MILTON L. MYERS, SURVIVOR OF HOSTETTER & COMPANY, 2. THE PENNSYLVANIA COMPANY, OPERATING THE PITTSBURGH, FORT WAYNE & CHICAGO RAILWAY; THE BALTIMORE & OHIO RAILROAD COMPANY; THE LAKE SHORE & MICHIGAN SOUTHERN RAILWAY COMPANY; THE PITTSBURGH & LAKE ERIE RAILROAD COMPANY; THE NEW YORK CENTRAL & HUDSON RIVER RAILROAD COMPANY; THE ALLEGHENY VALLEY RAILROAD COMPANY; AND THE PENNSYLVANIA RAILROAD COMPANY.

Hearing at Washington, January 10, 1889, on Depositions and Oral Testimony. -Decision, February 23, 1889.

Hostetter's Stomach Bitters, prior to the Act to regulate commerce, were shipped under the Middle and Western States Classification in the third class in less than car loads, and in the fourth class in car loads. Bitters generally in that classification were classed in first class in less than car loads, but were also put in the third class, with the specification Manufacturer's Account, released by shipper," under which these bitters were shipped. No other article, except wine, was so classified and shipped.

After the Act to regulate commerce, the Official Trunk Line Classification superseded the former classification, and Bitters were classified in first class, with other liquids similar in character, marketable value and manner of shipment. The class rates under the Official Classification are lower than under the one previously used.

In October, 1888, by a change in the Official Classification, Bitters in car loads were placed in third class.

On complaint for unjust and unreasonable rates, Held, that a former special and preferred rate is not a fair test of the reasonableness of a present rate. The proper classification of an article is to be judged relatively by the classification of other articles similar in character, quality, and conditions of transportation.

The rate on Bitters as at present classified, compared with analogous articles, is not so unreasonable as to demand a change of the classification of that particular article. The propriety and extent of a change can more appropriately be acted upon in connection with other articles, in a general revision of the classification.

A. H. Clarke and James Watson, for Petitioners.
Hugh L. Bond, Jr., for B. & O. R. R. Co.

J. H. Reed, for P. & L. E. R. R. Co.

J. T. Brooks, for Penn. Co., Penn. R. R. Co., and N. Y. C. & H. R. R. R. Co.

REPORT AND OPINION OF THE COMMISSION.

SCHOONMAKER, Commissioner:

The complaint charges unreasonable and unjust transportation rates upon property shipped over the lines of the defendants from Pittsburgh, Pennsylvania, to different places in the United States. It sets forth that the petitioners are engaged in the manufacture and sale of a proprietary medicine known as Hostetter's Stomach Bitters, and that they and their predecessors have carried on the business at Pittsburgh for thirty years. It also states that prior to April 5, 1887, in the classification then used, the bitters were rated fourth class in car loads and third class in less than car loads, but that by the classification in force since April 5, 1887, they were placed in first class both in car loads and less than car loads, and that by such classification the rates have been advanced to an unfair and unreasonable extent. Illustrations are given of the advances: for example, to Chicago, from 25 cents per hundred to 42 cents; to St. Louis, from 38 cents to 584 cents; to San Francisco, from 83 cents to $1.60; to New Orleans, from 60 cents to $1.05.

The advances in rates are alleged to be excessive, unjust and unreasonable, and to be in contravention of the first, second and third sections of the Act to regulate commerce.

The answers of the several defendants set forth matters intended to justify the classification and rates complained of.

The material facts are as follows: The shipments of the stomach bitters by petitioners aggregate annually from seventy-five to eighty-five thousand boxes. The boxes are of uniform size and weight, and contain twelve bottles of bitters securely packed, each bottle containing a pint and a half. A box of the bitters weighs about thirty-five pounds, A car load consists of about seven hundred boxes, weighing twenty-four thousand five hundred pounds. When shipped in less than car loads they are sent in lots of fifty boxes or over. The bitters are compounded of about eighty per cent. of cologne spirits or high wines, reduced with water and with ingredients of roots, Peruvian bark, etc., for which the formula is a secret.

The cost of a box of bitters, including the manufacture, advertising and all the incidents of the business, is about six dollars or less, and it is sold to dealers at seven dollars and a half a box, transportation charges paid. The retail price is one dollar a bottle.

The business is prosperous, increasing yearly, and large profits are realized.

Prior to April 5, 1887, railroads in the territory in question worked under three different classifications. known as a local classification that governed the traffic between local stations; another as the Middle and Western States Classification, under which the bitters of Hostetter & Company were shipped; the third was a through classification that governed business from Chicago to the seaboard. In the classification that covered the bitters of Hostetter & Company they were shipped in the third class in less than car loads, and in the fourth class in car loads, and under written agreements between the shippers and the different roads, renewed annually, the goods were carried entirely at the owners' risk, the companies being released from claims for damages from the casualties of carriage and from shortage and pilfering.

When the Act to regulate commerce was passed the carriers found that uniform classification was necessary both for through and local business. The Official Trunk Line Classification, prepared for the new conditions under the Act, with a less number of classes and applying to both east and westbound carriage, was accepted by all the roads that are parties to this proceeding, and superseded the former classifications, with their more numerous classes, that had been used. The goods of petitioners have since been carried under the Official Classification wherever that governed. Under this classification the bitters were placed in the first class, both in car loads and less than car loads, and if taken at carrier's risk in less than car loads, in double first class. This change in classification increased the rates, particularly on western and southwestern shipments.

Changes have been made in the Official Classification from time to time, and by changes that took effect October

18, 1888, the stomach bitters were placed in third class in car loads and first class in less than car loads. A material reduction in car load rates followed this change of classification. The rates under the Official Classification are lower than they were on like numbered classes in other classifications before the Act to regulate commerce. The first-class rates to certain points are now lower than the second-class rates before that Act. At some terminal points the charges are higher. As illustrations, the rate to Buffalo, which was 23 cents per hundred pounds before the Act in less than car loads, is now 30 cents-an increase of seven cents produced by the necessity of conformity to the fourth section; while to all points east of Buffalo, including Boston, all Boston points and New York and Philadelphia, the rate is considerably lower. The rate to Boston prior to April, 1887, was 70 cents per hundred on less than fifty boxes, 61 cents on fifty case lots or more, less than car loads. The less than car-load rate now is 51 cents per hundred. To New York the rate was 51 cents per hundred on fifty-case lots; now 41 cents.

The car-load rates to Buffalo now are 20 cents per hundred; to New York 30 cents per hundred, being five cents less than before the law. To Boston the rate was 40 cents in car loads, now 33 cents. The rates on third class under the Official Classification, in which bitters in car loads are placed, are three cents per hundred lower than before the Act. Since October 18, 1888, when a change was made in the Official Classification and car-load rates made for bitters, the rates from Pittsburgh to the principal points of shipment have been as follows:

Shipments to Dallas, Texas, and other common points in Texas prior to October 15, 1888, were governed by the Joint Texas Classification, which classed bitters in glass, owner's risk of breakage, less than car loads, first class, $1.50; car loads, fourth class, 93 cents. On October 15, 1888, the Western Classification as adjusted to Texas traffic was adopted, which classes bitters in glass or wood, owner's risk, first class for any quantity, rate $1.50 per hundred pounds. January 20, 1889, the first class rate was advanced to $1.63 per hundred pounds for any quantity. These rates are not controlled by the Official Classification.

The car-load shipments heretofore have been made to only a few points-San Francisco, California; Portland, Oregon; and Galveston, Texas; less than car-load shipments to the principal cities at the West and Southwest.

Before the Act bitters generally were in first class, but had also another classification in the third class, specified as follows: "Manufacturer's account released by shipper," under which these bitters were carried at the lower rates of that class. Since the law they have been classed with other analogous articles and take like rates. Some of these, contained in glass, boxed, are: Acids, apple and fruit butter, jelly, or sauce; shoe blacking; bromine; catsup; chow-chow; cider; coffee, condensed; disinfecting liquids; drugs and medicines; glycerine; honey; ink; liquors or liquids, wines; milk food; mustard; oils; paints; pickles; prunes; snuffs; stereotype plates, boxed; syrups; and many others. The bitters are regarded by the railroads as desirable freight, and are conveniently handled, but their transportation is attended with some risks from pilferers, who open the boxes and remove bottles.

The statement of facts discloses the case so fully and points so clearly to the conclusion necessary that little need be added by way of discussion. It is manifest from all the testimony that the manufacturers of the stomach bitters prior to the Act to regulate commerce were accorded exceptional transportation advantages. The favorable rates had little, if any, relation to the marketable value of the property, or to the charges for carrying analogous articles. They were part.