants, and in due ¢ourse the proceeding came

on to bé orally argued on, to-wit, February 3rd, 1932, be-

fore the entire Interstate Commerce Commission at Wash-

ington, D. C. At such argument there appeared counsel

[fol. 24] for said Georgia Publie Service Conimission, for

said-Atlantie Coast Line Railroad Company, for your pe-

titioners, and for said intervening shipper defendants.

hs » 25 |

That thereafter on July. 5, 1932, said Interstate Com-

merece Commission rendered its certain report and order

in said proceeding, a copy of ‘said report and order’ be-

ing hereto attached and marked Exhibit A” and made.

by reference a part hereof, “

‘In that report the Interstate Commerce a

found that the interstate rates from Florida to Georgia

prescribed by its former order of August 2, 1928, and there-

after continuously in effect were reasonable. The report

recited that in the original hearing it had been shown that

there was no actual movement of logs from Florida to.

Georgia, and that during the period of more than two

vears from February 8, 1929, to abqut April 10, 1931, when

the interstate rates from Florida to Georgia and the

Florida intrastate rates were on a parity there was no

movement from Florida to Georgia, except possibly an oc--

‘asional carload. The report recites that it is impossible

to say whether a movement from Florida to- Georgia will

develop in the future and that, since the Florida intra-

state rates are by the new order again being put on a

parity with the interstate rates, no finding in’ reference to

undue prejudice against persons: and localities in inter-

state commerce was necessary and the report expressly

declines to make any finding in that regard. Your peti-

tioners aver that there has never been any evidence of

the movement of even a Single carload of logs froni Florida

to Georgia, wheiher the rates were on a ‘parity or. not,

and no evidence upon which it could be assumed that there

will ever be such a movement. Your petitioners further ,

[fol.25] aver that the inverstate. rates from Florida to

Georgia theretofore prescribed and thereafter A or, now in,

effect were only applicable from points in nothern Florida

to points in Georfia as has been hereinabove set forth.@

That said repoft of said Interstate Commerce’ Commis-

sion further found that the Flori intrastate rates in-

volved in the proceeding were, and for the future would

be unjustly discriminatory against interstate commerce,

and that such unjust discrimination could and should be

removed by the éstablishment between all points on the At-

lantie Coast Line in Florida for distances of 170 miles or

less of rates which should be not leSs than the same rates

’ previously prescribed by the order of August 2, 1928, for

the intrastate transportation of logs in Florida. And your

petitioners aver that said finding was made, notwithstand-

ing the fact that said Interstate Commerce Commission

failed to make the findings which the Supreme Court had

declared to be essential to justify the invasion of the do-

main of the State of Florida, and in lieu thereof had at-

tempted to substitute for such findings: doubtful, ambiguous

-and indefinite conjectures none of which have been made

to clearly appear or to appear at all by the evidence, and

notwithstanding the fact that it had not been made to

clearly appear or to appear at all by the evidence that the

jurisdictional findings prescribed by the Supreme Court

could be made, and notwithstanding the fact that the find-

ings which: the Commission purported od wane were not

supported by the evidence.

¢ 27

That the order accompanying said report (without any

effective date being fixed therefor), directed that ‘the. At-

lantic Coast Line Railroad Company cease and desist from

practicing the discriminatign found in the report to exist

“

[fol. 26] in the relation of intrastate and interstate rates :

and to establish rates on logs. in intrastate commerce

‘‘within and throughout the State of Florida’’ for dis-

tances of 170 miles or less which should be the same as

2342

”

18. - _— l , A

those rates theretofore prescribed in the order of August

2, 1928, as aforesaid, for the transportation of logs in intra-

state comnierce in Florida and in interstate commerce from

points in northern Florida to points in Georgia.

“ ya -" 28 , ce

That thereafter on, to-wit, July 28, 1932, without notice

or hearing, said Interstate Commerce ‘Commission made its

order amending its report and‘order of July 5, 1932, and .

therein ovteced that the .effective date thereof shall be

‘‘on or before September 15, 1932’’. That a copy of said —

order of July 28, 1932, is hereto attached and marked “ix.

hibit il and made by: reference a part hereof.

That your petitioners filed on, to-wit, August: 24, 1932,

with said Interstate Commerce ( omniission their petition

for reargument and reconsideration of said report and

order, and said petition was denied on, to-wit, August-25th,

1932. That Brooks-Seanlon Corporation, Wilson Cypress

Company, Cummer Cypress Company and Wilson Lumber

Company of Florida, being certain of the intervening

shipper defendants above referred to, likewise filed with

said Interstate Commerce Commission their petition for

reargument and reconsideration of said report and order,

and said Interstate Commerce Commission has denied ‘said

petition. That on or about August 10, 1932, said last nainied

intervening shipper defendants filed w ‘ith said lirterstate

[fol. 27] Commerce Commission their motion to postpone

the effeetive date of thé final order outstanding i an said pyo-

ceeding and said motion has been denied. | oe

- 30

Wherefore, having exhausted their administrative reme-

dies, your petitioners herein respectfully institute this pro-

ceeding for the purpose of annulling, vacating and setting

aside said report and order of July 5, 1932, as amended as

afor esaid, of said Interstate Commerce Cominission, and

io en jomn the: enforcement thereof,

3 a . Sa

And your petitioners aver that said report and order, as °

amended as aforesaid, are arbitrary and unreasonable, be-

yond the power of the Interstate Commerce Commission

and wholly invalid antl unlawful.

That said report and order, as amended as aforesaid,

are unlawful for the following several reasons, among

others: » ) Las

(1) Because under the facts of record in said proceed-

ing before the Interstate Commerce Commission there was

no constitutional right or warrant for the exercise of or

attempt to exercise any federal power in derogation of or

superior to the power and authority of the State of Florida

‘in respect to the regulation of intrastate. commerce sought

to be affected by said order,

(11) Because the findings declared by the Supreme Court

of the United States to be essential pre-requisites to ‘Hrey

making of a valid order of the character here attempted

to be made by the Interstate Commerce Commission have .

[fol. 28] not been made and cannot be made by the Inter-

state Commerce Commission: upon the evidence that was

before it-in said proceeding.

_({II) Because the basic essential and jurisdictional

facts necessary to justify the invasign of the domain of

thie State of Florida have not been made to clearly appear —

in the said report or findings of the Interstate Commerce

Commission. | ' .

(IV) Because the basic essential and jurisdictional facts —

necessary to justify the invasion of the domain of the State

of Florida have not been. made to clearly appear m the

evidence before said Commission.

(Y) Because the findings of fact upon “which the Inter-

state Commerce Commission, relied to justify its order pre-

scribing intrastate rates were not warranted and/or.made

to. clearly appear by the evidence before said Commission.

(VI) Because said Interstate Commerce Coetateclee

made no finding supported by evidence of the essential

facts as to the Florida intrastate traffic in logs and the

revenue therefrom, and as to the effect of: the intrasfate

rates‘ both as*existing and prescribed, upon the income of

the said Atlantic Coast Line Railroad Company, which

—————

”

20 ‘homes ‘oe

; : °

would ‘justify the conclusion that. said order was needed

to avoid an undue burden on the revenues of said cartier

and a consequent interference: with the maintenance of”

an adequate transportation service. . y

(VbY Because the Interstate Commerce Commission

made no finding of the amount of revenue which had been

derived in the past by. the Atlantic Coast Line Railroad

Company from the particular traffic in question under the

existing intrastate rate (the Cummer Seale),

fol. 29] (VIIT) Because it did not and does not clear - ap

pear that the evidence warranted a finding of the. agount

of revenue which had been derived. in the past by said At-

lantic. Coast Line Railroad Company from the partienlar

traffic in question under the existing intrastate rate (Cym-

mer Scale).

(IX) Beeause the Interstate Commerce > Commission

made no finding of the amount of revenue which can be

reasonably expected-to be derived: from thie traffic in qnes-

‘tion under the increased intrastate rate which the Inter--.

state Commerce Commission has ordered established.

(X)- Because it did not and does not clearly appear that

the evitence warranted.a finding of the amount of revenue

which can be reasonably expected to be derive “1 from the

‘affic in question under the increased intr astate ‘ate which

rt Interstate ommerce Commission ordered established.

(XI) ‘Because the~. Interstate ommission

made no finding that the application of.the existing intra-

state rate (Cunimer Seale)’ resulted in-an ‘impairment of

the income of the carrier which caused an undue burden

- upon the ecarrier’s ipferstate revenues and obstructed the —

maintenance of an adequate national transportation system.

(XII) Because it did not and does not clearly appear

that the evidence warranted a finding that the,application

of the existing intrastate rate (Cummer Seale)’ resulted in

an impairment of the income of the earrier which caused

an undue burden upon the carrier’s interstate revenues and

obstructed’ the maintenance-of an adequate national trans-

portation system .

[fol..30] (XITT) edaias the Interstate Commerce Com-

mission made no-finding that, an undue burden,upon the

Pee eo

wer

_ existed which was of such character and consequénce

_transportation service. r

ESS S eee ores

’

. éarrier’s interstate revenues and obstruction to the main-

tenanee of an adequate national transportation service ex-

isted which was of such character and consequence that it:

was the affirmative duty of the Interstate Commerce Com-

mission as an important step in maintaining an adequate

national railway system to remove such burden and ob-

struction.

e *

(XIV) Because. it did not and does not’ clearly appear

den upon the carrier’ ‘revenues and, obstruction to t e

maintenance of | an anaes national trausportation servi

lat

it was the allirmative duty of the Interstate Commerce Com-

mission as an important step in maintaining an adequate

national railway system’to remove such burden yand ob-

struction. .

ws.

(XV) Because the Interstate Commerce Commission

made no finding that “the alteration of the intrastate rapes

would produce, or wa’ likely to produce an additional and

greater amount of income, and made no finding that such

additional and greater amount of income was necessary to

prevent an existing undue burden upon the earrier’s inter-.

state revenues and necessary to maintain an adequate

(XVI) Beeause it did not and aloes not clearly appear. ie

that the evidence warranted a finding that the alteration of

the intrastate rates: would produce, or was likely to pro-

duce, an additional and greater amount of income and it

did not and does not clearly appear that the evidence war-

ranted a findings that such addi{ional and greater amount of

income was necessary to prevent an existing undue burden

upon the carrier’s interstate revenues! and necessary to

maintain an adequate transportation service.

[fol. 31] (XVII) Beeause the Interstate’Commerce Com-

mission made no finding of the quantity or extent of any

~burden upon the nftterstate revenues of the carrier caused

by the application of the existing Florida intrastate rate.

(XVIII) Because it did tiot and does not clearly appear

that the evidence wdétranted a finding of the quantity or

extent of any burden upon the interstate revenues of the .

‘that the evidence w oe a finding that any undue bury

“carrier canned me the usoticaion of the éxisting Florida

by indirection seeks to determine the reasonableness per se

‘Commerce Commission.

. State of Florida as if unjust discrimination against inter-

mission involving uny such subject matter.

& g . 2.

ad . 2. z < s "ig

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9») ” & ‘ : ae ‘ . . }

ot md . e , t

‘

intrastate rate. ; .

r ( XIX) Because the Interstate Commerce Commission

of the Florida intrastate rate (the Cumm@"Scale), a thing *.

which the Supreme Court of the United States has declared

lies with the state authority and not with the Interstate

‘

(XX) Because no complaint was made and no evidence

offered by the complainant Georgia Public Service Com-

mission, of a revénue burden upon interstate tommeree.

(X XI) Because the Interstate Commerce Commission ~

has thereby sought to regulate, internal concerns :of the

state commerce in violation of Section 13 existed when

there was not submitted to the Interstate Commerce Com-

mission by any party to the proceeding ‘before it any case

- controversy ‘of such character, and ‘there’ was no other

pending proceeding or order of investigation of such Com-

(XXII) Because the same are not appropriate to the

case and not just to the parties to be affected, they were

not made following the forms of law, nor were they :

adapted to the end sought to be attained in said proceeding

before said Interstate ‘Commerce Commission.

[ fol..32 ] (XXII) Because in making the same the Inter-

state Comnterce Cdmmission considered and gave efecto

~~ vomparisonsg 2 r

(XXIV) Because in nfaking the same the Interstate

Commerce Commission considered and gave effect to state-

ments of system revenue returns, and to the relation of log ° ’

traffic and log revenue to total traffic and total revenue.

(XXY) Because in making the same the Interstate Com- .

merce Commission considered and gave effect to system *

average costs.

(XXVI) Because in making the same the Interstate

(pmmerce Commission consédered and gave effect to cost

studies and other matters which were incompetent and in-

sufficient to furnish the basis for any such report and order. .

DIONE Oe Ree Oe

‘ : ae - ye

(XXVII) Because in making the same the Interstata,:

Commerce Commission considered and gave effect to »

studies of out-of-pocket costs of transportation wherdin

there were included charges to éperating expenses-not avy-

thorized by the Classification of Operati#g Revenués and

Operating Expenses of Steam Roads as prescribed by the

Interstate Commerce Commission.

(XXVIII) Because | in making the same the Interstate

Conmmeree Commission -considered and gave effect: to its

own cost study, Appendix E of said report, which was

formulated from matter dehors the record, without. sub-

mitting the same in evidence and without affording an op-

portunity to cross examine the author thereof and to offer

evidence in rebuttal fygrer! and thereby deprived the State

of Florida and its Raifroad Commission.of the full and fair

hearing to which they are entitled by the Act. |

(XXIX) Because your petitioners were not afforded a

fair opportunity to be heard respecting the justice of the

same.

[fol. 33] (XXX) Beeause in making the same the ni.

state Commerce Commission considered gnd gave effect to

studies of transportation costs which charged to the costs

of Florida intrastate log transportation the full statutory

return of five and three-quarters per cent while contem-’

thie ayaa the return actually earned by the carrier was

far Jess.

(XXX1) Because t).. rates prescribed therein to be ap-

plicable to Florida intrastate log transportation are far-in

excess of all denionstrated costs, taxes, and the full statu-

tory return of five and three-quarters per cent, and age

extortionate. '

(XXXII) Beeause said Interstate Commerce (#mmis-

sion failed to require the Atlantie Coast Line Railroad to

‘first apply to the Florida Railroad Commission for altera-

tion of the Florida intrastate rates.

(XXXII) Because said order fails to duly designate ;

lawful date upon which the same shall become effective.

(XXXIV) Because said Interstate Commerce Commis-

sion has attempted to prescribe intrastate rates in Florida

applicable to territory for which no interstate rates have

/ .

of | .

e ’

ebeen _prescribed and in which no general investigation of

rate ‘levels whether on mterstate or on intrastate traffic

has been made.

= (XXX ) See i intrastate rates prescribed i in said ~

proceedings before the Interstate Commerce Commission

are hraadet in thei aneonuthe yute uivnsutat vans pres

scribed in said proceeding, and are beyond the scope of ~

the issues raised in said proceeding: (

(XX XVI) Because it did not and-does not clearly ap-

pear in said proceeding before the Interstate Commerce

Commission that there was or is any unjust discrimination

against interstate commerce in Violation of Section 13 of

1e interstate commerce act.

[fol. 384] (XXXVII) Because in said proceeding the In-

terstate Commerce Commission did not find any facts suffi-

cient to constitute an unjust -disecrimination against inter-

state commerce in violation of Section 13 of the interstate

commerce act. _

(XXXVUI) Because said action of said Interstate oe

merce Commission constitutes an unlawful invasion of the

sovereign rights of the-State of Florida reserved to it by

the Constitution of the United States and of the citizens

of said State of Florida, and is without any warrant or

_ authority of or-under the Constitution of the United States;

and further that the said Interstate Commerce Commis-

sion Was and is without jurisdiction to enter its said order.

(XXXIX) Because said action of said Interstate Com-

merce Commission constitutes an unlawful exereise of

power’ by the Interstate ‘(Commerce Commission and is

without warrant or authority of or under the Constitution

of the United States. ‘ :

That at all times herein méntioned there were and have

heen situate in proximity: to the railroad lines of said

Atlantic Coast Line Railroad Company in the State of

‘Florida many millions of feet of standing and uneut tim-

ber, the cé ipital value of which aggr egated and now aggre-

gates many‘millions of dollars.

That at the time of the filing of said complaint by said

Georgia Public Service Commission, viz., May 3, 1926,

ra .

7 J

many -persons and corporations were engaged in cutting

said fimber and transporting the logs so produced over

the aforesaid lines of the Atlantic KGoast Line Railroad:

Company a distance of 170 miles or less_to lumber mills

located in‘the State of Florida. That more than 5,000 men

were then emploved in said logging and lumbering qn-

erations., ,

[fol. 35] - That the effect of the former order of the Inter- -

state Commerce Commission was to very considerably in-

‘crease the intrastate transportation charges for the trans-

portation of such logs and‘to render it highly unprofitable

to said shippers of logs to continue to use said transpor-

tation service. That by reason of said order and its being

sustained by this Court large and valuable mill’ properties

were dismantled and abandoned and operations discon-

tinued, involving a loss of many-millions of dollars jo the

owners thereof and a large number of citizens of the’ State

of Florida were thrown out of employment and existing

industries and communities located in the State of Florida

and forming a substantial part of the taxable value thereof

were destroyed. That for the same reason the great volume

of then existing intrastate commerce ‘in logs in the State

of Florida on, said Atlantic Coast Line Railroad Company

_ Was largely destroyec. 3S.

That if said order of July 5, 1932 of said Interstate

Commeree Commission becomes effective similar, though

not so momentous effects will result, (the number and con-

sequence of the limber milts to be affected having been

vastly diminished by the effectiveness of the former order

as aforesaid), and mill properties will be abandoned by

reason thereof and unemployment will be increased and

-the taxable value of* property will be diminished or de-

stroyed in the State of Florida. That the damage which

_will be so occasioned -will be irreparable and cannot, be

compensated for or adequately redressed. by any suit or

suits at law and your petitioners have no plain, adequate

and complete remedy at law available to them in the

premises. |

[ fol. 36], _* "94 :

And your petitioners allege that the authority of the

State of: Florida acting in its sovereign capacity over its

own intrastate rates was at all times and is paramount

and superior to Federal authority wit -respect to said

rates until and unless said State authority actually con-

flicts with the Federal authority to regulate interstate com-

merce, and. that the Interstate Commerce Commission is.

without the statutory power to invade the domain of the

State of Florida in derogation of said State authority until

and unless it shall be made to clearly appear from lawful

evidence that the jurisdictional facts exist which warrant

the Interstate Commerce Commission in invading-said do-

main of the State of Florida; that whether. or not such

jurisdictional facts exist and have been made to clearly

appear from lawfu? evidence is a judicial question which

this Court under the Constitution of the United States

(and in particular under Section 1 of Article IIT thereof,

and ‘the Tenth Amendment thereof, of which your petition-

+ ers claim the benefit and protection), is ‘bound to deter-

“ mine for itself in this cause according to the established

forms of law, anything in the ‘Ingerstate Commerce Act

as amended to the contrary notwithstanding. That your

etitioners are entitled to a trial de novo wpon such juris-

Vay “tet facts hy this Court and hereby make de mand for

such trial. | ot .

W herefore, your petitioners respectfully pray as follows:

A. That process may issue against the defendants, United

States of America, and Interstate Commerce Commission,

an administrative tribunal of the United States, with serv-

ice thereof and of this bill of complaint in the manner

prescribed by statute in such eases made and provided.

[fol. 37] B. That this ‘Court order adjudge and. decree

that the said ré port and order of said Interstafe Commerce

Commission of July 5, 1932, as amended, are beyond the

authority of said Interstate Comffierece Commission and are

without warrant in law and are null and void and that

said report and order, as amended, be set aside e an- .

nulled,

Bl. That this Court will allow a Yomporary stay or sus-

pension of the operation of the said order of the Interstate

(‘ommerce Commission pending the application for the in-

een herei in sought.

| . That this Court will erant to your petitioners hereim

an “hile order, setting aside andgnjoining | the en-

a end

ae a eee See ee i pase ee ee ee

forcement of said order of July 5, 1932, as amended, of

' said Interstate Commerce Commission, and that such in-

terlocutory order continue in force until further order of

this Court.

D..That upon final hearing this Court will make and en-

ter, a deeree and order herein annulling, setting: aside and

“enjoining the said order, as amended, of said Interstate

Commerce Commission, and permanently enjoining the en-

forcement thereof. ;

E. That ‘your petitioners: may have such other and fur-

ther relief in the premises as to this Court shall seem

meet and just and as equity may require.

And your petitioners will ever pray, ete.

The State of Florida, by Doyle E. Carlton, Goy-

ernor. Eugene S. Matthews, Mamie Faton-

“Greene, Tucker Savage, as and Constituting the

Railroad Commissioners of the State of Florida.

Cary D. Landis, Attorney General of the State of

Florida; Theo. T. Turnbull, Special Counse] for

Florida Railroad Commission, ‘Solicitors for Peti-

tioners. «

{ fol. 38] Dily sworn to by Eugene S. Matthews. Jurat

omitted in printing,

[fol. 39] * Exurerr ‘‘A’’ ro Bit or CompLaInt

Interstate Commerce Commission

No. 18364 ‘s

GrorGia Pusiic Service COMMISSION

ATLANTIC Coast Line Rartroap CoMPany

Submitted February 3, 1932. Decided July 5, 1932

On Further Hearing, Following Florida y. United States,

” 282 .U. 8.194 —

1. Finding in original report, 146 I. C. C. 717, that rates”

on logs over six' feet in length, except walnut, cherty,

J, 7

GET"

and cedar, in earloads, from points in northern Flor-

ida to. destinations in Georgia for distances of 170

niiles and less were unreasonable, affirmed. Present

- rates found reasonable. : eaeice 3

2. Rates on logs over six feet in length, except Jwalnut,’

cherry and cedar, in carloads,. applying gn shipments

between points on. the Atlantic Coast Line Railroad

Company in’Florida for distances of 170 miles and

less found unjustly discriminatory against interstate’

commeree. -Nondiscriminatory basis

of rates pre-

‘ser ibed. .

EB. -M. Price for complainant:

Frank W. Gwathmey, Car} Hl. Davis, Robert C. Alston

and K. W. Moise for defendant.

Cc ary D. Landis, Attorney General for the State.of Flor-

ida, and T. 'T. Turnbull for any Railroad Commission.

H. P. Adair, C.G. Ashby, C. EK. Cotterill and August @.

Gutheim for Brooks-Scanlon y ‘orporation, Wilson Cypress

(Company, and Cummer Cypress Company; J. V. Norman

for Wilson Lumber Company; T. M. True for Southern

(Cypress Manufacturers Association; Fiomas D. Guthrie

and Rusgell W. Bennett for various erate’ manufacturers

and K. CNGreen for Jacksonville Traffic Bureau, Inter-

veners, in

‘Report of the Commission on Further Hearing

Meyer, Commissioner:

In the original report herein, 146-1. C. C. 717, division

4+ found that the interstate rates on logs, except walnut,

cherry and cedar, ‘in carloads, from points on defendant’s

lines in Florida north of and including Jacksonville, Gaines-

ville, Burnett’s Lake and High Springs, hereimafter called

northern Florida, to destinations on its lines in Georgia

for distances not exceeding 1.70 miles would be unreasonable

for the future to the extent that they might exceed a cer-

tain scale of distance rates prescribed therein. The divi-

[fol.40] sion further found that the Florida intrastate

‘rates on similar logs for similar hauls, generally referred

to as the Cummer seale, resulted, and would result, in un-

due preference and advantage of shippers of intrastate

traffic ‘e Florida, ir undue prejudice to shippers of

‘

Si’ r

a a ee i

interstate trafic from points in Florida to points in Geor- ©

gia, and in unjust discrimination against interstate com-

merce, and that fsaid ‘undue preference and advantage,

undue prejudice, and. unjust discrimination should be. re-

moved by establishing rates for intrastate application

within Florida which would correspond with the rates

found reasonable for interstate : applies ition from northern

Florida to Georgia. An order carrying these findings into

effect was entered on August 2, 1928, _ |

The State of Florida, the members.of the Florida Rail-

road Commission, and certain manufacturers of lumber in*

Florida, interveners in this proceeding, brought suits in the

United States District-Court to enjgin that part of the or-

der whichealt with the, Florida intrastate rates. The court.

construe#the order. with respect to the Florida intrastate .

rates, which read ‘‘within the State of ‘Florida,’”’ as being |

limited to points in northern Florida, and as so construed —

sustained the order. 30 Fed. (2d) 116. Thereafter, division

4 amended its ordey by inserting an additional exception of;

logs six feet or less in length, and, with respect to the in-

trastate rates, -by substituting, for the phrase ‘‘within the

State of Florida’? the words ‘‘within and throughout the

entire State of Florida, without exception,’ such gv |

tion being ‘‘for the purpose of clarification.”? Op Yebrae-

ary 8, 1929, the order, amendéd as indicated, was plied

with by the Atlantic Coast Line. Amended bills were filed

in the District Court and the case there reheard. .The At-

lantie Coast Line was allowed’ to intervene in suppart of

the order. The court upheld the amended order, but only

(fol. 41] on the ground that it aimed ‘at a-diserimination

against general interstate commerce caused by intrastate

‘ates which were so low as to throw-an undue burden upon

the interstate revenues of the carrier. 31 Fed. (2d) 580.

On appeal, the Supreme Court, dealing particularly with

the ground upon which the order was sustained by the

lower court, reversed the decree of that court, holding with,

respect to the Florida intrastate rates that the order was

not supported by appropriate ‘findings. Florida’ v. United.

States, 282.U. S. 194. The Supreme Court, among other

things, said: ros : a

The Commission made no findings:as to the revenue

which had been derived by the carrier from the traffie in

eee

Te =

——y

’

. question, or which could reasonably be expected under the

increased rates, or that the alteration of the intrastate

rates would produce, or was likely’to produce, additional

income necessary to prevent an undue burden upon the ear-

rier’s interstate revenues and to maintain an adequate

transportation service.

_ @

If the facts as to the intrastate transportation of logs

in Florida-are such as to justify an order as to intrastate

rates in order to-end an unjust ‘discrimination as against

- interstate commerce, either as between persons or loceali-

ties, or because of an undue burden upon the revenues of

the ecarriér, the Interstate Commerce Commission’ is still

at liberty, ‘acting in accordance with the authority: con-

ferred“by the statute, to make such determinations as the

situation may require, : ae

— ifter, upon petitions filed hy complainant and de-

fendant, we reopened the proceeding and assigned it -for

further hearing, which has been held. A proposed report

of the examiners was served upon the parties, to which de-

fendant and interveners filed exceptions, and the case has

been orally argued.” Our conclusions differ in part from

“those of the examiners.

Upon rehearing the Atlantic Coast Line through nomi-

nally the defendant.was in the position of a petitioner .

under section 18 (38) and-(4) 6f the Act seeking reliet from

what if contends are unduly low State rates.

[fol. 42] At the further hearing the Florida interveners

moved that the complaint should be dismissed as_to the

issue whether the Florida intrastate rates cause nfust

discrimination against interstate commerce, if the com-

plaint raises such an issue, which they still question, be-

cause of the absence of any legal interest in that issue by

complainant and its failure to introduce evidence in support

thereof. But, aS stated in the report of division 4, the com-

plaint in this proceeding alleges, among other things, that

defendant’s Florida intrastate rates are unjustly deci:

itiatory against interstate commerce, in violation of section °

13 of the Act. Evidence pertinent of that issue was intro-

duced. Similar objections made by the Florida® inter-

-veners before the Supreme Court wit® respect to the scope

? :

of the proceeding were overruled, on the ground that ‘‘as

the Florida Railroad Commission appeared in defense of

the intrastate rates, and the Railroad Company, the rates

of which were in question, and other parties ir interest,

both shippers and carriers, were heard, the question now

presented relates to the substance of the determination of

the Commission andits support in the evidence rather.than

to mere matters of pleading and procedure’’; and the court

further said: \

In making its order, the Commission could exercise all

the authority conferred by the interstate commerce act for

_ tlie purpose of removing such discrimination as was found

to exist. If the Commission had made adequate findings

supported by evidence upon the point under ¢onsideration,

we should not be disposed to conclude: that the order must

a6 upset because of the manner in which the proceeding\

ras initiated or of the generality of the allegations of the,

pearing

By section 13 (2) the duty is placed upon us to ‘‘investi-

gate any: complaint forwarded by the railroad commis-

‘sioner or ratlroad commission of any State or Territory

‘at the request of such commissioner or commission,’’ and ,

‘he samme paragraph provides that ‘‘no complaint shall at

any time be. dismissed }geause of the absence of direct

(fol. 43] damage to the cpmplainant.’* See Interstate

Commerce Commission v. Baird, 1947U. S. 25, 39. Inter-

veners’ motion to dismiss is denied. .

~The effective date of the order entered by division 4 on

August 2, 1928, was October 10, 1928. This daté was post-

poned until February 8, 1929; when the rates prescribed

were made effective on interstate traffic from northern

Florida to Georgia and on intrastate traffic in Florida. The

interstate rates have since remained continuously, in force.

No further evidence was introduced with respect to their

reasonableness and they are apparently satisfactory to all

interested parties. The interstate and intrastate rates pre-

seribed applied for distances only up to and including 170

miles. There was no occasion to preseribe either interstate

or intrastate rate’ for greater distances, for the reason that

the intrastate (Cummer seale) rates, which were alleged to

cause the undue prejudice egainst shippers and localities in

interstate commerce and unjust discrimination against in-

terstate commer¢e, applied for distances of ‘only 170 miles

and less, beyond which the Florida intrastate rates were

much higher, distance considered, and were only, slightly

less than the’ then prevailing interstate log rates for the

same distances. j

Following the decision of the Supreme Court, rendered

Januarye, “1931, which set asyle ‘the order in so far &s it

applied to the Florida intrastate rates, the Cummer seale

Was restored, effective April 10, 1931, and is now in force.

During the period from February 8, 1929, the effective date

of the order, to April 10; 1931, the higher rates preseribed

by the order’ were*in effect.

The principal. issue apon rehearing was whether the

Cummer seale causes unjust discrimination against ifiter-~

state commerce and that issue will-now be considered.

[fol.44] The history of-the Cummer scale was related in

considerable detail in the original report. Briefly summar-

ized, it originated in a contract made in 1963 between tHe

Jacksonville & Sowhwestern Railroad Company and the

Cummer Lumber Company, both them controlled by the

same interests; defendant acquired the jfroperties of the

former company in 1904, and assumed. its obligations under

the contract; during the pendency of the Contract defendant

entered into a similar agreement with the predecessor of

intervener Brooks-Scanlon Corporation in connection with

the transportation of approximately one billien feet of

pine from Lafayette and Perry Counties, Fla., to its plant

‘at Kastport, near Jacksonville, Fla., ‘in. trainloads; the

Florida. Railroad Commission r?fused to,permit the estab-

lishment of the agreed rates in traimloads, and requifed that.

such rates as were egtablish¢d should. apply on carloads

and ve available to all shippers on defendant’s lines (see

Appendix A); said rates became effective on carload ship-

ments over all of defendant’s Florida lines Octoher 30, 1914,

and, as modified by subsequent general rates ¢ nges (and

extended from 150 to 170 miles), have sinee ben in effect,

except duying the period Bx February 8, 1929, to April

10,1931, The Cummer seale never has applied over other

railroads. nor elsewhere than in Florida on defendant's

lines-for.distances of 170 miles and less. |

The rates under the Cummer seale are »apablished — in

amounts per car of 50,000 pounds, excess in proportion.

Certain other rates. referred: to -hereim are published in a

. A“

\ ? P . °

\ on

\ ‘

- | es

— ARAN LN RNA 0k, oll 6 sv et ails elaaRs Mal

‘similar manner. All will be stated in cents per 100: pounds.

Appendix B shows the various scales applying on logs on

the most important railroads in southern territory. C ‘olumn

1 shows the Florida intrastate rates applicable over de-

fendant’s lines on the kinds of logs here involved. The

[fol. 45] rates shown in that column for distances up to and

including 170 miles are the-Cummer se: ile rates, beginning

with a rate of 1.71 cents for 5 miles and ending with a rate

of 3.7 ceuts for 170 miles. The rates shown in the same °

column for distances greater than 170 miles are class ‘*P”’

rates prescribed by the Florida commission for application

on the same kinds of logs. It will be noted that while the

Cummer seale rate for 170 miles is 3.7 cents, the Florida

commission class ‘*P’? rate for 171 miles is 8.33 cents, or

more than twice as high, ,The Florida commission class

“P*? rates were prescribed as maxima for all distances, but

the defendant has applied the Cummer scale rates for dis.

tances 6f 170 miles and less, which are substantially lower

than the class ‘*P’’ rates for those distances, and has main.

tained the full elass ‘*P*’ rates for distances over 170 miles.

The rates‘under the Cummer seale for 5 miles, 110 miles,

and 170 miles are 5.05 per cent, 3.54 per cent, and 3.85 per

- eént, réspectively, of the first-class rates for the same dis-

tances preseribed Ky us in euatnere Class Rate Investiga;

tion, 113.1. C. ©, 200, 207, 128 T. C. C. 567, for eeneral inter=

‘state application ‘iroushow the South except to and from

that. portion of Florida south of the line of the Seaboard

‘Air Line “extending from Jacksonville to River Junction,

in which transportation conditions were found to warrant

a basis of class tates substantially 15 per cent higher.

The seale preseribed in the original report herein is

shown in column 5 of Appendix.B, That seale hadits origin

in Pierpont Mfg. Co. v. Sou. Ry, Co., 50 7. CLC. 81, wherein

division 8 found it to be reasonable and prescribed it for

apeliontion on the Southern Railway from certain points in

Sonth Carolina-to Savannah, Ga. In three subsequent cases

the seale was reviewed and, as subjected to the®voneral rate °

[fol. 46] changes, was either prescribed or approved for

application om logs between “various points in the South.

Southern Veneer Asso. v. AwC. L. RL R. Co., 62 1. CoC. “6

Southern Cotton Oil Co. vo AL CLL. RL R. Co., 120 : ¢.

190, Sawmill Logs from North Carolina, 136 Lt -

» 46)

» ‘

Meanwhile, the Alabama commission adopted the same

seale and it is now in effect intrastate on defendant’s lines

in Alabama. The Georgia‘commission likewise adopted it

for intrastate application inithat State, but suspended its’

application beeause of the existence of the-Cummer, scale i

‘Florida. The Corporation Commission of Virginia ; p-

“proved the seale for application on defendant’s lines in

Virginia and it is. now in effeet in that State. The Seale,

extended to cover distances up ‘to 450 miles, was preposed

by defendant fax adoption in this case at the original hear-

ings and defendant expressed willingness to establish it

for interstate application over its entire system except

south Florida. Although the former order prescribed the

seale only from northern Florida to Georgia for distances

of 170 miles and less, the defendant later voluntarily estab-

lished it for uniform application on interstate traffic for all

«listances over its entire system except from points on its

line south of the line of the Seaboard Air Line from Jack-

sonville to River Junction, from whicht established rates

15 per cent higher than from points north of that line. Tv

nearly all instances these rates were reductions from those

previously in force. -

Columns 3 and 4 of this appendix show the rates apply: ing

on logs intrastate in Florida on the Seaboard Ai Line and

the Georgia Southern and Florida, respéctively. It will be

noted that the scales applying on these lines are approxi-

mately twice as high as the Cummer scale. ’ \

- Column 2 shows the Florida intrastate rates’of det fondant

and the Seaboard Air Line on logs*not over six feet \in

[fol. 47] length. These rates were established to permit the

movement of short logs which would otherwise vo to waste,

but which could be used by manufacturers of crates. This

scale is somewhat lower than the seale prescribed in the

original report herein but is substantially higher than the

Cummer seale. (On intrastate traffie in other States and

on interstate traffic generally no rate distinetion is made as

between lone and short Logs.):

Sonie southern lines, particularly those operating in. the

Mississippi Valley, have. two seales of loge rates, one for

ordinary loeal application, and the ‘other, a scale of

transit or reshipping rates, applying when a ‘certain pro-

portion of the lumber or other manufactured product is

shipped over ihe lines of: the earrier delivering the logs.

riers in the South. .In Farris

The net transit or reshipping ratés are usually lower than

the local rates. The interstate net transit seale of the Tli- |

nois Central and. Mobile & Ohio is typieal of such scales.

It is shown in column 7 of appendix B, and is considerably

lower than the interstate local seales applying on those

lines, which are shown in-colume:s Sand 9. This net transit

scale, except for distances under 20 miles, js more than

twice as high as the Cummer scale and compares favorably

with the scale préscribed’ in the original report herein,

(column). The latter scale, hereinafter referred to as de-

fendant’s interstate scale, now applies interstate generally

between points not onty on defendant’s lines but also on

the Seaboard Air Line, and the Southern, and as net tran-

sit rates on the Louisville & Nashville. It will thus be seen

that this seale or_one that compares favorably with it, ap-

plies interstate over the lines of theanost important car-

ardwood Luimber Co. vy.

Louisville & N. R. Co., 178 1. CLA‘. 671, division + prescribed

eross (local) rates on logs from numerous origins in the

South to destinations in Tenhessee, which jates are con-

[fol. 48] siderably higher than defendant’s interstate séale.

The single-line scale preseribed in that°ecase is shown in

column 6 of appendix B. i

‘In appendix C the Cummer seale is compared with de-.

-fendant’s intrastate log rates in other southern States. It

wil] be noted that the rates applicable in Virginia and Ala-

bama, Which. were approved by the regulatory bodies of

‘those States, are the same as defendant’s interstate scale;

that in Geoteia the-local rates are somewhat higher and

the transit sates somewhat lower than defendant's inter-

state ‘scale; and that the North Carolina and South Caro-

lina rates are somewhat lower than defendant’s interstate

sale but average considerably -higher than the Cummer

scate. Applicatians are pending before the proper author-

ities to permit the establishment of defendant’s interstate

scale uniformly on intrastate. traffie throughout those

States, approval of which, it is testified, has been withheld

because of the low-inttastate rates in Florida. on

-Transportation conditions in Florida .are not sueh as

. Warrant.a lower basis of rates on logs in that State than

elsewhere on defendant’s system. Transportation condi-

tions on defendant’s lines in Florida are not more favor-

able but on the contrary are less favorable than on de-

fendant!s system outside of Florida. The cost-of the serv-

ice in Florida is higher than on the remainder of the sys-

tem, as shown by cost evidence referred to in detail here-

inafter, Density of traflic in Mlorida ‘is much lighter than

on defendant’s lines elsewliere. The following table shows

the traflie density on defendant's system as a whole, on

its lines in FPlor ida, and on its system excluding Florida:,

|fol. 49) :

Revenue Ton-Miles per Mile of Road e

Year System Florida Svstém excluding Florida

1021... Pekar : 514,955 . " $41,152 = 618,635

1922 ee ee, eh 409 026 754 341

1923 Peay yao a einen 764,228 "512,505 915,990

ER . 774,029 , 570,583 897 150

1925 ar aegaa a 907 958 + 740 6383 1,009 225

1926. ROhd hee tel aaa 963 , 569 869.411 ¢ 1.021 ,.6f0 *

ART 1 . 747,717 - 570,932 861,773 .

A a ae 647.542 | 442,245 781 682

EP FEO 637 .039 400 ,002 , TO4 395

Se eget eae 556.771 369 979 O48 395 Ry

The Florida mileage increased from 37.4 pew cent of the

svstem mileage in 1921 to 40.0 per cent in 1930. It appears

that the increase in traffie density on the system during

1925 and 1926 tellowed closely the inerease in traflie den-

sity in Florida during those years.

In the Florida peninsula the tratlie density is even lighter

than in the northern: part of Florida, that is, north of the

Jacksonville-River Junction line of the Seaboard Air Line.

In 1927 there were 894.54 miles of yailroad in Florida north |

of that line that were operated for freight traffic, and

4,183.01 miles in Florida south of that line. The. trattie

density of the lines in Florida north of that line wasi615,318

revenue ton-miles per mile of railroad as compared with

DO7.286 revenue ton-miles per mile of railroad south of

that line. The less favorable operating conditions in Flor-

ida south of that line have given rise to the general prac- |

tice of permitting the addition of arbitraries to the rates -

on interstate traffie to and from points in that territory.

See Southern Class Rate Investigation, 100 T. C. C. 513,

585, (26, 646; 128 1... C. 567, 594, G02"

The risk in transporting logs Is small in so far’as loss or +

damage to the logs is concerned but there is a much eyeater

risk arising from the probability of a tram wreck in the

event the logs break loose.

(fol. 50) The Cummer seale is,much lower than the basis

of rates preseribed) for application throughout central

territory in Publie Service COmmission of Indiana v. Ann

Arbor R. R. Co. et al, 85 1. CoC. 533. Rates equal to 65.

~per cent of the sixth-class rates contemporaneously * ef-

fect between the same points were there found to be rea-

sonable rates. The order there entered resulted in rates on-

‘le£s ranging from 5.20 cents for’5 miles to 20.80 cents for

560 miles, the rate for'170 miles being 12.35 cents, whereas

the Cummer seale rates for 5 miles and 170 miles are 1.71

cents and 5.70 cents, respectively. The report in that case

referged to ‘the lower operating costs and the ertater

tratlic density’ i in cential abled than in southern

territor ie |

So far as the record in this case shows there is no other

‘ale of rates on logs as low as the Cummer seale.

” Defendant’ s interstate seale and the Cummer seale are

compared with the rates on other important low-grade

commodities in appendix D. The freight charges per car

under the rates shown are also compared. The rates shown

on these other low-grade commodities are the rates appli-

‘able between Georgia and Florida, buf substantially the

same level of rates‘applies. intrastate in northern Florida.

Approximately 40 per cent of the total tonnage trans- *—

ported’ by defendant consists of these ‘low-grade com-

moditiess and a substantial portion of defendant’s total

freight revenues is “derived from their tr ansportation,-as

is Indicated by the following results of a- traffie test for the

month of May, 1926:

lfol. 51 -

Per cent of Per cent of all ~

Conmnodit v all tonnage freight revenue Valwe pier ten

Laws 7 26 2.05 $2.8)

Brick oo artifieml stone, 3.30 e 23 ;

Sand and gravel ; 26.49 9.16 $,35 to S135

Lime plaster, Oth * 0.39 ,

Cement - é s 2.29 - 2:05 . . 7.48

The above evidenc® warrants the conclusion tHat the

Cuminier seale rates are abnormally low. Upon similar

evidence submitte dat the-original heari ing division 4+ found:

that they are ‘léss than reasonably compensatory”? We

aflirm that fitdine. In its report division 4 said?’

It is manifest, we believe, that the intrastate rates as-

sailed, which on the average are less than half of the pro-

posed interstate rates, are less,than reasonably compen-

satery. The rate for 160- miles yields but 4:25 mills a ton-

y °

mile, and, based on a lading of 60,200 pounds, 12.8 cetits a

car-mile, They are approximately one-half of the rates,

prescribed in Rates on ( ‘hert,. Clay, Sand, and Grav el, 122

I. C. C. 133, on sand and gravel in the Southeast and less

than one-half of the rates preseribed in the supple ‘mental

report in that case, 140 1. C.C.,85, to points in Florida

south of the Jacksonville-River Junction line of the Sea-

board Air Line, As stated in the original report in ‘that

ease, sand and gravel are of unusual low value, it being

doubtful whether any traffic moves which is worth less at

poigt of production, load very heavily, and normally move

in considerable volume ‘without: unusual switching opera-

tions at cither end and without anything in the nature of

spec ial services.

In considering the question of the relation of the Cum’

mer scale rates to the defendant’s income, we may notice

what the defendant’ income is.” The evidence here shows

the investment in defendant’s properties as stated in its

‘property investment accounts\and its rate of return. upon

that amount. In 1926 its ae of return on investment in

road and equipment, not including materials arid supplies

amd cash, was 6.50 percent. hi the subsequent vears up

to the timevof the rehearing its rate of return was as fol-

lows: T927, 5.70 per cent; 1928, 5.02 per cent; 1929, 4.55 per

[fol 52] cent; 1950, 2.54 per cent. The following tabula-

tion shows the supporting figures for the vears 1926, 1929,

= 1950: | ‘

1930

— 1926

JInvestment in road and equipment S270.564.5 345.512

Materials and tapes S690. 7 TOF 668

Cash... :. SADE O52. 421

Total property investment at end of ,

WE Vode ese ee 287.758.2244 306,439,250 305,977,599

Net railway oper: ating | ineome..... oars cel 19.874 207 7.241304

Rate of return: / ; | |

On investment in road and equip-

(1) Shp Me Pid go A BP Eg tent 6.50°S) 4.55", 2. O44

On investment in road and equip-

ment ne materials and ‘

WU Sere ae te 6 30°; 1.455; 2.48°;

On investment in road and equip-

ment including raterials and a, |

supplies and cash. .°...... <q... 6 11 4.20%; 2.875

The defendant’s Florida log trafic is an important one

and the revenue from that traffic has a substantial influence |

° ‘

upon the defendant’s total rev enues. During the five-year

period, 1926-1930,’ system log traffic averaged 7 per cent of

the total sy i traffic. Nearly 50 per cent of the system

log traffie was in-Florida. For instance, in 1928, the de-

fondant Aaowskaihe a total of 51,801 cars of logs on its

system, of which 27,119 cars were in Florida.

The foilowing table contains a ‘brief analysis of the log

trafic of the system.as a whole and on its lines in Florida

for the vears 1928-1930; *

lfol. 53] :

1928 | 1929 1930

System: :

Total traffie (tons). ...-. t, sete Peters 20,402,922 18,951,802 16,784,331

Log traffie (tons)..........0.....4 foes y 3,482,874 949.840 667.612

Per cent of log traffic to total traffic. 7.0 5.0 4.0

I oy nes sa acu aes cae cal - $52,019,283 $52.188.639 $46. 428.030

ee so Fk oiin Pete eee af 997 , 139 794 334 615.393

* Percent of log revenue to total revenue. . | 1.9 | 1.3

. dlorida: : :

. Total Florida traffie (tons), .......... 8.622.556. 8.547.924 7.860.058 ,

Florida log traffic (tons). fea ee 814-777 366 426. 272 ,150-

Petr cent of Florida log traffie to total | }

PMTs AEGING Soo vp cred eees Redon eat 9.4: 4°3 “3.6

The above figures reflect the small revenue burden borne

by the log traffic. In 1928, for insfance, the system log ton-

nage constituted 7 per cent of the total system tonnage,

Whereas the revenue from the log tonnage was only 1.9 per

cent of the total revenue:

.° The above analysis turther shows that the revenue from

the svstem low traflic did not decline proportionately with

the volume of that traflie. In 1930 the Jog traffic of the

system was 667,612 tons as compared with 1,422,874 tons

1928, whereas the revenue from the 1930 log traffic was:

$615,595 as compared with $997,199 iy 1928. Stated m per-

eontages, in 1930 as compared with 1928 the log traftie of.

the system declined more than 50 per cent «but the system

' log revenue declined only 38 per cent. The smaller decline

in the revenue was no gs due to the fact that in 1928 the

Cummer scale was in effect whereas ttlroughout 19380 -the

Jnereased rates preser vihed by the former order herein were

collected.

Of much assistance in the det termination of the effect of

increased intrastate log rates in Florida on the revenues of

defendant is the fact that the increased rates prescribed by _

the former order were actually in éffect for.a substantial

40 4

[fol. 54] period and were applied on the traffie moving dur-

ing that period. .Defendant submitted in evidence at the

hearing in Jrne, 1931, a statement showing all shipments

of the kinds of logs here in question which moved over its

lines intrastate in Florida during the period. from Febru-

ary 8, 1929, to January 31, 1931. This statement. shows a

total movement of 18,602 carloads in. that period on which

*gTOSs iretgat revenues of $571,508.94 were collected: If

the Cummer seale had applied, this movement would have

produced gross freight revenues of only 4¥281,225.75, or

$290,283.19 less than those actually collected.* ;

Averring that there is.no condition at any point on its

lines that’ would justify higher rates on logs than those

applicable within the State of Florida, defendant submitted

testimony to the following effect, showing that the exist-

ence of low log rates in one State has an influence upon the

log rates in 6ther Statesi*The record in the present ease

shows the influence upon the Georgia rates of the intra-

state rates in Florida. In South Carglina the State eom-

mission at first approved defendant's present interstate

rates for int rst ite application but later reduced them be-

cause the rates in North Carolinaewere lower. In the CASC

that is now before the North Care@lina commission the éx-

istence of rates between peints m Virginia on a line other

‘than defendant's’ ig one of the principal obstacles to secur-

ne the application of defendant’s uniform seale in North

Carolina, dn every case involving defendant's interstate

rates, on lows the existence of lower levels of rates within

some of ‘the States served by defendant has been urged as

a justification for lower interstate rates on lags.

fYol. 55] Defendant submitted the following evidence to

show the total losses it would have-sustained had the Cum-

mer seale been in effect during the: veags 1929 and 1930

uniformly on intérstate and intrastate traffic throughout its

system:*The movement of logs on its system, ineluding the

lone but not the short length logs in Mlorida, consisted of

‘Restitution ‘spits for the recovery of all amounts paid

in excess of the Cummer'seale rates on shipments ‘during

the period from February 8, 1929, to April 10; 1931, when

the higher intrastate rates prescribed by the annulled order

- of division # prevailed, were instituted and are pending.

am-

930

its

the

| of .

aid

ing

hen

der

se eee

Pm ee pay ‘ Se ee ee eres eee oe

3,450,765,300 pounds,* af which the interstate movement

consisted, of 406,134,800 pounds and the intrastate 2,994,-

~ 630,500 ‘pounds. The revenues from all of* these logs

amounted to $1,483,42487,* of which the revenue on inter-

state movements amounted to $266,654.12, and on intrastate

to $1,216,770.75. If the Cummer seale had been applicable

on all its log movements the reduction in revenues would

have been approximately as follows:

Intrastate: :

Virginia ‘ | $2,926.20

North Carolina Ae 95,804.17

South Carolina... eas 99,793.77 |

Georgia . RES te ee NS oN aere 29,068.53

Florida 290,283.19 .

Alabama ....... | 13,245.47

Interstate .... PAE - *” 144,259.88

BW oe ec $675,381.21

These figures represent approximate losses, as théy are

tiot based upon an actual re-rating of: the tonnage, except

upon the long Jength logs in Florida, the losses on the inter-

‘state movement and on the jtrastate movements other

than in Florida having been arrived at on basis of the per-

centage that the Cummer seale is of the actual seales ap-

plied,

-If defendant's preseiit. interstate scale had’ applied uni-

formly on intrastate traffic en its system in 1929 and 1930

| that scale would have had the following effect upon the de. -

Tendant’s- revenues if the traffic had been the same: There

[fol 56] would have been an increase in revenues-in North

Carolina of» $65,427.37, in’ South Carolina $7,154.14, in

Geereia $14,567.52, a total increase of #87 229,90, - ‘bhe Te

would, of coursé, have been no change in Florida, -ir ‘Vir-

ginia, or in Alabama, because the preXent interstate seale

Was then in effect in those States.. Nor would.{here have

been any change on interstate traffie because the defend-

ant’s present‘interstate scale was then in effect,

"These fieures do not/ exacly correspond with ‘those

given in the iable set ovit above, but the variance ts so slight

that it is negligible.

ce 4

“»

4 3 . . ‘ . :

The Florida interveners contend. that the inerease in the

Florida tntrastate rates has had the effect. of reducing the

volume of the Florida log traffie and that asa consequence

there has been a décrease in the defendant's revenue from

that traffic. [ft is true that since the original hearings in

this proceeding (October, 1926, and January, 1927) there

has been a decrease in the volume of the Florida intrastate

log movement. The extent of this decrease is indicated in

the following table showing the number of cars and the

tonnage transported therein during the five years 1926-

1930: | : ;

i " Year ; Number of cars a Number of tons

1926. 0. ee .- "4,914,361

oo. . 35,415 1,032,927

@iI28 27119 814,777

RE Pen rs ac Sas a + Ps V5,207 * 366,426

1930 ‘ 9316 ~° 972,150

4 Mw P »

The figures’ for 1926 and 1927 must be disecoynted some-

what for the reason that they include posts, poles, and cord

wood/as well as logs. The statistics for those years grouped

a the-four commodities and information ag to the exact num-

fee bor of cars and tons of logs that mayed is not available.

Parts of the declife in the Flyftda low traffie has bee w®

due to the fact that two Inmber fompanies whieh operated

4 mills near Jacksonville at the time of the original hearings,

fj —. the Brooks-Scanlon Corporation at Kastport and the Put-

4 nam Lumber Company at Milldale-and Ortega, have since

iy moved their plants to loeatioas adjacent to their timber

is > [fol. STE holdings and no longer ship their logs over de- .

i fendant’s lines. At the time of the original hearings these

i companies drew. their logs, usually in trainlo-d lots, from,

rl points on defendant’s Perry branch, about 166 miles west

i of Jae ‘ksonville, There was evidence to the -éffect that it

A. Was gineconomical for mills to be located so far from the

timber and that even the Cummer scale vate for that dis-

tance, 3.7 cents, was higher than these mills could afford

fo pay. The Putnam Lumber Company then indicated its

intention to abandon those mills and to develop a plant in

the timber. Int 1926" - acquired a mill at Bond’s Mill,

about-85'miles sash of Jacksonv ‘lle, and in 1927 and 1928 it

completed the construction, of two mills at Cross City, on

defendant’s Perry branch. Shortly after the intrastate

rates were increased in February, 1929, the Brooks-Seanlon

S225

Bs re SS

1>°

Corporation began the construction of a, mill at Foley,

about 5!5 miles southwest of Perry. U sie the completion

of that mill the one at Eastport was abandoned. During

the six-year period from 123 to 1928 the defendant’s gross

revenues from the movement to Kastport averaged $309,-

S82.60 a vear, Defendant's eross yevenues from the move-

ments to the Putnam mills averieed slightly amore, than

$200,000 a vear, This movement — have been diséon-

tinued even thoueh the Cummer seale had remained in

force, Since the company had decided to move ifs mills

to the timber prior to the rate increase,

~The defendant asserts that the change in ladatton of

these mills from the vicinity of Jacksonville to Foley and

Cross City Wds had a favorable effeet upon its revenues in

‘vielded by {

two respects first, it has rendered unnecessary the trans-

portafion of the logs at the inadequate remuneration

lec ‘ummer scale; second, the present location

of the mills in the interior has resulted’ in- producing ton-

[fol. 58] nage of Jumber rather than of logs, and the tr TS-

portation éf lumber from the standpoint Onet revenue

is vastly better than the transportation of logs under the

Cummer seale. The average weight ‘of 983 cars of logs

handled under the.Cummer seale for the Brooks-Seanlon

¢ ovporation and the’ Putnam Lumber ( ‘oMMpany was 60.200

pounds per car, the average hanl was 158 miles, and the

reveaiae was $20.47 per gar, or 12.9 cents pe¥ caranile, In

1930; 90 per cent of thedumber movement from Foley and

70 per cent of the lumber movement from Cross Cit® to

“destinations on defendant's lines went to Jacksonville,

The rate on lumber from Foley: to Jacksonville is 914

cents and based on the average. per car weight ofall lumber

in the southern region of 52,000 pounds, the revenue .per

car from Foley to Jacksonville, 169 mils $47.53. wach

equals 28.1 cents per 1 ages The rate on lumber from

Cross. City to Jackson

ings was from Otto Creek, a point on defendant's Perry

liranch, to the mill of the Cummer ( ypress Company at

Lacoochée, This movement, whiéh was in trainload lots,

began in January, 1925, and ended on May 5, 1928, which

Was after the original hea¥ings but prior to the decision of

division + herein, August 2, 1928. This movement ended

‘ille, TIS miles, is 813 eénts, pre.’

ducing revenue of $45.53 per car or 36.7 cents per ear-nile. ‘

Another large movement at the time of the original hear

i ee

‘

4 7 i,

not because of the rate increase but because , of the exhaus-

tion of thecompany’s timber near Otter Creek. Defend-

ant’s gross revenues from this movement aggregated $120,-

261.40. - In January, 1929, the Gummer Company began to

ship logs from Homosassa over defendant's line to Otter

Creck, whére iteoperated a small, secondary plant, and it,

continued this ymovement after the inereased intrastate

[fol. O97] rates beeame effective on February 8, 1929, In

1 April, 1929, it began to ship eypress logs from Homosassa

rt its mill at Lacoochee, over defendant’s line. In February,

1930, the movement from Ilomosassa to both Otter Creek

and Lacoochee ended, and since then the Cummer Cypress

Company has shipped no logs over the defendant’s lines.

Defendant’s gross revenues from the Homosassa-Otter

Creek moyement were $15,507.09 and those from the

Hlomesassa-Lacoochee movement was $77,609.89. These

movements wereestopped.in February, 1930, not because of

‘the rate increase, for the movements contimeed for a year

after the increase beeame effective, but because the:timber

‘

il at Hlomosassé was prac ‘tically cut out, although some addi-

7. tional logs of inferior grade would probably have been eut

and shipped had the Cumuner scale remained in force, Its

¥ — present supply of logs from timber on the Withlacoochee

~ River is hanled over its own, logging road to the Seaboard

é Nir Line and thence over tha} lime under trackage rights

i. for a short distance to its mill.at Lacoochee.

i. Representatives of these three interyeners, the Putnam

i Lumber Company, the Brooks-Scanlon Corporation and the

i Cummer Cypress Company, testified at the further hear-

i ings fhat they would not resume the shipment of their logs

i over defendant's lines even if the Cummer scale re ‘mained

in effect.

The fact that the total mmoveneint during the period of

nearly two, years. from February 8, 1929, to January 31,

1931, consisted of 18,602 carloads was verified by an in-

vestigation conducted by interveners; and their evidence,

after eliminating 7,353 cars which moved in trainload lots’

from Hines to Palatka, showed that of the rémaining vol-

ume (11,169 cars) 7,965 cars moved in the period from

February &, 1929; to January 51, 1930, and 5,204 cars in

the succeeding 12 months. (They wery/nabie to develop

when 81 cars moved.) ,

[fol. 60] Interveners’ data,also shod the winatbihtiad with

respect to these 11,169 carloads:

: . e

Pine Cypress Hardwood

- Cars Rewneus Cars Revenue Care Revenue

First period. . 1,282 $31,052.33 2,890 $74,866.90 3,793 $96,971. 97

Second period... 206 . 5,288.84 1,566 36 387 O01 1,342 28 658.90

From what has been said above it is clear that the de-

cline in the Florida log movement can not be ascribed

wholly to the rate advance. Part of the decline has no

doubt been due to that cause but a large part Has been due

to the change from mill locations uneconomical because too

far from the timber and cessation of movements because

of exhaustion of the timber. The generally depressed ¢on-

ditions ‘throughout the country, in Florida, in the lumber

industry generally and in the Florida log industry have

‘also had a marked influence upon the volume of the log.

nrovement in Florida, . The table below shows the decline

in the total system*traffie and in the system log traffie dur-

ing the five-year period 1926-1930:

Tot al traffic. Log traffic

Year Cars Tons Cars Tons

. eee? Sz. veces 944,101 27 025 , 422 79,114" 2,196 971°

RBA « BR 839 049 23,134,496 78 ,%32* 2 056 , 593°"

EPP Oa Oe 20 402 922 5t, 801 1 422.874

_.. RRR Hee See ee 718,549 | 18.951, S02 37 206 — 949,840

1900 oneal tae aos Cees *.. -©21°242 16,784,331 25,738 667 612

. lnc Judes posts, poleSand cord wood.

Likewise there has been a decline in the lumber traffic

throughout the United States, in the Southern Distrie ‘t, and

on.the defendant’s system, as shown by the following table

which also shows the gross revenues received by defendant

for the lumber tonnage transported over its lines: ;

- am

{fol. 61] United Southern _ Atlantie Coast Line

States District ;

Year * - Tons ‘Tons Tons Ciross*tevenue

| Ee eee 48,617,871) 17,708,828 2.665.512 $5,503,389 44

a Ff 20 311.619 3,751,016 8.092 819 S86

Ree 42 508 ,620 17 872.965 3,093,168 ~ 6.641.449 38

Saree 40 565.975 17, 403.907 3.109.401 6,750 434.28

a...%.....-. Fe ,eee. 348 11.395 .S77 2.211 . 258 4.711.383 72

Thus, whilé there has been a substantial decline in the

Florida log traffic, there have alse been declines im other

| traffie, and the same forces that operated to cause a de-

cline in other traffic were also no doubt responsible Jor ——

much of the decline in the Florida log. trafhe,

Coming now to consideration of the probable future vol-

ume of the Florida log traffic, it is relevant to inquire into

the total amount of standing timber now in Florida and

how much of the total is reasonably tributary : to the de-

fendant’s lines.

The record indicates that, unlike most of -the other south-

ern States, vast stands of virgin timber remain in Florida.

An official bulletin of the United States Department of

Agriculture (Circular No, 124, October, 1930, entitled

‘*Rate of Growth of Second-Growth Southern Pines j in Full

Stands’’) indicates that in 1927 theré remained.in the

eleven chief pine-producing States of the South 12,650,000

.- aeres of virgin pine, of which 5,450,Q00 acres, or 43 per

cent, were in Florida. That bulletin also states that in ad-

dition to this area of virgin pine, there is an area of 12,559,-

000 acres of cut-over pine lands in Florida, ‘of which 3,150,-

000 acres have been fully o? partially restocked to saw

timber, and 4,300,000 acres fully or partially restocked to

saplings and cord wood.

The figures published in the Departments balletie were

based chiefly on a survey of standing pine timber made

in the main producing regions from Virginia to Texas in

1924. The Department’s bulletin states that this survey,

which was conducted by the Southern Pine Association, is

[fol. 62] believed to be the most accurate survey of fimber

resources yet made in any important lumber -producing

region of the United States. The data were obtained in

the form of board.feet, but have been.converted into acre-

ages for the purpose of,this bulletin. The com; ited figures

have been checked against the local knowledge of State

and Federal forest officers and other authorities.’? A com-

pendium published by the Southern Pine pana ech en-

titled ‘‘Keonomie € ‘onditions in Southern Pine Industry”,

presented by the Association to the United States. Timber

Conservation |. wd, dated July 1, 1931, shows the number

of board feet » ihe acredges published in the Department’s

‘bulletin, . The 1924 survey showed that in Florida the pine

timber stand was 21,582,000,000 feet of iene and 2,966,-

000,000 feet of shortleaf, or a total of 34,348,000 000 fect

of pine. The produetion in Florida during the six years

1925-19380, totaled 4,564,000,000 feet, the regrowth in those

six years being 2,129,000,000 feet, or a net depletion of

2,435,000,000 feet, leaving the then present (July, 1931 ) pine:

timber stand in Florida, 21,913,000,000 feet.

—

0 The above figures -include pine only. That species of

wood is of primary importance — in the Fl lorida lumber in-

; _ dustry. Cypress is second in importance, and hardwoods

f. -such as ash, gum, hickory, cedar, and oak, are third.* The

record contains no figures as to the stands of ¢ypress and

hardwoods in Florida, but there is testimony as to the pro-

duction, indicating that the annual: production of cypress

[fol. 63] in Florida is around 200,000,000 feet,’ and that

‘hardwood constitutes probably 5 to 10 percent of the-total -

business. ., . * 3

The record affords ad accurate basis of determining how

much of the -sfanding timber in Florida is tributary to

q the Atlantic Coast Line.’ By reference to the map of that

railroad in Florideshowever, it will be seen that its main

: and branch lines férmza network which virtually covers

the State, except the extreme southeastern part. This fact,~

= im eennection with the practice of constructing logging

roads, seems to indicate that a large percentage of the

standing timber in Florida is tributary to defendant’s lines.-

The defendant’s freight traffic manager testified :

eeercoee

4 ‘‘Not less than one-half of the timber in Florida that is ,

‘now reasonably adjacent to railroads is reasonably adja-

‘cent to the Atlantic’ Coast Line: . Pine timber along the

south Atlantic seaboard has been characterized by the’

"+ United States Forestry Department as one of-the fastest

reproducing kinds of trees in the world, and the total

amount of timber in Florida will be large as a result.of re-

growth. However, if the Atlantic Coast Line can be as-

sumed to transport 40% of the logs to be produced: in

Florida from timber now standing, it will handle approxi--

mately nine billion feet, or appr outmately 128 00 cars of

os ee

- ae

*The aon seale applies on all species of logs except

-eedar. The interstate rates found unreasonable in--the

-g Original report herein applied on all, species of logs*except

walnut, cherry and cedar, For this reason, the former

order in prescribing interstate and intrastate rates on legs

excepted those three species. The exception is unimpor-

tant in so far as walnut and cherry are concerned, for there

appears to be no movement of those species of logs in

Florida. The term ‘‘hardwood’’ as used hereinafter will

be use to vita hardwoods ather than: those three.

Biswreryasscosr ss:

WOM pO oe

logs. If the average length of haul. should be. 81 ‘miles,

as was the case in 1929-30, which average haul may be

expected to be increased as the timber becomes more

searee, our revenues under’ the Cummer seale, at an aver-

age revenue of $16.10 per car, would be equivalent’ to gross

revenue of $2,169,977.00. If the same transportation should

be. performed at the rates prescribed by the Interstate

Commerce Commission, which for the average haul of 81

miles is 5.5 cents per 100 pounds, or $38.50 per car, the

etoss révenue would be $4,949,945.00. The difference in

the gross revenue under the two ‘seales of rates w ould be

2,779,968.00. ”’

A large movement of logs whith was going on at the

time of the original hearings, and whith still continues, is

the movement of cypress logs from, Hines, a point on

‘defendant’s Perry branch, to the umber manufacturing

[fol. 64] plant of the Wilson Cypress Company at Palatka. .

-began ,in January, 1926. “The company has its own log-

- ging road in the timber, connecting with the defendant’ S

line at Hines, from which the haul to Palatka is 119 miles.

Although this intervener, as well as others, testified at the |

original hearing that it would be impossible to contintte

he movement of logs over defendant’s lines if the Cum- ‘

_mer scale were ‘increased, it actually has done so. It ap-

“pears that under normal conditions it will eéntinue to ship

these logs over the defendant’s line¢guntil the timber ad-

_, Jacent to the Pegry branch is eut out. Under the normal

rate of cutting, it appears this would occur in about one

and one-half to two years after the time of the further

hearing. During the four-year period, 1926-1929, the de-

“” fendant’s gross revenue from the Hines-Palatka movement

averaged nearly $90,000 .~@ year. During that four-year

period 16,658 ‘carloads were shipped, averaging 4,164 car-

loads a year. During 1930, whep the increased -rates ‘were

in effect, 5,142 carloads were shipped, on which the de-

fendant’s gross revenue was $205,096.20, averaging $39.88

per car at the increased.rate of 6.5 cents for the 119-mile -

haul. During the first five months of 1931, 1,916 cars

moved on which the freight charges (gross revenue of de-

fendant) amounted to $50,366.17. Palatka is served by

the Southern Raily yay System (Georgia, Souther n & Florida

This -Hines-Palatka movement, which is in trainload-lots,;———>

Ry.) and by the Florida East Coast .Railway, as well as

_ by. defendant’s line. * “There is a small movement of logs

into the Wilson Cypress Company’s mill at Palatka over

the Southern. and the Florida East Coast. Besides the

movement over defendant’s line from Hines there is a

small movement over defendant’ s lines from various other

points in Florida.

[fol.65] There is also at present a small movement over

defendant’s lines from various Florida points to the mill

ef the Putif&&m Lumber Company at Bonds Mill and a.

larger movement. to the mill of that company at Cross.

City. During the period from February 8, 1929, to Jan-

vary: 31, 1931, the movement to Cross City consisted of

,260 carloads af pine and cypress logs from seven dif-

the movement to Cross Gity was 102: featloads from three

points of origin. 4 ee

Although the Cummer Cypr ess Company no longer ships

rai points of Croce dity an the succeeding five months

its logs over defendant’s lines, it does purchase and, re-

ceive logs shipped over defendant’s lines to its mill at

Lacoochee from points within distances of 10 to 18 miles.

During the five-month period above mentioned this move-

ment totalled 93 cars.

In addition: to the aboye-mentioned movements to Pa-

lataka, Bonds Mill, Cross City, and Lacoochee, there were

movements during said five-month period to Apopka, Buf-

falo. Bluff, Gainesville; Jacksonville, Kissimmee, Lake

‘City, Loughman, Leesburg, Nocatee, Perry, St. Peters-

burg, Sanford, and Tampa, from numerous points of origin.

At the time of the former hearings there was and at

‘present'there is a substantial movement of hardwood logs

_in Florida. There are several: mills in thg State that are :

engaged exclusively in the production of hardwood lum-

ber, including that of the intervener Wilson Lumber Com-

pany at Perry. Hardwood trees are usually found in tracts

. consisting predominately of pine and cypress and are

usually logged as an incident to, or by- product of, the pine

or cypress operations. The hardwood lumber business : is

relatively new in Florida.: Formerly the hardwood trees

were left standing but now it is the practice of the pine

[fol. 66] or cypress operators to cut the hardwood and sell

the logs to the hardwood mills. In some instances the

4342

‘hardwood aperators own their own tracts of timber. The

Wilson Lumber Company built its hardwood mill at Perry

in 1927. At that titne it made contracts with several of

the large pine and cypress operators in.Florida for the:

purchase of the hardwood. logs cut incidentally to their

‘operations. - There have been fairly large movements of

ash, black gum and other hardwood logs from Hines, Cross

City, Foley, Homosassa, Otter Creek and“other points to

Perry. There have also been some movements of hard-

‘ wood as well as cypress to Necksonvlle As shown by

-the table set out above, 5,135 carloads of hardwood logs

mowed over defendant’s lines i in Florida during the period —

February,8, 1929, to January 31, 1931. “~

Ancther type of log movement: that frequently uc place.

in Florida is the movement from the log shipping point

‘of one lumber manufacturer to the mill of another limber

‘manufacturer. Such movements occur where the lumber

company that cuts the logs is engaged i in the manufacture

and sale of a particular kind of lumber, e. g., pine, and-

sells its eypress logs to a cypress lumber manufacturer.

Conversely, the pine manufacturer often buys. pine logs

- cut by a cypress manufacturer. ‘

The 18,602 cars which moved during the period from.

_ February 8, 1929, to January 31, 1931, were shipped from .~"

113 different origins to 20 different destinations in all

parts of the Stati and the hauls ranged from 6 to 169

miles. At the hearing in July, 1931, defendant submitted

a supplemental statement showing that the volume of the

log-movement over its lines in Florida during the succeed-

ing five months, that is, from February 1 to June 30,:

1931, which were the five months immediately preceding

{fol. 67] the hearing, was 2,765 cars. (The Cummer scale

was restored durin®@ that period, April 10, 1931:) These -

" - cars were shipped from 52 different stations to 17 different =~

destinations.

The record as.a whole warvente thre conclusion that there

- will be a large- Florida intrastate movement of log’s over

defendant’ s lines in the future. The movement at present

is‘at A low ebb, but in view of depressed conditions the pres- °.

ent movement can not be taken as the criterion for the

future. In view of the vast quantity of timber in Florida |

located on defendant’s lines at widely scattered puints in

. gaa ae

Florida, and the probability of the establishment of new

mills, large and small, we entertain no doubt that the log.

traffic will’increase well above the present volume when

economic conditions change for the :better.

In the Florida log transportation: some competition from” —

trucks is met: but only to a very slight degree: It is not

shown that logs can or will be’ transported by trucks except.

for very. short distances, nor that truck competition was or

will be increased under advanced rates. :

' + The defendant urges ‘hat the revenues produced by the- ‘

s Cummer scale are insufficient to cover the cost of the serv-. «

ice performed; that no traffic is of value from a revenue ~

standpoint unless it yields more revenue than the cost of

' . its handling; that its study of the result of the operation

_ + under thesCummer scale is conclusive to it that such opera-

‘tion yields it no profit, but, on the contrary, results in an

: ‘actual loss on the log tr affic as a whole. It is manifest that

.. ¢ 4f the Cummer scale: produces less revenue than the cost |

| [fol. 68] of the service, declines in the traffic have the favor-

crease in the traffic would only serve to augment those

losses. In support of its contention that the Cummer scale

results in losses, defendant submitted voluminous evidence *

bearing upon the cost of transporting logs in Florida. It

is necessary ‘to consider this evidence with a view to deter-.

mining whether it shows that. the Cummer scale rates do

result in revenue losses.

The defendant’s cost evidence ueised with figures. show-

ing that dufing the fiscal year ended June 30, 1929, the

following road train expenses-were incurred in transport-—

ing its system freight. traffic:

+ 6 2g errs

ar) | = " Boss

RAISE AY RAR SON DONC EN

> ' [fol. 69] va ’

4 ‘ _ Acct. No. o

; 401 Trainmen ........ Se a ee Guanes - $2,048,715 - =

1 ' 392 Train enginemen ....... Pee ree 1,571,324 ~— |

‘ 394 Fuel for train-locomotives............ 2,281,332 4

: 397 Water for train’ lécomotives...... 2... - 96,575

: - 398 Lubricants for train locomotives |... . * 49,283

a 399 Other supplies for train locomotives |. 29,281

; 400 Engine-house expenses—train ..:.... 450,414

402 Train supplies and expenses:......... 400,760

~ Ad

, ¥

‘ : a

eo . ‘ . ‘ Cg

. ” wn . uJ

~~ *

. ° ba

ne ae : * :

e J e :

‘ ™

These expenses are: denoiiinated in the ‘testimony ond.

‘ exhibits of record as ‘‘out-of-pocket’’-expenses and that

tern will be used herein, although it should be understood

that it has reference only to the particular expenses

charged to-the above enumerated. accounts. '

An analysis was then made of the accounts of the third

division which could ‘be definitely assigned to the freight

service without question to develop the-out-of-pocket costs

for that division. The third division is wholly in Fl «da,

and includes all mileage séuth, of Jacksonville. The car-

rier’s total mileage in Florida is 2,061.38 miles, all of

which, except 126.34-miles north and west of Jacksonville,

is in the third division. Hence, the out-of-pocket expenses

on the third division were taken as fairly representative .

the out-of-pocket. expenses in Florida. Taking into con-

sideration the total tonnage carried and the distarice of the

carrjage, and jncluding the empty-car mileage, the out-of-*

pocket. cost per gross ton-mile was determined. . For the .

- third division that figure was ascertained to be .0882888

eent. The items w hich made up the total out-of-pocket ex-

_ penses for the third division were:

“Acct. No, e ; ns

‘eB 2 eevee oe BS sae $637,337.05

394° Fuel for train locomotives » ee 606,920.94

- 397 Water for train locomotives ere Re 28,406.12

398 Lubricants for train locomotives. ” 15,379.52

399 Other supplies for train locomotives ——-9,575.70

400 Engine-house. expenses—train .... ~ 126,854.35

402 ‘Train mnppnes and expenses... é 137,772.40

Total Need Seas oe OS Sar ee. ». $2;059,610.66

[fol. 70] The gross ton-miles in Florida during the fiscal

year were*2,332,812,000, which, divided into the tota

of- pocket expenses during that ‘year, .$2,059,610.66, ‘resul

_ in the figure .0882888 cent per-gross ton-mile.: The out-o

pocket expense on the other two divisions combined, simi-

larly reduced to the unit of gross ton-miles, was 1053263

eent. An analysis was also made of the out-gf- poeket ‘costs

on the car-mile basis, which gave final cost figures not-ma-

terially. different from those developed’ on the gross ton-

mile basis hereinafter stated.

amr So fQ~-- + ~

* 4 .

The total freight operating exbennes ‘of the system dur-:

ing the year 1929 were $36,308,813," over five times the

system out-of-pocket expenses. of $6, 920,684. The exact |:

ratio of the latter to the former is- 199069. “ .If this ratio is .

used as a basis of expanding or projecting the out-of-pocket

expenses to determine the total freight operating expenses.

in Florida, the latter%is found to be. .462996 1d per gross —

ton- mile. |t ;

The weighted average distance of the 18,602 wiih of

Yogs transported by defendant in Florida during the period .

' from February 8, 1929, to January 31, 1931, was 81.36

miles, the average weight of the lading was 56,754 pounds,

and the tare w eight of the cars was 33,000 pounds, resulting

_ina gross weight of the loaded movement of 89,754 pounds.

-The testimony is to the effect that the 8g cars Were re-

turned empty almost without exception. Using 100 per -

cent as the proper figure for return empty movement,

ffol. 71} the gross weight of the loaded and empty move-

ment was 122,754 pounds or 61.377 tons. The latter figure .

multiplied by 81.36 miles gives the gross ton-miles as 4,994.

Che unit cost of .462996 cent per -gross ton-mile applied to

4,994 gross ton-miles results in a cost of $23.12 per ear.

his figure-ineludes nothing: for taxes or interest on invest-

ment. When $3.56-per car, as the proportion of taxes paid

by defendant to the State of Florida, and $7.62 per car as”

the proportion of interest on investment of 5°4 per cent,

are added, the cost hecomes $34.30 per ear.

The defendant did not present the figure $34.30 per car.as

representing the actual cost of the service, but stated that

it was greater than the cast because it included certain ex-

penses which were nof attributable to the handling of logs.

*The primary segregafion of total operating expenses as

hetween-freight and passenger. was made in accordance

with the formula which we have prescribed. See order of

_ Dee. 1, 1919, effective Jan. -1, 1920, providing rules for the °

separation of operating expenses betw een freight and pas-

sengzer service on large steam roads. The total operating

expenses were $53,431,589. The proportion assigned to

‘fy eight under that formula, $36,308,813, w vas 67.95% of the

total.

** Byhibits of ieeena erroneously show this ratio as -

23.549. Defendant agreed that the .correct ratio is 19.069.

a’

Defendant also presented another figure, $25.23 per car,

based on the ratio of system out-of-pocket expenses to total

system freight operating expenses after many deductions

were made from the latter. There were deducted, first, all

freight yard accounts, 42 in alt, the total of which aggre-

gated $4,550,039. Then all amounts in 15 other accounts,.

avgregating $4,665,936, were completely eliminated. Many

of these were obviously not directly attributable to the

handling of logs, such as wharves and docks, paving, asse$s-

ments for public improvements, floating equipment, outside

ageneies, advertising, traffic associations, industrial and

immigration bureaus. Some of the others. were clearly at-

tributable, at least in part, to the handling of logs but were

entirely. omitted because of the difficulty of.ascertaining the

proper proportion Ahat shotild be allocated to -that traffic,

For ‘example, station employees in the transportation. block

of expenses, account 373, shows charges to freight of.

’ $3,281,352.20. There would seem to be no doubt but “that a

‘fol. 72] portion of tlte charges to this account is properly’

attributable to the handling of logs. To this account: are

charged agents, clerks, and attendants, telegraph and tele-

phone operators, station agents, ete., who handle the billing

of log shipments and, perform other services. But that ac-

count wa® entirely eliminated.. Finally.there was eliminated

4.4897 per cent of general expenses, amounting to $413, 769.

The grand total thus eliminated aggregated $9,629,744.

This aggregate was deducted from the total freight a9}

ating expenses of $36,308,813, leaving the sum of $26,679,-

069 denominated the ‘‘total haulage expenses.’* The ratio’

of the total system out-of-pocket Saponnen, $6, 920; ‘684, to the

total haulage expenses, $26 679,069,182 D.9405.

Use of this ratio results in a unit figure of .340351 cente

per gross ton-mile (.0882888 cent divided by 2 5.9405 multi-

‘plied by 100). This results in a haulage cost of $17.00 per.

ear. When a proportionate amount is added for. Florida:

property taxes, $2.62 per.car, the haulage cost plus taxes

becomes $19.62 per car. A proportionate amount adde

that figure as representing-interest on investment at 5°

* This ratio is erroneously shown i in exhibits of record as

35.027. Asa result of the error the cost figures were shown

is be lower than they would have been if the eqrreet ratio

had been_used.

per cent, $5.61 per car, ienilite in a final nis of $25. 23

a ear:

The defendant’s general auditor testified that the actual -

oun lies somewhere between :$18.75** and $34.30 per cary

that in determining the lower figure he eliminated ove

- $9,000,000 of expenses embracing all yarditems and certain

other items, some of which expenses are properly attrib-

[fol. 73] utable to the handling of-logs, and that this figure

understates the cost of handling logs; but from his experi-

ence in studying accounts he does not believe it would be

- proper to include all of the expenses included in the. higher

figure, and that therefore. thé_cost lies somewhere between

Cummer scale rates, and from his experience as an account-

_ant, he expressed the opinion that the Cummer scale does

‘not afford'a revenue which is equal to the cost of doing the

business covered thereby; that. as shown by the exhibits

filed, in practically every case the cost, including.a reason-

able return on investment, exceeds the revenue derived, and

in some instances the operating expenses exceed the reve-

nue, without including any taxes or feturn on investment:

The average’ revenue under the Cummer scale on the

the two. Based on his.survey of the application of the.

18,602 cars above referred to was $15. 12 per car. The rates -

_ preser ibed by the order previously entered in this proceed-

ing were in foree during the period in which all of these

18,602 cars moved, and the’ defendant’s actual aggregate —

‘gross revenue on them was’ $571,508.94. Had the Cummer

scale been in effect, the aggregate gross revenue would have

heen $281,225.75. The latter sum divided by 18,602. gives

the above-stated average revenue per car under the Cum-

mer scale—$15.12 per car. It will be noted’ that this reve-

nue is substantially below either of the two cost figures

mentioned above, ‘ 95,93 per car and $34.30 per car. It is

‘$1.88 per’car less than the haulage cost stated hbove, $17.00

percar. °°

The unit cost as given above, 340351 cent per gross ton--

mile as the purely haulage cost, and .462996 cent per gross. ,

ton‘mile as the total operating cost, as applied to specific

movements, -results in the following figuges, with which

** This figure, i is based on the pea % ratio of 35.027.

When reecaleulated on-basis of the correct ‘ratio of 25.9405

it, beeomes $25. 33. .

Py " . ¢.

are included for comparative purposes the figures for the

‘fol. 74] averages of the total movement of 18,602 cars

referred to above:

‘ . Per car

‘ - Total

Purely operat- .

Rev- haulage . ing ex-

enue expense. : pense

: . on Purely dus. . Total plus

f Cum- haulage taxés operat- taxes

° — mer . ex- + and ing ex- and

Moventent « Miles sesite pense! return pense’?. return

Average @f 18,602 cars

during period from Feb.

8, 1929, to Jan. 31,

| ROPES anne AE yrnee 81.36 $15.12 $17.00 $25.23 $23.12 $34.30

Homosassa to Lacoochee. 68. 12.44 13.58 20.15 18.47° 27.40

Perry to Eastport....... 169. 22.10 36.16 53.65 49.19 ° 72.98

Carbur to Eastport... :.: e 20.30 $82.52 . 48.25 44:23 65.63

Homosassa to Perry. 130. 20.62 28.80 «42.73 39.18 58.13

-Astor to Groveland...... 99. 13.78 19.54 28.99 26.58 39.43

! Based on unit cost tof 340351 cent per gross ton-mile:

2 Based on unit ‘cost of” 462996 cent ars gross ton-mile.

Defendant . also submitted evidence showing tee ‘actual

out-of-pocket expenses for the movement of logs from Hines .

to Palatka during the month of November, 1930, agreed to

_ be typical @f the year 1930. This evidence discloses the

results of a special examination of the .expenses incurred

in connection with that partigular movement. The Wilson

Cypress Company operates a private logging railroad from

“Hts tract of timber to a point of connection with defendant’s

line at Hines. The carstused in this service are ordinary

flat cars owned by defendant but specially assigned to the.

~Wilson Cypress Company, which has equipped them with

special devices for los transportation. This special equip-

ment, owned and maintained by the lumber company, con-

sists ‘of four stanchions on each side of the ear, which fit

[fol. 75] into pockets of a design which permits release of

the stanchions to facilitate quick unloading. Chains, fas-

tened to the stanchions hold the Togs in place, and per mit

the. car to be loaded more heavily than a car, staked in the

ordinary way. . The ears are. loaded in the timber and the

» trains are hauled by the lumbgr company over its logeing

road to Hines. The defendant transports the trains to

-alatka, 119 miles, and makes Glivery at the lumber ‘com-

pany’s plant. A: trainload of 40 to 45 cars moves from

-Hines'to Palatka-every other day. The actual time con-

sumed in the trip from Hines to Palatka is about 8 hours. ,

_ -

During the month in question this log’ movement

salwanted to 3,734,936 gross ton-miles, whereas the move-

ment between Hines and Palatka other than logs was only

128,515 gross ton-miles. Inasmuch as the latter is only 3.3

per cent of the total movement, the out-of-pocket expenses,

for the movement..of the trains, reduced to the gross ‘ton-

mile basis, may be taken as fairly’ reflecting the out- of-

pocket expenses attributable to logs. ral

The out-of-pocket expense for the total traffic, 3,863,451

gross ton-miles, was $2,398.55, made up as féllows:

Account , ;

et UN ee ke eer ee we $506.19.

394 Fuel for Train Locomotives....... pee . 1,138.49 .

397 Water for. Train Locomotives............. - 39.50

398 Lubricants for Train Locomotives......... "8.27

399 Other Supplies for Train Locomotives... . | 8.82

400 Enginehouse .Expenses—Train ............ 19.05

.401 Trainmen...:...... Wa REE St ear 062.86

402 Train Supplies and Expenses......... goo 115.37

et er tiene oth . - $2,898:55

—[fol. 76] This resulted. ih an out-of-pocket expense for this

movement of .0620831 cent per gross: ton-mile. The aver-

age loading of the log cars from Hines to Palatk ca during

November, 1930, was 64,000 pounds and the tare weight of

the ears was 33,000 pounds, resulting in a gross weight on

the loaded movement of. 97,000 pounds, and, sinee the re-

turn empty movement of these cars is 100 per cent, there

should be added the tare weight of the ear for the empty

movement, making the eross weight of the logded and empty

movement 130, 000 pounds, ow 65 tons. Thus, 65 tons were

” transported 119 miles, equivalent to 7,735 gross ton-miles

for each ear. If the out-of-pocket expenses on‘ this move-

ment, .0620831 cent per grogs ton-mile, were 25.9405 per °

cent of thetotal haulage expenses, as they were on the sys-—

tem as a whole, then the total haulage expenses on this

movement were $18.51 per car. When 6 cents per car for

Federal income taxes, and. $2.85 per car for Florida taxés

are added, the haulage cost plus taxes is $21.42, and if:

$6.10 as representing a proportionate share of interest on

investment at 5°4 per cent is added to the latter figure, the .-

haulage cost plus ‘taxes and return becomes $27.52 per car.

—

e .

58 | ines a

& : ; .

Durirfg the month in question the rates prescribed by the

former order were in effect. The rate prescribed for the

distance from Hines to Palatka,-119 miles, was 6.5 cents.

This rate applied to the average weight of the Hines-

Palatka shipments, 64,000 pounds, resulted in a revenue of

$41.60 per car. The rate. under the Cummer scale for 119

‘miles is 3.2 eents, yielding a revenue under.the weight of

* 64,000 pounds of logs of $20.48 per car. This revenne is

_but $1.97 per car greater than the purely haulage cost of

$18.51 per car. It is 94-cents less than-the haulage cost

plus taxes, $21.42, and is $7.04 less than the haulage cost

plus taxes and interest, $27.52. |

[fol. 77] The costs in eonnection with the trainload move--

ment from Hines to Palatka ame undoubtedly less than they

are it connection with movements in single carload lots.

The Cummer seale-rates are not trainload rates. but apply

on single carloads; and all present log movements in Flor-

ida other than the Ilines to Palatka movement are carload

rather: than trainload movements. Practically the only

service performed in the Hines-Palatka movement is the

road haul, except that two switches a day are made at the

Palatka plant. No other terminal services, such as are

necessary in single carlot movements, are performed.

The Florida interveners presented no affirmative evi-

dence tending to. show the cost of transporting logs in Flor-

ida but griticized defendant’s cost evidence, their principal

criticisms being that the defendant’s cost figures are based

on the average out-of-pocket expense of handlingvall traffic

on the third division and that the methods employed in as-

signing maintenance and other expenses, taxes, and return

or interest on investment to this traffic were erroneous.

The unit cost figure of .0882888 cept per gross ton-mile was

admitted by defendant to represent merely the average out- |

of-pocket expense of -handling all traffic on the third divi-

sion. It:ean not, therefore, be accepted as indicating the’

average out-of-pocket cost to defendant of transporting

logs in Florida. Nor. Pacifie Ry. v. Dept. Publie Works,

268 U.S. 39; Calif. Growers’ ¢ Shippers’ Protective League

v. S: P. Co., 129-1. C. C. 25, 52. It appears that nearly 25

per cent of the traffie moving: in. Florida consists of fruits

and vegetables which require special and costly service.

The cost of such service enters. into the average out-of-

pocket cost of the third division and would apparently tend

to make it higher than the actual out-of-pocket cost of the

log traffic. The conclusion seems to follow that the aver-

[fol. 78] age cost figure of .0882888 cent per gross-ton mile

is higher than the actual out-of-pocket cost of the Florida-

log traffic.’

Oe the other hand it appears that the unit out-of- pocket

-eost figure developed in connection with the Hines to Pa-

Jatka movement .0620831 cent per grogs-ton mile, is below

the average out-of-pocket cost of the Florida log transpor-

tation. That movement, it must be remembered, was a

reeular one in trainload lots of 4C to 45 cars, and the cost

of handling such: solid trainloads direct between two given

points without any intermediate.train breakup in classifica-

tion yards and without any switching en routé, 7s undoubt-

edly Jess than on single carload mov ements which are han-

dled in ordinary pick-up service.

There appears tobe no doubt that the opecation costs

per unit are generally higher in Florida than the average,

for the defendant’s system as a whole either including or

excluding Florida. This is clearly indicated by various

things. Using the year 1929 as illustrative, freight traffic

density in Florida, expressed in terms of revenue ton-miles

per mile of road operated, was 62.8 per cent of that for the

system including Florigla, and 50.4 per cent of that for the

system excluding Florida. Using a 5- -year average, 1926

to 1930, inclusive, which included | the boom ‘period, freight

tralfie density in Florida wads 72.8 per cent of that for the

system including Florida, and 63.9 per cent of that for the

system excluding Florida. Also using the year 1929 as

[fol. 79} illustrative freight service train- miles im Florida

were 30.63 per cent of those for the system, ?

Florida, and freight service locomotive-miles in Florida

avere 30.92 per cent of ‘those for tlfe system including

Florida, while loaded frefght ecar-miles in florida were

21.25 per cent of those for the system including Florida;

loaded and empty freight car-miles in Florida were 22.43

_per cent of those for the system tincluding Florida, and

revenue ton-miles in Florida were 25.05 per cent of those’ |

for the system including Florida. In 1929 the trains oper-

ated in freight service hauled an average of 18.16 loaded

ears or 31.69 loaded and empty cars per train in Florida, -

as compared with 26.17 loadef cars or 43.28 loaded and

empty cars’ per train on the system includfhg Florida.

: ; 4

icluding.

60 an | 7

‘ 8

Ac eiaaidadinn the out-of- “pac ‘ket. expenses *in’ Flor ida,

the allocation of revenues and, expenses to Florida was”

made. by defendant on the followiiig basis: Intrastate rev-

enues were directly assigned and interstate revenues were

apportioned to That State on the basis of a mileag. pforate,

the operating expenses being allocated on the basis of .the

operating ratio applied to the revehues. As all interstate

traffic handled, in Florida originates or terminates in that

State, the apportionment of the revenues therefrom on the

basis of a straight mileage prorate, without regard to the |

origin or destination terminal services involved, tends {o

* understate the revenues from that class of ‘traffic. Fur-

ther, the Florida commission refers to the higher rates on

‘class traffic moving to and from points in Florida south

of the Jacksonville-River Junction line of the Seaboard

Air Line, than on class traffic moving to and from other

. sections of the South, which were preseribed by this Com-

° mission in Southern Class Rate Investigation, 128 I. C. C.

067, and points out -that Florida was not: given proper

-eredit on this account in apportioning the interstate rev-

[fol. 80] enues on the basis ofa mileage prorate. Defend-

ant admits that the interstate revenues .apportioned to -

Florida“were understated to some extent on account of

these things, but calls attention to the facf that the eer.

ating expenses were also understated, béCause the alloca-

tion was based upon the revenues. Defendant also refers

to the service, performed by the balance of its system in

getting coal and supplies to Florida. Coal is charged to

_ the operations in Florida at the average system cost, not-"

+. withstanding a substantial haul from the Alabama, Vir-

». ginia, or West Virginia fields to that State is involved. The

portion of the road in Florida, it is claimed, pee no

like service for other parts' of the system. : -

'-From the. foregoing it is apparent that the operating

| ‘ expenses allocated by defendanj to Florida are not actual ,

iz but constructive expenses, and that they are understated _

te an unknown extent. In view of this fact, system figures _

including: Florida, which are not in question, me e- util-

ized as the basis for approximating the cost of ‘tfansport-

+ ‘ing logs in that State. Ordinarily it would be unsound

4 to use a system unit cost to determine the cost in a par-

t _ ticular State, but since it is indisputable that unit costs.

if are higher in Florida than:elsewhere on the system, it

| . Oe ge te

;

‘

seems clear that ‘system unit costs may be used to find a

cost that may be said to be less than the cost in Florida.

Appendix:E is a computation to approximate the cost of

transporting logs on the basis of system average costs per

unit, applied to the average carload, tare weight, empty

haul, and average distance that class of traffic is hauled in

Florida. In this computation attempt has*been made to .

-meet as far.as possible the criticisms of’ the defendant’s

cost evidence. For instance, deduction from the freight

service operating expenses has been made for wharves and —

docks, maintenance and operation of floating equipment,

and certain traffic expenses, which the defendant concedes

[fol. 81] are not involved in handling logs. The deduc-

.tions for these items include their proportion of the ex-

penses for superintendence, as well as their proportion

ofthe general expeyses. The total freight service oper-

ating expenses amounted to $36,308,813 in 1929, and these

deductions aggregate $1,281,069, leaving $35, 027, 744 as the

remainder. This amount has been apportioned 70.3539 per

cent to road or haulage expenses and 29.6461 per cent to -

yard or non-haulage expenses; these percentages being

‘based upon the road’ and yard proportions of certain of

the maintenance of way and structures and transportation

expenses which are segregated in the accounts between

these services in accordance with our rules. These are fhe

proportions used by the witness for the Florida commis-

sion in his apportionment of the toperating expenses be-

tween road or haulage and yard’ ornan-haulage expenses.

Applied to the net amount of the freight Service operating '

expenses above, namely $35,027,744, these percentages re- . |

sult in road or haulage expenses of $24,643,384, and yard

or non-haulage expenses of $10,384,360. _

Giving consideration to the criticism that the traffic here

involved is carload traffic, and that deduction should be

made for the excess terminal expense attributable to hand-

ling less-than-carload freight over that attributable to car-.

load traffic, the amount of $2,555,778 has been deducted

from the non-haulage expenses, making the net amount

of the non-haulage expénses $7,828,582 applicable to car- ,

load traffic. This deduction of 42, 555, 778 for platform and

excesg clerical expenses that are inv olv ed for I. c. 1. freight,

but n8t for carload freight, is an estimate based upon 75

per: cent of the aggregate amount of the expenses for.

Account 373, Station employees, and’ Account 376, Station

supplies and expenses. As a substantial part of the ex-

penses ‘for station employees and station supplies and ex-

[fol. 82] penses is obviously aftributable to carload a

the amount that should be deducted on account of |. e. 1.

freight was therefore estimated at TD per cent of cae ex-

penses,

Dividing the total haulage expenses, $24, 643;384, by the.

total numbew of gross ton-miles, 11,600,825,000,. comprising

Moth revenue and non-revenue or company . freight, pro-

_duced an average haulage éxpense of .21243 cent per gross

‘ton;mile, revenue and non-revenue. Mt

, he statistics kept by defendant ‘made 310 segregation of

the loaded car-miles and. the gross ton-miles between rev-

enue and non-revertie freight, and the record does not

show tht 1umber, of. tons and ton-miles of non-revenue.

freight. Dut to this faet it is not practicable to segregate

the cost of transporting revenue freight on the basis of

including therein the cost of transporting non-revenue or

company freight,.so, that the costs hereinafter developed

are understated on this account.

, Based on‘total loaded car-miles (revenue and non-rév-

enue), 209,835,784, and total revenue ton-miles; 3,281,-

770,000, there was an average of 15.6397 tons of revenue’

freight carried per loaded car-mile (revenue and non-rev-

enue). Using this figure us the divisor, and the total tons

of revenue freight gaxried, 18,951,802, as the dividend,

there was isenesinnds a total of 1,211,775 loaded cars

of revenue and non-revenue freight carried. Based on

total non-haulage expenses of $7,828,582, applicable to car-

load traffic, the average non- haulage expense -was $6.46 per

loaded ear. .

In 1929, U. S. Government taxes (corporation “income)

amounted to $570,076, and other than U. S. Government

taxes (state taxes) to $5,669,924, or a total of $6,240,000

for the road as a whole. Based on these figures and total .

operating expenses of $53,431,589, freight and passenger,

[fol. 83] taxes amounted to 90. 11678 per ddlias of operatiyg

expenses. ‘

Property. investment in 1929 amounted to $306,439,250,

and 5° per cent interest theresi to $17,602,257. Based on

total ecities expenses of $53,431,589, freight and pas-

. s

tae

Ee COO

‘ -

ee -—

senger, interest on- fern amounted to $0.32977 per

dollar of operating expenses. ;

Based upon the foregoing the following is a summary of |

the computation of the cost of transporting the average car

of logs in Florida the average distance of 81.36 miles:

Operating Expenses: ae

Haulage Expenses : 4,994 gross ton- miles

x .21243 cent per gross ton-mile ....,..2$10.61 °

Non-Haulage Expenses: Average per

*loaded car ....... “aoe 5 SAP RS ea - 6.46

Total operating ne, Me nake le ae eee : $17 .Q7

Taxes:

$17.07 (Oper. Exp.) x $0. 11678 (Taxes per dollar |

of operating DE Seek re thee et naaes 1.99

Interest on Inv estment at 5°34 Per Cent:

“ 07 (Oper. Exp.) x $0. _— Cinneesit per dol.

lay oem, GH) .....<..44:..::-, ae ee 5.63

a ts Total cost We it oie es ecu : oped i $24 69

Cost per 190 I os Sie ares pirat er ere ten 4 35 cents

Averagé revenue (Cummer scale) per ear of logs .

for average haul 81.36, miles ............ .24,, 915-12

The above figures undoubtedly understate the cost of

transporting logs in Florida for several reasons. One of |

these is that costs per unit in Florida are higher than the,

average for the entire road or system including Florida.

Another reason why the computation on the basis of aver-

age costs per unit for" the system understate’ the cost of

transporting logs in Florida, is-that these average costs per

unit do not include anything for joint facility and equip-:

ment rents. As heretofore indicated the cost is also under-

stated because it does not include the cost of transporting .

non-revenne or company freight. aE,

[fol. 84] It. is of course well-known, as defendant con-

cedes, that it is impossible on a system like the defendant’s, -

engaged in the general transpdértation of all ‘kinds of

si d - °

64 oun | =

cy Ks ; é

freight and-of passengers, to determine accurately the

Dd p ‘5 ’ 3 aed

exact eost of transporting any one commodity. Frém the

‘evidence submitted in this case, however, we are convineed

that the defendant’s revenue under the Cummer seale of.

#15.12.per car for transporting a car of logs: weighing 56,

754 pounds’a distance of 81 miles, and transporting he

empty car back, is insufficient under all fhe circumstances

and conditions to cover the full cost of tlfe service.

Contiusiniadad Findings

‘In determining whether the Cummeryseale senate in

unjust discrimination against interstate commerce the fun- ’

damental question, in the language ef the Supreme Court

in Wisconsin R. R. Comm. v. C., B. & Q. R. R. Co. 257

-U. S. 563, 568, and in Florida v. U nited States, 282 U.S

194, 211, is whether the traffic movirig on that seale pays

‘i fair proportionate share’? of the cost of maintaining

defendant, or whether it causes an undue revenue burden

upon the interstate traffic of defendant.. The record shows

the low earnings of defendant; the low earnings on its

log. traffic as compared with its earnings on other low-

grade commodities; the much lower earnings on its. Flor-

ida Jog traffic than on its interstate log traffic;.and the

much lower level ofthe Cummer,scale than of other scalés

applicable interstate and intrastate throughout the South.

These facts and tlie cost: evidence clearly warr ranf’the con-

clusion that the traffie moving under, the Cummer scale

does not pay its ‘fair proportionate share’’ of operation

anid maintenance alone. (7

In condemnme the ‘previow$ order in this case the Su:

preme Court did so because the ultimate finding of unjust

discrimimation was not properly supported by appropriate

[ fol. 85] subordinate findings, that is, there were no find:

ings (1) as*to the revenue which had been derived by the

carrier from the traffic in question, (2) as te the revenues.

which ane be reasonably gxpected under the increased

rates, or (3) that the alteration’ of the intrastate rates

would produee, or was likely to produce, additional i income

necessary to prevent an tindue burden upon the earrier’s

interstate revenues and to mainéain an adequate trans-

portation service. .

While the record Show! that defendant? s Florida log

traffic declined considerably after the increase of ‘rates on

* 63°

— uary 8, 1929, the record: further shows that eile was

no substantial i increase in the movement after the Cummer

scale was restored on April 10, 1931.” The depréssed con-

dition of the lumber industry has materially affected this

log traffic since the latter part of 19380, and this depressed

condition, in our opinion; has been and will be-of far

greater importance than the level of the Florida log rates

in determining the extent of the movement in the. imme-

diate future at least.. The record shows that during the

period of approximately two years following the increase

in the rates the total movement amounted to 18,602 ‘ars.

This total included 3,740 cars transported to Eastport,

Lacoochee and Otter Creek in trainload movements that

. have ceased and will not’ be resumed. Under normal eco- «

nomic conditions it seems probable that the annual volume °

-of the Florida log movement under rates the same as those

previously prescribed wili not be less than the average of

this two-year period minus the number of cars’ included in

the -discontinued trainload movements. This average is

7,431 cars. That the movement will not be less than this

under normal conditions is confirmed by the fact during

the five months immediately preceding the last hearing in

this case, February to June, 1931, when conditions were

[ fol. 86] ‘abnormal, there were’ shipped over defendant "se

lines in Florida a total of 2,765 cars of logs.- This move-,

ment was at the rate of 6, 636 cars a year. We believe that

the movement of logs intrastate in Florida over defend-

_ ant’s lines will not be materially curtailed under the rates

which we here prescribe, whieh are the same or substan-

tially the same..as the rates generally in. effect and under

which logs freely move throughout the South. | *

The freight charges collected on the 18,602 cars above

referred to ‘aggregated $571,508.94, and if the Cummer seal?

had applied the charges woukd have been $281,225.75. The

freight charges. collected on the 3,740 cars referred to were

$100,439:06, and if .the Cummer seale had applied they

would have been $48,286.75. On the 14,862 éars’ remain-

ing after deducting the 3,740 cars from the total move-.

ment. of 18,602, the freight charges collected were $471,-

. 069.88 ($571,508.94 rs $100,439.06) and if the Cummer

' seale had been applic®ble they would have been $232,939.09 .

° 4

5—342 z

* ab

on nl, aa aR Sees IRE

. “ ‘ ae ed

($281,225.75 minus s $48,286.75 , or $238,130.88 less. than

those actually collected. Aé@cordingly, on ‘the basis of an

average of 7,431 cars a year undernormal economic condi-

tions, which basis we believe conservative, the gross: reve-

nues under ‘the rates prescribed by the preyious order:

herein would be,more than $100, 000. a year greater than

under the Cummer scale, now in effect. _ The. application

of the Cummer seale, therefore, places a " substantial bur-

den upon défendant’s interstate revenues. If the revenues

yielded by the Cummer scale are not sufficient to cover

the cost of the service, as the cost evidence indicates, it

would follow that part of the above-stated amount would

constitute a dead loss in net revenue.

We find that the cireumstanees arid conditions surround:

ing the transportation of these logs intrastate in Florida

_[fol. 87] are not on the whole as favorable as the cireum-

stances and conditions syrrounding the interstate move-

ment of logs over defendant’s lines.

We affirm the finding of division 4 that the interstate

rates previously. in force on logs over six feet in length,

except walnut, cherry and cedar, in carloads, from goints

-in northern Florida to destinations in Geaqrgia were un-

reasonahle to the extent that they exceeded those prescribed

in the report of division 4, and we find that the rates therein

prescribed, which are now in effect, are reasonable.

We further find that the intrastate rates on logs over:

six deet in length, except walnut, cherry and cedar, appli-

cable between points on the Atlantic Coast Line in Florida

for distances of 170 miles nd less are, and for the future

will be, unjustly discrimigatory against interstate com-

merce, and that such u t discrimination can be .and

should be removed by the establishment betaveen all points

on the Atlantic Coast Line in Florida -for distances.of 170

miles or les of rates not less than the rates shown for such.

distances in appendix F thereto, which are the rates found

“yeasonable for interstate application from northern Florida

to Georgia. é

In the former report hérein division 4 found that the

Cummer’ scale resulted and would result in undue-prefere

ence and advantage of shippers of intrastate traflie within

the State-of Florida and in undue prejudice to shippers of

interstate traffic. from ‘points in the State of Florida to

points in the State ef Georgia, as well as in unjust dis-

. ; ‘

* : ° ? °

' : ” i ; ;

& ’ . ae . aa ' 67

(

’

+ crimination against interstate -commerce. The evidence

introduced at the original hearing did not shpw_any actual

mavement of logs from Florida to Georgia. ~The then exist-

ing interstate rates were more than twice as high as the

Cummer scale. The evidence was conflicting as to whether

[ fol. 88] re were logs available in northern Florida that.’

- could be &onomically purchased and transported oyer de-

fendant’s lines to Georgia, but Was not convincing: that

_logs:could not or would

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