We are the more ready to accept this conclusion because it does not appear that the changes in freight rates proposed are particularly well considered. All the "Sound Lines" operated by the New England Steamship Company enjoy joint rates with the railroad company. There may be a good reason why the through rate should be made by combining the local rates in the case of the New Bedford, Martha's Vineyard and Nantucket Steamboat Company, and not in the case of the New England Steamship Company, but if there be such a reason the Commission has not been given the benefit of it.

Criticism may also be made of the local port to port class rates. In New England, coastwise steamship freight rates are quite generally made on the same basis as railroad freight rates. Railroads throughout the country have frequently made rates to meet water competition, but here the reverse seems to be true, and the water rates are made to conform to the general railroad level. Coastwise transportation is largely in the hands of two companies, the New England Steamship Company and the Eastern Steamship Corporation. The former is in the control of the New Haven railroad, but the latter is now apparently independent, although the railroad has had a substantial voice in its affairs in the past. Both companies, however, have adopted substantially the same rate structure as the New England railroads.

Under these circumstances, it is somewhat difficult to determine the basis upon which steamship rates should normally be constructed. The present class rates of the New Bedford, Martha's Vineyard and Nantucket Steamboat Company are, on the whole, higher than the existing class rates of the railroad companies and the two large steamship companies above mentioned, as the following table shows:

While a substantial increase in the class rates of the railroad companies has recently been approved by the Interstate Commerce Commission and similar applications are pending before the various state commissions, it does not appear that the other steamship companies have as yet sought a corresponding increase. The proposed rates for the Steamboat Company contrast with the new railroad rates approved by the Interstate Commerce Commission as follows:

It further appears that while the New Bedford, Martha's Vineyard and Nantucket Steamboat Company has adopted the railroad official classification of commodities and bases its class rates upon this classification, the percentage relationship between the classes differs in the case of the present Group A and Group B rates, differs still more in the case of the proposed rates, and does not, in any instance, conform to the relationship now in effect upon the New England railroads and the larger steamship lines, nor to the relationship prescribed by the Interstate Commerce Commission in approving a scale of class rates for Central Freight Association territory and followed in its recent decision. upon New England rates. This is shown by the following table: —

There is no inherent reason why a steamship company should charge the same rate as a railroad, but if it bases its rate structure upon the official railroad classification of commodities there would seem to be sound reason for scaling its class rates in accordance with recognized railroad practice, and certainly it is indefensible to scale Woods Hole-Oak Bluffs rates in one way and Woods Hole-Nantucket rates in another.

Summing the matter up, it seems to the Commission that the evidence submitted leaves in doubt the necessity for increasing the freight rates of this steamboat company. The company has been so fortunate in recent years in earnings over and above a generous return upon the investment, accumulating a surplus which is in excess of its entire capitalization, that no hardship is imposed by compelling it to demonstrate more clearly in actual experience that an advance is just and reasonable. We realize, however, that conditions are abnormal, and that experience in 1918 may well furnish the necessary evidence, and possibly it is already at hand. If this be the case, the company is at entire liberty to renew its application at any time without prejudice, and to show by further evidence that increases are justifiable. If this is done, however, it is the present opinion of the Commission that joint rates should be maintained between the islands and points on the New York, New Haven and Hartford railroad in Massachusetts and that there is no good reason for basing the through rates in such cases upon a combination of the locals. Furthermore, any new port to port class rates which are proposed should be constructed upon a more systematic and less arbitrary basis than those which are set forth in the tariffs under suspension.

ORDER.

Notice of proposed change in local freight rates of the New Bedford, Martha's Vineyard and Nantucket Steamboat Company. Notice of proposed change in joint freight rates of the New Bedford, Martha's Vineyard and Nantucket Steamboat Company and the New York, New Haven and Hartford Railroad Company. It appearing that the Commission, by an order dated June 29, 1917, entered upon an investigation in the matter of the proposed change in local class and commodity freight rates of the New Bedford, Martha's Vineyard and Nantucket Steamboat Company, as set forth in a tariff numbered New Bedford, Martha's Vineyard and Nantucket Steamboat Company M. P. S. C. No. 22, issued May 15, 1917, to become effective July 1, 1917;

and in the matter of the proposed change in joint class and commodity freight rates between certain points on the New York, New Haven and Hartford railroad and boat landings of the New Bedford, Martha's Vineyard and Nantucket Steamboat Company, as set forth in a tariff numbered Supplement No. 1 to New York, New Haven and Hartford Railroad Company M. P. S. C. No. 522, and Supplement No. 1 to New Bedford, Martha's Vineyard and Nantucket Steamboat Company M. P. S. C. No. 18, issued May 15, 1917, to become effective July 1, 1917; and that the tariffs so described were suspended by orders of the Commission until May 1, 1918, and

It further appearing that a full investigation of the matters and things involved has been had and that the Commission on the date hereof has made and filed a report containing its findings of fact and conclusions thereon, which said report is hereby referred to and made a part hereof, it is

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Ordered, That the New Bedford, Martha's Vineyard and Nantucket Steamboat Company and the New York, New Haven and Hartford Railroad Company be hereby notified and required to cancel on or before May 1, 1918, the above described tariffs. And it is

Further ordered, That a copy of this order be filed with said tariffs at the office of the Commission and that a copy hereof be forthwith served upon the New Bedford, Martha's Vineyard and Nantucket Steamboat Company and the New York, New Haven and Hartford Railroad Company.

By the Commission,

ANDREW A. HIGHLANDS,

APRIL 30, 1918.

[P. S. C. 1808, 1809]

Secretary.

NEW BEDFORD AND ONSET RATES.

Notice of the New Bedford and Onset Street Railway Company of proposed increase in rate of fare for passengers upon its railway.

ELTON S. WILDE
GEORGE P. DOLE

GEORGE B. CRAPO

for New Bedford and Onset Street Railway Company.

WILLIAM H. COBB
CHARLES W. RIPLEY

for Town of Marion.

On May 29, 1918, the New Bedford and Onset Street Railway Company filed with the Commission a schedule of proposed increases of fares effective June 30, 1918. A public hearing was held on July 10, 1918, and the schedule was suspended until August 10, 1918.

The cash fare on all lines of the company was formerly 5 cents, with a ticket rate of 4 cents (24 tickets for a dollar). In 1915 the company filed a new schedule increasing the cash fare to 6 cents and the ticket rate to 5 cents (20 tickets for a dollar). In its report and order in that case, under date of September 8, 1915, the Commission, after a review of the financial and operating history of the company, found that the company was entitled to a return upon the investment represented by the outstanding stock and bonds; that the maintenance charges were not excessive; that inadequate provision had been made for depreciation; and that there was no reasonable prospect of an increase in net earnings through a reduction in operating expenses, except in so far as the power cost might be reduced under a contract for the purchase of power which the company had recently entered into (3 P. S. C. Rep., p. 89). At that time the company's net income, as shown in its return for the year ended June 30, 1915, was $8,353.95, or nearly $25,000 less than the amount necessary to pay a 6 per cent dividend on its capital stock. Upon these facts the Commission permitted the schedule filed by the company to become effective and the new rates went into operation on October 2, 1915. As the revenue results under these increased rates proved disappointing, the company, in 1917, filed a new schedule, leaving the cash fare at 6 cents but eliminating the re