than that for all-rail service. On the basis of cost evidence before it and other facts of record, the Commission concluded that the prescription of joint rail-water-rail rates differentially lower than the all-rail rates was not justified. However, the Commission did grant relief under section 6(11)(b) of the Act, 49 U.S.C.A. § Y(11)(b). The through all-rail rates having been reduced by 30 per cent on October 23, 1959, without any reduction being made in the local rail rates to and from the Seatrain ports, the Commission, at page 243, found that:
'The failure to provide rates lower than the local rates from St. Marys to Savannah and from Edgewater to these destinations when the through rail rates were reduced by 30 percent, unlawfully discriminates against the rail-water-rail routes and is contrary to the provision against unfair or destructive competitive practices in the national transportation policy. Considering the extensive port-to-port water haul, rates lower than the local rates on rail traffic terminating at the ports are warranted. Under section 6(11)(b) of the act, we are empowered to require the establishment of proportional rates by rail to and from the ports to which traffic is brought, or from which it is taken by the water carrier. We find that the defendants should establish proportional rates, minimum 80,000 pounds, of 17.5 cents on pulpboard from St. Marys to Savannah for delivery to Seatrain, and 11 cents on pulpboard from Edgewater to the destinations named in the complaint on traffic received from Seatrain at that port which represents a rate reduction of approximately 30 percent, and that failure to establish such rates will be unjust and unreasonable under section 1 and discriminatory under section 3(4) of the act.'
The Commission maintains in this case that it was not necessary to make a section 3(4) finding in Bush Terminal, and that its action 'in requiring the establishment of proportional rates to and from the ports involved should have been based solely upon the finding that the reduction in the all-rail rates without a corresponding reduction in the local rates to and from the ports was an unfair and destructive competitive practice within the meaning of the national transportation policy.' The Commission then concludes that 'there is no basis for finding here that the proposed all-rail rates constitute an unfair or destructive competitive practice.'
Seatrain does not quarrel with the Commission's finding that the all-rail rate, because it exceeds fully distributed costs, does not constitute destructive competition. Interstate Commerce Commission v. New York, New Haven & Hartford Railroad Co., 372 U.S. 744, 83 S. Ct. 1038, 10 L. Ed. 2d 108 (1963). Seatrain's complaint in this case is directed to the Commission's finding of no discrimination under section 3(4) of the Act. In Bush Terminal, as noted earlier, the record indicated that the cost of rail-water-rail service was higher than all-rail service. Here the reverse is true. Seatrain was found to be the low-cost mode of transportation, and the rail-water-rail route the low-cost route. Here, as in Bush Terminal, both the all-rail and rail-water-rail rates were before the Commission for consideration on a relative basis. We have already mentioned the relief granted in Bush Terminal. And yet in the case at bar Seatrain, with a better showing, on a cost basis, than existed in Bush Terminal, is denied relief.
In our opinion, the disparities established by Seatrain in this case with respect to rates, costs, and divisions of revenue, are of sufficient magnitude to make out a prima facie case of discrimination. The Commission's overall conclusion based, as we have seen, on lack of identification of the discriminating railroads and dissimilarity of transportation conditions, is not adequately supported by the evidence of record. A prima facie case having been made out by Seatrain, it was incumbent upon the railroads to show such a dissimilarity of transportation conditions as would warrant the rate treatment accorded them in this case. This they failed to do.
We might also mention in passing a matter called to our attention at oral argument, although no reference thereto is made in the record or in the argument before the Commission. Paragraph 7 of Seatrain's amended complaint, after reciting that the rail rate from Sandow to Texas City 'was and continues to be 44 cents per hundred pounds', alleged that 'a rate of 29 cents per hundred pounds (actually published as $ 5.80 per short ton) is available for movement to Texas City when the aluminum articles are exported to a foreign country by water.' The Commission's answer 'neither admits nor denies, for lack of information' the allegations respecting the 29 cent rate. Counsel for the Commission professed to have no knowledge of this export rate, but counsel for Seatrain argued that the 29 cent rate was published in a tariff on file with the Commission, and that the Commission is required to take official notice of the tariffs on file. We have not considered this 29 cent rate in reaching our decision in this case. It may be that special tariffs cover exports to a foreign country and that the 29 cent export rate has no relevancy to the section 3(4) issue.
We appreciate that it is not for us to prescribe the manner in which the discrimination we have found to exist in this case should be eliminated. In Bush Terminal proportional rates were prescribed under section 6(11)(b) of the Act. Whether that should be done in in this case or whether some other form of relief should be granted, we leave to the expertise of the Commission.
The order of the Commission on the section 3(4) issue of discrimination is set aside, and the matter is remanded to the Commission for further proceedings consistent with this opinion.
Counsel for plaintiff Seatrain Lines, Inc. shall submit, on notice to counsel for all other parties, an appropriate order.
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