BEFORE THE
INTERSTATE COMMERCE COMMISSION.
IN THE MATTER OF
THE CONSOLIDATION OF RAILWAY PROPERTIES
OF THE UNITED STATES INTO A LIMITED NUMBER
OF SYSTEMS.
STATEMENT FOR WABASH RAILWAY COMPANY
BY
WILLIAM H. WILLIAMS,
% Chairman of the Board of Directors.
May 18, 1923.
Printed In U.S.A.—The Evening Post Job Printing Office. Inc.. 154 Fulton St.. New York. N. Y.
• • • • • •••
Before the
Interstate Commerce Commission.
_—■■ ... — — -v
In the Matter
of
the Consolidation of Railway Proper¬
ties of the United States into a Lim¬
ited Number of Systems.
STATEMENT OF WILLIAM H. WILLIAMS,
Chairman of the Board of Directors of Wabash Railway
Company.
Mr. Chairman and gentlemen of the Commission:
The statement has been made by persons whose
views are entitled to respectful consideration that the
railroad problem is almost the paramount problem of
the day, and that a failure to solve it will bring govern¬
mental ownership.
My feeling is that the first step toward the solution
of any problem is to determine what the problem is and
then to consider what is necessary to meet it.
2
When I was in San Francisco not long ago, the
newspaper reporters came up to see me and asked if I
would give them a talk on the railroad question. I told
them I supposed they were writing about it every day
and that it was a subject of discussion with bankers,
members of the Chamber of Commerce and others, to
which they all answered in the affirmative. "Well", I
said, "will you be good enough to tell me frankly what
the railroad question is? I myself do not know." Their
reply was "Frankly, we do not know." I then sug¬
gested that it might be well for them to go down the
line and ask the people who are calling for a solution of
the railroad problem just what is in their minds.
It seems to me that this is the trouble throughout
the country. What is the real question ? What are the
people seeking to accomplish? Every year somebody
is offering new legislation affecting the railroads of the
United States, all because they feel that there is still a
railroad problem, and what I am fearful of is that some
of the proposed consolidations may go through under
the present legislation, thereby creating a situation far
worse than the one we have today and that we may be
driven into governmental ownership by repeating some
of the mistakes of the past but on a much larger scale.
Consolidation seems to appeal to the imagination
of a number of men holding executive positions in some
of the railways, particularly where it tends to increase
their own power. I have seen no satisfactory discus¬
sion as to whether it is for the best interest of the coun¬
try. Most of the systems or schemes of consolidation
3
heretofore suggested by any railroad executive would,
if adopted, make his system the dominant system in his
section of the country.
Coming back to the underlying problem, I find that
Professor Ripley, in the introduction to his report to
the Commission, refers to the statement repeatedly
made in Congress that the difficulty in the past has
been that it has been utterly impossible for any body of
men to make a system of rates which would sustain the
weaker railroads of the country without giving to the
stronger roads an income excessive and intolerable in
its extent, and this, as I understand it, is the under-
lying problem which the proposed consolidations are
intended to solve.
So widespread is this notion that the people are
unwilling to allow the prosperous roads to prosper, that
we find Mr. Justice Brandéis referring to it in his
recent opinion in the New England Divisions case,
where he says that at the time the Transportation Act
was passed it was not clear that the people would toler¬
ate greatly increased rates, although no higher than
necessary to produce the required revenues of weak
lines, if thereby prosperous competitors earned an un¬
reasonably large return upon the value of their prop¬
erties.
I am not at all sure that this correctly interprets
the attitude of the American people. So long as a car¬
rier gives good service at reasonable rates the public is,
I believe, fair enough to concede to it a full measure of
prosperity.
4
Mr. Harriman, in testifying before this Commis¬
sion, argued that there was no reason why a Railroad
Company should not earn 100% on its investment if
its earnings were the result of efficient and economical
management, and I do not believe there was ever a sat¬
isfactory answer to his argument, and I may say here
that I never heard of any shipper complaining of the
prosperity of the Union Pacific, the Burlington and the
Hill lines.
Assuming, however, that Prof. Ripley has cor¬
rectly apprehended the problem: Will consolidation
cure the disease or will it merely mask the symptoms?
In the remarks which I ask permission to make on
this head I beg to be understood as criticising any
scheme of artificial or arbitrary consolidation as dis¬
tinguished from consolidation resting upon sound
economic grounds and obeying, in the union accom¬
plished, the operation of economic laws.
Let it be assumed that there are two lines having
equal value from the standpoint of cost of reproduction
or original cost. Let it also be assumed that by reason
of a difference in location one has more traffic originat¬
ing on its lines or has more favorable contracts or
arrangements with its connections, and it is able to earn
8% while the other is able to earn only 4%. These
two properties if consolidated would earn, say, 6%.
Presumably, bringing the weaker line into that com¬
bination it is only entitled to come in on a basis of its
earning capacity and on the value of its property as an
earning factor; otherwise there would be a confisca-
5
tion of a part of the value or equity of the stronger
line. In bringing in the weaker line at its true value
there is no benefit to the present owner of its securities.
His participation in the joint enterprise would not en¬
title him to an increased return. The other interest is
still entitled to 8% and you do not benefit the holders of
the securities of the weaker line. When it comes to the
other line, which last year showed an earning capacity
equal to two and one-half times its bond interest, the
price of its securities in the open market is based on
those results. As the result of the operation of the
consolidated system, it shows earnings only one and a
half or one and a quarter times its fixed charges. The
effect of this is to seriously impair its credit, which
immediately makes it necesssary to pay a higher rate of
interest upon any money it is necessary to borrow in the
money market. The diminished aggregate return
upon the combined enterprise might seriously interfere
with its financing capacity and make impracticable
methods of financing, such as the issue of stock, which
would have been available to the stronger line.
I have before me a statement containing statistics
of certain railways, classified as to mileage and districts,
showing the percentage earned on investment. While
this is based on a 1916 return, relatively speaking the
same figures would apply today. This statement
shows :
Railways under 250 miles, Class I, II and III
and Switching & Terminal Companies, all
districts, earned 6.94%
6
Railways 250 miles and under 500 miles, Class
I and II, all districts, earned 4.55%
Railways 500 miles and under 1,000 miles,
Class I, all districts, earned 5.26%
Railways 1,000 miles and over, Class I, all dis¬
tricts, earned 6.90%
The earnings of the small roads and the large roads
were almost identical; the roads that were out of line
were those having mileage of 250 miles and under 500
miles.
Of the group of railways under 250 miles, earn¬
ing 6.94%:
Class I roads earned 10.87%
Class II roads earned 2.59%
Class III roads earned 35%
Switching & Terminal Companies 6.63%
Of the group of railways 250 miles and under 500
miles, earning 4.55%:
Class I roads earned 4.76%
Class II roads earned 73%
Of the group of railways 500 miles and under 1,000
miles, and of the group over 1,000 miles, there was none
other than Class I.
The percentage by district is as follows:
Of the group under 250 miles:
Class I:
Eastern District 11.75%
Southern " 7.24%
Western " 10.05%
7
Class II:
Eastern District 3.15%
Southern " 2.46%
Western " 2.16%
Class III:
Eastern District 50%
Southern " 85%
Western " None (Deficit)
Switching & Terminal:
Eastern District 6.10%
Southern " 3.87%
Western " 8.65%
Of the group, 250 miles and under 500 miles:
Class I:
Eastern District 4.33%
Southern " 4.18%
Western " 5.28%
Class II:
Eastern District (No roads
in Class II)
Southern " None (Deficit—1
road)
Western " 1.40% (2 roads)
Of the group, 5Ö0 miles and under 1,000 miles:
Class I:
Eastern District 8.49%
Southern " 3.76%
Western " 2.64%
8
Of the group, 1,000 miles and over:
Class I:
Eastern District
Southern "
Western
7.55%
6.17%
6.95%
As you go through the figures and consider the size
of the different roads there is nothing to indicate that
size is the controlling factor when it comes to financial
returns or that it has any effect on the ability of a
carrier to maintain itself. I believe these figures
clearly show that size is not a safe criterion of either
strength or earning power. In this connection it is
interesting to note that many of the railroad systems
noted for their magnitude have been overtaken by
financial difficulties in recent years and have been com¬
pelled to seek the aid of the courts in effecting a reor¬
ganization of their financial structures.
It is only occasionally that there has been an in¬
creased net operating return resulting from a consoli¬
dation or the extension of a parent road. The excep¬
tional case is where the property acquired is an originat¬
ing carrier controlling traffic, like the Chicago, Lake
Shore & Eastern or the Bessemer and Lake Erie.
Generally speaking, the traffic of the railroads
throughout the country entitles them to certain bases
of exchange, as, for example, the New England lines
bringing traffic to the Hudson River, where they are
entitled to two loaded cars for every one they deliver,
because eastbound movement is twice as heavy as west-
9
bound movement. At Buffalo we find the same situa¬
tion ; at Chicago, the proportion will run about two to
one or three to two, and it is practically the same at
St. Louis. At Denver the proportion is even greater,—
I think four to one, certainly three to one. But when
a road is bought and all of its business is given to the
line buying it, its trading power in handling traffic with
lines competitive with the purchasing line is imme¬
diately taken away. The Lackawanna Company, being
alive to this situation, decided some years ago not to
take over any line west of Buffalo. At Buffalo there
are the Grand Trunk, Michigan Central, Pere Mar¬
quette, Wabash and Nickel Plate; if the Lackawanna
or Lehigh Valley bought any one of these roads and
diverted to it all westbound traffic, the Lackawanna or
Lehigh Valley would immediately lose the traffic of the
other four and in this way it would very materially
minimize the territory it could serve. Suppose, for
example, either of these companies took the Nickel Plate
which does not run to Detroit, the roads running to
Detroit and which also go to Chicago would imme¬
diately become competitors of the Lackawanna or
Lehigh Valley, and would cease feeding them with busi¬
ness from Detroit. This illustrates the situation and
points out the mistaken policy of some of the roads in
the past which have gone into the hands of receivers as
the result of unsound expansion.
Consolidation does not in and of itself bring about
greater value to the roads when thrown together. It
does not necessarily make the combined value greater
10
than the value of the two roads individually. There¬
fore, from the standpoint of financing and protection,
nothing may be gained by throwing two properties
together, while, as I have already pointed out, much
may be lost.
My fear is that consolidation is a step toward, not
a step away from governmental ownership,—an out¬
come which I believe everyone concedes would be an
unfortunate one for the country.
The experience during Federal control, when fully
understood, was such as to shock the American people.
Here was the United States Government that did not
have the courage to put in a rate structure which
would sustain the roads and make the people that were
getting the benefit of the service pay for it at a time
when tremendous profits were being made by indi¬
viduals and industrial corporations and plants were
working on two and three shifts. The people were
making profits then they never had made before, and
yet the Government did not ask them to pay for the
railroad service given them. Had that occurred in any
other time than war time it would not have been toler¬
ated. During the war, the attitude of the American
people was that nothing should be said or done to
embarrass the Government, so that the Government
enjoyed an immunity from interference and criticism
that would not have been obtained in peace times. Its
greatest difficulty was to combat its own Departments,
—the Army and Navy. They were sending forward
on priorities as high as 65% of the traffic on one divi-
11
sion of an important railroad where there was real
congestion.
Take the Inter-Colonial Railroad in Canada. It
would not have been laid out the way it was had the
road been for private operation. For political reasons
it was made to go up the St. Lawrence and down again,
adding say 300 miles to its length. When the Mac¬
kenzie-Mann proposition came up and they granted
great subsidies, the only way to get the vote was to give
something to the eastern part of Canada, as a result of
which the National Transcontinental was constructed
200 miles north of Montreal and certainly 100 miles
north of any civilized community, at a cost to the
Government in excess of $156,000 per mile. That is an
illustration of governmental operation, and it is a sig¬
nificant fact that France, Germany, Italy and other
continental countries are seriously considering throw¬
ing all Government owned roads back to private owner¬
ship.
Since the Transportation Act was passed there
has been little, if any, discussion of the subject of con¬
solidation on its merits. The discussions which have
taken place have been in regard to the kind of combina¬
tions without first determining the problem to be solved.
If, therefore, the Commission will permit me, I will
suggest certain reasons why I believe the proposed
consolidations are unsound, and will follow with cer¬
tain additional .suggestions for the improvement of the
railroad service generally and will then take up the
12
Commission's Plan in its direct relation to Wabash
Railway Company.
The consolidation plans which Prof. Ripley and the
Interstate Commerce Commission have brought forth
are not entirely consistent, and to a certain extent
neither of these plans, as I understand it, conforms to
the requirements of the Transportation Act.
The Act provides that competition shall not be sub¬
stantially reduced. I think both plans violate that part
of the Transportation Act in so far as New England
is concerned.
The requirement that competition shall be preserved
has, it seems to me, been completely ignored when it
comes to New England, and almost completely ignored
in the northwest. The Commission has apparently
decided that as long as two roads serve the same terri¬
tory there is substantial competition. This is contrary
to the decision of the United States Supreme Court in
connection with illegal combinations. In the Reading-
Jersey Central case the conclusion was that inasmuch
as that combination gave the two interests 40% of the
unmined anthracite in Pennsylvania it constituted a
combination in restraint of trade.
There is another objection. While the proposed
systems indicate that there is to be competition between
large centers, competition as regards intermediate
points is apparently ignored. Take for example, coal,
which constitutes about 39%, and products of all mines
57% of the tonnage of the railroads, that does not
originate at Chicago, New York, Philadelphia, Pitts-
13
burg or St. Louis. Lumber and forest products do not
originate at these places. Another big tonnage pro¬
ducer is products of agriculture, and by the time you
have taken these three you have almost 70% of the
tonnage of the railroads, yet you are going to ignore
competition as to that quantity of traffic.
No definite policy has been determined upon with
reference to terminals. Clearly, the success of any rail¬
road is dependent upon its ability to afiford shippers
facilities both at point of origin and at destination.
The system having located upon it the greatest produc¬
ing industries and equipped with the best terminal
facilities, will handle the greatest volume of traffic.
There is, moreover, nothing in these plans, apart
from the statement of Prof. Ripley, already referred to,
which indicates what is to be accomplished by the pro¬
posed consolidations. Presumably, it is intended to
arrange things so that the rate of return of each of the
systems will be approximately the same. That, how¬
ever, will not bring about better service for the country,
and, after all, we should look to economies and service.
From my standpoint, I am not satisfied that there
has been sufficient study made of the interchange of
traffic and the results that may be expected from the
proposed consolidations. As these consolidations are
brought into play a large amount of traffic will be taken
away from some of the lines, as I have already sug¬
gested in connection with the unwillingness of the
Lackawanna Company to take over any line west of
Buffalo. Not knowing the effect of the diversions of
14
traffic it would be unwise for the Interstate Commerce
Commission to make conclusions based upon the pres¬
ent operating results of the individual properties.
Suppose, for example, the Burlington, Northern
Pacific and the Great Northern were thrown together.
All of the unrouted business of that great system might
be thrown to one line east of Chicago, say, the New
York Central or the Pennsylvania. Think of the un¬
fortunate effect it would have on either of those proper¬
ties for all of the vast business of the Northwest to be
handled by the other. Suppose, further, that the Bur¬
lington, the Northern Pacific and the Great Northern
tied up with either the New York Central or the Penn¬
sylvania, and that the St. Paul system or the Union
Pacific system tied up with the other : Then what would
become of the Erie system?
This situation will prevail at all gateways unless the
number of lines on either side of each gateway are
identical and each has an equal volume of traffic to
interchange with the roads in the other section.
In the event of the consummation of the proposed
grouping of the New England lines, think of the power
that would be given them on such questions as divisions,
service, per diem and the furnishing of cars. They
could take all of their traffic and turn it over to one sys¬
tem west of the Hudson until they forced another line
to give them something to which they might not be
equitably entitled. For example, they could turn over
all of their traffic to the Pennsylvania and keep it there
15
until the New York Central should outbid its com¬
petitor. In dealing with this situation it is significant
that the New York Central has been granted an import¬
ant advantage over competing properties through the
allocation to it of the Boston & Albany lines, permitting
exclusion of competitive traffic over those lines. This
preferential position has been further strengthened
through the tentative assignment to the New York Cen¬
tral of the additional lines of the Boston & Maine,
Maine Central and Bangor & Aroostook. This ar¬
rangement tends to enlarge and support a system, de¬
clared to be already of sufficient magnitude and
strength, at the expense of less powerful and more
natural connections.
Suppose the Burlington and the Northern Pacific
come together and the St. Paul and Great Northern
get together, and there is also the Union Pacific and
Northwestern combination: The Union Pacific and
the Northwestern are two roads, which, individually,
earn over 8%, and in the case of the Great Northern
and the St. Paul, one may earn over 6% while the other
may not earn its fixed charges, in which event it would
not begin to approach 6%. In the case of the Burling¬
ton and the Northern Pacific, the one hardly knows
what to do with its money, while the other is almost
equal to the Great Northern. As soon as you take the
Burlington traffic away from the Great Northern are
you not in the position where the Great Northern and
the St. Paul, after the consolidation will be weaker than
the two standing alone with the present set-up?
16
In the northwest territory, if the Burlington was
to take over either the Northern Pacific or the Great
Northern, it would paralyze the other.
Coming east, let us take the Erie-Wabash-Delaware
and Hudson combination. Putting these three to¬
gether is not going to put this system on a parity with
the New York Central or the Pennsylvania financially.
In order to consummate any of the plans proposed by
Prof. Ripley or the Commission which deal with the
combination of properties now owned and operated
independently, there would have to be an entire
reorganization, a new issue of securities, to bring about
the financial ability to finance improvements. Are we
in a position today to go into such a general financial
program, without knowing what the ultimate efifect of
the diversion of traffic will be as the result of the re¬
grouping of these railroads? Can the investment
market stand such a shock? And until we know the
effect of the diversion of traffic we will not know the
financial effect.
The New York Central system today has enough
strength of itself; the same applies to the Pennsyl¬
vania. The extent to which feeders are added to either
weakens the other. There is certainly nothing in the
program suggested that is going to make the Erie
compete with the New York Central or the Pennsyl¬
vania, or, in the case of the Baltimore & Ohio, will that
system be able to compete with the New York Central
or the Pennsylvania ? If not, I do not see that there will
be accomplished the result aimed at; instead there will
17
be brought about a much greater catastrophe than has
occurred in the past,—a catastrophe which would seem
inevitably to lead to Government control.
If you are not adding to the strength of properties
by bringing them together you have not accomplished
anything in the protection of capital by these consoli¬
dations. Then what is there to be accomplished by con¬
solidation except service?
Assuming this to be true, I maintain that the same
results in service can be accomplished by establishing
through routes for the purpose of ascertaining definitely
what the effect will be on the flow of traffic from having
certain interchange take place and from dividing the
rate in particular ways. It will not be necessary to
speculate in order to determine the effect of these con¬
solidations.
On the question of service, there has been trouble
from the standpoint of the public in certain cases. In
New England this trouble is almost entirely confined to
two systems; there is no other trouble in New England.
Before one of these systems increased its facilities—I
do not know the situation today—it was found that as
soon as that road had 45,000 cars a blockade was
created which tied up the whole situation in New York.
Unless conditions have changed, the only way to pre¬
vent this is to cause this line to place an embargo as soon
as its line has 40,000 cars on its rails. In other words,
so that with the freight then in transit the road would
not get blockaded to the point where the freight could
not be moved forward or backward, and so that it
18
would always be free to move freely; and in the end you
would handle more traffic on that line than by having it
blockaded first. Of course, the other alternative is to
increase the facilities. The same thing will have to be
done on the other line until such time as it modernizes
its plant and increases its carrying capacity. On the
New England lines locomotives, cars and bridges have
not been modernized in pace with the lines west of
New England.
Consolidations are certainly not going to increase
the carrying capacity of either of the lines just men¬
tioned, and it is not to be expected that any better
service in New England will result. There will be
trouble there until such time as these lines strengthen
their facilities to enable them to handle an added quan¬
tity of traffic.
This is the railroad problem in New England, and
my contention is that it will be just the same regard¬
less of who owns the tracks,—whether they are owned
by two companies or two hundred companies. In either
case the problem would be identical and this is true
not only of New England but applies equally to the en¬
tire United States.
During the war the congestion and delay came on
the big systems. There is nothing in this to indicate
that the creation of large systems will solve the problem
of service.
We find congestion in the Pittsburg district, at the
Buffalo gateway, at Detroit, at Chicago, and at St.
Louis. Generally speaking, these are the points, other
ID
than New England, where we find the trouble, and yet
the plans which have been submitted by the Commission
and Prof. Ripley tend to accentuate that trouble rather
than to decrease it. For example, it is contemplated—
at least there is a possibility that the Wabash lines in
Canada will be taken away, thereby curtailing the han¬
dling of traffic through the Buffalo gateway.
I will say that there is periodical congestion at the
seaboard ports, but that is of a different type. That is
dependent upon the vessel tonnage being sufficient to
take away the tonnage as it comes in. For example,
during the early stages of the war we had over a million
and a quarter tons of freight at seaboard waiting for
vessels to take it away. We had more there for France
than could have moved in seven months ; and the situa¬
tion as to England was about the same. They filled the
docks and we had no place to put it. It was backed up
clear back to the mills. That came about in the manner
in which those contracts were let, which provided for
sale f. o. b. cars, and as soon as it was loaded on the
cars the shipper was enabled to put the order bill of
lading in the bank and get his cash, the result being
that they continued to load that stuff on to the seaboard.
And after we got into the war we were not in position
to place embargoes as the Government asked that that
action be not taken.
There has been nothing suggested that will increase
the ability of the carriers to handle traffic through Pitts¬
burg and Chicago. Moreover, it is suggested connect¬
ing up the southwestern lines with Chicago, bringing the
20
Union Pacific through to Chicago, and bringing the St.
Paul lines, the Northern Pacific and the Great Northern
through to Chicago, with the idea that Chicago is the
ultimate end of that traffic and the interchange point for
territory west of the River.
Under the Act a railroad is not required to turn off
its traffic until it gets to the end of the line ; it can carry
its traffic as far as it wants to carry it on its own rails.
As all of this southwestern traffic is brought to Chicago
it will make Chicago the interchange point instead of
allowing the traffic to move through such gateways as
St. Louis and Thebes, below St. Louis. The result to
expect will be a change in the flow of traffic, regardless
of the present facilities, i. e., whether they are adequate
or inadequate, via the new route, and regardless also
of whether facilities via existing routes are rendered
worthless.
There will be just as much work for the Terminal
Railroad Association of St. Louis, and the work at
Chicago will be immeasurably increased. Today, in
going through gateways other than Chicago and St.
Louis, there is a difference on freight of five days in
reaching the point of destination, i. e., to go to Fort
Wayne and thence via the Wabash to Kansas City is
five days quicker than the routes through St. Louis or
Chicago. Yet it is planned to force all that traffic
through Chicago.
I assume that that situation exists as I have stated
it. Some years ago I was traffic manager of the Cham¬
ber of Commerce in Pittsburgh. Cards were made out
21
by the shippers for all carload traffic which they for¬
warded, and the reply postal card part of it was re¬
turned to my office, and in following up those cards we
were able to get the length of time it took via various
routes the freight was forwarded over; and it was on
the basis of the information collected in the period from
1904 to 1907, while I was traffic manager there, that I
reached these conclusions.
Among other things, no consideration has been
given to the cross-lake traffic on Lake Michigan. Yet,
this offers the possibility of avoiding the Chicago gate¬
way on northwest traffic to a much greater extent than
is being done today.
It is my understanding that the saving in time in
moving that freight across the lake is such that the
saving in per diem on the freight cars will alone be
more than enough to take care of the expense of hand¬
ling the traffic across the lake, to say nothing of the
added cost of bringing it all the way down to Chicago
and putting it through those extensive terminals.
There is also the possibility of sending the traffic
south of St. Louis, through the Thebes gateway, or of
putting in another bridge to provide an additional gate¬
way.
Another thing in connection with the plans proposed
is the difference in treatment of two territories. In the
eastern territory it seems to be the purpose to connect
all the big systems with Chicago and St. Louis. This
will have the effect of destroying Kansas City as a gate¬
way. There is apparently no consideration given to
22
the diversion of business from Kansas City and the
effect this will have on the commercial activity of so
important a center. As we come east of the river we
find that they have not followed the same plan of con¬
necting the systems with large cities. Coming east
there are three situations instead of two, viz: The New
England market, the New York market and the Phil¬
adelphia market. They do not project these systems
into these three markets. New England has been left
entirely to the whim of the individual running the New
England system. When it comes to Philadelphia and
New York all of the systems go into New York, while
some do not go to Philadelphia.
In connection with that St. Louis traffic slightly
over 83 per cent, of it to-day moves east from St. Louis.
The balance of it is handled on lines going up to Chi¬
cago, and of that 17 or 18 per cent, of it either goes
into Chicago or turns oft at some place short of
Chicago. But the records over a series of more than
10 years up to 1917 indicate that something in excess of
82 per cent, of that traffic moves directly east from
St. Louis; and in 1917 it was in excess of 2,600,000
tons; and that is the traffic which under this plan might
be diverted through the Chicago gateway.
I think there is another thing that would be of con¬
siderable interest to develop. In the New England
Divisions Case there was an analysis made of the traffic
interchanged between the New England lines and the
other territories, and this analysis (Brigham Exhibit
No. 14) showed:
23
Interchange with Trunk Line Territory 61.0%
Interchange with Central Freight Association
Territory 27.0%
Interchange with Territory west of the Mis¬
sissippi River 3.7%
Interchange with Canadian roads 3.0%
Interchange with Southern roads 2.8%
Interchange with Transcontinental traffic
(moving on transcontinental rates).... 2.5%
This would emphasize, in a way, that if all the New
England lines were placed in one group and this traffic
diverted to one of the trunk lines, it would have a ter¬
rific effect. It would not make much difference to the
transcontinental lines but would in the intermediate
territory.
As the result of changes in gateways a vast amount
of traffic will surely be diverted to new channels; yet
no consideration is given to the effect this will have on
the moving of railroad employes from their present loca¬
tions to new locations ; the effect it will have on the com¬
munities which the employes leave, the effect on the
employes themselves as a result of the departure and
the reduced value of their homes by reason of their
moving.
All of the way through I have not seen any discus¬
sion of this problem from the standpoint of its being a
national affair; the discussions have been confined to
the territory served by the line that was under discus¬
sion, together with the suggested extension.
24
Assuming that the railroads start out on an equal
basis, we have no assurance they will develop along
equal lines. No one can tell what the future indus¬
trial development of the United States will be. We
have had a remarkable growth in Detroit due to the
automobile industry. The census shows some very
surprising changes in the relative ranking of cities,
the growth of the population of which presumably has
carried with it increases in the industrial growth. It
is evident that any set-up based upon the traffic handled
prior to these changes would not produce the same
results today after the changes have taken place.
Were all the systems to start on an equal plane and
were we able to get the traffic to develop along uniform
lines, we would still have confronting us the question
of management. It is easier to re-build a road when it
has broken down than it is to re-build a management
that has broken down. There is no suggestion offered
to maintain this situation and clearly the problems be¬
come much more pronounced as the systems increase in
size.
The thought in my mind is that the difficulties will
be minimized by allowing consolidations to take their
natural course as in previous years, but always subject
to review by the Interstate Commerce Commission.
This would give the public the benefit of the Commis¬
sion's judgment and at the same time would get away
from a suggestion of personal profit leading to such
consolidations, such as might come where a man was
financially interested in two systems and there was a
25
possibility of personal gain. It would, I believe, be
better to permit these consolidations to take place gradu¬
ally in the interest of improved and efficient service
rather than to turn the whole railroad situation upside
down.
We should moreover bear in mind the provisions of
various State laws with reference to investments by in¬
surance companies, trustees of trust estates and sav¬
ings banks. As a result of these consolidations it is
quite likely that a great volume of securities now law¬
ful investments will be outlawed and thrown out as
legal investments. By this I mean that many strong
securities which today come within the limit of the law
will not, after the consolidation, come within the limit
of the law by reason of their inability to pay a rate
of return entitling them to continue as legal invest¬
ments. In this way the existence of these institutions
may be jeopardized.
The railroad situation is very much like a community
situation. You cannot take a man who has a reputation
for being bad and correct that condition by having him
associate with only an individual who has a reputation
for being good. A weak road is one of the infirmities
of the situation that has to be recognized just as we do
incompetents in a community.
If a railroad cannot live under existing rates this
must be either because the road is too weak or the rates
are too low. If the rates are too low the Commission
should recognize this and should increase them. If the
rates are high enough already the road should not be
26
tacked on to a stronger road to sap its vitality but should
be put through reorganization with a proper readjust¬
ment of capital investment. If this is not practicable
because the road is too weak to pay expenses of opera¬
tion then it should be sent to the scrap-heap along with
the Chicago, Peoria & St. Louis.
Summing up, the net result of the consolidations, as
I understand it, will be :
1st: A better opportunity for Governmental and poli¬
tical exploitation of the railroads;
2nd: A net loss to the security holders of the rail¬
roads; and
3rd : A deterioration in service.
I now come to the suggestions which I wish to sub¬
mit for the improvement of railroad service :
There is a failure today to get full utilization of the
equipment and facilities which the railroads own. This
can be gotten, from the standpoint of cars, by providing
in the tariffs carload rates only when the full tonnage
carrying capacity or cubical content capacity is utilized ;
for anything less than that you should increase the rates
in proportion to the increased service required to handle
in additional equipment and for the additional facilities
provided therefor. To the extent you do not utilize the
full carrying capacity you increase the number of cars
required and you increase the proportion of dead weight.
Furthermore, you increase the frictional resistance of
the train ; and, by increasing the frictional resistance and
the dead weight you increase the number of locomo-
27
tives. To illustrate this, I recently brought together
the following figures for a Line in which I am inter¬
ested: Two or three years ago that Line had an average
loading capacity of 24 tons of revenue freight per car,
but last year the average dropped to 21 tons. Assuming
that that Line has an engine of a capacity of 3,000 ad¬
justed tons, the comparison between the two operations
would be as follows: In the first instance the engine
would be hauling cars loaded with 24 tons of revenue
freight, the dead weight of each car averaging about
20 tons and the frictional resistance about 12 tons per
car (the latter being based on .5), making a total equiv¬
alent of 56 tons per car. The engine, therefore, could
haul 53Yz cars and as each car contained 24 tons of
revenue freight there would be an aggregate of 1,284
tons of revenue freight per train. In the second instance
the engine would be hauling 21 tons of revenue freight
per car, 20 tons dead weight per car and 12 tons of fric¬
tional resistance, a total of 53 tons, so that the engine
would be able to haul 57 carloads of freight or a total
of only 1,197 of revenue freight. It will be noted, there¬
fore, that in the latter case, with 3j<4 more cars in the
train, the engine was hauling 87 tons less of revenue
freight. When you get into that situation you also
increase the number of trains and the number of men.
The capacity of a railroad is measured by the number
of trains, not by the number of tons or by the number
of cars. The trains must be spaced. Freight trains
are never less than five minutes apart, usually ten min¬
utes. Trains have to be met on single track lines. The
28
next thing with reference to capacity is uniformity of
speed. As fast trains are brought into the situation the
capacity of the line is decreased. Therefore, in Europe,
during the war, all trains were operated at uniform
speed. To get a full utilization of the equipment and
facilities which the railroads own would not cost one
cent in the way of investment and it would at once
increase the carrying capacity of the railroads in the
United States by 20% to 25%.
The next proposition is: That demurrage rates
ought to be on a sliding scale and whenever there is an
active demand for cars or reported shortage of cars in
any section of the country or on any railroad where all
the cars wanted cannot be furnished to the shippers the
maximum demurrage rates should apply. These rates
ought to be high enough to prevent cars remaining under
load longer than twenty-four hours. This will prevent
embargoes, with the consequent disruption of the busi¬
ness of the shipper ; in addition, there will be an economic
advantage in another way. At the present time when
these congestions come there is an inclination on the
part of the shippers and on the part of the industrial
people of the country to increase their orders and to
stock up in order to offset the delays to transportation.
What we need, from an industrial standpoint, is regu¬
larity of service, not necessarily speed. Not knowing
the actual conditions the buyers frequently stock, creat¬
ing a buyers' market. This brings about an over-
expansion in trade, the credit facilities of the country
29
are taxed and the first thing we know the banks shut
down on credit; and by shutting off the buying power
panic periods are brought on.
I feel that in large cities where it is physically impos¬
sible for any plant to be connected with a great number
of railroads—usually with not more than one—uniform
switching rates should apply so that the shipper has
open to him the market of all the railroads reaching
that town.
Generally speaking the railroads of the country have
not fallen down. We have a few places where we have
had the service fall down, a few cities as I have pointed
out here where we have had congestions. We have had
a few individual roads which have fallen down, and my
thought is that if we undertake to make an analysis
as to the source and cause and kind of trouble and the
remedies to overcome it, we would get this situation
pretty well behind us.
Senator Robinson of Arkansas has commented with
reference to the failure of the railroads to increase the
revenue tonnage per train proportionately with the in¬
crease in the average tractive power of the locomotive.
While I haven't seen that statement, I understand
Senator Couzens has also made some comment on that
subject.
I have a statement I want to offer showing the aver¬
age loading over a series of years and the average
capacity for something over 20 years—I have forgot¬
ten the exact time—but the loading has not gone up in
proportion with the increased capacity of the car. This
statement is as follows:
30
Average Tons Percent of Avg.
Year Per Average Tons per Car to
Loaded Car Capacity Average Capacity
16-91 28 60.39
I*« 17.60 29 60.69
J904 17.72 30 59.07
J505 18.14 31 58.52
}906 18.92 32 59.12
1907 19.67 34 57.85
1908 19.62 35 56.05
1909 19.26 35 55.03
1910 19.85 36 55.13
1911 19.74 37 53.35
1912 20.18 37 54.54
1913 21.12 38 55.58
1914 21.09 39 54.08
1915 21.39 40 53.47
1916 22.64 40 56.60
1917 25.00 40 62.50
1918 26.88 41 65.56
1919 25.51 41 62.22
1920 26.93 42.4 63.53
1921 24.57 42.5 57.83
1922 24.31 42.6 57.07
Your engine is hauling the dead weight of the car
and the revenue loading, and in addition to that there
is a frictional resistance on each car, with 15 tons for a
0.3 per cent, grade, etc. ; and when you make allowance
for that and what the engine is hauling, the engine is
hauling proportionately with the increase in tractive
power, but not proportionately in revenue load because
of the lighter loading of the car. You have the in¬
creased dead load and increased friction. That is a
situation which, if corrected, and if we all join in bring¬
ing into this situation what can be done, we can accom¬
plish as much for the transportation interests of this
country and the shipper as we can by an investment of
in excess of eight billion dollars. Now, that is so great
in its magnitude and so important that I feel I cannot
just let that go by entirely unnoticed.
I should like to offer this little memorandum which
I have as to what I believe will get control of the rail¬
road situation, and how it can be done.
31
Brief of Suggestions Made by Mr. William H.
Williams, Chairman of the Board, Wabash
Railroad, at Special Meeting of the Amer¬
ican Railway Association held in New York
City, April 5, 1923.
1. Collection of data to show number of cars de¬
stroyed or retired from service.
"If the Association had acquired information
with reference to the number of cars going out of
service, we would know definitely what the in¬
crease is and would always have useful informa¬
tion."
2. Analysis of car shortage.
"In what sections of the country do they occur?
On what classes of equipment?
Are they periodical or continuous, and during
what season of the year do they occur and how
extensive are they?
Do the roads in each section of the country
collectively own sufficient cars for the particular
class of traffic that originates in those sections?
Is it a sectional shortage of equipment or indi¬
vidual road shortage?"
3. Statistics covering car loading.
"Show loading of cars by classes so we can get
some idea as to the number of box cars that were
loaded in each territory."
32
4. Embargoes.
"An analysis of embargoes to indicate places
of persistent congestion and delay.
Make study to show what is the remedy to
avoid tying up cars.
Ascertain approximately the capacity of indi¬
vidual lines; the embargo should be placed before
that capacity is reached so there will still be train
movement instead of waiting until the road cannot
move."
5. Report of freight car surplusages and deferred
car requisitions.
"Instead of taking the car ownership as a basis
for distribution, make a deduction for cars that
are awaiting and undergoing repairs."
6. Penalty per diem.
"There is a limit beyond which a road ought
not to go and a party who puts money in a car
ought to have reasonable expectation of their car
getting back on his line. Unless you are going to
have that expectation, you cannot expect the owner
to buy more cars because the $1.00 per day does not
get more than a reasonable return on the invest¬
ment. The cost of repairs must be taken into con¬
sideration. A car will earn anywhere from $1,500
to $2,500 per year on the average for the country.
You have got to have some effective rule that will
get the car back to the owning line and give reason¬
able opportunity to earn the money for which that
car was built."
33
7. Reduction of delay in yards.
"Each individual road should make an analysis
of cars by direction in each yard after they have
been there one day or less, one to two days, and
one to three days. This was tried out on two
roads, and after six weeks the average delay in
yards was cut in two."
8. Detention of cars by shippers and consignees.
"There is a tremendous delay to cars loaded
with automobiles due to inability of consignee to
finance a car and lift the bill of lading. These
run as high as forty-one days per car.
"An analysis should be made, for example, on
cars that are at destination under demurrage two,
three, four or five days, etc., to ascertain the rela¬
tion on different lines and what the commodities
are that caused these tremendous delays.
"In periods of car shortage, suggest considera¬
tion be given for a higher demurrage rate that will
put a premium on the unloading of a car."
9. Heavier Loading.
"Some years ago we started with the twenty
ton car. Now we have got up to the fifty tons but
have made comparatively little change in the car¬
load minima. Generally speaking, the deadweight
of the car is just half the carrying capacity.
Revenue in freight has gone up proportionately
with average deadweight in car. While the capac¬
ity has increased, it is not being utilized because
the carload minima has not been increased. The
tremendous effect in revenue tonnage in trains due
to failure to load cars to capacity is the reason we
34
are not getting the trainload proportionate with the
increase of the tractive power of locomotives. We
have an uneconomic operation which ought to be
stopped and that character of information ought
to be brought out."
On the basis of property investment as reported to
the Interstate Commerce Commission for the year 1919
it would have been necessary to have had an increase
of 3.04% in freight rates for each 1% needed to bring
about a fair return. Let us assume the railroads earned
3L>% and they were entitled to Sl/¿%, only 2% addi¬
tional would have been needed. That would have been
an increase of 6.08% in freight rates, or in all rates,
and would have produced more than $180,000,000 addi¬
tional revenue for the railroads of the Eastern Group.
For each 1% given the Wabash Company would have
received approximately $ 1,300,000 increase in gross and,
of course, in net, based on the 1922 earnings or about
$1,350,000 based on the 1921 earnings. In other words,
if the figure was 2% for the country as a whole, the
Wabash Company would have benefited to the extent
of $2,600,000 in net income. Therefore, if a rate struc¬
ture were provided for the roads in the Eastern Group,
based on the property investment of all the roads, the
Wabash Company would cease to be where it needed
anybody's help. We have weak roads today because
of a failure to provide a proper rate structure and the
only way to correct the situation is by changing the
rate structure. If the continued failure to provide this
35
rate structure will result in Government ownership the
problem is the same with or without consolidation.
If a proper rate structure will give to the Wabash
Company net operating income of $2,600,000 more than
is provided by the present rate structure, that $2,600,000
would certainly very materially strengthen its credit.
It would make available out of earnings $2,600,000
which could be used in the property ; and, back of that,
its borrowing power would be tremendously increased.
In this connection I wish to put the Wabash Com¬
pany on record as protesting against the provision of
the Transportation Act and the orders of this Com¬
mission under the Transportation Act which attempt
to limit the carriers to a return of less than 6% upon
the value of their properties without regard to the con¬
dition of the individual carrier, without regard to its
location and without regard to money rates and eco¬
nomic conditions prevailing where the carrier is situated.
Such a return to rail carriers whose earnings ebb and
flow with the tides of business depressions and pros¬
perity is plainly confiscatory under the decisions of the
Supreme Court, particularly the New York Gas Com¬
pany case and the Lincoln Gas Company case. In the
latter case the Supreme Court appears to have approved
an 8% return to a Gas Company operating in Lincoln,
Nebraska, and if a Gas Company is entitled to 8% why
not a railroad company?
The views thus far expressed cover considerations
which are, generally speaking, common to all the rail¬
ways or which apply in greater or less measure to all
36
the railways. The position of the Wabash under the
tentative plan is, however, unique in that it is proposed
to divide its system. To this proposal the Wabash Com¬
pany is constrained to urge serious protest.
The only large system proposed to be dismembered
—the only carrier called upon to assent to or negotiate
consolidations of separated parts of its property as dis¬
tinguished from a single corporate consolidation is
Wabash Railway Company. Its mortgages cover an
integral property—for all the substantial purposes of
this inquiry. Readjustment of stock interests would
depend on comparative valuations of the sections of
its property separately acquired. For purposes of nego¬
tiation there is an almost fatal "disturbance of cor¬
porate integrity" (see Ripley Report, p. 635).
I might also state that we have a number of con¬
tracts which are not transferable, which would not go
with the property. They could only go with the stock.
In other words, if somebody acquired the stock owner¬
ship of the property they might acquire our contracts,
but they could not do so simply by a sale of the prop¬
erty itself. We would not be in position to transfer
those contracts unless somebody else gave their con¬
sent.
It is quite possible that if property lines as defined
by corporate ownership could be ignored, as is proposed
in the case of the Wabash, ideal groupings of physical
properties might be conceived. But that is not the
scheme nor the philosophy of the Transportation Act.
The scheme is that the negotiation for consolidation
37
within the limitations prescribed and the approval de¬
fined by the law shall be between the corporations—the
corporate owners of the established systems.
Applying to the entire continental railway situation
the idea of groupings on the theory of dismemberment
of proprietary systems, it is manifest that the task
could only be accomplished, if at all, through the exer¬
cise of arbitrary powers of government. Negotiation
for such a result would be impracticable and any such
attempt would produce confusion worse confounded.
In the proposed case of dismemberment of the
Wabash properties the question would be not only the
relative value of dismembered parts to the value of other
component parts of respective groups, but also the rela¬
tive aggregate values of the groups for purposes of
conversion of securities. Moreover, each group would
be materially interested in securing minimum appor¬
tionment of value to the Wabash section allotted to it
—an internal group negotiation and an inter-group
negotiation. The problem thus presented to the
Wabash is thus dissimilar to that presented to any
other railway. It is, therefore, quite manifest that
describing the proposed consolidation as a "process of
induced although necessarily voluntary trading between
the existing railroad companies through interchange of
their corporate securities" Prof. Ripley should have
considered it a "basic", or, as he says, a "precipient"
condition that there be the least possible disturbance of
existing corporate integrity. It has already been
pointed out that the disruption of the long established
38
Wabash System would result in a serious disturbance
of existing channels of trade and commerce. That a
further result would be to add to the already serious
congestion of important terminals is manifest.
The Wabash cannot properly be classed as a weak
road. It presents a strong homogeneous railway situ¬
ation connecting by short main lines the greatest com¬
mercial centers of the middle west and presenting a
system of lineal development which is almost unique
in its comprehensiveness and directness. It offers long
established and efficient channels of trade and commerce
and terminal systems which have reached great magni¬
tude in their adaptation to the needs of the particular
main routes which its system comprises.
The poverty of the Wabash Railroad in the past,
and the financial vicissitudes which it has experienced,
have been due to no inherent defect in the constitution of
the system itself or in its adaptation to the needs of the
great country which it serves. This poverty and these
vicissitudes have been due to special causes, and partic¬
ularly to a condition recognized by the Interstate Com¬
merce Commission and now largely corrected by it,
namely, the disparity in rates between the Central
Freight Association territory and other sections of the
west and northwest. With this disparity modified the
Wabash Railway has been taken out of the category
of weak properties to which it has been the habit to
assign it in the past. Moreover, there is no reason why
the River should be taken as an arbitrary line on which
to divorce the intimately connected component parts of
its present great system. No such method has been
39
applied elsewhere—take, for instance, the case of the
Illinois Central—and such a method rests upon no justi¬
fiable principle.
The Wabash operates a line of railroad between
Buffalo, Detroit, Toledo, Chicago, St. Louis, Kansas
City, Omaha and Des Moines, as well as many other
important intermediate points. It is also the short line
between almost all of these cities.
At Buffalo, its eastern terminus, it has direct con¬
nections with the
Delaware, Lackawanna & Western,
Lehigh Valley,
New York Central,
Erie,
Pennsylvania and
Buffalo, Rochester & Pittsburgh.
Through this terminus traffic is distributed to the
Atlantic Seaboard and all of the Trunk Line and New
England territory.
Kansas City and Omaha, the western termini of the
Line, are the leading primary markets for livestock,
grain and other agricultural products and are important
distributing centers. They are also the great gateways
to the Southwest and the entire West to the Pacific
Coast.
At Kansas City the Wabash has direct connections
with the
Atchison, Topeka & Santa Fe, Union Pacific, Kan¬
sas City Southern, Missouri-Kansas-Texas,
St. Louis-San Francisco, Chicago, Rock Island
& Pacific, and Chicago, Burlington & Quincy.
40
At Omaha the Wabash has direct connections with
the
Illinois Central, Chicago, Burlington & Quincy,
Chicago & Northwestern, Chicago Great
Western, Chicago, Milwaukee & St. Paul,
Chicago, Rock Island & Pacific, Union Pacific,
and Missouri Pacific.
It is the only road that can give to the public the advan¬
tage of service over its own rails to and from Kansas City
and Omaha, the great primary markets for grain and live¬
stock and the gateways to the west and southwest, including
the transcontinental roads to and from the Great Lakes
cities, all of Eastern Canada, Canadian and Atlantic ports
and the great industrial sections of trunk line and New
England territories, and it is the only route that in serving
these sections of the country avoids congested terminals at
St. Louis and Chicago.
The distance via the Wabash from Kansas City to
Buffalo is 957 miles, almost the same distance as the
Pennsylvania line between New York and St. Louis.
This line is operated through Hannibal, Mo., thereby
avoiding the congested cities of Chicago and St. Louis,
resulting in quicker and more economical operation, and
on this account is of great advantage to the public.
The distance from Buffalo to New York via the Lacka¬
wanna is 396 miles, and the distance via the Lehigh
Valley is 447 miles.
This short strategical route furnishes an uninter¬
rupted operation between (on the west) the great
primary markets, agricultural and packing centers of
Omaha and Kansas City ; the entire southwest and west
to the Pacific Coast through connections with such trans¬
continental roads as the Union Pacific, Atchison, Kansas
41
City Southern, M. K. & T., Frisco, Missouri Pacific,
Denver & Rio Grande, Western Pacific, Chicago, Rock
Island & Pacific and Chicago, Burlington & Quincy,
and (on the east) through the fan-like network of con¬
nections at Buffalo including the Lehigh Valley, Lacka¬
wanna, New York Central, Erie, Pennsylvania, and
Buffalo, Rochester & Pittsburgh, the Atlantic Seaboard,
the great industrial centers of Trunk Line and New
England territories, the Great Lake cities of Buffalo,
Toledo and Detroit, and, in connection with the
Canadian Pacific and Canadian National, Montreal,
Toronto, all Canadian ports and all of eastern Canada.
Thus far I have attempted to show the route
of the Wabash, the territory that it serves and the
further fact that it is the short Line between its Eastern
and its Western terminus.
I will now take up more in detail the suggestions
made by Prof. Ripley and others that the Wabash be
dismembered west of the Mississippi River and prob¬
ably made a part of the Union Pacific group.
Today the Wabash is the principal connection
between the Union Pacific at Kansas City and Omaha,
A. T. & S. F. at Kansas City and Lexington Junction,
Kansas City Southern at Kansas City, and St. Louis,
and connections at St. Louis.
*There has been prepared and I ask leave to
file as Wabash Schedule No. 1 a statement
of tonnage between St. Louis and beyond
and Kansas City and beyond.
♦Wabash Schedules Nos. 1 to 7 inclusive were admitted as "Wabash
Exhibit No. 510".
42
The Wabash also serves the following other connec¬
tions at Kansas City to and from St. Louis and connec¬
tions at St. Louis, viz., the Missouri-Kansas-Texas,
Missouri Pacific, St. Louis-San Francisco. The value
of these connections is shown by a statement which I ask
leave to file as Wabash Schedule 2.
The Wabash loads daily merchandise cars in con¬
nection with the Santa Fe and Union Pacific amounting
at the present to over 300 cars of this class of freight
per month, and which is materially increasing at the
present time. It is furnishing both ample and ade¬
quate service between all points on and reached via both
the Union Pacific and the Santa Fe. In this connection
I offer a further statement marked Wabash Schedule 3.
The Wabash connection into St. Louis is just as
important a factor to the A. T. & S. F. as to the Union
Pacific. If the Union Pacific were to take over the
Wabash west of the River, it would undoubtedly result
in the Santa Fe's having to find another outlet for its
St. Louis traffic, thus depriving the Wabash System
of revenue and furnishing less service to the public.
The dismemberment of this Line, which has fur¬
nished a continuous through service to the public since
the early days of railroading between Buffalo and East
thereof, Great Lakes Cities, States of Michigan, Ohio
and Illinois, Chicago, 111., and many other important
cities East of the Mississippi River, such as Fort Wayne,
Danville and Decatur and the territory west of the
Mississippi River, including the State of Missouri,
would seriously injure the public and would not offer a
43
single offsetting advantage. In this connection I ask
leave to file a statement marked Wabash Exhibit 4.
There is more freight handled to and from any one
of these States east of the Mississippi River through
the Hannibal gateway than could possibly be handled
by the Union Pacific to St. Louis or through the St.
Louis gateway.
With regard to the suggestion that the Wabash
lines east of the River be consolidated with the Erie Sys¬
tem:
The only possible advantage to the Erie that would
result from this consolidation would be to give that
Line entry into St. Louis. The Erie today has two Lines
which handle its traffic to St. Louis, the Wabash from
Huntington, Indiana, and the Toledo, St. Louis & West¬
ern from Ohio City, Ohio. The volume of traffic han¬
dled by the Erie into St. Louis over both of these Lines
is so small that it does not need to be considered. The
percentage of traffic that the Erie is handling into St.
Louis or is likely ever to handle into St. Louis will not
equal five per cent, of the traffic handled by the Wabash
through the Hannibal gateway from its eastern to its
western terminus. This is shown by a statement which
I ask leave to file as Wabash Schedule 5.
0. (By Prof. Ripley) : How do you venture to pre¬
dict the Erie would never handle very much business
into St. Louis if it got a connection in there? Wouldn't
it have as good a chance as anybody else ?
A. It had that chance in the past, if it wanted to
exercise it.
44
Q. But it was only through another connection,
wasn't it?
A. Yes; but we urged them to give us business.
Under the present method the Erie and other Eastern
Lines are given a direct route via the Wabash to the
Missouri River and, through the Missouri River con¬
nections, to the entire West and Southwest, which would
be broken if the Wabash were to be dismembered as
suggested.
I would like further to say that if consolidation
came in as along plan No. 4, and the Wabash had any¬
thing to say about that, we would still be willing to give
the Erie system, or whatever system it was in, an
opportunity to get into St. Louis without the disturb¬
ance of the whole Wabash system.
Further, the Wabash is the only Line at St. Louis
that is both an Eastern and a Western Line and able
to handle traffic over its own rails through St. Louis
between points east of the Mississippi and points west
thereof. If the line east of the river were to be given
to the Erie or any other carrier and the line west, to the
Union Pacific or any other carrier, it would mean that
all traffic handled over this line would have to be deliv¬
ered to a Terminal Line for transfer to railroads on
the east side of the River and the trains made up a
second time, all of which is detrimental to efficient and
economical operation and would result in injury to the
public by reason of retarded service.
Of course, there is the possibility that those lines
45
might interchange at Hannibal. If we look at what
has happened in the past where changes of this kind
have occurred, we would not reasonably expect that the
interchange would be continued through the Hannibal
gateway. The lines owning would carry it through
to the end of their line by reason of the proportion of
the through rate making it more economical for them
to do so, and also that they did not have to break up
their trains en route with the extra switching which
would be involved.
Q. (By Prof. Ripley) : But if that stuff was coming
from beyond Council Bluffs, instead of having an inter¬
change at Council Bluffs with the Wabash and another
one at Buffalo, if it were going on to the Atlantic sea¬
board it would come to one point, namely, the Missis¬
sippi River, and there would be one interchange instead
of two if the stuff was going away through to the
Atlantic Seaboard, wouldn't there?
A. The probabilities are that the rates would so
divide that it would be to their interest to carry it
through to Chicago. That is the belief of our people.
That has been the general practice in the past. You
will find that as lines have been absorbed by other sys¬
tems gateways or interchange points previously exist¬
ing have in a large measure tended to dry up and new
ones be formed.
It has also been suggested that the Wabash should
relinquish its contract with the Grand Trunk covering
46
the use of the latter's line from Windsor to the Niagara
Frontier.
I would like to say in connection with that contract
that we feel that it is more favorable than owning a line
from Detroit through to Buffalo. It means a less
charge on the traffic which we handle.
They have committed themselves, at our request, at
any time in the future to reduce the ruling grade east-
bound to .5, and westbound to not over 1 per cent., and
have also committed themselves to double track in the
future at any time at our request.
So, as the traffic develops we are in position to
fully meet the necessities through that situation.
The distance from Chicago to New York via the
various routes is as follows :
Wabash—D. L. & W., via Buffalo 899.2 miles
Wabash—Lehigh Valley, Buffalo 950.8
Pennsylvania 908.2
N. Y. C. & St. L.—D. L. & W„ via Buffalo 919.0 "
N. Y. C. & St. L.—Lehigh Valley, Buffalo 970.7 "
Michigan Central—New York Central,
via Buffalo 978.93 "
New York Central 978.7
Erie 998.5 "
B. &0 1045.8 "
I think it is of interest to note that the Wabash-
Lackawanna makes the shortest line between New
York and Chicago. The Lehigh Valley is longer.
4-7
However, it is sufficient to meet competition, and it
gives entrance into Philadelphia, which the Lacka¬
wanna does not.
The traffic from Chicago to Trunk Line and New
England territories is divided between the Baltimore &
Ohio, New York Central, Michigan Central, Grand
Trunk, Erie, Pennsylvania, Nickle Plate and Wabash,
the Wabash handling about one-twelfth.
Transportation facilities between Chicago and the
East are not adequate.
It is against the public's interest to take away any of
the existing routes, and such a short-line route as the
Wabash-D. L. & W. or Wabash-Lehigh Valley should
be strengthened.
The Wabash is a very important factor in handling
traffic between Chicago and through its Chicago con¬
nections, the territory west and northwest thereof, and
Trunk Line and New England territories, through its
connection with the Lackawanna and Lehigh Valley
and the fan-like distribution from Buffalo. In this
connection I offer and ask leave to file with the Com¬
mission a statement marked Wabash Schedule No. 6.
I should just like to pause for a moment to bring
out this thought. The Wabash came out of the hands
of receivers in 1915. It started to make rapid strides
in strengthening its financial situation when the war
intervened, and the government operated the railroad
48
for two years. A substantial part of our traffic was
diverted. We have now gotten it back to the line.
We took 3,800 cars from the United States Rail¬
road Administration, steel under-frame cars. Since
that time we have acquired 4,300 steel under-frame
cars. Since the receivership we have bought 25 Santa
Fe type locomotives, 20 light Mikados. We now have
on contract 50 new locomotives, 20 switchers, 52,000
pounds tractive power, and 30 heavy Mikado locomo¬
tives. We have had a substantial change in our traffic
conditions with the development of the automobile busi¬
ness at Detroit and Toledo and South Bend, with the
acquisition of the New Jersey, Indiana & Illinois
Railroad going into South Bend, and in connection with
the Studebaker plant with the additional facilities which
we have been able to offer, and to-day we are a very
strong factor in handling the automobile traffic.
In addition to that, with some other lines we have
gone into building a belt line at Fort Wayne. The
International Harvester Company is putting up a large
plant, and there will be stockyards, an elevator, and
other industries on that line.
The Toledo Belt has promised that as soon as cer¬
tain litigation is out of the way they will admit us to
membership in that belt.
The Neidringhaus plant, a large coke plant and
furnace at St. Louis, has been constructed. We get
entrance through the Terminal Railroad Association,
and have private right of way, and are building a con-
49
nection of our own. We handle the iron ore going
into that industry, and expect to handle a substantial
volume of other traffic in connection with it.
We have enlarged the elevator at Kansas City and
would have increased its capacity beyond what it is to¬
day except for our difficulty in acquiring the land. We
have those negotiations under way, and when completed
those elevator facilities will be materially increased.
We contemplate erecting one or possibly two ele¬
vators at the Mississippi gateway.
In addition to that, we contemplate elevator develop¬
ment at Chicago, all of which will materially conserve
car supply.
I also want to say that we went in at Detroit and
bought sufficient land for a large development. We
have gone to Decatur, 111., and protected ourselves
there, and at Chicago we have bought terminal prop¬
erty to take care of ourselves there. We have in East
St. Louis bought all the land available for yard develop¬
ment there. We have had negotiations under way at
Kansas City for some three years looking to the acquisi¬
tion of a very large acreage there, and unless we con¬
clude negotiations we will condemn. So, we are going
to have the property, and are conducting our negotia¬
tions to protect our terminals.
Now, with that change in the situation the Wabash
of to-day is materially different than the Wabash of the
past, and it is something we ought always to keep in
mind. It is our confident belief that at the present
50
time the earnings for the current year will be sufficient
to show a return of approximately 8 per cent, on the
preferred "A" stock, that being entitled to a return of
5 per cent., thus leaving about 3 per cent, for the
common.
I am bringing out the fact that the traffic we
handled for the first four months is in excess of traffic
we ever handled before for the first four months of
any previous year. Our net income for the period over
fixed charges is about $1,100,000 more than for the
same period of last year.
St. Louis to the Seaboard: The Wabash handles
over 20% of the freight traffic from St. Louis into
Trunk Line and New England territories—more than
any other railroad, which is evidence that the people
find great advantage in the use of the Wabash and its
principal connections, the Lehigh Valley and D. L. &
W., as well as the Erie and other connections, and they
should not be deprived of such service, either by can¬
cellation of the contract or by control of the Wabash
St. Louis line by the Erie, which Road, as stated, now
has all the outlet into St. Louis that is necessary, through
Huntington. In this connection I offer and ask leave
to file with the Commission a statement marked Wa¬
bash Schedule No. 7.
I have here a statement of eastbound tonnage from
St. Louis, for the years 1905 to 1917, inclusive, to
trunk line and New England territories.
Commissioner Hall: If there is no objection it is
admitted as exhibit No. 509.
51
Detroit to the Seaboard: The mileage via the various
routes is as follows:
Detroit has developed until it is now the fourth city of
the United States. It is growing very fast and seeking
additional transportation facilities. There is a great
volume of traffic to and from the Atlantic Seaboard.
Why deprive Detroit of the shortest and most direct
route by cancellation of this contract?
There are large industries on the Wabash at Detroit
to and from which the traffic is moved quickly to and
from Eastern territory by the Wabash. Cancellation of
the Grand Trunk contract would mean that this traffic
must be switched around the City, and as the terminals
there are already congested, these large industries
would be placed at a great disadvantage and their prop¬
erty materially depreciated.
Furthermore, the cancellation of the Wabash con¬
tract with the Grand Trunk, breaking up of the Wabash
route through Canada, would force a greater inter¬
change with other Roads at Detroit and add to the con¬
gestion that already exists. I will say that we are
having considerable difficulty at Detroit in getting other
Wabash-D. L. & W., via Buffalo. . ..
Wabash-Lehigh Valley, Buffalo....
Michigan Central-New York Central
Pennsylvania
New York Central
627.1 miles
678.7 "
690.4 "
760.7 "
792.7 "
52
lines to accept freight from us promptly in interchange
service,—I mean in switching service. At times the
delay is quite serious.
During the period of Federal control the Direc¬
tor General of Railroads very seriously considered and,
in fact, ordered that the contract herein referred to
should be cancelled. However, after it was pointed out
to him that serious congestions existed on the lines of
all of the carriers east from Chicago and St. Louis;
that they were unable to handle the traffic offered or, in
fact, even to receive it, and that this line was only used
by the Grand Trunk to the extent of, on one part 10%
and on only a short piece of its line 20%, leaving 90%
on the greater part of the line unused and 80% on the
shorter part of the line unused, to all of which the
Wabash, through this contract, had the right of use,
thereby enabling it to that extent to assist in the trans¬
portation of traffic from the West to the Seaboard, the
Director General ordered that the contract be continued
during the entire period of Federal control. This in
itself shows the value of this piece of line as a transpor¬
tation factor.
I want again to emphasize that in all of the proposed
consolidation schemes that have so far been suggested
it is proposed to make Chicago the principal terminus
of all of the Western Lines and practically all of the
Southwestern Lines. This can only result in serious
53
congestions. The Chicago gateway during certain sea¬
sons of the year, under present conditions is seriously
congested. The addition of the traffic of all of the West¬
ern Lines, some of which is now moving through other
gateways and which naturally, through consolidations,
would be moved over their own lines to Chicago, would
result, in my opinion, in a condition of almost continuous
congestion.
In this connection I quote the following extract from
Mr. Wilbur LaRoe's letter to the Hon. George W.
Anderson, dated March 22nd, 1923:
"Ill-informed persons think that it is wasteful
to have more than one rail route between New York
and Chicago but the truth is that all the routes that
exist were barely able, even under Federal control,
to handle the traffic offered."
The value, therefore, of a through line whose traffic
does not have to pass through any congested gateway—
either Chicago or St. Louis—is apparent; and the
Wabash is the only Line which by reason of its loca¬
tion can avoid these congested centers. If the object of
the proposed consolidations is to improve transporta¬
tion efficiency and produce service to the public, how
can this better be accomplished than through a single,
continuous line which by reason of its geographical lo¬
cation avoids the congested centers in the Middle West?
The Wabash-Grand Trunk contract provides an in-
54
tegral part of this important through route and should,
therefore, be maintained.
If any consolidations are to be made, of which the
Wabash is to be a part, I suggest that the combination
of roads should comprise :
1. Wabash,
2. Delaware, Lackawanna & Western,
3. Wheeling & Lake Erie, including the Lorain
& West Virginia, the Pittsburgh & West Vir¬
ginia and the West Side Belt,
4- Buffalo, Rochester & Pittsburgh,
5. Delaware & Hudson,
6. Bessemer & Lake Erie,
7. Western Maryland, and
8. Boston and Maine or an arrangement of equal¬
ity with other systems for New England traffic.
Q. (By Prof. Ripley) : Mr. Williams, before you
go into that, do you consider or have you considered in
connection with this what you would do with the re¬
maining mileage?
A. Of the country?
Q. Of the Trunk Line territory.
A. Of the Trunk Line territory?
Q. Yes.
A. No, sir; I have not.
Q. You recognize that is a problem which imposes
itself upon the Commission, do you not?
55
A. I do. That is why I undertook to make the
general statement of what I felt was the underlying
trouble with the railroads of the United States to-day,
and what should be met in whatever is done in the
future as to the railroads. In other words, the real
problem of to-day is to give service. And I am block¬
ing out here a suggestion which I believe will avoid
many of the places of congestion in the handling of
through traffic. That is what I was undertaking to do
in this.
Q. But you recognize the Commission has not only
got to do this, but then consider what it shall do with
the rest of the mileage which is left over ?
A. I quite well appreciate that, and I do not expect
they will adopt my views 100 per cent., but I was offer¬
ing this as an alternative suggestion, and while I felt
it had merits, I quite well realized, for example, we
have the New York Central and the Pennsylvania to
contend with.
Q. And the Erie?
A. The Erie is a different proposition. But I mean
so far as the New York Central and the Pennsylvania
being two systems which, as has been stated, should
stand by themselves. I have not understood it is in¬
tended to dismember them.
Now, if you are going to try to meet this situation,
I do not believe if you take all the rest of the lines—
56
it is doubtful if you take all the rest of the lines and
put them together you would be able to equal the New
York Central and Pennsylvania at the moment in
earnings. And if you say you are going to try to make
the earnings the same, and you are going to leave these
two big systems where they are, you have a big job on
your hands. Now, with those and without the Erie I
haven't got a system equal to the New York Central,
and yet I am doing the best I can under the circum¬
stances, and if I cannot, with what is left for me to
choose from, equal the New York Central, I do not
see where I am going to meet that situation by including
the Erie.
O. But you recognize somebody's obligation to see
that those who are left should not be too far behind the
New York Central, the Pennsylvania and your own?
A. Yes. I have pointed that out in this, I wanted
to go a little further too. It has been suggested, for
example, that if you go to work and take one road from
New York to Chicago and let it charge freight rates,
let us say, 5 or 10 per cent, lower than another, it would
get enough business to paralyze the other. Now, you
have two big systems here, and if you are trying to
equalize things, then why not let these two big systems
carry some of the load. I have not seen where the
strong systems have been asked to carry the load of the
57
Erie. I cannot feel the New York Central and the
Pennsylvania are doing their part in carrying the Erie.
Commissioner Hall: I think you have made
your situation plain. Now, will you proceed to
expound your proposed combination.
This combination of roads is suggested from the
standpoint—
First: Of regular and satisfactory service by a
transportation route so constituted lineally as to pre¬
serve system competition without disturbance of estab¬
lished routes or channels of trade and with only such
new construction as lends itself to directness of route,
development of resources and avoidance of congested
gateways ;
Second : Of opening an additional and much needed
channel of trade between the great industrial centers
tributary to the Wheeling & Lake Erie, Pittsburgh &
West Virginia and Bessemer & Lake Erie and the
Atlantic Seaboard, Trunk Line and New England ter¬
ritories; and
Third: Of improving the transportation outlet in
both directions for traffic between (1) New England,
Canada, Trunk Line territory, Detroit, Pittsburgh, the
industrial centers of Ohio and West Virginia on the
east, and (2) Chicago and the northwest, (3) St.
58
Louis and the southwest, (4) Missouri River points
and (5) the entire territory west of the Mississippi
River to the Pacific Coast.
The proposed system comprises a total mileage of a
little over 6,000 miles and forms a transportation route
between the great primary markets and packing houses
and milling centers on the Missouri River, the entire
territory west of the Mississippi River to the Pacific
Coast and Trunk Line territory, Eastern Canada, New
England and the Great Lakes.
It operates through Hannibal and avoids as a
through route the congested gateways at Chicago and
St. Louis.
It continues an existing competitive short route be¬
tween the points above mentioned and opens a much
needed route between industrial centers in Ohio, West
Virginia, the Pittsburgh district and Trunk Line, New
England, Canada and Atlantic Seaboard territory.
As to the Wabash and Lackawanna: The proposed
combination will give these roads natural outlets for
their traffic east and west and will strengthen the pres¬
ently established trend of traffic without requiring
change in existing industrial conditions.
As to the Wheeling & Lake Erie, Pittsburgh &
West Virginia, and Buffalo, Rochester & Pittsburgh:
The proposed new route will create a much needed ad-
59
ditional through route between the industrial centers
served by the Pittsburgh & West Virginia and the
Wheeling & Lake Erie in Pennsylvania, Ohio and West
Virginia and the Atlantic Seaboard, and will relieve
congestion at both the Pittsburgh and Buffalo gate¬
ways. It will also provide a much better route than
at present exists for bituminous coal from mines on the
Pittsburgh & West Virginia and West Side Belt into
Canada The Buffalo, Rochester & Pittsburgh enters
the Pittsburgh and Newcastle districts and will afford
a natural and valuable connection with the Lacka¬
wanna and the Delaware & Hudson between these steel
producing centers, the Atlantic Seaboard, Trunk Line
and New England territory.
As to the Delaware & Hudson: The New York
Central has practically closed the West Shore route to
other than their own system lines. This has resulted
in a material increase in the traffic through Canada.
The transportation route created by the proposed com¬
bination would enable the handling of a large volume
of traffic now diverted to the Canadian lines.
As to the Western Maryland: The inclusion of this
property will create a direct short route to an impor¬
tant additional seaport, free from the congested condi¬
tions prevailing at the ports of New York and Phila¬
delphia, and offering exceptional terminal and elevator
facilities for the handling of coal and grain. The con-
60
struction of a line from Connellsville, on the Western
Maryland, to Wheeling, on the Wheeling & Lake Erie,
will provide for the development of a virgin territory
rich in natural resources and establish a direct and
efficient short route to and from the Lake ports on the
west and the Atlantic Seaboard avoiding for overhead
business the congested Pittsburgh gateway. The con¬
struction of a connection from the Western Maryland
at Rockwood, Pa., to the Buffalo, Rochester & Pitts¬
burgh at Johnstown, Pa., would establish a new north
and south route of great value as a channel of trade or
outlet for the ex-Lake grain business from Buffalo to
Baltimore.
As to the Boston & Maine: In order to provide
proper access to New England territory and a com¬
petitive outlet for traffic by means of the proposed route,
a suitable ownership should be reserved to it through
control of the Boston & Maine, or some equitable
arrangement made for equality of participation in all
New England business.
61
WABASH SCHEDULE 1.
STATEMENT OF TONNAGE HANDLED FOR THE YEAR 1922 BY
WABASH RAILWAY CO. BETWEEN
ST. LOUIS
and
LEXINGTON JUNCTION
KANSAS CITY
COUNCIL BLUFFS
Eastbound
,—Originating on Wabash—, Received from Connections-^
From To St. Louis Beyond St. Louis To St. Louis Beyond St. Louis
Kansas City 59,003 1,143 126,097 4,872
Lexington Junction 1,487 25 63,852 1,931
Council Bluffs 11,088 860 35,202 1,769
Total 71,578 2,028 225,151 8,572
Westbound
^Originating on Wabash-^ Received from Connections-^
To At St. Louis At St. Louis
Kansas City 22,100 51,196 536 2,589
Lexington Junction 52 34,962 136 385
Council Bluffs 12,173 17,552 53 706
Total 34,325 *103,710 725 *3,680
* Destinations beyond Kansas City, Lexington Junction and Council Bluffs.
Wabasb Schedules Nos. 1 to 7 inclusive were admitted as "Wabash Exhibit No. 510".
62
WABASH SCHEDULE 2.
WABASH RAILWAY COMPANY
STATEMENT SHOWING TONS AND PRINCIPAL COMMODITIES
INTERCHANGED WITH CONNECTIONS FOR THE YEAR 1922
Commodities
Cotton, Oil, Lumber,
Mill Products
Tons
Received
39,769
Roads
MK&T
Lumber, Oil, Fruit,
Bituminous Coal,
Sand, Cotton, Dairy,
Melons, Stone 664,014
Mo. Pac.
Tons
Delivered
80,344
226,916
Cotton, Lumber, Oil.. 186,602 STL&SF 114,252
Commodities
Vehicles, Fruit,
Bituminous Coal,
Iron Pipe.
Brick, Bituminous
Coal, Fruit, Iron
Pipe, V ehicles, Grain.
Bituminous Coal,
Grain, Fruit, Brick,
Iron Pipe, Vehicles.
63
WABASH SCHEDULE 3.
MERCHANDISE CARS
FBOM
ST. LOUIS
TO
AT&SF AND UNION PACIFIC
VIA WABASH RAILWAY COMPANY
YEAR 1922
Month
January
February
March
April
May
June
July
August
September
October
November
December
Total
Average Per Month.
AT&SF
Union Pacific
Cars
Cars
160
121
160
155
182
193
175
205
180
167
186
182
181
164
174
138
151
116
165
129
180
127
170
136
2,064
1,833
172
153
64
WABASH SCHEDULE 4.
STATEMENT OF TONNAGE EAST AND WESTBOUND
VIA WABASH RAILWAY COMPANY
to and from
POINTS WEST OF MOBERLY, MO. MOVING VIA HANNIBAL. MO.
YEAR 1922
Westbound Traffic
To Missouri To Iowa To Nebraska Total
State From Tons Tons Tons Tons
Niagara Frontier:
International Bridge 22,332 1,233 849 24,434
Suspension Bridge 10,937 1,482 811 13,230
Michigan 65,632 16,555 14,488 96,675
Ohio 24,060 2,197 1,180 27,437
Indiana 29,181 3.549 1.140 33,870
Illinois 420,503 27,572 4,677 452,752
Total Tons 572,645 52,608 23,145 648,398
Niagara Frontier:
International Bridge
Suspension Bridge..
Michigan
Ohio
Indiana
Illinois
Total Tons—
Eastbound
Traffic
From Missouri
From Iowa
Tons
Tons
45,166
8,652
40,045
6,497
39,630
4,461
42,414
3,377
74,054
5,682
369,493
50,280
610.802
78,949
From Nebraska
Total
Tons
Tons
1,331
55,149
2,072
48,614
64
44,155
671
46,462
1.405
81,141
13,309
433,082
18,852
708,603
TONNAGE FROM OR TO ILLINOIS FROM OR TO POINTS IN IOWA
AND NEBRASKA. MOVING VIA ST. LOUIS
Iowa Nebraska Total
Westbound to 92,163 86,934 1/9,097
Eastbound from 89,756 14,715 104,471
To St. Louis from the East 706,583
From " to " " 289,000
65
WABASH SCHEDULE 5.
WABASH RAILWAY COMPANY
STATEMENT OF TONNAGE HANDLED
YEAR 1922
Tons
Total Tonnage handled thru Hannibal Gateway 1,357,001
Total Tonnage handled into E. St. Louis, and St Louis received from
Erie Railroad 44,152
Per Cent of Total 3.2%
66
WABASH SCHEDULE 6.
STATEMENT OF TONNAGE BETWEEN CHICAGO AND CONNECTIONS
AND
DESTINATIONS BEYOND NIAGARA FRONTIER
VIA WABASH RAILWAY COMPANY
YEAR 1922
East Bound West Bound
Tons Tons
Via International Bridge 140,596 113,584
Via Suspension Bridge 227,666 141,758
Total 368,262 255,342
67
WABASH SCHEDULE 7.
STATEMENT SHOWING
EASTBOUND TONNAGE VIA ALL ROADS FROM ST. LOUIS
AND E. ST. LOUIS
EASTBOUND TONNAGE VIA THE WABASH RAILWAY
WABASH PERCENTAGE OF TOTAL
1905 to 1917 Inclusive
Wabash Percent-
Via all Roads Wabash age ol total
Tons Tons %
1905 917,327 217,071 23.7
1906 958,981 216,737 22.6
1907 1,080,996 221,250 20.5
1908 1,043,586 196,842 19.9
1909 1,143,952 206,735 18.1
1910 1,100,577 215,060 19.5
1911 1,088,711 219,694 20.2
1912 1,264,873 229,359 18.1
1913 1,178,702 221,303 18.8
1914 1,254,498 236,509 18.8
1915 1,770,028 303,664 17.2
1916 2,265,823 383,954 16.9
1917 2,668,961 454,876 17.0
Excludes dairy freight (butter, eggs, cheese and live poultry, since 1911).
Wabash has always been first, second or third in handling traffic.
g "WABASH EXHIBIT NO. 509 WITNESS WILLIAMS."
STATEMENT OF EASTBOUND TONNAGE FROM ST. LOUIS FOR YEARS 1905 TO 1917, INCLUSIVE,
TO TRUNK LINE AND NEW ENGLAND TERRITORIES.
1905 1906 1907 1908 1909 1910 1911
A _ A * , A A A , . A
r
Tons
%
Tons
%
Tons
%
Tons
. x
%
Tons
%
Tons
%
Tons
%
B. & O
85 269
9.3
93 223
9.7
96 063
8.9
91 382
8.8
107 893
9.4
116 508
10.6
124
362
11.4
CCC&StL...
127 396
13.9
157 890
16.5
177 274
16.4
198 420
19.0
261 381
22.9
243 740
22.1
232
954
21.4
Bonn
151 089
16.5
179 385
18.7
230 393
21.3
235 825
22.6
252 672
22.1
257 346
23.4
252
595
23.2
Wabash ...
217 071
23.7
216 737
22.6
221 251
20.5
196 842
18.9
206 734
18.1
215 060
19.5
219
694
20.2
Sou. Ry.. . .
LII&StL...
68 140
7.4
76 111
7.9
74 295
6.9
43 357
4.1
49 261
4.3
51 838
4.7
46
444
4.3
14 147
1.5
42 550
4.4
47 891
4.4
17 665
1.7
18 453
1.6
12 014
1.1
10
535
1.0
Total ....
663 112
72.3
765 896
79.8
847 167
78.4
783 491
75.1
896 394
78.4
896 506
81.4
886
584
81.5
C. & A....
163 795
17.8
134 681
14.1
181 316
16.8
154 712
14.8
119 252
10.4
80 946
7.4
79
602
7.3
C&EI
24 999
2.7
14 996
1.6
18 356
1.7
38 987
3.7
49 218
4.3
52 685
4.8
63
132
5.8
Cl'&StL....
57 378
6.3
36 521
3.8
28 701
2.6
63 547
6.1
64 952
5.7
57 071
5.2
42
526
3.9
I. C
8 043
.9
6 887
.7
5 456
0.5
2 849
0.3
14 136
1.2
13 369
1.2
16
867
1.5
Total
254 215
27.7
193 085
20.2
233 829
21.6
260 095
24.9
247 558
21.6
204 071
18.6
202
127
}8.5
Gr. Total.
917 327
100.0
958 981
100.0
1 080 996
100.0
1 043 586
100.0
1 143 952
100.0
1 100 577
100.0
1 088
711
100.0
1912
1913
A
1914
A
1915
1916
1917
A
Tons
%
Tons
%
Tons
%
Tons
%
Tons
%
Tons
%
B. & O
159 526
12.6
157 489
13.4
160 667
12.8
233 989
13.2
358 321
15.8
484 362
18.2
CCC&Stlv...
288 970
22.9
240 289
20.4
212031
16.9
328 734
18.6
436 954
19.3
401 892
15.1
Penn
314 441
24.9
285 314
24.2
306 718
24.4
399 681
22.6
560 965
24.8
673 708
25.2
Wabash....
229 359
18.1
221 303
18.8
236 509
18.9
303 664
17.2
383 954
16.9
454 876
17.0
Sou. Ry....
67 495
5.3
59 417
5.0
101 370
8.1
163 630
9.2
125 648
5.5
165 252
6.2
LH&StL...
6 978
0.6
11 046
0.9
11 770
0.9
30 713
1.7
28 796
1.3
20 526
0.8
Total...
1 066 769
84.4
974 858
82.7
1 029 065
82.0
1 460 411
82.5
1 894 638
83.6
2 200 616
82.5
C. & A....
78 124
6.2
95 321
8.1
115 255
9.2
136 622
7.7
151 092
6.7
123 243
4.6
C&EI
66 674
5.3
64 217
5.4
50 248
4.0
107 252
6.1
148 650
6.6
213 998
8.0
CP&StL-...
35 659
2.8
23 354
2.0
39 736
3.2
33 044
1.9
38 527
1.7
85 711
3.2
I. C
17 047
1.3
20 952
1.8
20 194
1.6
32 699
1.8
32 916
1.4
45 393
1.7
Total
197 504
15.6
203 844
17.3
225 433
18.0
309 617
17.5
371 185
16.4
468 345
17.5
Gr. Total
1 264 273
100.0
1 178 702
100.0
1 254 498
100.0
1 770 028
100.0
2 265 823
100.0
2 668 961
100.0