whether the present differentials should be abolished, or, if retained, modified, the Commission instituted a proceeding of inquiry and investigation in April, 1904. Nearly three thousand pages of typewritten testimony were taken and a great number and variety of exhibits were introduced in the case, which were supplemented by extended written and oral argument. In April, 1905, the Commission rendered its decision. (11 I. C. C. Rep., 13.)

Rates on freight articles from the West to Baltimore, Philadelphia, and Boston were adjusted according to the following differentials below or above the rates to New York: Domestic traffic-3 cents less to Baltimore and 2 cents less to Philadelphia; 7 cents, first class, to 2 cents, sixth class, more to Boston. Export traffic-same as domestic traffic to Baltimore and Philadelphia, except on grain and iron and steel articles, which were 13 cents less to Baltimore and 1 cent less to Philadelphia; same rates to Boston as to New York on this traffic. On ex-lake grain received at Buffalo, Fairport, and Erie there was, pending the disposition of this case, a differential in favor of Baltimore of four-tenths of a cent per bushel below the rate to New York, but no differential in favor of Philadelphia.

It was contended by New York and Boston that the differentials favoring Baltimore and Philadelphia should be abolished. Upon voluntary submission of the controversy to the Commission by all parties, domestic traffic was excluded from consideration. No opinion was expressed concerning the relative rates on import traffic for the reason that the record supplied no facts upon which to base a decision. With respect to export differentials, the Commission held that the differential per 100 pounds on flour, all-rail and lake-and-rail, should be reduced to 2 cents at Baltimore and 1 cent at Philadelphia; that the existing differential on ex-lake grain should be reduced to three-tenths of a cent per bushel and be allowed both to Baltimore and Philadelphia, and that otherwise the present export differentials should remain in force.

On June 23, 1905, the Commission filed a memorandum (11 I. C. C. Rep., 81-a), in the nature of a supplemental opinion, based upon a communication received from the Boston Chamber of Commerce, calling attention to the fact that the application of a uniform differential of three-tenths of a cent per bushel upon all kinds of ex-lake grain would result in allowing almost twice as great a differential per hundred pounds upon oats as upon wheat, and it was stated that whenever in the past differentials had been agreed upon by the carriers they had been only about one-half as much per bushel upon oats as upon wheat. The Commission referred the communication to the various parties in interest, from whom replies were received. Examination of the record failed to disclose any evidence tending to show what differential had been applied to ex-lake oats, and no

allusion to the subject was found in any of the briefs which were submitted, nor was it referred to upon the oral argument.

In this memorandum the Commission said that it intended to recommend a differential upon this ex-lake traffic of approximately onehalf a cent per 100 pounds, but as the rates were uniformly named in cents per bushel, and the differentials have usually been expressed in the same way, it was inferred that the differentials found by the Commission had better be so stated. In considering the equivalent of one-half cent per hundred pounds by the bushel, the Commission had in mind wheat and corn and overlooked the great difference in weight between those grains and oats. It was accordingly held that the differential on wheat, corn, and rye should be three-tenths of a cent per bushel, while that upon oats and barley should be one-sixth of a cent per bushel.

The Memphis case.-This was another case voluntarily submitted to the Commission by the Memphis freight bureau and the St. Louis Southwestern Railway Company, an agreement in writing for such submission having been filed. In the decision (11 I. C. C. Rep., 180), the carrier's rates on cotton from local points in Arkansas to Memphis were not required to be reduced, but it was directed that the relation of cotton rates from such points to Memphis and St. Louis be made more uniform from particular stations. The carrier's rates from local points in Arkansas to Memphis on traffic other than cotton were not disturbed, but the carrier was recommended to consider revision of its rates to Memphis on live stock and cotton seed.

The carrier's rates from Memphis to points in Arkansas, as compared with the Arkansas commission mileage rates, including those applying from Little Rock and Pine Bluff, Ark., were held to conIstitute a discrimination for which it was doubtful whether the carrier could be held responsible, and in that respect complainant's contention was not sustained; but it was found and decided that the carrier's rates from Memphis to local points in Arkansas were in many instances unreasonably high and should be reduced. The carrier was required to submit within thirty days a revised schedule and put the same in force as provided by law. The case was retained for such further order as might become necessary.

Norfolk Coal case.-A decision was announced by the Commission in October in the case of the City Gas Company of Norfolk v. Baltimore & Ohio Railroad Company (11 I. C. C. Rep., 371). The points of this decision are as follows:

A difference in charge by the defendant on coal carried from Pennsylvania mines to Baltimore for local consumption and on coal carried to its Curtis Bay or Locust Point docks in Baltimore is based upon dissimilar circumstances and conditions, and is not unlawful. Defendant carried coal to Baltimore destined finally to points

outside the capes (largely to New England seaboard points), and shipments of the same coal could also be made to Norfolk, an Atlantic seaport. The rate to Baltimore on coal reshipped to outside the capes points was forced by the competition of lines from other mines, and under such rate the defendant secured a large annual tonnage via its line to the port of Baltimore. The rate to Baltimore on coal for Norfolk was the local rate to Baltimore. If the shipments to Norfolk and points outside the capes were regarded as through shipments on what are in essence through rates, the competition stated might justify a higher rate to Baltimore when the final destination was Norfolk than when it was a point outside the capes; but if this coal were all purely local to Baltimore there was much doubt whether, as a matter of law, defendant could charge for the haul to Baltimore more in one case than in the other. Similar questions were involved in another proceeding, and decision was reserved upon that branch of this case.

Defendant also transported coal from Pennsylvania mines to Baltimore which might be carried from Baltimore by water to Norfolk and to various other points on Chesapeake Bay, termed in its tariffs as points inside the capes. The rate to Baltimore on coal reshipped by water to inside the capes points was materially less than its rate to Baltimore on coal reshipped by water to Norfolk. Defendant's service and expense to Baltimore was the same whether the coal finally went to Norfolk or to other points on Chesapeake Bay. By agreement between the carriers of coal from the various mines to Norfolk, Newport News, and other Chesapeake Bay points competition has been suppressed, and while defendant did want to carry traffic to designated inside the capes points it did not desire to participate in the coal traffic to Norfolk. It was decided by the Commission that this constituted wrongful prejudice and unjust discrimination, and that while defendant continued to give a rate less than its local to Baltimore on coal destined to inside the capes points it could not lawfully deny the same rate on coal forwarded by water from Baltimore to Norfolk. Complainant was granted reparation.

The Cannon Falls case.-The case of the Cannon Falls Farmers' Elevator Company, of Cannon Falls, Minn. (10 I. C. C. Rep., 650), arose upon complaint submitted by the railroad and warehouse commission of Minnesota against the Chicago Great Western Railway Company and the Chicago, Milwaukee & St. Paul Railway Company. In the complaint unlawful prejudice and disadvantage was alleged to result from the carriers' adjustment of rates on grain from Cannon Falls and Minneapolis to Chicago and on rye from the same points to Louisville.

It was shown that with competition for the carriage of grain to and via Duluth and other northern lake ports rates of 10 cents on wheat

and 7 cents on other grain from Minneapolis to Chicago were as high as could be obtained by the all-rail lines between those points, and competition by lines other than the defendants' from Minneapolis to East St. Louis had fixed the rates by all lines at 10 cents per 100 pounds, and this also controlled the rate to Louisville; that the rates from Cannon Falls, a point in Minnesota, 48 miles from Minneapolis, to Chicago, East St. Louis, and Louisville were also competitive rates, and in its competition with Minneapolis Cannon Falls was entitled to as low rates to common points as the difference in conditions would permit; that in view, however, of the desirability of keeping open the Minneapolis market to Cannon Falls grain, the short distance between those points, and the low rate from Minneapolis, forced by competition, it was apparently not unjust that the grain rate from Cannon Falls should be as high as the local rate to Minneapolis plus a 7-cent rate therefrom to Chicago, provided the Cannon Falls dealer was not thereby subjected to disadvantage as compared with the Minneapolis grain dealer.

Under the rate condition shown to exist it was held by the Commission that the Cannon Falls shipper was subjected to disadvantage as follows:

First. The combination of rates on rye and other coarse grain from Cannon Falls to Minneapolis and Minneapolis to Chicago was one-half cent less than the straight rate from Cannon Falls to Chicago, and this was without justification.

Second. The favorable location of Cannon Falls with reference to Minneapolis and Duluth, and the competitive advantage to which the Cannon Falls dealer is entitled by reason of the route via Duluth, was neutralized to an extent by the manipulation of billing at Minneapolis, whereby Cannon Falls grain sold in Minneapolis could be reconsigned to Duluth under a substituted billing and the balance of a through rate, resulting in a less total charge from Cannon Falls to Duluth than the charge on a through shipment from Cannon Falls to Duluth.

Third. The rate on rye, barley, and other coarse grain from Cannon Falls to Louisville or East St. Louis was wrongfully higher than the rate on wheat between the same points.

Another point decided in this case was that a ruling that an antecedent haul to one locality and no previous transportation to a competing locality constitute justification for a lower charge from the former to a common market would be in effect to approve the equalization of natural advantages and disadvantages as between localities, and such equalization is not sanctioned by the act to regulate com

merce.

Wichita Sugar case.-A decision was rendered during the year in the case of the Lehman-Higginson Grocer Company et al. v. Atchi

son, Topeka & Santa Fe Railway Company et al. (10 I. C. C. Rep., 460), involving the rates on sugar from New Orleans to Wichita and Kansas City. Complainants alleged that defendants, having in effect on sugar in carloads from New Orleans rates per hundred pounds which were 25 cents to Wichita and 20 cents to Kansas City and other Missouri River points, increased those rates to 47 cents to Wichita and 32 cents to Missouri River points, thereby increasing the differential as between Wichita and Kansas City from 5 cents to 15 cents per hundred pounds, and that the new rates were, as against Wichita, unjust and unreasonable in themselves and relatively; and it was further alleged that new advanced rates from other points of origin imposed the same differential as between Wichita and Kansas City, and that, as against Wichita, those rates were also unlawful. Wichita and Kansas City compete for the sale of sugar in common competitive territory. The competitive conditions applying in the transportation of this traffic to Wichita and Kansas City were stated and found not to justify the 15-cent differential against Wichita, and it was found that the existing rates to Wichita were excessive.

It was decided that the rate of 47 cents on sugar from New Orleans to Wichita was unreasonable; that the differential of 15 cents applied at Wichita above Kansas City on shipments of sugar from the Atlantic seaboard and New Orleans subjected Wichita to undue discrimination, and such differential should not be more than 8 cents per hundred pounds, and that as to traffic passing through Wichita to Kansas City the rule laid down in Johnston-Larimer D. Co. v. A., T. & S. F. Ry. Co. (6 I. C. C. Rep., 586), forbidding any higher charge to Wichita than to Kansas City on shipments from Galveston was, in the light of decisions of the United States Supreme Court, no longer applicable, and defendants operating lines through Wichita to Kansas City were not prohibited from charging a higher rate on sugar to Wichita than to Kansas City so long as the Wichita rate was reasonable.

New York & Long Branch Railroad Lumber case.-In January last the case of Mershon, Schuette, Parker & Co. against the Central Railroad Company of New Jersey and the Pennsylvania Railroad Company, operating the New York & Long Branch Railroad, was decided (10 I. C. C. Rep., 456). Defendants' rates for transporting lumber in carloads to points on the New York & Long Branch Railroad were made by adding to the rate to New York, N. Y., an arbitrary charge of 5 cents per 100 pounds when the shipping point was Saginaw, Mich., but only 2 cents per 100 pounds when the shipping point was Buffalo, N. Y. Water competition between Buffalo and New York affected the rates to New York, but it justified no wider difference in the rates from Saginaw and Buffalo to these interior destinations