Group C-1 (section 2) rates there is no basis for a finding that such rates were intended to be the lawful rates.

Protestants assert that the Commission's consideration is not limited to views brought into issue by the litigants, and that all pertinent provisions of item 685 must be examined in determining the rates intended. Since the initial decisions specifically aligned the proper rate level for disposable bedding pads with "adult diapers" (No. 36306) and "disposable diapers" (No. 36274), those descriptions provide a guide to the intended rate level. Item 685 includes the following pertinent descriptions:

1. Diaper Liners, single ply paper, flat or folded flat.

2. Diapers, sanitary, backed or not backed with plastic sheeting.
3. Sanitary Pads (sanitary diapers, napkins, and tampons).
4. Diapers or Diaper Liners.

Of the foregoing descriptions "Diapers, sanitary, backed or not backed with plastic sheeting", published in section 2, most specifically takes in the descriptions used by the Administrative Law Judges ("adult diaper" or "disposable diaper"). Hence, the bedding pad description should be inserted in section 2 rather than in section 3, reason protestants.

Protestants also rely on additional evidence filed in the reopened proceedings (docket Nos. 36274 and 36306) in support of their contention that the present tariff schedule is unlawful. They further rely on docket No. 36292, The Proctor & Gamble Company v. The Lehigh Valley Railroad Company, Robert C. Haldeman, Trustee (unreported), in support of their contention that the proper place for insertion of the disposable-bedding-pad description is at section 2 of item 685 series.

Respondents reply that findings must be based on evidence of record and since there was no evidence relative to column C-1 (section 2) rates, it is obvious that the Administrative Law Judges could have only intended the column D (section 3) rates be published.

DISCUSSION AND CONCLUSIONS

This proceeding was instituted to determine the lawfulness of schedules that were published in purported compliance with outstanding orders in docket Nos. 36274 and 36306. The record contains no new evidence. Therefore, in order to determine the

lawfulness of the schedules we need only determine whether they comply with the outstanding orders.

At the time the schedules were published the outstanding orders were vague as to the particular group of commodities with which just and reasonable rates on disposable bedding pads should be aligned. However, by report and order dated September 19, 1977, we clarified the outstanding orders in docket Nos. 36274 and 36306 by specifically finding that the just and reasonable rate for adult diapers/disposable bedding pads is the rate for the commodities listed in section 2 of item 685 Trunk Line-Central Territory Railroads Tariff 703-B, I.C.C. C-366 "Diapers, sanitary, backed or not backed with plastic sheeting." Since the contested rates are higher than those applicable on commodities listed in section 2 they fail to comply with the outstanding orders in docket Nos. 36274 and 36306. Therefore, it is unnecessary to give further consideration to their lawfulness.

We find that the rates at issue have not been shown to be just and reasonable.

It is ordered; The schedules described in the instituting order of April 6, 1977 shall be canceled on or before 35 days from the date of service of this report and order upon not less than 1 day's notice to this Commission and to the general public by filing and posting in the manner prescribed by the Commission under section 6 of the Interstate Commerce Act. This proceeding is discontinued.

355 I.C.C.

Conclusion

7. Notice of publication and cancellation

8. Miscellaneous issues related to the proposed rules --9. Additional goals

10. Inhibitions on prior use of demand-sensitive rates

Conclusion

11. Consideration of justification factors

Conclusion

12. Seasonal volume requirements

Conclusion

13. "Regional" rates

Conclusion

14. Applicability on section 207

Conclusion

15. Miscellaneous comments

Summary

545

547

550

551

552

552

553

554

555

556

556

556

557

558

559

559

561

Appendix C: Summaries of participants' initial and reply statements-

575

Appendix D: Rules as adopted ·

594

355 I.C.C.

EX PARTE NO. 324

STANDARDS AND EXPEDITIOUS PROCEDURES FOR ESTABLISHING RAILROAD RATES BASED ON SEASONAL, REGIONAL, OR PEAK-PERIOD DEMAND FOR RAIL SERVICE

Decided January 28, 1977

Upon investigation, proposed standards and expeditious procedures for establishing railroad rates based on seasonal, regional, or peak-period demand for rail services amended in part and adopted as part 1109.10 of Title 49 of the Code of Federal Regulations. Proceeding left open to facilitate further refinement and modification of adopted standards and expeditious procedures in the light of actual experience.

Curtis H. Berg, Harry J. Breithaupt, Jr., Charles W. Burkett, Harry DeLung, Joseph D. Feeney, William P. Higgins, Richard J. Murphy, C. Harold Peterson, Albert B. Russ, Jr., C. Barry Schaefer, and Donal L. Turkal for respondents.

William R. Allen, Jr., Meldon B. Anderson, C. W. Bath, Don A. Boyd, Cecil L. Brennan, Robert L. Calhoun, John W. Christie, John M. Cleary, C. O. Collyer, John F. Donelan, Thomas D. Donis, Kenneth R. Drottar, Ernest Falk, John S. Fessenden, Sam H. Flint, Donald A. Frederick, W. F. Geach, Donald E. Graham, Robert L. Graves, Gene C. Griffin, Jeffrey Lee Guttero, William Harding, Louis B. Hartlage, W. H. Hollan, James J. Irlandi, William J. Keating, James S. Krzyminski, Robert L. Lighthall, W. R. Loney, C. R. Looney, Dickson R. Loos, Charles J. McCarthy, Paul G. McQuiston, James R. Mann, Gary P. March, John K. Maser III, C. G. Mathews, Eugene J. Mielke, Edward M. Miller, Reeder Miller, Raymond R. Nolen, Roy E. Olson, L. A. Parish, J. E. Phelan, Robert P. Post, Robert B. Reedy, Thomas J. Regan, Arthur M. Ribe, Barry Roberts, Jon R. Roy, Dudley J. Russell, Clay N. Saunders, David M. Schwartz, Carl F. Schwensen, Charles E. Seaberry, Ernest Sigeti, William K. Smith, Ellwood Spencer, Harold E. Spencer, John G. Stanger, Norman F. Starnes, Roger J. Stroh, J. Anthony Terrilla, M. M. Voog, William D. Wagstaffe, Edwin M. Wheeler, Edwin P.

Wintle, Fredic L. Wood, and Henry J. Yunck for individual shippers and shipper associations.

Paul L. Mills for the United States Department of Agriculture. James E. Armstrong for the United States Department of Defense. Constance L. Abrams, Donald T. Bliss, and William A. Kutzke for the United States Department of Transportation.

Lee M. Rife for the Illinois Department of Agriculture.

Peter D. Schellie and Peter C. Ward for the State of Indiana. Robert S. Steiner for the Transportation Regulation Board of the Iowa Department of Transportation.

P. O. Caron for the Public Service Company of New Hampshire. James A. Graham for the State of North Carolina.

John I. Finsness for the North Dakota State Wheat Commission. George Morin for the North Dakota Public Service Commission. B. Dale Ball for the Michigan Department of Agriculture. A. G. Grimm for the Department of Agriculture, State of Missouri.

John D. Kratochvil for the Oregon State Department of Agriculture.

Robert P. P. Kane and Gordon P. Macdougall for the Commonwealth of Pennsylvania.

Frank E. Polom for the Board of Trade of the City of Chicago. Joe Neal Hampton for the Enid (Oklahoma) Board of Trade. Jon C. Hansen for the Board of Trade of Kansas City, Missouri, Inc.

REPORT OF THE COMMISSION

BY THE COMMISSION:

By Notice of Proposed Rulemaking entered June 7, 1976 and published in the Federal Register on June 15, 1976 (41 FR 24192), this proceeding was initiated to promulgate standards and expeditious procedures for establishing railroad rates based on seasonal, regional, or peak-period demand for rail services. Such standards and expeditious procedures are required by Public Law 94-210, the Railroad Revitalization and Regulatory Reform Act (4R Act), enacted February 5, 1976.

In enacting the 4R Act, the Congress declared its policy to be to:

(1) balance the needs of carriers, shippers, and the public;

(2) foster competition among all carriers by railroad and other modes of transportation, to promote more adequate and efficient transportation service, and to increase the attractiveness of investing in railroads and rail-service-related enterprises;