Before Schnackenberg, Circuit Judge, and Perry and Will,
The opinion of the court was delivered by: Will, District Judge.
This is an action under the provisions of 28 U.S.C.
sections 1336, 1398, 2284 and 2321-2325, and 5 U.S.C. § 1009,
to set aside, annul, and permanently enjoin a report and
order of the Interstate Commerce Commission (Commission),
dated May 10, 1965, as amended, and a report and order dated
March 13, 1967, both entered in a proceeding known as Docket
No. 34348 Board of Trade of the City of Chicago v. Illinois
Central Railroad Company, et al. The report and order of May
10, 1965 is reported at 325 I.C.C. 412, the order appearing on
pages 421-422. The report and order of March 13, 1967 is
reported at 329 I.C.C. 525, the order appearing on page 538.
At the time of the filing of the complaint before the
Commission, the railroads who were defendants in the
Commission proceeding, intervening defendants here, maintained
rates on soybeans to Chicago, when for export, from origins in
central and southern Illinois which, relative transportation
services considered, were approximately 150 per cent of the
level of the rates on soybeans to Gulf ports, when for export,
from the same origins. From some origins in Southern Illinois,
the rates to Chicago were actually higher in cents per 100
pounds than the rates to New Orleans, although the distances
to New Orleans from such origins averaged about two and
one-half times those to Chicago. The complaint of the Board of
Trade of the City of Chicago (hereinafter sometimes referred
to, with respect to the Commission proceedings, as the
"complainant"), in which the Department of the Port of the
City of Chicago intervened in support of the complainant,
alleged that the rates maintained by the railroad defendants
were unjust and unreasonable in violation of section 1(5) of
the Interstate Commerce Act (the Act),*fn1 and were unduly
prejjudicial to Chicago and unduly preferential of Gulf ports
in violation of section 3(1) of the Act.*fn2
This case arose before the Commission upon the complaint of
the Board of Trade of the City of Chicago, alleging that
export rail rates on soybeans from Illinois origins to Chicago
are unjust and unreasonable in violation of Section 1 of the
Act, and are unduly prejudicial to Chicago and unduly
preferential of Gulf ports in violation of Section 3(1).
Interested parties intervened in support of both the
complainant and the railroads, and hearings were held before
an examiner of the Commission.
In his recommended reports and order, the Commission
examiner concluded that the existing rates had not been shown
to be unjust and unreasonable, but recommended that such rates
be held to result in undue preference and prejudice, both
where the rate to Chicago was higher than that to the gulf
ports, and where it was lower.
Petitions for reconsideration were denied by Division 2,
acting as an Appellate Division, and a petition requesting
that the case be found to involve an issue of general
transportation importance was denied by the entire Commission.
However, after the initial complaint had been filed with this
Court, the Commission — with the consent of this Court — on
its own motion reopened the proceeding for reconsideration on
the existing record.
In its final decision, the entire Commission concluded that
the rates had not been shown to be unjust and unreasonable,
and that insofar as Chicago already enjoyed a rate advantage
vis-a-vis the Gulf ports, complainant had failed to show that
Chicago was under any undue prejudice. Any reduction in the
rate to Chicago would, the Commission found, result in injury
to the soybean processors located in central Illinois, putting
them at a competitive disadvantage in foreign markets. The
Commission further noted that under the rate level sought in
the complaint, "the Gulf ports would be disadvantaged," and
that this might well result in "creating a preferential
situation in treating the one of which complaint is made" (329
I.C.C. at 535).
The relevant facts are that Illinois is the largest soybean
producing state in the United States. Nearly one-fourth of the
total national production emanates from Illinois. Seventy per
cent of the Illinois production in turn is in central
Illinois. The four railroads here involved serve 599 points of
origin in central Illinois from which the average mileage to
Chicago is 172 miles and the average mileage to New Orleans is
From the southernmost point of origin in Illinois, Cairo,
the distance to Chicago is 365 miles and to New Orleans, 553
miles, the rate per hundredweight fixed by the Commission is
20.5¢ to both Chicago and New Orleans. From Marion, the
respective distances are Chicago, 327 miles, New Orleans, 591
miles, and the rate fixed is 25.5¢ to both cities. Prior to the
instant proceedings, the rate from Marion to Chicago was fixed
at 36¢, that to New Orleans was, as it remains, 25.5¢.
Centralia is 252 miles from Chicago, 666 miles from New
Orleans, and the rate to both is 28.5¢. Prior to the
Commission's action, the rate to Chicago was fixed at 32.5¢
while the New Orleans rate was then, as now, 28.5¢. Although
Centralia is 113 miles closer to Chicago than Cairo, the rate
from Centralia is 8¢ per hundred-weight higher than from Cairo.
Centralia is 75 miles closer to Chicago than Marion, yet the
rate is 3¢ per hundred-weight higher from the former. Decatur,
which is 169 miles from Chicago and 749 miles from New Orleans,
has been assigned a rate of 26.5¢ to Chicago and 38.5¢ to New
Orleans. The same rates, 26.5¢ to Chicago and 38.5¢ to New
Orleans, are provided for shipments from Champaign, 128 miles
from Chicago and 790 miles from New Orleans; Gibson City, 110
miles from Chicago and 808 miles from New Orleans, and Gilman,
81 miles from Chicago and 837 miles from New Orleans. The most
dramatic contrast in the rates is, of course, between Gilman to
Chicago, a distance of 81 miles for which the rate is 26.5¢, or
six cents more than the rate from Cairo to Chicago, a distance
of 365 miles for which the rate is 20.5¢.
In contrast, the miles and rates to Chicago from points of
origin generally north and west of those previously referred
to are as follows: Pontiac, 106 miles, 15¢; Dixon, 114 miles,
13.5¢; Rockford, 87 miles, 13.5¢; Freeport, 114 miles, 15¢.
It is apparent from the foregoing that the rates approved by
the Commission have at best a very remote relationship to
services and mileage involved. Unfortunately, the Commission
in its reports and orders, while concluding that this rate
structure was just and reasonable and did not result in any
undue prejudice or disadvantage, failed to elucidate any
philosophy or findings on which these conclusions ...