Opinion
No. 23721
Decided December 14, 1932.
Public Utilities Commission — Railroads — Freight rates — Carrier's shipment expense item considered, and not complainant's profit — Reasonable rate not reduced, because carrier voluntarily established depressed rate — Reasonable rate not reduced to meet commercial trucking competition.
1. In determining the correctness of a freight rate established by a railroad company, covering shipments from certain loading points to destination, items of expense to the carrier incident to the shipment are the determining factors, and not the amount of profit arising in the business of the complainants.
2. Where a carrier, in order to meet competition, voluntarily establishes a depressed rate between a certain loading district and a given point, such depressed rate will not of itself compel the Public Utilities Commission to lower a higher reasonable rate from the same loading district to other destinations of approximately the same distance from such loading district.
3. Where a carrier has no control over motor truck charges, the Public Utilities Commission is not authorized to compel such carrier to reduce a reasonable rate in order to enable shippers to meet commercial trucking competition.
ERROR to the Public Utilities Commission.
This case arises as an error proceeding to an order of the Public Utilities Commission, entered in a proceeding in which Shaw-Fahrer Grain Company, a partnership, of Rushville, Ohio, Pleasantville Mill Company, a partnership, of Pleasantville, Ohio, E.R. Daubenmire, of Pleasantville, Ohio, N.H. Miller Sons Company, a partnership, of Pleasantville, Ohio, Thurston Elevator Company, a partnership, of Thurston, Ohio, J.R. Johnson, of Baltimore, Ohio, Keiser Bros., a partnership, of Baltimore, Ohio, village of Baltimore, Basil Elevator, a partnership, of Basil, Ohio, and Berry Son, a partnership, of New Salem, Ohio, were complainants, and the New York Central Railroad Company was defendant. Berry Son afterwards withdrew as a complainant, and that partnership is not involved in the present error proceeding.
The Chesapeake Ohio Railway Company, the Baltimore Ohio Railroad Company, and the Pennsylvania Railroad Company later intervened, and were made parties defendant by the commission.
The complainants prayed for an order requiring the defendant, the New York Central Railroad Company, to reduce the rate per ton on coal from the Hocking and Crooksville district No. 2 to the points at which complainants were located from 90 cents per ton to 76 cents per ton.
Complainants, except the village of Baltimore, are coal dealers at the various points on the New York Central Railroad indicated by their addresses, and claim that in carrying on their business of furnishing coal they are at a disadvantage because the 90-cent rate per ton from the Hocking and Crooksville district No. 2 exceeds the rate in effect from the same points on the line of the New York Central Railroad to other points of equal and greater distance on that line, namely, to Philo, Ohio, and also exceeds the rate to Lancaster, Ohio, from the Hocking and Athens county coal fields on the line of the Chesapeake Ohio Railroad.
The Public Utilities Commission dismissed the complaint and denied the application for rehearing.
Mr. J.W. Deffenbaugh, for plaintiffs in error.
Mr. Gilbert Bettman, attorney general, and Mr. Thomas J. Herbert, for defendant in error.
The question of the reasonableness of the 90-cent rate to Baltimore, which is the next to farthest station upon the New York Central line herein considered, has already been adjudicated by this court in the case of New York Central Rd. Co. v. Public Utilities Commission, 116 Ohio St. 120, 155 N.E. 862. In that case it was determined that the 90-cent rate to Baltimore was reasonable. The 76-cent rate was held not to be reasonable. Since the rate is a group rate, and Baltimore, Basil, Thurston, Rushville and Pleasantville fall within the group, that holding as to Baltimore applies if conditions have not changed. In that case the Fairfield Paper Company, which consumes more than nine-tenths of all the coal transported into Baltimore, was a complainant, but in this case it does not attack the 90-cent rate.
Section 535, General Code, provides:
"If, upon an investigation under the provisions of this chapter, the commission finds that any existing rate or rates, fares, charges or classification, any joint rate or rates, or any regulation or practice affecting the transportation of persons or property, or service in connection therewith, are unreasonable or unjustly discriminatory, or that any service is inadequate, it shall determine and by order fix a reasonable rate, fare, charge, classification, joint rate, regulation, practice or service to be imposed, observed and followed in the future, in place of that so found to be unreasonable, unjustly discriminatory, or inadequate, as the case may be. A certified copy of each such order shall be delivered to an officer or station agent of the railroad affected thereby, and such order shall of its own force take effect and become operative thirty days after service thereof."
Hence under the continuing power of the Public Utilities Commission, the present rate between the points in question and the Hocking and Crooksville district No. 2 should be changed if the record demands such change. However, a careful consideration of the record shows that the order of the Public Utilities Commission is not unlawful or unreasonable. The 76-cent rate from the same loading district on the New York Central Railroad to Philo is a depressed rate allowed for the express purpose of permitting the movement of slack coal to the Ohio Power Company at Philo, in competition with barge freight movement on the Muskingum river. Hence the rate to Philo cannot be used as a yardstick by which to judge the reasonableness of the rate involved in this application. The rate to Lancaster, Ohio, from the Hocking and Athens county coal fields is not a rate upon the line of the New York Central Railroad, but upon the line of the Chesapeake Ohio Railroad.
The motortruck competition complained of between the Lancaster dealers and the complainants is not caused by the rate of the New York Central Railroad to the points in question, and hence the holding of the commission that the New York Central Railroad is not responsible for the situation prevailing at Lancaster is borne out by the record.
Since the rate to Philo is a depressed rate, if a change is made, the Philo rate should be increased to 90 cents. However, if the rate to Philo were increased to 90 cents, no benefit would inure to these complainants. If the rate attacked were reduced to 76 cents because of motortruck competition between Lancaster and these complainants, the New York Central Railroad would be penalized for a condition which it has in no way created.
As stated in the case of New York Central Rd. Co. v. Public Utilities Commission, supra, "a freight rate that does not embrace a reasonable profit over and above actual cost and expense to the carrier is not a reasonable rate."
The order of the Public Utilities Commission will be affirmed.
Order affirmed.
JONES, MATTHIAS, DAY, KINKADE and STEPHENSON, JJ., concur.
MARSHALL, C.J., not participating.