Cs-'
BEFORE THE INTERSTATE COMMERCE COMMISSION.
IN THE MATTER
OF
DIVISION OF JOINT RATES AND
OTHER ALLOWANCES TO
TERMINAL RAILROADS.
Hearing at Chicago, May 6, 1904.
WASHINGTON:
GOVERNMENT PRINTING OFFICE
1905.
BEFORE THE INTERSTATE COMMERCE COMMISSION.
IN THE MATTER
OF
DIVISION OF JOINT RATES AND
OTHER ALLOWANCES TO
TERMINAL RAILROADS.
Hearing at Chicago, May 6, 1904.
WASHINGTON:
GOVERNMENT PRINTING OFFICE.
1905.
INDEX TO WITNESSES.
Page.
Banks, A. F_ .. . 39,79
Barr, W. B 64
Bentley, Frank T 52
Boyd, E. B 96
Bradford, C.T.. 19
Hamblin, W. B •_ 86
Hiland, J. H. 81
Hilgard, E. F 24
Howe, Richard F 22
Huckin, A. G-.. 25
Hughitt, Marvin, jr 92
Johnson, Burton 93
Jones, O. G 29
Keepers, W.E 90
Lingo, C. L 60
Man ter, F. H 65
Montgomery, F.B 4,34,59
Raymond. F. D 48
Scott, R. L 54
Vincent, W. W 51
Warner, J. M.._ 63
Waite, J. J 35
Weed, W. S 62
Wight, O.S... 71
Zimmerman, F ¿0
3
BEFORE THE INTERSTATE COMMERCE COMMISSION.
IN THE MATTER OF DIVISIONS OF JOINT RATES AND OTHER
ALLOWANCES TO TERMINAL RAILROADS.
Chicago, III., May 6, 7904—10 a. m.
Present: Commissioners Yeomans, Prouty, and Fi fer.
Appearances : J. T. Marchand for the Commission, K. K. Knapp,
W. J. Calhoun.
Commissioner Yeomans. The Commission is here to take testimony
in the matter of the division of joint rates and other allowances tc
terminal railroads. Mr. Marchand will take charge of the investi¬
gation. . Are you ready to proceed. Mr. Marchand?
Mr. Marchand. Yes, sir.
F. B. Montgomery, having been duly sworn, testified as follows :
Mr. Marchand. Ali at is your place of residence?
Mr. Montgomery. Chicago.
Mr. Marchand. "What official position have you with the Illinois
Northern Railroad ?
Mr. Montgomery. I am second vice-president and general man¬
ager.
Mr. Marchand. How long have you held that position ?
Mr. Montgomery. I have been general manager and second vice-
president of it since the incorporation of the railroad.
Mr. Marchand. When was it incorporated?
Mr. Montgomery. April, 1901.
Mr. Marchand. Under the laws of what State ?
Mr. Montgomery. Illinois.
Mr. Marchand. Prior to your present position you were where ?
Mr. Montgomery. I had charge of the traffic department of the
McCormick Harvesting Machine Company.
Mr. Marchand. That was prior to the formation of the Interna¬
tional Harvester Company ?
Mr. Montgomery. Yes, sir.
Mr. Marchand. And prior to your connection with the McCormick
Harvesting Machine Company you were with the Santa Fe road?
Mr. Montgomery. Yes, sir; I had charge of the Atchison's freight
business in Kansas City, Mo.
Mr. Marchand. Mr. Montgomery, state to the Commission what
the termini are of the Illinois Northern Railroad?
i
5
Mr. Montgomery. The Illinois Northern Railway starts at a point
011 Hoyne avenue and extends to Forty-ninth street and Central Park
avenue, but has trackage rights from the C. U. T. Company to, I
should say. Seventy-fifth street; I don't know exactly. The C. U. T.
Company is known as the Stickney track. In addition we have a
great many side tracks, switch yards, and industrial tracks.
Mr. Marchand. The southern terminus, then, of the Illinois North¬
ern is about Twenty-sixth street, is it not ?
Mr. Montgomery. No; I should say that would be the northern
terminus. We consider that our trackage rights over the C. U. T. end
at about Seventy-fifth street, or the Stickney yard.
Mr. Marchand. Now, what mileage does the Illinois Northern ab¬
solutely own?
Mr. Montgomery. The Illinois Northern Railway of itself does
nôt own very much mileage. Its entire mileage is under leaseholds
and trackage rights, practically.
Mr. Marchand. What distance, Mr. Montgomery, is it from
Twenty-sixth street, or the McCormick Harvester and Twine Works,
to Forty-ninth street?
Mr. Montgomery. It is in the neighborhood of 51 miles.
Mr. Marchand. Is that single or double track?
Mr. Montgomery. Double part of the way and single the balance ;
it is double track for probably half a mile from Twenty-sixth street.
Mr. Marchand. From whom did you acquire that?
Mr. Montgomery. From the Sante Fe Railroad.
Mr. Marchand. Did you acquire any portion of it from the Grand
Trunk ?
Mr. Montgomery. It was formerly owned by the Grand Trunk
and purchased by the Santa Fe, the Grand Trunk reserving rights
over it, and we leased it from the Santa Fe.
Mr. Marchand. "What were the terms of the lease ?
Mr. Montgomery. The terms are varied. I will be glad to submit
to the Commission a copy of the lease if it. is desired.
Mr. Marchand. The lease contains the consideration, of course? '
Mr. Montgomery. Yes, sir.
Mr. Marchand. Do you recall whether under the terms of the
lease there is an arrangement for so much per car for switching?
Mr. Montgomery. Yes, sir; there is such an arrangement.
Mr. Marchand. Now, how much is that? Do you recall ?
Mr. Montgomery., My recollection is it is $1 a car. That is for
the simple reason that it would be unsafe for two or more railroads to
operate over that piece of track.
Mr. Marchand. Have you a percentage division in with the Santa
Fe road?
Mr. Montgomery. Yes, sir; we have.
Mr. Marchand. Of how much?
Mr. Montgomery. Twenty per cent of the rate, with the Missouri
River rate as the maximum.
Mr. Marchand. That is in addition to the $1 per car?
Mr. Montgomery. There is no switching charge when the percent¬
age applies. We waybill the freight through to destination without
any other charge than our percentage.
Mr. Marchand. Where does the Sante Fe connect with the Illinois
Southern ?
6
Mr. Montgomery. They connect at their Corwith yards. You can
see on the map there about where the Santa Fe tracks are [indicat¬
ing], We deliver the freight into their Corwith yards.
Mr. Marchand. How far from the works of the McCormick
Harvester Company?
Mr. Montgomery. I should say 4 miles.
Mr. Marchand. You are first vice-president and general manager?
Mr. Montgomery. Second vice-president.
Mr. Marchand. Who is first vice-president ?
Mr. Montgomery. O. W. Jones.
Mr. Marchand. Does he hold a position with the International
Harvester Company?
Mr. Montgomery. He is general manager of the traffic department.
Mr. Marchand. Who is president of the Illinois Northern Rail¬
way ?
Mr. Montgomery. Mr. John C. Fetzer.
Mr. Marchand. What relation does he bear to the International
Harvester Company?
Mr. Montgomery. None whatever, so far as I know.
Mr. Marchand. What other ofiicers are there of the Illinois North¬
ern Railway ?
Mr. Montgomery. There is an auditor, general freight agent, and
secretary, and treasurer.
Mr. Marchand. Do they hold any official position with the Inter¬
national Harvester Company?
Mr. Montgomery. The secretary and treasurer; yes.
Mr. Marchand. What is his name[
Mr. Montgomery. The secretary is Mr. A. G. Huckin; the treas¬
urer. Mr. T. C. Bradford.
Mr. Marchand. Now. Mr. Montgomery, can you testify as to the
stock issue of the Illinois Northern Railway?
Mr. Montgomery. At this time, I think not.
Mr. Marchand. Are you a stockholder ?
Mr. Montgomery. I am.
Mr. Marchand. To what extent?
Mr. Montgomery. To the extent of 1,000 shares. The stock is car¬
ried in my name.
Mr. Marchand. Do you know how much stock is issued?
Mr. Montgomery. Five hundred thousand dollars' worth.
Mr. Marchand. Does the International Harvester Company own
any of that stock?
Mr. Montgomery. Not in its own name.
Mr. Marchand. In whose name?
Mr. Montgomery. In the names of a number of individuals.
Commissioner Prouty. Let us see just what the witness means
when he says stock is not held in its name. When was the Illinois
Northern organized?
Mr. Montgomery. April, 1901.
Commissioner Prouty. And there was $500,000 of stock issued at
that time?
Mr. Montgomery. Yes, sir.
Commissioner Prouty. Was the money paid in ?
Mr. Montgomery. Yes, sir.
7
Commissioner Prouty. At par?
Mr. Montgomery. At par.
Commissioner Prouty. Were the 1,000 shares of stock issued to
you at that time.
Mr. Montgomery. Yes, sir.
Commissioner Prouty. Did you pay for it at that time ?
Mr. Montgomery. I did.
Commissioner Prouty. With your own money or with money
furnished by sombody else ?
Mr. Montgomery. The money was furnished.
Commissioner Prouty. Furnished by whom?
Mr. Montgomery. By the McCormick Harvesting Machine Com¬
pany.
Commissioner Prouty. This was before the organization of the
International Harvester Company ?
Mr. Montgomery. Yes, sir.
Commissioner Prouty. To whom was the balance of the stock
issued at that time?
Mr. Montgomery. The stock was issued to Mr. John C. Fetzer,
Mr. G. A. Ranney, Mr. R. B. Swift, and Mr. E. A. Allen. Those are
the initials as near as I can remember them.
Commissioner Prouty. Was any of that stock paid for by the
individuals who took the stock out of their hands ?
Mr. Montgomery. No, sir.
Commissioner Prouty. They simply held it as trustees for the
McCormick Harvester Company at that time ?
Mr. Montgomery. Yes, sir.
Commissioner Fifer. Both concerns are then really owned by the
same men ?
Mr. Montgomery. I could not testify as to the ownership of the
Illinois Northern Railway at this time. I do not know.
Commissioner Fifer. Practically so?
Mr. Montgomery. I would not dare say that. The stock records
will show the ownership.
Commissioner Prouty. At that time, when you organized the
Illinois Northern Railroad, did you build any track?
Mr. Montgomery. Yes, sir. We built some track—not what you
would call main track, perhaps.
Commissioner Prouty. Your purpose in organizing this company
was to acquire these four or five miles from the Santa Fe?
Mr. Montgomery. No, sir.
Commissioner Prouty. You did acquire it at that time?
Mr. Montgomery. No, sir ; afterwards—not until August, 1902.
Commissioner Prouty. What was it proposed to do when you
organized the company? What road did you propose to build?
Mr. Montgomery. The purpose of the railroad company at its
incorporation was to facilitate the handling of the traffic of the Mc¬
Cormick Harvesting Machine Company.
Commissioner Prouty. At that time how was the traffic of the
McCormick Harvesting Machine Company handled ?
Mr. Montgomery. Within their own plant, by their own engines
and cars, around the plant, over their own tracks. We were dealing
with three railroads—the Chicago, Burlington and Quincy, the Santa
Fe, and the Chicago Junction railroads.
8
Commissioner Prouty. Those three railroads connected with your
tracks ?
Mr. Montgomery. Yes, sir; connected with the tracks.
Commissioner Prouty. And you made delivery over those lines to
all other lines ?
Mr. Montgomery. We made deliveries to those lines at that point,
and they delivered to other lines.
Commissioner Prouty. The Santa Fe and the Burlington we may
call trunk lines. The Chicago Junction Railroad is simply a belt
line, is it not ?
Mr. Montgomery. That is my understanding of it.
Commissioner Prouty. At that, time, previous to the organization
of this railroad, were you allowed any part of the rate for your serv¬
ice in delivering the cars to these different lines?
Mr. Montgomery. Prior to the incorporation ?
Commissioner Prouty. Yes, sir.
Mr. Montgomery. No, sir; Ï think not.
Commissioner Prouty. And whatever you got in the way of a
reduction from the published rate previous to that time came some
other way?
Mr. Montgomery. It probably did come some other way, if we got
anything.
Commissioner Prouty. You did, didn't you?
Mr. Montgomery. My memory is bad on that point. I want to
say this to the Commission, the Chicago Junction, the Santa Fe, and
the Chicago, Burlington and Quincy had their engines in these yards
and over these tracks daily, attempting to do the business, result¬
ing in
Commissioner Prouty. You mean, now, the tracks of the McCor-
mick Harvester Company?
Mr. Montgomery. Yes, sir; and their service was very unsatis¬
factory; their deliveries were irregular, and a very expensive trans¬
portation problem was the result.
Commissioner Prouty. Can you state about how much in trackage
the McCormick Company owned ?
Mr. Montgomery. Including all the trackage, I should say, with¬
out the actual figures, in the neighborhood of 17 or 18 miles.
Commissioner Prouty. That trackage was in and about their
works ?
Mr. Montgomery. All around in that neighborhood; yes, sir.
Commissioner Prouty. How many engines did that company own
at that time?
Mr. Montgomery. My recollection is two steam engines, and they
had several electric motors and compressed-air motors.
Commissioner Prouty. Did they own any cars ?
Mr. Montgomery. Yes, sir; a few flat cars—gondolas.
Commissioner Prouty. After the organization of the Illinois North¬
ern, was any arrangement made with the Illinois Northern by which
the Illinois Northern took over the operation of the McCormick
Company's tracks?
Mr. Montgomery. Yes, sir.
Commissioner Prouty. What was that arrangement?
Mr. Montgomery. A rental charge paid for the leasehold.
9
Commissioner Prouty. Your purpose in organizing the railroad
company was to put it under one management ?
Mr. Montgomery. We were dealing with three railroads, and in
order to facilitate the business and handle it in a proper method we
had to have a railroad to do it. because we were settling bills from
the railroads for damage to cars and all that sort of thing. The
Master Car Builders' rules were being recognized by it.
Commissioner Prouty. Going back to the time you organized the
Illinois Northern Railway, what was the first railroad you acquired?
What were the first tracks you acquired ?
Mr. Montgomery. The tracks inside the McCormick works.
Commissioner Prouty. And what were the next tracks you ac¬
quired ?
Mr. Montgomery. The Santa Fe tracks.
Commissioner Prouty. That is, these -f or 5 miles you mentioned?
Mr. Montgomery. Yes, sir.
Commissioner Prouty. What was the Santa Fe track used for
before that ?
Mr. Montgomery. The Santa Fe track was used for a switch track
to deliver stuff to industries located on it.
Commissioner Prouty. Was traffic delivered to other industries
besides the McCormick Harvesting Machine Company ?
Mr. Montgomery*. Yes, sir.
Commissioner Prouty. What other industries?
Mr. Montgomery. The Kimball Piano Company, the Ruble Coal
Company, and coal for the General Electric Company; their power
house is on that line. There was also a team track where facilities
were furnished for a great many people.
Commissioner Prouty. At the present time you operate that road ?
Mr. Montgomery. Yes, sir.
Commissioner Prouty. Do you make these deliveries ?
Mr. Montgomery. Yes, sir.
Commissioner Prouty. Has the Santa Fe a right to demand from
you that you shall switch a car, say to the General Electric works, or
to the Kimball Piano works for $1 a car—has it the right to
demand that you shall take a car from the piano works for $1 ?
Mr. Montgomery*. Yes, sir.
Commissioner Prouty. In fact, do you do that for $1 a car, any of
it?
Mr. Montgomery. We do not ; no, that is not correct, Mr. Commis¬
sioner, so far as the inbound freight is concerned. On coal and that
sort of freight we do that.
Commissioner Prouty. For $1 a car?
Mr. Montgomery. Yes, sir.
Commissioner Prouty. How does it happen that the Santa Fe,
instead of exacting this service from you at $1 a car, pays you 20 per
cent of the rate to the Missouri River, if the traffic is destined to the
Missouri River?
Mr. Montgomery. I am inclined to think you will have to ask them
that question. We think the service there is worth to us more than
any switching rate that is being paid in the city of Chicago.
Commissioner Prouty. That might be so, perhaps, but if they have
a right under their contract to ask you to perform that service for $1
10
a car, why do they pay you more than $1 a car ? Can you reach from
your factory and from these other industries other lines of railroad
besides the Santa Fe over this track?
Mr. Montgomery. Yes, sir.
Commissioner Prouty. How many other lines do you reach besides
the Santa Fe ?
Mr. Montgomery. We have connection, I should say, with fifteen
others.
Commissioner Procty. By virtue of this single piece of track—
these four or five miles ?
Mr. Montgomery. Yes, sir ; through that and through other tracks
we operate.
Commissioner Prouty. What other tracks?
Mr. Montgomery. The tracks around the International Harvester
Company's plant.
Commissioner Prouty. So you reach a great many roads in that
way ?
Mr. Montgomery. Yes, sir.
Commissioner Prouty. And do you get the same division from all
these other lines ?
Mr. Montgomery. Not from all of them.
Commissioner Prouty. Do you deliver business to a line that does
not pay you the division ?
Mr. Montgomery. Yes, sir.
Commissioner Prouty. To what extent ?
Mr. Montgomery. Well, to a considerable extent.
Commissioner Prouty. Name some line that does not pay you a
division.
Mr. Montgomery. Well, the Illinois Central, for example.
Commissioner Prouty. Do you deliver to the Illinois -Central
freight for competitive points ?
Mr. Montgomery. Yes.
Commissioner Prouty. What does the Illinois Central pay you ?
Mr. Montgomery. $3 a car.
Mr. Marchand. You make delivery to the Chicago, Burlington and
Quincy, do you not ?
Mr. Montgomery. Yes, sir.
Commissioner Prouty. How far are the tracks of the Chicago, Bur¬
lington and Quincy from the McCormick Harvester works?
Mr. Montgomery. The Chicago, Burlington and Quincy have
tracks within 100 feet, I should say.
Mr. Marchand. And you publish over the Chicago, Burlington and
Quincy, what division ?
Mr. Montgomery. On some traffic 20 per cent of the Missouri River
rate as the maximum.
Mr. Marchand. You make the delivery?
Mr. Montgomery. Yes, sir; we make the delivery.
Mr. Marchand. Where does the Illinois Central connect ?
Mr. Montgomery. The Illinois Central connects at Twenty-third
and Central Park avenue.
Mr. Marchand. How far is that from the International Harvester
Company ?
Mr. Montgomery. Two and one-half or 3 miles.
11
Mr. Marchand. And from the Illinois Central, you stated to Com¬
missioner Prouty, you get no division whatever?
Mr. Montgomery. No, sir; we do not.
Mr. Marchand. You get $3 as a switching charge?
Mr. Montgomery. Yes. sir.
Mr. Marchand. You charge the Burlington road 20 per cent?
Mr. Montgomery. We clo not charge the Burlington road anything.
Mr. Marchand. Well, the Burlington gives you 20 per cent for
switching'a car 100 feet.
Mr. Montgomery. Yes. sir.
Mr. Marchand. And for switching the car in the Illinois Central
case you get $3 a car ?
Mr. Montgomery. Yes, sir.
Mr. Marchand. What is the rate on the commodities shipped by
the McCormick Harvester Company to the Missouri River ?
Mr. Montgomery. The rate, as I recollect it, is 30 cents per 100
pounds.
Mr. Marchand. What is the minimum?
Mr. Montgomery. The minimum is 20,000 pounds.
Mr. Marchand. What is the average weight?
Mr. Montgomery. Between 20,000 and 24,000 pounds, as near as I
can remember.
Mr. Marchand. And at 30 cents a hundred that would be
Mr. Montgomery. It would be $60 a car minimum.
Mr. Marchand. And you get 20 per cent of that ?
Mr. Montgomery. Yes, sir.
Mr. Marchand. That is $12 ?
Mr. Montgomery. Yes, sir.
Mr. Marchand. And you get $12 for performing the service of
switching 100 feet in the case of the Chicago, Burlington and Quincy
and for the same service to the Illinois Central—not the same service,
but for 2£ miles haul you get $3 ?
Mr. Montgomery. We have no division with the Illinois Central
Railroad.
Mr. Marchand. Xow, Mr. Montgomery, can you state why you
have not a uniform division with all these lines ?
Mr. Montgomery. Because all the lines refuse to give it to me.
Mr. Marchand. How do you divide the traffic between these lines
to the Missouri River ?
Mr. Montgomery. I have nothing to do with the traffic. I suppose
you have reference to the traffic of the International Harvester
Company ?
Mr. Marchand. Yes, sir. How much do you make delivery to the
Chicago and Alton ?
Mr. Montgomery. We deliver it in their own yard.
Mr. Marchand. And how much of the service is that?
Mr. Montgomery. The service is probably 61 miles—6 miles, I
should imagine.
Mr. Marchand. And what do you publish over the Alton ?
Mr. Montgomery. Twenty per cent of the rate.
Mr. Marchand. Do you get anything else?
Mr. Montgomery. Xo. sir.
Mr. Marchand. You do not get a switching charge?
12
Mr. Mon too m ei; y. Upon some commodities
Mr. Marchand. What commodities?
Mr. Montgomery. Coal inbound, for instance.
Mr. Marchand. To the House of Correction?
Mr. Montgomery. To any industry on the line.
Mr. Marchand. How about the Pennsylvania line? What division
do von get from them?
Mr. Montgomery. Nothing.
Mr. Marchand. Do you get an arbitrary from them ?
Mr. Montgomery. Three dollars a car.
Mr. Marchand. And what service do you perform for them?
Mr. Montgomery. We deliver the freight to them. We deliver it
to the Panhandle, for example, at Twentieth street and Western ave¬
nue. near there.
Mr. Marchand. That is only a few hundred feet, isn't it?
Mr. Montgomery. The way we deliver it to them it i« probably in
the neighborhood of a half a mile for International Harvester traffic.
1 presume other traffic originates down the line 1J miles.
Mr. Marchand. Traffic from the mattress factory to the Pennsyl¬
vania line, what do you get from the Pennsylvania for that?
Mr. Montgomery. Three dollars a car.
Mr. Marchand. How about inbound tonnage?
Mr. Montgomery. Inbound tonnage pays the same rate.
Mr. Marchand. Where do you make connection with Chicago and
Erie?
Mr. Montgomery. About the same place as with the Panhandle.
Mr. Marchand. And you get from Chicago and Erie, how much?
Mr. Montgomery. The same rate as from the Pennsylvania.
Mr. Marchand. An arbitrary ?
Mr. Montgomery. It is not an arbitrary; it is an arbitrary rate,
but it is a proportion of the Chicago flat rate.
Mr. Marchand. That is $3, you say ?
Mr. Montgomery. Yes, sir.
Mr. Marchand. Hoav do you deliver to the Chicago and North¬
western ?
Mr. Montgomery. About the same place as to the Erie.
Mr. Marchand. Do you deliver direct to the Chicago, Burlington
and Quincy ?
Mr. Montgomery. Yes, sir.
Mr. Marchand. Who owns the tracks to these various industries
along the line of the Illinois Northern?
Mr. Montgomery. Within the industries, inside the plants, they
are owned by the industries themsehres. We own up to the line of the
properties ; at least, we hold it under our leasehold.
Mr. Marchand. What do those industries get for cars that run
over those private switches, or tracks ?
Mr. Montgomery. Nothing that I know of.
Mr. Marchand. Your line rebates nothing to them?
Mr. Montgomery. No, sir.
Mr. Marchand. Directly or indirectly ?
Mr. Montgomery. Not in any way.
Mr. Marchand. Are you connected with the Chicago, West Pull¬
man and Southern Railway ?
13
Mr. Montgomery. Yes, sir.
Mr. Marchand. What is your position with that railway company?
Mr. Montgomery. Vice-president and general manager.
Mr. Marchand. Please explain to the Commission the location of
the Chicago, West Pullman and Southern Railway.
Mr. Montgomery. As near as I can judge, ttie blue lines on that
map [indicating] cover the proposition.
Air. Marchand. What portion of the city is that located in ?
Air. AIontgomery. It is located in West, Pullman; way in the
southeastern portion, I guess ; I believe it is.
Mr. AIarchand. How much mileage has the Chicago, West Pull¬
man and Southern Railway ?
Air. AIontgomery. I don't know personally; within the neighbor¬
hood of 3 or 4 miles, I should say.
Mr. AIarchand. Does it own that track ?
Mr. AIontgomery. Yes, sir.
Air. AIarchand. Did it build it ?
Mr. AIontgomery. Yes, sir.
Air. Marchand. Is it incorporated?
Mr. AIontgomery. Y es, sir.
Mr. AIarchand. Under the laws of the State of Illinois?
Mr. AIontgomery. Yes, sir.
Mr. AIarchand. When was it incorporated ?
Mr. AIontgomery. My recollection is that it was in 1900.
Mr. AIarchand. AVho is president of it?
Mr. AIontgomery. Air. O. W. Jones.
Mr. AIarchand. He is also connected with the Illinois Northern
road ?
Mr. AIontgomery. Yes, sir; he is vice-president.
Air. AIarchand. And with the International Harvester Company ?
Mr. AIontgomery. Yes, sir; general manager of the traffic depart¬
ment.
Mr. AIarchand. What is that roacl capitalized at?
Air. AIontgomery. Fifty thousand dollars.
Air. AIarchand. Do you hold any stock in that company?
Ali*. AIontgomery. I believe I hold one share.
All*. AIarchand. Do you know who the stockholders are?
Air. AIontgomery. Not all of them.
Air. AIarchand. AVho are some of them ?
All*. AIontgomery. Air. Sheldon, of the AVhitman & Barnes Com¬
pany, and Air. Lewellyn
Air. AIarchand. Whitman & Barnes are located on the line of his
roacl, are they not?
Air. AIontgomery. l'es, sir.
Mr. Marchand. What business are they in?
Mr. AIontgomery. Alanufacturing business; making parts of im¬
plements.
Air. AIarchand. Agricultural implements?
Mr. AIontgomery. Agricultural implements. Air. Lewellyn is
connected with the Chicago Malleable Castings Company.
Mr. Marchand. That is also located on the line of this road, is it
not?
Mr. AIontgomery. Yes, sir.
Mr. AIarchand. Who else is a stockholder ?
14
Mr. Montgomery. I think Mr. O. W. Jones. Mr. C. T. Bradford
Mr. Marchand. Mr. Bradford is likewise connected with the Inter¬
national Harvester Company?
Mr. Montgomery. Yes, sir. Mr. A. G. Huckin is also a stock¬
holder.
Mr. Marchand. Mr. Montgomery, there appear to be, from that
diagram, a number of side tracks leading to industries located on that
line?
Mr. Montgomery. Yes, sir.
Mr. Marchand. Who owns those sidejtracks?
Mr. Montgomery. I presume the industries themselves.
Mr. Marchand. Have you a percentage arrangement with the trunk
lines? I use " trunk lines " to distinguish between the through rail¬
roads' main lines and these belt lines.
Mr. Montgomery. Yes. sir.
Mr. Marchand. Do you say you have percentages in Avith them ?
Mr. Montgomery. Yes. sir.
Mr. Marchand. What arrangement have you with the Chicago,
Bock Island and Pacific (
Mr. Montgomery. With the Chicago, Rock Island and Pacific, my
recollection is that it is 20 per cent of the rate.
Mr. Marchand. Do they also pay a switching charge?
Mr. Montgomery. Xo. sir; not on that traffic.
Mr. Marchand. Xot on Avhat traffic?
Mr. Montgomery. On traffic out of which Ave get a percentage.
Mr. Marchand. Do you get a percentage out of the traffic from all
the industries located along the line ?
Mr. Montgomery. All of them.
Mr. Marchand. "What is the name of your works on this road?
Mr. Montgomery. The Piano Plant of the International Harvester
Company.
Mr. Marchand. How do you make delivery to the Chicago, Bur¬
lington and Quincy from there ?
Mr. Montgomery. To the Chicago, Burlington and Quincy it is
delivered, as I recollect it, to the Rock Island.
Mr. Marchand. And Avhat do they pay ?
Mr. Montgomery. They pay 20 per cent of the rate.
Mr. Marchand. Do they pay you an arbitrary in addition to that?
Mr. Montgomery. I think not.
Commissioner Prouty. "Who pays the Rock Island for their part
of the service?
Mr. Montgomery. Chicago, West Pullman and Southern.
Commissioner Prouty. What do you pajr the Rock Island ?
Mr. Montgomery. My recollection is the Rock Island pays $3 a car.
Commissioner Prouty. That comes out of your 20 per cent ?
Mr. Montgomery. Yes, sir.
Commissioner Prouty. How far does the Rock Island handle the
traffic ?
Mr. Montgomery. I do not know exactly ; probably 8 or 10 miles.
Mr. Marchand. How do you make deliveries to the Grand Trunk ?
Mr. Montgomery. It is made through the Rock Island, as I recol¬
lect it.
Mr. Marchand. Have you a percentage arrangement with them?
15
Mr. Montgomery. I am not sure about that ; I am not sure whether
we have or not. I am inclined to think Mr. Huckin can answer
those questions better than I can, as he is more familiar with that
matter.
Mr. Marchand. You have not a uniform arrangement, then, with
the roads—speaking of the Chicago, West Pullman and Southern?
You have not a uniform arrangement as to the division with the
trunk lines?
Mr. Montgomery. I think not, with all of them.
Mr. Marchand. It is about the same as it is with the Illinois
Northern, is it not, in that respect?
Mr. Montgomery. I would not be sure of that. That information
can be furnished you.
Mr. Marchand. What do you charge factories located on the line
of the Chicago, West Pullman and Southern for switching ?
Mr. Montgomery. For what switching?
Mr. Marchand. For any switching you perform those industries?
Mr Montgomery. Usually the Chicago rate applies, and thé line
transporting the freight beyond us pays the switching charge,
absorbs it.
Commissioner Prouty. Do these factories which are located on the
Chicago, West Pullman and Southern, and also on the Illinois North¬
ern Road, have the right to route their traffic?
Mr. Montgomery. Yes, sir; absolutely.
Mr. Marchand. You have nothing to do with that.
Mr. Montgomery. No, sir.
Commissioner Prouty. Have you i uniform percentage arrange¬
ment with the southern lines?
Mr. Montgomery. What do you mean by the southern lines?
Commissioner Prouty. Lines carrying traffic to the South. Do
they pay the same percentage?
Mr. Montgomery. Yes, sir.
Commissioner Prouty. How about to the East—the eastern lines?
Mr. Montgomery. The eastern lines—we have no percentage in
the East.
Commissioner Prouty. They all pay a switching charge?
Mr. Montgomery. Yes, sir.
Mr. Marchand. What did you say this line was capitalized at?
Mr. Montgomery. Which one?
Mr. Marchand. The Chicago, West Pullman and Southern?
Mr. Montgomery. Fifty thousand dollars.
Mr. Marchand. Do you know anything about the cost of operation ?
Mr. Montgomery. No, sir; the books will show that very clearly.
Mr. Marchand. You can not testify as to that?
Mr. Montgomery. No, sir.
Mr. Marchand. Do you know what dividends they have been
paying?
Mr. Montgomery. No, sir.
Mr. Marchand. Did you ever receive a dividend?
Mr. Montgomery. No, sir. I have only been connected with the
company a short time.
Mr. Marchand. Did you ever receive a dividend on the stock
you hold in the Illinois Northern?
16
Mr. Montgomery. The Illinois Northern have never paid a divi¬
dend.
Mr. Marchand. Do yon know what they do with their revenue?
Mr. Montgomery. They pay it out for operating expenses.
Mr. Marchand. Do they consume it all in operating expenses?
Mr. Montgomery. I know that since the incorporation of the
railroad they have never had a surplus.
Mr. Marchand. And the incorporation was in 1901?
Mr. Montgomery. Yes, sir.
Commisisoner Fifer. Do you know about what the gross income is ?
Mr. Montgomery. I do not remember what it is, Mr. Commissioner,
but we will be glad to submit a report or statement of that.
Commissioner Prouty. The Illinois Northern performs at the pres¬
ent time service which the McCormick Harvester Company formerly
performed itself ?
Mr. Montgomery. Not all of it. A great deal of the service was
performed by the railroads that I mentioned—the Santa Fe, the Chi¬
cago, Burlington and Quincy, and the Chicago Junction.
Commissioner Protjtt. Does the McCormick Harvester Company
bear any part of the expense of maintaining the switches in their
yards ?
Mr. Montgomery. No.
Commissioner Prouty. That is done by the Illinois Northern?
Mr. Montgomery. Yes, sir.
Commissioner Prouty. How* much is the charge for switching for
the company ?
Mr. Montgomery. A dollar a car. That is purely for switching
around between the different warehouses and factories of the company
inside of the plant.
Commissioner Prouty. Do you know what it cost to maintain and
operate those tracks previous to the organization of the Illinois
Northern?
Mr. Montgomery*. No, sir.
Mr. Marchand. What other works does the International Har-
vester Company own besides those on the Illinois Northern and at
West Pullman ?
Mr. Montgomery. It owns the Deering works on the north side of
the city.
Mr. Marchand. How are they reached ?
Mr. Montgomery. By the Chicago and Northwestern and the Chi¬
cago, Milwaukee and St. Paul.
Mr. Marchand. Do you hold a position with that portion of the
company ?
• Mr. Montgomery. No, sir.
Mr. Marchand. Do you know anything about the divisions allowed
there ?
Mr. Montgomery. No, sir.
Mr. Marchand. Or switching charges ?
Mr. Montgomery. I do not.
Mr. Marchand. What other works does the International Har¬
vester Company own ?
Mr. Montgomery. They own works in South Chicago, the South
Chicago Furnace Company and Steel Plant.
17
Mr. Marchand. How are the works at South Chicago—the steel
plant—reached ?
Mr. Montgomery. They are reached by the Belt Railroad, the
Chicago. Rock Island and Pacific, the Calumet and Western, which is
jointly owned by three or four lines.
Mr. Marchand. Does the International Harvesting Company own
any tracks at the South Chicago plant?
Mr. Montgomery. It does. It has some tracks around there.
Mr. Marchand. How much trackage has it ?
Mr. Montgomery. I am not clear about that.
Mr. Marchand. Approximately, can you state?
Mr. Montgomery. I should say from 5 to 7 miles; something of
that sort.
Mr. Marchand. What division or percentage or arbitrary does it
publish for switching cars there?
Mr. Montgomery. Nothing.
Mr. Marchand. Does it own any motive power?
Mr. Montgomery. Yes. sir.
Mr. Marchand. How much?
Mr. Montgomery. Three steam engines.
Mr. Marchand. Any equipment ?
Mr. Montgomery. Yes. sir; a few box cars and flat cars and steel
gondolas.
Mr. Marchand. You say that the International Harvester Com¬
pany gets nothing for switching cars at South Chicago ?
ilr. Montgomery. No, sir; they do not.
Mr. Marchand. Does the International Harvester Company own
any equipment aside from that at South Chicago ?
• Mr. Montgomery. Yes, sir.
Mr. Marchand. Does it own the equipment of the Illinois-Northern ?
Mr. Montgomery. No, sir.
Mr. Marchand. Does it oavu any at West Pullman ?
Mr. Montgomery. No. sir.
Mr. Marchand. Does the equipment of the International Harvester
Company go off the lines of the roads it owns ?
Mr. Montgomery. Yes, sir.
Mr. Marchand. Does it go as far as the Missouri River?
Mr. Montgomery. It goes wherever they want to load it. It has
gone beyond the Missouri River.
Mr. Marchand. Do you get mileage on those cars ?
Mr. Montgomery. I am operating the railroads. I do not know
what the International Harvester Company gets.
Mr. Marchand. Does the Illinois Northern oath any equipment?
Mr. Montgomery. Yes, sir.
Mr. Marchand. TIoav many cars?
Mr. Montgomery. Eight or ten gondolas.
Mr. Marchand. Do those cars go off the line of the Illinois
N orthern ?
Mr. Montgomery. Not generally; no.
Mr. Marchand. Do they ever?
Mr. Montgomery. I don't knoAV that they ever Avere off the line; no.
Mr. Marchand. What are they used for?
18
Mr. Montgomery. They are used around the McCormick plant,
generally, facilitating the handling of business around there in
handling the raw material and finished products from one part of the
plant to another.
.Mr. Marchand. Mr. Montgomery, generally, I understand you to
say, that you get the same percentage inbound as you do out ?
Mr. Montgomery. Yes, sir; generally.
Mr. Marchand. The same switching charge ?
Mr. Montgomery. Yes, sir.
Mr. Marchand. Is there anything else that the Commission wants
to ask this witness ?
Commissioner Fifer. You better have a statement made up show¬
ing the gross income and operating expenses of each of these roads.
Mr. Marchand. I thought we would ask that of the secretary and
treasurer, Mr. Commissioner.
Commissioner Prouty. I think, perhaps, this witness should file a
copy of the lease under which the Illinois Northern leases its tracks
from the McCormick Harvester Company and the Santa Fe.
Mr. Marchand. You will do that?
Mr. Montgomery. Yes, sir.
Mr. Knapp. Will you explain to the Commission a little more fully
the character of the business transacted by the Illinois Northern, and
explain to them about the other industries upon the line and the char¬
acter of the business done by those industries, the warehouse facilities,
etc.?
Mr. Montgomery. The Illinois Northern does a general railroad
business as a common carrier. We perform all the switching service
for the industries located along the line, switching their cars in and
out and around to different locations of the plant.
Commissioner Profty. Do you file a joint tariff to interstate
points
Mr. Montgomery. We do. We have a local freight station on the
line where we are handling less than carload freight for probably 150
manufactories and shipping concerns in that part of the city, and we
handle freight through our different facilities, team tracks, etc., for
probably *250 different institutions.
Mr. Knapp. How many industries altogether do you serve?
Mr. Montgomery. I should say in the neighborhood of 200 to 250.
Mr. Knapp. Will you explain also the dollar per car rate that you
mentioned in connection with the lines of the Santa Fe? How did
thai, happen to be agreed upon?
Mr. Montgomery. The Grand Trunk originally owned the track
and in selling it to the Santa Fe it retained an easement, and the
Santa Fe and the Grand Trunk apparently discovering the danger of
opeiating two railroads, operating their engines over the same tracks,
the Grand Trunk agreed with the Santa Fc that instead of operating
their engines, the Grand Trunk engines, and paying their proportion
of the maintenance expense, they would pay the Santa Fe $1 per
loaded ear for handling this traffic for them, and in leasing the track
from the Santa Fe we naturallv assumed this responsibility.
Mr. K napp. h ou also spoke of the Chicago, Burlington and Quincy
being near the plant of the Harvester Company. Are you enabled
to teach tin same points by other roads with which you have eonnec-
19
tions that you are enabled to reach by the Chicago, Burlington and
Quincy ?
Mr. Montgomery. To a very large extent; almost entirely, I
should say.
Mr. Knapp. Is that the reason you are able to get from the Chicago,
Burlington and Quincy the same percentage that you are able to get
from these other roads?
Mr. Montgomery. I should think that would be a reasonable propo¬
sition if they expected to do any of the business otf of the Illinois
Northern.
Commissioner Provty. In the case of this outbound traffic, you bill
the freight ?
Mr. Montgomery. We waybill the freight, carload and less than
carload.
Mr. Marchand. You waybill it to destination?
Mr. Montgomery. The carload.
Mr. Marchand. You have testified that your road is a common car¬
rier and that you are named in joint tariffs?
Mr. Montgomery. Yes, sir.
Mr. Marchand. Joint interstate tariffs?
Mr. Montgomery. Yes, sir.
Mr. Marchand. Do you file with the Interstate Commerce Com¬
mission a financial report of the Illinois Northern Railroad ?
Mr. Montgomery. No, sir.
Mr. Marchand. Why not?
Mr. Montgomery. For the reason that we have only recently been
a party to joint interstate tariffs.
Mr. Marchand. Plow recent?
Mr. Montgomery. I would not like to slate, but late in 1903. We
intend to file a report covering this year's fiscal business.
Commissioner Yeomans. If there are no further questions the wit¬
ness will be excused.
The witness excused.
C. T. Bradford, having been duly sworn, testified as follows :
Mr. Marchand. What is your occupation ?
Mr. Bradford. I am assistant traffic manager of the International
Harvester Company and also treasurer of the Illinois Northern and
Chicago, West Pullman and Southern.
Mr. Marchand. Are you prepared to state what the operating ex¬
penses of the Illinois Northern were for 1903?
Mr. Bradford. No, sir; I am not.
Mr. Marchand. Do you know what the gross income was for 1903 ?
Mr. Bradford. No, sir.
Mr. Marchand. How much stock has the company? How much
stock has it issued ?
Mr. Bradford. The Illinois Northern?
Mr. Marchand. Yes, sir!
Mr. Bradford. My recollection is that it Avas capitalized for
$500,000.
Mr. Marchand. Do you know Avho the stockholders are?
Mr. Bradford. I do not beb evo I could name them.
20
Mr. Marchand. As to the Chicago. West Pullman ancl Southern,
that is capitalized for $À0,000, is it not ?
Mr. Marchand. Do you know anything about the cost of operation
of that road ?
Mr. Bradford. Not a thing: no. sir.
Mr. Marchand. Do you know who the stockholders of that road
are ?
Mr. Bradford. I could not name them: no. sir.
Mr. Marchand. Do you know as to the number of cars handled
during the last quarter by the Illinois Northern road ?
Mr. Bradford. I do not.
Mr. Marchand. Who is there in your company qualified to testify
upon these points i
Mr. Bradford. Well. I do not know anybody has the figures that
they could quote offhand. I daresay that they could be compiled for
the Commission.
Mr. Marchand. You do not make up a quarterly report of the cost
of operation, the amount of business handled, etc. ?
Mr. Bradford. I do not know of any such report.
Mr. Marchand. In line with the suggestion made by Governor
Fifer. I think this witness should be required to file with the Commis¬
sion a statement as to the amount of stock issued, the names of the
stockholders, the cost of operation, the income, and such other data as
the Commission may see fit to require.
Mr. Bradford. My duties as treasurer do not bring me in touch
with any of those matters. I am custodian of the receipts, and have
charge of disbursements as treasurer.
Commissioner Fifer. Who has charge of that branch of the service ?
Mr. Bradford. We have an auditor.
Commissioner Fifer. Could he give all this information?
Mr. Bradford. Fie is in possession of the records.
Commissioner Fifer. He could give the names of the stockholders,
could he?
Mr. Bradford. The secretary of the company. I fancy, might fur¬
nish that. The stock books will show that.
Mr. Marchand. You say as treasurer you have custody of the
receipts of the Illinois Northern Railroad?
Mr. Bradford. Yes. sir.
Mr. Marchand. Do you know what income they had during the last
year ?
Mr. Bradford. I do not. I have been connected with them but a
very few weeks, I might say.
Mr. Marchand. The books are in your possession, are they not?
Mr. Bradford. The cash book.
Mr. Marchand. You do not keep the ledger of the company?
Mr. Bradford. No, sir.
Mr. Marchand. Who does?
Mr. Bradford. The auditor.
Mr. M vRCiiAND. Does the Commission wish to ask anything more
of this witness ?
Commissioner Proitv. How long have you been treasurer of the
Illinois Northern ?
Mr. Bradford. A month or six weeks.
21
Commissioner Prouty. As treasurer of tire company is the income
of that road paid to yon ?
Mr. Bradford. All the funds pass through my hands.
Commissioner Prouty. In what way do they pass through your
hands? Do you pass them over to the Harvester Company?
Mr. Bradford. No, sir; the accounts of each road are deposited in
a separate bank account in the names of the railroads.
Commissioner Prouty. It is said that the Illinois Northern re¬
ceives a division from the different railroads. How often is there a
settlement between your road ancl the Santa Fe, for instance?
Mr. Bradford. I am not positive about that. My recollection is
that there is a regular monthly settlement as in all regular railroad
proceedings.
Commissioner Prouty. And as a result of that monthly settlement
the Santa Fe pays you so much money?
Mr. Bradford. Yes, sir.
Commissioner Prouty. In what form is that money paid to you?
Mr. Bradford. I think they usually issue a draft to the Illinois
Northern for what is due them. My recollection is that they author¬
ize a draft. I am quite sure that the general practice is that of ordi¬
nary interline settlements as between railroads.
Commissioner Prouty. Do you draw that draft as treasurer?
Mr. Bradford. Yes. sir.
Commissioner Prouty. Do you remember anything about what
the amount of it is from month to month?
Mr. Bradford. No, sir; I could not testify to that otfhancl.
Commissioner Prouty. You have settlements with all these rail¬
roads ?
Mr. Bradford. Yes, sir.
Commissioner Prouty. What is done with the money that is real¬
ized on these drafts ?
Mr. Bradford. It is deposited in the bank and goes to the credit of
the railroad company.
Commissioner Prouty, It don't stay there forever. What is clone
with it.?
Mr. Bradford. I do not know n hat disposition is made of it further
than that it is subject to checks to meet current expenses.
Commissioner Prouty. Do you draw checks against it?
Mi-. Bradford. Yes, sir; I draw checks against it.
Contissioner Prouty. Do you know whether the current expenses
amount to as much as the income?
Mr. Bradford. I do not : no, sir. I do not know how that is.
Commissioner Prouty. Do you think all the officers of the company
know as much about its business as you do?
Mr. Bradford. 1 should hope that they might.
Commissioner Prouty. 1 suppose there is somebody somewhere
who knows how much money is received and what is done with it?
Mr. Bradford. Those are all matters of record which I do not want
to testify to offhand.
Commissioner Profty. Where are those account books kept?
Mr. Bradford. By the auditor of the railroad company.
Commissioner Prouty. Where are your books kept? ' You are the
treasurer of the railroad company?
22
Mr. Bradford. Yes, sir.
Commissioner Brot it. "Where do yon keep your books?
Mr. Bradford. In the railroad company's offices.
Commissioner Proity. .Vre those books very voluminous—the
treasurer's books?
Mr. Bradford. The treasurer's books are not ; 110. sir. Just an ordi¬
nary cashbooks.
Commissioner Proi ty. Could you bring that cashbook down here
after dinner and testify as to these matters?
Mr. Bradford. Yes. sir.
Commissioner Proyty. Then, suppose you bring that down here
this afternoon.
Mr. Bradford. Yes, sir.
Mr. Knapp. You do pay out the money that come into your hands?
Mr. Bradford. It is paid out by check.
Mr. Knapp. Is that paid out 011 regular vouchers?
Mr. Bradford. Yes, sir.
Mr. Knapp. As treasurer you have nothing to do with any matters
except when a voucher comes to you you pay the voucher?
Mr. Bradford. Yes, sir; I honor a regularly approved voucher.
Mr. Knapp. In the custody of these funds all you have to do is to
receive the funds and pay the money out on regularly approved
vouchers, approved by officers of the company?
Mr. Bradford. Yes, sir.
Commissioner Proi ty. And who approves a voucher before it is
honored ?
Mr. Bradford. I honor a voucher when it is approved by the audi¬
tor and the general manager of the railroad company.
Commissioner Prouty'. Who is your auditor?
Mr. Bradford. W. W. Vincent.
Commissioner Proi ty. Is he here ?
Air. Bradford. He is in the city.
Commissioner Proity. Has he been asked to be here, Mr.
Marchand ?
Mr. Marchand. No. sir.
Commissioner Proity. I think he had better come down here after
dinner.
Mr. Marchand. Will you ask him to come down after dinner, Mr.
Bradford ?
Mr. Bradford. Yes. sir.
Commissioner Ybomans. If there are 110 further questions, the wit¬
ness will be excused.
The witness excused.
Richard F. Howe, having been duly sworn, testified as follows:
Mr. Marchand. What are vour initials?
Mr. Howe. R. F. Howe.
Mr. Marchand. What is your occupation?
Mr. How* I am secretary and treasurer of the International Har-
vester Company.
Mr. Marchand. Haie you a position with the Illinois Northern
road ?
Mr. Howe. I have not.
23
Iii-. Marchand. Can yon state the amount of tonnage given to the
various lines to the Missouri Kiver for the past twelve months?
Mr. Hove. Xo, sir; that does not come into my department in any
way—the operations of the railroad or the result of them.
ilr. Marchand. Can you state what revenues the International
Harvester Company has derived from the Illinois Northern road dur¬
ing the last twelve months ?
Mr. Howe. Xone. I should say none.
Mr. Marchand. Who are the officers of the International Harvester
Company ?
Mr. Howe. All of the officers?
Mr. Marchand. Yes, sir.
Mr. Howe. The chairman of the hoard is Charles Heering.
Mr. Marchand. Charles Heering? He was the president of the
Heering Works at one time, was he not ?
Mr. Howe. Xo. sir; the Heering Company was a copartnership and
he was a copartner. Cyrus McCormick is president, James Heering,
Harold McCormick, Joîin J. Glessner, and William H. Jones are vice-
presidents, and Stanley McCormick is comptroller. I believe that
includes all the officers.
Mr. Marchand. Ho you know whether the International Harvester
Company holds any stock in the Illinois Northern Railroad?
Mr. Howe. The International Harvester Company has in its posses¬
sion stock of the Illinois Northern Railroad.
Mr. Marchand. As trustees for some one?
Mr. Howe. It is indorsed in blank and is in my possession as
treasurer.
Mr. Marchand. How much ?
Mr. Howe. I understand it is practically the entire capital stock.
Mr. Marchand. How much is that ?
Mr. Howe. Five hundred thousand dollars. There may be some
qualifying shares, or some small number of shares not there.
Mr. Marchand. What dividends has that stock paid ?
Mr. Howe. I should say it has never paid any since the Interna¬
tional Harvester Company has owned it or been in charge of it.
Mr. Marchand. Then the International Harvester Company has
in i es possession the entire stock issue of the Illinois Northern
Railway ?
Mr. Howe. Unless the directors may have a few shares not in my
possession.
Mr. Marchand. Ho you know whether the International Harvester
Company holds any stock in the Chicago, West, Pullman and South¬
ern Railroad ?
Mr. Howe. I think it owns some stock.
Mr. Marchand. How much?
Mr. Howe. I don't know. I think it is a controlling interest, but
not all. I know it does not hold all of it. I do not know that any of
it is in the name of the International Harvester Company.
Mr. Marchand. Are the certificates in your possession ?
Mr. Howe. Yes, sir.
Commissioner Proxity. You are treasurer of the International Har¬
vester Company ?
Mr. Howe. Yes, sir.
24
Commissioner Profty. Were you connected with any of these con¬
cerns before the formation of the Harvester Company ?
Mr. Howe. Yes, sir: with the Heering Harvester Company.
Commissioner Pkofty. Who was treasurer of the McCormick Com¬
pany before that time?
Mr. Howe. I don't know.
Commissioner Profty. You have spoken about the capital stock of
the Chicago, West Pullman and Southern road. Yon do not know
who holds that stock ?
Mr. Howe. I do not. I think very likely the treasurer. Mr. Jones,
can show that. It is not in my possession.
Commissioner Pkofty. You understand that the International
Harvester Company really owns a controlling interest in that stock?
Mr. Howe. Yes. sir; they control it. pr I so understand.
The witness excused. x
E. F. Hilgard. having been duly sworn, testified as follows:
Commissioner Pkofty. Before you go on let me ask Mr. Howe
another question. Mi'. Howe, can you state just when the Inter¬
national Harvester Company was organized and took possession of
these different concerns?
Mr. Howe. I think it was organized in August. 1902.
Mr. Marchand. What is your position, Mr. Hilgard ?
Mr. Hilgard. My position is that of general freight agent for the
Illinois Northern Railway and the Chicago. West Pullman and
Southern Railway.
Mr. Marchand. Mr. Hilgard. can you furnish the Commision
with a statement of the amount of tonnage furnished the various lines
during the last twelve months for delivery at Missouri River points ?
Mr. Hilgard. Such a statement could only be furnished from the
auditor's books, which are not in my possession.
Mr. Marchand. You mean the auditor of the Illinois Northern
road ?
Mr. Hilgard. Yes. sir.
Mr. Marchand. And his name is Vincent ?
Mr. Hilgard. Yes. sir; Vincent.
Mr. Marchand. Thai is all I wanted with this witness.
Commissioner Profty. How much of a force do you employ in
your department. Mr. Hilgard?
' Mr. Hilgard. For the general handling of traffic?
Commissioner Profty. For vour part of the business.
Mr. Hit Ai ARD. M y own work is done bv myself and a stenographer.
Commissioner Profty. So that the clerical work connected with
the traffic department of that road consists of what you do with the
assistance of a stenographer?
Mr. Hilgard. l'es, sir: and with what Mr. Montgomery does as
general manager.
Commissioner Pkofty. Does Mr. Montgomery devote his entire
time to that road ?
Mr. Hilgard. No, sir; he is also general manager of the Chicago.
West Pullman and Southern Railway.
Connnisioner Pkofty. Hoes he devote his entire time to those two
roads ?
25
Mr. Hilgard. No, sir: there are some roads outside of Chicago to
which he also devotes his time.
Commissioner Prouty. Do you devote your entire time to this
road ?
Mr. Hilgard." Yes, sir.
Commissioner Prouty. .Can you state how many employees these
roads have?
Mr. Hilgard. I can tell you so far as the Illinois Northern is con¬
cerned.
Commissioner Prouty. It has been said that there is a freight sta¬
tion on the Illinois Northern ?
Mr. Hilgard. Yes, sir.
Commissioner Prouty. Do you have an agent there ?
Mr. Hilgard. We have an assistant superintendent, who has charge
of handling freight there. The force differs or varies according to
the volume of business. We employ all the way from 6 to 11 to 12
men—truckers and clerks in addition to the bill clerk, etc. There is
a regularly organized station there.
Commissioner Prouty. How many locomotives does your roacl
have ?
Mr. Hilgard. Eleven.
Commissioner Prouty. How many employees, in all, are connected
with the operation of the road, do you know ?
Mr. Hilgard. No, I do not know the exact number of them.
Mr. Marchand. You are also connected with the Chicago. West
Pullman and Southern, are you not ?
Mr. Hilgard. Yes, sir.
Mr. Marchand. You are the general freight agent of that road
also ?
Mr. Hilgard. Yes, sir.
Mr. Marchand. Have von joint tariffs with other lines?
Mr. Hilgard. Yes, sir.
Mr. Marchand. Joint interstate tariffs?
Mr. Hilgard. Yes, sir.
Mr. Marchand. How long have you had them in effect?
Mr. Hilgard. Well, the dates vary. I could not say just how long.
Mr. Marchand. When did you first file or join in such joint rates?
Mr. Hilgard. I could not answer that. Mr. Huckin has been gen¬
eral manager of the road until recently.
Commissioner Yeomans. That is all, Mr. Hilgard.
Witness excused.
A. CI. Huckin, having been duly sworn, testified as follows:
Mr. Marchand. What is your occupation, Mr. Huckin?
Mr. Huckin. I am secretary of the Illinois Northern and of the
Chicago, West Pullman and Southern, and am also manager of the
freight and claim division of the International Harvester Company.
Mr. Marchand. It has been testified to that the Chicago, West
Pullman and Southern Railway joins in tariffs with other lines to
interstate points. Am I correct in that ?
Mr. Huckin. That is correct.
Mr. Mirciiand. How long have you been a pariv to such joint
tariffs?
Mr. Huckin. I think since last June—June. lfiOfi.
26
Mr. Marchand. Are tho->e tariffs filed with the Interstate Com¬
merce Commission ?
Mr. Huckin. I presume so.
Mr. Marchand. Do you file a financial and operating report with
the Interstate Commerce Commission ?
Mr. Huckin. Such a report lias been filed by my predecessor.
Mr. Marchand. Can you testify as to tile amount of traffic hauled
on the Chicago. West Pullman and Southern destined to Missouri
River points during the past twelve months?
Mr. HrcKix. No. sir: I could not tell what part of it was. I could
tell the total.
Mr. M ARCKAND. You could not tell what was hauled by the differ¬
ent lines ?
Mr. Hi ckix. No. sir: I do not keep any separate record of it.
Commissioner Prouty. Let him give the total.
Mr. Marchand. What was the total?
Mr. Huckin. It would be about 11,000 or 12.000 cars.
Mr. Marchand. Inbound and outbound ?
Mr. HrcKix. In and outbound.
Commissioner Prouty. About what would be your average inbound
per car on that ?
Mr. Huckin. I should say something like $3.50. as near as I can
tell.
Mr. Marchand. Mr. Vincent is auditor of the Chicago, West Pull¬
man and Southern?
Mr. Huckin. Yes. sir.
Commissioner Prouty. Did you say you were the traffic manager
of the Harvester Company?
Mr. Huckin. Xo: not the traffic manager. I am manager of one
of the divisions of the department.
Commissioner Prouty. What division?
Mr. Huckin. Well, it has referefice to the routine work in the
office.
Commissioner Prouty. What do you mean by the " routine work ? "
Mr. Huckin. The preparation of claims and routing shipments.
Commissioner Prouty. You have charge of the routing and also
charge of the claims?
Mr. Huckin. Yes. sir.
Commissioner Prouty. Do you in all cases determine by what
route the freight shall go?
Mr. Huckin. X o, sir.
Commissioner Prouty. You say you do not determine that all the
time. Who does determine it ?
Mr. Hi ckix. That is more a matter of policy with the department.
Commissioner Prouty. The department indicates to you that a
certain amount of traffic is to go by one route and a certain amount
by another route ?
Mr. Huckin. Xo, sir; they do not say that exactly.
Commissioner Prouty. Just what do they say?
Mr. Huckin. I have no specific instructions about it.
Commissioner Yeomans. Do they designate as to each shipment
the routing of it ?
Mr. Huckin. The routing is sometimes designated bv consignees.
27
and it sometimes depends on the location of the consignee, or of the
warehouse where the stuff is to go to.
Commissioner Pkotjty. Take a competitive point that can be
reached by a great.many lines—three or four lines—there are a great
many of those points ?
Mr. Huckix. Yes, sir.
Commissioner Prouty. Who determines which line shall be
patronized ?
Mr. Huckix. About all the lines are patronized. There is not
much to be determined, except to keep the business moving.
Commissioner Proutv. If the}' load up a car for Omaha or Kan¬
sas City, say, who determines by what line it shall go?
Mr. ÍIuckix. The chief clerk does most of the actual routing.
Commissioner Prouty. Who instructs him ?
Mr. Huckix. The Department, as a whole.
Commissioner Prouty. Is your competitive traffic pretty evenly
divided among the different lines?
Mr. Huckix. I should say it was pretty evenly divided.
Commissioner Prouty. Your intention is to divide it evenly?
Mr. Huc kix. As a general proposition.
Commissioner Prouty. You say you make out claims for damages
against the different roacls. Is that clone by you, or under your
supervision ?
Mr. Huckix. It is done under my supervision.
Commissioner Prouty. Do you have a good many of those claims?
Mr. Huckix. We have quite a few.
Commissioner Prouty. About what will those claims amount to in
a year?
Mr. Huckix. They would amount to several thousand dollars. I
would like to refresh my memory before giving the actual figures.
Commissioner Prouty. What is the nature of those claims?
•Mr. Huckix. Overcharges and breakages.
Commissioner Prouty. Could you give us approximately the
amount of them? Would it be $2,000, or $50,000, or $100,000?
Mr. Huckix. I coidd not give it to you approximately.
Commissioner Prouty. Have you the figures by referring to which
you could state the amount ?
Mr. Huckix. Yes, sir.
Commissioner Prouty. "Won't you file a statement showing the
amount of those claims?
Mr. Huckix. You must remember that the business heretofore has
been operated under separate divisions and that accounts for my
not knowing about the whole of them. The division I handled I can
talk about more particularly.
Commissioner Protjty. You have charge of that business now for
all the departments of the Harvester Company?
Mr. Huckix. Yes, sir.
Commissioner Prouty. And you could file a statement showing-
how much their claims would amount to for the last year—for the
year ending January 1?
Mr. Huckix. Yes, sir.
Commissioner Fifer. Do you always route the shipments to meet
the wishes of the consignee?
28
Mr. Huciiix. Xot always: it depends on conditions.
Commissioner Fifer. Do you ever do it?
Mr. Hickix. Yes, sir; frequently.
Commissioner Fifer. Do you do that even though it makes the ship¬
ments unequal between the competing lines?
Mr. Hickix. That business evens itself up pretty well in the course
of a season.
Commissioner Fifer. Does it do so naturally or is it brought about
by the man who controls it ?
Mr. Hickix. Xo ; it would come around quite naturally, because
the consignees are numerous and the destinations are various.
Commissioner Fiff.r. How many of your shipments, or what pro¬
portion of them, are routed according to the wish of the consignee ?
Mr. Hrcivix. I do not think I could give any exact idea of that, or
anvthing near an exact idea. A great deal of freight is shipped to
the company's own warehouse and then afterwards distributed.
Commissioner Fifer. In shipping that, then, you try to equalize
the shiuments between the competing lines?
Mr. Hi tivix. Pretty well, wo do: yes.
Commissioner Fifer. Suppose there was a road that had no con¬
tract with you for this service, would von send any goods over their
line unless you were compelled to—I mean a read that you didn't
have this arrangement with ?
Mr. Hrcivix. For the division of rates?
Commissioner Fifer. Yes. sir.
Mr. Ilr eivix. We do it. but not to any very great extent.
Commissioner Fifer. You would not do it to a competitive point,
provided you had a traffic arrangement with one of the roads leading
to that point ?
Mr. Hrcivix-. All things being equal. I should ihink we would not.
Mr. Marchand. You were asked by Commissioner Proutv as to the
total number of cars handled by the Chicago, West Pullman and
Southern Road during the last vear, and what was your reply?
Air. IIvckix. For the year ending December bl last—that is. the
last period for which we have compiled figures—I stated that the
total was 12.000 cars, approximately.
Mr. Marciiaxd. Can you tell about the Illinois Xorthern ?
Mr. Hrcivix. Xo, sir: my connection with that has been too recent.
Mr. Marciiaxi>. That 12.000 cars embraces cars to all points, in
and out ?
Mr. Hrcivix. Yes. sir.
Commissioner Proitv. What equipment has the West Pullman
road ?
Mr. Hrcivix. One locomotive.
Commissioner Proi tv. How many men does it employ in the oper¬
ation of the road ?
Mr. Hrcivix. About twenty or twenty-live, perhaps.
Commissioner Proitv. Those are employed in keeping the road
in repair and in handling the traffic?
Mr. IlrcKix. Running locomotives and conducting station work.
Commissioner Proi tv. Is there a station on that line?
Mr. Hrcivix. Yes, sir.
29
Commissioner Prouty. You handle less than carload freight in
and out of that station ?
Mr. Hue kin. Yes, sir.
Witness excused.
O. TV. Jones, having been duly sworn, testified as follows:
Mr. Marchand. Mr. Jones, your initials are O. TY. ?
Mr. Jones. Yes. sir.
Mr. Marchand. TYhat is your occupation?
TIr. Jones. General traffic manager of the International Harvester
Company.
Mr. Marchand. TYhat office do you hold with these railroads
owned by the International Harvester Company ?
Mr. Jones. I am vice-president of the Illinios Northern and presi¬
dent of the Chicago. TYest Pullman and Southern railways.
Mr. Marchand. TYith what line did you make the first percent¬
age division in connection with the Chicago, TVest Pullman and
Southern.
Mr. Jones. TYill you allow me to explain, so that my ignorance will
be accounted for? I am a new man in this position, and do not pre¬
tend to know a great many details that ordinarily would be known by
a man in my position. I have been but a short time in the traffic busi¬
ness. and consequently I think you are entitled to know that, because
I will not be able to answer some questions that you might think T
ought to answer. TYhat was the question, please ?
Mr. Marchand. I asked you what was the line with which you
made the first joint rate, the first percentage division, in connection
with the Chicago, TYest Pullman and Southern road ?
Mr. Jones. Sly connection with both roads in an official capacity
is of very recent occurrence, and I can not tell you.
Mr. Marchand. How recent, Mr. Jones ?
Mr. Jones. I think I have been made an officer of the road in the
last two months.
Mr. Marchand. Prior to that had you charge of the traffic of the
International Harvester Company?
Mr. Jones. That only dates to a recent date. I think I was made
traffic manager about December 1 of last year.
Mr. Marchand. How long have you been a traffic official of the Illi¬
nois Northern?
Mr. Jones. I am not a traffic official of the Illinois Northern.
Mr. Marchand. TYere you ever ?
Mr. Jones. No, sir.
Mr. Marchand. I was going on the statement of your counsel, who
said you knew more about this subject than anybody else.
Commissioner Proutty. TYhat was your position before?
Tir. Jones. I was connected with the Piano Manufacturing Com¬
pany as secretary and treasurer.
Commissioner Prouty. TYhat traffic qualities did you have uhich
induced (hem to put you where you now are?
Mr. Jones. That is a conundrum.
Mr. Knapp. I suggested that Mr. Jones be called because he can
throw some light upon the general results of the operation of the
road. That subject was inquired about and the party asked did not
have (lie figures, and Mr. Jones has some of them.
30
Mr. Marchand. I will ask a general question, if that is what he
knows : What financial benefit has accrued to the International Har¬
vester Company, either the Piano division or the McCormick division,
by reason or these joint rates in effect ?
Mr. Jones. None whatever.
Mr. Marchand. None whatever ?
Mr. Jones. Not a dollar in money.
Mr. Marchand. Well, what is the advantage, then, in owning a
railroad ?
Mr. Jones. It is a very great advantage for an industrial plant to
have its switching business clone as it ought to be and when it ought to
be done. It is a very great thing, and such services have been done
for such industrial plants as ours for a great many years by the rail¬
roads wholly. As it was explained to you by a former witness, such
services, notwithstanding that the railroads attempted to do them as
well as they knew how, were unsatisfactory: consequently the need of
railroads to serve the International Harvester Company interest in
general.
Mr. Marchand. Now, how long were you connected with the Piano
division of the International Harvester Company works?
Mr. Jones. Well, the Piano division was only in existence, say, for
about a year. I was with the Piano Manufacturing Company from
its inception, in some capacity or other.
Coinmi-sioner Proctv. What was the Piano Manufacturing Com¬
pany ?
ilr. Jones. It was a manufacturing industry, first located at Piano,
111., then afterwards at Chicago, at West Pullman.
Commissioner Proyty. That industry is on the line of the West
Pullman and Southern Railway?
Mr. Jones. Yes, sir; on the Chicago, West Pullman and Southern.
Commissioner Proyty. When was that railroad built ?
Mr. Jones. That railroad was built by a real-estate syndicate to
serve industries that might locate there. It was a real-estate propo¬
sition pure and simple in its inception. The real-estate company gave
the various trunk lines the right to operate over it and serve these
industries for a time; but they got into financial difficulties and sort
of abandoned the road; it got into bad physical condition and other¬
wise. so it became necessary for the manufacturers at West Pullman
to protect their own interest and buy up that property and add to it
other properties that were necessary to make it what it is to-day.
Commissioner Proyty. When was the Piano Company's works
built there !
Mr. Jones. In 1903.
Commissioner Proyty. Was the road there before your company
was located there?
Mr. Jones. The road was built there in part, I should say. about
1901.
Commissioner Proyty. To what extent do you lia ve occasion to do
switching service about your Piano piano works, or what were for-
merlv the Piano works ?
Mr. Jones. To what extent?
Commissioner Protty. To what extent?
Mr. Tones. It is very necessary to have an exceedingly prompt
service, and unless there is an engine at hand to do that work very
31
promptly it is a big loss to the plant. For instance, if there is a
crowd of workmen waiting for a car of this stuff or the other, time is
lost : the employees are being paid for that time, and unless the rail¬
road service is performed promptly there is a loss; things of that
nature.
Commissioner Prouty. It appears that formerly the McCormick
Company found that was so important that they constructed their
own tracks, bought their own locomotives, and did that service them¬
selves. Did your company find it necessary to do that
Mr. J ox es. It did find it necessary to do so, and it bought this road
for that purpose, or bought an interest in this road, with others, for
that purpose. Prior to this time, while it was located at Piano, this
entire service had been done without any expense to that company by
the railroad of the place. The railroad had exclusive control of the
property; it was the gateway into the plant, and consequently for
that reason was perfectly willing to serve us very satisfactorily.
Commissioner Prouty. How large an interest in that road did
your company buy—the Piano Company ?
Mr. Jones. The Piano Company acquired, I am not positive
whether it was a half interest or a trifle more.
Commissioner Prouty. And who acquired the balance of the
interest ?
Mr. Jones. Other manufacturing interests in West Pullman, or
their representatives there.
Commissioner Prouty. Is the switching service performed for vour
company and for other companies alike?
Mr. Jones. Yes, sir; every industry 011 the railroad is served in
like manner.
Commissioner Prouty. Does the income of the road suffice to oper¬
ate it ?
Mr. Jones. Yes, sir.
Commissioner Prouty. How much more than that ?
- Mr. Jones. Since the incorporation of the road it has paid a divi¬
dend of 10 per cent on its capital stock to its stockholders up to—well,
it has paid three dividends to its stockholders since its inception, of 10
per cent, and it has a surplus at the present time, if my memory
serves me correctly, of about $12,000—a little less or a little'more.
Commissioner Prouty. Someone has testified that the year ending
December 31,1903, you handled 12,000 cars over that roacl.
Air. Jones. Yes; that may be so.
Commissioner Prouty. Do you have any idea of what the average
amount you receive per car is, or what your total income was for the
year ?
Mr. Jones. Yes, sir; I know that fact, but I have not got it so I
can tell it to you now.
Commissioner Prouty. Can you give us approximately the income ;
I mean the gross income ?
Air. Jones. No; my mind does not remember the gross income. It
remembers more about the net result.
Commissioner Prouty. What was the net result for that year ?
Mr. Jones. What year?
Commissioner Prouty. For the year ending December 31, 1903.
Mr. Jones. The railroad year ends July 1.
Commissioner Prouty. What was the net resuit for the year ending
June 30, 1903 ?
Mr. Jones. It was something about $1.000 net income, net result of
the operation of the roach operated economically, without any pay to
its officers except such as gave their entire time to it.
Commissioner Prouty. Do any of the industries located upon that
road pay anything in addition to the regular freight rate ?
Mr. Jones. Xot on through business. They might on local busi¬
ness. They might have to pay switching charges on local business as
I understand it.
Commissioner Prouty. The greater part of the income of the road
is derived from the division of the through rate ?
Mr. Jones. That, and switching charges, which are absorbed by
connecting lines.
Mr. Knapp. Can you give practically the same figures with regard
to the Illinois Northern ?
Mr. Jones. Yes: I think I can. The Illinois Northern, for this
fiscal year, up to April 1. has made a deficit of something like $12,000.
Commissioner Prouty. You will have to increase your charges, Mr.
Jones. About how much of a switching charge cío you think you
would have to have to come out even on the Illinois Northern? If
$12 a car is not enough, what v oukl he enough ?
Mr. Jones. 1 beg your pardon for explaining. The revenue is not
Si-2 a car. There is a great deal of this business that carries with it
what has been termed here a division of the rate; the revenue miglit
not be more than three or four or five or six dollars; it depends upon
its location. A great deal of that freight, the largest part of that
freight, does not bring any such amount as has been mentioned.
Commissioner Prouty. All that goes to the. Missouri River for
beyond does ?
ilr. Jones. No; not at all: all that may go over these particular
lines, with which the witnesses have testified there are divisions of
the rates.
Commisioner Prouty. What lines leading to the Missouri River
allow von no division of the rate ?
Mr. J< inks. 1 think the Illinois Central does not.
Commissioner Prouty. Do you ship over the Illinois Central to
points that can be reached by competing lines?
Mr. Jones. Yes, sir.
Commissioner Prouty. What do you do that for?
Mr. Jones. There are various reasons surrounding a proposition
of that kind. Sometimes it may be because a car may not be obtaina¬
ble from one line and is obtainable from another. It may be in other
cases that time is very important, and in that case the shortest and
the most direct route possible is taken in preference to a longer one.
notwithstanding there may he divisions of the rate. The importance
of getting the stuff is greater than the direct revenue.
Commissioner Prouty. (iencrally speaking, you have a division on
all traffic which goes South. haw you not. to the Ohio River and
points beyond ?
Mr. Jones. No. sir.
Commissioner Prouty. Have you with any of those lines?
Mr. Jones. I think not.
33
Commisioner Prouty. You receive the division on traffic destined
to the west ?
Mr. Jones. Yes, sir.
Commissioner Prouty. What part of your entire traffic is that ?
Mr. Jones. Of the International Harvester traffic?
Commissioner Fifer. "What did it cost to build and equip this
road ? About how much money invested ?
Mr. Jones. Answering, first, the question of Commissioner Prouty,
about the proportion, I am unable to guess at that. I should say, per¬
haps, 10 per cent of it. or 30 per cent ; maybe more or maybe less. It
is mere guess work.
Commissioner Prouty. The International Harvester Company han¬
dles traffic which does not originate either on the Illinois Northern or
on the West Pullman ?'
Mr. Jones. Yes, sir; these railroad men do a full-fledged railroad
business. They handle freight in any quantities that is brought to
them, less than carloads as well as carloads
Commissioner Prouty. Your company has certain works located at
South Chicago?
Mr. Jones. Yes, sir.
Commissioner Prouty. And those works are not on either one of
these roads?
Mr. Jones. No, sir.
Commissioner Prouty. Do you have a railroad down there ?
Mr. Jones. No.
Commissioner Prouty. You have switch tracks down there?
Mr. Jones. Yes, sir.
Commissioner Prouty. You have a locomotive there?
Mr. Jones. Yes, sir; several of them.
Commissioner Prouty. You pay the expenses of maintaining the
tracks and the locomotives ?
Mr. Jones. Yes, sir.
Commissioner Prouty. Do you know what it costs you to operate
those tracks ?
Mr. Jones. I would like to explain that the nature of the service at
a steel plant is exceedingly different from that at a harvester plant,
and it is not as reasonable a proposition, as it seems to me, and as it
seems to other people, that a railroad should do all the service that
may be performed around the steel plant, while the long-established
precedent in and around harvester plants is that it is a reasonable
service that the railroads do, and that the railroads are anxious to do
it if they ard the gateway to the factories and are thus able to get the
first chance at the business.
Commissioner Prouty. Do you receive any switching charge or
any division on your South Chicago traffic in or out?
Mr. Jones. No, sir.
Commissioner Prouty. Nothing at all?
Mr. Jones. Nothing, that I know of.
Mr,. Knapp. The question was asked here as to the number of em¬
ployees connected with the operation of the Illinois Northern. Are
you able to state that?
Mr. Jones. Yes, sir; I see that statement every month. It ranges
from 85 to 100 employees in the operating department.
i c c—05 3
34
Mr. Knapp. Did von personally have anything to do with making
the arrangement with the trunk lines for division« ?
Mr. Jones. No, sir.
Mr. Knapp. What is the reason, in your mind, why the Illinois
Northern is allowed 20 per cent of the through rate by trunk lines?
Mr. J ones. I could not give you any better reason than that which
I have stated, perhaps, in part, anyway, that the location of that rail¬
road is such that it miturallv controls that freight. It is the gateway
into the plant, and it gets naturally, without any artificial means, the
first chance at that freight.
Commissioner Protty. What is the object in having the first
chance if you are losing $12.000 a year nut of the traffic?
Mr. Jones. That is perhaps bad business management, because we
are not getting enough for doing that service.
Commissioner Proyty. You will have to persuade some of these
railroads to give you more, won't you ?
Mr. Jones. \Ye will have to persuade ,-omebody somewhere on some
service, rather than then» gentlemen.
Mr. 3 Iarciiand. Do ton know when the trunk lines first made
their divisions with the Illinois Northern?
Mr. Jones. Only in a general way.
Mr. March \nd. When was it ?
Mr. Jones. I do not think they have been made more than three or
four or five or six months.
Mr. Marchand. Now, prior to that, the Illinois Northern road got
nothing for this service which it performed ?
Mr. Jones. Yes. sir; it did.
Mr. March ind. A switching charge?
Mr. Jones. Yes. Jr.
Mr. Marchand. Well, it must have lost a good deal of money, then,
when it only got $2.50 or $3 a car, whatever your switching charge
was.
Mr. Jones. It possibly had more business to perform during that
period than it has now, and consequently that would increase its
revenue.
Mr. Marchand. Is the International Harvester Company doing less
business to-day than it did a year ago ?
Mr. Jones. I think the entire country is ; yes.
Commissioner Prouty. Do you pay the full published tariff rates
now in all cases?
Mr. Jones. Yes, sir ; we do.
Mr. Marchand. That is all, Mr. Jones.
Witness excused.
Mr. Marchand. I would like to recall Mr. Montgomery just for one
question.
F. B. Montgomery, recalled.
Mr. Marchand. Mr. Montgomery, I would like to have a little
more definite testimony upon the subject as to when the first divisions
were made between the trunk lines and the Illinois Northern.
Mr. Montgomery. My recollection is the first division was put in
in September last.
Mr. Marchand. Do you know what was the first line with which
you made a division?
35
Mr. Montgomery. I think the Wisconsin Central Kailroad.
Mr. Marchand. Then, who followed ?
Mr. Montgomery. I would not be sure how it came.
Mr. Marchand. What division did you first allow the Wisconsin
Central ?
Mr. Montgomery. The Wisconsin Central allowed us 20 per cent.
Mr. Marchand. That is the same division you have now ?
Mr. Montgomery. Yes, sir; the same division.
Mr. Marchand. And prior to last September this service was per¬
formed for $3 a car ?
Mr. Montgomery. $3 a car switching charge.
Mr. Marchand. A uniform charge to any "point ?
Mr. Montgomery. Yes, sir.
Mr. Marchand. That is all.
Witness excused.
J. J. Waite, having been duly sworn, testified as follows :
Mr. Marchand. What are your initials, Mr. Waite?
Mr. Waite. J. J.
Mr. Marchand. What is your occupation ?
Mr. Waite. I am in charge of the freight department of Hibbard,
Spencer, Bartlett & Co., and I also perform the same duties for Reid,
Murdoch & Co.. and I am president of the Merchants' Lighterage
Company.
Mr. Marchand. Who are Reid, Murdoch & Co. ?
Mr. Waite. They are wholesale grocers and manufacturers, in
Chicago.
Mr. Marchand. Located in Chicago?
Mr. Waite. In Chicago; yes, sir.
Mr. Marchand. Explain to the Commission what the Merchants'
Lighterage Company is.
Mr. Waite. The Merchants' Lighterage Company is an Illinois
corporation, chartered to do a transfer business on the water.
Mr. Marchand. AVhat water do you ply on ?
Mr. Waite. On the Chicago River.
Mr. Marchand. From what points?
Mr. Waite. From any point on the river where we can get freight,
from the mouth of the river down to the McCormick AVorks.
Mr. Marchand. What equipment have you; what boats do you
own?
Mr. Waite. We have the steamer Swan. That is owned by the
company, and we have the steamer M. TI. Talcott, which is under
charter.
Mr. Marchand. You are president of the Merchants' Lighterage
Company ?
Mr. Waite. Yes, sir.
Mr. Marchand. AVhat other officers are there in this company?
Mr. AVaite. Secretary and treasurer.
Mr. Marchand. AA7ho is the secretary ?
Mr. Waite. Mr. F. L. Macomber.
Mr. Marchand. AATiat is his other occupation; what are his other
duties ?
Mr. Waite. In charge of the credit and collection departmènt of
Hibbard, Spencer, Bartlett & Co.
36
Mr. Marchand. And who is the other officer ?
Mr. AAAite. Mr. C. B. Whipple.
Mr. Marchand. What other occupation has he?
Mr. Waite. Assistant secretary of Hibbard, Spencer. Bartlett & Co.
Mr. Marchand. M ho owns this stock in this Merchants' Lighter¬
age Company ?
Mr. Waite. Mr. C. H. Conover.
Mr. Marchand. What is Mr. Conover"s occupation?
Mr. Waite. He is vice-president of Hibbard. Spencer. Bartlett & Co.
Mr. Marchand. How much is your company capitalized for?
Mr. AA ai te. I think that only $2,500 worth of stock has been issued.
That is held by Mr. Conover. Whether that is the total authorized
capital or not Í do not remember.
Mr. Marchand. Do von own anv stock. Mr. Waite ?
Mr. AT aite. Xo, sir.
Mr. Marchand. Do von own anv terminals or wharves?
Air. W aite. We have rights at the dock house owned by the Siblev
Warehouse Company at the foot of Dearborn avenue. We pay a
rental there.
Air. AIarchand. That is on the south side of the river, is it?
Air. Waite. It is on the non h side of the river.
Air. AIarciiand. Xow. Air. Waite. have you joint tariff arrange¬
ments with the trunk lines—with the main lines leading out of
Chicago ?
Air. AT aite. AYe have with some of them.
Air. AIarciiand. What lines have von joint arrangements with?
Air. AT aite. AVith the Chicago, Alilwaukee and St Paul: the AVis-
consin Central ; the Chicago and Alton
Air. AIarchand. AA lien did you file a joint tariff with them?
Air. Y Aite. I could not give you the exact date. That tariff must
be 011 file with the Commission Pardon me; I don't know
whether they have issued a joint tariff or not.
Air. AIarciiand. Have von a joint tariff with the Atchison road?
Air. AT aite. AAs, sir.
Air. AIarciiand. Since when?
Air. AAAite. That date I could not recollect. It is on the tariff.
Air. AIarchand. Have von a joint tariff with the Alton?
Air. AT aite. Xo, sir; I think we publish no tariff.
Air. AIarchand. AATith the Burlington?
Air. Waite. I don't know whether they have published a tariff or
not. I have not a copy of it.
Air. AIarchand. Have you with the Great Western ?
Air. AAtaite. A'es : they have published a tariff.
Air. AIarc iiand. Have you with the Bock Island?
Air. AAAite. Yes, sir.
Mr. AIarciiand. AA'hat division does the Merchants Lighterage
Company get on traffic delivered to these lines that you have named?
Mr. AAAite. From nothing up to 5 cents a hundred as the maximum.
Commissioner Prouty. Do you mean that there is certain traffic
upon which you get nothing, or certain companies from which you
get nothing?
Air. AAAtte. Both.
Mr. AIarciiand. Do you interchange traffic with the lines with
which you have no divisions?
37
Mr. Waite. We have been doing so ; yes, sir.
. Mr. Marchand. Your rate, your part of the through rate, is 5
cents for the first four classes, is it not ?
Mr. Waite. Yes, sir; where the rate is large enough so that the
rail carrier feels it can afford to pay anything for the service.
Mr. Marchand. And 3 cents for the balance of the classes?
Mr. Waite. Three cents on carloads.
Commissioner P rout v. What classification are you talking about,
Mr. Waite—the Western Classification ?
Mr. Waite. Yes, sir; the Western.
Mr. Marchand. How long has this boat line been in operation ?
Mr. Waite. I think we started the Swan on the 1st of March, 1903.
Mr. Marchand. Tell me the line with which you first made a
division.
Mr. Waite. The Chicago and Alton.
Mr. Marchand. Prior to the putting on of these boats, traffic from
Hibbard, Spencer. Bartlett & Co. was carted, was it not, to the vari¬
ous depots ?
Mr. Waite. Some of it.
Mr. Marchand. And they performed that service without compen¬
sation, did they ?
Mr. Waite. I don't quite understand your question.
Mr. Marchand. Did Hibbard. Spencer, Bartlett & Co. assume the
cost of cartiige ?
Mr. Waite. Most of it.
Mr. Marchand. What part of it did they not?
Mr. Waite. In some cases where we could not have cars set in at
our warehouse, or we could not get the cars, we were obliged to team
it. The roads assumed the cartage in lieu of switching.
Mr. Marchand. What were you allowed for cartage, do you recall?
Mr. Waite. The cost of the switching.
Mr. Marchand. And what is that ?
Mr. Waite. It varies from $1.50 to $5.25.
Mr. Marchand. Do you issue bills of lading?
Mr. Waite. The Merchants' Lighterage Company?
Mr. Marchand. Yes, sir.
Mr. Waite. We have not issued any ; no, sir.
Mr. Marchand. You do not issue any ?
Mr. W vite. Xo, sir.
Mr. Marchand. Do you give a waybill or receipt for the goods?
Mr. Waite. Do you mean to the shipper ?
Mr. Marchand. Yes, sir.
Mr. Waite. We give a receipt to the shipper.
Mr. Marchand. What responsibility does your company assume?
Mr. Waite. We assume the ordinary responsibilities of a common
carrier while the goods are in our possession.
Mr. Marchand. You assume no responsibility beyond your own
line?
Mr. Waite. Xo, sir.
Mr. Marchand. To what lines clo you deliver at your wharf, on the
north side of the river?
Mr. Waite. From there, you mean?
Mr. Marchand. Yes, sir.
Mr. Waite. To the Santa Fe, the Alton, the Rock Island, the
38
Burlington, and the Great M estern. and I think we will commence to
deliver to some of the other lines shortly.
Mr. Marchand. The Northwestern?
Mr. Waite. No, sir: not to the Northwestern.
Mr. Marchand. "Where does the Northwestern reach your line?
Mr. Y\ aite. We have been making deliveries to tliem at Sixteenth
street, but we are not doing so now.
Mr. Marchand. Is that on the south or west side?
Mr. "Waite. On the west side.
Commissioner Proety. How does the expense of transporting the
merchandise by water compare with what the expense was in doing
it formerly by dray age ?
Mr. Waite. I am sorry to say it is greater.
Commissioner Proctv. Taking the whole transaction, do you make
anything out of it ?
Mr. Waite. We did make some money at the start, but I think we
are now losing money.
Commissioner Proety. Your warehouse is so situated that you can
deliver from the warehouse to the boat ?
Mr. Waite. You mean this warehouse at Dearborn avenue?
Commissioner Proe ty. 1 mean the warehouse of Hibbard, Spencer,
Bartlett & Co.
Mr. Waite. They are 011 the river; yes, sir.
Commissioner Proe ty. So you can load from them directly into the
boat?
Mr. Waite. Yes, sir.
Commissioner Prouty. And take it by the boat to the railroad?
Mr. Waite. Yes, sir.
Commissioner Proety. You say in some cases cars are set in so
that you can load directly into the cars from the warehouse and from
the cars to the warehouse ?
Mr. W aite. From Hibbard. Spencer. Bartlett & Co.'s warehouse;
yes. sir.
Commissioner Proety. Do you still load into the cars and unload
from the cars, or do you carry that traffic by lighter now?
Mr. Waite. All cars set in we unload right at the warehouse.
Commissioner Proe ty. You say you never unload by your lighter
cars that could be set in rt your warehouse ?
Mr. Waite. We have not done so : 110. sir.
Commissioner Proety. Have you loaded cars by lighter which
might have been loaded at your warehouse into the cars ?
Mr. Watte. Yes. sir: we have done so.
Commissioner Proe ty. So you do handle some goods by a lighter
that were not formerly handled by drays?
Mr. Waite. Yes. sir.
Mr. Caehoetn. Do you do any other business except the business
of Hibbard. Spencer. Bartlett & Co.?
Mr. W a;te. Yes, sir.
Mr. Cat.iioen. Do you carry traffic generally. 011 the river ?
Mr. W vite. Yes, sir.
Mr. Caliioen. What other advantages, aside from the financial
consideration, is there in having this system of transportation to
reach these depots?
Mr. Waite. That is quite a story. As you perhaps know, we have
89
had a great deal of trouble with teamsters in Chicago, and Hibbard,
Spencer, Bartlett & Co. had erected these two buildings on the river,
and the idea occurred that it would be a good plan to try rive;]' trans¬
fer, as done in other cities. I was instructed to form a company for
that purpose, and we did so, and Ave have been experimenting with
that proposition. Between the two Avarehouses of Hibbard. Spencer,
Bartlett & Co. it is quite ad vantageous, because goods arriving in cars
at one warehouse can be loaded onto platform trucks and the trucks
run right across the dock onto the boat and then off the boat to the
dock and taken to the elevator and taken upstairs to AvhereA'er they
want them to go without any handling, besides the handling from
the car onto the truck and from the truck into the pile. By team, of
course, there were seA'eral handlings. That business betAveen the íavo
Avarehouses has been quite an aArerage business to the Lighterage Com¬
pany.
The business of delivering to the railroads from Hibbard, Spencer,
Bartlett & Cods dock and from the Dearborn aA'enue dock has
not shown such satisfactory figures. To get back to the question, the
further advantage is that Ave have íavo methods of delivering goods.
If the teamsters tie us up on the street, why Hibbard, Spencer, Bart¬
lett & Co. and other people Ave reach can' deliver by water; or, if
Ave were tied up 011 the river, if there Avas a strike there, Ave would
have the teams. Does that answer your question, Mr. Calhoun ?
Mr. Calhoun. Yes, sir. That was one of the prime reasons for
the organization of the Lighterage Company, was it not?
Mr. Waite. I think thai was the entire reason; yes. sir. If the
Commission avouIcI like to hear it. there are some other facts that
have not been brought out.
Commissioner Yeomans. You may state them.
Mr. Waite. In regard to the OAvnership and formation of the com¬
pany, I found when I started to agitate the question of river trans¬
fer that the river people here were averse to the idea. They said
that Captain Duncan, who formerly did the business, had investi¬
gated the proposition and decided that there Avas nothing in it and
nothing to be made. There was no offer of support from anybody
else. Then, I was instructed to go and buy a boat and try it, and I
Avas instructed to draAV on Hibbard, Spenee, Bartlett & Cors cashier
for what money I needed. We bought the boat and put it in serv¬
ice, and stock issued sufficient to take care of the expense. That
cer, Bartlett & Co. We have gone no further in the formation of
the company or in getting others to take stock. I haA*e taken none
myself, because Ave are still experimenting with river transfer. I am
sorry to say that the proposition does not look like it Avas going to
be a success. We have three unions to deal with on the river, and
their exactions are large. We also have the Government regulations,
which cause us considerable expense.
Witness excused.
A. F. Banks, having been duly SAVorn, testified as follows:
Mr. Marchand. Mr. Banks, state your initials, please.
Mr. Banks. J. F. Banks.
Mr. Marchand. What is your occupation ?
Mr. Banks. President of the Elgin, Joliet and Eastern and the
Chicago, Lake Shore and Eastern.
40
Mr. Marchand. Yon are located here in Chicago, are you not?
Mr. Banks. Yes, sir.
Mr. Marchand. State to the Commission the location of the Elgin,
Joliet and Eastern and the Chicago, Lake Shore and Eastern, please.
There is a map behind von.
Mr. Banks. The Elgin, Joliet and Eastern—-the northern terminus
is at W aukegan ; then the line passes around, following that brown
line on the map, through Joliet, over east to Porter. Inch The eastern
terminus is now shown there. We have a branch line running from
Griffith up to Clark Junction; another branch into Whiting; another
branch line over to Aurora ; another branch line from Walker down
here into the coal fields [indicating]. Walker is just north of Joliet.
Mr. Marchand. This is the Elgin. Joliet and Eastern you are
speaking of now ?
Mr. Banks. Yes, sir.
Mr. Marchand. What is the mileage operated by the Elgin. Joliet
and Eastern branch ?
Mr. Banks. If you will allow me. I will refer to some notes as I go
along. I supposed you would want something of this kind. There
are 205.93 miles of main track ; other tracks bring our total up to 3331
miles.
Mr. Marchand. Is that 3331 miles owned by the Elgin, Joliet and
Eastern ?
Mr. Banks. Yes. sir.
Mr. Marchand. Is the Elgin. Joliet and Eastern a corporation of
the State of Illinois?
Mr. Banks. It is.
Mr. Marchand. What is it capitalized at ?
Mr. Banks. $6,000,000.
Mr. Marchand. And you have an issue of bonds?
Mr. Banks. Eight and one-half.
Mr. Marchand. What equipment have you, Mr. Banks?
Mr. Banks. We have 58 engines and 2,648 cars.
Mr. Marchand. Do you operate any mileage under lease or con¬
tract ?
Mr. Banks. The Elgin, Joliet and Eastern.
Mr. Marchand. Yes, sir.
Mr. Banks. A short distance of t'he Western Indiana, from what is
called State Line up to One hundred and sixth street. Just what the
distance is I do nut remember.
Mr. Marchand. Where is the Chicago, Lake Shore and Eastern
road located ?
Mr. Banks. It is the outside line on this map | indicating] : from
South Chicago along the lake front to Whiting and Indiana Harbor,
over to Clark Junction, with a branch over to Pine, connecting with
the Lake Shore at that point.
Mr. Marchand. How many miles of track does it own?
Mr. Banks. It has tracks at Joliet, Milwaukee, North Chicago,
and the Union Works of the Illinois Steel Company, and also some
tracks at the .-tone quarries and coal mines down near Westville.
Commissioner Prot ty. Confine your attention to that road indi¬
cated on the map there. How long is that ?
Mr. Banks. We hat e 12 miles in the north end of our yard, taking
the line over to Pine Junction.
41
Commissioner Prouty. Is that junction shown on the map?
Mr. Banks. It is not.
Commissioner Prouty. Can you indicate about where it is—how
far from the terminus of the line as shown there?
Mr. Banks. About three-fourths of a mile, or a mile.
Mr. Marchand. How many miles are actually owned by the
Chicago, Lake Shore and Eastern ?
Mr. Banks. 155J miles.
Mr. Marchand. Does the traffic arrangements of the Elgin, Joliet
and Eastern
Commissioner Prouty. It seems that this road owns tracks at a
good many different points, and I think you should confine the atten¬
tion of this witness to this road as represented on the map there.
Mr. Banks. It is all the same road, Mr. Commissioner.
Commissioner Prouty. It may be all the same road.
Mr. Banks. We haue trackage rights connecting up our line by
which we operate our trains through.
Commissioner Prouty. You have trackage rights by which you
operate between Joliet and here ?
Mr. Banks. Yes, sir.
Mr. Marchand. How much trackage does the Chicago, Lake Shore
and Eastern own at South Chicago ?
Mr. Banks. That I woidcl have to furnish you later. I have not
got it with me.
Commissioner Prouty. By South Chicago, do you refer to this
piece of roacl represented on the map from South Chicago down to
Indiana Harbor ?
Mr. Banks. Yes, sir.
Commissioner Prouty. Twelve miles long (
Mr. Banks. Yes, sir; double track.
Commissioner Prouty. Have you a great amount of side track
there
Mr. Banks. I should judge in the neighborhood of 100 miles.
Commissioner Prouty. And that serves some industrial plant or
plants ?
Mr. Banks. Yes, sir.
Commissioner Prouty. What are those plants?
Mr. Banks. The Illinois Steel Company.
Commissioner Prouty. Whereabouts is the Illinois Steel Company
located ?
Mr. Banks. At South Chicago, just north of the Calumet River,
and bordering on the Lake.
Commissioner Prouty. Is the larger part of your switch tracks in
connection with the Illinois Steel Company?
Mr. Banks. Well, we have the switch tracks inside of the plant,
serving the plant.
Commissioner Prouty. Can you tell how many miles of switch
tracks you have inside of their plant ?
Mr. Banks. I can furnish that.
Commissioner Prouty. Can you tell us approximately how many
miles ?
Mr. Banks. No, sir.
Commissioner Prouty. Does the Illinois Steel Company own any
tracks inside of the plant, or do you own and operate them (
42
Mr. Banks. We own and operate all the tracks inside except the
narrow-gauge tracks which the}- hare.
Commissioner Prouty. What are the narrow-gauge tracks
used for ?
Mr. Banks. For hauling hot metal, billets, etc.. with narrow-
gauge engines.
Mr. Marchand. Now, Mr. Banks, with reference to the Chicago,
Lake Shore and Eastern at South Chicago, in connection with the
Illinois Steel Company, with what lines have you percentage
arrangements ?
Mr. Banks. Practically all of them. I do not know of ant7
exceptions.
Mr, Marchand. Have you a uniform percentage arrangement
with the trunk lines?
Mr. Banks. Yes, sir; I think so.
Mr. Marchand. What percentage is that ?
Mr. Banks. It depends on between tvhat points.
Mr. Marchand. We have been discussing Missouri Hiver points.
How about that?
Mr. Banks. My recollection is -20 per cent.
Mr. Marchand. Do they give a switching charge in addition to
that ?
Mr. Banks. No, sir.
Mr. Marchand. Twenty per cent, a uniform division of 20 per
cent to all lines?
Mr. Banks. Twenty per cent, and we make the delivery to them.
Mr. Marchand. That is. the Chicago. Lake Shore and Eastern
makes the delivery ?
Mr. Banks. Yes, sir.
Mr. Marchand. What lines do you connect with directly at South
Chicago ?
Mr. Banks. The Baltimore and Ohio. Lake Shore and Michigan
Southern, the Pennsylvania, the Illinois Central, and the Chicago,
Rock Island and Pacific, the Elgin. Joliet and Eastern, and the
Western Indiana Belt.
Mr. Marchand. For which they pay 20 per cent?
Mr. Banks. Yes. sir; 20 per cent.
Mr. Marchand. In the event of your wishing to make the deliv¬
ery there
Mr. Banks. You mean on Missouri River business?
Mr. Marchand. Yes, sir; I am speaking of Missouri River busi¬
ness. In the event of your wishing to make a delivery from the
South Chicago mills to a line connecting with the Elgin, Joliet and
Eastern at Joliet, what percentage do you allow?
Mr. Banks. Twenty per cent.
Commissioner Prouty. You receive 20 per cent?
Mr. Banks. Yes, sir; 20 per cent.
Commissioner Prouty. The Chicago. Lake Shore and Eastern?
Mr. Banks. Yes, sir.
Commissioner Prouty. And you receive that from the Elgin,
Joliet and Eastern ?
Mr. Banks. Oh, no; the Elgin, Joliet and Eastern has nothing
whatever to do with it. The Lake Shore and Eastern hauls the cars.
43
Mr. Marchand. They hate a trackage arrangement, T understand,
over the Elgin, Joliet and Eastern?
Mr. Banks.-It runs its own trains.
Mr. Marchand. They get 20 per cent?
Mr. Banks. Yes, sir.
Mr. Marchand. What is the distance from the mills at South
Chicago to Joliet?
Mr. Banks. About 50 miles. I think it is a fraction over.
Mr. Marchand. There you get 20 per cent, the same division that
you get for direct delivery at South Chicago ?
Mr. Banks. Yes, sir.
Mr. Marchand. How much of a haul do you make in delivering to
the Baltimore and Ohio ?
Mr. Banks. I should judge it is about 10 miles.
Mr. Marchand. How about the Lake Shore?
Mr. Banks. A little farther to the Lake Shore, out to Pine, to the
junction. I think that is about 12.
Commissioner Fifer. You get 20 per cent from all roads?
Mr. Banks. He is talking about Missouri River points.
Mr. Marchand. On traffic to the East, Mr. Banks, what per cent
do you get ?
Mr. Banks. Ten per cent of the New York rate. I think.
Mr. Marchand. You get that from the Pennsylvania lines?
Mr. Banks. From all lines.
Commissioner Prottty. What do you mean by 10 per cent of the
New Youk rate? Suppose the stuff goes to Pittsburg, what do you
Set?
Mr. Banks. I do not remember what the divisions are on Pitts¬
burg. I will furnish that.
Commissioner Prottty. Yon are talking now about the seaboard
points ?
Mr. Banks. Seaboard points ; yes, sir.
Commissioner Prottty. Ho you know what the Chicago, Lake Shore
and Eastern is capitalized at?
Mr. Banks. Yes, sir; capital stock. $650.000; bonded indebtedness,
$3,330,000.
Commissioner Prottty. Do you know who owns the stock and bonds
of the company ?
Mr. Banks. I can furnish that information Through our secretary.
Commissioner Prottty'. Who is your secretary ?
Mr. Banks. F. D. Raymond.
Mr. Marchand. Mr. Raymond has been subpoenaed, has he not?
Mr. Banks. Yes, sir.
Mr. Marchand. Can Mr. Raymond also furnish the same informa¬
tion with respect to the Elgin, joliet and Eastern?
Mr. Banks. He can.
Commissioner Prottti'. When was the Chicago, Lake Shore and
Eastern road organized ?
Mr. Banks. We can furnish to the Commission a history of its
organization, etc. I only have here the information showing the
Chicago, Lake Shore and Eastern was organized February 17, 1897,
but was the successor of several other organizations. It was a con¬
solidation of all these small lines into one. I think the report which
we make to the Commission shows that.
44
Commissioner Profty. How lona' since von had this connection
with the Elgin, Joliet and Eastern ?
Mr. Banks. I think it is about live years, Mr. Commissioner.
Commissioner Profty. Were von connected with the road at that
time ?
Mr. Banks. I was connected with the Elgin. Joliet and Eastern at
that time—not with the Chicago. Lake Shore and Eastern.
Commissioner Profty. What is the connection now between those
two roads ? Yon are president of both roads ?
Mr. Banks. Yes. sir.
Commissioner Profty. Is there a community of stock ownership
there ?
Mr. Banks. Xo. sir.
Commissioner Profty. Are the operations of the two roads kept
entirely separate
Mr. Banks. Absolutely.
Commissioner Profty. So that the connection is merely a matter
of convenience ?
Mr. Banks. Merely a matter of convenience.
Commissioner Profty. You say that the Chicago, Lake Shore and
Eastern has certain trackage rights over the Joliet road?
Mr. Banks. And other roads.
Commissioner Profty. Confine yourself to the Joliet road now.
What is the nature of those trackage arrangements?
Mr. Banks. So much a train mile for every train operated over the
roach
Commissioner Profty. Why did you find it to your advantage to
enter into that kind of an arrangement rather than to deliver your
traffic to the Elgin. Joliet and Eastern ?
Mr. Banks. The Elgin, Joliet and Eastern had a traffic arrange¬
ment from the Bock Island and Pacific between South Chicago and
Joliet, so that we wanted the revenue and bid for it and got it.
Commissioner Profty. Could you make delivery without the Elgin,
Joliet and Eastern to any western line except the Bock Island?
Mr. Banks. Yes, sir; through the Western Indiana Belt.
Commissioner Proftty. When you deliver to the Western Indiana
Belt, what is your arrangement ? Does the Western Indiana Belt
allow you 20 per cent ?
Mr. Banks. Xo, sir: I suppose what you mean is a shipment going
to the Missouri Biver, how do we handle it ?
Commissioner Profty. Yes, sir. Suppose it is handled by the
Indiana Belt ?
Mr. Banks. If we were to handle it by the Western Indiana Belt,
we would assume their charges.
Commissioner Profty. You would not handle it that way?
Mr. Banks. We would probably handle it in our own trains.
Commissioner Prouty. Could you, without the Indiana Belt, make
deliveries to any western road except the Bock Island?
Mr. Banks. Yes, sir.
Commissioner Profty. Which one?
Mr. Banks. All of them.
Commissioner Profty. How ?
Mr. Banks. Through the Chicago Terminal Transfer Company or
Chicago Junction.
45
Commissioner Prouty. You could not do it without employing
some belt line ?
Mr. Banks. No. sir.
Commissioner Prouty. You do reach the Rock Island over your
own line ?
Mr. Banks. Yes, sir; from South Chicago.
Commissioner Prouty. And you are obliged to employ some one
of these lines in order to bring you into connection with the different
competing Missouri River roads?
Mr. Banks. In that case, yes. However, that is a very small part
of our business. The trackage is for the purpose of handling our own
traffic off the Chicago, Lake Shore and Eastern.
Commissioner Prouty. You have tracks at Joliet?
Mr. Banks. Yes, sir.
Commissioner Proijty. The Lake Shore and Eastern has tracks at
Joliet?
Mr. Banks. Yes, sir.
Commissioner Protty. How much track has it at Joliet?
Mr. Banks. I can furnish that ; I could not state.
Commissioner Prouty. That trackage is in connection with some
steel plant ?
Mr. Banks. Yes, sir.
Commissioner Prouty. What steel plant ?
Mr. Banks. The Illinois Steel Company and the American Steel
and Wire.
Commissioner Prouty. And it bears the same relation to the steel
works there that your tracks at South Chicago do to the steel works
at South Chicago ?
Mr. Banks. Yes, sir.
Commissioner Prouty. You say you have your own tracks at some
other points ?
Mr. Banks. Yes, sir.
Commissioner Prouty. At what other points?
Mr. Banks. Bay View.
Commissioner Prouty. Where is Bay View ?
Mr. Banks. South of Milwaukee.
Commissioner Prouty. A steel plant? You have a plant there?
Mr. Banks. The Illinois Steel Company has.
Commissioner Prouty. Where else ?
Mr. Banks. North Chicago.
Commissioner Prouty. There is a steel plant there?
Mr. Banks. A steel plant and other industries.
Commissioner Prouty. Does the Chicago, Lake Shore and Eastern
operate the tracks, or operate its tracks at Milwaukee, Bay Yiew ?
Mr. Banks. Yes, sir.
Commissioner Prouty. It has the entire expense of operating and
maintaining those tracks ?
Mr. Banks. Yes, sir.
Commissioner Prouty. Does the Illinois Steel Company pay the
railroad company anything for that service?
Mr. Banks. No; that service is covered by the rate.
Commissioner Prouty. You operate as a railroad?
Mr. Banks. Yes, sir; as a railroad.
46
Commissioner Prouty. And you get your pay out of the railroad
rate ?
Mr. Banks. Yes, sir.
Commissioner Proutt. You get nothing whatever from the steel
plant?
Mr. Banks. Except for handling its freight.
Commissioner Prouty. When it ships freight by your line it pays
the published rate ?
Mr. Banks. Yes, sir.
Commissioner Prouty. And you get your compensation from your
division of the published rate, or your switching charge?
Mr. Banks. Yes, sir; or our local haul.
Commissioner Prouty. You heard some witness testify this morn¬
ing that in the general operation the steel plant ought to do its own
switching, while a harvester plant ought to have it done by the rail¬
roads. You do not share in that idea ?
Mr. Banks. Not at all.
Commissioner Prouty. The Illinois Steel Company by this ar¬
rangement secured the handling of its swithching business for noth¬
ing.
Mr. Banks. We think it pays for it in the rate.
Commissioner Prouty. It pays for it the same as if I did my own
switching I would pay for it. You say they pay the rate and do not
pay for the switching ?
Mr. Banks. Yes, sir; they pay it in the rate.
Commissioner Prouty. So the advantage the Illinois Steel Com¬
pany gets is having its switching done for nothing?
Mr. Banks. Any railroad having its rails into the Illinois Steel
Company plant would deliver its freight for the rate it pays. Mr.
Commissioner, if you will allow me, any other shipper receiving a
carload of freight over any road would have that delivered at nis
works, wherever he might designate, without expense beyond the pub¬
lished rate.
Commissioner Prouty. You are probably entirely right about that,
but, Mr. Jones—if I get the name right—testified this morning that
the International Harvester Company maintained switch tracks and
switch engines at South Chicago at its own expense, in connection
with its plant there, because it was not generally considered that
the railroad company ought to bear that expense.
Mr. Banks. I think it is the general practice of all railroads to
do it.
Commissioner Prouty. It does not seem to be the practice in the
case of that plant.
Mr. Banks. That is quite true, probably.
Commissioner Prouty. You think it is the general practice?
Mr. Banks. Yes, sir.
Commissioner Prouty. But it is not the practice of the Illinois
Steel Company.
Mr. Banks. It is not.
Commissioner Prouty. Were these different railroads organized
by the Illinois Steel Company?
Mr. Banks. As to the organization, I will have to have the secre¬
tary give you that information, Mr. Commissioner.
You asked me if the railroad made any charge against the steel
47
company for switching. My reply was no, on any freight that the
railroad hauls in making deliveries to the steel company. It puts
it where it wants it. If. after they make a delivery of a car, they
want to move it some place else, we charge for it.
Commissioner Prouty. What do you charge them?
Mr. Banks. $1.50 inside the works.
Commissioner Prouty. Where was the parent plant of the Illinois
Steel Company located—at South Chicago?
Mr. Banks. That I could not tell you.
Commissioner Prouty. Is the Illinois Steel Company now em¬
braced in what is known as the "steel trust? "
Mr. Banks. The Illinois Steel Company is one of the subsidiary
companies of the United States Steel Corporation.
Commissioner Prouty. Do you know whether the tracks which are
now owned by your company were originally built by the company
pany itself or were originally built by the steel works ?
Mr. Banks. I think it was built by one of the former companies
of which the Lake Shore and Eastern is the successor.
Commissioner Prouty. You think the original tracks were built
by that company ?
Mr. Banks. Yes, sir; that is my understanding of it.
Commissioner Prouty. Do you know how that was at Milwaukee—
Bay View ?
Mr. Banks. As I stated to you a few moments ago, our secretary
can give you the history of it, and lie will give you the information
far better than I can.
Commissioner Prouty. Where the Elgin, Joliet and Eastern and
the Chicago. Lake Shore and Eastern make delivery to a trunk line
through an intermediate belt line, who compensates that road ?
Mr. Banks. The Elgin, Joliet and Eastern does not make any de¬
livery to any other line except directly.
Commissioner Prouty. Have von any further statement to make,
Mr. Banks?
Mr. Banks. I would explain the service which we perform in
handling this business. The Eastern roads turn freight over to us
sometimes in train-load lots. We have got to have large yards to take
care of it and move it over the line of our tracks to the works and
industries along the line of our road and do all the clerical work
attached to any other railroad. We have a pretty large equipment
and a large number of locomotives. We have some 4,500 cars that
are in service, going over other roads.
Mr. Marchand. You are speaking now of the Chicago, Lake Shore
and Eastern?
Mr. Banks. The Chicago. Lake Shore and Eastern. We handle
about 7,700,000 tons of freight a year. One-half of it is local freight
which originates and terminates locally upon our line.
Commissioner Prouty. Do you mean that is freight which the Illi¬
nois Steel Company itself originates ?
^ Mr. Banks. It is freight in and out of the works of the Illinois
Steel Company, which we handle in our own trains, in which no
other railroad has any division of the rate at all, on which we charge
them the local rate, and which they pay.
Commissioner Prouty. You mean freight from Joliet and South
Chicago, for instance, or Milwaukee?
48
Mr. Banks. We handle about 3,500 tons of coal a day in our own
trains over roads over which we have trackage rights.
Commissioner Provty. From the coal mines?
Mr. Banks. Yes. sir; where we have track facilities of our own;
sidetrack facilities.
Commissioner Provty. Name some of those points.
Mr. Banks. South of Danville at Westville. 111.
Commissioner Provty. How clo you reach there?
Mr. Banks. Over the Chicago and Eastern Illinois.
Commissioner Provty. You have trackage rights?
Mr. Banks. Yes, sir.
Commissioner Provty. There is a rate by the Chicago and Eastern
Illinois from those mines to Chicago ?
Mr. Banks. Yes. sir.
Commissioner Provty. The Illinois Steel Company pays to your
company the published tariff rate?
Mr. Banks. Yes. sir: the published tariff rate.
Mr. Knapp. Fame to the Commission some of the industries out¬
side of the Illinois Steel Company that are served by the Lake Shore
and Eastern in the neighborhood of South Chicago.
Mr. Banks. It. E. Brooks, stone, cement, and coal—Gravel Com¬
pany, Illinois Sand Company: and we have general team-track
deliveries at Indiana Harbor, the Hammond Water "Work-, ancl
several others.
Mr. Knapp. "Where a through line or trunk line • delivers cars to
you, and where you get a proportion of the through rate, in what
shape do they make deliveries to you
Mr. Banks. The Pennsylvania delivers it in their own yards out
at Clark Junction. We send a switch engine over to their yards and
get it.
Mr. Knapp. When they deliver it to you it is in full trainload lots ?
Mr. Banks. Y es, sir ; frequently. They drop it in their yard and
we do the switching.
Mr. Knapp. "Where do you put it first ?
Mr. Banks. Take it to the scale tracks and weigh it.
Mr. Knapp. And then from there ?
Mr. Banks. Into the yard at Clark Junction.
Mr. Knapp. Explain what is necessary in order to get that traffic
into the yard of the Illinois Steel Company for final delivery.
Mr. Banks. It may go in one car at a time or five cars at a time.
If it is coke going to the furnace, it will be handled in lots of five cars.
Five cars is all you can put on these high trestles leading to the
blast furnaces.
Mr. Kn app. "Where you get a proportion of the rate, how does that
compare with the local rate according to the Illinois State schedule?
Mr. B anks. Less. We have no division in excess of our distance
tariff.
Commissioner Provty. That is all, Mr. Banks.
F. D. Raymond, having been duly sworn, testified as follows:
Commissioner Provty. We would like to know how long these
division of 20 per cent have been allowed to the Chicago, Lake Shore
and Eastern.
Mr. Marchand. Can you testify about that, Mr. Raymond?
49
Mr. Raymond. No, sir; 1 do not know anything about traffic.
Commissioner Prouty. Mr. Banks, do you know how long the pres¬
ent divisions which are in effect have been allowed the Chicago, Lake
Shore and Eastern?
Mr. Banks. For a number of years, I think, but we will look up all
those figures and give them to the Commission.
Commissioner Prouty. You say for a number of years?
Mr. Banks. Yes, sir; that is my understanding.
Commissioner Prouty. Four or five years?
Mr. Banks. I think longer. I am not sure, however, and will have
that looked up for you.
Mr. Marchand. Mr. Raymond, you have been sworn ?
Mr. Raymond. Yes, sir.
Mr. Marc hand. What is your occupation?
Mr. Raymond. Part of my occupation—I am secretary and treas¬
urer of the Chicago, Lake Shore and Eastern Railway Company,
That is the way my subpoena read.
Mr. Marchand. Are you also secretary and treasurer of the Elgin,
Joli et and Eastern?
Mr. Raymond. I am both.
Mr. Marchand. Can you state to the Commission what division is
allowed on traffic to or from Pittsburg to the Chicago, Lake Shore and
Eastern ?
Mr. Raymond. I have nothing to do with traffic, and I do not knov.
anything about it.
Mr. Marchand. Who is competent to testify to that as to the
Chicago, Lake Shore and Eastern?
Mr. Raymond. I should say the traffic manager.
Mr. Marchand. And what is his name?
Mr. Raymond. F. E. Learned.
Mr. Marchand. When was the Chicago, Lake Shore ancl Eastern
incorporated?
Mr. Raymond. I think Mr. Banks testified that the present cor¬
poration dated from 1897. I am not certain about that year. The
present Chicago, Lake Shore ancl Eastern Railway Company is a
consolidation of an Indiana and an Illinois corporation. I think the
prior organization was ten years ago. But I have only been with
this company four or five years, and my knowledge of the organiza¬
tion prior to that date is only what I have read in the record.
Mr. Marchand. Will you furnish the Commission with a list of
the stockholders and bondholders of the Elgin, Joliet ancl Eastern
and the Chicago, Lake Shore and Eastern ?
Mr. Raymond. Certainly-
Mr. Marchand. Will you do so this afternoon ?
Mr. Raymond. Certainly.
Commissioner Prouty. You do not know anything about the his¬
tory of these properties before you became connected with the road ?
Mr. Raymond. The Chicago, Lake Shore ancl Eastern ?
Commissioner Prouty. Yes, sir.
Mr. Raymond. Yes, sir. Since I have been secretary of the com¬
pany I have had occasion to look up the records prior to my appoint¬
ment, and I have some familiarity, such as I have acquired from
reading the record.
i c c—03 4
50
Commissioner Prouty. You say there were two railroads which
were merged into this one?
Mr. Raymond. The present Chicago. Lake Shore and Eastern
Railway Company is a consolidation of the Calumet and Blue Island
Railroad Company of Illinois with the Chicago. Lake Shore and
Eastern Railway Company of Indiana, the Calumet and Blue Island
Railroad Company, the Illinois corporation, changing its name to
Chicago. Lake Shore and Eastern, and uniting with the road of that
name, which was an Indiana corporation.
Commissioner Prouty. Previous to the consolidation, were the two
railroads operated as one ?
Mr. Raymond. Xo: the Indiana road had not been operated. It
was just completed, ready for operation. .
Commissioner Prouty. By whom was that road constructed?
Mr. Raymond. By the Chicago. Palee Shore and Eastern Railway ~
Company, a corporation of Indiana.
Commissioner Prouty. How long ago was the original Chicago,
Lake Shore and Eastern organized ? ,
Mr. Raymond. That would have been the Calumet and Blue Island
Railroad of Illinois.
Commissioner Prouty. The Calumet and Blue Island.
Mr. Raymond. I can not say. The years are fickle things in my
mind prior to my connection. Should say ten years, perhaps. By
my record I can show that.
Commissioner Prouty. Does your record show by whom it was
organized and built ?
Mr. Raymond. Of course the records show the articles of associa¬
tion and organization—the original stock subscribers.
Commissioner Prouty. Do you understand that was a creature of
the Illinois Steel Company ?
Mr. Raymond. Do you want my impression?
Commissioner Prouty. Yes, sir.
Mr. Raymond. The people who were stock subscribers were more or
less intimately connected with the Illinois Steel corporation.
Commissioner Prouty. Is the Illinois Steel Company, or the
United States Steel Corporation, virtually owner of that road to-day?
Mr. Raymond. I can only tell you who the stockholders are. There
are seven of them. I believe.
Commissioner Prouty. Are any of the steel company's stockholders
in the road ?
Mr. Raymond. Xo. sir; not as a corporation.
Commissioner Prouty. The stockholders are individuals?
Mr. Raymond. The stockholders are individuals.
Commissioner Prouty. You do not know whether they actually
own the stock on their own account or on account of the Steel
Company ?
Mr. Raymond. That is a matter of inference. I know that such
shares of stock a^ have been transferred by me since I was secretary
were in exchange for shares previously issued to other persons. How
they were originally acquired would be. of course, a matter of record.
Commissioner Prouty. Are the persons who now own the shares
identified with the Steel Company?
Mr. Raymond. With the Illinois Steel Company?
Commissioner Prouty. Or the United States Steel Company?
51
Mr. Raymond. The United States Steel Corporation. Judge Gal j
is a stockholder and director.
Commissioner Profit. How large a stockholder?
Mr. Raymond. Very large; almost all of it.
Commissioner Profit. Almost all of it, except what is necessary to
qualify somebody else to be directors?
Mr. Raymond. Yes, sir.
Commissioner Profty. You rather infer from that that the United
States Steel Corporation owns that road ?
Mr. Raymond. If you want my inference, that would be my per¬
sonal. individual inference, as an individual.
Mr. Marchand. Anything further with this witness?
Mr. Raymond. You wanted me to bring a list of the stockholders
of the Chicago. Lake Shore and Eastern?
Mr. Marchand. Yes, sir.
Mr. Knapp. You can give them now, probably.
Mr. Raymond. Yes. sir. There are only seven of them: E. H.
Hary. C. M. Schwab. A. F. Banks, K. K. Knapp. R. B. Campbell. I
am a stockholder, and Mr. Stone.
Commissioner Profit. How much stock do you own?
Mr. Raymond. One share.
Commissioner Prcfty. And ad the others except Mr. Gary own
one -liare ?
Mr. Rai mono. One share each.
Witness excused.
Commissioner Yeomans. We will take a recess until 2 o'clock this
a fternoon.
At 12.30 p. m. the Commission took a recess.
after recess.
May 6, 1904—2 p. nr.
Commissioner Yeomans. You may proceed.
W. W. Ytncent, having been duly sworn, testified as follows :
Mr. Marchand. Mr. Vincent, what is your occupation ?
Mr. Vincent. Auditor of the Illinois Northern Railway.
Mi'. Marchand. Have you any office with the International Har¬
vester Company ?
Mr. Vincent. I am in the same building; yes, sir.
Mr. Marchand. Are you employed by the International Harvester
Company?
Mr. V incent. No; I am employed by the railroad.
Mr. Marchand. How long have you been auditor of the Illinois
Northern ?
Mr. Vincent. Since the 4th of last month—since the 4th of April.
Ali-. Marchand. The Commission would like to have a statement of
)he income and the expenditures of the Illinois Northern Railway
for die past twelve months. You can not testify as to that now, can
you ?
Mr. Vincent. Not for twelve months; no, sir.
Mr. Marchand. Well, I think your honors want a statement of the
gross and net income, do you not ?
Commissioner Prouty. As I remember the testimony, tlie.-e divi¬
sions first began to be paid last September
Mr. Marchand. Yes, sir.
Commissioner Prouty. So that a statement previous to that time
would be an entirely different matter front a statement since then. I
think we ought to have some sort of statement as to the amount of
traffic as to which these divisions apply, and also a statement for a
certain number of months, perhaps beginning January 1 up to May 1,
of the receipts and disbursements of this company.
Mr. Knapp. He has his statement made up covering substantially
the time in regard to which Mr. Jones testified.
Commissioner Proyty. Let him give those figures.
Mr. Marchand. Have vou those figures here (
Mr. Vincent. Yes, sir.
Mr. Marchand. Let us see what you have.
Mr. Vincent. This statement [exhibitingJ covers the period from
July 1, 1903, to February 29, 1901. The gross expenses were
$102,737.92.
Mr. Knapp. What road is that ?
Mr. Vincent. The Illinois Northern. The earnings were $90,598.95;
making a deficit of $12,138.87.
Mr. Knapp. Have you the same figures for the other road ?
Mr. Vincent. Yes. For the Chicago. West Pullman and Southern,
for the period from July 1, 1903, to March 31, 1904, the gross ex¬
penses were $13,141.80; earnings, $17,908.84; net earnings, $4,767.04.
Mr. Marchand. Just file those papers, if you please. Mr. Vincent.
(The same are hereto attached and marked " Exhibits Nos. 1 and 2,
W. W. Vincent ".)
Mr. Marchand. In addition to this we want the amount of tonnage
that has paid the division of this 20 per cent or any division from
September 1, 1903. to, say, the 1st of this month. Then we want to
know the tonnage by roads—that is, the roads to which this has been
delivered. Will you make that up, if you please, and forward it to
the Commission ?
Mr. Vincent. Yes, sir.
Mr. Marchand. We want the total tonnage that has paid a division,
and by roads, what line has carried it out, and what line has brought
it in.
Witness excused.
Frank T. Bentley, having been duly sworn, testified as follows:
Mr. Marchand. What is your occupation, Mr. Bentley ?
Mr. Bentley. Traffic manager of the Illinois Steel Company.
Mr. Marchand. Now, Mr. Bentley, with respect to your plant at
South Chicago, what arrangement have you with the Chicage, Lake
Shore and Eastern as to switching?
Mr. Bentley. Nothing, except as a railroad they do all of our work
for us.
Mr. Marchand. The Illinois Steel Company largely owns the Chi¬
cago, Lake Shore and Eastern, does it not ?
Mr. Bentley. I do not know that as a matter of fact.
Mr. Marchand. Do you know whether any portion of the revenue
of the Lake Shore and Eastern goes to the Steel Company?
58
Mr. Bentley. No. sir.
Mr. Bentley. Not that I know of, sir.
Mr. Marchand. "What was the first road that made a division with
the Chicago, Lake Shore and Eastern ?
Mr. Bentley. That I do not know. I have only been with the com¬
pany five years and it was an old established road when I went there.
It must have been back ten years or more.
Commissioner Peoxty. You say that you are a traffic manager for
the Illinois Steel Company
Mr. Bentley. Yes. sir.
Commissioner Proxty. Are you traffic manager for any other plant
of the United States Steel Corporation except that ?
Mr. Bentley. There are five plants of the Illinois Steel Company
of which I am traffic manager.
Commissioner Proxty. Where are those plants located?
Mr. Bentley. There is one at South Chicago, one at Milwaukee,
one at Joilet. 111., one on the North Side, and one on the Southwest
Side in Chicago.
Commissioner Peox ty. If you ship from the Joilet plant to a Mis¬
souri River Point, what division of the rate does the railroad retain?
Mr. Bentley. I presume it varies; but it is not a matter in my
province.
Commissioner Peoxty. You are not in any way consulted about
that ?
Mr. Bentley. No. sir.
.Commissioner Prouty. Who has the routing of shipments?
Mr. Bentley. I have.
Commissioner Prox_ty. On what theory do you route shipments by
the different lines?
Mr. Bentley. Well, that is pretty hard to say. We try to treat the
people right who treat us right.
Commissioner Proxty. Would you say the railroad treated you
right that allowed the Chicago, Lake Shore and Eastern a division
of 20 per cent ?
Mr. Bentley. Yes.
Commissioner Peoyty. You would think they were treating you
right in that case ?
Mr. Bentley. Yes, sir.
Commissioner Proxty. And you endeavor to divide your traffic up
pretty equally between the competitors that make you that percentage
on your business?
Mr. Bentley. That is not the way. We divide our tonnage with
all the lines, more or less of them.
Commissioner Prouty. The Illinois Central allows you no 20 per
cent ?
Commissioner Prouty. Is there any western road except the Illi¬
nois Central that does not allow the division?
Mr. Bentley. I do not think all of them do.
Commissioner Prouty. How is it at Milwaukee?
Mr. Bentley. I do not think they do there.
Commissioner Prouty. Or at Bay View ?
Mr. Bentley. That is Milwaukee.
Commissioner Prouty. Are there not two plants, one at Milwaukee
and one at Bay View ?
54
Mr. Bentley. Xo. sir; only one. That is at Bay View, a suburb
of Milwaukee.
Commissioner Pro et y . Are there any other plants where rliose
divisions are allowed you except at the South Chicago plant ?
Mr. Bentley. I think not.
Commissioner Yf.omans. If there are no further questions the wit¬
ness will be excused.
Witness excused.
R. L. Scott, having been duly sworn, testified as follows :
Mr. Marchand. Mr. Scott, wjiat is your occupation?
Mr. Scott. Superintendent of the Indiana Harbor Railroad Com¬
pany.
Mr. Marchand. Where is that located?
Mr. Scott. It runs from Indiana Harbor to Osborn; that is our
terminus—of the line in operation.
Mr. Marchand. That is entirely in the State of Indiana, is it not?
Mr. Scott. Yes. sir.
Mr. Marchand. What is the length of that road ?
Mr. Scott. So far as we are in operation, 5 miles; to be exact, it is
4.8(1 miles.
Mr. Marchand. Is that an incorporated company under the laws
of the State of Indiana ?
Mr. Scott. Yes, sir.
Mr. Marchand. Who is president of it ?
Mr. Scott. Mr. C. W. Hotchkiss.
Mr. Marchand. What other occupation has Mr. Hotchkiss ;
Mr. Scott. He is a consulting engineer.
Mr. Marchand. Who is the secretary and treasurer?
Mr. Scott. Mr. Miles.
Mr. Marchand. Are there anv other officers?
Mr. Scott. There is a vice-president.
Mr. Marchand. What is his name?
Mr. Scott. Mr. Erskine.
Mr. Marchand. Has he any other occupation ?
Mr. Scott. He is connected. I believe, with the Chicago Land
Company.
Mr. Marchand. Have you divisions in with the trunk line^ on
traffic east or west ?
Mr. Scott. Xo, sir.
Mr. Marchand. They pay you a switching charge?
Mr. Scott. Yes, sir.
Mr. Marchand. How much ?
Mi". Scott. $4.50.
Mr. Marchand. A uniform switching charge, no matter what
service is performed ?
Mr. Scott. Yes. sir: except at Indiana Harbor we have a rate of
$2 into the inland steel plant. Otherwise the charge is $4.50. Here
is a copy of the tariff which shows it |exhibiting|.
(Same is hereto attached and marked " Exhibit Xo. 1. II. L.
Scott.")
Mr. Marchand. I)o you connect with Chicago, Illinois and Indi¬
ana Railway on the north ? Is there a line with which, von connect
called the Chicago, Illinois, and Indiana Railway?
55
Mr. Scott. Not that I am aware of.
Mr. Marchand. Has the Inland Steel Company a railroad or a
switch track?
Mr. Scott. Xot that. I know of.
Mr. Marchand. How does the Inland Steel Company reach your
road?
Mr. Scott. We own the track in there.
Mr. Marchand. You own them?
Mr. Scott. We do.
Mr. Marchand. Have you the $3 switching arrangement with the
Inland Steel Company?
Mr. Scott. No. We have the $3.50 switching charge with roads
except those leading to the Inland plant, our connection at Indiana
Harbor, where our rate is $2 per car.
Mr. Marchand. Do you handle less than carload shipments?
Mr. Scott. By carload only. We handle L. C. L. to industries
located on our line.
Mr. Marchand. What provision have you for revenue on that ?
Mr. Scott. We get the carload revenue on it. In other words, the
connecting line to whom we deliver allows us a flat rate for handling
the car to them.
Mr. Marchand. Do you have a 2 cent per hundred rate on carload
shipments with a minimum of 20,000 pounds ?
Mr. Scott. The Lake Shore does, I believe.
Mr. Marchand. Does the Lake Shore connect with the Indiana
Harbor Railroad ?
Mr. Scott. Yes, sir.
Mr. Marchand. What other lines connect directly with the Indiana
Harbor Railroad?
Mr. Scott. The Baltimore and Ohio, the Chicago, Lake Shore and
Eastern, the Lake Shore, the Pennsylvania, the E„ J. and E., the East
Chicago Belt. C. T. T., the Michigan Central, and the Xew York,
Chicago and St. Louis.
Mr. Marchand. Who owns the stock in your roacl?
Mr. Scott. I could not say, I am sure.
Mr. Marchand. You do not know?'
Mr. Scott. I do not.
Mr. Marchand. Do you own any stock ?
Mr. Scott. Xo, sir.
Mr. Marchand. Does the president of the company own any stock?
Mr. Scott. Xot to my knowledge.
Mr. Marchand. Do you know how much stock is issued?
Mr. Scott. Xo. sir.
Mr. Marchand. Who does?
Mr. Scott. I presume he does.
Mr. Marchand. Would the secretary know ?
Mr. Scott. I can not say.
Mr. Marchand. How long have you been connected with the road ?
Mr. Scott. Since the 5th of last October.
Mr. Marchand. I understood you to say that the Inland Steel
Company had no tracks of their own?
Mr. Scott. IS ot to my knowledge.
Mr. Marchand. The Ward & Dickey Steel Company are located
on your road, are they not ?
56
Mr. Scott. Yes, air.
Mr. Marchand. What do they manufacture ?
Mr. Scott. It is a steel plant ; sheet steel.
Mr. Marchand. Please locate the "Ward & Dickey Company on this
diagram.
Mr. Scott. It is right there [indicating].
Mr. Marchand. Close to the northern terminus ?
Mr. Scott. Yes, sir.
Mr. Marchand. llave they tracks of their own ?
Mr. Scott. Xo. sir.
Mr. Marchand. The Standard Forgings Company is also another
industry located on your road, is it not ?
Mr. Scott. Yes. sir.
Mr. Marchand. Have they any tracks of their own?
Mr. Scott. Xo. sir.
Mr. Marchand. The American Steel and Foundry Company is on
vour road, is it not ?
Mr. Scott. Yes, sir.
Mr. Marchand. How much track have they?
Mr. Scott. I could not say how much track they have. They own
their own track inside of their plant limits.
Mr. Marchand. How much of the switching charge clo thev get?
Mr. Scott. Xone whatever.
Mr. Marchand. They get none?
Mr. Scott. Xo, sir.
Mr. Marchand. The switching that thev do thev get for nothing ?
Mr. Scott. They do no switching. We operate over those tracks ;
we own the equipment.
Mr. Marchand. How much equipment do you own ?
Mr. Scott. Four flat cars.
Mr. Marchand. How much motive power do vou own?
Mr. Scott. Three engines.
Mr. Marchand. Then there is a chemical company located some¬
where on your line ?
Mr. Scott. Yes, sir.
Mr. Marchand. "What is the name ?
Mr. Scott. The Grasselli Chemical Company.
Mr. Marchand. Have they sidetracks of their own?
Mr. Scott. They own the tracks inside of their plant, I believe;
yes. sir.
Mr. Marchand. Have the}- any motive power?
Mr. Scott. Xo, sir.
Mr. Ma rchand. Do you do their switching?
Mr. Scott. Yes, sir.
Mr. Marchand. Do they get any portion of that charge back?
Mr. Scott. Xo. sir.
Air. M arch and. Whore is the Republic Steel and Iron Company
located ?
Mr. Scott. At East Chicago.
Mr. Marchand. That is pretty near the southern terminus of
your line, is it not ?
Mr. Scott. Xo, sir; it is right in here [indicating on map].
Mr. Marchand. How do you reach their works?
Mr. Scott. Over the East Chicago Belt Track from Grasselli.
57
Mr. Marchand. Tell the Commission something about the East
Chicago Railroad. How much of a railroad is that?
Mr. Scott. I can tell you very little about them, except tha.t we
have trackage rights between Grasselli and East Chicago.
Mr. Marchand. Do you know what the termini of that road are?
Mr. Scott. Xo. sir.
Mr. Marchand. You have been in your present position how long?
Mr. Scott. Since October last.
Mr. Marchand. Where do you live?
Mr. Scott. Indiana Harbor.
Mr. Marchand. That is about 2 miles from this place—East Chi¬
cago. is it not ?
Mr. Scott. Yes. sir.
Mr. Marchand. And you are there quite frequently?
Mr. Scott. Yes. sir.
Mr. Marchand. And yet you know nothing about that road?
Mr. Scott. Only in a general way.
Mr. Marchand. You have been over it, have you not?
Mr. Scott. Yes. sir.
Mr. Marchand. Can't you tell the Commissioner how long it is;
where it leads from and to ?
Mr. Scott. It leads to the Grasselli plant east, and there is a
branch running from a connection with the main line north past the
Republic Iron and Steel Company and the Enslan Works and to East
Chicago, and I believe the western terminal is Hammond. That is a
portion of the road that I know very little about.
Mr. Marchand. What arrangement have you with them as to the
use of their track ?
Mr. Scott. So much a carload.
Mr. Marchand. How much do you pay them a car ?
Mr. Scott. Fifty cents a car.
Mr. Marchand. In and out?
Mr. Scott. Xo. sir. Fifty cents a carload.
Mr. Marchand. You pay them 50 cents a carload, while you get $3
a car for switching?
Mr. Scott. $3.50.
Mr. Marchand. Did I understand it was $3.50, the uniform switch¬
ing charge ?
Mr. Scott. Yes. sir.
Mr. Marchand. Does that net you $3, then ?
Mr. Scott. That is all according to conditions whether it does or
not.
Mr. Marchand. State the conditions when it does not.
Mr. Scott. If it goes to the Republic Iron and Steel plant it does
not net us that.
Mr. Marchand. Why not ?
Mr. Scott. Because the Chicago Terminal Transfer Company do
the switching there. We do not do any switching there. That is
done by the Chicago Terminal Transfer.
Mr. Marchand. How much does it net you ? Does it net you $2 a
car ?
Air. Scott. Something over that, I think.
Mr. Marchand. How do you connect with the Michigan Central?
Mr. Scott. We connect with the Michigan Central at Gibson.
58
Mr. Marchand. Where is Gibson ?
Mr. Scott. There [indicating on map J.
Mr. Marchand. Now, you stated that you have no percentage
arrangement with any of the lines with which you connect.
Mr. Scott. Xo, sir.
Mr. Marchand. You have no percentage arrangement with the
Michigan Central (
Mr. Scott. Xo. sir.
Mr. Marchand. You are sure of that?
Mr. Scott. Yes. sir: so far as I know.
Mr. Marchand. I think that is all. your honors.
Commissioner Procty. When was your road built (
Mr. Scott. I can not say just when they started to build the road.
Commissioner Procty. Was it built before or after the Inland
Steel Plant was built ?
Mr. Scott. I can not state, because I do not know about it accu¬
rately. I don't know much of anything about the road prior to
October last.
Commissioner Procty. At the present time your road owns the
switch tracks inside of the Inland Steel Plant limits, I understood
you to say ?
Mr. Scott. Yes. sir.
Commissioner Procty. Do you know whether those switch tracks
were built by the Inland Steel Company or by your company ?
Mr. Scott. By our company.
Commissioner Procty. Then your road must have been put under
construction about the time that plant was.
Mr. Scott. I should imagine so ; jTes, sir.
Commissioner Procty. Alio organized your railroad company ?
Mr. Scott. I think Mr. Hotchlnss, the president.
Commissioner Procty. Was it organized as an independent enter¬
prise or in connection with some other road?
Mr. Scott. It is strictly independent, as I understand it. We are
under operation to Osborn now. and under construction to Hartsdale.
Commissioner Procty. Does the Inland Company pay you any¬
thing for operating their switches?
Mr. Scott. Only as the movement happens to be a local one—that
is, from one plant to another.
Commissioner Procty. Your revenue is derived from switching
charges?
Mr. Scott. Yes, sir.
Commissioner Procty. And that is absorbed by the trunk line?
Mr. Scott. Yes, sir; by the line from whom we receive our com¬
modities or deliver them to.
Ale. Marchand. Mr. Scott, where is Hammond on that map?
Mr. Scott. It is not on that. It is about this point [indicating].
Commissioner Procty. Mr. Scott, who routes the traffic from the
Inland Steel Plant ?
Air. Scott. They do.
Commissioner Procty. You have 110 power to route it?
Mr. Scott. We simply take their instructions on it. We route it
according to their instructions.
Commissioner Procty. Do you pay them any part of this $3.50
switching charge ?
59
Mr. Scott. No, sir: we clo not.
Commissioner Prouty. That is all.
Commissioner Yeomans. If there is nothing further the witness
will be excused.
Witness excused.
F. B. Montgomery, recalled.
Mr. Marchand. Mr. Montgomery, I want to ask you a question
with respect to the switching charge upon traffic from the Deering
Works.
Mr. Montgomery-. What clo you hare reference to?
Mr. Marchand. I mean traffic out of the Deering division of the
International Harvester Company.
Mr. Montgomery. You want to know what the switching rate is?
Mr. Marchand. Yes, sir.
Mr. Montgomery. I think the Chicago and Northwestern and the
Chicago. Milwaukee and St. Paul companies can tell you better than T
can.
Mr. Marchand. Do you know what it is, what the charge is?
Mr. Montgomery. I think it is in the neighborhood of $4.50 or $5
a car. but would not say that was the case with all connections.
Mr. Marchand. Do you know whether any portion of that $4.50
or $5 a car is handed back to the International Harvester Company?
Mr. Montgomery'. I have no knowledge.
Mr. M arc-hand. Who would have knowledge of that?
Mr. Montgomery. I clo not know, unless the treasurer of the Inter¬
national Harvester Company.
Mr. Marchand. That is Mr. Howe ?
Mr. Montgomery'. Yes. sir; Mr. Howe.
Mr. Marchand. You don't know whether that rate nets them two
or three dollars a car?
Mr. Montgomery. Xo. sir.
Mr. Marchand. Do you know whether this is the case or not—
whether traffic from the Deering division of the International Har¬
vester Works is routed by the Illinois Northern Railroad altogether?
Mr. Montgomery'. It is not.
Mr. Marchand. Traffic for the west—how is that?
Mr. Montgomery'. It is not—not all of it. You asked whether all
of it was not.
Mr. Marchand. Yes, sir. Is any portion of it ?
Mr. Montgomery-. A small percentage of it.
Mr. Marchand. What percentage ?
Mr. Montgomery-. I would not dare say. The records will develop
that. I should say not 15 per cent.
Mr. Marchand. What is the reason for that 15 per cent being-
routed by the Illinois Northern ?
Mr. Montgomery. Because we can reach some of our friendly con¬
nections through the Illinois Northern.
Mr. Marchand. What do you mean by friendly connections? "
Mr. Montgomery. I mean connections with which the Illinois
Northern Railway Company has a division of the rate.
Mr. Marchand. Do some of them give you more than 20 per cent?
Mr. Montgomery'. No. sir.
Mr. Marchand. Is 20 per cent the maximum ?
' 60
Mr. Montgomery. Yes, sir.
Mr. Marchand. What is the minimum Is there anything less
than that on a division ?
Mr. Montgomery. No, sir: not on a division.
Mr. Marchand. Or on any other arrangement
Mr. Montgomery. Excepting switching arrangements: the 20 per
cent applies to the Missouri River as a maximum, but cars east of the
river pay very much less than cars to the Missouri River or beyond.
Mr. Marchand. The McCormick division of the International
Harvester Works is reached only by the tracks of the Northwestern
and the Chicago. Milwaukee and St. Paul ?
Mr. Montgomery. The Heering division, you mean?
Mr. Marchand. The Heering division. I should have said.
Mr. Montgomery. Yes, sir.
Mr. Marchand. That is 011 the North Side?
Mr. Montgomery. Yes, sir.
Mr. Marchand. Either of those lines which does the switching gets
this charge, whatever it is ?
Mr. Montgomery. Yes. sir.
Mr. Marchand. Then, when traffic is routed by the Illinois North¬
ern road, the road receiving that traffic pays the 20 per cent, assuming
that it is delivered to a road with which you have a division?
Mr. Montgomery. Yes, sir.
Mr. Marchand. What becomes of this switching charge?
Mr. Montgomery. The Illinois Northern absorbs it.
Mr. Marchand. Absorbs the intermediate switching?
Mr. Montgomery. Yes, sir.
Mr. Marchand. "Whether $2, $3, $4. or $5 a car ?
Mr. Montgomery. Yes, sir; whatever it is.
Mr. Marchand. That is all, Mr. Montgomery.
Witness excused.
C. L. Lingo, having been duly sworn, testified as follows :
Mr. Marchand. Where are you located ?
Mr. Lingo. 821 First National Bank. Chicago.
Mr. Marchand. What is your occupation ?
Mr. Lingo. General manager of the Chicago, Illinois and Indiana
Railroad, and traffic manager of the Inland Steel Company.
Mr. Marchand. 8>tate to the Commission. Mr. Lingo, where this
road, the Chicago. Illinois and Indiana Railroad, is located.
Mr. Lingo. It is not located yet.
Mr. Marchand. It is simply located on paper?
Mr. Lingo. That is all.
Mr. Marchand. It is incorporated, is it ?
Mr. Lingo. Yes. sir.
Mr. Marchand. Fuder the laws of what State?
Mr. Lingo. Illinois.
Mr. Marchand. And has it been surveyed yet ?
Mr. Lingo. The purpose of the road was to acquire the tracks on
the property of the Inland Steel Company and a right of way from
Indiana Harbor to East Chicago. Negotiations are pending for both
of those properties, but have never been completed.
Mr. Marchand. To acquire the tracks owned now by the Inland
Steel Company ?
61
Mr. Lingo. Xo; the track;- on the property of the Inland Steel
Company.
Mr. Marchand. Who owns those tracks now?
Mr. Lingo. That is a question. They were built by the East
Chicago Land Company in the fir-t place, a portion of them. The
rest of them were constructed by the Indiana Harbor Railroad Com¬
pany. The Inland Steel Company have nothing more than an
easement over the property, or the ground occupied by the tracks.
Mr. Marchand. How do you arrive at the statement here in the
Official Guide that you have ¿6.3 miles of track?
Mr. Lingo. In the first place, when that was put in the Guide
we had contemplated arrangements through one of the belt lines to
connect with lines to Chicago, and that was the mileage we figured
out, 26.3 miles of track, including ihe tracks on the property of the
Inland Steel Company and the mileage of the connecting companies ;
that would bring it up to 26.-3 miles. That is misleading.
Mr. Marchand. I see in your advertisement in the Official Guide
that you connect with all the railroads entering Chicago, practically.
Have you divisions with any of those roads?
Mr. Lingo. Xo, sir.
Mr. Marchand. Do you receive any revenue?
Mr. Lingo. Xo, sir.
Mr. Marchand. This is really the Inland Steel Company, is
it not ?
Mr. Lingo. The officers of the Inland Steel Company subscribed
for the stock of the railroad company. The stock has not been issued,
however.
Mr. Marchand. You have not gotten to the point, then, where you
make joint tariffs with the trunk lines I
Mr. Lingo. No, sir; nor with any other lines.
Mr. Marchand. You have no arrangement with the Indiana Har¬
bor Railroad ?
Mr. Lingo. Xo, sir.
Mr. Marchand. I think that is all I have to ask of this witness.
Commissioner Prouty. Was it your idea to build this road and get
these same divisions that other lines get ?
Mr. Lingo. Yes, sir.
Commissioner Prouty. You thought that if they had them, you
ought to have them also?
Mr. Lingo. Yes, sir.
Commissioner Prouty. And you thought you could not compete
unless you did ?
Mr. Lingo. "We would have local switching, of course.
Commissioner Prouty. What do you mean by local switching ?
Mr. Lingo. Anything we would have to move locally; for instance,
to the Standard Forgings Company and the Ward, Dickey Company,
both of whom buy our product. We have to pay the switching
charges on that. If it goes to any point beyond where the switching
charge is over $10 a car, the railroad line absorbs the Indiana Harbor
charges; otherwise, we have to pay it.
Commissioner Prouty. If the Indiana Harbor line was not there,
would you have to have those tracks in order to transact your busi¬
ness—the railroad tracks within the limits of your property ?
62
Mr. Lixgo. Yes, sir; we would have to have those tracks in order to
transact the business.
Commissioner Prouty. So far as you know, do steel plants gener¬
ally put in those tracks, or are they put in by some railroad company ?
ilr. Lixgo. I could not answer that question.
Commissioner Prouty. At the present time you do not own any
locomotives and do not repair those tracks ?
Mr. Li xgo. We have locomotives that do our own switching inside
of the plant.
Commissioner Prouiv. Do your locomotives operate over these
tracks ?
Mr. Lixgo. Inside of the plant : yes. Ar.
Mr. Maihii.yxd. Does the Chicago. Illinois and Indiana exchange
passes with the trunk line-. ?
Mr. Lixgo. We would if they would.
Mr. Marctiaxd. You have not issued anv vet ?
Mr. I uxgo. Xo. sir: we have not i-sued any yet.
Commissioner Yeoaiaxs. If there are no further questions, the wit¬
ness will be excused.
Witness excused.
W. S. "Weed, having been duly sworn, lestified as follows:
Mr. Marchaxd. You are connected with the Chicago Junction
Ilailroad :
Mr. Weed. Yes. sir.
Mr. Marchame What is your position with that company ?
Mr. Weed. General freight agent.
Mr. Marchaxd. What mileage have you ?
Mr. Weed. The entire road is given at 325 miles. That is approxi¬
mately correct, but that means duplication of switching all through
the stock yards.
Mr. Marchaxd. Do tou own that entire mileage?
Mr. Weed. Xo. 1 think not. Some of it is under lease.
Mr. Marchaxd. Can you state how much you actually own?
Air. Weed. I could not : no. sir.
Mr. Marchaxd. Can you recall what your company is capitalized
at ?
Mr. Weed. Xo. sir.
Mr. Marchaxd. Or what amount of bonds are issued?
Mr. Weed. I do not know. sir.
Mr. M vrchaxd. Mr. Weed, yours is a so-called belt line, is it not?
Mr. "Weed. Yes. sir.
Mr. Marchaxd. You connect up with the stock yard?
Mr. Weed. Yes. sir: it is rather a double combination. It is an
outside belt and an interior operation. We have an outer belt that
runs outside of the city
Mr. Marchaxd. Well, your road is represented by the red lines on
the map hanging there on the easel?
Mr. Weed. Yes. sir.
Mr. Marchaxd. Have you divisions—percentage divisions—with
the trunk lines?
Mr. Weed. Xo. sir.
Mr. Marchaxd. You have not?
Mr. Weed. Xo. sir.
63
Mr. Marchand. They all give you an arbitrary ?
Mr. "Weed. The basis of our rates are switching charges by the car¬
load.
Mr. Marchand. There are 110 divisions made with A'our road at
all ?
Mr. W "eeo. No. sir.
Commissioner Proutt. What is your maximum switching charge
per car ?
Mr. Weed. Our longest haul is about $7.80.
Commissioner Protjty. How far do you haul it for that price ?
Mr. Weed. About 40 miles.
Commissioner Protjty. What is your minimum charge ?
Mr. "Weed. $2.50 at a station ; that is, where it is simply a station
movement, from one point to another, at the same station.
Witness excused.
J. M. Warner, having been duly sworn, testified as follows:
Mr. Marchand. Mr. Warner, what is your position with respect to
the Chicago and Western Indiana Railroad ?
Mr. Warner. I am superintendent.
Mr. Marchand. Will you identify the location of your roacl on the
map which has been hung up there ¡indicating] ?
Mr. Warner. From Dearborn station to Dolton, and along here
[indicating] to Stateline and to South Chicago; along here to junc¬
tion with the Belt Line.
Mr. Marchand. You also operate the Belt "Railway, do you not?
Mr. Warner. Yes, sir.
Mr. Marchand. The officers of one railroad are the officers of the
other, as I understand it ?
Mr. Warner. Yes, sir.
Mr. Marchand. What is the mileage of the combined roads?
Mr. Warner. Of main line, about 48 miles.
Mr. Marchand. That is the Belt Railway and the Chicago and
Western Indiana Railroad ?
Mr. W arner. Yes, sir.
Mr. Marchand. I believe yoi 1 file a financial report with the Inter¬
state Commerce Commission, do you not ?
Mr. W "arner. I think we did at one time, simply of statistical infor¬
mation ; but Ave do not understand that AA'e are an interstate road.
Mr. Marchand. Do you join in interstate tariffs with other lines?
Mr. Warner. No. sir.
Mr. Marchand. Do you obtain a division of through rates?
Mr. Warner. No, sir.
Mr. Marchand. All you get is a switching charge or arbitrary?
Mr. Warner. That is all : yes, sir.
Mr. Marchand. State to the Commission the maximum and mini¬
mum charges that you obtain.
Mr. Warner. From $1 to $(>.
Mr. Marchand. What are the conditions under Avhich von get $6?
Mr. Warner. That would be a local moA'ement from one point on
our line to another point on our line.
Cohmiissioner Protjty. How far?
Mr. Warner. Varying from 10 to 20 miles.
64
Commissioner Yeomans. Are there any other questions to be asked
of this witness ? If not, he n il! be excused.
Witness excused.
W. B. Bare, having been duly sworn, testified as follows:
Mr. Marchand. You are general freight agent of the Chicago Ter¬
minal Transfer Railroad Company, are you not ?
Mr. Barr. Yes, sir.
Mr. Marchand. State where your road runs to and where from.
Mr. Barr. Our line runs from Chicago to Chicago Heights, and
then from South Chicago around to McCook
Mr. Marchand. Well, what is your mileage?
Mr. Barr. About 118 miles—between 118 and 120 miles of main
line. Including double track and siding, about 165 to 170 miles.
Mr. Marchand. Do you have divisions in with the trunk lines, Mr.
Barr ?
Mr. Barr. To certain territory south of the switching district of
the Central Traffic Association—south of their switching demarcation
line south of Harvey. South of that we have divisions in with the
eastern and western lines, both.
Mr. Marchand. Have you a uniform division with all lines?
Mr. Barr. The Western Trunk Line legislation is uniform all
through.
Mr. Marchand. What division is that?
Mr. Barr. Fifteen per cent of the rate with the Missouri River and
St. Paul rate as a maximum.
Mr. Marchand. Do you get something besides that ? Do you get
an arbitrary ?
Mr. Barr. No. sir.
Mr. Marchand. What did you say the maximum was?
Mr. Barr. I would like to correct that statement. We do not get
the entire earnings on that division. The divisions, as they now
stand, are fixed by the Western Trunk Line circular No. 3242, which
provides for the maximum. On the 15 per cent basis our earnings
would run about 14.
Commissioner Prouty. How long is your haul on that traffic ?
Mr. Barr. It varies—I should say it would average something over
30 miles—from 30 to 35 miles.
Commissioner Prouty. That traffic originates on your line in
Chicago, does it ?
Mr. Barr. It originates on our line, but not in Chicago—south of
Harvey.
Commissioner Prouty. If it originated in Chicago and went to a
point south of Harvey, would you not handle that on a division?
Mr. Barr. No, sir.
Commissioner Prouty. On a switching charge?
Mr. Barr. No, sir.
Commissioner Prouty. What would your switching charge be ?
Mr. Barr. Do you mean our local charge, or our charge from the
connection ?
Commissioner Prouty. From the connection.
Mr. Barr. Any western line that would take freight from Chicago
and which would be carried as far as Harvey, that would take a rate
as high as $5 a car on a maximum weight of 60,000 pounds. If it
65
originated on a western line and went south of Harvey or Chicago
Heights, it would take a division.
Commissioner Prouty. You spoke about the switching district. Is
there a certain defined territory within which the movement is on a
switching basis?
Mr. Barr. Yes, sir; there is a certain territory. It is not entirely
settled, but it is almost uniform within it. An arbitrary charge is
applied, and no divisions are allowed, so far as we are concerned.
Commissioner Prouty. Is that true, of all the railroads?
Mr. Barr. I think that is true of the Chicago Junction, and true
of the Chicago and Western Indiana.
Commissioner Prouty. Are the switching charges uniform by the
different lines ?
Mr. Barr. Xo, sir; not entirely. They vary considerably.
Commissioner Prouty. What is the highest switching charge you
know of?
Mr. Barr. I believe the highest switching charge that we apply
tour local charge) is about $10.25. I think that is our highest charge.
Commissioner Prouty. Between what points would that apply?
Mr. Barr. That is practically between the extremes of our lines—
a local movement.
Commissioner Prouty. From one local point to another local point.
Mr. Barr. Yes, sir.
Mr. Marchand. You would originate and deliver the traffic?
Mr. Barr. Yes, sir.
Witness excused.
Mr. Marchand. Is Mr. Gorman of the Santa Fe here?
Commissioner Prouty. Xo : lie is not here.
Mr. Marchand. Who represents Mr. Gorman?
Mr. Manter. I do.
Mr. Marchand. Will you please take the stand?
F. H. Manter, having been duly sworn, testified as follows:
Mr. Marchand. What is your position with the Santa Fe, Mr.
Manter ?
Mr. Manter. I am assistant general freight agent.
Mr. Marchand. Mr. Manter, can you testify concerning the rela¬
tion between your road and the Illinois Northern?
Mr. Manter. You mean when the transfer of our property to them
was made?
Mr. Marchand. Yes. sir; to the Illinois Xorthern.
Mr. Manter. In what respect?
Mr. Marchand. As to compensation.
Mr. Manter. I think- all our interchange business with that line
was handled on a switching basis.
Mr. Marchand. It was testified to this morning by some one—I
think Mr. Montgomery—that under the lease you were to pay them
only $1 per car.
Mr. Manter. Under our lease I think we have the right to demand
that we can pay $1 a car. That is my understanding.
Mr. Marchand. The other arrangement was 20 per cent ?
Mr. Manter. The arrangement now in effect is 20 per cent.
I c c—05 5
66
Mr. Marchand. Do you ever pay both ?
Mr. Mantér. No. sir.
Mr. Marchand. Have you ever paid both ?
Mr. Manter. We would not do it knowingly.
Mr. Marchand. Prior to the Illinois Northern acquiring the tracks
which are now the Illinois Northern Railroad tracks the Santa Fe did
the switching for the McCormick Harvester Works, did it not ?
Mr. Manter. We made deliveries up to the McCormick Harvester
Company's track.
Mr. Marchand. What did you get from the McCormick Harvester
Company for that service?
Mr. Mantf.r. What did we get from the McCormick Company?
Mr. Marchand. What did they pay you for that switching service?
Mr. Manter. It was from $1.50 to $3 a car. I think. I am not sure
about that. I think $3 was the maximum.
Mr. Marchand. There were other industries located on that line
at that time ?
Mr. Manter. Yes, sir.
Mr. Marchand. Did they pay the same switching charge?
Mr. Manter. Yes, sir.
Mr. Marchand. From $1.50 to $3 a car?
Mr. Manter. Yes. sir.
Mr. Marchand. Do you know what the maximum earnings are
now for a car from the McCormick Harvester Works ?
Mr. Manter. To what territory?
Mr. Marchand. To any territory.
Mr. Manter. The maximum earning on a car would depend upon
its destination and upon the rate.
Mr. Marchand. On anything out of the McCormick Harvester
Company works what would be the maximum ?
Mr. Manter. Twenty per cent.
Commissioner Prouty. It has been said that it was 20 per cent of
the Missouri River rate.
Mr. Manter. Yes, sir; 20 per cent of the Missouri River rate.
Commissioner Peocty. That would run up as high as $21 or $25 a
car. would it not?
Mr. Manter. Well. I think hardly that much: possibly it might.
Commissioner Prouty. Possibly it might run as high as $21 ?
Mr. Manter. It might in the case of a large-sized car.
Commissioner Prouty. And you formerly performed that service
for two or three dollars a car?
Mr. Manter. Yes, sir.
Commissioner Prouty. Did you regard that as a remunerative rate
in those daj*s ?
Mr..Manter. When we performed the switching ourselves?
Commissioner Prouty. Yes, sir.
Mr. Manter. I do not know how the people in charge of the traffic
at that time regarded it. I wTas not in charge of it.
Commissioner Prouty. You were glad to get it at that rate, were
you not?
Mr. Manter. We sought the traffic on that basis.
Commissioner Prouty. Did the McCormick people pay you that
switching charge delivered to them coming over your line?
Mr. Manter. If it came from competitive territory, they did not.
67
Commissioner Pkouty. If it came over any other line and you
switched it to destination, what was done as to the switching charges ?
Mr. Mantee. The same answer is true—that when it came over com¬
petitive line, the line that brought the freight into Chicago would
absorb it.
Commissioner Peouty. Why do you pay the 20 per cent now, when
you might insist on their doing this work for $1 a car ?
Mr. Mantee. It is simply a question of putting ourselves on a
parity with others and meeting the conditions as we found them to
exist.
Commissioner Peouty. You mean by that, that you would not have
gotten the business unless you paid for it ?
Mr. Mantee. We thought not.
Commissioner Peouty. So far as you know, what line gave that
division first ?
Mr. Mantee. I do not believe I can answer that. I don't know.
Commissioner Peouty. How long is it since this division was first
allowed ?
Mr. Mantee. By our line ?
Commissioner Peouty. By your line.
Mr. Mantee. I am not quite sure, but I think it was January 1.
Commissioner Peouty. Had it been allowed by any other line be¬
fore that ?
Mr. Mantee. I can not speak of my own knowledge.
Commissioner Peouty. When you allowed that division did you
have any conference with other lines ?
Mr. Mantee. Personally, no, sir.
Commissioner Peouty. By whose instructions did you allow the
divisions ?
Mr. Mantee. By the instruction of our general freight agent.
Commissioner Peouty. Your general freight agent?
Mr. Mantee. Yes, sir.
Commissioner Peouty. Who is your general freight agent?
Mr. Mantee. At that time Mr. J. E. Gorman. v
Commissioner Peouty. Do you know whether Mr. Gorman at that
time had any conference with other lines, with competing lines?
Mr. Mantee. I can not answer that, Mr. Commissioner.
Commissioner Peouty. Was it your understanding that other
lines were allowing that division before you allowed it ?
Mr. Mantee. Yes, sir; it is my understanding that they were.
Commissioner Peouty. How long had that division been allowed by
other lines ?
Mr. Mantee. I can not answer that definitely, but long enough,
from our view of the matter, to warrant us in taking what we consid¬
ered to be a duplicate of the other lines' action.
Mr. Mabohand. You say you have had the division in since Janu¬
ary 1. Since January of what year?
Mr. Mantee. 1904.
Mr. Marchand. Mr. Gorman is not in the city, I understand.
Mr. Mantee. No, sir. Ile is out of the city.
Mr. Marchand. Are you familiar with a report that Mr. Gorman
made with respect to the Illinois Northern road prior to its becoming
a part of the International Harvester Company?
Mr. Manter. No, sir.
68
Mr. Marchand. Do you know that he did make an examination of
that property ?
Mr. Mantes. I understand lie did.
Mr. Maxcjiard. And you understand he made the report ?
Mr. Manter. I understand he made a report.
Mr. March and. A written report ?
Mr. Maxter. I have no knowledge of the character of the report;
I simply understand that he made a report.
Mr. Marchand. Are there any roads, switching lines, side tracks,
or belt lines other than those that have been named by you—that is,
which you have named in your answer as having made divisions with
or allowed an arbitrary to, that you make allowances to? Are there
any other lines other than those you have named to which freight
divisions or allowances are made?
Mr. Manter. You mean in Chicago ?
Mr. March ind. Yes. sir.
Mr. Manter. I think not : not that I recall now.
Mr. Marchand. Then your answer contains the names of all the
lines with which you make divisions, or to which you grant any
allowance in and around the city of Chicago?
Mr. Manter. Yes. sir.
Commissioner Prot'ty. There are certain other industries located
on the Illinois Northern besides the International Harvester Com¬
pany. Do you allow these same divisions on traffic from those
industries ?
Mr. Manter. We allow it on the traffic billed to us by the Illinois
Northern Railroad Company.
Commissioner Prouty. What do you mean by " billed to you by
the Illinois Northern Railroad Company?"
Mr. Manter. Our arrangement contemplates the handling of
traffic from the Illinois Northern similar to any other arrangement
with any other line.
Commissioner Prouty. Do you solicit from these plants the rout¬
ing of that business?
Mr. Manter. Oh, yes.
Commissioner Prouty. Name some plant that is located on the
Illinois Northern Railway.
Mr. Manter. I think the Kimball Piano Company.
Commissioner Prouty. Do you go to the Kimball Piano Company
and solicit their business ?
Mr. Manter. We do. I do not do it personalty, but we do it.
Commissioner Prouty. Does the Illinois Northern allow that com¬
pany to route its freight as it sees fit ?
AÍr. Mvxtek. 1 have no knowledge on that. I can not answer that
question definitely.
Commissioner Prouty. Tf you can solicit that business yourself
why do you allow the Illinois Northern this division?
Mr. Manter. I would assume for the same reason that we would
allow the Chicago Northwestern a division on business we might
solicit on that line.
Commissioner Prouty. You regard this 20 per cent division, then,
as a reasonable division, do you?
Mr. Mantee. I would not like to say so.
Commissioner Prouty. Tf the. Illinois Northern have agreed to
69
perform the service for $1 a ear. and von used to do it yourself for
$2 to $3 a car, do you regard a charge of $12 to $20 as a reasonable
division ?
Mr. Maxtor. Xo, sir; neither do I regard $1.50, or $2, or $3 a car
as compensation for that service.
Commissioner Prouty. What do you think would be reasonable?
Mr. Maxtor. I may not be competent to answer that question from
an operating standpoint. Those figures are usually made after
knowledge obtained from men who know what it costs to do the
service. " In the abstract and without any detailed information
regarding it I should say, if it were left to me, that $5 a car would be
a reasonable charge.
Commissioner Prouty. How far do they handle that traffic to your
line?
Mr. Maxter. I can not give you the distance exactly, but from 3
to 4 miles.
Commissioner Prouty. About what is the usual switching charge
within the switching limits for that kind of service?
Mr. Maxter. It varies as between the belt line, so called, and the
trunk lines.
Commissioner Prouty. Which charges more usually, the belt line
or the trunk line ?
Mr. Maxter. I should say the trunk line. ■
Commissioner Prouty. Did the trunk lines make a difference
between business which comes from competitive territory and busi¬
ness which does not ?
Mr. Maxter. Xot so far as their switching rate is concerned.
Mr. Marchaxd. Mr. Maliter, do you ever receive freight from the
Deering Division of the International Harvester Company from off
of the Illinois Northern road?
Mr. Maxter. I have no personal knowledge of having ever
received any freight of that kind.
Commissioner Prouty. Would you have personal knowledge if
that were the case ?
Mr. Maxter. Xo. sir; not necessarily.
Mr. Marchaxd. Who would have knowledge of it? I mean on
behalf of your road.
Mr. Maxter. I don't know that anyone would, unless the business
came to us under a billing showing Deering as the original point of
origin.
Mr. Marchaxd. You think that would be confined entirely in the
breast of the Illinois Northern road, would it?
Mr. Maxter. That is not necessarily so. It depends upon the
handling.
Mr. Marcha xn. Now, with respect to traffic which you get from
the Merchants' Lighterage Company, do you know anything as to the
difference in the cost of receiving it from the Merchants' Lighterage
Company as compared with the old method, where it was delivered to
you by teams?
Mr. Maxter. It is necessarily very much greater to us.
Mr. Marchaxd. Necessarily very much greater?
Mr. Maxter. Yes, sir.
Mr. Marchaxd. It costs your company more to receive it from the
Lighterage Company than it did by the old method ?
70
Mr. Mantee. Yes, sir; it would if we were handling business that
way.
Mr. Marchand. Are you not handling business that way?
Mr. Manter. I understand we have not been up to the present
time, unless it is within the last few days.
Mr. Marchand. You are not handling anything from the Mer¬
chants' Lighterage Company.
Mr. Manter. Not unless it has been very recently.
Mr. Knapp. You made some reference to a division of rates that
you might have with the Northwestern road. I will ask you if it is
not a familiar practice in railroading to allow the company on whose
rails the freight originates a much larger proportion than is allowed
to an intermediate line ?
Mr. Manter. I think that is true. I would not say much larger,,
but larger.
Mr. Knapp. Is it not acommon practice, for instance, in the divi¬
sion of rates between trunk lines—getting away from terminal lines
for a moment—where the division of the rate is allowed, to allow the
one line its full local, and for the other line to take just what remains
after taking the local out of the through rate ?
Mr. Manter. That might happen at times.
Mr. Knapp. Is it not a common practice?
Mr. Manter. I know that method of dividing rates has obtained
at times.
Mr. Knapp. Is it not a fact that it is the common and almost uni¬
versal practice that the company upon Avhich the traffic originates
gets a much larger proportion than any other line that may be con¬
cerned in the through rate ?
Mr. Manter. 1 can not answer that in the affirmative.
Mr. Knapp. You are familiar with the rates of the roads all over
the country ?
Mr. Manter. I am. If I understand your question correctly, you
want to develop the fact that the line that originates the business in
Chicago destined to the Missouri River gets a larger percentage than
does the connecting line ?
Mr. Knapp. The. way I asked the question had no reference to
Chicago.
Mr. Manter. You mean between any two points?
Mr. Knapp. Y es, sir.
Mr. Manter. They would not get a larger division—as a question
as to the division of the rate—unless they had a longer haul, or pro¬
portionately longer haul, than the other lines had.
Mr. Knapp. The carrier upon whose line thè traffic originates
usually has the power to control that traffic, has it not?
Mr. Manter. Sometimes.
Mr. Knapp. Well, usually?
Mr. Manter. As a rule, but not always.
Mr. Knapp. As a result of that is it not able to get a larger per¬
centage of the through rate than the proportion which would be
given to it if the mileage simply was compared ?
Mr. Manter. Please ask that question again? ■
Mr. Knapp. Where traffic originates on one line of railroad you
say that road has the power largely to control the future course of
that traffic after it leaves its line. Is that right?
71
Mr. Mantee. I think not. I think that is wrong.
Mr. Knapp. Does not the road upon which the traffic originates
- ordinarily get a larger proportion of the through rate than its mile¬
age is a proportion of the entire distance ?
Mr. Mantee. That sometimes happens.
Mr. Knapp. Is that not the usual and ordinary course of procedure ?
Mr. Mantee. I do not know that I can say so. I will answer that
in this way : If we originated traffic which could not be handled by
any other line except on a division of the rate with us, we would
attempt to get as large a division of that rate as conditions would
permit.
Mr. Knapp. And it is a frequent fact that you find those conditions
to exist ?
Mr. Mantee. We do find them.
Mr. Knapp. And you frequently get as high as your full local on a
division under those circumstances, do you not ?
Mr. Mantee. I would not say frequently. I would say we do get
it.
Witness excused.
C. S. Wight, having béen duly sworn, testified as follows:
Mr. Maechand. You are the freight-traffic manager of the Balti¬
more and Ohio ?
Mr. Wight. Yes, sir.
Mr. Maechand. And you are located in Baltimore?
Mr. Wight. Yes, sir.
Mr. Maechand. What division has your road in with the Illinois
Northern road ?
Mr. Wight. We have 110 divisions.
Mr. Maechand. You have no divisions?
Mr. Wight. No, sir.
Mr. Maechand. I)o you get any traffic from the International
Harvester Company ?
Mr. Wight. Yes, sir.
Mr. Maechand. You do?
Mr. Wight. Yes, sir.
Mr. Maechand. What have you—a switching charge ?
Mr. Wight. Yes, sir.
Mr. Maechand. What arrangement have you with the Chicago,
West Pullman and Southern ?
Mr. Wight. I think it is a switching arrangement only.
Mr. Maechand. And with the Chicago, Lake Shore and Eastern?
Mr. Wight. We'have both percentages and switching.
Mr. Maechand. You have percentage arrangements and switching?
Mr. Wight. Yes, sir.
Mr. Maechand. What percentage arrangement have you ?
Mr. Wight. We have percentage arrangements which average on
seaboard business about 10 per cent and on western termini about 15
per cent.
Commissioner Pbouty. What do you mean by western termini ?
Mr. Wight. That is, Pittsburg and Buffalo.
Mr. Maechand. The western termini of the trunk lines ?
Mr. Wight. Yes, sir.
72
Mr. Marchand. With what other belt or switching roads and in¬
dustrial lines in Chicago have you traffic arrangements for divisions?
I am not talking about switching charges.
Mr. Wight. We have percentages with the Chicago Junction in
addition to switching, and with the Chicago, Lake Shore and Eastern.
(See correction of this statement in Mr. Wight's letter dated May
10,1904, hereto attached.)
Mr. Marchand. With the Chicago Junction ?
Mr. Wight. Yes, sir.
Commissioner Prouty. On what business, Mr. Wight ?
Mr. Wight. With the Chicago Junction?
Commissioner Prouty. Yes, sir.
Mr. Wight. We have percentages varying from 8 to 25 per cent,
according to the locality—according to the memorandum I have here
from our office—to and from Blue Island, Hammond, Dolton, and
Riverdale.
Commissioner Prouty. Do you connect with the Illinois Northern?
Mr. Wight. No, sir ; we do not.
Mr. Marchand. Does your answer, Mr. Wight, contain the names
of all the lines with which you have switching arrangements ?
Mr. Wight. Or percentages?
Mr. Marchand. Yes, sir.
Mr. Wight. Yes, sir.
Mr. Marchand. I understood you to say that you had a percentage
arrangement with the Chicago Junction Railway?
Mr. Wight. That is what my office reports to me on this list.
Mr. Marchand. Is Mr. Weed in the room yet?
Mr. Shaw. Mr. Weed lias gone. I have sent for him to come back.
Mr. Wight. My office gives me percentages with the Chicago
Junction Railway from 8 to 25 per cent on traffic from and to Blue
Island. Hammond. Dolton. and Riverdale. It may be a clerical
error, but I have to testify to my record.
(See correction of this statement in Mr. Wight's letter of May 10,
19°4.)
Commissioner Prouty. You say you allow a division to the Chi¬
cago. Lake Shore and Eastern Railway?
Mr. W ight. Yes, sir.
Commissioner Prouty. Which varies from 10 per cent to 15 per
cent ?
Mr. Wight. That is the published percentage; yes, sir.
Commissioner Prouty. How long u nee that division has been
allowed ?
Mr. Wight. Oh, a good many years, sir; it is not of recent
occurrence.
Commissioner Prouty. Tbout the same division as it is now?
Mr. Wight. That would be simply on general traffic.
Commissi«a 1er Prouty. Does that apply to both inbound and out¬
bound traffic ?
Air. AATgiit. On a good deal of goods.
Commissioner Prouty. Do you have any different arrangement on
any other class of traffic with that road?
Mr. AATgiit. Yes, sir.
Commissioner Prouty. What is that arrangement?
Air. AATgiit. On coke.
73
Commissioner Prouty. Coke from what point?
Mr. Wight. From the Connellsville region.
Commissioner Prolty. What division do you allow on coke?
Mr. Wight. We allow 70 cents.
Commissioner Prouty. Seventy cents a ton?
Mr. Wight. Yes, sir.
Commissioner Prouty. How much would that amount to a car?
Mr. Wight. I supposent would run about 20 tons to the car,
about—anywhere from $14 to $25 a car.
Commissioner Prouty. What is the rate upon that coke from the
Connellsville region to Chicago?
Mr. Wight. $2.65 a ton.
Commissioner Prouty. That is a very large volume of traffic, is
it not?
Mr. Wight. Yqs, sir.
Commissioner Prouty. Have you any other traffic on which you
have any special arrangement with them ?
Mr. Wight. Yes, sir: we have some special arrangements on coal.
Commissioner Prouty. From what mines?
Mr. Wight. From We-t Virginia.
Commissioner Prouty. What allowance do you make on coal?
Mr. Wight. The coal is put in there for their fuel use; we charge
them $1.20. We do that by making a through rate of $2 and allow
them 80 cents.
Commissioner Prouty. That is for the consumption of the railroad?
Mr. Wight. Yes, sir.
Commissioner Prouty. How does it happen that you make this
large allowance on coke ?
Mr. Wight. That is the growth of competition as between railroads
and also between coke districts.
Commissioner Prouty. That coke is consumed by the Illinois Steel
Company ?
Mr. Wight. Yes. sir; and by other plants at Joliet.
Commissioner Prouty. Does the Illinois Steel Company or the
United States Steel Corporation pay the full tariff rate now to you?
Mr. Wight. They are supposed to pay it to the—I am not positive
as to the auditor's arrangement; but I know we collect $2.65 less 70
cents.
Commissioner Prouty. You collect the full tariff rate less this 70
cents which you allow ?
Mr. Wight. Yes, sir.
Commissioner Prouty. You do not know what is done with that
70 cents ?
Mr. Wight. No, sir.
Commissioner Prouty. Has that been true in years past, Mr.
Wight ?
Mr. Wight. Yes; for several years past. It has varied from time
to time owing to the stress of competition.
Commissioner Prouty. How low a rate has eVer been applied upon
that coke ?
Mr. Wight. I do not think that we ever had any other arrangement
with the Chicago, Lake Shore and Eastern via the present junction
at any different figure.
74
Commissioner Prouty. Has the steel company itself ever received
a rebate or paid a lover rate ?
Mr. Wight. Will you kindly put that question not quite so general.
I am sure I do not know whether they have or not.
Commissioner Prouty. In the last five years?
Mr. Wight. "Who from ?
Commissioner Prouty« From the Baltimore and Ohio Kailroad
Company.
Mr. Wight. No, sir.
Commissioner Prouty. So that no time during the last five years
Mr. Wight. I won't say five years. I won't say that far back.
Mr. Marchand. The limitation is three years, Mr. Wight.
Mr. Wight. For three years, I think I am perfectly safe in saying
that.
Commissioner Prouty. You say that allowance is the result of com¬
petition ?
Mr. Wight. Yes, sir.
Commissioner Prouty. What kind of competition—competition
with whom ?
Mr. Wight. Well, as I said, competition among the railroads that
desire to get the traffic, and also competition among the different coke
interests or districts—the Virginia, that is, the Kanawha and Poca¬
hontas, and the Kentucky cokes are all trying to get in there.
Commissioner Prouty. The different cokes and different railroad
companies in order to reach the Illinois Steel Company must do it
over this line of railroad ?
Mr. Wight. I am not prepared to say they must.
Commissioner Prouty. Is there any other road that reaches the
plant of the Illinois Steel Company except the Chicago, Lake Shore
and Eastern ?
Mr. Wight. I am not certain about the Kentucky coke, but the
other roads all ship over the Chicago, Lake Shore Und Eastern, as I
understand it.
Commissioner Prouty. Then, how would the force of competition
induce the giving of this large division to this road? Has it been
understood that that road was really a part of the Illinois Steel Com¬
pany, so that by granting a large division there you would secure the
business from the steel company ?
Mr. Wight. I should not say that was ever stated.
Commissioner Prouty. How did you understand that the granting
of this large division to that railroad company would enable you to
ship your coke ?
Mr. Wight. We certainly believed that unless we. made that allow¬
ance we would not g;et the coke to ship.
Commissioner Prouty. You would hardly believe that unless the
steel company got some benefit in some way from the division?
It would not make any difference to them otherwise—the granting of
this divison of 70 cents to that road?
Mr. Wight. That,.of course, would only be a supposition on my
part.
Mr. Marchand. Mr. Wight, you testified that your company liad
a division in with the Chicago Junction Railroad. Are you not
mistaken in that: are you not thinking of the Chicago Terminal
Transfer Railroad Company ? I call your attention to the fact that
75
the testimony of the witness (of the president of .the Chicago Junc¬
tion Railroad) was directly opposite. Besides, I find that in your
answer you state that to the Chicago Junction Railroad you allow
a switching charge; that there is a switching charge allowed the
Chicago Junction Railroad and not a division. I make that sugges¬
tion in order that you might change it.
Mr. Wight. It may be a clerical error, but it is given in this state¬
ment which I have. I will have it investigated and will correct my
statement if it is found to be in error.
(See correction made by letter of May 10, 1901.)
Mr. Marchand. Your answer here—1 expect you made it—the
answer of the Baltimore and Ohio Railroad, which has been made by
you, states that there is a switching allowance.
Mr. Wight. We have both.
Mr. Marchand. You have both?
Mr. Wight. Yes, sir.
Mr. Marchand. The answer does not so state. The answer states
that you have simply a switching charge and not—let me look at it
again—yes. and not a division.
Mr. Wight. I think that was not the intention of the report.
Mr. Marchand. You think that ivas not the intention of this
answer ?
Mr. Wight. I think not. Let me see that, please. I think I can
explain that.
Commissioner Fifer. You say you think you pay a switching
charge and division, both?
Mr. Wight. Yes, sir.
Mr. Marchand. Then you stand on your first testimony as to
that—that there is a division as well as a switching charge?
Mr. Wight. That is the record I have. If Ï am wrong I will
advise you.
Commissioner Ftfer. That is not on the same treffe—both the
switching charge and division?
Mr. Wight. Oh, no.
Commissioner Prüft v. Do you reach steel plants at other points
than Chicago?
Mr. Wight. Do we reach any steel plants?
Commissioner Prot:ty. Does your line reach steel ¡fiants at other
points ?
Mr. Wight. No, sir. We have to use terminal roads to reach them.
Commissioner Protjty. By " terminal, roads " you mean some road
that is owned by-some steel plant and operated in connection with
some steel plant, or some terminal railroad proper?
Mr. Wight. The only steel concerns that we reach or go near to
reaching is the Illinois Steel Company, which is reached by the Chi¬
cago, Lake Shore and Eastern. The Indiana Harbor Steel plant is,
of course, beyond our track, and we have to reach that by the
Indiana Harbor Railroad.
Commissioner Profit. What do you regard as a fair switching
charge, Mr. Wight, for a haul of from 1 to 3 miles?
Mr. Wight. I do not believe that can be averaged up. It depends
a great deal on the cost of the traffic. It depends upon the cost of the
road itself. It also depends upon the volume of traffic, and it depends
upon the arrangements that the road has; for instance, whether the
76
road has to pay a trackage charge over another road : that is. has only
a part of its own road and a part of another road. All those things
have to be considered.
Commissioner Prox ty. Yon are familiar with the switching
charges imposed here in Chicago, are yon not
Mr. Wight. I know of them ; yes. sir.
Commissioner Proxty. Do yon regard them as reasonable?
Mr. Wight. Some of them are reasonable and some of them are
unreasonable. On some of the belt roads here we can get reasonable
trackage. On some other railroads that are competitors of ours
they charge us local rates. The switching charge at Chicago is a
very complicated thing, intricate: and to say just exactly what would
be a fair charge is a matter you would have to take up in each
individual case.
Commissioner Proxty. Would you regard your allowance of 70
cents a ton on coke as a reasonable allowance ?
Mr. Wight. To answer that fairly I woxdd have to know what the
cost of the trackage arrangements of the Chicago. Lake Shore and
Eastern are: just exactly what their ro'ad lias cost them, and what
they have to pay to reach their territory. They get this coke at
Indiana Harbor and take it as far as Joliet.
Commissioner Proxty. Is the rate on coke the same to Joliet as to
Chicago ?
Mr. Wight. Yes. sir.
Commissioner Firei;. Do you regard your switching charge as paid
by your company, and the division, as reasonable in ex'erv instance?
Mr. Wight. Ás 1 say, 1 could not answer that intelligently without
knowing: what the cost of the Chicago, Lake Shore and Eastern was.
what its trackage arrangements are. and a good many other matters
that I know nothing about.
Commissioner Fiffr. Somebody must have investigated those ques¬
tions before the divisions were agreed upon ?
Mr. W igiit. Xot as to the operation of the road; no, sir. I say the
rate was compelled by competition of other railroads and other coke
districts.
Commissioner Fifer. Compelled by competition, without any re¬
gard to the cost of the service ?
Mr. Wright. If we found we could not get there without paying a
dollar, then xve would pay a dollar.
Commissioner Fifer. In fixing these charges, was not the terminal
cost taken into consideration' at all ?
Mr. Wight. Xot in the switching charge: no. sir. We do not ask
a road how much it cost the road to operate.
Commissioner Fifer. Is it fixed differently from a division made
with a through line for a through rate ?
Mr. M ight. If we make a division with a through line for a
through rate ?
Commissioner Fifer. Do you arrive at the division of the through
rate in a different way in that instance from what you do for the ter¬
minal division
Mr. M ight. I do not catch the point, Mr. Fifer.
Commissioner Fifer. Your road, for instance, has through rates
with different lines through the country, rates that you publish and
file with the Commission? *
77
Mr. Wight. Yes, sir.
Commissioner Fifer. Now, is that sort of rate made on a different
basis, or on different considerations from the switching rate allowed
here in this city, or the division of the rate which is allowed to
these local roads?
Mr. Wight. Every percentage arrangement with every road is a
matter of bargain and dne to special considerations. For instance,
if von want to put in per cents with a short road yon have to allow
them more than you otherwise would—than if you put it in by a road
that has a long haul, in order for them to get a fair proportion of
the revenue, because the short roacl has to do the terminal work, and
is entitled therefore to more than it would get on the basis of its
mileage.
Commissioner Fifer. When you come to make a through rate for
these long hauls with other roads, you consider in some degree
the service, the cosr of the service rendered by the respectve roads
which join to make that through rate, don't you?
Mr. Wight. If I understand your question correctly, we use a dif¬
ferent basis when we are prorating with a road that has a long haul
from one that has a short haul.
Commissioner Fifer. The basis in every instance, or at least in
some degree, is the cost of the service rendered by each of the roads
that join to make the through rate. Is not that so ?
Mr. Wight. In a per cent and in a terminal charge, or switching
charge, the actual cost of the service has very little consideration.
Commissioner Fifer. You arrive at it, then, from a different basis
from what you do when joining with a road to make a through haul
on a published tariff; for instance, if you join with a road to make a
through rate from here to New Orleans, or from here to Denver, or,
say, from any point on your road to any other point, is that arrived
at on a different basis from what you arrive at the division allowed
the local road here in this city or in this vicinity?
Mr.. Wight. Well, I can simply say that every per cent with every
road at every terminal, with a short-haul road, has different consid¬
erations and different elements ; and you can not put down a rule that
will govern in all of them unless the conditions are exactly alike. As
I stated, we can get switching from some of these belt lines for a
dollar and from some it is $5 or $6, and some roads, competitors,
charge us $12 and $15. It is simply a matter of conditions of traffic
and the road you are dealing with.
Commissioner Fifer. Do you pay whatever charge is imposed?
How is that? Do you in every instance pay here the charge that is
imposed by the switching roads?
Mr. Wight. I will pay it, or else go without the business, because
I can not get the business unless they will switch for me.
Commissioner Fifer. So you have not very much to say about it,
then?
Mr. Wight. Only as I can bring any reasonable argument to bear
upon them. It is their business, their local business, and they can
ask what they please, and as long as as they can get other people to
give it, and we have got to give it. As long as they can get one road
to make them that allowance, all the rest have got to give it to them.
Commissioner Fifer. If it is a competing road ?
Mr. Wight. Well, for instance, if that was located on one of the
78
trunk lines and the freight is going to an eastern point, they won't
switch that for us; they would not put it in the cars for us, and we
could not get it if we allowed them $25 a car, because they want it
themselves. If it is on one of the terminal roads and they have a
charge, we can take it at that price or leave it alone.
Commissioner Fifer. So they have got you in that way?
Mr. Wight. They have, sir. We had a case lately, within two
years, where one of the terminal roads notified all of the eastern trunk
lines that they would increase their switching charges into the stock
yards, and the eastern lines had to pay it, because they could not get
to the stock yards unless they paid it.
Mr. Marchand. What line was that?
Mr. Wight. You all know the road that goes into the stock yards.
3 am not going to mention it.
Mr. Marchand. The Chicago Junction?
Mr. Knapp. About the coke you mention that you carry for the
Illinois Steel Company—that comes over your road largely in full
train loads, don't it—solid trains of coke?
Mr. W ight. Yes, sir.
Mr. Knapp. And it comes in cars that are furnished by the Chi¬
cago, Lake Shore and Eastern, almost entirely, or a large proportion?
Mr. Wight. A large proportion.
Mr. Knapp. And those are specially built steel cars, devised spe¬
cially for the carrying of coke ?
Mr. Wight. Yes, sir.
Mr. Knapp. Chicago, Lake Shore and Eastern receives that train
load of coke in its yard at Clark Junction?
Mr. Wight. Yes, sir.
Mr. Knapp. Then, the Chicago, Lake Shore and Eastern makes
delivery of that coke to the Illinois Steel Company ?
Mr. Wight. Or their other plants ; yes, sir. -,
Mr. Knapp. Do you know anything about the methods adopted by
the Chicago, Lake Shore and Eastern in delivering that coke?
Mr. Wight. I do not, sir.
Mr. Knapp. Is it not a fact that in the ordinary arrangements
made between two lines providing for a through rate, that the deliver¬
ing road collects from the consignee the entire rate for the through
haul ?
Mr. Wight. That is the understanding; yes, sir.
Mr. Knapp. And if you are the originating road and another road
is the delivering road, you collect your proportion from the delivering
road?
Mr. Wight. That is generally the case; yes, sir.
Mr. Knapp. That is so in the case of the division between your¬
selves and the Chicago, Lake Shore and Eastern, is it not? You
make no collections whatever from the Illinois Steel Company, but
the Chicago, Lake Shore and Eastern collect it all from the Illinois
Stel Company? Is that not so?
Mr. Wight. I am not positive about that. That is an auditing
matter, and I have not looked into that.
Mr. Knapp. You do not know that your road collects all of its pro¬
portion for its part, of the haul from the Chicago, Lake Shore and
Eastern, and not from the Illinois Steel Company ?
Mr. Wight. I am not positive about that.
79
Mr. Knapp. If the Chicago. Lake Shore and Eastern did not do
this terminal work you would have to perform the same work as they
do for this through rate you mention in your through rate.
Mr. Wight. Yes, sir.
Mr. Shaw. In regard to this rate which you say you have with the
Chicago Junction let me call your attention to the fact that the gen¬
eral freight manager of the Chicago Junction Railroad Company
testified that they simply got a switching charge, and that that was all
they did get. On the other hand, the representative of the Chicago
Terminal Transfer Company testified that on some freight they got a
switching charge and that on another freight they got a percentage.
Now. T it not ¡possible that you have gotten those two companies
mixed ?
Mr. Wight. It is possible that it may be in error. I will look it up
and advise the Commission. I am speaking from this memorandum
given me by my office.
(See correction in letter of May 10, 1904.)
Mr. Siiaw. When you have your clerk look that up and confirm it,
see if he was not looking originally at your record prior to Jan-
uarv 1.1900.
iïr. W ight. We have been at a disadvantage down in Baltimore
lately because we were burned out. as you know, and had to get new
records, and it is possible they made a mistake.
Commissioner Prottty. What do you pay for the use of these coke
cars?
Mr. Wight. The regular mileage.
Commissioner Prouty. You still pay mileage and not a per diem?
Mr. Wight. We did pay mileage, and I know of no change.
Commissioner Prottty. That is six-tenths of a cent each way ?
Mr. Wight. Yes. sir; each way.
Commissioner Proyty. You carry those cars back without any
load?
Mr. Wight. We carry them back empty ; yes, sir.
Witness excused.
Mr. Knapp. "Would it not be well to straighten out this question
about the collection? Mr. Banks, of the Chicago, Lake Shore and
Eastern, knows how that is dQne, and he can straighten it out. I think.
Mr. Marchand. Do you wish to recall Mr. Banks.
Mr. Knapp. Yes. sir; I would like to recall him upon that point.
A. F. Banks, recalled.
Mr. Banks. The coke is through billed.
Mr. Knapp. To the Illinois Steel Company?
Mr. Banks. Consigned to the Illinois Steel Company, and through
billed by the Baltimore and Ohio in this case to the Chicago, Lake
Shore and Eastern road, the usual settlements between railroads fol¬
lowing. The Chicago, Lake Shore and Eastern collects the entire
freight charges from the Illinois Steel Company, and then the
Chicago, Lake Shore and Eastern—the ordinary settlement between
the Chicago. Lake Shore and Eastern and the Baltimore and Ohio
is made.
Mr. Knapp. That is, it pays to the Baltimore and Ohio its division
of the through rate ?
80
Mr. Banks. Its proportion of the through rate.
Commissioner Proyty. Is the rate to Chicago and Joliet the same
on that coke ?
Mr. Banks. It is.
Commissioner Proitï. The same Chicago and Milwaukee?
Mr. Banks. To all the Chicago plants it is the same; to Joliet it is
the same, and to Milwaukee it is 10 cents above the Chicago rate.
Mr. Knapp. That is all.
Witness excused.
F. Zimmerman. having been duly sworn, testified as follows:
Mr. Marchand. Mr. Zimmerman, what is your position with the
Michigan Central Bailroad?
Mr. Zi m merman. Assistant general freight agent at Chicago.
Mr. Marchand. Have you seen the answer made by the Michigan
Central Bailroad Company to the Commission in response to this
inquiry ?
Mr. Zimmerman. I have not.
Mr. Marchand. Have you a division with the Indiana Harbor
Bailroad—in with that company ?
Mr. Zimmerman. We allow them a switching rate.
Mr. Marchand. Do you allow them a percentage division ?
Mr. Zimmerman. Xo, sir; we do not.
Mr. Marchand. Does the answer of the Michigan Central state
that you do allow a division, a percentage division ?
Mr. Zimmerman. Is this [referring to answer] the entire answer?
Mr. Marchand. That is the entire answer with respect to divisions ;
yes. sir. .Tint state to the Commission what the answer of the Michi¬
gan Centra] Railroad is in respect to that?
Mr. Zimmerman. This reads :
Railroads having physical connection with the Michigan Central, to which it
allows a share, or division, of joint rates ; and the point, or place of connection,
or intersection, between its line and each of said railroads.
Mr. Marchand. Under that heading is the Indiana Harbor Bail¬
road mentioned ?
Mr. Zimmerman. It is.
Mr. Marchand. I call your honor's attention to the fact that it
was testified to by the representatives'here of the Indiana Harbor
Railroad Company that they had no division in with the Michigan
Central Railroad : but the answer of the Michigan Central is to the
effect that they have.
Commissioner Proijty. Mr. Zimmerman says they have not.
Mr. Zimmerman. That is susceptible of various interpretations.
The maximum charge we allow them in any case is the division of the
rate, but it is not a percentage division of the rate, to which you pos¬
sibly have reference.
AÏr. Marchand. I' have no further questions to ask this witness
beyond what I have already asked him.
Commissioner Prouty. So far as you know, Mr. Zimmerman, do
any of the trunk lines loading east have a percentage division with
any of these industrial roads or belt roads?
Mr. Zimmerman. Not with the Indiana Harbor.
81
Commissioner Prouty. They have with the Illinois Steel Company,
though ?
Mr. Zimmerman. With the Chicago, Lake Shore and Eastern;
yes, sir.
Commissioner Prouty. Llave they with any other road except that?
Mr. Zimmerman. Kot that I know of. We have not.
Commissioner Prouty. How long have these divisions been in effect
over your line ?
Mr. Zimmerman. Quite a number of years.
Commissioner Prouty. Have you been asked by any of these other
roads to enter into that arrangement?
Mr. Zimmerman. Not other than on a switching basis.
Mr. Marchand. That is all, Mr. Zimmerman.
" Witness excused.
J.. H. Hiland, having been duly sworn, testified as follows :
Mr. Marchand. What is your position, Mr. Lliland?
Mr. Hiland. Third vice-president.
Mr. Marchand. Third vice-president of the Milwaukee road?
Mr. Hiland. Yes. sir.
Mr. Marchand. In charge of traffic ?
Mr. Hiland. Yes, sir.
Mr. Marchand. What switching charge do you impose upon the
Deering division of the International Harvester Company's traffic?
Mr. Hiland. My recollection is $2 a car.
Mr. Marchand. $2 a car?
Mr. Hiland. Yes, sir.
Mr. Marchand. Your road and the Northwestern are the only
lines which reach the Deering plant, are they not?
Mr. Hiland. Yes, sir. Of course, if it goes out over our own road
there are no charges whatever.
Mr. Marchand. Now, Mr. Hiland, with respect to the Merchants'
Lighterage Company, have you a traffic arrangement with that
company ?
Mr. Hiland. We have not. [Mr. Hiland, in a letter dated May 6,
1904, corrects this answer. The letter is as follows :]
May 6, 1904.
Mr. J. D. Yeomans,
Commissioner Interstate Commerce Commission,
Washington, D. C.
Dear Sir : In giving my testeimony in regard to the relations between this
company and the Merchants' Lighterage Company to-day, I stated on witness
stand that we had no arrangement directly with that company. I find on
returning to the office this afternoon, that during my absence in Florida, about
three weeks ago, negotiations were entered into with the Merchants' Lighterage
Company to handle business direct with us at our dock house on the Chicago
River, and that the dock house which had not been in proper condition to
receive and discharge freight prior to my departure for the South had been put
in order and that we have been receiving freight from the Merchants' Lighter¬
age Company during the past two or three weeks. Joint tariff has been made
in preparation and is effective May 5, so that I believe you can readily under¬
stand that the testimony given by me is excusable under the circumstances.
Mr. Marchand. Do you get any traffic from them?
Mr. Hiland. Not from them direct, because we do not connect with
them.
i c c—05 6
82
Mr. Marchand. Well, how do you get it ?
Mr. Hilan». Wo get it through their connections, the belt line, and
through the belt we pay the charge which they, I presume, in turn
pay to the so-called lighterage company.
Mr. Marchand. What do you pay?
Mr. Hiland. We pay—I am not familiar with the divisions, but we
pay the customary and prevailing divisions that exist with other lines
as I understand ii. I am not familiar enough to say. but 1 think it is
15 per cent.
Mr. Marchand. Fifteen per cent ?
Mr. Hiland. It does not exceed 20 per cent. I will say that.
Mr. Marchand. That goes to the belt line, the Chicago Terminal
Transfer Company?
Mr. Hiland. Yes, sir.
Mr. Marchand. And they make settlements with the Merchants'
Lighterage Company ?
Mr. Hiland. Yes, sir.
Mr. Marchand. Do you consider that an advantageous arrange¬
ment to have- -this boat line? Is it an advantageous arrangement for
the railroad ?
Mr. Hiland. Xot for us as it exists to-day. We would like to have
delivery made to our own roacl, but our dock house is not so located
that we can handle the business. Therefore, the only means we have
of getting the business in competition with lines which have these
arrangements is to secure it through the Chicago Terminal Transfer
Railroad, which delivers to us from their docks.
Mr. Marchand. How did you do prior to the inauguration of this
boat line? How did you get traffic from points reached by the Mer¬
chants' Lighterage Company? Take Hibbard. Spencer, Bartlett &
Co. as an illustration.
Mr. Hiland. By drays.
. Mr. Marchand. You got it direct by drays?
Mr. Hiland. Yes, sir.
Mr. Marchand. Did you absorb any portion of that cartage?
Mr. Hiland. Xo, sir.
Mr. Marchand. Then you were practically in 15 per cent, if that is
the per cent you have to pay out now ?
Mr. Hiland. Yes. sir; if that is the correct per cent.
Mr. Marchand. Does your answer, Mr. Hiland, contain the names
of all lines with which you have switching or percentage arrange¬
ments in and around Chicago?
Mr. Hiland. I do not think I made answer to that. I was away
when that answer was made; but, as I understand it, it does. I think
it was made and signed by the general freight agent, as I recollect.
Mr. Marchand. Do you-recall any lines that are not named in
this answer? Do you know of any other line with which you have
divisions?
Mr. Hiland. I do not. I have seen the list.
Mr. Marchand. Do you connect at any point with the Chicago,
Lake Shore and Eastern Railway ?
Mr. Hiland. We do.
Mr. Marchand. Where?
Mr. Hiland. Here in Chicago, and also at Bay View—Milwaukee.
83
Mr. Marchand. Do you allow them a division on western business
here in Chicago ?
Mr. Hilan». Yes, sir.
Mr. Marchand. What is that division?
Mr. Hiland. As testified to by Mr. Banks, 20 per cent ; that is my
recollection.
Mr. Marohand. Do you allow them a division at Milwaukee?
Mr. Hiland. Yes, sir ; I think so.
Mr. Marchand. What is that division?
Mr. Hiland. The same, according to my recollection. That is on
local business, understand.
Mr. Marchand. What do you mean by local business?
Mr. Hiland. Originating 011 the rails of the Chicago, Lake Shore
and Eastern Railway.
Commissioner Prouty. What are on the rails of the Chicago, Lake
Shore and Eastern at Bay View ?
Mr. Hiland. At Bay Y km there are industries i hat are located on
their tracks.
Commissioner Prouty. Are there any industries except the Illi¬
nois Steel Company's plant ?
Mr. Hiland. I am not certain about that, and I would not want to
testify on that point. My recollection is that there are none, but I
would rather not testify on that.
Commissioner Prouty. IIow far does that line at Bay View handle
the traffic to the connection with your line?
Mr. Hiland. Oh, I should say, perhaps, 11 miles or 2 miles.
Commissioner Prouty. Do they connect with the Northwestern
there ?
Air. Hiland. I understand thev do.
Commissioner Prolty. And what is the distance to the North¬
western tracks?
Air. Hiland. I would say about the same as ours, substantially the
same.
Commissioner Prouty. On all business of the Illinois Steel Com¬
pany at Bay View, on all western business, you allow this division of
20 per cent?
Air. Hiland. AVe allow 20 per cent on business originating as
stated, locally on their line, going to points on our line.
Commissioner Prouty. Business originating at Bay View, destined
for points south or east of Chicago, would come to Chicago over their
own rails, or over some road with which they had running arrange¬
ments ?
Mr. Hiland. From Bay View ?
Commissioner Prouty. Yes. You would not bring that down here?
Mr. Hiland. AVe take that, as I understand it—Air. Banks will cor¬
rect me if I am wrong—we take that business at Bay View and deliver
it to the Elgin, Joliet and Eastern Iiailroad at Ivondout, Bay View
business going to Joliet.
Commissioner Prouty. What compensation do you receive for that?
Mr. Hiland. AVe have regular established rates and divisions. I
do not recall what the local divisions of those rates are, but the cus¬
tomary method of making the rates with the lines, or with one of our
connections, is of a reciprocal nature, which provides primarily a
prorate per mile, or prorate with a minimum to the short line, the
84
theory of that being that it is reciprocal—that they have something
in some other direction to give us for the service that they perform—
like service.
Commissioner Prouty. Do you regard the division of 20 per cent
which you make at Milwaukee a fair one Í
Mr. Hiland. Well
Mr. Iyxapp. May I interrupt right there and ask Mr. Hiland if he
is sure they make a division of 20 per cent at Milwaukee. I under¬
stand he is mistaken.
Mr. Hiland. I may be mistaken about that; possibly at Milwaukee
we do not allow 20 per cent. I know we allow the Chicago. Lake
Shore and Eastern 20 per cent, but. whether that applies at Milwau¬
kee I am not certain about that. I better correct that.
Mr. Knapp. If there is any doubt remaining I would like to have
Mr. Hiland look that up.
Mr. Hiland. I will be glad to furnish a copy of the divisions,
which will tell that.
Mr. Knapp. Do I understand you will furnish the Commission with
information which shows whether or not you have a division at Mil¬
waukee ?
Mr. Hiland. We will furnish the Commission with a copy of our
division at Milwaukee.
Mr. Marchand. On traffic from the Deering division of the Inter¬
national Harvester Company to the west which you switched, is that
ever billed via the Illinois Northern road?
Mr. Hiland. Have you any particular locality or place in mind?
Mr. Marchand. Any place in the West.
Mr. Hiland. It would not be billed that way unless it were ordered
by the Illinois Northern Railroad. Wc do not regard them as an
intermediate line for the Missouri River. If it were billed to the
Illinois Northern it would be consigned there locally and reconsigned
by the Illinois Northern locally from that point to destination. We
do not regard the Illinois Northern as an intermediate line with the
Milwaukee and St. Paul from Deering to any point on our line.
Commissioner Prouty. You receive traffic from the Illinois North¬
ern originating on its line destined for points west, do you not?
Mr. Hiland. Yes, sir.
Commissioner Prouty. And you allow that 20 per cent division
on that ?
Mr. Hiland. We do.
Commissioner Prouty. How long since you allowed that?
Mr. Hiland. Since about the middle of January last; that is, to
the best of my recollection.
Commissioner Prouty. Do j'ou allow that as a fair division?
Mr. Hiland. Fair to them—-yes.
Commissioner Prouty. Fair to the other side?
Mr. Hiland. Yes, sir.
Commissioner Prouty. On what theory do you say it is fair?
Mr. Hiland. "Well, I think they are getting all they are entitled to.
If you had asked me if I regarded the division as fair for the service
performed I should have said no; that I did not think it was exactly
fair; it is too much.
Commissioner Prouty. That is to say, you think it is fair for the
railroad to get all it can?
85
Mr. Hiland. Yes, sir ; I should get it if I were running that road.
I would got, 25 per cent, if I could.
Mr. Marchand. I do not think you understood Commissioner
Prouty. Is it fair to the road making delivery? Is it fair to the
Milwaukee road ?
Mr. IIiland. J do not quite understand the purpose of that inquiry.
Mr. Marchand. Xever mind, then.
Mr. Hiland. What do you mean by fair to us?
Mr. Marchand. You said it was fair to the Illinois Northern road?
Commissioner Prolty. I do not understand it could be fair to the
Illinois Northern road without being fair to yours.
Mr. Hiland. We could not get the business unless we paid as much
as anybody else does.
Mr. Marchand. Do you think that is a proper charge?
Mr. Hiland. If mine was the only line—if the Milwaukee road was
the only line running in there—I would allow them that charge.
Mr. Marchand. You would hold them up if you were the only line;
but instead, they hold you up. Is that it ?
Mr. IIiland. I do not know whether that is the proper interpreta¬
tion to put on that.
Mr. Marchand. I think that is the only interpretation, Mr. Hiland.
Mr. Hiland. If you want to so regard the answer, all right.
Mr. Marchand. The conditions of competition require you to pay
20 per cent ?
Mr. Hiland. Yes, sir.
Mr. Marchand. If those conditions were not present would you
pay it?
Mr. Hiland. No, sir.
Mr. Marchand. You would not pay anything if you could help it?
Mr. Hiland. No, sir. *
Mr. Marchand. What did you pay the Illinois Northern last year?
Mr. Hiland. We paid the Illinois Northern road, as I understand
it, their switching of $3 or $3.50 a car, which ever it was, and in addi¬
tion to that we had to pay the line which made the delivery from the
Illinois Northern road to our line. We do not connect directly with
the Illinois Northern road; we connect with one of the belt lines;
therefore we have to make our rates from the tracks of the Illinois
Northern road and assume the cost of delivery to our line, which
would place the goods at destination on a parity with our competitors.
Mr. Marchand. Do you do that now ?
Mr. Hiland, Yes, sir.
Mr. Marchand. You pay them 20 per cent and then pay the belt
line in addition?
Mr. Hiland. No, sir; in addition to paying the Illinois Northern
road, we ¡lay the belt line switching charge.
Mr. Marchand. You pay the Illinois Northern to-day 20 per cent,
where previously you paid $3.50 a car ?
Mr. Hiland. Yes, sir.
Commissioner Fifer. That is in addition to the belt lines. What
do you pay the belt line?
Mr. Hiland. We pay the regular published tariff. We have a
regular published tariff. I do not recall what the rate is. It runs
from $2 to $3 to $5 a car to various localities.
86
Commissioner Ftfer. You pay the Chicago. Lake Shore & Eastern
20 per cent—a division of 20 per cent ?
Mr. IIit.and. We do on some business.
Commissioner Fifer. On business that originates at South Chicago?
Mr. Hil axd. Yes. sir.
Commissioner Fifek. Is that charge any more reasonable than the
charge of the Illinois Northern road?
Mr. IIilaxd. The Chicago. Lake Shore and Eastern makes a deliv¬
ery direct to our line through their trackage arrangements. They
deliver either to us at Rondout or Spaulcling for the 20 per cent that
we allow them. We do not have to pay the Elgin. Joliet and Eastern
in addition to the 20 per cent that we pay the Chicago, Lake Shore
and Eastern.
Commissioner Fifes. The Chicago. Lake Shore and Eastern ren¬
ders more service than the Illinois Northern in your case?
Mr. IIilaxd. Yes, sir.
Witness excused.
W. B. Hamblix. having been duly sworn, testified as follows :
Mr. Marciiaxd. What is your position with the Chicago, Burling¬
ton and Quincy Railroad Company, Mr. Hamblin?
Mr. Hamblix. Assistant general freight agent.
Mr. Marchaxd. Mr. Hamblin, it lias been testified to that on traffic
from the McCormick division of the International Harvester Com¬
pany there is a service of about 1.000 feet performed in the way of
switching by the Illinois Northern road in delivering to the Chicago,
Burlington and Quincy. That is correct, is it?
Mr. Hamblix. It is about that.
Mr. Marchand. Foi; which you pay 20 per cent of the rate to the
Missouri River or to St. Paul and Minneapolis. Is that correct?
Mr. Hamblix. Yes, sir.
Mr. Marciiaxd. Your line was there prior to the International
Harvester Company absorbing these independent harvester works,
was it not ?
Mr. Hamblix. It was.
Mr. Marciiaxd. Now, what did you pay for switching prior to the
introduction of this Illinois Northern Railroad Company?
Mr. Hamblix. Nothing.
Mr. Marciiaxd. The delivery was made to you for nothing ?
Mr. Hamblix. No, sir; we did all the work ourselves.
Mr. Marchand. You did the work yourselves?
Mr. Hamblix. Yes, sir.
Mr. Marchaxd. Over whose tracks?
Mr. Hamblix. Our own.
Mr. Marchand. You have a track of your own into the harvester
works ?
Mr. Hamblix. We did have.
Mr. Marchand. What became of that track?
Mr. Hamblin. It is there yet.
Mr. Marchand. Do you still own it?
Mr. Hamblin. We own part of it.
Mr. Marchand. Who owns the rest?
Mr. Hamblin. The Illinois Northern Railroad owns the rest of it.
87
Mr. Marchand. Did they buy it from you ?
Mr. Hamblin. T don't know how they got it.
Mr. Marchand. You know they get 20 per cent of your revenue, but
you don't know how they got your track ?
Mr. Hamblin. T don't know precisely the location down there.
Prior to the Illinois Northern Kailway Ave did all the work in that
district—that is, for the McCormick Harvester Company. We did all
of the switching in and out of their work. We made all the deliv¬
eries to these other lines that they now make deliveries to themsehres.
After that they got arrangements with the Santa Fe and the Grand
Trunk and Chicago Junction, I think.
Mr. Marchand. What compensation did you get for doing their
switching?
Mr. Hamblin. $2 a car.
Mr. Marchand. How far south would you go on that line to per¬
form that switching for $2 a car ?
Mr. Hamblin. We made del Aeries to any line east or west, in doing
that service.
Mr. Marchand. Did you get down as far as Forty-ninth street?
Air. Hamblin. No, sir.
Air. Marchand. You didn't go down that far?
Air. Hamblin. No, sir; not that far. We made delivery at Western
avenue for most of them, or to the Lake Shore or Pennsylvania. We
made direct del Aeries to these lines ourselves through our AVestern
avenue yards.
Air. AIarchand. There were then, as now, a number of other indus¬
tries located on the line of the Illinois Northern?
Mr. Hamblin. I think not.
Air. AIarchand. Was the House of Correction there then—I do not
mean that is a place of industry?
Mr. Hamblin. We did the work for all the industries located near
what we called our Twenty-second street yard, down in that territory.
AYe did all the switching in the lumber district and around in that
neighborhood before these other lines were built. We did all the
work for all the different lines.
Mr. AIarchand. Do you regard 20 per cent of the rate as excessive?
Air. Hamblin. Not as we are paying it ; no.
Mr. Marchand. Not as you are paying it?
Air. Hamblin. No.
Air. Marchand. You think that is a proper charge for that
service ?
Air. Hamblin. It is a proper charge for us under the circumstances.
Air. Marchand. Arou mean the circumstances of competition?
Air. Hamblin. Yes, sir.
Mr. AIarchand. That is satisfactory to you?
Air. Hamblin. It has to be.
Air. AIarchand. What would be the effect if you did not give up
the 20 per cent?
Air. Hamblin. AYe would have none of their traffic.
Mr. Marchand. You would have none of their traffic?
Mr. Hamblin. That is, to competitive points?
Commissioner Yeomans. Why don't you strike?
Mr. Hamblin. It would probably end as most strikes do—the
people striking get the worst of it.
88
Mr. Marchand. Mr. Hamblin, was yours the first line to put in
divisions with the Illinois Northern road?
Mr. Hamblin. According to Mr. Montgomery's statement this
morning, no.
Commissioner Prouty. Why did you put in the division ?
Mr. Hamblin. In order to secure a portion of the traffic.
Commissioner Prouty. When did you put it in?
Mr. Hamblin. The 1st day of January.
Commissioner Prouty. You were satisfied, were you, that some
other company had that division in before that?
Mr. Hamblin. Yes, sir.
Commissioner Prouty. Did you confer with the other lines inter¬
ested before'you put in the division?
Mr. Hamblin. I think not.
Commissioner Prouty. You satisfied yourself first that that divi¬
sion was in and you had to meet it?
Mr. Hamblin. We were satisfied on account of the amount of
traffic that we were receiving that we had to do something.
Commissioner Prouty. What led you to believe that you had to
put in the division of 20 per cent?
Mr. Hamblin. It was the understanding that that was the least
anyone receive on that traffic.
Commissioner Prouty. The least any one would take?
Mr. Hamblin. Yes, sir.
Mr. Marchand. Did you try a less division first ?
Mr. Hamblin. No, sir.
Mr. Marchand. With respect to Merchants' Lighterage Com¬
pany—have you joint tariff with the Merchants' Lighterage
Company ?
Mr. Hamblin. We have.
Mr. Marchand. When did you put it in ?
Mr. Hamblin. The 2d day of May.
Mr. Marchand. What do you pay them ?
Mr. Hamblin. Five cents on the first four classes and 3 cents on
the others.
Mr. Marchand. Do they connect direct with your line?
Mr. Hamblin. We fixed it so they could.
Mr. Marchand. Where do they connect with you?
Mr. Hamblin. Down at what we call our Western avenue dock on
the river.
Mr. Marchand. How far are your I Yes tern avenue docks from
State street?
Mr. Hamblin. I don't know ; 2 or 3 miles, I imagine.
Mr. Marchand. From a transportation point of view is that an
advantageous arrangement ?
Mr. Hamblin. Not for the Chicago, Burlington and Quincy road.
Mr. Marchand. Can you testify as to the cost of your road under
this method of delivery by the Merchants Lighterage Company, and
what it was when it was drayed?
Mr. Hamblin. It costs us what we pay the Merchants' Lighterage
Company, besides the additional switching we have to perform in
placing cars at this dock and taking them back to our house and
rehandling them there.
89
Mr. Marchand. Prior lo the formation of the Merchants' Light-
age Company did yon get traffic from Keid. Murdoch & Co. ?
Mr. Hamblix. Yes. sir.
Mr. Marchand. How did they bring it to the depot ?
Mr. Hamblix. By team.
Mr. Marchand. Did you pay for that?
Mr. Hamblix. Xo, sir; they dich
Mr. Marchand. Did you absorb any portion of that expense ?
Mr. Hamblix. Xo. sir.
Mr. Marchand. How about Hibbard, Spencer, Bartlett & Co.?
Mr. Hamblin. The same.
Mr. Marchand. They stood the expense of that?
Mr. Hamblix. Yes, sir; they did.
Mr. Marchand. Now, yon say it costs you how much?
Mr. Hamblin. Five cents on the first four classes, and 3 cents on
the other classes; besides we have to place the cars at this boathouse
and take the cars away, up to what we call our Harrison-street house
and there reliandle the freight.
Mr. Marchand. How much of a haul is that?
Mr. Hamblin. Two or three miles each way.
Mr. Marchand. Can you appropriate the cost per car for switch¬
ing?
Mr. Hamblin. Xo, sir; I can not.
Commissioner Prouty. Why did you put in that division?
Mr. Hamblin. In order to get some of this traffic that was going
up and down the river.
Commissioner Prouty. How long had the traffic been going up
and down the river before you made this arrangement ?
Mr. Hamblin. Since last fall some time.
Commissioner Prouty. Do you know that one of your competi¬
tors had a similar arrangement before you made yours?
Mr. Hamblin. We know that from the testimony we have heard
here and from one or two tariffs filed with the Commission prior to
ours.
Mr. Knapp. The Illinois Xorthern could reach practically all the
territory that it can through the Chicago, Burlington and Quincy,
through the Santa Fe, the Wisconsin Central, and other roads, could
it not ?
Mr. Hamblin. At the present time.
Mr. Knapp. It could?
Mr. Hamblin. Yes, sir.
Mr. Knapp. And in order to make delivery to those roads they
would have several miles' haul ?
Mr. Hamblin. I imagine they would; yes, sir.
Mr. Knapp. So that if you got any business you had to allow them
the same as was allowed to the Illinois Xorthern by the roads where
the Illinois Xorthern had to perform a service of several miles' haul?
Mr. Hamblin. We found that out; yes, sir.
Mr. Knapp. You spoke of handling some of the switching for the
McCormick people before the Illinois Northern was organized for
$2 a car. You only had to haul that about a mile?
Mr. Hamblin. Well, it was whatever distance we had to haul it
in order to give it to the line we delivered to.
90
Mr. Knapp. You would put it in your yards and the other lines
would comè in there and take it out?
Mr. Hambijn. There was a regular interchange of traffic in those
yards.
Commissioner Yeotuans. Is there anything further to be asked of
Mr. Hamblin? If not, he will be excused.
Witness excused.
W. E. Keepers, having been duly sworn, testified as follows :
Mr. Marchand. What is your position with the Illinois Central,
Mr. Keepers?
Mr. Keepers. General freight agent.
Mr. Marchand. And you are located at Chicago?
Mr. Keepers. Yes. sir; Chicago.
Mr. Marchand. It has been testified to. Mr. Keepers, that you have
no division with the Illinois Northern Eailroad?
Mr. Keepers. "We have none.
Mr. Marchand. Do you get any traffic from the McCormick divi¬
sion of the International Harvester "Works?
Mr. Keepers. Yes.
Mr. Marchand. How much?
Mr. Keepers. I have not the record.
Mr. Marchand. You do not know how much you get?
Mr. Keepers. No, sir.
Air. Marchand. Do you get your share ?
Air. Keepers. I don't think we do.
Air. Marchand. You do not think you do?
Air. Keepers. Not now.
Air. Marchand. Why is it that you have not found it necessary to
put in a division with this Illinois Northern Eailroad ?
Air. Keepers. The matter has been under consideration, but no
decision has been arrived at by us yet.
Air. Marchand. A"ou have had that under consideration, you say?
Mr. Keepers. Yes, sir.
Air. AIarchand. You do not know whether you will put it in or
not ? What will be your purpose in putting it in if you do put it in ?
Air. Keepers. To meet competition.
Air. AIarchand. To obtain some of the traffic?
Mr. Keepers. Yes. sir.
Mr. AIarchand. Does the answer which the Illinois Central Eail¬
road has filed contain the names of all the lines with which you have
divisions ?
Air. Keepers. Yes, sir.
Commissioner Procty. Do you regard this division of 20 per cent
as a reasonable division?
Mr. Keepers. With the Illinois Northern?
Commissioner Prottty. Yes, sir.
Mr. Keepers. No.
Commissioner Prouty. Do you make a division with the Chicago,
Lake Shore and Eastern ?
Mr. Keepers. Yes, sir.
Commissioner Prottty. And that division is 20 per cent on western
business ?
Mr. Keepers. Twenty per cent is the general basis.
91
Commissioner Prouty. Do you regard that as a reasonable division ?
Mr. Keepers. As a whole I think it may be so called.
Commissioner Prouty. Why is it any more reasonable than the
Illinois Northern division of 20 per cent?
Mr. Keepers. Taking it as a whole, I think it is more reasonable;
the haul is longer.
Commissioner Prouty. Where does the Lake Shore and Eastern
connect with your line ?
Mr. Keepers. At South Chicago.
Commissioner Prouty. How long is their haul from South Chicago
to a connection with your line ?
Mr. Keepers. Very slight.
Commissioner Prouty. How long would it be ?
Mr. Keepers. I do not know that you could measure the distance ;
parallel tracks, probably.
Commissioner Prouty. They deliver that traffic to you at South
Chicago, and you allow them 20 per cent?
Mr. Keepers. Not on everything.
Commissioner Prouty. On western business ?
Mr. Keepers. On western business.
Commissioner Prouty. How far would the Illinois Northern be
compelled to haul the western traffic ?
Mr. Keepers. I think about a mile.
Commissioner Prouty. Farther than the Chicago, Lake Shore and
Eastern would haul it?
Mr. Keepers. Yes, sir.
Commissionrer Prouty. Why do you say that the Lake Shore and
Eastern division is reasonable and the other is unreasonable ?
Mr. Keepers. I did not say I thought it was altogether unreason¬
able, but 20 per cent is mere reasonable for the Chicago, Lake Shçre
and Eastern than it is for the Illinois Northern.
Commissioner Prouty. Because it has been in effect longer ?
Mr. Keepers. That might give it some dignity. Probably it
seemed to be the best thing to do under all the existing conditions.
Mr. Knapp. You get deliveries also at Madison, do you not?
Mr. Keepers. At Madison?
Mr. Knapp. Yes, sir.
Mr. Keepers. We do for certain territory.
Mr. Knapp. And how long a haul is it in that case?
Mr. Keepers. What haul?
Mr. Knapp. The Chicago, Lake Shore and Eastern.
Mr. Keepers. The Chicago, Lake Shore and Eastern does not
reach Madison.
Mr. Knapp. Does it not deliver any stuff to you at Madison?
Mr. Keepers. No, sir; they do not reach Madison.
Mr. Knapp. Are you not mistaken about that?
Mr. Keepers. No. If you wish I can explain it to you. They use
the Elgin, Joliet and Eastern road.
Mr. Knapp. Don't the Chicago, Lake Shore and Eastern deliver
to you at Madison?
Mr. Keepers. No, sir; they do not reach there.
Mr. Knapp. Don't their own engines haul the stuff there ?
Mr. Keepers. Their engines haul it, but not over their own tracks.
92
Mr. Knapp. Don't you do a lot of business over tracks you do not
own ?
Mr. Keepers. No, sir; not very much. Me own most everything
we run on.
Mr. Marchand. That is all, Mr. Keepers.
"Witness excused.
Marvin Hughitt, Jr., having been duly sworn, testified as fol¬
lows :
Mr. Marchand. Mr. Hughitt, give your name to the stenographer.
Mr. Hughitt. Marvin Hughitt, jr.
Mr. Marchand. What is your position with the Chicago and
Northwestern ?
.Mr. Hughitt. Freight traffic manager of the Chicago and North¬
western line.
Mr. Marchand. State, to the Commission when the Chicago and
Northwestern Railway first put in divisions with the Chicago, Lake
Shore and Eastern Railway ?
Mr. Hughitt. March 5.
Mr. Marchand. 1904?
Mr. Hughitt. Yes, sir. Excuse me; what road clid you ask about?
Mr. Marchand. The Chicago. Lake Shore and Eastern.
Mr. Hughitt. Well, we have had it in for a number of years. I
can not give you the exact date.
Mr. Marchand. Prior to the division you made a switching charge?
Mr. Hughitt. Yes, sir.
Mr. Marchand. Do you remember how much?
Mr. Hughitt. No, sir; I do not.
Mr. Marchand. Do you allow that division now both at Mil¬
waukee and Chicago?
Mr. Hughitt. No, sir; at Milwaukee I say no, sir. We have no
divisions on western business out of Milwaukee at all, but where we
do business going out of Milwaukee going to Joliet for points where
we deliver to the Elgin, Joliet and Eastern at Milwaukee we have
divisions with them based a good deal up oil the mileage basis, the
same as we have with any other common carrier.
Mr. Marchand. On the Northwestern business there you pay a
switching charge?
Mr. Hughitt. Nothing at all.
Mr. Marchand. When did you put in divisions with the Mer¬
chants' Lighterage Company?
Mr. Hughitt. We never had them.
Mr. Marchand. Do you handle any traffic from the Merchants'
Lighterage Company ?
Sir. Hughitt. They deliver to us through their boat line on the
river at Sixteenth street.
Mr. Marchand. Do you pay them anything for it?
Mr. Hughitt. Not a cent.
Mr. Marchand. How long have they been doing that?
Mr. Hughitt. Since last fall, I believe, sir.
Mr. Marchand. Do you get anything from Hibbard, Spencer,
Bartlett & Co.?
Mr. Hughitt. Yes, sir; we do.
Mr. Marchand. From Reid, Murdock & Co?
93
Mr. Hughitt. Yes, sir.
Mr. Marchand. Do you get the same amount of traffic that you got
prior to the formation of the lighterage company?
Mr. Hughitt. Traffic varies at times. Our tonnage would run up
and run down. We are doing to-day a fair tonnage with those
people.
Air. Marchand. You do not find it necessary to make a division
with the lighterage company?
Mr. Hugiiitt. I do not think that practice has been in vogue long
enough to make it necessary. If it kept up we would undoubtedly
have to do the same as our competitors.
Air. AIarchand. AA7here do they deliver to you?
Mr. Hughitt. Sixteenth street and the river.
Air. AIarchand. Direct to your tracks?
Air. Hughitt. Yes, sir.
Air. AIarchand. Not using the medium of a belt line?
Air. Hughitt. No, sir.
Air. AIarchand. Now, on traffic from the Heering division of the
International Harvester works what switching charge do you get?
Air. Hughitt. We collect from them $3 a car.
Air. AIarchand. On traffic to the west, Mr. Hughitt, is that ever
billed via the Illinois Northern ?
Air. Hughitt. If they wanted the business. We have no through
tariffs with the Illinois Northern—not on traffic to the west from the
Deering Company's business.
Air. AIarchand. Do you over deliver to a western line traffic from
the Deering works via the Illinois Northern ?
Mr. Hughitt. If they called upon us for that sort of a delivery
under the switching arrangement, we would deliver to them.
Mr. AIarchand. Do you do that?
Air. Hughitt. Not that I can remember now.
Mr. Marchand. You say the rate is $3?
Mr. Hughitt. That is what we collect, sir. There is no switching
charge, of course, you understand, on any business going west over
the Northwestern "Railway. It is only when we make delivery to
some connecting line.
Mr. Marchand. Does your answer, Mr. Hughitt, contain the names
of all the lines with which you have divisions or arbitrary charges?
Mr. Hughitt. Yes, sir; I believe so.
Mr. Marchand. That is all, Air. Hughitt.
Witness excused.
Burton Johnson, having been duly sworn, testified as follows:
Mr. Marchand. Please give your name to the stenographer, Mr.
J ohnson.
Air. Johnson. Burton Johnson.
Mr. Marchand. What is your position with the Wisconsin Central ?
Mr. Johnson. General freight agent.
Mr. Marchand. And located where?
Mr. Johnson. At Milwaukee.
Mr. Marchand. What percentage division have you with the Chi¬
cago, Lake Shore and Eastern Railway?
Mr. Johnson. Twenty per cent.
94*
Mr. Marchand. When clid you make that division?
Mr. Johnson. Four or five years ago.
Mr. Marchand. What per cent have you with the Chicago, West
Pullman and Southern ?
Mr. Johnson. Twenty per cent.
Mr. Marchand. When did you make that ?
Mr. Johnson. Last September.
Mr. Marchand. Have you a tariff in with the Merchants' Lighter¬
age Company ?
Mr. Johnson. Xo.
Mr. Ma rciiand. .Vre you getting anything from them?
Mr. Johnson. Xo; not that I know of. We may.
Mr. Marchand. You have had, in a cartage tariff in Chicago, have
you not ?
Mr. Johnson. Yes. sir.
Mr. M AECHAND. Which has recently been canceled?
Mr. Johnson. Yes. sir.
Mr. Marchand. When was that canceled?
Mr. Johnson. May 3.
Mr. Marchand. Are you absorbing any cartage now?
Mr. Johnson. Xo.
Mr. Marchand. Does your answer contain the names of all the lines
with which you have divisions or with which you allow an arbitrary
in and around Chicago ?
Mr. Johnson. I presume so. I do not remember the answer.
What is the answer you refer to ?
Mr. Marchand. The answer to the order of the Commission made
by the Wisconsin Central Railroad.
Mr. Johnson. When was it filed? If you have got our answer
there, and it is certified and verified, it is correct.
Mr. Marchand. Are you familiar with that answer ?
Mr. Johnson. I can not sa3t that I am.
Mr. Marchand. You can not say whether there are lines with which
you have divisions that are not named in that answer or not?
Mr. Johnson. I could not tell unless I read the answer.
Mr. Marchand. That would take too long.
Mr. Johnson. Tell me who signed the answer.
Mr. Marchand. It was made by you.
Mr. Johnson. Then it is correct.
Mr. Marchand. You say you do not recall this answer?
Mr. Johnson. I do not remember having made it.
Mr. Marchand. Did you read this answer before you signed it?
Mr. Johnson. It is fair to assume that I did. I do not usually
make affidavits without reading them.
Mr. Marchand. It is not sworn to.
Mr. Johnson. Then it is probably correct.
Mr. Marchand. Is that your signature ?
Mr. Johnson. No, sir; that is the signature of my assistant.
Mr. Marchand. Then may be it is correct, and may be it is not?
Mr. Johnson. So far as I know, it is. Presumably it is correct.
The presumption is in its favor, anyhow.
Commissioner Prouty. You say you put in this division with the
West Pullman road last September?
Mr. Johnson. Yes, sir.
95
Commissioner Protjty. Had any other lines, as far as you knew, a
division in effect at that time ?
Mr. Johnson. No, sir ; not as far as I know.
Commissioner Prouty. Why did you put that division in ?
Mr. Johnson. Because we thought it was a good division to make
under the circumstances governing our relations with the company.
Commissioner Prouty. Where do you connect with that road?
Mr. Johnson. Through rails we lease from the Illinois Central.
Commissioner Prouty. How long a haul does that make to reach
your rails ?
Mr. Johnson. Probably two or three miles; just about the same as
to reach the other companies; there is 110 substantial difference.
Commissioner Prouty. What had you been paying up to that time?
Mr. Johnson. I do not think we had any arrangement with them
whatever.
Commissioner Prouty. Was any representation made to you then
as to the amount of traffic you would receive if you would allow that
division ?
Mr. Johnson. Not the slightest. We are peculiarly situated with
regard to the Illinois Northern. They handle our milk business; they
built platforms to handle our milk business and they do other business
for us
Commissioner Prouty. So you pay them this division, not for de¬
livering this business to you, but for handling other business?
Mr. Johnson. For other business? We have divisions in both
ways.
Commissioner Prouty. Did you allow this division because you
thought it was fair compensation for this service, or as compensation
for some other service ?
Mr. Johnson. I will answer that question by saying that so long
as I have known—and I have been in the railroad business for twenty-
five years, and it existed before that—one of the established funda¬
mental principles for establishing prorates between lines in this coun¬
try has been a mileage prorate with a minimum of 25 per cent with
short lines ; whether that line was 1 mile, 5 miles, 25 miles, or 50 miles,
they got a minimum of 25 per cent.
Commissioner Prouty. How long had that line been making deliv¬
eries to you before you made that division?
Mr. Johnson. I can not say.
Commissioner Prouty. You do not know how long it took to fix it
in your mind that 20 per cent would be a reasonable allowance?
Mr. Johnson. It would not take long, because, as I say, that was
the recognized principle for making divisions with short lines, and
had been for twenty-five years at least.
Commissioner Prouty. Was that made as a voluntary act, or
because somebody asked you to make it?
Mr. Johnson. As a voluntary act.
Commissioner Prouty. You just said to them "-We will make you
a present of so much?"
Mr. Johnson. For performing certain services for us that would
have cost as much in other directions. They were under a certain
fixed charge.
Commissioner Prouty. Do you get about the same amount of that
traffic as you did before you put in that division with them?
96
Mr. Johnson. Just about, I think. We put it in last September.
I do not think our business with the Illinois Northern has increased
any since then.
Commissioner Prouty. Didn't yon understand at that time that
other railroads would be obliged to make that same division?
Mr. Johnson. That was optional with them.
Witness excused.
E. B. Boyd, having been duly sworn, testified as follows :
Mr. Marchand. "What is your position ?
Mr. Boyd. General freight agent of the Bock Island.
Mr. Marchand. And located where ?
Mr. Boyd. Chicago.
Mr. Marchand. Do yon know when you first put in divisions with
the Chicago, West Pullman and Southern road ?
Mr. Boyd. I think about March 1. according to the records.
Mr. Marchand. Twenty per cent?
Mr. Boyd. Y es, sir.
Mr. Marchand. March i of what year ?
Mr. Boyd. Of this year.
Mr. Marchand. Did you find it necessary to put that in?
Mr. Boyd. We certainly did.
Mr. Marchand. What had you paid prior to that?
Mr. Boyd. We liad a switching arrangement at that time, through a
contract between our own company and the Chicago, West Pullman
and Southern Kailway, by which we used each other's rails, or per¬
formed for each other reciprocal switching. That contract was ter¬
minated.
Mr. Marchand. Do you know what that cost you ?
Mr. Boyd. In what way ?
Mr. Marchand. Was it less than 20 per cent ?
Mr. Boyd. Yes, sir; materially so; so much per car.
Mr. Marchand. Do you regard the 20 per cent as excessive?
Mr. Boyd. Under the circumstances, no.
Mr. Marchand. Circumstances of competition?
Mr. Boyd. Circumstances of competition and comparison.
Mr. Marchand. What do you mean by " comparison?"
Mr. Boyd. Just as has been stated here by several witnesses, the-
usual rule of lines for the division of through rates is a mileage pro>
rate, with 25 per cent. If the line has influence with its various
industries to control that traffic we accept the inevitable, just as we do
with any of the main trunk lines which connect with us at various
points throughout the country. Of course, if we have the oppor¬
tunity of getting that freight cheaper we do not hesitate to avail our¬
selves of it. We accord them the same treatment as we do other roads.
Mr. Marchand. The answer you filed with the Commission in
response to this order mentions the Chicago Short Line Railway of
South Chicago. What road is that ?
Mr. Boyd. The Chicago Short Line Railway is a switch track
owned, I think, by the coke interests of the South Chicago Furnace
Company.
Mr. Marchand. How much of a road is that?
Mr. Boyd. I do not know the distance. It is a switching road.
o
97
]\h\ Marchand. Do you allow them a division?
Mr. Boyd. We allow them so much a car.
Mr. Marchand. How much?
Mr. Boyd. Three dollars, I think.
Mr. Marchand. What service do they perform?
Mr. Boyd. They deliver to us out about 2 miles.
Mr. Marchand. You give them $3 a car?
Mr. Boyd. Yes. sir; $3 a car.
Mr. Marchand. You mention the Calumet Southeastern in this
list. Where is that locatexl ?
Mr. Boyd. That is a road—I am not clear as to our interests there
at South Chicago—owned by various institutions. I think we have
an interest in that road. I do not know whether it is a general track¬
age arrangement or not.
Mr. Marchand. You allow them an arbitrary?
Mr. Boyd. I do not think we allow them anything. I think we run
our own engines over it. This inquiry was directed to obtaining a list
of roads with whom we had physical connection, as I understand it.
Mr. Marchand. Yes, sir.
Mr. Boyd. That is one of them.
Mr. Marchand. You mention the Calumet Western.
Mr. Boyd. That is another road similar to the other; similar
arrangement.
Mr. Marchand. Is that a portion of the Calumet Southeastern?
Mr. Boyd. They are two roads. We are joint owners. I think
there are I miles that we operate over the Calumet Western.
Mr. Marchand. You have a 20 per cent division in with the Illi¬
nois Northern, have you?
Mr. Boyd. Yes, sir.
Mr. Marchand. Do you regard that as excessive ?
Mr. Boyt). The same as I said in regard to the West Pullman.
Commissioner Prouty. Is the Chicago Short Line a railway?
Mr. Boyd. Yes, sir.
Commissioner Prottty. Do you allow a switching charge on traffic
that originates on that line ?
Mr. Boyd. On traffic that originates on that line.
Commissioner Prottty. Why do you allow that line 20 per cent?
Mr. Boyd. Because we can not get it cheaper.
Commissioner Prouty. What have they there?
Mr. Boyd. Coal and coke.
Commissioner Prouty. It has been said that there is a universal
rule or practice to allow 25 per cent as a minimum. Wiry don't you
allow 20 per cent? Who do you allow $3 a car?
Mr. Boyd. It is a universal practice with well-established lines.
Of course there are exceptions. We interchange to-day with the
Chicago Terminal Transfer, or belt line, and the Chicago Junction on
a switching arrangement, but I presume if we had to we would give
them a percentage. If we do not have to, we do not avail ourselves of
the opportunity to give money away.
Commissioner Prouty. You have to give 20 per cent, then? That
is the reason?
Mr. Boyd. Yes, sir; we have to, because of competition.
Commissioner Prouty. That is all, Mr. Boyd.
i c c—05 7
98
Mr. Hiland. I would like to ask Mr. Boyd if he has any divisions
with any of the Western trunk lines or any line that he interchanges
a regular business with and for which he performs a switching serv¬
ice only, where he allows them 20 per cent. If he does. I will learn
something in the business I would like to know.
Mr. Boyd. I will answer that in the affirmative. There are some
lines—I do not know that I get Mr. Hiland's question right—where
we perform the service where we originate the business.
Mr. Hiland. I know you do not allow us 25 per cent. It is not the
universal practice.
Mr. Boyd. It is the universal practice. Mr. Commissioner, as I
stated, and as has been stated on this stand to-day by a number of
railroad men, that it is universal—I might say universal; I do not
mean that there are not some exceptions, like switching roads in the
city, but where traffic arrangements are made between two lines they
divide on a pro rate, with a minimum of 25 per cent. We have to-day
divisions from Chicago and Cook County districts whereby we divide
on a mileage pro rate of 25 per cent minimum. I think in no one
case 20 per cent. I do not recall whether the Milwaukee is one of
them or not.
Commissioner Prouty. That is, in cases where the service rendered
invoices the haul proper, not where the road is merely a switching
road ?
Mr. Boyd. I do not mean to say that it is the universal practice to
allow 25 per cent for a switch. I do say that so long as we allow 25
per cent on traffic that is controlled by a road that performs a com¬
paratively short-haul service I do not think it is unreasonable that
we should do so in another case where the service may not be quite
so long. ,
Witness excused.
Mr.^Marchand. Does the Commissioner desire to hear any other
witnesses ?
Commissioner Prouty. What other witnesses have you here?
Mr. Marchand. Grand Trunk, Big Four, Lake Shore, and Chi¬
cago, Indianapolis and Louisville.
Commissioner Prouty. Do you expect to develop any other facts
bv introducing other witnesses?
' Mr. M arciiand. No, sir; I do not. It would simply be cumulative.
Commissioner Prouty. There does not seem to be any dispute about
these facts developed to-day.
Commissioner Fifer. Don't the answers set up the substantial facts
as to these roads that have not testified ?
Mr. Marchand. They state the roads with which they have divi¬
sions.
Commissioner Fifer. Are the amounts of those divisions stated?
Mr. Marchand. Not the amounts; no, sir. Your honors, there ivas
a witness who was requested to bring in the books of the Illinois
Northern Railway.
Mr. Bradford. T can produce the books; yes, sir.
Mr. Marchand. Have you them here?
Mr. Bradford. Yes, sir.
Mr. Marchand. How many are there?
99
Commissioner Prouty. I think the auditor answered the question.
He had some figures from the books themselves.
Mr. Marchand. I aauis going to suggest to the Commission that
there might be some statistics that Ave might Avant these witnesses
to file at some other time, and I would like to have time to consider
what Ave Avant.
Commissioner • Yeoman*. This investigation includes industrial
roads in other cities, and there Avili be other hearings in other cities
and you can ha\'e time for that. Do the attorneys of the industrial
roads care to introduce any testimony at this time?
Mr. Calhox'n. T ill an opportunity be given to review some of
this testimony to see what ought to be suggested, additional facts,
and an opportunity to present them either in AArriting or orally?
Commissioner Yeoaians. Yes: you will have an opportunity to
pfit in anything you want.
Mr. Knapp. Will that be in the nature of furnishing Avritten
statements, or Avili there be any further oral hearing?
Commissioner Yeomans. There wi II be a further hearing here.
You can present your facts by deposition or by statement. If there
is nothing further, Ave will take an adjournment.
At 1.20 p. m. the Commission adjourned.
O